‘WE’VE GOT FOUR MORE YEARS OF THIS AND I THINK IT WILL GET WORSE’ – KWASI KWARTENG

FORMER Chancellor Kwasi Kwarteng has said he believes the government will increase taxes, including a wealth tax towards the end of the parliament.

Speaking on GB News he said: “The problem I have with this is it looks like death by a thousand cuts, because essentially we’re going into the doom loop that she, Rachel Reeves talked about.

“[This is] where you’re raising taxes, from my point of view, you’re disincentivising the economy, you’re slowing growth. And when growth slows, you’re going to have to raise taxes even more to pay for the public services.

“I think this will end towards the end of the parliament, with some sort of wealth tax. They’re not going to do it, I think, this year, but I’m pretty sure that they will be looking at this.

“And you’ve got the left wing of the Labour Party who are even now saying we should have a wealth tax. That would be disastrous. The Chancellor herself realizes that you’re going to drive out wealthy people, people who pay large amounts of tax.

“You’re going to disincentivise economic growth, because people will say, ‘Well, why should I work as hard as I am if I’m paying all this money to the government?’

“And that toxic mix, I think, will lead to slower growth rates, higher taxes. And of course, you’ve got all these problems with migration and all the rest of it, and it’s not a very pretty outlook for the Labour party.

“We’re still about three and a half years, frankly, from an election, but they will be very, very concerned as we go into this. Many of us said at the time, last year, when she put up national insurance on employers, that this would be a massive dissent disincentive for business.

“People wouldn’t be hired, wages wouldn’t be increased, people would be let go. And all the economic data suggests that that’s what’s happening and we’re only really at the beginning; we’ve got four more years of this and I think it’ll get worse.

“They trumpeted the £22 billion black hole, a lot of that was actually the deal that they’ve done with the unions, increasing their pay way beyond inflation. But nobody’s saying there isn’t a black hole.

“People are saying 30, 40, maybe £50 billion. And regardless of the number, that means higher taxes. And it was obvious to me that there would be higher taxes because they couldn’t reduce spending.

“They tried; they put in a welfare bill. The backbenchers revolted. They couldn’t push it through, and so they have to find an extra £5 billion for the cuts that they couldn’t make.

“I see people like Neil Kinnock, Corbyn and the rest of them. These people were around in the 70s. And the thing is, about the 70s is that wealth wasn’t very mobile. Then, if you looked at any kind of list of rich people or high taxpayers, they were generally British people, and they were rooted in the country.

“Yes, you have the Beatles and other people who left, but now it’s so much easier to set up shop, especially with the Internet, with working anywhere: you can set your business up, you can set your home anywhere, and still do business activity.

“So a wealth tax, potentially, is like an Exocet missile in terms of the wealth creating ability of the country and that’s very concerning.

We’ve already seen, anecdotally, and also in terms of numbers, when we were asked to tighten up the non dom rule, and people are leaving the country in droves because they say, Well, actually it’s easier to work in Italy or Portugal or Dubai, where we’re paying much lower tax.

“There are lots of people who are mobile, who are leaving, and that’s you see this in employment rates, you can see this in actual economic data; not in terms of people leaving, but in terms of people setting up businesses, in terms of people employing people.

“Increasing national insurance on employers was a disaster and my real fear is that we’re just at the beginning of this process.”