Investors take fright as violence flares in Greece

I guess the Euro has really let down the people of Spain and Greece and most probably Italy to. One German chancellor Insists that the entry rules to the Euro are changed so Italy can join and look what the result is.

The real answer must be for Germany to leave and allow the Euro to devalue.

Can these people really be expected to suffer like this?

The fat cats in Brussels, Berlin, Paris, and elsewhere, couldn't give a toss. They are not suffering! Has anyone heard of a Brussels civil servant who has had to suffer any sort of a financial hardship in order to keep the euro disaster on the road?

Germany leaving the Euro is not really an option as Germany would become entirely uncompetitive. german manufacturing has been the biggest beneficiary of a weak Euro

The sooner we the United Kingdom come out of the EU the better, lets get our Country back for the British not the Europeans, most of those here are just soaking our Systems dry, our Health Service just cant cope, I see all different Interpreters at my Local Doctors Surgery, and they are getting paid lot, I am informed by a reliable source. I know the Europeans that we have here want to be here and not go home, but I am afraid its time to say Goodbye, go home.

Who let Alf Garnett in ....?

We don't need Germany to fix anything, just a little time.

When the violence leads to dictatorship, military or otherwise, the EU's own rules will require those countries to leave. Greece, Spain, Portugal, all of eastern Europe - none of these countries are strangers to such regimes.

Of course the rules will be changed to keep them in but then the EU will be revealed for what it is and even the most venal Europhiles will have trouble hoodwinking the public.

Alf Garnett did a good job. Time will tell, the Politicians need the Older experienced Voters at the next General Election. UKIP is right on the CASE !

So, Colin, when the rest of the EU reciprocates and sends us back a million mainly elderly brits whose houses are now worth half what they paid relative to the UK market they cahsed in on, that's going to ease the pressure on the NHS and other social services is it? It's not Johnny Foreigner what robbed us, and leaving the EU - however sensible a suggestion - ain't gonna solve our problems: no growth, no productive economy to speak of, no prospects for the youth, and a mountain of debt we can't pay back. But if it makes you feel better, just stick with the Daily Mail yeah

No Joe, German leaving is not really an option for the Germans because, yes, they would suffer from a high value currency - but they are the only beneficiaries.

While they have these huge competitive advantages we sit on our hands and watch while the people of Spain, Greece, etc. have their economies devastated.

To me its either Spain, Greece, Italy, etc. suffer an ongoing depression for at least the next 5 years - and all of the political dangers involved in that or Germany have a much milder recession lasting as long as it takes for them to re-adjust and lets face it most German goods are bought on the basis of quality and technology - not price.

The more that unfolds about this Euro fiasco the more you realize how bad those early decisions where - especially decisions made in Germany (and France)

Visited Dover Castle last week. It was full of Germans. Is something going on that I don't know about.

William Hague is at present trying to form an alliance with Australia, New Zealand and Canada as a pooling of resources exercise. I would like to think that this is a precursor to leaving the EU, after all, it would be sensible to have some reliable "friends" for trade and defense purposes as I am sure that the initial response from the EU would be to try to isolate us trade wise even though it sells more to us than we sell to it.

Nigel Farage is a very down to earth Guy, but could UKIP run the country?

"I guess the Euro has really let down the people of Spain and Greece "

So, Greeks overpaying themselves massively has nothing to do with it ?

I think not.

No one and everyone knows the cure and none will try it because of fear of the consequencies; it's likely that the cure will present itself in the form of civil war.

As the Irishman is reputed to have answered, if i was to go there I'd not be starting from here; this was a European madness from the start.

I have heard it said that Nigel Farage is in favour of even bigger cuts than this government.

Can anyone confirm?

I laugh when I hear about "austerity" and "cuts", given we borrowed £14bn in Aug - i.e spent £14bn more than we earnt.

We're still leaving way beyond our means. Next timer people think to themselves "I'm entitled to xyz, I've earnt it" - try asking yourself instead "have we paid for it ?". Answer is almostly certainly No.

Keep feeding the banks, that's all that matters isn't it?

Oh yes and the BBC should stop referring to people fighting for their rights as 'Anarchists'. Subtle propaganda!

Clive B is right. the present, seemingly unsolvable , problem was caused by a two decade long period of Governments and their citizens living far beyond their means. We now have been presented with the bill, and nobody has a clue on how it will be paid. The riots have only just begun.

Yes these countries lived well beyond their means but do you honestly think that the barber, dustman, nurse or teacher had a clue this was going on?

Do you think they each made a conscious decision to overpay themselves "massively" - how does this work then?

The Greek government is solely responsible for its debts not the individuals.

But its alright to starve the population?

People have got to get a grip. What is happening now in Greece and Spain will lead to a huge political upheaval - as big as any in the last century.

When you treat a population like this it always does, we have enough history of this.

I just do not believe that our trade with Europe would be affected if we were to leave the EU altogether.

The Europeans buy stuff from us because its what they need.

Why would that change?

The Europeans would still need the stuff and we would still be the best supplier.

Could someone please explain why leaving would be so bad for our trade with Europe.

The problem for the EU countries such as Greece, Spain etc is the same as for the UK and USA, to much debt. The difference though is the UK and US have their own currency, so we can print or devalue. Greece and other countries in the EU have to take the pain through austerity and unedmployment.

Exactly Geoff and this is why, at the very least, Germany should leave the Euro

It's true that we were told that we needed to join the EU to benefit from the trade benefits. It's also true that we buy more from the EU than we sell so that was Bull. I also don't believe that we should have participated in anything more than a trade area, politics should never have come into it. I also remember an article some years ago that suggested that the Russians should concentrate on controlling Europe economically rather than by force. Germany anyone?

Just something else to consider...On the basis that the current 'predicament' is worldwide, could it be realistic that all Governments were equally incompetent simultaneously? A plethora of worthless paper/electronic money was distributed (by the banks) to create a boom, only to be followed by a withdrawal of worthless paper/electronic money (by the banks) to create a bust? Note CREATE being the operative word...What will be created next?

Seems to me that the sheer stupidity of the Euro is coming home to roost. The answer must lie with an orderly return to national currencies of ALL those countries that currently have the Euro. The costs will be massive and an orderly disintegration of the currency would need to take place over a year or so, but Not doing this will/is leading to a terrible price for member nations that simply cannot afford the costs of membership. To ignore this will lead to potentially bankrupt nations all across the Eurozone with unimaginable consequences. The Euro was never going to work - it must be abolished, allowing countries like Greece to devalue their currencies and painfully but slowly recover from this federalist nightmare!

@ mark jukes

You ask:

'The Europeans buy stuff from us because it's what they need. Why would that change?'

It probably wouldn't change much initially but the UK would be vulnerable to EU countries putting up barriers of one sort or another to the import of British goods. Don't forget as well that for geographic reasons most of our bulky physical exports to the EU pass through France. The EU is seen principally by continental Europeans as a political project, not a free trade project.

Striker,

A lot of what you say seems correct. I suppose we have to remember though that the UK economy is in a mess with huge debt, and we are outside the Euro. In that sense although we have the advantage of having our own currency we still nevertheless need to tackle the underlying problems that got us into this state. It would be easy to think, for say Greece, that its JUST the Euro, and I think that would be a mistake.

We can see how the problem of the Euro can be resolved, but those who rely on the Euro have no choice but to accept what their governments & banks have decided.

The Euro was a flawed ideology to start with, but no one within the Eurozone wants to admit this - some habits must be hard to give up on, I wonder how ordinary Germans feel about how their living standards are being dragged down - it won't be the population in Greece, Spain, Italy or Ireland who determines whether or not the Euro is sustainable, but the German population who can bring their government down if they have to continue to foot the bill for the profligacy of the other Eurozone partners.

I am sure Hitler must be having a laugh to think that his dreams of taking over Europe are coming to fruition, with not one gun being fired - well guns with rubber bullets are a far cry from the massacres of thousands during his attempt for world supremacy.

It is very sad to see so many people being affected by the actions of both politicians and the bankers who mainly have profited from the bank bailouts which is the main reason for government debt being so out in the stratosphere. Ordinary people may or may not have benefited from poor government taxation strategy, but not to the extent they are having to suffer cuts in their standards of living.

The EU as an organisation provides huge amounts of aid to foreign countries, perhaps its time to tend to your own back yard, never mind the poor in Africa or India, they have been used to having rubbish out of this world corruption within the political world, which is the cause of their misery - snap, when they look at how the European politicians are pauperising their people.

After my previous comment, in the interests of democracy, the UK at least must have its referendum on EU and the politicos act in accord; to be free of the disease despite possible (likely to be lesser) adverse side effects.

Rose G,

I am not in favour of the Euro. Regarding debt though, the UK and US have massive debt and they are not in the euro. Debt is caused by many things. As I have said previously having your own currency helps you in dealing with debt but many of the reasons that have put the UK in debt are common to the Euro countries i.e. bloated state and public sector, over regulation and an entitlement culture.

Paul 2,

Do you think these barriers would be put as revenge for us leaving?

Surely using this argument we are effectively being forced to stay in the union - Firstly, there are many European countries outside the EU doing very nicely without membership and secondly, this argument also makes the over 50% of trade we do outside the union at risk of barriers.

Everyone is in agreement over free trade and everyone knows how damaging trade barriers are (especially the Europeans).

Perhaps we do benefit from being in a common market with these European nations but I believe that's all we ever needed. Free trade - not integration - a big mistake.

Globalization of trade has made the common market obsolete, so we move on to further ideological integration and this German and French led march, starting with the Euro, is not serving the Populations

The EU is being shaped to accommodate the EURO without regard for UK industry; certainly UK culture in that regard must change its attitudes, less reliance on financial services for example and greater emphasis on invention and quality of our product; not to mention all the borrowing beyond our means to repay and a more realistic regard for wealth in all its aspects.

There are markets aplenty outside Europe. It seems to me that Europe is a lost cause and they should be left to struggle as they will to resolve their troubles; hopefully short of war.

Spain borrowing at 6%, I'm borrowing at 19% but I'm still a lot better off than my parents, it's all relative.

I've worked in countries where they have nothing, barely enough to eat, and I worked with Americans who were protesting because the ice cream ran out.

Leaving the EU is an inevitability for the UK; closer integration of member states, which is the only way that economic and monetary union can be made to work, will eventually force us to face this decision. The question really is when is the best time to leave.

Faced with re-negotiating our relationship with Europe, Cameron said that now, with so many problems facing the Eurozone, was not the right time - I wonder whether the new 'core' Eurozone nations, when they finally sort something out, will be receptive to our requests. I suspect they will more likely issue UK with an ultimatum of the form "Join us or get out; in either case, shut up" rather than tinker with our relationship with the EU. In any event, we will not be in a strong negotiating position.

As ever, I suspect that this vacillation will come back to haunt the Conservatives.

Talk of vacillation; I was ever a Tory (not rich) but wonder about supporting Ukip; us lumbered with this flabby coalition of PR expatria. In the face of a possible, if not probable, Labour Libdem coalition come 2015, my thoughts are that the Conservatives should give some indication that they intend to take on board the basic agenda of Ukip for 2015 otherwise risk a disastrous consequence.

@ engineertony

"I'm borrowing at 19%"

Why ?

Has it occurred to anyone that on UK leaving the EU, countries remaining in the EU might find alternative suppliers within the EU or outside.

@ mark jukes

The problem for me on the economics of the in-or-out or somewhere in-between question about the UK and the EU is that I don't know whose analysis to trust. There are so many variables to look at even before the dynamics are attempted. In addition, many of the opinions presented to us have the analysis done to support them after the opinion has been formed, so they fail for that reason.

Prof Eman. Why would they if the price and quality are right? They sell us more than we sell them so they stand to lose more than we do in a fight. If we were independant, we would be free to operate our own way and not the EU's - there is also the WTO! They can't break the WTO's rules. Are you saying that in leaving we would be at a disadvantage, or treated differently, to other countries who are not in the EU but do business with them?

