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The good news... and the bad

Nick Robinson | 23:07 UK time, Monday, 21 June 2010

Some good news has emerged from the Treasury tonight. The Budget will take 880,000 people out of the tax system and give basic rate taxpayers a tax cut of £200 per year.

The bad news comes tomorrow when it will become clear that overall people in all income groups will pay more as a result of other tax rises, spending and benefit cuts and limits to public sector pay and pensions.

"Tough but fair" is how the chancellor will describe the package of measures he unveils to cut Britain's budget deficit. He will publish figures designed to show that the rich will pay more than the poor. Normally it's been left to our old friends at the Institute of Fiscal Studies to produce that sort of distributional analysis. The Treasury's figures cannot and will not include the effects of cuts in public services on different income groups since the Budget will only announce the headline spending totals for the next four years with the detail of what exactly is to be cut not decided until the Spending Review in October.

Tomorrow's tax cut will come in the form of an £1,000 increase in the amount that anyone can earn before paying tax - taking the annual tax allowance for basic rate tax payers to £7,475. The benefit will be clawed back from top-rate taxpayers. The chancellor must find £3.5bn to pay for this measure in addition to the billions needed to cut the deficit.

The proposal to cut income tax allowances was first made by the Liberal Democrats and was adopted by the coalition government instead of the Conservatives proposal to stop Labour's planned rise in National Insurance for anyone earning over £20,000 a year.

Labour have always insisted that any tax cut was irresponsible and could not be afforded.

If the chancellor increases VAT in his Budget - which is far from certain - the opposition will argue that it will hit the poorest people in our society the hardest - pensioners, the unemployed and those who do not pay income tax at all.

Comments

  • Comment number 1.

    Is this compensation for the 10p rate Brown stole from me ?

  • Comment number 2.

    Nick, I disagree with the very widely held assertion that VAT rises hit lower income people the most. I think this is a widely used and not recently tested statistic - a little like "swimming is the best form of exercise".

    If you look at the things that soak up the majority of income of low-income families, there is no VAT involved. Housing, being the largest, has no VAT, nor does food. Clothing is also very low VAT. Travel (e.g. public transport) has no VAT. Together, housing, food, clothing and travel are the major items that "poor" people should have to spend money on, and none of them have VAT attached.

    Contrast that with the DVDs, holidays, electrical goods, entertainment tickets and other things that the middle classes spend money on. Then consider the more expensive cars, services and other activities which the middle to higher earners spend money on. All soaked in VAT.

    I would like to see some real, properly calculated data which shows that VAT increases disproportionately hit poor people, because I just don't see it. I think this is a myth put forward by historic thinking, before the substantial housing cost increases of recent years and driven by the new ideas that X-boxes and DVDs are essential items of spending for "poor" people.

    PS - books don't have VAT either.

  • Comment number 3.

    £1000. thats pathetic. lib dems as brokers. what a joke. and the biggest joke of all. what benefit to anyone with this increase in personal allowance anyway as a rise in vat or other cuts/austerity measures will eat away and easily surpass any gain. regressive govt....and double dip here we come.

  • Comment number 4.

    Remind me: whats fair about Civil Servants taking a two year pay freeze and the rest of us having increased VAT, when the people that caused the recession - bankers - walk away giggling as they count their enormous bonuses.

    They caused the problem and Osborne et al will let them off the hook. Basically, its okay to really mess up the economy if you are rich, after all, the rest of us will pay for the mess you make. With 13 Cabinet members from Eton its hard to see us mere plebs getting fair treatment.

    Anyone want to bet against a double dip now?

  • Comment number 5.

    The point is not whether poorer people will be better or worse off but if and how MANY MORE people are TURNED into poor people via unemployment.

    In total I cannot see any less than 400,000 people losing their jobs to achieve the necessary total cuts, which equates to many public workers plus all those in private sector who provide goods and supply/other services to public sector.

    I think that the banking system should be made to pay a very substantial part. Afterall, it was they who basically drove the economic car into this mess.

  • Comment number 6.

    2. At 11:37pm on 21 Jun 2010, CD London wrote:
    Nick, I disagree with the very widely held assertion that VAT rises hit lower income people the most. I think this is a widely used and not recently tested statistic - a little like "swimming is the best form of exercise".

    If you look at the things that soak up the majority of income of low-income families, there is no VAT involved. Housing, being the largest, has no VAT, nor does food. Clothing is also very low VAT. Travel (e.g. public transport) has no VAT. Together, housing, food, clothing and travel are the major items that "poor" people should have to spend money on, and none of them have VAT attached.

    Contrast that with the DVDs, holidays, electrical goods, entertainment tickets and other things that the middle classes spend money on. Then consider the more expensive cars, services and other activities which the middle to higher earners spend money on. All soaked in VAT.

    I would like to see some real, properly calculated data which shows that VAT increases disproportionately hit poor people, because I just don't see it. I think this is a myth put forward by historic thinking, before the substantial housing cost increases of recent years and driven by the new ideas that X-boxes and DVDs are essential items of spending for "poor" people.

    PS - books don't have VAT either.

    -------------------------------------------------------------------

    While it is the Case that more People within the Middle Classes and upwards currently can only afford Leisure Items that soak up VAT, where is the sense in putting up VAT so that the very same Middle Classes, and the Poor will not be able to afford to pay for any Leisures involving Pass - Times.

    While again, all that will happen is that many whom currently Work within the UK Leisure Trades will find that once the demands for ALL types of Leisure drops away, they too will find thenselves also out of Employment, and unable to afford much to do themselves with buying anything to do with Leisure Time events.

    When the Cuts start to bite and Mass Unemployment becomes the result of these Cut - Backs, how can making People redundant and Unemployed be such a good way of creating Employment places for the medium - Long Term, in the future???

    Therefore, by contrast, I would like to see some real, properly calculated data which shows that when VAT increases disproportionately it therefore helps poor people, and also those made Unemployed and Redundant to pay for the increases in their Utility Bills, etc:.

  • Comment number 7.

    All this user's posts have been removed.Why?

  • Comment number 8.

    So 880,000 will get a tax cut of £3.84p a week! Wow!

    Jeez! could the bad news be worse?................................

  • Comment number 9.

    CD London: the 'assertion' that VAT rises hit the poor hardest IS based on real data - and data which is very easy to find if you're actually interested in it, instead of simply coming up with a speculative counter-argument based on your ideas of what different groups spend their money on.

    According to the Office for National Statistics, in 2007/08 the poorest fifth of households spent 10.8% of their gross income on VAT. The richest fifth of households spent just 4.5% of their gross income on VAT.

    Or, if you prefer to look at disposable income, 12.1% of the disposable income of the poorest fifth of households went on VAT; 5.9% of the richest fifth's did.

    VAT rises hit the poor hardest. That's not an assertion, that's a provable fact.

  • Comment number 10.

