Bloomberg Audio Studios, Podcasts, radio news. Welcome to the Marin Talks Money Weekly round up, our debrief on the biggest stories in markets and economics. I'm Marin Zumset, Web Editor at Large for Bloomberg UK Wealth.
I'm Jointed stair Peg what's at of the Money to stilled newsletter and senior reporter at Bloomberg.
John, We need to talk about poor Rachel Reeves again, don't we?
Poor Rachel Reeves.
You wrote this week about how her next fiscal event is coming up very shortly, and you think she might stand up and say do you want the good news or the bad news? Which point everyone will roll around laughing because everyone knows that there is no good news.
There is no good news, and I mean a lot of this is down the Unfortunately, Rachel Reeves just lacky political nouse. I think, to be honest, there was daft of her to talk up her fiscal rules so aggressively and then leave no room for error in the last budget, and it's basically what she's done. So the fiscal rules themselves are just the same made up nonsense that every kind of light chancellor has had for years and years.
Now.
They pretty much always miss them, but it's all about talking a good game about how you're going to hit them, so then they themselves don't matter anywhere near as much as they're made out to matter. But obviously the whole Liz Trusts kind of LDI coincidence tobacco meant that, you know, Raach Reeves has made a really big deal of how I'm going it is to meet these rules. Otherwise the guilt market will definitely blow up. At least that's the perception's trying to give, and so she has to stick
to them. She's also said I'm not going to put up taxes anymore, and so that's why it's basically all kind of falling on the idea that benefit cuts are somehow going to you know, fill this black hole, and it will probably find the figures enough that the RBR comes back and says, Okay, well you can eploy make it as long as we make this outlinedish assumption of what's going to happen in phases team.
But the benefit cuts and if there's been a lot of talk about welfare this week, and a lot of talk about the various different things that you can access via the welfare system, particularly new cars and so on, notability which you and I have talked about and been scandalized by for about ten years, and now finally everyone else is also scandalized by it. I'm just actually going to read you the first paragraph from the Times today which I was interested by. Do you want a free
new car? There are one hundred and sixty seven models to choose from the Motibility website. If you handle a part of your weekly mobility benefit, you can drive away with the least Kia Picanto web fifteen thousand pounds. You
can go a little further. I won't to do the whole thing because we will got there, but just by now you can go a little further and you can get a bmw I four M sport And when you do that, free rod, tax ric cover, servicing, mot turan, winscreen repair, installation of a charge point, blah blah blah blah. But this is interesting because it's one of the first things that's really cut through with the public on the extent to which welfare has become slightly out of control.
The idea that one in five new cars on the road could be part of a welfare scheme is one of the first things that's really got everyone going, well, hang on a tech, have things gone a little bit too far? Are people who are using the system slightly ruining it for everyone who needs the system? Etc. So she had a window, she had a window, didn't she to do something about welfare and do something about the
various problems in the benefit system. But she seems to have only done it to a very mild degree five billion or so, so she's not really helped herself in the way that she possibly could have.
There, Well, that's the problem. You're acting from a police of panic. There should be sensible to forms of their stuff, and it's all very complicated, and it's all because of the various definite centers, and also the edity and thing is that people keep taking the statistics at face value.
So you'll still get people arguing Blaine that this you know, there's been that mental health issues have rocketed because of you know, COVID or because of social media or whatever, when in fact that the obvious kind of point is that there's being a change in the benefits system that has made people decide to apply for disability benefits rather than the previous jobless benefits, which which have changed so it's that that's what's driving it, and we may be
meaning a much more clear eyed view of this stuff. And unfortunately you don't get that because obviously because politics, but also because Rachel Reeves has left herself in this sort of panic zone where she needs to find money fast, and probably all that will happen actually is that whatever does get done will mean that some unusually honest group of people who genuinely need this stuff will get locked out of the system, and everyone who's scamming it will still be able to scam it.
