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

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  • exocetexocet Frets: 500
    Fretwired said:
    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




    Equally, I've heard the opposite stated i.e. Productivity would be on a par with our peers if only it weren't for Manufacturing / Public Sector Services etc etc. Pretty sure that this position was published recently (last 12 months) in the Economist

    I agree that we do have some very efficient manufacturing (as you say, not enough of them) but we also have lots of small inefficient operations. 

    Definitely time for the country to do a bit of soul searching on where we currently are and the way forward in future.


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  • VimFuegoVimFuego Frets: 5968
    "Definitely time for the country to do a bit of soul searching on where we currently are and the way forward in future." do we have to? can't we just go shopping and settle down in front of some netflicks?

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

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  • Axe_meisterAxe_meister Frets: 2108
    Our culture around work is nothing like Germany. Even a trash compactor operator is proud of what they do. In the UK we generally try and get away with doing as little as possible.
    We used to be a proud nation taking pride in everything we did.
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  • FretwiredFretwired Frets: 15348
    edited March 15
    Our culture around work is nothing like Germany. Even a trash compactor operator is proud of what they do. In the UK we generally try and get away with doing as little as possible.
    We used to be a proud nation taking pride in everything we did.
    Doesn't actually square with the fact Brits work longer hours than anyone in Europe. When I worked in Copenhagen you'd be killed at 5:00 pm if you stood in front of the exit as everyone ran out of building. The only people left in the offices were the Brits and the Yanks. The group appointed an American CEO who called all the European offices lazy .. he was promptly fired.

    When I worked in Germany it was pretty much the same thing time wise. Germany has a number of advantages - they lost the war. Whilst I bet wasn't very nice they rebuilt the countries infrastructure so train lines go in straight lines, major cities are linked by road and rail and industrial complexes were restructured and rebuilt to be efficient. The Germans also copied our education system (which we binned) which had technical colleges and academic schools. The technical colleges were linked with employers and apprenticeships and higher level qualifications at polytechnics and if bright enough universities (Germans have different names). The Germans turn out lots of engineers and scientists. The UK has a shortage of engineers.

    The German government supports and protects manufacturing and engineering. Until the UK does likewise we will be poor relations dependent on dodgy bankers to support the NHS.
    My pump-action drivel gun is smoking hot today!
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  • HeartfeltdawnHeartfeltdawn Frets: 10684
    Fretwired said:
    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. 
    Absolutely. Modernisation didn't happen. Unions were looking out for themselves, governments in the 1980's wanted to break the unions, and so the actual industries themselves nosedived. Individual politics were placed ahead of the national interest as per bloody usual. 

    Spot on with the comments about productivity. 
    I make Jeremy Paxman look like Fingermouse. 
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  • HeartfeltdawnHeartfeltdawn Frets: 10684
    exocet said:
    Equally, I've heard the opposite stated i.e. Productivity would be on a par with our peers if only it weren't for Manufacturing / Public Sector Services etc etc. Pretty sure that this position was published recently (last 12 months) in the Economist

    I agree that we do have some very efficient manufacturing (as you say, not enough of them) but we also have lots of small inefficient operations. 

    Definitely time for the country to do a bit of soul searching on where we currently are and the way forward in future.



    These ONS stats throw up something interesting:

    https://www.ons.gov.uk/economy/economicoutputandproductivity/publicservicesproductivity/articles/publicservicesproductivityestimatestotalpublicservices/2015#education-services-driving-growth-in-public-service-productivity-in-2015

    "For police, defence and other government services, only inputs estimates are provided, as output is not easily measurable. It is therefore assumed that output is equal to the inputs used to create them and therefore productivity change in these services is zero.

    Output, inputs and productivity for total public services are estimated by combining growth rates for individual services using their relative share of total government expenditure as weights."

    So the MoD is zero productive in the eyes of the ONS...chuckle. 
     
    As for the public sector:

    "While experiencing weak growth over the period as a whole, total public service productivity has been on an upward trend in recent years, increasing consecutively over the last six years. Between 2009 and 2015, total public service productivity is estimated to have increased by 2.0% – around 0.3% growth per year. This represents the longest sustained period of growth in public service productivity since the start of the series in 1997."
    I make Jeremy Paxman look like Fingermouse. 
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  • ToneControlToneControl Frets: 4025
    randella said:
    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.
    time to move out to Cheshire, much cheaper 
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  • randellarandella Frets: 1739
    @ToneControl - I’ve got the house I want in the area I love. The only way I’m leaving it is in a coffin :)
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  • ToneControlToneControl Frets: 4025
    randella said:
    @ToneControl - I’ve got the house I want in the area I love. The only way I’m leaving it is in a coffin :)
    Excellent, but the option is there for people who have not achieved that
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  • Axe_meisterAxe_meister Frets: 2108
    Fretwired said:
    Our culture around work is nothing like Germany. Even a trash compactor operator is proud of what they do. In the UK we generally try and get away with doing as little as possible.
    We used to be a proud nation taking pride in everything we did.
    Doesn't actually square with the fact Brits work longer hours than anyone in Europe. When I worked in Copenhagen you'd be killed at 5:00 pm if you stood in front of the exit as everyone ran out of building. The only people left in the offices were the Brits and the Yanks. The group appointed an American CEO who called all the European offices lazy .. he was promptly fired.

