BBC BLOGS - Peston's Picks
IN ASSOCIATION WITH
« Previous | Main | Next »

Can and should the chancellor cut business taxes?

Robert Peston | 08:20 UK time, Wednesday, 23 March 2011

In the run-up to today's Budget, ministers have been banging on that their priority is to promote growth.

George Osborne

So today the Treasury and Business Department will publish a paper alongside the Budget red book that will be their prescription for rebalancing the UK away from a consumer-driven, debt fuelled, City-focussed economy to one where advanced manufacturing, the creative industries, tourism, pharmaceuticals, business services other than finance, inter alia, all have a bigger role.

The impossible-to-ignore background is that recovery from the 2008-9 great recession has been insipid, and that the record burden of household, bank and government debt is weighing heavily on the UK economy's ability to grow.

To remind you what you all know (sorry), public expenditure is being cut to shrink a deficit perceived as unsustainable. And consumer spending is under intense pressure from a squeeze in disposable income and a growing recognition in households that their indebtedness - still at unprecedented levels - needs to be reduced.

Which means that the heavy lifting in the economy has to be done by private-sector companies.

Unless they invest more, export more and employ more, the three-year squeeze in living standards suffered by the vast majority of us may continue for many more years. Without growth generated by private sector companies, unemployment may not fall to any significant extent, wages won't start to rise to offset the effects of inflation and the government won't receive incremental tax revenues that would allow future tax cuts or improvements in public services.

Without growth, the coming years look bleak for the UK.

But what on earth can the chancellor do to promote growth - to encourage more investment by companies, to stimulate exports - if he has no money to give away?

At the weekend, George Osborne said that the Budget would be fiscally neutral - which means that any tax cuts in one area would be matched by increases in other taxes or new spending reductions.

If for example he were to decide it is an imperative to reduce the financial burden on companies by cutting corporation tax faster or by more than he has already said he would do, savings would have to be found elsewhere.

Which means that some of us would feel the victims of the government's determination to help the private sector, bringing political risks for the coalition government.

For business, it is not just the rate of corporation tax that matters. Multinationals have been banging on for years that rules on how their profits outside the UK is taxed means that the advantages of having a head office or domicile in the UK are no longer what they were. Some international companies, such as the advertising group WPP and the pharmaceuticals company Shire, have already packed their bags and relocated to Dublin.

In response, the government has been carrying on with work initiated by its predecessor on possible reforms to so-called Controlled Foreign Company rules, which determine how much tax multinationals pay on cash sitting in non-trading entities abroad, and on what tax should be payable on dividends remitted to the UK from multinationals' branches.

Almost any reforms that the chancellor could announce to meet the government's aims of making the UK as attractive as possible for multinationals would be expensive - at a time, obviously, when every scrap of tax revenue is precious.

To state the obvious, reducing the tax burden on multinationals - including big banks - would not be universally popular.

Apart from tax, companies are also deeply concerned about whether Britons have the skills necessary to equip the UK for the global commercial war against India, China, Korea, Germany and so on.

Some have questioned whether at a time when it would presumably enhance the UK's growth potential for its workforce to become smarter, it was sensible to raise the personal cost of obtaining university education to a maximum of £9,000 a year. If the increased private cost of education deters younger people from investing in their skills, that would not lift the UK's productivity.

Any moves by the government to boost apprenticeships, work experience and vocational training (and it's clear from weekend media leaks that there will be a fair bit of all this) will be perceived to be important. But, again, there are limits on what government can do because of budgetary constraints.

That said, not all possible measures to stimulate growth costs money.

Last week, the Business Secretary Vince Cable announced a war on red tape: there is bound to be more detail today on individual regulations that will be abandoned and on his plan to harness popular pressure via the internet to force a loosening of regulatory shackles imposed by Whitehall departments.

There is one area of commercial activity where businesses feels particularly fettered, that of development - or the building of offices, supermarkets, factories, houses and infrastructure. Companies have been shouting loudly for years that the UK's growth prospects have been inhibited by an officially sanctioned nimbyism, by the long delays and massive restrictions placed on any ambitious development.

That said, if there is the kind of sweeping liberalisation of planning and construction that businesses would want, if the powers of local authorities to curb development are reined in, there may be elation felt by housebuilders and developers - but homeowners may feel anxious and miffed, only weeks before important local elections.

Comments

  • Comment number 1.

    Homes are for living in, hopefully we will have gone some way to learning that lesson by now. If homeowners are miffed by the idea that other people will be able to live in an affordable and practical home then that's just their bad luck.

    On bureacracy, as a small business owner I have found HMRC to be suprisingly helpful but many of the other government departments, particularly Companies House, to be real jobsworths. We are looking at taking on staff at the moment but consider the risks very high because if we accidentally take on someone who sees us only as a meal ticket and we make any mistakes the legislation is stacked against us. I doubt that I am alone in that belief.

  • Comment number 2.

    So, "advanced manufacturing, the creative industries, tourism, pharmaceuticals, business services other than finance, inter alia, all have a bigger role" (to play in growth.)

    Is this the same pharmaceutical industry which has cut some 5,000 research jobs in the UK in the last 12 months? Just the type of employment the country can ill afford to lose - highly eduacted, well paid employment. Still we can all get jobs stacking the shelfs at Tesco.

    Napoleon was right, we are a country of shopkeepers!

  • Comment number 3.

    Mr Peston, it does not follow that a reduction in any tax rate requires savings to be made IF there is a reasonable expectation that the tax yield will rise to compensate OR other unspent or planned expenditure is deferred or avoided. As usual you view all matters financial as a matter of zero sum whereas they can be flexed.
    On the multinational tax point, the companies have not left the UK, rather their legal ownership for tax purposes has - for example, WPP still employs thousands of UK staff.

  • Comment number 4.

    House builder generally hold al least 3 years supply , so we must have at leat 500,000 land plots available to build today.

    The problem is there is only demand for aprox 100,000 a year at current prices . In fact house builders have already confirmed they will only build where they can maintain a 10% margin.

    The problem is we are all skint (Or not as rich as we were being told), so its going to be a slow tortures growth line , we are simply up to or eyes in debt and need to pay it down before we can move forward.

    The saving grace ,unlike Ireland , Greece etc, is we are not being forced into decisions by the Germans.

  • Comment number 5.

    The defecit is unsustainable: anyone other than Ed Balls can see that.

    But growth?

    Sound of air being sucked into mouth through gritted teeth.

    I would agree that the heavy lifting in the economy is going to have to be done by the manufacturing sector, but government has not only neglected this sector since 1997 it has often imposed policies that constrain and limit the ability of this sector to perform.

    So we are not just talking about a little bit of hard work but an entire cultural change. This won't be achieved by a tax cut here and an allowance there although every little bit helps. It also means that government must intervene in the economy to facilitate new products, to support new industries and allow manufacturing to grow. This will take time as it has taken us thirty years of utter stupidity to get into this pickle.

