to not give a monkeys about the deficit?

[StuckInTheMiddleWithYou]

I genuinely think we should ignore it.

If we don't pay it back to whoever we owe it to, would it be the end of the world?

As B&T says if you tax the rich until the pips squeak as Dennis H said all those years ago you end up bringing in less tax, some people (and I accept not most) move abroad and there is less for the poor.

" Fortheverylasttime Wed 25-Aug-10 23:04:55
Is Xenia Mrs Moneypenny?" No, although I believe we are the same age.

Personally Xenia, I think (some) people resent your get-up-and-go attitude more than your money. :( I admire your tenacity and willing to "get the job done". [smarmy, creepy emoticon]

What Xenia said about people moving offshore is correct. Capital is very mobile and while I think we have been far too beholden and tolerant of what The City has been up to in recent years the truth is that most investors/bankers/entrepreneurs can easily move to another part of the world and operate just as easily. The lawyers and other service providers like Xenia will move with them.

I used to work for a company that operated out of Zug and although it was not a place I would want to live I can see why people would for tax reasons.

The people who come to this country tend to be young lowly paid people from poorer countries with far less generous benefits and social provision who wil not pay higher rate tax. The people who leave tend to have capital and qualifications.

Taken to an extreme like the 1970s where some well paid people faced 100% tax rates all the wealth generators will leave (or illegally evade taxes) leaving all the benefits claimants but the problem is that there will be no money to pay their benefits.

In the end everyone who pays higher rate tax does so voluntary because there are many countries in the world that are keen to offer low taxes to attract capital and wealth generators.

edam is right that CPI has been lower than RPI much of the time. What we need to look at is which is the better mechanism with which to uprate the income of people who are out of work.

Should we aim to maintain their standard of living or should we aim to improve their standard of living.

The argument is that CPI can be used to maintain their standard of living. The big risk is exacerbating the already harsh poverty trap. My view is that if we have extra cash it should go to the low paid workers to help them. Often their lives are harder than people who are on JSA. We do, however, need to encourage people to work and increasing JSA beyond inflation discourages people from working.

Is Xenia related to Mrs Moneypenny?

Bagged, I think Swedish women used the crisis to campaign - everyone recognised things could not go on as before. It was a turning point and they used it to make the country a better place.

Sadly in this country I think the politicians and the money men think it can. I'm not sure what they have learnt from the near collapse of the entire world economy or what has changed as a result to limit the chances of it happening again.

John, if RPI goes up more than CPI, as it does consistently, the buying power of people on benefits declines rapidly. Single people get something like £65 a week. It's hard to survive on that even without increases below inflation.

Recession = lots of people out of work through no fault of their own. Yet some politicians are successfully creating the impression that people on benefits are scroungers - pointing the finger at them to distract us all from remembering who caused the crisis in the first place AND asking what the hell is being done to prevent them screwing us all over again.

edam - DW said something this morning along the lines of what you are saying. We work together and watch business news all day and every day.

DW said she had noticed that there had not been one female Chief Executive on Business channle we watch for the last 2 weeks. Its true, we have a parade of male Chief Executives talking about their bsuiness and the state of the economy. Very few women.

DW says that looking back to her time in the City she feels there were actually more women sitting on the Boards of FTSE 100 companies a decade ago than today.

There is no doubt that business, politicians and fiannciers are trying to take us back to where we were. It is not working, we have not yet had the true crisis yet. Yes we do need a social, political and economic reboot.

I wrote on a thread the other day that there is no doubt in our minds that the lack of woemen in key decison making positions in banks, politics, regulators and business contributed hugely to the making of the financial crisis.

The question is one as to whether CPI is an adequate mechanism for measuring inflation particularly the basket of purchases for claimant households.

CPI is the measure used by the Bank of England for their inflation target.

I have argued that we need to look more specifically at claimant households who have a different pattern of spend to non-claimant households.

What I am saying is that it is important to maintain the purchasing power of claimant households. That CPI is not a bad mechanism although I accept that generally it is not as high as RPI.

The applicable amount of 65.45 for an adult does not include housing costs for rented properties that are paid through housing benefit.

TSC - the problem would be finding a buyer...

SmallWhiteCat - This is one of the few occasions where 'progressive' actually seems to be being used appropriately - i.e in the sense of tax/the impact of the budget getting progressively more the more you earn.

But I agree in general, based on it's usage, you would thinks it meant either:-
a) nice
b) things i agree with
c) things I don't agree with
d) the square root of fuck all.

SMC, Coalition's right, this is a correct use of 'progressive' in exactly the right context.

Been - I think there is an important cultural issue here. The City makes a virtue of aggressive behaviour which is perceived as masculine, desirable and successful. That's an important factor that helped to get us into this mess. A culture that balances risk and reward, where people look critically and carefully at risk, rather than celebrating aggression, would probably be easier to achieve if there was a greater number of women around.

Not that women can't be assertive or even aggressive where necessary (or even where not) but a larger proportion of the workforce in positions of power being female might help to create a more positive culture.

Might also help if they valued more caution and carefulness in men, too, rather than demanding everyone fits into the pathetic 'big swinging dick' stereotype.

1. IDS' universal credit ensuring those who are on benefits who take no work do not lose out is a great idea. Universal benefits are also cheap and simple although the envious poor don't like them if the rich get them.

1. Workfare would help people get used to getting up at 6am to work like loads of us who work have to even if we don't feel like getting out of bed.

