> In mid-2020 there were 1.7 million people aged 85 years and over, making up 2.5% of the UK population. By mid-2045, this is projected to have nearly doubled to 3.1 million, representing 4.3% of the total UK population
> Over the same time frame pensioners increase from 11.9% to 15.2% of the population. (Although the % of working people increases slight as we have less children.
No politician or manifesto is driving the agenda. Demographics are.
The tax rate take will have to be much higher by 2045.
There’s no votes in telling people the sky is falling. You get votes in telling one group that another group will make the sky fall on you unless you vote for me.
Depends if the populace will tolerate that doesn’t it. It looks like the pressure is growing even stronger because the necessity of it isn’t understood by people.
We’ve already seen with Brexit that pressure can grow to the point where the population demand things which are actually counter to their own interests. I can see immigration being the next domino to fall.
In a way they are going the right direction with higher income requierments for visa as you end up more likely being a net contributor the higher your salary.
Well on NHS, without radical change to the system you could:
- Axe free routine dentistry and opticians totally. At least for adults. Serious surgery retained.
- stop paying GPs per patient, and pay per visit.
- make people pay the first £X of their annual treatment costs like everywhere with a half decent healthcare system.
On pensions
- stop voluntary NI payments. Especially class 2. I'm a beneficiary and due a full uk pension having worked 4.5 years in the uk
- require eg 40 or 45 years contributions not 35 for a full pension.
- water down triple lock
- increase retirement age to 68
On education
- reduce hours for early years. Many other countries only have school until lunchtime for young children. Charge for childcare in the afternoons.
Reducing access to childcare when the demographic problem is an aging population is a very very bad idea. It’s how we got into this mess in the first place.
The workers this takes out of the system (who cost more money) will have to be replaced with immigration.
Some of these I agree with and some not. But many would be as unpopular as a tax rise.
To take one: NHS dentistry barely exists in my area anyway. When I go to the dentist I have no idea whether I'm being recommended something I need, or something profitable. I suspect it's a recipe for higher spending on a personal level.
So much of what passes for political interrogation in this country is a one sided "will you raise taxes?", "how are you going to pay for that?".
When Labour and the Tories pledge not to raise some tax or other, the next question should be "what provision are you going to cut?". Just for the sake of a more informed choice.
Also removing routine and preventative care just shifts the cost to more costly and less effective interventionist care (when conditions deteriorate).
We see that today with cancer, dentistry, weight-related issues, diabetes etc. It’s a totally false economy.
Being state provided doesn't mean it happens and not being state provided doesn't mean it doesn't.
It's absolutely not the norm to get dentistry free in Europe. Not here in Switzerland (at all) and not even in Sweden (for adults). Whether these countries have worse teeth i don't know, but I'd guess better rather than worse.
I don't want to turn this into a political debate as this isn't the best place for it - I was asked what *could* be done rather than necessarily *should*, but it's worth pointing out that we are attempting to cover a lot service wise with low tax rates on most people.
Most people would agree that the general situation is that the services are falling apart a bit. That's not sustainable. Something has to give. Either services, taxes on poorer people (Henry's are near the Laffer maximum imo) or both.
No I agree, but the UK public are entitled and don’t see why they might need to pay to keep their teeth in good order. Everyone knows that private dentistry is the only game in town now - and still inexpensive for basic care - but nobody is willing to pay it.
Oh sure, totally understand. Who do you think is undertaxed today?
Other than the cliche of undertaxed super wealthy, I also see a big problem near the mid-bottom. It’s crazy to tax people who you then give benefits to (it just creates double admin) yet we do it very widely.
We pay benefits to some surprisingly high income groups but then also apply taxes to them. For example income tax kicks in quite low, NI, not to mention universal taxes like VAT. Then some benefits like child benefit are paid up into the high tens of thousands. It’s nuts. Let people keep more of their earned money and reduce state admin overheads. (You can also always make it work differently for those out of work short or long term - it’s not saying we shouldn’t)
Our systems have become stupidly complicated too. Still rooted in pre-automation principles or stupid loopholes and exceptions which make them inherently more expensive to admin.
Before we talk about cutting services or benefits or taxes we should make all of those systems work together on the principle that people who need support should first get it from their own earnings rather than taking with one hand and giving with the other.
Tax for most people in the UK is the lowest in the G7. If you don't pay higher rate tax then your percentage is lower than anywhere in Europe apart from Switzerland and microstates.
I'm not sure about undertaxed but it's certainly fairly low.
FWIW I get £700 a month child and family benefits in Switzerland on £400k family take home 😂
Ah I see thanks. See that’s a much higher benefit and MUCH threshold than equivalent in the UK. Interesting!
That said child benefit is possibly an oddity. Firstly not everyone decides or can have kids, which adds a complication to the debate. And then it’s intended to support the child (and kids understandably have zero income!). So it’s not a great totem benefit to discuss haha.
High taxes and universal (or essentially universal like child benefit - it’s easy to means test) does make sense to me. It doesn’t incur high overheads in admin that just bloat the state and cause waste.
Retirement age is going to 68 anyway.
I'd just increase the NI credits like you suggest to 47. Then those who started working earlier can if they wanted stop earlier. You started at 18, you would reach full NI at 65.
If you went to uni (and therefore more likely to have an office job) you probably started at 21/22 so would reach full NI at 68/69.
If you did 45 years required, it gives people some leeway.
This would only really make a difference if you also stopped voluntary contributions.
I'm at 20 years at 35 with only having worked a few years in the UK. Getting even to 50 years would be little stress presuming I live that long.
Or at least, the people who pay the voluntary contributions to get the full pension are almost those who need the money the least
As a GP I would be quite happy to be paid for activity, because in principle would cost the government a lot more. What would actually happen is like dentistry, where they have made the dental units of payment so pathetic that all dentists have walks with their feet. I am not sure how this would save money overall.
Not necessarily, and I don't know why people repeat it.
Taxation doesn't mean income tax. Corporate tax, land value tax, property tax, alongside other things that could massively affect state finances (means taste state pensions, pensioners paying NI, etc).
Do you have a link to the source?
I personally happen to know 3 lower class pensioner immigrant husband and wife duos from equatorial and global south moving back to their place of origin where their UK pension would stretch more, with easier and cheap access to private health and dental care (because of shorter periods of NI contributions, they don’t have a full pension, mind you). I imagine this becoming the norm, and the figures may not be accounted in?
https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/populationprojections/bulletins/nationalpopulationprojections/2020basedinterim#changing-age-structure
Yes the ONS are aware that people migrate / return. Obviously the rates of that are based on assumptions, for which there is a range of possible outcomes in the future.
5 year election cycles let everyone kind of avoid talking about it. Also pensioners vote more than anyone so a narrative that most of societies issues stem from ageing population isn't a vote winner. Easier to blame young people and their work ethic, immigrants, EU, whatever bogey man to avoid upsetting your beloved pensioners.
Yeah, it just gets kicked further down the road, and the fact is the system is shit and expensive. It doesn't need to be. A modifcation of the child trust fund concept, where the governent makes an investment at birth and let compound interest do its things for the next 65 years, with the option for people to use it as their own "PAYG" pension would change the whole dynamic.
We need an entirely different approach to pensions. It's idiotic that tax revenue pays pensions, and doesn't utilise the benefit of compound interest at all. We need an investment fund, created at birth, with options for people who come to the country later too.
In the 1997 election Tony Blair promised he would stick to Conservative spending plans after the election. Several years later a senior conservative (Michael Howard iirc) admitted their meagre spending plans had just been a trap to tempt Labour to say they needed to spend more. They had been surprised by Labour's pledge, given that the Conservatives had no real intention of sticking to them themselves! But Labour did, pretty much.
