The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
Obviously teh workers will pay for it , private companies do not have a magic money treee like the public sector. Means either employing less people or no wage rises till they make up the losses. Economics for idiots.
Business employing fewer people and increasing efficiency is actually a good thing for our economy if you look at it from a macro perspective.
So long as:
1. Efficiency actually rises, rather than the company contracting or failing to expand overall. 2. The changes don’t lead to an increase in unemployment.
There is huge unfulfilled demand for staff in several sectors, including health care, care and construction. Now the reality is a lot of people don't want those jobs but I think we are a long way from significant unemployment regardless.
NHS employment is at an all time high (I believe) - 1.3M FTE and up 30% since 2009.
Have we all got that much sicker over time? What are all those people doing?
Dealing with us getting older. And older, and older.
It's a contributory factor, but a small one. This is one of the few things I know quite a bit about.
Most assessments of UK health spending find that increased chronic conditions and better technology (keeping people alive) are the reasons it's increasing so much. England's demographics are actually quite balanced due to immigration, yet their spending has increased just as much as ours has in Scotland.
Most demographic-linked spending in the UK is made in the last 12 months or so of life. You-only-die-once, so that doesn't matter too much except in the 2030s when we have lots of Boomers reaching their 80s. But a small blip, relatively.
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
It’s all relative. Say you’re a business with 100 of sales, total costs of 85 of which payroll is say 40. That’s quite typical. A 2% employer NI rise would cost just over 0.5, after tax deductions. When the last government raised CT to 25% that was closer to 1 on those numbers, straight to the bottom line.
also many organisations cannot just put up prices to compensate - charities for instance are going to have to shed staff because of the NIC increase
Does that mean they were all adding staff when NI went down?
We’ve had a decade of average wages rising more slowly than RPI. Wage inflation has not been the problem for the economy.
Nobody likes tax to go up, but when the alternative is cutting already crumbling public services further to the bone and continuing on the long slow journey to looking like a developing country, something’s got to give.
I’d have raised VAT to 23% and reversed the employee NI cuts, but those were off the table in the manifesto. I’d also cut CT back to 19%.
public sector efficiency is very poor atm - you only have to try and contact HMRC to know that. It cannot not be an option to look at improving this through hard choices rather than take the easier way of raising taxes on the more efficient private sector
Is that an efficiency problem? Or one of Tory stupidity?
Austerity saw them dramatically slash funding for HMRC. That means less tax inspectors - the inability to speak to anyone without a lengthy hold and *that* hold music.
A government in need of tax revenues could hire tax inspectors to go and recoup it. Plenty of stories out there of plenty of big tax monies not flowing to HM Treasury. But as the people getting away are Tory friends and patrons, there wasn't the political will.
The markets briefings I have seen show a very big fiscal gap from the March 2024 budget. Extra taxes and borrowings in mid to high tens of billions £ are needed if the government maintains departmental spending at the same rate as now.
It seems Rachel Reeves does have a point about Jeremy Hunt.
As I have said the finances have not recovered since Covid and Ukraine and the inflationary burst that gave us. The level of borrowing is far too high. The situation was unsustainable and Hunt was not exactly giving us way signs as to how we get out of it. It is one of the main reasons I became disenchanted with the last government.
The implication is Jeremy Hunt wasn't entirely honest in the numbers he provided at the last budget. This I think is the root of the spat about whether to release OBR analysis on the numbers they were provided with
On your more important, yep. It's likely taxes and borrowing will both go up AND government spending squeezed. It's not a great situation to be in.
He wasn't dishonest, he simply chose not to address or even acknowledge the underlying problems and was seeking a gradualist way out. In the post 2010 period that largely worked but its a long haul and requires time as well as a discipline, coherence, control and focus that the previous government sorely lacked.
This government has the time. They have the majority. Do they have the other characteristics required? We will find out today.
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
Obviously teh workers will pay for it , private companies do not have a magic money treee like the public sector. Means either employing less people or no wage rises till they make up the losses. Economics for idiots.
Business employing fewer people and increasing efficiency is actually a good thing for our economy if you look at it from a macro perspective.
So long as:
1. Efficiency actually rises, rather than the company contracting or failing to expand overall. 2. The changes don’t lead to an increase in unemployment.
There is huge unfulfilled demand for staff in several sectors, including health care, care and construction. Now the reality is a lot of people don't want those jobs but I think we are a long way from significant unemployment regardless.
NHS employment is at an all time high (I believe) - 1.3M FTE and up 30% since 2009.
Have we all got that much sicker over time? What are all those people doing?
Dealing with us getting older. And older, and older.
That, and sicker. When I started in Leicester we had 23 500 with diabetes in the patch, now it's 92 000. Some of that is better diagnosis (though we still see late presentations with vascular disease etc), but the majority is a genuine increase, and it is occurring in all ethnic groups, albeit particularly frequent in British South Asians. The population of the area has increased by about 10% over that time.
Do you think that Semaglutide, in its various forms, is the wonder drug that some make it out to be?
On topic, the joy of politics is that the counterfactual can turn into the factual.
Truss was right.
We need economic growth and we need it consistently over a sustained period. We have cut and shrunk, shrunk and cut our economy over a long period, with the biggest contraction in the last decade when we were at our most vulnerable.
Truss was wrong in that she thought the way to growth was slash taxes and spending, but she also wanted investment. Borrowing to invest - and the delivering a return on that investment - is NOT bad economics. It is capitalism. And when the state borrows to invest in capacity, skills and infrastructure it has a long-term benefit.
At the same time, we need to cut the crap. We had dug ourselves into the ground when it comes to digging into the ground. We spend hundreds of millions on reports and surveys and impact assessments *without actually building anything*. The Tories gamed house planning so that the developers always beat the council. Not that the developers built what was needed. Do the same but *for the state*. We need to build this, it's going here, please accept this mitigation (or don't), start building. For housing we must have local people involved as its their communities being expanded, but the answer cannot just be "no".
Sadly I expect nothing from the Chancellor to drive growth, to drive investment, to try and course correct the UK so that we're comparable with France or Germany or Spain or the Netherlands or any of the rest of European nations who aren't as crushed by cuts as we are. Unless she pulls a massive rabbit out of the hat, Labour have already failed.
You're still assuming that every 'investment' generates a positive return.
That's not true in betting, that's not true in business and most of all its not true when government does it.
And yet if you look at successful economies internationally they invest a lot more than we do, typically including state investment.
On topic, the joy of politics is that the counterfactual can turn into the factual.
Truss was right.
We need economic growth and we need it consistently over a sustained period. We have cut and shrunk, shrunk and cut our economy over a long period, with the biggest contraction in the last decade when we were at our most vulnerable.
Truss was wrong in that she thought the way to growth was slash taxes and spending, but she also wanted investment. Borrowing to invest - and the delivering a return on that investment - is NOT bad economics. It is capitalism. And when the state borrows to invest in capacity, skills and infrastructure it has a long-term benefit.
At the same time, we need to cut the crap. We had dug ourselves into the ground when it comes to digging into the ground. We spend hundreds of millions on reports and surveys and impact assessments *without actually building anything*. The Tories gamed house planning so that the developers always beat the council. Not that the developers built what was needed. Do the same but *for the state*. We need to build this, it's going here, please accept this mitigation (or don't), start building. For housing we must have local people involved as its their communities being expanded, but the answer cannot just be "no".
Sadly I expect nothing from the Chancellor to drive growth, to drive investment, to try and course correct the UK so that we're comparable with France or Germany or Spain or the Netherlands or any of the rest of European nations who aren't as crushed by cuts as we are. Unless she pulls a massive rabbit out of the hat, Labour have already failed.
You're still assuming that every 'investment' generates a positive return.
That's not true in betting, that's not true in business and most of all its not true when government does it.
And yet if you look at successful economies internationally they invest a lot more than we do, typically including state investment.
We have a weird phobia of state investment here.
Any investment - it's across the private sector too. Most other countries have one or the other, or both. We have none.
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
It’s all relative. Say you’re a business with 100 of sales, total costs of 85 of which payroll is say 40. That’s quite typical. A 2% employer NI rise would cost just over 0.5, after tax deductions. When the last government raised CT to 25% that was closer to 1 on those numbers, straight to the bottom line.
also many organisations cannot just put up prices to compensate - charities for instance are going to have to shed staff because of the NIC increase
Does that mean they were all adding staff when NI went down?
We’ve had a decade of average wages rising more slowly than RPI. Wage inflation has not been the problem for the economy.
Nobody likes tax to go up, but when the alternative is cutting already crumbling public services further to the bone and continuing on the long slow journey to looking like a developing country, something’s got to give.
I’d have raised VAT to 23% and reversed the employee NI cuts, but those were off the table in the manifesto. I’d also cut CT back to 19%.
public sector efficiency is very poor atm - you only have to try and contact HMRC to know that. It cannot not be an option to look at improving this through hard choices rather than take the easier way of raising taxes on the more efficient private sector
OK then, what are those hard choices? Bear in mind that they are choices so hard that Osborne, Hammond, Sunak and Hunt didn't take them.
A fair bit of the productivity problem is that people are spending so much effort fighting IT, heating systems, roofs that leak and so on, that there's less capacity to deal with the main job.
People rightly lament the British tendency to throw bodies at problems, rather than investing to do them more efficiently. What they often miss is that the government is the worst culprit, and the government is that way because the electorate wants it that way.
What are people watching for in particular in the budget? I think overall it will be considerably less lurid than a compendium of the last two month's articles from the Telegraph.
Me:
- Local Council funding. - All the possible changes around lifetime gifts, inheritance, taxation of estates & trusts, exit tax as per other countries etc. - Where things can be significantly improved by minor adjustments, eg the £100k tax level cliff edge, make tax breaks less on large tonka-trucks than small tonka-trucks - which the last Govt ran away from. - Excise Duty on fuel, which I think will be in the range +6.7% to +10%. - VED, and possibly tax reliefs around electric vehicles. - The things in the small print undergrowth. - Shifts in funding around Justice and the Prison System towards clearing backlogs, and rehabilitation.
Changes around transport, especially around things changing basic priorities of Highways Authorities to get rid of "car-brain". Various quite nerdy but important transport infra things, like secure mobility aid and cycle parking (ie hangars) being a mandatory part of residents' parking schemes especially in areas without garages.
The measure that would have the largest potential impact on me would be a shift of Council Tax liability from T to LL, which in my area is potentially eg £1800 pa changing on a property that rents for £9000 pa. It's a detail in the Proportional Property Tax proposals. Less significant in the wealthier areas where relatively less Council Tax is usually paid.
On topic, the joy of politics is that the counterfactual can turn into the factual.
Truss was right.
We need economic growth and we need it consistently over a sustained period. We have cut and shrunk, shrunk and cut our economy over a long period, with the biggest contraction in the last decade when we were at our most vulnerable.
Truss was wrong in that she thought the way to growth was slash taxes and spending, but she also wanted investment. Borrowing to invest - and the delivering a return on that investment - is NOT bad economics. It is capitalism. And when the state borrows to invest in capacity, skills and infrastructure it has a long-term benefit.
At the same time, we need to cut the crap. We had dug ourselves into the ground when it comes to digging into the ground. We spend hundreds of millions on reports and surveys and impact assessments *without actually building anything*. The Tories gamed house planning so that the developers always beat the council. Not that the developers built what was needed. Do the same but *for the state*. We need to build this, it's going here, please accept this mitigation (or don't), start building. For housing we must have local people involved as its their communities being expanded, but the answer cannot just be "no".
Sadly I expect nothing from the Chancellor to drive growth, to drive investment, to try and course correct the UK so that we're comparable with France or Germany or Spain or the Netherlands or any of the rest of European nations who aren't as crushed by cuts as we are. Unless she pulls a massive rabbit out of the hat, Labour have already failed.
You're still assuming that every 'investment' generates a positive return.
That's not true in betting, that's not true in business and most of all its not true when government does it.
And yet if you look at successful economies internationally they invest a lot more than we do, typically including state investment.
We have a weird phobia of state investment here.
It is bizarre. Silicon Valley would not exist without massive state investment.
I wonder if the poor WASPI women will get their compensation
Not sure anyone should be compensated for a grotesque inability to pay attention over a multi year span of time.
I feel I am betraying the sisterhood by not supporting the WASPIs. But I was fully aware of the proposed changes. I remember mentioning the proposals to other mothers at my son's pre-school playgroup to be met with blank faces and mutterings of "Don't know anything about that" and "So what?" I think the problem is that many regard pensions is the most boring topic until they get to mid 50s. Then their attitude changes.
Mind you, if WASPIs get compensation, I'd be happy to accept it.
Yes, a super important area but we tend to just assume it will all work out. Sometimes the more important the less we want to dwell on things, lest they are too big to solve!
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
Obviously teh workers will pay for it , private companies do not have a magic money treee like the public sector. Means either employing less people or no wage rises till they make up the losses. Economics for idiots.
Business employing fewer people and increasing efficiency is actually a good thing for our economy if you look at it from a macro perspective.
So long as:
1. Efficiency actually rises, rather than the company contracting or failing to expand overall. 2. The changes don’t lead to an increase in unemployment.
There is huge unfulfilled demand for staff in several sectors, including health care, care and construction. Now the reality is a lot of people don't want those jobs but I think we are a long way from significant unemployment regardless.
NHS employment is at an all time high (I believe) - 1.3M FTE and up 30% since 2009.
Have we all got that much sicker over time? What are all those people doing?
Dealing with us getting older. And older, and older.
It's a contributory factor, but a small one. This is one of the few things I know quite a bit about.
Most assessments of UK health spending find that increased chronic conditions and better technology (keeping people alive) are the reasons it's increasing so much. England's demographics are actually quite balanced due to immigration, yet their spending has increased just as much as ours has in Scotland.
Most demographic-linked spending in the UK is made in the last 12 months or so of life. You-only-die-once, so that doesn't matter too much except in the 2030s when we have lots of Boomers reaching their 80s. But a small blip, relatively.
Isn't 'keeping people alive' self-evidently part of people getting older?
Still, let's look on the bright side.
'From stalling to falling. Life expectancy decline hits economy and workforce'
On topic, the joy of politics is that the counterfactual can turn into the factual.
Truss was right.
We need economic growth and we need it consistently over a sustained period. We have cut and shrunk, shrunk and cut our economy over a long period, with the biggest contraction in the last decade when we were at our most vulnerable.
Truss was wrong in that she thought the way to growth was slash taxes and spending, but she also wanted investment. Borrowing to invest - and the delivering a return on that investment - is NOT bad economics. It is capitalism. And when the state borrows to invest in capacity, skills and infrastructure it has a long-term benefit.
At the same time, we need to cut the crap. We had dug ourselves into the ground when it comes to digging into the ground. We spend hundreds of millions on reports and surveys and impact assessments *without actually building anything*. The Tories gamed house planning so that the developers always beat the council. Not that the developers built what was needed. Do the same but *for the state*. We need to build this, it's going here, please accept this mitigation (or don't), start building. For housing we must have local people involved as its their communities being expanded, but the answer cannot just be "no".
