“The problem with socialism is that you eventually run out of other people’s money” – Margaret Thatcher
We have yet another budget looming over us, scheduled for 28th October, unless local boy Andy calls a General Election beforehand. So with that in mind I want to announce my undying dedication to capitalism and my complete opposition to the theory of socialism.
The Early Years
I have worked hard since I was 15 to better my lot. I’ve collected driving range golf balls, worked weekend shifts at a petrol station and out of term jobs through 3 years of university in a record store. I’ve even dug ponds. I am authentic working class, with a blue collar, shop-steward father and a shorthand typist mother. The families wealth today has been created by turning up everyday for almost 50 years so far, increasing my business and invest knowledge and taking risks. I’ve paid higher rates of tax along the way and have never been in a position where income tax was avoidable by receiving undeclared cash. UK financial services regulations ensure I cannot handle cash.
Creeping Unfairness
I continue to pay my UK dues. I’ve contributed to HMRC more than most. I’ve been proud to do so. I know many of our clients have similar back stories. However the UK is being turned into a country where working hard is becoming a mugs game. Those who have saved hard and retired with independent means are progressively being unfairly targeted. I wrote about the announced changes to Individual Savings Accounts in my last blog.
Capitalism in the UK is under threat.
What Capitalism Really Is
Capitalism is simple:
- You own your labour, your property, and your future.
- You’re rewarded for creating value — not for obeying the government.
It’s the system that:
- Turned Western economies into the world’s largest.
- Has been copied successfully by many nations on Earth.
- Even the Peoples Republic of China operates on a system of Command Capitalism.
- Created more innovation than any non-capitalist civilisation in history.
- Lifted billions out of poverty globally.
Under capitalism:
- The government protects your right to earn.
- Markets reward skill, risk, and competition.
- Your success or failure belongs to you, not the state.
Capitalism isn’t perfect — no system is. But it’s the only one that gives people freedom and the chance to improve their lives through effort.
What Socialism Really Means
Socialism isn’t about “sharing.” It’s about control. The government — not the individual — decides:
- What’s “fair”
- Who gets what
- And how much you’re allowed to keep.
It replaces voluntary exchange with forced redistribution. Once the state takes control of production, you lose your leverage, your incentive, and your voice. Every socialist society eventually hits the same wall: Prices rise, Quality falls and Freedom disappears.
Argentina, Ecaudor, Bolivia, Chile, Venezuela, Cuba, and the Soviet Union didn’t fail because of “poor leadership.” They failed because socialism destroys the engine that drives progress — human incentive.
The Modern “Soft” Version of Socialism
Today’s socialism hides behind softer language: “Equality.” “Social justice.” “Fair share.” It’s marketed as moral — but it’s still the same trade. You give up control in exchange for promises that are never delivered.
The irony?
Every “free” thing the government gives you costs you something bigger — your independence. That’s why capitalism doesn’t just build economies. It builds character.
The Big Picture
Socialism sounds compassionate — until it’s enforced. Capitalism sounds harsh — until you realise it’s the only system that lets the poor become rich, and the powerless become powerful. The West isn’t perfect, but it’s proof that freedom beats fairness when fairness means force.
“Capitalism is not a perfect system. It may be better than all the other systems, but it’s not a perfect system.” – Warren Buffett.
The Root Difference — Control vs. Consent
At its core, socialism operates on control — assuming the state knows better than you. Capitalism operates on consent — trusting free people to make their own choices…
The Social Contract
Civilised societies operate where a social contract is maintained. There should be little need for enforcement to ensure compliance, however there are always bad actors, fraudsters and free-riders that need rooting out. The majority of individuals want law and order, justice, fairness and minimal interference from the state and are happy to be taxed to pay for it all. We all want to support those fellow citizens who cannot support themselves through old age, illness, injury and perhaps bad fortune. That is the definition of a civil society. However we shouldn’t be targeted to bear the responsibility of the upkeep of the lazy, the feckless and those who have come to the UK purely to benefit from our health services, our education system and our lucrative social security hand-outs.
When I needed the NHS 13 years ago they came to my aid. Fair enough, I contributed and continue to do so. Since then I also regularly give blood. I believe I’m repaying my debt.
However, increasingly I’m feeling like a mug. I’m tired of hearing how broad my shoulders are, how much more of the country’s burden I have to underwrite. I know I’m not alone. Trust is fragile and once lost it is almost impossible to recover.
Mis-selling Scandal
For the last forty years I’ve encouraged individuals to save for their futures. Utilising any tax concessions available, which has helped to ensure many individuals are now not completely reliant on the state. This both helps the investor and relieves the state of additional burden. It should be a win-win.
