Paul Johnson
@PJTheEconomist
Followers
68K
Following
464
Media
900
Statuses
5K
Director IFS. Author Follow the Money - "gripping and horrifying, witty and brilliant" (The Times). "Thinking person's (fiscal) crumpet" (The Times)
Joined March 2015
Oh for goodness sake. What is the possible justification for cutting income tax rate while raising NI rate?. Drives further wedge between taxation of unearned income and earned income. Yet again benefits pensioners and those living off rents at expense of workers.
406
3K
10K
Not much of a boast really to say that school spending per pupil will return to 2010 levels. A decade and a half without growth is quite a thing.
78
2K
7K
Worth repeating. Take all the tax changes coming in over next few years and:. If your income is < £155k, you lose. If your income is > £155k you win. If your income > £1m you gain more than £40,000.
Despite today's tax cuts middle earners are still set to lose as a result of tax changes over next years. The freezing of allowances and thresholds is still a big tax increase. Only those on over £155,000 will pay less tax overall. The very rich will pay tens of thousands less.
189
4K
7K
Simply staggering numbers in OBR report. Real Household Disposable Income per person to fall more than 7% over next two years. Biggest fall on record. Taking incomes down to 2013 levels.
327
4K
7K
£45 billion of tax cuts. This is biggest tax cutting event since 1972. Barber's "dash for growth" then ended in disaster. That Budget is now known as the worst of modern times. Genuinely, I hope this one works very much better.
326
2K
6K
Recall that the government has spent months saying it can't find any money to prevent nurses and teachers getting very big pay cuts. He just found £6 billion to cut fuel duties. That's a choice.
239
2K
5K
The government has an official position on fiscal effects of Brexit. This is it.
171
6K
5K
From a fiscal point of view important to remember cut to 45p rate was just about smallest part of the "mini budget". What was a £45bn tax cutting package is now a £43bn package. This U turn has, in itself, essentially no effect on fiscal sustainability.
151
1K
4K
Staggering statistics. Real average weekly earnings are same today as in November 2005. A completely unprecedented period with no earnings growth. Hard to compare but likely this has not happened over any comparable period since Napoleonic wars.
Long view on today's labour market stats is price-adjusted average pay is down £35/wk since Feb 2008. A drop from £532 to £497 over 182 months' of data. Few would have guessed possible (without a revolution!) -- except those who knew the US horror story .
198
2K
4K
I don't think I have ever read anything so absurd in @FT Why publish it? The idea that VAT somehow creates a trade barrier, and is equivalent to a 25% tariff, is self evidently utter nonsense.
297
661
4K
Extra spending can't be funded by Brexit dividend. 1) Govt has accepted Brexit will *weaken* public finances by £15bn pa. 2) Financial settlement with EU plus commitments to replace EU funding already uses up all of our EU contributions in 2022. There is no Brexit dividend.
171
3K
3K
Getting rid of winter fuel payment. That is a saving of c£1.5bn. A sensible choice.
3K
279
3K
All that extra money announced by govt last week not quite what it seems. The "Rooseveltian" additional £5.5bn of capital spending represents an increase of precisely zero this year on Budget plans. Is a reallocation from one set of projects to another.
96
3K
3K
Buckingham Palace, valued at around £1bn, sits in band H and is charged £1,828 by Westminster City Council, less than an average three-bedroom semi in Blackpool. 46% of households in England will receive a bigger council-tax bill than the Palace.
@Occasional70366 @PJTheEconomist Look at the council tax for Buckingham Palace and the council tax for a 3 bed semi in Blackpool.
131
1K
3K
Sure Start worked. It had big long term effects on the educational achievement of poor children. Its demise is a study in policy failure - over centralisation, over extension, poor data, "not invented here syndrome".
74
871
2K
Statement and chart are literally true. But do they reveal the truth? No. Economy grew strongly because it collapsed so much in 2020. Only interesting comparisons are with pre-covid levels. We've done less well than most of G7 since then.
New GDP figures released this morning show the UK economy has reported the strongest growth since the Second World War.
