Labour's economic credibility

[Barry]

Not wishing to be pedantic on a thread that I am thoroughly enjoying, but the state pension is actually taxable. The reason it does not look that way is due to a cheerful piece of government legerdermain.

Do they always consider the state pension first against any taxable allowances? That would do it, I suppose.

[BeElBeeBub]

Cut the flannel, where's the link to your data and where's the model you spoke of?

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/760484/28_November_EU_Exit_-_Long-term_economic_analysis__1_.pdf">https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/760484/28_November_EU_Exit_-_Long-term_economic_analysis__1_.pdf



And the technical reference to go with it.



https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/759763/28_November_EU_Exit_Long-Term_Economic_Analysis_Technical_Reference_Paper.PDF">https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/759763/28_November_EU_Exit_Long-Term_Economic_Analysis_Technical_Reference_Paper.PDF

[BeElBeeBub]

Thanks for your condescending round up of pensions. I know how they work, I pay them to my employees. Nothing you said above detracts from the fact they are not a benefit, how long do you think the government would continue paying them for if no one paid in any more pension contribution?



The EU defined pension as deferred wages, also I can work and earn as much as I want and it doesn't affect my pension.

Things we agree are "benefits" (eg housing or unemployment) are cash payments from current revenue (taxes and borrowing) based on individual eligibility (age, health, employment status, savings etc).



OA pensions are cash payments from current revenue based on individual eligibility (age, sex, how many NI credit years etc)



If it walks like a duck and quacks like a duck, it's a duck.



Your "pension contributions" are your taxes. One part of your taxes is called "NI contributions", which make people think they are towards their pension.  



They aren't.  The money just goes into the general revenue pot.



Calling some of your income tax "NI" is just a clever way of hiding income tax (as are employer contributions).



Pensions are a benefit.

[Churchill]

Must be the only "Benefit" that we have to pay Income Tax on.

According to some on the left there is a tax on one benefit the so called " Bed Room Tax" not a tax at all a reduction in a Benefit yes, but not a tax

[Borchester]

Must be the only "Benefit" that we have to pay Income Tax on.

Not wishing to be pedantic on a thread that I am thoroughly enjoying, but the state pension is actually taxable. The reason it does not look that way is due to a cheerful piece of government legerdermain.

[Nick]

Well said I paid for my State Pension for 50 years which is derisory not much of a return, in addition I paid into another pension fund for over 30 years, I paid into 3 other small pension funds for 15 years for my benefit to help pay my bills in my old age, which means when added together I pay income tax on and will do so until I pop me clogs.

Must be the only "Benefit" that we have to pay Income Tax on.

[Churchill]

Thanks for your condescending round up of pensions. I know how they work, I pay them to my employees. Nothing you said above detracts from the fact they are not a benefit, how long do you think the government would continue paying them for if no one paid in any more pension contribution?



The EU defined pension as deferred wages, also I can work and earn as much as I want and it doesn't affect my pension.

Well said I paid for my State Pension for 50 years which is derisory not much of a return, in addition I paid into another pension fund for over 30 years, I paid into 3 other small pension funds for 15 years for my benefit to help pay my bills in my old age, which means when added together I pay income tax on and will do so until I pop me clogs.

[Baron von Lotsov]

This is a real plot from the LSE



Log of real GDP per capita vs time for the UK.





https://blogs.lse.ac.uk/politicsandpolicy/files/2015/03/Van-Reenen-Austerity-fig-1.png">



If you look at the equivalent in the US from 1890 to the current time, you actually get an even straighter line, with only the war causing a dip, but made up for in the years after.

[Nick]

Ok!  Here's one.



The government's own November 2018 report forecast a GDP loss (compared to no Brexit) of 4-6% for an FTA type arrangement (that is roughly where BJ is claiming to be aiming for).



When it comes to assumptions about FTAs it assumes this (emphasis mine)







The footnote to para 49 lists the countries



United States

Australia

New Zealand

Malaysia

Brunei

China

India

Mercosur (Brazil, Argentina, Paraguay and Uruguay)

Gulf-Cooperation Council (UAE, Saudi Arabia, Oman, Qatar, Kuwait and Bahrain).



So there you go, a comprehensive forecast showing we will be worse off despite assuming zero tariffs FTAs with various countries



 yes, for two reasons



1) with the exception of the US they are generally much poorer than the EU.  India may be 1bn people but its economy is the size of France.



