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Newtonian law of power's pull on business

Robert Peston | 15:40 UK time, Thursday, 1 April 2010

Some 14 years ago, when it was clear that Labour was heading for victory in the looming general election, I asked the then deputy prime minister Michael Heseltine whether he was concerned that so many business leaders were cosying up to Tony Blair.

Not at all, he said. It's almost a Newtonian law that business gravitates to power.

They would be letting their companies down if they failed to fawn to the prime minister-in-waiting, given that government has the ability both to award valuable contracts to the private sector and also to seriously muller business through misguided taxes and regulations.

Oh, and there are also those nice knighthoods and political peerages that a friendly premier might be able to nudge in a business leader's direction.

In a way, therefore, it may be a bit surprising that we haven't seen more business leaders come out for Cameron and Osborne.

From that I haven't concluded that they don't rate them or dislike their policies - just that they are taking a pragmatic view that the outcome of the election is less of a done deal than was the case prior to the 1997 election.

Sir Stelios Haji-Ioannou, Justin King and Sir Stuart RoseSo how to assess today's letter from 23 business leaders backing the Tories' proposal to partly reverse the government's plan to increase National Insurance?

First things first: I don't doubt the business leaders' sincerity when they warn that the NI increase will precipitate job cuts.

In fact I haven't met a single person in business who is celebrating this tax rise - and the main business lobby groups have today thrown their weight behind a campaign to replace the NI rise with public-sector cost savings.

But I should also point out that there wasn't a single signatory who made me think "wow, didn't expect him to be on a list of proponents of a Tory policy".

That doesn't mean that they are all card-carrying members of the Tory party or donors to the Conservatives (some are).

It's just that I've observed for some months the likes of Sir Stuart Rose of M&S and Justin King of Sainsbury becoming quite chummy with what you might call New Conservatives', or the leadership clique around David Cameron.

And in the business circles in which I mix, there's been lots of chatter in recent months that one or both could find themselves on the Tory benches of the Lords or doing a job for a Tory administration.

Also, there was a chunk of the letter that gave me a powerful sense of deja vu (or deja entendu, to be more precise).

It's this bit:

"The state must look to enable our public servants to make savings. This can be done by removing the blizzard of irrelevant objectives, restrictive working practices, arcane procurement rules and Whitehall interference."

Now I have heard something very similar from the lips of New Conservatives' favourite businessman, Simon Wolfson, chief executive of Next - who happens to be one of the signatories, and is very close to the Cameron/Osborne gang.

None of which is to say this letter of endorsement of an important Tory policy from some business heavyweights is trivial - just that it isn't terribly surprising.

That said, it would be wholly inappropriate to feel any pain on Labour's behalf, since in the past both Gordon Brown and Tony Blair milked for all it was worth any backing they received from a half-credible entrepreneur.

But it's worth noting that the interests of business and the interests of the country are not identical.

Some of the companies on the list, such as Diageo and Xstrata, derive most of their revenue outside the UK, for example.

And the owners of most of them are a thoroughly international bunch.

Actually I should point out that the business leaders are writing in a personal capacity, and not on behalf of their companies.

Which I suppose may influence the weight you attach to their views (for better or worse).

Comments

Page 1 of 2

  • Comment number 1.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 2.

    Strange that business leaders are concerned about a tax on jobs.
    The concern for jobs evaporates when worried about short term share price flucuations and their performance bonuses.

  • Comment number 3.

    It's a bit of a dilemma.

    Should we believe the Labour party, who have been wasting billions every year even by their own admittance, who have deceiving us for thirteen years and who did not foresee the recession or what was happening in the banks?

    Or should we believe relatively honest business leaders who have provided wealth creating jobs for millions and been responsible for growing their businesses and pouring billions into the Treasury coffers?

    Tough one that.

    I think I'll plump for the one who has got the least debt.

  • Comment number 4.

    The problem has been that the business of government has been business. A minor review of most laws show that enactment is preceded by a report of long standing abuse by business in safety,health, discrimination, intimidation, financing frauds, etc..add to this the many tax advantages given to business and governmental allocations for business developments, infrastructure,etc and we have a priavte sector much supported by public taxes. Of course they are interested in who has the keys to the treasury. Would say this goes back as far as organized government....or is it disorganized government.

  • Comment number 5.

    The Tory policy is crystal clear. It worked in 1979 and 1992. They propose lower taxes than Labour before an election, and bring in higher VAT after it. This might wipe the smile off the faces of some of the 23 business leaders, especially those representing retailers.

  • Comment number 6.

    I am of the thought that a lot of businesses are playing the wait and see game, along with us all.
    There is so much spin at the moment before the date of the election is announced, and not a lot is being said directly.
    Are we all (the country) hoping for a hung parliament? Maybe something would then get done for the good of the country? I can hope a bit. After all what else could possibly happen?????

  • Comment number 7.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 8.

    What's the likelihood of 23 businessmen being able to influence Government policy more than say 23 million ordinary voters?

    The implication is ordinary folk really should write to their MP's & Local Councillors, more often!

  • Comment number 9.

    > It's almost a Newtonian law that business gravitates to power.

    Truer words have never been spoken. And the fix is to distribute
    power very evenly, to confuse business. As with most
    important things, the British have failed.

  • Comment number 10.

    A more reasoned but just as pragmatic view is that business leaders will seek to ensure that when they speak, those whom we employ to run the country on our behalf will listen to their advice... and a good way of doing that is to throw your support behind those all-to-rare sensible suggestions made by politicians. Of late, politicians have demonstrated that they are not very good at listening to us, so sneakier tactics have to be used to ensure that when any of us speak on topics we understand (usually better than any politician) they will take heed.

  • Comment number 11.

    Pure pragmatism, with a healthy dose of cynicism about the political class accounts for most of the 'accommodation'. Governments come and go, and life goes on, in the main.

    So the letter objecting to the tax rise is significant.

    At least, they are doing it it unison. In the US, as required by law, ATT, Caterpillar, and Verizon all independently lowered their earnings forecasts in wake of the passage of ObamaCare.

