Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. Welcome to the Marin
Speaker 1: Talks Money Weekly round up, our debrief on the biggest
Speaker 1: stories in markets and economics. I'm Marin Zumset, Web Editor
Speaker 1: at Large for Bloomberg UK Wealth.
Speaker 2: I'm Jointed stair Peg what's at of the Money to
Speaker 2: stilled newsletter and senior reporter at Bloomberg.
Speaker 1: John, We need to talk about poor Rachel Reeves again,
Speaker 1: don't we?
Speaker 2: Poor Rachel Reeves.
Speaker 1: You wrote this week about how her next fiscal event
Speaker 1: is coming up very shortly, and you think she might
Speaker 1: stand up and say do you want the good news
Speaker 1: or the bad news? Which point everyone will roll around
Speaker 1: laughing because everyone knows that there is no good news.
Speaker 2: There is no good news, and I mean a lot
Speaker 2: of this is down the Unfortunately, Rachel Reeves just lacky
Speaker 2: political nouse. I think, to be honest, there was daft
Speaker 2: of her to talk up her fiscal rules so aggressively
Speaker 2: and then leave no room for error in the last budget,
Speaker 2: and it's basically what she's done. So the fiscal rules
Speaker 2: themselves are just the same made up nonsense that every
Speaker 2: kind of light chancellor has had for years and years.
Speaker 1: Now.
Speaker 2: They pretty much always miss them, but it's all about
Speaker 2: talking a good game about how you're going to hit them,
Speaker 2: so then they themselves don't matter anywhere near as much
Speaker 2: as they're made out to matter. But obviously the whole
Speaker 2: Liz Trusts kind of LDI coincidence tobacco meant that, you know,
Speaker 2: Raach Reeves has made a really big deal of how
Speaker 2: I'm going it is to meet these rules. Otherwise the
Speaker 2: guilt market will definitely blow up. At least that's the
Speaker 2: perception's trying to give, and so she has to stick
Speaker 2: to them. She's also said I'm not going to put
Speaker 2: up taxes anymore, and so that's why it's basically all
Speaker 2: kind of falling on the idea that benefit cuts are
Speaker 2: somehow going to you know, fill this black hole, and
Speaker 2: it will probably find the figures enough that the RBR
Speaker 2: comes back and says, Okay, well you can eploy make
Speaker 2: it as long as we make this outlinedish assumption of
Speaker 2: what's going to happen in phases team.
Speaker 1: But the benefit cuts and if there's been a lot
Speaker 1: of talk about welfare this week, and a lot of
Speaker 1: talk about the various different things that you can access
Speaker 1: via the welfare system, particularly new cars and so on,
Speaker 1: notability which you and I have talked about and been
Speaker 1: scandalized by for about ten years, and now finally everyone
Speaker 1: else is also scandalized by it. I'm just actually going
Speaker 1: to read you the first paragraph from the Times today
Speaker 1: which I was interested by. Do you want a free
Speaker 1: new car? There are one hundred and sixty seven models
Speaker 1: to choose from the Motibility website. If you handle a
Speaker 1: part of your weekly mobility benefit, you can drive away
Speaker 1: with the least Kia Picanto web fifteen thousand pounds. You
Speaker 1: can go a little further. I won't to do the
Speaker 1: whole thing because we will got there, but just by
Speaker 1: now you can go a little further and you can
Speaker 1: get a bmw I four M sport And when you
Speaker 1: do that, free rod, tax ric cover, servicing, mot turan,
Speaker 1: winscreen repair, installation of a charge point, blah blah blah blah.
Speaker 1: But this is interesting because it's one of the first
Speaker 1: things that's really cut through with the public on the
Speaker 1: extent to which welfare has become slightly out of control.
Speaker 1: The idea that one in five new cars on the
Speaker 1: road could be part of a welfare scheme is one
Speaker 1: of the first things that's really got everyone going, well,
Speaker 1: hang on a tech, have things gone a little bit
Speaker 1: too far? Are people who are using the system slightly
Speaker 1: ruining it for everyone who needs the system? Etc. So
Speaker 1: she had a window, she had a window, didn't she
Speaker 1: to do something about welfare and do something about the
Speaker 1: various problems in the benefit system. But she seems to
Speaker 1: have only done it to a very mild degree five
Speaker 1: billion or so, so she's not really helped herself in
Speaker 1: the way that she possibly could have.
