Tax rises of £40bn needed by mid-2020s

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The Chancellor Philip Hammond said the UK economy had reached a turning point and there was "light at the end of the tunnel". He told MPs growth was now forecast to be 1.5% in 2018, up from 1.4% forecast by the Office for Budget Responsibility in November. Debt is also expected to fall as a share of GDP from 2018-19, the first drop in 17 years.

Turning point? More lies from the Tories who are trying to bury this story .. not enough people or companies paying tax. Too much money wasted.

Paul Johnson, director of the Institute for Fiscal Studies (IFS), said that "nothing much" has changed. He said the good news on borrowing would "largely wash out" over the next few years, while the structural deficit in 2019-20 would be almost unchanged. He also said the UK's growth prospects were "among the worst in the G20".

"The reality of the economic and fiscal challenges facing us ought to be at the very top of the news agenda, " Mr Johnson said.

"And I mean the reality, not the spin and bluster of politicians on all sides pretending there are easy solutions." Mr Johnson said the UK was still suffering the hangover of the 2008 financial crisis, which had led to the worst decade of growth since "at least" World War Two.

The economy is now 14% smaller than would have been expected, based on pre-crisis trends, while median earnings remain below their 2008 level, he said. He said the big problem facing the chancellor was how to balance growing demands for spending increases with his desire to cut the deficit by the mid 2020s. On the one hand, he said public services such as prisons and the NHS were struggling "in a way that they were not two or three years ago".

However, this job was made tougher because the government had taken large numbers of people out of paying income tax and had failed to tackle the growing number of self-employed people who paid less tax.

"If high-paid jobs - and EU citizens, who are well represented among high earners in the UK - relocate elsewhere, the consequences for the Exchequer will be severe," Mr Johnson said.

Given the outlook, the think tank said tax rises of £30bn would be needed each year to retain public spending and balance the budget by the middle of the next decade.

An extra £11bn would be required to cover social care, health and pension costs for the ageing population, it said.

As reported by the BBC.

My pump-action drivel gun is smoking hot today!
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Comments

  • exocetexocet Frets: 499
    Tax rises need to happen and the Tax Base needs to "broaden". The longer we leave it, the worse it will be. As much as I'd like to think that "soaking the rich" would raise the required revenues, any analysis that I have seen on the subject says otherwise....we all need to pay more.
    On a personal level, I don't understand why I'm paying only £30 a year in Vehicle Excise Duty.....complete waste of time which probably doesn't even cover the admin costs. Time to put VED onto Petrol / Diesel whilst that is still an option.


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  • VimFuegoVimFuego Frets: 5953
    thing is, how can the population be expected to pay more with rocketing house prices? And what jobs will people be doing to pay those taxes? I thought robots were gonna make us all redundant. Until they tackle these issues, then it's all talk.

    I'm not locked in here with you, you are locked in here with me.

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  • ICBMICBM Frets: 30850
    exocet said:
    Tax rises need to happen and the Tax Base needs to "broaden". The longer we leave it, the worse it will be. As much as I'd like to think that "soaking the rich" would raise the required revenues, any analysis that I have seen on the subject says otherwise....we all need to pay more.
    On a personal level, I don't understand why I'm paying only £30 a year in Vehicle Excise Duty.....complete waste of time which probably doesn't even cover the admin costs. Time to put VED onto Petrol / Diesel whilst that is still an option.
    Surprisingly for most people, the rich already pay the bulk of income tax - trying to tax them more, beyond a very small increase, will be counterproductive. Whether or not you agree with him, it is a fact that when Nigel Lawson removed all the higher rates of tax, the overall take went up, and the reverse would happen if they were re-imposed. The problem is that the *average* rate of tax is too low, and we *all* - other than the genuinely poor - need to pay more. No-one wants to hear this but it's the truth...

    We pay ourselves too much, for doing too little work, borrow too much and pay too much in interest, and pay too little tax, to sustain the high standard of living we've become accustomed to indefinitely, both at a personal and a national level. This will sound very old-fashioned, but essentially we've been living on the never-never for at least the last forty years and the chickens are now going to come home to roost.
    "Take these three items, some WD-40, a vise grip, and a roll of duct tape. Any man worth his salt can fix almost any problem with this stuff alone."
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  • FretwiredFretwired Frets: 15255
    VimFuego said:
    thing is, how can the population be expected to pay more with rocketing house prices? And what jobs will people be doing to pay those taxes? I thought robots were gonna make us all redundant. Until they tackle these issues, then it's all talk.
    ^^
    This. We're already overtaxed.

