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UK Mini-Budget 2022; what are your thoughts?

Matt N

CF Legend
Hi guys. Today, UK Chancellor Kwasi Kwarteng got up in the House of Commons and held a “Mini Budget”. Now I would not normally make a topic for something as inconsequential as the Chancellor holding a budget; this happens once every 6 months and usually generates fairly little in the way of news. However, I thought that today’s “Mini Budget” should be an exception… because in my opinion, the announcements were actually very significant, and there was not much that was “mini” about it at all!

Now, new UK Prime Minister Liz Truss campaigned on a platform of “tax cuts and reform” in her recent leadership campaign. And this budget is certainly living up to that promise, as Kwarteng announced the biggest package of tax cuts since 1972

In terms of what was announced, the basic points are as follows:
  • The 45% rate of additional income tax for high earners (salaries of £150k+) has been scrapped entirely. This will be replaced by a single higher rate of income tax of 40%.
  • Basic income tax has been cut from 20% to 19%.
  • Stamp duty has been permanently cut. The threshold for buyers paying stamp duty on new homes is to go up to £250,000, from £125,000 currently. The threshold for first time buyers is being increased to £425,000 from £300,000 currently, and the threshold below which first time buyers can claim relief from stamp duty is increasing to £625,000, from £500,000 currently.
  • The recent 1.25% increase in National Insurance (the Health & Social Care levy introduced by Boris Johnson) is to be reversed from 6th November.
  • The welfare system is seeing a shake up that could see more than 100,000 people in part time work facing a benefits cut if they do not actively seek more work. Claimants working 15 hours per week or less on the National Living Wage will be asked to meet regularly with a work coach and take “active steps” to increase earnings. If they fail to do so, their benefits could be reduced.
  • Energy bills are to be frozen at £2,500 as previously announced. Energy firms are also receiving a £40bn safety net.
  • Minimum service levels are being introduced for union workers in order to cut down on strike action, and legislation will be introduced that will require unions to put pay offers to a members’ vote.
  • The planned corporation tax rise is being cancelled; instead of rising to the planned 25%, it will remain at 19%, giving the UK the lowest corporation tax in the G20.
  • The cap on bankers’ bonuses is being scrapped in order to drive growth in Britain’s financial services sector. Currently, bankers’ bonuses are capped at double their salary.
This will all be paid for through substantial government borrowing; UK borrowing could hit £100bn per year under these plans.

The government says that these economic plans will stimulate growth through investment into the UK by large companies and industries, but the plans are very controversial.

I won’t deny it, these plans are extremely radical, in my view, and are a very bold gamble. I trust that Truss and Kwarteng know what they’re doing, and this gamble could work, but there is a substantial amount of risk involved, in my opinion.

What do you guys think?
Source: https://www.itv.com/news/2022-09-23...s-you-need-to-know-as-huge-tax-cuts-announced
 

Nitefly

Hyper Poster
It’s been a disaster - lowest £ to $ in 37 years, BOE having to call an emergency rates meeting… that’s before you even get to the ‘equality’ aspects.
 

Nicky Borrill

Strata Poster
All I can say is that I'm glad we're home from Florida...

$1.15 to the £ was bad, $1.09 is even worse. To put that in perspective, every £1000 a family spends in Florida they get $60 less than last week!

Even worse if you've opted to pay for things like hotels and car hire on arrival, when we booked the £ was at $1.38, thankfully we paid everything up front there and then! Anybody who got quotes at that time, but chose to pay on arrival now, is looking at getting $290 less for every £1000!!!

So if your accomodation was $2000 for your trip, and you booked in January. You'd have been quoted around £1449, But if you opted to pay when you actually arrive this week, that has now become £1835... A rise of £386!

If a family also spends $5000 general spending money on their trip (not at all unreasonable for a family) than that costs them £4587 now instead of £3623 back in Jan. A rise of £964!!! Almost a £1K more in just food, experiences, souvenirs on a reasonable (if not a little low) family budget for Florida!!!

Not a good time to travel as a Brit... Great time for everyone else to visit the UK though! :)

Tax and NI cuts are nice for us, in the short term, but the confidence in the UK economy is at an all time low, and clearly the experts, judging the market response, do not think it's the right thing to do in the long run.
 

davidm

Strata Poster
I think its a Tory government doing Tory government things; looking after themselves / their rich pals.

The only thing that's surprising is that, emboldened by their similar scams over Brexit Covid etc, that they are so brazen with it all, they are not even trying to hide the fact that the rich get richer and the poor get poorer anymore - they are revelling in it.
 

Christian

Hyper Poster
Not to defend the Tories, but, Sweden has had a socialist government for the last 8 years and the Swedish Crown is arguably doing worse than the Pound.

Hopefully we'll get rid of them by the end of the week.
 

Nitefly

Hyper Poster
lol and he’s out.


Possibly the most embarrassing suite of goofs in memory.
 

Hixee

Flojector
Staff member
Administrator
Moderator
Social Media Team
Lol, byeeeee.

Holding out hope that Truss will be gone soon. Then maybe the rest of the ****s too.
 

Matt N

CF Legend
New Chancellor of the Exchequer Jeremy Hunt has made an address to the nation this morning, and… I think it’s fair to say that the death knell has been sounded for Trussonomics, in its current form at least. The key things he said were:
  • Practically all of the mini-Budget announcements have been reversed. The only ones to be kept are the abolition of the health & social care levy and the the changes to stamp duty.
  • The cut to the basic rate of income tax has been scrapped “indefinitely”. Mr Hunt said that the basic rate will remain at 20% until economic circumstances allow for it to be cut.
  • The Energy Price Guarantee is being paired back, with it now only providing universal support until April 2023. After this, support will become more targeted, and the Treasury are conducting reviews into how help can still be provided in a way that costs the public finances less.
  • Hunt has alluded to “more difficult decisions [lying ahead] on both tax and spending”, and has said that “all departments will need to redouble their efforts to find savings and some areas of spending will need to be cut”.
Hopefully this reassures the markets and solves the volatility of the last few weeks… what do you guys think?
Source: https://www.telegraph.co.uk/politics/2022/10/17/politics-latest-news-jeremy-hunt-budget-liz-truss/
 

Furiustobaco

Mega Poster
Our Island is a joke.. A general election is all too needed right now, i think the conservatives have truly lost themselves and the public. I live in a conservative prone large town and even the hard core tories are turning away from their own party. 2 months or so in office is hilarious, and i am sure they do not have many keen volunteers lined up to be the next Prime Minister to crumble..

God- with all of this crap and the hilarious decision to leave the EU, i would not oppose the rest of Europe laughing at us.
 

Ian

From CoasterForce
Staff member
Administrator
Moderator
Social Media Team
I’ve always been centre-right but Boris and Mary have swayed me to fall into the left camp. Country desperately needs change. Can’t see an GE for a good couple of month but we’ll get one. Surely even this current bunch of Tories couldn’t morally change PM for the 3rd time within a year without giving the public a say.
 
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