2) they are all much further away than the EU27



Who is a better market for our goods? A country next door with an average wage €28k or a country 4,000 miles away with an average salary of $4k?

Cut the flannel, where's the link to your data and where's the model you spoke of?

[Nick]

Yes, pensions are benefits.  You clearly don't understand how pensions are financed.  



There is no mythical pot of money marked "Nick" at the treasury that you contribute to and for you to draw on.



HMRC weren't carefully putting all your NIC over the years to pay your pension when you retired.



NI contributions aren't ringfenced in any way.  They just go into the general taxation pot.  It's a clever sleight of hand.  People think they are paying into something they will draw on later - as you said, "like a bank".  But it's not.



That is a lie you have been sold.



The income tax and NIC (they're the same really) that you paid when you were working was paid straight out to pensioners at the time.



When you get paid your pension, that money will be coming from those paying taxes now. As the proportion of pensioners is climbing (as the boomers hit retirement) pension costs are soaring.  That have near doubled since the mid '00.



The ratio of no workers to workers is getting worse, not because of unemployed people, but because there are more and more old people for each worker.



Pensions are a drain in the treasury just as unemployment, defense, healthcare etc are.



As I showed, they are a bigger drain than all the welfare (housing, unemployment child benefit, sick benefit) put together.



I'm not saying pensions aren't deserved or aren't a good thing.  I'm just pointing out that all the usual targets for saving - the unemployed, the sick etc aren't a big a segment of the spending as pensioners and therefore aren't going to be effective in reducing spending.



For example, you could cut all unemployment benefits  (the dole) and that would be only cut 10% of the deficit.

Thanks for your condescending round up of pensions. I know how they work, I pay them to my employees. Nothing you said above detracts from the fact they are not a benefit, how long do you think the government would continue paying them for if no one paid in any more pension contribution?



The EU defined pension as deferred wages, also I can work and earn as much as I want and it doesn't affect my pension.

[BeElBeeBub]

And yes, pensions in the vast majority of cases are not benefits. I've paid my full 35 years NIC's, getting my contribution back is not a benefit, same as getting your money back from the bank is not a benefit.



These people have worked their whole lives in most cases. Pensions are not benefits.

Yes, pensions are benefits.  You clearly don't understand how pensions are financed.  



There is no mythical pot of money marked "Nick" at the treasury that you contribute to and for you to draw on.



HMRC weren't carefully putting all your NIC over the years to pay your pension when you retired.



NI contributions aren't ringfenced in any way.  They just go into the general taxation pot.  It's a clever sleight of hand.  People think they are paying into something they will draw on later - as you said, "like a bank".  But it's not.



That is a lie you have been sold.



The income tax and NIC (they're the same really) that you paid when you were working was paid straight out to pensioners at the time.



When you get paid your pension, that money will be coming from those paying taxes now. As the proportion of pensioners is climbing (as the boomers hit retirement) pension costs are soaring.  That have near doubled since the mid '00.



The ratio of no workers to workers is getting worse, not because of unemployed people, but because there are more and more old people for each worker.



Pensions are a drain in the treasury just as unemployment, defense, healthcare etc are.



As I showed, they are a bigger drain than all the welfare (housing, unemployment child benefit, sick benefit) put together.



I'm not saying pensions aren't deserved or aren't a good thing.  I'm just pointing out that all the usual targets for saving - the unemployed, the sick etc aren't a big a segment of the spending as pensioners and therefore aren't going to be effective in reducing spending.



For example, you could cut all unemployment benefits  (the dole) and that would be only cut 10% of the deficit.

[BeElBeeBub]

You show me a model that says we will be worse off that is based on zero tariffs with the above countries! [/B]... <snip>...All the models that have been purported are based on no addition trade deals as far as I am aware, let's see this model of yours.

Ok!  Here's one.



The government's own November 2018 report forecast a GDP loss (compared to no Brexit) of 4-6% for an FTA type arrangement (that is roughly where BJ is claiming to be aiming for).



