Re: Your suggestions for the economy / public fincances : Wed Feb 27, 2013 10:12 am  

sally cinnamon wrote: The cost of renting in the UK is higher than in Germany ...The claimant just gets to live there but they could probably live in a better quality house in Germany at lower cost to the German taxpayer. Except, it's not. For one thing, the housing markets in the two countries are not especially comparable, eg the Germans' propensity to rent rather than buy; for another, there are huge variations in rent levels from the big metropolitan areas to the rest of the country, even very large conurbations. There are various factors at play and the proposition isn't made out. An article in the Guardian in 2011 suggested German rents were overall cheaper. I'd say "it just depends", and that there is no point of general application.

sally cinnamon wrote: The cost of renting in the UK is higher than in Germany ...The claimant just gets to live there but they could probably live in a better quality house in Germany at lower cost to the German taxpayer. Except, it's not. For one thing, the housing markets in the two countries are not especially comparable, eg the Germans' propensity to rent rather than buy; for another, there are huge variations in rent levels from the big metropolitan areas to the rest of the country, even very large conurbations. There are various factors at play and the proposition isn't made out. An article in the Guardian in 2011 suggested German rents were overall cheaper. I'd say "it just depends", and that there is no point of general application.

Re: Your suggestions for the economy / public fincances : Wed Feb 27, 2013 10:12 am  

The Video Ref wrote:

A benefits cap. I have just had a conversation with a German doctor who simply cannot get his head round how generous the UK benefits system is.

It is perverse that there are a substantial amount of people who do not work, have no intention of working, and are still financially better off than many people who work full-time.

We could set it at a figure of, say, around £25,000 p/a.

It must be true because all the papers are full of those stories aren't they

Tell you what, why don't you and your German Doctor friend talk to some real people on real benefits, not the made up ones in the Sun & Daily Mail.

Re: Your suggestions for the economy / public fincances : Wed Feb 27, 2013 11:01 am  

I offer this, it could work alongside what's already been suggested, or as a stand-alone measure, it is quite draconian, and would probably never happen, but would return money to the public purse and boost the economy:-

Renationalise the services that the evil Thatcher sold off for profit in her term in office.

Thoughts?

Re: Your suggestions for the economy / public fincances : Wed Feb 27, 2013 11:05 am  

Ferocious Aardvark wrote: Except, it's not. For one thing, the housing markets in the two countries are not especially comparable, eg the Germans' propensity to rent rather than buy; for another, there are huge variations in rent levels from the big metropolitan areas to the rest of the country, even very large conurbations. There are various factors at play and the proposition isn't made out. An article in the Guardian in 2011 suggested German rents were overall cheaper. I'd say "it just depends", and that there is no point of general application. Germany also has a system of rent capping, which we do not. This is primarily designed to prevent landlords hiking rents for people on lower incomes.

Ferocious Aardvark wrote: Except, it's not. For one thing, the housing markets in the two countries are not especially comparable, eg the Germans' propensity to rent rather than buy; for another, there are huge variations in rent levels from the big metropolitan areas to the rest of the country, even very large conurbations. There are various factors at play and the proposition isn't made out. An article in the Guardian in 2011 suggested German rents were overall cheaper. I'd say "it just depends", and that there is no point of general application. Germany also has a system of rent capping, which we do not. This is primarily designed to prevent landlords hiking rents for people on lower incomes.

Re: Your suggestions for the economy / public fincances : Wed Feb 27, 2013 11:29 am  

The problem we have is that, just as this country has developed its systems and mindset over many years, the problems that have developed will also take years to sort. Unfortunately, people tend to demand a quick fix to things, when it's impossible. Not only do changes have to be phased in, but it will also take a long time to change peoples' mindsets.

Take smoking as an example. 25 years ago, people smoked in front of kids, in public places and it wasn't deemed a massive problem. It's only a prolonged campaign, and gradual withdrawal of advertising that has got us to where we are now. And it will take another 25 years to get to the 'ideal' stage.