Paul 2, much of the application of analysis is manipulated to satisfy precept, from my small experience - some time ago now - as a member of a group choosing kit; it's often a matter of weighting the various parameters of the equation to suit the desired conclusion (of the boss). In the long run one may best rely on gut feeling, which comes from experience in all its aspects.

I meant to add, our problem is that we have leaders in power who seem as innocents abroad.

I know its really tough and how the hell can you make an informed opinion.

Apparently Norway and Switzerland make a considerable contribution to EU funds to allow them the same special treatment in the market place as fully fledged members - why would they do this? - surely WTO rules would prevent the EU discriminating against these countries - so why the need for these contributions?

Another - around 47% of our exports go to the EU but around 11% of EU exports come to the UK - we need them, they would not miss us.

When you look at this we do seem vulnerable but we do have the protection of the WTO - don't we?

WTO might apply, but that does not alter the fact they are free to go anywhere they want, and if they decide they do not like our company/ies they will go elsewhere and WTO will do nothing to rectify that.

What I am suggesting is that trading with a Member of a club (EU) , rather than some-one who has left the club in disgust, might be preferable to some.

As some say, it is better to be on the inside than outside.

Individuals make purchasing decisions - not governments - and these are based on their own particular business needs.

A procurement manager in a big company in Europe will not change his suppliers unless he is forced to by trade barriers and these barriers would break WTO rules.

These procurement managers are free to go where they like now.

Martin, put that way, re Norway and Switzerland, it look like a bung in effect, though above board.

Sorry, I meant Mark not Martin.

Government procurement is quite high, in some respects too high in most countries, so Governments are able to influence procurement if they so wish.

It's clear that no-one really knows the answer but I would be interested to know if this country noticed a massive advantage the moment we joined the EU. I am still leaning towards the argument that we buy a lot more from the EU than we sell. It would also be interesting to know how the likes of Australia and New Zealand overcame the problem of no longer having favourable trade concessions with us.

Australia and New Zealand have developed markets in Middle East and Asia. Of course, one has to remember that France somehow managed to bring all its dependent territories into then EU - so Tahiti and Fr Polynesia get the same advantages as we do. We were not allowed to do that. Rather, our totally useless negotiators failed to get a good deal. Time and again our negotiators have let us down!

@ RM

Australia and New Zealand have said in the past that they refocused on their geographical neighbours after the UK joined the Common Market/EEC.

The EU was a French invention made to engrandise their state and to obtain a commitment by Germany to eschew any such notions of their own in future; in its beginings Britain was kept at arms length and allowed only later to apply like supplicants for membership; inevitably we weren't offered the same privileges as the French with regard to trade with the Commonwealth. The terms offered were accepted by Mr Heath - with grandiose notions of his own - gratefully.

What vexes me is that Germany has a constitutional court - and the power - that enables it to maintain its self interest by legal means, whereas the people of Britain who's constitution is a pragmatic construct, unwritten, resulting from democratic endeavour are not - as yet - allowed the democratically implicit voice of a referendum.

Another point worth making is influence in the world.

We are now the 8th largest economy in the world, having been passed by Brazil. As such it could be argued that we should not be in the G7 at all, which could happen sooner or later. Probably sooner rather than later through the double dip, whilst emerging nations are growing.

So that leaves us with influence via the EU.

Lose that and there might be little if anything left on the world stage for us.

A tiny little island in the middle of a sea.

the eu has no influence she.s a blair left over. Great Brittian made a big impact over the last 1000 years I hope it will the next, We just need a new system to stop all this greed and corruption in this society and in this world .

the eu has no influence she.s a blair left over. Great Brittian made a big impact over the last 1000 years I hope it will the next, We just need a new system to stop all this greed and corruption in this society and in this world .

Wit a market of nearly 65 million people that EU want to sell to. Take out 65 million out of the EU and that cuts their overall weight and sway in the World economy.

Murdo McSponge

By how much?

Combined with the loss of credibilityn because of the way they have handled this whole thing - a lot!

Murdo MsSponge

There is also the possible loss of Scotland to consider. Where does that put UK in terms of credibility, however it is measured?

IF they go - which I doubt (I lived in Canada and went through the period of Quebec deciding not to separate. That was interesting as, if I remember correctly, all the polls said they would, but when actually faced with voting for separation in the polling booth, the French Canadians couldn't bring themselves to actually voite for it!) - but if Scotland did decide to separate, they have to reapply to join the EU. Would the EU accept them? If it did, what sort of precedent would that set for Spainish and German regions? Interesting!! However, IF they left and IF the EU accepted them, onbiously, the numbers would change by circa 6 million.

However, what is really at issue in my opinion is "efficiency" and "flexibility".

Is the EU, or the USA or China, for that matter, the most efficient size and structure to operate on this planet? Are many of the huge companies the most efficient size and structure to operate in markets? How often are companies overwhelmed by their inner ineficiencies inherent in their size and the weight of their bureaucracies?

I think we are entering a world where large size is going to be a disadvantage. Okay, large size enables you to chuck your weight around, but if it is the optimum way to go, are we going to see just a few huge trading blocks across the Globe? Is that the way it is all going to go?

Murdo McSponge

There are alternatives to the EU, such as an association with Nordic countries which is on the table. I am sure there are other options to consider.

PS Last comment relates to Scotland.

Prof, a tiny group of islands we might be, but once, through energy and enterprise we ran an Empire, old hat! I know, but equivalent endeavours are still a possibility if we 'pull up our socks' it's nothing that a change of our culture for the better cannot achieve. The EU is doing its best to deny us that ambition.

an elder one

I think there is more, nearer home, to denial of our ambition than just the EU.

True enough Prof, but I wouldn't guess at the balance, the interaction between the UK and EU constituents confounds analysis.Certainly, UK industry in the broadest sense has lost its way for one reason or another, discussed persistently in these posts and in the media everywhere. It seems to be a case of a degenerated culture.

I don't believe we need the EU to put it right, if anything on the evidence it will have the reverse effect I think. Let's face it, the country to have done best, thus far, in the EU is Germany who have used membership to further their profit singlemindedly, whilst we in the UK waffled about being decent chaps or something and this and that; getting nowhere.

an elder one

There are benefits in being a member of a trading block, after all what was the Empire if not amongst other things a form of a trading block?

So being members of the EU trading block have advantages.

As already stated the main problem is the Euro, and the straight jacket arising from it on the different economies. As we are not in the Euro we are not similarly constrained. Look at another country not similarly constrained like Poland, and chart their progress during the recession within the EU and without the Euro. We have had double dip, whilst they have as yet to experience a recession. I am aware that the two countries are not directly comparable, but an onus on our 'prized' financial services in the UK has a lot to do with our inability to deal with the recession.

As regards Greece there are two sides to the story. There is Germany, who unwittingly gave them loans to buy German goods, and there is Greece who took them when they should not. Very similar to our banks lending recklessly, and then trying to blame the customer for taking out the loans.

On the German/Greece saga. Who is to blame - The chicken or the Egg?

Prof, I think we are largely in agreement, a trading block pure and simple the people of the UK thought had been negotiated that would engender stability and efficiencies in trade, though some, better informed had their doubts as to what it might lead to, being familiar with the mindset of the enarques and their reckless desire for the greater glorification of La Belle France, not to mention the bureaucratic inventions of Brussels to level the playing field; a personal view!

Thus we got the Euro which those with wits could see would never work within a collection of sovereign states with differing cultures.

Regarding the German/Greece saga I'd say it was six of one and half a dozen of the other; it is all too common in human nature to take what's on offer if it serves; neither had their wits about them; and to take the argument further there has been manifold lack of wits, in the West at least, that has brought us to this pretty pass.

I'd agree the reliance on our 'prized' financial services is a problem, or rather the lack of sufficient other industry; the culture in UK needs to move fast towards making things that improve living standards and livelihoods in the populus. Finance seems to be largely governed by short term narrow minded sentiment, beat the other fellow at the game whatever it is with deadlier financial contrivancies, to hell with the rest and leave the future to sort itself. Let us see a change of emphasis in education among other things towards preparing the young populus for the practical experience of life.

an elder one

Indeed we seem to be getting nearer an agreement.

It is unfortunate that one of the main causes of our problems is given such a priority in 'negotiations' within the EU. The UK financial services people who have got so many people's backs up in the UK, are now getting the backs up of countries within the EU. Only to be ignored by the rest of EU countries, who are doing their own thing anyway.

I wholeheartedly agree that "the culture in UK needs to move fast towards making things that improve living standards and livelihoods in the populus." However, unfortunately this is not happening. We continue to spend our energies on protection of the financial services, whilst manufacturing and production of goods goes down the pan.

As I see it the only real options we have on the EU, are:

1 Continue within the EU, and negotiate from within. OR

2. Become an associate of the EU, say on the lines of Switzerland. However whether the EU would want to support another Switzerland is open to debate. It should also be remembered that Switzerland have a highly developed financial services sector, and their manufacturing is also well placed to do business internationally.

How much more room there is within the EU for additional Swiss type financial services is indeed open to question.

Perhaps some-one knowledgeable in Swiss membership could comment on the possible likelihood, cost/benefit ratio, and attitude to this type of UK membership.

Prof Eman. Everyone seems to be pretty "wet" in their approach to what are our strengths. We seem to be talking ourselves down.

Our banking system and the City of London are damned good and highly respected around the world. The knowledge in the City is fantastic, and, whether they admit it openly or not, it is the envy of very many, partucularly in Europe. Okay, it's going through a bad patch - but what sector of banking, anywhere in the World, isn't?

Let's not beat about the bush, large swathes of Europe, especially the Frence, would love to get their hands on the City, or undermine it completely, which is what they are all trying to do. So it is not something that we should be ashamed of.

What I think many, many, people in UK recognise is that our psychology is totally different to continental europeans. In that respect we are much closer to our American and Canadian "cousins". I don't wat to have anything to do with letting the EU determine how we run ourselves, what laws we pass etc., and if we HAVE to tie up with anyone, I would much prefer to join in some North Atlantic free trade area. I think a majority of UK citizens would feel happier in such an arrangement.

I think that the mechanisms of finance are essentially short term, economics takes it properly into the long term, or should - it's not my business line, I'm an engineer in fact and by nature, so perhaps I talk thru' my hat - and in that domain it is for the powers that be to take notice and create an environment for industry that enables the growth of wealth. The political powers of UK should conduct affairs first and foremost in a manner that suits the UK best and avoid the babel that is EU.

If we are to consider reshaping our involvement with EU it seems common sense that it must be on the basis that if we don't get what we want then we'll leave altogether. One expects to have grownups running the country with the knowledge of how things work, what we want and how to get it; the French think they know what they want, the Germans know what they want but are inhibited to some extent by experiencies of the past, UK governance - the coalition -seems unable to make up its mind at all.

As far as favourable trade arrangements between countries or blocs are concerned one would think these could come about anywhere where mutuality can be found, it doesn't have to be Europe; the fact that they are on our doorstep gains little advantage, if any, in the modern world of global endeavour; we don't want opportunities in that to get stultified by the machinations of the EU, that is an abstract political design that may never come to fruition.

Murdo Mc Sponge/an elder one

I want to make some further points.

There is a North American Free Trade Area - NAFTA.

However to come to fruition it took 8 years. Negotiations started in 1986 and it came about on 1 Jan 1994. They are well in into their 15 year programme and joining now would be difficult, if not impossible.

The three countries in it are Canada, Mexico and USA, a trilateral trade block.

I am not sure where Britain would fit into this block, geographically or otherwise.

Membership if at all possible would take years to negotiate, and the terms agreed would most probably not be very favourable.

An idea yes, but practical chance of real success minimal.

No worse than UK getting a fair deal from the EU then!

Murdo McSponge

Depends on your definition of "fair deal" and in any case quite a few people feel they are not getting a fair deal from their very own UK Government. The whole thing is relative.

Perhaps you could explain what a fair deal would be? Get loads of money from the EU and pay nothing in, and get immediate access with no barriers to all of European market etc?

Have no rules of membership, pay no members fee?

Do not know of many organisations that operate in this manner.

Not subsidising inefficient French agriculture for a start. Recovering our fishing grounds from Spanish and French fleets who, widely, completely ignore fishing quotas / regulations.

