The UK Politics and EU Referendum thread - merged

[horseplayer]

Our politicians reflect what we want to see in them.

You get someone who is possibly more honest than most in Corbyn and he is "unelectable"

There's a reason they avoid answering any questions. Maybe the media are also to blame

He is unelectable, if he is its unproven, because of his views not his honesty.

If he is unelectable, it's because he believes integrity and conviction is more important than doing/saying anything and everything to be electable. Isn't he making a good point?

I think the one thing we all agree on is that British politics needs an overhaul, yet based on this thread you'd swear everybody wants an opposition desperately sucking up to Murdoch and Dacre to try and be electable. I obviously fear for the country at the moment (especially the disabled and unwell), in spite of that I can't help but admire Corbyn.

Superb post kuku

[DungBeetle]

Think we need some kind of parameters to think of the impact as there are different degrees. 

What percentage of GDP will government spending be responsible for?
What will income tax rates be?
What will corporation tax rates be?
What industries will be nationalised?
Any new taxes introduced?

Well that's taken all the fun out of it.

Ok let's just say that Jeremy Corbyn has just won the election and in his victory speech he announced 'Britain is now socialist'. What are your hopes and concerns at this point?

Well personally I think it would be a bad thing, but trying to be objective if we are just talking in a vacuum:

HOPES:
Increased social cohesion
Railways give better value for money post nationalisation
Energy firms regulated more strictly
More opportunities for lower paid workers

FEARS:
It's a less attractive place to set up business due to tax and red tape
High earners leave (along with their PAYE revenue)
Banking sector leaves due to red tape and Tobin Tax
Significant black hole in Government revenue
People's QE used to excess to fund government pet projects
Currency devaluation due to People's QE
Increased Union disruption leading to loss of productivity
Military downgraded even further than it is currently

And go where?

Wherever.  Hong Kong.  Dublin.  Emirates.  Frankfurt.

All these discussions are mute without us saying what the tax rates are, but labour is mobile these days.   Everyone has their own tolerance to tax - I could easily relocate to Abu Dhabi and work tax free.  But I have to weigh up the fact that I prefer living in the UK and on balance I'd rather pay 45% higher rate and work here.  70% less so.

[AlunB]

Think we need some kind of parameters to think of the impact as there are different degrees. 

What percentage of GDP will government spending be responsible for?
What will income tax rates be?
What will corporation tax rates be?
What industries will be nationalised?
Any new taxes introduced?

Well that's taken all the fun out of it.

Ok let's just say that Jeremy Corbyn has just won the election and in his victory speech he announced 'Britain is now socialist'. What are your hopes and concerns at this point?

Well personally I think it would be a bad thing, but trying to be objective if we are just talking in a vacuum:

HOPES:
Increased social cohesion
Railways give better value for money post nationalisation
Energy firms regulated more strictly
More opportunities for lower paid workers

FEARS:
It's a less attractive place to set up business due to tax and red tape
High earners leave (along with their PAYE revenue)
Banking sector leaves due to red tape and Tobin Tax
Significant black hole in Government revenue
People's QE used to excess to fund government pet projects
Currency devaluation due to People's QE
Increased Union disruption leading to loss of productivity
Military downgraded even further than it is currently

And go where?

Wherever.  Hong Kong.  Dublin.  Emirates.  Frankfurt.

All these discussions are mute without us saying what the tax rates are, but labour is mobile these days.   Everyone has their own tolerance to tax - I could easily relocate to Abu Dhabi and work tax free.  But I have to weigh up the fact that I prefer living in the UK and on balance I'd rather pay 45% higher rate and work here.  70% less so.

Moot

Yeah I think that's a fair point. There is obviously a balance on both sides of this. But I find it extremely hard to accept there would be a mass exodus of British people if tax rates went up. People can't even bear to move from London to another city in the UK never mind to a different country entirely with no friends or family where they don't speak the language.

[Jon MW]

Think we need some kind of parameters to think of the impact as there are different degrees. 

What percentage of GDP will government spending be responsible for?
What will income tax rates be?
What will corporation tax rates be?
What industries will be nationalised?
Any new taxes introduced?

Well that's taken all the fun out of it.

Ok let's just say that Jeremy Corbyn has just won the election and in his victory speech he announced 'Britain is now socialist'. What are your hopes and concerns at this point?

Well personally I think it would be a bad thing, but trying to be objective if we are just talking in a vacuum:

HOPES:
Increased social cohesion
Railways give better value for money post nationalisation
Energy firms regulated more strictly
More opportunities for lower paid workers

FEARS:
It's a less attractive place to set up business due to tax and red tape
High earners leave (along with their PAYE revenue)
Banking sector leaves due to red tape and Tobin Tax
Significant black hole in Government revenue
People's QE used to excess to fund government pet projects
Currency devaluation due to People's QE
Increased Union disruption leading to loss of productivity
Military downgraded even further than it is currently

And go where?

