[Finance] Rachel Reeves to reveal £20bn shortfall left by Conservative Government

[Bodian]

The problem with the Conservatives is they eventually run out of other people’s money to hand over to their mates

Didnt Gordon Brown sell all the gold at rock bottom price back in the day

No, the UK still has over 310 tonnes of gold stored in the Bank of England

And more to the point - he didn't sell the gold to hand the proceeds to his mates.

 

[Super Steve Earle]

No, the UK still has over 310 tonnes of gold stored in the Bank of England

Yes but he sold 401 tonnes, 56%. That would have increased in value by more than £16bn since his sale at firesale prices.

 

[Silverhatch]

To riff on (the missed) Stat Brother, I didn't come on here for a lecture on revolution.
I have also indicated that the focus of taxation should shift, but not sure about your claim on feudalism so feel free to elaborate. To state my point, taxation went through a substantial shift about a century ago in order to pay debt on 'the Great War' and, subsequently, other state expenditures. This involved a movement towards taxing labour (and also estates), with the kind of graduations that I favour and @Harry Wilson's tackle doesn't.

Clumsy use of the word revolution. The sentiment was about changing the King John/Robin Hood narrative around taxation.

 

[Thunder Bolt]

Yes but he sold 401 tonnes, 56%. That would have increased in value by more than £16bn since his sale at firesale prices.

Hindsight is a wonderful thing. As ever, there is context to this.

Gold: Gordon Brown's sale remains controversial 20 years on

Two decades after the UK chancellor sold huge gold reserves, people still can't decide if it was a good idea.

www.bbc.co.uk

 

[The Antikythera Mechanism]

Yes but he sold 401 tonnes, 56%. That would have increased in value by more than £16bn since his sale at firesale prices.

We know who’s got it all

 

[Uh_huh_him]

Before this becomes a "fact", houses are worth 2x what they were in 1996 according to the ONS.

Nationwide UK House Prices Index Adjusted for Inflation ['Real' Prices]

Nationwide Quarterly House Prices UK index data from 1973-2021 adjusted for inflation, also known as 'real' UK house prices

www.housepricecrash.co.uk

Adjusted for inflation is pretty irrelevant though.
Particularly over the past 25 years, where salaries haven't risen with inflation.

Average house prices have increased 5 fold, but average salaries have only doubled.

 

[Guinness Boy]

I'm no fan of Liz Truss, clearly - who is? - but is the "interest rates are high because of Liz Truss" really true? Her budget was a disaster, obviously, but if I compare UK interest rates with elsewhere, many countries experienced similar rate rises at the same time. Doesn't this indicate some sort of broader global factor(s) at play?

(Again I'll reiterate I'm not defending the abysmal Liz Truss, but is she to blame for interest rates rising globally at the same time?)


View attachment 186090

A lot of analysts have argued she made it rise more than it should have - BOE predicted rate changed from 4% to 6%.

The mini budget also killed Sterling. I was in the US at the time for work. My hotel bill nearly bankrupted me. Weak sterling = high interest.

Good, balanced piece of analysis here.

How much is Liz Truss to blame for expensive mortgages and higher interest rates?

More than 104,000 people signed up for a mortgage two months following Liz Truss's premiership, likely fixing to a higher rate as a result.

news.sky.com

 

[Harry Wilson's tackle]

To riff on (the missed) Stat Brother, I didn't come on here for a lecture on revolution.
I have also indicated that the focus of taxation should shift, but not sure about your claim on feudalism so feel free to elaborate. To state my point, taxation went through a substantial shift about a century ago in order to pay debt on 'the Great War' and, subsequently, other state expenditures. This involved a movement towards taxing labour (and also estates), with the kind of graduations that I favour and @Harry Wilson's tackle doesn't.

It isn't that I don't 'like' graduation. But it is that it costs too much to administer, and can be gamed (with the range of allowances and 'offest' facilities). One argument in favour of graduated tax is that it 'lets off' the low paid via a threshold. But why not increase minimum wage, tax it, and then at a stroke remove all the wangling that goes on around the thresholds?

Earned income. Flat %. Bosh.

It would require removing wheezes like Jimmy Greaves (he started it) and Gary Lineker being employed by a private company with themselves as the sole shareholder and the main employee (with the wife as secretary, the au pair as cleaner, the spare room as an office that depreciates and requires investment that offsets tax, etc.).

It could be simplified in a similar matter to accommodate genuine businesses people.

And it could be changed so that businesses operating (delivering pizzas, providing internet services, etc.) in the UK pay UK tax. Proper tax.

And it could be strategically modified to help new industry operating in the UK.

AND it can be de-politicized by enshrining some immutable legal principles. Perhaps via creation of a UK constitution.

(Try not to soil yourself as you exhale)

Of course, other scams, sorry schemes are available

 

[Harry Wilson's tackle]

I`ve never said that. A nation with its own currency can spend as much as it likes but is limited only by the physical capacity of the economy in terms of real resources and inflation.

I was always taught that 'the economy' is not a zero sum equation. In other words with human ingenuity you can create wealth out of raw materials and ideas.

 

[Weststander]

I'm no fan of Liz Truss, clearly - who is? - but is the "interest rates are high because of Liz Truss" really true? Her budget was a disaster, obviously, but if I compare UK interest rates with elsewhere, many countries experienced similar rate rises at the same time. Doesn't this indicate some sort of broader global factor(s) at play?

(Again I'll reiterate I'm not defending the abysmal Liz Truss, but is she to blame for interest rates rising globally).

