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October 1, 2025 13 mins

This week, host Merryn Somerset Webb and senior reporter John Stepek examine the policy signals coming out of the Labour Party conference—and what they could mean for your finances. They break down why a standalone wealth tax looks unlikely, the risks of lowering the VAT threshold for small businesses, and the political realities shaping pension reform. Plus, they consider whether proposals to tackle youth unemployment could shift the debate on work and welfare.

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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News. Welcome to Maren Talks
Your Money, the personal finance edition of Maren Talks Money.
In these weekly episodes, we talk about the best strategies

(00:23):
for making the most of your money. I'm Maren Sunset
Web and with me senior aborter and Money Just Stilted
author John Stape Hi John Hi, mel Okay, So this
week we are talking well about what we often talk
about now, not so much what we will do with
our money, but what other people will do with our money.
We're talking about potential tax rises and the other rumbling
from the Chancellor in the Labor government from Liverpool this

(00:45):
week where they are gathered at their annual conference. Making
you feel positive about the future?

Speaker 2 (00:51):
John, No, No, and there shall we?

Speaker 1 (00:55):
Yeah.

Speaker 2 (00:56):
I think the thing I find most irriitating about this
and I will try and avoid going on the rant.
But really so this is all for people in the
Labor Party. It's not for anyone outside and as such
we have gathered absolutely no useful information whatsoever about what's
going to be in the next budget from this particular weekend,

(01:17):
and there is nowadays and for the most of my career,
but particularly now there's just we too much that's futil
pointless time waste and self aggrandizement in front of internal
audiences and not enough actually thinking about what would make
the country be better. And it ran over and we
can talk about the actual practical realities.

Speaker 1 (01:37):
Although you say there weren't any, I mean there were
a couple of a couple of things have come out, right,
the idea there may be a more of a tax
on gambling, and yeah, we can really disprove that not
that will raise very much money. So it's not much
of a solution to anything. But there's something and there's
a sense that there is not going to be a
standalone wealth tax of that unlined. So you know, but

(01:57):
we know, don't we that the UK already has a
lot of wealth taxes. IHT is a wealth tax, non
index capital games which is how a capital game system
works effrctally, tax on inflation that is a wealth tax.
Stamp duty is wealth tax. Stamp duty on shared trading
is a wealth tax. And that's not even on the wealthy,
it's on everybody. Second highest transaction tax in the world.

(02:20):
We've got a lot of wealth taxes already.

Speaker 2 (02:22):
Yeah, and one thing I will give credit to Rachel
Reeves for it is that she had an interview with
colleague Lezzie Budden yesterday and Rachel Reeves actually specifically said,
we've already got taxes and the wealthy, and she explicitly
mentioned her in tax and capital gains tax. So, I
mean one thing, did.

Speaker 1 (02:38):
She mentioned the extra money you have to pay when
you buy a luxury cars. So many stealth wealth taxes.

Speaker 2 (02:43):
She doesn't want people to remember that one for when
she puts it up. I mean, I do think that's
the problem. It's like they standalone what covers an awful
tax on.

Speaker 1 (02:52):
Business class flights, that's wealth tax.

Speaker 2 (02:53):
I mean they could put extra bands on council tax
is the that would be a wealth tax. Yeah, there's
lots lotsay wealth tax they can do. You don't have
to introduce the standalone one. And she tried. She had
came to be faiture. She said, I think it would
actually possibly be counterproductive.

Speaker 1 (03:09):
Okay, so she's beginning to understand the laugh Aca.

Speaker 2 (03:13):
Yeah. I mean, look, I think to an extent, Rachel
Reeves's heart is in It's not in the right place,
but it's no further away from the right place than
lots of chancellors, but as with all chancellors, she's kind
of roped in by kind of a her own stupid
promises and be what she can get past her own backbenches.

Speaker 1 (03:30):
And past her for t I mean, I suspect the
main reason for not having a wealth tax is because
of the pension problem. So an overul of the UK's well,
they'sh tied up in septs right, and defined contribution pensions.
That's the type of you don't get a set amount
every month, right, And if you were going to have
a wealth tax, if it was going to have any
efficacy and raising money at all, you'd have to address
that vast amount of wealth health inside pensions. But if

(03:51):
you were to suddenly say everyone has to give one
percent of the money inside the defined contribution pension to
the government, you run the problem of defined benefit pensions,
which are mainly public sector and the holders of those
types of pensions do not think of them as having
a capital value. But if you would go after DC
pensions our pensions, you would have to go after dB

(04:14):
as well, and suddenly you would have to alert public
sector pension holders of the actual value of their pensions
and somehow tax arem on it in the same way
you were taxing the rest of us. So that would
open a can of worm so huge, so huge that
I think in the UK were probably relatively safe from
a standalone wealth tax indefinitely, which doesn't necessarily follow they

(04:36):
won't be changes to the taxation around pensions, but just
to say that a wealth tax would be unworkable in
the UK because of this differentiate tax system between effectively
the private and the public sectives.

