[Closed] National Insurance and business leaders

CFH - I like that one, but really we need TJ's opinion on it. bring it out again on another thread when he's in full flow!

Did she fling her tits about at school too?

Not in my direction anyway!!

The left always thinks the answer is for the government to spend more. In good times because you can, and in bad times because Keynes said so.

The right always thinks the way to solve problems is to cut back. In the good times because there's no need for it and in the bad times because all those "benefit scroungers" should be in jobs that don't exist.

So easy to make sweeping statements.

I personally think that the 'reduce govt wastage' thing is just waffle. Therefore, someone's got to stump up the cash to help the economy out.

Does anyone know if wages have fallen during the recession? If so, the employers would be getting a bargain on employment costs, so a rise in NI would seem entirely reasonable.. no?

I personally think that the 'reduce govt wastage' thing is just waffle. Therefore, someone's got to stump up the cash to help the economy out.

It's a sort of lie from the Tories, quite how they are going to work through the whole system of Government and identify what can be saved in such a sensible way and do it quickly...so it's going to be a straight forward slash at something big.

Does anyone know if wages have fallen during the recession? If so, the employers would be getting a bargain on employment costs, so a rise in NI would seem entirely reasonable.. no?

It's not a simple as that, although It's not a surprise they are whinging, because they did during the good times when they were making obscene profits.

This is simply about the ideology of small Vs large Government. If the tories win then we will go down the road of smaller state more privatisation and probably more Quangos. I was hoping that people would have learned the lesson of the 80's/90's when the tories brought the NHS to it's knee's, but it seems that they have had a bit of a memory loss and the lesson needs to be learned all over again.

And perhaps one day we will get the balance right between state and the private sector, but I'm not holding my breath with so many convenience libertarians around.

[i]I'm not holding my breath with so many libertarians around.[/i]

We can use them to staff frontline services: "let me through - I'm [i]highly trained[/i] in spouting vague platitudes about the market!" 😈

Edit: I'm actually of a reasonably libertarian, er, bent. But as regards UK healthcare, Hewitt's lobby-whoring is [sadly] the clearest indication of the future, whatever the incoming administration: NHS assets and infrastructure up for grabs.

Are these business leaders that are claiming massive job losses if the NI increase goes ahead the same ones that were lined up - one after another - to claim that the introduction of a minimum wage would cost the UK 2m jobs?

The lesson from previous recessions is that cutting spending deepens and lengthens the recession. As for the NI increase - well they would say that wouldn't they - 2 reasons - it cuts into profits and its a club to beat labour with.

The tories claim there is a huge amount of savings they can make without damaging services - an load of twadddle. So either you continue to spend at the level we do and wait for recovery to start to balance to books - or cut spending putting us back into recession.

The lesson from previous recessions is that cutting spending deepens and lengthens the recession.

The prime object of any trading nation, is to maximise its wealth so that this can be distributed in as equitable a way as possible, without it our ambitions are no more than pipe dreams - the more cake there is, the bigger the slice everyone can have! The nurturing of our wealth-giving system should therefore be of absolute importance - but not for Labour, their obsession has always been on spending, not earning!

As the chief executive of Next said in the Times today:

To get a grip on my senses I performed a small reality check. I started by thinking about the principle involved. And the principle is desperately important. Should the State raise its revenues to match its profligate lifestyle or make efficiency savings to get its expenditure back in line with its revenue? Do we want a big, expensive and inefficient State or a smaller, less intrusive, more efficient one?

There are no efficiency savings on the scale suggested - cutting cost will mean cutting services - which means putting people out of work.

Be honest about it it. There is an argument that this is the right thing to do ( but not one I subscribe to) But to suggest that spending can be cut significantly without affecting services is simply wrong.

Do we want a big, expensive and inefficient State or a smaller, less intrusive, more efficient one?

Actually means do we want comprehensive services to improve the health and welfare of our population or do we want minimal services that cannot cope?

What we want is more state owned tractor plants comrade.

Do we want a big, expensive and inefficient State or a smaller, less intrusive, more efficient one?

is obvious, but how do we know the smaller one would be more eficient, and more efficient doesnt necessarily mean it can do as much, it might just do less cheaper.

the more cake there is, the bigger the slice everyone can have!

Which are the rich countries that allow everyone to have a big slice of cake?

