I realise that (@jfollows too) but prices, IMX, are still going up faster than at "normal" times.
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Rishi Sunak and the Conservative Party.
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edwin_m
Veteran Member
The problem here is too much inflation, not the lack of it.
I don't doubt that played a part, but why has inflation in the USA come back down again to around 3% when they pumped as much "free money" into their economy (something like $4.5T) and ours remains well above normal?
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So, addicts are going to switch from their "drug of choice" (which is now legal) to a more dangerous drug simply because it's illegal. Not sure I follow the logic.Who would presumably then simply then seek to supply and get more people addicted to more dangerous drugs instead. Or do you imagine that drugs gangs who find they can no longer make a fortune pushing softer drugs, would simply say, "OK guys, let's give up on our lucrative life of crime, become honest upright citizens and go get minimum wage jobs as shop assistants or something instead"?
End of the day, drug abuse is a healthcare issue, not a criminal one and can only be effectively dealt with by treating it as such.
bahnause
Member
Because the inflation in the UK was never really caused by loads of money being pumped into the system, but by a lack of supplies of goods for daily use caused by the combination of Brexit and Covid. The whole concept of keeping inflation down by keeping salaries and expensens down was economic nonsense from the beginning, propagated by the self declared party for "economic competence".
Well, yes. You and I know that, but I'm wondering what the answer will be from our Brexit and Tory-supporting forum members.
brad465
Veteran Member
Away from all the drama of the Autumn Statement, James Cleverly has been reported using an expletive to "answer" why Stockton North has a high poverty rate:
Cutting the NI rate might have been reasonable if the upper threshold had been removed, but I agree with you that cutting the rate is reckless at this time, given the increase in pensions and benefits, particularly the triple lock increase in the basic state pension, and of course, the massive debt burden.
Freezing of personal tax thresholds only matters if income is rising. For many people getting zero pay increases it doesn't have any effect on the net pay they get.
It is also a good way of recovering money from 'wealthy pensioners' benefitting from the triple lock, while not affecting people reliant solely on the state pension.
I'm not convinced. Fiscal drag is a redistributive policy and seems entirely reasonable to me. The amount of tax paid by anyone goes up if they are being paid more. If they get no pay increase, their tax is unchanged.
Ultimately all these tax policies are cynical moves designed to make the next government look bad when they have to reverse them to cope with the issue that tax revenue needs to increase.
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4COR
Member
Though, at present, pay is generally increasing in percentage terms (even in the HE sector, though by less than inflation again as usual...!) - a lower proportion of pay in the personal tax free allowance (or at basic rate) increases the tax burden for an individual. The poor (and wealthy) are worse off as a result compared to middle earners - the pay rise which aims to offset inflation gets mopped up by a higher percentage being taxed at a higher rate.
Oops. The Tories hold Stockton South, don't they? I take it they won't after the next election...
Energy costs. I believe almost every other metric has stayed the same or got worse, but the fall in energy prices brought the overall figure down and gave Rishi the ability to boast about meeting his target (which many people said would happen) but because the Government didn't give us £400 to use for energy this year, everyone is still actually worse off.
But, hey, 2% off NI means I'll certainly change my vote. Not.
The main driver is interational hydrocarbon prices, of which we in europe are more impacted by due to our choice not to buy Russian Gas.
3141
Established Member
"Inflation" means prices are rising. The more significant issue is the rate of inflation. If the rate increases from 2% to 5% that means prices are rising faster than before. If the rate falls to 4% that's a welcome development, but yes, prices are still going up faster than at "normal times". You just hope that the rate will continue downwards.
Having lived through the mid-1970s when, for a while, the rate of inflation was 25%, I'm inclined to think that some journalists who go on about "unprecedented rises in the cost of living" don't know they're born.
