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OK – let’s give you a couple (there are plenty): my wife is the registrar of an independent school. Labour have already said that they plan to make life hard for this type of school. Regardless of how far they take this, with the exception of a few of the more famous schools, most public schools aren’t rolling in money, and even small changes, such as those to their charitable status, would have disastrous consequences.
Yeah, there are/were three private schools I'm aware of in my area. One went bust two years ago, the other two were hoping to pick up more pupils over that - neither did and both made redundancies this summer and last.
People can say "Good, they should all close" but these jobs are that rare and precious thing - service jobs that can't be outsourced to Romania or China. Plus the amount of trades work keeping these old buildings up and running. Plus the kids of staff get seriously discounted education which saves the state money.
Doing provide employment and educate children at no cost to the state seems unwise to me.
Labour also plans to raise corporation tax significantly, which is moronic. Most small businesses are not rolling in money
....and it's really easy to headquarter elsewhere and avoid it all together. Often you need two or three FTEs in the country and to hold board meetings locally. Just pick somewhere Easyjet serves for day trips for monthly board meetings, make three UK admin staff redundant and hire three in your new HQ country and you're done. The rest of your business remains totally unaffected. On the industrial estate I work on about half the firms are headquartered abroad now. These aren't blue chip companies, just SMEs nobody's every heard of. Countries didn't need competitive tax rates in 1950. They do now.
Not that many people will be looking past Labour's Brexit policy and compared to that omnishambles reducing white collar jobs in education and chasing companies abroad seems small beer.
People can say “Good, they should all close” but these jobs are that rare and precious thing – service jobs that can’t be outsourced to Romania or China.
The kids needing an education wouldn't just disappear, though. They'd still need schools and teachers. So the jobs wouldn't disappear, they'd just change employer from independent to state.
This is still lower than a decade ago.
It’s still far lower than it was under Thatcher.
These really aren’t radical policies.
Raising Corporation tax when everyone else is busy lowering it seems pretty radical to me. If you were an ice cream seller and you and all the other ice cream sellers have been dropping their prices for 15 years raising yours to levels from 10 years back strikes me as bit of a bold move!
In "A Journey" Tony Blair writes about Corporation Tax and the importance of keeping it competitive. It was completely un-competitive in the UK up to around 2008 while everyone else was slashing theirs.
The kids needing an education wouldn’t just disappear, though. They’d still need schools and teachers. So the jobs wouldn’t disappear, they’d just change employer from independent to state.
Assuming the state sector employs as many people per pupil as the private sector then yes. ...that also assumes that every single privately educated kid will transfer to a state school overnight. In my area that will probably be the case but wealthier kids and boarders will just end up in international schools abroad so they will be lost to the sector all together.
Of course those jobs that remain will now be funded by you and I rather than the parents. Not every voter will be wildly enthusiastic about that.
If you were an ice cream seller and you and all the other ice cream sellers have been dropping their prices for 15 years raising yours to levels from 10 years back strikes me as bit of a bold move!
It's not as simple as this though is it?
Funds from corporation tax are then reinvested back into the country in many ways, such as transport/infrastructure (to move your ice creams to the customer), education (so people have the talent to create better ice creams than your competitor), income support (to enable you to have as many customers as possible) and healthcare (to ensue both the ice cream staff and customers are fit and well to work and buy)
By the logic that lower is better, then 0 is best. This tax deficit would need to be balanced elsewhere.
If you were an ice cream seller and you and all the other ice cream sellers have been dropping their prices for 15 years raising yours to levels from 10 years back strikes me as bit of a bold move!
It’s not as simple as this though is it?
I suspect it is. If the market rate has dropped for 15 years in a row, raising you prices is radical. Might turn out to be correct but it's still radical.
Sorry JP but the private schools one you will never get me to agree. Its nothing about class war. Its simply that I see no reason why the general taxpayer should make such huge subsidies to private schools when this damages everyone!
However this has been done to death on here. Lets leave it as that.
I suspect it is. If the market rate has dropped for 15 years in a row, raising you prices is radical. Might turn out to be correct but it’s still radical.
You kind of ignored my second paragraph.
If the market rate for ice creams has dropped, but you produce the best ice creams and can deliver them faster than the competition, you can still have more customer appeal.
Companies do not work in a vacuum. They rely on society and infrastructure around them. This is all influenced by governments ability to invest in them.
Of course those jobs that remain will now be funded by you and I rather than the parents. Not every voter will be wildly enthusiastic about that.