88
1K
2K
Rachel Reeves says £6.4bn overspend on asylum this year. Huge number. Does genuinely appear to have been unfunded.
150
751
2K
This is actually awful. Yet more years of real incomes barely growing. High inflation, rising taxes, poor growth keeping living standards virtually stagnant for another half a decade.
Over the next 5 years real household disposable income is expected to grow by 0.8% per year, well below the historical average. But growth had been weak in the decade before COVID, meaning average incomes are now expected to be 28% (£9,000 per capita) below the pre-2008 trend.
110
1K
2K
The idea that immigrants take jobs from natives is just a fallacy
151
2K
2K
One OBR chart not mentioned by Chancellor. Trade with EU sharply down, and consistent they say with their projection that reduced trade post Brexit would reduce productivity (hence living standards etc) by 4%. Which is bigger than expected long run effect of pandemic
48
1K
2K
Remarkable quote from OBR document. Biggest fall in living standards since records began in 1950s
36
1K
2K
No extra money for health, schools or other public services despite huge increase in inflation. Likely implies big real pay cuts for most public sector workers. E.g. govt evidence to teacher review body asked for just 3% pay rise for most teachers as inflation averages over 7%.
63
759
2K
I have long said stamp duty is among our worst taxes. So what do we have? An increase for those buying second properties. You might think fine: a tax on rich people and landlords. But those looking to rent will pay part of the cost as fewer properties made available. I despair. .
187
348
2K
Every time I see this chart I am amazed. ONE in SIX 55-64 year olds owns a second property. It's the flipside of low ownership rates among the young - they are renting from their parents' generation. The allocation of housing, not just the quantity, matters.
Multiple property ownership is becoming more common among older people than in the past, and these properties tend to be held onto throughout retirement (5/6)
196
1K
2K
Two facts re winter fuel allowance:. 1) At £200 it's same in cash terms as in 2000 - a real terms cut of 45%. Slow drift into irrelevance. 2) Pensioners much better off than they were then - poverty rate down from 26% to 16%, median income up 38% (only up 19% for non-pensioners).
478
465
2K
For goodness sake. Despite big tax rises overall chancellor has done it again. Fuel duty frozen and "temporary" 5p cut kept. This government is supposed to care about climate change. And I'm willing to bet fiscal numbers assume increases into the future. How much longer?.
161
366
2K
Those in born in 1980s have only half the wealth by age 31 of those born in 1970s. Remarkable reversal.
147
2K
2K
A pretty good reading of my feelings when I spoke to @Steven_Swinford about this.
.@PJTheEconomist does not often get angry. But you can feel the steam coming out of his ears in his quote to @Steven_Swinford about @RishiSunak’s plan to cut the basic rate of income tax
25
546
2K
The big omission from this statement was anything for those subsisting on means tested benefits. They will be facing cost of living increases of probably 10% but their benefits will rise by just 3.1%. And cut compared to last year if you account for withdrawal of £20 UC uplift.
68
744
1K
Oh dear, oh dear. The old "we may open the books and discover the situation is even worse. ". The books are wide open, fully transparent. That really won't wash.
207
614
2K
Inflation overall is 9%. But our analysis suggests that the poorest are facing an inflation rate or around 11%. That’s because they spend a large fraction of their budget on energy and food. Their benefits of course rose by just 3.1%.
NEW: Average inflation reached 9% in the year to April, but the poorest households faced inflation rates of 10.9%. This is 3 percentage points higher than inflation rates for the richest decile. [THREAD: 1/4]
40
1K
1K
Still have to pinch myself when I see this. Biggest cuts in funding per pupil have been in deprived schools outside London, precisely those which are already struggling the most.
📊 #IFSSatStat: The new National Funding Formula has boosted funding for the most deprived fifth of schools the least (by less than 1%) since 2017. This follows bigger cuts for schools in deprived areas during the 2010s, esp. outside London, where educational outcomes are worst.
