Looking Back On 14 Years Of Austerity - For What?

You mean ‘well off people who choose private healthcare and education would have more to spend’. I doubt it, they would still have those preferences.

People who choose private healthcare can do that even if taxes go up. Their choice. I’d pay more taxes to ensure good health, education and other services were ensured for everyone

We don't need higher taxes. Spending would generate a higher tax take. Taxation really doesn't fund spending.

The USA is the very last example we should be following. That is what has got us where we are now. And what an awful place it is to be poor in, or to have a condition that you can't afford to pay for the treatment of.

I simply don’t accept that providing more services to the population free of charge to everyone actually works for the UK.

How many times do I have to explain the multiplier effect before anyone understands it? GDP measures the value of economic activity in the domestic economy. Every pound the state invests in the NHS generates £4 worth of economic activity, so that is an additional £4 of GDP. This applies to most state spending except, apparently, defence spending.

Too much is given away making the rich richer,

The rich get richer because the tax system allows them to hang on to more of their wealth than it does people in employment or on benefits. The tax system can be changed. It's not set in stone that the wealthy should be advantaged by it.

However, if everyone is happy with the status quo; with an economic system that works against the poor and allows the wealthy to become wealthier, where more and more people fall into poverty every year and food banks proliferate, schools fall apart, rivers and seas get choked with sewage and hospital waiting lists get longer and longer, councils have to close libraries and sell their assets so as to provide pared down very basic services, where criminal cases take years to get to court, I really cannot do anything about it, can I?

All I can say is that it could be different, even if we only reverted to the Keynesian economics of the post war years. But people plainly don't want it to be any different. Just to have a bit moan about it...

Germanshepherdsmum

It’s very easy to call for higher taxes if that would have little effect on you. When people call for higher taxes they generally want high earners to pay more tax, and for capital gains tax and dividend tax to be increased.

As it happens it would affect me, I believe property tax and inheritance should be taxed more, income tax is probably high enough it’s the capital taxation of all property that should be increased.

I do not expect the millionaires on Gransnet to agree with me

A increase in income tax would affect many of us.

The only property tax we have, apart from capital gains tax on sale of a property which isn’t your principal private residence, is stamp duty land tax. Increasing that would affect many people wanting to buy a home, as well as businesses seeking to expand.

As regards IHT, you will know that the threshold doesn’t start at £1m for everyone by any means.

Presumably you don’t live in the SE, where quite modest homes are valued at over £1m.

However, if everyone is happy with the status quo; with an economic system that works against the poor and allows the wealthy to become wealthier, where more and more people fall into poverty every year and food banks proliferate, schools fall apart, rivers and seas get choked with sewage and hospital waiting lists get longer and longer, councils have to close libraries and sell their assets so as to provide pared down very basic services, where criminal cases take years to get to court, I really cannot do anything about it, can I?

It seems many people in general are more than happy with this Maizie, as long as they can hang on to their ‘hard earned’ wealth.

What a selfish generation we are, overall. We didn’t accumulate all this personal wealth solely through our unique talents and capacity for hard work. We accumulated it because we were lucky enough to be (mainly) born post war, into a newly formed welfare state, where we enjoyed all the benefits of free education, health care, secure jobs and a political will to create a better country. This helped our generation to enjoy an unprecedented level of social mobility which has given many of us a comfortable later life.

Our children and grandchildren’s generations do not enjoy these advantages, and social mobility has decreased accordingly. Are we the first generation not to want our children and grandchildren to have better lives than we had? Or is it ok as long as our own children and grandchildren are doing ok? Even those that are have the odds stacked so heavily against them that they can never hope to achieve what we took for granted.

I love this. What Tory rule does to us all!

Germanshepherdsmum

A increase in income tax would affect many of us.

The only property tax we have, apart from capital gains tax on sale of a property which isn’t your principal private residence, is stamp duty land tax. Increasing that would affect many people wanting to buy a home, as well as businesses seeking to expand.

As regards IHT, you will know that the threshold doesn’t start at £1m for everyone by any means.

Presumably you don’t live in the SE, where quite modest homes are valued at over £1m.

Top rate income tax is 50% increasing that is a disincentive.
It’s the wealth that needs taxing maybe annually by increasing Council Tax, on sale by applying CGT or cutting IHT allowance.
Tory voters won’t like it one bit, but it’s not likely to be a Tory government next year.

They haven’t delivered the plan that austerity was going to produce

Katie, the highest rate of income tax at present is 45% but I agree that increasing it would be a disincentive.

Even Starmer has ruled out a wealth tax. Many are asset rich but cash poor. Applying CGT to the sale of one’s only home would bring the housing market to its knees - people couldn’t afford to move and it would rock the mortgage market, throwing many into potential negative equity. And do you realise that the IHT threshold has remained unchanged since 2009; the main residence allowance was introduced in 2017 - reducing either of these would bring so many ordinary people’s estates into taxation that no sensible government would consider it. You seem to think that only Conservative voters are wealthy - that is far from the case.

“Applying CGT to the sale of one’s only home would bring the housing market to its knees - people couldn’t afford to move and it would rock the mortgage market, throwing many into potential negative equity.”

That really is scaremongering, you only pay CGT on the “gain”it can’t put a house into negative equity. The amount paid would be small for those with mortgages because their equity is restricted, those with full ownership would be paying much more but they have the cash to pay the tax.
It would certainly put a damper on house price inflation which is good for first time buyers.

