Categories
politicalbetting.com » Blog Archive » Footing the bill. The challenges for freespending politicians
politicalbetting.com » Blog Archive » Footing the bill. The challenges for freespending politicians
I like big buts and I cannot lie. If I am presented with a rosy apple, I look for the worm. If I’m covered with dark clouds, I look for the silver lining. I’m that guy who likes to say “I think you’ll find it’s a bit more complicated than that”. I’m unapologetic: it usually is more complicated than that.
0
This discussion has been closed.
Comments
It's entirely in stocks (Both home and abroad) right now.
If leaving on WTO terms really would lead to significant barriers to future trade, the BDI should be worried. The question is, has May the nous to recognise this weakness of the other side's position, and see that the Holy Roman Emperor has no clothes, regardless of all the claims so far to the contrary.
Day 2 requirement that you repay the tax incentives you received to save with interest
Day 3 a social levy of 10% of the value of the remaining pot to contribute to the pensions of those less fortunate that you
Am opinion poll that included people who worked in London,.but commuted in from outside as well as London residents, would look very different.
"If property taxes are to be considered, the properties in ten London boroughs are worth more than all the properties in Scotland, Wales and Northern Ireland combined."
The owners do not even reside in the UK, in many cases.
Taxes in London could be targeted on the owners of wealthy property easily enough.
Of course, we'll have to put with lots of bleating from luvvies like Joan Bakewell that she is not rich just because she owns a 5 million pound property in Hampstead. But, I think John McDonnell will know how to deal with her sort.
I think owners of wealthy property and second home owners will be one of the early targets
Maintaining demand and growth in the face of such a scenario is going to be incredibly difficult and the pressure on governments to do some of our "saving" for us by running surpluses will be severe. The outcome is that we will face a series of increasingly difficult decisions about spending priorities and, I suspect, more intergenerational tension. The consequences of Brown's incompetence aggravating what was always going to be a day of reckoning for an economy thriving on easy credit and trade deficits will be felt for decades yet.
Is it hopeless? Not necessarily but we really need to start finding some genies and magic lamps. A massive increase in productivity on the back of AI or a new and ultra cheap form of fuel or spectacular breakthroughs in old age medicine reducing dependency, it really is a hail Mary pass time.
To quote Mr Meeks, it's a bit more complicated than that.
Imagine for a second that Germany exported oil - and only oil - to the UK, while the UK exported a mix of products. In the event that a physical barrier to trade between the UK and Germany was implemented (say a wall), then who would be worse off? Well, us. Because oil is fundamentally fungible: if you can't sell it to the UK, well, someone else will buy it.
Now, let's use a real world example. The UK's biggest export product is cars. But we have only a limited domestic automotive supply chain. We don't make airbags, tyres, automotive semis, etc.
If that wall was erected, it would affect our car industry more than their's. They would need to find alternative markets for those Mercedes, but demand in - say - Russia is price elastic. They'd be poorer, sure, because they'd need to sell at a slightly lower price to sell incremental units, but it's not like there's no demand for their cars. In the incredibly implausible wall scenario, we would need to find new suppliers for all the bits that make up a car.
Fixating on bilateral trade balances is fundamentally misleading. We would be at least as stuffed, and probably rather more stuffed, by a No Deal scenario.
Nonetheless there is a certain economic gradient, and not a little irony in Tory voting coastal towns voting to pick the pockets of industrious Labour voting workers.
Fuck me, pensions nationalisation sounds absolutely petrifying. That trillion will be gone on extra spending before the term is out. And then what?
And the cooling effect of that suction on equity markets. Well - it'll help with other nationalisation I suppose.
Tacking left was all well and good but, comrades, we were only meant to blow the bloody doors off.
The public instinctively thinks defence is safe with the Cons and the NHS is safe with Lab. So each has free rein to cut as much as they want.
You are less optimistic than me, but I think a lot has moved here and is till moving here, despite brexit.
Identity politics is killing off healthy debate
Universities are on the front line in a culture war that stifles disagreement and is threatening liberal democracy"
https://www.thetimes.co.uk/edition/comment/identity-politics-is-killing-off-healthy-debate-82kgkqr86
It may be a tougher sell than other plans. Though as is noted, it would be a problem for another government another day.
