What did Labour actually promise? As far as I remember they promised not to use certain taxes. There are some that they would put up.
As has been discussed before higher taxes spent correctly improve life in general. Better infrastructure, better transport, generally happier people because life works better. The countries that are regularly named as the best places to live are taxed higher than the UK,
A lot of this £20 billion 'black hole' is a political choice. Money being spent on above inflation pay rises and on the green agenda
Yeah, this is fractally wrong.
Please explain.
Because the £20bn wasn't on 'above inflation pay rises and on the green agenda', it wasn't spent by the current government, and is largely the result of the previous government(s) promising more than they could deliver on tax cuts.
A lot of this £20 billion 'black hole' is a political choice. Money being spent on above inflation pay rises and on the green agenda
Yeah, this is fractally wrong.
Please explain.
Because the £20bn wasn't on 'above inflation pay rises and on the green agenda', it wasn't spent by the current government, and is largely the result of the previous government(s) promising more than they could deliver on tax cuts.
It's wrong on multiple conceivable scales.
Correct. Labour inherited this. Something needs to be done. I am just not sure they are going about it the right way.
Yes. I get the impression (and it is no more than that) that the New Regime is, as it were, feeling its way, whilst settling its feet under the table (apologies for the mixed metaphor).
IOW, they have some idea of what needs to be done (they've had a fair time - pre-election - to prepare), but perhaps are open to reviewing how it should be done. I'm OK with the idea that they were not entirely aware of the full extent of the tories' iniquities and shortcomings until taking office.
One rather draconian way of obtaining some extra £££ quite quickly would be to seize most of the assets of former tory grandees, leaving them just enough to get on with on a day-to-day basis (30p per day should be sufficient, according to a certain former tory MP).
A lot of this £20 billion 'black hole' is a political choice. Money being spent on above inflation pay rises and on the green agenda
Yeah, this is fractally wrong.
Please explain.
Because the £20bn wasn't on 'above inflation pay rises and on the green agenda', it wasn't spent by the current government, and is largely the result of the previous government(s) promising more than they could deliver on tax cuts.
It's wrong on multiple conceivable scales.
But if they inherited this £20 billion black hole how can they afford to spend an extra £20 billion?
AIUI, the Labour government inherited the previous governments spending and tax plans. Until such a time as an incoming government sets their own spending and tax plans, the system defaults to what was already in place. It was known that the last budget set out a combination of tax cuts and spending commitments that were not affordable, the precise details of which were not made public previously - and, the independent pay review recommendations were likewise kept behind the doors of Downing Street, though we could all guess that they would be for above inflation rises to step towards pay restoration because the costs of losing staff would be unaffordable.
What the Labour government are setting out is a set of changes to the existing spending plans, this saves money in some areas (Rwanda, for example) that are no longer policy, and spends money elsewhere (eg: on fair pay deals for NHS staff etc). Whether everything proposed meets the fiscal rules the government has decided to follow is something yet to be fully decided, part of that's going to depend on just how much is saved in (for example) agency staff costs if the vacancy levels in the permanent workforce are reduced, also part of it depends on how the economy responds and how that impacts tax incomes, and also how quickly some savings will kick in (eg: how quickly the asylum backlog can be cleared to cut the massive costs of housing asylum seekers).
So what you are saying is that she should have announced the pay deal and immediately put up taxes. I don’t think that is politically viable, though raising taxes maybe further down the line and I would have thought that any tax rise is likely to be either be regressive (everybody pays it, so it’s a smaller portion of your wealth the richer you are) or effectively means tested. So why is that better than means testing pension credit ?
An increase in the rate of tax is easy to do in a flat or progressive way. All increases in the rate of income tax are progressive, for example.
Means testing pension credit is bad for two reasons. First it's extra bureaucracy, which is both a barrier to claiming credit for pensioners, and a wasteful pointless cost. Second, means-tested benefits are typically withdrawn at a much faster rate than the rate of income tax, so what you get is an effective very large marginal tax rate, which is stupid.
The income tax bureaucracy needs to exist (unless you abandon income tax completely!), and changing the tax rates and thresholds makes no difference at all to the costs of administering the system.
But if they inherited this £20 billion black hole how can they afford to spend an extra £20 billion?
Firstly, these are if I remember correctly manifesto commitments.
