Real incomes and taxes

There has been a squeeze on real incomes in most of the advanced world this year. Inflation has risen to higher levels in The USA and Spain than in the Uk and almost the same as the UK in Germany. The two main causes have been the higher oil price affecting motor fuels and domestic energy, and rises in Chinese export prices as the Chinese reflect higher commodity prices and increasing Chinese wages. Wages in the west have struggled to keep pace with prices, so real incomes have been squeezed. The good news is it looks as if we have seen the worst of the commodity price rises. Many forecasters expect real wages to be rising again in these western economies including the Uk next year.

The big collapse in incomes during the credit crash of 2008-9 followed by a slow recovery has left many people feeling squeezed. The government in the UK needs to do more to accelerate real wage and spending power growth. Only the Conservative Manifesto promises to take more people out of Income Tax altogether, by lifting the tax threshold to £12500, benefitting all Income tax payers. It also promises to raise the 40% tax threshold to £50,000 as £40,000 is too low an income to have to face such a high rate. Lower taxes on Income will help boost family spending power. They will also stimulate the economy to generate more jobs and incomes.

The government has also promised to do more to promote apprenticeships, technical training and higher educational standards. The main way to a better paid workforce is to have a more productive better equipped workforce with the skills and training that command higher wages. I want to help build such a world. The alternative government on offer would tax success and hard work, drive people abroad by triggering a brain drain, and put taxes up to try to meet some of the huge public sector bills they wish to incur.They might start by only taxing the rich more, but once they had taxed them into doing less or leaving, they would have to tax everyone else more.

Prosperity, not austerity is what we need. The deficit has been brought to down to sensible levels. Some tax cuts and reasonable spending increases for health and education will help boost the growth rate and bring in more revenue.

Published and promoted by Fraser Mc Farland on behalf of John Redwood, both at 30 Rose Street Wokingham RG 40 1XU

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84 Comments

  1. Lifelogic
    Posted May 28, 2017 at 5:27 am | Permalink

    You say “Only the Conservative Manifesto promises to take more people out of Income Tax altogether, by lifting the tax threshold to £12,500, benefitting all Income tax payers.”

    It does not benefit those who earn over £100K as their allowance has been stolen away by Osborne, as has child benefit for people on over £50K. Also, before their U turn, Tories were trying to increase NI hugely. This “income tax” is paid below this threshold. If the Tories really cut and simplified the tax system they would actually raise more revenue. They are a party of ever higher taxation pretending not to be. No one trust them to cut taxes. To do so you need to cut out the endless government waste, the vanity projects, the green crap. the bloated state sector and all the things it should not even be doing.

    The pressure on wages is not helped by May’s open door immigration policy supplying more cheap labour or the compulsory pension scheme which forces many employers to give pay rises at pension contribution so cannot pay them as salary. The minimum wage legislation also harms them as does the misguided apprenticeship scheme. Just get the government out of the damn way please.

    • Dame Rita Webb
      Posted May 28, 2017 at 6:51 am | Permalink

      “The deficit has been brought to down to sensible levels.” What happened to a balanced budget? That comment alone should put off anyone, with even an “O” economics, from voting Conservative.

      • Kevin Lohse
        Posted May 28, 2017 at 9:21 pm | Permalink

        Which party is offering a balanced budget ? I must have missed it in all the manifestos I’ve seen.

    • hefner
      Posted May 28, 2017 at 7:28 am | Permalink

      Will I dare and object that those who earn more than £100k/year should be clever enough to know how to arrange their finances. So stop grumbling, you are just part of a tiny (but very vocal) fringe, as the median income is around £28k.
      And if you don’t know how, you are even more x#£*$% than I thought.

      • David Price
        Posted May 29, 2017 at 11:56 am | Permalink

        My concern is that the £100k+ group are more than able to avoid the tax hit but government will spend the money anyway and hit everyone else instead – no VAT reduction, hikes in NI, probate death tax, exclusion of council tax hikes from CPI etc.

        The people who should feel the pinch are the wastrel spenders in government, not the taxpayer.

    • Sir Joe Soap
      Posted May 28, 2017 at 8:24 am | Permalink

      All this tax and national INSURANCE would be fine and dandy if we then weren’t then told we’re not insured at all, and have to pay care and other costs out of already-taxed income. Either tax to pay for it or we pay ourselves. You can’t do both.

      • NHSGP
        Posted May 29, 2017 at 9:56 am | Permalink

        Spot on. Politicians are just trying to screw people twice. When that’s not enough they will try 3, 4 times.

      • Bob
        Posted May 29, 2017 at 10:53 pm | Permalink

        Exactly, the govt are charging us over and over again for the same thing.
        Just be honest about it, if you cannot afford to provide the services we’ve paid for because of the inherent inefficiency of the public sector, then stop taxing us and we’ll find an alternative private solution.

    • Leslie Singleton
      Posted May 28, 2017 at 9:38 am | Permalink

      Dear Lifelogic–I agree with you to the extent that I have never been able to grasp why employers should have anything whatsoever to do with pensions–certainly not compulsorily. I am not exactly a Socialist but if the Government wants retirees to have pensions (as I do) the government should arrange payment, perhaps via an Employees’ NI that does the job. Employers should not have to do the Government’s work for it and certainly not on today’s basis wherein they do a continuous ton of work for the Government – Maternity Leave, PAYE etc – yet, amazingly, have to pay the Government for its pains–and apparently increasingly so.

