The Good News thread, local jobs, economy etc

[Webbo]

A readjustment is indeed to be expected after the horrendous 2008 crash and its knock-on effects. But one lasting six years and still ongoing? When does "a readjustment" become a structural trend that risks tipping into deflation if real incomes continue to fall, house prices continue to rise (another large rise announced yesterday) and interest rates are jacked up - expected to happen in 6-9 months time?

 

I hope you're right and that the counter-readjustment happens soon - i.e. rises in real incomes to boost demand - or we could be right in the shit in a couple of years time...

 

Mind you, I just looked for some figures on profits and found this: 

http://www.investorschronicle.co.uk/2014/01/30/shares/sectors/what-next-for-ftse-earnings-yXdjOSe5Jhzf7G74Cmso8I/article.html

 

Sounds as if profits are still low, even if FTSE prices are fairly high....let's hope that expresses JUSTIFIED confidence in improved company profits...and that some of those improved profits get passed on to workers...

I think it's inevitable that wages and living standards will decline to a point in the western world as the emerging economies take over. The best thing any govt can do to manage/arrest that decline is to make our industries as competitive as possible. If that means not enforcing uncompetitive wages on business then so be it.

[Alf Bentley]

Inflation is pretty much bang on target so that's not bad news. Wage growth of 0.7% (no idea why you'd exclude bonuses) is not great but what I'd be more interested in is a breakdown of wage growth by salary band. Clearly judging by the unemployment figures we've still got plenty of spare capacity and logically that will suppress wage growth. If most of those new jjobs are in a certain band, probably the lower end, then it could be that wage growth in other bands is actually much higher but the average is being dragged down by the fact that we had such a high amount oof capacity to re-employ at the lower end.

 

Maybe they exclude bonuses as they're inherently more volatile than basic pay rates? Though the article did say something about an anomaly a year ago, when companies held back bonuses to pay them at the reduced 45% top tax rate instead of 50%.

 

Agreed that inflation is not exceptionally high - and yesterday's increase might be a blip - but there's plenty that could still force it up. Part of yesterday's increase was due to food prices, according to the BBC News, though part was an anomaly due to the timing of sales by clothes shops. House prices are still rising rapidly (announced yesterday). So, the essentials are costing more - and this will have a particularly big impact on people on lower wages, if you are right about disproportionate growth in low-paid employment (which I suspect you are).

 

However, even at a comparatively low level, price inflation is still well above wage inflation. So, never mind 6 years ago,on average people are poorer than they were a couple of months ago and still getting poorer! That simply cannot continue much longer - for the sake of either companies or people.

[Alf Bentley]

Alf did you watch Question Time last week or have you have actually turned into Peter Hitchins? He was pretty much saying everything you have been saying for a few months and on here today regarding housing bubbles, interest rates and inflation.

 

I don;t believe for a minute you have been purchasing the Mail on Sunday!

 

No, I missed that, but he does occasionally talk some sense amid the right-wing frothing. Did you know that he was in both the SWP and the Labour Party as a younger man?!  Never buy any Sunday paper any more - all fluff; waste of time & money. 

 

I think it's inevitable that wages and living standards will decline to a point in the western world as the emerging economies take over. The best thing any govt can do to manage/arrest that decline is to make our industries as competitive as possible. If that means not enforcing uncompetitive wages on business then so be it.

 

I thought that the official line (of all the political parties) was that we just needed to improve education and skills, and concentrate on high-value-added work like ultra-high-tech, design work, management, finance, new industries (biotech, renewables etc.)?

 

I'm dubious about that myself, I must admit. Even with the best education/skills in the world, a large slice of the population isn't going to be capable of doing that work (myself included). So, it then becomes a question of whether there is enough lower-skilled work that has to be done in this country (personal services, community/public services etc.) - and how much is society prepared to pay to have that work done? The companies and councils providing those services aren't in competition with the emerging countries, unlike, say low-tech manufacturing companies....though migrant labour can be an issue.

 

If British society is not prepared to pay a decent living wage to care home assistants, council clerks, hairdressers, binmen, catering workers etc, then we're potentially creating some major social problems for ourselves.

