Rachel Reeves’ Budget Explained 

Also, people keep acting like the NI rise for employers is a giant tax increase that will either kill growth or ruin the working class, while seeming to forget that NI has been cut by 4 percent by Hunt. So even if the full NI tax increase of 1.2 % for employers is passed on to employees it doesn't even reverse the unfunded tax cuts from the tories.

True but even Reeves admitted it will strangle pay rises in businesses of all sizes in the private sector

@SDDT24 it's basically the same effect as just increasing NI for everyone. Everyone got an effective pay rise from the reduction in NI before and this is partially reversing it. I'm fine with it since the last NI reduction was more a political move just before the election by an unpopular party rather than something properly costed. Essentially it's not great it was done but could be worse lol.

The reality of the budget is just that it's measured and boring. Measured and boring is anathema to media companies.

That's a pretty niche section of the employment market you're talking about. You're nit-picking about a narrow tranche representing (wild guess) 2-3% of the market - which doesn't impact on the broad message discussed in this video. And some of the stuff you'd like them to talk about are honest mistakes (and omissions) only or just because content creators can't cover every little detail. If you want to send a message about 'misinformation' - and comparing it to big, crazy stuff in the US - try to stick to the big things not the little nit-picks.

And taxing him more

​@@JohnAnders-f6i wow such a level headed and serious take. very credible.

@@JohnAnders-f6i ok cupcake. seems your mascara is running.

​@@aceman00000997 hour old account, I wouldn't take it seriously

I agree Sunak did a very poor job, and his cabinet has literally no valid argument to some of the arguments he's making, I also don't think it's fair to suggest that Starmer is yet doing such a fantastic job, given that his popularity with the public has dropped so low. I will say, thankfully, that Starmer has plenty of time to improve his popularity. He has brought in more investment, and hopefully, those investment agreements were already subject to the knowledge of these tax rises so they can't be reneged because of surprise taxes. In my opinion, he handled the disorder quite well, although he didn't handle his image during it well at all and the tonality that has continued because of the publicised incidents means that all the two-tier comments will continue until they are properly managed with real PR. Ultimately, he was left with a troubling situation. Stagnant economy, that while it was growing, it was growing for the wrong reasons (increased costs and pricing, little investment) public finances were shit and have been in austerity since 2010. I don't envy his position right now. But I do envy his commitment to do what he believes is the right thing. Whether the public agree come the end of it will be an entirely different conversation.

I agree, most of the changes are not likely to affect anyone for months and most people will just sigh with relief that their mortgages or petrol has not just gone up by 50% like it did under the Tories. Wait and see will be the public reaction.

this is why ed davey is the goat

Yeah they're taking their sweet time electing a new leader

Tories are a dead party walking, I don't think anyone really cares who is in charge there so why bother changing him out?

Next week i think the tory leader will be chosen

He's a bit small I don't blame you for not seeing him

He's going out on Saturday

Likewise!

@@Alexander-yb1zc investment in public services need to come with increased productivity. Otherwise, we might just as well burn money instead.

Get on with your burger flipping ambitions in life

Inheritance taxes are bad because you have to pay them before you get the money if you inherit land or a company. This is why family businesses here in Finland are dying out. Its better to tax inherited income only after its sold. This is why Sweden got rich after repealing inheritance taxes.

@DS-xg9kf oh no I have to pay 18% tax on my profit over 3,000 then 24% over 50,000. That's a very low tax rate still

@@DS-xg9kfI mean sounds like you are waiting for mummy and daddy to die instead of earning your own money 😂

@@DS-xg9kf Given that 10% of the country have 90% of the wealth it is realistic to think that 9 out of 10 of us are going to be the "burger flippers" so actually it is you who has the bizarre idea that stamping on other people's faces for money is the only laudable ambition. Perhaps it is you who should devote your life to screwing over other people for cash? Whilst the rest of us work sensibly for the good of society as nurses, doctors, teachers, check out assistants, car mechanics, local planning officers, hairdressers, gardeners, quality managers, bakers, dustmen, insurance claims advisors, librarians, burger flippers and undertakers. It is you that is the weirdo.

