So - what do we think? Does Hunt's Statement change anything? Is the Tory goose so truly cooked, nothing can save it? Has he succeeded in laying a trap for Labour? Is he scorching the earth ahead of 2025, Gordon-Brown style?
Answers on a postcard ...
ND
37 comments:
Is there anything that actually makes a significant difference to people's wallet?
The reduction in NI from 12% to 10% gives me about £50 per month - I'm sure there is something in the detail that takes more than that back each month.
“you wait 13 years for a Tory tax cut and then none come along at once”. Good line (can’t remember whose)
Dull dog makes dull dog's breakfast.
Sunak is as big a liar as Boris but without the jokes or personality.
Seems he is now fed up with the gig and has enough time under his belt to embellish his CV and impress the in-laws. Spring GE is almost nailed on save for some events linked to his his 'legacy'. Seems the last straw for him was having to give up the helicopter.
'Winter (aka Starmer) is coming' as they say.
No, the question is a May election defeat or an October election defeat.
The tricky problem is growth, there isn't any and what little there is everyone else in the world wants it. One big possibility is Life Sciences - medicines and medic kit. But medicines are for ill people and ill people are poor people or governments or insurance companies.
Or there is 'Green'. But Green mostly does not really work or is expensive and has to be subsidised which is not nice for Chancellors.
Or there is 'Advanced Manufacture'. But Minford told us long ago we were finished with manufacturing and the Tories believed it and went for offshoring. That wheel is turning but not just for the UK but for everyone else but is thwarted by high houseing costs.
Or there is AI. Strictly for the big boys and there is a nasty whiff of hype about it and a suspicion it will mean fewer decent jobs and not prove to be intelligent at all.
Then on the horizon is Mr Trump who may dump all this Green and go for good old oil & gas. Not a bad plan if you have got plenty and live on high ground and rich enough to ignore the likely problems.
So all in all no one knows where growth is coming from. Election 2024 could be a good one to lose.
"but is thwarted by high housing costs"
We have imported 7 million people since 2000. And apparently it's not enough. Perhaps it'll never be enough.
There's your high housing costs.
We should ideally be trying to halve our population rather than doubling it, as we can only feed 25-30 million. That would be the sustainable thing to do. Decades back it could be justified "because we export stuff to pay for the food" - but our balance of payments is very very negative.
I don't understand Hunt's description of Full Expensing as a tax cut. The depreciation system just spread the deductible over 7(?) years, surely. I do understand the MSM swallowing the fib.
@Jim - the UK's problem with growth has been the Tories love-in with big business, and generally not giving a toss about SMEs.
SMEs generally don't outsource, generally can't shop their tax burdens globally around the world and generally don't knock a hole in the nations finances when they go bump.
They also don't provide fantastic press coverage, which to a media obsessed political class is a bit more important to them personally. Can't get those cushy post-political shindigs if no one knows who you are.
That isn't to say we should beat up big business, but perhaps a rather more sober assessment on the value of SMEs wouldn't go amiss.
There are an awful lot issues that have been ignored for too long starting to become unavoidable, and whilst all parties have enjoyed a bit of can kicking, the Tories have enjoyed it the most, so it's a little difficult to have any sympathy.
Where has "long-term" Sunak been most of his career? On a long term break?
I'm awaiting the small print of the Statement, bound to be a few things to crop up.
The tackling of the millions on long term sick is a good start, although if they don't deal with mental health issues too it'll do little but feed into the Cruel Tory theme.
Curious to see what Labour does with it.
"Blogger Caeser Hēméra said...
@Jim - the UK's problem with growth has been the Tories love-in with big business, and generally not giving a toss about SMEs.
SMEs generally don't outsource, generally can't shop their tax burdens globally around the world and generally don't knock a hole in the nations finances when they go bump."
