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Spending slowdown doing the work

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Stephanie Flanders | 14:27 UK time, Wednesday, 22 April 2009

The conflict I flagged up earlier between rhetoric and reality has been borne out. The chancellor talked big about raising taxes, but if you look at the tightening in the budget he is planning from 2011, more of the work is being done by slower spending growth than by higher taxes.

Even within the higher taxes, it's striking that he's planning to raise almost as much from higher fuel duty than through the higher taxes on the rich. The end of personal allowances for people earning more than £100k will raise a mere £180m by 2011-2.

Compare that to the extra £1.75bn the government will be netting in extra fuel duty. Similarly, restricting the tax relief on pension contributions to 20% for people on more than £150k will deliver a measly £200m a year.

darling2009.jpg

The 50% top rate for people on more than £150k will raise somewhat more - about £1.8bn in 2011-12, but as I said earlier, the IFS and others have been sceptical about the capacity to raise even that.

And of course there's a reason for the smoke and mirrors - which is that you can't raise the kind of money this government needs to raise by soaking the rich. There aren't enough of them, and those that do exist tend to be very good at keeping the government's hands off their cash. Taxing the rich makes for good politics but less effective economics.

Comments

  • Comment number 1.

    Having no read the budget notes at high speed, I am not sure whether to laugh or cry.

    Tax rate of 50% to raise £1.8bn. I doubt it will raise a penny, in fact it is as likely to reduce tax by £1.8bn that raise that amount. I should know I work in the tax mitigation industry. And that assumes the rich stay here

    The changes for personal allowances to penalise people earning £100k+ actually saving for their pension are a long term own goal as well (and only raise £180 m).

    A political budget all major rises delayed until next year conveniently around election time - newLab reverting to soak the rich policies - they did not work last time and they will not work this time. As always Lab more interested in class war than proper economics.

    Oh and our economy will be growing at 3.5% pa in a couple of years - either this is immature fantasy or lab is intending to let inflation rip (handily reduces the real value of the debt) which of course they will then blame on bank of england for not controlling

  • Comment number 2.

    The usual right wing gum flapping about taxing the rich being ineffective, as usual the government are wrong to even try and raise the revenue, the rich aren't wrong for trying to avoid paying it.

    I agree the government needs to put more effort into tackling tax avoidance, indeed if the government put half as much effort into tackling tax avoidance by the very rich as it does into tackling the much smaller (in terms of costs to the public purse) issue of benefit fraud, Britain's coffers would look a darn sight healthier, but that will never happen while the rich have a veritable army of media commentators all willing to peddle their "we need to cut public spending and raise tax modestly across the board" mantra.

    The sooner paying taxes is seen as the civic duty of every right thinking adult and avoidance is seen as the graceless conniving that it actually is, the better and fairer society we'll have.

    Cue more right wing nutcases blowing hard about the "politics of envy" and "class war".

    The budget never ceases to reinforce the inconvenient truth that British politics is not about what's actually good for Britain, but is merely a constant round of nakedly populist scrambles to either get into or stay in power.

  • Comment number 3.

    Can you have a think about the re-commitment to 2 pct inflation Darling made. Presumably it is meant to reassure the markets the gov't won't try to inflate its way out of trouble. But, given the figures, how much credibility does this have? And if it doesn't, this will surely have hefty implications of his ability to borrow the 200-plus billion he is going to need.

  • Comment number 4.

    i would like to know that all along this wonderful budget how it's going to make me and the planet better off i work 65hrs a week and still no better off
    perhaps i should live of the state for a year then i can get re-trained
    as an MP or something

  • Comment number 5.

    The budget statement was more political spin (ie propaganda) than financial substance.

    The emphasis appeared to be on tinkering with superficial peripheral matters, rather than dealing with the giant financial hole we find ourselves in.

    Instead of coming to grips with our excessive borrowing (annual and cumulative) WE'RE GOING TO BORROW MORE - FAR FAR MORE !

    Whoever heard of, or was ever allowed to, borrow 65% percent of their income in a year ?

    Will no one rid me of this troublesome beast (ie Labour) ?

  • Comment number 6.

    #4 "perhaps i should live of the state for a year then i can get re-trained
    as an MP or something"

    Do you actually need training to become an MP ?? I thought the only requirements are the ability to stick your nose into the public trough and charge your hovel as your second home !!

  • Comment number 7.

    #5 "Will no one rid me of this troublesome beast (ie Labour) ?"

    I thought the paraphrase is - Will no on rid me of this *pestilent* beast !!

    Sorry, just being pedantic !!

  • Comment number 8.

    Sadly, I fear your point about this Budget being more rhetoric than substance is all too accurate. In fact, I think it shows quite a disturbing level of "disconnect" between the different departments of government.

    1) The Treasury is raising taxes on those earning over £150k - but there has been no corresponding announcement about cracking down on tax avoidance. Given that such avoidance/evasion can be expected to rise as more people seek to avoid their tax obligations, this is a major oversight.

    2) Petrol duty is to rise again - once more without any provisions announced to provide an alternative to driving. This particular tax is a bit of an enigma: It's not a green tax, as no green alternatives are offered; it's not a direct tax (as such), and it's certainly not a behavioural tax.

    The one thing petrol duty is, is specifically targeted at individuals and not companies, who will just post lower profit figures as a result.

  • Comment number 9.

    #2 "The usual right wing gum flapping about taxing the rich being ineffective, as usual the government are wrong to even try and raise the revenue, the rich aren't wrong for trying to avoid paying it."

    Hooray !! More left wing party political broadcast !! They have tried to "soak the rich" in the 70s and ended up going cap-in-hand to the IMF to keep a bankrupt Britain afloat !! Now, they are going to do the same *again* !! He, who does not learn from history, is doomed to repeat the same fatal mistakes !!

    The left wing always assume, very wrongly in all cases, that the rich will sit still to be soaked !! The IFS and others are right to be sceptical. This will surely be the last straw on top of a downward spiraling economy, quantitative easing and ever higher government debts and will drive the rich off to more receptive shores !!

    It was far harder to move one's wealth around during the 70s but now, with globalisation so conveniently available, moving wealth involves just a few clicks of a mouse !! With communication systems connecting most parts of the world, the rich can run their businesses from anywhere reasonable civilised.

    Meanwhile, Comical Ali will have spent the money he thought he would get but didn't and will put Britain even further into debt !! Does this have to happen every 35 years ?? And there aren't even any thigh-high boots and micro skirts to keep our minds off the bad news either, this time around !!

    That said, there was a theory that the higher the national debt, the higher the hemlines go. So, Ms. Flanders, please keep this in mind the next time you appear on TV !! :-)

  • Comment number 10.

    Chad: I have nothing against govt raising revenue from the rich, however, the historic experience is that raising tax rates actually reduces revenue. The point which Brown/NewLab ignore is that what matters for govt is not what the rates are but how much real cash do you get.

