To ask what should be being done about the economy and the country generally

[AlertCat]

I’m fairly Keynesian in my economics (I’m not an economist) but there are so many problems in society at the moment that I’m not sure even a massive programme of work like in the 1950s would really help.
There’s another thread where people are expressing unhappiness at the levels of tax they’re being asked to pay and it’s easy to find lots of threads about benefit claimants and immigration.

If we take as given that (a) our birthrate means we need immigration; (b) we have a benefits system that’s both overly punitive and (apparently) overly lenient if you say the right things (I’m not sure I personally believe the second part, but it’s an opinion I see a lot); (c) climate change means more and more people from the global south moving north; (d) the days of good state services, free at the point of use may be over-

what would you do differently to the government? Could we get back to the kind of services provision we had in the post-war consensus era (up until the Thatcher government)? Is that a pipe dream? Is it even desirable?

Are you attempting to imply someone isn’t an EU citizen if they were naturalised and not born in the EU? This is like the people who claim that people with UK passports aren’t “really British” if they weren’t born here. What’s your point? What relevance does it have?

Completely agree with the attractive investment environment and encouragement to take risks and start up small businesses. I listened to a commentator talk about the U.K., we are pretty good at ingenuity but bad at supporting those businesses to scale up. Labour’s policies work against all this.

On infrastructure it’s harder as there’s so much to replace that is old just by virtue of when it was built and that it lasted. Until large scale replacement required.

It's customers in the regions buying goods and services from companies "based" in London that are providing the profits! I'd love to see how well the London firms do if they lost their customers out in the regions.

It's blindingly obvious that if firms close down their regional branches/offices and relocate to London, then London is going to be more prosperous on paper. It certainly doesn't mean that all the profits are actually derived from customers, buying and using services IN London!

I was replying to a previous poster who was posting about immigration, but as the introduction to the article states (and therefore my point/relevance);

'the UK’s membership of the [EU's] freedom of movement was a major driver of immigration to the UK of people born outside of the EU'.

Also, if you read my link, it states that over 400,000 of the 'one million people' not born in the EU who applied to EU Settlement Scheme are non-EEA family members (they do not have EU citizenship). The previous poster mentioned Pakistan - over 61,000 non-EEA family members born in Pakistan applied to the scheme.

It's not exactly at all - you posted that none of the heavily leave voting areas were making a net contribution to the UK economy. Clearly, as a region, the East of England were making a net contribution as shown in the chart in my link (2018/19);

https://commonslibrary.parliament.uk/research-briefings/cbp-8027/

And what about how the regional data is skewed, i.e. by places like London shipping out "problem" people like irregular immigrants, newly released prisoners, etc out to the regions, where they become a "net drain" on resources in terms of having to be homed, receiving benefits, causing crime and social problems, etc. It's not really "fair" to the regions to be criticised for having to look after such people who have literally been "bussed in" to their areas from London and the SE!

tbf, London also exports its nicely-behaved old people, there are retirement-by-the-sea London-housing-association-owned communities, to get older adults out of London social housing & make space for younger adults.

And then there are the Londoners who can't afford to stay in London once they have a family ... basically London exports a lot of different types of people.

You managed to find one example of a Leave voting area that made a net contribution 65% of the time in the last 20 years (13/20). Other than that the best you could find was one that you stated made a net contribution 10% of the time (2/20). Hardly convincing that my point was wrong. And none of this factors in either the EU development grants which was another net redistribution to these areas (the EU contributions being paid, by definition, by the areas that are making a net contribution then being spent on areas that were not).

It’s also worth noting that the redistribution in the UK has significantly ramped up in recent years, with tax cuts for lower earners overall and much higher taxes for higher earners, proportionately. Therefore the tax system now is even more heavily redistributive than previously and this approach has been taken pretty much as far as it can go as it is now having a significant negative economic effect and reducing overall tax revenue. Hence what I said that the only solution is to increase productivity as that is the only way to raise living standards for everyone, without simply generating inflation or reducing output further.