When it comes to assumptions about FTAs it assumes this (emphasis mine)

UK-Rest of World trade: assumptions

48. The analysis assumes that all EU trade agreements with third countries are transitioned in their current states to UK-specific arrangements, including those EU agreements that are provisionally applied or agreed but not yet ratified. Therefore, the modelling does not capture any potential short run changes in the UK's trading relationships with these countries as a result of the UK leaving the EU.



49. In keeping with the Government's ambitious free trade agenda, the analysis also assumes that, in the long run, the UK secures new trade agreements with international partners. <Snip>



50. The analysis assumes an ambitious scenario in which tariffs between the UK and potential third-country trade agreement partners are eliminated by FTAs following EU exit, under all modelled scenarios. For new trade partners, all tariffs are set to zero,

The footnote to para 49 lists the countries



United States

Australia

New Zealand

Malaysia

Brunei

China

India

Mercosur (Brazil, Argentina, Paraguay and Uruguay)

Gulf-Cooperation Council (UAE, Saudi Arabia, Oman, Qatar, Kuwait and Bahrain).



So there you go, a comprehensive forecast showing we will be worse off despite assuming zero tariffs FTAs with various countries

They make up around 3 billion people and you say that is worth more that trade with 430 million people?

yes, for two reasons



1) with the exception of the US they are generally much poorer than the EU.  India may be 1bn people but its economy is the size of France.



2) they are all much further away than the EU27



Who is a better market for our goods? A country next door with an average wage €28k or a country 4,000 miles away with an average salary of $4k?

[Churchill]

Missing the point somewhat.



How can you decry economic forecast that Brexit is bad for the economy with "you can't make predictions" and at the same time say "we predict Labour's policies will be bad for the economy"?

Fiscal experts analyse constantly what our Government is doing and our economy, they also look at all the major parties manifestos and how each one may impact on our financial institutions, and businesses based in the UK on the run up to every GE, their verdict as I understanding on Labours spending and borrowing plans is not good to say the least for our economy.



Bottom line is they think if Labour wins it will be an economic nightmare for the UK, even if Corbyn is dumped for GE which is a possibilty if McDonnell or another far left member of the party takes over it could be an even bigger disaster for the UK

[Nick]

This is exactly my point.  You say it is obvious that raising £80bn through higher corp & upper income tax rates doesn't compute.



yet you also say it is impossible to know the effects of making trade with our biggest partner harder than it is now.



You say "we don't know what deals will or won't be in place", but the brexit modelling assumed zero tariff trade deals with the US, China, India, Australia, NZ,Canada and a bunch of others. They basically assumed the very best possible outcome.  Any real outcome will necessarily be worse than that.



So, again, why should we believe the forecasts of Labour's policies and not of Brexit?

You show me a model that says we will be worse off that is based on zero tariffs with the above countries! They make up around 3 billion people and you say that is worth more that trade with 430 million people? All the models that have been purported are based on no addition trade deals as far as I am aware, let's see this model of yours. As for the Labour manifesto, a blind man can see the holes in it.  I think Diane Abacus must have done it.

You know who the biggest recipients of state benefits are?  Pensioners.  



Old age pensions cost around £120bn a year. by definition you must be a pensioner to get that.  None of that is spent on non pensioners



In contrast unemployment benefit is £1.7bn.



Even if you lump in all the other welfare spending like housing, nursing care etc - you still only get to £60bn.  That's half what we spend on pensioners.



Before you get all righteous - "oh they paid their taxes!" or "so they should just die should they?!".  I'm not saying that at all.  If fully support providing for the elderly.  

And yes, pensions in the vast majority of cases are not benefits. I've paid my full 35 years NIC's, getting my contribution back is not a benefit, same as getting your money back from the bank is not a benefit.

But when we start kicking off about all the "WKD supping dolites" - you need to understand, they are a drop in the ocean of our spending.  You could cut every single other benefit from the budget and still have not cut as much as we spend on pensions. Whilst annoying, they are not the problem.  

These people have worked their whole lives in most cases. Pensions are not benefits.

I have absolutely no love for Corbyn but your figures aren't very convincing.



First, his net worth, by definition includes his properties.  Adding the value of his properties to his net worth is as nonsensical as counting 19,000 nurses you hope to persuade not to leave the NHS as new nurses.  So, yeah he probably is worth £3m.



And as for the "he earned 1.5million from his salary over the last 30 years!", that's an average of £50k a year.  Yes above average, but not excessively so given he's been an MP.  



