Question. If labour were still in charge would we be in a worse state Greece & Italy

[Bold Seagull]

So how much of that £16 billion was capital projects to non-VAT registered people? I'm sorry but blithely chucking that out without substantiating how much of it relates to capital purchases is meaningless. For every £40,000 loft conversion there must be at least 100 repair bills of less than £1000 where a VAT reduction will not make the slightest difference in deciding whether to have the remedial work or not.

I've got no idea how it breaks down, you made a sweeping statement that reducing VAT in the sector will make no difference to the overall figures, I give you that this market is bigger than you think. Now to completely void your argument, and probably contradict my own, the reason the government don't want to reduce the VAT to 5%, is because the loss in VAT revenue will be £2.2bn. Yes £2.2bn. So your statement of a 'small part of the economy', and 'most will be VAT registered businesses' would lose £2.2bn in VAT receipts if reduced from 20% to 5% on works to existing dwellings. This is given in a report from the House of Commons:

The Commercial Secretary to the Treasury (Lord Sassoon): The cost of reducing
VAT from 20 per cent to 5 per cent on repair, maintenance and improvement of
residential property, in the absence of behavioural change, is tentatively estimated to
be in the region of £2.2 billion.

Regarding your other point on whether a reduction to 5% from 20% would encourage people to undertake works, thats a £7500 saving on a £50,000 project. So yes, I think for a lot of people it would be the difference between going ahead or not.

This substantial enough for you, given you've spouted nothing but so far!?

 

[fork me]

Question is too biased in its phrasing to be of value but roll on the bunfight. Anyhow here is the political cycle.

Labour spends money rebuilding public services including substantial investment in crumbling infrastucture. Debt rises, possibly taxes, people forget they are paying for stuff they actually need and they lose an election.
Torys cut public spending below a maintainable level and things gradually (or sometimes quickly) turn to shit. Debt usually goes down, taxes for richest do too. Eventually country is so f***ed people remember we need to spend money on stuff and they lose an election.

Rinse and repeat.

Not a bad summary! Too much of either would screw s completely.

 

[fork me]

That's not strictly true though is it? The majority of the money that Labour threw at the public sector has not gone on capital programmes but mainly on wages for existing staff and creation of hundreds of thousands of new jobs. A large part of the capital rebuilding has been done with PPI sleight of hand and will end up costing us lots and lots more than if the Government had built the hospitals in the first place.

Actually, it was fairly true. I was working as a teacher in a state school through much of the Labour times. The money spent on necessary repairs, as well as new and valuable initiatives was huge. The same is true with health. Compare the County Hospital now and pre-Labour and you'll see a huge difference. The place was crumbling when I was working there in the 90s. Now I find it difficult to find my way round there's so much new. It wasn't wasted money, it was sorely needed.

 

[paddy]

I don't agree - I'm more worried that we won't be able to service our debt because our growth is so bad - thats what happened in the end game to Greece (its not the reason they got in that mess though) and thats the problem spreading throughout Europe. Spain and Italy won't be able to repay their loans because their economy is f**** thats resulting in even higher interest rates which is creating bigger debts they won't be able to pay. Its getting to the point where no one will lend anymore money. Its a European policy death vortex.

If you are concerned about our ability to service our debt you ought to be concerned about our AAA credit rating and the low level of interest currently paid on gilts (indeed, we currently pay LESS than Germany to service our debt). Both of these would be at risk if we reversed the cuts programme and started borrowing more.

Also, you may not accept it, but it is a fact that there is a structural deficit - no economist disputes this or the fact that the portion of deficit which is structural must be removed by tax increases/spending cuts (again, the exact proportion of structural and cyclical deficit is where the argument lies). In any event the idea that to service a loan you take out more loans (of a greater value and at a more punishing interest rate) is nonsense. We had a debt driven economy and we've been found out - it is a trend which transcended governments and can be traced back to the conclusion of WWII.

 

[fork me]

Worse than Greece and Italy no, but probably not far short. It amazes me that whilst chaos reigns in the economies of europe there are still people who think we shouldn't be making cuts here.

I don't think I have met anybody who thinks we shouldn't be making cuts. It's the scale of the cuts that are the problem.

 

[Buzzer]

This substantial enough for you, given you've spouted nothing but so far!?

Well. That was called for. Cheers for that.

Without getting all shitty about it, let's get right back to basics. You asserted that there was a 'a huge economic sector' with private individuals using architects, engineers et al for capital projects and this is where there would be a huge stimulus.

Number one, it's not a huge sector at all in comparison with all the other work carried out in the construction industry. In fact, it's probably miniscule. This is the sector I was referring to. It was not a sweeping statement.

Number two, the vast majority of that £2.2bn pound loss to the exchequer would be repair and improvement where it's things like plumbers invoicing for a new bath, electricians doing some re-wiring, builders doing some re-pointing. The individual spend for each bill is not likely to to be a capital one and is not likely to be around the £40k mark i.e. not in the sector you were referring to. The clue is in the full answer where he quotes "..repair, maintenance and improvement".

