Over the next few days I want to explore work.
Both the Labour and Coalition governments of recent years say they value work. They urge everyone of working age who can do so to get a job. They want people to take financial responsibility for themselves and their families.
The arguments between them are not ostensibly about the aim, but the effectiveness of their chosen policies. The Coalition has said it is concentrating on making it more worthwhile to work, and easier to create jobs. It has cut Labour’s planned National Insurance hikes, and cut income taxes for the low paid. That is all helpful. Labour favoured paying more in work benefit to subsidise low wages subject to taxes.
However, the cruel paradox is both in government have carried on taxing both job creation and earning. Both are strongly in favour of taxing people who choose to work long hours and take business risks, claiming that high earners should make a bigger contribution to tax revenues. They thought a higher rate would bring more tax revenue, but it brought lower revenue instead.
Taxing things does deter people from doing them. Governments tax smoking, drinking and driving because they see these things as wrong. They wish to reduce the amount of them that takes place, and punish the people financially who do them. The more government tax job creation, earning and effort, the less they should expect of each of them. The irony is they need the hugh tax revenues from them to subsidise the low net pay people earn after tax or to pay people not to work.
The Coalition says it wishes to break into this mad cycle. It has had some success in creating a climate in which the private sector has created a lot of extra jobs. It has had modest success so far at reducing the rate of new inward migration, so more of the new jobs go to people already here and on benefits. The next stage of this programme may need lower taxes on earning and job creating to give it more impetus, and more action to tackle EU as well as non EU migration.
January 2, 2013
Why do you refer to “inward migration” or just “migration” instead of the correct “immigration”? Immigrants don’t get any fewer more’s the pity via this euphemism. Is there a EU law that says you must do this? That question may (I hope) be ridiculous but on the other hand, from the EU, maybe not.
January 2, 2013
@Leslie Singleton: Immigration is a permanent relocation, migration (most often economic migration) is not necessarily so – of course at what point a previous migration might turn into (legal or otherwise) immigration is a point up for debate!
January 2, 2013
Jerry–I am not sure I agree with your definition but in any event I reckon most “inward migration” is pretty permanent, definition or not.
January 2, 2013
Despite the propoganda most immigrants are taking the low paid jobs or go directly onto benefits. They are net recipients of English taxpayers public funded services for health, housing, education etc. Its the policies of madness that each mainstream party has followed at our EU/UN masters dictat to suppress feelings of nationhood for the last 40 years by removing its own population. Thanks to LibLabCon London is the first of many examples where we are now a minority in our own Country.
January 2, 2013
Timeaction
Ever visited Southall or Bradford ?
January 3, 2013
Yes, I think we know the success of the unwanted multi-culti experiment that will come back to haunt this Country big time at some point in the not to distant future. Who will the politicos blame then? It is definately time for a change fron the tired old parties who have and continue to defy the electorates wishes accept with undelivered promises at election time! Action on the big issues of the day? No lets talk Gay marriage and Lords reform and the merits of foreign aid…………….
January 2, 2013
I don’t think that we should be trying to limit immigration, but Britain is currently far too eager to hand out benefits to newcomers. If, say, the new universal credits were something that needed to be “earned” then the immigration “problem” would immediately cease. I would suggest that for every full year of taxes paid a person could accumulate 1 months worth of UC eligibility, possibly allowing for a year of full time education or pre-school age childhood also gaining a month (so a native 18 year old school leaver would have 18 months of eligibility banked to help them find their first job). Once the UC ran out we could still support basic benefits via, e.g. a system of food-stamps.
R.e. taxes, the idea that somebody on the so called minimum wage has to pay income tax is pretty absurd. The coalition has made some progress here but needs to go further in tying the lower bounds of income tax to the minimum wage. It would also help matters if separate National Insurance payments were abandoned and these were rolled into the general income tax (this is how they are treated by HMT anyway, so it would be more honest as well as more transparent).
January 2, 2013
There are far too many people in this country who think that money grows on trees. You can hear them on radio and TV every day – the government should do this and the government should do this. You never hear them being asked – where is the money coming from?
Everyone should pay income tax, no matter where their income is coming from. Perhaps then they might begin to wonder where the money comes from.
As far as foreign nationals are concerned – no tax-payer funded benefits or services at all until they have a record of paying in to the national kitty.
January 2, 2013
They tried that with the Poll Tax but look what a furore that created amongst the “bleeding hearts”.
By all means encourage employment by making life easier and simpler for the 95+% of all EU businesses. The larger fish can look after themselves with their in-house lawyers, accountants, etc.
The UK needs the equivalent of the US’ “Small Firms Administration” with the power to veto any propsals which will impact most severely on the little guys.
Please also do not confuse earning income with the much-vaunted “living wage”.
January 2, 2013
“There are far too many people in this country who think that money grows on trees.”
Indeed and an awful lot of those who think that money grows on (someone else’s tree), either as private citizens or a corporate entity, think that someone else should be paying their share of the tax burden from such trees…
January 2, 2013
My understanding is that EU regulations would not allow this for EU nationals. Unless we change the system so that most benefits, for most of our own people are contributions-based too. My feeling is that this would be a good thing and we will need to do it sooner or later anyway.
January 2, 2013
The problem with your solution is that it fails to address why people are unemployed and instead punishes them for being unemployed. As long as there are 2 million more unemployed people than jobs available there will be 2 million people who need benefits. This will not change no matter how much you abuse people for being unemployed.
Another problem is that if the immigrants are coming to the UK to take the low paid jobs then they’re the ones who’ll be able to claim benefits while the British suffer from a lack of jobs and benefits.
January 3, 2013
But there aren’t 2 million more unemployed than jobs available. There are plenty of available jobs, and what about working for yourself and creating your own job. This is one of the major problems we have people talk utter nonsense about the world of work. Right now we have the highest number of people in employment ever 29.2 million there were more than 7.1 million UK based jobs advertised on Internet job boards in the last 12 months and there are currently more than 600,000 unfilled vacancies in the last month .
There is no reason to be unemployed unless one suffers from a very very serious debilitating illness or health issue
January 3, 2013
Firstly there are about 450,000 jobs available and 2.51 million people unemployed, so there aren’t plenty of jobs available.
Secondly unless there is a demand for the type of work a self-employed person is doing they won’t make any money. This solution also won’t work for people who have very few skills.
Thirdly employment is at its highest because the population keeps growing, not because it’s easy to find a job.
Fourthly companies and agencies advertise the same job on multiple job boards, so the number of jobs is artificially boosted.
Fifthly unless there’s a job that you can do in an area you can commute to it’s the same as having no jobs available.
Sixthly you’ve ignored that there’s a high level of competition for every job because there are more people unemployed that there are jobs.
Your delusions that there are enough jobs available and that people who are unemployed simply aren’t trying hard enough doesn’t match the real world situation.
January 6, 2013
Sensible ideas, ian.
Perhaps we should actually making ‘National Insurance’ a proper insurance premium and if you haven’t paid in you get a lower benefit or only in-kind benefit.
January 2, 2013
Saying you value work is one thing, effectively making social security a safety net rather than a lifestyle choice is another thing altogether; my personal bete noir is social housing. I know a young ‘lady’ who due to some fairly liberal and morally flexible concepts of procreation now enjoys some really lovely Ascot accommodation that would cost me some £425K. Given that this is owned by a housing association with controlled rent, she is unlikely to be affected by the IDS reforms.
