Who is right about the British economy?

First topic message reminder :

As Lloyd Grossman would say "lets look at the evidence"

26th January 2010 - this was the date that the UK recession was finaly over, our growth returned back into the black again at 0.1% later revised upwards to 0.4%.

This was also a news story back in January 2010
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The begining of 2010 has seen some improvement in the uk housing market. People's confidence seems to have returned to pre uk recession levels.(Zoopla.co.uk)

In the second quarter of 2010 the economy of the United Kingdom was growing at 1.2%, the fastest rate of growth for nine years.

By July the new coalition government had been in power for a couple of months, the chancellor gave his first budget and the nation was put on alert for the waves of spending cuts and redundancies which were to follow soon.

Towards the end of 2010 UK growth began to go backwards again, and actualy went back into negative growth in the 4th quarter, perilously close to recession again.

So here we are in October 2011, 19 months after this government entered office and our growth figures are lower than what they were when they came to office in May 2010.

But not only is growth stagnant, unemployment is higher, inflation is higher, confidence is lower, no sign of a recovery in the housing market, and the promise that the private sector can take up the slack of the thousands made redundant hasent happened.

As we approach the 18 month mark, is time begining to run out for David Cameron and George Osborne. ?

Mel wrote:What I fail to understand OW is those who have no living kin, have millions and yet refuse to spend. After all they will not be able to take it with them when they pass on. So why not spend it on themselves or leave it to charity? Better still leave it to me to spread among my friends and family.
You included buddy.

Hello Mel
You know I do find this whole issue of Tories are pro rich and Labour are pro poor aguement rather sterile. as I am not Anti Rich people at all. However, what I am Anti is Rich people who believe its there duty to get out of paying there tax or supporting UK industry or even believe its there god given right to some how rule over everyone else just due to there personal wealth. so if a rich person pays his or her tax and looks after his or her workforce who am i to complain. the fact is some folks on here wish to turn this whole issue into who made the most people rich. well what does this matter if these people paying there way? should i care if they have one million pounds in the bank or not. just because i am a Labour supporter? No what I really care about the 70% of the people within the UK not some 30% of the Rich people. so Tony Blair had more rich people kicking around. well bully for Tony. did this stop him building new hospitals then? I think not. but if the Rich 30% really believe they would be better off in some other country then drop me a line and I will help them pack up and go.

You know many poor people would just love to be rich themselves and who can blame them. do I fill envy for the Rich 30%? No... I do not even think about them. as on paper i could be classed a Rich person. but does this change how i feel about poor people or what they need to live a good and fair life. No...its for this reason I agree with you Mel. as what is the point of have millions and yet refuse to spend? or your only real goal life is to worm your way out of paying you Tax.
so wether Tony had more rich people or not is not the real issue is it Mel. the real issue is what you do with it that matters. well it is for me anyway.

Nice post Stox, thanks.

Mel wrote:Nice post Stox, thanks.

you're most welcome my very good friend.

Hi bobby, surely even you can't believe that any government gave us the Olympics. Remember the overspending that resulted from the original budget (3billion to 13billion) are you really saying that's the fault of government at the time?

The final figures aren't published yet, so you're being surprisingly brave tlttf.

Who is right about the British economy?

That's a curious question, because in a sense the answer doesn't matter.
If things get better everybody benefits, and if they don't then playing the blame game won't improve anything.

The unanswered question is about the WORLD economy, which is drifting beyond the ability of any National Government to control. "Old Money" aristos have given way to the thrusting entrepreneurs, oligarchs and internet whizz-kids who, together with the Hedge Fund Managers now have an income measured in billions.

It doesn't matter to them where they reside, they are in constant touch with each other making money without involving ordinary people. History tells us about Sultans and Moguls, Kings and Princes who were able to accumulate riches beyond avarice, at the expense of their "subjects". Now we have willingly become subjects of people who know which of our buttons to press. Because we aspire to emulate the top 1%.

[/i]

[i]The Left have been saying it for two whole years, we have no policy for growth. Now Lord Heseltine of Thenford, who wrote the review, says that “the message I keep hearing is that the UK does not have a strategy for growth and wealth creation”

The 228-page report, entitled No Stone Unturned, makes 89 recommendations and from its title it Sound very much in keeping with Heseltines own personal ego but does show quite clearly that Gideon and his banal leader Cameron have in fact been running the UK economy with out any meaningful growth policy for the last two years.

