What should be done about Public Sector pay?

Primrose65
I will save your post @00.20, I feel that it might come in handy at some time in the future

I've noticed that Jalima and I have no idea why!

He is often quoted on here though, Primrose

Economists never agree anyway.

That's what I thought Maizie. He's not credible. There are no credible economists who agree with him. You can't name one.

Selling me to research theories is not backing up your assertation!

Correction. It's Monetary theory, not Monetarist.

Researching private sector secretarial jobs in my area brings dozens of so called apprentices and minimum wage positions Eloethan so maybe a case of where the jobs are.

As a life longer Labour voter and a small business owner of some 25 years I, (and many like me) feel very let down by all political parties and successive governments Eloethan . JC only ever talks about "his" public sector, their pay, their conditions, poor nurses, teachers etc. and he says or does nothing at all to give small businesses such as mine any confidence in a government under his leadership. Added to that his plans on raising the minimum wage for everyone including trainees, and older apprentices is very worrying .

Try researching Modern Monetarist Theory, Primroses.
And I might point out that McDonnell isn't an economist either.

gillybob You seem to be very angry about the Labour Party and Corbyn but it is the Conservatives who have been in power for the last 7 years. Surely they bear some responsibility for the difficulties your business is experiencing?

I have worked in the public sector and private sector - in psychiatric and general hospitals and the technical services, housing and legal departments of local councils. However, I have mostly worked in the private sector, mainly because, working as a secretary, the pay was much better there. In the last few years of my working life I spent three years re-training as an adult literacy teacher. I enjoyed teaching, received good reports and really liked the students but the amount of work involved for the money I received was unsustainable and after 2 years I returned to legal work.

My husband had a very demanding job in the public sector, which involved responsibility for a large number of staff and service users. Although he received a good salary, it was in no way commensurate with what he would have received in the private sector. My son, who is 38, who works in the private sector, is already earning more than my husband was earning on retirement.

As I have often said, if public sector jobs like nursing, social work, teaching, etc., are such a doddle and pay so brilliantly, why can these sectors not retain their staff?

Then they're contradicting the tax receipts published by HMRC.
John McDonnell disagrees with him too.

In a response to a question raised in the House of Commons, Labour's Shadow Chancellor John McDonnell stated with regard to Murphy "He is not the economic adviser and never has been, because we doubted his judgment, unfortunately. He is a tax accountant, not an adviser. He is actually excellent on tax evasion and tax avoidance, but he leaves a lot to be desired on macroeconomic policy"

That's from his wiki page.

Which economists agree with him?

Richard Murphy is not credible. He's been criticised by the IFS and quite a few others.

Have you considered that the IFS is not credible?

There are many 'credible' economists who think the same way that Murphy does. Criticism doesn't make one automatically 'wrong'.

I'm sure there might be plenty of incentives, gillybob but clearly corporate tax rates wouldn't be one of them if they were prepared to move to a higher tax regime.

However, I suspect that they'd take their manufacturing to a lower tax country than France. Their reason won't be the prospect of higher corporate tax; it'll be Brexit. And if the increased costs of Brexit aren't cancelled out by higher productivity they'll be off like a shot.

Sorry, but that's just wrong. It's not independent evidence.
The article in the FT shows the numbers - cutting corporation tax has increased revenues.
Richard Murphy is not credible. He's been criticised by the IFS and quite a few others. Take a look at his wiki page,

"Jeremy Corbyn has said he will increase corporation tax from its current 19% for all companies to 21% for small companies and 26% for larger companies if Labour wins the election. Let’s leave probabilities aside and discuss the merits of this idea.

The logic of both proposals is sound. For small companies the case is that it makes no sense at all to have a corporation tax rate below the basic rate of income tax: all that becomes is a blatant invitation to avoid tax. This abuse is already costing up to £4 billion a year according to the Office for Budget Responsibility: I suspect it may be more when the full national insurance impact is taken into account. In that case the 21% rate is almost certainly too low: I would have gone higher to beat abuse and win back more of the lost billions, which is exactly what is required.

Dealing with larger companies (of which there are vastly fewer) the situation is more complex. First, 26% is not high: it is close to the EU and OECD averages when adjusted for our current low rate.

Second, it’s not that long ago we had these rates.

Third, there is no evidence at all that cutting the rate has brought jobs, growth or new corporation tax revenues to the UK (the rise in revenues is very largely because of the rise in the number of small companies and broad based recovery in profits from banking and elsewhere and not because of new inward investment driven by tax).