    For their troubles, they are being summoned to disgorge mountains of documents to a House committee run by Henry Waxman and and Bart Stupak, and 'invited' to testify on the matter. The threat of retaliation is very thinly veiled, sort of a 'Chicago Way' moment: 'Hey, you've got yourself a nice business here! It would be a shame if someone were to burn it down around you. We can do that, you know, in a thousand different ways. Might want to buy yourself some fire insurance.'

    If they don't restate their earnings, they are criminally liable. If they do, they are politically liable to all manner of dangers.

    It's a wonderful country these days.

  • Comment number 12.

    Caledonian coment at No.1 How experienced was Blair and Brown in 97?.

  • Comment number 13.

    Gamblers. Every last one of them. Betting on a self fulfilling prophecy. Perhaps..

    The upside for them is they might be supporting the winning team.
    It would make them look good at the next salary review.

    And the downside?
    Well they would have to blame the fickle voter wouldn't they.
    Or the system.

    Nothing to do with them. And the inevitable hardship, whoever gets in, would be nothing to do with then either.

    So it's a win win choice for them.

    Pity the rest of us don't have such a choice.
    We pay either way. Lose lose..

  • Comment number 14.

    Um ,NR blog has been shutdown very rapidly today with less that 50% of posts past the mods too,

  • Comment number 15.

    1979 and 2010 are different, the last labour mess of '79 was behind us at long last , the future was looking good.

    2010 is like '79 but even worse, so the comparision is incorrect and it an attempt by the BBC downplay the comments.

    The position is that we are in Dire Straits and Brown and mandy have been whistling in the wind for the last 3 years when they should have been sorting out the pulblic finances ahead of the game. In fact the mess that they created.

    Trouble is we are so in the manure its piled so high its going to be very difficult to do the job correclty for the country unless people wake up and smell the coffee and the the very hard medicine that will have to be administered

  • Comment number 16.

    Biased much Robert?

    "Oh, and there are also those nice knighthoods and political peerages that a friendly premier might be able to nudge in a business leader's direction."

    Sounds a bit like you are alluding to cash for honours scandals. Labour have never ever been involved in those.

    "Which I suppose may influence the weight you attach to their views (for better or worse)."

    I think that I would respect the opinion of extremely successful business leaders over that of Team Labour (and indeed yours Robert) any day of the week.

    See how many business leaders come out in support of higher NI taxes.

  • Comment number 17.

    Q-uell surpris-ed !!

    Turkeys didn't vote for Xmas ...invested interests seek something for themselves.

    I honestly don't know why these people are doing this.
    It only confirms the obvious and probably does more harm, by reinforcing the feelings/notions/ideas/votes of those in the opposition/out-group(s).

    Should business be more like sport, and try more to become less entangled with politics ??
    Do the sub-ordinates still vote as The Lord Of The Manor does ??

  • Comment number 18.

    So 23 rich businessmen support the Tory policy on a particular issue. Why is this more newsworthy than 23 teaching assistants supporting a particular Labour policy? (Or for that matter 23 dustmen supporting the BNP?)

    The implication is that the 23 businessmen are speaking on behalf of the companies they run. But have they consulted their shareholders before making this statement? No. They do not speak for their shareholders, let alone their employees or their customers. But there is this assumption that because they are very rich, their views carry more weight than those of other people.

    I don't buy this theory that money equals wisdom. And I also question whether someone earning £3 million a year has anything useful or relevant to say about the political choices facing Joe Public who might have an annual income of £25000. Thank God that in the election, millionaires only have the same number of votes (one per person) as us mere mortals.

  • Comment number 19.

    I thought it was rather government that is attracted by business.

    Inconveniently politicians have to pander to us plebs to get elected, but if they could bypass the seathing masses they would.

  • Comment number 20.

    Taxing big business will hurt the recovery....even though there hasn't been one. But taxing the people won't....even though they represent the majority of spending in the economy...
    Government/banking/big business all on the shoulders of the people..so let's see if we can make this a little more difficult for the people, shall we. Masochism is a poltical philosophy.
    In the scheme of things what does the 12bn represent...you may wish to state this in proportion to the total of new debt...think of it as interest on a maxed out credit card...you can't borrow any more and the principal will never go down...but they may extend your credit...just the fix, assume more debt....the bankers are waiting.

  • Comment number 21.

    are all members of the bbc on the labour party books.( Apart from J Clarkson)

  • Comment number 22.

    #12 - Just because Blair and Brown made a pig's ear of it doesn't mean that a hectoring school prefect like George Osborne will do any better.

  • Comment number 23.

    robert,

    this is a very significant development.
    business leaders that serve on working groups that meet with government on a regular basis writing to a national newspaper?

    clearly no one wants to see an n.i increase but government has chose to knowing that business would challenge it.

    why has government chose this tax? do they understand that it is a fixed tax that business cannot dodge, account away or have an allowance for.

    n.i contributions at present are collected to contribute towards the well being of the nation, its workforce, communities and the disadvantaged via pensions etc.

    although it is understood that additional monies collected in the future will go towards paying down debt, the senior executives run the risk of being accused of being totally focused on their shareprices giving little regard to the bigger picture.

    those that do understand the bigger picture could re-direct their purchasing power away from those senior executives businesses.

    all are able in influence.

    it should be noted that most, if not all of the senior executives represent stock market listed companies or private equity owned.

    does that mean that partnership and private run companies understand better the bigger picture and "act best" in the nations interest.

  • Comment number 24.

    I think it's also worth noting that these 23 buisnessmen and now 7 major employers groups are speaking out against the tax proposed by Labour but also supported by Vince Cable. Maybe he isn't quite as wise as some would have believed on Monday night...

    At least the Lib Dem's didn't put someone out in front of the cameras to patronise us and tell us what we should think!

  • Comment number 25.

    What has businesses got to do with politicking. What have these companies done for any communities, have they provided education facilities, or social services etc.

    If shopping is to be political, I will happily boycott these Tory co's officially.

    I'm totally sick of junk promotion practices and rip-off's by these UK firms.
    I demand recession beater services with double for the value for my money.