So of course, the first problem is that a government gets five years. It's not enough. The smoking issue is one that both major parties agree on, so it's implementation has worked and both parties have persevered with it. Sadly that can't be the way with everything, where fundamental disagreements fuel an attitude (to some) of digging your heels in when the party you don't like suggests something.

Dally's idea of having a maximum sized branch chain of 25 is, on the surface unrealistic. But it's not quite as ridiculous as it sounds. Most large brands in the USA (and we know they're far from perfect, so lets not get into that) are franchised, rather than corporate owned. So whilst you get a big nationwide brand, when you walk into an outlet, you're in many cases dealing with that shop's owner or people directly employed by that person.

The concept of 'master franchising' - having chains within a chain is quite common - most Subway outlets in the UK, for instance, are either owned individually, or part of a chain of between 10 and 20 outlets. The letting agent, Belvoir, is going the same way. Why can't high street chains or even your large supermarkets operate in a similar way? There will be area managers up and down the country who would jump at the chance to be a part of things like that, and if one franchise fails, at least it doesn't put the other parts of the 'chain' at risk.

I often wonder if, say, HMV operated that way it might not have failed en masse, as you will get the individual entrepreneurs at the head of each part coming up with different ideas that they wouldn't be prevented from implementing (plus implementation will come at a lower cost, because they have fewer outlets, and can then be adopted as official policy by head office, to be rolled out amongst everyone else). Secondly, every outlet wouldn't have been in deficit, so at least the profitable ones would have remained. As it was, the entire group was put under strain by the weakest performers, which killed the entire business.

On another note, I don't think removing benefits or adding more tax will do much to encourage or discourage certain types of behaviour. Only education will do that over a long period of time. You have to start with the kids, so that they grow up with attitudes that are alien to most of their parents. Easier said than done, I accept.

I don't think that it's a good idea to tax everyone to death. The only way the economy will grow is when there is money available to be spent in it, and it follows that the more money that goes to the government, is money that cannot be spent in shops or online.

This is by no means everything, but why not start here...?

- Stamp Duty. Currently paid ONLY by the buyer, and only on purchases more than £125k. This has killed the £125-£150k market, and also the £250-£300k market where it jumps to 3%. My view is that all buyers and all sellers should pay stamp duty at 0.5% of transaction value, no matter that the price. It's an affordable level, that way, and everyone pays something.

- Tax. Get rid of tax codes, and introduce a very simple sliding scale. If you earn X, you pay X. The onus should also be on the employee to make payment, not the employer. It cannot in this day and age be too difficult to compel employers to calculate wages online, which sends relevant info to HMRC, who then take the employee's tax by direct debit FROM the employee a set amount of time afterwards. Again, this is as much about instilling responsibility in the general public, and making people take responsibility for their own affairs.

- National Insurance. As above, however the employer should still make their contribution as they do now. A concession should be offered, in that a rebate should be available to the employer if they take on an apprentice, or young staff member who receives some kind of formal training.

There's loads I could go into, but I'll let you shoot the above down first

Re: Your suggestions for the economy / public fincances : Wed Feb 27, 2013 12:20 pm  

Allied to my idea of annual taxes on second homes, capital gains tax on them should be scrapped. The two measures together would free up loads of property and cut prices (although the banking system probably wouyldn't withstand that at present). A big problem with CGT is that long-term landlords just hold onto their property until they die to avoid the CGT hit on sale.

Re: Your suggestions for the economy / public fincances : Wed Feb 27, 2013 2:24 pm  

Dally wrote:

Do you want to swap some action figures? I'll see if any of the local kids have any going spare and will PM you.

I don't own any ta.
I do find you fascination with them a concern however.

[DaveO]

Re: Your suggestions for the economy / public fincances : Wed Feb 27, 2013 3:22 pm  

ROBINSON wrote:

Take smoking as an example. 25 years ago, people smoked in front of kids, in public places and it wasn't deemed a massive problem. It's only a prolonged campaign, and gradual withdrawal of advertising that has got us to where we are now. And it will take another 25 years to get to the 'ideal' stage.

