Should I forgive the Conservatives?

Well that definition is usually an easy one…

So if the tories came back and tried to deliver things you agreed with you would still never vote for them? At times we need to remember that past performance is no guarantee of future performance.

Have you had a look at the present Tory party? Are you seriously saying that theres even the remotest likelihood that Dave and chums are suddenly going to discover some previously unknown social conscience, and a burning desire to create a genuinely meritocratic and fair society?

Do you remember Dave ‘detoxifying the Tory Brand’ – hugging hoodies, and staring into the middle distance, with a dog, , while claiming to be the greenest government ever. It was all really really believable, wasn’t it?

They are what they are.

Party politics seems to be choosing the colour and some of the spec of your political vehicle without actually being able to change make or model, basically same car slightly altered. There doesn’t seem to be any credible alternative to the main parties on paper and in practice even less so. They promise much but when elected simply blame their inaction and failure to deliver promises on the mess left by the previous encumbents. If the booths at my local election hall reached the floor I’d wipe my arse with my ballot.

If the booths at my local election hall reached the floor I’d wipe my arse with my ballot.

Joolsburger wins the internet today!

Do you remember Dave ‘detoxifying the Tory Brand’ – hugging hoodies, and staring into the middle distance, with a dog, , while claiming to be the greenest government ever. It was all really really believable, wasn’t it?

He may well have meant it, but the party is still run by the 1922 committee who still haven’t got over the abolishment of slavery and giving women the vote!

I didn’t intend to post again, however, seeing as most folk appear to be playing nice.

Someone posted about teaching a Man to fish. Continuing that point, I feel it’s offensive to anyone in FTE, to hand them Gov financed “top-up” benefit in addition to their wage.

I see this mechanism as Gov subsidizing share holder dividend/ROI. I dislike the fact that folk might work a 40hr week and still not manage to pay for an acceptable lifestyle from their own, hard earned, income, free from Gov assistance in the form of state benefits.

Were I in a position to do so, then rather than select the lazy option, just sit back and elevate taxation to fund handing out top-up benefits to the FTE. I’d like to explore the effect of somehow trying to address the apparent flaw in pay structures so as to enable those in FTE to realize their total income, through their “pay packet” alone.

I feel it’s offensive to anyone in FTE, to hand them Gov financed “top-up” benefit in addition to their wage.

It’s all part of increasing inequality. Subsidise share holders by allowing them to pay below living wage and then tax the middle classes to pay for tax credit subsidies to be given to the lowest paid so they can afford to eat / have families.

Would be much more sensible to just up the minimum wage, but that would cost shareholders, which is a big no no as they fund the establishment (to maintain / increase inequality).

The tax credit system has just pushed wages down and decreased mobility at the bottom, whilst effectively creating a massively expensive to administer system by which literally of £tens of billions of fraud and overpayments have taken place – the cumulative total of these is more than the cost of the NHS for a whole year.

This shouldn’t really come as a surprise though – the 2 lead contractors on the project to design / implement it repeatedly raised these risks as the design was being finalised- Gordon Brown and John Prescott (in his role of ODPM) ploughed on though and a decade down the line the effects are clear for all to see.

by which literally of £tens of billions of fraud and overpayments have taken place – the cumulative total of these is more than the cost of the NHS for a whole year.

You sure?

UK government figures for 2012 estimate benefits overpaid due to fraud is £1.2 billion and tax credit fraud is £380 million. So just under £1.6 billion in total; less than 1% of the overall benefits and tax credits expenditure and less than benefits underpaid and overpaid due to error.

http://www.cas.org.uk/features/myth-busting-real-figures-benefit-fraud

a massively expensive to administer system by which literally of £tens of billions of fraud and overpayments have taken place – the cumulative total of these is more than the cost of the NHS for a whole year.

Credible source for this claim please

NHS budget is £150 billion iirc
Tax credits entire budget was only £30 billion for 2010-11

That seems a most unlikely claim

EDIT: Must type faster as footflaps was there first.

