Can someone explain to me why/how the Labour government has directly made them worse off in the last 15 months?

[MotherofAdults]

Can someone explain to me why/how the Labour government has directly made them worse off in the last 15 months? I see this claim a lot on these pages, but I don't understand why. Sorry if I sound stupid, I am just trying to get clear.

I totally understand that the cost of living keeps going up - that inflation keeps rising (3.5-3.8%?) and that mortgage interest remains relatively high, but I don't understand why or how this is the fault of the current government? What have/haven't they done? Are people angry that they haven't curbed inflation? What should they be doing?

If we could avoid mentioning the things that didn't actually happen (eg the Winter Fuel Allowence cuts) and speculation about what the next budget will do (doubling of council tax, rise in minimum wage etc), that would be really helpful. I am looking for actual changes made by this that have directly affected your financial situation since Labour got it.

The problem I suspect, is that many (most) of those families won't hold 2% of their portfolio in cash, and certainly not every year. For many almost all of the wealth and gain in wealth, will come from increased asset values - be that share prices, property prices or businesses they own.

So, to pay the tax they'll need to either extract more tax cash from the businesses (stifling growth) put up rent and / or sell assets. But, the sale of assets is already taxed via CGT, and for privately owned business selling fractions of ownership is not really viable.

I agree it would be nice if there was an easy way of extracting this money from them, I think it's safe to say if it was easy it would already have been done (ignoring the capital flight risk). The bulk of their wealth is already taxed - but on disposal / death not on a year by year basis. Income is already taxed annually. And, if assets are held in trust the capital value is taxed very 10 years anyway, with income taxed at 45% in the year earned

Top five:

Gopi Hinduja
Gopi Hinduja and his family top the list with assets worth a staggering £37.2bn. The UK's richest richest family made its fortune from the Mumbai-based conglomerate Hinduja Group, which spans business sectors including banking and finance, media and entertainment, and energy and has about 200,000 staff globally.
Sir Leonard Blavatnik
In second place is Ukrainian-born philanthropist Sir Leonard Blavatnik, who made his fortune in Russia. He is worth £29.25bn.
David and Simon Reuben and family
These billionaire brothers amassed their huge wealth through technology and property businesses. They were raised in the UK after being born in Mumbai.
Sir Jim Ratcliffe
Sir Jim, part-owner of Manchester United, founded global chemicals company Ineos in 1997. He has dropped from second to fourth in the list after his wealth fell by more than £6bn in 2024, but he is still worth a staggering £23.52bn.
Sir James Dyson and family
The English inventor, known for creating Dyson vacuum cleaners, is worth £20.8bn.

It is worth noting how international they are. Dyson moved its HQ to Singapore in 2019.

Labour’s version of ‘tax the rich’ rapidly and farcically transverses from a ridiculous private school VAT policy to let’s hit anyone not a worker which happens to be over £45k in a rapidly short amount of time.

If people want to sell in riches in other ways then ok although I’d shift eyes on to AI profits and a way to secure taxes on that.

I’ve just worked out a 2p increase on the 20% rate and 5p on the 40% would decrease my take home pay by £185 per MONTH. I just don’t have that spare.

As a nanny with over 20 years experience i have been searching for a job for ages. People don't want kids as they can't afford them ,can't afford to employ nannies, so i will be on universal credit that the tax payers will have to pay for. Its a vicious circle.
I know 5 nannies who were made redundant in the last month as their employers either lost jobs themselves or put kids into nursery as its cheaper.

I agree.

It really isn't a simple issue.

I'm also not as convinced as some others about the risk of capital flight not being real. I already know of several families - admittedly not billionaires, far from it, but wealthy enough to have options - who have left. I cannot understand that that risk does not apply a fortiori to billionaires, so I think care needs to be taken in how that tiny, tiny percentage of individuals is tapped. Private wealth does bring with it benefits to societies in other ways - and it was interesting that a pp mentioned about Victorian philanthropy - though I think an industrial society in which slums were such a feature is never going to be a model to aspire to, but aspects of it are interesting.

At the level of wealthy professionals, salaries are, for the most part, tied to risk, responsibility and effort. We need people incentivised to do those jobs, and, as we take away those incentives, we jeopardise that. They don't even need to leave the country to decide it makes more sense to work in a nice gift shop or bookshop rather than perform surgery that carries stress, long hours, expensive training and a risk of things going wrong.