However, while I welcome some of his report there are areas that would worry me a great deal. As it does not need a lecturer in economics or even your local bar maid to tell you that effects of economic growth are felt on both sides of government accounts. Expenditure is lower than it would have been because more are in work and the benefits bill falls. Revenues are higher because incomes, profits and consumption all raise the level of tax revenues.

I have said this before that the very moderate increase in government investment from the 2009 Budget under Labour was the catalyst for a modest economic recovery. Because of the increase in government spending (including allowing welfare payments to rise automatically as unemployment and poverty increased) in fact the Treasury’s own data has estimate is that every £1 increase in economic activity will lead to 50p increase in government revenues.

It is widely accepted that government policies have led to economic stagnation. Yet and has seen the deficit rise in real terms. In fact this was supported by the latest public sector borrowing data shows that the UK budget deficit is widening once more. Indeed despite a series of accounting adjustments which obscure the true picture, it is clear that the underlying trend is also towards rising, not falling deficits.
The Office for National Statistics reports that the June public sector borrowing total was £14.4 billion, £500 million higher than in the corresponding month in 2011. The British economy has grown by just 0.5% in the two years since the Coalition came to office. Even taking the last GDP quarter into account with its Olympic bubble Britain on a par with countries such as Iceland. Britain has incredible shrinking economy when measured in international currency terms.

So lets look at his proposals

Heseltine’s proposals involve a slimming down of Whitehall functions. He believes that all money earmarked for economic growth should be collected together, with local partnerships able to bid for funding. About £9?billion of European funding for deprived areas should also be handed straight to localities to spend on kick-starting the economy. Heseltine also firmly defends the need for state intervention to help business, rejecting the argument advanced by some Conservatives that companies need to be left free of interference. Heseltine also says that regulation, particularly from Europe, is not a major problem for British business.

All the above I could agree with, However, I do have concerns that his scheme would introduce layers of bureaucracy and that the real problem is not found in Whitehall but is to be found in the banking system that has failed to help UK manufacturing sector. Heseltine has also called for more power devolved to the regions and that Local Enterprise Partnerships should be strengthened and given billions of pounds. I myself have little real belief in the influence Enterprise Partnerships to efficiently deliver economic growth to key sectors within the economy. As past history has shown these bodies to be full of enormous bureaucracy while delivering very little real growth. In fact this was tried in the 1980s in Liverpool and was shown to be unsuccessful.

So What are your views?

It's the 1985 Show !!!!!!!!!!!!!!!!

oftenwrong wrote:It's the 1985 Show !!!!!!!!!!!!!!!!

you know that was just what I was thinking when reading this. do the Tory party have anything in the draw other than 1980s retreads of old failed economic ideas to offer us? The only people I can find who think this is a good idea is people reporting it in the media and the odd sycophantic extreme right winger who spends there whole time grovelling on about how super Maggot was. still grovelling over the past seems symptomatic of a government with nothing new to offer the public when it comes to economic policy OW.



Remember this folks?

Prime Minister Margaret Thatcher appointed Heseltine to the cabinet as Secretary of State for the Environment in 1979 after her election victory that year. He was a key figure in the sale of council houses and was sent in as a troubleshooter to deal with the explosion of violence in Britain's inner cities in the aftermath of the Brixton and Toxteth riots during the early 1980s. As Environment Secretary in 1981 he opened Britain's first Enterprise Zone at Corby in Northamptonshire. Heseltine was responsible for developing the policies that led to five bi-annual National Garden Festivals starting in 1984. He established Development Corporations that were directly appointed by the minister and overrode local authority planning controls

Development Corporations are bodies set up in England and Wales by the UK government charged with the urban development of an area, outside the usual system of Town and Country Planning in the United Kingdom. Members are appointed by central government and hence they are considered QUANGOs.

Now he calls the Enterprise Partnerships to efficiently deliver economic growth in 2012, or to me they are just QUANGOs. still

bobby wrote:The one thing Heseltine has done is to prove that Herr Cameron and his boy Gideon dont have the full following or backing of their party, any crack however small can become a fissure.

