Where Would We Be Now If Brown Had Won Last May?

[Chil1234]

Genuine question. Pre-election, the Labour manifesto pledges on budget management were very similar to the ones on offer from the other parties. Darling, in a speech not long after the election, seemed to be very much a 'deficit believer' and criticised Brown for failing to tackle the subject head on, instead getting sidetracked into a debate between investment and cuts. Would things be fundamentally different now if we still had a Labour government? Better or worse?

dotnet - if an employer believes that someone adds £1m of value to their company annually then they can pay them what they like!

Trust me, that as someone who is only moderately right-wing - that sounds massively over the top lefty to me!

I also agree with the consensus on the thread - we would be up shit creek.
The IMF would be here already, or on the way - at which point all the public sector cuts come in anyway and with the elected government unable to make the decisions without the IMF input.

It is totally naive to say that the cuts would somehow have been 'fairer' under Labour. What would have stayed and what would have gone instead?

abouteve - I imagine the difference is that Niceguy2's employee on £10m pa will not be looking to benefits to meet his living expenses

There wouldn't be many footballers left in the premier division if we had maximum wage legislation. Movie-making would go abroad rather than restrict the amount production companies could pay actors. J K Rowling would have to get her skates on too....or does she count as self-employed? I don't think even the most desperate Labour government would have introduced such a measure.

The rivers would have turned to blood, and we would be plagued with locusts and flying rats

Alternatively, science's dream of low-cost robot butlers for all would finally have been realised

one of those scenarios, deffo

"I wonder if Labour under Gordon Brown would have grasped the nettle of implementing a MAXIMUM wage? Very, very radical and brave it'd be, but possible, surely ?"

Actually I believe Cameron set up a pay commission to look into this area. There are recommendations to have top pay restricted to a multiple of bottom pay, in the public sector. But it's hoped that this will influence private sector pay as well. I think this is widely recognised as an issue across all political parties.

As I posted earlier - the 'redistributive method' (tax and benefits) doesn't appear to result in a more equal society. We have to address pay levels. However, I haven't come across anyone credible suggesting that it's feasible for the state to compel private companies to cap salaries.

JK Rowling doesn't get a salary for her books, she gets a share in the profits from their sale. And footballers' salaries relate to the wealth of their clubs and therefore the amount of profit they are to a certain extent directly responsible for raking in, since fans go to watch the players, not the football club owners.

Dotnet's solution doesn't appear to deal with bonuses and profit sharing and would, therefore, still not level out all inequalities in income, anyway - bankers could still rake in colossal sums by getting huge bonuses each year when times are good, on the basis that they have contributed to the profits, but not having to take on any personal liability for the organisation's losses when times are bad. Footballers could be paid huge bonuses instead of huge salaries... People working in large parts of the public sector wouldn't be able to show their work generated any profit, however important the work that they did.

Interesting to note that the US economy, which is following economic policies similar to what Labour were advocating, is recovering way faster than the British economy, which is actually not 'recovering' at all, judging by last week's figures.

(Although, of course, footballers' salaries don't really relate to their clubs' wealth - the clubs bankrupt themselves to buy in good footballers...).

Not convinced we can compare the US economy with the UK economy since their approach to taxation and spending is very different to ours. They have a much smaller public sector than ours has become - much greater reliance on private industry. No NHS and not much of a welfare state to speak of, for example...and those are two of the UK's biggest spending areas.

Hi Niceguy2,
with respect, I don't think the privaty of contract argument works in the case of bankers salaries and bonuses. Huge salaries and bonuses have hurt others, because it encouraged crazy risk taking that has landed us all in the do-da. Also, as tax-payers money was used to bail banks out, we have a perfect right to expect the Government to intervene on our behalf.
The bankers try to bully everyone into accepting their terms, by saying if we don't get our bonuses we'll take our fabulous skills elsewhere - but these fabulous skills almost bankrupted our Country. Sadly they won't go elsewhere, because bankers bonuses in Britain are the highest in the world.

yes, you're probably right Chil, but their recovery is stronger, regardless of what they spend their money on.

How much you are paid bears no relation to what you are 'worth'. It relates to how much money someone makes from employing you.

If an employee makes £1.1 million for a company it is worth it to that company to pay them £1 million a year. If that made £900,000 then it isn't.

(I'm ignoring fixed costs etc.)

Obviously, the company would RATHER pay them £10,000 a year, but as long as there is another company willing to pay them more, and a limited number of people who can do that job (so the first company can't just get someone else in) then salaries will remain high.

None of this has anything to with the 'worth' of a person.

In short if you want Bankers to be paid less you need to have more bankers - and more Banks so that competition pushes down profits as well.

Thats a very weak argument LemonGrove. Using that same logic, we should control pay for policemen to ensure they are not corrupted by affluent lifestyles.

What the government perhaps should have done with hindsight (which is wonderful) is to let one go bump. To send the message out that no bank is too big to fail. Thats much more preferable and in line with capitalist ethos than controlling salaries.

Abouteve paying someone £1.50 an hour could be argued as exploitation and therefore harms the individual. Therefore the law should intervene. Doubt you can say the same the other way around.

Plus actually I still maintain that in a free society, IF I was happy to work for £1.50 an hour, why should the law prevent me?

The other way round could be called 'obscene'. You shouldn't be allowed to work for £1.50 an hour because it is exploitation. The government should step in either way, if it's good enough to tell outr employers not to increase an average salary by more then 2% etc to beat inflation why isn't it good enough to put ceilings at the upper end.

Just because you think its obscene doesn't mean it should be made illegal. Yours is a personal opinion. I doubt the bankers, entrepreneurs would agree with you.

And i suspect many of them would walk.

"In short if you want Bankers to be paid less you need to have more bankers....."

I think there is definitely something in that. Our banking industry appears to have a massive appetite for top level numerate graduates (often post grads) ideally with a modern languages or two. Once they have some banking experience they can quickly command very good salaries.

Niceguy2 They do get hurt, though. Compare the salary of a chief executive of a big outfit in the care sector with the wages of the people doing the actual looking after of the vulnerable people and it's as plain as the nose on your face that the working people actually doing the job, are being shafted - absurdly undervalued. A bit of redistribution IS called for.

Do you REALLY think there are human gems in our society who are worth remunerating 100 or 50 or 30 or even 20 times more than people on the shopfloor?

Again, it has nothing to do with worth, and everything to do with cost.

"Huge salaries and bonuses have hurt others, because it encouraged crazy risk taking that has landed us all in the do-da."

Lemongrove makes a strong point, and this is well supported by the research that has been done on the effect of large bonuses - it leads to worse performance.

we would have been bust with riots on the streets and people losing their houses daily.

Looking at the facts of what actually happened under certain policies, we can say that the economy would be recovering nicely and better than expected, as this is what was happening before the coalition policies were brought in. Now, we might be wondering what to do with the banks that we own, which would be making a nice profit (as the economy recovered and few people defaulted on their mortgages).

This view is also supported by looking at this on a historical basis and on an international basis, and is supported by many of the leading economists. For example

HH - but Brown rejected Keynes - didn't he? 'No more boom and bust'. He had the economic cycle under his control. So no need to 'save' during the good times to allow 'investment' in the bad. Ok, Brown did discover Keynes again when is suited. But way too late....I bet Keynes is having a chortle wherever he is .

Huge salaries and bonuses don't just encourage risk. They affect the salary that other employees are paid. Any company has a limited salary budget. Paying the top tier millions of pounds in bonuses means that those on the bottom - the cleaners, clerks, etc. get paid less.