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Employers 'deceived' over NIC plans, says Mandelson

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1st Apr 2010
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The Conservatives misled high profile business leaders in getting them to back their plans for reversing National Insurance increases, according to Lord Mandelson.

EasyJet founder Sir Stelios Haji-Ioannou and Marks & Spencer executive chairman were among the 23 business leaders to sign a letter backing the Tory promise to reverse the government's planned 1% NI increase for anyone earning less than £45,400 a year.

David Cameron called the letter, which said the Labour action would "endanger" the economy and be a "tax on jobs", a "significant" moment in the election campaign.

But the business secretary today lashed out at the Tories saying the gathering of business support involved a "cynical deception" because it could not be achieving without raising VAT.

"Of course there are some in business who are going to support what appears to be a pain-free tax cut. I mean, who wouldn't, if offered that?," said Lord Mandelson. "But the point is, this is not pain-free and Mr Cameron and Mr [George] Osborne are peddling a deception."

Two of the bosses supporting the Conservatives immediately responded to Lord Mandelson's claims.

"Of course we have not been deceived," said Simon Wolfson, chief executive of retailer Next. "The principle is a very simple one. It is a question of, do we pay for government profligacy through increased taxes or do we urge them to save money in a way that businesses have?"

Kingfisher boss Ian Cheshire also reacted saying: "It's a little patronising to suggest that we've been deceived. This isn't a political point, it's a business issue - whichever way you look at it, it's a tax on jobs."

Cameron was questioned about Lord Mandelson's accusations during a campaign visit to a B&Q store in west London.

"Our plans don't involve an increase in VAT," he said. "We say it's wasteful spending that's cut, rather than putting up taxes, as the government suggest."

"Labour, today, to say somehow Britain's business leaders have been deceived is patronising, wrong, will backfire, and shows that their plans are in meltdown," he added.

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Replies (17)

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By User deleted
01st Apr 2010 16:04

It's a little sad...

... that a 1% rise in Employer NI is apparently going to destoy so many jobs and stop businesses taking on more staff. I mean an increase of about £4 a week per employee (assuming average wage) will obviously tip many small businesses over the edge ;-) Are we supposed to believe the minority of small businesses who actually employ even 1 person are really so fragile that they can't handle the equivalent of a couple of cups of coffee and a packet of (chocolate) biscuits a week? If true then it's a worrying indictment about the quality of our small business owners?

Everyone knows you can't magic up "efficiency" savings and Digby Jones has just been on TV saying he would prefer a rise in income tax or corporation tax next year rather than a rise in Employer NI. Sure business would love that too wouldn't they! And it forgets the timing of payments for IT (Self-employed anyway) and CT are very different to Employers NI and VAT so to bring in the receipts in 2011 the alternative is VAT, not IT or CT.

So business oppose business tax. What's new?

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By User deleted
01st Apr 2010 16:54

National Minimum Wage

Worth remembering all those comments all those years ago by business and Conservatives about how the National Minimum Wage would be terrible for Britain and lead to mass unemployment. Did it? That's a cost to business in the same way the NICs rise is. Remember how business complain about the NMW going up as little as 13p/h and how it is just "unaffordable" and needs to be reversed? The Tories opposed the NMW so no wonder they want to cut this- http://www2.labour.org.uk/minimumwage

This is not a benign, philanthropist approach from business organisations. It is about driving profits ever higher and that is fine as long as we don't think it is anything other than that.

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By User deleted
01st Apr 2010 23:12

It's a very weak camel...

Maybe the camel needs a chiropractor in that case:

Corporation tax rate is 5% lower than in 1997Small companies rate is 2% lower than in 1997Basic rate of income tax is lower than in 1997VAT is the same level as in 1997

 

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By User deleted
02nd Apr 2010 09:50

Can you back that up with facts?

The overall tax burden has increased massively under labour

Everyone here knows your political persuasion so it would be good to have that statement backed up with facts. Perhaps the tax burden as a % of GDP? Otherwise it is just a statement peddled as a fact.

 

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By User deleted
02nd Apr 2010 10:03

Let me help you

Tax burden by country- 2009 Rankings

UK 29th, with a lower tax burden than France, Italy, Japan and most EU countries.

http://www.photius.com/rankings/tax_burden_country_ranks_2009.html

Tax burden as a % of GDP- 2008 Rankings

UK below the EU and OECD avearge.

http://www.ekonomifakta.se/en/Facts-and-figures/Taxes/Taxes-and-GDP/Tax-as-a-percentage-of-GDP/

So based on facts rather than misinformed statements, yes, the UK is clearly overtaxed. It is our right to have the lowest taxes but Scandanavian style public services. Deary, deary me.

 

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By User deleted
02nd Apr 2010 10:15

Still not convinced?

Then check this out from the OECD. Table 0.2 and figure 0.1 show how the UK compares on employers' social security contributions as a percentage of labour costs. Again, much smaller than most other countries so the bulk of costs of employment are wages and not NI.

http://www.oecd.org/document/6/0,3343,en_2649_34533_42714758_1_1_1_1,00.html

They think it's all over... it is now.

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By User deleted
02nd Apr 2010 12:41

In the kingdom of the blind...

Typical - misquoted and fiddled Labour figures.

