91Èȱ¬

Tax, spend, tax spend....

The current government, and its supporting functions, are not only making the UK an increasingly unpopular place to live, it is now fast becoming a place that discourages international investment.

Take the disaster that is Donald Trump's application to build a £1billion golf and leisure investment in Aberdeen. The application was rejected by a city council planning committee, even though it had the support of 80% of councillors and 90%+ support from the community.

The Scottish First Minister and the assembly intervened and took the decision back upon themselves (in Jan). Since then, there has been an investigation on who talked to who about the plan, who drove the decision to take the plan higher in the chain, why Donald Trump didn't appeal the initial application, etc etc etc. A decision that should have been made in December last year, has been delayed until at least July, and probably beyond by our procrastinating approach to dealing with international investment...
If we couple this type of bureaucracy with heightened tax regulation and costs, we may as well stick a great big 'out of order' sign in the middle of the country.

I am all for having a level playing field for tax, both corporate and individual, but what we must remember is that other governments just welcome the boost that job creation and minimal tax gives to their economies. We are in danger of pricing ourselves out of the market.

Tax cuts, across the board (at the expense of the 1.5million middle management government created positions that have materialised within the the last decade), is the way forward, for all industries and individuals, with a few minor exceptions:-

oil industry (record profits every week while the consumer pays through the nose, is there no scope for slicing into these £billions and releasing the pressure on the rest of us????)

supermarkets (am I the only person that sees the current rise in the cost of food, and directly relate it to the increasing profits being announced by supermarkets????)

Unfortunately ,( and the recent local election results will not teach the lesson to the present incumbants of government -who are out of touch with the general public and unlistening),in a globalised world success and wealth creation for the benefit of all are generated by low taxation and ever increasing enterprise. But , after 11 years of Gordon Brown's stewardship all the risk averse mandarins of Whitehall departments are set in their ways and plagued with the need to ever expand their inefficient empires endlessly.The result- more and more taxation , more and more dead weight bureacracy and mountains of forms.Less and less efficency.Less and less motivation.Less and less risk taking.Less and less enterprise -untill eventually everyone and everything has shut up shop. What we need now in the UK is a revolution of less tax and more reward for both enterprise and the risk takers. Other countries have already learnt this need-Eastern Europe, Ireland , China , India. Others are always slow to learn , ( Britain , Germany ),and others-France , trying to learn.

Now, will Robert Peston investigate possible collusion between Journalists running scare stories and spreadbetting cartels selling those same companies Short on the same day the stories run?

This has damaged UK Pension Funds (and Annuities are bought with funds based on the Stock markets performance).

A criminal investigation should be called for.

Write to your MP !

Corporations hold all the cards. They are ruthless psychotic entities which will stop at nothing to increase profits.

The only thing governments can do is give them their tax cuts and take it from the workers, sorry, I mean consumers.

we're screwed

globalisation spreads the wealth very thinly.

Paying tax relative to your income is a public duty if we want to improve our society. If large companies don't feel a sense of duty and instead wish to shelter in tax havens then having crossborder unification of tax levels and closing down the havens is the way ahead. Greed is not admirable, money-grabbing is not laudable, doing your bit is. The huge majority of ordinary tax payers have their deductions made and do not bother to pursue tax avoidance. It is only natural that we should resent the fact that others are not being as fair-minded.

I think this is Labour finally getting back to its socialist roots, along with the non-dom tax. Another fundamentally short-sighted and imprudent move. Old Labour policies were what made the party unelectable in the 80s and early 90s, and I don't understand why Mr. Brown thinks they'll work now.

When will people learn that dogs bark, ducks quack, Labour taxes!

The British economy has become totally dependent on the City and tis is yet another example of the (sorry, in my opinion) state of affairs. (Chorus from the manufacturing lament!)

We do not have the stability of Euro membership to protect us now because we had to stay out to protect the city. We simply had to be able to competitively devalue our currency to reduce wages to compete in the World!

Changing things will be painful, but necessary - let the multinationals leave now in a panic before we (probably under the next Tory government!) reintroduce exchange controls!

Our people need jobs, not just a very few multi-millionaires, the masses need jobs and the multinationals have been singularly poor at producing work for the masses. Let them go.

well at least this report makes a change from the overdone (according to BoE) bank doom you have been banging on about for seemingly ever.

Thank goodness! The sun has also started to shine. :)

John From Hendon, this dependancy on the city is nothing new. It must be borne in mind that what made Britain great was piracy and the provision of services. The wealth of England and latterly Britain came from "Privateeering" dubloons from the Spanish, the British Empire grew rich from acting as an intermediary between the various colonies, and it's this skill in negotiation that has been key in making London the world financial capital.

Britain was at the forefront of the industrial revolution, of the financial revolution and the information revolution. We must strive to ensure that we are at the forefront of whichever revolution is next and the best way to do that is ensure the UK remains the best country in the world to do business.

The loss of manufacturing industry is sad, but when it becomes impossible to support a good standard of living on the income from manufactured goods, there is no point manufacturing them any more.

