The Garrulous Jay – The Rachel Papers [top secret]

For those of you who fancy a flutter on political developments I have good news… The Garrulous Jay has, through a secret contact known only as ‘JA’ (perhaps recently repatriated to Australia), obtained access to a top-secret draft paper from an email account belonging to the Shadow Chancellor, Rachel Reeves.

The document outlines some of the key measures to be introduced in the first Budget of a new Labour Government, should they claw their way to victory next Thursday.

I have condensed the document down to some edited highlights which I hope will be of interest, even to those of you who don’t have an account with a bookmaker.

Recommit
o    Make cast-iron commitment not to put up income tax, NICs or VAT
o    Soundbite – “This Labour government makes promises to hard-working British people, and it keeps those promises”.

Revise
o    After 14 years of economic mismanagement the legacy left by the Tories is worse than we had feared
o    Soundbite – “We will not duck difficult decisions.”

Contextualise
o    Provisional OECD data shows that UK taxpayers paid less tax in 2022 than 15 other leading economies including Germany, France & Spain.

Policy – Capital Gains Tax
o    Reaffirm no CGT on people’s main homes
o    Harmonise CGT rates with Income Tax rates on all other assets
o    Soundbite – “Why should people who earn more pay more tax than those who already have more?”

Policy – Inheritance Tax
o    New single nil rate band (NRB) of £500,000 per person to replace current NRB/residence NRB system
o    Introduce £1/£2 tapering of NRB for estates worth over £1.0 million: no NRB for individual estates valued at over £2.0 million
o    Soundbite – “A simplified system where better off families pay a bit more when they pass on their wealth to the next generation.”

Policy – Pensions
o    A new Department for Pensions & Social Care
o    Royal Commission to look at fairness in the State Pension system with a view to means-testing with savings ringfenced for social care
o    Remove marginal rate of tax relief on private pension contributions
o    Soundbite – “It’s wrong that taxpayers should give more back to those who already earn more”
o    Minimum employer auto-enrolment contributions increased to 7%, with incentives introduced for AE schemes to invest in British businesses
o    Soundbite – “In the long-term everyone benefits: more money for pensioners and more money to grow the UK economy.”

Policy – Savings
o    A simplified JISA/ISA system
o    Abolish £9,000/£20,000 annual contribution limits and introduce a £250,000 Lifetime Contribution Allowance (LCA)
o    Soundbite – “Freedom for parents and younger savers to save more, with everyone still being able to save £250,000 over their lives and never pay tax.”

Policy – Council Tax
o    Review Council Tax banding to ensure fairness in local authority funding
o    Soundbite – “Everyone should pay a fair amount towards supporting their local communities”.

Bring on the 5th July!