Errmmm - we funded the training of those teachers and they are lost to the general public so we get those assets back and also we are no longer paying a huge subsidy to those private schools so overall it will cost the general taxpayer very little
Most small businesses are not rolling in money, and suddenly having to give an extra 7% to HMRC could easily make them non-viable.
Why do you assume they would suddenly slam the rates up with no cushioning at all?
And corporation tax is paid on profit as I'm sure you know. Are you really making that much profit? If you are paying wages for you and your staff then you wouldn't be affected. Likewise if you are reinvesting in your business.
If on the other hand you are making profit and paying yourself bonuses and dividends then you will be affected. But this is a tax dodge for small businesses isn't it?
You can look at the front benches of both main party’s and safely assume that not a single one of them has the first ****ing clue how business actually operates
If the market rate for ice creams has dropped, but you produce the best ice creams and can deliver them faster than the competition, you can still have more customer appeal.
Companies do not work in a vacuum. They rely on society and infrastructure around them.
They rely on the society and infrastructure around the places their operations are. When we're talking about corporation tax we're just talking about where the company chooses to put its HQ and pay its corporation tax. They only need an address, 2/3 FTEs there, an airport and somewhere to have a board meeting once a month. When it comes to where you pay corporation tax I fear ice cream is (unfortunately) a commodity that carries little premium for quality. Anyway, lets hope all the other countries have it wrong and reverting Corporation Tax to previous levels turns out to be a masterstroke all the other countries failed to spot.
overall it will cost the general taxpayer very little
We don't need to use terms like 'little' we can quantify it. It'll cost the tax payer 4-6k per additional state school pupil per year forever, plus whatever up front fixed costs are re-required. Fixed costs: Remember how easy it was to nationalise railways because the stock and infrastructure was so knackered that the owners couldn't wait to get rid of it an dump the nightmare of modernising on the state? I suspect private schools are the same. The private sector has a ton of completely unsuitable (often listed) decrepit buildings that are crippling to to maintain or replace. Often out in the sticks. I'm not sure the state really wants to take this problem on.
Tory candidate wrote people on Benefits Street should be 'put down'
Tory candidate in an area of high benefit usage....... Dumbass
Having been involved in committees as a cross-industry rep trying to help shape Government policy on a number of issues, including working with civil servants and select committees I have little hope - regardless of the hue of Government, the complete lack of understanding of business in Whitehall is despairing.
If on the other hand you are making profit and paying yourself bonuses and dividends then you will be affected.
So the plan is to move businesses that make a profit elsewhere, and encourage businesses that don't make a profit to stay in the Uk. ...and that's not radical.
They rely on the society and infrastructure around the places their operations are. When we’re talking about corporation tax we’re just talking about where the company chooses to put its HQ and pay its corporation tax. They only need an address, 2/3 FTEs there, an airport and somewhere to have a board meeting once a month.
My original reply was to jjprestidge
jjprestidge
Source? Otherwise I’m calling that out as BS (knowing what we pay in corp tax as a business with 3 employees).
They have 3 employees, I'm not sure they are going to be avoiding tax in the way you are suggesting.
Not every voter will be wildly enthusiastic about that.
How do you think they feel about the estimated £700 million in subsidies independent schools get via their questionable and in somem cases flat out illegitimate charitable status?
If Labour did go up to 26%, it would be barely above the EU average and still 4% below that economic basket case that businesses are fleeing in droves - Germany. Oh, wait....
Voting anti tory is the critical thing for anyone with progressive views. In my constituency the tories have a very slim chance of winning and I don’t really care if its an SNP or labour mp as I dislike both candidates but they will do the same thing as regards a labour government and brexit
There is also a large part of Scotland (the tub thumping red white and blue unionists) that wouldn't vote for Labour solely due to Corbyns past words of support for the IRA and the likes of Hamas (whether he actually did or not!).
They'll also never vote SNP, for obvious unionist reasons. IMO it's one of the reasons for the rise of the Tory vote in the last few years on Scotland , not Ruth Davidson as some would have you think.
My original reply was to jjprestidge
They have 3 employees, I’m not sure they are going to be avoiding tax in the way you are suggesting.
I hadn't spotted that so yeah, sorry not really relevant to your point. I agree, a 3 man business won't be going anywhere.
They’ll also never vote SNP, for obvious unionist reasons. IMO it’s one of the reasons for the rise of the Tory vote in the last few years on Scotland , not Ruth Davidson as some would have you think.
