Emergency Budget predictions..

Personally I'd like to see anybody on minimum wage* only paying NI, but that's just a pipe dream I think.

*working a 40 hours week this is about £20k.

Anything announced will benefit the wealthy more than the poor.
Future generations will bear the burden of the cost while the pensioners get the benefit.
The sums won't add up and we'll have the financial press ripping it apart.
Labour will criticise it for not doing enough fast enough but not give any ideas of their own as the Tories will only nick them.

Basically the same as any Tory budget.

Magic money tree will get a trouncing.

Interesting that you start with corp tax - but you're self employed.
Tax cuts.
Growth.
High tech economy.
High paying jobs in a highly skilled economy.
Lots of words but no substance.
Pensions triple lock untouched.
Unicorns for all.

Shaking the magic money tree to mortgage us all up to the hilt for generations to come to give tax cuts to those who need it the least

Yet more inevitable austerity and massive cuts to public services because… we’ll just because that’s what they do

The economics of the ****ing madhouse

Then lots or deregulation, followed by more deregulation. Is there anything left to privatise?

Shaking the magic money tree to mortgage us all up to the hilt for generations to come to give tax cuts to those who need it the least

Absolute drivel, and no understanding of how any of this government financing works. Let's remind ourselves Theresa may coined the phrase 'magic money tree' with Thatcher starting the idea in people's heads misleading us over government spending.

Just because you keep repeating does not make it true.

The government debt is a net record of all the money spent into the economy.

When you talk like this you are supporting austerity because that's what drawing down the national debt is.

It's removal of money from circulation, removal of money people use, spend and save every day.

It staggers me you put so much emphasis on never believing the government over anything and then you take the establishment classical Tory view over government spending. (Perpetuated by the Tories when it suits them.)

There's approximately 2.4 trillion of government 'debt' (not a debt) of which 40% is owned by the BoE and approximately 46 Billion has ever been paid back (surpluses rarely happen - maybe 6 in your lifetime.)

It does not form a debt the country pays back. To do so would as explained become an austerity measures.

I'm staggered someone of the left would take this ridiculous viewpoint. But then again so does Rachel Reeves, so there you go.

Now what the Tories choose to spend money on is definitely a debate.

But we don't get saddled with debt. The government is a currency issuer. It can't really owe itself.

Right, early morning shoot - so when you wake up to that - take it on board because you can check all of my information.

The Tories are likely to lower inflation in the short-term with the energy subsidy. I will give them that. I mean we were all going to pay massive bills to the energy company with our own money anyway. Now it's just government money (probably backed with Q/E and not borrowing. But that's a guess.)

Only thing I dare predict is Vat reduction. Possibly.

Interest rates really shouldn't rise and the Fed started this reckless game causing the BoE to play catch-up and making money more expensive.

Guess who that harms?

I reckon inflation would sort itself out to a degree next year anyway. So macro-economic conditions remain poor for the time-being and that will dictate the Tory rule book - who are aiming for growth.

They think that can be done by Tax cuts. Seriously doubt that. And if they keep corp tax low they've sneakily lifted dividend tax etc anyway. So they're not a low tax government.

There has to be another public bung and I reckon a Vat trim - Brown did it so there's a precedent. And it's just about palatable to them.

Hope they extend the £400 energy bung longer than six months too.

Beyond that - no idea. But we need some cuts and big investment somewhere.

Also there's the murmors of them sorting the BoE out. That would suprise me. The BoE are hopeless and the natural rate of interest should be zero anyway. As Bond issuance is there to control interest rates.

Is there anything left to privatise?

Mp's snd house of commons? They seem to be invincible to any sort of modernisation and efficiency policy

Then lots or deregulation, followed by more deregulation. Is there anything left to privatise?

