Election Year or Fear!

[ramAnag]

....I wonder if either he or AF are genuinely aware of the disparity that currently exists between fee paying schools and more typical state run secondaries, particularly those in less well to do areas....

The "he" being me. Infers a presumed ignorance of the subject

Wondering and inferring are very different. I don’t believe I inferred anything. I didn’t know you’d sent your kids to independent schools. How would I? Neither am I in the business of castigating you over your choice.

I have no interest in ‘dragging everyone down to the same bad standards’. Quite the reverse. As it happens, because of one of my grandchildren’s sporting achievements I happen to have spent time in a couple of public schools of late. By coincidence due to again next week, but even I, who benefitted from such an education around 60 years ago, was surprised at the level of facilities which are light years ahead of the state sector. Those are, imo, the standards we, as a society, should be aspiring to and if charging VAT to those who pay for access to a more elite education helps a little then, again imo, so be it.

[Andy_Faber]

I wasn’t being personal, but you attributed the ability to provide independent education for your children to your work ethic.
What I’m suggesting is that work ethic and ability to earn are different and some people with a great work ethic - maybe to the point that they have two or three jobs - will never be able to earn what you, or I, have earned through a possible combination of perceived intelligence and qualification.

I was agreeing with you

I think there's a logic error in the imposition of the tax though, which I do think was a political decision not an economic one: It will have as good as zero impact on the Eton/Hooray Henry crowd, who become the adult movers and shakers that you, and others on here, regard with disdain. Where is will/does have an impact is on the offspring of folk who might have their feet more on the ground than the HH's and might encourage their kids, who I will agree have had a significant head start, to seek employment in more worthy professions than investment banking, insolvency or God help us politics. Those kids' potential will now be dulled by exactly the lack of facilities you mention, not to mention more urgent issues like avoiding being knifed

[swaledale]

To personalise this a bit more I went o a boarding school aged 11-18 not by virtue of my parents having the cash to pay but because I got at (an approximate) 97% scholarship. The resiual fees my parents paid were less than it would have been to feed me annually! I hated boarding and would not impose that on my own children but nonetheless paid for them to go to a fee paying day school. Not massive sums and certainly accessible to many people with lower earnings than I.

Why? Well in my case the local secondary school would have been (in todays terminology) in extreme special measures, had just become a comprehensive and was about 6 miles away with very limited public or school transport. With both parents working farmers that would have been a huge problem. So I like to think that I got rA's so called privilege by virtue of attaining a massive scholarship by working hard myself, not because of family wealth. That scholarship was open to all, so non discriminatory.

So why did I pay for my kids to go private. Again the local state secondary was in special measures and later wnt through a complete retooling and renaming as its reputation was so appalling in the local community. The other "free" option was a faith school which required parents to prove their children were worthy of a place because they attended whatever faith places of worship that were appropriate - and required proof from the "vicar". It didnt discrimninate between religions, but you had to follow one. I toyed with the idea of applying on the basis of being a satanist......but no.

So in neither generational case of use of fee paying education was any of this through privilege or wealth but rather a lack of options. Had their been a decent school in my area Id not have paid for an education for my kids...but I wasnt going to put them through the state system: one of my sons friends at primary school shot himself dead after 3 years at that state school as a result of severe, unregulated bullying.

In summary then I went to private school because the alternatives were poor, impractical and the private option was cheaper. I made enough money to keep my own children away from awful options. Im sure there are many other schools in the state system like those my kids had available, Im not suggesting suicides amongst 13-14 year old students are unique to this area, but we could just about afford it and it was a choice I made.

I appreciate that there are some that will claim not to be able to afford to give their kids a better education - but it was interesting to see kids whose parents would drop them off in a (most likely second) Mercedes or BMW at primary school subsequently sending their kids to a failing secondary school. People who pay for education do it by choice, deciding to use their hard earend net income in the way they want to - others may spend it on holidays, consumer durables, cars, second homes, beer and fags - whatever they chose. So its a bit harsh to penalise those who prioritise education as their preferred spend.

