Not long to the budget. As the Government are asking us what we would cut (I know...it's a bit of PR in reality!); where would you reduce spending and what would you do differently?

Here's a few of mine:

1) Freeze all public pay; the new tax free allowance for the lower pay will, in effect, provide us all with a pay rise which will have a disproportionatly higher benefit for the lower paid
2) Put VAT up to 20%; the reason I think this will work is that many businesses will absorb the VAT and buy smarter...look at the number of tax rises on wine yet I can still buy a decent bottle for less than a fiver (or maybe my wine taste buds have been number down :)); however I do accept that this will increase 'black market' activity to avoid paying VAT
3) Means test child benefit; do the more wealthy really need it when the public finances are in tatters?
4) Ditto the above on the state pension
5) Simplyfy the tax system...child tax credits are a nightmare to sort out!
6) As soon as the market conditions are right, sell the shares in the banks and privitise the Post Office

Over to everyone else!

Well hang on - you need to tell us how much that would actually save. What you suggest might not cover the interest payments on the national debt.

Maybe you should of stood for election Steve?

Got to start somewhere!

Sadly I do not work in the treasury :(

Not long to the budget. As the Government are asking us what we would cut (I know...it's a bit of PR in reality!); where would you reduce spending and what would you do differently?

Here's a few of mine:

1) Freeze all public pay; the new tax free allowance for the lower pay will, in effect, provide us all with a pay rise which will have a disproportionatly higher benefit for the lower paid
2) Put VAT up to 20%; the reason I think this will work is that many businesses will absorb the VAT and buy smarter...look at the number of tax rises on wine yet I can still buy a decent bottle for less than a fiver (or maybe my wine taste buds have been number down :)); however I do accept that this will increase 'black market' activity to avoid paying VAT
3) Means test child benefit; do the more wealthy really need it when the public finances are in tatters?
4) Ditto the above on the state pension
5) Simplyfy the tax system...child tax credits are a nightmare to sort out!
6) As soon as the market conditions are right, sell the shares in the banks and privitise the Post Office

Over to everyone else!

1) The proposed £10k tax allowance doesn't benefit those folk not in work.
2) VAT is a regressive tax which disproportionately affects those on lower incomes.
3) Means testing child benefits would probably cost more to administer than continuing with universal benefits.
4) The state retirement pension is contributory-based throughout your working life. Presumeably you would make provision for repayment of contributions? Have you really thought this idea out?
5) What about strengthening collection from rich tax dodgers instead?
6) Osborne has proposed flogging off the government's shares in banks to Joe Public. (Remember Tell Sid - and how public utilities were off-loaded by the Tory Thatcher goverment at ridicuously cheap prices?)

Back to you!

How's is your comment about the tax allowance relevant to the idea of freezing public pay?

Re the 10k allowance though, good. Maybe that will encourage them to get a job, no one should ever be better off on benefits than working full time on the minimum wage. If they are then they're getting too much in benefits.

Agreed on your points 2, 3 & 4.

1) Freeze all public pay; +1

2) Put VAT up to 20%; +1
(though, to be fair, your wine/retail analogy falls a bit flat, once/if you know how supermarket buyers squeeze suppliers on prices & conditions to absorb most of the uplift). I don't believe it's a regressive tax: everybody pays the same rate/amount on the same goods/service, with full choice about which goods/services to buy. How is that not fair? EDIT - changed my stance, it is a regressive tax (that'll teach me to post based on indistinct knowledge of vocabulary used :D).

3) Freeze benefit levels
4) Cull means-tested child non-essential benefits

3+4?) Cull all benefits and replace with a single "State Stipend" worked out from a crib list (with kid? tick, unemployed? tick, disabled? tick, etc.) The worse circumstances a person is in, the higher the stipend (still worked out to incentivise rather than replace earning a living, except for worst cases, which should amount to no more than full-time job on minimum wage). With review at quarterly interval. No change really from current system (save as to freeze, and hopefully reduction in total amount as well), but hopefully easier to manage and therefore needing less bodies to do so.

5) Simplify the tax system; +1 and cull all special interest/special group measures (otained by lobbyists) in the tax book.
Same as above for benefits? "One tax does all", level worked out from crib sheet.

