The budget was a farrago of failures. Despite all the pre-budget announcements - desperate to keep the city wires from kick-starting a sell-off - this appalling budget heralds the arrival of State supremacy over commerce and the triumph of the phoney dogma of The Welfare State over the individual’s ability to plan and prepare for their future. If you think I am exaggerating, please explain in less than 100 words why it is reasonable for the state to create a system which will potentially result in not only the payment of 40% IHT on pensions from April 2027, but also in a double hit on death benefits that do not qualify for an income tax exemption, such as those where people die over 75 years old. A Deloitte spokesperson suggested that: “Assuming the whole fund is subject to 40pc inheritance tax, and the beneficiary pays income tax at 45pc on the remainder, this appears to give rise to an effective 67pc tax rate on taxable pension death benefits.” In other words, families who had carefully planned on a future that provided them with old-age care and various provisions for their welfare and comfort could now face a double layer of tax that leaves them with less than a third of the original pension pot.”
I dare you to say Reeves found this a “difficult decision.” She didn’t. The State is Supreme, and not supporting these measures implies you are against the State.
Rach, under the guidance of Circa and Our Ange, has created a system where the meek shall inherit the earth—but they won’t need to have been educated, worked, or contributed; they must merely be “Working people.” Large and tiny corporations will have all critical decisions regulated so heavily that growth will be impossible. Is it Net Zero? Does it comply with state employment programmes? Are you making a big enough contribution locally?
Actually, I tell a lie. Someone, somewhere, is already creating The Dolores Clutterbuck Foundation for Energy from Carbon Recapture, building the website, creating the myth and donating £500,000 to the Ed Milliband Bacon Sarnie fund. All this to get a slice of the £14.1bn budget for next year for the DESNZ. The fact that many of the technologies receiving this massive investment are mostly theoretical is neither here nor there. “L’Etat C’est Nous!”
As the Institute for Fiscal Studies pointed out this morning: “… DESNZ is the biggest winner in terms of extra cash. That should help us deliver our climate ambitions, but that’s a different thing from increasing the supply-side capacity of the economy. Producing stuff more cleanly is valuable, but it’s not the same as investing for growth.”
Luckily, we have a new department to ensure all this extra money is well-spent and not wasted on clothing and glasses. The Office for Value for Money is led by David Goldstone whose concept of value for money os to o only charge £950 per day - his total commitment being to some 40 of them over the year or what the OBR might call the equivalent of £247k per annum. You might remember his name because of course, he historically has delivered the London Olympics (oversaw the budget overspend of £2.45bn to £9.35bn); The London Legacy Corporation (overspends and budget failures reported but not subject to oversight); COO MoD 2017-2020 (The PAC said in 2021 that the MoD had been guilty of “repeatedly wasting taxpayers’ money”, while a Labour report identified £4bn of waste). More recently this shining example of all that is great about The State was, for the last four years, CEO of The Houses of Parliament Restoration & Renewal Delivery Authority. (The PAC expressed some surprise that he had taken a £168,000 bonus on top of a £311,000 salary for overseeing non-existent renovation work on the Palace of Westminster. In fact, no renovations took place and decisions on the project's scope were delayed until 2025 at least). You will be unsurprised to hear he has NXD board positions with HS2, British Nuclear Fuels and the submarine delivery agency. I would be grateful if anyone could point to any activity in those three organisations that suggests there is any positive activity that could be construed as being on time and on budget or indeed off the drawing board.
Meanwhile, in what is left of The City, Gilt rates are a full % higher than the Truss-spike and in the shires, Farmer Giles has already been in touch with the NFU, CLA, and all the other rural groups. I am told that mass protests against what is, in effect, a death penalty inflicted on family farming by the posturing urban elite over the grubby swine herders are well-advanced. The CLA now estimates that capping APR at £1 million will affect 70,000 UK farms. The policy will not only damage family businesses but also destabilise food security.
There is not one economics organisation (of any merit) anywhere today that even a rabid socialist can point to and say… “see - they think it is brilliant.” Case in point:
The economy will actually end weaker in five years. “Budget policies temporarily boost output in the near term but leave GDP largely unchanged in five years.”
The rise of Employer NICs is estimated to reduce labour supply by 50,000 average-hour equivalents.
Private investment will diminish in an economy with little spare capacity.
Spending increases yearly, totalling £180 billion by the end of the parliament.
Public spending is £83 billion a year higher than forecast in March and settles at 44% of GDP in 2029-30, 5% higher than pre-pandemic.
Tax as a share of GDP rises to its highest level on record, reaching 38% of GDP by 2027-28.
Public sector net financial liabilities are forecast to peak at 84% of GDP in 2026-27, though debt excluding the Bank of England rises annually to 96% of GDP in 2029-30.
The report predicts only a 54% chance of the Government hitting its fiscal mandate.
Real household disposable income per person grows just over 0.5% a year on average over our forecast. Growth is flat in 2026-27 and 2027-28 as policies shift real resources from private incomes to devote more to public service provision.
CPI Inflation to rise to 2.6% in 2025, having nearly reached the 2% target this year.
Interest rates will be 0.25% higher.
Mortgage rates and house prices are forecast to rise.
Average annual tax rise of £800 per employee from NICs.
Source: Office for Budget Responsibility
Meanwhile, in Australia, my view that the country has reverted to its traditional core values and genetic colonial make-up has been validated by Racing Victoria’s veterinary panel, who decided that a Group 1 horse in a handicap with 8st 7lb and Ryan Moore riding him, was suffering from an increased risk of breaking down, dying, causing an outbreak of Ebola and encouraging the Chinese into making very safe electric cars that are entirely fire-proof, for tuppence. So they banned him.
To show they mean business, they banned two local no-hopers today. I’m not one for slinging toys out of the pram (actually, I am, but with thermo-nuclear attachments!) - but I would shut down all Australian relationships with Coolmore and tell all breeders, bloodstock agents and trainers that no progeny of any Coolmore Stallion is ever to be sold in Australia again because they are simply too fragile and too likely to break down.
What happened to Oz? They were amongst my favourite people ever. I used to drink in a bar near Australia House in the Strand, the only place in the UK where you could buy Fosters in 1970.
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