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    The reason why we have cuts is so that we can use that extra money for war obviously...
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    (Original post by Oswy)
    If you're rich you're more likely to already have those things which those from from less advantaged origins still need to pay for. The obvious example would be property. Rich students sometimes have a flat bought for them when they go off to university - I know because I've met students in this very position. Under these circumstances the rich student's wages don't have to go into a mortgage or rent as easily as they do in the case of a less well-off student. Even in this single example it's easy to see how rich students can easily come out of their university life less financially burdened than others.
    You're correct people from rich backgrounds will have some advantages in life, but that is just the way it is. The government intervening in this department is nothing to do with student loans.

    You don't have to pay it back till youre on 21k, if you're earning that much you're not poor and Uni will have been well worth the money. If you don't like it go somewhere else.
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    (Original post by Oswy)
    I wouldn't necessarily differentiate in that in both terms a 'rich' student or graduate may find their financial burdens eased when compared to one less well-off; if they already own a property they don't have to obtain a mortgage or rent, if they have liquid capital then their salary is less subject to automatic depletion by the need for a mortgage or rent.
    If you don't differentiate then you're saying that a student whos family are shelf stakers for ASDA doesn't need to take out a loan as they are rich due to the family home having appreciated vastly over the last couple of decades.
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    (Original post by -2D-)
    At the end of the financial year of 2009 debt was at 72%
    see http://www.statistics.gov.uk/cci/nugget.asp?id=277
    also the plan was no cuts in the first year so its higher still
    finally 5 years of 2-3% (trend growth) is not going to help much
    Odd, George claims it is 60% by the end of the financial year and will peak at 71%.

    http://www.hm-treasury.gov.uk/2011budget_speech.htm
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    It isn't the fact we have cuts that people have a problem with.
    It is where they are coming and the huge scale and quick pace of them.
    Doing it this way will decimate many services that vulnerable people rely on. The people making these decisions will not feel a thing, as they do not depend on the services they are cutting. What does it mean to an MP if rural bus services are cut, or if support for carers is cut, or if childcare services are cut? Nothing, as they do not use them and can easily afford to pay for alternatives.
    And its totally inconsistant with the "big society" mantra. You can't provide volunteer services if you don't have the money to do so.

    (Original post by goodmen)
    You don't have to pay it back till youre on 21k, if you're earning that much you're not poor and Uni will have been well worth the money.
    Really?
    1 - £21k is a fair bit less than the average UK wage (£25k)
    2 - The amount £21k is as a wage will only decrease as inflation increases
    3 - I'd say if you go to uni to better yourself, and come out only being able to get jobs that pay £21k, I'd say uni was not worth the money.
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    (Original post by GwrxVurfer)
    Ask yourself a question:


    The UK Government borrows their own national currency (Pounds Sterling), and this is known as the "National Debt". But where did the borrowed money originate?
    From other governments, from banks. It's not a hard concept, and it doesn't matter that you're told it's sterling, dollars, euros, flying monkeys. It's a representational value. They haven't literally gone and picked up a couple of tenners from the cash point. Its an amount they owe in many forms of currency to many different companies and countries.
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    Apologies if I've come in the middle of a conversation and got the wrong end of the stick...

    (Original post by WelshBluebird)

    Really?
    1 - £21k is a fair bit less than the average UK wage (£25k)
    2 - The amount £21k is as a wage will only decrease as inflation increases
    3 - I'd say if go to uni to better yourself, and come out only being able to get jobs that pay £21k, I'd say uni was not worth the money.
    1) it used to be £15k
    2) great but don't see how this is different to £15k decreasing
    3) yes i agree. Bettering yourself is entirely about how much money you earn. :rolleyes:

    You have to earn a fair bit more than the average UK wage to end up paying back more money than you would have done with the old system. People on a very high wage will have to pay back more, but a lot of people never even paid back the old loan so over 25 years these people will pay back even less than before. It protects lower earners very effectively. It hits higher earners quite hard, but I don't see much wrong with this.
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    (Original post by hslt)
    Apologies if I've come in the middle of a conversation and got the wrong end of the stick...