6a) As soon as the market conditions are right, sell the shares in the banks; -1 Possibly still the easiest way for the government to keep a lid on and control over bankers: owning them rather than only legislating (one does not exclude the other of course). If and when some shares should be sold, then only at a level at which the remaining amount of shares owned by the Gvt still gives them enough pull in the boardroom.

6b) and privatise the Post Office; 0 In principle yes, since it is/should be run like a private concern, but I'm not too sure this is a good idea for state/practical/strategic reasons, but have yet to think it through.

I think that will be a drop in the ocean.

just put all the polititions on minimum wage that should save a few quid and it not as if they need the money and no one would go into it then unless it was there real passion haha............

just put all the polititions on minimum wage that should save a few quid and it not as if they need the money and no one would go into it then unless it was there real passion haha............

Maybe you'd care to work out exactly how much that would save?

I reckon that it's in the region of <10 million/annum. Now that really is a drop in the bucket.

Regarding VAT and regressive taxes, it is, there's no real argument about that. A regressive tax affects the poor more than the rich, since the poor have a lower level of disposable income a higher portion is by necessity spent on certain things. Increasing tax on those things (food, fuel, a roof) is regressive.

Wouldn't disagree a lot with Steve's original proposals but would add a few more off the top:
1) Abolish NIC; it's an employment tax and should be merged into basic rate income tax - employing anyone has enough hazards without this disincentive.
2) Include capital gains within income and tax "non-business" gains at income tax rates. Entrepreneurs relief should be extended to leave all business gains at 10%.
3) Tax credits etc need sorting out! At present to pay a modestly paid employee another £1 can cost approx (20% IT+11%EesNI+12.8%ErsNI+39%lost Tax credit)less no corporation tax relief in some circumstances. ie. Would you want to earn a bonus costing the employer £1 and receive less
27p?

yes it was a joke cyclone!!!!!!!!!!

But Steve, if you privatize the Post Office it'll mean that only towns and the very largest villages will end up having a PO. This will result in elderly people in rural communities becoming even more isolated and lonely. Should we really expect 70 and 80 year olds to catch a bus to post letters and parcels?

Besides pubs, the post office is the next most important social hub, especially in rural areas.

But Steve, if you privatize the Post Office it'll mean that only towns and the very largest villages will end up having a PO. This will result in elderly people in rural communities becoming even more isolated and lonely. Should we really expect 70 and 80 year olds to catch a bus to post letters and parcels?

Besides pubs, the post office is the next most important social hub, especially in rural areas.

Worse, that assumes there is a bus available. For many rural communities there is (supposed to be/ when running/ when it can be bothered to turn up) one bus in the morning and one in the evening...

And no I dont really have a solution to the debt. It's going to be painful and i think some things mentioned are reasonable. In the end however only growing our economy and improving the balance of trade is going to make a big impact... though of course we need to do as much as we can before that starts to help, so my few thoughts.

1) Simplify the tax system. Make it kick in later so people arent in the ridiculous situation of being taxed and yet receiving Income Support. Decrease the loopholes, though NO retrospective changes should be changed and a Bill banning them should be introduced. All this should amongst other things decrease the number of civil servants required to oversee the system. I say should for the civil service is very good at looking after its own.
2) Scrap many targets, lists etc. Maintain inspections though. Again there should be a few more civil service posts gone.
3) No more 'make work' posts in the civil service (and worryingly I am an ex civil servant and still know a number...)
4) Further decentralise the civil service. (Move out from London and if the price is right sell prime real estate)
5) Tax credits etc abolished in the radical overhaul of the tax system.
6) I dont like it but people are going to HAVE to work longer.
7) Thats about all I got so far...

Its going to be brutal. We have no option. But at the same time we need to incentivise work as much as is possible and we have to try and protect what income generation we already have. It's a fine balancing act and I wouldnt want to be the Chancellor...

Well hang on - you need to tell us how much that would actually save. What you suggest might not cover the interest payments on the national debt.

