The 'Emergency' Budget

ainsworth74 · 8 Jul 2015

Dave1987 said:
Capping the benefits a household can claim to £20k means they can still claim up to around £28-£30k in real terms, taking into account income tax and National insurance.

Not really. Most state benefits are tax free including the ones that usually cause the Benefit Cap to apply (Housing Benefit and Child Tax Credit). The only major benefits that are taxable are State Pensions and Job Seekers Allowance (there are others but those will be the big ones). So when it says £20,000 (or £23,000 in London) it really does mean that as you won't be paying any tax normally due to not having sufficient income to be over the personal allowance.

jcollins said:
That's the thing I don't get. An adult is someone over the age of 18, so why talk about over 21s or over 25s when the minimum wage or benefits are being discussed. I think it's one thing saying the maximum amount of benefits are only available to people who have paid x years' of NI but apart from that I don't get a multiple tier system for people over 18.

Agreed. That struck me as being odd but it seems increasingly common to restrict benefits for young people wherever possible so adding in another tier in minimum wage I guess is continuing that policy.

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pemma · 8 Jul 2015

Full budget report is here: https://www.gov.uk/government/uploa...232/50325_Summer_Budget_15_Web_Accessible.pdf

The Northern Powerhouse, which George was pretty quiet on is page 65, where it names a new council - Chester West & Chester!

steamybrian · 8 Jul 2015

jcollins said:
Full budget report is here: https://www.gov.uk/government/uploa...232/50325_Summer_Budget_15_Web_Accessible.pdf

The Northern Powerhouse, which George was pretty quiet on is page 65, where it names a new council - Chester West & Chester!

A few things of rail interest I have found..

... in addition to extending the Robin Hood line to Ollerton..

page 68.. Consideration to be given to opening a new station between Castle Cary and Taunton
page 69...Study into running trains from Hastings- London via Rye and HS1
page 69...Extending scope of study of reopening Uckfield to Lewes to look at improving rail links between London and South Coast
page 97..Regulated rail fares capped at RPI.

pemma · 8 Jul 2015

steamybrian said:
in addition to extending the Robin Hood line to Ollerton

When you don't know there's an Ollerton in Nottinghamshire and know there's one in Cheshire, that sounds like a major project.

Regulated rail fares capped at RPI.

That's just confirmation of something they'd already announced

Dave1987 · 8 Jul 2015

ainsworth74 said:
Not really. Most state benefits are tax free including the ones that usually cause the Benefit Cap to apply (Housing Benefit and Child Tax Credit). The only major benefits that are taxable are State Pensions and Job Seekers Allowance (there are others but those will be the big ones). So when it says £20,000 (or £23,000 in London) it really does mean that as you won't be paying any tax normally due to not having sufficient income to be over the personal allowance.

Agreed. That struck me as being odd but it seems increasingly common to restrict benefits for young people wherever possible so adding in another tier in minimum wage I guess is continuing that policy.

My point is the working the average working man/woman would need to earn around £28-£30k per year before tax and NI to get £20k take home pay. The average wage in the UK is £25k so the benefits cap is still above the UK average salary.

pemma · 8 Jul 2015

Dave1987 said:
My point is the working the average working man/woman would need to earn around £28-£30k per year before tax and NI to get £20k take home pay. The average wage in the UK is £25k so the benefits cap is still above the UK average salary.

Relating to benefits they don't just have to be for people out-of-work. Working Tax Credits were specifically introduced for people in work who didn't earn enough. Of course cutting income tax is better but the raising of the personal allowance doesn't automatically mean Tax Credits can be scrapped without consequences.

transmanche · 8 Jul 2015

jcollins said:
Relating to benefits they don't just have to be for people out-of-work. Working Tax Credits were specifically introduced for people in work who didn't earn enough. Of course cutting income tax is better but the raising of the personal allowance doesn't automatically mean Tax Credits can be scrapped without consequences.

It's even more complex than that. Losing £500 of tax credit pa means the tax threshold needs to rise by £2,500 to leave you no worse off. And if you don't actually earn enough to pay tax, then raising the tax threshold won't benefit you at all.

And arguably the tax credit system targets those who need help the most (families with children), whereas increasing the tax threshold also benefits high-earning single childless people.

