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Savings and Investments thread
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I also think there is a bit of fundamental misunderstanding of what UC is and how it works. It's not about of work benefit but a system that applies to everyone from out of work to a certain earnings threshold. It comes across like a lot of people picture it as the dole queue of old. It's nothing like that at all. A massive part of its system design was to be a live system that can take into account changes in work and insecure work. A large number of people on it are in seasonal, irregular or insecure work. One month they will get enough hours (likely from multiple jobs) and meet the earnings threshold to not need support another month they might not. That's the beauty of the system. Only supports people when they need it.2
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Dont get me started on this one! 100% lots of children are coming to school hungry, but in my learned experience (my wife’s classes the last few years), 90% of that has naff all to do with affordability but choice as to where the money is spent.cantersaddick said:
Poverty is defined as living in a household earning less than half the median income. But that's not the full picture. It's actually a measure of spread. So what you need to do is track what is happening to the median (it has barely moved for a decade), how many people are below the threshold, how far from the threshold they are and what proportion is vulnerable groups (children, elderly disabled etc.). All of them have consistently worsened for more than a decade. I produced the 2015/16 child poverty stats so I did know this stuff inside out.valleynick66 said:
Define 'poverty' though. I'm not sure we all have the same interpretation of that word. As i don't believe all those to benefit from the cap changes are currently unable to food & clothe their children/ themselves.cantersaddick said:
Agree with that. My point is its a minority who don't want to work. And that work alone is not always enough now, as demonstrated by the large numbers of people in work still in poverty orneeding state support.blackpool72 said:
Can't argue with a lot of what you are saying.Leuth said:I have nothing but respect for those who have grafted to get where they are. I too believe in working to live, and there being dignity in all work.
What I'm saying is that even these grafts are less available now. You don't just get a job at a market or a shift at the paper mill by walking along and asking (I got a summer job at Brewer's once by doing this but that was in 2005). Job applications are a terrible whirl of automated responses and rejection. If you still somehow secure a dogsbody job it won't earn enough to cover much of anything (my brother is ongoingly experiencing this and only stays out of trouble cos he lives with our folks aged nearly 35).
Fair play to those of you who grafted, but I would say, you had the clarity of knowing graft would help you prevail. Young people now don't know that, I'd argue
I have a daughter of 35 and a son who's 33 and im well aware of what it's like nowadays.
My point was that in order to get anywhere in life you have to be prepared to work for it regardless of when you were born.
As for whether they can feed their children here is a selection of articles from the last few year covering research into this exact issue. Children going to school hungry is the biggest single determinant of educational outcomes and therefore future participation in the labour market. Not doing thisbis the definition of false economy.
Ive given up moaning at my wife for buying breakfast for the class, whilst parents of said children are turning up in more expensive clothes than I’d buy, the latest iPhone and the kids get driven to school. One dad goes straight from school drop off to tescos to get his beers and fags for the day. He’s not even quiet about it, but don’t worry, I’ll feed your kid and buy them a coat (plus the 30 books that turned up from Amazon)……. Rant over, time for me to duck out of this conversation before I blow a gasket!!0 -
Just going back to this from yesterday. Its very possible to fund services and reduce the tax burden on working people and small businesses. We just need to shift our attention from those who are struggling more than ourselves to those large exploitative companies who are sucking the life out of our economy and society.cantersaddick said:
I completely agree on the bit in bold. Where I disagree is that its expenditure thats the problem. I think what we need to do is redress the balance of where tax comes from.Rob7Lee said:cantersaddick said:
I completely agree that the social contract has broken down. The other side to that social contract is low pay. the minimum wage was effectively brought in as part of that social contract to say that if you worked 40 hours a week you would be able to provide for yourself and your family and not be in poverty. Unfortunately that side of the social contract has also broken down. We now have massive and growing in work poverty. Thats a real issue and for me is the main factor in why welfare has exploded. Its not that the safety net is too high its that we have had a whole generation of wage suppression which means those in work also need the safety net. Yes there will be a minority who choose not to work but thats not because the safety net is too high but because the pay is too low (otherwise they wouldn't be in poverty).Carter said:
Its a fair chunk of both in my eyesbobmunro said:Rob7Lee said:
£1100 rentcantersaddick said:
What housing costs assumption did you use in this example? was it a single parent family or 2 parent, what ages are the children? I think some pretty unrealistic and extreme assumptions will have been needed to get these figures. E.g. I think all 5 of the kids will need to be below school age and housing costs would need to be extreme.Rob7Lee said:I saw it on Twitter and immediately called bull, I then put the info myself into a benefit checker (entitled.co.uk if anyone wants to have a go and depress themselves!)
Clearly someone had worked out what the absolute maximum you could get based on circumstance.
£4,287 in benefits (made up of UC and Child allowance and council tax help). £11k a year on minimum wage/16 hours each gives you £6,120 a month.
Someone also made the point that if you also suffer with 'anxiety' (probably from having 5 kids and so much money) you can also get a brand new car on Mobility although I'm not convinced it's that simple!!
I'll get my coat......... someone turn the lights out on the way out
Not saying its impossible but its gonna be extremely unlikely to get numbers like this.
And it was discussed on the general things that annoy you thread a couple of weeks ago but anxiety alone is not enough for motability. It Needs a few other conditions/criteria to be met alongside that to become eligible.
Dual parent (hence two x minimum wage salaries x 16 hours each per week)
All school age (5-15).
I don't know the full calculation and exactly what it is made up from as it's an online calculator as linked to above.
As I say, I'm sure this is based on an extreme, but even still there should be no circumstances really where a couple with 5 children are working 16 hours a week each on minimum wage and are getting the equivalent of north of a £100k salary.
!00% agree. The benefits system is/was designed as a safety net - and those in genuine need should be supported. What it should never be is an alternative lifestyle choice, which it is for some. That's the fault of the system, not the individuals.
Just because you can do something definitely doesn't always mean you should
Being out of work is more about lack of purpose, structure and drive. I'm not talking about high performers or over achievers. Not doing that will absolutely wallop your mental health
For my part, its the societal contract, I don't mind paying tax what I can't abide is how that money is wasted and given to people who have chosen not to take part in their end of the societal contract
https://www.health.org.uk/evidence-hub/money-and-resources/poverty/in-work-poverty-trends- 65% of children and working-age adults in poverty in 2023/24 lived in families where at least one adult was working part-time or more, up from 56% in 2012/13 and 44% in 1996/97.
- 18% of children and working-age adults in poverty in 2023/24 lived in families where all adults were working and at least one adult was working full-time (referred to here as high work intensity families), which is up from 13% in 2012/13 and 9% in 1996/97.
I don't actually think Minimum wage is the real issue. We are taxing ourselves as a country to the bottom.
Go back a few pages where a lifer talked about closing their business. Now I don't know the ins and outs of that business or the numbers involved, but a clear indication was given that the increased staff costs was a real issue (the increased Min Wage, increased NI levels, no doubt things like compulsory pension contributions also).
In my view the long and short is government expenditure is simply too high. The country cannot continue to spend what it does, it needs to spend considerably less as a %. Of course there are 101 ways that can happen and of course we need to protect the most needy/vulnerable. But unless we have a grown up conversation about that, we are on a race to the very bottom.
