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Once again Starmer must be thanking the lord that he delivered Kemi Badanoch as leader of the opposition.
Given what’s gone on in the last week, Kemi decided to use her questions at PMQs to blather on about the Chagos Islands.
Finger on the nations pulse there Kemi
No one is buying th NI rise as a tax rise on business
If you’re operating in the UK, employers NI is one of the hardest business taxes to avoid. Offshoring your profits to reduce UK taxes on those is BAU for the largest companies. Conversely the impact of employers NI is reduced for the smallest companies.
Once again Starmer must be thanking the lord that he delivered Kemi Badanoch as leader of the opposition.
Yeah Starmer is a very lucky man, I can't see his luck ever running out.
Now every time there is any criticism of the Labour government you can spurt out "oh look at the Tories, aren't they awful?"
I reckon the next general election is in the bag for Labour.
It’s not so much a case of pointing out that the Tories are awful - that’s a given - but that when faced with an open goal their new leader is the political Kai Havertz
Its all rather reminiscent of a certain former Labour leader who I’m forbidden to name
The main beneficiaries of this would appear to be Farage and Co
It’s not so much a case of pointing out that the Tories are awful – that’s a given
And yet you felt the need to remind us, just in case not everyone on stw was aware.
Its all rather reminiscent of a certain former Labour leader who I’m forbidden to name
Oh come on, don't be shy, who have you got in mind?
Its all rather reminiscent of a certain former Labour leader who I’m forbidden to name
You just can't help yourself can you?
UK stalls Chagos Islands deal until Trump administration can ‘consider detail’
The UK government will not sign off a deal to hand back the Chagos Islands to Mauritius until Donald Trump’s administration has had a chance to consider the future of the joint military base, Downing Street has confirmed.
Here's a thought, how about the UK decides its own foreign policy and doesn't ask permission from a hard-right demagogue of the same ilk as Elon Musk, Yaxley-Lennon, and Nigel Farage?
This cracked me up :
Keir Starmer’s official spokesperson said: “We will only agree to a deal that is in the UK’s best interests and protect our national security.
What have the Chaos Island to do with "national" security? They are six thousand miles away in the southern hemisphere ffs. At least be honest and admit that the issue here is "the UK’s best neocolonialist interests". Plenty of countries can deal with their "national" security without owning bits of rocks six thousand miles away.
Chagos Islands is all about the USA military presence. Obvs. They are a security partner (even if we wish otherwise) and we need them because of the threats as regards Russia and China (no they won't just leave us be because we don't share a border with them).
They are six thousand miles away in the southern hemisphere ffs. At least be honest and admit that the issue here is “the UK’s best neocolonialist interests”
That would be a lie though. The UK basically has zero interest in those islands. Our only interest is as a USA client since it is a vital resource for them. If not for the US we would have got rid of them back in the 50s along with everything else in the area.
Of course that doesnt mean the current deal is exactly a good one. The Chagos islanders seem to be still getting screwed over with the island being handed, along with a bunch of cash, to Mauritius whose claims to the islands are rather slender and seem if anything less interested in the islanders.
Our only interest is as a USA client since it is a vital resource for them
Fair comment. The UK can no longer punch above its weight as it once did - at the time of the Falklands War the Royal Navy was still the third largest navy in the world. Which was crazy considering the size of the UK and that by then the British Empire had all but ceased to exist.
Yeah a sloppy comment. “The West’s best neocolonialist interests” would be more precise. Although the main benefactor of Western neocolonialism might be the United States Western countries generally, including the UK, also benefit.
Edit : Although not "zero interest" imo, I'm not giving you that! Limited to be a better description I reckon.
Chagos Islands is all about the USA military presence. Obvs.
Obviously. But the deal between the UK and Mauritius is a UK foreign policy issue. It is not for the United States to dictate to the UK what its foreign policy should be. Not even Donald Trump should have that right.
No one is buying th NI rise as a tax rise on business. It’s a tax on workers.
Can you explain this please?
Well I am business owner and I am an employee, therefore the available "pot" of money to pay for employees (including me) is diminished. Most businesses have to recover that additional NI either by raising prices or paying it out of profit, or reducing people. As much as i am a left leaning human corp tax (if applied fairly) is a way better tax. I've explained elsewhere that the tax changes made by Labour costs the business a salary equivalent therefore no new job in the business and if someone wanders off no replacement. So in short 10 to 15% reduction in my team. Extrapolate that into a 2000 person business that's a lot of jobs.
