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

[dsr-burnley]

I recall an argument that it would cost more to administer this change than the amount of money actually saved.

If they restrict it only to those on pension credit, then it should be as easy to administer as it is now - just add it to the pension credit rather than to the basic pension. (If they hadn't already done the means testing for pension credit, then it probably would cost more than it would save.)

 

[Uh_huh_him]

Brilliant idea
Tax them more and they take their wealth creation somewhere else.
Genius

About time this tired old argument was actually put to the test.

 

[BLOCK F]

And then you get the Chichester bypass which is appalling, especially at this time of year when people are heading to East & West Wittering.

Agreed. It is a real pain and we avoid it unless we have to go that way.
My wife took an hour and a quarter to get home from Chichester yesterday, a distance of 8 miles.

 

[The red pepper kid]

Reeves is expected to make it explicit that she believes her predecessor deliberately did not act to address the looming spending shortfall. “Jeremy Hunt is going to have a lot of explaining to do,” said one source.

Rachel Reeves expected to reveal £20bn shortfall in public finances

Chancellor may raise some taxes in the autumn due to what Labour describes as its ‘shocking inheritance’ from Tories

www.theguardian.com

what a load of rubbish, give staff a pay rise, take heat payments off the elderly , use the previous gov as a excuse to cut funding ( i thought the tories did that quite well !
Anyway welcome to labour ......................dont mention the immigrants we will now pay for

 

[Jim in the West]

what a load of rubbish, give staff a pay rise, take heat payments off the elderly , use the previous gov as a excuse to cut funding ( i thought the tories did that quite well !
Anyway welcome to labour ......................dont mention the immigrants we will now pay for

The complete and utter failure of the Tories to deal with asylum seekers will cost us £6.4bn this year alone - almost entirely the cost of housing people whose claims were deliberately not being processed.

 

[cunning fergus]

It’s 45%.

You’re referring to the anomalous top rate paid where total taxable income is £101,000 to £125,140 on that slice only.

I am indeed, however the effect of that is a tax and NI rate of 62%.

These are the super rich I presume?

 

[Nicks]

And people believed him

 

[Steve in Japan]

The next few years will be golden for those who work in the public sector. For anybody else, it's going to be grim. That much is clear.

 

[cunning fergus]

We have outsource a lot of our emissions. That said it is true today that China, Russia and Iran all have higher emissions than us per capita.

But since the industrial revolution (that we started) we are way ahead, we have the carbon deficit as do other developed nations, notably the USA. Circa £2B a year isn't really that much when you consider these poorer countries are going to get hit hardest for something they didn't create. Its a small gesture, compo it ain't ..

If the narrative from our leaders (of whatever political colour) is that we are already at record levels of taxation for individuals and corporates, more required taxation should only be for “emergency” type reasons.

Given this country’s existing debt levels, we are well past the point where taxpayers money is simply being handed over to foreign governments/institutions etc in aid (or otherwise), now we are simply adding more debt for future taxpayers.

I would wager the vast majority of people understand this dynamic and would prefer we right the economic ship before spaffing a couple of billion a year to countries we already bankroll through other foreign aid schemes, and I would include Ukraine on that score.

If we can afford to give billions away, the politicians need to stop the narratives of black holes and economic catastrophe and reduce tax.

 

[beorhthelm]

The complete and utter failure of the Tories to deal with asylum seekers will cost us £6.4bn this year alone - almost entirely the cost of housing people whose claims were deliberately not being processed.

this is an interesting claim. numbers are bit variable, officially costing somewhere between £3bn to £4.3bn, how come there is another £6.4bn? and they stopped Rwanda so there should be savings from that too.

 

[ATFC Seagull]

I suspect we are almost fully aligned on almost all issues (I'll not mention Witch House and Wave music). I have no quibbles with lifetime tory voters, who have made a reasonable judgement that the Tory party had aims and objectives more aligned with their perspective. I understand the abreaction, especially in the 60s and 70s, to the alignment between Labour MPs and the one-eyed union leaders of the time. When I was young I had no affinity with Labour. I regarded union leaders as socially conservative reactionaries, with no time for 'poofs, niggers and layabouts'. I drifted towards Labour (through gritted teeth during the Kinnock era) mainly as a reaction to the needless social vandalism caused by Thatcher.....