Yeah. Well, we have ideas for her there, don't we We have a de will come back another time, we do. There are lots of things she could do. She could sell them coin. We're one of the biggest. UK government is one of the biggest holders of bitcoin in the world, along with the US government and the North Korean government. I gather an awful lot of bitcoin.
Interesting, she missed the top.
She missed the top, but still on the list. She could she could give it a go. She could instruct the Bank of England to sell the rest of the gold.
Yes, yes, revalue the gold in America.
Okay, there is one group of people who really feel that they could help Rachel reads out a lot, and I'm glad about that because she needs someone behind her. And that is a new group called the Patriotic Millionaires UK. And we've talked about this slot before, John, but only in the US context. There's a group of the apparently super rich in the US. Do you think that every everything can be solved if they pay more tax? So they would like to be forced to pay no tax
by the government. They don't want to do it voluntarily. I don't know why, but they want the government to force them and other rich people to do it. Now we have our very own, very own network of millionaires. Patrock Millionaire's UK is a non partisan work of British millionaires, multiple industries and backgrounds from across the UK. It delivers a single message, no single mission missions. We're back to missions,
a single mission delivered the voice of wealth. Who knew wealth had a voice to the better written by changing the system to end extreme wealth and make those with it make their fair and proper contribution. So what they want is a wealth tax at a couple of a wealth tax at a couple of percent a year. And they've had a van going around Westminster with various slogans on it about how the well off should pay more tax. I'm not particularly keen on this. I'd like to hear
your views on it. I'm not particularly keen on it because all the evidence shows that it won't work. Wealth taxes are very, very difficult to implement. The very wealthy are very mobile. They mostly just leave and that's why almost nobody has a wealth tax of this type anymore. And the other thing I would say is that the government is already doing is absolute utmost to tax wealth. The UK has a lot of wealth taxes, inheritance taxes, a wealth tax non index capital gains as a wealth
tax are you're in the main you're paying. You're paying tax on inflation gains, nominal gains rather than real gains. So that stamp duty is a wealth tax. It's a wealth tax when you see stamp on your equity trading, and it's a wealth text when you see it on the buying and selling of how's it. So that's three just for starters. I wouldn't have said that we need a new one. But John, you may feel differently.
No, I don't feel deffinitely. I think the tax system overall should be simplified. And I think that if it was simplified then you would probably start to balance out on the und income, mind the un income. But I think that's a completely different issue. I mean, the practical point is actually the most important one, regardless of anything else.
If you are saying that we should charge the super wealthy whoever you define super wealthy eyes if you'd see and that you should charge a group of people one percent of their overall value a.
Year thereafter two actually.
Well, yeah, exactly between one and two percent, or those people will leave because it's worth the way to leave, because if you're team two percent a year, eventually you won't have you wouldn't be enough to be over the threshold quick says from whether that wealth is kind of liquid or not. And a lot of the thing it's not liquid is just what's peeing pretty much any place to move to a country that is not going to do that to you, and there's plenty of them.
So well, I mean, one of the things that really does do is it really really does disincentivize any kind of entrepreneurialism or capital formation. So you know, if you set up a company that in say I don't know, fintech of some kind, and it's valued on paper at thirty million pounds, but it isn't really worth thirty million pounds because you can't sell any of it. You can't liquidate your two percent of a company like that here or there. So what do you do where you just leave?
I think the really important point is that this is already happening right now with the new inheritance tax changes. No, because I think what often gets overlooked, and some kind of unaccountably somewhat gets overlooked, is that it's not just the farmers who have large amountcy la quid assets and relatively low liquid income with which to then pay off the inherence tax built and therefore may need to break
up their businesses. The player family businesses that are in the same situation, and I think probably they haven't attracted as much attention because perhaps they don't want to draw as much attention to themselves, and because there are solutions, but they're expensive solutions. So I think that as you say, we we already are getting to the point where the walth tax is are quite detrimental and disincentivizing. Taking any furthers can be a mistake.