True, but that would be (and is) the same if the companies they purchase goods or services from were headquartered in other countries. Purchasing products/ services is not productivity, productivity is about output and value generated per hour of work.

Of course it was “a major driver” of immigration to the UK. Very beneficial immigration: short term (i.e. people on the whole turned up as fully educated adults and left before becoming expensive old people) and on average they were more highly qualified than UK nationals, filled skills shortages, used public services less, were more likely to start businesses and generate employment and productivity gains, and on average were net contributors to tax revenues. The immigration from elsewhere in the world - again on average - is the opposite on every one of those indicators (both before and after Brexit). Leaving the EU so that we would deter all of the economically beneficial immigration and have to fill the gap with extremely costly immigration from elsewhere seems rather idiotic, to put it politely.

I think we have to stop using nonsense economic thinking developed by a bunch of men who never for a second considered the need for care, of children or of the elderly - they just expected women to do that for free.

We need new economic thinking that includes the entire population, based around what we really need. That would be a great start.

Agreed. So there needs to be much better support for young families. And a proper system in place so that everyone (except the very severely disabled who can never work) to save for and fund their retirements, pensions and healthcare when elderly. And productivity increases to make this possible i.e. huge refocusing of public spending on education and infrastructure, and removal off the cliff edges in the tax system.

It’s really not that hard to do if anybody had the will to make decisions that might be unpopular in the short term rather than acting out of total self-interest based on the prospects of re-election and pandering to economically illiterate rhetoric from idiot populists who will make things ten times worse.

A politician with a spine would speak the uncomfortable truths, set out a vision for the future that isn’t self-contradictory and incoherent. In fact if they had any decency or regard for the living standards and wellbeing of the population they’d be agreeing these plans as a long-term commitment across party lines, as happens in other countries.

I suppose it is true that people get the Governments they (as a nation) deserve. They are getting exactly what they voted for. It’s just rather lamentable for those who didn’t support this, no matter what colour of rosette the incompetence is cloaked in.

I have finally RTFT after a couple of busy days of no time for MN. These are my thoughts:

There are far too many different taxes, reliefs and benefits that create thousands of jobs for civil servants and a bureaucracy that our taxes have to pay for. I would simplify it all including:

Abolish NI (for employers and employees) but raise income tax to compensate.

Reduce Corporation Tax on trading businesses to incentivise business growth. (Scrap the ridiculous R&D reliefs and other complex reliefs that just keep accountants in business).

Apply a compulsory formula to ensure the highest and lowest paid in any company (or group) are within certain limits to reduce the earnings gap and create more incentives for company share schemes to share the profits.

Income tax to be applied to all sources of income (earned and unearned) under a much simplified system with many fewer reliefs and exemptions.

Tax free personal allowance equal to minimum or living wage (so only earnings over £x per hour are taxed).If you only work 30 hours a week, the allowance is reduced accordingly to ensure working full-time is incentivised.

These combined changes would reduce both the burden on employers and the burden of HMRC administration.

To reduce the benefits bill I would:

Increase the personal allowance for those with children and abolish child benefit.

Abolish working tax credits and raise minimum wage to compensate.

Set an earnings limit (or private pension fund equivalent to stop abuse) in the region of £50,000 for receipt of state pension. Anyone with high income in retirement really doesn’t need it and will be filing a tax return anyway. Once NI is abolished it becomes less of an issue and the limit can stagnate over time until it comes down to a minimum level as most should by then have sufficient private pension.

Have one single benefit – e.g. set a universal basic income (at an absolute minimum level) per person, for those that can’t work (sick or disabled), wont work or are seeking work. Transparent and clear to all, no variations, no extras, everyone gets the same regardless of other household income, disabilities, etc.