Secondly, they are things that will cost a lot more if money isn't spent on them, in the way that saving money on not fixing the roof is a bad idea. (I think other things they're saying they don't have the money for fall into that category too but some things are better than nothing.)
AIUI, the Labour government inherited the previous governments spending and tax plans. Until such a time as an incoming government sets their own spending and tax plans, the system defaults to what was already in place. It was known that the last budget set out a combination of tax cuts and spending commitments that were not affordable, the precise details of which were not made public previously - and, the independent pay review recommendations were likewise kept behind the doors of Downing Street, though we could all guess that they would be for above inflation rises to step towards pay restoration because the costs of losing staff would be unaffordable.
What the Labour government are setting out is a set of changes to the existing spending plans, this saves money in some areas (Rwanda, for example) that are no longer policy, and spends money elsewhere (eg: on fair pay deals for NHS staff etc). Whether everything proposed meets the fiscal rules the government has decided to follow is something yet to be fully decided, part of that's going to depend on just how much is saved in (for example) agency staff costs if the vacancy levels in the permanent workforce are reduced, also part of it depends on how the economy responds and how that impacts tax incomes, and also how quickly some savings will kick in (eg: how quickly the asylum backlog can be cleared to cut the massive costs of housing asylum seekers).
I always vote Labour nationally. I joined the party to vote for Corbyn as leader. My head and heart don't talk to each other. My heart is screaming at my head over Labour's Israel-Gaza policy since October 23rd. 5th para. What to do?
I always vote Labour nationally. I joined the party to vote for Corbyn as leader. My head and heart don't talk to each other. My heart is screaming at my head over Labour's Israel-Gaza policy since October 23rd. 5th para. What to do?
I think that it is reasonable to not engage too much with Labour's position between 23/10/23 and 4/7/24. In opposition, there is no real world effect.
The right and fair question is to the now-government: What is your position? What are you going to do now?
Of course, what happens in the US election is likely to be much more significant for Israel/Palestine (and Lebanon/Iran etc. etc.)
I always vote Labour nationally. I joined the party to vote for Corbyn as leader. My head and heart don't talk to each other. My heart is screaming at my head over Labour's Israel-Gaza policy since October 23rd. 5th para. What to do?
I think that it is reasonable to not engage too much with Labour's position between 23/10/23 and 4/7/24. In opposition, there is no real world effect.
The right and fair question is to the now-government: What is your position? What are you going to do now?
Of course, what happens in the US election is likely to be much more significant for Israel/Palestine (and Lebanon/Iran etc. etc.)
I always vote Labour nationally. I joined the party to vote for Corbyn as leader. My head and heart don't talk to each other. My heart is screaming at my head over Labour's Israel-Gaza policy since October 23rd. 5th para. What to do?
I think that it is reasonable to not engage too much with Labour's position between 23/10/23 and 4/7/24. In opposition, there is no real world effect.
The right and fair question is to the now-government: What is your position? What are you going to do now?
Of course, what happens in the US election is likely to be much more significant for Israel/Palestine (and Lebanon/Iran etc. etc.)
Surely there is a real world effect in how such opposition positions influence ones vote to put them in power or not?
Up to a point. With the obvious exception of specific groups in the most recent election, the vast majority of British people do not vote on foreign policy.
Let me put it like this; Did anything Starmer said or did before 4th July have any effect on the actions of the State of Israel? Absolutely not. Did anything Starmer said or did on the subject of Israel/Palestine affect the last election? Nope. Not really. He may have picked up 1 or even 2 more seats.
I have some very strong feelings on these issues and some deep and (I hope) nuanced thoughts. However, if we put that aside, there is a genuine dilemma here for HM Government. It is the position of HMG that we will not supply weapons to foreign powers for oppressive purposes.* It is the position of HMG that we believe Israel has a right to defend itself and we will supply weapons for this purpose.
The State of Israel has existed with either an effective state of war or an actual state of war for its entire history since 1948. It depends for its security on its own citizenship and the weapons it can purchase from various nations, including the UK. There are certain weapons that it buys from the UK. It has a credible fear of invasion and/or existential threat for which it needs such weapons to defend itself.
All of that is true. Now imagine the situation if the UK government blocked arms exports. Firstly it would look really bad - there is a clear, specific political price to pay for being seen to not support Israel. It would mean that UK arms companies would lose the business with an economic cost to the UK. Probably quite small, but there could be job losses etc. Not to mention that many might feel it is immoral to deny Israel the weapons it needs to defend itself. Ultimately though, Israel would probably source the same or equivalent weapons elsewhere.