    #9
    Those numbers are simply not possible!
    VAT is 17.5% and so, to pay 12.1% of your income ob vat-able goods you'd have to spend nothing on:
    housing
    food
    power
    water
    travel
    clothes for children

    It also omits the OBVIOUS - the lowest 20% of households are all in receipt of VAST subsidies from the taxpayer in the form of benefits. If those benefits leave sufficient excess to allow money to be spend on:
    lottery
    cigarettes
    booze
    gambling
    etc

    Then in that case they are far, FAR too generous and should be drastically cut.

    Anyone on near-zero income (like me) buys things from eBay, charity shops, markets, jumble-sales and stops buying holidays and just about anything other than food.

    No, I don't claim benefits - I'm entitled to around £700/month and I don't claim even 1p - never have, never will.

  • Comment number 11.

    "According to the Office for National Statistics, in 2007/08 the poorest fifth of households spent 10.8% of their gross income on VAT. The richest fifth of households spent just 4.5% of their gross income on VAT. "

    All that means is that the poorest fifth of households need to sort out their priorities as they are obviously spending money on luxuries that attract VAT rather than essentials that don't.

    Its not the governments fault if these people consider a CD more important than food

  • Comment number 12.

    CD London:

    "If you look at the things that soak up the majority of income of low-income families, there is no VAT involved. Housing, being the largest, has no VAT, nor does food. Clothing is also very low VAT. Travel (e.g. public transport) has no VAT. Together, housing, food, clothing and travel are the major items that "poor" people should have to spend money on, and none of them have VAT attached."

    Only children's clothing doesn't have VAT. All adult clothing does. When people say that 'food' doesn't attract VAT, the impression is that one's 'supermarket bill' has no VAT on it. This isn't true. All household items are VATable (eg loo roll, bleach, Fairy Liquid), pet food is VATable, as are any bottled drinks, confectionery, all toiletries, most snacks, medicines, chocolate biscuits, ice cream, and more. In a 'poor' person's Tesco trolley, even one containing few luxury items, about a third of items will be VATable.

  • Comment number 13.

    I have to say that I wish people would stop complaining, we've been living well beyond our means for years, the average joe buys into things like the minimum wage and job seekers allowance, etc without thinking of the consequences to our economy in general.

    I was hit hard by the recession, the company that I worked for went under and i was forced to accept a pay drop to half of what i was on before. Rather than hold out for better, I got a job paying as much as i could in order to ensure security for my family. I've tightened my belt and have had to cut down on all our luxurys, sold everything we can to make money, cut down all our bills, etc.

    Everyone wants something for nothing, they blame the govt and banks for everything right now. The thing is that you like it when things are going well, the so called "recklessness" of the banking industry has benefited us for many years and no-one cared while things were on the up, as soon as they have a string of bad luck on investments (which is what the industry has always been about) we all start complaining.

    The new govt has actually come up with some excellent ideas for stabilising the economy and ensuring stability going forward...

    This stuff about the public sector cuts is a long time coming, they get regular pay-rises and extensive benefits packages which many private sector companies have had to review or withdraw and in the public sector they have a job security unseen in the private industry. Everyone sees the public sector as the NHS, etc but there are many agencies of the civil service which are just there to generate red-tape. They spend billions on consultants and projects which they don't plan properly and abandon after spending millions of pounds. Why are we (the tax-payer) paying for these people to have jobs just for the sake of them having jobs. Let them find new jobs like the rest of us.

    There are countless people that have been on job seekers allowance for ages, I see no need for this, people say that they cannot find jobs but there are thousands if your prepared to get your hands dirty and do whatever it takes (even if you think it is below you). Limit the allowance that they can claim to x number of months and i guarantee they will find jobs at the end of it.

    The tax hikes will hit me quite a lot, i've just managed to increase my wage again closer to what it once was before the recession. This means i'll be hit by any tax increases, but you know what i'll accept it, unfortunately many people go through life not pushing themselves to do better or to achieve more, then expect those of us that do to pick up the tab so that they can have better lifestyles that they haven't earned.

    Basically, stop complaining, accept it. We are all in the same boat, if you want a better lifestyle stop feeling sorry for yourself, get out there and do your bit for the economy by finding a worthwhile job and do the best you can! Let the govt repair the tatters of the economy that we were left with by the previous govt which was more interested in winning votes than doing what was right!

  • Comment number 14.

    It happens to be my lot to interview from time to time people who have got themselves massively into debt and then found themselves on benefits often through no fault of their own.

    Yes, the essentials of life are untaxed - food, rent, children's clothes, public transport etc, some are taxed at 5%.

    The tax sytem thouh needs to encourage people who are already in debt NOT to spend on non-essentials and luxuries just to keep up with the perceived lifestyle standards or mollify their children.

    Devising a tax/benefits sytem which encourages those on benefit or at risk of being so to change their attitudes and priorities would be the best leap forward.

  • Comment number 15.

    Curiouser and curiouser.... Having put a great deal of effort into 'there is no money left', 'things are dire' and 'it's much , much worse than we thought',one of the budget headlines is to be 'we're handing out money' (rise in tax allowance). What is the point of announcing £2bn of rather mean minded cuts and then giving away £3.5bn? If as they say the cuts have to be made why confuse the issue by giving yourself an extra £3.5bn to cut?
    The answer, I fear, is political considerations. It's the price which we all pay for the Coalition agreement, for keeping the Libs on board. Surely, given our current dire situation the Libs would have waved their raise tax allowance demands in the National interest - at least for the time being. A clear,consistent message might help.

  • Comment number 16.

    Its DD Day !

    (double dip)

    Interesting that its The Mail and Telegraph going for the Lib Dem members of the Cabinet. (Laws and Hulme)

    They obviously,like many back bench tories(witness Norman Lamont's distasteful interview on BBC News last night when asked about progressive cuts) they see the LDs as an inconvenience to be ejected asap.

  • Comment number 17.

    #12
    Buy them at markets - no VAT then!

  • Comment number 18.

    Re:VAT.

    Its a regressive tax. End of debate.

  • Comment number 19.

    Muadib2 @ 4.

    13 members of the cabinet went to eton...

    I suppose we are now able to call this Govt an Eton Mess.

  • Comment number 20.

    9#

    Top 20% and bottom 20% covers a HUGE range of incomes Tom. Might suit your purposes and give your stats more weight and "alarm" value to get the angry villagers going, but its highly disingenuous.

  • Comment number 21.

    Nick I also think that the lower paid are not serously affected by vat increases. The hit is taken by middle & higher earners. Research needed on this.

    It will be interesting to see what the small print is re capital gains. By all means tax speculative gains but ONLY IF THE GAINS HAVE BEEN INDEXED LINKED. There are a lot of people out there who tried to create a pension by buying a buy to let property( not a second home) and saving over the years to pay the mortgage back. After 20yrs plus yes there is a gain but not so great when looked at with inflation taken into account.

