It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Rishi Sunak considers cutting the U.K.’s ‘most unfair tax’—but doing so would help Britain’s ultra-rich the most, says economic research report Prarthana Prakash Wed, September 27, 2023 WPA Pool/Getty Images
U.K. Prime Minister Rishi Sunak's potential cuts on inheritance tax which could offer the most gains to Britain's wealthiest 1%, according to a study by the Institute for Fiscal Studies.
If Sunak’s Conservative Party moves to abolish the tax, it could cost the country £7 billion ($8.50 billion) in revenue, or about 0.3% of the U.K.’s GDP, a year.
But about half of the benefits of such cuts are forecasted to go to those with estates valued at £2.1 million ($2.55 million) or more, which represents only the top 1% of all estates, an IFS report published Wednesday found.
The research institute also said that such an abolition of inheritance tax would also exacerbate inequalities in the U.K.
“While a reformed inheritance tax could do more to promote intergenerational mobility, big wealth inequalities by parental background already exist before inheritances are received,” the IFS report said.
The authors argue that inheritance has been growing in recent times—and as that growth is set to continue, younger generations are expected to acquire larger sums from their ancestors.
“Together with the growing importance of inheritance as a part of lifetime economic resources, this inequality in future inheritances means that parental wealth is set to be a greater driver of lifetime income across younger generations,” the report said.
Proposed inheritance tax changes come ahead of the general elections slated for next year as Sunak’s party is finding ways to boost its support.
Many of Britain’s richest people have estates in constituencies that Conservative members of parliament hold, so a potential inheritance tax overhaul could shore up the party’s votes.
How important is the inheritance tax for the U.K.?
The U.K.’s inheritance tax has been divisive. It’s charged at 40% on assets valued at more than £325,000 ($395,000), with extra allowances on passing on a main home to heirs and some case-by-case exemptions.
In its present form, this tax was only applied to under 4% of the U.K.’s deaths, according to government data from July.
As a result, revenues from the inheritance tax are also minuscule. But in about 10 years, IFS estimates the revenue will expand to over £15 billion ($18.23 billion), in today’s prices, double the collections made now.
Representatives at the British government also underscored the importance of the small, yet significant collection from the inheritance tax.
“More than 93% of estates are forecast to have zero inheritance tax liability in the coming years—however, the tax raises more than £7 billion a year to help fund public services millions of us rely on daily,” a government spokesperson told Fortune in a statement.
Talks on a possible change to the taxing on inheritance are set against a backdrop of persistently high but easing inflation and high-interest rates impacting British households.
These factors have also put pressure on public finances in the long run as government debt is tied to them. A reduction or abolition of the inheritance tax could further affect national spending.
The current regime, first introduced in 1986, was an effort to redistribute wealth in society by taxing the rich and directing that into benefits for those who are less well-off.
But over time, this system has earned a reputation for being easy to circumvent and has consistently been one of the most 'unfair taxes' in the country.
Reforms to the system such as placing a cap on certain reliefs that typically “open up channels to avoid the tax” could help create a robust source of revenue for the government, raise up to £4.5 billion ($5.5 billion), IFS argued.
These funds could then be channeled into other public-sponsored programs or tax cuts in other areas
We intend that both capital and land—in a word all the raw materials of labor—should cease being transferable through the right of inheritance, becoming forever ...
Monday, May 13, 2024
Libyan Patriarchal Customs Deny Women Their Rights to Inheritance (2)
Maher Al Shaeri
The law protects the women’s rights
Musa Al-Qunaidi, a specialist in public law and lecturer at Misrata University, says, “When we talk about law in this context, we are talking about Law No. 6 of 1959, regarding the protection of women’s right to inheritance. Article 2 stipulates that it is impermissible to withhold payment of the share of inheritance to which a woman is entitled. And Article 5 stipulates that anyone who violates the provisions of this law shall be punished by imprisonment as well as being made to pay the woman the share of the inheritance to which she is entitled.”
Ahmeed Al-Mourabit Al-Zaydani, head of the Victims Organization for Human Rights, agrees. He says that depriving women of inheritance constitutes violence against them. Based on Article 2 of Law No. 6, he argues that it is impermissible to withhold from a woman her rightful share of inheritance, or to prevent her from benefiting from it or disposing of it.
