Here’s a short story about who wins and loses from the status quo of our inheritance tax rules - and about, what you might politely call ‘sub-optimal’ journalism🧵 On 19 November, the Times ran a ‘news’ piece on the demonstration in Westminster by farmers opposed to changes to inheritance tax. Obviously reporting the news is good, but reading such a one sided piece made me think it belonged in the comment pages thetimes.com/uk/environment…

So much misinformation around today on who will be affected by changes to inheritance tax - and lobbyists pretending the data isn't clear to obfuscate. We have detailed data on estates so the truth is in fact very clear if you care to look 🧵 If what you care about is just agricultural property, 84% of claims for relief are for less than £1.5m (which realistically is the minimum you'd have to have in assets including a farm before you start paying any tax). 96% are less than the £3m couples will still pass on tax free

Not news = those hugely benefitting from a tax exemption, despite never being the intended beneficiaries, are opposed to reform of that tax exemption It takes a special kind of nonsense speak to claim the way to protect future generations of farmers is to provide a large tax incentive for non-farmers to buy up land, pricing actual would be farmers out. That is exactly what the status quo does

Today @RachelReevesMP has swept away one of the biggest weaknesses in the UK’s macroeconomic framework: the bias against public investment. It’s a very big deal. This means this government will avoid the huge falls in public sector investment planned by the last government, but it’s a bigger deal than just shaping next week’s Budget…

Understandably lots of debate about child poverty this morning – something we as a country should spend much more time focusing on The context here is the first Labour Kings Speech in 14yrs – implementing a manifesto just endorsed by the election result. No-one should be surprised that 98+% of Labour MPs voted for it/against amendments from other parties. That’s business as normal just days after an election

The case for @RachelReevesMP’s sweeping changes to the planning system announced today… 1. For 15yrs, we’ve been attempting to dig a tunnel under the Thames. No digging has taken place, but £800m has been spent & 9k pages of planning applications drafted. This is double what Norway spent actually building Lærdalstunnelen, the world’s longest road tunnel…

Where to start…

https://twitter.com/hendopolis/status/1795197625055990114

This is yet another example of total tax policy chaos - this proposal is to reintroduce the exact same higher tax allowance for pensioners that George Osborne abolished a decade back. As with the personal allowance & corporation tax it’s going back to square one (ie Gordon Brown)

Lots of focus on whether the radicalism of Labour's proposed employment law changes are being neutered - but the discussion is weirdly abstracting from the specifics and 'watering down' talk is overdone - this is largely the inevitably turning of slogans into govt action. Quick🧵

https://twitter.com/PickardJE/status/1785554802300129473

Here's @PickardJE list of what he thinks @AngelaRayner programme is. Let's take each in turn

Time to talk Universal Credit. We're 10yrs into its roll-out, so understandably interest has waned. But it's impact on Britain has built - whoever wins the next election will be governing a "Universal Credit Britain" with 7m families - and big winners and losers - on it by 2029🧵 In 2019 the debate was whether to scrap Universal Credit, as Labour proposed. This time is very different. The pandemic showed UC had big advantages (processing millions of claims fast) and the roll-out has gone way too far to be reversed. So we should focus on its impact

This is a REALLY good tool, that busts the myth that the biggest problem facing deprived areas is that there talented young people leave. Let's take the case of Hartlepool... 🧵

https://twitter.com/ONS/status/1768608088892846146

Overall, young people growing up in Hartlepool are less likely to get a degree than the national average. You already knew that. Let's get to what's interesting

NEW: it's out - full @resfoundation of yesterday's Budget answering the big questions:
- are taxes are up or down?
- who wins, who loses?
- and when, oh when, will wages return to 2008 levels?
resolutionfoundation.org/publications/b… A few highlights. First up - why it's bonkers to accuse the @OBR_UK of being too pessimistic about Britain. They forecast the economy will grow 4.7% between 2023 and 2026 - that's more than TWICE the growth the @bankofengland expects

Amidst all the tax cuts vs rises chat, we shouldn't miss that @Jeremy_Hunt is choosing a totally new approach to the shape of tax policy. Contrast him with @George_Osborne is probably the easiest way to see this 🧵

https://twitter.com/Steven_Swinford/status/1764961787101823232

Osborne tax policy was:
- Cut income tax by reducing average not marginal tax rates (ie threshold rises)
- proactively create marginal tax rate problems ie child benefit taper
- ignore problem of employees paying more tax than everyone else

Quite staggeringly confused debates about fiscal rules and the @OBR_UK "boxing the Chancellor in" over the last few days. A few clarifications as the Budget looms 🧵 Confusion 1: Lots of people saying today's fiscal rules being too tight is the problem. Just not true - these are the loosest rules ever. The Chancellor says they require debt to be falling but they really don't. Just that it’s FORECAST to fall in five years time.

So bye bye £28bn green investment. Where does that leave us? First scale of reduction. Lots of the reporting is way out. The old plan was ramping up extra spending to around £18bn/yr by end of Parliament – in practice that meant £40 - £60bn in total (can’t be specific because Labour weren’t). New plan is £24bn. So roughly halved.

Some highlights from our Autumn Statement analysis (for the tiny minority who disgracefully haven't already read the whole thing)🧵 resolutionfoundation.org/publications/a… This is absolutely staggering: wages are now set to remain below their 2008 level until 2028. That's a totally unprecedented TWO lost decades of pay growth

What has the upcoming Autumn Statement got in store? People have been predicting grim forecasts for the public finances - new @resfoundation analysis suggests this is likely to be wrong. The problem isn't that the forecasts will be bad - it's that they're based on a fiction🧵 What has got people pessimistic? Higher interest rates. They're up about 1% since the Budget back in March = pushes borrowing up by around £15-£20bn/year. That's a lot of money.

You know how nothing works in 2020s Britain - you can’t get a train, a GP appointment or a school roof that stays up. Well we can add our labour market data to the list ons.gov.uk/employmentandl… What’s going on? The @ONS is saying it doesn’t have confidence in its flagship Labour Force Survey. Which is awkward - it’s central to decisions the @bankofengland takes on interest rates or how much the government panics about ill health pushing people out of work

Rhetoric asise, the big picture economic argument of @RachelReevesMP speech: Britain needs to start investing again. This is 1) right 2) hard 🧵 She's not wrong 1. For almost all of the past two decades, the UK has been in the relegation zone (bottom 10%) of the OECD business investment league table.

There are big political incentives that drive both big parties to make the "towns have lost out as everyone has focused on cities" argument - marginal seats are in towns these days as cities have trended Labour and counties Conservative. But the economics is very confused...

https://twitter.com/faisalislam/status/1709124387889107298

Confusion 1: does anyone really think the problem is we've tried too hard to make the economies of Manchester/Birmingham/Leeds etc successful? Every single one has below average productivity (when big cities in advanced economies generally drive productivity for their countries)

What's wrong with public investment in the UK? Much more than HS2... There are 4 big problems to understand 🧵 The levels problem. We consistently invest too little: the average OECD advanced economy has invested 50% more (relative to GDP) than the UK since the turn of the century. The results can be seen everywhere from fewer MRI scanners in hospitals to longer commutes vs OECD norms

Who are the winners and losers from higher interest rates? My simply rule of thumb is:
- 40 year olds have the debt
- 70 year olds have the savings On the mortgage pain specifically - it's concentrated amongst richer households because that is where the mortgagors are. BUT the minority of lower income families that do have a mortgage is where problems are going to be most acute (ie the disposable income hits are biggest)