I gave his some thought last night and you are right, I suspect that the cost savings I have suggested might save the 'odd' 10 billion...it just goes to show how bad we've allowed our public finances to get into...we've had the party...now its the hangover :gag:

Dyson, much as I'm not particularly fond of the guy, made a good case re. incentivising innovation this morning.

"It" should not just be about cutting since, as libertarian posted above, most of the solution can be expected to stem from increasing real revenue (added value) and, considering the Chinese and Indians aren't that far behind in tech terms these days, the UK really needs to pull its finger out about building innovation-based competitive advantages.

That means incentivising sciences and engineering within the teaching context, and incentivising R&D-driven expenditure and revenue within the private sector. So, at the very least, Gvt measures and legislation about cuts should spare these particular domains.

Regarding VAT and regressive taxes, it is, there's no real argument about that. A regressive tax affects the poor more than the rich, since the poor have a lower level of disposable income a higher portion is by necessity spent on certain things. Increasing tax on those things (food, fuel, a roof) is regressive.Yes of course, going by the textbook definition. However, many basic products and services (essentials: food, child clothing, health, utilities...) are zero- or reduced-rated, which (IMHO) makes the argument somewhat redundant.

If someone has an alternative (considering what revenue VAT brings in to the Gvt), let's hear it, this a thread for it ;)

not adult clothing, and not all food items, not mobile phones and not a whole host of things that everyone spends money on.
I didn't say I had an alternative, I just said that it was regressive.

Dyson,

"That means incentivising sciences and engineering within the teaching context, and incentivising R&D-driven expenditure and revenue within the private sector. So, at the very least, Gvt measures and legislation about cuts should spare these particular domains. "

Steady on, that sounds like a moment of common sense. :) To be fair there is money around for this but it is so incredibly difficult to get hold of that it's no more than the Cinderella of government spend.

Long lasting tax breaks would be more use to be honest. Getting rid of taper relief was a blow for many.

I didn't say I had an alternative, I just said that it was regressive.I did recant, and agree that it was regressive. I don't have any issue admitting when I'm wrong :)
not adult clothing, and not all food items, not mobile phones and not a whole host of things that everyone spends money on.Save as to adult clothing (and -as with everything in life- there's a market offer for very many discrete portions of the entire spectrum of disposable income, the lowest pricing level of which again makes the VAT uplift pretty much redudant), I did say essentials, not 'most things that everyone spends money on' ;) (in what way is humous, a mobile phone, a Karen Millen top, or an LCD TV, etc. 'essential'?)

Steady on, that sounds like a moment of common sense. :) To be fair there is money around for this but it is so incredibly difficult to get hold of that it's no more than the Cinderella of government spend.
Long lasting tax breaks would be more use to be honest.You want to know how Ireland got to be a Celtic Tiger for so long? How it managed to attract all that top-level high-tech localisation/investment from the US and elsewhere over and above the UK/Germany/others? Don't look much further than their patent royalty tax exemption. They've been getting it in the neck from the EU ever since, with every other Commission deeming it an 'anti-competitive' measure, but I've yet to see the Irish getting rid of the exemption, never mind even thinking about it (matter of fact, they enlarged it in 2006) ;)

A tax doesn't have to affect essentials in order to be regressive, it just has to affect the things that nearly everybody buys and thus have more impact on those with lower level of discretionary spending. I don't want to labour the point though if we agree that it's regressive.

Worse, that assumes there is a bus available.

Quite. It's the difference between the cost of something and its value.

Rent out every library to social enterprises. Put a cafe in every library run by the social enterprise. They would manage the budgets etc. All profits put into community literacy schemes. Cafe could open up at night to act as youth drop in centre.

Agree with privatise the post office.

We've got to stop with the 'what about the little old lady who wants to send a postcard to enter 'The Peoples Friend' competition'. It's time to be brutal and think like a business and stop paying for stuff that does not justify itself.

I think brutal is the wrong term; we have to live within our means and agree the priorities.

My own view is you have to create the wealth to spend on the things you want to do first, problem is, for the past few years we've been spending what we wanted to do before we could afford it!

I think brutal is the wrong term; we have to live within our means and agree the priorities.

