‘Mini’ budget

[mealiejimmy]

It’s back up to $1.0784 today about where it was last Thursday, before Fridays announcement. It’s a BBC lead storm in a teacup. The pound has been sliding steadily against the dollar since Putin invaded Ukraine, the money markets knew then what the energy crisis and rising inflation would do to the pound. what we are seeing and hearing from the BBC since Friday is their usual biased and opportunistic reporting.

A couple of points:
1. The BBC does not control the exchange rate. It, along with all the other media outlets reported the fact that the pound had dropped to its lowest ever rate against the dollar. That does not make the BBC biased nor opportunistic
2. The BBC is and always has been accused of bias from all sides of the political spectrum - to me that means they are doing a reasonable job, especially if they are ****ing off people like you

Cheers

Bruce

 

[Bavarianbrit]

They have provided larger tax breaks for such purposes. You may have missed this from the lefty media’s rather infantile commentary. There have been large corporate tax reductions, increased allowances for investment, impending rule chnges to dismantle EU originated restrictions on investability and so on. These don’t exclusively target manufacturing, but there’s no point in favouring areas where we once excelled over those we currently excel in. I think there has also been quite a lot of apparent loss of manufacturing which is not real, but a result of reclassifying activities and breaking up the large inefficient companies. There has also been a significant amount of “onshoring“ of the supply chain and component manufacturers since Brexit and covid.
It is now abundantly clear that we need to have manufacturing and industrial capacity which has been wound down too much. Notably we need to undo regulations which have driven much of the chemical industry out of the country. It is a disgrace that we don’t have enough domestic ammonia capacity to provide for either our fertiliser or explosive needs. The difficulty and expense of getting civilian ammunition and powder is only the tip of the iceberg. There are so many other failures to ensure supply of raw materials.
There is also the issue of whether, beyond an obvious failure to provide protection for strategically important industry, it is even wise to run an industrial policy directed towards manufacturing or any other sector. Government and the Civil Service are not competent to determine that, best thing is for them to get out of the way as much as is prudent.

My grandfather was based in Ardrosseen during the 1914-18 war as a foreman in an explosives factory which through some illness or other killed him acc my gran in 1919. As far as I can glean there were 10K workers there. All on slave wages no doubt.

 

[mealiejimmy]

Not Ardrosseen, but Ardrossan
ICI had an explosives factory at Ardeer near there for many years and while it was open, it manufactured Nobel powder which was used (amongst many other things) for reloading

Secret Scotland - ICI Ardeer

Cheers

Bruce

 

[Rasputin]

The IFS and Resolution Foundation say you're wrong. Read the graph.
Anything you'd like to say to refute these figures?

Half of Kwarteng’s cuts to personal tax will go to richest 5%, say experts

Thinktank says someone earning £1m will gain £40,000 as top rate, basic rate and national insurance reduced

www.theguardian.com

At the risk of being pedantic higher earners spending is one of many variables that keep the less well paid in employment. Low paid jobs don’t have the same capital to expend on purchases/services so it doesn’t work in the reverse. It’s not like the UK has a saving mentality like the japs have it’s money in money out for the most part.

Still the treasury is nothing but a licensed thievery corporation as far as I am concerned robbing all people left right and centre and delivering really poor value for money public services.

 

[norcan]

2. The BBC is and always has been accused of bias from all sides of the political spectrum

Funny, I don’t recall the establishment ever having a problem with its official mouthpiece.

 

[Mungo]

Yes, this is probably the biggest factor, but the fact of the matter is that large numbers of people have to live in places where houses are expensive. To penalise those people further is stupid.

Yes, although there are points that follow on from this to consider. On any reasonable basis, private healthcare is not an extravagance when state healthcare is in a state of failure. Yes, it’s an advantage, but it’s not either wrong or excessive to do what you can with your family’s healthcare or education. To the extent that private education confers an unfair advantage, that must mean that its outcomes are better than state education (whether that is true any more is very debatable) and therefore that the stock of the nation’s labour force is more highly-skilled than it otherwise would be. Penalising that is crazy as well as counterproductive.

