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By Earl Aelfheah · Posted
Money has to be raised in order to slow the almost terminal decline of public services bought on through years of neglect under the last government. There is no way to raise taxes that does not have some negative impacts / trade offs. But if we want public services and infrastructure that work then raise taxes we must. Personally I'm glad that she is has gone some way to narrowing the inheritance loop hole which was being used by rich individuals (who are not farmers) to avoid tax. She's slightly rebalanced the burden away from the young, putting it more on wealthier pensioners (who let's face it, have been disproportionately protected for many, many years). And the NICs increase, whilst undoubtedly inflationary, won't be directly passed on (some will, some will likely be absorbed by companies); it's better than raising it on employees, which would have done more to depress growth. Overall, I think she's sailed a prudent course through very choppy waters. The electorate needs to get serious... you can't have European style services and US levels of tax. Borrowing for tax cuts, Truss style, it is is not. Of course the elephant in the room (growing ever larger now Trump is in office and threatening tariffs) is our relationship with the EU. If we want better growth, we need a closer relationship with our nearest and largest trading block. We will at some point have to review tax on transport more radically (as we see greater up take of electric vehicles). The most economically rational system would be one of dynamic road pricing. But politically, very difficult to do -
Labour was right not to increase fuel duty - it's not just motorists it affects, but goods transport. Fuel goes up, inflation goes up. Inflation will go up now anyway, and growth will stagnate, because businesses will pass the employee NIC hikes onto customers. I think farms should be exempt from the 20% IHT. I don't know any rich famers, only ones who work their fingers to the bone. But it's in their blood and taking that, often multi-generation, legacy out of the family is heart-breaking. Many work to such low yields, and yet they'll often still bring a lamb to the vet, even if the fees are more than the lamb's life (or death) is worth. Food security should be made a top priority in this country. And, even tho the tax is only for farms over £1m, that's probably not much when you add it all up. I think every incentive should be given to young people who want to take up the mantle.
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