I could not agree more with you Bobby. but its only taken the two and a bit years to figure this out? this is after they spent two years telling Ed Balls he was wrong about growth policy. now who was wrong then?

that is it....I know we can have a National Garden Festivals again as part of the cultural regeneration of large areas of derelict land in Britain's industrial districts during the 1980s and early 1990s that they killed off. This could be the Tories answer to having no growth policy then.... we can all go gardening and try to grow it instead while holding a cultural regeneration of large areas of derelict land in Britain's industrial districts killed off in 2012 by the very same Tory party.

or ask if we could hold the Olympic's again in December while we all do our gardening? gee they are so clever these Tories. if only we had thought of asking Heseltine for his help.



In the UK, a government-commissioned evaluation in 1987 found that from 1981 to 1986 the enterprise zones had cost nearly £300 million, but 2,800 firms were established in them, employing over 63,000 people. Taking local transfers into account (a notable example being the Merry Hill Shopping Centre in the West Midlands, which largely consisted of stores which had relocated from the nearby town of Dudley), only 13,000 net jobs had been created; a possible reason why the government began to prefer urban development corporations as its main vehicle for urban renewal. Well this should get our economy going as 13,000 jobs at a cost of just £300 million is quite cheap for a Tory Economic cock up.

O bye the way...the Garden Festivals cost just from £25-million to £70 million each. so I guess Gideon will not be going for many of these then.

".... we have willingly become subjects of people who know which of our buttons to press. Because we aspire to emulate the top 1%. "

Nobody wants to argue the accuracy of that opinion? We're in more trouble than I thought.

we have willingly become subjects of people who know which of our buttons to press. Because we aspire to emulate the top 1%. "

Nobody wants to argue the accuracy of that opinion? We're in more trouble than I thought..

The world would be in bigger trouble without aspiration and emulation.

Sufffocation, at the very least. Like those interminable discussions about personal belief. Which is, by definition, personal to the commentator.

The world would be in bigger trouble without aspiration and emulation..
Tosh


Posts: 961
Join date: 2012-08-15

But wouldn't it be great if everyone aspired to create a fair society and emulated those who act to bring it about (Elizabeth Fry e.g)

But you couldn't fit pictures of everyone onto a Five Pound Note.

So which is the right way to tax people?


Britain’s millionaire exodus is a wake-up call to Barack Obama’s high tax America

By Nile Gardiner World Last updated: November 28th, 2012

Millionaires and their wealth are not just fleeing Hollande’s France, with its new 90 percent top rate tax. They’ve also been escaping Britain’s 50 percent tax too. As The Telegraph’s Robert Winnett reported earlier today, “almost two-thirds of the country’s million-pound earners disappeared from Britain after the introduction of the 50p top rate of tax.”

In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs. This number fell to just 6,000 after Gordon Brown introduced the new 50p top rate of income tax shortly before the last general election.

Since George Osborne announced a reduction of the top rate to 45 percent in his April budget “the number of people declaring annual incomes of more than £1 million has risen to 10,000.” This is a figure still significantly below earlier levels, and it will be a huge challenge for Britain to recover its lost wealth. As Conservative MP Harriet Baldwin puts it, “Labour’s ideological tax hike led to a tax cull of millionaires,” costing the UK around £7 billion in lost tax revenue.

http://blogs.telegraph.co.uk/news/nilegardiner/100191962/

In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs.

Interesting term of phrase.......'declared an annual income'.....surely all those, like Jimmy Carr stopped 'declaring an annual income' once they had taken advantage of the tax-loop holes...

I wonder how many of those 6,000 are still resident and earning in the UK and are just using tax avoidance schemes?

Well there can't be many people choosing to pay more tax than they need to. For a small business, the tax liability could wipe out any notional profit, and falls due in the year following, so upsetting the Year 2 cash-flow. Uncollected tax is the responsibility of HMRC, who find it easier to tackle wage-slaves on PAYE, so if HM Treasury wants more money it's up to Parliament to tighten the rules.

Which they seem curiously reluctant to do.

“What you should be angry about”

Extracts from an article by ‘Farm Donkey’:-

"This government’s emphasis is purely on people looking to make a profit from their use of money rather than actually contributing something solid and worthwhile. This also explains the government’s reluctance to interfere in a financial sector which caused the 2008 financial crash and ensuing recessions through irresponsible trading. This is certainly the kind of activity that this government favours, it is after all where the Cameron family fortune was earned – Cameron’s father ran off-shore tax havens for the wealthy.

