the economy.

[Mike D]

Big Business has got its balls back then. Wish they would pay some fucking tax

Our Govt is probably giving them grants to do it too.


And so the cycle continues.....Browns statements of eradicating boom and bust were foolish as its going to happen again soon is it not pal.

Of course our government is giving away grants in form of corporation cuts, which has costing this country to the tune of £5 billion per annum http://www.ft.com/cms/s/0/c0afbfc4-02af-11e4-a68d-00144feab7de.html#axzz3FY8ZKmIp rising to £8 billion in 2015-16 and rising.

 

[roaminblue]

Big Business has got its balls back then. Wish they would pay some fucking tax

Our Govt is probably giving them grants to do it too.


And so the cycle continues.....Browns statements of eradicating boom and bust were foolish as its going to happen again soon is it not pal.

Of course our government is giving away grants in form of corporation cuts, which has costing this country to the tune of £5 billion per annum http://www.ft.com/cms/s/0/c0afbfc4-02af-11e4-a68d-00144feab7de.html#axzz3FY8ZKmIp rising to £8 billion in 2015-16 and rising.

Well, tax cuts aren't the same as a grant, but I take your point.

This is in keeping with their ideology though. A large portion of their cut was around capex. This is designed to stimulate investment and create projects, hopefully jobs etc

 

[Mike D]

Of course our government is giving away grants in form of corporation cuts, which has costing this country to the tune of £5 billion per annum http://www.ft.com/cms/s/0/c0afbfc4-02af-11e4-a68d-00144feab7de.html#axzz3FY8ZKmIp rising to £8 billion in 2015-16 and rising.

Well, tax cuts aren't the same as a grant, but I take your point.

This is in keeping with their ideology though. A large portion of their cut was around capex. This is designed to stimulate investment and create projects, hopefully jobs etc

The theory was that by cutting tax you stimulate growth through business investing more and thus the tax cuts pay for themselves. Where in actual fact we have had some stimulation in growth but not enough to compensate the amounts lost in revenue from corporation tax. The logical thing to do would be to raise corporation to the point where you don't hurt growth but you don't lose any revenue from corporation (cost neutral).

Its a bit like this Bill is having a hard time in his carpet shop the economy is doing bad and no one can afford to buy carpets.

Bill decides to cut his prices but he only sells a few more carpets.

So he cuts it again and again until he's selling more carpets than he was a few years ago and Bill is pleased with himself.

His accountant Mike comes in says Bill if you keep selling these carpets at this low price you won't be able to pay your bills basically you're fucked Bill,

What does Bill do the carpets are flying out (because he's practically giving them away) but he's not making enough to cover the bills on shop, his 4 holidays a year,his holiday homes, and of course his beloved jag?

 

[Bill]

its kicked on since i started this thread, we have got busier and busier. we are a year on and its been great, how long it lasts nobody knows, might get even better. i do know one thing, if there is a change of government in may it will all be undone in a matter of months.

i'll never take this for granted.

Looking at the Economy from your own perspective is of course your right pal.


But taking into account the effects of the economy on many of potential potential customers of yours is mine.


If the economy as it is doing is rewarding the few SMEs like yours as it is they will never reach their full potential as the poverty of your potential customers is a barrier to your growth.

Now you maybe happy with your lot at the moment, but in a fairer more equal society you could grow your business muh more.

define fairer and more equal. I see it as you pay in and you take out. yes?

 

[Prestwich_Blue]

Of course our government is giving away grants in form of corporation cuts, which has costing this country to the tune of £5 billion per annum http://www.ft.com/cms/s/0/c0afbfc4-02af-11e4-a68d-00144feab7de.html#axzz3FY8ZKmIp rising to £8 billion in 2015-16 and rising.

Well, tax cuts aren't the same as a grant, but I take your point.

This is in keeping with their ideology though. A large portion of their cut was around capex. This is designed to stimulate investment and create projects, hopefully jobs etc

The economy has created plenty of jobs but that's not the only thing it needs to do. Creating the conditions for business expansion is just one part of it, plus it depends on the context of that expansion. Supply-side economics says that an increase in output feeds through to higher wages and therefore higher consumer demand. This in turn feeds further industrial expansion.

However our economy hasn't responded in the 'normal' way that it was supposed to in a recession. That would involve wages staying roughly static but the numbers employed falling, so that the cost of production fell. This time, the workforce were far more flexible and a large part of the fall in production costs came from a reduction in wages, leading to less unemployment than might have been expected.

That meant there was a lot of slack in the labour force and the growth we've seen is mainly just about taking up that slack. That's not resulting in higher wages plus the squeeze on public sector employment means that growth in output isn't being matched by growth in consumer demand. We'll only see truly sustainable growth when production is really expanding, rather than just taking up the excess capacity in the workforce.