I use the term 'rebalancing' as a sarcastic reference to those on the right (perhaps far right) who considered that things 'went too far' between 1945 and the mid 70s, when the 'proletariat' had lots of work available, and we saw the emergence of genuine working class opportunity (and culture). My dad was demobbed in 45, and got an apprenticeship with the GPO. Seven years later, married, he bought a flat in Brighton. Five years more saving and they got a mortgage on a bungalow in Rottingdean. Five years later they were able to upgrade to a semi in Portslade. Eighteen years of graft resulted in a 25 year mortgage, but the job with the GPO was 'for life'. If you put in the time, you could have a life.

The 'rebalancing' as I see it that began with Thatcher has created a massive gulf between house prices and affordability. Modern day contemporaries of my dad are 'safe' either because they have very special jobs that pay eye-watering amounts, or more likely because mum and dad are able and willing to cash-in a pension lump sum to help. My consultant colleague managed to do that for his kids, and I am in the process of doing so for my son. Lucky me. Lucky him.

But the 'rebalancing' has, among other things, put home ownership out of the realms of possibility for a majority. I think this is the result of deliberate policy. I could be wrong. It could simply be carelessness.

This is an interesting article. https://www.newyorker.com/magazine/...en-years-of-conservative-rule-done-to-britain

Here is a quote from it:

"One former Cabinet minister conceded that there were “big strategic moves” to favor older voters, who were more likely to vote Conservative, in the form of pension increases and interventions to raise property prices. David Gauke, a Treasury minister from 2010 to 2017, agreed that the parts of the country that had benefitted most under Labour had seen their budgets cut under the Conservatives. “There was a rebalancing that went on,” he said. “Did it go too far? Maybe it did.”"

The link between the housing ladder and inheritance these days is fundamental and needs to be de-coupled somehow.

I was lucky enough to buy my first house in 2013 with a 95% mortgage and a £10k deposit. If we'd waited a year we'd have needed £20k which would have been a tall order to save whilst renting and living. Nowadays on a good couple's salary you'd need close to £100k for a small starter family home in Sussex. I work with lots of young people in their late 20s and early 30s. Without exception those that are buying are doing so with parental (usually grandparents as their parents are still alive and need their house) help. Those that don't have this option do not even aspire to ever own a property. Obviously there are enough people getting this generational wealth that the prices don't come down for those that don't.

I get the emotive (it's my life's work) and economic (I'll be better with money if I know I can leave it to my kids) arguments around inheritance, especially around homes. But it's also deeply unfair in society that the prospects can differ so much for two people on the exact same life trajectory based on their parents/grandparents achievements and decisions.

It's created a very divided society around one of the most fundamental aspirations - home ownership. As things stand I reckon we're on for an almighty crisis when Millennials hit retirement and millions of them are in private rented accomodation that they can't afford on a pension.

 

[portslade seagull]

And people believed him

Lost a few voters now and it's only the start. Five more years

 

[WATFORD zero]

Lost a few voters now and it's only the start. Five more years

Desperate to get back to the Johnson cabal lining theirs and their mates' pockets ? I can't believe he ever had you or @Nicks as voters to lose

 

[Seagull27]

The next few years will be golden for those who work in the public sector. For anybody else, it's going to be grim. That much is clear.

And about time too - it's been a grim 17 years for public sector workers according to this IFS publication:

Recent trends in public sector pay | Institute for Fiscal Studies

How has public sector pay changed in recent years? Which type of workers have done better and which have done worse?

ifs.org.uk

1. Average pay in the public and private sectors has performed very differently since the election in 2019. Real public sector earnings initially grew substantially during the pandemic (whereas private sector earnings fell as many were furloughed). But the ensuing rise in inflation hit public sector pay much harder due to government pay restraint. Overall, between December 2019 and November 2023, inflation-adjusted average private sector pay grew by 2.3%, whereas public sector pay fell by 0.3%.

