Tag Archives: national insurance

Will Liz Truss’s new policies appeal to target voters? Probably not!

The bank holiday weekend may be over, but this article is being produced in the period before everybody goes back to work – so I’m still putting up material that has interested me – and I hope it interests you. Make of it what you will:

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Kwarteng’s mini-budget will still happen – probably at end of next week

Kwasi Kwarteng: he reckons he’s going to find a way to pay for Liz Truss’s energy price cap. But then, it’s not all that long since he said “fracking is over” – and look what has happened there.

A “fiscal event” to explain how the Liz Truss Tory governent will pay for its cap on energy bills will probably take place at the end of next week, it has been claimed.

We’re looking at September 23, it seems.

Also possible is an announcement of tax cuts to boost the economy and help (rich) people with rising living costs (that won’t affect them as much as the poor who won’t have help because they don’t pay tax).

During her campaign for the Tory leadership, Truss promised to undo the rise in National Insurance that was announced under Boris Johnson.

Apparently Kwarteng has announced a change in direction for the Treasury – that the department needed to focus on growing the economy by 2.5 per cent per year.

This follows the controversial sacking of top Treasury official Sir Tom Scholar.

Let’s have a look at that…

The implication is that the sacking was politically-motivated and Truss (along with Kwarteng and the rest) is replacing the UK’s formerly impartial civil service with one that is politically partisan.

This will lead to poor, ideologically-motivated decisions being pushed through by officials who should be advising politicians on the strengths or weaknesses of such moves.

It will destabilise the UK even further, at a time when we need a steady hand in charge.

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Truss would divert NHS funds to social care as hospitals stop routine Covid tests. Foolhardy?

Truss: open mouth, insert foot.

Tory leader candidate Liz Truss would divert £13 billion earmarked for the NHS to social care, to catch up on delayed Covid treatment there.

Is that a good idea? It’s certainly populist. But isn’t diverting funds away from the NHS when routine asymptomatic Covid testing is about to end – and the disease has this summer caused almost twice as many deaths as last summer – extremely foolhardy?

Nobody expects the ending of tests to last because a surge of new Covid cases is expected in the autumn. But the decision to end asymptomatic testing has alarmed health experts who have cautioned against dismantling the surveillance of Covid while cases remain high.

As it is, the chief executive of health think tank the King’s Fund has said handing the money to social care is “robbing Peter to pay Paul”.

Richard Murray said it was “not a sustainable solution to the health and care crisis”.

In any case, it is unlikely that the money will actually materialise.

It is supposed to come from increased National Insurance contributions announced under Boris Johnson last year – but Truss wants to scrap the rise and find the cash from the general tax take (which is a contradiction in terms; public funding and taxation doesn’t work like that).

So as the NHS faces its worst winter crisis yet, the front-runner to be the new prime minister wants to take the imaginary money that was going to help it, and let it do its nonexistent good in social care. LUNACY!

Source: Liz Truss plan to divert NHS funds to social care is ‘robbing Peter to pay Paul’

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Coronavirus: Tories threaten tax increase on self-employed after non-offer of help

Rishi Sunak: his promises are worthless – but you can bet he’ll follow through on his threats.

Typical Tories: they make a long list of promises that get broken within a week and then try to charge us a fortune for them.

So, with the self-employed, they’ve offered to pay 80 per cent of normal profits (not wages, as with employees).

But they won’t even start providing this until some time in June.

And self-employed people will be taxed for receiving that money.

And in the meantime, they want any of us whose income stream dries up to claim Universal Credit, joining an online/telephone queue of tens of thousands, as the Department for Work and Pensions is completely unable to cope.

This is the (bad) deal that Chancellor Rishi Sunak has offered – to 85 per cent of self-employed people.

And now, days later, he’s telling us he’ll increase National Insurance paid by all self-employed people because he says this excuse for a bailout makes it impossible to justify them paying less than others.

It’s a con.

Chances are that self-employed people won’t get anything – or will receive next-to-nothing; certainly not enough to cover their outgoings.

And they will be made to pay many times more than they receive in the years to come.

That is what’s “harder to justify”.

We don’t have a government – we have a gang of thieves. And they are using an epidemic to justify their daylight robbery.

Source: Coronavirus: Chancellor warns self-employed they face tax hike after crisis – Mirror Online

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Here’s the reason I’m not convinced the government can’t afford everyone’s pension

You know the Tory government is saying it has to raise the pension age – for everyone – to 67 because it can’t afford to pay everybody under the original conditions?