    1) it used to be £15k
    2) great but don't see how this is different to £15k decreasing
    3) yes i agree. Bettering yourself is entirely about how much money you earn. :rolleyes:

    You have to earn a fair bit more than the average UK wage to end up paying back more money than you would have done with the old system. People on a very high wage will have to pay back more, but a lot of people never even paid back the old loan so over 25 years these people will pay back even less than before. It protects lower earners very effectively. It hits higher earners quite hard, but I don't see much wrong with this.
    1 and 2 - so? I am not saying anything about how good or bad the new system is compared to the old one. I am just saying that £21k really isn't that much. Especially if you are paying to go to uni.

    3 - True, but a lot of it is about money. Again, especially when university costs money and when it is seen as an "investment".

    4 - It isn't quite as simple as that. If we had a graph of wage against repayments, it would be a nice sloping line. It would be a bell curve. The poorest pay the least (probably less than what they do now), the normal people pay around what they do now (maybe a bit more), the next richest (so middle class probably) will pay back the most, and the very richest will pay back less than the group before them (higher wages = less amount of time to pay it off = less interest added).
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    (Original post by WelshBluebird)
    1 - £21k is a fair bit less than the average UK wage (£25k)
    2 - The amount £21k is as a wage will only decrease as inflation increases
    3 - I'd say if you go to uni to better yourself, and come out only being able to get jobs that pay £21k, I'd say uni was not worth the money.
    Considering we tax people on £8K, then £21K is a ****ing huge personal allowance.

    2. Actually, it's being uprated yearly in line with average earnings.

    3. Why not, if the jobs only pay £21K then you've had 3 good years and you won't pay a penny back.
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    (Original post by Quady)
    How could we raise NHS funding by 50% if we didn't have to pay debt interest?

    We'd have £110bn less to spend...
    What?

    http://cdn.hm-treasury.gov.uk/2011budget_complete.pdf

    Health Spending: £126bn

    So a 50% increase would be an increase of £63bn.

    Debt interest is £50bn.

    We'd be £13bn short, but we could fund an increase of 39.7% in NHS spending if we had no debt interest.
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    (Original post by jesusandtequila)
    Considering we tax people on £8K, then £21K is a ****ing huge personal allowance.

    2. Actually, it's being uprated yearly in line with average earnings.

    3. Why not, if the jobs only pay £21K then you've had 3 good years and you won't pay a penny back.
    1 - What the hell is the personal allowance got to do with anything :confused:
    I was just saying that £21k really isn't that much in the grand scheme of things. A fair bit less than the average wage, and good luck getting a house earning that all your life!

    2 - Link? All I have read is that it would be reviewed yearly. Nothing specifically saying it would increase. In any case, average earnings does not mean inflation.

    3 - Yes you would. If it was £20k you would pay nothing back. But at £21k you would. And I seriously doubt any universitiy student is aiming at earning just £20k for their entire lives.
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    (Original post by RDL445)
    The interest we pay on our debt is twice as big as Law and order budget.

    The NHS budget could be increased by 50% if we didnt have to pay interest on our debt

    At its peak in labour we had to borrow more money just to pay off the interest
    perhapse its the severity of the cuts, and what they are cuting that is the problem?

    For example, I remember reading figures where surry council (and other well off london areas) had a cut of 2% and places that were really struggling had cuts of 8% + (like blackpool)


    Also, I think cutting everything by 20% is going to damage our economy. Cutting by 11% for twice as long would surley be a better solution? (But I'm no economist)
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    (Original post by WelshBluebird)
    1 - What the hell is the personal allowance got to do with anything :confused:
    I was just saying that £21k really isn't that much in the grand scheme of things. A fair bit less than the average wage, and good luck getting a house earning that all your life!
    Sure, but because repayments act like a tax, it can be viewed as one of 9% on earnings over £21K. I'm saying that since we start charging 31% (when you include NICs) of stuff over £8K, it's really bugger all in the grand scheme of things. Many people earn far less than £21K throughout their lives - indeed £21K is close to the median wage.

