We are in recession, what now?

[Gecko1978]

Should we:

Raise tax protect public services
Cut business tax
Cut personal tax
Raise or lower interest rates
Contract public services

Whats the might mind's of PH suggest

[BobToc]

I'd rather GDP was higher rather than lower, but I'm not sure there's a huge difference between +0.1% growth and -0.3% for the quarter.

[S600BSB]

Call a GE and boot out the awful government that has presided over 14 years of virtually zero economic growth. Be a good start.

[119]

S600BSB said:

Call a GE and boot out the awful government that has presided over 14 years of virtually zero economic growth. Be a good start.

So what have the other parties got in their manifesto to turn this around?

[anonymous-user]

Gecko1978 said:

Should we:

Raise tax protect public services
Cut business tax
Cut personal tax
Raise or lower interest rates
Contract public services

Whats the might mind's of PH suggest

Low taxes and low interest rates is what got us here. Growth in the economy is what’s needed, which is a mixture of more people working & earning more and proportionate tax policy. Not sure why contract public services is on the list of options.

Edited by anonymous-user on Thursday 15th February 16:04

[Earthdweller]

Most of Europe is in the same or worse situation, I don’t think it’s something that can be viewed in isolation tbf

[CloudStuff]

We need to leve the EU. They're holding us back.

[Rufus Stone]

The economy won't grow until people have more money available to spend. That means higher wages, less tax, less interest on your mortgage or rent for your home. The Government only controls one of them.

[Gecko1978]

wormus said:

Gecko1978 said:

Should we:

Raise tax protect public services
Cut business tax
Cut personal tax
Raise or lower interest rates
Contract public services

Whats the might mind's of PH suggest

Low taxes and low interest rates is what got us here. Growth in the economy is what’s needed, which is a mixture of more people working and proportionate tax policy. Not sure why contact public services is on the list of options.

It's an option you don't have to agree with it but example if we privatised all GPs tomorrow would that save us money. (I don't think we should). If we stopped child benefit totally etc.

[markh1973]

wormus said:

Gecko1978 said:

Should we:

Raise tax protect public services
Cut business tax
Cut personal tax
Raise or lower interest rates
Contract public services

Whats the might mind's of PH suggest

Low taxes and low interest rates is what got us here. Growth in the economy is what’s needed, which is a mixture of more people working & earning more and proportionate tax policy. Not sure why contract public services is on the list of options.

Edited by wormus on Thursday 15th February 16:04

Agreed that we need to grow the economy but to say that it's low taxes (the tax burden is the highest on record and low interest rates (interest rates were raised to slow inflation which in turn took money out of the economy) which got us here strikes me as being an odd analysis of the last year.

Admittedly when taxes were lower (although not significantly) and interest rates were significantly lower the economy was hardly growing at record rates.

The point around contracting public services is that the Tories want to cut taxes but don't have the headroom to do it so the only way they can create that headroom is by borrowing (I recall another Tory Chancellor of recent past proposed this) or to cut public services.

[fat80b]

BobToc said:

I'd rather GDP was higher rather than lower, but I'm not sure there's a huge difference between +0.1% growth and -0.3% for the quarter.

Indeed, nothing is new here.


If it was up to me, we need to see a growth that lasts but no goverment seems to actually want to do it.

Short term - Very hard to do anything that moves the needle but if you want to get people spending:

• Reduce Pub beer duty significantly - we could call it Drink Out To Help Out!
• Get Taylor Swift to double the number of UK concert dates!

Medium term - Pump money into the businesses that you want to see in the future

• Reduce corporation tax on sectors you want to encourage e.g. tech firms (if that is what you want to encourage etc)
• Reduce corporation tax in general for everyone else
• Encourage startups by giving them mahoozive tax breaks & investment schemes like Hong Kong used to do
• Build stuff - houses, and science parks to accomodate the growing number of businesses you now have
• reduce the VAT threshold to more sensible number to level the playing field
• nudge tactics to get people back to work (replace current benefits system with an attractive back to work scheme) - Make work pay etc...
• Simplify legislation (i.e. delete a whole bunch of useless rules and regulations (e.g. farming) -
• Sack a load of civil servants to free them up to work in the newly growing private sector

Long term and slightly bonkers:

• I'd build 10 + Nuclear power stations - To make it so that UK energy is the cheapest in the world at scale and free for domestic use. With a view to bring all of the high energy sectors of the world to the UK in 10-15 years time. e.g. Aluminium smelting or AI Datacenters, or Semiconductor manufacturing etc.

