What will the membership say? They voted for a bonfire of the taxes; Jeremy now scoffs at their wretched little presumptions.
The membership should be put back in their box, they are totally unaccountable and should have no role in choosing a PM. (LOTO is possibly different)
If those that voted for Truss don't like it they can scuttle by to RefUk /UKIP from whence most of them came before they can inflict anymore damage on the country.
Hunts a class act. Let him now run the govt and have Truss as a figurehead whos wheeled out occasionally
That won’t wash with the public . The cause of all this chaos is still there as PM . If you’re not going to go into the next election with her then get rid of her now.
Initial reaction to Jeremy Hunt moves this morning - some quick calculations. Briefing suggests OBR was projecting medium term fiscal hole of £70bn. HMT estimates all tax reversal now raise £32bn...
...so still leaves £38bn hole to get debt falling as share of GDP in three years. Assume that favourable market reaction to U-turns lowers Gilt yields and interest rates by 1% - takes around £10bn off fiscal hole...
...still implies £28bn fiscal hole & £28bn of spending cuts. So the question for markets: are those cuts *politically* deliverable by Hunt/Truss?
The energy price cap rejigging will probably be worth half of that number leaving just £14bn in cuts and tax rises requires. Some kind of tax rises targeting rentseeking/ers would probably raise half of that number too leaving just £7bn in spending cuts, not exactly earth shattering.
Plus the fact that, if the markets are convinced that we are now back to sane government, they'll probably accept a bit of drift in the timetable, so Hunt might not need to fill the full fiscal hole quite so quickly.
Or at all. £7Bn is a rounding error when split across all Gvt spending.
Although it does rather assume no other increases in costs, does it not? Which I would suggest is a bold assumption.
The Tories will seek to blame Truss for all this. But they as a party and a government are responsible. They all did it, not just her.
The Tory Party is guilty of enabling a lot of this lunacy. The fact Liz Truss was even spoken about as a credible PM shows you just how far they have gone off the deep end.
Listen to Hunt’s statement just now and compare and contrast to Liz’s press conference on Friday.
It is like a spell has been broken. We have been governed by people so patently unsuited to governing for so long.
Which would be all well and good, No12, if the Conservative Party Membership were on board with all this, but that is anything but the case, as we know from the reports from Hyufd and others here about what the lunatics in the asylum are actually saying.
well i know expectations were low, but as i skim the Scottish Government’s “a stronger economy with independence” paper i am genuinely gobsmacked by this:
“No estimate of the fiscal starting position is set out in this document”
The problem for the Tories is that while this is a big step forwards, they won't win back Con -> Lab voters until Truss is gone completely. I certainly won't be voting Tory if she's still there, even if she's got no power.
I would also require the election method of future leaders to be changed so that a Truss like scenario could never re-occur.
If I was on the left of the Labour Party this would all worry me just as much as it worries the Moggs of this world. This is what the “grown ups” would have done to Corbyn, but for much smaller scale “sins”.
We’re now in for at least 10-15 years of very middle of the road policies whoever wins the various elections. Welcome back to soft consensus land.
10-15 years of soft consensus land sounds delightful to me.
If you heard what stanley druckenmiller says about how serious our situation is you would know this is rubbish. People getting poorer means more extreme politics.
Initial reaction to Jeremy Hunt moves this morning - some quick calculations. Briefing suggests OBR was projecting medium term fiscal hole of £70bn. HMT estimates all tax reversal now raise £32bn...
...so still leaves £38bn hole to get debt falling as share of GDP in three years. Assume that favourable market reaction to U-turns lowers Gilt yields and interest rates by 1% - takes around £10bn off fiscal hole...
...still implies £28bn fiscal hole & £28bn of spending cuts. So the question for markets: are those cuts *politically* deliverable by Hunt/Truss?
The energy price cap rejigging will probably be worth half of that number leaving just £14bn in cuts and tax rises requires. Some kind of tax rises targeting rentseeking/ers would probably raise half of that number too leaving just £7bn in spending cuts, not exactly earth shattering.
Plus the fact that, if the markets are convinced that we are now back to sane government, they'll probably accept a bit of drift in the timetable, so Hunt might not need to fill the full fiscal hole quite so quickly.
Or at all. £7Bn is a rounding error when split across all Gvt spending.
Although it does rather assume no other increases in costs, does it not? Which I would suggest is a bold assumption.
The OBR forecast will have cost rises included in their forecast, pensions and healthcare etc...
Initial reaction to Jeremy Hunt moves this morning - some quick calculations. Briefing suggests OBR was projecting medium term fiscal hole of £70bn. HMT estimates all tax reversal now raise £32bn...
...so still leaves £38bn hole to get debt falling as share of GDP in three years. Assume that favourable market reaction to U-turns lowers Gilt yields and interest rates by 1% - takes around £10bn off fiscal hole...
...still implies £28bn fiscal hole & £28bn of spending cuts. So the question for markets: are those cuts *politically* deliverable by Hunt/Truss?
The energy price cap rejigging will probably be worth half of that number leaving just £14bn in cuts and tax rises requires. Some kind of tax rises targeting rentseeking/ers would probably raise half of that number too leaving just £7bn in spending cuts, not exactly earth shattering.
Is this a rejigging post the Truss 2-days-after-beomcing-PM package? ie Have I missed something?
Energy-wise I've been trying to get to grips with an agile outgoing tariff.
Just one note, Henry III, Richard II, and Henry IV, under very different circumstances lost power but retained office. All regained their power subsequently.
If they prevaricate it is not impossible, however unlikely, for that to happen here. I don't think it will, but it's not an impossibility.
Jeremy Hunt is poised to announce that the energy price guarantee will only remain universal *until April*
It will then become targeted and capped
Govt helped by falling gas prices
@MrHarryCole first highlighted changes this morning
That's curtains for Truss, and probably the Tories for a generation (a real one, not a Scottish one). Good luck telling middle and high earners they have to pay higher taxes to subsidise other people's energy bills while their own go through the roof.
It is the right thing to do and let's give @MoonRabbit the credit for criticising the universal nature of the energy relief
The universal nature was owing to its being an emergency response, and anything else might take too much time to design. It's not a particularly good critique, as if you're giving too much away to the well off it could be recovered through tax - and the entire thing was due for review in the spring in any event.
Fair point
Other view points are available, not just Nigel’s. The “only thing that could have been done in a hurry” argument has a few questions hanging over it, firstly how long has government been working on a plan, a think tank came up with an alternative so at what point were alternatives even considered. And why has Truss been selling it as for two winters and beyond. She’s not been shy to mention that.
The bottom line is todays change to energy plan is great economically, the gilt markets, but not great as political message and poll recovery. So unlike Nigel’s view I claim Truss government chose the path for deliberate political reasons, to hell with economics, markets, value for money, it’s regressive nature up front unless mitigated. It was a political choice to bung everyone a handout and not even target the most in need.
The problem for the Tories is that while this is a big step forwards, they won't win back Con -> Lab voters until Truss is gone completely. I certainly won't be voting Tory if she's still there, even if she's got no power.
Would you consider switching back whoever replaces her? I remain to be convinced that I could.
The Party is guilty of enabling Truss and subjecting us to this lunacy. That the Party has encouraged everyone for so long to listen to fairytales is what has gotten us into this mess. I’d need to be very convinced that the grown ups are back in charge, and even then I don’t think I could forgive and forget so quickly.
What will the membership say? They voted for a bonfire of the taxes; Jeremy now scoffs at their wretched little presumptions.
The membership should be put back in their box, they are totally unaccountable and should have no role in choosing a PM. (LOTO is possibly different)
If those that voted for Truss don't like it they can scuttle by to RefUk /UKIP from whence most of them came before they can inflict anymore damage on the country.
Hunts a class act. Let him now run the govt and have Truss as a figurehead whos wheeled out occasionally
No offence, but you, ihunt, would say that, wouldn't you?
Anyway, shouldn't you get back to running the country?
If Hunt manages this afternoon in the Commons well PMship is his for the taking. Sunak's problem is he is the guy whose one job was to stop Truss in her tracks, and failed. And let's not forget his 2022 budget was shit, and widely panned as shit, and that we are in the hangover not euphoria phase of his covid furlough.
