Budget 2024

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Pantglas2

Labour now have a golden opportunity to guarantee raising the tax threshold from £12570 to a more appropriate level to benefit pensioners and the low paid in their first budget.

A certain vote winner with those voters and it’ll serve the Tories right for looking after the high earners!

But the point is that it doesn't just benefit those with low incomes, everyone would get the reduction in tax, so not really directed enough.

So just carry on penalising pensioners and low paid workers like the Tories have done for the last 5 years? Labour won’t be that stupid….ahem!

Yes, I think that means testing is rarely fair, and as often as not it privileges some lifestyles over others. I don't think it matters if 'better off' parents get CB. If it were rebadged as tax relief, as it used to be, they would be paying for it via higher taxes anyway. The important thing is that all parents get it, and yes, for all children. Arguably the first child is more expensive, as items such as prams and cots can be passed down, even if clothes wear out. I never understood why my mum didn't get it for me, either. By the time my children came along, it was for all children, and (I had two) I think there was more for one than the other, but I can't remember which it was.

Restricting it to a set number of children disadvantages blended families though. If people in a new couple each have three children, for instance, it would be wrong (IMO) for the state to discourage them from becoming a household. If each parent in the new couple got tax relief for their own children it would be fairer, with arrangements being made for the ones without custody to get payments based on agreement or CMS judgements. That would, of course mean that all families with six children would have to get CB for all of them, but that would really apply to very few people, and I can't see anyone deliberately having babies to get the money. We need to encourage the birth rate anyway, with an aging society.

The old family allowance must have been much easier and cheaper to administer. Trying to turn it into a means tested benefit seems to have produced unforeseen consequences. Limiting the number of children for whom it is paid must surely be the easiest way forward, even if better off parents receive it - as was always the case once it was paid for all children. My mother didn’t receive FA as I was an only child and the family could certainly have done with that extra money. I wouldn’t want to go back to those days but I believe the simplest system is to pay FA to all mothers for each child up to a maximum of, say, four.

The answer to that would be to have separate arrangements for single parents, or a universal benefit with a set payment per child.

I don't see the amount of tax being paid as relevant. That is pro-rata to the incomes of the earners. But if two people earn slightly over the threshold between them, and are paying out for childcare and commuting, they should not, IMO, lose out to a family where one person earns nearly as much on their own, and the other pays no tax, and between them only pay for one commute and no childcare.

Apologies for having misunderstood.

Sorry, I should have put those words in italics. They are from a listener Alan who approached Martin Lewis about his son's situation of having to pay back child benefit when couples earning the same do not have to.

Pantglas2

Labour now have a golden opportunity to guarantee raising the tax threshold from £12570 to a more appropriate level to benefit pensioners and the low paid in their first budget.

A certain vote winner with those voters and it’ll serve the Tories right for looking after the high earners!

But the point is that it doesn't just benefit those with low incomes, everyone would get the reduction in tax, so not really directed enough.

I’m so sorry to hear of the tragic death of your daughter in law TinSoldier. That, and the child benefit situation, are both grossly unfair. My sincere condolences. 💐

The child benefit changes are due to the campaigning of Martin Lewis of MoneySavingExpert.

He was approached by a listener, Alan, who brought the anomaly to his attention. He told him this:

www.youtube.com/watch?v=uGv0oibq8Q8

4:30 into the video:

My son’s partner tragically died 34 days after giving birth to twins. My son has taken a new job that pays him £60,000 and is struggling with cost of living and mortgage payments after the loss of a second income [his late wife’s].

HMRC asked him to repay the child benefit. It seems grossly unfair that a couple can earn *£100,000 but a single breadwinner loses out once they earn more than £50,000. Are there plans to change it?

* A couple each earning £50,000.

The Chancellor admitted it was unfair.

Take two people each earning £30,000. In total they would pay tax of £6,900 but would not have to pay back any child benefit as neither earns more than £50,000.

Yet, the single father earning £60,000 would pay tax of £11350.00 (£4,500 more than the couple) and have to pay back all of the child benefit because he earns £10,000 more than £50,000.