As an analogy, imagine a class which has gone down from a maximum of 30 pupils to 20. The teacher isn't at full capacity and can cope quite easily. Numbers start to go up and the teacher gets stretched more until numbers hit 30 again, when they're at full capacity but it's still only one teacher. When numbers get to 35 or more, the class is split and now there's two teachers.

In the first phase, the school is growing but not creating extra employment. In the second phase, it is. We're still in the first phase.

 

[shootmeifipost10k]

National debt after last government 800 billion

Present debt after so called austerity drives and an upturn in the economy 1300 billion and growing at a rate of about 5 thousand pounds per second.

Soon enough the shite is going to hit the fan.

 

[metalblue]

Of course our government is giving away grants in form of corporation cuts, which has costing this country to the tune of £5 billion per annum http://www.ft.com/cms/s/0/c0afbfc4-02af-11e4-a68d-00144feab7de.html#axzz3FY8ZKmIp rising to £8 billion in 2015-16 and rising.

Well, tax cuts aren't the same as a grant, but I take your point.

This is in keeping with their ideology though. A large portion of their cut was around capex. This is designed to stimulate investment and create projects, hopefully jobs etc

The theory was that by cutting tax you stimulate growth through business investing more and thus the tax cuts pay for themselves. Where in actual fact we have had some stimulation in growth but not enough to compensate the amounts lost in revenue from corporation tax. The logical thing to do would be to raise corporation to the point where you don't hurt growth but you don't lose any revenue from corporation (cost neutral).

Its a bit like this Bill is having a hard time in his carpet shop the economy is doing bad and no one can afford to buy carpets.

Bill decides to cut his prices but he only sells a few more carpets.

So he cuts it again and again until he's selling more carpets than he was a few years ago and Bill is pleased with himself.

His accountant Mike comes in says Bill if you keep selling these carpets at this low price you won't be able to pay your bills basically you're fucked Bill,

What does Bill do the carpets are flying out (because he's practically giving them away) but he's not making enough to cover the bills on shop, his 4 holidays a year,his holiday homes, and of course his beloved jag?

Your analogy is wrong mate.

Bill is selling carpets that no-one can afford. Bill's only sells hand made carpets and his supplier is based in London and not the cheapest around so Bill looks for a cheaper supplier for the same quality. Bill scans the globe for a new supplier and comes across one in China who can provide the same carpet, delivered for 20% cheaper than the guy in London. Bill buys his carpets from China, reduces his costs and has a full order book, the carpet maker in London goes out of business. Bills profit is uneffected. Now lets suppose Sunderland is classed as a special trade area (or whatever the term is where government tries to encourage business to less afluent parts of the country) and benefits from a reduced corporation tax because of this the carpet maker in London now sets up in Sunderland and they are able to supply carpets to Bill for the same price as he can get them from China so Bill changes supplier back to his original without effecting his cost or profit base. The carpet maker in Sunderland now employs more people, they are skilled, they are able to compete internationally, this provides inflows of foreign cash to the economy (vital), they contribute to the economy. Put simply 20% of £n is better than a 100% of £0.

That's what they use corporation tax breaks for. Obviously having a low standard corporation tax encourages business to setup there, we saw that with Ireland, but it is using it to retain and develop skilled staff in this country where it really shines.

 

[Bill]

Bills just works his tripe off and prices the carpets as best he can. he actually has little cash in his bin after paying everyone but at least he's still around which during the last government was well iffy. the only good thing is if it goes tits up again he could sell the shop and work from home. or get a job which would be well funny.

"where's Bill" er he's off sick again gaffer, always is between august and may :)

 

[Prestwich_Blue]

Actually, Bill's shop is a better analogy. A few years ago, before the recession, let's say he employs 4 lads full time as the business is busy enough for him to need that. Those lads spend money on stuff like cars, white goods, going out, etc.

Then times get hard and the business can't support 4 lads full time. So Bill says, "Look guys, I can only justify one other person full time because we aren't doing enough." In the past, his options would have been to shut down completely or sack three of them. That means 3 to 5 people on the dole. But this time he says "If three of you want to go self employed then I'll throw whatever work I get your way but there's no guarantees." Now, no one is unemployed but they're all on less money. Then business picks up and instead of working 40% of the time they're up to 75%. Bill's doing better and so are they but not as good as before the recession so they're still not spending as much.
Eventually they're picking up work elsewhere but business is so good that Bill needs them all the time. So he either pays them more than others are offering or takes them on as employees again. Then their spending gets back to pre-recession levels.

I think we're about the 75/80% level at the moment.

 

[smudgedj]

Should I worry more about Ebola or about the rise of schoolboy socialism?