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The debate about tax

February 28, 2012

The Budget is just three weeks away and the dividing lines are now clear on tax.  I have always believed that tax should fall lightly on the low paid and heavily on unearned wealth.  Entrepreneurs should be rewarded but speculators profiting from capital gains should not.

At the last election the number one Lib Dem manifesto commitment was to raise the income tax threshold (or the zero rate band, to put it more simply) to £10,000 a year.  It was the main demand made of both Labour and the Conservatives in the coalition negotiations.  It is now being implemented by the Lib-Con Coalition Government.

Since entering government we have raised the threshold from £6,435 to £7,435.  This has lifted over 800,000 people out of paying income tax altogether.  It’s been a great benefit to those working part time.  Students working in the local shop and parents balancing a part time job with child care have been helped by this policy.  The rise in the threshold has also meant a tax cut of £200 for basic rate tax payers – that’s everyone on salaries of up to about £42,500.  The government has already announced that from April the threshold will rise again to £8,105.  This means that 1.1 million part time workers will have been lifted out of tax.

Now I want the Coalition to go further and faster towards the goal of £10,000 tax free pay.

The Deputy Prime Minister has said raising the threshold will help ease the pressure on family budgets.  As co-chair of the Lib Dem Parliamentary Committee on Treasury and Business I have spoken on many occasions of the benefits of this policy.  It makes it clear that it pays to be in work, keeping more of your hard earned money.  Putting extra money in the pockets of those on low and middle incomes is a direct stimulus to the economy.  It puts spending power in the hands of people that can be spent in local shops and with local businesses.  The Liberal Democrats made exactly the same argument last November when we pressed for a generous increase in pensions and out of work benefits.  They went up by 5.3%, with pensioners getting the biggest cash increase in the history of the state pension.

The Liberal Democrats in government believe that £10,000 tax free pay is the best way of delivering tax fairness in these difficult times.  It was right that the Coalition Agreement binned the Conservative election promise to cut inheritance tax.  The Chancellor’s first Budget actually increased the ludicrously low rates of capital gains tax left behind by Gordon Brown.  In the first two years of the Coalition Government I have been pleased to hear many Conservative MPs supporting these decisions.  Many of them can see the real benefit of £10,000 tax free pay to their constituents.

Some Conservatives are now pressing the case for a tax break for married couples.  I support marriage and want it extended to gay partners.  But I think all relationships are surely founded on love, not the tax system.  It is also not immediately clear to me why single people should be made to pay more tax.  I want the Coalition to support marriage and families through its social policies, not its tax decisions.  It is interesting to note that some MPs who back tax breaks for marriage are the same people who resist appropriate sex and relationships education.

And what of the third most interesting party in British politics?  Well the Scottish National Party want to break up the Union and set their own taxes.  Of course the Scottish Parliament already has the power to vary the rate of income tax.  The SNP has a majority in Edinburgh but I don’t recall them using the tax powers they already possess.

As for Labour, they’ve been all over the place under the two Eds.  They say they oppose the rise in VAT but failed three times to vote against it.  Now they say they want to cut VAT – which would cost over £12billion, loading the country up with even more debt.  Balls even had the cheek to say that the government should speed up the rise in the tax threshold, when he and his colleagues  have rubbished the policy for the last two years.

The 2012 Budget is to be delivered in really tough economic times, with turmoil on our doorstep in the Euro Zone.  But I believe the Chancellor has a real opportunity to give hope to millions of working people that the age of austerity is not for ever.   Raising the income tax threshold is a way of giving people back some of their own money to spend as they choose.  It is the Liberal Democrat priority for the Coalition Government and it makes economic sense for the nation.

89 Comments leave one →
  1. David Etches permalink
    February 28, 2012 9:15 pm

    The threshold for higher rate tax is currently £42,435. When the nil rate tax band increases to £8,105 the threshold for higher rate tax will be closer to £41,000. The net effect especially with the removal of child allowance for people caught by this reducing threshold is severe. £41,000 and no child allowance is not a large income and 20% VAT eats further into a squeezed budget. This is your squeezed middle Stephen and they won’t thank you for it.

    • February 28, 2012 10:16 pm

      David – yes, that’s me over rounding from the memory of my 2010/11 tax return! For 2011/12 “about £42,500” is the correct figure – which I’ve now inserted. The point I was making that for basic tax payers that there has been a tax cut of £200 is exactly right.

      • David Etches permalink
        February 29, 2012 2:38 am

        True but it’s more like a saving of £126 in 2012/13. Granted it all adds up but 20% VAT has more of an impact on low earners than a small saving on income tax. It doesn’t even come close to paying the gas bill or council tax. It is a known fact that low earners will spend a higher proportion of their income on essentials and unfortunately fuel in all it’s forms is essential.

    • February 28, 2012 10:29 pm

      £41k is not a large income? What exactly can you not afford to buy on £41k?

      • David Etches permalink
        February 29, 2012 2:31 am

        I’m looking at this as one income for a family of four. The point is you can’t spend £41,000. After stoppages it’s about £30,000 which is a fair income but for many people not extravagant. Take out a mortgage and support for student children and there’s not a lot left. Maybe you can budget better than me?

    • March 3, 2012 11:53 pm

      “£41,000 and no child allowance is not a large income”

      It’s in the top 5% according to the IFS: http://www.ifs.org.uk/wheredoyoufitin/

  2. February 28, 2012 9:30 pm

    Oh dear Stephen standards are slipping, I agree with you. If I want to nit pick, alas in my opinion tax breaks for the wealthier will bring in more money than for the less affluent, in the long term. Also I do not think tax breaks for married people should stop there. Anyone in a Civil Partnership should be included too, and confirmation that they can share pensions and other partnership financial benefits.

    The great advantage of the £10k tax free band is that it is an incentive to those on low incomes to remain in work and those unemployed to look for work.

    One day I hope we can have like Estonia a flat tax of 15% for income tax.

    • February 28, 2012 10:10 pm

      Dave – us agreeing would indeed be dangerous to both our images! But we can disagree on “trickle down” – didn’t George Bush snr call this “voodoo economics” ?

  3. John S permalink
    February 29, 2012 1:11 am

    How is this tax cut going to be financed? The 21st century equivalent of the “Windows Tax”? Increasing the rate of the 50% tax band to 60% and doubling its adverse effect?

    Here’s an idea. Over 120 billion text messages were sent in the UK last year. Every 1p tax on each message would raise £1.2 billion, easily collected directly from the mobile phone companies. It beats taxing the smokers more and adding to the smuggling and organised crime problems. And aren’t mobile phones and their users annoying and a risk to other people’s health from secondhand electromagnetic waves? Think of “the children”!

  4. February 29, 2012 4:32 am

    Might be a bit late for taxing text as IMs have taken over but it’s a good idea.

    As I said on your FB wall, it’s probably the wrong time to be cutting taxes:
    Debt is still rocketing, we already have the equal worst total debt in the world, have been issued a formal warning on our credit rating, are facing a double dip recession and the EU crisis won’t be resolved any time soon.

    @David E The kids get free loans and overdrafts — you should really be taking advantage of that. Spare a thought for my girlfriend (an EU student) who gets zero help with living costs and that means no loans or overdrafts. Try fully supporting yourself AND doing a degree.
    Assuming a 1:1 split between fuel rate and luxury rate, you have to be spending around £12k a year on VAT rated items to be worse off after the tax changes last year. Considering food and housing are zero rated, we’re talking about fairly well off people.

