Redistribution of wealth in the UK

Whitewavemark2

Katie59

We cannot expect the economy to improve a lot until Ukraine is settled, then energy and food prices will return to normality.
At least we have a stable government let’s hope it doesn’t get worse because when there is a change of government the bills are going to be large.

I don’t agree with your conclusion with regard to either the cost of living or that we have a stable government.

None of those assertions can be backed up.

Sunak is rather more hard line than I expected and I’m not expecting a vote of confidence so his government will survive until the next GE. Not having the continual upheaval of the Johnson/Truss era will be a refreshing change.

Katie59

We cannot expect the economy to improve a lot until Ukraine is settled, then energy and food prices will return to normality.
At least we have a stable government let’s hope it doesn’t get worse because when there is a change of government the bills are going to be large.

I don’t agree with your conclusion with regard to either the cost of living or that we have a stable government.

None of those assertions can be backed up.

Yes larger debts than at present, that was announced at the last budget
Food and fuel prices will not return to pre Ukraine levels but they will be lower than current.
Don’t expect any change in trading relations with EU for maybe 5 yrs. Any “ Brexit Bonus” agreements will be very limited, due to continued Covid and Ukraine disruption.

I dont see any reason to expect a quick recovery, I hope the most vulnerable are protected, the rest of us just tough it out

Katie59

We cannot expect the economy to improve a lot until Ukraine is settled, then energy and food prices will return to normality.
At least we have a stable government let’s hope it doesn’t get worse because when there is a change of government the bills are going to be large.

Larger than they are already?

Do you seriously believe energy and food prices will return to pre-Ukraine levels?

Economic pressures cannot all be blamed on global factors.

And we still haven't sorted out our trading relationship with the EU...

What 'bills' are going to be large, Katie59?

We cannot expect the economy to improve a lot until Ukraine is settled, then energy and food prices will return to normality.
At least we have a stable government let’s hope it doesn’t get worse because when there is a change of government the bills are going to be large.

CoolCoco

There are some countries which have far more equality, Scandinavian countries have higher tax rates but better pubic services, for example. That's not to say there aren't rich and poor people in those countries, but there aren't as big gaps between them.

There is a bit of a myth about the equality in Scandinavian countries.

In Norway (where I lived and worked for 12 years) two professors (emeritus) have researched this assumption and written a book.
They came to the conclusion that there are great differences in wealth which are "on a par with the differences you find in Great Britain and France, which are old class societies".
They believe the official statistics on equality are misleading. Uncertainty around the numbers makes it difficult to give clear answers about how wealth is distributed, but one of the professors believes that the value of "big fortunes" are underestimated.
According to the professors, Norwegians also do not have more egalitarian attitudes than people in other countries.

However, the way society is structured in Norway means that a huge swathe of the population have high wages. Even those who earn the least have a relatively good wage compared to other countries - cleaners, restaurant workers, etc will have a far better standard of living than their counterparts in the UK.
"Norway is heavily unionised and the vast majority of employees across a huge range of sectors belong to a trade union . Most trade unions are affiliated to a national federation, which is then usually affiliated to a main confederation of employees." (www.lifeinnorway.net).
Also education in Norway helps to eradicate inequalty - public universities in Norway offer free tuition for all students. They have a higher level of education than the European average. The housing market is overall more stable than in the UK and home ownership is high compared to other countries. This is purely anecdotal, but in the company I worked for, all the younger people were on the property ladder (including the woman who cleaned the offices) by their mid-twenties, some earlier.

So in fact, the gap between rich and poor - though not known as an exact science (too many variables) is probably as great as in the UK. It's just that the poor are not as poor as the poor in the UK!

The two professors - and colleagues - claim in this study that the richest 1% pay the least taxes! Not really a surprise though is it - we know that the ultra wealthy have ways and means of avoiding tax.

I can't forgive the LibDems for selling off the Royal Mail so cheaply, varian. Nor can I forgive the LibDems for conniving at the austerity policy which has all but broken the UK and has brought the NHS to its knees. Sorry...

I'm not fully confident that Labour has the answers, but at least it is a party that feels as though the good of the country and of 'ordinary' people matter to them. Things which the tories have never seemed interested in.

I don't think they have much economic nous, but perhaps they're keeping their powder dry until they are in power.

Which I think they inevitably will be after the next GE.