Murdo McSponge

Agriculture is a hot political issue in France. I get the impression that there have been more demonstrations, and similar, about agriculture in France than about anything else. To them agriculture in terms of importance politically is likely to rival our government's stance on financial services. Not quite sure how inefficient they really are, perhaps you can substantiate your point.

On fishery quotas/regulation, it is not just the French and Spanish fleets that break them, so do the British ones. In any case this is an international problem which encompasses the whole world, some of the worst offenders are Chinese factory fishing vessels, there are many others.

I understand that fisheries is one reason why Norway won't join the EU. With those and hydrocarbons, they picked well when the natural resources were being handed out.

Paul 2

Do not think that it is particularly clever that Norway will not join the EU, because of the fisheries policy. OK for them on the short term but harmful to all in the long term. An example of the worst in short termism.

The world including European waters are grossly overfished.

Fisheries and fishing are at crisis point level.

For example-

BBC News-21 July 2009- Rethink 'eat fish' advice-MPs

"But a European Commission report in April warned 30% of fish stocks were beyond safe limits.

What fish we do eat, are increasingly polluted e.g.

Salmonella have been found in Dutch fish.

BBC News - Warning over fish mercury levels. Thursday 28 November 2002,

etc

As to the GB stance on the matter here is an example-

BBC Radio 4 'Ridiculous that the UK will not sign fishing treaty'

"A treaty trying to reduce the number of deaths in the commercial fishing industry comes into force to-day, however Britain have not signed it."

EU fisheries policies are another example of what I call dogmatic bitching about the EU, without serious thought of what the future holds for our children.

If anything we should try and make it work equally for all in the EU.

PS the most recent pollution of fish and marine life was nuclear.

We can pick over the bits and pieces of the EU edifice with regard to trade, but to my mind the argument is more truly a poitical matter; Europe is still but a cockpit of tribal warfare, conducted now by means of commercial weaponry. The aims for all, in varying degrees (tribal superiority) are unchanged from the 20th century despite the earnest pronouncements of brotherly love twix France and Germany at the begining of the EU episode, for instance. It's not a nice place to be in my opinion; it does us in the UK few favours.

I wonder just what benefit it affords the UK in terms of trade, the only indication of it I can recall is when Margaret Thatcher totted it up and came to the conclusion the UK had over-paid for the privilege and then demanded a rebate; my recollection is dim but then didn't Tony Blair pay some back. Certainly we seemed to have paid over the odds in giving up our territorial waters to the rest of Europe and as others have said agreed to pay a lot to keep French farmers in the style in which they are accustomed to conduct their business.

Admittedly I've made no proper study of the issue.

All said, I wonder whether the assumed financial benefits of trade (if any) are worth the constraints to our freedoms from political involvement. In my recollection Britain has ever been on the side, working to maintain a balance between warring factions on the continent; perhaps we could be more effective in Europe by remaining there, or since, where we are at present, pulling back there.

@ an elder one

Ever's a long time and doesn't stand up to examination but I think I know what you are saying.

Paul 2, true; I don't say never, that would be foolish; we all argue in present time. The political question - of ever, or what - should have been seriously argued with formulations based on democratic principles before the introduction of the euro, which as we all realise now (I think) was introduced as a way to accelerate the successful conclusion of a desirable notional design in some political minds, of a greater European home, or somesuch. It may happen one day, just as we might expect one day to finally understand the nature of the universe; well beyond my remaining lifespan!

an elder one

Benefits for UK in terms of trade.

The benefits of trade have been considered since time immemorial, and hence we have free trade blocks.

In more recent times, we have had the OECD - Organisation for Economic Co-operation & Development, one of the objectives was: To contribute to the expansion of world trade on a multilateral, non discriminatory basis in accordance with international obligations.

Under communism, COMECON, the council for Mutual Economic Assistance - led by communist Russia, encompassing the Eastern block plus some other socialist states in the world.

The Partnership & Cooperation Agreement - (PCA), covering Russia, Eastern Europe, the Southern Caucasus, and Central Asia.

CEFTA - the Central European Free Trade Agreement - between non EU countries in the South East of Europe. Acting as a stepping stone to membership of the EU.

The EU- growing and expanding to encompass more and more countries, mainly form CEFTA, thereby increasing the market size.

There many others, for example, NAFTA - North American, already mentioned, and EACFTA - East African Community Free Trade Area.

The benefits of trade are at the simple end of economics, and throughout time have survived the test under many systems of government, including communist.

As such there are clear advantages in belonging to a trade block, but it is up to each country to make the most of it. Selling financial services is not at the most exportable end of it.

Furthermore, we have had the entry conditions renegotiated by Mrs T, not known for her pro EU stance, and if it was good enough for her, I suggest it should be good enough for us. Laughable if we should try to renegotiate every few years or so.

As regards democracy we have what we voted for. Our democracy and our politicians appear to be a turn off to many of us. Leaving the EU is unlikely to improve our democracy or democratic systems. Little to gain here in this respect by leaving the EU.

PS Is it not strange that women who fought so hard to get the vote, now so often ignore it, on the basis it makes little difference whom you vote for and similar. And not just them, but so do increasingly more and more of us?

Within this context Ed and his team seem to be a). Calling things right on the economy. b) Calling for a one nation approach, instead of continuing the richer and not so rich divide. c) Ed calling for proportional representation, in line with the one nation approach. Under PR more often than not one gets at least 50% of people/voters represented in government, instead of the usual 30% and a bit of those who bothered to vote.

Prof Eman, you say "As regards democracy we have what we voted for."

No we definitely do not have what we voted for!!! We voted for a free trade area and now we are being led into something COMPLETELY different - a political union!!!

"Leaving the EU is unlikely to improve our democracy or democratic systems."

So setting our own laws is worse than having to accept laws created in some other place is it?

"Little to gain here in this respect by leaving the EU."

Well, I disagree completely and utterly.

Interesting how it all comes together in these postings.

In a free trade area, each member (theoretically) does what it is best at and productivity in the group of members goes up, hopefully for the benefit of all. This can work well and a member can be free to leave if they don't like it. Prof Eman mentions examples of these.

In a free trade area that incorporates a currency union but not a transfer union (cash gifts to poorer members) some members find that there is little that they can do better than others and so become even poorer. This arrangement will not work well and it is hard for a member to leave without causing a financial and economic mess. This is the Eurozone.

In a free trade area that incorporates both a currency union and a transfer union, which is usually done through political union (the UK, USA etc.), everyone can live as well as each other even though the economic activity can become concentrated in only some of the member areas. This can work well but it is hard for a member to leave without a mess that can go beyond just financial and economic matters.

Those EU member states that proposed and then pushed through the putting in place of the Euro as a single currency without at least a transfer union to go with it did an appalling thing to most and perhaps all EU member states. They should consider now how to make amends for their actions.

I don't deny that there are advantages in being a member of a trading bloc of course there are, people and groups are ever seeking accomodations for mutual advantage within (and outside) of the law. Your enumeration of such treaties are there to be seen and studied by all with an intellectual interest in such matters; let's not make this a competition in erudition; the subject here is the EU thing. The thing we are in is not a trading bloc pure and simple, but a political adventure which benefits the UK not at all that I can see.

As Murdo McSponge says we have not got what we voted for and as the days go by it gets less and less like it. Brussels, the embryonic seat of European government constantly issues edicts affecting all aspects of our governance, allegedly for the purpose of levelling the playing field for trade and common endeavour with the connivance of the Franco/German axis - now arguing the case for yet another treaty to accomodate the stresses brought about by the Euro - but in fact it is more a case of moving the goal posts.

It is indeed laughable, to use your expression, to attempt constantly to renegotiate a deal, but of course it was - whatever it was - never a done deal its complexion is constantly changing, the Euro has revealed that and put us on the way to a European political state, as indeed was intended by the French enarques.

I not quite sure why you make the vaguely sexist remark about women voters when you go on to tar us all with the same brush, the reason I would suggest is that we are becoming despaired of our government and its diminishing practice of our perceived UK idea of what constitutes a democratic society something that we have laboured at over circa one thousand years.

Your last para. "Leaving the EU is unlikely to improve our democracy or democratic systems. Little to gain here in this respect by leaving the EU" is a pretty sweeping statement with no substance, so I'll make another; EU involvement is corrupting the UK practice of democracy in a way that renders it increasingly unrecognisable to the point of irrelevance.

From your several references to Ed I can gather where you are coming from and probably where we are at variance though I think we do share some common properties, certainly his recent speech came as a surprise to many with his attempt to steal the Tories clothes and to quite some degree succeeded by all accounts.

Muro Mcsponge

As regards democracy we have what we voted for.

By which I meant the result of our referendum, and the FPTP system, and that is the context of my reply to your further issues raised.

My apologies if I did not make that clear.

I read somewhere recently that 10% of the global population control 90% of overall global wealth. I need to research further to confirm this but i don't think it is too much erroneous. It is very transparent what is happening when you stand outside the box and look in. Wealth = power and control. The system is fundamentally flawed for the majority and working brilliantly for a minority of avaricious people. Basically the stage is being set for globalisation, ultimately to be controlled by a minority. Just look at how all the mergings and acquisitions are resulting in monopolies across the globe. I observe countless debates (like this blog) often resulting in verbal conflict; with one saying we should do this and the other saying we should do that to improve the economy. Whilst everyone is conflicting, the minority advances. It is only when there is a conscious awakening by enough people, to comprehend what is really happening in the world, that we will see change occur. With 10% of the population controlling 90% of the wealth, the systems (economic, political or otherwise) simply cannot work for the benefit of everyone. The conscious awakening is happening, albeit at a very slow pace, hence the predicament we are in will likely drag on for a few more years yet. I also fear there may be a tempest before a bright new world appears! This really depends on the minority controlling the wealth. There are two options...1.The avaricious minority will kindly redistribute the wealth amongst the middle and lower ends of the wealth ladder, or 2. The majority will revolt against the avaricious minority in order to acquire the vast wealth which they hold. Think of a board game...when someone wins all of the money in the game, they have won - GAME OVER!! The capitalist system is very near the GAME OVER stage because the money is now virtually all at the top end, in the hands of a few. Unless the losing players of this game can rapidly win back some of the money, there is no doubt it will be GAME OVER!! I really hope the option 1 above is implemented as i really don't wish to experience the storm. Peace and love to all!!!

Must agree Ryan, but what to do? If you look at revolutions they usually end up with worse leaders than they had before. Joe Stalin, Mau Tse Tung. The game is over and they have won.

Engineertony, we are just not at game over yet!! i don't like to take such a negative perspective. I believe there are two windows in life, either positive or negative. You can choose which window you wish to view out of. I like to view out of the positive window. Where there's will, there's a solution!! All we can do is educate people to an adequate standard, at least so they can understand how the world works. We need people to feel rich in health, not wealth. Those who wish to hold vast wealth do so because this wealth makes them feel secure, and they can hide their insecurities in doing this. They hold their wealth as a means of protection also. If you take away their wealth, what do they have? Without their wealth, they encounter insecurity and their feelings of worthlessness as one human being amongst the others. One example i like to use is...if you put a rich person and a poor person on a boat in the middle of the ocean; they have no means of contact with anyone else; the boat starts to sink and they have no life jackets. Who survives? Neither, because when you strip a person of their wealth and possessions, we are all the same!

Murdo Mc Sponge

On law creation. It would be nice if each and everyone of us could create our own laws, but that is not a realistic wish. Same applies to countries in the EU.

Once you join an organisation you have to abide by its rules/laws. The EU is no different.

I am no expert on EU emanating laws but I have seem argument for and against different EU laws amongst Solicitors and other legal people.. Even they cannot agree on this issue. As such I am not any wiser which are good laws and which are bad. What I am aware of is that the way some of our laws are implemented via the courts, are a total disgrace. One example of a court judgement I have seen on a boundary dispute can only be described as a legalised theft of a piece of some-one's land.

