Rachel Reeves To Be The New George Osborne?

George Osborne isn't that who we were discussing🤔

GrannyGravy13

I 100% agree with Calendargirl

Me too!

Great post

From the Resolution Foundation which is an independent think-tank, therefore should have no overt political leanings. Their aim is to improve living standards for low to middle income people. That would include many pensioners too.

I think David Willetts (nicknamed Two-Brains at one time) is part of it. Was a Conservative MP and now in the House of Lords.

Whitewavemark2

A more nuanced analysis of what choices Reeves may have.

Challenge 1
Ending austerity
With local government slashed, prisons at capacity and a court case backlog, averting austerity is easier said than done. Plans inherited from Jeremy Hunt were for some public services to be cut even more over this parliament. There are plans to raise spending on schools, defence and the NHS, but other departments are suffering, including the Home Office. Avoiding further cuts will require £20bn of extra spending, and more if Reeves wants to undo the legacy of previous bouts of austerity.
Challenge 2
Funding public services
The chancellor has been clear she plans to balance day-to-day public spending with tax receipts, probably by the end of the parliament. So any extra money for public services will require tax rises, on top of the £24bn already announced by Hunt.
Given that Reeves has promised not to touch VAT, income tax and national insurance, which account for three-quarters of all tax revenues, her room for manoeuvre is limited.
But other tax options are available. Capital gains tax is ripe for reform, as rates are unjustifiably lower than on other forms of income. For example, the top rate of tax on employment income is 53%, but some capital gains face a top rate of only 20%.
Reeves should also make CGT harder to avoid by closing loopholes, including those allowing the wealthy to leave the country without paying tax. Overall, this package of changes could raise around £12bn. Some will complain that capital will just leave the country (hence the exit charge), but equalising the tax regime will generate revenue and leave a better system.
Inheritance tax is much hated, despite fewer than one in 20 estates paying it. That’s partly because the super wealthy are often able to avoid it altogether. Clamping down on loopholes would be fair, and could raise around £2bn.
Pension taxation is another area for reform, but the chancellor must be careful not to discourage people from saving. That is likely to rule out cutting pensions tax relief, but an alternative would be to apply NI to employers’ pension contributions. Doing so would raise £8bn even after combining this with a move to exclude workers’ contributions from NI to make their savings go further. Critics will argue that this will disincentivise employers from putting more into workers’ pension pots. But it remains the simplest and least damaging way to raise extra revenue from pensions.
Challenge 3
Investing in Britain’s future
The chancellor wants to put growth at the heart of her budget. Expect lots of policy announcements, backed by increased public investment and infrastructure spending. But again, she has inherited plans from Hunt to scale back public investment. If she instead tried to maintain this at 2.4% of GDP, that would involve around £30bn a year of extra spending by the end of the parliament.
Providing the extra investment needed inour public services and infrastructure – from modernising the energy grid to building homes and better transport links – within the current fiscal rules would require major tax rises or spending cuts elsewhere. That is not realistic, so the chancellor has indicated she will tweak the existing rule of debt having to fall as a share of GDP by the end of the forecast period.
Better would be a new “public sector net worth” rule that recognises Britain’s public assets and liabilities. This, accompanied by scrutiny of infrastructure spending to ensure value for money and well-planned projects, would reassure markets that government spending is under control. It would also help deliver the investment Britain so badly needs.

Resolution Foundation.

Great post. Perhaps Reeves should refer to this. Would be less painful instead of punishing pensioners who are a soft touch.

heavenlyheath

Of course he is a millionaire.

Who is?

John Caudwell? James Dyson? George Osborne?

Of course he is a millionaire.

MaggsMcG

But they still send billions to countries that spend it on the things we don't. Also billions for environmental causes that never get off the ground and more billions on illegal immigrants. No wonder the countries known as a soft touch. We need to get a lot tougher.

"But they still send billions to countries that spend it on the things we don't"

What examples do you have in mind?

But they still send billions to countries that spend it on the things we don't. Also billions for environmental causes that never get off the ground and more billions on illegal immigrants. No wonder the countries known as a soft touch. We need to get a lot tougher.

MaizieD

Trueloveways

2010 National debt = 1 trillion, 2024 national debt = 2.5 trillion, austerity didn’t help or cutting back of all public services. Rachel Reeves is nothing like George Osborne.

'National debt' is really unimportant. Britain has had a 'national debt' for centuries. It has manged perfectly well. It represents the savings of institutions and individuals, money that has not returned to the government via taxation. Actually, about a third of it is owned by the government as a result of various bouts of quantitative Easing over the past 20 years.

If push comes to shove, we've still got a few tonnes of gold we could sell.

