Non-partisan mini-budget predictions thread

sevenhills

hallmark said:

Whatever you think about the Telegraph, most of the facts are unarguable.  For example that the OBR are terrible at forecasting and have a pretty much 100% record of getting it wrong, whether it's on Borrowing, Inflation or GDP.

So the implication from the Telegraph is that this black hole doesn't exist because the OBRs forecasts are suspect.
Strange thing to suggest?

coastline

hallmark said:

Another aspect that should be considered:

https://www.telegraph.co.uk/business/2022/11/12/tax-rises-loom-obr-forecasts-have-wrong-years/

Whatever you think about the Telegraph, most of the facts are unarguable.  For example that the OBR are terrible at forecasting and have a pretty much 100% record of getting it wrong, whether it's on Borrowing, Inflation or GDP.

The 2010 budget of cuts to public spending and freezing allowances was supposed to balance the books by 2015. The OBR would have backed this at the time ? The governments idea was to repay debt quicker but ended the period still over £70bn down . The chart below in the BBC link shows between 2015 and 2020 another £200bn was added to the national debt. Covid has since added hundreds of billions more.

Osborne’s legacy: What the austerity chancellor leaves behind (cnbc.com)

UK quarterly borrowing hits record high - BBC News

hallmark

sevenhills said:

hallmark said:

Whatever you think about the Telegraph, most of the facts are unarguable.  For example that the OBR are terrible at forecasting and have a pretty much 100% record of getting it wrong, whether it's on Borrowing, Inflation or GDP.

So the implication from the Telegraph is that this black hole doesn't exist because the OBRs forecasts are suspect.
Strange thing to suggest?

My interpretation was that the OBR forecast's are being treated as gospel when in fact they're a guess and might be wildly optimistic or wildly pesmisitic. Therefore crafting a raft of budget measures designed to precisely meet the challenges the OBR predicts is foolish at best.

I agree with this.  Whatever we do or don't do with tax, it shouldn't be based on the OBR, who are basically a bunch of economists making bad guesses.

Do you disagree?

maisie_cat

Millyonare said:

CGT tax = up
Divvy tax = up
Pension tax = up
Second-home owner tax = up
Contractor tax = up
Income tax (fiscal drag) = up
Top-rate income tax = up
NI tax = up
Council tax = up
Car tax = up
Hybrid car tax = up
Electric car tax = up

inheritance tax = up, the easy win in my view given that only 3.8% of estates currently attract it.

LHW99

hallmark said:

sevenhills said:

hallmark said:

Whatever you think about the Telegraph, most of the facts are unarguable.  For example that the OBR are terrible at forecasting and have a pretty much 100% record of getting it wrong, whether it's on Borrowing, Inflation or GDP.

So the implication from the Telegraph is that this black hole doesn't exist because the OBRs forecasts are suspect.
Strange thing to suggest?

My interpretation was that the OBR forecast's are being treated as gospel when in fact they're a guess and might be wildly optimistic or wildly pesmisitic. Therefore crafting a raft of budget measures designed to precisely meet the challenges the OBR predicts is foolish at best.

I agree with this.  Whatever we do or don't do with tax, it shouldn't be based on the OBR, who are basically a bunch of economists making bad guesses.

Do you disagree?

I believe the Liz Truss budget was going to be enacted before the latest OBR. That went well (I don't think)

Bridlington1

I suspect that the government is leaking a lot of tax hikes in part as a "softening up excersise" so that when they raise taxes and cut spending by a lot but not a much as people were expecting, people will be relieved and it will give the Consevatives a small increase in the opinion polls. But also I think the government may be leaking out policies to see which ones the public dislike the least, whilst it decides what to include in the Autumn Statement. Similar to what Liz Truss did during her leadership campaign.

As for my policy predictions:
I think the triple lock on pensions will remain as there is so much public support for it.
Benefits will rise by CPI
Corporation tax will rise
National insurance will rise
Top rate of income tax will be both frozen and increased, which I suspect will tempt a lot of the richest in our country to move their money and business abroad, resulting in tax revenues falling.
Fiscal drag and lots more of it to come (bone idle policies in my humble opinion but there you are)
Lifetime allowance to be frozen or possibly even cut.
CGT will rise
Some form of windfall tax will be introduced with great pains taken to call it anything but a windfall tax to avoid it looking like they've caved into another of Labour's demands
I doubt they will grasp the nettle of tackling waste within the NHS, despite it having the potential to save billions in the long run.

