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I didn't live in Wales at the time of the Devolution vote Jim, but I asked a friend who did about the apparent disagreement on the subject.His reply was this:
In Wales, if you stick you head out into the Street and yell 'YES', five people will immediately answer 'NO', four more will shout 'YES' and then they will all come and ask what the question was in the first place...
Devolution is one of those flag waving things which is not as exciting as it looks. On paper it looks great to have the powers to raise taxes and decide on spending. In practice, much of our tax income and expenditure is largely fixed and Governments have relatively little power to vary it.A lot of people have this naive assumption that devolution means that they can choose to spend more on the health service or education or whatever. Well, yes, but only if they are prepared to pay higher taxes, which would be a diminishing return because of the damage it would do to the economy.
By all mean change the flags and the logos and where the decisions are made. But you will almost certainly end up making broadly the same decisions as a UK Parliament - and waste billions in the transition costs.
At a time when we face genuine and serious problems around the economy, the environment and terrorism, the question of devolution has to be one of the most pointless and irrelevant topics to get hung up on. An independent Scotland would not magically have access to the billions needed to deliver the SNP's anti austerity rhetoric. They would end up making the same decisions that a UK Parliament or Government would make.
Again Will, you are relying on a mechanism within the economy described by Friedman which is turning out to be highly flawed.Taxation does NOT damage an economy, as by itself it does not remove money from circulation. As evidenced by Keynes, who it is becoming clear is a much clearer thinker than the currently popular Friedman, all that taxation does is transfer money to the government who re inject it into the economy in other ways. To call it a diminishing return is just silly.
Taxation spent on Nurse's salaries for example - they have to spend their salaries to live you know - so in fact, lower taxation in the end results in LESS cash circulating as it inevitably results in less essential public sector jobs - and public sector employees are normally poorly paid and spend all their hard earned on living..
Sorry, but that is way too simplistic. As taxation increases or decreases, different groups of people react in different ways.Make taxes too high and you can ruin an economy. That is at the heart of the current Greece debate, where they need higher taxes to pay off their debts and reduce their deficits but they are quite rightly worried about the effect on tourism and the working standards of the low paid.
Increase tax on a luxury good, such as alcohol, and you can find that people choose to consume less of that commodity. That hurts both producers and consumers, and you don't raise the level of income that you were expecting.
Raise business taxes too high and companies will relocate their workforce out of the UK.
Basic economics.
No, Will: it's Friedman economics. And far from basic, it's a fundamental disagreement between economists. Taxation simply moves money around. It's a tool to do that, nothing more. If consumption of, for example, some alcohol or cigarettes falls, then it's likely that confectionary will rise, for example... Who wants to confess they swapped their fags for polo mints for example?Raise taxes too high and business will relocate you suggest.
How? retail cannot relocate, can it? OK, there's internet selling, but overall that's still a small chunk of the retail sector. With appropriate safeguards in place (which incidentally we already have in the Tax legislation - the rules are openly flouted and the flouting not aggressively attacked by HMRC as they should be) to stop the tax deduction of the transfer of profits abroad, the multi nationals can't swap that easily. Non multi nationals can't just relocate either...
Osborne is reducing Corporation Tax rates. That will have the direct effect of reducing Government Revenues. But it won't put an extra quid into the economy anywhere or stimulate any growth.
Retail most certainly can relocate. The point of sale is increasingly relocating to the internet (more and 11% of UK sales). Call centres and production are relocating overseas. How do you think Aldi and Lidl keep their prices so low?Reducing corporation tax doesn't put an extra quid into the economy? You are joking right? That is exactly what it is doing. Reducing the tax overhead gives businesses funds to invest in plant, marketing, R&D, new products, more efficient production methods.
Taxation does move money around. In doing that it can transfer money between spending that invests in the economy and spending that wastes money. But any group of individuals or businesses can be overtaxed. How would you feel if the rate of VAT was increased to say 50%?
It's not as easy to relocate as you suggest. I'm presently losing what little hair I have left in trying to summarise an analysis book for a car hire company in Swansea (who appear to think it is acceptable to suddenly include the casual labour he hires in his rates bills half way through one month, confuse his VAT payments with his telephone bills and include his internet dating site costs with his motor expenses. Thank gods i told them not to get a computer system, I'd never unravel it all!) They can't relocate.Internet too: The location of the point of sale is now defined as the purchasor's country of residence, not the website address...
VAT is an interesting tax. Sweden for example has very little income or corporation tax ( although Tesco don't seem to have their Head office there, do they?) and high VAT. It's all a balance between direct and indirect tax.
