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politicalbetting.com » Blog Archive » Thinking the Unthinkable – how’s this going to be paid for?
politicalbetting.com » Blog Archive » Thinking the Unthinkable – how’s this going to be paid for?
This is the reaction of many to the pandemic, now stalking many lands. Globalisation – at least as enjoyed over the last few decades – is over, a reset of relations with China, a change to the state’s role to the chagrin of those wanting a small state, low taxes, free markets, borders will not be as open as before etc.,. Well, some or all of this is probably true. Big events do change the political and economic landscape – wars and serious economic shocks certainly do. Whether pandemics do is less clear. The Black Death certainly did. The Spanish flu, however, did not. Nor did the flu pandemics of 1957 (started in China) or 1968 – 1970 (from HK) which, in each case, killed between 1 – 4 million people worldwide and at least 30,00 in the U.K.
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In effect it's the wealthy picking pet causes at the expense of other public services. A good explanation in this article from the FT:
https://www.ft.com/content/1093fcec-187a-11e8-9376-4a6390addb44
However, the current PM doesn't like doing unpopular things and at least the time being the bond markets seem happy to lend governments money for free, so although the normal process of government will continue in less important departments, none of CycleFree's excellent suggestions will be implemented and Boris will be all Borrow Borrow Borrow and Money Printer Go Brrr.
https://twitter.com/kylegriffin1/status/1255982796230680576
Also weird that so many suggestions but no mention of a carbon tax, which is anyway a no-brainer even without Covid.
That's a surprisingly high percentage.
https://www.bloomberg.com/news/articles/2020-05-01/scars-of-last-crisis-shape-u-k-debate-over-who-pays-this-time
On topic; do public schools get Gift Aid, as other, perhaps more legitimate, charities do?
If they don't then it's a sign of some combination of their pay not being high enough or their living costs being too high.
Raise tax on independent schools by all means. But be aware that any significant move will shut a significant number of them down, so is highly unlikely to be a net gain for the exchequer over the next five years at least.
This is why I support a carbon tax coupled with a 100% dividend so that the incentives to reduce emissions are there. Or, at the very least, that it only funds government investment in zero carbon alternatives.
Similarly I can't think of an item of government spending that I'd now be prepared to do without that I wound previously have defended.
This changing your mind lark is awfully hard.
Sunak's task is made harder because we do not know what will happen as lockdown is eased. People might resume eating out or they might not, for instance. We don't know.
The problem with increased tax on people, on consumers, is by and large we'd like them to carry on, or rather resume, consuming.
There may well be a case for digital transaction taxes or other measures to rebalance the differences between online and high street sales, and for addressing tax arbitrage through artificial licence payments to brass plate subsidiaries, but that was true even before the Covid-19 crisis.
All we do know is this is not a normal market failure to be addressed by government intervention directly at the point of failure. It may be that government assistance can start to move from grants to guaranteed loans and then income-contingent loans but that is for the future. My advice to the Treasury is to do nothing but be prepared to do whatever it takes.
@edmundintokyo is right. It will be covered by borrowing, probably with central banks picking up the gilts. No one wants to choke off recovery, Hard Brexit is on its way and there are 40 hospitals, HS2 and infrastructure galore that is needed before the next election. Johnson will spaff away.
Over-stating, if your and your family's only experience of school is Eton what is your sub-conscious view of Slough Comp?
And a similar thought; it's always seemed to me, and this is, I suggest, borne out by current events, that too many opinion formers have little or no experience of 'care of the elderly' especially Care Homes.
Subsidising rent for lower-paid workers through tax credits is laudable but looked at from another angle inflates housing costs by putting a floor under rental income, and subsidising bad employers (who drive out good ones) is a dubious value proposition anyway.
Another shrinking bit of the tax base will be migrants returning home. Partly because of job losses (particularly in the hospitality sector) and partly the difficulties of visiting family. Its not just stag parties that fly back for the long weekends on Ryanair.