Wherever.  Hong Kong.  Dublin.  Emirates.  Frankfurt.

All these discussions are mute without us saying what the tax rates are, but labour is mobile these days.   Everyone has their own tolerance to tax - I could easily relocate to Abu Dhabi and work tax free.  But I have to weigh up the fact that I prefer living in the UK and on balance I'd rather pay 45% higher rate and work here.  70% less so.

Moot

Yeah I think that's a fair point. There is obviously a balance on both sides of this. But I find it extremely hard to accept there would be a mass exodus of British people if tax rates went up. People can't even bear to move from London to another city in the UK never mind to a different country entirely with no friends or family where they don't speak the language.

But it doesn't need a mass exodus - the top 5 (ish) % pay about half the income tax revenue (and you'd assume a fair percentage of VAT etc as well); I think there was a headline last year saying something like the top 3000 people paid about the same income tax as the bottom 9 million.

I think it's true that it's probably not really a concern - I think most can handle the top rate of tax going up*, but if it really started rocketing - which it could do if the UK really embraced a socialist agenda - then it might have a genuine negative effect on the economy.


*having said that my boss reminds me that his uncle retired to Barbados the last time Labour put the income tax rate up to 50%. He still spends some money on people looking after his property in the UK but obviously nowhere near the level that he would have if he was still running business's here and doing all his shopping here.

[AlunB]

Yeah I'm certainly not saying it's as black and white as "everyone will stay" or "everyone would leave" but I suspect it's a bit close to the first one than the second. We Brits aren't exactly renowned for our embracing of foreign cultures and languages are we? And leaving family and friends behind is a huge wrench for most people.

As a purely theoretical point if a government placed sufficient safeguards in so that people couldn't just move their business overseas and continue to trade as normal in the UK, wouldn't logically the top 5% be replaced by a different 5%? In that case the question is more would a socialist or high-tax government kill business rather than cause people to sod off to some awful tax-haven purgatory

[AlunB]

Interesting parallel here http://www.theguardian.com/society/2015/oct/20/junior-doctors-thousands-to-leave-nhs-if-hunt-pushes-through-new-contract?CMP=share_btn_tw

[DungBeetle]

Yeah I'm certainly not saying it's as black and white as "everyone will stay" or "everyone would leave" but I suspect it's a bit close to the first one than the second. We Brits aren't exactly renowned for our embracing of foreign cultures and languages are we? And leaving family and friends behind is a huge wrench for most people.

As a purely theoretical point if a government placed sufficient safeguards in so that people couldn't just move their business overseas and continue to trade as normal in the UK, wouldn't logically the top 5% be replaced by a different 5%? In that case the question is more would a socialist or high-tax government kill business rather than cause people to sod off to some awful tax-haven purgatory

I think you're overestimating how many of the high earners are actually Brits.  The banking sector (for example) has a significant proportion of multilingual Europeans working in it.  They don't feel any tie to this country at all.   If London becomes uncompetitive (either due to high income tax, or a Tobin tax on London transactions) then they will be gone.

People aren't looking to move to tax-haven purgatory in many cases.  They just want a Government that doesn't take them for a ride.

[AlunB]

Yeah I'm certainly not saying it's as black and white as "everyone will stay" or "everyone would leave" but I suspect it's a bit close to the first one than the second. We Brits aren't exactly renowned for our embracing of foreign cultures and languages are we? And leaving family and friends behind is a huge wrench for most people.

As a purely theoretical point if a government placed sufficient safeguards in so that people couldn't just move their business overseas and continue to trade as normal in the UK, wouldn't logically the top 5% be replaced by a different 5%? In that case the question is more would a socialist or high-tax government kill business rather than cause people to sod off to some awful tax-haven purgatory

I think you're overestimating how many of the high earners are actually Brits.  The banking sector (for example) has a significant proportion of multilingual Europeans working in it.  They don't feel any tie to this country at all.   If London becomes uncompetitive (either due to high income tax, or a Tobin tax on London transactions) then they will be gone.

People aren't looking to move to tax-haven purgatory in many cases.  They just want a Government that doesn't take them for a ride.

Would those jobs then cease to exist?

[DungBeetle]

Yeah I'm certainly not saying it's as black and white as "everyone will stay" or "everyone would leave" but I suspect it's a bit close to the first one than the second. We Brits aren't exactly renowned for our embracing of foreign cultures and languages are we? And leaving family and friends behind is a huge wrench for most people.

As a purely theoretical point if a government placed sufficient safeguards in so that people couldn't just move their business overseas and continue to trade as normal in the UK, wouldn't logically the top 5% be replaced by a different 5%? In that case the question is more would a socialist or high-tax government kill business rather than cause people to sod off to some awful tax-haven purgatory

I think you're overestimating how many of the high earners are actually Brits.  The banking sector (for example) has a significant proportion of multilingual Europeans working in it.  They don't feel any tie to this country at all.   If London becomes uncompetitive (either due to high income tax, or a Tobin tax on London transactions) then they will be gone.

