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Budget 2016

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Tetchytyke

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The sugar tax is another one of David Cameron's "dead cat" policies (I.e. whack a dead cat on the table and everyone talks about it rather than the real issues).

The real issue is that borrowing has now topped £1.5tn- up from £900bn when Gideon took charge of the economy- and the deficit is getting bigger. Gideon's not so much crashed the car as repeatedly rammed it into a brick wall.

Good to see disabled people face a huge cut in support to pay for a cut in capital gains tax and higher rate income tax. Priorities.
 
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Busaholic

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Cameron let Osborne respond to it when he was Shadow Chancellor so it must have been Cameron who did the unusual opposed to Milliband. Although, like I said McDonnell responded after the previous budget.

I think confusion arises as to what is a Budget - traditionally, it has been a statement by the Chancellor of the Exchequer made in March each year setting out spending and taxation plans for (usually) the tax year beginning in April of the following year, though allowing for late changes to the year about to begin. Over recent years, and as a direct result of having a series of incompetent governments, the number of 'budgets' has increased to as many as four in a year, under the guise of Autumn Statements etc. So, if we take March 2015 as the previous true Budget, then John McDonnell was hardly in a position to lead Labour's response, as a mere backbencher.
 

Tetchytyke

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Dave1987 said:
So there really isn't much point in earning between £45k to say £60k a year because you get hit for tax so much that you never really see that income in your pay packet until you earn more than £60k a year.

Eh? You what?

You do realise you only pay 40% on anything earned OVER the threshold, not the whole income, don't you?
 

Dave1987

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Eh? You what?

You do realise you only pay 40% on anything earned OVER the threshold, not the whole income, don't you?

Yes, so anything you earn over the threshold you only get just over half in your pay packet. So you might as well put anything you earn over the 40p threshold into additional pension contributions because that say £4K you earn over the threshold would be taxed like crazy. Whereas you can put the full 4k into your pension pot.
 
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dcsprior

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Yes, so anything you earn over the threshold you only get just over half in your pay packet. So you might as well put anything you earn over the 40p threshold into additional pension contributions because that say £4K you earn over the threshold would be taxed like crazy. Whereas you can put the full 4k into your pension pot.

As I mentioned in my previous post a higher rate taxpayer doesn't "lose" that much more to tax+NI than a basic rate taxpayer.

For your example of earning an extra £4k before tax, that means the difference between £2,720 in your pocket and £2,320 - so they only get £400 less (14.7% less). I think £2,320 is still worth working for.

I do agree that putting more into a pension is more attractive for a 40% taxpayer, and of course higher earners are more likely to be able to be able to afford to do this, so in fact their extra tax paid on the additional £4k is likely to be less than the extra tax paid on an additional £4k earned by a basic rate taxpayer.
 

Xenophon PCDGS

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I was sure that someone on this thread, in addition to all the expected criticisms, would comment unfavourably on the idea of a "Lifetime ISA", but no-one appears to have found fault with that idea

.....or are they having a think on how to introduce some political vitriol into their posting when they eventually get round to making it appear in print...:roll:
 
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Tetchytyke

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I think it's a good idea, but one that will have very limited practical use. People are not saving because they don't have any money to save with, a government bung isn't going to change that. It will mostly benefit people who already do save. The middle classes get a faux bung.

I'd rather they spent the cash on disabled people, but that's by the by.

Dave1987, that isn't what you said. You said "it's not worth" earning more than £45k because of tax, until earnings of (seemingly arbitrarily) £60k. That is clearly nonsense; people keep about 50% of what they earn, and 50% of £15k is an awful lot of money.

The fact some savings products are more tax efficient for higher rate taxpayers is neither hither nor thither. Although, as dcsprior points out, the "squeezed middle" on their salary at just the double the national average pay less tax than standard rate taxpayers due to this tax arrangement.
 
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bb21

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As I mentioned in my previous post a higher rate taxpayer doesn't "lose" that much more to tax+NI than a basic rate taxpayer.

For your example of earning an extra £4k before tax, that means the difference between £2,720 in your pocket and £2,320 - so they only get £400 less (14.7% less). I think £2,320 is still worth working for.

