The Labour Government

[Kompany Car]

I think that if there’s a consensus that additional public spending is required, then the most efficient and equitable thing to do is simply to raise the basic rate of income tax.

We need to move away from this fallacy that you can make a meaningful difference in public expenditure by only targeting certain groups, be that non-doms, private school fees etc, and that businesses can be targeted in isolation, with no impact on households. The whole fiasco around the £22bn fiscal black hole was entirely manufactured and only developed because Labour saw it politically necessary to avoid an increase in income tax.

Personally I think it would be much simpler and more honest for people to vote for an income tax rise if they want public expenditure to increase. And if they don’t want to see income tax rising, then public expenditure shouldn’t be increased. This idea that you can fund a significant increase in spending and get someone else to pay for it is rapidly running out of road.

Dont agree with all of this, but you are correct in that politicians should treat voters as adults and make it clear what the choices are.

Fiscal drag is already pulling more millions into tax or higher rate tax. Maybe removing the upper earnings limit on NI contributions and/or a simple ring fenced flat rate NHS/Care tax which is clearly tangible where the money is going would be better. The NHS/Care Tax could then be levied on all income including when money is taken from private pensions.

 

[BlueHammer85]

Full-time working adults are between £1,400 and £2,500 a year better off from today, thanks to a rise in the minimum wage.

Employees aged 21 and over are entitled to £12.21 an hour, 77p more, representing a 6.7% increase.

Staff aged 18 to 20 will see their wages increase from £8.60 to £10 an hour, or 16.3%.

 

[ganganvince]

Full-time working adults are between £1,400 and £2,500 a year better off from today, thanks to a rise in the minimum wage.

Employees aged 21 and over are entitled to £12.21 an hour, 77p more, representing a 6.7% increase.

Staff aged 18 to 20 will see their wages increase from £8.60 to £10 an hour, or 16.3%.

That would only affect people who were earning below this rate the vast majority are already over this and will not be affected.

 

[Bluemanc100]

That would only affect people who were earning below this rate the vast majority are already over this and will not be affected.

Smoke and mirrors then

 

[ganganvince]

Smoke and mirrors then

Not really good for those it affects but just wrong to imply all full timers are in for a rise.

 

[Metal Biker]

Full-time working adults are between £1,400 and £2,500 a year better off from today, thanks to a rise in the minimum wage.

Employees aged 21 and over are entitled to £12.21 an hour, 77p more, representing a 6.7% increase.

Staff aged 18 to 20 will see their wages increase from £8.60 to £10 an hour, or 16.3%.

Everyone at our work has been told we're having our hours reduced from April 1. The 'pay increase' is neglible. Happens every year; the pay goes up, so the hours go down. It's the same for a lot of people on the living wage.

 

[Kompany Car]

Full-time working adults are between £1,400 and £2,500 a year better off from today, thanks to a rise in the minimum wage.

Employees aged 21 and over are entitled to £12.21 an hour, 77p more, representing a 6.7% increase.

Staff aged 18 to 20 will see their wages increase from £8.60 to £10 an hour, or 16.3%.

Yet their disposable income will remain unchanged or even go down with the 20% increase in water/sewage bills, 6.4% increase in energy and of course food inflation which the rate currently doesn't look too bad until you look at the increases in the cost budget brands which are 30% up over the last 3 years.

 

[Churchlawtonblue]

Full-time working adults are between £1,400 and £2,500 a year better off from today, thanks to a rise in the minimum wage.

Employees aged 21 and over are entitled to £12.21 an hour, 77p more, representing a 6.7% increase.

Staff aged 18 to 20 will see their wages increase from £8.60 to £10 an hour, or 16.3%.

Some will be better off some will be worse off.

 

[The Future’s Blue!]

That would only affect people who were earning below this rate the vast majority are already over this and will not be affected.

When you look at the average rise in wages over the last 12 months of 5.8%, and with a deficit in people for jobs, what I’m waiting for now is to see if there’s some feel good factor in the population.

God, we need it.

 

[Kompany Car]

When you look at the average rise in wages over the last 12 months of 5.8%, and with a deficit in people for jobs, what I’m waiting for now is to see if there’s some feel good factor in the population.

