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'British taxes supporting north's living standards'

http://www.irishnews.com/business/-british-taxes-supporting-north-s-living-standards-1242462

IF IT wasn't for the British taxpayer, the standard of living for people in Northern Ireland "would be akin to Bolivia", an economist claimed yesterday.

"It's startling how fiscally dependent Northern Ireland is on UK tax payers' benevolence," he said.

"It costs about £10 billion a year to run this region and health service and welfare and pensions cost us £7bn of that.

"That means we're relying on a third of our GDP coming every single year from the British taxpayer, and if we didn't have that kind of subvention, the standard of living here would be something akin to Bolivia.

"That money is coming in perpetuity. We don't have to pay it back. We're not like Ireland where they would have to go out to the markets and say 'Will you lend me £10bn a year to run my economy?'

"You'll often hear people say that we have to protect the block grant. That might be the cheapest way of keeping our standard of living, hoping that the UK continues to pay us that money every year. But the UK has its own problems, and there are other parts of the country looking for money.

"That one year of funding Northern Ireland could pay for the Olympics every year or Crossrail in two years or build Boris's island airport in two and a half years.

"These are big numbers - and they're starting to ask Parliamentary questions about what we are providing in return for this money every year. So we need to look for growth and be less dependent."

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Our gdp per head is almost $20000. Bolivia GDP per capita $5000. So rubbish.

Any more apposite example? Slovakia ? Croatia?

I think the premise of this type of analysis is balls. The whole point of a transfer union is that the rich bits of a country share the load with the poorer bits eg who's paying for federal highways in Mississippi and Alabama - the taxpayers of Massachusetts and New Hampshire. Similarly the structural funds which upgraded the Republic's roads was a slightly crude example of a transfer union in effect.

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I think the premise of this type of analysis is balls. The whole point of a transfer union is that the rich bits of a country share the load with the poorer bits eg who's paying for federal highways in Mississippi and Alabama - the taxpayers of Massachusetts and New Hampshire. Similarly the structural funds which upgraded the Republic's roads was a slightly crude example of a transfer union in effect.

Perhaps all economic analysis is balls. Look where it's got us.

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Corporation tax no magic trick to banish all our ills

http://www.belfasttelegraph.co.uk/opinion/news-analysis/corporation-tax-no-magic-trick-to-banish-all-our-ills-29166399.html

Our politicians were about to do something particularly stupid. That David Cameron's decision has effectively forced the lemmings to step away from the cliff and prevented them from jumping should be a cause of minor celebration. Viewed in that light, cutting corporation tax would essentially involve a redistribution of existing wealth, creating a more skewed and stagnant income distribution, further fuelling economic inequality.

Further social polarisation is the last thing Northern Ireland needed, but that is what beckoned, because the most vulnerable, lowest-income communities also have the lowest skills and the lowest levels of educational attainment. They would not benefit from the high-end, high-skill investments required to make corporation tax pay for itself. These communities need public investment and assistance that would become ever-more remote and distant under a devolved corporation tax regime. In short, they would be left behind.

Economic exclusion and social polarisation fuel political instability. As a society, we need to take this opportunity to step back and ask ourselves: do we really want to run this risk? Ultimately, the arguments in favour of cutting corporation tax were hastily assembled and ill-conceived. For example, the idea that you can create a level playing-field with the Republic simply by cutting the headline rate of corporation tax to 12.5% is embarrassing nonsense.

Creating 50,000 new jobs was the ambitious objective, but the most immediate effect of a corporation tax cut would be higher retained profits for some companies. By handing control of these resources to private and often very mobile companies, you also lose control over how they are spent and whether they are even reinvested in Northern Ireland, or in those communities most in need.

The corporation tax cut proposal was the equivalent of politicians offering up the electorate a glace cherry and saying here is our economic plan. If Northern Ireland had an economic cake in place, it quite literally would have been the cherry on the cake. But Northern Ireland first needs to create an economic cake, consisting of improved infrastructure and targeted skills, and that requires public investment.

Corporation tax was a magic bean of an economic proposal. We should all be thankful that the lemmings have been quietly ushered away from the edge of the cliff – at least for the time being.

ENDS

I have noticed the (public sector) unions are against this and of course (private sector) is for it. The notion goes business will reinvest and employ - rather than stick in the back pocket and it will aid rebalancing - the reduction of the block grant by between £300m and £700m will be a price worth paying, an investment even, even in these harsh times.

Looking at it impartially (I hope) there appear to be 3 flaws - the economy may not be able to cope with such a dramatic change immediately (if ever), businesses may not do what theory suggests (may pay down debt - sustain unviable businesses) but the main one is the block grant which seems to be assumed to be all public sector spending (on public sector thingys).

However, much of the block grant finds its way into the private sector (is it 60% ?). Contracts for schools, roads, hospitals, Co-ownership, £5 million for farmers, millions for belfast retailers, invest ni grants, contractors, consultants, suppliers of services (cleaning/stationery/staff), sports stadia, tourism, Titanic, Maze and public sector salaries and benefit recipients spending in the economy. The list goes on. And water charges would presumably be back on the table.