Indeed - and it was SMEs that lockdown hit hardest. Even more so in the USA. But in rural areas, such as where we are in Somerset, it's almost all SMEs, with very little "big" business. So rural areas were hammered far worse by lockdown.
Which as we know for two reasons was an act of complete stupidity.
1. Places that did not lockdown fared better than those that did.
2. No RSV has EVER been stopped in its tracks, even by human hubris running at an all time high (as we are now witnessing this in the clinically insane NetZero). RSVs WILL complete their course regardless, as NZ and many other places found, and vaccinating during a pandemic was already known NOT to be a good idea.
Think 'triple lock' will have to go. Shortage of skills is driving up wages which will feed into pension awards. Totally underserved by pensioners who are riding on the backs of the young.
They suck up all the NHS resources; buy up the extra housing for holidays or investment; then complain if they get taxed on it. They are a greater threat to the country than politicians.
Taking it from NI and not Income Tax is a move in the right direction.
I suspect lowering corporation tax would lead to greater inward investment than changing the rules on capital right offs.
They don't get that improving productivity involves entrepreneurship and personal risk. The tax burden is so high that it's preventing people taking such a risk.
Manifesto should be:
- Get rid of stamp duty and compensate with increased council tax.
- Abolish IR35.
- Land with planning approval to be charged council tax three years after approval.
- Gimmick - companies can get low friction/ low cost visas provided they build two houses for every one person in the locality that the person will be working in.
- Controversial - massively increase council tax and provide occupancy rebates in areas of high housing demand (max rebate limited to occupancy guidance by councils, square footage per person).
Al
Triple lock is going nowhere, pensioners are about the only guaranteed source of votes they've got right now.
We're pushing towards Scandinavian tax rates at the same time as pushing towards Somalian levels of service, and as much as they try to pretend it was another Tory party that has done bugger all about that happening, no one is buying it. So keep the pensioners happy to ensure there is at least one demographic not seething at them, despite Matt Hancock's best efforts to turn care homes into covid parties.
And shortage of skills is harming growth, the argument shouldn't be if we need immigration, but are we taking in the right skills.
If we sort out the falling birth rates - turns out not having family friendly policies just means workers stop having families - and education, then we can stop relying on immigration.
Had, oh I don't know, some kind of conservative party got in power some 13 years or so back, they might have done something about that and we'd be about 5-10 years away from reducing that reliance.
I'm sure "Long Term Solutions" Sunak will be the case before long.
"are we taking in the right skills"
Well, immigrants WERE supposed to have "degree equivalents", now they need only have "a-level equivalents" - which is what the entire youth cohort is being made to do. We've imported 7 million in 23 years, how many is enough for you?
"If we sort out the falling birth rates"
Which means at a minimum halving house prices while keeping wages where they are, and/or serious rent controls, like 1960s-style. Chances of any govt implementing - zero. We need "affordable family formation".
@anon - degree level is meaningless, what degrees should they have?
The question is, do they have the skills we don't have enough off, and what employers are seeking, and are employable? If so, in they come, if they don't get a job in x number of months, out they go.
And we don't need any of those to deal with birth rates, couples are opting not to have children, support working couples - tax breaks, less expensive child care - and they'll start dropping sprogs again.
It doesn't need any kind of revolution, just a bit of horse sense.
The triple lock is the Fake Tory equivalent of “there is no money left”. It will freeze the corpse that is the UK economy. Sir Kneel should abolish it but may lack the balls. How all the pensioners will handle self assessment when the pension exceeds the personal allowance will be interesting. HMRC will have a field day levying fines. Might even have to stop working from home…
Here's another thought on the budget / immigration issue.
Those 7mn that have arrived supposedly have NRPF (no recourse to public funds).
So the 7mn are net contributors to the economy / GDP - possibly.
So if the 7mn weren't here, and were not contributing to the tax take, then the GDP figures (excluding net migration) would show us in constant recession.
Am having trouble thinking this is true - but that is where the logic takes you.
