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We're in danger of turning 'success' into a dirty word

By Jeff Randall

There's something in the air; something that's not quite right.

After a decade of Labour government, dedicated to increasing equality, widening inclusion and improving public services, those who should have benefited seem unhappier than ever. The stench of naked envy is polluting Britain, like stale cigar smoke in a dining room.

Perhaps Labour's core voters expected too much. Perhaps they thought that 10 years of Tony would be like winning the pools. More pay, less work, free ride.

advertisementPerhaps they are confused. Gordon insists that the system is working brilliantly, yet experience tells them that property is becoming ever more unaffordable, NHS hospitals are closing and state schools are a lottery.

An average house costs £200,000. An average salary pays £25,000. Trying to buy the former, while earning the latter, is enough to make even Happy Larry feel miserable.

Ordinary people are painfully aware that, though they have little problem affording many household essentials, cheap food and discount clothing, when it comes to securing high-quality education and health facilities, life starts to get tricky.

Despite Brown's injection of many extra billions of pounds into state schools and hospitals, voters know that there's a disconnect between what has been spent and what is being delivered. More resources going in hasn't meant better services coming out.

Where there's private-sector competition, by and large, the economy is producing more for less. As a result, we're all better off. But where there are public-sector monopolies, it's often the other way round: value-for-money exists only as a concept.

This has thrown up some bizarre anomalies. Minimum-wage earners can afford to fly to Spain twice a year, but they can't find a dentist. They can buy a ticket to Malaga in five minutes, but need to queue all morning to have their molars fixed.

And it's not just those at the bottom of the ladder who are fed up. A breadwinner on £50,000 is forced to share his wage packet almost equally between his family and the Chancellor. British taxes are at their highest level for 20 years.

For those even farther up the income scale, there is, at least, the option of paying twice: first through taxation and again via school fees and health insurance. Though galling, many prefer to forego holidays than condemn their kids to a second-rate education.

By the way, for those who are keen to find out more about the shortcomings of state schools, letters and post-cards, please, to Labour MPs Ruth Kelly and Diane Abbott.

For the majority who make up Middle Britain - the people who it is fashionable to call "hard-working families" - there is a mounting sense of injustice.

Above them, they see City bankers and commodity traders earning more in a year than they will in a lifetime. Below, there is an underclass of benefits junkies who take whatever they can, while contributing next to nothing.

When you're working 10-hour days and commuting on top, it's hard to accept that a financier can make your annual salary in a single phone call. Equally, it's tempting to be cynical about what Lord Browne does to earn £90,000 a week at BP.

As for welfare scroungers, why does the Government allow 1m incapacity-benefit claimants (there are 2.7m in all) to continue drawing handouts, even though ministers believe that they could and should be in employment?

If half a million Poles, many with no English, can find jobs in Britain, why can't all those domestic idlers earn a living? And why should we pay for them? These understandable anxieties, and others like them, are gnawing away at the silent majority.

The upshot is the unfortunate growth of a grievance culture. In the 1970s, it was known as "the politics of envy" and manifested itself in the question: "If I can't have it, why should you?" Today's sociologists call it "success resentment".

Early promises from New Labour about a positive attitude to wealth creation have wilted along with the Prime Minister's popularity. The Government says that it wants Britain to have a dynamic, entrepreneurial economy, yet ministers are taking cheap-shot swipes at the winners who are coining it. It's intellectual dishonesty.

Peter Hain, Alan Johnson, Beverley Hughes are sending out signals that it's OK to have a pop at big earners. Unsurprisingly, the trade unions are on the warpath.

In particular, GMB leaders are persecuting Damon Buffini for making so much money at the private-equity firm Permira. They claim his salary is paid for by the misery of others. Yes, Permira got rid of a lot of staff at the AA. But has anybody bothered to look at its other businesses?

Buffini's team has created many more jobs than it has destroyed, but nobody wants to hear that. Voters are angry and politicians are delighted to pander to their prejudices. So, too, are parts of the media.

In its coverage of the private-equity debate, Newsnight, BBC2's main current-affairs programme, depicted those in the industry as stand-and-deliver Dick Turpins. When I asked the editor of another leading BBC news show about impartiality and the internal reaction to Newsnight's approach, he said: "Nobody even mentioned it."

We are, as a business-based economy, regressing, sliding backwards, dangerously close to the point where financial success is no longer admired; instead it has to be justified. Too many businesses that are doing well are pilloried rather than applauded.