Benefit claimants to be able to voluntarily complete approved or supervised useful community work to earn extra cash benefits (at a lower hourly rate than minimum wage). This work could be inclusive WFH or local charity type projects with assistance provided, so there are incentives to contribute something without the long-term/daily commitment. This could improve mental health and help many of the unemployed/disabled/sick make a useful contribution to society and may even help them into paid work.

Offer better designed re-training programmes with the help of employers and incentivise employers to take on those seeking work. Many apprenticeships are being exploited for cheap labour so these also need reviewing.

Overhaul the NHS and move to a German/French/Australian system of compulsory health insurance for all, with a safety net for those who can’t pay. The insurance premiums should include cover for residential medical care in later life. These insurance premiums should be tax deductible.

Raise taxes (VAT) on unhealthy foods (fast food, high sugar and salt content etc) and generally encourage a move to healthier diets.

End right to buy and build/rent more council houses. Back in the early 1970s some local councils leased properties to let to council tenants – this option could be brought back. It guaranteed the landlord a long-term arrangement without any rental gaps or concern over repairs; the council was responsible for the tenant, the repairs and maintenance etc and paid a set annual rental to the landlord.

All new residential developments should include solar and wind power as a minimum. Over a certain size they should also include a compulsory high percentage of small single-storey units with gardens and paved walkways suitable for the increasing elderly and disabled population alongside extensive community facilities (e.g. village hall, childcare, pharmacy, walk-in clinic etc). Developers make huge profits on greenfield sites so this shouldn’t cost the taxpayer anything.

Much improved school options across all ages to include more SEN schools, reduced class sizes etc. Return to a three school system of smaller junior, middle and high schools. The range of high schools at age 14 should include a choice of academic schools and technical schools covering different options alongside the core subjects, as well as SEN schools. Parents and children should be able (with teacher guidance) to choose between schools with different specialisms that suit the individual child.

Students with the top A level grades entering medicine, teaching, engineering or other useful degrees should have their student loans written off over a period of years after a minimum of 5 years of working in their chosen field in the UK.

Students that don’t have top grades should be provided with technical training that doesn’t require a degree. Student loans should be provided and again, any courses that lead to careers where there is a shortage of job seekers should be written off over a period of years after a 5 year minimum in the job.

Rejoin the EU.

An extensive list and I could go on and on!

InPraiseOfIdleness
You managed to find one example of a Leave voting area that made a net contribution 65% of the time in the last 20 years (13/20)

There were only 12 regions in the chart and 3 regions voted remain in any case. A few more were not 'heavily leave voting areas.' You posted that none of the heavily leave voting areas were making a net contribution to the UK economy.

Of course it was “a major driver” of immigration to the UK
The immigration from elsewhere in the world - again on average - is the opposite on every one of those indicators

I don't think you have understood my post or the article at all, not to mention that the headline in the article has the word 'surprising' in it.

How did paying more tax work in the 60s/ 70s

97.5% tax on the richest people who then left the country which meant even my measly wage as a 16 year old was taxed at 33% basic rate tax

You agree that an aging population is a strain on society, which is why I think my suggestion of paying more to the pensioners who choose to leave the country and live outside the UK, freeing up not only money that the NHS would have spent on their various illnesses, operations and care plus also freeing up housing through either the sale of their property or them renting it out for extra income.

It might not be something a lot of pensioners would choose but for everyone that does that is one home less that Angela would need to build and 1 less older person that the NHS need to worry about

The problem with a lot of this, is that we could have made good progress to fix the issues from a position of relative comfort, but we squandered the opportunity.

Take the issue of climate change. Man made climate change was seen as open for debate rather than a phenomenon to tackle strategically, because the effects on our lives were less evident in the time of the coalition government led by Cameron.

In those times we had an opportunity to invest in future proofing infrastructure, but led by an ignorant electorate, they did not. Instead, they brought in austerity. Absolutely the wrong decision at a pivotal time.

