If it was up 2 me

Category: Rachel Reeves

  • Pay Increases vs Inflation in 2025: Who Really Benefits?

    Pay Increases vs Inflation in 2025: Who Really Benefits?

    A Critical Look at Government Claims and the Real Economic Impact

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    Introduction

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    In 2025, the government has asserted that rising pay combined with falling inflation is a win-win for everyone. However, a closer examination reveals a more complicated picture. With average pay rises of 6.6% in the public sector and 4.2% in the private sector, set against an October inflation rate of 3.6%, it is vital to assess whether these increases genuinely benefit workers, and to explore the broader implications for the economy.

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    Pay Rises in 2025: Public vs Private Sector

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    The figures for 2025 paint a tale of two economies. Public sector workers have seen average pay increases of 6.6%, while their private sector counterparts have received an average 4.2% rise. At first glance, both groups may appear to be better off – their nominal pay packets have grown compared to the previous year.

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    However, these headline numbers do not tell the full story.

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    Inflation Context: The October 2025 Rate

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    Inflation, the general rise in prices, stood at 3.6% in October 2025. This means that, on average, the cost of goods and services increased by 3.6% over the previous year. For a pay rise to deliver a real-terms increase in living standards, it needs to outpace inflation. Anything less, and workers may find their extra income is simply absorbed by higher prices.

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    The Impact of Tax, National Insurance, and Pensions

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    Most workers do not receive the full benefit of their pay increases. Standard deductions include income tax (20%), national insurance contributions (8%), and typical pension contributions (5%). Combined, these deductions reduce the headline pay rise by around 33%. In effect, only two-thirds of any pay increase actually reaches workers’ pockets.

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    For example, a £1,000 nominal pay rise leaves just £670 after deductions. This significant reduction means that even a pay rise which appears healthy on paper may not be enough to keep pace with rising costs, especially for those in the private sector where increases are already more modest.

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    Public vs Private Sector: Who Gains, Who Loses?

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    Once deductions and inflation are taken into account, the real-terms situation becomes clear. Private sector workers, with an average 4.2% pay rise, see their increase reduced to roughly 2.8% after deductions. Since this is lower than the 3.6% inflation rate, their real income has actually fallen – their pay does not stretch as far as it did last year.

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    Public sector workers, on the other hand, fare slightly better. Their 6.6% average pay rise, reduced by one third, results in about a 4.4% net increase. After accounting for inflation, public sector workers enjoy a real-terms pay rise of around 0.8%. This is only possible because public sector pay is directly funded by the government, which can make policy decisions to support higher wage settlements.

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    The Employer National Insurance Factor

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    For private sector employers, pay rises are not just a matter of higher wages. They must also pay employer national insurance contributions on increased salaries, adding further costs. This additional expense can lead employers to restrict pay rises, limit hiring, or even reduce jobs. As a result, the private sector faces a double squeeze: rising costs and limited ability to pass on pay increases that match inflation.

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    Economic Consequences: Shrinking Private Sector, Public Sector Pressures

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    The uneven distribution of pay rises has wider economic implications. If private sector pay lags behind inflation, workers’ purchasing power drops, which can suppress consumer spending and slow economic growth. Fewer jobs or lower pay in the private sector also mean less tax revenue and higher welfare costs for the government.

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    Conversely, sustained above-inflation pay rises in the public sector, funded by the government, raise questions about long-term sustainability. With public finances already under pressure, continued high wage settlements and generous pension commitments could strain budgets, potentially leading to higher taxes or cuts in services elsewhere.

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    Summary and Conclusion

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    The government’s claim that rising pay and falling inflation benefit everyone does not bear out under scrutiny. In 2025, private sector workers are losing out in real terms, as their take-home pay increases lag behind inflation after deductions. Public sector workers are better protected, but only because government funding has enabled pay rises that outpace inflation – a situation that may not be sustainable in the long run. We cannot keep increasing taxes on the private sector to cover the public sector. You will end up with no workers.

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    The knock-on effects include increased pressure on private sector employers and potential job losses, alongside growing fiscal challenges for the public sector. In reality, the benefits of rising pay and falling inflation are unevenly distributed, and both employees and policymakers must recognise the complexity behind the headline figures if they are to make informed decisions about the country’s economic future.

     

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    • Stamp Duty, Main Residence, and Angel Ryner : A Call for Reform

      Stamp Duty, Main Residence, and Angel Ryner : A Call for Reform

      email = ifitwasup2me@hotmail.com

      Examining the complexities of property taxation and public trust in the light of recent controversy

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      Introduction

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      Stamp duty remains one of the most contentious aspects of property ownership and transfer in the United Kingdom. The rules around what constitutes a main residence, and the additional charges levied upon second homes, have seen both genuine confusion and, at times, alleged exploitation. In recent weeks, the case of Angel Ryner, a prominent public figure, has brought these issues to the fore—her reported declarations regarding her residences in Hove and Manchester have raised questions not only about the technicalities of stamp duty law, but also about the responsibilities of those in the public eye to act transparently and in good faith.