Prof Eman, regarding the issue which you mention 'legalised theft', bank bailouts comes to mind. The same occurs in the stock markets and many other financial instruments of the current financial world. One prominent means of legalised theft is the creation of, and distribution of a plethora of paper/electronic money to create a boom. When a bust occurs and this paper/electronic money is withdrawn from the system, who acquires the tangible assets via mass repossessions? The Banks/rich of course. If you watch where the real wealth (tangible assets/natural resources) moves to, you can be certain the system in which this happens is deliberately created for the benefit of a few.

an elder one

EU involvement is 'corrupting' UK democracy. Please give examples.

Your last paragraph. 'One nation' stealing the Tories clothes. Many people believe that the modern day Tories are the most right wing ever, a Party of the rich for the rich, not a Party of the "One nation." ? Your response surprises me.

Ryan McC

You are absolutely right.

QE- electronic virtual money-is there to support the rich, on the BoE's own admission.

Dear all

Just a brief comment relating to PVT - Property value Tax.

This morning I noted via Yahoo News - UK finance minister rules out 'mansion tax'

"Speaking before the Conservative Party's Conference, Chancellor of the Exchequer Osborne warned that if introduced, it would quickly spread to more modest homes. (i.e. those valued below £2m). The protector of modest Britain has spoken.

Again to-day - BBC News politics - Conservative Conference: Cameron rules out 'mansion tax'

Prime Minister David Cameron has ruled out a new tax on expensive properties but vowed "further action to ensure rich people pay their fair share." But no indication how this would be done. Wealth tax is not in as a goer, but more cuts to the welfare budget are on, with a requirement of £16b of spending cuts in in 2015-2016, presented as needed to protect things like hospitals and schools. The protector of things like hospitals and schools has spoken.

Whereas even a one off PVT of £10b, or approx an average of £800/property for the top 50% of properties, would be most helpful in the current climate.

on EU

David Cameron-

I would veto EU budget

"I sat round that table - 27 countries, 26 of them signing up to a treaty and I said-

This is not in Britain's interests, I am not signing, we're not having it.

Opposing 26 countries, which form your largest market could be dangerous.

Continuing my last post.

David Cameron should have continued to say-

And I walked out on them.

No British Prime Minister had ever done that before, not even Mrs T.

Diplomacy at its worst, whilst playing to the Conservative Eurosceptic lobby.

The question does arise - Is this Government the most dogmatically motivated ever? So much so, that it cannot see the wood for the trees?

This Government is not dogmatically motivated just overly mindfull of the fact that it is in bed with the lunatic fringe.

Prof, "EU involvement is 'corrupting' UK democracy. Please give examples."

I've no such intention; as I stated, mine was simply a broad comment to match your own, ergo "Leaving the EU is unlikely to improve our democracy or democratic systems. Little to gain here in this respect by leaving the EU".

My feeling is that this debate has reached its inevitable impasse; in politics it comes down eventually to individual proclivities - crudely put - gut feeling; partly in the genes and partly nuture. In breaking down issues of democracy and personal judgement of anything into particulate factors one can generally prove whatever one wishes to conclude, it all depends on which pieces of 'the curates egg' ones finds good at tyhe time and which pieces are bad or just nominal in relative terms.

Those are the sort of things intellectuals like to exercise themselves with, but I ain't one of those, neither by wit nor inclination. However it does concern me a lot whether things work or not in comprehensible terms.

On the question which some have raised, of who rules the roost, the matter of what proportion of the population holds the major purse is meaningless; what constitutes big, what is small or acceptable; there's no telling, it is a matter of personal sentiment based on an individual's condition. Overall the distribution of wealth and influence will always follow the natural laws exemplified by the bell curve of gaussian distribution. Admittedly the degree of difference between the highest and the mean in the context of wealth is something that the financial market determines and is something the powers that be are endeavouring to mediate in, the conclusion of which will never satisfy everybody. The matter of the chicken and the egg came up earlier; so a question that may be asked is, are some people rich because they have power or do they have power because they are rich; at some point daresay the matter becomes an organic cycle, a feeding spiral, whatever it's called.

In the real world we can't all be winners and there will always be some who feel themselves losers and have niggling resentments whatever their circumstances; the majority don't feel that way I think but are easily fomented into dissatisfaction and resentments in such conditions as the present; however despite everything the truly needy, must be properly looked after: 'needy' an interesting concept for debate!

Wealthwise I lurk somewhere in the middle of the bell curve I think, that some are stinko has never bothered me, I assume, naively perhaps that those with the money have to put it somewhere to advantage that eventually serves the populus with occupations, after they have spent what they want on fripperies that incidently also provides an occupation and income for somebody in the production thereof.

Both power and wealth I think are a consequence of the possession of wits and inclinations - attitude to risk, energy and strong desire. If you want it, work at it, but don't envy those who have succeeded.

joe stalin

Not exactly clear which lunatic fringe you are referring to?

an elder one

Quite a balanced response.

However your comments relate to a normal distribution/bell curve and as the rich and poor divide has been persistently widening, it is no longer a normal distribution. The wealth is skewing more and more towards the rich. This relates to what Ryan McC means by saying we are approaching GAME OVER. The suggestion is that this trend cannot continue for ever.

Prof, I can't quarrel with abstracts, by 'normal' I assume you mean 'acceptable' distribution, a concept that is always with us and a matter for the vote by the populus, if only the politicos can define it for the purpose in their agendas should they have the wit.

Looking on the bright side, in this way over time what becomes excessive in one direction about the assumed norm does become corrected but then leads to an excess in the other direction; again, its in the natural behaviour of living things that are never still, entropy rules OK, we'll always be putting things back together again. However we shouldn't let things get too far out of hand, which we have done just now motivating no end of resentment which will take rather a long time to diminish.

How's to do it; the banks certainly need effective regulation for one thing to avoid excessive misappropriation of money by themselves and by the populus, but that does not address the matter of what is a reasonable personal living share in a balanced economy, or even what constitutes a balanced economy. It is one I think in which there is opportunity for everyone to be inventive productive and/or able to make a living. Which brings us to education for the purpose and a lightly regulated business environment to encourage the venturesome. Once that balance has been achieved, preoccupation with the rich should diminish as part of the norm.

an elder one

Just to clarify what I meant by a normal distribution. A bell in which one half of the bell is a mirror image of the other side of the bell i.e one occurring naturally as in IQ for example. Very Few geniuses and very few mentally incapable of doing anything for themselves.

prof the Liberal Democrats

joe stalin

If it was not for the Liberal Democrats, the Conservatives would not be in bed at all.

an elder one

Just wanted to clarify some points on the skewed distribution.

Talking of fairness and matters relating, some people read screwed for skewed.

Screwed by the bankers, financial services , where even IFA's are on the receiving end of hate, and other rich people, where for example Directors pay less tax then their secretaries.

The suggestion is that 10% rule the 90% for purely their very own wealth creation, or worse still some believe the ratio is 1% to 99%, as 'we are the 99'

This is what some refer to as approaching 'GAME OVER'

If the Conservatives had had any inkling of just how idiotic LD politics have become they might have gone with Labour to once and for all rid this country of this electoral liability. At least most can still remember that Ballls and his mates virtualy bankrupted this country but sadly they also believe that a money tree grows in the back garden of number 10. Hopefully teh LD's have done enough to date that they can once more be put in a nice warm place and be given their medication for avery long time.

joe stalin

Your tolerance of anything not conservative in the extreme, reminds of the tolerance level of Stalin. You have chosen a most appropriate name for yourself.

FWIW I believe that Labour nor the LD live on the same planet as the rest of us. It is not a question of tolerance it is simply needing to get this country back on its feet. It is clear that it cannot be done through concensus because there is n't any with the two afore mentioned parties in denial. over the cause of our curent perdicament. the sad reflection is that we simply can no longer afford socialist ideoligy no mater how warm and cosy it sounds. The Labour party have seen to that.I am no extremist but action is needed and needed now.

Prof, I believe this current preoccupation with anti riches is something of an aimless distraction; the riches per se of those who own them have to be put to work on something beyond what is spent on the goodies of life and notional assets - an instinct of not only the rich; see what has happened to house prices generally and the possessing of Ipads and so on - the money will be invested somewhere - otherwise it is useless to those who possess it - and thus create a vehicle for the occupations and livelihoods of others; even the huge amounts spent on yachts and the like provides work and a livelihood for someone.

However, clearly not enough cash is getting into the pockets of the populus and understandably they fret - myself included from time to time if I think about it - it is clearly not fair nor does it serve the best interests of the country (gdp and balance of payments). Despite that, I cannot see that screwing the rich will serve; it may satisfy some, that the rich they have come to hate will have got something of a comeuppance thereby, but will likely have an adverse effect on the country's fortunes.

A large part of the problem as I see it is - as I think we both agree - is our out-of-proportion dependence on financial services. Excellent as they may be in augmenting our balance of trade, have also afforded considerable riches to a few. Though we do some excellent other business in engineering our emphasis on financial services tends to make us a bit like the middle-east whose livelihoods - of the sheikhes - are mainly dependent on oil resources. Much of finance to me has always seemed a bit like growing money on trees, with all its instruments for mysteriously manipulating the appropriation of money.

We must somehow in this country create an environment providing a means for profitable work - making things to trade - for the majority; we need a bigger cake to share, rather than just trying to share the present inadequate and diminishing cake. I don't dismiss some sort of ameliorating activity by the government in the short term because the cultural change will take some time to come about, but come about it must.

It also occurs that in the matter of shares, some other than the perceived over-rich are also getting more than their fair share of state support, for doing nothing at all or breeding whilst we are already relatively overpopulated.

Oh, and Prof, try not to use epithets such as 'Stalin' or 'Hitler' as some - not you - have done with regard to political commentary, I confess I have been a lifelong Tory supporter also with little regard for that faction of the chattering classes and have always regarded them as a bit of an irrelevance, though their current essay into government must be quite a useful education for them. I would have preferred to have got a straight Conservative win at the last election; two main parties are enough; perhaps the Libdems might replace the Labour party if they can build on their new experience.

joe stalin

Action is needed and it is needed now.

Absolutely correct.

However I beg to differ that only the Labour Party are at fault. Our out - of proportion dependence on financial services, as described by, an elder one, started well before the Labour government arrived. I distinctly remember Mrs T's statements about our people, and that definitely included the financial services sector. it could be argued that it is Mrs T's 'our people', more commonly known now as Thacher's children, who have now caused the biggest problem.

The current situation is not about socialist ideology, but about survival in the most turbulent times we have seen since 1930's.

The chosen route of austerity, via increasing unemployment, is not working, and only adding to our problems, per the Greek example, time to have a re-think about growth. Still I suppose that is a socialist concept. according to you.

Prof Eman,

Perhaps you could tell us the unemployment figures the day this Government came to power, and what they are today?

an elder one

I am not dogmatically tied to hitting out against the 'richer' end of society.

My point is that is the rich who have the money to help us get out of the current mess, if borrowing is out of the question. My stance is that there are three or even four factors of production, and all we are doing is trying to make just one of them, labour, more attractive by reducing their costs. What about investment, in our ever changing world of technology, for example?

As there was an over - reliance on the financial sector, what we have now is an over-reliance on the labour factor of production. Our solution to the current problems requires more that.

Hence my belief that the rich should contribute more to fiscal policy which will allow growth to blossom and investment to take off. In my case I have suggested the PVT=Property Value Tax, as previously mentioned.

I was the first to comment on this board on the 26th September - its now the 9th October!!

There has been some rubbish spouted here now I finally read that Margaret Thatcher is to blame for it all!!!!

mark jukes

Where does it say that Mrs T is to blame for it all.

I thought it was said it could be argued that some of our problems started with Mrs T.

Prof I am not suggesting you are dogmatic, or anyone is at all for that matter with regard to the perceived rich, simply I observe a generally pervading atmosphere of opinion that something is rotten in the state of finance and the people are vexed.

I think we all agree that something must be done to better balance the economy in order to enable it to recover as quickly as possible for all our sakes and it's my understanding that the coalition is endeavouring to address the matter. I'm not a close watcher of that effort but wonder if they have the wit between them.

The meaning of your penultimate para. is unclear, but I admitted that an increase in the production of goods as a means of correcting the balance of wealth creation was long term and some sort of immediate stimulus is needed.