On the question of substituting a financial reward for the rightful inheritance, Al Zaydani says that, as long as this is done with the woman’s complete consent, and there is no coercion or fraud involved, then there is no problem with such a substitution, provided the woman has full legal capacity and is over the age of eighteen. The compensation must also equal the real value of the inherited property or possessions.
However, if the compensation is made under coercion – seizing her share of the inheritance, and forcing her to accept financial compensation under the pretext that the inheritance from the property will go to a stranger (her husband) – then this is not permissible and is a violation of the text of Article 2. Some women were able to obtain judicial rulings on their inheritance rights and were forced – under threat – to give them up. Others were pressured to accept small sums of money or even remain silent about their rights without any of the “consolation” amount they are sometimes given Holding on to traditional customs and norms
Muhammad Al-Ghaithi, a member of the Committee of Elders and of the Dispute Resolution Committee, sees no objection to the fact that assets and property are inherited by male heirs only. He says that this is common practice in the eastern region and even in all of Libya. For Al-Ghaithi, the reason is that “across Cyrenaica, the prevailing practice is that a person owns a particular plot of land that belongs to him entirely and exclusively.”
According to Al-Ghaithi, splitting up land means it will be wasted, and divided between tribes, “What we are seeking usually is for the entire land to be ours as one family; this is the main reason.” Al-Ghaithi points out that some people do not have much money to pass on when they die, but do have a lot of property. So, males who inherit are not able to compensate female heirs financially for their share in the property. They therefore take full possession of it. He says, “We know that this is forbidden by law, but the brothers who inherit are not able to price the land and give money in compensation.”
What happened to the law?
Today there is much discussion and back and forth about the law – now in its 65th year – as the country waits for a “new” constitution, which is in the process of being drafted. In 1973, the Libyan state suspended the constitution, established in the 1950s, on orders from Muammar Gaddafi, who ruled Libya from September 1, 1969 until February 2011. Gaddafi ordered the abolition of all laws and regulations in force in Libya, and so the state has no constitution. The majority of laws today are those that were in force when Libya was a kingdom under the country’s founder, King Idris al-Senussi.
Maryam Hussein, a member of the Constitution Drafting Assembly (CDA), explained to us about how women are deprived of rights to inherit and how the CDA sees this. Article 49 of the draft Libyan constitution stipulates that “the state is committed to: supporting and caring for women and enacting laws that guarantee their protection and raise their status in society; eliminating negative culture and social customs that detract from their dignity; prohibiting discrimination against them; guaranteeing their right to representation in general elections; and providing them with opportunities in all fields, while all necessary measures will be taken not to prejudice or harm rights women have acquired and to support them.” Custom rules
Only discussing laws and constitutions does not get to the heart of the problem, though. The issue is not that easy, according to Dr. Salma Al-Shaeri, a specialist in contemporary social issues. She says that for Libyan women to demand their inheritance through the courts and judicial system is considered shameful by society and damaging to a family’s reputation. This in turn leads to more persecution and oppression of women and the harnessing of all means to prevent them from gaining their rights. “In fact, things have gotten to the stage where some families have stolen the identity of women so as to waive the right to inheritance in their name. This case recently happened in the city of Derna,” she says.
Even though the constitution remains suspended, laws are still in force. The author of this report has managed to obtain a complaint filed by two women in one city against their brothers. The men had categorically refused to give them the inheritance due to them from their father, who left properties worth millions, forcing them to go to court.
When the men appeared before the judge and were faced with the legal documents, they promised to give their sisters what was rightfully theirs. The two women therefore concluded that the matter had been resolved. But the men did not keep their promise, showing that social custom in Libya can even prevent judicial rulings being implemented. The brothers have gone as far as threatening that their sisters will be killed if they make any further complaints.
“Women are intimidated or persecuted if they make a complaint against their brothers to obtain their rightful share of the inheritance. Lack of knowledge leads some women to sign documents giving up their rights to an inheritance in return for a symbolic sum of money, which is paid just to silence them.” Some women have even faced death threats.
“If the case comes to court, social customs remain a stumbling block for women when trying to secure their rights to inheritance” Musa Al-Qunaidi argues that when it comes to punishment, this is a matter for judges not legislators. Every crime has its appropriate punishment, and the judge has the right to sentence people to between one day and three years in prison, according to the law.
Back to pre-Islamic times
“Depriving women of inheritance is a remnant from pre-Islamic times. Women had no inheritance rights until Islam came and removed this injustice against them.”
