UK Politics General Discussion

[rob666]

They have borrowed more money openly, and explained how the finance will be paid through taxation openly, focusing on those that can afford it...with the books going through the Office for Budget Responsibility beforehand.
Better than the Tories did under a number of dodgy establishment leaders.

Penny off beer shakey, and tax stuff kept the same for us lowly workers.
Billions to go on the crippled nhs and schools.
Rejoice! Rejoice!
As someone once said.

 

[shakey]

They have borrowed more money openly, and explained how the finance will be paid through taxation openly, focusing on those that can afford it...with the books going through the Office for Budget Responsibility beforehand.
Better than the Tories did under a number of dodgy establishment leaders.

Penny off beer shakey, and tax stuff kept the same for us lowly workers.
Billions to go on the crippled nhs and schools.
Rejoice! Rejoice!
As someone once said.

Wahoo, 1p off beer. Which probably won't be passed on to the punter.

One thing that will be passed on though is the employers hike in national insurance contributions, through lower wages, and/or increased prices.

Mandy must be in total panic mode with the living wage increase and the NI increase.

This has been a budget with big changes and we won't know the effects immediately. If they have got it right then fair play to them, but I don't think we should be singing their praises just yet. It is a big gamble which could quite easily go tits up. Lets hope it doesn't.

 

[GooseOnTheLoose]

Yeah, so basically the private sector is getting screwed whilst the public sector (which is funded by the private sector) has only had pay rises since the new government came in. Public sector workers will still get generous pension schemes and paid from first day of sickness etc, whilst private businesses get squeezed which means that their pension schemes will get even worse and many workers already don't get paid from first day of sickness etc. Any extra costs put onto busineeses will just lead to a poorer deal for their workers. If they're telling us that we're desperate for money from everywhere then why don't public sector workers share some of the pain? Yes, I understand that many public sector workers have not had real-term pay-rises in recent years, but this is true in the private sector too. Just share the pain is all I'm saying.

The main political parties just need to grow up and agree that whoever wins a general election will put up income taxes a bit, especially for those who can afford it more.

DWP is the second largest civil service department, in terms of employees. Most DWP Civil Servants are "Executive Officer" grade, these are the job coaches that you'll see in JobCentre Plus. The pay for an EO at DWP, outside of London, is £29,500 per annum; inside of London it's £33,500.

For an Administrative Officer at DWP, outside of London, the annual salary is £23,811. These are the administrative support staff, they'll work in service centres, or generally assist with the day to day operation of the office or department.

The National Living Wage salary, per year, is £23,795.20.

Whilst public sector workers have generous pension schemes, and sick pay entitlement, they do not have competitive pay. I suppose you could call it a trade off. The private sector could also offer generous pension schemes, pay you to be sick from day one, but your salary will probably be lower to fund it.

Businesses do not have to put the strain of any additional costs onto their workers, that's a choice. If the cost of doing business is increasing for a company, they have plenty of ways they could choose to offset it. They could increase their prices / services; they could pay less out in bonuses; they could cut superfluous perks; they could also increase their trade, expand and do more business, or offer more services; they could improve customer retention and encourage more frequent repeat business; they could improve efficiency and productivity, through employee training, innovation or tech solutions. They do not have to put the strain of any additional costs of doing business onto their workers.

Absolutely catastrophic for family farms, hope they can find a way round the inheritance tax issue.

It's really not. Inheritance tax can be avoided in a few ways. Transferring any property, from one person to another, whilst both are still alive will avoid inheritance tax (provided that the original owner doesn't pass away within 7 years). Capital gains tax is only paid upon the sale of any asset. If a farmer gifts the farm to their family, the farmer can claim hold-over relief to defer any CGT liability. This means the family inherits the farm at the farmers original purchase price, and any CGT due is postponed until they sell the property. If it's truly about "family farming" , then realistically nothing changes. If it's about selling off the family farm, once the parents have passed on, well that's a different kettle of fish.
Additionally, I would be surprised if the ownership of the land weren't in the vehicle of a private limited company. In this scenario the farm would be owned by the family company, in perpetuity. It's really rather handy for succession planning, if you're intending to run everything as a business / company.

Not so great for small business

I'm not sure we were watching, or listening, to the same budget. Here's a breakdown on how it will affect small businesses.

