Autumn Statement

[The People's Hero]

Nice one George, you odious, nasty little beautiful genius.

[Alf Bentley]

I like it:

 

Stamp duty reformed overnight, average property of £275k will cost you £4k less in stamp duty.

Houses over £950k ish will pay more.  Paid for by reducing tax relief on brought forward losses for major banks - this is a big deal.

 

Tax free threshold goes up, and so does the higher rate - first time in 5 years.  Still way too low a level for people to be paying 40% tax but a move in the right direction.

 

25% tax on offshore profits earned in the UK - will be interesting to see how this is implemented - it will be difficult.

 

Air passenger Duty for under 12 removed, under 16s to come soon.

 

A few other I missed I expect.

 

Nice one George!

 

Haven't had the chance to look at this in detail, but seems to have involved small but popular giveaways, designed to benefit quite a lot of people in a small way without adding large sums to the deficit (an election giveaway-lite!).

However, the Institute for Fiscal Studies (IFS) points out that the funding of the stamp duty reform will add to the deficit in the medium-term: 

http://www.telegraph.co.uk/finance/autumn-statement/11274360/Autumn-Statement-George-Osborne-accused-of-creating-black-hole.html

 

The "Google tax" on offshore profits is a good and long overdue policy, in theory, but like you I wonder how workable it is likely to be. It might turn out to be no more than a political gesture ("look, I'm trying to address the corporate tax avoidance issue") to counteract justified criticism, while not achieving much. I hope that I'm wrong about that, but experts are already questioning its viability:

 http://www.independent.co.uk/news/business/news/autumn-statement-google-tax-on-profits-going-offshore-may-prove-unworkable-9900673.html

 

As for "what's not to like?", eye-watering public spending cuts and their impact on society and economy is the answer. The IFS is among those pointing out that balancing the books within Osborne's timescale will require spending cuts taking us back to the 1930s in terms of public spending as a percentage of GDP. Now, there's a bit of rhetoric in there, as GDP now is a lot higher than in the 1930s, so actual living standards wouldn't be returning to pre-welfare state/NHS levels....but the cuts would have to be 1.5 times the cuts made in 2010-15 with (a) the easiest cuts already made; and (b) NHS, schools and aid spending protected. That would require massive cuts to major items like pensions, defence, tax credits, benefits, local government, universities, research etc. Many on here will thoroughly approve of such a shrinking of the state, I know, but it would be a massive change....and one that could jeopardise the improvement in economic growth and unemployment by cutting hundreds of thousands of public sector jobs and hitting the demand generated by household spending and government spending/contracts.

 

Here's the excellent Larry Elliott (one of the few reasons to look at the Guardian these days): http://www.theguardian.com/uk-news/2014/dec/03/osborne-plans-public-spending-shrink-1930s

 

Here's a couple of articles re. the IFS' comments on the proposed cuts:

http://www.telegraph.co.uk/finance/autumn-statement/11272993/Britain-faces-years-of-gruesome-spending-cuts-Institute-for-Fiscal-Studies-warns.html

http://www.theguardian.com/politics/2014/dec/04/george-osborne-spending-cuts-change-state-beyond-recognition-ifs

 

Now, we're in for cuts and a grim time whoever wins the 2015 election. Labour would probably not seek to balance the books as early as 2020, but it would still have to reduce the deficit - and some of that would involve cuts. Some might involve more tax, targeted on those who can afford it most, but the finances will remain tough whoever is in office. We need some demand, though! Where is the demand going to come from if household spending is squeezed by low real incomes, export markets are tough due to stagnation in the EU and elsewhere, and the state is recycling a lot less money via public spending and the procurement of private firms for public projects? For now, Osborne seems to be banking on keeping the housing market bubbling along via his stamp duty cuts, but that's no long-term solution....and is bloody ironic given the role that housing markets played in the original 2008 crash! 

[Dr The Singh]

Tory's missed a trick, there's a massive loop hole in the 'Fvck off and die' scenario, why the fook are we not taxing this!!

[Tommy G]

My Dad works for LCC and is getting a 2.2% payrise this year. He's desperate to be made redundant as it financially makes sense for him as hes 55 and near retirement age, been paying into the pension for 39 years.