So apart from over half the tax increases

@@danielwebb8402 Yes it would have been better if Labour had simply reversed the Tories unfunded NI cut. Politics is a dirty business.

@@moonlit_forest2680 , if that is how you look at politics then that is very sad. Your zero-sum way of looking at politics is very unhealthy at best and at worst very toxic.

Nothing I wrote suggests I think politics is a "zero sum " game. The cut to employee NI contributions introduced in Hunt's last budget was a deliberate attempt to wrong foot Labour when going into the election. Labour could have fallen into the trap and promised to reverse the cut or swerve it by compensating with rises elsewhere. They chose the later course. Politics is a dirty game but one side has more merit than the other.

Is this how you are coping with this disastrous labour party?

But the vast majority, 60-80%, will be laid through lower wages. You want to say "that's not 100%, therefore it is zero" isn't really coherent

@@danielwebb8402 they raised taxes on the businesses, it is the businesses decision to pass this onto the employee, we shouldn't be outraged at the government for raising taxes on a business that is making obscene profits, we should be outraged at the businesses for choosing to not cut profits and instead pass this to the employee

Well, it is absolutely a tax on working people because it will depress wages and lead to lower employment and growth

@@danielwebb8402 You cannot prove that, especially as the minimum wage has been lifted, which result in other wages having to rise. This will more likely squeeze hiring extra staff, which will also be muted by low unemployment and Baby boomer retirement.

@TheReferrer72 Can't prove it in this instance yet, no. Can't prove already it won't either. I do not own a delorean. OBR yesterday said about 75% will be met through lower wages. We'll see what wage rises have been in 5 years time.

err not for disabled people liz kendal is a nasty pos.

To an extent, yeah, but over many years those small amounts add up a lot which is why most agree the barriers should be tied to inflation

100% But there is a small thing with going over 100k where you lose (pension support?), meaning that at that one threshold, going over by a small amount is worse for you But agreed 100% for all income tax thresholds

It does matter though. When rents and basics go up by 20% or more how do you deal with this as a worker? Well best case scenarios is you go and get a job that pays 20% more. Then.... Oops well that's not good enough because a decent chunk of the increase is lost as tax.

The Point really is that the higher bands are not moving, once you reach the top bands that is all the tax you will pay ever, meaning if you are a very high earner, you earn 10% more, you are getting 10% more in your pay check, whereas the average person who earns an average salary gets a 10% raise they will only see a 5 or 8% increase as some of that extra cash now falls in a band INTENDED for the wealthy. you need to either add bands onto the high end, or readjust the existing bands, elsewise you just end with everyone on the same tax rate thus completely eliminating the entire point of a progressive tax system.

Sounds like something someone would say whose is unproductive and in a low tax bracket

Profits don't, but costs typically do, either to the employee or the customer.

the fact that benefits are not passed down, does not mean that costs will not be, particularly if this a group of people who care about their own interests (and so choose not to pass down benefits in the first case). more generally, tax pass-throughs are a very well documented phenomenon in public economics. e.g. if you place a tax on petrol, while some of it is paid by the petrol firms, a chunk of the burden is also levied on consumers, as these firms also choose to raise their prices in response

changing the threshold for ni is literally targetting the very lowest paid! It disproportionatle affects young people who have to work because they don't have rich parents

The businesses who make their employees responsible for all losses, and take all the profits - will do this ... but they are already terrible to work for, and often go bust

" I dont expect this cost to be passed down to their employees in the short or medium term. " well the vast majority of economists disagree with you on that but sure.

"Im gonna have to sell my second private jet😢😢"

How I suppose to live after that?

Like how millionaire pensioners need their £300 otherwise they'll freeze

Millionaries won't be ruined but people in the middle and lower class will lose their jobs.

We've heard of trickle down economics, now we're trying out drag down economics.

It doesn't hit small businesses as much, mind, due to the increased allowance. Big business will suffer the most.

Except big corps don't think like this and will instantly raise prices on their products.

