The Budget

Barrygirl

There are still 2.5 million (even with the new extension) who have not and will not receive a penny piece. I know. I am one of them!

So am I!

Not sure I actually posted that they went hand in hand, more a throw away comment about the good old days

That was in reply to Dinahmo

Interest rates were high in 1980 but then inflation peaked at 22%, so whatever you bought looked cheap next year - if you were brave enough to buy. We can’t really blame Thatcher for high interest rates, the chaos she inherited had to be put right, but then went completely over the top and did a great deal of damage.

As Dinahmo explained the taxation system changed and house buyers got a better deal than tenants, but rents in those days seemed much more affordable.

GrannyGravy13

Oh yes Katie59 the good old days high taxes for all and exorbitant mortgage interest rates. Good for anybody with savings though!

But nothing to do with war loans as far as I am aware.

growstuff

Barrygirl

There are still 2.5 million (even with the new extension) who have not and will not receive a penny piece. I know. I am one of them!

So am I!

Some of the moves the Tories are making are wicked, quite wicked, but then ...

I note that you're not answering my question, Katie59. Perhaps you missed it.

Who have we 'borrowed' from?

Message withdrawn at poster's request.

One step nearer to a cash free society. This is how the future will be I hope.

I'm just astounded that so many people are happy to have their every move and financial transaction monitored and their data passed on to heaven knows who...

I don't see this as a benign or welcome move at all.

I’m sure I’m not the only one concerned about people who need cash because they don’t have plastic.
Or are we expecting that by the time cash free finally arrives, all the people who don’t have debit cards, or bank accounts they can use will be dead?

The Budget has been criticised by the Institute of Fiscal Studies, the Resolution Foundation and the Centre for Policy Studies. The Office for Budget Responsibility has expressed concern.

I can just imagine what kind of headlines there would be if in any Labour budget had attracted that level of criticism.

It is the most serious criticism a budget has ever received..

Whitewavemark2

It is the most serious criticism a budget has ever received..

I can't vouch for that because I'm not aware of a league table of budget criticism.

However, I have read the original statements and reasoning from these organisations (and many others who have valid criticisms) and the consensus is pretty damning.

Financially, there are too many questions and it doesn't offer the "levelling up" of regions the government promised. There are sweeteners for Teesside, which the government wants to keep onside, but it's divisive because the big metropolitan areas and smaller towns in the Midlands will get nothing and the cuts to councils and lack of funding for the NHS, education and no mention of social care will mean that normal people will be worse off.

There is little attempt to address a society which is becoming more unequal.

There is no recognition of the huge levels of unemployment which the country is about to face, but what does that matter? The majority seem to think people deserve to lose their jobs because they underperform.

Freeports will be a disaster for the country and do almost nothing for employment or GDP. The country will become a hub for smuggling and tax evasion.

30 billion cut to NHS I thought the Tories promised more to the NHS Disgraceful And thoses clapping for the NHS they need a pay rise

The government are damned if they do and damned if they dont whatever they do whatever the issue

MaizieD

I note that you're not answering my question, Katie59. Perhaps you missed it.

Who have we 'borrowed' from?

Sorry for the delay replying, distracted by other stuff

The Government borrows from the Financial institutions both at home and overseas, including The Bank of England who hold nearly half of UK debt. The Govt pay interest to whoever holds the debt, because interest rates are very low that is not a problem.

The UK is a very safe place to invest and lenders are confident that we will be able to repay in the future.

Premium Bonds, National Savings are also loans to the govt. If you have money on deposit with your bank you are lending them money which they in turn use for other purposes, including mortgages and loans to business.

In other words, what is a loan to one purpose is an investment for another.

including The Bank of England who hold nearly half of UK debt.

It probably holds more than half of the debt by now. You do realise that the BoE 'belongs' to the country and is our source of money? It isn't going to ask for repayment or even interest on the money it has created on the instruction of the government.

As Dinahmo points out, bonds and gilts are investment vehicles. They are boring, but very safe because the government will never renege on them. They will always pay the interest due and redeem their full value. Some are held by international investors but most are held by UK institutions, including pension funds, and private investors. Then there is NSI and Premium bonds.