    It's people that count not Corporations.
    M&S is outdated, providing sandwiches and fuddy duddy clothes.
    The Sainsbury's family and their children are already stinking rich.

    David Cameroon has just lost an election. I can't believe he misjudged his strategy so badly. We have to work like slaves in order to eat well.

  • Comment number 26.

    1. At 3:58pm on 01 Apr 2010, Caledonian Comment wrote:
    Let's be brutally honest - any business leader seriously cosying up to the likes of an untried, raw, inexperienced, occupationally irrelevant bloke like George Osborne wouldn't have the confidence of many of his shareholders for very long - or his job. Caledonian Comment

    =============

    Heard a nice quote today, which I will repeat as it was similar to a thought I had, and it made me laugh too. At lunch, at a nearby table, and rather loudly, a staunch labour man was harranging/discussing the coming election with, I guess, a not so staunch colleague and I presume was trying to convince him to vote labour. The usual stuff came up, 'World crisis', 'unprecedented' etc, all patted back with 'Well Gordon was in charge and didn't save blah blah', then the Labour bloke says, 'look would you trust the Tories to keep the recovery going, they haven't had proper jobs, we need to stick with experienced men like Brown' when a bloke on a neighbouring table gets up. picks up his plate and as he passes says, equally loudly, "Hitler had 13 years experience, but I wouldn't vote for him either." Sadly it ain't half so funny written here, but the sentiment is possibly accurate enough.

  • Comment number 27.

    9. At 5:05pm on 01 Apr 2010, Jacques Cartier wrote:
    > It's almost a Newtonian law that business gravitates to power.

    Truer words have never been spoken. And the fix is to distribute
    power very evenly, to confuse business. As with most
    important things, the British have failed.

    ===========

    In England, our Politicians think they are above the law, in some other countries I could mention, they are.

  • Comment number 28.

    Wrong Place At The Wrong Time

  • Comment number 29.

    18. At 7:31pm on 01 Apr 2010, HeartOfOak58 wrote:
    So 23 rich businessmen support the Tory policy on a particular issue. Why is this more newsworthy than 23 teaching assistants supporting a particular Labour policy? (Or for that matter 23 dustmen supporting the BNP?)
    =============
    Lucky I'm not a Dustbin man, I'd be doubly insulted.

  • Comment number 30.

    17. At 6:59pm on 01 Apr 2010, SSnotbanned wrote:
    Q-uell surpris-ed !!

    Turkeys didn't vote for Xmas ...invested interests seek something for themselves.

    ==================
    Unless you are on the dole or some other form of benefits, your answer is food for thought, as it

    a) Implies that you are wrong, you being the Turkey that wants his NI raised

    or


    b) suggests that you may not realise you are being taxed.


  • Comment number 31.

    Some of the companies on the list, such as Diageo and Xstrata, derive most of their revenue outside the UK, for example.

    The important problem here is that anyone thinks there opinion is worth a toss. These companies, like any other company do not have a vote, we live in a democracy.

    When push comes to shove none of them give a hoot about the employment rate in this country, and will happily increase that rate willy nilly to keep their shareholders happy - and how many of those shareholders, in a global market get to vote here in the UK.

    Businesses don't like being taxed. Too bad. The people make the rules, the people who vote make the rules. Businesses will never be happy paying taxes and have spent the past few decades finding every means of avoiding those taxes as they can.

    Close the loop holes and throw the directors in jail if they dodge their taxes. Maybe then they will respect the laws we set for them and the people who set them.

  • Comment number 32.

    All these tax projections are meaningless when there is no income.

    If there is a possibility that you may or will be unemployed, you should vote for a system that provides a safety net and will not make you homeless out of pure unadulterated corporate greed and manipulation.

  • Comment number 33.

    If Cameron was paid and/or chosen to deliver a result to these big money people he has failed

  • Comment number 34.

    32. At 11:54pm on 01 Apr 2010, JOHNNY REGGAE

    Well said. Did you hear the labour politician on Question Time talking about how pensioners were living in abject poverty on £69 a week under the last Tory government 13 years ago.

    What would that be worth now? but our benefits system gives what, £64 a week to the unemployed now. He just pointed out that we treat the unemployed worse than we did 13 years ago to the pensioners. Fair enough if your retired, if a pensioner can't live off it, then I don't see how any of those people made redundant by these moaning companies are supposed to. How on earth anyone is expected to live on that and get off to a job interview with a decent haircut is beyond me! How can you survive a winter on that!

    They'll say this NI increase will cost jobs. No, it's a tax increase they can't easily pass off through a tax haven or someother dodge. It's a payment businesses make to give all of us unemployment benefit and they don't want to pay it. How many people have Diago tossed out onto the dole? And they are moaning about a bit of social responsibility!

    If they paid their due, maybe the unemployed could have some heat during the winter.

    Anyone unemployed out there, you have my sympathy and wishes for both a job and a decent livable benefit while you suffer the mess these business people created yet escape themselves.

  • Comment number 35.

    There are a lot of comments about "why does their opinion count more than Joe Publics?" etc.

    As people who have risen to the top of their respective fields they know what it takes to run a business (and in particular how to run it efficiently) better than Joe Public otherwise they wouldn't be there. So when it comes to talking about reducing spending without taking away frontline services they have been there and done it.

    Not only this, but as the heads of their companies (employing around half a million people I think I heard on the news) they know what their recruitment strategies/targets would be with and without this tax and have all unequivocally said that a raise in NI would result in fewer jobs. So they aren't just offering an opinion from an ivory tower, they are giving a direct foresight into the consequences of such a tax rise...the result is obviously not good news for growth in the economy.


    It's also worth noting that they aren't coming out in favour of the Conservative party as a whole but weighing in on their side in this particular issue (only a few are registered Tory's and one is even a Labour donor). The fact that they unanimously feel the need to come out is unprecidented according to former labour trade minister Digby Jones and shows just how important they feel the issue is.