• For 2025-26, the small business multiplier will be frozen, and retail, hospitality, and leisure (RHL) businesses will receive a 40% relief on their business rates, capped at £110,000 per business. These steps are intended to protect businesses from rising bills due to inflation.
• From 2026-27 onward, permanently lower business rates multipliers will be introduced specifically for RHL properties to support businesses in these sectors. This reduction will be funded by a higher multiplier applied to properties with Rateable Values exceeding £500,000.
• To counterbalance the increased National Insurance Contributions (NICs) burden on small businesses, the government is raising the Employment Allowance from £5,000 to £10,500 and eliminating the £100,000 threshold, extending its availability to all eligible employers. This expansion means that 865,000 employers will be exempt from paying any NICs in the subsequent year, and over half of employers subject to NICs liabilities will either experience no change or benefit overall.
• Recognising the significance of pubs, the budget includes a reduction in alcohol duty on draught products (about 60% of pub sales) by 1.7%, resulting in a penny reduction per average-strength pint.
• In spring 2025, the government plans to reveal a package simplifying tax administration with a focus on easing burdens on small businesses.
• To improve access to finance for start-ups and scale-ups, the budget proposes extending the Enterprise Investment Scheme and Venture Capital Trust schemes until 2035.
• The budget allocates over £250 million in funding for 2025-26 for the British Business Bank's small business loans programs.
• The budget also extends the Made Smarter Innovation program, with up to £37 million in funding in 2025-26, and doubles funding for the Made Smarter Adoption program to £16 million to support technology adoption among small manufacturing firms.
• The budget maintains the Corporation Tax Small Profits Rate and marginal relief at their current levels, ensuring 9 out of 10 actively trading companies, including a majority of SMEs, have a Corporation Tax rate below 25%.

Overall, the budget focuses on supporting small businesses through various tax reliefs, funding initiatives, and programs aimed at promoting growth and stability.

You can download a copy of the budget here:

https://assets.publishing.service.gov.uk/media/672232d010b0d582ee8c4905/Autumn_Budget_2024__web_accessible_.pdf

 

[shakey]

Overall, the budget focuses on supporting small businesses through various tax reliefs, funding initiatives, and programs aimed at promoting growth and stability.

The NI increases and minimum wage increase are going to have a negative effect on many businesses, large and small. And also on their employees. We may even see a jump in inflation if these extra costs are passed on to consumers. The chancellor has even admitted that employees will likely suffer as a result. As i said above , this is a big budget with big changes . They may work or they may make things worse. We will have to wait and see.

As for public sector jobs, I have worked in the public sector for about 14 years now and it is the best and probably easiest stress free job i have ever had. The pension is good , the hours are good, the holidays are great. The wages are probably slightly lower than in the private sector but the other perks easily make up for that.

 

[GooseOnTheLoose]

The NI increases and minimum wage increase are going to have a negative effect on many businesses, large and small. And also on their employees. We may even see a jump in inflation if these extra costs are passed on to consumers. As i said above , this is a big budget with big changes . They may work or they may make things worse. We will have to wait and see.

Most employers/businesses (which are subject to National Insurance Contributions), more than half, will not see any increases to their NIC burden.

865,000 employers will be completely exempt from paying any NICs. This overwhelmingly supports and helps small businesses, who right now have to pay NICs for their part-time staff, and won't have to pay anything when the budget comes into effect. This completely dwarfs any additional cost increase seen from the raising of the NLW.

As for public sector jobs, I have worked in the public sector for about 14 years now and it is the best and probably easiest stress free job i have ever had. The pension is good , the hours are good, the holidays are great. The wages are probably slightly lower than in the private sector but the other perks easily make up for that.

I'm not sure of the implications you're trying to make with this, given it's essentially what I also said in my post:

Whilst public sector workers have generous pension schemes, and sick pay entitlement, they do not have competitive pay. I suppose you could call it a trade off. The private sector could also offer generous pension schemes, pay you to be sick from day one, but your salary will probably be lower to fund it.

 

[shakey]

Then why has the chancellor admitted that the budget will hit workers pay ?

The OBR have said that disposable incomes will be £300 per person lower as a result of the budget.

Its easy to google stuff and come up with a load of numbers and you can pretty much find what you want and spin it how you want.

From my personal perspective, i am currently not convinced that these big changes were the right thing to do but like almost all of us I am no financial expert. We all rely on information from third parties who know better than us, and at the moment it is a mixed bag of reviews as you would expect.

All we can do is wait and see what happens, but if nearly 58 years on this planet has taught me anything, its that we live in a country with moderate politics and it rarely makes much difference whichever colour rosette the chancellor is wearing.

 

[GooseOnTheLoose]

Then why has the chancellor admitted that the budget will hit workers pay ?

