The UK needs a wage rise

This is a potentially  popular campaign  which need not be the monopoly of the Unions. The main aim of Conservative policy is to encourage and foster an economic recovery which will raise real wages and living standards for the many. I am all in favour of people getting on in the world, being promoted, getting pay awards for their performance and for the value of the work they bring to the company or institution.  I have no wish to live in a low wage country.

The latest average earnings figures still show average earnings rising a little slower than inflation. This is six years after a major cut in living standards in the Great recession under the last government. However, within that average there are a lot more lower paid jobs which are better than being out of work which drive down the average. There are also  more opportunities for advancement thanks to the general growth in the economy. The best way into a better paid job is to have a less well paid job and work your way up. It is more difficult if you have been out of work for a long time. Being in work gives you better access to training and opportunity. The way to command a higher rate of pay is to bring more skill and value to your employer or customers.

The September ASDA income tracker shows an extra £6 a week average discretionary income compared to a year ago. At least the figures are rising, not falling. Wages in manufacturing and construction are now picking up.

Labour says the answer is a higher Minimum wage. They have promised one around the likely levels to be set by the independent quango that fixes these things. The rising Minimum wage does not flow through pound for pound to the earner, because Minimum wages for most people are topped up by income related benefits. What matters more is the minimum income, which is a combination of minimum wage and income top up from the state. The level of the Minimum wage does not look like much of a differentiator between the three main Westminster parties.

There are two important elements to a strategy to give the UK a pay rise that Labour do not mention so much. The first is getting proper  control of our borders, so more of the jobs go to UK citizens, and so there is less downward pressure on wages from many new migrants. The second is government policies which support rising productivity. In the end we can only have higher real wages if we work smarter and better, so that our output is more highly valued. The government’s work on apprenticeships, training and improved educational standards is a vital part of getting the UK a pay rise.

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107 Comments

  1. Mark B
    Posted October 23, 2014 at 5:32 am | Permalink

    Good morning.

    One man’s pay rise, is another man’s price increase.

    The best way into a better paid job is to have a less well paid job and work your way up.

    Which is what I did when young. And it is what a lot of immigrants are doing now. Problem is, when these well educated, skilled immigrants take the less well paid jobs, that leaves those trying to get on the ladder at the bottom. Successive governments’ of all hues have condemned a hole generation or more to a lifetime of unemployment and poverty.

    Shame on you all !

    • Lifelogic
      Posted October 23, 2014 at 8:06 am | Permalink

      Stop paying healthy people capable of work to encourage them not to work. Just make benefit dependent on them doing some constructive work or training.

    • Margaret Brandreth-J
      Posted October 23, 2014 at 8:10 pm | Permalink

      In full agreement Mark. They havn’t liked climbers and educational and skills enhancement.They cost too much and of course there is always someone who can do the job cheaper ( or thinks they can).This being the case they put us down so they can get cheap labour for better skills and prevent those just starting even getting on to the ladder. The older ones cannot give up their jobs due to financial commitments and many still have to look after their well educated children (who cannot get a job )at home.

    • Horace
      Posted October 23, 2014 at 8:28 pm | Permalink

      Well one pseudoprofession funded by us got a 10% pay rise this year…..

    • bigneil
      Posted October 23, 2014 at 10:23 pm | Permalink

      What about all the unskilled and uneducated immigrants that purely want to come here and claim the whole raft of “entitlements” that give them a free life – everything supplied by the taxpayer – house, benefit money, NHS care and schooling. There are now that many needing keeping, the govt is having to cut the police numbers. The end result is obvious -witness the behaviour of those at Calais -they do not give a damn about the laws or what damage they do, or the cost they put onto the lorry drivers or their firms. All they care about is getting to the land of the bottomless pit of benefits, for doing nothing – unsustainable -lets fling the gates open to (more? ed) freeloaders and finish the country quickly -it would be far less painful.

    • Bazman
      Posted October 26, 2014 at 2:33 pm | Permalink

      One mans low pay is a another mans tax burden by having to subsise this low pay and lax labour laws allow a stream of desperate people to be exploited with no hope of climbing you imaginary ladder.
      You need to explain how desperation creates jobs and produces wealth?

  2. Leslie Singleton
    Posted October 23, 2014 at 5:51 am | Permalink

    A rise I would like is in interest rates so that my (retirement) savings earn something. A lot of the Business and Economics pages are baloney on the subject. I especially deride the stuff about keeping rates low (translation: zero and for five solid years yet) “because there are no inflationary pressures at present” as if inflationary pressures (and more especially the lack thereof) were the be all and end all. Rates need to go up because rates need to go up. I have no feel for the figures but wouldn’t that boost the tax revenues that the Chancellor has mislaid not to mention increase spending which economists say they like?

    • Lifelogic
      Posted October 23, 2014 at 8:19 am | Permalink

      You have to cut out the middle man banks, who take deposits at say 0.5% and lend it out at 10% often to more credit worthy people than the bank.

    • British Nationalist
      Posted October 23, 2014 at 12:01 pm | Permalink

      There is massive inflation at the moment. Just look at the soaring house prices. Inflation reporting is being fiddled something horrible. For example when people are feeling the pinch they go to the theatre less so ticket prices fall to lure them in and the BoE reports this as “low inflation” – technically correct, but useless for all practical purposes. The price of essentials is being ignored while ephemera are counted.

      • Leslie Singleton
        Posted October 23, 2014 at 4:37 pm | Permalink

        Dear Nationalist–Couldn’t agree more about how come the undeniable and high house price inflation is blithely somehow not deemed to be inflation. Keeping house prices constant would be a good public policy goal all on its own but fat chance.

  3. Brian Taylor
    Posted October 23, 2014 at 6:00 am | Permalink

    If we keep taking more people out of tax by raising the starting rates etc. which is a good thing, then you must make sure you keep on top of Government spending and Waste as you will be collecting less Tax.
    So cut Spending!!!

    • petermartin2001
      Posted October 23, 2014 at 8:44 pm | Permalink

      So cut Spending!

      And then what happens to taxes?

      Government as the single currency issuer is also the single tax collector. So when government issues money for any purpose it is aware, or should be aware, that all the money that it pays out in wages as salaries is subject to the normal rates of income tax and NI contributions. Some 35%, or so, of top line spending then comes straight back to government. The remainder is spent and respent in the economy and is subject to the government’s very efficient taxation net on every transaction: 20% VAT, Fuel and Excise duties, yet more income tax and NI contributions on every subsequent transaction. It nearly all goes back to government very quickly to be destroyed!

      So government spending generates its own taxation revenue. Cut spending and you’ll cut revenue too as Governments always wish to prove the hard way!

      That’s not to say governments can spend without limit. If they try to do too much they will call upon resources which aren’t readily available and create too much inflation.

      Money can only be reprieved temporarily from its inevitable fate if it is saved. And if it’s saved it’s dormant. It’s not quite dead as it would be if it had been collected by government in taxation revenue, but its effectively dead for the duration that it is saved and so cannot contribute to inflation.

      The only indicator govts need worry about is inflation.If that’s getting too high they know they are spending too much and need to back off a bit. On the other hand if it’s too low and the government is worried about deflation and recession then they know they need to do the opposite. That’s obviously the problem in the EZ right now and there’s an easy fix.

      In other words Governments need to set an inflation target of something like 2-3% and stick to it by adjusting their spending and taxation levels.

  4. Mick Anderson
    Posted October 23, 2014 at 6:03 am | Permalink

    There is one very simple way that the Government can improve take-home pay, and that is to reduce taxes. They represent the largest expense for the vast majority of productive people in this country, so can have the greatest effect.

    Sack “Nanny”, remove all the politically-inspired subsidies, stop spending money on vanity projects, stop paying people to do non-jobs (or no job at all), pay off the debt, and reduce taxation to 25% of GDP. The political classes will complain that it can’t be done, but there are a lot of “ordinary” people out there who can show them how – Mr Osborne can start learning how by reading this blog! They know about a “Great Repeal Bill” and the “Bonfire of Quangos”; to borrow a strap line, just do it.

