Public borrowing and the size of the state

 

          June’s borrowing totals were not a pretty picture. The state borrowed £ 0.5bn more in June 2012 than in June 2011, after adjusting for specials.  The April – June quarter saw borrowing £6.8 billion up on the same quarter a year earlier, again adjusted for the Royal Mail Pension Fund and the closure of the special liquidity scheme for banks.

          However, there is some good news in the figures. At last the rate of increase in public spending is slowing. Current public spending was only 2.1% higher than a year before. Most of the increase came from benefit and state pension spending, where the substantial price related increase in rates last autumn is pushing total spending up sharply on this item. 

          The private sector  employment figures reinforce this good news, with 800,000 new private sector jobs since the government came to office.  This  outpaces the job losses in the public sector which now exceed 400,000,and mean a lower cost base for the public sector going forwards.

            As expected here on this blog, the main reason for the shortfall in the borrowing figures is poor revenue. Income tax receipts continue to fall in cash and real terms.  This should be no surprise, as the rate for higher earnings is uncompetitive and clearly many have no intention of paying it. 2nd  Quarter  2012 income tax receipts are down on 2nd quarter  2011, which in turn were down on 2nd  Quarter  2010. The economy has grown a little since then and employment has risen, so it is behavioural  not cyclical.  The last quarter brought in £32.7 billion from total income tax, compared to £34.366 billion in the same quarter in 2010.  The losses doubtless are all at the higher end, as PAYE payers on normal salaries will be paying as much or a bit more thna two years ago.

Public Sector employment:     March 2010  6.323m

                                                              March 2012  5.899m

Private sector employment     March 2010    22.539m

                                                             March 2012     23.382m

              Some of you have pointed to the possible discrepancy between the output figures, showing two quarters of declining activity, and the employment figures, showing jobs growth. The only way both can be right is if productivity is falling. It does seem odd that it should be falling so much. It seems even stranger that despite the rate of increase of the total population from migration, actual output is down. I suspect the output figures will be revised up a bit in due course. I think I trust the employment figures a bit more.

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68 Comments

  1. alan jutson
    Posted July 21, 2012 at 6:09 am | Permalink

    Perhaps another one of the reasons tax take is down, is that the Private Sector jobs created, pay much less than those lost by the Public Sector.

    We are all aware that some of the Private Sector jobs created are part-time or low wage, where perhaps tax credits are claimed as well.

    We really will be in a Pickle if we have to start borrowing at a higher rate of interest than present to fund increasing government debt.

    • alan jutson
      Posted July 21, 2012 at 6:50 am | Permalink

      Another reason for a reduction in tax take.

      Perhaps the alternative economy is growing as well !

      Bound to happen when tax rates are so high.

      Also remember that we now have a larger than ever number of people here from other Nations/Country’s who are used to such arrangements, indeed in many places abroad it is regarded as the norm.
      They have experieced it, have practiced it, and are used to it.

      I would suggest that the higher the tax rates, the higher the temptation.

      • Bob
        Posted July 21, 2012 at 9:18 am | Permalink

        You’ve hit the nail on the head as usual Mr. Jutson.

      • Credible
        Posted July 21, 2012 at 10:11 am | Permalink

        Oh, so its OK not to pay tax if the tax rate is high?
        If the tax rate was halved, the same people would continue to pay less than they should. If the tax system was strongly enforced, the extra tax brought in might allow a tax cut for everyone.

        Agree with you that the new jobs are probably mostly part time, low pay, low skilled and add little to ecomomic growth.

        • Mike Stallard
          Posted July 21, 2012 at 1:12 pm | Permalink

          No.
          The problem now is that ordinary folk see the tax as a heavy unnecessary burden which, like the dole, like the bankers’ bonus, like the MPs’ expenses, it is their entitlement to avoid.
          The government is seen as just another money making racket to be cheated and avoided at all costs.
          Today we hear in the Daily Telegraph Charles Moore describing the digesting scandal of the PFIs which Mr Brown used to avoid putting the true figures on the books.
          I hope all this means that a new age of integrity is dawning……..

        • alan jutson
          Posted July 21, 2012 at 10:17 pm | Permalink

          Credible

          I do not see anywhere that I suggested not to pay tax was correct, or a good idea.

