What will life be like under Reform?

[Easipeelerie]

I have accepted the likelihood of the next government being Reform. I don’t think the government after that will necessarily be Reform. But in the 4 Reform years, what do people think life will be like for the different groups in our country? Will we see very immediate changes?

Employers NI increase. That creates a downward pressure on take-home salary, since for a given cost to the employer, the employee takes home less. There's no difference between increasing employer NI versus employee NI. It's all just tax taken out of the total amount employers pay. Certainly not after the first year - admitedly employers can't suddenly change salaries to reflect thecextra cost - but we have 3.2% inflation rate, so it catches up quickly. All employers have to do is give a below-inflation rise the following year, to reach the same balance.

The NI changes were shocking, by the way. Especially huge impact on low earners They were done at the same time as the NMW increase, for camouflage. Let's cut through the Labour propaganda to see how that big NMW improvement panned out, alongside the sneaked-in NI increase...

NMW for adults over 21 went up: from £11.44 to £12.21
NI Increased from: from 13.8% to 15%
NI Threshold change: from £9100 to £5000

This increased the cost to the employer for a full time NMW worker by 10% - which predictably meant unemployment rose: especially at entry-level, where the reduced threshold bit hardest. Interestingly, people also report that salaries just above NMW didn't get inflationary pay rises (so effectively salary dropped) as employers tried to balance costs and not go out of business. Side effects...

But of that 10% (£2388) extra cost to the employer, the NMW worker only got a a 5.5% raise - £1021
Whereas HMRC got a 34% raise - £1367!!

HMRC got more of the extra money than the employees - not only in percentage terms but even in absolute terms!! And they had the cheek to trumpet that as a win for the NMW employees. Employees who took the hit in job losses, for less than half the reward.

That is fucking Houdini-level dishonesty and gaslighting.

Full time NMW pre-Reeves: £21,049
Employer NI: £1649
Employer total cost: £22698
Employee gets: £18,674
HMRC gets: £4024

Full time NMW post-Reeves: £22,466
Employer NI: £2620
Employer total cost: £25086
Employee gets: £19,695
HMRC gets: £5391

You must be very lucky, since Cambridgeshire isn't looking great in this article (Month-long GP waits soar under Labour)

www.telegraph.co.uk/gift/9f2d2ec1530f8db6

That looks like increased take home for employees to me. You think this is bad. We live in a country where employers are subsidised daily via UC, which is corporate welfare. Why are you not directing your ire at that?

Did you read it properly? Take home increased by 5%, but the cost to the employer increased by 10%.

Do you honestly think that the cost to the employer is irrelevant to the employee?!?

Oh sweet, summer child. Think about consequences just a little bit deeper.

The post was in answer to @blossomtoes question "What tax “against salaries” has Reeves raised"

She seems to have fallen for the Labour propaganda too that the extra tax (against salaries) is just something those nasty employers have to pay. Won't affect the employees at all...

🙄

In Europe employer contributions are substantially higher than they are in the UK. This is simply a way to secure better pensions for millions of workers.

We simply can't keep kicking the can down the road because we can't face tax increases now. Social care, pensions, sickness benefits all have to be paid for and sweeping the problem under the carpet like the Tories did won't help us.

I do disagree with state support subsiding low earnings, btw. Started with Gordon Brown's tax credits and has been enormously damaging.

But I think the correction is to go back to welfare being below earnings - genuinely a safety net rather than a lifestyle alternative - not add welfare to earnings. There's complexity around part time working, but it's not hard to fix.

And I include housing support in that: it shouldn't be added to benefits: non-benefit-claimants don't get extra money for housing! Or for extra children. Two tier economics, completely distorting personal behaviour as well as rental prices for everyone.

Well it’s not a tax on employees’ salaries and it’s disingenuous to maintain that it is.

I agree. I'd support an enforced employer-contribution-funded (mandatory percentage) Direct Benefit pension - like many countries' second pillar pensions.

Although I'm pretty suspicious that it would just be appropriated by the government and given to other people. Perhaps by offsetting it against the currently-universal state pension...

It absolutely is! There's no actual difference. It's directly based on the employees salary.

You don't see your gross salary, with paye. Can you give me one actual difference between the tax being taken as Employers NI vs Employees NI. One single practical difference in the end result??

(after about 6 months. I have said that levying it on employers means you get a lead-time)

Can you give me one actual difference between the tax being taken as Employers NI vs Employees NI.

The bottom line on the employees’ payslip.

