Ed Balls Announcing Economic Plans

[Goat]

Essentially Labour were a Tory government but they spent an extra 4% of GDP on health and an extra 1% of GDP on education and also quite a bit more on police and prisons. So call it 6% of GDP extra spending on these areas. The only other major increase was in Tax Credits which increased by 2% of GDP over the previous Family Credit system. So that makes it 8% of GDP.

Yep, 8% of GDP isn't a big number is is?

[okaycuckoo]

Isn't this what Vince mentioned a while back? Perhaps Balls expects to be doing business with him in 2015...

Not sure if Cable will be around after next election, but he has a chunk of RBS earmarked for this purpose.

No mention of competition law? That's the biggie, which Miliband seems to have committed himself to:

http://blogs.spectator.co.uk/coffeehouse/2014/01/the-ed-miliband-is-better-placed-than-the-tories-to-follow-roosevelt/

Add in the simple reform of removing debt interest from tax deductions and we could have a better country.

[okaycuckoo]

Floating the banks and then reducing the national debt. Cynically I wonder what follows?

Spend to save. Bail in the savers

Savers should take their place in line, like any creditor in a bankruptcy.

[Liquid Goldfish]

Yep, 8% of GDP isn't a big number is is?

It is a big number. My question is do the Tories want to cut health, education, police, prisons and Tax Credits by that amount to undo Labour's increases? They blame Labour for spending too much but seem to have no intention of cutting back anything apart from a small fraction of the increases.

Edited January 26, 2014 by oldsport

[billybong]

It's the 10p tax rate that gets me. Didn't they introduce that 10 minutes ago and didn't they get rid of it again 5 minutes ago. Didn't GB have a fit when he found out that there were going to be 6 people out of pocket by £1.37 when they got rid of the 10p rate.

I will give the liberals their due they got the tax threshold up to £10,000 that is something I would have expected the labour party to do instead of poncing around with tax credits.

Apparently GB, as Chancellor, introduced the 10p tax rate in 1999 but, as Chancellor, he removed the 10p tax rate in 2008. Justifying the removal as simplifying and harmonizing the tax bands. Amazingly for a Chancellor he didn't seem to fully realise the consequences of his action - don't laugh.

It meant that people with low incomes were worse off and it was only through subsequent protests from within the Labour party that there were tax adjustments to partly compensate for the removal of the 10p tax band.

Edited January 26, 2014 by billybong

[LetsGetReadyToTumble]

On in a couple of minutes, BBC News channel.

On my Google News page, there were 6 incidents of BBC reports on Balls and what he said, and singular reports from the newspapers and other news outlets.

Don't the BBC realise yet that we now know they are just the party political broadcast station for Labour?

[Neverwhere]

Still, one easy way to make 200,000 homes appear, is to free up cheap land for self-building projects, and simplify the planning process in this regard. Not enough vested interests getting a cut, so probably won't happen.

Would be great though. This is why I personally favour direct democracy: I don't trust the vested interests of the elites but I do trust the vested interests of the population as a whole as by definition they are in the interests of the majority.

CGT and the personal allowance are about the only 2 positive things I can thing of about the coalition.

Agree, but in that case are the Lib Dems still credible at the ballot box and potential kingmakers in 2015 or will the general public fail to recognise / reward this?

Don't the BBC realise yet that we now know they are just the party political broadcast station for Labour?

So where are all their hard-hitting programmes (ignoring Labour's role of course) declaiming the full extent of the current housing bubble and economic conditions being perpetuated by ConDem?

The BBC are self-muzzled against every political party (or indeed having any strong opinions at all) because they think this is "objectivity"

[Warwick Yellow]

On my Google News page, there were 6 incidents of BBC reports on Balls and what he said, and singular reports from the newspapers and other news outlets.

Don't the BBC realise yet that we now know they are just the party political broadcast station for Labour?

Spot on, James Purnell was simply the latest of a series of Common Purpose/ Fabian plants put into the BBC to ensure Liebour's narrative gets across day after day to the gullible masses. Under any objective assessment Balls on his past record wouldn't qualify as a junior accountant never mind wanting to run our national economy.

http://biasedbbc.org/

[cybernoid]

Unless you are raving red you aren't stupid and know the Tories are reaping what Labour sowed.

Lots of those here!