    If you are lucky enough never to need the capital you will do what the Americans did when they were faced with tax increases - DO NOT SELL.
    People who have attempted to improve their position in retirement should not be penalised for doing what we should all have done over the years.



  • Comment number 22.

    CD London: the 'assertion' that VAT rises hit the poor hardest IS based on real data - and data which is very easy to find if you're actually interested in it, instead of simply coming up with a speculative counter-argument based on your ideas of what different groups spend their money on.

    According to the Office for National Statistics, in 2007/08 the poorest fifth of households spent 10.8% of their gross income on VAT. The richest fifth of households spent just 4.5% of their gross income on VAT.

    Or, if you prefer to look at disposable income, 12.1% of the disposable income of the poorest fifth of households went on VAT; 5.9% of the richest fifth's did.

    VAT rises hit the poor hardest. That's not an assertion, that's a provable fact.

    -------------------------------------------------------------------------

    Inpressive figures, except that 12.1% of £100 disposable income = £12.10, 5.9% of a £1000 disposable income = £59.00 so who pays more?

    Also VAT gives people choice, you cannot blame the government because some of the poorest spend their money on VATable booze & cigs.

    This £903 billion deficit NuLabour left behind will cause everyone pain in both the short and long term.

  • Comment number 23.

    Morning Mr Robinson and fellow Brits .
    Blue Sky's are beaming over two you all i hope they brighten up your day.
    #203 tunbridge From previous thread .
    Doff their caps ?do you recall the Foreman in the factory's doing just that?
    The invention of the mode of transport indeed made possible an important movement of blood so changing the genetic make up of the nation,
    And indeed how were you conna keep em down on the farm?
    #208 kered process is good.I just wished we would start manufacturing again, building better infrastructures in the railways and traditional builds.
    Like in the steel industry for instance ? We were the leaders in this field .
    Now days we get socket set that bend made in china and six inch Junior
    hacksaw blades that wont cut hot butter,
    So come on Sheffield the finest cutlers in the world show the rest what you were made of and put great Britain back on the world stage,
    Perhaps we might reintroduce Austin. Morris. Riley .Rover.Thorneycroft.
    Tryhumph.Singer.B.M.C.Cadbury. Nestle.Bedford.M.G.
    Is there any left?
    Please leave us pensioners alone we did our bit for you.
    I will leave you with this little thought.
    Man came into the world with out nothing and he can most certainly take nothing out,
    Both to-ff And work man are equal in this respect.

  • Comment number 24.

    I've never seen any problem with VAT at any level, since ou choose what to spend your money on
    OR
    save it, which is what the nation needs, collectively, to do. This would be a reversal of the last 30 years of credit-card spending, but is the only way forward

    Anyone on Benefits (and I know several) spends more on alcohol and tobacco in a day than I can afford to do in a month - and that was when I was a top-of-the-scale teacher.

    It's called a mortgage and CSA.

  • Comment number 25.

    The biggest con of all is national insurance. Those plebs among who earn below 40000 pay 11% on our wage (or thereabouts ) those on say 80000 pay the same 11% on the first 40000 but then just 1% on the rest so in effect paying just 6% on their whole pot. If your looking for a touch of fairness sort that one out George.
    Does anyone read this.

  • Comment number 26.

    The quicker the starting-point for tax rise to just above the 40 x min wage x 52 level, the better.
    That sum should also be the maximum claimable in benefits
    It is then ALWAYS better to get a job - any job - rather than be on benefits.

    'Grotty' jobs will then be done by UK benefit-scroungers, rather than Eastern-European job-seekers, and we'll ALL be much better off.

    Having 1 million + immigrants a year at the same time as we have 2.5 million (and counting - call it 7 million, in reality) available to work in the UK is obscene and the economics of Gordon's mad-house.

  • Comment number 27.

    I just want a budget that ensures that the government's obligations to the citizens are met BEFORE any debt repayments are made, but I fear that they have their priorities back-to-front and won't be trimming the amount paid to lenders... only the amount of our tax-money that is spent on the purpose for which it is given to them: to provide services for citizens.

  • Comment number 28.

    NHS watchdog NICE calls for trans-fats ban in foods

    Come on George get a grip. Don't ban it tax it! An opportunity around every corner

  • Comment number 29.

    @ #24.
    save it, which is what the nation needs, collectively, to do. This would be a reversal of the last 30 years of credit-card spending, but is the only way forward.

    ------------------------------------------------------

    Yes you're right because it really is just that simple, and of course it wouldn't lead to a recession at all if people were to just stop spending money........ would it.

  • Comment number 30.

    So the Bankers screw up big time with sub-prime lending, luckily most retail their bonuses and lifestyle though. And now Nurses, Dustmen etc are going to have to pay?

    Personally I would like to see the people who caused this recession pay more than those who didn't.

    FOr the record, I am not a Public Servant and I am a higher rate taxpayer, I just don't like the lies and spin about the deficit. Can anyone else see the CONDEMs brining in a 15% interest rate just like the Cons did in early 90s?

    And to think I voted for this shower, I only have myself to blame I suppose!

  • Comment number 31.

    "This stuff about the public sector cuts is a long time coming, they get regular pay-rises and extensive benefits packages which many private sector companies have had to review or withdraw and in the public sector they have a job security unseen in the private industry."

    Oh really - thank you for that there I was as a government employee thinking I had been featherbedded - after all I have had a whopping pay rise of 1% in the last 4 years - in the same time inflation has run at around 5% so in effect I have had a pay cut for the past three years. I have also been made redundant from one job and had to take a pay cut of about 15% to get another one - silly old me for being a workshy scrounger and expecting to make a living wage for doing all the jobs the private sector dont want to.

    I really do get sick of people in the private sector endlessly whinging about the public workers. If it was such a great deal why didn't you work for the public sector ? I'll tell you why you couldnt have handled the pay drop or the hours that most of us do out o0f a sense of duty and care. And before you spark up saying how well the public sector is paid that might be true at the very top of the civil servioce - its very far from true at the bottom end. I am a uni graduate carrying a huge responsibility - my pay £19,000 - hardly a kings ransom is it ? In a private company I'd earn 35k - I know because I used to work in private sector but some of us feel we should put something back into society rather than just expecting it to be done for us.

    If thers been a free ride its been or a lot of private sector employees who have been getting decent services off the back of some of us in the public sector working cheaply.

    My real worry is that with the public sector under constant attack - and it has been even under Brown soon it will be impossible to recruit decnt staff for it or for it to perform its services. When you have someone like EDF running your local council and asking for a profit and your community charge goes through the roof ( you should be aware that of the services you get from a local council you only pay around 13% of the true cost for - the rest the council generates or gets from grants - A private company would want you to pay 100% of the cost and a bit more - they have a profit need) and its all run by Eastern Eurpoeans on low wages perhaps a lot of you private sector whingers will wake up and smell the coffee. You certainly will when your community charge goes up by a factor of x10 once its all privatised.

