Current Affairs

[Onelife]

We’ll I’m not clever enough to understand it all so I’m not going to bother, only thing I would like to see is state pension being exempt from tax. Maybe I’m wrong on that too.?

Anyway I’m out of here for 2 weeks. After a restful night at the premier inn little witcome ( gloc ) it’s back on the road to Southampton and Iona. See you all in a fortnight.

Don’t have too much fun without me.

Have a great cruise screwy

Yep!...I second that

[towny44]

We’ll I’m not clever enough to understand it all so I’m not going to bother, only thing I would like to see is state pension being exempt from tax. Maybe I’m wrong on that too.?

It's only taxed for folks who also get pensions from their previous employers or pension schemes.

Indeed, but people with private pensions which take them above the tax threshold would benefit from having their state pension non taxable. Not that I am advocating this for everyone, but some sort of means testing of the level of private pension at which tax would be applied to the state element might be a useful, and fairly inexpensive, way of giving extra income to the poorest pensioners.

[Kendhni]

Going back to the NHS - one of the major problems is that there is no real financial management. I doubt that anybody knows how much the NHS needs as the financial policy seems to how much the government of the day wishes to give the NHS.

There was an announcement the other day that there will be another £100 million for social care - does social care need £100 million, or does it need £200 million? Perhaps only needs £50 million - who knows?

Agreed! Twice a year we see the headline 'Health Service in crisis'.
Another thing to add to that is that per capita the UK is towards the lower end of spending compared to similar countries.

I believe one of the main reasons for that is our hard nosed reluctance to pay the asking price for new drugs.

That among many other 'unwilling to pay' reasons.

[Kendhni]

We’ll I’m not clever enough to understand it all so I’m not going to bother, only thing I would like to see is state pension being exempt from tax. Maybe I’m wrong on that too.?

It's only taxed for folks who also get pensions from their previous employers or pension schemes.

Indeed, but people with private pensions which take them above the tax threshold would benefit from having their state pension non taxable. Not that I am advocating this for everyone, but some sort of means testing of the level of private pension at which tax would be applied to the state element might be a useful, and fairly inexpensive, way of giving extra income to the poorest pensioners.

Arguably means testing is done through the tax banding. You could say everyone gets their state pension and a chunk of private pension tax free. The more the lower tax band can be raised then the more pensioners (and non-pensioners) will fall into not having to pay any tax. But since 80% (allegedly) of the wealth in this country is (understandably) in the hands of the over 55's they cannot expect to live purely on the tax revenues of the 20% of the wealth.

[towny44]

It's only taxed for folks who also get pensions from their previous employers or pension schemes.

Indeed, but people with private pensions which take them above the tax threshold would benefit from having their state pension non taxable. Not that I am advocating this for everyone, but some sort of means testing of the level of private pension at which tax would be applied to the state element might be a useful, and fairly inexpensive, way of giving extra income to the poorest pensioners.

Arguably means testing is done through the tax banding. You could say everyone gets their state pension and a chunk of private pension tax free. The more the lower tax band can be raised then the more pensioners (and non-pensioners) will fall into not having to pay any tax. But since 80% (allegedly) of the wealth in this country is (understandably) in the hands of the over 55's they cannot expect to live purely on the tax revenues of the 20% of the wealth.

Ken, I am only proposing that those with small private pensions would be excused tax on their state pension, and this would only represent a small percentage of the total tax paid by pensioners. Similarly I think workers who receive universal credit need extra income, and maybe this could also be achieved by some increase in their tax free allowance.
But I do doubt that pensioners own 80% of the countries wealth, they will certainly own a high percentage of discretionary income, but that is only a small percentage of the total wealth.

[Kendhni]

Indeed, but people with private pensions which take them above the tax threshold would benefit from having their state pension non taxable. Not that I am advocating this for everyone, but some sort of means testing of the level of private pension at which tax would be applied to the state element might be a useful, and fairly inexpensive, way of giving extra income to the poorest pensioners.