[Webbo]

 

 

I thought that the official line (of all the political parties) was that we just needed to improve education and skills, and concentrate on high-value-added work like ultra-high-tech, design work, management, finance, new industries (biotech, renewables etc.)?

 

 

I always thought that was a ridiculous and probably racist idea, "we'll do the designing and they can do the screwdriver work and we'll make all the money", as if Chinese and Koreans were incapable of designing anything for themselves.

 

 

 

If British society is not prepared to pay a decent living wage to care home assistants, council clerks, hairdressers, binmen, catering workers etc, then we're potentially creating some major social problems for ourselves.

 

 

Although no one is saying that the work those people do isn't important they are not wealth creators they are wealth consumers. Somebody else has to earn the money to pay those people. We have to export to survive.

[Rincewind]

Anyone see the program last night on migrants and some peoples perception? The usual lines were used 'taking our jobs' 'working for less' etc.

There was a french girl who came over to be a hairdresser. Could not find anything so works as a waitress instead. Another, a Phillipine is a care home worker and says a lot of people would not do his job as it includes wiping arses. But he loves it as it gives him satisfaction to help people.

The bloke running the restaurant where the girl works said he has only know a few English people apply or actially work there.

The young lad who featured changed his mind a little and agreed he could do more to find work.

Not sure how i feel as I do not have experience of it  but  it is not just the low skilled jobs migrants do. They often have qualifications before coming here and are willing to do the shitty jobs wuntil something better comes along.

[Alf Bentley]

I always thought that was a ridiculous and probably racist idea, "we'll do the designing and they can do the screwdriver work and we'll make all the money", as if Chinese and Koreans were incapable of designing anything for themselves.

 

Although no one is saying that the work those people do isn't important they are not wealth creators they are wealth consumers. Somebody else has to earn the money to pay those people. We have to export to survive.

 

Probably not racist, as it takes time for any nation to get up to speed with any complex new activity, but certainly time-limited, as sooner rather than later the emerging economies will be capable of doing the design work. What do we move onto then - or will their incomes/prices have risen so much by then that we're able to compete again?

 

In what sense are all those jobs "wealth consumers"? Some are currently private sector (e.g. hairdressers) and create wealth in the form of profits for spending or reinvestment. Others are currently public sector (e.g. binmen), but both provide services that individuals or society want to pay for. In an ultra-Thatcherite Webboworld, presumably all refuse/waste services would be profit-making and privatised....would that make them "wealth creators"? Or is it the fact that they provide services and not goods that makes them "wealth consumers"? If so, are painters and decorators "wealth consumers"? 

 

We probably don't have to export to survive, but we need to export - and import - to grow and to improve quality of life. What should we export, though? Unlikely to be food, raw materials or low-tech manufactures these days, but could be everything from energy to professional services to high-tech manufactures, I suppose. I don't have the answers, just pondering....but need to work now! 

[MooseBreath]

Maybe they exclude bonuses as they're inherently more volatile than basic pay rates? Though the article did say something about an anomaly a year ago, when companies held back bonuses to pay them at the reduced 45% top tax rate instead of 50%.

Agreed that inflation is not exceptionally high - and yesterday's increase might be a blip - but there's plenty that could still force it up. Part of yesterday's increase was due to food prices, according to the BBC News, though part was an anomaly due to the timing of sales by clothes shops. House prices are still rising rapidly (announced yesterday). So, the essentials are costing more - and this will have a particularly big impact on people on lower wages, if you are right about disproportionate growth in low-paid employment (which I suspect you are).

However, even at a comparatively low level, price inflation is still well above wage inflation. So, never mind 6 years ago,on average people are poorer than they were a couple of months ago and still getting poorer! That simply cannot continue much longer - for the sake of either companies or people.

But if the problem with wage growth is limited to the lower skilled then it's not really a "cost of living" crisis at all is it? It's a "too many low skilled people" crisis, which we shouldn't be surprised by of course what with the nature of our immigration policy over the last decade or so. Solve the "too many people" problem and you also solve the house price growth problem. Two birds with one stone simply by going back in time and telling Labour not to open the borders so ridiculously wide.