Taking your point on minimum wage, on a 40 hour week that will be £26,500 roughly come April. Your saying that isn't enough to live on and remain outside 'poverty' - well from that amount the government are taking £4k in tax and national insurance. Why are we taxing these people who earn the absolute bare minimum? And as we know with the freeze on tax bands and the tax free amount for about another 6 years, that will only get worse assuming minimum wage continues to increase by at least inflation. By the time we get to 2031 the bands won't have really changed for 12 years, is it any wonder the lower paid (in particular but by no means exclusively) are worse off? The tax free allowance was £11k in 2016, it's now 12,570. By simple inflation that should be £15,300 and on an increase of 3.5% per annum that should be £19,000 by 2031.
We can either make some tough decisions, or we can continue the race to the bottom, which compounds year after year. I fear if we continue as is for another few years we will be past the point of it being possible to resolve, if we aren't already there.
I've all but given up that Great Britain will resolve any of these issues in my lifetime, which is why as every day passes it's becoming more and more likely I'll retire early and leave the country and my advice to my two daughters is to do the same.
My brother in law is a small business owner, he has a bespoke house building and barn conversion company. He has for years said similar things to what you're saying here and also things like the minimum wage is too high. I persuaded him to spend some time sat with the public accounts of the national large house builders (with multinational ownership structures and parent companies) in the UK and look at their tax. He realised that he was paying as a proportion of both revenue and profit roughly double the rate of tax they are. How is that small business supposed to compete. My family come from farming - a number of them campaign and leaflet for reform. I got one of them to sit down with the published supermarket accounts and they found a similar story. How are farms meant to survive when 98% of the profit on food goes to large supermarkets with multinational ownership structures with massive oligopoly power and only 2% left for farmers, processors and distributors.
This is why we need to move the tax burden both from lower-middle earners and small businesses to large corporations and multi nationals and a small number of very wealthy individuals.
How? Well I've talked in the last few weeks about how I would do this. I have talked about the medicines pricing mechanism and applying that to other sectors like energy, I would also take the model of the digital services tax and go sector by sector and apply an operations tax in the same way on companies whose profits are based overseas. I'd return the bank levy to its post 2008 banking crisis level rather than the version we have now which is massively watered down. Remove the private equity tax relief. Other things like bringing back the investment income surcharge on high amounts, and I still believe in a wealth tax (but on much higher levels - progressive from 1% over £50/100m up to 3% over a billion) plus an exit tax. Possibly moving CGT rates slightly towards income tax rates (which would be coming down a little too). I've probably (definitely) missed a couple other things I've talked about recently.
If we did that we would be able to massively raise the thresholds of income tax and likely reduce the rates too, as well as reduce the burden on small businesses. More cash in peoples pockets means due to the Marginal Propensity to Consume that money is more likely to be spent rather than saved or moved abroad, the velocity of money is also higher at the lower end so you're more likely to get the multiplier effect and so this should boost growth.
I fundamentally believe it is possible to both reduce the tax burden on people earning under say 60K and small businesses as well as fund public services.
It needs a government willing to take on the oligopoly power of big business. It wont be this one as they are 60% funded by those multinationals. The Tories and reform even more so. The only party not funded by them are the Greens.1 -
Not sure if that's true & what do you mean by "supports people when they need it"cantersaddick said:I also think there is a bit of fundamental misunderstanding of what UC is and how it works. It's not about of work benefit but a system that applies to everyone from out of work to a certain earnings threshold. It comes across like a lot of people picture it as the dole queue of old. It's nothing like that at all. A massive part of its system design was to be a live system that can take into account changes in work and insecure work. A large number of people on it are in seasonal, irregular or insecure work. One month they will get enough hours (likely from multiple jobs) and meet the earnings threshold to not need support another month they might not. That's the beauty of the system. Only supports people when they need it.
I put a few figures through the "Entitled to" calculator. Single person with 3 secondary school kids. Earnings of £25k pa with £1000pm rent (in council house). Answer was pretty amazing. Almost £2k pm in benefits - £1619 pm UC & £268pm Child benefit. Seeing as that is non taxable that works out at almost the same income as their wage......and gives their total net income at c £3800pm.
I was another another forum & someone had worked out that people earning over the £60k CB limit were worse off that someone on £30k ish income & then the same in UC & CB. Crazy that anyone earning over £60k has to start paying back CB but if on benefits its untouched at that level.
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I'm sure there is some of that. But that shouldnt detract from the very real struggles for others. I would make school breakfasts and lunches free for all to avoid the entire issue. If the services are provided for free then less is likely needed elsewhere.Rob7Lee said:
Dont get me started on this one! 100% lots of children are coming to school hungry, but in my learned experience (my wife’s classes the last few years), 90% of that has naff all to do with affordability but choice as to where the money is spent.cantersaddick said:
Poverty is defined as living in a household earning less than half the median income. But that's not the full picture. It's actually a measure of spread. So what you need to do is track what is happening to the median (it has barely moved for a decade), how many people are below the threshold, how far from the threshold they are and what proportion is vulnerable groups (children, elderly disabled etc.). All of them have consistently worsened for more than a decade. I produced the 2015/16 child poverty stats so I did know this stuff inside out.valleynick66 said:
Define 'poverty' though. I'm not sure we all have the same interpretation of that word. As i don't believe all those to benefit from the cap changes are currently unable to food & clothe their children/ themselves.cantersaddick said:
Agree with that. My point is its a minority who don't want to work. And that work alone is not always enough now, as demonstrated by the large numbers of people in work still in poverty orneeding state support.blackpool72 said:
Can't argue with a lot of what you are saying.Leuth said:I have nothing but respect for those who have grafted to get where they are. I too believe in working to live, and there being dignity in all work.
What I'm saying is that even these grafts are less available now. You don't just get a job at a market or a shift at the paper mill by walking along and asking (I got a summer job at Brewer's once by doing this but that was in 2005). Job applications are a terrible whirl of automated responses and rejection. If you still somehow secure a dogsbody job it won't earn enough to cover much of anything (my brother is ongoingly experiencing this and only stays out of trouble cos he lives with our folks aged nearly 35).
Fair play to those of you who grafted, but I would say, you had the clarity of knowing graft would help you prevail. Young people now don't know that, I'd argue
I have a daughter of 35 and a son who's 33 and im well aware of what it's like nowadays.
My point was that in order to get anywhere in life you have to be prepared to work for it regardless of when you were born.
As for whether they can feed their children here is a selection of articles from the last few year covering research into this exact issue. Children going to school hungry is the biggest single determinant of educational outcomes and therefore future participation in the labour market. Not doing thisbis the definition of false economy.
Ive given up moaning at my wife for buying breakfast for the class, whilst parents of said children are turning up in more expensive clothes than I’d buy, the latest iPhone and the kids get driven to school. One dad goes straight from school drop off to tescos to get his beers and fags for the day. He’s not even quiet about it, but don’t worry, I’ll feed your kid and buy them a coat (plus the 30 books that turned up from Amazon)……. Rant over, time for me to duck out of this conversation before I blow a gasket!!0 -
Interesting debate on here over the last few pages and no easy answers.
I know my wife and I would be regarded as being amongst those who politicians like to term as having the broadest shoulders. I appreciate we are fortunate but not necessarily lucky. It required decades of hard work, long hours and sacrifices on the part of both of us, and also making sensible career decisions.
I absolutely agree with a progressive taxation system, the need for welfare and benefits to provide a safety net for those most in need. I also agree with the principal of a free at the point of service NHS, but I think that increasingly looks problematic. Successive governments have poured billions of extra pounds into the NHS but despite the efforts of brilliant doctors and nurses, it appears that is never enough.
We have sons in their 30s and 40s who are equally hard working but haven’t necessarily gone into high paying careers, have working partners, are paying mortgages and bringing up our grandchildren. So I do worry about how the next few years will pan out and impact them in the current UK environment.
