I support a system which delivers a minimum income. The Minimum wage in most cases is below the minimum income, so families top it up with income related benefits. The idea of raising the Minimum wage is partly to get employers to pay a higher proportion of the minimum income the state thinks appropriate. Some of the increase in wages will be balanced for the individual worker by loss of benefit top up.
The living wage is just a higher Minimum wage. The living wage is closer to the Minimum income, but there will still be income top ups from the state for many people on the living wage. The so called living wage would be difficult to manage on for families without housing, child and other support from the state.
Above all I want to promote policies that will deliver more better paid jobs. The only way we can all enjoy higher living standards is if our economy produces more, either to sell to ourselves or to sell to foreigners in exchange for imports. If we produce more we can consume more. If we fail to produce more we can argue about how much we take off the richer to give to the poorer, but on average we will no better off. If we go too far down the road of redistribution we make ourselves collectively poorer, as some of the rich leave and cease to make any contribution.
Labour’s latest idea of offering employers a tax break to pay more to their employees is mainly redistributing what we have. We will need to see the numbers. The state accounts will lose tax revenue from the tax cut but will also reduce spending from the top up benefit reductions. The employment effect will hinge on what such a scheme does to the costs of employing people. If the tax cut balances out the extra wage cost it will be neutral. Were the tax cut to be less than the extra pay cost then it could damage employment.
November 4, 2013
Well what can you expect from the party that really got crony capitalism going in the UK? I would suggest a far more easier alternative if the state wants to really get into corporatism. Why not just do, as one very well known retailer does in the USA, simply hand out the forms on how to claim welfare on your first day of employment to top up your low wages? If anything, if you cannot get people off benefits do as the German’s do and let them have a “mini job”. Here you can earn up to 400 euros a month on the side. Here you are getting people up off their sofas and actually working and who knows some of them may actually graduate into a proper full time job later on
November 4, 2013
Many are deluded as the minimum wage is about six quid.
https://www.gov.uk/national-minimum-wage-rates
and the living wage rate, currently £8.55 in London and £7.45 elsewhere. How do you argue that a couple of quid an hour is a large life changing amount. That is of course if the person can get the hours too as many are on zero hours contracts to boot.
November 4, 2013
Was the air conditioning system you bought locally manufactured or was it an import. If the latter how do you justify not spending the money on local products and so not supporting your neighbour’s employment?
Buy more locally made products and the costs will come down making wages relatively higher. Instead of whining about the well off why not do something about the labour policies which harm the employed and raise costs. Never heard you complain about the large numbers of immigrants brought in under Labour policy to take low cost jobs or (live ed) off the benefit system. Quite the opposite in fact, the only contribution you seem to make is that british workers are too good for low wages and shouldn’t take them.
Perhaps you need to address your delusion that it is everyone else’s fault and you have nothing to do with the problem.
November 4, 2013
The three systems are Daikin. Japanese.The best and most efficient used across Europe. How can anything less be used with the price of electricity being what it is? They were fitted and are serviced by a very professional local company who also supplied with a five year parts and labour warranty. East Europeans drove down the wages in the metal trades greatly, but they soon turn into British workers and demand higher pay. Employers saw them as some sort of magic bullet thsi soon was exposed as a wishful thinking though. This idea that East Europeans are here to claim benefits is false and you need to provide evidence. Many are young intelligent and fleet footed.
November 5, 2013
So “best and most efficient” is a key factor for you as a consumer? The most efficient way to keep costs down is competition yet while enjoying and extolling these benefits as a consumer you condemn local employers who try to do the same compete effectively.
You’ve chosen to spend your money on imported products rather than local products and so have enabled foreign employment rather than local employment. You are part of the problem.
According to a BBC report, during the Labour years there was net immigration of 3.5 million, 80% from outside the EU. Labour admit it was for purely political reasons and had nothing to do with need or the benefit of UK citizens, it was solely to increase their vote (this is from a BBC report).
Now one of the ex-ministers involved in that socialist disaster and it’s ongoing impact on our economy and lives is trying to transfer all blame to the previous leadership and claim the real fault lies with empoyers. Again this is solely for political purposes, he wants to be prime minister, he and his cronies do not have anyone else’s interests at heart yet you promote their line.
If an employer is given access to lower cost employees of course he will take up that option. As a consumer you have done exactly the same thing as that employer and favoured an imported resource over a local one.
You delude yourself you are not part of the problem, you are the one with the fantasy that it is the fault of employers, the entreprenerial, he aspirational and the successful. You are in denial of Labour being a disaster for this country and yet you promote their interests so are you a Labour (helper ed)?
November 7, 2013
All a bit silly really. The average consumer does what he can to maximise his money in a free market. Don’t put local consumers struggling to make ends meet with big business greed or the market with a street market. An old Tory trick. This ‘Buy British’ idea is to simplistic even for you. Are we as consumers to check how British a company is in how many British people it employs and where the profits end up? British owned power company? Family car maker? And so on. Cheap Chinese padlock or quality British one for three times the price for padlocking the garden shed. Especially if you are struggling for cash as many are. Not real. It’s like blaming the consumer for CO2 emissions E waste and plastic waste. A metropolitan elite including many Tories let in all the cheap labour a large cost to the working class voter. Big business filled their boots and campaigned against the minimum wage. A brake for many British in the decline of their wages and conditions, but you can’t blame the immigrants for coming here can you? They are often very highly motivated and young the local population unable to compete with them and their willingness to be able and want to work in low wage low living conditions. As I have said wait until they take middle class jobs and see how you feel about that.
November 7, 2013
David
As someone who ran a manufacturing business (now closed because customers decided to marginally purchase cheaper but inferior quality imported products) thank you so much for one of the best posts written on here.
November 4, 2013
Well the £2 an hour plus NI etc. employment laws and the rest for the employer might well mean that for example the apples, potatoes or sugar beet they are collecting are no longer worth collecting so then no job. Or perhaps the customer refuses to pay the extra for say some cleaning contract – so no job at all.
How does that help anyone?
November 4, 2013
What employment laws are a cost and why? No job as the job is not worth doing for anyone other than the employer. Any business would work with free labour. Maybe you think the same of other business costs that you cann0t control as easily as labour costs?
November 4, 2013
Baz, Can tell you havent got a clue about business
There is no way on earth that I would use free labour in any of my businesses. You just don’t get it do you
November 5, 2013
Employment Law costs – just a few off the top of my head
PAYE systems plus training, plus new compliance issues like In month online filing. plus the cost of the payroll clerks wages or outside agency you use to collect tax and NI for the government.
Storage for six years of payroll records
Setting up Contracts of Employment in line with current legislation so requiring updating every year now if you’ve got any sense.
Employment manuals for every possible risk evaluated because quote ‘you cannot rely on common sense’.
Year end paperwork costs in line with HMRC requirements.
Seminars to find out about compulsory NEST implementation.
Full payment of statutory sick pay for 28 weeks plus sick holiday pay.
8% of statutory maternity pay for 9 months plus statutory maternity leave holiday pay.
Keeping abreast of health and safety law and the regular annual changes that require new policies and procedures.
Regularly buying no smoking stickers to replace in all company vehicles with regular reminders of fines to ensure compliance.
These are just a few of the costs you take on board if you hire staff.
November 5, 2013
Thank you a-tracey for your list when Baz asked,”What employment laws are a cost and why?”
I used to spend a third of my time bogged down with all these matters instead of getting out and gaining more sales orders to expand my company and so take on more staff.
Other time consumers are compliance with all fire regulations, health and safety legislation and doing regular risk assessments on these topics as well as risk assessing any substance used in your business for potential health hazard.
Then all this has to be communicated to your staff via training and regular appraisals.
Then there is tax compliance for NI PAYE SSP VAT etc.
I’m glad we live in a sophisticated and relatively safe world of work in the UK compared to say fifty years ago, but the admin burden on small companies in the country has grown recently to be a real problem for smaller company owners who cannot afford the HR departments and in house legal and financial experts that are the norm in larger businesses.
November 6, 2013
What about if you work via an agency and are paid by an umbrella company?
November 6, 2013
Baz
What about if you work via an agency and are paid by an umbrella company?
You ask, well if YOU CHOOSE to do that then you aren’t an employee, you are an employee of the umbrella company. If you chose to work for an offshore umbrella company then you wont have much in the way of protection. But seeing as the only benefit of such an arrangement is avoidance of tax then I guess you get what you pay for !!!
