"Budget 2015: Benefit changes to hit 13m families, claims IFS"
July 9, 2015 6:44 AM Subscribe
BBC: "Thirteen million UK families will lose an average of £260 a year due to the freeze in working-age benefits, says the Institute for Fiscal Studies (IFS)." BBC: Benefit Changes, who will be affected? "Hundreds of thousands of UK families will be affected by cuts of £12bn in the UK's welfare budget announced by the chancellor." BBC: Budget Calculator.
Meanwhile, it looks like there will no longer be tax benefits to running one-person limited companies rather than contracting through an umbrella company, as one's dividends will be taxed at income tax rates. Which would be peachy keen if we got, say, a northern-European-style welfare state for it, rather than a neo-Victorian oligarchic dystopia.
posted by acb at 7:30 AM on July 9, 2015
posted by acb at 7:30 AM on July 9, 2015
The Jobs Economist has a bit. The IFS page. But I thoughC hris Dillow's take The worst of left and right spelled it out best.
What's, uh, interesting is that this is the same pace of deficit reduction that Labour promised, and a greater rise to the minimum wage than Labour promised. (The minimum wage rise won't actually benefit low earners because more billions are being taken out of the tax credit system than will be put in by employers). But mysteriously it turns out that these much-shrieked-about measures won't actually cripple the economy after all... as long as the money is funnelled to the well-off in the form of inheritance tax cuts, corporate tax cuts, and tax thresholds to the higher rate.
Depressing details: this undoes a lot of the good work done in the tax credit system to reduce "benefit traps". Under this budget some low earners will now face a 79% effective tax rate where they only keep 21p out of every extra pound they earn.
posted by TheophileEscargot at 8:29 AM on July 9, 2015 [1 favorite]
What's, uh, interesting is that this is the same pace of deficit reduction that Labour promised, and a greater rise to the minimum wage than Labour promised. (The minimum wage rise won't actually benefit low earners because more billions are being taken out of the tax credit system than will be put in by employers). But mysteriously it turns out that these much-shrieked-about measures won't actually cripple the economy after all... as long as the money is funnelled to the well-off in the form of inheritance tax cuts, corporate tax cuts, and tax thresholds to the higher rate.
Depressing details: this undoes a lot of the good work done in the tax credit system to reduce "benefit traps". Under this budget some low earners will now face a 79% effective tax rate where they only keep 21p out of every extra pound they earn.
posted by TheophileEscargot at 8:29 AM on July 9, 2015 [1 favorite]
acb: link, pls? (never mind, found it)
That doesn't mention the dividend change; I found the information here.
posted by acb at 9:29 AM on July 9, 2015
That doesn't mention the dividend change; I found the information here.
posted by acb at 9:29 AM on July 9, 2015
The minimum wage increase is nonsense.
From the Telegraph in re the Labour proposal:
'the Commission found that the proposed £8 an hour rate was not “at all ambitious as it implies a slower rate of increase between 2014 and 2020 than there was between 1999 and 2014.
“If that trend continued into the future the national minimum wage would actually be worth £8.23 an hour in 2020, not £8.”'
So in terms of the history of the minimum wage it's a paltry increase for the over-25s, presumably accompanied by a squeezing of the expectations of younger workers.
£9 for all in 2020 would be sort of OK if there were no other changes, or even matching cuts to tax credits but given the disproportionate tax credit cuts and the age restrictions, it's just bollocks.
I will find it hard to condemn anyone under 25 for rioting. In all honesty, why the fuck shouldn't they smash up a society punishing them for failures they have nothing to do with?
posted by howfar at 10:24 AM on July 9, 2015 [4 favorites]
From the Telegraph in re the Labour proposal:
'the Commission found that the proposed £8 an hour rate was not “at all ambitious as it implies a slower rate of increase between 2014 and 2020 than there was between 1999 and 2014.
“If that trend continued into the future the national minimum wage would actually be worth £8.23 an hour in 2020, not £8.”'
So in terms of the history of the minimum wage it's a paltry increase for the over-25s, presumably accompanied by a squeezing of the expectations of younger workers.
£9 for all in 2020 would be sort of OK if there were no other changes, or even matching cuts to tax credits but given the disproportionate tax credit cuts and the age restrictions, it's just bollocks.
I will find it hard to condemn anyone under 25 for rioting. In all honesty, why the fuck shouldn't they smash up a society punishing them for failures they have nothing to do with?
posted by howfar at 10:24 AM on July 9, 2015 [4 favorites]
The sight of Ian Duncain-Smith pumping his fists at the "living wage" budget was just vomit-inducing.
And simply re-affirms that he's a deluded lunatic, completely and utterly out of touch with any kind of reality.
About 33 seconds in here: https://www.youtube.com/watch?v=UGCp82eDlZg
What. A. Prize. Bell-End.
posted by rolandroland at 11:47 AM on July 9, 2015
And simply re-affirms that he's a deluded lunatic, completely and utterly out of touch with any kind of reality.
About 33 seconds in here: https://www.youtube.com/watch?v=UGCp82eDlZg
What. A. Prize. Bell-End.
posted by rolandroland at 11:47 AM on July 9, 2015
Given his enthusiastic economic promotion of birth control, I do not see any good theological arguments against IDS being excommunicated from his faith.
posted by howfar at 12:03 PM on July 9, 2015
posted by howfar at 12:03 PM on July 9, 2015
As usual Simon Wren-Lewis pretty much nails it:
A budget for our next Prime Minister
posted by Beware of the leopard at 1:53 PM on July 9, 2015 [1 favorite]
A budget for our next Prime Minister
[...]
Most of those on low earnings will still be worse off - by a lot in some cases, often decreasing work incentives - but he knows from the last election that impressions are more significant than numbers. [1] Probably the most important impact of this budget will be to raise poverty, particularly child poverty. The previous coalition’s policy changes also increased poverty, but their impact on the official statistics was offset by the overall decline in real wages. Over the next five years that will no longer happen, so again the cover is being put in place: change the definition of poverty. The economics is ludicrous, but we should have got used to that by now.
[...]
If this sounds too cynical to you, all I can say is that I learn from experience. When I wrote this three years ago, Paul Krugman no less said I was getting “remarkably cynical”. Unfortunately, save for one detail, my cynicism proved pretty accurate. When it comes to implementing good (evidence based) economic policy, in both the UK and the rest of Europe, we are living through very depressing times.I didn't bother quoting "about the folly of fiscal austerity while interest rates are near their lower bound." as it goes without saying at this stage.
[1] Postscript: the reaction of the UK press is outlined here
posted by Beware of the leopard at 1:53 PM on July 9, 2015 [1 favorite]
Missed edit window: I meant: I didn't bother quoting the bit "about the folly...
posted by Beware of the leopard at 2:00 PM on July 9, 2015
posted by Beware of the leopard at 2:00 PM on July 9, 2015
A little light relief (pre-Budget but close enough) from Cassetteboy: http://www.theguardian.com/news/video/2015/jul/09/cassetteboy-remix-news-taylor-swift-welfare-spending-video
posted by Beware of the leopard at 11:41 PM on July 9, 2015 [1 favorite]
posted by Beware of the leopard at 11:41 PM on July 9, 2015 [1 favorite]
Benefits cuts "will involve cuts to benefits" shock
posted by rum-soaked space hobo at 9:21 AM on July 12, 2015 [1 favorite]
posted by rum-soaked space hobo at 9:21 AM on July 12, 2015 [1 favorite]
« Older Rihanna Unchained | Both shoulders, a new haircut and not pushed to... Newer »
This thread has been archived and is closed to new comments
posted by Leon at 7:05 AM on July 9, 2015