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      The Situation: Angel Ryner and Dual Residences

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      To understand the current controversy, it is first necessary to lay out the facts as they have been reported. Angel Ryner, who owns a home in Manchester, has recently acquired a new property in Hove. Reports indicate that she has declared her Hove residence as her main home, thus avoiding the additional stamp duty that would ordinarily be due on the purchase of a second property. The UK’s stamp duty system imposes a surcharge on additional residential properties purchased by individuals, a measure intended to discourage speculative buying and to aid first-time buyers in a competitive market.

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      However, complicating matters is the fact that Ryner has not sold her Manchester property, nor has she expressed any intention to do so. For many, the declaration of a new main residence would typically follow the sale of a previous home, or at least a clear move away from it. In Ryner’s case, speculation abounds—has she transferred ownership of her Manchester house to her children, perhaps via a gift or a trust, in order to sidestep the rules? Or has she, as some allege, made contradictory statements about her place(s) of residence, potentially claiming both as her main home in different contexts?

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      Main Residence: Definitions and Dilemmas

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      The concept of ‘main residence’ is pivotal in stamp duty calculations. HMRC guidance states that an individual’s main residence is the property where they spend most of their time, where their family lives, and where they are registered for things like voting and healthcare. Yet the rules leave room for subjective interpretation, and in cases involving multiple properties, determining which is the main residence can be fraught with ambiguity.

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      In Ryner’s case, the Hove property is over 250 miles from her constituency, raising further questions about her connection to the community she represents. If she continues to own—and perhaps even occupy—the Manchester home, how can she credibly declare Hove as her main residence for stamp duty purposes? The lack of clarity is problematic not only for tax authorities but also for constituents who expect their elected representative to live amongst or close to them.

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      Speculation and Legal Loopholes

      It is worth emphasising that, without direct evidence, any conclusions about Ryner’s intentions must remain speculative. Nonetheless, the possibilities are instructive. Transferring ownership of a property to children or placing it in a trust are legitimate means by which individuals can alter their stamp duty liabilities.

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      Should Ryner have gifted her Manchester home to her children, she could then declare her new Hove residence as her sole main home, thereby avoiding the surcharge. Of course, such arrangements must be genuine and not simply paper exercises, as HMRC is empowered to investigate cases where the spirit of the law may have been breached.

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      Yet, if Ryner has made public or official statements affirming both properties as her main residence, she risks not only legal repercussions but also significant damage to her reputation. Dual declarations would suggest a deliberate attempt to benefit from contradictory tax treatments, an act that would undermine public confidence and, some argue, should prompt her resignation.

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      London Accommodation: A Red Herring?

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      Further complicating the narrative is Ryner’s accommodation in London. However, given that she does not own the London property, and that living away from home is a requirement for many MPs and professionals working in the capital, this aspect is arguably less relevant to the stamp duty discussion. It is important to distinguish between owned and rented accommodation, and between personal and professional obligations. To focus too much on the London property risks distracting from the substantive issues around main residence and second home taxation.

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      The Public Interest: Constituency and Representation

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      The question of residence is not merely a fiscal matter. For Ryner’s constituents in Manchester, the knowledge that their MP’s primary home is hundreds of miles away is understandably disquieting. Representation implies not only formal duties but also a genuine connection to the locality. While parliamentary work may require frequent travel and periods spent elsewhere, a fundamental expectation remains: that an MP should understand and share the lived experience of those they serve. The perception that Ryner is no longer a local figure, but rather a distant administrator, is likely to fuel dissatisfaction and calls for accountability.

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      Policy Recommendations: Reforming Stamp Duty

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      Ryner’s situation shines a light on the need for reform. The stamp duty surcharge on second homes was introduced to curb property speculation and to make home ownership more accessible. However, the system’s reliance on the declaration of a ‘main residence’ is open to manipulation.

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      One solution, as suggested in previous articles, is to levy stamp duty not simply on the purchase price of a new property, but on the difference between the sale value of the previous main residence and the new acquisition. In Ryner’s case, as she has not sold her Manchester house, she would be required to pay stamp duty on the full value of the Hove property. This approach would make it harder for individuals to avoid the surcharge by retaining ownership of multiple homes.

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      To further address potential loopholes, a tiered surcharge could be introduced for cases where the value difference exceeds a set threshold—say, £500,000. Most house movers would not be affected, but those acquiring substantial second homes would face higher charges, reflecting their ability to pay and discouraging speculative investments.

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      Inquiry and Accountability

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      Given the public interest and the high profile of those involved, an inquiry into Ryner’s actions would be appropriate. Such an investigation should aim not only to establish the facts, but also to clarify the rules and recommend improvements. Expert advice will be crucial, both for navigating the legal complexities and for ensuring that future policies are robust, fair, and transparent.