The vocabulary of analysis is changing, too. New codes have crept in. Markets are "casinos", profits are "rip-offs" and dealers are "spivs".

When I was business editor at the BBC, I became bored by having to bridge the yawning gap between public concern that our pension funds should be well funded and general disgust that banks, supermarkets and pharmaceutical companies were making so much money. One, of course, is paid for by the other.

I have moved on, but the debate has not.

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I care little about huge City bonuses as they're the product of a free market - abeit an inquitous financial system.

I am much more concerned about spiralling taxation, incompetent public spending and blank cheque benefit system desperately in need of reform and tighter regulation. I think the stench Randall can smell is anger not envy.

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Guest mattsta1964
I care little about huge City bonuses as they're the product of a free market - abeit an inquitous financial system.

I am much more concerned about spiralling taxation, incompetent public spending and blank cheque benefit system desperately in need of reform and tighter regulation. I think the stench Randall can smell is anger not envy.

Spot on

What does annot me about the huge salaries paid in the city is this fantasy that that wealth filters down to ordinary people. Like fekk it does

And the other thing that riles me is the rich pay fekk all tax in this country and the middle class foot the bill for their measly contribution.

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Guest The_Oldie
And the other thing that riles me is the rich pay fekk all tax in this country and the middle class foot the bill for their measly contribution.

Someone earning £1,000,000 in a year would pay £400,000 in tax, plus NI and VAT @ 17.5% on everything they buy, not an insubstantial sum.

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Guest mattsta1964
Someone earning £1,000,000 in a year would pay £400,000 in tax, plus NI and VAT @ 17.5% on everything they buy, not an insubstantial sum.

Come off it!!!!!!!!!!!!!!!!!!

People on those kinds of salaries are not paying their dues. They pay accountants to make sure their liabilities are minimised using every loophole in the book. The idea that they are paying 40% income tax is plain ludicrous. Just look at the so called 'lehgitimate' expenses MPs claim back for example.

FFS!!!!

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Who are a different breed to city workers.

And?

You don't think it might be considered unfair that Joe Manager on 50k a year pays 50% of his income to Gordon Brown while Joe Billionaire pays nothing?

I care little about huge City bonuses as they're the product of a free market - abeit an inquitous financial system.

The City is nothing like a free market. Those bonuses are the result of a government-controlled market in credit which funnels most wealth in the country into the banks.

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Guest The_Oldie
Come off it!!!!!!!!!!!!!!!!!!

People on those kinds of salaries are not paying their dues. They pay accountants to make sure their liabilities are minimised using every loophole in the book. The idea that they are paying 40% income tax is plain ludicrous. Just look at the so called 'lehgitimate' expenses MPs claim back for example.

FFS!!!!

Was the 98% supertax payable in the 60s fair in your opinion?

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Come off it!!!!!!!!!!!!!!!!!!

People on those kinds of salaries are not paying their dues. They pay accountants to make sure their liabilities are minimised using every loophole in the book. The idea that they are paying 40% income tax is plain ludicrous. Just look at the so called 'lehgitimate' expenses MPs claim back for example.

FFS!!!!

I know a guy who is self employed and on £60k. He has an accountant and he said he paid £2.5 in income tax last year.

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Someone earning £1,000,000 in a year would pay £400,000 in tax, plus NI and VAT @ 17.5% on everything they buy, not an insubstantial sum.

Yes - if they declare it as earnings. Of course they don't - it gets siphoned through companies and whatever other mechanisms to pay 20% tax at the very most, usually much less. When you earn that much it makes sense to pay a creative accountant to circumvent taxes. Not a luxury that Mondeo Man can afford.

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Spot on

What does annot me about the huge salaries paid in the city is this fantasy that that wealth filters down to ordinary people. Like fekk it does

And the other thing that riles me is the rich pay fekk all tax in this country and the middle class foot the bill for their measly contribution.

You still not chilled out yet ? Fill your head with positive thoughts .

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Spot on

What does annot me about the huge salaries paid in the city is this fantasy that that wealth filters down to ordinary people. Like fekk it does

And the other thing that riles me is the rich pay fekk all tax in this country and the middle class foot the bill for their measly contribution.

Bonuses are taxed at 40% plus NI like any other income over the threshold-why do you think the rich (other than the handful of Mittals etc) pay very little tax? I guess it depends what you call rich.

S.

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I think we can concentrate on collecting more tax from the rich when we stop pi$$ing away the money this government is collecting already.