Actually means do we want comprehensive services to improve the health and welfare of our population

Really - so, jobs for [url= http://jobs.guardian.co.uk/job/982438/senior-press-officer/ ]Senior press officers for the arts council[/url] are an important place for the Government to invest our money to improve health and welfare are they TJ?

Well if they are putting money into the arts council, they will want someone to pulicise the art produced and thereby reduce the need for that artist to rely on gov funding the next time wont they? Oh and a lot of arts council work involves improving health and welfare, such as plays being put on to take round schools about drugs etc...

Zulu - I would say yes - but even if you remove all of that type of job the savings will be minimal - remember you are making them unemployed so that they will have to be paid benefit so the saving is only a % of their salary. The vast bulk of public spending is in health / welfare, education and armed services

then they have less money to spend - so the local shopkeepers income goes down - so he pays less tax......

You could close every non essential public service and the savings would still not be anywhere near what callmedave claims

I'm pretty sure I remember hearing that the Tories will not cut arts spending as its so low anyway

Are these business leaders that are claiming massive job losses if the NI increase goes ahead the same ones that were lined up - one after another - to claim that the introduction of a minimum wage would cost the UK 2m jobs?

Exactly what I was going to say.

Really - so, jobs for Senior press officers for the arts council are an important place for the Government to invest our money to improve health and welfare are they TJ?

UK creative industries are actually one of our few remaining healthy exports - also there are strong links between creative expression and good health, welfare etc.

Taking a misguided short term view of what constitutes efficiency based on tabloid style ill-informed speculation - yup that sounds just like what the Tories are planning.

The bottom line is that we're all ****ed.

There was an economist on Radio 4 yesterday saying that the government borrowing requirement for the next few years is equivalent to about £3000 per person, per year.

The hike in NI will raise the equivalent of £100 per person, per year.

Methinks we're going to have considerably bigger issues to moan about than a 1% NI increase pretty soon (as in: the day after the election when reality is due to make a rather abrupt re-entry into all our lives)

- the more cake there is, the bigger the slice everyone can have!

In theory. In practise, you have to forcibly re-distribute some of it because the people in power will hoard as much as possible for themselves. Which is where Labour comes in - both historically and politically.

I would like to see how many of these companies that are protesting against the proposed N.I rise are Tory party funders in the first place, I'm guessing probably most of them.

Binners - I think the idea is that a re-growing economy will contribute a large amount of money. Hence the emphasis on not killing it.

I suspect that most of the signatories to the NI letter are the same people who said they would take their business overseas if a labour government were elected in 97. But didn't.

And can regularly be heard bleating the same threat over and over, ad nausem when anyone dares to threaten there right to do whatever the * they like without any recourse to wider society.

Well.... * em!!!

molgrips - Member

Binners - I think the idea is that a re-growing economy will contribute a large amount of money. Hence the emphasis on not killing it.

Indeed - the only way to rebalance is to grow the economy - the debate is about which way is the best way to do so.

Remeber the lessons of the 30s and 80s. IMO - don't cut spending.

Remeber the lessons of the 30s and 80s. IMO - don't cut spending.

So you're telling me that tax rises are the way to stimulate the economy TJ?

under certain circumstances it could work, however the point is the balance between cutting spending which will harm the economy and increasing taxation which will harm the economy. Labour want to cut by £3 for every £1 taken whereas Tories want to cut by £4 for every £1, so in that case increasing taxation could be better than keeping tax the same and cutting spending more.

The Tories are always trying to play the 'job tax' card

They claimed the the hunting ban would cost 10s of thousands of jobs - it didn't
They claimed the minimum wage would cost 2m jobs - it didn't

Zulu - I am saying don't cut spending - thats the lesson from history.

Its a clear choice - as the economy grows pay back the debt slowly or cut spending, put the economy back into recession, be forced to increase spending on paying benefits, wait a few years until the money can be started to be paid back then you can pay it back more quickly . In the mean time you have destroyed the social cohesion of the country.

learn the lessons from the 30s and the 80s

In the mean time you have destroyed the social cohesion of the country.

Think Maggie finished that off quite nicely in the 80s.

grum - thats the lesson from the 80s - and this time there is not the north sea oil money to spend on benefits

But thats not whats being promised by the parties is it TJ

Neue-arbeit are offering us a Tax rise, in the form of an increase in NI contributions, the Conservatives and the Business leaders are saying this will damage the economy/endanger the recovery.

