Slow but sure....
30 May 2013
There is much in the OECD's latest report to cheer Osborne. They agree that his economic measures are right and that the UK is on a trajectory for recovery, however slow it may be. Yes they did downgrade growth expectations slightly from 0.9% to 0.8% but compare that to the Eurozone who have been downgraded from minus 0.1% to minus 0.6%... With our main trading partner so inflicted the small UK downgrade is a remarkable result.
There is much in the OECD's latest report to cheer Osborne. They agree that his economic measures are right and that the UK is on a trajectory for recovery, however slow it may be. Yes they did downgrade growth expectations slightly from 0.9% to 0.8% but compare that to the Eurozone who have been downgraded from minus 0.1% to minus 0.6%... With our main trading partner so inflicted the small UK downgrade is a remarkable result.
I have always said that Osborne was going in the right direction but just not with sufficient speed, too slow and too shallow cuts added to too high taxes and insufficient supply side reforms. But at least it is the right direction.
The Eurozone, however, are still plunging into a deeper and deeper abyss. They refuse to do what is essential, decouple the Euro. Instead they have imposed ever more austerity on the weaker countries. Yes, the weaker countries do need to cut back their spending but without being able to allow their own currency take some of the strain they are not addressing the core of their economic shambles. At least now they are starting to make some supply-side reforms, not enough and too late, but it is a start on that side of the economic triangle. But whatever they do, while the Euro exists in its present form, all we will see is a long drawn out agony for Europe and the Eurozone remains a clear and present danger to both the world economy and to its own peace and stability.
It is worth adding this excerpt from the OECD report..
‘With high budget deficit and gross government debt rising to 90% of GDP in 2012, further fiscal consolidation is necessary to restore the sustainability of public finances. The authorities’ medium-term underlying fiscal consolidation plans, together with the use of the automatic stabilisers, should help combine sustained consolidation with necessary flexibility to meet unexpected output shocks.’
To translate - the 'further fiscal consolidation is necessary' means there needs to be deeper and faster cuts. Now where have you heard that before?
- HMRC is owed £billions by SMEs who simply don't have the money.
I'm not sure what solution the likes of Tom, Keith and Reg have to that dilemma. Should they make thousands of people bankrupt? - For a number of reasons David any Government is most likely to take the path of least resistance, the problem you cite will both encourage and discourage action on this broad front.
i.e.
The fact that SMEs are without sufficient resources shall allow those larger enterprises, with ample resources, to retain them. - As I suspected Tom, you don't have an answer.
SMEs are struggling, they owe HMRC £billions, what does HMRC do - you can't get feathers out of a frog. If they make thousands bankrupt the debt is written off and unemployment soars. You bang on about tax dodgers without any grasp of the situation. - At last David, you show yourself to be the good old Socialist that you are.
You wish to retain, at any cost, your own 'bloated' sector, with the Spanish Practise of sustaining companies that are not viable. - any comments on the actual blog?
- My word you talk nonsense Tom, you refuse to address the real issue.
SMEs owe £billions in tax and simply don't have the money. You bang on and on about this without the vaguest semblance of a solution.
Shut them all down, write off the debt, increase unemployment, decrease revenue, seems to be your answer - Yet again David, actual comprehension gives way to your need to bleat.
Your support for British Leyland comes a little too late, likewise with coal-mines and steel works.
To get back to it...
Should debtors in-funds be ignored because there are debtors without? - What on earth are you on about?
It seems Tom that beyond cutting and pasting you are incapable of thought. Tax owed by SMEs has absolutely nothing to do with BL or NCB.
The answer, as Barry has proven to you on countless occasions, is that lower taxes increases revenue - You, David, and Barry are well matched. For you are both of the opinion that 'repetition' equates to proof.
You assert that the public purse is owed much by way of taxes due but as yet unpaid, indeed you say such taxes cannot be paid, by the SME sector.
You wish (and on this we are in agreement) that such SMEs should be allowed to continue to trade, although they are technically insolvent. For keeping people in work is far better that throwing them to the dogs. Harold Wilson would be proud of you.
On a personal level I am sure we would again agree;Being owed money by somebody who pleads poverty yet enjoys Sky TV, foreign holidays etc. is most galling.
Where we part company is with your willingness to exact 'tribute' from the weakest while letting the untouched go untroubled. - I have no idea what you mean by your last sentence.
The rest is your usual self indulgent tripe. You have no solution to the problem beyond more taxes - I have not mentioned the least thing about "more taxes", in fact I have been thinking that we both were talking about taxes already due, but payment not pursued.
While we are at it. Is your solution to do away with taxes altogether? [In the future, of course. One thing at a time.] - David, try attacking the politics and not the person. Why are you so angry, need a cuddle?
- I could always do with a cuddle Lesley, have you got any spare time?!?!
You make a fair point but when people put words in my mouth I can't help myself.
Best wishes - Tom, no, fiscal consolidation means cuts - high taxes damage businesses, incentives and consequently growth.
What you ignore among many other things is that HMRC are always chasing unpaid taxes, there will always be unpaid taxes, there will always be people who evade them. HMRC are powerless to do anything about avoidance which is legal unless, through long court processes, they can have the more contrived schemes ruled illegal.
To just try to say that collecting unpaid tax is the answer is a cop-out, no more than whistling in the wind.