57
1K
1K
Where is the detail? This was a huge fiscal announcement with almost none of the detail mentioned to parliament and as far as I can see still no document published.
101
346
1K
Genuinely I don’t get politicians. This was obviously a campaign with little merit. How can serious people hoping for high office support knowing they can’t deliver? Similar with all three main parties at different times on student finance, and on tax and spend in last election.
Chancellor campaigned alongside her mother for Waspi compensation . Read more🔗.
110
225
1K
Economic "orthodoxy" is not some strange belief system. It's an encapsulation of the knowledge drawn from decades of evidence based on experience of countries around the world. It needs testing and challenging, but experience tells us that simply dismissing it is dangerous indeed.
65
293
1K
Abandoning IR35 changes. Hurrah. A tax evaders charter costed at £2 billion is not going to happen.
186
173
1K
Disappointing to hear the chancellor again conclude by claiming to be cutting taxes. He emphatically is not. He is raising them, and to historically high levels. I think that is the right thing to do. But his tax plan is to raise taxes not, as he keeps saying, to cut them.
54
399
1K
Your regular reminder that, whatever its merits as a policy, abolishing tuition fees is of no help to the half of young people who don't attend university, is of no help to low earning graduates, and is a big giveaway to the highest earnings graduates.
The highest-earning graduates would benefit most from Labour’s policy of scrapping fees and bringing back maintenance grants. Loan repayments for the top third would fall by around £50k. Actual loan repayments for low-earning graduates would be almost completely unaffected.
351
763
1K
NB - chancellor just announced a long term cash freeze in investment spending. That's a significant real cut of course. We already have public sector investment well below that in most comparable countries. That is not good for growth.
27
593
1K
You cannot understand poverty or inequality in the UK without understanding housing costs and what has been happening to them. They are a much bigger fraction of the budgets of the poor than the better off and have been rising far faster for the poor.
In 1968 housing costs made up 9% of average incomes for the poorest households and 4% for the richest. By 2021 this has gone up to 21% and 6% respectively. That is, housing costs now make up 3.5x as much of the budgets of the poor as of the rich. 🧵on our new @TheIFS report👇
65
580
1K
Despite today's tax cuts middle earners are still set to lose as a result of tax changes over next years. The freezing of allowances and thresholds is still a big tax increase. Only those on over £155,000 will pay less tax overall. The very rich will pay tens of thousands less.
Today’s measures mean that the richest tenth of households, who were set to lose around £3,500 a year (3%) on average by 2025-26 under Johnson and Sunak’s plans, will now gain around £700 a year (1%) on average. #minibudget
37
758
1K
Employer NI up by 1.2 to 15%. Threshold cut from £9100 pa to £5000. That is a £25bn tax rise, proportionally hitting harder those employing lower paid workers. Probably three quarters or so of the increase will flow through to lower pay.
117
510
1K
Tax and spending promises by leadership candidates: . - Raab: £30bn+ tax cut;. - Hunt: £20bn+ more spending on defence;. - Johnson: £10bn tax cut;. - Gove: abolish VAT;.Me in @thetimes on lack of seriousness. What are their actual fiscal strategies?.
155
635
1K
Spending reviews every two years with a three year planning horizon. Makes a lot of sense. Very much what happened under Gordon Brown.
108
181
1K
Remarkable fact:. Average teacher pay is about the same today in real terms as it was in 2001. Average pay across the economy is about 18% higher than in 2001.
Average teacher pay is 6% lower in real terms than in 2010, and about the same level in real terms as in 2001. Meanwhile, earnings across the economy are 6% higher than in 2010. This may help explain some of the teacher recruitment and retention problems. [6/8]
46
665
1K
Another scandal that govts of all colours have lacked courage to tackle. Council tax is outdated, regressive, and grossly unfair to those living in poorer regions and in cheaper properties. It needs updating and making proportional to current value .
201
346
1K
New piece on the NHS Brexit dividend. It does not exist. In fact we would need to spend £1bn a year more just to compensate NHS staff for the higher prices already seen since the referendum.