    • February 29, 2012 10:28 am

      David Gould has made the point I would want to make to David Etches – the VAT rise of 2.5% last year does NOT hit poorer households more than richer ones as essentials are either zero rated or taxed at the lower rate of 5%. So housing costs, heating and lighting, most foodstuffs, tampons, children’s clothes, etc are unaffected by the VAT rise. These items form the vast bulk of the household budgets of individuals and families on low incomes. Raising the income tax threshold puts extra cash into the pockets of these people.

      • March 1, 2012 2:42 am

        Ah I mistakenly thought the lower rate went up 1%.

        In that case, the spending figure is £16,000. Or to put it a simpler way, only individuals spending > £8,000 pa excluding housing, heating & lighting, most food, childrens clothes, tampons etc are worse off. And this is before the upcoming budget.

  5. John a local constituent. permalink
    February 29, 2012 4:58 pm

    I fully support raising the minimum income tax rate.

    May i suggest the libs differentiate them selfs and make offshore tax loopholes, the centre of our policy for the next election.

    • February 29, 2012 7:27 pm

      John – we are also pressing for more action on tax avoidance – there are a couple of articles on this blog in December and November on this and I raise it in Parliament quite often.

  6. rosemary permalink
    February 29, 2012 5:55 pm

    I am appalled by the retrospective action just taken by the Treasury. We should all be worried by this capriciously dictatorial abuse of power, for the sake of our own liberties and for the future economic health of the country. You don’t even mention it, Stephen. Nor does anyone else on this blog. Is that an oversight, or embarrassment?

  7. rosemary permalink
    February 29, 2012 6:40 pm

    What is so unconservative about making the first £10,000 of everyone’s income, tax free? It is the oldest conservative policy in the book. Just a bit too expensive at the moment, which is why conservatives are not keen on it. So if the liberals are insisting on it, who is going to pay for it? The usual answer from liberals is “a mansion tax.” This is as unjust as your apparent attitude to inheritance tax, as it takes no account of differing property values across the country, and the differing times of life – and prices – at which the properties were acquired. People’s circumstances are very different, and they cannot be easily divided into deserving entrepreneurs and undeserving speculators with unearned income or wealth. If the housing market recovers, huge numbers of homeowners, particularly in your constituency, will eventually be paying the mansion tax, as governments rarely move the thresholds for these sorts of taxes. Usually because they can’t afford to.

    The more I look at it, the more this £10,000 “liberal democrat” policy looks like a stealth bribe of the whole electorate – which can’t afford it at the moment, but would no doubt dearly like to have it. The perfect all things to all men liberal policy – which would also have he effect of making the first £10,000 of every millionaire’s speculation tax free. We just can’t afford this in our present predicament. We still have a big deficit, a fast rising debt, rising unemployment, a European crisis, and public expenditure very far from under control.

    • February 29, 2012 7:33 pm

      Rosemary – the policy as implemented so far has been restricted to basic rate taxpayers – the £200 tax cut that I mention in the third paragraph of the article. It does not benefit millionaires at all. In terms of financing the switch, it could be a further tightening of the generous pension contributions tax relief or higher property taxes. The rate of CGT has already been increased from 18% to 28%. I expect the Chancellor will announce in the Budget how much has been raised from the first year of the 50% top rate of income tax.

      • rosemary permalink
        February 29, 2012 11:00 pm

        So people who qualify for this tax cut could also be clobbered by a higher property tax to pay for it. This should be made clear to your constituents

  8. David Etches permalink
    March 1, 2012 6:39 am

    It’s all a bit academic. What does £200 buy you spread over 12 months? It’s hardly going to make a difference.

  9. David Etches permalink
    March 1, 2012 6:45 am

    It’s national insurance that should be addressed. The focus on mid band earnings and only 2% on the excess means that low and middle earners pay a high marginal rate of tax on their overal income compared to a high earner?

    • March 1, 2012 2:07 pm

      Yes, there are lots of anomalies around NIC that need addressing. The Lib Dems are setting up a review of the tax system in April and NIC will no doubt be addressed. But the link to entitlement of JSA and state pension is a complicating factor that all previous govts have shied away from.

  10. rosemary permalink
    March 1, 2012 9:35 am

    The effects of the property revaluation in Scotland weren’t academic in the 1980s. The governing party lost seats so heavily there – you may remember that in Scotland the revaluation was carried out every five years, whereas in England and Wales the process had been shelved since 1979 – that the proposed poll tax reform was hastily revived, and brought straight in for Scotland, having been previously rejected by the then PM as far too risky. It didn’t salvage the lost seats there but led rather to further trouble on the PR front, stirred up daily by the BBC – despite itself levying a flat-rate poll tax. The party in question has still not recovered in Scotland and now there are huge constitutional consequences for us all. Perhaps Liberals should remember that history now they are in government.

    After all, New Labour thought they would always enjoy the support of the media as they did when they embarked on their various wars in partnership with Clinton. But in partnership with republican Bush it all changed: the media was more intent on bringing down a republican administration in the US than boosting a socialist one in the UK, and the Iraq adventure though no more dubious than the Kosovan, was the means by which it was done. It must have come as a great surprise to Messrs Campbell and Blair who presumably thought they would always be the BBC’s and Channel 4’s very own party.

    • rosemary permalink
      March 3, 2012 9:49 pm

      It would be a mistake to think the property revaluaton would only affect conservative voters and therefore not cost the liberal democrats seats at the next election. Not only would the revaluation policy have a liberal democrat label on it, but lots of liberal democrat voters, especially, as I have already said, in Bristol West, would be worse off at a time when they can least afford it.

  11. Paul Bemmy Down permalink
    March 1, 2012 4:37 pm

    Hi Stephen. I hate to keep on about pension credit but can you explain the logic because I really don’t get it. A man aged 60 with no income gets £67 as income support. On reaching 61, he gets pension credit of £137. But with everyone expected to work longer, why is someone who does not work be considered retired at 61. Actually, any worker thinking of retiring at 61, would be far better off deferring any pension and letting the Gov pay you PC instead. If you look at top-ups to pensions, anybody who saves for what will be a modest pension is a fool, because the state will pay you in anycase.

    • David Etches permalink
      March 1, 2012 4:48 pm

      You’re absolutely right. The only way to make it worth it is to have a complete firewall between private a state pension provision. Anyone prudent enough to save reaps the rewards and gets whatever state pension is available in addition to their own savings and investments.

      State pension should be given to everyone at an agreed rate at an agreed age. Not at age 61 that’s for sure.

      For the system to work all should have a stake in the benefits even millionaires.

      • rosemary permalink
        March 1, 2012 5:13 pm

        More than anything else, all should have an interest in sound money. But state and council employees don’t. Neither does the government. Both benefit from inflation, and have no interest in saving, especially if they have borrowed beyond their means. In the case of private individuals on index-linked salaries and pensions, they actually make capital acquisitions at the expense of savers if they borrow. Until the public sector stops being index-linked, this unfair redistribution of wealth will continue, and there will be no incentive for the governing class and its huge workforce to bring back sound finance.

    • March 1, 2012 5:32 pm

      Paul. Gordon Brown has left behind something of a labyrinth of entitlements for those of retirement age, both in terms of state benefits and state employee pensions. The Coalition Govt is embarked on a major package of reforms to put the lengthening third age of all our lives onto a sustainable footing. I would like to see a standard universal state pension, set at the rate that provides a decent income (ie roughly the current pension credit) and available to all who have been a British tax payer. There are of course lots of factors to throw into this mix.