No: 8 ''stability of the Euro''? Thats a laugh! The 'euro area' has had mass unemployment since the euro came into being.

''Our people need jobs'' you say; well The Euro has shown quite well is has destroyed jobs in Germany, France, Italy, Spain etc., all who have had double digit or close to that unemployment for many years.

''Let the multinationals leave'' you say - and take their jobs with them perhaps?

Me thinks you need to re-think the whole of that posting. Sounds like it was straight from The Labour Party manifesto from the 1980's.

to No 10. and 11(towards the end)

The loss of manufacturing industry is not only sad in abstract it is one of the reasons why we had big Banks in the first place. Our manufacturing industry declines substantially when the pound reached 2:40 of more to the US dollar in the reign of Mrs Thatcher. I watched it become impossible to afford to make almost anything in the UK were were simply uncompetitive economically.

Manufacture and making things has since the 1790's been the main reason why we have such a high population density. We still have the talent, but economically the exchange rate, now against the yuan make it extremely difficult for us to find things fro our talented work force to do. The saving grace as I see it is the high rate of inflation in China, a few years (a decade perhaps) at 10% per annum in China will start to redress the balance and we may have things we can do here again.

The problem has been that the financial sector has been allowed to dominate to such an extent that the exchange rate is acting against us making anything.

I cannot in all conscious throw our talented industrious workforce to the dogs in the way that you seem so prepared to do. I hope I have misinterpreted your last paragraph.

Turing to the Euro (and No 11) So you find it humorous that the Euro zone still has manufacturing jobs and that the pound is dropping against the Euro making our holidays more expensive.

The run on the pound would have been far smaller and our financial plight far less precarious today, in my view had we been withing an economic zone with a home market of 600 million or more.

Today the pound is liked to the dollar in the mind of the market and as it is falling for very good economic reasons, again related to the rise of China so it drags the pound down and we import inflation.

The point you make about the destruction of jobs caused by the Euro is well made but also consider that we had no jobs left to destroy. All we can do is juggle money, and very poorly and incompetently, and even then the good working folk of the UK have to bail out of so called engine of growth the Financial Services sector.

Our balance of trade is dire and we live not on the fruits of our labour but on our ....... services sector. We cannot expect to survive as a callcentre economy!

I simply will not accept that it is wise to allow a few international capitalist concerns to deprive us of our democratic right to decide of our own free will to look after our poor.

I am not a liberation theologists but in extremis we must stand and be counted or we are nothing. I also believe that standing together is better than being alone - Euroland is our only ally - to the USA we are a disposable napkin in which it blows its nose and over which we have no say at all - we are a poodle. I do not like being a poodle. I would prefer to be part of the (euro) pack, rather that being alone in the wilderness.

(I have not been party to, or responsible for any party manifesto, Labour or otherwise, in the 1980's, earlier or later. - see last para of 11.)

It is good that you are coming to realise that you do not view the government, or report on them dispassionatly.

As these scales fall from your eyes, you may come to genuinley recognise that the 91Èȱ¬ is instituationally bias.

The bias is so ingrained at the 91Èȱ¬ that they don't even recognise it (usually) - a few 'road to damascus' moments like this among more of the senior bods at the 91Èȱ¬ and maybe we (the licence paying public) will get an independant service.

However, I must confess to suspecting that these 'experiences' will be just enough to endear the 91Èȱ¬ to any change of government, and then an appropriate (appropriate to the job retention of senior staff) bias will be re-established.

All of us who earn a living - either by salary or by charging for our labour have to pay income tax. The former based on the figures provided by the employers - the latter ( in arrears ) shown by receipts . This is not to be confused with VAT .
So - to do away with this obscene tax avoidance by the big boys - why shouldn't every transaction have its own version of PAYE deducted at the till ( as deducted from wages etc.) - or any hand over of money of any sort - based on last years earnings ( not profits) after all wage earners have their income taxed before any possible profit? ( surplus) is taken into consideration.

John_from_Hendon, strange as it may seem, there are plenty of jobs in UK. It is just that there are many who would rather sit on their lard-arses watching their 42" TVs and collecting their dole and whinge about "foreigners taking all our jobs" while Immigrants do all the actual working !!

Maybe we should revive Transportation and send them all off to Aussieland !! Instant savings of billions, not just of the dole but also of the bloated govt. dept. that feeds off them !!

Also, FYI, we *create* inflation by excessive demands for unjustified pay rises. The Chinese export *deflation* with their cheap goods !! If the same goods are made here and cost 10 times those of the Chinese, you will soon see rampant inflation in the order of the early '70s (15% or more) as everyone scrambles to keep up with the ever rising prices. The £ will be worth nothing and we'll need £million notes, like the Zimbabweans do now, just to buy a loaf of bread !!

The empire is no more and sending out gunboats to force others to buy our (expensive) goods only gets them sunk by the first man with an RPG in his hand !!

And no one is depriving you of your right to look after the poor ! Just not with other people's money, thank you very much !! You are always welcome to "sell all you have and give to the poor" !!