There's a fair bit of truth in that , Ruth Davidson just made it less embarrassing for Scots to admit they voted Tory 😜
But yeah there's at least half the country that's unionist and still 38% of them that voted leave, they have to vote for someone . Johnson shafting the DUP may have caused them to pause tho.
If Labour did go up to 26%, it would be barely above the EU average and still 4% below that economic basket case that businesses are fleeing in droves – Germany. Oh, wait….
Interestingly the other two counties with the highest Corp Tax are Greece and Spain, which *are* economic basket cases.
Is high tax a good thing for Greece, or is Greece's economy being "strangled"? [1]
Taxation strangles Greece's growth prospects:
https://www.wsj.com/articles/taxation-strangles-greeces-growth-prospects-1532597400
[1] I read Yanis Varoufakis' book this summer so you won't be surprised by my take on that.
The main reason the tories got 13 mps from scotland last time was the labour / tory non aggression pact. That and the tories recovering from a truely awful showing. Remember they still only got (IIRC) 20% of the vote
It is a conundrum in Scotland. a significant part of the SNP vote voted NO and out. A significant part of the labour vote voted YES and IN
Davidson very carefully and cleverly built her entire pitch around unionism and still only got 20% of the vote - and there is no way they will do that again without her.
My predictions for Scotland 50 snp, 3 limp Dems, 2 tory I labour
cromolyolly
Member
If Labour did go up to 26%, it would be barely above the EU average and still 4% below that economic basket case that businesses are fleeing in droves – Germany. Oh, wait….
Yup. What exactly about the UK is it that's so terrible that we can only hope to attract businesses by dropping our corporation tax to 17%- 4.4% less than the world average, 5.5% less than the EU average.
Worryingly, we'd be competing directly with that international powerhouse Lebanon, so we'd probably better drop it a bit further
We're between the 5th and 7th biggest economy in the world depending on who you ask, the 2nd or 3rd biggest in europe- and both of those european economies have corporation tax higher than the Labour proposal.
And why do people assume that cutting tax is the only way to do it? We have a well-educated, mostly healthy workforce, pretty good infrastructure with massive room to grow, we speak the world's most common language (er, assuming Mandarin hasn't overtaken us yet), and an excellent geographic location with direct, simple access to the enormous EU economy oh no wait forget I said that last one.
So it’s a Tory majority, or a hung parliament of some kind… because of Scottish voters.
Nice point. I'd clocked that the popularity of the SNP in Scottish Constituencies has effectively prevented decent majorities in the Uk, but I hadn't spotted that Scotland has been literally vetoing a Labour Government for the last 10 years or so. [1]
Staggering.
[1] Assuming without the SNP many seats would go to the red party and few to the blue. [2]
[2] I've checked, it's stark: https://en.wikipedia.org/wiki/2005_United_Kingdom_general_election_in_Scotland
Are Greeks paying their taxes now?
My ex had many 1000s of € in her student account so her dad's business (garage) could dodge tax, she hated it, but said it's what everyone did . This was pre crash not sure what it's like now.
check the numbers. The SNP have not been stopping a labour government. Even if all the snp mps were labour, labour would still not have got a majority.
this is a complete myth. Look at the numbers. If the SNP would support the tories you would be right - but they do not. For the last 40 years its been irrelevant what scotland votes - we get the government England votes for.
Add the SNP mps to labour and it makes no difference.
On the subject of polls it's stark that the Guardian opinium one gives Tories 16 pt lead
While telegraph ORB gives them just 8 pts
It's almost as if they are trying to scare their readers into voting
And why do people assume that cutting tax is the only way to do it?
I don't know, but every nation in the EU thinks that is the only way to do it WRT corporation tax and I'd want to know why they think that and why it's wrong before moving in the opposite direction to the consensus.
Even if all the snp mps were labour, labour would still not have got a majority.
Yes, you're right, I should have checked the numbers before cracking open the hyperbole.
None the less, because Scotland won't vote Labour the Red party is ~45 seats down every election these days. That's a massive handicap. ...and, unlike the rest of the UK, Scottish seats won't be returning to Labour if/when it frees itself from Momentum.
Actually it makes zero difference to getting a labour government as the SNP will support a labour queens speech but not a tory one. so if labour plus SNP gives a majority then its a labour government we are getting with SNP doing supply and confidence. this still works even if the tories are the largest party ( although given the fragmentation this is a very unlikely scenario
Actually it makes zero difference to getting a labour government as the SNP will support a labour queens speech but not a tory one. so if labour plus SNP gives a majority then its a labour government we are getting with SNP doing supply and confidence.
