Ed,
Yesterday on Question Time, you said, as you have said many times during this campaign:
There are some people who tell you that the way we succeed as a country is as long as a few people at the top do well and large corporations, that’s what powers the economy…
Here’s a good question, which you’ll be glad I asked you: Who are these people who tell us this? Have we heard of any of them? Are they standing for election? Can you give us a direct quote or two?
I ask because this seems to be the core message of your campaign, and I am a little concerned that it might be a complete fabrication. Clearly it evokes the right kind of sentiment, but that is surely no substitute for truth.
You go on to argue that Britain does well when working people do well, which is true, obvious and banal. In fact to clarify things here, let me explain that GDP adds up the goods and services produced by everybody, whatever their pay level, however big or small, successful or unsuccessful their employer. It is blind to all that, it just aggregates the value created. By work. Work being done by working people.
Now clearly if we create 2 million net new jobs, or increase skill levels with 2 million apprenticeships, that is precisely ordinary working people doing better, as opposed to “a few people at the top” – so perhaps you are calling for more of what the coalition has been doing, and the previous government neglected to do. I’m sorry (actually I’m not) if this success has robbed you of a straw man opponent, perhaps you should try opposing your actual opponents:
To do it we need two things: to secure the recovery; and to put in place an ambitious long-term strategy that harnesses and encourages the skills and dynamism of British workers and British businesses.
In Government, we have laid the foundations of that future economy.
We knew that as we rebuilt the economy we had to do more than simply return to business as usual.
We knew we had to rebalance our economy, away from its over-reliance on the financial sector in the City of London and towards growth across the whole United Kingdom.
We knew we needed a real long-term strategy to boost British industry and put high tech manufacturing and cutting edge green technologies at the heart of a new economy.
And we knew we had to invest in the skills of a new generation of talented and enthusiastic British workers.
That is exactly what we have done.
…going on to give examples.
What excites me is the idea of being able to say to another person ‘you’ve got a job’, being able to say ‘you’re coming off welfare’. What excites me is seeing young people get the keys to that first flat. That’s the excitement we need, it’s about continuing with a plan that works.
I went into politics not because I wanted to implement some arid ideology, to play party games at Westminster. I went into politics because I believe in trying to make a difference, trying to help people change their lives.
The economy isn’t just lines on a graph or numbers in a book. The economy is every job our people have, the money you take home at the end of the month, cutting people’s taxes to help them in their lives. You’ve got nothing without a strong economy. This matters more than anything.
I’m guessing you weren’t referring to Natalie Bennett, Nicola Sturgeon or Leanne Wood, so I’ll save some space by not quoting them – no slight intended. And I’ve done some searching for a Farage speech on the economy but even they seem to be mostly about immigration and the EU, and how badly these affect ordinary people as opposed to the fat cats.
Now I’m not asking you to believe any of your opponents, just explain how what you are saying is different. If the difference is just that you “really mean it”, that is pathetic. You are claiming to stand up against the “some people” who say that only the fat cats matter. Who are they? Give us quotes. Are they the people who advised the previous Labour government to rely on tax revenues – and borrowing against future tax revenues – from an overheated city of London to fund public services, despite the warnings from Vince Cable that it was all a debt bubble? I think we should be told.
* Joe Otten was the candidate for Sheffield Heeley in June 2017 and Doncaster North in December 2019 and is a councillor in Sheffield.
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63 Comments
Economics is easy,the cost of production(including Labour)transport (including Labour) has to produce at market enough to live of & reinvest in the next round of produce getting to market,if it gets to market & is over valued then the market shrinks because the market is denied wealth created from producing these goods,if Labour is to high then when living cost are taken out not enough to reinvest in the next round of production no matter what the product is,So it is basic economics that if the rich get richer & the poorer the market /economies must shrink .