Clearly we need to get to grips with our pathetic rate of growth and productivity in this country and need to attract more private investment. As someone said, at the end of the day, it’s primarily the private sector that generates the taxes (be it through corporation tax, VAT, NI or their own employee income taxes/NI) that provides the money the government has to play with it (and no I haven’t forgotten that public sector workers have to pay tax and NI).
I am afraid it is not as simple as adding supplemental tax rates on specific industries or service sectors. Multinational corporations will always have a portfolio of investment proposals to consider over a number of countries and they will make their decisions based on the best economics. My former employers have just announced the impending closure of a UK plant citing a lack of a competitive future for the site due to the UK’s economic and policy environment.
Similarly private entrepreneurs will take their money elsewhere once they start to see a tipping point, so the frequent references to potential wealth taxes are not helping the UK. I read an article last week that named 8 billionaires that had either departed the UK in the last year, or who had announced their imminent departure. My wife is aware of 2 senior execs from the UK FTSE 100 company she used to work for who have suddenly felt it important that they relocate from their London HQ to the UAE because their Middle East operations are becomingly more important.
On the welfare side, we have to be realistic about what can be afforded in a low growth environment. There must be efficiencies. I am certainly not saying we want Elon Musk to be brought in but I have a concern it will be difficult for the public service to self-regulate with regards to efficiencies. That would be like turkeys voting for Christmas. Just as an aside I read an article that said the COVID enquiry is likely to cost in excess of £200 million - has anyone done a cost benefit analysis?
I don’t have the answers, but I am afraid political dogma of whichever hue is often the problem when it comes to solutions and when you see politicians squirming to answer questions honestly it just demonstrates why we won’t get out of this easily.
Sorry for the length of this but at least I feel better for adding my two pennies worth.
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Which bits not true? I was talking in the context of insecure, irregular or seasonal work. People can automatically drop in and out of needing support based on their monthly earnings from "live" data. It enables people to work sometimes even if its not regular or guaranteed, without being fully kicked off the system and having to reapply (a process that can take months) the following month. Essentially your "live" earnings are taken into account for the previous month and that determines your entitlement. If you earn enough your entitlement that month will be zero, if you don't then your entitlement is calculated off what you earn. So a massive number of people drop in and out of support based on insecure, irregular or seasonal work.golfaddick said:
Not sure if that's true & what do you mean by "supports people when they need it"cantersaddick said:I also think there is a bit of fundamental misunderstanding of what UC is and how it works. It's not about of work benefit but a system that applies to everyone from out of work to a certain earnings threshold. It comes across like a lot of people picture it as the dole queue of old. It's nothing like that at all. A massive part of its system design was to be a live system that can take into account changes in work and insecure work. A large number of people on it are in seasonal, irregular or insecure work. One month they will get enough hours (likely from multiple jobs) and meet the earnings threshold to not need support another month they might not. That's the beauty of the system. Only supports people when they need it.
I put a few figures through the "Entitled to" calculator. Single person with 3 secondary school kids. Earnings of £25k pa with £1000pm rent (in council house). Answer was pretty amazing. Almost £2k pm in benefits - £1619 pm UC & £268pm Child benefit. Seeing as that is non taxable that works out at almost the same income as their wage......and gives their total net income at c £3800pm.
I was another another forum & someone had worked out that people earning over the £60k CB limit were worse off that someone on £30k ish income & then the same in UC & CB. Crazy that anyone earning over £60k has to start paying back CB but if on benefits its untouched at that level.0 -
I’ve had to self exclude myself from that site, so depressing. If anyone thinks we’ve even remotely got the benefit system right needs to give their head a wobble, and some are calling for more 🙈 the worlds gone mad.golfaddick said:
Not sure if that's true & what do you mean by "supports people when they need it"cantersaddick said:I also think there is a bit of fundamental misunderstanding of what UC is and how it works. It's not about of work benefit but a system that applies to everyone from out of work to a certain earnings threshold. It comes across like a lot of people picture it as the dole queue of old. It's nothing like that at all. A massive part of its system design was to be a live system that can take into account changes in work and insecure work. A large number of people on it are in seasonal, irregular or insecure work. One month they will get enough hours (likely from multiple jobs) and meet the earnings threshold to not need support another month they might not. That's the beauty of the system. Only supports people when they need it.
I put a few figures through the "Entitled to" calculator. Single person with 3 secondary school kids. Earnings of £25k pa with £1000pm rent (in council house). Answer was pretty amazing. Almost £2k pm in benefits - £1619 pm UC & £268pm Child benefit. Seeing as that is non taxable that works out at almost the same income as their wage......and gives their total net income at c £3800pm.
I was another another forum & someone had worked out that people earning over the £60k CB limit were worse off that someone on £30k ish income & then the same in UC & CB. Crazy that anyone earning over £60k has to start paying back CB but if on benefits its untouched at that level.0 -
I'm a few days behind, but in case not already posted -
Premium Bonds rates could rise after Rachel Reeves revealed she would need another £1bn from savers for the Treasury’s coffers.
The Chancellor said National Savings & Investments (NS&I), which administers Premium Bonds and other savings products, would be required to raise between £13bn and £17bn from savers this year, rather than the £12bn target it had previously been set.
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And that’s my point - poverty is an emotive word.Rob7Lee said:
Dont get me started on this one! 100% lots of children are coming to school hungry, but in my learned experience (my wife’s classes the last few years), 90% of that has naff all to do with affordability but choice as to where the money is spent.cantersaddick said:
Poverty is defined as living in a household earning less than half the median income. But that's not the full picture. It's actually a measure of spread. So what you need to do is track what is happening to the median (it has barely moved for a decade), how many people are below the threshold, how far from the threshold they are and what proportion is vulnerable groups (children, elderly disabled etc.). All of them have consistently worsened for more than a decade. I produced the 2015/16 child poverty stats so I did know this stuff inside out.valleynick66 said:
Define 'poverty' though. I'm not sure we all have the same interpretation of that word. As i don't believe all those to benefit from the cap changes are currently unable to food & clothe their children/ themselves.cantersaddick said:
Agree with that. My point is its a minority who don't want to work. And that work alone is not always enough now, as demonstrated by the large numbers of people in work still in poverty orneeding state support.blackpool72 said:
Can't argue with a lot of what you are saying.Leuth said:I have nothing but respect for those who have grafted to get where they are. I too believe in working to live, and there being dignity in all work.
What I'm saying is that even these grafts are less available now. You don't just get a job at a market or a shift at the paper mill by walking along and asking (I got a summer job at Brewer's once by doing this but that was in 2005). Job applications are a terrible whirl of automated responses and rejection. If you still somehow secure a dogsbody job it won't earn enough to cover much of anything (my brother is ongoingly experiencing this and only stays out of trouble cos he lives with our folks aged nearly 35).
Fair play to those of you who grafted, but I would say, you had the clarity of knowing graft would help you prevail. Young people now don't know that, I'd argue
I have a daughter of 35 and a son who's 33 and im well aware of what it's like nowadays.
My point was that in order to get anywhere in life you have to be prepared to work for it regardless of when you were born.
As for whether they can feed their children here is a selection of articles from the last few year covering research into this exact issue. Children going to school hungry is the biggest single determinant of educational outcomes and therefore future participation in the labour market. Not doing thisbis the definition of false economy.