The value of Estates declared for IHT each year is around £100 billion abolishing tax free allowance on IHT would raise £40 billion a year, that would make a difference to services in the UK, beneficiaries would just have to make do with 60%.

All of this is very much tongue in cheek I don’t see any government actually making those changes but there is a lot of untaxed wealth that could contribute.

Katie, house prices have risen considerably and paying CGT on the gain would likely mean you could not afford to move, or to pay off your mortgage. CGT would be levied on the gain regardless of how much equity you have in the house.

If the IHT threshold were removed then 40% of every estate, no matter how small, would go to the state. For those who don’t own their home, that’s 40% of whatever they have scraped together over their lifetime.

Why make such suggestions ‘tongue in cheek’?

It might not sound fair to some, but I am in favour of a higher IHT bill when someone leaves their wealth to someone other than their own direct child. So if Aunty Flo or cousin Bill or the next door neighbours are beneficiaries, then they should be the ones clobbered with a crippling tax bill. Maybe 60+% of the estate. They would just have to make do. I also think the seven year survival rule is pointless, but that's a separate issue.

There’s a thought Joseanne

What about those who are childless? Maybe not by choice. Maybe their children have predeceased them.

Would you also remove the relief given for charitable legacies?

I was thinking more of auntie flo

Would you also remove the relief given for charitable legacies? I did have that in mind actually. So, personally yes. But I've no doubt my reasons are biased.

Iam64

I was thinking more of auntie flo

Definitely.

What have people got against poor old Auntie Flo? .

Seriously, the trouble with rules that centre on relationships is that people don't conform to them. As an example, workplace rules about compassionate leave for bereavement often take no account of the fact that not everyone is brought up by their biological parents, and if someone in that position loses a grandparent (or Auntie Flo), or a second cousin who did bring them up they will feel as bad as someone losing a parent. Worse in some cases. The same would apply to inheritance - the relationship is not always indicative of the reality.

It was Osborne and the Tory-Lib Dem coalition which began the wrecking of the public sector which has continued since 2014 - cuts to local authority budgets, underfunding the NHS, little social housing being built, the Truss budget disaster and mortgage rises, cuts to youth services and more. I've had enough of the Tories (and I still worry the Lib Dems would prop them up again).

The thing about “wealth” is that it is all relative! I live in the SE, in a very modest 4 bed Victorian terrace valued at around £450,000 in todays market. We are comfortable, not wealthy, however compared to some of peers, who have much lower standard of living we seem “wealthy” to them. Most of my friends are “more comfortably” off than us and have nice, bigger houses and newer cars. We are all relatively happy and it would always be nice to have a bit more money. I would happily pay 1p in the £ more in taxes if it meant my school teacher daughter and goddaughter nurse could be better paid and have half a chance of getting in the property ladder. Our 38 year old son is only just buying his first house in Bristol. I dearly hope we have a shift in govt if Sunak ever announces a GE date.

I have absolutely no issue at all with inherited wealth, my dear parents worked hard, my dad was a higher lever tax payer for much of his later working life, he paid tax on his income, he then paid tax in his savings, and any investments. I also think that people making money should have the choice of paying for healthcare and education, but this shouldn’t be because the public healthcare and education systems are failing, but because they choose to do this.

This country is a mess and I pity our younger generation!

JaneJudge

They haven’t delivered the plan that austerity was going to produce

They haven't delivered the plan because the 'plan' was never going to work.

The 'plan' was to depend on private enterprise to create 'growth'.

How does private enterprise create 'growth'?

It creates it by selling more of its goods and services.

Who does it sell to?

It sells to consumers and it sells to the public sector (because the public sector doesn't produce any of the goods and services it needs to function)

So this 'growth' depends on consumers and the public sector having money to buy those goods and services.

What did 'austerity' do?

'Austerity' cut public spending, froze public sector wages or cut public sector jobs altogether, it froze or cut welfare payments. It removed sources of private sector profits and caused many businesses to get rid of staff because they were no longer making enough money to be able to pay their wages and no longer needed them because the work which earned the money for paying staff was no longer available.

If you cut wages, cut jobs and remove a significant source of private sector profits what result do you expect?
How can you expect the private sector to 'grow' if there is less money around for it to earn?

And how could the private sector be expected to invest in new businesses or 'growing' existing businesses if it can't see any prospect of making a profit?

I am tired of hearing that the private sector creates wealth. It doesn't, it hoovers up money from the consumers of its goods and services. If it has no-one to hoover money up from it goes bust...

It is society that has played a large part in the state of the NHS as it is today because of the demands placed upon it.
Science has progressed and there is so much more the NHS can provide than in its inception
There are too many managers earning very high salaries one who was employed and played a large part in the post office scandal .
As a society the demands we put on it far exceed what is possible there are many very simple ways of improving the service . No one party is responsible for the problem they must all take responsibility and work together for the good of the NHS and the country but every party and politician seems unable to do this .It is easier to say well they did this the ---- fault is with the other party

NotSpagetti Absolutely NHS for everyone.

The pandemic masked the devastating effect of Brexit. Enabling Johnson and his team of incompetents to kick it into the long grass. Now the original architect of Brexit has been made a Lord and is in charge of our foreign policy. Many of the farming lobby, having been heavily subsidised by the EU for decades, voted for Brexit. Now they're striking because they can't make a living. You couldn't make it up could you!