    Theres also this wonderful myth floating around by the Eton Rifles that killing off public sector jobs somehow creates private sector ones - whats really going to happen is with public sector cut you are going to see an awful lot of private sector small business go to the wall as Councils and government slashes its costs. Employment will go sky high and you'll end up paying more to keep people on benefits than you pay tro subsidise their jobs.

  • Comment number 32.

    2. At 11:37pm on 21 Jun 2010, CD London wrote:
    Nick, I disagree with the very widely held assertion that VAT rises hit lower income people the most. I think this is a widely used and not recently tested statistic - a little like "swimming is the best form of exercise".

    If you look at the things that soak up the majority of income of low-income families, there is no VAT involved. Housing, being the largest, has no VAT, nor does food. Clothing is also very low VAT. Travel (e.g. public transport) has no VAT. Together, housing, food, clothing and travel are the major items that "poor" people should have to spend money on, and none of them have VAT attached.
    --------------------------------------------
    How do the goods that carry no VAT get into shops? They get there by a means of transport that carries VAT and other taxes, the VAT top-slicing on the other taxes+cost.

    I know a lot of higher earners think that the poor should not run cars but they often need to do so in order to work and maybe even as part of their work.

    And if turning up at work, scruffy, shabby or worse is to be avoided, then VAT has to be paid on clothing. And just in case, CD London, you think that VAT free food is the only thing low income people buy in supermarkets, it is sometimes necessary to buy other things to keep functioning as an individual and a household. Cleaning products, for example.

  • Comment number 33.

    24. At 08:04am on 22 Jun 2010, happydadtoo wrote:
    I've never seen any problem with VAT at any level, since ou choose what to spend your money on
    OR
    save it, which is what the nation needs, collectively, to do. This would be a reversal of the last 30 years of credit-card spending, but is the only way forward

    Anyone on Benefits (and I know several) spends more on alcohol and tobacco in a day than I can afford to do in a month - and that was when I was a top-of-the-scale teacher.

    It's called a mortgage and CSA.

    --------------------------------------
    For sure, it's possible for anyone to mis-spend their income (or benefits) and this goes right up to the top of the income scale. But to suggest that higher rates of VAT doesn't disadvantage the person on a low income is laughable. And tragic.

    One of the most interesting, revealing results of the credit crunch has been the demonstration how greed affects those who have (earn) the most.

    Various charities have reported in the past, both in better times and times of recession, that those on low incomes give the most but we now get all sorts of evidence, especially through the media, how individuals who are (relatively) high earners want not only to remain highly paid but be paying less tax and, on top, for any burden of taxation to fall more on the lower paid.

  • Comment number 34.

    This lot don't understand basic arithmetic, have no morals and are in the world of self interest and the interest of the high earners.

    They accused Labour of boom and bust.

    Now we're heading for bust and flat.

  • Comment number 35.

    22. At 08:00am on 22 Jun 2010, Redwoodsteve wrote: "Inpressive figures, except that 12.1% of £100 disposable income = £12.10, 5.9% of a £1000 disposable income = £59.00 so who pays more?

    Also VAT gives people choice, you cannot blame the government because some of the poorest spend their money on VATable booze & cigs."

    I do not know whether to laugh or cry at this. The question is not who pays more but which hurts more. This is not a difficult concept to grasp. If I have only £100 and lose £12.10 that is going to hurt me more than if I have £1000 and lose £59.

    Clearly according to Redwoodsteve's rationale being poor as an adverse effect on a person from being able to budget so I guess that wealthy people always tend to make good budgeting decisions. May be that explains why so many bankers are wealthy. Oh wait a minute were'nt they the ones who got us into this mess. By the way do any bankers smoke or drink?

  • Comment number 36.

    13. At 06:42am on 22 Jun 2010, Shaun wrote:
    I have to say that I wish people would stop complaining, we've been living well beyond our means for years, the average joe buys into things like the minimum wage and job seekers allowance, etc without thinking of the consequences to our economy in general.

    ------------------------------------------
    I haven't. I know other people who haven't. Quite a lot, actually.

    Does that mean that you have been living way, way beyond your means to make up for our simple living?

    Now we know where the tax increases should fall, don't we?

  • Comment number 37.

    Nick,

    Surely any tax cut is a good one?

    Yes I agree that VAT will almost inevitabley rise, however this has been on the cards even when Labour were in office. The problem that the Chancellor faces is that along with duty on fuel, a VAT increase would mean an almost 5% rise in the cost of one litre of petrol and the inevitable over inflaton on prices this will cause.

    With prices rising and falling the way they do at the pumps, the £1000 increase in our personal allowance is surely going to be eaten by this? Yes you don't pay VAT on food and books as someone said earlier, however you most certainly do on petrol/diesal etc. and I am looking to the Chancellor to introduce a "Fair Fuel Stabilizer" as he promised in letters to me when I wrote to his office and when I contacted my local MP, Charlotte Lesley. If this fair fuel stabilizer doesn't happen, the people that provide the Treasury with the tax revenues will no longer be able to afford to get to work in the first place!

    My own and indeed everyone elses cost of fuel has risen by over 23% in less than 14 months and the previous incumbents of Westminsterdis absolutley nothing to help - except to "defer" the planned duty increase on fuel. It will certainly be interesting to see how Mr. Osbourne will tackle this one, because if he doesn't, 35,000,000 motorists will be voting at the next election based on promises that were never kept!

  • Comment number 38.

    #29
    Not stop, 'delay' spending - it's not a light-switch, more a toilet-cistern (most money just goes down the drain - and the feckless choose to (literally) get it there even faster than the rest of us)

    Personal debt is as big a problem as Govt debt.

    Most high-price goods are imported - mainly from China - so a dramatic reduction in household expenditure on such goods would bring nothing but benefits over a 5 year view.

    You need to get away from the idea that post 1948 Britain was in any possible sustainable or advisable and get back to a 1937 mind-set.
    (and no, I'm NOT joking)

  • Comment number 39.

    8. At 01:40am on 22 Jun 2010, kered wrote:
    So 880,000 will get a tax cut of £3.84p a week! Wow!

    Jeez! could the bad news be worse?................................

    Well, Gordon Brown could still be in charge..

  • Comment number 40.

    9. At 02:29am on 22 Jun 2010, Tom wrote:
    CD London: the 'assertion' that VAT rises hit the poor hardest IS based on real data - and data which is very easy to find if you're actually interested in it, instead of simply coming up with a speculative counter-argument based on your ideas of what different groups spend their money on.

    According to the Office for National Statistics, in 2007/08 the poorest fifth of households spent 10.8% of their gross income on VAT. The richest fifth of households spent just 4.5% of their gross income on VAT.