People aren't looking to move to tax-haven purgatory in many cases.  They just want a Government that doesn't take them for a ride.

Would those jobs then cease to exist?

If the banks decide that a Tobin tax means they can't operate competitively on the London Stock Exchange then absolutely.

If it's just income tax, the Banks will need to pay bigger salaries to attract the guys with the skills needed (quants/derivatives guys/sales people with established institutional networks).  They might do this temporarily, but long term they will likely figure that moving locations is better all round.

You can't just train up the people in retail banking to manage the exotics book or program a risk system.  The reality is they don't have the skill sets required.

The problem is this - it's easy to say "they won't leave - they're bluffing".  However, once industry sentiment starts to shift it will be very hard to reverse.

I'm sure many will say good riddance to the industry, but it is one of our best sectors with high long term tax revenue generating capabilities.  It is easy for people to use the bailout as justification why we don't need them.

[AlunB]

No that's all entirely sensible and realistic. That appears to be more a factor of businesses moving away than people though although the two feed into each other to a large extent.

It's as per your original point really, how much more money would you need to earn to have to choose Dublin over London? I suspect it would be quite a lot for most people (no offence to Irish people intended).

[AndrewT]

It's as per your original point really, how much more money would you need to earn to have to choose Dublin over London? I suspect it would be quite a lot for most people (no offence to Irish people intended).

When I left London to move to Dublin it made me realise what a shithole London is - don't miss it at all.

[Doobs]

Good riddance to those bluffers saying they will leave the country? 

http://www.theguardian.com/society/2015/oct/20/junior-doctors-thousands-to-leave-nhs-if-hunt-pushes-through-new-contract?CMP=share_btn_tw

This is what I was talking about the other day.  It is very good saying if we just do this we'll have better cover in the NHS all week, but it will likely never be possible.

It isn't just the Tories that do this, honest Corbyn and his bag of tricks, where he borrows without cost and only ever needs to tax the 1%. 

Having a bunch of ideals that we'd all do with a limitless pot of money is pretty far removed from honest politics in my view.

[nirvana]

Yeah I'm certainly not saying it's as black and white as "everyone will stay" or "everyone would leave" but I suspect it's a bit close to the first one than the second. We Brits aren't exactly renowned for our embracing of foreign cultures and languages are we? And leaving family and friends behind is a huge wrench for most people.

As a purely theoretical point if a government placed sufficient safeguards in so that people couldn't just move their business overseas and continue to trade as normal in the UK, wouldn't logically the top 5% be replaced by a different 5%? In that case the question is more would a socialist or high-tax government kill business rather than cause people to sod off to some awful tax-haven purgatory

I think you're overestimating how many of the high earners are actually Brits.  The banking sector (for example) has a significant proportion of multilingual Europeans working in it.  They don't feel any tie to this country at all.   If London becomes uncompetitive (either due to high income tax, or a Tobin tax on London transactions) then they will be gone.

People aren't looking to move to tax-haven purgatory in many cases.  They just want a Government that doesn't take them for a ride.

Would those jobs then cease to exist?

If the banks decide that a Tobin tax means they can't operate competitively on the London Stock Exchange then absolutely.

If it's just income tax, the Banks will need to pay bigger salaries to attract the guys with the skills needed (quants/derivatives guys/sales people with established institutional networks).  They might do this temporarily, but long term they will likely figure that moving locations is better all round.

You can't just train up the people in retail banking to manage the exotics book or program a risk system.  The reality is they don't have the skill sets required.

The problem is this - it's easy to say "they won't leave - they're bluffing".  However, once industry sentiment starts to shift it will be very hard to reverse.

I'm sure many will say good riddance to the industry, but it is one of our best sectors with high long term tax revenue generating capabilities.  It is easy for people to use the bailout as justification why we don't need them.

Yah but only some leave - sure there'll be enough people left to backfill and Shirley succession plans mean there are people who can do the jobs or banking would end when the current crop die ? So what difference does it make, it makes none

[AlunB]

This thread is a really pleasant surprise btw. Lots of pretty well informed people (and me) making intelligent points, altering their views slightly and offering differing opinions on things that really matter.

[DungBeetle]

No that's all entirely sensible and realistic. That appears to be more a factor of businesses moving away than people though although the two feed into each other to a large extent.

It's as per your original point really, how much more money would you need to earn to have to choose Dublin over London? I suspect it would be quite a lot for most people (no offence to Irish people intended).

Good question.  Going to different for different people.  I've got roots here so the rate would have to be a lot higher to change my behaviour than a European who has worked all over the place.  I think when Gordon Brown took away the personal allowance that was a £4k tax rise overnight and I grumbled for a bit and then just got on with it so it would need to be a pretty chunky rise before I personally looked to relocate.  But everyone has different situations.

Think you are right though - how corporates would be treated is of greater relevance.  You can probably squeeze the PAYE/small business guy harder than you can the multinational.