A long established truism of the internet is that typing 'FACT' at the end of a statement doesn't make it any truer than if you hadn't.

Let's look at your statements in order:

1) Yes they did. Quite correct. Now show us any time where any party was in power where this hasn't happened. You can't - it's how governments work. I'm not saying that's a correct way of working, just how it is.
2) Didn't they? So education and health - two large factors in the future financial health of a country - weren't improved while Labour were in power? Really? You may not see this as 'fixing the roof' (as your overworked cliche has it), but it is a major contribution to ensuring the future wellbeing of a nation. There is more to 'fixing the roof' than cutting back the defecit, no matter what your Lords and Masters may be telling you.
3) Brown claimed to have ended the [uTory[/u 'boom and bust' policies, i.e. the Labour party wouldn't be following them. I'm sure even someone of your limited political knowledge will appreciate that he can do nothing about Conservative policy when they come into power.
4) Yes, a Labour minister apparently did leave a note saying there was no money left. Are you suggesting that this was down to anything other than propping up banks that had failed in 2008? Without that, as shown by Sally Cinnamon, there is a more than good chance that the economy would have continued along the same sort of small deficit that it had historically run for ever.
As a continuation of that, if there was 'no money' left then, then there is 'minus money' left now due to the failing economic principles being used by the current government. This, as you would say, is a fact. Go and look it up.


Incidentally, well done on finding the Telegraph link showing what the benefit of hindsight are.

What is interesting about this "they didn't mend the roof when the sun is shining" argument is the implication that if the UK had been running a budget surplus going into 2008, we would have been OK. However that is exactly what Ireland and Spain were doing, and they ended up in a much worse mess than us: www.imf.org/external/pubs/ft/weo ... P&grp=0&a= Ireland was running surpluses in most years between 1997 and 2007 in fact it was Ireland with its low corporation tax and budget surpluses that George Osborne said (when he was in Opposition) was the economic model the UK should be following. And yet a small surplus in 2008 became a deficit of 30% of GDP in 2010 (that puts ours into perspective). Spain ended up with similar deficit levels to us after the crisis despite running a surplus of around 2% in 2007. And unemployment and output were much worse in Ireland and Spain than the UK.

What is interesting about this "they didn't mend the roof when the sun is shining" argument is the implication that if the UK had been running a budget surplus going into 2008, we would have been OK. However that is exactly what Ireland and Spain were doing, and they ended up in a much worse mess than us: www.imf.org/external/pubs/ft/weo ... P&grp=0&a= Ireland was running surpluses in most years between 1997 and 2007 in fact it was Ireland with its low corporation tax and budget surpluses that George Osborne said (when he was in Opposition) was the economic model the UK should be following. And yet a small surplus in 2008 became a deficit of 30% of GDP in 2010 (that puts ours into perspective). Spain ended up with similar deficit levels to us after the crisis despite running a surplus of around 2% in 2007. And unemployment and output were much worse in Ireland and Spain than the UK.

A far better way would be the introduction of Land Value Taxation. Try offshoring a plot of land

Quote ="sally cinnamon"What is interesting about this "they didn't mend the roof when the sun is shining" argument is the implication that if the UK had been running a budget surplus going into 2008, we would have been OK. However that is exactly what Ireland and Spain were doing, and they ended up in a much worse mess than us: www.imf.org/external/pubs/ft/weo ... P&grp=0&a= Ireland was running surpluses in most years between 1997 and 2007 in fact it was Ireland with its low corporation tax and budget surpluses that George Osborne said (when he was in Opposition) was the economic model the UK should be following. And yet a small surplus in 2008 became a deficit of 30% of GDP in 2010 (that puts ours into perspective). Spain ended up with similar deficit levels to us after the crisis despite running a surplus of around 2% in 2007. And unemployment and output were much worse in Ireland and Spain than the UK.'" Now that's fascinating. Why did that happen, Sally?