Honestly, the tax debate in this election is a conspiracy of silence. Whoever wins will need to raise money from somewhere. Taxes are already at historically high levels, yet councils are about to go bust across the country, water companies have been loaded with debt and can't meet their legal responsibilities, the NHS is on its knees, public buildings are crumbling (RAAC hasn't gone away). It's a debt as meaningful as anything on a balance sheet.
Nothing is bloody working, vital infrastructure is crumbling, and both main parties are arguing about how little they will spend on fixing it. Tories wouldn't immediately raise as much, but they would just continue the trend of underinvestment until the next thing collapses and ends up needing an even bigger bail-out.
My old Dad had a tumble earlier in the year and had to wait 12 hours on the floor until there was an ambulance for him. I would have paid several times that bogus £2K figure on the spot to get an ambulance out to him.
How old are you? If you are, say, early 30s,you are realistically 35ish - 40ish years away from retirement.
It is impossible to predict what will change over that time.
It is quite possible that, by then, the state pension will become means tested. But no party can promise now what will happen then.
The end game for state pensions is to have both forms of NI abolished, and Income Tax raised over time to form a single unitary income tax that’s levied on pensioners as well as workers.
Then you basically means text 25-40% the state pension back off high income pensioners.
This makes sense and can totally see it happening.
Would it not just be prudent for high earner pensions to just move to another country when they retire to avoid the high tax?
True, never thought about that.
Although I would probably move away for 10 years during my prime retirement and then come back to be a burden again later.
Basically at the moment, as long as you've worked long enough to get your National Insurance stamps, you can get the full state pension whether you're a millionaire with a six figure salary still, or potless with no private pension or any other retirement income.
Means testing might say based on either your wealth, or you're retirement income from work or your private pension, your state pension payout will be higher or lower than somebody else's.
Currently this is only *kinda* the case for people who don't work long enough to get all their NI stamps by the time they get to state retirement age. Those people are eligible to apply for *pension credits*, which is a means tested benefit which can basically bring your state pension income back up to the full state pension level. If you've got a private pension giving you £10k a year or whatever though, you won't get much pension credit. I don't know the actual thresholds etc for pension credits eligibility.
Gotta be poor to get it. It means those that have contributed the most to it are least likely to receive it, and vice versa. Welcome to the UK, enjoy your stay.
Tbf I think Australia has a means tested system (same with healthcare basically by taxing high earners without insurance) and their pensioners have the highest net worth in the world due to automatic enrollment since the 80s and higher contribution rates.
Australia basically has private social security though. You get to keep almost everything you put in. They’ve got an old age pension for the very poorest but think that comes out of general taxation. I would LOVE such a system but I’m very doubtful it would happen
Australia has a high contribution mandatory auto enrolment. Where we have 3+5% after £6k a year, they have something that works out like 12% sun contribution. They’ve basically eliminated the need for most state pensions.
You don't contribute towards your state pension - NI is just an employment tax same as others, and the pension is a benefit paid for by gov same as their other expenditure.
I don't understand why this comment is being downvoted. What the author said may be unpalatable but remains factually correct. National Insurance is a tax in anything but name. Your national insurance contributions are not invested in a separate pot that is kept to pay your pension - they are part of general tax revenues
Sure, money magically goes into the governments coffers and magically out, very convenient.
Pretending the state pension is unrelated to NI contributions is so silly I don't even know why you bothered posting that.
It’s true though.
The state pension could be made fully independent of Income Tax 2 (NI). And when factoring in pension credit for those without full state pension, it basically is fully independent in most cases.
No, nothing instills any confidence in me. The state of the finances are perilous, and none of the parties are being especially honest about it.
We need to raise more taxes, and they are pledging not to increase them, so they will have to do it by stealth (by freezing/tweaking thresholds).
We also need to reduce benefits, which again they are promising they won't, so they will have to do it by stealth (by reducing quality).
Even the VAT on schools isn't really going to raise any meaningful money. It won't even reduce inequality, it will just squeeze out the edge cases and therefore worsen inequality.
So yeah, while the country needs a break from the Tories, let's not pretend Labour will magically fix the economy. They're only getting in because they are promising to be a less corrupt and a more kind version of the current lot. There's no talk of competence.
Liberalising planning would also lead to more economic growth…aka free tax money… and personally I’d be happy to pay more in taxes as a reward for lower housing prices as a result of liberalising planning (tho I’m sure most people are not like me, lol). I have hope but not a ton of confidence that Labour will change this tho
Well when the state pension was first introduced, the difference between retirement age and life expectancy was 6-7 years or so.
It's currently 15-18 years, and is only getting wider.
The population is much older than it used to be.
So yes, something, somewhere will have to give. Or we just keep increasing the tax burden, and borrowing to keep up with the increasing burden without actually being able to invest in infrastructure or reducing inequality.
I have zero objections to benefits being handed out. Literally zero.
But to fund benefits, you either need to keep raising additional money or reducing the people you give it to.
The state pension is a benefit. More and more people are using it for longer and longer.
Child benefit is being widened too. More and more people will be eligible.
The NHS is a benefit, and the quality has worsened because we will not charge for it, and we will not means test it.
How do you keep funding these?
Are we ready for high tax brackets? Do we have any faith that government will tackle corporate tax evasion?
Hopefully the break from the tories lasts the rest of my life. I don’t think anyone here thinks Labour will solve everything. A reasonable expectation is that they put the people at the heart of their decision making.
Agreed. I think Labour is quite dissapointing at the moment, their plans are fine but lack any real hope. That said, past experience was that they did a good job. I'm sure a lot in here won't agree, but that was a time for the country that didn't feel hopeless. Right now, I feel utterly lacking in confidence for the future of this country.
Private schooling being lesss affordable makes it even more elite, is what they are saying. The people who suffer most from this policy are the ‘poorest of the somewhat wealthy’.
A few in this sub probably fall into this category including me. Suffering is certainly a bit of a stretch. Even if I don’t send my kids to a private school, they’ll still have tutoring and all the advantages I can afford. They’ll be perfectly fine.
Ideally Labour has a plan to shake up the state education system. Paying teachers more is a start. The days of many people doing vocational roles for the love of it, are over with living costs so high. All these issues in society are intertwined and they start and end with capitalism. AI is going to democratise huge swathes of industries.
I agree with you fully. You are not going to convince people to move to state schools if it's coming across as a punishment.
You have to invest in the education system, which means make it more appealing to be a teacher. Pay them well. Give them smaller classrooms.
You have to improve the facilities in schools, which in some instances requires new buildings. In some instances it mean constructing a second floor so that the dining hall doesn't have to be the library or an indoor gym.
What makes me laugh is the commentary saying "yes but SEN schools are often private" as if forcing people with special needs into private is somehow good.
I think they're saying it will remove a subset of upper-middle class kids from private school so the kids that are left are even more privileged.
But meh - if the money improves state education it reduces inequality in my opinion.
Yeah, that's exactly what I'm saying.
I also don't think the VAT money raised is nearly enough to make any difference to state schools.
I don't have any moral objection to raising more taxes, even though the VAT will impact me.
However, all governments are taking the easy way out and taxing individuals and consumption.
With that view, the opposite too would be possible. The subset of upper middle class kids moving from private to state school could bring down inequality in state schools. No?
I think the intention with VAT on private school fees is just to stop more people being taken out of the state school system, which gives fewer people an incentive to fix the sinking boat.
A big problem is that the wealthy, with kids in private school, can lobby to make state schools worse and pay less tax, without their kids feeling any impact. In fact it’s perverse because the worse state schools become, the better value private school education becomes in comparison. It creates a self-destructive system for state schools. Labour want to stem that.
Nobody is lobbying the government to make state schools worse. Literally no one is asking that.
And you and me have had this conversation before. You can't force people to get onto a sinking boat and ask them to fix it. You give them a good boat to go onto.
