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UK General Election 2015 | Conservatives win with an overall majority
- Thread starter langster
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My word, you are being particularly belligerent about this.
The obvious answer is that they don't, but then they never proposed such a project in the first place. I wouldn't sniff at 10-20bn in savings however, money which could be used for either deficit reduction or aiding other departments.
Given the state of transport right across the UK and the benefits of near-term infrastructure projects to an area's regeneration, was HS2 the right move to take in 2010?
Its an error to compare a country's finances to a company (or even worse, a household). Government spending is so huge that it can directly drive or stunt the economy. You can't assume that its possible to cut back spending during an economic boom, and for that boom to be unaffected.
Tax evasion is the politicians' new magic money tree
All the big parties say they'll find billions of pounds by tightening up on tax collection, but is it really so easy?
By Ashley Kirk
29 Apr 2015
When elections come round, politicians have a habit of discovering magic money trees, sources of revenue they claim they'll tap to fund their promises -- so long as they get elected.
The favourite money-tree used to be "efficiency savings", a promise to make Whitehall departments and the public sector leaner and more cost-conscious. Sometimes, the politicians appeared to suggest that just by improving the way civil servants ordered new paper for the photocopiers, so many billions could be saved that all tax could be abolished and every town the country could have new bypass, paved with gold.
Oddly, efficiency wasn't quite enough, so the politicians have had to find a new money tree which they say will fund their plans. It's called tax evasion and avoidance.
All the major parties are promising to clamp down on evasion (illegal moves to get out of paying tax) and avoidance (legal measures to reduce your tax bill). They say they can find billions of pounds this way.
But experience suggests that clamping down on tax evasion and avoidance rarely produces quite as much money as we are promised by politicians.
We had a look at the numbers to see if their plans add up.
In their manifesto, the Conservative Party pledged: “We will raise at least £5 billion from continuing to tackle tax evasion, and aggressive tax avoidance and tax planning, building on the £7 billion of annual savings we have delivered in this Parliament.”
According to the Institute for Fiscal Studies, that money is what keeps the Tory tax and spending proposals "revenue neutral", meaning they aren't actually giving any money away overall: the squeeze on tax evasion and avoidance offsets giveaways elsewhere like a higher starting threshold for 40p tax. So the Tories are using the magic money-tree to fund tax cuts.
Labour hopes to raise £7.5 billion by clamping down on avoidance and evasion - which includes changes to "non-domiciled" tax status. Ed Miliband’s party has laid out two key areas which will be partially funded by tackling tax avoidance:
The Lib Dems have a target of raising £7 billion by 2017-18 from clamping down on tax avoidance and evasion - a figure rising to £10 billion by 2019-20.
After 2017-18, the extra amount is intended to fund an increase in the personal allowance from £11,600 to £12,500 between 2017-18 and the end of the parliament.
Are the promises deliverable?
History shows us that it is hard for politicians to deliver on their promises to make money from tackling tax avoidance.
In 2012, George Osborne promised that measures to tax British domiciles who make banking deposits in Switzerland would raise £3.12 billion for the Treasury in 2013-14. By 2018, revenues would be £5 billion, he said, with most of it coming in the early years. But during 2013, just £818 million was raised from the move.
The Coalition government says that it has already raised £7 billion by clamping down on avoidance. It claims 2013/14 was a “record year for compliance activities”.
In its latest figures, however, HMRC estimates that the Exchequer lost £3.1 billion through avoidance and £4.1 billion through evasion in 2012-13. The total is falling too: in 2010-11, HMRC estimated £5 billion was lost through avoidance.
In total then, HMRC believes that a couple of years ago, there was a total of £7.2 billion in uncollected tax that the Treasury missed out on because of evasion and avoidance. We don't have more recent figures, but on that basis, it's quite hard to see how the parties can reach their own targets - the Tories’ £5 billion, the Lib Dems’ £10 billion and Labour’s £7.5 billion - from this source.
Maybe the magic money tree isn't so magical after all.
Policy explainer: tax
Party stance...
