[Closed] The Autumn Statement...

Northwind - Member

It's costing £800 million

tbh i don't really see it as a bad thing, what I do find interesting is that gideon is basically applying SNP policy to engerlund. 😆

If house prices rise and the market moves as a result, they'll make that back no bother

No, Govt will make back a small proportion - the rest will be lost to price inflation and provide no economic benefit. I'm all for taking the cliff edges out of taxation and simplifying tax to provide better incentives. But adding fuel to the housing market is the wrong thing to do and is seems just a way of making a populist headline before an election.

seosamh77 - Member

tbh i don't really see it as a bad thing, what I do find interesting is that gideon is basically applying SNP policy

Well not so much, since the SNP version gives the tax break to homeowners up to £325000, whereas the Tory version gives tax breaks almost up to 3 times that. Because it's that squeezed middle with their £900000 houses that most need a tax break obviously! I think the SNP cut is also smaller but don't quote me.

I wonder what proportion of the cost will be going to these more expensive houses, second homes, buy-to-lets?

Meanwhile let's cut a billion quid off welfare spending and freeze working-age benefits (ie, cut them) for 2 years.

On the plus side, these patriotic piggybanks totally look like boobs

[img] [/img]

It's costing £800 million, and doesn't benefit the 32% of people who aren't homeowners- a lot of whom can't afford to be. And no, 68% of people won't save money. 68% of people own property already, they'll only make a saving when they buy a house.

I approve of making it more progressive and fairer but don't lose sight that it's still a tax cut for people who can afford to buy a house, in an attempt to keep the housing bubble rolling and generate big headlines that don't say "Holy ****! The deficit's double what you promised it would be 4 years ago in one of your central policies!"

+1.

Will the reduction in stamp duty just add fuel to house price inflation? Good for individuals buying in the short term, but I think benefit is likely to be illusory very quickly. In fact in economic terms it risks reducing govt income and with the benefit disappearing into something which provides no economic benefit - but will be popular just before an election and that's what counts.

+1 again.

BBC Scotland editor tweeted the following (taken from BBC website)

[i]@ScotTories attack gap between new Stamp Duty + Scots Transaction Tax. For £350k home: England £7500, Scotland £12,300. #AutumnStatement" Big difference indeed.[/i]

Obviously another trick to try and keep the housing bubble expanding, just like his help2buy scheme Id be surprised if it was netral, Im sure that the wealthy will find away to mitigate the effects

even the french are mocking us now

Alain Bokobza, head of the French bank’s global asset team, said much of Britain’s growth is driven by excess leverage and a housing bubble

fwiw I think osborne initially thought he could reduce reduce the defecit and pick up the economy without resorting to the same dependency on debt and housing markets but he soon ran out of ideas and slipped back into the 'default uk chancellor mode'

The real story is that the recovery is slower than thought, will slow down further as global economy weakens. Govt spending will be cut massively but this in not in the welfare bill (which includes pensions and in-work benefits remember) but actually in service delivery budgets like police, armed forces, justice, local govt and social service.

The reason welfare budgets are not down is that despite hammering the worst off in society most welfare is pensions and in-work benefits and a combination of aging (and conservative minded) population and downward pressure on wages means that those elements will increase.

... but don't look at that, look at the money you will save on stamp duty ....

The upwards movement in personal allowance and a healthy economy benefit those who can't afford a house. 68% home ownership is high by European standards. Thats a good thing.

We have higher thresholds here in the UK vs Scotland as average prices are higher.

Northwind - Member
seosamh77 - Member
tbh i don't really see it as a bad thing, what I do find interesting is that gideon is basically applying SNP policy

Well not so much, since the SNP version gives the tax break to homeowners up to £325000, whereas the Tory version gives tax breaks almost up to 3 times that. Because it's that squeezed middle with their £900000 houses that most need a tax break obviously!

I wonder what proportion of the cost will be going to these more expensive houses, second homes, buy-to-lets?

I said applied SNP policy, not numbers, tbh given the ridiculousness of london house prices the 900k is probably fair enough.

The numbers define the policy- SNP policy is make it fairer and cut tax for those who'll benefit most. Tory policy is also cut tax for people buying houses costing 6 times the national average house price.