    As for tax avoidance all we do is ensure the people we represent obey the law, we never encourage law breaking, if the tax law does not work the way govt expects do not blame us, we did not write the legislation.

    Of course if you have ever shopped for booze in France you are just as guilty of tax avoidance because you could have bought the booze (at a higher price) in UK (and contributed to HMRC) but you made the choice to pay less by buying abroad

  • Comment number 11.

    If anyone out there wishing to invest in a sure-fire growth industry, try investing in tax consultants !! They will be doing booming business just as their predecessors did during the 70s !!

  • Comment number 12.

    Steph - read the footnotes to table A1. The total take is spread between the pre budget announcements and today's, and the pension yield is delayed because of self assessment. Total take in 2012-13 from the higher rate, personal allowances and pension changes is put at £7 billion. Add in another £2.3bn for employees NIC increases announced in November - this is heading towards £10bn pa.

  • Comment number 13.

    As expected, an electioneering budget. The forecasts are nutty, unless we see rampant inflation, which is quite possible given this government's liking for debt and printing money. The IMF has already torpedoed the growth forecasts, which are just not sustainable given the debt overhang we will have at the required level of yields to attract investors.

    It pandered to the Labour constituency, of course. Having ago at the rich always goes down well there while doing little good to the budgetary position. This was, like the economic management of the last ten years, a sad joke at the expense of the working part of the population.

  • Comment number 14.

    2. At 2:59pm on 22 Apr 2009, Chad Sexington wrote:
    The usual right wing gum flapping about taxing the rich being ineffective, as usual the government are wrong to even try and raise the revenue, the rich aren't wrong for trying to avoid paying it.

    I agree the government needs to put more effort into tackling tax avoidance, indeed if the government put half as much effort into tackling tax avoidance by the very rich as it does into tackling the much smaller (in terms of costs to the public purse) issue of benefit fraud, Britain's coffers would look a darn sight healthier, but that will never happen while the rich have a veritable army of media commentators all willing to peddle their "we need to cut public spending and raise tax modestly across the board" mantra.

    The sooner paying taxes is seen as the civic duty of every right thinking adult and avoidance is seen as the graceless conniving that it actually is, the better and fairer society we'll have.

    ===

    Have you actually read a dictionary? If you had you would know the difference between avoidance and evasion.

  • Comment number 15.

    2. At 2:59pm on 22 Apr 2009, Chad Sexington

    I take it then that you don't have a ISA, and that you don't contribute to a pension scheme of any sort?

  • Comment number 16.

    Predictions for growth are "unusually uncertain" and critically dependent on restoration of bank lending and the repair of bank balance sheets. I was astounded in hearing the Chancellor's speech that he had nothing material to say about this. The BoE Lending Trends April survey and quarterly bulletin refer to possibilities of further shocks and point up a persisting disfunctional credit market. I will read the Treasury stuff on this with interest. I agree there is smoke and mirrors in this - the tax stuff is political froth.

  • Comment number 17.

    #10 Justin150

    "Of course if you have ever shopped for booze in France you are just as guilty of tax avoidance because you could have bought the booze (at a higher price) in UK (and contributed to HMRC) but you made the choice to pay less by buying abroad"

    1) Hardly "just as" guilty, anything else aside. The magnitude of the tax avoidance by the rich is considerably higher, on an individual basis. Collectively, perhaps, I have no stats to hand, but certainly not individually.

    2) It's true that tax advisory companies do not assist people in breaking the law, without a doubt. But the fault for tax avoidance is still, in a large part, theirs - what they do is to twist the tax code to suit their own ends, rather than implement it as intended. (FYI, I used to work in the same field, but it was definitely the above that made me leave.)

  • Comment number 18.

    I can't take the debate about "soaking the rich" seriously. If it all works it will raise something short of £2bn; and it probably won't. But everyone is talking about this and not asking whether the budget will actually get us out of the hole we're in.

    The taxes on high earners are highly political, not in the old "class warrior" sense but in the modern "spin doctor" sense. They are meant to divert people from the real issues - and they seem to be working.

    The question I have is, if public spending is going to be squeezed surely the public sector (ie 40 something % of the economy)is going to be shrink. Won't the rest have to grow at well in excess of 3% to get to a long term trend of 2.75%? Is this vaguely credible?

    If not, and if we take a punt at a more realistic rate of long term growth (or even a pessinmistic one, then what happens to the long term debt projections?

  • Comment number 19.

    Sounds like a "spend now, pay later" budget.

    We will pay after the general election whoever is in power. In the meantime we borrow if we can - but maybe the lenders will decide not to lend and it will be back to the IMF with the begging bowl.

  • Comment number 20.

    There needs to be a re-thinking of the tax systems. Corporate taxes, which they always threaten to pass on to consumers, and individual taxes, those governmental obligations that are unaffected by economics or reality, need to be farily evaluated againist the other proposed models, such as Flat Tax or a Value Added Tax. The only thing we really know at this time is that the Financial Industry (Banks, Investment Firms and Card Sharks) have failed everyone with their schemes and the politicians with their well-paid advisers have also failed to regulate or protect public financial interest. We do know that the various levels of governments are immune to the troubles of the working classes. It should at least be considered that maybe those who pretend to know economics, really don't. Maybe the complexities are the issue. Maybe something simple might work. I realize that shatters the hiarchy of the corporate and governmental structures, but at this point why should we have any confidence in them. I have noticed that none of the schemes being put forward offer any compensation to those who lost money from their individual retirement accounts. They lost your money, now they want more of your money and none of the new money you give them replaces any of your money they lost. Is this a ship of fools, or what?

  • Comment number 21.

    Am I right in saying that the current tax rates are not upper limits? Therefore could those wishing to pay more - eg Chad Sexington - just go ahead and contribute more to the government if they feel the overall level of taxation is too low? Sort of like an honesty bar...

  • Comment number 22.

    Stephanie,

    You just don't get it do you.

    The rich DON'T PAY TAX.

    For 7k a year you can get a tax advisor who will ensure your earnings are less than the 40% band - let alone the new 50% band.

    I am not allowed to comment on specific personal tax avoidance by the rich as it will be moderated out (as I have attempted before)

    However it doesn't take a genius to work it out when the same people who started this - are the same ones WHO ARE ADVISING THE GOVERNMENT ON THE BUDGET.

    Sooner or later the populous will work this out - and then it's good old 'off with their heads'.

  • Comment number 23.

    Despite what the tax advisors will say, the truth is that taxing the rich can be effective - as long as it is done in the right way, with the proper legislation and ensuring that tax avoidance loopholes are closed. And, of course, taxing the rich is never enough to raise sufficient revenue by itself - you will still need to tax the PAYE high earners. Therefore, starting a higher tax rate at £150k is merely counterproductive gesture politics, no more than that. The threshold should have been set much lower, maybe £80k, and then a substantial amount could have been raised. In addition, it would have made sense to raise VAT to 20% and maybe set a higher rate for certain luxury items that only the rich tend to buy. The Chancellor does not seem interested to raise tax; the objective is to leave the Conservatives in as big a mess as possible when they - almost inevitably - win the next General Election. Labour has already given up on winning another term.