That's part of the point for greece. Because their tax collection has been so inefficient in the past, it actually makes sense for them to press ahead with mnore VAT at the moment, and then drop direct tax back down once their position stabilises.
You are wrong again on investment into business. As there are generous tax allowances for investment in plant and equipment, a HIGHER rate of mainstream corporation tax in fact encourages investment in equipment by reducing the net cost of the plant to the business. Same with R & D, although I see Boy George is busy reducing the tax benefits of investing that way... Low Corporation tax is a dis incentive to invest in new plant and training, because there is no tax advantage in doing so.
Edit: I also see VAT as a regressive tax, and it tends to transfer the burden of payment inequitably onto the less well off, so in general I'm not a big fan of choosing indirect tax as a vehicle for raising revenue
Your car hire company may not be able to relocate their main point of sale, but I'll guess that the cars they are using aren't British? And the drivers? And their accounting software? And the computers in their main offices? And the furniture? And ...A company is not just its point of sale presence. It is about all parts of its business, and the impact it has on the UK economy as a whole.
Yes, Greece need VAT increases at the moment, but they can't keep on increasing the rates because there comes a point where higher rates damage tourism income. That was one of their sticking points in the negotiation. As I said, diminishing returns.
Companies don't simply invest in new plant and training for a tax incentive. They also do it to expand the business. That's why a low tax regime for businesses makes financial sense, whether it is corporation tax, reduced business rates on property, incentives to hire apprentices and so on.
The point remains. Tax brings in income. But you can't keep in raising tax indefinitely because of the impact on businesses and individuals. Diminishing returns - which is exactly what I said at the beginning.
You seem to be determined to prove me wrong, but all you seem to be doing is agreeing with me.
"That's how our democracy works, and how it has always worked."that my friend is the very definition of small 'c' conservatism.
a) our democracy currently isn't working terribly well, in the sense of a more representative representation of the voters
b) just because it has always been like this doesn't mean that it is the best way to go. Especially when the world turns & moves on
Marc wrote: ""Ta) our democracy currently isn't working terribly well, in the sense of a more representative representation of the votersb) just because it has always been like this doesn't mean that it is the best way to go. Especially when the world turns & moves on ..."
I've always worked on the principle that because the world is always turning and moving on, if you stick with what you're doing, it'll be cutting edge and spot on a couple of times a century.
So you want something that is 'sort of good enough and everybody is comfortable with' for the rest of the time.
Change normally means that you're switching to a system that's already becoming discredited just as you adopt it :-)
Will wrote: "Taxation spent on Nurse's salaries for example - they have to spend their salaries to live you know - so in fact, lower taxation in the end results in LESS cash circulating as it inevitably results in less essential public sector jobs ..."I think that you can divide public sector jobs into valuable, such as nurses, teachers etc, neutral and a burden.
The neutral ones are those like the various inspectorates where to an extent they're a safeguard, but push them too far, and they become a burden on the economy, imposing cost for no benefit to either the inspected or the consumer.
We have to beware of 'the inspector trap.' It's highly probable that any business will fail their inspection at some point.
The problem is that if the inspector signs them off and comments that they're doing it really well, and then something goes wrong, the inspector might get some of the blame. But he gets his or her reward whatever the result of the inspection.
So the wise man finds something minor and half hidden which the inspector can find, will be cheap to fix and not lead to statutory penalties. That way the inspector has covered his back by finding something and you aren't faced with a huge bill
Will, none of your argument has actually made any economic sense: unless you accept as a given that the state should shrink to a tiny operation - which I don't. It's plainly stupid. Alternatively you have thoroughly misunderstood my argument about tax relief stimulating investment in plant.The state should be responsible for all the major essentials. Transport infrastructure, power, water etc. That way the freedom and prosperity of the country can be safeguarded - but that means raising revenues. You do not raise revenue by reducing direct taxation to foolishly low levels. How, exactly, do you think that reducing the Main Corporation Tax rate is going to bring in more money? It will not. Nor, as has been proved by the experiments over the last few years, will austerity lead, anywhere, anyhow to growth. It doesn't. And taking more investment out of the economy by further reducing government spending (an essential if you are going to move to a low direct tax economy that benefits only the very, very rich) will only continue to reduce growth. I see inflation is back to zero, as companies continue to desperately cut prices and margins to maintain market share.
We are very different economically and I believe your Friedman derived ideas are very, very wrong.
I have heard that the Chinese have offered to cancel the Trillions of US debt to them: in exchange for substantial land rights in the sparsely populated mid west... how long before some silly Friedman idealogue says - hell yeah, sell it off...