 

They refuse to make him redundant and give him a payrise! Don't read too much into the ''hard hitting cuts'' plenty more can be done

[Alf Bentley]

Tory's missed a trick, there's a massive loop hole in the 'Fvck off and die' scenario, why the fook are we not taxing this!!

 

They'll be saying "fvck off and die" to a hell of a lot of people if they win in 2015, Doctor, they're just diplomatic enough not to do it before the election!

 

I like the concept of a "Pearson tax", though. Wasilewski already extracts his pound of flesh every match - quite literally.

[Dr The Singh]

They'll be saying "fvck off and die" to a hell of a lot of people if they win in 2015, Doctor, they're just diplomatic enough not to do it before the election!

 

I like the concept of a "Pearson tax", though. Wasilewski already extracts his pound of flesh every match - quite literally.

I agree, i'm one of them that will be screwed by tory's but then again, being middle class, I get screwed by every party.

 

I thought the Pearson tax would be used as a measure of how many times his daughters been shagged!!

[Alf Bentley]

I agree, i'm one of them that will be screwed by tory's but then again, being middle class, I get screwed by every party.

 

I thought the Pearson tax would be used as a measure of how many times his daughters been shagged!!

 

Very disappointed to hear that you're only middle class, Doctor.

 

I always assumed that you were part of an aristocratic military elite sent from the Punjab to set up Leicester Fosse!

[Dr The Singh]

Very disappointed to hear that you're only middle class, Doctor.

 

I always assumed that you were part of an aristocratic military elite sent from the Punjab to set up Leicester Fosse!

I was, the constant addiction to alcohol, crap football and expensive women has taken me from maharaja Singh to mere chai wala!!!

[E-PASS]

I got my tax letter from HMRC through a few days ago. It said that 1/4 of my tax money is being spent on 'welfare', which does not include pensions for old people. So 1/4 of taxpayers money is being used to fund the lifestyles of the lazy people who can't be bothered to work, or don't know how to use contraception. It really is disgraceful, and then people have the cheek to have a go at people who base their tax affairs off shore so that they don't have to pay for these people to watch sky, drink beer, gamble and reproduce all at their expense.

 

Nothing in the budget from Osbourne seems to rectify this.

[Guest Kopfkino]

I got my tax letter from HMRC through a few days ago. It said that 1/4 of my tax money is being spent on 'welfare', which does not include pensions for old people. So 1/4 of taxpayers money is being used to fund the lifestyles of the lazy people who can't be bothered to work, or don't know how to use contraception. It really is disgraceful, and then people have the cheek to have a go at people who base their tax affairs off shore so that they don't have to pay for these people to watch sky, drink beer, gamble and reproduce all at their expense.

 

Nothing in the budget from Osbourne seems to rectify this.

Well no because welfare spending isn't just for 'lazy people who can't be bothered to get a job' or 'people that don't know how to use contraception'

Oh and it wasn't a budget on Wednesday either

[Guest MattP]

I'm as keen as the next man to stick the boot into the Tories as I still remain more liberal / left minded but criticising the governments record on the economy is becoming more and more of an untenable position.

 

All of these measures make good sense. Maybe they have one eye on the election but this sort of approach has been going on for quite some time.

 

My biggest worry is that a long term Tory government could go some way to creating an intolerant and selfish society but for now give them their due, I'd be a damn sight more worried if any of the other parties were in control of our economy.

 

Blimey. They must be doing something right if even you're getting on board with the Oz.

 

That said, I knew it was a decent day for the Tories when the Daily Mirror didn't mention it on their front page the next day.

[Alf Bentley]

I got my tax letter from HMRC through a few days ago. It said that 1/4 of my tax money is being spent on 'welfare', which does not include pensions for old people. So 1/4 of taxpayers money is being used to fund the lifestyles of the lazy people who can't be bothered to work, or don't know how to use contraception. It really is disgraceful, and then people have the cheek to have a go at people who base their tax affairs off shore so that they don't have to pay for these people to watch sky, drink beer, gamble and reproduce all at their expense.

 

Nothing in the budget from Osbourne seems to rectify this.

 

Maybe you could quote some figures from that tax letter, E-Pass: e.g. what proportion goes on pensions, as pensions are always one of the largest items of expenditure and are usually included in the welfare figure.

