Just when the (unfunded) costs of pension and health for the boomers increases over time, NI gets reduced. Where is the money going to come in future if not general taxation? What hasn't been hit yet?
Perhaps they have an eye on the stash of Pension Fund cash. If you have a SIPP best to get the cash out of the HMRC clutches while you can.
Is it a coincidence that we haven't had our 2024/5 Poll Tax demands yet!
Perhaps there's something we don't know about...
And yes, Anon 8.06, I wondered who'll pay for the Boomers' pensions too, but there again, I am one by a few years so perhaps they hope I won't be around too long?
From a political perspective, it wasn't a bad budget. Cleverly stealing one of Labour's main tax raising wheezes (non-doms) and targeting the tax breaks (NI, fuel and booze duty freeze, child benefit) at the 'squeezed middle' that Labour will find difficult to row back on. Similarly the tax rises are all on things Labour would tax any way (e.g. businesss class flights now have £647 in tax!) From an economic perspective, it's all a bit meh. The UK is in such a state that we need a considerably more radical budget to really make a difference. This was just fiddling round the edges.
Repeat after me: Taxes Do Not Fund Spending. Never Have. Never Will.
If you don’t believe me, please feel free to take a look at the Bank of England’s balance sheet https://www.bankofengland.co.uk/-/media/boe/files/asset-purchase-facility/2023/afp-annual-report-2023.pdf
(and that’s just the most egregious example of deficit spending which has persisted, perfectly happily, with only a couple of notable exceptions which were strange anomalies and symptomatic of a big expansion of private sector debt, for centuries)
It does give one to think furiously, when you consider the tax percentage is back at late 1940s levels, but in the late 1940s the State owned and ran:
Steel Coal Railways Telecoms Gas production and distribution Electricity production and distribution Letters and parcels Airlines (BOAC and BEA) Buses and coaches Canals Shipbuilding Sugar Arms production (Royal Ordnance Factories) and a host of smaller things – there were even a few state-owned pubs up til the 1970s.
We've gone from a high wage, high tax economy, to a low wage, high tax economy. Brilliant. Plus, quality of life has declined as the wealthy flee the diversity they championed...
The Tories betrayed Brexit voters big time. Especially in the Red Wall areas, the Brexit vote (which had a higher turnout than any recent GE, as people thought for once their vote might make a difference) was effectively a referendum on mass immigration from Eastern Europe. Johnson and Sunak just replaced it with mass immigration from everywhere but particularly Africa.
Its all deck chairs on the Titanic. Hardly more than a handful of MPs in the chamber yesterday have a clue how to get us out of the mess we are in, and none of them will ever be in charge of anything bigger than a whelk stall. All those in power want more of the same thats got us here. And the public don't want to face the reality - we are broke, and getting broker by the day.
I've said for years that nothing will improve until the system collapses entirely. And even then things may not improve, it could go all Mad Max. But in the meantime the usual suspects will keep staggering along trying to keep the show on the road until it finally hits a large tree and the wheels fall off.
Steel Coal Railways Telecoms Gas production and distribution Electricity production and distribution Letters and parcels Airlines (BOAC and BEA) Buses and coaches Canals Shipbuilding Sugar Arms production (Royal Ordnance Factories) and a host of smaller things – there were even a few state-owned pubs up til the 1970s.
Anonymous - the first three of those largely ran at a large loss. British Steel alone managed to lose over a billion in the 70s, which was a lot of dough 50 years ago.
Some of these businesses were very profitable (e.g. Telecoms) but they acted as a defacto extra tax on the wider economy as they overpriced their product hugely due to being a state owned monopoly and then sent back the surplus to the treasury instead of reinvesting to provide a better/cheaper/more efficient product or service.
I would also argue that we were not a high wage economy back in the 1940s. Living standards were pretty poor for most people.
The real reason we have massive taxes and don't really see anything for it, is demographics, specifically pensions and healthcare. It's where all the money goes these days.
They could have made some really bold moves that would have either done Labour a favour, that Labour would probably like to do, but can't politically ( a bit like scrapping HS2) or put in some policy that may cause Labour to have to roll back on, in which case that could be politically damaging to Labour (thus a positive to the Tories).
Instead they've done a number of policies to try and attract the Labour base, which ultimately will have no net benefit to the tories.
Don't try and out Labour the Labour party - there's little upside to it (unless you're a closeted socialist)
Anon 10.38, if the first 3 ran at a large loss, isn't that an impressive tribute to the fact that we could cover such a loss then?