On the whole agencies don’t like umbrella companies as they are notoriously unreliable so more and more agencies refuse to use them. I agree with you all of this was bought about by Gordon Brown’s insane IR35 regulation which caused the loss of 300,000 micro businesses in the UK
November 6, 2013
The government are ramping up the threats to SME’s via magazines, online websites, payroll software providers about compliance to Auto Enrolment that is due in April 2015, 2015, yet apparently we are threatened again with fines if we put this off and threatened that pension companies will not want to deal with us and payroll software companies who want to charge for seminars to tell you how to make this simple change. Where are our business protection representatives at the FPB, FSB, CBI, IOD too busy to represent our interests and demanding easy joining and processing systems.
Apparently small businesses face a set-up fee of £8,900 to get ready for the new legislation, according to the Centre for Economic Business Research. This figure rises to £12,600 for SMEs who have 100 employees.
In addition to the significant cost impact, businesses must get to grips with the scale of the task ahead of them and are faced with completing a total of 33 different administration tasks ahead of the date. Getting ready could take each business up to 103 wo/man days! Even businesses planning to use the Governments NEST face these costs and admin charges. The legislation will see SME owners, who have no experience in the field of pensions, tackle the huge responsibility of choosing an appropriate scheme.
Baz and Unanime5 get in the real world. The truth is most SME employers have enough problems paying the Employer’s NI that at 13.8% thought covered the state pension obligation, plus the full ssp bill and ssp holiday pay bill which is becoming a very onerous obligation.
However Baz using sub-contractors is one way to avoid all of this legislation and how are those sub-contractors taxation checks being made with so many of them, what checks are made that what the company charges and pays their sub-contractor is getting the correct level of taxation applied and how will these subcontractors be charged for next will they for example have to invest the full 6% than an employee will be having made and making this provision for themselves?
November 6, 2013
We’ve got a massive state sector .
They should be administrating this auto-enrollment rather than businesses being expected to do it .
As I’ve said before , decent pensions will never be available to the private sector as long as public sector is allowed to have their own separate risk free underwritten schemes .
November 6, 2013
I agree A different Simon. They will not be decent pensions and people will be very upset. It is scary to think who will be investing all of this money and where the risky investments will be made as the future taxpayer isn’t underwriting them as it does for public pension promises that can’t be provided for.
My last paragraph should say ‘NEST’….
and how will these subcontractors be charged for NEST will they for example have to invest the full 6% and be forced to save for their own pensions or will they still be allowed to fall back on to the state if they don’t make provision as people do now with Pension Credits?
November 6, 2013
Interesting as I am battering the tax bill via an agency paid through an umbrella company working for a small local company working on national projects. Legal scam.
November 6, 2013
a-tracy ,
IMHO the conundrum you cite shows how important it is to get the primary pension (state pension) right before worrying about secondary pensions such as vocational .
Pitch it at a level to make means tested benefits redundant .
Someone who puts away over 25% of their gross pay for old age should feel good but it’s impossible to do so when other people are unable or unwilling to make provision for their old age .
“I’m allright Jack” doesn’t work over the long term and worse still just encourages people to go to inordinate lengths to hold on to what they’ve got .
As a nation things need to change but there are just enough people with just enough to want to keep things as they are .
The Conservative parties policy of resisting change and maintaining the status quo is ultimately a losing strategy as the “haves” die off and become outnumbered by the “have nots” . (I’ve got no fondness for Labour or Lib Dems either)
November 4, 2013
Why not set up in business and show us all how it’s done?
The unions have millions – they could do it too.
Pay high wages, with good working conditions and pensions – and then, when you’re successful, we’ll all admit that we’ve been wrong all these years – and you’ve been right all along.
Do it.
November 4, 2013
They could set up a bank. What could go wrong? Very little seems. Many large profitable companies hate unions because they make them pay for their labour or share some of the profits if you like.
November 4, 2013
Why change the subject Baz
he asked why as its so easy YOU haven’t set up a business and employed people. Go on just for once answer a question directly
November 6, 2013
Libertarian – I didn’t expect him to answer.
When invited to ‘put your money where your mouth is’ – leftwingers have no response.
If socialist ideology was correct there would be tens of thousands of organizations operating under socialist principles already – because that’s how evolution works isn’t it?
Even the Guardian is subsidised by the capitalist Autotrader – and that’s the heart of the matter.
All leftwingers sponge off capitalism’s efforts – and they’re always whinging for more, more, more.
November 6, 2013
I do not have to set up a bank to vent an opinion on banking which are the biggest left wing spongers of the taxpayer and according to the Tories the only disadvantage of thsi is occasional banker bashing. Entirely communist principles and as we have seen from previous utility bills from MP’s, when the state pays they agree. Laughable from right wing ones telling us to cut back. Like being caught with a gay lover or a prostitute when campaigning against these things. As i have consistently pointed out communism is alive and well in the UK.
Ram it. Especially that right wing mate of Dave without the key meter Nadhim Zahawi. I winder how thick his jumpers are. etc ed
November 5, 2013
You want to share the profits? Then share the risk and buy shares in the company. As an employee you are compensated for your time and in many companies there are additional rewards for additional performance. Shareholders are compensated for the risk of losing their investment in the enterprise. If there is no reward for risk or that investment is jepordised by restrictive work practices or industrial action then there will be no investment and you lose your job.
It’s one thing for Unions to ensure good, safe working conditions and fair treatment of employees. It’s a different thing entirely to damage a company’s ability to operate or compete effectively even to the point of closure or bankruptcy by refusal to adapt and unrealistic wage demands.
The fact remains there is nothing to stop you or a union from setting up your own enterprise. The question is if you hate employers so much why don’t you do it?
November 8, 2013
A billionaire can close a plant vital to the financial and strategic interests of the UK (if he does not get his way? ed)? Energy companies threaten to stop producing energy if they do not get what in subsidies from the state. You are telling me the Union are the ones with the real leverage and power. Union members put on blacklists for highlighting safety issues such as asbestos? Bankers and the damage and cost still ongoing to the state and livelihood for millions.Lets not even go there?
The unions are looking after the interests of working and non working people because no other organisations are and are in general paid for by these people not a small self interested elite. Companies and the state are are as we are all ‘init’ together? Silly dreamer aren’t you?
Ram it.
November 4, 2013
Once again, I think it ought to be up to the Employer and the Employee to settle wages among themselves.
The Government is a blunt instrument and cannot be there to be just. For example, how many MPs (or us commentators) have ever worked in a factory? So what do we know?
Len McCluskey and his minions (including the Labour Party) ought to be kept out of negotiations as far as possible. But Union Leaders who really have the good of the company at heart ought to be encouraged. There are bad bosses too. And there are some very good bosses – I can certainly name some round here.
But that’s life, I regret.
The free market is cruel. But so is having to close down Grangemouth. So is the cynicism that has prevented people in our area hiring paper boys and which has banned school leavers from earning money.
November 4, 2013
Given that the employer has much more power than the employee we need laws which set minimum standards to ensure that employees are not abused by their employer.
November 4, 2013
Not sure where you’ve been living for past 10 years Uanime5 and I know you aren’t bothered about getting a job so that you don’t have any experience of work. However there are more than 100 regulations protecting the interests of workers. From NMW, AWD, WTD, Heath& safety, Pension rights, anti discrimination rights.
November 4, 2013
Not if they use agencies or any other way of circumventing these laws and why are so many companies here making millions in profit if this is the case? Is it our amazing infrastructure, education, low taxes and business friendly laws? For your fantasy to be real there would have to be more cleaning jobs within a commutable distance for cleaners than cleaners. Have a little think and get back to us.
November 4, 2013
Baz
How many times are you going to be wrong ???
Agencies are subject to exactly the same employment laws as everyone else. You not heard of AWD, WTD, GLA ?
70% of people employed in private businesses work for businesses with fewer than 50 employees and very few of them make millions in profits.
You live in a fairy tale land Baz
November 5, 2013
If you have so much concern for the lower paid why did you actively support the actions of Labour in actively encouraging so many lower skilled immigrants?
As a Labour voter and consumer you do exactly the same as you accuse employers of doing.
November 5, 2013
@libertarian
Employees hired from an agency have far fewer rights than normal employees. For example they can be dismissed more easily.
November 5, 2013
Mike Stallard said that employers and employees should negotiate a contract, I pointed why there needed to be employment regulations. If you had bothered to read my post you’d know that I wasn’t claiming there aren’t any employment regulations.
November 6, 2013
Uanime5
No your are totally wrong as normal. Agency workers have exactly the same rights as anyone else.
Agency workers are on short term contracts so dismissals don’t happen as the contract expires. The only grounds for dismissals ie violence, discrimination bullying etc are subject to exactly the same rules as full time employees.
In fact agency workers in some respect have greater protection because they have an agreed contract, so early termination may result in the agency worker being paid without doing the work.
