The Conservatives are promising tax cuts. Good for them.
Tax cuts are always more popular than political chatterers think they ought to be, and tax increases are always more unpopular than political chatterers think they ought to be. The chatterers talk a lot and persuade themselves that their opinion about these things is shared, but come election time, provided there are any politicians who have remained unbullied by them, the chatterers are always baffled and disappointed.
Promised tax cuts are appealing to voters, because they have a quite good chance of materialising, and once they do, the voters get to keep the money and spend it how they want.
But when it comes to tax increases, and the accompanying promises of better public services, the picture is very different. From time to time, surveys of the sort that political chatterers take very seriously ask voters a question along the following lines: Would you be willing to accept increased taxes in exchange for better public services? And often the answer comes back: Yes, we would.
However, reality does not ask voters this question. What the promise of increased taxes in exchange for promised better public services actually means is the certainty of increased taxes, but the mere possibility that public services will actually get any better in exchange. The voters’ money might be spent better, but it is at least as likely to be spent on idiotic make-work schemes and political pay-offs. Faced with that question, voters tend to vote: No.
So I say that this is a smart Conservative move. They do not look like they can win any time soon, but this may soften the next blow quite a bit. On the other hand, if the government steals this policy the way it has stolen so many other Conservative policies, that will plunge the Conservatives into further confusion. But I would be quite pleased.
If such tax cuts occur, public services will be no better and no worse than they would have been otherwise. This is because tax cuts are actually a cut in the rate of taxation, rather than in the total amount of tax collected. If tax rates are reduced, the economy cheers up a bit, and the total tax take, from all taxes combined, is as big as ever. On the other hand, if tax rates are increased, as the Liberal Democrats are threatening, the economy stalls, and although the yield from the increased taxes increases, the yield from all the other unchanged taxes declines, and the total tax take remains stagnant. Which is yet another reason why the tax-increases-in-xchange-for-better-public-services idea is so foolish, and why voters are so right to shun it.
One of the greatest mountains the Conservatives have to climb is working out how to circumvent the channels of information through which the public gets its news.
It isn’t at all difficult to understand how public spending could be maintained at its present levels while taxes were reduced. Anyone who has ever run a household budget could grasp it in an instant. The media, however, tries to portray it as an attempt to square the circle and such is the distrust of all politicians in the UK today, that this is the message people believe.
I should add (though perhaps it isn’t necessary on Samizdata) that I abhor the Conservative proposal. Public spending should be cut to the bone. As should taxes.
Wot G Cooper said PLUS, Brian writes: – “However, reality does not ask voters this question. What the promise of increased taxes in exchange for promised better public services actually means …” … is expansion of empires. More staff, more office space required, more phone lines, more faxes, more computers, new job titles, more “support personnel”, more consultants writing more reports, more task forces to study those reports and “report back”.
Michael Howard promised to cut 250,000 civil servants from the public payroll. A quarter of a million and a mere drop in the bucket. He should have promised a quarter of a million the first year, and ongoing reviews to find ways of cutting another 25,000 a year for five years. Those people aren’t going to vote Tory anyway. Nice to see The Grauniad’s public notices section shrink to a page and a half!
“The Conservatives are promising tax cuts. Good for them.”
But probably not good for us.
The Conervatives are going take a (possibly lethal) thrashing in the next election, thus confirming the Political Chatterers view that tax-cuts are unpopular and have been soundly rejected by the electorate.
The lesson that will be drawn from this is that any political candidate promising similar relief can expect to be punished at the polls. Hence none will.
It will be then be two decades before anyone dares broach the subject again.
The reason a majority of people answer “yes” to questions about increased spending on schools n’ hospitals instead of tax cuts is because they know full well the brunt of the tax burden will be borne by someone else.
The aim of collectivism is to ensure the majority of people remain net beneficiaries and are happy to protect their pathetic little privileges. That’s what keeps the system permanently entrenched.
Tim Sturm writes:
“The reason a majority of people answer “yes” to questions about increased spending on schools n’ hospitals instead of tax cuts is because they know full well the brunt of the tax burden will be borne by someone else.”
Precisely! And herein lies the great fundamental flaw in democracy – that it allows the majority to vote itself anything it wants, quite regardless of common sense.
Gordon Brown, no fool, has worked this out and has structured the tax system so that sufficient numbers of voters are net recipients to make render the chances of Labour being voted out of office minimal.