    Let us put it this way, George Osborne can set the mood music today but not much else. But even that would be a start. I hope he manages it for all our sakes.

  • Comment number 6.

    With 10% having 90% of the wealth, communism has never looked so good. We really should reverse the 30 year decline in real wealth of the masses. Stop the widening gap. Stop the poverty. Stop the desperation that is soon to sweep over this nation. In the UK we manufacture our own tsunamis and ironically, only an earthquake in the social order will bring the tsunami to create order from our broken and unjust society.

  • Comment number 7.

    So the great growth strategy amounts to not very much at all which of course is in keeping with the Adam Smith economics of this government. I am surprised there is not an announcement that tin pot employers can now sack with impunity tricky employees, the newly pregnant and the inconveniently sick. Liberalising the planning laws so that offices and out of town hypermarkets can be built will not help the economy grow where it is needed - are there not enough abandoned factories and premises to facilitate growth for the next 5 years?

  • Comment number 8.

    The introduction of tuition fees and subsequent rises will hopefully drive English education standards up. If were not for the fact that university is seen by govt as a way to keep youth unemployment low, then there would not be such a need for courses that are geared towards low A level passes. University education is not a right, it is a privilege.

    This may only be achieved, however, through the tightening up of school standards and making O levels and A levels tough and demanding. I know this is not PC, but look at what the likes of China, Germany etc study at school and then draw your own conclusions

    Corporation tax is always going to be difficult to balance, as is personal tax. Easiest way is:

    1. Create a list of acceptable deductions from sales and the resulting profit will be taxed. The list may be amended over time, obviously, but if it is clear to business what is and isn't allowed, then it is simple and easy to understand so that there is no benefit in trying to find ways to avoid. Tinkering over the years has made it too complicated

    2. For personal taxation, introduce a flat rate tax and raise the threshold to £10k per annum. Automatically takes many lower paid people out of the tax system and for the rest of us there is an easy to understand system that again makes avoidance pointless. I know many will say this is unfair, but a tax of 15% on £20k raises a lot less than 15% on £200k

    The knock on effect is that these measures would automatically reduce govt spending as there would be no need for an army of tax inspectors needed to try and interpret their own rules!!!

  • Comment number 9.

    I am not convinced by your "three-year squeeze on living standards". The biggest impact of the recession has been a reduction in interest rates to their lowest levels in living memory. The majority of us (particularly those with mortgages) have had three years of inflated income, and rather than using the additional income to reduce debt, we have been spending it on more consumer goods and incresing our debt.
    The question that needs to be addressed is how to pursuade us to save when we live in a consumer driven world.
    How quickly we forget what living with 7% plus bank interest rates is like...

  • Comment number 10.

    The government is intent on following essentially the same policy that their Tory ancestors did in the 1930s, and the signs are that the result will be essentially the same. A decade of high unemployment and misery for the poor, and great fun for the wealthy few.

    The imminence of war in 1939 finally put an end to the Tory policy of cuts and more cuts, and unemployment disappeared almost overnight. Warfare, or the prospect of it, seems to be the only thing likely to persuade a Tory Chancellor to loosen the purse strings.

    David Cameron is showing signs of having almost as large an appetite for using military assets as Tony Blair. So perhaps there if hope for the economy yet.

  • Comment number 11.

    I would disagree that the rise in University fees is a disincentive and weakens the competetitive position against India, China etc.

    Their competitive edge comes not from graduates but (a) highly motivated and skilled manual labour and (b) low wage costs

    The drive to push young people into universities (and off the youth jobless register) which was so heavily promoted by the last government has led to a plethora of degrees to suit 'fads' and 'fashion' - not the productive needs of industry.

    This gave us a whole raft of graduates with debts needing graduate level salaries and unwilling to accept other forms or levels of employment. So we now have shortages of skilled manufacturing labour and in consequence those who did take that career route are able to command higher wages, in turn making their factories uncompetitive with the Far East.

    How this is reversed seems difficult but one thing is for certain - universities must be incentivised to deliver productive degrees not introspection and bland courses like 'media studies' and 'fashion studies'. And school leavers must be taught the value of craft and technical skills, then given first class opportunities to learn them

  • Comment number 12.

    As a councillor responsible for planning policy I am deeply concerned about the details of the proposed changes to planning rules. Public infrastructure is required to support development, and largely will need to be paid for by developers. If these reforms are done badly we will have no schools, roads, etc to support new developments.

    Councils suffered for years from Prescott's one-size-fits-all approach to planning - if local councils are given more powers to shape plans in their areas to rationally provide for housing, employment, etc we will end up with better and more sustainable places to live than if it becomes a free for all for developers.

    It is a question of giving councils real powers to shape their area, and real incentives to provide for development and overcome understandable nimbyism. The new government has started down that road, and the best approach would be to build on that.

  • Comment number 13.

    @1. At 09:00am on 23rd Mar 2011, RichYork wrote:
    "Homes are for living in, hopefully we will have gone some way to learning that lesson by now. If homeowners are miffed by the idea that other people will be able to live in an affordable and practical home then that's just their bad luck."


    And exactly how does that fit with this:

    "......Mr Osborne will also announce £250m to help 10,000 first-time homebuyers purchase newly built flats and houses."

    ......which, along with historically low interest rates, seems to resemble propping up house prices.....

    PS I've got an old idea. Let's inflate our way out of this......

  • Comment number 14.

    Brad DeLong blog 2010, 'The Four Horsemen of the Teapocalypse':

    'Agreeing with Schumpeter was Herbert Hoover's Treasury secretary, Andrew Mellon. In his memoirs Hoover was bitter toward many, but bitterest of all toward Mellon, whom he called the head of the "leave it alone liquidationists." Hoover quotes Mellon: "It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people." Hoover opposed Mellon's policies, he said, and worked to undermine them. But what could he do? He was, after all, only the president. And Mellon was Treasury secretary.
    Think Mellon is just an anachronism? Then consider current British chancellor of the Exchequer, George Osborne, and his claim that today's record-low interest rates in Britain are a sign of financial strength and not of anticipated prolonged depression: "The emergency budget in June was the moment when fiscal credibility was restored. Our market interest rates fell to near-record lows." That is pure Mellon. It is definitely not Keynes. It is definitely not even Milton Friedman.'

  • Comment number 15.

    Yes Robert, any moves by the government to boost apprenticeships etc will be welcomed. Particularly degree level apprenticeships (sandwidge courses) like we used to have. This transfers the cost of university education from the individual to the employer, and will help the individual to move smoothly from education to employment.

  • Comment number 16.