So of course, the first problem is that a government gets five years. It's not enough. The smoking issue is one that both major parties agree on, so it's implementation has worked and both parties have persevered with it. Sadly that can't be the way with everything, where fundamental disagreements fuel an attitude (to some) of digging your heels in when the party you don't like suggests something.

I would argue the biggest change in the attitude to smoking was brought about by legislation. That is the ban on smoking in public places. Prior to that all the advertising bans and so on didn't do a great deal to stop smoking. Restaurants, pubs and even offices were cloudy places to be despite the hands off approach which basically just said smoking is bad for you. I grew up with both parents smoking. My Mum for all of her 89 years and my Dad for some of his 85 and when I started work there was no need for the smokers to leave the office for a drag. The biggest change I have noticed in smoking is as a direct result of legislation.

So if you are putting the history of smoking in this country forward as a kind of example where education results in a gradual change for the better I think you have instead highlighted the fact that to really make a difference quickly the game changer was legislation not education.

- Tax. Get rid of tax codes, and introduce a very simple sliding scale. If you earn X, you pay X. The onus should also be on the employee to make payment, not the employer. It cannot in this day and age be too difficult to compel employers to calculate wages online, which sends relevant info to HMRC, who then take the employee's tax by direct debit FROM the employee a set amount of time afterwards. Again, this is as much about instilling responsibility in the general public, and making people take responsibility for their own affairs.

- National Insurance. As above, however the employer should still make their contribution as they do now. A concession should be offered, in that a rebate should be available to the employer if they take on an apprentice, or young staff member who receives some kind of formal training.

The idea tax an NI should be collected from the employee via direct debit is ludicrously impractical. That is tens of millions of direct debit mandates HMRC would have to keep up to date instead of dealing with the (far fewer) employers making single payments to HMRC. God knows how it would work with an increasingly casual based workforce as well.

In fact what we want is an extension of P.A.Y.E to everyone. It's quite clear whenever possible people who don't receive their salary through P.A.Y.E are as quick to spot their own mini tax avoidance schemes as anyone who has been vilified for doing this on a large scale such as Jimmy Carr.

P.A.Y.E and the resulting P60 is also how the government judges your entitlement to things like the level of University Maintenance loan your kids can apply for (just one example of many). I know people who were outside of of P.A.Y.E who were not rich by any means who still managed to create a picture of virtually no tax paid so their kid even got a grant never mind a loan and tuition fees paid. Outside of P.A.Y.E it is far too easy to hide income from the tax man. I am sure tax avoidance would go through the roof if what you suggest was implemented.

Also getting rid of tax codes is also impractical. What does a sliding scale mean? It is just in effect many more tax codes! I am sure you know the amount of tax paid by an employee in any one month is based on their total income to date in the tax year and that the amount of tax is basically read off income tax tables for a particular tax code.

That means unless you have a basis for the employees tax liability (their tax code) you can't construct the tax tables. The only thing you could do is collect all the tax in one go at the end of the tax year when you knew the employees full tax liability. That would starve the government of tax revenue during the year. Taking some tax off employees as the year progresses with a view to sorting it out at the end when the correct liability was known would be a nightmare as well.

Finally your comment about not taxing people to death. Our tax rates are some of the lowest around already. The problem is we don't manage to collect it all from both individuals and companies. If we did we might not have such a great big bloody whole in the public finances. So instead of strange schemes such as those you suggest I'd say devoting effort to plugging the tax gap would go a long way to sorting the public finances out.

Re: Your suggestions for the economy / public fincances : Wed Feb 27, 2013 4:55 pm  

A greater emphasis in turning raw materials into finished products and the technology that supports it - in a word manufacturing.

Re: Your suggestions for the economy / public fincances : Wed Feb 27, 2013 5:02 pm  

Sal Paradise wrote:

A greater emphasis in turning raw materials into finished products and the technology that supports it - in a word manufacturing.

One major problem with that is the fact we can't do it cheaply enough, hence why a lot of it is done abroad.

My own view is that we need to do a lot more of the things we're good at (designing, engineering, marketing etc) as a lead into making things abroad. In fact that's already happening - most car manufacturers have the R&D departments here, for instance.