Ive given up moaning at my wife for buying breakfast for the class, whilst parents of said children are turning up in more expensive clothes than I’d buy, the latest iPhone and the kids get driven to school. One dad goes straight from school drop off to tescos to get his beers and fags for the day. He’s not even quiet about it, but don’t worry, I’ll feed your kid and buy them a coat (plus the 30 books that turned up from Amazon)……. Rant over, time for me to duck out of this conversation before I blow a gasket!!It doesn’t always mean not enough cash to survive.1 -
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I get where you are coming from and that has been the messaging over the last 50 years. But, its repeating the same trickle down economics that has failed us for 50 years. Continuing tax breaks and deregulation for the large multinational corporations is what is killing small businesses and the dynamics of our economy. It is the root of our societal inequality. Continuing with the same approach that got us in this mess (or even doubling down on that approach as some want) will not get us out of it. This approach stopped bringing growth in 2008 (Actually well before that but 2008 was its death throes), even when it did bring growth the growth wasnt shared around so only benefited a few. It does not trickle down. Those traditional economic relationships do not hold in the modern world. We need to stop applying economic solutions that were designed for a more traditional economy to a modern economic world.robinofottershaw said:Interesting debate on here over the last few pages and no easy answers.
I know my wife and I would be regarded as being amongst those who politicians like to term as having the broadest shoulders. I appreciate we are fortunate but not necessarily lucky. It required decades of hard work, long hours and sacrifices on the part of both of us, and also making sensible career decisions.
I absolutely agree with a progressive taxation system, the need for welfare and benefits to provide a safety net for those most in need. I also agree with the principal of a free at the point of service NHS, but I think that increasingly looks problematic. Successive governments have poured billions of extra pounds into the NHS but despite the efforts of brilliant doctors and nurses, it appears that is never enough.
We have sons in their 30s and 40s who are equally hard working but haven’t necessarily gone into high paying careers, have working partners, are paying mortgages and bringing up our grandchildren. So I do worry about how the next few years will pan out and impact them in the current UK environment.
Clearly we need to get to grips with our pathetic rate of growth and productivity in this country and need to attract more private investment. As someone said, at the end of the day, it’s primarily the private sector that generates the taxes (be it through corporation tax, VAT, NI or their own employee income taxes/NI) that provides the money the government has to play with it (and no I haven’t forgotten that public sector workers have to pay tax and NI).
I am afraid it is not as simple as adding supplemental tax rates on specific industries or service sectors. Multinational corporations will always have a portfolio of investment proposals to consider over a number of countries and they will make their decisions based on the best economics. My former employers have just announced the impending closure of a UK plant citing a lack of a competitive future for the site due to the UK’s economic and policy environment.
Similarly private entrepreneurs will take their money elsewhere once they start to see a tipping point, so the frequent references to potential wealth taxes are not helping the UK. I read an article last week that named 8 billionaires that had either departed the UK in the last year, or who had announced their imminent departure. My wife is aware of 2 senior execs from the UK FTSE 100 company she used to work for who have suddenly felt it important that they relocate from their London HQ to the UAE because their Middle East operations are becomingly more important.
On the welfare side, we have to be realistic about what can be afforded in a low growth environment. There must be efficiencies. I am certainly not saying we want Elon Musk to be brought in but I have a concern it will be difficult for the public service to self-regulate with regards to efficiencies. That would be like turkeys voting for Christmas. Just as an aside I read an article that said the COVID enquiry is likely to cost in excess of £200 million - has anyone done a cost benefit analysis?
I don’t have the answers, but I am afraid political dogma of whichever hue is often the problem when it comes to solutions and when you see politicians squirming to answer questions honestly it just demonstrates why we won’t get out of this easily.
Sorry for the length of this but at least I feel better for adding my two pennies worth.
We already have sector specific schemes for big pharma and digital services. Those companies did not leave the UK or divert investment elsewhere - in fact in the case of the pharma sector until brexit messed up our access to the European market it actually provided an incentive for them to invest in the UK, base their R&D here and other functions as costs were written off against the scheme and so it was the most tax efficient way to invest. Energy companies will not leave the UK and their captive market if we put a similar scheme on them - in fact they will likely invest more in renewables if we make those costs a write off against the scheme. Neither will supermarkets if we put a pricing scheme on essential food items. If we put an operations tax on Starbucks like the digital services tax (still lower than than they should pay in corporation tax) then Starbucks wont leave - and any reduction in offering only leave space for a small independent to fill a gap. We were the world leader on the digital services tax when everyone said it was impossible - we should do the same to any sector meeting those conditions (small number of large companies with oligopoly power making economically excess profits).
There is absolutely the means to do this. We can tackle oligopoly power of these corporations and raise money to reduce the tax burden on small businesses and workers as well as fund public services.
More cash in peoples pockets means due to the Marginal Propensity to Consume that money is more likely to be spent rather than saved or moved abroad, the velocity of money is also higher at the lower end so you're more likely to get the multiplier effect and there you have your much needed growth.1 -
If posters on here are anything to go by people will still plough their money in even though the returns are going down. BOE expected to reduce interest rates on 18th Dec so I expect the prize money to go down rather than up. More money will come in post April 2027 when the Cash ISA' limit will reduce. People are drawn in by the security not by the returns.Covered End said:I'm a few days behind, but in case not already posted -Premium Bonds rates could rise after Rachel Reeves revealed she would need another £1bn from savers for the Treasury’s coffers.
The Chancellor said National Savings & Investments (NS&I), which administers Premium Bonds and other savings products, would be required to raise between £13bn and £17bn from savers this year, rather than the £12bn target it had previously been set.
0 -
I am afraid unless other countries adopt the same approach you are proposing for the UK, multinationals will, and in some cases, are, prioritising investment away from the UK. I speak from experience. They may not exit completely for various reasons but they will spend elsewhere on new projects where the economics are more attractive. But good luck in the fight against capitalism.cantersaddick said:
I get where you are coming from and that has been the messaging over the last 50 years. But, its repeating the same trickle down economics that has failed us for 50 years. Continuing tax breaks and deregulation for the large multinational corporations is what is killing small businesses and the dynamics of our economy. It is the root of our societal inequality. Continuing with the same approach that got us in this mess (or even doubling down on that approach as some want) will not get us out of it. This approach stopped bringing growth in 2008 (Actually well before that but 2008 was its death throes), even when it did bring growth the growth wasnt shared around so only benefited a few. It does not trickle down. Those traditional economic relationships do not hold in the modern world. We need to stop applying economic solutions that were designed for a more traditional economy to a modern economic world.robinofottershaw said:Interesting debate on here over the last few pages and no easy answers.
I know my wife and I would be regarded as being amongst those who politicians like to term as having the broadest shoulders. I appreciate we are fortunate but not necessarily lucky. It required decades of hard work, long hours and sacrifices on the part of both of us, and also making sensible career decisions.
I absolutely agree with a progressive taxation system, the need for welfare and benefits to provide a safety net for those most in need. I also agree with the principal of a free at the point of service NHS, but I think that increasingly looks problematic. Successive governments have poured billions of extra pounds into the NHS but despite the efforts of brilliant doctors and nurses, it appears that is never enough.
We have sons in their 30s and 40s who are equally hard working but haven’t necessarily gone into high paying careers, have working partners, are paying mortgages and bringing up our grandchildren. So I do worry about how the next few years will pan out and impact them in the current UK environment.
Clearly we need to get to grips with our pathetic rate of growth and productivity in this country and need to attract more private investment. As someone said, at the end of the day, it’s primarily the private sector that generates the taxes (be it through corporation tax, VAT, NI or their own employee income taxes/NI) that provides the money the government has to play with it (and no I haven’t forgotten that public sector workers have to pay tax and NI).