I see this mechanism as Gov subsidizing share holder dividend/ROI. I dislike the fact that folk might work a 40hr week and still not manage to pay for an acceptable lifestyle from their own, hard earned, income, free from Gov assistance in the form of state benefits.

I’m in total agreement.

Tax Credits do seem like a method to socialise the hidden cost of a low wage economy

The problem is elasticity of supply in the labour market though, which dare i mention it is driven by immigration as well as local labour markets.

While there are people willing to stack Tesco’s shelves for minimum wage there is no upward pressure on wages for this type of low skilled work.

It then falls to government to enforce minimum pay and it would seem given the amount of in-work benefits being paid that this should be higher.

£6.50 an hour – which is roughly £13k for a full time year seems pretty poor

Upping the minimum wage puts money in the pocket of people more likely to spend it too, helping to drive consumption

Upping the minimum wage puts money in the pocket of people more likely to spend it too, helping to drive consumption

Ahh but have you not heard of trickle down economics?

Rather than give the poor a living wage you give the multi-millionaires all the money in the entire economy and it trickles down to the poor…

It’s the basis of the Tory economic plan.

This lot aren’t really tories, they’re just a bunch of middle managers with an aristocracy jealousy complex.

They want to be rich, and they want their friends to be rich, and that’s the start middle and finish of their lives narrative. They and the people like them measure their self worth solely by their bank balances, they think that’s what makes them happy, the hoarding and spending (Only ever in competition with their friends) of money. They don’t really care about anything else, because they “understand” that money brings with it the need NOT to stand in line, or to free themselves from mixing with “the other” (anyone without money, or that doesn’t share their attitudes to money)

Politically they cannot abide the fact that some people should be helped, because despite all the benefits they themselves have had that has come from society, they cannot and will not see that truth. They are simply blind to it. They have a narrative that they share amongst themselves they THEY alone are the creators of their own success, and believe wholeheartedly that they alone should benefit from that.

selfish, narrow minded, and reactive.

No one with an ounce of social consciousness should tolerate them, let alone vote for them.

JY today must be that day where we agree with each other.

Yes agreed higher taxes don’t always mean less tax is collected, I phrased my post deliberately that way. I would agree I am one of the more right of center, pro business posters here.

On the employment / location flexibility yes you are probably right a lot of people couldn’t move countries but as we are talking about the 1% or 2% who might be impacted by a top rate tax change you don’t need many to move to have an impact. With the example I used above one 250k earner pays the same tax as 47 people on 17k. Plus then you have all the behavioral changes for people running their own businesses, investing less, moving money around rather than paying it to themselves.

Tax Avoidance ..

I feel compelled to mention the case of Dale Vince a Labour donor and wind farm entrepreneur who was unable to explain his tax status / avoidance techniques on Newsnight (he outright denied he was a tax avoider). He paid himself via a £3m loan, that’s taxed as a benefit in kind depending on the interest rate (which he conveniently couldn’t recall as he’s not a financial expert 😉 ). If we assume the rate is 2% below market then tax due is roughly £30k pa. That compares with about £1.5m-£2m tax due if he’d been paid normally. Now eventually the full amount of tax will be due on the loan but you can keep deferring that year after year whilst enjoying the use of the money.

Tax Credits do seem like a method to socialise the hidden cost of a low wage economy

The problem is elasticity of supply in the labour market though, which dare i mention it is driven by immigration as well as local labour markets.

Indeed. And thats why the labour party won’t have an EU referendum, why the Tory’s won’t either, no matter what they say at present, and why even UKIP wouldn’t actually do anything about it, if it came down to it either.

All the main parties corporate funders demand a constant supply of cheap labour to keep wage costs down to an absolute minimum. And open door immigration supplies this in droves.

With the Tory’s, you just expect them to represent corporate interests. Its what they do. But labour? Uppity northern labour MP’s like Simon Danzuk have tried repeatedly to point out to the party leadership that the reality of immigration in their core constituencies, is wages being driven relentlessly down for their traditional voters . But Ed (as on a lot of subjects) doesn’t want to engage with the reality of the situation, and just parrots the same thing. That immigration is a ‘positive’ thing as it provides cheap Lithuanian nannies, and Polish builders who can do a good cheap job of your new extension, as there a 15 of them living in a 3 bedroom house.