For me the 50p rate even being on the agenda tells you everything you need to know. It makes no difference to the tax take, everyone knows this. It is the politics of envy ; Im poor, he's making lots of money, boo boo, stick it to the rich folks by voting labour. It's rather pathetic and identifies their strategy of being one of headline driven policy, exactly what they did in their 13 years of the sheer vandalism we've yet to recover from.

Balls coming out with this is absolutely astounding. Are people dumb enough to vote for this capable of drawing a cross on a ballot paper? Thats a part of their strategy they don't appear to have considered.

[crashmonitor]

Meanwhile Marr asked Balls this morning if he was sorry that Labour spent so much in the run up to 2008 and left such a big deficit. Nope he was proud of their spending.

Trying to get an apology from Labour is like trying to get blood out of a stone. They have to admit their profligacy and say sorry otherwise they will not be trusted again.

[Ah-so]

The principle of the balanced budget is not worth the paper it is written on. Gordon Brown had the principle of balancing the budget over the economic cycle. He just kept on redefining the cycle to suit increased spending and when the financial crisis broke the concept had to be disposed of as being economically impossible.

"Investment" is also a subjective concept. Accountants love to classify things as investment rather than expenditure if they can.

[alexw]

They also doubled CGT from darlings speculation inducing rate of 14%.

I guess labours mindset is they dont mind low taxes on unearned income, but do when it comes to earned income. Being a rent seeker pays. Shouldnt surprise anything when you look at the inherited wealth of many of labours top cronies.

CGT and the personal allowance are about the only 2 positive things I can thing of about the coalition. And, perhaps the 'bedroom tax'

Any other good ideas were subject to 'u turns'

That was "new" labour trying to out-tory the tories on cosying up to capital. I think Ed Balls is a very different kettle of fish looking at what he is proposing. Breaking up the banks and the energy utilities....there's no way blair-labour would have done that. Though we'll have to wait and see how much is reneged on.

[alexw]

Silly suggesting 200k home a year, because then the question gets asked where? And if the answer is on the sacred NIMBY dog pooping lands of England, they are finished.

I'm not so sure. Labour rely heavily on a younger city-town demographic, and much less on nimbyesque shire-village boomers. They can afford to piss off the countryside nimbys if the policy helps their turn out among the city-town demographic. Housebuilding will do that.

It's a gamble though. Will they be willing to take the risk?

Edited January 26, 2014 by alexw

[alexw]

Someone somewhere recently pointed out that NIMBYs already tend to vote Tory, so it wouldn't make much difference to Labour. Still, one easy way to make 200,000 homes appear, is to free up cheap land for self-building projects, and simplify the planning process in this regard. Not enough vested interests getting a cut, so probably won't happen.

Probably me. Though the arch-nimby's have been moving en-mass to UKIP recently. I presume that's because the tories have made some minor attempts to getting building going which has pissed the arch-nimby's off.

[alexw]

Lots of those here!

For me the 50p rate even being on the agenda tells you everything you need to know. It makes no difference to the tax take, everyone knows this. It is the politics of envy ; Im poor, he's making lots of money, boo boo, stick it to the rich folks by voting labour. It's rather pathetic and identifies their strategy of being one of headline driven policy, exactly what they did in their 13 years of the sheer vandalism we've yet to recover from.

Balls coming out with this is absolutely astounding. Are people dumb enough to vote for this capable of drawing a cross on a ballot paper? Thats a part of their strategy they don't appear to have considered.

I find it pretty sad you know that all your posts nowadays are just hate-filled bile or malicious in some way. Honestly, go look in a mirror and reflect on yourself.

Edited January 26, 2014 by alexw

[wonderpup]

Lots of those here!

For me the 50p rate even being on the agenda tells you everything you need to know. It makes no difference to the tax take, everyone knows this. It is the politics of envy ; Im poor, he's making lots of money, boo boo, stick it to the rich folks by voting labour. It's rather pathetic and identifies their strategy of being one of headline driven policy, exactly what they did in their 13 years of the sheer vandalism we've yet to recover from.

Balls coming out with this is absolutely astounding. Are people dumb enough to vote for this capable of drawing a cross on a ballot paper? Thats a part of their strategy they don't appear to have considered.

I think you are basically correct- the 50p rate is more symbolic than practical in terms of the revenue it brings in. The same can be said for the bedroom tax.

The difference is that the 50p rate will not result in a significant amount of real distress and suffering, while the bedroom tax does.