Fourth, we know that business itself did not lobby for the low corporation tax rates now on offer.

Fifth, we know business says tax is low in its considerations when real business is being relocated as opposed to profits being relocated – which is the type of abusive activity Ireland attracts and which has rendered its national accounting meaningless because so much of its GDP is profits simply flowing through the place leaving almost not a trace bar some fees for bankers, lawyers and accountants on the way.

Sixth, and most important, I argue low tax rates and low capital allowance rates are counter productive and rarely help anyone but banks. This needs explaining.

Right now, and I summarise, with a corporation tax rate of 19% and a 20% allowance on capital spending a year a large company in the year that spends £100 on capital equipment gets a cash rebate of £100 x 19% x 20% = £3.80 in the year it spends the money. Tory plans to reduce the corporation tax rate to 17% reduce this to £3.40. That, to be candid, provides no incentive for investing at all. This is a tax system for rentiers and bankers. It does nothing at all to encourage any activity in the real economy where people work and value is created.

Now change the tax rate to 26% and offer 100% first year allowances and the allowance is worth £26, or near enough seven times more.

This will encourage investment.

That will create growth.

The investment will increase productivity.

That increases wages.

And growth, again.

And so future tax revenues as a result.

In other words, increasing the corporation tax rate kickstarts the economy in a way that a corporation tax cut can’t. And it pays for itself.

So Corbyn has a plan that firstly beats avoidance, second raises revenue, thirdly can encourage investment and fourthly delivers growth. None of those come from the Tory plan.

On this occasion he is onto a winner.

And he’s the one talking economic sense.

Give it two years and it will be a Tory plan. But right now they’ll just ridicule it. Which will be a loss to us all.

Finally, let’s talk education. I may be biased, but UK universities provide us with a real competitive advantage and a massive rate of return in terms of relative skills. Redirecting money to this sector whilst leaving those departing it debt free (or with reduced debt) would create a big economic stimulus.

Corbyn has a policy that is coherent in that case from beginning to end. And it is appropriate I say so."

From www.taxresearch.org.uk

Can't read FT links.
However, what it shows is that companies are paying their corporation tax these days rather than trying to avoid it.

www.ft.com/content/ca3e5bd2-2a7e-11e7-9ec8-168383da43b7

It's working well. FT April 2017
UK corporation tax receipts surged to a record high during the past financial year despite the main rate falling from 30 per cent in 2008 to 19 per cent today.
Official public finance data, published on Tuesday, found the UK government had raised £56bn from corporation tax during the 2016-17 financial year, a 21 per cent increase from the previous year.

We are already the lowest in the G20 and supposedly going lower by 2020/21.
It is obviously not encouraging them to stay here if you already know companies moving, so corporation tax is not the pull factor that the Tories think it is.

Oh, I see. It depends if the firm was running a scheme into which they and the firm paid. It would in all probably not be a final salary scheme anywy.

I am confident there would be plenty of incentives for them to do so MazieD although admittedly the productivity would probably dwindle.

I know a few large volume manufacturers who are already moving some of their production lines out of the UK . Surely we should be lowering corporation taxes to encourage them to stay here.

At least RBS are classified as public sector, which is something I didn't know until I looked at this

www.ons.gov.uk/employmentandlabourmarket/peopleinwork/publicsectorpersonnel/bulletins/publicsectoremployment/mar2017

1974 cookie-there are LOADS of us who are so grateful you went into nursing. My dear sister was a nurse and endured the same as you. It truly is a vocation but you should not be taken for granted as you are.
DH has had a lot of health problems this year and we have really appreciated all medical staff-THANK YOU.
I realise that doesn't pay your bills though and you should be remunerated properly.

. Does he want to see Nissan move to France (I am confident Renault would be happy to move as soon as possible) and other big manufacturers would be hot on their heels.

As France has a corporate tax rate of 33% I think it's highly unlikely.

Though,of course, Brexit may have other disadvantages which would cause Nissan to move out of the UK.

Actually, Jalima, I was asking about pay, not pensions.
If G4S employees are counted as public sector pay, they will have to have paid into pensions all their working lives. If they are counted as private, they will not have been paying superannuation, but might or might not have taken out private pensions.
So the money they have left after deductions could be different.

The boss of G4S got £4.8 million in pay and bonuses.
I bet that brought the average up in the company.

Not one of the top ten, though gillybob.