It depends if you’re working 40 hours a week with no real pressure, or 100 hours a week with everything at stake. If it’s the former, one wonders whether the Scots, indefensibly chippy already, are really ready for 50 million English campers every summer. There’s nothing wrong with a two week holiday in France.

Unless you’re taking a silly attitude to this, it doesn’t really matter. The key thing I suppose is that someone needs to be able to buy the two or three million new cars the nation needs each year. I think anything short of e.g. Bentleys, Ferraris, helicopters is reasonable.

Grouse shooting might be a bit much, but the plebs’ sport ought to provide a guide as to the absolute minimum you couldn’t defend penalising. A football season ticket is around £800 per head. Family of four: £5500 of salary before tax. That’s one (“working class”) activity.

As I asked…what’s yours? My definition was certainly subjective, but not dangerously so. I really don’t think that it included anything remotely unreasonable.

Sorry - you did ask. I missed that bit.

I’m actually not really sure, and it’s clearly not as easy to define as many would like it to be. I think we can agree it is quite context dependent.

You could take a completely statistical approach, and simply state that some quantile of income represented 'rich'. I'm tempted by this because it's unambiguous. So I would be comfortable with saying that anyone in the top 25% of income was 'rich'.

Now this might mean that someone classed as 'rich' by this definition could only afford a 1 bed flat in London. But they then own an asset that is objectively valuable, and can be sold easily, usually at some profit.

I am open to other suggestions.

 

[Apthorpe]

Sorry - you did ask. I missed that bit.

I’m actually not really sure, and it’s clearly not as easy to define as many would like it to be. I think we can agree it is quite context dependent.

You could take a completely statistical approach, and simply state that some quantile of income represented 'rich'. I'm tempted by this because it's unambiguous. So I would be comfortable with saying that anyone in the top 25% of income was 'rich'.

OK. I looked up what that means. The thing is that you just defined people earning anything above £39,300 before tax in 2019-20 as being rich. Are you really comfortable saying that a top end police constable, or lower end police sergeant is a rich man? I really can’t say I think that is anywhere near reasonable. Shall we say the top 5% of people? Hm, that catches relatively low earning GPs, significant numbers of teachers; it’s maybe 30% more than a train driver. Even they don’t seem like a level who ought to be paying tax at a far higher rate than everyone else.

Now this might mean that someone classed as 'rich' by this definition could only afford a 1 bed flat in London. But they then own an asset that is objectively valuable, and can be sold easily, usually at some profit.

Someone rich at that definition can’t afford a subsidised shoebox, let alone any accommodation for a family. This is exactly the problem. Those of a socialist tendency are so fixated on the idea that there is a huge pool of rich people exploiting them and who have grossly excessive wealth which they can tax. When it comes down to it, that is a complete lie, and they just want to impose hardship on other normal people which makes it extremely difficult for them to get by despite doing them usually doing far more work than the average person.

I am open to other suggestions.

 

[enfieldspares]

Not Ardrosseen, but Ardrossan
ICI had an explosives factory at Ardeer near there for many years and while it was open, it manufactured Nobel powder which was used (amongst many other things) for reloading

Secret Scotland - ICI Ardeer

Cheers

Bruce

Blame the idiot Sir John Harvey Jones for a lot of the closures of Nobel (as was), Kynoch (as was) and etc.. Another who knew the cost of everything and the value of nothing. The man who famously predicted in 1990 the demise of Morgan Cars.

 

[Bavarianbrit]

Not Ardrosseen, but Ardrossan
ICI had an explosives factory at Ardeer near there for many years and while it was open, it manufactured Nobel powder which was used (amongst many other things) for reloading

Secret Scotland - ICI Ardeer

Cheers

Bruce

Aha, my mother was born in that town in 1913.

