It’s reached the stage where I’m frightened to switch on the TV.

Which previously undiscovered Self Destruct button have the Tories managed to push today?

I understand the political pressure to let Kwarteng go. But replacing him with Jeremy Hunt? The only bigger surprise would have been a return to Number 11 for Dishy Rishi.

Were Truss & Kwarteng Simply Unlucky?

The reason this is so upsetting is that I fundamentally agree with the Truss/Kwarteng growth agenda. They must own the errors of poor presentation and the lack of air cover from the OBR, but I also think they were mightily unlucky. It was their great misfortune that the long dormant bond vigilantes chose this as the moment to strike back.

It could have happened last year with Biden’s unfunded $1.9 trillion package. It could have been the UK’s furlough scheme or loosely managed bounce back loans, or the EU’s latest bizarre mechanism to spread economic pain more evenly between northern and southern Europe. But no, the straw that broke the camel’s back was the decision by our new government to go radical.

Opposition was immediate from the media, the markets and the mainstream establishment. The latter includes many MPs who are nominally in the same party as the government but don’t seem to have received that memo. Even some ministers struggled with the concept of collective responsibility, leaving an open goal that even the hapless Keir Starmer couldn’t miss. Labour’s completely unrepresentative lead in the polls is simply a national expression of exasperation at yet another incompetent, disaster prone Conservative government.

Have You Considered What Life Under Labour Might Be Like?

It’s easy to conclude that they simply don’t deserve the privilege of running the country. Until, that is, you pause to reflect on the alternative. More of that in a moment. My own depressing conclusion is that an early general election is now inevitable. And that the outcome will not be hard for the pollsters to predict.

So we need to hold our noses and try to predict what Life Under Labour will look like. They will come to power on a backlash from what will be portrayed as the greed and uncaring nature of free markets, the growing wealth inequality gap and those nasty Tories that were going to make cuts in benefit payments.

What kind of measures might they enact?

If the 2019 manifesto serves as our guide we should expect:

• More state control of every aspect of our lives (Gen Z seem to want this)
• Big pay rises in the public sector, especially for the nurses planning strike action
• Big increase in the NHS budget with no attempt to improve efficiency
• The legal right to work from home forever if you want to
• Increased benefits for the 9 million who are ‘economically inactive’
• Massive subsidies for anything related to green energy
• A nationwide council house building scheme
• A new vote on Brexit in the hope of getting the ‘correct’ answer next time

How will they fund these measures?

• Windfall taxes on the big energy companies
• Introducing a new 60% income tax band for high earners, perhaps a return of the Investment Income Surcharge that the Beatles complained about in the 1960s.
• Removal of higher rate tax relief on pension contributions
• New, increased Inheritance Tax bands for larger estates
• Increased Capital Gains Tax rates in line with the new higher income tax rates
• Increased corporation tax and dividend tax rates
• Rent controls on private landlords
• Capital controls on moving money out of the country
• A national lockdown if 3 people sneeze in the same city centre

OK, the last one may be facetious but Labour’s attitude during the pandemic suggests that they draw their inspiration from that other well-known socialist, President Xi of China. At least he doesn’t have to worry about pesky elections any more.  How is the state supposed to control everything if people are allowed to vote it out of office every five years or so? By not bothering to name a successor in 2017 and replacing any opposition at the top of the party he now has power for life. Maybe Sir Keir will try a similar plan?

You Need To Hear This Message

The message you need to take on board loud and clear is that, if you are a high earner and/or have accumulated some assets, you are prime Target Number One. You need to get your retaliation in first before an election and the ‘emergency’ legislation that would be enacted shortly afterwards.

The kind of questions you should be asking include the following:

• Given the likely political direction (John Major’s similar economic catastrophe kept Labour in power for 13 years) is the UK still the right place for you to live and be tax resident?
• What assets could quickly and easily be moved to another jurisdiction?
• Do you own a location-independent business that you could run from anywhere?
• Should you be selling marginally unprofitable Buy-To-Let properties ahead of a possible property downturn and further restrictions on landlords?
• Do you have an overseas bank account where funds could be moved ahead of capital controls?
• Is this the time to pass assets on to the next generation ahead of IHT increases?
• Are there more tax efficient structures in which my assets can be held?

Some of these questions you can answer yourself, while others will require you to pay fees to experts. I am always surprised by the fee resistance of many wealthy people. My own experience is that such experts pay for themselves many times over. The trick is finding the right ones.

We are expanding our own panel of experts so that you have someone to turn to for this level of advice. The latest addition to the Beaufort Coterie is property tax expert Sam Lockwood. If you need help with incorporating your property portfolio or optimising it for inheritance purposes, drop me a line and I’ll introduce you. He can also help with niche situations like SDLT on multiple dwellings, property trading relief and misclassifications of residential property.

Sitting back and doing nothing as events unfold could prove very costly indeed. Relying on politicians to devise and implement long term strategies may not be too smart. Just ask any of the 18 Housing Ministers we’ve churned through in 20 years or the four chancellors in 2022.

We must take control of our own future and give ourselves and our families the choices that our hard work and prudent saving and investing has earned. Even if it involves painful decisions like leaving the country.

Please let me know when it’s safe to watch the telly again.

Until next time.