A couple each earning £50,000 would pay tax of £14,900 in total. If the single father was earning £100,000 he would pay tax of £27,350. Under the new rules, he would still have to pay back all of the child benefit despite having paid £12,450 more tax than the couple.

How is that fair?

Considering the state of the world right now I would have thought some mention of an increase in defence spending.`

Why was the way CB was worked out an unfair anomaly? If two people work, they should get more help with children not less, as they are likely to have to pay for childcare, commuting and so on, which will be much cheaper for single earner families who are already advantaged by only paying one lot of tax. I think it was much fairer before, as yet again those who can afford for one parent not to work will be subsidised by couples who have both people in work.

IMO CB should be a universal benefit as it used to be, and preferably go back to being a tax allowance (ie Family Allowance) rather than a benefit.

Me too. Shameful.

Totally agree with you. And worse of all they think their disrespect is funny! I’m appalled by the general standards of our politicians, their vocabulary their expectations of freebies too!
I feel their disgraceful behaviour reflects on our youth too and general attitudes. Sad times

Traditionally the chancellor has the privilege of being heard without challenge. However, Hunt thought it clever to snipe at labour and make several unfunny ‘jokes’, thus drawing noise from both sides of the house. He’s an idiot.

Re heckling and shouting, it was dreadful.
Re the budget, reducing NI contributions is a trick which will only benefit some. It won't help pensioners and both workers and some pensioners will pay more tax by virtue of being dragged into the tax paying bracket as both state pensions and the living wage have risen yet the personal allowance remains frozen yet again and will remain so until 2028. Giving with one hand, clawing it back with the other.
Attempts to sort out the unfair anomaly with child benefit are good but not enough and too slow.

Ever since they allowed cameras into the HP it’s become a clowns sideshow…..everyone of these awful people trying to get their faces on tv…..they have forgotten they are public servants , and now think they’re celebrities!

What makes you so worried? The personal allowance is £12,750 and you pay no tax on income up to that level. Anything above that will be taxed at 20%. The state pension will increase by 8.5% next month. Sit down quietly and work it out.

Susie 42 that’s me and I am so worried, I have thought a about trying to get a little job but I am 71 and have worked full time for 55 years and don’t feel I want to

Abolishing NI is not straightforward. The loss in tax income would have to be compensated by increasing other taxes, mainly income tax. That raises the question as to how the tax burden should be distributed. It's easy to apply NI because it simply means identifying those in work. Distinguishing between different groups subject to income tax is more difficult. A blanket increase would mean pensioners paying significantly more tax whereas they are NI-exempt.

Sarnia

growstuff

Sarnia

Whitewavemark2

NHS funding - which comes high on the list of the majority of voter

Nothing extra - zero -

The IFS have warned Hunt of the disastrous result if he fails to provide the necessary funding.

I worked for the NHS for the last 17 years of my working life and the waste is appalling. If a private business was run the way the NHS is it would have gone bankrupt long ago. What it needs is an independent and thorough assessment from top to bottom. £m's are wasted in the current system. Constantly throwing money at it is useless and unsustainable.

What kind of things would you suggest?

Of course, nobody should be throwing money away, but there's also a saying about throwing babies out with the bathwater.

The NHS is top heavy with non-medical staff on higher salaries than most doctors and nurses. Appointments of Diversity managers in the region of £70k a year needs to stop. Today's Matrons would be better employed with efficiently managing their wards, as they used to do, instead of sitting in endless meetings that produce very little. I used to do all the ordering for a busy Maternity Department. Suppliers on NHS contracts charge top prices because it is the NHS. The overspend on that is enormous. Huge savings could be made by tackling these issues without just throwing the NHS more money.

If the NHS got rid of all staff in non direct clinical support roles it would make little difference to the funding shortfall, but leave big gaps in the NHS ability to deliver. No HR, Payroll, Logistics, Works and Maintenance for example. Non clinical staff on high salaries (who are usually former clinicians who have gone into managerial roles) are costing a very small percent of NHS budgets I would imagine, certainly not enough to offset budget cuts.
I do agree there are too many meetings, but matrons never managed wards in the past, the role was equivalent to the current senior nurse role. Unfortunately most meetings senior nurses attend are about meeting statutory guidance, and addressing shortfalls in budgets - bed management being the most time sucking of all. The amount of time spent on managing patient flow because of inadequate resources both in the NHS and in social care provision is completely disproportionate - but there is no solution in the current environment.
I agree with you regarding purchasing. The NHS is bound by government contractual arrangements, individual services are not allowed to purchase off contract. This is intended to ensure the best value, but it doesn’t always work well. There has been a lot of national work around this, particularly with pharmacy contracts.