    There has been much mud-slinging, mainly over where exactly to find this money (despite no-one but the gvnment actually being allowed to look at the books) but I think it's worth putting in perspective quite how much the cancellation of this tax rise will cost - estimated £5-6bn by IFS. Now obviously this is a huge sum of money on any normal scale, but as a proportion of our deficit it is small and even smaller when measured as a proportion of out total debt.

    For the small sacrifice in reducing the deficit by a bit less in the short term, we are sending out positive signals to businesses throughout the world that Britain wants to provide a healthy and competetive environment for private enterprise (as well as indirectly creating a number of new jobs that otherwise wouldn't be affordable).

    I know that 1% NI in itself isn't suddenly going to make us a much more profitable option, but it is the sentiment that counts - we desperately need to restore the ebbing confidence in Britain as a place for enterprise. As a nation the only way we are going to get ourselves out of the hole we find ourselves in is growth.



    PS. I think Johnny Reggae deserves special credit for the most moronic post of the day, so moronic in fact that I'm struggling to believe it isn't ironic - I'll have to 'do a Mandy' and patronise you anyway.

    You're right, they don't directly provide schooling or social services, but where do you think the money comes from that does? From the taxes of the public sector workers? But where do their wages come from? And surely that wouldn't be enough? Oh, thats right - the money comes from the taxes of those who work in the private sector (ie those who actually generate wealth). So these people have risen to the top of the companies that do pay for your education (I'm assuming you're still in school), and if you're really lucky they might even give you a job on a saturday afternoon so you can save up for that xbox game you want.

  • Comment number 36.

    " The important problem here is that anyone thinks there opinion is worth a toss. These companies, like any other company do not have a vote, we live in a democracy."

    It is a shame some people can't even accept that we live in a society where we pay for everything from taxes that - directly or indirectly - come from businesses. Surely any fair minded person would do well to take some note of the opinion of the people who run those businesses.

    Government has the right to set taxes and regulations on business but would be very naive to further erode our competitiveness.

  • Comment number 37.

    Labour really only have themselves to blame on this one, if they'd been honest in the first place and said spending cuts mean significant job losses and not putting up NI would mean even more job losses then the Tories would not be able to claim that their NI plan is a free lunch.

    Labours mutterings that these business people have been deceived look ridiculous, and are, given to prove their case they'd have to admit they've been using the same trick as the Tories by claiming that "efficiency savings" are, in terms of damage to the economy, a pain free means of paying off the deficit.


  • Comment number 38.

    36. At 01:21am on 02 Apr 2010, lying-in-gutter wrote:

    It is a shame some people can't even accept that we live in a society where we pay for everything from taxes that - directly or indirectly - come from businesses. Surely any fair minded person would do well to take some note of the opinion of the people who run those businesses.
    _____________________________________________________________________________
    you're missing the money comes from people
    businesses can fade away
    people live on regardless

  • Comment number 39.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 40.

    you're really lucky they might even give you a job on a saturday afternoon so you can save up for that xbox game you want.

    ___________________________________________________________________________
    Cameron ain't tough
    he looks like a big fat marsh mellow

    if you go around with such a big frown
    nobody will like you

  • Comment number 41.

    Thank you for contributing to a BBC Blog. Unfortunately we've had to remove your content below

    Comments posted to BBC blogs will be removed if they are considered likely to provoke, attack or offend others; are racist, sexist, homophobic, sexually explicit, abusive or otherwise objectionable; are considered to have been posted with an intention to disrupt; contain swear words (including abbreviations or alternative spellings) or other language likely to offend.


    Subject:
    Newtonian law of power's pull on business

    Posting:
    35. At 01:11am on 02 Apr 2010, U14350905 wrote:

    PS. I think Johnny Reggae deserves special credit for the most moronic post of the day, so moronic in fact that I'm struggling to believe it isn't ironic - I'll have to 'do a Mandy' and patronise you anyway.

    So these people have risen to the top of the companies that do pay for your education (I'm assuming you're still in school), and if you're really lucky they might even give you a job on a saturday afternoon so you can save up for that xbox game you want.
    __________________________________________________________________________
    Wrong [censored] I'm a big man I've done the Sainsbury's tax return / hmrc reporting several times.. had some address issues as we only had solicitor's details not home address / residency on our system

    Like cameron and mr T you are a patronising fool.. fool

  • Comment number 42.

    Re: Sainsbury's Monies etc & U14350905 whats his name
    but where do you think the money comes from that does?
    _____________________________________________________
    ask them greedy men about tithing some of their wealth*

    * A tithe
    (from Old English teogoþa "tenth") is a one-tenth part of something, paid as a (usually) voluntary contribution or as a tax or levy, usually to support a religious organization. Today, tithes (or tithing) are normally voluntary and paid in cash, cheques, or stocks, whereas historically tithes could be paid in kind, such as agricultural products. Several European countries operate a formal process linked to the tax system allowing some churches to assess tithes.

    "Tithing" also has unrelated economic and juridical senses, dating back to the Early Middle Ages. See "Tithing (country subdivision)".

  • Comment number 43.

    35. At 01:11am on 02 Apr 2010, U14350905

    Countries and business are not the same thing. Societies and countries are not run for the benefit of business remeber or at least they shouldn't be IMHO. If business leaders think that countries and/or societies are there for their benefit, then that is disturbing.

  • Comment number 44.

    #38 JOHNNY REGGAE

    And the money they they are taxed on comes from business....

    If we all worked for the state (NHS, Civil Service, Fire, Police, etc) then tax would be simple..... it would be 100%, so you'd pay your tax and then get it back as a wage!

    The only profitable tax generated is from peple who work in the private sector..... 'Business'

  • Comment number 45.

    Bear in mind which ever party gets into power will already be increasing unemployment due to its "Saving Efficiencies"

    The Tory proposal costs minimum of £4.3 billion, cost is met by decreasing waste which means making people unemployed, unemployed people can't afford to shop at the likes of M&S, Next or Sainsbury's so these and other businesses sell less so they need fewer employees so they make people redundant &/or hire fewer people and the effect ripples around & around the economy.

