Budget

Driving from work to home last night I thought perhaps we should diversify our business quite a bit and start up a cone lending service ( specialising in money wasting projects) we could set special prices for the LA too

If PH is considered to have overspent what would happen if the Labour party got in?

This idea that the government has a finite amount of money to spend (and that it has to 'borrow' money) is a big con. There is no limit to the amount of money a government can 'issue' (and it is the state,represented by 'the government' that issues money). It was applicable before the early 1970s when currency was backed by gold and silver but the 'gold standard' was abandoned in 1971 and since then there has been no limit to the issue of currency so long as there are goods and services available to buy and so long as a significant proportion of the currency issued is returned to the government by way of tax or is taken out of circulation through savings

This is one explanation of how money 'works' in the economy and has a good diagram which shows how it 'flows'.

www.matchesinthedark.uk/spending-chains-sankey-diagrams/

The frustrating thing about the 'austerity' line that the tories have been feeding the nation with since 2010 is that it is making the country poorer because it is taking money out of the economy which means there is less to go round. No amount of cutting public services (with the resultant loss of income for people who lose their jobs and businesses which lose sales when the services' spending is cut) will grow the economy in any way. It's no good saying that private enterprise will supply products and services instead because where is the money going to come from to pay for them if ordinary people don't have very much money and the government isn't spending?

There is no point in the government having a 'surplus'; having surplus 'money' isn't a state virtue; it's just dead and valueless if it's not being used.

Economists have been saying for years and years that a national budget is nothing like a household budget but promulgation of that 'belief' suits certain political ideologies and, like 'take back control' it is a very powerful, if completely meaningless, notion.

I can think of an even better solution : Cancel it !!

A vote for this shambolic affair should never have been implemented in the first place. Was it cast to keep these useless MP's in a job knowing what the outcome would have led to in prolonging their positions in Parliament ?
Then after their " playing for time " scenario's come next year,it'll be an even bigger and worse fiasco. Watch this space.

Particularly as you are not giving us any detail,such as the actual percentage.
9,300 out of 83,400

researchbriefings.files.parliament.uk/documents/SN04334/SN04334.pdf

Maizie so that expert on the news all day after the budget was wrong?

Well, actually, nonnie, he was... government has to spend money into the economy before it can take it out in tax.

The link I posted explains it.

And this does:

www.facebook.com/GowerInitiative/

Thanks, Jalima

Percentage of foreign nationals in England & Wales 11%

Not 'very high'

I think for a change Hammond got this right. He raised the personal allowance to 12,500 a year before he promised to when in coalition with Lib Dems, He also put up NIC for those who earn above £50,000 on new limit set as higher threshold. He gave more money to NHS and schools got one off sweetener of £10,000 for primary and £50,000 for secondary schools. He raised minimal wage too. So those in work who earn least will gain from both raised threshold and rise in minimum wage. A person working for minimum wage will almost be taken out of paying tax now so boost to low earners. Extra money to sort out problems in UC. It was a Conservative budget and even though they are saying austerity is over they are never going to be reckless with money as Labour would by handing out benefits hand over fist.

Pensioners already have protection of triple lock. They are best cared for group at the moment.

What the Budget doesn’t make clear is that there would less austerity if there was no Brexit at all.

Again, every reputable economic forecast shows that were Britain not leaving the EU then economic growth would be stronger and there would be more money available. Hammond's extra £160m to fight terror in Budget spree. We would not be among the slowest-growing of the European economies but be back at the top, where we were before we voted for Brexit.

Spending could be higher, taxes lower or borrowing reduced — indeed, 10 years on from the crash, the country would be running a surplus and the austerity required when the money ran out would be over. To coin a phrase, we would be sharing the proceeds of Remain.

www.standard.co.uk/comment/comment/evening-standard-comment-brexit-not-this-budget-will-decide-our-future-merkels-departure-is-an-a3974641.html

You've missed all the cuts to public services, newnanny which cancel out anything which he might have 'given away'.

You've also missed the rise in National Insurance contributions which negate much of the increase in the tax allowance (I posted something about that on Tuesday)

Labour are not 'reckless with money', you're just repeating a mindless slogan which, when the record of Labour and Tory governments over the past 40 years or more is analysed, turns out to be a lie. In fact, it's tory governments, including the current one, which have left the country most in debt. This is not left-wing propaganda, this is verifiable hard fact.

EU growing less quickly than rest of the world so if we trade with rest of the world we will grow quicker than if shackled to EU. EU has so many rules and regulations it takes about 7 years to get a deal with them. Many countries give up as EU so very inflexible and do not negotiate just make demands. They also are so very wasteful with MEP's not only having huge salaries but allowed to claim ridiculous expenses with no receipts and given eye watering pensions. We tried to improve from within but failed so voted out.

I heard Hammond say Air Ambulance getting some funding. NHS and schools gaining. LA getting money to sort out pot holes, faster internet for rural places. No cuts there. More money for counter terrorism too and MOD. Labour are reckless with money, remember Brown? He made more people dependent on benefits than any other PM. People could not afford to get a job as better off on benefits. Introducing a cap £23,000 has made more people get off their back sides and work if they are able.

The headteacher of a comprehensive in Philip Hammond’s constituency has expressed disappointment at the chancellor’s budget suggestion that a bonus for schools could pay for “little extras”, months after she outlined to him the financial crisis her school was facing.

www.theguardian.com/education/2018/nov/02/headteacher-who-told-hammond-of-funding-crisis-saddened-by-little-extras

EU growing less quickly than rest of the world so if we trade with rest of the world we will grow quicker than if shackled to EU.