    Or, if you prefer to look at disposable income, 12.1% of the disposable income of the poorest fifth of households went on VAT; 5.9% of the richest fifth's did.

    VAT rises hit the poor hardest. That's not an assertion, that's a provable fact.

    Another fact is that the richest fifth pay proportionately more in tax

    This is such an inane point (that the poorest pay more VAT as a percentage of income)

    They also get many benefits, which soak up items that their incomes would otherwise be spent on

    Now, I don't begrudge that, although the VAT argument makes me want to throw up, as it is a ridiculous point to focus on

  • Comment number 41.

    12

    Your VAT point is doing really well, until you imply that a third of items will be vatable in most trollys

    This is a wild overestimation

    I suggest that posters look at the VAT on their next few, and last few supermarket receipts, the number of items VATable will be much less than a third (as an average)

  • Comment number 42.

    8. At 01:40am on 22 Jun 2010, kered wrote:
    So 880,000 will get a tax cut of £3.84p a week! Wow!


    No, please read it again - Nick wrote that 880,000 will be taken out of the tax system, and ALL Basic Rate tax payers will get a tax cut.

  • Comment number 43.

    21. At 07:52am on 22 Jun 2010, tm123 wrote:
    Nick I also think that the lower paid are not serously affected by vat increases. The hit is taken by middle & higher earners. Research needed on this.

    It will be interesting to see what the small print is re capital gains. By all means tax speculative gains but ONLY IF THE GAINS HAVE BEEN INDEXED LINKED. There are a lot of people out there who tried to create a pension by buying a buy to let property( not a second home) and saving over the years to pay the mortgage back. After 20yrs plus yes there is a gain but not so great when looked at with inflation taken into account.

    If you are lucky enough never to need the capital you will do what the Americans did when they were faced with tax increases - DO NOT SELL.
    People who have attempted to improve their position in retirement should not be penalised for doing what we should all have done over the years.



    --------------------------------------------------------------------
    If you only have one other property (holiday home or buy to let) then there are ways of avoiding paying CGT on its disposal. It will entail 'living in it' for a while but is that such a great hardship to gain a valuable, very private, pension pot?

    What I think GO & Co are trying to do by going back to 40% CGT is to take some of the gains of the people running strings of properties. The property market is out of control but it is not easy to cool it down without creating even bigger problems for Government and the Chancellor in particular. So by taking this approach, he may damp the housing market a little and push some more properties onto the market.

    There is something of a myth building up that 40% CGT hits business entrepreneurs. It doesn't really, at least not until some way down the line and then it tends to only affect the investors who may well not be the ones doing the 'entrepreneuring'. Most new businesses are SME start-ups and most fail within the first year. Until you actually have a successful business and want to sell it (perhaps to finance another venture), then the CGT cuts in and may be a 'problem'. A very nice problem to have! That is going to be some years in the future.

  • Comment number 44.

    22

    The £903bn is the national debt

    The deficit is around £156bn

  • Comment number 45.

    I'd not be surprised if the rise in personal allowances was not £1000 now and £1000 more from next April, with a commitment to raise it by a similar sum each year.
    Once it reaches £15k they can stop, though a minimal rate until £25k (median earnings) would then be the target.

    Al benefits get cut to a basic 2 to compensate:
    Unemployment
    Pension

    Housing would be as a supplement to these, ONLY.

  • Comment number 46.

    #42 DerekH
    Pedant's point - ALL tax-payer's will get a cut, as the £1000 extra (alleged) would give an equal cash sum (of our OWN money!) to all earning above the basic threshold, whether £10,000 or £1,000,000

  • Comment number 47.

    30#

    Maybe you should have stuck to organised crime instead Charlie, running jobs for that nice Mr Bridger, eh?

  • Comment number 48.

    I dont envy this government, damned if they do, damned if they dont. Clearly from what commentators are saying, no one is going to be happy after todays bombshell.
    I do wonder if the coalition have chopped off their noses to spite their face in all this, for weeks they have been saying how very bad the last government left the country in and how we are all in it together etc, doom and gloom, yet they are considering a tax rate rise for the lower end of the wages scale? This doesnt make sense. The VAT rise does, that I agree with, however last time we had one Tesco used it as an excuse to hike up everything they could get away with. Suddenly food went sky high for no reason at all. Are we going to see the same sort of profiteering now? Food prices have remained high and have not gone done but yet still up, so just how much more are they going to gte away with? At this current time no one knows what is going to be in this 'emergency' budget so lets not get out of our trees until we do know..Whichever way it goes its going to get rough for all, and no amount of sweeteners is going to change that.

  • Comment number 49.

    #41 Kevinb
    That would apply to vat at a reduced amount to the treasury if you purchased a certain can of beans at the top rate which was grossly over priced in the first instant than buying the company brand? with the same ingreadents?
    looks like all and sundry will be looking for cheaper products.?

  • Comment number 50.

    Reactions to the Budget by people and businesses will be much more important than the Budget detail.
    First question: Will consumers and businesses feel confident enough to ease-up on paying down their own debts? If we do slow-up on cutting our debts, that 'normal' spending will compensate for the huge withdrawals of taxes and government spending that are unfolding.
    Second question: Will Bond prices in UK & Europe continue to rise in response to purchases? If they do rise, long-term interest rates will continue to fall. Which will encourage business spending.
    Third question: Will more people get moving to new and better jobs and to new homes? If they do, the economy will step up a few notches and consumer purchases will flow with normal vigour.
    Those reactions - or inactions - to the Budget will be more powerful than anything written here by any of us.

  • Comment number 51.

    #9
    "Or, if you prefer to look at disposable income, 12.1% of the disposable income of the poorest fifth of households went on VAT; 5.9% of the richest fifth's did. "

    Sorry but the words 'poor' and 'disposable income' strike me as an oxymoron. If you have disposable income you are not poor and are not spending it on essentials but luxuries.

  • Comment number 52.

    people need to look at the poor to see this will hit them worse and pensioners. ive worked since leaveing school. and have done my best for my self. but i have a very good friend. who is a single mother in a flat. she gets income support child beefit. but does not get much at all. she has to buy food,pay gas elec, nappys. etc. so this is goin to hit the poor hardest. vat increase what a joke. first it goes down to 15% then to 17.5% now it will be goin up to 20%. well to be honest this country is a joke. the torries will be kicked out at next election they have thrown all there pledges they made out of the window and the uk will be bk in to recession by christmas. all because the last goverment was useless and the top bankers just robbed us all and the mps. and now we have to pay for there misstakes while they caount there millions and not have to worry about a penny. where as most uk residents will be braceing themselfs for the results of the budget. i can conclude every thing will be goin up. fuel,tobbaco,booze,vat etc its a joke. i can see very hard times to come and more jobs ending because of this, this is not goin to help the country we are not goin to spend as much because we cant afford it yet mps will always have a pay rise why not cut there pay and save money. get rid of mps privilages that will save us money sell the helicopters that will save alot of money whats wrong with public transport that will be alot better.