    The Labour proposal makes it more expensive to employ people so employers make a few people redundant and hire fewer new staff. These unemployed people can't afford to shop at the likes of M&S, Next or Sainsbury's so these and other businesses sell less so they need fewer employees so they make people redundant &/or hire fewer people and the effect ripples around & around the economy.

    In other words its a Hobsons choice. Even with full access to treasury figures I strongly suspect it would be impossible to accurately cost either plan because there are too many variables, not least the growth rate which both plans will decrease.

  • Comment number 46.

    trickle down economic theories / lip service have never worked
    but we all know that from experience / the hard way anyway

  • Comment number 47.

    Stay with me here because this is counter-intuitive but true. It will shock you.

    Employer's NI contribution is 12.8%. That's 1/8 of pre tax income. Below I assume my worker is single, lives in a council flat and when working earns £500pw gross. Tax and NI figures assume £100 tax free allowance and 30% combined income tax and NI.

    What is the cost per week to the govt of having 1 in 9 unemployed rather than scrapping employer's NI and having that extra job.

    Loss to govt of dropping employer's NIC £500 pw.
    Gain to govt in not having to pay benefits £150pw
    Gain to govt in tax and NI £120pw
    Gain to govt in VAT and other taxes £50pw

    Total loss to govt of dropping Employer's NIC £180pw
    Total gain to worker of dropping employer's NIC £180pw

    So unemployment created by employer's NIC for our worker earns the govt £180pw but loses the worker £180, his job and his self respect.

    For the govt to create a job for our worker they will have to make unemployed 2.7 workers in private industry using employers NIC.

    For company tax to cover this loss to govt the worker would have to create £900 pre-tax profits pw. This is an exceptional investment banking ratio not the average worker. So forget this.

    What of circulation and up and down stream jobs, surely they create more tax. Well not really any more than spending that money on a nurse.

    So there you have it. The govt is better off by £180pw if it uses employers NIC to make our worker unemployed. And this profit for govt from unemployment remains true even if employers NIC goes to 100%.

    So the next time you see someone on benefits, don't think them a scrounger taking your money, thank them. Because the truth is their unemployment is lowering your tax not increasing it.

    And if proof was needed that govt is using employers NIC to make money from creating unemployment remember this. 21 million have full time jobs. Without employers NIC at 12.8% there would be another 2.5 million jobs. And how many unemployed do we have, 2.5 million.

    Employer's NIC is a disgusting tax and a disgrace on our society. At it's current level it creates 2.5 million unemployed in exchange for £24 billion in the govt's coffers.

    Budget wise the Conservatives don't have a leg to stand on in cutting it back. But in moral terms they are completely right. Unemployment drives at a mans heart and spirit. It is simply wrong to make 2.7 private workers unemployed using employers NIC just to create one govt job.

  • Comment number 48.

    copperDolomite @ 34 with Diagio..... and Robert Preston with "nice knighthoods" have given me a jolt to write a few lines. Time may have passed but I have to be careful and control my anger. I do not wish anybody to rush and burn the House of Lords down, or do I? But if you have slaved, yes, slaved and worked your butt off with long days up to 30(!) hours at a stretch and you really made sizeable contributions to the bottom line of the company headed by Alan Sheppard only to be shacked on to the rubbish heap and he, Sheppard "earns" himself a seat in the House, than, what is there left to do? But again there is comfort in knowing thast there are many more that have and have had similar fates and are perhaps worse off, having seen the pension scheme they were forced to join fold and their former "master" gracing the benches of that famous House, not to forget his son already sporting a knighthood.

    Why, why? Are there not some genuine members in that place, surely there must be some, why are they not objecting?

  • Comment number 49.

    My god, listen to yourselves! It is simple. Labour has bankrupted the country. Surely no one can dispute that fact. Conservatives are the only other party we have and they have some good policies. Let them have a chance. Who cares who finances them. I only care about my childrens future which Labour is flushing down the toilet.

  • Comment number 50.

    @49 Keep your propaganda
    The Marsh mellow man ain't ready
    He has never really done any real work, he looks like a youth on a nintendo wii

  • Comment number 51.

    @ 06-05-2010
    The Tory Party and the Big Businesses Scam Relationships Uncovered

    Big Bucking Businesses never really ever pay more tax

    They just claw it back from the mug punters with proportional mark up charges
    and terminate a proportional number of their disposable employees to save NI

    Hit em where it hurts
    In their fat pockets
    Shut em Down (Remix)

  • Comment number 52.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 53.

    Governments only spend money that is created by the private sector, if governments don't want to cut public sector expenditure then they need to help private business make more money. If not increasing NI and cutting red tape helps achieve this then it is a win : win situation.

  • Comment number 54.

    Are some moderotors working on the Common Purpose Payroll too to filter out truthful statements by the UK Public that may damage dodgy co's credibililty and beloved brand names type of corruption?

    Posting:
    Forgot "Next" tatty pap cheap clothes
    Get quality designer gear from factory Outlets such as

    a href="http://www.premiumoutlets.com/outlets/store_listing.asp?id=10"> Unsuitable link busted by paid shrill mudererererators / haters

    (40% discounts on top of a 40% discount on reduced retail prices)
    they are practically giving stuff away man
    google Wrentham Premium Village Outfits

    You know what time it is

  • Comment number 55.

    Out of interest sake : How much will the rise in NI cost the BBC ?

  • Comment number 56.

    It is time someone reformed this National Insurance con. It does not go into any national insurance fund just into the general goverments coffers. Paying it hardly gives you any extra entitlements. With another universal pension levy coming in soon Why not do the decent thing and abolish it and incorporate it into into income tax. You could at the same time make the employer contribution visible on the pay slip or even transfer it to the employee side. After all it does not matter if the employer pays it on our behalf or notionally deducts from our pay. Hopefully employers would adjust pay rates appropriately. Of course that would make the lowest marginal rate of income tax something around 43% but at least it would be an honest system.
    Then we could start discussing questions like should we really get someyting for our contributions and should rents, interest and investment income be taxed at lower rate than wages.

  • Comment number 57.