So says Dr Salma Al-Shaeri, a specialist in contemporary social issues. She points out that the problem goes beyond depriving women of their rightful inheritance and has devastating social effects, including stoking hostility and hatred between a sister and her brothers. It can affect sons and daughters on both sides, while some women may resort to taking some action in revenge, which would harm the reputation of the family.
Dr Al-Shaeri also argues that depriving women of a large portion of their property inheritance creates an economic disparity between them and their brothers, who alone benefit from the returns on the property, while the women remain economically inferior.
Women are the answer
The public prosecution service cannot initiate a criminal case on its own, explains Musa Al-Qunaidi, but needs first to receive a complaint from an inheritor claiming her rights from brothers or other relatives. Only after that can the prosecution proceed with the case.
Al-Qunaidi believes that the problem comes down to the fear that women have, and their failure to act against those who withhold their rights from them. Alongside this are customs and traditions and the failure of the executive agencies of government to carry out their duties once the matter reaches court.
Ahmeed Al-Mourabit Al-Zaydani, head of the Victims Organization for Human Rights, agrees. He says that depriving women of inheritance constitutes a violation against them, according to Article 2 of Law No. 6. He believes that it is impermissible to not give a woman the share of the inheritance to which she is entitled, or to prevent her from benefiting from it or disposing of it.
“Women can be intimidated or persecuted if they make a complaint against their brothers. Lack of knowledge leads some women to sign documents giving up their rights to an inheritance in return for a symbolic sum of money, which is paid just to silence them. But then they say they were forced into it,” says Al-Qunaidi. Women can sometimes even face death threats. “Money makes people lose their minds,” as the popular saying in Libya has it.
Fathia used to lower her head whenever she passed by the building which she believed should be hers, in full or in part, according to Islamic law. But today she is more determined than ever to obtain what is due to her, and thereby become an example to other women in working to obtain their legitimate inheritance rights.
Monday, April 03, 2023
Super tax breaks costing $45bn a year are ‘inheritance schemes’ for Australia’s rich, new report says
The Albanese government could save the budget billions of dollars by winding back generous superannuation benefits that effectively produce “taxpayer-funded inheritance schemes” for the wealthy, a new Grattan Institute report argues.
The “super savings” report says such tax breaks now cost $45bn a year, or 2% of GDP, and will soon exceed the age pension costs. Two-thirds of the breaks go to the top 20% of income earners who typically are already saving enough for retirement.
“Much of the boost to super balances from tax breaks is never spent,” it said. “By 2060, one-third of all withdrawals from super will be via bequests – up from one-fifth today.”
Brendan Coates, one of the report’s authors, said the projected huge federal budget deficits and mounting demands for more spending on the NDIS, defence and other programs gave urgency to reining-in “unfair and unsustainable” super benefits.
“Our super tax breaks have been too generous for a long time,” Coates said.
The biggest changes were introduced by then treasurer Peter Costello in 2006 and “both sides of politics have been gradually chipping away at the tax breaks ever since,” he said.
The 10 recommended changes include raising the so-called division 293 tax on super contributions from high earners from 30% to 35%, and cutting the annual income threshold at which this tax applies from $250,000 to $220,000. The budget would reap $1.1bn a year from the change.
To make the scheme more equitable, the low-income superannuation tax offset should be extended to those earning as much as $45,000 a year, up from $37,000 now. That change could cost $530m annually.
The Albanese government drew the ire of some investor groups and media pundits in February when it announced earnings on super balances above $3m would be taxed at a rate of 30%, up from the current 15%, starting in July 2025. Shadow treasurer, Angus Taylor, criticised the move as an “attack on middle Australia”, while the opposition leader, Peter Dutton, has promised to repeal it if the Coalition wins office.
The public’s response to that move – which is expected to affect about 80,000 people initially – was “actually heartening” and should encourage the government to go further, Coates said. “Polling of that change shows it has been wildly popular despite intense media commentary.”
The treasurer, Jim Chalmers, is busy preparing his second budget –– to be released on 9 May. At the end of last year, the underlying cash deficit for the 2022-23 year was expected to be almost $37bn with the annual shortfall rising to about $50bn in 2024-25 and 2025-26.
Treasury officials are understood to have listened respectfully to the proposals but for now are sticking to the tax changes already planned for the $3m-plus super accounts.