The private sector is not more efficient than the public sector. Indeed, any efficiency gains that are made benefit only the shareholders and senior managers of the organisation in question. There will be those who tell us that the public sector does not generate wealth and at the moment this may be true to some extent, but only because all of the wealth generating industries have been stripped from it and given to those who exploit assets purchased by the taxpayer to generate their own wealth. This means that the added value that is being generated from these divested industries is not reinvested to improve conditions in the UK."

For the full article, please visit:-
http://farmdonkey.blogspot.co.uk/2012/12/back-wealth-creators-back.html

Ain't it de troof? But the damage was done in the 1980s when the Thatcher government dismantled most of Britain's Industry and replaced it with City Spivs. Crying now over that spilt milk isn't going to change anything, but all good men should strive for the first steps toward Recovery by removing Tory "values" from the political map.

‘The multiplier – how the economy works’
by John Lanchaster

“Imagine for a moment that you come across an unexpected ten pounds. After making a mental note not to spend it all at once, you go out and spend it all at once, on, say, two pairs of woolly socks. The person from the sock shop then takes your tenner and spends it on wine, and the wine merchant spends it on tickets to see 'The Bitter Tears of Petra von Kant', and the owner of the cinema spends it on chocolate, and the sweet-shop owner spends it on a bus ticket, and the owner of the bus company deposits it in the bank. That initial ten pounds has been spent six times, and has generated £60 of economic activity.

In a sense, no one is any better off; and yet, that movement of money makes everyone better off. To put it another way, that first tenner has contributed £60 to Britain’s GDP. Seen in this way, GDP can be thought of as a measure not so much of size – how much money we have, how much money the economy contains – but of velocity. It measures the movement of money through and around the economy; it measures activity. If you had taken the same ten quid when it was first given to you and simply paid it into your bank account, the net position could be argued to be the same – except that the only contribution to GDP is that initial gift of £10, and if this behaviour were replicated across the whole economy, then the whole economy would grind to a halt. And that, broadly speaking, is what is happening right now. People are sitting on that first tenner.”

For the interesting article from which the above extract was taken:-
http://www.lrb.co.uk/2012/12/21/john-lanchester/lets-call-it-failure

Can you post it back to me Ivan?

This was an entertaining and informative piece - thanks for posting the link Ivan.
Just illustrates what we all know, but this government can't see because of its ideological bias towards maintaining an obsolete class system.

Ivan wrote:‘The multiplier – how the economy works’
by John Lanchaster

“Imagine for a moment that you come across an unexpected ten pounds. After making a mental note not to spend it all at once, you go out and spend it all at once, on, say, two pairs of woolly socks. The person from the sock shop then takes your tenner and spends it on wine, and the wine merchant spends it on tickets to see 'The Bitter Tears of Petra von Kant', and the owner of the cinema spends it on chocolate, and the sweet-shop owner spends it on a bus ticket, and the owner of the bus company deposits it in the bank. That initial ten pounds has been spent six times, and has generated £60 of economic activity.

In a sense, no one is any better off; and yet, that movement of money makes everyone better off. To put it another way, that first tenner has contributed £60 to Britain’s GDP. Seen in this way, GDP can be thought of as a measure not so much of size – how much money we have, how much money the economy contains – but of velocity. It measures the movement of money through and around the economy; it measures activity. If you had taken the same ten quid when it was first given to you and simply paid it into your bank account, the net position could be argued to be the same – except that the only contribution to GDP is that initial gift of £10, and if this behaviour were replicated across the whole economy, then the whole economy would grind to a halt. And that, broadly speaking, is what is happening right now. People are sitting on that first tenner.”

For the interesting article from which the above extract was taken:-
http://www.lrb.co.uk/2012/12/21/john-lanchester/lets-call-it-failure

Great stuff. As I said yesterday here on one thread (can't remember which now), 'circulation is everything' and it requires demand and confidence. Exactly why QE to put money into bank coffers, where it remains, is a complete waste of time (except for the bankers whose coffers it goes into!).

Let's just say that limitations of space inevitably impose some compression of a difficult argument. Money in circulation obviously does more good than sitting in the bank, though even there it should be working by means of interest-gathering loans and overdrafts.

There can be nobody unaware of the Credit Crunch of 2008, but have we already forgotten what caused it? People were spending the notional future-projected increase in the value of the house they were living in. Read that again if you didn't realise the absolute madness of planning your finances around a future event.