          Having been in business for years attempting to compete against these people, and in many cases failing because I refused to join them, or operate in the same manner, I despise the practice, as it puts good businesses who do pay taxes at severe risk of failing.

          The fact of the matter is a growing number of people are operating in the alternative economy, high levels of tax or not.

          I am pleased I am now retired, and do not have to compete with such people.

      • uanime5
        Posted July 21, 2012 at 9:19 pm | Permalink

        Since when had the alternate economy had jobs that pay over £150,000 per year?

        • alan jutson
          Posted July 21, 2012 at 10:22 pm | Permalink

          You really have no idea do you.

          Many do not charge or pay tax or Vat, they get away with it because people want the job done as cheaply as possible, and only then moan when poor work is the result, by which time the sim card is in the skip and there “cheap” workers have long gone.

          How do I know.

          Because on many occassions My Company has been asked by those same customers to rectify work done by these cowboys.

          My reply was always the same, if you thought we were too expensive in the first place, we sure as hell will be now.

  2. Mike Stallard
    Posted July 21, 2012 at 6:20 am | Permalink

    Thank you for these extremely interesting figures.
    We on the right quite often belly-ache about the people on the dole, on vulnerability benefits and so on who are cheating the State – taking and not giving. The people on the left, on the other hand, go on about the bankers and people who are rich who are not paying “their fair share”.
    Do you know what? Both are takers not contributors. Just like me (OAP).

    These figures are actually not really impressive: I would very much like to see a quicker movement in the right direction. In the past, too, government figures have been, let us say, massaged…….

  3. lifelogic
    Posted July 21, 2012 at 6:43 am | Permalink

    Indeed productivity is down – we are importing low skilled people and capital is sensibly being invested outside the UK where they have sensible tax and employment regimes.

    Tax revenues down, as tax rates are far too high, even for maximum tax take, the rich and capital are leaving (other than non doms who have a special regime).

    Meanwhile we have the Barmy Cameron saying “becoming a sort of greater Switzerland would be a complete denial of our national interest”

    GDP per head in Switzerland is nearly double, a large trade surplus rather than a large trade deficit and better in almost every figure/index that you care to name. Perhaps he could tell us why exactly “it would be a denial of our national interest”. Taxes only 30% of GDP, higher innovation, better health, stronger currency, higher productivity, better food, …………….

    What does he see not to emulate, apart from the fact that they do not cross the road until the green man comes on even when there is not a car for miles. I agree this is a bit odd!

    • forthurst
      Posted July 21, 2012 at 10:39 am | Permalink

      The referenda prevent an ingroup seizing control of policy in order to act against the interests of the majority as with the LibLabCon party. Clearly this has been extremely beneficial for the Swiss.

      • zorro
        Posted July 21, 2012 at 3:14 pm | Permalink

        Yes they have a more effective directly democratic system helped by the fact that they operate on a cantonal system for local matters. I quoted what Cameron said yesterday and lifelogic has reiterated the argument proposed by ‘Cast Elastic’…..

        How can this man have any credibility left? How can he so misjudge the situation. I think that a good majority of the population would love to be a greater Switzerland with a far stronger economy and cultural identity, and stay out of the mad foreign policy aims of certain countries and their manufactured wars….like in Libya and Syria, including giving succour to ‘democrats’ like the LIFG and AQM who we are supposed to have been fighting against previously…..’We are at war with Eurasia’…oh no we are not now we support them.

        zorro

        • zorro
          Posted July 21, 2012 at 3:15 pm | Permalink

          War is Peace
          Freedom is Slavery
          Ignorance is Strength

          zorro

    • bob webster
      Posted July 21, 2012 at 1:09 pm | Permalink

      We are also exporting high skilled workers in large numbers. Last year over 450,000 people came to the UK while around half that number left. Everyone of working age emigrating to places like Canada and Australia were most likely net contributors to the UK economy. My own neighbour, an engineer, and his wife, a teacher, departed for Brisbane a few months ago because they were fed up of struggling make ends meet after paying over 15,000 a year in tax and NI between them. Some immigrants have high earnings potential, but the vast majority will end up in low paid jobs or unemployment. If we carry on replacing engineers and teachers with curry chefs and unemployed refugees tax receipts will continue to fall.