    2 - Link? All I have read is that it would be reviewed yearly. Nothing specifically saying it would increase. In any case, average earnings does not mean inflation.
    http://nds.coi.gov.uk/content/Detail...1&NewsAreaID=2

    The £21,000 earnings threshold will be uprated annually in line with earnings from 2016, when the first graduates under the new system start repayments, rather than every five years as originally proposed. No graduate will repay anything until they reach that income threshold.

    Earnings are usually higher than inflation, too. If we take 1987 as the index year (100), then average earnings are now at 276.38 while RPI measure is at 209.69. Earnings consistently outpace inflation - the current situation is the exception, not the rule.

    3 - Yes you would. If it was £20k you would pay nothing back. But at £21k you would. And I seriously doubt any universitiy student is aiming at earning just £20k for their entire lives.
    No, since you pay 9% on anything above £21K. £21K is £0 above £21K, so you pay 9% of £0, that is nothing. If you end up with a lower-paid job and uni wasn't worth it, you don't pay a penny back, if it was worth it - you pay for the benefit you received, what's the trouble?
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    (Original post by jesusandtequila)
    Sure, but because repayments act like a tax, it can be viewed as one of 9% on earnings over £21K. I'm saying that since we start charging 31% (when you include NICs) of stuff over £8K, it's really bugger all in the grand scheme of things. Many people earn far less than £21K throughout their lives - indeed £21K is close to the median wage.

    http://nds.coi.gov.uk/content/Detail...1&NewsAreaID=2

    The £21,000 earnings threshold will be uprated annually in line with earnings from 2016, when the first graduates under the new system start repayments, rather than every five years as originally proposed. No graduate will repay anything until they reach that income threshold.

    Earnings are usually higher than inflation, too. If we take 1987 as the index year (100), then average earnings are now at 276.38 while RPI measure is at 209.69. Earnings consistently outpace inflation - the current situation is the exception, not the rule.

    No, since you pay 9% on anything above £21K. £21K is £0 above £21K, so you pay 9% of £0, that is nothing. If you end up with a lower-paid job and uni wasn't worth it, you don't pay a penny back, if it was worth it - you pay for the benefit you received, what's the trouble?
    1 - The average wage is around £25k btw. But I see what you are saying, but that still doesn mean £21k is a lot of money. As I said, I'd like to see you try to buy a house on that wage.

    2 - Thanks. Must have missed that. That is one good thing. And while you say the current situation is the exception, who is to say it won't become the norm? I can't see inflation dropping anytime soon. And with it currently at 4.4%, it would mean that inflation would more than cancel out any increase in the repayment threshold.

    3 - Thanks for the explanation, but in that case why area news websites using the phrase "once the student starts earning £21,000 or more"? That suggest that repayment would start AT £21k.
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    (Original post by WelshBluebird)
    1 - The average wage is around £25k btw. But I see what you are saying, but that still doesn mean £21k is a lot of money. As I said, I'd like to see you try to buy a house on that wage.
    I'm sure I could manage a house here: http://www.bbc.co.uk/news/business-12850510

    The average house price is only around £30-40K on that street.

    2 - Thanks. Must have missed that. That is one good thing. And while you say the current situation is the exception, who is to say it won't become the norm? I can't see inflation dropping anytime soon. And with it currently at 4.4%, it would mean that inflation would more than cancel out any increase in the repayment threshold.
    Inflation currently is down to two things - VAT (which accounts for price rises of about 2.1%), and oil prices (which is harder to quantify). There's no price-wage spiral developing, which is the worry (so yes, it's actually a good thing that wages are being dampened at the moment, in terms of long-term living standards, rather than short-term). Furthermore, if inflation were to stay around 5%, people will build that into expectations when wage bargaining etc. When the economy grows (as it does for 8/10 years), then wages will outstrip inflation. It's happened through all booms and busts since the industrial revolution, consistently. I see no reason for that to change due to a recession now.