      • Leslie Singleton
        Posted May 28, 2017 at 12:52 pm | Permalink

        Postscript–“their pains” of course, Sorry–And Yes the above does mean that the Government should pay for what Employers do on the Government’s behalf–And Yes that also does mean that Taxes would have to go up but in a worthwhile cause viz lower unemployment and greater GDP. Wouldn’t worry me to see the whole system given a thorough shake-up. Another shake-up would be higher wages (and not by Government fiat) resulting from elimination of immigration. Yes I mean elimination–the idea that we cannot manage on our own is ridiculous.

      • Richard Elsy
        Posted May 29, 2017 at 12:27 am | Permalink

        I can’t help but agree with you. By the same token I support the idea that people should be encouraged, and eventually, obliged to make their own arrangements, as they choose, for health care and later life care, albeit with tax allowances to encourage this. It’s not unreasonable for employers to offer corporate schemes for this, as is commonly practised here as in many countries. Those of us who are self-employed should have a corresponding tax allowance to compensate. Those who are unemployed should have the premiums for this insurance included in their benefits.

        • Leslie Singleton
          Posted May 29, 2017 at 10:39 am | Permalink

          Dear Richard–Absolutely of course the employer should if but only if he wants offer pensions in any and every way he wishes and even more absolutely of course the employee should make his own arrangements. I have rarely been more disgusted than by that Government, repeat Government, ad on Workplace Pensions with its anti Employer twaddle along lines of “the best bit is your employer has to contribute”. Whom does the Government thinks provides employment? Personally I wouldn’t dream of bothering given this level of gratuitous hassle.

          • Leslie Singleton
            Posted May 29, 2017 at 3:42 pm | Permalink

            Sorry–Who not whom and think not thinks–Reminding myself of what the Govt has to say on this destroys a chap’s equilibrium

    • Bob
      Posted May 28, 2017 at 9:42 am | Permalink

      “Only the Conservative Manifesto promises to take more people out of Income Tax altogether, by lifting the tax threshold to £12500”

      and only the UKIP Manifesto promises to take more people out of Income Tax altogether, by lifting the tax threshold to £13,500.

      They would also raise the higher rate so that it wouldn’t affect middle-income professionals such as teachers and senior nurses.

      You should read their manifesto, lost of interesting ideas regarding VAT on domestic energy bills, TV Licences, the NHS, the armed forces and care for the old and infirm and IHT.

  2. Lifelogic
    Posted May 28, 2017 at 5:31 am | Permalink

    Interesting too to hear on More or Less radio 4 how people clearly seems to be profiting from insider dealing on leaks of official government economic statistics. Will any action be taken or is it just another fringe benefit for some?

    • hefner
      Posted May 28, 2017 at 7:31 am | Permalink

      Be logic for once. Aren’t you one of those who keep calling statisticians and government’s ones in particular completely useless?

      • Lifelogic
        Posted May 28, 2017 at 8:16 pm | Permalink

        Nevertheless the stats move the currency markets and money is made dealing on them.

  3. Lifelogic
    Posted May 28, 2017 at 6:02 am | Permalink

    You say – “They might start by only taxing the rich more, but once they had taxed them into doing less or leaving, they would have to tax everyone else more.”

    If you tax the rich they have less to pay their staff, their builders, gardeners, child carers, cleaners, drivers, to invest in their companies or they just leave or work less. A tax on the rich is a tax on all and harms the economy hugely.

    Starting from the current (absurdly over taxed and over regulated) UK position tax increase would raise less tax not more anyway. It also creates more essentially non productive and parasitic jobs in tax collection, bureaucracy, tax consultancy, legal advices and the likes. This also harms the economy too making it uncompetitive.

    The way to tax the rich is to get more of them them to pay for their own schooling, health care, dentistry and the likes using sensible tax breaks. The complete opposite of the governments current misguided direction. Hammond has just upped insurance premium tax (including medical cover) and Gove (like Labour) wants VAT on private school fees (which would clearly raise nothing net as so many would then have to move to state schools).

    The government’s attacks on the Gig economy are hugely misguided too. Why do so few in the government understand basic economics and how best for the UK to compete in the world?

    Where are the John James Cowperthwaites of today?

    https://en.wikipedia.org/wiki/John_James_Cowperthwaite

    • eeyore
      Posted May 28, 2017 at 4:31 pm | Permalink

      I fear an alternative government, in JR’s phrase (was the irony intended?), would not stop at the relatively mild and responsible revenue measures he mentions. Just two years ago Mr Corbyn was promising to fund his fantasies with a “people’s QE”, which I suppose is much the sort of thing that went down so well in Venezuela and Zimbabwe.

      Coupled with that we might well expect a review of IHT, CGT and the manifold other shabby dodges used by the rich to get away with not paying their fair share. Dying may become unaffordable in Corbyn’s Britain. For our heirs’ sake we shall have to stay alive, horrible though that may be.

      Next, direct wealth taxes. Shareholdings, inheritances, pension pots, property holdings, agricultural land of course (take that, you foxhunters!) – all stolen from the people, all to be returned slice by slice.

      Labour’s ambitious programme of nationalisation was not costed in the “fully costed” manifesto, so we may take it there will be no cost. Compulsory conversion of shares to bonds – i.e. legalised expropriation – may be the quick and easy route of choice.

      An interesting question is what Mr Corbyn’s back benches would make of such things. Would they support him? Or would they not?