On the other hand, the State of Israel has an appalling human rights record in Palestine and there is a very good case to withhold arms sales if weapons are being used for this purpose.
When you sell someone a weapon, there is not always much you can do about how that someone chooses to use it. There is a genuine discussion to be had here which is easily lost in the massively inflamed passions the debate generates of both sides. For me, the biggest problem is that such inflamed passions are genuinely justified.
Anyway, The Secretary of State for Foreign and Commonwealth Affairs has visited Palestine. He called for an immediate ceasefire. He has said that UK policy is a Two State Solution and that the UK would consider recognising the Palestinian State even without the US and UN. All within the first couple of weeks of taking on that role.
Anyway, The Secretary of State for Foreign and Commonwealth Affairs has visited Palestine. He called for an immediate ceasefire. He has said that UK policy is a Two State Solution and that the UK would consider recognising the Palestinian State even without the US and UN. All within the first couple of weeks of taking on that role.
A two state solution would be good but it's not what Hamas want. We should not recognise Palestine untill Hamas says it wants a peaceful two state solution.
The problem with that position is what it leaves in place. If the state of Palestine is not recognised, this implies that Israel has the right to claim territories beyond its internationally recognised borders. Any other state would be accused of agression, or even state-sponsored terrorism, for annexing territory beyond its borders. Why is that not true of Israel.
Anyway, The Secretary of State for Foreign and Commonwealth Affairs has visited Palestine. He called for an immediate ceasefire. He has said that UK policy is a Two State Solution and that the UK would consider recognising the Palestinian State even without the US and UN. All within the first couple of weeks of taking on that role.
A two state solution would be good but it's not what Hamas want. We should not recognise Palestine untill Hamas says it wants a peaceful two state solution.
Benjamin Netanyahu does not want a peaceful two state solution either. Should we stop recognising the State of Israel?
I note that most of the international community do not recognise the right of Hamas to speak for the Palestinian people. Although Netanyahu's government has been acting to undermine the Palestinian Authority in favour of Hamas (in order not to recognise either) the Palestinian Authority remains the de jure body representing Palestinians.
Requiring that Hamas want a peaceful two-state solution before supporting one for Palestine but not recognising it as a having a legitimate right to speak for Palestine otherwise is very much moving the goalposts.
Last post was a month ago but I reckon that it's appropritate to remind people that they are allowed to comment on this government's performance so far.
Parliament voted today to take winter payments off the vast majority of OAPs Sir Keir claims that the saving of £1.5 billion is needed to stabalise the economy
They've already said they want 100% of the people who are eligible for it to claim it. If they even get near that figure then that would wipe out the savings they achieve by cutting it (as it's under claimed at the moment). Means testing would add further cost.
Make it universal, set tax rates appropriately and reclaim it via the tax system for those who are well off.
It's just macho hair-shirtism, and is the kind of thing Reeves has been literally signalling she'd like to implement for years.
It seems and feels odd, really, to have Labour imposing a massive cut in benefits and the Conservatives up in arms about it. It does not seem a very Labour thing to do. And yet I'm sure it was planned well in advance - if Labour had really been surprised by the state of the public finances, they surely should have and would have taken a good deal longer to decide what to do about it rather than announcing cuts in the first few weeks.
My guess (worth very little, admittedly) is an austerity "balance-the-books" mindset on the economy mixed with a strongly-held belief that the old have profited at the expense of the young over the past decades and therefore should be first in line for financial pain (hence the scrapping of the social-care cap too). I think John Harris's article here makes some sense.
The WFP was always something of a gimmick. Consolidating it into the state pension has a certain logic (perhaps make it ~25% bigger to account for it being taxable) then claw it back from wealthier pensioners by gradually merging some of NI into income tax. This would have the benefit of shifting tax away from earned to unearned income and from lower incomes to higher incomes (as NI kicks in lower than income tax and cuts out at a bizarrely low level).
The WFP was always something of a gimmick. Consolidating it into the state pension has a certain logic (perhaps make it ~25% bigger to account for it being taxable) then claw it back from wealthier pensioners by gradually merging some of NI into income tax. This would have the benefit of shifting tax away from earned to unearned income and from lower incomes to higher incomes (as NI kicks in lower than income tax and cuts out at a bizarrely low level).