EM2 · 8 Jul 2015

Dave1987 said:
My point is the working the average working man/woman would need to earn around £28-£30k per year before tax and NI to get £20k take home pay. The average wage in the UK is £25k so the benefits cap is still above the UK average salary.

That's the average working wage for one person. The benefit cap is per *household*.

AntoniC · 8 Jul 2015

One thing that grabbed my attention as a civil servant was the 1% pay award for the next 4 years.

(The boring & technical thing about that is that it isnt actually a pay award, its 1% of the pay bill) and as I am top of my payscale my last two pay awards have been 0.7%and 0.5% non consolidated so they dont count towards my pension, and the last pay award for 2014-15 was £72 net for the year.

Compare that to my annual all zones trio which went up £60 during the same year.

At least I can look forward to my gold plated occupational pension which Daily Fail readers believe all Civil Servants get when they retire....

Dave1987 · 8 Jul 2015

EM2 said:
That's the average working wage for one person. The benefit cap is per *household*.

Yes but the whole point of the benefits system is to provide a safety net, not a way of life. I think the best idea is to give claimants food vouchers then money can't be wasted on none essentials. If you want the luxuries in life then go and get a job. So the fact that a household can claim more than the average wage in the UK in benefits is just wrong.
--- old post above --- --- new post below ---

transmanche said:
It's even more complex than that. Losing £500 of tax credit pa means the tax threshold needs to rise by £2,500 to leave you no worse off. And if you don't actually earn enough to pay tax, then raising the tax threshold won't benefit you at all.

And arguably the tax credit system targets those who need help the most (families with children), whereas increasing the tax threshold also benefits high-earning single childless people.

But that's where increasing the minimum wage to a living wage comes in. Raising the level at which you pay income tax benefits all working people. The high earners will barely notice it but for someone of £15-20k per year it will be a notable difference in take home pay.

Xenophon PCDGS · 8 Jul 2015

DarloRich said:
In fact if you pay ANY inheritance tax at all you must be catastrophically stupid! There are so many ways to divest your estate in a tax efficient manner.

Have no fears about both my wife and I not having enough financial acumen to cover ourselves financially in all such matters. Believe me when I say that we most certainly do.

Darandio · 8 Jul 2015

Paul Sidorczuk said:
Have no fears about both my wife and I not having enough financial acumen to cover ourselves financially in all such matters. Believe me when I say that we most certainly do.

Yes Paul, you live in an enormous house and have huge reserves of money, we know...........

...........Now can I borrow that fiver? :lol:

EM2 · 8 Jul 2015

Dave1987 said:
Yes but the whole point of the benefits system is to provide a safety net, not a way of life. I think the best idea is to give claimants food vouchers then money can't be wasted on none essentials. If you want the luxuries in life then go and get a job. So the fact that a household can claim more than the average wage in the UK in benefits is just wrong.

What do you class a luxury? A TV? A radio? A landline phone?
How do they pay rent, utilities, fares, council tax, commitments they may have had before they needed to claim (such as outstanding credit card bills) and so on?
I get the feeling that you've never needed help, or even known anyone that has.
Let's say they get a job, but earn so little that they still need to claim some benefits. Are they allowed to buy 'luxuries', or do they have to have food vouchers too?

DynamicSpirit · 8 Jul 2015

Dave1987 said:
Yes but the whole point of the benefits system is to provide a safety net, not a way of life.

Yes, a safety net is the point of it. But what I think you may be missing is that with the benefits cap, it often isn't even providing that. Remember the cap is per *household*. Say you have a husband and wife who have two young children living in London. They will now be limited to a maximum of £23K per year. In large parts of London, you won't get much change for the basic rent on a small flat for that. Factor in water, gas and electricity bills and - umm - you could easily have no money left for food at all!

transmanche · 8 Jul 2015

Dave1987 said:
But that's where increasing the minimum wage to a living wage comes in. Raising the level at which you pay income tax benefits all working people. The high earners will barely notice it but for someone of £15-20k per year it will be a notable difference in take home pay.

The counter-argument being that the tax credit system gives the benefit to those who really need it, and not to those who will barely notice it. And in a time of austerity, those who will barely notice it are helping out those for who it will make a notable difference.

Or to use your example of a person earning £15-20k a year, the tax threshold increase to £11,000 next year will boost their take-home pay by £80. But for someone earning £50k a year, next year's tax threshold changes will boost their take-home pay by £203.

