Reply to: New New Labour

[AtW]

So is it OK for the UK to borrow money while cutting taxes to attract businesses? You don't seem to have answered the question.

No.

Reduction in taxes should result in increase of revenue and that will not be instant so spending cuts to match will be necessary.

[d000hg]

You don't need to be a tax heaven, just more competitive compared to Ireland next door and Switzerland

So is it OK for the UK to borrow money while cutting taxes to attract businesses? You don't seem to have answered the question.

[AtW]

No wonder the banks won't fund your overdraft if they see that you spend so much time on here being critical of them

I love them really for I am myself an ex-banker!

[DodgyAgent]

You don't need to be a tax heaven, just more competitive compared to Ireland next door and Switzerland - particularly CGT should be very attractive as that would attract high wealth individuals to actually pay taxes in this country rather than do it in Isle of Man.

No wonder the banks won't fund your overdraft if they see that you spend so much time on here being critical of them

[AtW]

So borrowing billions/trillions to finance tax cuts promoting the UK as a corporate tax haven would be good, or bad?

You don't need to be a tax heaven, just more competitive compared to Ireland next door and Switzerland - particularly CGT should be very attractive as that would attract high wealth individuals to actually pay taxes in this country rather than do it in Isle of Man.

[Goatfell]

Not if your manufactured product is made from locally available resources.

Plan B* What can I manufacture from bone idle chavs and will there be a market for the product?

Soylent green

[d000hg]

Borrowing money to invest into something that will make money (or save them) is ok, but borrowing to finance current spending or tax cuts should be a no-no.

So borrowing billions/trillions to finance tax cuts promoting the UK as a corporate tax haven would be good, or bad?

[sasguru]

And how do countries like Germany, France and Japan handle this problem?

Well, it's not a problem really if you can turn a lump of iron into good quality car.

You're assuming the car industry is in good health in those countries.
Apart from the premium manufacturers (Merc, BMW) who can export their goods to the emerging economy, it's not.
There is over capacity in the industry. GM wants to rid itself of Opel/Vauxhall, Mitsubishi is closing its factory in Netherlands,
Peugeot (which derives 13% of its turnover by exporting kits to Iran!) and Mazda need new partners, Fiat is in a desperate clinch with Chyrsler otherwise it would be in financial trouble (and I think they will be anyway since Chrysler are crap).

Car sales have been falling in Europe over the past 5 years and will keep falling.

Unfortunately cretinous politicians apply pressure to keep assembly in their countries even though it only adds 15% of the value.
Far better to keep the value-added design and engineering, the brain part of making a car in country than the mere metal bashing.
the UK is very good at this: look at the Formula1 expertise and the cluster of small motor companies clustered in Surrey.
You want a British car buy a Nissan Qashqai, Jaguar, Land Rover, Range Rover. All these cars were designed and engineered in the Uk, regardless of who owns them.

[The Spartan]

It's not cheaper long term.

I agree with that

[AtW]

we would rather buy goods from china because it's cheaper and of course the money goes into their economy.

It's not cheaper long term.

[The Spartan]

Don't get me wrong there are a number of factors that need to be considered in order to make manufacturing viable such as:

Availability of resources
Import tax and duties
Exchange rate
Wage levels
Demand for the product

I've probably missed a few but you get the gist, either we're not competitive enough or we've just lost our way and others have capitalised on it. For crying out loud how many of us try to buy british, we would rather buy goods from china because it's cheaper and of course the money goes into their economy.

[AtW]

the problem is materials would be very costly

And how do countries like Germany, France and Japan handle this problem?

Well, it's not a problem really if you can turn a lump of iron into good quality car.

[Arturo Bassick]

Thing is due to the exchange rate you could argue that if we did have an enterprising manufacturing industry we'd be making lots of money exporting goods but the problem is materials would be very costly as well so it's a vicious circle either way.

Not if your manufactured product is made from locally available resources.

Plan B* What can I manufacture from bone idle chavs and will there be a market for the product?

[The Spartan]

Thing is due to the exchange rate you could argue that if we did have an enterprising manufacturing industry we'd be making lots of money exporting goods but the problem is materials would be very costly as well so it's a vicious circle either way.

[AtW]

I'm saying they don't in Germany either.

But they do - they've kept manufacturing and it's one of the best in the world, how can you say they don't make long term decisions? On the other hand UK totally betrayed its past and this is likely to result in a very bleak future indeed.