      • David Etches permalink
        March 2, 2012 5:02 am

        A universal state pension is a fundamental step to reducing inequality. I think we have to be careful about using terms like British taxpayer. I’d prefer it if we talked in terms of a citizens’ pension. An amount payable at a level and at an age disigned to give a measure of dignity in old age. We still have to break the means tested link so that people have a clear incentive to save during their working lives. A pound saved must make someone at least a pound better off. This is not the case at present for those who accumulate relatively small pension funds of around £75,000. Given that the average pension fund is around £16,000 this is a lot of people saving to no good purpose.

        One method of encouraging saving is to extend ISAs and merge them with personal pensions. Tax free benefits are what motivates savers. If capital and income is paid tax free then the argument for reducing high rate tax relief on pension contributions or even abolishing tax relief altogether becomes more palatable. This can only be done when a universal or citizens’ pension is established.

  12. Paul Bemmy Down permalink
    March 2, 2012 12:18 pm

    David. That sounds good to me. Why does the public realise the present situation is a dis-incentive to save, but not politicians. I do think, however, that to qualify you should be resident in this country for a certain number of years, although there is probably some EU law to say this is illegal.

    • David Etches permalink
      March 2, 2012 7:29 pm

      To qualify as a British citizen takes some doing and should be an adequate test I believe.

  13. rosemary permalink
    March 3, 2012 9:42 am

    Returning to the general subject of tax, did anyone hear that hilarious exchange between John Humphrys this am and two other people trying to explain to him that if you put down the rate of tax on the rich they collectively pay more into the revenue? Despite historical examples being given to him he just couldn’t get it. In the end one of them had to reassure him that he wasn’t being thick, just a bit obtuse.

  14. John S permalink
    March 4, 2012 1:27 am

    The last thing we need is any NEW tax. It’s high time the number of taxes and their complexicity were reduced to make them more transparent. If politicians feel they can only get re-elected by clobbering those who have worked hard and have accumulated a bit of (relative) wealth, make it simple for the envious masses to understand and, at the same time, dampen any aspirations they may have.

    • rosemary permalink
      March 4, 2012 4:58 pm

      John, it will take a long time to unpick the cat’s cradle Gordon Brown left us: not only horribly complex, but corrupting too. Nearly every family was drawn into the net in some way or other, and people don’t want to give any of it up now. If we could only be brave enough to get back to a flat, simple income tax, we could all prosper. The working man could once again be left out of income tax altogether – we might even be able to rediscover him. Besides the corruption, the habit of envy would have to be got rid of too. Mr Gladstone and Mr Disraeli just wouldn’t believe the impoverishing cast of mind Liberals and One Nation Conservatives have acquired since their forward looking days.

      • rosemary permalink
        March 5, 2012 11:02 am

        Stephen, rather than taking on your homeowning constituents, why don’t you ask the Chancellor to pay for the £10,000 exemption by bringing down the top rate of income tax ?

        After all, which is more important to you as an accountant and political descendant of Mr G, appeasing the spitemongering class warriors, or paying off our debts?

  15. Paul Bemmy Down permalink
    March 5, 2012 11:29 am

    Rosemary. New Labours policy for staying in power- make people dependant on benefits, and import voters. It was only the financial meltdown that done for them. What was a disaster for many, may turn out in the long run to have been a blessing in disguise.

    • rosemary permalink
      March 5, 2012 12:18 pm

      Except that the numbers of people for whom life here is better than life there, are still growing. However bad it gets here, and we have a lot further to fall, they will keep on coming.

  16. March 5, 2012 2:30 pm

    PLEASE EDIT THIS IF YOU NEED TO ITS RATHER LONG
    Thankyou Stephen, ever time I read your comments I am made so happy that you are our mp. I am also very suprised and happy that some of our Conservative M.Ps are also in favour of raising the tax threshold to 10,000 most low paid poeople can only dream of that as an income-seriously.
    I have never earnt it whilst employed and whilst unemployed or a student survived on £3000. a yr student loan for rent books photocopying etc (disabled student so more expenses and couldnt do work and study without failing my studies). and just under £3000. a yr in the hand when unemployed. you can’t eat a balanced health diet on that and or lead a sensible,involved in the community social life,pay most of your bills even if still living with poor parent(s) 1 deceased. whom you have to try to help support too.
    NOTE if you live with parents it is always assumed that they can support you and manage so your benefits get cut. This leaves you stuck in the poverty trap unable to rent, move or anything much even with the help of state benefits.
    Yes this is true
    housing benefit is less than most rents even cheap ones may mean substandard housing.
    (I have seen real horrors when a student: basically call one horror of of house I saw other students from oxford living in mould ville and you will have a little,tiny idea of what it was like for them . I was very lucky Oxford Brookes had a good student housing dept and thanks to a friend of a friend I was able to find good accomodation. Otherwise I would have been unable to study having to be either homeless as a student or not a student. It really is that bad.)
    and the council waiting lists are over subscribed and take decades for you to move up on let alone move into a place. I do hear that some claimants are engaging in fraud and I WHOLEHEARTEDLY DISSAPROVE but it is understandable if it not a big fraud why they do. What would anyone do if stuck in poverty at least what for a western 1ST WORLD PERSON IS POVERTY.
    wouldn’t a fairer system stop most poor fraudsters commiting it in the first place??

    As another issue shouldn’t there be more practical financial help for adults with disabilities or learning difficulties as even if not allowed to officially be registered as disabled only classed as having substancial long term difficulties that affect ones abilty to do certain jobs, or as the job centre say any type of job (not a direct quote)these types of difficulties affect your long term learning and earning potential even before you know you are disabled and after too.

    second other issue. I am open minded I Approve of marriage but think any loving couple who are geniunely commited to each other should have the same rights tax wise as single or married peolpe no group of people should have a better break just because of different marriage,single or serious loving relationship status. (excuse the mistakes getting a bit tired therfore difficult to corrrect them)
    BASICALLY WHY CANT ANY SYSTEM OF TAX (OR WHATEVER IT IS). RESPECT PEOPLE FOR WHO THEY ARE AND ENCOURAGE law abiding/decent behavior rich or poor.
    What do you think?

    • March 5, 2012 11:13 pm

      yes I agree that the tax burden should be lowest on the lowest earners. Also that no household should get a favourable or adverse tax rate due to their marital status.

      • rosemary permalink
        March 6, 2012 12:08 am

        “Also that no household should get a favourable or adverse tax rate due to their marital status.”

        So is the traditional ideal of the breadwinning father to be finally done away with?

        What is to encourage men to support their families? Are women to be condemned for ever to doing it all? What about the effect on the children? And on the morale of the men? And on the future society? Will women in future be married to the state? And their children be brought up by the state?

        The true effects of the sex revolution on us all need to be measured before they are endorsed by the tax system.

        Have you really thought this through, Stephen, or are you just being PC?

      • John S permalink
        March 6, 2012 12:17 am

        “yes I agree that the tax burden should be lowest on the lowest earners.” It is already!

  17. Paul Bemmy Down permalink
    March 5, 2012 6:51 pm

    Rosemary. I’m in favour of immigration. If one country has a shortage of skills and another an abundance, it makes sence for workers to move to balance the situation. What I’m against is immigration to satisfy your idealogy. Thats what we had under New Labour, and it never occurred to them how this would disadvantage home workers, and how it would influence our ability to house and educate everyone.

  18. rosemary permalink
    March 5, 2012 11:33 pm

    And it never occurred to Macmillan either.

    The main thing these arrogant, out of touch, unimaginative, irresponsible politicians and civil servants don’t seem to realize, is that people who come here tend to have children, and those children and their descendants can turn out to have very different expectations and characteristics from their forbears.

