Wednesday, October 30th, 2024 - Budget Day

 

This is personal, stated the Chancellor of the Exchequer, Rachel Reeves. She refers to realities of the 1980s and 1990s. The Chancellor's efforts to gather capital will drag hundreds of thousands more people into paying tax and even more into higher rates as their pay rises, indicates none other than The Guardian.

Could a personal crusade turn into a nightmare? Changing fiscal rules to disguise debt making it appear as something else does not change the fact that it will still be borrowing. So more taxes and more borrowing that will be increased for public interest, according to the Chancellor.

Ordinary folk and many business were badly hit by the Covid Pandemic and the measures implemented to deal with the Covid Pandemic. After that, people and many business were hit by the energy crise generated by the conflict in Ukraine and the measures adopted against the Russian Federation. 

Now, they stand to be hit again by taxation and potentially higher prices of utilities, housing and daily shopping.

But the Chancellor of the Exchequer still says that she will implement the budget in a way that she will 'protect the living standards of working people'. 

Well, in an interview made in Washington, USA, Rachel Reeves - perhaps inadvertently - made promises that she will have to deliver. If she does not deliver and if the measures implemented by the Labour government become a de facto nightmare, then this will create a widely open door for another Conservative government.

Starting on Wednesday, October 30th, 2024, the government will have to deliver and with every failure, and every new crise, there will be many by-elections along the way in which people will express their discontent.

She talks about building schools and hospitals. Well, what will she do about nurses salaries that are not enough to rent a one bedroom flat? If living costs keep rising, this will be a de facto devaluation of salaries and a worsening of living standards. Before she goes around building schools and hospitals, she will have to look carefully at salaries actually paid to teachers and NHS staff. 

Even with the triple lock, state pensions are not enough to rent a one bedroom flat. State pensions are totally insufficient. Taxing state pensions and private pensions can only worsen an already bad situation. And this is going to do nothing to 'protect living standards'.  

Taxing private pensions, assets and shares? More madness on the way.

 Due to low productivity, Britain has increasingly relied on financial services. There are two sides of banking. One is the conventional side of banking based on mortgages and loans and the other is financial banking, lending money to investors that take a huge deal of risk and therefore expect higher rewards. 

Private pension funds very much depend on shares and investments and values fluctuate on a daily basis, so there is an inherent level of risk. How can you tax shares? Will you tax what a share was worth on Monday or what a share was worth on Tuesday?

Imagine yourself as a Northern Rock shareholder. One day you count your wins. You have an investment and you have a return. The next day, your investment evaporates because the value of your shares is literally zero and you have no return. Are we going to see debt taxed?

The only growth that the present Labour government will produce is the growth of debt, unemployment, illegal employment, and fraud. Launching a virulent attack against the one sector that keeps Britain alive is cutting down the tree on which you are standing. The 2008 financial crise will feel like a pleasant vacation.

The infamous event affecting people who had used their assets to support insurance payments comes to mind. One day they were riding the waves of opulence and the next day they were selling everything they had to pay for insurance claims.

Environment: Rishi Sunak - politics and realism - what we would like to do, what we can do

 

As people walk away from religion, new cults arise and the environment has become a cult and the messiahs of such cult don't have to be in charge of making hard decisions that need to be made to keep countries going.

I would like to have a mansion in Monaco, a very big yatcht, round the year vacations around the world in picturesque places while staying in six star hotels. Can I do it? Can you do it? The vast majority of us cannot.

As Prime Minister, Rishi Sunak has the duty to bring us down to earth, to stop dreaming impossible dreams, to deal with reality and reality tells that that the mount of electricity and infra-structure needed for a radical transformation of society to get rid of all fossil fuel consumption is beyond our means. The National Grid with all the additional energy supplies proved by existing sources cannot cope because electricity demands vastly surpass whatever we can produce. Not even nuclear energy can provide such enormous supply of energy and what ordinary people should become aware of is the fact that having an electric car will increase your taxes and your electricity bills since in vast majority of cases you will have to plug your vehicles to the same energy infrastructure used to provide electricity to your homes. Taxes on electric vehicles and on the use of electric vehicles are already rising for a very simple reason. The taxes applied to fossil fuel vehicles will be applied to electric vehicles. In London of all places, consumers have been hit by a whole package of new taxes. They were paying Congestion Charge, parking costs, added to the costs of running vehicles and now they will have to pay for ULEZ, and to park cars in front of their own homes. On top of that, the parking costs paid by private companies to provide services to other companies and residential properties are going to be added to bills for delivery, house refurbishments, and other basic services. So it is a never ending cycle of paying tax, tax and more tax that will exhaust consumers. Regardless of any income increases, taxes are eating away private incomes and this includes pension payments that people receive when they retire.