Arguably means testing is done through the tax banding. You could say everyone gets their state pension and a chunk of private pension tax free. The more the lower tax band can be raised then the more pensioners (and non-pensioners) will fall into not having to pay any tax. But since 80% (allegedly) of the wealth in this country is (understandably) in the hands of the over 55's they cannot expect to live purely on the tax revenues of the 20% of the wealth.

Ken, I am only proposing that those with small private pensions would be excused tax on their state pension, and this would only represent a small percentage of the total tax paid by pensioners. Similarly I think workers who receive universal credit need extra income, and maybe this could also be achieved by some increase in their tax free allowance.

I was actually agreeing with you from a slightly different angle. I would say the state pension is technically tax free for everyone ... you are taxed on additional savings that take you above the tax threshold. And I also agree that raising the tax free allowance could help anyone on lower income.

But I do doubt that pensioners own 80% of the countries wealth, they will certainly own a high percentage of discretionary income, but that is only a small percentage of the total wealth.

Not 'pensioners' but the over 55's. It makes sense since many in that age bracket will own their own house/cars, many may own multiple houses renting them out and many/most will have significant funds in pensions and savings. I always thought that one way of helping, during economic downturns, is getting some of that money released into the economy, in a controlled manner.

[towny44]

Arguably means testing is done through the tax banding. You could say everyone gets their state pension and a chunk of private pension tax free. The more the lower tax band can be raised then the more pensioners (and non-pensioners) will fall into not having to pay any tax. But since 80% (allegedly) of the wealth in this country is (understandably) in the hands of the over 55's they cannot expect to live purely on the tax revenues of the 20% of the wealth.

Ken, I am only proposing that those with small private pensions would be excused tax on their state pension, and this would only represent a small percentage of the total tax paid by pensioners. Similarly I think workers who receive universal credit need extra income, and maybe this could also be achieved by some increase in their tax free allowance.

I was actually agreeing with you from a slightly different angle. I would say the state pension is technically tax free for everyone ... you are taxed on additional savings that take you above the tax threshold. And I also agree that raising the tax free allowance could help anyone on lower income.

But I do doubt that pensioners own 80% of the countries wealth, they will certainly own a high percentage of discretionary income, but that is only a small percentage of the total wealth.

Not 'pensioners' but the over 55's. It makes sense since many in that age bracket will own their own house/cars, many may own multiple houses renting them out and many/most will have significant funds in pensions and savings. I always thought that one way of helping, during economic downturns, is getting some of that money released into the economy, in a controlled manner.

Robin Hood had a similar philosophy to your's Ken, are you aiming for a similar role in history?

[david63]

I always thought that one way of helping, during economic downturns, is getting some of that money released into the economy, in a controlled manner.

Not sure how you would make that work - in fact the reverse is actually what happens. In an economic downturn those with investments start to see those investments falling in value thus leaving those with the investments having less disposable income - although it seems that Truss's magic money tree will, according to some, force the BoE to raise interest rates significantly - not sure how well that will go down with Truss.

[Mervyn and Trish]

I'm not an economist or politician but my basic maths is good, so I need guidance on this one.

I heard a report today that said that the fall in the £ against the $ had added £5 to the cost of filling a car with fuel, wiping out the benefit of crude oil prices falling, the report said, back to levels before Russia invaded Ukraine.

Now £5 a tank is a little under 10p a litre for the average car. Fuel prices are still 30p to 40p above pre invasion. So if 10p of that is currency fluctuation what is the remaining 20p to 30p?

Greed? Profiteering?

My theory is they think that prices having reached around £2 we will be so grateful they've fallen 25p we won't notice they're still trousering the rest.

[Kendhni]

I always thought that one way of helping, during economic downturns, is getting some of that money released into the economy, in a controlled manner.

Not sure how you would make that work - in fact the reverse is actually what happens. In an economic downturn those with investments start to see those investments falling in value thus leaving those with the investments having less disposable income

Not all money is necessarily held in investments (although the majority of it will ... but it is not the majority that needs to be released). One possible way of doing it would be to raise the limits on 'gifting' (albeit retaining 'deprivation' and IHT rules). The possible downside is it may fuel inflation, so now is not the right time.

