Labour Tax: More and more tax as an alternative to less and less economic activity?

Lord Kinnock, former Labour Leader, tells Andy Burnham to get 12 Billiion Pound more by increasing tax. The former Leader, known for having celebrated electoral victory on the very evening when the Labour Party was crashed on the polls, is now suggesting that increasing the burden on wealth creators is the solution for a battered economy and exhauted Treasury. So Mr Kinnock´s solution to cure the patient: Kill the patient.

Britons have less and less disposable incoe or afraid to spend whatever they have left. Caution when it comes to spending is justifiable, especially when more and more people are losing their jobs or can hardly get a new job.

When businesses scale down their operations is not due to increased optimism, but to growing uncertainty. With so many unsolved conflicts and more conflicts on the horizon. When Autum comes, energy consumption will go up at a time when energy prices go up and down. How can you foresee what is happening next? 

We heard the headlines about "we are gong to do this, we are going to do that". Can the new Labour government deliver? Right at the time when Andy Burnham was appointed Prime Minister, pundits were saying "He is Labour´s last chance." Having obtanined a historical majority in 2024 with a lower percentage of the votes, Labour appeared to be an invincible force. A series of mishaps and bad decisions, brought down Keir Starmer, the leader that got the said historical majority. Andy Burnham will be touring across Britain in an effort to gather support, but he is starting from a very low point. He was not chosen by the Electorate in a General Election. He was appointed after winnng a local election. 

The Autumn Budget could prove to be the downfall of the Labour government. With limited options, under pressure from a very demanding and impatient Labour Party, every decision the newly appinted Prime Minister takes is bound to be controversial. 

 

 

Labour: changes proposed regarding taxes could not only make life difficult, but virtually impossible

Taxes on property are legalised theft. The only fair taxes are taxes on real income. Under the publicised intention of a fairer system, taxes proposed by Labour are no different from expropiation implemented by the Soviet Communist Party when they took over power. People lost their homes and their land and they were no longer financially independent.

I have long criticized Business Rates, because they are not based on income. They are based on the space occupied by a business measured in square feet. So making money or not making money the said tax is a burden on businesses that prevents many from setting up companies. But the new tax based on the value of a property will ruin families and deprive them of the homes they work so hard to acquire.

If you say that you are going to charge as tax 1 per cent of the value of a property, if a house is worth 800,000 Pound then what you are actually saying is that families than own their houses will have to pay 8,000 as tax every year. Today, Council Tax is about 2500 Pound. So the new tax will be three times higher.

If you are a pensioner receiving about 12,000 Pound a year then you are going to be left with 12,000 minues 8,000 = 4,000 to pay for living expenses for an entire year. In other words, you are not going to have enough to survive.

Rachel Reeves and the 5% for Defence expenditure

 

Having seen what we have seen until now when it comes to monies and politics, can you trust the British Prime Minister and his promises about Defence?

I asked and asked again. Can we trust statements made at the latest NATO gathering? Political speeches and posturing do not pay for massive investments and massive borrowing and massive borrowing is already an issue when Britain´s credit rating is at stake. If things become any worse and interest paid on public debt keeps going up, how long before we head for a financial crash?

Any reforms are now compromised for the duration of the present administration and strikes are just beginning. How long will Rachel Reeves be able to keep the boat afloat? There are three ways to get resources and each has a price. We can raise taxes. We can borrow. We can reduce services. For each of the three there is a political cost to pay. Raising taxes can be popular with the left of the Labour Party, but deeply unpopular for the business community and, ultimately, will lead to higher prices of utilities and goods. Borrowing will lean to higher interest paid for public debt. Cutting services will not be popular with members of the public. None of them will be a vote winner in the present environment. 

But what that means for British standing? How reliable can a country that cannot pay its debts be? If one of the core members of NATO cannot afford to deliver what it promises, what does it say about NATO itself?

While Rachel Reeves struggles to keep the boat afloat, Keir Starmer is keeping his eyes off the ball

 

The British economy is heading towards the rocks, Rachel Reeves is seeing a financial cushion evaporating, making the three bad options available as a threat.

Regardless of the what the Bank of England does or does not do, investors might have different ideas. Would you put your monies on the Titanic?

So what next? More taxes, more borrowing or more cuts of public services or a combination of the three.

This at a time when the Prime Minister might be talking about forcefully increasing expenditure in defense. Well, if the theoretical conflict is imminent, time ran out a long time ago. What is the reality of British military strength? A few nuclear bombs that Britain cannot use for fear of retaliation against all British cities. When it comes to conventional warfare, Britain is absolutely naked.  

Six Conservative Candidates to become Leader of His Majesty's Opposition

 

Six candidates to become Leader of His Majesty's Opposition. This week, it is expected that two of them will be voted out in ballots in which only Conservative MPs will vote.

Mel Stride, Priti Patel, Robert Jenrick, James Cleverly, Tom Tugendhat, and Kemi Badenock are the six hopeful candidates.

With the Labour Party moving towards the right for internal reasons, Reform will be the bone of contention for the Conservative Party.

Question 1 - What do they stand for?

Question 2 - What do party members want?

Ultimately, whoever the last two contenders will be, party members will have to chose. What is the mood in the Conservative Party? Will the party want to go left in order to place itself in the mythical centre? Will the party have to go right to counter Reform?

With the horrendous experience of a similar leadership contest, who will be the chosen one and how long will the chosen one last?

The first year of the Labour governement will be a test for the Labour government and for His Majesty's Opposition. If the Labour government falters, then there has to be somebody who is killed enough to capitalize on Labour's mistakes. But it has to be also somebody skilled enough to prevent any additional casualties. There were casualties before the General Election and there were casualties after the election with several Conservative candidates being pushed aside because of the rising support for Reform.