November 6, 2013
If you believe thsi you believe anything. Agency workers have less right than full time employed. Why pay an agency for a temporary worker who has worked for that employer next to full time ones for three years? Full time temporary employees? Can’t be right… and you know it. A director when questioned by a union official said the cost were similar, but the agency workers, in his own words: “Can be turned on and off like a tap.”vAs for the same rights as Europe. Why does my wife work for an American company selling products into Germany from the UK with sales in the UK? A sort of legal pyramid selling with a revolving door recruitment policy fuelled by agencies? Why not operate from Germany? Employment laws. You are free to tell us how restrictive UK employment laws is and a cause of unemployment in Northern France, but not to fantasise they are the same as the UK.
Ram it.
November 4, 2013
How do you come to this reasoning?
I’d say anyone with skills in shortage has MORE power than the employer.
If there are numerous workers per job then there is LESS power for the employee.
The market works by persuading those workers where there is a shortage of jobs to go for others, re-train etc.
I think that is quite a good way for the world to work. Don’t you?
November 4, 2013
The best protection for employees, by far, is knowing they can walk into another well paid job. The best way to get this is easy hire and fire, cheaper no religious energy, a much smaller state sector and fewer regulations all round.
November 4, 2013
The metal trades have massive skill shortages hence the cheap labour from Europe. Why does the industry not train more or pay higher wages is the obvious question?
November 4, 2013
They do is the obvious answer, but Labour pushed all our young people away from vocational training and into University and studying soft skills.
By the way skilled metal trades workers from overseas aren’t cheap and don’t work for low wages. Why would they, there’s a shortage of skills. Its why people like you get paid £35k per annum
November 5, 2013
Many companies do invest in training trheir employees but why should the onus only be on the employer, why shouldn’t the employee take some responsibility? If lower cost labour is freely available, thanks to the Labour government, why should the employer pay more?
I guess the employees wanting higher pay could engage in industrial action but how many Grangemouths do you need before you understand the consequences of your and Labour’s actions?
November 6, 2013
Wages have been stagnating since 2004 and in particular the metal trades. Which are largely the same is in the 90’s. Many large companies are already trying to push training costs onto their employees safety and trade trade test certificates. Airlines charging for training courses. What next materials? If that is the case they can be invoiced for everything as a self employed company. They have not been training apprentices and have been poaching off each other via agencies, then co,plaining about a lack of skills. This skill shortage then addressed by cheap labour from Europe. Wait until this effects middle class occupations then there will be a scandal. This idea that the employers are just taking advantage of lower labour costs is not the case.
November 4, 2013
uanime5
I agree with you that the employer has much more power than the employee.
However, the more rules you load in favour of employees the more unemployment there is, giving employers yet more power, and even worse, making big corporations bigger at the expense of small business.
The only way to have a healthy balance of powers to have full employment and that requires dumping most of these unemployment-causing laws.
As usual, fiddling with markets – in this case the labour market – has perverse effects and often the opposite effect of that which was intended.
November 5, 2013
Care to explain why Germany has less unemployment than the UK despite having harsher employment laws.
Your belief that anyone other than immigrants will be willing to work if they have no rights at work is naive.
Reply I assume you are saying you think the UK has harsher laws. Remember Germany has no Minimum Wage and the UK has a Minimum wage – how does that fit in with your thesis?
November 6, 2013
Germany has stronger unions with many in them and the minimum wage is agreed like this as you well know John.
http://www.wageindicator.org/main/salary/minimum-wage/germany
If there was no minimum wage it would cost this country a fortune in benefits, as quite rightly, no British person would work for a quid an hour or the free market minimum which would no doubt be set by desperation from European countries.
November 5, 2013
You are deluded, the employee always has the option to walk away and go work for someone else or set up on their own. An employer has to have employees to operate so I would say a good employee has the upper hand every time.
It is the employee who doesn’t pull their weight, refuses to adapt and is disruptive who would be most at risk. Worse though they detract from the activity of the enterprise and emperil the employment of their more productive colleagues.
November 5, 2013
How do you explain revolving door recruitment policies from top down command and control management structures in your every employer is good as they have to be fantasy? As for waking away this is the get out card of all like yourself. Some can, but many factors stop most employees from doing this and this is where the leverage lies.
My leverge is however just this. Driving off in my car focuses their minds, but you have to put down the foundations for this strike they can understand.
November 8, 2013
Not every employer is good, but bad employers will run out of good employees very quickly as they leave and go to work for the competition or elsewhere.
Why do you continue to work for a bad employer and so sustain them?
Why don’t you set up your own enterprise, employ lots of people, generate lots of exports and taxes and show everyone how it should be done?
November 9, 2013
Bad employers will run out of good employees very quickly as they leave and go to work for the competition or elsewhere?
Not in London or the surrounding towns. This is wishful thinking. This revolving door policy is management tool and where it works such as work that requires common but specific skills such as languages and/or quickness of working is used and so the employees are too. Different story if you are using them..Don’t take it personalty, but its all personal. As I once said to one employer as this was their tactics.
November 4, 2013
Well if the government stopped putting UK industry as a competitive disadvantage to the rest of the world with their daft employment laws, over regulation of almost everything, dis-functional banks, over expensive religious energy, daft HS2 schemes, over taxation (and over complex taxation) and a bloated hugely inefficient state sector then there might well be more jobs about, more competition for workers and then higher wages.
Why pay more than you have to, you just tent to go out of business. Of course if the government did not pay 150% of the private sector then the government might not have to mug the private sector quite so much and they might then be able to pay a little more.
I see the CBI has been active pushing the Cameronite type economic drivel about the EU yet again today. The question is surely do we want to be a democracy and richer like Norway and Switzerland or just a region of a declining undemocratic superstate? I assume the CBI like the way it kills smaller competition for them.
November 4, 2013
If the UK collected the £120 billion in taxes from companies that avoid it through Maastricht treaty of capital freedom then I suppose they could afford better wages and the UK could stop tax credits to top up low wages. If any company can avoid paying this amount of tax because of being in the EU no wonder the CBI wants to stay in and come up with are believe drivel.
November 4, 2013
Some truth in that we clearly need a level playing field in tax between Starbucks and a small cafe owner up the road and between Google and other local advertising media.
Is this perhaps the same CBI who largely wanted the ERM and the UK to join the EURO. Just like John Major, Clegg, Huhne, Davey & the green loons. Proven wrong on almost everything they utter & yet sill advising us all like they were wise elder statesmen with more drivel.
November 4, 2013
Taxpayers are making up for workers being paid low wages through tax credits. Immigrants will do work but also receive tax credits. Might be good for CBI and big corporation profits, but bad for taxpayers, our culture, values, sovereignty and independence. All undermined by the EU at huge cost to the British taxpayer. Cameron knows this and keeps pretending he is cross with tax avoidance when he knows a large chunk of it is lost through the EU law on capital freedom brought in by the Maastricht Treaty. Even Carswell has caught on in his blog.
November 6, 2013
The CBI are anti-shale too .
John Cridland has never worked in industry unless you count the CBI as part of the lobbying industry . Went their straight from university .
Whilst ensuring multi-nationals pay what is due action also needs to be taken on tax havens and secrecy jurisdictions .
How many Briton’s do Starbucks etc employ anyway ?
(How much is recently arrived ed) immigrant labour ?
November 4, 2013
The UK has the third most lax employment laws of all the OECD countries, so the problems the UK is facing aren’t due to this. Also Norway and Switzerland have more employment rights, higher welfare, and more regulation than the UK so I’m not sure why you keep using them as an example.
November 4, 2013
Complete drivel
the UK has the SAME EU working regulations as the other 27 countries in the EU.
Norway has reduced its welfare budget and terms and Switzerland didn’t have it in the first place
November 4, 2013
The UK has the one of the most lax employment law regimes in the western world. Fact. Sorry..
November 4, 2013
Baz
Evidence? Nope you haven’t got any
The UK has implemented ALL the EU employment legislation which means we have the same law regime as other 27 EU members, that’s a fact and YOU told us this, its one of the reason YOU gave for us needing to stay in the EU
A study of 73 countries found that the HIGHER rate of strict employment laws the higher the rate of unemployment
http://phys.org/news156522095.html
Oh and if you look at this OECD chart you will find that the UK has the 4th HIGEST rate of protection from individual AND collective dismissal. That IS A FACT backed by evidence
http://www.oecd.org/employment/emp/oecdindicatorsofemploymentprotection.htm
November 5, 2013
@libertarian
Firstly EU countries are free to implement laws that go beyond the EU laws. For example Germany has implemented laws that make it illegal for pregnant women to work at night. So we don’t have the same laws as all 27 member states.