But if that's the intention, why not say so, rather than sell it as a cut?
I'm already sick to death of Starmer and his tory Cosplay. If we wanted a Tory government we would have elected one. Head needs to come out of arse right now and Labour MPs need to remember which party they belong to.
The WFP was always something of a gimmick. Consolidating it into the state pension has a certain logic (perhaps make it ~25% bigger to account for it being taxable) then claw it back from wealthier pensioners by gradually merging some of NI into income tax. This would have the benefit of shifting tax away from earned to unearned income and from lower incomes to higher incomes (as NI kicks in lower than income tax and cuts out at a bizarrely low level).
But if that's the intention, why not say so, rather than sell it as a cut?
It's not (as far as I know) the intention. I was agreeing with Martin and expanding on what that might look like.
I thought you were implying that NICs would be a way of taxing the winter fuel payment. To my mind, we need to make our mind up as regards personal NICs. Either they are a different thing from income tax, in which case we need to define them properly and treat them accordingly. Otherwise they need to be amalgamated into income tax and the rates and bands amended accordingly. In particular,.the issue of taxing ultra high earners, especially those paid absurd bonuses, needs nailing down. Employer NICs need to stay, to recognise and fund the contribution of state services to the functioning of employers. Again, though, the upper earnings level needs to double or possibly quadruple. Or indeed be removed altogether.
Earlier this week, James O'Brien did a phone-in on the removal of the winter fuel payment from most pensioners.
He posited that it was a poor exchange rate for the government. The political cost of doing this was not worth it for the relatively small amount of money they are getting from it: ~£1.5Bn. Therefore either it's a political error (separate from any moral arguments) or it's part of a bigger strategy.
It's an interesting point.
Some facts
1. Some pensioners are very poor.
2. Heating homes is expensive
3. Every year, a number of pensioners die where a cold home is a contributing factor.
4. Therefore, providing extra money to pensioners to help them heat their homes is a logical and moral thing to do.
Some other facts
1. Many pensioners are very well off
2. In the last decade and a half, pensioners on average have done much better than all other groups.
3. In April pensions will rise by more than this cut.
To me, that makes a very good case for removing the winter fuel payment from those who don't need it. The actual question is how do we make sure that those who need help get it? And yes, in general I advocate making benefits universal and then taxing higher incomes more rather than means-testing. However, a consideration here is that sort of change is harder to do quickly.
As to the politics, I don't think we know yet. The budget will tell us much more. There are strong hints that Cspital Gains Tax will be the major target. Increasing tax on unearned income is a no-brainer to me from a moral, political and economic perspective. It will be telling to see how the winter fuel payment fits into all this (if indeed it does).
It's weird that people say that a Labour govt shouldn't be attacking the old. Where have they been for 50 years, or however many? Labour are not a left wing party. And Starmer and Reeves definitely not.
I'm protesting at the way that Labour relies on votes from the left mostly because a viable alternative is not available, and then treats them with utter contempt. Starmer is worse for this even than Blair,. which is saying a very great deal. But left wingers aren't real people and don't count. Fuck that.
It's weird that people say that a Labour govt shouldn't be attacking the old. Where have they been for 50 years, or however many? Labour are not a left wing party. And Starmer and Reeves definitely not.
Maybe. But it's definitely inaccurate to call this an attack on the old. 27% of pensioners are millionaires. I don't think they need an extra £300...
He posited that it was a poor exchange rate for the government. The political cost of doing this was not worth it for the relatively small amount of money they are getting from it: ~£1.5Bn. Therefore either it's a political error (separate from any moral arguments) or it's part of a bigger strategy.
That could be true, and it could also be a bad strategy. It's clear that Reeves has long been given to tough talk on benefits, and as the link to Hansard shows she has been committed to not just means testing in general and means testing this benefit in particular (a case of Treasury brain before even joining the Treasury). So it's equally possible the strategy is one of party management, and getting the new intake of MPs used to voting in this direction relatively early on in their parliamentary career.
To me, that makes a very good case for removing the winter fuel payment from those who don't need it. The actual question is how do we make sure that those who need help get it? And yes, in general I advocate making benefits universal and then taxing higher incomes more rather than means-testing. However, a consideration here is that sort of change is harder to do quickly.