    • hefner
      Posted May 28, 2017 at 5:44 pm | Permalink

      Tax on test: Do Britons pay more than most?
      Guardian, Sat.27 May 2017.
      A more informative comparison of the tax systems of U.K., Ireland, France, Spain, Germany, Sweden, USA and Australia than some of the usual ramblings.

      • Lifelogic
        Posted May 28, 2017 at 8:37 pm | Permalink

        You have to look at all the taxes – income tax of up to 45% , NI (both) employer and employee circa 23%, Insurance 12%, IHT 40%, car tax, fuel tax, VAT 20%, CT, council tax, alcohol duty, probate tax, stamp duty up to 15%, the passport tax, licence frees, planning and building control taxes, social housing provision tax, planning gain taxes, commercial rates, the greencrap energy taxes ……. then there is the deferred tax (the sums they are borrowing for the deficit), the inflating your saving away tax.

        All this can easily steel 90%+ of your investments off you over say 30 years. There is also the taxes that do not even raise any money. They just waste your time, annoy you and cost you and the state money – through absurd tax complexity, bonkers employment laws and endless red tape taxes.

        Despite this we have dire virtual state monopolies (all monopolies are dire and expensive) in Heath & Education and a very poor & over crowded road system. Indeed very poor public services in general. Yet May/Hammond want more of all this still!

        Corbyn clearly far worse still.

    • getahead
      Posted May 28, 2017 at 6:21 pm | Permalink

      Good stuff LL.

  4. Dame Rita Webb
    Posted May 28, 2017 at 6:44 am | Permalink

    “… and put taxes up to try to meet some of the huge public sector bills they wish to incur.? JR you must think the average voter has the attention span of a goldfish. Enquiring minds might like to do a bit of googling and see how much the taxpayer is likely going to have cough up for Mrs May’s follies i.e. HS2 and Hinckley Point. Why have the Oxbridge double first SpAds not pointed out that output is likely to increase, if you diverted the money away from one project to get people to Brum twenty minutes more quickly and instead looked at the effect of improving other multiple regional lines instead? The Bath to Bristol and Leeds to Halifax runs come to mind here.

    • Lifelogic
      Posted May 28, 2017 at 8:23 am | Permalink

      Indeed minor rail and road improvements all over the place would be a far better investment as would cutting taxes and letting people & businesses invest it themselves.

  5. alan jutson
    Posted May 28, 2017 at 7:39 am | Permalink

    Problem is John we are no longer taxed just on earnings, we have a huge tax on spending as well, VAT has been raised, and other taxes exist on a whole range of other services.

    Seems also that your Party now wants to exclude a huge portion of the population from any state help with social care at all.

    Yes raising the Personal tax allowance is good, but afraid £12,500 in five years time is simply far too low.

  6. Michael
    Posted May 28, 2017 at 7:48 am | Permalink

    You say “Some tax cuts and reasonable spending increases for health and education will help boost the growth rate and bring in more revenue.”

    Unfortunately, this is not promised in the manifesto. The message needs to be one of hope for a better future and the campaign is falling short of that need.

    Paradoxically the avoidance of Mr Corbyn in government is the most telling message.

  7. Caterpillar
    Posted May 28, 2017 at 8:06 am | Permalink

    I think the discussion of tax levels (unless hugely hiked by the future Labour government) is a second level distraction, and such tittle tattle arguments during the GE allows Labour to capture votes of desperate people.

    The UK’s unemployment level is now down to about 4.6%, historically at this level pressure would have come through with wage claims which could drive up inflation or drive up productivity or offshore some lower skilled works. Presently the UK has (a) labour available from EU, (b) the gig economy and (c) interest rates that point towards low or no risk investment by business. Though education is clearly important the tax and monetary discussions need to be more fundamental:-

    (a) New monetary structure – the official bank rate is too low – QE buying G debt while G borrows is at least perculiar, and too much money creation falls to too large banks (social credit and community banks can relieve this).
    (b) Flat Land Value Tax (as my yesterday overnight published comment mentioned) – this redistributes and avoids unearned economic rents (its fairer)
    (c) Consumption/expenditure tax to change UK savings (personal tax is then approx’ calculated based on salary into bank account – expenditure out, so a threshold for progressiveness is still possible unlike VAT collection)
    (d) A shift to net cash flow taxation for corporations to encourage investment now, and limit some avoidance.
    (e) An honest approach to NI, either it is national insurance, or it is just another tax.

  8. Sir Joe Soap
    Posted May 28, 2017 at 8:12 am | Permalink

    Sorry, but the recent IFS study shows the tax take increasing as a % of GDP under a new Tory administration, not decreasing.
    Spin it however you like, we are stuck between phony socialists and the real thing.

  9. hefner
    Posted May 28, 2017 at 8:22 am | Permalink

    Theresa May to be represented by Amber Rudd in BBC election panel: Pathetic.
    We can certainly look forward to confident and successful Brexit discussions.

    And the “brilliantly politically astute” JR who had been supporting Andrea Landsom. Has anyone seen his look next to the PM on the Wokingham Conservative election leaflet?

  10. Sakara Gold
    Posted May 28, 2017 at 8:28 am | Permalink

    I find your take on the manifesto commitments of the main parties risible…..

    The last time this country balanced the books and ran a trade surplus with the rest of the world was in 1979, the year Thatcher came to power. Governments of whatever flavour have run twin deficits ever since. Neither the Coalition administration or Cameron’s were able to reduce the deficits or the national debt, which is now absolutley enormous. Osborne put another half a trillion on it!