61
1K
1K
Again claiming increase in minimum wage is worth £1000 to a full time worker. Worth about £700 after tax and NI, and less than £300 to anyone on Universal Credit.
19
532
1K
Economy - and hence our living standards - is 2.5-3% (£55-£66bn) smaller than it would have been without Brexit vote. We have lost out on 3 years of global economic growth. Citi analysis in @TheIFS Green Budget published today
49
979
1K
Important context from @DanNeidle So much special pleading and motivated reasoning when favourable tax treatment is reduced. Makes rational reform so hard. And why govts should think very hard before introducing any tax breaks. Once there they are very hard to get rid of.
Lots of over-the-top coverage right now about the £1m cap on inheritance tax agricultural property relief (APR). Quick thread:.
64
268
1K
Seriously? I know this was in the Red Book. And I'm no expert on rules covering what government depts can/cannot say. But at best this is dubious. And that's being generous. Increasing NI was the central tax raising measure in the Budget. What is the point in pushing this line?.
94
310
1K
This is what policy failure looks like.
I just re-discovered this chart, showing how the number of home insulation projects delivered through government schemes fell off a cliff after 2013. From 1.3m loft insulations per year, to fewer than 100,000. With hindsight that feels. sub-optimal
24
398
936
“UK is only G7 economy not to have re-attained its pre-pandemic level by Q2 2022”.
.@Citibank's Chief UK Economist Benjamin Nabarro presents on the economic outlook for the UK in our #IFSGreenBudget launch. Watch live here>
41
591
891
Obviously not true in any seriouse sense. £1,000 gross not net. Anyone on UC will lose much more than half of that. Lots of people on UC are not on NLW. Etc etc.
Treasury confirms that national living wage will rise to £9.50/hr and says this will be £1,000 annual boost for a full-time worker - almost exactly replacing the impact of the universal credit uplift ending. .
16
407
913
The 6 year freeze to income tax and NI thresholds really is a staggeringly big tax increase. It’s a key part of why taxes are rising to highest level ever. That such tax rises are needed reflects v high interest payments, poor growth and increasing spending pressures.
The six year freeze to income tax and national insurance thresholds is now set to raise a colossal £52 billion in 2027/28. To give a sense of scale, that's equivalent to 6p on the basic and higher rate of income tax, or increasing the main rate of VAT from 20% to 26%.
68
486
904
Health is taking a bigger and bigger share of public service spending up from 23% in 2000 to 29% in 2010 and planned to hit 38% by 2023. At some point this is going to require higher taxes. We can’t just keep squeezing everything else.
162
491
873
Bluntly, if we want to reduce immigration we need to pay more for social care. If we don't want to pay more for social care we will continue to rely on immigrants.
Both the Conservative and Labour parties have indicated a desire to bring down net migration. But substantially cutting migration could reduce the size of the workforce in key sectors. Workers from non-EU countries were 16% of the adult social care workforce in 2022–23. [12/14]
224
298
811
OBR: . "The rise in inflation to a 40-year high this year is expected to reduce real household disposable incomes (RHDI) on a per-person basis by 2.2 per cent in 2022-23 the biggest fall in living standards in any single financial year since ONS records began in 1956-57".
22
504
801
Pay for highest paid/most skilled public sector workers (doctors, experienced teachers etc) has been cut drastically. Public sector diverging ever further from private sector. Papering over the cracks by bringing in more from abroad. Not sustainable.
55
373
790
That, in a sentence, is what happened yesterday.
@PJTheEconomist “How did Mr Hunt afford tax cuts when real economic forecasts got no better? He banked additional revenue from higher inflation, and pencilled in harsher cuts to public spending.”
16
404
770
This is just astonishing. A doubling and more of the numbers in every age group moving on to Personal Indepence Payment (PIP - our main disability benefit) over just one year. This is NOT a catch up from people not claiming during Covid, it is a huge increase in claims.
Here we zoom in on the increase in that yellow line. This is the number of new claims by single year of age in July 21 & 22. Huge increase at every age, and in mental and physical health. Mental/physical split little changed - and this is true more generally across conditions.