One in three pensions entitled to Pension Credit - the qualifying benefit for WFP under the new legislation - currently don't receive it. That equates to around 800K additional claims that would need to be assessed in time for winter.
I'm ambivalent on specific payments of this kind, and it would be better - longer term - for people's needs to be matched by raising the floor on benefits generally, but the "pragmatic" approach to this would involve deferring implementation for a year and announcing changes as part of a unified budget in October (given the sums concerned are relatively small).
There's no 'strategic' or 'pragmatic' reason that involves announcing this particular change early (apart from my earlier point about party management).
It's weird that people say that a Labour govt shouldn't be attacking the old. Where have they been for 50 years, or however many? Labour are not a left wing party. And Starmer and Reeves definitely not.
Maybe. But it's definitely inaccurate to call this an attack on the old. 27% of pensioners are millionaires. I don't think they need an extra £300...
How many of those millionaires are notional, merely because they bought a modest family home in London or the South East in the 70s/80s? By all means claw that wealth back through a reformed inheritance tax (i.e. one than catches the super rich too) but many of that 27% won't actually be cash rich and their only ways to realise their asset would be to downsize (not always an option) or pad the profits of one of those equity release firms.
It's weird that people say that a Labour govt shouldn't be attacking the old. Where have they been for 50 years, or however many? Labour are not a left wing party. And Starmer and Reeves definitely not.
Maybe. But it's definitely inaccurate to call this an attack on the old. 27% of pensioners are millionaires. I don't think they need an extra £300...
How many of those millionaires are notional, merely because they bought a modest family home in London or the South East in the 70s/80s?
It's a combination of that and the implied value of pension pots (significantly; defined benefits pensions at a point where interest rates are still relatively low):
I'm protesting at the way that Labour relies on votes from the left mostly because a viable alternative is not available, and then treats them with utter contempt. Starmer is worse for this even than Blair,. which is saying a very great deal. But left wingers aren't real people and don't count. Fuck that.
That's what Labour have always done. I remember good old 'Arold, who attacked the seaman's strike in 1966.
If this is about party management, it would appear to be quite bad party management as it has resulted in around 50 Labour MPs failing to vote with the government only 2 months after a thumping election win. Surely you want your new MPs to be happy about voting with you, at least for a little bit!
Comments
As has been discussed before higher taxes spent correctly improve life in general. Better infrastructure, better transport, generally happier people because life works better. The countries that are regularly named as the best places to live are taxed higher than the UK,
Because the £20bn wasn't on 'above inflation pay rises and on the green agenda', it wasn't spent by the current government, and is largely the result of the previous government(s) promising more than they could deliver on tax cuts.
It's wrong on multiple conceivable scales.
Correct. Labour inherited this. Something needs to be done. I am just not sure they are going about it the right way.
IOW, they have some idea of what needs to be done (they've had a fair time - pre-election - to prepare), but perhaps are open to reviewing how it should be done. I'm OK with the idea that they were not entirely aware of the full extent of the tories' iniquities and shortcomings until taking office.
One rather draconian way of obtaining some extra £££ quite quickly would be to seize most of the assets of former tory grandees, leaving them just enough to get on with on a day-to-day basis (30p per day should be sufficient, according to a certain former tory MP).
But if they inherited this £20 billion black hole how can they afford to spend an extra £20 billion?
What the Labour government are setting out is a set of changes to the existing spending plans, this saves money in some areas (Rwanda, for example) that are no longer policy, and spends money elsewhere (eg: on fair pay deals for NHS staff etc). Whether everything proposed meets the fiscal rules the government has decided to follow is something yet to be fully decided, part of that's going to depend on just how much is saved in (for example) agency staff costs if the vacancy levels in the permanent workforce are reduced, also part of it depends on how the economy responds and how that impacts tax incomes, and also how quickly some savings will kick in (eg: how quickly the asylum backlog can be cleared to cut the massive costs of housing asylum seekers).
An increase in the rate of tax is easy to do in a flat or progressive way. All increases in the rate of income tax are progressive, for example.
Means testing pension credit is bad for two reasons. First it's extra bureaucracy, which is both a barrier to claiming credit for pensioners, and a wasteful pointless cost. Second, means-tested benefits are typically withdrawn at a much faster rate than the rate of income tax, so what you get is an effective very large marginal tax rate, which is stupid.