    We need to stop selling critical infrastructure assets to foreigners, invest in our manufacturing base and proposals to re-nationalise critical areas of our economy resonate with voters. Policies to make the disabled, pensioners and those afflicted with dementia pay for tax cuts for the rich are manifestly unfair and Theresa will be punished by the electorate on June 8th

    • Anonymous
      Posted May 28, 2017 at 10:12 pm | Permalink

      And the hidden message *in* Brexit

    • NHSGP
      Posted May 29, 2017 at 10:09 am | Permalink

      What’s telling is the refusal to public the amount owed for pensions.

      It’s clear when you know they owed 10 trillion pounds, and that the annual rate of increase in the debts exceeds total taxation as to why.

      The plan is to keep the ponzi going as long as possible. Hence the need to hide the amount owed. If they didn’t hide the numbers, people would look at them and say, hmm, I’m paying tens, hundreds of thousands of pounds and they can’t pay. It’s impossible to pay even with no services. Those paying, the young will insist on services, and in general the NHS wins over pensions. So they will axe them.

      The work place pension is the secret solution. Hope out of hope that when the plug is pulled, that people have enough in their work place pension. The Tory view.

      Labour will go the other route, they will say, all this money is badly managed, We will nationalize to protect people. Then they will spend the lot.

      I have [published the figures and explained that the State pension, the largest figure of the total if you capitalise the future liability, has always been a pay as you go scheme. If you capitalise it, surely you should also capitalise the tax revenues that will pay for it as an offset?

  11. Dominic Johnson
    Posted May 28, 2017 at 8:47 am | Permalink

    “Only the Conservative Manifesto promises to take more people out of Income Tax altogether, by lifting the tax threshold to £12500”

    Thats only £6.40 over a 37.5 hour week.

    Minimum wage is £7.50
    Starting Tax, NI and ENI at £14,625 would at least take the poorest out of tax altogether,

    20% over £20k would take the poor out of the tax system

    • Narrow Shoulders
      Posted May 29, 2017 at 11:12 am | Permalink

      @DJ

      Taking 20% out of tax means that 20% of the population does not care how the government spends our money unless it is on them.

      Reintroduction of 10% starting rate from £8K to £15K would be better and would probably collect as much as 20% from £12.5K

  12. William Long
    Posted May 28, 2017 at 9:02 am | Permalink

    Mrs May is showing every sign of pulling defeat out of the jaws of at one time apparently certain victory and the reason is that she demonstrates no understanding of or liking for the Conservative message of low taxation and free markets. Even when she comes up with a constructive and realistic approach to the very difficult problem of funding of care in old age, she allows the opposition to blow her off course. In my view she has demonstrated very clearly that the sole difference between her and Labour is one of degree. The only reason I will be voting Conservative is that our local candidate has sensible views and the thought of Labour or, still worse, a hung parliament is to nasty to contemplate.
    Let us hope that UKIP is not dead but only sleeping as the current Conservative leadership is giving them a real opportunity for a Phoenixlike recovery next time round.

  13. jack Snell
    Posted May 28, 2017 at 9:27 am | Permalink

    I’m afraid that we can’t believe a word now at this stage of the electioneering cycle.. there’s just too much at stake and as I suspect we are being told anything now including fake promises. The people that I am beginning to feel really sorry for now are the old British retired people in Spain and the south of France who are experiencing a real decline in the value of their pensions and spending power. A lot of them are in a real flux worrying about whether to return to UK or not. Others who sold their houses to retire to Spain where they bought properties see that there is a glut of property on the Spanish market and houses are hard to sell at a fair price and that in any case if they return to UK they worry about where and how they will live and survive in a post brexit Britain. For these people in their old age its a real worry? We should be concerned too because if they do decide to return en masse our services here will be stretched. Worrying times

  14. Bert Young
    Posted May 28, 2017 at 9:29 am | Permalink

    Of course John is optimistic and supportive of his Party’s manifesto , but , one always has to read between the lines . From most of the things he has posted in the past and his speeches in the HoC , all show his truly extreme right beliefs ; for these reasons I have concluded he does not fall in with the recent liberalism that has emerged from the Conservatives . I am a ” Redwood ” man , I want a return to low taxes , incentives for industry and commerce and the opportunity for real workers to get cracking .

    The rule of British law and the right to make them is paramount in my upbringing and belief in our democracy ; allowing Sharia courts to exist and our turning a blind eye to them is beyond my comprehension . This sort of thing has gone too far and must be banned . It is not a vote winner and has to be made illegal .

    • Lifelogic
      Posted May 28, 2017 at 8:54 pm | Permalink

      Not extreme right just doing what is sensible and what works. Freedom of choice, small government, fewer regulations, cheap energy, UK democracy & lower taxes.

      Though he is not that sensible (or brave) when it comes to sorting out the dreadful state monopolies – the NHS & education for example.

  15. Prigger
    Posted May 28, 2017 at 9:40 am | Permalink

    I do recall Economists saying when oil prices were good deal higher than the now $50 per barrel that the “best sustainable price for oil and the economy worldwide was an oil price ranging between $65 and $95 per barrel. The oil price gets blamed for all kinds of stuff . It’s not how big it is but what you do with it.

    Having car and truck drivers driving back and forth along motorways doing identical jobs when they reach their high mileage destinations is urban stupidity. If the state has to intervene at all it is to set up rules and laws stopping for example a plumber travelling to do his job from A to B 50 miles away only for his twin brother also a plumber driving from B to A each day to do his job.It is a freedom of movement of sorts more lunatic than that of the EU.
    The cost to our economy by such silly duplication of travel is beyond Diane Abacus to calculate even on one of her good days, her hair being nicely combed..