God, we need it.

There is no "feel good" factor. Since Covid that has been thrown in a deep dark hole never to return. As a country we've wasted billions and now we are paying for it, well everyone but the very wealthy are.

The deficit in people for jobs has been there for years, most of them are minimum wage or just above and as others have posted, the redundancies are just about to start to filter through. Sainsbury's losing 3000 staff, Morrisons 300 staff, RBS 600, HSBC losing 8% of staff, British Steel Scunthorpe 2700, Sky call centres in the UK 2000 jobs, 10000 from NHS England. Thats before we start with the secondary impacts in the local economies.

With major civil infrastructure projects being delayed or cut back, lots of small to medium sized and some larger construction companies are becoming insolvent and laying off staff. Trumps export tariffs will also kill off the last few remaining bits of manufacturing we have. Great talking about NPR or the lower Thames crossing but it will be years before they start employing significant numbers of people, same with Heathrow 3rd runway.

Its a complete shit show, with a huge heap of luck we might see some improvement in about 10yrs but until then, the light at the end of the tunnel is firmly switched off.

 

[Vic]

Yet their disposable income will remain unchanged or even go down with the 20% increase in water/sewage bills, 6.4% increase in energy and of course food inflation which the rate currently doesn't look too bad until you look at the increases in the cost budget brands which are 30% up over the last 3 years.

For most, the increases in water and energy will equate to about a couple of cups of coffee shop coffee a week.

A one per cent pay rise on average wage would cover that.

 

[Brewster's millions]

The post I replied to stated, "I can guarantee that this move will push up inflation. You are just naive to think otherwise"

Can you tell me where in the BoE Decision Maker Panel survey from January, it says that the NI hike specifically will guarantee higher inflation? As far as I can see, just over 56% of the panel, say it could. 62% also say that it will result in lower profits. 53% in lower employment.

So, only just over half the panel "expect businesses to respond ... with higher prices ... due to NI", and that's a panel made up of businesses, so is much more likely to be pessimistic about something that affects their own profitability. It's essentially a crowdsourced "guess", and even then nearly half the crowd disagree. Seems to me to suggest, it's complicated, with multiple potential outcomes, and no-one can guarantee anything.

Even your own post doesn't say guarantee, and I'm pretty sure you wouldn't make a statement as simplistic as the one I replied to (which is why I usually quite enjoy reading your posts), so I'm surprised you're defending it.

Few things to discuss here.

First, as you stated, I didn’t use the word guarantee because I think it’s a bit of a meaningless phrase, but I still think it’s very, very likely that the NI hike does push up on inflation over the next few months. The inability to guarantee that something occurs doesn’t reduce the prospect of it happening or make its impact any less severe.

The more substantive issue relates to the proportion of businesses planning a price rise in relation to the NI hike and how this is likely to lift inflation.

The fact that only just over half of the businesses sampled are planning to raise prices, and not 80 or 90%, doesn’t really reduce the risk of a spike in inflation.

If you look at the underlying price data sampled for the CPI by the ONS each month, it really isn’t uncommon to find that half or even a majority of prices remain unchanged over the month. The key issue is obviously how the price change observed over the month relates to the price change in the corresponding month of the previous year. Given that the NI hike is a new factor and not related to the normal seasonal pattern of price change, I would think it very likely that monthly price change will be unusually strong for a period and therefore boost inflation. Even if the NI hike only causes businesses to bring forward planned price increases, I would still expect price growth to remain stronger than it otherwise would be on a year to date basis, and therefore boost inflation.

Also, describing the DMP survey as a crowdsourced guess is a bit OTT. It does provide good information and its message in relation to the NI hike has been backed up by other surveys.

 

[Kompany Car]

For most, the increases in water and energy will equate to about a couple of cups of coffee shop coffee a week.

A one per cent pay rise on average wage would cover that.

If you're buying coffee shop coffee then you're virtually middle class :-)

The difference after tax for those on minimum wage is £89 per month assuming that they put nothing into a pension.

