Another budget one. Sorry.

[photodiva]

I keep seeing posts about how this budget will be so bad for us all, am I the only one who won't be (personally) directly affected? Or at least, in a negative way?

I get the issues around businesses and NI but I am a civil servant.

I will get a pay rise! Yep, you read that right. I earn NMW so my wages will go up.

And I don't have a 'gold plated ' pension.

I totally get there will be a lot affected but I can't be the only one who benefits can I?

Yes, unfortunately not everyone can afford private school. I do sympathise as I would also find it annoying for my kids to change school. It may affect our decision regarding private vs state for secondary school. However, it's not the worst economic plight in the country.

Not many people are prepared to sacrifice their children at the altar of their ideology.

Still, you must be pleased that this budget will put more money into state schools now that you’ll be using them.

It isn't just "annoying". Research shows how damaging it is for kids to move schools at secondary level. There is massive inequality in state education and that's what mainly prompts most indy parents to choose that option.
My child is one of thousands now facing this, all caused by Labour for a revenge policy that will raise £0 net.

According to MN, many posters do sacrifice their DC on the alter of their ideology. I know none in real life who would do that but on here it is a badge of honour to do so

Are people really this naive?

You do realise if farmers have to sell up to pay IHT there won't be farmers to farm our food pushing the cost of food up. The more food we import the less carbon neutral we can be.

Businesses will just put the extra costs onto consumers, so your bills will go up too.

I know people like to say the privileged are the only people affected by vat on school fees, but less pupils mean less staff needed so more people out of work, less cleaners, cooks, care takers, matrons, house masters/mistresses will be needed and they aren't the privileged.

The academic results from the local grammar are comparable to the public school DD would have attended, and vastly better than the very poor local state secondarys’ results.

Which is why it’s such a crying shame so many less affluent DC will have lost their opportunity to be educated into a higher socio-economic group.

I do appreciate that I am the type of parent you enjoy sniffing at @noblegiraffe, but there are no winners here.

You obviously don't value Private education that much then.

The VAT policy is ridiculous against the backdrop of this budget anyway, they are using vast amount so tax rises and debt to fund it all so they could drop the damaging policy.

IFS has said VAT on school fees will raise £1bn pa and 7% of kids joining state sector cost £300m pa so will be a net benefit? Also I do personally think that private school is a luxury which it makes sense in principle to tax. I do appreciate it will be hard for children to switch schools. But as an academy trustee of some schools serving some v deprived communities, I still find it hard to see those who can no longer afford private schools as victims in the big picture.

Of course the grammar school results are good, they are a selective school.

But if you think that the tens of thousands of pounds difference in funding per pupil don't make any difference to the education on offer, one wonders what private school parents are paying for in the first place.

Plumbing prices have risen significantly since Brexit 🤷‍♀️

That's because they need to be able to pay for their breakfasts 😜

That's because they need to be able to pay for their breakfasts 😜

🤣

No that's what they initially said, before exemptions were applied and when % moving looked smaller. They are now on record saying it won't bring much/any money in. Labour ignored that update.
They have now exempted one fifth of pupils and the OBR statement doesn't take into account the cost of the state now having to pay for the education of indy kids as they move out of indy sector.
50,000 leaving costs the state £375,000,000 per year. That isn't factored into the calculations

VAT isn't a luxury tax.
If it were then designer kids clothes would be VAT added because there are cheaper alternatives available

Labour have made UK the first country in Europe to tax education.

People don't seem to be joining stuff up with this who needs cafes, who need pubs, hairdressers type posting

Do you not know anyone employed by a business like this?

So you do believe private education adds value to society? Yet you simultaneously believe private education should be minimised through taxation?

(think you may have tied yourself in something of an ideological knot there!)

For those saying they’re not impacted negatively- you will be when inflation goes up, interest rates go up, mortgage rates go up, price of goods /services go up as business try to cover the massive cost increases.

the economy is going to be stagnant and I expect we’ll start to see the full impact with job losses as businesses cut back

fcsts on growth already being revised downward and delays to interest rate cuts as a result. Mortgage lenders already pulling some products

but hey, bloated public sector protected so that’s alright then

twistyizzy I am not sure where you are getting your information but the OBR has certainly forecast a net uplift in revenue from VAT on school fees, see https://www.gov.uk/government/publications/vat-on-private-school-fees/applying-vat-to-private-school-fees#summary-of-impacts - see the section on 'economic impact'
"Alongside the revenue raised, this policy will result in some additional costs on state schools due to pupil moves. Based on average 2024 to 2025 per-pupil spending in England, the government expects the revenue costs of pupils entering the state sector as a result of the VAT policy across the UK to steadily increase to a peak of around £270 million per annum after several years.
Overall, this means that expected revenue will substantially outweigh additional cost pressures."