    Mr Peston, your repeated reference to companies gives the impression that you equate business and enterprise with corporate status (I fear HMG may also fall into this trap). To roll up all reliefs/ incentives into corporation tax reductions means a corresponding disadvantage to those enterprises which operate under different models (partnerships,sole traders). There are hundreds of thousands of such businesses, from law firms to builders to high street traders and farmers. They are the backbone of the economy and should also be encouraged/incentivised to invest and grow. If HMG continues to have a blind spot where these businesses are concerned, the recovery will be slower coming than it could be.

  • Comment number 17.

    The usual Tory economics of user pays and therefore an adequate standard of living is a priviledge rather than a rght. Gloating at your less able neighbours while offering your crumbs to those who are humble enough to beg for it is all part of the great Big society initiative. The Tories obviously believe that the growth of Psychopathic tendencies is essential to their debt reduction plan..

    It makes economic sense for me to rather have the government borrowing at 3% or less to maintain my standard of living than for me to use my credit card at 17% or Wonga at 2000+%. I have no problem with Government debt especially since of lot of it is fake and all can be eradicated with a simple stroke of the pen

  • Comment number 18.

    Quite a few contributors, myself included, have been saying for years that the only (positive) way out of this recession (depression or what you will) is through private investment in new products and production facilities - making things that people want to buy here and in export markets.

    Everyone now seems ready to accept this obvious truth and we come to the question, how might this be achieved?

    Tricky! (as my young son used to say when asked something he couldn't answer.)

    Maybe it will come down to cutting taxes and "red tape" (for which read Regulations to protect employees, the environment and what have you): but by how much? I fear that we will never compete with China et al on costs without radically reducing our standards - whereas everyone would surely be better off if they were to increase theirs.

  • Comment number 19.

    "At the weekend, George Osborne said that the Budget would be fiscally neutral - which means that any tax cuts in one area would be matched by increases in other taxes or new spending reductions"

    So basically, the same as every other budget.

    ".....there may be elation felt by housebuilders and developers"

    Maybe, but who is earning enough to buy a new house? Bankers perhaps.

  • Comment number 20.

    9. At 09:47am on 23rd Mar 2011, Ed Hart wrote:
    I am not convinced by your "three-year squeeze on living standards". The biggest impact of the recession has been a reduction in interest rates to their lowest levels in living memory. The majority of us (particularly those with mortgages) have had three years of inflated income, and rather than using the additional income to reduce debt, we have been spending it on more consumer goods and increasing our debt.
    The question that needs to be addressed is how to persuade us to save when we live in a consumer driven world.
    How quickly we forget what living with 7% plus bank interest rates is like...

    .....................................................................................................................

    Until the last payment the bank still owns your house. Propping up ridiculous house prices is really just propping up the banks balance sheets. In America if the house you bought loses it's value, you can just cut and run and leave the bank with the headache of falling house prices. Build affordable rent-able houses through the housing associations, it Free's up money for people on low and middle incomes and stops the banks ruling our lives through debt. Forget all the other twaddle, this is the only way for Britain to move forward......together.

  • Comment number 21.

    Robert, interesting as always. But do you think the city/media/politicians are overly focused on multinationals? Perhaps because they have more direct influence, are memorable, provide better stories?

    What about SMEs - wouldn't a recovery which is founded on SME growth be much more sustainable, democratic (in the sense of less risk of big firms exerting too much influence on policy by saying 'we'll leave unless x is met') and better for jobs and skills too?

    Why not policy focusing on this aim? Rather than discussing multinationals constantly?

  • Comment number 22.

    "advanced manufacturing, the creative industries, tourism, pharmaceuticals, business services other than finance, inter alia, all have a bigger role"

    As mentioned above successive governments have all but killed the UK pharmaceutical industry. The UK science sector, a profitable one, has basically been decimated. I along with may others completed my PhD in the UK but have had to move to the US to get a decent job. One budget cannot solve an issue like this because the problem is so systematic and endemic.

  • Comment number 23.

    Growth, for lack of a better word, is good. Growth is right. Growth works.

    Growth clarifies, cuts through, and captures the essence of the evolutionary spirit.

    Growth, in all of its forms; growth for life, for money, for love, knowledge, has marked the upward surge of mankind.

    And growth, you mark my words, will not only save George Osbourne, but that other malfunctioning corporation called the United Kingdom...

  • Comment number 24.

    The talk of high tech industries etc, etc, reminds me of Harold Wilson and his 'White Heat of Technology'. The results were rearing inflation, an effective wage freeze and Rolls Royce having to be nationalized. Having gone broke as a result of being pushed into an unsustainable contract to provide engines for the Lockheed Tristar.

    I cannot see any proposals to even start to tackle Britains under lying problems.

    Britain cannot even feed itself. She has 1,000 people per sq.km. of agricultural land. In comparison, Spain has 300 and is generally in balance. The situation was made worse by the government cutting out agricultural subsidy resulting in a move from high imput high output agriculture. Madness for a small overpopulated country.

    I take no pleasure at all in the state that my native land is in. I only hope that a leader of the stature of Churchill appears, the situation is, in my opinion, as grave as in 1940 and this time there will be United States bailout.

  • Comment number 25.

    Today I feel is a challenge to George Osbourne as he has in effect already pre-announced the major changes that are going to take place. So with little room for manoeuvre he is likely to resort to relatively cheap eye-catching moves.

    As to whether these will do any good I see an interesting perspective from the economist Shaun Richards.

    "Unfortunately we have a political class mostly skilled in nothing but politics so the chances of them really getting a grip and helping business are not that high. If we look back in time then the most success has come from reductions in red tape and encouragement of enterprise but I fear that politicians are always tempted to “do something”, and hopefully bathe in public acclaim. Unfortunately this rarely coincides with something that works!"
    http://t.co/Z47Ixpb

    I think he has a point we perhaps need politicians to avoid meddling in things that they do not understand.

  • Comment number 26.

    I used to vote for the Conservatives up to 1998, but when I look back on things, they did an awful lot of damage that we are still paying for. I stopped voting until UKIP came along. I feel that both Labour, Conservative and the Liberals are a boom bust policy. Both the power of government and big business require downsizing and smaller businesses need to be given more power. The only thing we are going to get out of this government is a vote on AV, then onto proportional representation, so that we can have a more sustainable government. We need real people getting into government, not these career politicians from priveledged back grounds, who have no clue what goes on in the real world.

  • Comment number 27.

    The old less for more chestnut I see. How to encourage growth when not only is the cupboard bare, but what little comes into it goes straight back out again as HP interest against something that has already been consumed. I honestly don't think people realise just how much trouble we are all in. Bankers and home owners upon all hope of a recovery is based, both bailed out by the government on one hand stealing money from the taxpayer and the BOE on the other stealing money from savers. The end result, a transfer of debt from the private sector to the public sector and savers. So how will this money be paid back? By reducing public spending and increasing taxation. If that sounds like a recipe for growth, then it is a very contrarion view. The truth is that the financial crisis of 2007 wasn't solved, it was merely dressed up as something else. At some point the something else has to be dealt with. The difficulty is that such postponements draw compound interest as we will all find out in the not too distant future. Surely, the government can do something I hear all you fellow bloggers shout. Sure they can, but you can pretty much bet your bottom dollar that it will be something bad.