      • zorro
        Posted July 21, 2012 at 2:41 pm | Permalink

        It’s actually a lot higher. See these figures taken from ONS report dated May 2012….

        • Estimated total long-term immigration to the UK in the year to September 2010 was 586,000, similar to the level seen since 2004
        • Estimated total long-term emigration from the UK in the year to September 2010 was 344,000. This has declined since the year to December 2008, when total emigration from the UK was estimated at 427,000

        zorro

        • zorro
          Posted July 21, 2012 at 3:18 pm | Permalink

          Can you blame anyone who can leaving the UK with the present crowd in charge? They are scarcely different from Labour, but actually, if this can be believed, give off a worse impression of incompetence……

          zorro

          • lifelogic
            Posted July 21, 2012 at 6:02 pm | Permalink

            I have left already but no this lot in charge and Labour to follow so at least 8 years of pro EU tax borrow and waste socialism.

          • Bob
            Posted July 21, 2012 at 8:11 pm | Permalink

            @zorro

            “They are scarcely different from Labour…”

            I think a lot of Tory voters have finally realised this. And not before time.

      • BobE
        Posted July 21, 2012 at 3:39 pm | Permalink

        The trick for a university student is to get the degree then work abroad for 5 years. The debt is then written off. We loose the talent and the money!

      • Trevor Butler
        Posted July 21, 2012 at 7:31 pm | Permalink

        My wife and I are off to New Zealand early next year. We’ve had enough of living on the breadline due to income tax, council tax, green tax, fuel levy outrageous train fares, out of proportion rental costs and last but not least politicians who are only in it for themselves

      • uanime5
        Posted July 21, 2012 at 9:24 pm | Permalink

        Well that’s what happens when companies in the UK pay their engineers so badly compared to other English speaking countries. I suspect that it the Government cuts the pensions of teacher, doctors, nurse, and other public sector workers we will see an exodus of these professionals to other countries.

        • REPay
          Posted July 22, 2012 at 2:40 am | Permalink

          Unfortunately public sector workers tend to be not very mobile…Being British they probably could not get a job in a non-English speaking country. Secondly, they tend to have experienced inflation linked pay rises (so they are detached from the real economy – particularly those who help formulate policy,) and expect the taxpayer to fund their retirements, so most salaries in the EU would seem uncompetitive to them. German doctors flock to the NHS…they are better paid here. Also many have a state dependent attitude that saps drive and ingenuity. I am afraid massive overspending has made the public sector model unaffordable in the west. Time to smell the coffe!

          • uanime5
            Posted July 22, 2012 at 6:18 pm | Permalink

            You’d be surprised how well doctors are paid in the USA, so they can leave if unhappy.

  4. Simon
    Posted July 21, 2012 at 6:47 am | Permalink

    The unemployment figures are compiled by telephone survey. They have an uncertainty of plus or minus 30,000 per monthly change. A change of less than 130,00 in a year is within statistical noise, a change of 200,000 over two years is barely above statistical noise.

    The jobless claimant count number is compiled from a count of people signing on, and is a much more reliable number. You will note that this number is going up.

    How to reconcile the two? The most likely (again, statistically) explanation is that unemployment rate is flat, or very nearly so, and the working population has grown slightly.

    The fact that social security payments are up should make it clear that unemployment is not going down in any meaningful way. Unlike inflation…

    If you assume that the figures for GDP are roughly correct (i.e. either zero growth, or a slight fall in output) and that the employment numbers are also roughly correct (either zero or a small fall in unemployment) then one explanation is that the UK has lost some well paying jobs, and gained some low paying ones – perhaps part time employment that requires topping up from social security payments has increased.

    Interestingly, income surveys would suggest that this is actually the case, but they are less reliable than employment surveys.

    .

    • uanime5
      Posted July 21, 2012 at 9:26 pm | Permalink

      The number of people unemployed is higher than the number of people signing on for 2 reasons.

      1) Not every unemployed person claims benefits.

      2) Anyone on the 2 year long Work Programme isn’t considered unemployed, even though they have to sign on every fortnight. Once again the Government is paying private companies to help massage the figures.

  5. Ferdinand
    Posted July 21, 2012 at 7:06 am | Permalink

    This isn’t necessarily true as companies could be building stocks which will not be reflected in output. I think this is a possible scenario.