This will be a budget based on the idea of punishing the holders and the creators of wealth in order to try and look as though they are balancing the books in a poor attempt to tempt more centrist voters back. Essentially good luck if you are in work, particularly in the private sector. If you have any money be prepared to see it taxed like it's never been taxed before. If you put your money in a sock they'd probably introduce a tax on socks.

sevenhills

LHW99 said:

hallmark said:

sevenhills said:

hallmark said:

Whatever you think about the Telegraph, most of the facts are unarguable.  For example that the OBR are terrible at forecasting and have a pretty much 100% record of getting it wrong, whether it's on Borrowing, Inflation or GDP.

So the implication from the Telegraph is that this black hole doesn't exist because the OBRs forecasts are suspect.
Strange thing to suggest?

My interpretation was that the OBR forecast's are being treated as gospel when in fact they're a guess and might be wildly optimistic or wildly pesmisitic. Therefore crafting a raft of budget measures designed to precisely meet the challenges the OBR predicts is foolish at best.

I agree with this.  Whatever we do or don't do with tax, it shouldn't be based on the OBR, who are basically a bunch of economists making bad guesses.

Do you disagree?

I believe the Liz Truss budget was going to be enacted before the latest OBR. That went well (I don't think)

I believe that the OBR assessment of the mini budget was ready or could have been ready, but the Truss government didn't want the public to know what the figures were. Which is why the market went haywire.
If the OBR was just a bunch of economists, they would have published.
The members of the OBR are appointed by the Chancellor of the Exchequer, so not exactly independent. They are paid by the government, so they will publish papers which favour the government.

talexuser

The trouble with the Telegraph article is it shows most of the borrowing forcasts were wrong in the wrong direction, ie favouring the government that pays them, rather than the overborrowing that was actually required. So if they say now there is a ~50bil hole, it could be 2, 3 or 4 times as much? Not such a good argument to say ignore them and don't raise more tax?

coastline

maisie_cat said:

Millyonare said:

CGT tax = up
Divvy tax = up
Pension tax = up
Second-home owner tax = up
Contractor tax = up
Income tax (fiscal drag) = up
Top-rate income tax = up
NI tax = up
Council tax = up
Car tax = up
Hybrid car tax = up
Electric car tax = up

inheritance tax = up, the easy win in my view given that only 3.8% of estates currently attract it.

I think it's unfair on single people who have bought houses and saved for a rainy day. I'd guess there's a few on the forum. ? As much as I understand it's £325,000 without any property allowance if no children. Single people have brothers, sisters, nieces and nephews just like anybody else. Even ex local authority houses are selling for over £200,000 around the UK. Maybe you can plan under the 7 year rule but why should it be this way? Surely IHTax wasn't meant to be for ordinary folk ?  The allowance has been same for years now.  

Bridlington1

coastline said:

maisie_cat said:

Millyonare said:

CGT tax = up
Divvy tax = up
Pension tax = up
Second-home owner tax = up
Contractor tax = up
Income tax (fiscal drag) = up
Top-rate income tax = up
NI tax = up
Council tax = up
Car tax = up
Hybrid car tax = up
Electric car tax = up

inheritance tax = up, the easy win in my view given that only 3.8% of estates currently attract it.

I think it's unfair on single people who have bought houses and saved for a rainy day. I'd guess there's a few on the forum. ? As much as I understand it's £325,000 without any property allowance if no children. Single people have brothers, sisters, nieces and nephews just like anybody else. Even ex local authority houses are selling for over £200,000 around the UK. Maybe you can plan under the 7 year rule but why should it be this way? Surely IHTax wasn't meant to be for ordinary folk ?  The allowance has been same for years now.  

IH Tax threashold has been frozen since 2009. If it had gone up with inflation it would have been about £465k by now.