    We need something different from those in Power, and that does not mean even more of the same largesse. Less means more, quite literally. The first Party to break ranks and actually do this will also notice that people start voting for them.

    • Hope
      Posted October 23, 2014 at 1:08 pm | Permalink

      Cameron never intended of getting rid of quangos. To do so would stop EU regulation and directives entering and controlling our lives by the back door. A lot these are led by former politicians, job for the boys so to speak. The cost of the quangos could be added to the total bill of contributing to the EU.

      • Lifelogic
        Posted October 23, 2014 at 4:00 pm | Permalink

        Indeed. They are simply unable to cut anything except liquor chocolates (I think) them Cameron introduce absurd gender neutral insurance and annuities. Perhaps several million times more damaging than the chocolate restriction was.

        They are just bonkers, bonkers, bonkers!

    • Sandra Cox
      Posted October 23, 2014 at 1:25 pm | Permalink

      No chance of any of the three breaking rank – they’re all too busy beaking up England, and turning our country’s electoral process into something that would shame a banana republic!

      Off topic, but important issues, nevertheless:

      1) “The prime minister has welcomed an ambitious proposal to devolve power to UK city regions along the same brisk timetable as the Scottish devolution process”.

      So the Conservative Party is getting on with the EU’s dirty, sly work – the EU has already omitted England from the EU map, now they’re getting on with wiping England off the face of the earth.

      We need one voice – if England is to be Balkanised, then it must be agreed by the English in a referendum – after all the Scots have had two, the Northern Irish have had one, as have the Welsh, with another on the horizon!

      We cannot leave England at the mercy of the EU’s useful idiots in our parliaments!!

      2) Also in the Independent: “The body which oversees elections is ‘not fit for purpose’, and the list of voters to be used at next May’s general election will contain at least 13m errors, a think tank has warned.”

      I realise that a wage increase is an important topic, and that John continues to do a great job on behalf of England, but I really am extremely concerned that while we are distracted, our basic rights are being spirited away!

  5. Richard1
    Posted October 23, 2014 at 6:16 am | Permalink

    We should acknowledge the great improvement in services such as building which immigration from Eastern Europe has made – which is a significant economic positive. In the event the Conservatives form the next govt and there is to be a renegotiation let’s make sure we don’t go down the (labour-protectionist) road of villifying immigration or discouraging the vast majority of immigrants who make a positive contribution from staying. The current UKIP general anti-immigration line is not in the best interest of the UK, the Conservatives should differentiate from it. We don’t want criminals terrorists or welfare scroungers. But people who want to work hard for a living should be welcome.

    • Bob
      Posted October 23, 2014 at 9:17 am | Permalink

      @Richard

      ” The current UKIP general anti-immigration line is not in the best interest of the UK”

      Please read ukip’s policies on the matter before make any more sweeping statements.

      It’s on their website “Policies for People” document under the heading “Controlling and managing our borders”

    • Denis Cooper
      Posted October 23, 2014 at 9:39 am | Permalink

      I completely agree that the Tories should stick to what they actually believe in, which is making sure that there are unlimited supplies of cheap and biddable foreign labour for the benefit of their donors and major supporters, with the taxpayer picking up the bill for the Britons who find themselves unemployed or on greatly depressed wages as a result, and also for the provision of expanded public services and infrastructure and part-subsidised housing stock to cope with the concomitant increases in population, and so clearly differentiate themselves from UKIP’s policy of limited, controlled and selective immigration.

      The more clear purple water there is between the two parties the better; that way the people of this country would be offered a real democratic choice between two opposing policies without one of the parties constantly trying to fool them over its true policies and intentions.

      Reply You have a very old fashioned view of Tory donors! The party does not get money from the large multinationals or from companies employing cheap labour. It gets donations from rich individuals running companies with a few highly paid people.

      • Denis Cooper
        Posted October 23, 2014 at 11:57 am | Permalink

        I note in passing that you don’t dispute my contention that those leading the Tory party are insincere about immigration and really want “unlimited supplies of cheap and biddable foreign labour”, with the inevitable costs of that unpatriotic and anti-democratic policy being borne by the taxpayer.

        Which is not a new policy even in modern times; leave aside the Irish, it goes back to the 1950’s with the uncontrolled immigration from the Commonwealth, which was mass immigration by the standards of the time even though it was much smaller than we have seen more recently; and, as I mentioned the other day, in 1975 when she was voicing her objections to the use of referendums Margaret Thatcher was content with the inclusion of “immigration would have been stopped” as one item on the list of reasons why they were such a bad idea.

        It’s really a matter of what they feel they can get away with; at some point a policy of mass immigration starts to arouse sufficient opposition among the established body of citizens for it to become a serious vote loser for any party which continues to openly support it, and then a temporary shift of public stance may be required; but it is only a shift in the party’s public stance and it is only temporary, it is not a sincere matter of principle.

        I would point out that if Cameron had been genuinely concerned about the quantity and/or quality of immigration into the UK from some of the other EU countries then he could have said straight out that he would not agree to any further enlargement of the EU unless it was accompanied by EU treaty change to restore full control to the UK Parliament and government, and there would have been nothing that Clegg could have done to stop him taking that position. Instead he went ahead and allowed Croatia to join, and Hague used fine print in his so-called “referendum lock” law to stop the British people having any direct say on that, and he is still going ahead with plans for a clutch of other countries to join the EU.

        Reply I allow you and others regularly to attack Conservatives and the government in the interests of debate and free speech. I do not have time to write back to every criticism or untruth. It does not mean I agree with what you are saying!

        • Max Dunbar
          Posted October 23, 2014 at 3:35 pm | Permalink

          Can’t disagree with most of what you say Denis.
          Dr Redwood has, in the past, stated that he has more influence on government policy by remaining within the Tory Party but this assertion has been seen to be inaccurate in the light of recent shifts in opinion in favour of UKIP, a party that had until recently not had a single MP in the house of Commons.
          This really goes to show that although Dr Redwood is ‘in government’ he is unable, as a one-man band within his Party, to move the government in his direction whilst UKIP has, in fact, forced the changes so desperately needed in matters of immigration control.

          Reply Not so. The changes to policy – renegotiation, referendum, tough stance on future border arrangements – have come about in the Commons from Conservative MPs

        • Tad Davison
          Posted October 23, 2014 at 4:28 pm | Permalink

          Reply to reply:

          Personally, although I do sincerely appreciate having the opportunity to comment on your blog, Denis has got a valid and powerful point.

          We wouldn’t be in a position to criticise the Tories at all if they hadn’t made such a mess of things. I am convinced they are for immigration for the reasons Denis has given, and it was only when Cameron realised the current ineffectual Tory policy on immigration was a vote loser, did he decide to acknowledge it (although acknowledging the problem, and doing something about it to the public’s satisfaction are two distinctly different things).

          And that’s the bit that gets my feathers ruffled, the fact the Tories have paid lip-service to many things in a very devious and underhanded way, to make people believe they are on their side, but thereafter, procrastinate and prevaricate. I vividly recall the ‘Are you thinking what we are thinking’ slogan, and I curse their dishonesty and duplicity. That should be the hallmark of the Labour Party and the Lib Dems, not the Tories, so they only have themselves to blame.

          As Denis rightly says, this could have been sorted long ago, but it wasn’t, and Cameron is depending on people’s ignorance and his own public image before the television cameras to see him through. But it won’t wash!

          Tad

          Reply Mr Cameron and the Conservative party has always supported controlled immigration at much lower levels than the present ones. When in office as a majority government from memory migration ran at about one fifth of the level Labour increased it to. On taking office Mr Cameron has been keen to honour his pledge to cut it substantially, and has made progress with non EU migration. He has found the EU rules and Lib Dem unwillingness to challenge the EU have so far prevented him from controlling EU migration. He is now about to make further proposals of what a majority Conservative government would do to correct that.