Add that to punitive tax rates on the low-paid and we are can perhaps be forgiven for thinking, like so much else from politicians, the rhetoric doesn’t entirely match the reality.
January 6, 2013
Housing benefit has just created a massive dependency culture amongst landlords and housing associations. We need more affordable housing that people in work can buy. It is time for an imaginative housing policy that encourages home ownership now that Brown’s housing ponzi scheme has blown up in our faces.
January 2, 2013
“more” action to tackle EU as well as non EU migration – what actual actions have the Government taken on EU migration? The problem is many of the jobs these migrants take are subsidised by other tax payers, through tax credits etc. as they simply do not pay enough to cover the living costs and public services provided to the worker’s family and it pushes the other workers pay down too.
We all know what is needed to create jobs – we need a much smaller state sector, fewer incentives not to work, fewer taxes on those who do actually work and those businesses who create the jobs. We also need less and better regulation everywhere, sensible banking and some cheap energy.
This lefty, pro EU, quack green, Government is doing almost nothing in any of these directions.
January 2, 2013
Helping keeping wage bills down and allowing large corporations a free ride on tax is lefty? I suppose it is. Communism for the rich no less.
January 2, 2013
I would like to know how any government can control the EU immigration which is set to increase when is it Bulgaria and Romania? Have freedom to enter the UK? Shortly will this be part of our new arrangement that we hope for?
What arrangement do Norway and the Swiss have with the EU?
January 2, 2013
Brian,
With unemployment benefit, we could adopt the Spanish model (which should be EU legal, as they are also in the EU).
Quote from Expat website about Spanish Unemployment benefits:
‘The situation is fairly simple, for 6 months you get a percentage of your pay. You then get a reducing percentage for 18 months. After that everything stops and you are on your own. For working 2 years you will recieve around 8 months dole (4 months per year worked).’
But, pay nothing in, get nothing out.
And, work on-the-black (cash), get nothing out.
Does Spain have the same reported immigration issues the UK has?
January 2, 2013
@Stu H.: That would be why there are homeless people on the streets of Spain, crime is on the increase and there has been riots in the streets. If you want to start a revolution in the UK you might have found the spark, the riots of 2011 (and those of the 1980/90s) might end up looking quite tame, after all people who have lost everything have little left to loose, in fact a warm, dry prison cell and three square meals a day might actually be an improvement.
January 2, 2013
Given the high levels of unemployment in Spain (especially youth unemployment) and the poor state of their economy I doubt this is a system the UK should adopt.
Why not just adopt the welfare system used by countries with strong economies, such as Germany?
January 2, 2013
@Brian Taylor: “What arrangement do Norway and the Swiss have with the EU?”
Both are members of the Schengen Area!
January 2, 2013
Oh well we certainly do not want to be a Greater Switzerland, do we. It might upset Cameron? We might all turn into Gnomes (of Zurich) or something if we did. Or perhaps just much richer, with better health care, lower crime and with a sound currency too. We would not want that would we Dave.
January 2, 2013
Yes, I see That the National Press have now woken up to the fact that Benefits have for the last 5 years, risen by a larger percentage than wages.
Does work pay?
Not at the moment.
I also note that it was reported over the last few days that there are a number of families getting more than £50,000 (tax free) per year in Benefits, but are still getting Child Benefit.
Why, when workers who on on £50,000 (taxed) income per year, have had their Child Benefit taken away.
Does work pay ?
Not at the moment.
January 2, 2013
We want more in work so they get benefits to rise much faster than pay – good plan Osborne!
January 2, 2013
Good plan as many also claim befits to top up low wages and they ain’t getting a pay rise from the employers no matter what.
January 2, 2013
You’ll find that pay for directors in FTSE 100 companies has risen at a faster rate then benefits have. Also reducing in salaries in the public sector have brought down the average.
Regarding those earning £50,000 and those getting £50,000 in benefits you’re not comparing like with like. A person earning £50,000 will lose their child benefit but a household where both adults are earning £39,000 will not. So if the unemployed family is getting £25,000 per adult (£50,000 in total) they should be treated as two adults earning £25,000 each, not one adult earning £50,000. Thus there’s no contradiction.
January 2, 2013
I see reported today (Daily mail) we are now giving foreign aid to Iran.
Please, Please, Please, can we stop giving our hard earned money (taxes from the working) to foreign despots.
What is it with Cameron that he loves giving money away to almost anyone (abroad or not) but the hard working in this Country.
Does working pay ?
Not at the moment.
More tax, more spending, more waste !
Please, Please, Please, can someone get a grip.
Looks like 2013 is going to be contuinuity 2012, 2011, 2010, 2009, 2008.
Brings to mind the lyrics of an old song.
One year older and deeper in debt.
January 2, 2013
“What is it with Cameron that he loves giving money away to almost anyone (abroad or not) but the hard working in this Country ?”
Same reason that big company CEOs spend company money on sponsoring sporting and artistic events – personal aggrandisement and the approval of their peers in the very narrow social circles they move in.
January 2, 2013
I also see, in the paper today, that we are giving £Millions to encourage the production of Welsh books that no one wants to read.
Sounds like a vital service, to be protected at all costs, to me.
January 2, 2013
Please, Please, Please, can we stop giving our hard earned money (taxes from the working) to foreign despots.
Its worse than that. This is not hard earned money taken from taxes, we borrow money to give it away.
January 2, 2013
This is a very good question. However I have one of my own and would dearly have loved to have put it to one of the socialists when they wanted to fight capping benefit at £26k net.
If I work full time, what am I entitled to over and above someone of working age who doesn’t?
Why don’t unions back high tax rates by demanding overtime paid at a lower rate to the basic rate of pay?
January 2, 2013
If I work full time, what am I entitled to over and above someone of working age who doesn’t?
Nothing. Just because you have a job doesn’t entitle you to earn more money than anyone in the UK who doesn’t work. Especially when the unemployed person lives, though no fault of their own, in a high cost area with few jobs.
Why don’t unions back high tax rates by demanding overtime paid at a lower rate to the basic rate of pay?
What does lowering overtime pay have to with supporting high tax rates? You’d be paying more at the higher tax rate if overtime pay was higher than regular pay.
January 4, 2013
So if working entitles you to nothing more than someone who chooses not to work, and you must live in a fantasy world if you believe that unemployment is not a lifestyle choice for some, then what is the point of working.
If everyone decided on mass to put their feet up and live on benefits, the system would break. Luckily many people would be ashamed of themselves to feel any job below them and contribute to a system others “choose” to abuse.
So if your ideal society of being no better off working than not comes about, how do you plan to fund it?
The point of lower overtime rates, is the inverse of the logic. Higher overtime was to encourage the work to be done. How dingbats can then believe that higher tax rates do not discourage work seem to fail a basic intelligence test.
A flat tax of whatever figure, say 30%, would still leave an individual on £100,000 a year contibuting 4 times a person on £25,000 a year. This ridiculous higher rate of tax leads to people such as “Lifelogic” moving abroad but possibly more common is people like myself just doing less, and thus not replacing staff that leave to allow business to become smaller. Losing further tax revenue to the exchequer in income tax of the extra employee, VAT and corp tax. And in the last year I haven’t seen any competiton taking up the slack, so the work, that there is demand for, is not being done. Customers just wait longer, oddly enough making me more profitable in terms of time and effort. So thank you George Osboure for helping me make the decison for more leisure time to avoid your 60% tax at £100,000 (research loss of personal allowance. its not as sexy a news item as 50% tax rate).