Other changes proposed by the Grattan report include reducing the pre-tax contributions cap to $20,000 a year, from $27,500.
The move would save the budget $1.6bn a year by trimming voluntary contributions typically made by older people with already-high balances. Men also typically benefit much more than women.
Provisions that allow co-contributions and carry-forward provisions, intended to encourage catch-up payments, instead “facilitate tax minimisation and should be abolished” it said. Savings to the budget would be about $1.1bn a year.
The report said all super earnings in retirement should be taxed at 15%, as they are before people retire. Such a change would save the budget $5.3bn annually.
Coates said warnings that changing super conditions would alter people’s retirement plans were exaggerated. “We change tax rates on personal income all the time,” he said, adding that the proposed changes would bring superannuation back in line with its original purpose. “This isn’t about blowing up the system.”
Mikhail Bakunin
Report of the Committee on the Question of Inheritance
FIRST INTERNATIONAL WORKINGMENS ASSOC. 1877
The Committee proposes the following resolutions:
Whereas the right of inheritance is one of the principal causes of the economic, social, and political inequality which governs,the world; Whereas, so long as there is no equality, there can be neither freedom nor justice but only oppression and exploitation—slavery and the labor of the people; Therefore, the Congress recognizes the need to abolish fully and completely the right of inheritance.
Citizens,
This question, which will be discussed at the Basle Congress, is divided into two parts, the first being the principle, and the second being the practical application of the principle.
The question of the principle itself should be considered from two standpoints: expedience and justice.
From the standpoint of the emancipation of labor, is it expedient, is it necessary, to abolish the right of inheritance? In our opinion, to ask this question is to answer it. What can the emancipation of labor mean, if not its' deliverance from the yoke of property and capital? And how can property and capital be prevented from dominating labor and exploiting it so long as they are divorced from labor, monopolized by the members of a class who need not work in order to live because of their exclusive enjoyment of the fruits of that monopoly, who will continue to exist and to keep labor down by levying on it land's rent and capital's interest, who are made strong by this state of affairs, and who thus secure for themselves all the profits of industrial and commercial enterprises as is the case now everywhere, leaving to the workers, who are themselves crushed by the mutual competition into which they are forced, only what is absolutely necessary to keep them from starving to death?
No political or juridical law, however severe, will be able to prevent this domination and exploitation, no law can prevail against the force of circumstances, no law can prevent a given situation from producing all of its natural results: From this it clearly follows that, so long as property and capital remain on one side and labor remains on the other, the former constituting the bourgeois class and the latter the proletariat, the workers will be the slaves and the members of the bourgeoisie will be the masters.
But what separates property and capital from labor? What distinguishes the classes economically and politically from one another, what destroys equality and perpetuates inequality, the privilege of the few and the slavery of the many? It is the right of inheritance.
Need we demonstrate how the right of inheritance gives rise to every economic, political, and social privilege? Plainly, it alone maintains class differences. Through the right of inheritance, both natural and passing differences among individuals, of fortune or prosperity, differences that should not outlive the individuals themselves, are eternalized, one may say petrified. Becoming traditional differences, they create privileges of birth, they establish classes, they become a permanent source of the exploitation of millions of workers by mere thousands of the well-born.
So long as the right of inheritance is in effect, there can be no economic, social, and political equality in the world; and so long as inequality exists, there will be oppression and exploitation. In principle, then, from the standpoint of the all-round emancipation of labor and laborers, we must desire the abolition of the right of inheritance.
It is understood that we do not intend to abolish physiological heredity, that is, the natural transmission of physical and intellectual abilities, or to be more precise, that of muscular and neural abilities from parents to their children. This transmission is often unfortunate, for it causes the physical and moral maladies of past generations to be passed on to present generations. But the disastrous effects of this transmission may be fought only by applications of science to individual and collective social hygiene, and by a rational and egalitarian organization of society.
What we want to abolish, what we must abolish, is the right of inheritance, which was established by jurisprudence and which constitutes the very basis of the juridical family and the State.
It is also understood that we do not intend to abolish sentimental inheritance. By this we mean the passing on, to children or friends, of objects of slight value which belonged to their friends or deceased parents, and which, because of their long use, have personal meaning. Substantial inheritance is what guarantees to heirs, either in full or in part, the possibility of living without working, by levying upon collective labor either land's rent or capital's interest.
We intend that both capital and land—in a word all the raw materials of labor—should cease being transferable through the right of inheritance, becoming forever the collective property of all productive associations.