The NHS, the social care system, what's left of the education system, the Highways dept, etc. They're chipping away at all of these constantly but the big prize is definitely the NHS. Every part of it is slowly being eroded from the back, bringing in outside companies to do what used to be done in-house under the guise of efficiency and then suddenly everything is being done by the likes of Sodexho, Serco etc bar the core stuff and then it's only a small jump to privatising it all in all-but-name. Part of me is scare that they were secretly hoping the whole thing would buckle under the pandemic, perfect time to 'modernise' it all and carve it all up. Big giant payday for the enablers and the country is left to go to ruin.

@rone

But we don’t get saddled with debt. The government is a currency issuer. It can’t really owe itself.

Perhaps you can explain further. If your pension fund has bought a government bond, have they done that purely out of the goodness of their heart? No, just like investment funds and banks, they expect to see a return on their loan. I presume BoE also earns interest on government loans
as well.

Just issuing more currency...doesn't that just devalue the currency?

I think it can be basically summarised as “buy now pay later”.

Magic money tree will get a trouncing.

Plus, whatever the detail is, Frau has already made it clear she believes that making the rich wealthier will trickle down.

So this means a tilt towards middle and high earners (over £50k).
It means less tax and bureaucracy for companies.
It means rolling back the tax increases of her predecessor.
Permanent removal of green tariff /subsidies on energy.
Removal of electric car grants.

As a token gesture, family allowance will go up a £4 - but working hours regulations are removed.

I don't think that announcement of privatisation of the NHS, social services, education, etc, is in the remit of the Chancellor of the Exchequer, I would expect those announcements to be made by the PM/departmental secretaries of state.

This won't technically be a budget btw as that would require the OBR to give its projected forecasts, and as far as I am aware the Tory false mantra of "balanced budgets" will definitely be going out of the window.

Instead it is called a "fiscal event" which I have to confess sounds rather more exciting to me, although unfortunately it reminds me that according the Russian government pouring your troops into a neighbouring country isn't an invasion but a "special military operation".

My only prediction for the fiscal event is that it will reflect the priorities of a government of the rich, by the rich, for the rich, without any of the pretences of Boris Johnson.

I also predict that the Opposition will offer no credible counter proposals, only uninspiring mealy-mouthed platitudes.

Frank i am not self employed, i am an employee of a Limited Company that employs eight people.

I am happy to pay more Corp Tax, however as i have explained before the overall tax burden (Corp PAYE NI Vat Dividends) on a small UK based business is significantly higher as a percentage than the Amazons, Boots of this world.

If we had a flat/fair taxation process it would fix a lot of problems.

Tory donors will come out on top.Needs of the general population will come out bottom.

Absolute drivel, and no understanding of how any of this government financing works

It does not form a debt the country pays back. To do so would as explained become an austerity measures

Hmmm. So how it it that central government owed £19.4bn in interest payments alone in June 2022?
I've got it! It's ‘debt’ (not a debt)

@rone, I hear your stance on this across many threads. but you are yet to explain a few basics when asked in the other threads. Things like:
- why doesn't every Government just issue billions and billions in bonds and QE?
- why is it repaid & loan interest payable, if it is not a 'loan'?
- what are the downsides?

I like your optimism. Personally I think they’ll just kill off another royal so they can kick the can down the road for another fortnight.

Re introduction of slavery
Income tax cut of 10% for every orangery on your mansion
An oligarch allowance so you can launder tax free
Reintroduction of the farthing so you can drop one in a beggars cup and call yourself a philanthropist

I quite like the idea of government debt not being debt.
Then they could just borrow all the money they want, pay for top-quality everything and abolish taxes and still not have a debt

Something that pushes the inevitable crash further down the road making it worse but give Liz just enough time to get out.

I understand the logic that Government issuing money isn't a debt - but surely external debt, borrowing from foreign sources, is a bad thing?

I understand the logic that Government issuing money isn’t a debt – but surely external debt, borrowing from foreign sources, is a bad thing?