Telegraph verdict
This should be the Tories' trump card, since they are the party most likely to put money back in voters' pockets. But they must do more to explain to voters (especially those on lower incomes) how five more years of Tory rule would benefit them.
http://www.telegraph.co.uk/news/gen...-is-the-politicians-new-magic-money-tree.html
All the big parties say they'll find billions of pounds by tightening up on tax collection, but is it really so easy?
By Ashley Kirk
29 Apr 2015
When elections come round, politicians have a habit of discovering magic money trees, sources of revenue they claim they'll tap to fund their promises -- so long as they get elected.
The favourite money-tree used to be "efficiency savings", a promise to make Whitehall departments and the public sector leaner and more cost-conscious. Sometimes, the politicians appeared to suggest that just by improving the way civil servants ordered new paper for the photocopiers, so many billions could be saved that all tax could be abolished and every town the country could have new bypass, paved with gold.
Oddly, efficiency wasn't quite enough, so the politicians have had to find a new money tree which they say will fund their plans. It's called tax evasion and avoidance.
All the major parties are promising to clamp down on evasion (illegal moves to get out of paying tax) and avoidance (legal measures to reduce your tax bill). They say they can find billions of pounds this way.
But experience suggests that clamping down on tax evasion and avoidance rarely produces quite as much money as we are promised by politicians.
We had a look at the numbers to see if their plans add up.
In their manifesto, the Conservative Party pledged: “We will raise at least £5 billion from continuing to tackle tax evasion, and aggressive tax avoidance and tax planning, building on the £7 billion of annual savings we have delivered in this Parliament.”
According to the Institute for Fiscal Studies, that money is what keeps the Tory tax and spending proposals "revenue neutral", meaning they aren't actually giving any money away overall: the squeeze on tax evasion and avoidance offsets giveaways elsewhere like a higher starting threshold for 40p tax. So the Tories are using the magic money-tree to fund tax cuts.
Labour hopes to raise £7.5 billion by clamping down on avoidance and evasion - which includes changes to "non-domiciled" tax status. Ed Miliband’s party has laid out two key areas which will be partially funded by tackling tax avoidance:
- 8,000 more GPs, 20,000 more nurses, 3,000 more midwives - also funded by a Mansion Tax and levy on tobacco firms.
- Cut in tuition fees to £6,000 - also funded by restricting tax relief on pension contributions for the highest earners.
The Lib Dems have a target of raising £7 billion by 2017-18 from clamping down on tax avoidance and evasion - a figure rising to £10 billion by 2019-20.
After 2017-18, the extra amount is intended to fund an increase in the personal allowance from £11,600 to £12,500 between 2017-18 and the end of the parliament.
Are the promises deliverable?
History shows us that it is hard for politicians to deliver on their promises to make money from tackling tax avoidance.
In 2012, George Osborne promised that measures to tax British domiciles who make banking deposits in Switzerland would raise £3.12 billion for the Treasury in 2013-14. By 2018, revenues would be £5 billion, he said, with most of it coming in the early years. But during 2013, just £818 million was raised from the move.
The Coalition government says that it has already raised £7 billion by clamping down on avoidance. It claims 2013/14 was a “record year for compliance activities”.
In its latest figures, however, HMRC estimates that the Exchequer lost £3.1 billion through avoidance and £4.1 billion through evasion in 2012-13. The total is falling too: in 2010-11, HMRC estimated £5 billion was lost through avoidance.
In total then, HMRC believes that a couple of years ago, there was a total of £7.2 billion in uncollected tax that the Treasury missed out on because of evasion and avoidance. We don't have more recent figures, but on that basis, it's quite hard to see how the parties can reach their own targets - the Tories’ £5 billion, the Lib Dems’ £10 billion and Labour’s £7.5 billion - from this source.
Maybe the magic money tree isn't so magical after all.
Policy explainer: tax
Party stance...
- Conservative: Deficit eliminated by 2019 without raising taxes. Inheritance tax threshold raised to £1 million.