So delaying the implementation of measures that are beyond the scope of reality is a very sensible thing to do and this is exactly what the British Prime Minister Rishi Sunak has just announced. The messiahs of the new environment cult can say whatever they want. They don't have to make harsh decisions. They don't have to be accountable. Some like to constantly talk about impending doom and live in a world of their own. They constantly talk about what they would like to do, but they never talk about the economic and social costs of what they are proposing.

 

Triple Lock and Pensions: Nothing is guaranteed

 

The subject of state pensions will surely cause global warming

The Conservative/Liberal Coalition set out the triple lock aimed at protecting the value of state pensions and in 2019 the Conservative Party Manifesto stated that for the duration of the present Parliament the triple lock would be maintained - although momentarily, during the pandemic, the triple lock was suspended and due to be restored in April 2023.

The pension is supposed to increase every year depending on which of the following items is highest:

1) inflation measured by the CPI (Consumer Prices Index) 2) average wage increase or 3) 2.5%

This was before the present economic environment in which inflation shot upwards and is now above 10%. The present goverment led by Rishi Sunak will have to make a fundamental decision in terms of keeping the triple lock at least until the next General Election or abandoning the triple lock. 

In a country in which the average age of the population is rising, telling voters that the government is going to abandon the triple lock is not a vote winner. There are also plans to postpone the age of retirement. Chancellor of the Exchequer Jeremy Hunt will have to make a statement on plans for tax and spending. Britain has one of the lowest state pensions when compared to other Western countries. and given present rates of inflation the value of state pensions is being eroded on a daily basis.

If the triple lock is abandoned, the value of state pensions will purely and simply collapse.

 

Zero Hour Contract companies paying employees with two months delay

We keep getting reports of companies employing staff on Zero Hour Contracts paying their employees with a two-month delay. In a country in which Members of Parliament employ staff on Zero Hour Contracts you have to the conclusion that exploitation has been legalised.

Some people are not even paid the minimum wage and they are forced to work on commission. I wonder what the Inland Revenue has to say about it or is has the Inland Revenue become a criminal organisation that works against the United Kingdom?

It is a disgraceful situation in a country in which the pensions deficit keeps growing and legislation has being going through Parliament to delay and delay the age of retirement. When are successive governments in the United Kingdom going to put a halt to exploitation?

Who are the ones bound to suffer most? Those who are facing desperate financial situations. If there ever was an example of a political system that isn't working, this is it. This is the clearest example of Slavery when people are under paid, paid late or made to work without pay.

Think Tank (or Sink Tank) proposes to cut state pensions

A true recipe for disaster. A Think Tank (or shall we should say a 'Sink Tank', has proposed to cut down state pension and lower taxes. So let's see, already deprived pensioners will get even less money as pensions (pensions are already taxed) and on top of that in an economy that is collecting less tax with tax revenues falling the "SINK TANK" proposes to collect even less tax at a time when the deficit is growing and the balance of trade is negative. Brilliant!

From the News:

Cut state pension in half and lower taxes, says think tank

Institute of Economic Affairs proposes a radical solution to solve the ballooning cost of paying Britain's pensioners

Maybe somebody will propose hanging those who reach pensionable age because it costs too much to pay pensioners. What about gas chambers to save cost? We are reaching the highest levels of irrationality and the number of idiots seems to be rising.

Pensioners work and because they work they get their pensions. Pensions are not a charitable payment. People have paid for their pensions and they are entitled to receive their pensions.

Employment rises but wages fall. What about pensions?

Employment rises but wages fall. What about pensions?

The news that employment is rising but wages are falling make the Bank of England postpone the announced rise of interest rates. Less income also means less savings for pensions and the realisation that with lower wages the aspiration of buying or renting homes might be nothing more than an aspiration when banks are only lending the equivalent of three annual salaries when the amount required to be able to have a mortgage is not less than eight annual salaries.

The gap between the monies available for pensions and the monies that would be required to be able to provide pensions is also growing at a faster pace than ever before because savings are not a generating high yields while interest rates remain relatively low.

Therefore, there is a vicious circle. People earn less. Because people earn less the Bank of England cannot take the risk of putting up interest rates without facing the possibility of millions losing their homes because they cannot afford monthly payments at higher interest rates. While this is happening, people who earn less save less and get less interest payments for what they save. Putting up salaries would mean less capital available to employ more people and having less people employed means having to make more welfare payments.

The situation is not sustainable because sooner than later retirement age will come and millions of people who earn little and have no savings will have not enough pension funds or no pension at all as retirement age is rising because there is not enough money available to pay pensions.