[davieG]

Something must be going right

 

 

Executive pay has grown from 60 times that of the average worker to almost 180 times since the 1990s, according to a report.

The High Pay Centre, a think tank, said shareholders were still backing high executive pay deals despite new powers to vote them down at annual meetings.

The pay of the average FTSE 100 chief executive increased from £4.1m to £4.7m last year, said the report.

The government should take action to close the pay gap, it said.

In October, new rules came into effect forcing listed firms to give shareholders a binding vote on directors' pay.

Executive 'elite'

A firm's remuneration policy now requires the approval of more than 50% of shareholders for a policy to pass.

Business Secretary Vince Cable introduced the shift to make a "clearer link between pay and performance".

The High Pay Centre's report says that, without further action, trust in business will be damaged by the perception that an executive "elite" is reaping all the rewards from economic growth.

"The government's tinkering won't bring about a proper change in the UK's pay culture," High Pay Centre director Deborah Hargreaves said.

Burberry stand

"A maximum pay ratio would recognise the important principle that all workers should share in a company's success and that gaps between those at the top and low and middle earners cannot just get wider and wider."

Last week, 52% of shareholders voted not to support the remuneration report at fashion house Burberry, in a rare stand against large salaries.

It is rare that protesting shareholders are in a majority, having happened just six times since 2000.

Among the most recent examples was that of the insurance giant, Aviva. In 2012 investors voted against the pay package of the then chief executive, Andrew Moss.

He resigned shortly afterwards.

[Alf Bentley]

But if the problem with wage growth is limited to the lower skilled then it's not really a "cost of living" crisis at all is it? It's a "too many low skilled people" crisis, which we shouldn't be surprised by of course what with the nature of our immigration policy over the last decade or so. Solve the "too many people" problem and you also solve the house price growth problem. Two birds with one stone simply by going back in time and telling Labour not to open the borders so ridiculously wide.

 

You're making a load of assumptions  there, not least that too much immigration is the only problem!

 

I don't dispute the fact that migrant labour can put real or perceived downward pressure on pay for the low-skilled, but the idea that it is the only pressure is ridiculous.

- Low-tech manufacturing: Jobs and pay under pressure due to competition from emerging economies.

- Public services: Jobs and pay under pressure due to political decisions to make cuts in central & local government spending.

- Personal services: Many small businesses reluctant to raise charges in line with inflation as they're aware that many customers are skint

- Professional services: Professional service companies reluctant to raise charges to business clients in the knowledge that many have tight margins and might look elsewhere.

- Business decisions: As just posted by Davie, many big businesses are making an active choice to give top executives massive pay rises, while holding down the pay of lower-ranked employees

 

You can make political arguments for some of these decisions from a right-wing perspective - and others are temporarily or permanently unavoidable for structural economic reasons - but you can't deny that they are factors in falling real pay!

 

The "too many low-skilled people" argument was presented by New Labour to justify their "education, education, education" rhetoric - and Cameron has followed suit in this, as he so often does. As discussed with Webbo (above), I'm dubious about this as there are limits on how many people will ever be capable of high-skilled work....more, no doubt, but not everyone.

 

So it becomes a question of whether there'll be enough low-skilled work for those who need it (which is where your immigration argument does become valid, to some extent) - and how much society is prepared to pay for it.

 

Funny enough, Davie's executives on 180 times average pay are one potential source of unskilled work providing private services of one kind and another (like a return to Victorian/Edwardian times, when millions were "in service" to the rich). Not sure that's my preferred option, but that's a matter of political preference.

 

Will society be prepared to pay a living wage to those providing private services in private houses, care homes or hair salons, or public services emptying bins, pushing hospital trolleys or cleaning schools?

 

If not, this particularly unjust, unequal version of capitalism will create a whole heap of social problems, as we can't all be biotech engineers, successful entrepreneurs or investment bankers.