Speaker 2 (04:47):
Yeah, and you're absolutely You've also exactly on why a
lot of the things that always get mooted a pension
reform before budgets come haven't happened when logically you think
they should have, because this is the exact same reason
that they won't touch tax relief, and why even the
twenty five percent lump sum is. I'm not saying it's safe,

(05:10):
but it's very difficult to touch because that does apply
to the public sector as well, and no government, you know,
Tory or Labor, wants to run into the fact that, well,
then you're just going to get hit with the industrial
action all over the place because people are going to
perceive that as their pensions coming under fire. And where
as you know, the private sector just but you just
have to get on with it. The public sector won't

(05:32):
take that line down, So I mean, that's one reason
why I think a lot of the things that swirl
about about pensions before these things, it would be a
very big step. And the other problem is if you
leave the public sector out, you don't use enough money,
it doesn't make it worth it.

Speaker 1 (05:47):
Well, and you make us a really really cross. It's
totally I mean, we're already furious about these different treatments
of atensions between the public and the private sector, so
you know, we could really we could get really cross.
The other thing that has been mentioned is this idea
that there will be no increase increase in headline rates

(06:08):
of VAT. That's probably goes. The thing that hasn't really
been talked about is the idea that the threshold for
paying VAT if you have a small company you're a
sole trader, which is currently reasonably high. I can't remember
exactly what it did be, around eighty pounds of the moment,

(06:28):
which means that you can, as a trades person or
a small business owner, make a reasonable amount of revenue
before you need to start down the path of admin. Hell,
that is paying VAT, and there has been much talk
about bringing that down to a much lower level, and
the conversation there is about well, if you bring it,
some people like to put it for it to be

(06:48):
raised so that people could have a higher revenue before
they hit VAT. But there is a certain amount of
evidence of what happens is that people simply cap their
income at the VAT limit because it's such held doing VAT.

Speaker 2 (06:59):
I've spoken to people have done that absolutely absolutely bathroom. Yeah,
it's pretty stand on.

Speaker 1 (07:05):
But if you bring the limit right down, then no
one's going to cant there income at fifteen thousand pounds
or twenty thousand pounds or thirty thousand pounds, So you
can change the dynamic there is if you take it off,
people just cant there income at a high level. So
that does seem like, yeah, possibility, don't you think.

Speaker 2 (07:21):
Well, think it's a possibility, and I I think it's
quite probably more than a possibility. But I thankfully have
never been in the possession, but I've needed to regist
of VT so I cannot speak from experience. I mean mean, thankfully,
it'd be marvelous.

Speaker 1 (07:38):
I have a business side any that much money. He's
still on an entrepreneurial still on dynamics exactly.

Speaker 2 (07:44):
But I mean I do think there is an element well,
you know, if people are genuinely capping the growth, they
are either small businesses eighty five thousand so that they
don't have to jump through the VT. Who then I
mean there is definitely an argument for seeing we shouldn't
have this huddle to people working to work harder and
and more and expand their business. Whether the problem is

(08:08):
that if you drop it to thirty, you immediately just
crucify a hold of the businesses that will never go
and to get it bigger. That's the flip side, and
it's a whole.

Speaker 1 (08:15):
Load of you know, almost leveling down, isn't it let
everybody feel the same a pain. And then of course
is potential impact on inflation.

Speaker 2 (08:24):
Yeah, I and that is probably the one thing that
may put her off it. I've seen somebody made that
point the other day, and I think that would be
the biggest huddle to doing that, I think is the
fact that it would probably push up information.

Speaker 1 (08:39):
Because we're all buying a lot of products from well
not all of us, but some of us might be
buying a lot of product from small businesses on EDSY
and this kind of thing which suddenly go okay, So
maybe maybe not there anything else you picked up from
her talking.

Speaker 2 (08:52):
I mean, but actually the main thing I would say
is that so Friday on Fredy, the fiscal watchdog, the
Office for Budget is Onsibility, gives its first sort of
new forecast. One thing that's going to be important there.
Everyone thinks it's going to write down productivity, and that
means that Rachel Reeves will have an even bigger black
hole we fill basically now that would be historic productivity.