Equality, and hence the emancipation of labor and of the workers, can be obtained only at this price.
Few are the workers who do not realize that the abolition of the right of inheritance will in the future be the ultimate condition of equality. But some fear that if it is abolished now, before a new social organization has guaranteed the lot of all children regardless of the conditions under which they are born, then their children will find themselves in financial difficulties after their death.
"What!" they say. “From the sweat of my brow and through great privation, I have amassed two or three or four hundred francs, and my children will be denied them!" Yes, these will be denied them, but in return they will be cared for by society, without prejudice to the natural rights of the mother and father, and they will receive an upbringing and an education which you could not guarantee them even with thirty or forty thousand francs. For it is clear that as soon as the right of inheritance is abolished, society will have to take responsibility for all costs of the physical, moral, and intellectual development of all children of both sexes born in its midst. It will become their supreme guardian.
We shall stop here, because at this point the question joins that of all-round education, on which another committee should report to you.* But there is another point we should clarify.
Many persons hold that if the right of inheritance is abolished, then the greatest stimulus that impels them to work will be destroyed. Those who so believe still consider labor a necessary evil or, to speak theologically, the result of Jehovah's curse, which he angrily hurled at the unhappy human race and in which, by a singular caprice, he included the whole of creation.
Rather than enter into this solemn theological discussion, we shall base ourselves on the simple study of human nature, answering those who disparage labor, by saying that for every person who possesses human capabilities, labor, far from being an evil or a painful necessity, is a need.
To be convinced of this, you may conduct a simple experiment on yourself: force yourself to be absolutely inactive for only a few days, or to do sterile, unproductive, and stupid work, and see whether at the end you do not feel most unhappy and degraded! Man's very nature compels him to work, just as it compels him to eat, drink, think, and speak.
If labor is hated today, this is because it is excessive, brutalizing, and forced, because it is the death of leisure, because it deprives one of the possibility of enjoying life fully, and because nearly everyone is compelled to apply his productive energy to that type of labor which least fits his natural inclinations. Labor is hated, finally, because in this society, which is founded on theology and jurisprudence, the possibility of living without working is considered an honor and a privilege, and the need to work for a living is regarded as a sign of degradation, a punishment and a disgrace.
When the labor of body and mind, manual and intellectual together, is considered the greatest honor, the sign of virility and humanity, then society will be saved. But that day will never arrive so long as inequality reigns, so long as the right of inheritance has not been abolished.
[Examining the principle of the abolition of inheritance from the second standpoint, we ask:] Will this abolition be just? But if it is in everyone's interest, in the interest of humanity, how could it be unjust? We must distinguish historical, political, and juridical justice from rational or simply human justice. The first has ruled the world until now, making it a repository of bloody oppressions and injustices. The second will emancipate us. Therefore let us examine the right of inheritance from the standpoint of human justice.
A man, we are told, has acquired through his labor several tens or hundreds of thousands of francs, a million, and he will not have the right to leave them as an inheritance to his children! Is this not an attack on natural right, is this not unjust plunder?
First, it has been proven a thousand times that an isolated worker cannot produce very much more than what he consumes. We challenge any real worker, any worker who does not enjoy a single privilege, to amass tens or hundreds of thousands of francs, or millions! That would be quite impossible. Therefore, if some individuals in present-day society do acquire such great sums, it is not by their labor that they do so but by their privilege, that is, by a juridically legalized injustice. And since a person inevitably takes from the labor of others whatever he does not gain from his own, we have the right to say that all such profits are thefts of collective labor, committed by a few privileged individuals with the sanction of the State and under its protection.
Let us proceed.
The thief who is protected by law dies. With or without a testament, he leaves his land or his capital to his children or to his parents. This, we are told, is a necessary result of his individual freedom and his right; his desires must be respected. But a dead man is dead for good. Outside of the altogether moral and sentimental existence created either by the pious memories of his children, parents, or friends (if he deserved such memories) or by public recognition (if he rendered some real service to the public), he no longer exists at all: He therefore can have neither freedom nor right nor personal will. Ghosts should not rule and oppress this world, which belongs only to the living.
So that he may continue to will and to act after his death, a juridical fiction or political lie is necessary, and as he is henceforth incapable of acting by himself, some power—the State—must take responsibility for acting in his name and for him. The State must execute the'will of a man who can have no will because he no longer exists.