"they acted as a defacto extra tax on the wider economy as they overpriced their product hugely"
Yet water and electricity (and gas) were cheaper, much cheaper in the case of electricity.
A male on median income in Macmillan's day could not only afford a house on a single income, but could support a stay at home wife looking after his children.
"reason we have massive taxes and don't really see anything for it, is demographics"
You might have thought that some civil servant could have looked at birth trends from the late 1960s and derived a cunning plan to get them into sustainable mode. Israel have managed it.
I guess they weren't allowed to argue that a dozen Nigerians aren't a like for like replacement for a dozen aborted Daves or Fionas. Or maybe they think they'll make it up on quantity.
Keeps the wolf from the door for a few months longer. Provides a bit of space for the campaigning machinery to make a last fling of the dice.
I think the Tories will lose the election but are positioning for a shortish period out of power. Maybe as little as 5 years or less if it can be arranged. The headwinds to consider are a Trump win in the US - what effect will that have on defence spending, will Putin make more of a nuisance of himself, will Labour's union supporters go on a massive pay rise spree. As well as the normal difficulties an over-mature mid size Western nation faces.
So tee up the DM/DT and tabloid papers for a sustained five year p*&sing contest. Trot out Boris and the Tory grandees to tell us how badly and foolishly Labour is doing etc etc.
GDP wise we are in much the same boat as Germany and France. Not obvious how that can change much in one electoral cycle, indeed with some concerted sh^t stirring it could even go down. Happy is he who expects little, for he is seldom disappointed.
If there is not much room to maneuver for Labour when it comes to policy vis a vis the Tories, and if Starmer is sensible, doesn't change much and is continuity Sunak, then who would notice any difference between Labour and the Conservative Party?
Who would then vote the Tories back in to office after they realise that there is not a gnats whisker between them?
As far as I can see, the next election is going to be catastrophic, if not an extinction level event for the Tories.
The question is, who's going to vote for them?
The youth aren't going to turn out for them - every school, college or Uni campus is full of 'Tory Scum' graffiti.
The socialists / woke / progressives aren't going to vote for them - they're still spouting off about Thatcher ffs!
Immigrants / dole scroungers / third sector scroungers / NHS / Civil Service or anyone receiving money from the state aren't going to vote for them - Tory Austerity 'innit !
So who's left? Well, there's actual conservatives, whom the party have ignored and marginalized at every turn, so there are lots who are either not going to bother to vote, or will lend their vote to Reform or elsewhere.
Like many, I'm not going to vote for them until the entire useless, lying cohort are extirpated completely from public life and are replaced by actual conservatives espousing actual conservative values (and meaning it). I won't be happy living under a Labour government, but then not much will be different on a practical level.
So the question is, how much of a kicking will the Tories have to get, before they get the message?
Scrobs. said... Is it a coincidence that we haven't had our 2024/5 Poll Tax demands yet!
Perhaps there's something we don't know about...
And yes, Anon 8.06, I wondered who'll pay for the Boomers' pensions too, but there again, I am one by a few years so perhaps they hope I won't be around too long?
Fat chance; I plan to get to the Ton in 2047!"
Indeed. My mum finally drank herself to death aged 85. My grandparents, Victorians, apart from my father's old man who died at 70, WWI wounds, lived to 102, 96 & 96 - all in pretty good shape. 2051 for me to score a century. I sill have a photo of my father's Mum (a lovely Dubliner who saw the Post Office - said with Irish accent -burn down) getting her telegram from the late Queen.
So farewell then, Theresa May. Brexit means Brexit. You sought no competitive advantage In a strong and stable way. You called an election that you won But also lost.
Feisal Islam points out on the BBC that fiscal drag is bashing the lower end of the middle class, while leaving the £200,000+ crowd 'relatively' unaffected.
"David Cameron launched his 2015 election manifesto with a commitment to raise income tax thresholds above inflation to take people out of the income tax system, and to prevent many upper-middle earners paying higher-rate tax. It was the absolute cornerstone of Conservative tax strategy in 2017, too. What we see now is pretty much the entire reversal of that. "U-turn" does not really capture the galactic extent of this change in direction. In 2010, there were three million higher taxpayers, by 2029 there will be 7.3 million."
Now we have stopped printing money (will it ever stop?) where does the government get the cash it needs to redistribute to the 'worthy'.
