As the interminable Budget wait goes on, so does the trawl through the Chancellor’s bin bags. I refer to the old tabloid method of digging in celebrities’ dustbins for evidence of depravity or scandal; in Rachel Reeves’s case, that would mean piecing together shredded Treasury analyses on all the various tax wheezes floated since July. One curry-smeared paper no doubt addresses the pros and cons of an inheritance raid on ‘aristocrats and landowners’; beneath the Red Bull cans and pizza crusts, might there be another headed ‘Clawbacks on Enterprise Investment Scheme’?
Not that there have been substantive rumours, mind you. But that’s rather the point: having had so many draft Budget items shot to pieces, she must be desperate to shield some last surprises. EIS offers reliefs from income, capital gains and inheritance taxes for investors in small private companies. Since launch in 1994, it has channelled £32 billion into a sector otherwise perpetually starved of capital. Many start-up entrepreneurs consider it vital for survival and growth.
But it’s also notoriously gamed by tax advisers whose clients grab the breaks by investing in companies effectively designed for that purpose. It costs the Exchequer £1 billion a year – but would a tighter scheme produce better value for the taxpayer? An entrepreneur I know asked Rachel Reeves, shortly before the election, whether she had EIS in her sights. Emphatically not, she replied: too important for early-stage businesses that are such an asset to the UK economy and she wasn’t going anywhere near it. If she does, we’ll know she’s really had to scrape the bottom of the bin.
Shameful and shameless
‘How was it possible for [Mike] to have been so betrayed by the past government? Why did it allow such a biased, asymmetrical extradition agreement between the UK and the US to be implemented? This was wrong, and in my view it was disgraceful, both shameful and shameless.’
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