  • Comment number 28.

    5. At 09:35am on 23rd Mar 2011, stanilic wrote:
    but government has not only neglected this sector since 1997 it has often imposed policies that constrain and limit the ability of this sector to perform.
    =============================

    You reveal your bias. 1979?

  • Comment number 29.

    The reality is the global economy will probably be the biggest factor in any growth and with oil and food prices remaining high , average Joe's purchasing power is going to reduce rather than increase.

    Its going to be tough and its as simple as that !!

  • Comment number 30.

    @18. At 10:51am on 23rd Mar 2011, tFoth wrote:

    "I fear that we will never compete with China et al on costs without radically reducing our standards - whereas everyone would surely be better off if they were to increase theirs."

    I presume you mean labour costs. Cheap labour isn't the answer for every challenge. How about competing with China on supplying high tech inputs for the massive global growth industries, energy, defence and agriculture e.g. Sheffield Forgemasters.

  • Comment number 31.

    It's really simple - lower the taxes and throw away all the exceptions, subsidies.... Fiscally neutral or more likely positive - less incentives and possibilities to do tax avoidance, more businesses created or comming in from abroad. But then you would have to stop moaning about Ireland

  • Comment number 32.

    So basically what you are all saying is that we're "CL"ucked?

    Here's the big issue as I can see it, in the good companies and banks make massive profits and instead of putting that money to one side to tide them over the bad times, they award it to themselves in massive bonuses and salaries (these rarely seem to reach the actual workers at the bottom) effectively removing this money from the equation.
    Then when the bad times come they scream that their profit margins are being cut and then raise prices so people can no longer afford their products and/or cut jobs (these usually affecting the actual workers and rarely the upper echelons) so people have no longer and can no longer afford their products.
    This is very simplified and I don't understand the entire process but I think this about sums the situation up.
    If these busniesses can bank kept the money in the "company" they could ride out these hard times, or at least not suffer quite so badly, instead we see prices go up and pay go down. It's a cycle.
    I know of a small business that during the good time saved as much as it could and is now riding out the bad times, admittedly this can't go on for ever but at least they are lessening the damage that would've been caused by short sightedly syphoning the money away.
    The only way I can see out of this now? SME's, large business and the Government to create more jobs therefore giving people more money to spend.
    But there isn't any money to do this with is there, because a majority of the money has sucked from the market and into individuals bank accounts where it will sit because there is no way some of these people can possibly spend that much money in their lifetime. Not that they'd want either, I suppose.

  • Comment number 33.

    Does Fiscally neutral include Libya ??, another round of QE, Bailouts for Euro countries ?? any of which would severely dent policy decisions George will make.

    inflation is the biggest hurt to most people but the needs of the few are out weighing the needs of the many and that will not change .

  • Comment number 34.

    Reduce the tax on petrol from 70% to 35%. This would reduce costs all along the chain, make us more competitive with the foreign companies and boost tax receipts. Tax on fuel should only be used for the source where it has been taxed, not to prop up other government spending in other departments, which I see as totally unethical.

  • Comment number 35.

    "5. At 09:35am on 23rd Mar 2011, stanilic wrote:
    The defecit is unsustainable: anyone other than Ed Balls can see that.

    But growth?

    Sound of air being sucked into mouth through gritted teeth.

    I would agree that the heavy lifting in the economy is going to have to be done by the manufacturing sector, but government has not only neglected this sector since 1997 it has often imposed policies that constrain and limit the ability of this sector to perform.
    "

    Wrong. We have neglected manufacturing since 1981. This was Thatcher's legacy which nulabour happily propagated. Although at least they spent the "profits" on creating jobs.

  • Comment number 36.

    6. At 09:39am on 23rd Mar 2011, Seer wrote:
    "With 10% having 90% of the wealth, communism has never looked so good."

    Yeah, let's have 0.1% having 99.99% of the wealth, just like Russia.. great idea!

  • Comment number 37.

    Why are we even watching this clown show anymore? The UK budget is less than a side show now...

    Osbourne can't solve anything - all he can do is rearrange the deckchairs to soothe the desperate capitalists. The real events are occuring outside of his domain.

    This is why this budget is almost totally irrelevant.

    Done.
    http://www.bbc.co.uk/news/business-12828405

    Done.
    http://www.bloomberg.com/apps/quote?ticker=GIGB2YR:IND

    ...nearly done...
    http://finance.yahoo.com/echarts?s=USDJPY=X+Interactive#chart1:symbol=usdjpy=x;range=1d;indicator=split+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

    ...and totally done.
    http://www.bloomberg.com/apps/quote?ticker=HERMES:IND

    Covered up - but done underneath.
    http://news.smh.com.au/breaking-news-world/tokyo-water-unsafe-for-babies-farm-food-blocked-20110323-1c6ku.html

    ...oh and there's defintely something odd going on here - it looks more like a dirty brown swan than a black one at the moment...

    http://www.huffingtonpost.com/rocky-kistner/fresh-oil-continues-to-wa_b_838726.html

    Someone tell the capitalists what a Black Swan is please - because there is currently a flock of them heading our way.....

    http://en.wikipedia.org/wiki/Black_swan_theory

    Capitalists eh? - one day they will learn their system isn't broken - it just never worked in the first place!

    Fortunately the fools are all too busy 'buying the dips' - because opportunistic greed has no limits for some people.

  • Comment number 38.

    RP:

    "Multinationals have been banging on for years that rules on how their profits outside the UK is taxed means that the advantages of having a head office or domicile in the UK are no longer what they were. Some international companies, such as the advertising group WPP and the pharmaceuticals company Shire, have already packed their bags and relocated to Dublin."

    One thing a UK government (whatever its political complexion) must avoid at all costs is engaging in a race to the bottom. The UK can't win it and, even if it could, that would logically mean aiming (ultimately) at the lowest living-standards - wherever in the world they may be.

    The Irish have been getting away with murder with their derisory corporation tax rate, which is a bare-faced (and so far successful) move in a trade war - mercantilism reborn. But the way to combat this is not to try to play the same game but to seek redress through - in the first instance - EU pressure to force the Irish to come into line (which the Germans are already pressing for; we should support them).

    "To state the obvious, reducing the tax burden on multinationals - including big banks - would not be universally popular."

    And (that aside) it should anyway only be done to the extent that it's strictly in harmony with overall EU policy and practice. We're too weak to go it alone any longer.

  • Comment number 39.

    28 Reticent_Tader

    `You reveal your bias. 1979?'