    When I worked in Germany it was pretty much the same thing time wise. Germany has a number of advantages - they lost the war. Whilst I bet wasn't very nice they rebuilt the countries infrastructure so train lines go in straight lines, major cities are linked by road and rail and industrial complexes were restructured and rebuilt to be efficient. The Germans also copied our education system (which we binned) which had technical colleges and academic schools. The technical colleges were linked with employers and apprenticeships and higher level qualifications at polytechnics and if bright enough universities (Germans have different names). The Germans turn out lots of engineers and scientists. The UK has a shortage of engineers.

    The German government supports and protects manufacturing and engineering. Until the UK does likewise we will be poor relations dependent on dodgy bankers to support the NHS.
    Germans work to rule.  But you can guarantee the Germans did the work required and then some in the time they where there. The rest made more overtime money for the same work.
    Saying that the Americans are even worse.
    Now this is based on my experience of working in the UK, Germany and the US.
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  • Jock68Jock68 Frets: 131
    This nation pays £40 Billion a year in Interest payments on the £2 Trillion Debts we have.  We also have an estimated £6 +Trillion of Off Balance Sheet costs ( pensions of Gov workers, State Pensions, Care of the Elderly, Student Debts that will not be paid back etc), .  Yet people continue to vote for more of the same every Election.  If nothing else people must be able to see that each and every one of the main political parties have proved that they are Incapable of running the country.  

    If you want this to continue with the same old and continue to complain without ever fixing it then you will vote for the same parties that have caused this problem.  

    What I cannot understand is why people do not run their lives in the same way that the Labour, Tory, Liberal and Green parties would run the country.  If it works so well why do you not do the same in your home life.    If this was a business then it would have been bankrupt decades ago.

    It is time for people to realise that Voting for More of the Same will never fix the problem, More of the Same is the problem.

    Moving to a Libertarian approach where people are responsible and in control of their own life is the only way this nation will have any hope of climbing out of the mess that it is in.

    People talk about council Tax and the poor services they receive and the cuts that have taken place.  You need to remember that Council Tax has nothing to do with Services that you receive.  There is no Contract no agreement, you pay the money and that is it, there is no agreement to empty your bins every week. If the council decide they will only empty your Bins once a month their is nothing you can do about it.  If you do not pay you will be put in Jail, that is abuse..  

    NHS, is so good that it has been replicated .... where? No where.   Decades of the NHS in Crisis has resulted in the system remaining broken.   So when you Vote for More of the Same do not complain when Nothing Changes and Debt increases.
    Jock
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  • ChalkyChalky Frets: 5096
    Fretwired said:
    Our culture around work is nothing like Germany. Even a trash compactor operator is proud of what they do. In the UK we generally try and get away with doing as little as possible.
    We used to be a proud nation taking pride in everything we did.
    Doesn't actually square with the fact Brits work longer hours than anyone in Europe. When I worked in Copenhagen you'd be killed at 5:00 pm if you stood in front of the exit as everyone ran out of building. The only people left in the offices were the Brits and the Yanks. The group appointed an American CEO who called all the European offices lazy .. he was promptly fired.

    When I worked in Germany it was pretty much the same thing time wise. Germany has a number of advantages - they lost the war. Whilst I bet wasn't very nice they rebuilt the countries infrastructure so train lines go in straight lines, major cities are linked by road and rail and industrial complexes were restructured and rebuilt to be efficient. The Germans also copied our education system (which we binned) which had technical colleges and academic schools. The technical colleges were linked with employers and apprenticeships and higher level qualifications at polytechnics and if bright enough universities (Germans have different names). The Germans turn out lots of engineers and scientists. The UK has a shortage of engineers.

    The German government supports and protects manufacturing and engineering. Until the UK does likewise we will be poor relations dependent on dodgy bankers to support the NHS.
    Germans work to rule.  But you can guarantee the Germans did the work required and then some in the time they where there. The rest made more overtime money for the same work.
    Saying that the Americans are even worse.
    Now this is based on my experience of working in the UK, Germany and the US.
    I work with Germans ever day (online). Now the ones I work with are at the high salary management end, and while they like their punctuality and they like structure and clarity about what I expect from them, they are just as likely as the Americans or UK folks I work with to underperform or fail to deliver to time and quality. Wunderkind they aint. They are human like everyone else and have similar worries about jobs, kids, and the weekend weather.