- although it seems that Truss's magic money tree will, according to some, force the BoE to raise interest rates significantly - not sure how well that will go down with Truss.

It's worse than that David. Kwarteng made a couple of comments a few days ago that have been interpreted (by some economists) as him releasing the shackles from the BoE allowing them more freedom in setting rates.

[Kendhni]

Ken, I am only proposing that those with small private pensions would be excused tax on their state pension, and this would only represent a small percentage of the total tax paid by pensioners. Similarly I think workers who receive universal credit need extra income, and maybe this could also be achieved by some increase in their tax free allowance.

I was actually agreeing with you from a slightly different angle. I would say the state pension is technically tax free for everyone ... you are taxed on additional savings that take you above the tax threshold. And I also agree that raising the tax free allowance could help anyone on lower income.

But I do doubt that pensioners own 80% of the countries wealth, they will certainly own a high percentage of discretionary income, but that is only a small percentage of the total wealth.

Not 'pensioners' but the over 55's. It makes sense since many in that age bracket will own their own house/cars, many may own multiple houses renting them out and many/most will have significant funds in pensions and savings. I always thought that one way of helping, during economic downturns, is getting some of that money released into the economy, in a controlled manner.

Robin Hood had a similar philosophy to your's Ken, are you aiming for a similar role in history?

Robin Hood? Wasn't he the chap that suffered from Menintightus

[Onelife]

I was actually agreeing with you from a slightly different angle. I would say the state pension is technically tax free for everyone ... you are taxed on additional savings that take you above the tax threshold. And I also agree that raising the tax free allowance could help anyone on lower income.

Not 'pensioners' but the over 55's. It makes sense since many in that age bracket will own their own house/cars, many may own multiple houses renting them out and many/most will have significant funds in pensions and savings. I always thought that one way of helping, during economic downturns, is getting some of that money released into the economy, in a controlled manner.

Robin Hood had a similar philosophy to your's Ken, are you aiming for a similar role in history?

Robin Hood? Wasn't he the chap that suffered from Menintightus

Excellent diagnosis Ken

[Kendhni]

That has to be a concern for Truss ... no confidence letters from her own party already being lodged.

[towny44]

I see in the news that Rachel Reeves seems to have discovered a magic nursing staff tree!

[Gill W]

I’m not surprised, Ken, her performance has been astonishing. Her government has managed to make a bad situation 10 times worse in three weeks, and two of those weeks were when politics was shut down due to mourning for the Queen.

I remember when Chancellors used words like ‘prudent’, but Kwarteng has openly admitted to gambling with our money.

But have to wonder if this is deliberate, to enable their hedge fund cronies to make a fortune on shorting the pound .

[barney]

I’m not surprised, Ken, her performance has been astonishing. Her government has managed to make a bad situation 10 times worse in three weeks, and two of those weeks were when politics was shut down due to mourning for the Queen.

I remember when Chancellors used words like ‘prudent’, but Kwarteng has openly admitted to gambling with our money.

But have to wonder if this is deliberate, to enable their hedge fund cronies to make a fortune on shorting the pound .

It’s the beginning of the end for the Tories for a few years.
Labour are well ahead in the polls and if they can’t win a general election with this bunch of clowns in charge, they never will.

[Kendhni]

I’m not surprised, Ken, her performance has been astonishing. Her government has managed to make a bad situation 10 times worse in three weeks, and two of those weeks were when politics was shut down due to mourning for the Queen.

I remember when Chancellors used words like ‘prudent’, but Kwarteng has openly admitted to gambling with our money.

But have to wonder if this is deliberate, to enable their hedge fund cronies to make a fortune on shorting the pound .