Sadly I expect nothing from the Chancellor to drive growth, to drive investment, to try and course correct the UK so that we're comparable with France or Germany or Spain or the Netherlands or any of the rest of European nations who aren't as crushed by cuts as we are. Unless she pulls a massive rabbit out of the hat, Labour have already failed.
You're still assuming that every 'investment' generates a positive return.
That's not true in betting, that's not true in business and most of all its not true when government does it.
And yet if you look at successful economies internationally they invest a lot more than we do, typically including state investment.
We have a weird phobia of state investment here.
Perhaps other countries are better at the state investment than the land of nimbyism.
But if we want more state investment I suggest we build some more roads - actually one of the things this country can do pretty well.
On topic, the joy of politics is that the counterfactual can turn into the factual.
Truss was right.
We need economic growth and we need it consistently over a sustained period. We have cut and shrunk, shrunk and cut our economy over a long period, with the biggest contraction in the last decade when we were at our most vulnerable.
Truss was wrong in that she thought the way to growth was slash taxes and spending, but she also wanted investment. Borrowing to invest - and the delivering a return on that investment - is NOT bad economics. It is capitalism. And when the state borrows to invest in capacity, skills and infrastructure it has a long-term benefit.
At the same time, we need to cut the crap. We had dug ourselves into the ground when it comes to digging into the ground. We spend hundreds of millions on reports and surveys and impact assessments *without actually building anything*. The Tories gamed house planning so that the developers always beat the council. Not that the developers built what was needed. Do the same but *for the state*. We need to build this, it's going here, please accept this mitigation (or don't), start building. For housing we must have local people involved as its their communities being expanded, but the answer cannot just be "no".
Sadly I expect nothing from the Chancellor to drive growth, to drive investment, to try and course correct the UK so that we're comparable with France or Germany or Spain or the Netherlands or any of the rest of European nations who aren't as crushed by cuts as we are. Unless she pulls a massive rabbit out of the hat, Labour have already failed.
You're still assuming that every 'investment' generates a positive return.
That's not true in betting, that's not true in business and most of all its not true when government does it.
And yet if you look at successful economies internationally they invest a lot more than we do, typically including state investment.
We have a weird phobia of state investment here.
It is bizarre. Silicon Valley would not exist without massive state investment.
Apparently linked to bad investment decision here in the 60s and 70s. Hopefully out of the memory of our political leaders soon enough and we can reset.
What are people watching for in particular in the budget? I think overall it will be considerably less lurid than a compendium of the last two month's articles from the Telegraph.
Me:
- Local Council funding. - All the possible changes around lifetime gifts, inheritance, taxation of estates & trusts, exit tax as per other countries etc. - Where things can be significantly improved by minor adjustments, eg the £100k tax level cliff edge, make tax breaks less on large tonka-trucks than small tonka-trucks - which the last Govt ran away from. - Excise Duty on fuel, which I think will be in the range +6.7% to +10%. - VED, and possibly tax reliefs around electric vehicles. - The things in the small print undergrowth.
Changes around transport, especially around things changing basic priorities of Highways Authorities to get rid of "car-brain". Various quite nerdy but important transport infra things, like secure mobility aid and cycle parking (ie hangars) being a mandatory part of residents' parking schemes especially in areas without garages.
The measure that would have the largest potential impact on me would be a shift of Council Tax liability from T to LL, which in my area is potentially eg £1800 pa changing on a property that rents for £9000 pa. It's a detail in the Proportional Property Tax proposals. Less significant in the wealthier areas where relatively less Council Tax is usually paid.
Courts and other legal funding. A relatively small amount would go a long way. The Coalition messed up and it's not been corrected.
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
It’s all relative. Say you’re a business with 100 of sales, total costs of 85 of which payroll is say 40. That’s quite typical. A 2% employer NI rise would cost just over 0.5, after tax deductions. When the last government raised CT to 25% that was closer to 1 on those numbers, straight to the bottom line.
also many organisations cannot just put up prices to compensate - charities for instance are going to have to shed staff because of the NIC increase
Does that mean they were all adding staff when NI went down?
We’ve had a decade of average wages rising more slowly than RPI. Wage inflation has not been the problem for the economy.
Nobody likes tax to go up, but when the alternative is cutting already crumbling public services further to the bone and continuing on the long slow journey to looking like a developing country, something’s got to give.
I’d have raised VAT to 23% and reversed the employee NI cuts, but those were off the table in the manifesto. I’d also cut CT back to 19%.
public sector efficiency is very poor atm - you only have to try and contact HMRC to know that. It cannot not be an option to look at improving this through hard choices rather than take the easier way of raising taxes on the more efficient private sector
OK then, what are those hard choices? Bear in mind that they are choices so hard that Osborne, Hammond, Sunak and Hunt didn't take them.
A fair bit of the productivity problem is that people are spending so much effort fighting IT, heating systems, roofs that leak and so on, that there's less capacity to deal with the main job.
People rightly lament the British tendency to throw bodies at problems, rather than investing to do them more efficiently. What they often miss is that the government is the worst culprit, and the government is that way because the electorate wants it that way.
Yep, we are to blame. Much stronger leaders than we have to get us to change.
What are people watching for in particular in the budget? I think overall it will be considerably less lurid than a compendium of the last two month's articles from the Telegraph.
Me:
- Local Council funding. - All the possible changes around lifetime gifts, inheritance, taxation of estates & trusts, exit tax as per other countries etc. - Where things can be significantly improved by minor adjustments, eg the £100k tax level cliff edge, make tax breaks less on large tonka-trucks than small tonka-trucks - which the last Govt ran away from. - Excise Duty on fuel, which I think will be in the range +6.7% to +10%. - VED, and possibly tax reliefs around electric vehicles. - The things in the small print undergrowth.
Changes around transport, especially around things changing basic priorities of Highways Authorities to get rid of "car-brain". Various quite nerdy but important transport infra things, like secure mobility aid and cycle parking (ie hangars) being a mandatory part of residents' parking schemes especially in areas without garages.
The measure that would have the largest potential impact on me would be a shift of Council Tax liability from T to LL, which in my area is potentially eg £1800 pa changing on a property that rents for £9000 pa. It's a detail in the Proportional Property Tax proposals. Less significant in the wealthier areas where relatively less Council Tax is usually paid.
Courts and other legal funding. A relatively small amount would go a long way. The Coalition messed up and it's not been corrected.
What are people watching for in particular in the budget? I think overall it will be considerably less lurid than a compendium of the last two month's articles from the Telegraph.
Me:
- Local Council funding. - All the possible changes around lifetime gifts, inheritance, taxation of estates & trusts, exit tax as per other countries etc. - Where things can be significantly improved by minor adjustments, eg the £100k tax level cliff edge, make tax breaks less on large tonka-trucks than small tonka-trucks - which the last Govt ran away from. - Excise Duty on fuel, which I think will be in the range +6.7% to +10%. - VED, and possibly tax reliefs around electric vehicles. - The things in the small print undergrowth.
Changes around transport, especially around things changing basic priorities of Highways Authorities to get rid of "car-brain". Various quite nerdy but important transport infra things, like secure mobility aid and cycle parking (ie hangars) being a mandatory part of residents' parking schemes especially in areas without garages.
The measure that would have the largest potential impact on me would be a shift of Council Tax liability from T to LL, which in my area is potentially eg £1800 pa changing on a property that rents for £9000 pa. It's a detail in the Proportional Property Tax proposals. Less significant in the wealthier areas where relatively less Council Tax is usually paid.
On Landlord paying council tax that was always the case for most rental property in Northern Ireland.
Going to cause problems here though because it shifts a legal requirement from the tenant to the landlord and increasing the rent to cover the new bill is going to be awkward especially if the tenant doesn't currently pay full council tax.
The markets briefings I have seen show a very big fiscal gap from the March 2024 budget. Extra taxes and borrowings in mid to high tens of billions £ are needed if the government maintains departmental spending at the same rate as now.
It seems Rachel Reeves does have a point about Jeremy Hunt.
As I have said the finances have not recovered since Covid and Ukraine and the inflationary burst that gave us. The level of borrowing is far too high. The situation was unsustainable and Hunt was not exactly giving us way signs as to how we get out of it. It is one of the main reasons I became disenchanted with the last government.
The implication is Jeremy Hunt wasn't entirely honest in the numbers he provided at the last budget. This I think is the root of the spat about whether to release OBR analysis on the numbers they were provided with
On your more important, yep. It's likely taxes and borrowing will both go up AND government spending squeezed. It's not a great situation to be in.
He wasn't dishonest, he simply chose not to address or even acknowledge the underlying problems and was seeking a gradualist way out. In the post 2010 period that largely worked but its a long haul and requires time as well as a discipline, coherence, control and focus that the previous government sorely lacked.
This government has the time. They have the majority. Do they have the other characteristics required? We will find out today.
Hunt's projections were based on entirely unrealistic assumptions of massive real terms cuts to spending for unprotected departments. Some of the tax assumptions - eg fuel duty increases that the government kept canceling when it came to it - were quite iffy too. I'd call that dishonest.
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
It’s all relative. Say you’re a business with 100 of sales, total costs of 85 of which payroll is say 40. That’s quite typical. A 2% employer NI rise would cost just over 0.5, after tax deductions. When the last government raised CT to 25% that was closer to 1 on those numbers, straight to the bottom line.
also many organisations cannot just put up prices to compensate - charities for instance are going to have to shed staff because of the NIC increase
Does that mean they were all adding staff when NI went down?
We’ve had a decade of average wages rising more slowly than RPI. Wage inflation has not been the problem for the economy.
Nobody likes tax to go up, but when the alternative is cutting already crumbling public services further to the bone and continuing on the long slow journey to looking like a developing country, something’s got to give.
I’d have raised VAT to 23% and reversed the employee NI cuts, but those were off the table in the manifesto. I’d also cut CT back to 19%.
public sector efficiency is very poor atm - you only have to try and contact HMRC to know that. It cannot not be an option to look at improving this through hard choices rather than take the easier way of raising taxes on the more efficient private sector
Is that an efficiency problem? Or one of Tory stupidity?
Austerity saw them dramatically slash funding for HMRC. That means less tax inspectors - the inability to speak to anyone without a lengthy hold and *that* hold music.
A government in need of tax revenues could hire tax inspectors to go and recoup it. Plenty of stories out there of plenty of big tax monies not flowing to HM Treasury. But as the people getting away are Tory friends and patrons, there wasn't the political will.
The IRS is similar - it's just employed a lot more workers but they will be targeting easier tax avoiders not the large ones who can afford proper legal advice.
What are people watching for in particular in the budget? I think overall it will be considerably less lurid than a compendium of the last two month's articles from the Telegraph.
Me:
- Local Council funding. - All the possible changes around lifetime gifts, inheritance, taxation of estates & trusts, exit tax as per other countries etc. - Where things can be significantly improved by minor adjustments, eg the £100k tax level cliff edge, make tax breaks less on large tonka-trucks than small tonka-trucks - which the last Govt ran away from. - Excise Duty on fuel, which I think will be in the range +6.7% to +10%. - VED, and possibly tax reliefs around electric vehicles. - The things in the small print undergrowth.
Changes around transport, especially around things changing basic priorities of Highways Authorities to get rid of "car-brain". Various quite nerdy but important transport infra things, like secure mobility aid and cycle parking (ie hangars) being a mandatory part of residents' parking schemes especially in areas without garages.
The measure that would have the largest potential impact on me would be a shift of Council Tax liability from T to LL, which in my area is potentially eg £1800 pa changing on a property that rents for £9000 pa. It's a detail in the Proportional Property Tax proposals. Less significant in the wealthier areas where relatively less Council Tax is usually paid.
Courts and other legal funding. A relatively small amount would go a long way. The Coalition messed up and it's not been corrected.
Does that mean I get a pay rise? Whoopee.
This may be controversial, but some spending going to lawyers is worth it...
The markets briefings I have seen show a very big fiscal gap from the March 2024 budget. Extra taxes and borrowings in mid to high tens of billions £ are needed if the government maintains departmental spending at the same rate as now.
It seems Rachel Reeves does have a point about Jeremy Hunt.
As I have said the finances have not recovered since Covid and Ukraine and the inflationary burst that gave us. The level of borrowing is far too high. The situation was unsustainable and Hunt was not exactly giving us way signs as to how we get out of it. It is one of the main reasons I became disenchanted with the last government.
The implication is Jeremy Hunt wasn't entirely honest in the numbers he provided at the last budget. This I think is the root of the spat about whether to release OBR analysis on the numbers they were provided with
On your more important, yep. It's likely taxes and borrowing will both go up AND government spending squeezed. It's not a great situation to be in.
He wasn't dishonest, he simply chose not to address or even acknowledge the underlying problems and was seeking a gradualist way out. In the post 2010 period that largely worked but its a long haul and requires time as well as a discipline, coherence, control and focus that the previous government sorely lacked.
This government has the time. They have the majority. Do they have the other characteristics required? We will find out today.
The budget projections were calculated by the OBR on numbers provided by the Treasury, which Jeremy Hunt based his budget on. OBR has no discretion on those numbers. OBR will now publish an analysis of the data provided to them by the Treasury. Jeremy Hunt is trying to stop publication of this analysis. The head of OBR says, pretty baldly, it's none of his business any more.
Independent analysis shows a big underestimation at the time of the last budget of the funding to stay still (I've seen between £40 billion and £80 billion). The above indicates issues with the numbers provided by the Treasury. Not clear if OBR were suspicious of them at the time, but Hunt definitely doesn't want them looked into now.
The markets briefings I have seen show a very big fiscal gap from the March 2024 budget. Extra taxes and borrowings in mid to high tens of billions £ are needed if the government maintains departmental spending at the same rate as now.
It seems Rachel Reeves does have a point about Jeremy Hunt.
As I have said the finances have not recovered since Covid and Ukraine and the inflationary burst that gave us. The level of borrowing is far too high. The situation was unsustainable and Hunt was not exactly giving us way signs as to how we get out of it. It is one of the main reasons I became disenchanted with the last government.
The implication is Jeremy Hunt wasn't entirely honest in the numbers he provided at the last budget. This I think is the root of the spat about whether to release OBR analysis on the numbers they were provided with
On your more important, yep. It's likely taxes and borrowing will both go up AND government spending squeezed. It's not a great situation to be in.
He wasn't dishonest, he simply chose not to address or even acknowledge the underlying problems and was seeking a gradualist way out. In the post 2010 period that largely worked but its a long haul and requires time as well as a discipline, coherence, control and focus that the previous government sorely lacked.
This government has the time. They have the majority. Do they have the other characteristics required? We will find out today.
Hunt's projections were based on entirely unrealistic assumptions of massive real terms cuts to spending for unprotected departments. Some of the tax assumptions - eg fuel duty increases that the government kept canceling when it came to it - were quite iffy too. I'd call that dishonest.
Its Malmesbury's rule of red tape. Govts create a rule book and then spend a load of energy trying to get year 5 forecasts within their arbitrary rules and forget about actually managing the economy, growth and investment.
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
It’s all relative. Say you’re a business with 100 of sales, total costs of 85 of which payroll is say 40. That’s quite typical. A 2% employer NI rise would cost just over 0.5, after tax deductions. When the last government raised CT to 25% that was closer to 1 on those numbers, straight to the bottom line.
also many organisations cannot just put up prices to compensate - charities for instance are going to have to shed staff because of the NIC increase
Does that mean they were all adding staff when NI went down?
