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Re: The Bank of England [Re: Image] #750837
05/08/22 07:45 AM
05/08/22 07:45 AM
Joined: Nov 2018
Posts: 4,743
Northants, UK
TBM Offline
Part of the Furniture
TBM  Offline
Part of the Furniture

Joined: Nov 2018
Posts: 4,743
Northants, UK
Originally Posted by Image
Agreed Phil .... having made a trip to town yesterday it was, however, depressing to see just how much of our young workforce is tied up behind the counters of the duplicated legions of coffee shops and cheap clothes outlets that fill our high streets in numbers no-one really needs .... while manufacturing, agriculture, healthcare and construction are crying out for staff. Our economy is in need of a strategic rebalance post pandemic/Ukraine with less reliance on suspect globalised supply chains .... we need to look at what stops our young workers aspiring to real useful and rewarding jobs rather than thinking that being a 'Barista' for a greedy tax-avoiding coffee chain is actually an achievement.

K


I could ramble on for hours about the issues in the education system, and the problems in creating realistic aspirations and opportunities for our youth but it will get all soap boxy, and then someone will chip in with 'yeah but doncha know Labour did something really bad in 1827' and I'll remember why I don't get involved in political discussion on here :} :} :}


1972 4/4 4 seater - 3G Morganeer
Too many ratty motorbikes
Re: The Bank of England [Re: Hamwich] #750838
05/08/22 07:46 AM
05/08/22 07:46 AM
Joined: May 2019
Posts: 496
Hampshire, UK
I
IMHO Offline OP
Learner Plates Off!
IMHO  Offline OP
Learner Plates Off!
I

Joined: May 2019
Posts: 496
Hampshire, UK
Originally Posted by Hamwich
Originally Posted by TBM

Just remember that doing all that stuff pays the wages (usually minimum) for an enormous amount of people that are probably already on the breadline.


Absolutely this. The health of an economy is derived from the amount of economic activity that occurs within it. A worker earning £500 and spending it in local shops does far more good than a business earning £500 in profit and giving it to a shareholder who then squirrels it away in an offshore account.

Originally Posted by IMHO

Inflation is being driven by the base cost of products affected by energy prices and supply problems not by spiralling wages or demand. So strangling demand by increasing interest rates isn’t going to solve the problem and is monumentally stupid.


I agree. We've got to make it easier for ordinary people to increase their economic activity by earning and spending more to grow the economy whilst making it harder for profit-takers to remove capital from the economy. In our determination to avoid any hint of 'socialism' we seem to have hampered our ability to effectively manage our economy by getting rid of many mechanisms and leaving ourselves with only a few blunt tools like interest rates and money supply. Milton Friedman has got a lot to answer for in this regard, I feel.

I'm wondering for example if we could do more in the way of rewarding companies through negative corporation tax when they do things which actively improve things (more jobs, higher wages, more investment) whilst increasing corporation tax on profits extracted to passive shareholders who don't provide working capital into the business. A particularly egregious example at the moment of course being the water companies. No new reservoirs built since privatisation, decades of under investment, but £57 Billion paid out to shareholders in the last 30 years.


Spot on.


M3W Brooklands (2015)
Moody 41 (2013)
Re: The Bank of England [Re: Robbie] #750840
05/08/22 08:00 AM
05/08/22 08:00 AM
Joined: Aug 2020
Posts: 1,260
Lytham St Annes, Lancashire
J
JohnHarris Offline
Has a lot to Say!
JohnHarris  Offline
Has a lot to Say!
J

Joined: Aug 2020
Posts: 1,260
Lytham St Annes, Lancashire
Originally Posted by Robbie
Even the Bank of England seems slow to realise that the main issue for the UK is Brexit - if you cut yourself off from your major market and subject your exporters to major paper red tape, what do you expect?? Oh, wait - you get all the brilliant trade deals and super economy growth - NOT- all Boris and Gove lies are coming home to roost!!!