        • acorn
          Posted October 23, 2014 at 6:34 pm | Permalink

          Denis, I sense some realism washing over you. Modern Conservatism isn’t what you thought it was. It’s all about the money now. Being an MP is not about democracy and the great unwashed, which Conservatives hate by definition. It’s about the hegemony of the political / corporate elite. It’s about laying the foundations for a lucrative, post Westminster, career. Having delivered your sponsors desires in the form of legislative, profit enhancing goodies, statute wise.

          Not bad for three glasses of wine and a lot of noise behind me, aye?

      • Richard1
        Posted October 23, 2014 at 4:58 pm | Permalink

        What a silly post by Dennis cooper. Its not about unlimited supplies of cheap bidable foreign labour, nor is immigration having the effect of throwing lots of UK citizens out of work. Look at the unemployment stats. London, eg, is an incomparably better city to live in than it was 30 years ago. Foreign workers and immigrants have played a large part in this.

        • Denis Cooper
          Posted October 24, 2014 at 10:27 am | Permalink

          Well, perhaps “effectively unlimited supplies” would be more exact; once the reserve stock of Eastern Europeans has been depleted, there are still some supplies in the Balkans waiting to be tapped, and then Ukraine and the rest of the Caucasus. But of course the big prize is Turkey; and thanks to Section 4(4)(c) of Hague’s European Union Act 2011, his so-called “referendum lock” law, the British people would no more be asked if they agreed with Turkey being allowed into the EU than they were asked that about Croatia.

        • Narrow shoulders
          Posted October 24, 2014 at 11:23 am | Permalink

          What a silly post by Richard1

          Of course it is about cheap labour for business and other establishment cronies.

          London is not somewhere most outside of the benefits system or exremely wealthy can afford to live. Visits are ridiculously pricey too. Much of the cost is down to unfettered immigration.

          I would also dispute it is a better city than 30 years ago (a time when it still was occupied by many foreign cultures). But I am a luddite traditionalist who knows incremental life improvements are more productive than leaps.

        • Max Dunbar
          Posted October 24, 2014 at 12:43 pm | Permalink

          Having immigrants going round begging at restaurant outdoor tables does not strike me as ‘making London an incomparably better city to live in’.
          This on an infrequent visit to London at a restaurant off Bond Street a week ago.

          • Max Dunbar
            Posted October 24, 2014 at 12:48 pm | Permalink

            ‘Making London’ should not have been hyphenated. Apologies.

    • Lifelogic
      Posted October 23, 2014 at 4:04 pm | Permalink

      They do not have a “general anti-immigration line” just more sensible selective immigration on a points system.

    • Martyn G
      Posted October 23, 2014 at 5:18 pm | Permalink

      I fear that it is not all beer and skittles as you suggest. Over the past 3 months I have been traveling a lot and staying in hotels. Without exception – and I mean without exception – all were staffed at the front and support desks by what I think were eastern EU citizens.
      Service etc all fine but since most of them (say 50%?) are on low wages and therefore entitled to social support (e.g. housing allowance) they are actually costing the taxpayer money to support them in work. Add to that the fact that this removes employment opportunities for our people and we get a double whammy on the taxpayer who has to fund our own unemployed AND the foreigners employed in their place.

  6. Matt
    Posted October 23, 2014 at 6:20 am | Permalink

    Well said JR.
    Is there not also a cultural issue. Have people not started to think of money as something they are entitled to rather than something they have to earn? Should we not be doing more to restore the link between work productivity and total income?
    There are so many factors in this but 2 stand out to me.
    1. Public sector workers, such as myself, find that productivity is uncorrelated with promotion and pay within the organisation. It doesn’t help that the distinction between progress and activity has been all but lost.
    2. Low paid people don’t see a significant increase in their income when they take on extra work or even achieve promotion. I suppose the universal credit should at least partly address this. We shall have to see.

  7. Cheshire Girl
    Posted October 23, 2014 at 6:25 am | Permalink

    On the subject of wage rises, I’m sure you know that there was great resentment in this. Country when it was announced that MPs would get an eleven per cent wage rise.
    It was said that they could not do anything about it, as it was set by an independant body. You will appreciate I’m sure that many could not understand this when the general public are lectured daily on the need for pay restraint. Politicians really should practice what they preach. After all, we are ‘all in this together’ !

    Reply The public strongly supported the idea of independent people deciding MPs pay. They have rightly kept MPs pay under tight constraints this Parliament as part of controlling public sector costs. Conservatives also wished to raise MP productivity by cutting the number of MPs, but the other parties did not agree. IPSA have said they intend to pay a rise to the next Parliament. It will be for that Parliament to decide whether to abolish the independent body and have smaller rise.

    • Brian Tomkinson
      Posted October 23, 2014 at 8:10 am | Permalink

      Reply to reply,
      If you MPs take an 11% increase you must see what a bad example that sets. Please don’t use the excuse that your pay has been under tight restraint as part of controlling public sector costs as that applies to millions of others. Are you deliberately trying to stoke up wage led inflation? You remember the 1970s and 80s don’t you? Have you thrown in the towel of even attempting deficit reduction and decided that the debt can only be dealt with by inflation? It’s beginning to sound like it.

    • Julie Innis
      Posted October 23, 2014 at 8:43 am | Permalink

      Reply to reply:
      Sorry John, but that doesn’t wash with the public. It should have been put to a vote this parliament and let the public see this side of the election which parties dare to vote in favour of it. They should have no rise, not even a small one and set an example to all those whose income has been frozen for years and I’m not talking about the public sector. I’m talking about pensioners like my neighbour who has worked and done the right thing all his life, saw his private pension hammered when he retired three years ago thanks to the incompetence of the politicians and the banks, took a non-index linked pension to get the best of a bad deal and then to add insult to injury, Osborne’s 2012 budget has seen his personal allowance frozen ever since which means his tax take is going up, not down. Every time he gets a small rise in his state pension, Osborne takes it back in income tax. He and his wife have a total income of £14,500 but are still paying income tax and £2,500 council tax. His lump sum which is earning zero interest is quickly depleting in order to pay this punitive tax yet it seems if he hadn’t bothered to put by for his future, he would be much better off than he is now. Higher income, no income tax and no council tax all courtesy of HM Government. To see politicians now accepting an 11% increase, or any increase, on top of their already over generous package is an insult to every pensioner in the land and aren’t the grey vote the one section of the public who do come out to vote?

      Reply I understand the hostility to the pay rise. I am trying to explain to you the position in Parliament. 1. This Parliament and its MPs will not get this pay rise. 2. The independent body which Parliament set up to avoid having any control or votes on MPs pay may well simply go ahead and award this to MPs in the new Parliament. It has also said it will not allow MPs to request that they be paid less. That means the only way such a rise could be stopped is if the new Parliament decided to abolish the body and return to setting our own pay. There is no majority to repeal IPSA this Parliament as no party wishes to do so, and I would be surprised if there is a majority to abolish it next Parliament.

      • Know Dice
        Posted October 23, 2014 at 10:48 am | Permalink

        Reply to Reply to Reply…

        I think we understand your position on this i.e that the pay rise has been recommended by an “independent” body – Just like the nurses… 🙁

        But, if you don’t want to be hit by this on every doorstep in the run up to May, Parliament MUST vote on this now.

        It’s not going away any time soon. You and your colleagues need to be seen to reject this even if it takes a “three line whip” to achieve it.

        Reply None of the party leaderships wish this to be debated, and there is no proposal on the table to abolish IPSA. It would require repeal of the legislation setting up the independent body so it would require government initiative and opposition support to do it at this late stage of the Parliament.