For that to happen will take the (inevitable) collapse of the UK economy. Brown doesn’t think this will happen as a consequence of his socialist policies. But it will. Sadly, after he is out of office, when someone else will be left to pick up the pieces.
Isn’t that one of the paradoxes of polling…the majority always answers “yes” to both questions; “would you support tax cuts?” and “would you support increased taxes for more services?”
“It should be known that at the beginning of the dynasty, taxation yields a large revenue from small assessments. At the end of the dynasty, taxation yields a small revenue from large assessments.”
-Ibn Khaldun, a 14th century Muslim philosopher
Just as true today as it was 6 centuries ago. RR pointed out that a rising tide lifts all boats. But whatever the politicians do, this is not the way to win;
“The truth, which is what elections are all about, is that the tax burden of the middle class has gone up while the tax burden of the middle class has gone down.”–John Kerry, quoted by the Associated Press, Aug. 25
Give thanks to your preferred god(s).
Not sure Europeans have much choice. All welfare states are a pyramid scheme. Eventually the suckers on the bottom of the pyramid get wise and opt out. Then the whole rotten edifice collapses.
The only real natural resource is people. When the state takes too much money, the workers slow down their work. You end up with the typical Socialist State where the workers pretend to work and the state pretends to pay them. Right now most of the productive Europeans are looking to go somewhere else. Some place where they can keep what they produce. Do you blame them?
Eventually the EU house of cards will fall down. Then you will have Europastan, right across the ditch. The Chunnel is pre wired, isn’t it?
If the Chunnel had been there in 1940, the Swastika would not only be allowed in Europe today, but encouraged. Vigorously. On a lighter note, at least there wouldn’t be a muslim problem in Europe. Unless, of course, you lived downwind of the ovens.
“You end up with the typical Socialist State where the workers pretend to work” What was that called? Tufta?
Even worse, the state now pays you not to work. Get yourself on disability (Crikey! I have diagnosed myself with M.E. Send a council wagon of cash and a free car with free road tax asap) and you have a solid income, top this up with some cash-earning sideline and you are made. The higher the taxes heaped on the poor legitimate taxpayers to pay your giro the more you can undercut them in the cash economy. And you can park where you like, which in today’s society is the holy grail.
Can I get a scruplectomy on the nhs?
Disability pension? That could involve some pain (though this isn’t mandatory). However, I’d rather not take the risk and just be one of the ordinary Joe Blows working in the French public service. Thirty-ish years of a 35 hour week, then retire at 50, living comfortably on a pension based upon your last six months’ salary. Sorry, did you mention that these pension obligations are unfunded? Pish pish.
All I can say is that I don’t envy French children.
(By the way, I found the above excellent article a while ago on The Dissident Frogman)
…and will remain so until five minutes after UK joins the Euro and the ECB gets its grubby hands on our exchequer.
…however the likely impressive showing of UKIP could counterweight this.
Prediction:
I reckon the Tories will irrevocably shatter along their well-known faultlines immediately after the election (or perhaps even before the election if some sudden faction-war spirals beyond the election team’s ability to control), losing members to Labour, LDs, and UKIP. The rump of the Tory party will take the LDs old position as no-hoper center party, caught between Labour and UKIP.
There is so much ammunition available for the Tories to be able to keep a continuous pressure up on Phoney and his cronies, such as Tessa Jawohl’s husband dealing in embargoed aircraft to Iran, the Blairs’ new luxury £3.6m home in Knightsbridge, the odious Alan Milburn’s sexual peccadilloes etc. etc. It is just a crying shame to see so many wasted opportunities passed by, missed by the lemming-minded imbeciles who would rather send their own party into the mire and allow Blair to return to power with a massive majority. To have seen Oliver Letwin, normally someone I would leap to the defence of, spluttering his way through tired party dogma and unable to tell us where the cuts in bureacracy would emanate from, yet informing us of the “loss of 235,000 bureaucratic jobs, although those would be achieved by a freeze on civil recruitment and voluntary redundancy” was both sad and rather telling.
I would change to UKIP but I understand they now have major leadership issues without even having a proper party yet.
Something of a mass simplification to say that cutting tax rates grows the economy and hence total tax revenue grows. This is a possibility, but very unlikely in the case of the UK economy, an A-level economics student could tell you that.