Will repeat what i said way back, not Labour, not Tories not ****wit Farage either can or want to change the current system as they "think" it benefits them. The wealth transfer is staggering.
Not forgetting the massive increase in the NI threshold which has been a huge boon for smaller businesses of course.
I'd be willing to bet that wages increase more in real terms under this labour government than they did in the last five years under the tories, or even on average over the whole Tory disaster class, so all this right wing scaremongering will prove, as it always does tbf, to be completely wrong.
It’s not so much a case of pointing out that the Tories are awful – that’s a given – but that when faced with an open goal their new leader is the political Kai Havertz
That an excellent analogy, because you are shouting at the opposition when your own 70 million striker doesn't even seem to know where the goal is, what a banjo is and what the ****s that round thing is that everyone else seems so interested in.
Here’s a thought, how about the UK decides its own foreign policy and doesn’t ask permission from a hard-right demagogue of the same ilk as Elon Musk, Yaxley-Lennon, and Nigel Farage?
Unfortunately he is (I still struggle with this) going to be POTUS in a few days.
There's no use in pretending a UK can do very much to think outside of the box. The US will decide our foreign policy and the money markets will decide our monetary/fiscal policy. The bit in Love Actually where Hugh Grant puts the US president in his place is not based on true events.
doomanic
Full Member
No one is buying th NI rise as a tax rise on business. It’s a tax on workers.
Can you explain this please?
I'd like to hear more on this too. I assume it is something along the lines of businesses will simply try to suppress wage rises and not now recruit team member 10 even if the other 9 are sinking under their workload. But that is true of anything that impacts profits. And kelvin is right that employer's NI is a very good tax to target as it is pre-profit, so companies will struggle to offshore amounts to dodge it and if they do try, there are the employee's records (payslips etc) to show it.
Obviously. But the deal between the UK and Mauritius is a UK foreign policy issue. It is not for the United States to dictate to the UK what its foreign policy should be. Not even Donald Trump should have that right.
"The west" collaborates on defence. Diego Garcia is important to the west in the same way that Faslane is; it isn't as simple as the UK in isolation. Why run an aircraft carrier when you can run a land base?
There’s no use in pretending a UK can do very much to think outside of the box. The US will decide our foreign policy
Certainly they will, because the current UK government will let them and even encourage them to do so. My comment was simply a suggestion of an alternative approach.
There is absolutely no reason for it to be like that. Do you think the French government, for example, asks permission from the United States President what they should do with territory that they have control over?
Ah, I hear you say, but what about the "Special Relationship". This special relationship whereby the United States tells us what to do and we do what we are told, isn't that important?
Well the answer to that question is what are the disadvantages for France in having its own independent foreign policy and not being welded to a ridiculous term coined by a Tory Prime Minister?
That an excellent analogy
It is. Keir Starmer is the Erik Tan Hag of politics, hired with ridiculous amounts of expectation and promises of outlandish success, only to turn out to be a dithering technocrat who unable to provide his team with any sort of vision or motivation. How long before we hear him tell us to trust in the process?
I’d like to hear more on this too. I assume it is something along the lines of businesses will simply try to suppress wage rises
They won't try to suppress wage rises, they'll just pass the 2% rise directly on to their employees. My employer has already said as much, and many other employers, large and small, will be doing exactly the same. The only employers who won't will be those with a unionised workforce and long term fixed wage structures. The important thing though isn't the technicalities. Yes technically it's not a tax on workers, but the vast majority of voters will come to a different conclusion, and that's a big problem for Starmer and Reeves. In fact not only will voters think it's a tax on them, they'll also conclude that Starmer and Reeves are being dishonest and deliberately misleading, which is an even bigger problem for them.
Employers will squeeze their workforce if they can. Any additional cost that can't be mitigated will be used as excuse. Any successful raising of taxes on business needs to be hard to avoid. If you work for a large company, earning a large wage, and they are cutting your wages... take that up with them.
Kelvin - it would be great to remind you and others that not all employers are the same, not all are large companies, not all have huge reserves of cash or operate where the owners earn multiples of their staff's income.
I know of a small business where the changes are going to add additional pressure when things are already difficult, the owner has already suspended taking additional money from the business other than their really very average salaried income, which is actually less than the highest paid member of staff there.....