    • Bob
      Posted October 23, 2014 at 9:20 am | Permalink

      @Cheshire Girl
      The MP’s pay rise could be made conditional on eliminating the deficit first.

      • William Gruff
        Posted October 23, 2014 at 1:47 pm | Permalink

        MPs’ pay, and payment of their expenses, should be decided individually, by an MP’s constituents, as one of a number of measures making him accountable to them rather than his party or any other body, organisation or individual. An emolument could be paid by the country to those serving the country in cabinet positions. Those serving their constituents should be paid by their constituents and prohibited from serving themselves through ‘directorships’, ‘consultancy’ and other forms of backhander from private interests. The tax-payer funded gravy train needs to be uncoupled from the engine of public office and shunted onto a disused line.

      • Lifelogic
        Posted October 23, 2014 at 1:50 pm | Permalink

        The state sector is already overpaid by some 50% when pension are included relative the the private sector. The proposed MPs’ pay rise is hugely damaging to addressing this. It sets a very poor example. MPs already have perhaps the best pension going and tax free “expenses” that do not apply to other workers.

        They are also hugely culpable in the huge waste, misdirection of resources and the incompetence endlessly exhibited by government.

        Dealing with the deficit rather than lying about “reducing the debt” would be a good start for MPs to prove their worth.

        NHS staff too are already well paid relative to the private sector, contrary to what it seem the NHS management seem to think in their PR event today. Are these people suitable to run the NHS if they do not know this? One said they might have to start restricting services if they do not get their £billions.

        But they ration and delay services endlessly already as he must surely know.

        Reply The main expenses MPs are claim are staff salaries which are paid directly by the employers of senior staff in most other organisations and not attributed to the senior exec!

        • Lifelogic
          Posted October 23, 2014 at 4:08 pm | Permalink

          To Reply:

          But often paid to their relatives anyway. Also travel expenses to and from Westminster which would not normally be tax allowable for private sector workers.

          Reply: Individuals working in a company with more than one office do have allowable travel expenses to offices other than their main one. MPs have two offices – one in constituency and one at Westminster.

          • Narrow shoulders
            Posted October 24, 2014 at 5:02 pm | Permalink

            Reply to reply

            But for more than two years so not allowed to private sector employees as there is a time limit on non parliamentarians claiming for a dual workplaces.

            HMRC has also recently revised its views of homeworkers citing that they mainly work from home for convenience. With the advent of email and skype should MPs’ expenses of travelling from home to parliament not become a taxable benefit?

            The taxman takes everything he can from us. We are all in this together aren’t we?

      • A different Simon
        Posted October 23, 2014 at 10:25 pm | Permalink

        MP’s employment contracts should be exclusive .

        No directorships or consultancies whilst they are supposed to be saving our country .

        Pay them a reasonable amount but the job contract must be exclusive .

    • APL
      Posted October 23, 2014 at 9:20 pm | Permalink

      JR: “They have rightly kept MPs pay under tight constraints this Parliament”

      No they haven’t. This Parliament they have just awarded MPs an inflation busting pay rise, its just been deferred until the next parliament. That way, you have plausible deny-ability. It’s not our fault, the last lot made us do it.

      JR: “as part of controlling public sector costs.”

      Another failure too.

      JR: “None of the party leaderships wish this to be debated, and there is no proposal on the table to abolish IPSA.”

      And another failure to control public sector costs.

      Reply The proposed pay rise comes from an independent body. There has been no such pay rise this Parliament, and this Parliament has most certainly not voted for a pay rise for the next Parliament.
      You do need to look at the dilemma MPs face. It was a very popular move to put MPs pay beyond our reach under an independent body. Now that independent body proposes a future pay rise the only way to stop it is to abolish that body and go back to MPs settling their own pay. The party leaderships – and therefore a majority of this Commons – have decided to carry on with the independent body.

      • Narrow shoulders
        Posted October 24, 2014 at 5:08 pm | Permalink

        Reply to reply

        The independent body could have been instructed to limit and awards to a percentage plus or minus inflation. The body could also have been instructed that it was deemed that since applicants exceeded vacancies the current going rate was sufficient as a baseline. Unless there is a dearth of quality at present.

        I quite like the suggestion higher up that constituents should set pay, within a banding system. That may incentivise the system to sort out postal vote irregularities too.

  8. Lifelogic
    Posted October 23, 2014 at 6:34 am | Permalink

    UK productivity in Britain is 29% lower than in US and 24% lower than in Germany and France. It is getting worse not better. The best thing the government can do is reduce employment & other regulations, have easy hire and fire, reduce taxes, reduce the size of the huge state sector over head, encourage capital investment, simplify taxes, get rid of the minimum wage, get cheap non religious energy, relax planning, and allow the building more houses and commercial building. Also to encourage R&D, training and investment.

    In short more people doing real things and far fewer bureaucrats pushing paper, tax planning, suing each overs or harassing and inconveniencing business managers and owners.

    I would encourage far more to study science, engineering, physics, medicine, building and far fewer to study PPE, law, divinity, English, history. Latin, Greek, History of Art and other hobby subjects. If they want to do these let them largely pay for it themselves or do it in their spare time & without soft loans.

    Also stop low skilled immigration and abolish IHT which pushes may excellent people out of the country.

    Reply Unit labour costs have improved almost 5% relative to Germany over the last year.

    • Lifelogic
      Posted October 23, 2014 at 6:36 am | Permalink

      The main drain on productivity is the dead weight overhead and huge inconvenience caused to industry by the state sector.

    • Lifelogic
      Posted October 23, 2014 at 8:11 am | Permalink

      To reply: Good but much further to go. Alas Miliband will doubtless kill it all dead after May.

      Unless Cameron can finally gets his act together.

    • Bob
      Posted October 23, 2014 at 9:26 am | Permalink

      @lifelogic
      If the Tories abolished IHT they may be accused of stealing ukip policies.
      I notice that the Tories are now talking about getting immigration under control and getting tough on criminals who get in through our porous borders.

      I guess this kind of talk will continue up until the general election.

    • stred
      Posted October 23, 2014 at 11:31 am | Permalink

      The number of lawyers has doubled as legislation has reversed caveat emptor and the claims culture increases and forms a bigger part of the economy. I had a long chat with a young structural engineer last night and he told me that his salary, in real terms, is about two thirds of what I earned as an architect before I realised I was not doing my job any more and retired. He is extremely good at his job and had a high degree in maths and physics before taking up engineering.

      He spends much of his time rewriting letters to contractors and clients in order to protect his firm from claims. He has to discuss matters with the partner, who has gained experience in avoiding any words which may lay them open to a claim. At the same time contractors expect the consultants specify absolutely everything right down to nail sizes and spacing. Contractors will not commit themselves to any matter which used to be within a builder’s expertise. If they did, then they might be found liable for any failing.

      How can pay improve when everyone is looking over their shoulder and taking twice as long to use their expertise, while a host of lawyers such money out of the economy money by allocating blame.

      His firm of engineers think the only people who they can trust are the architects, who also suffer from the same problems. When I started work, I used to earn the same salary as friends who were lawyers and doctors. Today we earn a third if lucky. I did all the design and detailing for housing estates, right down to planning, regulations, simple structural, highway and drainage design. Today, the big housebuilders obtain the approvals and this requires a team of nine specialists using computer programmes. In the offices of the local authorities, heritage quangos and even the police act as their opposite number and are employed to object and control, while regulations become more onerous every year.

  9. alan jutson
    Posted October 23, 2014 at 6:55 am | Permalink

    The easiest way to give people more disposable income, is to tax them less.

    The government has proven that it gets poor value for OUR money, when it spends it on OUR behalf.

    Far, far better if we could reduce Government spending, and let people keep rather more of the money they earned, instead we have some politicians who still want to tax everything in sight, even suggesting that if you cannot pay due to a low income/pension, then they will set that annual debt against the value of your only home (Mansion Tax), to claim it when eventually you have to sell it, or die.