Secondly Germany has a stricter labour market than the UK yet has lower unemployment that the UK. This study also ignores that in many countries there’s higher unemployment because you can survive on one person’s salary, so many women don’t need to work.
Thirdly the OECD chart you posted shows that the UK has the fourth lowest protection, not the fourth highest. A low number means an employee has less protection.
November 6, 2013
Uanime5
Germany doesn’t have a minimum wage . It doesn’t have a stricter labour market. Yes I know some EU countries haven’t implemented all the rules but we have.
Oh dear so if YOUR reading of the chart is correct then China, Indonesia and Latvia has the BEST employee protection in the world. Ha ha ha ha ha Don’t you love socialists
Fail. Go back and read it again
November 4, 2013
In Switzerland employers can get rid of employees if they have lost confidence in their ability to perform their tasks. This sounds like fewer employee rights than the UK, but on this one I can ride with your reasoning, or lack of it.
November 4, 2013
An outright admission from a leading (allegedly right wing) Conservative politician that he is a socialist that agrees with government interference in the labour market. The rest of this post reinforces the point Mr Redwood. You are a big government, re-distributive statist just like the rest of our politicos.
How sad that even the supposedly free market part of the Tory party is not at all free market oriented and is in fact very little different from the other mainstream parties. No wonder this country is so poorly served by it’s government.
November 4, 2013
You are absolutely right. This is very muddled thinking.
If the government wish to ensure the incomes of the “poorest” is higher then all they need to do is raise the band at which tax becomes payable.
But no, this is all too complicated, so what they do is establish a minimum wage and then tax it. What a nonsense
November 5, 2013
Exactly they tax them and the with NI company, force a minimum wage on them, then they subsidise the worker with extra benefits. While wasting vast amounts in the circular processes.
November 4, 2013
Yes, it is disappointing hearing talk of the state having to subsidise companies (nudge nudge wink wink) so that they can pay low wages to staff. Nothing but out and out corporatism to make slaves of people, and make them reliant on the state to top up their income. Nothing but pushers after all…..
zorro
November 4, 2013
But surely this is a socialist philosophy? And the consequence will be that the State will be ever further involved in dictating what individual employers do day to day. Then it will be further sanctions and demonstrators outside the houses of owners and directors. In fear of Mr Milliband are we in the British Conservative party, or is it just the continuing move to the Left? Where are the defenders of free enterprise – remember that?
Reply It is our current system.The Conservative party does not believe that everyone should be left to fend for themselves in the market, but does back various benefit schemes to help.
November 4, 2013
I guess when I think of Socialism I think of centralising not only decision but provision for people. Obviously setting a national minimum wage is a central decision, but if the result is for provision (money, basically) to go more directly from business, through work, to people and hence stave off poverty then surely this is moving away from government providing for people through benefits topping up inadequate pay. For me, if the government was taking less from business, and business was doing more for people, then that would seem like a good thing – perhaps even a conservative thing.
November 4, 2013
Reply to reply – NO…All this system of subsidies has done, is doing, and will do is make people poorer, and the rich richer. As Bazman says, socialism for the rich….
zorro
November 4, 2013
Spot on.
Mein Host says: subsidies are good in the housing and jobs markets, but somehow bad in the transport market, viz trains. Reasoning, I believe, as follows:
We need to help out Tesco’s et al with their massive contribution to society by employing shelf-stackers at below the wage anybody could afford otherwise to work. Oh, and we need to help those poor banks to lend money against bricks and mortar in preference to decent SME business propositions or commercial property. 2 birds with a stone, we can also pump up housebuilders’ profits. Should be renamed the Corporatist Party.
November 4, 2013
John Redwood, why don’t you come out with plans to help increase the number of jobs at the market rate, and LOWER taxes because there would be less benefits and tax credits payable. Why? Because there would be LESS tax needed to pay those out of work!!!
Why don’t you do this by helping folk to create jobs rather than subsidising the jobs themselves? Why do you help the large corporates and banks with these job subsidies rather than help people starting up in business, creating jobs, who immediately have any profits cauterised with 20%+ corporation tax and business rates in addition to all the social costs of employees and red tape??? How does Help to Buy help to create more high tech companies and more jobs when it propels the cost of housing into the stratosphere???
You are talking more and more about subsidise this scheme and that scheme, unless of course we are talking rail travel, when suddenly there has to be a true return on capital.
I think you have to speak with more consistency here. Either come out as a true free-marketeer for all or as a true corporatist who believes in free markets for the rabble and subsidies for the nice chaps in the establishment! State your position please!
Reply I favour more market solutions than we currently have. Help to buy is not a subsidy – it is a priced loan guarantee.
November 4, 2013
John, it is a loan guarantee that is supported by the taxpayer and will ultimately cost the taxpayer.
So state interference is now a ‘market solution’ when it suits you.
Reply It is a loan guarantee priced to cover costs, with an adjustable price if the loan expereince is different to forecast
November 4, 2013
Reply to reply – ….which is subsidising and driving up prices above their realistic market value…… It talks like a subsidy and walks like one too!
zorro
November 4, 2013
“The only way we can all enjoy higher living standards is if our economy produces more.”
I’ve learned time and again that it isn’t what I earn but what things cost and how much I owe that counts. It is all about balancing things in the right proportions – clearly the expectation of never ending growth is unrealistic.
There are others ways of improving the standard of living without having to rely on continual growth.
This insane policy of schools producing dumb people and importing workers to do the jobs they are incapable of is a very expensive and – eventually – unsustainable way of going about things. Without this we wouldn’t need to be talking about minimum wage, ‘living’ wage and nor would we have to tax ordinary workers at 40%.
Reply If you want cheaper things and import them from abroad, then the UK is less well off as your money is creating fewer jobs here in the UK. It only works if the UK then makes other things of greater value and sells them abroad.
November 4, 2013
We are probably in agreement without realising it, John.
‘Cheap’ things from abroad (including unskilled workers) aren’t necessarily cheap when other – social – costs are considered. Not when a full welfare system is in operation.
Britain – when the sun set on the Empire – had the opportunity to turn into a brilliant dwarf star of small but high value output, instead it opted to become a black hole of welfarism and low educational expectation.
November 4, 2013
PS, There are other things which add to people’s standard of living and these are besides wealth creation:
Litter, graffiti and ‘petty’ crime are a bane on society. With better discipline in our schools and in welfarism we might have seen our environment improve greatly. Pretty much cost free but what a boost to the standard of living !
Alas all too late really.
November 4, 2013
@Anonymous wise words
Government subsidises employers through various tax credits and other housing benefits which increases the demand for consumables and housing in our economy thus putting prices and living costs up for the taxpayers who are footing the bill so the “living wage” requirement gets ever greater.
Government further exaserpates the problem by paying these benefits twice. First to those it has underprepared for work life through its education system and secondly to the low paid migrants it allows companies to import to do the job the ill-educated apparently can not.
Removing tax credits and housing benefits from all will make this country less attractive to migrants and will force employers to train staff, this in turn will improve productivty and more productive staff get paid better.
There will be a period of pain but legislating to protect buy to let landlords from resposession (minimum protection not allowing profits to spiral) in the interim should keep the low paid off the streets.
As an example of the cost of living pressures faced by the general populace, confirmable on any universal credit calculator on line, any eu migrant arriving here with three children or more who gets a minimum wage job can bank through wages and universal credit £36K per annum while increasing demand for housing stock and availing themselves of our schools, roads and hospitals. The population all ready here can also claim these amounts which means any family without benefits needs to earn fifty thousand pounds a year before tax to compete.
Madness
November 4, 2013
All removing tax credits and housing benefits will do is make huge number of UK citizens homeless, while doing nothing to deter migrants (remember that in their home countries minimum wage is a huge amount of money, so they don’t need to rely on benefits). Also how is protecting buy-to-let landlords going to keep people off the streets? People claim housing benefit because they don’t earn enough to pay their rent, so they’re the people you should protect.
So your plan will make it harder for people in the UK to find a job that pays enough to live on, while benefiting migrants who will only be in the UK for a short time.
Finally just because immigrants who work in a minimum wage job can claim get £36K per annum (benefits and wages) doesn’t mean that UK low paid families can’t do the same thing.
November 4, 2013
Your ideas and the government’s are trapping us all in a vicious spiral. The more you subsidise and pay people to do nothing the more they will do nothing.
November 5, 2013
As long as there aren’t enough jobs for everyone millions of people have no choice but to do nothing.
November 7, 2013
Uni
Care to explain how the vast majority of the huge number of new arrivals have managed to quickly find employment if there are no jobs.
November 4, 2013
@uni
Nice reflex response!