43
366
804
Not that much to be Tiggerish about here. Growth forecasts dreadful compared with what we thought in March 2016, dreadful by historical standards and dreadful compared with most of the rest of the world.
72
957
756
On a per person basis it’s considerably worse than the headline figures. This was a period of rapid population growth. On a per person basis GDP has been falling consistently for two years. Not sure calling this a “mild” or “technical” recession quite gets at the scale.
Economy in Q4 2023 confirmed at £566.6 billion… (ABMI official measure). smaller than it was in Q1 2021 (£567bn. no net growth over two years, down 0.1%), and . Smaller than in Q4 2022, when the PM and Chancellor arrived in Downing Street (£568bn … down 0.3%).
19
360
738
Just listened to the PM's statement. Can't quite believe nothing there about the cost. This is one of the biggest announcements in peacetime history, and apparently we'll be told how much in a few weeks. Not a complaint about the policy. But some transparency would be welcome.
57
217
762
Not surprising, but so depressing. Govt know perfectly well that council tax is out of date, regressive, inequitable, inefficient, gums up the housing market, and is anti "levelling up". Total lack of courage to do anything about it. Also, note Opposition silence on this.
🏠New: Government will not reform council tax. Response to Levelling Up Committee is pretty clear on changing unfair bands:. ⛔️ Too expensive to do.⛔️ Likely to hit pensioners
59
250
718
Govt playing silly games with numbers. Extra £13.4bn for defence must be against counterfactual of no cash increase, not of constant % of GDP. While £5.3bn cut in aid compares 0.5% GDP to 0.3% GDP. Thats how a £5.3bn cut “pays for”£13.4bn increase. Totally inconsistent figures.
Keir Starmer's Defence Spending announcement. Will raise from 2.3 to 2.5% by 2027. He says this means £13.4bn a year more. Funded in part by reducing aid budget from 0.5% from to 0.3 % in 2027. In 25/26, the aid budget was to be £13.7 billion. The reduction means £8bn.
49
332
820
There isn’t £40bn a year to be had from reducing interest paid on reserves at Bank of England. Not even half that. Can’t “fund” tens of billions of tax cuts like this. We don’t want a rerun of September 2022.
Reform UK propose large permanent personal tax cuts could be paid for by reducing the interest paid on Bank reserves. It is a complex area but is unlikely to raise even half the £40bn annually that has been suggested, and only in the short term. @PJTheEconomist's response ⬇️
24
319
686
Try as hard as we can, given plausible forecasts, we can’t see how to get public finances on a sustainable path without big, painful spending cuts or a reversal of £43bn tax cuts just announced. Chancellor has a big job to reassure markets his mini budget spooked so badly.
NEW: Getting government debt falling in the medium term with a weaker economy and without cancelling tax cuts could force @KwasiKwarteng into big and painful spending cuts. Read our #IFSGreenBudget findings, with @Citibank and funded by @NuffieldFound>
81
339
670
Fundamentally important bit of economics. Whatever the benefits of any regulation the cost of employing people to enforce and comply is just that, a cost, to be set against any benefits. Too often see people arguing such job creation is a benefit when it is the exact reverse.
An underrated cost of regulation is the sheer number of smart people who work on zero-sum activities like impact assessments and other compliance documents. Freeing these people up to do other things is a benefit, not a cost, of deregulation.
61
167
807
I still struggle to get my head round these statistics. One in seven of those around the age of 70 don’t just own their own home, but own a second home as well.
85% of the #PlatinumJubilee generation are homeowners, meaning that most have benefitted from the house price boom that occurred during their working lives. 1 in 7 of them own a second home. [5/8]
53
195
686
OBR pointing out UK has moved "from near the top of the G7 growth league table to near the bottom"
57
882
661
This is not a complaint about policy. It is sensible to reallocate money especially at present time. It is a complaint about lack of clarity and transparency. It should not take us @theifs a week to work out what is going on. In part mea culpa, but really more transparency please.