 

Marx famously wrote that "what the bourgeoisie produces above all is its own gravediggers", assuming that capitalism would inevitably force down pay leading to revolution. I used to think he'd got that wrong and that by providing a decent income for all, capitalism had been clever enough to bury its own gravediggers, but maybe not. Maybe 21st century capitalists are so much more greedy, callous and short-sighted than 20th century capitalists that they will force down living standards, reducing economic demand and promoting conflict and squalour - and maybe a return of communism, fascism or some other mayhem?!?

[Webbo]

 

- Public services: Jobs and pay under pressure due to political decisions to make cuts in central & local government spending.

 

 

Or due to a massive budget deficit?

[Alf Bentley]

Or due to a massive budget deficit?

 

Political decisions about how to tackle a massive budget deficit*.

 

Although some cuts were probably inevitable given the scale of the problem, their nature/size/pace was a political decision.

Other decisions could have been made, even if you would have disagreed with them: e.g. 

- A targeted stimulus to demand (e.g. house-building), reducing benefits spending and increasing tax revenues;

- Slower cuts and a slower fall in the deficit; 

- A concerted effort to combat tax evasion/avoidance, increasing tax revenues;

- No cut in the top tax rate for those earning more than £150,000;

 

* Though the Tory decisions were at least partly ideological, anyway. They always want to redistribute from poor to rich and from public to private...it's what they're all about! 

[MooseBreath]

Other decisions could have been made, even if you would have disagreed with them: e.g.

- A targeted stimulus to demand (e.g. house-building), reducing benefits spending and increasing tax revenues;

- Slower cuts and a slower fall in the deficit;

- A concerted effort to combat tax evasion/avoidance, increasing tax revenues;

l

They are doing all of those as well

[Webbo]

Political decisions about how to tackle a massive budget deficit*.

 

Although some cuts were probably inevitable given the scale of the problem, their nature/size/pace was a political decision.

Other decisions could have been made, even if you would have disagreed with them: e.g. 

- A targeted stimulus to demand (e.g. house-building), reducing benefits spending and increasing tax revenues;That's happened and now the left are complaining about a housing bubble.

 

- Slower cuts and a slower fall in the deficit; The cuts could have been far harder, we've had a easy ride so far.

 

- A concerted effort to combat tax evasion/avoidance, increasing tax revenues;That has happened, it's been mentioned on here, probably this thread.

 

- No cut in the top tax rate for those earning more than £150,000; The decision to raise the rate just before the election by labour was a political decision. The decision to cut the rate is justified by the fact that the top rate has raise massively more and we've had strong growth since it was cut .

 

* Though the Tory decisions were at least partly ideological, anyway. They always want to redistribute from poor to rich and from public to private...it's what they're all about! 

Edited 16 July 2014 by Webbo

[Alf Bentley]

 

Political decisions about how to tackle a massive budget deficit*.

 

Although some cuts were probably inevitable given the scale of the problem, their nature/size/pace was a political decision.

Other decisions could have been made, even if you would have disagreed with them: e.g. 

- A targeted stimulus to demand (e.g. house-building), reducing benefits spending and increasing tax revenues;That's happened and now the left are complaining about a housing bubble.

 

- Slower cuts and a slower fall in the deficit; The cuts could have been far harder, we've had a easy ride so far.

 

- A concerted effort to combat tax evasion/avoidance, increasing tax revenues;That has happened, it's been mentioned on here, probably this thread.

 

- No cut in the top tax rate for those earning more than £150,000; The decision to raise the rate just before the election by labour was a political decision. The decision to cut the rate is justified by the fact that the top rate has raise massively more and we've had strong growth since it was cut .

 

* Though the Tory decisions were at least partly ideological, anyway. They always want to redistribute from poor to rich and from public to private...it's what they're all about! 

 

 

They stimulated housing market demand in the wrong way - subsidising mortgages (encouraging debt and increasing house prices) instead of stimulating house building, i.e. the supply of housing, which would have created lots of jobs in a labour-intensive industry as well as boosting the profitability of many small firms, thereby boosting demand from construction workers, construction firms and their suppliers. A greater supply of housing might also have helped cool the housing market bubble...and it's not just the left that are concerned about that, it's everyone from the Governor of the Bank of England to Peter Hitchens, apparently!