I am afraid it is not as simple as adding supplemental tax rates on specific industries or service sectors. Multinational corporations will always have a portfolio of investment proposals to consider over a number of countries and they will make their decisions based on the best economics. My former employers have just announced the impending closure of a UK plant citing a lack of a competitive future for the site due to the UK’s economic and policy environment.
Similarly private entrepreneurs will take their money elsewhere once they start to see a tipping point, so the frequent references to potential wealth taxes are not helping the UK. I read an article last week that named 8 billionaires that had either departed the UK in the last year, or who had announced their imminent departure. My wife is aware of 2 senior execs from the UK FTSE 100 company she used to work for who have suddenly felt it important that they relocate from their London HQ to the UAE because their Middle East operations are becomingly more important.
On the welfare side, we have to be realistic about what can be afforded in a low growth environment. There must be efficiencies. I am certainly not saying we want Elon Musk to be brought in but I have a concern it will be difficult for the public service to self-regulate with regards to efficiencies. That would be like turkeys voting for Christmas. Just as an aside I read an article that said the COVID enquiry is likely to cost in excess of £200 million - has anyone done a cost benefit analysis?
I don’t have the answers, but I am afraid political dogma of whichever hue is often the problem when it comes to solutions and when you see politicians squirming to answer questions honestly it just demonstrates why we won’t get out of this easily.
Sorry for the length of this but at least I feel better for adding my two pennies worth.
We already have sector specific schemes for big pharma and digital services. Those companies did not leave the UK or divert investment elsewhere - in fact in the case of the pharma sector until brexit messed up our access to the European market it actually provided an incentive for them to invest in the UK, base their R&D here and other functions as costs were written off against the scheme and so it was the most tax efficient way to invest. Energy companies will not leave the UK and their captive market if we put a similar scheme on them - in fact they will likely invest more in renewables if we make those costs a write off against the scheme. Neither will supermarkets if we put a pricing scheme on essential food items. If we put an operations tax on Starbucks like the digital services tax (still lower than than they should pay in corporation tax) then Starbucks wont leave - and any reduction in offering only leave space for a small independent to fill a gap. We were the world leader on the digital services tax when everyone said it was impossible - we should do the same to any sector meeting those conditions (small number of large companies with oligopoly power making economically excess profits).
There is absolutely the means to do this. We can tackle oligopoly power of these corporations and raise money to reduce the tax burden on small businesses and workers as well as fund public services.
More cash in peoples pockets means due to the Marginal Propensity to Consume that money is more likely to be spent rather than saved or moved abroad, the velocity of money is also higher at the lower end so you're more likely to get the multiplier effect and there you have your much needed growth.1 -
I just caught sight of this - it may come to nothing, but more madness may be on the way...
+++
HM Revenue and Customs (HMRC) will penalise savers who put cash in stocks and shares Isas to escape Labour’s savings crackdown.
Rachel Reeves announced on Wednesday that the cash Isa limit would be cut to £12,000 for under-65s in an effort to boost investment in UK stocks and shares.
But the tax authority said savers who place cash in a stocks and shares Isa will face a charge under new legislation from April 6 2027.
HMRC has also revealed it plans to ban “cash-like” investments from being held in stocks and shares Isas, in the most dramatic shake-up to Isa eligibility rules in recent years.
Transfers from a stocks and shares or innovative finance Isa into a cash Isa will be banned under the new rules.
It is currently unknown how HMRC will determine whether an investment is “cash-like”, although the tax authority has confirmed in its savings newsletter that a “test” will be developed in consultation with the financial industry.It raises concerns that investments such as money market funds may be effectively banned from stocks and shares Isas. These funds, which aim to offer a slightly higher return than cash at low risk, are often used by investors who are seeking new opportunities to buy stocks.
There is a risk that even short-dated bonds might be penalised by the taxman, which includes UK government debt and the most stable company debt across the FTSE 100, as these are often referred to as “cash-like” investments for their low risk.
The move comes in the wake of changes made in Rachel Reeves’s Budget, which will create a two-tiered Isa system based on cash allowances.
Savers under the age of 65 will be limited to a £12,000 per year allowance for their cash Isa or face punishment, while savers aged 65 and over will retain their full £20,000 allowance.
Jason Hollands, of stockbroker Bestinvest, said the move amounted to “yet another stealth tax”.
He said: “While it is no surprise they are going to take action, levying a charge on cash held within stocks and shares Isas is yet another stealth tax that will impact genuine investors who sometimes decide to park money in cash for a period of time awaiting investment, or because they are nervous about the market environment.
“The ‘tests’ to determine whether eligible investments are ‘cash-like’ will throw doubt about access to money market funds within stocks and shares Isas and could even bring short-dated bonds into question. More uncertainty ahead.”
Brian Byrnes, of savings provider Moneybox said: “Isas are popular among UK savers because they’re known for being simple and reliable.
“Any change needs to preserve that simplicity and avoid any additional complexity which will only lead to confusion.”
Mr Byrnes added: “Charging interest on ‘cash-like’ holdings inside a stocks & shares ISA begs the question: can this still be labelled as ‘tax-free’ growth?”
A Government spokesperson said: “We will introduce rules to avoid circumvention of the new cash limits on Isas and will consult with Isa industry stakeholders before doing so.”
0 -
You can say that but in the examples given we did this and they didn't leave, in fact it led to inwards investment. And other countries did follow suit.robinofottershaw said:
I am afraid unless other countries adopt the same approach you are proposing for the UK, multinationals will, and in some cases, are, prioritising investment away from the UK. I speak from experience. They may not exit completely for various reasons but they will spend elsewhere on new projects where the economics are more attractive. But good luck in the fight against capitalism.cantersaddick said:
I get where you are coming from and that has been the messaging over the last 50 years. But, its repeating the same trickle down economics that has failed us for 50 years. Continuing tax breaks and deregulation for the large multinational corporations is what is killing small businesses and the dynamics of our economy. It is the root of our societal inequality. Continuing with the same approach that got us in this mess (or even doubling down on that approach as some want) will not get us out of it. This approach stopped bringing growth in 2008 (Actually well before that but 2008 was its death throes), even when it did bring growth the growth wasnt shared around so only benefited a few. It does not trickle down. Those traditional economic relationships do not hold in the modern world. We need to stop applying economic solutions that were designed for a more traditional economy to a modern economic world.robinofottershaw said:Interesting debate on here over the last few pages and no easy answers.
I know my wife and I would be regarded as being amongst those who politicians like to term as having the broadest shoulders. I appreciate we are fortunate but not necessarily lucky. It required decades of hard work, long hours and sacrifices on the part of both of us, and also making sensible career decisions.
I absolutely agree with a progressive taxation system, the need for welfare and benefits to provide a safety net for those most in need. I also agree with the principal of a free at the point of service NHS, but I think that increasingly looks problematic. Successive governments have poured billions of extra pounds into the NHS but despite the efforts of brilliant doctors and nurses, it appears that is never enough.
We have sons in their 30s and 40s who are equally hard working but haven’t necessarily gone into high paying careers, have working partners, are paying mortgages and bringing up our grandchildren. So I do worry about how the next few years will pan out and impact them in the current UK environment.
Clearly we need to get to grips with our pathetic rate of growth and productivity in this country and need to attract more private investment. As someone said, at the end of the day, it’s primarily the private sector that generates the taxes (be it through corporation tax, VAT, NI or their own employee income taxes/NI) that provides the money the government has to play with it (and no I haven’t forgotten that public sector workers have to pay tax and NI).