    Government could start by not wasting money through incompetence. The NHS IT system that was cancelled will end up costing £20 billion and maybe we should flog the aircraft carriers as the jets have just become too expensive .. so expensive the MoD refuses to say what we'll pay for them as 'hidden' costs in the contracts haven't been added up.

    And at least leaving the EU means we can tax Amazon properly.
    My pump-action drivel gun is smoking hot today!
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  • exocetexocet Frets: 499
    Fretwired said:
    VimFuego said:
    thing is, how can the population be expected to pay more with rocketing house prices? And what jobs will people be doing to pay those taxes? I thought robots were gonna make us all redundant. Until they tackle these issues, then it's all talk.
    ^^
    This. We're already overtaxed.

    Government could start by not wasting money through incompetence. The NHS IT system that was cancelled will end up costing £20 billion and maybe we should flog the aircraft carriers as the jets have just become too expensive .. so expensive the MoD refuses to say what we'll pay for them as 'hidden' costs in the contracts haven't been added up.

    And at least leaving the EU means we can tax Amazon properly.
    Are we overtaxed? We currently don't pay as much as the Scandics, we pay less than the Germans and French and have significantly lower levels of state benefits (unemployment / pensions).

    House Prices are another matter......that and pensions!! I've said for the past 30 years that we can't have high property prices and pay for ourselves in retirement. Whilst it can work in the short term (for those who already own property), it can't work in the long term.

    Yes there is government waste, but realistically, once the "one off" debacles are removed from the equation, we still fall short of the revenues that are required to meet demands. 

    Radical overhaul of how we deliver all public services is required.....but that means increase in Private Sector involvement. Who is going to vote for that right now? 

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  • FretwiredFretwired Frets: 15255
    edited March 14
    exocet said:
    Fretwired said:
    VimFuego said:
    thing is, how can the population be expected to pay more with rocketing house prices? And what jobs will people be doing to pay those taxes? I thought robots were gonna make us all redundant. Until they tackle these issues, then it's all talk.
    ^^
    This. We're already overtaxed.

    Government could start by not wasting money through incompetence. The NHS IT system that was cancelled will end up costing £20 billion and maybe we should flog the aircraft carriers as the jets have just become too expensive .. so expensive the MoD refuses to say what we'll pay for them as 'hidden' costs in the contracts haven't been added up.

    And at least leaving the EU means we can tax Amazon properly.
    Are we overtaxed? We currently don't pay as much as the Scandics, we pay less than the Germans and French and have significantly lower levels of state benefits (unemployment / pensions).

    House Prices are another matter......that and pensions!! I've said for the past 30 years that we can't have high property prices and pay for ourselves in retirement. Whilst it can work in the short term (for those who already own property), it can't work in the long term.

    Yes there is government waste, but realistically, once the "one off" debacles are removed from the equation, we still fall short of the revenues that are required to meet demands. 

    Radical overhaul of how we deliver all public services is required.....but that means increase in Private Sector involvement. Who is going to vote for that right now? 

    I lived in Denmark. Whilst income tax was higher they paid a lower amount of their overall income in tax. Danes got a shock when they came to the UK. Simple example, if you commute to work by car for one hour a day look at how much tax you are paying on the fuel alone. In Copenhagen the public transport is cheap and quick. Few people bother owning a car as its expensive. Living expenses are higher in the UK than say Denmark. We pay VAT on most things, stamp duty on buying a house, capital gains tax ... fancy a glass of wine with your meal at home? Look at the tax on alcohol. Add NI into the mix ...

    I was told by a government minister that if the government raises £10 and decides to give that £10 to the NHS there's only £1 left when the cash is handed over.
    My pump-action drivel gun is smoking hot today!
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  • exocetexocet Frets: 499
    edited March 14
    Fretwired said:
    exocet said:
    Fretwired said:
    VimFuego said:
    thing is, how can the population be expected to pay more with rocketing house prices? And what jobs will people be doing to pay those taxes? I thought robots were gonna make us all redundant. Until they tackle these issues, then it's all talk.
    ^^
    This. We're already overtaxed.

    Government could start by not wasting money through incompetence. The NHS IT system that was cancelled will end up costing £20 billion and maybe we should flog the aircraft carriers as the jets have just become too expensive .. so expensive the MoD refuses to say what we'll pay for them as 'hidden' costs in the contracts haven't been added up.

    And at least leaving the EU means we can tax Amazon properly.
    Are we overtaxed? We currently don't pay as much as the Scandics, we pay less than the Germans and French and have significantly lower levels of state benefits (unemployment / pensions).