Governments can never forget those who they need to finance the debt. My pension would be moved offshore rather than the government requisition it.
Hence when BT was nationalised it took three months or more to have a telephone installed.
British Airways had to buy planes from where the government directed it rather than the best planes for its customers and routes.
There was a lack of investment in old utility infrastructure like electricity, water and gas.
They weren't popular when they were nationalised.
Badly run, particularly lack of investment because (understandable) low priority for government funds.
What would happen to those who are about to take or already taking their pension? Presumably the government would have to honour those promises?
The problem is the iron grip of the Treasury and the inclusion of Local Authority debt in the National debt. The Treasury was happy enough to go off balance sheet with PFI and Student loans but won't allow Local Authorities to borrow on their own assets.
Incidentally debt at 85% of GDP is not a lot. The interest is well covered by taxation. Public companies carry far more as a proportion eg GSK has debt of £24b serviced by operating profit of £4.4b. The average UK mortgage is £123K. The average UK income is £27K.
People say debt is 85% of GDP and purse their lips. Without context it is meaningless.
EDIT: There is no suggestion anywhere that the UK government would "nationalise" pensions (except by Alastair) so don't get your knickers in a twist.
"Is the scheme funded or unfunded?
Unfunded. It is paid for out of general taxation, not an underlying investment fund."
However, it seems there are some money purchase options for staff.
Civil servants includes governments departments but also other public bodies.
https://www.nytimes.com/interactive/2018/upshot/elections-poll-txsen-2.html
The others I know less about. But I think it's very hard to have publicly owned companies in competitive markets.
This is probably driven by both a desire to save money (the MoD will always step over a pound to pick up a penny) and lack of pilots. The privatised MFTS training system has completely fallen apart with a recent course failing to produce a single pilot of the requisite standard for the Typhoon OCU. So now as we are paying to send pilots to the European JJPT in Texas.
You can't trust the tories on defence.
There are some funded public sector schemes where the assets are ring fenced and invested - notably the local government staff scheme - so there is an invested pot of cash from which pensions are paid out.
Transport for London operates a private sector funded scheme which is outside government control - and they still have a final salary scheme rather than the standard career average, low contributions, get pension upratings by RPI not CPI like the rest of the public and private sector and staff can retire without deductions at 60 rather than state pension age (and as early as 50 with deductions). And in order to change the scheme members have to vote to approve it - the Mayor or TfL management cannot alter the terms. Its funded by public sector money - but its a private scheme. Did the tube unions negotiate a mega deal or what!
It was only possible to establish MFTS by asset stripping the RAF and RN of QFIs and moving them to the private sector. Now that seam of experienced personnel has been exhausted it's going to be impossible to sustain.
https://www.nytimes.com/interactive/2018/upshot/elections-poll-txsen-2.html
https://www.nytimes.com/interactive/2018/upshot/elections-poll-nvsen-2.html
https://www.nytimes.com/interactive/2018/upshot/elections-polls.html
For pensions, I think limiting/reducing higher rate relief in some way is likely.
Something like 40bn/year of which almost half goes to higher earners. In a nice case of unintended consequences, this would actually increase under Corbynite income tax rises for the wealthy.
Richard Murphy, previously very close to Corbyn, has previously questioned whether the relief is needed at all.
https://citywire.co.uk/money/nationalise-pensions-says-labour-economist/a1157896
https://www.washingtonpost.com/world/saudis-lay-in-wait-for-jamal-khashoggi-and-left-turkey-quickly-sources-say/2018/10/09/0e283e2e-cbc5-11e8-ad0a-0e01efba3cc1_story.html?utm_term=.994cdd15a6ec
https://www.theguardian.com/commentisfree/2018/oct/10/theresa-may-dogs-dinner-brexit-plan-constituents-voted-leave
A few examples:
Working tax credits - companies need to pay a realistic wage and not expect the government to subsidise them
Housing benefits have inflated rents and house prices. The government should use its negotiating power much more aggressively
Needless complexity such as winter fuel allowances and free bus passes. If OAPs need more money then increase the state pension. Don’t eff around with complex little schemes designed to buy votes
Narrowing tax base - tech companies need to understand they have to pay their way.*. Similarly I remain unconvinced that lifting the personal allowance as high as they have was the right thing
It may be politically impossible but someone needs to upend the government budget, figure out what needs to be done and how to deliver it effectively and at an affordable price. This may involve taxes going up. The current strategy of just pouring more money into a leaky bucket doesn’t have much appeal
* I was told the other night that tech companies are notoriously tight fisted and have no understanding of social responsibility. One company, who shall remain nameless but let’s call them Giggle for simplicity, sat in front of Cameron and said “they couldn’t afford” to donate £250,000 to a programme to protect children from online grooming by paediphiles.