I am afraid it is not as simple as adding supplemental tax rates on specific industries or service sectors. Multinational corporations will always have a portfolio of investment proposals to consider over a number of countries and they will make their decisions based on the best economics. My former employers have just announced the impending closure of a UK plant citing a lack of a competitive future for the site due to the UK’s economic and policy environment.
Similarly private entrepreneurs will take their money elsewhere once they start to see a tipping point, so the frequent references to potential wealth taxes are not helping the UK. I read an article last week that named 8 billionaires that had either departed the UK in the last year, or who had announced their imminent departure. My wife is aware of 2 senior execs from the UK FTSE 100 company she used to work for who have suddenly felt it important that they relocate from their London HQ to the UAE because their Middle East operations are becomingly more important.
On the welfare side, we have to be realistic about what can be afforded in a low growth environment. There must be efficiencies. I am certainly not saying we want Elon Musk to be brought in but I have a concern it will be difficult for the public service to self-regulate with regards to efficiencies. That would be like turkeys voting for Christmas. Just as an aside I read an article that said the COVID enquiry is likely to cost in excess of £200 million - has anyone done a cost benefit analysis?
I don’t have the answers, but I am afraid political dogma of whichever hue is often the problem when it comes to solutions and when you see politicians squirming to answer questions honestly it just demonstrates why we won’t get out of this easily.
Sorry for the length of this but at least I feel better for adding my two pennies worth.
We already have sector specific schemes for big pharma and digital services. Those companies did not leave the UK or divert investment elsewhere - in fact in the case of the pharma sector until brexit messed up our access to the European market it actually provided an incentive for them to invest in the UK, base their R&D here and other functions as costs were written off against the scheme and so it was the most tax efficient way to invest. Energy companies will not leave the UK and their captive market if we put a similar scheme on them - in fact they will likely invest more in renewables if we make those costs a write off against the scheme. Neither will supermarkets if we put a pricing scheme on essential food items. If we put an operations tax on Starbucks like the digital services tax (still lower than than they should pay in corporation tax) then Starbucks wont leave - and any reduction in offering only leave space for a small independent to fill a gap. We were the world leader on the digital services tax when everyone said it was impossible - we should do the same to any sector meeting those conditions (small number of large companies with oligopoly power making economically excess profits).
There is absolutely the means to do this. We can tackle oligopoly power of these corporations and raise money to reduce the tax burden on small businesses and workers as well as fund public services.
More cash in peoples pockets means due to the Marginal Propensity to Consume that money is more likely to be spent rather than saved or moved abroad, the velocity of money is also higher at the lower end so you're more likely to get the multiplier effect and there you have your much needed growth.
It's not a fight against capitalism because what we are living under is no longer capitalism. Literally none of the main tenets of capitalism still hold, we don't have free markets, we don't have real competition. We are living in a tech oligarchy or monopolism. We have large multinationals and private equity funds picking over the corpse of what used to be a competitive economy and having untold influence over governments and media. We are in a corporate controlled data driven monopoly where artifical scarcity is created in order to drive prices up and extract as much as possible from people before the system collapses.0 -
cantersaddick said:
You can say that but in the examples given we did this and they didn't leave, in fact it led to inwards investment. And other countries did follow suit.robinofottershaw said:
I am afraid unless other countries adopt the same approach you are proposing for the UK, multinationals will, and in some cases, are, prioritising investment away from the UK. I speak from experience. They may not exit completely for various reasons but they will spend elsewhere on new projects where the economics are more attractive. But good luck in the fight against capitalism.cantersaddick said:
I get where you are coming from and that has been the messaging over the last 50 years. But, its repeating the same trickle down economics that has failed us for 50 years. Continuing tax breaks and deregulation for the large multinational corporations is what is killing small businesses and the dynamics of our economy. It is the root of our societal inequality. Continuing with the same approach that got us in this mess (or even doubling down on that approach as some want) will not get us out of it. This approach stopped bringing growth in 2008 (Actually well before that but 2008 was its death throes), even when it did bring growth the growth wasnt shared around so only benefited a few. It does not trickle down. Those traditional economic relationships do not hold in the modern world. We need to stop applying economic solutions that were designed for a more traditional economy to a modern economic world.robinofottershaw said:Interesting debate on here over the last few pages and no easy answers.
I know my wife and I would be regarded as being amongst those who politicians like to term as having the broadest shoulders. I appreciate we are fortunate but not necessarily lucky. It required decades of hard work, long hours and sacrifices on the part of both of us, and also making sensible career decisions.
I absolutely agree with a progressive taxation system, the need for welfare and benefits to provide a safety net for those most in need. I also agree with the principal of a free at the point of service NHS, but I think that increasingly looks problematic. Successive governments have poured billions of extra pounds into the NHS but despite the efforts of brilliant doctors and nurses, it appears that is never enough.
We have sons in their 30s and 40s who are equally hard working but haven’t necessarily gone into high paying careers, have working partners, are paying mortgages and bringing up our grandchildren. So I do worry about how the next few years will pan out and impact them in the current UK environment.
Clearly we need to get to grips with our pathetic rate of growth and productivity in this country and need to attract more private investment. As someone said, at the end of the day, it’s primarily the private sector that generates the taxes (be it through corporation tax, VAT, NI or their own employee income taxes/NI) that provides the money the government has to play with it (and no I haven’t forgotten that public sector workers have to pay tax and NI).
I am afraid it is not as simple as adding supplemental tax rates on specific industries or service sectors. Multinational corporations will always have a portfolio of investment proposals to consider over a number of countries and they will make their decisions based on the best economics. My former employers have just announced the impending closure of a UK plant citing a lack of a competitive future for the site due to the UK’s economic and policy environment.
Similarly private entrepreneurs will take their money elsewhere once they start to see a tipping point, so the frequent references to potential wealth taxes are not helping the UK. I read an article last week that named 8 billionaires that had either departed the UK in the last year, or who had announced their imminent departure. My wife is aware of 2 senior execs from the UK FTSE 100 company she used to work for who have suddenly felt it important that they relocate from their London HQ to the UAE because their Middle East operations are becomingly more important.
On the welfare side, we have to be realistic about what can be afforded in a low growth environment. There must be efficiencies. I am certainly not saying we want Elon Musk to be brought in but I have a concern it will be difficult for the public service to self-regulate with regards to efficiencies. That would be like turkeys voting for Christmas. Just as an aside I read an article that said the COVID enquiry is likely to cost in excess of £200 million - has anyone done a cost benefit analysis?
I don’t have the answers, but I am afraid political dogma of whichever hue is often the problem when it comes to solutions and when you see politicians squirming to answer questions honestly it just demonstrates why we won’t get out of this easily.
Sorry for the length of this but at least I feel better for adding my two pennies worth.
We already have sector specific schemes for big pharma and digital services. Those companies did not leave the UK or divert investment elsewhere - in fact in the case of the pharma sector until brexit messed up our access to the European market it actually provided an incentive for them to invest in the UK, base their R&D here and other functions as costs were written off against the scheme and so it was the most tax efficient way to invest. Energy companies will not leave the UK and their captive market if we put a similar scheme on them - in fact they will likely invest more in renewables if we make those costs a write off against the scheme. Neither will supermarkets if we put a pricing scheme on essential food items. If we put an operations tax on Starbucks like the digital services tax (still lower than than they should pay in corporation tax) then Starbucks wont leave - and any reduction in offering only leave space for a small independent to fill a gap. We were the world leader on the digital services tax when everyone said it was impossible - we should do the same to any sector meeting those conditions (small number of large companies with oligopoly power making economically excess profits).
