Government & Post Election Discussion

[OLD BOY]

Originally Posted by 1andrew1

No longer the party of business, the Conservative Party looks set to no longer be the party of sound finance.

https://www.ft.com/content/d4a5a452-...f-ee390057b8c9

When we are reaping the rewards of Brexit and spending some of the money we are saving by shovelling less money towards paying off the deficit, you may start to change your mind on that.

[1andrew1]

Originally Posted by OLD BOY

When we are reaping the rewards of Brexit and spending some of the money we are saving by shovelling less money towards paying off the deficit, you may start to change your mind on that.

The Government is planning on increasing the deficit via increased spending on areas like the NHS. The Brexit dividend myth has been debunked by the Government and I suspect you are the only one still on that page of the TM hymn book.

[Angua]

Originally Posted by 1andrew1

The Government is planning on increasing the deficit via increased spending on areas like the NHS. The Brexit dividend myth has been debunked by the Government and I suspect you are the only one still on that page of the TM hymn book.

Think they have belatedly realised austerity stifles the growth that will be desperately needed post Brexit.

[OLD BOY]

Originally Posted by Angua

Think they have belatedly realised austerity stifles the growth that will be desperately needed post Brexit.

The deficit is within a whisker of being paid off. That's why we can look forward to austerity easing off a bit. The answer never was to make matters worse by increasing borrowing!

---------- Post added at 15:08 ---------- Previous post was at 15:01 ----------

Originally Posted by 1andrew1

The Government is planning on increasing the deficit via increased spending on areas like the NHS. The Brexit dividend myth has been debunked by the Government and I suspect you are the only one still on that page of the TM hymn book.

The reward of Brexit will come through having no further payments to the EU, more trade with the rest of the world, and the new spirit of enterprise, free of bureaucratic EU rules and legislation.

[Angua]

Originally Posted by OLD BOY

The deficit is within a whisker of being paid off. That's why we can look forward to austerity easing off a bit. The answer never was to make matters worse by increasing borrowing!

---------- Post added at 15:08 ---------- Previous post was at 15:01 ----------



The reward of Brexit will come through having no further payments to the EU, more trade with the rest of the world, and the new spirit of enterprise, free of bureaucratic EU rules and legislation.

Yet the debt is nearly a trillion more than it was in 2010.

[OLD BOY]

Originally Posted by Angua

Yet the debt is nearly a trillion more than it was in 2010.

I know. But the deficit is nearly paid off, so we can use the money that was dedicated to that and still pay off the debt, with repayments getting lower as it comes down.

[Angua]

Originally Posted by OLD BOY

I know. But the deficit is nearly paid off, so we can use the money that was dedicated to that and still pay off the debt, with repayments getting lower as it comes down.

I admire your optimism, but will believe it when I see it.

[Sephiroth]

They’ll possibly pay down the debt by increasing VAT. That’s what Thatcher did.

Originally Posted by OLD BOY

I know. But the deficit is nearly paid off, so we can use the money that was dedicated to that and still pay off the debt, with repayments getting lower as it comes down.

We are reducing the deficit, which is good, but we still have a deficit (in March it was down to £40 billion from £47 billion the previous year). If we reduce our deficit by 7 billion a year, in 5 or so years we should be breaking even, and then we can start paying off the debt, which if we generously say we will pay off at £20 billion a year, it should take us 85 years (£10 billion a year makes it 170 years).

All the debt/deficit figures are here.

https://www.ons.gov.uk/economy/gover...aast/march2018

---------- Post added at 16:44 ---------- Previous post was at 16:37 ----------

Originally Posted by Sephiroth

They’ll possibly pay down the debt by increasing VAT. That’s what Thatcher did.

VAT receipts were £125 billion in 2017/18.

If VAT was raised by 5% (adding 25% more on), that would raise another £31 billion per year, taking around 50 years to reduce the debt.

Howe raised VAT to fund income tax cuts, not reduce debt - the basic rate was cut by 3p to 30p in the pound, while the highest rate came down from 83p to 60p. A few years later, the basic rate of tax had fallen to 25%, while the higher rate had been slashed to 40%.

VAT went from 8% to 15%.

U.K. Gross debt in 1979/80 was £107 billion - in 1992/93 it was £248 billion (as a % of GDP it went from 51% to 40%).

[Angua]

Originally Posted by Sephiroth

They’ll possibly pay down the debt by increasing VAT. That’s what Thatcher did.

Yup, hit the poorest again.

[OLD BOY]

Originally Posted by Angua

Yup, hit the poorest again.

Well, that depends on which goods will be subject to a higher rate of VAT. The rate on essentials could stay as is.

[denphone]

Originally Posted by Angua

Yup, hit the poorest again.

Always the easy target.

[1andrew1]

Originally Posted by OLD BOY

The deficit is within a whisker of being paid off. That's why we can look forward to austerity easing off a bit. The answer never was to make matters worse by increasing borrowing!

I so wish this was the case. A reminder of the financial issues the UK is now facing:

Theresa May’s pledge to end austerity, renew the NHS, freeze fuel duties and increase council house building has left the UK Treasury facing a hole in the public finances of up to £35bn-a-year by the end of the current Parliament.

https://www.ft.com/content/d4a5a452-...f-ee390057b8c9

So, the reality of the current increased spending commitments is higher taxes and/or higher borrowing. From the FT just now:

Philip Hammond has told officials that “nothing is off the table” as he considers a range of controversial tax moves in this month’s Budget to help fund Theresa May’s promised £26bn cash boost to the NHS.
Mr Hammond argues that tax promises contained in the 2017 Conservative manifesto have been rendered void by Mrs May’s unforeseen decision to pump cash into Britain’s health system, the government’s “number one priority”.
The chancellor is considering a range of options including cutting pensions tax relief for higher earners, delaying flagship plans to raise income tax thresholds and a controversial shake-up of VAT rules for small companies.

https://www.ft.com/content/7aa69be2-...5-24ad351828ab

Originally Posted by Sephiroth

They’ll possibly pay down the debt by increasing VAT. That’s what Thatcher did.

Talk is of aligning the level at which companies pay tax with the EU norm of about £20k+ turnover. Currently, only UK companies with an £85k+ turnover have to pay VAT.

[ianch99]

Yet austerity is more than just the numbers. The cuts in Central Government funding to all aspects of society is still ongoing and, varying on the sector, is now show cronic levels of service degradation.

Look at the Police, Prisons, Social Care areas for example. Not only is the ability to deliver core services now at risk but the ability to recover from these changes, going forward, is also debatable.

When you cut funding, you cut jobs. This loses skills and experience which at best takes years to replace and at worse will never be replaced.

[tweetiepooh]

And again you can increase spending and still not get improved services, just employing more "consultants (non medical)", financial officers and administrators to oversee the new money. True you can cut till things don't work either but the first in and last out are not the front line providers where we need things to happen.