The Tories will seek to blame Truss for all this. But they as a party and a government are responsible. They all did it, not just her.
The Tory Party is guilty of enabling a lot of this lunacy. The fact Liz Truss was even spoken about as a credible PM shows you just how far they have gone off the deep end.
Listen to Hunt’s statement just now and compare and contrast to Liz’s press conference on Friday.
It is like a spell has been broken. We have been governed by people so patently unsuited to governing for so long.
Which would be all well and good, No12, if the Conservative Party Membership were on board with all this, but that is anything but the case, as we know from the reports from Hyufd and others here about what the lunatics in the asylum are actually saying.
Tory members think Hunt as chancellor is a WEF remainer plot
The problem for the Tories is that while this is a big step forwards, they won't win back Con -> Lab voters until Truss is gone completely. I certainly won't be voting Tory if she's still there, even if she's got no power.
Would you consider switching back whoever replaces her? I remain to be convinced that I could.
The Party is guilty of enabling Truss and subjecting us to this lunacy. That the Party has encouraged everyone for so long to listen to fairytales is what has gotten us into this mess. I’d need to be very convinced that the grown ups are back in charge, and even then I don’t think I could forgive and forget so quickly.
Yes, it depends on who replaces her. Suella Braverman would drive me to deliver leaflets for Labour, Rishi and I'd be booking time off to help campaign.
BREAKING: Jeremy Hunt has taken a wrecking ball to Liz Truss's tax plans.
*Says he will "reverse almost all the tax measures announced in the growth plan" *No longer cut dividend tax *Abandon IR35 changes *Won't cut basic rate of income tax, it remains at 20% indefinitely
What a moron - the IR35 changes were one of the easy wins in the whole thing which almost certainly would have generated more growth than they cost.
@MaxPB 's calculation shows that they may have cost way more than was estimated - I would argue that they don't because tax avoidance is now into the oh boy area...
And remember it's not the tax side of IR35 that kills it for people, it's the lack of expenses which make working inside impossible...
I also don't understand how a bunch of well paid employees working 5 days a week for a company becoming "contractors" working 5 days a week for a client now able to claim expenses and not pay employer's NI will generate growth.
That was something that was already covered by the IR35 rules and the main issue was that HMRC were rubbish at enforcing it. So rather than get their own house in order and clamp down on that they decided to put all the burden onto end user employers who then took the easiest route of having no more contractors outside IR35 at all.
In 6 years I had two HMRC IR35 investigations (or rather my accountants did) and passed both by a mile. And yet as soon as the rules on who decided changed, my biggest client simply stuck everyone inside IR35. As have most of my other clients.
The upshot of this is one of three routes generally.
The contractors move overseas - so the Government loses tax revenue and the industry loses much needed expertise The contractors retire - so the Government loses tax revenue and the industry loses much needed expertise The contractors decide to become employees with another company - on much lower wages so again the Government loses revenue.
These are the practical results of blanket decisions which is what is happening because of the 2017/21 changes. As always what the theorists forget is that people will always act in a way that is best for them and their families. They have no interest in what effect that has on Government incomes and will always chose the route best suited to them. That is exactly what has happened in a lot of industries.
Initial reaction to Jeremy Hunt moves this morning - some quick calculations. Briefing suggests OBR was projecting medium term fiscal hole of £70bn. HMT estimates all tax reversal now raise £32bn...
...so still leaves £38bn hole to get debt falling as share of GDP in three years. Assume that favourable market reaction to U-turns lowers Gilt yields and interest rates by 1% - takes around £10bn off fiscal hole...
...still implies £28bn fiscal hole & £28bn of spending cuts. So the question for markets: are those cuts *politically* deliverable by Hunt/Truss?
The energy price cap rejigging will probably be worth half of that number leaving just £14bn in cuts and tax rises requires. Some kind of tax rises targeting rentseeking/ers would probably raise half of that number too leaving just £7bn in spending cuts, not exactly earth shattering.
Plus the fact that, if the markets are convinced that we are now back to sane government, they'll probably accept a bit of drift in the timetable, so Hunt might not need to fill the full fiscal hole quite so quickly.
Or at all. £7Bn is a rounding error when split across all Gvt spending.
Although it does rather assume no other increases in costs, does it not? Which I would suggest is a bold assumption.
The OBR forecast will have cost rises included in their forecast, pensions and healthcare etc...
The Tories will seek to blame Truss for all this. But they as a party and a government are responsible. They all did it, not just her.
The Tory Party is guilty of enabling a lot of this lunacy. The fact Liz Truss was even spoken about as a credible PM shows you just how far they have gone off the deep end.
Listen to Hunt’s statement just now and compare and contrast to Liz’s press conference on Friday.
It is like a spell has been broken. We have been governed by people so patently unsuited to governing for so long.
Which would be all well and good, No12, if the Conservative Party Membership were on board with all this, but that is anything but the case, as we know from the reports from Hyufd and others here about what the lunatics in the asylum are actually saying.
Is this not being over-emphasised though, by people with an agenda to do so? Yes a decent chunk of the membership are likely to be genuine fruit-loops, we see them on here with Barty and the Lucky Man. But 43% still voted for Rishi. A vote again today would surely, surely, lead to a Rishi win?
So tl;dr - stuff the membership, they had their chance and royally screwed their own party and the country. Just do what is the best for the country for a change.
The problem for the Tories is that while this is a big step forwards, they won't win back Con -> Lab voters until Truss is gone completely. I certainly won't be voting Tory if she's still there, even if she's got no power.
You may be alone. The new Conservative A Team are going to see a massive shift from Labour to the Conservatives over the next weeks, and come the election the RedWall will just not vote. All good news for TeamTory.
Nonetheless with the external fiscal issues still in play and defaults on personal borrowing going through the roof, the potential for negative equity and inflation outstripping wages, the Conservatives may still struggle to make most seats.
Initial reaction to Jeremy Hunt moves this morning - some quick calculations. Briefing suggests OBR was projecting medium term fiscal hole of £70bn. HMT estimates all tax reversal now raise £32bn...
...so still leaves £38bn hole to get debt falling as share of GDP in three years. Assume that favourable market reaction to U-turns lowers Gilt yields and interest rates by 1% - takes around £10bn off fiscal hole...
...still implies £28bn fiscal hole & £28bn of spending cuts. So the question for markets: are those cuts *politically* deliverable by Hunt/Truss?
The energy price cap rejigging will probably be worth half of that number leaving just £14bn in cuts and tax rises requires. Some kind of tax rises targeting rentseeking/ers would probably raise half of that number too leaving just £7bn in spending cuts, not exactly earth shattering.
Plus the fact that, if the markets are convinced that we are now back to sane government, they'll probably accept a bit of drift in the timetable, so Hunt might not need to fill the full fiscal hole quite so quickly.
Or at all. £7Bn is a rounding error when split across all Gvt spending.
A small side note - due to Stormont not sitting, no one in N Ireland is getting the super-duper, life-saving, growth-enabling, not £6,000 energy scheme.
BREAKING: Jeremy Hunt has taken a wrecking ball to Liz Truss's tax plans.
*Says he will "reverse almost all the tax measures announced in the growth plan" *No longer cut dividend tax *Abandon IR35 changes *Won't cut basic rate of income tax, it remains at 20% indefinitely
What a moron - the IR35 changes were one of the easy wins in the whole thing which almost certainly would have generated more growth than they cost.
@MaxPB 's calculation shows that they may have cost way more than was estimated - I would argue that they don't because tax avoidance is now into the oh boy area...
And remember it's not the tax side of IR35 that kills it for people, it's the lack of expenses which make working inside impossible...
I also don't understand how a bunch of well paid employees working 5 days a week for a company becoming "contractors" working 5 days a week for a client now able to claim expenses and not pay employer's NI will generate growth.
That was something that was already covered by the IR35 rules and the main issue was that HMRC were rubbish at enforcing it. So rather than get their own house in order and clamp down on that they decided to put all the burden onto end user employers who then took the easiest route of having no more contractors outside IR35 at all.
In 6 years I had two HMRC IR35 investigations (or rather my accountants did) and passed both by a mile. And yet as soon as the rules on who decided changed, my biggest client simply stuck everyone inside IR35. As have most of my other clients.