Robertj21a · 8 Jul 2015

All in all an excellent budget, far better than most people expected. It must be one of the few occasions when something has been proposed that really will cut the massive benefits bill. I would have liked to see a bit of specific reassurance for those disabled who really do need as much help as we can manage.

transmanche · 8 Jul 2015

Robertj21a said:
It must be one of the few occasions when something has been proposed that really will cut the massive benefits bill.

The only way to really achieve that would be to propose a cull of pensioners, as pensions and other benefits for older people make up more than half of the UK's benefits bill.

EM2 · 8 Jul 2015

Robertj21a said:
I would have liked to see a bit of specific reassurance for those disabled who really do need as much help as we can manage.

Is it only the disabled that need help then?

Kite159 · 8 Jul 2015

Introducing a new minimum wage for over 25s will make things at my work place quite interesting. I can see supervisors getting a larger than normal pay-rise to help maintain a premium between what the front-line staff will be on (£7.20) to what a supervisor will be on. Otherwise I can see some of the supervisors stepping down, the extra workload and stress not worth the additional ~30p an hour.

And it will be interesting if they will bring in the higher wage for just those over 25, keeping the under 25s on the lower min wage, although come next year it could be a different company depending on the outcome of the contract bid

Polarbear · 8 Jul 2015

I'm also a civil servant & today's announcement that I have another four years (five including this year's delayed pay award) makes it a total of 9 years with no real term increase in pay.

As indicated by an earlier poster who also works for the government, this is only part of the story. Increases in pension contributions coupled with inflation that was as high as 5% at the start of the 2010 parliament have meant that in real terms, things are much tighter than they used to be.

I know many others have experienced pay freezes over the last few years. However, it is likely that inflation will start to increase as the economy recovers (though the economic outlook is not quite as rosy as suggested by the conservatives if you look at all the data). Coupled with that, a 1% pay remit stacked against a need to shift lower paid staff working in the civil service up to the minimum wage, I cannot honestly see that I will ever receive a pay increase in real terms ever again.

Today has reaffirmed just how little respect is now afforded to those who work in the public sector, by politicians (and those who support them). I say this not for myself, but nurses, carers, support workers & many other people that the public rely on daily. Never have I felt less proud to be a civil servant than today as I realise how little we matter.

muddythefish · 8 Jul 2015

Gordon Brown and Ed Balls would be proud of parts of that Budget.

Taking his cue straight from the Labour manifesto, there are increased taxes on the wealthy, a commitment to a Living Wage (employers groups are up in arms over that one), plus a clampdown on non-doms and tax avoidance and evasion.

On the downside he has again attacked benefits claimants and the working poor, none of whom are responsible for the fiscal crisis of the past 6 years that they are being punished for.

One cheer for Gideon.

Metrailway · 8 Jul 2015

EM2 said:
Dave1987 said:

My point is the working the average working man/woman would need to earn around £28-£30k per year before tax and NI to get £20k take home pay. The average wage in the UK is £25k so the benefits cap is still above the UK average salary.

Click to expand...

That's the average working wage for one person. The benefit cap is per *household*.

Well according to the ONS, the median disposable income per household (includes cash benefits such as JSA and Housing benefit) in the UK is £24,500 in 2013/14.

So the £20,000/£23,000 (tax-free) benefit cap per household is not far off the median household income.

DynamicSpirit · 8 Jul 2015

Metrailway said:
Well according to the ONS, the median disposable income per household (includes cash benefits such as JSA and Housing benefit) in the UK is £24,500 in 2013/14.

So the £20,000/£23,000 (tax-free) benefit cap per household is not far off the median household income.

The problem with that reasoning is that the median income per household is going to be skewed by the massive numbers of households that contain just one person, and for whom £20K can therefore give quite a good standard of living (if you don't live in London or somewhere where rents are massive, or if you're older and have already bought your home and paid off your mortgage). But the benefit cap applies to households no matter how large, and makes very little allowance for vastly varying rent levels in different places.

To be even remotely fair, any benefit cap would need to be related to household size and to typical costs of living in each locality. If it were done that way, to make sure that it doesn't leave anyone unable to feed and house themselves, then I'd probably have no problem with it.

