Europe III: April F-EU-Ls

[Dogg Thang]

Remember back when SF made a poll some time ago now on what we thought the effects of Brexit would be? It was early days and I think many of us voted for it being bad in the short term but you’d build yourself back up. What has just struck me as weird is that I’m not hearing that pushed as being the way it could work out. Is that not weird? Even from the Brexit camp. It feels like that would be the best sales tactic right now: yes it will get bad but then it will get better and we can do it on our own terms. That way when it does go bad, you could point to it and say it is just like you predicted and it’s all going to be okay. It requires a little fudging as there isn’t really such thing as your own terms unless you’re self-sufficient but the idea still seems to be valid and it could still play out that way.

And yet almost nobody is saying: yeah it could be bad but it will get better and isn’t that cool? It seems to have turned into: it’s being done wrong and May can’t fix it and it needs to be done better or we’re all in trouble.

[gIzzE]

Thing is gLzzE a lot of your problems come from the fact that you are paying what you should while larger company's can pretty much do what they want under the current system, how is it a fair system where the little guy has to play everything buy the book while amazon can run tax avoidance schemes and pay virtually nothing of what it owes in UK corporation tax.

Nobody currently in government is fighting your corner in fact the Torry government has caused a lot of the problems you mention.

Rents are high because land is at a premium. It's at a premium because of the cost of housing. If you remember the Tory's sold of all the council housing, We have also seen a massive amount of property used as investment as apposed to housing too.

Your energy bills are high because we have our infrastructure run for profit by private company's. Your rates are high because councils have no money due to government cuts brought in during austerity.

You have been had with a promise of strong and stable when the only thing strong and stable in the UK is the top tier of governments bank balance's. Until I see the current government prioritize the people their supposed to be looking after over their own positions and their own bank balances i will continue to appose them. how else can you explain a tax cut for the richest in society while having one of the worst child and pensioner poverty rates in over 30 years.

I'm in total agreement with you.

The problem is, the current Labour government are going about it the wrong way, what they are proposing would do more damage, and ultimately hurt those that they are trying to protect the most.

Putting up wages to £10 an hour sounds great, the reality is for a 45 hour week that puts the staring wage at £23,400 a year.
If I am paying someone that will I take on the 16 year old and train them up for 2 years, teaching them how to buy, sell, merchandise, do invoicing, wages etc. etc. or will I simply take on someone who has already had experience who can hit the ground running and make my business more efficient and justify that wage?

Also, out of my 6 staff, my business couldn't cope with a blanket wage of £23400 a year across the board, so I guess we would have to lose some hours or a member of staff to be able to keep going.

Then we have corporation tax, raise it to 28% again? I would be left to pay this while the larger corporations who already have divisions overseas would simply move large parts of their infrastucture overseas again and avoid paying more tax.
The problem with corporation tax is it is often paid on profits you will never realise. By that I mean all my profit is sat in the left over stock, the problem with that is if it hasn't sold there is a reason, it is the sizes or the styles people don't want. So it is OK to say you have made £20,000 profit you owe us £5600 in tax, but that stock is probably going to see £5-10k in cash, and probably over the next 1-2 years. so you end of paying tax on a profit you haven't really earned.


We need to see a flat rate tax on turnover from the overseas corporations that trade in the UK, doesn't have to be much, 5% flat would be ample, but that would have a double effect, it would mean they can't hide profits overseas and it means they can't sell at a loss putting businesses and jobs across the UK at risk.

They wouldn't like it and they would threaten to pull out of the UK, but the reality is the UK is a massive market that spends well above many other nations and they all want a slice of that pie. There would be lots of moaning and groaning but they wouldn't leave, and we would see a huge increase in tax revenues compared to what we see now.


Every government is **** scared of rocking the boat and see revenue drop, but we need to do something, the tax avoidance from the biggest overseas corporations would pay for our NHS, Police and Education shortfalls alone.