And what is the influence of the State, if it ts not everyone's influence organized to everyone's disadvantage and to the advantage of the privileged classes. Before all else, it is the production and the collective strength of the workers. So do the masses of workers have to guarantee the principal source of their poverty, the transfer of inheritances, to the privileged classes? Must they forge with their own hands the chains that shackle them?
For the right of inheritance, which is exclusively political and juridical and hence contrary to human right, to collapse by itself, the proletariat need only declare that it no longer wishes to support the State, which sanctions its slavery. The abolition of the right of inheritance is enough to abolish the juridical family and the State.
Moreover, all social progress has proceeded from successive abolitions of rights of inheritance. First, the right of divine inheritance was abolished, the traditional privileges or punishments which were long considered the result of either diving benediction or divine malediction.
Then the right of political inheritance was abolished, resulting in the recognition of the sovereignty of the people and the equality of citizens before the law. At present, in order to emancipate the worker, the human being, and to establish the reign of justice on the ruins of all the political and theological injustices of the present and the past, we must abolish economic inheritance.
The last question to be resolved addresses the practical measures we must take to abolish the right of inheritance. The right of inheritance may be abolished in two ways: either by successive reforms or by social revolution.
It can be abolished by reforms in those fortunate countries, which are very few in number if they exist at all, where the class of property owners and capitalists, the members of the bourgeoisie, inspired by a spirit and a wisdom that they now lack, finally realize the imminence of social revolution and earnestly desire to come to terms with the world of the workers. In this case, but only in this case, the path of peaceful reforms will be possible. By a series of successive, prudently planned modifications, mutually agreed between the workers and the members of the bourgeoisie, the law of inheritance could be abolished completely in twenty or thirty years, replacing the present customs of property, labor, and education with collective labor, collective property and-all-round upbringing and education. It is impossible for us to determine further, the character of these reforms, for they must necessarily be adapted to the particular situation in each country. But in all countries the goal remains the same: the establishment of collective property, collective labor, and individual freedom, through universal equality.
The way of revolution will naturally be shorter and simpler. Revolutions are never made either by individuals or by associations. They are brought on by the force of circumstances. The International by no means has as its goal the making of the revolution, but it ought to take advantage of [the spirit of R]evolution, organizing it as soon as it appears as the result of the increasingly clear injustice and ineptitude of the privileged classes. We must understand ,that on the first day of the revolution the right of the inheritance will simply be abolished, along with the State and juridical law, so,that on the ruins of these injustices the new international world may then appear, the world of labor, science, freedom, and equality, organizing from itself the bottom up, by the free association of all productive associations, across all political and national frontiers.
The Committee proposes the following resolutions:
Whereas the right of inheritance is one of the principal causes of the economic, social, and political inequality which governs,the world; Whereas, so long as there is no equality, there can be neither freedom nor justice but only oppression and exploitation—slavery and the labor of the people; Therefore, the Congress recognizes the need to abolish fully and completely the right of inheritance.
This abolition will be accomplished as. events require, either by reforms or by revolution.
*No such committee was formed; but see "All-Round Education" in this volume:
Jeremy Hunt could face unrest from Conservative MPs in former Labour heartlands in northern England if he cuts inheritance tax while reforming the welfare system
The Chancellor is said to be contemplating slashing inheritance tax by as much as half in next Wednesday's Autumn Statement.
And he said on Saturday that he was contemplating "difficult decisions to reform the welfare state".
Economists have given the Chancellor a better-than-expected spending forecast, meaning that he has up to £10 billion more to spend on measures, which he could use to pay for the tax cut.
Mr Hunt may be letting himself in for criticism from some quarters if he is seen to be reducing inheritance tax - a move likely to benefit the wealthy - while cutting welfare for working-aged adults.
Mr Hunt told broadcasters in Milton Keynes: "You are going to have to wait until Wednesday to hear the decisions I take but one thing I want to be very clear about: there's no easy way to reduce the tax burden.
"What we need to do is take difficult decisions to reform the welfare state."
Benefits normally go up in April based on rate of inflation from the previous September. Mr Hunt is said to be looking at a different rate by which to increase benefit payments.
'Red wall' Conservative MPs, many of whom represent more traditionally working class constituencies in the north and the Midlands, said they were unsure about the plans.