Quote ="sally cinnamon"What is interesting about this "they didn't mend the roof when the sun is shining" argument is the implication that if the UK had been running a budget surplus going into 2008, we would have been OK. However that is exactly what Ireland and Spain were doing, and they ended up in a much worse mess than us: www.imf.org/external/pubs/ft/weo ... P&grp=0&a= Ireland was running surpluses in most years between 1997 and 2007 in fact it was Ireland with its low corporation tax and budget surpluses that George Osborne said (when he was in Opposition) was the economic model the UK should be following. And yet a small surplus in 2008 became a deficit of 30% of GDP in 2010 (that puts ours into perspective). Spain ended up with similar deficit levels to us after the crisis despite running a surplus of around 2% in 2007. And unemployment and output were much worse in Ireland and Spain than the UK.'" Now that's fascinating. Why did that happen, Sally?

We're talking about corporation tax, not individuals income tax.

As a small business owner there is very little leeway for you to avoid paying corporation tax if you intend to ever make a profit, an accountant may have a few tweaks, knobs and dials here and there that he can pull and convince you that you are better off even after paying his fees but in reality if you're running a single independant coffee shop in the centre of any town you simply don't have the ability to shuffle profits away to foreign owned subsiduries or to offshore head offices, you could try just taking cash out of the till every day and pretending that it never entered your shop but you'd have an HMRC inspector down on you pretty smartish when your profit margin wasn't matching what they consider to be the norm in your line of business.

Fact of the matter is that one of the main reasons that I stopped being a small business owner after 24 years of trading was the slow realisation that you can't beat the tax system on your own and if you think you can then they are quite prepared to use disproportionate resources to reclaim what they estimate to be a liability and its up to you to prove it isn't - not quite the same way that they deal with large corporations.

Just read this thread title as 'How do cufflinks save economies?' Probably more effectively than cutbacks, actually. Just like Adam Smith wrote; On The Division Of Labour In Cufflink Manufacture

The money will be paid, that much is true, but very clearly before Starbucks (or anyone) sets on an employee they know that the cost of the employee comprises items including their gross salary and including the employer's NIC. Employers' NIC is paid for every employee by every company so the fact Starbucks also has to pay it isn't either earth shattering, or to their credit. It's just how it is. I don't know what point you are making. If it is implying that this somehow gives them a "credit" against corporation tax they do not pay, them I'm sorry, i don't think you have a point at all.


That's just more of the same. Every business which is registered for VAT accounts quarterly for VAT. This "free of charge" thing is just emotive nonsense, Starbucks does not shoulder any unusual burdens in regards to this function, which is plainly just a fact of life if you run a UK business.


I don't believe you are that naive. I am sure you know how it works, the accountancy firms, for huge fees, dream up highly complex and tortuous paths to pass money along, and do this all the time. Of course the tax laws do not "allow" this, in the sense that "Parliament specifically thought of this dodge and did not pass a specific law against it because Parliament positively thought that companies should be allowed to escape corporation tax by using this or that scheme".

The emphasis is in truth entirely reversed. It is, for obvious reasons, totally impossible to legislate in advance to prevent the operation of every tax dodge which has yet to be dreamed up. Far from considering that Parliament "allows" tax dodges the true nuance of meaning is that many such tax dodges are only legal until measures to close the loopholes are put in place. If you want to play semantics and say that in the meantime the tax dodge is "allowed" then knock yourself out, but nobody is accusing Starbucks of illegality, and to do so is to entirely avoid the point of this part of the discussion.


I'm not clamouring for high taxes. If I felt a need to clamour at all in this context then it would simply be for Starbucks to pay standard rates of corporation tax based on a fairly assessed figure which represents the true (and very considerable) profitability of their UK operations.

Sadly, and based on a number of well-publicised cases such as Vodafone and all the rest, I have no confidence that HMRC or indeed HM Government has either the appetite or the capacity for the task of making sure big multinationals pay their fair share. Like the bankers scandals, ultimately it seems people temporarily in charge of the UK shop are exceedingly reluctant to rock any boats, however many billions disappear down the toilet. A cynic might wonder whether something was in it for them.

Official "You Needn't Worry Your Pretty Little Heads, It's All Fine, We're On It, No Really" bullcrap [url=http://www.taxjournal.com/tj/files/article-files/HMRCIssueBriefing_TaxingMultinationals.pdfhere[/url.

