Todays budget

[Filo]

In my opinion it will be a budget to Frame the next Govt before calling a May election, a 2p cut in NI will ensure there is less in the pot for the NHS and for Pensions, so when the next Govt have to increase NI they will be painted as the bad ones, you can see it coming a mile off

[big fat yorkshire pudding]

The opposition has spents months criticising tax levels (which are not necessarily that high compared to other countries).

So they can't criticise it now, which politically seems a bad position to box themselves in to.

Amazing how we've gone from one pm increasing NI to fund the NHS and another cutting it.

I'd change personal allowances quite substantially if I was changing anything but they've made their choice.

I'm hoping given the noise they'll finally ditch the 50-60k family tax trap this time, one of the worst tax legislations there is.

Annual posting that our tax system is too complex and outdated.

[Bristol Red Rover]

Wondering where the windfall tax will be targeted. The very rich have made lots in recent years, including Sunak, so no doubt that will be balanced out.

[Bristol Red Rover]

Oh,  and the tax on offshore investments. It might complicate things for some, but is an obvious source of revenue.

[Bristol Red Rover]

I nearly forgot, increasing CGT to fall in line with income tax.

So many ways to fund a reduction in income tax, or improve services and life quality. Who runs this country after all?

[BillyStubbsTears]

BFYP

The problem is that we simultaneously have a)The highest taxes as a proportion of GDP since the War and b) desperately underfunded public services.

That's quite an achievement by this rank excuse for a Government.

[Bristol Red Rover]

I nearly forgot, increasing CGT to fall in line with income tax.

So many ways to fund a reduction in income tax, or improve services and life quality. Who runs this country after all?

Oh, go on then, reduce it, that'll keep Sunak's millions rolling in, and still barely any tax to pay. Thank the Lord someone is benefitting.

[big fat yorkshire pudding]

BFYP

The problem is that we simultaneously have a)The highest taxes as a proportion of GDP since the War and b) desperately underfunded public services.

That's quite an achievement by this rank excuse for a Government.

And the answer to it is.......

I fundamentally think our taxes are too high.  The budget didn't go far enough but at least there was some movement on the 50-60k trap for those it impacts.

[SydneyRover]

If the UK is under performing wouldn't part of the answer be to spend money on the health system to get as many people as possible back to work?

[BillyStubbsTears]

The effect of the Child Benefit and NI decisions today.

A family with two kids and one earner on the minimum wage will benefit by £2.30 per week.

A family with two kids and one earner on £60k will benefit by £53 per week.

But the far, far bigger issue is how Hunt is paying for this.

He's making huge real terms cuts in Govt spending, at a time when public services are collapsing around us. Total Govt Department spending is going up by 0.3%, while inflation is over 4%. NHS funding is rising by less than inflation. Defence funding is being cut in cash terms, even before allowing for inflation. And there are HUGE cash terms cuts in Transport, Levelling-Up (yeah...I know...), DEFRA & Business and Trade.

Those cuts are simply not viable. Hunt has deliberately done this to queer the pitch for the next Government. Labour will have to reverse the tax cuts or it won't be able to increase public spending.

They've been like this from start to finish. Zero vision for the country beyond trying to stay in power.

[Filo]

The effect of the Child Benefit and NI decisions today.

A family with two kids and one earner on the minimum wage will benefit by £2.30 per week.

A family with two kids and one earner on £60k will benefit by £53 per week.

But the far, far bigger issue is how Hunt is paying for this.

He's making huge real terms cuts in Govt spending, at a time when public services are collapsing around us. Total Govt Department spending is going up by 0.3%, while inflation is over 4%. NHS funding is rising by less than inflation. Defence funding is being cut in cash terms, even before allowing for inflation. And there are HUGE cash terms cuts in Transport, Levelling-Up (yeah...I know...), DEFRA & Business and Trade.

Those cuts are simply not viable. Hunt has deliberately done this to queer the pitch for the next Government. Labour will have to reverse the tax cuts or it won't be able to increase public spending.

They've been like this from start to finish. Zero vision for the country beyond trying to stay in power.

As I alluded to in my OP, he’s laid the ground for them to say we told you they would raise taxes when they are in opposition, no thought at all to the state of the Country

[big fat yorkshire pudding]

The effect of the Child Benefit and NI decisions today.

