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Labour pledges ‘economic rewrite’ with radical election manifesto

Labour has put forward a raft of changes in its election manifesto with the aim of ‘rewriting the rules of the economy’. Philip Fisher examines what the party is proposing through an accountancy lens.

22nd Nov 2019
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The Labour Party manifesto tops 100 pages and has separate supplements addressing corporation tax reliefs and funding. The projected cost is £83bn a year, rather than £1.2tn as estimated by the Chancellor of the Exchequer.

The headlines include measures to:

  • Rewrite the rules of the economy, so that it works for everyone.
  • Rebuild public services by taxing those at the top.
  • Launch the largest-scale investment programme in modern times.
  • Kick-start a Green Industrial Revolution.
  • Bring in a real living wage of at least £10 per hour for workers aged 16 or more with equal rights at work from day one.
  • End zero-hours contracts.
  • Replace universal credit.
  • Amend the Companies Act, requiring companies to prioritise long-term growth while strengthening protections for stakeholders.
  • Require one-third of company boards to be reserved for elected worker-directors and give them more control over executive pay.
  • Separate audit and accounting activities in major firms and impose more robust rules on auditors.
  • Introduce a new Workers’ Protection Agency working with HMRC to govern equal pay.

Investment

Measures include plans to:

  • Create a national investment bank backed by regional development banks, with the intention of levelling up investment across the country.
  • Nationalise energy and water companies.
  • Improve the apprenticeship levy and introduce a new climate apprenticeship programme.

Taxation

Labour’s stated objective is to create “a fairer taxation system, asking for a little more from those with the broadest shoulders, and making sure that everyone pays what they owe.”

Key points are:

  • Reverse cuts to corporation tax while keeping rates below those of 2010 (see below).
  • Increase income tax “a little” for those earning more than £80,000 a year.
  • Freeze national insurance and income tax rates for everyone else. Although the wording is vague, it appears that national insurance will be frozen for all.
  • Ensure that income from wealth is no longer taxed at lower rates than income from work.
  • Guarantee no increases in VAT.
  • Where government procures services from the private sector, companies will be assessed against best practice public service criteria, including provisions for collective bargaining, fair wage clauses, adherence to environmental standards, effective equalities policies, full tax compliance and application of pay ratios. In the public sector, maximum pay ratios of 20:1 will be enforced.
  • A Labour government will “review the tax and pension changes implemented by the Tory government to ensure that the [NHS] workforce is fairly rewarded and that services are not adversely affected”.
  • No quarterly reporting for businesses below the VAT threshold. This appears to be a promise not to go ahead with MTD quarterly reporting for income tax.
  • Prescription charges in England will be abolished.
  • The sugar tax will be extended to milk drinks.
  • Launch the “biggest ever crackdown on tax evasion and avoidance”
  • Treat corporate groups under common ownership as unitary enterprises, so that profits are declared where economic activity occurs and where value is created.
  • Introduce a windfall tax on oil companies.
  • Second homes which are used as holiday homes will be subject to an annual tax equivalent to 200% of the current council tax levy.
  • Scrap the so-called “bedroom tax”. This is a 14% cut in benefits for each “spare bedroom” which social housing tenants enjoy.
  • Abolish the IHT main residence nil rate band.
  • Charge VAT on private school fees.

Corporation tax rates

Labour would reintroduce a small profits rate for firms with a turnover (not profits!) of under £300,000 a year

Labour would raise the main rate of corporation tax to 21% in April 2020, 24% in April 2021 and 26% in April 2022. It would keep the small profits rate at 19% in April 2020, rising to 20% in April 2021 and 21% in April 2021.

Review of corporate tax reliefs

In a separate document, Labour proposes a review of corporate tax reliefs conducted by the Treasury, to be completed within seven months of taking office. The target will be to achieve efficiencies of 1% of total relief expenditure i.e. £4.3 billion a year.

The review will examine existing corporate tax reliefs in relation to the following questions:

  • Does the relief meet its stated policy objectives, and in a cost-effective way in comparison with alternative means of achieving these objectives?
  • Is this objective already achieved by another policy or relief?
  • Who does the relief target and what impact does it have on them, both individually and cumulatively in interaction with other reliefs?
  • Does the relief simplify the tax system e.g. by avoiding double taxation?
  • Is there evidence of misuse of the relief, including for the purpose of tax avoidance?

Maternity and childcare

The Labour Party will extend paid maternity leave to 12 months.