    Then you did not go on to read the bit about how it has taken us thirty years of stupidity to get into this fix. Perhaps you are showing me your bias.

    I will let you into a secret that the manufacturing sector has treasured for many years and that was the sadly brief period that Michael Hesseltine was President of the Board of Trade. Now I don't agree with Hesseltine's politics at all and I don't care for him very much personally either, but he did intervene in the economy as he promised he would and he did do a lot of good. It was a pity the Labour government did not take forward the industrial policies he espoused.

    As to 1979 I remember it well as it was then that the country turned its back on manufacturing. There were many reasons for that decision but all of them wrong. The Thatcher government should have embarked on a programme of management change and industrial reform. It chose not to but took the view that services were the solution to the UK economy and financial services in particular. This was a wrong move and so the rest is history.

    I try to keep myself above the usual political wrangle on these pages as point scoring is an irrelevant activity. The economy and people's jobs are too important for that. All political parties have done good and bad things for this country. We should treasure the good and condemn the bad without fear nor favour. I travel in faith that one day the political class will learn.

  • Comment number 40.

    The Tories are desperate to roll back the social condition of the people to the 19th century. That is dressed up as 'growth'. It is regressive and we are sleep walking into a chasm. Nothing is safe in their hands- only bonuses for the fat cats running the privatised buisnesses that, of course ,rely on government handouts. ( Party donation anyone?)There are lots of them too. PFI investors, railway companies energy companies. Almost all privatised business has worked against the people and now the NHS is lined up for it.
    As for building endless supermarkets all over the land- I do not call that growth, it is just movement of supply and is only one group desperately trying to dominate the market so that they can charge whatever they like. We'll be re-inventing the Coop before you realise it.

  • Comment number 41.

    "36. At 11:56am on 23rd Mar 2011, OutForLunch wrote:
    6. At 09:39am on 23rd Mar 2011, Seer wrote:
    "With 10% having 90% of the wealth, communism has never looked so good."

    Yeah, let's have 0.1% having 99.99% of the wealth, just like Russia.. great idea!
    "

    Is Russia communist?

  • Comment number 42.

    Cutting taxes?

    Well of course - what else do you expect from a Tory chancellor - now can anyone cite an occasion in the past when cutting taxes directly led to job creation?

    I suspect not - because it doesn't happen. All it means is a greater share for the rich and less for the poor. One good thing President Bush did is prove this theory beyond doubt (during his tenure he cut the MOST taxes and created the LEAST jobs of any president before him - on absolute measures)

    That's an indication of how moronic this whole charade is - we're now following the path set by the man well regarded as the most brainless leader in history (and it was quite a competition) - and now we're expecting it to work?

    Where does that leave Geroge Osbourne on the 'scale of stupidity' then?

    Typical Eton education - they can speak Latin but they have a total void of common sense and realism due to their lack of interaction with the 'real world'.

    I mean come on, George Osbourne - budget for jobs growth? - the man HAS NEVER DONE A REAL JOB IN HIS LIFE!

    You have to be stupid (or desperate) to think any announcement today is going to make any difference.
    The only change expected is in the fuel duty - and whilst Georgey Porgey is 'giving with one hand' - David Camera-on has already reversed any benefit to the consumer by attacking Lybia!

    ..and still the MSM suck it up - thank god for the internet or we would have about as much idea about what is going on as the average person living under a totalitarian regime with full control of the media.

  • Comment number 43.

    Unless people have money to spend be it on food a car or a house there will be no growth unless money goes into the economy. If Mr Osborne squeezes the public in this country any more all we will see is decline through lack of spending power.

    He obviously need some basic instruction in arithmetic as people can't spend what they don't have and will not spend what they do have until something is done to give them a bit more cash in their pockets and decent interest on the money they have invested in our finacial institutions.

    The defecit is growing and inflation continues to rise so hoe exactly is he going to get to grips with the economy as his policies so far have not worked. The answer no doubt will be to increase taxes and reduce benefits which ordinary folk can no longer afford. All this I think in the interests of the Coalition making history. At the rate they are going our economy will soon be history.

  • Comment number 44.

    20 years ago going out for dinner the choice was limited and the French (rightly?) looked down their noses. Today thanks to media coverage and a desire for better we can hold our culinary heads high.

    Today Manufacturing is the forgotten man of the UK economy, we just need to inspire people that we can be the best at making stuff and that making things is cool, compared with looking at a meaningless projection (guess) of financial numbers that relate to an invisible financial instrument?? That cannot be beyond the wit of todays TV makers can it?

  • Comment number 45.

    27. At 11:22am on 23rd Mar 2011, geofffromleeds wrote:The truth is that the financial crisis of 2007 wasn't solved, it was merely dressed up as something else.
    Sadly how true - we are just kicking the can down the road hoping it will get better. The underlying problems have not been sorted - just the inevitable rebalancing delayed and with the imbalances in the world economy the future does not look bright. We are borrowing more as a Nation than under Gordon Brown - strange but true -The ONS lending figures showed that public-sector net borrowing was £11.8 billion in February, the highest for that month since records began in 1993 and well above analysts' forecasts of £6.9 billion.

  • Comment number 46.

    28. At 11:22am on 23rd Mar 2011, Reticent_Trader wrote:

    "You reveal your bias. 1979?"

    Oh it's better than that - the Tories only have 1 solution to recession - export your way out through currency debasement.

    However they must have short memories as the manufacturing sector is now so insignificant (since Thatcher) that it's recovery will affect very little else.

    So what we now have is a 'plan' of currency debasement without export benefits - which means it's simply currency debasement for import reduction.

    In a country which (even during the war) imported 60% of it's requirements - this is not such a good idea. You can see this in the numbers, trade gap widening as the currency falls (as opposed to the narrowing expected)

    Still - when did Tories ever listen to reason - they still think the poll tax was a 'fair' tax - despite the majority of the country showing it wasn't.

    They also think Lybia is not like Iraq - due to the UN resolution obtained - again they show their lack of foresight and judgement as Lybia is very much like Iraq.

  • Comment number 47.

    4. At 09:26am on 23rd Mar 2011, hughesz wrote:

    The saving grace ,unlike Ireland , Greece etc, is we are not being forced into decisions by the Germans.

    -----------------------------------------

    What decisions are they? Sound economical decisions that see actual growth? ..... Sounds dreadful to me.

    We should have taken a page out of their book a long time ago tbh. I can see why the average German citizen is annoyed at having to buy a corrupt country that has no chance of repayment and is on the verge of default. They're the ones footing the bill, expect a much more hardline approach to failure when Merkel inevitably leaves office.

  • Comment number 48.

    41. At 12:06pm on 23rd Mar 2011, United Dreamer wrote:
    "36. At 11:56am on 23rd Mar 2011, OutForLunch wrote:
    6. At 09:39am on 23rd Mar 2011, Seer wrote:
    "With 10% having 90% of the wealth, communism has never looked so good."