And investment stops because the need is not there because returns are low to make it worth while,Tax cuts to the rich fail everyone because as we can see whilst the rich have never had it so good why? is the worlds economies booming,rather than poverty,hunger being rife,only by restoring the true value between labour/rent/money can the economy a) recover b)g row
Sorry you seem to stick to Hayek/Friedman defunct flat earth economic modal,but it your fabricated ideology that is false & worldwide is not just losing support but lost support,only protectionist policies stand between us & prosperity
your ignorance shows why the lib-dems can not be trusted anywhere near government ever again
Sorry you wanted proof http://www.theguardian.com/business/ng-interactive/2015/apr/29/the-austerity-delusion of at least one person & i make two!
Joe,
You pose a question to the Labour Leader —
“…..There are some people who tell you that the way we succeed as a country is as long as a few people at the top do well and large corporations, that’s what powers the economy…
Here’s a good question, which you’ll be glad I asked you: Who are these people who tell us this? Have we heard of any of them?”
I am pretty sure that Stephen Hesketh is not a candidate in this election but is working hard for a Liberal Democrat MP who deserves to be re-elected.
Stephen has made points such as you refer to. Other regulars in LDV have also made the point that –
“…There are some people who tell you that the way we succeed as a country is as long as a few people at the top do well and large corporations, ”
You can find such quotes in LDV regularly over the last 18 months. See the threads on TTIP. I may even have said things like this myself in comments in LDV.
I am not sure Ed M is a regular reader of LDV but if he is he would have seen these comments.
You see a lot of Liberal Democrats are not persuaded by the rhetoric of new jobs created and everybody being better off.
We talk to the people around us and see a very different picture, one in which formerly secure jobs with proper contracts and pensions have been replaced by 1,800,000 jobs on zero hours contracts.
We see the working poor lining up at the food bank alongside the sanctioned people with a disability.
We see the people forced out of their homes by the bedroom tax.
The evidence of our own eyes does not sit comfortably with your assertion that –
“…clearly if we create 2 million net new jobs, or increase skill levels with 2 million apprenticeships, that is precisely ordinary working people doing better, as opposed to “a few people at the top” – ”
Maybe it is just here in the south that we see these things. Perhaps in Sheffield it looks very different.
In Sheffield Central last time we were only 165 votes behind — so best of luck next week, Joe.
@John Tilley where do you stand on small business start ups?
@ Joe Oaten, I am so glad you are likely to come behind the greens on Thursday.
As to who is saying these things – People like Sol Campbell who owns a £25m house in London and a country pile in Northumberland but things his council tax should be about £1000 and any more would be “punished for having made it to the top”.
The UK tax code is 17,000 pages long – How does this apply to ordinary people on PAYE ? Who basically need a couple of sides of A4. Do they fund the lobbyists and advisers who push for special treatment ? The Tax Payer Alliance, the IEA , Liberal Vision, all support trickle down economics.
Or what about the Lib Dem Plan announced this month to crack down on £9billion of tax avoidance – why we didn’t close the same £9 billion loopholes in 2010 is an unanswered question. Perhaps we could have kept our pledge on tuition fees.
Did you not notice the Sunday Times which reported last year BRITAIN’S wealthiest people are richer than they have ever been with a combined fortune of £519bn — equivalent to a third of the nation’s annual gross domestic product.
“As people have seen their wages fall in real terms, The Sunday Times Rich List 2014, published today, reveals that the 1,000 richest men and women have surged to new heights with their wealth rising by 15.4% on last year’s total of £449bn. ”
Then there Nick Clegg speaking on 7th April 2015 “The Liberal Democrats have got a plan to give further tax cuts to people on low and middle incomes by asking a little bit more from the wealthiest. The Conservatives, by contrast, want to give tax cuts to the wealthiest by taking from the poorest. That’s the difference and that’s the choice which people have got when it comes to tax cuts at this election.”
So you see, the sort of person saying their is a choice between the rich getting is the Lib Dem candidate in Sheffield, who isn’t you.