Now what we see is the progressive erosion and the reneging on previous long-standing financial product promises. The endowment mis-selling of the 80’s, PPI in the early part of this century and probably the current car finance scandal, all seem like side hustles compared to the grand larceny perpetrated by this socialist government.
We were encouraged to go without in the past, to save, on the understanding that those savings would improve our futures. This fantasy was perpetuated by denying the effects of the time cost of money. Every fiver set aside for the future, would have bought more back when it was earned, than when it is finally spent. ever-increasing, never-decreasing inflation reduces the true value of currency over time. Fortunately prudent long-term investment management has beaten the long-term rise in the cost of living.
However the promises of previously tax-free investment plan benefits continue to be broken. I understand economic circumstances do change, but sensible investors are being preyed upon, by a parasite that hangs on to an unhappy host. This administration needs to figure out that without the host, it too will die.
Pension Savings
For decades there was never a question that our retirement savings would not be for our benefit, for the benefit of our widows and widowers, and if any amount remained – for our children and wider family. That sacred promise will been reneged upon from April 2027. In some circumstances £100 left in a pension account after the deaths of a couple, will be taxed at 64%! Passing just £36 of the original £100 to our kids. Double taxation (IHT and income tax on the same investment). No pension saver has ever received 64% tax relief when they contributed to a pension contract, so it’s no longer possible to say there is “tax relief” on pension contributions today. This will surely backfire as it will be a disincentive to save today, for an independent retirement tomorrow. Expect the burden on the state from an aging demographic to increase needlessly in the future.
The UK is in a hole
It’s a black hole of successive government mismanagement. No question of bringing excessive expenditure and administrative waste under control, simply continue to squeeze the tax-payer more to try to balance the books. No political party alone is to blame. If I had to lay the blame anywhere it would be those who have undermined Capitalism and pushed increasing Socialism since the days of Tony Blair. Those permanent civil servants behind the scenes who always ensure their existence is paid for by the productive parts of society. They have feathered their own nests behind the illusion of looking after the less fortunate in society. Their safe retirement incomes remain index-linked and unaffected.
After 40 years the fight continues to ensure our collective savings out-pace inflation and if there is a way to minimise taxation through legitimate means, rest assured I will be exploring it. If the UK becomes un-investable due to further mis-management we are free to continue to invest in those countries that continue to value private investors.
The Small Print
It’s important to know that:
- The Financial Conduct Authority does not regulate taxation advice. Tax treatment depends on individual circumstances and may be subject to change in the future.
- The value of investments can fall as well as rise.
Howard, you are whistling in the wind I am afraid, we are a country of envy and thieves.
The thieves are the government and the lazy people of our country and people from other countries who are abusing our good nature and fairness.
I too left school at 15 and apart from 6 weeks due to redundancy I worked continuously until I finally retired after selling our business age 70.
I started and built a small business employing people for over 20 years and never received nor asked for benefits. Now after all that, I am the problem according to this country because I worked hard paid my taxes and am financially secure.
So they are now hellbent on stopping my wife and me from passing too much of it to our children and grand children so that they can give it to those who I have named above.
I and we deserve much better, shame on them.
Broadly agree Howard. For me the common thread running through much of this is the social contract.
Most people accept paying tax to fund decent public services, support those genuinely unable to support themselves and maintain a civil society. But that contract depends on reciprocity, accountability and a sense that the rules apply fairly to everyone.
That means maintaining incentives for people to work, save and provide independently for their future, having an immigration system that serves the country’s interests, and having a political class whose first responsibility is to represent the people rather than pursue position and personal advancement.
There is a personal dimension to this for me too. My 19-year-old son is emigrating to Australia with his girlfriend and her family. Australia is hardly problem-free, but it is difficult not to reflect on what it says about the UK when some of our young people look at their prospects and conclude that greater opportunity may lie on the other side of the world.
I also think we need to ask much harder questions and take action about how we steward the assets the country already possesses. The contrast with Norway and the North Sea is difficult to ignore. We cannot turn the clock back, but the principle still matters: properly managed energy resources, infrastructure and national assets can strengthen energy security, investment and the public finances.
Perhaps one of the questions we should be asking is not simply how much more government can tax, but how much better it can manage the assets, opportunities and people the country already has.
And if increasing numbers of people conclude that the established parties no longer represent them, a political vacuum is created. Reform’s emergence is at the very least evidence that such a vacuum exists.
Where that eventually leads is perhaps the more interesting question.