    House Prices are another matter......that and pensions!! I've said for the past 30 years that we can't have high property prices and pay for ourselves in retirement. Whilst it can work in the short term (for those who already own property), it can't work in the long term.

    Yes there is government waste, but realistically, once the "one off" debacles are removed from the equation, we still fall short of the revenues that are required to meet demands. 

    Radical overhaul of how we deliver all public services is required.....but that means increase in Private Sector involvement. Who is going to vote for that right now? 

    I lived in Denmark. Whilst income tax was higher they paid a lower amount of their overall income in tax. Danes got a shock when they came to the UK. Simple example, if you commute to work by car for one hour a day look at how much tax you are paying on the fuel alone. In Copenhagen the public transport is cheap and quick. Few people bother owning a car as its expensive. Living expenses are higher in the UK than say Denmark. We pay VAT on most things, stamp duty on buying a house, capital gains tax ... fancy a glass of wine with your meal at home? Look at the tax on alcohol. Add NI into the mix ...

    I was told by a government minister that if the government raises £10 and decides to give that £10 to the NHS there's only £1 left when the cash is handed over.
    I agree with your observations on Denmark, my sister has lived there for 30 years (20 of which in Copenhagen). 
    Whilst the visible taxation rates struck me as being higher, they appeared to include more "services" that we in the U.K would typically pay in addition. Can't remember the specifics now but it was something like local property taxes (council tax) also included water rates. Also, as you say, Public Transport is cheap, plus they are "hard as nails" and ride their bicycles everywhere in all weather conditions!

    I guess it all boils down to "disposable income", my "gut feel" is that disposable income levels in the U.K for the overwhelming majority of people are depressingly low. How have we allowed this to happen and can anything be done to improve the situation over a 20 year time frame?
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  • munckeemunckee Frets: 936
    Our tax system is incredibly complicated and as you say many countries pay 50% income tax but spend less on tax than we do.  Our system has been fudged by various governments to please taxpayers by ensuring everybody pays tax by way of VAT fuel and alcohol duty rather than putting it on income and seeing those on benefits etc not pay any tax.

    To be fair though every week a story comes out with a wildly different picture of where our economy is, I'll just read a positive story next week to cheer myself up!
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  • ICBMICBM Frets: 30850
    exocet said:

    I guess it all boils down to "disposable income", my "gut feel" is that disposable income levels in the U.K for the overwhelming majority of people are depressingly low. How have we allowed this to happen and can anything be done to improve the situation over a 20 year time frame?
    How it has been allowed to happen is mostly down to the unsustainably high cost of housing, which has been driven by easy borrowing, and absorbs far too high a proportion of our income. Serious measures to drive down prices over the long term need to be contemplated, both carrot and stick - ie taxing house price gains more, and investing more in building houses. So far every government since 1979 has made the problem worse every time there is even the hint of a slowdown in the housing market.
    "Take these three items, some WD-40, a vise grip, and a roll of duct tape. Any man worth his salt can fix almost any problem with this stuff alone."
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  • munckeemunckee Frets: 936
    ICBM said:
    exocet said:

    I guess it all boils down to "disposable income", my "gut feel" is that disposable income levels in the U.K for the overwhelming majority of people are depressingly low. How have we allowed this to happen and can anything be done to improve the situation over a 20 year time frame?
    How it has been allowed to happen is mostly down to the unsustainably high cost of housing, which has been driven by easy borrowing, and absorbs far too high a proportion of our income. Serious measures to drive down prices over the long term need to be contemplated, both carrot and stick - ie taxing house price gains more, and investing more in building houses. So far every government since 1979 has made the problem worse every time there is even the hint of a slowdown in the housing market.
    Certainly in the south everyone wants to build on the remaining bits of green in the already built up areas rather than build new towns because no-one wants to address the fact that hospitals/schools etc are already full.  We can't build new houses without infrastructure.
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  • Jock68Jock68 Frets: 130
    Why not start be removing cost, we have had decades of incompetent governments that waste money and deliver no value.    Why does anyone think that Government know best when it comes to spending your money.   We need to remove Government responsibility and reduce the % of GDP that it costs to Govern this nation.

    Putting more money back in the pockets of the workers should be the overall objective.  Part of the problem in the NHS is Government interference and it being used as a political football every 5 years, so take politicians out of the equation. 

    We need to open up up land so that people can build their own houses and not be dependent on Large Corporate Companies.  People having secure accommodation is a simple one but Politicians interfere.  Only 2.5% of our land area has house built on it, open up some more land that should reduce prices.  

    By reducing Income Tax it will allow people to make life choices and plan for their future life.  

