news.sky.com/story/autumn-statement-key-announcements-from-chancellor-at-a-glance-12749280
I thought there'd be more tax rises for lower earners, but it appears not. Nothing much about government so far.
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The freezing of tax thresholds for 6 years amounts to a pretty big increase in taxes for everyone dragging a lot of low income earners into the standard rate band for the first time.
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>> The freezing of tax thresholds for 6 years amounts to a pretty big increase in
>> taxes for everyone dragging a lot of low income earners into the standard rate band
>> for the first time.
Massive fiscal drag with inflation where it is. This is probably the key anti-inflation measure and more than undoes the 'protection' for low earners.
It also back loads the pain, making life more difficult for the next government.
TBH I'm still digesting it.
There was rumour of extending CGT to principal residences. I didn't fall for that. The OA pension has also been protected. Not surprising considering their key demographic.
The member for the 18th century is dissing the OBR again.
The biggest immediate threat I can see is widespread public sector industrial action to support inflation matching pay claims. Understandable when most have been sliding backwards fo years.
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Bit miffed at the CGT allowance being rolled back to £3k from £12k.
I don't have bundles of shares but I am in the share save scheme at work and this could impact the benefits.
I guess the easiest change would be for younger staff to save a fifth of the allowance each year building up to the maximum over 5 years and therefore sell smaller allocations yearly as they mature, reducing the CGT liability.
Too late for me unfortunately.
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I'm surprised they kept the fuel support for another year.
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There is a big hole in the public finances, caused by Brexit, Covid and War. We already discussed we would be paying for the first two when they were occuring.
Given that the hole needs to be filled, This latest statement has the least pain where it would hurt most. NOt sure how you could expect any better from any regime.
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>> Given that the hole needs to be filled, This latest statement has the least pain
>> where it would hurt most. NOt sure how you could expect any better from any
>> regime.
He isn't filling the hole in the next 2 years. I don't think he's even stopped digging. You could say he's stopped digging quite so fast.
The 'boiled frog' nature of this budget means borrowing starts to reduce in 24/25, and the next government starts in an even worse position.
It's really a 2 year plan, for example he says capital spending will be frozen from IIRC 24/25 - in other words it will be in the hands of the next government. He has acknowledged it will grow somewhat in the next 2 years.
You can debate to what extent the hole needs to be filled and when. I'm not pretending to be an economist but I AIUI a deficit might not be so bad if it's due to capital spending that has a payback, rather than tax cuts which depend on the beneficiaries choosing to invest their extra money*, make returns and pay more tax which is Trussonomics. If you want to differentiate Labour from Conservative this is probably a point of difference in what they are currently implying.
The basic Keynes theory is that increased government spending, tax cuts and loose money promotes growth and recovery. Truss and Kwarteng went all in on tax cuts while the Bank was tightening money hence the market was unimpressed. Running through my mind is FDR's actions in the 30's when the government started lots of building projects and the USA built dams; even in the UK I think the doubling of all the locks on the Grand Union between London and Birmingham was a government funded project to provide employment - although they might have got a better payback had they built the M1.
*does this even work when money is now so mobile? If I had more money I'd be more likely to buy US shares than UK ones.
Last edited by: Manatee on Thu 17 Nov 22 at 22:41
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>> You can debate to what extent the hole needs to be filled and when. I'm
>> not pretending to be an economist but I AIUI a deficit might not be so
>> bad if it's due to capital spending that has a payback,
It was money spent (and still being spent) to prevent social collapse and probably widespread civil disorder. It has benefits, but no financial payback. Like a lot of government spending even in normal times.
You can blame truss* for pulling her finger out the dyke but it was quickly repaired and the flood wasn't that bad and dried out pretty quickly, but generally speaking any government would be in the same boat now given the same set of circumstances, and indeed most countries** are
*I don't blame Truss, I blame the stupid ole gits that voted her in. She did what she told them she was going to do.
** Most other countries dont have Brexit to contend with.
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I haven't checked but unless it's changed you can pass shares to your spouse without triggering CGT, so you could perhaps use their allowance.
Any shares I own now are in ISA's. Can you transfer your shares into one of those?
I notice the div allowance is dropping from £2,000 to £1,000, and then to £500. Happily I have already extracted what there was in our little company to close it down. Any shares I own are in ISA's. Can you transfer your shares into one of those?
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>> The OA pension has also been protected. Not surprising considering their key demographic.
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>>
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That is also Labour policy and has been for some time.
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>> That is also Labour policy and has been for some time.
Indeed.
I thought Reeves made a reasonable fist of replying.
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BBC has just said the budget amounts to a 7% drop in income and living standards over the next 2 years.
As usual when journalists and numbers get together this is so incomplete as to be of very limited use. Not a single assumption was stated, including whether or not that included or excluded inflation-matching pay rises.
>>I thought there'd be more tax rises for lower earners, but it appears not.
TBH I thought there would be more for higher earners. The minimum wage increase from c. £9.40-£10.42 is worth c.£1650p.a. for the lowest paid. Before any effect on benefits, the marginal tax rate on that will be 32% including NI if memory serves (handily increasing tax revenues at employers' expense, or, looking down the other end of the telescope, reducing the government subsidy of firms paying wages to low to live on.
The are so many moving parts, it's quite difficult to take in the whole picture.
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12p is alot considering prices are high anyway, particularly diesel.
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The second half of the paragraph from the report (which will be the one which doesn't capture the headlines) says "the first time any Government has raised fuel duty rates in cash terms since 1 January 2011."
Puts it in perspective a bit.
Last edited by: smokie on Thu 17 Nov 22 at 19:14
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>> The second half of the paragraph from the report (which will be the one which
>> doesn't capture the headlines) says "the first time any Government has raised fuel duty rates
>> in cash terms since 1 January 2011."
