Are you really £400 worse off a year if the govt is also borrowing £400 less each?

michaels

According to the BBC the average familly will be £400 worse of each year after the budget changes.

http://news.bbc.co.uk/1/hi/business/10379857.stm

I would argue that if the govt are paying me 400 less in benefits / taxing me 400 more each year but are also running up 400 quid less debt on my behalf then I am not worse off.

There is also an individual calculator on the BBC website but note it does not include the impact of the VAT increase:
http://news.bbc.co.uk/1/hi/business/10335476.stm (thanks to Really2 for this)

Really2

According to the BBC I am £174 PA better off?
http://news.bbc.co.uk/1/hi/business/10335476.stm
I really cant see that being right though.

tomterm8

michaels wrote: »

According to the BBC the average familly will be £400 worse of each year after the budget changes.

http://news.bbc.co.uk/1/hi/business/10379857.stm

I would argue that if the govt are paying me 400 less in benefits / taxing me 400 more each year but are also running up 400 quid less debt on my behalf then I am not worse off.

Um, you can argue that if you want. In the real world, if someone is taxing you £400 more, you have £400 less money to spend on stuff you want. If the government then also spends £400 less per person, then there is an additional £400 less to spen on stuff like police you want. So you are, in the real world, £800 worse off than when you started.

Remember, debt is an intangiable thing, whereas money is spent on things you actually notice is very much tangiable.

Oh, BTW, this budget, when combined with the last labout party budget, amounts to £1,900 of cuts and tax rises all coming at the same time.

So every family in britain is going to be worse off this time next year.

System

Really2 wrote: »

According to the BBC I am £174 PA better off?
http://news.bbc.co.uk/1/hi/business/10335476.stm
I really cant see that being right though.

The indications are that you will be £293.50 better off.

:beer:

lostinrates

We are going to be worse off by the BBC calculator but by less than I thought...under £1k worse off due to the budget. (didn't do the fuel bit though)

edit: ran it again, still with out fuel but with next years pay and its still ...not nice, but less nasty than we had planned for.

michaels

The calculator doesn't include VAT so many will be shown as 'better off' / not much worse off.

Don't forget that there is also VAT on top of duty so tax on petrol will go up next Jan even without any announcement of a specific extra increase in fuel duty.

markharding557

There is a fuel duty rise in september i think

zappahey

michaels wrote: »

According to the BBC the average familly will be £400 worse of each year after the budget changes.

http://news.bbc.co.uk/1/hi/business/10379857.stm

I would argue that if the govt are paying me 400 less in benefits / taxing me 400 more each year but are also running up 400 quid less debt on my behalf then I am not worse off.

Arguably, you are twice as badly off, because you are paying £400 extra plus there is another £400 that is not being borrowed to spend on your behalf, to do things that benefit you.

On the principle that debt is merely spending tomorrow's money today, your children might be grateful though.

Thrugelmir

markharding557 wrote: »

There is a fuel duty rise in september i think

and another 1p in January 2011 as Labour spread this years hike. Plus 3p a litre duty for the following 4 tax years.

And VAT is charged on fuel duty.

There will be a fiscal tightening on household budgets for some years to come.

Thrugelmir

zappahey wrote: »

Arguably, you are twice as badly off, because you are paying £400 extra plus there is another £400 that is not being borrowed to spend on your behalf, to do things that benefit you.

On the principle that debt is merely spending tomorrow's money today, your children might be grateful though.

The money isn't lent to us free. So whilst we borrow it now. There's interest to pay until its repaid.

tomterm8

However, last time I noticed, the interest for UK 10 year bonds was 3.44%, and RPI inflation was over 5%, so in summary international investors are paying us for the use of their money.