It is the economics version of music’s “difficult second album”. When the UK chancellor, Rachel Reeves, steps up to deliver her follow-up budget on November 26, she faces some daunting choices.
Now that the Office for Budget Responsibility – the UK’s’s independent financial watchdog – is expected to downgrade its predictions for UK prosperity, Reeves is widely anticipated to put up taxes again (something she herself alluded to recently). But beyond that, few people agree on the best way for her to do it.
The British Chambers of Commerce is calling this a “make-or-break budget”, demanding a tax approach that incentivises growth after Reeves hit employers with a national insurance (NI) rise last year. Equally, no one expects the chancellor to break Labour’s manifesto pledge and raise one of the “big three”: income tax, VAT or employee NI contributions.
So where does that leave her? And what would be best for Britain’s (and Labour’s) prospects of revival – not just in the short term, but for the long-term prosperity of those people, young and old, who find themselves struggling with the cost of living, spiralling rents and precarious employment?
To help us understand the complexities of this key political and socioeconomic moment, The Conversation and the LSE International Inequalities Institute have teamed up for a special pre-budget, online event on Tuesday, November 18 from 5pm-6.30pm GMT – in which leading experts from the worlds of business, taxation and government policy will tackle all these questions and more.
The experts who will join us for this event, which I will be chairing, are:
★ Helen Miller (pictured), director of the Institute for Fiscal Studies (IFS), the leading UK thinktank whose pre-budget analyses always offer some important clues to the chancellor’s thinking.
★ Mike Savage, co-founder and former director of the International Inequalities Institute, and one of the UK’s leading voices on the relationship between wealth and inequality.
★ Emma Chamberlain, one of the UK’s leading tax experts working in London’s Pump Court Tax Chambers. She was a co-author of the Wealth Tax Commission’s 2020 final report on the pros and cons of an annual or one-off UK wealth tax.
★ Maha Rafi Atal, Adam Smith senior lecturer in political economy at the University of Glasgow and an award-winning business journalist.
Questions about wealth and inequality
One of the key aspects of our discussion will be how the chancellor could address the UK’s national and private wealth stores – not merely by changing tax rates, but by rethinking some antiquated taxes altogether. This could mean, for example, transforming Britain’s council tax system (as 13 of Reeves’ fellow MPs have called for), scrapping stamp duty in favour of a tax on some first-home sales, or releasing the triple lock on pensions.
Another option backed by many experts is a one-off windfall tax on existing wealth. In the UK, nearly 60% of total wealth is now held by the richest 10% of private individuals, whereas the bottom half of the UK population hold only around 5% of the total wealth between them. It is a startling rise in inequality which, according to our guest Mike Savage, means that:
The current debate about wealth taxation should not be framed purely in technical terms – whether it is an efficient way of raising funds for the public purse without damaging UK economic prosperity – but needs to be seen as a question of values and common purpose.
If you’d like to join us for our online expert discussion, please sign up for free here. And if you have a question you’d like our experts to answer, email it now to [email protected].
The Conversation and LSE’s International Inequalities Institute have teamed up for a special pre-budget, online event on Tuesday, November 18 from 5pm-6.30pm. Join leading experts from the worlds of business, taxation and government policy as they discuss the difficult policy choices facing Chancellor Rachel Reeves in her upcoming budget.
Sign up for free here