January 2, 2013
There are those who patently do not want to work, and not enough is done to penalise them.
Then there are those over 65 years who are faced with a penalty for wanting to work and in many cases doing so in spite of the deterrent; that is the income limit of £25,400pa. When earnings exceed this, the personal tax allowance is reduced by £1 for every £2 pounds earned above it. Why should this be so? Is £25,400 considered rich, and thus a mean minded attack on those who wish to work and social engineering aimed at ensuring those younger can get the same job. We know it doesn’t work like that.
Generally as a start labour laws should be loosened, making it easier to hire and fire and increasing labour mobility, the tax threshold raised significantly, say to at least £15,000 initially, and the minimum wage abolished, these latter being done together. This should help youth unemployment and make it easier to get a job for the first time and then move onwards later, maybe very quickly.
January 2, 2013
Turning everyone into a part time wandering minstrel working for pennies with the state picking up the tab in benefits and tax credits? Yeah, Thats worked in the past. Just silly.
January 2, 2013
Removing the minmum wage would be a totally wrong decision. We need the minimum wage to be moved closer to the living wage. This should be aimed at the over 25s with a graduated rate from the current minimum wage for 16 year olds.
The extra money raised from taxes should be used to increase employers’ NI boundaries so that they are compensated for the increased costs. This would also help to improve employment levels particularly of the young.
January 2, 2013
If you do that you price people out of the labour market. The bar is put too high for them to clear it.
January 3, 2013
Maybe employers are pricing themselves out of the labour market with low wages? Thought of that one?
January 3, 2013
It a company can only survive by using cheap labour then it’s business model isn’t viable.
January 3, 2013
Uanime5
Your absolutely right.
Thats why they shut down in the UK and go abroad where it is cheaper to operate.
January 2, 2013
Tax cigarettes to discourage smoking
Tax cars to discourage driving
Tax drinking to discourage drinking.
Tax working ….
January 2, 2013
Yes, tax cigarettes to encourage a thriving black market thus providing less money to the exchequer,
Tax alcohol more in order to follow the tobacco plan, resulting in a decrease of revenue to the Treasury.
Create smoking bans resulting in closed pubs, bingo halls and hotels, resulting in less revenue from businesses and much higher unemployment.
Good plan eh?
January 2, 2013
Thousands of pubs and clubs have closed making over 150,000 staff unemployed. The loss of PAYE, corporation tax, VAT etc and the cost of unemployment benefit must have cost the Government and taxpayers tens of billions of pounds.
January 2, 2013
Very funny. It’s just sad that it really is that simple.
There used to be a sign in a pub I know that went along the lines of:
If you tax people to work and pay people not to work then what do you expect?
January 2, 2013
and pay people lots to encourage then not to work – sounds like a good plan to me.
January 2, 2013
Pay them very little to work and the plan is compete.
January 2, 2013
There is a growing lobby to tax food (BMA) because fat people cost the NHS more than smokers.
After that I think there should be a tax on air. People expel carbon dioxide, a green house gas so we should tax to discourage such activity.
Maybe people who partake in sport should be taxed a higher rate for their carbon footprint. Olympians should get a 50% tax rate on their cubic air expulsion.
Tax credits should be given to people with blue lips to encourage conservation of the air, how very green.
Then maybe slap a temporary levy like the bank tax on pregnant women for bringing in another carbon dioxide expelling item into this world. Infact lets add pets to that green tax.
Another bright idea would be to tax books to encourage people to use the internet like Amazon.
January 2, 2013
One of my biggest bugbears with taxes on my income is the amount that goes in subsidizing those whose employer(s) does not pay them a living wage.
Now that opens up the whole can of worms about what is a living wage.
But it is something you must include if you’re going to examine the whole picture.
As for your statement about the government taxing things it sees as wrong, -driving.
No it’s because it sees it as a cash cow that can be continually milked!
January 2, 2013
Barnacle Bill ,
Trouble is almost all politicians think the answer is to increase the minimum wage .
Only one politician that I know of , Campbell Newman out in Queensland , has deduced that the problem is the cost of living and has gone on record as saying he wants to reduce it .
Govt could reduce the cost of benefits by generating a surplus of housing which would reduce the cost of accommodation both by changing the balance of supply and demand and thereby lowering the living wage .
All we ever see is Ricardo’s Law of Rents in action .
Why should I as a medium earner give my money to rich landowners ? (via benefits to the less well off who are their tenents) .
January 2, 2013
Reducing the costs of living that would be a novel exercise for government both local and central could ponder and act on?
Why tax at extremely low levels of income and then QE/print money to pay benefits? Surely it would make more sense to remove NI&Tax.
Council Tax is quite a burden when compared to income levels? What do local councils do that cant be done centrally/co operatively and reduced in cost?
Another question why save in the normal way in a rigged plutocrat economy?
January 2, 2013
The problem is with the benefit system rather than the agreement between two parties to supply work on the one hand, for a given fee on the other. If you buy a car for £10000 and someone comes up to you and says, “you’ve paid too much, here’s £2000 against the money you paid”, you’d consider yourself lucky, but it would be wrong of you label the salesman a thief. The same is true of the benefit system. If you are a socialist or a fascist, you will either shoot the salesman, keep the money and give away the car, or shoot the salesman and give the car to community. At best, you would charge the salesman the ‘subsidy’ of £2000 and make him pay up, and hey presto, it becomes very difficult to buy the same car for £10,000. We either have a market economy or we don’t. Wake up, smell the coffee…..
January 2, 2013
Not just your taxes to subsidise the employers but those same employees then drive inflation for you because they have more spending power. You are in effect charged twice with your own money.
January 2, 2013
By what right does any government decide what is right and what is wrong? Are politicians particularly blessed with higher intelligence or morality than ordinary mortals that have to drive a car whether they like it or not? Do they have ownership of another persons body so that they can tell them what drugs to consume and how much exercise to take?
I say governments have no such rights. Taxes and laws should be restricted to preventing aggression against another person or their property. They should never be used to foist a particular moral or political viewpoint on people that do not share it. Whilst our society may not be advanced enough to do without state control of some things it should be much less oppressive than now and a good way to do that is reduce tax theft.
January 2, 2013
The question is whther the politicians should be influencing people like my neighbour who insists on driving to work every day when it is cheaper and quicker to go by train. His parking fees equate to the daily rail fare and it takes about fifteen minutes less time by train on a rarely crowded service that runs every fifteen minutes and is much less subject to delay than the road journey.
January 2, 2013
David
He pays his money, he takes the choice.
He probably does not like crowded trains with people coughing and spluttering all over him.
January 2, 2013
Given that the Government is democratically elected to make laws, especially criminal law, they have every right to decide what is right and wrong. Whether their decisions are right or wrong is another matter.
January 2, 2013
Indeed it has been a mad cycle. The difficulty in employing school children in part-time jobs has made them far less ready and willing for the world of work too – coupled with knowledge about what is available to them from the government and being expected to stay in schooling into their twenties it is no wonder that many do not make good first-time employees. No wonder employees prefer foreign labour.