@rcs1000 has speculated that we may well have net emigration in the near future. I think this might well be the year. 3 of my departmental colleagues have handed in their notice in the last month to return home.
Think of charitable private schools (which, remember, not necessarily all of them are) as running a similar economic model to universities.
This of course is one reason why nobody has ever been able to successfully interfere with it.
Because again, houses are totemic, particularly at a time of grief. Theresa May can explain this to you...
When do misguided contributor's to Shadsy's bonus get to tear up their betting slips as the winner is NOTA, none of the above, as you'd expect for the half-brother of Lara, Milo, Cassia and Theodore?
ETA this is my entry to pb's posts that might not age well contest.
However, I did notice that he was working for every breath. Whether that's temporary or long-lasting I don't know but medics have warned about permanent damage to those most seriously affected.
I mention this because I was thinking Boris could do a Blair and run and run. I'm not so sure now.
I wouldn't put it past Boris to run a deficit. He's no Keith Joseph.
Hospitals would discharge them much more rapidly nowadays. That's where the 'bed-blockers' went to. The main job of the day was to get them out of bed, washed, to the toilet and to breakfast.
An hours exercise? Most can't get out of bed on their own. I'm talking of registered nursing homes, not homes for retired gentlefolk who like to play scrabble. If they went for exercise outside, very few would return because they'd be totally lost.
Looking after them is a job I could never do and I admit it.
I did know enough to realise that COVID would go through them like a dose of salts.
That's when I realised the journalists really were totally thick. My wife always said that the most grateful visitors were those that came most often. The least grateful? Those that seldom came and had a guilt complex. .
https://www.espncricinfo.com/story/_/id/29116720/hundred-launch-postponed-2021
There is also a large class of things that we can all see make sense but have been classed as too dangeous by all politicians. There is probably a public mood to accept that some of those need to be accepted now.
The key date is the 3rd of November. If Biden wins, the GOP that voted for the budget-destroying Trump tax cuts (and before that the Bush tax cuts and the Reagan tax cuts) will flip to being deficit hawks for as long as the other side occupies the White House. Many of our pundits and even politicians take their cues from Washington. If Biden wins, the press may turn on Boris.
https://www.ispreview.co.uk/index.php/2019/08/openreach-fttp-final-10-of-uk-likely-to-cost-4000-per-premises.html
But I doubt if that includes the severe disruption of installing them, given it would involve road closures, house visits, telephone disconnections etc. So maybe add 15%.
The trick will obviously be getting the standard to 90% of homes. It may then be that 5G or even satellite is the best option elsewhere.
Thanks @Cyclefree.
Some of these won't work - Shell, for example, with a 24bn loss may not pay corporation tax for years, and it remains questionable whether a higher rate of the tax raises more money.
I wonder if we actually need to start with some indication of how much is required per annum? 100bn? 200bn?
Perhaps we just take half of the amount that Mr Corbyn was going to obtain from the pot of gold at the end of the rainbow?
I can see value in increased property taxes, scope of VAT, and reforming charity donation and trading exemptions (Oxfam and the National Trust will squeal like stuck pigs).
I wonder if we also need to suspend exemption for past pension settlements that were 2 or 3 times as generous than they are currently.
And perhaps we could make a couple of billion from a windfall tax on football.
Indeed when you look at the period 1914-26 the wonder is not that the Second Great Depression and Second World War happened but that they didn’t happen long before they did.
Different sectors will recover in different ways - tourism spots that rely on locals and Uk visitors very than those that rely on Chinese tours.
Campsites better than cruises.
*Pauses.
Thinks.*
This sounds like an awesome plan Matt, let’s do it.
Have a good morning.
Our local DH has a policy of explicitly denying access to the Discharge Policy to patients and their families, except via FOI, which neatly stops people knowing what they are entitled to that needs to be requested before they have left.
We also need to know the impact of discharges of positive-for-Corona patients into Care Homes.
A self-serving argument for a novelist, perhaps, but if Johnson teaches us anything it's the importance of inspiration over bleak utilitarianism.