 

[paddy]

Actually, it was fairly true. I was working as a teacher in a state school through much of the Labour times. The money spent on necessary repairs, as well as new and valuable initiatives was huge. The same is true with health. Compare the County Hospital now and pre-Labour and you'll see a huge difference. The place was crumbling when I was working there in the 90s. Now I find it difficult to find my way round there's so much new. It wasn't wasted money, it was sorely needed.

It wasn't our money. This is the thing people fail to understand. Under Labour, one in ever four pounds spent was borrowed. These improvements were largely funded by the Chinese and other BRIC countries with large cash surpluses. You simply cannot expect these countries to continuing buying UK debt to fund services in this country which most people in China could never dream of. It is a selfish and blinkered approach to adopt. Of course, it would be great if we could have class sizes of 10, but we can't afford it. There is no way around this - we can only have the public services we can afford and we could not afford Labour's public services.

 

[fork me]

It wasn't our money. This is the thing people fail to understand. Under Labour, one in ever four pounds spent was borrowed. These improvements were largely funded by the Chinese and other BRIC countries with large cash surpluses. You simply cannot expect these countries to continuing buying UK debt to fund services in this country which most people in China could never dream of. It is a selfish and blinkered approach to adopt. Of course, it would be great if we could have class sizes of 10, but we can't afford it. There is no way around this - we can only have the public services we can afford and we could not afford Labour's public services.

Way to miss the point. The post wasn't defending the spending per se, merely pointing out that the money spent by Labour WAS spent on stuff other than high wages, which is what the person I was responding to had claimed.

It also wasn't about having class sizes of 10, an argument that needs to use such ridiculous exagerations is clearly weak to start with. When I left the UK 3 years ago, I had a GCSE chemistry class of 33, in a lab built for 28. How much bigger than that do you think is reasonable?

Much of the money spent was on essential repairs, after years of Tory mismanagement, our school had leaking roofs, a dangerous bridge over a main road and a severe lack of even basic resources. The money that was spent NEEDED to be spent, wherever it came from.

 

[JJ McClure]

I don't think I have met anybody who thinks we shouldn't be making cuts. It's the scale of the cuts that are the problem.

Either that or they agree with cuts so long as it doesn't affect them. There are people out there who need to wake up and realise we are all in this together.

 

[Bold Seagull]

Well. That was called for. Cheers for that.

Without getting all shitty about it, let's get right back to basics. You asserted that there was a 'a huge economic sector' with private individuals using architects, engineers et al for capital projects and this is where there would be a huge stimulus.

Number one, it's not a huge sector at all in comparison with all the other work carried out in the construction industry. In fact, it's probably miniscule. This is the sector I was referring to. It was not a sweeping statement.

Number two, the vast majority of that £2.2bn pound loss to the exchequer would be repair and improvement where it's things like plumbers invoicing for a new bath, electricians doing some re-wiring, builders doing some re-pointing. The individual spend for each bill is not likely to to be a capital one and is not likely to be around the £40k mark i.e. not in the sector you were referring to. The clue is in the full answer where he quotes "..repair, maintenance and improvement".

Come back to me when you've stopped making stuff up.

 

[Buzzer]

Come back to me when you've stopped making stuff up.

Where have I made anything up? *insert patronising smiley for added effect*

 

[beorhthelm]

It also wasn't about having class sizes of 10, an argument that needs to use such ridiculous exagerations is clearly weak to start with. When I left the UK 3 years ago, I had a GCSE chemistry class of 33, in a lab built for 28. How much bigger than that do you think is reasonable?

Much of the money spent was on essential repairs, after years of Tory mismanagement, our school had leaking roofs, a dangerous bridge over a main road and a severe lack of even basic resources. The money that was spent NEEDED to be spent, wherever it came from.

it may be a subtle point, but was the money spent well? investment was needed, but did it go to the right places for the right benefit, or did headline projects take precedence and maintenance costs sprial uncontrolled? some of the PFI deals are eye wateringly poor value, with guaranteed profit margins built in. ie, spent what you like and we'll give you 15% on top. they say many NHS trusts are technically insolvent. i note that after 15 years spending, some schools still had classes of 33 in labs bulit for 28... i read a few years ago that the total spent on repairing schools in the period to 2007 was as much as estimated to re-build every school, which suggests a slightly poor managment of the resources. at that time they were announcing additional funding to repair the schools needed due to Tory underfunding. where the f*** did all the money go then?

 

[Bold Seagull]

Where have I made anything up? *insert patronising smiley for added effect*

Feel free to post anything that backs up your statements...

 

[Chicken Runner61]

If you are concerned about our ability to service our debt you ought to be concerned about our AAA credit rating and the low level of interest currently paid on gilts (indeed, we currently pay LESS than Germany to service our debt). Both of these would be at risk if we reversed the cuts programme and started borrowing more.