Some blame this on the comprehensive education system but the general message to children for a long while has been “You are not wanted and you are not needed. You can play instead.” we will park you hither and tither for as long as we possibly can. The creation of vast numbers of university places has been part of this. The general mood at my son’s school (a very good one) is “We are not wanted and not needed.”
Very sad indeed.
A slight diversion if I may. From the subject of tax ‘nudges’ you mention against driving and particularly drinking and smoking …
Many influential politicians wish to see cannabis legalised. Presumably they would see this habit as a bad and unhealthy thing and wish to tax it punitively too and if not why not ? How else would they encourage people to use less of it ?
Perhaps they would like to see it prescribed through the NHS and available to benefit recipients who are classed as disabled through addiction and unable to work. A huge bill for the taxpayer.
Either way there would be a tax levied on legalised cannabis would create new niches for gangsters as it has with tobacco, vodka and red diesel. These gangsters would not revert to honest means simply because their product has become ‘honest’ – gangsters exist to cheat whatever system is put in place.
January 2, 2013
Correction: “No wonder *employers* prefer foreign labour.”
January 2, 2013
It’s not a war on drugs its a war on personal freedom. To quote Bill Hicks and is fundamentally true and is the main body of government drugs policies. Criminal gangs engage in whatever makes money and the supply of cannabis is already mostly in the hands of organised criminal gangs. The cottage industry is myth. It is often bolted onto harder drug smuggling and production. The dealers of cannabis are often to afraid to deal in hard drugs, though by connection you are more likely to come into contact with them because of this. Criminal gangs do not pay taxes except to each other. Employers are more willing to employ foreigners due to the fact that they are more desperate, younger and often more educated and fleet footed than than the British worker. Like here, the less able stay in their own countries. The idea that East Europeans are harder working is a lie and a fantasy.
January 3, 2013
Bazman – Is not punitive taxation an attack on personal freedom ?
I’m afraid I’ve detracted from Mr Redwood’s main point. Sorry.
I fail to see how legalised cannabis can be treated differently to tobacco in terms of its ill effects on the lungs and to bystanders. Then there is the added hazard of damage to the mind – yet alcohol is being taxed punitively to restrict its use for this, among other, reasons.(Ostensibly of course)
Mr Redwood’s excellent point was that tax was being used as an effective disincentive against such activities – yet we tax people for working !
People either stop doing it or go ‘black market’.
If we don’t tax legalised cannabis punitively then everyone will just stay at home and smoke dope !
Big John – Apply my comments to any drugs they want to legalise (it’s all of them as far as I know.) Cannabis is a bad thing in my experience. Richard Branson is going to have to agree with me or his transport businesses will go bust. At the moment air and train crews are tested for it randomly and this is because it is known by the medical authorities that impairment of judgment can persist weeks after it has been taken.
“My train drivers and airline pilots are now allowed to smoke cannabis because it is legal to do so.”
It’s just not going to happen, is it ! For all his proclaimations about the harmlessness of the stuff safety-critical workers will be fired if they are found using it.
January 3, 2013
I suppose that my comments here do tie in with Mr Redwood’s post “Do we value work ?”
Children are not taught to value work. Particularly not dirty work.
The push towards legalising drugs and dependency does not value work either.
January 3, 2013
No job could be seen as an attack on personal freedom. See how free you are without money.
Cardboard over Paris anyway. It’s not a war on drugs its a war on personal freedom. Any attempts outside reducing drug consumption other than prohibition is not seen as a viable way and in fact should not even be talked about. As for cannabis staying with you this is true, but for weeks? Who says and what proof is there? Drink a lot of alcohol and you can be mashed badly for days later without any alcohol in the blood. Funny now Branson has little to say on that one huh? My experience is that it’s not both are not particularity good for the mind in the short or long term. I would say by experience that cigarette smoking is not good either and interestingly have read there is some truth in this. Put that on a bottle of spirits and how dandy will you be in three days time? One light spliff three weeks ago? Branson’s moralising can ram it. What else will he checking for? Arguments with the wife? Kids playing up? Cold? Yeah! Cold. driver feels unsafe due to bad cold and needs a the day off? Wonder how far that one would go with Branson and his cheerleaders? Ram it.
January 2, 2013
And yet perversely 65 year-olds + are being made to work longer in order to qualify for their pensions, and they end up paying taxes used for benefits to teens and twenty somethings.
All under this Coalition Government.
January 2, 2013
I can’t see Cannabis been legalised, in an attempt to try and raise tax on it.
The only way I can see it work, is if the tax is very low, and the quality of the taxed product is very high.
The problem is, anybody can just grow it, so it would be difficult to enforce a tax on it, that users don’t currently pay.
January 2, 2013
Anybody can homebrew beer or make wine.
January 5, 2013
Not everybody can drink it though.
January 3, 2013
Please see my comment to Bazman
January 2, 2013
Employees want foreign labour because they’ll work for less money, will tolerate worse working conditions, and often cannot report these employers to the police due to fear of deportation. The result is lost generations of British employees and a loss of skills when the immigrants return to their home countries.
January 2, 2013
Readers may care to spend 5 minutes listening to this interview on LBC it is very illuminating:
http://order-order.com/2012/12/30/on-the-dole-because-he-didnt-want-to-get-up-at-800-a-m/
January 2, 2013
Well the problems you describe have multiple issues. For one most of the ruling political elite don’t actually know anybody in, or have any real experience of the reality for large proportions of our population. The rhetoric is all unbalanced. The small encounters the likes of IDS had which formed their opinions are no substitute for real in depth experience and knowledge.
It is pointless telling people on a large social housing estate with no jobs within travelling distance that work is a good idea.
I know a number of folk who inherited significant wealth and decided to give up work pretty much as soon as the money hit their bank accounts, they don’t seem to be any less healthy than the rest of us, for them work is not a necessary part of a fulfilling life.
Then you have tax as part of wider social manipulation. This idea that changing peoples behaviour by changing the incentives in the tax regime is all for the good. Putting British manufacturing employees out of work by taxing pollution simply transfers jobs to India and China and does nothing to reduce worldwide pollution is one example where the political class have it badly wrong.
Re “They want people to take financial responsibility for themselves and their families.” Yes and I for one would be independently wealthy with no need to call upon state resources ever if the state had not stolen and wasted large parts of my earnings over many years.
Re “more worthwhile to work” as far as I can see we have a large new benefits IT and business change programme initiated by IDS which is likely to crash and burn and waste more public money and ongoing crazy policies which disincentivise decent honest hardwork at all layers of society. So hardly a success. I could have implemented the changes IDS needs in a couple of weeks using a much simpler approach.
Re “easier to create jobs.” Easier to import non European workers, keep them in servitude, pay them less and give them worse conditions, and disincentivise hiring and training Brits. Together with a blurring of what it is to be British by handing out passports to foreign nationals far too freely.
Re “Labour favoured paying more in work benefit to subsidise low wages subject to taxes.” The bigger problem is all the main parties being in favour of subsidising housing in areas where there will never be a ready jobs market again, and refusing to allow folk to gravitate towards areas where the jobs are by putting the incentives in the system tied to housing.