We’ve had a decade of average wages rising more slowly than RPI. Wage inflation has not been the problem for the economy.
Nobody likes tax to go up, but when the alternative is cutting already crumbling public services further to the bone and continuing on the long slow journey to looking like a developing country, something’s got to give.
I’d have raised VAT to 23% and reversed the employee NI cuts, but those were off the table in the manifesto. I’d also cut CT back to 19%.
public sector efficiency is very poor atm - you only have to try and contact HMRC to know that. It cannot not be an option to look at improving this through hard choices rather than take the easier way of raising taxes on the more efficient private sector
That's efficacy. Efficiency is efficacy divided by input. HMRC has lost a lot of staff over the years, IIRC,
so where is the highest tax burden ad borrowing since WW2 being spent? Its obviously not being efficiently spent so why crave for more spending until this answer is known
Old people and interest payments. There is no great mystery about it.
On topic, the joy of politics is that the counterfactual can turn into the factual.
Truss was right.
We need economic growth and we need it consistently over a sustained period. We have cut and shrunk, shrunk and cut our economy over a long period, with the biggest contraction in the last decade when we were at our most vulnerable.
Truss was wrong in that she thought the way to growth was slash taxes and spending, but she also wanted investment. Borrowing to invest - and the delivering a return on that investment - is NOT bad economics. It is capitalism. And when the state borrows to invest in capacity, skills and infrastructure it has a long-term benefit.
At the same time, we need to cut the crap. We had dug ourselves into the ground when it comes to digging into the ground. We spend hundreds of millions on reports and surveys and impact assessments *without actually building anything*. The Tories gamed house planning so that the developers always beat the council. Not that the developers built what was needed. Do the same but *for the state*. We need to build this, it's going here, please accept this mitigation (or don't), start building. For housing we must have local people involved as its their communities being expanded, but the answer cannot just be "no".
Sadly I expect nothing from the Chancellor to drive growth, to drive investment, to try and course correct the UK so that we're comparable with France or Germany or Spain or the Netherlands or any of the rest of European nations who aren't as crushed by cuts as we are. Unless she pulls a massive rabbit out of the hat, Labour have already failed.
You're still assuming that every 'investment' generates a positive return.
That's not true in betting, that's not true in business and most of all its not true when government does it.
And yet if you look at successful economies internationally they invest a lot more than we do, typically including state investment.
We have a weird phobia of state investment here.
It is bizarre. Silicon Valley would not exist without massive state investment.
We don't know that at all. Very often state investment crowds out private investment, or distorts it hugely. Silicon Valley might exist in a more efficient format, even had the US government never spent a penny on hi tech R&D. Or it might not. We can't say.
What IS certain is that state investment, whatever its occasional successes, is excellent at creating white elephants. The private sector has a strong incentive to invest in efficient and profitable investments, while the state will usually choose politically correct and wasteful rubbish like green projects or HS2 or our coal mining industry in the old days. And the private sector is much better at controlling costs and has a much stronger incentive to pull the plug on investments that underperform - otherwise it loses money and can be sued by irate shareholders. While the public sector will simply carry on until there's a fiscal crisis, as the taxpayer can be forced to pay.
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
Obviously teh workers will pay for it , private companies do not have a magic money treee like the public sector. Means either employing less people or no wage rises till they make up the losses. Economics for idiots.
Business employing fewer people and increasing efficiency is actually a good thing for our economy if you look at it from a macro perspective.
So long as:
1. Efficiency actually rises, rather than the company contracting or failing to expand overall. 2. The changes don’t lead to an increase in unemployment.
There is huge unfulfilled demand for staff in several sectors, including health care, care and construction. Now the reality is a lot of people don't want those jobs but I think we are a long way from significant unemployment regardless.
NHS employment is at an all time high (I believe) - 1.3M FTE and up 30% since 2009.
Have we all got that much sicker over time? What are all those people doing?
Dealing with us getting older. And older, and older.
It's a contributory factor, but a small one. This is one of the few things I know quite a bit about.
Most assessments of UK health spending find that increased chronic conditions and better technology (keeping people alive) are the reasons it's increasing so much. England's demographics are actually quite balanced due to immigration, yet their spending has increased just as much as ours has in Scotland.
Most demographic-linked spending in the UK is made in the last 12 months or so of life. You-only-die-once, so that doesn't matter too much except in the 2030s when we have lots of Boomers reaching their 80s. But a small blip, relatively.
Isn't 'keeping people alive' self-evidently part of people getting older?
Still, let's look on the bright side.
'From stalling to falling. Life expectancy decline hits economy and workforce'
Yes, but it's technology driving that increase in spending on older people, not the demographic profile itself. Life expectancy would have probably gone more backwards were it not for innovations on heart disease etc.
The markets briefings I have seen show a very big fiscal gap from the March 2024 budget. Extra taxes and borrowings in mid to high tens of billions £ are needed if the government maintains departmental spending at the same rate as now.
It seems Rachel Reeves does have a point about Jeremy Hunt.
As I have said the finances have not recovered since Covid and Ukraine and the inflationary burst that gave us. The level of borrowing is far too high. The situation was unsustainable and Hunt was not exactly giving us way signs as to how we get out of it. It is one of the main reasons I became disenchanted with the last government.
The implication is Jeremy Hunt wasn't entirely honest in the numbers he provided at the last budget. This I think is the root of the spat about whether to release OBR analysis on the numbers they were provided with
On your more important, yep. It's likely taxes and borrowing will both go up AND government spending squeezed. It's not a great situation to be in.
He wasn't dishonest, he simply chose not to address or even acknowledge the underlying problems and was seeking a gradualist way out. In the post 2010 period that largely worked but its a long haul and requires time as well as a discipline, coherence, control and focus that the previous government sorely lacked.
This government has the time. They have the majority. Do they have the other characteristics required? We will find out today.
Hunt's projections were based on entirely unrealistic assumptions of massive real terms cuts to spending for unprotected departments. Some of the tax assumptions - eg fuel duty increases that the government kept canceling when it came to it - were quite iffy too. I'd call that dishonest.
Its Malmesbury's rule of red tape. Govts create a rule book and then spend a load of energy trying to get year 5 forecasts within their arbitrary rules and forget about actually managing the economy, growth and investment.
I agree with that up to a point. But sometimes even daft rules that can be gamed easily are better than having no rules at all.
What are people watching for in particular in the budget? I think overall it will be considerably less lurid than a compendium of the last two month's articles from the Telegraph.
Me:
- Local Council funding. - All the possible changes around lifetime gifts, inheritance, taxation of estates & trusts, exit tax as per other countries etc. - Where things can be significantly improved by minor adjustments, eg the £100k tax level cliff edge, make tax breaks less on large tonka-trucks than small tonka-trucks - which the last Govt ran away from. - Excise Duty on fuel, which I think will be in the range +6.7% to +10%. - VED, and possibly tax reliefs around electric vehicles. - The things in the small print undergrowth.
Changes around transport, especially around things changing basic priorities of Highways Authorities to get rid of "car-brain". Various quite nerdy but important transport infra things, like secure mobility aid and cycle parking (ie hangars) being a mandatory part of residents' parking schemes especially in areas without garages.
The measure that would have the largest potential impact on me would be a shift of Council Tax liability from T to LL, which in my area is potentially eg £1800 pa changing on a property that rents for £9000 pa. It's a detail in the Proportional Property Tax proposals. Less significant in the wealthier areas where relatively less Council Tax is usually paid.
Courts and other legal funding. A relatively small amount would go a long way. The Coalition messed up and it's not been corrected.
Does that mean I get a pay rise? Whoopee.
Isn't the legal system in Scotland devolved? So no.
What are people watching for in particular in the budget? I think overall it will be considerably less lurid than a compendium of the last two month's articles from the Telegraph.
Me:
- Local Council funding. - All the possible changes around lifetime gifts, inheritance, taxation of estates & trusts, exit tax as per other countries etc. - Where things can be significantly improved by minor adjustments, eg the £100k tax level cliff edge, make tax breaks less on large tonka-trucks than small tonka-trucks - which the last Govt ran away from. - Excise Duty on fuel, which I think will be in the range +6.7% to +10%. - VED, and possibly tax reliefs around electric vehicles. - The things in the small print undergrowth.
Changes around transport, especially around things changing basic priorities of Highways Authorities to get rid of "car-brain". Various quite nerdy but important transport infra things, like secure mobility aid and cycle parking (ie hangars) being a mandatory part of residents' parking schemes especially in areas without garages.
The measure that would have the largest potential impact on me would be a shift of Council Tax liability from T to LL, which in my area is potentially eg £1800 pa changing on a property that rents for £9000 pa. It's a detail in the Proportional Property Tax proposals. Less significant in the wealthier areas where relatively less Council Tax is usually paid.
Courts and other legal funding. A relatively small amount would go a long way. The Coalition messed up and it's not been corrected.
Does that mean I get a pay rise? Whoopee.
This may be controversial, but some spending going to lawyers is worth it...
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
It’s all relative. Say you’re a business with 100 of sales, total costs of 85 of which payroll is say 40. That’s quite typical. A 2% employer NI rise would cost just over 0.5, after tax deductions. When the last government raised CT to 25% that was closer to 1 on those numbers, straight to the bottom line.
also many organisations cannot just put up prices to compensate - charities for instance are going to have to shed staff because of the NIC increase
Does that mean they were all adding staff when NI went down?
We’ve had a decade of average wages rising more slowly than RPI. Wage inflation has not been the problem for the economy.
Nobody likes tax to go up, but when the alternative is cutting already crumbling public services further to the bone and continuing on the long slow journey to looking like a developing country, something’s got to give.
I’d have raised VAT to 23% and reversed the employee NI cuts, but those were off the table in the manifesto. I’d also cut CT back to 19%.
public sector efficiency is very poor atm - you only have to try and contact HMRC to know that. It cannot not be an option to look at improving this through hard choices rather than take the easier way of raising taxes on the more efficient private sector
That's efficacy. Efficiency is efficacy divided by input. HMRC has lost a lot of staff over the years, IIRC,
so where is the highest tax burden ad borrowing since WW2 being spent? Its obviously not being efficiently spent so why crave for more spending until this answer is known
Old people and interest payments. There is no great mystery about it.
Time to ban old people? The assisted dying bill might lead to that if people are culturally encouraged not to be 'burdens'.
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
It’s all relative. Say you’re a business with 100 of sales, total costs of 85 of which payroll is say 40. That’s quite typical. A 2% employer NI rise would cost just over 0.5, after tax deductions. When the last government raised CT to 25% that was closer to 1 on those numbers, straight to the bottom line.
also many organisations cannot just put up prices to compensate - charities for instance are going to have to shed staff because of the NIC increase
Does that mean they were all adding staff when NI went down?
We’ve had a decade of average wages rising more slowly than RPI. Wage inflation has not been the problem for the economy.
Nobody likes tax to go up, but when the alternative is cutting already crumbling public services further to the bone and continuing on the long slow journey to looking like a developing country, something’s got to give.
I’d have raised VAT to 23% and reversed the employee NI cuts, but those were off the table in the manifesto. I’d also cut CT back to 19%.
public sector efficiency is very poor atm - you only have to try and contact HMRC to know that. It cannot not be an option to look at improving this through hard choices rather than take the easier way of raising taxes on the more efficient private sector
Is that an efficiency problem? Or one of Tory stupidity?
Austerity saw them dramatically slash funding for HMRC. That means less tax inspectors - the inability to speak to anyone without a lengthy hold and *that* hold music.
A government in need of tax revenues could hire tax inspectors to go and recoup it. Plenty of stories out there of plenty of big tax monies not flowing to HM Treasury. But as the people getting away are Tory friends and patrons, there wasn't the political will.
We are all going to hate Reeves's budget on here of course.
We haven't liked any of the 63 versions the Telegraph has published since July 5th.
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
Obviously teh workers will pay for it , private companies do not have a magic money treee like the public sector. Means either employing less people or no wage rises till they make up the losses. Economics for idiots.
Business employing fewer people and increasing efficiency is actually a good thing for our economy if you look at it from a macro perspective.
So long as:
1. Efficiency actually rises, rather than the company contracting or failing to expand overall. 2. The changes don’t lead to an increase in unemployment.
There is huge unfulfilled demand for staff in several sectors, including health care, care and construction. Now the reality is a lot of people don't want those jobs but I think we are a long way from significant unemployment regardless.
NHS employment is at an all time high (I believe) - 1.3M FTE and up 30% since 2009.
Have we all got that much sicker over time? What are all those people doing?
Dealing with us getting older. And older, and older.
That, and sicker. When I started in Leicester we had 23 500 with diabetes in the patch, now it's 92 000. Some of that is better diagnosis (though we still see late presentations with vascular disease etc), but the majority is a genuine increase, and it is occurring in all ethnic groups, albeit particularly frequent in British South Asians. The population of the area has increased by about 10% over that time.
Do you think that Semaglutide, in its various forms, is the wonder drug that some make it out to be?
Mounjaro seems better still.
Yes, it's the best innovation in type 2 diabetes of my professional lifetime, alongside ambulatory monitors for insulin dependent diabetics.
Chronic* diseases require a lot of personnel and infrastructure to monitor and treat complications, so labour intensive. They also feed off each other, so patients often have vascular disease, arthritis, blood pressure etc. Hips and knees last longer when carrying less weight.
Chronic diseases are also often amenable to public health interventions, such as designing in active travel to how we live, and require patient education and engagement. No one can follow the diet for someone else, and no amount of medication makes up for that.
*chronic disease is defined by duration rather than severity, compared with acute disease.
I think my one unmentioned rabbit in the hat is how much may be saved on the £100bn or so interest payments as rates come down a little?
Base rates have little impact on public borrowing. Gilt rates with durations of 10-30 years do. If the government can roll over the debt that becomes payable each year at rates that are below current expectations then this may create more headroom. But the money we borrowed when gilt rates collapsed after 2008 will have to be refinanced at much higher rates than it was initially borrowed at. The debt interest element of public spending is going to rise markedly over the next 10 years or so.
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
It’s all relative. Say you’re a business with 100 of sales, total costs of 85 of which payroll is say 40. That’s quite typical. A 2% employer NI rise would cost just over 0.5, after tax deductions. When the last government raised CT to 25% that was closer to 1 on those numbers, straight to the bottom line.
also many organisations cannot just put up prices to compensate - charities for instance are going to have to shed staff because of the NIC increase
Does that mean they were all adding staff when NI went down?
We’ve had a decade of average wages rising more slowly than RPI. Wage inflation has not been the problem for the economy.
Nobody likes tax to go up, but when the alternative is cutting already crumbling public services further to the bone and continuing on the long slow journey to looking like a developing country, something’s got to give.
I’d have raised VAT to 23% and reversed the employee NI cuts, but those were off the table in the manifesto. I’d also cut CT back to 19%.
public sector efficiency is very poor atm - you only have to try and contact HMRC to know that. It cannot not be an option to look at improving this through hard choices rather than take the easier way of raising taxes on the more efficient private sector
Is that an efficiency problem? Or one of Tory stupidity?