    The very idea of importing cheap, self-effacing, foreign labour as a quick short term fix, is abhorrent to me. One notch up from slavery. If work needs doing, then train your own people to do it, respect them, and pay whatever it takes. That is what the Japanese have always done, and they are still a properly functioning, cohesive nation. Like us, they already have a large population of their own, a finite amount of land, and no wish to be yet more crowded.

    That is not to say we shouldn’t admit foreigners at all, just that they should be regarded and treated as human beings, not mere labour-saving devices. Mass immigration has turned out to be a very, very expensive false economy, and not just financially. As for the perverted ideology you mention, which entered into the calculations of the last administration, one wonders whether the Tower of London would be too good to accommodate them now.

    • rosemary permalink
      March 6, 2012 9:04 am

      PS I don’t mean to exonerate guilty employers, from East End sweat shops to international corporations, but they are not primarily responsible for pursuing policies in the interests of the nation.

  19. Paul Bemmy Down permalink
    March 6, 2012 12:30 pm

    The Tower of London, and entering through the gate from the river?

  20. rosemary permalink
    March 6, 2012 1:59 pm

    There seems to be a national conversation hotting up on the choice of tax increases available to the chancellor. As it is conducted largely by the BBC, it is being presented as just that, a choice of tax rises. Why don’t Liberal Democrats lead the way in telling the truth? Cutting tax on the successful brings in more revenue. There is absolutely no need to clobber homeowners and discourage those who aspire to become homeowners. Just cut the top rate and watch the revenue rise. And don’t forget to treat the non dom home hoarders to the same existing fiscal arrangements for property as the natives.

    • David Etches permalink
      March 6, 2012 2:55 pm

      Rosemary. You’ve made several comments to date and you seem to be promoting the neo-conservative agenda most popular with the current crop of Republican candidates in the USA. You may be right about revenues flooding in if taxes on the rich were cut. I wouldn’t begin to know. However, the USA and the UK are already the most unequal of the major affluent countries in the world. Rich / successful does not equal good / better.

      The experiment in “let it rip” capitalism in this country started in the early 1970’s, stoked up by Margaret Thatcher and continued by Tony Blair and the credo of trickle-down benefits to the less well off has hardly been a raging success. The gap between the highest paid and the lowest paid is wider than ever.

      In the non-Anglo Saxon countries like Germany and Japan and in Skandinavian countries the gap is much closer and they are generally more prosperous and cohesive communities. If we create a society of the rich imprisoned in their gated communities and the poor increasingly in debt just to get by we are achieving nothing of any worth and storing up social unrest which could make last year’s riots look normal.

      I met a man recently who earns £600,000 a year. Rather than whining about being bled dry by the tax man, his comment was that even if 50% of his income is taxed he is still a wealthy man. He thought it reasonable enough to struggle on with just the £300,000 a year of net income. If all the one percenters had his attitude we wouldn’t have had a financial crisis in the first place.

      Don’t blame the poor for the mess we’re in.

    • March 6, 2012 5:17 pm

      Dear Rosemary, Dear David and Dear Paul and of course Stephen.

      I am following this convesation with interest when I have time
      (barring numerous interupptions from family members.)

      Rosemary I agree with some of your points however the top rate of tax should not be reduced. They people at the top have that rate because they can usually aford to pay it unlike people at the bottom.
      A question; Would you agree that a fairer tax system would enable income to be generated without penalizing the less well off?

      If I was rich enough I would pay my share of tax mindful that others cannot aford their tax bills. I might worry that it seemed a large bill but in relative terms are not the rich not only generating income but gaining prosperty as the poor have to work for them. I do not object to work. I am just stating a fact. Indirectly although the poor use wealth when in need there needs are created by un unfair system. And without the poor working there would be no real economy as it seems to be based on the massive needs of the many v the huge prosperty of the few and moderate prosperty of the slighty less in population terms.

      Ihave an idea or two Does anyone think these workable: Simplifiy the tax system but at the same time introduce more tax bands and ensure that everyone rich or poor pays the same percentage of tax relative to their incomes and resources.
      Price banding according to income for everything. eg bread may cost say £1 a person on benefit earns say £67. Therefore bread is a 67th of their income.A rich person has say 400,000 bread should cost a 67th of ther income! or if you dont like that say it cost .5%of a rich persons income. it should cost .5% of a poor persons income.
      Also any responsible person should never be placed in a position where they cannot meet their Household bills food tax study and other bills usually incured just by basicaly living.not just existing.

      The Rich and the poor all have a role and place in society but would it not be better if the poor were only perhaps earned a little less than the middle class and the middle class only a little more than the rich. but certainly not unable to make their income match their outgoings. I don’t include smoking and drinking,gambling as reasonable outgoings but enjoyment of lifes good things in moderation is reasonable as is the ability to do so.
      That is enough for now -I’ll stop and let someone else get a chance to comment.
      Anyone actually have any ideas?

      • David Etches permalink
        March 6, 2012 6:10 pm

        Nice thought Regina but I can’t see how it could possibly work. You’d have to prove your income every time you bought something!!

        The problem is inequality is not measured simply in income. Rich people are rich mainly because they own capital and in some cases they also own the means of production which in turn generates more income and more capital. Capital taxes are lower than income taxes. This is done to encourage investment, however, it’s moved a long way from being a true risk related investment in industry and commerce. Many wealthy people derive income in the form of dividends which is often a long way from the risks associated with personally running a business.

        it is good that individuals save and invest for their families’ future and successive governments have attempted to reinforce this through various tax breaks. The best example is Individual Savings Accounts ISAs which are almost completely free of all personal income and capital taxes and pensions which attract tax relief on contributions etc (although Government has always mixed this up with the benefits system to the ultimate confusion of all and to the detriment of any realistic take up of personal pension investment). Because there are tax breaks there are caps on how much can be invested (for the man in the street these are pretty generous – £11,240 for an ISA from 6th April 2012 & for a pension £50,000 or 100% of total income if it’s lower). So far so good. But this is not enough for rich people. They want to continue getting tax breaks. If we can agree a level of what constitutes a good income why should Government, who are spending our money money for us, continue to offer more incentives to people who are by any measure already very well off.

        We have in effect created a rentier society. True entrepreneurs should get the breaks because ultimately they are creating wealth and jobs. For others, simply living on the fat of the land, they should be taxed on income, on capital and on inherited wealth and they should be taxed progressively.

  21. March 6, 2012 5:22 pm

    Oh on the subject of disabilities and learning difficuties and social mobility I WOULD BE INTERESTED TO KNOW WHAT OTHERS THINK COULD THIS BE (opps)9 could this be posted in the appropriate bit im not great at computing on blogs etc-

    • rosemary permalink
      March 6, 2012 10:48 pm

      Dear Regina

      I would like to see a great deal more done to ease the passage of disadvantaged people around the city, especially the central bit where it is very hard and often dangerous for them. So much is done for motorists to ease their passage and cater for their needs, and this is usually at the expense of others. Young, fit, able-bodied people, although they must breathe in poisonous traffic fumes and be deafened by the noise of unnecessarily loud engines, can at least manage to get around on foot. But for people who find it hard in one way or another, this is a callous city. The bus service is incredibly deficient compared to other cities, and there is no tram or metro. The crossings are not considerate of frail people either. This could all have been attended to years ago when it was cheaper, but probably won’t be done for a long time now. The odd thing is why it wasn’t. You would think the city fathers would have been able to work out that they would eventually be old and possibly disabled themselves, and need to get around in wheelchairs and good public transport rather than cars.