(and nearly twice the average London house price incidentally- which is of course skewed by the high number of very high price houses)

But I agree it is nice work from him, to pinch the SNP policy and bolt on tax cuts for the rich while still pitching it as a feelgood story for the less well off.

@kimbers, that link is tremendous I did literally laugh out loud. The deficit is taking longer to address but the progress is clear. The alternative would have been mountains more debt, a problem the French are facing and being constantly "told off" for by the Germans.

The upwards movement in personal allowance and a healthy economy benefit those who can't afford a house. 6

But that doesnt affect this quite obvious attempt to keep the housing bubble going until the election.

Northwind - Member
The numbers define the policy- SNP policy is make it fairer, cut tax for those who'll benefit most. Tory policy is also cut tax for people buying houses costing 6 times the national average house price.

(and nearly twice the average London house price incidentally)

Essentially the tories have worked this out on london prices, which will keep middle england happy. It's politics basically(which is what the SNP are doing also, but there's more appetite for tax the rich up here.)

It may not be obvious yet to us, but every last bit of today's speech would've been electioneering at some level. Gideon's a real game player - like Balls he loves the games more than he likes to do his job properly, + with the election result looking increasingly unlikely like a clear win for the Tories, he'll be under strict instructions to do whatever he can to buy votes.

Re the stamp duty - I worked out that I'll likely pay £3k less. Whoopy-do. In my area of South East London 2-bed flats have just gone up from £250k-£350k+ in less than a year thanks to Help To Buy and loose money - so £3k saving on stamp duty is hardly making any of those flats suddenly affordable is it?

I suspect buyers will just go 'I can afford to stretch myself a little further now' and prices will just creep up accordingly...

They have taxed the rich, the extra collected above £1.5m is pretty substantial

@brooess - Yes the BBC political and economic editors made the point about blatant electioneering. The GE is 5 months out, a lot can change. I think it's too close to call.

The Stamp Duty changes cost the govt c£800m in revenue per year - see page 64 of the Treasury's Autumn Statement report.

That is £800m of additional borrowing or saving in spending to find - and I still think it will fuel house price inflation so the benefit will be short lived and limited to those moving soon.

Are those extra votes worth it?

seosamh77 - Member

Essentially the tories have worked this out on london prices

Even if true- and if it is, that'll just be classic bullshit Londoncentricism- the break-even point on taxation is still almost half a million quid above the average London house price. Neither justification is a good one

Fun stat I saw today, less than 1/10 of under-35s own their own home. In 1970, the average age of a first time home-owner was 25, this year it was predicted to hit 35, and rising faster than ever before. Property is becoming less and less affordable while the government applies policies that increase prices further. But we're all in it together.

Coincidentally, I just got my inland revenue "We spend all your money on benefits" statement, which I'm considering using as the lighted taper for a molotov cocktail 😆

Tbh this and the SNP version, while slightly better than existing rules, is just the usual pissing about at the edges. Its far from the progressive policies I'd like to see from my government(s).

OK, fair play, I had wrongly interpreted you as defending the policy, sorry about that.

I think there's basically 2 issues, the switch to graduating the bands is just pretty rational, it never made sense that a £1 change in price could cause a £5000 change in tax and this change gets away from all that nonsense (and workarounds etc). It could have been done in a tax neutral way but I wouldn't have been fussed if it'd led to a loss of revenue.

But throwing in tax cuts for the well off in the name of [i]fairness[/i] is a totally different thing in the current climate of spending cuts.

olddog - Member
The real story is that.... Govt spending will be cut massively but this in not in the welfare bill (which includes pensions and in-work benefits remember) but actually in service delivery budgets like police, armed forces, justice, local govt and social service.

... but don't look at that, look at the money you will save on stamp duty ....

Well said olddog, lovely irony in the me, myself I reaction to any budget/statement.

One key message for me: Austerity, what austerity? You ain't seen nothing yet!!!

Not that any major party will be honest about how they will tackle this.

Cuts, cuts and more cuts coming, only this time for real (after the election of course)

I don't know if anyone else noticed it, he sort of sneaked it in virtually unnoticed, but he used the phrase 'To Stay On Course To Prosperity'. Its catchy that. Snappy. To the point. If I was him I'd use it more often. In fact, as often as he can between now and the election. It'd be such shame to waste it. I never tire of hearing concise and informative phrases like that. Never!