Allira

Fleurpepper

For the second time tonight, I shall be sharing this. True patriotism from John Caudwell about paying tax in UK:

Billionaire Caudwell says he is a ‘patriot’, and took a swipe at the wealthy individuals who are threatening to leave the country should they be asked to put more into the national pot. The Labour government is set to deliver its first budget at the end of the month.

It’s rumoured that specific windfall taxes and a potential hike to the capital gains tax could be implemented by Chancellor Rachel Reeves. The party has already confirmed that they will be charging VAT on private school fees, which has caused some discontent among the upper classes.
Patriotic billionaire ‘staying right here’

But those with the money are being urged to cough-up what they owe by Mr. Caudwell. On Sunday, he made an impassioned defence of the UK, lauding our education level, cultural significance, and sites of historical value. Why aren’t more billionaires saying this?'

Unlike people like Dyson, who went on about Brexit and patriotism, and then as soon as, closed his production in the UK and moved it to a country far away with cheap labour and low costs. What sort of patriotism is that?

Why do you keep mentioning Dyson as if he's a tax evader?

He is not, he pays his taxes in full in this country. He employs over 3,000 people in the UK and started up The Dyson Institute of Engineering and Technology to train future engineers and technologists.

Is it just because he voted to leave the EU?

John Caudwell, whom you praise, admits that he was not averse to a bit of fiddling early on to avoid paying tax. Well done now for admitting that.
www.stokesentinel.co.uk/news/stoke-on-trent-news/john-caudwell-shuns-tax-avoidance-6549796

"You hear three million jobs will be threatened as a result of leaving Europe. That is complete rubbish. Being a free country to trade with every country in the world and not to be seen to be a partisan part of Europe that is a good thing."
John Cauldwell April 2016

John Caudwell, founder of Phones 4u, is an ardent Brexiteer. His on-the-record statements include saying that he would “absolutely vehemently never [have] gone into Europe,” calling it a “fiasco.”
www.thegentlemansjournal.com/article/britains-leading-businesspeople-think-brexit/

I didn't think I'd misremembered.

Fleurpepper

For the second time tonight, I shall be sharing this. True patriotism from John Caudwell about paying tax in UK:

Billionaire Caudwell says he is a ‘patriot’, and took a swipe at the wealthy individuals who are threatening to leave the country should they be asked to put more into the national pot. The Labour government is set to deliver its first budget at the end of the month.

It’s rumoured that specific windfall taxes and a potential hike to the capital gains tax could be implemented by Chancellor Rachel Reeves. The party has already confirmed that they will be charging VAT on private school fees, which has caused some discontent among the upper classes.
Patriotic billionaire ‘staying right here’

But those with the money are being urged to cough-up what they owe by Mr. Caudwell. On Sunday, he made an impassioned defence of the UK, lauding our education level, cultural significance, and sites of historical value. Why aren’t more billionaires saying this?'

Unlike people like Dyson, who went on about Brexit and patriotism, and then as soon as, closed his production in the UK and moved it to a country far away with cheap labour and low costs. What sort of patriotism is that?

Why do you keep mentioning Dyson as if he's a tax evader?

He is not, he pays his taxes in full in this country. He employs over 3,000 people in the UK and started up The Dyson Institute of Engineering and Technology to train future engineers and technologists.

Is it just because he voted to leave the EU?

John Caudwell, whom you praise, admits that he was not averse to a bit of fiddling early on to avoid paying tax. Well done now for admitting that.
www.stokesentinel.co.uk/news/stoke-on-trent-news/john-caudwell-shuns-tax-avoidance-6549796

"You hear three million jobs will be threatened as a result of leaving Europe. That is complete rubbish. Being a free country to trade with every country in the world and not to be seen to be a partisan part of Europe that is a good thing."
John Cauldwell April 2016

LizzieDrip

^IMV she should never have ruled out any rises to any taxes in the first place, now she’s painted herself into a corner^

I agree Oreo.

I wish Labour had said that some tax rises would be necessary, and had fought their election campaign on that premise. I understand why they didn’t.

However, we have to accept that public services need to be paid for.

Of course some tax rises were necessary but close the tax loopholes first.

It's no use taxing people 'until the pips squeak' because the rich will leave and other people become resentful.

Creating jobs is essential.

escaped

I don't get the orange hair comment???
Is it to do with this?

I didn't get the orange hair reference either.

That was such a childish thing to do on someone's wedding day. It was a climate protestor, Shelagh Day, who herself flew off to Thailand for a long holiday afterwards.
You couldn't make it p!

Anyway, sorry, back to the thread.

QT is a transparent way of being financially responsible, they are being seen to be treating QE as bonds, albeit in a small way.

Why, David?

They are selling off bonds at a loss when there is absolutely no need to sell them at all.