  6. Shinsei67
    Posted July 21, 2012 at 7:43 am | Permalink

    Surely the loss of tax revenue at the higher end isn’t so much because of the 50p tax rate but because City bonuses have collapsed in the last two years.

    With City bonuses down 80% from 2007 levels this is a substantial sum of lost tax revenue.

    • uanime5
      Posted July 21, 2012 at 9:33 pm | Permalink

      Actually the collapse of City bonuses only leads to a loss of income tax revenues, not a loss of tax revenues. Since the money that would have been paid in bonuses hasn’t disappeared if the companies pay it as dividends then it will be subject to capital gains tax, while if the company keeps the money as profits it will be subject to corporation tax.

      Also if those in the City have their salaries paid to a private company and then get paid by this company in shares this will result in a loss in income tax revenues and a rise in capital gains tax revenues.

      • alan jutson
        Posted July 21, 2012 at 10:29 pm | Permalink

        Corporation tax is lower than the 40% income tax rate.

        You only pay capital gains tax when you realise a profit above your annual allowance.

        Hence you have defeated your own argument.

        • waramess
          Posted July 22, 2012 at 10:06 am | Permalink

          And most of the banks are sporting pretty hefty losses that mean they will pay no tax for a number of years

        • uanime5
          Posted July 22, 2012 at 6:21 pm | Permalink

          That’s assuming that bankers were paying the 50% income tax rate (a large number of these bonuses were worth more than £150,000), rather than getting it through a private company and paying capital gains tax.

      • David John Wilson
        Posted July 22, 2012 at 12:11 pm | Permalink

        Unless they are paid to a private company dividends are subject to income tax. What needs to be stopped is this ability to pay dividends and salaries into private companies that have no function other than tax avoidance. The solution is quite simple: always charge income tax on dividends and salaries paid into companies that are mainly owned by an individual. That company can reclaim those taxes (particularly on dividends) if it can prove that it performs a genuine function other than tax avoidance, generating the majority of its income from that function.

      • lifelogic
        Posted July 22, 2012 at 6:32 pm | Permalink

        @uanime5

        You do not pay Capital Gains Tax on dividends you pay it on Capital Gains as is suggested in the name.

  7. Brian Tomkinson
    Posted July 21, 2012 at 8:10 am | Permalink

    JR: “April – June quarter saw borrowing £6.8 billion up on the same quarter a year earlier…..Current public spending was only 2.1% higher than a year before.”

    Is this the austerity that the markets find so comforting? Let’s face it the BoE has been printing money to allow this profligacy to continue and without it Osborne wouldn’t be able to crow about the low costs of government borrowing. This wasn’t the performance we expected when we voted Conservative . Where is the real difference from what Darling was planning? Lord Ashcroft might find that even more than a third of Conservative supporters are defecting before long. Many on this site seem to be in the one third who have already decided and I am one of them.

    • Michael Lee
      Posted July 21, 2012 at 7:49 pm | Permalink

      This is an interesting observation, and perhaps I should follow. But where would we go? Possibilities might be…
      (1) UKIP: Nigel Farage makes sensible noises, but in practice UKIP achieves little.
      (2) BNP: Despite increasing support, internal disputes and megalomania divided the BNP after the 2010 general and local elections. That had happened before in 2000. Nick Griffin was never the most important person in the BNP; Eddie Butler was the organizational brain behind the operation, but having been made the scapegoat for the poor performance in 2010, now he’s departed.
      (3) The Milliband & Balls Laugh In Party.
      (4) The Lib/Dem Opportunist Crawler Party.
      (5) The Green & Stone-dead Party.
      (6) The JR Conservative Party.

      • Alan Wheatley
        Posted July 22, 2012 at 7:16 am | Permalink

        Past achievements are not necessarily a guide to future achievements. When you vote at a general election you are influencing the future.

  8. Bazman
    Posted July 21, 2012 at 8:24 am | Permalink

    800,000 new private sector job? In which industries and what pay and conditions? Has the cost been externalised onto the state from the state?

    • zorro
      Posted July 21, 2012 at 11:34 am | Permalink

      Of course, a lot of these jobs are low paid and supplemented by tax credits. You can see clearly on the high streets and job centres.