Jim wrote: "Marc wrote: ""Ta) our democracy currently isn't working terribly well, in the sense of a more representative representation of the votersb) just because it has always been like this doesn't mean ..."
Does this mean that if I wait long enough, my clothes will be back in fashion???
Will wrote: "Does this mean that if I wait long enough, my clothes will be back in fashion??? ..."It's happened to me :-)
i don't want to be in fashion, just saying...
Will - oh dear, and you were doing so well. Let's start from the basics. Governments (of all political colours) are extraordinarily poor at running services. In part that's because they have no competition and therefore no incentive to become more efficient or to innovate. That's why the UK had an empire on which the sun never set - because we didn't try to run things via the state. We encouraged private enterprise.
The best way to encourage private enterprise is by lowering their costs and helping them to create profits - hence the importance of reducing the tax burden on businesses. That enables them to invest, to produce goods more efficiently, to export more and to increase the flow of cash into the UK. This then pays workers who in turn have more money to spend on goods and services. Which increases tax income.
In that way, the money lost through reducing business taxation is more than recouped through increased national wealth.
On the other hand, if you over-tax businesses to spend on the state, all you are doing is moving money around (as you so eloquently put it. This reduces the competitive advantage of UK businesses and leads to economic stagnation instead of growth.
Of course, you don't reduce taxation to "foolishly low levels", but no-one said that. Foolishly low levels are be definition foolishly low. That's more or less implied in the title.
The arguments for states running businesses have more or less been resolved when Russia and China embraced variations of capitalism. That ship has long since sailed, and no-one credible is arguing for a return to state ownership. That's why only the maddest ultra left wing factions in the Labour party are arguing for renationalisation. It simply does not work.
and yet the power companies and rail networks work so smoothly and are price fair that only today we hear the CMA suggest that rail routes are opened up to genuine competition in order to bring the ticket price down, while the Power Company regulator wrings its hands constantly as it urges the power companies to play fair with the consumer and apologists blame the consumer for not shopping around and swapping provider every few months in order to take advantage of the offers to switch. And it's hard to maintain any sort of voluntary control when so many of these companies are foreign and not British.
Free enterprise doesn't always work in the case of things that require national networks, heavy capital investment to maintain/develop such networks. So yes, I would take both back into some sort of nationalised control because they have been taking the p*** out of us consumers ever since they were denationalised.
Either that, or let's get some Russian Oligarchs in to run them with their gangster etiquette.
Don't forget that several franchises are owned by State Railways. Just not OUR state...Railway Privatisation has proved to be a massive, colossal failure benefiting no one but some investors and damaging the nations infrastructure.
'I'm taking my salary increase' - Millionaire Tory LeaderOurs goes to Charity - SNP
http://www.independent.co.uk/news/uk/...
Tells you everything you need to know about Tories in two lines.
Will wrote: "Don't forget that several franchises are owned by State Railways. Just not OUR state...Railway Privatisation has proved to be a massive, colossal failure benefiting no one but some investors and..."
Not just railways. The French government owns Eon and uses the profits to give the average Frenchman in the street, cheaper energy bills.
I've been saying it for years - privatization has been a racket for the few too line their pockets, whilst the many (taxpayers) bail them out when times are bad.
Look at Osborne's mates making a killing when Royal Mail got privatised.
Will wrote: "'I'm taking my salary increase' - Millionaire Tory LeaderOurs goes to Charity - SNP
http://www.independent.co.uk/news/uk/......"
Snouts in the trough as usual.
R.M.F wrote: "Will wrote: "Don't forget that several franchises are owned by State Railways. Just not OUR state...Railway Privatisation has proved to be a massive, colossal failure benefiting no one but some ..."
not just osborne's mates, what about Thatcher's cronies with the original round of sell offs? Then Tory MP Keith Best was jailed for making applications for BT shares in 6 different names! Funnily enough a couple of years ago he applied for a job with us, an ethical organisation. He didn't get shortlisted...
Marc wrote: "R.M.F wrote: "Will wrote: "Don't forget that several franchises are owned by State Railways. Just not OUR state...Railway Privatisation has proved to be a massive, colossal failure benefiting no..."
And those tell Sid adverts! I bet you put your foot through the screen when you seen them years ago.
I might have, but I would have missed out on "The Young Ones".Mind you when ben Elton did his "thatch" routines ion Saturday Night Live or whatever it was called, that also made me want to boot in the telly.