As far as the cuts are concerned... we really haven't seen anything yet. Have you noticed that all of a sudden George is interested in devolving power to local authorities. Particularly the northern metropolitan ones? Funny that, isn't it? Timely?

A more cynical person than me could suggest that as the government applies slash and burn funding cuts to regions with budgets already cut to the bone, leaving them able to do nothing more than provide the bare minimum services they're legally obliged too, that regional assemblies, and elected mayors etc, make handy scapegoats to deflect criticism

They're not actually devolving power, they're devolving blame for the absolute decimation of public services thats about to happen

As far as the cuts are concerned... we really haven't seen anything yet

They're not actually devolving power, they're devolving blame

Reckon you've got it spot on.

Shame that the only hope is that Labour win or at least can form a coalition with someone else given that the Lib Dems don't seem to have been vocal in their opposition given the proposed cut in spending.

They're not actually devolving power, they're devolving blame

The spending cuts in future years are dramatic, as @tmh has said we haven't seen anything yet. What is interesting is though that it is spending cuts of that order of magnitude that are required to balance the books and even then that will take the life of the next Parliament. The takeaway is the scale of the mess we have gotten ourselves into. We didn't fix the roof when the sun was shining and doing so when it's raining is always more painful and much more expensive.

Shame that the only hope is that Labour win

did you hear Ed Balls on R4 this morning?

hardly confidence inspiring that they have any clue what to do either...

Shame that the only hope is that Labour win or at least can form a coalition with someone else given that the Lib Dems don't seem to have been vocal in their opposition given the proposed cut in spending.

hardly confidence inspiring that they have any clue what to do either...

did you hear Ed Balls on R4 this morning?

hardly confidence inspiring that they have any clue what to do either...

Can anyone think of a single individual in the country with less financial credibility than Ed Balls? Because I'm struggling to think of anyone.

With regards to balancing budgets, austerity is one thing, but George absolutely refuses to even acknowledge the elephant in the room, never mind address it. Tax receipts. Or the lack of them. The situation now is absolutely insane. So many of these jobs created, as part of Georges economic miracle, are minimum wage/zero hours. So you're in the mad situation where they people don't earn enough to actually contribute anything in tax. Then on top of that, they're costing tens, maybe hundreds, of billions in housing benefit and tax credits to top up wages to a living wage.

Its completely unsustainable! And utterly immoral. We're all effectively subsidising hugely profitable companies to pay subsistence level wages to a hefty (and growing) chunk of the population. What we need is a government with the balls to stand up to the big multinationals and say enough is enough, and they need to start paying a living wage, as we - the taxpayers - are not doing it for them any more!

Sadly I can't see that happening whichever mob get in. As none of them are actually on our side

Can people not see that changing the stamp duty while electioneering, (so what they all do it, see 50% income tax rate Labour left for the Tories) is a brilliant piece of Tory strategy.

(1) reduce the tax for those at the bottom, hence, preventing arguments they don't care about the poor from the left.
(2) savings for the middle earners, hence, shoring up their own vote.
(3) increasing tax on the millionaires again stopping any Labour / Lib Dem argument on Mansion taxes.
(4) Outmaneuvers the SNP whose change doesn't come into April and because of the difference in price after around £325K the SNP can be attacked as the party that doesn't care about the 'squeezed middle'.

dragon - Member
(4) Outmaneuvers the SNP whose change doesn't come into April and because of the difference in price after around £325K the SNP can be attacked as the party that doesn't care about the 'squeezed mid

Its completely unsustainable! And utterly immoral. We're all effectively subsidising hugely profitable companies to pay subsistence level wages to a hefty (and growing) chunk of the population.

Actually less than subsistence, hence the need to top up wages with tax credits. It's effectively a tax cut for millionaires as they get their staff wages subsidised by the middle classes (who do still pay tax).

Of course, the Classic problem there, and the trap we're stuck in, is that if all employers upped the wages of their staff to a living level, the burden of the inflationary pressure on prices would impact most heavily on the the same poor it was supposed to help, since a great many of the lowest paid jobs are not in tescos etc. but small businesses, bakers, food industry, retail etc.

ninfan - Member
Of course, the Classic problem there, and the trap we're stuck in, is that if all employers upped the wages of their staff to a living level, the burden of the inflationary pressure on prices would impact most heavily on the the same poor it was supposed to help, since a great many of the lowest paid jobs are not in tescos etc. but small businesses, bakers, food industry, retail etc.