 

Yes, the cuts could have been worse and may be worse after 2015, at a time when interest rates have started to further erode household budgets...doesn't bode well.

 

Some effort has been made at tackling tax avoidance (indeed, I praised Osborne for his measure in the last budget), but it has been very little and very belated. Much more could and should have been done...

 

Yes, tax rates are a political decision taken by either party. It was Labour's political decision to raise the rate on earnings above £150k  - and the Tories' decision to cut it at a time when it faced a massive budget deficit, thereby effectively increasing the deficit and the scale of the cuts required. I'm sure that the sort of people that Davie mentions, who are now earning 180 times the average wage are very grateful to them! (up from 60 times that wage in the 90s).

 

Source and data for your claim that this cut has massively generated tax revenues and been the key factor boosting growth?!?

 

I still reckon that the main problem is all those wealth-consuming painters and decorators, though! 

[Webbo]

They stimulated housing market demand in the wrong way - subsidising mortgages (encouraging debt and increasing house prices) instead of stimulating house building, i.e. the supply of housing, which would have created lots of jobs in a labour-intensive industry as well as boosting the profitability of many small firms, thereby boosting demand from construction workers, construction firms and their suppliers. A greater supply of housing might also have helped cool the housing market bubble...and it's not just the left that are concerned about that, it's everyone from the Governor of the Bank of England to Peter Hitchens, apparently!

 

Yes, the cuts could have been worse and may be worse after 2015, at a time when interest rates have started to further erode household budgets...doesn't bode well.

 

Some effort has been made at tackling tax avoidance (indeed, I praised Osborne for his measure in the last budget), but it has been very little and very belated. Much more could and should have been done...

 

Yes, tax rates are a political decision taken by either party. It was Labour's political decision to raise the rate on earnings above £150k  - and the Tories' decision to cut it at a time when it faced a massive budget deficit, thereby effectively increasing the deficit and the scale of the cuts required. I'm sure that the sort of people that Davie mentions, who are now earning 180 times the average wage are very grateful to them! (up from 60 times that wage in the 90s).

 

Source and data for your claim that this cut has massively generated tax revenues and been the key factor boosting growth?!?

 

I still reckon that the main problem is all those wealth-consuming painters and decorators, though! 

Cutting the top rate of income tax has massively increased the amount of money the rich are paying into government coffers, says a senior Tory MP.

 

John Redwood points to figures from HM Revenue and Customs that show a £9bn increase in tax receipts this year - after the top rate was cut to 45%.

 

The Office for Budget Responsibility suggests the boost is partly down to people delaying declaring their income.

 

But Mr Redwood insists it is not a one-off and will be sustained.

 

The previous Labour government created a new 50% tax band in 2010 for anyone with income of more than £150,000, but the coalition cut it to 45% last April.

 

'Eye-popping'

A Treasury analysis in 2012 estimated the switch to 45% would reduce tax revenue by about £100m.

 

 

 

 

But Mr Redwood, who co-chairs the Conservative Party's policy review on economic competitiveness, said the Treasury had been "utterly wrong".

 

"The Revenue and Customs figures for what actually happened is stunning proof that the tax cut from 50p to 45 has led to a big tax increase on the rich

 

 

http://www.bbc.co.uk/news/uk-politics-26875420

 

I know John Redwood isn't an unbiased source but he's quoting from these figures;

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/277472/Income_Tax_Liabilities_Statistics_-_February_2014.pdf

[Alf Bentley]

 

http://www.bbc.co.uk/news/uk-politics-26875420

 

I know John Redwood isn't an unbiased source but he's quoting from these figures;

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/277472/Income_Tax_Liabilities_Statistics_-_February_2014.pdf

 

 

From your article (link above):

"The Office for Budget Responsibility (OBR) suggested the £9bn spike in revenues would not be sustained.