John Stevenson, chairman of the Northern Research Group, which represents between 30 and 40 members in red wall seats, told the Guardian: "I am all for reforming tax and inheritance tax needs reforming. However at this time any tax cuts should be aimed at helping businesses or the lower paid.”
Jonathan Gullis, the MP for Stoke-on-Trent North, said: "While long term this [inheritance tax] should be eventually abolished, now is not the right time for this tax cut.
"Instead, we should be looking at cutting the basic rate of income tax [and] increasing the 40p tax threshold to help families really feeling the pinch."
Mr Hunt will finally reveal the details of a consultation which will give communities extra benefits if they agree to having the electrical infrastructure near their homes.
Households could get £1,000 a year off their bills for several years.
Locals will also be able to get extra cash for local projects including roads and GPs as part of a bid to woo them over.
However, the news has already got a backlash from campaigners, who say that bill help should not be based on geography.
The Chancellor has said the economy is at a 'turning point'. Picture: Alamy
Mr Hunt said on Friday that the government was set on a path to “reducing the tax burden”.
Speaking to The Telegraph, Mr Hunt said: “The big message on tax cuts is there is a path to reducing the tax burden and a Conservative government will take that path.
“It’s not an easy path. There are difficult decisions you have to take to get there.
“But we believe if we’re going to grow the economy, this is going to be an Autumn Statement for growth, then we have to show the country there is a path to a lower tax economy.”
Aside from tax cuts, the Chancellor is also poised to announce a crackdown on benefits claimants and energy bills help for people who agree to have pylons installed in their area.
Asked specifically whether the statement would see the introduction of tax cuts, Mr Hunt said: "Without pre-empting the decisions that the Prime Minister and I make, this is an Autumn Statement for growth. It’s a turning point for the economy."
His comments come after new data published this week showed inflation had dropped sharply to 4.6% from 6.7%, the lowest it has been in two years.
The new data meant the government met its target to halve inflation by the end of the year.
Mr Hunt is also set to announce financial sanctions for benefits claimants who can work but are choosing not to. Picture: Alamy
While the specifics of Mr Hunt’s statement next week remain unknown, inheritance tax cuts and a crackdown on benefits claimants are thought to be among the measures announced.
Another measure set to be announced is a £120 rise in council tax for the average family.
The Treasury is rumoured to be planning to announce changes to the pension triple-lock, which guarantees that pension rates will rise by either the rate of inflation, 2.5%, or the rate of wage increases over the past year.
Under the planned changes, bonuses could be scrapped from the wage growth calculations.
Homeowners who make their houses more energy efficient within two years of purchasing could get a partial Stamp Duty rebate, under new plans set to be announced in the Autumn statement.
The threshold at which people start paying stamp duty could also increase.
The rate is currently 5% of the value of a property over £250,000 and 10% of the value of properties over £925,000.
“FISCALLY INEPT AND MORALLY BANKRUPT”: GOVERNMENT WASTES ALMOST £100BN
November 19, 2023
The UK Government is reported to have wastefully spent or dubiously allocated an estimated £99,418,907,782 of tax-payers’ money since 2019.
This eye-watering figure, totalled up in Best for Britain’s Scandalous Spending Tracker, is almost 100 times what’s needed to end industrial action from junior doctors and almost equal to the total amount the government spent on education last year.
The total includes £140m sunk on the Rwanda Deal, which was this week ruled unlawful by the Supreme Court. As well as £2.3bn spent on cancelled parts of HS2, and £50m spent on a new helicopter for top Tories.
The new figures come to light as the Chancellor prepares to unveil his Autumn Statement amid an ongoing cost-of-living crisis when 1 in 3 children are living in poverty in the UK. Lack of investment in public services has also led to school closures and record NHS waiting times.
As Chancellor and then Prime Minister, Rishi Sunak has had responsibility for government spending for almost all of this period.
Campaigners claim the figures demonstrate the urgent need for an immediate general election.
Naomi Smith, CEO of Best for Britain, said:
“The notion that the Tories are safe with money has been blown out of the water. It’s disgraceful that the government continues to squander huge amounts of public money whilst so many struggle to feed their families and heat their homes.
“We can’t wait any longer for change. This fiscally inept, and morally bankrupt government must go and that’s why at the next election, Best for Britain will organise the most powerful tactical voting operation the nation has ever seen.”