    Anyone who believes that stealing money from Dead people is OK will not agree with my approach, they believe that they know better how to spend the money that you have earned.
    Jock
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  • ICBMICBM Frets: 30850
    edited March 14
    Jock68 said:
    Why not start be removing cost, we have had decades of incompetent governments that waste money and deliver no value.    Why does anyone think that Government know best when it comes to spending your money.   We need to remove Government responsibility and reduce the % of GDP that it costs to Govern this nation.
    Every single government, of both parties, since the war or even earlier has tried to cut waste. It's a nice idea but it simply never works. Cutting spending just affects public services for the least well off.

    The *only* viable solution is to raise taxation.

    We also need to increase the proportion of GDP spent by the government, not reduce it. Since Denmark was mentioned earlier, it's worth noting that they have one of the highest proportions of GDP spent by the government of any country in the EU, and the highest standard of living. This is not a coincidence - in fact it's quite consistent if you correlate the two factors. The neoliberal dogma that the private sector is more efficient than the public sector is wrong.
    "Take these three items, some WD-40, a vise grip, and a roll of duct tape. Any man worth his salt can fix almost any problem with this stuff alone."
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  • HeartfeltdawnHeartfeltdawn Frets: 10679
    ICBM said:
    exocet said:
    Tax rises need to happen and the Tax Base needs to "broaden". The longer we leave it, the worse it will be. As much as I'd like to think that "soaking the rich" would raise the required revenues, any analysis that I have seen on the subject says otherwise....we all need to pay more.
    On a personal level, I don't understand why I'm paying only £30 a year in Vehicle Excise Duty.....complete waste of time which probably doesn't even cover the admin costs. Time to put VED onto Petrol / Diesel whilst that is still an option.
    Surprisingly for most people, the rich already pay the bulk of income tax - trying to tax them more, beyond a very small increase, will be counterproductive. Whether or not you agree with him, it is a fact that when Nigel Lawson removed all the higher rates of tax, the overall take went up, and the reverse would happen if they were re-imposed. The problem is that the *average* rate of tax is too low, and we *all* - other than the genuinely poor - need to pay more. No-one wants to hear this but it's the truth...

    We pay ourselves too much, for doing too little work, borrow too much and pay too much in interest, and pay too little tax, to sustain the high standard of living we've become accustomed to indefinitely, both at a personal and a national level. This will sound very old-fashioned, but essentially we've been living on the never-never for at least the last forty years and the chickens are now going to come home to roost.

    What do you class as genuinely poor in per annum gross income? 



    I make Jeremy Paxman look like Fingermouse. 
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  • HeartfeltdawnHeartfeltdawn Frets: 10679
    Jock68 said:
    Why not start be removing cost, we have had decades of incompetent governments that waste money and deliver no value.    Why does anyone think that Government know best when it comes to spending your money.   We need to remove Government responsibility and reduce the % of GDP that it costs to Govern this nation.

    Putting more money back in the pockets of the workers should be the overall objective.  Part of the problem in the NHS is Government interference and it being used as a political football every 5 years, so take politicians out of the equation. 

    We need to open up up land so that people can build their own houses and not be dependent on Large Corporate Companies.  People having secure accommodation is a simple one but Politicians interfere.  Only 2.5% of our land area has house built on it, open up some more land that should reduce prices.  

    By reducing Income Tax it will allow people to make life choices and plan for their future life.  

    Anyone who believes that stealing money from Dead people is OK will not agree with my approach, they believe that they know better how to spend the money that you have earned.

    In many sectors, government responsibility was removed via the privatisation that we now enjoy. The NHS, the railways, our utilities, countless outsourcing experiments, the lunacy of PFI. If you reduce government responsibility (ie. reduce the public sector) then you are forced to rely upon those large corporate companies that you rail against. As usual, your argument makes little to no sense. it smacks of Youtube libertarian. 