    • Bob
      Posted October 23, 2014 at 9:30 am | Permalink

      @Alan J

      “they will set that annual debt against the value of your only home (Mansion Tax), to claim it when eventually you have to sell it, or die.”

      How else can they afford HS2 and £12 billion a year in foreign aid?

    • stred
      Posted October 23, 2014 at 11:44 am | Permalink

      Yet another tax has appeared. An email from my LA council tax department confirms that the house I own, which was wrecked by tenants and has taken a long time to refurbish is liable. It is part furnished as I have nowhere to store it but the house is not habitable yet. I applied to be exempt from Council Tax but was refused. I applied to pay a reduced rate as a single occupier. They refused this as I was not living there, or using any council services. So they will only allow a 10% reduction and are backdating the bills to 4th april when the new act came in. Thanks Osbo.

      • Max Dunbar
        Posted October 23, 2014 at 4:22 pm | Permalink

        Anyone who owns, or is planning to buy, domestic property as an investment and for income needs to approach this business with their eyes open. Many people have had their fingers burnt financially, not to mention the toll taken in worry and harassment from horrible tenants and implacably hostile local authorities.
        The problem is that ownership of private property for gain in a semi-communist country run at council level, in many cases, by quasi-communist local authorities is regarded as theft, and the state intends to punish and deter using the full force of the law.
        Property investors beware. Landlords bad – tenants victims.

        • stred
          Posted October 24, 2014 at 8:55 am | Permalink

          Perfectly described. The problem is that when making the investment it is difficult to believe that government would reverse the changes that were made in order to put right the previous disaster, such as the 60s Act. Also, who would have thought that retrospective tax hikes, such as abolition of the inflation allowance for CGT would have been allowed. JR was on the radio today saying that we should explain to the EU that the British do not accept such theft. This leaves investors trapped and unable to sell without losing much of their retirement pot.

  10. Lifelogic
    Posted October 23, 2014 at 7:01 am | Permalink

    Of course were the state sector to deliver some decent roads, bridges, decent real (not indoctrination) education and good/efficient (not quack and vanity) health care (and without the huge delays, rationing and queueing) then that would help productivity too.

    Instead we get green subsidies to misdirect the private sector into pointless activity and the absurd HS2.

    A better/quicker train ticketing system would save far more time for passengers at perhaps one thousandth of the cost of the pointless HS2.

  11. Ian wragg
    Posted October 23, 2014 at 7:22 am | Permalink

    I thought you were an intelligent man John. Why would anyone give a pay rise when you keep importing half a million foreigners every year
    The majority are happy to work for the minimum wage and the employer having the wages topped up by the taxpayer.
    I see the EU budget is up 3.6 billion
    So much for CMD, s reduction.
    Juncket has put Dave right on immigration. No change. By 2017 you will have imported enough foreigners to get a yes vote regardless of the natives wishes.

    • Bob
      Posted October 23, 2014 at 9:33 am | Permalink

      @Ian W

      ” By 2017 you will have imported enough foreigners to get a yes vote regardless of the natives wishes.”

      Which is why the only effective referendum will be the May 2015 general election.

    • DaveM
      Posted October 23, 2014 at 1:11 pm | Permalink

      Not if only the natives can vote. Any suggestion that the immigrant non-Brits could vote would lead to an uprising! And, as Ukip will tell you, most of the migrant workers don’t want any more immigration either.

      • ian wragg
        Posted October 23, 2014 at 4:11 pm | Permalink

        What’s the betting they bring in some residency rule eg being hear for minimum 2 years. Then all but the last million will get a vote but that will be taken care of by the bogus votes by the people who shouldn’t be gere in the first place plus gerrymandered postal votes. Banana republic or what.

      • Bob
        Posted October 23, 2014 at 4:15 pm | Permalink

        @DaveM

        “as Ukip will tell you, most of the migrant workers don’t want any more immigration either.”


        You need to define what you mean by migrant workers.
        It could be that settled immigrants from the Commonwealth may feel under threat from migrants from eastern europe, whereas the eastern europeans would prefer the UK borders to remain open for their friends and relatives.

  12. Gary
    Posted October 23, 2014 at 7:24 am | Permalink

    fixing wages higher than the market will bear has the unintended consequence of rationing jobs. Employers don’t have unlimited scope for raising costs.

    The real problem is the ongoing monetisation of govt debt by the central bank. This signals to all and subdry to follow the trade that cannot fail. The central bank has promised it. This is a massive transfer of wealth to insolvent banks, from non banks ie we the people. This sucks money out of the economy into this trade, causing bond inflation but deflation everywhere else. Including wage deflation.

    But, neither you nor anyone else is willing to stop this nonesense at source . So, you and the rest of our so called lawmakers will be held responsible when this economy collapses.

  13. Nick
    Posted October 23, 2014 at 7:24 am | Permalink

    OK, you want a wage rise for people.

    Go and stand outside Tescos. Start a petition. You want Tescos to raise their prices by 10% so their workers can have a wage rise.

    You don’t get it one iota do you.

    It’s not GROSS WAGES, it is TAKE HOME PAY that matters.

    The difference is what you take off people.

    Axe that. Its within your power to unilateral cut taxes increasing take home pay. You won’t.

    That you won’t is telling. It shows that MPs like you are the problem. You are the cause of the mess.

    Reply I agree that tax is too high and have voted for cuts in Income tax. I am not the MP to criticise for liking high taxes!

    • Lifelogic
      Posted October 23, 2014 at 8:15 am | Permalink

      To reply: no you are not to blame but IHT ratter Osborne and Cameron with 299+ tax increases so far are – and they are not even raising more tax revenue through them.

    • Bob
      Posted October 23, 2014 at 9:38 am | Permalink

      @Nick
      I agree with Mr Redwood, his views on taxation are more in line with ukip policies than Tory.

    • Cliff. Wokingham.
      Posted October 23, 2014 at 10:32 am | Permalink

      It is not just income tax which is the problem, it is the whole load of taxes which we’re all subject to.

      Income tax and NI takes about a third of your pay but, I suspect, it pales into insignificance when one looks at VAT, fuel duty, and a whole host of hidden taxes.
      The state is now trying to justify even more taxation on people.

      Businesses appear to be subjected to more and more tax and more and more regulation. Any minor infringment of any of the miriad of regulations result in the “Handed a record fine” tax.

      It seems that every public body and it’s mother can issue a fixed penalty notice to the public; these are little more than taxes in reality. When the criminal or civil justice system is used as little more than an extension to HMRC, both organisations are brought into disrepute.

      Just as I stated on the future of the NHS piece earlier this week on here, I feel we need an adult discussion about what we want the state to provide for us; Do we want the state to provide anything other than security, policing, emergency services cover, real education, as opposed to a lefty indoctrination system, healthcare and a safety net for the sick, disabled and those down on their luck? Do we want the state to supervise kids cleaning their teeth at school? Do we want the state to provide constant propaganda via their own broadcaster? Do we want the state to force us to accept expensive fuel, power, etc? These are the types of questions we need a government to think aboutnot just thinking up more and more ways to extract more and more money from us and crazier and crazier ways to waste that money.

      • Max Dunbar
        Posted October 23, 2014 at 4:52 pm | Permalink

        What kind of policing? The police don’t just enforce ‘lefty indoctrination’ they actively practise it as can be seen if one looks at their ‘achievement’ records.

    • A different Simon
      Posted October 23, 2014 at 10:45 am | Permalink

      I don’t even think it is take home pay which matters .

      – Firstly people need to be competitive globally or they won’t have any money coming in .

      – Secondly they need to be making enough to cover accommodation , living costs and to be making sufficient provision for old age .

      Campbell Newman in Queensland is the only politician who has correctly decided to approach this problem from the bottom – by reducing the cost of living . All other politicians in the know world are approaching it from the top – increasing wages .