Austerity saw them dramatically slash funding for HMRC. That means less tax inspectors - the inability to speak to anyone without a lengthy hold and *that* hold music.
A government in need of tax revenues could hire tax inspectors to go and recoup it. Plenty of stories out there of plenty of big tax monies not flowing to HM Treasury. But as the people getting away are Tory friends and patrons, there wasn't the political will.
The IRS is similar - it's just employed a lot more workers but they will be targeting easier tax avoiders not the large ones who can afford proper legal advice.
The vast majority of the tax gap is with small businesses and individuals, and most of it is not "avoidance" but either basic carelessness, ignorance of the rules or small time evasion. The amount of tax lost to aggressive, but legal, "schemes" is pretty minimal these days.
Our tax gap for large business is one of the smallest in the world. In fact, by most measures our total tax gap is one of the smallest in the world. A lot of that is explained by the fact we have a much smaller informal economy than many of our peers, and cash is less prevalent. But even here, with the smaller taxpayers you really need boots on the ground and technology because there are so many of them.
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
It’s all relative. Say you’re a business with 100 of sales, total costs of 85 of which payroll is say 40. That’s quite typical. A 2% employer NI rise would cost just over 0.5, after tax deductions. When the last government raised CT to 25% that was closer to 1 on those numbers, straight to the bottom line.
also many organisations cannot just put up prices to compensate - charities for instance are going to have to shed staff because of the NIC increase
Does that mean they were all adding staff when NI went down?
We’ve had a decade of average wages rising more slowly than RPI. Wage inflation has not been the problem for the economy.
Nobody likes tax to go up, but when the alternative is cutting already crumbling public services further to the bone and continuing on the long slow journey to looking like a developing country, something’s got to give.
I’d have raised VAT to 23% and reversed the employee NI cuts, but those were off the table in the manifesto. I’d also cut CT back to 19%.
public sector efficiency is very poor atm - you only have to try and contact HMRC to know that. It cannot not be an option to look at improving this through hard choices rather than take the easier way of raising taxes on the more efficient private sector
That's efficacy. Efficiency is efficacy divided by input. HMRC has lost a lot of staff over the years, IIRC,
so where is the highest tax burden ad borrowing since WW2 being spent? Its obviously not being efficiently spent so why crave for more spending until this answer is known
Old people and interest payments. There is no great mystery about it.
Time to ban old people? The assisted dying bill might lead to that if people are culturally encouraged not to be 'burdens'.
It's not the old people's fault of course, but if the state makes promises to support the elderly in their retirement and pay for their health care and there are more and more elderly and fewer and fewer working age people to levy tax on to pay for it then those working aged people are going to have to pay more and more tax. That is just simple arithmetic.
I think my one unmentioned rabbit in the hat is how much may be saved on the £100bn or so interest payments as rates come down a little?
Base rates have little impact on public borrowing. Gilt rates with durations of 10-30 years do. If the government can roll over the debt that becomes payable each year at rates that are below current expectations then this may create more headroom. But the money we borrowed when gilt rates collapsed after 2008 will have to be refinanced at much higher rates than it was initially borrowed at. The debt interest element of public spending is going to rise markedly over the next 10 years or so.
A lot of our borrowing is index-linked though, so current base rate and inflation do have quite a material impact - hence we saw much more rapid rises in borrowing costs in 2022 and 2023 than many of our neighbours.
The markets briefings I have seen show a very big fiscal gap from the March 2024 budget. Extra taxes and borrowings in mid to high tens of billions £ are needed if the government maintains departmental spending at the same rate as now.
It seems Rachel Reeves does have a point about Jeremy Hunt.
As I have said the finances have not recovered since Covid and Ukraine and the inflationary burst that gave us. The level of borrowing is far too high. The situation was unsustainable and Hunt was not exactly giving us way signs as to how we get out of it. It is one of the main reasons I became disenchanted with the last government.
The implication is Jeremy Hunt wasn't entirely honest in the numbers he provided at the last budget. This I think is the root of the spat about whether to release OBR analysis on the numbers they were provided with
On your more important, yep. It's likely taxes and borrowing will both go up AND government spending squeezed. It's not a great situation to be in.
He wasn't dishonest, he simply chose not to address or even acknowledge the underlying problems and was seeking a gradualist way out. In the post 2010 period that largely worked but its a long haul and requires time as well as a discipline, coherence, control and focus that the previous government sorely lacked.
This government has the time. They have the majority. Do they have the other characteristics required? We will find out today.
Hunt's projections were based on entirely unrealistic assumptions of massive real terms cuts to spending for unprotected departments. Some of the tax assumptions - eg fuel duty increases that the government kept canceling when it came to it - were quite iffy too. I'd call that dishonest.
Its Malmesbury's rule of red tape. Govts create a rule book and then spend a load of energy trying to get year 5 forecasts within their arbitrary rules and forget about actually managing the economy, growth and investment.
I agree with that up to a point. But sometimes even daft rules that can be gamed easily are better than having no rules at all.
If the Treasury spent 90% of the time on a good plan, 5% on gaming the rules and 5% on presentation that would be fine.
I suspect for Rishi and Hunt it was more 30/40/30.
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
Obviously teh workers will pay for it , private companies do not have a magic money treee like the public sector. Means either employing less people or no wage rises till they make up the losses. Economics for idiots.
Business employing fewer people and increasing efficiency is actually a good thing for our economy if you look at it from a macro perspective.
So long as:
1. Efficiency actually rises, rather than the company contracting or failing to expand overall. 2. The changes don’t lead to an increase in unemployment.
There is huge unfulfilled demand for staff in several sectors, including health care, care and construction. Now the reality is a lot of people don't want those jobs but I think we are a long way from significant unemployment regardless.
NHS employment is at an all time high (I believe) - 1.3M FTE and up 30% since 2009.
Have we all got that much sicker over time? What are all those people doing?
Dealing with us getting older. And older, and older.
It's a contributory factor, but a small one. This is one of the few things I know quite a bit about.
Most assessments of UK health spending find that increased chronic conditions and better technology (keeping people alive) are the reasons it's increasing so much. England's demographics are actually quite balanced due to immigration, yet their spending has increased just as much as ours has in Scotland.
Most demographic-linked spending in the UK is made in the last 12 months or so of life. You-only-die-once, so that doesn't matter too much except in the 2030s when we have lots of Boomers reaching their 80s. But a small blip, relatively.
Isn't 'keeping people alive' self-evidently part of people getting older?
Still, let's look on the bright side.
'From stalling to falling. Life expectancy decline hits economy and workforce'
What we should focus on is Healthy Life Expectancy, rather than simple Life Expectancy. It's HLE that matters for productivity and Health and Social Care. A fit 80 year old living independently is a blessing not a burden.
Some interesting data on HLE here, and on the inequalities around it.
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
It’s all relative. Say you’re a business with 100 of sales, total costs of 85 of which payroll is say 40. That’s quite typical. A 2% employer NI rise would cost just over 0.5, after tax deductions. When the last government raised CT to 25% that was closer to 1 on those numbers, straight to the bottom line.
also many organisations cannot just put up prices to compensate - charities for instance are going to have to shed staff because of the NIC increase
Does that mean they were all adding staff when NI went down?
We’ve had a decade of average wages rising more slowly than RPI. Wage inflation has not been the problem for the economy.
Nobody likes tax to go up, but when the alternative is cutting already crumbling public services further to the bone and continuing on the long slow journey to looking like a developing country, something’s got to give.
I’d have raised VAT to 23% and reversed the employee NI cuts, but those were off the table in the manifesto. I’d also cut CT back to 19%.
public sector efficiency is very poor atm - you only have to try and contact HMRC to know that. It cannot not be an option to look at improving this through hard choices rather than take the easier way of raising taxes on the more efficient private sector
That's efficacy. Efficiency is efficacy divided by input. HMRC has lost a lot of staff over the years, IIRC,
so where is the highest tax burden ad borrowing since WW2 being spent? Its obviously not being efficiently spent so why crave for more spending until this answer is known
Old people and interest payments. There is no great mystery about it.
Time to ban old people? The assisted dying bill might lead to that if people are culturally encouraged not to be 'burdens'.
It's not the old people's fault of course, but if the state makes promises to support the elderly in their retirement and pay for their health care and there are more and more elderly and fewer and fewer working age people to levy tax on to pay for it then those working aged people are going to have to pay more and more tax. That is just simple arithmetic.
The tide is turning a little. At my choir's AGM last night there was a discussion on ticket pricing. One of the young members said many of his friends have second thoughts about coming to our concerts because of the price. Someone else mentioned that we used to have concession rates, although these mainly helped OAPs. We removed these when it became clear those OAPs could easily afford the full rate. So now the plan is for concession pricing for the under 30s. I suggested a surcharge for the over-60s but that wasn't taken forward.
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
It’s all relative. Say you’re a business with 100 of sales, total costs of 85 of which payroll is say 40. That’s quite typical. A 2% employer NI rise would cost just over 0.5, after tax deductions. When the last government raised CT to 25% that was closer to 1 on those numbers, straight to the bottom line.
also many organisations cannot just put up prices to compensate - charities for instance are going to have to shed staff because of the NIC increase
Does that mean they were all adding staff when NI went down?
We’ve had a decade of average wages rising more slowly than RPI. Wage inflation has not been the problem for the economy.
Nobody likes tax to go up, but when the alternative is cutting already crumbling public services further to the bone and continuing on the long slow journey to looking like a developing country, something’s got to give.
I’d have raised VAT to 23% and reversed the employee NI cuts, but those were off the table in the manifesto. I’d also cut CT back to 19%.
public sector efficiency is very poor atm - you only have to try and contact HMRC to know that. It cannot not be an option to look at improving this through hard choices rather than take the easier way of raising taxes on the more efficient private sector
Is that an efficiency problem? Or one of Tory stupidity?
Austerity saw them dramatically slash funding for HMRC. That means less tax inspectors - the inability to speak to anyone without a lengthy hold and *that* hold music.
A government in need of tax revenues could hire tax inspectors to go and recoup it. Plenty of stories out there of plenty of big tax monies not flowing to HM Treasury. But as the people getting away are Tory friends and patrons, there wasn't the political will.
The IRS is similar - it's just employed a lot more workers but they will be targeting easier tax avoiders not the large ones who can afford proper legal advice.
The vast majority of the tax gap is with small businesses and individuals, and most of it is not "avoidance" but either basic carelessness, ignorance of the rules or small time evasion. The amount of tax lost to aggressive, but legal, "schemes" is pretty minimal these days.
Our tax gap for large business is one of the smallest in the world. In fact, by most measures our total tax gap is one of the smallest in the world. A lot of that is explained by the fact we have a much smaller informal economy than many of our peers, and cash is less prevalent. But even here, with the smaller taxpayers you really need boots on the ground and technology because there are so many of them.
The actual tax paid by the ultra wealthy is fascinating to a numbers nerd. Out of date but real data shows:
"Using anonymised data from personal tax returns, we show that in 2015-16 the average rate of tax paid by people who received one million pounds in taxable income and gains was just 35 per cent: the same as someone earning £100,000. But one in four of these paid 45 per cent – close to the top rate – whilst another quarter paid less than 30 per cent overall. One in ten paid just 11 per cent—the same as someone earning £15,000. The rich, it seems, are not all in it together."
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
Obviously teh workers will pay for it , private companies do not have a magic money treee like the public sector. Means either employing less people or no wage rises till they make up the losses. Economics for idiots.
Business employing fewer people and increasing efficiency is actually a good thing for our economy if you look at it from a macro perspective.
So long as:
1. Efficiency actually rises, rather than the company contracting or failing to expand overall. 2. The changes don’t lead to an increase in unemployment.
There is huge unfulfilled demand for staff in several sectors, including health care, care and construction. Now the reality is a lot of people don't want those jobs but I think we are a long way from significant unemployment regardless.
NHS employment is at an all time high (I believe) - 1.3M FTE and up 30% since 2009.
Have we all got that much sicker over time? What are all those people doing?
Dealing with us getting older. And older, and older.
It's a contributory factor, but a small one. This is one of the few things I know quite a bit about.
Most assessments of UK health spending find that increased chronic conditions and better technology (keeping people alive) are the reasons it's increasing so much. England's demographics are actually quite balanced due to immigration, yet their spending has increased just as much as ours has in Scotland.
Most demographic-linked spending in the UK is made in the last 12 months or so of life. You-only-die-once, so that doesn't matter too much except in the 2030s when we have lots of Boomers reaching their 80s. But a small blip, relatively.
That's disingenuous to suggest most are made in the last 12 months without accounting for when the remainder of the expenditure is made.
Exclude the last 12 months and the remaining roughly 50% is not spread evenly across the rest of your life. Apart from childbirth, which on average is now happening less than once per adult, it's vastly disproportionately in your later years.
That later years expenditure is happening in increasing amounts on top of, not instead of, last 12 month expenditure.
I think my one unmentioned rabbit in the hat is how much may be saved on the £100bn or so interest payments as rates come down a little?
Base rates have little impact on public borrowing. Gilt rates with durations of 10-30 years do. If the government can roll over the debt that becomes payable each year at rates that are below current expectations then this may create more headroom. But the money we borrowed when gilt rates collapsed after 2008 will have to be refinanced at much higher rates than it was initially borrowed at. The debt interest element of public spending is going to rise markedly over the next 10 years or so.
Let's see how well Rachel has rolled the pitch. UK 10 Yr opened at 4.32% today and is now at 4.245%. I *think* she's actually done OK on this front, but we shall see
On topic, the joy of politics is that the counterfactual can turn into the factual.
Truss was right.
We need economic growth and we need it consistently over a sustained period. We have cut and shrunk, shrunk and cut our economy over a long period, with the biggest contraction in the last decade when we were at our most vulnerable.
Truss was wrong in that she thought the way to growth was slash taxes and spending, but she also wanted investment. Borrowing to invest - and the delivering a return on that investment - is NOT bad economics. It is capitalism. And when the state borrows to invest in capacity, skills and infrastructure it has a long-term benefit.
At the same time, we need to cut the crap. We had dug ourselves into the ground when it comes to digging into the ground. We spend hundreds of millions on reports and surveys and impact assessments *without actually building anything*. The Tories gamed house planning so that the developers always beat the council. Not that the developers built what was needed. Do the same but *for the state*. We need to build this, it's going here, please accept this mitigation (or don't), start building. For housing we must have local people involved as its their communities being expanded, but the answer cannot just be "no".
Sadly I expect nothing from the Chancellor to drive growth, to drive investment, to try and course correct the UK so that we're comparable with France or Germany or Spain or the Netherlands or any of the rest of European nations who aren't as crushed by cuts as we are. Unless she pulls a massive rabbit out of the hat, Labour have already failed.
You're still assuming that every 'investment' generates a positive return.
That's not true in betting, that's not true in business and most of all its not true when government does it.
And yet if you look at successful economies internationally they invest a lot more than we do, typically including state investment.
We have a weird phobia of state investment here.
It is bizarre. Silicon Valley would not exist without massive state investment.
