Spring Budget 2024 - My Take

The Chancellor, Jeremy Hunt, will deliver his 2024 Spring Budget in the House of Commons on 6 March. With a general election just around the corner and with Labour 20% ahead in the polls he will be trying to pull as many rabbits as possible out of the hat. At 7pm GMT on budget day I will be broadcasting a live stream so I can dissect the contents of the budget and give you my take on what it means for the economy and for investors.
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[@george6977]

0.5% Stamp Duty tax on purchasing UK shares, puts me off buying UK shares. I expect I am not the only one.

[@patrickac2924]

Yeah, a tax for not great companies....no wonder people are put off from investing in them

[@jam99]

Correction - the obsession with this government is not to cut immigration. The obsession has been to try to present a face of cutting immigration while increasing it. And that is what has happened, massively.

[@richsmart321]

Uk is a won’t make any difference. Very few people have £20k to invest a year - let alone another £5k in somewhere that’s underperformed and now in recession

[@helixvonsmelix]

You will note that the OBR only discussed immigration, but not illegal immigration. Smoke and mirrors.

[@MelissaHobbs-qm8wi]

The recent activity in the IPO market is quite notable.

[@coderider3022]

Just need to increase pension contributions if you don’t want to pay as much tax.

[@jabberwockytdi8901]

For those still working the NI cut helps offset the frozen personal allowance, that doesn't work for the retired though, interesting considering this is (allegedly) a vote buying excercise and the proportion of Tory voters who are older generations......

[@fredatlas4396]

My gross annual income is £23500, and according to Martin Lewis I will still be worse off due to the freezing of the personal tax allowance @ £12570 per annum, and I'm in employment

[@VoiceOfThe]

@@fredatlas4396 Yes, Hunt is a shark in a suit. The masses generally don’t understand what’s really going on. The headline is a 2p NI cut which saves money for working people. Sounds good and is true, BUT, what they NEVER mention is the freezing of the thresholds year after year that don’t increase in line with inflation (fiscal drag), thereby the tax man is covertly taking working people’s money without them being aware - the very definition of a stealth tax. They rely on the stupidity and ignorance of the electorate not to notice this, or understand this and many don’t. As Martin Lewis rightly says, some people earning a certain salary benefit (slightly), many don’t and lose out. Welcome to The Matrix.

[@helixvonsmelix]

Con support didn't fall because of the truss budget, it fell because of the way she was removed.

[@Pensioncraft]

Hi @helixvonsmelix I'd argue that it was the budget. Remember that the UK bond market had its worst day on record that almost led to the liquidation of some of the largest UK pension funds (only Bank of England intervention and a huge bond buying program avoided that). In my opinion she wasn't removed quickly enough following that. Thanks, Ramin

[@coderider3022]

Teddy gets Ramin’s 2% in treats.

[@vkman34]

43:10 Google "countries by labour productivity" to find Wikipedia's list of countries with the highest productivity. Ignore Ireland at the top because its GDP is artificially inflated as a tax haven. The remaining countries are nearly all fairly high-tax countries (with the exception of the USA): the Scandinavian countries, Switzerland, Netherlands, Germany, France, Austria, Iceland.

[@user-yb7qj1hf9h]

Excellent review, get some gilts now!

[@mrg8537]

The election is a case of voting for the least bad option or having a protest vote for someone with no chance of being elected. The options are pretty poor and change in the voting system is needed

[@Paul.Morgan]

Despite massive immigration over the past 15 years UK GDP per capita has barely changed according to an FT article titled "Stagnant UK living standards lay bare the challenge for Jeremy Hunt". I think reliance on abundant migrant labour has discouraged capital investment that could have boosted productivity.

[@fredatlas4396]

Immigration is now higher than ever before, and it has been increasing a lot since 2010 and the tories ruining our country. The reason our economy hasn't really gone anywhere since 2010 is because of the tories austerity policies and their suppression of real inflation adjusted wage growth. Because it's in fact the ordinary working class people that drive economies, provided they have enough spare capital to spend into the economy

[@Paul.Morgan]

@@fredatlas4396 The Tories have failed in office but this theme of over-reliance on cheap imported labour began under the Blair Labour government.