Seems that voting for then (pensioners) or not voting for them (those on benefits) makes no difference. Promises and loyalty mean nothing. They are by a long way, the worst government for decades (including Heath)
With any luck, the last budget from a Tory chancellor ever!
They really do deserve to be utterly destroyed at the next election. An 80 seat majority basically squandered as they argued between themselves over which faction had the upper hand.
A pox on them all (everyone in the Houses of Parliament - not just the Tory MPs).
Given the choice to retain the OBR handcuffs, was probably the best that can be expected.
The NHS improvement fund is interesting, something has been needed for a long time to improve productivity in the NHS and reign in costs, if this will be it or just another set of jobs that achieve nothing, we'll see.
Government still has the problem that their claims do not match the lived experience of people, and throwing out spreadsheets and screaming "tax cuts! numberwang!" in no way deals with that.
The distance between the electorate and the elected is such that Westminster can no longer see the oncoming train until it is practically upon them. I suspect Labour will discover this too, either next election, or the one after, so that's the timeframe the Tories have to fix it on their side.
Another potential landmine for Labour this morning, Government has finally admitted we need more gas.
Whilst I think Starmer will cheerfully make a lot of tsk noises to keep the greener voters onside, once in power that'll become "another Tory failure" they have no choice but to accommodate to keep the lights on.
He'll be uncomfortable if pushed about it before the election though, and something the Tories can jump on to try and push potential Labour voters Green-and-LibDem-wards.
Apparently these new gas power plants can run efficiently for just an hour or two to fill gaps from renewables. No doubt, but at what cost to have them sat idle for the rest of the time?
Usual question, if you are going to pay for it to be built, why not use it all the time?
29 comments:
A headline tax cut, an array of small print tax rises. More deficits, more debt, more fiddling. Gordon Brown with a blue rosette.
Just when the (unfunded) costs of pension and health for the boomers increases over time, NI gets reduced. Where is the money going to come in future if not general taxation? What hasn't been hit yet?
Perhaps they have an eye on the stash of Pension Fund cash. If you have a SIPP best to get the cash out of the HMRC clutches while you can.
Is it a coincidence that we haven't had our 2024/5 Poll Tax demands yet!
Perhaps there's something we don't know about...
And yes, Anon 8.06, I wondered who'll pay for the Boomers' pensions too, but there again, I am one by a few years so perhaps they hope I won't be around too long?
Fat chance; I plan to get to the Ton in 2047!
From a political perspective, it wasn't a bad budget. Cleverly stealing one of Labour's main tax raising wheezes (non-doms) and targeting the tax breaks (NI, fuel and booze duty freeze, child benefit) at the 'squeezed middle' that Labour will find difficult to row back on. Similarly the tax rises are all on things Labour would tax any way (e.g. businesss class flights now have £647 in tax!)
From an economic perspective, it's all a bit meh. The UK is in such a state that we need a considerably more radical budget to really make a difference. This was just fiddling round the edges.
Labour's special skill is taxing the unborn - who do they vote for? Expect borrowing (to 'invest', of course) to go ballistic.
@ Anonymous 8:06
Repeat after me: Taxes Do Not Fund Spending. Never Have. Never Will.
If you don’t believe me, please feel free to take a look at the Bank of England’s balance sheet https://www.bankofengland.co.uk/-/media/boe/files/asset-purchase-facility/2023/afp-annual-report-2023.pdf
(and that’s just the most egregious example of deficit spending which has persisted, perfectly happily, with only a couple of notable exceptions which were strange anomalies and symptomatic of a big expansion of private sector debt, for centuries)
"Taxes Do Not Fund Spending. Never Have. Never Will."
Then what funded spending from Waterloo until the Great War?
It does give one to think furiously, when you consider the tax percentage is back at late 1940s levels, but in the late 1940s the State owned and ran:
Steel
Coal
Railways
Telecoms
Gas production and distribution
Electricity production and distribution
Letters and parcels
Airlines (BOAC and BEA)
Buses and coaches
Canals
Shipbuilding
Sugar
Arms production (Royal Ordnance Factories)
and a host of smaller things – there were even a few state-owned pubs up til the 1970s.
We've gone from a high wage, high tax economy, to a low wage, high tax economy. Brilliant. Plus, quality of life has declined as the wealthy flee the diversity they championed...
The Tories betrayed Brexit voters big time. Especially in the Red Wall areas, the Brexit vote (which had a higher turnout than any recent GE, as people thought for once their vote might make a difference) was effectively a referendum on mass immigration from Eastern Europe. Johnson and Sunak just replaced it with mass immigration from everywhere but particularly Africa.