    Yeah, let's have 0.1% having 99.99% of the wealth, just like Russia.. great idea!
    "

    "Is Russia communist?"


    Russia may not be communist now, but the 70-odd years is was has more than done it's damage (perhaps fatally).

    I lived in Nizhny Novgorod (about 200 miles east of Moscow) for two years and believe me, this is not the example we should be looking to follow.

    What communism/socialism (for most people) really translates to is this: "Hey, I don't want to work or try and better myself. But I expect all of those who do to share the rewards of their work with me. Actually forget sharing, just give me the whole damn lot!"

  • Comment number 49.

    Keep fighting the good fight WOTW - at some point the defenders of the flat earth society will read your posts and hesitate before responding. That hesitation will be the window a creative thought needs to enter their mind.

    Guys the SYSTEM is not working, its failed you, you need to face up to this. And our government hasn't a clue how to fix it. They need us to give them an excuse to stop kicking the tin down the road and have a radical rethink on what is really the cause of our problems, rather than simply keeping their "paymasters" (the banking industry) happy.

  • Comment number 50.

    Shall we run a book today on how many times the Tories mention the phrase "inherited from the last Government"

    The use of this phrase is the only 'growth' you will see from today's budget.

    41. At 12:06pm on 23rd Mar 2011, United Dreamer wrote:

    "Is Russia communist?"

    Don't confuse the poor capitalist - clearly the news of the fall of communism (which created the imbalance to which he refers) hasn't yet reached him!

    Cameron is currently quoting comparisons to other nations and our banking stability - I wonder if he knows that our inflation rate is now higher than Zimbabwe's?

  • Comment number 51.

    It's the "War on red tape" quote from Vince Cable that worries me.
    This sounds to me like deregulation and giving businesses and corporations free rein to ride roughshod over employee and public safety and rights.

  • Comment number 52.

    37. At 11:58am on 23rd Mar 2011, writingsonthewall wrote:
    Why are we even watching this clown show anymore? The UK budget is less than a side show now...

    Osbourne can't solve anything - all he can do is rearrange the deckchairs to soothe the desperate capitalists. The real events are occuring outside of his domain.

    This is why this budget is almost totally irrelevant.

    Done.
    http://www.bbc.co.uk/news/business-12828405
    .......
    And so the third domino is about to fall. I would reckon that Spain is next, and that will nicely empty the kitty, and put the Germans into a bit of a tight spot. I can almost hear the sound of the Deuchmark printing presses being fired up.

  • Comment number 53.

    47. At 12:17pm on 23rd Mar 2011, Alastair wrote:
    I can see why the average German citizen is annoyed at having to buy a corrupt country that has no chance of repayment and is on the verge of default. They're the ones footing the bill, expect a much more hardline approach to failure when Merkel inevitably leaves office.
    ==============================

    It was the German Landesbanks, more than any other institution in Europe, that blindly chased yield and ignored risk in making loans to the banks in the periphery and buying their CDOs etc.

    Emptor Caveat.

  • Comment number 54.

    You can almost smell the government panic. I cant see any return to growth, particularly in light of rising oil prices, which is unlikely to improve due to the arrival of peak oil (see Richard Heinberg's site for more info) in due course. Given that capitalism requires perpetual growth to avoid crisis, in a world of finite resources of course, means that our economic model is at danger of failing. Oh dear, what a pickle. In light of this I say press on with whatever meaures they proposed, because it will make little difference now.

  • Comment number 55.

    Robert - there's nothing we can do now to change the Artful Dodger's budget:

    http://blog.38degrees.org.uk/2011/03/23/

    This debate should have taken place a month ago - or once the full details were out in the open and subject to parliamentary scrutiny.

    In a way, the timing of the budget is unfortunate, as we don't know what the effect of the Japanese tragedy is going to be. Here's a sobering view from Germany:

    http://www.spiegel.de/international/business/0,1518,752325,00.html

    German factories may shut down because they are dependent upon parts from Japan. In the meantime, the true "enemies of enterprise", are trying to cash in, on the backs of those who will be trying to repair the damage, as "Currency speculators are fueling demand for the yen, because they expect the rebuilding effort to cost billions".

  • Comment number 56.

    "Mr Osborne says inflation is expected to be between 4% and 5% this year - dropping to 2.5% next year and 2% in two years' time "

    ...on his record of prediction? - what moron would believe that?

    ...he's just cut corporation tax by 2% - because that's what britain needs, more profits for businesses.

    ...oh and to confirm the onset of a fascist state - he's changing the planning laws so that 'ordinary folk' will be overruled if they object when a supermarket wants to build a new branch right in the middle of the view you probably paid a premium for.

    This is fascism folks - go and look it up - merger of corporation and state.

  • Comment number 57.

    "Mr Osborne says inflation is expected to be between 4% and 5% this year - dropping to 2.5% next year and 2% in two years' time "
    ....................
    ha ha ha ha ha ha. No chance. He's getting desparate now.

  • Comment number 58.

    50. At 12:33pm on 23rd Mar 2011, writingsonthewall wrote:

    "Don't confuse the poor capitalist - clearly the news of the fall of communism (which created the imbalance to which he refers) hasn't yet reached him!"

    Okay, WOTW - name one communist (or ex-communist) country where things are better than here? Cuba, North Korea, China maybe? Maybe you should consider trying out a year or two in one of these?

    Communism just takes pretty much everyone down to the lowest common level. At least with capitalism there's the opportunity for those who work hard to make things better for themselves.

    Even if you do work, you're probably one of those guys who stands around in the canteen/kitchen/outside on your 18th smoke break of the day complaining about how bad the management is and how unfairly treated you are!

  • Comment number 59.

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

  • Comment number 60.

    It seems that the offsetting of the 2% reduction in corporate tax rates for banks seems to have negatively affected 'our investment'.

    http://www.google.co.uk/finance?q=LON:LLOY
    http://www.google.co.uk/finance?q=LON:RBS

    I guess WE'RE NEVER GETTING IT BACK was never more true than now.

    We need a 25% increase in the Lloyds share price to 'break even' - now what are the chances of that?

    Also, we nave 42 less tax reliefs - but are we sure the increase in personal allowance is going to ensure the people who were surviving on these reliefs are not robbed?
    This is a simpification which hides yet another attack on the most needy.

  • Comment number 61.

    Fear is driving Osbourne's budget. Fear of doing anything too radical, fear of ridicule in the press, fear of listening to new ideas, fear of fixing the real problems. Every chancellor has carried this fear since News International started pulling the strings.

    The only thing that has carried change is mass demonstrations - its happened with the Jarrow marches, the Brixton riots, it happened in the Poll Tax demonstrations, it happened in the G8 summit meeting demonstrations. We need to make them fear us, the people who are being affected most, the people who they think support the status quo and who they think they have in their pockets - we need to let them know the media are no longer the measure of people's fears. Its the only way the agenda will actually change.