My own view is you have to create the wealth to spend on the things you want to do first, problem is, for the past few years we've been spending what we wanted to do before we could afford it!

The problem is we spend money on things which may bring a benefit, but this benefit is not proportional to the money spent.

A library may keep a little old lady in books for a week, but the amount spent on books and staff does not give value for money. It is not keeping youth off the street, not reducing crime etc.

A library does not bring money back in. Look at all the libraries facilities up and down the UK - stick a cafe in there and they will make money.

Now if the libraries were sold off there would be protests galore - we need to stand up and face the facts. As a country we are going to struggle because people have been spoon fed for too long and are too set in their ways. We need to be brutal to stand up to them and say no and that this is how it is and how it really should have been from the start.

Get rid of the penpushers in the N.H.S.. There are more penpushers than doctors and nurses, that cant be right.
Ban overseas aid, we should look after our own people first.

Who would push the pens if they weren't any penpushers? Doctors and nurses?

Ban overseas aid, we should look after our own people first.

And pray tell who exactly do you think is funding our multi billion pound deficit? If other countries banned oversees aid we'd be on our knees.

Debt and aid are completely different things. The UK doesn't receive any foreign aid, and most of the debt it has is not to other governments.

Get rid of the penpushers in the N.H.S.. There are more penpushers than doctors and nurses, that cant be right.
Ban overseas aid, we should look after our own people first.

What about all the lost contracts that the overseas aid buys?

Shh, you can't say that. Anyone would think that BAe had Blair's permission to sell stuff to Saudi.

Who would push the pens if they weren't any penpushers? Doctors and nurses?

there a far two many though, every ward seems to have a ward manager now who has no nursing experience at all. you hardly ever see a matron or if you do they cover about half a dozen wards

there a far two many though, every ward seems to have a ward manager now who has no nursing experience at all. you hardly ever see a matron or if you do they cover about half a dozen wards

I do not know of any hospital wards that have a ward manager that hasn't any nursing experience, all the ward managers I know are senior sisters/charge nurses.

Edit:

Also there are a few matrons employed in Sheffield hospitals, they wear the spotted dark blue dresses. Obviously there isn't a lot of them as it's a very senior position.

Debt and aid are completely different things. The UK doesn't receive any foreign aid, and most of the debt it has is not to other governments.

It is a sobering thought that most of UK PLC (i.e. the public sector) is funded by overseas individuals of whom we have no idea who they are!

Not long to the budget. As the Government are asking us what we would cut (I know...it's a bit of PR in reality!); where would you reduce spending and what would you do differently?

Here's a few of mine:

1) Freeze all public pay; the new tax free allowance for the lower pay will, in effect, provide us all with a pay rise which will have a disproportionatly higher benefit for the lower paid
2) Put VAT up to 20%; the reason I think this will work is that many businesses will absorb the VAT and buy smarter...look at the number of tax rises on wine yet I can still buy a decent bottle for less than a fiver (or maybe my wine taste buds have been number down :)); however I do accept that this will increase 'black market' activity to avoid paying VAT
3) Means test child benefit; do the more wealthy really need it when the public finances are in tatters?
4) Ditto the above on the state pension
5) Simplyfy the tax system...child tax credits are a nightmare to sort out!
6) As soon as the market conditions are right, sell the shares in the banks and privitise the Post Office

Over to everyone else!
Still wine and made-wine: Exceeding 5.5% - not exceeding 15% abv.
Rate of duty = £225 per hectolitre

A 70cl 12% bottle. (0.7/100)*225= £1.57ish of duty, then presumably VAT on top.

Why has no one mentioned stopping the payment MP's get when they leave what is it now £68k, well when i left my job i got nice knowing you so why do they get so much. Do they really need it to help them get back into real life?

It makes me laugh! If the tories had said during the election campaign

"we are going to scrap HIPS, freeze council tax next year, and no NI for new staff for 12 months for small businesses"

... they'd have won hands down!

I'd cut defence, definitely. We have no reason to be fighting a war right now. Also it gets rid of an easy job for idiots (getting shot at).
I'm not saying there aren't clever people in the army - the technicians, electricians and others are fantastic - but they'd be much better use at home right now.