An interesting fact emerged yesterday: The "tax simplification tsar" has a total staff of six. Now compare that to the $millions spent by multi nationals on paying tax lawyers and accountants and you soon see how serious this government is in reining in these companies. Add to that the paltry budget alloted to HMRC's lawyers to prosecute recalcitrant companies (usually spent in 1st 3 months) and you get an even clearer picture.

Now compare that to the [url=http://www.telegraph.co.uk/news/uknews/law-and-order/9613296/Benefit-fraud-convictions-rise-after-officials-get-new-powers.html"war on benefit cheats"[/url and the picture becomes even clearer as regards just who this government are really targeting

my suggestion? do bugger all. these things right themselves eventually.

i've listened to many so called experts spout on about what we should or shouldn't do, and so far none of them have been proved 100% right. and i'm sure some of these buggers have a 'working brain', hell, i reckon some even have fancy letters after their names.

i suppose my suggestion is infinitely better than yours though, as it is just that, my suggestion, as opposed to yours which involves standing from the sidelines and spouting some other buggers half baked ideas about magical jobs from the sky!

a mass army of home insulators eh? utterly, utterly laughable. up there with paying people not to rob us.

In the meantime, what words of wisdom and consolation will you offer to people losing their jobs, people finding it impossible to get a job (particularly young people), disabled people finding their benefits ripped away by a bunch of non-medical people making a profit from it – some even killing themselves in despair.

What will you say to them, eh? "do bugger all. these things right themselves eventually"?

1) I didn't suggest we "people not to rob us".

2) And the suggestion of insulation was not mine. As I have explained. I used it here, as it was used by the originator, at the time, as simply an example of what could be possible. This has been pointed out to you. I'm sorry if you found it too difficult to understand.

absolutely none at all. there is no consolation. what would you like me to say to them?
oh, if the basic level of maths i've seen displayed by the young people currently studying a chemistry degree is anything to go by, then i'm not at all shocked they find it nigh on impossible to get a job.
and yes, things do right themselves eventually. or do we never come out of recessions?

what was it you said about cutting benefits will increase crime or something, sound a lot like paying people not to rob us to me. it's one step further that cameron's 'hug a hoodie' nonsense.


of course it wasn't your suggestion, you need a 'working brain' to have one of those, or maybe not when you actually, y'know, think about any consequences. you seemed quite enthusiastic at first, yet now you're starting to distance yourself from it? are you actually a tory policy maker or something?

obviously, you're entirely right if i'm missing all these home insulators swanning round in their bentleys with more work than they can shake a stick at. oh, and doing it for no charge as my parents discovered a couple of weeks ago.

absolutely none at all. there is no consolation. what would you like me to say to them?
oh, if the basic level of maths i've seen displayed by the young people currently studying a chemistry degree is anything to go by, then i'm not at all shocked they find it nigh on impossible to get a job.
and yes, things do right themselves eventually. or do we never come out of recessions?

what was it you said about cutting benefits will increase crime or something, sound a lot like paying people not to rob us to me. it's one step further that cameron's 'hug a hoodie' nonsense.


of course it wasn't your suggestion, you need a 'working brain' to have one of those, or maybe not when you actually, y'know, think about any consequences. you seemed quite enthusiastic at first, yet now you're starting to distance yourself from it? are you actually a tory policy maker or something?

obviously, you're entirely right if i'm missing all these home insulators swanning round in their bentleys with more work than they can shake a stick at. oh, and doing it for no charge as my parents discovered a couple of weeks ago.

On a par with your literacy levels, dear?

You do know that proper nouns exist, for instance?



No, dear. I didn't say that. 'Sounds a lot like' ('sound' requires an 's' at the end! by the way) is not a synonym for 'said'.



Oh dear, oh dear, oh dear.

:2gs142qm


Erm....Labour from 97 till 2001 maybe?

Dear in' H Christ.

Resorting to grammar and spelling attacks when someone challenges your warped views.