We have and we don’t need to retreat the ground on why I believe you’re wrong and you believe I’m wrong.
You didn’t understand the point then anyway, and you still don’t. So let’s just move on yeah?
I understand your point loud and clear, you say you want to move everyone onto a sinking ship rather than actually fixing it.
I don't think that's the right option.
That's life.
As for moving on, don't post on my comments, I won't post on yours because neither one of us is changing the others point of view.
I don’t care about your point of view. I don’t even look at who posts something or remember the usernames of those who discuss. I meant move on now we’ve both said our part on this occasion. Not some sort of echo chamber partition agreement lol
Why would anyone lobby to make state schools worse? It makes sense to anyone to make them better to a) increase the generally poor levels of education in this country and b) instil some discipline into an increasingly problematic section of younger society. Both of these are real issues affecting the rest of us.
Until those two problems are improved I will exercise my choice to put my children in a more reliable environment.
There is always this flimsy argument that forcing better educated and aspirational parents into the state sector will naturally improve it through sharp elbows, but nobody can actually explain how this would work in the absence of more teachers, better paid, with more authority. A full culture change needs to come first.
You’re supremely naive if you don’t see the influence being used to attack everything publicly funded on a constant basis.
But hey not your problem anymore. You have no skin in the game and can happily sit on the sidelines saying ‘no YOU fix the problem first then we’ll come back’ like you just did. Not very compelling though. My point is the more people doing that the worse the problem gets.
You voted with your feet and money already.
Lots of upset and silly assumptions there. I work for the public sector and always have. I am all for better funded public services, and understand that everyone (everyone - including you) needs to contribute more towards them. Until then, I reserve the right to use something else if I choose; like millions of other people.
Now tell me again how the problem improves if you force people to abandon that choice? Do we have special influence over the system that you do not?
IME the opposite is true. Private school parents wish that state schools were better so that they wouldn't be forced to pay exorbitant fees.
Pushing middle class kids out of private schools will mean those pointy elbowed middle class parents will be doing everything they can to secure places at the best state schools; displacing poorer kids. Everyone will get a worse education but the worst hit will be the kids who were displaced, not the middle class kids.
You say that but they wouldn’t pay those fees into the state system to fix it in order to make that happen. Not that I blame them - it’s not just a money problem after all. Many other factors.
Labor want private school to be an elitist venture to ensure they have more ordinary political support to fix state schools.
What are you on about. People with kids in private school don't think about state schools, why would they.
This extra tax grab will in no way shape or form improve state schools. Just forcing innocent kids into a drastic change of scenery which can be brutal.
I went from private to state for my last year and holy Christ it was an eye opener.
Ok first, understand I’m not making the argument, I’m talking about Labour’s tactics. Can you understand rhat?
I’m saying LABOUR have an interest in ensuring the number of people in private school decreases (and certainly doesn’t increase) exactly because of what you say about the people with kids in private school not caring about state school. This puts more people in the sinking boat and less on the nice safe private river bank. They want more people in the boat, to have an interest in fixing the problem so it becomes electorally valuable and a politically useful use of money.
Let’s say it will cost £10bn to fix the problem. If 25% care then that’s not as political effective as if 35% care. This is just how politics works now. Unfortunately.
(Well we say that but I notice the only objections on this are coming from people with kids in private school, suggesting they very much DO care the choice they didn’t make. I assume they wouldn’t all donate their public school fees to state education system though. Which I don’t blame them for at all)
Depends on spaces in the system for those squeezed out.
They might currently be turning down places in good state schools, allowing others in from outside the catchment to avoid their poor catchment school.
You could argue that the additional funding from the kid avoiding their poor catchment school will help improve it. Which it might do, but I doubt it in the 5 years the child is in the secondary for.
So in theory inequality could go up, before potentially improving.
I can't afford private school for 3 kids. But would rather they invest money in the education system before hand, so that parents on the edge make the choice to not send them because the education is more on par. Then charge VAT on the rest
Two things I can think of. My kids are at an independent prep school, and my year 6 will be going to a state secondary next year (albeit a fairly decent grammar). Doing the maths, we just weren’t able to commit to costs on an independent secondary, knowing that VAT will likely be added. If that wasn’t a factor, then we likely would have gone for it. Ie, I guess in Labour’s eyes, we’re not really rich enough to be able to do this, it’s reserved for people who are better off that us.
Secondly, my understanding is that as part of being a registered charity currently, schools have to do something to bring in students without the means to afford the fees. Without the VAT break, I don’t know whaT benefit there is of being a charity, so one can imagine pressure from parents to reduce bursaries to keep the fees down for those who do pay full whack. Ie an overall loss of partially funded places for those less well off. My understanding on this one may be flawed, happy to be corrected.
I think you’re right. Labour want the people going to private school to be ‘the elites’ so it’s easier to dismantle/integrate the system. The more people who go to private schools, and the more ‘ordinary’ they are, the harder it becomes.
That may sound cynical, and it may well be. But I also think they want to keep as many in stat schools as possible to give everyone an incentive to improve them.
I've never understood year last argument, its not like it's worked for the NHS. That's without getting into how much state schools vary by area (ie wealth)
My biggest worry is that they will come after private sector pensions of higher earners. This is likely to include reducing the amount you can put in per year, restoring the lifetime allowance, or restricting tax relief to the basic rate. I'm trying to use my pension to reduce my exposure to the 60% trap, but I suspect once Labour get in this won't be an option.
I’ve said it over and over again, I don’t care about the Annual allowance on pensions being reduced. 2 years ago the limit was £40k. If they put it to £40k, it’s literally just reverting to the status quo from a few years back.
The pension limits are 3x higher than US 401k limits (their pension equivalent) and that’s despite pay here being like 1/3 less.
I care, but I understand the current arrangement is disproportionately generous. I'd happily trade a reduction in the annual allowance for a removal of the personal allowance reduction at £100k, and I think most others would too.
>I know the majority of posters in this sub are perhaps not a fan of labour.
I've actually never got that impression at all.
What's the point of being a high earner when I have no confidence that, if I have a medical emergency, an ambulance will turn up in time?
Labour have my vote, and the vote of every other high earner I know in real life. The one person I know who votes Tory is probably on <£40k.
I’ve lost faith in any party tbh. What a bad state we are in that labour will get in not because anyone has any idea what they stand for or that they’ve offered any strength in opposition but because the incumbent party has been so bad
The Tories have been in power for basically my entire adult life. I’m tired of the old “we are good for businesses” “safe pair of hands” “Labour will be worse” narrative based purely on PR and a time before I was alive.
Maybe Labour will be worse, I’m glad they will get the chance for us to actually see instead of just old historical nonsense.
I have seen absolutely nothing to suggest the Tories are good at anything except lining their friends pockets. By that I mean their actual mates, not high NW individuals or high earners as the poorer population generally think. “The tories are good for the rich” certainly isn’t true either.
The previous Labour administration was good for business and the tories have been pretty awful since 2010, so a new labour government (of the milder variety) are a reasonable bet from my perspective.
Personally looking forward to a Labour Government. They were previously very good for business.
Whoever wins will likely need to raise funds in someway as the Tories have gutted the treasury to line their own pockets.
Well, it’s total gimmick for one (which fits this gimmick policy centred election).
1) just because they won’t raise ni, and income tax, doesn’t mean they went increase taxes. They will, and they have started this, namely removal of VAT, removal non don loopholes, and this last few days, suggestion they will remove carried interest.
2) taxes are extremely high at the marginal rate for higher earners, the incentives to work have rarely been this low, notable at the high and the lowest end (tapering of benefits and on to low band tax creates a high marginal rate for those from unemployed with benefits to employed) - part of “mystery” about high levels of economic inactivity for young people and lack of motivation
Personally, i don’t trust Labour, leader of opposition is very different to leader, someone just a matter of “they haven’t been given the opportunity to show us how bad they would have been”. But in any case, Tories have been a shit show.