  • Comment number 24.

    "If anyone out there wishing to invest in a sure-fire growth industry, try investing in tax consultants !! They will be doing booming business just as their predecessors did during the 70s !!"

    The key difference is that in the 70s the top rate of tax was 83%. Quite a difference from 50%! Only a very limited number of people will be substantially affected by the modest tax increase from 40% to 50% on incomes above £150k. The genuinely rich will hardly notice the tax increase; they probably spend more on meals out than on the extra tax.

  • Comment number 25.

    "Even within the higher taxes, it's striking that he's planning to raise almost as much from higher fuel duty than through the higher taxes on the rich."

    Was this sentence written by a professional journalist? Surely not.

  • Comment number 26.

    It's very depressing...To the pundits, experts and even (dare I say) BBC journalists the budget is another big fat, blather fest in which competing pointless stats are trundled up in order that every point of view is utterly supported by statistics and numbers are just more opinions, written with digits not letters.

    It's almost impossible to connect the 'Honourable members',the treasury people, the pundits, the think-tank 'experts' and the journalists (with notable exceptions--added obsequiously!) talking about the budget -....with the real world.

    In the real world everyone I meet talks English in a common sense fashion about concrete ideas with application to their lives.

    (Just one example has to be the 'un-real' world it's often said 'nobody saw this coming' in the real world nobody says this because EVERYONE I know was saying for years 'this can't last!')

    In the un-real world the pundits, politicians and journalists all carry on as if this budget actually means something.

    You can tell they really do believe this themselves, because you CAN see the mouths moving and even hear sounds coming out.... the trouble is for us in 'the real world' it's tough to make even the slightest connection with what's really going on out here.

  • Comment number 27.

    Why are people surprised this is an "electionering" budget? Those in charge of this budget are polititians and their main aim is to win the election (by fair or foul means as recent events have shown us). I'm more interested to see how many of our elected MPs take home more than £150k but will only be paying tax at a rate lower than 50p. All of them I expect. Turkeys do not vote for Christmas and this budget proves that no end.

  • Comment number 28.

    Perhaps the most laughable part of this budget is the £2k trade-in offered to those with cars over 10 years old. Someone who owns an old banger is not the sort of person who is likely to go out and spend over £10k on a new car - £2k inducement or no £2k inducement, especially so, given they didn't do it in the supposed good times with free-flowing credit. No, they either can't afford a new car, don't worry about keeping up with the Jones' or stick to second-hand cars.

    No, the people who were going out buying the cars were those who generally replaced their cars every year or two because the money was being thrown at them. And this ain't gonna help them (quite rightly).

    The fact is that the car industry will see many car firms going bust simply because there are too many car makers and not enough need. These firms were propped up artificially - to keep unemployment low - through the credit boom. The unpalatable fact is that unemployment will hit 5 or 6 million here simply because technology has done away with the need for such mass labour.

    The sooner people understand that this is not just a cyclical problem but a structural one, undermining the whole capitalist system, the sooner they will understand why things will only get worse.

  • Comment number 29.

    #2
    "The sooner paying taxes is seen as the civic duty of every right thinking adult..."

    So, does working make you 'right-thinking', or do only 'right-thinking' people get jobs...

  • Comment number 30.

    Movement to marginal 50% tax is shameful and will hamper the UK's competitiveness going forward whilst the incremental tax revenue is questionable.

    The removal of the personal allowance is also an absolute disgrace leading to higher marginal tax for some people who earn less than others. Clearly they should have set the thresholds at different levels and kept a progressive logical system, but this budget is all about soundbites and presentation. You would think they had learnt from the 10p tax debacle (or not).

    So kicking the 'rich' may play well politically, even if it does not generate an economic benefit, but they could at least do it properly.

    This budget does not tax the rich - it taxes those with high income. So those that have wealth are fine, its those trying to generate wealth that are hit.

    So if you're born with wealth or have amassed lots you are fine, you can probably afford not to work. However, if anyone ever tries to improve their lot in life they are taxed obscenely.

    Clearly the answer is that the rich should stay rich and the poor stay poor - what a wonderful plan.

  • Comment number 31.

    #23 "The threshold should have been set much lower, maybe ?80k, and then a substantial amount could have been raised."

    How dare you mention that ?? Why, why, that would mean MPs have to pay higher taxes on their earnings too !! Impossible !! Vote that down, damn it !!

  • Comment number 32.

    Stephanie wrote:
    "There aren't enough of them, and those that do exist tend to be very good at keeping the government's hands off their cash. Taxing the rich makes for good politics but less effective economics."

    How come? Why are the rich good at avoiding tax? Is this a honourable thing? Why do all governments allow them to get away with it?
    Many of the friends of George Osborne and David Cameron, as well as most Daily Telegraph readers, probably believe that paying a lot of taxes is something for uneducated people and loosers.
    The vast profits of the casino capitalism that run wild in the UK must have gone somewhere? Where are these profits now? Could these profits be a part of the 11.5 Trillion US Dollars that are stashed away in tax havens and offshore accounts around the world? By the way, the Cayman Islands, a British overseas territory, is amongst the biggest tax havens in the world.
    It is about time these 'looted' trillions are brought back into the 'real economy' and the 'shadow banking system' is brought to an end.

    Stephanie, you are wrong in saying that taxing the rich makes less effective economics. In fact, not taxing the rich and to allow the sleaziest of them to rip off a whole country is very bad economics. Why you would thoughtlessly write such simplistic slogans about taxing the rich raises other interesting questions that one could analyse further.

    A fair taxing of the very rich and those who committed tax avoidance and tax fraud has not yet seriously begun. It is about time.
    There are over ten trillion reasons for it.
    You can find many of the relevant facts here: http://globalinsights.wordpress.com/

  • Comment number 33.

    #24 "The key difference is that in the 70s the top rate of tax was 83%"

    Actually, the top rate tax was 19s 6d in a pound = 97.5% !! Add to that the investment income surcharge (i.e. tax on income from savings and investments) of 15% and you have 112.5% tax - often called "legalised theft" !!

    The 50% *income tax* is not the *only* tax on those earnings. There is the NIC as well. And then there's VAT, in addition to what ever *duty* charged by HMRC on fuel, booze, fags and other "joys" of life !! Add that all up and we'll be damn near what it was in the 70s !!

  • Comment number 34.

    #30 "Clearly the answer is that the rich should stay rich and the poor stay poor - what a wonderful plan."

    And the able, hard-working people trying to improve their lot will migrate to Canuckistan or Aussieland !! Happened in the 70s, might happen again !!

  • Comment number 35.

    What a load of rubbish. All this talk about soaking the rich, followed swiftly by the behind the hand "they won't get it anyway!" This, from the very group of people who feel themselves to be entitled to lecture the rest of the population about responsibilities!