Maybe employ a couple of these rich people's accountants to go through the books and point out where we could save money. Or maybe just apply a little common sense?

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Guest mattsta1964
Was the 98% supertax payable in the 60s fair in your opinion?

Absolutely not!

Do you think that middle class people should subsidize the rich through higher levels of taxation? Because that's how the system works. The people who actually bother to crawl out of their pit every morning and work for a living subsidize all the dole bludgers,spongers and lazy scumbags on sickness benefits but we subsidize the rich too. That is inexcusable.

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not sure I am entirely comfortable with Randall's idea that private sector = good, public sector - bad. Most of the problems that have come about as a result of this government's wheezes is because they have blended the two with the effect that we end up with the worst of both worlds.

How do you incentivise the private sector to get involved, when - if it were truly worth doing - they would just go it alone? That's right, you load up all the liabilities onto the taxpayer.

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Come off it!!!!!!!!!!!!!!!!!!

People on those kinds of salaries are not paying their dues. They pay accountants to make sure their liabilities are minimised using every loophole in the book. The idea that they are paying 40% income tax is plain ludicrous. Just look at the so called 'lehgitimate' expenses MPs claim back for example.

FFS!!!!

Why do you think there are that many loopholes? You can pay into ISAs (£7000), into your pension for tax relief (uplift in pension and some income tax relief), pay into a venture capital trust for 30% credit but very high risk of losing capital and then you are left with funding British films for tax relief, equally evry high risk. You could go offshore but this is not that safe from tax either and it restricts use of your own assets. I am not sure what is left other than trying to manufacture losses through complex corporate/debt structures to offset tax on earnings and profits, not an easy task.

S

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Guest mattsta1964
I know a guy who is self employed and on £60k. He has an accountant and he said he paid £2.5 in income tax last year.

I know someone who didn't pay ANY income tax for 6 years. then Inland Revenue finally caught up with him he was issued a hansard demanding 200K. If he appealed against this tax demand and lost, Inland Revenue would double the amount owed to 400K

He hired the most expensive tax specialist he could find, appealed and ended up paying..............

NOTHING

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I know someone who didn't pay ANY income tax for 6 years. then Inland Revenue finally caught up with him he was issued a hansard demanding 200K. If he appealed against this tax demand and lost, Inland Revenue would double the amount owed to 400K

He hired the most expensive tax specialist he could find, appealed and ended up paying..............

NOTHING

Now there's an accountant I could use! :lol:

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Guest mattsta1964
Now there's an accountant I could use! :lol:

It dragged on for about 2 years. he was interviewed under caution several times. Real Gestapo stuff in a darkened room with a bright light shinig in his eyes. They were itching to nail him.

But if your clever and can afford a decent lawyer, there's no reason to pay tax in the UK.

I always remember that Maria Hemsley woman in New York. She was a property magnate arrested for tax evasion. Her famous quote was. 'I don't pay taxes. Only little people pay taxes.'

How true!

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I know a guy who is self employed and on £60k. He has an accountant and he said he paid £2.5 in income tax last year.

i have a ltd company as most contractors do - last year i paid about 50% of my earnings in tax, n.i. etc. plus accountant fees

on the other hand, i know a builder on about £50k who paid about £3k tax, mainly because all his household expenses went through the books and because he did a lot of work cash in hand

it's not necessarily the higher earners who pay the least proportion of their income in tax

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Guest mattsta1964
i have a ltd company as most contractors do - last year i paid about 50% of my earnings in tax, n.i. etc. plus accountant fees

on the other hand, i know a builder on about £50k who paid about £3k tax, mainly because all his household expenses went through the books and because he did a lot of work cash in hand

it's not necessarily the higher earners who pay the least proportion of their income in tax

Fair comment. People in the Building trade have big advantages over contractors like you and me because they can accept so much cash and only put a limited amount of their income through the books. It's also much easier to hide expenditure as legitimate expenses, rather like our politicians do!!

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Another article along similar lines.

http://www.thebusinessonline.com/Document....F3-1CF45077D9F2

There is a widespread feeling the economy has turned into a zero-sum game, with the rich (including many wealthy foreigners) benefiting at the expense of the rest by grabbing all the best homes and school places. The middle classes feel held to ransom by Britain’s shoddy public services and trapped by the over-priced housing market. They have also lost confidence in most big companies, including the high street banks, and are sick and tired of their poor and incompetent service.
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