I'm actually pleased with the mini-budget

[yubgummy]

(Cue hysterical shrieking ;) )

Macroeconomics is complex. It surprises me that within a week, there's such a strong consensus that everything about the mini-budget is literally the work of the devil. Echo chamber...

The UK basically has never recovered from the GFC and has just been stagnant and struggling for a decade. The clear theme in this budget is encouraging people to actually get out and DO something ("supply-side reform"). Tax incentives for businesses to invest in plant & machinery, reducing red tape for infrastructure investment (more North Sea licences, more onshore wind), tax cuts to base rate & NI to encourage people into work...

I would like to see more action on interest rates from the BoE, and I would like to see more detail on the Planning & Infrastructure Bill, but I want to give them a chance instead of calling for yet another change in government. Supply-side reform is a perfectly sane strategy and the UK economy does need to get moving, by which I mean, producing new and useful goods and services not just keeping the whole country on life support.

Polling changes every week!!

Er yes! Given it is my salary!

Macroeconomics is complex. Some supply side reforms would be welcome no doubt.

The concept of not running up massive debts just to give money to the richest 1% is simple however.

Ok. So yes, I like most people who earn less than the 45% threshold would be very happy to pay 45% on the income earned over that threshold. In just the same way as I'm happy to pay tax on the income which is above the tax free allowance. Because that's fair. HTH.

My best advice to most people is to re-evaluate their talents and their work in a productive light. Too much of our Economy is based on Financial Services and the 'serf services' to keep this sector happy and 'buoyant'.

Being able to make useful things, provide useful services and keep our society as healthy as possible (through public sector services) is the best use of any money.

The Financial Sector are mainly gamblers playing with Monoploy money
and aren't really that useful and certainly don't deserve to hoard money in various global coffers without expecting the serfs to take it back at some point.

And only the most brainwashed would think that keeping these Snake Oil Sellers in charge of Global Economies is a good thing.

I'm a higher rate tax payer. I was and am happy to pay 45%. I don't need a tax cut.
I don't disagree with the energy cap- but the producers who have earned unplanned and huge extra profits should have been taxed on those extra profits to pay for some of it. I do not buy the 'if we tax them more they won't invest' argument. All these companies will have short, med and long term investment plans based on their forecasts of profit prior to the energy crisis. These plans should not be affected by a windfall tax.

I don't agree with the tax cuts (except NI reversal) It puts fiscal policy totally at odds with monetary policy. Surely the best way to grow the economy in as little an inflationary way as possible is with infrastructure spending preferably in areas of most deprivation. If they had to cut taxes how about VAT on fuel? Immeidate and tangible benefit to all.

And today I heard a tory explain that they will be doubling down on costs. Not going a penny over the budgets agreed in the last round. Which with the costs of energy, the collapse of sterling and high inflation will see real cuts and that's before they announce more actual budget cuts in Nov.

There is no point having an income tax cut if there is no health care, education or a fire and police force etc etc.

How hard do you work, OP? Because according to Truss & KK, you're a lazy toerag. Almost all the Brits are. These tax changes are meant to turn us into lean mean producing machines.

What are YOU going to do different in your life to stop being one of the idle?

@balalake

The concept of not running up massive debts just to give money to the richest 1% is simple however.

How do you feel about the concept of running up a £60bn+ debt to give energy bill relief to households and businesses, £15bn to give tax relief to ALL households by rolling back NI, and adding £2bn to give money to the richest 1% as part of a wider growth plan?

I have a very good understanding and can totally understand your struggle if you’re still waiting for assessment. I hope you don’t have to wait much longer. Don’t be ashamed of relying on food banks, lots of people use them and people tend to give to food banks because they genuinely want to help. In an ideal world you’d have had your assessment and have your top ups, unfortunately the world is far from ideal

@Havanananana Germany's inflation rate is 10%.
EU inflation by country.

The timing of the tax cuts at a time of high inflation, energy crisis, high national debt levels is terrible. Then not spelling out your plans (despite market turmoil) makes it look like you have no plan and are making it up as you go along. We hear now on bbc that kwarteng is asking govt depts now where they can make cuts. To me this makes it seem like he first wanted to cut tax (and thinks about the consequences afterwards). I expect a chancellor to first assess impacts of cuts before making them - and be able to justify in a detailed way.

I don’t think the strategy is totally without reason - I guess they may want to attract multi national companies to open more offices in U.K., bringing in more jobs etc - so we may get more higher rate tax payers in total? The weak pound may make it more attractive. But the market instability, political instability (multiple pms) and increased difficulty doing business with Europe might count against it? also frequent strikes, under funded public services. Plus, it will take time for investment to happen - so no need to do big rapid changes like LT and KK have done.

@Kissingfrogs25 "You haven’t mentioned what countries in Europe tax over 45%"

Germany - top rate of income tax is 45% plus a 5.5% solidarity surcharge.
Austria - rate over €60,000 is 48%, increasing to 55% for top earners.
Denmark - top rate is capped at 52%
Netherlands - rate over €69,398 is 49.5%

A simple google will find the rest but it is clear that many countries with a far higher standard of living than the UK also have a higher tax rate.