Bob Ames · 8 Jul 2015

DynamicSpirit said:
Yes, a safety net is the point of it. But what I think you may be missing is that with the benefits cap, it often isn't even providing that. Remember the cap is per *household*. Say you have a husband and wife who have two young children living in London. They will now be limited to a maximum of £23K per year. In large parts of London, you won't get much change for the basic rent on a small flat for that. Factor in water, gas and electricity bills and - umm - you could easily have no money left for food at all!

So how much would be fair to you? £30K? £40K? Where do you draw the line? This might just be the incentive they need to get a job (or move the f**k out of London! :lol:

)

Robertj21a · 8 Jul 2015

EM2 said:
Is it only the disabled that need help then?

I'm sure you can add in your own choice(s), I've prioritised mine.

Dave1987 · 8 Jul 2015

DynamicSpirit said:
Yes, a safety net is the point of it. But what I think you may be missing is that with the benefits cap, it often isn't even providing that. Remember the cap is per *household*. Say you have a husband and wife who have two young children living in London. They will now be limited to a maximum of £23K per year. In large parts of London, you won't get much change for the basic rent on a small flat for that. Factor in water, gas and electricity bills and - umm - you could easily have no money left for food at all!

I can't afford to live in London, so I don't......

DarloRich · 8 Jul 2015

I love people pronouncing on benefits when the nearest they have ever been to benefits is a TV programme or the Daily Mail! :roll:

Dave1987 said:
I can't afford to live in London, so I don't......

bully for you that you have a choice! Do you ever consider that some people don't?

Xenophon PCDGS · 8 Jul 2015

hock:

transmanche said:
The only way to really achieve that would be to propose a cull of pensioners, as pensions and other benefits for older people make up more than half of the UK's benefits bill.

I suppose that having attained the age of three score years and ten, your posting above appears to find a novel way of ensuring that Paul Sidorczuk makes no further postings on this website in the style of ......"Will no-one rid me of this troublesome poster"...

hock:

Joviality apart from your compulsory euthanasia programme, just before the tumbril calls at my manor house to take me to the place of execution, can I as one who has paid all the required state pension payments for over 47 years, ask if pensions are "benefits", what is the name for the state pension contributions that I paid INTO the coffers of the state for that time period? Were those also benefits to the state paid by me, to turn your idea upon its head?

Of course, being one who always ensured that my old age needed far more than the state pension, various (un-named) methods were used to transfer monies from my mid-20's into pension investment bonds (I did not fall into the trap as many did of believing what Equitable Life said was true) and in my later years from mid-30's onwards, when I had reached the higher echelons of Senior Management, further share option measures were also transferred into bond securities.

DarloRich · 8 Jul 2015

Paul Sidorczuk said:
hock:

I suppose that having attained the age of three score years and ten, your posting above appears to find a novel way of ensuring that Paul Sidorczuk makes no further postings on this website in the style of ......"Will no-one rid me of this troublesome poster"...hock:

Joviality apart from your compulsory euthanasia programme, just before the tumbril calls at my manor house to take me to the place of execution, can I as one who has paid all the required state pension payments for over 47 years, ask if pensions are "benefits", what is the name for the state pension contributions that I paid INTO the coffers of the state for that time period? Were those also benefits to the state paid by me, to turn your idea upon its head?

Of course, being one who always ensured that my old age needed far more than the state pension, various (un-named) methods were used to transfer monies from my mid-20's into pension investment bonds (I did not fall into the trap as many did of believing what Equitable Life said was true) and in my later years from mid-30's onwards, when I had reached the higher echelons of Senior Management, further share option measures were also transferred into bond securities.

but Paul by that token any contribution made by the individual via national Insurance makes, say, job seekers allowance a non benefit benefit

RichmondCommu · 8 Jul 2015

jcollins said:
David: Out of interest where do you live? I just checked the current inheritance tax threshold and it's £325,000. Only a minority of the houses near me are valued at £325,000 or more and I apparently live in one of the most expensive towns in the North of England to buy a house! So it's a fair conclusion that very few people in the North of England will benefit from that change and I imagine the situation is similar in the Midlands, Scotland, Wales and Northern Ireland.

However in my neck of the woods there are many people who will benefit from today's decision. I've been a Labour member / voter all my working life but on this occasion I agree with Tory policy in that when my wife and I pass away my children and grand children will not be clobbered with a huge amount of tax.

The 'Emergency' Budget

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