    Let's put this into perspective. £150K pa is over 4 times the average salary. So what particularly unique skills do these people have that really justify that differential? Ah! but part of that income comes from property and investments that have been in the family for generations. Well then that truly is unearned income resulting from an accident of birth rather than effort. Even at 50% tax, these people still have far greater disposable income than their average fellow countrymen (and women) so what do they really have to moan about other than a restraint of greed.

    Whilst it is perfectly legal to avoid tax, the government should be taking grater measures to track down and prosecute those who evade tax. A sustained effort in this area may return to the Treasury far more than the proposed 50%. Why not start by taking the same unilateral stance as the US's IRS - if you are a US citizen or made profit/income from activities in the US (or US controlled organisation) then you are liable to be taxed by them wherever you are domiciled or whatever passport you hold!)

    So all the rich will take their money and leave. Will they? A number will but good luck to them they can go - but don't let them back until they've paid the back taxes.

  • Comment number 36.

    #35 "So what particularly unique skills do these people have that really justify that differential?"

    Being a doctor ?? Of course, there's no law that forces you to consult a doctor. You could always go to a quack or a voodoo priest. If you die of it, tough !!

    Or even a dentist !! You could always use a pair of pliers to pull out your own teeth. No special or unique skills needed !! Just bloody-mindedness !! And if the teeth are a bit hard to get at, use a hammer and chisel !!

    And if you have legal problems, you are allowed by law to represent yourself. No need for a high-priced lawyer, you know. If you lose, you have only yourself to blame !!

  • Comment number 37.

    Still, one good thing to come out of this increase in Income Tax rates, Tony Bliar will get hammered for tax on his lecture earnings!

  • Comment number 38.

    Doesn't the old 80:20 rule apply to income tax? Namely that 80% of the tax is derived from the top 20% of earners, so they do contribute their fair share at the moment anyway.

  • Comment number 39.

    At a time when the Country required honesty the Cancellor chose the opposite, his growth figures from 2010 onwards are pure fantasy. Now he knows this, whats more, he knows, that we know this (aplogies to Dan Hannan). Yet, he still chose in a gesture of contempt for the Country and its people to use them.
    To look for further proof of contempt for the average person's intelligence we can zone in on a Typical New Labour budget "eye Catcher"; "£2000 from the Government if you trade in your 10 year old car for a new one"
    1. People who trade in 10 year old bangers historically do it for a newer second-hand car, one say 3/4 years old.
    2. It is only £1000 from the Government, the other £1000 has to come from the Dealers' normal profit margin and the Dealer has the added cost of scrapping your 10 year old banger.
    With New Labour it is just about getting the headline, the queue of Dealers wanting to sign up to this piece of nonsense wil be a long time forming.
    The 50% tax is not so much an illusion as a delusion for serious fiscal management.

  • Comment number 40.

    #35 You're being generous. £150k is about 14 - 15 times the pay of a dedicated carer for the elderly in a nursing home around here. They get the minimum wage for an emotionally and physically exhausting job.

    Bank clerks get almost twice as much. This, and the selfish tone of some comments here, says rather alot about our society.

  • Comment number 41.

    Surely the only way the vast Government debt can be repaid is for inflation to run rampant in 3 to 5 years' time.

  • Comment number 42.

    Hi, I wonder if you guys at the BBC could estimate the likely budget deficits and gilt issuance for 2009 and 2010 if the IMF growth forecasts are accurate instead of Darling's?
    I suspect that they would be clearly unsupportable, even before we deal with the unlikelihood that 3.5% growth in 2011 will happen.
    The figures the IMF gave were -4.1% growth in 2009, and -0.4% in 2010.

  • Comment number 43.

    #37 "Still, one good thing to come out of this increase in Income Tax rates, Tony Bliar will get hammered for tax on his lecture earnings!"

    What's the betting all that gets paid into a Cayman Island company or even a BVI company ??

  • Comment number 44.

    Another unimaginative Budget by an unqualified politician who has spent his entire life in politics. He has never been involved in the entrepreneurial world that actually produces meaningful employment.

    There is no surprise when both Alistair Darling and Gordon Brown began life in law school but quickly discovered that power is far more satisfying than money.

    Both have one objective, re distribution of wealth through control of the masses.

    Grow government so people become dependant, nationalize the financial institutions so business becomes dependant.


    Thursday, September 04, 2008
    Decca Aitkenhead ignores Alistair Darling's Trotskyite past
    This week's Private Eye has some fun with the account of his youthful politics that Alistair Darling was allowed to get away with in his widely reported interview in last Saturday's Guardian.
    According to Decca Aitkenhead, the reporter who interviewed him:
    Studying law at Aberdeen, he stood for election in the student union, but not for a party. "I was just quite interested in getting things done." His manifesto favoured "strictly bread-and-butter issues, things like food prices in the student refectory". When he joined the Labour party in 1977, he never expected to be more than a member. "I was enjoying becoming a lawyer."
    He'd simply realised, he explains, that "if you want to make any changes, there's only one way you can do it, and that's by getting into a position where you can influence things. And the obvious thing to do seemed to be to join a party." Why Labour?
    "Just... I suppose, overall, I thought the Tories were unfair. They were only for one side, and not for everyone. The Labour party just seemed to reflect my outlook on life - you know, that we were better working together - fairness, helping everyone to get on, rather than just a few.
    This is nonsense. As Private Eye points out, before he joined Labour Darling was a member of the Trotskyite International Marxist Group and went on to be a hard-left council leader in the mould of Ted Knight or Derek Hatton.
    So extreme was he that the Labour establishment sent George Galloway along to talk to him as a force for moderation.
    In fact Galloway told this story in a characteristically entertaining style in an article for the Daily Record earlier this year:
    When I first met him 35 years ago Darling was pressing Trotskyite tracts on bewildered railwaymen at Waverley Station in Edinburgh. He was a supporter of the International Marxist Group, whose publication was entitled the Black Dwarf.
    Later, in preparation for his current role he became the treasurer of what was always termed the rebel Lothian Regional Council. Faced with swinging government spending cuts which would have decimated the council services or electorally ruinous increases in the rates, Alistair came up with a creative wheeze.
    The council, he said, should refuse to set a rate or even agree a budget at all, plunging the local authority into illegality and a vortex of creative accounting leading to bankruptcy.
    Surprisingly, this strategy had some celebrated friends. There was "Red Ted" Knight, the leader of Lambeth council, in London, and Red Ken Livingstone newly elected leader of Greater London Council. Red Ally and his friends around the Black Dwarf were for a time a colourful part of the Scottish left.
    The late Ron Brown, Red Ronnie as he was known, was Alistair's bosom buddy. He was thrown out of Parliament for placing a placard saying hands off Lothian Region on Mrs Thatcher's despatch box while she was addressing the House. And Darling loved it at the time.
    The former Scottish trade union leader Bill Speirs and I were dispatched by the Scottish Labour Party to try and talk Alistair Darling down from the ledge of this kamikaze strategy, pointing out that thousands of workers from home helps to headteachers would lose their jobs as a result and that the council leaders - including him - would be sequestrated, bankrupted and possibly incarcerated. How different things might have been.
    Anyway, I well remember Red Ally's denunciation of myself as a "reformist", then just about the unkindest cut I could have imagined.
    I suppose we should be shocked that Darling gave such a misleading account of his political career, but I am afraid that politicians have fallen so low in public esteem that few will be.
    But what can we say in defence of Aitkenhead? Did she really not know about Darling's background? It is hardly a secret. If she didn't know, why didn't she do a little research? It was not hard to find Galloway's article with Google. And if she did know the truth, why did she allow Darling to get away with it?
    Never mind moody photographs of your subject among the stones of Callanish: just tell your readers the truth.