A family with two kids and one earner on the minimum wage will benefit by £2.30 per week.

A family with two kids and one earner on £60k will benefit by £53 per week.

But the far, far bigger issue is how Hunt is paying for this.

He's making huge real terms cuts in Govt spending, at a time when public services are collapsing around us. Total Govt Department spending is going up by 0.3%, while inflation is over 4%. NHS funding is rising by less than inflation. Defence funding is being cut in cash terms, even before allowing for inflation. And there are HUGE cash terms cuts in Transport, Levelling-Up (yeah...I know...), DEFRA & Business and Trade.

Those cuts are simply not viable. Hunt has deliberately done this to queer the pitch for the next Government. Labour will have to reverse the tax cuts or it won't be able to increase public spending.

They've been like this from start to finish. Zero vision for the country beyond trying to stay in power.

It is ok to right the unjust of the child benefit issue AND also support those throughout the economic spectrum, tapering the child benefit more steadily is a no brainer and it should be based on household income not individuals.

As I said, I'd have gone with increasing PA thresholds personally, but they didn't.  NI is at least better than income tax.

Filo, labour support the tax cuts, they can't really go back now;

per Labourlist; Starmer pledged Labour would support cuts to national insurance, because it had “campaigned to lower the tax burden for the whole parliament” - that's pretty clear.

[Glyn_Wigley]

I am continually annoyed by the figure that Hunt and the rest of them keep trumpeting is how much they've increased the spending on the NHS.

What they never tell you is that that figure includes all of the billions they threw away on dodgy PPE contracts that the NHS never saw one penny of.

[tommy toes]

It's simple really.
The Tories know they will lose the next election so are doing everything they can to make sure things are as bad as Bradfords pitch for when that happens.
See how many times he goaded the Labour benches about them being the party of higher tax.
He's preparing the ground for opposition.
In the meantime the country can go and play wi it's sen.

And...he's spending the Nom Dom money on tax cuts to stop Labour using it on public services.
Evil.

[Branton Red]

I think we can expect an autumn General Election given the Budget delivered today.

Perhaps with a mini-budget in advance of it passing tax cuts (e.g. inheritance tax?) in April 2025.

Tax cuts which of course would be reversible if Labour get into power.

Giving the Tories their election/damage limitation offer to the blue wall

[BillyStubbsTears]

If Gordon Brown had f**ked about like this, he would have chosen not to use fiscal stimulus to pull the country out of the depth of the GFC. Then we'd have had a second Great Depression and the Tories would have had to pick up the pieces.

Of course he didn't, because he's a politician who actually respected the gravity of his job. Unlike this bunch of shites.

Watch the first 3-4 minutes of the Budget speech and see Hunt deliberate goading Labour. They have nothing at all to offer but the desire to stay in power. Clear the f**kers out.

[wilts rover]

According to the Chancellor of the Exchequer in Sept 2020 the only way to reduce NHS waiting lists and rebuild social care is to  increase National Insurance. "Anything else would be irresponsible and dishonest."

https://twitter.com/BestForBritain/status/1765419440949100809

And yet the Tory Posh Boys think Labour voters are mugs!!!

Vote Tory - keep the liars in power.

[wilts rover]

Best commentry I have seen on the Budget today:

So much of today's Budget was the political equivalent of Sheffield United issuing their plans for consolidating their place in the Premier League next season.

https://twitter.com/StewartWood/status/1765384448248271155

[SydneyRover]

''Tax cuts announced in Wednesday's Budget will not make up for the impact of tax increases and rising prices, a leading think tank has said.

The Institute for Fiscal Studies (IFS) said households would be worse off at the election, expected this year, than they were at the start of this parliament.

The chancellor has announced a cut to National Insurance worth £10bn''

https://www.bbc.com/news/business-68489236

The school posted his report rather than allow him to hand deliver it.

1 from 5 of big pledges

[Sprotyrover]

Can’t wait for a Labour government to get into power and open up our Veins with a £38 Billion annual Green levy,Cough cough!

[BillyStubbsTears]

I read an economist on Twitter at the weekend saying: Watch how journalists fall for this Budget. They'll allow Hunt to say he's cutting taxes to grow the economy and will ask him nothing on how public spending will be cut to balance the books. Then they'll ask Labour "Will you reverse these tax rises or cut your planned spending policies."

