AIBU to want the government to subsidise high-wage and export industries rather than low end convenience and border-line viable?

[pinksauce]

The UK recent economy is based on some high end business and people in these industries then paying for convenience. Hospitality, much of the arts, call centres, town centre retail are all low-wage.

Yet, in this strange time when we are building up debt to support the economy, we are subsiding businesses that are low-wage and frankly just convenient rather than valuable.,

I'm happy to see these low end businesses close, and the retail/convenience/debt culture end - and instead only support businesses that provide real innovation and value - medicine, engineering, software products, manufacturing, etc. and are heavily export driven.

If many people and businesses couldn't save enough to manage 6 months or so, then they were not viable or sustainable in the first place and need to move on.

So you are intending to have a small number of people and businesses who are high earners pay enough tax to support the welfare payments for those whose industries are deemed not worthy? Or are you going for the Ebeneezer Scrooge model of let them die and decrease the surplus population?

So you advocate thousands if not millions of people go on benefits for the tax payer to support for we don’t know how long?

[quote pinksauce]@ShinyFootball

I don't need you to hire me - I already run a very successful business and do not need any government subsidy - in fact wouldn't take it on principle.

No problem with anything you said about that you want, but equally there is no need to support these businesses from general taxation. They are easy to setup again, and could have easily survived if profits had been left in the business to manage unforeseen events.[/quote]
A successful businessperson wouldn’t have time to spout bullshit in the middle of the night.

No we don’t have different maths. You constantly say “high tax” to refer to tax revenues. As you just have now. I responded specifying tax revenues and you are now acting like I said tax rates?

Sorry but you’ve misunderstood me. 100% of the population needs police, healthcare, roads, education, etc. It’s just that without them being funded by the State from taxation revenues, only 0.1% would be able to afford their own private police, Doctor, roads, schools...and I mean private as in Dark Ages where you’d hire a men at arms aka police officer, pay their wages, buy their equipment, house them, etc.

Yes some economies have high exports but those are still consumer dependent. But that’s not a good strategy to make an economy dependent on exports...or non local consumers that you have no authority over. After what do you think will happen to OPEC countries when we have all stopped using oil? We won’t be buying what they are selling and poof there goes their economies.

High VAT does not derive from low incomes because it’s highest in the OECD countries which are the richest, highest income countries in the world. It is precisely because incomes are high, that a high VAT is possible.

While I agree that intrinsic value is an increase to real GDP and GNI and that innovation supports this, my point is that innovation doesn’t come from nowhere. It requires investment. Research and development funds. Start up funds. Seed money. Whatever you call it, that money is by and large provided by the State from its tax revenues via university grants, and business contracts.

Value isn't just a number though OP. Going out for a meal, or going to the local theatre adds value to a lot of people's lives. Local businesses are also great for communities, rather than every high street having the same few shops, and faceless organisations. You say you understand business, yet can't seem to grasp that a fully viable business may struggle when an unforeseen pandemic forces them to close more or less overnight. Many have had to still honour certain payments to suppliers, pay rent for their premises, and pay staff before being able to claim back furlough.

I already run a very successful business and do not need any government subsidy

MLM by any chance?

@pinksauce

We must have different concepts of maths. Low taxation on a high value economy can generate much more tax than a high tax on low value economy. Some of the most successful economies have very low tax rates. If 99% of the population need state services paid for by others rather than genuine risk sharing, then it is indicative that the majority of people are not really making a living.

Not all economies are based on local consumption alone, exports play a very important part to many successful economies - although agreed everything has to be consumed somewhere - but having high VAT typically derives from low incomes being common.

Intrinsic value is generated by innovation that grows the economy significantly. Where inflation and growth are around the same, there is no intrinsic value being generated - technologic al advancement is typically needed so that growth far outstrips inflation and labour or capital utilisation.

High value industries mean that we should be able to increase our standard of living and work less.

No our maths are the same. You seem to use “tax” and “tax revenues” interchangeably. But in my response, note I specified tax revenues, so not sure why you are confusing that with tax rates.

I said all economies are consumer driven. I never said “local consumption”. True some economies are export dependent, and exports are in fact consumed at destination. But that is not a good strategy because you’re depending on consumers over whom you have no authority. After all, what do you think will happen to the OPEC countries when we stop using oil? Their economies will collapse.

High VAT rates are not derived from common low incomes. They are highest in the OECD countries which are the highest income countries in the world. It is precisely because incomes are high that every worker can sustainably pay a 20% surcharge on every retail item.

I agree with you that intrinsic value is an increase in GDP and GNI in real terms. I also agree that innovation is a large part of this. But my point is that innovation doesn’t come from nowhere. Innovation is possible because of investment- research and development funding, seed money, startup funds, which are mostly provided by the State via university grants or business contracts. The State gets this money from tax revenues, which come from the cash cow of VAT on the bread and butter coffee shop type businesses. You’re sneering at the very humble workers who generate the money that makes innovation happen.

Oh sorry. I thought the page had crashed so rewrote my response. Sorry for duplicating.

This is a joke post, right? Get rid of coffee shops, sandwich places and gyms and allow the unskilled low paid workers to become unemployed to satisfy your unrealistic, hideously snobby, idea of a good way to live.

What is your successful business btw?
Scentsy or Younique?

@pinksauce

You seem to have no grip on reality.

I agree with the OP, at to a point.

These subsidised jobs will all go just 3 months later in January instead of October IF the businesses cannot adapt to the new norms of CV, a temporary VAT cut not passed on to consumers and meal deal, will not stop a pub from closing.

I am not against helping these areas but it needs to be based on longer term sustainability.