    I guess I'm saying lets not fall into using stereotypes....
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  • Axe_meisterAxe_meister Frets: 2108
    As I said. In my experience.
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  • Phil_aka_PipPhil_aka_Pip Frets: 8438
    They want more tax? :o  I already pay through the nose on what I earn, what i spend, and what I save. Plus they have the nerve to tax me on the perceived value of my house irrespective of whether I actually earn enough to pay their iniquitous tax.

    They can have more tax when (i) they've shown that they can spend wisely that which I already give them  (ii) they can prove that extra taxation is genuinely required (iii) they've sorted the economy enough for me to be able to earn enough to pay their extra taxes.

    In the meantime they can all FOAD!
    "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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  • ICBMICBM Frets: 30905
    They want more tax? :o  I already pay through the nose on what I earn, what i spend, and what I save. Plus they have the nerve to tax me on the perceived value of my house irrespective of whether I actually earn enough to pay their iniquitous tax.

    They can have more tax when (i) they've shown that they can spend wisely that which I already give them  (ii) they can prove that extra taxation is genuinely required (iii) they've sorted the economy enough for me to be able to earn enough to pay their extra taxes.

    In the meantime they can all FOAD!
    Good luck with that when you want public services.
    "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: 10684
    Chalky said:
    I work with Germans ever day (online). Now the ones I work with are at the high salary management end, and while they like their punctuality and they like structure and clarity about what I expect from them, they are just as likely as the Americans or UK folks I work with to underperform or fail to deliver to time and quality. Wunderkind they aint. They are human like everyone else and have similar worries about jobs, kids, and the weekend weather.

    I guess I'm saying lets not fall into using stereotypes....
    So plenty of towels laid out on the office chairs in the morning at your workplace then.
    I make Jeremy Paxman look like Fingermouse. 
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  • HeartfeltdawnHeartfeltdawn Frets: 10684
    edited April 29
    Jock68 said:

    Moving to a Libertarian approach where people are responsible and in control of their own life is the only way this nation will have any hope of climbing out of the mess that it is in.

    People talk about council Tax and the poor services they receive and the cuts that have taken place.  You need to remember that Council Tax has nothing to do with Services that you receive.  There is no Contract no agreement, you pay the money and that is it, there is no agreement to empty your bins every week. If the council decide they will only empty your Bins once a month their is nothing you can do about it.  If you do not pay you will be put in Jail, that is abuse..  

    NHS, is so good that it has been replicated .... where? No where.   Decades of the NHS in Crisis has resulted in the system remaining broken.   So when you Vote for More of the Same do not complain when Nothing Changes and Debt increases.


    I applaud your belief in Libertarianism. Keep searching for the Easter Bunny.

    Your rant about bins being collected: if the bin collections are outsourced then there is a contract in place. Any failure to have your bins collected by the company could and should be reported. 

    If the council wanted to move to a monthly bin collection, it would have to go to a vote. Sometimes they win, sometimes they lose. Oh look, a real life example where a council wanted to change and councillors told them to fuck off. 

    http://www.bbc.co.uk/news/uk-wales-north-west-wales-42057633

    Democracy in action, old chap. 


    I make Jeremy Paxman look like Fingermouse. 
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  • Phil_aka_PipPhil_aka_Pip Frets: 8438
    ICBM said:
    They want more tax? :o  I already pay through the nose on what I earn, what i spend, and what I save. Plus they have the nerve to tax me on the perceived value of my house irrespective of whether I actually earn enough to pay their iniquitous tax.

    They can have more tax when (i) they've shown that they can spend wisely that which I already give them  (ii) they can prove that extra taxation is genuinely required (iii) they've sorted the economy enough for me to be able to earn enough to pay their extra taxes.

    In the meantime they can all FOAD!
    Good luck with that when you want public services.
    I've already paid through the nose for "public services".
    "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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  • ICBMICBM Frets: 30905
    Phil_aka_Pip said:

    I've already paid through the nose for "public services".
    But not enough. That's why there is a deficit - because tax was not sufficiently high in the past to cover public spending. Unfortunately that now means that a lot of your tax money goes to pay interest on the debt that was run up by not paying enough tax previously.

    On your point iii, the only way to fix the economy is to recognise that we've been living on credit for the last forty years, borrowing too much on both a personal and a national level and not paying enough tax. Now the chickens have come home to roost and it will all have to be paid back.

    For what it's worth I trust you didn't borrow too much on a personal level, and nor did I. That's slightly annoying given that we will have to help pay for the mess without having lived the lifestyle that caused it, but it is what it is. You can't have proper government without adequate taxation.
    "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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  • Phil_aka_PipPhil_aka_Pip Frets: 8438
    @ICBM no, I've never borrowed much. I had a £50k mortgage 18 years ago and cleared it down 16 years ago. 30 years ago I bought a washing machine on the never-never and ended up paying twice as much for it as I would have paid cash - but I didn't have the cash. The hifi and guitar goodies I recently bought were saved for before placing the orders.
    "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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