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Is it? Seems that if VAT stayed the same prices would go up.
It's a tax break for the energy sector. As I said, he could have controlled prices rather than letting the money households pay to energy companies go up. That would be a sign that his lines about more public control weren't just lines. But importantly the VAT decrease will be difficult for political opponents to, er, oppose... because it sounds like it's cutting bills.
Leaving Darren Jones out may come back and haunt Burnham.
I dont think the VAT cut is a political con but I also doubt it will be noticed. Between increased prices and people paying by direct debit most people wont notice so whilst they will be paying 5% less than they would have done, they wont see that.
Personally Id rather see increased infrastructure spending rather than short term tax cuts, 0roperly sort out the grid to facilitate more rapid renewables implementation, sustianably (fiscally and environmentally) lower bills.
Burnham appears to going a bit Labour old school, as a country we need a properly argued long term strategy for the country, not the immediate change today demanded by voters.
Itll work.for a few months I suppose.
I dont think the VAT cut is a political con but I also doubt it will be noticed. Between increased prices and people paying by direct debit most people wont notice so whilst they will be paying 5% less than they would have done, they wont see that.
The folk that can afford it most will benefit the most and notice it the least. I'd much prefer measured targeted at the least wealthy. However, it's a relatively simple change, requires no means testing and at least signals some intention. Hopefully those who need it most will still appreciate it.
Day one - first policy statement, VAT dropped from energy bills.
Also day one - "He should have privatised energy".
I have no problem with energy being privatised as I can just move supplier.
Octopus have proven good service and prices can beat the established names.
Water on the other hand - I have no choice who I buy from and they have a monopoly.
Also day one - "He should have privatised energy".
Do you mean nationalised? I wasn't calling for that, I was suggesting that rejecting the rise in the price cap would be showing "greater public control" over energy. Like others, I think if there's any additional nationalisation to happen in the near future, it should be water... the case there is clear to me. I don't think he'll do much there though. Hope to be proven wrong.
as a country we need a properly argued long term strategy for the country, not the immediate change today demanded by voters.
There's no real reason you can't do both. Throw a few bones early on while also developing a longer term plan.
Starmer's mistake was arriving in power with a massive landslide sand then saying "things are still shit and may get worse".
A token gesture of a tax cut would have given him a lot of leeway to work with.
It's a tax break for the energy sector. As I said, he could have controlled prices rather than letting the money households pay to energy companies go up.
Energy prices are already controlled by the price cap. The price cap includes a set margin for energy suppliers so they're not going to be pocketing the difference.
Also, the personal allowance should be lowered because everyone should contribute to society, otherwise you create a two tier system with a non contributing underclass that is funded by the tax payers. That is not a fair society. You also disincentivise aspiration because people will not want to take a pay rise that takes them above the threshold and then makes them a tax payer (as we see currently with the £100,000 child benefit taper). Tax on the median taxpayer in this country is already low by international standards.
It's a tax break for the energy sector.
How is it a tax break?
Energy companies collect the VAT and pass it on to HMRC. Just as every other business that collects VAT does.
However, it's a relatively simple change, requires no means testing and at least signals some intention.
This. It needs some minor systems changes at the energy suppliers' end (probably just arranging for a different VAT code to be applied to one stage in their billing process; no development, very little testing) and probably some changes within Govt HMRC/Treasury to match. There'll have to be some recalculation of Direct Debits etc. No doubt I've missed some things. But generally fairly straightforward by the sound of it.
How is it a tax break?
Okay, as an example... there's currently a large campaign for a VAT cut for hospitality, similar to the one during the pandemic... if they were granted that, would you call it a tax break for the hospitality industry?
Also, the personal allowance should be lowered
Just remembered that Gordon Brown tried something like this, when he scrapped the 10p tax band, but argued that the money raised from those on the lowest incomes came back to them in tax credits*. Both Burnham and Healey have been around long enough to know how that went down. They won't be making that mistake again. People on PAYE can see any hit in Income Tax on their payslips... it's obvious in a way that other tax impacts are not.
[ *2008 ]
Do you mean nationalised?
Erm yes 😳
I often make the exact same slip up.
But... to be clear... nationalising the energy bill collectors*, or existing energy generators, is way off my radar. Not worth considering at all. Water on the other hand....
[ *it's happened before though, briefly, with Bulb... before Octopus bought it back of the state ]
Also, the personal allowance should be lowered because everyone should contribute to society
What lower band rate would you suggest?
Tax on the median taxpayer in this country is already low by international standards.
That I do agree with.
Streeting has been given another impossible job... Defence now.
To be fair, at Health he managed to beat all the targets the government had set for appointments.