I'd suggest we try something different then.

dragon - Member

Can people not see that changing the stamp duty while electioneering, (so what they all do it, see 50% income tax rate Labour left for the Tories) is a brilliant piece of Tory strategy.

Of course it is. But I'm oldfashioned, I judge a government policy on how good it is for the country rather than how good it is for the political party. It's like praising a general for how pretty his formations and elegant his maneouvering is, while he loses the war.

I'd suggest we try something different then.

Like?

Increasing salaries means increasing costs, leading to increased prices, if you can suggest a way around that I am sure the world would love to hear it.

ninfan - Member

Of course, the Classic problem there, and the trap we're stuck in, is that if all employers upped the wages of their staff to a living level, the burden of the inflationary pressure on prices would impact most heavily on the the same poor it was supposed to help, since a great many of the lowest paid jobs are not in tescos etc. but small businesses, bakers, food industry, retail etc.

Any inflationary pressures on prices caused by an increase in wages would be spread across the entire customer base, whereas the wage increase itself goes to the lower paid end, so not so much. Your argument only stands if they work for a business that only sells things to minimum wage earners.

You make the case that it softens the blow, but increased prices still hurt the poorest in society disproportionately as a higher proportion of their income is spent on essentials

ninfan - Member
I'd suggest we try something different then.
Like?

Increasing salaries means increasing costs, leading to increased prices, if you can suggest a way around that I am sure the world would love to hear it.

consider the debt under austerity has gone from around 500b to 1.4 tr. I'd suggest that austerity/hoardism is a pile of bollocks.

ninfan - Member

You make the case that it softens the blow, but increased prices still hurt the poorest in society disproportionately as a higher proportion of their income is spent on essentials

Only if prices go up by more than wages! Which, since any price increase is spread across all customers, and since wages are only a part of total costs, can only happen if the price increase is a lot more than the actual inflationary pressure. (or weirdly specific to things only minimum wage earners buy)

NW: Yes, but those on fixed incomes (benefits, pensions etc) would gain nothing from the wage rises

Seosamh77: if you seized all bank deposits, would it settle all outstanding debt?

[quote=seosamh77 said]I'd just crack open the bank accounts and pay off the debt in a one off go at it.

Whose accounts would you open up to get 1.5 trillion pounds ?

ninfan - Member

NW: Yes, but those on fixed incomes (benefits, pensions etc) would gain nothing from the wage rises

If only pensions had some way oflinking them to both wage and price increases! We could call it the "triple lock" or something.

Benefits [i]should[/i] be indexed, currently they're fixed because benefit-bashing is cool but that's a simple matter to remedy. Especially considering the way we currently subsidise businesses via benefits, tax credits and the like.

allthepies - Member
Whose accounts would you open up to get 1.5 trillion pounds ?

ninfan - Member
Seosamh77: if you seized all bank deposits, would it settle all outstanding debt?

if that's not enough, i'd seize assets and sell them.

if that's not enough, i'd seize assets and sell them.

And what would people buy them with?

ninfan - Member
if that's not enough, i'd seize assets and sell them.
And what would people buy them with?

So who is going to buy it from abroad, when they know that you might just come along and seize it when it suits you?

And I think you might find that all your deposits have gone abroad to avoid seizure as well 😆

ninfan - Member

And I think you might find that all your deposits have gone abroad to avoid seizure as well

They're not actually devolving power, they're devolving blame

A little cyncial this early in the morning ! Currently it's too easy for politicians in the regions to blame it all on Westminster, this addresses the problem.

Well to be fair to Binners, that's exactly what the writers at The Economist have been saying since the push for regional devolution. There's more cuts to come. By the time the voters feel the pain the regional devolution will be in place so the local government will get the blame. A few sensible people will point out that it was the central government who initiated the cuts back in 2015 but the media will ignore this and voters won't realise the game that was played and will follow with their anger accordingly.

I've voted Conservative all my life but the more I see the games that the current lot are up to the more I think there's no way I want to reward them by giving them a vote next year... it's really nasty stuff and very cynical with it...

