Was it something we said? Matthew Elliott wrote in CapX today about the Jobs Foundation’s campaign to defend risk-takers from the threat of a capital gains tax raid in the Budget. And, just like that, John Healey has let it be known that, despite pressure from many senior Labour figures, including Louise Haigh, Burnham’s de facto deputy, he will not be announcing plans to equalise income tax and CGT on October 28.
One of the FT’s sources in the Treasury called the proposal ‘batshit crazy’ – and since it is a tax rise that even HMRC admits would actually reduce the amount collected, who are we to disagree?
Is CGT reform dead? Don’t get cocky – and keep a tight grip on your assets. Labour mega-donor Dale Vince was tweeting today that even with full equalisation off the table, the Government could still raise CGT rates by four or five percentage points.
Below you’ll find all the latest pieces from CapX, plus what we’re reading from around the web.
Marc Sidwell
Editor, CapX
Today’s Takes
Fresh thinking from CapX
A capital gains tax raid would backfire
Matthew Elliott
‘Entrepreneurs do not create jobs because the state asks nicely; they create jobs when the return on risking their capital and their time is worth it.’
John Healey says he will not equalise capital gains tax with income tax at this month’s Budget. This is a good sign that he is resisting at least some of the economically-damaging policies promoted by his colleagues inside the Labour Party. Even HMRC’s own estimate shows that a 10 percentage point rise in CGT would lose £3.5 billion a year. Read More
How to make economics exciting again
Mani Basharzad
‘The Nobel Prizes of recent years have performed a valuable service. They have brought the focus back to growth: what creates it and, most importantly, how it can be lost.’
Among the contributions of this year’s winner of the Nobel Prize in economics is an explanation of why some countries are richer than others. This is the most important question in economics. Many economists are obsessed with explaining poverty. But poverty is our natural state. At a time when populists of Left and Right are questioning the importance of growth, we need Nobel laureate who remind us how much it matters. Read More
Stat of the Day
Best of the Web
We’ve never been so in hock to the bond market
Gerard Lyons, The Times 🔒
‘We are in a new normal, with significant ramifications. Cheap borrowing is being replaced by expensive refinancing.’
Monetary policy is being tightened across much of the globe, as war feeds inflation and the AI investment boom increases borrowing costs. But monetary policy may no longer be able to help the Government with its debt burden as it did in 2008. Financial markets are placing a greater weight on whether governments have credible policies to boost economic growth or reduce debt. The UK’s high-debt, low-growth economy is a death trap. We need to break free. Read More
🎧Kemi Badenoch has gone back to first principles
James Price
Is Britain next for youth unrest?
David Willetts, ConservativeHome
‘If these young people emerge to a blocked labour market with few job opportunities, then trouble is brewing.’
France and India are both experiencing lots of youth protests. What they both have in common is a generation of young people that are struggling to advance in life while nepo babies succeed. Patterns of youth protests usually happen 15-20 years after a surge in births. On that basis, the UK may be due a protest soon. With the next generation facing broken markets in jobs and housing, things could escalate fast. Read More
The Capitalist: Andrew Griffith & Liam Halligan
And if you want more...
– In defence of the Civil Service (The Critic)
– Brace yourself: tax rises are coming (CPS 📹)
– Will data centres drink us dry? (Substack)
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