I think the nuances Rone misses in his posts are that:
1) While you can issue new money to cover debts (i.e. buy them back from the market), that does pose inflationary pressure. The key thing is to do this at a rate that the country can stomach by being more productive. So if unemployment is high, you can 'borrow' money for infrastructure projects that employ people because they're being productive when they otherwise wouldn't be as the "free market" doesn't need them. If they were unemployed then you would (without any external factors) get deflation as people wouldn't be able to pay as much for goods.
2) The flipside of 1, is you can't borrow money when the economy is doing well. You would just drive up the value of materials labor and thus inflation. Doesn't matter if that's civil engineers, teachers or nurses, you don't want to compete with the free market. But as things are going well you can afford to tax people which puts deflationary pressure on the economy to balance the inflation caused by everyone having more money.

3)Therefore there's a balance to be struck between
* the interest rates the BoE sets for the bonds it holds (higher interest = lower inflation)
* the amount it holds Vs the amount on the market (higher amounts in the BoE = higher inflation)
* Taxation (higher tax = lower inflation)
* Spending (higher spending = higher inflation)

And there is still interest on the debt, so the upwards inflation it posed at the time, leads to downwards pressure later on (ish, you could complicate that as if it's owned privately by investors really you're transferring tax from the people paying it to the people who own the debt, it's still in circulation).

It's still MMTHEORY though, a simplified way of explaining unexplainably complex interactions.

An economist is someone who sees something working in practice and wonders if it can made to work in theory

the bankers bonus thing is a headline grabber distraction...there was never a cap on total pay so that just went up instead.

from the signals being made, personally I'll probably be better off after this budget but what that means for the rest of the country I don't know.

I suspect corp tax will be lowered as it sounds good and probably doesn’t cost much given that big business moves profit round the world to its preferred tax haven to register the profits. The Chancellor will then be able to wax lyrically about growth and being the party of government.

There will be something for middle earners and maybe pensioners as a thank you for giving me the job and there is a GE not that far away.

It will be more about what doesn’t happen. There will be nothing to reduce the ability of the rich and big business to hide from HMRC. There will be nothing about raising minimum wage so full time workers dont still need benefit payments to survive.

Whatever she does national debt is going to carry on rising at an unsustainable rate pushing up interest payments for decades to come.

the bankers bonus thing is a headline grabber distraction…there was never a cap on total pay so that just went up instead.

Wasn't that the issue - that banks have complained that they have had to increase basic pay, with the inevitable extra cost to them, when they would much prefer performance related bonuses, Vs big bonuses encourages the sort of risk taking which was behind the 2008 financial crisis?

And I'm not sure what you mean by "headline grabber". Do you think limitless bonuses worth possibly £millions for bankers makes a great headline during a cost of living crises which is affecting millions of people, many not knowing how they will be heating their homes or feeding themselves?

And I’m not sure what you mean by “headline grabber”.

I mean the media focus will be on something that will make very little material difference to how much 'bankers' actually get paid but will make a good headline.

Then lots or deregulation, followed by more deregulation. Is there anything left to privatise?

The monarchy! The compulsory funding method is not fit for purpose in the 21st century. Not only that, it's biased! Though all crown-wearing nonces are likely to have biases, the monarchy's is likely to be more problematic and change public opinion, given its trusted reputation, the inability for customers to withdraw payment and the fact it provides 75% of all crown related action. It creates a rigged market in the crown-wearing nonce sector, undermining competition and stifling innovation.

They should charge £7.99 a month for it, and people who don't want to see Nicholas Witchell getting excited at the sight of little prince Louis in his cute little shirt don't have to pay.

Too little, too late is my guess

Progressive taxation on higher earners.
Inverted taper on super-normal profits for corporations.
Long-term investment in public transport and utilities.
Tax breaks for sustainable business activity.
Polluter-pays principle implemented on environmental harms.
Increase in VAT for luxury goods.

Wait, sorry. WRONG COUNTRY!