I do agree that putting more into a pension is more attractive for a 40% taxpayer, and of course higher earners are more likely to be able to be able to afford to do this, so in fact their extra tax paid on the additional £4k is likely to be less than the extra tax paid on an additional £4k earned by a basic rate taxpayer.

So essentially, a loophole for the rich, looking at it another way. :lol:
 

David

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I think it's a good idea, but one that will have very limited practical use. People are not saving because they don't have any money to save with, a government bung isn't going to change that. It will mostly benefit people who already do save. The middle classes get a faux bung.

People are not saving because the interest rates on saving accounts (including cash ISAs) are at historic lows, plus the fact you can get a far higher rate on your current account (in most cases).

With the Personel Savings Allowance coming into effect from next month, there will be no point to cash ISAs anyway, unless your have over £10000 in savings, as the first £1000 on interest earned each financial year will be paid without tax being deducted.
 

RichmondCommu

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The sugar tax will cost my family a fortune as we don't drink products containing certain sweetners which are linked with cancers. Plus sugar tastes better.
But why just pop? It makes no sense to target just that one type of drink.

However sugar consumption only encourages obesity and of course it also rots your teeth.
 

Xenophon PCDGS

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People are not saving because the interest rates on saving accounts (including cash ISAs) are at historic lows, plus the fact you can get a far higher rate on your current account (in most cases).

That can depend on the time period of the ISA, as long-period ISA of different holdings types can and do pay better interest rates than those short-term ones.

I dare not say more than this from personal use of these for obvious reasons..:oops:
 

furnessvale

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I guess, but what about the government looking at these businesses instead of charging the consumer?

Whatever cost you apply to a business eventually get passed down the line to the customer or the business goes bankrupt.

The whole point is this tax will force businesses and consumers to review their products and purchasing decisions.
 

Bletchleyite

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Eh? You what?

You do realise you only pay 40% on anything earned OVER the threshold, not the whole income, don't you?

To be fair to him, stamp duty used to follow exactly that ridiculous arrangement (income tax of course doesn't).
--- old post above --- --- new post below ---
I think it's a good idea, but one that will have very limited practical use. People are not saving because they don't have any money to save with, a government bung isn't going to change that. It will mostly benefit people who already do save. The middle classes get a faux bung.

I'd rather they spent the cash on disabled people, but that's by the by.

I'd also rather they packed in subsidising the housing market, as it sustains high prices. Pull away all the support (including banning shared ownership except at commercial rent) and spend it on social rented housing and housebuilding, and watch the prices fall.
 

Tetchytyke

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People are not saving because the interest rates on saving accounts (including cash ISAs) are at historic lows, plus the fact you can get a far higher rate on your current account (in most cases).

That depends how you are defining saving.

You're right, people are moving away from traditional savings products because of low interest rates. The popularity of companies like Funding Circle is not because suddenly people want to invest in small business, it's because people can't get the returns any other way. And yes, money with people like Funding Circle probably won't show up as savings because it is an investment product not a savings product.

But that isn't why people on lower incomes are not saving. People on lower incomes are not saving because they don't have the disposable income to save. I'd love to be able to save 15% of my take-home pay. But a decade of below-inflation pay rises and above-inflation rent and train ticket rises mean that that is quite simply impossible. I'm not suddenly going to be able to find the money just because the Government will give me a top-up.

Like with help-to-buy, in reality the help will go to the people who can already afford to save, and if they can afford to save then they don't need the help. Increasing returns on NS&I products would have been just as useful, and would have been significantly cheaper.
--- old post above --- --- new post below ---
I'd also rather they packed in subsidising the housing market, as it sustains high prices.

Which is, of course, the whole purpose of it.

It's not there to help poorer people get a step on the ladder, it's there to help the wealthy maintain their property investment value.
 
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SteveP29

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I was sure that someone on this thread, in addition to all the expected criticisms, would comment unfavourably on the idea of a "Lifetime ISA", but no-one appears to have found fault with that idea

.....or are they having a think on how to introduce some political vitriol into their posting when they eventually get round to making it appear in print...:roll:

Go on then, I’ll give you a bite….