So if both are gestures intended to deliver a message what message's do they send?- the 50p rate sends the message that it's less harmful to society to impose hardship on those best placed to handle it- while the bedroom tax sends the message that targeting the weak is the way to go.

So while the amounts of revenue either raised or saved by these measures makes no real difference the difference between the two in terms of underlying values could not be starker.

You imply that Balls is engaging in a form of class warfare- and that's true to some degree- but to reduce taxation on the richest while effectively throwing people out of their homes in order to claw back some of that lost revenue is also class warfare of a kind- and it's a war being waged on people who are far less resilient and far more exposed than your average top rate tax payer.

[Neverwhere]

Lots of those here!

For me the 50p rate even being on the agenda tells you everything you need to know. It makes no difference to the tax take, everyone knows this. It is the politics of envy ; Im poor, he's making lots of money, boo boo, stick it to the rich folks by voting labour. It's rather pathetic and identifies their strategy of being one of headline driven policy, exactly what they did in their 13 years of the sheer vandalism we've yet to recover from.

Balls coming out with this is absolutely astounding. Are people dumb enough to vote for this capable of drawing a cross on a ballot paper? Thats a part of their strategy they don't appear to have considered.

Property is a form of wealth so if the rich folk deserve the share of the wealth they currently have then why are any of us concerned about a HPC at all? Clearly if the rich deserve to be as rich as they are then everyone who should own a house does own a house, so what are we complaining about?

The thing which would be really dumb is in thinking that a 50p income tax rate is sufficiently high to make any really difference to the income gap between the top 1% and bottom 99% given how large that gap actually is and how much of their income is actually covered by capital gains tax. If anyone thinks Labour are actually interested in wealth redistribution as anything other than a PR exercise then they haven't been paying attention.

Any intelligent analysis of the situation would recognise that a well paid and thriving majority would spend more money in the economy and create more jobs and more tax revenue than an astronomically overpaid minority, so I would vote for any political party that had a credible plan to raise wages across the middle (which would necessarily entail reducing wages at the very top). A 50p income tax rate is not going to achieve this and I very much doubt that the current incarnation of the Labour party even wants to achieve this.

That said it would be funny as hell to see banksters taxed into oblivion, but a 50p income tax rate is not going to achieve this either.

[DarkHorseWaits-NoMore]

What annoys me is that the argument that raising the tax to 50% doesn't bring in any more revenue. So why are the tax arrangements voluntary for +150k earners and if it doesn't make any difference then why did the Tory's roll it back down to 45%. I say make it 60% and chase down the loop holes so THEY all pay it!

FFS. I’m an angry PAYE mug, with no choice but to pay.

[frederico]

I think you are basically correct- the 50p rate is more symbolic than practical in terms of the revenue it brings in. The same can be said for the bedroom tax.

The difference is that the 50p rate will not result in a significant amount of real distress and suffering, while the bedroom tax does.

So if both are gestures intended to deliver a message what message's do they send?- the 50p rate sends the message that it's less harmful to society to impose hardship on those best placed to handle it- while the bedroom tax sends the message that targeting the weak is the way to go.

So while the amounts of revenue either raised or saved by these measures makes no real difference the difference between the two in terms of underlying values could not be starker.

You imply that Balls is engaging in a form of class warfare- and that's true to some degree- but to reduce taxation on the richest while effectively throwing people out of their homes in order to claw back some of that lost revenue is also class warfare of a kind- and it's a war being waged on people who are far less resilient and far more exposed than your average top rate tax payer.

Very true, how on earth people can criticise taxing the rich to lesson the burden on the poor is beyond me,

During my life time I have never seen mass emigration of higher rate tax payers.

We are supposed to be a civilised society.

[Neverwhere]

You imply that Balls is engaging in a form of class warfare- and that's true to some degree- but to reduce taxation on the richest while effectively throwing people out of their homes in order to claw back some of that lost revenue is also class warfare of a kind- and it's a war being waged on people who are far less resilient and far more exposed than your average top rate tax payer.

This is funny though right? Because Balls was privately educated so his family background should be somewhere in the top 7% of the population in terms of income as this is broadly speaking the percentage that is privately educated in the UK. And he's raising the rate of tax for people earning over £150k in direct income, who are also likely to be in this same bracket of the population. So a guy from the top 7% increases the tax on other people in the top 7% and this is interpreted as class warfare against the rich?