Within five years, all 2 to 4-year olds will be entitled to 30 hours of free pre-school education per week and access to additional hours at affordable, subsidised rates based on the parent’s income.

Higher education

There is a proposal to abolish tuition fees and bring back maintenance grants.

Broadband and TV licences

Labour promises to deliver free full-fibre broadband to all by 2030. In addition, free TV licences for those aged over 75 will be protected.

Gambling levy

A new gambling levy will be introduced with the specific aim of funding support for problem gamblers and systems for consumer compensation.

Late payments

There are undefined plans to tackle late payments to small businesses and the self-employed. Late payers could be banned from public procurement.

Workers’ rights

Workers will be given a share of dividends generated by the companies they work for. Large companies will be obliged to set up Inclusive Ownership Funds (IOFs). Up to 10% of the company’s shares will be held by this new type of employee trust with dividend payments of up to £500 a year distributed equally to the employees.

The party is additionally proposing a pilot of a Universal Basic Income scheme.

Self-employed workers will get new rights including collective income protection insurance schemes, annual income assessments for those on Universal Credit and better access to mortgages and pension schemes.

A new Ministry for Employment Rights will also be set up, which will develop plans to:

• Give everyone full rights from day one.

• Strengthen protections for whistle-blowers and rights against unfair dismissal.

• End bogus self-employment and creating a single status of ‘worker’ for everyone apart from those genuinely self-employed in business on their own account.

• Ban overseas-only recruitment practices.

• Ban zero-hour contracts and give those who work regular hours for more than 12 weeks a right to a regular contract, reflecting those hours.

Work-life balance and equality

The Labour Party proposes:

• Increasing wages through sectoral collective bargaining.

• Requiring breaks during shifts to be paid.

• Requiring cancelled shifts to be paid and proper notice for changes in hours.

• Giving all workers the right to flexible working.

• Extending statutory maternity pay from nine to 12 months.

• Doubling paternity leave from two weeks to four and increasing statutory paternity pay.

• Introducing statutory bereavement leave. Statutory support for bereaved parents is due to start in April 2020.

• Introducing four new bank holidays celebrating our four patron saints’ days.

• Reviewing family-friendly employment rights, including rights to respond to family emergencies.

Promote equality at work by:

• Requiring employers to devise and implement plans to eradicate gender/race/disability pay gaps with fines for failure.

• Increasing redundancy protection.

• Banning unpaid internships.

It will also develop collective income protection insurance schemes for the self-employed.

There is an ambition to reduce full-time weekly working hours to 32 within a decade.

Pensioners

Labour will:

  • Review the retirement age and possibly reduce this for those in stressful occupations e.g. shift workers.
  • Maintain the ‘triple lock’ and guarantee the winter fuel payment, free TV licences and free bus passes as universal benefits.
  • Implement a single, comprehensive and publicly run transparent pensions dashboard, including information about costs and charges.
  • Ensure that the state pensions of UK citizens living overseas rise in line with state pensions in Britain.

*22 November: An amended version of the article was uploaded to clarity points such as the criteria for small profits rate and the manifesto costings.

Find out more in The Accountant's Guide to Election 2019

Replies (42)

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By jon_griffey
22nd Nov 2019 10:07

Note that the small company rate will apply to companies with TURNOVER under £300K, not PROFIT as before.

Dividends tax will be aligned with the rate for other income, up from 7.5% to 20%.

Never mind those with £80K paying 'a little' more tax. Basic rate small business owners will see their marginal tax burden going up from 25% to 41%.

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Replying to jon_griffey:
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By simonsyddall
22nd Nov 2019 10:44

Spot on, Jon. But will the smaller OMBs actually make a profit, on which to be taxed? With 32 hour working weeks, 4 more bank holidays, statutory breavement, worker-directors and a 22% overnight increase in NMW, I suspect not. Then with no difference in the rates of PAYE, dividend tax and CGT, as you correctly say, what would be the point in taking the risk? Might as well all sign up for the new universal credit and wait until the lights go off.

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By Charlie Carne
22nd Nov 2019 10:50

Not only will basic rate taxpaying shareholders pay a 41% effective tax rate on their profits (corporation tax plus dividend tax), but higher rate taxpayers will have a 59% effective rate and, if the claw-back of personal allowance above £100k is retained on top of a 45% higher rate, the effective rate on that slice of income will be 76%.