    I make Jeremy Paxman look like Fingermouse. 
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  • Phil_aka_PipPhil_aka_Pip Frets: 8424
    There's talk of "taxing wealth". Apparently, Council tax already does that. Thing is, if you tax "wealth" any more than is done already, people living in Band D houses will sell up and try to buy Band C houses ... and so-on so eventually nobody will have any "wealth" except those with houses in Bands A & B. Plus, them that believe in taxing "wealth" don't take into account that taxes have to be paid with money, and if you don't earn a lot you can't pay the tax, regardless of how much the wealth-taxers think your house is worth.
    "Working" software has only unobserved bugs. (Parroty Error: Pieces of Nine! Pieces of Nine!)
    Seriously: If you value it, take/fetch it yourself
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  • HeartfeltdawnHeartfeltdawn Frets: 10679
    edited March 14
    ICBM said:
    exocet said:
    Tax rises need to happen and the Tax Base needs to "broaden". The longer we leave it, the worse it will be. As much as I'd like to think that "soaking the rich" would raise the required revenues, any analysis that I have seen on the subject says otherwise....we all need to pay more.
    On a personal level, I don't understand why I'm paying only £30 a year in Vehicle Excise Duty.....complete waste of time which probably doesn't even cover the admin costs. Time to put VED onto Petrol / Diesel whilst that is still an option.
    Surprisingly for most people, the rich already pay the bulk of income tax - trying to tax them more, beyond a very small increase, will be counterproductive. Whether or not you agree with him, it is a fact that when Nigel Lawson removed all the higher rates of tax, the overall take went up, and the reverse would happen if they were re-imposed. The problem is that the *average* rate of tax is too low, and we *all* - other than the genuinely poor - need to pay more. No-one wants to hear this but it's the truth...

    We pay ourselves too much, for doing too little work, borrow too much and pay too much in interest, and pay too little tax, to sustain the high standard of living we've become accustomed to indefinitely, both at a personal and a national level. This will sound very old-fashioned, but essentially we've been living on the never-never for at least the last forty years and the chickens are now going to come home to roost.

    The distortion caused to the economy by housing is mighty. When you see the London pattern replicated elsewhere despite differing taxation systems and economies, then it's clear that housing booms worldwide is a problem worldwide. Couple that with the erosion of middle earning jobs, the destruction of manufacturing, outsourcing to other countries, an economy based on over consumption and credit, the online world and the advance of automation and mechanisation, and the rise of China, then it's really a mes that won't get sorted out unless there is a real period of collapse to my mind. 

    We could tell people to spend less on things they don't need: how does that work with an economy based on consumption? 

    The Brexit thread has people calling for a return to manufacturing: well, making what? Microprocessors are sewn up elsewhere, other countries have cheaper steel, and it appears that a sizable amount of people on the Leave side of the equation believe importing more food is the way forward to reduce costs for the British punter. 

    It's a desperately difficult situation. 


    I make Jeremy Paxman look like Fingermouse. 
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  • HeartfeltdawnHeartfeltdawn Frets: 10679
    There's talk of "taxing wealth". Apparently, Council tax already does that. Thing is, if you tax "wealth" any more than is done already, people living in Band D houses will sell up and try to buy Band C houses ... and so-on so eventually nobody will have any "wealth" except those with houses in Bands A & B. Plus, them that believe in taxing "wealth" don't take into account that taxes have to be paid with money, and if you don't earn a lot you can't pay the tax, regardless of how much the wealth-taxers think your house is worth.
    And it's a crap way of taxing wealth. 

    Someone renting a band D house in Bath pays £1540.92 per annum: someone who owns a multi-million pound house on the Royal Crescent in the same city pays £3081.84. The income disparity between the two is likely to be way more than "mortgaged owner earns double what the renter earns". 
    I make Jeremy Paxman look like Fingermouse. 
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  • ICBMICBM Frets: 30850
    Heartfeltdawn said:

    What do you class as genuinely poor in per annum gross income? 
    Not sure. It's certainly not me though...

    Probably only those who don't earn enough to get by without benefits. The other important point is that actually the increase needed isn't all that great for it to make a substantial difference, if it's applied to more or less everyone.
    "Take these three items, some WD-40, a vise grip, and a roll of duct tape. Any man worth his salt can fix almost any problem with this stuff alone."
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  • FretwiredFretwired Frets: 15255
    ICBM said:

    We pay ourselves too much, for doing too little work, borrow too much and pay too much in interest, and pay too little tax, to sustain the high standard of living we've become accustomed to indefinitely, both at a personal and a national level. This will sound very old-fashioned, but essentially we've been living on the never-never for at least the last forty years and the chickens are now going to come home to roost.

    I don't think we do. Wages in real terms have fallen and have hardly risen since 2008.

    Our problems are political. The political class are mostly drawn from the same background and have little or no knowledge about business and wealth creation. The government's Industrial Strategy is a joke. The word 'innovation' appears once in the whole document. A senior guy at Airbus in the UK laughed .. thought it looked like something a few A-level economics students could have written. I was advised to look at the German version - strategic planning, education supplying skilled graduates, banks lending money etc.

    We don't back innovation or industry. We invented the train but most of our high speed trains are made in Germany or Italy. In Germany the rail industry is protected. Siemens can't sell it's train making arm with the government agreeing. We'll sell the crown jewels to anyone. So Cadbury's chocolate is now made in Eastern Europe. JLR are building plants in Eastern Europe, China, India and Brazil and may move UK plants as the UK lacks skills, infrastructure and space to expand production.