Luke writes:
“…an A-level economics student could tell you that.”
Wrong. An A-level economics student in Bliar’s Britain is likely to be both functionally illiterate and innumerate. Much like the average dolt pretending to teach him the subject.
Now cake decorating would be another matter…
And my Counter-Prediction:
Labour will win with a reduced majority at the expense of an increased Conservative and, possibly, LibDem presence in the House. The UKIP will not win any parliamentary seats but is likely to split the anti-Labour vote to the advantage principally of the LibDems.
The following general election is, barring unforseen accident, likely to result in a Conservative victory as the post-Blair Labour party moves to the left. The LibDems will maintain a respectable showing, UKIP will remain a fringe organisation with no serious role to play in British politics and no seats in Parliament.
Spoilers: The EU Constitution referendum could bugger up the whole thing if a narrow Yes vote is manipulated. On the other hand, provided the result is unambiguous one way or the other, it will end the internecine conflict within the Conservative party.
EG
Julian Taylor writes:
“To have seen Oliver Letwin, normally someone I would leap to the defence of….”
Why do people speak so highly of Letwin?
I don’t doubt he’s a perfectly nice man and some of his ideas seem fairly reasonable – but as an effective politician, he’s a complete waste of space, aboslutely the sort of person the Conservatives don’t need in their efforts to win over the great unwashed.
His ‘on the one hand this, on the other hand that’ Grauniad leader-writer style is absolutely confusing to those who think in soundbites (ie most of the electorate) and the only impression he leaves is one of vague, amiable weakness.
The Conservative proposals are pathetically…conservative. A tax cut of £4 billion? Gordon Brown pisses that much against the wall in less than four days. He has created over half a million bureaucratic non-jobs, but they plan to cut less than half that number. They say they can find £35 billion in spending cuts, but will “re-invest” £21 billion of that in “better” public services.
What a bunch of wankers.
I want a Conservative government to be able to propose real and lasting tax cuts. An end to inheritance tax and capital gains tax, an end to tax on dividends and savings, an end to insurance tax, a flat rate income tax of no more than 20% (and even that’s too high). There is no long term future as part of the sclerotic quasi-socialist European model. The Conservatives should offer a real and exciting alternative, but Michael Howard would rather spunk away £30 billion on the spastic slave card scheme. Tosser!
I agree with G Cooper that Oliver Letwin is an oxygen thief. There is absolutely no reason for him, except that he seems amiable enough. After all, he let a stranger into his house to use his loo… with the easily foreseeable result.
And I agree that the average A-level student couldn’t tell anyone anything, except maybe what position David Beckham plays.
Like others above, I am baffled about why the Tories haven’t laid into Blair. They could score a couple of knock-outs a day. I read, for example, that “high powered lawyer” (publicly funded) Cher hauled down £20,000 last year. Zowie! And Toneboy trousers £178,000 salary (that’s in cash, without the free holidays and use of the Queen’s flight, and so on). So Tonny & Cher are pulling in approx. £200K a year. What made them think they could swing a mortage on a £3.6m house in Knightsbridge, hein? Strange that. I read that the mortgage payments are £13,000 a month. Where is that money coming from – or should I say who is that money coming from? I always knew that that toxic couple would get above themselves one day. Now is the time to rake over their last property deal and the Aussie conman. And Peter Mandelson’s property deal could usefully be brought up about now. But will anyone hammer away at an investigation? Not unless The Times or The Telegraph put a strong, intelligent investigative reporter on the case. Rajiv Sayeel (Telegraph) would be my first choice.
And of course they should be shredding Alan Milburn.
IDS came up with and used incessantly the phrase – to good effect in frightening Blair – “No one believes a word he says”. It was turning into a catch phrase, which is what IDS intended – and the stupid Tories let it drop when Howard took over. Now even his own Chancellor’s saying it. The Tories could have crowed and crowed and crowed if they had retained possession of that phrase and then found the Chancellor using it. But no. Another bloody stupid wasted opportunity.
Why don’t they attack the grasping Tonny & Cher personally? Why do people keep pulling their punches when there are so many critically weak spots in their makeup? Tony Bliar’s an empty, opportunistic bag of wind. He has absolutely no substance, as I’ve said before. He’s the Wizard of Oz (or his handler is the Wizard of Oz), manipuating smoke and images while really just being an empty, vapid little man behind a curtain. As I’ve said before, we need a Toto to pull back the curtain. Why, oh why will no one do it?
