First major U-turn

I still think she will be gone next year. She just can’t help overreaching herself, and she will gaffe her way through until she has lost all credibility, then something specific will happen and there will be a coup. I also think there’s more Tory scandal in the cupboard which will make its way into the headlines soon and will discredit the party further.

RichmondPark1 The batty men probably liked the sound of the tax cuts.

www.thetimes.co.uk/article/d3e2fdf6-2f9a-11ed-9b12-7a2e56f7aeb6?shareToken=d8558cdeeb4b0b8fa1d30b57d956b3e7

Tory Donors. See Liz Truss's Dubai lady!

Thanks GrannyGravy13, I understand the theory about attracting talent but I don’t believe that it benefits the poorest in our society. In my experience it does the opposite when all these high earning talented incomers start buying property etc. and pushing up prices. I worked in tech for many years and saw it happen.

I feel like we’re stuck in a time loop. Boom and bust all over again.

GrannyGravy13

Blossoming

Can anybody explain to me how the unrestrained bankers’ bonuses will trickle down to us peasants? I could do with a few bob to cover all the rising prices.

I have read that it is to do with the lower rates of taxation for higher earners in the Financial Sector New York and Singapore (I believe it’s 36 -37%). By removing the cap London should in theory attract the brightest and the best.

The Eu is reportedly looking into removing or at the very least adjusting the cap in its member States.

We had quite a long discussion of this theory on a thread a week or two ago. Unfortunately I can't find it, but GermanShepherdsMum was quite eloquent on how it wa a Good Thing because attracting the 'brightest and best' would lead to more investment in the UK. For 'brightest and best' I assume she meant the smoothest talking salesmen. This, in theory, would promote growth, but I can't see the life of me where 'growth' was to come from.

I tried very hard to get her to explain just who was going to spend the money that would lead to growth, on the assumption that 'growth' equals higher consumer spending. But she just kept reverting to the mystical mantra that allowing bankers unrestricted bonus would promote growth because it would attract investment, new businesses and new jobs.

I think that this is the basis of the 'trickle down' theory. A theory, BTW, that seems to have no research validation.

But, forgive me if I'm wrong, but don't businesses invest in setting up a business and creating jobs on order to make money?

In which case, it seems to me that there are only two sources of that money available to a business. One is the domestic market, the other through trading in overseas markets. If there are any other sources perhaps someone will put me right..

An excellent example of overseas investment in the UK is Nissan; set up in a deprived area, plenty of available labour, who they were prepared to treat well and train to a high standard. And they had a huge domestic and overseas market to sell into with great ease as we were members of the EU Single Market which had removed all trade barriers between the UK and the other 27 member states.

The other thing that might attract investment would be the size of the domestic market, but that would depend on domestic consumers having enough money to spend to make the venture profitable.

Can you see where I am going?

We no longer have access to the Single Market, so why would a foreign investor see any advantage in setting up in the UK?

We also have a shrinking domestic market as wages for many consumers have been frozen, or fail to account for inflation, and we have a domestic cost of living crisis with rising energy prices and rising interest rates which mean that far fewer people have any spare money.

If anyone can see how we could still attract investment under these circumstances I'd be glad to hear it.

The only other source of growth in the economy could be state investment, as I have outlined before on many occasions. But now we are looking at an £18billion cut in state spending.

None of this makes any sense to me...

Blossoming

Can anybody explain to me how the unrestrained bankers’ bonuses will trickle down to us peasants? I could do with a few bob to cover all the rising prices.

... right. Well.

Umm. I don't think it does. OK, maybe a teeny tad.

Depending on the amount of the bonus it could buy a luxury holiday in the Caribbean region or one of those other islands north of Cuba which might of course pay the wages of the poor skivvies who run around after the rich but as they'll be domiciled in their native territory, that's where the money will trickle.

Then again, if it's a considerable amount, it could buy a yacht, but I think the major luxury yacht builders are in the Netherlands and Italy.

Failing that - it'll go into an offshore account or a trust. Frozen right out of the system.

Of course, it will keep the sandwich-shops open in The City during the working week I guess. And the pubs. That's if these establishments can afford to keep running when their energy and other costs are continually rising.

Don't think it's going to contribute much to Truss' growth plan though, and by the time the trickle reaches you, it will be in pennies rather than 'bobs'. Or not even pennies...

Thanks MaizieD and Dickens, I haven’t seen an earlier thread. I’ll have a look.

Maizie, ‘brightest and best’ in terms of bankers (and ‘bankers’ includes for instance economists and lawyers working for banks) is nothing to do with salesmen. The money is made in the investment banking sector, not the retail. Investment bankers are not salesmen. You are well aware of the importance of financial services, where we strive to be the best in the world, to our GDP. And that bankers’ bonuses taken in cash produce a hefty tax take. Share options for bankers have been an unattractive alternative to cash for some years as bank shares have performed badly - if you were offered shares in Credit Suisse today I think you’d opt for cash! Bankers do of course spend heavily but they are subject to the PAYE regime and the tax they pay goes straight to the Treasury.

Hit the ground running - fall flat on your face! Truss has probably bought a little time but this debacle will never be forgotten. Just remember all those mortgage payers and seekers.

Wyllow3

vegansrock

Truss threw Kwarteng under the bus by saying it was his decision as if she hadn’t been consulted and it was all a surprise to her - really?

So much for their bedrock trickle down stuff when confronted with vote losing certainties.

Still, I am thankful. Have they dropped the bankers bonus thing too.

But I will remain having no time for them at all until they "up" basic benefit levels!

