Chamber and committees

Thrusting economists.

That is very helpful. You have touched on wealth taxes, which I wanted to ask about next. We will be taking evidence in a round-table meeting straight after this session, and we will be speaking to the witnesses about that issue, because a number of them have suggested that, over a relatively short time, wealth taxes could raise quite substantial sums of money, if not in the current financial year then in financial year 2025-26. What is your view on that?

I agree, but no one tells us what we should be disinvesting from—that is the problem.

If we had more time, I would talk to you about the taxation of occupational pensions.

Very quickly.

I thank all our guests. I will allow them to leave and we will then have a short five-minute private session. We will put most of our private work programme to one side and discuss two issues very quickly, seeing as time is marching on.

Yes—they start to lose it at £50,000.

That first figure is assuming no behavioural impact, is it?

Yes, because of the message that is being sent.

In your submission, you have said:

“tax increases are likely to be unpopular and possibly counter productive and ... funding reductions to other spending priorities are likely to be valued more by the electorate than the gains resulting from the introduction of the new policy—this is so-called ‘loss aversion’”.

I find that quite interesting. I have talked about that a number of times in committee with regard to council tax reform: the people who gain will just shrug their shoulders, but the people who lose will be less than chuffed. In fact, the consultation on council tax closes tomorrow, and no one has contacted me to say, “This is great”, but I have had plenty of people tell me that they are not too chuffed about it. Perhaps you can say something about that, Professor Bell, and then I will let João Sousa in.

Thanks.

Professor Heald, you have said:

“budget documentation should set out clearly the additional cost of ‘above-parity’ expenditure and the reduced costs from ‘below-parity’ expenditure.”

Would you like to touch on that?