It's a tricky question but I think a lot of the issues were glossed over in the hype of this being some sort of panacea. The question seems to be - on a cost benefit alalysis - is it worth it? It seems the narrative has been skewed on the assumed benefits whilst light on the costs. Not only that, but it's not even our call.

Edited by Shotoflight
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Yes but in NI, spending exceeds taxes by 40 percent of GDP.

The whole uk (and roi) is running a deficitt, with government borrowing making up the difference

As for ni, no different from Barnsley bootle or Stockton on tees. Probably costing the south east English even more per head in fact.

I've often wondered how we'd do without all that subsidy. Probably eventually settle out at a lower level with a smaller population. Could have some advantages.

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The whole uk (and roi) is running a deficitt, with government borrowing making up the difference

As for ni, no different from Barnsley bootle or Stockton on tees. Probably costing the south east English even more per head in fact.

I've often wondered how we'd do without all that subsidy. Probably eventually settle out at a lower level with a smaller population. Could have some advantages.

http://www.chavtowns.co.uk/2012/08/barnsley-2/

Whilst I can see some similarities with Barnsley, I'm not convinced. The headline grabbing Bolivia anology doesn't really work either (much better weather) in fairness.

Maybe we'll just have to settle for being unique?

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We have to tear down peace walls to build a new economy

http://www.belfasttelegraph.co.uk/opinion/news-analysis/we-have-to-tear-down-peace-walls-to-build-a-new-economy-29167918.html

While the political orthodoxy here is that Scotland is the roadblock to devolution of corporation tax, the message from London, and indeed Washington, is somewhat different.

A lack of progress on building a shared society, the billion pounds a year cost of sectarian division, needs to be addressed first.

In her interview with the Belfast Telegraph last week Northern Ireland Secretary Theresa Villiers made clear that Westminster wants "commitments on building a shared society" as part of any new economic package.

US President Barack Obama deployed some fine phrases about trading "bullets for ballots, destruction and division for dialogue and institutions".

Yet, the prime minister would be well within his rights to argue that the promise of both agreements is not honoured while peace walls and sectarian divides abide, paid for with his constituents' taxes.

As he told the Commons last month, "find the savings from those things and invest in a better future for everyone."

It's clear that Westminster wants action on "our shared society" before it will hand fiscal powers to Stormont.

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What is the normal, proper availability of credit?

(3.5 times single salary for creditworthy, securely employed individual?)

What would be considered a normal or proper deposit?

What would be considered a normal rate of interest?

The normal rate of growth, unemployment, an acceptable level of violence?

Are we talking historical trends here?

I'm afraid I don't buy into the banks won't lend cry. They may be choosy, check applications and affordability, and no longer allow benefits as acceptible income, but if you are creditworthy with a reasonable deposit and secure employment you would likely get a loan (at historically favourable terms).

Just because banks don't offer (as they once did) kamikazee, or NINJA - no income no job no assets - loans to every Tom, Dick or Harriet to the satisfaction of EA's doesn't mean they aren't lending. And as I, and we all, own several banks I don't want them using my taxes to reintroduce them.

Neither am I aware of a backlog of cases at the ombudsman from legitimate would be debtors being denied a mortgage. Anyway, like owning a house, It's not a right as some seem to think.

Perhaps massive govt intervention, on top of our own co-ownership will get things back to "Normal".

I don't think anyone here is looking for liar loans or 110% lending etc. We all seen what that done.

3.5x household income would be perhaps on the low side. Most banks refer to 4x or over but this is only one aspect of lending.

What has changed is is FSA requirement on the amount of capital that the banks have to keep in reserve against loans. This means the banks will be reluctant to offer 90% loans. The banks are willing to lend but target that lending at 70 to 80% loans as above this ties up too much capital. Some could say this change in FSA rules was a Government Intervention which forces people, who perhaps normally could purchase towards Co-ownership.

You are correct. Ownership is not for everybody and the percentage of houses in private ownership has been falling over the last 10 years.

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Mortgage rates 'to fall further' says Bank of England

http://www.bbc.co.uk/news/business-22013639

The Bank reported that the rise in lending to those with smaller deposits (less than 25%) was "a little more marked".

However, a higher proportion of people were having loans rejected, as a result of their credit scores.

But even though mortgage rates are getting cheaper, the number of people taking out loans has been falling.

Earlier this week the Bank reported that the number of mortgage approvals for February was the lowest since September 2012.

Someone hasn't read the script!

Danske Re:pay

http://www.danskebank.co.uk/en-gb/Personal/mortgages/Residential-Mortgages/Products/Pages/repay.aspx?tab=2#tabanchor

With effect from 1st June 2013, the interest rates shown above will increase by 0.40%.