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      Conclusion

      The controversy surrounding Angel Ryner and her residential declarations underscores the urgent need to review and reform the UK’s stamp duty system. The current rules, while well-intentioned, are vulnerable to exploitation and fail to address the realities of modern property ownership. As public scrutiny intensifies, so too must the commitment of policymakers to ensure that taxation is equitable and that public representatives are held to the highest standards. Only then can trust be restored, not only in the tax system, but in the democratic institutions it supports.

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    • Stamp Duty – Pay on the difference – Rethinking Stamp Duty: Toward a Fairer, More Dynamic Property Market

      Stamp Duty – Pay on the difference – Rethinking Stamp Duty: Toward a Fairer, More Dynamic Property Market

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      Reading another article on how the Government is thinking of reforming Stamp Duty on Housing, I thought I would reiterate comments in a previous post, which think is a good, logical solution to stamp duty that would open up the housing market

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      The Current Stamp Duty Landscape: Barriers to a Free Market

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      Stamp duty has long been a sticking point for homeowners, buyers, and movers across the UK. While intended to generate government revenue, the present regime often acts as a block on the very dynamism needed for a healthy property market. In previous discussions, I highlighted the specific hurdles this tax creates—especially for the older generations, who, if able to move more freely, could release much-needed homes in popular areas for growing families.

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      The rigidity of the current stamp duty regime means that those looking to downsize or relocate, perhaps to quieter, rural areas or simply to homes that better suit their needs, are often dissuaded by the financial penalty of an upfront, often considerable, stamp duty bill. Similarly, the tax can freeze out those who would otherwise consider moving for work or life changes, as they are faced with repeated payments for making necessary moves. Ultimately, this stifles the natural flow of the market, trapping people in homes that may no longer fit their circumstances.

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      The New Proposal: An Ongoing Annual Tax

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      One recently floated proposal suggests replacing the upfront stamp duty with an ongoing annual property charge—specifically, a tax of 0.54% per year applied to the value of any property over £500,000, but only on the amount exceeding that threshold. While this might seem progressive on the surface, it carries its own set of challenges and inequities.

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      For one, this policy would disproportionately impact homeowners in the south of England, and especially in London, where property values regularly exceed the £500,000 mark even for relatively modest homes. By contrast, those in the north—myself included—are far less likely to be affected, simply due to the regional disparities in house prices. While this may seem like a boon for those of us outside the capital, the principle of fair taxation is paramount. A tax should be equitable, not geographically arbitrary.

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      A New Stamp Duty Approach: Tax the Move, Not the Home

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      To address these issues and unlock the property market’s potential, I propose a more dynamic, just, and effective approach: a stamp duty that applies only to the difference between the value of the property you sell and the one you buy.

      • If you “move up the ladder”—buying a more expensive home than the one you’re leaving—you pay stamp duty on the increase.
      • If you move sideways (buying at a similar price) or downsize (buying cheaper), you pay no stamp duty at all.
      • The tax would only kick in for homes over £250,000, helping first-time buyers and those with lower-priced properties avoid the tax entirely.

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      A suggested rate of 5% applied to the difference would, in my view, generate at least as much, if not more, revenue for the government—precisely because it would remove the current chokepoints that suppress transaction volumes.

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      Breaking Down the Benefits

      • Encourages Downsizing: Older homeowners, no longer deterred by hefty stamp duty bills, would be freer to move to homes that suit their changing needs, releasing larger family homes into the market for the next generation.
      • Supports Mobility: Those whose careers require frequent moves would not be unfairly penalised by paying stamp duty multiple times on properties of similar value. Instead, tax would only apply when they actually “trade up.”
      • Boosts Market Fluidity: Removing these artificial blockers would likely increase the number of property transactions, stimulating the market and supporting related industries from removals to renovations.
      • Fairness Across Regions: By taxing only the value gained in a move, rather than the absolute price, the system becomes less vulnerable to regional price disparities. Taxpayers in high-value areas are not automatically penalised, and those in lower-value regions are not left out of the conversation.
      • First-Time Buyer Relief: Setting the threshold at £250,000 protects those entering the market for the first time, while ensuring the focus remains on higher value, higher-impact transactions.

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      Practical Example

      Consider a family moving from a £500,000 house near a school to a £500,000 bungalow in the countryside. Under the current regime, they might pay as much as £15,000 in stamp duty—simply to move from one home of equal value to another. Under my proposal, they would pay nothing, as the change in value is zero. Alternatively, someone buying a second home for £500,000 without selling another property would pay 5% on £250,000 (the amount over the £250,000 threshold), amounting to £12,500.

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      Conclusion: Unlocking the Market for All

      In summary, a stamp duty system based on the difference between what you sell and what you buy offers a fairer, more efficient, and economically sensible solution to the UK’s property tax puzzle. It encourages mobility, supports families at every stage of life, and reduces artificial barriers that clog up the market. Most importantly, it treats taxpayers across regions with greater equity.

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      As the government considers the next phase of property tax reform, I urge policymakers to prioritise approaches that reward movement rather than punish it, ensuring that stamp duty is a catalyst for, rather than a barrier to, a more vibrant and accessible housing market for all.

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