      John keeps on quoting the private sector job figures without considering what type of jobs they are……It is clear that more Brits are unemployed, whilst migrants are taking the vast majority of jobs (see new NINO figures)…..It also blows a hole in the migrants increase productivity propaganda.

      Zorro

      • lifelogic
        Posted July 22, 2012 at 6:33 pm | Permalink

        Indeed.

  9. Acorn
    Posted July 21, 2012 at 8:27 am | Permalink

    Productivity is falling as we are well into the second dip of the “double dip” at the moment.
    “• UK labour productivity fell by 1.3 per cent in the first quarter of 2012 on an output per hour basis. Market sector productivity fell by 1.6 per cent on this basis
    • Labour productivity in the services sector fell by 0.4 per cent in Q1
    • Labour productivity in manufacturing fell by 2.6 per cent in Q1, the steepest drop since 2008Q4. Labour productivity in the broader production sector fell by 2.7 per cent
    • UK unit labour costs increased by 1.4 per cent in Q1. Manufacturing unit wage costs increased by 2.1 per cent over this period”.

    http://www.ons.gov.uk/ons/dcp171778_267126.pdf .

    • Simon
      Posted July 21, 2012 at 10:32 am | Permalink

      These figures show that sales are down, but people have not (yet) been made redundant.

  10. backofanenvelope
    Posted July 21, 2012 at 8:50 am | Permalink

    A drop in public sector employment of 400,000? Really? My local council has reduced its payroll by 2,000 over the last 2 or 3 years. No it hasn’t. A third of these people have moved sideways and are still on the public payroll – they are just not working for the council. Or not directly anyway.

    • David John Wilson
      Posted July 21, 2012 at 10:16 am | Permalink

      Most of these figures can be explained by the increase in outsourcing by public bodies. This causes a lowering of public body employment, an increase in private employment and a reduction of productivity in private companies. It would be interesting to know what the figures would be if all new outsourcing was removed from the statistics.

      • zorro
        Posted July 21, 2012 at 1:12 pm | Permalink

        This also true, but again difficult to calculate the extent without more analysis.

        zorro

  11. Bob
    Posted July 21, 2012 at 9:25 am | Permalink

    “…the rate for higher earnings is uncompetitive and clearly many have no intention of paying it.”

    If the BBC staff, a lefty comedian and Ken Livingstone all agree that our tax rate is too high, then I would take it as confirmation that it is too high!

    • Michael Lee
      Posted July 21, 2012 at 10:53 pm | Permalink

      It was explained that the reduction in the top rate of income tax from 50p to 45p would result in a greater flow of revenue to the treasury; there would be benefit both to the rich and the poor. Yet MilliBalls persisted in reiterating that this was a tax cut for millionaires. The 50p rate of tax appeared to be being justified as a punishment for being successful and wealthy.

      At an income tax rate of 50p in the pound, half of one’s income disappears down the tax tubes before there has been any opportunity to spend any of it, at which time a 20% rate of VAT would generally be incurred. In his usual moderate and restrained tones, Mr Redwood described this as “anticompetitive.”

      At the other end of the pay scale, an effective way of avoiding income tax is to not bother to work.

  12. Manof Kent
    Posted July 21, 2012 at 9:38 am | Permalink

    We cannot afford the size of the state we have.
    Too many and too generous benefits .Why were all these inflated by 5.2% in April when most salaries are capped well below this?
    Too much regulation requiring too many civil servants to supervise;cut both.
    I was most impressed at the way Estonia gripped the austerity nettle a couple of years ago.
    Benefits such as the BOAP were cut and widespread budget cuts have enabled the country to balance the books.Painful but necessary as they are now growing strongly again.
    Pity they have done this to enter the Euro!

    • zorro
      Posted July 21, 2012 at 1:17 pm | Permalink

      If they hadn’t uprated benefits by so much, the picture would certainly be better. No-one else is getting a rise, why should you get a rise for doing nothing? There are plenty of sales going on. Do your shopping in the sales and budget more wisely like everyone else has to do.

      zorro

      • lifelogic
        Posted July 22, 2012 at 6:36 pm | Permalink

        Indeed they have plenty of free time after all.

  13. Martin
    Posted July 21, 2012 at 10:08 am | Permalink

    Given that the number of people in work has risen and PAYE receipts are declining doesn’t this show that most of the new jobs are part time and/or minimum wage.