Mealy mouthed self justificatory bullshit
I think that’s splitting hairs. London is Left-leaning and purports to want higher taxation and higher spending. I don’t see how the Conservatives are coherently punished by Londoners for doing so when Labour would do so to a far greater degree, and they’re already voting Labour anyway.
The economy as it's currentlt structured isn't sustainable. When you strip away the headline figures fpr NHS spending increases you see real world massive front line cuts. At the same time you find a hugely complex and expensive marketisation project syphoning cash into contract management. And the same with education where total spending hoes up yet front line cash collapses at almost the same rate as the media report scandals in academy chains.
We need a return to efficiency as opposed to the Tories scalping public money for their mates via marketisation. I honestly don't care much about ownership - Blair's "whatever works" approach was right. So we could save a literal fortune in spending by scrapping CCGs and Academies, give schools and medical practitioners the practical level of autonomy they need without making Doctors stop being doctors and instead have them running a contracts management company.
And here's a radical idea. Lets have the government borrow money, invest it into things that pay a return on investment such as infrastructire, repay the loan and reinvest the profits. It used to be called capitalism until the Tories scrapped it and replaced it with bankism. Borrowing is not subsidy when its invested. Borrowing under the Tories to burn on badly funded (but lucrative to the right people) public services? Thats really stupid...
All suggestions for what I can do to protect and offshore it gratefully received :-)
The Tories were good on defence in the early-mid 80s, but haven’t been so since. They gave up the ghost from 1957-1965 too but some of that needed to be done. It was too high as a % of GDP.
Attlee did well from c.1950-1951 too. Since the early 90s, all Government’s have been poor. The best SDR was in 1998 but it was never funded properly.
Our defences are pared to the bone in a world of growing threats. We have ships holed up in Portsmouth that can’t sail for want of money or sailors, we can barely escort our carriers, our airspace is routinely buzzed by Russian forces as are our sovereign waters intruded into. Our army is in a dire state and barely more than a militia. We have no missile defence capability.
We need sustainable and targeted increases in defence spending for at least the next decade, targeted at capability and not to fit the (forever tighter) annual pursestrings.
It is true that they were less effective than GM schools, and less disastrous than academy chains have been, but it was Labour who was scalping the public sector here (especially when their grotesque PFI - again, admittedly, originally a Tory idea - is factored in).
As for borrowing to invest, fine, but again it was Labour that borrowed from 2003 to 2007 to finance current account spending because with a majority of 167 they were obviously far too scared of losing the next election to raise taxes.
Moreover, I and I am sure most people would be rather less concerned about McDonnell's figures if (a) they weren't patently fraudulent and (b) we were sure the money wouldn't be channelled to their fat cat mates in the increasingly irrelevant unions.
Changing corporate structures and the way in which shares are held could well achieve plenty. Businesses that look at the long-term - rather than focusing on delivering dividends that get top management their big paydays - would be a huge and beneficial development. Again, though, it’s hard to see it happening.
We could even give it a new name - the Googlewhack.
The perception of legendarily poor defence procurement doesn't help. Probably the only thing with a comparable perception is inflated, usually poorly working, IT systems.
Looks like Cruz is going to win fairly comfortably though.
In the longer term, I agree with David that we’re basically looking to solve our demographic challenges with AI and new technology and medicines. We could perhaps have a more flexibly attitude to lifelong education and retirement too.
Mass immigration of bulk low-skilled labour is never going to be a politically acceptable answer. Only targeted high skills that commands public support.
It’s for politicians to help shape public opinion as well as respond to it.
Let’s take it as read that your suggestion that we let doctors be doctors might not quite cut it.
I’m yet to see the cabinet respond, however.
Sounds like a bloody terrible idea. Will probably be Labour policy before too long. Can't let the filthy kulaks have *two* cows. What could justify such bourgeois greed?