I want a more socialist government in charge, but not this government, their polices are misguided and show a true lack of understanding of just how corporations think and what that are prepared to do to get what they want. Their policies can't be argued with, they are 'nice' policies, but they effects of them need to be thought about long and hard and what we could end up with. Same with the super rich who earn £100's thousands or even millions a year, if you push their tax rate too high they will use the avoidance schemes available. But yeah, over £150k there should be a higher rate again.
But should the guy who earns £46k a year be included in that? Many who are on the 22% rate seem to think so, until they get a little older in life and suddenly have a mortgage, 2 kids, a pension and a wife who is now only working part time.
That is the issue I have with it.
I know lots of my friends are now in that bracket, but they are not rich. £46k a year brings you home £2900 a month, pay the mortgage, the pension and do the food shop and most are left with £900 or so to pay for transport, clothes and school uniforms.
Should these people be paying more? 80% of workers are not in that bracket so argue yeah, but the reality is life is not necessarily peachy when you get to the 40% tax bracket, it is often when you are at the stage in life when you need to think about paying the mortgage down and making sure you have a pension up and running.
£75000 a year only brings you in just over £4k a month, a lot of people presume someone on £75k a year is rolling in it, everyone I know on that figure works in London, they either have £2k mortgages or they have a £15k commuter ticket.

I'm not dismissing tax increases, but I think we need to be realistic where we set the higher rate, sure maybe 45% at £100k and 50% above £150k, but be careful aiming it at those that earn a little bit more than they did when they were in their 20s and and still had 45 years to pay off the mortgage and get their pension in order. My outgoings in my mid 40s are a hell of a lot higher than they were in my mid 30s and my debt in a lot lower. It is a reality check.


But I agree, the current Tories are no good for this country, I just think the current labour party would do even more damage, even with the best intentions to make the country better.

[Lebowski]

Well written and some good points gIzzE, i don't agree with all you've said as i do think things can be better if we look after all sectors of society. I think your looking at it under current systems and looking at it from a very personal point of view though, surely lower rates, lower energy bills, and lower rents would facilitate being able to give your workers a better wage. To lower these bills we only need to go back to my points on social housing and utility's run for the country not for shareholders.

[fishbowlhead]

All excellent points gizze.

The government is pricing employment out the market for small businesses, it’s simply not worth it now days.

As I’m in manufacturing, the only thing I’m going to be looking at now and in the future is more automation, not new jobs. If the government makes it more cost effective to employ then that could change down the road, but it won’t.

Obviously not every business can do that though, so what DO you do? Well in gizze’s case as he said, pack it in and work for someone else, let them handle all the s**t, I wouldn’t blame him in the least, that has a nock on to his employees as well as they loose their jobs too, so it affects the whole ladder.

Gizze isn’t the only one in that position either, any small business owners running a store or shop will be counting their beans and doing the math right now weighing up whether it’s all worth it or not, I’m guessing in most cases the answer will be no.

[Dogg Thang]

And yet Lebowski nailed the real issue in the first line of his post on the previous page. I have owned my own tiny business for the last five years and have had to scale up and harshly down as money went down. Governments need to look after small business, employees, working and normal people or it all breaks or, more likely, only works for rich people. This includes making large corporations pay their taxes, lots of them, and it also includes making people like me pay the people who work for them a decent living wage. Because otherwise only people with rich parents can afford to take an internship to get a foot in the door. Anyone who is a struggling small business owner and thinks it might get better under rampant capitalism rather than under people who want to look after people is fooling themselves. Small business owners are the pawns paying taxes the rich aren't and they will get taken off the board.

[EvilBoris]

Yes and I think good examples of that are companies like Boots, Starbucks and Topshop.
I think Boots for example has paid less in corperation tax than a single of it's lowests paid employees.

A business that literally makes all of it's money in the UK.

Likewise Starbucks, taxing them fairly isn't going to cause them to up and leave, they make money from being here, legally dodging taxes using ways that the conservative government permit.
Those taxes not being paid inevitably ending up back in the pockets of investors rather than being used to improve social housing or keep a local library open.

[Neon Ignition]

I suppose there's the factor of how many of these business owners are also... political 'donator's' and so MP's don't want to rock any boats

[Lebowski]

Mays husband works at Capital Group which helps many large firms with their tax affairs (including Amazon), id say she has a vested interest in not putting her own husband out of a job

Then their is the issue of DMG and News Corp UK they pretty much run the uk media and are both massive tax avoider's you'd have to be pretty untouchable to go after them which May isn't. The last person not in bed with the uk media was Brown and he was blamed by the uk press for the global financial meltdown, if only he hadn't okayed all that American sub prime lending maybe they would have left him alone.

[EvilBoris]

It's like George Osborne's best man being a shareholder in the firm that he allowed the Post Office to be sold to....

All above board of course, I'm sure they made sure that an expensive lawyer was brought in to make sure he couldn't get in trouble for making millions.