An ‘ordinary’ young working family on typical low pay:

All earnings spent due to the cost of living.
Can’t even find pennies to put away.
Receives nothing from the lifetime ISA

A ‘privileged’ young couple with wealthy parents:

Given £4000 by rich parents to put into the new ISA.
Automatically receives £1000 from the government.

It’s as plain as that. Cuts for the poorest and ANOTHER handout to the rich, further increasing inequality
 

pemma

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I think confusion arises as to what is a Budget - traditionally, it has been a statement by the Chancellor of the Exchequer made in March each year setting out spending and taxation plans for (usually) the tax year beginning in April of the following year, though allowing for late changes to the year about to begin. Over recent years, and as a direct result of having a series of incompetent governments, the number of 'budgets' has increased to as many as four in a year, under the guise of Autumn Statements etc. So, if we take March 2015 as the previous true Budget, then John McDonnell was hardly in a position to lead Labour's response, as a mere backbencher.

I must have been thinking of the Autumn Statement and I do recall Osborne giving responses to Darling, which was possibly again in response to the Autumn Statement given someone said Cameron did all the responses when he was leader of the opposition.

Last year Osborne, of course, did a pre-election Coalition centralist budget with lots of good news for everyone, then did a post-election 'emergency' Conservative budget where he announced austerity measures and a number of policies to the right of the political spectrum.
--- old post above --- --- new post below ---
However sugar consumption only encourages obesity and of course it also rots your teeth.

I consume sugary drinks and always seem to get told by the dentist that my teeth are in excellent condition with another check up not required for 12 months, while my BMI is well below the British average but is within the healthy range. However, I generally only have sugary drinks with or after meals and usually only consume confectionery around my birthday and around Christmas.
 

Bletchleyite

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I don't consume many sugary drinks and my teeth are terrible. I think a good amount of it is hereditary (also things like acid reflux don't help, as they dissolve the enamel).
 

pemma

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So the East Coast needs to be abandoned so people can have nice water?

Tap water quality varies around the country. Soft water is usually better to drink than hard water meaning the best tap water is generally further North. However, the water from the Pennines isn't bottled water standard despite being soft but it's proven to be very good for being used in textile production. Designer Italian brands actually buy fabric produced in Huddersfield!

However, from what I heard on a consumer program on Channel 4 people in Humberside get the cheapest gas in the UK and the further you are from Humberside the more you pay so there's benefits to being in the East as well.
--- old post above --- --- new post below ---
I don't consume many sugary drinks and my teeth are terrible. I think a good amount of it is hereditary (also things like acid reflux don't help, as they dissolve the enamel).

With your teeth it also depends how frequently and how well you clean them, while some whitening treatments actually make your teeth worse in the long term.

Some healthy foods are actually not that good for your teeth, such as Apples and Oranges. I can't consume large quantities of one type of acid due to an allergy so I can probably consume more sugar than most people without getting teeth problems due to my acid consumption being lower.
 
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Groningen

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I heard that Corbyn congratulated the government on 1 certain point of the budget.
 

Darren R

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The sugar tax will cost my family a fortune as we don't drink products containing certain sweetners which are linked with cancers. Plus sugar tastes better.
But why just pop? It makes no sense to target just that one type of drink.

In that case you have until April 6th 2018 to find an alternative to your usual that is produced by a small, local company. The smallest producers will be beyond the scope of the new measures.
 

Xenophon PCDGS

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Perhaps I may have misheard some comments from the Labour Party, but I am sure that one spokesperson criticised the Conservative Party in an interview for the high level of borrowing they had undertaken, but another spokesperson in a different interview claimed that the Labour Party would borrow more than the Conservative Party.

All very confusing to a septuagenarian...:oops:
--- old post above --- --- new post below ---
In that case you have until April 6th 2018 to find an alternative to your usual that is produced by a small, local company. The smallest producers will be beyond the scope of the new measures.

Good to see my birthday featuring....I will be 73 years of age on that day.
 