A government with a Supply and confidence [1] deal is a lame duck government. Can you provide an example of a UK Government in that position that functioned normally and survived anywhere near a full term?
Governments need to do unpopular stuff. Would the SNP support something unpopular the way whipped MPs from the same party would? Of course not. Lame duck government.
[1] Which just means they will vote for a Queens Speech and budget until they decide not to.
And collapsing a labour government would cause them huge political issues. they still suffer for collapsing the Callaghan government.
The scottish government has run as a minority government without issues and other countries seem to manage just fine. How long have the tories been governing now without a majority? 8 years?
Shall we discuss our Russian speaking friends (I’m jealous of their language skills)…?
https://twitter.com/c4dispatches/status/1191065622085603329?s=21
How long have the tories been governing now without a majority? 8 years?
Two and a half years. Hasn’t it been a blast.
Nope - 5 years before that without a majority.
Would that be voice of socialism - multi-millionaire, privately educated son of the director general of the BBC Seamas Milne, comrade?
Sticking it to ‘the establishment’?
The voice of ‘the people’?
Two and a half years. Hasn’t it been a blast.
Yes, I can't say I'd be picking the chaos of the last two and a half years as an example of how well minority governments with C+S deals work.
...but I wasn't really making a judgement on the merit or otherwise of the situation, just acknowledging the analysis of another poster who pointed out that the situation exists.
How about years of holyrood governments? the current one is a minority government with no deals in place. Seems to be managing fine without a majority.
outofbreath
Member
I don’t know, but every nation in the EU thinks that is the only way to do it WRT corporation tax and I’d want to know why they think that and why it’s wrong before moving in the opposite direction to the consensus.
This is a false comparison. While our competitors are reducing their rate, they're not moving down from 19% to 17%- they're moving down from far higher. So while Labour are proposing a rise while others are reducing it, they're not proposing to be higher than the competition- in fact even after their rise, we'll still be lower than our most direct competitors.
The consensus is that corporation tax should be much higher than we have it. We're moving towards that consensus, just from the other direction.
If Labour did go up to 26%, it would be barely above the EU average and still 4% below that economic basket case that businesses are fleeing in droves – Germany. Oh, wait
We're being diddled.
The Tories lowered corp tax whilst at the same time added tax to dividends.
I run a small corp and I would be more than happy to pay tax back at 26% (although companies that turn up to a certain amount are likely to be excluded from this increase.)
The conservatives are the party of stealth taxes remember.
As for companies claiming that tax is too high - **** em, they always want to pay as little as tax no matter what the rate. Corp tax was lowered in the US and guess what - the tax take went down. In fact the tax burden moves to individuals if corp tax is lowered.
Interestingly the other two counties with the highest Corp Tax are Greece and Spain, which *are* economic basket cases.
You missed France. Portugal and Belgium before you get to Greece. Then Italy, Luxembourg, Nederland and Austria before getting to Spain.
Lowest Corporate tax rate? Hungary at 9% and they are just tearing it up economically.
So not really much if a correlation between corporate tax rates and economic outlook.
Brexit of any kind will do far more damage than Labour's tax increase, but that's not stopping anyone.
Would that be voice of socialism – multi-millionaire, privately educated son of the director general of the BBC Seamas Milne, comrade?
If he uses that influence to shape a better society for more - then what's the problem? It's the converse that's the issue.
If you want to test Milne's credentials then check out his book 'The Enemy Within." His research here into the way the Miners were treated is as anti-establishment as it gets.
In an ideal world I agree with you but parties are always going to employ the talents of other people.
(I'd rather him than Alistair Campbell.)
“ Brexit of any kind will do far more damage than Labour’s tax increase, but that’s not stopping anyone.”
That’s very much debatable but what is certain is that if Labour follow through on their pledge to take / steal 10% of the value of all private companies with more than 250 staff the immediate effect will be:
1. All U.K. headquartered PLCs will love their HQ for tax purposes
2. The U.K. will lose all of the associated corporation tax
3. Foreign inward investment would cease
4. The country would £100B + worse off
5. The government would become embroiled in a series of international legal cases that would sink Whitehall for a decade or more.
Anyone who votes for Corbyn and McDonnell needs their head looking at.
The Liberal Democrats, the Green Party and Plaid Cymru are set to announce plans for a “remain pact” in up to 60 seats in a bid to deny Boris Johnson a Conservative majority.