Bid farewell to Labour’s nanny state – their bully state has arrived
As we await Labour's Halloween Budget, it is difficult to know if we are being subjected to an example of masochistic media management so we sigh with relief after the event, thinking "it wasn't that bad" and "it could have been worse".
Or maybe it really is incompetence, that Rachel Reeves, Sir Keir Starmer and the Government in general are unsure about what to do.
Either way, many people are not waiting to find out and are either changing their financial exposure by selling assets and adjusting their commitments now, or simply leaving the country for a more attractive tax jurisdiction that shows more appreciation for what they have achieved and built up.
A great deal of informed calculations, not least on these pages, has sought to anticipate what Ms Reeves will do.
It has been informed by what Labour-leaning think tanks have said over the last four years of Sir Keir's leadership, how Sir Keir and Ms Reeves have reacted and how so many of these policy researchers have ended up as Labour MPs or advisers at the heart of decision making.
From Labour's performance in its first three months, there are two key lessons. Firstly, that Labour's election pledges were worthless – and secondly, that it will exercise its power ruthlessly in a manner the Tories never did.
This tells us we can expect more than just the predictable well-to-do targets feeling the pain of higher taxes. Labour will introduce new taxes to find new ways to raise revenues or change our behaviour.
We already know from Sir Keir's rush to introduce a ban on smoking in beer gardens that the nanny state will be enforced to a more oppressive level. Next, we can expect by raising duties and inventing new taxes, the bully state will truly arrive. So much for his election pledge to "tread more lightly" on people's lives.
One of Labour's favourite think tanks, the Institute for Public Policy Research (IPPR), published earlier this month a report calling for "new levies on unhealthy food, tobacco, vapes, gambling and alcohol" that "could raise over £10 billion per year by the end of the decade".
When it comes to imposing puritan codes of consumption the IPPR has form, having previously advocated plain packaging for sweets, crisps and sugary drinks.
Now it justifies a new tax or levy on "unhealthy foods" to provide funds to "save our NHS" while reducing obesity – but evidence tells us it will only drive up living costs without reducing our waistlines.
The IPPR also proposes a new levy on tobacco companies to cap their profits. Well if it can be done to oil and gas businesses, why has it not been done to tobacco companies?
This time tobacco profits would face a variable levy set by government appointed auditors running the numbers. Also proposed is a hike in gambling duties to raise revenues from £2.9bn to £3.4bn – but surely it would only be a matter of time until the bookies have their profits capped too – then why not Walkers Crisps and Irn Bru?
Any idea that these proposals are about improving the health of the nation and not just taxing any vestiges of pleasure are snuffed out by the IPPR's call for a duty levied on vapes.
Probably the most beneficial impact on public health over the last couple of decades has been the development of vapes as an alternative to cigarettes, yet the IPPR wants to turn people away from this choice.
Again, evidence shows prohibition-based policies can lead to worse outcomes, with a propensity to smoking doubling among young people following a restriction on vaping in San Francisco. Expect the Vape Excise Tax to be rolled out by Ms Reeves with health secretary Wes Streeting mistakenly cheering it on.
All these new taxes and duties are enough to turn you to drink, but there's no escape there, for the IPPR wants an alcohol duty escalator (like that the Tories stopped on fuel duty) of inflation plus 3pc year-on-year.
Unfortunately for Ms Reeves, the latest evidence shows last year's increase in alcohol duty cost the Exchequer nearly £300m in lost income.
New research using Office for Budget Responsiblity (OBR) estimates and HMRC revenues suggests Jeremy Hunt's 10.1pc increase in spirits duty has meant the Treasury took in £298m less than expected in its first year and has now and has led to the OBR cutting its estimate by £349m.
To hammer the cause and effect of higher taxes home, analysis by the Scotch Whisky Association revealed six cuts or freezes to spirits duty during the last eight years generated more revenues than expected, while two tax increases generated less – with the OBR getting it wrong on every occasion.
The Telegraph has also reported industry expectation that Ed Miliband will revive the idea of a "boiler tax", derived from penalising heating companies which fail to reach arbitrary targets for sales of heat pumps, driving up the cost of regular boilers to recoup their fines.
Also coming down the tracks is a new producers' tax on packaging supposedly to encourage recycling that has got drinks companies warning of price rises of 18p–25p a bottle before VAT. Described as "nuts" by the managing director of Belvoir Farm cordials, the levy would practically consume all its profits if not passed on to customers.
And then there's the idea of introducing an aviation fuel duty to all jet flights leaving British runways. Its supporters want it introduced at 9p a litre rising to the same level as road fuel duty of 52.95p a litre so it might bring in an estimated revenue of £6bn annually – pushing up the price of flights for businesses and holidaymakers alike. That's on top of air passenger duty which also taxes fuel use.
Whichever way we turn, be it Ms Reeves' need for revenues, Mr Streeting's desire to control our behaviour, or Mr Miliband's green drive to a net zero environment , we can expect not just higher taxes – but new taxes – that makes ordinary living more expensive.
"Change" begins, indeed, but is it the change you wanted?