    Look at most of our big companies and they're foreign owned. GKN is now being broken up and sold and the vultures are out for Rolls Royce (the aero manufacturer). We let our car industry crash and burn - Mini's are now made by the Germans who have plants in Europe. Bentley and Rolls are German, JLR is Indian and Aston Martin is preparing a sale with Mercedes eyeing them up.

    The way out of the mess is to generate more wealth and that needs skills, money (banks lending to businesses rather than property developers) and a government willing to back innovation and protect key industries from hostile takeovers.

    Welcome to Tory Britain .. short termism to save money but bugger the economy. Two examples:

    https://www.theguardian.com/business/2011/jul/05/bombardier-cuts-1400-jobs-german-rival-contract

    https://www.theguardian.com/commentisfree/2011/jul/11/decline-britains-train-manufacturing-industry




    My pump-action drivel gun is smoking hot today!
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  • HeartfeltdawnHeartfeltdawn Frets: 10679
    Fretwired said:
    ICBM said:

    We pay ourselves too much, for doing too little work, borrow too much and pay too much in interest, and pay too little tax, to sustain the high standard of living we've become accustomed to indefinitely, both at a personal and a national level. This will sound very old-fashioned, but essentially we've been living on the never-never for at least the last forty years and the chickens are now going to come home to roost.

    I don't think we do. Wages in real terms have fallen and have hardly risen since 2008.

    Our problems are political. The political class are mostly drawn from the same background and have little or no knowledge about business and wealth creation. The government's Industrial Strategy is a joke. The word 'innovation' appears once in the whole document. A senior guy at Airbus in the UK laughed .. thought it looked like something a few A-level economics students could have written. I was advised to look at the German version - strategic planning, education supplying skilled graduates, banks lending money etc.

    We don't back innovation or industry. We invented the train but most of our high speed trains are made in Germany or Italy. In Germany the rail industry is protected. Siemens can't sell it's train making arm with the government agreeing. We'll sell the crown jewels to anyone. So Cadbury's chocolate is now made in Eastern Europe. JLR are building plants in Eastern Europe, China, India and Brazil and may move UK plants as the UK lacks skills, infrastructure and space to expand production.

    Look at most of our big companies and they're foreign owned. GKN is now being broken up and sold and the vultures are out for Rolls Royce (the aero manufacturer). We let our car industry crash and burn - Mini's are now made by the Germans who have plants in Europe. Bentley and Rolls are German, JLR is Indian and Aston Martin is preparing a sale with Mercedes eyeing them up.

    The way out of the mess is to generate more wealth and that needs skills, money (banks lending to businesses rather than property developers) and a government willing to back innovation and protect key industries from hostile takeovers.

    Welcome to Tory Britain .. short termism to save money but bugger the economy. Two examples:

    https://www.theguardian.com/business/2011/jul/05/bombardier-cuts-1400-jobs-german-rival-contract

    https://www.theguardian.com/commentisfree/2011/jul/11/decline-britains-train-manufacturing-industry





    A lot of people are underpaid. Those higher up have been well rewarded. 

    There are political problems and I agree with the short term approach that has been taken over many years and what you say about. It's one of the odd things about Brexit that we're moving away yet the models of other countries are touted as the ones we should be following. 
    I make Jeremy Paxman look like Fingermouse. 
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  • ToneControlToneControl Frets: 4014
    edited March 15
    basic rate income tax was much higher in the 70s, it was 33%
    It's 20% now.

    I think it should be raised to at least 25%, possibly to 30%
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  • FretwiredFretwired Frets: 15255
    edited March 15
    basic rate income tax was much higher in the 70s, it was 33%
    It's 20% now.

    I think it should be raised to at least 25%, possibly to 30%
    You have to look at overall tax and living costs though. VAT wasn't  20% in the 1970s, the Rates weren't as high as Council Tax, property was affordable to buy and rent (we had council houses), public transport was cheaper and widely available and people didn't commute so much. We also have high taxes on vehicle fuel, alcohol and higher property related taxes like stamp duty.

    You are not comparing like with like. A 30 per cent income tax rate would bankrupt many families.
    My pump-action drivel gun is smoking hot today!
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  • HeartfeltdawnHeartfeltdawn Frets: 10679
    basic rate income tax was much higher in the 70s, it was 33%
    It's 20% now.

