Geogre Monbiot's recent piece is rather concerning....

[User removed 4]

As far as I'm concerned, Monbiot's piece is an honourable and reasonable piece of investigative journalism with a few holes and sprinkled with rhetoric that identify his own politicial leanings, but we're going to need to see a lot more of this before people finally wake up to the fact that we need to start investing in non-financial industry sectors, so that tax laws can be applied fairly without compromising our competitivity as a nation.

And being practical about it, that could mean investing in proper apprenticeship schemes at a government level, better tax incentives to encourage industry into our deprived areas, tax relief on certain types of training etc, yet all I see from this government is a cut cut cut mantra.

I agree with most of what you say, perhaps we should stop paying young men to sit at home playing the play station until 5 in the morning , or 17 year old girls to knock out a few kids and be financed by the state in perpetuity, like it or not this is a massive problem, and it does happen , this isnt just a whinge from me , its genuine concern, as HT has said on a differrent thread, the germans have had the foresight to educate the workforce,we need to do the same, and apprenticeships should be proper apprenticeships ,in skilled trades , not like some of the ones on offer now, i.e apprenticeships in leisure, travel and tourism. We do have the money to finance this sort of thing , its just being spunked away in the wrong places at the moment.

 

[beorhthelm]

Also, if his statement that companies will pay no tax in the UK on profit made abroad (Which apparently isn't correct), surely the statement he follows with, that companies will leave the UK, simply doesn't make sense?

yes, i thought that was a little illogical.

People are bound to challenge some of the detail and also GM's hyperbole (rightly so - this is clearly not something sudden like a coup d'etat, but part of an ongoing pattern). Even so, it's hard to escape the impression that over the past decade or two, the state has become in thrall to the bankers and the financial services industry.

and its also hard to escape the impression everyone immediatly attacks the banks for everything. this has nothing to do with the financial services industry, its a taxation issue that effect companies from all sectors.

i can't help feel the reason no one in opposition or elsewhere has mentioned it is because it is obscure and not important as this author thinks. btw, the Ed Balls "tax cuts on the banks" was i beleive another issue. imposing a levy, which was less than another tax that doesn't exist (the previous one off bonus tax), but Balls say he would have re-imposed, somehow amounts to a tax cut.

 

[Was not Was]

and its also hard to escape the impression everyone immediatly attacks the banks for everything. this has nothing to do with the financial services industry, its a taxation issue that effect companies from all sectors.

Can't agree with you. Financial services have repeatedly lobbied for less and less regulation, and been granted it, leading to them trading in worthless, poorly-understood 'vehicles', that brought our economy to the brink when people realised what a house of cards it was; they've built a bonus culture that leads people to make massive long-term risks in return for short-term gain, because they receive a massive incentive as individuals; and they have, in effect, nationalised their losses (they're 'too big to fail', so we bail them out), and privatised their profits (look at the massive bonus round right now).

All of this can only happen when govternment (lack of) regulation permits it, so the idea that a tax change which benefits the sector is no biggie just doesn't stack up. And, although the tax change isn't sector-specific, financial services companies are the main beficiaries.

 

[Buzzer]

I'm a libertarian at heart and don't believe in legislation/regulation just for the sake of it but I think this all points to the essential problem with the financial sector especially international finance - it's just so complicated that politicians don't understand it. It's how we got into the banking crisis in the first place - extremely esoteric financial instruments dreamt up by companies with tax affairs only the most able of accountants can understand. The only way the previous Government knew how to deal with it was as a reactive and incredibly prescriptive lawmaker. To give you an idea of how much, Tolley's Yellow Tax book was 4,900 pages in 1997. By 2010 it would have been over 11,000 if they had kept the same style and font size.

I would like to see a register of these financial instruments and investment vehicles that have been properly scrutinised and with full disclosure of potential for liabilities on the balance sheets of the companies peddling them. I really don't know how you go about doing that. With regard to Corporation Tax, individual countries should be allowed to set their own rates but on the flipside, if countries like Ireland have almost single figure tax rates then by the same token they should be made well aware that there can be no financial handouts by the EU if a crisis causes the companies to return to their originating tax zones.