The real joke is that if capital gains were included in income calculations (which they should be, they literally are a source of income after all) then would £150k per year necessarily even get you into the top 1%? As has been discussed on here before in some areas house prices are so ridiculous you'd need to be earning over £100k just to be on a historically normal income to mortgage ratio so I'm not sure the people at the bottom end of this tax bracket are really the ones we need to be targeting in the current situation.

If any of the mainstream parties were at all sensible they would be bringing capital gains in line with income tax at all levels. If they wanted to be really sensible they'd just make them one and them same tax to minimise opportunities for future decoupling. That way the tax burden would be equally distributed across all forms of income and maybe they might even be able to actually pay down the bloody national debt. Nigel Lawson did it in the 80s so the Tories have just as much opportunity to go after this kind of policy as Labour and the Lib Dems.

None of them will though, ironically they don't have the Balls

Edited January 26, 2014 by Lo-fi

[ReggiePerrin]

IMO he is stopping thousands of people from voting labour, a liability....... As all the parties are much of a muchness......can't we pick the best people from them all and create a good, honest, creditable and ethical party.

using your criteria I think you'll struggle to get enough MPs to form a 5 a side team, let alone enough to run the Country

Edited January 26, 2014 by ReggiePerrin

[olliegog]

quote

if voters put Labour back in power next year, Mr Balls would also hope to introduce a lower 10p starting rate of income tax to cut taxes for 24 million working people on lower incomes.

weren't they the b*********s who got rid of it on the basis that lowering the rate of tax from 22p to 20p in the pound and getting rid of the 10p band would not affect anyone :angry:

[Goat]

During my life time I have never seen mass emigration of higher rate tax payers.

Going back to the 60s & 70s there were a lot of high profile tax exiles, the French are starting to see the same today and of course it's a lot easy to emigrate today than it was in the 70s.

Famous tax exiles included:

And remember that you need a lot of people earning £250,000 to make up for 1 £1,000,000 p/a tax exile.

[Neverwhere]

And remember that you need a lot of people earning £250,000 to make up for 1 £1,000,000 p/a tax exile.

At the current rate of tax (so not including the 50p rate that might be added to this) we'd need approximately 4.42 people earning £250k to bring in the same income tax revenue as one person earning £1m: http://www.incometaxcalculator.org.uk/ Also people lower down the pay scale tend to spend a larger percentage of their income on VAT and in the economy in general so the people earning £250k are probably paying more of their net income back into secondary taxation than just one person on £1m.

So if we replaced that one person earning £1m with four people earning £250k we wouldn't have spent any more on the overall wage bill, we'd probably be making a minimal change to the overall tax revenue, and we'd have four gainfully employed people instead of just one.

If we kept just the one person on £1m we'd only have one gainfully employed person and three other people who are either adding to the overall wage bill, claiming benefits and thereby negating some of the tax revenue from the one gainfully employed person, or emigrating and not adding anything productive to our economy.

[(Blizzard)]

This is funny though right? Because Balls was privately educated so his family background should be somewhere in the top 7% of the population in terms of income as this is broadly speaking the percentage that is privately educated in the UK. And he's raising the rate of tax for people earning over £150k in direct income, who are also likely to be in this same bracket of the population. So a guy from the top 7% increases the tax on other people in the top 7% and this is interpreted as class warfare against the rich?

The real joke is that if capital gains were included in income calculations (which they should be, they literally are a source of income after all) then would £150k per year necessarily even get you into the top 1%? As has been discussed on here before in some areas house prices are so ridiculous you'd need to be earning over £100k just to be on a historically normal income to mortgage ratio so I'm not sure the people at the bottom end of this tax bracket are really the ones we need to be targeting in the current situation.

If any of the mainstream parties were at all sensible they would be bringing capital gains in line with income tax at all levels. If they wanted to be really sensible they'd just make them one and them same tax to minimise opportunities for future decoupling. That way the tax burden would be equally distributed across all forms of income and maybe they might even be able to actually pay down the bloody national debt. Nigel Lawson did it in the 80s so the Tories have just as much opportunity to go after this kind of policy as Labour and the Lib Dems.

None of them will though, ironically they don't have the Balls

Yes.

Income is only loosely coupled to wealth in Britain's miracle economy. Either they intentionally do not want to tax the actual rich, or they really do not understand the modern economy they've created.

I suspect the latter. I think their generation is totally isolated from the ongoing catastrophe.

'Those with the biggest shoulders should bear the greatest burden'. That'll be landlords then.

Edited January 26, 2014 by (Blizzard)