As a result of this, labour are going to hemorrhage massive amounts of votes to UKIP in their previously ‘safe’ seats (as they did in the Middleton by-election) as Nigel is shrewdly targeting exactly these disillusioned voters, who are still being ignored by – as Simon Danzuk refers to them – Hampstead Heath Labour

Upping the minimum wage puts money in the pocket of people more likely to spend it too, helping to drive consumption

So does consumption go up? Or does it stay the same because the cost base is now higher and everything they bought previously is now more expensive?

So does consumption go up? Or does it stay the same because the cost base is now higher and everything they bought previously is now more expensive?

Things would only be more expensive if you maintained dividends at the same rate. If you made the wage increase neutral, prices wouldn’t need to rise.

Plus, employers tend to look at staff as an asset more when they pay them higher wages and so they might invest in increasing productivity, so prices could actually fall.

It’s not a simple linear relationship.

@richmtb, there are indeed along line of students who are prepared to stack shelves for £6.50 an hour. There are also a whole range of cash in hand jobs you can do for double that rate. You can start your own business and work all hours and make far less. However my point is that within the EU there are a large number of countries with much lower wages, so those people will either travel here to do the work (and live more simply than the Brits will tolerate) of they will do the work in their home country and export the goods to the UK.

I am in favour of higher min wage and wider enforcement of a living wage which co-incidentally neither should be uniform across the country and a significant reduction in the use of zero hour contracts. However, the impact of such changes are material on employment levels.

@nickc – you need to get your head round the fact that without a vibrant economy social programmes, NHS etc are unaffordable. I have always found it interesting that a country like the US which is made up of economic migrants most who arrived with nothing is materially more right wing than the UK and the rest of Europe.

I wish both the media and politicians stopped pushing the myth that we the electorate are voting for who is in government and the Prime Minister. WE DONT

We vote for a single local MP. Once elected that MP can sit with any party or non they choose and vote however they see fit. It is each parties machine to decide who is the Prime Minister by whatever means it chooses. It is possible, though unlikely, that the Party Leader doesnt get elected as the local MP so cant be prime minister even if their party forms the next government.

Plus, employers tend to look at staff as an asset more when they pay them higher wages and so they might invest in increasing productivity, so prices could actually fall.

Though the law of unintended consequences also applies, especially in this age of technology – pushing the wage cost up may draw it nearer to the break point where it becomes economically sensible to replace staff with automation, they quite literally price themselves out of a job.

I have always found it interesting that a country like the US which is made up of economic migrants most who arrived with nothing is materially more right wing than the UK and the rest of Europe.

because they worship at the feet of money, you only have to spend a small length of time to see what happens to a country that’s being run by and on behalf of the wealthy white middle class folk….That’s only ever been run by the white wealthy middle class white folk…You can hardly blame people for seeing only one way out of their predicament.

All the main parties corporate funders demand a constant supply of cheap labour to keep wage costs down to an absolute minimum. And open door immigration supplies this in droves.

@binners but controlled immigration could do exactly the same thing, there would still be droves of potential immigrants applying to come into the country.

@nickc – Indeed I worked there for 3 years but its the world’s most successful economy, they must be doing something right ?

Depends on your criteria.. Making filthy amounts of cash for a minority isn’t high on my list of national aims.

I believe I’ve seen two suggestions to my earlier point. Increase the MW or enhance/permit “trickle down”.

The more I look at it, the more complex it becomes. I’m not convinced with TDE, but I wouldn’t discount it if I could see that it would really work. Raising the MW will send ripples through the economy, not least it would have an impact on inflation. My concern with MW is it appears to have the potential to turn whichever state/economy that introduces it. Into a less attractive place to build a business, when considered in comparison with alternative places where there may be no MW at all. Even if the person who starts/owns the business has a sufficient sense of social responsibility to ensure the employees are paid correctly. Who’s to say that company may not suffer from not being able to attract investment?