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Replying to charliecarne:
By Glenn Martin
22nd Nov 2019 17:49

Dear god

At what point does hire rate dividend tax come in

They might have to rethink this for the many not the few lark

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By djn
23rd Nov 2019 00:34

charliecarne wrote:

Not only will basic rate taxpaying shareholders pay a 41% effective tax rate on their profits (corporation tax plus dividend tax), but higher rate taxpayers will have a 59% effective rate and, if the claw-back of personal allowance above £100k is retained on top of a 45% higher rate, the effective rate on that slice of income will be 76%.


How do you come up with those %?
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By Robert Hurn
22nd Nov 2019 10:07

Time to put the IMF on standby

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Replying to bobhurn:
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By evildrome
22nd Nov 2019 10:18

The IMF are screaming at everyone to spend more money.

All over the Western world, growth is near zero because the private sector is at peak debt.

Decades of neo-liberal economic policy (creating all new money in the economy as bank credit money) means that we have run out of people willing to borrow even at 0.25% interest.

To paraphrase Mrs. T

"The problem with Neo-Liberalism is that eventually you run out of other peoples ability to take on more debt."

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Replying to bobhurn:
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By NeilW
22nd Nov 2019 10:52

Why?

Where do you think the IMF gets Sterling from? Since HM Treasury owns the BoE outright wouldn't they just cut out the middleman?

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By meadowsaw227
22nd Nov 2019 10:11

Where are the incentives for anybody to employ any staff at all.
A race to the bottom.

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Replying to meadowsaw227:
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By NeilW
22nd Nov 2019 10:54

Under Labour the incentive is to replace capital with Cheap Labour. A policy the Labour Party is wholly in favour of.

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By evildrome
22nd Nov 2019 10:14

"Ensure that income from wealth is no longer taxed at lower rates than income from work"

= 40% CGT

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By mkowl
22nd Nov 2019 10:24

I encourage anyone with the time to actually read the detail within the proposals. A scary world - I am sure it refers to a Ministry of Truth - a dystopian future world where I am sure that will mean the truth is then controlled as they spy on us via our free broadband connection.

I don't worry about the tax more the State control, read where it says about a "common national rulebook for schools, as determined by legislation". Monitored no doubt by some new Quango politically indoctrinated.

Really I suggest put the tax aspects aside, read the rest of it and what would become an attack on our individual freedoms and choices

Also watch the Maureen Lipman mock BT advert circling today and a classic line "he would nationalise daffodils if he could"

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By Andrew3018
22nd Nov 2019 10:37

When I saw the headline, I thought I would see a forecast of the country's Balance Sheet and/ or Cashflow for the next 5 years showing line by line tax revenue and spending. In an Accountant's perspective, numbers are sometimes flexible but more often than not numbers dont lie and that would be extremely helpful if we truly want to buy promises.

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Replying to Andrew3018:
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By mkowl
22nd Nov 2019 10:52

Andrew3018 wrote:

When I saw the headline, I thought I would see a forecast of the country's Balance Sheet and/ or Cashflow for the next 5 years showing line by line tax revenue and spending. In an Accountant's perspective, numbers are sometimes flexible but more often than not numbers dont lie and that would be extremely helpful if we truly want to buy promises.

Yep we have been advised that this manifesto is fully costed and indeed fully funded. Well it must have been hidden in some very small print because I did not spot it. Some very vague terminology giving a lot of scope. Trying to inform folk that a digital sales tax will merely be collected from the big tech companies but like VAT and IPT guess who will bear it

The slightly sad situation for political balance is I can't see the Tory manifesto being any better. Jeez for a political party that can make the centre ground the sensible place to go

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By evildrome
22nd Nov 2019 12:20

You'll notice John McDonnell says "We'll pay with bonds" a lot.

He's been saying it with suspicious frequency.

He also said that it would not cost a penny in tax NOR add a penny to the debt.

And I'm like... "how does that work"

And then I remembered the £450Bn worth of QE.

The BOE have a cookie jar with £450Bn worth of bonds inside and John McDonnell plans to make merry with it.

We need to add money to get the economy going, so why not?

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By Andrew3018
22nd Nov 2019 10:37

When I saw the headline, I thought I would see a forecast of the country's Balance Sheet and/ or Cashflow for the next 5 years showing line by line tax revenue and spending. In an Accountant's perspective, numbers are sometimes flexible but more often than not numbers dont lie and that would be extremely helpful if we truly want to buy promises.

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By Andrew3018
22nd Nov 2019 10:37

When I saw the headline, I thought I would see a forecast of the country's Balance Sheet and/ or Cashflow for the next 5 years showing line by line tax revenue and spending. In an Accountant's perspective, numbers are sometimes flexible but more often than not numbers dont lie and that would be extremely helpful if we truly want to buy promises.