I have a doubt about that.

You see, the current basic pension rate is around £130 per week (although the maximum is £168.60)

And in January this year, the National Insurance Fund that is supposed to pay for it was in surplus by £24,221,220,000 (see the image above).

Admittedly, considering the number of pensioners in the UK (12 million), it would take only 16 weeks to spend that enormous amount.

But it’s being topped up constantly, it makes money from investments – and the pension-age population is falling because of Tory policies.

That’s why this fund is increasing steadily; on March 31 it stood at £29.5 billion.

And, of course, it would increase much more rapidly if working people were paid properly for the work they do.

Do you get the feeling someone is lying to you?

AFTERWORD: This article has provoked a considerable amount of criticism on Twitter, from some people who claimed to be pensions experts but turned out to be nothing of the sort, and from a few who actually turned out to have something to say.

It is a complicated issue, of course.

But nothing I’ve read has shown the problems are insurmountable by any method other than cutting back the number of people eligible to receive pensions – especially in a nation where wages are being depressed below subsistence levels for working people, while the super-rich are enjoying huge tax breaks (and Boris Johnson is said to want to extend that to cuts in their NI liability too). There are other possibilities, also.

My ultimate feeling, after smiling through the insults and ignorance of many (and the attempts to inform of a few) is still that someone is lying – about the facts of the situation and about what can be done.

I’d like a few opinions from people who don’t claim to be experts on this topic. Do you think that the authorities have been honest about this?

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Johnson’s Brexit policy means UK will be MUCH better-off under LABOUR

Valueless: Oscar Wilde said a cynic knows the price of everything and the value of nothing. Boris Johnson doesn’t even know the price of anything. Perhaps that is why he is spaffing your money up the wall like a fool.

Listen to this:

John McDonnell was referring to a report by the respected Institute of Fiscal Studies (IFS), stating that the UK will be £110 billion better-off under a Labour government than with Tory rule, by 2022.

The IFS stated that the outlook for the public finances has “worsened dramatically” since the spring and will deteriorate further if the UK leaves the European Union without a deal.

There can be few clearer statements that Boris Johnson’s leadership is a threat to the United Kingdom and everyone in it.

The report stated that the government’s current spending plans, including a £13.4 billion increase to meet Mr Johnson’s promises on police and schools (but not – notice – the NHS) mean the budget deficit was likely to be £52.3bn in 2020-21, more than double the £21bn forecast by the OBR in March.

But Mr Johnson also promised huge tax giveaways for the rich in his leadership campaign including cuts to Income Tax and National Insurance. If he goes ahead with these, he will harm the national finances even more brutally.

No doubt Mr Johnson – and his chancellor Sajid Javid – will come out with some mealy-mouthed excuse to pacify us all. It will probably involve another claim that the Conservatives are the “party of financial responsibility” and “Labour will bankrupt the country”. But it’s a funny thing – if they think Labour’s fiscal plans are so harmful, why has IFS director Paul Johnson claimed that their own current ideas are almost identical to Labour’s from 2017?

Most tellingly, of course, we know that Boris Johnson is a liar.

You cannot trust him when he says he’ll fund the police. You cannot trust him when he says he’ll fund schools. You cannot trust him when he says he’ll fund our NHS. You cannot trust him when he says he’ll cut tax. And you absolutely cannot trust him when he says the UK will be better-off after his Brexit.

He thinks you’ll vote for him in an election likely to happen before Christmas. Just remember this:

If you vote for a liar, you will only get broken promises.

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A quick thought about the Conservative ‘tax lock’ silliness

Anyone who thinks David Cameron’s promise of a five-year ‘tax lock’ is a good idea must need psychiatric help.

Cameron promised to introduce a law banning income tax, VAT or national insurance increases in the next parliament if the Conservative Party is elected back into office, clearly in the belief that anybody on average wages or less is too stupid to know what this means.

We know better, don’t we?

We know that taxes are set according to each income group’s ability to pay. This means that people in the lowest taxable bracket pay the lowest amount, as they need most of the money they earn in order to pay their way. The amount of tax then increases by increments up to the highest earners – who take home considerably more than they need to survive, and who can therefore afford to contribute a much larger amount with no impact on their quality of life.

We also know that a five-year ‘tax lock’ will not affect the lowest-earning people at all. Nobody earning up to £10,600 pays any tax at the moment, so a freeze on nothing is still nothing.