Speaker 2: There, Well, that's the problem. You're acting from a police
Speaker 2: of panic. There should be sensible to forms of their stuff,
Speaker 2: and it's all very complicated, and it's all because of
Speaker 2: the various definite centers, and also the edity and thing
Speaker 2: is that people keep taking the statistics at face value.
Speaker 2: So you'll still get people arguing Blaine that this you know,
Speaker 2: there's been that mental health issues have rocketed because of
Speaker 2: you know, COVID or because of social media or whatever,
Speaker 2: when in fact that the obvious kind of point is
Speaker 2: that there's being a change in the benefits system that
Speaker 2: has made people decide to apply for disability benefits rather
Speaker 2: than the previous jobless benefits, which which have changed so
Speaker 2: it's that that's what's driving it, and we may be
Speaker 2: meaning a much more clear eyed view of this stuff.
Speaker 2: And unfortunately you don't get that because obviously because politics,
Speaker 2: but also because Rachel Reeves has left herself in this
Speaker 2: sort of panic zone where she needs to find money fast,
Speaker 2: and probably all that will happen actually is that whatever
Speaker 2: does get done will mean that some unusually honest group
Speaker 2: of people who genuinely need this stuff will get locked
Speaker 2: out of the system, and everyone who's scamming it will
Speaker 2: still be able to scam it.
Speaker 1: Yeah. Well, we have ideas for her there, don't we
Speaker 1: We have a de will come back another time, we do.
Speaker 1: There are lots of things she could do. She could
Speaker 1: sell them coin. We're one of the biggest. UK government
Speaker 1: is one of the biggest holders of bitcoin in the world,
Speaker 1: along with the US government and the North Korean government.
Speaker 1: I gather an awful lot of bitcoin.
Speaker 2: Interesting, she missed the top.
Speaker 1: She missed the top, but still on the list. She
Speaker 1: could she could give it a go. She could instruct
Speaker 1: the Bank of England to sell the rest of the gold.
Speaker 2: Yes, yes, revalue the gold in America.
Speaker 1: Okay, there is one group of people who really feel
Speaker 1: that they could help Rachel reads out a lot, and
Speaker 1: I'm glad about that because she needs someone behind her.
Speaker 1: And that is a new group called the Patriotic Millionaires UK.
Speaker 1: And we've talked about this slot before, John, but only
Speaker 1: in the US context. There's a group of the apparently
Speaker 1: super rich in the US. Do you think that every
Speaker 1: everything can be solved if they pay more tax? So
Speaker 1: they would like to be forced to pay no tax
Speaker 1: by the government. They don't want to do it voluntarily.
Speaker 1: I don't know why, but they want the government to
Speaker 1: force them and other rich people to do it. Now
Speaker 1: we have our very own, very own network of millionaires.
Speaker 1: Patrock Millionaire's UK is a non partisan work of British millionaires,
Speaker 1: multiple industries and backgrounds from across the UK. It delivers
Speaker 1: a single message, no single mission missions. We're back to missions,
Speaker 1: a single mission delivered the voice of wealth. Who knew
Speaker 1: wealth had a voice to the better written by changing
Speaker 1: the system to end extreme wealth and make those with
Speaker 1: it make their fair and proper contribution. So what they
Speaker 1: want is a wealth tax at a couple of a
Speaker 1: wealth tax at a couple of percent a year. And
Speaker 1: they've had a van going around Westminster with various slogans
Speaker 1: on it about how the well off should pay more tax.
Speaker 1: I'm not particularly keen on this. I'd like to hear
Speaker 1: your views on it. I'm not particularly keen on it
Speaker 1: because all the evidence shows that it won't work. Wealth
Speaker 1: taxes are very, very difficult to implement. The very wealthy
Speaker 1: are very mobile. They mostly just leave and that's why
Speaker 1: almost nobody has a wealth tax of this type anymore.
Speaker 1: And the other thing I would say is that the
Speaker 1: government is already doing is absolute utmost to tax wealth.
Speaker 1: The UK has a lot of wealth taxes, inheritance taxes,
Speaker 1: a wealth tax non index capital gains as a wealth
Speaker 1: tax are you're in the main you're paying. You're paying
Speaker 1: tax on inflation gains, nominal gains rather than real gains.