No it isn't Brexit, inflation is reaching record levels around the world post the Russian invasion of the Ukraine, even the mighty USA is technically in a recession and may actually go into a recession, they haven't had a Brexit. The UK has the highest employment in over 50 years or so with a much larger work force.

If Russia squeezes the gas situation over winter the whole of the Europe will see record inflation and a major recession and all of us are screwed. UK exports have been back to their pre Brexit levels although UK EU imports are down because we are satisfying more of the UK demand domestically.

There are global shortages created by shipping carriers exploiting a monopoly on trade routes and achieving record profits as a result, Both the Euro and Sterling have weakened against the $ but why is Sterling so strong against the Euro and the Euro has now gone sub dollar, if the UK is in the mire? What we see is market exploitation trying to recover losses incurred during the Covid pandemic, which had a greater impact on the UK economy than EU because much of our GDP is dependant on services which were heavily impacted by Covid. The UK economy had recovered to pre Covid levels.

If the US FED pushes interest rates to 4% and the EU and UK follow suit we will see far more inflation. The IMF is advocating that inflationary pressures on hydrocarbons are passed on to the consumer to curb demand and force the pace and transition to a green agenda. Much of the UK inflation is due to energy prices, some of which is subsidising the failure costs of many energy providers now in liquidation, plus the cost of refurbishing our off shore storage capacity. Add in the UK has some of the lowest storage capacity in Europe, we will be more subject to the daily movements in the market. Add in the UK is a big pumping station for gas, it's providers are selling UK gas to the highest European bidders, achieving record profits at the expense of the UK domestic consumer and lifting inflation.

The UK Government has not done enough (compared with other European Governments) to shield the consumer from inflationary pressures, add in Sunak's tax rises (all inflationary) to the highest level of taxation in the UK since the 1950's to pay for Covid etc and you begin to understand some of the inflationary pressures within the UK.

Yes Brexit has added to the EU goods base cost both ways, but as nearly 60% of our exports are to the rest of the world which already has 'third county type of documentation now required for the EU:UK trade, it is sometimes over stated. Our trade routes and goods traded will change over time, where heightened costs make EU trade less viable eg vet inspection of live animals, we will export less or pass the cost onto the EU consumer and vice versa.
I do question a lot of the EU:UK trade green credentials, eg when a Mini car cylinder head crosses the Channel apparently 6 times during its manufacture before its fitted to an engine.........supply routes and goods traded will realign another example the UK bought pig sides from the EU and sold pig quarters to the EU.......all to do with demand that may have been capable of being supplied domestically.

The world is also changing, watch the Pacific rim as it surpasses Europe and becomes the biggest import and export market in the world. Already the world order is changing China was once the biggest importer of raw material/commodities, now India is about to surpass it as the biggest importer of raw materials.........


Last edited by JohnHarris; 05/08/22 08:08 AM.

John
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Re: The Bank of England [Re: TBM] #750842
05/08/22 08:10 AM
05/08/22 08:10 AM
Joined: Jul 2007
Posts: 27,078
Cheltenham, Glos. UK
Graham, G4FUJ Offline
Salty Sea Dog
Graham, G4FUJ  Offline
Salty Sea Dog
Member of the Inner Circle

Joined: Jul 2007
Posts: 27,078
Cheltenham, Glos. UK
Originally Posted by TBM
Still, blue passports.

Printed in France.


Graham (G4FUJ)

D8921 L44FOR '93 4/4 Giallo Fly 2 seat smile
'90 LR 90 SW
'09 Alfa Romeo MiTo
Re: The Bank of England [Re: Hamwich] #750848
05/08/22 08:26 AM
05/08/22 08:26 AM
Joined: Jan 2009
Posts: 5,591
H
howard Offline
Charter Member
howard  Offline
Charter Member
H

Joined: Jan 2009
Posts: 5,591
Originally Posted by Hamwich

Originally Posted by IMHO

Inflation is being driven by the base cost of products affected by energy prices and supply problems not by spiralling wages or demand. So strangling demand by increasing interest rates isn’t going to solve the problem and is monumentally stupid.


