Love the longer hair Rachel and the smiles!

Good post.

laughing out loud at this slopey shoulder side step 🤣

Smileless2012

She could start by not excusing the mess she's making of the economy by blaming the last 14 years Annie.

As far as I'm aware the 22 billion black hole Labour claims to have inherited has never been proved.

laughing out loud at this slopey shouldered side step 🤣

I remember starting work as a 17 year old and paying between 35p and 40 in the pound Income Tax. Old Seven and Six up to Eight Shillings.Thresholds at the time forNationa Insurance were also much
lower. People in the country
want Scandinavian levels of welfare state and public expediture on a measly 20p rate in the pound Income tax .
Can't be done. Grow Up.
Never going to happen.

I'm tired of hearing how we are an aging population and how much we pensioners are costing the country. Most of us worked for years while funding the pensions of the generation above us. Now that we are the older generation 1 in 5 younger people are not in work through sickness. It's not us that's costing the country but all those who don't go to work.

Nik1ta

I always enjoy MaisieD’s posts and I’m in awe of her knowledge of economics, but I’m confused as to why a country could become effectively bankrupt because global investors lose confidence in its government policy and it’s currency becomes so devalued as to be effectively worthless internationally. Iceland, Argentina, Greece, etc. Why do countries need loans from the IMF if they can simply just print their own money endlessly? I can see that a government can spend what it likes internally by effectively printing its own money, but if globally it’s economic policy is seen as unsound and its currency is worthless then it can’t pay for it’s imports .Obviously Iceland, Greece, Argentina, etc continue to exist and have recovered, but I can’t see how QE and excessive government spending work if other countries have no confidence in that country’s policies I am a bit economically illiterate but perhaps someone can explain this in simple terms.

Well, first of all, don't worry about the UK 'going bankrupt' because our foreign 'debt' in the form of government bonds, is not excessive and we have a stable currency. We can issue the money to pay interest on the bonds.

'Bonds' are far more complex to explain than the circulation of money in the domestic economy but I don't think that there is any possibility that 'the market' will stop buying our bonds because they are mostly bought by financial institutions such as pension funds and insurance companies because they need a safe place to invest their funds and the reliable income provided by the interest paid on them. Far from demanding repayment of their principle at any time theses institutions tend purchase fresh bonds when their current ones reach their term. I understand that there is never a shortage of purchasers for any UK government bond issue.

You would be horrified by the value of the bonds which have been issued over the years, but bondholders generally are not knocking at the government doors demanding their money back, They are about the safest investment that can be made. Premium bond are part of the 'debt' but most of the holders hang on to them and would be horrified if the government insisted on paying them back

The volatility of bond prices and yields happens in the 'secondary' market, which is where existing (as opposed to new' bonds are sold and which tends to be used for speculative purchases. This has no effect on the initial bond price, if you had bought bonds in the initial issue and wanted repayment of them from the government you would be repaid what you paid for them. Nor does it affect the interest paid on them. This is what makes them a 'safe' purchase, unlike stocks and shares which can lose value.

There are a number of reasons why countries might apply for loans from the IMF. The country may not have enough foreign currency reserves to pay for its imports. It may have so much foreign debt that servicing it leaves it with insufficient currency to run its domestic economy. Or it may need help if it is at war or suffers an environmental disaster which it cannot finance out of its own resources.

The UK is nowhere near needing any IMF help. It has a stable trusted currency and sufficient foreign reserves so it can always pay its 'bills'.

It actually 'creates' money every time it spends but there is no fear of hyperinflation so long as there are goods and services available for it to buy, and there are goods and services available for the general population to buy. Prices only become inflated when there is a shortage of resources to purchase and there is too much money issued into the economy by the government. Or, conversely, if the government fails to cancel enough of the money it has issued by not taxing back enough of it.

Re that maths issue, it is really simple (first year secondary school stuff I guess).

If the cost of something rises from £13.80 to £15.00 the increase is £1.20 on £13.80, i.e. £1.20 on top of £13.80. The formula is 1.20 divided by 13.80 multiplied by (or "timesed by" if you are a teenager) 100, which is almost 8.7 per cent.