- Labour: Abolish the non-dom tax exemption, introduce mansion tax on homes worth over £2m and reintroduce the 50p top tax rate.
- Liberal Democrats: Increasing the tax-free allowance to £12,500, £6 billion in tax, and £6 billion from tax evaders.
- Ukip: Those on minimum wage would be spared tax altogether and inheritance tax would be scrapped.
- Green: A "wealth tax" of 2 per cent would be introduced on those with assets of more than £3 million.
- SNP: 50p tax rate for higher earners and full fiscal autonomy for Scotland.
Telegraph verdict
This should be the Tories' trump card, since they are the party most likely to put money back in voters' pockets. But they must do more to explain to voters (especially those on lower incomes) how five more years of Tory rule would benefit them.
http://www.telegraph.co.uk/news/gen...-is-the-politicians-new-magic-money-tree.html
Nothing like a good old tax bribe to hopefully break that deadlock.[URL said:
You can however make the case for a high degree of profligacy and mismanagement on the part of successive ministers, as from Health to Defence the coalition inherited departments in vulnerable if not dangerous condition.
This just takes us back to square one. Those depts weren't vulnerable until after the economic crash, which didn't come about as a result of Labour's spending policies.
Are people really that fussed about tax? Paying tax doesn't bother me, I just want it spent well.
Edit: Actually, I say that, a friend of mine worked as part of the team that dealt with Guy Hands tax decision to move to Guernsey. So I guess some people really care about tax.
It's not cutting back on spending; it's being responsible about spending. Increasing spend by 5% year on year between 1997 and 2007 would have lead to a budget surplus of around £25b in 2007. Increasing spending by 4% year on year would have lead to a budget surplus of just over £100b in 2007. This isn't austerity or deep cuts, it's a large but responsible increase of public spending year on year.
Currently our business model has been: 6.5% year on year increases for 11 years (roughly £375b to £620b), followed by flat spending for 5 years and probably a 1% increases for another 5. If we stuck to 4% yearly increases over the past 15 years we would have no budget deficit, we'd have very little National debt, we'd have had no austerity and we'd be in a much better place moving forward.
Are you really suggesting that this spend, spend, spend and then slash & burn governance is helping the economy? A solid, stable, affordable growth in spend is far more beneficial to the economy.
They didn't come about as a result of their spending policies, but they did severely exacerbate the problem. Controlling spending throughout the late 90's and 00's would have basically meant no austerity nowadays.
Imagine if we had £500b sitting in a bank account when the recession hit and we could increase public sector wages and initiate large scale re-development projects to reignite the economy. That would have severely limited the effects of the recession. Imagine the difference between losing your job without having any savings vs losing your job with the cushion of a years salary in savings.
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If the economy & everything else had stayed exactly the same. There's no reason to think it would.
That's a red herring & not the point I was making.
Isn't it obvious? They're well aware that people identify the promises of the Tory party as meaningless so they're proposing a law to actually prevent themselves from cheating their voters (or at least until needed then they'll repeal it blaming the circumstance on Labour).
I'm sick of politics treating everyone like a 4 year old. They know this is meaningless and ridiculous yet they're willing to push it as they believe voters to be that stupid.
As do most if not all people i should imagine, but how many believe it to be so? If there is a lack of trust in the system then it is only natural for people to seek a degree of protection from it.
A friend of mine is a carer of sorts for his grandfather, it reached a point where he would struggle to prepare meals so naturally they approached the council, however the service was so poor (one meals was raw bacon ) that they had no choice but to remove themselves from it. Some months later the local authority even attempted to impose its elderly care provider; a private firm was sought and now delivers a superior standard of assistance.
At present the public incur significant taxes only then to have them returned in the form of credits or the like, besides jobs for bureaucrats it all seems rather unnecessary.
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Of course they are! Anyone who is fussed about their money is fussed about tax.
It is a statement of intent as well as a touch of PR; was the coalition being equally shallow when it passed into law the UK's 0.7% on foreign aid?
There's no reason to think the economy would be significantly worse either.