Re “strongly in favour of taxing people who choose to work long hours and take business risks” most high earners are not working the long hours the folk working lots of overtime in the bottom quartile of earnings do. So this is a confused set of rhetoric. And simpler risks such as moving address for work are heavily disincentivised, from sending your family to the beginning of an NHS queue again, to offering you less favourable housing options.
Re “claiming that high earners should make a bigger contribution to tax revenues” depends how you define high earner, makes a big difference to this sentence. And ignores that much of our wealthiest folk are just there because their parents were in the same position, they are NOT there by and large through decent hard work in a meritocracy by their own hands. Here the whole equality debate has lost the plot and enforces the worst kind of mixed up political correctness which actually endorses widespread discrimination against large parts of the population.
Re “modest success so far at reducing the rate of new inward migration” does not map to my day to day realities.
For me we need to 1 push for a proper meritocracy 2 push for real equality for all Brits 3 protect our own wealth including intellectual property and fight for it internationally 4 tax foreign workers in the country at least as much as Brits 5 level the playing fields to encourage geographic mobility within the UK 6 go to a simpler and lower tax structure together with much lower and more efficient public spending BUT IN A WAY WHICH ATTACKS LABOUR BY FOR INSTANCE OFFERING BETTER HOUSING, SCHOOLING, AND HEALTHCARE FOR ALL
January 2, 2013
Absolutely agree, John.
As long as both parties insist on policies that make it harder and harder to both create new jobs and to find gainful employment, when they say they value work they are, in practise, lying.
If someone truly values something, they try to make it look more attractive, easier to do and they try to encourage more people to do it, as you say.
Almost the first thing this government did was to nod through Harriet Harman’s job destroying ‘equality’ legislation that is more likely to create ‘mud hut equality’ – where everyone is reduced to poverty – than help people find work.
The ‘Green Agenda’ that increases the costs of energy to no good purpose, the lack of serious tax reduction, the continuing high price of fuel & the escalating price of transport, the lack of immigration control (An over-populated nation will always have high unemployment), the taking away of child benefit from anyone earning a middle or higher income, the money printing that diminishes the value of all income in the first place… these are not the policies of a government that values work. At all!
January 2, 2013
The private sector has created a lot of part time low paid work after getting rid of a large amount of full time well paid jobs. A lower rate of VAT would do the most to help jobs and lower living costs. I want to see some proof of the jobs created by giving tax breaks to the rich and not just dogma from the bleating wealthy minority who will pay or leave.
January 2, 2013
The private sector hasn’t “created a lot of part time jobs after getting rid of full time workers.” They have just responded to you consumers and your requirements.
Many businesses are now open 7 days a week and many are open for extended hours each day.
If you were ever to run your own business, you would soon realise that you need extra staff and part time staff, just on a Saturday or just on a Sunday or in the run up to Christmas or at the January sales. Just to give you a few of hundreds of examples.
And part time working suits many people who do not want full time work.
January 3, 2013
The private sector hasn’t created a lot of part time jobs after getting rid of full time workers. That has not happened has it? Yes it has as you say due to falling consumer demand because of the recession as well as 24/7 operating times.
Many of the new jobs are part time and pay less despite there being less unemployment there is underemployment and less money in the economy.
Some may well be happy with part time work or pin ‘money’ by far the majority want full time work, more hours with security and rights. They do not want to be wandering minstrels for any company.
You believe your own and the right wing press propaganda.
January 3, 2013
But that just gets us back to where we came in…..
My simple point was that businesses are just trying to survive and to do that they have to satisfy their customers requirements.
And the modern customer is a very demanding and well informed person.
For example, if customers want to come in mainly at weekends then you need part time staff, not full time.
There isn’t a deliberate conspiracy against the workers, if there were opportunities for full time work, businesses would offer those jobs.
Try running your own small business and see what happens.
If you ran a business with only highly paid full time staff with “security and rights” you would soon end up bust if your competition undercut you.
January 3, 2013
The market has got tougher consumers demand more for sure especially when money is tight, but many large companies like supermarkets are trying to maintain profit margins, often at the expense of wages and conditions. Not for the managers though, they get a rise to implement these cuts. You seem to be under the impression that the markets sets the wages for the employes and the price for its products in all cases.
January 3, 2013
Bazman, “I want to see some proof that jobs have been created from all these tax breaks…..”
Well its difficult to show proof but coincidentally :-
http://www.telegraph.co.uk/finance/economics/9616134/Private-sector-jobs-put-record-numbers-in-work.html
January 3, 2013
You seem to have ignored that there’s more people in work because the population is the largest it’s ever been. When you compare the percentage of people in employment to the percentage of people unemployed a different picture emerges.
January 4, 2013
No, uni, I havn’t ignored that fact at all, I am well aware of it.
The article I’ve quoted clearly shows both the percentage and the numbers have improved.
Now whether this improvement is a temporary thing due just to the effect of the Olympics, we will have to wait and see for the next lot of statistics.
January 2, 2013
When we had a much smaller state, a much smaller proportion of people at the lower level of earnings paid income tax at all. We now face a double dilemma in a dependency culture from which is hard to break away when there is often a cost in doing so. Nothing new there, but given that for many years, all governments have declared a wish to break the problem, why do they fail?
Based only on empirical evidence, the availability of welfare as a lifestyle choice is the root cause. It is not that welfare is too generous, but it is seen by many as a valid, acceptable, and manageable option. Moreover, those who learn how to work the system do comparatively well on it.
No government has been tough enough to say no to those who choose dependency. Until a government does so, nothing will change.
January 2, 2013
Pure right wing fantasy. As long as there are more people unemployed than there are jobs available people will continue to be dependent on welfare through no fault of their own.
If anything has made people dependent on benefits it has been the actions of big businesses to continuously reduce wages to such as low level that people can no longer survive without benefits. Until working full time means earning enough money that you don’t need benefits, being on benefits will continue to be viewed as acceptable.
January 3, 2013
The drive to lower wages has gone on since before 2000. Is the employee to continuously costs in order to maintain profits for shareholders, and managers especially, at the expense of the taxpayer? No austerity for them.
January 4, 2013
Your experience of managers doing well out of conspiring to reduce staff numbers, hours and pay is very different to my experience where managers have been the ones being “let go” and have suffered the most in comapnies cut backs.
January 2, 2013
As a society we over value work.
All families should be able to work sufficiently to be comfortable. The obsession with GDP and consumerism drives us all to work far harder and longer than really necessary.
Government taxes us to spend on non-governmental issues (assume that defence, education, pensions [which would be less of a liability without so many “managers” in the public sector], health and law and order are governmental issues) and needs the economy to grow to allow it to fund its unrealistic promises. By spending outside its remit government increases the cost of living for all as they do not get value for the spend while providing private landlords with increasing rents [yes still]!. If government reduced by half the populace would be better off in the long term as we would not have to contend with such high inflation and taxes. Then if society could just wean itself of constant upgrades for technology (including cars) we would not need to prostrate ourselves for our employers to quite such an extent.
I am prepared to work (although by choice I would hunt and gather in my own time) I am not prepared to be enslaved.
January 2, 2013
They don’t tax smoking,drinking and driving to deter people – its an easy way to extract money from the ‘suckers’ who stand for it.
In the same way they wish to legalise drugs – easy money.