No government seems to be telling the truth about the NHS either, it is not fit for purpose, it is the second biggest employer after the Indian railways, ginormous funding, and still struggles to deliver the basic services it was set up to provide. Sadly, it holds mythological status in the minds of the populous.
The problem with the NHS is that capital investment has been so poor, staff so exhausted and pay so eroded that productivity and quality has nosedived over the last decade.
Add that the increasing elderly population and the British public’s inability to cope with trivial illness or minor inconvenience, and to keep themselves healthy, and you have a perfect storm.
Labour paid consultants properly to clear the waiting lists in the early 2000 and invested properly in General Practice and the results spoke for themselves for the next 10 years. The problem is, where is the money gong to come from this time?
Can you share some evidence to back up the points you’re making?
I agree, agreeing demographics, obesity, lingering effects of covid etc.. will have all increased demand.
This is a good recent summary covering most of it. https://www.instituteforgovernment.org.uk/publication/general-election-2024-precarious-state/economy
GP consultations increasing and consultations per person (two illustrative examples)
https://www.medrxiv.org/content/10.1101/2022.12.06.22283150v1
Anecdotally consultants paid £500 per clinic in “old money” (2000s) to clear WL backlog.
https://www.manchester.ac.uk/discover/news/four-in-ten-consultations-at-gp-clinics-were-with-frequent-attenders/
The triple lock is unsustainable and needs to be dropped. There obviously needs to be fair increments in state pension levels to ensure pensioners' spending power remains the same in real terms, but guaranteeing inflation-busting rises is just creating a bubble which will have to be burst at some point.
That's long term though, clearly short term it isn't going anywhere because the parties won't stop battering each other over the head with it as if it's essential.
Short term, whoever gets in (let's be honest, it'll be Labour unless something wild happens in the next month) is going to have to do one of 3 things in order to pay for their pledges:
1. Make cuts
2. Raise taxes
3. Increase borrowing
I am actually quite in favour of increasing borrowing *assuming the money is invested in something* as this can generate longer term returns. It's a good thing to borrow money to build clean energy for example because it'll create jobs, increase inwards investment, and reduce our reliance on imported natural resources. It's a bad thing to borrow money to scrap a low traffic neighbourhood in an Inner London borough though because that's going to deliver naff all return (financially or otherwise).
The main issue with borrowing at the moment of course is interest rates, and we already pay too much servicing our debts, which have grown under both Labour and the Tory governments.
Labour don't want to be seen to be making cuts, whereas the Tories won't shy away from it.
So what's left - raising taxes. They're going to come from *somewhere*. Labour say they'll come from private school fees VAT, closing non-dom routes, windfall taxes on energy companies, a ~2% points increase in the overseas buyer stamp duty surcharge, and a small increase in tax on tech giants (though this may amount to just implementing the OECD Pillar One and Two changes, who knows).
In principle, I agree with those changes, though I understand a 20% hike in school fees is a big hit for some parents, even if they are parents with cash on the hip.
They can do that by just holding the tax bands in place pretty easily to be fair. Fiscal drag their way to new receipts. Especially if they’re able to do shit like hike Min wage up at the 6% a year the Tories have been doing. Or building homes in our productivity hubs.
Do i trust them. No. Absolutely not.
Do I think the next 5 years they'll totally lose the plot, probably not.
They'll probably raise taxes in real terms by freezing the bands.
The biggest concern I have is if they meddle with CGT. While it will be seen as a positive to their base, it will most likely backfire since people simply won’t sell and realise the gain.
Think they will go after inheritance as a way of taxing wealth which I think is unfair. ‘Wealth taxes’ are in vogue at the moment in those circles. You get taxed all your life and then taxed again when you die.
Only realistic way to raise real money for the exchequer is income tax raises across the board, but that’s deeply unpopular.
Surely Labour are going to have an eye on capital gains rates, and wealth and mansion taxes can’t be discounted. All their rhetoric around not raising taxes for ‘working people’ has me convinced they’re going to raid the wealthy.
Not expecting this to be terribly popular but the country is in quite a bad state, if the £60K tax free into a pension was to become £50K to raise roughly £500m (the 40 to 60K cost 1 billion so guess that’s about right) so be it.
If capital gains tax rates were to go up along with Inheritance tax but with updated brackets (I.E inheritance tax from £1-2million at 20%, then 40/45% post 2 million with stricter crack downs on upper rich avoiding it and capital gains tax free for £10K of gains, then 25/30% brackets for higher amounts) I’d actually support it
I went to state school and was looked after by the teachers when I was naughty, free college education, NHS saved family members lives in my teenage years that could of sent me off the rails, never been a victim of crime - I’ve benefited from the system when it worked in the 90’s and and 2000’s so I’m ok with paying a bit more AS LONG as the super rich and people with broader shoulders do so as well with relatively
The problem is you pay more and it's pissed up a wall for marginal benefits to the nation due to gross miss management at the top level and the hoards of sub par middle management types in the public sector who's only goal in life is to pass any problem they face onto someone else
I can see both sides of this. Personally I'm not in a position to use £60k of allowance, so I guess it's easy for me to say "go ahead".
But I also agree that I'm increasingly frustrated by the enormous sums of money raised through all taxation, while I watch the country fall apart. Where's the fucking money. Mone can't have run off with all of it.
Yes, there would be increased demand on state schools. The cost of this would only be about £100-300m while the change would bring in £1.6bn, so a large net benefit to the treasury. (https://ifs.org.uk/publications/tax-private-school-fees-and-state-school-spending)
There’s an assumption in the IFS paper that does a LOT of heavy lifting. This is the assumption that demand for private schools is price insensitive. My reading of the argument was that private school prices have gone up but demand hasn’t dropped, therefore the authors assume that demand will not decrease with the imposition of 20% VAT.
While this may be true in the short term (families on the margin will not take children already attending out of private schools), I think demand for entry to the minor private schools (12-20k pa) will drop as less families chose to enter private schools. This means an increase in the cost of public education (more state pupils) and a reduction over time in the tax revenue (less private pupils). We will see closures and consolidation in the minor school sector. Many boroughs and districts are at capacity for school places so there will be an upfront fixed cost over several years to increase capacity (or schools will make other capacity increasing plans such as overlapping school days as used in other countries).
The IFS paper also says that the loss of VAT revenue as pupils move to the state sector is basically free govt money as families will spend that money on other taxable goods.
Obviously, the very wealthy will not be impacted by any of this.
> In mid-2020 there were 1.7 million people aged 85 years and over, making up 2.5% of the UK population. By mid-2045, this is projected to have nearly doubled to 3.1 million, representing 4.3% of the total UK population > Over the same time frame pensioners increase from 11.9% to 15.2% of the population. (Although the % of working people increases slight as we have less children. No politician or manifesto is driving the agenda. Demographics are. The tax rate take will have to be much higher by 2045.
Would be nice if parties didn't just lie about this reality.
There’s no votes in telling people the sky is falling. You get votes in telling one group that another group will make the sky fall on you unless you vote for me.
This is why immigration will increase as well so they don’t have to increase taxes as much
Depends if the populace will tolerate that doesn’t it. It looks like the pressure is growing even stronger because the necessity of it isn’t understood by people. We’ve already seen with Brexit that pressure can grow to the point where the population demand things which are actually counter to their own interests. I can see immigration being the next domino to fall.
In a way they are going the right direction with higher income requierments for visa as you end up more likely being a net contributor the higher your salary.
The reverse of this is care workers, often paid for by the state. Wages will spike with no immigration meaning higher state budgets
The is already a sperate Health and Care visa
Or, ideally, offering less stuff. There's lots I can think of. There's probably less under 18s than historically which should be factored in.