"Those 7mn that have arrived supposedly have NRPF (no recourse to public funds)."
If you believe that our wonderful State employees are asking anyone whether they have the right to various benefits and State services then I've got several bridges for sale you might like.
" Land with planning approval to be charged council tax three years after approval."
Great if you can get the planning departments of local councils to work at anything above glacial pace. I have intimate knowledge of a large urban expansion that has had outline planning for 3 years now, but not a single house has been built because the local authority are either inefficient on a 'Mao's Great Leap Forward' scale, or are actively engaged in trying to prevent houses being built. Which it is I couldn't say, the effect is much the same tho, nothing happens.
"massively increase council tax and provide occupancy rebates in areas of high housing demand"
That will be very popular with people like Mohammed, and his 7 bothers, all coincidently called Mohammed as well.........sorry, I'm Mohammed #1, call back tomorrow to see Mohammed #2, the day after for Mohammed #3.... etc etc
@Wildgoose - that would be ideal, but training has costs in both time and money.
If you were a company looking to invest in the UK and needed a few hundred people with a set of skills not available, the only reason you're going to accept jam tomorrow is if the government sends many bags of subsidy your way.
We've got apprenticeships, a route I've considered to train people up, but after training a college student I realised just how much time it'd take. Big companies can afford it, smaller ones will need the loss of a worker recompensed to make up for the loss of productivity.
Now I did night school in the 90s, but costs no longer make that feasible for a lot of people today.
Immigration is the "easy" fix - easy, as in the government can pretend there isn't any pressure on services, infrastructure, or housing until people get salty enough that it matters. Then they pretend to be doing something about it, or, in Johnson's case, just barefaced lie.
It's a problem that started in the Major years, and it's going to take just as long to fix, and we've not even started trying to fix it.
So where is all this going? The UK has an aging population (me) but this has been obvious for decades but never planned for. The middling folk don't have enough children - Winchester and Harrow are quite pricey and as for Dulwich - my dear!. The world population has been going up and up and we have busy fools making sure it does. Indeed lots of population is the new political weapon, gimme money or I send them your way. The poor country's nuclear weapon.
We can't close the borders - the boat people amount to trivial numbers and I can't see Suella strapped to a torpedo boat AK47 in hand. The rest come in legally, we need the nurses and bum wipers and doctors and surgeons. The students keep our Harry Potter universities in claret and stonemasons. A shortage of housing means in a certain demographic young women have to get pregnant to get a flat - when their mum chucks them out. This is a game, not enough money etc is provided for housing, the young women would be old maids by the time they get a flat the long list way. Shortage and limits to resource is the name of our government's game - so f&*k them, reproduce and game the system, only the stupid obey rules.
Where is growth coming from? New scientific discoveries are common enough but most are trivial details or 'iffy'. Very few really new ideas and even AI looks over hyped. We have had all the easy wins and I doubt a government commission hiring bearded, leather patched professors (m&f&o) will find any this side of eternity.
SMEs are good but are little fleas living off bigger fleas, few are standalone businesses of non trivial size. We need to attract big firms. That means 'certainly Big Shot, would 5000 hectares do, with a motorway link. Oh and 10,000 houses as well, no problem'. Democracy is too important to be left to the ordinary people.
So good luck to Starmer with all that.
@Jim - SMEs are certainly not all "little fleas living of bigger fleas", but are the majority of the economy.
Germany isn't currently a great example, but until recently has been - it's Mittlestand, 99% of which are SMEs, account for 99% of it's business, and employ around 2/3rds of Germans and were the driver for Germany's growth.
They have been responsible for around 2/3rds of Germanys exports too.
If those are fleas, may the UK become infested.
Germany has a bit of more sober governance though, not quite as hypnotised by shiny things - Wirecard showed they can be duped though - as our shower, desperate for our own Silicon Valley.