January 2, 2013
This and the government before it only ever supports the “under dog” – people who do not work and who draw benefits. They only ever talk about the “poor”. They never support the people who do the right thing – work, pay their taxes and save. What is it about people who go into government that makes them so against the people who keep this country going – just! It is about time a true Conservative government got in (and I do not mean Cameron in any guise) who supported working people as they are the backbone of this country and it is only through them that Britain will have an economy which grows. And about time too.
January 2, 2013
You use the term “new inward migration” in order to make it clear that this is not “net immigration”. Of course most people are no longer fooled by the “net immigration” lies and obfuscation used by the majority of politicians when reluctantly discussing the subject of immigration.
The political language for “immigration speak” is slowly changing for the better but the essential action that is required is still a long way off and is very unlikely to be implemented unless the catalyst of a severe economic upheaval occurs.
January 2, 2013
The easy part of this conunudrum is immigration. Immigration per se, is not the problem. What is wrong is immigration in numbers beyond the ability of the economy to absorb them.
The core problem to which you allude, that of properly valuing work, requires more radical solutions. To my mind, the answer is pursuing further the process started by Mrs Thatcher & Geoffrey Howe – shifting the burden of taxation from direct to indirect taxes. It’s perfectly possible to progressively finance a major uplift in personal allowances, re- introduce a married persons allowance, lift the threshold at which the 40% tax rate kicks in and abolish employees NIC if all the current exemptions from VAT are abolished (excepting Council Tax – no point in having a tax on a tax). Higher personal allowances would shield the low paid & exemptions could, if necessary, be introduced to exempt gas, electricity & water from VAT for Band A Council Tax homes. All home sales (new build & existing) would be brought into this but stamp duty would be abolished (to avoid double taxation).
The VAT does not have to stay at 20%. It could be cut significantly to compensate for the extended VAT base. Food companies were expecting this Gov to introduce VAT on food at the start of its tm & were pleasantly surprised when the Gov bottled the decision. There are potentially by big savings in “back office costs” from reducing the number of taxes and the costs of tax administration.
The only difficulty is inflation linked benefits, although cutting the rate woud soften the impact on inflation. The link would need to be broken but this would just incentivise not in work to take work.
January 2, 2013
The whole plan is based on regressive taxation of the poor, as indirect taxation is, and how does making people more desperate create jobs? Do tell us what VAT in not on. Food? Oh really? You know this is mostly not true don’t you and is often on food that the lower members of society buy.
January 2, 2013
The only difficulty is inflation linked benefits, although cutting the rate woud soften the impact on inflation. The link would need to be broken but this would just incentivise not in work to take work.
Only in your delusions will this work. In real life cutting benefits will result in those who aren’t in work being pushed into further poverty. The unemployed cannot get jobs if there aren’t enough jobs for everyone.
January 2, 2013
Over the Christmas period, I had a conversion with someone who worked in GPO. They explained how they were constantly having to fill in money laundering reports as a result of the transacting of electronic transfers out of this country and beyond extent of the EU by the proprietors of local small businesses, purportedly in catering, who paid regularly and exclusively using large quantities of cash. One apparently explained he was building property in his native country. One has to wonder why GPO staff are expected to fill in forms expaining why a transaction is ‘suspicious’ when all the relevant information has been captured, presumably, by the GPO’s computer systems. The relevant businesses are in a high cost area and appear to employ foreigners, exclusively; these people would likely require taxpayer support, certainly for accomodation.
Another conversation I had, not recently, was with a small business owner who was constantly being visited by various ‘inspectorates’, despite always being compliant. When he complained to one, suggesting that rather than inspect him so frequently, they might be more successful expecting the businesses of those who may not be so familiar with our laws, he was told that the inspectorate did not like doing this because the people never produced books, pretended they couldn’t speak English and chattered amongst themselves in foreign languages which they found uncomfortable and intimidating.
January 2, 2013
We are now in a situation where as a result of social engineering of the most egregious variety, the historical cultural norms of this country have been undermined to the point of destuction. This situation is not been helped by the vogue for Newspeak which means the actual causative factors behind this situation are blocked in most public discourse.
Recently, there has been discussion about why the Finnish education system is so uniquely meritorious; each aspect is meticulously examined, except this:
http://www.dailymail.co.uk/news/article-2254450/Demise-nuclear-family-British-children-likely-live-parents-major-Western-nation.html
What is remarkable is that the Finns have ‘achieved’ all this without the manifold benefits of multiculturalism.
January 2, 2013
The government doesn’t value work.
If it did pro single mums I know wouldn’t live in more expensive homes than me.
Although the benefit cap is a good start you need to get rid of hidden subsidies like subsidised rent.
January 2, 2013
As I see it, while we continue to give billions away in foreign aid and we take cuts here to our NHS and other things any government as lost their arguement in full. We cannot, and should not be giving one penny while we have people in need here, we owe these people nothing. To assume we do on moral grounds is also flawed; since when have we been forced to acknowledge we owe foreign shores our money on moral ground. We give when we can afford to not before.
As for immigration it should be stopped forthwith, what’s the point of adding to the numbers while we cannot afford to accomodate those who have already joined us. Half of those have no rights to be here and are causing us strain on several services paid for via out taxes. I’m sick of and tired of hearing politicians, particularly Cameron, tell us about moral duty while they fail in their moral duty to citizens here. What are we electing MPs for if they can send our money out of the country, these foreigners have governments of their own, what are they doing? We see many of them spend the aid not on food and implementing structures to make life easier, but personal gain.
Its time we had MPs who put this house in order first and thought of foreign aid last. As for work, of course we want people to work, if there’s work to be had; there are no jobs that’s the problem. Employers use the benefit system to pay low wages, so to blame some in our community for all the ills is wrong. Faults lie on many sides. We should all expect a ‘living wage’ and nothing less.
January 2, 2013
People do not ‘value’ work, they value what they can buy with the profits of their labours.
The basic incentive is to reduce or avoid hardship, by working enough to earn enough to cover the cost of basics: water, food, shelter, clothing. Next is working enough to earn enough to enjoy a comfortable life. What amounts to ‘comfortable’ life is subjective – ambition – and so varies.
So it is a question of incentives. There is nothing anybody can do about ambition; whether someone has it and to what extent is determined when sperm meets ovum.
However hardship is subject to outside influence. Take away hardship and you remove the incentive to work. Decide on, and taxpayer fund, an arbitrary level of ‘comfort’ based on nice middle class values of people who have never had to go without or do a productive day’s work in their lives, then you provide an incentive not to work.
Talking about ‘value of work’ is just more nonsense from clueless politicians who really do not understand life out side their own small universe.
January 2, 2013
The governments like immigration on the grounds that more people equal more consumption and more tax take. However they have cocked up big time by finding out that the surge in population has brought no benefits in either taxes or support. In the main we are now over taxed and over crowded, the solution they espouse is overcrowd us with educated and professional people who are going to be fit and higher earners so they can fit in, probably speaking English and obedient to our laws and customs.
Too late too late is the cry. The social structures and support missing from most immigrants backgrounds etc. What can the government do, weakened by the racial and multicultural lobby who has sold out over the years and now just seeks to climb on top of the money and power cart, the rest of us look on bewildered as our (society is changed). I am not racist and I believe that most immigrants are people like us who just want a chance to live decent lives, but the very thing they want is being threatened by our politicians stupid lack of realisation and guts and drive to preserve and protect the very seed corn of our own history and culture.