Dave1987

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Perhaps I may have misheard some comments from the Labour Party, but I am sure that one spokesperson criticised the Conservative Party in an interview for the high level of borrowing they had undertaken, but another spokesperson in a different interview claimed that the Labour Party would borrow more than the Conservative Party.

All very confusing to a septuagenarian...:oops:

Yeah I noticed that, criticising the Govt for the borrowing figures, to then say that a Labour Govt would borrow and spend even more, and to then claim that Labour wanted to prove they would be fiscally responsible with the economy. McDonnell makes Ed Balls look good as a shadow chancellor and that is saying something!
 

Groningen

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So besides smoking and alcohol things you will in future also import from France things that are hit by the sugar tax.
 

yorksrob

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All of this merry-go-round of course, does nothing to solve the real problem facing the country, which is the balance of payments deficit.

It's about time someone started asking the question of where does the money from that 2% growth go.

It's about more than how many widgets we can sell to Outer Mongolia.
 

Tetchytyke

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Perhaps I may have misheard some comments from the Labour Party, but I am sure that one spokesperson criticised the Conservative Party in an interview for the high level of borrowing they had undertaken, but another spokesperson in a different interview claimed that the Labour Party would borrow more than the Conservative Party.

I think you did mishear. There has been much criticism about the national debt- which has risen from £800bn under "incompetent Gordon Brown" to £1.5tn under "prudent Gideon Osborne". A large part of the criticism is because the debt has risen not because the Government have invested wisely, but because ten years of austerity and corporate back-scratching has left tax revenues static yet Osborne has used supposed "austerity savings" to hand out freebies to his corporate paymasters and the supposed "squeezed middle".

He's taken savings from the most vulnerable in society and decided to hand out £40,000 to every 18-year-old Trustafarian in the country.

The issue is not the borrowing, it's the fact that Economics George has the square root of naff all to show for his £600bn credit card bill. At least Gordon Brown can- rightly- point out that his borrowing was equity in the banks that he bailed out.

Two interesting little facts:
Corporation tax revenue has dropped by about 20% under Economics George.
Higher-rate taxpayers, who Economics George reckons are the "squeezed middle", account for 9% of all taxpayers. They're neither squeezed nor the middle.
 
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Dave1987

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I think you did mishear. There has been much criticism about the national debt- which has risen from £800bn under "incompetent Gordon Brown" to £1.5tn under "prudent Gideon Osborne". A large part of the criticism is because the debt has risen not because the Government have invested wisely, but because ten years of austerity and corporate back-scratching has left tax revenues static yet Osborne has used supposed "austerity savings" to hand out freebies to his corporate paymasters and the supposed "squeezed middle".

He's taken savings from the most vulnerable in society and decided to hand out £40,000 to every 18-year-old Trustafarian in the country.

The issue is not the borrowing, it's the fact that Economics George has the square root of naff all to show for his £600bn credit card bill. At least Gordon Brown can- rightly- point out that his borrowing was equity in the banks that he bailed out.

Two interesting little facts:
Corporation tax revenue has dropped by about 20% under Economics George.
Higher-rate taxpayers, who Economics George reckons are the "squeezed middle", account for 9% of all taxpayers. They're neither squeezed nor the middle.

Sorry but I can't let that stand. Gordon Brown spent like crazy during the boom years of the mid 2000's so when the crash did happen Govt spending was so high a massive deficit soon racked up. You can't borrow borrow borrow on the never never pumping more and more money into the economy without looking at cutting spending otherwise you end up exactly where Greece are. Would Gordon Brown have tackled the welfare budget in 2010 and got thousands back to work? Probably not. McDonnell just says that he wants to pump more and more money into the economy but won't say ANY spending cuts he will make even though he is trying to claim economic competence.

Ow and not all people who try and save money are "trustfarians" thanks. A lot of people on moderate incomes are responsible with their money and try and save and don't blow it all every month. They will be given a nice boost for being sensible with their money and not relying on state handouts all their lives.
 

pemma

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Gordon Brown spent like crazy during the boom years of the mid 2000's so when the crash did happen Govt spending was so high a massive deficit soon racked up.