Tot up how much you earned over 30 or so years and see what you get.  Even if you were on the average wage for 30 years, you'd be around the £500k mark.



So, wow! Mr Corbyn has earned an MPs salary and owns a house in London.  Have you seen his "£1m" house?  It's a 70's terrace in his constituency.



There are many valid reasons not to like Corbyn but he is far closer to the average person than the likes of Johnson, JRM, Farage and all the other "champions of the working man".

For a start off, his houses might not be in the net figure, we don't know how much mortgage he has on them. Notice that I said them as he owns 2, and this is the man shouting for second homes to be taxed, for the many 😂



As for his salary, he has apparently taken £3 million out of the state in wages and expenses, he was also brought up in a 7 bedroom Manor House, for the many 😆.



Johnson and May are only worth half what Corbyn is, as for Blair, he is in the £35 million zone. Good old working class Labour MP's, at least the Tories don't pretend to be something they're not.



Diane Abacus: £275K a year and a £1 million pound house in Hackney



Emily Thornberry: £4.7 million pounds of houses in London, salary....Does it really matter?



Need I go on, these are the champions of the working class, ready to hit the rich if they dare to own 2 homes or earn about 80K.

[BeElBeeBub]

Economic forecasts are inaccurate when you have nothing to gauge it against, fortunately we have a dearth of data on how Labour run the economy, or run it into the ground.



When someone says they are going to generate £80 billion by raising Corporation tax and putting Income tax up for the rich the economic sound of mind can see that it doesn't compute. This is what the IFS is eluding to, very different from predicting an economy based on Brexit when they don't know what deals will or won't be in place.

This is exactly my point.  You say it is obvious that raising £80bn through higher corp & upper income tax rates doesn't compute.



yet you also say it is impossible to know the effects of making trade with our biggest partner harder than it is now.



You say "we don't know what deals will or won't be in place", but the brexit modelling assumed zero tariff trade deals with the US, China, India, Australia, NZ,Canada and a bunch of others. They basically assumed the very best possible outcome.  Any real outcome will necessarily be worse than that.



So, again, why should we believe the forecasts of Labour's policies and not of Brexit?

I love your what you think a fairer society is, kick the ones that graft their taters off and give it to the WKD supping dolites.

My fair society is if you get off your arse and work, you reap the rewards and get to keep most of it, paying your way and a little bit more for those that cant. Not those that won't.

You know who the biggest recipients of state benefits are?  Pensioners.  



Old age pensions cost around £120bn a year. by definition you must be a pensioner to get that.  None of that is spent on non pensioners



In contrast unemployment benefit is £1.7bn.



Even if you lump in all the other welfare spending like housing, nursing care etc - you still only get to £60bn.  That's half what we spend on pensioners.



Before you get all righteous - "oh they paid their taxes!" or "so they should just die should they?!".  I'm not saying that at all.  If fully support providing for the elderly.  



But when we start kicking off about all the "WKD supping dolites" - you need to understand, they are a drop in the ocean of our spending.  You could cut every single other benefit from the budget and still have not cut as much as we spend on pensions. Whilst annoying, they are not the problem.  

Jeremy Corbyn has a net worth of £3 million plus he has 2 properties in £1 million range so he's worth roughly £5 million. In the last 30 years he will have earned around £1.5 million from his salary. Something not quite right there is there? Looks like commy Corbyn speaks with forked tongue.



He is also due to pick up a £1.6 million pension!!

I have absolutely no love for Corbyn but your figures aren't very convincing.



First, his net worth, by definition includes his properties.  Adding the value of his properties to his net worth is as nonsensical as counting 19,000 nurses you hope to persuade not to leave the NHS as new nurses.  So, yeah he probably is worth £3m.



And as for the "he earned 1.5million from his salary over the last 30 years!", that's an average of £50k a year.  Yes above average, but not excessively so given he's been an MP.  



Tot up how much you earned over 30 or so years and see what you get.  Even if you were on the average wage for 30 years, you'd be around the £500k mark.



So, wow! Mr Corbyn has earned an MPs salary and owns a house in London.  Have you seen his "£1m" house?  It's a 70's terrace in his constituency.



There are many valid reasons not to like Corbyn but he is far closer to the average person than the likes of Johnson, JRM, Farage and all the other "champions of the working man".