The upshot of this is one of three routes generally.
The contractors move overseas - so the Government loses tax revenue and the industry loses much needed expertise The contractors retire - so the Government loses tax revenue and the industry loses much needed expertise The contractors decide to become employees with another company - on much lower wages so again the Government loses revenue.
These are the practical results of blanket decisions which is what is happening because of the 2017/21 changes. As always what the theorists forget is that people will always act in a way that is best for them and their families. They have no interest in what effect that has on Government incomes and will always chose the route best suited to them. That is exactly what has happened in a lot of industries.
BREAKING: Jeremy Hunt has taken a wrecking ball to Liz Truss's tax plans.
*Says he will "reverse almost all the tax measures announced in the growth plan" *No longer cut dividend tax *Abandon IR35 changes *Won't cut basic rate of income tax, it remains at 20% indefinitely
What a moron - the IR35 changes were one of the easy wins in the whole thing which almost certainly would have generated more growth than they cost.
@MaxPB 's calculation shows that they may have cost way more than was estimated - I would argue that they don't because tax avoidance is now into the oh boy area...
And remember it's not the tax side of IR35 that kills it for people, it's the lack of expenses which make working inside impossible...
I also don't understand how a bunch of well paid employees working 5 days a week for a company becoming "contractors" working 5 days a week for a client now able to claim expenses and not pay employer's NI will generate growth.
That was something that was already covered by the IR35 rules and the main issue was that HMRC were rubbish at enforcing it. So rather than get their own house in order and clamp down on that they decided to put all the burden onto end user employers who then took the easiest route of having no more contractors outside IR35 at all.
In 6 years I had two HMRC IR35 investigations (or rather my accountants did) and passed both by a mile. And yet as soon as the rules on who decided changed, my biggest client simply stuck everyone inside IR35. As have most of my other clients.
The upshot of this is one of three routes generally.
The contractors move overseas - so the Government loses tax revenue and the industry loses much needed expertise The contractors retire - so the Government loses tax revenue and the industry loses much needed expertise The contractors decide to become employees with another company - on much lower wages so again the Government loses revenue.
These are the practical results of blanket decisions which is what is happening because of the 2017/21 changes. As always what the theorists forget is that people will always act in a way that is best for them and their families. They have no interest in what effect that has on Government incomes and will always chose the route best suited to them. That is exactly what has happened in a lot of industries.
I'm probably only to work 6 months a year from now on.
3 months to get £40,000 for the pension 3 months to earn enough to live on.
Then stop until April rolls round and then start again.
Initial reaction to Jeremy Hunt moves this morning - some quick calculations. Briefing suggests OBR was projecting medium term fiscal hole of £70bn. HMT estimates all tax reversal now raise £32bn...
...so still leaves £38bn hole to get debt falling as share of GDP in three years. Assume that favourable market reaction to U-turns lowers Gilt yields and interest rates by 1% - takes around £10bn off fiscal hole...
...still implies £28bn fiscal hole & £28bn of spending cuts. So the question for markets: are those cuts *politically* deliverable by Hunt/Truss?
The energy price cap rejigging will probably be worth half of that number leaving just £14bn in cuts and tax rises requires. Some kind of tax rises targeting rentseeking/ers would probably raise half of that number too leaving just £7bn in spending cuts, not exactly earth shattering.
Plus the fact that, if the markets are convinced that we are now back to sane government, they'll probably accept a bit of drift in the timetable, so Hunt might not need to fill the full fiscal hole quite so quickly.
Or at all. £7Bn is a rounding error when split across all Gvt spending.
A small side note - due to Stormont not sitting, no one in N Ireland is getting the super-duper, life-saving, growth-enabling, not £6,000 energy scheme.
People really should stop voting on sectarian lines. Time to move on.
I haven't bet on anything. However I find it difficult to understand how Liz Truss can ever emerge in politics with any credibility ever again. That doesn't mean that she won't try, as she seems to be in denial of the reality of her predicament; but I agree with an earlier comment about this being surely the single biggest political humiliation in recent British political history.
Initial reaction to Jeremy Hunt moves this morning - some quick calculations. Briefing suggests OBR was projecting medium term fiscal hole of £70bn. HMT estimates all tax reversal now raise £32bn...
...so still leaves £38bn hole to get debt falling as share of GDP in three years. Assume that favourable market reaction to U-turns lowers Gilt yields and interest rates by 1% - takes around £10bn off fiscal hole...
...still implies £28bn fiscal hole & £28bn of spending cuts. So the question for markets: are those cuts *politically* deliverable by Hunt/Truss?
The energy price cap rejigging will probably be worth half of that number leaving just £14bn in cuts and tax rises requires. Some kind of tax rises targeting rentseeking/ers would probably raise half of that number too leaving just £7bn in spending cuts, not exactly earth shattering.
Plus the fact that, if the markets are convinced that we are now back to sane government, they'll probably accept a bit of drift in the timetable, so Hunt might not need to fill the full fiscal hole quite so quickly.
Or at all. £7Bn is a rounding error when split across all Gvt spending.
Although it does rather assume no other increases in costs, does it not? Which I would suggest is a bold assumption.
Proves the point. Inflation movements in tax and benefits will dwarf any “fiscal blackhole” form any of this.
BREAKING: Jeremy Hunt has taken a wrecking ball to Liz Truss's tax plans.
*Says he will "reverse almost all the tax measures announced in the growth plan" *No longer cut dividend tax *Abandon IR35 changes *Won't cut basic rate of income tax, it remains at 20% indefinitely
What a moron - the IR35 changes were one of the easy wins in the whole thing which almost certainly would have generated more growth than they cost.
@MaxPB 's calculation shows that they may have cost way more than was estimated - I would argue that they don't because tax avoidance is now into the oh boy area...
And remember it's not the tax side of IR35 that kills it for people, it's the lack of expenses which make working inside impossible...
I also don't understand how a bunch of well paid employees working 5 days a week for a company becoming "contractors" working 5 days a week for a client now able to claim expenses and not pay employer's NI will generate growth.
That was something that was already covered by the IR35 rules and the main issue was that HMRC were rubbish at enforcing it. So rather than get their own house in order and clamp down on that they decided to put all the burden onto end user employers who then took the easiest route of having no more contractors outside IR35 at all.
In 6 years I had two HMRC IR35 investigations (or rather my accountants did) and passed both by a mile. And yet as soon as the rules on who decided changed, my biggest client simply stuck everyone inside IR35. As have most of my other clients.
The upshot of this is one of three routes generally.
The contractors move overseas - so the Government loses tax revenue and the industry loses much needed expertise The contractors retire - so the Government loses tax revenue and the industry loses much needed expertise The contractors decide to become employees with another company - on much lower wages so again the Government loses revenue.
These are the practical results of blanket decisions which is what is happening because of the 2017/21 changes. As always what the theorists forget is that people will always act in a way that is best for them and their families. They have no interest in what effect that has on Government incomes and will always chose the route best suited to them. That is exactly what has happened in a lot of industries.
Is there any reason why people can't be employed short term on PAYE? The BBC/TV does this a lot.
The Tories will seek to blame Truss for all this. But they as a party and a government are responsible. They all did it, not just her.
The Tory Party is guilty of enabling a lot of this lunacy. The fact Liz Truss was even spoken about as a credible PM shows you just how far they have gone off the deep end.
Listen to Hunt’s statement just now and compare and contrast to Liz’s press conference on Friday.
It is like a spell has been broken. We have been governed by people so patently unsuited to governing for so long.
Which would be all well and good, No12, if the Conservative Party Membership were on board with all this, but that is anything but the case, as we know from the reports from Hyufd and others here about what the lunatics in the asylum are actually saying.
I agree and another reason why the party needs time in opposition whatever happens to learn the basics again. It needs to encourage new members to come through and renew it. It’s very difficult to do that in government.
Unfortunately I suspect it has an almighty battle ahead of it because, absent a moment of extreme group clarity, I doubt its members will elect a sane LOTO after the party loses power. It will take time and patience (and decent folk staying the course) to steer it back. I have confidence it can do it - if Labour managed it after Corbyn then anyone can.
