funding Labour manifesto promises

I really don't understand why, when the Labour Party manifesto and the cost of providing it puts us on an about average social and monetary basis, some on her are painting it as outlandish.

Surely what is outlandish, even reprehensible, is the winding down of our NHS by starving it of our money paid to keep us in good health; is the starving of children in ever growing numbers in the fifth largest economy and the divide that is ever growing between the haves and the can't haves, the favoured future and the future denied.

If the Labour Party's Green New Deal will give us warm homes, over time, for all, a proper wage for our labour, protection of our NHS and the end of Victorian style poverty why would you vote for a party which has, over the last forty years moved further and further to the right, become more and more racist and has left us with a collapsing school system, collapsing benefit and welfare system and a collapsing NHS to name but a few?

If tax receipts do not fund government spending then:
Where do tax receipts go?
Who funds welfare, pensions, the NHS, education etc etc?

Do you know more than the ONS?

You do know, Call, don't you that most of our 'money' doesn't actually exist in any tangible form? It's just a series of credits and debits on bank computers. Your bank doesn't hold any tangible form of money (apart from some cash, which people like to use for some things, but is increasingly used less and less in financial transactions), it mainly has figures on a computer. When it 'lends' money it tends to create it, under licence from the Bank of England, it doesn't have to have taken in enough in deposits to cover the loan.

Our income tax isn't the only source of 'income' the government has. It takes corporation tax from companies, tax on dividends and VAT from companies and consumers. It also has income from sundries like the Crown Estates. So the little pie chart on your tax return is a little bit of fiction really. At best it probably describes the theoretical apportionment of income tax receipts to various usages, but it doesn't account for all the other sources of government income allocated to them, or give any hint that the government itself, via the Bank of England, is able to 'create' money if it needs to (see quantitative easing). It does, though, deliberately or not, I don't know, give the impression that your tax is needed to pay for government expenditure amd is its only source of income. Which is handy for the government when it insists that it 'can't afford' to fund the NHS, or Education, or whatever.

Which doesn't mean to say that we don't need to pay our taxes. If we didn't pay any tax and the government just kept on creating money to cover its spending needs inflation would be rampant because there would be far too much 'money' around.

P.S The thing about computer generated credits and debits was confirmed to me by a friend who held a very senior position in a well known UK bank.

Sorry, the point of that ramble is that the ONS isn't telling you the whole story.

I understand MaizieD and have some sympathy for that idea, but it’s essentially Communism which sounds great in theory but falls down horribly in practice.
A Capitalist society is one that works best, for all it’s faults.
The ideal would be to have a moderate Conservative government in power, a country which welcomes investments and business and generates money and jobs but also looks after the interests of those at the lower end of society (money-wise speaking.)
This Conservative government is not the ideal moderate one,
But could become so if enough time elapses between this GE
And the next one.If not, it’s safe to say that Labour will get in at that following election, with itself a more moderate Labour
Cabinet, and Corbyn and McDonnell will be a footnote in history.
At the moment, although it’s what you and many other Socialists would like to happen, the manifesto just presented by them is too extreme to appeal to any voters of any intelligence.Which is why they are highly likely to lose this GE.

That was to MaizieD 19.20.20 post.

Well fancy that MaizieD, who knew?
There was me thinking that the Treasury Clerks sat at high desks counting the money I had dutifully taken in in little cotton bags to pay my tax.
I did apologise that it was all in 5p pieces last time, a bit fiddly for cold fingers, but they assured me that they were allowed to wear fingerless gloves.

As DGN has just completed the final part of his tax laws I must ask him about this. Well I never.

Knowing tax laws doesn't make anyone particularly knowledgeable about the mechanics of the monetary system. It's a
totally different subject.
I'd be curious to know what he says, though.

And it has nothing to do with communism. You're obsessed to the point of irrationality with it.

Thanks for all the information, though, I had no idea about VAT, corporation tax, rax on dividends, sundries etc.

You mean that they it's all just credits and debits on computers and not real?
Fancy!

I should have asked his mum, she used to work in the Bank of England.

I have never mentioned communism.

I discovered only recently, that after WW2, when the Americans gave billions of dollars to European countries to help rebuild their industries.

The country that benefitted most in dollar terms was the UK, but unlike other countries who used the money to rebuild the factories and houses of workers, the Labour government used none of it to help rebuild the country but used all instead to finance all the nationalisations of the railways, iron & steel industry, fuel supply, who were then starved of investment money to bring them up to date.

This is why we fell so far behind our competitors in the 1950s and 60s and we became one of the least productive countries in Europe and we have not caught up since. www.bbc.co.uk/history/british/modern/marshall_01.shtml.

The current manifesto, will seriously affect the pensions of this generation and following ones. The companies and industries that Labour wishes to nationalise are the companies whose shares are part of every pension fund's portfolio. The windfall taxes come from other companies whose shares also form core shares in pension funds.

