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Tax Research UK Blog is written by Richard Murphy unless otherwise stated and published by Tax Research LLP under a Creative Commons Attribution-NonCommercial 3.0 Unported License.
Design by Andy Moyle
Excellent. Very much enjoyed his first book – Treasure Islands.
Try telling this to everyone who works in finance and the many many related industries.. 1.3m work in financial services, the support sector will be enormous too. Having worked in an Investment bank for a number of years the vast majority of people are back office and operational, earning good money but not excessive. Do you really think everyone could be absorbed into the wider economy ?? …i agree with a lot of what is said in the book but there is way too much conjecture to believe the numbers as stated..lets face it France, Germany and the US are desperate to claw away at British financial services and for good reason.
The answer is yes, of course
But let’s also be clear: those supplying useful financial services (and we all need insurance, banking and so on) would not be affected
The target is the excess finance and you are deliberately missing the point I suspect
What is “excess finance” by your definition? Would you include fund management and all the trading and research that supports it? Corporate finance? M&A? Fixed income trading and research? FX?..the list goes on.
If your answer is yes to any or all then pretty much every £ of revenue and employment opportunity will transport to another financial district – 100% certain.
Please don’t make this your next “crusade” as it will detract from the good work you do and will be dismissed out of hand even by John McDonnell etc..
Go and read the research – all the links are there
And read this
http://speri.dept.shef.ac.uk/wp-content/uploads/2018/10/SPERI-The-UKs-Finance-Curse-Costs-and-Processes.pdf
And yes, I fully endorse this campaign and I strongly suspect John McDonnell will
james says:
“. Do you really think everyone could be absorbed into the wider economy ??”
Of course they could, James. And should be.
What advantage is there in employing any number of people in an activity which is harmful. Better we pay them to do nothing than pay them to do harm.
They would at least still be consumers creating demand for real goods and real services which is what should be driving the economy.
You argument is simply reinforces the abusive grip of the finance industry. Puts you with the Trade Unionists who would make bombs and guns and war-machines for the sake of keeping ‘jobs’ for the boys, irrespective of the harm they do.
The level of understanding of political philosophy in the UK has long been damaging and is on the cusp of becoming downright dangerous.
James, you mention “excess finance” in an later post, asking what is meant by it.
Just look at the pharmaceutical industry as just one example of this excess, and the harm it does in everyday life to ordinary people throughout the world.
Thanks to ‘excess finance’ they have managed to create monstrous monopolies which control the production and selling of life saving drugs. These drugs are rationed by the NHS here, otherwise it would go bust.
If those prices were forced to come down, and they could be more systematically if pharmaceutical companies weren’t so powerful, people all over the world could access them at reasonable prices, which would still allow those companies and their employees to make good, but not excessive, profit.
This is just one example of excess. There are many more.
Its funny because I just watched The Spiders Web Documentary yesterday (https://youtu.be/np_ylvc8Zj8 for anyone who might not have heard of it) and then you posted this, I must admit I had no idea about how the City of London operated and I’m sure most of the country is blissfully unaware as well. Its pretty eye opening. I suspect thats why the establishment is absolutely terrified of a character like Corbyn getting into power.
Tell your friends
A very good visual representation of some key facts that are indispensable to a better society.
How can it be more widely publicised?
I’m trying …..
I was just think out loud. You do enough.
I try….
And did Dad’s funeral today
Which went well
very nice diagram although arguably misleading in a couple of ways:
1. If a private equity firm buys a manufacturing business and borrows from a bank to do so (normally also introducing additional credit facilities like an RCF etc into the business) I assume that falls into your “lent to PE” category not “lent to manufacturing” category
2. The trainline booking fee dosent go to KKR etc in the first instance, it goes to pay interest on the external debt.
Hmmm…do you know that corner in Private Eye?
James says:
“Please don’t make this your next “crusade” as it will detract from the good work you do and will be dismissed out of hand even by John McDonnell etc..”
Such magnanimous concern for your welfare, Richard ! What a lovely boy James is 🙂
You have to laugh.
Every time the trolls tell me not to do things I know it’s right
The trolls FFS.. anyone who questions anything you say more like
FFS
Grow up
Very good. Interestingly the supply of intelligence occurs at a similar rate and some of the greatest businesses have come when that intelligence was forced from the unproductive into productive industries during recessions or because of blackballing eg Cadburys, various Shakers enterprises and also the grocers daughter Mrs Thatcher away from being a chemist.
Despite Richard being an accountant the Japanese neatly categorize those activities into two categories.
1. Activities that add value to the customer
2. The rest is ‘Muda’ waste.
Legal costs are waste, accounts are waste – obviously if you remove them completely you get other costs that take away value from the customers product however that’s why the Japanese try to reduce those muda activities to the minimum.
Hence why producing a ‘perfect’ product with less than one defect in a million removes costs in lawyers, rework, storage, posting etc. ‘Quality is free’ and is actually one of the most profitable of activities for manufacturers. It worked for GE as they ‘worked out’ how to eliminate unnecessary tasks, routes, steps by engaging with the employees and specialist trainers with management to answer and adopt proposals at the end of the weekends.
As a country do we really benefit from having 1 in 8 graduates become accountants? So much intelligence going into the legal profession? So much into the trading of financial products that remain the same product underneath?
Golly gumdrops Richard. It’s worse than even I thought! In about 83 we were looking at how banks lent money to kleptocracies, the loans went bad after increasing in roll-over, why so much UK investment went into housing and property in comparison with Germany and found the various ‘losses’ equivalent to our productivity lag on most other advanced economies. I noticed then no one could ever tell me what working smart and other jive talk on competitive advantage really meant and it was obvious mainstream books and articles didn’t and debunked easily. It’s criminal.
Good work.
I think I’ve spotted one error: £4.5tn is equivalent to only 30 years, not 300 years, of current spending on health services (the latter is about £150bn).
I’m glad the funeral went well. Well done to all.
Personally, I think that your late Father has a lot to be proud of about you.
Thanks
I agree. You are doing well.
As a not sufficiently financially-aware reader I find this shocking, and have shared it. I find it so difficult to find this sort of information from the easily available media outlets. Thank you.
Rosalind, the malign influence isn’t just economic: London draws to itself talent in every sphere of life. It has increasingly become the case that, to get to the top in virtually any walk of life, one had to be in London. This applies to business, the professions, academia, media, sport, showbiz, the arts – you name it. The result is a brain drain depleting the talent pool all over the UK, thereby impairing the performance of local economies elsewhere.
Over time this generates a self-fulfilling (but fallacious) prophecy that ambition can only be satisfied by being in London. The other side of this fallacy is that anyone who chooses to remain in the regions and nations of UK and pursue a career there is, by definition, of lower standing. This is vividly seen in the Arts, where the UK media pay scant attention to events and performances outside of London. A classic example is books on the history of jazz in Britain which are effectively books about the jazz history of London.
Not sure if you will allow this but I saw the film “Spider’s Web: Britain’s Second Empire” which confirms all of this and is well worth watching.
Published on 14 Sep 2018 it reveals how “At the demise of empire, City of London financial interests created a web of secrecy jurisdictions that captured wealth from across the globe and hid it in a web of offshore islands. Today, up to half of global offshore wealth is hidden in British jurisdictions and Britain and its dependencies are the largest global players in the world of international finance.”
https://youtu.be/np_ylvc8Zj8