Always check when a politician gives money to charity that it isn't just the party taking it for funds, because political parties are charities!Always remember when discussing nationalisation etc just how well government runs things. Imagine the railways being run by the same people who organise government IT schemes :-)
R.M.F wrote: "Will wrote: "'I'm taking my salary increase' - Millionaire Tory LeaderOurs goes to Charity - SNP
http://www.independent.co.uk/news/uk/......"
i don't usually comment on political threads but this time I just want to say that I find it disgusting that these lying, greedy pathetic little men can justify taking a hugely rise on top of their already over inflated salary whilst others are having more and more taken from them and are barely surviving. As for David Cameron, well he has got to be the worst there is, I don't know how that man can hold his head up in public, he sums up everything I think about the government, they are full of nothing but lies, greed and only look out for themselves, in short they make me sick !!!!!
Jim wrote: "Always check when a politician gives money to charity that it isn't just the party taking it for funds, because political parties are charities!Always remember when discussing nationalisation etc..."
The alternative is Richard Branson and being stuck on a broken down train, with no air conditioning, on a hot summer's day, a few years back. As what happened to me. My love for privatized train companies died that day.
Anita wrote: "R.M.F wrote: "Will wrote: "'I'm taking my salary increase' - Millionaire Tory LeaderOurs goes to Charity - SNP
http://www.independent.co.uk/news/uk/......"
Hear hear.
it's the cost of trains I object to. Some prices seem reasonable, others are horrendously expensive. And as for trying to track down the best deal, it is an absolute labyrinth and yet we are also encouraged to always be monitoring the best power companies deals on offer and switch? They can **** right off. Just price it reasonably and be done with it.
Jim wrote: "Always check when a politician gives money to charity that it isn't just the party taking it for funds, because political parties are charities!Always remember when discussing nationalisation etc..."
Jim, the rail service in Northern Ireland is state owned, and those well lefties Nick & Margaret from The Apprentice considered it the best run and most efficient service in the whole of the UK.
One of the franchises (can't recall which one) here failed badly and only returned to a proper service when taken back into public ownership - as it should have been in the first place.
Marc wrote: "it's the cost of trains I object to. Some prices seem reasonable, others are horrendously expensive. And as for trying to track down the best deal, it is an absolute labyrinth and yet we are also..."
Train prices are fine if you book 4 years in advance :)
And are prepared to spend an hour researching your cross country route three different ways on four different sites and getting a different price each time for the same journey, on the same train lines and in the same actual trains...All hail privatisation for efficiency and consumer choice!
I book early enough and some still massively overpriced
I went to Hull on a day return for a Uni open day with my son. Booked the tickets online 6 weeks in advance 106 quid which I thought steep. The tickets were sent to me in the post and you get about 10 bits of cardboard all the same size and colour, so you have to scrutinise very hard to determine which are tickets, which are reservations, which are credit card receipts. Nowhere on any of these tickets did it state that the trip up was no-changes via Hull Trains, whereas on the way back, nowhere did it state that it was Virgin East Coast, that we had to change trains at Doncaster, that the stated train time of 16.55 was the time from Doncaster, NOT the time from Hull and so we turned up at Hull station for the 16.55 to catch a train that was non-existent and when inquiring at the information desk, to be told we had no chance of making our connection and that we would have to buy the tickets again for the correct train (which i refused to do and fortunately we were not checked by an inspector once we were on the Doncaster train).
R.M.F wrote: "The alternative is Richard Branson and being stuck on a broken down train, with no air conditioning, on a hot summer's day, a few years back. As what happened to me. My love for privatized train companies died that day. ..."It's funny how different people's experience can impact on them.
For me one of the positive things was Richard Branson because when his train broke down, the guard came round handing out water and told us what was going on and then kept everybody updated over the tannoy as to how things were happening.
Mobiles weren't common at the time and anybody who wanted to get a message home could approach the guard/train manager who'd phone home to tell them you'd be late!
After the service I was used to this was amazing!
Will wrote: "Jim, the rail service in Northern Ireland is state owned, and those well lefties Nick & Margaret from The Apprentice considered it the best run and most efficient service in the whole of the UK.One of the franchises (can't recall which one) here failed badly and only returned to a proper service when taken back into public ownership - as it should have been in the first place. ..."
Well in the UK, the rails, the network etc are still owned by the state,(or so National Audit Office and the Statistics Commission tell us) so with the State still in charge, Network Rail at least should be an exemplar, a bright shining star in the firmament of our transport infrastructure :-)
Ah, but we are 5 years into Tory Government Jim: and as ever, the nation's infrastructure assets are being under funded with rising demand.Same happened under Thatcher & Major. No spend, no investment - it took Blair and brown loads of investment to try and make up on the repairs.