    Even if you think this cut in NIC is a good use of money you have to be aware that for the bond market it still money that could be used to close the deficit.
    It moves away from the previous position that cameron held that basically tax reduction must wait until a meaningful start has been made on reducing the deficit.
    Its a bit like a bank manager with a well overstretched client with a restaurant. Last week he talked to the client, who assured him he was aggresively cutting costs and then bumps into him a day later arranging for the restaurant to be recarpeted. It may be a good idea but its still going to get your overdraft reviewed.

  • Comment number 58.

    M&S are known in the industry for being late payers to suppliers :

    But let's reverse the roles and look at how big companies treat their suppliers. When they're the customers, it's a remarkably different story. Graydon UK, a credit information agency, polled 500 suppliers to large firms to ask about their payment experiences. A whopping 57 per cent of them reported their big customers had unilaterally altered their credit or payment terms in the past year.

    Typically, the changes involved extending payment periods from 30 to 60 days (but sometimes to 90 and in one case 120), or demanding a deduction on invoices received. According to Graydon managing director Martin Williams, this is particularly prevalent in the fashion trade, where Matalan, Marks & Spencer, New Look, Debenhams, Arcadia, Alexon, and Mosaic, have all unilaterally changed supplier rules of engagement in the past year. Matalan reportedly wrote to suppliers saying that in future it would simply deduct 2 per cent from all invoices received.

  • Comment number 59.

    Business people must do whatever they must do to protect their businesses and as others have pointed out, their comments could have been much more cutting, given this Governments (false as it turned out due to Blair/Brown in-fighting) emphasis on education - in which the end-product has generally disappointed.

    Business people are very important and deserve a fair hearing.

    However, it is probably way past time for people living in England to think about dropping tribal political allegiances, in particular to the mainstream parties of the 'manure Parliament' and look for some viable alternatives - for example at http://www.democracyengland.org/

    The mainstream political parties who caused the problems of the 'manure Parliament' cannot realistically be expected to solve them in the next Parliament.

    They’ll simply revert to type again and in your English hearts you know it, so why give them yet another chance to let us all down?

  • Comment number 60.

    What must be recognised is that a rise in employers national insurance contributions is not just a tax on jobs but also a tax on exports. To maintain our balance of payments any tax rises must apply equally to imports and exports. Thus a rise in VAT is much more preferable. In the medium term the effect on prices would be little different

  • Comment number 61.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 62.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 63.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 64.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 65.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 66.

    Apparently the BBC Mods will not authorise or approve of any Dominican Soca
    ____________________________________________
    There is a new drug going round town
    It’s called ‘Looking For Their Pocket’
    by Yakima

  • Comment number 67.

    And it goes a little something like this

    ♩ ♩ 2669 QUARTER NOTE
    ♪ ♪ 266A EIGHTH NOTE (present in WGL4)
    ♫ ♫ 266B BEAMED EIGHTH NOTES (present in WGL4)

    ____________________________________________
    There is a new drug going round town
    It’s called ‘Looking For Their Pocket’
    There is a website list
    Of all the greed addicts
    Ministers are on it on it
    ‘looking for their pocket’
    Firms are on it on it
    ‘looking for their pocket’
    White collar addicts are on it
    And police can't stop it stop it
    Goodbye to our integrity
    Hello to new immorality
    All greed addicts won't stop it
    Filling up their pockets
    ‘Till all their pockets full
    And our pockets empty

  • Comment number 68.

    Darling criticised Osborne about the NI issue, shame GO wasnt sharp enough to suggest that the increased pressure on businesses bottom lines would result in a cut in people in employment, less tax receipts and more dole claimants. Its not that 6bn of savings are going to pay for the policy, its just Labours policy will cost that amount.

    The business leaders are right to support the Tories proposals on NI as they can see the logic to it.

    As for Cameron aka marshmallow head, not being ready, well even if he isnt, Brown and Darling are just about done.

  • Comment number 69.

    How can unilateral political statements by directors of allegedly unrelated companies be anything but networking on the sly for the ulterior motives of collective control from an egotistical greed type of standpoint

  • Comment number 70.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 71.

    Diageo worried about a "tax on jobs"? Have they forgotten http://news.bbc.co.uk/1/hi/scotland/glasgow_and_west/8132398.stm ? Turfing 700 people out of jobs seemed acceptable just few months ago, why should they care now?

  • Comment number 72.

    Apparently we do not have legal rights in any Courts of Law as they are also controlled by big money (freemason type ) people and big co's and you have to become like the super-hero ghost rider who is really an anti-hero from hell, as the only justifcation for any legal application can be about money and to prove that someone owes you more without ignoring the small-print with credit co's thiefs like M&S Sainsbury's etc when you sell your soul and your wife and children to the debtors and loan sharks and gangster crim's etc
    ___________________________________________________________________________
    Locus standi




    The right of a litigant to act or be heard.









    It has been called "one of the most amorphous concepts in the entire domain of public law".









    In common law the litigant has locus standi if a private right is interfered with; in statute law the right is conferred by the statute. For example, in Boyce v Paddington Borough Council (1903), the claimant Boyce had a private right of access interfered with by the Council and consequently suffered special damage, he therefore had a special interest in the subject matter of the action and had locus standi.









    Conversely, R v Secretary of State for the Environment, ex parte Rose Theatre Trust co (1990) the remains of the Rose Theatre, which had seen the first performances of works by Shakespeare and Marlowe, were discovered during redevelopment works in the London Borough of Southwark. The applicant, whose members included distinguished archaeologists and actors, was formed in order to campaign for the protection of the remains, the group did not have sufficient interest and therefore no locus standi.

  • Comment number 73.

    The letter was not written by 23 people. It was written by one who then persuaded 22 other people to sign it. Well done, Mr. Wolfson.

    There will be a 1 per cent rise in NICs made by all employers. Are these employers then saying that many businesses are trading at such low margins that this will drive them out of business? That is not credible.

    Is their concern that their profits will be eroded? Since they are competing domestically with businesses that all face the same handicap, relatively that should not be a problem. Even where they are competing interntionally, 1% should not make a huge difference.