During the period of 1993 - 1997 the economy was growing at a rate of between 2 - 5%. This was whilst the budget deficit was reduced from £51b to £16b and spending increased at an average rate of 4.5% per annum. During the period between 1997 - 2007 the UK similarly experienced growth of between 1.5 - 5%, but also saw spending increase far more dramatically (6.5% year on year).
Basically a significant shift in spending did not change the growth in GDP.
Fair enough. The fact is however that spending more than you receive is a cardinal sin whether you are a family, a business or a country. No country gets into serious trouble by running a budget surplus, whereas the Nations that felt the worst of the recession did so because of their budget deficit (Greece, Ireland, Italy, Spain etc).
The next recession that occurs in 10, 15 or 20 years I want to see the UK Government in a position to say "OK, now is the time to start spending the £500b we have managed to save up from the good times: pay increases for the Public Sector, massive rebuilding projects of Roads, Schools and Hospitals to benefit the hardest hit sectors (always Manufacturing, Construction etc), millions more houses to be built, tax breaks for businesses who otherwise will be making redundancies" etcetc.
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That was in the 2010 manifesto of all 3 parties and serves as a very strong deterrent to amend policy. It would be far too politically dangerous for any party to look at amending.
This is just a 'law' for the length of a term is it not?
Indeed so, however were they to renege at any point it would also be politically damaging. Labour have repeatedly questioned Tory intentions with regard to VAT, this would put down a marker to contradict those accusations. One or the parties could put forward a similar law for NHS spending over the course of the next Parliament, as opposed to "by 2020" (or if Labour can shakedown enough people) we'd have a defined and accountable proposal. With manifesto pledges being looked upon with increasing cynicism, it could be a worthwhile tool in a few policy areas.
Not hugely important, but this is pretty disappointing. I hate hearing all numerically illiterate we are as a country.
http://www.theguardian.com/politics...general-election-2015-stats-training-numeracy
http://www.theguardian.com/politics...general-election-2015-stats-training-numeracy
Lies, damned lies and statistics: 220 potential MPs sign up for stats training
Candidates in the general election have signed up for a workshop aimed at brushing up their numeracy skills
‘Let me tell you about my statistical knowledge.’ Photograph: Kirsty Wigglesworth/AP
More than 200 candidates hoping to enter the House of Commons after the general election on 7 May have pledged to attend a workshop on how to interpret statistics in public life.
It is part of a campaign by the Royal Statistical Society (RSS) to get parliamentarians to acquaint themselves with the use of data. Of the 220 candidates who have signed up, 31 are standing for re-election.
They include Vince Cable, the Liberal Democrat business secretary, Richard Harrington, the Conservative party vice-chair, and Anne Begg, Labour’s work and pensions select committee chair.
The difficulty some parliamentarians have with statistics was revealed this year when 97 MPs were asked: “If you spin a coin twice, what is the probability of getting two heads?”
The answer is 25%. However, 47% of Conservatives and 77% of Labour MPs got this wrong. This is despite more than three-quarters of Conservatives saying they felt confident dealing with numbers.
The campaign, with the hashtag #ParliamentCounts, has seen supporters send more than 2,000 messages to candidates standing in 142 UK constituencies.
Hetan Shah, executive director of the RSS, said the organisation was planning a last push before the election.
If you want to lobby candidates in your constituency to take the workshop, visit the RSS website.
Perhaps you could source that? When I look into it I can only see that the structural deficit as a proportion of GDP only exceeded 5% twice, in the immediate aftermath of the last two recessions (presumably as tax receipts fell). Otherwise its been somewhat similar since the early 80s.
Either way, all you're doing is stating is what did happen, its not showing that changing the past would have made no difference.
You kind of hint at the point here, but then seem to miss it.
That £500Bn cashpile you think the Government should have squirrelled away would come at the expense of "pay increases for the Public Sector, massive rebuilding projects of Roads, Schools and Hospitals to benefit the hardest hit sectors (always Manufacturing, Construction etc), millions more houses to be built, tax breaks for businesses who otherwise will be making redundancies" in the intervening period.
