Two reasons to focus Budget tax rises on non-wage income. 1. Tax rates on wages have long been higher than for other income. 2. The employer NI rise was a big tax wedge rise for most employees: even if non-wage taxes go up by 2p in April, wages would have had the biggest 2024-2026 effective tax rise

Two reasons to focus Budget tax rises on non-wage income. 1. Tax rates on wages have long been higher than for other income. 2. The employer NI rise was a big tax wedge rise for most employees: even if non-wage taxes go up by 2p in April, wages would have had the biggest 2024-2026 effective tax rise

Combining a couple of thoughts from this, perhaps a good way to do electoral reform (and what LDs should have demanded in 2010) is an (Irish-style) two-stage process where an independent Citizens' Assembly ponders the best system and then their choice is put to the rest of the public in a referendum

It is surely much easier to make this change now – while most voters are not directly affected – than in 5 or 10 years' time. Majority support on both the left and right.

Today's Bank of England outlook continues to support the idea that the OBR's March wage forecast is too low – despite the coming productivity downgrade. e.g. OBR forecast 2.3% pay growth for 2026, but the Bank and businesses they talk to expect ~3.5%. This matters a lot for the fiscal outlook.

This sounds promising: grappling with a big long-term tax issue. Though the suggested scale would be similar to the £200 EV VED rise that happened this April. And if the VAT 'pavement tax' were abolished at the same time, that might offset most of this cost for drivers without home chargers.

The Treasury is widely reported to be considering cutting energy bills, perhaps via a VAT cut. What's the best way to do this? We think the answer is to remove the taxes from electricity bills. Here is Nesta's proposal out for Tax-free Electricity: @nestauk.bsky.social

Not disagreeing with John's broader thesis here but I don't think this fact is true (& we can't trust the related rankings either). I think the UK top 10% are definitely better off than in 2000. The difference might be that this international data doesn't correct top incomes like domestic sources do

The Chancellor didn’t talk about tax reform this morning, but ideally the Budget would grapple with a range of longstanding tax problems. Here are 5 of the biggest challenges… www.resolutionfoundation.org/publications...

Real fuel prices and fuel duty are historically low, and would remain so even after scheduled increases in Spring. Instead of fuel duty freezes, the Chancellor should focus cost of living support on bringing down electricity prices, which are definitely not historically low.

On the subject of how many households are "net recipients", this new chart of ONS data suggests that indirect taxes have plummeted. But I suspect this is mostly due to this survey missing more and more spending each year - rendering any related time series fairly useless.

Taxes on the typical salary are now 55% higher than on self-employment income - a record gap. You're better off taking a self-employed role even if it's ~13% less productive. www.resolutionfoundation.org/publications...

What are the politics of this for Labour? Given strong public opinion, is animal welfare a cheap, easy way to show centre/left voters it is making a difference, while making life awkward for any opponents tempted to say that this is all woke nonsense? (Particularly once inflation weakens.)

A striking quote in Bloomberg from the president of the World’s Poultry Science Association, an industry group, about modern meat chickens:

Real incomes for lower-income households have likely fallen this year, but a 6.2% rise in UC standard allowances next April should contribute to better news in 2026-27

In today's stats, UK monthly inflation was 0%. Inflation since April has been at an annualised rate of 1.9%, slightly lower than in May-Sept 2019 (when there was no inflation problem).

Many of the people Katie Lam is threatening with deportation are entitled to vote in general elections, as Commonwealth or Irish citizens

Ahead of the Animal Welfare Strategy, I wrote to my MP to encourage ambition. #EndTheCageAge, roll out mandatory labelling, and end the fur trade. adamcorlett.com/2025/10/20/l...

One good option for #Budget2025 would be to reform Vehicle Excise Duty. The current tax regime – particularly for EVs – presents a fiscal challenge, distributional challenge and harms challenge. 🧵 www.thesun.co.uk/motors/37047...

Surely it's unlikely that VAT on gas will be cut. It would be such a missed opportunity to improve the UK's damagingly high electricity to gas price ratio. There's no shortage of ways to cut electricity bills, to help all households. www.bbc.co.uk/news/article...

How much we should spend on PIP is one thing, but I think there's a good case that Motability's tax breaks are weirdly distortionary. It buys new cars without paying CO2-linked VED, or most VAT, and then sells them on after a few years. That's why 1 in 5 new cars now go through Motability.

I laughed about Huel being “spiritually bad.” I also wish one could just trust media outlets that break news about supposedly troubling contamination to not lean into the story at the cost of scientific accuracy.