So, part of the deficit is actually people's savings and investments, the rest is owed to no-one; unless you think the government can owe itself money.

All the nonsense about a wage increase for the NHS workers being 'unaffordable' is a barefaced lie. One more to add to the government's long tally of lies. The decision to offer this pitiful increase is a political one, not an economic one.

People might find this interesting:

www.taxresearch.org.uk/Blog/2021/03/02/the-national-debt-paranoia/

The Tories in principle largely believe in a small state, where individuals are largely expected to fend for themselves unless in times of war etc when they are expected to fend for the state.

To achieve this of course means minimal state intervention, so in their ideal state most public services would be privatised. For the majority of the population this in practice would mean a much poorer existence in terms of having to find the funds for health and social care as well as other public services and mitigation against exploitation in all areas like environment, employment, that we take for granted. Taken to extremes this would also mean poor food quality control and other such areas.

A low tax, low intervention regime is many in the right’s wet dream.

Of course this is extreme, but coming back along the political spectrum, you will quickly come to this governments place in it.

To convince the population of the measures that they are constantly pursuing, you have the nonsense of the concept of “good housekeeping” and the need for austerity, all of course a political choice not an economic one as they would have you believe.

I think that most of the voting population would like to achieve a balance to the left of what many Tories support, where a mixed economy thrives, the tax system is seen as fair and a sensible welfare state is achieved. None of this is being achieved at present.

WwMk2 good post.

The BoE acts like any other bank, it lends the Govt say £1bn at 2% interest for 10 yrs, at the end of the term it may well take out another loan to pay it off. The bank controls the money supply of the nation, it in fact “prints” all the money in circulation, increasing that in times of stress, reducing it to prevent inflation, once increased it has to be repaid most often long term.
As long as lenders are confident that it will be repaid there is no problem, the BoE has to act within prudent banking principles or lenders loose confidence and interest rates go up or ultimately the bank goes bankrupt. (National banks regularly do).

The BoE acts like any other bank, it lends the Govt say £1bn at 2% interest for 10 yrs, at the end of the term it may well take out another loan to pay it

The Bank of England is the source of our supply of money. It is the source of all money spent by the government. It is actually obliged, by law, to pay all government bills. Are you really trying to tell us that the government has to 'pay it back' for all the money it expends on behalf of the state? That is beyond the realms of logic.

I suppose that you're going to tell us that the government 'repays' the BoE out of tax revenue? Taxes paid with the money that the BoE actually issued on behalf of the government in the first place...

As long as lenders are confident that it will be repaid there is no problem,

You can say that again. There will never be a problem because the BoE, the financial arm of the government, issues all the nation's money. It cannot go bankrupt. It doesn't have to act like a commercial bank at all.

Commercial banks are, in the end, profit making institutions. The BoE isn't. The country is not a profit making organisation. Government is supposed to use its money issuing powers to administer the government and to provide services for its citizens. It's not supposed to make a profit from this. We are a country, not a grocers shop in Grantham...

Any national bank can go bankrupt if it provides the politicians with more money than the country is worth, the currency gets devalued and the national asset value spirals down with it.

The national debt remains (fact) until it is either repaid or inflation diminishes it, the debt from WW2 persisted for many decades. The asset value of the UK is around 5 or 6 times borrowings, along as the BoE keeps control of the economy there won’t be a problem, we do need a long period of political stability now to recover from recent setbacks.

WW2 posts-

"I think that most of the voting population would like to achieve a balance to the left of what many Tories support, where a mixed economy thrives, the tax system is seen as fair and a sensible welfare state is achieved. None of this is being achieved at present."

This government was not elected by most of the voting population or even most of the voters who turned out to vote in the last GE when the Tories got an 80 seat majority on the basis of a minority of the votes.

We should stop pretending that the UK is a democracy.

varian

WW2 posts-

"I think that most of the voting population would like to achieve a balance to the left of what many Tories support, where a mixed economy thrives, the tax system is seen as fair and a sensible welfare state is achieved. None of this is being achieved at present."

This government was not elected by most of the voting population or even most of the voters who turned out to vote in the last GE when the Tories got an 80 seat majority on the basis of a minority of the votes.

We should stop pretending that the UK is a democracy.

That is why it isn’t happening