@Caractacus you could of course remove 17000 pages of tax legislation at a stroke by implementing a flat tax.
Thanks for the responses. To clarify: who is Miliband referring to and what exactly did they say?
John Tilley
I agree. How many of these new jobs actually pay and how many of the new self employed take a bucket and sponge to work.
@john tilley – can you actually give us some examples please – google is your friend here.
By the way your numbers are totally wrong on zero hours contracts:
https://fullfact.org/economy/zero_hours_contracts_surge_rise_guardian_mirror-2033
How about David Stockman
“It’s kind of hard to sell ‘trickle down,’ so the supply-side formula was the only way to get a tax policy that was really ‘trickle down.’ Supply-side is ‘trickle-down’ theory.”
Simon McGrath 1st May ’15 – 12:30pm ………………….By the way your numbers are totally wrong on zero hours contracts:…..
From your own site..”The figures released by the ONS yesterday were gathered by surveying a sample of 5,000 businesses about their use of zero-hours contracts. It found that there were approximately 1.4 million of these contracts in use across Great Britain.”
That was exactly a year ago, so john tilley’s figure of 1.8M looks pretty good…
Simon McGrath
“Number of contracts that do not guarantee a minimum number of hours where work was carried out was 1.8 million for the fortnight beginning 11 August 2014. The previously published estimate was 1.4 million for the fortnight beginning 20 January 2014.”
From the ONS
expats1st May ’15 – 12:43pm
[[Simon McGrath 1st May ’15 – 12:30pm …By the way your numbers are totally wrong on zero hours contracts:…..]]
“From your own site..”The figures released by the ONS yesterday were gathered by surveying a sample of 5,000 businesses about their use of zero-hours contracts. It found that there were approximately 1.4 million of these contracts in use across Great Britain.”
That was exactly a year ago, so john tilley’s figure of 1.8M looks pretty good…”
In my experience John Tilley undertakes decent research before posting. I would be extremely surprised if Simon McGrath were closer to the truth than John Tilley.
Joe
I think there is an answer to your repeated question is already in this comment —
Caracatus 1st May ’15 – 12:09pm
Caracatus lists
“… The Tax Payer Alliance, the IEA , Liberal Vision ” and those other lobbyists who are funded by rich people and corporations to make their case based on the far right philosophies of Hayek and co.
I would add to that list all the characters covered in the Owen Jones book ‘The Establishment – and how they get away with it.”. Jones interviews many of them including the man sometimes known as Guido Fawkes – who asks —
“Haven’t the plutocrats suffered enough?”.
He says he is standing up for the wealthiest. He explains why he is against democracy because – “.. Those who don’t (have power or wealth) are going to vote to take away from those who do have..”
The interview in this book with Mark Littlewood, who occasionally comments in LDV and was briefly a member and employee of this party, is also very revealing especially if you consider the links the he keeps with some fringe groups.
Caracatus1st May ’15 – 12:09pm
“The UK tax code is 17,000 pages long – How does this apply to ordinary people on PAYE ? Who basically need a couple of sides of A4. ”
That I believe, hits the nail of tax avoidance and evasion on the head.
By the way, I believe you are correct with the rest of your points also.
TCO1st May ’15 – 12:15pm
“… you could of course remove 17000 pages of tax legislation at a stroke by implementing a flat tax.”
Was that the sound of another nail going into your ‘I’m a real Lib Dem supporter’ coffin?
A single rate of tax ,does nothing to rebalance overvaluation/undervaluation it is just legallised tax avoidance ,
The difference between the price of any item & the true value it has in society is the damage it does to the economy??
Nice try guys but if you read the article you will realise that you are talking nonsense. Also worth point out that according to an independent study most people on zero hours contracts are perfectly happy with them
http://www.cipd.co.uk/pressoffice/press-releases/cipd-research-zero-hours-contracts-unfairly-demonised-oversimplified-261113.aspx
@A Social Liberal – David Stockman is a US republican – what has he to do with the UK election?
