The Autumn Statement…

Northwind – Member

It’s costing £800 millionIf house prices rise and the market moves as a result, they’ll make that back no bother.

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

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)

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

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

http://www.telegraph.co.uk/finance/economics/11269253/French-bank-dumps-British-assets-contrasts-UK-sclerosis-with-Francois-Hollande-miracle.html

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)I do agree that there could have been more done in the calculations, don’t get me wrong, but I reckon it’s as good as you’d have got from the tories!

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 fairness 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

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.

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.

So we can spiral out of control into Greek type levels of debt ? Even with the cuts to date we are spending £90bn a year more than we earn. Ninety Billion every year !

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

@jam bo the fact is Ed balls knows any government has to do the same, there is no other way

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

It doesn’t really tbh…the vast majority don’t buy houses over 320k here, so mostly people will gain benefit.

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.

So in essence you are saying the “system” is un fixable?

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.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.

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?

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 should 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.