Interest rates - impact of 45% u turn

xylophone

Not even close. It's 43% more income than single rate Pension Credit.

But being on PC opens the door to other benefits/help with CT/rent/TV licence etc.

Malthusian

sevenhills said:

Malthusian said:

She had already won the economic argument when Starmer's response to her mini-budget was that Labour would bring back the 45% rate again and chuck it at the NHS. In other words, that Labour accepted the need for stimulus via borrowing. 

But Starmers spending would have helped growth by getting thousands of workers the NHS operations that they need, those workers would then be able to return to work. There are millions on the NHS waiting lists.
Letting the rich keep more of their money would just allow them to spend it in the UK or abroad.

Realistically, if someone's currently not working because they're on a NHS waiting list, they will almost certainly never work again. The NHS doesn't turn people with bad backs into The Million Dollar Man.
Most people on the waiting lists are either already retired or carrying on as best they can. 
Recategorising NHS spending as "investment" didn't fool anyone in Gordon Brown's era and won't in Starmer's either. 

MK62

Malthusian said:

MK62 said:

...is this not a little date selective though?........index linked from April 17 for example, it'd be worth about £14700 by April 23......

It is indeed. Exactly as selective as comparing April 2023 with April 2017 or April 2022.

Ain't that the truth......but it does seem they are taking a little more from those at the bottom. A pensioner on £13600pa in April 2020, would have paid £206 in income tax - c1.5%.

At the risk of heading into the politics of competitive victimhood, a pensioner on £13,600 isn't "the bottom". Not even close. It's 43% more income than single rate Pension Credit.

If we're getting pedantic, then fair enough, perhaps I should have said "at or near" the bottom. AFAICT £13600 is around the average of the bottom UK income decile though.

As for being selective, I fully agree, I was simply pointing out, as an example, that selecting different dates can present an entirely different picture.......

Malthusian said:

Nobody likes to admit it, even the Tories, but tax cuts always give more benefit to people who are richer, because they have bigger tax bills. 

l was going to challenge you on this, but then I saw you'd already done that with....

Malthusian said:

The alternative alternative would be to increase the personal allowance again, which I think nearly everyone on this board including me agrees would have been a much better idea. With an increase in the personal allowance, rich and poor alike get the same tax cut (providing their earnings are at or above the increased allowance). But for whatever reason the Tories don't seem to have considered that. Maybe because a cut in the income tax rate is more eyecatching.

Agreed....but although the same in £ terms, I'd argue that increasing the personal allowance benefits the lower end (note - I didn't say "bottom" here... ) of the income distribution range proportionately more than those further up the scale.

People below the income tax threshold are something of a corner case though, and have to be given alternative consideration - no amount of tinkering with income tax rates and raising the BR threshold will make any difference to those who stay below that threshold - other methods have to be used, and that's usually in the form of the benefits system.......but I suppose that's a whole other debate.

Malthusian said:    The alternative is Gordon Brown's idea that instead of cutting taxes, you turn almost the entire nation into benefit claimants and give "tax credits", where the less you have the more you get back. This was an unmitigated disaster, which resulted in the low-paid being hit with effective marginal tax rates of 90% once withdrawal of benefits was taken into account. The Tories are still trying to unwind the mess.

Now this bit I do fully agree with.......

Frequentlyhere

Not only backbenchers but already cabinet ministers lining up to oppose any real terms cut to benefits.

BBC summarising as "PM Liz Truss is facing mounting anger from within her own party over her refusal to commit to increasing benefits in line with inflation"

It's happening slightly faster than I thought and without them even putting a figure on it, but I think this idea is dead in the water already. Especially since she hasn't even committed to it yet so can easily reverse out.

I think this will be the pattern for a while - gentle prods on every bit of the flesh being met with loud screams. She has already spent her political capital on a budget of wild abandon.

The most likely candidate I've seen for cuts that might get through is capital expenditure, which is of course ridiculous given that the idea is to target growth. So maybe a delay/cancel/reduction to the corporate tax cut (which frankly no businesses even cared about anyway), and some trimming of capital expenditure. 

Altior

Some of the Tory MPs are big supporters of paying people to sit at home. 

Truss doesn't have any political capital to begin with. 

Brexit and Boris Johnson masked some of the fissures but there are three factions among the Tory MPs.

You've got the one nation types, the spartan types, and the 'red wall' types. Of course in difficult times, the splits become very public. 

It's a fact that Truss has no mandate, none of the potential new PMs did. I'd also say that the membership are getting increasingly detached from the MPs as a blob. There's also so many wounded/bitter ex cabinet ministers that have little to lose.

More of the same looks likely, no fixing any underlying issues, no changes of course, yet more spunking money we don't have. 

Exodi

MK62 said:
...is this not a little date selective though?

...

Ain't that the truth......but it does seem they are taking a little more from those at the bottom.