Your position is that we can just carry on spending and put it on the never never...

[i]"The problem with socialism is that, sooner or later, you run out of other people's money"[/i]

Zulu, what would cutting spending do to the economy?

Problem is the real information is lost amongst spin and hype. What are we to do?

anagallis, what would raising taxes do to the economy?

Your position is that we can just carry on spending and put it on the never never...

correct - because the lesson from history is that this is the right way to do it. It can be paid back from recovery - as the economy recovers there will be arise in tax receipts that will allow the debt to be repaid.

As for the NI rise - its a marginal rise and a progressive one - its damaging effects will be far lower than the Tories cuts in spending. - IMO - as 20 economists you will get 20 answers. I follow Keynes myself as I believe history vindicates his ideas.

Remeber the huge public spending of the Thatcher years - all being wasted on paying people not to work. We don't want to go back there

I simply believe that tory spending cuts will take us into a double dip depression that will be deep and lasting and very damaging.

So Zulu - what do you think we should be doing?

both would have a negative effect, that was understood from the start of the thread, the point is trying to get a handle on which will have the bigger effect, you cannot use the tax raise arguement or the cutting spending argument in isolation. If you wish to get all party political then you can bugger off somewhere else. This thread about trying to find a way through the bullshit

It can be paid back from recovery - as the economy recovers there will be arise in tax receipts that will allow the debt to be repaid.

Well, why on earth didn't Labour do that last time? They pissed it up the wall expanding services and increasing the government payroll by over a million people instead of paying off debt and putting something aside.

So Zulu - what do you think we should be doing?

I think the only area we should be borrowing for and investing in is infrastructure - cut back to the bone on whats being pissed up the wall on administration and bureaucracy and put every penny we borrow to spend into tangible improvements - housebuilding, roadbuilding and civil engineering, if you want to talk about investing in the recovery, Keynesian economics, then thats how you do it, not employing legions of pen pushers now with no feasible payback in the future!

The prime object of any trading nation, is to maximise its wealth so that this can be distributed in as equitable a way as possible,

Thats quite funny considering your politics labrat.

So Zulu - what do you think we should be doing?

The current economic circumstances are irrelevant to him as you are dealing with someone who's idealogy is all about having a smaller state. The line of questioning shouldn't be how much should be cut back to to pay the debt back, but how much further the cuts should go to achieve the goals of his libertarian mindset.

Ah - these legions of useless penpushers - could you identify them?

Successive governments have tried to and failed - the rhetoric says they are there but the reality is a few million £ could be saved if you sacked every one - so where are the billions coming from that are needed.

Do you really think there are hundreds of thousands of unneeded people being employed? To make a billion savings a couple of hundred thousand people need to be sacked ( remember you only save their salary minus the amount of benefit they get and minus the reduction in demand their reduced income creates)

So plese identify the hundreds of thousands of public servant you are going to sack.

Heres a few thousand to start with:

The Rural Payments Agency
Tax Credits (replace with adjustment to tax codes and a change in basic personal allowances)
CSA Enforcement (deducted at source through change in tax code)

Thats a few folk. A few hundred thousand still to go.

On both tax credits and CSA you will still need another mechanism of some sort. What about self employed on the CSA one for example.

( remember you only save their salary minus the amount of benefit they get and minus the reduction in demand their reduced income creates)

Also, lots of these cutbacks will involve buying less services - software, support, training etc from private companies, reducing demand.

They pissed it up the wall expanding services

How dare they expand public services! We don't want those!

Indeed - most of the worst waste I know is private sector involvement in public sector projects. NHS computers for example. Reduce that waste and reduce the GDP

I don't like having a large state sector. It just seems that public employees are not very good at spending money wisely, so I'd rather that money was spent by individuals.

Just thinking locally to me, the county council has blown the thick end of £160M on a guided bus that's 2 years late, spent several million on random consultations trying to get us to like congestion charging, and pays the chief executive £200k (I'd happily do it for half that and a free supply of bike chains and brake pads).

When it's not your money it's awfully easy to waste it.

NHS computers for example.

NHS National Programme for IT? Originally £2.4Bn, and now somewhere north of £12Bn.

The only consolation is that we're keeping great British companies like IBM and Microsoft going.