It would be a bit weird to put Sunak in charge when the net effect of the changes since he resigned has been to reverse his attempt to put up NI and cut income tax (and thereby transfer money from the working population to the retired and rentiers).
BREAKING: Jeremy Hunt has taken a wrecking ball to Liz Truss's tax plans.
*Says he will "reverse almost all the tax measures announced in the growth plan" *No longer cut dividend tax *Abandon IR35 changes *Won't cut basic rate of income tax, it remains at 20% indefinitely
What a moron - the IR35 changes were one of the easy wins in the whole thing which almost certainly would have generated more growth than they cost.
@MaxPB 's calculation shows that they may have cost way more than was estimated - I would argue that they don't because tax avoidance is now into the oh boy area...
And remember it's not the tax side of IR35 that kills it for people, it's the lack of expenses which make working inside impossible...
I also don't understand how a bunch of well paid employees working 5 days a week for a company becoming "contractors" working 5 days a week for a client now able to claim expenses and not pay employer's NI will generate growth.
That was something that was already covered by the IR35 rules and the main issue was that HMRC were rubbish at enforcing it. So rather than get their own house in order and clamp down on that they decided to put all the burden onto end user employers who then took the easiest route of having no more contractors outside IR35 at all.
In 6 years I had two HMRC IR35 investigations (or rather my accountants did) and passed both by a mile. And yet as soon as the rules on who decided changed, my biggest client simply stuck everyone inside IR35. As have most of my other clients.
The upshot of this is one of three routes generally.
The contractors move overseas - so the Government loses tax revenue and the industry loses much needed expertise The contractors retire - so the Government loses tax revenue and the industry loses much needed expertise The contractors decide to become employees with another company - on much lower wages so again the Government loses revenue.
These are the practical results of blanket decisions which is what is happening because of the 2017/21 changes. As always what the theorists forget is that people will always act in a way that is best for them and their families. They have no interest in what effect that has on Government incomes and will always chose the route best suited to them. That is exactly what has happened in a lot of industries.
Initial reaction to Jeremy Hunt moves this morning - some quick calculations. Briefing suggests OBR was projecting medium term fiscal hole of £70bn. HMT estimates all tax reversal now raise £32bn...
...so still leaves £38bn hole to get debt falling as share of GDP in three years. Assume that favourable market reaction to U-turns lowers Gilt yields and interest rates by 1% - takes around £10bn off fiscal hole...
...still implies £28bn fiscal hole & £28bn of spending cuts. So the question for markets: are those cuts *politically* deliverable by Hunt/Truss?
The energy price cap rejigging will probably be worth half of that number leaving just £14bn in cuts and tax rises requires. Some kind of tax rises targeting rentseeking/ers would probably raise half of that number too leaving just £7bn in spending cuts, not exactly earth shattering.
Plus the fact that, if the markets are convinced that we are now back to sane government, they'll probably accept a bit of drift in the timetable, so Hunt might not need to fill the full fiscal hole quite so quickly.
Or at all. £7Bn is a rounding error when split across all Gvt spending.
Although it does rather assume no other increases in costs, does it not? Which I would suggest is a bold assumption.
The OBR forecast will have cost rises included in their forecast, pensions and healthcare etc...
And public sector pay?
Nope. Built in to departmental settlements which don’t change with inflation (they assume a given deflator when set and stick with it). So in, say, times of 10% inflation all departments will “feel” like they are seeing a cut, because the SR assumed maybe 3% year on year growth inclusive of inflation.
BREAKING: Jeremy Hunt has taken a wrecking ball to Liz Truss's tax plans.
*Says he will "reverse almost all the tax measures announced in the growth plan" *No longer cut dividend tax *Abandon IR35 changes *Won't cut basic rate of income tax, it remains at 20% indefinitely
What a moron - the IR35 changes were one of the easy wins in the whole thing which almost certainly would have generated more growth than they cost.
@MaxPB 's calculation shows that they may have cost way more than was estimated - I would argue that they don't because tax avoidance is now into the oh boy area...
And remember it's not the tax side of IR35 that kills it for people, it's the lack of expenses which make working inside impossible...
I also don't understand how a bunch of well paid employees working 5 days a week for a company becoming "contractors" working 5 days a week for a client now able to claim expenses and not pay employer's NI will generate growth.
That was something that was already covered by the IR35 rules and the main issue was that HMRC were rubbish at enforcing it. So rather than get their own house in order and clamp down on that they decided to put all the burden onto end user employers who then took the easiest route of having no more contractors outside IR35 at all.
In 6 years I had two HMRC IR35 investigations (or rather my accountants did) and passed both by a mile. And yet as soon as the rules on who decided changed, my biggest client simply stuck everyone inside IR35. As have most of my other clients.
The upshot of this is one of three routes generally.
The contractors move overseas - so the Government loses tax revenue and the industry loses much needed expertise The contractors retire - so the Government loses tax revenue and the industry loses much needed expertise The contractors decide to become employees with another company - on much lower wages so again the Government loses revenue.
These are the practical results of blanket decisions which is what is happening because of the 2017/21 changes. As always what the theorists forget is that people will always act in a way that is best for them and their families. They have no interest in what effect that has on Government incomes and will always chose the route best suited to them. That is exactly what has happened in a lot of industries.
Is there any reason why people can't be employed short term on PAYE? The BBC/TV does this a lot.
That is effectively what being inside IR35 is. But with none of the benefits for the contractor.
The problem for the Tories is that while this is a big step forwards, they won't win back Con -> Lab voters until Truss is gone completely. I certainly won't be voting Tory if she's still there, even if she's got no power.
Would you consider switching back whoever replaces her? I remain to be convinced that I could.
The Party is guilty of enabling Truss and subjecting us to this lunacy. That the Party has encouraged everyone for so long to listen to fairytales is what has gotten us into this mess. I’d need to be very convinced that the grown ups are back in charge, and even then I don’t think I could forgive and forget so quickly.
The problem goes back at least to the resignation of Cameron.
The Party has now imposed two consecutive clowns on us. You think the electorate will tolerate a third?
BREAKING: Jeremy Hunt has taken a wrecking ball to Liz Truss's tax plans.
*Says he will "reverse almost all the tax measures announced in the growth plan" *No longer cut dividend tax *Abandon IR35 changes *Won't cut basic rate of income tax, it remains at 20% indefinitely
What a moron - the IR35 changes were one of the easy wins in the whole thing which almost certainly would have generated more growth than they cost.
@MaxPB 's calculation shows that they may have cost way more than was estimated - I would argue that they don't because tax avoidance is now into the oh boy area...
And remember it's not the tax side of IR35 that kills it for people, it's the lack of expenses which make working inside impossible...
I also don't understand how a bunch of well paid employees working 5 days a week for a company becoming "contractors" working 5 days a week for a client now able to claim expenses and not pay employer's NI will generate growth.
That was something that was already covered by the IR35 rules and the main issue was that HMRC were rubbish at enforcing it. So rather than get their own house in order and clamp down on that they decided to put all the burden onto end user employers who then took the easiest route of having no more contractors outside IR35 at all.
In 6 years I had two HMRC IR35 investigations (or rather my accountants did) and passed both by a mile. And yet as soon as the rules on who decided changed, my biggest client simply stuck everyone inside IR35. As have most of my other clients.
The upshot of this is one of three routes generally.
The contractors move overseas - so the Government loses tax revenue and the industry loses much needed expertise The contractors retire - so the Government loses tax revenue and the industry loses much needed expertise The contractors decide to become employees with another company - on much lower wages so again the Government loses revenue.
These are the practical results of blanket decisions which is what is happening because of the 2017/21 changes. As always what the theorists forget is that people will always act in a way that is best for them and their families. They have no interest in what effect that has on Government incomes and will always chose the route best suited to them. That is exactly what has happened in a lot of industries.
Get your NI paid like other employees
The point is we aren't employees - because we work on a specific project for 6-12 months and then move onwards.
The end client doesn't need me long term - they need me to install and customise some software, confirm it works and then leave. They also only want me because I spent last year doing the same job at a different company who also only wanted me for that specific self-contained piece of work.
"In repealing FTPA, the government has effectively restored a royal prerogative. This has not been done before because normally the direction is always in turning historic crown powers into statute. While there has been debate as to whether it was possible to ‘revive’ a prerogative, the government has done so by legislating to make a previous power under the prerogative ‘exercisable again’.
