John Healey is being urged to reverse former chancellor Rachel Reeves's costliest errors ahead of his Budget on October 28, with the £25billion tax on employing people singled out as her worst mistake.
Writing for the Daily Express, Harvey Jones argues that while Reeves's decision to scrap the winter fuel payment for 10million pensioners crushed Labour's popularity and forced a humiliating U-turn, the bigger blunder was the National Insurance hike on employers. He says the tax burden fell on lower paid and younger workers, and youth unemployment has since rocketed by around 120,000 and is still rising.
A catalogue of costly howlers
Other contenders include Reeves's campaign of doom before her maiden Budget and the chaos surrounding her second, when she floated a controversial 2p income tax rise before another U-turn, amid a mass of leaks. Jones says he would love to see Healey reverse her biggest errors in his Budget.
He suggests Healey could start by scrapping the inheritance tax on unused pension pots, which comes into force next April. Jones warns this will deter pension saving, as families could lose up to two thirds to HMRC if policyholders die at the wrong time, and pile administrative burdens on grieving families who must sort out the tax due within six months.
Family businesses and farms under threat
Healey should also clear up the Cash ISA rule fiddle and scrap the inheritance tax raid on family businesses, Jones writes. He reports heart-rending stories of people who may have to sell businesses built over generations to pay inheritance tax on wealth tied up in the company, rather than cash in bank accounts.
Jones notes Reeves was voted the worst of the last five chancellors in a recent poll, and criticises her inheritance tax raid on family farms, which caused fury across rural communities. He argues family farms often have to pass to the next generation because they are the only people who understand them well enough to keep them going.
Fiscal headroom pressure
Jones says he is crossing his fingers after reports that Healey wants to scrap the family farms raid altogether, but acknowledges the chancellor is in a total mess, with fiscal headroom disappearing by the day. There is even talk he will have to hike taxes by £35billion just to balance the books.
Jones appeals to the Treasury to do the right thing by farmers, saying it would give something to cheer amid the misery to come and reverse one of Reeves's biggest blunders. However, he concludes that thanks to the mess she left, her policy may yet win through, and farmers will be the losers.
