To wonder where all the money is going to come from to increase wages?

[girlfriend44]

Genuine question. Re people who are striking for more money.

Where do they think the extra money is going to come from to increase all their wages and how will this keep inflation down?
Can the government really afford to pay everyone more?

That is because the law does not permit strikes for other reasons. The motivation behind many teachers, doctors and nurses going on strike is not pay, but that is the only lawful reason they can strike.

I just listened to this podcast. He explains really well (from 38/39 mins) that if you increase the salary of a low-earning worker most will work it's way back in tax eventually to the government.

pca.st/episode/f9f756e8-d48c-404b-9b50-37f089d7700f

NI and tax from the worker, then they spend (every penny), on which is VAT. The person who receives that money will then pay income tax and business taxs and pay for their own goods, services and bills, and so on.

Thinking about it though. I see one drawback with this theory: that a large proportion of a worker's wages is now going to utilities (heating) which has a very low revenue for the government. What with subsidies and all being privately owned.

And I obviously can't stop you misquoting me but it's disingenuous, weakens your own arguements and by doing so it exposes you as a manipulative person.

Jesus Christ get a grip, it's a forum on mumsnet not a trail at The Hague! I am not misquoting anything - it is exactly what you said. Maybe you should look-up the definition of misquoting.
Maybe if your own trite close all the loopholes arguments had any substance you wouldn't have to make character assassinations of other posters.

Other options are available.

But lets examine

1. increase in taxes.

Should those earning a million pounds a year pay the same proportion of tax as someone earning £20,000?

@JassyRadlett we are just going round in circles and I'm pretty sure you know what I mean but for clarity - if the government give teachers are payrise this will increase school funding but it will then be paid on to teachers so the school does not have any extra money to pay for any other resources.

@jgw1 that's a fair point but ultimately how do you know anyone's motivation. No-one is going to say I'm just striking cos I want more money! It suits the narrative and to make it all about the evil Tory's versus saintly teachers and nurses. If they haven't had proper payrises for years then of course they should try and get them however they can but I personally draw the line at thanking the teachers in my kid's school for going on strike and the kids missing school when they have already missed months and months of school in their short educational life.

I know the motivation of the teachers doctors and nurses I have discussed it with and have no reason to think they are not representative, all be it they are a small sample.

• • increase in taxes.

Should those earning a million pounds a year pay the same proportion of tax as someone earning £20,000?*

Of course not but they don't. Assuming you aren't referring to tax avoidance the someone earning £20k has an effective tax rate of 12.5% whereas someone with a million pounds of income has an effective rate of 46%.
Of course that only refers to income tax and both parties will pay VAT on certain thing they purchase but I find it hard to believe that would make the rates much closer!

Tax wealth, not just income.

We had low CT rates from 2016, it did nothing to increase inward investment... or home grown productivity or RnD.
Germany has a business tax rate of just under 30%, yet seems to have a strong economy.

We don't tax investment income as we do earned income, in deed it can be reduced to 0% by using ISA's.... Capital gains has many loopholes to reduce liability.. then there is council tax reform, someone like Sunak will pay around double for his main residence and swimming pool over an average priced house, despite being worth many times more....

We could change the universal energy support scheme, why are multi nationals and millionaires getting support?????

But what the OP and others are ignoring is that without significant increases in pay, we will continue to have sub standard health and education.. neither will help boost the economy, provide the skilled workforce we need or increase inward investment.

What people who are say we cannot afford it (inc Government) need to come up with is an alternative to keep staff?

The government don't give a shit about these type of caring jobs ( I'm an ex teacher..now nhs ahp) as they do not generate cash. We voted for a staunch capitalist government who see poverty as a moral failing. They have no time for sick people or poor kids in a state school. They only have time for the rich.
They see people working for the public sector as 2nd class citizens and not deserving of a decent wage. No coincidence, like others have said, that these are jobs mostly done by women.

This is very true... a independent report into social care and support for children following the brutal murders of 2 children, recommended £1.2bn in extra funding, the Govt is going to fund £200m, same with education, £11bn recommended, Govt came up with £2bn.

But when it comes to installing key meters in the poorest households, they don't stop that... been going on for years but until a journalist, nothing was done, Schapps horrified? yes he was, Horrified private industry wont be able to punish the poor... though after a suitable delay, it will continue....