The major concern is that the government is taking away from the Commons the right to decide when parliament should be dissolved and instead giving the prime minister unconstrained power over elections...
...The 2019 prorogation saga, when the Queen felt compelled to grant Boris Johnson a five-week prorogation of parliament (later reversed by the Supreme Court), highlighted the monarch’s difficulty in dissenting from the advice of her ministers. To do so would expose the monarch to allegations of political interference of an undemocratic nature, even if the intention of the refusal was to preserve the good functioning of democracy. This makes for an uneasy role if a future dissolution occurred controversially."
I doubt that King Chuck would be worried about being seen to be "dissenting from the advice of his ministers".
"are you back again? [teeth sucking noise] oh dear oh dear! "I would like to request the dissolution of Parliament and a general election your majesty" "Why? Your party has a majority of nearly 80 doesn't it?" "...... ........ ...... [buffering] ...... erm, I want it" "No no no, we can appoint another Prime Minister. What about Mr Sunak, could he command a majority of the house?" "...... ........ ...... [buffering] ...... erm" etc
Chopping Charles from Cop27 might not have been a great idea after all. He appears to be a vindictive b******!
Would Sunak be able to carry the confidence of the Commons ?
Probably but there might be enough Boris die-hards to blow the plan up. Noone outside the Conservatives (Perhaps the DUP) would vote for him as they'd all want a GE with PM Truss in place.
In the scenario where PM Sunak faces an immediate confidence vote then there would already no longer be a PM Truss...
Supposedly Mrs Brady has double the number of required letters for a challenge. Never mind changing the rules, that is the point where he takes his cheshire cat grin to Downing Street and dispatches his 3rd PM.
Sunak was the choice of the majority of Tory MPs. Having seen Truss resign the remaining holdouts would have no choice than to back Sunak or face an immediate General Election and the loss of their seats.
Wouldn't be a comfortable ride for Sunak, but I doubt his government would stick around long, hence me tipping a GE in May 23 alongside the locals.
Sunak was not 'the choice of the majority of Tory MPs' - though he received more votes than any other contender. Nevertheless in the final round of voting only 38% of Tory MPs supported him.
Liz Truss = Henry VI circa 1470-71 Jeremy Hunt = The Earl of Warwick
Pretty grim outlook for the rest of the country, then.
Have we a candidate for Henry Tudor then? Can't think of a candidate in any of the three parties with some Welsh origin, unless it's step forward Stephen Kinnock!
Torsten Bell @TorstenBell · 54m Why has @Jeremy_Hunt pressed the nuclear button on dumping not just most of mini-Budget but also next year's help for energy bills? Because he's desperate to get markets to cut the interest rate on government debt ASAP so @OBR_UK scale back estimates of fiscal hole to be filled👇
I haven't bet on anything. However I find it difficult to understand how Liz Truss can ever emerge in politics with any credibility ever again. That doesn't mean that she won't try, as she seems to be in denial of the reality of her predicament; but I agree with an earlier comment about this being surely the single biggest political humiliation in recent British political history.
You just wouldn't be able to put your mark against a Conservative Party at the next GE or indeed any election if Truss is still in charge.
You would be directly proving the "fool me once..." maxim.
BREAKING: Jeremy Hunt has taken a wrecking ball to Liz Truss's tax plans.
*Says he will "reverse almost all the tax measures announced in the growth plan" *No longer cut dividend tax *Abandon IR35 changes *Won't cut basic rate of income tax, it remains at 20% indefinitely
What a moron - the IR35 changes were one of the easy wins in the whole thing which almost certainly would have generated more growth than they cost.
@MaxPB 's calculation shows that they may have cost way more than was estimated - I would argue that they don't because tax avoidance is now into the oh boy area...
And remember it's not the tax side of IR35 that kills it for people, it's the lack of expenses which make working inside impossible...
I also don't understand how a bunch of well paid employees working 5 days a week for a company becoming "contractors" working 5 days a week for a client now able to claim expenses and not pay employer's NI will generate growth.
That was something that was already covered by the IR35 rules and the main issue was that HMRC were rubbish at enforcing it. So rather than get their own house in order and clamp down on that they decided to put all the burden onto end user employers who then took the easiest route of having no more contractors outside IR35 at all.
In 6 years I had two HMRC IR35 investigations (or rather my accountants did) and passed both by a mile. And yet as soon as the rules on who decided changed, my biggest client simply stuck everyone inside IR35. As have most of my other clients.
The upshot of this is one of three routes generally.
The contractors move overseas - so the Government loses tax revenue and the industry loses much needed expertise The contractors retire - so the Government loses tax revenue and the industry loses much needed expertise The contractors decide to become employees with another company - on much lower wages so again the Government loses revenue.
These are the practical results of blanket decisions which is what is happening because of the 2017/21 changes. As always what the theorists forget is that people will always act in a way that is best for them and their families. They have no interest in what effect that has on Government incomes and will always chose the route best suited to them. That is exactly what has happened in a lot of industries.
Is there any reason why people can't be employed short term on PAYE? The BBC/TV does this a lot.
Happy to do that (but note many people won't). However let's explain how it works
My inside IR35 rate is £1000 a day - outside I charge £700...
Inside if you want meetings you need to sort that out including paying all costs (hotel and train fares) direct to the hotel / train company. Otherwise your staff need to come and see me - I'm happy to recommend suitable local hotels (the UK bank I'm starting at will be doing the latter next week because they can't do the former)..
Outside - not a problem I can expense the costs so I will just bill them in addition at cost.
Somehow, I don't think this scam email I've just received is going to be a great money-spinner:
GREETINGS TO YOU DEAREST!
I am KAMALA D. HARRIS, Vice President of the United States and this is to inform you about your Bank Check Draft brought back by the United Embassy from the government of Benin Republic in the white house Washington DC as your compensation fund been mandated to be deliver to your home address, To avoid wrong delivery of your check draft worth Ten million united states dollars ( 10.000.000,00 Million) Kindly reconfirm to me the below data
Initial reaction to Jeremy Hunt moves this morning - some quick calculations. Briefing suggests OBR was projecting medium term fiscal hole of £70bn. HMT estimates all tax reversal now raise £32bn...
...so still leaves £38bn hole to get debt falling as share of GDP in three years. Assume that favourable market reaction to U-turns lowers Gilt yields and interest rates by 1% - takes around £10bn off fiscal hole...
...still implies £28bn fiscal hole & £28bn of spending cuts. So the question for markets: are those cuts *politically* deliverable by Hunt/Truss?
The energy price cap rejigging will probably be worth half of that number leaving just £14bn in cuts and tax rises requires. Some kind of tax rises targeting rentseeking/ers would probably raise half of that number too leaving just £7bn in spending cuts, not exactly earth shattering.
Plus the fact that, if the markets are convinced that we are now back to sane government, they'll probably accept a bit of drift in the timetable, so Hunt might not need to fill the full fiscal hole quite so quickly.
Or at all. £7Bn is a rounding error when split across all Gvt spending.
Although it does rather assume no other increases in costs, does it not? Which I would suggest is a bold assumption.
The OBR forecast will have cost rises included in their forecast, pensions and healthcare etc...
Yes, but what assumptions ? Particularly public sector pay.
The problem for the Tories is that while this is a big step forwards, they won't win back Con -> Lab voters until Truss is gone completely. I certainly won't be voting Tory if she's still there, even if she's got no power.
Would you consider switching back whoever replaces her? I remain to be convinced that I could.
The Party is guilty of enabling Truss and subjecting us to this lunacy. That the Party has encouraged everyone for so long to listen to fairytales is what has gotten us into this mess. I’d need to be very convinced that the grown ups are back in charge, and even then I don’t think I could forgive and forget so quickly.
The problem goes back at least to the resignation of Cameron.
The Party has now imposed two consecutive clowns on us. You think the electorate will tolerate a third?
We did rubber stamp the penultimate one, and if you add Mrs May to the mix we grudgingly endorsed her too.
The Tories will seek to blame Truss for all this. But they as a party and a government are responsible. They all did it, not just her.