Miliband has been given too much of a soft ride. People focusing on silly things such as the way he looks and standing against his brother. He should be asked why he spend four years saying he was a lefty and then the past year saying he is basically a centrist. It’s opportunism.
The Labour business manifesto only offers small businesses crumbs. If he was really pro business he would temper his big business bashing with some more positive small business policies.
I agree he exaggerates. I don’t think he out and out lies besides by accident, but he definitely needs to be scrutinised more.
@Not or is it Stephen? You bit 😉
Caracatus and not who:
OK so we have 3 organisations who you say say this. Quotes? Anybody standing for election?
With the changes made to the tax system, this government is much more trickle-up than trickle-down.
Ed Miliband said: “There are some people who tell you that the way we succeed as a country is as long as a few people at the top do well and large corporations, that’s what powers the economy…”
Joe Otten is right. This is a complete fabrication. Because the Tories, who adopt this policy, never actually admit to doing so.
Most of their money comes from millionaire oligarchs. They do what they are paid to do. Then they go away and pretend to the public that their funds come from little old ladies holding coffee mornings. Which is totally untrue.
The Lib Dems, sadly, also dance to the tune of rich donors. Meanwhile Labour are conflicted about it. Mandelson and Blair also believe power comes from playing along with the rich. If Ed loses, expect David brought back in order to restore New Labour as a rich man’s party.
@Paul “legallised [sic] tax avoidance”
Tax avoidance is legal. Tax evasion is illegal. All tax rules are in any case legislated for.
Joe Otten, I see David Cameron’s comment you copy above as being tanatmount to arguing for trickle-down – that he is talking in code when he speaks of prioritising an ‘economy that works’ and is implying a strategy of slashing services and benefits in the name of that, whilst hoping that in future ‘we’ we may ‘all’ benefits.
You are right that Miliband is trying to pretend that both parties in Coalition tend to this view, but right now we need to go after Cameron’s argument that he is “continuing with a plan that works”. He is doing no such thing, he is planning to tear up the coutnry we know. Now, I think Miliband has some rational reasons for scepticism that the LibDems on their own can effectively hold Cameron back from such a plan (although I hope with every fibre of my being that someone or other can do so) and therefore he is (maybe reasonably) trying to hit both centre and right where he believes they are weak, and create a dualism of him against the world.
I don’t think defending Cameron helps in refuting that artificial dualism.
I also think Miliband is expecting people to see ‘succeed’ to mean more than ‘earn more’ or ‘GDP grows’; a lot of his argument (rightly or wrongly) has been about job insecurity — can we argue that people’s job tenure and job satisfaction is better now than in 2010? In 2005?
If things continue well, this argument could be out of date soon — but for many people it’s not yet, and Miliband is giving it all he’s got and you would too if you were him.
TCO tax avoidance isn’t legal in all free trade agreements it is illegal”this as never been tested in a court of law,but it is the other side of the law that is conveniently over looked
& Flat rate tax just stops accounts from doing this! & government pretence that this is what is to be paid if you are unable to get around it which millions of SME’ s are not in a position to do so creating,the reason we are seeing small independent business disappearing of our street’s,through these unseen tariffs
Sorry for some reason part went missing,all free trade agreements say that no tariffs seen or unseen should impair or advantage any party. look at our high streets were loss making business to offset tax undermine sustainable well run business. damaging the economy in the process
Michael Fallon ?
http://www.telegraph.co.uk/news/politics/conservative/9530117/Michael-Fallon-We-salute-those-who-risk-their-own-money-to-create-jobs.html
Stee Way the only way new money is printed is by people loaning money,if people use money to fund business to avoid tax then this stops new money being created,this is good at this stage of the cycle but growth can not return in earnest if it continues
to prove my point http://thelincolnite.co.uk/2015/05/lincoln-independent-cafe-closed-to-make-way-for-caffe-nero/ No competition,because tax avoidance will always undercut businesses that take out loans!