Yet, one of our biggest technological successes, ARM, is rarely held up as a fine example. It's not as shiny as a Facebook, no, but it has been central to the rise of many modern technologies and whose designs are currently keeping Intel awake at night.
The triple lock is wonderful for people with the new-style 2016 pension. The old style pensioners get triple lock on only part of their pension.
So maybe announce that triple lock will apply to only x% of the pension and CPI-linking to the rest?
"do they have the skills we don't have enough off, and what employers are seeking?"
No, that isn't the question. Employers have no right to the skills they want at the price they want. They can damn well pay a market rate, not petition government for cheap labour.
Excellent news for us on the state pension. Not all of us are rich! Offset by the fact that the threshold has again been frozen meaning that any annuity over c£1500 pa will be taxed. Brown's fiscal drag rules (which cost me a fortune when I hit the 40% rate; he then froze the threshold, the horrible little excuse for a human being. And inflicted an extra tax on pensions). This is a man who really wanted one and all to be state dependent - indeed, his "tax credits" were no more than benefits, but a triumph for him, as he got half of the (then) middle classes hooked on benefits as well.
There is a moral argument to bring in doctors and nurses from foreign lands - we leave that country without sufficient.
Of course, that assumes that the qualifications that are presented are legitimate to being with. We've had plenty of examples of dentists and surgeons where the NHS believed the piece of paper presented and let them butcher the proles.
Germany seem to be suffering more and more from the decision to let their occupying power destroy their main energy supplier. When will Germans rise up?
https://www.msn.com/en-gb/money/other/germany-to-end-energy-price-assistance-in-2023/ar-AA1kultq
Germany's Economic Stabilization Fund (WSF), which has helped consumers with higher energy costs, will be shut down by the end of December, Finance Minister Christian Lindner told Deutschlandfunk public radio on Friday.
"This means that no more payments will be made from it next year. Electricity and gas price brakes will expire. These will also have to be terminated on December 31," Lindner added.
The government is scrambling for funds as it was caught off guard by last week's ruling from the Constitutional Court that upended the coalition's budget plans. The court decision left the federal budget with a €60 billion ($66 billion) hole. The court ruled that Germany's strict debt rules do not allow the government to repurpose money originally borrowed during the coronavirus pandemic, when debt limits were suspended on an emergency basis, for climate change instead.
By the end of October, €31.2 billion had been provided from the fund, including €11.1 billion for the gas price brake and €11.6 billion for the electricity price brake, plus €4.8 billion for emergency aid for natural gas and €3.7 billion in subsidies for network charges.
Asked on the radio whether the state would step in to cover high gas prices in the coming year, Lindner said: "That is not to be expected."
Germany's occupying power is the Russian Federation.
Putin shut the pipeline due to 'technical difficulties.' That was BEFORE Nordtream explosion. This was the one 'Slasher' Putin ordered.
The Gangster Nation invaded Ukraine and attempted to put the screws on the west.
"Nice little cheap fossil-fuel based economy you got 'ere. Be a shame if anything were to happen to it. All them shiny car factories and pharmaceutical plants..pity for them to go idle, innit?
Oppps...Viktor! You've broken the pipeline, you clumsy special ops Colonel!
Poor Mr Germany is all in a state.
Tell you wot. You ignore our land grab on Ukraine. Them war crimes. All them kids we are stealing. And the grain. The enforced switching of nationalities to obtain basic medicines or work or food. An' the pipelines won't be accidentally dented.
I mean, there's no harm in it really, is there? Only the same as having park benches with a yellow star? And you know all about that.
So why don't you Huns just do ...nothing. Buy our stuff at a discount and pretend Russia is the victim, eh? Instead of the very image of the Nazis.
You know it makes sense.
You'll be much better off.
And no one will have to drop a load of dodgy nukes on Berlin, will they?
'Fink it over. You don't have long. Special Military Operation will be over in a week. An' you don't want us to bear you a grudge now, do you?
