I'm surprised anyone is surprised by this budget.....
The analysis of Liz Truss's economic plans during her leadership campaign pretty much spelled it out.... And suprise suprise the Tory members voted her in 🤷♂️
Not worth a shite to normal folks.. unless you are earning a lot of money then its a significant bung.
Also they are not cutting Corp Tax, NI Super deductions they are leaving them as they are.
Not a radical budget more of a radical transfer of public money into the well of.
If they are now going to stand back and wait for the miracle.... best of luck
a radical transfer of public money into the well of
Nailed it.
And that's not a "plan" for the country, it's just a bribe for the "important" people.
At least in the Victorian Era they had the 'deserving' and the 'undeserving' poor. Now we just have the second kind, apparently.
it’s just a bribe for the “important” people.
To what end though? the total % of tax payers in that bracket is only just over 1% - thats not enough to swing a vote even in the richest constituencies.
By "important", I didn't mean voters. These "important" people aren't the people that I consider more important... they are the kind people who will be described as "the engines of our economy" by people who think that it is the rich who do the real work. You'd be surprised how many people will buy into that idea, even if they have no chance of directly benefiting from these policies. Tories win elections by convincing people that their self serving actions also benefit everyone else in the end... sunlit uplands are always just around the corner... and the timing of the next election will probable fit in with a "look, the economy is recovering (from a low point) now... give us another term because the benefits of that recovery are coming your way soon, honest... you can trust us..". Only after the election will the recovery be revealed to be totally superficial and temporary, as the problems that UK SMEs face are still in place.
(surely there’s a whole bunch of students and part timers in the world??)
Part timers are workshy, in the world of the Britannia Unchained IEA fruitloops... as part of this mini budget benefits are being changed to punish them (sorry, "encourage" them to do more hours).
I don't understand how there isn't a mechanism in our political system to stop a government from straying so far from a manifesto they were elected on. I guess the argument is they couldn't have predicted a Russian invasion but even that is questionable as a statement from a competent government
Money markets not really liking the budget. £ is currently down over 2% TODAY. $1.10 to the £ currently.
The Regional Enterprise zones could have a transformational effect on local economies. Ref the huge shift that’s occurred in other countries where this has already happened – which in some cases have see huge areas transformed from low wage / high unemployment to high wage / full unemployment.
Any evidence to back this up?
IMO all these zones will do is suck in businesses from outside the zone, as per occurred in the 80's when the Tories tried it previously.
"Freeports, loved by disingenuous politicians, criminals and gullible voters everywhere..."
I don’t understand how there isn’t a mechanism in our political system to stop a government from straying so far from a manifesto they were elected on.
Parliament?
Useful podcast
https://shows.acast.com/a-long-time-in-finance/episodes/the-barber-boom-and-bust
Think we can safely assume the tories are expecting to lose the next election.
They are looking for a short term boom, hoping they can ride that wave into the next GE before the crash
Think we can safely assume the tories are expecting to lose the next election.
Not at all. I think it is fairer to assume that the Tories aren't scared of the Opposition.
For example, scrapping the bankers bonus cap during an unprecedented cost of living crises in which people are having to make hard choices between eating and heating should be political suicide, but only if there is an opposition who will exploit it to the maximum effect.
The Tories know that there is very little chance of that. Sure they might hemorrhage a bit of support but it will soon blow over and be forgotten. It will not be endlessly brought up and used as stick to beat them with.
The situation would be very different if the Labour Party was led by someone who scared the Tories. In 2018 after relentless attacks from the then leader of the Labour Party which gained traction with voters the Tories were forced to announce the end of austerity. Austerity now appears to be a dirty word never uttered from the lips of a Tory politician.
It is inconceivable that if Corbyn and McDonnell were still on the Labour front benches that they would not have mercilessly savaged a budget for the wealthy elite during a cost of living crises.
In fact I can't imagine that the Tories would have even dared to attempt such a brazen act of rewarding the rich for being rich.
Has Starmer said anything yet? Nothing on the BBC midday news.
I don't get it, there aren't enough high earners to swing an election, so why pander to them like this? It's just pissing off the other 90%. Most of the tax take come from the middle classes, where they're earning enough to pay more than they cost in services, but there's enough of them to make it a substantial amount.