I wrote that families bere can get tbe thirty six k but that we should stop it. The immigrant reference was that we as taxpayers were paying twice once for the unemplohed then avain to subsidise foreign workers. Get the indigenous unemployed working before subsidising foreign workers would greatly assist everyone’s cost of living was the point if you had only taken a breath before hectoring.
Protecting buy to let landlords would alleviate the homelessness you scaremonger about as they would have little incentive to evict current tenants.
November 5, 2013
You said that the government should remove “tax credits and housing benefits from all” so this will harm the indigenous unemployed far more than migrants because most migrants don’t know about these benefits. What it will not do is magically make indigenous unemployed more employable or make migrants any less attractive to employers. So your plan is little more than an attempt to abuse the poor because you have no idea why people are unemployed.
As long as there’s a housing shortage the market is in the buy-to-let landlord’s favour, so if they can get tenants who will pay more they do have an incentive to evict their current tenants.
November 5, 2013
You have to say that because tax credits are Labours proudest boast of their previous government. You refuse to accept they are wrong, you deny that possibility even after they have admitted gross failures.
If your huge numbers of people could not afford to rent because it wasn’t paid for them by us taxpayers, who do you think could afford to rent those properties? If people could not afford the rent what do you think might happen to those properties and their owners and the rent levels?
I am not surprised you think it acceptable that anyone can come here from the EU and claim benefits that are 150% of the annual average pre-tax pay of a working person. I am not surprised that you then blame empolyers and everyone else that UK citizens cannot get higher paying jobs.
November 5, 2013
Tax credits were introduced so that employers would have access to a large pool of low paid workers, so any plan to remove tax credits without increasing minimum wage to compensate for this isn’t viable.
What exactly is your point about rent? As long as there’s a housing shortage these rents will remain high. The only difference will be that the low paid workers won’t be able to live near to their place of work.
Your benefit argument is flawed as UK citizens in the same position can also claim these benefits. Also what bearing does it have on high paying jobs.
November 4, 2013
“If we go too far down the road of redistribution we make ourselves collectively poorer, as some of the rich leave and cease to make any contribution.”
You worry far too much about the mobile rich, few of them employ large numbers of people tand hough some may pay high levels of tax they are generally able to look after themselves.
The thing to worry about with high levels of enforced redistribution is the impact on the those in the private sector that generate export revenues, the engineers not the CEOs. Take away an incentive to excel and people won’t so your exports will decline and things will get more expensive. Make their employment too expensive and the jobs will evapourate. You need to be focussing on making things cheaper, ensuring a large amount of their income stays theirs and is truly disposable. You also need to encourage that disposable income be spent on local goods rather than imports.
A focus on the rich, increasing wages and low interest rates will just have everyone chasing their tails till the drop.
November 6, 2013
Redistribution makes the rich richer and the middle class poorer and keeps the underclass underwater .
Housing benefit is the obvious one . Designed to benefit landlords .
Time of a location value tax .
November 4, 2013
A vastly bloated civil service to pay for, quangos and civic halls replete with useless bureaucrats, just think about the tax take – if some of these ‘hard’ workers were left to fend for themselves in the real world of the private sector, notwithstanding reducing the public sector pensions time bomb – what a more cheerful, carefree more responsible Britain, world and cheaper at that.
Then the EU, anyone who has regularly travelled outside of the EU knows well – just about anywhere in the world – from milk to bread and most comestibles – food prices are much cheaper. What could that be? Maybe – tariffs! and the CAP – think, what would it be like without having to subsidise the French peasant farmer – or, for that matter – subsidising most of the farmers of the southern Med come to think of it but it comes back to bite us n the rear. In that, we close down our dairy farms, turn good arable land into solar energy arrays [see green mania] and import subsidised foodstuffs from the EU – a double whammy – and the cartel of the supermarket chains help not at all.
Then, the green factor – from water, farming to energy – everything but everything is made more expensive by the green agenda and the EU dictated [landfill directives] recycling idiocy from water to waste disposal – green excuses raise fuel taxes to energy taxes and increase prices of living in all manner of subtle ways.
The government must get out of our lives – ha chance would be a fine thing!
It could, make all our lives easier and boost the economy in making itself smaller and thus the cost of living be reduced – costs for all Britons, industry and manufacturing – if it and the EU just deleveraged themselves out of the picture.
The minimum wage is a chimera, the tax credit schemes were a fixation of Gordon boom and bust – a jobs subsidy – it’s a totally bonkers system to keep the poor down where they must remain until someone takes the big booted foot off their windpipes………………who is the real enemy of the people and the biggest opponent of small taxation – who could it be?
The EU and Westminster executive – and big government – that’s who.
November 4, 2013
Indeed that is broadly the position, but the state is now so bloated and incompetent that the worker bees no longer produce enough honey for them to waste.
November 4, 2013
Lifelogic.
Very neatly put. “the state is now so bloated and incompetent that the worker bees no longer produce enough honey for them to waste”
Perhaps you could have added that more than half the worker bees now work for the Sate and so produce no honey.
November 4, 2013
Well not quite half and some do produce a little honey – teachers, nurses, doctors perhaps – but alas this is more than made up for by the many in the state sector that produce nothing of value at all and further inconvenience or mug the productive as part of their “non jobs”.
November 4, 2013
Things are cheaper outside the EU because the exchange rate, not due to tariffs. Also if you compare food costs in most developing countries to the average income you’ll quickly find that food makes up a larger percentage of their income than in the UK because their food is more expensive.
You also seem to have ignored that the government is far more involved in German companies, yet Germany has a much better economy. So it seems we may need more government regulation, not less.
Finally how is ensuring people get paid a minimum amount and topping up low wages bad for the poor?
November 4, 2013
In Para one you are again stating the obvious Uni.
If you are poor you spend most if not all your income on the essentials of life.
They may spend a larger percentage of their income on food but it does not follow that food is more expensive than in Europe or the UK just that they do not earn sufficient income.
Para 2 You only have Germany left out of the nations in the EU to make a favourable comparison with the UK.
The fact the Euro is about 25% overvalued in Germany’s favour doesn’t give them an advantage I suppose?
November 4, 2013
Dear me, where do I start?
Tell you what, read some of this guy [try “The road to Serfdom”] and come back to me:
November 4, 2013
Well in theory you might think that some central planning would be a good thing. But that ignores that fact that we have people in power who could not plan anything, are often totally incompetent and/or corrupt.
People who overwhelmingly think (or pretend to) that HS2, the no retirement laws, gender neutral insurance, farm fields of PV cells and the climate change act and daft subsidies are a good thing!
November 4, 2013
National energy policy, armed forces and civilian policing, a certain amount of planning is necessary – of course it is. As you say, the problem is with those planners.
Here though, always the people must control the budget, an annual budget referendum – may be what is needed to control the power of the chancellor and the executive.
November 5, 2013
Why would I read something that has been debunked?
November 4, 2013
The big problem with having a blanket minimum wage is that it prices many people out of work.
Of course a family needs a lot more than the minimum wage to run a household with several members. However, the chances are that there will be several potential wage earners in the household. For example, a 23 year old may be living with their parents and will live comfortably on an income which is lower than the minimum wage.
Surely we should recognise that there is room for every level of income in our society. Someone starting as an apprentice may settle for a lower wage, especially if the collective income in a household allows for this.
A skilled person may command a lot more. Horses for courses.
I believe that the minimum wage has added to underlying unemployment. The rise in unemployment when it was introduced was masked by a surge in public sector employment back in Tony Blair’s time as PM.
The minimum wage also encourages the black and grey economies where companies prefer to work outside of the law. This may be good for the economy but surely outlawing job creation is ultimately a bad thing.
November 4, 2013
Removing the minimum wage would increase unemployment, not reduce it. Without the minimum wage employers would lower their wages to a level that only immigrants that live 12 to a house could survive on, which would price all UK workers out of the market.
The best way to reduce unemployment is to raise minimum wage so that UK citizens have more incentive to work because it will give them a better quality of life.
November 4, 2013
I suppose one option might be to keep those immigrant workers out of the country in the first place.
Ever thought of that?
November 5, 2013
Well given that we can’t keep EU immigrants out and the Government isn’t able to keep non-EU immigrants out we may need to look for another solution.
November 4, 2013
I’ve never been against a minimum wage but care has to be taken when gradually increasing it so as not to cause job losses.
It easy for Councils, energy companies and other big businesses who have near monopolies to just pass on all of their extra costs of higher wages onto their customers, but its a bit more tricky in the competitive world of smaller businesses.
As well as trying to absorb higher bills form the above we find it more difficult to pass on our extra wage bill to our customers in the form of higher prices.
Would you always buy a more expensive UK product when you go out shopping or would you buy a cheaper imported product as the vast majority in this country do?
