Robert and Steph discuss the ways in which they think Rachel Reeves will adjust the fiscal rules in the autumn budget to allow for more capital spending.
If you are genuinely concerned about some people not paying taxes (moving abroad, holding onto assets etc.) then the solution is a simplified system as simple systems have fewer loopholes! Reeves should massively simplify CGT (and other taxes) and equalise the above interest returns with employment taxes and other earning means.
The word invest has been stolen . In the old days it meant something that was going to pay back dividends for ever that would far exceed the input. Now it's just an excuse for excessive consumption.
“Investing in public services” is the dumbest concept ever; public services are the real back hole in the British economy. We keep throwing money at them, with no expectation of measurable returns (profits).
Virtually every economist will agree that things like good education and good health will result in a productive workforce. In turn a productive workforce is what makes a country rich. Both labour and conservatives chronically underinvest in education. The main reason being is that it costs you money now but doesn't show benefit until much later (when the kids grow up). The benefits don't come in time for the next election.
I came to the UK when I was 5. Turned up at school not speaking a word of English. The teachers took extra time (special 1-1 sessions) to get my English up to speed. That allowed me to ramp up and not fall behind on education. I'm now earning £100k as a software engineer and paying corresponding taxes to the government. Even if it took 2 decades, the government is getting a fantastic return on its investment of a few hours of teacher's time. Plus I'll be working for decades to come and continuing to pay taxes. Meanwhile had I fallen behind in education I might now be sitting in prison costing the taxpayer around £50k a year.
@@plagiarisedwords We have some of the best schools in the world and the problem with our health service isn't that we don't spend enough (as a percentage of GDP we spend as much as our European peers), the problem with the NHS is that it's in desperate need of reform. What you're saying might be true if you we lived in a developing country with poor access to schools and no health service, but the UK isn't in this position. We're spending more on all of this stuff already than the vast majority of countries.
@@leeeeee286 UK has a very high variation in quality of schools. I think there are studies showing this when compared with OECD countries. So while UK has good schools it also has terrible schools. I went through some of the good ones and also volunteered to teach in bad ones during uni. The teachers didn't teach the full maths syllabus as they wanted to optimise their metric of % students getting A-C grade in maths at KS3. So not bothering to teach content needed to get an A helped. Complex maths is built on simple maths so those kids were getting royally screwed by their teachers. Slim chances for any of those kids to study STEM subjects at uni. Meanwhile I went to a school that allowed me to do 2 Maths a levels. It's night and day. Getting the standards of those schools higher will help our society a lot. Not saying you have to spend more but not sure you can improve those schools at no cost.
This is incorrect. Investing in public services - ie: education and health, is very important for the economy long-term. That should be obvious for everyone. Whether that's more training programs or investing more in digitalisation. Your rhetoric is what the Tories have had for the last 14 years.
This is like Gordon Brown's 'Bringing forward investment' i.e. Spending the next decades money over the next couple of years leading to even more severe austerity in the future.
Brown didn't create Osborne's Austerity it was a political choice Both he and Cameron were small state low tax Tories I was very much against PPI when he started using it but it was a John Major initiative that was finnaly put out of its misery in 2018 and was abused by the Cons as well
@@user-pd6pb2uq8rmoving capital spend into a different bucket stops slight of hand tricks like Sunak pulled with the 20 billion unfunded NI cut. Using projected spend by cancelling HS2 is the best example then reallocating it to fix potholes in London
From $15k to $45k that's the minimum range of profit returns every month its not a bad one for me.. As a beginner, it's essential for you to have a mentor to keep your accountable...
Economic activity doesn't create wealth Robert. Productivity creates wealth. Imagine 2 countries. Country A doubles the rate at which they buy and sell the same old stuff from one person to another. Country B makes twice as much stuff. Which Country has the most intense in wealth.
simple answer - copy the european central bank & change how interest in paid on bonds from Quantitative Easing round 1 (2008-11) & they'll free up £11 Bn a year. Suddenly the black hole is filled, with £30 Bn+ free to invest in green tech & housing
Thats not a simple awnser, doing this could cause the BOE unable to reduce its bond assets as the markets may not be willing to buy them if no intrest is paid. Its also a change that cant happen overnight and would likly take years.
@@jamesholt4449 It didnt take them years to print the money to bail out the bankers so why would it take years to change the interest rate rules? Central banks can do whatever they like, or whatever they are forced to do by govt.
If you’re going to move public debt reporting into more of an accounting basis then that’s probably a good thing. However, if you want to deploy that argument you have to do so consistently and the (gargantuan) elephant in the room are public sector and state pension liabilities. However you show it, even a degree of honesty would show that we’re broke. Until we can be straight with people about this we’ll never embark on a sustainable course to recovery.