…an A-level economics student could tell you that
The key is not tax cuts its spending cuts, thats what makes the economy grow. Borrowing to spend and taxing to spend are not very different.
We need to take an axe to the public sector, spray pesticide throughout the weed infested corridors of power. If it facilitates, coordinates, advises or is in any way multiculturally or environmentally aware it needs sacking. Only be removing a vast swathe of useless Tofu eating, Labour voting, Polly Toynbee thinkalikes can we wrench the ownership of this country back.
We need to shout it, and shout it loud. THE STATE IS NOT MY FRIEND, it is a parasite whose feeding frenzy must be brought to an end.
Verity,
You left off a zero in your reading. Cheri is assuredly the higher earner, even if the recordership and numerous holidays eat into the time allotted to briefs these days. But I’d guess the household income approaches the half-million mark. And they never have to buy their own food or run a car…
They appear to be trying to let to cover the mortgage, so paying the mortgage for now would not be an issue, were the site not better suited to post-office security advice than the luxury lettings game. But they’lll have got the mortgage on the basis that ex-Prime Ministers generally do rather well for themselves on the lecture circuit and in consulting.
Verity and GCooper – I’ve seen you and others discuss Tone’s mortgage on here before. Please don’t think I’m going into bat for this fellow, but let me continue…
3.5 mill does sound like a large amount of cash to borrow, however, how long has the guy been in parliament? Would I be right in saying that whilst living in 10 Downing Street he can pretty much bank most everything he makes (and I spose she can, too), meaning free accommodation, food, transport, household expenses, etc.? Maybe not the kids’ school fees and miscellaneous stuff, but most of the big ticket items. How long has he been in the top job for? How long have he and his missus been together, and what kind of paid work have they performed during that time? What assets did they bring to the marriage? Have they inherited anything? Surely, with prudent investing alone it’s possible that they’ve built up a sizeable asset base over a couple of decades on their substantial combined incomes – perhaps an asset base large enough to provide returns that adequately maintain a mortgage of 3.5 million quid. My point is that it’s most likely the Tories have already thoroughly investigated Tone and Chezza’s acquisitions and assets as best they can. And since we haven’t heard anything negative about these deals that rises above speculation, perhaps they’re kosher. Perhaps. I agree that there are plenty of things that Tony can be hauled over the coals for. But the above may not be one of them.
… Oh and BTW, it’s not Knightsbridge. (You can’t buy much in Knightsbrige for that sort of money any more.)
I’m Sufferng… writes:
“Verity and GCooper – I’ve seen you and others discuss Tone’s mortgage on here before…”
Point of order. I think you will find I have never even mentioned Bliar’s mortgage – either today, or before.
Which, of course, doesn’t mean that I do no agree that he is a shifty, evasive, mendacious little crook with an ego even de Gaulle might have envied.
And as for his repulsive, hatchet-faced flake of a wife, there is little that is odious that I couldn’t imagine her doing.
But I don’t believe I mentioned their mortgage.
GCooper – I stand corrected. I direct my 2.33pm post to Verity, if she wants to consider it.
Regards,
Guy Herbert
And they never have to buy their own food …
I can’t find anything on Google about the Prime Minster’s allowances. But is this right? I’m even paying for the grinning idiot’s bloody food?!
Since we are all doing our predictions for the upcoming GE:
I predict that UKIP will gain some seats maybe even 3 or so, probably in the South West where they are at their strongest. The LDs will do fairly well but not as well as they had hoped. The Tories will be thrashed as badly as they have been in the past two elections. If this happens they will cease to be in their current configuration. The wets will head to Labour, some of the authoritarian caring & sharing variety will head to the Lib-Dems and the “rump” (the CWF set for lack of a better term) will solidify its right credentials thus making UKIP irrelevant.
In Parliament the rump will find themselves aligned with UKIP rather often and will immediately make moves to re-intergrate that party.
Unless, of course, the Conservative do a Canadian Tories and split into two-groups: one more centrist and one more to the right.
Guy,
I do apologise for that slip. He does of course now own a property in Bayswater, not Knightsbridge. According to the now infamous Peter Foster (he of the Cheriegate affair),
So maybe they could feasibly own such a property after he left office, which leaves open to speculation how a serving Prime Minister approached a mortgage lender on the basis of his future, unguaranteed, earnings rather than his existing income.