The cut in NI only helps those who are working. Raising the starting tax threshold would have helped all who have a total income above £12,570, this would of course have been a policy u-turn. An increase of £1500 would be a net gain of £300, the same as the NI cut for someone earning ~£27500, a gain if earning less and a loss if earning more hence biased to helping those with lower incomes. Had £12570 been index linked it would be rather more than £14070 so a £1500 increase would still be a real tax income gain to the government.
Increasing the state pension from ~£10600 to ~£11500 for those who have full NI contributions from a combination of 35 years of work or qualifying 'credits' puts it within ~£1000 of the starting tax threshold. For 2021 - 2022 ago the gap was over £3000.
While occupational pensions if not index linked may well have increased significantly since 2022 personal pension 'pots' have at best fallen well behind if not remained static or dropped in value.
For very simple figures consider prices have increased 20% so to have the same buying power £3000 becomes £3600. From April 2023 ~£2600 will be taxable so gross £4250 has to be drawn from the 'pot'.
The ~£1000 increase of the state pension from April 2024 plus just under £1000 from April 2023 may seem good but food inflation has been well above the headline rate and current domestic energy capped rate, while down from last winter plus offset by the support payments, is still almost 50% higher than 2 years ago.
Increasing the state pension from ~£10600 to ~£11500 for those who have full NI contributions from a combination of 35 years of work or qualifying 'credits' puts it within ~£1000 of the starting tax threshold. For 2021 - 2022 ago the gap was over £3000.
While occupational pensions if not index linked may well have increased significantly since 2022 personal pension 'pots' have at best fallen well behind if not remained static or dropped in value.
For very simple figures consider prices have increased 20% so to have the same buying power £3000 becomes £3600. From April 2023 ~£2600 will be taxable so gross £4250 has to be drawn from the 'pot'.
The ~£1000 increase of the state pension from April 2024 plus just under £1000 from April 2023 may seem good but food inflation has been well above the headline rate and current domestic energy capped rate, while down from last winter plus offset by the support payments, is still almost 50% higher than 2 years ago.
That is arguably the point, and why a change to NI has been favoured.
The cost of conversion to an annuity will have plummeted though, so it isn't all bad in that respect. Obviously less lump sum is available.
No one is pretending that everyone's income should be matching the increase in prices. As the governor of the Bank of England put it, we should recognise that we are all going to be a bit poorer after the last few years.
It just isn't possible for the standard of living to be maintained given how much of it has been funded by debt.
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Busaholic
Veteran Member
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More people will be drawn into paying income tax on their earnings too. The government has now increased the minimum wage by 31% since 2020 yet won't allow decent wage increases to many in the public sector.Disneyland with a death sentence
The changes will save the average worker 450 a year, thats less than 40 a month and many people will be below this average anyway. I don't think its time to put a deposit down on a Cybertruck just yet.
You do Zimbabwean and Venezuelan economics and get Zimbabwean and Venezuelan outcomes.
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Quite.
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D6130
Established Member
Unfortunately they might hold it. The leafy Southern suburbs of Hartburn and Fairfield are worlds away from the Northern sink estates such as Portrack and Ragworth....although I believe that affluent Norton is included in the North constituency.
Gloster
Veteran Member
At the next election North will gain a few bits of South, but probably still be safe Labour. Most of South becomes the new Stockton West, with bits of North and Sedgefield: it looks like a likely, but not certain, Labour gain.
DynamicSpirit
Established Member
I think if that's the justification for wanting to decriminalise drug possession/etc., then that would be a reasonable argument. Personally I'm not convinced - I think people understate the harm that even softer drugs cause; but if you believe the drugs are (almost) harmless, then I can see why you'd want to decriminalise them. But that's a very different argument from saying in effect that we should decriminalise them just because people are still taking them and we haven't been able to stop criminal gangs supplying them. That latter argument seems to me ridiculous, and amounts to an argument not to bother having any law enforcement.
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That's certainly over-the-top and wrong as a penalty in that situation. But it doesn't by any stretch of the imagination make the Government 'far right' (At least, not by any normal usage of the term 'far right').