  • Comment number 53.

    40. At 08:59am on 22 Jun 2010, Kevinb wrote:

    They also get many benefits, which soak up items that their incomes would otherwise be spent on
    ------------------------------------------------------------------
    And there is a hint of a real problem.

    The previous Government forced, via a variety of measures, more earning people into receiving one or more benefits from the State, often for the first time. So just like taxing road fuels and everyone having to pay more NI to 'compensate' the NHS for the taxes they are going to have to pay to run ambulances, get staff to work and transport medical supplies, so when you 'give' benefits to support earners' 'low' incomes you don't really want to tax them more. All you are doing is expanding the tax 'economy', not the real one.

    It would be better to enable earning people to work and earn sufficient income to live without State support (and to save for the future) than to give with one hand and take away with the other.

    Which is one of the reasons why I frequently post that it would be a good idea for the wealthy and high paid to accept much higher taxes now in order to straighten out a very 'bent' economy and fiscal set-up. They would eventually gain more in future.

    Carry on taxing the poor and low earners to the hilt, if you will. But be aware that you are shooting yourself in the wallet, in everything other than the very short-term, as you do so.

  • Comment number 54.

    52

    MPS have declined to take the 1.50% pay rise recommended by a separate body, and all ministers have voluntarily cut their pay by 5%, and frozen the 95% figure for the 5 years of this parliament

    So, that might interest you, bearing in mind your comment on the fact that MPs will always have a pay rise

  • Comment number 55.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 56.

    #5

    "I think that the banking system should be made to pay a very substantial part. Afterall, it was they who basically drove the economic car into this mess."

    Yes, but many (i.e. anyone who borrowed lots and enjoyed low interest rates) were happy to be passengers up till the crash weren't they? People are fast to blame the banks and forget their own responsibility to live within their means.

    That said if you're a responsible saver feel free to have a nice rant!

  • Comment number 57.

    Can we have a little consistency on our definition of poverty?

    On the one hand we hear that 'Tory cuts' will apparently make it impossible for large sections of society to feed and clothe their children. It seems hard to square this with the notion that this same group of people are major payers of VAT.

    Of course, we wouldn't want that to get in the way of a good Labour sound-bite. Certainly not one that seems to have been bought by some of our most illustrious political journalists.

  • Comment number 58.

    #9 Tom:
    According to the Office for National Statistics, in 2007/08 the poorest fifth of households spent 10.8% of their gross income on VAT. The richest fifth of households spent just 4.5% of their gross income on VAT.

    Try looking at the figures for VAT as a proportion of household expenditure. You'll see a rather different picture. It seems those cunning middle classess have been dodging VAT by not spending all their income. Don't worry though, they'll have to spend it eventually.

  • Comment number 59.

    13. At 06:42am on 22 Jun 2010, Shaun wrote:
    "...Basically, stop complaining, accept it. We are all in the same boat..."

    Yes we're in the same boat. The thing is, on my income I'm in a very nice executive suite with a balcony, while others are down by the engine room with a shared toilet. This government will hit hardest the workers on average wages, or those who are poorest where small decreases in income have a significant effect.

  • Comment number 60.

    I just hope this budget doesn't just prove that once again we are at the mercy of the banks and their investors. The whole system needs to change, as to allow money, which in itself has no value or no other purpose but to tie value to an asset; to generate more money has got to be the most unnatural and derogatory process known to mankind. It doesn't work in science, so why should it work in economics?

  • Comment number 61.

    Why is it always blame the bankers? Which bankers are you talking about?

    The investment bankers who stupidly packaged up sub-prime mortages and sold them to each other and then worked out they were worthless and had to go hand in hand to their national governements to bail them out? Idiotic of them but they didn't start this financial mess, they didn't lend the money recklessly to vast amounts of people who couldn't afford the repayments, who had little or no income. It wasn't investment bankers who sat in high street branches up and down the US and UK giving out mortgages of 5-6 times someone's salary, or 3 years before you had to repay a penny. It wasn't the investment bankers who gave these packages AAA+ ratings.

    Its such a bad idea to overly penalise and tax the banks. They will then go the way of the rest of our industry and be taken over, more jobs will then go abroard, corporation tax will fall and we will be in a worse state than we currently are.

    We need cut the paperwork in our public sector, 20% of teachers/nurses/police time is spent filling in forms for another level of bureaucracy to co-ordinate and then analyse. A number of friends work for the state and the stories I hear of waste are unbelievable. Its your money they are wasting!

  • Comment number 62.

    All this talk abut VAT hitting the poorestbthe hardest is probably true.
    The poor, or unemployed ( wont work, better off on benefits type )to you and me, spend more of their income on junk like McDonalds,Pizza Hut, cigatettes and alcohol. Therefore they will be hit hardest, but does anyone force them to consume such "pleasures"?

    Raise the taxable treshold to £10,000 and slash benefits for the above.
    We have to make it pay to work in this country otherwise we are doomed.
    Also, no bonuses for the bankers until they repay all that they borrowed from the taxpayers, with interest of course.

  • Comment number 63.

    "craigmarlpool wrote:
    Muadib2 @ 4.

    13 members of the cabinet went to eton...

    I suppose we are now able to call this Govt an Eton Mess."

    We had this dicussion before the election with the same accusations being made against the Shadow Cabinet - after the claim was investigated the correct number was found to be 3 or 4 (depending on what positions you considered to be in the cabinet)

    So if this IS true (and I very much doubt it) the vast majority of these would likely be Lib Dems.

    Far more likely that someone who is against the Tories/Lib Dems pulled some numbers out of the air.

  • Comment number 64.

    "Tom wrote:

    According to the Office for National Statistics, in 2007/08 the poorest fifth of households spent 10.8% of their gross income on VAT. The richest fifth of households spent just 4.5% of their gross income on VAT.

    Or, if you prefer to look at disposable income, 12.1% of the disposable income of the poorest fifth of households went on VAT; 5.9% of the richest fifth's did."

    I agree that VAT hits the poor harder than those who are better off - but I am not sure that those figures can work.

    VAT is paid at 17.5% on many things that it is charged on (I know that some items have VAT at a lower rate) so if someone spends all their disposable income on VAT rated products the rate would be 17.5% of their disposable income.

    Say that someone has a disposable income of £10,000 that would mean that they spend £1210 in VAT which would equate to over £6000 spent on VAT rated items leaving about £300 a month for rent and the food items that don't include VAT.

    The figure just seems a bit high to me.

    However, I do feel that items like fuel (both heating and for driving) should be exempt from VAT, and VAT should be more of a luxury tax.

  • Comment number 65.