Regarding your last para. I confess the detailed arithmetic of taxation and its likely effectiveness as a solution is something I don't feel competent to argue, but my uneducated impression is that PVT is 'a can of worms'.

Thus I think I've little else to contribute here; thanks for the debate.

an elder one

Likewise thank you for the debate,

It is always nice to test ones theories and see what others have to say about them. I have learnt a lot from our exchanges

Many thanks again

Prof you are right it is about growth. why however would any one invest into this country if they get nothing but abuse for doing so. According to the vocal minority success sucks and those that are or want to be successful do as well. you maybe you should go out and have a look around you in the estauants and bars etc and you will see that they are full as are the theatres and football stadia. Those that have work are doing just fine thank you. so waht is the answer get more peole to contribute and make them go out to work and stop relying on hand outs from the state. I think te state employs 51% of te total workforce that is just too much, privatise privatise. but more importantly stop the politics of envy culture perpetuated by labour and lib dems. we need people to be successful in this country not soemwhere else.

joe stalin

I am pleased that we are in agreement on growth.However the problem is - How can this growth be achieved in this current unique climate?

As far as I am concerned it will not be via austerity - no evidence that it can give growth in the near future, so what is left is Keynesian Economics, and stimulus.

To create stimulus we can either borrow or tax, or settle for a combination of both. Borrow we can a little, because of low rates and our AAA rating. But it is not clear for how long, for if there is no growth we are more likely than not to lose our AAA. The less risky path is to tax the people who have the money i.e.the rich. In the circumstances I do not think that it is anti-British or anti -business to ask the wealthy to make a contribution in the short term, via Mansion Tax or my suggested PVT-Property Value Tax, so that we can all be better off in the longer term.

joe stalin

what i am talking about is-

S/T pain by the rich for L/T gain by everyone in the UK, as opposed to

S/T gain by the rich for L/T pain by everyone in the UK

Prof What you call the rich are already carrying a disproprtionate burden. The top 5 % of earners contribute something like 40% of taxes raised while the top 10% probably do more than 60%. The top 10% pobably dont earn more than a £100k year so who is rich. Take current tax rate and NI the so called rich have to work for 7 months before making any monet for them selves.Unlike I believe the burden should be spread more evenly and more people should contribute. Is n't it incredible that the estranged wife of a man that has been fighting extradition at our cost for 14 years shoud be living at our cost in a £1m house in west London? The problem Prof is that there is no accountability, the money raised in taxes is just spent it just disappears. We have mediocre healthcare and schooling, our armed forces frequently find them selves out on a limb and our policemen have to confront armed psycopaths with little more than a smle. So where is all the bloody money going? The top 10% probably have medical insurance and send their kids to some form of fee paying school so they don't derive the benefit do they. Yet they are the most likely to be mugged or burgled. Before people like yourselves advocate the so called rich paying yet more, perhaps you might wish to consider how the money is spent how much is being frittered away through excessive bureaucracy free-loading and featherbedding. it is time to be pragmatic rather than finding a cheap political and populist solution which simply does not provide what is needed even if it seems to make people like you it would seem a little better. Just like I keep telling my kids tghere will always be somebody who has more money than you or has a nices car than us or is better at sport or even better at learning. Just make the most of what YOU have and strive to do better.

A fair society prof is indeed that and not one where 10% of the working population work their proverbials off to be told they have to give up yet more to prop up a wasteful brokne system open to persistent and blatent abuse.

I have more information now on the EU

Many in politics will seek to be offering a straight in or out referendum to the electorate at the next General Election. This would probably be well received by the electorate. The disadvantage of this however is that the result would weaken the UK's negotiating position with Germany on EU reform.

Germany is starting to take seriously the possibility that the UK might leave the EU. This strengthens the UK's negotiating position because Germany values the UK's presence within the EU. This UK negotiating strength could be reinforced by a referendum that allowed for a period of negotiating, or similar.

Earlier postings have expressed disappointment at the lack of information on what our future would be if we were to leave. This remains uncertain. However, I have learned of a website and publications thereon that contain options for change that are claimed to be properly researched. These claims are made by MPs, who will therefore be accountable at election time for what they claim.

Their 'Options for Change' 29 page Executive Summary and 260 page Green Paper are available on:

www.eufreshstart.org

joe stalin

Just before I give you a fuller answer, I would like to further explain my S/T L/T pain/gain equation.

Some of the rich have had 50% increases under this Government, I would question whether that is fair in the current circumstances, or whether to many of the richer what I suggest will give any real pain.

Basically my assertion is that they should contribute some of their gains and INVEST in the future. The suggested way is increased taxation on their ever increasing pots of money.

What I am pointing out is that without playing politics as presented by the likes of The Daily Mail, it is good economics - Keynesian economics, as all else has failed.

The BoE has been trying all sorts of things to stimulate the economy and get some growth, but so far has failed to make any impact, and is unlikely to have any significant impact under the present austerity policies.

For example the Fun for Lending Scheme and other, to get banks lending. They have forgotten that it is not much Fun to take out Loans under a reducing aggregate demand situation, as under our current austerity, when one does not know how long one is going to stay in employment.

joe stalin

On benefits and similar.

No system is perfect, they all have anomalies, and that includes our welfare system. If you are aware of any perfect system without anomalies please advise.

What my point of view is, if there are anomalies, then lets deal with them, but that should not be a reason for destroying the system, which seems to be the way we are heading now.

As regards fairness is it fair that 10% should have amassed 90% of the wealth? I wonder ?

Prof, I hadn't intended to continue on this blog, but your regard for PVT aroused some further thought. PVT is I think a crass idea; it is unfair on those who reasonably invested in a home and real assets to protect their well being and future livelihoods in old age. Where do you draw the line in values for those who should succomb; I don't recall the levels that have been suggested - not that it matters since the principle is I think rotten - but there will be people with current very modest means who find themselves caught in the net and NOT DESERVING TO BE ROBBED thereby. In any case valuations are simply on paper; reality comes when you come to sell and that will only occur in a current environment, as some have discovered in negative equity.

Indeed, once the principle has been established where do you stop; the argument could easily be extended to all assets procured by sensible conservative (with a small 'c') people.

The time to tax wealth, which is the objective, is when the assets are purchased (and the cash is moving) and this is already done to some extent - in the case of a home - by stamp duty, is it not. But further than that there is the depredation of inheritance tax, which has progressively destroyed past marginal farming businesses for instance.

One might go on, but the subject is tiresome an much of its ramifications is beyond me, especially with regard to those who own companies. No, the thing is a can of worms I suggest you forget it.

Prof, seems to me that you have to be incredibly naive to talk about short term taxes. Either that or you are being disingenuous in pretending that "the rich" will have some short term taxes.

George Osborne is concerned that a "Mansion" tax, by whatever name, will creep downwards. I believe he is right and future governments, including Conservative ones, will be tempted to introduce lower thresholds, either in absolute terms or in real terms by allowing inflation to erode the threshold.

I note in an earlier post you mentioned taxing the top 50% of properties with your Property Value Tax, whereas you also talk about the top 10% amassing most of the wealth. Do you believe this top 10% own 50% of the property?

We have tried this before, also as a temporary tax. It was called the Window Tax and lasted for 156 years. Various methods were developed to get around this tax - you can still see houses today with windows that were bricked up to avoid the tax or built with bricked-up windows ready for glazing in the event the tax was repealed.

I am sure "The Rich" would be just as creative in property ownership in response to any Mansion tax. How about a charity providing shelter for the homeless with a clientele of one family? As ever, the tax would fall not on the top 10% but on the poor, benighted middle classes.

an elder one

At an average of £800/year on a progressive basis, the top 50%of properties are not going to take a big hit.

The above would be subject to the same exemptions as Council Tax, so it would allow for people with specific difficulties.

As regards pensioners, and I am one of them, there is an increasing problem as their numbers increase. One cannot stop taxation because we have an increasing number of pensioners.

As regards inequities under our taxation system, perhaps we should revise it and make it more sensible.

Finally, we are in a big, big crisis, bigger than the 1930's so many believe, so crisis methods to deal with it are required, and that includes pensioners as they have already discovered.

In my opinion PVT is the way forward.

I don't like PVT principally because it is impossible to provide for it in retirement. If any politician says otherwise then they are not telling the truth.

Nor is it much of an option to trade down in the housing market to fund PVT payments: when moving home, a shed-load of money has to be paid to the government and others and the new home itself may become subject to unaffordable levels of PVT as years pass. Further, moving home is unpleasant and stressful.

Richard S

PVT is a tax that would be in lieu of the Mansion Tax, would affect more people, but in a lesser way.

Almost nothing at the starter end, but progressively rising at the top end, with an average of some £800/annum.. It is in some respects, targeted more at the rich that the poorer, an example of a "creep down" Mansion Tax. In our circumstances I make no excuses for it.

As regards do I believe that the top 10% own more than 50% of property value, the answer is probably yes. If you can find figures to disprove this I would be grateful to hear from you.

As you point out past experience has shown that taxes tend to linger, but I do not see this as the reason not to take the life belt, and to drown in austerity, in place of it..

As regards PVT there would be no get outs, as there could be under a Mansion Tax. Anyone paying the Council Tax pays the PVT....Full stop. Pure and simple.

Paul 2

I sympathise with your feelings about home in retirement.

However as the tax would be subject to the usual exemptions under Council Tax, the most needy would escape it. Are you really suggesting that retired persons living in a mansion, could not raise a few hundred pounds in a year to pay PVT, and would have to immediately move?

joe stalin

One more point, reference your post at 08.13.

The top 10% as they hold 90% of wealth should pay 90% of the total tax take.

The 5% likewise should pay as much tax in %ge terms as they hold wealth.

I think that is fair. Don't you?

Unfortunately I have not had much time to follow these posts recently. Prof Eman, regarding your post (at 19.29) that a tax should be payable in proportion to the overall wealth share - i think this is a brilliant idea!!!

Ryan McC.

What makes you think is ideas do that?

Geoff Downs, i was referring in particular to Prof Eman's idea regarding paying Tax in proportion to wealth. My rationale for supporting Prof Eman in this instance is that it advocates my egalitarian ideology where humans are treated equally. To understand more profoundly how the economic system is currently operating, i would suggest you (or anyone) do the following. Get a piece. Draw a big circle on the page which is to become your pie chart. Divide the pie up as follows: Mark a 90% portion of the pie as wealth controlled by 10% (minority) of the human population. Now mark the mere 10% left as controlled by 90% (majority) of the human population.

Now, regardless of how many discussions and debates take place regarding Taxes, inflation, interest rates, house prices etc. etc. etc., you can see from the pie chart that you have just created that the fundamental problem with the economic system is the current distribution/disparity of wealth share. Does the pie chart demonstrate an equal distribution of wealth? All these discussions and debates are merely distracting people from the real underlying 'cause' of our current economic predicament.

Now consider wealth in terms of power/control. As we all know, money can usually buy you ANYTHING! 90% of power/control lies with the minority (10%). It is this minority that determines the dynamics of the economic system. So if the minority decide to restrict the quality of life of the majority, they just have to manipulate the economic system accordingly.

Why might the minority wish to reduce the quality of life of the majority? There could be a number of possibilities. Could it be a means to acquire greater control, perhaps of a global magnitude? I think global integration is inevitable, as is a one world Government, whether people like it or not. How this new government is implemented is the worry, as is the ultimate goal of the elite minority. I just hope their intentions are benevolent.

I probably should have stated also that many Governments are now broke. No better way to enslave people than to put them in debt. Without money, the Governments are losing control. Greece is a good example. They must adhere to certain conditions to obtain bailout money, in other words, they are being controlled by an outside body. Think of the new world order in terms of Europe on a global scale.

Some may benefit from reading up on plutocracy. There is also a book available on Amazon by Jim Carrs 'The Trillion Dollar Conspiracy'. It is an excellent read but i would question some of the material within the book. I caution everyone not to believe everything they read but make your judgments based on balance of the facts/evidence. The book is certainly useful for thought provocation but maybe not so useful for anyone who is of a paranoid disposition. There is a lack of critical thinking required by individuals in the current education system, at all levels, and this is something which is frequently apparent. It is a sad observation.