  • Comment number 45.

    Does the 50% threshold preclude MPs from "doing their bit"?

    Funny that, isn't it!

  • Comment number 46.

    The Pension restrictions are bizarre. if you earn (or have done so in the last two years) then unless you are already doing so you can only contribute 20k a year into your pension, or a little less than 13.5%. Under the old rules someone over 60 could contribute up to £36,950 in 2005/6 into a personal pension on an income of just £105,600.

    Effectively there is no real incentive whatever for anyone earning over £150,000 to invest in a pension at all, especially as you can't trust the government to stick to any sort of rules. In return for locking your capital away at the governments mercy, what are you getting in return?

    This will stem the flow of investment into pensions further choking off the supply of money available for investment into equities and gilts. Instead the wealthy will keep their investments in transferable funds which can be moved from the UK with them when and if they decide they have had enough of being punished for success.

    The government is cutting off our noses as well as spite(ing) our face on this one. Every member of society suffers when people don't save and invest.

    With 50% tax, what entrepreneur is going to want to take on additional risk for diminished marginal returns? How does the government think new jobs are going to be created to replace the 40,000 a week being lost at the moment.

    In Ireland they some times say 'The only thanks you get is abuse' and this pretty well describes the position for the higher earner. The key word there is earner, someone who goes out and EARNS this cash, large salaries are not lottery wins, they require huge personal sacrifice often over many years and often represent a peak in earnings that doesn't last very long if at all. With the NI 1% levy the government will keep more than half the excess earnings, and that is the point at which a tax becomes unfair.

  • Comment number 47.

    If they want to close tax loopholes maybe they could start here???

    I'm sure he is writing off his mortgage payments against rental income??

    Its not how much you earn, its how much you keep

    Geoff Hoon and Alistair Darling claimed for second homes and rented out their London apartments while living in taxpayer-funded flats.

    Both the chancellor and the transport secretary say their claims were within the rules and openly declared.

    'Re-designated'

    Despite living rent-free at 11 Downing Street, Mr Darling claims thousands in second-home payments on his Edinburgh constituency home while also renting out his London flat - designated as his main home.

    His spokeswoman said he was taxed on the benefit of living in Downing Street and paid council tax there.

    "Alistair Darling moved as chancellor into Downing St in 2007 - No 11 Downing Street became his main home - so his Edinburgh home was re-designated as his second home.

    "His own London home was rented out to cover costs and this was openly declared in the register of members' interests," she said.

    She said he did not claim the maximum allowance for his second home in Edinburgh. Last year he claimed £9,837 of the total £23,083 allowed.

    It is clearly barmy for ministers to indulge in a form of double counting that enables them to enjoy two homes at the taxpayer's expense

    Nick Clegg
    Lib Dems

    Mr Hoon has said he broke no rules by claiming second home allowances while living in a taxpayer-funded apartment, when he was defence secretary, and renting out his London flat.

  • Comment number 48.

    28 XCAnderson

    ''The sooner people understand that this is not just a cyclical problem but a structural one, undermining the whole capitalist system, the sooner they will understand why things will only get worse.''

    Spot on but few seem to see it. There seems to be love-in with the idea that things will get back to where they where somehow. Well they will in a way - if you look at the graphs you can see the fall started quite some time ago, then along came the brown bubble and up the curve went, Take the bubble away and you can see the curve motoring down back to where it should be, back on the trend.

    The car trade-in is just a bad joke. The current motor trade discounts will disappear to fund the motor trade co-funding element of this. Many showrooms have been offering 1K trade-ins for bangers, its now just doubled up by taxpayer money. There will be a taxpayer subsidy, sales will be robbed from next year.

    The whole issue here is an underlying decline in economic activity, take the bubble away and hey presto, back on curve. Havent seen anything yet to put it on an upward curve. Its a double problem, an underlying decline curve to fight, plus recessionary effects to try to pick up from. They are starting to notice in the US already. No clue as to where any uplift can come from.

    I would like to see growth soon, who wouldnt, but if it doesnt show up then how on earth will the debt be paid back in any sensible timescale. I've got a head full of zombie ----

    ''Travelling in a fried-out combie
    On a hippie trail, head full of zombie''

    Men at work - Land down under.

    Is that thunder. Better run and take cover. I saw the most extraordinary sky on Skye once, the clouds twisted and coiling into massive ropes, I was told it was the warm onshore wind hitting the Cullin Mountains at the end of the day. Believe me I took cover, in a tent, dont know what use that was. Tents anybody.

  • Comment number 49.

    OK, surely most realistic people have grasped that this is a 10 year problem. VAT reduction should have been given solely on Gas and Electricity bills, everyone could then have SEEN some benefit.This is common sense, a missing element in Westminter it appears,due mainly I suspect to graduates going in to politics with only a thoretical grasp of the real world in which most of us are obliged to live and work.
    I am also baffled by the absence of any mention (that I've seen) about the obscene cost, both now and in the future, of public sector final salary pensions! Surely this could be stopped with more or less immediately, and all public employees, including MPs and civil servants would have to join the real world in which we all live......and contribute their OWN money to put into Gordon and Alistair's black hole

  • Comment number 50.

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

  • Comment number 51.

    Wake up Britain not all the greed is in the private sector!!!

    Chancellor of the Exchequer and Lord of the Treasury Alistair Darling Salary 2008 137,579
    What was that 50% limit again, oh yes 150,000

    Alistair Darling's Commons expenses were under the microscope last night after it emerged that he claimed £70,000 in five years for his family home in Edinburgh.
    He obtained taxpayer funding for mortgage payments, household bills and furnishings by classing the £1.2million townhouse as his 'second home'.
    Before he became Chancellor, Mr Darling had claimed that a small London flat - worth only around £150 a week in rent - was his main home.
    Taxpayers contributed £70,000 towards Alistair Darling's family home in an upmarket area of Edinburgh
    Since moving into Downing Street he has resumed claiming expenses on his Scottish 'second' home.
    The Chancellor is the latest high-profile politician to face questions about the controversial second-home allowance.
    Last week, it was revealed that Home Secretary Jacqui Smith claimed £116,000 on her family home in Redditch - listing her 'main residence' as a room in her sister's London home.
    There is no suggestion that Mr Darling broke any Commons rules, but critics said the revelations provided further evidence that the system needs a radical overhaul.
    Before being appointed Chancellor, Alistair Darling lodged with Lord Moonie.
    Before becoming Chancellor in 2007, Mr Darling lodged with Lord Moonie - one of the Labour peers in the 'cash for amendments' affair - in a flat in South London. He lived there from around 2003 until January 2005, listing it as his 'main' home.
    This enabled him to claim a total of £45,954 on his 'second home' - the family house he bought with his wife Maggie for £570,000 in 1998. The imposing building stands in the heart of Edinburgh's most desirable area.
    Before 2004, all ministers had to declare London their 'main residence'. But even after this rule changed, Mr Darling continued to list the flat share as his 'main home'. In 2004/05, he drew another £15,341 for his Scottish home.

