The Tory way of governance

Exactly, Fitzy. The whole idea is for the money to find its way into the real economy, rather than be invested (very often offshore) by bankers and the people they choose to lend to.

Richard Murphy only ever suggested it could be a solution if the UK hits a period of sustained deflation. There were two quarters in 2015(?) when that's what the UK had.

The trouble with deflation is that people tend to hang on to their money if they can and avoid unnecessary purchases, because they hope prices will drop. That leads to low demand and job losses and further drop in demand...and so it goes on.

Controlled inflation isn't a bad thing, as it encourages people to spend money. That's also one of the reasons why interest rates are being kept low. The idea is to discourage saving. One of the problems with low interest rates is that it's encouraging people with money to buy investment property, which is increasing the gap between those with assets and those without.

All of this has been affected by the fall in the pound and who knows what other repercussions from leaving the EU and American protectionism.

One way or other, we're in for a rocky ride, but I do think there needs to be protection for the poorest and most vulnerable, because they're going to suffer most.

The point is they are continuing with austerity. By 2020 the poorest will see a fall of their income of 16% but the richest a rise of at least 4%. They claim that the reason for continued austerity is that we are spending more than we earn in tax. But grow the economy and tax the very wealthy to ensure greater fairness rather than continue with cuts and austerity, and we would see a rise in tax receipts and a closure of the gap.

The trouble is with traditional QE is that money doesn't get to where it's needed most and where it can do most good in improving infrastructure and creating jobs. It goes to the people the banks think are the safest risk.

Grow the economy by investing in our infrastructure - new hospitals, schools roads etc.

Correction whitewave. Austerity is continuing for the least wealthy. The UK has never operated true austerity, which would also have affected the wealthiest.

...and council houses.

I am enjoying reading your posts but nothing is simple is it Fitzy? I agree that working in the gig economy is not much fun but it will also cost us in the long-run. It is not just those working in a warehouse though, its others who will be able to command much more money now they have realised what is happening. The country isn't benefiting from this nor is it benefiting from the current use of platform economy set-ups. People will rebel against being used and excluded from previously hard won benefits.

I can already see the changes in some areas of teaching. This is leading to burn-out among 'salaried' staff and the very flexibility that college managers were looking for being used by those they need so they are finding they do not have people to fill the posts and those that will work in these jobs only do what the new job descriptions (paying less) ask of them heaping more work on salaried staff. Of course, some may not feel education of our whole population matters, but for the sake of the economy and for all of us it probably does.

This may be the way to go perhaps we will all run ourselves as Fitzy Ltd or GracesGran Ltd but I think those employing any of us will then find they have lost the choices the unrecognised flexibility the original salaried staff gave them.

Rather than just legislation catching up someone just has to think about where we are going and realise they cannot do everything on the backs of the workers while those living on capital get richer - it only works for so long.

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Can we affect this?

It won't just be Tesco though Jen. With the government already subsidising so many employers in this way I would ask if we are really seeing the economy we have described to us.

WW we are growing the economy and we are taxing the very rich. Some financial stimulation probably is a good idea, but leaving that aside for a moment, what sort of increase in taxes, and who (how rich?) did you have in mind?

There aren't enough super rich around to make much difference to money coming in through taxation, and as Fitzy says they are already being taxed.

fitz well I would like to see a more even distribution across the income scale, simply because it is fairer. But I really don't expect it to contribute to the gap. What I do think would help is government investment - money in incredibly cheap - in all sorts of infrastructure projects in order to grow the economy. Tax receipts will then close the gap, and austerity cuts would not be so necessary.

Of course it also very much depends on ones attitude to state intervention and the size of the state. Which I think is the crux of the matter and this governments real intention.

No, we're not. The UK has low productivity. The classic way for managers to deal with that is to make redundancies and try to get people to work harder and/or more effectively. There is a real threat in the next few years technology will cause even more unemployment. There's also a real threat that the government will try to turn the UK into a tax haven post-Brexit, which will also mean less money spent on public services. It's going to be the industrial revolution all over again. I'm really wondering how much people will tolerate.

daph especially if the poor has no representation in parliament. The boundary changes are a real challenge to democracy in this country.

roses That's nonsense. £8 billion could be saved by abolishing higher rate tax relief on pension contributions. There is also the question of charging pensioners for NI. And that's just for starters. The tax gap, caused by offshore investment runs into billions. The price for not taxing the people who could pay is to have millions of people at the bottom living in real poverty.

Fitzy As we've discussed before, growing the economy doesn't matter if the wealth doesn't get into people's pockets - and it isn't. GDP is a red herring. We really don't tax the super wealthy enough.

whitewave It's not just income - the real problem is wealth. A person can make more from owning a London property from price inflation than most people can make from working. The UK has one of the most uneven distributions of wealth in the world and wealth is undertaxed compared with most Western European countries. It only gets worse from one generation to the next.

I can't see that charging pensioners NI would ever be a 'goer' , chasing offshore investments is something that up to now has not been done by any Government,
And abolishing the higher rate tax relief on pension contributions would not be favoured either ( a vote loser.)

It wouldn't lose my vote, roses.

Here's one way to make tax dodgers play fair.

www.theguardian.com/sustainable-business/2017/feb/08/corporate-tax-dodgers-evasion-avoidance-local-councils-public-procurement-purchasing-power-paul-monaghan

fairtaxmark.net/breakthrough/

Is your council signed up to the fair tax mark?

roses Abolishing higher rate tax relief on pension contributions would only lose the votes from the people who pay it. Only a minority pay it, although they skew average (mean) income figures. Anyway, I thought you believed in democracy, so surely the majority (who don't pay it) should have their way. Do you really believe that the richest should be subsidised by the government more than the poorest?

Being a vote loser doesn't make something wrong! The point is that it's possible, if there's a will.

Maybe it's time for a revolution, after all! I'll get my knitting ready and practise being a 'tricoteuse'!

Why wouldn't charging pensioners a reduced NI be a 'goer'? They're in the minority, so the majority would gain? Seems fair to me!

Well, there are a lot of points here! I'll have a crack at a few at least.
WW - I really can't get along with any idea of taxing anyone unless there is a truly significant benefit for the country as a whole. If it doesn't put a serious dent in the tax gap, I wouldn't support it. The money which the wealthy have is, after all, their money.
In terms of investment, I see the argument, but it could very easily get completely out of control. I don't have a great deal of confidence that the right choices (how much, which projects etc) would be made.
DD - when you quote £8bn saved through limiting pension tax relief to the basic rate, does this figure take into account that the pension on the way out should then will only attract basic rate tax, even if over the higher rate threshold? That would, in the long run, reduce the saving. The affect of pension tax relief is reducing anyway as a consequence of the caps on contributions by higher earners.
More generally, GDP isnt red herring. I agree it isn't the end of the story but historically it does seem to give a fair indication of how much we can collect in taxes, whatever taxes or rates may apply.

Fitzy, do you really think it fair that a top CEO earns more in a day that many people working for him earn in a year?
How many more hours work can that CEO put in to be given what he is?

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