Ryan McC.

If you are simply advocating taxation according to wealth, that's fair enough. Although Prof Eman's tax on very rich properties may or may not have merit, his tax on lower INCOME families does not. Having had numerous discussions with him, I'm not going to keep commenting on this because he knows my views.

Geoff Downs

Your previous post on unemployment in the UK.

Figures are easily available via the ONS-statistical Bulletin

Labour Market statistics

A brief summary over the past two years

A brief summary

No of people in 000's Percentage

Sept 2010

No in employment (16-64) 29,158 70.7

Unemployed 16+ 2,467 7.8

Inactivity (16-64) 9,264 23.2

Sept 2011

29,170 70.5

2,510 7.9

9,380 23.3

Sept 2012

2,9560 71.2

2,590 8.1

9,010 22.4

The unemployment has risen from 7.8% to 8.1%, and that is a conservative estimate it does not allow for many more who are now in lower paid work such as part time. the true rate is believed to be about 10% or more.

This should not surprise you, follows the example you gave earlier of a business with productivity up 25%, but number of employees reduced.

if you want to delve deeper into the labour market I suggest you read articles like - David Cameron: 80,000 rise in unemployment is disappointing The Telegraph 14 Sept 2011.

On benefits and matters relating

There is an interesting article in the Independent to-day.

The year the grains failed: Why poorer countries are scheduling 'food-free-days'

Perhaps we should be considering this approach with some larger families who have their benefits cut?

On taxation

The Independent to-day. Facebok branded 'immoral' over tax payment. Paid £238,000 on earnings of £175m. i.e a rate of 0.136%. Fair?

Prof Eman,

Thanks for the figures. In many ways all through our history we have had periods where Government allowed the economy to get in a mess and then the next administration had to try and clear it up.

Such a period followed the Labour Government of 1976/1979, and the subsequent Thatcher administration.

Now we have had the boom of the Blair/Brown period and the need to clear up the financial mess.

The first point is that if Gordon Brown was still P.M. the unemployment figure would be rising. You will find no period in history when a boom has not been followed by a bust.

The Government is trying to reduce debt by austerity. QE is an attempt to do many things including trying to get people to borrow more. In a sense these policies are trying to shift debt from the state to the citizen.

In many ways with QE we are in danger of trying to repeat the credit boom again, luckily I don't see it working.

Just a thought on Education.

Would it not be useful if our posh boys knew the price of a pint of milk.

I feel that they should experience inner city schools as well as public schools to round off their education.

Perhaps then the concept of 'one nation' would be better understood?

Perhaps this should be put forward to Mr Dove and suggested as another reform in education to improve it?

Geoff Downs and others

There is an interesting article, available through citywire - business and economics section - Britain's £375b money building programme has run out of steam. Well worth a read

Lord Turner warned that QE had left Britain facing "a liquidity trap" in which replacing private sector holdings of bonds with private sector holdings of money has little impact on behaviour and thus demand."

He then suggest that an innovative approach is necessary.

My PVT, would in my opinion, fit in perfectly into this new approach, and into a Keynesian Demand led approach rather than austerity.

Rather than improve teaching standards the pprevious Government sought the bring the level of what is acceptable down. hence the whingeing when the nations kids got D's in english when they were expected to get a C. Should teachers not have been preparing their kids for an A*?

Ryan McC and others

There was an interesting article in the BBC News Magazine - A Point of view : What would Keynes do/ 22 July.

Keynes came to the conclusion "We completely misunderstood human nature, including our own."

Keynes discovered just how deluded this faith in reason was when in 1919 he attended the Versailles Palace Peace conference as part of the British delegation. The European continent was in ruins, and millions were hungry, actually starving. Yet the victors in WW1, who were supposed to be planning Europe's future, could not escape from squabbling among themselves and plotting revenge on a defeated Germany. In is prophetic book The Economic Consequences of Peace, Keynes forecast a popular reaction in Germany , born of desperation and "hysteria " which would submerge civilisation itself.

The question is - Will the squabbling of the rich over the spoils of the poorer and the plotting of revenge against them, drive our world to an extent which will "submerge civilisation itself" instead of planning for the future?

Joe Stalin, i'm wondering have you ever asked yourself, or has any others here asked, why the standards of education are so poor. I think the dumbing down of today's students is to ensure that they only progress so far up the economic ladder, preferably not beyond the majority of people who control a mere 10% of the wealth. I think the motive behind this dumbing down of students is to ensure they don't become one of the rich. Imagine the rich as like a family. They like to keep it in the family.

As i explained in another blog recently, the education system lacks any requirement for critical thinking by students. Critical thinking is crucial for creativity and originality. I watch people engaged in conflict every day in life about petty things, and all this because they are not taught to colligate facts/evidence. Instead hypocrisy is prevalent amongst many people simply because they are unable to use information from one set of circumstances which are analogous to another set of circumstances. It is like there is a gap in their thinking processes, something missing - that missing something is the critical thinking element of the cognitive process - this has been lost in the education system. I have just turned 29 so I'm not old enough to know if critical thinking was ever part of the education system before my time. It certainly wasn't in my time. Perhaps some bloggers older than i could provide their perspective for me i.e. whether critical thinking was ever part of the education system.

When i was undertaking my degree, i was assessed throughout the entire course via memory tests i.e. memorising a multitude of theories created by others then going into an exam hall to write them out. I was not allowed to be creative or original. This was forbidden! Everything had to be based on the work of others. That's why i referred to exams etc. as memory tests rather than based on any 'intelligence'. There was no critical thinking whatsoever required throughout the entirety of my degree. This was a sad encounter for me and made me ask why i was not allowed to be creative.

Through this and by observing many others, i have come to a conclusion (preliminary pending further evidence to the contrary) that critical thinking is deliberately not part of the education system for the reasons i have stated above. We will progress and advance as a society far greater if we were all educated via critical thinking. However, with the majority being dumbed down, the human race as a whole can never realise its full potential. I believe this great underlying potential could bring us all profound peace and tranquillity.

BOOK RECOMMENDATIONS for those with the time...

Dr Bruce Lipton 'Spontaneous Evolution' is excellent and his initial book also 'The Biology of Belief'. I rate both books highly.

Best wishes to all!!

Prof Eman, thank you for the information :)

Ryan, the education system is not necessarily poor at all - it depends on what you think it is for. As a means of preparing students for life, teaching knowledge and what you call critical thinking it is indeed lacking in many respects.

However, the mistake is to assume that the education system is for education. It is not; its true purpose is as a social engineering experiment. As such, its results will not really be fully understood for another 50 years or so.

Richard, thank you for your comment. I will endeavour to elaborate further. Take an everyday phenomenon in life, 'conflict'. Conflict is universal and extends across the globe. One has to ask "what is conflict?" Essentially, conflict is a social construction and exists only in the mind. It is a physical phenomenon realised via psychosocial processes (in lay terms, the mindset involved during interaction between people in social situations). Yet, conflict is so widespread.

Why is this so?

You, and others, may disagree but i truly believe conflict can be eradicated, almost entirely, with an adequate education. I say 'almost' because most phenomena tend not to be absolute across any population. I agree somewhat with your view that the current education system is a 'social engineering experiment', however, i would incorporate all systems into that view (economic etc.), and in the context that life itself mirrors the ultimate experiment.

The education system currently teaches very limited knowledge. I would like to see the education system overhauled so that it actually prepares people for the real world and not just as it currently does, for people to become a zombie in the system (a slave) chasing a false happiness (wealth for oneself) rather than enjoying true happiness (good health for all).

Ryan McC and others

Just to continue the next paragraph of the article from the BBC.

"We do not find ourselves today struggling with the aftermath of of a catastrophic war. Yet the situation in Europe poses risks that may be as great as they were in 1919. A deepening slump there would increase the risk of a hard landing in China on whose growth the world has come to depend. In Europe itself, a downward spiral would energise toxic political movements - such as the Neo-Nazi Golden Dawn, which won seats in Parliament in the last election in Greece. Facing these dangers , Keynes disciples insist that the only way forward is through governments stimulating the economy and returning it to growth."

Some thoughts on the economic situation/conflict and where they could lead us. There does seem to be less and less happiness in this world.

Prof Eman.

With respect Keynes did not suggest stimulating the economies when drowning in debt. He suggested Governments saved in the good times and stimulated in the bad. The Government didn't save in the good times, so we are broke.

Ryan McC,

I see a problem i some of what you say.

For instance I would argue the State is more caring today than it has ever been.

Offenders, the sick, the unemployed, minority groups, the elderly, etc, etc, have all benefited from improvements compared to many years ago.

I pose a question to you. Is it possible that the so called looking after myself attitude that you claim exsists, as been driven by the nanny State?

Geoff Downs

Broke we might be, but not broken.

So we need to take careful account of our situation and decide how to move forward.

The best way forward seems to be Keynesian, even though we have a debt mountain, all other ways have failed internationally.

Prof Eman, certainly there is less happiness in the world. I have proclaimed ad nauseam that people are chasing a misperceived happiness (accumulation of wealth and feeling superior) rather than true happiness which i would define as 'a collective, positive state of mind'. An integral part of happiness is also equality because if everyone is equal, no one feels inferior nor does anyone feel superior.

I'm sure many wonder about the motives behind my posts on this site. To clarify, I tend to reduce the whole into its integral elements. You can never understand the whole without understanding the integral elements. Thus, i tend to view all phenomena pragmatically at he basis rather than via the mechanisms within. Hence, when i post on here, it may seem i am on a distant planet.

The extract which you post is one of the many which worries me at times. We all know how very influential and powerful the media is. With the constant bombardment of negative posts regarding the economy, every day, one wonders if all this negative media coverage is creating a self-fulfilling prophecy. If people see chaos approaching, they go into a protection mode and their actions will reflect such a mode (in terms of their money or otherwise).

However, I do not believe we should be kept in the dark about any truths. My problem with all media outlets is the credibility of the information they are publishing and it is difficult to ascertain what is fact from fiction. As everything is for self gain, every piece of information must be questioned and treated with caution. One should ask what has the author to gain from the published material?

Prof Eman,

I would refer you to your last post and last paragraph. The Keyensian ideas are yesterdays answers. This is debt as never seen before. I think in that respect you haven't grasped the problem fully.

Geoff Downs

As austerity is failing internationally, what is your way out of our problems?

In my opinion there is just the Keynesian way.

With respect I have grasped the problem fully, in some of my posts I refer to the biggest problem we have since the 1930's and maybe even bigger that that.

Ryan McC

You have previously mentioned enslaving people in debt.

There is an interesting article in The Independent to-day under Blogs - What's killing our economy? Money. by Dominic Frisby.

Makes reference To George Orwell

Refers to manifestations-for the first time in history, my and the next generation is poorer than its parents. and as parents currently know kids can be very demanding.

Across the nations the richest 400 people in the world have assets equivalent to the poorest 140 million.

The wealthiest 1% of Americans pocket 1/4 of the country's income. Through property, bank accounts, investment and art, they control 50% of total US wealth. With e.g. the City boss earning 1,000 times what the lowly cashier does.

Then Qu; Why does everything - except mass produced goods - relentlessly rise in price? Ans-Fiduciary money.

Some benefit hugely from this system: those who control it, and those who are at or near its point of issuance i.e. Government and banks. As well as enjoying a monopoly, they have the power to create money (printing or lending) and to charge interest on it. They also get to buy assets with their share of new money, before prices rise through circulation.

Meanwhile the rest find our savings and wages, buy less and less, so we have to take on debt, and pay interest. There is a constant transfer of wealth and it compounds over time.

The few benefit at the expense of many.

It's led to the horrendous gap between the so-called 1%(the super rich) and everyone else.

What is required is a change in money which is possible?

I think it is rather sad and pathetic that we should endulge in social engineering to cover up for afailing by the teaching profession. grades are all well and good but at the end of day when you arrive at uni you have to look across the isle and then there is no place to hide or perhaps the social engineers will change that too.Teachersin the stae system in particular are failing our kids in a way that would not be tolerated in the private sector.