I agree. We've got to make it easier for ordinary people to increase their economic activity by earning and spending more to grow the economy whilst making it harder for profit-takers to remove capital from the economy. In our determination to avoid any hint of 'socialism' we seem to have hampered our ability to effectively manage our economy by getting rid of many mechanisms and leaving ourselves with only a few blunt tools like interest rates and money supply. Milton Friedman has got a lot to answer for in this regard, I feel.

I'm wondering for example if we could do more in the way of rewarding companies through negative corporation tax when they do things which actively improve things (more jobs, higher wages, more investment) whilst increasing corporation tax on profits extracted to passive shareholders who don't provide working capital into the business. A particularly egregious example at the moment of course being the water companies. No new reservoirs built since privatisation, decades of under investment, but £57 Billion paid out to shareholders in the last 30 years.


We have excellent mechanisms for ordinary people to do what you suggest. Its called a share owning democracy, but sadly ordinary people sell their shares and spend the money on toys instead. The share of private shareholders has fallen from 20% at the time of Maggie to less than 10% now. The balance is held by big institutions who provide you with your life assurance, pensions etc.

As for your £57 billion paid out to shareholders you are forgetting that the shareholders are the owners of the companies. Its their money just as much as your money in your bank account is yours.

Given Heathrow expansion, how long do you think it might take for a water company to get planning permission to build a reservoir? How may years of bickering about pipeline losses as if they could ever be zero? You made an earlier reference to nuclear power and our failure to build new nukes - that was a direct result of public opposition stoked up by the likes of FoE. Do you think that it would be any easier to flood a welsh valley as in Elan?

Re: The Bank of England [Re: IMHO] #750851
05/08/22 08:38 AM
05/08/22 08:38 AM
Joined: Aug 2020
Posts: 1,260
Lytham St Annes, Lancashire
J
JohnHarris Offline
Has a lot to Say!
JohnHarris  Offline
Has a lot to Say!
J

Joined: Aug 2020
Posts: 1,260
Lytham St Annes, Lancashire
I have to smile at the apparent horror of paying profits to shareholders when many shareholders are not offshore but UK pension providers that use shareholder dividends to build pension reserves and pay out UK pensions. In fact the UK Pension Industry was so dependent upon UK dividends for funding their pension operations that when the Labour Government stopped the repayment of dividend taxes (ACT) to the Pension providers, many schemes became underfunded and never really recovered that lost revenue stream to build back up their reserves.

Having said that many utilities and former nationalised industries do not invest enough in their infrastructure, but that is nothing new. When nationalised the UK Government didn't have the revenues to adequately fund the infrastructure requirements......so nothing has really changed that much! UK infrastructure has always been underfunded post the Victorian era.

Last edited by JohnHarris; 05/08/22 08:51 AM.

John
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Re: The Bank of England [Re: IMHO] #750854
05/08/22 08:45 AM
05/08/22 08:45 AM
Joined: May 2019
Posts: 496
Hampshire, UK
I
IMHO Offline OP
Learner Plates Off!
IMHO  Offline OP
Learner Plates Off!
I

Joined: May 2019
Posts: 496
Hampshire, UK
So you think that foisting bans on water users is acceptable given that no new reservoirs or working desalination plants have been built in over 30 years when the population has risen by 11 million and climate change has been predicted for decades? And that somehow over rewarding people who gamble on shares justifies this?

There is a small bit of good news, a new reservoir is being built near Havant by Portsmouth water at a cost of 120million, the first new build in the south since the 70’s, seems pretty cheap to me for water security, certainly a lot less than the HS2 vanity project.