I've just heard a journalist on R4 doing PRECISELY that. It's awful, lazy journalism. Doing the Govt's job for them without even realising what they are doing.

[albie]

A summary of the pantomime budget dance today;
https://tribunemag.co.uk/2024/03/the-golden-goodbye-budget

The ludicrous idea of "fiscal rules" is the gift that keeps on giving.
Combine that with "maxing out the credit card", and you have comedy gold!

[BillyStubbsTears]

Albie.

There IS a logic to fiscal rules in that you cannot pay for day to day spending forever by borrowing. That's effectively why the Truss-Kwarteng Budget was such a catastrophe, because they proposed huge tax cuts without saying how they were going to balance the books. Hunt is taking a vaguely similar stance because he's saying he WILL balance the books by huge spending cuts, but no-one really believes it's possible.

There's no arguing against that. You HAVE TO balance the books on taxing and spending for day to day costs. Corbyn's manifesto in 2017 said that explicitly.

It's different on capital spending, investment, because most economists believe that investment pays for itself in the long run by making the economy more productive. The disaster of the Tory Govt has been that they have slashed capital spending, and our productivity has tanked.

Reeves gets this (although I'm not convinced Starmer does). The problem is, the electorate doesn't. That's why Labour felt forced to ditch the £28bn green pledge, because the Tories were saying "Oh, typical Labour! Borrowing and spending".

My hope is that once they are in power, Labour WILL borrow for capital investment. They'll take a hit from the Tories on that, sure, but the trick will be if it gets the economy firing so that by 2029, we'll all be better off.

[Bristol Red Rover]

I read an economist on Twitter at the weekend saying: Watch how journalists fall for this Budget. They'll allow Hunt to say he's cutting taxes to grow the economy and will ask him nothing on how public spending will be cut to balance the books. Then they'll ask Labour "Will you reverse these tax rises or cut your planned spending policies."

I've just heard a journalist on R4 doing PRECISELY that. It's awful, lazy journalism. Doing the Govt's job for them without even realising what they are doing.

Thats Labour painting themselves into a corner.

[albie]

Sorry BST, but your first point is simply incorrect.

Fiscal rules were a New Labour invention from 1997, designed to provide a camoflage cover for political ends.
These rules are revised on a regular basis, once it becomes clear they will not deliver the stated objectives.
 
Modern versions of fiscal rules are about slightly reducing the overall national debt at the end of a 5 year period, and do not relate solely to day to day spending.

Sometimes governments have looked to reduce the overall deficit (ie, the difference between total spending and total revenues), while another administration may aim for the current deficit (the difference between day-to-day spending and total revenues).

If the overall deficit is the aim that will constrain investment spending. A fiscal rule for the current deficit does not restrict Capex.
The Net Debt rule looks to see debt falling in fifth year of the forecast period, as a % of GDP, (excluding Bank of England).....Why, there is no rational reason for this?

Chancellors have no way of knowing what GDP will be 5 years down the line, it is subject to the wider international economy.
Likewise Public Sector Net Borrowing should not exceed 3% of GDP in the fifth year, another known unknown.

All fiscal rules are set to a policy plan, and intended to be countercyclical, allowing for deficits in recessions but encouraging surpluses in growth phases.
The Tories have no plan, and Labour are not offering one. Having fiscal rules not moored to a development plan is simply irrational in the extreme.

Governments do not have to balance tax and spending over an arbitrary artificial timescale, which is what the fiscal rules are set to do.
It makes no difference because government are borrowing from the Bank of England...it is one part of the state loaning to another, without any requirement to repay on a set schedule.

Taxation should be increased on the top wealth holders to provide capital expenditure for infrastructure, but Labour have ruled that out.
There is no indication that Reeves has understood that if you want to improve growth, then that funded investment must come first.....so say that clearly!

[SydneyRover]

https://twitter.com/RMTunion/status/1765374018859704413

''Responding to the Spring budget, RMT general secretary Mick Lynch said:

"This is a budget of tax cuts and gimmicks designed to thinly disguise a Tory government only interested in propping up the super rich.”''

[drfchound]

There is no denying that both albie and bst have great awareness of political financial situations but when you read their contrasting views, is there any wonder that the general public at large and have no idea what really goes on.
In his reply a couple of posts before this one, bst himself acknowledges this.
I have seen both Reeves and Hunt interviewed on the beeb this morning and both seemed unable to provide clear answers to some of the questions put to them. Each tried to suggest they are right and the other was wrong, a bit like on here.