November 4, 2013
I agree with Denis Cooper’s suggestion. We should severely curtail immigration. I also think we should stop most benefits, including the dole.
Many socialists wrongs do not make a right. In fact, it is these socialist policies that have cruelly thrown so many out of work.
November 5, 2013
Hoe exactly are socialist policies that prevent the unemployed and those on low wages starving to death a bad thing? Your delusions that removing benefits will magically make everyone employable will be a disaster if you try to implement them.
November 5, 2013
So if all UK workers are priced out of the market how would anyone in the UK be able to afford to buy anything?
You increase incentives to work by removing government taxes and bureaucratic costs to the individual and reducing benefits so people have to work if they want something.
You increase the opportunities to work by restricting immigration which also decreases the costs for establishing and maintaning infrastructure.
November 5, 2013
Many people in the UK aren’t able to afford to buy things in the UK because they’re being priced out of the market, which is why the high street is suffering.
You do not increase people’s incentive to work by removing the benefits they get by working. Removing the benefits of the unemployed will also make it more difficult for them to get a job.
November 6, 2013
Here’s a little test for you – where did I say “remove benefits”?
You made up something then objected to it.
Do you even read what you write?
November 4, 2013
Indeed.
November 4, 2013
There seems to be a tendency to treat minimum wage as a default which the state may (or not) top up. This seems unhealthy. Labour’s proposal works on this basis.
November 4, 2013
Logically, the personal tax allowance should not be lower than the living wage?
The government needs to get public spending under control, something that the LibLabCon Party have failed and will continue to fail to do. The public sector is like a humungous financial black hole. Is it right that a Tory MP is claiming from taxpayers £5,822 to pay for his annual energy bill? That’s almost £500 per month! Has he considered switching?
The government needs to get off of our backs!
November 4, 2013
“Has he considered switching?” Has he considered switching it off occasionally perhaps?
Why bother it is not his money is it – it is yours.
November 4, 2013
Well he obviously does not wear a sweater! These MPs do not seem to realise that with every pea taking claim on the public purse they turn the screw just a little bit further to when the populace no longer considers parliamentary democracy to be the legitimate form of government in the UK. Wives and boyfriends on the payroll as assistants, safe seats for their kids, a final salary pension scheme and NEST for us, a 11% pay rise and they ask why does the electorate have such a low opinion of them?
November 6, 2013
Nadhim Zahawi on Newsnight in his starry self righteous manner said about the bedroom tax.
It is not about us making life difficult for people; it’s about living within our means.”
Then calms the thick end of 6k for bills. Tells us all we need to know really.
November 5, 2013
It’s not his fault the swimming pool is so expensive to heat. Everyone has the same problem.
November 4, 2013
The economics on this one is perverted by the fact that ‘socialists’ think that wages below the living wage are somehow subsidised by the government and the taxpayer through additional benefits. Surely it is a problem with the benefit system that people take paid work which is below the benefit level. It ignores the fact that many people do not qualify for benefits because their spouses earn enough money to keep them out of benefits. John is right about the neutrality of a tax rebate to businesses for paying higher wages. Employers will only want to acquiesce if they too are net beneficiaries. The living wage idea, like the minimum wage idea, is nonsense. If either were significant, there would be lost jobs. Milliband’s tax and benefit system is a smokescreen for his perverse political ideas. He has already suggested the energy companies work with him on carving up energy prices, and he is expecting the sames of businesses in the private sector over the living wage. This is in fact classic Corporatism – the kind that Mussolini and his ilk would be proud of – a carving up of the state with big business and big government, stifling small business and free enterprise.
There is a difference between helping the needy whilst allowing libertarian markets to thrive and interfering in markets because the benefit system causes unacceptable distortions for which further shackling of business becomes attractive.
Also, what happened to the notion that the private sector is helping the benefit sector by providing some work for people who, given the alternative, would require ALL of their income to come from the state?
I also see that Teresa May is campaigning for women’s statutory employment rights. The answer is blindingly simple. If you legislate in favour of women and the higher costs associated with that, employers are less likely to employ them and more likely to offer them terms which hedge against having to finance the rearing of their children. We must end this lurch toward Corporatism – a philosophy which is very attractive to fascists.
November 4, 2013
Frank regulating a business isn’t Corporatism, and the libertarian markets only benefit big business by taking money from ordinary people.
Given how businesses have been paying people very low wages because the taxpayer is topping up these wages the better solution would be to raise the minimum wage so that the employer, not the taxpayer, has to pay a decent wage.
November 4, 2013
Uni,
As companies would pass onto you, the customer, these extra wage costs in the form of higher prices for their products and services would we not end up back where we are?
November 4, 2013
‘One man’s wage increase, is another man’s price increase’.
Former Labour Prime Minister, Harold Wilson.
November 4, 2013
Therefore surely the solution is to fee ourselves of these subsidies AND the min wage and allow a free market.
November 6, 2013
No because all your suggestions will do is make working worse for low paid workers.
November 5, 2013
So the answer is not the free market, but subsidies for companies in the form of wages topped up by the taxpayer.We knew that already. Socialising losses and privatising profits. Socialism for the rich in effect and communism for those at the top. Energy companies are already carving it up for themselves by acting in a cartel like manner. When was the last time they tried to undercut each other? The are like banks taxing the population for their own profits and taking us for mugs. Maybe you could tell us how oppressive child labour laws preventing small children earn income for their families and employer in your regressive dream world Frank? Ram it.
Ram it.
November 5, 2013
By using banks and energy companies as examples Baz, are you not actually agreeing with most on here who feel the controlled and subsidised markets such as these, added to the equally subsidised and controlled markets for rent and labour are at the heart of our problems not the solution.
November 6, 2013
If these markets were controlled I doubt that there’d be so many above inflation increases.
November 4, 2013
Watching the documentary on Roll Royce aircraft engines I was struck by how much their success depends on protecting their trade secrets and intellectual property. They can justify their prices and place in the market because of their leading designs and production methods. We are lucky this leading IP resides in one company in the UK, and they have been good at protecting it.
Sadly in most other British businesses, they get bought by international organisations who then pass the leading intellectual property to other countries. As a high cost base country we need leading intellectual property and techniques to justify premium prices versus lower cost base economies, it is financial suicide to keep letting our best intellectual property slip through our fingers and end up being used in China and India – often without any licence or royalty fees back to the UK where it was invented.
The political class seem to be running the country as if they expect us to compete on the word markets on price only, which any fool can see is impossible with our high social overheads.
For me it’s a simple equation, protect your intellectual property better and you can justify a higher average wage per hour, this is an equation this country needs to get a grip of. At the moment we are far too naïve and our friendship is being abused by ruthless competitors.
November 4, 2013
Or, perhaps better still do away with the notion of ‘intellectual property’, patents, copyright etc etc.
This is surely just another form of state sponsored monopolisation (and now spreading globally, sadly)
November 5, 2013
It can never work like that or nobody would ever invest in research.
November 4, 2013
I read that the proposed and limited tax break is for one year only. It sums up what is wrong with UK politicians – the constant search for gimmicks to fool people and to win votes spending other people`s money for them and short term expedients.
Along the way it is likely to add to inflation (as firms seek to cover their extra costs through higher prices), reduce employment (as firms seek to automate work if that costs less), push some firms out of business (namely those currently operating at or beyond the their cash flow) and will add yet more pages to one of the longest tax codes in the world (increasing bureaucracy and inefficiency). The political class would be better employed simplifying the tax code, raising the threshold at which income tax starts to be paid and removing national insurance as well for everyone below the it. It is a striking characteristic of Miliband policies that so many depend on spending other people`s money whether it is businesses, as in this latest proposal, or consumers, as through the ROCs.
November 4, 2013
This all reminds me of Gordon Brown’s incessant tinkering at the edges of the problem.
November 4, 2013
We need to reduce the size of the State. A smaller State sector will result in a smaller tax burden for all, especially the lower income earners.
Benefits is a means to create a State dependent culture and a Socialist voting base.
We have opened up our labour markets to the world and people simply cannot get a job that pays a decent enough wage to support themselves. QE and inflation is destroying both savings and the pension market. The Pension market creates jobs through investment which creates growth. The Government, Local, National and Supra-National are creating ever increasing amounts of rules and regulations (and no Cameron is not going to get the red tape reduced) hurting SME’s.
What we need is less Government, not more !
November 4, 2013
The lower income earners already have a low tax burden because those on low earnings pay less income tax. All your tax cuts will do is benefits the wealthy.
Also benefits are a way of ensuring that companies can pay low wages while ensuring that the low paid can live on these low wages, so cutting these benefits will make people less able to work.
