Money blog: What will happen to tax and interest rates under Labour – and how will benefits change? | Join our live Q&A (2024)

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18:20:01

The Q&A has now ended - scroll through the answers below

Thanks for all your questions - and for following Ian King's responses on the likely changes we can expect under the new Labour government.

If you could not join us in time, do not worry - you can scroll through the answers below at your leisure.

18:18:01

Can the government sort out the price of concert tickets?

Dad of Swifties:

Why don't the government remove VAT on concert tickets like in other countries and announce stronger regulation on sites like Ticketmaster? Prices are a joke

Here's whatIan King, our business presenter, says on this one...

Labour promised not to increase the rate of VAT during the election campaign.

That is very different from cutting it or making some products and services tax free.

I'd be surprised if it happened. The government needs to raise money, not give it away.

That said, I note that US Congress has recently been talking about tougher regulation of businesses like Ticketmaster, so doubtless parliamentarians on this side of the Atlantic will be watching closely.

18:14:01

Who will be eligible for the new housing pledged?

Gingernut:

May I ask who is likely to be eligible for the proposed new housing as outlined today? I have a son of 43 and his wife living with us as they can't afford a mortgage, and aren't eligible for social housing. Not everyone in Britain wants the responsibility of owning a house.

Ian King, Sky News business presenter, says...

Labour is aiming for increasing housing availability across the board with a mix of both public/social housing and also private sector accommodation – while also looking to stimulate the "build to rent" sector.

It's not a case of eligibility, as such.

They're seeking to increase supply in the first instance – get that right and demand will be met.

18:10:01

Haven't we been here before with housebuilding targets?

P45:

Haven't we heard all this before with housebuilding targets - what's different this time?

Ian King, Sky News business presenter, says...

Good question – which reminds me that one of the most dangerous phrases in investment and business is "it's different this time".

What genuinely appears to be different is that Labour seem totally committed to sweeping away the planning rules and regulations that stand in the way of more homes being built.

If they can pull this off then, all other things being equal, they will have a fighting chance of completing 1.5 million new homes over the life of this parliament.

The other thing I would say is that this is a hugely ambitious target and so Labour, by making it public, have confidence it can be done.

You can rest assured that Labour will be asked about it a lot towards the next general election.

The political graveyards are littered with those politicians – Harold Macmillan, Conservative prime minister from 1957-1963, is a good example – who made promises on housebuilding they failed to keep.

18:06:01

Will no-fault evictions still be axed?

Elaina:

The last government promised an end to no-fault evictions... is this legislation still alive?

Another short answer from our business presenterIan King...

The legislation died with the last government but, yes, the expectation is that Labour will abolish no-fault evictions.

18:02:01

What will Labour do with dividend and corporation tax?

Jonny:

What will Labour do with dividend tax? And what about corporation tax?

Ian King, Sky News business presenter, says...

Rachel Reeves is already committed to keeping corporation tax unchanged for the life of this parliament.

But no such commitments have been forthcoming on the taxation of dividends.

And some people fear the worst because Labour has form here - Gordon Brown took away tax relief onthe dividends that pension funds received on their investments in 1997 - which contributed to the near extinction of gold-plated "defined benefit" or "final salary" pension schemes in the private sector.

In fairness, Labour can point out that the Conservatives also stripped away protections enjoyed by savers on their dividends.

You can now only receive dividends of £500 on shares or investment funds held outside an ISA. The allowance stood at 10 times that just seven years ago.

The moral of the story is clear – if you hold shares or investment funds which pay dividends, protect them in an ISA, which ensures the payouts will be tax-free.

17:58:01

Public-owned railways were a disaster before - how will renationalising help?

Arthur:

If memory serves me correctly weren't the railways an unmitigated disaster last time they were in public ownership? How is renationalising meant to help anyone?

Here's whatIan King, our business presenter, says to this...

Labour argues that, in state ownership, the rail network can be more coherent with one "fat controller" type figure in charge to oversee timetables and ticketing.

Bear in mind most of the railways more or less have been renationalised already – the exception being the rolling stock companies, which will remain privately owned.

You are right to point out the shortcomings of the nationalised model – as I did in this article for Sky News back in 2017.

The nationalised model is not a silver bullet – as English and Scottish football supporters to have used Germany's nationalised rail service during the Euros will testify.

17:54:01

How are Labour going to achieve growth?

James85:

We heard nothing in the campaign about how growth would be achieved - how much convincing detail did we get from Reeves?

Ian King, Sky News business presenter, says...

The UK's sclerotic planning rules have been a major drag on growth over the last decade.

If Labour has found a way of obviating those rules then it should generate growth. But bear in mind this is going to cause huge rows as Whitehall orders local planning managers what to do and rides roughshod over them when they don't co-operate.

Not everyone will like it and especially those who find their views interrupted by, for example, new homes. The same applies to tearing up the rules banning more onshore wind farms.

All other things being equal, it should also be positive for growth, but those who have views of open countryside blighted by new wind turbines may disagree.

17:50:01

Can stamp duty discrepancies be addressed?

Croydon Ajay:

Can anything be done to scrap the disparities in stamp duty which means young buyers in London have to pay when the same people in the North East don't pay a penny?

Ian King, Sky News business presenter, says...

Stamp duty is a rotten tax and, if you want to promote growth, scrapping it would certainly be a good way of doing so. But given that Stamp Duty Land Tax brought in £11.6bn in the last financial year, the government is likely to want to keep it in place.

The differing tax takes to which you refer reflect the fact that house prices are cheaper in the North East than in London.

SDLT is very much a London tax – the capital accounted for 36% of all SDLT paid in 2021-22, the latest year for which figures are available.

Homebuyers in the London borough of Westminster alone paid more SDLT than the whole of the North West of England. I doubt those disparities to which you refer will change unless house prices in London collapse and house prices rocket elsewhere.

You are right to point out the pernicious effects of this.

In some London boroughs, primary schools are starting to close, because parents find they cannot live in the capital and raise a family. They're moving out – reducing demand for London school places in some areas.

17:46:01

How much would it cost to scrap the two-child benefit?

Disgruntled:

Ian can you give us an idea of how much scrapping the two-child benefit cap would cost and why is this not achievable with a windfall tax on oil and gas companies raking it in? Starmer is a Tory with a red rosette

Ian King, Sky News business presenter, says...

The Resolution Foundation has estimated that the two-child benefit cap will save the government £2.5bn during the current financial year – which would rise to £3.6bn if applied to all families claiming universal credit.

Labour is committed to raising the levy on North Sea oil and gas producers from the current 75% to 78% - and has earmarked the money raised will go towards funding its wider plans for energy and, in particular, decarbonisation.

It would be ill-advised to raise taxes further. The decisions it has made have already had an impact on investment in the North Sea, as I report here.

And don't forget, the cap is not just about saving money. It's also about avoiding awkward newspaper headlines and stories about big families being paid a small fortune in benefits of the kind that embarrassed the last Labour government and angered so many of its traditional working-class supporters in particular.

Money blog: What will happen to tax and interest rates under Labour – and how will benefits change? | Join our live Q&A (2024)
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