Prof Eman,

In my very first posts I said austerity was not solving the problem, but stimulus was simply adding to the debt. You replied we have to do something. At present no one knows the answer.

When people think of Government spending, they naturally think of education, the police and the health service. Plus of course unemployment pay.

Mandated Government spending is also critical. That is spending imposed by the Government on the public and private sector under the broad heading of regulation, but including many other things.

Ours economy for years has been consumption driven by easy credit and debt, now those levers can't be pulled and therefore recession must follow.

People will struggle to spend and afford debt, any further burdens put on them will have even worse consequences.

Geoff Downs

"People will struggle to spend and afford debt, any further burdens put on them will have even worse consequences."

Not for the people in the top 10%, some of whom have had increases of 50% in the last two years.

What I am suggesting is that some of these people make a bigger contribution to the "we are all in it together one nation club."

Prof Eman,

I was not to keen to involve myself here because I keep repeating myself.

As I have said if you want to hit the super rich fine, your plans hit families much further down the wealth ladder. That is not on.

@ Prof Eman

Retired persons can usually raise a 'few hundred pounds' in a year, whether to pay a new tax called PVT or for anything else. That is not the point though.

When politicians introduce a new tax it us usually done at a low rate. Once established, the tax is then increased until the taxpayers scream. When this happens, politicians look around for yet another new tax. It is the uncertainty going forward of this that would be depressing for pensioners, especially those not on index linked pensions (as an increasing number of people are now, with private sector Defined Benefit schemes closing).

By the way, what is a mansion? In much of London it can be an ordinary three bedroom semi with additions and improvements. The people buying these years ago did not think of them as mansions.

Paul 2,

Good point, well made.

Paul 2/Geoff Downs

In PVT it is not necessary to define what is and what is not a mansion. A few more Council Tax bands would be added, and progressively more tax would be collected. for example it could be as little as £20 in the first band but £2000 or more in the top band to give an approximate average of £800. As to progressively the tax rate creeping up, as you point put if not this one then another. Makes little difference to total tax take, and PVT is likely to be more equitable than most.

As to who would be hit most, it is likely to be the rich property owners. It would not surprise me one little bit, if most of the 50% top property was owned by the rich 10%.

@ Prof Eman

What is rich then? If ownership of a house over a long period is the main cause of the wealth, then my previous comments still stand.

On adding council tax bands, just a few of these new bands will not have the really rich quaking in their boots. Property values for them only start in the double figures of £ millions.

Here's an idea to add to your line of thought: if wealth is to be taxed, what about including individuals' pension scheme expectations as wealth? This could be applied to both pensions in payment and those not yet in payment. With annuity rates at their current low levels, this would cause quite a few people to be classed as rich. For example, an index linked pension of £25,000 with survivor's benefits at a 3.5% price would be, at retirement, valued at over £700,000. Adding their house value to this would likely make the individual worth over £1 million.

The next thing that might be suggested is a tax on all personal assets based on notional valuations; a sort of anticipatory capital gains tax, or rather inheritance tax since the price people bought those assets for might be difficult to establish. Think of those myriad civil servants needed to enter homes to evaluate artifacts, etc and examine concomittant documentation for the various verification thereof.

I'm only joking, I think!

We're talking ourselves into the void. The UK is not sunk yet, nor will it be, but there is no quick cure or relief of present circumstance - grin and bear it chaps - the solution to my mind is better education of the masses more relevant to establishing a livelihood for all and a better balanced economy providing the means for all.

Just to put my thoughts into context, I was nine years old when WW2 began.

an elder one,

You have vast experience. What are the changes you have seen over the years which you think have been most beneficial to people?

Geoff, put simply I think the answer is in the material sense, the evolution of technology and medicine and their deployments into welfare' the NHS for the many and compensatory benefits for the needy. Like all things though such facilities are open to abuse.

World wars seem a thing of the past; with the development of modern weaponry people have at last come to their senses (one hopes).

But to illustrate my first point, when I was growing up we lived in a rented house on a farm out in the sticks of Worcestershire, had no water laid on (a pump outside), no electricity (oil lamps and candles) or telephone (goodness! what were those things?) nevertheless despite wartime rationing and continuing after, we were happy enough and if we were ill then the doctor came to visit. My father an engineer got his commission at the outbreak of war and went off with the BEF and we saw him briefly after Dunkirk and not a lot after that, like many others who survived he became a changed man and my parents broke apart.

Sorry if I digress!

an elder one,

Not at all, interesting to hear.

Just to pick up on Paul 2's recent comment and mine that followed, I bought a car for £270 in 1956 that is now on good authority worth £150,000 or more following its restoration - which don't come cheap. Very gratifying, but pure happenstance! this has a parallel with the PVT case, am I to be expected to sell and give a proportion to charity for the benefit of the feckless. including government; they can whistle!.

The government could I suppose put a value on UK incorporated assets and put them on offer as collateral against our debts, though the foreigners are already about that it seems; a thought, why not put a stonking great premium on all the properties they are buying up, including British companies to go into goverment coffers.

an elder one,

Great stuff, now Prof Eman should consider what you have said here. Make no mistake he isn't just talking about the very wealthy. Prof Eman want's ordinary people who have done O.K. to pay more, and you know what, it's always requires more and more.

Geoff, by way of an explanation as regards valuation, the car was twenty years old when I bought it - and I loved it enough to keep it to this day - but the marque had an inheritance of very successful competition in its time and not many were made, it is rare and eligible thereby for just about any notable historic car competition today, including the Italian M M; that is the attraction for those with the cash.

No one in 1956 would have foreseen such a thing.

an elder one,

Lovely story. Watch out for VCT ( Vintage Car Tax ) from our fellow contributors.

Geoff/an elder one

I am pleased to note that you both have a sense of humour, with your extrapolations on wealth tax.

However you do not seem to realise what austerity, in place of growth is causing.

For example, from Yahoo News - Retirees set to lose billions. by Harriet Mayer Fri Oct 12, 2012.

Millions of Britons due to retire over the next few years face a 'double whammy' that risks seeing £11.5b wiped off their retirement funds, according to a new report by the Saga foundation.

"Pensioners are being hammered. they didn't cause our economic meltdown yet they are paying a heavy price as we try to fix it and they face an even tighter financial squeeze in the future.

Coupled that with the experience in the US, where the prices of houses toppled some 30% on more, you could be looking at losing 30% off your prized property possessions.

My advice to you is to start praying for growth, not harp about austerity.

This is where my PVT comes in, an attempt to stimulate the economy into growth. What would you rather do spend a couple of hundred pounds on PVT now, rather than lose thousands on you property, as well as suffer from the austerity effects on pensioners?

@ Prof Eman

Retirees who have paid off their mortgage are not particularly concerned about the value of their home. What they do want is cash to spend so that they can enjoy their retirement and the confidence to believe that their home will remain their home.

These pensioners are being hammered, as you say, because interest rates are low. This is particularly acute for those contemplating an imminent retirement because of low annuity rates, brought about by the effect of government policy on gilt yields (unless the nascent pensioners are in public sector defined benefit schemes or similar).

A new tax such as your PVT will do little to make pensioners feel better about the future. If you press me to suggest an alternative (if it is indeed possible at all to avoid a bleak future) then I suggest that QE is scaled down or abandoned and the economy is stimulated by awarding construction contracts for beneficial infrastructure projects, where the contracts are likely to be won by British companies. The financial markets are not so worried by increased national debt when it is caused by useful infrastructure investment rather than, for example, more health and welfare spending.

To this extent, it is a shame that the future of UK civil aviation/location of airport capacity has been kicked into the long grass.

I could have added to my last posting that if interest rates go up then so will the government's tax take on retail deposits and new annuities (which would be larger).

Paul2

I, as a pensioner, for one would not be happy to see the value of my property fall 30%, irrespective whether paid off or otherwise.

On sensible ways of how to spend PVT, please see my posts of Sept 19 at 12.31 and Sept 29 at 17.26 and 23.26, under the citywire started article - Draghi's OMT: is this the ECB's big gun or big fudge?

Your comments would be welcome.

Prof, we are not joking, except to the extent of some intended ribaldry for your notional PVT - perhaps undeserved; the state of the Nation is no joke we are all agreed - and its likely establishment of a new precedent in taxation principles. Please explain in the simplest terms what it is intended to achieve and to what degree, for on the face of it, it simply smacks of populist revenge against the rich who it's generally reckoned 'made hay' during the boom period of Mr Brown's boom and bust management of the UK economy. I've no axe to grind on that score since I benefitted not at all in the financial hiatus; it's just that envy expressed thus, seems vulgar.

Is it intended to overcome the deficit in trade and/or repay debt.

How would the receipts from PVT compare with 50% (reduced to 45%) top rate income tax as a matter of interest, which was an earlier attribute to the Libdems together with mansion tax .

You may have already given the explanation elsewhere but I am unaware, if so could you go over it again.

Prof, I agree with Paul 2, since I paid off my mortgage years ago it wouldn't bother me in practical terms if the notional valuation of my house fell 30%; frankly I've not tried it on the market and only have a vague idea of its price. One could argue that house prices should fall by 30% in order to serve the younger generations since values became bloated in the boom. So you see we all 'made hay'; at least on paper which I guess is a warped justification for PVT; however such valuations are ephemeral.

If PVT is to be collected by council tax bands, how do you keep it out of the hands of the councillors, unless it is protected by 'firewalls' much'll simply go into their pockets and they're already overpaid and overmanned by some accounts.

Thinking a little more about it I guess if PVT is be collected through council tax bands then we are not considering specific property values at all but simply how many rooms and other relevant features the property has and where it is situated by geography. How does one invent new additional bands though; size of garden and lawns, number of duck ponds and garages, length of driveway from the road, embellishments of ancestry and other apparent signs of inherited affluence, whatever; I don't know, perhaps these are already accounted for.

Paul2

"Your statement- Retirees who have paid off their mortgage are not particularly concerned about the value of their home. What they do want is cash to spend, enjoy retirement & believe that their home will remain their home."

You seem to forget that many people in retirement see their home as their biggest saving/investment/pension pot, which is easily turned to cash via Equity release. Losing a third of it does not appeal to me.

Secondly,. more and more will be forced to turn to Equity release to a smaller and smaller house pot, and some will find that eventually they will lose their home altogether.

As to benefits of PVT for the pensioners, it would be L/T gain for a little bit of S/T pain, but then investment usually means that anyway. They should know and understand this from the time they saved up for their home.

an elder one

As to how the PVT would operate is quite simple.

Councils would be collectors of this Government tax which would go to Government. Something of this sum would need to go to them, the rest would be for stimulating growth activities.

It would not involve any new valuations, except in the new bands, which would be done in the same way as in all other properties, nothing new and exceptional here.

As to putting wrappers like Lib Dem on some of these things is a completely inappropriate way of looking at things. What should be considered is the economic benefit of these things.

I am in no doubt that you are aware of the debate on Keynesian approach v austerity. So far austerity has not worked, so a Keynesian approach needs to be considered. PVT is an attempt to use the Keynesian approach to help alleviate some of the worst effect of the recession/austerity. As such it has no political wrappers and is just plain and simple common sense economics.

Paul2/an elder one

Just to add to my comments if prices drop, the young will be able to afford homes.

Swings and roundabouts here-

-Prices high parents help them on the property ladder through equity release.

-Prices lower they can afford to buy properties themselves, eventually.

Net effect debateable.

My own experience in this sector is that both my lads, both working, are in their 30's and neither has a bought home, nor do they expect to get one in the near future. Unless I give them a leg up or when I have waved them good bye.

Paul2/an elder one

On the further detail of PVT, could I again ask you to look at the Draghi's article, and further at the "Osborne shocks with shares-for-rights contract" citywire article and read my various responses to questions raised about the PVT. I do not have time to make repeated responses again and again about the same issues raised.

Should you wish to raise any new issues when you have read them, I will be only too pleased to respond.

I sincerely hope that you will find time to read them.