November 4, 2013
Uanime5
Wrong as normal, the very low paid pay 37% of all they earn in taxes
November 4, 2013
That’s a very precise figure!
Uni is correct. The poorest get hit hardest by VAT, high rents, high fuel costs, high water costs, food prices and travel costs. Changes to income tax will not help much.
November 5, 2013
Dear Credible
Try reading, Uanime5 said they DON”T pay tax. I just showed you they DO.
Its a precise figure exactly because its a fact !
I was right about the poor paying tax and Uni was wrong.
Socialists really are hopeless with facts
November 6, 2013
Care to provide some figures for those on different income for comparison. Along with your source.
Also I only mentioned that those on low incomes pay little income tax, so income tax cuts won’t benefit them. I never said that the poor don’t pay any taxes. Perhaps you should try reading what people write.
November 6, 2013
Uanime5
Try reading your own posts you said low income earners have and I quote
“a low tax burden”
Nope you’re wrong the low income tax burden is in the form of council tax, VAT, petrol, fag, drink and energy duty
Here http://www.dailymail.co.uk/news/article-2027698/Ever-wondered-tax-REALLY-pay-Even-basic-rate-taxpayers-forced-hand-40p-pound.html
and here is full breakdown
http://www.taxpayersalliance.com/?s=total+taxes+paid+by+individual&submit.x=0&submit.y=0&submit=Search
November 5, 2013
So according to you anyone not on lower income, that is anyone who is on an average or higher income, is therefore weakthy. This includes professionals such as doctors, engineers, teashers etc and those people who are employers or put up the money for companies to be formed and continue. These people you want to punish…
November 6, 2013
I never claimed anyone who wasn’t poor was wealthy and I have no idea why you’d think I did. I just said that the poor generally don’t benefit from income tax cuts.
November 6, 2013
So you are happy that some changes that benefit the net taxpayer are OK even if they don’t benefit the poor or low paid?
November 4, 2013
A minimum income is an excellent idea. £10,000 per adult eg and £2,000 per child. Abolish all benefits, pensions, minimum wages etc. Then for every £1 you earn you lose 50p of benefit. a flat tax of 25% kicks in at £20,000, so its always worth working, even part-time. Result? 1) higher tax receipts due to incentives; 2) much more work – no-one faces the current invidious choice of work at a huge marginal tax rate due to benefit withdrawal 3) huge cost savings in the cost of admin, 4) the poorest (eg state pensioners) are much better off. The Conservatives should go for this or something like it at the next election.
November 4, 2013
Above all I want to promote policies that will deliver more better paid jobs. The only way we can all enjoy higher living standards is if our economy produces more, either to sell to ourselves or to sell to foreigners in exchange for imports. If we produce more we can consume more.
Oh boy, isn’t this all rather tired. We have to be endlessly more productive so we can consume more! And more! And more!
Surely it is time we thought about how to create a society where we can all live decent quality lives sustainably.
We all need somewhere to live, food and energy for heat and light.
Yet it seems to be beyond us to devise any sort of system that delivers this. Instead we seem to be locked into a race to the bottom – with higher and higher ‘productivity’ and more and more consumption being required, ad infinitum.
So, okay, we can’t devise such a system. There is no magic wand. So we have to think in general terms. If, for example. I had 10 acres of land and could grow enough food to feed 3 generations of the same family and had a well and a windmill and enough solar panels etc. (in an ideal world) so that I could exist comfortably – I wouldn’t need to be involved in the race to the bottom. But we can’t do that in this country because there are too many people and the land is in too few hands.
So, in an attempt to raise our quality of life – we should seek to gradually reduce our population. Providing labour markets with an endless supply of cheap, foreign labour is daft. So, one thing we could do, is stop the supply. Which, I am afraid, means leaving the EU.
November 5, 2013
It’s been estimated that you’d only need 1.5 acres per family of four for a balanced diet, heat and electricity if you were willing to buy flour and cereals, so you could prabably support your three generations on half the space – 5 acres.
The race to the bottom is dictated by what you want to spend money on as much as what you earn. Moderate what you want and you don’t need to earn as much. If the government moderated what it took we’d need to earn a lot less.
November 8, 2013
David
Agreed, the less you want or need, the less you need to work for an income.
But:
Do not forget that working is needed to work the land, to harvest the crops, or to milk the goats.
Thus you need to be reasonably fit and in good health, to remain as such without outside support, which needs to be paid for, unless of course the other members of the family support those who are older and younger..
November 4, 2013
At this rate why doesn’t govt just issue a decree stating ” No More Poverty ” ?
We have so many ludicrous diktats, just replace them all with one catch-all.
November 4, 2013
Indeed Gary
Why not bring in the living wage at a high level and abolish poverty once and for all,.
Whilst we are at it we could introduce a maximum working weekly of 25 hours to encourage job sharing which could eliminate unemployment at the same time.
Doubles all round!
November 4, 2013
Agreed – and in due course “Four legs good, two legs better”. It is the right thing to do, as New Labour would say.
Miliband has hit upon something that will appeal to Lefties and appears to promote social justice in some form so people generally will smile upon it. Consistent with the poverty of modern politics, Dave and Nick should each say they will match whatever it is that is being proposed, whatever it is exactly. Wind out of Miliband’s sails and the only price is that the dependency culture thrives for a while longer but with an extra disguise.
November 4, 2013
Everyone wants more production, more exports. Sadly policy from both parties’s front benches doesn’t match the rhetoric.
Cheap money for a long time has redirected capital away from the production that can make us richer towards consumption. We see shopping malls built, not factories and inevitably we must get poorer when the credit dries up.
Continually greater regulation and ever more complicated tax will boost pay for accountants and solicitors whilst adding to a company’s costs and reducing the pay for the ordinary man.
High immigration rates force down wages for people in the UK, particularly those closer to the bottom of the scale and anyone in sectors that stay the same across borders (e.g. in software but not criminal law)
Finally modern banking, with all its central bank aided monetary creation actually causes a redistribution of wealth from the poor to the rich! What else can it do when the medium of exchange increases in supply.
These are the fundamentals that must be addressed to make us richer. Sounds money, less regulation, simpler tax. Everything else just doesn’t work and divides society as different groups are pitted against each other via policy.
November 4, 2013
Labour’s new idea will lead either to other taxes rising (including income tax – you’d better believe it) and/or to employers carrying increased costs. Neither of these strikes me as clever.
November 4, 2013
It is wrong to stipulate a minimum wage . If someone wants a job and has the skill and background an employer needs , they should be free to decide between them . The UK , in order to deliver the goods the markets require , has to accept that without natural resources , it must opt for high added value products ; built into the sale price is the continuing need to train and maintain skilled labour ; this critical feature lies at the heart of employee relations and the rate for a job . Employers should not have to face other unnecessary constraints .
November 6, 2013
You seem to have ignored that employers are far more able to set the price of labour than employees, especially for unskilled work. So removing employment law will just lead to more employees being worse off.
Also the UK is declining because employers are refusing to train employees since they can get immigrants who will usually work for a lower wage.
November 4, 2013
John,
Don’t you think that the solution is raise PAYE to be over the minimum wage?
See
http://www.adamsmith.org/blog/economics/welcome-to-tax-poverty-week
and
http://www.forbes.com/sites/timworstall/2013/11/03/5-million-britons-are-living-in-tax-poverty/
“This coming week in Britain is supposed to be all about the Living Wage. A much better description of what is happening would be that we are actually celebrating Tax Poverty Week. For the reason that the British poor do not have enough to live on is that, incredibly, the government actually taxes the incomes of the poor. And it doesn’t take the skills of a brain surgeon to work out that if you wanted the poor to have more money you could and should do this by simply taxing them less”
November 6, 2013
The Adam Smith article admits that people will be better off on the living wage than an untaxed minimum wage. So the living wage is the better solution if you want the poor to have more money.
November 4, 2013
Sorry I meant raise the PAYE threshold.
November 4, 2013
Exactly the point I was going to make. It is crazy to take tax of people on this income and then create an incredibly complicated benefits system to give some people that same money back. The one Lib Dem policy I could support is the raise in the lower tax threshold – in fact I would go further than them and raise it further and then remove a lot of the benefits complexity – allowing people to live their lives with less Nanny state interference.
November 8, 2013
John E
Agreed, but its too simple a solution for Politicians.
They need a far more complex and costly solution.
November 4, 2013
What is the point of having a minimum wage when employees pay tax and national insurance on earnings below the minimum. We need the government to raise the starting bands for both of these so that they are not paid by anyone earning minmum wage for a full working week. That is to around £12k for a forty hour week. If necessary the NI costs could be retrieved by raising the level at which the 2% reduced rate NI contributions comes into play. There would also be some reduction in the benefits that need to be paid.