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Replying to Andrew3018:
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By evildrome
22nd Nov 2019 12:16

The accounting of a country is not the same as a company.

Companies are currency users. Countries are currency issuers.

If the amount of new goods and services rises by 2% a year, the money supply has to grow by 2% a year or you will have deflation.

How is this new money created?

Well, either government creates it or the banks do.

When the banks create it, it must be paid back with interest so eventually, if insufficient high powered money enters the economy, people will run out of the ability to borrow.

And that's where the Western world finds itself today.

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By k743snx
22nd Nov 2019 10:48

"“close the tax loopholes enjoyed by elite private schools and use that money to improve the lives of all children”

So its not all bad news - first with all this largesse floating about, there'll be no requirement for Children In Need appeals - secondly, ending tax breaks for "elite" schools will severely hamper the supply of future Labour ministers (cynicism mode off).

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By listerramjet
22nd Nov 2019 11:04

Were we amused to note that they ignored most of the eye watering cost in their “fully costed” manifesto? Were we amused to note the somewhat fantastical predictions of how much tax their rate increases will actually produce, even before taking into account the likely impact on economic activity of all sorts. No on both counts!
It’s easy enough to copy and paste from the extensive wish list, but where is the in depth analysis?

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Replying to listerramjet:
Caroline
By accountantccole
22nd Nov 2019 11:41

Haven't looked at either in huge detail but it struck me that Conservatives seemed to be offering a long list of promises with little in the way of additional tax revenue being generated too?
It would be nice to see some numbers but then that would involve forecasts and relying on experts and no one seems to like experts any more!

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Replying to accountantccole:
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By Richard Grant
22nd Nov 2019 12:16

You don't actually expect any of them to deliver on their promises do you? I gave up on that idea years ago along with Santa and the tooth fairy. Numbers would be fun to see though.

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Replying to listerramjet:
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By evildrome
22nd Nov 2019 12:22

Bonds... there's £450Bn worth of bonds sat in the BOE.

You can buy an awful lot of Smarties for £450Bn.

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By North East Accountant
22nd Nov 2019 11:41

What's worrying is that we might actually end up with this insanity!

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By CoxE
22nd Nov 2019 11:50

Ye gods and little fishes - we all new roughly what to expect but this surpasses even my wildest imaginings. If anyone is foolish enough to grant this any credence it will be a sad indictment of their faculties.

The whole is so utterly ludicrous as to merit not detailed analysis but one proposal does appeal; the removal of the proposed quarterly tax reporting for those beneath the VAT threshold. I am drafting a letter to Mr Corbyn, suggesting that if he would care to drop the entirety of his terrifying manifesto, with this one exception, he will be able to count on my vote!

David Cox

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By Richard Grant
22nd Nov 2019 12:13

I see the income tax hike is set for those over £80,000, that's the basic pay for MPs so they would miss that then. Clearly nothing to do with self interest just a happy coincidence I would guess.

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By evildrome
22nd Nov 2019 12:29

We agree that the UK government can create its own money (UK pounds)?

So *theoretically* the UK government could simply cut all tax to zero and pay for everything with new money.

Right?

That's theoretically possible.

Why is it not actually possible?

___inflation___

Right! Inflation!

Therefore the purpose of taxation is?

The control of inflation.

Taxation is there to sink money out of the economy to prevent inflation.

So, is there a lot of inflation?

Its bounced along at what 2% or under for the last 10 years.

So... Lets do a worked example:

What happens if the NHS employs 100 more doctors and pays them £300 a day?

GDP goes up by £30,000 a day but debt only goes up by £20,300 a day because the doctors pay tax.

OMG!!! Debt to GDP falls! We've employed 100 doctors and we've reduced debt to GDP from 88% to 68% !!

By employing doctors.

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Replying to evildrome:
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By Ian McTernan CTA
22nd Nov 2019 13:08

But your debt went up by £20,300 a day, and sooner or later someone has to pay for that. Also, you cannot take paying some doctors in isolation and then claim to have reduced the debt to GDP ratio, as endless Govt spending increases eventually come home to roost. Just look at the end of the last Labour Govt when their spending resulted in a deficit of 10% of GDP.

Also, your spend results in a one off boost to GDP at an ongoing cost of £20,300 a day. In year two your extra spending has no effect on GDP but we're still funding the £20,300. Yours is the ploy Labour used last time to increase growth figures and hide some of the reckless spending - and it all comes unstuck when you can't keep raising spending, as we found out.