She hasn't admitted that the budget will hit workers pay. The Chancellor has said this morning that the budget may impact wage growth. As with anything, it's entirely dependent on how businesses choose to react to the announcements. As it currently stands, a small business will be able to employ 4 extra people and still not pay a single penny more in National Insurance Contributions.

Its easy to google stuff and come up with a load of numbers and you can pretty much find what you want and spin it how you want.

I haven't Googled anything to come up with a bunch of numbers. Everything that I've posted has come directly from the budget document I posted earlier. The exact quote for the reference is:

2.41 At the same time, the government is increasing the Employment Allowance – raising revenue in a fair way, while protecting the smallest businesses. The current Employment Allowance gives employers with NICs bills of £100,000 or less a discount of £5,000 on their employer NICs bill. The government will protect the smallest businesses by increasing the Employment Allowance to £10,500 next year. The government will also expand the Employment Allowance by removing the £100,000 eligibility threshold, to simplify and reform employer NICs so that all eligible employers now benefit. Taken together, this means that 865,000 businesses will pay no NICs at all, and more than half of employers with NICs liabilities will either see no change or will gain overall next year.

You can find the text for the above quote on Page 46 of the budget document I posted earlier.

The OBR have said that disposable incomes will be £300 per person lower as a result of the budget.

This isn't strictly true, what they have said is that real household disposable income (RHDI) per person is forecast to grow by an average of just over ½ per cent a year between 2024-25 and 2029-30 (Section 2.40, page 42). While this is below the pre-pandemic average growth of around 1 per cent, RHDI is still expected to rise by 3½ per cent across the forecast period.

The level of real household disposable income is expected to be 1¼ per cent lower by the start of 2029 compared to the pre-measures forecast. This reduction is primarily attributed to policies announced in the budget, with approximately 85% of the difference explained by those policies. This suggests a shift of real resources away from private household incomes to increase public service provision. (Section 2.41, page 45).

The sources for both of the above references is the OBR's "Economic and fiscal outlook, October 2024": - https://obr.uk/docs/dlm_uploads/OBR_Economic_and_fiscal_outlook_Oct_2024.pdf

The £300 figure, which you refer to, means that compared to the pre-measures forecast, the level of real household disposable income could be around £300 less by 2029 than previously forecast. On a purely technical level, this is money you didn't have yet anyway, but could have had if things remained the same and economic factors favoured it, or remained stable.

 

[shakey]

Impacting wage growth can be defined as hitting workers pay.

It is effectively a pay cut in the medium to long term.

Referencing the budget document to critique the budget is like referencing the bible to prove Christianity.

We will have to agree to disagree on whether this budget is good or bad, but ultimately at the moment nobody knows. Forecasts are just forecasts and the proof as they say will be in the pudding !

 

[rob666]

Things have clearly shifted to the left with this budget.
The right has dominated British politics for forty years.
This shift is undoubtedly designed with good intentions, attempting to make society a little more equal.
That is why we voted them in, apparently.
And a penny off a pint of beer.

 

[shakey]

I would argue that British politics has been somewhere in the center ground for the last 40 years, and still is. (Certainly compared to many other countries). This is a nudge to the left but by no means a lurch, and as long as we stay somewhere in the middle third then there probably isn't too much to worry about.

I am just happy they didnt scrap the single person council tax discount , which was rumoured at one point.

 

[DiogoJ42]

Has anyone been following what's kicking off in the old sunny side down prison cell? Seems our world famous breakdancing cousins have decided they want nothing to do with King Chuck and his missus. They are calling the UK a has-been on the world stage. Seems they want to distance themselves from us and our unelected Gorious God Emperor.

 

[Plastic Person]

I would argue that British politics has been somewhere in the center ground for the last 40 years, and still is. (Certainly compared to many other countries).

The UK is certainly not as politically polarised as the US, nor does it have a government that forces it toward cooperation, as in the German parliament.

Nonetheless, fifteen years of Tory rule have moved the Overton Window much further to the right than the political landscape ever was previously, although there has been much social progress (some organic, some very hard fought for!) The 'centre' therefore moves with the times. To my ears, the rhetoric and caution of Starmer's speech at the Labour conference this year could have been delivered from the mouth of David Cameron, back in his earliest years as PM. The budget, meanwhile, is more definitively, traditionally Labour.

 

[shakey]

Has anyone been following what's kicking off in the old sunny side down prison cell? Seems our world famous breakdancing cousins have decided they want nothing to do with King Chuck and his missus. They are calling the UK a has-been on the world stage. Seems they want to distance themselves from us and our unelected Gorious God Emperor.

Could we have that in English please ?

 

[DiogoJ42]

Could we have that in English please ?