    Doesn’t this show that the economy is doing very badly?

  14. Neil Craig
    Posted July 21, 2012 at 10:21 am | Permalink

    One of the things “expert commentators” find impossible to explain about this recession is that employm,ent is rising even as production is falling.

    I can explain it by acknowledging the correlation between electricity use & GNP and the fact that government Luddism is actively reducing our supply & raising prices. This means that the economy is actually technologically devolving. In effect we are not in a 2012 recession but the equivalent of a 1990s boom & production is retruning to what it was then.

    If there is another credible explanation of the jobs/growth imbalance no doubt some “expert2 will find it in due course.

    The good part of this is that it thus means we could be not just out of recession but into fast growth if ending the windmill subsidy on electric prices and allowing the development of shale gas and nuclear, as UKIP have called for, were to be allowed by our Luddite politicians. I do not think it can be credibly denied that we would be out of recession very quickly if we had a government with UKIP’s policies.

  15. Atlas
    Posted July 21, 2012 at 10:38 am | Permalink

    Quote: “I think I trust the employment figures a bit more.”

    Hmm, not sure about that. In our household nobody is now working, but it does not show up on your statistics since lack of eligibility on one hand and timed-out JSA on the other, have meant no reason to have contact with the DWP. (And I can assure you the DWP is not an organisation you want to have contact with)

    So possibly the statistics you cite are not showing a pool of ‘missing’ labour??

    • uanime5
      Posted July 21, 2012 at 9:55 pm | Permalink

      If the population of the UK is 63.1 million, 29.17 million are in employment, 5.8 million are over 65 , and 9.27 million people are economically inactive (not working and not looking for work) then the remainder (18.86 million) must be unemployed, in education, or under 16.

      So either the UK has 16.3 million people under the age of 16, or over 16 and in further education; or unemployment is much higher than 2.56 million.

      http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/april-2012/statistical-bulletin.html#tab-Employment-by-country-of-birth-and-nationality–not-seasonally-adjusted-

      • waramess
        Posted July 22, 2012 at 10:11 am | Permalink

        How about mums at home? Presumably they do not get counted n the statistics

        • uanime5
          Posted July 22, 2012 at 6:23 pm | Permalink

          They’re economically inactive because they’re not looking for work.

      • David John Wilson
        Posted July 22, 2012 at 12:22 pm | Permalink

        The figure of 16. 3 million either under 16 or in full time education is not unreasonable. With 57.3 million under the age of 65 that means there are approaching a million in each of the younger age groups. So we have say 15 million under 16 and another 1.3 million over 16 in full time education.

        • uanime5
          Posted July 22, 2012 at 6:28 pm | Permalink

          As there are 10.85 million people aged 0-14 I’d say it’s unlikely that 15 million are aged 0-16. 12.4 million is more reasonable but this would require 3.6 million people to be in full time education.

  16. eddyh
    Posted July 21, 2012 at 11:53 am | Permalink

    You find the fact that the increase in the rate of public spending is slowing to be good news! What would be good news would be a substantial decrease in public spending. Not that we are likely to see this with our LibLabCon government.

  17. zorro
    Posted July 21, 2012 at 1:11 pm | Permalink

    Louise Casey – ‘It’s time for the state to intervene….’…..It’s not actually, it’s time for the state to get the hell out of it and stop paying people benefits to have children. Don’t pay them or give them accommodation and they won’t have them. All the state has done is subsidise and encourage fecklessness.

    zorro

    • Bazman
      Posted July 21, 2012 at 1:48 pm | Permalink

      Not only they have to be poor they cannot have children or even SKY tv?

      • JimF
        Posted July 21, 2012 at 6:17 pm | Permalink

        Not on the backs of workers who can’t afford kids or sky tv, but still pay taxes. NO.

    • David John Wilson
      Posted July 22, 2012 at 12:29 pm | Permalink

      There should be a move to reduce benefits paid directly by paying for things like council tax, giving food vouchers and subsidising utility bills. This would make it less likely that money would be wasted on things like SkyTV.

      • Bazman
        Posted July 25, 2012 at 1:20 pm | Permalink

        As a punishment for being on benefits by any chance?