 

From a quick Google search, I found this excellent graphic with figures for 2011-12 (which will only have changed slightly in the last 2 years):

http://www.theguardian.com/news/datablog/interactive/2012/dec/04/public-spending-uk-2011-12-interactive

 

You can click on each item for an individual breakdown:

 

So, for 2011-12, the figures were:

- Total Spending £694.9bn, including....

- Work & Pensions £167bn (24% - your 1/4, I suspect), of which....

      - Benefits (inc. Pensions) £159bn, including....

               - Pensions £74.2bn

               - Benefits other than pensions £84.8bn, including

                          - Housing Benefit £16.9bn

                          - Disability Living Allowance £12.6bn

                          - Jobseekers' Allowance £4.9bn

 

So, Benefits INCLUDING pensions = 24%; Benefits NOT INCLUDING pensions = 12.2%

 

Of those benefits:

- Jobseekers' Allowance accounts for 0.7% of total spending, most of whom will be genuinely unemployed and looking for work

- Some will be claiming Income Support and/or Housing Benefit (1% & 2.4% of total spending, respectively), but many of them are people in work on low pay

- Some will be claiming Disability Living Allowance and/or Incapacity Benefit (1.8% & 0.7%, respectively) but many of them are, er, disabled or incapacitated (the assessments are notoriously tough)

 

You clearly approve of tax evasion and feel that everyone claiming benefits (including pensions, it seems) is a scrounger.

But which money should we hand over to the tax evaders first: the 12% given to pensioners, the 3.4% given to the working poor (among others), the 2.5% given to the disabled/incapacitated or the 0.7% given to people on Jobseekers?  :xmaswink:

 

Or do you have some proper figures to quote to justify your contempt for all these people?

[Guest Kopfkino]

Maybe you could quote some figures from that tax letter, E-Pass: e.g. what proportion goes on pensions, as pensions are always one of the largest items of expenditure and are usually included in the welfare figure.

 

From a quick Google search, I found this excellent graphic with figures for 2011-12 (which will only have changed slightly in the last 2 years):

http://www.theguardian.com/news/datablog/interactive/2012/dec/04/public-spending-uk-2011-12-interactive

 

You can click on each item for an individual breakdown:

 

So, for 2011-12, the figures were:

- Total Spending £694.9bn, including....

- Work & Pensions £167bn (24% - your 1/4, I suspect), of which....

      - Benefits (inc. Pensions) £159bn, including....

               - Pensions £74.2bn

               - Benefits other than pensions £84.8bn, including

                          - Housing Benefit £16.9bn

                          - Disability Living Allowance £12.6bn

                          - Jobseekers' Allowance £4.9bn

 

So, Benefits INCLUDING pensions = 24%; Benefits NOT INCLUDING pensions = 12.2%

 

Of those benefits:

- Jobseekers' Allowance accounts for 0.7% of total spending, most of whom will be genuinely unemployed and looking for work

- Some will be claiming Income Support and/or Housing Benefit (1% & 2.4% of total spending, respectively), but many of them are people in work on low pay

- Some will be claiming Disability Living Allowance and/or Incapacity Benefit (1.8% & 0.7%, respectively) but many of them are, er, disabled or incapacitated (the assessments are notoriously tough)

 

You clearly approve of tax evasion and feel that everyone claiming benefits (including pensions, it seems) is a scrounger.

But which money should we hand over to the tax evaders first: the 12% given to pensioners, the 3.4% given to the working poor (among others), the 2.5% given to the disabled/incapacitated or the 0.7% given to people on Jobseekers?  :xmaswink:

 

Or do you have some proper figures to quote to justify your contempt for all these people?

http://www.ifs.org.uk/publications/7424

[Webbo]

Maybe you could quote some figures from that tax letter, E-Pass: e.g. what proportion goes on pensions, as pensions are always one of the largest items of expenditure and are usually included in the welfare figure.

 

From a quick Google search, I found this excellent graphic with figures for 2011-12 (which will only have changed slightly in the last 2 years):

http://www.theguardian.com/news/datablog/interactive/2012/dec/04/public-spending-uk-2011-12-interactive

 

You can click on each item for an individual breakdown:

 

So, for 2011-12, the figures were:

- Total Spending £694.9bn, including....