The Tory Party is guilty of enabling a lot of this lunacy. The fact Liz Truss was even spoken about as a credible PM shows you just how far they have gone off the deep end.
Listen to Hunt’s statement just now and compare and contrast to Liz’s press conference on Friday.
It is like a spell has been broken. We have been governed by people so patently unsuited to governing for so long.
Which would be all well and good, No12, if the Conservative Party Membership were on board with all this, but that is anything but the case, as we know from the reports from Hyufd and others here about what the lunatics in the asylum are actually saying.
I agree and another reason why the party needs time in opposition whatever happens to learn the basics again. It needs to encourage new members to come through and renew it. It’s very difficult to do that in government.
Unfortunately I suspect it has an almighty battle ahead of it because, absent a moment of extreme group clarity, I doubt its members will elect a sane LOTO after the party loses power. It will take time and patience (and decent folk staying the course) to steer it back. I have confidence it can do it - if Labour managed it after Corbyn then anyone can.
Some of those are very funny - Cons losing Henley by 13%. Even Sunak's in trouble...
Lab take Harborough, but Con scrape home in Rutland and Melton.
🍿🍿🍿
Rutland politics are mad in a Herefordshire/Powys "True Batshit Independents" type way. Both Melton and Rutland ought to be moderately fertile ground for the LibDems but I've never seen them emerge from the swamp of loonies.
This is the tone of the angry comments in the telegraph right now
We are going to find out now what it’s like for the country to be controlled by the WEF financial institutions of Blackrock,Vanguard and Statestream and their fanatical idealists.
BREAKING: Jeremy Hunt has taken a wrecking ball to Liz Truss's tax plans.
*Says he will "reverse almost all the tax measures announced in the growth plan" *No longer cut dividend tax *Abandon IR35 changes *Won't cut basic rate of income tax, it remains at 20% indefinitely
What a moron - the IR35 changes were one of the easy wins in the whole thing which almost certainly would have generated more growth than they cost.
@MaxPB 's calculation shows that they may have cost way more than was estimated - I would argue that they don't because tax avoidance is now into the oh boy area...
And remember it's not the tax side of IR35 that kills it for people, it's the lack of expenses which make working inside impossible...
I also don't understand how a bunch of well paid employees working 5 days a week for a company becoming "contractors" working 5 days a week for a client now able to claim expenses and not pay employer's NI will generate growth.
That was something that was already covered by the IR35 rules and the main issue was that HMRC were rubbish at enforcing it. So rather than get their own house in order and clamp down on that they decided to put all the burden onto end user employers who then took the easiest route of having no more contractors outside IR35 at all.
In 6 years I had two HMRC IR35 investigations (or rather my accountants did) and passed both by a mile. And yet as soon as the rules on who decided changed, my biggest client simply stuck everyone inside IR35. As have most of my other clients.
The upshot of this is one of three routes generally.
The contractors move overseas - so the Government loses tax revenue and the industry loses much needed expertise The contractors retire - so the Government loses tax revenue and the industry loses much needed expertise The contractors decide to become employees with another company - on much lower wages so again the Government loses revenue.
These are the practical results of blanket decisions which is what is happening because of the 2017/21 changes. As always what the theorists forget is that people will always act in a way that is best for them and their families. They have no interest in what effect that has on Government incomes and will always chose the route best suited to them. That is exactly what has happened in a lot of industries.
Oh dear how sad never mind
Well, when your vital industries have to stop because they can't get the expertise and Government incomes drop because of the lost tax revenue then you might think about this a bit more sensibly.
I have accepted being inside IR35 because I get other benefits from being able to control my working and also because I am too old to think about going overseas again. But right now projects I am working on are stopping because of a lack of experienced people. That impacts you so you should really be concerned about how Government policy in this area is affecting the nations finances and ability to operate. Two years ago I was one of about 40 people doing my specific job in the UK. Now I am one of about 25.
Telegraph Politics @TelePolitics · 9m Replying to @TelePolitics 💬"Last night I was sent a single WhatsApp message from a prominent member of the 2019 intake of Tory MPs. The message said: Rishi PM. Hunt CX. Penny FS. And it’s a done deal'"
Wallace as FS with Mordaunt back at defence would be politically more stable.
But even without that it would be a better government than this lot.
Not that I’m remotely a fan, but for the (very) short term lol Priti Patel back at Home Office would be quite amusing.
BREAKING: Jeremy Hunt has taken a wrecking ball to Liz Truss's tax plans.
*Says he will "reverse almost all the tax measures announced in the growth plan" *No longer cut dividend tax *Abandon IR35 changes *Won't cut basic rate of income tax, it remains at 20% indefinitely
What a moron - the IR35 changes were one of the easy wins in the whole thing which almost certainly would have generated more growth than they cost.
@MaxPB 's calculation shows that they may have cost way more than was estimated - I would argue that they don't because tax avoidance is now into the oh boy area...
And remember it's not the tax side of IR35 that kills it for people, it's the lack of expenses which make working inside impossible...
I also don't understand how a bunch of well paid employees working 5 days a week for a company becoming "contractors" working 5 days a week for a client now able to claim expenses and not pay employer's NI will generate growth.
That was something that was already covered by the IR35 rules and the main issue was that HMRC were rubbish at enforcing it. So rather than get their own house in order and clamp down on that they decided to put all the burden onto end user employers who then took the easiest route of having no more contractors outside IR35 at all.
In 6 years I had two HMRC IR35 investigations (or rather my accountants did) and passed both by a mile. And yet as soon as the rules on who decided changed, my biggest client simply stuck everyone inside IR35. As have most of my other clients.
The upshot of this is one of three routes generally.
The contractors move overseas - so the Government loses tax revenue and the industry loses much needed expertise The contractors retire - so the Government loses tax revenue and the industry loses much needed expertise The contractors decide to become employees with another company - on much lower wages so again the Government loses revenue.
These are the practical results of blanket decisions which is what is happening because of the 2017/21 changes. As always what the theorists forget is that people will always act in a way that is best for them and their families. They have no interest in what effect that has on Government incomes and will always chose the route best suited to them. That is exactly what has happened in a lot of industries.
The fear was that with the UK out of the EU it would become very expensive. EU residents were not able to apply for it when we were in the EU.
If the visitor VAT-free shopping is ready by Christmas, I will be - well, my wife will be - keeping the UK retail sector alive!
More seriously, the difference between the Sunak and Kwarteng approaches to this one small issue, tells you all you need to know about why Kwarteng was right and Sunak wrong.
How would it have gone with people who are really struggling if the government then allows people to travel in from other countries and buy stuff they can't afford for 20% cheaper?
I imagine It's the political optics not the economics that has caused this to be reversed though I am sure someone will be along to correct t me shortly!
Cllr Ben Bradley MP @BBradley_Mans Well, that effectively renders all the political fallout, criticism, dive in the polls etc of the last few weeks entirely pointless doesn't it... Right back where we started, just far less popular than before.
This is the tone of the angry comments in the telegraph right now
We are going to find out now what it’s like for the country to be controlled by the WEF financial institutions of Blackrock,Vanguard and Statestream and their fanatical idealists.
REPLY2 REPLIES 7
What does that even mean? The Right in this country has lost its mind - and this is with their people in power! How batshit are they going to be two years into a Starmer government?
Torsten Bell @TorstenBell · 54m Why has @Jeremy_Hunt pressed the nuclear button on dumping not just most of mini-Budget but also next year's help for energy bills? Because he's desperate to get markets to cut the interest rate on government debt ASAP so @OBR_UK scale back estimates of fiscal hole to be filled👇
This was sent to Tory MPs a few moments ago from No10/11
It
- does not signal contrition - suggests PM and Chancellor here for "long term reforms" - praises the energy price cap policy without noting its been rewritten - blames global factors
Torsten Bell @TorstenBell · 54m Why has @Jeremy_Hunt pressed the nuclear button on dumping not just most of mini-Budget but also next year's help for energy bills? Because he's desperate to get markets to cut the interest rate on government debt ASAP so @OBR_UK scale back estimates of fiscal hole to be filled👇
The problem for the Tories is that while this is a big step forwards, they won't win back Con -> Lab voters until Truss is gone completely. I certainly won't be voting Tory if she's still there, even if she's got no power.