It said high-rate taxpayers knew a change in the rate was coming so declared less income than normal in 2012-13 - as they are entitled to do under the rules - and that had led to a big increase in 2013-14".

From my article (link posted earlier today):

"The ONS said the [real pay] figure continued to be affected by a sharp drop in bonuses compared with a year ago, when many employers delayed payments until April to take advantage of a cut in top-rate tax".

 

So, who should I believe? The Office for Budget Responsibility AND the Office for National Statistics....or John Redwood? 

 

No definitive data available to compare to 2013-14 yet, but the clear implication is that greedy top rate taxpayers postponed declaring 2012-13 income until 2013-14 in order to pay LESS tax on it (45% instead of 50%), thereby boosting revenues for 13-14 and reducing those for 12-13...and now pay growth in 2014 is flat partly due to that glut of postponed bonuses a year ago. Still, the poor things probably needed the cash if they're only on 180 times the pay of the average worker...

 

Are you going to define who is and isn't a "wealth consumer", as opposed to a "wealth creator", then? Entrepreneurs, binmen, teachers, hairdressers, investment bankers, painters and decorators....  

[Webbo]

From your article (link above):

"The Office for Budget Responsibility (OBR) suggested the £9bn spike in revenues would not be sustained.

It said high-rate taxpayers knew a change in the rate was coming so declared less income than normal in 2012-13 - as they are entitled to do under the rules - and that had led to a big increase in 2013-14".

From my article (link posted earlier today):

"The ONS said the [real pay] figure continued to be affected by a sharp drop in bonuses compared with a year ago, when many employers delayed payments until April to take advantage of a cut in top-rate tax".

 

So, who should I believe? The Office for Budget Responsibility AND the Office for National Statistics....or John Redwood? 

 

No definitive data available to compare to 2013-14 yet, but the clear implication is that greedy top rate taxpayers postponed declaring 2012-13 income until 2013-14 in order to pay LESS tax on it (45% instead of 50%), thereby boosting revenues for 13-14 and reducing those for 12-13...and now pay growth in 2014 is flat partly due to that glut of postponed bonuses a year ago. Still, the poor things probably needed the cash if they're only on 180 times the pay of the average worker...

 

Are you going to define who is and isn't a "wealth consumer", as opposed to a "wealth creator", then? Entrepreneurs, binmen, teachers, hairdressers, investment bankers, painters and decorators....  

The OBR also suggested that the cut would lead to a fall of £100 million so their track record on the subject hasn't been great so far.

 

As for the wealth consumers you were talking about care workers and council clerks which by any measure do not create wealth.

Edited 16 July 2014 by Webbo

[MooseBreath]

A decent sensible point of view on taxation here, backed up by economic theory that supports what we're seeing happening in real life.

http://www.telegraph.co.uk/news/politics/georgeosborne/10895149/George-Osborne-wouldnt-like-to-admit-it-but-the-Tories-are-really-milking-the-rich.html

Interesting also about crime being at its lowest rate in living memory. Not a political point but isn't it interesting how the doom mongers totally ignore safety, one of the most fundamental determinants of quality of life, when they moan about the "state of the country".

[MooseBreath]

They stimulated housing market demand in the wrong way - subsidising mortgages (encouraging debt and increasing house prices) instead of stimulating house building, i.e. the supply of housing, which would have created lots of jobs in a labour-intensive industry as well as boosting the profitability of many small firms, thereby boosting demand from construction workers, construction firms and their suppliers. A greater supply of housing might also have helped cool the housing market bubble...and it's not just the left that are concerned about that, it's everyone from the Governor of the Bank of England to Peter Hitchens, apparently!

They're right to be worried, it's a problem successive governments haven't properly tackled. The tories at least have successfully got house building moving again after it ground almost to a complete halt during the financial crisis. They did that by incentivising the purchase of new builds, the other help to buy scheme has barely been used as we've discussed before. This is only a superficial solution though. It needs a reform of planning and land use laws as well as relaxation of environmental concerns, none of which is going to be popular with voters of any persuasion, especially not when the result will be house prices going down thus making a lot of people feel poorer. It's one of those things that obviously should be done but no government is going to find it easy to actually do while our ppolitical system remains short termist and necessarily in favour of the bandage over the cure.