You still haven't told me who you think is going to be 'paid back' when the bonds expire.

QT is a transparent way of being financially responsible, they are being seen to be treating QE as bonds, albeit in a small way.

So far I broadly approve of Labours policies we will see what else the budget brings

Aveline

Maybe ISAs will be next in line to be targeted

One would surely hope not. Brilliant saving device.

Maybe ISAs will be next in line to be targeted

Yes but that QE has a repayment date when it either expires or has to be replaced by further QE/borrowing. The only advantage of QE is that interest is neutral, it is accounted for in the same way as other borrowing.

The Bank of England, owned by the state, created the money with which to by government bonds. The money went to to the bond holders, or, to the government if they were newly issued bonds.

Can you tell me who is going to pay who back at the expiry date?

I know the BoE is busy selling these bonds and calling it Quantitative Tightening, but there is absolutely no valid reason why they should be doing this, especially as they are selling at a loss. The 'debt' could have stayed on the books for ever at no detriment to the government.

GrannyGravy13

Aveline

So the interest on my savings is 'unearned income'. Why bother saving?

As far as I am aware.

If you pay basic rate tax any interest earned over £1,000 is taxable

The next tax band is allowed £500 earned interest tax free.

The highest rate tax payers have to pay tax on all interest earned.

Perhaps a reason people are keen on depositing to their ISA.

MaizieD

Trueloveways

2010 National debt = 1 trillion, 2024 national debt = 2.5 trillion, austerity didn’t help or cutting back of all public services. Rachel Reeves is nothing like George Osborne.

'National debt' is really unimportant. Britain has had a 'national debt' for centuries. It has manged perfectly well. It represents the savings of institutions and individuals, money that has not returned to the government via taxation. Actually, about a third of it is owned by the government as a result of various bouts of quantitative Easing over the past 20 years.

Yes but that QE has a repayment date when it either expires or has to be replaced by further QE/borrowing. The only advantage of QE is that interest is neutral, it is accounted for in the same way as other borrowing.

Reeves can’t be compare to Osbourne - yet, because we don’t know the results of her policy, we all hope it is a successful policy and the UK actually pays its own bills.

There is nothing wrong with borrowing for growth, it’s what businesses do continually, borrowing to pay for social or political handouts is not justified, except for emergencies like Covid.

Or is someone going to argue that we should borrow to give WFA to those that dont need it.

Trueloveways

2010 National debt = 1 trillion, 2024 national debt = 2.5 trillion, austerity didn’t help or cutting back of all public services. Rachel Reeves is nothing like George Osborne.

'National debt' is really unimportant. Britain has had a 'national debt' for centuries. It has manged perfectly well. It represents the savings of institutions and individuals, money that has not returned to the government via taxation. Actually, about a third of it is owned by the government as a result of various bouts of quantitative Easing over the past 20 years.

2010 National debt = 1 trillion, 2024 national debt = 2.5 trillion, austerity didn’t help or cutting back of all public services. Rachel Reeves is nothing like George Osborne.

Yes you have to be savvy, house price inflation is often high outstripping interest rate you’ll pay on a mortgage. Saving rate usually is lower than inflation and you pay tax on the interest so value depreciates.

MaizieD

^At the end of they day, all interest adds money to the basic amount invested.^

Only if the interest rate is greater than the rate of inflation.

In real terms yes, but it does depend on the amount of time the money is invested for and the interest rate of that account. So an account that locks the money away for 5 years pays a higher interest , which should pay an amount above inflation.
It really does rely on an individual to be savvy or take good advice.

Fleurpepper

For the second time tonight, I shall be sharing this. True patriotism from John Caudwell about paying tax in UK:

Billionaire Caudwell says he is a ‘patriot’, and took a swipe at the wealthy individuals who are threatening to leave the country should they be asked to put more into the national pot. The Labour government is set to deliver its first budget at the end of the month.

It’s rumoured that specific windfall taxes and a potential hike to the capital gains tax could be implemented by Chancellor Rachel Reeves. The party has already confirmed that they will be charging VAT on private school fees, which has caused some discontent among the upper classes.
Patriotic billionaire ‘staying right here’

But those with the money are being urged to cough-up what they owe by Mr. Caudwell. On Sunday, he made an impassioned defence of the UK, lauding our education level, cultural significance, and sites of historical value. Why aren’t more billionaires saying this?'

Unlike people like Dyson, who went on about Brexit and patriotism, and then as soon as, closed his production in the UK and moved it to a country far away with cheap labour and low costs. What sort of patriotism is that?

James Dyson still lives in the UK,, and he has a research and development centre and family office in the UK. His estate employs people and in 2021 returned his tax residency and corporate tax to the Uk.
Bit of research and the truth of the matter appears,