Would you consider switching back whoever replaces her? I remain to be convinced that I could.
The Party is guilty of enabling Truss and subjecting us to this lunacy. That the Party has encouraged everyone for so long to listen to fairytales is what has gotten us into this mess. I’d need to be very convinced that the grown ups are back in charge, and even then I don’t think I could forgive and forget so quickly.
The problem goes back at least to the resignation of Cameron.
The Party has now imposed two consecutive clowns on us. You think the electorate will tolerate a third?
We did rubber stamp the penultimate one, and if you add Mrs May to the mix we grudgingly endorsed her too.
These are serious times, Pete. We need serious politicans. Cameron and May were certainly that but Boris was a comedy act. It's no excuse for anybody to say 'better than Corbyn'. He should never have been put up in the first place.
Likewise Truss.
Who next? Please spare us Badenoch, Braverman and those of that ilk. The PM has to represent us all, not just the lunatics in the ConHome asylum.
What's really needed is a grand alignment of corp tax, divi tax (raised), employer NI (Binned), income tax so that the "structure above" doesn't affect take home pay.
The periods that are a long time in politics are getting shorter. To be strictly fair this a report on last Thursday's QT in The Herald's email bulletin for today, so they're about as far behind the curve as one could be.
Jeremy Hunt is poised to announce that the energy price guarantee will only remain universal *until April*
It will then become targeted and capped
Govt helped by falling gas prices
@MrHarryCole first highlighted changes this morning
That's curtains for Truss, and probably the Tories for a generation (a real one, not a Scottish one). Good luck telling middle and high earners they have to pay higher taxes to subsidise other people's energy bills while their own go through the roof.
It is the right thing to do and let's give @MoonRabbit the credit for criticising the universal nature of the energy relief
The universal nature was owing to its being an emergency response, and anything else might take too much time to design. It's not a particularly good critique, as if you're giving too much away to the well off it could be recovered through tax - and the entire thing was due for review in the spring in any event.
Fair point
Other view points are available, not just Nigel’s. The “only thing that could have been done in a hurry” argument has a few questions hanging over it, firstly how long has government been working on a plan, a think tank came up with an alternative so at what point were alternatives even considered. And why has Truss been selling it as for two winters and beyond. She’s not been shy to mention that.
The bottom line is todays change to energy plan is great economically, the gilt markets, but not great as political message and poll recovery. So unlike Nigel’s view I claim Truss government chose the path for deliberate political reasons, to hell with economics, markets, value for money, it’s regressive nature up front unless mitigated. It was a political choice to bung everyone a handout and not even target the most in need.
Well come on then somebody, argue back.
Why won’t anybody argue with me anymore. I can’t be right all the time.
BREAKING: Jeremy Hunt has taken a wrecking ball to Liz Truss's tax plans.
*Says he will "reverse almost all the tax measures announced in the growth plan" *No longer cut dividend tax *Abandon IR35 changes *Won't cut basic rate of income tax, it remains at 20% indefinitely
What a moron - the IR35 changes were one of the easy wins in the whole thing which almost certainly would have generated more growth than they cost.
@MaxPB 's calculation shows that they may have cost way more than was estimated - I would argue that they don't because tax avoidance is now into the oh boy area...
And remember it's not the tax side of IR35 that kills it for people, it's the lack of expenses which make working inside impossible...
I also don't understand how a bunch of well paid employees working 5 days a week for a company becoming "contractors" working 5 days a week for a client now able to claim expenses and not pay employer's NI will generate growth.
That was something that was already covered by the IR35 rules and the main issue was that HMRC were rubbish at enforcing it. So rather than get their own house in order and clamp down on that they decided to put all the burden onto end user employers who then took the easiest route of having no more contractors outside IR35 at all.
In 6 years I had two HMRC IR35 investigations (or rather my accountants did) and passed both by a mile. And yet as soon as the rules on who decided changed, my biggest client simply stuck everyone inside IR35. As have most of my other clients.
The upshot of this is one of three routes generally.
The contractors move overseas - so the Government loses tax revenue and the industry loses much needed expertise The contractors retire - so the Government loses tax revenue and the industry loses much needed expertise The contractors decide to become employees with another company - on much lower wages so again the Government loses revenue.
These are the practical results of blanket decisions which is what is happening because of the 2017/21 changes. As always what the theorists forget is that people will always act in a way that is best for them and their families. They have no interest in what effect that has on Government incomes and will always chose the route best suited to them. That is exactly what has happened in a lot of industries.
Get your NI paid like other employees
Your comment is gibberish.
Yes IR35 is complicated, it isn't just a case of people not wanting to pay National Insurance. In some cases it can work that way, but it is wrong to generalise about it.
1) Small State Libertarianism is dead 2) Trickle Down economics is dead 3) You can't buck the market 4) The magic money tree doesn't exist
If this becomes political orthodoxy across the main politcal parties that would be a very good thing.
The problem is that everyone is ignoring the underlying issue which is that the current ponzi scheme model of our taxation and benefits system is unsustainable. So whilst I agree with you on some of these, the small state bit is inevitable either by planned reduction or by inevitable collapse. Truss has caused huge damage by trying to force the issue in the way she did so that people believe they have to stick with the current system. They can't, not in the medium to long term.
Torsten Bell @TorstenBell · 54m Why has @Jeremy_Hunt pressed the nuclear button on dumping not just most of mini-Budget but also next year's help for energy bills? Because he's desperate to get markets to cut the interest rate on government debt ASAP so @OBR_UK scale back estimates of fiscal hole to be filled👇
What's really needed is a grand alignment of corp tax, divi tax (raised), employer NI (Binned), income tax so that the "structure above" doesn't affect take home pay.
Yep. Massive tax simplification and a widening of the base is the only long term answer.
The periods that are a long time in politics are getting shorter. To be strictly fair this a report on last Thursday's QT in The Herald's email bulletin for today, so they're about as far behind the curve as one could be.
He looks sixpence short of the full shilling, too.
The problem for the Tories is that while this is a big step forwards, they won't win back Con -> Lab voters until Truss is gone completely. I certainly won't be voting Tory if she's still there, even if she's got no power.
Would you consider switching back whoever replaces her? I remain to be convinced that I could.
The Party is guilty of enabling Truss and subjecting us to this lunacy. That the Party has encouraged everyone for so long to listen to fairytales is what has gotten us into this mess. I’d need to be very convinced that the grown ups are back in charge, and even then I don’t think I could forgive and forget so quickly.
It’s interesting that this mirrors my experience as a former Labour voter. I was actually a party member from 1998 to 2010. Any connection I felt for the party dissolved with the Corbynite takeover.
Now, under Starmer I could once again conceive of voting Labour, though if there was an election tomorrow I’d vote LD (mainly because my MP is Rupa Huq).
What's really needed is a grand alignment of corp tax, divi tax (raised), employer NI (Binned), income tax so that the "structure above" doesn't affect take home pay.
George Osborne had the chance to fold NI and IC into one and instead kicked into into the long grass. Massive missed opportunity. Should be one tax payment, with a break down of where it goes on your pay slip.
And yes I know I know, pensioners, don't pay NI, but IC. But there has to be a way to mitigate against that.
What's really needed is a grand alignment of corp tax, divi tax (raised), employer NI (Binned), income tax so that the "structure above" doesn't affect take home pay.
Corporation tax differs for multiple reasons - as does Employer NI.
What we actually need is to fix employment law so that we have a fit for the 21st century law that identifies what defines / makes someone employed and/ or what defines / makes someone self-employed.
And then create a means for self-employed people to money-box some income for rainy days.
It's worth saying that the reason why freelancers use Limited Companies is because Agencies are banned from using self-employed people following abuses in the 1970s and back then running a limited company was more expensive than being employed. Two big issues since then has been the rapid increase of Employer NI (as one of the few taxes never covered in manifesto promises) and a decrease in Corporation tax rates from the high 20%s to 19%.
One thing going unnoticed, Labour response to the omnishambles budget was reverse a lot of the proposed tax cuts, but immediately spend that money on new things. Anybody like to ask them if that is realistic?
This is the tone of the angry comments in the telegraph right now
We are going to find out now what it’s like for the country to be controlled by the WEF financial institutions of Blackrock,Vanguard and Statestream and their fanatical idealists.