We don't know that at all. Very often state investment crowds out private investment, or distorts it hugely. Silicon Valley might exist in a more efficient format, even had the US government never spent a penny on hi tech R&D. Or it might not. We can't say.
What IS certain is that state investment, whatever its occasional successes, is excellent at creating white elephants. The private sector has a strong incentive to invest in efficient and profitable investments, while the state will usually choose politically correct and wasteful rubbish like green projects or HS2 or our coal mining industry in the old days. And the private sector is much better at controlling costs and has a much stronger incentive to pull the plug on investments that underperform - otherwise it loses money and can be sued by irate shareholders. While the public sector will simply carry on until there's a fiscal crisis, as the taxpayer can be forced to pay.
UK state investment has had a couple of problems
1) Pick The Winner. Just after the war, Hydrogen Peroxide (H202) looked like an interesting idea as a way to run a turbine engine underwater in a submarine. The Americans set up a small test program. The UK went all in. Which led to HMS Exploder and HMS Excruciater. And a very expensive plant for making H202.
The Americans then built nuclear submarines.
2) Double down on the mistake. When it came to picking rocket fuels in the late 50s, the Ministry of Supply was demanding H202 *rockets* - to use the investment in the expensive plant for (1). Which led to an expensive dead end - liquid oxygen is far cheaper. Go look in the Science Museum....
3) Actively suppressing alternatives. In the case of H202, liquid oxygen projects were blocked on the grounds that they might "compete" with The Chosen Solution.
When I have spoken to politicians (about a DARPA style scheme) they always say lovely, but
A - must pick winners B - back them massively C - a strange one - the politicians seem worried by it being *too* commercial.
For a more modern example, see the UK "investment" in computer technology in the 80s - the civil servants were damning Thatchers interest in the useless, pointless home computer scene. Rather than following the Proper Policy - mini computers. Anybody remember mini computers?
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
It’s all relative. Say you’re a business with 100 of sales, total costs of 85 of which payroll is say 40. That’s quite typical. A 2% employer NI rise would cost just over 0.5, after tax deductions. When the last government raised CT to 25% that was closer to 1 on those numbers, straight to the bottom line.
also many organisations cannot just put up prices to compensate - charities for instance are going to have to shed staff because of the NIC increase
Does that mean they were all adding staff when NI went down?
We’ve had a decade of average wages rising more slowly than RPI. Wage inflation has not been the problem for the economy.
Nobody likes tax to go up, but when the alternative is cutting already crumbling public services further to the bone and continuing on the long slow journey to looking like a developing country, something’s got to give.
I’d have raised VAT to 23% and reversed the employee NI cuts, but those were off the table in the manifesto. I’d also cut CT back to 19%.
public sector efficiency is very poor atm - you only have to try and contact HMRC to know that. It cannot not be an option to look at improving this through hard choices rather than take the easier way of raising taxes on the more efficient private sector
Is that an efficiency problem? Or one of Tory stupidity?
Austerity saw them dramatically slash funding for HMRC. That means less tax inspectors - the inability to speak to anyone without a lengthy hold and *that* hold music.
A government in need of tax revenues could hire tax inspectors to go and recoup it. Plenty of stories out there of plenty of big tax monies not flowing to HM Treasury. But as the people getting away are Tory friends and patrons, there wasn't the political will.
We are all going to hate Reeves's budget on here of course.
We haven't liked any of the 63 versions the Telegraph has published since July 5th.
I have to spend the next 72 hours being studiously neutral and factual about the budget.
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
It’s all relative. Say you’re a business with 100 of sales, total costs of 85 of which payroll is say 40. That’s quite typical. A 2% employer NI rise would cost just over 0.5, after tax deductions. When the last government raised CT to 25% that was closer to 1 on those numbers, straight to the bottom line.
also many organisations cannot just put up prices to compensate - charities for instance are going to have to shed staff because of the NIC increase
Does that mean they were all adding staff when NI went down?
We’ve had a decade of average wages rising more slowly than RPI. Wage inflation has not been the problem for the economy.
Nobody likes tax to go up, but when the alternative is cutting already crumbling public services further to the bone and continuing on the long slow journey to looking like a developing country, something’s got to give.
I’d have raised VAT to 23% and reversed the employee NI cuts, but those were off the table in the manifesto. I’d also cut CT back to 19%.
public sector efficiency is very poor atm - you only have to try and contact HMRC to know that. It cannot not be an option to look at improving this through hard choices rather than take the easier way of raising taxes on the more efficient private sector
That's efficacy. Efficiency is efficacy divided by input. HMRC has lost a lot of staff over the years, IIRC,
so where is the highest tax burden ad borrowing since WW2 being spent? Its obviously not being efficiently spent so why crave for more spending until this answer is known
Old people and interest payments. There is no great mystery about it.
Time to ban old people? The assisted dying bill might lead to that if people are culturally encouraged not to be 'burdens'.
It's not the old people's fault of course, but if the state makes promises to support the elderly in their retirement and pay for their health care and there are more and more elderly and fewer and fewer working age people to levy tax on to pay for it then those working aged people are going to have to pay more and more tax. That is just simple arithmetic.
The tide is turning a little. At my choir's AGM last night there was a discussion on ticket pricing. One of the young members said many of his friends have second thoughts about coming to our concerts because of the price. Someone else mentioned that we used to have concession rates, although these mainly helped OAPs. We removed these when it became clear those OAPs could easily afford the full rate. So now the plan is for concession pricing for the under 30s. I suggested a surcharge for the over-60s but that wasn't taken forward.
I can see a problem with that, "madam are you sure you are not over 60, please can I see some id" might not lead to the best reviews.
I think my one unmentioned rabbit in the hat is how much may be saved on the £100bn or so interest payments as rates come down a little?
Base rates have little impact on public borrowing. Gilt rates with durations of 10-30 years do. If the government can roll over the debt that becomes payable each year at rates that are below current expectations then this may create more headroom. But the money we borrowed when gilt rates collapsed after 2008 will have to be refinanced at much higher rates than it was initially borrowed at. The debt interest element of public spending is going to rise markedly over the next 10 years or so.
A lot of our borrowing is index-linked though, so current base rate and inflation do have quite a material impact - hence we saw much more rapid rises in borrowing costs in 2022 and 2023 than many of our neighbours.
Inflation and inflationary expectations certainly impact on the roughly 1/3 of our debt now index linked. But the inflation burst was actually good for reducing the value of the debt of the other 2/3.
Budget Day - don't you just love it, and a change from being in the middle of Cheltenham or something more important.
The Party's over - we all know that. It probably ended in 2008 if truth be told but since then we've staggered on unable or unwilling to leave and now we've emerged into the cold darkness of 3am, drunk and looking for a cab home.
The basic premise is we can no longer afford to run the State we want on the taxes we actually pay (and other income received). The castle of Scandinavian quality public services on American style levels of personal and corporate taxation was built on the kind of sand you find in places where you can do it if you have massive revenues from oil.
To square the circle, you either raise taxes or cut spending or, in all likelihood, both. The key has to be to reduce the deficit - I'm more sanguine about borrowing especially for long term capital infrasatructure projects but we shouldn't be borrowing to buy a pint of milk and something for the cat.
It's becoming clear Hunt's two NI cuts were nothing more than "salting the earth" for the incoming Government. Ken Clarke famously resisted calls for pre-election tax cuts in the mid-90s because he understood bequeathing the best possible inheritance to his successor was his duty - the successor could ruin it, and did in time, but in the short term it was in everyone's interests for the UK to have a strong economy even if he and his Party were no longer managing it.
So, pain today, unpleasantness tomorrow seems the likely outcome of today's activities. I worry for local Government in the coming financial round - plenty of councils are already on the edge and wholesale Section 114 notices in January and February won't look good.
As so many others have said, because we can't have an honest discussion about tax in this political culture, Reeves and Starmer were forced to close off the more obvious avenues of tax raising such as moving basic rate to 25% and higher rate to 50% (while unfreezing thresholds).
The biggest economic issue I see is under-employment which is a growing problem with the demand for workers no longer being met by an adequate supply.
It’s like Labour are trying really hard to follow a stereotype of the Coalition Government’s narrative, but with no understanding of how they actually sold their economic agenda.
Without the “mission” of “getting the deficit down”, some sort of success criteria, and a vision of sunlit uplands, it won’t work. Also, Labour’s natural voters may not respond as well to baby eating as the Tory voters did.
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
Obviously the workers will pay for it , private companies do not have a magic money treee like the public sector. Means either employing less people or no wage rises till they make up the losses. Economics for idiots.
Business employing fewer people and increasing efficiency is actually a good thing for our economy if you look at it from a macro perspective.
So long as:
1. Efficiency actually rises, rather than the company contracting or failing to expand overall. 2. The changes don’t lead to an increase in unemployment.
There is huge unfulfilled demand for staff in several sectors, including health care, care and construction. Now the reality is a lot of people don't want those jobs but I think we are a long way from significant unemployment regardless.
NHS employment is at an all time high (I believe) - 1.3M FTE and up 30% since 2009.
Have we all got that much sicker over time? What are all those people doing?
Dealing with us getting older. And older, and older.
That, and sicker. When I started in Leicester we had 23 500 with diabetes in the patch, now it's 92 000. Some of that is better diagnosis (though we still see late presentations with vascular disease etc), but the majority is a genuine increase, and it is occurring in all ethnic groups, albeit particularly frequent in British South Asians. The population of the area has increased by about 10% over that time.
Do you think that Semaglutide, in its various forms, is the wonder drug that some make it out to be?
Mounjaro seems better still.
Yes, it's the best innovation in type 2 diabetes of my professional lifetime, alongside ambulatory monitors for insulin dependent diabetics.
Chronic* diseases require a lot of personnel and infrastructure to monitor and treat complications, so labour intensive. They also feed off each other, so patients often have vascular disease, arthritis, blood pressure etc. Hips and knees last longer when carrying less weight.
Chronic diseases are also often amenable to public health interventions, such as designing in active travel to how we live, and require patient education and engagement. No one can follow the diet for someone else, and no amount of medication makes up for that.
*chronic disease is defined by duration rather than severity, compared with acute disease.
Yes - I went onto my hybrid loop disposable pump (Omnipod 5 / Freestyle Libre 2 Plus) last week, and it's all fine though I'm having to unlearn several 20 year habits, and adjust my carb counting technique in some important respect. So far - great.
My first mistake was to take off the 2 week sensor not the 3 day pump at first change, and then having kittens whether there were complications with the Bluetooth sensor to pump link or WIFI / 5G pump to upload portal link, and putting things on in the wrong order would brick the sensor.
I did not like the image of turning up on my GPs on day 4 like Oliver Twist: "Please can I have another £112.50* of sensors, Sir - I killed the others working out how to connect them?".
The enthusiasm of the Specialist Nurse for "KEEP IT IN AUTOMATED MODE" was interesting, but there are so many variables and parameters (dozens) that fiddling with things could lead to a downward spiral of fiddling with more and more things.
* A 15 day sensor costs the NHS £37.50 a time. So they are quite tight with them, for obvious reasons. A retail purchase is in the UK is about £175 for 3, online.
Back on America for a moment, Harris will win. I did say "and it won't be close". OK maybe not a slam dunk now as it looked. But the hypothesis is simple:
The Trump campaign is a giant gas bag. Self-reinforcing and self-inflating, a vast echo chamber promoted and enhanced on Twitter and Fux and Newsmax and Lies Social. Where EVERYONE you speak to and interact with is voting Trump and thinks like you and has the same fears as you and wants the same Murica as you. EVERYONE.
We know the pollsters have had to correct in favour of Trump. Because they must be missing his voters considering that EVERYONE is voting Trump and the data isn't showing that without correction. So it looks closer now because its been corrected to look closer.
Counter to that, we know that women are more likely to vote than men. We know that whilst the core Trump vote is ANGRY, the rest are just caught up and usually don't vote. Women - and proper men who don't belittle women - are angry at Trump and the GOP, have been registering in large numbers and are motivated.
Don't drink the Trump cool-aid. That is literally what the Trump Musk campaign is wanting you to do.
I'll put my neck out here and be gladly ridiculed if I am wrong - I don't think it's close, not even by a million miles. I think Trump will win 'bigly' and we will all be shocked by the scale of his victory.
I'd be less certain re the House but I think the Senate we may be looking at 53-54 GOP seats,
I think that the plausible outcomes range from a Trump landslide in the EC, to a Harris EC landslide, though the popular vote will probably be only 2% to Harris. The swing states are very likely to swing the same way.
It all hinges on turnout IMO.
EC probably won't be close I agree, my personal prediction is probably wrong. If one swing state goes the others probably do too, so I'm hoping Nevada, which looks good for GOP is not a sign.
Harris will win. Doommungers aside. She will. Pennsylvania. Michigan and Wisconsin she will get in the EC. If not Wisconsin then Arizona. Some on here may agree with me and others may not. After all it is a free country! Nate Silver has got it wrong this time! And if I am wrong so be it! We will deal with it. We did last time along with the rest of the world. It will not be as bad as some believe.
On topic, the joy of politics is that the counterfactual can turn into the factual.
Truss was right.
We need economic growth and we need it consistently over a sustained period. We have cut and shrunk, shrunk and cut our economy over a long period, with the biggest contraction in the last decade when we were at our most vulnerable.
Truss was wrong in that she thought the way to growth was slash taxes and spending, but she also wanted investment. Borrowing to invest - and the delivering a return on that investment - is NOT bad economics. It is capitalism. And when the state borrows to invest in capacity, skills and infrastructure it has a long-term benefit.
At the same time, we need to cut the crap. We had dug ourselves into the ground when it comes to digging into the ground. We spend hundreds of millions on reports and surveys and impact assessments *without actually building anything*. The Tories gamed house planning so that the developers always beat the council. Not that the developers built what was needed. Do the same but *for the state*. We need to build this, it's going here, please accept this mitigation (or don't), start building. For housing we must have local people involved as its their communities being expanded, but the answer cannot just be "no".
Sadly I expect nothing from the Chancellor to drive growth, to drive investment, to try and course correct the UK so that we're comparable with France or Germany or Spain or the Netherlands or any of the rest of European nations who aren't as crushed by cuts as we are. Unless she pulls a massive rabbit out of the hat, Labour have already failed.
You're still assuming that every 'investment' generates a positive return.
That's not true in betting, that's not true in business and most of all its not true when government does it.
And yet if you look at successful economies internationally they invest a lot more than we do, typically including state investment.
We have a weird phobia of state investment here.
It is bizarre. Silicon Valley would not exist without massive state investment.
We don't know that at all. Very often state investment crowds out private investment, or distorts it hugely. Silicon Valley might exist in a more efficient format, even had the US government never spent a penny on hi tech R&D. Or it might not. We can't say.
What IS certain is that state investment, whatever its occasional successes, is excellent at creating white elephants. The private sector has a strong incentive to invest in efficient and profitable investments, while the state will usually choose politically correct and wasteful rubbish like green projects or HS2 or our coal mining industry in the old days. And the private sector is much better at controlling costs and has a much stronger incentive to pull the plug on investments that underperform - otherwise it loses money and can be sued by irate shareholders. While the public sector will simply carry on until there's a fiscal crisis, as the taxpayer can be forced to pay.