There needs to be a comparable rise in the level at which employers pay NI to encourage them to employ more people full time at minimum wage or above. This would also help the cash flow of smaller employers.
November 4, 2013
@ behindthefrogs
Raising the threshold at which 2% is payable on NI would once again single out those earning around fifty thousand pounds per year to shoulder the burden. That record is getting very worn out. Look for another source while it is still worth them going to work. A family on universal credit can earn the equivalent take home of a fifty thousand earner so they are not rich by any means.
November 4, 2013
Some people have already mentioned tax credits.
The trouble is large corporations can get away with low wages because the state will top them up with tax credits. This means that the taxpayer is in effect subsidising large and profitable companies who could well afford higher wages
We are now committing unskilled workers to a kind of “serfdom” where they are entirely dependent on the state
They can’t get a good education to get the skills they need for employment
They can’t afford to pay for housing and so have to rely on housing benefit from the state
Companies know they can get away with low wages because the government will bail them out with benefits (which of course we taxpayers are paying for)
November 4, 2013
Indeed
November 4, 2013
I’m surprised that no one supported the living wage simply because it will be taxed, while the benefit top-up are not.
November 4, 2013
I didn’t consider that Uni, but it highlights the absurdity of a high tax society where even those on minimum wage are caught by tax and NI.
There is much talk about human rights lately and one basic right I would like to see enshrined is the right to keep at least half of you income or wealth.
I do not consider it fair for the State to take more than 50% from its citizens.
November 4, 2013
Is there not a problem on knock on effects here?
When the minimum wage is raised then those who currently earn more than the minimum will presumably fell entitled to more money?
If there is a worker on £6.20 an hour, who has a supervisor on £8.80 an hour, who has a manager on £10 an hour, assuming that the differential needs to be maintained, then an increase of the worker from 6.20 to 8.80 would cost:
£1.60 for the worker
£3.70 for the supervisor
£1.40 for the manager
November 4, 2013
Er maybe if the terminally stupid Conservative party through their we’re not putting up VAT, er VAT increase and insane green energy scams didn’t take nearly 40% of everything the lower paid earn in taxes then more people would have a wage that they stand a better chance of living on. Maybe if the terminally stupid Conservative Party didn’t levy anti job taxes in the form of extortionate ENI & UBR. Maybe if the Corporatist Conservative Socialist Party had any experience of running SME’s, maybe if they weren’t so totally in bed with the over regulated and highly costed tangle of red tape foisted on us by the EU.
Quite frankly as an employer of many many people ALL of whom earn way in excess of a living wage I’m sick and tired of politicians especially Conservative ones seemingly doing everything in their power to encourage me to take all of my businesses and move abroad
November 4, 2013
Minimum wage and benefit top up for the employed tells us that a sector of society is generally not productive enough to be paid a so called living wage by employers and therefore cannot afford if they are to sell their products and services at a price that customers are willing to pay. The system is just a means of subsidizing businesses that would probably fail without the taxpayer chipping in or they would find means of production that required less labour or relocate to countries that offer lower labour costs. We have seen this scenario many times before where propping up industries and businesses for social and/or political reasons has failed time after time. Therefore it is only reasonable to suggest that when it is done on a national scale then that is just as likely fail as well when the truly productive section diminishes to the point that they are no longer able to prop up the unproductive. To make matters worse of course energy policies, EU and UK regulations are also increasing production costs so encouraging employers to look for saving in labour costs. Politicians, vested interests and bureaucrats do love to centrally control and plan us all into poverty especially those on the left of the political divide
November 4, 2013
How do you explain the low rates for cleaners in London then? Are they not worth more money and if they are not how would this work be relocated to avoid such thing as the minimum wage? They have to pay or be subsidised. Which one? As for propping up the unproductive. What would be the alternative? There can be no peasantry in the UK. A minimum unconditional wage is the only answer. What else? They lie back and accept poverty? No they will not and quite rightly to in one of the richest countries in the world.
November 5, 2013
There is no scarcity of cleaners therefore if you advertise you get scores of decent keen applicants.
Thats why.
November 6, 2013
And that is why we have the minimum wage edward2. To protect the taxpayer from subsidising them to much and the employees from employers exploiting their desperation for their own benefit. A pound an hour for five hours work and three pound to get there? No one would do it and the market would self regulate? No it would not. Never. There would always be some who would do this and they need protecting from themselves. like you would always find a fool to risk his life for peanuts. If you disagree with this you are just plain wrong. This is not the second or third world and you are not going to be allowed to make it that.
November 7, 2013
Stop your relex ranting Baz its getting boring
You will see many times on here I have explained my support of a min wage.
Scarcity and skills is what gives higher wages.
Which was my original point explaining why cleaners only get what they get.
If you were an employer would you pay £15 per hour for cleaners if your advert at £7-50 per hour brought in hundreds of applications?
Well, would you?
November 8, 2013
So it is not a shortage of skills but a shortage of money. If you needed fifty pipefitter/welders and you offered a a hundred quid an hour you would have to many applicants.
November 10, 2013
Very soon if there was a shortage of people with skills desperately needed and wage rates boomed, then one of three things would happen:- either new technology would be invented to do without the job or if impossible, then companies would train up people or individuals would get themselves trained up.
Look at the market for plumbers for example
November 4, 2013
How is the UK minimum wage enforced in the bean fields of East Anglia?
November 4, 2013
It’s not is the short answer. Is this a good thing?
November 4, 2013
We certainly need to be more productive , but we also have to meet the issues as we are faced with them. We cannot for example continue to support those with high salaries if we don’t get anything back for our money collectively.
It is as usual, a case for moderation , fairness and foresight.
November 4, 2013
Mentioning Cameron’s (alleged ed) alliance with Common purpose is off topic ?, or just you don’t want to tell people that he is a socialist and is destroying the conservative party because people might expect you to try and do something about it. Which of course you won’t.
Reply I do not have any evidence to back up your allegations so it takes time to check it out.
November 4, 2013
@Normandee
I thought it was pretty obvious.
November 4, 2013
Look at the Civil Service appointees…..
zorro
November 4, 2013
http://www.telegraph.co.uk/news/politics/10423070/Press-row-PM-faces-questions-over-link-to-charity.html
http://archbishop-cranmer.blogspot.co.uk/2013/11/cameron-common-purpose-prime-minister.html
http://archbishop-cranmer.blogspot.co.uk/2013/11/cameron-common-purpose-prime-minister.html
zorro
November 4, 2013
http://www.commonpurpose.org/info/media-releases/180213_dishaa-alumni-meet-prime-minister-david-cameron-during-visit-to-india
Only three years late I guess in putting it in the books…..
zorro
November 6, 2013
Looks like you are the only one who doesn’t know, or did you just not want to know?
November 4, 2013
” If we go too far down the road of redistribution we make ourselves collectively poorer, as some of the rich leave and cease to make any contribution.”
I don’t think we’re on that road. In fact we are going in the opposite direction. The gap between the richest and the rest is widening rapidly. If people who work don’t get decent pay they will have to work longer (if work is available) or claim from the state then become demoralised, depressed de-motivated, unhealthy and unproductive. The companies they work for will not be successful.
The executives getting paid more and more at the top will not put that money back into the economy. Goods will become too expensive to buy for many people. As a result companies will cut costs and pay their workers less, but productivity will drop further and the market will continue to shrink.
Of course companies need to make money and that means being efficient and setting sensible rates of pay. Of course some people are lazy and play the system. However, the greed at the top at the moment is obscene and although it makes some people very wealthy, it doesn’t help the economy grow. Politicians are complicit in this. At the moment aspirations are being destroyed, which must be a worry for the Conservative party who supposedly believe in people working hard to better themselves.
November 7, 2013
Has the cost of housing fell relative to earnings on labour?
Has the cost of energy fell relative to earnings on labour?
Has the cost of food fell relative to earnings? labour
Have taxes on income fallen relative to earnings on labour?
Have labour rates risen due to these economic pressures? Why not?
Do we think Globalism is working well for us?
Is the EU and our governments the problem not the solution?
Seems to me squeezing some living standards is working to plan.. after all someone has to pay and we know how that works out in real life.
Question is who benefits?
I doubt its a chinese factory worker in the grand scheme of things.
Does the Senior Quangos, Beeboids, ever notice any of the above. Or are too many flying to high even see the problem?Let alone care.
How about scrapping the BBC tax? That’s easy and simple. No problem with the EU?
It would boost discretionary income? allow competition. Some may even willing pay for its services? It would also reduce offending? Less criminals almost overnight ? It would reduce court bureaucracy and costs? Whats not to like?
Must be an election or something?