It would be nice if it were true that higher earners pay a higher proprotion of their income as tax than lower earners but it is not the case.
Lower earners pay a higher proportion of their income in all forms of taxes than higher earners do.
Would you agree that is an absurd situation and ought to be addressed?

Are they capitalists?
I thought and I may be wrong that capitalists were of the view that markets should be allowed to determine the value of everything. So if there is a shortage the price should be allowed to increase.
There is a shortage of doctors, teachers and nurses surely in that situation a capitalist would see straightaway that the solution was to increase their wages until there was no longer a shortage?

As far as I understood the Education Secretary on the radio yesterday the extra 2 billion that was promised for education in the autumn exists (not yet in schools) so that the Prime Minister can say that spending on schools has increased since 2010 and for no other reason.

Tax unearned income - shares from dividends etc at the same rate as earned income and our spending problems would be solved. Plus as others have pointed out low paid or middle income workers spend almost everything they earn and are taxed on their income plus their spending. The government gets back on average 1.6 pounds for every pound it spends in this way.

Teachers were also striking about funding as the current pay offer is not funded and therefore comes directly out of school budgets. They are striking for 10% which is slightly below inflation and therefore is not only a pay cut but also can't be inflationary.

Public sector spending is also not inflationary in the way private wage rates are as they don't affect prices.

Basically the government wants a fight with the unions and is deliberately offering pay awards it knows can't be accepted. There's no good economic reason for any of this - despite media spin to the contrary

@jgw1 I would be interested in any proof you have that someone paying tax on £20k pays the same proportion of their income tax as someone who pays tax on £1m. I don't believe that to be correct.

Whether you believe it or not, doesn't change that it is the current state of affairs.

@jgw1 - well if it's true surely you can provide some evidence other than you saying it is true. It's not really about what either of us think. I have given you the income tax numbers where is is clear a significantly higher percentage is paid by higher earners so maybe you could provide some back-up for your assertions.

It's a few years old but the Equality Trust study summarised here www.independent.co.uk/news/uk/home-news/lowest-earners-more-tax-richest-office-national-statistics-inequality-council-tax-vat-equality-trust-a7704331.html showed that the poorest households do indeed spend a far higher proportion of their income on tax, mainly VAT and council tax.

Given the current state of affairs some six years later I would be amazed if the figure hasn't got worse.

@PartyHelp You are still missing the point that the current offer isn't fully funded. So it represents a cut to non-teacher-salary school budgets.

Saying that 'if the government give teachers are payrise this will increase school funding but it will then be paid on to teachers so the school does not have any extra money to pay for any other resources' is flat out wrong - it would reverse the current situation.

If the sole outcome of the strikes was to get the current offer fully funded, it would reverse that cut and put money directly back into non-teacher-salary pay. Saying

You are treating all this like there's no offer currently on the table - ie that the Union demands exist in a vacuum. They don't. The current government pay settlement offer represents a funding cut to schools, because they have to cut spending elsewhere to pay for it.

I'm happy for pay rises in public sector as long as defined benefit pension burden is removed.
I read one of the serving policemen that got done for rape was going to get a pension of 20k a year after coming out of prison...whilst I don't think his pension should be removed, I do think people need to appreciate that for someone that has no higher education (so no barriers to anyone) and to go into public service and get a guaranteed index linked pension is a massive benefit that is probably only available to those in public services these days and if you want the financial reward now in terms of wages, then it should be separate to getting an increased guaranteed reward at retirement.
Do I think people in public service work harder than people in private sector? No and i think it is an insulting to claim that.

Its not hard to find the ONS data that shows that the poorest 5th of our population paid 23% of their income in indirect taxes whilst the richest 5th paid 9%, and once one gets to an income level of a million pounds the difference is more extreme.

It is a little hard to do that analysis for the covid years as many people at different incomes levels recieved significant government protection.

But certainly the government have done nothing to deliberately address this.

What are you suggesting as an alternative?

How high would the top tax rate be and how much lower VAT and council tax - if the latter changes

The tax burden is still mostly taken by top centiles but figures on what changes people want to tax rates would be simpler

@FlippyFloppyShoe That guy started in the police force over 20 years ago, those pensions aren't available to new starters in the police/public services now plus employees pay in around double what someone in private sector would.

So far no one is coming forward on how to stop staff leaving and keep them motivated....... if they won't give them an inflation matching pay rise.