[leicsmac]

They're right to be worried, it's a problem successive governments haven't properly tackled. The tories at least have successfully got house building moving again after it ground almost to a complete halt during the financial crisis. They did that by incentivising the purchase of new builds, the other help to buy scheme has barely been used as we've discussed before. This is only a superficial solution though. It needs a reform of planning and land use laws as well as relaxation of environmental concerns, none of which is going to be popular with voters of any persuasion, especially not when the result will be house prices going down thus making a lot of people feel poorer. It's one of those things that obviously should be done but no government is going to find it easy to actually do while our ppolitical system remains short termist and necessarily in favour of the bandage over the cure.

 

Actually agree with most of this, environmental regulation relaxation aside. Housing has been the elephant in the room for far too long, mainly because those people who think of their house as a financial asset rather than a place where you live, cook and sleep put up a most awful squawking when there's even a sniff of prices going down. And those people normally constitute a pretty potent voting bloc.

 

It's the attitude that's the problem. Until there's a shift in that there's always going to be trouble with this.

 

Also agree with the short-termism thing: if you've got two parties taking turn and turn about in power, they're not going to rubber-stamp anything vaguely long-term and will also probably make a habit of screwing things up enough for the other lot to have to become unpopular dealing with it when in power. It's a vicious cycle and it kills any sense of long-termism for projects. Something which as an advocate for an vastly increased UK Space Industry really annoys me, as those types of projects tend to be very long-term.

[Alf Bentley]

The OBR also suggested that the cut would lead to a fall of £100 million so their track record on the subject hasn't been great so far.

 

As for the wealth consumers you were talking about care workers and council clerks which by any measure do not create wealth.

 

I agree that the OBR is not infallible, but they were using the same data as Redwood, just interpreting it differently. Unlike him, they had noticed the fall in 12/13 top-tax revenue as well as the rise in 13/14 top-tax revenue, and had surmised that top tax payers had postponed declaring income so as to pay tax at 45p instead of 50p. Redwood just looked at the 1 year and drew conclusions that suited his own prejudices. ONS used more recent data showing that real pay is stagnating - and one reason they cite is "a sharp drop in bonuses compared to a year ago, when many employers delayed payments to take advantage of a cut in top-rate tax"....so, based on at least 3 years' real data, they confirm the OBR view and reject Redwood's interpretation.

 

"Wealth" (Oxford English Dictionary): "A possession or possessions considered useful or having an exchangeable value". Many care homes (and painters & decorators) run at a profit, after operating costs/overheads. They can put that profit in the bank or invest it in new equipment....is that not wealth creation? Now, if that same service is provided even cheaper by the public sector (as it sometimes is), how could that not constitute wealth creation? It's harder for traditional accounting methods to assess the net benefits of public services, and if run inefficiently they might not create any wealth, but surely you can't claim that none of them create any net value? If all binmen and teachers were sacked, we'd certainly have to pay someone else to remove waste and to educate us....and that's without considering environmental assets like water, soil and air. We'll sure as hell be a lot less wealthy if we ruin them! Accounting for wealth is an interesting topic: http://en.wikipedia.org/wiki/Wealth

 

A decent sensible point of view on taxation here, backed up by economic theory that supports what we're seeing happening in real life.

http://www.telegraph.co.uk/news/politics/georgeosborne/10895149/George-Osborne-wouldnt-like-to-admit-it-but-the-Tories-are-really-milking-the-rich.html

Interesting also about crime being at its lowest rate in living memory. Not a political point but isn't it interesting how the doom mongers totally ignore safety, one of the most fundamental determinants of quality of life, when they moan about the "state of the country".

 

Interesting article, but ignores at least 1 key factor: as has been widely reported, wealth inequality between the very rich and the rest of society has been growing massively in recent years (see Davie's piece about executive pay rising from 60 to 180 times the average wage since the 1990s)...obviously this will mean that the highest earners pay more tax, proportionally, provided that they don't take their money off-shore or turn themselves into companies so as to pay less tax, as many do.