The UK actually has one of the lowest rates of income tax in Europe, and one of the poorest levels of investment. Which country does Bloomberg think is the most competitive to invest in? - Denmark, which by no measure is a low-tax, low regulation economy. www.bloomberg.com/news/articles/2022-06-15/danes-overtake-the-swiss-as-world-s-most-competitive-nation

We fucked science over when we left the EU. I’ve got a feeling the finance industry has been moving money out of the U.K. at speed.

I’d be surprised if lowering taxes further was the driver to huge amounts of investment given that they were already relatively low. It doesn’t make up for the U.K. being a high risk basket case where absolutely anything can happen. Much better and safer opportunities elsewhere.

The government are trying to help unshackle the country of pointless regulation to attract more business, to ensure the very best legal minds, bankers, surgeons and entrepreneurs STAY in the U.K. by reducing their tax burden. In an increasingly competitive global market we need to be a low tax country that stands out from all the rest. Business friendly and attractive. That way we stimulate growth and investment.

The best legal minds have to stay in the UK - thanks to Brexit their qualifications are no longer recognised outside of the UK. Surgeons likewise - although after Hunt decided that junior doctors could not have a pay rise or better conditions, many of them left for Canada, Australia and New Zealand. As for entrepreneurs - the most vocal pro-Brexit, pro "small state" entrepreneurs have likewise left the UK. Ineos (billionaire Brexit-supporter Jim Ratcliffe) and Dyson both chose to invest in their factories abroad rather than in post-Brexit UK.

In an increasingly competitive global market, the current government (as spelled out in Britannia Unchained) wants an unregulated, low-tax economy which is totally at odds with the interests of the population. It equates to sweatshop Britain, as already seen in the textile factories of the East Midlands and in the fields of East Anglia. And if the British won't work under these conditions, then the government has plans to import cheap labour from Nepal and elsewhere in Asia. The role of government is not just to be "business friendly" - the government is elected by the voters and is supposed to act at all times for the benefit of the entire population, not just for the interests of "business".

It would be perfect for the UK if the entire of the UK stopped at the north and south circular. Or even the M25. That isn't the case though which is why only London and the SE are net contributing regions. The work of 18 million people (9 million, 9 million SE) cannot support an entire country of 70 million people which is why the country's finances are in the state that they are in.

Larger countries are more expensive to run and generally the richer regions have to support the poorer regions, hence we must pay more tax.

Hello Kwasi @yubgummy Haven’t read the whole thread as I can’t really be bothered to engage with conservative central office, unless it’s to watch their expulsion from number 10. The budget won’t achieve improved productivity or investment. Business owners are making plans to move their businesses out as they don’t trust the tories, who have already facilitated a ton of Brexit related problems and they don’t want to raise their children in a fracked Freeport UK.

Tories haven’t polled over 34% since January. Do you think two thirds of the country is socialist?

It really doesn't if you know much about the IMF's track record...
I agree OP (and no I'm not a banker, or on £150K+ - in fact a single mum on a modest wage). But I'm not surprised at the reaction - lots of people don't want to wait for long-term growth, and want fast results that will put more money in the account now. But measures that do this are sticking a plaster on what is a huge wound and I'm all for creating a more sustainable economy. I think the cap was a silly idea (thanks EU) since bankers pay 50% tax on them anyway, so bigger bonus = more money to the Gov't. We need to make our economy much more attractive to the rest of the world, and I think this will help. This is a big gamble, but I can see why Truss and Kwarteng took these drastic steps.

ok OP, you have totally changed my mind! It’s not Truss and the Tories who are mad, it’s the whole REST of the world.

just kidding.

The IMF usually only steps in to bail economies out… we should be embarrassed that’d they’ve felt the need to go ‘WTF?!’

Very few economists agree with you and the pound has crashed - hard to see a silver lining.

many people will loose there homes.

Again, there’s no point in doing a “long term” budget that everyone hates because you’ll just get voted out and it’ll be changed anyway. There’s nothing noble about political stupidity.

The 80s? When 3 million people were out of work? That was strong? When the entire British industrial base was decimated because the Tories thought muck and brass was dirty and wanted refined service industries like banking and shops like mrs T daddy owned? Where interest rate rises led to millions loosibgvthere homes and negative equity. When council housing stock was sold off cheaply as an election gimmick never to be replaced and causing a housing crisis ever since driving stupid property price booms and unaffordable rents.
yep, that was also a strong economy…if you were already rich …yep you got a whole lot richer.

Led by Donkeys have put it into graphics for us (warning, its long)

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every Single person who has ever voted Tory SHOULD be deeply shamed food banks even exist.
and now were talking about heat banks
and making people work more hours to even qualify for benefits (and by that we mean mainly poorly paid women juggling caring roles that can’t work extra hours cos there’s no childcare they can afford. )
that people who are working full time jobs need tax payers money to subsidise their wages because the fat cats don’t pay them enough to actually live on.
We’d be talking poor houses soon too, if it didn’t mean the government would have to actually pay for a roof over someone’s head, heat it at least a bit, and provide at least some food

I am horrified we have come to this and continue to be appalled that people are no longer are shocked at it.

And that people like you think food banks are marvellous. They are a stain on our society and government.