      Mental health is the Cinderella of our health service, along with geriatric health, and this could be corrected. When you see what is done for heart disease, aids, and cancer, you have to wonder who makes the decisions and why. After all, every family is touched by mental illness and old age at some point or other. On the other hand, I have noticed that Sainsbury’s in Queens Road seems to go out of its way to employ people with various difficulties, so there is a heart in there.

      Of course to pay for these improvements we need people to earn the wealth in the first place. With so many people not paying tax, and others not even earning, we really should be careful to hang on to those who are. I don’t see this as an American policy, just common sense. Overtaxation all but destroyed the traditional economy of this country. Businesses were ground down by tax, trade unions, and regulation, and eventually sold off to bigger more ruthless foreign owners. An over-dependence on financial services was substituted. Taxing those new ridiculously large salaries at 50% may have made the socialists feel good, but wouldn’t it have been better to nurture a better balanced economy in the first place? One in which we were more self sufficient? One in which there were closer bonds between the employers and the employed? One in which the successful wanted to stay and bring up their children and grandchildren here? By successful, I mean properous, in the true sense of the word, not just someone with a £600,000 p.a. salary conjured up on the internet, and with no local loyalties. If we could go back to the traditional 10% rate of tax, salaries might become less indecent. Another difficulty with the present expectation of tax is that there just aren’t enough “rich” people. They already pay 30% of the tax take, but that doesn’t satisfy the class warriors who are for ever trying to get more out of them. “Them”, you notice, not “us”. They rarely define who this “them” is. I suspect they mean people better off than themselves.

      The Nordic nations are famously good at looking after their people. And the Japanese have the strength of the family to sustain them. Alas, our population has been allowed to spiral out of control, so where Norway has to cater for the needs of 4 million, we don’t even know how many millions we must cater for in the future. On top of that, it is easier to persuade people to pay into a common pot to look after each other if they feel some kinship with the recipients. It will be interesting to see whether the Scandinavian countries manage to keep up their matriarchal welfare states as their populations grow and become more international. We have also let our family structure break down. This will be an increasing problem and lead to further alienation.

      Brazil has just overtaken us in GDP and that should remind us that GDP is not everything. A huge population with a big GDP is not as properous in the true sense as a small one with a modest GDP. It looks as if we may have the worst of both worlds here: a larger, less united population, and a declining GDP. The only way to deal with that is to reinvent the family and concentrate on restoring law and order, but that is not a fashionable thing to say, and there probably aren’t many votes in it in Bristol West.

      • rosemary permalink
        March 6, 2012 11:18 pm

        PS Regina, another thought on tax: it seems to me it is for raising revenue mainly, and that is what it should do. If a lower rate brings in more tax, then that should prevail over a wish to confiscate wealth just for the sake of it.

        But tax can also be used to dissuade people from harmful practices – harmful to others. So I would not just tax incomes at a flatter rate, but also the use of poisonous diesel and petrol. I would tax big, noisy, congesting cars too. I would exempt quiet electric cars if they are also very small.

        I would also favour local businesses over international ones, but the accountants may say that is too difficult to arrange.

        What I wouldn’t do is tax things which have been bought with money that has already been taxed, and which no longer reflect the person’s ability to pay.

  22. rosemary permalink
    March 7, 2012 4:00 pm

    Dear Regina

    Here are some thoughts on social mobility:

    If some are to move up, then others must move down. This was well understood in the past, when there was a lot more social mobility than people now will allow, but doesn’t seem to be admitted now. The fashionable thinking now seems to be for everyone to be in a managerial job and no-one doing the manual work which desperately needs to be done. Everyone has to go to university too now.

    I have always had a great respect and admiration for manual workers and engineers, so I don’t understand why this essential and creative work is looked down on by people who can’t do it themselves and yet rely on it. Managers proliferate now, and so do “officers”, which has driven up the price of everything; but has the quality of life in general, and that of the work in particular, improved? And are all these officers and managers more educated than working class people used to be?

    The most inspiring story of social mobility I can think of in recent times belongs to one of Bristol’s greatest adopted sons, Ernest Bevin. He began life as the illegitimate son of a Somerset village woman, was orphaned at the age of 8, progressed on his own merits to driving a horse and cart up and down Park Street, founded the TGWU, and eventually became Minister of Labour at a time when that job really meant something, as it effectively helped to win the war. He ended up charming the King and Queen as their Foreign Secretary, co-founding NATO, and telling Stalin and Hitler where they could get off.

    He achieved all this without going to a grammar school or comprehensive, and without going to University. He once recalled as an eleven year old reading out the newspapers to the illiterate grownups at home, so he had no advantages there either.

    He was a manual worker of very great strength and ability, and we should be proud of him in Bristol. He probably did more to improve the life of the working man than any socialist. Curiously, I can’t think of a statue or plaque to him here.

  23. Paul Bemmy Down permalink
    March 7, 2012 4:38 pm

    The best university is the university of life, but they don’t give you bits of paper to show how clever you are and it certainly doesn’t figure in any league tables. What it does give is a bucket full of common sence, an ability to deal with lifes’ ups and downs, and a lesson in how to judge your fellow man, (or woman, if you like). Sadly our leaders think a spell at Oxbridge can teach you these things, but experience shows they can’t.

  24. rosemary permalink
    March 7, 2012 5:58 pm

    And they can’t impose social engineering quotas on the university of life, Paul, or water down its curriculum.

  25. rosemary permalink
    March 7, 2012 6:16 pm

    You’ll like this Paul:

    When Bevin was playing his central part in setting up NATO and the Marshall Plan, President Roosevelt asked him where he was educated, as he found him to be so very wise.

    “Sir” answered Bevin, “I gathered my knowledge on the hedgerows of experience.”

  26. March 7, 2012 7:40 pm

    As someone who has 25 years experience in sales and business my point is general. I have met, socialised and know a few millionaires my brother is one of them. Some are business people, some are people with great ideas and talent who work in the ‘knowledge’ industry computers, mobile phones etc. My brother is the latter.

    What all of them have in common in my experience is that they worked their backside off to get there. 5.30 on a Friday and I am down the pub having a libation and the millionaires are still in the office. Saturday morning they are still at it working. What I am saying is that the wealth creators of the world make considerable sacrifices to get where they are. Most CEOs I know and know of work 60+ hours a week and are incredibly dedicated. Even when we go to people who own corner shops, publicans your local garage are similar too.

    Not only do they see money doled (pun intended) to in a minority of people who are wasters, they further see that to pay for it, at the top end, if you include NI 60% goes to the government.

    For the people who are in the multi millionaire/billionaire class they do not have to put up with the politics of envy and take their money to where they are appreciated.

    I do not blame them.

  27. rosemary permalink
    March 7, 2012 10:34 pm

    Hear, hear Dave. This punitive taxation is an aberration and has brought down the western world. The energy and industry have passed to the East where 10% is considered a reasonable and normal percentage for the rulers to take from people’s earnings. We used to have plenty of folk memory here of even a tenth being thought an oppressive amount, just as we had an historical memory of 2.5 per cent being an empire-destroying rate of inflation.

    How have so many people come to think it acceptable in a free country for the government to take the greater part of what people earn? And why would they rather have fewer successful people in their country than risk having some doing better in life than others? A healthy society would approve of people bettering themselves by their own hard work, and encourage it.

    There is nothing virtuous either about being compelled to give up more than half of what you earn, whereas voluntary charitable giving is virtuous. But overtaxation has killed the charitable instinct that was once so strong here – when philanthropy was carried out on a grand scale, and the benefits were considerable. We still benefit from those bequests today. Just compare what we got from philanthropic giving in the 19th century to what we get from punitive taxation today. The architecture alone tells you how much we have lost.

