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Budget - 8 July 2015

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If it is another budget it is too soon as increasing frequency creates too much change and expectations.

Are they bringing forward the public spending review as thought the ccurrent was extended to 2015/16 ?

Edited by Ash4781

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.....a budget to help increase productivity.... How will they do that?

I think they would prefer people not to do things for themselves, they would prefer people to pay others to do it for them whilst they are doing things they may or may not like, or want to do for money.......every action is more productive if it generates an exchange of fiat...?

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Would it be that this is a Tory budget, to replace a Coalition budget?

Or just replacing a pre-election budget?

It could be quite hard to attribute any "interesting" changes reliably.

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Debt has to be paid back by future productivity for money to have any value. You might have a load of on-paper wealth stored up in assets, but if those assets are in a country that has weakening productivity AND is deeply in aggregate personal debt that is far out-pacing productivity, you can be sure at least one of two things will happen : 1) the currency your asset is in will weaken severely. 2) the value of your asset will drop.

A micrcosm of this is when a bank issues a £150,000 mortgage to a 30 year old. They do so trusting the 30 year old will be productive enough for the years ahead to repay the mortgage plus interest. If that 30 year old was to say "well, you know, I'm self-employed and to be honest with you, my client base are asking me slowly but surely to do less and less work, can't see that changing either" - well, that should be seen as a "sub-prime" loan if the lender still went ahead and lent out the loan. On an individual basis, it's productivity-per-capita that is the key statistic to look at. And with a larger pool of cheap labour in the UK, I see this weakening further.

The amount of piled-up personal debt in the UK means the nation HAS to be magically super-productive somehow over the next few decades, despite deficits that will bring further austerity, and stagnating wages because of a huge pool of cheap and available labour.

(sorry for the slight derail)

Edited by canbuywontbuy

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Taxy taxy

Slashy slashy

(not for bankers/oligarchs/rentiers obviously)

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Hmmm I think they are missing the story what they mean is we'll announce what spending cuts we need to make to pay the interest for the money already borrowed, whilst keeping expenditure the same.

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Debt has to be paid back by future productivity for money to have any value. You might have a load of on-paper wealth stored up in assets, but if those assets are in a country that has weakening productivity AND is deeply in aggregate personal debt that is far out-pacing productivity, you can be sure at least one of two things will happen : 1) the currency your asset is in will weaken severely. 2) the value of your asset will drop.

A micrcosm of this is when a bank issues a £150,000 mortgage to a 30 year old. They do so trusting the 30 year old will be productive enough for the years ahead to repay the mortgage plus interest. If that 30 year old was to say "well, you know, I'm self-employed and to be honest with you, my client base are asking me slowly but surely to do less and less work, can't see that changing either" - well, that should be seen as a "sub-prime" loan if the lender still went ahead and lent out the loan. On an individual basis, it's productivity-per-capita that is the key statistic to look at. And with a larger pool of cheap labour in the UK, I see this weakening further.

The amount of piled-up personal debt in the UK means the nation HAS to be magically super-productive somehow over the next few decades, despite deficits that will bring further austerity, and stagnating wages because of a huge pool of cheap and available labour.

(sorry for the slight derail)

Quite right. Debt is just future earnings brought forward.

the debtors loose a percentage of their future earnings to the money lender and the money lender gets to take things off you if you don't pay back.

Now that the government is tho main lender and they are taking a percentage of your future earnings, surely that is just a tax?

we've all been stitched up.

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The date of the budget is now official: https://www.gov.uk/government/news/chancellor-announces-summer-budget-date

Osborne writing in The Sun. via the BBC (my bold):

"We will protect the NHS and give it more funding each and every year, while making savings across Whitehall.

"We'll crack down hard on tax avoidance and aggressive tax planning by the rich - because everyone should pay their fair share.

"We will always protect the most vulnerable, but we also need a welfare system that's fair to the people who pay for it. If you can work you should be working, so we'll take the next steps in our benefit reforms to make sure that happens.

"Second, we've got to go on helping businesses create jobs in Britain, so we move towards full employment. That means facing a hard truth: in Britain we produce about a quarter less for every hour we work than countries like America or Germany. Fixing that long-running productivity weakness is the big challenge for the next five years.

"So in the Budget we'll spend less on welfare, and instead invest to create three million more apprenticeships, so that young people can learn a trade, get better jobs and earn more."

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Debt has to be paid back by future productivity for money to have any value. You might have a load of on-paper wealth stored up in assets, but if those assets are in a country that has weakening productivity AND is deeply in aggregate personal debt that is far out-pacing productivity, you can be sure at least one of two things will happen : 1) the currency your asset is in will weaken severely. 2) the value of your asset will drop.

A micrcosm of this is when a bank issues a £150,000 mortgage to a 30 year old. They do so trusting the 30 year old will be productive enough for the years ahead to repay the mortgage plus interest. If that 30 year old was to say "well, you know, I'm self-employed and to be honest with you, my client base are asking me slowly but surely to do less and less work, can't see that changing either" - well, that should be seen as a "sub-prime" loan if the lender still went ahead and lent out the loan. On an individual basis, it's productivity-per-capita that is the key statistic to look at. And with a larger pool of cheap labour in the UK, I see this weakening further.