With reference to conservtive ‘tax cuts’ here in the US, it ends up being a crock as services are not cut (though there might be some ideological shifting of where it is spent) and so borrowing increases (on average). Since the government controls interest and inflation and money supply to a great degree, they elect to simply put off the debt until later and try and pay for it with diluted dollars. But in doing so they are effectively diluting everyone’s savings as well and when it’s boiled down, funding of services now with debt is paid for with a de facto ‘savings tax’.
At any given time there are people and there are resources, and the labor expended by the former over the latter. The rest is allocation. Whether one wants to think in the short, mid, or long-term it’s all the same – State sanctioned interdependence (and the healthy skim taken by the reallocators). It just takes a little more smoke and mirrors to attach people at the hip when they don’t know they actually are. Effectively we are a Socialist State that is doing a decent job at convincing people they live in a Capitalist one.
But by no means should a conservative ‘tax cut’ in the US be regarded as anything of the kind during ‘war time’ and adding a helping of social spending not seen 40 years. The line now is, as we are cutting taxes and increasing spending, is that there is nothing wrong with defecits and debts. The conservatives are just as collectivists and the liberals, their agenda is just slightly different. But the root rationale is the same, and should be rejected by libertarians with equal vigor.
Suffering, Actually, another point of order: I also haven’t addressed, as far as I can remember, the Blair’s mortgage before. I am not in Britain and don’t follow stories about British property as I no longer have a frame of reference. I only began to notice insistent stories about the Blairs’ latest ill-starred property venture a couple of weeks ago.
Guy Herbert, in making a point specifically about money, I assure you I didn’t leave a zero off. I read yesterday – or the day before – that last year Cher made £23,000. Not even enough for two mortgage payments, as the writer noted. Last year, she “earned” (if that is not too strong a term for Cher’s occupation as a human rights pleader) around £180,000. Slim pickings for a “high powered lawyer”. So Toneboy makes £15000 a month. Presumably Gordie insists that he pay tax and national insurance on that. So he’d take home, how much? £10,000 a month? Less, perhaps? And Cher would kick in with another few hundred – presuming she pays tax and national insurance out of her £23,000. Catriona Davies writing in The Telegraph said: “Assuming the Blairs found a deposit of close to £1 million – or 25 per cent – their mortgage is still almost eight times their combined income.”
Even with everything free, and we know Cherie accepts free clothes from designers with a death wish, and buys second hand things on eBay, how are they swinging a £13,000 a month mortgage payment? OTOH, this is interesting: (Link)
Pete_London has an interesting question: Don’t they even pay for their own food? Surely they must! – except for official entertaining.
Re their untennanted property in Bayswater, of course, they made a bad choice, which gives me enormous pleasure, but I don’t think (although I don’t know) banks lend money based on possible earnings five years down the line – especially to someone with well-publicised heart problems.
Suffering, before they got this gig, they had to pay for things themselves and they had three children or “kids” as Toneboy styles them. They sold their house in Islington at the wrong time when they moved into Downing St instead of hanging on to it.
I agree, probably the Tories have investigated as much as they can, although would they use anything negative they found? I’m not sure this bunch would have the nerve. They don’t even try to make any capital out of Alan Milburn. They’re playing by Tony Blair’s rules, which is ridiculous.
I can’t help feeling that IDS would have done all this better. He has a visceral hatred of Toneboy. I’m beginning to regret Howard, although I had high hopes at first.
Verity – My apologies, I must be mixing you AND GCooper up with someone else. I’m sure the topic of Tony’s mortgage was broached recently, however. Anyway…I suppose the Tories are rather limp-wristed these days. I remember, back in the day, hearing them described – probably by stupid lefties – as a party devoid of ideology (that’s clearly wrong in regards to Thatcher, but I digress); a ruthless party, an amoral machine designed to grab and stay in power. Times have changed…
Regards,
While trying to trace where I read that Cher made £23,000 in her law practice last year, I ran across this, put out by the American pr firm she’s hired to find her speaking engagements in the US:
“The subjects could be wide ranging because Mrs Blair, who practices as a QC under her maiden name, Cherie Booth, is an expert on employment law, education law, public law, human rights and EU trade law.”
Gosh, my last post was a particularly inelegant wielding of the English language. I must stop drinking wine whilst commenting.
writes A.I.Dodge.
