Top news
- Ian King answering your questions on what Labour government means for your personal finances – submit yours above
- Publicans hit out at Co-op for 'disgraceful' TV advert
- 'Price war well and truly on' as two major lenders announce mortgage rate cuts
- Protesters soak tourists with water guns in Barcelona
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- Best of the Money blog - an archive
Ask a question or make a comment
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.
How will Labour stop banks shutting off customers?
Margaret from Cleckheaton:
People where I live face having to travel for miles to visit a bank. Is there anything the new government can do or has said that could help stop banks shutting off customers?
Ian King, Sky News business presenter, says this...
Yes, Labour has committed to addressing this issue.
The banking industry is already rolling out so-called "banking hubs", allowing staff from several banks to share the same space, helping to fill gaps left by branch closures.
But this is a voluntary scheme, funded by the banks, which is why only 50 or so have opened since the beginning of 2022.
Labour wants to change the qualifying criteria so locations and communities without banks can access face-to-face banking services – and also proposes giving Link and the Financial Conduct Authority, one of the UK's main financial regulators, powers to speed up the roll-out by identifying areas that need a banking hub.
It is targeting 350 such sites in the life of this parliament.
Are all prospects of tax cuts out the window?
RobertWhippy:
As we now have a Labour government, is all prospect of tax cuts now out of the window? Should we start saving for potentially higher costs and more tax?
Ian King, Sky News business presenter, says...
Everyone should save, if they can, regardless of whether you think taxes and/or inflation are set to rise. So I'd advise you to do that anyway.
It is hard to see how the new government will be in a position to cut taxes in the short term – it has made clear it sees encouraging growth as its main target and also raising public spending in sectors like education.
Defence is also going to be another key priority following Vladimir Putin's invasion of Ukraine.
So I would not hold your breath for tax cuts any time soon. If the public finances improve, though, then who knows – and especially as we get closer to the next general election.
Sunak made a claim about tax rises under Labour - but where would they come from?
Sceptical:
We are all going to be taxed £2,000 more now over the next few years, according to Mr Sunak. With VAT, income tax and national insurance protected, where are those tax rises coming?
Ian King, Sky News business presenter, says...
The biggest tax we all face in coming years is already known about - Jeremy Hunt's decision to freeze income tax thresholds until 2028 rather than raise them in line with inflation.
That is going to drag millions of people into either paying income tax for the first time and others into paying the 40p and 45p top rate on some of their earnings.
Labour has made clear it is going to stick to this plan – which was introduced to restore the public finances to some semblance of normality following the twin shocks of the pandemic and the energy crisis caused by Russia's invasion of Ukraine.
Will we get Waspi compensation?
Jane (worried):
Is there really going to be a tax on pensions and will Labour commit to compensation for us WASPIs?
Maddy:
When are we going to get Waspi compensation? I hope Labour doesn't forget us
Ian King, Sky News business presenter, says this...
The biggest development during the election campaign on the pension front was a decision by Labour not to reimpose the "lifetime allowance", or LTA, which capped the amount someone could save in their pension without facing a punitive tax rate and which was scrapped by Jeremy Hunt, the former chancellor, amid evidence it was forcing the early retirement of professionals such as doctors, dentists and air traffic controllers.
Rachel Reeves initially promised to restore the LTA but abandoned that plan during the campaign. That is not to say tax changes to pensions may not happen. At present, those saving into pensions receive tax reliefon contributions at their marginal (highest) rate of income tax – 20%, 40% or 45%.
Many Labour MPs feel this means too much relief is going to higher earners and Ms Reeves herself called for a 33% flat rate of tax relief in 2016. Labour has definitively failed to rule out something similar. It would amount to a stealth tax raid on anyone who pays the 40p and 45p rates of tax.
The Labour Party manifesto said nothing about the Waspi campaign and it is unclear what the party's approach will be in government.
My expectation is that, given the sheer cost of compensating the Waspi campaigners and the fact that opinions differ as to whether compensation is actually warranted (the Parliamentary Ombudsman says it is, many other experts disagree), Labour will not adopt a markedly different approach from the outgoing government.
Can we expect imminent changes to capital gains tax?
Morgan:
I am in the process of selling a field with planning permission for some log cabins. I don't have a private pension and this field is my retirement fund. Do you expect an imminent change to capital gains tax?
Ian King, Sky News business presenter, says...
Labour has not categorically ruled out changes to the capital gains tax regime other than with regard to specific measures affecting the private equity industry.
You can read the article I wrote last week on the options the new government has for tweaking CGT here...
Great British Energy seems like a gimmick - how will it help me?
Donavan, Morley:
How exactly is Great British Energy going to cut my bills? Sounds like a gimmick to me
Ian King, Sky News business presenter, says...
That's a very good question.
We really don't have much detail on how this organisation is going to operate – only what its aims will be.
Here's what I wrote about Great British Energy during the election campaign...
Will Starmer protect the pensions triple lock?
Oldsue:
Is the triple lock on pensions still to be protected?
Ian King, Sky News business presenter, says this...
Labour promised during the election campaign to maintain the triple lock - which ensures the state pension rises each year by whichever is the higher of inflation, average earnings, or 2.5%.
It would be a huge surprise were the new government not to stick to that.
What will happen to interest rates?
AoJ65:
Will a Labour government make any difference to the path of interest rates?
A quick answer to this one from our business presenterIan King, who says...
That will depend on the impact its policies have on inflation and will ultimately be a decision for the Bank of England's Monetary Policy Committee.
What is Labour's plan for landlords?
Kent:
As a buy-to-let landlord of two homes, both good condition, EPC rating C on both - what's Labour's plan for landlords and tenants? If it becomes unprofitable to carry on what are my options and where would my very good tenant live?
Ian King, Sky News business presenter, says...
Labour's biggest and most eye-catching policy on housing was the Freedom to Buy scheme – this proposes to make the current mortgage guarantee scheme, which was due to expire in June 2025, permanent.
As far as rented accommodation goes, Labour's main proposal was to scrap section 21 notices, sometimes called "no-fault" evictions, which allow landlords to evict tenants without having to give a reason.
There has been an awful lot of speculation that the capital gains tax regime will be tightened to hurt second homeowners, including buy-to-let landlords, but the truth is we genuinely don't know what Labour plan in this regard.