If Conservative MPs decide to go awol and join other parties, including Reform, this could sink the Conservative Party in favour of Reform or other political parties. There is hope that 2026 could produce better news for the Conservative Party. Is that hope justified?

The first test will be the coming budget to be presented by the Labour government. If because of tax changes the Labour government's plan goes South, then the chances of doing better in local and regional elections will rise. Having said that, party unity will be a critical factor.

 

Jeremy Hunt: November 17th 2022 - Tax Day

 

November 17th 2022 - Tax Day

A hole in public finances of  more than 50 billion Pound will have to be plugged. Apart from the prospect of budget cuts affecting services, the alternative is a massive amount of tax increases.

Kwasi Kwarteng was slaughtered, thrown to the wolves, because he wanted to implement Liz Truss policies of tax reductions. What will happen to Jeremy Hunt when he announces a budget that contains punitive measures?

Let us remember that on the first round of the leadership election that led to the Premiership of Liz Truss the now Chancellor of the Exchequer didn't manage to progress beyond the first round. He was not popular among MPs and was not popular among the Membership of the Conservative Party. Now, the same man is going to propose a budget that goes against what is the declared ideological stance of the Conservative Party. Rising energy costs, rising interest rates plus rising taxes. If you are a business owner struggling to survive in the present financial environment, how are you going to react? Will you minimize your business to reduce fixed costs and in doing so sent your staff to the queue of the unemployed? A very harsh winter coming for those who lose their jobs when families are already struggling to pay for rental accommodation because they don't have the means to afford mortgage payments.

Wasn't Rishi Sunak the one who suggested that we should have a long term approach instead of shock therapy? Will such a budget be compatible with long term thinking? If Jeremy Hunt goes to far, this could the end of Jeremy Hunt and also the end of an already wavering Rishi Sunak? What next? Another leadership election?

Just a few months ago it was reported that recent interest rates will put more than 500,000 mortgages in jeopardy. Will more taxes and more unemployment make the situation better or worse? If the mortgage business falters, the financial system as a whole will be in serious trouble. We don't need even to explain what a wave of mortgage and load defaults will do to the economy.

Daniel Hannan: Consumers are the ones who ultimately pay for tax rises

Daniel Hannan: Consumers are the ones who ultimately pay for tax rises

The logic of the argument is self-evident. A business has suppliers, staff, customers.

When you calculate the cost of services or goods that you offer you take into account the prices charged by your competitors, the cost of your supplies including infra-structure and tools of the business and the cost of having a certain number of staff. You look at the income of the business.

When taxes rise or the costs paid to your suppliers rise or the salaries paid to you staff rise or the taxes paid rise you have to make adjustments. If the equity of your business calculated by deducting your costs from your income starts to fall, you need to put up your prices. This can be done up to a certain point until you start losing customers to the competition that offers cheaper prices. So what next?

You can try and reduce operational costs and you have a look at the number of staff that you employ. Is the number of staff that you pay for justified by the equity of your business? You could lower salaries and this can be extremely unpopular and your workforce most probably will not want to get less pay. So what do you do? You start laying off staff. Now, you can continue laying off staff until the point when the business is no longer capable of being operational. The last move is to close down the business.

What happens when you close down your business? Your staff will lose their jobs and claim unemployment benefits. They are no longer going to be a direct burden for you. They are going to be paid with taxpayers money. Your suppliers for whom you are a customer are going to lose a source of income making them reconsider their pricing policies and the number of staff that they themselves have. So they too might decide to close down business if they lose a certain number of customers and their employees are going to become unemployed to get welfare payments paid by taxpayers.

When a big industry comes to an end, there is a network of associated industries that can fall with it and if enough industries disappear this ultimately leads to mass unemployment.

Therefore taxes are a very sensitive issue. You want to take the apples but if you also cut the trunk and the roots of the tree there are going to be no apples.

Zero Hour Contract companies paying employees with two months delay

We keep getting reports of companies employing staff on Zero Hour Contracts paying their employees with a two-month delay. In a country in which Members of Parliament employ staff on Zero Hour Contracts you have to the conclusion that exploitation has been legalised.

Some people are not even paid the minimum wage and they are forced to work on commission. I wonder what the Inland Revenue has to say about it or is has the Inland Revenue become a criminal organisation that works against the United Kingdom?

It is a disgraceful situation in a country in which the pensions deficit keeps growing and legislation has being going through Parliament to delay and delay the age of retirement. When are successive governments in the United Kingdom going to put a halt to exploitation?

Who are the ones bound to suffer most? Those who are facing desperate financial situations. If there ever was an example of a political system that isn't working, this is it. This is the clearest example of Slavery when people are under paid, paid late or made to work without pay.

Bob Geldof: of charitable deeds and tax avoidance

In case you were wondering about it, very little if any of Bob Geldof's money helps to fund the National Health Service, Education and other fundamental areas in terms of public services in the United Kingdom. Why? Because Bob Geldof is what is known as a Non Dom or Non Domicile and does not pay Income Tax in the United Kingdom.

Talking about Foreign Aid provided by Britain as a country, I would say that Bob Geldof has no argument to make to talk about keeping, reducing or increasing Britain's Foreign Aid since Bob Geldof is not making contribution to the Treasury from where monies sent as Britain's Foreign Aid are taken and sent abroad.

Several political parties have talked about tackling the issue of Non Domiciles and until people like Bob Geldof, Bono, and others are made to pay their right tax dues, you shouldn't feel guilty about paying your taxes. The issue of those who are more equal than others has to be dealt with.

We hear a lot from some quarters that criticize foreign companies but the same critics are not so vocal about well known individuals who happily go around making millions, presenting themselves as charitable people and avoiding tax payments.