The heat is on John Healey as he lines up next week’s Budget. And things are starting to get frenzied.
Chancellor John Healey looks set to do more harm than good next week (Image: Getty)
Yesterday, in a mad moment of optimism, I suggested Healey might go easy on the tax hikes next Wednesday. Those were the signals coming out of Number 11, with suggestions the chancellor would deliver a “do no harm” Budget on October 28. Given all the harm Rachel Reeves inflicted during her two horror Budgets, that would be a step up. Doing actual good is too much to ask for, I suppose, especially from a Labour chancellor. But it’s better than the outright vandalism we’ve seen.
I’m not so optimistic today. As Healey’s fiscal headroom shrinks yet again, he’s starting to show signs of panic, as the signals get worryingly mixed. Last week, for example, he called financial services one of the “jewels in the crown” of the UK economy. Yet later that same day, he signalled he may blitz the banks anyway. Industry insiders accused Healey of “breathtaking hypocrisy”. That’s the Labour I know. It’s spotted the crown jewels, so of course it’s going to tax them.
A bank raid could raise a few billion and bolster Prime Minister Andy Burnham’s socialist credentials. The banks won’t win much sympathy, but those taxes will be passed on to customers through lower savings rates, higher borrowing costs and reduced lending. Just what we don’t need. Andy Burnham and Healey claim they want growth, but today we’ve learned that they’re plotting yet another raid on small businesses. What are they on?
Healey is considering charging income tax when family businesses are handed on to the next generation. A family business worth £1million could face a £450,000 tax bill under the reported plan. Reeves has already undermined the case for building a family business by slashing inheritance tax relief. Now Healey could destroy owners’ retirement plans and make them more likely to shut up shop than pass their business on.
Family businesses are the backbone of the economy, yet Labour seems determined to tax them out of existence. Wiping out entrepreneurs while transferring the proceeds to wasteful state quangos such as Ed Miliband’s Great British Energy is beyond madness.
Healey should scrap Reeves’s inheritance tax raid on family businesses, just as she should reverse the IHT blitz on farmers. We should be encouraging Britons to build businesses and pass them on, not punishing them for doing so.
Healey’s raid might raise a few hundred million, but wll cost us multiples more if people give up and entrepreneurs leave the country.
Almost one in three of Britain’s wealthiest are considering leaving the UK amid growing tax fears. Labour likes to pretend they aren’t leaving, but they are. The Bloomberg Billionaires Index suggests billionaires with a combined net worth of £120billion have left since the 2024 general election.
The Left’s next response is to say let them go, we don’t need them. But we do. If the rich aren’t paying taxes here, ordinary people will pay even more. Naturally, there’s no sign that Healey plans to cut public spending by so much as a penny. Now that would stir panic on the left.
For a heady moment, I hoped Healey might keep the damage to a minimum. Now he looks set to do more harm than good, just like Reeves. We will find out in nine days.