M3W Brooklands (2015)
Moody 41 (2013)
Re: The Bank of England [Re: JohnHarris] #750856
05/08/22 08:54 AM
05/08/22 08:54 AM
Joined: Apr 2008
Posts: 11,012
Gloucestershire, UK
Hamwich Offline
Scruffy Oik
Hamwich  Offline
Scruffy Oik
Member of the Inner Circle

Joined: Apr 2008
Posts: 11,012
Gloucestershire, UK
Originally Posted by JohnHarris
I have to smile at the apparent horror of paying profits to shareholders when many shareholders are not offshore but UK pension providers that use shareholder dividends to build pension reserves and pay out UK pensions. In fact the UK Pension Industry was so dependent upon UK dividends for funding their pension operations that when the Labour Government stopped the repayment of dividend taxes (ACT) to the Pension providers, many schemes became underfunded and never really recovered that lost revenue stream to build back up their reserves.


Seems to me to be a strong argument for incentivising pension schemes to invest in actively growing the economy rather than relying on passive income from profit-taking.

Last edited by Hamwich; 05/08/22 08:54 AM.

Tim H.
1986 4/4 VVTi Sport, 2002 LR Defender, 2022 Mini Cooper SE
Re: The Bank of England [Re: IMHO] #750858
05/08/22 09:10 AM
05/08/22 09:10 AM
Joined: Aug 2020
Posts: 1,260
Lytham St Annes, Lancashire
J
JohnHarris Offline
Has a lot to Say!
JohnHarris  Offline
Has a lot to Say!
J

Joined: Aug 2020
Posts: 1,260
Lytham St Annes, Lancashire
Originally Posted by IMHO
So you think that foisting bans on water users is acceptable given that no new reservoirs or working desalination plants have been built in over 30 years when the population has risen by 11 million and climate change has been predicted for decades? And that somehow over rewarding people who gamble on shares justifies this?

There is a small bit of good news, a new reservoir is being built near Havant by Portsmouth water at a cost of 120million, the first new build in the south since the 70’s, seems pretty cheap to me for water security, certainly a lot less than the HS2 vanity project.


I don't disagree with your argument about more infrastructure development, not just water but also energy. Apparently network capacity of energy in the South East will curtail future housing development, as there simply isn't enough of it to increase the housing density.

Well there are several issues. eg the UK is becoming wetter thru climate change, so if in general we are experiencing more water thru rain which is more frequent why do you have to build more reservoirs unless you have increased local demand beyond local capacity. Which then goes to a wider issue of economic levelling up of the UK, stop the increased economic development in places like London and the SE and look to maximising the whole of the UK resources and infrastructure to better effect.

For local issues stop the eg increasing tarmac/impervious surfacing of green areas in inner cities (gardens, driveways etc ) which is causing heightened water run off and localised flooding and thereby improve water retention and slow release thru garden areas to improve the water table levels................its not just simply a case of building more reservoirs.....there is a much bigger issue here and water shortages are just a symptom of it.


John
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Re: The Bank of England [Re: Hamwich] #750859
05/08/22 09:15 AM
05/08/22 09:15 AM
Joined: Aug 2020
Posts: 1,260
Lytham St Annes, Lancashire
J
JohnHarris Offline
Has a lot to Say!
JohnHarris  Offline
Has a lot to Say!
J

Joined: Aug 2020
Posts: 1,260
Lytham St Annes, Lancashire
Originally Posted by Hamwich
Originally Posted by JohnHarris
I have to smile at the apparent horror of paying profits to shareholders when many shareholders are not offshore but UK pension providers that use shareholder dividends to build pension reserves and pay out UK pensions. In fact the UK Pension Industry was so dependent upon UK dividends for funding their pension operations that when the Labour Government stopped the repayment of dividend taxes (ACT) to the Pension providers, many schemes became underfunded and never really recovered that lost revenue stream to build back up their reserves.


Seems to me to be a strong argument for incentivising pension schemes to invest in actively growing the economy rather than relying on passive income from profit-taking.


There are strict rules governing what pension schemes can do, hence why the government has just relaxed some of those rules so that pension funds can be invested in eg start up schemes, green infrastructure....however that type of investment carries much greater risk should that investment experience failure and pension funds may not then have the resources to pay their pension obligations.


John
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