Haha course you do 😂 I wonder why judging from the profile

@@SDDT24 I support the Labour party but if I really was unhappy with this budget I would say so. I didn't say it was the best budget just that it is promising and is better than what we got last time

i wonder why he thinks this like i geuinely cant see a single thing related to labour on his profile or anything like that. hmmmmmmmmmmmmm i wonder

@@LabourMinister10 I would say the budget is less bad than expected and speculated weeks ago but it’s still equalling the highest tax burden ever percentage wise , and could decimate British farmers and middle sized buisness

@@LabourMinister10 the Labour mantra writ large, 'At least we're not as bad as the last government' Now repeat for 5 years and hope no one notices their lives aren't getting any better

It's an important first step that will surely be iterated upon. The fact that Sunak's best response was obvious ragebaiting instead of making a genuine argument speaks clearly to it's efficacy. That he and the media cannot come up with an issue other than "well your wage rises may be taxed more" - which still means you're being paid more than you were - In my opinion, is a good sign that steady, careful and much needed change is on it's way.

Good to read some rational criticism. Your points are interesting and I will bear them in mind as we look at how the country progresses. I am sick of the party political bullshit that just screams about Labour lying after the Tories were somewhat kicked out for it or says our tax burden is too high whilst it remains lower than many other countries. I want information and ideas on whether what they have done is going to help the country or not. Your points seem moot though I think that they know that the NHS as the biggest employer in the country will need structural changes to achieve much. Health overall needs to pivot to prevention as well, rather than cure alone if we are doing evidence based politics/economics.

Deficit they left is lower % gdp than they inherited in 2010.

​@@danielwebb8402 a deficit is a year on year negative balance. Debt is not the same thing.

@tim211292 Original comment says "budget gap". That means deficit. Annual. Which was worse when Tories walked in door in 2010 than was when reeves walked in

@tim211292 Yes debt is 3rd lowest to gdp in G7 now. Was a worse comparative position in 2010

no

It's not a long one though- think about it

Chill out you 🥶🥶

yeah, but deficit spending can cause economic growth and inflation, both of which reduce the real amount due in interest payments

Why should I care about 2% of the population ?

AKA I want to pass my business onto a family member for nothing .... without it being a business asset Just make it a business and make your children directors like every other business

@ business is taxed at the same rate…

Ok then how would you have solved the issue of farmers being exempt from IHT and land owners being able to pass on wealth that everyone else cannot? Thereason farming families were hit by the budget is because they have been protected so much from taxes previously that everyone else has to pay.

many most farmers shouldnt have voted for boris and brexit and caused this mess then?

you mean he didnt rim the tories?

what are you referring to here?

Yeah what?

business consultants and corruption

It really isnt, I know people who work in the NHS and they say the NHS is desperate for money

@@Tiredmum cope.

Productivity improvements in industry have come from investing in new technology and changes to supply chains. I assume you think productivity is something to do with how hard people work or what their job titles are, and you are wrong it is not.

😂 Basically; higher wages, but that means worker’s are taxed more (because they earn more). And then other things like investing in the NHS, schools, housing, etc. Other taxes like VAT on private schools. And of course, everyone’s favourite; a penny off a pint! There are of course more, but that’s just the gist.

What part don't you understand.

it was in the budget if you listened or read any of the coverage.

Already at 78% which is crazy

You don't know. You still pay capital gains regardless of where you invest.

Starmers the pm, reeves is the chancellor

Starmer is the Prime minister, Reeves is Chancellor of the Exchequer. I assume you're confused by the fact Reeves seems to be doing all the talking here, that's because this is a budget, which is the responsibility of the Treasury. The Chancellor of the Exchequer is in charge of the Treasury, hence she is responsible for the budget. Hope that helps clear things up for you!

@ yeah, but who seems to hold the power?

@@wayn649 I was more in the ironical side

It's not the PM's job to directly do the budgets, as that's the Exchequer's job. That's part of why it was such a big deal that Truss directly admitted she pushed Kwarteng to make the changes that proceeded to make that whole mess - Not that Kwarteng should ever agreed even if his job was on the line.

michael reeves for prime minister

You can find some pretty austere wine if you travel to the vineyards of Italy.

i think its a decent budget

To tax the rich people anyway because the "they'll just leave" argument is massively overstated by pundits trying to deliberately discourage it knowing it is best for the country, but not for the people who fund those pundits.

