I have been reading the various messages and responses to the property crash thread, some saying yes, some saying that property can only go higher. I was reading on the web and came across the following article. What effect do you think this have (if any) on the UK housing market?
THE average British worker?s pay packet has been cut by hundreds of pounds a year as a result of changes to tax and benefits introduced by Chancellor Gordon Brown this year, it was claimed yesterday.
Figures from the Office of National Statistics (ONS) suggested that income fell by 1.3 per cent in April, after the effect of higher National Insurance contributions and inflation were taken into account, the Business newspaper reported. The drop in real income for workers in the private sector was even larger: 1.9 per cent, the equivalent of a £475 pay cut for someone on a salary of £25,000.
The Conservatives accused the government of sneaking the figures out on the ONS website as a correction to earlier, more positive statistics.
But the Treasury insisted that British households were better off under Labour by an average £775 a year in real terms, compared to
1997.
The NI contributions had been designed specifically to pay for the widely supported boost to spending on the NHS, a spokesman said.
The ONS Tax and Price Index shows the spending power of average salaries after tax and inflation have been taken into account.
The higher the index is, the worse for employees. The new revised figures showed a 4 per cent annual rate for April, compared to the 1.5 per cent previously published, the Business said.
An ONS spokesman told the paper: "The revisions are due to a shortfall in the data on National Insurance contributions supplied [by the government] for the calculation of the Tax and Price Index."
Michael Howard, the shadow chancellor, said: "Under Labour, people?s incomes are now falling. Families up and down the country are paying the price for Labour?s 60 tax rises and Labour?s failure to reform the public services.
"This is the proof that Labour are taxing and spending and failing.
"Under Gordon Brown and Tony Blair, we are getting the worst of both worlds - higher taxes but without the public service improvements we were promised," he added.
"I will be writing to the ONS to demand to know why this crucial information was released in the way it was."
A Treasury spokesman said the revised figures did not alter the fact that families were doing better under Labour.
By October this year, the average household will be £775 better off in real terms than in 1997, while the average household with children will be £1,200 better off, he said.
A family with one earner on half average earnings and two young children was £3,430 better off and the direct tax burden on such a family would be lower this year than any year since 1980.
Mr Brown?s changes to the tax and benefit regime meant that a working couple with two children effectively paid no tax until their annual income, including child benefit, reached £19,800, he said.
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It is puzzling that they would compare the standard to 1997. I understand the whole Conservative / Labour thing but comparing standards over a 6 year gap is a bit of a stretch no? I would think that even the most uneducated person would understand the cumulative effect of yearly increases in GDP and efficiency, no? Are there any studies that focus on the past 2-4 years? I am interested as many friends are doing the buy-to-let thing and from what I've learned in Economics, economic contraction leads to more resident per home rates thus softening the retail market for homes.
Stephen.
Stephen.