On charities and tax, the charity area is so diverse - ranging from Little Snoring Duckpond Preservation Trust to massive corporate bodies with eye watering salaries - that one size fits all is not right. Over the years I have been a trustee of charities ranging in annual income from 47p (sadly closed now) to £20m. Many charities in fact get nearly all their income from local or national taxation (much adult social care for example). To add taxes to them merely puts up the price they tender for contracts. But to apply business rates to Little Snoring Duckpond or Little Snoring Parish Church will close them down.
BTW most land is totally untaxed in this country because it is agricultural....now, there's a fertile field for action.
He got better as he went on though.
We have entered this crisis with two advantages thankfully. The deficit is while still there rather small at just 1.2% of GDP. Also we have extremely low inflation - in fact inflation has consistently been below target.
Learning lessons from history after the 1920 pandemic the UK economy collapsed 20% in real terms and had massive deflation. Deflation is a major risk from where we are given inflation is already below target.
We need to raise unthinkably large sums of money, we need to not shock the economy with extra taxes and we need to avoid deflation. There is a solution that doesn't involve taxes.
Or has the need to provide pension pots to people in far more parts of the world made investment, aka debt, a seller's market - too much capital chasing too little quality investment. A 'why not take advantage' market.
And how does that all end?
For me, running a higher debt for a time after a centennial disaster (let's make it so and be ready as a planet for the next non-flu pandemic), in an economy with relatively few natural disaster shocks to consider is a no brainer. Managing that debt down by sound finances over multiple years is a must, but don't panic. But if the calculus of how much debt is too much has permanently changed, we must give that a nod too.
https://www.straitstimes.com/singapore/coronavirus-singapore-australia-canada-south-korea-new-zealand-commit-to-resume-essential
And as I don't like the charities getting the money it's wrong and that expenditure should be on things I do like.
And I believe his wife when she says that those visitors who came seldom would raise all sorts of queries. As I recall it Homes welcomed regular visitors because they enlivened the residents.
It is to be hoped that opinion formers have a good look at Care Homes after all this; I'm of the opinion that it would have been highly unlikely Col Moore could have done his walk if he'd been in a Home, as opposed to living with his daughter, not matter how fit he was.
https://www.straitstimes.com/singapore/coronavirus-932-new-cases-in-singapore-on-friday-as-total-crosses-17000
There are many things people think sound like a good idea, an example recently floated was free school meals for all children. I don't think think anyone really looks at that and thinks it sounds bad, but it depends on the cost...if it costs 3million a year most people I think would say yes do it. If it cost 8 billion a year they would be saying hell no.
One frustration is that it is actually fairly difficult to get true cost figures on anything the public sector does. Let us start with transparency first and then we can work out what we think is worth doing for the cost it can be done.
What would happen if it was just cancelled collectively by the EU, USA, Japan and ourselves ?
Is China in debt ?
And God forbid any major freebies get taken away, especially for older people - spent their life paying taxes, then suffered more than any under the virus and to get financially punished for it they'll cry? Something token at best. Grey vote bribery at election time is too vital .
What's it all about? The bits of paper or bank statements reflect what, exactly? Manufactured goods? Services? One person picks fruit in a field and indirectly someone pushing paper clips around a desk pays her, who in turn is paid by someone else placing some sort of value on the paper clip work they do. That person is paid by other people including investors in paper clips etc. etc.
It's all meaningless really.
As Margaret Thatcher said 'No, No, No' we have a Tory government not a Labour government and I doubt even Starmer would go as far as the tax bombshells Cyclefree is floating here. Especially when we need to grow the economy once lockdown ends not hammer it with tax rises
And the counter argument is very simple, if people think it's important enough to give / spend their own money on xyz, it makes sense for the Government to contribute as well. In the US the money would be being paid pre-tax, in the UK the tax is simply being returned.
Thanks for the explanations, I don't understand why people just stick up links to fee sites assuming people will have access. Sadly a lot of these charities are scams for hoorays to pay themselves huge salaries and ponce about, and it is the small decent ones that will suffer.