Lastly, it's the Europeans that like poodles !! The Yanks prefer Chihuahuas !! So you will end up a poodle after all !! Yap !! Yap !!

to 16

I shall ignore your gratuitous abuse and turn upon so of the points that you make.

You say quite rightly that Chinese manufactured goods arrive here at a 'price' that is very much less than we could possibly manufacture them for. Your use of the term 'cost' implies that there is some god given fixed equivalence of currencies through which the exchange of goods has been made.

I do not believe that it is at all sensible to say that the prevailing exchange rate of the yuan to the pound (about 15) is justified.

I have long argued that iit is better to compare currency values on the basis of equally efficient labour hour values. What I mean by this is to consider a 'pair of jeans', for example manufactured in the UK £60 manufactured in China £4. This would imply a rough parity of the yuan and the pound.

If and when this situation occurs we in the UK will be able to compete. My point about the Chineses economy is that their wage rate inflation and general inflation is considerably higher than ours by a multiple and in the end if this situation continues thing may correct.

As to Europe and the Euro:

I find it inexplicable that it is sensible to support a situation where our stability (of the pound) is put at risk by a former colony who cares little for us except in times of war. I much prefer the situation of living with our neighbours in a community in which we have a say, unlike the USA.

Multinationals have no choice, growth markets are overseas, to be competative they need costs to be in the same cost base as their sales.

If they do not other companies will develop in india or china, and british companies will not be able to compete.

#5 - That would be all nice and well if we could trust government to improve our society. As it is, our government is a warmongering whore with a number of 'masters'. We will only have a moral obligation (and that is what I presume you meant) to pay tax when the government itself is a moral authority, or has bound itself inextricably to a moral authority. Given that this will not (cannot?) happen, there cannot be a moral obligation to pay tax.

However, there is a legal obligation to pay the tax you owe. What tax planning does is to reduce the tax you owe by altering the transaction you undertake. Take, for instance, a journey from the M11 in North East London to the M3 in South West London. There are myriad ways you could complete this journey.

If you went straight through the centre of London, you would pay the congestion charge of £8.

If you went round the south or North circular, you could be charged to the Low Emission Zone charge.

If you went round the south side of the M25, you would be charged to Dartford Crossing toll.

If you went round the north side of the M25, there are no road tolls, but there are speed cameras.

Choosing to go round the north side of the M25 is tax avoidance - choosing to accomplish your goals in a particular way to attract a different tax analysis. How can this be wrong, either legally or morally? That would be like saying that everyone should be charged £8 for every journey they make, and pay maximum road tax, because they could have accomplished their journey by driving through central london, and driving a large polluting vehicle.

That said, going round the north side of the M25, speeding, and getting caught by the speed cameras, and then not paying the charge IS wrong. The actions you have chosen have resulted in a charge, and you have a legal obligation and, under most cultures, a moral obligation to pay up. This is akin to tax evasion.

The problem of big multinational companies threatening to take their businesses overseas to take advantage of lower taxes elsewhere is a problem for any UK government. So that raises a couple of basic points, why are these businesses based here and on balance how good are they for UK Plc.

I suppose the answer to the first part of the question is that some cases these businesses were historically British owned and for others the City of London is a recognised world trading and finacial centre for carrying out such business.

The second part is on the face of it quite simple insofar as the city does make a huge contribution to the UK economy and we should encourage as many businesses as possible to remain here. However surely it is not unreasonable to expect these businesses and the people who run them to make a fairer contribution towards maintaining the benefits they enjoy from being based here. Although not to the same extent as if they were domiciled here.

To counter this threat the big problem confronting any UK government is how can we become an Irish-style low-corporate tax economy without moving away from the principle of a fairer-for-all society. In the past the Conservatives pandered to the City's way of thinking (under Maggie) and we ended up with millions of ordinary working class people on the dole at time when North Sea oil was filling up the Treasury's coffers. Labour on the other hand have chosen to squander vast sums of treasury money keeping people employed, in the public sector.

What the main thrust of this discussion fails to get is that fundamentally what is driving the MNCs out is not the taxation of UK profits, but the taxation of non-UK profits.

Suppose a UK company buys a US company. In the straightforward 'UK company buys US company' model, the UK tax system is very favourable - US profits are taxed at 35%+, the dividends are subject to a 5% withholding tax, and the dividends are taxed at 30% in the UK, with credit for all the underlying tax. Therefore, no extra tax is payable in the UK.

Lets complicate the situation a bit. Suppose the US company isn't taxpaying for some reason, such as losses it has made in the past being offset against current profits. Any dividends paid up (to the extent that is allowable) will now not have any tax paid attributable to them. The UK will still tax at 30%, but now the tax has to be paid.

Lets complicate a bit more. Suppose the reason you US company is not paying tax is because of some tax efficient financing, where the income isn't even received in the UK. The UK will still want to tax that income as if it was received in the UK.

Then add in the fact that if your company was headquartered in Ireland, Switzerland, Luxembourg or the Netherlands (and other simliar places), they wouldn't care if you profit stripped another country, and wouldn't be trying to grab what was never rightfully theirs...

Would you stay in the country, or would you move?