January 2025 feels a long way away.
Kemi Badenoch might magic up some good trade deals? It is a very quiet government so far in marked contrast to the last one! Some of the problems here today should have been worked through if we are not in the middle of a major war. I am not very optimistic that government aid to Ukraine will bring about a resolution. The arms manufacturers must be making huge profits and it feels that all sides in the conflict are becoming more and more entrenched.
I don’t think that a change of government will make any difference on this issue.

Obviously the best option is the Liberal Democrats

Which party is the better option ??

Even with a change of government, we still have
1. The economic effects of a pandemic which lasted two years

The economy was recovering until the war in Ukraine caused the hike in energy prices and some shortages which has affected food prices. With some investment in the economy, such as increased funding for the NHS and public sector wage increases, and a programme of investment in Green Energy these could be ameliorated.

2. The war in Ukraine which shows little signs of a fast resolution

Government will find the money to fund our aid to Ukraine

3. The subsequent energy shortage and price hikes

See 1)

Of course, what you haven't mentioned is Brexit, which is having a seriously bad effect on businesses large and small, which traded with the EU and are now losing custom because of the difficulties they are having in continuing that trade. I see no solution to that from our current 'Brexit' government. We need a government which will move closer to the EU with a view to rejoining the Single Market and a Customs union.

Rather than wish for regime change on an almost continuous basis, better to ask how to solve the crisis confronting us all.

The only thing that will solve this is regime change, because the current government either has no idea how to solve it or is ideologically opposed to doing so. There's nothing we can do as individuals except make our feelings known and vote for better at the next GE.

MaizieD

^I wasn't suggesting we do a Robin Hood style mugging of the rich, and remove every penny, laughing callously.^

No, but I think that that was how your teacher was trying to present it

The Labour 'squeeze the rich' was a long time ago now. Apart from talking about wealth taxes, I haven't really heard much in the way of positive redistributive policies from them lately. But perhaps they'll be a bit braver once in office.

Even with a change of government, we still have
1. The economic effects of a pandemic which lasted two years
2. The war in Ukraine which shows little signs of a fast resolution
3. The subsequent energy shortage and price hikes
These problems remain for government of whichever persuasion. The policies might have a different set of faces fronting them but the solutions will still not be easy, and the civil servants will continue to be in place.
Rather than wish for regime change on an almost continuous basis, better to ask how to solve the crisis confronting us all.

If only Yorkshire could become independent of the UK and join the EU then I could have a new passport and freedom of movement as before Brexit. No hope, though!

I wasn't suggesting we do a Robin Hood style mugging of the rich, and remove every penny, laughing callously.

No, but I think that that was how your teacher was trying to present it

The Labour 'squeeze the rich' was a long time ago now. Apart from talking about wealth taxes, I haven't really heard much in the way of positive redistributive policies from them lately. But perhaps they'll be a bit braver once in office.

I wasn't suggesting we do a Robin Hood style mugging of the rich, and remove every penny, laughing callously.
My point was that this is a complex matter, and it seems even Labour governments ( I can recall them wanting to 'Squeeze the rich until the pips squeak' ) have not achieved what we would all probably like to see. (Except the rich, of course)

Rosina

If we penalise the rich with punative taxes and a clamp down on shares, bonuses etc. how much in real terms, shared fairly, would that give the poor in this country - and for how long? A one off payment possibly. I have a vague memory of an economics lesson at school where the blackboard was headed 'You cannot help the poor by destroying the rich' and the teacher proceeded to explain that 'the rich' are the tiny tip of the iceberg - and are quite capapble of leaving this country if threatened with such measures. What is the answer?

If that was an economics lesson, Rosina, then you had a very poor teacher.

Nobody who knows what they are talking about is suggesting that there has to be a one off wholesale confiscation and redistribution of 'wealth', as in the Russian Revolution.

The objective is to prevent the wealthy from accumulating even more wealth, and to even out the distribution of the money that comes into the economy over the whole of the populace.

Whether you regard it as newly created government (i.e public money) money (which is what it factually is) or a recycling of tax and other revenues, there is a continuous flow of money from the state into the domestic economy (the domestic economy being the one most of us live in, where we spend most of our money on shopping and leisure activities) . It is the state that pays for our public services and continually monitors the supply of money in the economy, issuing more money if they think it necessary,

In theory the money the state issues should follow a circular flow; state -> purchases and wages -> consumer spending -> tax -> state and so on, round and round.