 

Yes, crime is an interesting one. I don't have stats to hand, but think it's been falling steadily for several years under both governments, which is counter-intuitive, as you'd expect a surge with the increase in unemployment and poverty from 2008. I read somewhere that part of the explanation lies in technology: widespread use of CCTV, cars that are much harder to break into etc. If only one or other government had the sense to make a serious effort to tackle drug abuse, there'd be even less crime

 

They're right to be worried, it's a problem successive governments haven't properly tackled. [...] It's one of those things that obviously should be done but no government is going to find it easy to actually do while our political system remains short termist and necessarily in favour of the bandage over the cure.

Also agree with the short-termism thing: if you've got two parties taking turn and turn about in power, they're not going to rubber-stamp anything vaguely long-term and will also probably make a habit of screwing things up enough for the other lot to have to become unpopular dealing with it when in power. It's a vicious cycle and it kills any sense of long-termism for projects. Something which as an advocate for an vastly increased UK Space Industry really annoys me, as those types of projects tend to be very long-term.

 

Agree with you both about short-termism. This applies to various issues, ranging from pensions/retirement age and care for the elderly through investment in public infrastructure to energy and climate change. Labour deserve credit for trying to invest in education / health infrastructure (though I'd be highly critical of how they did it - PFI schemes stacking up a ridiculous burden on future generations). Likewise, the Tories deserve credit for tackling the retirement age and state pensions (I wouldn't be too critical of how they've done it, either, though occupational pensions is a different matter).

 

How can you introduce a more long-termist approach into politics, though? Maybe through greater powers to parliamentary committees appointed to tackle particular policy areas - including longer terms of office for committee members (assuming they don't lose their seats at the next election)? It might be one area in which coalition politics might be helpful, if we are in an era where that becomes the norm (not sure that's the case, though)...Germany takes a longer-term approach, maybe partly because it usually has coalition governments. More devolution of power to regions/accountable specialist bodies, also? 

 

Must work now. Loads to do (business is booming under the Tories, don't you know!  ). I've gassed too much, anyway.

[Alf Bentley]

Ken Clarke on the economy, Tory politics etc: http://www.ft.com/cms/s/0/20c7d69a-0fed-11e4-90c7-00144feabdc0.html#axzz380LdyFqc

 

Always one of the straightest and wisest speakers around. Shame for his career that he wasn't born a bit earlier. If he'd been in politics in the 50s, 60s & 70s, before the Tories lurched to the far right, he'd probably have served several terms as PM.

 

Can see him being a right irritant to Cameron during the election, though, now his front-bench career is over. Always loyal, but inconveniently honest!

[Rincewind]

Just watched a good video of a Lib Dem Minister Danny Alexander demonstrating how to not answer straight forward questions.

 

Wrong format to post it here.

[MooseBreath]

Ken Clarke on the economy, Tory politics etc: http://www.ft.com/cms/s/0/20c7d69a-0fed-11e4-90c7-00144feabdc0.html#axzz380LdyFqc

Always one of the straightest and wisest speakers around. Shame for his career that he wasn't born a bit earlier. If he'd been in politics in the 50s, 60s & 70s, before the Tories lurched to the far right, he'd probably have served several terms as PM.

Can see him being a right irritant to Cameron during the election, though, now his front-bench career is over. Always loyal, but inconveniently honest!

Saved the economy from disaster he says, I would agree. Still a few issues outstanding, I would agree again.

Snip Sniparoo

Edited 20 July 2014 by MooseBreath

[Alf Bentley]

Saved the economy from disaster he says, I would agree. Still a few issues outstanding, I would agree again.

Snip Sniparoo

 

Nah! Gordon Brown had already saved the world, Moose! 

 

More than a few issues outstanding with the British economy - and have been for at least 70, if not 100 years, I'd say....issues,

there are always issues. Life is about issues!

 

Snip Sniparoo around your bollocks, matey! 

 

Ah well...football is nearly hear to distract us....opium for the masses and all that....