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>> Puts it in perspective a bit.
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Only because there is a belief by those who tax us that duties like this should rise annually with inflation. They seem to think our money is theirs and they are giving us a benefit by not taxing us at 100%.
Also, the timing is crap. It would have actually been better to increase the duty when times were good and saved or invested. Who knows, that might have allowed a cut now?
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>> 12p is alot considering prices are high anyway, particularly diesel.
It is.
But OTOH it's the combined effect of removing the reduction Chancellor Sunak made at the height of the £2/litre panic and a rise of 5p/litre that might be expected too.
What's not right is that it was hidden in the post budget 'red book' without being part of the speech in front of the Commons.
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It'll also feed into inflation, especially food. I suspect it might be a decision that is reviewed.
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>> It'll also feed into inflation, especially food. I suspect it might be a decision that
>> is reviewed.
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Nothing hemorrhage's votes like a hike in fuel duty, as Tony Blair discovered two decades ago. I also think it will be reviewed, especially as it comes on top of a massive hike in prices since the Ukraine invasion.
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Doing a bit of reading I'm not sure this duty increase is planned. It seems to be an assumption from the OBR. The treasury states it has said nothing about fuel duty and will deal with it in the spring.
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>> Nothing hemorrhage's votes like a hike in fuel duty,
Well actually 12 years of Conservative government does and has.
Whether to increase petrol prices by a few pennies or not is not going to make a spit of difference to the electoral outcome. The Tories are currently 21% behind in the polls.
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I think I saw that Bank CT add-on is dropping from 8% to 3% as well, also in the fine print.
Surprised me, banks coin it when rates rise so there would have been some logic to keeping it up.
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>> I think I saw that Bank CT add-on is dropping from 8% to 3% as
>> well, also in the fine print.
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>> Surprised me, banks coin it when rates rise so there would have been some logic
>> to keeping it up.
>>
Vested interest here - good! More money for pension funds, pay and to pay for all the fraud costs which is effectively a hidden tax.
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Pandemic and Ukraine support need to be paid for. We knew it at the time and decided to borrow and/or print the money. The outcome is either higher taxes, inflation, or a bit of both.
Brexit to my mind is a self inflicted wound - although I accept some may disagree. Benefits appear non-existent, costs and disruption are very evident.
The real question is how the burden of payment is shared. Predictably there are generally selfish arguments to justify why others should be the target - the rich, the scroungers, wealthy pensioners, drivers of big fast cars, immigrants - the list is all but endless.
Personal view - overall it is reasonably balanced with the wealthy paying most and the very vulnerable getting additional help. I have no issue about the first rise in fuel duty since 2011 (if it happens) nor VED on EVs. The "hole" is that deep there is no easy ride for anyone.
That the tax increases come before the next election, and probable cuts in public expenditure mostly follow subsequently is no surprise:
- tax changes can be very quickly implemented cheaply
- public spending cuts take much longer and cost more (redundancy, consultation etc)
- public spending cuts could suggest that spend on projects already started had been wasted
- by 2025, improved finances may mean less public spending cuts are needed
- equally by 2024 (election) circumstances may allow some relaxation of tax increases
Irrespective of which party was in power, I suggest the priorities would be similar if faced with the current challenges.
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Fuel duty is irrelevant. You roll up at the pump and have to pay that days rate. How it’s made up doesn’t matter as we saw when they cut the rate and the prices pretty much didn’t change.
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>> Fuel duty is irrelevant.
Far from it. If implemented, fuel will be 12ppl more expensive than if the duty were not increased.
If your wages are fully committed and you need fuel to get to work then something else (food perhaps) has to go.
You may as well use the same arguments for all of the discussions we have had here re energy prices. They are also subject to the price on the day with a little fiddling by the regulator and yet we hear of millions struggling to heat their homes.
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Assume 10000 miles pa at 45mpg (10 miles per litre). 12p a litre is an extra £120 pa - about 8% on the fuel bill.
There are some living on very tight budgets but in context - cut car use by ~15 miles per week - car share occasionally, organise shopping better, walk, cycle etc.
The minimum wage is increasing by £1600 pa.
Keeping the personal allowance fixed when, if inflated, it would increase by ~£1300 pa will cost standard rate taxpayers £260pa. A lot more for higher rate tax payers.
A non-woke sentiment - in the grand scheme of things it is trivial - there may be some for whom it is a complete deal breaker - but for 99%+ - just get over it.
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Am I being overly optimistic in thinking that current high prices are a temporary blip due to the Ukrainian situation which hopefully will be resolved?
However we will be conditioned to those higher prices so that if/when the base price lowers the increase in fuel duty will be implemented and psychologically we will not feel a change.
the other consideration of course is that you cant take the price of fuel in isolation in our budgets.
Everything else that depends on transportation will increase in price also impacting our budgets.
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I've made the same point in discussions elsewhere but no-one has picked up on it but I'm sure it's true. Realistically I don't think we'll see pre-war prices again but they should be a lot LOT lower.
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Depends on how long sanctions last, we imported lots of diesel from Russia as the refineries here in the UK don't produce. Nearly all refineries specialise in products from a certain type of crude oil. You can't get them to switch products very easily, if at all.
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And of course our friends in OPEC recently agreed to benefit their mates in the west by increasing the cost of a barrel of oil.
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I noticed petrol higher than diesel, 140 vs 142, for the first time in quite a while. Only a few months ago I'd seen diesel as much as 15p higher than petrol.
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End of heating oil season.
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Diesel €1.339 gasoline €1.519 yesterday @ Plenoil on C Blanca
Revolut got €1.151 to £ yesterday so slight improvement in exchange rate.
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Autumn statement - CGNorwich