[@fredatlas4396]

@@Paul.Morgan Yes, but average wages actually went up by 25.7% in real terms adjusted for inflation for the whole period of the last Labour government. But since 2010 and the tories in power average wages in real terms adjusted for inflation went down from 2010 up until 2019 by minus 2.5%, and that figure has to be a lot worse now after the surge in inflation, the recent cost of living crisis since 2021. Plus we've had the tories austerity policies since 2010, massive real terms inflation adjusted funding cuts for all public services including the NHS . Inequality, poverty and homelessness have been rising at an alarming rate since 2010. No real investment in our economy since 2010

[@fredatlas4396]

@@Paul.Morgan Also immigration has gone up a lot since 2010, it's now higher than ever before

[@Paul.Morgan]

@@fredatlas4396 Austerity was disastrous but I think the boom years under Labour were paid for by reckless government borrowing and spending. Remember the note left behind by Labour's Treasury secretary "Sorry, there is no money left".

[@badkeiser]

I’lo be back on PC soon.

[@robhemsley9181]

The big missing on this video is the significant increase in tax for pensioners - I think this government has had its day and it’s time for change

[@PhillCurtis]

Rly good video 👍

[@Pensioncraft]

Thanks @PhillCurtis

[@gringadoor5385]

I smell another video idea: Given the US' average outperformance compared to the UK over say 40 years, where is the point at which a fund allocated to the US would outperform a UK only fund by so much that a global / US allocated fund still provides the best return, even taking into account higher rate of capital gains tax in an non ISA, or looking forward, assuming they axe the tax free allowance for capitals gains completely?...

[@owenkrysler8235]

You refer to immigration and increased GDP, but no mention of GDP per capita. Low skilled immigration makes many of us poorer by suppressing wages. Students often come over with wife and a bunch of kids.... under such circumstances they will consume more in services (6K per year per kid for state school, unlimited NHS) than most will ever contribute in taxes. They all have live somewhere and add to housing crisis.

[@MrMathewSquire]

"The average European migrant arriving in the UK in 2016 will contribute £78,000 more than they take out in public services and benefits over their time spent in the UK and the average non-European migrant will make a positive net contribution of £28,000 while living here. By comparison, the average UK citizen’s net lifetime contribution in this scenario is zero." Oxford Economics Study 2016 These damn migrants coming over here and subsidising the locals! Outrageous stuff.

[@owenkrysler8235]

@@MrMathewSquireThe UK population has increased by almost 10 million people in the past 20 years, largely due to immigration. Why do most feel that their standard of living is actually declining? Immigration is good for many businesses who enjoy unlimited cheap labour, but for many working class people it is bad. The minimum salary of a migrant worker coming to UK is currently just over 26K, which means they will contribute just over 4K tax and NI. If they have a couple of kids they will be consuming more than they contribute. Sure, let's welcome highly skilled professionals, but low skilled workers are just a tax on the rest of us.

[@fredatlas4396]

​@@owenkrysler8235 Our standard of living has declined an awful lot since 2010 and the con-servatives running things. Under the last Labour government from 1997 up until 2010 average wages went up by 25.7% in real terms, adjusted for inflation for the whole period. But from 2010 up until 2019 average wages in the UK went down by minus 2.5% in real terms adjusted for inflation for the whole period. And that figure has to be a lot worse since 2019 up until the present after this cost of living crisis, rampant inflation here in the UK since about 2021

[@owenkrysler8235]

@@fredatlas4396So why do you think that is the case? Don't just say "Conservative Government".

[@fredatlas4396]

@@owenkrysler8235 Because of the tories austerity policies since 2010 and their suppression of real inflation adjusted wage growth, average wages haven't been keeping up with inflation since about 2009. Plus immigration has gone up a lot since 2010, we now have the highest levels of immigration ever. Plus the tories curtailing our rights, workers rights etc. They've been giving big tax cuts for big corporate businesses and the wealthy and higher payed since 2010 and at the same time they've cut funding for all public services including the NHS to its lowest levels in real terms adjusted for inflation in well over 40 yrs. We now have the lowest corporation tax in all the G7 nations and most likely a lot more besides. And that apparently doesn't encourage businesses to invest more money back into those businesses. They've just been putting the money in their pockets, the ceo's and directors they haven't increased the wages or employed more staff. And most people who are on benefits are in full time employment

[@rcjeknight]

Dropping NI contributions is a clever wheeze that has a lot of “unintended consequences” I suspect that NI is something it is best not to poke at with any sort of stick.

[@kevinu.k.7042]

I see that at the same time that the Budget was being announced so to were the forth coming Government Bonds. From the brief article I have seen the Government is focusing on shorter duration Bonds and the issue is rather large. Given that the BoE is selling off its accrued G. Bonds at the same time this situation would appear to be complicated, for someone like myself. Is this an issue you might cover in the future? I only buy ETFs and that whole G. Bond market seems far too unstable at the moment. Thanks.

