Episode Details

There will be no growth in the UK.

Chancellor Reeves’ budget was designed to placate left-wing back benchers, who want greater spending, and the bond markets. In that, it has succeeded. For now.

The ever-shrinking part of the country that actually builds wealth (and remember there are only 3 ways to build real wealth: you grow stuff, you mine stuff or you make stuff. Everything else is just pushing it about) is being further taxed to pay for it all. There are now extra taxes on property, dividends and savings, while fiscal drag means more people will pay higher rates of income tax (closing in on 25% of workers by 2030, apparently), further diminishing their chances of improving their lot. Never mind the currency debasement of the money they are being paid in.

Stealth taxes, such as fiscal drag, get my goat because they are so disingenuous. But perhaps of greater concern are doors which have been opened to new sources of taxation. The extra levy on high value properties, for example, has been set at £2,500 per year for properties in the £2-£5 million bracket, and £7,500 for properties above.

A £2 million house in London is not some decadent billionaire plaything: it is often a mere terraced house built 150 years ago for an ordinary working man and his family.

My friend, who is uber successful and very left wing, has an expensive house in Hampstead. She was actually happy about this tax, because she thought it was fair - and because she thought she was going to get hammered for higher taxes elsewhere. What she doesn’t realise is that this is just the beginning. The door is now open to further property taxes and the only way is up.

What’s more, as currency gets debased, fiscal drag means more and more properties will fall into this category.

Income Tax began as a tax only on higher earners. Within a few decades, ordinary workers were hit. Now they’re paying higher rates. These new property taxes will go the same way.

Never mind that you bought the property with taxed income, and then paid stamp duty. It’s endless.

Between that, landlord taxes, extra tenant protection, Section 24 and the plethora of petty regulation, the age of the small landlord in Britain is now over. Renting, like so many other parts of the economy, will become the domain of larger corporations. And we will all lose because of it.

It also means that real estate is over as an investment. All it really was was a shield against currency debasement, but those days are now behind us.

Similarly, the door is now open for local authorities to charge a visitor levy. This tourist tax will start small and then rise, like every other tax in history. We already have the tax on moving that is stamp duty, now we have this. If you tax movement, people will move less. If you have no movement, you have no growth. It really isn’t that difficult.

They do not seem to understand that capital flows to where it is welcome. If you tax it, it will not come; it will go.

What is the golden rule of the magnum opus? More taxes or higher rates do not equal greater revenue. But the reverse.

We are now, as you know, taxed at the highest rate since the Second World War. What is the money going on? You don’t need me to tell you how much is being spaffed. Waste, fraud, incompetence, misallocation. Government is the most inefficient means of spending money there is. As if to prove my point, they couldn’t even make the announcement about how they’re going to spend your money competently.

They’ve spent the last few months leaking stuff. Leaking is a tool of government, so when it backfires, at least we have some karma.