If they admitted the problem was systemic and difficult to solve and would take a long time to straighten out, I'd trust them, but this nasty pretence that they have an answer whilst messing about with credit and house prices to give an illusion of wealth is just utter lies

Binners, you wrote that tax receipts are down due to the number of jobs that are created with minimum wage/zero hours but I'm pretty sceptical about that.

My hypotheses is different - tax rates are now so high that there has been a surge in the number of people who choose to be self employed - many of these who can then use various techniques to minimise their real income and thus pay significantly less tax than someone earning the same as a salary which in many cases means they will pay net tax of around 22% compared to the 40% tax that more skilled roles would attract on a salaried basis.

The CIPD report on Zero Hours would seem to support this - its estimate is that only 1.3m people are on Zero hours, approx 3% of all workers. Within that 1.3m, around half are working a number of hours they are satisfied with i.e. if they were offered more hours they would not take them.

The Labour Force survey (which uses different data) seems to suggest the number of zero hours workers has increased by around 20% over the last 4 years, and as we already know, many of these contracts are in place in charities, the NHS and Labour run councils - so it's not entirely a case of evil robbing capital firms using them.

By contrast, the number of self employed workers has now risen to close to 5m, with nearly 2/3 of all additional workers between 2008 and 2014 working this way.

What do you think?

All the main parties are either in denial or being dishonest with the public. This will continue through to the election. The problem (as I have said in many occassions) is that the crisis continues to be misdiagnosed. It's a crisis about excess leverage pure and simple - the rest ie growth, fiscal positions, deficits, debts, bankers etc are symptoms not causes.

But votes don't like the truth (look at the Scottish referendum) and no party will win on the basis of explaining that cuts to come are greater that cuts past. But that is the sad fact irrespective of who wins.

GO smart trick, whether deliberate or not, has been to give the impression of delivering austerity while doing nothing of the sort. Indeed, the hidden fact that they took the foot of the austerity pedal is probably more of a reason why UK recovered better, than any reasons he gives in public.

Cuts, cuts and more cuts on the way - George, Edf, Danny,,,,,it's doesn't matter. So pick the face that you want to see on the TV more often. Otherwise there will be bugger all to differentiate between them.

Indeed brooess. We have a 'recovery' that is based on exactly what got us into such a mess in the first place. Artificially inflated house prices (compounded by economic lunacy such as Help to Buy), which are ludicrously over-valued, giving the illusion of wealth, so that the lucky homeowners can endlessly borrow against their supposedly ever-increasing asset, to free up cheap available credit, to spend on shit they don't need. All happily supplied by a completely unreformed banking sector, still carrying on as if nothing ever happened.

All while the supposed beneficiaries of Georges 'rebalancing of the economy', the manufacturing industry, andsmall business are starved of investment

What could possibly go wrong?

I'm with you just5minutes, a huge chunk of people I know once they get 5 or so years under their belt start contracting and using all the tricks to avoid tax. It's almost a mugs game being on PAYE if you are a highly qualified professional.

just5minutes - you're right about the huge rise in the self-employed. But the vast majority of these new self-employed aren't the thrusting young entrepreneurs of Georges imagination. Nor are they professionls. Though this is how its being spun.

They're people being encouraged into it by cynical moves to get people off the books at Job Centres. Most of them are eking out an existence on minimum wage, trying to pick up hours where they can, and having their earnings topped up with tax credits. So we're back to the same problem

[url= http://www.theguardian.com/commentisfree/2014/oct/03/self-employed-osborne-entrepreneurs ]An interesting read[/url]

[i]Most of the self-employed work in building and construction. After that it’s cab drivers, and after that chippies and the “skilled trade”. Most women who are self-employed are cleaners, carers or hairdressers. Does the chancellor really imagine that workers like these are raking it in?

The average income from self-employment has fallen by 22% since the financial crash of 2008. Last year’s figures showed that average earnings had dropped from £15,000 to just under £10,400.[/i]

So the actual stats are the opposite end of the spectrum from the impression being given. It sure aint professionals on £40k+

so just5minutes are you saying that 2/3 of all new jobs since 2008 would have been on salaries above the 40k tax band?
sounds very unlikely to me
Im sure at the upper end of the wage range its true, but vast majority are at the lower end, with no sick or holiday pay or pension contributions and all the further problems those things cause at a personal and state level

Personally, I'd just crack open the bank accounts and pay off the debt in a one off go at it. Then start investing and properly growing the economy and run it there after in a sustainable way.
consider the debt under austerity has gone from around 500b to 1.4 tr. I'd suggest that austerity/hoardism is a pile of bollocks.