But such is the politics of jealousy - if I cant afford it because I prioritise spending on myself, then Ill make sure you cant prioritise it my making it unaffordable for all.

All of which is unrelated to VAT, which in principal I dont disagree with. Its more the needle that broke the camels back, rather than the sole cause of private schools closing across the country. What I do disagree with is the apparant spending of the windfall VAT on preschool and childminding etc rather than on resources to fill in the gaps in senior schools created by the increased demands on the state system given by the VAT levy.

But there will always be some who think dragging everyone down to the same bad standards is better than having some do better than others. And equally there will always be some idealists who (in my view misguidedly) think you can continue raising taxes to attain nirvana for all. An interesting stat last week contextualises it - that more money is spent on benefits than is collected in income tax in UK. And that isnt because income tax rates are low

"An interesting stat last week contextualises it - that more money is spent on benefits than is collected in income tax in UK. And that isnt because income tax rates are low[/QUOTE]"

Except it doesn't, as 50% of what are classed as benefits are pensions, which is down to an aging population and that population living longer, thought the living longer seems to be tailing off a wee bit.

Drill down even further and one will find over 65's account for over 40% of the NHS budget and then of course there is the social care budget.

Its also worth adding context, in that the expenditure on benefits (inc pensions) is greater than income tax, there are of course other significant taxes collected by the government.

Of course project fear, did point out that with a faling birth rate and aging population, the number of employed people paying income tax/NI required to pay future pensions would fall and thats exactly whats happening as well.

Meanwhile a large proportion of those very people who are in receipt of both a pension and NHS treatment seem happy to vote for a party whose leader has more than once said he'd look at private provison for both and proposes even more draconian immigration controls, whilst being funded by dodgy billionaires based overseas who pay little or no UK tax. Truly Trkeys vote for Christmas sometimes!

[MadAmster]

Just thinking out loud. You take the VAT from private school fees and spend it on places in schools/pre schools that would free time up for parents, both couples and singles, that would make seeking and finding gainful employ easier or simply possible. They earn money, pay income tax. Getting those people into jobs will also mean they have more spending power to buy more goods and services than they previously could. That extra demand would likely create more jobs for more people, More tax revenue. More people with money to buy more goods and services and thereby creating yet more jobs...

Seems like a good idea to me. Now, will HMG actually do it?

[Geoff Parkstone]

"An interesting stat last week contextualises it - that more money is spent on benefits than is collected in income tax in UK. And that isnt because income tax rates are low

"

Except it doesn't, as 50% of what are classed as benefits are pensions, which is down to an aging population and that population living longer, thought the living longer seems to be tailing off a wee bit.

Drill down even further and one will find over 65's account for over 40% of the NHS budget and then of course there is the social care budget.

Its also worth adding context, in that the expenditure on benefits (inc pensions) is greater than income tax, there are of course other significant taxes collected by the government.

Of course project fear, did point out that with a faling birth rate and aging population, the number of employed people paying income tax/NI required to pay future pensions would fall and thats exactly whats happening as well.

Meanwhile a large proportion of those very people who are in receipt of both a pension and NHS treatment seem happy to vote for a party whose leader has more than once said he'd look at private provison for both and proposes even more draconian immigration controls, whilst being funded by dodgy billionaires based overseas who pay little or no UK tax. Truly Trkeys vote for Christmas sometimes![/QUOTE]

Mea Culpa. Hadn't appreciated pensions included in the benefits total. But still more money spent on non working people than generated by those in work. Of course there are also VAT, corporation taxes, inheritance taxes SDLT etc but that has to fund (but doesn't) all other government costs.