@ dearieme 9:41
Come now, you could have looked that up for yourself:
https://articles.obr.uk/300-years-of-uk-public-finance-data/index.html
Its all deck chairs on the Titanic. Hardly more than a handful of MPs in the chamber yesterday have a clue how to get us out of the mess we are in, and none of them will ever be in charge of anything bigger than a whelk stall. All those in power want more of the same thats got us here. And the public don't want to face the reality - we are broke, and getting broker by the day.
I've said for years that nothing will improve until the system collapses entirely. And even then things may not improve, it could go all Mad Max. But in the meantime the usual suspects will keep staggering along trying to keep the show on the road until it finally hits a large tree and the wheels fall off.
in the late 1940s the State owned and ran:
Steel
Coal
Railways
Telecoms
Gas production and distribution
Electricity production and distribution
Letters and parcels
Airlines (BOAC and BEA)
Buses and coaches
Canals
Shipbuilding
Sugar
Arms production (Royal Ordnance Factories)
and a host of smaller things – there were even a few state-owned pubs up til the 1970s.
Anonymous - the first three of those largely ran at a large loss. British Steel alone managed to lose over a billion in the 70s, which was a lot of dough 50 years ago.
Some of these businesses were very profitable (e.g. Telecoms) but they acted as a defacto extra tax on the wider economy as they overpriced their product hugely due to being a state owned monopoly and then sent back the surplus to the treasury instead of reinvesting to provide a better/cheaper/more efficient product or service.
I would also argue that we were not a high wage economy back in the 1940s. Living standards were pretty poor for most people.
The real reason we have massive taxes and don't really see anything for it, is demographics, specifically pensions and healthcare. It's where all the money goes these days.
They could have made some really bold moves that would have either done Labour a favour, that Labour would probably like to do, but can't politically ( a bit like scrapping HS2) or put in some policy that may cause Labour to have to roll back on, in which case that could be politically damaging to Labour (thus a positive to the Tories).
Instead they've done a number of policies to try and attract the Labour base, which ultimately will have no net benefit to the tories.
Don't try and out Labour the Labour party - there's little upside to it (unless you're a closeted socialist)
Anon 10.38, if the first 3 ran at a large loss, isn't that an impressive tribute to the fact that we could cover such a loss then?
"they acted as a defacto extra tax on the wider economy as they overpriced their product hugely"
Yet water and electricity (and gas) were cheaper, much cheaper in the case of electricity.
A male on median income in Macmillan's day could not only afford a house on a single income, but could support a stay at home wife looking after his children.
"reason we have massive taxes and don't really see anything for it, is demographics"
You might have thought that some civil servant could have looked at birth trends from the late 1960s and derived a cunning plan to get them into sustainable mode. Israel have managed it.
I guess they weren't allowed to argue that a dozen Nigerians aren't a like for like replacement for a dozen aborted Daves or Fionas. Or maybe they think they'll make it up on quantity.
Ideally, the Tories would create political problems for Labour by running the economy well and inspiring us all to vote for them.
Instead, this Tory party creates political problems for Labour by stealing their ideas and conceding the case for high-tax high-spend statism.
Keeps the wolf from the door for a few months longer. Provides a bit of space for the campaigning machinery to make a last fling of the dice.
I think the Tories will lose the election but are positioning for a shortish period out of power. Maybe as little as 5 years or less if it can be arranged. The headwinds to consider are a Trump win in the US - what effect will that have on defence spending, will Putin make more of a nuisance of himself, will Labour's union supporters go on a massive pay rise spree. As well as the normal difficulties an over-mature mid size Western nation faces.
So tee up the DM/DT and tabloid papers for a sustained five year p*&sing contest. Trot out Boris and the Tory grandees to tell us how badly and foolishly Labour is doing etc etc.
GDP wise we are in much the same boat as Germany and France. Not obvious how that can change much in one electoral cycle, indeed with some concerted sh^t stirring it could even go down. Happy is he who expects little, for he is seldom disappointed.
If there is not much room to maneuver for Labour when it comes to policy vis a vis the Tories, and if Starmer is sensible, doesn't change much and is continuity Sunak, then who would notice any difference between Labour and the Conservative Party?
Who would then vote the Tories back in to office after they realise that there is not a gnats whisker between them?
As far as I can see, the next election is going to be catastrophic, if not an extinction level event for the Tories.
The question is, who's going to vote for them?