2. These recent trends come on top of poor earnings performance in both sectors since 2007. Real public sector pay at the end of 2023 was still 1% lower than its level at the beginning of 2007. Real private sector pay increased by 4% from 2007 to 2023.

3. Within the public sector, some high-profile professions (nurses, and particularly teachers and hospital doctors) have seen considerably worse pay growth than the average public sector worker. Indeed,teachers saw large reductions in average real pay from 2010 to 2019 (falling 13%) but have seen stronger pay growth since then (with pay 5% higher in September 2023 than in April 2019 after accounting for the pay deals agreed last summer). Overall, this still leaves average teachers’ pay in September 2023 9% lower than in 2010.

4. Looking at trends in the English NHS, nurses saw a significant reduction in real pay over the 2010s (falling 7% between 2010 and 2019) and only a modest recovery since, with average nurse pay growing by a little less than 1% over the same 2019–23 period. Doctors also saw pay cuts between 2010 and 2019 (of around 10%) but, unlike teachers and nurses, have also seen their pay fall further in the period since 2019, making them the hardest-hit group of the three.

5. Doctors and teachers, as higher-paid public sector workers, have felt the consequences of compression of public sector pay, with pay deals consistently benefiting lower-paid workers more than higher-paid workers both within and across professions. Compared with 2007, the real earnings of a public sector worker at the 75th percentile (i.e. earning more than 75% of public sector workers) had fallen by 8% by 2023, whereas for a lower-paid worker at the 25th percentile, real earnings had risen by 16%.

 

[Bodian]

The complete and utter failure of the Tories to deal with asylum seekers will cost us £6.4bn this year alone - almost entirely the cost of housing people whose claims were deliberately not being processed.

And would pay for the winter fuel allowance and pay rises....

The next few years will be golden for those who work in the public sector. For anybody else, it's going to be grim. That much is clear.

Please don't lump all those who work in the 'public sector' together. The pay rises they are talking about are for doctors, teachers, nurses. The Local Government pay claim will be far lower and that's where most of your 'public sector' workers are. And also, the main reason cited for the higher pay rise for the 'public sector' this year is because they have acknowledged that a) there have been years of below inflation rises, and b) public sector pay is now lagging behind private sector.

Between December 2019 and November 2023, inflation-adjusted average private sector pay grew by 2.3%, whereas public sector pay fell by 0.3%.

So - why is it going to be 'grim' for non public sector staff?

 

[Harry Wilson's tackle]

The link between the housing ladder and inheritance these days is fundamental and needs to be de-coupled somehow.

I was lucky enough to buy my first house in 2013 with a 95% mortgage and a £10k deposit. If we'd waited a year we'd have needed £20k which would have been a tall order to save whilst renting and living. Nowadays on a good couple's salary you'd need close to £100k for a small starter family home in Sussex. I work with lots of young people in their late 20s and early 30s. Without exception those that are buying are doing so with parental (usually grandparents as their parents are still alive and need their house) help. Those that don't have this option do not even aspire to ever own a property. Obviously there are enough people getting this generational wealth that the prices don't come down for those that don't.

I get the emotive (it's my life's work) and economic (I'll be better with money if I know I can leave it to my kids) arguments around inheritance, especially around homes. But it's also deeply unfair in society that the prospects can differ so much for two people on the exact same life trajectory based on their parents/grandparents achievements and decisions.

It's created a very divided society around one of the most fundamental aspirations - home ownership. As things stand I reckon we're on for an almighty crisis when Millennials hit retirement and millions of them are in private rented accomodation that they can't afford on a pension.

Yes, your narrative is evidently accurate. It really does paint a picture of the haves (with inherited wealth - money from dad or granny to pay a hefty property deposit) and the have-nots. With the gulf between salary and property price not just widening but multiplying, there is no sign of a halt.