    3 - Thanks for the explanation, but in that case why area news websites using the phrase "once the student starts earning £21,000 or more"? That suggest that repayment would start AT £21k.
    Lazy journalism I guess. It should say either "more than £21,000" or £21,000.12 (at which you'd be paying back 1.08p per year, technically - and below which you'd be paying less than a penny per year, which is impossible).
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    (Original post by jesusandtequila)
    I'm sure I could manage a house here: http://www.bbc.co.uk/news/business-12850510

    The average house price is only around £30-40K on that street.
    That is by far not the norm though, and you know that .
    House prices have risen so much over the last 10 / 20 years, and wages have not matched that. Meaning it is much harder for people to buy their first house, and you need to be earning a lot more to be able to do so.

    (Original post by jesusandtequila)
    Inflation currently is down to two things - VAT (which accounts for price rises of about 2.1%), and oil prices (which is harder to quantify). There's no price-wage spiral developing, which is the worry (so yes, it's actually a good thing that wages are being dampened at the moment, in terms of long-term living standards, rather than short-term). Furthermore, if inflation were to stay around 5%, people will build that into expectations when wage bargaining etc. When the economy grows (as it does for 8/10 years), then wages will outstrip inflation. It's happened through all booms and busts since the industrial revolution, consistently. I see no reason for that to change due to a recession now.
    Is there anything to suggest that oil prices will go down though? While this is just my opinion, I think we are in for a royal kicking with oil prices. They may drop a bit from where they are now, but I do think we will see a general increase (that may be quite steep if things do not change in the middle east, or with where we get our oil from).

    And honestly, I really don't think people will be in any position to build inflation into wage expectations. I see youth unemployment continuing to increase with people having to just take what they can.

    And I like that you are saying "when the economy grows" rather than if. I suppose the proof will be what happens this year. But making hundreds of thousands of people unemployed certainly will not help growth.

    (Original post by jesusandtequila)
    Lazy journalism I guess. It should say either "more than £21,000" or £21,000.12 (at which you'd be paying back 1.08p per year, technically - and below which you'd be paying less than a penny per year, which is impossible).
    Fair enough .
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    (Original post by WelshBluebird)
    That is by far not the norm though, and you know that .
    House prices have risen so much over the last 10 / 20 years, and wages have not matched that. Meaning it is much harder for people to buy their first house, and you need to be earning a lot more to be able to do so.
    Sure, but it's possible to find a house that you can afford. At £21K, you're getting £315.66 after tax per week. I'm living on far less than that (with rent) at the moment. Yes, you'd have to budget quite hard, but you could certainly save up a decent deposit and get a mortgage on a house for that.

    Is there anything to suggest that oil prices will go down though? While this is just my opinion, I think we are in for a royal kicking with oil prices. They may drop a bit from where they are now, but I do think we will see a general increase (that may be quite steep if things do not change in the middle east, or with where we get our oil from).
    Oil prices don't need to go down, they just need to stop increasing at the same rate. Remember that inflation is the change in prices, and if oil prices remain at this high price, then so do prices, but prices won't change - and so no, I don't think we're going to continue seeing the oil price increase at such a rate. It's the rate of change, not the level that is important to inflation.

    And honestly, I really don't think people will be in any position to build inflation into wage expectations. I see youth unemployment continuing to increase with people having to just take what they can.
    Youth unemployment is in a large part down to the minimum wage, which specifically hurts the youngest, least experienced and most unskilled workers. We're now seeing the effects of consistent increases in the minimum wage above inflation on the youth. It's been rising steadily in times of growth since 1998, and now spiked again as we're in a downturn.