    Public sector workers should stop whining about their wages and telling people to come and work in public sector to see what it's like.

    Public sector does not generate wealth, it's obtained through taxing the private sector who do generate wealth.

  • Comment number 66.

    #4, #63

    Personally, I'm delighted that our PM and other political leaders have been to the world's best school.

    At least they know how to treat their wives (remember GB as he left Downing St)? And will know, without being told, the correct form of address for greeting people of rank.
    Not to mention how to hold their cutlery and have an appreciation of fine wines, good food and etiquette.

    In other words, not let down our country when seen out and about in public - especially when abroad.

  • Comment number 67.

    How about cutting incapacity benefit or payment in kind?

    I've been unemployed and it is a struggle and if you pay someone who is sick for more than 52 weeks £28 a week more than you get on income support then you will encourae as many people as possible to get onto it.

    Exactly what is the extra money for? You don't pay for prescriptions, you can have a carer and local government support, the benefit office will help with travel expenses etc so what is the extra money for? I'm sure some people do need it but also a lot of people just use it as extra income and to pay it to alcoholics and drug addicts seems slightly contrary!

    Anyone who needs extra support should get it but the money should not be paid to them directly.

  • Comment number 68.

    34. At 08:45am on 22 Jun 2010, ziggyboy wrote:
    This lot don't understand basic arithmetic, have no morals and are in the world of self interest and the interest of the high earners.

    They accused Labour of boom and bust.

    Now we're heading for bust and flat.
    -----------------------------------

    I'm tempted to complain about this comment. Is it far too accurate to be on NHYS! The true test of the moral fibre of this government will be on how the enact the revenge our economy of the Bankers who created it. Or will they go easy on the banks because their friends and stocks are there?

  • Comment number 69.

    Quoted from below:

    "If you look at the things that soak up the majority of income of low-income families, there is no VAT involved. Housing, being the largest, has no VAT, nor does food. Clothing is also very low VAT. Travel (e.g. public transport) has no VAT. Together, housing, food, clothing and travel are the major items that "poor" people should have to spend money on, and none of them have VAT attached."

    Non - childrens clothing has full VAT. Food? What about Fast Food, Fish and Chips (more poor use these than the well off)?
    Travel? No VAT? If public transport were available (and reliable) to everywhere from everywhere at all times then sure. It doesnt. Welcome to reality, millionss have no choice but to have their own transport, so VAT on the buying of a vehicle. On the petrol, the oil, the servicing, the repairs, the parts, the tyres, the PARKING!
    And he says "The major items the poor "should" spend their money on?"?

    So, no TV. No entertainment, no pubs, no Alton Towers for the kids,no trips to the swimming pool. No cinema. No pets. Coffee Shops. No gardening. Or kids video games. And thats without mentioning alcohol (at home), smoking ..
    Or what about their carpets? Furniture, Fridges? Cookers? Electricity and Gas!! Internet subscription (which is now everyone's "right"). No telephone, mobile or landline.
    Or are all those "luxuries" which are just too good for the poor?

  • Comment number 70.

    In the next two hours GO can do a lot of damage or he can start a patient and consistent rebuilding of the UK economy and fiscal structure. I hope he gets it right. Go, George, Go!

    But hey! Let's be very careful out there, today.

  • Comment number 71.

    13 members of the cabinet went to eton...

    I suppose we are now able to call this Govt an Eton Mess.
    -----------------------------------------------------------

    Ho ho ho.

    Thats all you lot are good for. Dumbed down, angry-villager-friendly, soundbites.

    Your lot couldnt run a bath let alone a country.

  • Comment number 72.

    Re 21
    I'm not convinced by the arguments about CGT on property purchases - it seems to me that people have based future financial plans on speculative growth in non-productive assets supported by greedy bank lending. It would be interesting to know how the economy would look if the money sunk into housing had instead been used for economically productive activities such as investment in companies and hence jobs.
    I am concerned that we will try to revive the housing bubble to create a feelgood factor whilst continuing to make the country an increasingly unpalatable place to live for the young, the poor and the unemployed (who will probably end up being a common group).

  • Comment number 73.

    Little 'good' news in the Budget. It could, and probably should, have gone further but at least if we take the pain now, we can return to more prosperous time from 2016 (if you believe the Chancellor). I'm glad to see that some of the pain taken in the private sector is now to be transferred to the public sector although it is pleasing to see that the lowest paid workers in the public sector will not suffer quite as much. The VAT rise was expected and although it is regressive, what other choice did the Chancellor have? VAT is easy to collect and we all pay it whether we like it or not!

  • Comment number 74.

    71. At 12:34pm on 22 Jun 2010, BringOnLauraKuenssberg wrote:
    13 members of the cabinet went to eton...

    I suppose we are now able to call this Govt an Eton Mess.
    -----------------------------------------------------------

    Ho ho ho.

    Thats all you lot are good for. Dumbed down, angry-villager-friendly, soundbites.

    Your lot couldnt run a bath let alone a country.


    Probably not...although the last Labour Government were a shower

  • Comment number 75.

    From Modern Molly:
    "Oh really - thank you for that there I was as a government employee thinking I had been featherbedded - after all I have had a whopping pay rise of 1% in the last 4 years - in the same time inflation has run at around 5% so in effect I have had a pay cut for the past three years. I have also been made redundant from one job and had to take a pay cut of about 15% to get another one - silly old me for being a workshy scrounger and expecting to make a living wage for doing all the jobs the private sector dont want to.

    I really do get sick of people in the private sector endlessly whinging about the public workers. If it was such a great deal why didn't you work for the public sector ? I'll tell you why you couldnt have handled the pay drop or the hours that most of us do out o0f a sense of duty and care. And before you spark up saying how well the public sector is paid that might be true at the very top of the civil servioce - its very far from true at the bottom end. I am a uni graduate carrying a huge responsibility - my pay £19,000 - hardly a kings ransom is it ? In a private company I'd earn 35k - I know because I used to work in private sector but some of us feel we should put something back into society rather than just expecting it to be done for us."

    Let me illustrate my point of view of working in the "35k+ private sector" ....as someone struggling to run my own business putting in weeks of 50+ hours or more, I was lucky to take home ANY wages from it because things got so bad thanks to the recession. A pay rise was something I could just dream of. And before you ask, the business was providing a service that many people relied on where I lived, yet sadly, my costs were so high it no longer became viable. I also - to pay my bills, worked 10 hours a week doing a night role (for a private company -also providing a vital rural service) for £5.90 an hour. Oh yes, and I worked 12 hour a week at weekends in a bar job to also try to pay my bills. This was for £6 an hour. It also stopped me going out spending money because I couldn't afford to. Yet every week, the same people were in there asking for NHS discount, Teacher's discount etc etc. Don't get me worng, I'm not denying the job they do is not vital, but if they can afford to go out each week and I can't, who should be asking for the discount here? And having spent 3 years struggling to make ends meet, working endless long hours in 3 jobs, and being taxed to the hilt in all 3, I have Zero sympathy for bleating public sector workers complaining about their hard life. Sorry, but please get real.