Hope this helps!

You can but try Madmeg. Those that are determined to see it as a 1.2 % increase will argue until the cows come home.

Madmeg

Re that maths issue, it is really simple (first year secondary school stuff I guess).

If the cost of something rises from £13.80 to £15.00 the increase is £1.20 on £13.80, i.e. £1.20 on top of £13.80. The formula is 1.20 divided by 13.80 multiplied by (or "timesed by" if you are a teenager) 100, which is almost 8.7 per cent.

Hope this helps!

Perhaps PaynesGrey was talking about a percentage points increase, rather than the actual percentage increase? I believe there is a difference.

Gosh, I wish I’d never mentioned this. I should have said percentage points not %.

The Telegraph 31 Oct 2024 — Bosses lashed out at plans to increase employers' National Insurance by 1.2 percentage points to 15pc from April.

The Guardian 30 Oct 2024 — [Reeves] will increase employers' national insurance. It will go up by 1.2 percentage points, to 15%, from April next year.

I only did so in the context of the furore over raising Employers NIC from 13.8% to 15% while Reform’s proposal to introduce an Immigation Tax in the form of 20% Employer’s NIC on employers who employ anyone born overseas (except health and care staff) has been largely ignored. The affect on business, edicational establishments and local goverment costs would be huge. What happens if employers start choosing to recruit inferior candidates rather than the best candidates for the job? Reform UK has said it plans to repeal the Equality Act 2010 which is there to protect against this kind of thing and many of prejudices.

I don’t dispute that the change has increased some employers costs substantially but a 20% Immigration Tax would be hugely damaging too. When Reform proposed this, the Employer NIC rate was 13.8% so they want to raise it by 6.2 percentage points.

Generally, employers don't publish numbers on how many foreign nationals they employ but tens of thousands of our school teachers were born overseas. Around 30% of university lecturers were born overseas. Our transport networks employ thousands of people born overseas. Same for the science and technology sector and probably just about any other sector you can think of.

In December 2024, 19% of employees were non-UK nationals at the time they registered for a national insurance number (Migration Observatory).

Thanks Maizie, Crossed posts.

Premium bond are part of the 'debt' but most of the holders hang on to them and would be horrified if the government insisted on paying them back

I can never understand why they don't want to borrow more from people looking to invest their savings in a safe haven by increasing the number of Premium Bonds investors can buy.

Allira

^Premium bond are part of the 'debt' but most of the holders hang on to them and would be horrified if the government insisted on paying them back^

I can never understand why they don't want to borrow more from people looking to invest their savings in a safe haven by increasing the number of Premium Bonds investors can buy.

Well, if an investor wants a more guaranteed return on their investment they could go for actual government bonds, rather than Premium Bonds. Though for some reason they'd have to be bought on the secondary market because they're not sold to individuals when first issued. They're sold to financial institutions and, I think, certified bond traders initially.

There are NS&I savings accounts available, which are part of the 'debt' but they don't offer particularly good rates of interest.

Some have to be invested for a certain length of time too.

Allira

Some have to be invested for a certain length of time too.

Well, bonds are issued with different 'terms', could be anything from 1 year upwards, But although the government 'redeems' them at term, you could sell them on the secondary market at any time. Perhaps for more than you paid for them if demand is high.

The NS &I accounts are more like straight savings accounts.

PBs are costly and unfair. Currently, £4.8 billion a year in tax free prize money. Mostly of it goes to people with the maximum holding, people who can afford to invest 50K (or 100K for couples) with no guarantee of a return.

Moneysavingsexpert say that with average luck you would expect to win roughly £1,600 over a year if you have £50,000 of PBs.

www.moneysavingexpert.com/savings/premium-bonds/

If you’d invested that in a bank at 4.5%, even a 40% taxpayer, having used up their PSA elsewhere, would earn a guaranteed £1,350 net. A basic rate taxpayer would earn a guaranteed £1,800 (having used up their PSA elsewhere).