We can absolutely tax the rich and most of them are unable to leave - they're the ones owning dozens or thousands of properties in real estate and so on. The stuff they own can't just be put in a suitcase and flown to Macau.

​@aceman0000099 the issue is their accounts have already left abroad. Good luck getting money out of a cayman bank account

You should watch the analysis done by Damien Talks Money. It really does affect working people.

​@@inbb510notable unbiased source given how much he gets paid into by oil companies, huh.

@@effluxi9587 , he literally references papers from the red book and the OBR to back up his arguments. Give me one thing he said wrong in that video.

@@inbb510 it doesn't matter what his arguments are or where he gets them from; the facts are it is within his interests to listen to his investors interests to make Labour look like hypocrites here despite their being very little reason for the public to do so. The public wants change, and Labour is, carefully and steadily bringing that. Deliberately poisoning the well with anything more than "It is understandable to want to wait for more change" despite clear warnings of a painful but needed budget, is precisely what the Tories and their benefactors want and need. Sunak's retort was not facts and evidence, it was clear ragebaiting. Damien twists the facts to show a potential outcome without being clear that it is only one possible outcome, and additionally, the least likely one.

@@effluxi9587 , you don't have any counter arguments. What you said is all speculation. It's irrelevant if it is within his interests or not. He has justified his claims from independent sources.

Governments are always borrowing unless they're like Norway where they have a national oil wealth fund. Your comment fundamentally misunderstands how borrowing works at a government level.

Should have created a sovereign fund like Norway but it’s to late for that. Almost every country needs to borrow , debt is money.

the tories tripled the debt labour left whilst building nothing for 14 years

@@effluxi9587 Maybe, but it can't be good right? Cutting, austerity, saving, borrowing. It's all pretty bad.

trickle down dogma has been beaten into us since the early 80's with Reagan and Thatcher. It has always been a lie but it seems to stick to the shoe like poo.

Because working class people typically earn minimum wage.

@aceman0000099 so having no small businesses setting on and the people who have jobs, being laid off is somehow going to help minimum wage workers?

oh no the rich pay more. how awful.

I think they were just giving themselves an excuse to complain more in the end.

and the tories helped business so well for the last 14 years?

and kill our credit score? derp

If we cut foreign aid we would lose a lot of bargaining power that helps us in trade deals. Food, drink and petrol would jump in cost for example.

@@aceman0000099 This country sends foreign aid to countries that are both larger economically and authoritarian. Fuck em.

@@aceman0000099 I keep seeing this argument but it’s so easy to dismiss. Tell me. Do you believe, that our spending on foreign aid, is a net gain? Do you believe we gain over 20billion in profit from them? And even so, I’m not much a fan of using that leverage against people. How about a trade deal where we pay directly instead of using foreign aid.

​@purpledevilr7463 nevermind bargaining power, you're most likely to have an increase in immigration if you cut foreign aid. Those who do not learn history are doomed to repeat it.

But the budget hasnt changed any of that

unless you have a shitload of investments and earn over 100k you wont be worse off. meanwhile the rich will actually have to start paying some tax now on their unearned income finally

@@jamesholt4449 in fairness most people in construction arent too good with numbers. i know i worked with them for 20 years :P

Of course, not a single original idea in his noggin.

Homelessness is a massive issue and one that does deserves more attention. But suggesting the ‘proxy war’ isn’t important is a bit silly. If you let Putin take Ukraine, he will keep going. Ukraine deserves our support and for only £3bn a year we can hurt Putin and his regime.

We absolutely should be involved in the proxy war, its defence spending

You are absolutely mentail if you think the gov cares enough about homelessness go invest any money into it.

also why they hell couldnt they make tax rises consistent, low earners have to pay 8% more tax whereas high earners only went up by 4%, whereas wealthy landlords sitting on millions in property have a tax rise of 0%. many regular low income people use the stock market to try and afford their first property, as income enough is not enough to even get a studio flat unless you save for a looooooooong time

labour are centre right these days.

@ you have to ask yourself which is the lesser of two evils. I would much rather continue to support Labour, despite where they are now in the Overton window, than have the Tories back. I don’t think it’s a good move by anyone to try to pull the rug from them and complain they are not left enough - just breathe in the fresh air we have now rather than the stench of Tory corruption