Whatever the answer is, what saddens me at the moment is the futile tossing of acrimony over garden fences because the neighbour drives a better car or educates their child more expensively. I don't think it is in focusing on making each other worse off that is where the battle will be won. Those strategies are short-termist. We need to work to build strength, not stick our foot out to trip others.

And you won't be alone. People can't just be squeezed harder and harder.

This is exactly what I mean by the longer term outplay of an attack on affluence.

Yes I agree there. It’s not a good or useful trait.

We don't really have to worry about a load of multi millionaires leaving as some won't be paying lots of tax and some are moving here eg American celebs.

What we should be concerned about is young, talented people leaving because they cannot earn a decent wage or a wage that affords them a decent life. That will exacerbate our demographic issues.

I think on the whole that is my biggest concern too.

It's the people who are paying tax on large salaries, spending and bringing a skill base but who perfectly happily could take all that elsewhere that are the issue.

Exactly all the nannies, cleaners etc will loose jobs and claim benefits and the debt will be even higher then before . Its like the government has no common sense. They are making it more difficult for people with a bit more money (not super rich) to employ someone , they will mske the welfare bill even higher.

Where do you think they will work? Dyson (5th richest man) employs 3,500 people in the uk but is planning to cut 1,000 of them.

The Victorians had that cracked, up to a point. Look at how many of the ultra wealthy of that time had an element of philanthropy to their spending, recognising that their wealth could be put to good use.

That's an excellent overlooked point @Tryingtokeepgoing. Yes it wasn't altruistic but the employer recognised the value of their employees, keeping them happy. Now they are disposable as you say.

It's the people who are paying tax on large salaries, spending and bringing a skill base but who perfectly happily could take all that elsewhere that are the issue.

It's not even just the ones on the high salaries now, it's the ones starting out & who will be on the high salaries tmw who see little point in trying to build a life here.

@RoostingHens where do I think who will work?

The young talented people I mentioned?

I’m not sure about the first line, it depends what they do and if they have companies etc

Exactly. But that all requires a bit of long-term thought which seems unfashionable just now.

ETA oops started typing over a response to a different poster so it didn't make sense before!

Sorry misread about the young people. But the lack of concern over very wealthy leaving ignores the fact that they are often major employers.

No I'm not sure |i totally agree with that first line either.

But I certainly do agree with @cottonwoolie that the second paragraph is an overlooked and significant concern.

Gopi Hinduja
Gopi Hinduja and his family top the list with assets worth a staggering £37.2bn. The UK's richest richest family made its fortune from the Mumbai-based conglomerate Hinduja Group, which spans business sectors including banking and finance, media and entertainment, and energy and has about 200,000 staff globally.
Sir Leonard Blavatnik
In second place is Ukrainian-born philanthropist Sir Leonard Blavatnik, who made his fortune in Russia. He is worth £29.25bn.

@RoostingHens - the first is surely Overseas Citizen of India as well and the second most have loyalty to Ukraine as well?

I mean who are we to think that we should take taxes from someone Indian or Ukrainian primarily when both those countries would need the money more? I think that is real colonialism and amoral.

But the lack of concern over very wealthy leaving ignores the fact that they are often major employers.

You don't have to be based in the UK to employ UK workers. And I think people of that ilk look for opportunity so if one leaves another looks to see what money can be made.

Multi millionaires/billionaires are mobile and have always moved around. Even if the UK reversed its non dom policy etc it doesn't mean you can stop some of the very wealthy leaving, they will go where it benefits them. Eg they are leaving other countries too and Dubai is a popular destination, we can't compete with Dubai.

The number of millionaires has fallen since 2014, Brexit obviously didn't help. However we are still a stable country with a well established prime property market which will always attract the rich. We still have plenty of millionaires & billionaires.

The brain drain of the young is far more concerning to me.

Exactly. But that all requires a bit of long-term thought which seems unfashionable just now.

I find this so frustrating, the young are the workers of tmw but we haven't invested in them for years.

It is AI that is coming to take the entry level jobs. If anyone else watched Dispatches on this you'll know what a threat it is across the board and how quickly it is being adopted by big business to save money. Money that is not then going into our economy.