UK state investment has had a couple of problems
1) Pick The Winner. Just after the war, Hydrogen Peroxide (H202) looked like an interesting idea as a way to run a turbine engine underwater in a submarine. The Americans set up a small test program. The UK went all in. Which led to HMS Exploder and HMS Excruciater. And a very expensive plant for making H202.
The Americans then built nuclear submarines.
2) Double down on the mistake. When it came to picking rocket fuels in the late 50s, the Ministry of Supply was demanding H202 *rockets* - to use the investment in the expensive plant for (1). Which led to an expensive dead end - liquid oxygen is far cheaper. Go look in the Science Museum....
3) Actively suppressing alternatives. In the case of H202, liquid oxygen projects were blocked on the grounds that they might "compete" with The Chosen Solution.
When I have spoken to politicians (about a DARPA style scheme) they always say lovely, but
A - must pick winners B - back them massively C - a strange one - the politicians seem worried by it being *too* commercial.
For a more modern example, see the UK "investment" in computer technology in the 80s - the civil servants were damning Thatchers interest in the useless, pointless home computer scene. Rather than following the Proper Policy - mini computers. Anybody remember mini computers?
Yes, but THIS time we know what the winner is. Honest, Guv.
I have clocked the bit about a DARPA being “too commercial” and it is hilarious. We are so bad at capitalising on state created IP in this country.
On topic, the joy of politics is that the counterfactual can turn into the factual.
Truss was right.
We need economic growth and we need it consistently over a sustained period. We have cut and shrunk, shrunk and cut our economy over a long period, with the biggest contraction in the last decade when we were at our most vulnerable.
Truss was wrong in that she thought the way to growth was slash taxes and spending, but she also wanted investment. Borrowing to invest - and the delivering a return on that investment - is NOT bad economics. It is capitalism. And when the state borrows to invest in capacity, skills and infrastructure it has a long-term benefit.
At the same time, we need to cut the crap. We had dug ourselves into the ground when it comes to digging into the ground. We spend hundreds of millions on reports and surveys and impact assessments *without actually building anything*. The Tories gamed house planning so that the developers always beat the council. Not that the developers built what was needed. Do the same but *for the state*. We need to build this, it's going here, please accept this mitigation (or don't), start building. For housing we must have local people involved as its their communities being expanded, but the answer cannot just be "no".
Sadly I expect nothing from the Chancellor to drive growth, to drive investment, to try and course correct the UK so that we're comparable with France or Germany or Spain or the Netherlands or any of the rest of European nations who aren't as crushed by cuts as we are. Unless she pulls a massive rabbit out of the hat, Labour have already failed.
You're still assuming that every 'investment' generates a positive return.
That's not true in betting, that's not true in business and most of all its not true when government does it.
And yet if you look at successful economies internationally they invest a lot more than we do, typically including state investment.
We have a weird phobia of state investment here.
It is bizarre. Silicon Valley would not exist without massive state investment.
We don't know that at all. Very often state investment crowds out private investment, or distorts it hugely. Silicon Valley might exist in a more efficient format, even had the US government never spent a penny on hi tech R&D. Or it might not. We can't say.
What IS certain is that state investment, whatever its occasional successes, is excellent at creating white elephants. The private sector has a strong incentive to invest in efficient and profitable investments, while the state will usually choose politically correct and wasteful rubbish like green projects or HS2 or our coal mining industry in the old days. And the private sector is much better at controlling costs and has a much stronger incentive to pull the plug on investments that underperform - otherwise it loses money and can be sued by irate shareholders. While the public sector will simply carry on until there's a fiscal crisis, as the taxpayer can be forced to pay.
UK state investment has had a couple of problems
1) Pick The Winner. Just after the war, Hydrogen Peroxide (H202) looked like an interesting idea as a way to run a turbine engine underwater in a submarine. The Americans set up a small test program. The UK went all in. Which led to HMS Exploder and HMS Excruciater. And a very expensive plant for making H202.
The Americans then built nuclear submarines.
2) Double down on the mistake. When it came to picking rocket fuels in the late 50s, the Ministry of Supply was demanding H202 *rockets* - to use the investment in the expensive plant for (1). Which led to an expensive dead end - liquid oxygen is far cheaper. Go look in the Science Museum....
3) Actively suppressing alternatives. In the case of H202, liquid oxygen projects were blocked on the grounds that they might "compete" with The Chosen Solution.
When I have spoken to politicians (about a DARPA style scheme) they always say lovely, but
A - must pick winners B - back them massively C - a strange one - the politicians seem worried by it being *too* commercial.
For a more modern example, see the UK "investment" in computer technology in the 80s - the civil servants were damning Thatchers interest in the useless, pointless home computer scene. Rather than following the Proper Policy - mini computers. Anybody remember mini computers?
Pick the winner is the real problem there - we seem to treat this type of state investment as "has to win" where the US pick multiple options backing them all while knowing only one or a couple will actually succeed.
We also have a separate issue in that the Government doesn't pay enough for experts to work for them and worse doesn't understand that if you are running an IT project - you want to person accepting delivery to actually understand what is being delivered. A lot of IT projects would be more successful if they allowed the development team to be embedded with the people using the system or if they employed a second consultancy to take validating the finished delivery.
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
It’s all relative. Say you’re a business with 100 of sales, total costs of 85 of which payroll is say 40. That’s quite typical. A 2% employer NI rise would cost just over 0.5, after tax deductions. When the last government raised CT to 25% that was closer to 1 on those numbers, straight to the bottom line.
also many organisations cannot just put up prices to compensate - charities for instance are going to have to shed staff because of the NIC increase
Does that mean they were all adding staff when NI went down?
We’ve had a decade of average wages rising more slowly than RPI. Wage inflation has not been the problem for the economy.
Nobody likes tax to go up, but when the alternative is cutting already crumbling public services further to the bone and continuing on the long slow journey to looking like a developing country, something’s got to give.
I’d have raised VAT to 23% and reversed the employee NI cuts, but those were off the table in the manifesto. I’d also cut CT back to 19%.
public sector efficiency is very poor atm - you only have to try and contact HMRC to know that. It cannot not be an option to look at improving this through hard choices rather than take the easier way of raising taxes on the more efficient private sector
Is that an efficiency problem? Or one of Tory stupidity?
Austerity saw them dramatically slash funding for HMRC. That means less tax inspectors - the inability to speak to anyone without a lengthy hold and *that* hold music.
A government in need of tax revenues could hire tax inspectors to go and recoup it. Plenty of stories out there of plenty of big tax monies not flowing to HM Treasury. But as the people getting away are Tory friends and patrons, there wasn't the political will.
We are all going to hate Reeves's budget on here of course.
We haven't liked any of the 63 versions the Telegraph has published since July 5th.
I have to spend the next 72 hours being studiously neutral and factual about the budget.
Good morning
Labour’s message this morning is the Autumn Statement will be unpopular but judge us in 4 years time
There are some pre announced measures that will be popular including rises in the NLW but as always the next few days will provide a clearer picture, but then we have the conservative leadership result and from next week it will be all about the POTUS
The question is will the electorate give the government 4 years to judge their performance or will they not ?
Back on topic, Harris will win. I did say "and it won't be close". OK maybe not a slam dunk now as it looked. But the hypothesis is simple:
The Trump campaign is a giant gas bag. Self-reinforcing and self-inflating, a vast echo chamber promoted and enhanced on Twitter and Fux and Newsmax and Lies Social. Where EVERYONE you speak to and interact with is voting Trump and thinks like you and has the same fears as you and wants the same Murica as you. EVERYONE.
We know the pollsters have had to correct in favour of Trump. Because they must be missing his voters considering that EVERYONE is voting Trump and the data isn't showing that without correction. So it looks closer now because its been corrected to look closer.
Counter to that, we know that women are more likely to vote than men. We know that whilst the core Trump vote is ANGRY, the rest are just caught up and usually don't vote. Women - and proper men who don't belittle women - are angry at Trump and the GOP, have been registering in large numbers and are motivated.
Don't drink the Trump cool-aid. That is literally what the Trump Musk campaign is wanting you to do.
I hope you're right. But I fear you're not. And I fear Harris needs a big win to ensure state legislatures and the House under Johnson don't try to overturn things.
There will be violence too.
After the new 2022 election law, governors not state legislatures affirm election results. It needs both chambers of Congress to throw out state results as not valid and last time most GOP Senators affirmed Biden's election
Back on America for a moment, Harris will win. I did say "and it won't be close". OK maybe not a slam dunk now as it looked. But the hypothesis is simple:
The Trump campaign is a giant gas bag. Self-reinforcing and self-inflating, a vast echo chamber promoted and enhanced on Twitter and Fux and Newsmax and Lies Social. Where EVERYONE you speak to and interact with is voting Trump and thinks like you and has the same fears as you and wants the same Murica as you. EVERYONE.
We know the pollsters have had to correct in favour of Trump. Because they must be missing his voters considering that EVERYONE is voting Trump and the data isn't showing that without correction. So it looks closer now because its been corrected to look closer.
Counter to that, we know that women are more likely to vote than men. We know that whilst the core Trump vote is ANGRY, the rest are just caught up and usually don't vote. Women - and proper men who don't belittle women - are angry at Trump and the GOP, have been registering in large numbers and are motivated.
Don't drink the Trump cool-aid. That is literally what the Trump Musk campaign is wanting you to do.
I'll put my neck out here and be gladly ridiculed if I am wrong - I don't think it's close, not even by a million miles. I think Trump will win 'bigly' and we will all be shocked by the scale of his victory.
I'd be less certain re the House but I think the Senate we may be looking at 53-54 GOP seats,
I think that the plausible outcomes range from a Trump landslide in the EC, to a Harris EC landslide, though the popular vote will probably be only 2% to Harris. The swing states are very likely to swing the same way.
It all hinges on turnout IMO.
EC probably won't be close I agree, my personal prediction is probably wrong. If one swing state goes the others probably do too, so I'm hoping Nevada, which looks good for GOP is not a sign.
Harris will win. Doommungers aside. She will. Pennsylvania. Michigan and Wisconsin she will get in the EC. If not Wisconsin then Arizona. Some on here may agree with me and others may not. After all it is a free country! Nate Silver has got it wrong this time! And if I am wrong so be it! We will deal with it. We did last time along with the rest of the world. It will not be as bad as some believe.
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
It’s all relative. Say you’re a business with 100 of sales, total costs of 85 of which payroll is say 40. That’s quite typical. A 2% employer NI rise would cost just over 0.5, after tax deductions. When the last government raised CT to 25% that was closer to 1 on those numbers, straight to the bottom line.
also many organisations cannot just put up prices to compensate - charities for instance are going to have to shed staff because of the NIC increase
Does that mean they were all adding staff when NI went down?
We’ve had a decade of average wages rising more slowly than RPI. Wage inflation has not been the problem for the economy.
Nobody likes tax to go up, but when the alternative is cutting already crumbling public services further to the bone and continuing on the long slow journey to looking like a developing country, something’s got to give.
I’d have raised VAT to 23% and reversed the employee NI cuts, but those were off the table in the manifesto. I’d also cut CT back to 19%.
public sector efficiency is very poor atm - you only have to try and contact HMRC to know that. It cannot not be an option to look at improving this through hard choices rather than take the easier way of raising taxes on the more efficient private sector
Is that an efficiency problem? Or one of Tory stupidity?
Austerity saw them dramatically slash funding for HMRC. That means less tax inspectors - the inability to speak to anyone without a lengthy hold and *that* hold music.
A government in need of tax revenues could hire tax inspectors to go and recoup it. Plenty of stories out there of plenty of big tax monies not flowing to HM Treasury. But as the people getting away are Tory friends and patrons, there wasn't the political will.
We are all going to hate Reeves's budget on here of course.
We haven't liked any of the 63 versions the Telegraph has published since July 5th.
I have to spend the next 72 hours being studiously neutral and factual about the budget.
Good morning
Labour’s message this morning is the Autumn Statement will be unpopular but judge us in 4 years time
There are some pre announced measures that will be popular including rises in the NLW but as always the next few days will provide a clearer picture, but then we have the conservative leadership result and from next week it will be all about the POTUS
The question is will the electorate give the government 4 years to judge their performance or will they not ?
Big picture is that the electorate can only deliver their verdict on the government on four years time. Everything else is mid-term noise.
And if you accept the proposition that government income and expenditure are horribly out of synch, then a painful reset is the right thing to do, even if it's not popular. (Yes, I am looking at you, Hunt.) What Would Maggie Do? and all that.
And if you don't accept the proposition that government income and expenditure are horribly out of synch, then I'm intrigued as to why not.
On topic, the joy of politics is that the counterfactual can turn into the factual.
Truss was right.
We need economic growth and we need it consistently over a sustained period. We have cut and shrunk, shrunk and cut our economy over a long period, with the biggest contraction in the last decade when we were at our most vulnerable.
Truss was wrong in that she thought the way to growth was slash taxes and spending, but she also wanted investment. Borrowing to invest - and the delivering a return on that investment - is NOT bad economics. It is capitalism. And when the state borrows to invest in capacity, skills and infrastructure it has a long-term benefit.
At the same time, we need to cut the crap. We had dug ourselves into the ground when it comes to digging into the ground. We spend hundreds of millions on reports and surveys and impact assessments *without actually building anything*. The Tories gamed house planning so that the developers always beat the council. Not that the developers built what was needed. Do the same but *for the state*. We need to build this, it's going here, please accept this mitigation (or don't), start building. For housing we must have local people involved as its their communities being expanded, but the answer cannot just be "no".
Sadly I expect nothing from the Chancellor to drive growth, to drive investment, to try and course correct the UK so that we're comparable with France or Germany or Spain or the Netherlands or any of the rest of European nations who aren't as crushed by cuts as we are. Unless she pulls a massive rabbit out of the hat, Labour have already failed.
You're still assuming that every 'investment' generates a positive return.
That's not true in betting, that's not true in business and most of all its not true when government does it.
And yet if you look at successful economies internationally they invest a lot more than we do, typically including state investment.
We have a weird phobia of state investment here.
It is bizarre. Silicon Valley would not exist without massive state investment.
We don't know that at all. Very often state investment crowds out private investment, or distorts it hugely. Silicon Valley might exist in a more efficient format, even had the US government never spent a penny on hi tech R&D. Or it might not. We can't say.
What IS certain is that state investment, whatever its occasional successes, is excellent at creating white elephants. The private sector has a strong incentive to invest in efficient and profitable investments, while the state will usually choose politically correct and wasteful rubbish like green projects or HS2 or our coal mining industry in the old days. And the private sector is much better at controlling costs and has a much stronger incentive to pull the plug on investments that underperform - otherwise it loses money and can be sued by irate shareholders. While the public sector will simply carry on until there's a fiscal crisis, as the taxpayer can be forced to pay.
UK state investment has had a couple of problems
1) Pick The Winner. Just after the war, Hydrogen Peroxide (H202) looked like an interesting idea as a way to run a turbine engine underwater in a submarine. The Americans set up a small test program. The UK went all in. Which led to HMS Exploder and HMS Excruciater. And a very expensive plant for making H202.