Blessed were the grandparents who never spent money they didn't have.

oftenwrong wrote:Let's just say that limitations of space inevitably impose some compression of a difficult argument. Money in circulation obviously does more good than sitting in the bank, though even there it should be working by means of interest-gathering loans and overdrafts.

There can be nobody unaware of the Credit Crunch of 2008, but have we already forgotten what caused it? People were spending the notional future-projected increase in the value of the house they were living in. Read that again if you didn't realise the absolute madness of planning your finances around a future event.

Blessed were the grandparents who never spent money they didn't have.

People?

What people exactly are you refereeing to here?

People that were told that they could have a place to live? At low regular monthly payments? And all of a sudden the system goes CRASH! Because they didn't sit down and work out 'notional future projected increases' when they thought they were getting a safe roof over their head ??? String the lie long enough then blame the victims for falling for it.

I've neverr understood why a safe roof over your head is viewed as a privilege and not a right

boatlady wrote:I've neverr understood why a safe roof over your head is viewed as a privilege and not a right

It depends how much of your life you're prepared to give up to pay for it. Social need vs the accumulation of profit.

But isn't social need just exactly the need for members of society to have enough to eat, somewhere to live and access to education and health care?

boatlady wrote:But isn't social need just exactly the need for members of society to have enough to eat, somewhere to live and access to education and health care?

Of course. But the need to increase profit and accumulate capital is greater isn't it?

No.
Can't eat money, it's a rubbish building material, and the amount you'll learn to read on money isn't worth the trouble of trying.
Also, I've never heard that money is any good for a range of illnesses.

Oldboy wrote:

oftenwrong wrote:Let's just say that limitations of space inevitably impose some compression of a difficult argument.

Blessed were the grandparents who never spent money they didn't have.

People?

What people exactly are you refereeing to here?

People that were told that they could have a place to live? At low regular monthly payments? And all of a sudden the system goes CRASH! Because they didn't sit down and work out 'notional future projected increases' when they thought they were getting a safe roof over their head ??? String the lie long enough then blame the victims for falling for it.

Well the "victims" were not entirely blameless. It takes Two to Tango. Taking out a mortgage to buy your home is a legitimate purpose, but then taking out a SECOND mortgage because that home had mysteriously become "worth" double, is to prove how many people were willing to buy snake oil (or a new car).

Well now we know. Osborne staked his reputation on preserving the AAA credit rating which he inherited, but now that he’s lost it, “it’s all Labour’s fault”, at least according to Iain Martin of ‘The Daily Telegraph’.

If only Cameron had been in office for the credit crunch! Look at what he said in March 2008:-

“As a free-marketeer by conviction, it will not surprise you to hear me say that a significant part of Labour’s economic failure has been the excessive bureaucratic interventionism of the past decade - too much tax, too much regulation, too little understanding of what our businesses need to compete in the modern world.”

http://liberalconspiracy.org/2013/02/23/who-actually-managed-to-predict-the-global-financial-crisis-of-2008/

Could Gideon be right about "austerity"?
Figures from the Insolvency Service indicate that Company failures have fallen to their lowest level in five years.
Receiverships and Administrations fell 27.5% year-on-year.
However, Stewart Baird, an Investor, said that given the weakness of the economy this could suggest that the worst is yet to come.

It's bein' so cheerful as keeps 'em goin'

London's burning, London's burning.
Fetch the engines, fetch the engines.
Fire fire, Fire Fire!
Pour on water, pour on water.

London's burning, London's burning.
Fetch the engines, fetch the engines.
Fire fire, Fire Fire!
Pour on water, pour on water.

London's burning, London's burning.
Fetch the engines, fetch the engines.
Fire fire, Fire Fire!
Pour on water, pour on water.
Pour on water, pour on water.
Pour on water, pour on water.

But first let's discuss the dreadful expense of maintaining Emergency Services.

LOLOLOL

If London is burning, the fire probably won't be put out, because Boris Johnson has been busy shutting fire stations, despite what he promised in last year's mayoral election.

I still can't fathom why tlttf (the man who urges us to vote for independent candidates, while he votes for UKIP and Tory scum like Johnson) hasn't rushed on here to complain about Johnson spending more than half a billion pounds on his vanity buses. You can just imagine how quickly he would have posted his poison if a Labour mayor had squandered so much money! "Weird world, innit."