To think austerity in the UK is a myth

[Pattiesc]

www.bloomberg.com/news/articles/2015-09-22/u-k-has-highest-august-budget-deficit-since-2012-as-tax-falls

Just where is all the money going that has been cut from peoples benefits?!

[Pattiesc]

www.bloomberg.com/news/articles/2015-09-22/u-k-has-highest-august-budget-deficit-since-2012-as-tax-falls

[FinglesMcStingles]

Just a guess because I haven't read the article, but most remaining benefits are going to landlords and utility companies, leaving bugger all to spend on fripperies like food. Cut people's income so they've got nothing to spend, and suddenly VAT takings are down.

As for where the cut money's gone - is it even real money, or just numbers on a balance sheet somewhere?

[OurBlanche]

Well! That didn't take long.

Landlords... bastards

[InimitableJeeves]

Sensitive, OurBlanche? Saying that people are using their money paying rent to landlords is a purely factual statement, there is no criticism of them in Fingles' post.

[ghostyslovesheep]

No one slagged off landlords but with a lack of social housing, low wages and unemployment I am guessing more people are claiming housing benefit in the private rental sector - with higher rents ergo higher costs - it's not a nasty comment is it?

[OurBlanche]

Nope, just amused at the MN Cant!

[IceBeing]

Yes, austerity is a myth...as it is only being applied selectively and to no effect given the deficit is increasing.

The need for austerity is also a myth, with the majority of economists saying we would have recovered faster from the global crash if we had spent more not less.

[SaskiaRembrandtWasFramed]

Yes, they tried a similar thing in the US after the Wall Street Crash. It didn't work then and it won't work now. You can't make the economy more buoyant by taking money out of it.

[Ta1kinPeace]

Thread title confuses me.

Are you implying that the Bloomberg article says anything other than that incomes and small businesses have been squeezed so hard that they are contracting and thus tax take is down?

The Deficit has INCREASED under Osborne because productivity is flat as a pancake.

The first round of cuts took out flab.
The second round took off fat
The third and fourth rounds went into muscle
the Fifth and sixth rounds are deep into bone and vital organs.

Addenbrookes failed its inspection because it has been expected to do much more with much less.

The UK economy is the same.

[JassyRadlett]

I think the answer to your question is that austerity isn't a myth - it just doesn't work very well either to reduce deficits or boost the economy.

[FinglesMcStingles]

No landlord bashing intended!

I assume most people put rent or mortgage at the top of their financial priority list. Housing benefit bill is ginormous, and for renters. You can't get HB to pay the mortgage on the house you live in. Ergo that vast chunk of cash is being paid as rent. I'm using "landlord" in a very general sense, to mean 'the recipient of the rent'.

Essential utilities are next on the priority list: gas, electric, water, internet (which is in practice if not yet in law a prerequisite of claiming benefits).

If a household pays the above and finds themselves with anything left over: great! They'll spend it on food, clothes, treats - keeping the money in circulation, paying VAT, providing custom for shops and small businesses. But if all they've got left over is a tenner a week, they're paying very little tax and providing very little custom. Which obviously has a knock on effect.

Where in earth was the landlord bashing in that?

[AyeAmarok]

Good point Fingles

[evilcherub]

The elephant in the room is the cost of HOUSING be it renting or buying. It's too bloody expensive which means people are spending all their money on housing and nothing is going into the economy.

[Lurkedforever1]

It's because for some reason politics and basic economy seem to be mutually exclusive subjects at government level.

[Ta1kinPeace]

It's too bloody expensive which means people are spending all their money on housing and nothing is going into the economy.
And too much of the UKs building stock is owned by non taxed offshore companies
www.private-eye.co.uk/registry

[SaskiaRembrandtWasFramed]

"And too much of the UKs building stock is owned by non taxed offshore companies
//www.private-eye.co.uk/registry"

I saw this, it was astonishing to see how much of the country is in the hands of these companies.

[OneFlewOverTheDodosNest]

That Private Eye registry is really interesting. I live in a place that's got hardly anything foreign-owned - although the local Lidl is owned by a company in Germany... the bastards.

[Ta1kinPeace]

oneflew
I find it interesting how many private homes - three bed semi types - are owned by companies in Jersey or Guernsey or the Channel islands.

There is no reason for that other than "tax planning"

Lidl at least have the reason that the are based in Germany!

[SaskiaRembrandtWasFramed]

Ta1kinPeace I noticed that too. I live in a very dull village, but there are a number of what appear to be private homes that are in fact owned by a property company based in the Channel Islands.