    London home: An average rent for a flat like Lord Moonie's was £125 a week. Mr Darling claimed an average of £321 a week on his second-home allowance
    In September 2005 he eventually classed Edinburgh as his 'main home', but only after running up an estimated £9,000 more in expenses.
    In detail, Mr Darling's claims for his Edinburgh home were £15,756 in 2001/02; £14,792 in 2002/03; £15,406 in 2003/04; £15,341 in 2004/05; and £9,000 in 2005/06.
    Designating which are 'main' and 'second' homes can let MPs claim higher sums in expenses.
    The second-home allowance - currently a tax-free £24,006 a year - allows for much bigger claims on larger properties.
    As well as his rent-free Downing Street flat, Mr Darling, 55, has access to the 21-bedroom grace-and-favour country retreat of Dorneywood, Buckinghamshire and co- owns a family retreat - a croft in the outer Hebrides.
    His spokesman said: 'At all times Mr Darling has abided by House of Commons rules.' But Matthew Sinclair of the TaxPayers' Alliance said: 'The excuse should cut no ice when the rules are so clearly wrong.'

  • Comment number 52.

    #36 ishkandar

    A doctor? Well the majority of the time most of us need the services of a GP. Now not many of them are paid over £150K pa. How many NHS consultants earn £150k pa from their NHS work? (I seriously challenge their freedom to perform private practice whilst under an NHS contract). If they which to operate completely privately then good luck to them.

    The same goes for dentists.

    Now we can start a debate about relative values of occupations if you wish but my point was that the majority of £150k+ earners add little true value to society and therefore are fair targets.

    Please don't start me off on lawyers. They must be the most self opinionated professionals around with a totaly overblown opinion of their expertise and hence value. Why do we allow them to set and regulate their own charges? Somebody please show me what value they add.

    I was hoping that there would have been more reaction to what I wrote. Does this mean that the gret unwahed are finally starting to challenge just how much 'the brightest and best' or the most greedy are actually ripping us off for?

  • Comment number 53.

    glanafon,

    in a whimsical mood then! Not quite sure about Men At Work (that might become a parody of itself!). As I move further into my dotage I think back to Dylan 'The Times They Are A Changing' and Lennon's Working Class Hero - particularly the lines:

    You think you're so clever and classless and free
    But you're still (word excluded 'cause it may offend the Mods sensibilities) peasants as far as I can see.

    Ah! the hopes of youth a cynicism of old age!!!

    However, once again we agree (it'll have to stop you know!) but I think more and more of us are recognising that it's a structural prolem that has no short term solution. The model is dead - bring on a new one. It's only the vested interests that are desperately trying to keep it alive.

    One day, when it's all too late, they'll wake up and think "what would have happened if we had merely written-off all the debts worldwide would the world have come to a full stop?" Then they'll realise that the world would not have stopped. It would have been an opportunity to build a better system. But what can you tell those who lust for power (political or financial)?

    So now we are going to be in even more debt for no apparent good purpose. But we can look forward to fudging figures so that we look less loaded with debt than say the French or the Germans typically British "we've got nowt but you've got even more nowt than we have".

    I think you are right about the US. More of their commentators are daring to suggest that there maybe no way out of this in any acceptable time frame. The end of the American dream? Don't know but certainly a major blow to Pax Americana (where's MarcusAueraliusII when you don't need him?).

    Save me a place in the tent for when I get back.

  • Comment number 54.

    #52 "Does this mean that the gret unwahed are finally starting to challenge just how much 'the brightest and best' or the most greedy are actually ripping us off for?"

    The great unwashed are already past masters in the rip off game. Take "the sharp intake of breath" so beloved of the "tradesmen". It is merely a matter of relative size of the rip off. The innocents are few and far between !!

    As for the medical professionals, the latest "contract" between the NHS and the GPs allow them at least 100k per year as salary. Add on "other services" and they can easily earn 150k per year. And the perilous state of our nation's teeth, which resulted from ingesting too much sugary junk, will keep our dentists well into 150k per year easily !! Nobody forced anyone to eat junk food but if you rot your teeth, don't blame the dentist for charging you. This is so typical of the blame game and refusal to take responsibility for one's own actions that abounds in society today and culminates in Our Glorious Leader blaming all and sundry for *HIS* bad policies instead of admitting them and putting them right !!

    Finally, give us a few years of quantitative easing and high inflation that are likely to come and soon binmen will be asking for 150k in their "collective bargaining" !! By then, a loaf of bread will cost 10 quid !!

    At which point, the words of the song will change to - "Rue Britannia. Britannia rues the day...."

  • Comment number 55.

    #53 "(where's MarcusAueraliusII when you don't need him?)."

    Could he have been amongst the "one in ten" crucified during a decimation of his legion when the bad news came ?? After all, some have to be sacrificed to propitiate Vox Populi, if not the Gods !! NuLabour seem to be doing a fair bit of this recently with spin doctors and civil servants !! If this budget gets hammered, I wonder who will be next on the cross ?? Of course, Our Glorious Leader will do the "princely thing" and wash his hands of it !!

  • Comment number 56.

    53 foredeckdoc

    I keep telling you that this is the new landscape. Unless there is innovation there will only be moderate growth. Sure things will pick up a bit, but strongly, can't see it. Men at Work can come on a one hit wonder comeback tour as Men outta Work. PS Ive always said it is a structural problem. However most remain in work and there is money to be made. Just because the big guys have got the deal wrong does'nt mean all is lost.

  • Comment number 57.

    Stephanie,

    My understanding of what the Chancellor proposed with regard to Personal allowances was that these would be reduced such that anyone earning more than about £112k would receive no allowance. This would generate approximately £2,400 from everyone earning more than that amount together with a pro-rata amount for amounts earned between the point at which this reduction began up to earnings of £112k. I suggest that this impact together with the changes in NI for higher earners (which impacts especially those earner around the current higher rate band boundary by increasing there marginal rate of "tax" from 41% to 51%) will generate significant amounts of revenue. Indeed, it is only for earnings above about £175k that the 50% band would start to generate more than the removal of the basic personal allowance.

    Regards

  • Comment number 58.