The compensation terms are all aimed at discouraging investors, private and corporate, so where is industry to find the capital to invest in new facilities, what foreign investor will want to own British shares? Dividends will fall , which will affect pension funds.

There will be no Marshall Plan this time, we will become another rich country with a economy in collapse like Venezuela.

And no-one seems to have mentioned the nationalisation of broadband. A bit like China and North Korea. How long before it is used to censor what we can see and monitors what we search? It will start, with censorship for the public good: fake news, incitement to hatred, child pornography, and gradually, if Labour stay in power, it will tighten.

How can you call the running of a country that will not be as state run as Sweden or Finland Communist? What is this obsession? If you said the LP was moving us towards the Nordic form of capitalism I could understand it but then many people would find that attractive so we get the propaganda speak.

Maizie, apparently income tax is only about 25% of the tax take.

M0nica I think perhaps you have been reading a different version of history. The Marshall plan money was not used to Nationalise anything. It was used to maintain Britain's status in the world and for defence spending.
According to Whitehall documentation of the time, Britain's 'overriding need' in regard to the Marshall Aid was to keep up the Bank of England's reserves of gold and dollars, so that Britain could go on acting as banker to the Sterling Area. But then again, it was also stated in the documentation that the 'primary purpose' must be to keep up imports, especially of food and tobacco, to say nothing of timber for the Labour Government's ambitious programme of council-house building. As for capital investment in industrial modernisation, that was relegated in the British tender to the mere category of 'clearly of great importance'.
A case of the old brigade of civil servants trying to keep up old standards and of defence spending taking priority
Britain's estimated defence expenditure for 1950-1 - the final year of Marshall Aid - amounted to 7.7 per cent of GNP - at a time when Germany and Japan were not spending a pfennig or a yen on defence
As for Lease Lend the cost of that was huge. The last instalment was not paid off until 61 years later.

Thank you MaizieD for “Gransplaining” all the taxes I and others on here pay.....patronising!!!

Labour spending and costing in greater detail.

Spending

Additional resource spending (PSCE in RDEL and AME) £ (bn)
All new spending is in addition to that announced in all previous fiscal events, up to and including Spending Round 2019
Education
Early Years Education
Expand free tuition through supply-side funding model, increased funding rate, reopen SureStart centres, fund for
adapting foster homes for disabled children 5.6
Schools
Raise three-year spending increase from 2019-20 to £25bn, introduce an arts pupil premium, extend free school meals to
all primary pupils and other additional funding 5.5
Skills and Lifelong Learning
Restore Education Maintenance Allowance, equalise 16-19 funding with key Stage 4, Union Learning Fund 1.4 Lifelong Learning Commission recommendations: free Key Stage 3 and Key Stage 4+ with maintenance grants, restore
ESOL funding 3.3
Higher Education
Abolish tuition fees and restore maintenance grants (RDEL) for full-time and part-time students 13.6
Savings on existing tuition fee system in CDEL: -6.4 Net cost: 7.2
National Youth Service 1.1
Health & Social Care
Health
Raise average annual funding growth to 4.3% in real terms, including funding for public health and Health Education
England 5.5 Expansion of healthcare free at the point of use: free dentistry, prescriptions and car parking in NHS England 1.4
Social Care
Introduce free personal care for over 65s and fill existing projected funding gap 10.8
Work & Pensions
Working age social security
Reforms to Universal Credit pending its replacement, scrap the bedroom tax and reforms to Bereavement Support
Payments, raise Carers Allowance to Jobseeker's Allowance, extend maternity and paternity rights and pay 8.4
Pensions
Restore pension credit and housing benefit eligibility for mixed-age couples, uprate state pension of British pensioners
overseas 0.6
Culture, Media and Sport
Free TV licences for over 75s, British Broadband running costs 2.6
Local Government excluding adult social care
Additional funding through Revenue Support Grant 5.0
including additional Local Government funding for homelessness, National Youth Service, SureStart, Public Health grant and adult
social care but not including additional funding for public sector pay: 20.0
Funding to tackle homelessness 1.1
Other departments
Peace Fund, recruiting 5,000 additional firefighters, vehicle scrappage scheme, Criminal Justice Innovation fund, restoring
legal aid funded Early Legal Help and other Ministry of Justice reforms 1.4
Other
Public sector pay catch-up 5.3 Barnett consequentials: Scotland 5.0 Barnett consequentials: Wales 3.4 Barnett consequentials: Northern Ireland 1.9
Total 82.9

