The pre-budget airwaves are quiet... too quiet

Is that because no news is good news?

The pre-budget airwaves, normally teaming with feverish speculation, are ominously quiet. There doesn't even appear to be a 'book' on how long the Chancellor will speak for (or not that I have come across yet at least).

Unless George can produce the ubiquitous (most likely scrawny and headlight-dazzled) rabbit out of his (or anyone else's) hat, we think the Budget will aim principally for stability, with few big changes and a broadly pro-business stance to keep encouraging growth. In terms of predictions as they might affect those in the private wealth industry, we can predict what he won't do (and a little of what he might), with some confidence:

Inheritance tax won't be abolished and the Nil Rate Band won't be increased (OK - we already know that). Tinkering might involve a resurrection of the well-rehearsed fear that the Chancellor might abolish the provision whereby you can vary a will or intestacy within two years of death (usually to take advantage of an exemption from inheritance tax for gifts to charity, spouse or relief for business or agricultural assets), or even perhaps the seven-year rule for gifts, but we think this is unlikely. Given that it raises little in terms of revenue we don't think the rate will be changed either.

Capital gains tax: The extension to non-UK individuals could have been made when liability was extended to non-UK corporates in relation to real property. Although some see this in itself as an anomaly, the rates have been tinkered with over recent years without much evidence in terms of overall increase in the UK 'tax take'.

Income tax: A further reduction from the incoming 45% is unlikely, as are any major changes to other rates or (we hope) further meddling with pensions. The personal allowance could rise to £10,000 or even more, to ensure that those on the minimum wage (around £11,200 p.a.) do not pay tax.

Mansion tax: Although it has been much discussed, this seems unlikely, as it has never had Coalition Government support. The mooted tax would be primarily a tax on London and the South East, and many of those affected, especially at the introductory level of £2 million, may well be unable to pay the tax (particularly those who inherited their properties, are already mortgaged to the hilt, and/or have lived in the same house for many years).

Tax avoidance: Given the introduction of the General Anti-Avoidance Rule, which is extremely wide in its application, we struggle to see what else can be bolted on to HMRC and HM Government's ever increasing arsenal.

So that leaves us with very little in terms of predicting what he might come up with. My own wish list would include:

- a flat rate of tax (including both income and capital gains);

- the abolition of inheritance tax; and

- a four wheel drive car tax - a much better indicator of surplus wealth, better for the environment, easier to collect than a mansion tax and a positive benefit for those who have to contend with them in urban settings.

Sophie Mazzier is counsel at private client law firm Maurice Turnor Gardner LLP

This article first appeared at Spears magazine.

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Why isn't Labour putting forward Corbynite candidates?

Despite his successes as a candidate, the organisational victories have gone the way of Corbyn's opponents. 

The contest changes, but the result remains the same: Jeremy Corbyn’s preferred candidate defeated in a parliamentary selection. Afzhal Khan is Labour’s candidate in the Manchester Gorton by-election and the overwhelming favourite to be the seat’s next MP.

Although Khan, an MEP, was one of  the minority of Labour’s European MPs to dissent from a letter from the European parliamentary Labour party calling for Jeremy Corbyn to go in the summer of 2016, he backed Andy Burnham and Tom Watson in 2015, and it is widely believed, fairly or unfairly, that Khan had, as one local activist put it, “the brains to know which way the wind was blowing” rather than being a pukka Corbynite.

For the leader’s office, it was a double defeat;  their preferred candidate, Sam Wheeler, was kept off the longlist, when the party’s Corbynsceptics allied with the party’s BAME leadership to draw up an all ethnic minority shortlist, and Yasmine Dar, their back-up option, was narrowly defeated by Khan among members in Manchester Gorton.

But even when the leadership has got its preferred candidate to the contest, they have been defeated. That even happened in Copeland, where the shortlist was drawn up by Corbynites and designed to advantage Rachel Holliday, the leader’s office preferred candidate.

Why does the Labour left keep losing? Supporters combination of bad luck and bad decisions for the defeat.

In Oldham West, where Michael Meacher, a committed supporter of Jeremy Corbyn’s, was succeeded by Jim McMahon, who voted for Liz Kendall, McMahon was seen to be so far ahead that they had no credible chance of stopping him. Rosena Allin-Khan was a near-perfect candidate to hold the seat of Tooting: a doctor at the local hospital, the seat’s largest employer, with links to both the Polish and Pakistani communities that make up the seat’s biggest minority blocs.  Gillian Troughton, who won the Copeland selection, is a respected local councillor.

But the leadership has also made bad decisions, some claim.  The failure to get a candidate in Manchester Gorton was particularly egregious, as one trade unionist puts it: “We all knew that Gerald was not going to make it [until 2020], they had a local boy with good connections to the trade unions, that contest should have been theirs for the taking”. Instead, they lost control of the selection panel because Jeremy Corbyn missed an NEC meeting – the NEC is hung at present as the Corbynsceptics sacrificed their majority of one to retain the chair – and with it their best chance of taking the seat.

Others close to the leadership point out that for the first year of Corbyn’s leadership, the leader’s office was more preoccupied with the struggle for survival than it was with getting more of its people in. Decisions in by-elections were taken on the hop and often in a way that led to problems later down the line. It made sense to keep Mo Azam, from the party’s left, off the shortlist in Oldham West when Labour MPs were worried for their own seats and about the Ukip effect if Labour selected a minority candidate. But that enraged the party’s minority politicians and led directly to the all-ethnic-minority shortlist in Manchester Gorton.

They also point out that the party's councillor base, from where many candidates are drawn, is still largely Corbynsceptic, though they hope that this will change in the next round of local government selections. (Councillors must go through a reselection process at every election.)

But the biggest shift has very little to do with the Labour leadership. The big victories for the Labour left in internal battles under Ed Miliband were the result of Unite and the GMB working together. Now they are, for various reasons, at odds and the GMB has proven significantly better at working shortlists and campaigning for its members to become MPs.  That helps Corbynsceptics. “The reason why so many of the unions supported Jeremy the first time,” one senior Corbynite argues, “Is they wanted to move the Labour party a little bit to the left. They didn’t want a socialist transformation of the Labour party. And actually if you look at the people getting selected they are not Corbynites, but they are not Blairites either, and that’s what the unions wanted.”

Regardless of why, it means that, two years into Corbyn’s leadership, the Labour left finds itself smaller in parliament than it was at the beginning.  

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.