As for 'repetition' - no that is not proof. There is a mass of evidence that shows how high marginal rates of tax reduce the tax collected if you choose to look at it. The repetition is because some people like you prefer to ignore the evidence out there and seek to punish people just because they are wealthy and not address the root causes that reduce tax collection - a complex system of high taxes. - I have not said that collecting unpaid tax is the answer, I am not even saying that addressing the business-led overcomplexity of tax regimens is the whole answer, but these points are certainly not to be ignored.
Your own "whistling in the wind" of increased prosperity from simpler and lower taxes is trumped by the fact of the actual prosperity of the three decades or so after WWII, when taxes were simpler yet higher.
The real difference between what you wish for and what I insist upon lies with the fact that then (post WWII), as now, what is an absolute requirement is Nation and Economy Building. Not the childish pursuit of money for its own sake that you favour.
Your mindset seems incapable of moving off from Thatcherite Trickle-Down nonsense.
The demand from you is that; first and foremost your problems must be solved...and the there is to be the later fantasy of 'prosperity for all'. "A happy gaoler means a happy gaol."
But NO!!
"We are all in this TOGETHER!" - At least GO listens...
By politics.co.uk staff...
" George Osborne is legislating to block oil and gas companies from recovering up to £900 million in tax bills.
The chancellor announced the finance bill will prevent distribution companies from making new claims on costs dating back decades via a tax loophole.
Treasury officials were forced to move against oil and gas companies after they began claiming capital allowances for costs already covered by business customers.
"It is completely unacceptable that utility companies think they can claim for huge amounts of money, that business customers have already covered the cost for," Osborne said." - the bit i do not understand is how small and medium sized enterprises owe money to hmrc.
surely this means that they have received money in to owe this in the first place, so what have they done with it? - Howard - small businesses often tend to be undercapitalised. They live hand to mouth and at all costs must make sure the pay staff first and foremost along with covering all the other costs needed to keep a business going. Under normal circumstances cashflow can mean digging in to what cash you have to cover these essential costs. A bad debt or non payer can be a serious problem too on top of this.
Money that might otherwise be set aside for tax needs to be dipped into. Clearly the hope is that by the time that is due to be paid a good month means the money is replaced. That good month sometime does not happen at least in time to cover the tax bill.
Anyone who runs a small business has to face these facts of life, adapt and deal with it as best they can. I have been through that myself and back out the other side..... - Tom. You are not clear. You write a lot but do not say much.
In the three decades after WW2 you quote the UK was in steady economic decline only reversed when Mrs T came to power. While we were foolish enough over those decades to adopt Keynsean economics other more successful economies (including Germany) followed the Austrian School.
Its is your belief that you can create more wealth by punishing the wealthy and successful that is nonsense, proven nonsense. - Let me tell you my story. My husband ran his own courier service prior to his death. Unbeknown to me he had aquired considerable debts, most of his own making and had not paid his tax for two years. Being in an abusive marriage I had no assest of my own at the time of his death and inherited his debts to the tune of £30,000.
I duly informed all of his creditors of his death and lack of funds. Some were brilliant, very helpful, couldn't do enough to help and advise. Others, well lets just say many tears were shed due to their demands.
One of the worst was HMRC, they informed me that I would have to sell the property, my home, to repay his debts and that I would be liable for fines incurred due to non payment.
Thankfully, my sister and I managed to find enough evidence to reduce his bill and after a long battle squash the fines.
I still had to pay his taxes out of my own pocket as I was unwilling to lose my home. - HMRC are dreadful in these situations and make more people and businesses bankrupt than anyone.
- Not so much Thatcher...more North Sea Oil...
""North Sea oil rescued Britain from the repeated balance of payments crises of the past and provided a crutch for the public finances at a vital time," writes Jeremy Warner in The Daily Telegraph, "but it also set the stage for a peculiarly unbalanced form of economic growth that dogs the country to this day." "
http://www.csmonitor.com/Environment/Energy-Voices/2013/0408/How-North-Sea-oil-helped-Margaret-Thatcher
Add to this her biggest folly of the Big Bang and the lady is in the running to overthrow Brown as the architect of our woes. - Oh really Tom - how little you know. Blinded by your own left wing prejudice and flying in the face of common sense.
The big bang a folly? To say that demonstrates how little you know about the big bang. I suppose you would still have the old 'open cry' system in the computer age to ensure that The City was not internationally competitive and unable to generate the billion of tax revenue it has generated over the years.
Mrs T did not give the BoE independence and remove them from prudential control over the banks
Mrs T did not subsequently screw up the BoE inflation brief so interest rates were held too low too long creating a debt and property.
Mrs T did not massively increase the deficit during the economic growth phase.
As for North Sea Oil, yes it was a help, but it was the British people, not oil, that created the economic activity and wealth of the 80's with their entrepreneurial spirit freed from the old controls and restrictions that held the UK back in that terrible post war period. - i know all too well the problem of undercapitalisation coupled with bad debt, a bigger problem however is big companies agreeing 30 days credit terms and taking between 90 -120 days to settle accounts.
we folded but did pay all v.a.t owed, put me in debt for over 5 years. - You have a good point there Howard.
As any fule noes; a household in dire financial straits is wise to trim its outgoings, but foolhardy to neglect the exaction of what monies are owed to it.