Miliband has been neutered being given the FO job, imho... leaves me worried about fossil fuel policy.
Good to see Rayner back in her brief, especially with the new PM talking up council home building.
What lower band rate would you suggest?
20k and all thresholds pegged to inflation. Expensive yes, which is why we need to tax wealth via CGT, IHT, VAT and a new land value tax (replacing council tax and stamp duty) to recoup the balance.
Okay, as an example... there's currently a large campaign for a VAT cut for hospitality, similar to the one during the pandemic... if they were granted that, would you call it a tax break for the hospitality industry?
It depends how they used it. If they reduced prices accordingly to get more people through the door then no.
If they kept prices the same and pocketed what they would have given over to HMRC then yes.
I'm in two minds about any VAT reduction for hospitality anyway. It's a supply and demand business - the good ones are still busy the bad ones will close. And society is changing how people treat themselves.
Energy is a different ball game to going to the pub.
I'm in two minds about any VAT reduction for hospitality anyway.
Slashing business rates (which he's already talked about) for small businesses is a much better way of supporting the hospitality industry (and other industries based on the high street)
Taxation doesn't need to live in balance as such - it just needs to redistribute against years of skew to the wealthy.
Mark my words Burnham will absolutely have to run larger deficits if he's going to 'end' Neoliberalism.
(Of course he will have to tax those with more.)
But better to stop thinking about it all as 'pay-fors' or we will just go back to what we're trying to avoid.
A circuit breaker needs to be a circuit breaker.
Millipede should be dealing with NHS.
It'll be interesting to see if anything is done about the VAT on public car chargers. This extends the benefit available to those rich enough to own an electric car and be able to charge it at home compared to those who can't.
Also, the personal allowance should be lowered because everyone should contribute to society,
People earning below the personal allowance for PAYE are still paying tax elsewhere… and they may well be contributing to society in myriad other ways in addition to paying a range of other taxes that we all pay. See carers, volunteers, artists, etc etc.
otherwise you create a two tier system with a non contributing underclass that is funded by the tax payers.
As above… and there are very few non tax payers in the UK… and that so called underclass is not funded by tax payers. We are all funded by government spending to some degree. Government spending is not, as far as I understand, funded by tax. The govt spends money it creates. Tax is used to offset the inflationary pressure of money creation and also to shape the behaviour and structure of society.
I reject the idea that a persons worth or place within a so called underclass or otherwise is determined by their wealth, income or ability to pay tax (or the lack thereof).
Going back to the energy price cap, isn't there a disclaimer that mentions changes in the prevailing VAT rate meaning that the cap can fluctuate if VAT goes up, or in this case, down?
Yes, hence the government using language like “energy companies are expected to” in terms of what happens to prices here. If companies use wriggle room in energy price cap rules they could be in for a shock with future government measures.
Interestingly, in NI the VAT cut can’t happen so instead households will be helped directly. Why not help directly here as well? Not least because they could cap or target the help. Not sure VAT free heating of swimming pools and stables is well targeted help.
People earning below the personal allowance for PAYE are still paying tax elsewhere… and they may well be contributing to society in myriad other ways in addition to paying a range of other taxes that we all pay. See carers, volunteers, artists, etc etc.
Up to a point, plenty of opportunity to avoid other forms of tax, if one is so inclined. Clearly they are not paying enough tax seeing as ~53% of the population is taking more from society than they are contributing.
As above… and there are very few non tax payers in the UK… and that so called underclass is not funded by tax payers. We are all funded by government spending to some degree. Government spending is not, as far as I understand, funded by tax. The govt spends money it creates. Tax is used to offset the inflationary pressure of money creation and also to shape the behaviour and structure of society.
I'm afraid you've spent too much time listening to Rone. Those ideas don't work in the real world. The government/treasury does not exist in a bubble.
I reject the idea that a persons worth or place within a so called underclass or otherwise is determined by their wealth, income or ability to pay tax (or the lack thereof).
You can use another term if that one is upsetting you. I have tried 'the unproductive' before now, but that didn't go down very well either. Trouble is you can't really have a discussion about economics (which is what this is) without having a term for the unproductive class of people who exist below the productive working class.
Trouble is you can't really have a discussion about economics (which is what this is) without having a term for the unproductive class of people who exist below the productive working class.
I agree with your point but it's the discussion of the unproductive being "below" the productive that feels wrong. We are all just people, in different circumstances, often changing as we go through life.
Any definition that hints at the existance of an "underclass" stirs bad memories from history.