The amount of piled-up personal debt in the UK means the nation HAS to be magically super-productive somehow over the next few decades, despite deficits that will bring further austerity, and stagnating wages because of a huge pool of cheap and available labour.

(sorry for the slight derail)

Yup. Jobs are going to be scarce and unreliable. Robots and technology are the future so that the rich can get even richer. There will be a huge generation impoverished, not by their own actions but by technology and the actions of previous generations;

http://uk.businessinsider.com/experts-predict-that-one-third-of-jobs-will-be-replaced-by-robots-2015-5

Edited by fru-gal

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That means facing a hard truth: in Britain we produce about a quarter less for every hour we work than countries like America or Germany. Fixing that long-running productivity weakness is the big challenge for the next five years.

Where's the demand coming from for this extra 25% productivity? Inflation isn't near zero for no reason at all - it's a lack of demand for things. It's easy to make more things, it's far harder to sell them and profit from them.

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Overall benefit cap?

This could be the part where private landlords don't recrive enough housing benefit to pay their mortgages.

Unfortunately, history tells us that people cut down on food before they stop paying their rent. So I expect food bank usage to soar and the left to get uppity.

Anyway, at least we won't have to wait long to find out.

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A July Budget was guaranteed whoever won the election.

The question of course is why did Osbourne not set out his plans in March. The answer is that some of the proposals were going to be vote losers amongst potential Tory supporters. The question is which particular group of people who were gulled into voting Conservative are going to find they have been conned come the end of July.

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Welfare spending on working-age households will continue to rise every year of this Parliament. It's an inevitable consequence of failing to get the cost of housing down.

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The question of course is why did Osbourne not set out his plans in March.

I've already given two good reasons for that. In purely alphabetical order:

  • It was a coalition budget.
  • It was a pre-election budget.
Edited by porca misèria

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They are getting it all in early...before they have a solid opposition and before their potentially wayward MPs have settled in fully.

Get the pain out of the way early, feel good factor booked for 4 years time.

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A July Budget was guaranteed whoever won the election.

The question of course is why did Osbourne not set out his plans in March. The answer is that some of the proposals were going to be vote losers amongst potential Tory supporters. The question is which particular group of people who were gulled into voting Conservative are going to find they have been conned come the end of July.

Another perspective is they didn't expect to implement them in full (explaining why they didn't detail them):

http://www.independent.co.uk/news/uk/politics/tories-must-now-come-clean-about-where-their-12bn-of-welfare-cuts-will-be-made-10251183.html

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They are getting it all in early...before they have a solid opposition and before their potentially wayward MPs have settled in fully.

Get the pain out of the way early, feel good factor booked for 4 years time.

"There's no money left. Cheers, George."

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My guess is it could be to announce major spending cuts. If they want to be re-elected in 2020 they will have to go in hard and fast with cuts now so that in 3-4 years time they can start pumping the economy again. Also for the next year or two any knock-on slow down in growth can be blamed on a sluggish EZ.

I suspect there might be some new taxes (or removals of tax breaks) as well if IT, NI and VAT are to be frozen.

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<p>I've already given two good reasons for that. In purely alphabetical order:

  • It was a coalition budget.
  • It was a pre-election budget.

Given that Cameron made an election pledge not to raise Income Tax, NI or VAT rates in this Parliament what exact changes does Osborne have to announce given that the current years tax allowances are already announced and next years are probably not going to be altered. The Budget is being trailed as an announcement of how Osbourne is proposing to cut spending but that is not the point of UK Budgets which are focussed on raising revenue ( I.e. taxation). Spending announcements are usually made in the Autumn statement then rubber stamped in the following budget. Given Government departments are already going to have allocated and at least partly spent their current year budget why bring the spending announcements forward to July when they almost certainly can not be implemented until April 2016. Either Osborne has some nasty tax surprises or this is simply political theatre around spending decisions that could have waited until later in the year

Edited by stormymonday_2011

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Have Tory voters learned nothing from the last 5 years? Osborne played exactly this game after the 2010 election too.

5 years ago he was going to be the tough, clear-eyed Chancellor who would take the difficult but necessary decisions which would put the country back on track. 5 years later the budget deficit is still about £100bn.

Wait, let me guess - it was all the Lib Dems' fault (despite the fact that Clegg and Danny Alexander were fully signed up to the deficit reduction plan).

Rinse and repeat.

Edited by Dorkins

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Osborne to deliver Budget on July 8: Key measures are likely to include new laws to prevent income tax, national insurance and VAT rises

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The Chancellor said he will make the changes laid out in the Conservative Party's manifesto, including spending cuts and reforms to taxes and pensions.

Interesting we have to hope that we don't need an IMF bailout, sorry we can't put up taxes it's against the law... Although why do you need a law to stop you from putting up taxes when you have power? A total nonsense law to fool dumb people. Still at least it sounds like you've achieved something and I expect at the next election the Tories will claim we promised a law on not putting taxes up and we delivered on that promise....

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Well if they are going to eradicate the deficit by 2020, its either growth, cuts or more taxes.

The tax option is out...apparently...and the economies of our main trading partners are shrinking, possibly to take a new downturn very soon...so that leaves cuts.

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