I don't really care about bankers bonuses, if I though they were that great/egregious I'd apply for a job at Barclays.
so one of the things mentioned was that the 40% rate was the highest rate under the last labour government as well, except for the last month (I guess it was hiked during the 2007 crisis).
Is there a reason why additional rate tax wasn’t in place earlier on? it seems right now like everyone thinks cutting it is unfair (not disagreeing) but if thats the case, why wasn’t it introduced in the late 90s? I was too young to be following politics then so have no idea
<2008 though there weren't comparable problems though. As long as things vaguely balanced then people were paying taxes and services were provided, inflation* and interest rates were sensible, there wasn't the need to generate more tax? Like you though I was on minimum wage back then though so that was the only number that had any meaningfull impact on me.
*excluding property.
G
It is inconceivable that if Corbyn and McDonnell were still on the Labour front benches that they would not have mercilessly savaged a budget for the wealthy elite during a cost of living crises.....
Has Starmer said anything yet? Nothing on the BBC midday news.
Gota admit that, much as I loathed magic grandad for being utterly unelectable, Starmer is doing an utterly pisspoor job in the face of an unprecedented succession of open goals.
You've got to ask yourself just how bad does a political party need to be to let the Tories get away with the unmitigated shitshow of the last few years and still win every election.
A decade of Tory PMs will make people feel that way, yes.
@kelvin you may very well be right.
If the tories can afford to borrow hundreds of billions to prop up energy companies and bank profits, we can do that for schools, hospitals, infrastructure, house building and local services. I’m not holding my breath.
@dazh - I hope you don't mind but I have pinched/paraphrased this to put in my email to my MP Alan Campbell
They are looking for a short term boom, hoping they can ride that wave into the next GE before the crash
The boom needs to be bleedin quick. Are we not talking about tax cuts which will be introduced next April? And how soon after that will the next general election be......months rather than years away?
mercilessly savaged a budget for the wealthy elite during a cost of living crises…..
As have the current Labour front bench.
They need to speak louder, I don't think anyone can hear them.
interestingly in the short term this might have even more negative effects on tax income. Right now if you're an additional rate taxpayer its worth stuffing more money into your pension this tax year (when you're paying 48.25% tax/NI on it) and then paying less next year, when you're paying 42% - every 10k you stuff away would give you a "free" £625 uplift.
As usual, Nicola is taking a more measured approach
https://www.bbc.co.uk/news/uk-scotland-scotland-politics-63007899
I think Starmer & co not having come up with much by way of positive plans of action is because on the evidence of today and before they have good reason to believe that the Tories are very capable of simply taking themselves out of power.
I'm sure that's one of Sun Tsu's arts of war - 'when your enemy is making mistakes, don't interrupt them'.
💪
A YouGov poll out today gives Labour a 8% lead over the Tories, which isn't huge given how incapable the Tories apparently are, and almost certainly not enough for Labour to form a majority government.
interestingly in the short term this might have even more negative effects on tax income
This is the reality of the workings behind the quasi-economics of the "Laffer Curve"... when tax changes are announced, they can shift "when" taxable income is taken, rather then how much. In this case, it might well lead to lower tax take this year... with some of the taxable income taken after the change instead... which could "look" as if lowering tax increases the amount of tax taken... when all it has done is shift it in time (and in the case of a drop in tax rates, maybe even reduce the tax take over a multiple year period, despite showing a rise in take one side of the tax regime change in comparison to the other).
According to the recent STW poll they'll be a few on here who'll be happy.
A fair few who will benefit in their take home income, for sure... no doubt split on whether that is good for the country and society they live in as a whole (and whether that matters to them). Not everyone is made "Happy" by the same thing.
Useful Twitter thread on the technicalities of where the government will get hundreds of millions of quid. Or not.
https://twitter.com/RichardJMurphy/status/1573193134842040320
The mini budget today is so economically wrong headed I can't be bothered to pick it apart point by point. But in general it's a well established principle that to quickly get money into the economy then give to less well off. It will get spent straight away and locally. All the evidence and analysis for the past three decades has supported this.
To rebuild economies and boost growth governments get best return is on direct investment in infrastructure, education, technology, science and innovation. Firstly, there is a direct impact as it provides economic activity (jobs, sales etc) for those delivering or supporting delivery and secondly it improves productivity by upscaling the economy more generally. Higher better quality output, higher wages, better jobs.