Agreed. But any tax on business, that can't be avoided, has the same effect. Fine to argue "don't increase tax on business" in the current economic climate. But don't pretend Employers NI isn't a tax on doing business, that is exactly what it is. And yes, many companies will struggle to pay that extra tax right now... and the small increase might even push some to the wall. At least with this tax there's help for the smallest companies [ Employment Allowance doubled ]. And for medium size up, the tax scales with size.
Fine to argue “don’t increase tax on business” in the current economic climate. But don’t pretend Employers NI isn’t a tax on doing business, that is exactly what it is
Its fine to argue this so long as you dont pretend its anything other than a tax on wages paid and as such any business will be subtracting this from the pay increase. Out of all the employer taxes available it is the one which is most closely correlated to the employees pay.
Well unless its a private limited partnership in which case the partners can award a increase to themselves without worrying about it.
They won’t try to suppress wage rises, they’ll just pass the 2% rise directly on to their employees. My employer has already said as much, and many other employers, large and small, will be doing exactly the same. The only employers who won’t will be those with a unionised workforce and long term fixed wage structures. The important thing though isn’t the technicalities. Yes technically it’s not a tax on workers, but the vast majority of voters will come to a different conclusion, and that’s a big problem for Starmer and Reeves. In fact not only will voters think it’s a tax on them, they’ll also conclude that Starmer and Reeves are being dishonest and deliberately misleading, which is an even bigger problem for them.
Your employer is cutting wages to fund the NI increase? Is that not illegal? Or do you mean allowing wages to fall below inflation?
Either way it sounds like you should leave for a better employer and more money if it's that's option for you, as it is for most employees.
I've been promised a healthy raise come pay review time later in the year. I'm not counting my chickens obviously but my employer has always been honest about these things, so I'll be surprised if it turns out they're lying this time. Surprised and then, within minutes, updating my cv.
Wage growth under the tories was a pitiful 0.3% per year in real terms. All labour have to do is beat that, which should be easy even while improving public services. The biggest risk imo is that they don't shout loudly enough about their achievements, allowing the right wing media to control the narrative, as they are doing with this wage growth stuff.
Weird tax on business that is also paid by State Schools, Charities, Government Departments, the NHS etc. It is perfectly easy to avoid you just substitute some of your workforce for off-shore staff as Curry's announced they were doing yesterday.
Currys already has offshored their IT and back office staff to India. Nothing new there.
State schools etc pay business rates etc as well. Doesn’t mean rates aren’t primarily a tax on business.
This is how it works, taxes on business are heavily resisted… why do you think governments have been stealthy increasing taxes on employees waged earnings for the last decade instead? The shift of the tax burden away from company owners, and onto employees, helping to erode real take home wages while shareholders do quite nicely thank you very much… that’s the story overlooked while the papers wang on about the cost to businesses (yes, tax on businesses increases their costs, as does the minimum wage, maternity leave, redundancy laws, working hours directives and all sorts of other measures needed to redistribute wealth and help workers live their lives).
They won’t try to suppress wage rises, they’ll just pass the 2% rise directly on to their employees.
Err...
What is the mechanism for that in the immediate term? Pay cuts? Cessation of chocolate rations? It might be possible to do a bit by giving less shifts to part-timers, but given when employer's NI kicks in, it wouldn't be much. Redundancy? That would be ridiculous.
It can be 'done' in the medium to long term by keeping a lid on pay rises and recruitment, but I struggle to see how it can be 'passed' on immediately...
Perhaps dazh can enlighten us?
The Employer’s NI rise is the result of having a lawyer and his careful use of lawyerly double speak in charge of the country. It’s not a direct tax on employees but will at the very least reduce the hiring appetite of companies because the cost per employee from their point of view has risen. Law of unintended consequences writ large. Another case is around private pensions. I think the IHT move on them was broadly right because too many were using them as wealth transfer plans rather than providing for later life, but quite a few people I know have said they would rather spend the money now than leave it to be taxed. Thing is, they are spending it on holidays abroad, so the wealth is simply being lost overseas.
None of this matters; there is no appetite for tax rises (mostly ever) in a low growth environment.
You have to get the economy boosted first. Reeves' central absolute mistake was to piss everyone off apart from those that don't understand taxation's real purpose, and expect growth.
It's of no use to anyone.
Her fiscal rules despite us shouting from the roof tops have been silly beyond belief.
They've not achieved anything. Was pointed out time and time again.