    Still, though, if people don't build it in, we'll see businesses making super-profits, and thus more investment in R&D, more growth, employment and upward pressure on wages, or we'll see people build it in, and wages keeping in pace with inflation (as we've seen in previous periods of high inflation, such as the mid-late 70s).

    And I like that you are saying "when the economy grows" rather than if. I suppose the proof will be what happens this year. But making hundreds of thousands of people unemployed certainly will not help growth.
    Of course the economy will grow. Technological improvements are what drives long-run growth, and while we do have issues in the short run with de-leveraging both of consumers and government and businesses, it's not something that will sustain itself. Indeed, I'd put my house (if I could afford one at £21K ) on real GDP being higher at the 2015 election than the 2010 one.
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    (Original post by jesusandtequila)
    Sure, but it's possible to find a house that you can afford. At £21K, you're getting £315.66 after tax per week. I'm living on far less than that (with rent) at the moment. Yes, you'd have to budget quite hard, but you could certainly save up a decent deposit and get a mortgage on a house for that.
    Really? Good luck getting a mortgate that is ten times your wage when you are on £21k. (not that doing that is a good idea even if you can get one like that).

    (Original post by jesusandtequila)
    Oil prices don't need to go down, they just need to stop increasing at the same rate. Remember that inflation is the change in prices, and if oil prices remain at this high price, then so do prices, but prices won't change - and so no, I don't think we're going to continue seeing the oil price increase at such a rate. It's the rate of change, not the level that is important to inflation.
    But I don't think they will stop increasing. They may stop, maybe decrease for a bit, but in the long term we are in place for continued price increases. Unless we can find a way to stabilise the prices (despite what happens in the middle east) or find a way to get oil from elsewhere.

    (Original post by jesusandtequila)
    Youth unemployment is in a large part down to the minimum wage, which specifically hurts the youngest, least experienced and most unskilled workers. We're now seeing the effects of consistent increases in the minimum wage above inflation on the youth. It's been rising steadily in times of growth since 1998, and now spiked again as we're in a downturn.
    Hugely disagree. The minimum wage is what is keeping many many people above the poverty line. Without it, we would have a race to the bottom in terms of wages. Whoever pays their employees less, will make more profit.

    (Original post by jesusandtequila)
    Still, though, if people don't build it in, we'll see businesses making super-profits, and thus more investment in R&D, more growth, employment and upward pressure on wages, or we'll see people build it in, and wages keeping in pace with inflation (as we've seen in previous periods of high inflation, such as the mid-late 70s).
    Who is to say they would invest the profits in R&D and more jobs though. Part of the reason for the youth unemployment we have is that companies are not creating jobs despite making a lot of money.

    (Original post by jesusandtequila)
    Of course the economy will grow. Technological improvements are what drives long-run growth, and while we do have issues in the short run with de-leveraging both of consumers and government and businesses, it's not something that will sustain itself. Indeed, I'd put my house (if I could afford one at £21K ) on real GDP being higher at the 2015 election than the 2010 one.
    Over the long term you are right, but I think it will take a little while for growth to start. Certainly the huge cuts and reduancies will not help (don't forget, people even in the public sector help growth as they buy and pay for products / services from the private sector - making them redundant will mean they can't do that). And of course, most of the people who will lose their jobs are not the "fat cats" in "non jobs" (two popular phrases to chuck around these days) - if anything the people who come under those wings are getting wage increases!.
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    (Original post by WelshBluebird)
    Really? Good luck getting a mortgate that is ten times your wage when you are on £21k. (not that doing that is a good idea even if you can get one like that).
    The average house price is £163K in the UK, currently. Even then, we don't need an average house if we're talking about being able to afford a house.