    54 ishk

    GPs, 5 years at med school, massive debt, 25 to 30k, another year minimum working as a junior with openended hours to the extent that the junior doctors reps repeated warn about decision making being affected by sheer fatigue, clever tricks to aviod the restraits of the EU working hours directive. More specialist work placements, more major exams to become a GP, you don't just say I'm a GP, it takes 10 years from start to finish. I don't begrudge them the income, I just question what wil keep them here. I don't question high salaries in some secotrs, what I question is the collapse in wages lower down the scale which have occurred to the extent that Working Tax Credit has had to be invented, oncurrent with letting supply and demand get out of kilter with housing.

  • Comment number 59.

    ForedeckDave

    Oh no!!; I'm disagreeing with ForedeckDave!!

    (i) Stop moaning about inherited wealth and Keynes/the Bloomsbury Group being "toffs". Instead start up your own company, run it using your knowledge and experience, and earn yourself GBP 150k + in dividends

    (ii) If you think just "writing off" the debts worldwide would be the solution, then go into the stores of the company you work for and destroy all the stock and work in progress with a hammer. Once all your stock/inventory has been "written off" you will understand the affect writes offs have on the economy in general



  • Comment number 60.

    #58 glanafon

    With two nephews currently under servitude, one in London and the other in Oxford, I keep telling them that I don't have nephews anymore, I have pandas !! The rings around their eyes will make any panda proud !! :-)

    A 70 hour week is as nothing and a 100 hour week is common. Do that in a factory and the Unions will be howling blue murder and yet there are those who expect doctors to be paid the same as mechanics !! If there are no rewards at the end of that servitude, why would anyone want to suffer such a long and harrowing apprenticeship ??

    The politics of jealousy and envy is alive and well and flourishing in Britain, it seems !!

    "I just question what wil keep them here."

    The answer to that question is nothing except a will to serve. Destroy that will and they depart for friendlier shores and not necessarily for more money either. I know at least one who joined Medicin San Frontiere (check spelling, please) for less money and more dangerous but, ultimately, a more rewarding job.

    This government, like many previous Labour governments, thrive on the politics of envy. This budget will do more to drive away the very people that comprise the higher income bracket(s) than it does to "soak the rich". The foolishness of those who cheer the higher taxes are based on ignorance and envy. They refuse to recognise that the rich will simply up sticks and resettle in a more friendly country. It is these very professionals, doctors, dentists, engineers, lawyers, etc., that we need most desperately to get us out of this mess, that will be driven away by this punitive taxation !!

    Two uncles and an aunt, professionals all, were driven out to Canuckistan in the 70s for just this very reason and only came back when they retired !! Great benefit to the Canadians; not so good for old Blighty !! None of them were "landed gentry" as so *many* seem to assume, having learnt that "eternal truth" from their socialism and communism teachers !!

    Will we face another generation of "brain drain" ?? The facts seem to point to that becoming a horrible reality !! However, with international mobility being so readily available these days, the drain may be more than can be recovered from, and Britain may sink down to a third world status !!

  • Comment number 61.

    #59 "(ii) If you think just "writing off" the debts worldwide would be the solution, then go into the stores of the company you work for and destroy all the stock and work in progress with a hammer. Once all your stock/inventory has been "written off" you will understand the affect writes offs have on the economy in general"

    There is an even simpler and more effective way of driving this lesson home !! All he has to do is to sell *all* he has and give *every penny of it* to the poor, as the Bible says, without any expectations of returns. That will demonstrate more starkly how write-offs work on those who lent the money !!

    All that is based on envy and greed, two of the seven Cardinal Sins !! The greed to keep spending what is not theirs and the envy of those who have the money to lend !!

    For a son of a minister of the Church, Our Glorious Leader does not seem to have learnt those lessons from his father. Either that, or they bounced off his skull like a bullet bouncing off the heavy armour of a main battle tank !!

  • Comment number 62.

    MrTweedy & ishkandar,

    Let me make one thing very plain. My coments are NOT made upon the basis of envy and it is merely your shortsightedness that gives you that interpretation. I have absoluely no problem with anybody reaping the rewards of their efforts. Skills and abilities must be rewarded. My point was that in our present society the balance between the relative values of those skills and abilities has got well out of kilter.

    Mr Tweedy, your point number (1). I have never called Keynes/the Bloomsberry Group toffs. In fact I have never mentioned the Bloomsberry Group in any of my posts. Although I am now retired, you have no idea as to my former occupations or the amounts that I have 'earnt'. So please do not make ASSUMPTIONS.

    As for your (ii). The idea that there should be a moritorium on debt may sound very strange at first sight. However, it is not as stupid as you appear to think. What would really happen if all of the countries in the world did it with their sovereign debt? It would minimally create a new playingfield, one in which realtive VALUE of national economies would not be skewed by mere money statements. So let your mind free to think the impossible, then reject the implauseable or downright stupid and you may just find a possible answer to the problem. Stay with the staus quo and we'll all still be here in 10 years discussing the same scenarios - and that WOULD be a wate of time!

    BTW I am really glad when people disagree with me. I believe that it is only by sharing ideas and then debating and arguing them that we can all share and learn. At least we are thinking which appears to be more than our present leaders (business and political) appear capable of doing. Win or lose an argument is not really the point,, it's the thought processes that accompany it that are the benefits.

    ishkandar

    see my response to MTweedy in (i) above.

    "All that is based on envy and greed, two of the seven Cardinal Sins !! The greed to keep spending what is not theirs and the envy of those who have the money to lend !!"

    I will not engage upon a scriptural debate as faith, for me, is far more serious than any economic debate. Though I do find gratuitous use of scripture very unpleasant.

    Please inform me as to exactly who is spending "what is not theirs"? If you are refering to the government then they do have a mandate to make spending and borrwing decisions for the nation. You may not like them and you will have an opportunity to vote for another party in a years time. However, I do not see any of their decisions being based upon either envy or greed.

    If you are refering to me then either you totally miss the points that I have been attempting to raise or you are too closed in your thinking to provide any useful input into the development of our economy or nation.

  • Comment number 63.

    MrTweedy (#59) "Oh no!!; I'm disagreeing with ForedeckDave!!"

    Just make sure you don't disagree with LondonMKUltra ! ;-)

  • Comment number 64.

    #62 "If you are refering to me then either you totally miss the points that I have been attempting to raise or you are too closed in your thinking to provide any useful input into the development of our economy or nation."

    My statement is not a reference to you since I do not know you personally or your personal circumstances. It refers to those who want more than they can afford and borrow to the hilt without regard to the ability to repay.

    As for governments having a mandate to spend or borrow, that mandate does not also allow them to spend beyond their (national) means !! To do so *is* greed and, very possible, an envy of other nations that have the means to spend just so !!