January 2, 2013
The way to attach a value to work, is to make the entitlement to benefits contingent on full time employment record, and apply a limit. Once your account runs down to zero, you either find a job sharpish, or you have to turn to family, friends or charity to feed, house and clothe you.
Exemptions could easily be made for the genuinely sick and disabled.
January 3, 2013
What about all the people who live in areas with few jobs, thus less opportunities to build up their “employment record”? What about all the young people who haven’t had a chance to build up their “employment record”?
Your solution only works in a right wing fantasy world.
January 4, 2013
Even in the worst unemployment blackspots, including the one where I live and work, there are two kinds of people. The ones who spend all or most of their working years in employment, and the ones who are content to spend all their lives idle. The former know they are being taxed to support the latter, the latter know they are making fools of the working stiffs, and confidently expect this state of affairs to continue indefinitely.
The split between these two camps is not about qualifications, it is about attitude.
January 2, 2013
I have worked all my life since doing a paper round as a young teenager , so cannot understand those who rely on the state ,but there it is, people do. The difference is, even when I qualified in the early 70’s jobs were in abundance. If I would have desired a very responsible job at that time, with a high salary (relative to today) I could have just said the word and got one. The competition for a few jobs throughout the years has become cut throat. Any one of us, to be earning, is lucky and many wish they too had jobs, however I don’t agree with punishing the out of work because they can’t get a job.The desire and more often than not, qualifications are there , but these people are doomed to the cycle of unemployment.That is really cruel John.
The coalition have lifted the earning without paying tax bracket, which is good, and as Grant Shapp said today we can’t go on spending and spending, even though investment is needed. So yes we need to look at tax and perhaps you are right in allowing the job creators ,to be less heavily taxed, with restrictions i.e. looking at how exactly the money is spent and penalising those who plan to expand and employ ,then change route and pocket the money.
Freedom not to be heavily taxed should come at a public price as is the freedom not to pay that higher rate of tax.
Inward migration is a problem, but also is migrants unwritten permission to breed and breed when our unwritten standards have been 2.2 children / family.
January 2, 2013
Both the Labour and Coalition governments of recent years say they value work. They urge everyone of working age who can do so to get a job.
The why are the Conservatives planning to cut tax credits in real terms when many people on low wages need this money to survive.
cut income taxes for the low paid
Technically the coalition hasn’t done this. Though raising the personal allowance has reduced the amount of income taxes paid the rate of income taxes has been the same. It’s more of “cut the amount of income tax paid by the low paid”.
Also lowering the 40% tax rate means that many people haven’t gotten any benefit from the higher personal allowance.
Both are strongly in favour of taxing people who choose to work long hours and take business risks, claiming that high earners should make a bigger contribution to tax revenues.
People working long hours reduce the number of jobs. It would be far better for the economy and unemployment statistics to have more people in full time jobs than fewer people in full time jobs who work a lot of overtime. Especially when people are paid extra for working overtime.
Taking business risks and being a high earner aren’t related. Many people do risky things for little money and some people are in very high paid jobs where there’s no risk of their bonus being reduced even if everything goes wrong.
They thought a higher rate would bring more tax revenue, but it brought lower revenue instead.
In the USA Obama has just increased taxes on people earning over $400,000 and households earning over $450,000. According to your calculations John how much is this going to reduce tax revenues by?
The more government tax job creation, earning and effort, the less they should expect of each of them.
Job creation, earning, and effort are not the same thing. The Government could increase job creation by reducing employers’ NI without having any effect on employee earnings or the amount of effort they exert.
The irony is they need the hugh tax revenues from them to subsidise the low net pay people earn after tax or to pay people not to work.
Well if jobs paid a living wage then people who were working wouldn’t need benefits. Odd how all Governments keep ignoring this.
January 2, 2013
We, who purchase the work of others, value it precisely. The price of any product or service is the exquisite 90 degree tipping point between buying it and refusing it. Output which is over-priced becomes so heavily rejected, it naturally reacts with a lightening of cost weight; or its proponents starve. Under-priced output attracts adequate demand to allow it to fly high, or bear down with a heavier bill. It performs a near-perfect balancing act.
Govt distorts values. Tax is good in allowing Govt to pay for things we need. Tax is also a good instrument to prevent bad behaviour: such as reducing the risk of someone smoking themselves to death. Tax is however needlessly complicated.
Taxing work seems daft. A tax SOLELY on energy consumption at source would permeate near-fairly to all citizens. Those who deserve help could still receive it, but preferably not via a crazy system that charges tax in multiple fragments & then issues tax credits in a madcap convolution intended to remedy its own error.
January 2, 2013
After seventeen years of paid work I am now a stay at home mother with two children. The principle reason I gave up work was not the children but my parents who both became very sick and needed care. Between the parents and the children I could no longer be a reliable employee which I could not bear. Fortunately my husband works very hard and entirely on his own merit earns a good living. He is not a banker and does not earn those kinds of sums.
In the last two years his marginal tax rate has risen to 50%, he has lost his personal allowance and I have just lost my child benefit. We accept entirely that as wealthier members of the community we must bear a share of the burden of deficit reduction. I do not have a quibble with that. What I dislike is the mood music that accompanies all these announcements and the subsequent debates. We are apparently “rich”. A pronouncement which is not true and value loaded as though my incredibly hard working husband does not “deserve” the money he earns. We are somehow excluded from the term “Britain”s hardworking families” although we have both very hard and continue to do so.
Neither of us has ever received a penny in benefit ( other than child benefit), we are definitely net contributors to the system and yet still damned somehow. To put it into some kind of context I grew up in a council house and went to a state school. So no I don’t think “work” is valued. sometimes when I hear the mood music I wonder why I bothered.
January 3, 2013
Sarah
There are millions who feel like you do.
In the past most have been silent and simply taken it on the chin.
Now they are at last beginning to speak up, and not before time.
We have now reached a point where social benefits and the tax needed to pay for it, are destroying the lives of those very people who work hard, and who have to contribute to the now crazy system to keep it going.
It will have to change and it will, but unfortunately will take years.
The more that speak up, the quicker it will happen.
January 4, 2013
Yes Alan, I agree with all you said ref Sarah’s excellent post.
For a cohesive society there needs to be a link bewteen a feeling that one is valued for paying so much in, rather than feeling one is increasingly disliked for being “rich” or for being an employer or for being a landlord.
Welfare benefits are now £208 billion and rising fast and make up one in three pounds of all Government spending.
With a back drop of £120 billion a year deficit and a rising long term debt this is not a sustainable level of spending.
January 2, 2013
“The more government tax job creation, earning and effort, the less they should expect of each of them. The irony is they need the huge tax revenues from them to subsidise the low net pay people earn after tax or to pay people not to work.”
We need you to explain why the government doesn’t see this logic. They don;’t just need high taxes, they need printed money too.
Why doesn’t somebody just follow the logic through?