Not seen that tactic before.... Oh dear indeed

It looks like even the Irish low corporation tax rate is no guarantee of fair play

[url=http://www.irishexaminer.com/business/starbucks-pays-57m-in-royalties-but--211055.htmlStarbucks pay €35k in taxes since 2005[/url

If someone is going to condemn the standard of other peoples' numeracy/maths, then they should make sure that their own posts are perfect or as near as.

It's that simple.

And it's so good to see you responding in an eloquent and intelligent way to, say, Sally's posts about economics and how governments in general behave.

Well done.

In response to your question about why Ireland and Spain, having run budget surpluses in the run up to 2008, ended up in a worse situation than we did:

Ireland suffered the same problem we did: a bursting property bubble leading to collapsing property prices leading to debt defaults leading to a banking crisis. But with Ireland this was much more magnified due to the size of the property crash and the size of the banking system relative to their small economy. Ireland had succeeded in using its low taxes to attract in foreign investment in the years before the crash but this investment was not going into building the infrastructure and productive capacity of the Irish economy, it was going into property because investors saw this as a way to get quick speculative returns. Of course they knew the bubble would bust but as long as they got out close enough to the turning point of prices they could still make a big gain. This is the how speculation distorts the market - in a free market funds for investment get directed to the projects that have the highest returns, that is the 'efficient' use of resources. But over a short time frame the highest returns may be to jump on a property bandwagon, make gains and sell, and that is not a socially efficient use of funds as it doesn't finance anything productive.

When the property market crashed in Ireland, a lot of banks found they were very exposed to losses because of debtors in the real estate sector that had borrowed to finance large property building/development projects that would now be worthless. When banks become exposed to losses they become very worried about their "liquidity" - ie their cash reserves, because all banks have obligations to savers that they have to meet with cash. Usually any short term cash flow problems can be easily resolved because the banks lend to each other when they know they can use their assets as collateral to the loan (the LIBOR rate is the rate at which banks lend to each other). But when they all fear running out of cash they won't lend to each other so they are reliant on hoarding their cash in fear. When banks make loans, it is cash they lend (as businesses/mortgage borrowers need cash in the account to make purchases) so when they are worried about their cash stocks then they won't lend to anyone and potentially productive businesses can't get funds for investment to start up, or expand, or be helped out through a sticky patch where they have cash flow problems themselves. This is the credit crunch.

The above paragraph is no different to what happened to UK banks, but there is a very significant reason why it's magnified in Ireland compared to the UK: Ireland is in the Euro and the UK isn't. When the downturn hit in the UK, and investors started pulling their money out of property and other falling UK assets, they sell those assets and get paid cash in UK pounds. You can only spend UK pounds in the UK, so either those investors had to use the pounds to purchase other UK assets, or they sold their pounds as foreign exchange and someone else ended up spending those pounds on UK assets. Either way, the overall stock of cash in the UK is unchanged. The stock of cash is important when you have a credit crunch situation where there is a big premium on having cash available, whether you are a business or bank with potential cash flow problems.

In Ireland however, when investors started pulling their money out of property and other falling Irish assets, they sold their assets and got Euros. They didn't have to spend those Euros back in Ireland. They could go off and use them to buy German or French assets instead. So that withdrew money from the Irish economy and meant the overall stock of cash going round was less. That is disastrous in a credit crunch situation.

But also, in the UK the Bank of England can print pounds and it did so to provide banks with more cash. This is what quantitative easing is, the Bank of England offered to buy huge quantities of government bonds from banks and pay for them with cash. So this meant even if banks weren't willing to provide cash for each other, they could always convert their stock of bonds into cash from the Bank of England when they had payments due (think about the practicalities of being a bank in terms of cash flow, if you are Shell's bank, and Shell's corporate tax is due at the end of the month, assuming they pay it(!), you might need to carry out a transaction of several million pounds to HMRC of cash. If you don't have that cash then the bank is insolvent.)

In Ireland, there is no central bank, all Euros are controlled by the European Central Bank and that doesn't just print money at the behest of the Irish government to provide liquidity to its banks. Ireland had to beg the Euro institutions for bail out funds to solve its cash flow issues and these came with many strings attached.