  16. Termenny Malthus
    Posted May 28, 2017 at 9:57 am | Permalink

    “The alternative government on offer would tax success and hard work, drive people abroad by triggering a brain drain…”
    If our “brains” are not already leaving the country then that would indicate we do not have any brains.
    All governments promise further clutter in terms people, housing, facilities.Oh and stop-start criss-crossing of rails and roads as in some daft kid’s lego construction.We have more toilets and flush mechanisms in this country than some countries have people.
    England would fit into California alone three times over. But we have a third more population than California and Americans believe it “overcrowded”. They are right!!!!
    We need a UK government with a sense of population balance. We needed such a government 50 years ago.

  17. Bob
    Posted May 28, 2017 at 10:08 am | Permalink

    Mrs May is playing a very sophisticated game, she has all of the media broadcasting opinion polls showing her lead over Labour in single digits, which as we know is the best way to get the Tory voters out on the day and ensure the Tories have a landslide win, and with such a majority that they will be able to ignore their manifesto pledges with impunity, including Brexit – which will be fudged out of existence.

    It’ll be another 5 years before the voters can express their displeasure.

    Do you expect to be running again for Parliament 5 years time John?

  18. clear
    Posted May 28, 2017 at 10:16 am | Permalink

    They need to stop dissing Corbyn. See Order Order ” attack” vid. ( I hold no brief for Corbyn )
    If Cons get in revamp and get us out of EU quickly.
    Plan for not getting in as posted by Ian Pennel ( not knowledgeable about all his points but the idea is good)
    As he says it’s too late to start changing things now.

  19. cornishstu
    Posted May 28, 2017 at 10:18 am | Permalink

    They just don’t seem to get it do they. They don’t need more money, just spend what’s taken more wisely, pull a lot of snouts out of the trough, kill off the quangos, at least 90% of which are not fit for purpose. I have not had a pay rise for seven years, working for a small family run business who are struggling to keep their heads above water whilst government heap more and more expense and red tape on them. So I won’t be getting that pay rise any time soon but the demand for my hard earned keeps increasing with no recourse. I have to spend within my limits. So why can’t government instead of finding more ways to tax us do the same. The extra given in income tax threshold is gone just in subsidising green energy.

  20. Ian Wragg
    Posted May 28, 2017 at 10:52 am | Permalink

    The continued ZIRP followed by the government is robbing us blind.
    You say you want improved wages but we still import a quarter of a million mainly low skilled immigrants (guesswork only).
    Taxes are the highest since the end of the war but we still throw billions of borrowed money on aid.
    I really do think that the plan is to lose the election to cancel Brexit.
    No Tory party wanting to win would deliberately alienate so many core voters.

    • Jerry
      Posted May 28, 2017 at 10:05 pm | Permalink

      @Ian Wragg; “I really do think that the plan is to lose the election to cancel Brexit.”

      One hell of a conspiracy theory that, after all not one single defection by a europhobe from the party, but then perhaps there are just no principled politicos on the right these days, willing to what Enoch Powell did in 1974…

      No, the rout has been caused by nothing more than “weak and wobbly” incompetence, taking voters for granted, believing them so stupid that they woudl be willing to allow the state to steal the value out of their homes in their final years.

  21. Antisthenes
    Posted May 28, 2017 at 11:00 am | Permalink

    One appreciable way to increase employees wages would be to reduce other cost burdens that successive governments decided to heap upon employees. Either from the desire to impose political ideologies or at the behest of vested interest or by fiat of bureaucracies such as quangos, EU commissioners and (rule book/nanny)agencies culminating in highly expensive laws, regulations and restrictive practices to conform with. The result of course is that employers profit margins are squeezed and their capacity to compete is considerably reduced. Leading to wage suppression and the speeding up of installing automated production processes or going out of business.

  22. English Pensioner
    Posted May 28, 2017 at 11:04 am | Permalink

    I find it difficult to understand how one can have meaningful technical apprenticeships without the necessary Technical Colleges to back them up.
    Although I didn’t have a formal apprenticeship, I had a job where I learnt about electrical engineering at work and studied to get the formal qualifications at Technical College and in due course on the basis of my experience and formal qualifications became a member of the then Institution of Electrical Engineers. This route of technical training and academic study is no longer available, and without it I would have been a failure as I had no interest in pure academic study. However, the Technical College provide the study which backed up my expertise gained whilst working to give me a real understanding of the subject.

    • alan jutson
      Posted May 28, 2017 at 8:33 pm | Permalink

      EP

      Exactly the same training background with day release and night school, only mine was a fully indentured apprenticeship in Mechanical and Production Engineering.

      After 8 years in total at two technical collages, gained HNC.

      Gave up on Engineering after 10 years, as it paid poorly when compared to other types of businesses and Industry, so moved into construction products and sales before forming my own small business.

      Only after finishing my training and looking back a few years later did I realise how good and varied my training was.

      Like you I was not interested in only academic and theoretical study.

      Tony Blair was so wrong in wanting 50% of people to go to so called University and closing work related Tech collages.

      • alan jutson
        Posted May 29, 2017 at 8:12 am | Permalink

        Oops spelling “colleges”

    • Anonymous
      Posted May 29, 2017 at 8:46 am | Permalink

      ‘Apprenticeship’ can be learning to make a cup of coffee these days.

