2024 UK politics - now with Labour in charge
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You say fed, but the reality is that you've just worked your way through the entire Stevo playbook and run out of posts.
“New York has the haircuts, London has the trousers, but Belfast has the reason!0 -
This is just tedious now.
I'm sure you're aware that Stevo, at least in his own mind, has never ever lost an argument on CS, and he's not going to change now.
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The flounce room?
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Desperate times at the Telegraph... here's the headline is response to the suggestion that the ability to pass on inheritance to a spouse might be capped at £10m...
"Spouses used the exemption to transfer £15.5bn worth of assets in 2021-22 whereas the next biggest relief – business property relief – shielded £3bn. This makes it by far the most valuable tax break in estate planning.
However, an academic-led think tank has proposed capping the amount that can be transferred tax-free between spouses at £10m in order to improve the fairness of the inheritance tax system."
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Even I can't get too excited about that.
However I am holding fire until I see what Reeves comes out with next Wednesday.
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
That would mean sharing a room with Rick though? What a thought...
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]1 -
Telegraph trying another angle, though somewhat undermining it by referring to pensioners' monetary "fortunes". Also, on a point of order, it's not a £10bn "stealth tax raid", but an increase of income tax, mostly (so far) because of Tory freezing of bands.
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Really interesting webinar today with the director of the IFS who knows pretty much more than anyone else about the public finances.
Most likely tax changes will be increase in employer NI and employer NI applied to employer pension contributions.
Pretty much every other tax change that Reeves hasn't ruled out will barely raise anything.
He also explained the borrowing rules change in some detail.
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Can you summarise the changes in borrowing for the financially illiterate?
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Great. I mean, not a surprise, but so stupid that they don't reverse Hunt's unaffordable cut
1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
Happy to do that in a weeks time. Lots of speculation but aside from the general view that we're going to get rinsed, it's hard to predict exactly how they will achieve it.
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
Inclined to believe the tax/borrowing measures are irrelevant to the Labour Party's long term electoral future.
Public services either improve or they don't, that's the only side of the equation that will matter.
“New York has the haircuts, London has the trousers, but Belfast has the reason!0 -
It seems to be around including some extra 'assets' such as the student loan book, and some items of infrastructure to improve the balance sheet, and therefore borrowing capacity.
The changes increase potential borrowing headroom from c.£10 bn to c.£60 bn.
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Hunt bleating on about how the treasury wouldn't let him borrow more for investment as if that makes him look good.
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I think one can "spin" Hunt's comments in various ways.
Obviously, you can take a pop at him for seemingly portraying the Tories as being prevented from borrowing more by the Treasury.
Or you can observe that the Treasury is simply relaying the facts of life, which at the moment are that the UK is so dependent on "hot money" to finance its gilts issues (*) that there are some very real constraints over how much borrowing is acceptable to such investors before they ditch their gilts and seek value elsewhere. Liz Truss's debacle highlights this fact all too well. If the PM / Chancellor lose the trust of the bond markets, then they're toast.
Hunt's comment about how Reeves should have announced things to Parliament first is definitely misplaced though. What Parliament thinks is largely irrelevant to what the bond markets think, so getting the major institutions such as the IMF "on board" first is essential. (Truss decided to bypass this stage, as she knew best, of course...)
(*) This is due to a combination of the quantum of new borrowing and rollovers there are, and that the government has run out of UK-based institutions that it can compel to buy gilts via financial regulation.
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If the combination of tax and borrowing measures keep the bond markets onside then you're right. But if the bond markets don't approve then there will be some very fast and very painful outcomes that will scupper Labour's electoral prospects, as was the case with Black Wednesday that did for the Tories in the GE 5 years later, and Truss's "mini budget" that scuppered her personally and took a lot of general Tory credibility with it.
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Other interesting points from yesterday were that the cost of servicing the public debt is more than the education budget and will continue to grow. With 25% of UK public debt being index linked gilts, we also find it harder in inflation away the debt than countries with a much lower percentage of index linked debt.
Phillip Hammond was encouraged to borrow 'loads' when interest rates were almost zero, but he refused because he understood the impact on the public finances when interest rates normalised (which is what has happened since September 2022).
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Labour apparently struggling to define a "worker" now. Having pledged to not increase income tax on workers, they have been dabbling with excluding those with income from shares or property as workers, they inevitably are now backtracking from this, after the idea of such an exclusion has had its first contact with the reality of focus groups.
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They really have tied themselves in knots with this 'working people' thing, plus ruling out any rate rises for the 4 major taxes.
Next Wednesday will be 'interesting'.
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
Oh for the days when there were sensible politicians at the helm.
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What's really interesting to me is whether Starmer and Reeves really are daft enough to believe that serious amounts of tax can be raised without hitting lots of people one way or another, or whether they knew all along that their manifesto commitments re not increasing most major sources of tax etc. were cobblers and hoped that such commitments would help them win the GE and that "something will turn up" to magically produce lost of pain-free economic growth.
I'm not sure which is worst, tbh. Well-meaning incompetence vs blatant cynicism in the face of voter gullibility is a tough one to call!
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I have admit I'm erked by the notion that anyone on a six figure salary might not be a working person. Such jobs tend to include a requirement to work fairly hard.
Now that, Stevo, is politics of envy, I can give you that much.
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I would guess their plan is to hope and plan that a combination of a few things things, gets them where they want to be.
Some adjustment to the fiscal rules
Some minor tax rises
"Stealth" tax rises through freezing tax bands
Some increase in economic growth.
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Aren't working people clearly defined as those who pay NI.
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Except the other half of one of them. Think we might see wage inflation flattening significantly.
Agree that 'working people' is such a load of class war w***.
1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
Would think it's the latter. If we all know we're going to pay more tax one way or another, who is being fooled? And they didn't do that well in terms of votes cast, just that the other options did worse.
1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition1 -
What about those working part time and earning less than £123 per week? Are they working people?
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Agree with you that while employers NI, while technically not a tax on 'working people', will end up being borne by employees as employers factor this into pay rises, bonuses etc. Assuming it happens of course - which looking quite likely.
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
Yep. There was never a threshold when this concept was floated.
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
Those who would pay NI if they earned enough. Investment income is treated differently.
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