It wouldn't be so bad if the financial sector wasn't so important to Britain but without it we are all doomed - so Dandyman et al, you go ahead and snipe at the bankers but it's them that keep this country afloat.


edit - apologies. Was Not Was beat me to the gun on replying

 

[beorhthelm]

Can't agree with you. Financial services have repeatedly lobbied for less and less regulation,

all industry lobbies for less regulation. this one appears something that will help financial, but serves all others too. i know there are many problems in the banks that lead to problems, but i dont see that everything in the world is the fault of the banks, a view often held which apparnelty you agree with. we'd have to agree to disagree that point.

i will point out though that this "too big to fail" is not a new idea. the main clearing banks were always backed by state gurantees of protection for deposits (upto £50k). if we cast our minds back, it was deemed that the risk of having to payout that anyway, then have the fallout of a couple of major banks collapse, which would lead to... it was prudent prop up the industry. also recall that Lloyds was asked/requested to buy HBoS, putting them in a position they wouldnt have otherwise been in. many on the laissez faire side say they should have been left to go to the wall. so "too big to fail" became a political mantra to justify intervention, not necessarily a cry from the banks (who would have happily picked over the carcass of their ex-competitors...)

 

[Was not Was]

i dont see that everything in the world is the fault of the banks, a view often held which apparnelty you agree with. we'd have to agree to disagree that point.

I will concede that we can't blame the banks for Crystal Palace climbing out of the Championship relegation zone. Do we agree now?

 

[beorhthelm]

indeed. jammy bastards.

 

[chops]

I'm a libertarian at heart and don't believe in legislation/regulation just for the sake of it but I think this all points to the essential problem with the financial sector especially international finance - it's just so complicated that politicians don't understand it.

I'm all for a laissez-faire Britain, but a line must be drawn somewhere.

 

[Half Time Pies]

all industry lobbies for less regulation. this one appears something that will help financial, but serves all others too. i know there are many problems in the banks that lead to problems, but i dont see that everything in the world is the fault of the banks, a view often held which apparnelty you agree with. we'd have to agree to disagree that point.

i will point out though that this "too big to fail" is not a new idea. the main clearing banks were always backed by state gurantees of protection for deposits (upto £50k). if we cast our minds back, it was deemed that the risk of having to payout that anyway, then have the fallout of a couple of major banks collapse, which would lead to... it was prudent prop up the industry. also recall that Lloyds was asked/requested to buy HBoS, putting them in a position they wouldnt have otherwise been in. many on the laissez faire side say they should have been left to go to the wall. so "too big to fail" became a political mantra to justify intervention, not necessarily a cry from the banks (who would have happily picked over the carcass of their ex-competitors...)

The whole banking system only exists in its current form because of of state guarantees and the lender of last resort, if the whole system was subject to the free market it would be very different. Imagine for example if any of the UK high street banks had actually failed during the last crisis and Joe public had lost his money, the ensuing panic and uncertainty would have led to a run of the banks and the probable collapse of the whole banking system. For those banks that emerged from the rubble it would then down to them provide the guarantees to the depositor that their money would be safe not the state as it is now.

The current 'fractional reserve banking system' provides the banks with an incredible privilege... to be able to create money from thin air and lend it back in to the economy at interest. This in itself amounts to a huge subsidy. It also allows them to keep a tiny proportion of peoples deposits in reserve (3.1%) and do with the rest of the money what they please. It is most certainly not in the interests of banks for other banks to fail and for the stability and ethics of the current system to be questioned.

 

[Jonno]

Been doing a bit of reading up on this Monbiot, seems like he is a bit of a prick and not always to be relied upon.

 

[crasher]

It wouldn't be so bad if the financial sector wasn't so important to Britain but without it we are all doomed - so Dandyman et al, you go ahead and snipe at the bankers but it's them that keep this country afloat.

That's a highly contentious statement. While the finanical services industry contributes vast amounts to our tax take, it has also damn nearly brought out counry to its knees the past two years. As others have argued more eloquently than I can on here, we need a society and an economy that broadens the base on which its foundations are sunk.

 

[Biscuit]

...we need a society and an economy that broadens the base on which its foundations are sunk.

Very eloquently put. We are far, far to reliant on the financial sector. As Simster said we need to move industry into the more deprived areas of the country and bushy is bang on the money when he says we need real skilled apprenticeships. We can push the bankers more and more but until we stop totally depending on them nothing is going to change.