With all those things not happening, with all those businesses not having the work to employ new staff and with people not getting the pay rises to drive sales of goods and services, do you think that the economy would not be hindered at all?
Not sure what you're getting at here. Social care services are commissioned (ie sub-contracted) to the private sector most of the time anyway (sometimes NFPs), so they've just gone from one private company to another. Except presumably they're paying more for the privilege, which is fine, but makes a side by side comparison difficult to call.
And people complain about the Telegraph; why does the Guardian draw attention to the lower figure when nearly three-quarters of Labour MPs expressed a similar confidence.
This maths proposal of Labour's is all fine and well in theory, but is there space in the average state school's timetable? Let alone the staff to teach these classes. The managing of personal finances ought to key part of maths at that age range too.
While we are at it i'd like them to introduce a spoken English exam at 16. Oh and a minimum proficiency with home-ec should be met too.
I haven't got the time to correct all of your mistaken economic assertions, but I will point out the simple fact that Spain was in fact running a budget surplus before the 2008 crash.
http://news.bbc.co.uk/1/hi/business/7257999.stm
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They have gone from the council provided service which was negligent and extortionate, to a far superior one for a comparable cost. If people can't trust government to manage and spend their taxes wisely, then of course they are going to be concerned about it.
Well if they were paying for the service then it hardly seems fair to call it a waste of taxes.
It's somewhat difficult to source since there are several different websites that quote each different figure (GDP, deficit, gross spend etc):
A few of the sources I used were:
http://www.theguardian.com/news/datablog/2010/oct/18/deficit-debt-government-borrowing-data
http://www.ukpublicspending.co.uk/uk_gdp_history
http://www.ukpublicspending.co.uk/total
As well as wikipedia for GDP levels etc.
The problem is the Country doesn't need those excesses when it is doing well. Companies are not looking to make redundancies when the economy is growing by 3-4% a year so don't need tax breaks. People are not desperate for that extra 2% pay rise, when they are already getting a 3-4% pay rise. The Construction industry doesn't need the additional work of excess public sector spending on Schools, Hospitals & Roads when it already has a full order book.
People need a helping hand when things are difficult, not an extra helping hand when things are already pretty damn good.
There is no point artificially inflating an already inflated economy, there is great need to artificially inflate a recession hit economy.
Anyone watched the Brand - Miliband interview yet?
The right-wing press are obviously going to lose it, but I'm mostly reading on twitter that both come across well, and importantly, 'genuine and real'. Will make up my mind after work.
The right-wing press are obviously going to lose it, but I'm mostly reading on twitter that both come across well, and importantly, 'genuine and real'. Will make up my mind after work.
I'm not saying that having a small budget surplus will make you bullet proof when a recession hits. I'm saying like with any person or Commercial entity, having money in the bank when the hard times hit makes things a little easier to deal with and the more money you have in surplus the easier it is. If Norway has to dip into its sovereign wealth fund (that is more than a years GDP) to stimulate growth, that's fine and good. If the UK wants to stimulate growth we have to borrow, borrowing leads to an increase if annual interest liability and a decrease in the spending budget for the following year; unless of course you borrow again, which is like chasing a bad bet.
My general view is that when the economy is booming, you increase spending but keep a little back for times of hardship. Do you disagree with the general point that this is a fiscally responsible thing to do?
That was in addition, the council wished to foist unrequested services on them.
If you are contemplating an attempt to convince me that local government is efficient and well-run, i really wouldn't bother if i were you. Whoever happens to be in overall control it seems to make little difference.
There are enough black holes in departmental budgets and procurement fiascos to testify to the competence of central government, at least to a worrying degree.
But if we might return to your original point, are you satisfied with the manner in which your taxes are dispersed?
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Yeah, mostly.
The Daily Mail's terrible attempt at mocking Ed & Brand in their paper today, before watching the video of course.
Here is the interview for those who haven't seen it.