“Who are these people who tell us this?”
It’s the people who attacked Labour’s non-dom plans because they said the rich would flee and we’d all be worse off as a result. It’s the people who attacked Labour’s mansion tax plan because they said the rich would flee and we’d all be worse off. It’s the people who attacked Labour’s 50p tax rate because they said the rich would flee and we’d all be worse off. And on and on – can you see the pattern? If you don’t realise that politics and the press is crammed with people who believe we should be looking after the rich first and foremost, you’re seriously unperceptive.
Incidentally, Nick Clegg has often stated his opinion that the Tories are driven by a belief in trickle-down economics. A quick Google will find several examples. So perhaps you could ask him who these people are, when you’re commiserating with each other at Sheffield town hall next Friday morning?
@stuart – but seems pretty obvious that a lot of foreign rich people would leave if we abolished the non dom status.
Presumably you are not in a job which relies on their spending ?
On the general theme of the election campaign being dominated by the rich and powerful trying to scare us in to thinking we’ll be in big trouble if we don’t look after them, Mark Steel has written an amusing and perceptive article :-
http://www.independent.co.uk/voices/comment/general-election-2015-watch-out-a-vote-for-labour-will-bring-the-fires-of-hell-to-britain-10217396.html
@Joe Otten
“Who are these people who tell us this? Have we heard of any of them? Are they standing for election? Can you give us a direct quote or two?”
You can add Simon McGrath to the list (6:54 pm above).
Simon McGrath 1st May ’15 – 6:54pm
“@stuart – but seems pretty obvious that a lot of foreign rich people would leave if we abolished the non dom status.
Presumably you are not in a job which relies on their spending ?”
A very interesting statement Simon.
Do you seriously believe in the widespread benefits of trickle down economics?
“Also worth point out that according to an independent study most people on zero hours contracts are perfectly happy with them”
This linked report is fascinating. It’s been put together by an organisation of HR people, who, unsurprisingly, think zero-hour contracts are a jolly good thing. What becomes increasingly apparent, as one reads through the document, is that the responses from both employers and employees too think it’s the best thing since sliced bread – it’s almost too good.
But when it comes to the methodology… at one point it appears that the sample size is 453 or 456 (depending on which part of the report) zero-hour employees – a ridiculously small sample. More worryingly, “the survey is based on responses from more than 1,000 HR professionals. All respondents have HR responsibility within their organisation, which may or may not be their sole and primary function within their organisation. ”
And this is the source of all that nonsense about zero-hour employees loving their contracts? My God; it’s a complete joke survey.
@Not he may believe that in terms of revenue from income tax the wealthiest 1% pay over 26% of IT received by the Treasury:
“In 2009-10, the top 1% of Income Tax payers were responsible for 13.9% of declared income before tax. Conversely, the same group paid some 26.5% of the money taken by HMRC in Income Tax. These figures are very close to those cited by Mr Redwood, albeit slightly different”
https://fullfact.org/factchecks/tax-28258
Actually, I think I agree with Joe more than I first thought. Miliband has just said this to the Guardian:
“is the country run by an elite of the most rich and powerful or is it run for working people?”
Many of the elite have been squealing over things like the increased bank levy, a very tough cap on payday loan companies, increased capital gains tax and stamp duty, increased pension rights for private sector workers.
Miliband is trying to play divide and rule. There is a way to say you want to reduce inequality without sounding like a conspiracy theorist.
Miliband is probably referring to the financial backers of the Tory party. The ones who donate a vast sum to dine with a minister or play tennis with Dave. The very small number of people who have a massive effect on how our country is run…
Eddie Sammon, it’s not a conspiracy theory if it’s true.
@Bolano – the survey is carried out by YouGov – not among HR people – page 43 .
If you are going to comment here you could do us the courtesy of actually reading the report you are rubbishing …..