 

[Mungo]

OK. I looked up what that means. The thing is that you just defined people earning anything above £39,300 before tax in 2019-20 as being rich. Are you really comfortable saying that a top end police constable, or lower end police sergeant is a rich man? I really can’t say I think that is anywhere near reasonable. Shall we say the top 5% of people? Hm, that catches relatively low earning GPs, significant numbers of teachers; it’s maybe 30% more than a train driver. Even they don’t seem like a level who ought to be paying tax at a far higher rate than everyone else.

Someone rich at that definition can’t afford a subsidised shoebox, let alone any accommodation for a family. This is exactly the problem. Those of a socialist tendency are so fixated on the idea that there is a huge pool of rich people exploiting them and who have grossly excessive wealth which they can tax. When it comes down to it, that is a complete lie, and they just want to impose hardship on other normal people which makes it extremely difficult for them to get by despite doing them usually doing far more work than the average person.

Very good points.

I suppose one of the many problems here is that calling the top 25% rich and taxing them heavily makes sense if public services are good enough that there is no need to find ways to pay for them privately. But since this not the case, and since the housing market is so horrifically distorted in a lot of ways, I have to agree that top 25% is not a good cutoff.

Top 5% - hmm. I know plenty of GPs. I would definitely call them rich!

 

[Alantoo]

Is there any particular reason that the increase in energy / living cost could not have been countered by raising the threshold for income tax and which would have meant that every taxpayer benefitted by the same amount from a taxpayer funded intervention?

Giving taxpayer’s money to the energy companies who are already benefitting from the increased global energy price with no increase in their production cost; and reducing tax for the highest earners seems slightly at odds to the earlier Conservative mantra where it was felt that local services should be paid for by a flat rate fee however much you earned or cost the system?

Alan

 

[Apthorpe]

Very good points.

I suppose one of the many problems here is that calling the top 25% rich and taxing them heavily makes sense if public services are good enough that there is no need to find ways to pay for them privately. But since this not the case, and since the housing market is so horrifically distorted in a lot of ways, I have to agree that top 25% is not a good cutoff.

Top 5% - hmm. I know plenty of GPs. I would definitely call them rich!

Seriously? Even in Edinburgh, that’s saying that the sort of person who can afford to live in a 3 bedroom suburban, semi-detached bungalow is rich. You can’t run a sensible society if you’re going to hammer people who have a lower standard of accommodation than a shipyard worker 100 years ago. That is currently the case.

As a side note, however stupid one Might think Truss/Kwarteng’s budget is, that is completely overshadowed by the torrent of sheer lunacy Starmer has just emitted.

 

[Utectok]

People who suggest that my £580k salary makes me a wealthy man simply aren't taking into account the costs associated with sending my four sons to Eton, maintaining a fleet of luxury SUVs, and living in a flying castle.

Besides which, the £25000 tax cut doesn’t even cover an extra nanny.

I was once told by a wealthy man “well sonny it is pretty hard when you earn as much as me, most people don’t understand” ffs I’d like to try I said. It makes me realise how out of touch some people are when they can’t manage on £150k a year poor bastards have no idea how normal people live!!

 

[Apthorpe]

I was once told by a wealthy man “well sonny it is pretty hard when you earn as much as me, most people don’t understand” ffs I’d like to try I said. It makes me realise how out of touch some people are when they can’t manage on £150k a year poor bastards have no idea how normal people live!!

And this makes me realise how wildly out of touch some other people are. Living in SW Scotland leaves anyone very far out of touch with the reality of life for everyone else.
If you were paid £150k, you’d find it disappeared pretty fast in much of the rest of the country. £60k gone in tax to start with (including the tax cut for the rich bastard). If he had somehow saved up two whole years’ income, he could afford to buy an ex-council terraced house somewhere like Tooting or East Ham. He would need to spend half his remaining income on mortgage payments. Half of the remainder on stamp duty. He would now have about £19k to support, feed and transport his family, and pay the bills. It’s not a lot of money.