Plausible – though I’m not aware that UKIP is strongest in the SW, my neck of the woods. The party might well attract sufficient votes in my constituency to destroy the long-term Tory incumbent’s ever-shrinking majority, but I consider it wholly unlikely to win: it will simply let in the LibDems who nearly won last time, a depressing prospect.
This thread has demonstrated yet again the wistful attitude of many toward the Tories: I know many here are more conservative than libertarian, of course, but so little ideological water, and so few practical measures (a few percentage points on tax here and there) separate the major parties it’s difficult to understand why anyone should give the Tories the benefit of any doubt.
As for UKIP, the card pushed through my letterbox from its Newton Abbot regional HQ offers a pensions increase of £25 a week as an alternative to our “£30m a day to Brussels”; slightly wacky promises to “stop planting GM crops in Britain” and to “give matrons full authority for hospital hygiene”; and a more alarming proposal to “let the people decide on moral issues like capital punishment and genetics through binding referendums”.
I’m unimpressed by their curious mix of statism with referendums that seem likely to introduce a tyranny of the majority on important issues. They sound too much like the weird buggers who ran my school’s tuck shop.
It’s not just the Tory party that needs to shatter, the same is true of Labour (“Old” and “New”) and the Liberal Democrats as well. Although in the latter case that has been happening quietly for some time – libertarian instincts within the Liberal Democrats are increasingly despised and attacked. (I know, I was there).
The Market Economy has won, it is even embraced by Russia and China. The new faultlines are between libertarianism and authoritarianism. All political parties need to split and reform along these lines.
The ‘A’ level economics student knows nothing. Hell, even many university economics graduates know nothing, not to say of those teaching economics at the ‘A’s! The A levels teach mainly Keynesian with some monetary policy, with a lot of emphasis on the deflationary gap, a theory long debunked by the Austrians.
I pointed out the Austrian school to a friend of mine who got a 2nd class honors in economics at university, and he told me he had NEVER heard of them before. I did the same for the would-be economic teachers in my english language class. Only three out of ten had heard of the Austrians, and only one of the three had a clear definition of the Austrian ultra-lib policies.
I find it pretty sad at times when I find myself knowing more than some people who are supposed to be educated in their respective fields.
TWG
http://www.ivillage.co.uk/newspol/polpeople/top20/articles/0,10233,162333_179669,00.html
Suggests that Cherie Booth’s salary before joining Matrix was circa £250,000. The article suggests this may have been doubled when she changed chambers. That would support that level of mortgage payment, but I assume they had a fair amount of cash in the bank from the sale of their house in Islington.
Tony, I based my observations on UKIP’s performance in the SW in the European elections. The prospect of any more Lid-Dem MPs is rather troubling one.
DW: Your point is a good one.
Cher Blair does publicly funded “work”, like representing the rights of the “transgendered” – as though there really were such a thing – and it doesn’t pay well. That’s why she’s hawking herself round the United States offering to give speeches on practically any subject, and meet people over cocktails for money.
They may not have done anything illegal to get their mortgage – although I wouldn’t count on it with this pair of chancers – but they are definitely hurting for money. They can’t afford to fix that white elephant in London up until they get a tenant.
and it doesn’t pay well.
It doesn’t? I’ve had a look on google and a lot of the work she’s done on this stuff is backed by some pretty serious Charities.
She also does a fair amount of employment law. There’s a lot of Cherie Booth QC v. The Crown stuff around pensions rights and the like. There was a recent landmark ruling on this stuff that was referenced as her work.
A timely Comment piece from The Sunday Times just gone (16 January).
Being on Tony’s arm is doing Cherie’s earning power some harm
The true extent of Cherie Blair’s plummeting earnings from publicly funded work as a lawyer underline the couple’s desperation as they face an expensive makeover of their £3.6m London townhouse in an attempt to attract a tenant.
Cherie’s duties as the prime minister’s consort were known to have reduced the £250,000 a year she reportedly once earned, placing more pressure on Tony Blair’s salary of £178,000 as they struggle to meet the £13,500-a-month mortgage repayments on their property in Connaught Square.
Atticus can reveal that Cherie’s payments from legally aided work have fallen from £178,068 in 1999-2000 to a mere £26,448 in 2003-04. Not even two months’ mortgage.