The Polish government appropriated their 2nd pillar pensions
https://pensionsandsavings.com/polish-pension-confiscation-how-can-we-protect-private-pensions/

It's pretty sad, but I absolutely don't trust our government not to do the same or worse, when the chips are down and they've run out of money (which I expect in the mid-future). I completely understand people (including a Polish friend, unsurprisingly) who avoid pension savings despite the tax advantages, and prefer to keep their savings outside the government's reach.

Not after the first non-inflationary pay rise, where the employer has balanced their costs

Why do you always use that patronising lecturing tone? Are you an actual economist?

Me, I choose to think the interests of the employees are more important than those of our corporate welfare recipients.

The two are intertwined - that's the whole point.

Healthcare being under an insurance based program. There are US insurance companies ready to roll out there policies in UK

for anyone with a condition, the insurance won’t cover pre existing condition - so asthma, diabetes type 1 & 2, arthritis which are very prevalent in the population - they’ll be stuffed

Of course they are. But you have to prioritise.

Your idea of making benefits a safety net seems to lack thought. You cannot stop top up benefits until wages are enough to live on. Benefits are already very low here. There isn't an easy way to break this cycle, but it should be obvious that cutting the income of low paid workers by removing UC top ups is going to be a disaster.

NHS gone
Many essential/key workers gone
Protected characteristics gone from law
No help or support for disability
Environmental protection gone
Human rights scraped
Even more open racism, sexism, homopbia, etc
The rich will continue to get richer, the poor will be even worse off, and new scapegoats for the situation will be manufactured

Why do I use that tone? I guess because I've got totally fed of of the hectoring and lecturing from the Left - their assumption that they're the good guys, even as they destroy the country.

People on this thread (there's history) have been very rude to me in pile-ons, whilst I was always polite and tried to just explain ideas sensibly. Eventually (after about a year) the frustration built up and I decided that there was no point in being polite. Explanations just resulted in insults, so perhaps being similarly aggressive back would cut through their illusion of being valiant knights in shining armour (even as their ideas destroy our future.)

I guess I've extended that to all posters pushing left wing ideas which I consider destructive and wrong. But to be fair, you're not being like that, so apologies and I shall moderate my tone.

I think you raise an important point here on breaking the circle.

Employers will not raise wages whilst they are being subsidised by universal credits. Because they believe that they will able to get someone else to do that job with UC or failing that import Labour from abroad and use a migrant worker.

At the same time if you remove UC then will employers raise wages to compensate for this? Or will they just hire more migrant labour? And even if they do increase wages then this will take a period of time that equates to a period of time where the worker suffers serious financial hardship waiting for wages to catch up.

And the vindictiveness of the Left! OMG! I have no idea how they ever had the gall to call the Conservatives the 'nasty party'. Total projection.

Conservatives may do things you don't like, but it's always because they think it will be effective - never out of spite.

Whereas the Left just bask in the harm they deliberately cause their class enemies, with no actual benefit except spite. And we're having to live through that now.

So you will have to tolerate my reaction to that.

Just as I have to tolerate people still ranting about Thatcher - 35 years after she left office - because I recognise it as a deeply felt reaction

You would get more of a discussion if you stopped going on about The Left and socialism and see them as the enemy.

If you dismiss all Labour's policies on the basis that they are Labour then there isn't much to discuss.

I agree. It would need to be done slowly and it would absolutely have to be paired with significant restrictions on immigration.

We're currently stealing from the future: immigrants will work for low pay because there's a long term pay off. They get citizenship for themselves and their extended family, which costs the UK an average of £200k per low-skill immigrant or dependent over their lifetime.

That extra reward (citizenship) means that with loose immigration policy, the market doesn't adjust to sensible salaries.

The problem is that if we reduce immigration, what people will experience is yet more reduction in standard of living across the UK - as we reduce what we are stealing from the future. And that's hard for politicians to sell. It's very, very convenient for PMs (of all parties) to do a sleight of hand to steal more from the future!

It's easier to see where we should get to than how to get there. But that's the only way to get to better wages sustainably.

Unfortunately, the government isn't even trying to do this. Welfare isn’t just increasing: it's increasing at an ever-faster rate.

Surely even Left wing people can see that this isn't sustainable?

Have to name it to argue against it. Socialism is a thing. 'The Left' is very much a thing in this country, and is actually more identity politics, rather than just economic views. And I find both utterly destructive.

I do only dismiss Labour's policies when I think they're wrong. It's just that that's most of them. Happy to discuss why they're wrong - the obvious consequences - and what would be better.

But I also don't forget that Labour declared war on me, with populist rabble rousing against me and my family. I feel about them much as many Left wing people feel about Thatcher.