The fascinating dynamic here is in the supply/demand for labour (and hence income taxes) is very volatile in both supply and demand. Supply - we have a lot of graduate unemployment yet a growing demand for imported labour (legit immigration). At the same time we face massive long term falls in demand for labour due to AI. So personal income tax contributions are inevitably falling whilst redundancy in the workforce rises further.

How to tax AI??

How can an economy in the conventional sense survive the changes driven by essentially technology making people irrelevant. The dystopian future may not be that far away and it.would maybe enforce equitable distribution of wealth created by machines??

God knows, glad it's not my problem to resolve

[MadAmster]

Ewe n me both GP.

[Geoff Parkstone]

Swale: "Meanwhile a large proportion of those very people who are in receipt of both a pension and NHS treatment.."

Speakinga one with feet in both of those camps, having signed on for my syate pension this week I have to say that, even with mortgage paid off and kids independentm there is no way I could live on it. Its just a bit of jam and might generate 15% of what my available total pension pots could provide.

So I have to say that I think private pensions savings for everyone is a big success and indeed necessity - no way the state pension could ever hope to meet peoples aspirations for a life in retirement; thankfully future generations of pensiones will have been saving long enough for retirment (along with employers contributions) to slowly ease the drain on the state system, coupled by the abolition of the triple lock perhaps.

As for NHS, another insoluble one I fear - funding will forever increase due to an ageing population and wage demands in a very labour intensive environment - perhaps at the caring end of the spectrum AI cannot replace nursing, so there will be a few jobs safe for humans! So to the extent people can and do take up private medical cover, thats good news for the NHS as it eases the burden a little.

For me however, private medical is now financially impractical. If I had renewed last birthday the cost would have exceeded my net after tax state pension. Bearing in mind Ive contributed to the NHS cost via NI and taxes all my life, its a no brainer to rely on NHS and my last 18 months of close up experience show that the service is first class (not so the food!) for all the criticism it gets. So I now self insure - if I need urgent treatment I have saved enough to pay myself to skip the queue. Call me lucky, not all can, or call me financially judicious to save for such ability. Which brings us back to private education: its just the same logic - I have chosen to be able to buy something I want rather than spend on more perhaps frivolous things.

And in another slightly oblique note we now hear that the country's navy is in no state to defend the country should it be called on to do so - not fit for purpose. This is no real surprise though, is it, as the navy havent been able to defend the country against unarmed invaders in rubber dinghies for several years.....

[swaledale]

"

Except it doesn't, as 50% of what are classed as benefits are pensions, which is down to an aging population and that population living longer, thought the living longer seems to be tailing off a wee bit.

Drill down even further and one will find over 65's account for over 40% of the NHS budget and then of course there is the social care budget.

Its also worth adding context, in that the expenditure on benefits (inc pensions) is greater than income tax, there are of course other significant taxes collected by the government.

Of course project fear, did point out that with a faling birth rate and aging population, the number of employed people paying income tax/NI required to pay future pensions would fall and thats exactly whats happening as well.

Meanwhile a large proportion of those very people who are in receipt of both a pension and NHS treatment seem happy to vote for a party whose leader has more than once said he'd look at private provison for both and proposes even more draconian immigration controls, whilst being funded by dodgy billionaires based overseas who pay little or no UK tax. Truly Trkeys vote for Christmas sometimes!

Mea Culpa. Hadn't appreciated pensions included in the benefits total. But still more money spent on non working people than generated by those in work. Of course there are also VAT, corporation taxes, inheritance taxes SDLT etc but that has to fund (but doesn't) all other government costs.

The fascinating dynamic here is in the supply/demand for labour (and hence income taxes) is very volatile in both supply and demand. Supply - we have a lot of graduate unemployment yet a growing demand for imported labour (legit immigration). At the same time we face massive long term falls in demand for labour due to AI. So personal income tax contributions are inevitably falling whilst redundancy in the workforce rises further.

How to tax AI??

