UK Politics Thread

[Furunculus]

It's no surprise after 12 years in government:

The party gets tired of the 'rigour' of government, and becomes more shambolic in execution and messaging.
The public gets tired of old messages and old prescriptions that have not realised the gains the party promised.

I don't know exactly how much of the current furore is media hyperventilation and manufactured outrage vs a complete collapse of discipline and competence in the tory party. The two are in tension, and its not immediately obvious to me where the balance lies.
------------------
The current crisis seems to be caused principally by:

The mini-budget making the UK a policy outlier which is never a good place to be with regards the bond/gilt vigilantes.
The mini-budget being a significant departure in policy for a succession Prime Minister with a 'caretaker' mandate for the last electoral manifesto.

There is nothing wild in the mini-budget. The top-rate cut was a mere ?2b in revenue. Chicken feed. The reversal of a future NI increase was a reversion to the status quo. The reversal of a future CT increase was a reversion to the status quo. The 1p cut in basic rate IT is dwarfed by the totality of IT/NI/eNI. What mattered was the messaging and the mandate.
------------------
Comment - I support the removal of the 45p top-rate IT as I don't believe it is moral to remove so much earnings from anyone, and I believe it would have been at worst revenue neutral, but you can't argue with manufactured outrage. So I would not have done it now, for a mere ?2b change.
------------------
Even outside the manufactured outrage it's hard to argue that the tory party is no longer interested in governing, and i don't want an un-serious party in power. As soon as they achieve the following:

CTTP (and hopefully the India trade deal too).
Some kind of reset/agreement on the Northern Ireland protocol.

I'm quite happy for the gov't to collapse, an election called, and the tory party begin a ten year period of opposition in order to regain their appetite for governance. Let Labour deal with the facts on the ground.

[spmetla]

Truss is certainly doing a terrible job, was hoping the other dude would get the job but she played to the base better and as a result the UK has short sighted poorly executed financial decisions.

[Montmorency]

It's no surprise after 12 years in government:

The party gets tired of the 'rigour' of government, and becomes more shambolic in execution and messaging.
The public gets tired of old messages and old prescriptions that have not realised the gains the party promised.

I don't know exactly how much of the current furore is media hyperventilation and manufactured outrage vs a complete collapse of discipline and competence in the tory party. The two are in tension, and its not immediately obvious to me where the balance lies.
------------------
The current crisis seems to be caused principally by:

The mini-budget making the UK a policy outlier which is never a good place to be with regards the bond/gilt vigilantes.
The mini-budget being a significant departure in policy for a succession Prime Minister with a 'caretaker' mandate for the last electoral manifesto.

The current crisis obviously has deeper and broader causes than a proposed budget, reflecting global conditions and decades of structural policy. It definitely seems the budget specifically is responsible for some market movements and moreover a big stink among the electorate.

Comment - I support the removal of the 45p top-rate IT as I don't believe it is moral to remove so much earnings from anyone, and I believe it would have been at worst revenue neutral, but you can't argue with manufactured outrage. So I would not have done it now, for a mere ?2b change.

Of course this is a rather unpopular position. Not even the US Republican Party commonly makes this kind of categorical argument for its tax cut proposals, since it is an intuition even among conservative voters globally that high earners should pay a higher proportion of income in taxes. Maybe that's why this month the UK government announced the cancellation of the rate drop because "it is clear that the abolition of the 45p tax rate has become a distraction from our overriding mission to tackle the challenges facing our country." But yes, cutting base income tax rates and corporate tax will cause at least ten times the shortfall of dropping the top income tax bracket, probably because traditional income tax does not capture the surplus from high earners well. The totality of the proposal is still, reportedly, the largest tax cut proposal in the UK for 50 years - hardly chicken feed. It's not wild in the history of supply-siding tax cuts, but it's virtually always terrible fiscal policy.

Latest news is that the corporate cut was dropped as well.

It's always tricky to balance values with economics. Some argue that the fundamental tenant-landlord relationship is immorally inequitable and we should move toward its abolition, but understand that such policies would have the short-term effect of crushing housing availability, which is a more important consideration.

At any rate, cutting taxes while borrowing tens of billions to pay for energy subsidies during a time of low unemployment, significant currency depreciation, domestic asset dumping, and central bank rate increases is Argentina-tier economics. Like Argentina, the United Kingdom is bound to always have a bright future ahead.

Beyond the UK, this paper may be proving prescient.
https://www.bis.org/publ/work656.pdf

[Furunculus]

Of course this is a rather unpopular position. Not even the US Republican Party commonly makes this kind of categorical argument for its tax cut proposals, since it is an intuition even among conservative voters globally that high earners should pay a higher proportion of income in taxes.

There may be a misunderstanding here:
It is entirely my position that high earners should pay a higher proportion of income taxes.

And in the UK they do.
0% up to ?12.5k
20% up to ?50.0
40% up to ?100k(?)

The small cohort of very highest earners already pay something like three quarters of all income tax.
And that would not change with abolishing the 45p rate, in all likelyhood the revenue received by the exchequer would increase.

It's worth saying that in the UK when all taxation and benefits are considered all households on average lose about 1/3 of their what they earn to the exchequer. I am very comfortable with this.

[Montmorency]

There may be a misunderstanding here:
It is entirely my position that high earners should pay a higher proportion of income taxes.