One possible line of attack could be the rental sector. Fifteen years ago my GF at that time was a well paid professional living in Macclesfield. For a while she rented a house there. Newish build. We met the owner. He ( a small businessman) said he bought one house to rent in the early noughties, and soon realized the rental return on the investment was lucrative. Over a period of a few years he acquired TEN houses on nearby estates and sold his previous business to focus entirely on being a landlord.

How much of the property market is controlled by such people I wonder? It seems wrong to me that when someone crosses a wealth rubicon the most easy thing in the world is to exploit those who cannot afford to buy a home or, as a Conservative might say, provide a much-needed service to those wishing to rent.

In the past when property prices are 'too high' the market readjusts. In Vancouver in the late 70s there was a property crash with houses losing 50% of their market price in weeks. I suspect the market has readjusted so this won't happen again. It has been boom ever since in Vancouver, with a house a mate bout for $50K in 1982 now valued at well over £1 million.

We had our boom and bust under Lawson, and negative equity. It hit me very hard (a 57K house 'valued' at £40K two years after I bought it). Could it ever be repeated? Somehow I doubt it.

 

[Mellor 3 Ward 4]

The Winter Fuel payments change makes full sense. OAP's not on welfare should never have had it in the first place. People sitting pretty financially like my parents shouldn't receive this.

Not all OAPs who are not on 'welfare' are 'sitting pretty'

Not all worked in the public sector (and thus have very generous pensions) or have decent private pensions.

This is just to pay for the Public Sector workers 5%+ pay rise.

Reeves knows these public sector workers will have voted Labour, she is just rewarding her electorate.

 

[dsr-burnley]

And would pay for the winter fuel allowance and pay rises....

Please don't lump all those who work in the 'public sector' together. The pay rises they are talking about are for doctors, teachers, nurses. The Local Government pay claim will be far lower and that's where most of your 'public sector' workers are. And also, the main reason cited for the higher pay rise for the 'public sector' this year is because they have acknowledged that a) there have been years of below inflation rises, and b) public sector pay is now lagging behind private sector.

Between December 2019 and November 2023, inflation-adjusted average private sector pay grew by 2.3%, whereas public sector pay fell by 0.3%.

So - why is it going to be 'grim' for non public sector staff?

In my experience, the bulk of people who retire early are public sector workers. They can't be too badly off relative to their private sector equivalents.

 

[ATFC Seagull]

The next few years will be golden for those who work in the public sector. For anybody else, it's going to be grim. That much is clear.

Not sure you can read that much into yesterday.

Yesterday's pay rises are off the back of 15 years of below-inflation pay and lagging way behind private sector. If they start giving 5.5% every year, then you may have a point.

 

[dsr-burnley]

The link between the housing ladder and inheritance these days is fundamental and needs to be de-coupled somehow.

I was lucky enough to buy my first house in 2013 with a 95% mortgage and a £10k deposit. If we'd waited a year we'd have needed £20k which would have been a tall order to save whilst renting and living. Nowadays on a good couple's salary you'd need close to £100k for a small starter family home in Sussex. I work with lots of young people in their late 20s and early 30s. Without exception those that are buying are doing so with parental (usually grandparents as their parents are still alive and need their house) help. Those that don't have this option do not even aspire to ever own a property. Obviously there are enough people getting this generational wealth that the prices don't come down for those that don't.

I get the emotive (it's my life's work) and economic (I'll be better with money if I know I can leave it to my kids) arguments around inheritance, especially around homes. But it's also deeply unfair in society that the prospects can differ so much for two people on the exact same life trajectory based on their parents/grandparents achievements and decisions.

It's created a very divided society around one of the most fundamental aspirations - home ownership. As things stand I reckon we're on for an almighty crisis when Millennials hit retirement and millions of them are in private rented accomodation that they can't afford on a pension.

I don't disagree with what they see as a problem, just with the solutions. Step one is to see that some people are rich and others are poor; step two is to say this isn't fair; step three is to find the solution by making all people poor. It's the same with schools; step one, to see that some people are going to better schools than others; step two, to say this isn't fair; step three, to close the good schools. They did it with grammars, they want to do it with fee-paying schools.