How will the VAT cut be funded?

Where did the £340 million figure come from?

Whether or not the ID scheme was funded, the money would have had to come from somewhere, and now it won't?

I think that reducing rough sleeping is a more achievable target than eradicating it, as there are those who don't want to live in houses, but if it is reduced to a minimum that would be great, so I wouldn't be nit-picking, and I've never felt that perfect should be the enemy of good.

Prime Minister Andy Burnham: Announced the £340 million pledge as a day-one funding commitment in his July 2026 speech outside 10 Downing Street to tackle rough sleeping.

In addition Ancoats is being transformed into a northern hub of UK governance, with a major £310 million Manchester Digital Campus currently under construction on the site of the former Central Retail Park off Great Ancoats Street.Key details of this development include:
The Project: The new campus will house nearly 9,000 civil servants and will serve as the permanent "No 10 North," acting as the nerve centre for a rewired British government.

Ideally, a good idea to have political work going on in the North instead of just London.

Cynically, I’ve already read that
, civil servants relocating from London to Manchester as part of the government's regionalisation plans (such as the 'No 10 North' initiative) are generally eligible to claim relocation expenses, provided they meet standard Civil Service criteria.
And an increase in travel expense claims etc for MPs.

I have already posted elsewhere that Darren Jones had already said that the cost of the ID scheme was going to come from existing budgets. See point 18 here:

committees.parliament.uk/publications/53099/documents/297132/default/

I don’t know where that was going to be but, for example, £2.5 billion Pension Credit goes unclaimed each year. Unspent funds allocated for the benefit remain with the Treasury and are absorbed into the general government budget. This surplus is then redirected to fund other public services or offset government borrowing.

£340 million to address rough sleeping is from the government press release. It’s peanuts in terms of overall government spending.

The new funding, which represents the opening investment, will provide 1,200 homes and intensive support for at least 3,000 people.

www.gov.uk/government/news/new-pm-says-government-can-bring-back-hope-to-britain-and-launches-drive-to-end-rough-sleeping-at-the-earliest-opportunity

If people want to see this in terms of cost per person as we all pay tax in one way or another, there are 55 million adults in the UK. It would cost everyone just £6 in tax to support 3,000 people who need help.

It is literally less than the tax on two bottles of wine from the supermarket. So if we all get £45 tax off our energy bills and spend it on four £10 bottles of wine, we would be putting over £18 each back in to Treasury.

Did AB say it would cost £340 million? I'm not disputing that, incidentally - my MIL is in hospital and we've been back and forth for the past few days, so I catch up on the news as best I can, but inevitably miss details.

As for the VAT cut, I don't think everything needs to be 'costed'. I'm sure Maisie will explain better, but in my simple terms I assume that shaving a bit off here and there will do it. Or he could put more tax on wine, which would have the added advantage of reducing costs to the NHS for alcohol-related issues . Where there's a will.

For now, I'm happy to get a feel for the ambitions of the new government. When we get the detail, when Parliament reconvenes in six weeks or so, we can worry about whether we think things will work, but it will take much longer than that to see whether or not they have.

To me, there is such a refreshing difference between someone who is concerned about homelessness and (or rough sleeping, which is a bit different) and making life better for people compared to someone who is determined to have Austerity, regardless of its brutality, with no care for the people who suffer. Yes, it has to happen, and no, it might not all slot neatly into place, but I'm happy for now to see the aim, before I worry about the objectives, the strategy and the tactics. This is only Day 2, after all.

It is literally less than the tax on two bottles of wine from the supermarket. So if we all get £45 tax off our energy bills and spend it on four £10 bottles of wine, we would be putting over £18 each back in to Treasury.

It would go further than that. The business we bought thecwine from would be taxed on the profit it made from it after taking some of for its costs. As its costs would include paying its staff they would have income tax taken off their pay. And If the staff bought some goods and services the same taxation would be applied until, voila! the £45 would be taxed out of existence and it would all be back with the Treasury. (unless somewhere along the line someone saved some of it).

It would be so much better if people weren’t obsessed with ‘how is the government going to pay for it’ and thought instead about how much its actions will benefit society.

The government is not like a household, it can create its own money, it can pay for anything it wants to.

Exactly, Maizie. I did say similar on another thread about all the other kinds of tax yield when we spend.

I like using wine as an example since I came across this graphic from Bibendum.

Just wanted to say how much I liked these words,

"I've never felt that perfect should be the enemy of good."

ie, people grumble because say all targets aren't met, but a lot has been done. "Good enough" is a better marker of progress.

Graphite

I have already posted elsewhere that Darren Jones had already said that the cost of the ID scheme was going to come from existing budgets. See point 18 here:

committees.parliament.uk/publications/53099/documents/297132/default/

I don’t know where that was going to be but, for example, £2.5 billion Pension Credit goes unclaimed each year. Unspent funds allocated for the benefit remain with the Treasury and are absorbed into the general government budget. This surplus is then redirected to fund other public services or offset government borrowing.

£340 million to address rough sleeping is from the government press release. It’s peanuts in terms of overall government spending.

The new funding, which represents the opening investment, will provide 1,200 homes and intensive support for at least 3,000 people.

www.gov.uk/government/news/new-pm-says-government-can-bring-back-hope-to-britain-and-launches-drive-to-end-rough-sleeping-at-the-earliest-opportunity

If people want to see this in terms of cost per person as we all pay tax in one way or another, there are 55 million adults in the UK. It would cost everyone just £6 in tax to support 3,000 people who need help.

