Labours pension threat - daily express

DragonQ

badmemory wrote: »

Does anyone remember why the railways were nationalised in the first place? It will probably turn out to be the same reason that they will land up having to be nationalised again. Too much taking profit out & not enough investment.

The stupid thing is the private ownership model is supposed to improve investment, i.e. profits can be re-invested. Yet the government always has to fund rail improvements anyway so...what's the point?

Triumph13 wrote: »

And British Rail didn't exactly have an enviable reputation...

Ultimately whilst I think the current nationalisation proposals are a serious mistake, they don't worry me anywhere near as much as the proposal to confiscate 10% of all private companies. That's the one which would lead to massive capital flight the instant that polls showed labour had any significant chance of winning a majority and bankrupt us pretty well overnight.

Doesn't that line of thought tell you what the actual problem is? There is so much wealth and power concentrated in so few hands that people are worried so much wealth will leave (rather than pay taxes or accept rules regarding employee ownership) that it'll bankrupt the country. That is a ridiculous situation to be in in the first place.


We are a market of 65 million people and the government provides tonnes of contracts to private companies. Instead of letting companies move their profits off-shore, for example, how about we force them to pay taxes due based on earnings in this country regardless of what clever international loop hole they want to use? How about instead of giving contracts to any old company, we give them to companies that are based in the UK and pay their taxes here. Sure companies can leave but they'd lose access to such a big market and I'm sure a British company would gladly take their place. Paying more tax is surely preferable to most businesses than making no money at all in a given market. If their value drops because their profits drop after paying what they actually should in taxes, then that tells you their current market value is just a reflection on the current nonsense system, and investors have clearly gotten too used to it.

badmemory

As most of the utility companies in this country are now in foreign hands I doubt it would actually be a problem. So those profits are shot offshore already. We are supporting their employees by having to pay them child tax credits etc. Much better to pay a living wage that does not need taxpayer support (much better for a family's self esteem too) & for any profits to stay here & be used to improve services. Revolutionary or what!


Also just a tad better than selling off the NHS - you may just need it some day!

Malthusian

DragonQ wrote: »

Instead of letting companies move their profits off-shore, for example, how about we force them to pay taxes due based on earnings in this country regardless of what clever international loop hole they want to use?

We do, it's called VAT.

How about instead of giving contracts to any old company, we give them to companies that are based in the UK and pay their taxes here.

Because raising taxes or cutting services so we can pay higher contract fees to UK companies, instead of more competitive overseas companies, is crony capitalism.

Triumph13

DragonQ wrote: »

Doesn't that line of thought tell you what the actual problem is? There is so much wealth and power concentrated in so few hands that people are worried so much wealth will leave (rather than pay taxes or accept rules regarding employee ownership) that it'll bankrupt the country. That is a ridiculous situation to be in in the first place.

No it tells me that the Corbynites either don't understand basic economics or understand and don't care because they regard bringing everyone down to an equal level of poverty as a 'good thing'.
The value of a listed company is the present value of its future dividend stream. If you are confiscating 10% of the dividend stream then the value instantly drops by at least 10%. If people thought labour had a serious chance of winning the election and implementing their proposals the things that would immediately happen would include:

• Every multinational company currently headquartered and listed in the UK would move abroad.
• Private investors would be looking to change the asset allocation in their pensions to sell UK stocks and buy foreign ones instead causing a collapse in the value of those stocks remaining in the UK.
• Investment, including Inward investment, would dry up completely as who in their right mind would want to invest money in a business in the UK if they knew lumps of it would be confiscated?

The kind of numbers people have been bandying about for shrinkage of the economy following a hard Brexit would absolutely pale into insignificance compared to the collapse that would ensue.