Gordon Brown did deliver a budget surplus for four consecutive years, the only time that has happened in most of our lifetimes. Major did manage to deliver a surplus as Chancellor but when he became PM Norman Lamont managed to create a deficit almost as large as the 2008 one when you take in to account inflation. Fortunately Major removed Lamont from his position and things started improving under Ken Clarke, with Brown building on those improvements.
 

Tetchytyke

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Sorry but I can't let that stand. Gordon Brown spent like crazy during the boom years of the mid 2000's so when the crash did happen Govt spending was so high a massive deficit soon racked up.

Gibberish. In the period 1997-2002 the Labour government were running a budget surplus of about 2% GDP on average. There have been a total of eight years since 1960 where a budget surplus was achieved, and Gordon Brown was responsible for four of those.

In the period 2002-2008 the budget deficit was averaging about 3% of GDP.

By contrast, the smallest budget deficit managed by Economics George was in 2015, where it was 4.8% of GDP.

http://www.tradingeconomics.com/united-kingdom/government-budget

A lot of people on moderate incomes are responsible with their money and try and save and don't blow it all every month. They will be given a nice boost for being sensible with their money and not relying on state handouts all their lives.

There is no restriction on the Lifetime ISA, therefore anyone can get the handout. People with higher incomes are able to save more than people with lower incomes, therefore the benefit of the scheme will primarily go to people who already have significant wealth behind them.

How "sensible" someone is doesn't come into it, except where people are trying to morally justify why they should get a state handout when other people (like, ooh, disabled people) should not.

I asked you on the Lifetime ISA thread, and I'll also ask you here: why, if you're so against "government spending" and "state handouts", are you so supportive of 18 year olds being given a forty grand cheque from HM Treasury?
 
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JamesT

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Gibberish. In the period 1997-2002 the Labour government were running a budget surplus of about 2% GDP on average. There have been a total of eight years since 1960 where a budget surplus was achieved, and Gordon Brown was responsible for four of those.

In the period 2002-2008 the budget deficit was averaging about 3% of GDP.

By contrast, the smallest budget deficit managed by Economics George was in 2015, where it was 4.8% of GDP.

Gordon Brown was hardly responsible for the surplus. That first Labour term they bound themselves to Tory spending plans, in order to get the electorate to trust them with the economy.

After that period the taps were opened up and it was back to deficit. The trajectory of the deficit post-2008 is scary.

The problem with just looking at the period George has been Chancellor is there's a lag on changes taking effect. Spending commitments are made and it can take several years to unwind. People make a fuss if you try and take away something they had previously. Or you set payments at a level you think is reasonable, then find there are many more people claiming than expected. (e.g. Unemployment rising post 2008).
 

Tetchytyke

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Gordon Brown was hardly responsible for the surplus. That first Labour term they bound themselves to Tory spending plans, in order to get the electorate to trust them with the economy.

Kenneth Clarke had certainly turned the corner, and Gordon Brown kept up the good work, but he was at the wheel when his government delivered an unprecedented four consecutive years of surplus.

You can't have it both ways. He can't be "asleep at the wheel" in the bad times but not at the wheel at all in the good times.

After that period the taps were opened up and it was back to deficit.

A slight deficit, averaging about 2% of GDP.

After that period the taps were opened up and it was back to deficit. The trajectory of the deficit post-2008 is scary

And Economics George has been at the wheel for six of those eight years.

I'd also point out that the deficit looks worse as a percentage of GDP, because GDP dropped by about 5% in 2008-9. Something about a global depression.

The problem with just looking at the period George has been Chancellor is there's a lag on changes taking effect.

Haway, Economics George has now been Chancellor for six years. Trying to blame "the previous Labour government", which left in 2010, for his screwups in 2016 is, quite frankly, bull****.

It's worth bearing in mind here that when Brown left the national debt was 60% GDP, despite the fact that GDP had dropped by 5%. The national debt now, after six years of Osbornomics, is 82% GDP, despite the GDP having grown.

Osborne's greatest political triumph has been getting people to blame Labour for the fact that Osbornomics have landed us with a £600bn credit card bill and nothing to show for it.
 
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