How can an economy in the conventional sense survive the changes driven by essentially technology making people irrelevant. The dystopian future may not be that far away and it.would maybe enforce equitable distribution of wealth created by machines??

God knows, glad it's not my problem to resolve[/QUOTE]

Which brings us back neatly to my post a fair while ago about a Universal basic income, I mean with some of the benefit system we almost have that now for the uemployable.

There are any number of practical ways the economy COULD chnage to take account of technology and changing circumstances, the question is will those (less than 2% of thepopulation) who are growing ever richer from the current system be willing to make that change?

If one looks back at how the world of work and the economy has changed over the deacades, its clear that the benefits of technology economically have been to increase profits - viz, automation, reducing labour costs.

Back in the mid to late 70's the talk was how technology would reduce the working week and change working patterns, with increased leisure time. Yet here we are 40 years plus later, stuck with a 5 day working week, arguing about working from home and flexible working. While the mega rich have got even richer.

If one looks at how technology has changed everything from banking, buying transport tickets, shopping etc. etc. How much of this (with perhaps the exception of budget airlines) has benefitted either the employee with higher wages or the consumer with lower prices? The answer largely is it han't, one pays full price for your grocery shop and check it out yourself or at the moment go to a staffed checkout (assuming one is manned).

I do ask myself time and again, if one has many millions, how much more does one need? Why this compulsive obsession with obtaining more money than one needs and then being obsessed with not paying any more tax than one has to.

I say this as one who has just had his P60 for last year and added up how much tax I as a retired person paid last year. Its a fair wack, but not one that I begrudge.

Maybe the super rich think they can withdraw to thier gated communities and fend off the ravening hordes in future years. Or maybe they will find that they depend an awful lot on us proles they despise?

[ramAnag]

For me however, private medical is now financially impractical. If I had renewed last birthday the cost would have exceeded my net after tax state pension. Bearing in mind Ive contributed to the NHS cost via NI and taxes all my life, its a no brainer to rely on NHS and my last 18 months of close up experience show that the service is first class (not so the food!) for all the criticism it gets. So I now self insure - if I need urgent treatment I have saved enough to pay myself to skip the queue. Call me lucky, not all can, or call me financially judicious to save for such ability. Which brings us back to private education: its just the same logic - I have chosen to be able to buy something I want rather than spend on more perhaps frivolous things.

I think it’s a combination of both, GP. You’re fortunate to be in that financial position but you’ve been financially judicious in having the foresight to save for such eventuality.

What I’d like to avoid is the U.S. system which I came into contact with approaching eight years ago when my eldest son was seriously ill. His treatment and accommodation were both excellent (although oddly the food was still as you describe) however within six months he’d run up a bill for 1m USD! All fine for him because he was a well paid executive and everything was covered by the company. That is something I was enormously grateful for, but what of those who aren’t in that privileged position? Think we both no the answer to that one.

As regards private education…you’re right, you paid for a service rather than spending on more frivolous things. Without knowing the nature of your state provided alternatives I can’t comment on the wisdom, or otherwise, of that, but certainly your choice entirely. The original question however was about VAT and my added one was, shouldn’t the proverbial playing field - where both health and education are concerned - be levelled a little more?

[Geoff Parkstone]

"I do ask myself time and again, if one has many millions, how much more does one need? " Need or want? If you plan to buy a football club, plenty? At some point aspiration likely becomes an obsession.....why else are you or I still working?

As for saving tax - well you can save it short term but when you are dead the Treasury rape and pillage you. That hard earned pension pot you have saved for will soon disappear at up to 60% roughly. Yes the mega rich will find ways and means, but for the "average hard working guy" pulling down say 100-150k a year any tax planning will likely more defer the tax than avoid it. Low income earners dont pay that tax, high income earners likely can delay or avoid it. Thos in the middle are screwed one way or the other. Inter generational wealth is rapidly becoming a thing of that past for most people so it you want to leave anything substantial to your kids then you probably do need "that one more million".