The youth aren't going to turn out for them - every school, college or Uni campus is full of 'Tory Scum' graffiti.
The socialists / woke / progressives aren't going to vote for them - they're still spouting off about Thatcher ffs!
Immigrants / dole scroungers / third sector scroungers / NHS / Civil Service or anyone receiving money from the state aren't going to vote for them - Tory Austerity 'innit !
So who's left? Well, there's actual conservatives, whom the party have ignored and marginalized at every turn, so there are lots who are either not going to bother to vote, or will lend their vote to Reform or elsewhere.
Like many, I'm not going to vote for them until the entire useless, lying cohort are extirpated completely from public life and are replaced by actual conservatives espousing actual conservative values (and meaning it). I won't be happy living under a Labour government, but then not much will be different on a practical level.
So the question is, how much of a kicking will the Tories have to get, before they get the message?
Scrobs. said...
Is it a coincidence that we haven't had our 2024/5 Poll Tax demands yet!
Perhaps there's something we don't know about...
And yes, Anon 8.06, I wondered who'll pay for the Boomers' pensions too, but there again, I am one by a few years so perhaps they hope I won't be around too long?
Fat chance; I plan to get to the Ton in 2047!"
Indeed. My mum finally drank herself to death aged 85. My grandparents, Victorians, apart from my father's old man who died at 70, WWI wounds, lived to 102, 96 & 96 - all in pretty good shape. 2051 for me to score a century. I sill have a photo of my father's Mum (a lovely Dubliner who saw the Post Office - said with Irish accent -burn down) getting her telegram from the late Queen.
So
So farewell then,
Theresa May.
Brexit means Brexit.
You sought no competitive advantage
In a strong and stable way.
You called an election that you won
But also lost.
The female John Major.
Feisal Islam points out on the BBC that fiscal drag is bashing the lower end of the middle class, while leaving the £200,000+ crowd 'relatively' unaffected.
"David Cameron launched his 2015 election manifesto with a commitment to raise income tax thresholds above inflation to take people out of the income tax system, and to prevent many upper-middle earners paying higher-rate tax. It was the absolute cornerstone of Conservative tax strategy in 2017, too. What we see now is pretty much the entire reversal of that. "U-turn" does not really capture the galactic extent of this change in direction. In 2010, there were three million higher taxpayers, by 2029 there will be 7.3 million."
Now we have stopped printing money (will it ever stop?) where does the government get the cash it needs to redistribute to the 'worthy'.
Seems that voting for then (pensioners) or not voting for them (those on benefits) makes no difference. Promises and loyalty mean nothing. They are by a long way, the worst government for decades (including Heath)
With any luck, the last budget from a Tory chancellor ever!
They really do deserve to be utterly destroyed at the next election. An 80 seat majority basically squandered as they argued between themselves over which faction had the upper hand.
A pox on them all (everyone in the Houses of Parliament - not just the Tory MPs).
OT, but what in God's name are RAF Eurofighters and KC2 tankers doing flying at this moment over Israel?
Given the choice to retain the OBR handcuffs, was probably the best that can be expected.
The NHS improvement fund is interesting, something has been needed for a long time to improve productivity in the NHS and reign in costs, if this will be it or just another set of jobs that achieve nothing, we'll see.
Government still has the problem that their claims do not match the lived experience of people, and throwing out spreadsheets and screaming "tax cuts! numberwang!" in no way deals with that.
The distance between the electorate and the elected is such that Westminster can no longer see the oncoming train until it is practically upon them. I suspect Labour will discover this too, either next election, or the one after, so that's the timeframe the Tories have to fix it on their side.
Not that I expect them to, mind.
Another potential landmine for Labour this morning, Government has finally admitted we need more gas.
Whilst I think Starmer will cheerfully make a lot of tsk noises to keep the greener voters onside, once in power that'll become "another Tory failure" they have no choice but to accommodate to keep the lights on.
He'll be uncomfortable if pushed about it before the election though, and something the Tories can jump on to try and push potential Labour voters Green-and-LibDem-wards.
Apparently these new gas power plants can run efficiently for just an hour or two to fill gaps from renewables. No doubt, but at what cost to have them sat idle for the rest of the time?
Usual question, if you are going to pay for it to be built, why not use it all the time?
We'll have a post on this gas / power announcement shortly
@ what in God's name are RAF Eurofighters and KC2 tankers doing flying at this moment over Israel?
Even more dangerous - what's a USAF R135 doing just a short distance from Murmansk?!
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