Speaker 1: So that stamp duty is a wealth tax. It's a
Speaker 1: wealth tax when you see stamp on your equity trading,
Speaker 1: and it's a wealth text when you see it on
Speaker 1: the buying and selling of how's it. So that's three
Speaker 1: just for starters. I wouldn't have said that we need
Speaker 1: a new one. But John, you may feel differently.
Speaker 2: No, I don't feel deffinitely. I think the tax system
Speaker 2: overall should be simplified. And I think that if it
Speaker 2: was simplified then you would probably start to balance out
Speaker 2: on the und income, mind the un income. But I
Speaker 2: think that's a completely different issue. I mean, the practical
Speaker 2: point is actually the most important one, regardless of anything else.
Speaker 2: If you are saying that we should charge the super
Speaker 2: wealthy whoever you define super wealthy eyes if you'd see
Speaker 2: and that you should charge a group of people one
Speaker 2: percent of their overall value a.
Speaker 1: Year thereafter two actually.
Speaker 2: Well, yeah, exactly between one and two percent, or those
Speaker 2: people will leave because it's worth the way to leave,
Speaker 2: because if you're team two percent a year, eventually you
Speaker 2: won't have you wouldn't be enough to be over the
Speaker 2: threshold quick says from whether that wealth is kind of
Speaker 2: liquid or not. And a lot of the thing it's
Speaker 2: not liquid is just what's peeing pretty much any place
Speaker 2: to move to a country that is not going to
Speaker 2: do that to you, and there's plenty of them.
Speaker 1: So well, I mean, one of the things that really
Speaker 1: does do is it really really does disincentivize any kind
Speaker 1: of entrepreneurialism or capital formation. So you know, if you
Speaker 1: set up a company that in say I don't know,
Speaker 1: fintech of some kind, and it's valued on paper at
Speaker 1: thirty million pounds, but it isn't really worth thirty million
Speaker 1: pounds because you can't sell any of it. You can't
Speaker 1: liquidate your two percent of a company like that here
Speaker 1: or there. So what do you do where you just leave?
Speaker 2: I think the really important point is that this is
Speaker 2: already happening right now with the new inheritance tax changes. No,
Speaker 2: because I think what often gets overlooked, and some kind
Speaker 2: of unaccountably somewhat gets overlooked, is that it's not just
Speaker 2: the farmers who have large amountcy la quid assets and
Speaker 2: relatively low liquid income with which to then pay off
Speaker 2: the inherence tax built and therefore may need to break
Speaker 2: up their businesses. The player family businesses that are in
Speaker 2: the same situation, and I think probably they haven't attracted
Speaker 2: as much attention because perhaps they don't want to draw
Speaker 2: as much attention to themselves, and because there are solutions,
Speaker 2: but they're expensive solutions. So I think that as you say,
Speaker 2: we we already are getting to the point where the
Speaker 2: walth tax is are quite detrimental and disincentivizing. Taking any
Speaker 2: furthers can be a mistake.
Speaker 1: Yeah, they also stop people coming here. And I was
Speaker 1: having a conversation only this week about someone who would
Speaker 1: have been living in the UK but is not living
Speaker 1: in the UK because he doesn't want to be classified
Speaker 1: as a resident in the UK, because he doesn't want
Speaker 1: fall into the ten years for the iht NE. So
Speaker 1: we now we have people who don't come here as
Speaker 1: a result. And it's a bit like with Scotland's income
Speaker 1: taxes being higher than England's income taxes. You know, you
Speaker 1: can't measure who didn't come. You can't measure who didn't come,
Speaker 1: and it really matters. But I said I had ideas today.
Speaker 1: I'm only offering solutions today, I'm not offering problems. So
Speaker 1: I have a solution for the Patriotic Millionaire's UK. And
Speaker 1: I'm going to give you the entire website address because
Speaker 1: I want to make absolutely sure that they can really
Speaker 1: get that www dot gov dot UK Forward slash guidance
Speaker 1: forward slash voluntary payment donations to government. You can go
Speaker 1: there and you can give as much of your money
Speaker 1: as you like to the government right now, right now.
Speaker 1: Just go there, do it. Hand the money over. They
Speaker 1: can just hand it directly demotibility. Bob's your uncle.