I’ll engage with the immigration comments as far as, I don’t care about where you move to. If you decide to go somewhere to participate and to contribute, why shouldn’t you be welcome?
However, from an economic perspective, the law of supply and demand would appear to be in operation. So, where it might be philosophically attractive to invite the world to come live next door. Common sense would appear to dictate that your new neighbours will have the same obligation as you, to contribute on all levels, ecomonically and socially.

Not sure how we got onto the subject of MW, specifically, something to do with free fish, maybe.

Frankly there’s loads to either agree with or hold against any of the political parties, besides the inescapable truth… Haters gonna hate.

Junkyard – lazarus

I assume its something we all basically agree on [ bar a tiny minority] and all we are really doing is discussing at what % and where rich starts
Yes and maybe.

I worked there for 3 years but its the world’s most successful economy, they must be doing something right ?

When china inevitably overtakes them will the same thing apply?

but its the world’s most successful economy

If by successful you mean “forcing every other country at gunpoint to use it’s currency as reserve and then getting rich by printing money…” then yeah, I see what you mean…

wealthy white middle class folk
Oh, ok then, I’ve no time for distinction based on skin colour, so I’m out.

Have fun.

Yes agreed higher taxes don’t always mean less tax is collected

oh heck, we will get on to laffer curves – or taxable income elasticity as it should be called.

Raising the MW without increasing productivity increases inequality – labour markets 101 – that’s the (lack-of-joined up) thinking where Miliband excels. Great soundbite, crap policy.

Oh heck 2 – migration alerts. Thank good ness there isn’t a shall I forgive UKIP thread for allowing such BS to become part of the accepted narrative!!

When china inevitably overtakes them will the same thing apply?

They are both doing something right, different things in different ways. China has 1.2 billion people and low wage costs. Strictly speaking it had low wages costs, its now more expensive than many in the region.

Laffer curve – typical economist thinking – take two fixed points at 0 and 100% tax rates, and pretend you know how the complex non linear system behaves between them

What is the US doing right? Well, starting off in a huge resource-rich country with only a few poorly armed residents is a good start.

Laffer curve – typical economist thinking – take two fixed points at 0 and 100% tax rates, and pretend you know how the complex non linear system behaves between them

No they don’t, that’s the point. But don’t let that stop you dismissing the concept and missing the crux of the issue….

Yeah, right.

So doc, please enlighten those of us in the wilderness, how do you decide where to set the marginal rate of tax?

what things need to be taken into account?

Many of ??????’s business-related proposals focus on changing the supply side of the UK economy — how its labour market, education and training system, and financial framework operate. They also emphasise the importance of increasing the level of competition within industries.

Guess which party?

And guess what comes next?

@nickc – Indeed I worked there for 3 years but its the world’s most successful economy, they must be doing something right ?

That must be of great comfort to those who have no healthcare or basic welfare.

No offence THM, but given the total failure of economists (or just about anyone) to spot the 2008 crash before it happened, you’re reputation for understanding how economies really work isn’t looking that shiny….

Non taken, since the premise is flawed. Many (including the BOE) saw what was coming and the bright ones made a lot of money out of it.

Indeed the Deputy Chancellor was also schooled in a way which told him exactly what was happening. He, like the Gov of BOE, chose to ignore the laws of economics

Ditto, the economic destruction of S Europe is/was utterly predictable.

Politicians can overrule economics in the ST but economics wins in the end (every time).

So doc, please enlighten those of us in the wilderness, how do you decide where to set the marginal rate of tax?

what things need to be taken into account?

Err .. after you Claude – you are the one claiming that economists have got the economy all figured out.

However, to get the ball rolling – the notion that there is a tax rate at which the revenue is highest is, well, self evident, but the idea that the curve defining the revenue as a function of rate can be predicted, and is a simple curve is naive at best. There is no reason why this curve should be constant over time, between countries, or have only one maximum, and indeed there is no empirical evidence that it is so.