The Americans then built nuclear submarines.
2) Double down on the mistake. When it came to picking rocket fuels in the late 50s, the Ministry of Supply was demanding H202 *rockets* - to use the investment in the expensive plant for (1). Which led to an expensive dead end - liquid oxygen is far cheaper. Go look in the Science Museum....
3) Actively suppressing alternatives. In the case of H202, liquid oxygen projects were blocked on the grounds that they might "compete" with The Chosen Solution.
When I have spoken to politicians (about a DARPA style scheme) they always say lovely, but
A - must pick winners B - back them massively C - a strange one - the politicians seem worried by it being *too* commercial.
For a more modern example, see the UK "investment" in computer technology in the 80s - the civil servants were damning Thatchers interest in the useless, pointless home computer scene. Rather than following the Proper Policy - mini computers. Anybody remember mini computers?
Pick the winner is the real problem there - we seem to treat this type of state investment as "has to win" where the US pick multiple options backing them all while knowing only one or a couple will actually succeed.
We also have a separate issue in that the Government doesn't pay enough for experts to work for them and worse doesn't understand that if you are running an IT project - you want to person accepting delivery to actually understand what is being delivered. A lot of IT projects would be more successful if they allowed the development team to be embedded with the people using the system or if they employed a second consultancy to take validating the finished delivery.
The issue is that people (many of them on here) think that all civil servants should be paid tuppence ha’penny and be grateful for it, because they picture them all as lazy and doing a half skilled job. Politicians, particularly Tory politicians, then join in.
What that ignores is that if we want to succeed, we need skilled officials in skilled jobs. Not just IT professionals but a whole range of both professional skills and policy expertise. To achieve that, we must pay well (probably giving a choice as to whether some of it provides the CS pension or cash now) but hold to account for delivery.
Not doing that means we waste billions on the project, without investing in the people who can make it happen, and who represent a fraction of the overall cost.
As it is we rely on the 50% of the civil service who are excellent, and take lower wages because they love the job, to cover for the rest and get surprised then they struggle to deliver. We also keep insulting them risk even them walking away.
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
It’s all relative. Say you’re a business with 100 of sales, total costs of 85 of which payroll is say 40. That’s quite typical. A 2% employer NI rise would cost just over 0.5, after tax deductions. When the last government raised CT to 25% that was closer to 1 on those numbers, straight to the bottom line.
also many organisations cannot just put up prices to compensate - charities for instance are going to have to shed staff because of the NIC increase
Does that mean they were all adding staff when NI went down?
We’ve had a decade of average wages rising more slowly than RPI. Wage inflation has not been the problem for the economy.
Nobody likes tax to go up, but when the alternative is cutting already crumbling public services further to the bone and continuing on the long slow journey to looking like a developing country, something’s got to give.
I’d have raised VAT to 23% and reversed the employee NI cuts, but those were off the table in the manifesto. I’d also cut CT back to 19%.
public sector efficiency is very poor atm - you only have to try and contact HMRC to know that. It cannot not be an option to look at improving this through hard choices rather than take the easier way of raising taxes on the more efficient private sector
Is that an efficiency problem? Or one of Tory stupidity?
Austerity saw them dramatically slash funding for HMRC. That means less tax inspectors - the inability to speak to anyone without a lengthy hold and *that* hold music.
A government in need of tax revenues could hire tax inspectors to go and recoup it. Plenty of stories out there of plenty of big tax monies not flowing to HM Treasury. But as the people getting away are Tory friends and patrons, there wasn't the political will.
We are all going to hate Reeves's budget on here of course.
We haven't liked any of the 63 versions the Telegraph has published since July 5th.
I have to spend the next 72 hours being studiously neutral and factual about the budget.
Good morning
Labour’s message this morning is the Autumn Statement will be unpopular but judge us in 4 years time
There are some pre announced measures that will be popular including rises in the NLW but as always the next few days will provide a clearer picture, but then we have the conservative leadership result and from next week it will be all about the POTUS
The question is will the electorate give the government 4 years to judge their performance or will they not ?
Absent a revolution I don't think the electorate has much choice?
The markets briefings I have seen show a very big fiscal gap from the March 2024 budget. Extra taxes and borrowings in mid to high tens of billions £ are needed if the government maintains departmental spending at the same rate as now.
It seems Rachel Reeves does have a point about Jeremy Hunt.
As I have said the finances have not recovered since Covid and Ukraine and the inflationary burst that gave us. The level of borrowing is far too high. The situation was unsustainable and Hunt was not exactly giving us way signs as to how we get out of it. It is one of the main reasons I became disenchanted with the last government.
The implication is Jeremy Hunt wasn't entirely honest in the numbers he provided at the last budget. This I think is the root of the spat about whether to release OBR analysis on the numbers they were provided with
On your more important, yep. It's likely taxes and borrowing will both go up AND government spending squeezed. It's not a great situation to be in.
He wasn't dishonest, he simply chose not to address or even acknowledge the underlying problems and was seeking a gradualist way out. In the post 2010 period that largely worked but its a long haul and requires time as well as a discipline, coherence, control and focus that the previous government sorely lacked.
This government has the time. They have the majority. Do they have the other characteristics required? We will find out today.
Hunt's projections were based on entirely unrealistic assumptions of massive real terms cuts to spending for unprotected departments. Some of the tax assumptions - eg fuel duty increases that the government kept canceling when it came to it - were quite iffy too. I'd call that dishonest.
Its Malmesbury's rule of red tape. Govts create a rule book and then spend a load of energy trying to get year 5 forecasts within their arbitrary rules and forget about actually managing the economy, growth and investment.
I agree with that up to a point. But sometimes even daft rules that can be gamed easily are better than having no rules at all.
If the Treasury spent 90% of the time on a good plan, 5% on gaming the rules and 5% on presentation that would be fine.
I suspect for Rishi and Hunt it was more 30/40/30.
You seem to be suggesting that politicians would spend 30% off their time on the job, rather than on gaming the system and making themselves look good.
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
Obviously teh workers will pay for it , private companies do not have a magic money treee like the public sector. Means either employing less people or no wage rises till they make up the losses. Economics for idiots.
Business employing fewer people and increasing efficiency is actually a good thing for our economy if you look at it from a macro perspective.
So long as:
1. Efficiency actually rises, rather than the company contracting or failing to expand overall. 2. The changes don’t lead to an increase in unemployment.
There is huge unfulfilled demand for staff in several sectors, including health care, care and construction. Now the reality is a lot of people don't want those jobs but I think we are a long way from significant unemployment regardless.
NHS employment is at an all time high (I believe) - 1.3M FTE and up 30% since 2009.
Have we all got that much sicker over time? What are all those people doing?
Dealing with us getting older. And older, and older.
That’s explains the cost (more expensive intervention) but I don’t believe that the throughput or the number of beds has increased.
There can only be one patient in any bed at the same time (😇) and there aren’t noticeable voids. It’s possible that the nurse:patient ratio has dropped (lower productivity) but that health outcomes haven’t improved
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
It’s all relative. Say you’re a business with 100 of sales, total costs of 85 of which payroll is say 40. That’s quite typical. A 2% employer NI rise would cost just over 0.5, after tax deductions. When the last government raised CT to 25% that was closer to 1 on those numbers, straight to the bottom line.
also many organisations cannot just put up prices to compensate - charities for instance are going to have to shed staff because of the NIC increase
Does that mean they were all adding staff when NI went down?
We’ve had a decade of average wages rising more slowly than RPI. Wage inflation has not been the problem for the economy.
Nobody likes tax to go up, but when the alternative is cutting already crumbling public services further to the bone and continuing on the long slow journey to looking like a developing country, something’s got to give.
I’d have raised VAT to 23% and reversed the employee NI cuts, but those were off the table in the manifesto. I’d also cut CT back to 19%.
public sector efficiency is very poor atm - you only have to try and contact HMRC to know that. It cannot not be an option to look at improving this through hard choices rather than take the easier way of raising taxes on the more efficient private sector
Is that an efficiency problem? Or one of Tory stupidity?
Austerity saw them dramatically slash funding for HMRC. That means less tax inspectors - the inability to speak to anyone without a lengthy hold and *that* hold music.
A government in need of tax revenues could hire tax inspectors to go and recoup it. Plenty of stories out there of plenty of big tax monies not flowing to HM Treasury. But as the people getting away are Tory friends and patrons, there wasn't the political will.
We are all going to hate Reeves's budget on here of course.
We haven't liked any of the 63 versions the Telegraph has published since July 5th.
I have to spend the next 72 hours being studiously neutral and factual about the budget.
Good morning
Labour’s message this morning is the Autumn Statement will be unpopular but judge us in 4 years time
There are some pre announced measures that will be popular including rises in the NLW but as always the next few days will provide a clearer picture, but then we have the conservative leadership result and from next week it will be all about the POTUS
The question is will the electorate give the government 4 years to judge their performance or will they not ?
Absent a revolution I don't think the electorate has much choice?
Well SKS could go for a snap election in January if he's feeling particularly (politically) suicidal.
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
It’s all relative. Say you’re a business with 100 of sales, total costs of 85 of which payroll is say 40. That’s quite typical. A 2% employer NI rise would cost just over 0.5, after tax deductions. When the last government raised CT to 25% that was closer to 1 on those numbers, straight to the bottom line.
Depends on the business. Some (see StillWater's example above) will be hit a lot harder than that.
The numbers in that example are hysterical fantasy horror. How can a 2% increase in the cost of 15 staff (also capped at UEL) possibly be 1.5 staff?
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
Obviously teh workers will pay for it , private companies do not have a magic money treee like the public sector. Means either employing less people or no wage rises till they make up the losses. Economics for idiots.
Business employing fewer people and increasing efficiency is actually a good thing for our economy if you look at it from a macro perspective.
So long as:
1. Efficiency actually rises, rather than the company contracting or failing to expand overall. 2. The changes don’t lead to an increase in unemployment.
There is huge unfulfilled demand for staff in several sectors, including health care, care and construction. Now the reality is a lot of people don't want those jobs but I think we are a long way from significant unemployment regardless.
NHS employment is at an all time high (I believe) - 1.3M FTE and up 30% since 2009.
Have we all got that much sicker over time? What are all those people doing?
Basic demographics mean that our rapidly ageing population could on average get less sick over time, and we’d still need ever increasing amounts spent on health and social care. It’s just the maths.
Every developed economy has the same insurmountable problem.
I’m talking about headcount not spending.
We hear that retention is a problem therefore we much increase wages (and hence costs). But if headcount has gone up by 30% and health outcomes haven’t improved shouldn’t someone ask whether we *need* all those people in the NHS?
Releasing 300K FTEs would also help with shortages in other sectors
On topic, the joy of politics is that the counterfactual can turn into the factual.
Truss was right.
We need economic growth and we need it consistently over a sustained period. We have cut and shrunk, shrunk and cut our economy over a long period, with the biggest contraction in the last decade when we were at our most vulnerable.
Truss was wrong in that she thought the way to growth was slash taxes and spending, but she also wanted investment. Borrowing to invest - and the delivering a return on that investment - is NOT bad economics. It is capitalism. And when the state borrows to invest in capacity, skills and infrastructure it has a long-term benefit.
At the same time, we need to cut the crap. We had dug ourselves into the ground when it comes to digging into the ground. We spend hundreds of millions on reports and surveys and impact assessments *without actually building anything*. The Tories gamed house planning so that the developers always beat the council. Not that the developers built what was needed. Do the same but *for the state*. We need to build this, it's going here, please accept this mitigation (or don't), start building. For housing we must have local people involved as its their communities being expanded, but the answer cannot just be "no".
Sadly I expect nothing from the Chancellor to drive growth, to drive investment, to try and course correct the UK so that we're comparable with France or Germany or Spain or the Netherlands or any of the rest of European nations who aren't as crushed by cuts as we are. Unless she pulls a massive rabbit out of the hat, Labour have already failed.
I wish people would stop saying Truss was right that we need economic growth. I say this because the value of economic growth was not some great revelation Truss gave us, it’s literally economic orthodoxy and something >90% of politicians agree on.
I think certainly during the David Cameron/Osborne period the primary goal was not economic growth but instead deficit reduction (through spending/investment cuts).
Understand thar it's Budget day, but not much comment so far on the Barrow-in-Furness shipyard fire. I find it to be a little concerning, as there're also been several fires at military-linked areas in Germany recently.
The corporate tax roadmap will be one of the bright spots and has been well consulted. Aside from possible employer NI rises this one is looking pretty decent for companies, all things considered.
Is it ? Well over half the anticipated tax increases fall on employers - and the well above inflation minimum wage rise will also drive up employment costs. Businesses employing few people will do fairly well; the rest get something of a caning.
Whether that all works out depends a lot on what's done on the spending side.
Obviously teh workers will pay for it , private companies do not have a magic money treee like the public sector. Means either employing less people or no wage rises till they make up the losses. Economics for idiots.
Business employing fewer people and increasing efficiency is actually a good thing for our economy if you look at it from a macro perspective.
So long as:
1. Efficiency actually rises, rather than the company contracting or failing to expand overall. 2. The changes don’t lead to an increase in unemployment.
There is huge unfulfilled demand for staff in several sectors, including health care, care and construction. Now the reality is a lot of people don't want those jobs but I think we are a long way from significant unemployment regardless.
NHS employment is at an all time high (I believe) - 1.3M FTE and up 30% since 2009.
Have we all got that much sicker over time? What are all those people doing?
Dealing with us getting older. And older, and older.
That’s explains the cost (more expensive intervention) but I don’t believe that the throughput or the number of beds has increased.
There can only be one patient in any bed at the same time (😇) and there aren’t noticeable voids. It’s possible that the nurse:patient ratio has dropped (lower productivity) but that health outcomes haven’t improved
My father nearly died of neglect in hospital. Despite being in a ward where there were staff present all the time. In fact it was a bit cramped - not vast amount of space between the beds.
The biggest issues were the lack of continuity, I think - seemed like a new people reading the chart, every time - and decision making. They were reading the chart. Then not doing something about the obvious. It was obvious to me, when I saw it.
Apparently Allegheny county (Pittsburgh) should count relatively quickly this cycle.
In 2020 it was
Biden
430,759 59.43%
Trump
282,913 39.03%
That’s a good one to note. The early counts can still give a good impression of the swing from last time, even if last time was 60/40.
Not that the vast majority of the American media care about such details, they just look look at the absolute result and only note those that actually go the other way.
I wonder if the poor WASPI women will get their compensation
Not sure anyone should be compensated for a grotesque inability to pay attention over a multi year span of time.
I remember all the publicity at the time. It grabbed my attention because it looked at first as though I would be the first age group affected. Turned out I was the last age group not affected. But the publicity was certainly there.
What are people watching for in particular in the budget? I think overall it will be considerably less lurid than a compendium of the last two month's articles from the Telegraph.
Me:
- Local Council funding. - All the possible changes around lifetime gifts, inheritance, taxation of estates & trusts, exit tax as per other countries etc. - Where things can be significantly improved by minor adjustments, eg the £100k tax level cliff edge, make tax breaks less on large tonka-trucks than small tonka-trucks - which the last Govt ran away from. - Excise Duty on fuel, which I think will be in the range +6.7% to +10%. - VED, and possibly tax reliefs around electric vehicles. - The things in the small print undergrowth.