Also, you may not accept it, but it is a fact that there is a structural deficit - no economist disputes this or the fact that the portion of deficit which is structural must be removed by tax increases/spending cuts (again, the exact proportion of structural and cyclical deficit is where the argument lies). In any event the idea that to service a loan you take out more loans (of a greater value and at a more punishing interest rate) is nonsense. We had a debt driven economy and we've been found out - it is a trend which transcended governments and can be traced back to the conclusion of WWII.

We should not have got in this position in the first place?? - AGREED

However, now we are in this position we are left with no alternative but to carry on lending as we are broke. The proposed cuts have not really started yet and whether we can afford to pay our existing debts will rely on us improving our economy.

You keep forgetting that our position is different from the PIGS as we were not tied to the Euro.

While we had growth we could justify our AAA rating but as our growth is now falling possibly into recession its looking like we will lose our rating.

By all means we can cut future services and stop wastage but we needed to also avoid mass unemployment by helping UK business keep manufacturing and servicing the UK market. Its that cost of Unemployment that is going to make our position worse and result in us being broke.

I'm not happy about it but we could have borrowed (and still can at the moment) at reasonable rates but very soon if we need a bailout its going to become even more expensive. I'm also scared to say it but if Europe crashes what will be the difference between us and say Italy who owe a few billion more than us? It will still be two tramps fighting for a bone and they might actually be physically stronger!

Europe is the biggest economy in the world if that goes everyone will suffer and the end game is the same whether you have 15 trillion paper debt or 1 trillion debt. Apart from war the only solution will be to sell your countries assets or real commodities - Spain and Italy have Oil and Gas what have we got?

 

[El Presidente]

Managing a UK economy is nothing like lighting a fart.

or as interesting

 

[El Presidente]

it may be a subtle point, but was the money spent well? investment was needed, but did it go to the right places for the right benefit, or did headline projects take precedence and maintenance costs sprial uncontrolled? some of the PFI deals are eye wateringly poor value, with guaranteed profit margins built in. ie, spent what you like and we'll give you 15% on top. they say many NHS trusts are technically insolvent. i note that after 15 years spending, some schools still had classes of 33 in labs bulit for 28... i read a few years ago that the total spent on repairing schools in the period to 2007 was as much as estimated to re-build every school, which suggests a slightly poor managment of the resources. at that time they were announcing additional funding to repair the schools needed due to Tory underfunding. where the f*** did all the money go then?

I have posted many times about PFI, and it is an absolute disgrace, but you have to look at the civil servants who have signed off on these deals as much as the politicians.

I'm about to move into a new £90m business school here in Manchester, so there has been worthwhile public spending. My other half is a school head, and she would say that the government did invest heavily in primary school education. There is waste in the public sector, but there is plenty of it in the private sector too. Both Labour and Tories have used PFI as an off balance sheet finance vehicle, and both should hang their heads in shame.

Osborne and his sweetheart deals to the likes of Vodafone and Goldman Sachs for their tax evasion has clearly nailed his colours to the mast of keeping corporations sweet and increasing the burden on the low paid and middle classes. You can't blame him for looking after his own though shirley?

FWIW I thought that Brown did a decent job as chancellor but was not cut out to be a PM.

 

[Buzzer]

Feel free to post anything that backs up your statements...

What? Like new builds on private residences being zero-rated? Or the vast majority of construction industry being business to business? Or asking for a distinction in your £2.2bn quoted figure between repairs and capital improvements?

 

[Bold Seagull]

What? Like new builds on private residences being zero-rated? Or the vast majority of construction industry being business to business? Or asking for a distinction in your £2.2bn quoted figure between repairs and capital improvements?

Anything you like...

 

[The Antikythera Mechanism]

An email I received yesterday;


Subject a lesson in Socialism

An economics professor at a local college made a statement that he had never failed a single student before, but had recently failed an entire class. That class had insisted that Obama's socialism worked and that no one would be poor and no one would be rich, a great equalizer.

The professor then said, "OK, we will have an experiment in this class on Obama's plan".. All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an A.... (substituting grades for dollars - something closer to home and more readily understood by all).

After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy. As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little.

The second test average was a D! No one was happy. When the 3rd test rolled around, the average was an F.

As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.

To their great surprise, ALL FAILED and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed. Could not be any simpler than that.

These are possibly the 5 best sentences you'll ever read and all applicable to this experiment:

1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.

2. What one person receives without working for, another person must work for without receiving.

3. The government cannot give to anybody anything that the government does not first take from somebody else.

4. You cannot multiply wealth by dividing it!

5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.

 

[Simster]

An email I received yesterday;
Subject a lesson in Socialism

And what a complete load of old bollocks that is. I'm not sure what is the most stupid aspect to it: equating grades with earnings or this ignorant and clueless assumption that EVERYTHING is shared under socialism with no concept of keeping some of it for yourself.

As I say, utter utter turd from start to finish.