There is absolutely the means to do this. We can tackle oligopoly power of these corporations and raise money to reduce the tax burden on small businesses and workers as well as fund public services.
More cash in peoples pockets means due to the Marginal Propensity to Consume that money is more likely to be spent rather than saved or moved abroad, the velocity of money is also higher at the lower end so you're more likely to get the multiplier effect and there you have your much needed growth.
It's not a fight against capitalism because what we are living under is no longer capitalism. Literally none of the main tenets of capitalism still hold, we don't have free markets, we don't have real competition. We are living in a tech oligarchy or monopolism. We have large multinationals and private equity funds picking over the corpse of what used to be a competitive economy and having untold influence over governments and media. We are in a corporate controlled data driven monopoly where artifical scarcity is created in order to drive prices up and extract as much as possible from people before the system collapses.
I can only base my views on personal experience from sitting in global planning meetings with colleagues from the USA and elsewhere, working through the ranking of projected future investment on projects from both a strategic and economics viewpoint. Also now in retirement seeing withdrawal from UK operations with heavy investment elsewhere that have more favorable tax and regulatory regimes.
I have no insight into the pharmaceutical industry other than what I read in the news, but I thought Merck and maybe one of the other big pharma companies had recently cancelled some significant investment in the UK. I think that was due to a combination of a lack of support from the UK and a desire to invest more in the USA due to Trump’s tariff threats. Whatever the reason, it is bad for UK Plc in terms of future jobs and possible future tax revenues.I don’t disagree that big corps have undue influence. But the UK needs to compete for their investments, because those investment monies will otherwise go elsewhere.Anyway, you seem to have more insights than me.0 -
Very interesting. I'll be watching with much interest. Not sure how they can stop people investing into money markets funds apart from telling providers not to offer them.Er_Be_Ab_Pl_Wo_Wo_Ch said:I just caught sight of this - it may come to nothing, but more madness may be on the way...
+++
HM Revenue and Customs (HMRC) will penalise savers who put cash in stocks and shares Isas to escape Labour’s savings crackdown.
Rachel Reeves announced on Wednesday that the cash Isa limit would be cut to £12,000 for under-65s in an effort to boost investment in UK stocks and shares.
But the tax authority said savers who place cash in a stocks and shares Isa will face a charge under new legislation from April 6 2027.
HMRC has also revealed it plans to ban “cash-like” investments from being held in stocks and shares Isas, in the most dramatic shake-up to Isa eligibility rules in recent years.
Transfers from a stocks and shares or innovative finance Isa into a cash Isa will be banned under the new rules.
It is currently unknown how HMRC will determine whether an investment is “cash-like”, although the tax authority has confirmed in its savings newsletter that a “test” will be developed in consultation with the financial industry.It raises concerns that investments such as money market funds may be effectively banned from stocks and shares Isas. These funds, which aim to offer a slightly higher return than cash at low risk, are often used by investors who are seeking new opportunities to buy stocks.
There is a risk that even short-dated bonds might be penalised by the taxman, which includes UK government debt and the most stable company debt across the FTSE 100, as these are often referred to as “cash-like” investments for their low risk.
The move comes in the wake of changes made in Rachel Reeves’s Budget, which will create a two-tiered Isa system based on cash allowances.
Savers under the age of 65 will be limited to a £12,000 per year allowance for their cash Isa or face punishment, while savers aged 65 and over will retain their full £20,000 allowance.
Jason Hollands, of stockbroker Bestinvest, said the move amounted to “yet another stealth tax”.
He said: “While it is no surprise they are going to take action, levying a charge on cash held within stocks and shares Isas is yet another stealth tax that will impact genuine investors who sometimes decide to park money in cash for a period of time awaiting investment, or because they are nervous about the market environment.
“The ‘tests’ to determine whether eligible investments are ‘cash-like’ will throw doubt about access to money market funds within stocks and shares Isas and could even bring short-dated bonds into question. More uncertainty ahead.”
Brian Byrnes, of savings provider Moneybox said: “Isas are popular among UK savers because they’re known for being simple and reliable.
“Any change needs to preserve that simplicity and avoid any additional complexity which will only lead to confusion.”
Mr Byrnes added: “Charging interest on ‘cash-like’ holdings inside a stocks & shares ISA begs the question: can this still be labelled as ‘tax-free’ growth?”
A Government spokesperson said: “We will introduce rules to avoid circumvention of the new cash limits on Isas and will consult with Isa industry stakeholders before doing so.”
Perhaps the Government should just go back to when PEPs first started out in the late 80's and only allow investment into a very small number of individual shares. I was working for Gartmore at the time & iirc their offering had just 4 UK shares. Barclays & Next were 2 of them.0 -
I did say "attracted inward investment until brexit fucked our access to the European market". There have been recent moves away from the UK as a a result of that. But those companies do still operate here and as a result of moving that investment abroad will actually pay back more to the government under the medicines pricing schemes as they can no longer write off those costs. Tax can be an incentive to invest.robinofottershaw said:cantersaddick said:
You can say that but in the examples given we did this and they didn't leave, in fact it led to inwards investment. And other countries did follow suit.robinofottershaw said:
I am afraid unless other countries adopt the same approach you are proposing for the UK, multinationals will, and in some cases, are, prioritising investment away from the UK. I speak from experience. They may not exit completely for various reasons but they will spend elsewhere on new projects where the economics are more attractive. But good luck in the fight against capitalism.cantersaddick said:
I get where you are coming from and that has been the messaging over the last 50 years. But, its repeating the same trickle down economics that has failed us for 50 years. Continuing tax breaks and deregulation for the large multinational corporations is what is killing small businesses and the dynamics of our economy. It is the root of our societal inequality. Continuing with the same approach that got us in this mess (or even doubling down on that approach as some want) will not get us out of it. This approach stopped bringing growth in 2008 (Actually well before that but 2008 was its death throes), even when it did bring growth the growth wasnt shared around so only benefited a few. It does not trickle down. Those traditional economic relationships do not hold in the modern world. We need to stop applying economic solutions that were designed for a more traditional economy to a modern economic world.robinofottershaw said:Interesting debate on here over the last few pages and no easy answers.
I know my wife and I would be regarded as being amongst those who politicians like to term as having the broadest shoulders. I appreciate we are fortunate but not necessarily lucky. It required decades of hard work, long hours and sacrifices on the part of both of us, and also making sensible career decisions.
I absolutely agree with a progressive taxation system, the need for welfare and benefits to provide a safety net for those most in need. I also agree with the principal of a free at the point of service NHS, but I think that increasingly looks problematic. Successive governments have poured billions of extra pounds into the NHS but despite the efforts of brilliant doctors and nurses, it appears that is never enough.
We have sons in their 30s and 40s who are equally hard working but haven’t necessarily gone into high paying careers, have working partners, are paying mortgages and bringing up our grandchildren. So I do worry about how the next few years will pan out and impact them in the current UK environment.
Clearly we need to get to grips with our pathetic rate of growth and productivity in this country and need to attract more private investment. As someone said, at the end of the day, it’s primarily the private sector that generates the taxes (be it through corporation tax, VAT, NI or their own employee income taxes/NI) that provides the money the government has to play with it (and no I haven’t forgotten that public sector workers have to pay tax and NI).
I am afraid it is not as simple as adding supplemental tax rates on specific industries or service sectors. Multinational corporations will always have a portfolio of investment proposals to consider over a number of countries and they will make their decisions based on the best economics. My former employers have just announced the impending closure of a UK plant citing a lack of a competitive future for the site due to the UK’s economic and policy environment.