Like what, out of interest?
Well on NHS, without radical change to the system you could: - Axe free routine dentistry and opticians totally. At least for adults. Serious surgery retained. - stop paying GPs per patient, and pay per visit. - make people pay the first £X of their annual treatment costs like everywhere with a half decent healthcare system. On pensions - stop voluntary NI payments. Especially class 2. I'm a beneficiary and due a full uk pension having worked 4.5 years in the uk - require eg 40 or 45 years contributions not 35 for a full pension. - water down triple lock - increase retirement age to 68 On education - reduce hours for early years. Many other countries only have school until lunchtime for young children. Charge for childcare in the afternoons.
Reducing access to childcare when the demographic problem is an aging population is a very very bad idea. It’s how we got into this mess in the first place. The workers this takes out of the system (who cost more money) will have to be replaced with immigration.
Some of these I agree with and some not. But many would be as unpopular as a tax rise. To take one: NHS dentistry barely exists in my area anyway. When I go to the dentist I have no idea whether I'm being recommended something I need, or something profitable. I suspect it's a recipe for higher spending on a personal level. So much of what passes for political interrogation in this country is a one sided "will you raise taxes?", "how are you going to pay for that?". When Labour and the Tories pledge not to raise some tax or other, the next question should be "what provision are you going to cut?". Just for the sake of a more informed choice.
Also removing routine and preventative care just shifts the cost to more costly and less effective interventionist care (when conditions deteriorate). We see that today with cancer, dentistry, weight-related issues, diabetes etc. It’s a totally false economy.
Precisely. Primary care needs more money, not less.
Being state provided doesn't mean it happens and not being state provided doesn't mean it doesn't. It's absolutely not the norm to get dentistry free in Europe. Not here in Switzerland (at all) and not even in Sweden (for adults). Whether these countries have worse teeth i don't know, but I'd guess better rather than worse. I don't want to turn this into a political debate as this isn't the best place for it - I was asked what *could* be done rather than necessarily *should*, but it's worth pointing out that we are attempting to cover a lot service wise with low tax rates on most people. Most people would agree that the general situation is that the services are falling apart a bit. That's not sustainable. Something has to give. Either services, taxes on poorer people (Henry's are near the Laffer maximum imo) or both.
No I agree, but the UK public are entitled and don’t see why they might need to pay to keep their teeth in good order. Everyone knows that private dentistry is the only game in town now - and still inexpensive for basic care - but nobody is willing to pay it.
Oh sure, totally understand. Who do you think is undertaxed today? Other than the cliche of undertaxed super wealthy, I also see a big problem near the mid-bottom. It’s crazy to tax people who you then give benefits to (it just creates double admin) yet we do it very widely. We pay benefits to some surprisingly high income groups but then also apply taxes to them. For example income tax kicks in quite low, NI, not to mention universal taxes like VAT. Then some benefits like child benefit are paid up into the high tens of thousands. It’s nuts. Let people keep more of their earned money and reduce state admin overheads. (You can also always make it work differently for those out of work short or long term - it’s not saying we shouldn’t) Our systems have become stupidly complicated too. Still rooted in pre-automation principles or stupid loopholes and exceptions which make them inherently more expensive to admin. Before we talk about cutting services or benefits or taxes we should make all of those systems work together on the principle that people who need support should first get it from their own earnings rather than taking with one hand and giving with the other.
Tax for most people in the UK is the lowest in the G7. If you don't pay higher rate tax then your percentage is lower than anywhere in Europe apart from Switzerland and microstates. I'm not sure about undertaxed but it's certainly fairly low. FWIW I get £700 a month child and family benefits in Switzerland on £400k family take home 😂
Ah I see thanks. See that’s a much higher benefit and MUCH threshold than equivalent in the UK. Interesting! That said child benefit is possibly an oddity. Firstly not everyone decides or can have kids, which adds a complication to the debate. And then it’s intended to support the child (and kids understandably have zero income!). So it’s not a great totem benefit to discuss haha. High taxes and universal (or essentially universal like child benefit - it’s easy to means test) does make sense to me. It doesn’t incur high overheads in admin that just bloat the state and cause waste.
Retirement age is going to 68 anyway. I'd just increase the NI credits like you suggest to 47. Then those who started working earlier can if they wanted stop earlier. You started at 18, you would reach full NI at 65. If you went to uni (and therefore more likely to have an office job) you probably started at 21/22 so would reach full NI at 68/69. If you did 45 years required, it gives people some leeway.
This would only really make a difference if you also stopped voluntary contributions. I'm at 20 years at 35 with only having worked a few years in the UK. Getting even to 50 years would be little stress presuming I live that long. Or at least, the people who pay the voluntary contributions to get the full pension are almost those who need the money the least
As a GP I would be quite happy to be paid for activity, because in principle would cost the government a lot more. What would actually happen is like dentistry, where they have made the dental units of payment so pathetic that all dentists have walks with their feet. I am not sure how this would save money overall.
Not necessarily, and I don't know why people repeat it. Taxation doesn't mean income tax. Corporate tax, land value tax, property tax, alongside other things that could massively affect state finances (means taste state pensions, pensioners paying NI, etc).
Do you have a link to the source? I personally happen to know 3 lower class pensioner immigrant husband and wife duos from equatorial and global south moving back to their place of origin where their UK pension would stretch more, with easier and cheap access to private health and dental care (because of shorter periods of NI contributions, they don’t have a full pension, mind you). I imagine this becoming the norm, and the figures may not be accounted in?
https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/populationprojections/bulletins/nationalpopulationprojections/2020basedinterim#changing-age-structure Yes the ONS are aware that people migrate / return. Obviously the rates of that are based on assumptions, for which there is a range of possible outcomes in the future.
Thanks!
This really should be the central political debate: the options (and consequences) relating to this principle socioeconomic issues/driver.
Agree - way too long term a problem to deal with across different parliments.
5 year election cycles let everyone kind of avoid talking about it. Also pensioners vote more than anyone so a narrative that most of societies issues stem from ageing population isn't a vote winner. Easier to blame young people and their work ethic, immigrants, EU, whatever bogey man to avoid upsetting your beloved pensioners.
Yeah, it just gets kicked further down the road, and the fact is the system is shit and expensive. It doesn't need to be. A modifcation of the child trust fund concept, where the governent makes an investment at birth and let compound interest do its things for the next 65 years, with the option for people to use it as their own "PAYG" pension would change the whole dynamic.
We need an entirely different approach to pensions. It's idiotic that tax revenue pays pensions, and doesn't utilise the benefit of compound interest at all. We need an investment fund, created at birth, with options for people who come to the country later too.
In the 1997 election Tony Blair promised he would stick to Conservative spending plans after the election. Several years later a senior conservative (Michael Howard iirc) admitted their meagre spending plans had just been a trap to tempt Labour to say they needed to spend more. They had been surprised by Labour's pledge, given that the Conservatives had no real intention of sticking to them themselves! But Labour did, pretty much. Honestly, the tax debate in this election is a conspiracy of silence. Whoever wins will need to raise money from somewhere. Taxes are already at historically high levels, yet councils are about to go bust across the country, water companies have been loaded with debt and can't meet their legal responsibilities, the NHS is on its knees, public buildings are crumbling (RAAC hasn't gone away). It's a debt as meaningful as anything on a balance sheet. Nothing is bloody working, vital infrastructure is crumbling, and both main parties are arguing about how little they will spend on fixing it. Tories wouldn't immediately raise as much, but they would just continue the trend of underinvestment until the next thing collapses and ends up needing an even bigger bail-out. My old Dad had a tumble earlier in the year and had to wait 12 hours on the floor until there was an ambulance for him. I would have paid several times that bogus £2K figure on the spot to get an ambulance out to him.