27
181
656
Sad thing is to a large extent this is the path we chose, not an inevitability. Brexit, yes. Also cutting capital spending in 2010s, cutting education, failing to reform planning or tax, failure of housing policy, topped off by years of damaging political dysfunction.
Just to put things into perspective. If the UK economy had grown at the same rate after 2007 as it had in previous decades,. every person in Britain would be £10,600 a year better off on average. Economic growth matters. ENDS.
32
220
656
Following Sam is very bad for my blood pressure, but important. Day after day he reports on the way in which schemes for housing, infrastructure and business are blocked. If we want to get better off as a country, and give younger generations a chance, we need to change this.
Almost every problem in Britain today, from sky-high energy bills and rents to sluggish growth and not enough money for public services, can be linked to a single cause: Britain has stopped building. Britain Remade has a plan to change that. 🧵
25
124
698
This is the first Budget I can remember in which there have been NO major announcements that weren't pre-briefed. Tell me if I'm wrong but I think we knew every major change before Mr Hunt stood up.
57
118
666
I don’t want to be too grumpy. But there really are trade offs here. There is a limit to how far you can increase wages by government fiat. There was a reason for a lower minimum wage wage for the young. Making it more expensive to employ young and low paid is not win win.
This is my Plan for Change in action.
54
125
763
Private school fees have risen 20% in real terms since 2010 and 55% since 2003. Numbers privately educated have been pretty constant that whole time. Removing tax exemptions likely to have only small effects on numbers. Net benefit to public finances likely to be £1.3-1.5bn p.a.
NEW: How much revenue would be raised from removing tax exemptions from UK private schools?. Our new report by @lukesibieta, funded by @NuffieldFound, calculates the net gain to the public finances from @UKLabour’s proposed policy:. [THREAD: 1/11]
63
200
649
Bit of a rant today I'm afraid. Rage at cutting winter fuel allowance, yet binning social care reform was infinitely bigger choice. Tory candidates say they want to reduce state, no ideas how. Govt goes on about £22bn "black hole" as if a surprise. Time to get serious. Please.
📰 It’s time to be honest about the funding of social care. The fury about ending the winter fuel allowance is a diversion from a much more important issue, @PJTheEconomist in @thetimes today.
54
174
675
Below is from Conservative release yesterday. Can anyone explain how this can be right? The reality is that the personal allowance for pensioners has been cut by c.11% since 2010/11. My guess is they forgot there used to be a higher allowance for pensioners which they abolished
45
340
626
Public spending per head in Scotland is c.30% higher than in England. Almost entirely paid for by transfers of revenue from England. SNP, and other Scottish parties, promised further big increases in spending, but said nothing about where the money would come from.
📰 “Where were all the parties intending to get the money from to pay for all these goodies?”. @PJTheEconomist in @thetimes this morning on the absence of costed promises in the Scottish elections. Read here (£) >
124
333
680
Ben Nabarro “Total Uk trade 25 to 30% below its pre Brexit trend”. Especially big loss of high value professional service exports to EU. This is a big drag on the economy.
37
359
612
This is what has happened to yields on 10 year UK gilts today. This scale of movement so fast is highly unusual. Looks like markets are a little spooked by scale of fiscal giveaway
28
260
600
Reforms to adult social care charging not happening. I presume this is the end of the "Dilnot" reforms which would have meant a cap on what people have to pay. A dreadful shame. Another episode in generational failures to fund and reform social care.
31
207
641
Rather than scrapping IHT we urgently need to reform it. It is genuinely unfair. The very wealthy pay an average rate half, or less, that paid by the moderately wealthy. If all you leave is the family house it's hard to avoid. If you have millions it is absurdly easy to avoid.
Yes the big problem this country has is that the wealthiest 4% of families don't have enough money. Slow handclap.
