Simon Finkelstein

Former Special Adviser to Chancellor and Foreign Sec. Interested in politics, economic/foreign policy and Chelsea FC. Views are my own.

[Simon Finkelstein @Finksi]

HMRC's stats today show that @Jeremy_Hunt's *cut* to CGT for residential property in fact *raised* revenue for HMRC...

[IPPR @IPPR]

Today's stats show that 2024-25 tax year saw record capital gains, and capital gains tax revenue.

Capital gains tax is an increasingly important source of revenue for the government, particularly following the unprecedented boom in asset values over the past two decades.

Income from wealth is likely to become steadily more significant as technology adoption and automation accelerate in the coming years.

We don’t know what the government is planning for the upcoming budget, but CGT reform should be a priority.

[Simon Finkelstein @Finksi]

Alternative view: Control of the public finances and economic growth are indivisible. The fact we are spending too much is a drag on UK economic growth, both now and into the future.

[Steven Swinford @Steven_Swinford]

Exclusive from @patrickkmaguire

Andy Burnham has said that No 10 North will take over responsibility for economic growth from the Treasury as part of a “huge transfer of power” out of Whitehall

In an interview with The Times, the prime minister raised concerns about the Treasury’s traditional “dual role” in both promoting economic growth and controlling the public finances

He said the department’s focus on balancing the books “sometimes clouds that growth mission” and that the significance of No 10 North, which is based in Manchester, would become “more and more apparent as we go forward”

The prime minister said John Healey, the chancellor, was fully supportive of the approach, while he hit out at critics who have derided No 10 North as a “satellite office”

Comparing No 10 North to the Department of Economic Affairs, Harold Wilson’s doomed attempt to establish a dedicated growth ministry, Burnham said: “I just wish people might just engage with the seriousness of the proposition.”

“It is actually a huge transfer of power,” Burnham said. “It’s something that the country has never cracked before. I don’t wish this to sound, you know, a criticism or negative about the Treasury.

“There’s a job to be done around control of public finances. It’s just the dual job of growth and control of public finances [that] sometimes clouds the growth mission. And particularly having No 10 leading on that growth mission means you’ve got maximum power to unlock the blockages where they exist in the wider Whitehall system.”

https://t.co/yZvtx0um6q

[Simon Finkelstein @Finksi]

All eyes on how the cost of living package is funded tomorrow. Let's hope we get more clarity than this...

[John Rentoul @JohnRentoul]

No 10 announces £340m for rough sleeping, "funded from within uncommitted MHCLG budgets"

[Simon Finkelstein @Finksi]

Slightly surprised that the 'market friendly' option for Chancellor supposedly supports higher public spending funded by more borrowing...

[Geri Scott @Geri_E_L_Scott]

Who is the real Shabana Mahmood and what are her views on the economy?

https://t.co/XDsJIG5nD3

[Simon Finkelstein @Finksi]

The briefings that have emerged indicating Burnham will pursue a more sceptical of big tech AI strategy (simplifying I know) + the briefings on his opposition to Palantir worry me that this government will squander a real UK economic strength: attracting US tech investment..

[anne mcelvoy @annemcelvoy]

We’re getting quite a vibe that Andy finds technology/digital annoying. He’s right that the impersonal job process is soulless. But there are a lot of trade-offs here including people being able to go through the process without massive travel costs.
But who is really suggesting that we’re going back from the Zoom era in terms of time /travel efficiencies?

[Simon Finkelstein @Finksi]

We should be very pleased that our independent forecaster is going to be run by @haskelecon. A top class appointment.

[Office for Budget Responsibility @OBR_UK]

The Chancellor has nominated Professor Jonathan Haskel CBE, Professor of Economics at Imperial College London and a former MPC member, as the next Chair of the OBR. If approved by the Treasury Committee, he will take up the post later this year.

Read the full news post on our website: https://t.co/HO7KqEMvgG

[Simon Finkelstein @Finksi]

Essential reading

[Sir Jeremy Hunt MP @Jeremy_Hunt]

Here are the top 20:
1. DEBT: Bring down debt with a new fiscal rule saying that, outside emergencies, public spending will not grow faster than the economy.

2. WELFARE #1: Remove mild/moderate anxiety, depression and musculoskeletal conditions as criteria for claiming benefit and replace it with a guarantee of rapid NHS treatment as happens in Denmark.

3. WELFARE #2: Cap the DWP benefits budget just as defence and NHS budgets are capped. Otherwise the DWP has little incentive to find savings or stop abuse.

4. WELFARE #3: Devolve administration of the welfare system to elected mayors allowing them to keep a proportion of any savings made.

5. WELFARE #4: Require face-to-face benefit assessments with no telephone applications except in exceptional circumstances.

