So, how will you be taking advantage of the new freedoms?

Reports this morning that  Public Sector pay freeze is on the cards again.  This is grim news for  places like ours (who engage in Corona Virus Research).  Austerity never ended for us (as it did for Dr's, Teachers  and all the others that could muster a high profile public profile). We have had a pay freeze and ongoing cuts in real wages for a decade.  Recruitment is already virtually impossible.  I guess the economic carnage following this might help that situation  - even if wages are back to being completely frozen.

Of course,   if you want to restart the economy,  freezing the wages of a  huge slice of the economy isn't the way to go but the level of Govt. debt may mean that have no choice.

Meanwhile this car crash continues

https://uk.reuters.com/article/us-health-coronavirus-brazil-cases/brazil-coronavirus-cases-surpass-germany-idUKKBN22O3BQ

Not at all at the moment, is the answer! I'm missing the wolves terribly but as only two volunteers at a time are allowed for one day a weekend... it'll be a long time before I'm back there.

How will we be paying for all this? The Telegraph has a couple of articles this morning based on some leaks.

"could require measures including an increase in income tax, the end of the triple lock on state pension increases and a two-year public sector pay freeze."

"The document advises Mr Sunak that it is now likely to become necessary to break at least one of the Conservatives' key manifesto pledges not to increase taxes or scrap the triple lock on state pension rises.

It states: "To fill a gap this size [in the public finances] through tax revenue risers would be very challenging without breaking the tax lock. To raise fiscally significant amounts, we would either have to increase rates/thresholds in one of the broad-based taxes (IT, NICS, VAT, CT) or reform one of the biggest tax reliefs (eg pensions tax)."

https://www.telegraph.co.uk/politics/2020/05/12/exclusive-treasury-blueprint-raise-taxes-freeze-wages-pay-300bn/

How would I do it? Well, assuming that everything's fair game I would:

Scrap HS2

Scrap higher-rate pension tax relief - 20% for all

Increase CGT to 20% and decrease the allowance to £10,000

Increase dividend tax to 20% and remove the allowance entirely

Remove the £1000 interest allowance

Decrease ISA limits to £15000 a year in total

Remove the housing allowance from IHT ot reduce IHT allowances to £250,000 per person.

If more were needed...

Scrap the pensions triple lock

Decrease the higher tax thresholds - by £5000 for the 40% rate and £10000 for the 45% rate

Institute a 1% public sector pay rise limit for 2 years, or inflation (whichever is higher), for those earning less than £40,000. 0% rise above that.

Reduce the number of MPs to say 500.

These measures would affect the wealthy more than the poor, but I've a feeling whatever we end up with won't actually do that!

Yes, I noticed this too!

For the past 10 years the "cost of living" increase for support staff (as opposed to teaching staff) at my school has varied between zero and 1%, with just one year - last year - exceeding that (1.3%). This year's "cost of living" increase was zero again. If you want an actual pay rise the only way to get it is via a promotion!

It's been a source of angst that our Trust keeps having to remove support staff payscales as minimum wage keeps catching up (pay band 3 is now the lowest), while teachers have been getting cushy wage rises each year.

My union (Unison) negotiated a 4% payrise, I think it was, over 2 years, but our council (and hence our school) ignored it.

I do think those on low wages in the public sector - of which there are loads, despite what the media would imply, should be given increases still.

(And as I've said many a time, the main benefit of working in the public sector, pandemics aside, is the pension.)

My yearly pay review was due in March - this was scrapped. They will review if they can do this later on in year, but I can’t see it at all. No bonus I suspect as well.

Amusing to see the BBC leading with this:

Coronavirus: Lockdown eased in England as people return to work

Effectively bullshxt! 

Coronavirus: How England's golf courses, tennis clubs and fisheries are preparing for return of sport

Traffic volumes will be up I guess as a number of sports venues re-open.....

https://www.bbc.co.uk/sport/england/52632639

For the lucky ones who managed to secure early tee times, the weather at Perranporth golf course looks pretty good

https://www.metoffice.gov.uk/weather/forecast/gbuq6tz2f#?nearestTo=Perranporth%20(Cornwall)&date=2020-05-13

Sunak has been excellent so far as I said yesterday. However,  the plans to "pay" for the spending are somewhat concerning. There's a lot of the "same old story" about them.

Yes, I think that’s about right.  But perhaps the key point is that the last thing governments and central banks should be doing for the next several years is sucking demand out of their economies via higher taxes: that would just make the recovery slower, weaker and more challenging.

Someone needs to write the new manual for economics beyond a global pandemic. Where’s the modern day Keynes?

Exactly. He’s been imaginative and bold in the moves to bolster the economy; he needs a similarly imaginative approach for the aftermath.

After all, QE has been going on for a decade and more and that hasn’t needed to be reversed.

They need to say this to satisfy the markets and prevent a huge rise in the UK’s borrowing costs and speculation against sterling. But the BoE has made £750billion available from ‘the Ways and Means’ account (money printing). Given the deflationary headwinds are stronger than at any time since the 1870s, there is no reason not to use funny money to pay for the next few months.

I think we needed a "new Keynes"  to sort out the aftermath of the 2008 "Crunch", Peter.  In some respects the world economy has remained broken from that time.  The added   huge shock to an already enfeebled  system is going to prove" interesting"   to say the least.

Could be just me but after reading The Times at brekkie I came away thinking corona virus is sailing off into the distance and it is time to learn lessons and prepare for the future. Does the UK (and other European) government privately think the worst is now past us regardless of social distancing and lockdown policies? I wonder whether there is a suspicion in some quarters that this virus will be self-limiting in its spread for some unknown reason? My understanding was that second wave is likely and it may well be even more destructive than the first. Time will tell.

On my kindle they lead with:

UK economy shrinks at fastest pace since financial crisis

It is not an anomaly. All contact carries risk of transmission. They are allowing some contacts and not others - eventually, hopefully, they will allow all of them. They have (mostly) chosen forms of contact which help the economy - that is the key driver of this and rightly so.

Agreed. Given there’s neither demand push nor price increases on the horizon the mechanisms that drive inflation are absent. 

Maybe an analogy is large faults appearing after a major earthquake: pouring concrete into the cracks doesn’t produce a mountain, it produces level ground.

The Times is talking about a house price correction of 20% to 30% or more - negative equity looms for many.

.... or just disappears into a magma chamber

You’ve watched too many Hollywood disaster movies.

😉

I don't think there will be a significant second wave, at least not during the summer. In other news, the Institute of Actuaries have also estimated the covid related excess deaths in the UK to be ~60,000 to date.