TCO
26% on 96% of the wealth,so the sum is actually 4% of the wealth pay 74% of the tax
Simon Mcgrath
people may leave & they may take their wealth with them but i would rather die poor & free of financial tyranny than die a slave to it! & every human should aspire to that!
@TCO
The page you link to points out that when other taxes are taken in to account, the richest 10% of households pay virtually the same proportion of their income in total tax as the average household.
Bolero the slave owners showed parliament many times over many years that they were happy with their lot,it easy to extract the answer you want, when you do not know when & were your next hour is coming from if asked the question rocking the boat is not a option & history tells us that,,the shame is that it is happening in the 21st century
Indeed, the top 1% of income tax payers do contribute a much larger proportion of revenue than their share of income. The income tax system is unquestionably progressive, as you would expect, since the marginal rate is much higher than the average rate for almost all taxpayers, while for the top 1% (and especially the top 0.5%) their average tax rate approaches their top marginal rate (since the personal allowance is withdrawn and the value of lower rates is modest).
However, while the top 1% contribute a disproportionate share of income tax revenue, income tax yields only about one quarter of overall tax receipts. Most other taxes are less progressive or indeed regressive with respect to income. When you look at total taxes as a proportion of household income, the tax system as a whole is roughly proportional, with most households paying about one-third of their income to the Exchequer.
While there can be different views about this, most independent experts believe there is little or no revenue to be gained by making the income tax system even more sharply progressive. The IFS reckon that the yield from putting the top rate back to 50% is likely to be “nugatory”. The official HMRC estimate is £500 million in extra income tax revenue (although the overall yield may be less still, or even negative, if other revenue streams are depleted).
PS: I don’t believe in ‘trickle down’ but I do believe there can be a supply-side response to tax changes. The Laffer curve is not a myth: there is clearly a revenue-maximising tax rate, it’s just that we don’t know exactly what it is and it is likely to be different for different taxes (lower for corporation tax or VAT than for income tax, for example). Also note that the actual top tax rate on earnings in the UK is not 45% but 47% (including employee NI) or 53% (when you factor in employer NI, which of course you should since it has the same of effect of lowering the return to labour). Labour would take the top tax rate on earnings to 58%.
@Stuart 1st May ’15 – 10:13pm
“The page you link to points out that when other taxes are taken in to account, the richest 10% of households pay virtually the same proportion of their income in total tax as the average household.”
But we should acknowledge that’s actually the richest 10% of taxpayers – the richest 10% pay a lesser proportion of their total income as the greater the wealth, the greater the access to tax avoidance.
@Simon McGrath 1st May ’15 – 10:04pm
“@Bolano – the survey is carried out by YouGov – not among HR people – page 43 .
If you are going to comment here you could do us the courtesy of actually reading the report you are rubbishing …..”
From your page 43:
“The survey is conducted using the bespoke YouGov online system administered to members of the YouGov plc panel who have agreed to take part in surveys, as well as to CIPD members. The survey is based on responses from more than 1,000 HR professionals. All respondents have HR responsibility within their organisation, which may or may not be their sole and primary function within their organisation.”
Your attempts to ‘polish’ your ‘sources’ are convincing anyone.
http://krugman.blogs.nytimes.com/2015/04/10/the-laffer-swerve/
@Alex Sabine 1st May ’15 – 10:26pm
“Labour would take the top tax rate on earnings to 58%.”
While in Russia, a uniform tax on earnings is, I believe, 13%. How many Russian multi-millionaires living here will go back, I wonder, if Labour gets in.
Since it is already many % points behind us,one must wonder why they came here in the first place,maybe it is the lack of tax on wealth,hence why i use the wealth indicator for it includes all forms of income from the wealth held & not just earned income which is often paid as a token jester of a sum suitable to the tax purpose of those involved.
@ Bolano
That is a straw man. I am not saying that Russian multi-millionaires will leave. The UK has a robust legal system, repect for private property rights and the rule of law – in stark contrast to Russia.