The income tax bureaucracy needs to exist (unless you abandon income tax completely!), and changing the tax rates and thresholds makes no difference at all to the costs of administering the system.
Secondly, they are things that will cost a lot more if money isn't spent on them, in the way that saving money on not fixing the roof is a bad idea. (I think other things they're saying they don't have the money for fall into that category too but some things are better than nothing.)
I think that it is reasonable to not engage too much with Labour's position between 23/10/23 and 4/7/24. In opposition, there is no real world effect.
The right and fair question is to the now-government: What is your position? What are you going to do now?
Of course, what happens in the US election is likely to be much more significant for Israel/Palestine (and Lebanon/Iran etc. etc.)
AFZ
Thanks @alienfromzog.
Surely there is a real world effect in how such opposition positions influence ones vote to put them in power or not?
Up to a point. With the obvious exception of specific groups in the most recent election, the vast majority of British people do not vote on foreign policy.
I have some very strong feelings on these issues and some deep and (I hope) nuanced thoughts. However, if we put that aside, there is a genuine dilemma here for HM Government. It is the position of HMG that we will not supply weapons to foreign powers for oppressive purposes.* It is the position of HMG that we believe Israel has a right to defend itself and we will supply weapons for this purpose.
The State of Israel has existed with either an effective state of war or an actual state of war for its entire history since 1948. It depends for its security on its own citizenship and the weapons it can purchase from various nations, including the UK. There are certain weapons that it buys from the UK. It has a credible fear of invasion and/or existential threat for which it needs such weapons to defend itself.
All of that is true. Now imagine the situation if the UK government blocked arms exports. Firstly it would look really bad - there is a clear, specific political price to pay for being seen to not support Israel. It would mean that UK arms companies would lose the business with an economic cost to the UK. Probably quite small, but there could be job losses etc. Not to mention that many might feel it is immoral to deny Israel the weapons it needs to defend itself. Ultimately though, Israel would probably source the same or equivalent weapons elsewhere.
On the other hand, the State of Israel has an appalling human rights record in Palestine and there is a very good case to withhold arms sales if weapons are being used for this purpose.
When you sell someone a weapon, there is not always much you can do about how that someone chooses to use it. There is a genuine discussion to be had here which is easily lost in the massively inflamed passions the debate generates of both sides. For me, the biggest problem is that such inflamed passions are genuinely justified.
Anyway, The Secretary of State for Foreign and Commonwealth Affairs has visited Palestine. He called for an immediate ceasefire. He has said that UK policy is a Two State Solution and that the UK would consider recognising the Palestinian State even without the US and UN. All within the first couple of weeks of taking on that role.
https://www.gov.uk/government/news/foreign-secretary-calls-for-immediate-ceasefire-in-gaza-on-first-visit-to-the-middle-east
I think they're doing ok so far...
AFZ
*Obviously I am aware that our track-record at living up to this ideal is patchy at best.
(ETA spoiler-texted Epiphanies content, DT)
(ETA spoiler-texted Epiphanies content, DT)
(ETA spoiler-texted Epiphanies content, DT)
Benjamin Netanyahu does not want a peaceful two state solution either. Should we stop recognising the State of Israel?
(ETA spoiler-texted Epiphanies content, DT)
Requiring that Hamas want a peaceful two-state solution before supporting one for Palestine but not recognising it as a having a legitimate right to speak for Palestine otherwise is very much moving the goalposts.
(ETA spoiler-texted Epiphanies content, DT)
Doublethink, Admin
Fair enough.
It occurs to me that I may have created a problem with this thread. Inevitably perhaps as we keep touching on important issues.
I hope it's still valuable for reflections on how the government is doing.
The Police will always deal differently with protests where there is no disorder and protests where there is disorder and they are attacked.
My advice to officers was to never 'bite off more than you can chew" and the modern day Police appear to do the same.
The change of government hasn't changed anything in respect of Policing. I think that Sir Keir is doing OK.
I expected nothing less from Musk
Yes. It's pretty clear that the police of his youth are the gold standard as far as he is concerned.
Yes, and the general opinion seems to be that, as regards the rioting, the Police have been doing OK as well.
Indeed.