It's all really screwed up, forunately not on the same level as the US (which doesn't really have any major left wing parties, the Democrats are about on a par with our Conservatives), but even so we have to be careful and vocal that it doesn't happen.
I understand that there is a need to compete in a global economic environment, but you can't help but feel that we could do it much better and help each other in a more effective way.
I personally don't feel that throwing away all those huge cost saving measures that we had access to as part of the EU is the best way to do that, certainly not in the way that we have.

[gIzzE]

I think your looking at it under current systems and looking at it from a very personal point of view though, surely lower rates, lower energy bills, and lower rents would facilitate being able to give your workers a better wage. To lower these bills we only need to go back to my points on social housing and utility's run for the country not for shareholders.

I can only look at it based on the current system, that is the main problem, we have let things spiral out of control. We can't now change things overnight, change it too rapidly and society will suffer for it.


Property prices are one of the real issues we have, it distorts the cost of living and the amount we need as a reasonable wage.

The two main issues are overseas investors and the fact that so much of the UKs wealth is built around overvalued asset books.
That is why we so so many properties sat empty, it is far better for many a pension fund to sit with properties empty than it is to rent them out for their true worth. That is a real problem.

I will post more later, need to finish up at work.

[QualityChimp]

I work for a company that designs, makes and exports its products right here in the UK.
Not many of them left, eh?

We were bought by a French company about 5 years ago, but remain relatively unaltered.

We had a company brief last week and in the questions afterwards somebody asked the French MD what would happen with a hard Brexit.
He said he didn't know (who does?!), but explained that we would pay 10% more to import raw materials the the UK and pay 10% more to export the product, so it would make more sense to make that product in the French factory.

Brexit seems pretty real to me and I can see the owners moving production bit-by-bit over to our factories in the EU and finally closing this head office.

Like the Sunderland Nissan line manager that voted for Brexit, despite Nissan explaining the consequences and urging staff to vote Remain, a few people still seemed confused that their voting Leave may make them redundant.

I'm currently looking into what skillsets I need to learn to make myself more attractive to employers if/when this place closes/relocates and I'm left competing with lots of other people who also have lost their jobs for the same reason.

[fishbowlhead]

I wonder if we get to keep the QE2 bridge if we leave the EU? Or I suppose the French can take it home.

[gIzzE]

The government is pricing employment out the market for small businesses, it’s simply not worth it now days..

Where we have to be really careful is pricing employment out of the larger businesses too.

A very good friend of mine, one of my best mates, works for a company that can replace workers with a fully automated system within the supermarket sector.

His system would be less than the current wage bill to implement for all the big supermarkets, and would be paid for within 6 years, at which point the said companies would be saving around 80% over current exposure compared with today.
Wages for most of them is their biggest cost, so that is extremely appealing for them.
The only thing that is stopping them from doing it is morals.
It really is as simple as that.
UK retail is the biggest private sector employer with over 1/3 being employed by supermarkets.

Therefore, we have to be careful that these employers don't simply say "Enough is enough" and put these systems in place.
There is no financial reason to keep employing people in many sectors of industry, it really does come down to a sense of responsibility these days, so we need to be very careful.

[fishbowlhead]

Where we have to be really careful is pricing employment out of the larger businesses too.

A very good friend of mine, one of my best mates, works for a company that can replace workers with a fully automated system within the supermarket sector.

His system would be less than the current wage bill to implement for all the big supermarkets, and would be paid for within 6 years, at which point the said companies would be saving around 80% over current exposure compared with today.
Wages for most of them is their biggest cost, so that is extremely appealing for them.
The only thing that is stopping them from doing it is morals.
It really is as simple as that.
UK retail is the biggest private sector employer with over 1/3 being employed by supermarkets.

Therefore, we have to be careful that these employers don't simply say "Enough is enough" and put these systems in place.
There is no financial reason to keep employing people in many sectors of industry, it really does come down to a sense of responsibility these days, so we need to be very careful.

For retail employers it certainly presents a huge moral issue and quandary going forward, how to balance the evolution of automation with keeping people in needed jobs, but also balancing the books of the company that employs them to keep them going, so they can keep people in jobs.

I have no answer to it personally, my expertise lye in manufacturing where automation is a given unavoidable fact. I’m now totally hard wired to improve, evolve & cut out processes everywhere I look.

[Dogg Thang]

Corporations exist as sociopaths. People can be removed if they do something that inhibits their ability to make more profit. They will not self-regulate. They never have and they never will.