Speaker 2: I mean they could take all the glids they get
Speaker 2: for having the institutions that spreads these divine driving around
Speaker 2: to Westminster or the dest it and put that money
Speaker 2: towards the government. I mean that much. That must be
Speaker 2: a few hundred pounds.
Speaker 1: Maybe, I don't think the bankles that much. Don't look
Speaker 1: like that greater event. That's deflection, John, deflecture from the core,
Speaker 1: which is that you can give as much money to
Speaker 1: the government as you like. No one is stopping you.
Speaker 1: Never has. So that's my top tip for the day.
Speaker 1: Top tip.
Speaker 2: There's not one partisan idea as well. I would take
Speaker 2: an issue with that so slightly. There's not non partisan
Speaker 2: to want to get rid of wealth. And the underpinning
Speaker 2: organizations that these are spend offs from are generally things
Speaker 2: you would describe as being the thing quite far left
Speaker 2: would be a reasonable description, and the Tax Justice Network,
Speaker 2: I think. So you know, they can have all these
Speaker 2: like patriotic millionaires, but it's you that's just a cover.
Speaker 1: So I'm feeling a bit mean about the patriote millionaires.
Speaker 1: I've had quick rundown the list of who they are.
Speaker 1: I'd be quite interested to see proof from all of
Speaker 1: them that they'd qualify for said tax. But that's just
Speaker 1: that's just mean. So my top tip today has been
Speaker 1: for people who are rich and would like to be
Speaker 1: less rich, which is perfectly valid. But I think your
Speaker 1: top tip today is probably for people who'd like to
Speaker 1: be richer coming up to the end of the tax here.
Speaker 2: Yes, yes, so I guess ahead of this thing statement
Speaker 2: just in case, because you don't know. I mean, I
Speaker 2: know the region wants to keep it quiet, and I
Speaker 2: would that would be great. If she can make it
Speaker 2: just one by a year, that'd be great. But you
Speaker 2: just don't know what she's going to stand up and
Speaker 2: say next y andesday. So you need to use your
Speaker 2: and your allowances. You need to use the few remaining
Speaker 2: legal tax breaks are open to you as a civilian
Speaker 2: of the UK. So you know your twenty thousand pound
Speaker 2: eyes are allowance, your sixty thousand pounds pension allowance, that
Speaker 2: as assuming you haven't got stuff to carry over and
Speaker 2: that you heard at least sixty thousand pounds, but also
Speaker 2: capital gains tax. This one just struck me because two
Speaker 2: years ago the capital gains tax allowance was just over
Speaker 2: twelve thousand pounds, and if you're not someone who's like
Speaker 2: mega rich, and if you don't sell assets very often,
Speaker 2: if you don't do a lot of trade, and I
Speaker 2: probably haven't really thought about that if you've got anything
Speaker 2: outside because it would probably be covered, but now you
Speaker 2: know it's down the three grand. You know, if you
Speaker 2: were holding some daft be stocks that maybe a pal
Speaker 2: had told you about and you happen to get lucky
Speaker 2: and you know don't want it in your eyeser because
Speaker 2: you're been a bit careless. There's a good chance that
Speaker 2: you actually might own capital gains tax this year if
Speaker 2: you sold it. So just you know, look at what
Speaker 2: you've got, have a thing about what's not already sheltered,
Speaker 2: and just make the effort to either get it in
Speaker 2: an ISA or think about realizing some losses and some
Speaker 2: gains under the limit this year and then just sort
Speaker 2: of like making you see your CGT alons each time
Speaker 2: shield because it really is sort of small new, very very.
Speaker 1: Wide wise advice, John, Thank you very much, and just
Speaker 1: be absolutely a patrick patriotic millionaires. Flat advice was not
Speaker 1: for you. That was not for you. Don't do any
Speaker 1: of those things. Okay, thanks for listening to this week's
Speaker 1: Maren Talks Money Debrief. If you like our show, rate review,
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Speaker 1: marinas w and John Underscore Stepic. This episode was produced
Speaker 1: by some Mesiety, production support and sound designed by Moses
Speaker 1: and Our executive producer is Brendan Francis and you questions
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Speaker 1: always welcome. Our show email is merin Money at Bloomberg
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Speaker 1: any ideas for Rachel Reefs that we could explore on
Speaker 1: the show, She'll appreciate it.