    Will this increase in wage costs mean they will take on fewer workers? It should not, unless a 1% increase in a worker's wage cost wipes out any profit that could be got from employing that worker.

    So, is this just business people trying to protect their absolute level of profits and ignoring the fact that no matter how many efficiency savings or increases in productivity there will be in Whitehall, these are unlikely to fill the deficit gap? Or is it just politics?

    Deep down, my gut feeling is that this does not do the Tory party any good. Such a ringing endoresement of George Osborne's policy by business people will only make voters understand that the Tory party is beholden to "business" and appears to take more seriously certain business people than any other voter.

    It was the cult of trusting business to get it right and abnegating governmental responsibility that started in the 80s and continued with Tony Blair that got us into this hole in the first place.

    Not so much New Tories as New Tonies.

  • Comment number 74.

  • Comment number 75.

    I do not necessarily subscribe to the view that the sun shines out of DC's bum, nor his monumental argument that he will provide a 1 point tax break as a favour to the people, sorry directors of home made bad fashion manufacturing retail companies.

    However, I am bored and fed up now talking and debating about the tory platform and their general rubbishness and I do not wish to inadvertenly give them any publicity so I will just say that you Can’t Truss It and withdraw from this tories and businesses in bed thread

  • Comment number 76.

    American Apparel sale closed in London after scuffles :
    As mentioned previously above, the UK public are hungry for some American style bargains not Uk stylillylillylee




  • Comment number 77.

    Political controversy is rarely good for business. Especially near elections.
    Businesses should avoid aligning themselves to political factions or philosphies. Customers may not all share those views. Nor might their own people.
    BA got into trouble with shareholders and others in the Tory years for donating big bucks to a Party that was controversial.
    Don't do this!

  • Comment number 78.

    This really does make me laugh out loud.

    I mean finding a business man who will vote for tax increases is a bit like finding a banker in the City of London who would vote against bonuses.

    O.K. perhaps not totally impossible but something of a rarity.

    But for the many people who are unemployed and for the substantially larger number who are under-employed the threat of reduced public services and/or benefits is a serious one.

    Amd if you don't get what I mean by the under-employed then next time you hear about the "umemployment" figures remember that they don't go up by a single one when a highly trained, experienced and qualified engineer has to take up a job as an office cleaner as there are no other jobs available, nor when a highly trained, experienced and qualified technician in some field loses his job but his wife manages to get a job as a cashier in a supermarket.

    Many households are surviving on consdierably less income then they were when this recession started. And wasn't it started by the error of other (banking) business leaders?

    Of course if these heads of business were to get the heave-ho tomorrow, they would have a wad of reserve resources to keep them reasonably afloat as well as a network of old pals (and old school tie acts) to help them back into employment.

    Most ordinary people have JobCentrePlus which is not very effective at its best and is getting its resources hacked to bits anyhow. There is little to look forward to for the unemployed in the "Flexible New Deal" provisions which will be with most people by the Autumn.

    But, of course, these business leaders are at some other place compared to the majority of the population.

    Lucky them.

  • Comment number 79.

    I see Mandleson has attacked the head of Barclays. Before Mandleson attacks anyone he should tell us all how he afforded his multi million pound London villa.

  • Comment number 80.

    Perhaps the thing that needs to be dispelled is that success in running a business indicates an ability to run the country.

    Put simply Sainsburys and M&S operate in areas where they know they will be successful. Stelios does not provide cheap flights where people need them unless he knows he will make a profit. Didn't M&S close some loss making stores last year? A realtively easy decision compared with having to decide what to do about an area where suddenly a major employer decides to make 1000 people redundant. These business leaders may well be able to run the country better than Cameron or Brown, but while there is a bit of a merrygoround of these people between companies - not one of them seems ready to have a go at taking a major role in government.

    That does not mean that they are nor right to fight their corner as the increase in NI will affect jobs, but then teachers say they will do the job better with smaller classes, doctors will save life with more equipment and drugs, admirals need more technology on their ships, farmers need more money to achieve higher standards of animal and land management, some families need more money to get children out of poverty, business needs more roads and easier planning for them, but not their rivals, IT companies need a supply of work to keep our knowledge based workers in this country etc

    Everyone is looking at their small slice of the cake.

    The big problem that is not being tackled is how do you plan and make people accountable witout employing large numbers of bureaucrats? The parties say that they will reduce the number of targets. Targets are bad if they become an end in themselves, not merely a means to an end. But how do you measure improvement as a justification for expenditure if you don't collect data and set targets? It is in this area that business people could really help the country - exept of course a shop like Sainsburys can tell how fruit sales are going on a daily (probably hourly) basis in every store so they haven't even got the experience in doing what they are telling the government to do.

  • Comment number 81.

    We need to train and implement a financial police force team to work inside banks capturing and monitoring every complex and simple transaction for analysis as banks no longer have the right to operate behind closed doors with the assumption that they operate legally without making reckless or incorrect decisions. There should be personal liability attached to any unacceptable practices. Courts and Judges etc will also need to be trained accordingly.

  • Comment number 82.

    So entrepreneurs bankers and speculators wreck the economy then complain about tax rises to pay for the unemployed etc. No shortage of brass necks then....

  • Comment number 83.

    # 27. At 11:00pm on 01 Apr 2010, DevilsAdvocate wrote:

    >>>9. At 5:05pm on 01 Apr 2010, Jacques Cartier wrote:
    >>> It's almost a Newtonian law that business gravitates to power.

    >>Truer words have never been spoken. And the fix is to distribute
    >>power very evenly, to confuse business. As with most
    >>important things, the British have failed.

    > In England, our Politicians think they are above
    > the law, in some other countries I could mention, they are.

    Yes. England is rubbish, but some places in, say Africa, are even worse, eh?

  • Comment number 84.

    If business is against the rise, then it must be good for people.

  • Comment number 85.

    Presidents "Blair and Brown" have been able to ignore parliament and the rest of us so perhaps a hung parliament would be good. Unfortunately we need some big reforms put in place to move this country on and rebuild our industrial base e.g. planning system to speed up national imperative projects like renewable power production and high speed rail that get stuck in decades of planning reviews, better support for industrial base with expanded export credit system. Best quote I heard this week on world service; "It doesn't matter where you come from. Work hard, pay your taxes and respect the law. That's all that matters."

