Ashton Moss Messi
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Hunt considers National Insurance cuts at Budget
News of the possible move comes as a leading think tank says the case for cutting taxes is "weak".
www.bbc.co.uk
The article from the BBC points out all the contra-advice to say how it's not a good idea, for example,
Office for Budget Responsibility (OBR) - Last month the Office for Budget Responsibility (OBR) described the government's "pencilled-in" post-election spending plans as a "work of fiction".
OBR head Richard Hughes recently said a description of the government's pencilled-in post-election spending plans as a "work of fiction" was "generous" because the "government hasn't even bothered to write down" its plans for individual departments.
Institute for Fiscal Studies (IFS) - even this "unhappy outlook" for the public finances was based on spending cuts and tax rises, including a rise in fuel duties and changes to business rates that were "unlikely to be realised"
International Monetary Fund (IMF) has "advised the UK against further tax cuts", as it launched its latest assessment of the world economy. It said preserving public services and investment implied higher spending than was reflected in the government's current plans. The IMF suggested the Treasury's pencilled-in spending cuts from this year were unrealistic.
Tax cuts don't help the country - they help the incumbent government who can cut taxes.
The populace suddenly feels like they have more money available, could be an extra £50 in the pay packet.
People can then spend it on something of their choosing (don't spend the £50 all in one place).
In days gone by, it could have been on something important, such as new shoes for the kids.
These days it's more likely to be something desperate, such as buying some food, or paying one of the red letter bills.
Either way it will give a short-term boost, until you realise that it's only eased the pressure a little because prices of the essentials are still going up - the mortgage/rent, food, heating, etc. and that £50 extra has already gone into the general cost of living.
The government hopes to get the boost benefit from the tax cut say 2-3 months after giving the tax cut, before reality sets in.
Pay packet tax cuts only benefit the workers in the short-term.
Capital investment tax cuts benefit the wealthy and the corporations, providing more profit to raise executive pay, buy more assets and property.
Giles and Samantha will be able to buy that little house for son Christopher or daughter Tiffany and pay cash, not worrying about the price or the interest rates. And while they're at it, maybe buy another as a buy-to-let because there are plenty of other desperate youngsters who can't afford to buy at all.
Commenting on the IMF's advice, Mr Hunt said: "The IMF expect growth to strengthen over the next few years, supported by our introduction of the biggest capital investment tax reliefs anywhere in the world, alongside National Insurance cuts to improve work incentives.
(That's the same IMF that said this year's spending cuts were unrealistic, so quoting IMF's view of strong UK growth as a basis for economic strategy is cuckoo land).
The country cannot be universally benefited by dishing out £50 here and there, it needs major public money invested on a wide scale to improve the lives of the many. NHS funding. Education. Public transport. Roads infrastructure. Social care. Inevitably this will mean government borrowing, but that isn't a problem even for the current government - look up the increase in national debt in the last 15 years and then ask yourself "where's my share of that?"
Let's bask in the joy of a possible 1% cut in NI being worth £4.5bn reported in today's propaganda briefing.
What's the betting it would be effective in September-ish ready for an Autumn election.
And let's look at what would really pay for that £4.5bn - borrowing.
Office of National Statistics -
UK general government gross debt was £2,654.3 billion at the end of Quarter 3 (July to Sept) 2023, equivalent to 100.0% of gross domestic product (GDP). UK general government deficit (or net borrowing) was £39.2 billion in Quarter 3 2023, equivalent to 5.8% of GDP. 31 Jan 2024
Forecasts of reduced borrowing are based on those assumptions that the OBR, IFS, IMF are works of fiction.
And why does borrowing matter? Well, the interest payments have to come from somewhere and post-1980s history says it's cuts to public spending, the NHS accounting for 20% of public spending.