Obviously the tax rate is not the only factor that influences decisions on where to live and work, but it is one important factor for those who are particularly mobile. If you doubt this you might consider what has happened since President Hollande introduced a penal top rate in France, and whether this has helped the French economy or its public finances.
But the behavioural response is not just a matter of whether people leave the country or not: it is a question of the incentive to work (there are ‘income’ and ‘substitution’ effects), how many hours people facing high marginal tax rates choose to work, whether they choose to take their income in other forms that are not subject to such high rates etc. This is not a niche view. The HMRC figure of the projected yield (£500 million) suggests a large behavioural response, since without this you would expect a 5p rise to bring in several billion. The Labour party thinks it knows better than HMRC or the IFS and reckons it would bring £3 billion. They appear to be assuming essentially no behavioural response at all, which is rather implausible.
My point about the 58% was that you need to factor in National Insurance when looking at the marginal rate on earned income. There will always be legitimate political disagreement over the appropriate rate of tax on high incomes, but it should at least be based on accurate figures. We should recognise that, even as things stand, the state helps itself to 53p in every £ earned above £150,000 and then takes another cut of the post-tax income through 20% VAT.
Caracatus points out that the tax code is extremely long. It is byzantine in its complexity. And it is full of loopholes. These three features are directly related. The tax code trebled in length under Gordon Brown and has continued to grow (although the coalition hasn’t managed to match Brown’s rate of growth).
The left-leaning economist Nicky Kaldor once pointedly observed: “the existence of widespread tax avoidance is evidence that the system, not the taxpayer, is in need of reform”. He was spot-on.
The IFS took up this theme in their Mirrlees Review: “One of the central problems of dealing with tax avoidance in the UK has been the propensity of governments to tackle the symptom, by enacting ever more anti-avoidance provisions aimed at the particular avoidance scheme, rather than addressing the underlying cause – often the lack of clarity or consistency in the tax base.
“If activities were taxed similarly, there would be no (or, at least, much less) incentive for tacpayers to dress up one form of activity as another… The primary response should be to address the fundamental causes of avoidance rather than blindly resorting to anti-avoidance provisions, whether of a general or a specific nature. Simply demonising tax avoiders and exhorting them to behave better is a feeble strategem.”
Unfortunately politicians are temperamentally incapable of grasping that all their well-meaning schemes and fiddly tax preferences, breaks and exemptions are the root cause of the avoidance they then excoriate. It is high time they stopped the displacement activity and actually did something useful about it. Raising the top marginal rate while simultaneously making the tax system yet more complex – which will be the net effect of Labour’s various tax proposals – strikes me as a ludicrous strategy (if indeed it can be dignified with that word).
It is all about symbolism and grandstanding, not substance – about appearing to be doing something worthy, about the mentality that “something must be done, this is something, therefore it must be done” – rather than improving how the tax system actually works. Simplification should be the watchword. Instead I suspect we will get more hyper-activity, a lot of sound and fury signifying very little, and no attempt to reform the tax system in any strategic way.
@Alex Sabine your words on tax, as so much else, are wise ones.
Bolano 1st May ’15 – 8:56pm
“….But when it comes to the methodology… at one point it appears that the sample size is 453 or 456 (depending on which part of the report) zero-hour employees – a ridiculously small sample. More worryingly, “the survey is based on responses from more than 1,000 HR professionals. All respondents have HR responsibility within their organisation, which may or may not be their sole and primary function within their organisation. ”
And this is the source of all that nonsense about zero-hour employees loving their contracts? My God; it’s a complete joke survey.”
Bolano,
False conclusions based on a dodgy document are one of the curses of the Internet.
The old saying about a little knowledge being a dangerous thing has taken on a new lease of life now that people can make bold one sentence assertions and them give them a spurious plausibility by adding a link to a report that they hope nobody will be bothered to read.