- Work & Pensions £167bn (24% - your 1/4, I suspect), of which....

      - Benefits (inc. Pensions) £159bn, including....

               - Pensions £74.2bn

               - Benefits other than pensions £84.8bn, including

                          - Housing Benefit £16.9bn

                          - Disability Living Allowance £12.6bn

                          - Jobseekers' Allowance £4.9bn

 

So, Benefits INCLUDING pensions = 24%; Benefits NOT INCLUDING pensions = 12.2%

 

The figure of 12% is irrelevant, £84billion is approximately the annual deficit, if you halve that you halve the deficit. 

[Alf Bentley]

http://www.ifs.org.uk/publications/7424

 

Thanks for that. That explains where E-Pass got his figure from.... Very similar figures to mine, except that they include social services provided for children and the elderly, plus a few other items, and account for pensions separately.

 

The IFS figure is 14% on benefits for people of working age.

 

Alternatively, their Table 2 is good (includes pensions, but excludes social services etc.):

Welfare spending as % of total spending:

- Benefits for elderly 14%

- Benefits for unemployed and low incomes 6%

- Benefits for families with children 5%

- Benefits for sick & disabled 5% 

 

 

The figure of 12% is irrelevant, £84billion is approximately the annual deficit, if you halve that you halve the deficit. 

 

I'm sure some savings would be possible, but even if you weed out the minority of piss-takers, halving the money given to the elderly, unemployed, families with children and sick/disabled will cause massive social problems.

From the IFS reports, it does sound very much as if Georgie Boy plans to do something like that, though. A very good reason for throwing the fvckers out of office in May!  :xmaswink:

 

You make the very Tory assumptions, too, that (a) the deficit needs to be eliminated almost completely and very quickly; and (b) cutting spending is the main way to do that.

You're entitled to your opinion, obviously, but that's very much a political preference. Another option is to reduce the deficit more slowly, and to do so partly by selectively raising taxes on those who can afford them and partly by stimulating growth / demand so as to boost tax revenues medium-term.

[Webbo]

Thanks for that. That explains where E-Pass got his figure from.... Very similar figures to mine, except that they include social services provided for children and the elderly, plus a few other items, and account for pensions separately.

 

The IFS figure is 14% on benefits for people of working age.

 

Alternatively, their Table 2 is good (includes pensions, but excludes social services etc.):

Welfare spending as % of total spending:

- Benefits for elderly 14%

- Benefits for unemployed and low incomes 6%

- Benefits for families with children 5%

- Benefits for sick & disabled 5% 

 

 

 

I'm sure some savings would be possible, but even if you weed out the minority of piss-takers, halving the money given to the elderly, unemployed, families with children and sick/disabled will cause massive social problems.

From the IFS reports, it does sound very much as if Georgie Boy plans to do something like that, though. A very good reason for throwing the fvckers out of office in May!  :xmaswink:

 

You make the very Tory assumptions, too, that (a) the deficit needs to be eliminated almost completely and very quickly; and (b) cutting spending is the main way to do that.

You're entitled to your opinion, obviously, but that's very much a political preference. Another option is to reduce the deficit more slowly, and to do so partly by selectively raising taxes on those who can afford them and partly by stimulating growth / demand so as to boost tax revenues medium-term.

Labour are complaining that Osbourne hasn't reduced the deficit as quickly as he said he would, you can't have it both ways.

[MooseBreath]

Labour were adamant that you can't cut spending and achieve growth. We have cut spending and we are the fastest growing economy in the developed world. That's not just being wrong, that's a fundamental misunderstanding of how economies work. Anyone who still has any faith in anything labour say regarding the economy is doing so completely blind.

[Alf Bentley]

Labour are complaining that Osbourne hasn't reduced the deficit as quickly as he said he would, you can't have it both ways.

 

I don't represent the Labour Party and don't even intend to vote for them.