      This makes me think that the prime motivation behind increasing wages is inflating away debts .

      UK wages for average performers are uncompetitive . The majority are simply paid too much on a global scale .

      They have nothing to show for it because UK accommodation costs absorb any increase in wages leaving nothing to be put away for old age or to circulate in the economy .

      On the other hand , UK wages for star performers are globally very competitive .

      There is huge demand for really good people in China and India to the extent that they are no cheaper than here in the UK where companies and consumers seem to prefer mediocrity .

  14. Roy Grainger
    Posted October 23, 2014 at 7:27 am | Permalink

    Uncontrolled immigration is not only holding down wages but will also prevent David Cameron from attaining his new target of “full employment” – which is of course a very dangerous goal which if attained would be disastrous for the economy as it was in the 1970s leading to rampant union power and hyper inflation.

    Labour’s command economy approach is laughable: Wages too low ? Increase minimum wage. Prices too high ? Implement price controls. Venezuelan best-practice. What Ed Milliband never explains is how he is going to increase private sector wages, someone should ask him.

    • Cliff. Wokingham.
      Posted October 23, 2014 at 10:43 am | Permalink

      I agree Roy; earlier this week, on the state’s broadcaster, a fruit grower was interviewed. He trotted out the line that he had to employ foreign labour to pick the fruit, because the lazy Brits don’t want to do it. I suspect the truth (in some cases other than this one ed) is that “The Lazy Brits”(sic) won’t do it for the low pay and bad conditions. I suspect that the pay is NMW wage with some taken out for the accomodation on the farm and the provided food and drink.
      I suspect if the pay reflected the hard work involved, then there would be plenty of British people wanting to do it; my family used to do it in the 1950s and 1960s as a holiday in Kent, for some time away from East London.

      I suspect the real villans are the supermarkets who put so much pressure on suppliers to keep prices low and perhaps, we are all guilty of expecting our food to be cheap and thus a vicious circle is formed.

      Reply I allow this on the basis that we do not know the name of the grower and know nothing about the pay and conditions he offers, so it is a general observation.

      • William Gruff
        Posted October 23, 2014 at 8:41 pm | Permalink

        Not so long ago (perhaps three or four years) a local (North West) farmers’ organisation lobbied regional MPs to ensure that the flow of cheap immigrant labour is not interrupted by immigration reforms. If I recall correctly this was not very long after the deaths of Chinese cockle pickers in Morecambe Bay.

        As you say, it is not that ‘Brits’ will not do the work, rather that one hundred years after the outbreak of the First World War the descendants of those who fought and died, or survived to live with appalling wounds and disabilities, have long been disinclined to eat the unspeakable in the hope of ‘jam tomorrow’. Given all that has happened since 1914 – the Second World War; the end of empire; our decline as a world power; virtual bankruptcy under ‘socialism’; destruction of manufacturing that followed Mrs Thatcher’s depredations; introduction of debased ‘comprehensive’ education; imprudent expansion of higher and further education (partly to reduce the number of jobless youths) and the general encouragement, over the past fifty years or so, of unrealistic and sometimes absurd ambitions by parents, schools and various youth centred media – it should not be difficult to understand why people will not put up with the conditions those who were promised a ‘land fit for heroes’ tolerated.

        No one needs a job; we all need a living and a job that does not provide that is not worth doing. As it is a system has been created that provides a living without working and those who choose to take advantage of its generous endowments cannot be blamed for doing so when the alternative is wage slavery for very low wages and the condescension and contempt of one’s employer. Pay them more and stop treating them like slaves and I’m confident the reportedly work-shy ‘Brits’ will happily do the work.

        My apologies to our host if this is considered overly long.

    • A different Simon
      Posted October 23, 2014 at 10:57 am | Permalink

      Roy ,

      I supply database design services to customers overseas – where quality is appreciated .

      British companies have an insatiable demand for mediocrity and the offshore outsourcing giants have geared up to try and satisfy it .

      Given I have to compete with workers in India , Malaysia and elsewhere , I have had to lower my rates to get the work .

      Export driven companies have to remain competitive too – they also need to generate a surplus to reinvest in R&D etc .

      Are Labour and Ed electioneering or do they really fail to appreciate we are competing in a global market place now ?

  15. Anonymous
    Posted October 23, 2014 at 7:29 am | Permalink

    “The best way into a better paid job is to have a less well paid job and work your way up.”

    Which most of us have done. The problem is that – with top ups – there is often little difference between the real wealth of neighbours on different pay scales with widely differing responsibilities. Moderately paid people are being taxed as though they are rich.

    This requires a lot of tax so an employer struggles to keep costs down – what is she to do to remain competitive but to keep wages low where there is a glut of workers ? There is no indication that pay is going to get better. As Mr Farage says. Minimum wage has become maximum wage in many places – the economics for supply and demand of labour are the same as any other commodity.

    Incidentally. The (potential migrants ed) massing at the port of Calais. We can infer two things from this:

    – UK benefits are still too generous

    or

    – The (word left out) youth in Britain who complained that there were no work opportunities and discrimination against them were lying

    I think a bit of both.

    What is driving British people to UKIP is their innate sense of fair play and the feeling that they themselves are being treated unfairly. What turned people off the BNP was that same sense of fair play.

    Your party is yet – even at this late hour – to understand what makes us tick and underlying it all is our innate goodness. It is tragic that the wrong voices have been listened to.

    • Max Dunbar
      Posted October 23, 2014 at 5:46 pm | Permalink

      The BNP was principally a party for the white working class whereas UKIP has managed to appeal to both middle class and working class people.
      The vilification of the BNP came mainly from the Labour Party etc ed.
      Now we have UKIP being attacked by the Conservative Party because that party is also close to it in many respects.

  16. Lifelogic
    Posted October 23, 2014 at 7:31 am | Permalink

    A decent rubbish collection system, a far more efficient legal system and a criminal justice system that actually had some deterrent effects would help productivity too.

    • A different Simon
      Posted October 23, 2014 at 11:00 am | Permalink

      I thought you lived overseas .

      What is wrong with our rubbish collection ?

      Mine seems to be fine .

      Have you seen the plasma-gasifier which Air Products are commissioning in the Tees-Valley to gasify 1,000 tonnes per day of municipal solid waste reducing landfill dramatically in the process ?

      • Ian wragg
        Posted October 23, 2014 at 11:32 am | Permalink

        Let’s see if it works.

  17. Anonymous
    Posted October 23, 2014 at 7:56 am | Permalink

    “In the end we can only have higher real wages if we work smarter and better, so that our output is more highly valued. The government’s work on apprenticeships, training and improved educational standards is a vital part of getting the UK a pay rise.”

    It’s a bit late to start going for a hi tech, *small population* manufacturing economy. There were many of us who were saying we should have gone this way when we still had the chance.

    We got the other option instead – a high population/low skilled economy.

    Yet again the BBC is featuring white old people when it comes to the NHS funding crisis. If this is how we treat our best generation then I dread to think how they will treat ours. Any other group featured in this way would have the Left screaming “hate crime !”

    Every single bulletin on the subject.

    “It’s the ageing population.”

    • Bert Young
      Posted October 23, 2014 at 9:17 am | Permalink

      There’s a lot of sense in your response . As a basically “importing” economy we have to add value before exporting products , this implies technology . International competition in the field of technology and higher valued goods is – and will continue ,to increase ; it is imperative therefore that we keep abreast of developments by investing in research at all levels and in training . Our Universities make a solid contribution to the supply of skills and new areas of exploitation and the City also benefit from the supply of talented young people . The world will only want what we have on offer if it is priced right and is unique .

      • William Gruff
        Posted October 23, 2014 at 7:36 pm | Permalink

        Higher education is another of our added value exports and, ironically, many of those who are competing with and outdoing us have been educated here. If tuition fees continue to rise foreign students may well soon comprise the bulk of those studying at English universities.