Boxing yourself to appease whom?
This situation is not going anywhere good until they do a turnaround on understanding the accurate sequences of spending and taxation.
It's truly ridiculous.
Remember the BoE continue to pay interest on reserves whilst there is no money for society.
Recalibrate your understanding of how it all works and then nothing Reeves does makes much sense.
Have you seen the latest poll with Labour in 3rd?
And this morning I get an email from Linked In recommended jobs..........Economic Adviser for Labour Markets at The Treasury. The advert says they already have 30 people trying to figure out how policy changes affect labour markets but they need another one. Whereas I suspect clarity of thought at the top might just cut through the lot of 'em. And here's something for private sector employees to chew on.....there is a 28% of salary contribution to the Civil Service defined benefit pension scheme.
And here’s something for private sector employees to chew on…..there is a 28% of salary contribution to the Civil Service defined benefit pension scheme.
That's great but the base salary is probably lower also.
Good pay and working conditions in the public sector is a positive thing for all employees, as it helps raise the bar for all jobs.
Defined benefit schemes are no longer offered to new employees in the private sector as the liabilities have the tendency to threaten their sponsoring employers with bankruptcy..........why can't such thoughts also apply to the very department of the Government charged with looking after the taxpayer's money?
Base salary is mid £50's k and based in Darlington
Yet... shareholders benefits can be protected. It's all part of the shifting of the costs of running companies, and states, from the owners of companies to their employees. "Unaffordable" employer provided pension provisions are jettisoned... it's down to the workers to fund their retirement from their wages... profits are maintained, share value protected.
I'm in the private sector, alway have been. Had a final salary pension for the first 9 years of my working life. Remember those? Nothing like that out there for anyone starting out now. I have no wish to see public sector workers thrown down the same "you're on your own" mineshaft as the rest of us.
Just a little reminder of where our Labour government stand on the issue of Gaza in the context of the (not yet confirmed0 ceasefire. Of course we expect Starmer to speak like a hideous hypocritical liar, but I'm disappointed that Darren Jones also lent his voice to the chorus of shame.
Kelvin, I don't need being patronised on pension arrangements. I used to run some. DB schemes no longer exist because they no longer made any financial sense - it's not a screw the workers save the companies argument, it's simply the maths which worked when the employees worked until they were 65 and died at 70 didn't work when then died in their 80s. If private sector employers were told they had to contribute 28% of salary to DB schemes for all employees we would have mass closures within weeks. The ownership and role of the public sector is different but that doesn't excuse it from some degree of financial responsibility, especially the department which is actually meant to stand for financial responsibility.
it’s simply the maths
Growing GDP, inflated asset bubbles and rising productivity equalling greater financial inequality and lowering living standards for many suggests your maths might not be correct no matter how simple.
The squeeze on earnings and work based benefits like pensions, have not been made for business survival that is the myth of neoliberal dogma, they have been made to increase the profits for the few.
I don’t need being patronised on pension arrangements
Feel free to consider how your own posts come across.
Companies say they can’t afford “generous” pensions. Workers still need pensions and need to set aside more of their earnings to build their own pot (of course suppressed earnings and rising cost of living means many simply can not).
Companies say they can’t afford higher taxes. Governments use fiscal drag and other stealth tactics to get more workers to pay more tax from their own earnings.
Same arguments. Companies can’t carry the costs, so employees must. Those that own shares in companies keep getting richer.
First inflation was down and now growth forecasts are up. Great work from Reeves and Labour.
Great work from Reeves and Labour.
I'm sure a 0.1% rise in GDP will have voters flooding back to the fold. Woohoo! We're all going to be rich!
First inflation was down and now growth forecasts are up. Great work from Reeves and Labour.
1) You might think 0.1% tick in either direction is significant but it's really not.
2) if that GDP forecast of 1.6 comes to light I will eat my hat - no point getting excited at a forecast. They're often wrong or revised down.
3) Even the Tories managed 1.6% growth or more 9 times in the last 14 years and that was considered flat.
It's like folk have just lowered the bar to give Labour a chance. Just to remind you we wanted better than the Tories.
(Also Rach ought to know that Interest on reserves is a £34bn pa subsidy to banks at currently. More than enough to fill that black-hole 1.5 times if she wanted to.)
One of the worst things to happen to pensions for the young was the smoking ban (as the culmination of the prevalence of smoking reducing drastically through the 80s/90s).