Prof, daresay Paul 2, like myself never intended our house as an investment but as a place to live in, enjoy, nurture and maintain without the interference and unpredictabilty of third party ownership; and of course because we could afford to, through employment and the sensibly balanced provisions of finance obtained in those years. One does not overlook the practices of others.

For my own part I can foresee no need for the dodgy expedient of equity release, having invested what I could and can afford in the market; stocks and shares; a risk but as you express it in a different context, no pain no gain. A very modest sum I would add.

Paul 2, like myself probably had a final salary pension from employment. I have also a small with profits annuity from those wretches Equitable Life, now with Prudential and worth less than 50% of its original, not counting inflation. There's the risk in letting others manage your affairs! had I been wiser then I'd have put my spare cash into the market rather than an AVC.

As far as your dislike of a devaluation of your home is concerned, I suggest it's inherent risk and there's not much you can do to avoid it should it occur - do you expect PVT to prevent it? - the answer to some extent is surely, as we are often told, diversification, don't put all your eggs in one basket, it's too risky.

So Prof PVT is just another fiscal invention pretending not to be a tax whereby government can get more taxes from anyone who owns a home in order to pay off UK debt a bit quicker than otherwise. Since your proposal to collect via council tax means that the tax would apply to a probable majority, why not just slap it on income tax with discretion; after all there's not a great deal of difference between the financial means of those buying a home with a mortgage yet owning little of the equity and those otherwise renting; or is the tax intended only for those who are in full possession.

I'd have thought HMRC had the staff and procedures to handle the business rather than pay councils to do it.

For all te nuanances of this debate it remains irrefutable that the PVT concept is one based on the politics of envy and another attempt at some form of egalitarianism. Piling yet more tax on the so called middle classes to provide for a number of wasteful government programes is arrogant nonsense. The tax burdon on the individual should be dramatically cut and sucess shoud be rewarded. Tax evasion should be persued more agressively but again this would be easier if rates were lowered as people and companies would be less likely to enter into deliberate schemes like Starbucks, Apple Google Ebay etc or even some of opur manaufactures whom despite billions of sales seem unable to make a profit in his country on which they would be taxed. Lets start with the big boys and lets have some honesty on how the money is spent. And lets kill of grandios and ridiculous projectslike HS2 to Birmingham of all places

an elder one

Sadly because of the recession and austerity many pensioners have had to turn to equity release, with their home as the main asset to fall back on. Your experience with Equitable Life clearly illustrates why some people might want to take equity release.

As to PVT it is not intended to last for ever, but to enable a fiscal stimulus which would help overcome the worst effects of austerity as can be seen in PIIGS, particularly Greece and Spain. We are repeatedly told that it is going to take longer and longer to come out of the recession, the PVT is intended to help shorten the period of negative growth.

The tax is intended for the top 50% of properties, subject to the usual Council tax exemptions and should be affordable i.e. hitting those with the money, and not to hammer the poorer end, poorer pensioners included.

The time period for its operation would initially be one year, but could be extended depending on the demands arising from the recession.

The reason for Councils as the collector of the tax is, that Councils already have the staff to deal with Council Tax, and the extra tax would be just an add on. Instead of collecting £x they would collect £y, meaning that there would be a minimum requirement for additional staff in either the Councils or in HMRC. Probably this would be the best tax to collect, cheap, simple, equitable, and not subject to accountants get outs of the rich.

As to the spread of asset classes, you are right that we should not put all our eggs in one basket, but for many people/pensioners it is the only real asset they own.

Problem is Prof, such inventions (PVT) have a way of lasting, if not for ever, nevertheless a very long time and once the precedent is established can be extended beyond its initial remit once it is accommodated.

In any case why do we need yet more taxes the UK at present is able to borrow cheaply for sensible meaningful investments one would have thought in the present climate of 'must do something to get economies moving again', without risk to our AAA rating which seems to be the bugbear.

And what will PVT pay for in that regard of significant dimension; others think that actually reducing taxation could provide a better stimulus. Much of the problem for the UK today is that trade with EU has become sclerotic because of its seemingly intransigent preoccupations I understand.

Joe Stalin, what have you got against Brum - incidently I first came from the midlands; am now in the SE - they may sound a bit thick up there, but they ain't and that is where much early industry of the sort we need now, started. I don't dispute on HS2 though; although the time from A to B might be quick it's usually what happens at A and B that takes the time; and apart from anything else the likely state of the rails would bother me at those speeds. Furthermore with todays kit one can work on the train so time is not wasted.

Oh elder one :D I have nothing against the big Brum or Brummies. I jus don't see the point in spending a huge amount of money on getting there a bit quicker and wrecking yet more of our landscape. as you point out it piossible to work on the train so half an hour more or less is neither here nor there. If they are burning to spend cash on infrastructure put in a dedicated and secure hihh speed ling between Heathrow and Gatwick thereby improving the efficiency of both airports potentially doing away with the need for a third runway. Another project coud be making use of the canal system to pump water from the wet North to the dry South. And whilst I am on it waht about a few more nuclear power stations so that we dont have to continue blighting our landscape with the uneconomical wind turbines. it is time to put the needs of the country over politcal pork.

Joe Stalin I agree, absolutely. The UK must wean itself off so much dependence on EU for trade and direct our energies to the still emerging economies of the far east and other similar distant places for which efficient air travel is key. Your point on a fast link between Heathrow and Gatwick could extend to building Boris's Thames Airport with an improved Thames barrier.

Yes, and let us get rid of those damned windmills churning out their meagre wattage per acre of despoilation; and build more reservoirs - which can be made features of a natural landscape - to manage the flood plains on which we persist in building houses, all interconnected by a water network of various constructions; canals, buried pipes, pumps, and whatnot.

The technologies of nuclear power must continue to be developed; nothing is perfect at the start, but knowledge goes no further forward whilst we sit biting our nails.

an elder one

On PVT.

PVT does not mean one cannot borrow to supplement stimulus. Our AAA rating does mean we can borrow cheaply. But, for how long if we continue in recession.

Secondly the tax take with the recession is down, PVT would be one way of supplementing it, with the minimum of pain. It would mean less cuts, and a positive impact on aggregate demand.

Prof, I'm no expert in these matters but sense a prevailing desire now to get out of recession trap asap, in which case the "for how long" impinges less upon the case. I think the UK patient needs a stimulus and therapy (some freedom from the dead hand reaching out from Brussels) to get moving again rather than ease the pain. The quicker we can get moving the shorter the pain has to be endured. Was that not what Maynard Keynes advised.

an elder one

It was not Brussels that borrowed, but UK. There was no directive from Brussels for our Government to borrow, when we should have been saving for the rainy day, as advised by Keynes.

We have only ourselves to blame not Brussels.

Having said that lets look at the austerity cycle.

Govt borrows too much.....Has to cut back in recession.....Unemployment rises ....Aggregate Demand falls.......Govt Tax take falls....Govt cannot balance books......Has to increase tax and/or borrow....so has to cut back/tax more in recession and the cycle repeats itself... e.g the PIIGS and Greece and Spain in particular.

PVT is intended to be the tax used to increase the Aggregate Demand , with minimum pain to those concerned, and it could be coupled with an equivalent amount of borrowing to break the cycle above.

That is the Keynesian approach when there are no savings from the good times to fall back on..

Prof, my criticism of Brussels has nothing to do with the origin of our borrowings - Messrs Brown and Balls, et al can tell us all about that - but the minutia of regulation coming from the EU now seemingly in death throes, interfering with our industrial culture.

Yes as far as I understand it, Keynes did imply borrowing to stimulate the economy, but I'm not well read enough to comment on the tax component of his argument.

an elder one

Another reason why a tax like PVT is necessary is because big business pays next to no tax. For example The Telegraph 15 Oct - Starbucks UK tax bill comes under scrutiny by Helia Ibrahimi

"Starbucks, which has $40bn(24.9bn) market valuation, paid nothing in UK corporation tax last year, despite making sales of £398m."

Nothing to do with Brussels.

As I understand it though Keynes's basic tenet was that aggregate demand engendered industrial activity, thus both borrowing and taxation are both effective components in that regard.

Thus I can see that government borrowing could be justified to gear up investment in infrastructure and provide work and wages for some. But at the present time so many people are out of work and pocket that demand is low and tax increases would only make matters worse; though I know your intention in PVT is to tax only the perceived rich, to chip in and offset a bit (how much) of a resultant increased deficit. However, that course is fraught with probable deleterious consequencies as many have argued; and for what amount. Not all the rich are the implied crooks.

I'll admit to some vested interest Prof, I have a son who may well come into your category of rich, he works his socks off in an international domain, is full of zest in all he does, pays his taxes and the rest, but is seriously thinking of moving to Monaco if the 'atmosphere' worsens in UK; I'd hate to see him go.

an elder one

If you are looking at changes in relation to the EU, there could be some clues as to how Scotland is to be handled.

BBC News Scotland Politics 16 October

Scottish Independence: Lib Dems to unveil 'Home Rule' plan.

Scotland would raise two thirds of all the money it spends, under proposals to be unveiled by the Scottish Liberal Democrats.

A leaked copy suggests allowing the Scottish Parliament to collect almost all income tax, capital gains tax, inheritance tax, and air passenger duty - but not VAT, alcohol or excise duties.

It also proposes the UK adopting a federal system, which would create a series of regional and national parliaments and assemblies across the UK, with the federal government retaining powers over foreign affairs, defence, currency, welfare and pensions.

Some clues as to how the EU could be run?

Yes the interesting thing about UK structure compared with EU is that UK starts out from a position of sovereign union and a common currency whereas EU is trying to force a sovereign union of disparate countries through imposition of a common currency; you may well argue that imposition is the wrong word though; and of course Scotland didn't exactly volunteer to become part of UK in the begining, or even now apparently, despite arguable benefits for them, resented to some extent by the English.

Undoubtedly something is about to happen, or has to happen to satisfy a democratic imperative, but I hope it doesn't lead to a split since I believe together the union betters the sum of its parts.

I read that there is the likelihood in the change that Scotland will keep the pound sterling, in that case we shall still have a union, such that the EU will not yet countenance.

an elder one

"I believe together the union betters the sum of its parts."

Does this not apply to the EU and its member parts?

Not at present Prof, the EU is still in the melting pot; if they can get the alloy right then, yes. A very big if!

On that note I'll leave this strand, it's getting a bit aged methinks.

Thank you and best wishes.

an elder one/others

Just as a passing shot.

BBC News Politics to-day.

PMQs: David Cameron on UK referendum and EU membership.

David Cameron said he did not want an "in-out" referendum. The PM said he would not be happy with Britain leaving the EU, but "not happy with the status quo either.'

What do you make of that?

The matter is covered in todays Telegraph; Peter Oborne, et al; don't think I could put it better; and that is only the most recent such commentary.

I have little to do with the BBC; or television for that matter.

Just to add one more comment on Greece

They are in their 20th General Strike and in their 5th year of recession.

I just hope our austerity does not lead us in the same direction.

The UK case bears no comparison!

an elder one

In what way?

Think about it!

The Greeks are stuck with what is for them an overvalued currency - entirely their own fault - and are more or less run by Germany and in recent times been ruled by military junta. Their only exports I have seen are olives, anchovies and various other small tasty fish; my broker though in London is from Greece; and of course they up with ships; pity they don't all pay their taxes.

an elder one

Thee is no doubt that we are lucky not to have the Euro, as by now we would have more serious problems that we have. You are correct in this respect that our situation is different.

However your statement about their exports is incomplete.

Recognised main exports are - fruit, vegetables, olive oil, textiles, steel, aluminium, cement, and various manufactured items such as clothing, foodstuffs,refined petroleum, and petroleum based products.

Please note that their main export partners are, Germany, Italy, United Kingdom, United States.

Hi again

When we were discussing PVT a number of you expressed concerns about pensioners losing their homes. I bring to your attention, especially those who are struggling, the following article-

The Independent - Escape routes for pensioners caught in a mortgage trap.

"Many baby boomers aged over 65 with interest - only loans face losing their homes" by Sarah Davidson.

All is not lost yet. Sunday 14 October 2012

Well worth a read.