    • David Etches permalink
      March 7, 2012 11:43 pm

      The Victorians undoubtedly left their mark. Their philanthropy came from wealth created out of the misery of the poor. They also didn’t give up their wealth and power easily. Every social improvement came from a long English tradition of dissent and protest and ultimately by the working man organising and standing up to them. The last gilded age of obscene wealth ended just before the First World War. From then until the late 1960s there was a gradual equalisation culminating in prosperity and virtual full employment for a majority rather than a minority. Since then the pendulum has swung the other way with me first get rich quick being the order of the day. That is until the collapse of Lehman Brothers and the whole edifice of criminal capitalism being shown for what it is, an illusion. And who bales out the rich when it goes wrong. Oh guess what? We all do. And the extremely wealthy still bleat about the cost. Since 2008 they have been trying to get back what they had. It’s a bit like putting the genie back in the bottle. The second gilded age is over.

      And while I’m at it it’s not only the rich and successful who work hard. Speak to a single mother holding down several low paid jobs working night shifts cleaning the office of the businessman and ask if she’s not working hard. The only difference is the amount of money. Why are the wealthy automatically lauded and the poor and powerless vilified?

      Good can come from money but money, especially enormous amounts in the hands of a few does not deserve deference and a willingness to let them get away without paying their fair dues.

      • March 8, 2012 9:02 am

        David my area of expertise is lifestyle choices and have read many books on social and economic history, particularly in Victorian times. The smoking ban in 2007 led to the closure of 12% of pubs in this country and I had to track back to Victorian times as to how many pubs there were in the UK then, to compare.

        Largely because there was little else to do for entertainment there was in the early half of the 19th century 1 pub for every 100 people. In 2012, now 1 pub for every 1,000 people, so 90% of pubs have closed.

        What I am saying here these pubs must of been supported by working class people who had money left over at the the end of the week to go out. There were different levels of working class people. After the industrialisation of mechanical cotton spinning machines, weavers were extremely well paid and Bolton weavers were seen with £5 notes in the band of their top hat. I guess £5 must be the equivalent today of £1,000-2,000. Yes there was some extreme poverty the Joseph Rowntree paper from 1896 is shocking, but industrialisation also brought wealth and prosperity to the working classes too. In the long run literacy and learning too.

      • David Etches permalink
        March 8, 2012 9:50 am

        Dave you’re right, capitalism is without doubt the greatest boost to wealth that mankind has ever known. My issue is not about wealth creation or the wonders of the Victorian age or the British Empire (although that’s a different conversation) it’s about distribution of wealth and the gap between rich and poor. At the end of the 19th Century the gap was immense. Since the 1970s we have been recreating this gap. By 2008 we’d almost achieved Victorian levels of inequality and injustice. The conversation about the deficit is essentially the ruling classes trying to get back what they had by convincing others to pay for it. The 1% mess up, the 99% clean up.

        Wealthy people in positions of power do not make concessions lightly. As you say the Joseph Rowntree paper in 1895 showed horrendous examples of absolute poverty. Don’t forget this was in a country with the “greatest Empire the world had ever seen”. 1895 was perhaps the apogee of British political and economic power in the world, yet we still had the workhouse and the “undeserving poor”. How could that be unless the rich thought the poor to be an economic fact of life which they could do nothing about. Worse than that was the rise of a prejudice called eugenics which essentially preached that the poor were sub-human.

        Your Bolton weavers with their £5 notes were an early example of the “loadsamoney” workers in the 1990s. There are other examples of well-paid workers if you look for them, however, the reality for the vast majority of the working and non-working poor was grinding and unremitting poverty in the richest country in the world. See also the USA today. Poverty is relative. If you’re surrounded by wealth (TV, advertising, celebrity culture) and you have to deal with Wonga.com to get by you feel poor.

        Elementary education was introduced because employers needed a more literate workforce not to usher in a new age of universal enlightenment. Improvements in the lot of the majority started after the First World War when British power was on the wane and when political ideas more sympathetic to working people started to have more influence. The Victorians wouldn’t have entertained the idea of a National Health Service.

        I reiterate there is nothing wrong with hard work, with prudence, with accumulating wealth and the conspicuous consumption that goes with it. But please spare me the hard luck stories of the extremely wealthy; the, I’m going to leave Britain because it’s so difficult for me to earn a crust; the, I’m paying so much tax that after the school fees, and the 5 foreign holidays and the cost of staff and keeping my 3rd home, I’ve got to get by on £500,000 a year – Of course this is exaggeration – but not so far from the truth.

        What gets me most is the superiority complex of the rich. The belief that because I am successful and wealthy I am therefore a better person deserving of greater respect. Don’t forget that despite everything that has happened over the last thousand years, in this country most wealth is still inherited wealth and the Robber Barons of the 11th Century, the Normans and their descendants, the established church and the monarchy, still own vast tracts of Britain, and still expect “a doff of the cap” for no more reason than an accident of birth.

      • rosemary permalink
        March 8, 2012 11:59 pm

        David I think you may be confusing the upper class with the middle class here.

        In Victorian Britain it was the latter who employed the working class to enrich themselves, not the former. The upper class had plenty of servants and dependants, but not to make money out of; rather the reverse. A typical Victorian magnate derived his income from land rents, not factories, and those who paid rent to him were not the poor. They were well established tenant farmers who employed plenty of people themselves.

        A Victorian landlord received many begging letters a day, and usually responded generously to each of them, despite their being from total strangers. There was no Welfare State then, and that is how relief was mostly given, though there were the legacies of the Elizabethan Poor Law too in the form of the workhouse and parish relief. The upper class, and later the upper middle class, built cottages and schools, hospitals and asylums, museums, libraries, concert halls, art galleries, university colleges and other institutions of learning; they built urban housing and almshouses too; they also commissioned landscaped parks, in the aristocratic pastoral tradition, but for the enjoyment of the urban poor. None of these things were forced out of them by the working class – who hadn’t particularly asked for them. They provided the foundations for most of the institutions of today that you probably associate with the state, but their architecture and landscaping was very much more aesthetic and uplifting than the alienating Stalinist concrete wildernesses the big modern state has added. Upper class women did their bit too, setting up Girls Friendly Societies, needlework guilds, Dorcas meetings, mothers unions, and the rest. Easy to sneer at, but it wasn’t done through fear or compulsion.

        The working class were not ground down. They had their own strong culture, forming bands and choirs in almost every town and village, for instance, few of which survive today. They had their own chapels and charities, friendly societies and unions, their own cuisine, and their many hobbies, skills, and interests. It is only too easy to succumb to the popular stereotype of the robber baron and the oppressed peasantry – as it is of the British Empire.

        The past was a lot more complex, enlightened and sophisticated than people make out. I would say that at the time the upper class was at its zenith – or as you put it, at its most obscenely rich – was also the time when the working class was in its heyday, and the middle class too. They all had strong institutions and cultures which made up the British nation, and which have mostly fallen away in the age of mass media, the motor car, the cheap flight, convenience foods, feminism, and the welfare state.

        Social and political reforms in the 18th and 19th centuries did not come about because the lower orders mounted French or Russian style revolution. In some cases we can’t even say how they came about, but it was mostly achieved through the dynamic between the two aristocratic parliamentary parties, from which women and the working class were entirely excluded. Womens suffrage was not granted because women committed outrages. On the contrary, these held it up, because the ruling class didn’t think it a good idea to be seen to be giving in to them. Furthermore, by late Victorian times the British working man was more or less exempt from taxation, and free too from conscription. That was not the case on the continent.