Parliament voted today to take winter payments off the vast majority of OAPs Sir Keir claims that the saving of £1.5 billion is needed to stabalise the economy
They've already said they want 100% of the people who are eligible for it to claim it. If they even get near that figure then that would wipe out the savings they achieve by cutting it (as it's under claimed at the moment). Means testing would add further cost.
Make it universal, set tax rates appropriately and reclaim it via the tax system for those who are well off.
It's just macho hair-shirtism, and is the kind of thing Reeves has been literally signalling she'd like to implement for years.
https://hansard.parliament.uk/Commons/2014-03-25/debates/14032565000008/AmendmentOfTheLaw#contribution-14032568000044
My guess (worth very little, admittedly) is an austerity "balance-the-books" mindset on the economy mixed with a strongly-held belief that the old have profited at the expense of the young over the past decades and therefore should be first in line for financial pain (hence the scrapping of the social-care cap too). I think John Harris's article here makes some sense.
I agree. The easiest way would be to take it off those paying 40% tax
& @Telford. What's wrong with that @chrisstiles?
Wouldn't abolishing it and increasing the pension and therefore working pensioners' taxation be fair?
But if that's the intention, why not say so, rather than sell it as a cut?
It's not (as far as I know) the intention. I was agreeing with Martin and expanding on what that might look like.
That's part of why I want to see a shift away from NI to income tax.
Earlier this week, James O'Brien did a phone-in on the removal of the winter fuel payment from most pensioners.
He posited that it was a poor exchange rate for the government. The political cost of doing this was not worth it for the relatively small amount of money they are getting from it: ~£1.5Bn. Therefore either it's a political error (separate from any moral arguments) or it's part of a bigger strategy.
It's an interesting point.
Some facts
1. Some pensioners are very poor.
2. Heating homes is expensive
3. Every year, a number of pensioners die where a cold home is a contributing factor.
4. Therefore, providing extra money to pensioners to help them heat their homes is a logical and moral thing to do.
Some other facts
1. Many pensioners are very well off
2. In the last decade and a half, pensioners on average have done much better than all other groups.
3. In April pensions will rise by more than this cut.
To me, that makes a very good case for removing the winter fuel payment from those who don't need it. The actual question is how do we make sure that those who need help get it? And yes, in general I advocate making benefits universal and then taxing higher incomes more rather than means-testing. However, a consideration here is that sort of change is harder to do quickly.
As to the politics, I don't think we know yet. The budget will tell us much more. There are strong hints that Cspital Gains Tax will be the major target. Increasing tax on unearned income is a no-brainer to me from a moral, political and economic perspective. It will be telling to see how the winter fuel payment fits into all this (if indeed it does).
AFZ
Maybe. But it's definitely inaccurate to call this an attack on the old. 27% of pensioners are millionaires. I don't think they need an extra £300...
That could be true, and it could also be a bad strategy. It's clear that Reeves has long been given to tough talk on benefits, and as the link to Hansard shows she has been committed to not just means testing in general and means testing this benefit in particular (a case of Treasury brain before even joining the Treasury). So it's equally possible the strategy is one of party management, and getting the new intake of MPs used to voting in this direction relatively early on in their parliamentary career.
One in three pensions entitled to Pension Credit - the qualifying benefit for WFP under the new legislation - currently don't receive it. That equates to around 800K additional claims that would need to be assessed in time for winter.
I'm ambivalent on specific payments of this kind, and it would be better - longer term - for people's needs to be matched by raising the floor on benefits generally, but the "pragmatic" approach to this would involve deferring implementation for a year and announcing changes as part of a unified budget in October (given the sums concerned are relatively small).
There's no 'strategic' or 'pragmatic' reason that involves announcing this particular change early (apart from my earlier point about party management).
How many of those millionaires are notional, merely because they bought a modest family home in London or the South East in the 70s/80s? By all means claw that wealth back through a reformed inheritance tax (i.e. one than catches the super rich too) but many of that 27% won't actually be cash rich and their only ways to realise their asset would be to downsize (not always an option) or pad the profits of one of those equity release firms.
It's a combination of that and the implied value of pension pots (significantly; defined benefits pensions at a point where interest rates are still relatively low):
https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/totalwealthingreatbritain/april2016tomarch2018
And yes, by all means raise inheritance tax, and apply progressive taxation across society, to pay for benefits for the less fortunate.
That's what Labour have always done. I remember good old 'Arold, who attacked the seaman's strike in 1966.