The Government has already said that “subject to negotiations, we intend to expand the UK ETS to include emissions from international voyages”, like the EU. This news adds to the case for doing that – and HMT could even score ~£0.4bn a year for it at the Budget. www.bbc.co.uk/news/article...

It would cost £5 billion to keep freezing Fuel Duty, by 2029. It would cost £4 billion to take social levies, environmental levies and the Carbon Price Support off electricity bills and slash public EV charging VAT. Which is the better option?

UK inflation over the past year was very concentrated in April. So perhaps we'll see a big fall in the annual rate in April 2026 (published in May) when that drops out.

#Budget2025 could look at a >£20bn pension tax relief – the lack of employer NICs on employer pension contributions. This is a very generous part of the pension tax system. And because we treat *employee* contributions differently, it leads to arbitrarily different tax rates for different workers.

My instant reaction to Badenoch's stamp duty announcement for @instituteforgovernment.org.uk Stamp duty is a bad tax. But abolishing it without a broader reform of property taxes would be a missed opportunity and hard to afford. www.instituteforgovernment.org.uk/comment/kemi...

Good chart in the FT. Ryanair and its customers face much higher carbon prices than many other airlines, because we basically exempt long-haul flights from the Emissions Trading Scheme. That's unfair and inefficient. The UK+EU should fix this & it may even be a revenue-raising option for #Budget2025

In Q2, UK whole economy investment as a share of GDP was its highest on record (since 1997) and has overtaken Germany's

European egg production is moving quickly to 'in-ovo sexing', rather than the mass culling of male chicks. The US and UK are much further behind. innovateanimalag.org/market-penet...

One funny thing in OBR forecasts & maybe a reason to be more fiscally cheerful: they assume markets are right about high future borrowing costs (compare to Europe), but separately assume that inflation will be 2% and nominal pay growth very low. Fiscally the worst of both worlds, but not consistent?

Neat household income chart and pledge tracker from @news.sky.com: news.sky.com/story/keir-s...

It's time to end the Fuel Duty freeze. Otherwise, the annual cost of Fuel Duty cuts by this government will top £5bn by 2029 – making the fiscal challenge even harder, and with big opportunity costs: that's more than the cost of scrapping the two-child limit or options for cutting electricity costs

Stamp Duty is bad, but it's hard to imagine big progress without better fiscal news

Crazy that emails from HMRC, for example, come with a massive link to X

If you think Council Tax should be more of a property tax and less of a poll tax, this seems very welcome. And yes that will mean inner London gets less central funding (but it is right to ask what options councils will have to deal with that)

7) For 2030s elections, the basis for designing constituencies could be reconsidered. Most countries use total population rather than registered voters to determine boundaries. Children and (eligible?) adults who don't vote don't choose their MP but why shouldn't they be numerically represented?

6) General election franchise rules need reform really. It doesn't seem sensible anymore that recent arrivals from (Commonwealth) Australia/India/Zimbabwe can vote but long-settled residents from e.g. the Netherlands (non-Commonwealth) can't. www.theguardian.com/politics/202...

New fiscal rule to replace all others: every MP gets a £20,000 bonus after each year in which there was a current budget surplus

To avoid confusion, I'll now use megapounds and gigapounds

Maybe this is ill-advised but I have diverted my future pension saving away from the US, which seems over-valued given the direction of the country in so many ways

NEW: Today we publish the final recommendations from the IFS Pensions Review, with a set of policy reforms to create a pension system fit for the future. THREAD on our four key themes for reform:

The UC/PIP bill uprates standard UC by 2.3% above inflation in April – so a 6% rise if inflation is 3.7%. A partial undoing of past freezes and a progressive boost to income growth in 2026.

Today's figures show Real Household Disposable Income per person grew by 3.1% in 2024-25: the strongest financial year since 2015-16 (albeit helped by unfunded tax cuts). But Q1 2025 drop supports the idea that strong income growth is unlikely to continue in 2025-26.

A favourite stat in my new report: there was no household income gap between children and pensioners in the early 2000s, but by 2023 it was over £5,000 – and it's projected to get bigger www.resolutionfoundation.org/publications...

Surprising headline of the day

Toasting this week's developments: - Assisted dying - Abortion reform - Law raising UC by 2.3% above inflation in April - Fairer council funding

Hopefully today's Westminster Hall debate will encourage the Government to #EndTheCageAge in its upcoming animal welfare strategy

Powerful message to Government from the Women and Equalities Committee in their new report on parental leave published today – paternity leave in the UK is outdated and unequal. www.bbc.co.uk/news/article...

Two thirds of the rise in working-age inactivity since 2019 has now been reversed – backing up the argument that the LFS was just wrong about the scale of the rise