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Replying to Ian McTernan CTA:
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By evildrome
26th Nov 2019 11:02

"But your debt went up by £20,300 a day"

You are assuming that that the doctor pays his tax and then burns the rest of the money.

Of course what actually happens is that he spends his money into the economy which is earned by shopkeepers and plumbers, etc and is again taxed and earned and taxed, etc and so on.

By this process of churn the government can get back 3 to 4 times the money in tax that it paid out originally (IMF figures, not mine)

This is how growth in the economy reduces debt to gdp.

It is important to note that "debt" in this context is not debt.

It is merely the sum of all money the government has created and not yet taxed back.

The "debt to GDP" measure IS important in that it tracks the amount of money created vs the countries productivity but "debt" is not debt in the way you and I think of debt.

If you can create your own money you can never be in debt.

You can create more money than your economy can handle, yes.

That's what the "debt to GDP" ratio is for.

What about government borrowing?

Government's DO NOT borrow. They allow you to deposit money with the central bank.

Government spends money into the economy but there's a limit to how much it can spend or it creates inflation.

So what if there was a way to take money off the public and stop them spending so the government can spend?

OK, that's called taxation. People don't like taxation.

How about another way to take money out of the economy but... people get their money back at the end?

What would that look like?

A fixed interest savings account at the Central Bank?

Yes. That's what bonds are.

You deposit your money (buy a bond) and you get a fixed interest and your money is locked up out of harms way where it can't cause inflation.

Note that government CANNOT spend that money. The whole point is to control inflation by REMOVING the money from the economy.

So its on deposit. It is not spent.

So if its not spent it can all be paid back immediately, because its on deposit.

"In a monetarily sovereign country such as the United States of America, the United Kingdom and most other countries, government debt held in the home currency are merely savings accounts held at the central bank. In this way this "debt" has a very different meaning to the debt acquired by households who are restricted by their income. Monetarily sovereign governments issue their own currencies and do not need this income to finance spending."

https://en.wikipedia.org/wiki/Government_debt

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By anthonystorey
22nd Nov 2019 13:26

"No quarterly reporting for businesses below the VAT threshold. This appears to be a promise not to go ahead with MTD quarterly reporting for income tax." . . . .

. . . . So at least there's one good thing in the manifesto.

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By mkowl
22nd Nov 2019 13:42

anthonystorey wrote:

"No quarterly reporting for businesses below the VAT threshold. This appears to be a promise not to go ahead with MTD quarterly reporting for income tax." . . . .

. . . . So at least there's one good thing in the manifesto.

I would say thanks for small mercies but I just reckon they would have a worse plan up their sleeve. I reckon the nationalisation of us accountants to become part of a British & International Govt Tax Inspection Team (the collective acronym will be good if nothing else)

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By Mr J Andrews
22nd Nov 2019 13:47

The key words in Philip Fisher's opening are ......''what the party are PROPOSING....''
Does anyone in their right mind believe a word of this utter crap from Corbyn or for that matter the similar crap expected from Johnson ?
So sorry that Jeremy didn't go to the cinema to watch ''Sorry We Missed You'' . Perhaps his party should take on Ken Loach as an economic rewriter - or at least to try and find out the realities of our current Dickensian workplaces . Workers rights indeed. Power to the people ain't gonna work.

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By johnjenkins
22nd Nov 2019 13:54

I've been watching politics intently just recently and it's quite obvious that the major parties are trying to buy votes. I agree with JC to the extent that this country (indeed the world) needs a radical change in the way it works form politics downwards (and upwards). The main problem for radical change is economies are nearly always dominated by market forces. So you cannot change that. What you can change is, though, the way that we handle our creation of wealth and what we do with it. Labours manifesto seeks just to have one cake divided so that each get an equal slice (old labour). The Tories aren't much better, although they do understand you have to create many cakes so that the poor would get a thicker slice than they would if there was just one cake. What has happened in the world is that the rich have got richer and the poor poorer. Technology has increased so much that we have high techies and low techies. Large multinationals have dominated without putting enough back in. What is the answer??????????? No doubt we will just plod along. However history states that when we get into this position something happens to re-align the status quo. Any ideas?

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By tedbuck
22nd Nov 2019 15:00

The terrifying thing is that a lot of people have no interest in politics, don't watch the news, don't read papers and I have even come across someone who hadn't heard of Jermy Corbyn. Who do you think these people will vote for?