    But I don't think they will stop increasing. They may stop, maybe decrease for a bit, but in the long term we are in place for continued price increases. Unless we can find a way to stabilise the prices (despite what happens in the middle east) or find a way to get oil from elsewhere.
    You really think we'll be seeing 43% annual increases in oil price every year? Certainly if we are, then investment in green energy will become a lot more profitable for people, and they'll do it, the world over, and then oil demand will drop and that acts as a natural brake on oil prices, and it means that they would have less on an inflationary effect when they were to rise.

    Hugely disagree. The minimum wage is what is keeping many many people above the poverty line. Without it, we would have a race to the bottom in terms of wages. Whoever pays their employees less, will make more profit.
    That is simply not true, that whoever pays their employees less makes more profit. In that case, why isn't everyone in the country paid minimum wage? Businesses need workers just as workers need jobs. It's a two-way relationship.

    Putting an artificial floor either:
    1) Causes inflation to negate the floor.
    2) Causes unemployment for those who's labour is worth less than that.

    We've seen a mix of 1 & 2, but with regards youth unemployment, we've seen much more of 2, as now the unskilled and unexperienced can't compete on price against their rivals for the job. Hence, we have much higher youth unemployment even when we saw low unemployment throughout the economy.

    Who is to say they would invest the profits in R&D and more jobs though. Part of the reason for the youth unemployment we have is that companies are not creating jobs despite making a lot of money.
    Because R&D is how they stay ahead of the competition. Apple's constant innovation in the phone, tablet and computer markets is an example. Manufacturers in new ways of production. They need people to do this R&D, and as we see more R&D, we see improving technology, which is the driver of long-run growth (Solow growth model).

    Over the long term you are right, but I think it will take a little while for growth to start. Certainly the huge cuts and reduancies will not help (don't forget, people even in the public sector help growth as they buy and pay for products / services from the private sector - making them redundant will mean they can't do that). And of course, most of the people who will lose their jobs are not the "fat cats" in "non jobs" (two popular phrases to chuck around these days) - if anything the people who come under those wings are getting wage increases!.
    I think we'll see, as the consensus imagines, slow growth for the next couple of years picking up toward trend growth by the latter half of the parliament. On balance the cuts are beneficial to the economy, not a bad thing. They allow much looser monetary policy (and the B of E can ignore the short-term inflationary winds which will filter through by next January), which keeps interest rates lower, investment higher, employment higher and living standards higher. Yes, the costs of cuts are very visibile, you can see the nurses or teachers who got laid off, but the costs of not cutting are higher interest rates - which will cause just as many if not more job losses, just dispersed over the economy. So, I certainly wouldn't try to blame the cuts for any issues that we may have, they are there because we are all over-leveraged, government included, and the correction process in necessary, and would happen whether government cuts or not.
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    (Original post by WelshBluebird)
    4 - It isn't quite as simple as that. If we had a graph of wage against repayments, it would be a nice sloping line. It would be a bell curve. The poorest pay the least (probably less than what they do now), the normal people pay around what they do now (maybe a bit more), the next richest (so middle class probably) will pay back the most, and the very richest will pay back less than the group before them (higher wages = less amount of time to pay it off = less interest added).
    While this is true, they will now be paying back more than before, both in absolute amount and relative to both the normal and poor people. The rich people are paying much more, the poor people are paying less. The gap has widened.

    The point is that the cost shouldn't be a reason to put you off. Nobody is hit badly enough by this that they should consider the student fees to be a deal breaker when deciding on going to uni or not.

    And it's not really an investment, it's a win-win. You either get a degree that helps you earn a lot of money and you pay a lot back, or you get a degree that doesn't help you and you hardly pay anything back at all.

    One of the aims of this fee increase, or at least a rationale behind the increase, is to create a market for degrees. So people will only choose degrees that they think will actually be helpful, instead of wasting their time doing a pointless 3 years. And don't forget that not all universities are going to charge the full amount, and those that do give you a pretty good chance of coming out with a job that puts you at least in the 'normal' category.
 
 
 
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