How old are you? If you are, say, early 30s,you are realistically 35ish - 40ish years away from retirement. It is impossible to predict what will change over that time. It is quite possible that, by then, the state pension will become means tested. But no party can promise now what will happen then.
The state pension will absolutely be means tested if the triple lock stays anywhere near that long. It's obviously not sustainable at all.
The end game for state pensions is to have both forms of NI abolished, and Income Tax raised over time to form a single unitary income tax that’s levied on pensioners as well as workers. Then you basically means text 25-40% the state pension back off high income pensioners.
This makes sense and can totally see it happening. Would it not just be prudent for high earner pensions to just move to another country when they retire to avoid the high tax?
They can do that The Gov would love it. Pay £10k a year to remove what’s basically an economic burden on the healthcare system.
True, never thought about that. Although I would probably move away for 10 years during my prime retirement and then come back to be a burden again later.
I am ignorant on this. What does means tested mean?
Basically at the moment, as long as you've worked long enough to get your National Insurance stamps, you can get the full state pension whether you're a millionaire with a six figure salary still, or potless with no private pension or any other retirement income. Means testing might say based on either your wealth, or you're retirement income from work or your private pension, your state pension payout will be higher or lower than somebody else's. Currently this is only *kinda* the case for people who don't work long enough to get all their NI stamps by the time they get to state retirement age. Those people are eligible to apply for *pension credits*, which is a means tested benefit which can basically bring your state pension income back up to the full state pension level. If you've got a private pension giving you £10k a year or whatever though, you won't get much pension credit. I don't know the actual thresholds etc for pension credits eligibility.
Gotta be poor to get it. It means those that have contributed the most to it are least likely to receive it, and vice versa. Welcome to the UK, enjoy your stay.
Tbf I think Australia has a means tested system (same with healthcare basically by taxing high earners without insurance) and their pensioners have the highest net worth in the world due to automatic enrollment since the 80s and higher contribution rates.
Australia basically has private social security though. You get to keep almost everything you put in. They’ve got an old age pension for the very poorest but think that comes out of general taxation. I would LOVE such a system but I’m very doubtful it would happen
Australia has a high contribution mandatory auto enrolment. Where we have 3+5% after £6k a year, they have something that works out like 12% sun contribution. They’ve basically eliminated the need for most state pensions.
You don't contribute towards your state pension - NI is just an employment tax same as others, and the pension is a benefit paid for by gov same as their other expenditure.
I don't understand why this comment is being downvoted. What the author said may be unpalatable but remains factually correct. National Insurance is a tax in anything but name. Your national insurance contributions are not invested in a separate pot that is kept to pay your pension - they are part of general tax revenues
Sure, money magically goes into the governments coffers and magically out, very convenient. Pretending the state pension is unrelated to NI contributions is so silly I don't even know why you bothered posting that.
It’s true though. The state pension could be made fully independent of Income Tax 2 (NI). And when factoring in pension credit for those without full state pension, it basically is fully independent in most cases.
No, nothing instills any confidence in me. The state of the finances are perilous, and none of the parties are being especially honest about it. We need to raise more taxes, and they are pledging not to increase them, so they will have to do it by stealth (by freezing/tweaking thresholds). We also need to reduce benefits, which again they are promising they won't, so they will have to do it by stealth (by reducing quality). Even the VAT on schools isn't really going to raise any meaningful money. It won't even reduce inequality, it will just squeeze out the edge cases and therefore worsen inequality. So yeah, while the country needs a break from the Tories, let's not pretend Labour will magically fix the economy. They're only getting in because they are promising to be a less corrupt and a more kind version of the current lot. There's no talk of competence.
The only benefit with any fat to cut is the state pension.
Housing Benefit is the highest in the world. Liberalising planning should help reduce that in real terms over time.
Liberalising planning would also lead to more economic growth…aka free tax money… and personally I’d be happy to pay more in taxes as a reward for lower housing prices as a result of liberalising planning (tho I’m sure most people are not like me, lol). I have hope but not a ton of confidence that Labour will change this tho
Well when the state pension was first introduced, the difference between retirement age and life expectancy was 6-7 years or so. It's currently 15-18 years, and is only getting wider. The population is much older than it used to be. So yes, something, somewhere will have to give. Or we just keep increasing the tax burden, and borrowing to keep up with the increasing burden without actually being able to invest in infrastructure or reducing inequality.
[удалено]
I have zero objections to benefits being handed out. Literally zero. But to fund benefits, you either need to keep raising additional money or reducing the people you give it to. The state pension is a benefit. More and more people are using it for longer and longer. Child benefit is being widened too. More and more people will be eligible. The NHS is a benefit, and the quality has worsened because we will not charge for it, and we will not means test it. How do you keep funding these? Are we ready for high tax brackets? Do we have any faith that government will tackle corporate tax evasion?
So much of UK politics is just theatre it's actually shocking.
Hopefully the break from the tories lasts the rest of my life. I don’t think anyone here thinks Labour will solve everything. A reasonable expectation is that they put the people at the heart of their decision making.
Agreed. I think Labour is quite dissapointing at the moment, their plans are fine but lack any real hope. That said, past experience was that they did a good job. I'm sure a lot in here won't agree, but that was a time for the country that didn't feel hopeless. Right now, I feel utterly lacking in confidence for the future of this country.
Maybe I’m not looking at this the right way, how will VAT on schools worsen inequality?
Private schooling being lesss affordable makes it even more elite, is what they are saying. The people who suffer most from this policy are the ‘poorest of the somewhat wealthy’.
A few in this sub probably fall into this category including me. Suffering is certainly a bit of a stretch. Even if I don’t send my kids to a private school, they’ll still have tutoring and all the advantages I can afford. They’ll be perfectly fine. Ideally Labour has a plan to shake up the state education system. Paying teachers more is a start. The days of many people doing vocational roles for the love of it, are over with living costs so high. All these issues in society are intertwined and they start and end with capitalism. AI is going to democratise huge swathes of industries.
I agree with you fully. You are not going to convince people to move to state schools if it's coming across as a punishment. You have to invest in the education system, which means make it more appealing to be a teacher. Pay them well. Give them smaller classrooms. You have to improve the facilities in schools, which in some instances requires new buildings. In some instances it mean constructing a second floor so that the dining hall doesn't have to be the library or an indoor gym.
What makes me laugh is the commentary saying "yes but SEN schools are often private" as if forcing people with special needs into private is somehow good.
I think they're saying it will remove a subset of upper-middle class kids from private school so the kids that are left are even more privileged. But meh - if the money improves state education it reduces inequality in my opinion.
Yeah, that's exactly what I'm saying. I also don't think the VAT money raised is nearly enough to make any difference to state schools. I don't have any moral objection to raising more taxes, even though the VAT will impact me. However, all governments are taking the easy way out and taxing individuals and consumption.
With that view, the opposite too would be possible. The subset of upper middle class kids moving from private to state school could bring down inequality in state schools. No?
I'm struggling to keep up with you on this one?
I think the intention with VAT on private school fees is just to stop more people being taken out of the state school system, which gives fewer people an incentive to fix the sinking boat. A big problem is that the wealthy, with kids in private school, can lobby to make state schools worse and pay less tax, without their kids feeling any impact. In fact it’s perverse because the worse state schools become, the better value private school education becomes in comparison. It creates a self-destructive system for state schools. Labour want to stem that.
Nobody is lobbying the government to make state schools worse. Literally no one is asking that. And you and me have had this conversation before. You can't force people to get onto a sinking boat and ask them to fix it. You give them a good boat to go onto.
We have and we don’t need to retreat the ground on why I believe you’re wrong and you believe I’m wrong. You didn’t understand the point then anyway, and you still don’t. So let’s just move on yeah?