    I think it should be raised to at least 25%, possibly to 30%
    In an economy that relies so heavily on the service industry, a tax increase of that nature would kill off a huge number of jobs. It could work if we had a strong manufacturing base but we don't. 

    https://www.theguardian.com/business/2011/nov/16/why-britain-doesnt-make-things-manufacturing
    I make Jeremy Paxman look like Fingermouse. 
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  • ToneControlToneControl Frets: 4014
    Fretwired said:
    basic rate income tax was much higher in the 70s, it was 33%
    It's 20% now.

    I think it should be raised to at least 25%, possibly to 30%
    You have to look at overall tax and living costs though. VAT wasn't  20% in the 1970s, the Rates weren't as high as Council Tax, property was affordable to buy and rent (we had council houses), public transport was cheaper and widely available and people didn't commute so much. We also have high taxes on vehicle fuel, alcohol and higher property related taxes like stamp duty.

    You are not comparing like with like. A 30 per cent income tax rate would bankrupt many families.
    the tax before VAT was 25%, there was a short period of low VAT

    Between October 1940 and March 1973 the UK had a consumption tax called Purchase Tax, which was levied at different rates depending on goods' luxuriousness.[5] Purchase Tax was applied to the wholesale price, initially at a rate of 33​1⁄3%. This was doubled in April 1942 to 66​2⁄3%, and further increased in April 1943 to a rate of 100%, before reverting in April 1946 to 33​1⁄3% again. Unlike VAT, Purchase Tax was applied at the point of manufacture and distribution, not at the point of sale. The rate of Purchase Tax at the start of 1973, when it gave way to VAT, was 25%.

    However, your point is basically correct - the background or earning and taxes has changed
    I do think that taxes should increase though
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  • HeartfeltdawnHeartfeltdawn Frets: 10679
    So if we're going fully 1970s with tax and VAT, shouldn't we get a socialist government to go with it? :D
    I make Jeremy Paxman look like Fingermouse. 
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  • FretwiredFretwired Frets: 15255
    basic rate income tax was much higher in the 70s, it was 33%
    It's 20% now.

    I think it should be raised to at least 25%, possibly to 30%
    In an economy that relies so heavily on the service industry, a tax increase of that nature would kill off a huge number of jobs. It could work if we had a strong manufacturing base but we don't. 

    https://www.theguardian.com/business/2011/nov/16/why-britain-doesnt-make-things-manufacturing
    The Guardian article was good but as always it wasn't that simple. Industries couldn't modernise as they faced strikes and banks wouldn't lend them money. The Japanese found a way of making a ship in a factory and then assembling it. This meant you could build a ship faster and cheaper than the traditional method. British yards were resistant to change - the government didn't help and should have stepped in to help with funding and incentives. The French and the German still build ships as government helped the industries evolve and protected them.

    And you can say the same about steel, cars, trains .... when I left school there were jobs a plenty - where I lived we build rockets, planes, jet engines, cars, buses, trucks, radios, machine tools ... all gone. The Tories also had mates who were nothing more than asset strippers - make a quick profit and dump the business they'd just acquired.

    Management was poor and industrial action was rife. I worked with a guy who dad worked at Ford in Dagenham. They were bullied by the union which ensured strikes went ahead when they wanted them. Thatcher's policy of a ballot was popular. My friend told me about a wildcat strike at Ford in which workers lost three days wages. Union men smashed up newly made cars in a parking lot so the plant had to offer the men overtime to catch-up.

    As usual no industrial strategy. 
    My pump-action drivel gun is smoking hot today!
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  • randellarandella Frets: 1737
    ICBM said:
    exocet said:

    I guess it all boils down to "disposable income", my "gut feel" is that disposable income levels in the U.K for the overwhelming majority of people are depressingly low. How have we allowed this to happen and can anything be done to improve the situation over a 20 year time frame?
    How it has been allowed to happen is mostly down to the unsustainably high cost of housing, which has been driven by easy borrowing, and absorbs far too high a proportion of our income. Serious measures to drive down prices over the long term need to be contemplated, both carrot and stick - ie taxing house price gains more, and investing more in building houses. So far every government since 1979 has made the problem worse every time there is even the hint of a slowdown in the housing market.
    If there is to be investment in building houses, and I think there most definitely should be, there need to be careful measures put in place to increase the range and affordability of housing stock..

    Around south Manchester, by far the most common types of housebuilding you see centres around one of two strategies: build crappy shoebox flats in Burnage, tell everyone they're in Didsbury, sell them for £200k.  Build five-bed townhouses actually *in* Didsbury, sell them for £1.2M.

    Actually, there's a third: build even worse shoebox flats in Fallowfield, flog them to private landlords to rent out to students at exhorbitant rates.