The vast majority of bond holders win absolutely nothing.

The number of PBs held represents less that 5% of the national debt. £133 billion v. £2.9 trillion.

By comparison, removing the two-child cap on UC is estimated to cost between £2.5 billion and £3.6 billion per year. The cost varies depending on the source and includes the estimated annual cost, which is projected to rise over time.

• Joseph Rowntree Foundation: £2.8 billion in 2029/30.

• Institute for Fiscal Studies (IFS): £3.4 billion a year or £2.5 billion a year, which could rise to £3.6 billion over time.

• Resolution Foundation: £2.5 billion in 2024-25, rising to £3.6 billion by 2035.

That being said, I predict that if the limit was increased, many people would invest more in PB.

There's a PB thread somewhere here on Gnet. If you have enough PBs there's a chance of winning 'something' fairly often, as Martin Lewis says. People certainly didn't want the government to unilaterally repay them., even if they are part of the 'national debt' I asked

Reform are relevant because they have so many supporters, the extent of their support is definitely NOT reflected in their meagre five seats, which some people would say highlights the drawbacks of our electoral system. The 'black hole' has never, as I understand it, been proven, and it is cheap to keep blaming the Conservatives - they knew what they were getting into, they are breaking their electoral promises and are so NOT the party of the 'working person'. As for NHS funding, how about cutting back on the massive tax breaks given to Big Pharma and trimming the vast NHS management section?

I predict that if the limit was increased, many people would invest more in PB.

Yes,they probably would as there are a lot of people with a lot of spare cash. But it would be unfair when there’s much talk of reducing the tax benefit from cash ISAs.

I also find it odd that people complain bitterly about a government that might be about to impose higher taxes but would be happy to lend that same government £50,000 (or £100,000) for years with no guarantee of a return.

Full disclosure. After the market crash of 2008, after which interest rates plummeted to record lows and stayed there for for fourteen years, I was persuaded by a friend to invest £30,000 in PBs - the then max. He claimed to win £50 most months. I held the bonds for two years and didn’t win a bean. I wasn’t too bothered as the bank would have paid me next to nothing but I am living proof that you can have much less than average luck with PBs, in fact, zero luck.

undines

Reform are relevant because they have so many supporters, the extent of their support is definitely NOT reflected in their meagre five seats, which some people would say highlights the drawbacks of our electoral system. The 'black hole' has never, as I understand it, been proven, and it is cheap to keep blaming the Conservatives - they knew what they were getting into, they are breaking their electoral promises and are so NOT the party of the 'working person'. As for NHS funding, how about cutting back on the massive tax breaks given to Big Pharma and trimming the vast NHS management section?

I recommend you read this in its entirety and thencomment on making cuts to NHS management:

www.kingsfund.org.uk/insight-and-analysis/long-reads/why-management-matters-nhs-10-year-plan

MaizieD

Madmeg

Re that maths issue, it is really simple (first year secondary school stuff I guess).

If the cost of something rises from £13.80 to £15.00 the increase is £1.20 on £13.80, i.e. £1.20 on top of £13.80. The formula is 1.20 divided by 13.80 multiplied by (or "timesed by" if you are a teenager) 100, which is almost 8.7 per cent.

Hope this helps!

Perhaps PaynesGrey was talking about a percentage points increase, rather than the actual percentage increase? I believe there is a difference.

Originally she wasn't.

OFHS. Let it drop. Why are you fixating on % or percentage points when Reform would like to intoduce an Immigation Tax on employers of 20%. Keeping on at someone about a mistake in terminology is bordering on trolling.

Yes, I know PBs don't guarantee a return and it's a form of gambling but at least, unlike some forms of gambling, you can get your stake back (albeit subject to inflation over the years) and your investment might do some good.

Taxes are a separate issue.

I not only liked the new hair style and more relaxed public speaking I am hoping this was because she has found a way to raise tax on those who currently get away paying less than their fair share without breaking her promise not to raise overall take from "workers". It can be done.