  18. David Langley
    Posted July 21, 2012 at 2:48 pm | Permalink

    Good old EU, strangling jobs and growth and of course our Ponzi scheme pension funding is sucking in more liabilities all the time. Its not good news borrowing by the government to run the country. We are going down a road that has a bad ending. People need to be able to enjoy the fruits of their labours, we must get off business,s back. Fair laws fewer laws and better enforcement, the trouble is people are losing hope that England can get out of the mess we are in with the current incompetent crowd at the helm telling us lies every step of the way. I have just returned from 2 weeks in Switzerland, now theres a way to run a country.

  19. zorro
    Posted July 21, 2012 at 4:03 pm | Permalink

    John,
    Off topic, but this is very topical and worthy of some consideration for how our liberties can be affected by these events.

    I see that we have another public massacre event taking place in the USA just before the UN is voting on a global small arms treaty…..Ostensibly a young man (usually nerdy looking) seems to have gained access to a vast array of weapons and explosives and hijacked a cinema walking through alarmed doors and shooting people indiscriminately before peacefully surrendering to police officers, and then calmly telling them that there are some explosives hooked up at his flat………

    Apparently, this man was an unemployed PHD student of neuro-science who decided to dress as the ‘Joker’ and commit a massacre of people watching ‘The Dark Knight’…..There is a lot of potential symbolism there.

    According to news reports, this sudden violent rampage was completely out of character for James Holmes, who was described as “shy.”

    According to news reports, this sudden violent rampage was completely out of character for James Holmes, who was described as “shy.”

    http://www.nytimes.com/2012/07/21/us/colorado-mall-shooting.html?pagewanted=2

    Apparently, this violent attack was completely out of character for this ‘shy’ person….

    Does his calm surrender to the police suggest a violent, out of control maniac, or someone who might be under some sort of control?

    Who supplied this unemployed this unemployed ‘neuro-science’ student with an expensive array of explosives, ammunition and assault rifles…..?

    If the flat was so extensively booby trapped that the police thought it would take days to unravel….how did this unemployed ‘neuro-science’ student manage to do that….? What type of knowledge would it take to do that?

    Cui bono?

    Who has previously admitted supplying explosives and arms and hatching terrorist plots….?

    Who undertook Operation ‘Fast and Furious’ and supplied massive amounts of arms near the Mexican border and just let it happen?

    Many questions I know but this type of thing is happening too often to be coincidental?

    zorro

  20. uanime5
    Posted July 21, 2012 at 9:18 pm | Permalink

    Given that the highest rate of tax only applied to 1% of the population it’s more likely that lower levels of employment, salaries, and working hours for the other 99% is the cause of the lower levels of income tax.

    It seems the Government’s plan to send NHS patients to private hospitals has run into a problem. BMI has decided to delay the treatment of NHS patients by up to 8 weeks to “encourage” them to go private which will result in BMI being able to charge a higher fee. John as you were a supporter of Lansley’s reform for the NHS can you tell us if this is how it was mean to work? If not what is the Government going to do about BMI abusing its NHS patients?

    http://www.telegraph.co.uk/health/healthnews/9417767/Private-healthcare-firm-censured-over-deliberate-delays-for-NHS-patients.html

    • David John Wilson
      Posted July 22, 2012 at 12:42 pm | Permalink

      It is also likely with the presure to reduce bonuses and the higher 50% rate that more people are finding ways of receiving their income in a manner that avoids the 50% tax rate. A simple example will be those who are delaying that income until the tax rate reduces to 45%. However more and more people are also being pushed towards the well publicised tax avoidance schemes.

      I know of a number of people who would be paying 50% tax who are maximising the amount that they are putting into their pension pots this year and delaying expenditure till next year when they can use income taxed at a lower rate. You will find the building trade picking up next year when the tax rate reduces.

  21. Lindsay McDougall
    Posted July 27, 2012 at 6:13 pm | Permalink

    If you’re spending too much, spend less. Seemple! Capital expenditute has suffered more than its fair share, so let’s stop everything else rising – automatically to make it easy. So keep state pensions, state and local government pay, state benefits and foreign aid constant in cash terms and let inflation do its work. And if a few treaties and union agreements get in the way then repeal them, renounce them and burn them publicly.

    Too much reduction in demand? Then have £1 of tax reductions for every £2 of public expenditure “cuts”. Seriously, why is this considered difficult?

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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