    That's the only way they will be convinced they have the mandate to really change things to the benefit of all who are willing to work together. And if they haven't the stomach to change things, fear will move them aside.

  • Comment number 62.

    I have to laugh - George has just announced a clampdown on a tax avoidance method which has already been 'subverted' as it was preliminarily announced last October - almost like as a warning to tax evaders!

    Now that really is the definition of 'closing the stable door......'

  • Comment number 63.

    #58. At 13:01pm on 23rd Mar 2011, OutForLunch wrote:

    "Even if you [WOTW] do work, you're probably one of those guys who stands around in the canteen/kitchen/outside on your 18th smoke break of the day complaining about how bad the management is and how unfairly treated you are!"

    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

    Whoops!

    Be gentle with him guys.

  • Comment number 64.

    Robert Peston is right to point out the regressive tactic of £9000 tuition fees but in reality British companies will be able to draw-in cheaper graduates from elsewhere in Europe. A disadvantage is that after a few years, many of these subsequently return to their homeland. Leaving British companies with greater staff turnover. That leaves British youngsters - either saddled with large student debts or without good jobs because they have chosen not to go to university. I forsee in the next five to ten years many more young British people, wishing to earn enough to clear their large debt, will head to America or oil-wealthy Canada.

  • Comment number 65.

    2% off Corporation Tax. I shall now be known as NorthSeaHalibut Ltd.

    Yep, we're truly all in it together.

  • Comment number 66.

    58. At 13:01pm on 23rd Mar 2011, OutForLunch wrote:

    "Okay, WOTW - name one communist (or ex-communist) country where things are better than here? Cuba, North Korea, China maybe? Maybe you should consider trying out a year or two in one of these?"

    1) Define 'better' - because I know you mean 'richer' as you presume happiness and well being come from wealth being a materialist. The life expectancy in Cuba is higher than that of the US (we benefit from our NHS which is why we're higher than both) - so does that mean Cuba is 'better' than the US? - which is more important to you, an extra £10,000 or an extra year of your life?
    As for 'trying this out for a year or two' - why should I? I was born here - I don't

    "Communism just takes pretty much everyone down to the lowest common level."

    ...well I suppose that's the idea yes - what's your alternative? some are better than others? - and how is that being achieved at the moment? through inherited wealth perhaps? Not exactly a meritocracy is it?
    It's all about who (or what) is deciding which people should have priviledge over another in society - and whether that's fair. Otherwise egalitarian is the only way.

    "At least with capitalism there's the opportunity for those who work hard to make things better for themselves."

    Total and absolute rubbish - some millionaires have never done a days work in their lives and some hard working people never get off the breadline.

    Seriously - do you really believe that? are you absolutely sure that this view reflects reality?
    Think of the hardest working person you know and the wealthiest person you know - I can guarantee they are not the same person.

    "Even if you do work, you're probably one of those guys who stands around in the canteen/kitchen/outside on your 18th smoke break of the day complaining about how bad the management is and how unfairly treated you are!"

    Nope - I am the one who others queue up at the desk to ask questions all day because their lack of initiative and logical analysis means they struggle to manage without direction....you know, the sort of person who gets called when on holiday by people in the office who struggle to cope.

    ...and I don't smoke, so you can present any prejudicial image in your mind to justify my existence in your fantasy 'meritocracy' - it simply won't work.

    When will these capitalists learn eh? - still trying to justify their ill-founded beliefs by discrediting the source of the reality thrust into their bubble worlds.

  • Comment number 67.

    "[George Osborne] confirmed changes in planning rules which would make all bodies involved in planning give priority to growth and jobs."

    How? One new build shop/factory is another ones competition/destruction.

    "A rise in the number of places on a new work experience scheme to 100,000 over two years, rather than 20,000 as previously planned"

    Another YTS slave labour scheme perhaps?


  • Comment number 68.

    Can and should the chancellor cut business taxes?
    It doesn't matter; it's just a game; it will remain a game until the investment banks are cleaned up and derivative trading, CDOS AND ALL RELATED PRODUCTS ARE MADE ILLEGAL, or at least brought under control by the implementation of a Financial Activities Tax on all transactions by investment banks. This will establish an accountable audit trail (as well as finance some of these endangered social programs).
    Cutting business tax will not cause banks to lend,; it likely will not even cause businesses to hire. Uncertainty and dubious practices are paralizing.
    So today the Treasury and Business Department will publish a paper alongside the Budget red book that will be their prescription for
    - rebalancing the UK away from a consumer-driven, debt fuelled, City-focussed economy
    - to one where advanced manufacturing, the creative industries, tourism, pharmaceuticals, business services other than finance, inter alia, all have a bigger role.
    Wrong prescription. Wrong sector. WRONG!
    The illness is this: record burden of household, bank and government debt is weighing heavily on the UK economy's ability to grow.
    The Right prescription:
    1. establish cause of uncertainty, which I believe to be derivative trading, CDOs, short-selling and other nefarious financial activity.
    2. Therefore, this is the right prescription: establishing a Financial Activities Tax on all financial transactions thus that an audit trail can be established, banks increase in certainty re the products they are handling, and the markets become more fluid.
    Wrong: public expenditure is being cut to shrink a deficit perceived as unsustainable.
    Right: Make it sustainable by implementing a FAT and stopping the investment banks from playing dirty & greedy.
    A FAT will also alleviate the consumer spending intense pressure from a squeeze in disposable income and a growing recognition in households that their indebtedness - still at unprecedented levels - needs to be reduced.
    Wrong: Which means that the heavy lifting in the economy has to be done by private-sector companies. Businesses will not expand or hire until they feel certainty. Would you?
    Right: Bring the investment banks under control. Institute a Financial Activities Tax. Outlaw all financial products that are traded over the table, transparently, and please, PLEASE NEVER naked.
    RIGHT: Without growth generated by private sector companies, unemployment WILL NOT fall to any significant extent, wages will not rise to counteract inflation, and the government won't receive incremental tax revenues that would allow future tax cuts or improvements in public services.
    WRONG: Britain is not getting these things now BECAUSE FOR SOME REASON IT SEEMS SCARED STIFF TO TACKLE THE INVESTMENT BANKS.
    But what on earth can the chancellor do to promote growth - to encourage more investment by companies, to stimulate exports - if he has no money to give away?
    He will have more money to give away IF he applies a 5% Transaction Tax on all transactions by investment banks.
    Cutting the financial burden on companies by cutting corporation tax faster or by more than chancellor has already said he would do, will accomplish absolutely nothing. Its the borrowing costs that are poisoned. Split the investment and retail banking, and place a FAT on investment banks. If they leave, tough! You don't really need them anyway! You need good, clean, transparent retail banks.
    Almost any reforms that the chancellor could announce to meet the government's aims of making the UK as attractive as possible for multinationals would be expensive - at a time, obviously, when every scrap of tax revenue is precious.
    WRONG: THE PROBLEM IS NOT BUSINESS TAX RATE.
    RIGHT: THE PROBLEM IS THE NEFARIOUS FINANCIAL PRODUCTS THAT SCARE ANYONE FROM BORROWING so that financial activity becomes a casino where investment banks play at insider trade, and bundle garbage.
    WRONG: reducing the tax burden on multinationals - including big banks.
    as things stand, I don't even think that Britain has recognized the correct problem, or if it has, it is just too darn scared to challenge the investment banks.
    WRONG: Any moves by the government to boost apprenticeships, work experience and vocational training (and it's clear from weekend media leaks that there will be a fair bit of all this) will be perceived to be important. But, again, there are limits on what government can do because of budgetary constraints.
    RIGHT: STRAIGHTEN OUT YOUR BANKING. Put your best financial minds on the problem of investment banks, naked derivatives, CDOS, ETC. and tax the Heck out of them. If not, it will just roll into unearned bonuses anyway.