        Probably enough reaction for now!

        As for hierarchy and deference, wouldn’t a little more gentleness and courtesy be nice in this rude modern world? Raising caps and hats, bowing, and curtseying, were done to everyone by everyone. It wasn’t demeaning, just civilized. I think it a shame that chippiness has become so widespread that only princesses and aristocratic ladies can curtsey naturally and gracefully now – and ballerinas.

      • rosemary permalink
        March 9, 2012 12:58 am

        The two wars were really what changed everything, not working class agitation. The First War in particular, because so many upper class officers were killed early on, and middle class ones had to be appointed to replace them. This had been unthinkable before.

      • rosemary permalink
        March 9, 2012 10:09 am

        Let us also ponder this, David: the 1960s bit of the BRI was situated and built at the peak of the period you say was best. But it is the 1830s BGH which is being sold off for luxury apartments.

  28. March 8, 2012 8:49 am

    The Daily Mail ran a story recently that the shopping bill since 1861 has reduced by a real factor of 13 fold. So for absolute clarity a weekly shop now of £100 would be £1,300 in 1861.

    I find the is staggering as the industrial and agricultural revolutions were in full swing. In 1851 the Great Exhibition at Crystal Palace confirmed the triumph of British industry, that is we were “the workshop of the world.” In 1861 we manufactured 66% of the world’s goods.

    So all those greedy bankers, industrialists, scientists, entrepreneurs, who have “enslaved” the proletariat, to the contrary have in the medium and long term made the world an infinitely better place for everyone. “Greed” and kudos are on reflection, motivations that are not as bad as some make out.

  29. rosemary permalink
    March 8, 2012 11:01 am

    I would say that overtaxation, which was intended to abolish the differences between various people’s fortunes, destroyed the delicate system of differentials on which our national prosperity depended; differentials and incentives which James Callaghan was the last politician to plead honestly for. Overtaxation killed the plodding familiar domestic goose which laid the golden eggs, and in her place has come a terrifying predatory international eagle whose nest is far away and out of reach. Classifying both birds as “capitalist” is oversimplifying a complex subject; one studied in depth over the centuries by philosophers and political economists. The Fable of the Bees, The Wealth of Nations, Sybil, and The Tragedy of the Commons are just a few examples. Marx’s thesis was drawn from studying just one tiny part of North West England in the 1840s, where there really was a middle class which owned the means of production getting richer and richer, and there really was a proletariate being exploited by them, and getting poorer and poorer. What we have witnessed in the UK, in Europe, in the USA, in China, in India, in the Near East, in Africa, in South America, in Australia, everywhere, cannot be reduced to those terms. Lancashire moved on under Disraeli, and now Big Cotton is as dead as Marx himself.

    Socialists aren’t just simple-minded, they are also dangerous megalomaniacs. The bigger and richer the government gets, the bigger the mistakes it can make, and it does.

    But socialists cannot rule the whole world. Even Stalin understood that. There will always be some new exciting place where enterprise and energy are getting going, just as they are seizing up elsewhere. And big government, both here and in Western Europe generally, is now being strangled by its own bureaucracy – another thing we used to learn about in history books, while studying the decline of other people’s empires.

  30. March 8, 2012 1:35 pm

    @David Etches

    If I can draw an analogy, biologically the reason we die is the very thing that keeps us alive oxygen, by a form of corrosion eventually kills us. I believe the same with the welfare state. The very thing that keeps working class people alive is ultimately killing it.

    Let me first start out by saying those who are physically and/or mentally disabled, if private charity does not exist in sufficient quantities then in a civilised society a government must step in.

    Also what I am about to say is very un-PC and controversial. My family background is entirely working class. I failed my 11+ and went to a comprehensive. From being brought up in that environment I can assure you that many working class people are happy to be as lazy as society and government will allow.

    I was watching one of those review programmes on the BBC and it was showing archives from the 1970s. They interviewed an ex West Midlands car worker and his holidays in Spain during that time. He openly admitted that he was so well paid he could not spend the cash he took with him on his holiday. With the demise of manufacturing in the UK the working classes have lost a source of well paid and plentiful jobs, (Nissan accepted). The causes of this are especially militant trade unionism, bad management and competing with Indians and Chinese workers on £2 a day. We have become a knowledge and intellectual based country.

    With a mixture of 13 years of Labour ineptitude with education and an appalling crypto Marxist educational establishment and ‘prizes for all’ culture which preceded Labour, the supply of the working classes to the knowledge industry is a trickle. BTW I work in computer recruitment. We have classrooms with insufficient discipline, expulsion of some quite revolting yobs is near impossible, a dumbed down curriculum, an anti intellectual culture, many lazy and ill motivated pupils. Why? Unlike China and India there is no welfare state and education is paid for directly in cash, in India. You have many motivated Indians. I will also add that on parents evening in the hugely ‘deprived’ Hackney area where I lived and sent my kids to the local state primary school, was virtually deserted, except for the white Guardianistas who lived there. I came to the conclusion that 51% of poverty was self induced. Many working class do not have the motivation to improve themselves.

    Consciously or sub-consciously they all new the taxpayer would look after them.

    I have just noticed how long this is but will not rant on about 52% of the UK’s income is spent by our government. High taxation, state spending and EU red tape is strangling competitiveness and entrepreneurial spirit in this country.

    I would suggest David that the reason for the widening gap between is the fault of the welfare state, socialist interference and a working class unmotivated in getting an education and self improving.

    • rosemary permalink
      March 8, 2012 2:10 pm

      Dave. another fascinating programme was on last night, a film about a neuro surgeon travelling back and forth betweent the Ukraine and here. We saw the devastation wrought there by years of socialist tyranny, from which they have not recovered, but are trying to, with his help. And we saw, too, his frustration with the growing futility and waste which pertain in our bloated and inefficient NHS here.

  31. rosemary permalink
    March 8, 2012 1:38 pm

    Dear Dave and David

    By far the richest people I know are tax barristers. I hardly ever see them now because they and their families have swum into a different world. But I don’t envy them their exotic lives one bit. They didn’t go to good schools, and didn’t go at all to university. They slaved night and day to get themselves qualified, first as accountants, and then as barristers. Two lots of gruelling training over many years, with deferred rewards. But I do very much regret the source of their colossal wealth. A huge industry has been created to help people and companies hang on to more of their earnings, and vast sums of money are being poured into it. What a waste of talent, time, and resources.

    The huge salaries are paid in the first place because tax is too high, and the indecently high surplus sums, whether in the form of bonuses, shares, or salaries, are paid to cancel that fact out. This is an unsustainable arms race between big government and big business, and it should be stopped.

    • rosemary permalink
      March 8, 2012 1:54 pm

      PS I should perhaps add what we may not all take for granted, that much of the money big government confiscates, is, as Dave above illustrates, not spent wisely to help the poor. On the contrary, what is left over from paying a bloated and destructive bureaucracy, and from engaging in ill-considered foreign intervention, has actually harmed the working class, stripping it of its cultural strengths and cohesion, and thoroughly demoralising it.

      • March 8, 2012 5:57 pm

        Rose don’t start me off. 13 years of Labour saw the revenge of the the local government officer, NHS officer and civil servant. Self serving bureaucracies, where the buck does not stop, a system specifically designed to avoid accountability. Middle managers creating work for each other, with 50% of their time doing their work and 50% of the time playing politics.