Q. Why do we need to subsidise low net pay/benefits?
A. Because rents are so high here?
Q. Why are rents so high here?
A. Because property prices are too high.
Q. Why are property prices so high?
A. Because we are printing money to maintain low interest rates and to stop the market correcting itself
Q. Why are we printing money?
A. Because we need to subsidise low pay/benefits.
LOOP to top
The Coalition Government hasn’t broken the cycle, and will be consigned rightly to the dustbin of history. We need a government with guts to take this by the horns and make changes, not keep the destructive cycle going.
January 3, 2013
“Q. Why are property prices so high?
A. Because we are printing money to maintain low interest rates and to stop the market correcting itself”
House Prices were high well before the BoE started “printing money”.
“Between 1995 and 2007 the UK population increased by 5%, the housing stock increased by 10% and house prices increased by 350%, meanwhile mortgage lending by banks increased by 630%. Which of these figures is more likely to have led to a 350% rise in house prices: a 5% rise in population growth which is matched by an increase in supply of housing; or an unprecedented increase in mortgage lending from the banks?”
The money that the BoE is printing goes into the Reserve Accounts of Banks, not directly into the Economy as Stephanie Flanders thinks.
Private Banks have created massive House Price inflation through Interest Only mortgages, >100% LTV mortgages, liar loans and they were allowed to do it with the blessing of Gordon Brown and Tony Blair as the BoE allows a ZERO Reserve Requirements on Banks. That is, a Bank sets it’s own Reserve Requirement.
Politicians go from Government into lucrative well paid Jobs in Private Banks. The better run Banks suffer as the Risk Taking Banks get Bailed out and force the more prudent Banks into bad practice.
Interest Rate Derivatives were supposed to protect SME against increased interest rates, affected by LIBOR. The Counterparty Risk was accepted by Private Banks, who made sure that LIBOR was not going to increase, thereby enabling the Banks to make huge Profits. It’s a rigged Casino Game, where the Law no longer exists.
January 3, 2013
“Q. Why are we printing money?
A. Because we need to subsidise low pay/benefits.
LOOP to top”
The BoE is printing money because Private Banks were allowed to lend too much and also gamble too much. Derivatives increased the amount of private profits but also increased the amount of losses which have now been passed to Public Sector.
The money printed is exchanged for Treasury Bonds held by Financial Institutions and is not used directly in the Economy. 97% of our money is determined by the Confidence of a Private Bank to extend Credit. This exteneded Credit or “Money” is accepted by the Treasury for payment
of Taxes.
People on Housing Benefit is a symptom of a number of Factors:
1. Excessive House Price Inflation caused by increased credit creation by Banks and lack of regulation on a subsidised industry (Financial Sector).
2. Export of Manufacturing Jobs due to Cheap Labour in China, India and Third World Countries.
3. Too much red tape and loss of benefits for someone returning to work, meaning that the incentive to work rather than receive benefits is not an attractive one.
4. Increases in cheap Labour to the UK forcing wages lower is a direct Government Policy. Both Labour and Conservative Parties have increased immigration – but immigration has NOT contributed to higher House Prices – only increased lending can do that.
January 2, 2013
With the rail fare rises for the South East that is taxing the strivers and tax revenue creators. The bulk of the fare increases are on the South East and they have been happening since I can remember. Too much is being taken out of this countries economic driver, starving the egg layer. It is a tax on jobs in the South.
On a more positive I like the cap on housing benefit.
I think I have noticed an incidental change in a London newspaper, could have been an editorial / ownership change or may come back. The paper for years near every month used to do an editorial that extolled the virtues of both cheap immigrant labour and high housing benefit. The benefit of which was that for the London editorial elite on relatively high wages with homes in London could therefore afford the home help they needed, cleaners and nannies. An incidental change I’ve noticed. I think some of that change is down to the natural intake of younger journalists who didn’t have the benefit of buying their london Edwardian home home with a two penny piece and a farthing.
In other words high state benefits subsidise cheap wages in the very affluent areas. Something I noticed the “intellectual” left wing inheritance beneficiaries strived to hang on to.
January 2, 2013
Governments tax smoking, drinking and driving because they see these things as wrong
Funny you think that, the economics textbooks say that governments tax these things because they have low elasticity of demand and are therefore easy to raise revenue from.
January 2, 2013
It would appear that the majority of posts know the reason why the country is in the mess it is but are often unable to understand why no serious action is being taken.
The reason is because we have gone beyond the tipping point such there are now more votes in continuing to tax, spend and waste rather than taking tough decisions to reverse this downward spiral.
Both main parties are happy to allow continued mass immigration. The Conservatives because big business likes to be able to employ cheap foreign labour without the expense or bother of providing training to local youngsters and Labour simply because it will extend their core voter base.
January 3, 2013
For the EU Overlords “work” is far down the list our priority. Who doesn’t place important human rights like prisoner voting & strident enforcement of work hours above the banal concept of work? After all “work/wage slavery” are human rights abuses.
January 3, 2013
One of the Reasons Government’s value “Work” by others so much is because of “INCOME TAX”.
If the Coalition really “Values” Work, why not discontinue Income Tax?
Balance the Money lost from income tax by not subsidising the Banking Industry. Or more accurately, subsidising certain Banks over others. Why hasn’t there been more new Banks entering the Market – unless the Banking Industry ISN’T a Market.
If the Government “Values” work so much, why do they “Value” the current non-productive Banking System MORE.
Why is there NO Reserve Requirement placed on Banks when all the Risk is placed on Taxpayers?
I’ll put that a different way – the Bank of England enforces zero reserve requirement on Banks but protects SOME Banks when they BECOME INSOLVENT.
And we wonder why the Financial System is so unstable compared to forty or fifty years ago.
January 3, 2013
If a Private Bank doesn’t need deposits to increase it’s Reserves to make new Loans, it won’t pay reasonable Interest Rates to attract Savers.
A voluntary reserve requirement is a kick in the teeth for savers because a Bank can just leverage up as much as it wants (taking in additional profits in the good times), dumping the Risk on Taxpayers, sponsored by Government’s and Central Banks, who are each tasked with the Job to explain to the Public why Public Services must be cut, Taxes Increased and Currencies Devalued are good for us because the Banking System is now so inefficient it cannot survive without an ever increasing amount of National Resources (in the form of Work) to maintain it. It produces Nothing, yet will eventually require Everything.
January 3, 2013
What is work?
If my neighbour and I stay at home to look after our own children, we are told we are are “not working” and the government considers us “unproductive”. However, if we call ourselves nannies or childminders and I look after my neighbours children, and she looks after mine, everything is apparently radically different. In that case we can be considered as “working” and the government will recognise us as useful and productive members of society.
If we pay each other the minimum wage, we might even be eligible for tax credits…
What a farce.
January 6, 2013
Both recent Governments have made the claiming of Benefits a full time job !
They owe us !!
January 6, 2013
John
Do you think it would make more sense economically and perhaps even politically, if we had a flat tax rate on incomes, but a higher personal allowance, say equivalent to the minimum wage, or perhaps even the so-called living wage. OR
is it better that we all pay some income tax because it helps keep the government accountable and the average taxpayer interested in how the money is spent.
Why are many Conservative MPs against increasing the number of council tax bands, when those with £1m properties are proportionally to their property value ( and it is a property tax) paying far less council tax than those with properties worth £100,000 – £500,000? Are the strivers Russian oligarchs and foreign investment companies?
Reply: Because Council Tax has an element of paying for local service received, which is not proportionate to income.