1. On men/women I've been accused of being a man in disguise yet plenty of women do work in all sectors these days and whoever said women can't be assertive and successful. Huge numbers of women are so. I was pleased with Woman's Hour the other day as they actually had three women on there saying there are actually a huge bunch of women who have no truck with flexible working and part time work - we are not wanting to be home except for 2 hours work a day, we like work and want to work full time and it works. The media don't like to hear that.

1. For FT readers, no I am Mrs Monneypenny. I understand she wrote about having to take her children out of private school due to the recession but she still affords shooting and flying. I'm not sure I would have the same priorities but she writes a good column.

It's the well off or spiteful and meanspirited who don't like universal benefits. They are always sniping about means testing, and usually ignore all the evidence about adminstrative costs making it MORE expensive. Even if you put it there right in front of them in black and white.

Universal beneftis work well. Think of all the waste in terms of 20 page assessment forms etc we could be rid of but I'm just not so sure we can afford more in the current climate which is a pity. I don't think the rich would object say to £200 a week even for people of Philip Green's wealth - everyone who is adult gets it. If that makes the poor find it hard to find a 3 bed flat to rend and they have to mvoe a family into a studio then so be it. If that means one of them has to live in London all week (I see there are camping sites now available in London for commutess working there in the week for those who have got on their bike) who then ship that money back home to get the famyil out of the studio into a flat then that will incentivise them but at least everyone has had just the £200 a week whether rich or poor. I don't think the rich are that mych against universal benefits. Child benefit which replaced a child tax allowance which benefited those who paid tax, has worked well and not been resented by the rich.

Xenia is right. Universal benefits are a good idea. IDS is trying to move more in that direction, but they are difficult to maintain when the country is on the edge of going bust.

The budgetary changes don't bring in more bureaucratic procedures, but do accentuate some of the means testing that is already there.

It seems to me that Child Benefit is one of the few benefits that hardly anyone objects to because it is universal. I am a great believer in Universal Benefit too.

Fair to all, no one can object because everyone gets it, there is no disincentive to work and far less fraud. Providing the benefit comes truely tax free and it is not just added to taxable income of anyone who does go out to work it could solve a lot of problems and cut the cost of the benefits to zero if it was just part of the HMRC. The chaos of the tax credit system would also disappear.

To pay for it we need to remove the Personal Allowance for income tax and capital gains tax, remove the 10 tax band and the lower rate band abd remove all other benefits including Old Age Pension. We could get rid of minimum wage too if it was set at £10k per annum for each adult. I would prefer to see a small universal allowance for children to replace the child benefit but capped at 2 children per mother. That could be raised at age 16 and at 18 so children had something to live on if they went into higher education without being a burden on parents.

So do you get a free tent, sleeping bag and camping stove with your first universal credit payment?

What a joyous prospect, a parent cramped in a tiny besit with the kids ( a great way to study for school and get on in life, I'm sure) Actually, even up here in the North, you'd be lucky to rent a single room in a shared occupancy house for anything less than £50 a month.

The other parent (assuming there is one?) will no doubt have to eat? Pay transport costs? Pay for clothes to wear to work, to wash and are these 'campsites' free to all? Not to mention the fact that we live in the northern hemisphere here. Guess it won't just be old people freezing to death under the tories this time around.

I thought I liked the idea of universal credit. As beautifually demonstrated by Xenia, actual effect it could have on children from the poorest backgrounds has changed my mind.

wubblybubbly - There is obv a debate to be had about the level it should be set at but £200 a week is going to give an income equivilant to about £14,000 for each adult. That doesn't seem WILDLY unreasonable.

Isn't £200 a week nearer £10K? In any event, it isn't a wildy unreasonable amount for an adult, but it's the children being brought up in these circumstances that concerns me.

The major issue really, as I see it, is decent and affordable housing.

My earlier post has a rather huge error. The figure of £50 for a single bedroom in a shared occupancy house I quoted is per week, not per month.

I would set the Universal Benefit at £10k per nnum tax free. It is a figure I have seen discussed elsewere. I also would want to see a small additional Universal Benefit for up to 2 children per family.

However, these threads often break down on the arguement over the cost of housing and the removal of Housing Benefit. It is the prime reason benefits seem so high and wy so many tax payers object to peopel livng on benefits.

What we all have to accept is that housing costs exploded in this country and partly on the back of ever increasing Hosuing Benefits. The costs of housing are beginning to fall and Housing Benefit will have to fall to reflect falling rents. In addition, people wwho are on benefits and not working wil have to accept that move to a cheaper areas and renting if they have no job is the natural consequence.

If people want to live in an expensive area (eg London) where there is very little unemployment then they wil have to working to earn more to pay rent and that wil be reflected in wages.

Sorry but ever rising Housing Benefit and the cost of renting are feeding on each other and it has to stop.

wb - it depends if you are talking about raw income or the equivilant taxed wage. I was just doing 200521.3 assuming that tax and NI takes about 25% of your pay packet. But the exact level can be debated.

Housing would get more affordable if it wasn't government subsidised. Eventually.

Children do need to be accounted for as well I think.

I think UB is a great idea. You'd get your basic £200 a week and then anything you made after that would be yours to keep. You wouldn't be worried about your benefits being faffed with.

I know I often have extra hours to offer, though not permenantly iyswim, and those on tax credis can't take them without fear of everything being messed up. Yet they'd love to around Xmas etc