    And pointing out that greed and envy are two of the seven Cardinal Sins is *not* "gratuitous use of scripture" any more so than pointing out that Joseph's interpretation of the Pharaoh's dreams would have been good lessons for Our Glorious Leader in his time as Chancellor !! He squandered the nation's wealth in the fat years and now has to face the lean years without any stores put away for them. So he and/or his Chancellor, Comical Ali, are slaughtering the nation's flocks try to keep alive. When the flocks are gone, what will the nation live on ?? Will he go to the IMF and hock Britain's future even as Joseph's brothers went to Egypt and became their slaves for the next few generations ?? Is this "gratuitous use of scripture" or plain and simple economic common sense ??

    This current Budget has been shown to be based on optimism (to put it politely) that is *not* shared by the rest of the world and it is only one day old !! How much more of this "optimism" can we survive before we enslave our grandchildren with shackles of massive national debt and a highly devalued currency ??

  • Comment number 65.

    We have already enslaved our grandchildren in far more serious ways than the level of debt and the value of the currency. Currency is relative. As the vast majority of countries around the world are also increasing their national debts then the effects of the borrowing will be relative. Yesterday the BBC were proclaiming a "sell-ff of the £", strange sell-off when today the £ rose in value towards the spot rate pre-budget!

    As for the forecasts presented yesterday and the 'optimism' associated with them, then I share your opinion. I cannot find any signals that would support a short term return to growth - let alone a sustained growth rate. I have argued long that we are in a major depression that will not work itself out in less than a decade. That is why I have also argued for a protectionist stance because we need to build a new industrial base (probably based upon new technology) and hat will take time and careful nurturing. If Britain is to have a future as as a major trading nation then I belive that we must re-direct the spending away from the banks into strategic development of true wealth creating enterprises and an infrastructure to support them. For too long we have expected to develop wealth without getting our hands dirty.

    Was the nation's wealth sqaundered by Blair and Brown? Well some of it. From this perspective we should also be asking ourselves if that 'wealth' ever really existed? Would another political party have managed any better? Debateable but I see no signs other than political point scoring that either of the 2 other parties would have managed things any better. That is not a defence of Nu Labour, it is just a question that cannot be answered.

    On the point of "gratuitous use of scripture". I re-visited your post #61. In such a short post you manage to employ 2 seperate biblical references. Therefore I believe the charge is proved but then if you must, you must.

  • Comment number 66.

    #65 Biblical references are as good a teaching tool as any other and are probably more relevant in a *nominally* Christian country !! In the East, I would have used Confucian or other teachings.

  • Comment number 67.

    ForedeckDave

    My apologies - I seem to have mixed you up with GuyCroft. It was he who posted the "Keynes + Bloomsbury + Toffs" comments. Shows I should have checked my facts before making a noise.....
    My brain is all half-cocked these days.

    Anyway, at least it led to an interesting discussion.....and I apologise for any embarrassment I caused to myself. (I'll buck my ideas up in future).



  • Comment number 68.

    You don't get it do you.

    This tax would be unfair if wages related directly to the 'usefullness to society' of the work undertaken.

    This is clearly NOT true. The highly paid bankers only provide 2 functions.

    1) Security of your money - i.e. a safe
    2) To lend you money that they previously extracted from your forefathers in an ever decreasing spiral - so your borrowing actions will merely reduce the ability of your children to be 'enterprising'

    What all you fools who keep arguing this tax rise will create a brain drain, or see millions of 'really useful rich people leave the country' are seriously mis-guided and too easily persuaded by the crying of the wealthy.

    If you believe in market principles then you know that others will replace them - or are we only living by market principles when we choose to?

    Those who don't believe in market principles know that ultimately the Government can step in and create the scene for enterprise. However - crucially - in areas that are good for the country and not what the market dictates (i.e. building millions of cars that nobody actually wants and then spending billions of pounds advertising and marketing them to convince the people that they need them)

    I am taken aback by the snobbery of some of these posts - you're not doing yourselves any favours by calling groups 'the great unwashed'. It merely shows your ignorance and stupidity. I would much rather be on the side of the great unwashed than the great un-educated.

    I work in a bank, I earn over 150k a year and I cannot see a problem with the tax levy. I know for a fact that my job and many others around me are vastly over-paid and if anything the taxation at the top is nowehere near enough.

    Just to kill off the brain drain argument - can anyone answer why extremely rich entrepenuers (like Branson) continue to start up busineses and invest in companies when he's clearly rich enough to sit back on an island and do nothing forever?

    He does it because he LOVES it - I know most people cannot understand the concept of doing something you love - but that's what happens when you get into the right job.

    Regardless of this - what we do have now is a situation where the battle lines are drawn - class war is about to kick off and the rich are few in numbers.

    They may be leaving the country - but it won't be because of tax - but because they will be driven out by the ordinary working class people of this nation who are sick of their parasitic ways.

    When they come to me I shall gladly hand over all my wealth and join them as I am an educated man and realise that this is inevitable and cannot be stopped.

  • Comment number 69.

    MrTweedy (#67) "My brain is all half-cocked these days.

    Don't get too sure of that! ;-)

  • Comment number 70.

    #68 "I work in a bank, I earn over 150k a year and I cannot see a problem with the tax levy."

    "When they come to me I shall gladly hand over all my wealth"

    Why wait ?? What's there to stop you from handing over all your wealth *NOW* ?? Sell all you have and give to the poor and join some project in Africa digging wells for the locals to use !! That should be a useful enough job !!

    "I work in a bank, I earn over 150k a year"

    "If you believe in market principles then you know that others will replace them"

    When conditions are sufficiently bad to drive out the professionals, the ones who replace them are either under-qualified or are charlatans !! For someone who profess to work in a bank, you have a strange idea of market forces. Do you happen to work in NR, HBOS or one of a similar ilk ?? Selling 125% mortgages, CDOs or CDSs, perhaps ??

  • Comment number 71.

    ishkandar,

    Feeling a little cruel today?

    It is either brave of writingsonthewall to come on here and admit that (1) he works in a bank and (2) earns over £150K and believes that he is overpaid or a complete wind-up. From the one of his post I would opt for the former.

    Now GB, AD and YC keep banging -on about the global nature of this mess. But they are correct on that one point. So where are all these 'professionals' going to go when they feel driven out? History shows that the vast majority who cry "I'm leaving and taking my wealth with me" either don't or can't. What happens when the cry-baby says "it's my ball and I ain't playing"? Simple, the rest start playing another game.

  • Comment number 72.

    #71 "History shows that the vast majority who cry "I'm leaving and taking my wealth with me" either don't or can't."

    Surprising as it may seem, many *can* take their wealth with them, albeit in the form of their knowledge and/or expertise !! It is *those* that will hurt the country more than the ones that merely take their money or assets with them !!

    Those who count wealth only in terms of cash or assets miss out a large proportion of the population, who are wealthy in knowledge or ability or both !!

    "What happens when the cry-baby says "it's my ball and I ain't playing"? Simple, the rest start playing another game."

    Without someone to invent a new game, there will be no more "another game" to play !! And, without someone to invent the rules, the game will degenerate into a playground brawl !!

 

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