6. WELFARE #5: Replace the triple lock with a guarantee the state pension will always match inflation.

[Simon Finkelstein @Finksi]

Ironically a 'wealth tax' that doesn't work. There's a reason why equalising CGT with income hasn't been done by a previous Chancellor (beyond the growth/innovation/investment impacts) - we are close to or at the revenue maximising rate.

[BBC News (UK) @BBCNews]

Wes Streeting pledges 'wealth tax that works' https://t.co/HOeM2lQNJL

[Simon Finkelstein @Finksi]

*Taps the sign*

[Alex Wickham @alexwickham]

The fiscal rules move means tax rises are more likely. Burnham’s statements from the last few months also suggest hikes are coming. This could be the bolder policy change some in Labour are looking for, but any departure from the manifesto will be controversial. Our story:

[Simon Finkelstein @Finksi]

We should all note that the language briefed is "fully affordable" rather than "fully funded". Chancellor is also planning to announce support for bills next week supposedly. I'm sure the markets will love it...

[Larisa Brown @larisamlbrown]

EXCLUSIVE Sir Keir Starmer is expected to approve an £18 billion increase in defence spending as he faces a battle for political survival https://t.co/Y6kL9Sx46b with @Steven_Swinford and @oliver_wright

[Simon Finkelstein @Finksi]

My prediction: all the Labour leadership contenders will commit to the Reeves/Starmer fiscal rules, but say they will raise tax by more. The Rayner line here is a nice preview to a bank tax/new windfall tax. "Those who benefit from the crisis"....

[Simon Finkelstein @Finksi]

Rule 1 of crisis management: establish all the relevant facts before you respond to said crisis....

[Lewis Goodall @lewis_goodall]

Only three possibilities really

1) PM wasn’t told his own pick for US Ambassador has failed his security clearance. Foreign Office officials stood by and saw PM unknowingly mislead House and didn’t say anything. Still questions as to how it could possibly be neither No 10 nor PM nor FS asked as to what the status of his clearing was. Potentially gross incompetence in every direction. Or they just didn’t want to know. Which is especially outrageous given Starmer later essentially blamed security services.

2) PM did know. He misled House and country. Resignation matter.

3) it’s not quite 1 or 2 and there’s something about this story or details of this story we don’t fully understand yet.

[Times Radio @TimesRadio]

“If there was PM Zack Polanski and his chancellor entering No 11, I think they would be hit with a fairly rude awakening.”

Former Treasury adviser Simon Finkelstein speculates on how they would react to the Greens.

🗳️ How To Win An Election
🎧 https://t.co/XZzaE2wrxy

@Finksi

[Simon Finkelstein @Finksi]

I'm in the @Telegraph today worrying about the state of the UK public finances and a potential energy intervention. Not a popular argument but I fear a necessary one: we can't afford it...

https://t.co/nfdVwUfh5m

[Simon Finkelstein @Finksi]

What message to the public does it send, that after years of some of the most virulent public antisemitism, a single apology in a newspaper is enough for Kanye West to be afforded the platform of one of the UK's biggest music festivals?

[BBC Newsnight @BBCNewsnight]

"Absolutely the wrong decision"

Phil Rosenberg, President, Board of Deputies of British Jews, says Kanye West should not be allowed to headline Wireless Festival in London this summer following previous antisemitic comments, which he later publicly apologised for.

#Newsnight

[Simon Finkelstein @Finksi]

@rbrharrison Indeed. And for some reason a speech given to fans of UK monetary policy in...North Macedonia?!

[Simon Finkelstein @Finksi]

I can't help but think the Bank of England, having calibrated their language sensitively of late, got their communication wrong last week which has caused additional volatility...

[Rupert Harrison @rbrharrison]

Unusually the economists are right. Markets are literally fighting the last war - conditions now very different from 2022. Weak labour market, tight fiscal policy and looming hit to growth.

Markets wrong on UK interest rate rises, say economists - https://t.co/fylBVk5Ce7 via @FT

[Simon Finkelstein @Finksi]

A demonstration of hatred round the corner from where one visits grandparents/buys bagels. Shocking for its proximity to where one carries out the everday things in life.

However, at a troubling time for British Jews, the solidarity shown by others at this time means a lot.

[Jewish News @JewishNewsUK]

More than half a million raised for Hatzola NW within hours of firebomb ambulance attack

https://t.co/ssQkZVqcZ8

[Simon Finkelstein @Finksi]

3/ What I really struggle with, is the claim that 'stability' has been achieved with the public finances. If this is economic stability, I would hate to see what instability looked like (clue: not the speculation leading up to the last Budget).

[Simon Finkelstein @Finksi]

2/ There has been much comment about the government lacking an economic strategy, but it's clear: public investment (paid for by borrowing and tax rises), industrial strategy, and regional growth. A 'Bidenomics-lite' prospectus. I don't agree with it, but it's clear.