Jeremy Hunt says ‘difficult decisions’ needed on benefits as he hints at inheritance tax giveaway
The Chancellor is expected to announce a cut to inheritance tax in Wednesday’s autumn statement as he puts a squeeze on benefits
Chancellor Jeremy Hunt has hinted personal and business tax cuts will be announced in the Autumn Statement (Photo: PA)
Chancellor Jeremy Hunt has said “difficult decisions to reform the welfare state” are needed as he considers squeezing benefits while slashing inheritance tax in his forthcoming autumn statement.
Mr Hunt indicated he could reduce levies on businesses and has given his strongest hint yet that he will use Wednesday’s financial statement to cut taxes in a bid to boost economic growth.
During a visit to Milton Keynes on Saturday, the chancellor would not be drawn on reports of tax cuts but said he would “not do anything to jeopardise” the battle against inflation after the Prime Minister’s target of halving it this year was hit.
Speaking to broadcasters on Saturday during a visit to Milton Keynes, the Chancellor said: “You are going to have to wait until Wednesday to hear the decisions I take but one thing I want to be very clear about: there’s no easy way to reduce the tax burden.
“What we need to do is take difficult decisions to reform the welfare state.
“When it comes to tax, I know there’s been a lot of speculation, we will not do anything that compromises the battle against inflation.
“We’ve succeeded this week in halving inflation compared to when I became Chancellor and Rishi Sunak became Prime Minister, that is the single-most important thing we’ve done and we will not do anything to jeopardise the progress.”
He said “we will always be a compassionate Conservative government” but cited “nearly a million vacancies across the economy, so we do need to reform our welfare system.”
Ahead of Wednesday’s financial announcement, the Chancellor told the Telegraph that now is a “turning point for the economy” and that “this is the moment” to go for growth.
He added: “The big message on tax cuts is there is a path to reducing the tax burden and a Conservative government will take that path.”
Ministers have already announced a fresh welfare crackdown in an attempt to get people back into work under a toughened sanctions scheme.
Among the new measures, free prescriptions and legal aid will be cut off for benefit claimants who are deemed fit to work and do not seek employment.
Mel Stride, the work and pensions secretary, said: “We are expanding the voluntary support for people with health conditions and disabilities, including our flagship Universal Support programme.
“But our message is clear: if you are fit, if you refuse to work, if you are taking taxpayers for a ride – we will take your benefits away.”
“For many people, benefits is their sole income because work is not an option,” the charity said.
“For those who could and want to work vague threats around the removal of benefits, free prescriptions and sanctions if not accepting the first job offered are not helping, in fact they are causing those already in the throes of long-term ill health and lifelong disability to suffer worsening health issues.”
Meanwhile, it has been widely trailed that Mr Hunt is mulling a cut to inheritance tax in a bid to gain support from the right of the party.
Prime Minister Rishi Sunak is under mounting pressure as the Conservative Party lags more than 20 points behind Labour in the polls.
Around only four per cent of deaths in 2020/21 resulted in inheritance tax being paid, with exemptions allowing many couples to pass on up to £1 million tax-free.
According to The Times, the options for cutting inheritance tax – which is charged at 40 per cent above £325,000, with an extra £175,000 towards a main residence passed to direct descendants – include reducing it by 50 per cent, 30 per cent, or 20 per cent.
The Tories are said to be then considering making abolishing it entirely an election manifesto pledge next year, which could cost £7 billion a year in the short term. However, the Institute for Fiscal Studies forecast that the amount that the tax raises could rise to more than £15 billion by 2033.
Conservative former chancellor Lord Clarke said that while the move may please MPs on the Tory right, he warned others would find it “appalling”.
He told Times Radio: “Well, it’s not the tax cut I would choose. Indeed, I’m not sure he’s got any room for tax cuts.
“And choosing inheritance tax at the present time might appeal to the Conservative right, but it leaves them open to the most appalling criticisms when inflation and the state of affairs is making poorer people in this country very vulnerable indeed, giving tax relief to those families that are lucky enough to have members of it with capital above the limit through inheritance tax and pay any significant amount of tax on the inheritance.”
He added he was “not sure that the economic and financial state of the country justifies it”.
Labour leader Sir Keir Starmer told broadcasters during a visit in Scotland: “We’ll have to wait to see what the Government says in its autumn statement. What I want to see is a serious plan for growth.”
We intend that both capital and land—in a word all the raw materials of labor—should cease being transferable through the right of inheritance, becoming forever ...
