Tag Archives: autumn statement 2022

How we should have responded to the 2022 Autumn Statement

Assuming that the Chancellor of the Exchequer had stabilised the money market last month, his main task was to try to ensure we are in recession for the shortest period possible by reducing inflation while not deflating the economy. Therefore his biggest concern should have been the energy price increases forecast for next year. He failed to deal with this issue adequately. He has said that ending the price cap freeze would increase inflation by 5%.

He has increased the energy price cap from next April by £500 to £3000 and this means that every household has to find this £500. This will also allow inflation to increase by 1% – see page 15 of the OBR report (PDF). He has failed to provide enough support for households for next year. He has scrapped the £400 for every household and the £150 for those in Council Tax band A to D properties. List of the help available next year and current support (PDF).

These means that a pensioner if they have the average household energy bill will have to find a further £1050 to pay for their energy. However the new state pension is only increasing by £972.40 for the year. Where are they supposed to find the extra money to pay the £1,050 extra energy bill and the increased prices of everything else?

A couple on Universal Credit will have to find a further £800 to pay for their energy but the 10.1% increase in Universal Credit is only £637 for the year. Where are they supposed to find the extra money to pay the £800 extra energy bill and the increased prices of everything else?

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A socio-economic impert’s thoughts on the OBR’s report and the Autumn Statement

An impert is interested in a subject and tries to find out more about it. The writer aims to become a socio-economic impert because the writer considers it impossible, in reality, to separate “economics” from its inevitable social consequences.

The foundational OBR’s report is in error because it omits sectoral balances. Whenever a government has a debt, the non-government sectors of the domestic, the business and the foreign, must have a surplus. The valid question is the size of the difference between governmental expenditure and its tax gathering. Too much is harmful as is too little. Without this surplus of money, homes and businesses do not have enough money with which to function. As currently presented, “Balanced Books” are a disaster for regular people.

By extension, sectoral balances tell you where money has come from and where it goes, but not necessarily in that order!

Another hidden truth is that inflation is a year on year calculation. This year, pre-conflict inflation is used as the basis for this year’s conflict affected calculation and so is high. Next years will be based on conflict affected inflation figures and so is incredibly unlikely to be other than less.

The Autumn Statement does not differentiate between the causes of inflation. There are various internal and external causes. The current inflation has significant external causes, such as the Ukraine conflict and the opportunistic raising of prices by power companies. The latter are invalid profits because they are out of proportion to actual research and development, production and distribution costs. Again using the sectoral balance model, we  can see that these extractive “profits”  come not from worth or need, but from the exploitation of fellow human beings.

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The Autumn Statement big lie – no more taxes

Well, who would have expected it? Hunt blamed the country’s current financial problems on Putin. Nothing to do with more than a decade of Tory mismanagement of the economy. Nothing to do with the disastrous Kwasi Kwarteng and Liz Truss budget which he has now all but reversed. Our low growth rate and our troubles are caused by anything other than the Tories. Of course, we have are weathering bitter storms but the Tories left us unprepared for those storms. Now we must all pay the price.

The big lie of this budget is that there have been no tax rises. Tax rates haven’t gone up but people will pay more tax.

The Office for Budget Responsibility (OBR) forecast makes grim reading. The UK’s inflation rate to be 9.1% this year and 7.4% next year, contributing to the squeeze on living standards. The UK is in recession and growth will slow.

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Lib Dems warn on education funding ahead of this morning’s budget

The i reported that figures obtained by Lib Dems from the Commons Library show that due to inflation eating into Whitehall budgets, schools and hospitals will receive £10.7bn less than they were expecting in 2024-25.

Ed Davey, Munira Wilson and Sarah Olney have written to Jeremy Hunt highlighting how current budgetary pressures are affecting schools in their constituencies.

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Families face near £5,000 bombshell from Autumn Statement

A typical family could face an eye-watering £4,900 triple whammy hit from today’s Autumn Statement, analysis by the Liberal Democrats has revealed.

The research shows the combined impact of expected stealth taxes, energy bill rises and mortgage bill hikes next year. In the year 2022/23, a typical family of two basic rate taxpayers with a mortgage will face a total hit of nearly £5,000.

The party’s research has shown that there would be an additional £680 a year in income tax, due to the freeze of the personal allowance. Households could also face an increase of £1,200 a year in their energy bill, once the energy price cap is unfrozen in April.

Finally, due to Liz Truss and Kwasi Kwarteng’s disastrous mini-budget, a typical family will see an annual increase of around £3,000 in their mortgage payments, due to soaring interest rates in the aftermath of the mini-budget.

Ahead of the Autumn Statement on Thursday, the Liberal Democrats are calling on the Government to put a proper windfall tax on the profits of the fossil fuel giants. They are also calling for the Introduction of a new Mortgage Protection Fund and to increase pensions and benefits at least in line with inflation.

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We should not oppose some stealth taxes

The autumn statement on 17th November will probably provide reassurance for the markets, but bad news in other respects.  We don’t yet know how the unpleasant ‘medicine’ will be mixed, but it will include higher taxes (including stealth tax rises through long term freezes to personal allowances), cuts to services and to government investment, and real terms cuts to some welfare payments.

Elements of our response to the forthcoming statement are easy.  1 The Tories got us into this mess through the Truss shambles, through Brexit, and through the lack of policies to build a decent economy over many years of poor stewardship.  2 We don’t want cuts to services and to welfare.  3 We should increase levies on companies which have happened to have benefitted from the war in Ukraine.  But when it comes to any tax rises that may be proposed in the statement, we need to think carefully.  We need to balance the short term expediency of pointing out everything the government is doing which could be unpopular, against longer term considerations of how to deliver a better society.

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Recent Comments

  • expats
    Russell 1st Dec '22 - 5:15pm.....The reason inflation is so high is because of Russia’s invasion of Ukraine...... Don't forget the 'B' word...* *Brexit ...
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