Of course, in practice not all the money that the state issues returns to it because a) some people save some of their money, b) some of it is spent abroad on holidays, c) a great deal of it goes to the wealthy, who, as Katy59 detailed earlier, don't spend much of it in the domestic economy. So much of their money doesn't return to the state in the same way that the money of those lower down the income scales does. This means that the state has to issue more money to compensate for that which is 'lost' to the wealthy and to make sure that there is enough to keep the domestic economy going. (Except that a government, like our current one, ideologically opposed to issuing state money doesn't put much in. They call it 'saving money' and 'cutting costs')

A more even distribution of money would mean that more of it stays in the domestic economy with the people who spend it there. And that means the people who are currently very poor and what used to be called 'the middling sort', the reasonably well off who do still spend their money mainly in the domestic economy.

The domestic economy is really important, because without a thriving domestic economy businesses are reluctant to invest because they need us, the consumers, to spend on their goods and services; if we have no spare money to spend they won't make any profit, and, likewise, many of the small and medium size businesses which depend on our spending would fail, with a subsequent loss of jobs.

Katie59

Casdon

Katie59

Although I agree that the rich should be taxed more on personal income, we have to recognise that they could leave the UK, earn more and be taxed less.

So it is very much a double edged sword, it would be
popular with voters while not raising much if any extra tax.

I don’t know how you could know that more tax would not be raised Katie59? A few high profile people at the top of the income scale will no doubt leave the UK to avoid paying high levels of tax, but in reality most won’t.

Executives at the top level are very mobile, we have many foreign executives working in the UK and many UK executives are working overseas. That’s not including Expat wealthy successive governments have not raised taxes because more will move overseas.

According to data from PricewaterhouseCoopers, income tax rates for the highest earners are relatively low in the UK compared to other European OECD nations.

Def a huge divide between those who have and those who don’t. We’re lucky in that we’re not rich but we do have good pensions and can afford heating etc. We donate weekly to the local food bank and give to charities etc but still feels very uncomfortable when you see what some have to endure and often through no fault of their own.

Casdon

Katie59

Although I agree that the rich should be taxed more on personal income, we have to recognise that they could leave the UK, earn more and be taxed less.

So it is very much a double edged sword, it would be
popular with voters while not raising much if any extra tax.

I don’t know how you could know that more tax would not be raised Katie59? A few high profile people at the top of the income scale will no doubt leave the UK to avoid paying high levels of tax, but in reality most won’t.

Executives at the top level are very mobile, we have many foreign executives working in the UK and many UK executives are working overseas. That’s not including Expat wealthy successive governments have not raised taxes because more will move overseas.

MaizieD

It's not really a question of taxing to get more income; it's taxing to prevent money being constantly sucked out of the economy into the hands of the already wealthy; who don't spend it in the economy.

Many don’t spend the income in a useful way, they spend it on luxuries, bigger cars, bigger houses, extravagant holidays, there needs to be more incentive to invest in useful enterprise. It’s not just the super rich either, right through the social profile we reward ourselves with new cars and holidays, most of this cash goes overseas not benefiting the UK.

If we penalise the rich with punative taxes and a clamp down on shares, bonuses etc. how much in real terms, shared fairly, would that give the poor in this country - and for how long? A one off payment possibly. I have a vague memory of an economics lesson at school where the blackboard was headed 'You cannot help the poor by destroying the rich' and the teacher proceeded to explain that 'the rich' are the tiny tip of the iceberg - and are quite capapble of leaving this country if threatened with such measures. What is the answer?

I would rely on it Monica, because it’s not going to happen. I do understand the context. We are talking about a majority of people who work in the UK, have homes here, often have families, and ties. We certainly aren’t only talking about the top hundred or whatever it is on the Rich List. There’s a lot of talk about emigration, but the majority won’t actually do it.

Casdon I wouldn't relie on that, in this modern world people are moving round all the time. Many of those listed on Brtish rich lists, may manage British companies but live elswhere. the Channel islands and the Isle of Man provide very cosy refuges for rich people avoiding British taxation. I would have agreed with you once, but no more

One of the results of Brexit is the number of people taking out foreign citizenship. I am not talking about UK residents and British citizens becoming Irish from the comfort of their Uk homes, but I have been surprised how many older people in retirement and friends of my DC, currently working in EU countries, have taken out the citizenship of their cueent country of abode, even if that means resigning their Brirtish citizen ship when dual nationality is not possible.

Giving up citizenship is a far more extreme step than just moving country, yet many modestly paid people are doing it.

It's not really a question of taxing to get more income; it's taxing to prevent money being constantly sucked out of the economy into the hands of the already wealthy; who don't spend it in the economy.