Changes around transport, especially around things changing basic priorities of Highways Authorities to get rid of "car-brain". Various quite nerdy but important transport infra things, like secure mobility aid and cycle parking (ie hangars) being a mandatory part of residents' parking schemes especially in areas without garages.
The measure that would have the largest potential impact on me would be a shift of Council Tax liability from T to LL, which in my area is potentially eg £1800 pa changing on a property that rents for £9000 pa. It's a detail in the Proportional Property Tax proposals. Less significant in the wealthier areas where relatively less Council Tax is usually paid.
On Landlord paying council tax that was always the case for most rental property in Northern Ireland.
Going to cause problems here though because it shifts a legal requirement from the tenant to the landlord and increasing the rent to cover the new bill is going to be awkward especially if the tenant doesn't currently pay full council tax.
At the lower end it's a particular issue because many of those Ts who get Local Housing Allowance also get Council Tax benefit, so it would potentially be new tax money in the mix.
There is precedent in exempting residential rented property from targeted wealth taxes in the case of I think Annual Tax on Enveloped Dwellings, which is an annual levy on UK dwellings owned by companies worth over £500k. Originally it was targeted at overseas owners keeping personal properties empty, and is very roughly 1% of property value. Raises ~£120 million per annum. https://www.gov.uk/guidance/annual-tax-on-enveloped-dwellings-the-basics
Comments
Most assessments of UK health spending find that increased chronic conditions and better technology (keeping people alive) are the reasons it's increasing so much. England's demographics are actually quite balanced due to immigration, yet their spending has increased just as much as ours has in Scotland.
Most demographic-linked spending in the UK is made in the last 12 months or so of life. You-only-die-once, so that doesn't matter too much except in the 2030s when we have lots of Boomers reaching their 80s. But a small blip, relatively.
Austerity saw them dramatically slash funding for HMRC. That means less tax inspectors - the inability to speak to anyone without a lengthy hold and *that* hold music.
A government in need of tax revenues could hire tax inspectors to go and recoup it. Plenty of stories out there of plenty of big tax monies not flowing to HM Treasury. But as the people getting away are Tory friends and patrons, there wasn't the political will.
This government has the time. They have the majority. Do they have the other characteristics required? We will find out today.
We have a weird phobia of state investment here.
A fair bit of the productivity problem is that people are spending so much effort fighting IT, heating systems, roofs that leak and so on, that there's less capacity to deal with the main job.
People rightly lament the British tendency to throw bodies at problems, rather than investing to do them more efficiently. What they often miss is that the government is the worst culprit, and the government is that way because the electorate wants it that way.
Me:
- Local Council funding.
- All the possible changes around lifetime gifts, inheritance, taxation of estates & trusts, exit tax as per other countries etc.
- Where things can be significantly improved by minor adjustments, eg the £100k tax level cliff edge, make tax breaks less on large tonka-trucks than small tonka-trucks - which the last Govt ran away from.
- Excise Duty on fuel, which I think will be in the range +6.7% to +10%.
- VED, and possibly tax reliefs around electric vehicles.
- The things in the small print undergrowth.
- Shifts in funding around Justice and the Prison System towards clearing backlogs, and rehabilitation.
Changes around transport, especially around things changing basic priorities of Highways Authorities to get rid of "car-brain". Various quite nerdy but important transport infra things, like secure mobility aid and cycle parking (ie hangars) being a mandatory part of residents' parking schemes especially in areas without garages.
The measure that would have the largest potential impact on me would be a shift of Council Tax liability from T to LL, which in my area is potentially eg £1800 pa changing on a property that rents for £9000 pa. It's a detail in the Proportional Property Tax proposals. Less significant in the wealthier areas where relatively less Council Tax is usually paid.
Still, let's look on the bright side.
'From stalling to falling. Life expectancy decline hits economy and workforce'
https://ilcuk.org.uk/life-expectancy-decline-hits-economy-and-workforce/
But if we want more state investment I suggest we build some more roads - actually one of the things this country can do pretty well.
Going to cause problems here though because it shifts a legal requirement from the tenant to the landlord and increasing the rent to cover the new bill is going to be awkward especially if the tenant doesn't currently pay full council tax.
Independent analysis shows a big underestimation at the time of the last budget of the funding to stay still (I've seen between £40 billion and £80 billion). The above indicates issues with the numbers provided by the Treasury. Not clear if OBR were suspicious of them at the time, but Hunt definitely doesn't want them looked into now.
What IS certain is that state investment, whatever its occasional successes, is excellent at creating white elephants. The private sector has a strong incentive to invest in efficient and profitable investments, while the state will usually choose politically correct and wasteful rubbish like green projects or HS2 or our coal mining industry in the old days. And the private sector is much better at controlling costs and has a much stronger incentive to pull the plug on investments that underperform - otherwise it loses money and can be sued by irate shareholders. While the public sector will simply carry on until there's a fiscal crisis, as the taxpayer can be forced to pay.
Not recognising one might be honest if wrong, but acknowledge assumes knowledge of the problem.
We haven't liked any of the 63 versions the Telegraph has published since July 5th.
Yes, it's the best innovation in type 2 diabetes of my professional lifetime, alongside ambulatory monitors for insulin dependent diabetics.
Chronic* diseases require a lot of personnel and infrastructure to monitor and treat complications, so labour intensive. They also feed off each other, so patients often have vascular disease, arthritis, blood pressure etc. Hips and knees last longer when carrying less weight.
Chronic diseases are also often amenable to public health interventions, such as designing in active travel to how we live, and require patient education and engagement. No one can follow the diet for someone else, and no amount of medication makes up for that.
*chronic disease is defined by duration rather than severity, compared with acute disease.
Base rates have little impact on public borrowing. Gilt rates with durations of 10-30 years do. If the government can roll over the debt that becomes payable each year at rates that are below current expectations then this may create more headroom. But the money we borrowed when gilt rates collapsed after 2008 will have to be refinanced at much higher rates than it was initially borrowed at. The debt interest element of public spending is going to rise markedly over the next 10 years or so.
Nobody has picked up on the reference to the film Se7en in the headline.
Our tax gap for large business is one of the smallest in the world. In fact, by most measures our total tax gap is one of the smallest in the world. A lot of that is explained by the fact we have a much smaller informal economy than many of our peers, and cash is less prevalent. But even here, with the smaller taxpayers you really need boots on the ground and technology because there are so many of them.
I suspect for Rishi and Hunt it was more 30/40/30.
Some interesting data on HLE here, and on the inequalities around it.
https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthandlifeexpectancies/bulletins/healthstatelifeexpectanciesuk/between2011to2013and2020to2022#:~:text=Healthy life expectancy (HLE) at,, 60.3 years for females).
"Using anonymised data from personal tax returns, we show that in 2015-16 the average rate of tax paid by people who received one million pounds in taxable income and gains was just 35 per cent: the same as someone earning £100,000. But one in four of these paid 45 per cent – close to the top rate – whilst another quarter paid less than 30 per cent overall. One in ten paid just 11 per cent—the same as someone earning £15,000. The rich, it seems, are not all in it together."
https://www.lse.ac.uk/research/research-for-the-world/economics/how-much-tax-do-the-rich-really-pay
There seems to be signifiant scope to target those paying the 11%.
Exclude the last 12 months and the remaining roughly 50% is not spread evenly across the rest of your life. Apart from childbirth, which on average is now happening less than once per adult, it's vastly disproportionately in your later years.
That later years expenditure is happening in increasing amounts on top of, not instead of, last 12 month expenditure.
Except that Reeves plans to open the box and take the money.
1) Pick The Winner. Just after the war, Hydrogen Peroxide (H202) looked like an interesting idea as a way to run a turbine engine underwater in a submarine. The Americans set up a small test program. The UK went all in. Which led to HMS Exploder and HMS Excruciater. And a very expensive plant for making H202.
The Americans then built nuclear submarines.
2) Double down on the mistake. When it came to picking rocket fuels in the late 50s, the Ministry of Supply was demanding H202 *rockets* - to use the investment in the expensive plant for (1). Which led to an expensive dead end - liquid oxygen is far cheaper. Go look in the Science Museum....
3) Actively suppressing alternatives. In the case of H202, liquid oxygen projects were blocked on the grounds that they might "compete" with The Chosen Solution.
When I have spoken to politicians (about a DARPA style scheme) they always say lovely, but
A - must pick winners
B - back them massively
C - a strange one - the politicians seem worried by it being *too* commercial.
For a more modern example, see the UK "investment" in computer technology in the 80s - the civil servants were damning Thatchers interest in the useless, pointless home computer scene. Rather than following the Proper Policy - mini computers. Anybody remember mini computers?
Budget Day - don't you just love it, and a change from being in the middle of Cheltenham or something more important.
The Party's over - we all know that. It probably ended in 2008 if truth be told but since then we've staggered on unable or unwilling to leave and now we've emerged into the cold darkness of 3am, drunk and looking for a cab home.
The basic premise is we can no longer afford to run the State we want on the taxes we actually pay (and other income received). The castle of Scandinavian quality public services on American style levels of personal and corporate taxation was built on the kind of sand you find in places where you can do it if you have massive revenues from oil.
To square the circle, you either raise taxes or cut spending or, in all likelihood, both. The key has to be to reduce the deficit - I'm more sanguine about borrowing especially for long term capital infrasatructure projects but we shouldn't be borrowing to buy a pint of milk and something for the cat.
It's becoming clear Hunt's two NI cuts were nothing more than "salting the earth" for the incoming Government. Ken Clarke famously resisted calls for pre-election tax cuts in the mid-90s because he understood bequeathing the best possible inheritance to his successor was his duty - the successor could ruin it, and did in time, but in the short term it was in everyone's interests for the UK to have a strong economy even if he and his Party were no longer managing it.
So, pain today, unpleasantness tomorrow seems the likely outcome of today's activities. I worry for local Government in the coming financial round - plenty of councils are already on the edge and wholesale Section 114 notices in January and February won't look good.
As so many others have said, because we can't have an honest discussion about tax in this political culture, Reeves and Starmer were forced to close off the more obvious avenues of tax raising such as moving basic rate to 25% and higher rate to 50% (while unfreezing thresholds).
The biggest economic issue I see is under-employment which is a growing problem with the demand for workers no longer being met by an adequate supply.
Without the “mission” of “getting the deficit down”, some sort of success criteria, and a vision of sunlit uplands, it won’t work. Also, Labour’s natural voters may not respond as well to baby eating as the Tory voters did.
My first mistake was to take off the 2 week sensor not the 3 day pump at first change, and then having kittens whether there were complications with the Bluetooth sensor to pump link or WIFI / 5G pump to upload portal link, and putting things on in the wrong order would brick the sensor.
I did not like the image of turning up on my GPs on day 4 like Oliver Twist: "Please can I have another £112.50* of sensors, Sir - I killed the others working out how to connect them?".
The enthusiasm of the Specialist Nurse for "KEEP IT IN AUTOMATED MODE" was interesting, but there are so many variables and parameters (dozens) that fiddling with things could lead to a downward spiral of fiddling with more and more things.
* A 15 day sensor costs the NHS £37.50 a time. So they are quite tight with them, for obvious reasons. A retail purchase is in the UK is about £175 for 3, online.
Good! What was written was disgusting.
I am however looking forward to the regeneration. Not for the postings but for the initial intrigue.
I have clocked the bit about a DARPA being “too commercial” and it is hilarious. We are so bad at capitalising on state created IP in this country.
We also have a separate issue in that the Government doesn't pay enough for experts to work for them and worse doesn't understand that if you are running an IT project - you want to person accepting delivery to actually understand what is being delivered. A lot of IT projects would be more successful if they allowed the development team to be embedded with the people using the system or if they employed a second consultancy to take validating the finished delivery.
Labour’s message this morning is the Autumn Statement will be unpopular but judge us in 4 years time
There are some pre announced measures that will be popular including rises in the NLW but as always the next few days will provide a clearer picture, but then we have the conservative leadership result and from next week it will be all about the POTUS
The question is will the electorate give the government 4 years to judge their performance or will they not ?
Please post as I don't think I've heard anyone here with that particular position.
@Williamglenn ?
Another victory for my indifference.
And if you accept the proposition that government income and expenditure are horribly out of synch, then a painful reset is the right thing to do, even if it's not popular. (Yes, I am looking at you, Hunt.) What Would Maggie Do? and all that.
And if you don't accept the proposition that government income and expenditure are horribly out of synch, then I'm intrigued as to why not.
What that ignores is that if we want to succeed, we need skilled officials in skilled jobs. Not just IT professionals but a whole range of both professional skills and policy expertise. To achieve that, we must pay well (probably giving a choice as to whether some of it provides the CS pension or cash now) but hold to account for delivery.
Not doing that means we waste billions on the project, without investing in the people who can make it happen, and who represent a fraction of the overall cost.
As it is we rely on the 50% of the civil service who are excellent, and take lower wages because they love the job, to cover for the rest and get surprised then they struggle to deliver. We also keep insulting them risk even them walking away.
In 2020 it was
Biden
430,759
59.43%
Trump
282,913
39.03%
What is the reasoning behind such an absurd idea?
There can only be one patient in any bed at the same time (😇) and there aren’t noticeable voids. It’s possible that the nurse:patient ratio has dropped (lower productivity) but that health outcomes haven’t improved
If they do, they might not want to share on here to avoid the wrath of the board.
We hear that retention is a problem therefore we much increase wages (and hence costs). But if headcount has gone up by 30% and health outcomes haven’t improved shouldn’t someone ask whether we *need* all those people in the NHS?
Releasing 300K FTEs would also help with shortages in other sectors
Understand thar it's Budget day, but not much comment so far on the Barrow-in-Furness shipyard fire. I find it to be a little concerning, as there're also been several fires at military-linked areas in Germany recently.
Is this one technically a "statement" or does it get the full "budget" treatment ?
A good article from conhome and a warning to the conservatives
https://conservativehome.com/2024/10/30/labour-are-about-to-gamble-in-a-big-way-conservatives-need-to-be-aware-it-could-pay-off/
The biggest issues were the lack of continuity, I think - seemed like a new people reading the chart, every time - and decision making. They were reading the chart. Then not doing something about the obvious. It was obvious to me, when I saw it.
Not that the vast majority of the American media care about such details, they just look look at the absolute result and only note those that actually go the other way.
Trump's best odds IMO were for the nomination - so that's where I made a profit.
Good morning, everyone.
There is precedent in exempting residential rented property from targeted wealth taxes in the case of I think Annual Tax on Enveloped Dwellings, which is an annual levy on UK dwellings owned by companies worth over £500k. Originally it was targeted at overseas owners keeping personal properties empty, and is very roughly 1% of property value. Raises ~£120 million per annum.
https://www.gov.uk/guidance/annual-tax-on-enveloped-dwellings-the-basics
Residential lettings can be registered as exempt.
Why Trump could crush the British economy
A Republican win risks devastating companies that sell into the US market
https://www.telegraph.co.uk/business/2024/10/29/why-trump-could-crush-the-british-economy/