Cover of MoneyWeek magazine issue no 682

How healthy are the banks?

14 March 2014 / Issue 682

James Ferguson on the big four

PLUS:

  • How George could ruin Ed’s day
  • Has Russian money corrupted London?
  • The mystery behind Bitcoin’s creator deepens

Excerpt

Merryn Somerset WebbEDITOR'S LETTER

Merryn Somerset Webb  

The threats to the rich

If the economic recovery in the UK is beginning to make you feel a little bit more confident in your financial future, you are clearly not concentrating. That’s the message from this week’s news.

On Monday we heard from the Labour party about their plans to have a go at the personal finances of anyone they consider to be even vaguely rich. The top rate of tax is to go back to 52% (including the National Insurance payments that insure us against absolutely nothing). Pension relief is to be cut to 20p in the pound for everyone. There is to be a new bonus tax (a bit like the last “one off” bonus tax) and there will, of course, be a mansion tax which will take in every three-bedroom cottage in Fulham as a matter of course. You can say that each one of these is no big deal. Pensions are over-subsidised; bonuses are too high (and banks are state-supported anyway); and the mansion tax might at least cap house prices at the top end.

But together they are a big deal. They won’t raise enough money to make the slightest difference to anything, but they do add complication, confusion and an extra element of ‘hate the rich’ division to our tax system. We don’t really need any of those things.

However, even more of a threat to the wealth of some MoneyWeek readers than the actions of any elected government will soon be those of our non-elected leaders – the Monetary Policy Committee.

• Read the full editor’s letter here: The threats to the rich.