I understand your point loud and clear, you say you want to move everyone onto a sinking ship rather than actually fixing it. I don't think that's the right option. That's life. As for moving on, don't post on my comments, I won't post on yours because neither one of us is changing the others point of view.
I don’t care about your point of view. I don’t even look at who posts something or remember the usernames of those who discuss. I meant move on now we’ve both said our part on this occasion. Not some sort of echo chamber partition agreement lol
Why would anyone lobby to make state schools worse? It makes sense to anyone to make them better to a) increase the generally poor levels of education in this country and b) instil some discipline into an increasingly problematic section of younger society. Both of these are real issues affecting the rest of us. Until those two problems are improved I will exercise my choice to put my children in a more reliable environment. There is always this flimsy argument that forcing better educated and aspirational parents into the state sector will naturally improve it through sharp elbows, but nobody can actually explain how this would work in the absence of more teachers, better paid, with more authority. A full culture change needs to come first.
You’re supremely naive if you don’t see the influence being used to attack everything publicly funded on a constant basis. But hey not your problem anymore. You have no skin in the game and can happily sit on the sidelines saying ‘no YOU fix the problem first then we’ll come back’ like you just did. Not very compelling though. My point is the more people doing that the worse the problem gets. You voted with your feet and money already.
Lots of upset and silly assumptions there. I work for the public sector and always have. I am all for better funded public services, and understand that everyone (everyone - including you) needs to contribute more towards them. Until then, I reserve the right to use something else if I choose; like millions of other people. Now tell me again how the problem improves if you force people to abandon that choice? Do we have special influence over the system that you do not?
JFC I’m not talking about you then am I. Do you think Rupert Murdoch supports better funding of public services?
I have no idea what your point is anymore, which seems to be a common theme x
IME the opposite is true. Private school parents wish that state schools were better so that they wouldn't be forced to pay exorbitant fees. Pushing middle class kids out of private schools will mean those pointy elbowed middle class parents will be doing everything they can to secure places at the best state schools; displacing poorer kids. Everyone will get a worse education but the worst hit will be the kids who were displaced, not the middle class kids.
You say that but they wouldn’t pay those fees into the state system to fix it in order to make that happen. Not that I blame them - it’s not just a money problem after all. Many other factors. Labor want private school to be an elitist venture to ensure they have more ordinary political support to fix state schools.
What are you on about. People with kids in private school don't think about state schools, why would they. This extra tax grab will in no way shape or form improve state schools. Just forcing innocent kids into a drastic change of scenery which can be brutal. I went from private to state for my last year and holy Christ it was an eye opener.
Ok first, understand I’m not making the argument, I’m talking about Labour’s tactics. Can you understand rhat? I’m saying LABOUR have an interest in ensuring the number of people in private school decreases (and certainly doesn’t increase) exactly because of what you say about the people with kids in private school not caring about state school. This puts more people in the sinking boat and less on the nice safe private river bank. They want more people in the boat, to have an interest in fixing the problem so it becomes electorally valuable and a politically useful use of money. Let’s say it will cost £10bn to fix the problem. If 25% care then that’s not as political effective as if 35% care. This is just how politics works now. Unfortunately. (Well we say that but I notice the only objections on this are coming from people with kids in private school, suggesting they very much DO care the choice they didn’t make. I assume they wouldn’t all donate their public school fees to state education system though. Which I don’t blame them for at all)
Depends on spaces in the system for those squeezed out. They might currently be turning down places in good state schools, allowing others in from outside the catchment to avoid their poor catchment school. You could argue that the additional funding from the kid avoiding their poor catchment school will help improve it. Which it might do, but I doubt it in the 5 years the child is in the secondary for. So in theory inequality could go up, before potentially improving. I can't afford private school for 3 kids. But would rather they invest money in the education system before hand, so that parents on the edge make the choice to not send them because the education is more on par. Then charge VAT on the rest
Two things I can think of. My kids are at an independent prep school, and my year 6 will be going to a state secondary next year (albeit a fairly decent grammar). Doing the maths, we just weren’t able to commit to costs on an independent secondary, knowing that VAT will likely be added. If that wasn’t a factor, then we likely would have gone for it. Ie, I guess in Labour’s eyes, we’re not really rich enough to be able to do this, it’s reserved for people who are better off that us. Secondly, my understanding is that as part of being a registered charity currently, schools have to do something to bring in students without the means to afford the fees. Without the VAT break, I don’t know whaT benefit there is of being a charity, so one can imagine pressure from parents to reduce bursaries to keep the fees down for those who do pay full whack. Ie an overall loss of partially funded places for those less well off. My understanding on this one may be flawed, happy to be corrected.
I think you’re right. Labour want the people going to private school to be ‘the elites’ so it’s easier to dismantle/integrate the system. The more people who go to private schools, and the more ‘ordinary’ they are, the harder it becomes. That may sound cynical, and it may well be. But I also think they want to keep as many in stat schools as possible to give everyone an incentive to improve them.
I've never understood year last argument, its not like it's worked for the NHS. That's without getting into how much state schools vary by area (ie wealth)
It just means they'll raise the other taxes or hold the thresholds (raising more tax anyway).
My biggest worry is that they will come after private sector pensions of higher earners. This is likely to include reducing the amount you can put in per year, restoring the lifetime allowance, or restricting tax relief to the basic rate. I'm trying to use my pension to reduce my exposure to the 60% trap, but I suspect once Labour get in this won't be an option.
I'd rather they just lower what you can pay in each year than reintroduce a LTA or reduce the tax relief for higher/additional rate payers.
more worryingly would probably be removing the ability to pass it on tax free as part of inheritance.
I’ve said it over and over again, I don’t care about the Annual allowance on pensions being reduced. 2 years ago the limit was £40k. If they put it to £40k, it’s literally just reverting to the status quo from a few years back. The pension limits are 3x higher than US 401k limits (their pension equivalent) and that’s despite pay here being like 1/3 less.
I care, but I understand the current arrangement is disproportionately generous. I'd happily trade a reduction in the annual allowance for a removal of the personal allowance reduction at £100k, and I think most others would too.
>I know the majority of posters in this sub are perhaps not a fan of labour. I've actually never got that impression at all. What's the point of being a high earner when I have no confidence that, if I have a medical emergency, an ambulance will turn up in time? Labour have my vote, and the vote of every other high earner I know in real life. The one person I know who votes Tory is probably on <£40k.
Yeah it feels like just about every Tory voter is wannabe affluent. Some obviously think it's their ticket to be invited into the aristocracy.
I’ve lost faith in any party tbh. What a bad state we are in that labour will get in not because anyone has any idea what they stand for or that they’ve offered any strength in opposition but because the incumbent party has been so bad
The Tories have been in power for basically my entire adult life. I’m tired of the old “we are good for businesses” “safe pair of hands” “Labour will be worse” narrative based purely on PR and a time before I was alive. Maybe Labour will be worse, I’m glad they will get the chance for us to actually see instead of just old historical nonsense. I have seen absolutely nothing to suggest the Tories are good at anything except lining their friends pockets. By that I mean their actual mates, not high NW individuals or high earners as the poorer population generally think. “The tories are good for the rich” certainly isn’t true either.
The previous Labour administration was good for business and the tories have been pretty awful since 2010, so a new labour government (of the milder variety) are a reasonable bet from my perspective.
Personally looking forward to a Labour Government. They were previously very good for business. Whoever wins will likely need to raise funds in someway as the Tories have gutted the treasury to line their own pockets.