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I would say that the NI reduction is very typical of the Tories' general ethic because a core principle of Toryism is to seek to keep taxes as low as possible and therefore to reduce them when they are able to. Increasing the minimum wage is harder to rationalize as a core Tory principle, but it is consistent with that the Tories have consistently and repeatedly increased it since they came to power in 2010.
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Drug abuse is partially a healthcare issue to the extent that someone who is already addicted will probably need healthcare to end their addiction. But people choosing to take drugs in the first place is not a healthcare issue: That's an issue of personal responsibility and education. And criminal gangs growing/importing illegal drugs and then trying to get people addicted to them is very definitely a crime issue, as is people committing crimes in order to feed their drugs habit.
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German inflation may be affected by their relatively poor growth, as there won’t be the same level of demand driving inflation. (Germany GDP is +0.3% compared to pre pandemic in real terms, UK +1.8%, US +7.4%)
The BoE suggests three causes of high inflation https://www.bankofengland.co.uk/explainers/will-inflation-in-the-uk-keep-rising
Supply shocks from the pandemic, food/energy supply due to the Ukraine war, people dropping out of employment post pandemic.
Perhaps as we have a relatively larger service sector in our economy, we’re hit harder by import issues. (Though in ‘normal’ times, it’s economically advantageous for us to concentrate on things we’re better at, than trying to produce everything ourselves).
edwin_m
Veteran Member
Looks like we're getting the inflation but without much growth to compensate.
BoE appears to be ignoring the Brexit-related dampeners of growth - sudden reduction in immigrant labour, businesses finding it more difficult to import and export.
Mental health issues of course never have anything to do with it. It's *always* a choice.
brad465
Veteran Member
This is also entirely after leaving the EU and it's kept going up despite leaving the Single Market and thus freedom of movement. The reality is we pursue an infinite GDP growth model that is inherently reliant on increasingly exploiting cheap labour and boosting the property sector in size and demand for ever greater profit. If you want reduced immigration, target these areas, not the immigrants themselves.
Why do you think, after all this time, that if education hasn't worked yet it will start working now? Moralising (not aimed at you specifically but people who often take a similar view) about it being a personal failing and "JUST SAY NO" hasn't worked in fifty+ years. Why does anyone think it would start working now?
It's a blend of both those arguments however not just one. The reason to decriminalise possession of, at least some, drugs is that the harms caused by them are low meanwhile enforcement, more than fifty years of it at this point, has failed to address the issue. If it hasn't worked so far why don't we try something else instead because the present approach hasn't worked even slightly.
Broadly speaking drug prohibition has been an abject failure of public policy. I don't see how anyone can honestly defend the status quo when the harms caused by that utter failure of policy are obvious and growing. "JUST SAY NO" does not work. I see precious little evidence that introducing even harsher measures (see Singapore or even the US with their "three strikes" laws) would help. So what are to do? Perhaps it might be time to think about a different direction for drugs policy?
Drugs policy being the major part of the reason that the USA has a higher proportion of their population incarcerated than 'evil dictatorships' like North Korea or Myanmar.
No surprise with a general election expected next year the tax cuts and maintenance of triple lock on pensions have been broadcast. Shame more cuts of public services will be needed to fund it, probably the most severe since austerity.
Also disappointing to see the government trying to take credit for reducing inflation, when firstly it is because energy prices have decreased which has little if anything to do with them, and secondly, inflation will come down sooner or later because of regression to the mean if nothing else. I wonder how low inflation will go in reality when there are threats of more energy price hikes next year:
Also disappointing to see the government trying to take credit for reducing inflation, when firstly it is because energy prices have decreased which has little if anything to do with them, and secondly, inflation will come down sooner or later because of regression to the mean if nothing else. I wonder how low inflation will go in reality when there are threats of more energy price hikes next year:
Citybreak1
Member
So NI tax to be cut in January. Energy bills rise £94 a year in January?
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