What will it do to the people in the highest tax bracket? Well, it depends what they earn and how fast their pay increases, doesn’t it? Let’s have a look at the handy guide to average UK pay rises, created by fellow blogger Tom Pride last November:

141112average-uk-pay-risesTomPride

So the director of a FTSE 100 company, paid the average amount of a mere £2.4 million, would have contributed 45 per cent in tax, or £1.08 million in the 2014-15 tax year. Over a five-year period, if that person’s income continued to rise at 14 per cent, then by 2020 – at a 45 per cent tax rate – they would pay a total of £8,138,360 in tax over the years until 2020. That’s certainly a respectable figure.

But Labour has proposed an increase in the top rate of tax, back to 50 per cent. Under the same conditions, this would mean FTSE 100 directors earning £2.4 million in the tax year 2014-15 would pay £9,042,623.

That’s a difference of £904,263; nearly a million pounds each.

This writer doesn’t have current figures for banker salaries and cannot, therefore, work out how much tax they would pay – but you can see for yourself that the difference between the two scenarios is likely to come to several million pounds per top banker.

Those people don’t need that amount of money in order to survive. The cost of living in the UK is less than 1/50 of what the FTSE directors take home, let alone the bankers. But David Cameron wants them to keep that money.

Meanwhile the UK Treasury goes without millions of pounds that could be used to help balance the national deficit, pay off the national debt, and boost the economy.

We’re back to ‘Starve the Beast’ economics again. The nation’s finances can go to Hell, as far as Cameron is concerned. He wants to starve the Treasury with tax cuts for the rich – either actual cuts or de facto cuts like his ‘tax lock’ – and then claim that public services cost too much and will have to be scrapped or sold off to rich corporations in return for donations to the Conservative Party – as we have seen in the years of the Coalition Government (most obviously in the case of the NHS).

Unless you are a banker, an FTSE100 director, or a member of Parliament, you would be mad to support such a wasteful and selfish plan.

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The Coalition is withholding billions that could be used to support the NHS

inflation

It seems we owe thanks to Labour’s former deputy Prime Minister, John Prescott, for discovering a revealing accounting measure by the Coalition Government, meaning Chancellor George Osborne has yet again failed to cover his a**e.

According to Mr Prescott, figures from the House of Lords Library show the government spent £106 billion from National Insurance (NI) contributions last year – the benefit system received £85 billion and the NHS got £21 billion.

But he was “stunned” to find the Government last year held back nearly £30 billion.

“National ­Insurance money can only be used for the NHS or benefits,” Mr Prescott was quoted as saying. “So since he can’t spend it on anything else and chooses not to fund ­hospitals, the Chancellor lets it sit there.”

Mr Prescott recommended that the surplus should be used to help shore up a buckling NHS – but it seems clear that there is enough, not only to clear the health service’s debt but also to reverse all the devastating changes to the benefit system as well.

Let us hope a future Labour government remembers how to do the right thing.

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Is Iain Duncan Smith legalising breach of contract?

Iain 'Daftie' Duncan Smith before a previous hearing of the Work and Pensions committee.

Iain ‘Daftie’ Duncan Smith before a previous hearing of the Work and Pensions committee.

Here’s something mentioned during Iain Duncan Smith’s session before the Commons Work and Pensions committee last week, that doesn’t seem to have enjoyed enough attention: It seems Daftie Duncan Smith wants to legalise breach of contract.

He reckons part-time workers should be sanctioned off their top-up benefits if they refuse extra hours offered by their employer.

The sanctions would apply under the Universal Credit system – which is never going to work anyway – so perhaps this is an inconsequential matter, but it is disturbing that the Secretary of State for Work and Pensions understands so little about contracts of employment that he thinks this is a reasonable way to behave.

He told the Work and Pensions committee: “That is being investigated, as to whether we can now work to in-work sanctions – in other words, conditionality – so people get an opportunity to move up the hours if they can, and if they don’t wish to do that, we will see whether or not that system of conditionality works.”

Perhaps he doesn’t realise that some people are only able to work a certain number of hours per week, and that any increase means they will not be able to continue in the job. Perhaps he doesn’t realise that this will make them unemployed, and his “conditionality” prank means that they would be sanctioned off being able to claim benefits for a period of time after that, meaning they would be doubly punished for a situation that was not their fault.

Perhaps he doesn’t care. Yes, that seems more likely.