Edited by Shotoflight
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No benefit for the poor as the Tories slash and burn

http://www.belfasttelegraph.co.uk/opinion/news-analysis/no-benefit-for-the-poor-as-the-tories-slash-and-burn-29170670.html

There will be further indignities. The spare-bedroom tax will force many tenants in social housing to move into smaller, private-rented accommodation – the only 'subsidy' involved now being that their housing benefit will go to private landlords.

But there are about 73,000 unemployed in Northern Ireland, according to the latest official statistics. There are just 5,405 unfilled vacancies.

So even if every unemployed person competed tomorrow to fill every one of those vacancies (and many could not because of skills or location), 13 out of 14 would still be unemployed the next day. It all comes back to depressed demand.

And depressing demand by cutting the incomes of the poor is particularly stupid, because, unlike the rich whose taxes are being cut, they must spend all they have. True, there will be some delay to the full application of the cuts in Northern Ireland, as devolved ministers have tried to 'negotiate' with London over the detail.

But the Executive has strapped itself for cash with its refusal to raise the £200m or so per year it would glean if the rates included the full cost of water. And, instead of having any coherent policies to boost the demand for employment, such as the Green New Deal backed by the social partners, it is instead to squander £80m on a 'social investment fund' – which even insiders admit will simply be a slush fund for political patronage.

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In a region lagging behind rest of the UK we must do more to encourage growth

http://www.belfasttelegraph.co.uk/business/business-news/in-a-region-lagging-behind-rest-of-the-uk-we-must-do-more-to-encourage-growth-29185855.html

THE latest Quarterly Economic Survey (QES) released yesterday by NI Chamber of Commerce in partnership with BDO revealed that Northern Ireland still remains a lagging region.

Whilst the UK economy overall is showing modest progress across the key indicators including sales, employment, business confidence, etc, Northern Ireland is behind the UK across all key indicators.

Both the manufacturing and services sectors here have among the lowest levels of business confidence across UK regions and the balance of both manufacturing and service firms expecting profits to increase over the coming year is half the UK average.

The survey, part of a UK-wide survey, is the first economic indicator of the quarter. It was worrying to see the number of businesses indicating an intention to recruit has fallen considering the unemployment level in Northern Ireland is above the national average. More worrying, nearly 50% of businesses with vacancies have experienced problems when recruiting staff.

The most recent HMRC figures indicate exports have fallen in 2012 by 6%.

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Probably more to do with the salary levels - Sometimes work doesn't pay.

Totally correct as we tried to recruit a new staff member last month offering above minimum wage in an area where there is high unemployment and we received the grand total of 3 applications! I was totally gobsmacked but one recruitment agent told me that he had been told by countless people it wasnt worth working 40 hours per week when you could sit at home and have the rent paid, free dental and benefits for you and the kids.

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Nice message for potential multi- national investors - they won't "behave" and Govt won't even invest further until they do.

Northern Ireland funding 'depends on shared future'

http://www.bbc.co.uk/news/uk-northern-ireland-22093891

An economic package aimed at helping business in Northern Ireland may be withdrawn if the executive fails to make progress on a shared future.

The package under threat draws together several potential measures.

It includes incentives to establish enterprise zones. There are 24 in England, offering cheaper rates and lower levels of planning control. Northern Ireland projects could also be given access to a UK scheme that funds major infrastructure schemes like roads.

A £40bn pot was established by Chancellor George Osborne in 2012. Campaigners for an upgrade of the A6 road between Belfast and Londonderry have asked that it qualify for help.

Other ideas due for further discussion cover loans for business start-ups and transferring surplus housing on Ministry of Defence sites in Northern Ireland to the Stormont Executive.

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Nice message for potential multi- national investors - they won't "behave" and Govt won't even invest further until they do.

Northern Ireland funding 'depends on shared future'

http://www.bbc.co.uk/news/uk-northern-ireland-22093891

An economic package aimed at helping business in Northern Ireland may be withdrawn if the executive fails to make progress on a shared future.

The package under threat draws together several potential measures.

It includes incentives to establish enterprise zones. There are 24 in England, offering cheaper rates and lower levels of planning control. Northern Ireland projects could also be given access to a UK scheme that funds major infrastructure schemes like roads.

A £40bn pot was established by Chancellor George Osborne in 2012. Campaigners for an upgrade of the A6 road between Belfast and Londonderry have asked that it qualify for help.

Other ideas due for further discussion cover loans for business start-ups and transferring surplus housing on Ministry of Defence sites in Northern Ireland to the Stormont Executive.

Apparently they have been offered these Enterprise zones but cant agree where to put them.

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Wrightbus to invest £15m in staff and development

http://www.newsletter.co.uk/news/business/local-businesses/wrightbus-to-invest-15m-in-staff-and-development-1-4986854

BALLYMENA firm Wrightbus will invest £15million in research and development and staff training, it was announced on Thursday.

Invest NI has offered £3.9million of support, part funded by the European Regional Development Fund, to the company which employs 1,400 staff.

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  • 439 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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