how will the government raise the money?

[thereiscustardinthejamtart]

I’m curious as to how the government are going to raise the money for the “£22b black hole”.

Presumably they can either cut spending or raise more money (either through taxation or growth).

They have said they aren’t going to raise income tax, VAT or NI.

They don’t seem to be going for a growth plan.

So what are we expecting to be cut, and what are we expecting to be taxed.

I assume they are looking at pensions (get rid of tax free lump sum, reduce or eliminate relief on contributions), inheritance tax, some kind of additional tax on corporations. They are already doing VAT on private education.

Cuts - winter fuel allowance. I assume reduction in university funding, arts funding. What else?

£2bn is equal to central government tax revenue raised between now and 7pm tomorrow. You knew that though?

The nuclear deterrent is the ultimate weapon of defence against another nuclear state. This is why so many other countries want it.

9 million unemployed? Where on earth did you get that wildly inaccurate figure from?

It is actually around 1.4 million.

@Hatfullofwillow

They could simply ask the Bank of England to generate more funds and use that as investment/spending on public services. Or,"

You mean increase national debt further from the existing £2.5 trillion?

Except that same plan didn't work out too well for Liz Truss.

I know this would not raise much money, but it would make me feel so much better if they scrapped the subsidies for the House of Commons bar and restaurants.

Maybe just scrap Trident but don't tell anyone that is scrapped. Same effect just cheaper....

Ridiculous.

It is never actually going to be used so people just need to believe it could be used.

Should I phone for a doctor?

Having listened to a recent episode of The Rest is Money, they talked about a rumoured change in Council Tax to 0.5% of the property value per year. So a £250,000 house pays £1,250 per year, £500,000 house pays £2,500, etc.

Of course what they couldn’t work out is how valuations will be set and whether people would be able to claim tax relief if the property is in poor condition.

Also a ridiculous suggestion for the bank to print money.

I would align tax rates for earned and unearned income. If anything tax on earned income should be lower than the unearned channels .

UK following Zimbabwe’s lead! 🤣

So getting rid of it means people will believe it still exists?

How does one scrap it anyway? Without the sophisticated digital surveillance picking up on it? For example a private tweet sent by a Fastlane docker to her mate in Spain, being picked up by an eavesdropper in Oregon who is really a soldier in St Petersburg. Or those pesky drone things that can drill a corkscrew into the brain of a terrorist eating peaches at dawn on his secret balcony?

Can't destroy matter that already exists.

Some very interesting ideas!

I really, really hope they don’t cap pension tax relief. I’ve not paid into my pension for 4 years on the basis that I’d be able to pay 4-5 times as much in next year (short term cash flow need).

I can’t see them scrapping the personal allowance. Although interesting that technically would meet the criteria for “not raising tax”.

They might cut defence spending.

Cutting foreign aid is always a false economy and costs money in the mid term.

What tax rate would you raise 'unearned income' to?

Rental profits? Already the same as earned income. 

Interest? Already the same as earned income. 

Dividends? The marginal rate is about 55%.

They have said they won’t increase the tax rates.

Although Scottish top rate is already 48% above £125k, so to some extent it has shown that people will put up with it.

Sounds perfect if they are aiming for another house price crash.

I would pay less than I currently do! 😅

What about mental health tax

you pay a % based on how much mental health you have left in tact.

Scrap Trident?! No thanks.

In June this year around 1/4 of people of working age in this country did not have a job. About 11 million people.

The word ‘unemployed’ actually only applies to people who are actively looking for a job - the 1.4 million you mention. If you aren’t looking for a job, you aren’t ‘unemployed’, you are ‘economically inactive’. It’s an important distinction because there are about 9 million people of working age who don’t have jobs and aren’t looking for one. 9 million economically inactive people.

This includes 2.7 million people under 25 (most of these are students - just over 2m). About 2.5 million people between 25 and 49 - 40% sick, 40% have caring responsibilities. The other 400k or so no given reason. This doesn’t include the half million or so in that age group who are ‘unemployed’ and looking for work.

50 and above (but under 64), about 3.5 million people. About 1/3 are retired. Just over 1/3 are sick. About half a million have caring responsibilities.

So yeah. 11 ish million people of working age who don’t work. @CuttySarcasm isn’t wildly inaccurate at all, just important to be clear on what we mean by ‘unemployed’ and ‘not working’.

I work in HR in the public sector.

Starmer is laying the groundwork for 'exceptional circumstances'. Most bets are off.

The 'basic rate' of income tax won't change. But the higher rate might do.

The 'standard rate' of VAT won't change. But a higher rate might be applied luxury goods.

It is not up to Rachel Reeves whether the Scottish Parliament levies an additional 3%. And £125,000 buys a lot more in Scotland than in Hampstead.

The easier win is taxing wealth.

That was before they realised the extent of the ‘black hole’. They will have to raise tax rates and widen the bands of anyone over £37700.

Capital gains tax, inheritance tax, get rid of reliefs like entrepreneurs relief that means the richest pay the least.

Instead of the usual do more with less, I'd support doing less with less. We can be all things to all people, the social safety net in this country encourages laziness. It's more and more moving towards socialism. I wish I had options to leave but Brexit came along and made it difficult.

We're already on a path to a failed society...