Will goes all frothy when I refer to the Tories as scum.But only scum could approve this. If the cap fits...
http://metro.co.uk/2015/07/16/britain...
I'm surprised such a place isn't already in existence to be honest
Seriously Will, the same thing happened for much of the last centuryI deal personally mainly with such people as RPA, river boards, drainage boards, the utilities as they operate (as opposed to deliver)the environment agency and similar.
The big advantage with privatisation was that those bodies which as nationalised utilities just polluted away and let things go to hell in a hand cart, (the number of local authority sewage systems that just ran out onto the beach!)screwing land etc, suddenly, as private companies, they had the Environment Agency gunning for them. And trust me in this, the EA did go in hard. This is because it was personal. The Civil servants/bureaucrats who'd spent years telling staff from the EA to run along and play, might have suddenly earned serious money went they became private companies but equally suddenly the EA could touch them, and touch them it did. That's why there has been a fortune spent on sewage works, water leaks and similar.
Government should never be both deliverer of the service AND regulator who oversees the delivery.
Regularly when I deal with a government agency you'll get the response. "Yes, we have a statutory duty to do this, but as there is no money in the budget, we're not going to."
That isn't a defence open to private industry.
I'm not being ideological in this. I am happy to see government run various things, I think our health service is considerably better than the US equivalent for example
But there are things government cannot do. We talk about some of the Blair/Brown investment. A lot of it was in PFI! The bureaucrats who negotiated those deals should have been sacked! If they'd worked for a private company and signed them, they would have been.
I've talked to people who've dealt with government departments on defence contracts. They just know that government will change its mind three or four times in a long contract, so for self defence you put in pretty tough clauses covering cost recovery during those processes. Do that and you can put in a pretty competitive price for the job as such. In fact the prices offered can be so competitive because everybody knows that government will never just say, "fine, do it and deliver."
Somebody will come along and change the spec. They always do. Ask anybody who was involved in the Eurofighter project.
Will wrote: "Ah, but we are 5 years into Tory Government Jim: and as ever, the nation's infrastructure assets are being under funded with rising demand.Same happened under Thatcher & Major. No spend, no inve..."
Do you think that's always the Tory plan these past years? Starve something of investment, then say it's under-performing, and present privatization as the solution.
Or am I being too cynical? :)
I see that the Tories are paving the way for military action in Syria and Iraq, despite Parliament telling the Tories where they can stick it. We never learn...
Although I'm strongly pacifist, RMF, to the level where I cut up and sent back my Labour party membership card over Iraq, I am a little conflicted here. ISIS are a rare example of an evil that must be eradicated for the world to have any chance of any peace.With the right diplomacy first, and as any action is not primarily motivated by our greed, it may not have repercussions.
ISIS do need to be countered. But an aerial campaign will not achieve this. In a way and I know it sounds harsh, the existing borders with ISIS need to be bulked up to make further expansion not optionable to them and then let their state collapse due to its own horrific excesses
Will wrote: "Although I'm strongly pacifist, RMF, to the level where I cut up and sent back my Labour party membership card over Iraq, I am a little conflicted here. ISIS are a rare example of an evil that mus..."I agree with Marc. ISIS needs to be dealt with, but this half-ass strategy of bombing some camels and some sand dunes, has been an utter failure.
Cameron bombed Libya, and that country is now a basket case. Iraq is a mess. A sensible man would have walked away months ago, but Cameron can't stop digging.
Let the region sort this out.
let the region sort it out, you mean like Israel & Iran want to sort one another out? Or the Saudis want to foster the revolution in Yemen? Or that somehow all the factions in Syria will lay down their arms peacefully and go for a tea together? It's true all of this has been reaped by the historical actions of the Western Powers, particularly Britain & France and of course more recently the US. But you've got to take it on a case by case basis.
Marc wrote: "let the region sort it out, you mean like Israel & Iran want to sort one another out? Or the Saudis want to foster the revolution in Yemen? Or that somehow all the factions in Syria will lay down t..."Britain has been in the Middle East for 200 hundred years, and it has been nothing but a graveyard for this nation.
We've fought everyone from Napoleon Bonaparte, To Rommel, Jewish settlers, Ottoman Empire, the list goes on.
High time we pulled the plug and got the hell out.
I agree. But then who you going to call on to contain the madness there? The UN? The US? The Dutch? The Faroes?
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But I think the problem with Wales was that there was so little real enthusiasm in much of it for devolution