 

However, it's a perfectly valid stance to say that the deficit could have been reduced more quickly over 4.5 years by stimulating demand (adding to the deficit in the short-term) so as to boost growth and employment, thereby cutting spending on benefits and increasing tax revenues, so as to cut the deficit more in the medium-term. You won't agree with it, because you're a Tory, but it's pretty classic Keynesian economics. That's not inconsistent at all with saying that, from where we are now, having chosen instead to make massive spending cuts, we'd be better advised to slow cuts down, increase tax selectively, invest to stimulate demand and accept that it might (or might not) take a bit longer to get anywhere near a balanced budget (which has barely been achieved by any govt for 35+ years, anyway). Some mixture of policies like this is what any future government will probably do anyway.....it's just that Labour would spend and tax the rich a bit more, while the Tories would cut and attack the poor a bit more.

 

So, yes, I can have it both ways! :xmaswink:  

[Webbo]

Labour increased spending and borrowing during a boom and then claim to be Keynesian, that's definitely having it both ways. James Callaghan admitted in the late 70s that spending your way out of a recession doesn't work anyway.

 

As for attacking the rich it hasn't been a great success in France.

[Alf Bentley]

Labour increased spending and borrowing during a boom and then claim to be Keynesian, that's definitely having it both ways. James Callaghan admitted in the late 70s that spending your way out of a recession doesn't work anyway.

 

As for attacking the rich it hasn't been a great success in France.

 

I agree with your criticism of Labour running a deficit during a boom (c. 2001-07) and have made that criticism myself. They would say that the spending was needed because of years of under-investment by the Tories, which is fair comment, but they should have funded that spending by increasing tax, not borrowing...and that's without starting on all the off-balance sheet spending on PFI hospitals and the like (though the Tories are guilty of that, too).

 

I ought to be better informed about what's happening in France, but am under-informed. There's certainly a lot of wasteful public spending in France, though. I spent 6 months living/working there during my "year abroad" and had to go to a police station for a formal residency permit.....I had to complete an application form to apply for a form to apply for residency (true story)!   :xmaslaugh:

 

Spending on the wrong things or at the wrong time can be very damaging, as can cutting the wrong things or at the wrong time. So, both high-spending and low-spending economies can be successful or unsuccessful.

 

Here's some food for thought: http://en.wikipedia.org/wiki/Nordic_model

[E-PASS]

 

That is over a third of tax income going out of the governments coffers in the form of handouts.

[E-PASS]

And this is what it is spent on:

http://www.mirror.co.uk/news/uk-news/worlds-fattest-man-keith-martin-4751943#rlabs=2 

[Guest Kopfkino]

I don't represent the Labour Party and don't even intend to vote for them.

 

However, it's a perfectly valid stance to say that the deficit could have been reduced more quickly over 4.5 years by stimulating demand (adding to the deficit in the short-term) so as to boost growth and employment, thereby cutting spending on benefits and increasing tax revenues, so as to cut the deficit more in the medium-term. You won't agree with it, because you're a Tory, but it's pretty classic Keynesian economics. That's not inconsistent at all with saying that, from where we are now, having chosen instead to make massive spending cuts, we'd be better advised to slow cuts down, increase tax selectively, invest to stimulate demand and accept that it might (or might not) take a bit longer to get anywhere near a balanced budget (which has barely been achieved by any govt for 35+ years, anyway). Some mixture of policies like this is what any future government will probably do anyway.....it's just that Labour would spend and tax the rich a bit more, while the Tories would cut and attack the poor a bit more.

 

So, yes, I can have it both ways! :xmaswink:  

 

Keynesian economics and the idea of the government stimulating demand may have worked at times in the past when economies were more closed than they are now but with economies being so open and integrated these days, it would simply be irresponsible. I'd like to know what you feel they should have increased spending on?

 

The government has been unfortunate with how useless the eurozone recovery has been, which led to slower growth to begin with. They wouldn't have balanced the books by the end of this parliament anyway but they would have been much closer had other places come close to matching our growth. People should also be careful when boasting about how well we are doing, the recovery is too fragile and too reliant on spending by consumers here. Consumer confidence is brittle and is starting to fall again so it's far from rosy. Plus I remember hearing that only Spain has a bigger defecit as a % of GDP than us which suggests the government is still supporting the economy too much

[ADK]

All this rubbish about the deficit is a red herring, the government can borrow at very low interest rates.

[Guest Kopfkino]

All this rubbish about the deficit is a red herring, the government can borrow at very low interest rates.

 

But yet we're paying £53 billion in debt interest a year