Fair’s fair.

Ticked

Instead of everyone being handed £600, especially to those who don’t need it, I’d much rather see the nurses given a decent rise. Anyone agree, or am I, as usual, a voice in the wilderness? I suspected (knew rightly) that when COVID eased, the powers that be would pee on the nurses. Nurses go out for a day or two and they’re sorely missed, politicians go off for months and, while there’s some girning, they really aren’t missed. Look after those who are important!

RikM

Maybe I'm missing something...? It's the energy companies which are being handed the money, and it's being paid for by the customers (given that the govt set it up as a kind of compulsory loan)... so it's not an alternative kind of thing, unless you count where they could have nationalised the energy companies instead and saved the cost of bailing them out...

Money_Grabber13579

RikM said:

Maybe I'm missing something...? It's the energy companies which are being handed the money, and it's being paid for by the customers (given that the govt set it up as a kind of compulsory loan)... so it's not an alternative kind of thing, unless you count where they could have nationalised the energy companies instead and saved the cost of bailing them out...

No, it’s being paid for by taxpayers, not energy customers. Whilst it is being administered by energy companies, it will not be repaid to the government by the energy companies. The government has to find it through general taxation, meaning even higher taxes in the future.

Ticked said:

Instead of everyone being handed £600, especially to those who don’t need it, I’d much rather see the nurses given a decent rise. Anyone agree, or am I, as usual, a voice in the wilderness? I suspected (knew rightly) that when COVID eased, the powers that be would pee on the nurses. Nurses go out for a day or two and they’re sorely missed, politicians go off for months and, while there’s some girning, they really aren’t missed. Look after those who are important!

I certainly sympathise with health care workers but the question has to be asked as to where the money is going to come from to fund the 19% rise they are demanding. Yes, some people may not be in need of the £600 but the grand total of all that would only be a fraction of the additional bill which would arise from such a pay rise. What needs to be remembered that the public sector salaries and fantastic pension schemes (which aren’t available to anyone else) have to be paid for through taxation, and the tax burden is already extremely high. 

To illustrate this point, take a 40% taxpayer, with a salary of say £60k. On the top c.£10k of their salary, they pay a total of 42% tax and NIC. So they are left with £5.8k after tax and £4.2k goes to the government. Their employer has to pay 13.8% NIC on this amount, so that’s another £1.38k to the government. The employee takes their £5.8k and uses it to purchase a new car from their employer (just to illustrate the point). 20% VAT is likely to be charged on that, so that’s another c.£1k to the government. The employer will pay corporation tax on their profits, soon to be at 25%, and that will be passed onto the customer as well so companies earn their target returns. What I’m saying therefore is that the employee has earned £10k and all but £3.4k goes back to the government in tax.

There is virtually no scope for raising more revenue through additional taxes as raising taxes even more very quickly provides a disincentive to people actually even trying to earn money in the first place and when that happens, tax receipts drop off a cliff.

Yes, it’s very easy to point the finger at offshore billionaires and say they should pay more tax, but it’s virtually impossible to actually get it off them and so that isn’t a solution. When they are in a different jurisdiction, we have no claim over them in that jurisdiction and so the only way we’d get them to pay up is if the whole world agreed to a common system. And we know how unlikely that is to happen.

As a country, we’re got some very difficult choices again, perhaps even harder than we did in 2008. We’ve no money, we’re borrowed to the hilt, we can now barely afford the interest bill on the borrowing and we’ve virtually no scope to raise any more income. So cuts is all that is left and if we give nurses a 19% pay rise, who is going to bare the corresponding cut? Not paying £600 to a few thousand people isn’t going to cut it.

guiriman

Money_Grabber13579 said:

To illustrate this point, take a 40% taxpayer, with a salary of say £60k. On the top c.£10k of their salary, they pay a total of 42% tax and NIC. So they are left with £5.8k after tax and £4.2k goes to the government.

If they've no kids that's right. If they've two kids then they'll have lost £1,885 in child benefit to the government too.

guiriman

Ticked said:

Instead of everyone being handed £600, especially to those who don’t need it, I’d much rather see the nurses given a decent rise. Anyone agree, or am I, as usual, a voice in the wilderness? I suspected (knew rightly) that when COVID eased, the powers that be would pee on the nurses.

What do you define as a decent rise? I don't know what the government offered but a 19% pay rise sounds like a lot.

RikM

19% at this point just brings them back up to where they would be, had there not been a decade of effective pay cutting. It's not even an increase in real terms

qwert_yuiop

The trouble is, the same applies to pretty much everyone else. Where’s it going ? Back to the 70s, the last time there was inflation like this, and strikes galore. 

Getting much post this Christmas? So much for online shopping this year.

RikM

Different driver though. Last time it was (arguably) wage driven. This time it's profit driven. Excess is driving inflation, but it's not on the workers side of things.

The govt should be pleased. Inflation drives down debt, by devaluing the earlier debt issues. But they can"t do anything with the windfall, because they spaffed it all away on their mates and "Kwazikaze" budgets.

RobM99

RikM said:

19% at this point just brings them back up to where they would be, had there not been a decade of effective pay cutting. It's not even an increase in real terms

Exactly. People don't demand high increases without prices going up in the first place.

qwert_yuiop

Did any of you watch European central banker Christine la Garde on RTÉ late late show last week? Apparently this inflation came out of nowhere, and wasn’t foreseen. Pretty unimpressive.

qwert_yuiop

The govt should be pleased. Inflation drives down debt, by devaluing the earlier debt issues. 

Well, yes, but not if it’s your debt and it’s subject to interest rate rises in tandem with inflation. 

A friend here was building a house late last year. Thanks to a surge in material and labour costs, the builder was unable to complete within tendered price and pulled out. Usually it’s a fairly simple matter to get another contractor to finish. Not this time - no one wants to commit.