What Truss has set out is a punt that cutting some taxes will somehow replicate this based on economic ideology which has been progressively dismantled since the eighties. Absolute bullshit
...and I will pick up on one specific point because it annoys me so much. Reducing stamp duty on housing will simply push up prices as they is a massive supply issue with housing in this country. So without any increase in supply the price will just rise to meet the maximum level of affordability - the tax saving just becomes price inflation. It is literally day one, lesson one of GCSE economics.
It is so shockingly piss poor
I don't have a problem with borrowing, if it's used for investment. To use it for tax cuts is crazy. It seems like they're relying on goodwill from the private sector to create growth. Well, let's see how that turns out!
There's a real danger in 2 years time there will be nothing to show for this. Any private sector spending could easily be soaked up by inflation.
Unimpressed.
They need to speak louder, I don’t think anyone can hear them.
That will be because the majority of the media outlets are owned by Tory party donors and they don't report good stuff about Labour.
The only people who think this budget is great are the 200 old farts who voted her in..!
According to the recent STW poll they’ll be a few on here who’ll be happy.
Not everyone is purely self interested, just to let you know.
Not everyone is purely self interested, just to let you know.
Thanks for letting me know.
Tbf anyone earning over £150k probably thinks it's great
https://twitter.com/Peston/status/1573312128114720770?t=PzLMNbKFgmY_h-wcbv_B3A&s=19
^^ that peston analysis is incorrect.
don't know if that image will work but otherwise there's a graph halfway down this page
https://ifs.org.uk/articles/mini-budget-response
that shows that everyone earning over 12.5k is better off (as you'd expect).
overall, including all the tax changes since 2021, only people on over 150k are better off. but you can't really blame the new guy for some tax changes a year ago.
The irony is that the government were insisting inflation matching pay rises for public sector workers would be bad
https://twitter.com/PJTheEconomist/status/1573302375703609347?t=tPNn3xQlIlfnTxwpNhLFFQ&s=19
As per the stamp duty cut, when I was viewing my house that my partner and I purchased in April (1.41% mortgage rate for next 5 years is looking good), the agent replied to by partner ruing the end of the stamp duty holiday by pointing out that prices rose in accordance so no money was really saved.. I have a feeling the same will happen
It seems like they’re relying on goodwill from the private sector to create growth.
They're taking thatcherite/reaganite ideology as gospel, even though there is 40 years of evidence that it doesn't work. It's the last stand of the neoliberals. And when it comes crashing down, they'll have a suitable excuse to explain it away (Russia/Ukraine probably), or a scapegoat in the form of the labour party who will inherit the mess. At best we're heading for more 1970s style stagflation. At worst we could see a massive devaluation of the pound, the decimation of public services, pensions wiped out and mass unemployment. The next few years are going to be chaos.
Kwasi has changed his tune
https://londonlovesproperty.com/top-tory-mp-kwasi-kwarteng-slams-osbornes-housing-measures/
110 cents to the pound .....
**** me, that's insane.
Scratch that, it's 1.09
Is the £ going to end up below the dollar?
How long before another mini-budget to U-turn on this?
And irony of ironies, the folks shorting the pound today will have unlimited bonuses. I'm sure that's what the chancellor was hoping for.
They need to speak louder, I don’t think anyone can hear them.
That will be because the majority of the media outlets are owned by Tory party donors and they don’t report good stuff about Labour.
I think you will find that it's because the Labour leader doesn't say much.
Which for that very reason when he does manage to think of something to say it is quite big news.
The last time we had a "hold the front page Sir Keir Starmer has just said something" moment was a couple of months ago over his proposal to have a 6 month freeze on domestic energy bills.
That got massive media coverage - everyone was talking about it.
Since then he seems to have entered a period of quiet reflection, I think the Tory counter-proposal of a 2 year energy bill freeze threw him a bit.
Still, it's the Labour Party Conference in a couple of days time, I am sure that his speech writers will have thought of something for him to say. Which will definitely get huge media coverage.
Scrabbling around for the data that the OBR should be publishing, and found this…
https://twitter.com/shreyagnanda/status/1573237565423255552?s=21
For the few, not the many.