I am struggling to understand her logic at the minute, an import driven economy, suffering inflation and verging on the point of recession ... and imports have been made much more expensive ... on the plus side it makes UK exports cheaper, but history has shown that that does not give a significant boost to the economy (we are not a commodity based economy). Kwarteng then went on to make things worse by saying there are more cuts to come (not a bit of wonder the markets are jittery).

Two things that would concern me would be
- interest rates are going to climb (I feel sorry for anyone with a mortgage, but it might free up some housing for her rich friends to buy up)
- this has to lead to a period of austerity (and I am not talking about the pretend austerity-in-name-only of 10 years ago, I am talking of real austerity)

Interestingly there was also talk of 'fixing' the public sector pensions (but then again they have been talking about that for nearly 30 years now). It is anticipated that the current level of underfunding will become a huge drain on the economy within a decade or two.

She started her political journey as a Lib Dem ... maybe she still is and is sabotaging the tory party from within.

[Onelife]

I certainly will need a lot more convincing that the Labour party can delivery an alternative other than...” we’ll do this” until a few years later when we find…” they didn’t do that”.

This year’s party anthem of “God save the King” was a pitiful example of how desperate this party has stooped in attempting to woo voters.

No gamble comes without risk but playing it safe takes us nowhere.

[barney]

If you can’t woo voters, you can never get power therefore you can never implement your ideas.
The Tories have been useless for years but are an election winning machine.
Labour need to replicate this to win.
Not being Boris is not enough.
Do as the Tories do.
Announce policies that you have little intention of implementing.

[towny44]

If you can’t woo voters, you can never get power therefore you can never implement your ideas.
The Tories have been useless for years but are an election winning machine.
Labour need to replicate this to win.
Not being Boris is not enough.
Do as the Tories do.
Announce policies that you have little intention of implementing.

But it seems that Truss is doing exactly what she promised, but now the doubters are looking to the "markets" to claim she is doing the wrong thing.
I have lived long enough and through many financial crises, and the markets always seem to be predicting doom and gloom, which rarely happens.
If as many predict UK interest rates do begin to exceed US levels, then the pound will strengthen, however the doubters will jump on that claiming it will make our exports uncompetitive.
If perchance the economy does grow as it did under Maggie,, the doubters will have some other excuse to fall back on to claim it's due to some false accounting or smoke and mirrors
I suppose we have to let them have their little bit of pleasure, since it appears their glasses are always half empty.

[Gill W]

Truss promised to ‘deliver from day one’. She’s delivering for the wealthy - the rest of us not so much.

Edited to add.

Towny, you talk about doubters - does that mean you think Truss and Kwarteng are doing the right thing?

[david63]

I don't doubt that the markets will bounce back, they always do - the question is when? They have not been performing particularly well since the start of this year.

The economy will also bounce back - again it always does - but when?

In principle there is not a lot wrong with Truss's policy for the medium/long term apart from the excessive borrowing. The problem is that there does not appear to be any short term strategy to get the masses through the current crisis this winter. The 1p tax rate reduction does not kick in until April, so no help there and the reversal of NI will make little difference to those at the bottom of the pile.

[david63]

Truss promised to ‘deliver from day one’. She’s delivering for the wealthy - the rest of us not so much.

The cynic in me says that she did a deal with Tory Grandees - tax cuts for votes!

[Onelife]

I don’t entirely agree with John (Towny) about my tipping capabilities which is why I am prepared to place a small wager that should Liz Truss ride this out till after the next election then her gamble might just give us a nice return. If predictions are right and we do end up in a global recession the place to be “when things take a turn for the better” is where Businesses want to invest which is why I presume she and her chancellor are placing our bets in that direction?

David, here’s the short-term strategy you’ve been looking for… I shall be having an EW bet on “Roman Dragon” this week which runs at either Salisbury (Thursday) or Wolverhampton (Saturday) Please don’t tell John as I don’t want him coming back with “I told you so”

[Gill W]

The cynic in me says that she did a deal with Tory Grandees - tax cuts for votes!

That wouldn’t surprise me either - it’s been said throughout the summer that she’s under the control of the ERG