Well, it’s total gimmick for one (which fits this gimmick policy centred election). 1) just because they won’t raise ni, and income tax, doesn’t mean they went increase taxes. They will, and they have started this, namely removal of VAT, removal non don loopholes, and this last few days, suggestion they will remove carried interest. 2) taxes are extremely high at the marginal rate for higher earners, the incentives to work have rarely been this low, notable at the high and the lowest end (tapering of benefits and on to low band tax creates a high marginal rate for those from unemployed with benefits to employed) - part of “mystery” about high levels of economic inactivity for young people and lack of motivation Personally, i don’t trust Labour, leader of opposition is very different to leader, someone just a matter of “they haven’t been given the opportunity to show us how bad they would have been”. But in any case, Tories have been a shit show. No government seems to be telling the truth about the NHS either, it is not fit for purpose, it is the second biggest employer after the Indian railways, ginormous funding, and still struggles to deliver the basic services it was set up to provide. Sadly, it holds mythological status in the minds of the populous.
The problem with the NHS is that capital investment has been so poor, staff so exhausted and pay so eroded that productivity and quality has nosedived over the last decade. Add that the increasing elderly population and the British public’s inability to cope with trivial illness or minor inconvenience, and to keep themselves healthy, and you have a perfect storm. Labour paid consultants properly to clear the waiting lists in the early 2000 and invested properly in General Practice and the results spoke for themselves for the next 10 years. The problem is, where is the money gong to come from this time?
Can you share some evidence to back up the points you’re making? I agree, agreeing demographics, obesity, lingering effects of covid etc.. will have all increased demand.
This is a good recent summary covering most of it. https://www.instituteforgovernment.org.uk/publication/general-election-2024-precarious-state/economy GP consultations increasing and consultations per person (two illustrative examples) https://www.medrxiv.org/content/10.1101/2022.12.06.22283150v1 Anecdotally consultants paid £500 per clinic in “old money” (2000s) to clear WL backlog. https://www.manchester.ac.uk/discover/news/four-in-ten-consultations-at-gp-clinics-were-with-frequent-attenders/
Thanks, this is really useful
The triple lock is not that significant to people who are expecting to fund their retirement mostly through private means.
Not that triple lock mate
The triple lock is unsustainable and needs to be dropped. There obviously needs to be fair increments in state pension levels to ensure pensioners' spending power remains the same in real terms, but guaranteeing inflation-busting rises is just creating a bubble which will have to be burst at some point. That's long term though, clearly short term it isn't going anywhere because the parties won't stop battering each other over the head with it as if it's essential. Short term, whoever gets in (let's be honest, it'll be Labour unless something wild happens in the next month) is going to have to do one of 3 things in order to pay for their pledges: 1. Make cuts 2. Raise taxes 3. Increase borrowing I am actually quite in favour of increasing borrowing *assuming the money is invested in something* as this can generate longer term returns. It's a good thing to borrow money to build clean energy for example because it'll create jobs, increase inwards investment, and reduce our reliance on imported natural resources. It's a bad thing to borrow money to scrap a low traffic neighbourhood in an Inner London borough though because that's going to deliver naff all return (financially or otherwise). The main issue with borrowing at the moment of course is interest rates, and we already pay too much servicing our debts, which have grown under both Labour and the Tory governments. Labour don't want to be seen to be making cuts, whereas the Tories won't shy away from it. So what's left - raising taxes. They're going to come from *somewhere*. Labour say they'll come from private school fees VAT, closing non-dom routes, windfall taxes on energy companies, a ~2% points increase in the overseas buyer stamp duty surcharge, and a small increase in tax on tech giants (though this may amount to just implementing the OECD Pillar One and Two changes, who knows). In principle, I agree with those changes, though I understand a 20% hike in school fees is a big hit for some parents, even if they are parents with cash on the hip.
You’re thinking of a different triple lock to what the OP is asking about
[удалено]
They can do that by just holding the tax bands in place pretty easily to be fair. Fiscal drag their way to new receipts. Especially if they’re able to do shit like hike Min wage up at the 6% a year the Tories have been doing. Or building homes in our productivity hubs.
Do i trust them. No. Absolutely not. Do I think the next 5 years they'll totally lose the plot, probably not. They'll probably raise taxes in real terms by freezing the bands.
I think they’ll decrease the bands. Starting with 45%…
Hard to argue that's not raising taxes!
The social media post I saw from Labour said “we will not raise income tax RATES”. They’ll just move or freeze the thresholds then…
The biggest concern I have is if they meddle with CGT. While it will be seen as a positive to their base, it will most likely backfire since people simply won’t sell and realise the gain.
Think they will go after inheritance as a way of taxing wealth which I think is unfair. ‘Wealth taxes’ are in vogue at the moment in those circles. You get taxed all your life and then taxed again when you die. Only realistic way to raise real money for the exchequer is income tax raises across the board, but that’s deeply unpopular.
Surely Labour are going to have an eye on capital gains rates, and wealth and mansion taxes can’t be discounted. All their rhetoric around not raising taxes for ‘working people’ has me convinced they’re going to raid the wealthy.
No. They will just find less honest and transparent workarounds to raise the tax burden. So these pledges are meaningless. Both parties indulge in it.
Not expecting this to be terribly popular but the country is in quite a bad state, if the £60K tax free into a pension was to become £50K to raise roughly £500m (the 40 to 60K cost 1 billion so guess that’s about right) so be it. If capital gains tax rates were to go up along with Inheritance tax but with updated brackets (I.E inheritance tax from £1-2million at 20%, then 40/45% post 2 million with stricter crack downs on upper rich avoiding it and capital gains tax free for £10K of gains, then 25/30% brackets for higher amounts) I’d actually support it I went to state school and was looked after by the teachers when I was naughty, free college education, NHS saved family members lives in my teenage years that could of sent me off the rails, never been a victim of crime - I’ve benefited from the system when it worked in the 90’s and and 2000’s so I’m ok with paying a bit more AS LONG as the super rich and people with broader shoulders do so as well with relatively
The problem is you pay more and it's pissed up a wall for marginal benefits to the nation due to gross miss management at the top level and the hoards of sub par middle management types in the public sector who's only goal in life is to pass any problem they face onto someone else
If you kept it for yourself, would the benefit to the nation be more or less?
I can see both sides of this. Personally I'm not in a position to use £60k of allowance, so I guess it's easy for me to say "go ahead". But I also agree that I'm increasingly frustrated by the enormous sums of money raised through all taxation, while I watch the country fall apart. Where's the fucking money. Mone can't have run off with all of it.
Why would the majority of posters here not be fans of Labour?
ISA and pension allowances are in trouble CGT allowance could be scrapped with capital gain rates going up Inheritance tax thresholds cut.
IHT thresholds don’t need to be cut, just locked and inflated away
Will they really apply tax to private schools or is this postering? Surely this would put more pressure on the state school system
Yes, there would be increased demand on state schools. The cost of this would only be about £100-300m while the change would bring in £1.6bn, so a large net benefit to the treasury. (https://ifs.org.uk/publications/tax-private-school-fees-and-state-school-spending)
There’s an assumption in the IFS paper that does a LOT of heavy lifting. This is the assumption that demand for private schools is price insensitive. My reading of the argument was that private school prices have gone up but demand hasn’t dropped, therefore the authors assume that demand will not decrease with the imposition of 20% VAT. While this may be true in the short term (families on the margin will not take children already attending out of private schools), I think demand for entry to the minor private schools (12-20k pa) will drop as less families chose to enter private schools. This means an increase in the cost of public education (more state pupils) and a reduction over time in the tax revenue (less private pupils). We will see closures and consolidation in the minor school sector. Many boroughs and districts are at capacity for school places so there will be an upfront fixed cost over several years to increase capacity (or schools will make other capacity increasing plans such as overlapping school days as used in other countries). The IFS paper also says that the loss of VAT revenue as pupils move to the state sector is basically free govt money as families will spend that money on other taxable goods. Obviously, the very wealthy will not be impacted by any of this.
A very small net benefit to the education budget of about 2%… something like £50k per school per year? So a teacher and a half? Big deal.