[@Pensioncraft]

Hi @kevinu.k.7042 I did a video about the Quantitative Tightening bond sales by the Bank of England "Bank of England Crashing Its Own Bond Market!" here kzbin.info/www/bejne/oqa0hGyNo7God9Esi=jlEkxPIa3-sS6wj8 But as a bond investor this could increase yield and make government bonds more attractive. The Bank of England says that its sales are not affecting the market but I find this difficult to believe. Thanks, Ramin.

[@kevinu.k.7042]

@@Pensioncraft Thank you so much for finding the time to answer that. I'll go back and watch that again. Watching the way the yields are bouncing around at the moment I'll continue sitting on the side lines for now. I have limited experience in the Gilt markets. Best to you and the team.

[@mrg8537]

The argument that people will shift their ISA to global exc UK and moving UK investments to BISA will only work for a few years. If you have £500,000 in a ISA and based on 4% UK weighting, that is only £20,000. After 4 years that strategy will no longer work, so you have a choice of increasing the UK weighting or not maxing the £25k ISA allowance. Now most people will be nowhere near £500,000

[@danmeck5978]

The in child benefit doesn't just benefit married couples. Maybe you need to clarify the information you gave.

[@Bosshog-WealthHealthBetterment]

Thanks for sharing! My thoughts from this video and the budget, is that we need to remove inefficiencies in the system, build in ratios to stop fiscal drag, treat all income as income tax if not in tax wrapper, introduce a wealth tax and expand inheritance tax. 1) I was sad not to see more to simplify and do away with the "perverse incentives" of our tax system, notably when you come off benefits and start working, at £50K when other benefits reduce, and at £100K when personal allowance tapers. The £50K situation was sticky plastered for now, but no mention of the other 2. 2) I think they could have been braver to confront fiscal drag. I'd like to see personal allowance set at 0.4x of median salary, and then say 40% tax at 1.4x median and say 50% at 4x median, so it auto-corrects. You could play around with these numbers so it was cost neutral. By having 50% at what I think would be £110K or so, you'd also reduce the rate for the top 2-5% of earners whilst increasing it for the top 1%, which is aspiration to many in the S.East / London / senior professionals like head teachers and chiefs. 3) I think the focus on NI reduction was good. It's been a gripe for me that "high earning" and "rich" are conflated. We currently have an increasing burden on high earners, which discourages work and gives us less money to spend. 4) Similar to the above, I'd like to do away with different income tax treatment. With the exception of tax wrappers, whether you receive income from a job, your own business, dividend, CGT, or etc, it's still income. If you simply income as income, and then simplify the tax system (point 1 and 2) you end up making taxes easier to understand and audit. 5) I'm fine with the British ISA as proposed. I'd like to keep it a seperate category, and I think this would help with competition and ensure the investment "stayed British" (however we'll categorise). Competition because for me, on T212, I might be tempted to try a different provider for the BISA component, so you're offering a way for businesses to get a small part of your portfolio, and then they can look to target your ISA and SIPP as additional. I'll finish on a controversial 2: 6) I think there should be a wealth tax. Something like 1% for balances above £3m, and 2% for balances above £10m. I'd be happy if these were linked as multiples of mean wealth to they rose over time. Put simply, once you have money, it's impossible to go broke unless you're reckless and/or an idiot. There is no incentive to not hoard your wealth, and so you do, enjoying that sweet 8-12% long term growth. This is something that people without wealth can never hope to catch-up on. 7) I think inheritance tax not only should remain, but legal loopholes should be removed. People talk about it as a "double tax", but you're not taxing the person who has died, you are taxing the person who is inheriting, which through no talent or skill or value add to society has income given to them. As such, and similar to point 4, this income should be treated as income, and taxed accordingly. You could allow for it to remain in trust and pay you an amount of income per year, again taxed as income, and if you take none that's fine, see point 6 wealth tax. Either way your wealth is being distributed and less of the tax burden is falling on traditional workers.