The increases in energy and water for an average household is around £16 per month, rates another £9 per month, broadband increase £3 per month, so you're already down to £61.

Everything is going up, but the real killer is food inflation at the bottom non branded end of the market, known as cheapflation (yep i dont like the term either) coupled with the profit taking from reducing the size of the packs, yep that other term shrinkflation. Its running at more than 10% year on year (36% in the last 3 years).

So by the time you're done and take into account all of the other 2% increases in clothing, insurance, mobile phone bills etc they will be literally a few cups of coffee a month better off which in the bigger scheme of things is next to nothing. Its certainly not gonna make people happier with thier lot in life.

We need a switch to a high income economy but to do this it needs investment. Labour were once proponents of modern monitarist policies but have abandoned it in favour of traditional macroeconomic policies.

 

[BigJoe#1]

For most, the increases in water and energy will equate to about a couple of cups of coffee shop coffee a week.

A one per cent pay rise on average wage would cover that.

Do you pay Council Tax?

Oh hold on this is Labour Party policy, to take money off those who can least afford it, so the lemmings celebrate... shameful.

What planet do you live on?

Everything is going up and will do so even more this month when the Employers NIC hits. employers are going to have to recover these costs somehow.... increased prices

Development, Materials, Production, Distribution, Retail, Energy, Rates, Insurances .... everything is going to increase, the less than £10.00 a week increase in pensions will not cover the additional costs people are going to face.

And no. I am not going to congratulate Labour.

 

[meltonblue]

I think that if there’s a consensus that additional public spending is required, then the most efficient and equitable thing to do is simply to raise the basic rate of income tax.

We need to move away from this fallacy that you can make a meaningful difference in public expenditure by only targeting certain groups, be that non-doms, private school fees etc, and that businesses can be targeted in isolation, with no impact on households. The whole fiasco around the £22bn fiscal black hole was entirely manufactured and only developed because Labour saw it politically necessary to avoid an increase in income tax.

Personally I think it would be much simpler and more honest for people to vote for an income tax rise if they want public expenditure to increase. And if they don’t want to see income tax rising, then public expenditure shouldn’t be increased. This idea that you can fund a significant increase in spending and get someone else to pay for it is rapidly running out of road.

Don’t agree with that, not with the wealth disparity at the levels it is at now. I’d personally be happy to pay more tax though.

 

[blueinsa]

For most, the increases in water and energy will equate to about a couple of cups of coffee shop coffee a week.

A one per cent pay rise on average wage would cover that.

Remember to use that next time you’re knocking on doors.

It’s a nailed on vote winner for sure.

 

[stonerblue]

That would only affect people who were earning below this rate the vast majority are already over this and will not be affected.

Who earns below minimum wage?

 

[stonerblue]

Do you pay Council Tax?

Oh hold on this is Labour Party policy, to take money off those who can least afford it, so the lemmings celebrate... shameful.

What planet do you live on?

Everything is going up and will do so even more this month when the Employers NIC hits. employers are going to have to recover these costs somehow.... increased prices

Development, Materials, Production, Distribution, Retail, Energy, Rates, Insurances .... everything is going to increase, the less than £10.00 a week increase in pensions will not cover the additional costs people are going to face.

And no. I am not going to congratulate Labour.

So the poor old massive companies with massive profit will pass the rise onto their staff and not take a dent in their profits?
And the poor pensioners £480pa rise is shit now is it?

 

[blueinsa]

So the poor old massive companies with massive profit will pass the rise onto their staff and not take a dent in their profits?
And the poor pensioners £480pa rise is shit now is it?

Does everyone work for a massive company with massive profits?

Again, the rise in National Minimum wage is great but it’s being wiped out by the continued rise in the cost of living and for too many, I’m going to hazard a guess here and say it will be short lived as employers start to cut hours and even jobs from people due to the rise in NI costs for them.

 

[stonerblue]

Does everyone work for a massive company with massive profits?

Again, the rise in National Minimum wage is great but it’s being wiped out by the continued rise in the cost of living and for too many, I’m going to hazard a guess here and say it will be short lived as employers start to cut hours and even jobs from people due to the rise in NI costs for them.

No, and i never said they did.