    None of which is any use whatsoever to low-income families looking to get on in life, or to single people, or to folk like me and the missus who took a long time and a lot of hard work to get from a flat to a nice house as there's absolutely sod-all in between.

    When you do get to a nice house (or one that's big enough for a family) they cost the earth because you're competing with people who are mortgaged up to the eyeballs - if you don't want to play that game yourself (like me) or can't, like a lot of people, you're buggered.

    We really need to stop the developers cashing in, quick-buck style.
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  • jpfampsjpfamps Frets: 1312
    ICBM said:
    exocet said:

    I guess it all boils down to "disposable income", my "gut feel" is that disposable income levels in the U.K for the overwhelming majority of people are depressingly low. How have we allowed this to happen and can anything be done to improve the situation over a 20 year time frame?
    How it has been allowed to happen is mostly down to the unsustainably high cost of housing, which has been driven by easy borrowing, and absorbs far too high a proportion of our income. Serious measures to drive down prices over the long term need to be contemplated, both carrot and stick - ie taxing house price gains more, and investing more in building houses. So far every government since 1979 has made the problem worse every time there is even the hint of a slowdown in the housing market.
    Actually two Conservative and one Labour cancellors and have made import tax changes that did / will have the effect of reducing house prices.

    Nigel Lawson restricted MIRAS, and Gordon Brown later abolished it.

    George Osbourne brought in a phased reduction in tax relief on interest for BTL landlords.

    I do agree that captal gains from land value increase should be taxed more though.
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  • jpfampsjpfamps Frets: 1312
    Fretwired said:
    ICBM said:

    We pay ourselves too much, for doing too little work, borrow too much and pay too much in interest, and pay too little tax, to sustain the high standard of living we've become accustomed to indefinitely, both at a personal and a national level. This will sound very old-fashioned, but essentially we've been living on the never-never for at least the last forty years and the chickens are now going to come home to roost.

    I don't think we do. Wages in real terms have fallen and have hardly risen since 2008.



    I'm with ICBM on this one.

    Essentially our expected salaries don't match our very poor productivity.

    One stat that seems to get lost is that our balance of payments has been running at record levels.

    We have been maintaining our lifestyle by borrowing money from overseas, which makes one wonder how we'll do after Brexit......

    I do agreed we could do with some people in Government who aren't career politicians and have shown evidence of competance in another area of human endeavour (although few show much competence in their chosen career), but I'm not holding my breath.
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  • FretwiredFretwired Frets: 15255
    jpfamps said:
    Fretwired said:
    ICBM said:

    We pay ourselves too much, for doing too little work, borrow too much and pay too much in interest, and pay too little tax, to sustain the high standard of living we've become accustomed to indefinitely, both at a personal and a national level. This will sound very old-fashioned, but essentially we've been living on the never-never for at least the last forty years and the chickens are now going to come home to roost.

    I don't think we do. Wages in real terms have fallen and have hardly risen since 2008.



    I'm with ICBM on this one.

    Essentially our expected salaries don't match our very poor productivity.

    One stat that seems to get lost is that our balance of payments has been running at record levels.

    We have been maintaining our lifestyle by borrowing money from overseas, which makes one wonder how we'll do after Brexit......

    I do agreed we could do with some people in Government who aren't career politicians and have shown evidence of competance in another area of human endeavour (although few show much competence in their chosen career), but I'm not holding my breath.
    Our poor productivity is actually down to the service sector with one of the worst being the City and yet the City makes shedloads of cash. Look at a company like JLR and they are productive and efficient. We just don't have enough of them. The UK's economy isn't comparable with that of Germany or even the USA.

    From the FT:

    Bankers, telecoms companies, energy producers and management consultants are among the principal culprits for the UK’s poor productivity performance since the financial crisis.

    Data from the Office for National Statistics show that just five sectors are responsible for two-thirds of the decline in productivity growth. This is particularly striking since, taken together, these sectors produce only 11 per cent of UK economic output.

    Overall, the data show the quantity of goods and services produced by each UK worker has barely increased since 2008. Almost all economic growth has come from increased employment.

    As a result, Britain has suffered nearly a decade of historically low earnings growth — the worst performance for UK households in 150 years — and, correspondingly, slow growth in tax receipts. This has put pressure on living standards and the public finances: if Britain fails to produce more for each hour worked, the nation fails to get richer, its companies cannot increase pay and living standards for its people stagnate.

    Read the rest here: https://www.ft.com/content/a0cbe742-13a4-11e7-b0c1-37e417ee6c76




    My pump-action drivel gun is smoking hot today!
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