  • Comment number 86.

    Doesn't this argument remind anybody of a previous one? How about the row over
    the introduction of the minimum wage. This was also going to be the end of the
    business world as we then knew it. A tax on jobs, a hinderance to growth, this was
    the rhetoric of that debate. All sadly familiar. Did any of that come to pass? No.
    So, what then is the real agenda? Will all this new found chummyness produce
    results favourable to business? It could presage the marking of time until the mini-
    mum wage goes the same way as the state pension, to wither away until 'it's not
    worth having'. We've heard that somewhere before haven't we.
    Regards, etc.

  • Comment number 87.

    While it is likely (but not certain) that a rise in employers' NICs will lead to job cuts in the private sector, if government spending is cut more deeply to avoid the NICs rise, there will certainly be additional job cuts in the public sector. It is, therefore, completely unsurprising that leaders of private sector companies prefer the Tories' plans to Labour's, i.e. they prefer others to bear the burden.

    This case illustrates very well the choice we have at the next election. Shall we vote Tory and sack a few extra public sector workers (teachers, nurses etc.) in order to retain private sector jobs (bankers etc.)? Or shall we vote Labour or Lib. Dem. to preserve public services as far as is possible within the constraints imposed by current economic circumstances?

    The Tories had similar policies last time they were in power. Remember the two-year waiting lists for NHS treatment and escalating class sizes in our schools!

  • Comment number 88.

    Why vote Conservative when there is a conservative party in power already?
    There is not any real difference between red, yellow, or blue. They are effectively all the same.
    When are we actually going to get democracy?

  • Comment number 89.

    Get some new friends Dave.

    What does a bunch of shopkeepers know about the economy? These firms are not exactly renowned for their "Buy British" policies.

  • Comment number 90.

    Good stuff Robert - very shrewd!

    I've also noticed over the last year or so that some of those contributors on BBC blog sites who are 'pro-Labour' have also admitted to having businesses that are 'bankrolled' by the government?

    Their 'Blood is thicker than water'?

  • Comment number 91.

    "A tax on jobs, a hinderance to growth, this was
    the rhetoric of that debate. All sadly familiar. Did any of that come to pass? No."

    And how many (reltively low paid) jobs have now gone to China and India.

    What is our balance of payments deficit - see how much it has increased since the minimum wage was introduced?

  • Comment number 92.

    The audacity of it, how can these business people, criticise the government for a 1p NI tax increase, when they have been ripping off the public for years & nearly wrecked the whole world economy, with their stupid gambling of our money & losing £billions & £billions, in the process.

  • Comment number 93.

    Don't blame Isaac Newton. Perhaps if a few apples fell on our politicians heads, they might see the light as well!

  • Comment number 94.

    All in all, I'm now unclear just which bit of this makes me want to cringe the most.

    That these businessmen have this collective opinion? (Well many people have some opinion on tax and, therefore, public services and the ways in which public money is spent and many of those opinions get expressed in pubs, on blogs and in many other ways).

    Or that the media have given it so much mileage? (I mean it's not exactly a surprising or unexpected viewpoint for "big business" types to hold, is it? They're not very likely - unless quite exceptionally philanthropical - to beg for opportunities to pay more tax, are they?)

    I actually think they are wrong and that the prevention of public services collapsing too far will help businesses in the mid to long term in ways that will far outweigh the alleged pain of the increased NI contribution.

    Hell, chaps, we need to keep some things ticking over in the UK to at least some degree, or we might just end up with everyone of any value leaving the country to find any sort of employment at all any where they can.

    And then who will manage your company's branches and departments? Who will do all those things needing varying forms of technical expertise for your businesses?

  • Comment number 95.

    Are all these businesses going to stop outsourcing jobs from the Uk to cheaper countries. This isnt about jobs, its about greed and profit. As we keep getting told, we are all in it together, time for big business to share the load...

  • Comment number 96.

    Oh happy Britain if political power pulls business! Sounds like a distant, almost forgotten dream.
    From my experience, it is far more likely that business and banks pull and push politicians around whenever and wherever they like. This is at least true for the continent.
    Yet another question: can we still distinguish business and politics? Its the same people pursuing the same (economical liberal) interests and strategies, giving the same (economical liberal) statements. Its the power caste of people switching back and forth between business and politics. They tie and pull together, not apart.

  • Comment number 97.

    #95

    As long as the UK workers accept lower wages - yes.

    We need to downsize to keep our place in the third world that our government has put us into.

  • Comment number 98.

    Bill,

    Disagree. I would have thought that downsizing is NOT the way to go. Running your business very efficiently, minimising waste, cutting costs, maximising income, trimming off dead-wood, risk spreading, diversification, would sound more like the way to proceed.

    Obviously that IS the stance that big business is taking. There's no sign of Messrs Sainsbury's, Tesco's, or M&S closing down branches all over the UK in a desperate attempt to "downsize" their operations, is there? In fact, they're still - as ever - working to increase and develop their sites and shops.

  • Comment number 99.

    "Shall we vote Tory and sack a few extra public sector workers (teachers, nurses etc.) in order to retain private sector jobs (bankers etc.)?"

    Actually it's more like:

    "Shall we vote Tory and sack a few extra public sector workers (diversity consultants, Regional Development Agency directors, 'real nappy' advisors, management consultants) in order to retain private sector jobs (shop assistants, bus drivers, cleaners, sales people, accounts clerks, receptionists, room attendants, painters, mechanics)."

    It's the socialist blinkers again - the public sector only employs doctors, nurses and teachers. So where's the rest of the cash going?

  • Comment number 100.


    ❝People know that it is a tax on jobs that threatens to kill the recovery❞
    Shadow chancellor George Osborne
    _________________________________________________________________________
    when you are WRONG
    you are really really WRONG
    Mr Georgie Porgie Pudding Pie

    Vote Not Tory in the HEAVY BALLOT
    ☒ labour

 

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