JohnTilley 1st May ’15 – 12:52pm
I recommend a reading of the above post to anyone who has missed it.
As a party wedded to democracy, we need to be extremely vigilant of these forces.
Those who are unable to admit that concentrations of economic and political power are strongly interconnected and even more strongly illiberal do this party and society generally a huge disservice.
I would commend Caracatus and Alex Sabine’s observations regarding the over complexity of tax law to all Liberal Democrats.
Forget centre ground and equidistance, this is exactly the sort of ‘common ground’ issue we should be campaigning on as part of the rebuilding of our party.
@ STephen – “I would commend Caracatus and Alex Sabine’s observations regarding the over complexity of tax law to all Liberal Democrats. Forget centre ground and equidistance, this is exactly the sort of ‘common ground’ issue we should be campaigning on as part of the rebuilding of our party.”
110%
@bolano@ John Tilley – i really hope you are not in a job which requires you to pay attention to detail. There are two surveys -one of HR people and one of people on zero hours contracts. This is the bit you want
“The CIPD has commissioned a twice-yearly survey among UK employees (including sole traders) toidentify their opinions and attitudes towards working life today. YouGov conducted the latest survey for the
CIPD of 2,918 UK employees in September 2013. “
Simon McGrath…Why not try posting without personal asides?
@expats 2nd May ’15 – 9:43am
“Simon McGrath…Why not try posting without personal asides?”
Sadly, he has to, to draw attention away from the deficits of his dodgy dossier. There’s not really much point discussing it with him (“of more than 2,000 people in employment in the UK, 453 of whom are zerohours workers” oh dear, it’s that small sample again!).
@Alex Sabine 2nd May ’15 – 12:49am
“That is a straw man. I am not saying that Russian multi-millionaires will leave.”
Actually, it isn’t a straw man – because I didn’t say, or think, you did say that. The point I was introducing was that I think your admirably rigorous figures don’t, by nature of their economic framework, pay sufficient attention to a huge set of factors that aren’t economic, and that are probably more determining. London is a huge draw; Britain is a huge draw. The rich will pay a premium to be here – and in fact they already do to a degree.
@ Bolano
Sorry if I misunderstood your comment. I agree that the rich will pay a premium to live here, especially if the alternative is Russia and they don’t have cronyist connections with the Putin regime. However there are plenty of other non-Russians who live, work and pay taxes and invest here who do have palatable alternatives. But yes I agree there are non-economic factors involved: I mentioned one of them, our legal system, and there are a number of others. It is hard to quantify the relative significane of these, as HMRC and other independent bodies are aware. Their modelling of the likely yield represents an educated guess, if you like.
I don’t know about you, but I’m not confident enough to gainsay their estimates. I thought the central estimate was £500 million but I see from the IFS’s latest report that the latest HMRC figures suggest it could be as little as £100 million, though they added that this uncertain as the yield could be somewhat higher or alternatively a 50p top rate “might actually cost the Exchequer revenue”.
This compares with Labour’s target yield of £3.6 billion, which appears to assume zero behavioural response and which the IFS have called “highly implausible”. They added: “What is clear is that Labour cannot rely on significant additional revenues as a result of increasing the additional rate to 50p.”
@Alex Sabine 3rd May ’15 – 4:03am
I still think their ‘educated guess’ underplays the non-economic factors – and again while I think you’re right to identify the legal system (and one could easily and obviously add education to this), I think there’s an enormous cultural, social & geographical impact. My use of Russia was an extreme example; yet there are literally innumerable benefits to living in this country that tend to get over-looked in arguments of this sort.
Particularly of interest to me is the huge contradiction from those on the right, who seem utterly convinced that England is so wonderful in all aspects that foreigners will flock here from every corner of the world at the drop of a hat, yet so unappealing that at the merest sniff of a tax rise will scurry back towards those same distant corners.
It is a green and pleasant land – and none of that is accountable.