I’ve put this on the election thread but thought that it could well go on here as it was taken after the budget.

Voting intention

LAB: 46% (+1)
CON: 18% (-2)
RFM: 13% (+1)

Westminster voting intention.

YouGov is showing Labour with a 27 point lead

growstuff

Sarnia

Whitewavemark2

NHS funding - which comes high on the list of the majority of voter

Nothing extra - zero -

The IFS have warned Hunt of the disastrous result if he fails to provide the necessary funding.

I worked for the NHS for the last 17 years of my working life and the waste is appalling. If a private business was run the way the NHS is it would have gone bankrupt long ago. What it needs is an independent and thorough assessment from top to bottom. £m's are wasted in the current system. Constantly throwing money at it is useless and unsustainable.

What kind of things would you suggest?

Of course, nobody should be throwing money away, but there's also a saying about throwing babies out with the bathwater.

The NHS is top heavy with non-medical staff on higher salaries than most doctors and nurses. Appointments of Diversity managers in the region of £70k a year needs to stop. Today's Matrons would be better employed with efficiently managing their wards, as they used to do, instead of sitting in endless meetings that produce very little. I used to do all the ordering for a busy Maternity Department. Suppliers on NHS contracts charge top prices because it is the NHS. The overspend on that is enormous. Huge savings could be made by tackling these issues without just throwing the NHS more money.

MaizieD

I thought this was an interesting report which is well worth reading worth reading. It was published last year.

From the Executive Summary (which is far too long to reproduce in full):

The NHS is in crisis. Elective waiting lists are at their highest ever levels. Every month record numbers of people – reaching the hundreds of thousands – wait more than four hours to be seen in A&E. People are struggling to get GP appointments; those who do and seek a referral are more likely than ever to see it rejected. NHS performance has become a major political problem for the government, with voters considering it the most important issue facing the country after the cost of living.1 Satisfaction with the NHS is at an all-time low. At the heart of this crisis is a productivity puzzle.

www.instituteforgovernment.org.uk/sites/default/files/2023-06/nhs-productivity-puzzle_0.pdf

The conclusion to that report is worth reading:

"This report set out to understand why activity in hospitals has not risen in line with recent funding and staffing increases. It offers three answers.

First, and most directly, hospitals are running at above full capacity. They do not have enough beds, and too many of the ones they do have are full of people who should not be there. A lack of capital investment, notably preventing a boost in low diagnostic equipment stocks, is slowing the
response to this problem.

Second, despite notable increases in the headline number of staff the NHS is losing too many experienced employees, and they are being replaced with more junior people who are naturally less experienced and who need more support. Staff burnout, low morale and pay concerns are principle reasons for this.

Third, the NHS is badly undermanaged – and system-level policy changes over the past decade have muddied incentives and placed additional constraints on those running trusts, making their job harder.

Clearly the three are connected."

He said that during his budget speech, saying that it was simply another tax on income and he didn’t agree with this ‘double taxation’. He also made the point that it’s an additional tax on employers. No, it does not mean that he wants those who can afford it to have private healthcare. NI just goes into the pot along with other taxes, it doesn’t fund the NHS or pensions. Obviously how equivalent tax revenue would be raised would have to be considered before any plans to scrap NI altogether were put in place.

MayBee70

Just said on Sky News that Hunt had said his long term aim is to eliminate National Insurance altogether. By that does he mean he wants everyone (who can afford it) to have private medical insurance?

I doubt very much whether Hunt will be Chancellor for long enough to achieve his long-term aim.

There has been talk for a long time about amalgamating income tax and National Insurance. Both end up in the same place anyway. It doesn't necessarily mean that people would have to have private medical insurance (although it doesn't mean that people won't anyway if the NHS is underfunded).