So 1/3rd of our debt is held by the BOE due to QT/QE the BOE also hold on deposit 480 billion in reserve from the banks which they pay interest on even though we printed most of it during the banking crisis Reeve used to work at the BOE and is actually aware of not spooking the Markets and degrading gilts like Truss did as it adds to increased debt costs Are we really broke or is the system loaded in favour of the banking / services sectors. Reeve said clearly in her Mais lecture she was going to change the fiscal framework Quote Reeves highlighted various problems with the UK’s current fiscal rules and framework: excessively frequent fiscal events, a lack of protection for capital spending, short-termism, susceptibility to gaming and frequent rule changes. The current rules allowed H unt to Rob capital spending projects to create the illusion of enough to pedal an unfunded 20 billion NI cut. The core proposals would make that impossible by ring fencing capital spend into a separate bucket
Blame the Tories mate - left the country with the highest tax burden since WW2 and a debt to GDP of 100%. To compare, the Netherland's debt to GDP is 46%.
He does have a series of irritating mannerisms. Not least is his inclination to keep glancing to his left to what is apparently someone or something off screen but is not the camera. Don’t ask me to explain why it is irritating, but as Ricky Gervais would say, it is.
Well then you just disincentivise anyone with money from coming to the UK in the first place. And rich people will move abroad before the exit tax comes in.
Has Robert found out how Tax thresholds work since yesterday?
The guy's a bumbling fool. I don't know how he ever got away with it at the BBC, or later at ITV, or now on this podcast.
If you are genuinely concerned about some people not paying taxes (moving abroad, holding onto assets etc.) then the solution is a simplified system as simple systems have fewer loopholes! Reeves should massively simplify CGT (and other taxes) and equalise the above interest returns with employment taxes and other earning means.
Fiscal rules apply to thee, not to me.
R. REEVES
Oct 2024
She said she was going to change the framework in her Ma8s lecture
What this would stop is what Sunak did with the projected canceled HS2 money
The word invest has been stolen . In the old days it meant something that was going to pay back dividends for ever that would far exceed the input. Now it's just an excuse for excessive consumption.
Socialist investment = spaffing money up the wall.
Investment now means borrowing billions to pay people to work, so they pay taxes to pay back the borrowing that was invested so they could work
“Investing in public services” is the dumbest concept ever; public services are the real back hole in the British economy. We keep throwing money at them, with no expectation of measurable returns (profits).
Virtually every economist will agree that things like good education and good health will result in a productive workforce. In turn a productive workforce is what makes a country rich.
Both labour and conservatives chronically underinvest in education. The main reason being is that it costs you money now but doesn't show benefit until much later (when the kids grow up). The benefits don't come in time for the next election.
I came to the UK when I was 5. Turned up at school not speaking a word of English. The teachers took extra time (special 1-1 sessions) to get my English up to speed.
That allowed me to ramp up and not fall behind on education.
I'm now earning £100k as a software engineer and paying corresponding taxes to the government. Even if it took 2 decades, the government is getting a fantastic return on its investment of a few hours of teacher's time. Plus I'll be working for decades to come and continuing to pay taxes.
Meanwhile had I fallen behind in education I might now be sitting in prison costing the taxpayer around £50k a year.
@@plagiarisedwords We have some of the best schools in the world and the problem with our health service isn't that we don't spend enough (as a percentage of GDP we spend as much as our European peers), the problem with the NHS is that it's in desperate need of reform.
What you're saying might be true if you we lived in a developing country with poor access to schools and no health service, but the UK isn't in this position. We're spending more on all of this stuff already than the vast majority of countries.
@@leeeeee286 UK has a very high variation in quality of schools. I think there are studies showing this when compared with OECD countries.
So while UK has good schools it also has terrible schools.
I went through some of the good ones and also volunteered to teach in bad ones during uni.
The teachers didn't teach the full maths syllabus as they wanted to optimise their metric of % students getting A-C grade in maths at KS3. So not bothering to teach content needed to get an A helped. Complex maths is built on simple maths so those kids were getting royally screwed by their teachers. Slim chances for any of those kids to study STEM subjects at uni.
Meanwhile I went to a school that allowed me to do 2 Maths a levels. It's night and day.
Getting the standards of those schools higher will help our society a lot. Not saying you have to spend more but not sure you can improve those schools at no cost.
This is incorrect. Investing in public services - ie: education and health, is very important for the economy long-term. That should be obvious for everyone. Whether that's more training programs or investing more in digitalisation. Your rhetoric is what the Tories have had for the last 14 years.