[@fredatlas4396]

We don't need more big tax cuts for big corporate businesses and the wealthy and higher payed. Since 2010 and the tories ruining our country, inequality, poverty and homelessness has been rising at an alarming rate. We need a change of government. And the 45% tax threshold could be put down to £100000 gross per annum, plus the personal tax allowance increased to say £14500 per annum for starters.. We need more incentives for the lower payed and people on minimum wage to work. Plus we are already working long enough hours. Big UK businesses need to start reinvesting more of their profits back into the businesses, instead of it going into the pockets of the ceo's and directors. And the minimum wage need increasing to a proper living wage

[@Paul.Morgan]

There would be serious consequences from your plan to tax all forms of income at the same rate. Tax advantaged wealth accumulation through investing allows modest wage earners to build wealth over time and thereby enjoy a comfortable retirement. Under your scheme only high wage earners would be able to build high wealth. You might think that only high wage earners deserve to be wealthy. I would say that low wage earners who diligently invest their savings over many years also deserve to become wealthy. If you tax their investment income at the same rate as their wage income you make it impossible for people with ordinary jobs to become wealthy.

[@fredatlas4396]

@@Paul.Morgan There is a guy on KZbin, I forget his name, I think it was bregman or something like that. He says poverty isn't a lack of character it's a lack of money

[@Paul.Morgan]

@@fredatlas4396 I say that if everyone in the country started with the same level of wealth on 1st January, there would be wealth inequality by 31st December. Some people are savers, some are investors, some are spenders, some are gamblers, some will give what they have away. Personal character does matter.

[@Bosshog-WealthHealthBetterment]

@@Paul.Morgan I mentioned specifically about outside of tax wrappers. What makes you think I only want high wage earners to be wealthy? That's an odd leap. There's nothing to stop lower wage earners from enjoying both pension (taxed as income already when used) and ISA (taxed as income before depositing) so those things are totally fine and suitable I would say for anybody to build wealth over the long term. My main concern is on the hoarding of wealth by the already wealthy, not on income earners from building wealth in the first place, which should be encouraged.

[@ONeill01]

Hunt could go alot further, the fiscal rules are arbitrary here, economy can take far far more than Hunt is proposing

[@ianseward9928]

The hapless chancellor has just lost the grey vote . They’ve since come back and promised the triple lock will remain , but the triple locks ck will heal itself with lower cpi . So in real terms not really great for pensioners . The tax free allowance has to be corrected .

[@ritalally7018]

Most people in the UK are now very concerned about the enormous scale of legal and illegal immigration and know full well it has a) depressed incomes b) caused the price of housing to soar as supply can’t possibly meet demand and c) has put intolerable pressure on public services. The notion that the scale of immigration we have experienced is positive is, frankly, risible. Japan by contrast has always strictly controlled immigration and is a successful and very cohesive country.

[@owenkrysler8235]

Yet, Ramin seemed to imply that immigration is the answer to the economic problems facing the UK. Walking down my local High Street, it is obvious to me that immigration is responsible for more problems than it could possibly solve.

[@informer-365]

Economy is booming but every time I turn on news it’s doom and gloom.

[@fredatlas4396]

@informer-365 That's strange as we are now officially in a recession in the UK, despite the tories denials

[@informer-365]

@@fredatlas4396 what comes after a recession? Mostly growth

[@dominiquemitchell-oneill7127]

We're still in the recession. Keep dreaming.

[@AnonyMous-xv4ig]

​@@informer-365 Maybe, but we are not there at the moment. We are in a recession at the moment, so why would news outlets be saying that the economy is booming?

[@informer-365]

@@AnonyMous-xv4ig because we have had 0 to negative growth for 2 years. Finally finally we in a technical recession. You look at all history books after a recession comes a economic boom cycle because data is backwards looking. I hear people complaining about economy but I see spending in restaurants and takeaways and day trips

[@jabberwockytdi8901]

You can clearly see the effect of migration on GDP by comparing UK and Germany, go back 15 years or so and german GDP was 1.6 times UK, now it's 3x the UK without a significant increase in per capita GDP in DE vs GB , that's entirely down to higher net migration to Germany vs. UK in recent years...

[@chriscooksey25]

I think part of the problem is that we allow both good and bad immigration. My neighbour has been on benefits here for 3 years because he’s able to live more comfortably than back home. Countries like Dubai or Singapore only allow immigrants that contribute.

[@vkman34]

Have you the source of those numbers? Germany GDP per capita is about $10k higher than the UK in PPP terms, according to the IMF.

[@Frank-vn1qn]

The £5K British ISA is a complete waste of time, since most people can't afford to fill the existing £20k ISA limit. What they should have done is make all new ISA investments UK stocks only, and set the limit at £25K. Anyone wanting to make new investments in international stocks could still do so, but outside of an ISA wrapper.