 

[Utectok]

And this makes me realise how wildly out of touch some other people are. Living in SW Scotland leaves anyone very far out of touch with the reality of life for everyone else.
If you were paid £150k, you’d find it disappeared pretty fast in much of the rest of the country. £60k gone in tax to start with (including the tax cut for the rich bastard). If he had somehow saved up two whole years’ income, he could afford to buy an ex-council terraced house somewhere like Tooting or East Ham. He would need to spend half his remaining income on mortgage payments. Half of the remainder on stamp duty. He would now have about £19k to support, feed and transport his family, and pay the bills. It’s not a lot of money.

My daughter and son in law live in central london and seem to live contented and busy lives, she as a medical researcher and he as an architect and there combined income is a lot less than 150k they might not own a house but that’s not a requirement of life.
“The rich man is simply the one who earns more than he spends”…..

 

[VSS]

It's all relative.
From where I'm standing, anyone who earns over 25k seems pretty wealthy.
Anyone earning 25k might consider someone who earns over 50k as being pretty wealthy.
Anyone earning 50k might consider someone who earns over 75k as being pretty wealthy.
And so on, all the way up the scale.

But the range is so huge that the people at one end have absolutely no comprehension of what life is like for those at the other, and the variation between regions is huge too. And it's all compounded by the fact that someone who outwardly appears wealthy may have huge borrowings, whereas someone who's cash poor may be asset rich and debt free.

There is no simple answer to defining what constitutes being "rich".

Strangely enough, I consider myself to be one of the richest people I know.

 

[Utectok]

It's all relative.
From where I'm standing, anyone who earns over 25k seems pretty wealthy.
Anyone earning 25k might consider someone who earns over 50k as being pretty wealthy.
Anyone earning 50k might consider someone who earns over 75k as being pretty wealthy.
And so on, all the way up the scale.

But the range is so huge that the people at one end have absolutely no comprehension of what life is like for those at the other, and the variation between regions is huge too. And it's all compounded by the fact that someone who outwardly appears wealthy may have huge borrowings, whereas someone who's cash poor may be asset rich and debt free.

There is no simple answer to defining what constitutes being "rich".

Strangely enough, I consider myself to be one of the richest people I know.

Spot on… a long time ago I traded earning potential for free time and I’ve never looked back….

 

[Apthorpe]

My daughter and son in law live in central london and seem to live contented and busy lives, she as a medical researcher and he as an architect and there combined income is a lot less than 150k they might not own a house but that’s not a requirement of life.

Indeed, but nor is it an indication of being so wealthy as to be absurdly out of touch if you can barely afford to support a family in a poky ex-council house in a crime-ridden suburb. £150k does not equate to being overprivileged. It is roughly equivalent to an income of £35000 in D&G, but in a much more unpleasant environment.

 

[Utectok]

Indeed, but nor is it an indication of being so wealthy as to be absurdly out of touch if you can barely afford to support a family in a poky ex-council house in a crime-ridden suburb. £150k does not equate to being overprivileged. It is roughly equivalent to an income of £35000 in D&G, but in a much more unpleasant environment.

‘Move?’

 

[Mungo]

Seriously? Even in Edinburgh, that’s saying that the sort of person who can afford to live in a 3 bedroom suburban, semi-detached bungalow is rich.

You're describing me. And yes, I have come to realise that I am rich. Very, very rich, compared to the families in my son's school. I would be very happy to pay substantially more tax, if it meant that public education improved to the extent that I didn't have to figure out how to either buy a house in a better catchment or pay for private school. We really shouldn't be in a position where we have to do this.

You can’t run a sensible society if you’re going to hammer people who have a lower standard of accommodation than a shipyard worker 100 years ago.

Really? A shipyard worker in 1923 could afford a 3 bed semi in Edinburgh? I would very much like to see evidence of this.