No one likes a cup of polonium or a Novichok perfume spray first fing in the morning.
'Ave a nice day."
Those evil Russians, putting their country closer and closer to US nuclear missile bases, eh? Highly provocative...
So anon, you are saying Russia didn't want to advance the border closer to American bases.
Why attack Ukraine then?
Did Vladimir not realise that advancing TOWARDS a point makes that destination NEARER?
Was everyone too afraid of 'Sudden Window Fall' to point that out to him? moving nearer to US bases makes them less far away?
Perhaps a youtube of Father Ted explaining to Father Dougal the idea of size and distance via the medium of dairy farm livestock, might help demonstrate the concept.
Back to the budget.
It appears the HMRC give with one hand and take back with two.
Those on NLW plus benefits will have a marginal 'tax' on 90% due to the way benefits clawbacks work. So if you are depending on an unskilled workforce to carry out the basic though necessary work in the economy, there is not much incentive to work extra hours.
To "make work pay" will require cutting benefits or substantially increasing the NLW.
....unless you cut triple lock and get some of those feckless pensioners to get back to work. Featherbedding has to stop.
thanks anon, interesting stuff. Any links? I tried the Child Poverty Action Group and Joseph Rowntree lot in vain for some figures.
Yours ever, a feckless pensioner with 32 years NI contributions (I know, should have paid self employed stamp. Abolish IR35!).
I know ND disagrees, but most of the energy price hikes are due to a combination of our insane greenery and our insane foreign policy.
Who to vote for? All 3 major parties plus Plaid/SNP believe in open borders, most of them believe in foreign wars. We've seen recently that they're all quite happy with bombing defenceless women and kids.
See Table 6. HMRC/Government ripoff of UK plc while claiming they are a 'generous' government.
https://benefitsinthefuture.com/the-government-is-continuing-to-be-extremely-generousto-itself-nlw-2024/
It's adorable to think that people might imagine the government to be generous.
There is no money aside from what is extracted with menaces and by force if required.
So the best that can be accomplished is stealing from Peter to pay Paul.
A trawl acoss the comments - not just here reveals a lot of moaning and groaning but not much light on what can actually be done.
Now there are things that could be done but they are either illegal or will destroy voting prospects or destroy one group or another's wealth. I have a few ideas but you won't like them.
We could leave things more or less alone and accept matters may improve - or not - over a decade or two. I don't see any magic bullet, Hunt has few if any options and the Tories are looking down the barrel of a gun.
So what will or could Labour do? Not likely to depose the monarchy or sieze ducal lands, so where is the money coming from? Start a nice little war with the French and make sure we lose? Maybe not. Unless you are of a revolutionary turn of mind you dare not rock the boat too much. A bit of cash off the rich, a bit of planning easement, a bit of doing what our neighbours do - look over the fence and copy. Send Ginger Growler on a study tour.
Perhaps a spot of inheritance tax - that no one can wriggle out of - not even Blair. Not too much - say 1% - but all the way down to £10,000 inc house(s), farms, companies, trust funds, overseas assets etc etc. Full personal disclosure or prison and no inheritance. If there is no screaming it's not working.
Back on topic, I see that the Scots have decided, not only to stop new installations of gas and oil boilers, but to force people who have them to install heat pumps, even in houses with poor insulation.
Just looked at the Wiki for the BBC's climate editor, Justin Rowlatt, author of a "The truth about heat pumps and the power needed to run them" piece which totally ignores losses in electricity generation and transmission when discussing their efficiency.
https://www.bbc.co.uk/news/science-environment-66359093
https://en.wikipedia.org/wiki/Justin_Rowlatt
"Justin Rowlatt was born on June 1966 in London and was educated at Hampstead Comprehensive in Cricklewood, and then at Mansfield College, Oxford University, where he studied Philosophy, politics and economics."
Flaming fish. Our elites are malevolent morons.
Well, Mansfield, what do you expect dear boy?
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