Similarly private entrepreneurs will take their money elsewhere once they start to see a tipping point, so the frequent references to potential wealth taxes are not helping the UK. I read an article last week that named 8 billionaires that had either departed the UK in the last year, or who had announced their imminent departure. My wife is aware of 2 senior execs from the UK FTSE 100 company she used to work for who have suddenly felt it important that they relocate from their London HQ to the UAE because their Middle East operations are becomingly more important.
On the welfare side, we have to be realistic about what can be afforded in a low growth environment. There must be efficiencies. I am certainly not saying we want Elon Musk to be brought in but I have a concern it will be difficult for the public service to self-regulate with regards to efficiencies. That would be like turkeys voting for Christmas. Just as an aside I read an article that said the COVID enquiry is likely to cost in excess of £200 million - has anyone done a cost benefit analysis?
I don’t have the answers, but I am afraid political dogma of whichever hue is often the problem when it comes to solutions and when you see politicians squirming to answer questions honestly it just demonstrates why we won’t get out of this easily.
Sorry for the length of this but at least I feel better for adding my two pennies worth.
We already have sector specific schemes for big pharma and digital services. Those companies did not leave the UK or divert investment elsewhere - in fact in the case of the pharma sector until brexit messed up our access to the European market it actually provided an incentive for them to invest in the UK, base their R&D here and other functions as costs were written off against the scheme and so it was the most tax efficient way to invest. Energy companies will not leave the UK and their captive market if we put a similar scheme on them - in fact they will likely invest more in renewables if we make those costs a write off against the scheme. Neither will supermarkets if we put a pricing scheme on essential food items. If we put an operations tax on Starbucks like the digital services tax (still lower than than they should pay in corporation tax) then Starbucks wont leave - and any reduction in offering only leave space for a small independent to fill a gap. We were the world leader on the digital services tax when everyone said it was impossible - we should do the same to any sector meeting those conditions (small number of large companies with oligopoly power making economically excess profits).
There is absolutely the means to do this. We can tackle oligopoly power of these corporations and raise money to reduce the tax burden on small businesses and workers as well as fund public services.
More cash in peoples pockets means due to the Marginal Propensity to Consume that money is more likely to be spent rather than saved or moved abroad, the velocity of money is also higher at the lower end so you're more likely to get the multiplier effect and there you have your much needed growth.
It's not a fight against capitalism because what we are living under is no longer capitalism. Literally none of the main tenets of capitalism still hold, we don't have free markets, we don't have real competition. We are living in a tech oligarchy or monopolism. We have large multinationals and private equity funds picking over the corpse of what used to be a competitive economy and having untold influence over governments and media. We are in a corporate controlled data driven monopoly where artifical scarcity is created in order to drive prices up and extract as much as possible from people before the system collapses.
I can only base my views on personal experience from sitting in global planning meetings with colleagues from the USA and elsewhere, working through the ranking of projected future investment on projects from both a strategic and economics viewpoint. Also now in retirement seeing withdrawal from UK operations with heavy investment elsewhere that have more favorable tax and regulatory regimes.
I have no insight into the pharmaceutical industry other than what I read in the news, but I thought Merck and maybe one of the other big pharma companies had recently cancelled some significant investment in the UK. I think that was due to a combination of a lack of support from the UK and a desire to invest more in the USA due to Trump’s tariff threats. Whatever the reason, it is bad for UK Plc in terms of future jobs and possible future tax revenues.I don’t disagree that big corps have undue influence. But the UK needs to compete for their investments, because those investment monies will otherwise go elsewhere.Anyway, you seem to have more insights than me.
Its the same way that amazon kicked off about the digital services tax. But pulling out of the market would cost way more so whilst the will campaign against it ultimately they're still here their warehouses and facilities still exist and employ people and tax is raised.
I am simply saying in sectors like energy those companies aren't going to leave if we put a similar pricing scheme on them. They have a captive market for an essential good. If we make any investment they make in renewables or renewable enabling infrastructure a write off against the scheme then it could be a major boost to investment.
Similarly supermarkets aren't going to leave if we put a pricing scheme on essential food items. Again captive audience and they will still make economically excess profits on everything else they sell.0 -
That takes me back, my first mortgage was a PEP mortgage, it was the Woolwich Advisor where I worked first put me onto it and thats what really sparked my interest in investing. I've drawn the diagrams and charts he went through with me back in 1994 many times since with other people to also spark their interest. Despite the bad press mine actually did pretty well.golfaddick said:
Very interesting. I'll be watching with much interest. Not sure how they can stop people investing into money markets funds apart from telling providers not to offer them.Er_Be_Ab_Pl_Wo_Wo_Ch said:I just caught sight of this - it may come to nothing, but more madness may be on the way...
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HM Revenue and Customs (HMRC) will penalise savers who put cash in stocks and shares Isas to escape Labour’s savings crackdown.
Rachel Reeves announced on Wednesday that the cash Isa limit would be cut to £12,000 for under-65s in an effort to boost investment in UK stocks and shares.
But the tax authority said savers who place cash in a stocks and shares Isa will face a charge under new legislation from April 6 2027.
HMRC has also revealed it plans to ban “cash-like” investments from being held in stocks and shares Isas, in the most dramatic shake-up to Isa eligibility rules in recent years.
Transfers from a stocks and shares or innovative finance Isa into a cash Isa will be banned under the new rules.
It is currently unknown how HMRC will determine whether an investment is “cash-like”, although the tax authority has confirmed in its savings newsletter that a “test” will be developed in consultation with the financial industry.It raises concerns that investments such as money market funds may be effectively banned from stocks and shares Isas. These funds, which aim to offer a slightly higher return than cash at low risk, are often used by investors who are seeking new opportunities to buy stocks.
There is a risk that even short-dated bonds might be penalised by the taxman, which includes UK government debt and the most stable company debt across the FTSE 100, as these are often referred to as “cash-like” investments for their low risk.
The move comes in the wake of changes made in Rachel Reeves’s Budget, which will create a two-tiered Isa system based on cash allowances.
Savers under the age of 65 will be limited to a £12,000 per year allowance for their cash Isa or face punishment, while savers aged 65 and over will retain their full £20,000 allowance.
Jason Hollands, of stockbroker Bestinvest, said the move amounted to “yet another stealth tax”.
He said: “While it is no surprise they are going to take action, levying a charge on cash held within stocks and shares Isas is yet another stealth tax that will impact genuine investors who sometimes decide to park money in cash for a period of time awaiting investment, or because they are nervous about the market environment.
“The ‘tests’ to determine whether eligible investments are ‘cash-like’ will throw doubt about access to money market funds within stocks and shares Isas and could even bring short-dated bonds into question. More uncertainty ahead.”
Brian Byrnes, of savings provider Moneybox said: “Isas are popular among UK savers because they’re known for being simple and reliable.
“Any change needs to preserve that simplicity and avoid any additional complexity which will only lead to confusion.”
Mr Byrnes added: “Charging interest on ‘cash-like’ holdings inside a stocks & shares ISA begs the question: can this still be labelled as ‘tax-free’ growth?”
A Government spokesperson said: “We will introduce rules to avoid circumvention of the new cash limits on Isas and will consult with Isa industry stakeholders before doing so.”
Perhaps the Government should just go back to when PEPs first started out in the late 80's and only allow investment into a very small number of individual shares. I was working for Gartmore at the time & iirc their offering had just 4 UK shares. Barclays & Next were 2 of them.0