Is there much evidence that tax cuts actually raise economic growth? Our growth here in the UK was faster in the 50s and 60s [when the basic rate of tax was 40% or so and the higher rates were 60, 70, 80%] than it did in the 80s.
Right-wingers love to sing the praises of tax cuts and claim they could revitalise the British economy. But, in fact, after years of Thatcherism and post-Thatcherism, Britain still has lower hourly productivity than Germany, France and some other countries [the 35-hr weeks in France that right-wingers seem to get outraged about have not harmed [and maybe even boosted] French _hourly_ working productivity, which remains higher than the UK’s.
geriatric labour – That is not the case. Anyone who has lived in France will tell you that their productivity is very much affected by the 35 hour work week. They don’t slack, but they cannot accomplish as much in 35 hours as they can in 40 or more hours.
Also militating against France being a hive of activity are the endless public holidays – plus the ‘bridge days’ they’re allowed to take if a holiday falls on a Tuesday or Thursday. And their annual month-long vacation.
Nor is their productivity helped by the two-hour lunch. They’re all out of the parking lots by the time the clock has finished striking twelve, but they often don’t drift back in until almost 2:30.
Pete_London – That was where I read the original information that Cher Blair just earned around 20K last year. Atticus. Thank you.
Can’t agree with you Brian. The Tories’ abject failure to challenge the post-war consensus that public services are a good thing, means that they are just another variant of managerial socialism. As such, why should any libertarian care about their fate?
Their claims to be able to “save” money whilst matching labour spending plans are as risible as they are spineless. I hope they are slaughtered at the next election and they will thorougly deserve it. There is nothing in that party that is of the remotest use to libertarians. As somebody else above commented, “tossers”.
no doubt people do less work in 40 hrs than in 35. but i was talking about _hourly_ productivity not total productivity.
working longer hours [as we do in the UK] to get a similar amount of productivity to other countries than work slightly fewer hours on average suggestes that we are inefficient
the aim in economics should be to work _smarter_ rather than simply work longer [otherwise slavery, which is a system with v long working hrs would be the most efficient system!].
sorry – the 1st line in my post should read “no doubt people do more work in 40hrs than 35”!
Of course it was fast. Economies always have faster growth on the upswing after a recession than they do the rest of the time. In terms of the private economy, WW2 was a massive recession and the unwinding of the wartime economy, releasing people and capital into the marketplace again was a huge liberalisation. We also had the end of rationing and the resumption of international trade. Growth might be at a more modest pace now but it is from a much higher base and the productive factors (people, capital and knowledge) in the economy are already near fully deployed. Growing the economy further requires re-allocation of resources in a more efficient way. Lower taxes let people keep more of their own money to use as they wish. This re-allocates resources which are being used inefficiently by Government back to private individuals who will spend it on things they actually want or invest it which will provide more productive capacity.
i thought the economy was at pretty much maximum capacity in 1945 as we had full employment and full deployment of the capital stock. everyone thought there was going to be a recession after ’45 [just like there had been after WW1].
However, full employment lasted into peacetime as the growth was higher than anticipated and was enough to create employment for people who left the army and lost jobs in war indstries.
No doubt economic theory does suggest that private spending is better for the economy than govt spending. However, i am not sure reality always bears this out. The countries with the highest taxes do not have the lowest levels of output [compare scandinavia with greece or portugal within the EU; let alone comparisons between the EU and developing countries].
geriatriclabour
I think the paradox is explained by the way growth is measured in govt statistics. It includes govt activity, however useless they are in providing things people actually want. As you say, the economy was in full stretch in 1945 – it was just producing tanks and munitions, while stuff people actually wanted such as butter and bread, let alone meat were underprovided. In releasing the wartime hold on the economy, the government allowed all that pent-up demand to find expression.
As for highest taxes not always corresponding with the lowest output, you are looking for a correlation which does not always exist because tax rates are not the only factor which constrains economic growth.
Scandinavia has a big welfare state but its companies have historically been more free from govt interference.
The sort of social compact in Germany between industry and the unions during the 1960s and 1970s was probably better than what the UK had then with militant trade unions calling strikes all the time.
Looking at the UK now, we have a healthy-looking growth rate but that is exaggerated by counting the 250000 extra civil servants Labour has put on the state payroll as part of national output, whereas they are probably involved in destroying prosperity rather than creating it.