Both had their respective narratives and were able to them pretty comfortably. As an interviewer i thought that Brand was weak and blandly repetitive, whilst Miliband said nothing new or of import. Ed dodged a few points yet he was right to defend the democratic process. I'm not sure whether it'll even go down as a footnote in the campaign when people look back upon it.
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On the other hand the exchange rate of the pound would have soared and we would have been hit even harder during the recession because of it.
Obviously it wouldn't just be a chunk of money lying in an interest free account (that was a simplification to make the point). It would be a diversified sovereign wealth portfolio. See Norway as an example.
Latest from Ashcroft has neither Clegg nor Farage winning their seats, though both are very close (Clegg -1, Farage -2).
I think Clegg will probably hang on (admittedly based on little more than a personal gut feeling).
I think Clegg will probably hang on (admittedly based on little more than a personal gut feeling).
Keynesian economics basically says ramp up government spending (or cut taxes) during a recession and exercise some restraint during the boom. I broadly go along with that.
My point was that the focus on government borrowing at the expense of other economic issues is unhelpful. The growth rate, unemployment rate, balance of payments, productivity, private sector debt and balance within the economy are all important parts of the economic consideration. To look at the government fiscal balance ahead of all these other indicators is myopic and dangerous.
Indulging in heavy austerity during a period of recession and suppressed demand (as advocated by most conservatives over the past few years) is wrong-headed and completely counterproductive. It's like trying to get fit by obsessively calorie counting at the expense of your general health... much better to eat plenty of healthy food and hit the gym.
SNP 'on course to win every seat in Scotland'
Though @Cheesy ha explained how the SNP have been on upward curve for some time, this result is still shocking. Supposedly we are in the middle of Sturgeon Mania yet she's been as heavy on sound bites as the rest of them, so what does this say for Labour's campaigning? Should they have employed Gordon Brown more often perhaps?
Not one solitary MP speaking for the strength of the union, that would be a sad thing indeed. I wonder if it is healthy for Scottish politics: assuming that the current trend is maintained into next year's Holyrood elections, not even a sizeable SNP rebellion could muster the numbers to block a motion from the leadership.
Cameron needs a big performance is tomorrow night's QT if he hopes to tip the balance is some English marginals.
Though @Cheesy ha explained how the SNP have been on upward curve for some time, this result is still shocking. Supposedly we are in the middle of Sturgeon Mania yet she's been as heavy on sound bites as the rest of them, so what does this say for Labour's campaigning? Should they have employed Gordon Brown more often perhaps?
Not one solitary MP speaking for the strength of the union, that would be a sad thing indeed. I wonder if it is healthy for Scottish politics: assuming that the current trend is maintained into next year's Holyrood elections, not even a sizeable SNP rebellion could muster the numbers to block a motion from the leadership.
Cameron needs a big performance is tomorrow night's QT if he hopes to tip the balance is some English marginals.
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I completely agree that cutting spending during a recession is a terrible idea. Unfortunately due to the lack of fiscal responsibility 1998 - 2008 I'm not sure there was another option. By the time the recession really started to bite sanctioning additional borrowing on top of the already huge deficit and debt (up to £160b) would have been irresponsible.
Our debt as a % of GDP already rose to around 75%,, up from around 35% in 2007. Much higher spending would have helped the economy in the short term, but would have been difficult to balance in the medium term. We may have been looking at 15-20 years to get back to a budget surplus (by which point the next recession may have hit), rather than roughly a decade.
The recession has somewhat passed and we are starting to look at economic growth, we just need to ensure we don't make the same mistakes again in terms of overspending when times are good. As I said before I want us to be able to afford to make it rain the next time we have a recession and we can only really do that be getting back in the black.
I am glad that people are finally starting to understand that you cannot blame Labour for the financial crisis, which seems to have been the rhetoric of the tories since 2010.
How on earth could Labour be responsible for a global financial crisis, which was caused for the most part by sub-prime mortgage lending in the US.
How on earth could Labour be responsible for a global financial crisis, which was caused for the most part by sub-prime mortgage lending in the US.