Now that climate change is impacting food prices, migration, water, etc, having to tackle it in real time whilst also strategising to minimise the effects for the future is creating panic. Not just in the electorate but also in the corridors of power. There is also a lot of denial which is counter productive.

I haven’t said high earners need to be taxed more.

All workers need to be taxed more. And - pensioners need to be taxed more too, it is they causing a lot of the cost!

We also need to cut spending.

We can’t just keep asking the top 5-10% of earners to pay more though.

The problem with a lot of these solutions they can only work if people are not allowed to leave the country

A lot of what you state hasn’t been thought through from the POV of those who are the highest earners and in so doing the loopholes haven’t been thought about.

All well and good saying how great it will be for those on a lesser wage. They aren’t the people who make the decisions.

Once you start limiting people’s income and making sweeping statements about what people need is when those people leave and relocate their companies where they can earn what they want.

Or just get a job in a country where there is no restrictions placed on earnings

Labour tried to penalise companies by raising the amount of NI companies had to pay.

All that happened is more people became unemployed as companies didn’t want to pay the increase
Even the graduates I work with couldn’t find a job because jobs dried up. Most of the students I work with say they wish they hadn’t bothered with a degree.

I am on a zero hours contract and my employment has dried up because I am at the limit of what I can earn before companies have to pay more NI. Instead they have a steady supply of people who will step in, earn what they can then say good bye till next year.
I just wish that governments would stop trying to “help” by penalising companies. IT DOES NOT HELP. It just leaves you with less work and less money and having to turn to UC to manage and that in turn just costs the government more

Whilst I agree that getting rid of the company contributions for NI would help employment. The restrictions in earning for the top people in a company would remove the job altogether

How does this restriction work if the company is not an British company with the top management team not residing in the UK

And I showed what happened when the government put higher taxes on everyone

It didn’t lead to a Utopian UK, it led to 4 million unemployed, no jobs, dead bodies in freezer trucks, sitting by candle light and trains just stopping at a station when the driver got the call that his union had gone on strike and people being left on a station platform in November to figure out how to get to their destination

if you put up taxes on everyone people at the bottom end don’t have the luxury of having that surplus to have extra tax taken and still being able to pay their bills and put food on the table

After paying the inflated taxes I came out with £80 per month. Out of that my rent was £60 and my commute cost £5.04 per week. I had to take on other work to pay my bills. Even then it was difficult to find work as I was under age so bar work wasn’t an option

If taxes were only 20% like now then that extra £17 would have made all the difference between me struggling and not struggling. In the end making me pay that amount of tax meant it was just not worth while me going to work. I went on unemployment and the government paid my rent. I didn’t have to find money for my commute and they paid me £10 per week for the pleasure . It also meant free cinema tickets, free leisure centre and a lot of other free stuff just by flashing my UB40 All for trying to get an extra £17 per month out of me that I couldn’t afford.

You are overreacting.

A penny on the base rate wouldn’t have that impact.

We can’t have half the population not paying tax while having huge expectations on provision of services.

This ^

Problem is what services or goods can be offered to society.

most people want to be paid ££

most people dont want to pay ££ unless its necessary

yet how to you keep society going when you have better technology etc

overall theres only so many goods and services that can be produced etc but then when you have cheap imports etc overall

and when businesses want to pay wages as little as possible ?

how can you keep society turning because at some point the system can only go so far @AlertCat

bottom line capitalism is not suited for modern society if you want to pay everyone what their roles should be worth rather than actual paid

Voluntary euthanasia would massively reduce care needs and draw down of state resources and immigration requirements.

And that @EggnogNoggin is precisely why I don't support the assisted dying legislation.

I agree with this, I think we are moving (have moved?) into a new feudal age with the massive discrepancy in wealth, and as you say jobs are not paid in line with their value to society but value to shareholders. As the minimum wage rises and ‘middle incomes’ stagnate, soon we will all be clustered at the bottom while a very few take all the wealth.