The Budget has nothing to do with your fantasies about 'trading with the rest of the world' post Brexit. newnanny

From Wikipedia.

A list of countries with whom the EU (and so, the UK, by virtue of our membership of the EU) Has a trading relationship:

en.wikipedia.org/wiki/List_of_countries_by_leading_trade_partners

There are an awful lot of them

Maizie your links indicate that all any government has to do is spend lots of money and all will be well. Hmm, you can make any argument you like but government spending doesn't all come back in taxes etc. If it were as simple as you suggest then all governments would do it.

Don't need wiki to tell me how many countries we trade with as part of the EU, I posted a link to a government all party committee on another thread, it is over 70. We will need to pay a lot of civil servants for a long time to negotiate a deal with each one of them.

Maizie your links indicate that all any government has to do is spend lots of money and all will be well.

I think what you are missing here is that it is the state that creates/issues money. So it can spend whatever it likes with no detriment to anyone or anything. But it can only spend if there are available resources (such as infrastucture, NHS etc) to spend on. If there are no available resources there is a) no point in creating/issuing any more money and b) money can be returned to the issuer by taxation. This then neutralises the 'money'. Inflation is a fear but it occurs partly when there is nothing 'spare' to 'spend' the surplus money on so scarce resources are raised in price. But taxing back the surplus money (or leaving it as 'dead' money in savings) curbs inflation.

You note that not all money is returned via taxation. What isn't spent and returned as tax is retained as 'savings. Savings have to be spent eventually, so they eventually do get returned by taxation. If they're not spent they have no effect on the economy at all. Dead money, doing nothing.

This is very simplistic stuff. It is more complex really but the main ideas of 'spend then tax' and the state being the source of 'money, are key to understanding how an economy really works.

Don't need wiki to tell me how many countries we trade with as part of the EU

Sorry, I posted that for newnanny, really, not you Nonnie

Borrowing to spend does not work either, Hollande did this during recession and France's deficit shot up. Brown did this in spades and ran up the deb in UK. During period of prosperity and growth more wages paid, public confidence high and so the public spends, more paid in taxes etc. during periods of recession public confidence to spend lower and so less spend and less taxes collected. The higher our deficit the more interest we have to pay and the more money wasted that could have been spent on schools etc. Best to pay deficit down so less interest to pay.

Germany does not do too badly by running a surplus.

Missed the point newnanny. Governments with a sovereign currency don't have to borrow anything. They can create new money themselves. The fixation on borrowing is a hangover from the days of the gold standard when the money supply was limited by gold and silver reserves which backed it

Running deficits is not a problem. Try looking at 'sectoral balances'. Government deficits are only a problem if the money supply is limited and governments have to borrow to pay for the public services they run, especially if interest rates are high (which they aren't at the moment).

During period of prosperity and growth more wages paid, public confidence high and so the public spends, more paid in taxes etc.

Where do you think the money comes from which fuels that prosperity?

Higher employment, more people have more money to spend, global markets doing well. Our go government pays more in interest servicing our borrowing than whole of education budget. Having huge deficit is not good and we need to pay it down so more to spend on public services.

''Philip Hammond’s budget, which was billed as marking an end to austerity, will actually benefit rich families 14 times more than the poor, new analysis has revealed.

The Resolution Foundation crunched the numbers on the latest budget finding almost half of the income tax are set to go to the top ten per cent of households.

Households in the top cohort will gain £410 from income tax and benefits changes announced yesterday, whereas those in the poorest ten per cent will gain just £30.

Today the Chancellor admitted higher earners will “get a bit more” after putting much of the focus in parliament on a promise to raise the tax-free personal allowance in Income Tax – which hands £130 a year to any worker earning over £12,500 from April.

But he also followed through on a pledge to hike the 40p tax rate threshold from £46,350 to £50,000, meaning the richest 13 per cent of Brits will be able to earn much more before they start paying higher tax – gaining £860 a year.

Resolution Foundation director Torsten Bell warned the Budget “spelt an easing rather than an end to austerity”.

He added: “Income tax cuts announced yesterday will overwhelmingly benefit richer households, with almost half of the long term gains going to the top ten per cent of households.''

So, absolutely Zero, Zilch for me as I am already below the tax threshold.

The other thing that really concerns me is the minimum wage for under 25s, when I think that at that age I had worked for 8.9 years, paying tax & NI, completing my 'apprenticeship' after 3 and thereafter on a full pay with seniority top ups. Married, saved like mad, had given up work to have DD1 and with DD2 on the way. Now a 25 y/o can legally be paid less than £4 an hour, leaving their parents obliged to support them financially while they are fully fledged adults. Shocking.

Granny23 did the Resolution Foundation include the increase in NI contributions in their calculations?

Does anyone know how income tax thresholds have changed over the years? Has the higher rate threshold increased more or less than the lower rate threshold? This may have influenced the Chancellor.

Maizie I appreciate that you believe what you say but I don't agree and don't think we will ever agree. It reminds me of someone who genuinely believed it when she told me that if the government wanted more money they could easily invest in the stock market to get it. These theories are fine as theories but it would be good to have examples of anywhere they have actually worked.

Nonnie I believe you are right that they did not include the NI contributions in their calculations. As '' The Resolution Foundation is an independent British think tank established in 2005. Its stated aim is to improve the standard of living of low- and middle-income families.'' it would not suit their Agenda to include this give with one hand and take with the other' aspect of the Budget.

So hard these days to find unbiased reporting of FACTS. Who has the time to seek out and compare reports from all sources? Even Government statements are subject to spin.