Also being in the Euro meant that Ireland missed out on some of the automatic stabilisers that the UK benefited from. When the UK prints money it pushes down the value of the pound (because pounds are more readily available) and also puts upward pressure on inflation. The depreciating exchange rate increases UK exports as it makes our goods cheaper, and also because inflation drives down the real value of wages, UK businesses become more competitive with foreign rivals relatively quickly which helps our exports rise. In a Eurozone country like Ireland though, the exchange rate of the Euro won't just depend on what's going on in Ireland, so in order to get the same effect on making Irish business more competitive they need to effect quite brutal measures to slash wages - which is what happened in Ireland with workers taking huge pay cuts.

As for the Spanish situation - I don't know enough about it to describe in detail however it was also based on a failure of the banking system and they had the same problems for being in the Euro.

The key points about this all are:
- The reason these countries got into crisis was not because of excess government spending leading up to the crash, it was because of a bursting property bubble and failure of the banking system. The UK got into crisis for the same reason.
- The UK was saved from some of the worst effects because we retain our own currency, Ireland and Spain copped it much worse as they are in the Euro.

Samwire, being a PhD Chemist myself, if the level of chemical knowledge displayed by some of our recent Chemistry graduates is anything to go by then I am also not surprised that they can't get jobs.

A former colleague of mine, having recently been made redundant, went for an interview for a position in a Pharma company. Although he passed the technical interview with flying colours he didn't get the job as his age of 53 and 25 years of experience counted against him in terms of the sort of people HR were trying to recruit. He went for a drink with a couple of the other candidates who went through the selection procedure with him after they had done for the day. These two recent graduates, with good degrees from Russel group universties, did not even know what a Grignard reaction was! Needless to say they didn't get the job either. As a former R & D manager I have found the quality of graduates over the last 10 years to have dropped dramatically. This seems to follow the trend for modular degree courses where students can avoid the difficult areas of the subject.

Quote ="Ajw71" Erm.... www.youtube.com/watch?v=FUY9ewD1Jls 'No return to boom and bust' - Where is the word Tory? .'" OK, I'll give you that, I was going from memory, but the fact remains that you can't blame any government for the state of the economic collapse is 2008, can you? The truth remains that it was an external and almost unforeseen issue that brought the country to it's knees. (I seem to remember one economist going 'this can't last' and getting laughed at for it...) If you want to try and conflte the two, go ahead, but it'll be meaningless.

Quote ="Ajw71" Erm.... www.youtube.com/watch?v=FUY9ewD1Jls 'No return to boom and bust' - Where is the word Tory? .'" OK, I'll give you that, I was going from memory, but the fact remains that you can't blame any government for the state of the economic collapse is 2008, can you? The truth remains that it was an external and almost unforeseen issue that brought the country to it's knees. (I seem to remember one economist going 'this can't last' and getting laughed at for it...) If you want to try and conflte the two, go ahead, but it'll be meaningless.

I was merely challenging your statement that Starbucks pay nothing to HMRC - that you have admitted was incorrect.

The point about lower taxes is simple - these companies will be tax somewhere, perhaps if our tax rates were more attractive they might consider paying more here?

Our big multi-nationals will be doing exactly the same in other countries where taxes are even higher than the UK which means HMRC will receive a bigger chunk. Maybe it is just a case of swings and roundabouts. So if you means tested Starbucks for corporation tax in the UK you would potentially be opening up the opportunity for BP for example to be means tested in another country.

I was merely challenging your statement that Starbucks pay nothing to HMRC - that you have admitted was incorrect.

The point about lower taxes is simple - these companies will be tax somewhere, perhaps if our tax rates were more attractive they might consider paying more here?

Our big multi-nationals will be doing exactly the same in other countries where taxes are even higher than the UK which means HMRC will receive a bigger chunk. Maybe it is just a case of swings and roundabouts. So if you means tested Starbucks for corporation tax in the UK you would potentially be opening up the opportunity for BP for example to be means tested in another country.

Starbucks transfers its tax liabilities to a subsidiary in Ireland, where surprise surprise, [url=http://www.irishexaminer.com/business/starbucks-pays-57m-in-royalties-but--211055.htmlStarbucks manages to pay next to buggerall in corporation tax[/url