The 45p tax rate abolition is the only thing they’ve U turned on. Everything else they’ve announced still stands - and they’re refusing to say how they’ll pay for it until the end of November. The cuts to benefits already announced (UC claimants having to earn more or face losing benefits) will still stand and more will be announced later - including, I suspect, the confirmation that benefits will only be uprated by wage levels and not inflation. Watch out for the inevitable slashing of disability benefits - always first in the firing line.

Blossoming

Thanks GrannyGravy13, I understand the theory about attracting talent but I don’t believe that it benefits the poorest in our society. In my experience it does the opposite when all these high earning talented incomers start buying property etc. and pushing up prices. I worked in tech for many years and saw it happen.

I feel like we’re stuck in a time loop. Boom and bust all over again.

For context - if the proposed cut to the 45p rate had gone ahead , someone earning £1m a year would be around £43000 a year better off. For someone like me, at the bottom end, taking 1p in the £ off the basic rate would give me an extra £120 a year. Not much trickles down does it ?

So, GSM if investment bankers don't work to attract investment, what do they do? Genuine question.

TBH, the amount of tax they're likely to return to the Treasury from their bonuses is probably nothing in the scale of things as they surely have their income tightly tied up in tax avoidance schemes? And the few £million that might be paid won't solve any problems.

The money is much better to be distributed in the domestic economy where people pay more of their incomes in tax that they can't avoid...

What I note is that you still haven't addressed my point about markets and where the money these new businesses are supposed to be making to 'grow the pie' is coming from?

As for financial services contributing to GDP, it's no good if the ''share' ' of GDP is not going much further than them, because it's not getting much further down the population.

It's time we stopped pandering to the financial services sector and looked to growing a wider spread of businesses to contribute to GDP.

Unfortunately, Truss and Kwarteng's free market fantasies aren't going to do it.

Investment bankers assist companies and governments to raise capital Maisie.
Try using a tax avoidance scheme when, as an employee, you pay tax at source under PAYE.

Don’t know whether to bury my head in my hands or laugh hysterically. First she is a no nothing idiot and secondly she lays the blame on her chancellor in an attempt to distance herself from her own policies. The only thing that might help the Tories would be if they put the country’s interest first and get rid of the pair of them pronto in order to place Sunak in their place. The Party seems more concerned at how it would look if they had another PM so soon. Never mind the financial disaster, just as long as the Tories look credible to a public who has seen what they really are and yes “we won’t forget”.

She makes Theresa May seem “Strong and Stable”.

The country has been scammed by Truss and Kwarteng. Just in time for the party conference. Look out for the standing ovation for Kwarteng today - the chancellor who ‘gets it’ and ‘listens’ My post of 8.57 this morning!

Don’t mean to say I told you so but I’ve just watched Kwarteng’s speech at the Tory conference - applause, nodding dogs, standing ovation. What a sham!

I haven’t seen it yet. Well they are the idiots who elected Truss and therefore Kwarteng.

Germanshepherdsmum

Investment bankers assist companies and governments to raise capital Maisie.
Try using a tax avoidance scheme when, as an employee, you pay tax at source under PAYE.

And how do they do that? There must be a process.

Still haven't addressed my other point. Why should the UK be attractive to investors?

I can’t neatly sum up describe equity capital markets and debt capital markets in a couple of sentences Maizie, you will have to read up on them.

Why should the UK be attractive to investors? Low rates of corporation tax for a start.

At the moment Maizie financial instability will chase them away, but under normal circumstances the quality of the reaaerch we do in both universities and research centres. The high quality of the scientists and engineers our universities produce every year.

London and several other big cities are lively and vibrant with lots of things to do, I live just south of Oxford, near Harwell, Culham and many other high tech research estates.

The area is close to Oxford as a cultural centre, the countryside is glorious, the schools are good, and almost every other person I meet is from somewhere else in the world and working in one of the many science facilities.

At the moment Maizie financial instability will chase them away,

I do realise that, MOnica.

Wouldn't it be cheaper for them to just attract all those scientists and engineers to their own countries, with good wages and relocation costs rather than set up an enterprise in the UK?

How are they going to make their money in the UK?

I'm not seeing anything that will improve the prospects of 'ordinary' folk here.

LizzieDrip

*The country has been scammed by Truss and Kwarteng. Just in time for the party conference. Look out for the standing ovation for Kwarteng today - the chancellor who ‘gets it’ and ‘listens’* My post of 8.57 this morning!

Don’t mean to say I told you so but I’ve just watched Kwarteng’s speech at the Tory conference - applause, nodding dogs, standing ovation. What a sham!

He didn’t apologise for the turmoil he cast the country into last week. Just made a joke of it. Then, interestingly, referred to the plan from 10 years ago instead of 10 days. Freudian slip perhaps. Was he referring to the plans in Britannia Unchained? Then went on to talk about deregulating everything ( cheers from the audience) and taking away the right to strike. If we don’t get rid of this government we’re in big trouble. Am I paranoid in thinking it’s still part of Save Big Dog in that Johnson’s supporters want it to be Truss that brings about the downfall of the party ( which was crumbling anyway) and not Truss? How on earth did we get to this?

Agreed MayBe. I know what you mean - I’m starting to feel paranoid about the whole thing. Feels like there’s some sort of plotting going on behind closed Westminster doors; some evil master plan that’s coming to fruition. Our own government plotting against us, the ordinary people. It’s a very uncomfortable feeling. I really worry about the society that my grandchildren will grow up in - unequal; money oriented; unkind; uncaring; back-stabbing; dishonest. Our only hope is that the decent people will rise to the top.