It's almost a mugs game being on PAYE if you are a highly qualified professional.

@binners I think one reason tax receipts are down is that we have lost so many well paid jobs in banking / finance. Hundreds of thousands of jobs directly in banks and in supporting services, jobs that paid 50k, 100k, 500k etc. These jobs paid well and thus contributed lots of taxes. Also the banks themselves lost so much money they've paid much less tax (loss carry forward) which is something Osbourne addressed yesterday. Also with tax rates at 47% (and worse at 52%) people are much more focused on legitmate avoidance like pensions which reduce the taxes paid.

Most women who are self-employed are cleaners, carers or hairdressers. Does the chancellor really imagine that workers like these are raking it in?

Did you just conveniently ignore the rest of that statement? In favour of the more anecdotal approach about you and your mate?

The average income from self-employment has fallen by 22% since the financial crash of 2008. Last year’s figures showed that average earnings had dropped from £15,000 to just under £10,400.

Its tax efficient alright. When you don't earn enough to pay tax. Would you fancy living on 10 grand a year? Cleaners are not earning £15 an hour.

jambalaya - Member
I know living costs are high down South but cleaners make £10-£15 an hour.

Rubbish.

[url= http://www.theguardian.com/society/2014/oct/17/whitehall-cleaner-hmrc-campaign-living-wage ]15 quid an hour?[/url]

[url= http://www.bbc.co.uk/news/business-30327717 ]the daily mashes favorite institute well almost analysis[/url] my guess will be a hike in VAT if the tories get in again and goodbye to trident if labour wins

I think we can take a VAT hike as read if George's still chancellor. Probably the first thing he'll do if, god forbid, he gets back to his desk. Its the Tory's favourite tax as it hits the poorest the hardest

My cleaner is paid £10 per hour and her other customers pay her more.

Is she self-employed or is she an agency? If she's self-employed remember she's only getting paid £10 for the hour she works, she's not getting paid for the time between jobs, her effective hourly rate will be lower unless she does a solid day with a customer. Do you provide materials or does she supply those too?

All kind of trivial beside the point of "You pay her £10 per hour- is she representative". Payscale reckon the average is £6.71

It's hardly raking it in but it's double the minimum wage

No agency, we provide materials, Half her week is spent in our street so she has done well on travelling between jobs of late but before she would no doubt have had more dead time in the past. It is pretty representative for my area*, admittedly an affluent part of London, some will be agency, some will be direct.

EDIT: In fact, we are at the low end.

My hypotheses is different - tax rates are now so high that there has been a surge in the number of people who choose to be self employed - many of these have been forced off unemployment benefit and into non sustainable business ventures and are now claiming working tax credits instead

FTFY.

Its tax efficient alright. When you don't declare you earn enough to pay tax.

FTFY

My old cleaner even back in 2009 was on £10 an hour (cash), more now. All consumables were provided by the household. Mind I'm you not sure what that tells you, or what cleaners cost for that matter. Anyway most cleaners working through agencies seem to be foreign IME, as no UK people want to do the work.

My old cleaner even back in 2009 was on £10 an hour (cash), more now.

I'd be happy to clean your house for £10.00 an hour, I must be in the wrong buisness.

dragon - Member
as no UK people want to do the work.

That's a ridiculous myth.

Given this:

"It's a crisis about excess leverage pure and simple - the rest ie growth, fiscal positions, deficits, debts, bankers etc are symptoms not causes"

Then this story in the Telegraph on UK personal debt levels is terrifying:

[url= http://www.telegraph.co.uk/finance/autumn-statement/11272773/The-Chancellor-is-banking-on-another-house-price-bubble.html ]Household debt to increase beyond 2008 levels[/url]

It suggests the government really have no idea how to pay down the debt without a massive impact on living standards - so they're just replacing the lack of wage growth and investment growth with more personal debt.

I can't see quite how this can end well at all.