Revenue raising measures

Additional revenue raising measures
2023/24 £ (bn)
Income Tax: Additional Rate payable from £80,000 (45p) and new Super-rich Rate payable from £125,000 (50p)
Mechanical yield: 11.4 Behavioural response and deduction for devolved income tax in Scotland: -6.0 Post-behavioural estimated yield 5.4
Corporate taxation
Gradually reverse cuts to corporation tax to reach 21% (Small Profits Rate) and 26% (main rate) 23.7
Unitary taxation of multinationals 6.3
Taxing income from wealth equitably and efficiently
Tax capital gains at income tax rates, including behavioural response: 9.0 Tax dividends at income tax rates, including behavioural response: 9.0 Additional reduction for uncertainty: -4.0 Post-behavioural estimated yield reduced further for uncertainty 14.0
Financial Transactions Tax
Extend stamp duty reserve duty, including behavioural change 8.8
Tackling tax avoidance and evasion
Fair Tax Programme 6.2
Tax reliefs and expenditures
Efficiency review of corporate tax reliefs 4.3
Reform of R&D funding 4.0
Other
Reverse cuts to inheritance tax and Bank Levy, impose VAT on private school fees, scrap Married Persons Allowance,
introduce a second homes tax 5.2
Additional tax revenue from fiscal multiplier 5.0
Total 82.9

Who knew that only 25% of tax comes from income tax as well?!

So, so helpful to have this all explained.

Must mention it to DH
Perhaps not, I will be subjected to mansplaining as well as he used to work for HMRC.

Greater detail

Fiscal Credibility Rule
Not all of our commitments need to be funded from immediate taxation. We will need to borrow to invest in long-term productive projects that will both save our planet and stand our public sector in good stead financially for decades to come. That will be the job of our National Transformation Fund.
Unlike the current government’s dishonest and misleading approach, which has led to billions of borrowing suddenly being put onto the forecasts by the Office for National Statistics,2 we will be completely transparent about our rules and our intentions.
So in order to give some guidance for the overall path of fiscal policy during the first term of a Labour Government, we commit to the following Fiscal Credibility Rule:
 To eliminate the current budget deficit by the end of the rolling five-year forecast period of the Office for Budget Responsibility
 To improve the strength of the Government’s balance sheet (Public Sector Net Worth) across the course of a Parliament
 To keep interest repayments below 10% of tax revenue
Investment spending raises the productive capacity of the economy as well as providing a boost to demand. Labour believes that borrowing for investment is necessary for a healthy public sector and a healthy economy as a whole, which is why we adopted a current budget target rule in 2016.
To ensure that investment and current spending together are achieving the goal of a strong fiscal position for the Government, the second part of our fiscal rule mandates us to improve the overall balance sheet position of the Government (assets minus liabilities) by the end of the Parliament. So when we invest in taking profitable utilities into democratic public ownership, the public balance sheet will record an increase in debt but an equal or greater increase in public sector assets.
There are times when a deficit target is unwise from both a social and economic point of view. This is most likely to occur in a recession and when monetary policy alone is unable to sufficiently support demand. Therefore we will suspend our Fiscal Credibility Rule when either
(a) The Monetary Policy Committee of the Bank of England advise us that the normal operation of monetary policy is not able to sufficiently stabilise the economy due to the presence of a lower bound, or
(b) Unconventional monetary policy operations – defined as anything other than interest rate adjustment – are expanded by the Bank of England.

MaizieD is correct the BoE does not have actual cash to play with but it does have limitations in it powers, what it does is to borrow against the asset value of UK PLC. As long as we have stability and values don’t go down, lenders are happy they will ride out the peaks and troughs.

In 2008 the regulators lost control of lending causing a minor crash, quantative easing was used along with austerity to regain lenders confidence and the value of sterling recovered until the Brexit vote killed that and now we are bouncing along the bottom.

Lenders are still very cautious, Labours spending plans and taxation ideas could cause a drop in asset values, nationalization and wealth tax would be a worry to them. Similarly the Tories pushing for a hard Brexit with no real certainty of the outcome is a real drag on the economy and that will remain until a permanent solution is found

In the 1930s after the crash many governments embarked on national infrastructure projects, lenders are happy to do that because it promises a better future, they are not happy when the money is used to fund higher wages, or an easier life for the population. There is of course a balance to be found because if wages are too low rebellion wipes out any economic gains.

The above does not apply to China because the government has control of the population, media is censored and if you disagree you are sent to a re-education camp.

Extra tax for high earners will only be the equivalent of a Netflix subscription so I don’t know why all the shock horror this is all going to hit our pockets etc if you want decent services we should be prepared to pay for them.

crystaltips I can assure you that a “Netflix subscription” is an awful lot less than the extra tax I as an individual will pay under Corbyns Labour.

Thank you all. It's great to have the facts. Sadly, I see the anti-intellectual, dumbing down of everything commentators are back too.

Heavens GG13 - how much do you earn?!

I read that for those earning £80,000 it would be the equivalent of a Netflix subscription , maybe that’s wrong I haven’t scrutinised the figures. I’m not a labour supporter btw, but it still doesn’t detract from the fact that we should be prepared to pay for decent services and those who earn more should maybe contribute more.