(09:16):
So the way I see that gives her or possibly
her sort of semi rivals in number ten, the opportunity
to say the manifesto was based on a false premise,
a false view of the economy. We're going to wrap
it up and actually we are going to you know,
maybe ra's income tax, maybe raise national insurance. I mean,
I think probably the idea about cutting national insurance but

(09:40):
raising income tax by the same amount is something that
they might consider, because that was an interesting proposition by
their favorite think tank, the Resolution Foundation. What that would
do is it means that workers don't pay any more tax, So,
you know, the working people don't pay any more tax
but retired people would. So basically, you kind of what

(10:02):
you lose in the ni you gain and more reason
and income.

Speaker 1 (10:05):
Taxes giving with one hand rather trouble lock taken back
with the other.

Speaker 2 (10:09):
So I could see that happening or something like that.
I mean, I did promise these. If if she's serious
about getting the finances on a sustainable footing without actually
cutting spending or doing anything they boost growth, then taxes
have to go up a fair bit. And the only
way to make taxes got a fair bit is to
do something with the seventy percent of Like those three

(10:31):
taxes raise the vast majority of income in this country
or government tax in this country, So she has to
do something. And to be honest, I mean, I don't
really get why people think the manifesto was such a
you know, every time I mentioned why do you all
trust a manifesto? It's not worth the paper, it's kind
of not printed on And people always come back and say, yeah,
but if they do this, then they'll be open to
accusations of this or that different. I mean, really, what

(10:54):
you are? You are you nuts?

Speaker 1 (10:57):
You know? And at this point it much more unpopular.
They get isn't really At the top.

Speaker 2 (11:01):
Of the Less and the manifest it was like a
deal with Satan. It's like, it's going to stick to
the letter to the law, but you're still going to
get your soul at the end. You know, it's the
same in this. It's like the government will stick to
the letter of the law, but they're going to get
your money in the end, so it's different. You know.

Speaker 1 (11:17):
What do you think about her about the idea that
she's going to ambolish youth unemployment?

Speaker 2 (11:21):
Oh? I thought it was a lovely idea. I mean,
there are so many ways you could have bolish youth on.

Speaker 1 (11:25):
The abolishing boom and bus, doesn't it. Yeah?

Speaker 2 (11:28):
Yeah, yes, and that one were Actually the timing of
that one was interesting. I mean, I hope the time
in the this one doesn't indicate anything but weird youth
on employment is actually going to go, but I think
it quite possibly could.

Speaker 1 (11:41):
Yeah, but I mean it does We've talked about this before,
but it slightly comes under work for welfare, doesn't it,
Which makes some sense for young unemployed people. They need experience,
they need to be in the workplace if they're going
to be paid benefits. It makes sense for them to
give something back in exchange for it. Not everyone agree
with this, but it does sort of make sense. The problem,

(12:04):
of course, is just that the rising and I has
killed so many of the type of hospitality jobs that
the young would normally get.

Speaker 2 (12:11):
I mean, I guess, well, I guess is the problem.
And it's kind of if that is what she's suggesting,
and it's a good idea, we'd love to see what
the rest they kind of leave up, faithful think of
the idea of forcing people to do jobs in order
to get their benefits, because that doesn't sound like they
kind of hang that the left are traditionally fond of

(12:32):
with us. But she's suggested then, yeah, I mean, it's been.

Speaker 1 (12:36):
To find out whether she means you have to go
and effectively work fee for private companies or come help
us clean up the streets. And it'll be interesting to
see what she has in mind that.

Speaker 2 (12:45):
Right, Yeah, I mean, it could be great.

Speaker 1 (12:50):
It could be great.

Speaker 2 (12:51):
Do you know.

Speaker 1 (12:51):
I'm just going to end it there, because I don't
think he said about anything else in this conversation today
that it could be great. Everything else is awful. But
you know, kids working for unemployment benefit that says John.

Speaker 2 (13:02):
Could be great expirational as rational.

Speaker 1 (13:10):
Thanks for listening to this week's Mary and Talk to
your Money. If you like our show, rate review, and
subscribe wherever you listen to your podcast. Also be short
follow me in John on ex or Twitter at marinasw
and John Underscore step Back. This episode was produced by
Samasadi Productions FORED and sound designed by Blake Maple's questions
and comments on this show and all our shows are
always welcome. Our show email is Marin Money at Bloomberg

(13:31):
dot net
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Merryn Somerset Webb

Merryn Somerset Webb

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