This is like Gordon Brown's 'Bringing forward investment' i.e. Spending the next decades money over the next couple of years leading to even more severe austerity in the future.
But it makes them look good at the time, both parties kick the bill Down the road
At least New Labour actually oversaw productivity growth and real wage growth. Real wages have stagnated for 14 years under the Tories rule.
Brown didn't create Osborne's Austerity it was a political choice
Both he and Cameron were small state low tax Tories
I was very much against PPI when he started using it but it was a John Major initiative that was finnaly put out of its misery in 2018 and was abused by the Cons as well
@@user-pd6pb2uq8rmoving capital spend into a different bucket stops slight of hand tricks like Sunak pulled with the 20 billion unfunded NI cut.
Using projected spend by cancelling HS2 is the best example then reallocating it to fix potholes in London
This is just discussing the IFS video.
Is Peston talking bollocks again?
From $15k to $45k that's the minimum range of profit returns every month its not a bad one for me..
As a beginner, it's essential for you to have a mentor to keep your accountable...
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Exit tax don’t let them run away 15:04
Steph, how can you bear it?
Economic activity doesn't create wealth Robert. Productivity creates wealth. Imagine 2 countries. Country A doubles the rate at which they buy and sell the same old stuff from one person to another. Country B makes twice as much stuff. Which Country has the most intense in wealth.
simple answer - copy the european central bank & change how interest in paid on bonds from Quantitative Easing round 1 (2008-11) & they'll free up £11 Bn a year. Suddenly the black hole is filled, with £30 Bn+ free to invest in green tech & housing
Thats not a simple awnser, doing this could cause the BOE unable to reduce its bond assets as the markets may not be willing to buy them if no intrest is paid. Its also a change that cant happen overnight and would likly take years.
@@jamesholt4449 It didnt take them years to print the money to bail out the bankers so why would it take years to change the interest rate rules? Central banks can do whatever they like, or whatever they are forced to do by govt.
@@jamesholt4449 BOE can gradually change its balance sheet by issuing new debt instruments, they could start doing it now.
If you’re going to move public debt reporting into more of an accounting basis then that’s probably a good thing.
However, if you want to deploy that argument you have to do so consistently and the (gargantuan) elephant in the room are public sector and state pension liabilities.
However you show it, even a degree of honesty would show that we’re broke. Until we can be straight with people about this we’ll never embark on a sustainable course to recovery.
So 1/3rd of our debt is held by the BOE due to QT/QE
the BOE also hold on deposit 480 billion in reserve from the banks which they pay interest on even though we printed most of it during the banking crisis
Reeve used to work at the BOE and is actually aware of not spooking the Markets and degrading gilts like Truss did as it adds to increased debt costs
Are we really broke or is the system loaded in favour of the banking / services sectors.
Reeve said clearly in her Mais lecture she was going to change the fiscal framework
Quote
Reeves highlighted various problems with the UK’s current fiscal rules and framework: excessively frequent fiscal events, a lack of protection for capital spending, short-termism, susceptibility to gaming and frequent rule changes.
The current rules allowed H unt to Rob capital spending projects to create the illusion of enough to pedal an unfunded 20 billion NI cut. The core proposals would make that impossible by ring fencing capital spend into a separate bucket
Labour always find a way to more quickly run out of other people's money.
Unlike the conservatives who borrowed 100% GDP you mean?
All parties do, that is why all parties borrow and add to the national debt
@@drinky1 unlike the Conservatives who ran debt to 100% GDP
Really, whilst you watch pesto n who works with David Cameron at national citizen service
..its just neoliberalism
Blame the Tories mate - left the country with the highest tax burden since WW2 and a debt to GDP of 100%. To compare, the Netherland's debt to GDP is 46%.
He does have a series of irritating mannerisms. Not least is his inclination to keep glancing to his left to what is apparently someone or something off screen but is not the camera. Don’t ask me to explain why it is irritating, but as Ricky Gervais would say, it is.
Found this a difficult watch. Not sure is was the misery of the topic or the droning voice of Robert 🤯
Labour, "Fiscal Rules" 😂😂😂😂.. Fiscal incontinence is baked in from the start.
Keynesian commentator, with annoying mannerisms 😛
Just introduce a capital gains tax charge on money leaving the country. That then discourages people from moving their assets abroad.
Well then you just disincentivise anyone with money from coming to the UK in the first place. And rich people will move abroad before the exit tax comes in.
AKA, we are creating a hell hole and we want to make sure you cannot escape this nightmare -
Any relation to the rest is politics podcast?