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What does that even mean? The Right in this country has lost its mind - and this is with their people in power! How batshit are they going to be two years into a Starmer government?
If a bot shares a comment from a bot, you shouldn’t take it as indicative of anything much.
Torsten Bell @TorstenBell · 54m Why has @Jeremy_Hunt pressed the nuclear button on dumping not just most of mini-Budget but also next year's help for energy bills? Because he's desperate to get markets to cut the interest rate on government debt ASAP so @OBR_UK scale back estimates of fiscal hole to be filled👇
Comments
Betfair has her 1.5 to go this year. I think she's going to resign. Perhaps tomorrow.
“No estimate of the fiscal starting position is set out in this document”
this can not be a serious document
https://twitter.com/kevverage/status/1581966260451282944
Truss: 'I have all the trappings of office and yet no power.'
King: 'I know the feeling'
Energy-wise I've been trying to get to grips with an agile outgoing tariff.
If they prevaricate it is not impossible, however unlikely, for that to happen here. I don't think it will, but it's not an impossibility.
The bottom line is todays change to energy plan is great economically, the gilt markets, but not great as political message and poll recovery. So unlike Nigel’s view I claim Truss government chose the path for deliberate political reasons, to hell with economics, markets, value for money, it’s regressive nature up front unless mitigated. It was a political choice to bung everyone a handout and not even target the most in need.
The Party is guilty of enabling Truss and subjecting us to this lunacy. That the Party has encouraged everyone for so long to listen to fairytales is what has gotten us into this mess. I’d need to be very convinced that the grown ups are back in charge, and even then I don’t think I could forgive and forget so quickly.
Anyway, shouldn't you get back to running the country?
Talking my book very slightly here.
In 6 years I had two HMRC IR35 investigations (or rather my accountants did) and passed both by a mile. And yet as soon as the rules on who decided changed, my biggest client simply stuck everyone inside IR35. As have most of my other clients.
The upshot of this is one of three routes generally.
The contractors move overseas - so the Government loses tax revenue and the industry loses much needed expertise
The contractors retire - so the Government loses tax revenue and the industry loses much needed expertise
The contractors decide to become employees with another company - on much lower wages so again the Government loses revenue.
These are the practical results of blanket decisions which is what is happening because of the 2017/21 changes. As always what the theorists forget is that people will always act in a way that is best for them and their families. They have no interest in what effect that has on Government incomes and will always chose the route best suited to them. That is exactly what has happened in a lot of industries.
So tl;dr - stuff the membership, they had their chance and royally screwed their own party and the country. Just do what is the best for the country for a change.
Nonetheless with the external fiscal issues still in play and defaults on personal borrowing going through the roof, the potential for negative equity and inflation outstripping wages, the Conservatives may still struggle to make most seats.
The British people rightly want stability, which is why we are addressing the serious challenges we face in worsening economic conditions.
We have taken action to chart a new course for growth that supports and delivers for people across the United Kingdom.
https://twitter.com/trussliz/status/1581966535836725250
The British people rightly want stability, which is why we are addressing the serious challenges we face in worsening economic conditions.
We have taken action to chart a new course for growth that supports and delivers for people across the United Kingdom.
(to Starmer)
3 months to get £40,000 for the pension
3 months to earn enough to live on.
Then stop until April rolls round and then start again.
I haven't bet on anything. However I find it difficult to understand how Liz Truss can ever emerge in politics with any credibility ever again. That doesn't mean that she won't try, as she seems to be in denial of the reality of her predicament; but I agree with an earlier comment about this being surely the single biggest political humiliation in recent British political history.
Unfortunately I suspect it has an almighty battle ahead of it because, absent a moment of extreme group clarity, I doubt its members will elect a sane LOTO after the party loses power. It will take time and patience (and decent folk staying the course) to steer it back. I have confidence it can do it - if Labour managed it after Corbyn then anyone can.
🍿🍿🍿
The Party has now imposed two consecutive clowns on us. You think the electorate will tolerate a third?
@breeallegretti
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17m
NEW: Liz Truss’s official spokesman says she will not resign as prime minister.
He insists Truss - not chancellor Jeremy Hunt - is running the country.
The end client doesn't need me long term - they need me to install and customise some software, confirm it works and then leave. They also only want me because I spent last year doing the same job at a different company who also only wanted me for that specific self-contained piece of work.
If the Tory's can't convince her to do that then we should have an election.
😨
Torsten Bell
@TorstenBell
·
54m
Why has @Jeremy_Hunt pressed the nuclear button on dumping not just most of mini-Budget but also next year's help for energy bills? Because he's desperate to get markets to cut the interest rate on government debt ASAP so
@OBR_UK scale back estimates of fiscal hole to be filled👇
https://twitter.com/TorstenBell/status/1581956183572611074
You would be directly proving the "fool me once..." maxim.
My inside IR35 rate is £1000 a day - outside I charge £700...
Inside if you want meetings you need to sort that out including paying all costs (hotel and train fares) direct to the hotel / train company. Otherwise your staff need to come and see me - I'm happy to recommend suitable local hotels (the UK bank I'm starting at will be doing the latter next week because they can't do the former)..
Outside - not a problem I can expense the costs so I will just bill them in addition at cost.
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Particularly public sector pay.
Good luck.
PM Truss has a vague echo of 'the King is tired'.
https://www.youtube.com/watch?v=BM6kMHH-G64
Though I'd take Tywin Lannister over Jeremy Hunt.
We are going to find out now what it’s like for the country to be controlled by the WEF financial institutions of Blackrock,Vanguard and Statestream and their fanatical idealists.
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I have accepted being inside IR35 because I get other benefits from being able to control my working and also because I am too old to think about going overseas again. But right now projects I am working on are stopping because of a lack of experienced people. That impacts you so you should really be concerned about how Government policy in this area is affecting the nations finances and ability to operate. Two years ago I was one of about 40 people doing my specific job in the UK. Now I am one of about 25.
I imagine It's the political optics not the economics that has caused this to be reversed though I am sure someone will be along to correct t me shortly!
Cllr Ben Bradley MP
@BBradley_Mans
Well, that effectively renders all the political fallout, criticism, dive in the polls etc of the last few weeks entirely pointless doesn't it... Right back where we started, just far less popular than before.
It
- does not signal contrition
- suggests PM and Chancellor here for "long term reforms"
- praises the energy price cap policy without noting its been rewritten
- blames global factors
https://twitter.com/SamCoatesSky/status/1581970922616999939
Which is a million years away for this government and probably three chancellor's worth of u-turns.
It's better to be where you were, and less popular, then where you were a moment a car and about as popular as Basil II in Bulgaria.
Likewise Truss.
Who next? Please spare us Badenoch, Braverman and those of that ilk. The PM has to represent us all, not just the lunatics in the ConHome asylum.
To be strictly fair this a report on last Thursday's QT in The Herald's email bulletin for today, so they're about as far behind the curve as one could be.
Why won’t anybody argue with me anymore. I can’t be right all the time.
He looked a bit lonely.
Now, under Starmer I could once again conceive of voting Labour, though if there was an election tomorrow I’d vote LD (mainly because my MP is Rupa Huq).
And yes I know I know, pensioners, don't pay NI, but IC. But there has to be a way to mitigate against that.
What we actually need is to fix employment law so that we have a fit for the 21st century law that identifies what defines / makes someone employed and/ or what defines / makes someone self-employed.
And then create a means for self-employed people to money-box some income for rainy days.
It's worth saying that the reason why freelancers use Limited Companies is because Agencies are banned from using self-employed people following abuses in the 1970s and back then running a limited company was more expensive than being employed. Two big issues since then has been the rapid increase of Employer NI (as one of the few taxes never covered in manifesto promises) and a decrease in Corporation tax rates from the high 20%s to 19%.
Someone shoved a whole heap of stuff through the letter slot, and not easy to get it open.
Go wash your mouth out, young man.
OK, this is just silly - the whole point of this paper was surely to set out the fiscal rules, not to tell us again that you “would” set them out
this report simply ducks the fiscal deficit question - it completely ignores it!
https://twitter.com/kevverage/status/1581970648791777280