        I do not pretend to have great inside information on British politics and take my information as you see fit. However I have been told the real reason Steve Hilton has resigned is that he got completely frustrated with the Foreign Office who stymied his desire for reform on Europe. So unelected civil servants are running the country, not elected politicians.

  32. March 8, 2012 6:50 pm

    Dave – Steve Hilton (who I’ve never seen) didn’t get any votes either! The Spadocracy have more power than about 630 MPs, it often seems.

    • John S permalink
      March 8, 2012 7:10 pm

      Were your controllers, ASH, elected, Stephen?

    • rosemary permalink
      March 9, 2012 12:31 am

      This was the one spadocrat I rather liked the look of, though I have no actual knowledge on the subject.

      • rosemary permalink
        March 9, 2012 11:16 am

        I’m more worried by the power and influence of Gus O’Donnell and Jeremy Heywood. O’Donnell in particular, for usurping the sovereign’s prerogative.

        The Cabinet Secretary is just supposed to take the minutes at the Cabinet meetings. but I suppose it was ever thus – look at Stalin.

      • May 29, 2012 3:23 am

        io voglio esesre ottimista,quindi .sbilanciamoci!A me sembra fatto molto bene,la grafica non la migliore vista fin ora ma molto buona,sopratutto(mi sembra) negli effette luce e l’atmosfera generale del gioco sembra molto intrigante io incrocio le dita per avere quantomeno i sottotitoli in italiano!!

  33. Paul Bemmy Down permalink
    March 8, 2012 8:34 pm

    I’m certainly out of my depth here, but a great discussion and lesson of history. Back to tax. Much of my life has been working and socialising with basic rate tax payers. Most have a social conscience but many don’t feel good about paying tax. And the reason is simple. They don’t like the way it is spent. There is a great feeling that not working makes you very little worse off than those who do. We are all staggered to be told the nos. of families receiving over £25’000 in housing benefit alone, and this is net of tax, plus all the other entitlements. And we keep being told about fairness. Is it fair that a pensioner who has probably paid into the system for 4 decades or more, gets far,far, less than those who may have paid nothing at all? I don’t think so, but thats not what is meant by those who keep on about fairness. What I would like to know is who set the level of benefit. They would not have been so generous if it had been their own money i’ll wager. The benefits system is like an oil tanker and will take along time to turn.

  34. rosemary permalink
    March 9, 2012 2:46 pm

    Paul, we have Hitler to thank for this, as for so much else that has gone wrong since his appearance on the scene.

    In the 1920s, Neville Chamberlain was creating a very nice welfare state that wouldn’t have corrupted and demoralised the working class or encouraged foreign visitors to take advantage. In 1925 he introduced Family Allowances and these were always judged a great success. He hoped to build on this with a wider and more generous scheme for pensions, proposals for which were set out in his manifesto for an election to be held in 1940, in which he also planned to bring the whole populaton into the NHS he had already established. He speeded up the clearance of slums, and under him more houses were built every year than by his party after the war. His policies were designed to bring about a better partnership between the state and the individual, and they were properly costed. He had always balanced the books in Birmingham, and he continued to do so nationally.

    The war (and Chamberlain’s cancer) enabled Messrs Attlee and Beveridge to impose their profligate utopian version, while Churchill was concerned with other things. A lesson for us all in how an inexperienced junior partner in coalition can do a lot of lasting damage, despite not being in number 10 or 11. There could have been a responsible and affordable comprehensive welfare state, and the Conservatives even had a massive majority in the House of Commons for it. But without Chamberlain’s vision and dynamism, they blew it.

  35. rosemary permalink
    March 14, 2012 2:20 pm

    To bring us back to today: as they listen to an African gentleman explaining in a French accent why he must move the Pru from London to the Far East, don’t the left wing control freaks have to face the truth about European tax and regulation? Not only are they damaging to our prosperity, but they aren’t even winning them the control they seek.

  36. March 14, 2012 2:34 pm

    @Stephen you said:

    ” I have always believed that tax should fall lightly on the low paid..”

    We do agree then

    The cost of the manufacture, marketing and distribution of a packet of 20 cigarettes is <£1.50, about £5-£6 is added in tax. About 14% of middle and upper incomes smoke and 28% of lower income people smoker. Therefore cigarette taxes are a tax on the poor and heavily weighted against them too.

    I assume on the same basis that you are against minimum priced alcohol too.

    • March 14, 2012 7:48 pm

      Dave, you may be surprised to discover that we almost have a meeting of minds on that. 50 years ago cigarette smoking was common across all demographics. Now it is concentrated among poorer groups. That is why I am in favour of the full armoury of tobacco control measures and smoking cessation therapies to guide and help people to quit smoking, not just rely on heavy tax rates.

      But I do favour minimum pricing of alcohol as supermarkets have made it too cheap.

      • John S permalink
        March 14, 2012 8:47 pm

        Even though those tobacco control measures are becoming increasingly more counter-productive and the smoking cessation therapies are practically useless? Supermarkets have been selling cheap alcohol for decades. However, since the smoking ban, prices in pubs have increased disproportionately to inflation and duty increases. Quite simply, the pubs that have survived are having to rely on food and are charging “restaurant prices” for drinks.

        P.S. Having qualified as a Certified Tax Advisor, I take it that you are in favour of tax avoidance, Stephen (according to the Tobacco Control “competing interest” argument).

      • March 15, 2012 8:57 am

        Stephen on a lighter note you may also be surprised that I have managed to get hold of some snus, the Swedish moist tobacco that you put on your gum and cheek with the idea of cutting down. I’ll tell you how I get on.

      • rosemary permalink
        March 15, 2012 3:27 pm

        Stoking up with cheap alc from supermarkets often precedes a “night out”. But our main problem is with the over-concentration of licensing in certain parts of the city and far too little supervision by the police. They used to protect the peace as a matter of course, but now say they haven’ t got the powers or the numbers. The all too often thuggish bouncers are no substitute.

  37. March 15, 2012 1:21 pm

    Dave – I’ve met BAT to discuss snus. Trust you bought it in Sweden…

    • March 15, 2012 1:27 pm

      I was given them by a Swedish national. I find it a disgrace they are not legal in the UK because of the EU. You are aware that Sweden has half the smoking rate of the UK and hence half the lung cancer.

      As the Chairman of a national organisation I cannot be seen to be breaking the law.

    • March 15, 2012 1:35 pm

      PS Stephen, as I drum my fingers and roll my eyes what happened to FCTC 5.3😉

  38. David permalink
    September 12, 2012 8:22 am

    I struggle financially and pay my taxes but I believe that we should reduce taxes on hardworking small/ to medium size companies and individuals and taxing the wealth (ier ) only results in avoidance and mass exodus and I do think it is in many cases coming from a place of envy. On saying that, it depends on what one considers wealthy and also depends on which tax . Large corps should be reigned in but in many cases a tax is unfair such as personal INHERITANCE TAX. – it is misunderstood as a tax for the rich. It is not. It is a tax on the middle hardworkers who live in London and the south, who are not financially savvy. family homes are sold to pay the gov It is a wicked tax that only the savvy know how to avoid. ( i.e Miliband ! ) the threshold is far too low or indeed should be abolished; a small house in fulham that a family might have been living in for generations would result in a pay out of £3 or £400,000 to the government and that family would have already paid tax all their lives.

  39. September 19, 2012 9:50 am

    David – yes inheritance tax is badly in need of a major reform. But house prices in London and the SE do represent a huge amount of wealth to be transferred. If the £1m “family home” is inherited by one child who then lives in it then I can see the problem. But what if the house is sold and the proceeds distributed to several heirs, none of whom live in the SE?

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