Be very, very scared.

I haven't voted for a party for years but I always place a vote against the morons by voting for the least worst alternative.

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By djn24
22nd Nov 2019 15:52

The burden on the small Ltd company will be just too high to bear.

We will end up having a mass of small companies being liquidated and they will trade as sole traders and partnerships.

In summary they want to nationalise everything and screw the self employed. So does the labour party want to obliterate the self employed and have everyone work for the state?

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Replying to djn24:
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By flightdeck
22nd Nov 2019 17:00

Have a look at the Shadow Economic to the Secretary to the Treasury : Jonathan_Reynolds on wikipedia. Or Shadow Chancellor of the Exchequer John McDonnell.

Absolutely ZERO experience for their jobs. ZERO. They have literally ZERO experience of generating economic wealth.

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By flightdeck
22nd Nov 2019 16:30

Spare me these utterly unqualified cretins. How many have worked in industry? Run a company? Worked outside of the public sector?

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Replying to Desert Orchid:
By Ruddles
23rd Nov 2019 14:10

What a load of tosh - and I’m not referring to the manifesto

I suspect that you’re about to fall at the next fence.

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Chris M
By mr. mischief
23rd Nov 2019 18:31

For completeness, I can reveal the Conservative manifesto in full:

Disgraceful. They called the election so should have been first out of the blocks, not tail end Charlies. Economically the big question to ask in this election is whether you believe in fairies or leprechauns.

We’ll start with the fairies a.k.a Labour. Planning to spend a colossal amount on all manner of infrastructure and revenue projects, some of which are much needed and some of which are questionable. The first fairy godmother we need must make hundreds of thousands of suitable qualified and experienced construction workers appear on 13 December 2019 and start pouring concrete.

The second fairy godmother will make the financial markets ignore these spends, and thus allow the new Government to borrow at current rates. The credit rating agencies have already taken fright at the plans of the leprechauns –see below – so we can be very confident that, if Labour were lucky enough to get enough bond issues away to fund their plans, they’d be paying dearly for it.

Because the Conservatives are planning to introduce lots of extra documentation to ship goods across the Irish Sea, I am marking down their plans as the leprechauns. They called this election but, unlike Labour, have so far not even seen fit to publish a manifesto which is a complete disgrace. So, whereas with Labour you can cast doubt on how they might cover the extra spending, with the Conservatives this is a pure “finger in the air” as they’ve not bothered telling us.

Neither party has taken into account the risk of a likely global recession in 2020, or the negative impact on key sectors of the UK economy of leaving the EU next year either.

The worst effort I have seen from both main parties in 40 years.

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Replying to mr. mischief:
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By flightdeck
25th Nov 2019 12:36

Agreed, both very poor. What do they actually do? During the past 3 years whilst they've been distracted with Brexit rather than the day to day of running the country, the country has not suffered- have a look at the historic GDP stats on www.economicsonline.co.uk.

I think they are (all) only capable of organising the deck chairs.

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Replying to mr. mischief:
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By evildrome
26th Nov 2019 11:15

A) There's £450Bn in bonds at the BOE that could be spent now.

B) Governments don't borrow. Government can create its own money and could tell the bond market to go **** itself tomorrow.

The theory:

Government has to offset its spending by selling bonds in exact relation to the money it creates thereby sterilising its own spending and controlling CPI.

The facts:

The BOE bought £450Bn of bonds and CPI didn't rise a jot.

If you're selling bonds to lower inflation then buying bonds must raise inflation.

If you buy bonds and inflation doesn't rise, why sell bonds?

Selling them clearly doesn't lower CPI.

Bonds are free money for the already wealthy.

The REAL purpose of bonds is to ensure that the already wealthy cannot be overtaken by the 99.9% by ensuring that they get a cut of any money that enters the economy first. In this manner, in relative terms, they cannot become "poorer".

And in the end its all relative isn't it?

If you have £10m you're rich.

If the government give everyone £10m you have £20m !

But you will be driving yourself to an empty factory on Monday where you will be making your own tea and cleaning your own toilet.

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By Rgab1947
27th Nov 2019 09:56

Was in the UK in late 60's, early 70's. And then Labour was to the right of the current lot! Therefore only comment I have is that if current Labour and the anti-semite Corbyn gets into power Spain/France will get a new resident.

My main clients will go belly up anyway with the far left policies so little business to still have, with my smaller clients (mainly IT) already telling me Europe beckons then in a Labour scenario. Shame really.

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