He certainly doesn’t understand contract law. When two parties enter into a contract of employment, it is a binding agreement on both of them – and if it is not honoured by either party – for example, if the employer tells the employee that their hours of work will be extended, rather than negotiating a change in the contract that is agreeable to both – then that party is said to be in breach of that contract.

And does this not open HM Revenue and Customs up to a potential explosion of Income Tax and National Insurance fraud?

Look at the situation Vox Political reported recently, in which a JSA claimant interviewed for a job lasting 22.5 hours per week and then had to turn it down when managers tried to increase the hours to 40; the employer told the Job Centre and he was sanctioned.

He had his benefit reinstated when he reported the employer for potential tax evasion and then told JSA decision makers what he had done, making it clear that he did not see why his benefit should be docked for refusing to take part in an illegal act.

Did Daftie consider this? Or did he think it would be okay because his government wants to reduce the amount of Income Tax it receives anyway, in order to justify cutting public services or selling them off to fatcat tax-avoiding businesspeople?

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Sign our petition to kill Osborne’s ‘tax statement’ propaganda sheet

141104taxleaflet2

[Image: Daily Mirror.]

Remember when the Transparency of Lobbying, Third-Party Campaigning and Trade Union Administration Act (otherwise known as the Gagging Act) was passed, in January this year? Vox Political warned that it marked the end of free speech and free protest in the UK.

The article showed that the new law means you may no longer link up with others to protest government actions in any meaningful way – as such action may breach Liberal Democrat and Tory government-imposed spending limits. Your personal complaints will be deemed unrepresentative of the people.

In that article, this blog asked why the government has launched its attack on free speech and free protest, and suggested the following: Perhaps it wants to control the information you receive, on which you base your voting intentions?

This week we received confirmation of that theory – or at least, some of us did.

The ‘tax statements’ being sent out to Income Taxpayers by the Treasury – on the orders of George Osborne – are nothing less than party political electioneering, being carried out using those taxpayers’ own money rather than the Tory Party’s funds. The leaflet is worded in a very carefully-chosen way that betrays a clear intention to mislead readers – most particularly about the amount of our Income Tax that is spent on ‘welfare’.

To illustrate the extent of the problem: We cannot say this is the same as social security, as – according to the terms of the leaflet – it isn’t. Apparently a quarter of our money is spent on ‘welfare’, which is then broken down into bizarre categories like ‘social protection’ – including, alongside social security, personal care services which nobody has defined as ‘welfare’ until know, and the pensions of retired mandarins, colonels and lowlier public servants who will be appalled to hear their hard-earned retirement provision re-labelled as ‘welfare’, according to The Guardian‘s editorial on the subject. David Cameron’s pension would be defined as ‘welfare’, according to this categorisation.

Meanwhile, state pensions have been defined as being paid from an entirely different source (they aren’t), in order to safeguard the Grey vote from the indignation that – clearly – this piece of politically-prompted propaganda is intended to stoke.

The fact is that – as the Mirror points out – Income Taxpayers put a lot more than 12p in every pound towards pensions, and a lot less than 24p in every pound towards working-age benefits.

Here are another couple of tricks – possibly the nastiest of the lot: Firstly, the leaflet does not make it clear that ‘welfare’ payments are made to people who have a right to them “because of family or medical circumstance, or indeed a record of national insurance contributions”. The impression foisted on the reader is of “unearned handouts to the poor”, according to the Guardian editorial.

Secondly, the leaflet as a whole does not mention the contribution of VAT payments to the national purse. This is because the government has cut Income Tax (irrationally – it has a huge deficit and debt to pay off but has reduced its own income). The thinking behind this is that people will think they have been allowed to keep more of the money they have earned. But the same government has increased VAT, meaning that – in fact – people are being taxed more heavily!

What is the intended result of all this deception? It is as Vox Political described, back in January:

“You would be led to believe that the governments policies are working, exactly the way the government says they are working.

“You would not have any reason to believe that the government is lying to you on a daily basis.

“You would be tranquillised.

“Anaesthetised.

“Compliant.”

What a relief that nobody believes that filthy liar Osborne – even his own backbenchers!

This is how they see him – offering empty promises as a ‘carrot’ to encourage voters to support the Tories.

Osborne’s behaviour is so appalling that this blog has started a petition, calling on the government to withdraw these propaganda sheets that pretend to be official government information – and apologise for ever releasing them in the first place.

It is on the Change.org website, please sign it by clicking here.

Other blogs on the ‘tax summaries’ are available from Virtual Gherkin and Same Difference.

We must not allow this abuse of public authority – and public funds – to take place.

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