      • libertarian
        Posted May 29, 2017 at 2:29 pm | Permalink

        ‘Apprenticeship’ can be learning to make a cup of coffee these days”

        It can also be in nuclear engineering and a level 7 apprenticeship will earn you a degree whilst being paid to get it.

        So your point is what exactly?

        • Anonymous
          Posted May 29, 2017 at 4:38 pm | Permalink

          Let’s not call coffee shop workers apprentices, that’s my point.

          • libertarian
            Posted June 4, 2017 at 3:33 pm | Permalink

            Why? Why shouldn’t you get a qualification in food handling, hygiene , customer service and coffee making?

            What do they need ? A degree ? A levels GCSE’s ?

    • Cheshire Girl
      Posted May 29, 2017 at 3:52 pm | Permalink

      My Husband did exactly the same thing as you EP. I did a similar thing myself, working during the day, and going to the Technical College in the evening to get some qualifications at Shorthand/Typing and secretarial skills. These led to several good positions, both in the UK and abroad.
      I think it was an absolutely crazy move to close the Technical Colleges. I was not University material – many werent in those days – but everyone had a chance to gain some useful skills which improved their chances of gaining meaningful employment.

  23. Simon Platt
    Posted May 28, 2017 at 11:13 am | Permalink

    Unusually for you, John, you are quite wrong when you say ” Only the Conservative Manifesto promises to take more people out of Income Tax altogether, by lifting the tax threshold to £12500, benefitting all Income tax payers.”

    UKIP’s manifesto promise is to increase the personal allowance to £13,500. UKIP is the party of fairer, lower taxes. Readers can check what I say by reading the UKIP manifesto, available at my own blog by clicking on my name. (Page 10 and subsequent pages of the UKIP manifesto refer.)

    Of course we shan’t have a UKIP government. Our best hope is for a Conservative government with several UKIP MPs in opposition. (I myself am standing against the Labour incumbent in Preston.) Conservative-minded voters should understand that UKIP stands, among other things, for sound finances and a reduced burden of taxation. They can vote UKIP with confidence in places like Preston.

  24. Pilot scheme
    Posted May 28, 2017 at 11:31 am | Permalink

    The behaviour of British Airways says it all. I am unlucky, I admit, with air travel. All airlines. The very worst Canadian and, their Canadian terminal in Toronto. Of all airlines
    50% of my flights have resulted in late baggage delivery, usually delivered to a neighbour of their choice two or threedays later. Late flights, cancelled flights, virtually imprisoned in the airport lounge. Certainly utter lack of information and misinformation. Overpriced water. overpriced goods. Bad airport service and rude staff. I would love to blame lousy airlines and airports on nationalisation, no, private enerrprise at its worst with largely a captive customer.
    Remedies
    No flight bookings to be paid in advance. A small deposit only. You pay by credit card, on the plane, in your seat..and cannot be removed from that seat once you are in it. Vouchers for hotel accommodation be mandatory on the airport and airline with a designated desk handing them out and it MUST be manned at all times. Failure to do so results in an automatic and immediate forfeit of landing rights for a seven day period. Fixed it!

    • Jerry
      Posted May 28, 2017 at 9:46 pm | Permalink

      @Pilot scheme; There are another couple of solutions; 1/. If you do not want to accept the airlines T&C then simply do not fly. 2/. Otherwise buy a lot of shares and then run your airline how you see fit!

      • Edward2
        Posted May 29, 2017 at 8:32 am | Permalink

        Jerry
        Coming from someone like yourself who posts daily complaints about many different policies and laws where you tell us your solutions for change or improvement, your response to Pilot Schemes ideas for improvement to poor customer service by airlines is very poor.
        Being sneering and sarcastic in its tone.

        • Jerry
          Posted May 29, 2017 at 2:34 pm | Permalink

          @Edward2; “Being sneering and sarcastic in its tone.”

          Indeed, guilty as charged! But at least I’m not a hypocrite who loves unbridled capitalism only just so long as I’m not being personally inconvenienced by it…

          • Edward2
            Posted May 29, 2017 at 5:41 pm | Permalink

            How can you be a hypocrite if your opinion is set one particular way?

      • libertarian
        Posted May 29, 2017 at 2:31 pm | Permalink

        Oh Jerry

        Thanks for that sneery post I’m saving that piece of advice up for one of your future missives .

        Watch this space

        • Jerry
          Posted May 31, 2017 at 7:30 am | Permalink

          libertarian; “Watch this space”

          No doubt, Walter, you will do so only by totally ignoring the context in which I made my comment, and as such all you will do is set yourself up for another fail. Watch this space!

    • Anonymous
      Posted May 29, 2017 at 8:49 am | Permalink

      I’ve never had a problem with airlines. I consider a delay minor in the miracle of crossing oceans in hours.

      Airline staff can be forgiven for being rude to me (though never have) as they are Gods.

  25. Bryan Harris
    Posted May 28, 2017 at 12:20 pm | Permalink

    The big collapse in income started well before 2008. With the Eu and our own government working to keep inflation low there were arbitrary limitations applied that stiffled growth – companies made less profit, there was less innovation, and consequently pay stayed low.

    Many companies, at best, paid out increases of less than inflation from 2000.

    We all know how damaging socialist policies are but we allowed ourselves to follow the EU in keeping wages low – in part thanks to the immigration policies.

    The credit crash of 2008 didn’t help but the rot had already gotten into the system well before 2000.

