Treasury denies Healey plan to cut welfare bill before election, claiming his comments were misinterpreted – UK politics live

Asked earlier if there would be a cut to the welfare bill before the next election, the chancellor said: ‘There will be a reduction in the benefits bill’ Helen Miller , director of the Institute for Fiscal Studies thinktank, is giving a presentation summing up the IFS’s view of t

Asked earlier if there would be a cut to the welfare bill before the next election, the chancellor said: ‘There will be a reduction in the benefits bill’ Helen Miller , director of the Institute for Fiscal Studies thinktank, is giving a presentation summing up the IFS’s view of the budget. Arguing that it contained plenty of “bad things” as well as welcome measures, she singled out founders’ relief for particular criticism. She said: After years of arguing that business asset disposal relief was a bad idea – and just when I thought the relief was on its last legs – a new, similar relief has popped up.

The new founders’ relief looks bonkers. It gives a lower rate of capital gains tax to a small subset of people with large gains. That will include some entrepreneurs that make investments with broader societal benefits – although most of that activity would have happened without the relief.

But it will also include people that just got lucky. There are very complex rules around who gets it – rules that will incentivise people to change their behaviour in weird ways simply to be able to get the relief. I could go on.

But the punchline is that this looks to me like yet another tax break for a chosen group with little economic reasoning behind it. Continue reading...