37
190
603
Extra NHS funding at 3.4% p.a. means rises over next 5 years higher than over last 8, but still below long run average. Extra £20bn means higher borrowing or higher taxes. Former incompatible with manifesto commitment. Means health spending accelerating as % of total spending
36
751
595
Inheritance tax should be the most progressive of taxes. But the wealthy have become so adept at avoiding it that it now imposes a higher burden on middle class estates than on the very wealthy. It's time to act. Me in @thetimes (chart from OTS)
68
287
632
OBR has downgraded forecast of household income growth due in part to a "substantial part of the employer NICs increase being passed onto real wages". To be clear govt HAD to increase income tax, NI or VAT. But to suggest this doesn't impact people's incomes is ludicrous.
60
209
666
Given pressures on public spending and borrowing those £20bn in NI cuts never looked like good economics.
NEW: £20bn budget “black hole” is the same size as Rishi Sunak's pre-election tax cuts, leading economist says. @PJTheEconomist: “If those cuts were implemented in the knowledge that there was this kind of hole, that is not good policy to put it mildly”.
41
196
583
Everyone would like lower taxes. But need to be clear about consequences. Short run and long run issues. In short run OBR did say £30bn headroom against fiscal target. But that assumes spending rises only at rate set out in September when inflation expected to hit just 4%.
82
213
592
This from OFQUAL report is pretty striking. Big boost for private schools in A level grades awarded. FE and 6th form colleges seem to have lost out. Presumably because more weight given to teacher predictions in small 6th forms. Not obviously fair.
Looks like sixth form and FE colleges have particularly lost out in the standardization process for this year's A Level results. Private schools reaping the benefits with a huge increase in grade A and above.
53
510
597
Quite a chart. Scottish govt has implemented over £500m of income tax increases (equivalent to >£5bn in UK terms) .These have netted *nothing* in additional revenues relative to no devolution. Scottish incomes have risen more slowly, and income tax base has shrunk, relative to UK.
🚨 Three important (but so far little commented upon) nuggets from today's updated @scotfisccomm forecasts published alongside #scottishbudget. 1⃣ The continuing poor underlying performance of Scottish Income Tax revenues, driven by weaker employment and pay growth. [1/6]
39
335
647
All our analysis of todays not-so-mini budget is here
36
252
566
If Bank of England is right and inflation hits 13% in October then poorer households will experience inflation of c.18%. That's because they spend such a large fraction of their budgets on energy and food, prices of which are rising so fast. 18%.
21
345
571
It became apparent to us, bizarrely, through the Barnett formula! Allocation to Scottish government following last week's statement was just £21m. That was because total spending envelope so little changed by last week's announcement.
21
324
549
Creating an entirely new tax to fund health and social care. A massive and unncessary increase in complexity. Achieivng nothing that could not have been done within exitsitng income tax and NI systems.
37
147
562
The OBR was perfectly clear. They didn’t show impact of welfare reform because they didn’t get details of the reforms until far too late. They “will incorporate an estimate of these impacts in our next forecast”. This a failure of govt policy making not of OBR.
Breaking:. Keir Starmer criticises the Office for Budget Responsibility for failing to score the impact of the government's welfare reforms in getting people back to work. This is the first time that Starmer has publicly criticised the OBR - points to to wider concern in.
30
186
646
Big, expensive package from Rishi Sunak. In conjunction with tax rises already in place this is hugely redistributive - taking from high earners and giving to the poor.
116
150
566
An important point. Given that Scotland has more than its fair share of great universities, a financial centre, and lots of hospitality, I’ve always been puzzled at the very low levels of international immigration.
It's easy for the SNP to be incredibly pro-migration because migrants don't really want to go to Scotland.
131
37
598
It wasn't actually a tax cutting Spring Statement. Rishi Sunak banked more in rising tax receipts, as inflation creates a lot of fiscal drag, than he gave away in tax cuts. Me in @thetimes
11
260
547
Expect the tax rises just announced to raise about £12 billion a year, about 0.5% of GDP. Remember that's on top of £25 bn of tax rises announced in the Budget. This is a huge year for tax rises: a permanent increase of 1.5% of national income to highest in peacetime.
54
274
524