So take France, 7 billion investment in the car industry, Germany 150 billion into green transport/RnD.

What are we doing for our green energy, tech, aviation or car industries?

I think it is good to target the main benefits to those that employ mainly younger and lower paid workers - e.g resturants/ coffee shops/ pubs etc. It is just a short term target and not a sign that other things don't matter. I don't think it will or should go on past January (assuming covid behaves itself).
I think the Autumn budget will concentrate on all these other big things.

This targeted help has a few benefits as far as I can see

a. keeps young/lower paid in employment - good

b. keeps the high street ticking over - good

c. encourages people out to the high street again - they will realise it is not so scary and will hopefully encourage them to spend in other types of high street businesses - good

d. there are a lot of people - retired/middle aged - that have saved loads since March. They have not really been financially affected - and it is a message to this group to get out and spend. I include myself in this group and I will go out and take part in these schemes and I have been using my high street as much as possible. - good

I do think alot is banking on a vaccine that at least part works in the late Autumn. Hopefully that will be the case.

I work in a low skilled role- a call centre for a housing association? So what you are saying is that my job is not important enough to be worthy of your high finances take on life? And it should be chopped?

I don’t claim any benefits apart from CHB and j earn enough that my fiancé and I are not entitled to any. We own a 4 bed (mortgaged yes) but still better than most people my age.

You have a very small mind if you think that’s how the economy should work.

So in this high value only economy of yours, how do you propose spaces get cleaned, food and drink gets to shops, shops remain open for people to buy said food and drink from?

Do you understand that when a business first starts, it doesn't have savings yet because those take time to build?

Do you also understand that covid wasn't anyone's fault? So why should the coffee shops die through no fault of their own just because you don't like them?

We do pay for them, usually - pre-pandemic my two local indie cafes had definitely not had any government subsidy.

But do you remember how we weren't allowed out during lockdown? How were they supposed to survive, when they were doing perfectly ok before but hadn't built up savings yet?

Also echo a pp - value isn't just about money.

I think the government should plough money into industries like engineering (conveniently my industry!) because it gives work to high earners in the planning/design/analysis stage and then the work goes out to site and employees lower earning construction workers and labourers. Long term, it brings life to an area, potentially improves tourism, community involvement, opportunities for school kids to learn about STEM, job experience for students, etc. I think spending money in this way gives a decent all round boost.

There are no words for you op. You don't go on holiday / out for food do you?
These places you look down on are hammered by business rates and vat as well as generating large numbers of seasonal jobs - beneficial to young people / students, as well as permanent staff - all this is good for the economy from the government perspective.
Then there is the social aspect. People meet up in these places for a multitude of reasons that are clearly beyond your comprehension.
We live rurally, and the local pubs are literally the hub of the villages. You can find help & support there when you need it, or just company for the lonely. All of them have opened up for takeaway during lockdown, not as a money maker, to support their local communities.
These pubs / hotels are quieter in Winter, and make their money March to September. If lockdown occurred in January or November many of them would have coped more easily - the timing of this is critical. Some big companies are struggling with covid - Brains brewery for example who have a chain of pubs. All these pubs lost all their fresh food when closed down, as well as beer waste etc multiplied over a chain. Then they have to continue to pay industrial bills throughout lockdown for each venue. To give you a small clue op, without loss of income it's costing many hospitality venues in excess of £10k per week to be closed and this is before contributing to furlough going forward with no income.

Staff of these businesses usually live very locally, so commuting etc is cheap and they keep more of their wages, so you want to pay to train them to earn more and give it away in train fares instead? Then when they have their higher wage there's nowhere to go with it - 🙌🏻

You may run a successful business op, but you're ill informed and lacking in empathy & common sense.

Maybe get down off your high horse and take a closer look without judgement.

👏 @Reluctantbettlynch, very well said!

When the likes of google and amazon pay their full uk tax bills instead of having sweetheart deals you can maybe make a point with regards to funding training for specialised jobs. But I’m still going to want to go to a cafe for a drink with my friends and our little ones.

Wages should be a lot higher in some sectors such as childcare and indeed social care full stop. These are the kinds of skilled jobs that should be paid well and that the country needs more of.

just make coffee at home and get the people in much productive jobs ... Do we really need people making and selling sandwiches that take less than 2 minutes to make yourself?

Just because you don’t want to pay for this stuff doesn’t mean others don’t.

The demand is there in normal times. It will take while to return, which is what the subsidies are about - bridging that gap.

I agree with you that we should be pursuing high end manufacturing in the longer term, but it would be years before decent money can be made from this. In the meantime, let’s alleviate the recession affects as far as possible.

What a ridiculous argument. Take that to its logical conclusion and we don't really "need" anything.

YABU in the short term, as there are specific circumstances which mean some businesses are presently un-viable but, post-COVID, won't need support and will positively contribute to society. Not providing the subsidies would result in short, medium and long term pain to employees, businesses and the government.

Longer term, economically un-viable businesses should not be propped up, unless they provide some benefit to society which isn't well measured on an economic basis. The government has a role to smooth the impact of business wind-down/closure on individuals.

Marginally viable businesses are potentially worth supporting as the benefits of their economic activity, employment and output exceed the costs of losing the economic activity and increasing unemployment.

Governments can play a useful role kick-starting new businesses and encouraging an entrepreneurial mind-set/supportive environment. Business support from governments should be assessed on expected societal benefit and specifically avoid activities where private ventures are likely to organically start-up in any case.

You'd have a strong economic point if you were right about those industries.

Unfortunately you're wrong. Manufacturing - ha! But you know, don't let boring things like facts get in the way of good old goad.

You are being very silly and showing yourself to be uneducated and ignorant.