"Right so do the thing which is most effective in behaviour modification. Which is to say "that was very naughty" not "you are very naughty". A very small change in wording but it has a lot significance for the child".
If my children were naughty I had no problem whatsoever in them knowing they were naughty - erm...because they were!
"Would you call a child thick or stupid? No. or fat or ugly... What is the difference?"
Big difference. And my children are not thick, stupid, fat or ugly. And if they were they could change from being naughty, as that is a decision they make for themselves, but they'd always be thick, stupid or ugly!