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Venn diagrams for our times: the Christmas message from IDS
Richard Murphy
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You could as easily have the same diagram, but with the the initials IDS in one circle, and the words HUMAN BEINGS in another!
A chap from the IFS on Any Questions said recently that if welfare / NHS / health spending isn’t reformed, within a short space of time, it will eat up 50% of taxation aka govt. spending.
What is your solution Mr. M?
So be it
If that’s what’s needed for a decent, healthy society, bring it on I say
Your problem is?
And what’s your solution? Squalor? Hunger? Death by neglect? Please tell me
Mr. M,
I wasn’t proposing a solution, just pointing out what the IFS chap said…..all the politicians on the panel went very quiet but it does stand to reason though doesn’t it….if spending on welfare / NHS / health continues to climb and take over 50% of the proceeds of taxation, other things will have to be cut….
…so what would your solution be?
Ever increasing taxes have to stop at some point and the other parts of HMGs budget also need money….so just out of interest where would you cut?
And perhaps unlike you, I don’t believe ‘closing loopholes’ in the UK tax system will make that much difference when EU law is exerting ever more primacy over UK law and other major competitor nations are prepared to offer ‘more business friendly’ taxation schemes to major firms.
I have given my answer
We will indeed have to tax if that is the need that has to be met
Now, what is your answer?
The solution is to get as many people into work as possible.
“A chap from the IFS on Any Questions said recently that if welfare / NHS / health spending isn’t reformed, within a short space of time, it will eat up 50% of taxation aka govt. spending.
What is your solution Mr. M?”
How about introducing rent controls to cut down on housing benefits which, in many circumstances, is just becoming an indirect subsidy to greedy landlords? Little of the actual welfare budget goes to the unemployed…..the majority of it rightly goes to OAP’s
And if you stopped rip-off PFI deals and stopped private companies poncing off the NHS, how much money would that save?
And how much revenue could be brought in if we renationalised valuable assets like the railways and the utilities so the bulk of it came back to the country rather than shareholders pockets?
Or how about if we got rid of Trident, which costs £100 billion and is about as much use as an ashtray on a motorbike?
“And how much revenue could be brought in if we renationalised valuable assets like the railways and the utilities so the bulk of it came back to the country rather than shareholders pockets?”
Fair comments but don’t forget that they taxpayers would also have to pay to keep the utilities going and the railways. I agree the taxpayer would get back the revenue but the taxpayers would also have to foot the entire bill.
Of course PFI companies also employ thousands of people and in any case the electorate made it quite clear that it was more than happy for PFI to exist as it elected the party repeatedly that made the most use of it despite massive criticism of PFI deals…..after all shiny new hospitals can be got on the ‘never-never’…….and what electorate wouldn’t want that?
At the moment the bill for pensions and the NHS and welfare runs into hundreds of billions of pounds – I admire your thinking on rent controls but that is no where near going to be enough.
Entire areas of govt. spending will have to be stopped – I don’t have a solution but the point I was making was that as soon as the discussion on R4 started to get to the bit about having to make ‘real world’ decisions, all the politicians went quiet.
Almost as if they knew the IFS chap was fundamentally right but didn’t even want to talk about it – I actually think the issues cross party political lines which is what makes MPs / HMG so nervous about talking about them as any solutions will create lots of ‘losers’…….
I’m a non-tribal voter but I do know that which ever version of HMG is in power the current ’20 to 40-somethings’ are in for a right kicking.
“Of course PFI companies also employ thousands of people and in any case the electorate made it quite clear that it was more than happy for PFI to exist as it elected the party repeatedly that made the most use of it despite massive criticism of PFI deals…..after all shiny new hospitals can be got on the ‘never-never’…….and what electorate wouldn’t want that?”
No…they get shiny new hospitals we can’t afford because the shiny new hospital is leased back to us by the PFI contractor at rip-off interest rates. In fact, almost without exception, it would have been cheaper by far in the long run to build these shiny new hospitals with public funds in the first place. PFI was only ever adopted for public contracts because the cost of PFI contracts didn’t appear in the public accounts.
“Fair comments but don’t forget that they taxpayers would also have to pay to keep the utilities going and the railways. I agree the taxpayer would get back the revenue but the taxpayers would also have to foot the entire bill.”
Yes, but as I said before, we would be getting back the revenue and profits (if there are any) subsidising the cost the cost, making them cheaper and more efficient to run and returning value to the taxpayer. These are income bearing assets that produce an income for the taxpayer, not for private shareholders.
“At the moment the bill for pensions and the NHS and welfare runs into hundreds of billions of pounds — I admire your thinking on rent controls but that is no where near going to be enough.”
That’s what the government would have you believe. As workers and pensioners contributed to the system for years, are you now saying the government can simply refuse to honour its side of the bargain? It has helped create through its policies of austerity a situation where hundreds of thousands of public sector, permanent. full time positions are now gone and mainly been replaced with part time, short term, zero-hours contracted “McJobs”. Now we have a situation where there is more people in work claiming benefits than out of work. Are you saying the government doesn’t have an obligation to cover these costs?
It’s truly amazing that the government can find lot’s of money when it wants to! No money for the public sector but enough to fund a 5% tax cut for people who didn’t need it! Hundreds of billions to bail out the banks courtesy of the taxpayer? No probs!! The cost eventually reached over a trillion pounds, but it was found!
The Chancellor managed to find £10 billion to give to the IMF without even consulting parliament!
I could also mention the £38 billion subsidy to private pensions; the cost of the £100 billion white elephant that is Trident and the corporate tax breaks courtesy of the taxpayer!
If the government wants to find the money, of course it can! The national debr is an infinite source of money! It has never been paid back – ever! Simply rolled over and refinanced! The finance industry needs government bonds for “repo” loans and pension funds and insurance companies are legally obliged to use securities that are risk free, and government bonds always guarantee a 100% payout as they are backed by the taxpayer. Bonds can be refinanced at lower interest rates if they rise. At this moment, it has never been cheaper in history for the government to borrow money! My point is that there is always a market for government debt because, in the highly unlikely event that taxation cannot be raised, a government can simply create the money to pay the bonds!
The government could borrow and spend on badly needed housing, infrastructure, transport, sustainable energy and manufacturing. The employment created and the income generated by these assets can pay back the loans. Of course, with a little imagination, an alternative to government funding can be found for public infrastructure projects. a National Investment Bank can raise funds from the money markets and the money raised can be put into large public infrastructure contracts such as bridges, roads and railways. After initial setup costs, public infrastructure could be built without necessarily costing taxpayers a penny. Loans could be paid back by the income generated from employment and the projects themselves.
Of course, the government could fund itself without borrowing, but simply creating the money and spending the money on badly needed infrastructure and back the loans with what the money was spent on, saving the government tens of billions of pounds in interest at the same time. Excess liquidity can be taxed out of the economy to combat any risk of inflation.
It is a lie that a government can’t afford this or that! It can! There’s nothing really stopping it!