  • Comment number 69.

    "62. At 13:20pm on 23rd Mar 2011, writingsonthewall wrote:
    I have to laugh - George has just announced a clampdown on a tax avoidance method which has already been 'subverted' as it was preliminarily announced last October - almost like as a warning to tax evaders!

    Now that really is the definition of 'closing the stable door......'

    "

    ...after shoeing the horses out?

  • Comment number 70.

    This is the first Budget that I've really concerntrated on and its not really done much for me.

    I'm one of people I believe homebuilders are begging for, I'm in my late 20's earning a decent wage in a sustaniable job, with the top credit rating and at the moment about £15k cash (I live in the North so this does actually go some way), family willing to help with a deposit and apart from savings every month very little outgoing.

    The main issue I have, is the uncertainy over house prices, interest rates, utilities and general costs.

    The last thing I want to be doing is biting off enough to eat and then finding that I get a forceful seconds and getting more costs then I can afford. I just want a bit of stability before I go signing a good potion of my wages away.

  • Comment number 71.

    Tax avoidance? Not a problem. Just invite those that avoid paying their fair share of tax to take their retail outlets elsewhere in the world and make room for those who do not feel paying taxes is below their dignity. It would give a lot of smaller retailers - those who can't stretch to a P.O. Box in Switzerland - a better chance.

  • Comment number 72.

    #66 Writingsonthewall

    "At least with capitalism there's the opportunity for those who work hard to make things better for themselves."

    Total and absolute rubbish - some millionaires have never done a days work in their lives and some hard working people never get off the breadline.


    ------------------------------------------------------------

    At the risk of firing your own bullet back at you (from a sidebar to blog earlier in the week around aircraft carriers, from memory), I'm pretty sure that the point OutForLunch was making is that the OPPORTUNITY is there. Not that it's a hard-and-fast rule that the hard-working become the wealthiest in monetary terms.

    So no, not "total and utter rubbish". In fact, it's probably very much the case - the opportunity is there, and there are a myriad of obvious examples in both the UK and abroad. It is just that, though. An opportunity, not a guarantee. However, at least it exists, which wouldn't be the case under certain other economic models.

    Perhaps if you took the time to read a sentence out loud before deciding it's tosh, you'd fare better? Same applies for being able to spell Libya correctly.....

  • Comment number 73.

    66. At 13:45pm on 23rd Mar 2011, writingsonthewall wrote:

    Nope - I am the one who others queue up at the desk to ask questions all day because their lack of initiative and logical analysis means they struggle to manage without direction....you know, the sort of person who gets called when on holiday by people in the office who struggle to cope.

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

    I feel really sorry for any company where you are consulting........i mean these guys hire you to come and help them out, you have all the employees busily trying to ask you questions and all you do is sit at your desk and complain about the exact people who give you a job. no wonder you seem to have worked in about a million companies......its because you never seem to actually help out, at least you keep RP in a job, i mean 1/2 the comments on his blogs are from you and the other 1/2 are from people arguing with you.

  • Comment number 74.

    72 North View - don't you think there are game changing events going on that makes the market growth argument a bit untenable and that requires a major rethink to how we organise our economy? Greece, Ireland and now Portugal are close to collapse and likely to further impact their backers, Germany; oil, food and other commodity prices are through the roof. Gold is at its highest price ever. On top of that we have the disaster in Japan and evidence that the deep well drilling is still having an environmental impact (further cost).

    Do you not think that we have to change the way we do things? Do you not think that with all these clear indicators of economic collapse that 20% year on year pay increases for traders and top executives and multi million pound bonuses are, at the very least, curious in the circumstances? Do you not think that an unprecedentedly low BOE rate and a substantial gap between LIBOR and loan rates are strange?

    Look up black swan events as WOTW has encouraged and think about what is happening around us?

    Are growth "opportunities" and 2% drop in corporation really going to dig us out of this?

    Genuine questions.

  • Comment number 75.

    74 - United Dreamer

    "don't you think there are game changing events going on......"

    All valid points, but diddly squat to do with what I was saying. I was refuting the point that in a capitalist world, it's not possible to "work your way to wealth". I made no reference to capitalism being right, or working correctly, or that the economic world in which we find ourselves isn't flawed.

    "Do you not think that an unprecedentedly low BOE rate and a substantial gap between LIBOR and loan rates are strange?"

    No - you need to understand how loans, to take your example, are priced. As a clue, they're called Bad Debt and Operating Costs, and they need to be baked into a loan rate, in the same way that costs are baked into the price of any good or service. Before there's a howl of protest, I've not mentioned profit margin, for the simple reason that I have no empirical evidence of what the value of this is in a loan APR, but it's not the case that customer rate minus LIBOR = profit, far from it.

    "Look up black swan events as WOTW has encouraged and think about what is happening around us?"

    Done, and clearly valid. Again, what has this to do with my earlier point? Or are you summising that because I pulled 'WOTW' up on a point, I'm therefore automatically a banking/capitalist sycophant and part of the "shee-ple"???

    "Are growth "opportunities" and 2% drop in corporation really going to dig us out of this?"

    Who knows? What's the alternative approach? Vote-winning tax cuts for consumers, which just dig the economy deeper into debt? There's no easy answer to the mess we're in, which is why there's so much debate about how to get out of it.

  • Comment number 76.

    66. At 13:45pm on 23rd Mar 2011, writingsonthewall wrote:
    58. At 13:01pm on 23rd Mar 2011, OutForLunch wrote:

    Great response WOTW.. i remain very impressed at your ability to try and remain calm and rational. Wish i could do the same....

 

BBC iD

Sign in

BBC navigation

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.