So the independent OECD provide "misquoted and fiddled" Labour figures? That's an astonishing claim. And data from other international organisations also exist to help a UK Government party. As I have provided sources, please explain precisely what is (i) "misquoted" and (ii) "fiddled". Particularly astonishing when you quote Wikipedia, that well known reliable source of information. I understand you have a particular political outlook but to argue with independent facts does reinforce the suggestion that you have a view and are unwilling to engage in a proper discussion that, heaven forbid, doesn't accord with your own views. Reducing yourself to cheap potshots about me not having clients and providing "seriously flawed advice" is sad and pretty desperate so I'll be interested to see how moderators respond to that. I'm anticipating Becky will remove your post but let's see.

I'm sure you don't care that your post is economically illiterate but you might want to think about the correlation between "banana republics" and lower taxes. Comparing the UK to any country outside the G20 is not very sensible. Most other countries don't have anything like the same infrastructure or public services- education and health in particular- to support so are lower taxed. To stop being banana republics, they would need to spend significantly on all those things. If you want the UK to be a significantly lower taxed country then that's fine but that will send us back to the 80s and 90s with long hospital waiting lists, fewer nurses, fewer police and crumbling infrastructure. At which point our business friends will point out the UK is not an attractive place to do business and the Government needs to invest...

 

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By User deleted
02nd Apr 2010 18:07

Yet again..

I'm still puzzled by your claims the numbers produced by the OECD, which is internationally respected with no political persuasion on way or the other, are:

"misquoted""fiddled""completely inaccurate""distorted""hardly independent or reliable"

You offer no evidence to support this and it does seem in the style of Joseph McCarthy to make statements with nothing to back them up. But you drop to personal insults, claiming of "trolls", "threats" and "attacks" when someone disagrees with you. It is a very disagreeable habit but I will not retaliate and simply let the moderators deal with you again. I thought this site was about the exchange of views based on facts, not personalities who are not prepared to calmly listen to alternative perspectives without crying "troll".

Anyway I'm confident other members of AWEB will also form their own judgements about the substance of this thread based on the above postings. I'm really not interested in debating this further if we can't be mature about it.

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By User deleted
02nd Apr 2010 23:19

Any votes for .....

The Monster Raving Loony Party .....

or even UKIP ... they would get us out of the EU.

 

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By User deleted
02nd Apr 2010 23:27

It's beyond embarrassing

I feel embarrassed for both CD/WD and AWEB reading this. It is beyond comprehension that professionals display the attitudes and discourtesies observed here. It makes me feel sympathetic for HMRC if this is the quality of people it has to deal with. Time for some serious thought from members and moderators about what sort of community they want to uphold.

Back to the substance of the thread, paragraph C5 and Chart C1 of the Red Book show the tax burden as a % of GDP over time. It clearly shows the tax burden as a % of GDP is lower now than in1997 and is SIGNIFICANTLY below the burden in the 1980s. Those are the facts, whether they fit with your world view or not. No conspiracies, no fiddles or misquotes. Just facts.

http://www.hm-treasury.gov.uk/d/budget2010_annexc.pdf

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By User deleted
02nd Apr 2010 23:37

Sorry, meant paragraph C55

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By User deleted
03rd Apr 2010 08:59

Fact?

'Whatever you might say, and whatever delusions you may share with your politcal masters, the fact is that the nation will firmly and finally reject socialism in a few weeks time.'

I think there may be some confusion here as to what is fact & what is conjecture?

The truth is often distorted to support ones own ideals, and non-truths are delivered in an effort to detract from what really happened. Hmmm..... it reminds me of the courtroom dramas on TV.

Interested onlooker

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By User deleted
03rd Apr 2010 13:56

To moderators- time to disable comment function?

Contributors to this site simply cannot tolerate a situation where a member of the community is now saying he will take libel action against another member. Leaving to one side the validity and merits of any such case based on the above postings, I don't think we should allow comments on articles if professionals cannot act professionally and people are going to be subjected to claims of libel when expressing views on subjects pertinent to the profession.

If moderators are not in a position to actively moderate the board in real time, either by moderating posts before they appear or soon after they are posted, then it would be worth thinking about either disabling the comments function altogether or at times (weekends, evenings, Bank Holidays) when the board is not being actively moderated. Maybe that sounds draconion but, for the sake of those wishing to take part in discussions, the board cannot descend to a position where libel action is now being taken. Posters should take responsibility for their own posts to be sure, treating others as they would do in a professional environment, but it seems some are not able to be trusted with that responsibility and it is clear that others, who may have valuable contributions to make to debates, will be put off if they have to worry about threats of libel when expressing contrary opinions.

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By User deleted
03rd Apr 2010 15:17

To anonymous

Are you new to AWeb? If so, you will not know that libel action has been threatened before by WD/CD, and the many who disagree with him are claimed to be 'one individual' bookkeeper troll who cyberstalks, inflames, insults, is inferior, stupid, scurrilous, misadvises their clients, blah blah blah. But of course, none of that constitutes libel.

I have seen this scenario so often on here I can even guess what will happen next .... I will be accused of being your sidekick!

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By cymraeg_draig
03rd Apr 2010 18:01

To the ignorant "anonymous" troll(s)

I have removed my own posts in this thread as I am not prepared to debate issues with ignorant people whose sole purpose is to inflame and harass in pursuit of their obsessive petty vendettas.

Your posts do, however, show you to be a disgrace to the profession, that is in the unlikely event that you actually hold any qualifications.

 

 

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By mikewhit
15th Apr 2010 09:10

Tax exile

It clearly shows the tax burden as a % of GDP is lower now than in 1997

That just shows how useful it is to have a shareholder wife, resident in Monaco ...

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By J Lessels
23rd Apr 2010 11:33

Poor quality control here!

This makes dismal reading! Libel actions threatened in a debate? I suggest that the moderators need to be a little more active to maintain the very existence of a debate.

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