HM Treasury’s Post

The 2024 federal budget proposes a series of legislative and regulatory measures with a particular focus on middle class and younger generations. Read our article for more on how the proposed actions attempt to make life more affordable. #BLGPublication #FinancialServices

Take a look at our summary of the recent planning reform focused on the NPPF 2024 here!

Our Managing Partner, Shri Venkatesh shares his views on the budget expectations in an article published by The Economic Times. Read more at :- https://lnkd.in/ghT-QAeN #knowledgesharing #opinion #unionbudget #budget2024 #energysector #lawfirm #skvlawoffices

Bill Alert! US House Bill HJRES 6 - Proposing an amendment to the Constitution of the United States to provide for balanced budgets for the Government. Full Details: https://lnkd.in/epss9ZRn Bill 119 HJRes 6, also known as the Balanced Budget Amendment, is a proposed amendment to the Constitution of the United States that aims to require the federal government to maintain a balanced budget. This means that the government would not be allowed to spend more money than it takes in through revenue. The amendment would require Congress to pass a balanced budget each year, ensuring that the government does not accumulate excessive debt. S...

Yesterday, evidence was given by both the OBR and economists on the budget. The OBR session had a number of highlights: 1. "We think that... Government policies will boost that growth rate up to 2% going into next year. That is mostly a temporary boost to output from the demand stimulus coming out of the fact that the Government are increasing spending by more than taxation in this Budget. That raises GDP by around half a per cent. at its peak, but that demand effect dissipates over the remainder of the forecast and growth dips down to around 1.5%" 2. "The real driver of growth over the long term in the UK is what happens to our productive potential. There is a bit of an offset from slightly lower labour supply as a result of the national insurance measure." 3. "Net borrowing is up by about 1% of GDP. That pushes up inflation a bit. It also pushes up our expectations for the path of interest rates over the forecast period. We have added about a quarter of a percentage point to interest rates, both bank rate and gilt rates, over the forecast period." 4. "On the tax side, in our view about half of the tax rises are relatively certain and reliable. Putting up national insurance is a very reliable tax. It is a tax on payrolls and if you raise it you will bring in the revenues. Tom Josephs will talk more about that. The other half of the tax yield is based on raising taxes on a relatively small number of individuals, for which the revenues are quite uncertain because it depends on how they respond." 5. "[In reference to the NIC increase] It throws out an estimate that, in the long run anyway, the majority of the impact shows up in lower real wages—wages lower than they otherwise would have been. It generates a number: about 75%—three quarters of it— ends up, not in the short run but in the longer term, falling on workers, with real wages lower than otherwise they would have been" 6. "the flip side of an ageing society is a shrinking workforce, so that means you have fewer taxpayers supporting more and more people who have left the workforce because they have retired but they need support from the healthcare system and from adult social care." 7. "Our estimate in March on the initial reforms was that it would lead to roughly 10% to 20% of the [non-dom] population leaving the UK. We increased that a bit this time just because some of the newer changes increased tax liabilities for that population—in particular the changes to inheritance tax. So we increased those estimates by up to 12% to 25% leaving the country." 8. "We have higher inflation in our forecast as a result of the fact that there is a big fiscal loosening in this Budget. About two thirds of it is going on current spending, but about one third of it is going on capital, which makes it more capital-heavy than the overall composition of public spending. It is a significant injection."

There are so many challenges facing our local councils. We can all play a part in helping them to understand how they can reform and transform how services are delivered. Interesting read from the Accounts Commission.

Further to my previous post, the economists went before the Treasury committee to give thoughts on the budget. Some interesting points made: 1. "On the OBR numbers, something like 3.5% of national income is going to go on simply servicing that debt each year for the next five years, more than £100 billion a year, which is why the Government need to run a primary surplus going forward to avoid debt spiralling ever-upwards." 2. "According to the OBR, £22 billion of our debt repayments are due to increases in inflation since March, which is about the same as the entire tax raised on national insurance contributions." 3. "Umbrella companies was an issue before with the £5,000 allowance, so that will be worse now with the £10,000 allowance. It was for that reason, among other reasons, that we were previously in favour of getting rid of the allowance altogether." 4. "At one level, most people with money in a pension might consider themselves winners relative to some of the speculation that lump sums might be taxed or relief reduced." 5. "One of the losers here was my forehead, which hit the table when stamp duty was announced to be going up. I was lost for words. You pick the worst tax that we have and increase it. " 6. "The big picture of this Budget has taken us in the wrong direction because it increases the tax on earned income through employer national insurance contributions. It undoes, as it were, some of the benefits that the previous cuts to national insurance contributions did. The big difference between taxing earned and unearned income is the way that national insurance contributions work." 7. "If you look at the tax burden, it has risen to over 38%. It puts us ahead of quite a lot of western economies but below some countries such as France, Germany and those in Scandinavia. We are in the middle, but one thing that we have discussed today is what you get for it. Quite a lot of these countries have a higher level of service in return and you need to spend less of your income to pay for that." 8. "The interesting thing about the latest iteration of this non-dom costing is that the money is raised largely through this temporary repatriation facility. It is almost a one-off source of revenue. It is not quite, but almost. It is playing on the behaviour, as opposed to trying to manage the risk associated with behaviour. It is playing on the desire to bring the money in, rather than worrying about who is going to leave, so it is quite a different tax measure to the one that Jeremy Hunt had not heard of in November 2022. Interestingly, it is also the reason why the fiscal rules were met two years earlier. That chunk of money on that facility makes the difference" 9. "Fuel duty is on its way out. That is going to cost us tens of billions of pounds. It is not going to be quick to replace either, so there is your magic money tree. Do something about taxation of motor vehicles. I did not say it was easy"

Budget 2024 is encouraging in theory, but the real test will be executing these promises, which needs concrete action from all government levels. Learn more here: https://lnkd.in/g6HwSHCb

Bill Alert! US House Bill HJRES 10 - Proposing an amendment to the Constitution of the United States to provide certain line item veto authority to the President. Policy: Economics and Public Finance Status: Bill Introduced Full Details: https://lnkd.in/emHgDCU3 Bill 118 HJRes 10 proposes an amendment to the Constitution of the United States that would grant the President certain line item veto authority. This means that the President would have the power to veto specific provisions or items within a bill, rather than having to veto the entire bill as a whole. The purpose of this amendment is to give the President more control over government spending and to help reduce wasteful or unnecessary expenditu...