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?

There are a host of Nobel prize winning economists who'd beg to differ.

How do you think we got out of the crisis we were in post WWII? Massive investment in public services & infrastructure is how. Including creating the NHS, the welfare state and the building of social housing.

Leaving it to future generations to pay then. No.

A lot of people would! What it would do though is force the council tax for high value properties in London up. A Band H property in Blackpool pays £4,554 in council tax per year, but a Band H in Westminster pays £1,828 per year.

For comparison, the average house prices in these two areas (according to Rightmove) are £156,932 for Blackpool and £1,689,248 in Westminster.

You would tax inheritances as if they are income? The IHT rate is already 40%.

Entrepreneurs Relief was repealed four years ago.

Capital gains are income 'of sorts'. It is the price someone is prepare to pay to obtain the cashflows today over and above those that existed when you bought the asset originally. Fair game, but they need to allow some indexing to only tax real gains, otherwise investment will be zero.

My thoughts are

1. National insurance charged on dividends in close companies
2. increase capital gains tax rates to align with income tax rates
3. reduce capital gains tax exemptions for non residents if a uk asset is sold
4. something around a wealth tax or inheritance tax increase, not exactly sure what.
5. scrap the upper earnings limit for employees national insurance where ni reduces and have all ni charged at 8% once income is above the primary threshold.
6. scrap the upper age limit for national insurance so ni continues to be paid on earnings regardless of age

restriction of tax relief on pension contributions to basic rate only has been suggested a few times. Not sure on this one as the changes the tories made to pension contributions upset the doctors and contributed to the strikes so having just given them an increase I think the government won’t want to be back to square one. Think it’s more likely that tax will be changed on pensions rather than cutting pension contribution,
relief maybe reducing the tax free lump sum allowed. Although I am planning to make a pension contribution before budget day just in case

It’s called business asset disposal relief now but it is essentially the same as entrepreneurs relief although the limit has reduced

No country has gone from a tax haven to a benefits haven as quickly as the UK.

I am down South too. Food banks are busier than ever. I live near one of the most deprived places in England which is on the edge of a very expensive village.

Quite substantially reduced by 90%.

In days of yore a 'small business' person could retire and if they sold their business the first £250,000 would be exempt from tax. Now, under the Conservative introduced legislation they would pay tax. Under Labour it could be near half of what you sell for.

Taxes increased under the Conservatives and will increase further under Labour. What they do with that tax will really, really matter.

It will be under the microscope. As it should. Google could have indicated an annual black hole of £22bn. No need for the theatrics. Starmer will live or die by it.

That's exactly what 'quantitative easing' was - print more money so that every existing pound that anybody owns is now worth less. Maybe the likes of Zimbabwe just pushed their luck much too far, on top of the lack of international 'credit' that their country can command, compared with countries with more power and international sway.

'Money' comes into existence by the action of somebody borrowing it - so the borrower now has to pay interest on something that their very act of borrowing has brought into existence, and in so doing, has increased the amount of 'money' that there is, thus very slightly devaluing all of the money that everybody else has.

A lot of people have the (understandable) idea that, when banks grant a loan, they are lending out the money that savers have on deposit with them. That simply is not how 'money' works.

Ah see you can't say this otherwise you'll be accused of making stuff up. On the other thread they think this is all tory propaganda

Quite the opposite. We just lived through decades of funneling off public wealth and assets, defunding public services and infrastructure to pay for an increasingly unequal division of wealth on the back of a hollowed out economy. Those failures are being paid for by the poor, the disabled, the sick & the young.

Investment now might reverse some of that damage, drive our economy forward and leave it in a much better place for future generations.

The idea that doing more of what got us here is going to result in anything other than a managed decline seems ridiculous to me.

For what it's worth, when you consider that the one job of the shadow government is to know exactly what the actual government is doing and to hold them to account for it, if a former shadow government subsequently becomes the actual government, for them to only then 'suddenly' discover the true state of the economy, surely that's smoking gun proof that they've just been winging it all along - and should probably disqualify them from taking over the government and it be thrown open to a new vote to find somebody else instead.

I think the poster meant Ukraine marched into Russia this month (Kursk) despite Russia having the nuclear deterrent (even though Ukraine has it over its back indirectly).

We just need to get this government out as soon as possible. They didn’t ‘win’ anything, the tories just lost.

They have no innovative ideas and will just spend the next few years blaming the tories for their policy on taxation. We all know there were no surprises in the budget that they inherited, they can’t pull the wool over anyone’s eyes here.

I’m just sitting back despairing at the show….everyone will continue to get poorer and all the talent in this country will leave. There’s no opportunity here anymore.

Some good ideas here

We just lived through decades of funneling off public wealth and assets, defunding public services and infrastructure to pay for an increasingly unequal division of wealth on the back of a hollowed out economy. Those failures are being paid for by the poor, the disabled, the sick & the young.

It’s a benefit state!

I realise I’m thinking (at least in part) of my own circumstances, but capital gains tax already feels out of whack.

e.g. I have a small bit of land that I bought for about £40k 25 years ago. If I sell it I’ll get about £80k, which means I need to pay tax on £40k. Under current rules I’ll pay £7k tax on my “profit”. The thing is though, it’s not “profit”. Adjusting for inflation £40k in 1999 would have been about £75k in today’s money. So I am being charged £7k tax on a £5k real world “profit”.

Thats at a 20% rate for capital gains. Becomes a bit ridiculous if it was at 40%.

Hopefully with a slightly fairer tax system - get rid of NI, and put everyone on a standard tax of 26% for earnings under £60k. Why should the younger ones pay more tax than older people?

City tax? Can't think of anywhere abroad that you don't have to pay that.
Not entirely sure how it works tho, I assume city tax should stay in that city to be invested in services there. However, I have an idea that business rates used to be collected and divided equally through the country so all councils got the same and that was probably fairer, but then it was changed so councils only got rates from their area?
Not sure if city tax would have to be done that way

Exactly. We need the Tories back in! Who would you have back? Oh the glory days. Cameron and Brexit, May and her wonderful negotiations, Johnson and his partying and lies, Truss and her budget and Sunak and his 700m Rwanda scheme.

Who needs public services, decent wages, infrastructure or food?

They say this every single time we have a Labour government, yet the biggest drain in talent from the UK came after Brexit and is still continuing.

But you're right, they have very few innovative ideas, they were pretty clear they were going to stick with austerity economics.

@Hatfullofwillow scrapping trident isn’t an option, for any credible government.

VAT will be 25%