The last item from the IFS website I can find on VAT on school fees is this https://ifs.org.uk/publications/tax-private-school-fees-and-state-school-spending which also projects significant net benefit even if 7% of indy students go state as a result of the policy.

You need to look at the recent video statement by IFS
OBR just parroted IFS initial report.

And anyone seriously thinking the money will get to frontline public services are mistaken - most of it will go to fund public sector pay rises and take in pensions ! Something like for every £100 given to nhs, £90 goes to pensions and salary and only £10 to frontline. ( people can look this up themselves )

giving money with NO demands for major reforms and restructuring is simply waste of money.

EasternStandard · Today 12:33

MrsSkylerWhite · Today 11:57
fromdownwest
When your breakfast at the local cafe goes up by 10%, or the quote for your new bathroom is 10% higher, then maybe you will understand that we are all impacted by putting the burden on business.
Seriously, if you can afford breakfast in cafes, you can afford a 10% increase.
Plumbing prices have risen significantly since Brexit 🤷‍♀️
**
People don't seem to be joining stuff up with this who needs cafes, who need pubs, hairdressers type posting
Do you not know anyone employed by a business like this?

Not at all, completely get that but most people can’t afford to eat breakfast in cafes, spend evenings in pubs, etc. for most, it’s an occasional treat.
Regular customers are their bread and butter (sorry 🥴) and most will be able to absorb 10% if they currently partake without much thought. Likewise, hairdressers, nail treatments, etc. anyone who would have to worry about 10% once a month or whatever is unlikely to be paying for such luxuries now.

My parents have lunch at an NT cafe most days. 10% will be neither here nor there for them.

The only person I know employed by a small business is a nursery worker, at a private nursery on the NW coast. They are already paying above NMW for levels 2 and 3 and offering completely free childcare, an huge benefit, because they can’t recruit.

Our youngest is currently in hospitality, working for a large corporate. It can easily absorb the increase.

Ha well, unfortunately, I am going to listen to the OBR. Also because the margins in the projections are not exactly narrow - at least c. £1.5 bn estimated to be raised pa vs at most £275 m estimated increased cost for the state sector. Even if one or both of these estimates is out, it is hard to see how they could be so wrong that in fact the cost to the state sector will outweigh the revenue brought in. I get that £1bn is not that much in the scheme of things, but it is still something.

OBR also discount behaviour change. The reduced numbers entering as well as those leaving. It is already happening on an anecdotal basis.
1.5 billion initial figure
One fifth pupils now exempt = 1.2 billion
10% leave = takes you well under 1 billion
Cost to state sector of now educating those kids = 375,000,000
Possible income = 500,000,000 however that's not taking into account the numbers just entering indy sector at natural break points ie Yr 5/7/11/13

This is a policy of diminishing return. Each year it will bring in less money as parents change their behaviour.
Easy to see how in 2-3 years it will bring in £0.

For many small businesses margins are tight already. Some may go under, others will survive but the majority of the extra cost will be passed on to the employees (OBR)

Why is it good that the employee ends up impacted, they meet the definition of working person do they not?

I'm self-employed & working in an industry that's already in a dire state (60 per cent of people out of work). I've been sofa surfing for 18 months trying to save money but still can't afford anywhere to live. The prices of things going up doesn't really bother me because funnily enough, when you don't have anywhere to live you can't really buy stuff anyway. If restaurant prices go up I'd spend a bit more money on eating out (necessary when you don't have a kitchen!) but it wouldn't make any real difference to me. Ditto if farm shop prices do - the weird thing about not being able to afford housing is that you could spend all your income on food if necessary.

I think the people criticising this budget are people with something to lose, and they have no idea how many people out there don't have a mortgage or buy stuff, live in an economy that offers them absolutely nothing, and really don't have anything to lose.

Whether this budget contributes to economic growth is something that as someone with two degrees in economics, I realise doesn't matter in the slightest. Our economy has been growing for most of my lifetime, and both housing affordability and availability of actual non-upf food, probably the two things that really matter most to people's ability to have a good life, have worsened over that time, so why on earth would we want more of the same?