I’m very much in the unproductive underclass and been living entirely on benefits for 8 years…..pretty please give me more money 😉
plenty of people avoid contributing in various ways, whether its the 'tax effciency' of megacorps or cash in hand traders
in fact https://uk.finance.yahoo.com/news/hmrc-faced-59-2bn-shortfall-125830421.html
https://bsky.app/profile/danneidle.bsky.social/post/3mplnejz7jy2g
anyway
Interesting that all the pundits and press seem to have got Burnhams cabinet picks completely wrong, despite a lot of speculation.
Speculating wildly about burnhamism is pointless until weve seen a budget and he's faced a few crises.... it wont stop people though
The press speculation about cabinet appointments was all so wide of the mark, it would suggest a far less leaky team in number 10 than has been the norm in recent years. Does this mean we'll have less of Laura Kuenssberg quoting 'a Downing Street Source' when she's just been deliberately leaked something by the PMs press secretary as a kite-flying exercise?
We can live in hope, eh?
interested to see what happens at DSIT and in Science and Tech.
Nothing good by the sound of it. If Burnham is serious about "reindustrialization", then what on earth is he doing?
Also... we now have a dedicated "Minister for AI"... hmm....
Streeting's first day in job starts with a reminder why it's one of the hardest in government...
I see there is speculation that Burnham might call a snap election to wrong foot Farage/Reform and stamp out the "no mandate" right wing headlines.
Seems impossible risky though I see the potential benefits.
Surely not though? A loss would write a terrible chapter into British political history if it backfired.
his very late decisions completely nullified the print press tooThe press speculation about cabinet appointments was all so wide of the mark, it would suggest a far less leaky team in number 10 than has been the norm in recent years. Does this mean we'll have less of Laura Kuenssberg quoting 'a Downing Street Source' when she's just been deliberately leaked something by the PMs press secretary as a kite-flying exercise?
We can live in hope, eh?
Up to a point, plenty of opportunity to avoid other forms of tax, if one is so inclined. Clearly they are not paying enough tax seeing as ~53% of the population is taking more from society than they are contributing.
Again, that suggests that the only contribution one can make to society is by paying tax and ignores the fact that wealth accumulators often accumulate their wealth at the expense of others.
I'm afraid you've spent too much time listening to Rone. Those ideas don't work in the real world. The government/treasury does not exist in a bubble
I’m not listening to Rone. It’s just a statement that the treasury spends first and reclaims taxes later. No need for a bubble. It suits politicians to harp on about tax payers money - but describing the economy as if they are budgeting for a household doesn’t help here.
You can use another term if that one is upsetting you. I have tried 'the unproductive' before now, but that didn't go down very well either. Trouble is you can't really have a discussion about economics (which is what this is) without having a term for the unproductive class of people who exist below the productive working class
It’s not upsetting me - and to suggest so is unnecessary tone policing. I simply reject the idea that we should define a underclass based on someone’s ability to pay tax.
We could look at all this differently… and indeed many of probably would if it were not for the influence of the rich and powerful and the dogma of those in control…
I see there is speculation that Burnham might call a snap election to wrong foot Farage/Reform and stamp out the "no mandate" right wing headlines.
speculation by who? as ever its absolute nonsense that any pm would risk a 200 seat majority to try and appease the right wing press that would still relentlessly attack them regardless
^^ It's mentioned on the Beebs site today.
I mean, it seems incredibly risky but politics seems to live in a parallel universe these days so it's hard to be truly shocked by much anymore.
stamp out the "no mandate" right wing headlines.
Every media outlet is amplifying this shit. The newsagent podcast was doing its best to help out the Britain hating right wing rags. They seem to be going full in on the not part of the GE and so...I am not actually quite sure what to be honest. Would have thought a politics show would do some analysis.
There have been 12 midterm PMs and only one who called a GE immediately (well 9 days in). Johnson did after 90 days or so but then that was with the dedicated support of the media who oddly didnt start demanding a GE when it turned out his mandate for an oven ready brexit was a complete lie. Then you get to May at 270 days.
The political press has been appalling bad eg them going wow how quick and efficient this "coup" was leaving aside a)it wasnt a coup and b)Burnham had been trying for at least a year in public (who knows in private). Its only after Starmer completely imploded and no one else looked available that he got in.
Again, that suggests that the only contribution one can make to society is by paying tax
Yup. There are plenty of badly paid jobs where the person is contributing a lot to society.
We then have all the private sector employees who need benefit support since they arent paid sufficient wages. Why call one group unproductive when the employers are reliant on them being underpaid to be productive?
Then we have all the unpaid carer etc work.
The productive == tax contributor seems a rehash of the good old days when only land owning gentlemen were allowed to vote. Not a great time for society to be honest especially since they tended towards passing laws to give more land to themselves.
It's just popped up on france24 news he is allowing strikes from some UK bases on Iran.
Hope not