It is literally less than the tax on two bottles of wine from the supermarket. So if we all get £45 tax off our energy bills and spend it on four £10 bottles of wine, we would be putting over £18 each back in to Treasury.

Mr Darren Jones was given The Order of The Boot.

Not that he's a bitter person. Of course.

Thank you everyone for so many well informed answers. I'm not sure you need the OPs sneered at "experts" when we have this quality of research!

Aspirations are often quoted by politicians - even those the OP might support. I would hate to find we had a party in power which didn't have any aspirations for those worst off in society.

It sounds as if the bond market has been cautious but definitely not panicked by the announcements.

Many governments, including the US, UK, France, and Japan. are running sizeable fiscal deficits. With more bonds being issued worldwide, investors have plenty of choice and generally require higher yields to absorb the increased supply.

The appointment of John Healey as finance minister (rather than a more left-leaning alternative that some investors had feared) was generally viewed as reassuring. Healey is seen as relatively pragmatic and likely to maintain the existing fiscal framework, even if spending priorities shift. That helped reverse some of the initial weakness in sterling and prevented a larger sell-off in gilts.

Most bus fares to be capped at £2.

Still going in the right direction of travel😊

Investors have been reassured by Burnham policies so far and sterling has retained its value, he is well aware that any large spending plans have got to be announced with the funding plan attached to it.
VAT concession is small and can easily be afforded, other changes announced are going to need serious funding there are plenty of ways to do that, taxes will rise, economies in some areas and borrowing are all available.
Let's make no mistake if you are above average income/wealth including pensioners it is going to be painful, lower down there will also be winners and losers.

Doodledog, that is a great phrase, about perfect being the enemy of good.

"The government is not like a household, it can create its own money, it can pay for anything it wants to."

Here we go again, NO thats Neoliberal thinking it has been proven to fail over 50 yrs.
Thankfully Burnham accepts that and has ruled out increasing borrowing as did Starmer

It seems likely that keeping the Income Tax Threshold cemented at £12,570 until 2031 - as dictated by Ms Reeves - will go a long way to pay for it.

Looks like dependency on foodbanks is here to stay then.

It didn't take long for that particular rumour to U-turn.

Can rumours ‘U-turn’? Are they not just ‘wrong’?

I would like to see the threshold increased, but as long as people keep asking how Larry the cat’s food has been costed, I guess it might not happen.

That’s the problem with rumours though - they aren’t the same as actions.

DaisyAnneReturns

Thank you everyone for so many well informed answers. I'm not sure you need the OPs sneered at "experts" when we have this quality of research!

Aspirations are often quoted by politicians - even those the OP might support. I would hate to find we had a party in power which didn't have any aspirations for those worst off in society.

Interesting that you see it as a sneer DAR.
I simply meant that there are SO many experts on Gransnet and I was asking for their input on the questions I asked.
If you read the responses, you’d see I was right, so no real need for your snide remark, but I guess you enjoyed it. 😄

I think it was the use of the word experts. What there are here are some well- informed posters, I doubt any of them would describe themselves as experts.. I’m not sure the SO was needed either. What was wrong with saying ‘I don’t understand how the VAT cut is being funded. Can anyone explain please?’ That has a very different tone,

Wyllow3

Just wanted to say how much I liked these words,

"I've never felt that perfect should be the enemy of good."

ie, people grumble because say all targets aren't met, but a lot has been done. "Good enough" is a better marker of progress.

I agree.

If only people had been ‘generous hearted’ and patient enough to apply that adage to KS’s premiership.

I realise my view will be very unpopular on GN at the moment … but it is still my view.

I notice this morning that inflation is down more than expected - thanks to AB after two days (?) or KS after two years (?). Mm, which could it be I wonder🤔

Lizzie - I do honestly appreciate your position . I don’t think I’m alone in being positive about AB because that’s where we are whilst lamenting the loss of KS and the appalling way he ( and others) were treated by the media. Of course inflation being down ( and the unemployment figures stable earlier this week) are due to KS and RR . We see the pattern being repeated already with AB. The sneering by those with enough resources at £45 off electric bills, the sneering at £2 bus fares as small beer. The deliberate misrepresentation of the rough sleepers figures in Manchester. It’s all so achingly familiar all over again and it’s only day 3. Yes I know he chose it but he’s what we’ve got now. I listened to Mel Stride on Today this morning - that’s part of the alternative. And that’s also why I thought Darren Jones behaved badly

No mention of the elephant in the room, immigration, so far.
I read mentioned of rises in fuel tax in the Autumn so that would raise some funds. I think the first budget after the summer recess rather than second guessing should set it all out in detail.

Despite all the rhetoric, migration is a much smaller elephant in the room than it was. It is all going in the right direction quite rapidly. Here’s the latest migration tracker.

www.bbc.co.uk/news/articles/c70989jrdweo

Casdon

Despite all the rhetoric, migration is a much smaller elephant in the room than it was. It is all going in the right direction quite rapidly. Here’s the latest migration tracker.

www.bbc.co.uk/news/articles/c70989jrdweo

Thanks for the link - the problem these days is that some people simply don’t want to believe the truth because it doesn’t fit with what they want to be true.

I love the thought of a small elephant in the room .

I share your view, Tuliptree. I would have much preferred it if there hadn't been the constant sniping at Starmer and he had been given a chance to see things through, but he wasn't, and if we are to have a chance at undoing some of the damage wrought over the 14 years of Tory rule there had to be a change, and IMO Burnham is a good choice.

Tearing him down before he's had a chance to do anything isn't going to help. At best it's petty, and at worst it will do the same to him as was done to Starmer, and the likes of Putin will be laughing at the way the UK is destroying itself.