Australia hates our new king and wants to have no connection to the UK any more.

 

[BarryZola]

Has anyone been following what's kicking off in the old sunny side down prison cell? Seems our world famous breakdancing cousins have decided they want nothing to do with King Chuck and his missus. They are calling the UK a has-been on the world stage. Seems they want to distance themselves from us and our unelected Gorious God Emperor.

Seems fair enough

Freeloaders.

 

[GaryH]

I thought the budget was going to be a lot worse than it was. However two things:

1. How will increasing the taxes on employers help to reduce inflation when businesses will have no choice but to pass on this increase to consumers.

2. It’s ok to say farmers should pay inheritance tax but these farms have been passed down through generations over many years. The farms grow in size thus increasing their value. However, farms are vital to the UK for not just food supply, but maintenance of the land, the hedges along country lanes and so on. I would hate to see the majority of farms on the UK be lost and sold off to developers and the UK becoming even more dependent on imported produce.

 

[rob666]

I would argue that British politics has been somewhere in the center ground for the last 40 years, and still is. (Certainly compared to many other countries). This is a nudge to the left but by no means a lurch, and as long as we stay somewhere in the middle third then there probably isn't too much to worry about.

I am just happy they didnt scrap the single person council tax discount , which was rumoured at one point.

We must live on different planets shakey...though our counties are often considered as such.
I don't know anyone who thinks Thatcher made things more equal and "centrist"...just hard right philosophy.
Started out stealing the milk from the mouths of infants, and went downhill from there.
She caused massive division, those following kept the status quo to keep themselves in power.
But nowhere near the centre ground.

And Gary, most of the farmers I know personally have been ripping out hedges in the name of business for the last three decades.
Not noticed all the fields getting that bit bigger and more economic then?

 

[BarryZola]

To be fair, all the farmers have to do is pass the farm down to a kid before they get too old. In that case 95% of farms will be passed down without inheritance tax as it'll be more than 7 years before the original elder farmer dies. Also tell the kid not to get married as a divorce could lead to the estate being split up (or get a pre-nup). Apparently people have been buying farms and not really farming them, but using them as a loophole to pass down wealth without having to pay the inheritance tax on them.

Ideally you wouldn't have to bring in things like this as I agree that food security is an amazingly important issue for us, but there we go.

 

[GooseOnTheLoose]

1. How will increasing the taxes on employers help to reduce inflation when businesses will have no choice but to pass on this increase to consumers.

Fewer than half of employers in this country will see any rise to their National Insurance Contributions bill. They have multiple ways of covering the additional cost of doing business, without taking the option of increasing prices.

They could pay less out in bonuses; they could cut superfluous perks; they could also increase their trade, expand and do more business, or offer more services; they could improve customer retention and encourage more frequent repeat business; they could improve efficiency and productivity, through employee training, innovation or tech solutions.

2. It’s ok to say farmers should pay inheritance tax but these farms have been passed down through generations over many years. The farms grow in size thus increasing their value. However, farms are vital to the UK for not just food supply, but maintenance of the land, the hedges along country lanes and so on. I would hate to see the majority of farms on the UK be lost and sold off to developers and the UK becoming even more dependent on imported produce.

I've explained in an earlier post about how inheritance tax can be, and usually is, avoided in the case of farms. Although farms do grow in size, and increase their value, the increase in value is not taxed (unlike Capital Gains Tax). Further to this, the 100% relief rate will remain for the first £1 million of combined agricultural and business assets, any amount exceeding this threshold will only receive a 50% relief rate. This is in addition to the existing Inheritance Tax nil rate band worth £1 million to a couple & a surviving spouse.

In this scenario, a £2 million pound farm can be passed on without any tax liability at all. Anything above the £2 million cap will be taxed. In the case of a farm worth £2.2 million, you would only pay inheritance tax (not capital gains) on £200,000.

 

[shakey]

We must live on different planets shakey...though our counties are often considered as such.
I don't know anyone who thinks Thatcher made things more equal and "centrist"...just hard right philosophy.
Started out stealing the milk from the mouths of infants, and went downhill from there.
She caused massive division, those following kept the status quo to keep themselves in power.
But nowhere near the centre ground.

And Gary, most of the farmers I know personally have been ripping out hedges in the name of business for the last three decades.
Not noticed all the fields getting that bit bigger and more economic then?

Thatcher came to power 45 years ago, and yes she was to the right of UK politics and lost the plot in the end.

Since the early 90's there has been little between the two major parties when they have been in power, so maybe I should have said the last 30 years instead of the last 40.