  18. John E
    Posted October 23, 2014 at 7:59 am | Permalink

    I would say your closing sentence is the most important. We are in a global economy. If we close our borders to cheap immigrant labour a lot of the work can easily go to them in their countries instead. Also many low skill jobs are being eliminated by technology – e.g. online shopping vs the high street. If we want premium wages we have to have premium skills and efficiency in the way we work.
    Pretending that everyone can benefit from a university academic education is a total nonsense. We should be putting our efforts much more into apprenticeships and vocational training rather than burdening young people with high debts for rubbish degrees. I learnt the hard way to employ someone with good A levels ahead of someone with an apparently decent degree from a new university. You literally would not believe how poorly educated and ill equipped for life some of the graduates from these lower tier institutions are.

    • fedupsouthener
      Posted October 23, 2014 at 11:04 am | Permalink

      Yes, we need more apprentices. The old skills are being lost and it is getting harder to find qualified workers. Plumbers, electricians, plasterers, builders etc.

      All these modern qualifications are nothing like the old City and Guilds that people used to get. Some graduates only seem able to answer questions they find in texts books. As you say, common sense is often lacking and a willingness to work in manual jobs is becoming less attractive. Everyone seems to want a job sitting at a desk or using a mobile phone.

  19. Andyvan
    Posted October 23, 2014 at 8:08 am | Permalink

    There is only one policy that helps productivity and wages and that is for the government to stop distorting the economy with policies that favour one group over another and stealing money by taxation, both overt and stealth. In short cut the government sector and let the private sector breath.

  20. Narrow shoulders
    Posted October 23, 2014 at 8:13 am | Permalink

    As you say average earnings are not the whole story, low pay is topped by state credits. A worker earning £12K in a job can have it topped up to £36K take home under universal credit regardless of their country of origin. These are the people with whom we must compete for the housing stock and whose spending power and sheer volume is raising our costs of living.

    With benefit recipients protected up to now from inflation and executives awarding themselve considerable rises, the low wage inflation must be disproportionately falling upon higher rate tax payers whom your coalition feels have broad enough shoulders to be heavily targeted for tax increases and removal of universal child benefit.

    • fedupsouthener
      Posted October 23, 2014 at 10:57 am | Permalink

      Agree with these sentiments. All these tax credits are a joke. I am sure I read that someone working part time hours on low income with 3 children can now get top ups worth £30,000 pa. This is madness! No wonder people without children but working in the same job are angry. Their take home pay is a lot less. Since when was it right for part time workers to have such a high income? My husband is self employed as a fully qualified plumber and heating engineer. Time served and with years of experience. He works all hours. His hourly rate is the same as when he started 10 years ago. He has to work around 10 hours a day 6 days a week to earn this kind of money. Where is the incentive to work? Too many people are living on hand outs and are happy to do so. I was shocked to see how much mobile phones are now. Some retailing at over £500. We both had to change ours as mine was over 5 years old and my husbands was on it’s last legs too. We bought 2 identical phones for £60. They are perfectly good for making calls and sending texts. So many people have these smart phones now and we know many who do not work full time. The whole system is in a mess and needs sorting because the people like my husband who pay their taxes and get no help are sick of it.

      • Anonymous
        Posted October 23, 2014 at 12:59 pm | Permalink

        Worse than that, Fed Up Southerner.

        A never employed single mum in our family was able to underwrite the purchase of her never employed brother’s £300 smart phone because she had house, car, income…

        As for optimising in-work benefits a 16 hour week seems key.

        There is little difference between a chap sorting newspapers part time and a police sergeant in our street in terms of lifestyle, purchasing power it seems.

        • Anonymous
          Posted October 23, 2014 at 1:01 pm | Permalink

          Yes.

          This country is INSANE !

  21. Iain Moore
    Posted October 23, 2014 at 8:19 am | Permalink

    Well said Mr Redwood.

    Many people from the right have got trapped into thinking that wage depression is a good thing, but like everything there are times when it is good, and times when it is bad. Needless to say I feel the wage depression we have now is damaging our economy.

    With an over supply of labour we have depressed wages, that takes the pressure of enterprises to concern themselves about productivity, which means capital investment is low, which puts us on a spiral downwards of a low wage economy, and requires the Government to spend ever greater amounts of tax payers money to ameliorate the effects of a low wage economy, as we see in the Chancellors budget problems.

    After the Black Death the shortage of labour resulted in a massive boost to our economy’s productivity, as labourers migrated to better paid jobs, and the agricultural sector they deserted was forced to make changes on it, in new techniques and the mechanisation of agriculture. Here it seems we have learnt nothing from history, for instead of taking on the lesson of mechanisation, we accept the agricultural lobbies pleadings for cheap East European labour. In the 21st century to have people breaking their backs in the fields is ridiculous. If we can create a robot to turn over rocks on Mars, we can surely build machines to pick strawberries here. All it requires is incentive, and there is no incentive while Government insures there is an inexhaustible supply of cheap labour.

  22. John E
    Posted October 23, 2014 at 8:20 am | Permalink

    For clarity, that £6 increase in discretionary spend in the Asda income tracker is per household, not per individual.

    • John E
      Posted October 23, 2014 at 8:37 am | Permalink

      And this puts us back to where we were in September 2010.

  23. oldtimer
    Posted October 23, 2014 at 8:32 am | Permalink

    The root of the UK`s problem problem is low productivity. That in turn stems from too high a proportion of national income being consumed by state, using money raised by an inefficient tax system. The tax system is inefficient because it is far too complicated, because tax rates are too high and because it encourages a black economy. The wide incidence of diffeent rates of tax on different types and levels of asset and income funnels spending and investment into private sector assets that are thought to earn the safer returns, such as housing. These do not promote productivity, but the accumulation of long term debt. It will require radical thinking and action to change this state of affairs. There is not much evidence that we will get it.

  24. English Pensioner
    Posted October 23, 2014 at 8:40 am | Permalink

    You say that we need to we work smarter and better. Many would say we just need to do an honest day’s work.
    I overheard a conversation between two girls, probably in their twenties, whilst in the queue at the supermarket. It seemed that one had just be fired from her job for updating her facebook page using the company’s computer in the office during working hours. They were discussing whether it was “wrongful dismissal”! I mentioned this to both my daughters, now in their forties, who also work in offices, and both said that many of those starting work these days assumed that they had the right to keep in touch with friends using social media at any time whilst at work and simply couldn’t understand what was wrong.
    A teacher friend confirmed this was common in class with pupils using smartphones and they could do very little about it, so it’s not surprising they see it as a way of life when they start work.
    If this is the attitude of modern British workers, I’m not surprised that employers look for better value elsewhere or that they can’t afford higher pay for less than a full day’s work.

  25. Gary
    Posted October 23, 2014 at 9:07 am | Permalink

    It is truly shocking that our already huge budget deficit is still growing

    http://www.telegraph.co.uk/finance/economics/11177862/It-is-truly-shocking-that-our-already-huge-budget-deficit-is-still-growing.html

    Twice the size of Europe’s deficit. But we keep blaming the EU. This govt is monetising savings and pesnions, and destroying capital by serial rate cutting causing older businesses who financed capital at the higher rate yesterday being put out of business by new businesses financing cheaper capital at the lower real rate today, ad infinitum. A deflatonary vortex that will kill this economy. All to “save” the banks. The parasite will succeed in killing the host. These politiciand are complicit.

  26. oldtimer
    Posted October 23, 2014 at 10:00 am | Permalink

    In my earlier comment about the impact of the high level of state spending and an inefficient tax system I failed to mention the high cost of energy. Low cost energy, provided first by coal and steam, powered the industrial revolution. Later the generation and distribution of electricity extended that revolution to the home, freeing women to enter the workplace. Today, energy costs are grossly inflated by taxation and subsidies for so-called green energy. The effect is to kill-off several relatively high tech, high productivity industries causing their relocation to countries with more sensible energy policies. This remains government policy. It is inane.