[Gecko1978]

said:

You had me at Taylor Swift

[2xChevrons]

Gecko1978 said:

It's an option you don't have to agree with it but example if we privatised all GPs tomorrow would that save us money. (I don't think we should). If we stopped child benefit totally etc.

The spurious notions that 1) we need to 'save money' and 2) that cutting public services does that are what has largely brought us to this point which, in terms of living standards, growth, productivity and the state of the public finances, is pretty much exactly where we were 15 years ago.

I would therefore suggest that doing 'not that' would broadly be the answer. Try:

- raising public investment to something like the OECD average (so by an order of 50% or more)
- higher and better taxes, targetting wealth over income. That would mean those at the top paying a lot more, those at the bottom paying a little more and those in the middle paying slightly less. Includes tax breaks for desirable business/industry development with long-term 'pay back.;
- encourage business to invest in productivity, people and the future (we are one of the worst of the G8 for this) rather than profits, dividends and executive pay.
- institute an actual living wage, with benefits/welfare tied to it to reduce the recurring 'social debt' of poverty, ill-health, homelessness etc. Also makes work pay to encourage [return to] work.
- focus on green, domestic, secure energy, which by definition includes nuclear power. On both large base-load and SMR scale (see point 1).
- a 'nation on the move' project to remove transport bottlenecks and congestion from all modes of transport, be that infamous road traffic blackspots on trunk roads, places that need a bypass, container interchanges, lorry parks, reinstated inter-urban/suburban rail lines, railway electrification, loading gauge improvements, bicycle projects for intracity travel, revitalising waterways, the Grand Contour Canal, extra airports or runways etc. etc. (see point 1).

Edited by 2xChevrons on Thursday 15th February 16:24

[anonymous-user]

Gecko1978 said:

wormus said:

Gecko1978 said:

Should we:

Raise tax protect public services
Cut business tax
Cut personal tax
Raise or lower interest rates
Contract public services

Whats the might mind's of PH suggest

Low taxes and low interest rates is what got us here. Growth in the economy is what’s needed, which is a mixture of more people working and proportionate tax policy. Not sure why contact public services is on the list of options.

It's an option you don't have to agree with it but example if we privatised all GPs tomorrow would that save us money. (I don't think we should). If we stopped child benefit totally etc.

Two different things (ones a benefit policy, the other’s about who fulfils a public service), neither will grow the economy which is what defines recession.

[Gecko1978]

It's interesting though if tax is x% of GDP and the goverment no longer has to fund Y (GPs as a random example) the same amount of tax is still there to be spent on something else like SMRs as one person suggested.

I have no idea what hunt will do but I bet it will make f all difference to most people

[Ridgemont]

I would hazard a guess those numbers will probably be subject to revision in the none too distant future:

The latest Purchasing Managers Index (Jan ‘24)suggests that companies are seeing more growth coming through.

https://tradingeconomics.com/united-kingdom/servic...

I suspect interest rates maybe on the turn: latest inflation was unchanged at 4% despite forecasters expecting a rise. The BOE will find it more challenging to justify holding them at 5.25% until Autumn this year as they stated at the last MPC meeting if that continues.

[NomduJour]

2xChevrons said:

That would mean those at the top paying a lot more

Top 1% already pay well over a third of all income tax, not far off half pay nothing. Aligning with a typical higher-tax system would mean average earners paying more.

How hard can you squeeze when your tax revenues are reliant on such a tiny group?

[croyde]

Dropping tax by a penny or two will mean F All to most of us seeing that personally my costs in bills, mortgage etc are costing me £1000 or more a month than 2 years ago.

No penny in the pound or a 5 percent pay rise is going to help with that.

[119]

If interest rates are currently where they should be, im not sure how that is the fault of any government.

[cliffe_mafia]

They should have cut VAT on energy costs even if only temporarily instead of "giving" us money to bung to the energy companies.