A pensioner on £13600pa in April 2020, would have paid £206 in income tax - c1.5%. Index linked, he'll be on around £16500pa come April 2023, but will pay £747 - c4.5%

A pensioner on 3x that, £40800pa in April 2020, would have paid £5646 in income tax - 13.84%.Index linked, he'll be on around £49500pa come April 2023, but will pay £7017 - 14.17%.

Pot kettle springs to mind, why not just go the whole hog in selectively picking numbers -

If the 'better off' pensioner, has seen his relative taxation increase by about 2.4%, a pensioner on £12,500 in April 2020 would have paid £0 in tax, equating to 0% of their income. Index linked they would have been on around £15,165 in April 2023, and paying £493 in tax, equating to 3.25% of their income.

This is an increase in the level of tax this hypothetical pensioner is paying of INFINITY PERCENT.

Ergo - Tories are putting inifinity tax on the poor, spread the word.

Exodi

Frequentlyhere said:

Not only backbenchers but already cabinet ministers lining up to oppose any real terms cut to benefits.

BBC summarising as "PM Liz Truss is facing mounting anger from within her own party over her refusal to commit to increasing benefits in line with inflation"

It's happening slightly faster than I thought and without them even putting a figure on it, but I think this idea is dead in the water already. Especially since she hasn't even committed to it yet so can easily reverse out.

I don't know if it's fair to say her ministers are 'lining up'? You mention the BBC, yet on the front page you see the below - It's certainly not as cut and dry as you make out.

"But the thinking inside Number 10 is that help is already being channelled towards those who need it most, through support with energy bills and targeted cost of living payments.

They think their big intervention to keep energy bills from rising this winter is addressing the main component of inflation and will have the effect of bringing the rate down over time.

And so they could argue that to increase benefits in line with inflation would in effect be a duplication of support – an additional layer that isn’t required.

And they feel that there are enough MPs in the party who are sceptical of a ballooning welfare budget who could be won round."

https://www.bbc.co.uk/news/live/uk-politics-63114183

EDIT: To add my personal views on this-

The party is acutely aware that pensioners (who are a massive share of the eletorate AND most likely to vote) typically skew to the blue side whereas welfare recepients typically skew to the red. Therefore you could argue it makes little sense in spending money supporting a demographic that would never vote for them.

sevenhills

Malthusian said:

Realistically, if someone's currently not working because they're on a NHS waiting list, they will almost certainly never work again. The NHS doesn't turn people with bad backs into The Million Dollar Man.
Most people on the waiting lists are either already retired or carrying on as best they can. 
Recategorising NHS spending as "investment" didn't fool anyone in Gordon Brown's era and won't in Starmer's either. 

You are obviously more interested in making a political point instead of Googling for the facts.
Here is the data.
"The latest figures for July 2022 show:

• a record of over 6.84 million people waiting for treatment
• 2.67 million patients waiting over 18 weeks for treatment, a further increase from last month
• 377,689 patients waiting over one year for treatment - over 365 times the 1,032 people waiting over a year pre-pandemic in July 2019"

I would suggest that even a small proportion of that 6.84 million are working people that will return to work.

https://www.independent.co.uk/news/uk/home-news/nhs-uk-hospital-waiting-list-b2176161.html

sevenhills

Exodi said:

And so they could argue that to increase benefits in line with inflation would in effect be a duplication of support – an additional layer that isn’t required.

That is perfectly true, but those receiving benefits won't look at it like that. Many working people receive benefits, it would take a brave man to increase working benefits inline with inflation, but other benefits lower than inflation.

MK62

Exodi said:

MK62 said:
...is this not a little date selective though?

...

Ain't that the truth......but it does seem they are taking a little more from those at the bottom.

A pensioner on £13600pa in April 2020, would have paid £206 in income tax - c1.5%. Index linked, he'll be on around £16500pa come April 2023, but will pay £747 - c4.5%

A pensioner on 3x that, £40800pa in April 2020, would have paid £5646 in income tax - 13.84%.Index linked, he'll be on around £49500pa come April 2023, but will pay £7017 - 14.17%.

Pot kettle springs to mind, why not just go the whole hog in selectively picking numbers -

If the 'better off' pensioner, has seen his relative taxation increase by about 2.4%, a pensioner on £12,500 in April 2020 would have paid £0 in tax, equating to 0% of their income. Index linked they would have been on around £15,165 in April 2023, and paying £493 in tax, equating to 3.25% of their income.

This is an increase in the level of tax this hypothetical pensioner is paying of INFINITY PERCENT.

Ergo - Tories are putting inifinity tax on the poor, spread the word.

I didn't say anything about any percent on percent increase in tax ....you did,  and then you proceed to make a strange comment regarding infinite tax increases.......
Anyone whose income tax increases from 0% to 3.25% is hardly going to see that as a tax cut.....not in the real world anyway.
Perhaps you'd like to suggest a pension income level, at the lower end of the income scale, that we can instead use to demonstrate the real effects of government tax policy.
As an aside, are you going to present the 1p cut in basic rate income tax as being actually a 5% tax cut, since, using the same logic, 19% is 5% lower than 20%?