    • fedupsouthener
      Posted October 23, 2014 at 11:01 am | Permalink

      Well done Oldtimer for highlighting this folly. Energy prices are unnecessarily high and the subsidies are nothing short of a stealth tax which we all pay for on our bills. Incidentally, the highest amount of subsidies are going to Scotland where Mr Salmond thinks it’s great that the developers are giving money to local communities. People living in these communities don’t seem to understand that the money is only being given back to them because they have paid it in the first place on their higher energy bills. In essence, England is yet again subsidising Scotland

  27. behindthefrogs
    Posted October 23, 2014 at 10:24 am | Permalink

    What is needed is a combination of an increase in the minimum wage with raising the start level for NI contributions to be the same as for income tax.

  28. Robert Taggart
    Posted October 23, 2014 at 10:30 am | Permalink

    Indeed Johnny – vis-à-vis the headline.
    But…
    Hows about a Benefits rise ? – so us scroungers can share in the nations prosperity !

  29. Peter
    Posted October 23, 2014 at 10:43 am | Permalink

    The terrorist in Canada had his passport revoked and was stopped from travelling to Syria. This raises questions about UK protocols as we have a huge pool of such people.

    Surely it’s better for these people who hate the West and loathe our culture to go and die abroad or be refused entry back here. Forcing these creatures to stay here will cost money in surveillance or blood and might push those who are worried that they would be stopped from travelling to commit atrocities at home instead.

  30. A different Simon
    Posted October 23, 2014 at 11:09 am | Permalink

    Move the burden of taxation from employment onto land .

    In a single stroke disincentivise land speculation and reduce house prices and hence rents and mortgage interest to the banks .

    More money will circulate in the economy and there will be more to use to make provision for old age .

    All that will happen if you try and tackle the problem by increasing wages is that the surplus will end up in land/house price inflation – which only benefits landlords and mortgage lenders .

    The only advantage in increasing wages rather than getting accommodation costs under control is that it helps to inflate away the leve of debt .

    • Rob
      Posted October 23, 2014 at 3:09 pm | Permalink

      >> Move the burden of taxation from employment onto land.

      I totally agree. Property and land speculation are sucking up wealth from what should be within the real economy.

      (Rich people have done well out of rising values ed).

      That’s a result of ZIRP, QE, Funding for Lending, Help To Buy #1, Help To Buy #2, tax breaks, and over 18 BILLION in housing benefit per year taken from taxpayers. So taxpayers, savers and pensioners are lining the pockets of the already extremely wealthy idle property portfolio owners and landowners. What would have happened without all this help?

      When you penalise workers by over taxing them, penalise pensioners and savers by financial repression, while shovelling more cash to idle landowners who are economic parasites, you lead to an unstable, unhappy society.

      And the tories actually expect us to vote for them next year…

  31. CHRISTOPHER HOUSTON
    Posted October 23, 2014 at 12:41 pm | Permalink

    President Bush Jnr took one small step for politics when he commented forcefully on a strike in process, involving truckers I believe:-

    “Our fellow Americans are suffering because of this strike. Our fellow Americans are fighting and striking to feed their families. I say to our fellow Americans in management of the company: Settle this strike yesterday! Or we may have to review the tax breaks you receive from government ”

    The strike actually was resolved within the day.

    It should not always be the prerogative of the so-named Left in British politics to support an increase in wages. Their support is seldom honest but more often than not a cynical devise to garner votes from the more vulnerable

  32. Bob
    Posted October 23, 2014 at 1:23 pm | Permalink

    I see that the Home Secretary has now released Harry Roberts.
    What message does this send out to other would be cop killers?

    What does she intend to do for his victims?

    • Anonymous
      Posted October 23, 2014 at 10:05 pm | Permalink

      If Harry Roberts were truly repentant then he wouldn’t want to face the outside world.

      That he might end up in a pub surrounded by other lags having a beer and being cheered as a ‘geezer’ is nauseating.

      Did Ms May think it worth the risk ?

      Roberts gunned down three police officers probably because the death penalty had been withdrawn.

      • Denis Cooper
        Posted October 24, 2014 at 10:40 am | Permalink

        Prior to which the 1957 Homicide Act had restricted the application of the death penalty murders committed under five sets of conditions, and these murders seem to have satisfied four – murder of a) a police officer b) by shooting c) in furtherance of theft while d) resisting arrest.

  33. lojolondon
    Posted October 23, 2014 at 3:11 pm | Permalink

    John, statistics say that wages are stable or falling, Labour is making a big deal about it. At the same time, the UK is experiencing uncontrolled immigration, almost all at the bottom end of the wage scale, and entirely due to Labour’s policies to skew the population to ensure election success.
    So what is the effect of 250,000 emmigrants, almost all skilled (higher rate tax payers) leaving every year, and, at the same time, 500,000 immigrants, mostly unskilled (non-taxpayers or low-rate taxpayers) arriving in the UK each year?

    Clearly a devastating effect on tax income, equally devastating effect on benefits claims, but just as obvious is the downward pressure on average wages.

    For the same people to trumpet the benefits of immigration and at the same time bemoan the low wage increases for low-skilled workers shows complete stupidity at best, or massive dishonesty at worst.

  34. Tad Davison
    Posted October 23, 2014 at 3:21 pm | Permalink

    I just watched Mitch Feierstein on RT’s ‘The Keiser Report’, and if he’s right and there’s another crash, I wouldn’t bank on there even being a lot of jobs, let alone pay rises. Interesting too what he said about the need for the UK to get to hell out of the EU because we could cop for a whole heap of their debt. He hadn’t much good to say about the unelected Barroso either – just my kind of man!

    Mitch Feierstein didn’t put a gloss on things as politicians do at these times, desperate to garner votes, he just told it as he saw it, and the indicators for another down-turn are there.

    If there is to be a crash, it’ll be interesting if it comes before the election in May 2015. I always bitterly condemn Labour for not seeing the last one coming, but it could be Mr Cameron who looks like the incompetent if it happens again.

    I’ve also been watching a series by Al Jazeera but now available on YouTube entitled, ‘Meltdown – The Men Who Crashed the World’. It’s worth seeing as there are remarkable similarities between then and now.

    Tad Davison

    Cambridge

    • Tad Davison
      Posted October 23, 2014 at 3:55 pm | Permalink

      Here’s a piece from today’s Open Europe which would effectively prohibit wage rises in the medium term, and see living standards fall:

      ‘New Open Europe briefing: EU rules set to increase UK SMEs’ energy bills by 23% in 2020

      Ahead of today’s meeting of EU leaders, Open Europe has published a new analysis of the EU’s energy and environment policies. The study reveals that by 2020, EU-measures in this area will, on average, add 23% (£350,000) to small and medium sized firms’ energy bills in the UK. Meanwhile, household bills will increase by almost £150 (11%) a year. According to the UK government’s impact assessments, energy-related regulations linked to the EU impose a recurring cost of around £8.4bn per year on Britain, compared to £1.3bn a year for UK-derived regulations. Open Europe has calculated that, over their life-span, EU regulations will cost the UK £96bn. While the benefits were originally forecast to be £162bn, this relies on a global deal being secured. Without it the report estimates that benefits fall to £45.5bn.’

      Tad

  35. DaveM
    Posted October 23, 2014 at 4:17 pm | Permalink

    John,

    Any chance you could post something that doesn’t depress the hell out of me tomorrow?!

  36. Lindsay McDougall
    Posted October 23, 2014 at 8:45 pm | Permalink

    Were we drastically to reduce immigration, we would have to work smarter and better. There would be no choice. Necessity is the mother of invention.

    Germany’s population is now down to its 1995 level. Has Germany made no economic progress in these 19 years?

  • 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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