[BillyStubbsTears]

Albie.

If you're saying there's no need for fiscal probity, you are 100% wrong.

But I think we are talking at cross purposes. I'm talking about the principle. You are talking about the practical application. At least I hope you are, because if you're denying the principle exists, there's not much point in us carrying on.

1) Fiscal rules AS A PRINCIPLE are absolutely correct. For the reasons I gave above. You cannot permanently find current spending from borrowing. Just like you can't fund a lavish holiday every year by borrowing.

2) You CAN fund current spending by borrowing in an emergency. If you lose your job, you can take out a loan to put food on the table for the next few weeks. BUT, you can only do that temporarily. If there's no prospect of you ever getting off the need to borrow, no sensible lender is going to lend to you. Or if they do, they'll want a kneecap breaking return.

Exactly the same thing happens with Governments. They CAN borrow to fund education and the NHS and defence etc when hard times hit. But only if there's a credible path to rebalancing the books when the economy recovers. It was precisely the lack of that plan that led the markets to demand higher interest payments from the UK following the Kwamikasi Budget.

3) So, it's absolutely indisputable that Governments MUST balance the books in the long term. In that sense, a Fiscal Rule is an ironclad rule of economics.

4) I think the difference between us is on 2 things. 1. There's no definitive timescale of what constitutes the term TEMPORARY I mentioned in point 2. Should we balance the books over 1 year or 10 years? In practice, both Lab (under Corbyn too, remember!) and Con are saying that they want the books to balance over 5 years. And this gets called THE Fiscal Rule,which I agree, it isn't. It's a practical interpretation of the underlying fiscal requirement. 2. As I said last night, any balancing of the books shouldn't include borrowing for investment.

[BillyStubbsTears]

Albie

Couple of other points.

1) BoE. It's not as simple as saying it's one part of the state borrowing from another. Because the BoE also has responsibility for inflation. And this is why that complicates things.

BoE lends to Govt effectively by printing money. But that increases the overall supply of sterling. And, all other things being equal, increasing the money supply increases inflationary pressure. Which would require the BoE to increase interest rates to offset that inflation. Which depresses economic activity. Which reduces Govt income from taxes. Which means the Govt needs to borrow more. Doesn't work over the long term.

2) If I may say so, your criticisms of Reeves are based on you assessment of what she should be doing in an ideal world. I agree that we ought to be having a rational discussion on timescales for balancing current books and we should be open in saying that capital spending is different. I couldn't agree more!

Trouble is, down here in the real world, you have to get elected. And the Electorate is not interested in the nuance. Our media has failed the country by painting ALL debt as bad. So all the Electorate want to know is: will you be responsible on Debt?

No-one is interested in engaging on a properly detailed discussion on these points. If you don't believe me, go back to 2010. There was absolutely no question then that we had to be engaging in massive fiscal stimulus to stop the economy flatlining. But that argument simply didn't cut through. Everything was about reducing the deficit.

That's politics. It's a very un-ideal world. As someone once said, most political parties know what to do. They just don't know how to do the right thing AND get elected.

[SydneyRover]

Albie: ''Fiscal rules were a New Labour invention from 1997, designed to provide a camoflage cover for political ends.

These rules are revised on a regular basis, once it becomes clear they will not deliver the stated objectives''

Cannot find anything to support the first sentence Albie, can you expand on what was being covered up? hope it's not another conspiracy theory.

The Brown policies were a progression and refinement of what went before.

1/ ''Gordon Brown’s first and main policy, when nominated Chancellor in 1997, was to reform the monetary framework by enforcing three major changes dedicated to maintaining price stability. He replaced the inflation target margin by a symmetrical inflation target rate that would correspond to a bearable equilibrium rate supporting growth. He created a Monetary Policy Committee at the Bank of England; he granted it complete independence in deciding and implementing any measure needed to reach the government’s target. He reinforced forward looking, asking the Committee to forecast inflation rates and to take corrective measures now, so that the rates would match the target in the future'' .............

14/ ''Naturally, Gordon Brown’s construction of a new monetary framework did not come out of the blue. It found its origins in progressive theoretical thinking and recent partial implementation''

https://journals.openedition.org/osb/1124