Over the weekend, John McDonnell promised that Income Tax would not rise for most of the country but that a higher rate would be levied on those earning more than £80,000. Tax reform can be pretty technical; and so one needs to look at one or two things without losing sight of the idea that the richer should pay their share. Each tax payer has a personal allowance of £11,500 i.e. the first £11,500 of earnings is not taxed; this is clawed back if one’s income is £100,00 or more by levying a 60% marginal rate on those earning between £100,000 and £121,200. There is probably enough room for a new additional rate between the 40% levied at £42,000 and 60% levied at £100,000 and £80,000 p.a. is a lot of money; only 3% of income earners get that much. It will remain necessary to increase the amount paid by those earning more than £145,000 and redress the regressive nature of National Insurance, which negates much of the 20% band, converting it into a 32% tax burden. Labour’s promise is also that there will be no increase in employee NICs nor in VAT, although again that’s not enough … VAT has to come down from 20%.
Tag Archives: economics
Tim Roache the General Secretary of the GMB writes about the GMB success in the courts in having Uber’s business model criminalised. The courts state that Uber’s drivers must be treated as employees and not as self-employed contractors.
The GMB and the UK are not the first jurisdiction to go to court. I looked at this last year, and made a storify,
On June 23rd, there will be the most important democratic decision taken in the UK, ever. The British People and those of Northern Ireland will be asked if they wish to remain in or leave the European Union. I am firmly of the view that both collectively and individually we will be better off, have more freedoms and a richer political, and non-political culture if we remain in. Like others, I have a list of issues that I believe need to be considered, mine are, Jobs & Prosperity, Citizenship Rights, Sovereignty and Peace & Hope.
At the Real World Economics blog, Dean Baker argues that, those proposing the Reign of the Robots, have some evidence to find and that (US) economic policy makers are pursuing policies in direct contradiction to the implications of such an event.
I went over to Hackney to attend the People’s PPE. This, their second event was called the Hitch Hiker’s Guide to Economics and I have produced a storify here which is a collection of tweets and other social media comments about the event. The rest of this blog is based on my notes and the thoughts it provoked, on debt, banking regulation and Islamic finance, a bit less about the class war.
Ann Pettifor, Director of PRIME, opened the session, stating that the problem was debt and the banks, which create debt.
A day or two ago, Alex Little, published a blog post called ‘Lessons for Corbyn in “Lerner’s Law”’. Lerner’s law suggests that using your opponents language limits your ability to make the argument. Little quotes Bill Mitchell, the inventor of Modern Monetary Theory (MMT) as to how Labour’s leadership in articulating the Darling Plan and its successors talk about balancing the budget and fixing the deficit concede the argument to the Tories. Little’s article also points at Lerner’s economic theories, described as “functional finance” and points at the wikipedia article on it. He argues that by describing the proposed pump priming as PQE, and accepting that when growth takes off, the government may transition to bond financing, by even accepting that we need to live within our means, the theory and benefits from the a more overt radical financing will be lost.
In the dying days of Labour’s Leadership selection, the key issues remain those of economics & strategy, but also unfortunately now one of mandate.
The debate on economics has come to be between Cooper and Corbyn. Demanding credibility is not an economic policy and so we can ignore Kendall & Burnham. I summarise the other’s two positions below and conclude that Corbyn’s economic manifesto is not just a shopping list of desirable reforms, they are a single set of reinforcing measures to fix and rebuild the economy so it works in the interests of the majority of people.
This was meant to be a short blog, emphasising the economy and virtuously circular, self reinforcing nature of Corbyn’s programme, but I also take the opportunity to look at the defence and foreign policy debate and conclude with some comments on the election process itself and Labour’s future.
I am glad I voted for Jeremy Corbyn, but I am not a Corbynista, I am Real Labour.
Is the economics getting lost in Labour’s Leadership debate? I think so. Only Jeremy Corbyn is talking real economics, the others led by Liz Kendall are talking about credibility, which I assume is code for reducing the deficit through fiscal policy i.e. expenditure cuts and tax rises. I am disappointed in Yvette Cooper, yet strangely not surprised by Andy Burnham.
Corbyn is not arguing for a Soviet style economy, the macro-economics is Keynesian, the micro-economics maybe socialist because he argues, in contrast to the Tories and their media shills, that wealth is created by both workers and entrepreneurs.
So the Leader debate is becoming about winning in 2020, how to win back the Tories and the Presidential qualities of the candidates, that’s what the Press are saying and that’s what the supporters of the three wise monkeys are arguing. The question that needs to be proved by them is that they are any more likely to win than Corbyn with his Keynesian anti-austerity policy. I attended the London Hustings for Labour’s Leadership yesterday. I don’t think it will have changed many people’s minds.
Michael Meacher convened a meeting to launch his anthology, “The State we need”, the title of which is a play on words on Wlll Hutton’s “The State we’re in”. The launch was held in Portcullis House. The speakers were, Meacher himself, Kelvin Hopkins, John Mills , Anne Pettifor and Richard Murphy.
When looking at the furore surrounding Julia Reda’s report to the European Parliament’s JURI committee, I am coming to the conclusion that those of us who argue for a fairer, more pro-consumer copyright settlement have won the economic arguments. The massive focus on the tiny change in duration reinforces this. All arguments I have had recently with proponents of the current settlement have rapidly moved from public good arguments to the issue of equity in investment, and the moral failure to compensate creators for their speculative investment.
The power companies are starting to enable homes to act as power sources as well as consumers. People can sell back any surplus. In the UK, about ⅓ of the power generated is lost during the distribution. The UK consumed 647 Terawatts (1012) in 2013. This implies that 219 Terawatts are generated and lost p.a. with a market value of £20bn. The loss is dependent on the distance travelled and so one policy response would be to build community micro- or meso-generators. On the whole older power stations are