Economists called it the Idiot Premium. At its worst they estimated that the flirtation with Trussonmics had added 0.75% to UK mortgage rates. Also to the non-fixed cost pf servicing public debt.

 

[Rdodge30]

Perhaps the Government (Chancellor) will “reassess” the formula used to calculate National Debt in order to continue to borrow ….as National Debt is now less than we thought…. In order to spend without taxing- or at least only extra tax from capital gains increases. Parliamentary smoke and mirrors, twas ever thus

 

[Pavilionaire]

Absolutely look at that.

But also revolutionise taxation. Taxation hasn’t moved on since feudalism. A ‘tax’ is levied by an owner. It’s seen as a penalty. A better political and economic system must evolve so that your ability to ‘contribute’ to society’s wellbeing is seen as a positive. Until now that has been the domain of Uber-wealthy philanthropists.

Exactly. No value is attached to improvements in society through taxation. We are taught from an early age if taxes go up you are worse off, if they go down you are better off. This tenet is part of the Conservative Party's DNA. Yet Scandinavian countries have high tax, high quality services and yet their incomes are all well above the EU average with Norway in second place..

Such a balanced societal outlook makes for better decisions. When oil is discovered in the North Sea the Norwegian government nationalises the oil industry and banks the profits in a sovereign fund to provide for the Norwegian people. Whereas, here in the UK the profits are spunked away to shareholders and the ordinary person feels little benefit.

 

[dsr-burnley]

Exactly. No value is attached to improvements in society through taxation. We are taught from an early age if taxes go up you are worse off, if they go down you are better off. This tenet is part of the Conservative Party's DNA. Yet Scandinavian countries have high tax, high quality services and yet their incomes are all well above the EU average with Norway in second place..

Such a balanced societal outlook makes for better decisions. When oil is discovered in the North Sea the Norwegian government nationalises the oil industry and banks the profits in a sovereign fund to provide for the Norwegian people. Whereas, here in the UK the profits are spunked away to shareholders and the ordinary person feels little benefit.

North Sea oil is currently taxed @ 75%. The government is getting far more than the shareholders. If the government has failed to set up a sovereign wealth fund with the proceeds, that's not the shareholders' fault.

 

[seagullsovergrimsby]

Traditionally the outgoing Government's chancellor would leave a note in the Treasury saying sorry but there is nothing left in the coffers. This time they have kept quiet and covered up a £20Bn black hole in the finances. I predict council tax revaluations above band D and 100% surcharges on second homes. Capital Gains Tax will match Income Tax rates and loopholes closed. Inheritance Tax rules will be tightened on those wealthy enough to pay so they wont be allowed to salt the money into offshore trusts.

 

[Harry Wilson's tackle]

Hindsight is a wonderful thing. As ever, there is context to this.

Gold: Gordon Brown's sale remains controversial 20 years on

Two decades after the UK chancellor sold huge gold reserves, people still can't decide if it was a good idea.

www.bbc.co.uk

Yes but.....Brown was responsible for austerity....Dave and Gideon said!

(Some people just can't let go of their lovely feeling about the Tories. And whatabout Labour leading us into war with Hitler? Another mistake!)

 

[Thunder Bolt]

North Sea oil is currently taxed @ 75%. The government is getting far more than the shareholders. If the government has failed to set up a sovereign wealth fund with the proceeds, that's not the shareholders' fault.

The previous government had a lot of ‘shareholders‘ like Liz Truss who used to work for Shell. Lobbyist?

 

[Thunder Bolt]

Yes but.....Brown was responsible for austerity....Dave and Gideon said!

(Some people just can't let go of their lovely feeling about the Tories. And whatabout Labour leading us into war with Hitler? Another mistake!)

Forgetting that Belgium, Netherlands and Canada also sold some of their reserves.

 

[Harry Wilson's tackle]

Forgetting that Belgium, Netherlands and Canada also sold some of their reserves.

Typical extreme communist actions from the hard left.

Said nobody, ever.

 

[SkirlieWirlie]

I’m not wealthy, I’m just hard working and aspirational.
I wanted a better life than what was on offer at the time: Council House. I didn’t go to university, I got 4 o levels.
It was in Thatchers Britain in 80’s, growing up in Scotland where they hated her, even more than down here.
Aspiration and opportunity. That’s what I grasped from that time and that’s what I instill in my kids today.
Not big state and take from those who want do well and achieve.
If you take from achievers and wealth creators, they will leave and take their wealth and creation somewhere it is appreciated and embraced as a force for good, not as a sponge to be continually squeezed.

Interestingly I come from a very similar background to yourself.

I've often heard that we tend to be more socialist in outlook when younger and become more conservative as we age and acquire wealth.

Personally I've become the opposite. I also came from a council house background, have worked hard, done okay for myself, own my house, etc, but generally worry for the future awaiting my teenage children with the direction of travel of the country, world, environment, etc and see a need for people to pull together and be more socially minded, instead of more insular, siloed and looking out for number one and if that means contributing more then so be it.

Acquiring and consuming and wanting rather than needing is what's driving the growing levels of inequality and unhappiness in society.

I understand why some feel this way, but feel something has to change. When some hark back to 'the good old day's , I think back to simpler times, community, togetherness. Feels a world long gone.

Don't hold out much hope for a return to that type of society though sadly...

 

[A1X]

Forgetting that Belgium, Netherlands and Canada also sold some of their reserves.

Outrageous that Gordon Brown was selling other countries reserves as well, he must be stopped