Yeah, they also stop people coming here. And I was having a conversation only this week about someone who would have been living in the UK but is not living in the UK because he doesn't want to be classified as a resident in the UK, because he doesn't want fall into the ten years for the iht NE. So we now we have people who don't come here as a result. And it's a bit like with Scotland's income taxes being higher than England's income taxes. You know, you
can't measure who didn't come. You can't measure who didn't come, and it really matters. But I said I had ideas today. I'm only offering solutions today, I'm not offering problems. So I have a solution for the Patriotic Millionaire's UK. And I'm going to give you the entire website address because I want to make absolutely sure that they can really get that www dot gov dot UK Forward slash guidance
forward slash voluntary payment donations to government. You can go there and you can give as much of your money as you like to the government right now, right now. Just go there, do it. Hand the money over. They can just hand it directly demotibility. Bob's your uncle.
I mean they could take all the glids they get for having the institutions that spreads these divine driving around to Westminster or the dest it and put that money towards the government. I mean that much. That must be a few hundred pounds.
Maybe, I don't think the bankles that much. Don't look like that greater event. That's deflection, John, deflecture from the core, which is that you can give as much money to the government as you like. No one is stopping you. Never has. So that's my top tip for the day. Top tip.
There's not one partisan idea as well. I would take an issue with that so slightly. There's not non partisan to want to get rid of wealth. And the underpinning organizations that these are spend offs from are generally things you would describe as being the thing quite far left would be a reasonable description, and the Tax Justice Network, I think. So you know, they can have all these like patriotic millionaires, but it's you that's just a cover.
So I'm feeling a bit mean about the patriote millionaires. I've had quick rundown the list of who they are. I'd be quite interested to see proof from all of them that they'd qualify for said tax. But that's just that's just mean. So my top tip today has been for people who are rich and would like to be less rich, which is perfectly valid. But I think your top tip today is probably for people who'd like to be richer coming up to the end of the tax here.
Yes, yes, so I guess ahead of this thing statement just in case, because you don't know. I mean, I know the region wants to keep it quiet, and I would that would be great. If she can make it just one by a year, that'd be great. But you just don't know what she's going to stand up and say next y andesday. So you need to use your and your allowances. You need to use the few remaining legal tax breaks are open to you as a civilian
of the UK. So you know your twenty thousand pound eyes are allowance, your sixty thousand pounds pension allowance, that as assuming you haven't got stuff to carry over and that you heard at least sixty thousand pounds, but also
capital gains tax. This one just struck me because two years ago the capital gains tax allowance was just over twelve thousand pounds, and if you're not someone who's like mega rich, and if you don't sell assets very often, if you don't do a lot of trade, and I probably haven't really thought about that if you've got anything outside because it would probably be covered, but now you
know it's down the three grand. You know, if you were holding some daft be stocks that maybe a pal had told you about and you happen to get lucky and you know don't want it in your eyeser because you're been a bit careless. There's a good chance that you actually might own capital gains tax this year if
you sold it. So just you know, look at what you've got, have a thing about what's not already sheltered, and just make the effort to either get it in an ISA or think about realizing some losses and some gains under the limit this year and then just sort of like making you see your CGT alons each time shield because it really is sort of small new, very very.
Wide wise advice, John, Thank you very much, and just be absolutely a patrick patriotic millionaires. Flat advice was not for you. That was not for you. Don't do any of those things. Okay, thanks for listening to this week's Maren Talks Money Debrief. If you like our show, rate review, and subscribe wherever you listen to podcasts. Also be sure to follow me and John on ex or Twitter at
marinas w and John Underscore Stepic. This episode was produced by some Mesiety, production support and sound designed by Moses and Our executive producer is Brendan Francis and you questions are comments on this show and all our shows are always welcome. Our show email is merin Money at Bloomberg dot net, so do get in touch. If you have any ideas for Rachel Reefs that we could explore on the show, She'll appreciate it.