  • Comment number 76.

    TILL DEATH OR ..(VERY) EARLY DISSOLUTION DO US PART !!
    Reading BBC blogs used to be predictable fun in the old days, i.e. before May 2O1O, with lots of daft, boring, insipid , monotonous and just daft anti-Gordon balderdash holding him responsible for anything Blair had left him with : destructive and self-righteous Blairites, the war, economy, Icelandic dust, you name it ! NOW probably also the mess the Lib-Dems could be hold responsible for by supporting everything their new and unlikely friends are expecting them to agree with in exchange for some minor compromises (fox hunting, green, gays et...) What matters to most people a.o. is the Tories 2O% VAT increase , among the many other appalling and totally unnecessary cuts if one is concerned about human frailties... Many of us have been warning the nation over the past few years of the SERIOUS consequences of rushing the recovery i.e. all the things Mr.Brown had been trying to avoid. Like a return of the Scargill days , strikes and unrest, the winter of discontent..Perhaps with the Lib-Dems carrying the can ??. We all thanked the first Tony Blair Government to improve industrial relastions, minimum wages and so on, It is almost as though time stood still over the psst 13 years since the Tories were in power as they appear to go straight ahead to the old days, ignoring all that has been achieved since the days of John Mayor and Ms. Thatcher. Are we expected to rely on some young gentleman from the Lib-Dems apparantly without any serious senior experience at the highest level, i.e. that of Brown/Darling, to tell us what our priorities should be : the haves and have nots? Those who can look after themselves and
    those who cannot ? The young and the old,, ill and handicapped (even physical handicap support is cut down.., one understands)., the bright and the not so bright, the list is long...
    Finally, a significant example of the current Lib-Dem v. nation confusion: When Mr. Cameron recently tried to keep calm at PM QT about the always skilfull and experienced Ms. Harman (shadow deputee leader) on one of the questions the P.M. might now expect
    almost as often as Gordon Brown had to endure over the past year, , Ms. Harman who calmly concentrated on one question only despite the P.M. repeatedly unsuccessfully changing the subject , eventually decided that he ran out of answers (patience) , but then briefly mentioned Ms. Harmans Civil Rights background...which still invokes some laughter from Tory frontbenches if all else fails, including ....the new leader of the Lib-Dems..., even though no other Party in this country is more associated with Human Rights issues, Freedom of the Information Act etc... A Party, by the way also claiming a large prcentage of female MPs, although it is not quite clear either why sofar not even one of them was envited to join the " coalition". Perhaps they had too much good sense for what is beyond question already becoming a very serious and obvious problem , not in the least since many Lib-Dems are anti-Tories... (if given the choice).
    There was very little time to reach a decision when the results came in. Now that the Tory pros and contras are becoming dangerously clear already, any decisions about the Budget should be postponed by the Lib-Dems. The matter should be discussed during the annual Party Conference later this year when a vote could then be taken how to proceed, including any alternative possibilities in respect of the leadership and any less hazardous options than the current one.

  • Comment number 77.

    Cindiski wrote
    "Let me illustrate my point of view of working in the "35k+ private sector" ....as someone struggling to run my own business putting in weeks of 50+ hours or more, I was lucky to take home ANY wages from it because things got so bad thanks to the recession. A pay rise was something I could just dream of. And before you ask, the business was providing a service that many people relied on where I lived, yet sadly, my costs were so high it no longer became viable. I also - to pay my bills, worked 10 hours a week doing a night role (for a private company -also providing a vital rural service) for £5.90 an hour. Oh yes, and I worked 12 hour a week at weekends in a bar job to also try to pay my bills. This was for £6 an hour. It also stopped me going out spending money because I couldn't afford to. Yet every week, the same people were in there asking for NHS discount, Teacher's discount etc etc. Don't get me worng, I'm not denying the job they do is not vital, but if they can afford to go out each week and I can't, who should be asking for the discount here? And having spent 3 years struggling to make ends meet, working endless long hours in 3 jobs, and being taxed to the hilt in all 3, I have Zero sympathy for bleating public sector workers complaining about their hard life. Sorry, but please get real.

    I am real - I am working about 40 hours a week in a job with tremendous responsibility for £19k, no pay rises in three years and non now for another two years. The public sector has done more than its fair share providing services you all use on low wages, stressed and under resourced staff and at a price which private business could never run at. Look how well the private model has worked in electricity, gas, water - did anyone notice an increase in efficiency, lower prices, more investment - if you did than I am amazed because I havent seen them.

    If you cant make a profit running your own company as a private business then I am sorry - you have a bad business model. I say that as someone who also ran their own business in 1989 employing 16 staff - my business went west when the last Tory government allowed interest rates to run amuck and wiped me out. To bail myself out I was holding down three jobs and had a miscarriage as a result so please - we can all talk up a hard luck story about our own business. When my beusiness went west I never complained about the public sector because I was honest enough to appreciate I wanted a shot at the big time - work for public sector on low wages - not a chance. But I never attacked those who did because I understood they are providing the services for me that one day I might need (and in fact did).

    My point was that the public sector - far from being an overmanned eden of high wages and gold gilt pensions is anything but as anyone who has worked in it will attest to - as opposed to people taking a view who have little or no idea what a lot of the public sector do.

    I can see you would like a cut in it - it looks as if you will get your wish but as its often said "be careful what you wish for" when the public sector has been sold off and your council tax bills go up a huge amount, when the services dont exist that you need and when we have finally adopted the American low tax/no service model I rather suspect a lot of people who demanded cuts will be rather sorry. Especially all the small fiorms who will go bust - just like yours, when the public sector slashes its budgets.

    By then I will have retired on one of those gold gilted pensions of around £4,000 a year - lucky old me eh ?

  • Comment number 78.

    77

    You will be getting a pay rise of £250 for the next two years, ie 1.3% year one, and 1.3% year two

    So you are wrong in saying that you won't be getting a pay rise

    You are wrong on the utilities, as far as investment goes, there has been huge investment. Personally I would like to have seen the utilities remain in public ownership, particularly water, although investment has happened

    I think you are being somewhat hypocritical when you suggest that Cindiski has a bad business model (as he can't make a profit) when your own business went bust. Clearly your own risk model was flawed, as it could not deal with high interest rates

    I disagree with your assertion that the public sector provides services more cheaply than the private sector..it will vary too much for their to be a generalistic absolute truth, although if I had to chose one way or the other, I would say that the public sector is more expensive

    As far as your pension is concerned, you under value it

    You would need a pension fund of around £120K to provide you with your £4000 a year pension, if you purchased it on the open market

    May I venture that you have not contributed £120K to your pension?

 

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