    What we really need now, badly, is encouragement for all companies and individuals to innovate and create a positive society where the hard workers are rewarded, central government is not telling us how to think, and taxation is neither wasted nor at a high level.

    While I can see why blair and Ms May see benefit in holding the political middle ground, I just hope that doesn’t mean taking on socialist policies.

    • Anonymous
      Posted May 28, 2017 at 10:11 pm | Permalink

      Yes. The generational cliff edge has already taken place. Whilst in the EU. Nay. BECAUSE of the EU.

      What comes next is a closing of gaps between generations. Real money. It’s going to be hard.

  26. Lifelogic
    Posted May 28, 2017 at 12:26 pm | Permalink

    Having just watched BBC lefty Andrew Marr interviewing Caroline Lucas, Leanne Wood, Diane Abbott & Amber Rudd I dispair of the quality of our politicians. Certainly no sign, from this, that attracting more women will help. From this evidence they seem far worse, more left wing, more economically illiterate, living in a dream worlds with even less of a grasp of logic, maths, business, science or reality. Endless repitition of silly platitudes or banal, political stock phrases.

    • hefner
      Posted May 28, 2017 at 9:32 pm | Permalink

      “Endless repetition of silly platitudes or banal political stock phrases”: That reminds me of someone, … but who could this be?

    • Jerry
      Posted May 28, 2017 at 9:35 pm | Permalink

      @LL; “Endless repitition of silly platitudes or banal, political stock phrases.”

      Talk about the pot trying to call kettle black!

    • Denis Cooper
      Posted May 29, 2017 at 12:32 pm | Permalink

      Peston on ITV is even worse!

  27. NHSGP
    Posted May 28, 2017 at 12:27 pm | Permalink

    The biggest cause is taxes.

    Taxes caused by your inability to stop spending other people’s money and the debts that dare not speak their name.

    Are you going to make a promise to publish the numbers this time round, like you did previously to get elected?

    Still missing from the WGA

    Reply I did publish them as you well now

  28. APL
    Posted May 28, 2017 at 2:53 pm | Permalink

    JR: “The two main causes have been the higher oil price affecting motor fuels and domestic energy, ”

    So, reduce fuel excise duty.

    JR: “The good news is it looks as if we have seen the worst of the commodity price rises. ”

    That’s not news. That’s a forecast. News is something that’s happened.

    JR: “Many forecasters expect real wages to be rising again in these western economies including the Uk next year.”

    Yea! More Jam tomorrow.

    • Jerry
      Posted May 28, 2017 at 9:30 pm | Permalink

      @APL; Mr Redwood keeps trotting out this manta about crude oil prices, but Brent crude has been fluctuating around the $45 to $55 barrel mark for the last 12 months whilst most movement in the last few years has been sharply downwards (hence why OPEC has tried, but failed, to force the price higher by output cuts) from between $100 and $150.

      Of course what has affected the UK, when it comes to oil price is not the market price but the fact that it is priced and paid for in USD, and as the GNP tanked on the morning of the Brexit result. Thus, if there is a problem, it is not oil price but the collapse in the value of the GBP that is to fault.

      Reply Oil has surged from the lows of early 2016 which is why inflation in the USA and Germany is up like UK inflation though they have had stronger currencies.

      • APL
        Posted May 29, 2017 at 8:00 am | Permalink

        Jerry: “Mr Redwood keeps trotting out this manta about crude oil prices, but Brent crude has been fluctuating around the $45 to $55 barrel mark for the last 12 months ”

        I too had a look at the historical oil price on the back of this article. But in the end, couldn’t be bothered.

        It’s an election, and Politicians lie.

        Jerry: “Thus, if there is a problem, it is not oil price but the collapse in the value of the GBP that is to fault.”

        Sounds like a plausible explanation. Back in March, there was an article in the press – Low Oil price hits Saudi Arabian economy and sparks Fitch rating review.

        JR: “Oil has surged from the lows of early 2016 which is why inflation in the USA and Germany is up like UK inflation ”

        So, your party is in government, you should be introducing credible measures to insulate our economy from oil dependency, especially now that the North Sea Oil bonanza is over.

        How about some inexpensive Thorium cycle nuclear reactors. Scrap the HST which can’t work if we can’t generate enough electricity and commission the construction of saft TC generating plant.

        Another article, 15th March, Saudi Arabia tries to reassure markets after oil price plunge.

      • Jerry
        Posted May 29, 2017 at 8:07 am | Permalink

        @JR reply; Having fallen by anything up to $100 a rise of $10 is not going to alter much (unless compounded by FX rates), and how does international oil prices affect the USA when they simply Frack their way out of the price rise (assuming that the US government doesn’t simply sell-off some of it strategic reserves), the problem with the US & German economies is due to failed wider economic policies not oil price.

        Reply Oil fell to a low of $27.67 (Brent) in Jan 2016. At $55 it is 100% higher. That is why inflation rose swiftly in all the main advanced countries.

        #AnyOnesFaultExceptBrexit

        • Jerry
          Posted May 29, 2017 at 2:45 pm | Permalink

          @JR reply; But still much lower that it was a mere two years ago or so. Stop taking the electorate as computer illiterate fools, market history is a mere click away these days.

          • Edward2
            Posted May 29, 2017 at 5:43 pm | Permalink

            Ridiculous comment Jerry
            You now want to go back years
            Originally you were working post 23rd of June

          • Jerry
            Posted May 31, 2017 at 7:32 am | Permalink

            @Edward2; Not at all when some companies/traders are hedging that far ahead.

