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\t\tKeir Starmer is under pressure from Labour MPs to protect welfare spending. \t<\/p>\n
Britain does not suffer from too much ambition, but from too little encouragement \u2013 and that taxing aspiration will only make that worse, says Brandon Lewis<\/p>\n
It\u2019s difficult to remember a time when a sitting British government decided to trail a new Budget in the press for over 11 weeks. Yet here we are, with just under a month before the Autumn Budget arrives and the Treasury has blown innumerable tidbits of economic policy down the streets of Westminster like leaves floating in the autumn wind.\u00a0<\/p>\n
While admittedly a time-honored trick, Labour\u2019s lead time here belies an absence of strategy and a lack of any preparatory groundwork. It reveals a party in perpetual response, leading with rhetoric rather than policy, and making crucial economic decisions on the fly.\u00a0<\/p>\n
We have heard about reduced contributions to tax-free cash ISAs, will-they-won\u2019t-they tax raises on a narrow base, and higher levies on homes valued above a certain threshold. Leadership has leaned heavily on familiar tropes about fairness, pledging to increase tax burdens on \u201cthose with the biggest shoulders\u201d while floating further tinkering with inheritance and capital gains taxes. But the uncertainty and absence of ideological grounding have antagonised savers, chilled business investment and frozen property market sectors.\u00a0\u00a0<\/p>\n
Labour does not seem to understand that the country does not suffer from too much ambition, but from too little encouragement \u2013 and that taxing aspiration will only make that worse. Entrepreneurs and innovators alike are not an endless resource to be tapped and when taxation becomes punitive rather than fair, the results inevitably drive talent and ambition elsewhere.\u00a0<\/p>\n
The government\u2019s inability to manage growth without taxation has meant the Labour is likely to do the unthinkable and expand taxes to the broadest base possible, backtracking on a core manifesto pledge.\u00a0<\/p>\n
It is an unfortunate and unnecessary position. Economists have warned for over a year that Reeves\u2019 \u00a310bn fiscal headroom was too low, bound to be knocked down when faced with even the slightest headwind.\u00a0<\/p>\n
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