  29. Caterpillar
    Posted May 28, 2017 at 4:42 pm | Permalink

    Correction – point c, salary into bank account minus money remaining.

  30. Ian Pennell
    Posted May 28, 2017 at 5:12 pm | Permalink

    “Prosperity, not austerity is what we need. The deficit has been brought to down to sensible levels. Some tax cuts and reasonable spending increases for health and education will help boost the growth rate and bring in more revenue”

    John Redwood,

    Sir; the Deficit is less but it is still there. It means that Britain’s already massive National Debt of almost £ 2 trillion (and 90% of GDP) is STILL RISING. This is NOT good news.

    The entire economy is built on debt, mortgages, unsecured loans, car-finance, credit-card debt, PFI liabilities, Public Sector pension liabilities…these seem to be increasing too.
    David Cameron, I believe when he was still Leader of the Opposition once stated that “An Economy built on Debt is NOT an Economy built to last!”. So true, and the implications so frightening. Note this from the Taxpayers’ Alliance (this was July 2015 so it’s probably more than that now):
    http://www.taxpayersalliance.com/the_real_national_debt_hits_8_6_trillion

    The country needs to live within it’s means and it is so disappointing that the Conservative Government has not committed to eliminating the Budget Deficit until 2025.

    Yet at the same time people are getting more into debt. One way of stopping that is to pay people more (cut taxes, increase public sector spending) and also putting restrictions on people getting into debt too much: Get Mark Carney at the Bank of England to raise interest rates and make sure lenders provide more vigorous credit checks. There is a surge in car-companies offering car-finance to folk who cannot afford to pay (one of these is a good friend of mine who is in real financial trouble through buying a car he could not afford). Businesses need to be able to get government grants, for which they can qualify, rather than loans.

    Of course, all this costs money the Government does not yet have from tax-revenues. So, how about cutting foreign aid, not paying the EU Divorce Bill and cutting green subsidies for starters. That should free up £150 billion over the next five years to cost these and some other popular policies put in the Conservative Manifesto- then use the proceeds from sales of remaining stakes in banks, unused government land/buildings to eliminate the Deficit faster and then- to use some of the increasing tax revenues from economic growth to both further reduce taxes and to start actually paying down the dangerously-high National Debt.

    These are the economic policies the country needs to promote sustainable growth- and, of course, standing up to the EU, more spending on Schools, the NHS, Police and Army- along with tax-cuts would make the Conservatives much more popular than they are (and they would be funded by cutting Foreign Aid, not giving any more money to the EU and some privatisations rather than borrowing more).

    In the meantime, prevail upon Theresa May to leave elderly people’s houses and children’s school dinners WELL alone, but to use the suggested methods of funding the policies promised. Some of the elements of the conservative Manifesto have been disastrous and we need to get back on the front foot. Prevail upon Theresa May too, to prepare for Jeremy Paxman on Channel 4 and warn her in the strongest possible terms not to mess up!!

    The Conservatives cannot afford any more blunders; I trust Sir that you have taken note of the Opinion Polls over recent days: A YOU GOV POLL HAS THE TORY LEAD CUT TO 5%- WE WOULD ACTUALLY LOSE SEATS IF THAT WERE REPLICATED IN THE GENERAL ELECTION!!

  31. fedupsoutherner
    Posted May 28, 2017 at 6:27 pm | Permalink

    I am quite excited. I have just driven down into my local town in S Ayrshire and some kind, sensible soul has a union flag, Scottish flag and English flag flying in his garden. He is either stupid or very brave as where I live you don’t see many English flags. Maybe a good omen??

  32. Turboterrier.
    Posted May 28, 2017 at 6:53 pm | Permalink

    As much as I agree with prosperity over austerity you have to have in place what is going to assist the former. Unless politicians in government address the problems instead of keep coming up with solutions not a lot is going to change. The rich always have an option, they talk with their feet and a quick move on a mouse and the money is somewhere else.

    Government whatever colour has to address the waste that we on the streets see day in and day out. It is not a figment of our imagination. Above all people have to become accountable and sadly if you don’t shape up you get shipped out, no handshake and a good pension package. that is not how it works in the real world. Wasting money on high speed links is only going to be a success when the infrastructure is in place to get the traveller from where they have arrived to where they really need to be.

    At 70 I have never been so disappointed in the way our leader is running this election it is as if she wants to lose let Labour and the SNP get in do their worst as they always do and then we get back in to pick up the pieces. Whoever is advising her should be sent home to do the gardening forever. There are too many really credible members on the back benches who should be elevated to the front benches to prove their ability and above all get this country going forward as the opportunities that are on offer dictate the real way forward.

    • fedupsoutherner
      Posted May 28, 2017 at 9:35 pm | Permalink

      @Turboterrier

      I couldn’t agree more!! We have some intelligent and bright people on the back benches. JR is one of them but where are they? Why do our leaders always pick those who seem to have no idea of what to do next? Where are the likes of Owen Patterson, David Davies, Dominic Raab? Where are the true Conservatives? They need to be heard urgently before the UK is plunged into a crisis led by Corbyn and that dreadful Abbot woman. For goodness sake get the message to May.

  33. margaret
    Posted May 29, 2017 at 4:37 pm | Permalink

    Whilst away I watched the BBC world service.Wonderful broadcasting…it reported a glut in barrels of oil

  • 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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