But you said a 45% marginal tax rate was immoral for removing too much of earnings. I don't know why 40% would be appropriate but 45% would be downright immoral.

And that would not change with abolishing the 45p rate, in all likelyhood the revenue received by the exchequer would increase.

I am not aware of many historical instances of such supply-side revenue effects; I might even have seen them in the latest edition of Grimms'?

2022-23 tax year (6 April 2022 – 5 April 2023)
England/Wales/Northern Ireland tax band Taxable income Income tax rate
Personal allowance Up to ?12,570 0%
Basic rate ?12,571–50,270 20%
Higher rate ?50,271–150,000 40%
Additional rate ?150,001+ 45%

Taxing ?150,001+ at 40% would almost certainly not increase treasury revenues.

The small cohort of very highest earners already pay something like three quarters of all income tax.

It's worth saying that in the UK when all taxation and benefits are considered all households on average lose about 1/3 of their what they earn to the exchequer. I am very comfortable with this.

In the US in 1945 those reporting $100K income and up (millionaires in today's money) paid approximately a 50% effective total tax rate. While this of course dropped following WW2, rich people tended to pay over a 30% effective total tax rate until the late 20th century. Successive tax cuts have brought the effective rates of the lower and middle classes up slightly while reducing the effective liability of the top 1% to about 25%. And the federal income tax system in the US is more progressive than in the UK (overall, despite lower top rates, because more brackets and a very complex credit/deduction system).

The share of just federal income tax paid by the top 1% has been around 40% in recent years. I don't really know how things work in the UK, but according to the UK govt the 97th percentile for before-tax income is about ?100K. ?150+K is already like 99th percentile, constituting the wealthy stratum in any society above hunter-gatherer (even if puny in comparison to America's). Seeing as middle and lower-class taxpayers in Europe, including the UK as cited here, traditionally pay much more in tax than their American counterparts, I doubt that the richest in the UK pay 3/4 of the equivalent to national income tax. I could believe that for the top 50% or 25% of earners.

...

Seems I'm correct with around the top 25% for 75% of income tax, as the top 10% paid 60%. It might be heartening to see that this has increased from 50% at the turn of the millennium, depending on how national income distribution has shifted. And a helpful illustration of the difference between income tax alone and total tax: "the 50% of households with the largest incomes contribute around 78% of taxes."
https://commonslibrary.parliament.uk...fings/cbp-8513

The reason I remarked that income tax doesn't capture the surplus of the wealthy well is that so much of their real income is in long-term capital gains.

[rory_20_uk]

High earners require the society they live in to both earn and enjoy the wealth. That's why you can have live in London, enjoy restaurants, world class galleries / theatres etc with little risk of being attacked out, having one's home robbed or one's nearest and dearest kidnapped for ransom.

Yes, the problem of treating "income" from a job (which the peasants have) and from ownership of assets (which the richer have so much more of) differently is oh so beneficial. I say that (now) as someone who works via their own (tiny) company and would be able to take "entrepreneurs relief" on up to ?10 million should I shut the company down. So I pay 19% income tax, and can then take the rest after paying massively less tax. Oh, and of course no NI either. So yes I limit my income to what I need and at some point in the future I can just close it down and get a decent amount of money whilst paying little tax. Scale that up to billionaires, and the effective tax rate drops into single figures.

There are ways to tax capital on an ongoing basis - in the UK for example, there is a system if money is left in a Trust there is a tax to pay on total wealth. But unsurprisingly those with the most to loose are very reluctant to help others.

[Montmorency]

High earners require the society they live in to both earn and enjoy the wealth. That's why you can have live in London, enjoy restaurants, world class galleries / theatres etc with little risk of being attacked out, having one's home robbed or one's nearest and dearest kidnapped for ransom.

Yes, the problem of treating "income" from a job (which the peasants have) and from ownership of assets (which the richer have so much more of) differently is oh so beneficial. I say that (now) as someone who works via their own (tiny) company and would be able to take "entrepreneurs relief" on up to ?10 million should I shut the company down. So I pay 19% income tax, and can then take the rest after paying massively less tax. Oh, and of course no NI either. So yes I limit my income to what I need and at some point in the future I can just close it down and get a decent amount of money whilst paying little tax. Scale that up to billionaires, and the effective tax rate drops into single figures.

There are ways to tax capital on an ongoing basis - in the UK for example, there is a system if money is left in a Trust there is a tax to pay on total wealth. But unsurprisingly those with the most to loose are very reluctant to help others.

One of my parents was on a business trip to Russia during the 1990s. While eating at a restaurant, armed men walked in, assassinated someone at a nearby table point-blank, apologized to the patrons, and left. To use someone's turn of phrase, there are violent entrepreneurs and there are non-violent entrepreneurs. Granted the latter outsource and diffuse a lot of their violence in practice, but the former have the edge over the latter in all cases unless they can rustle up a protection racket known as an independent state and police force. But you have to pay the operating fee for all that, and it's a lot higher than minarchists would like to believe, because it also requires a robust civil society...


Unrelated scandal (NYT, Sky News): Large numbers of British - and perhaps other NATO - specialist veterans have been recruited by the Chinese government to train and advise the PLA. Actually this is a common practice with NATO countries, including the US - officers and specialists by the hundreds hire themselves out as advisors to all sorts of shady countries (WaPo). Sometimes they even advise coups, of which Africa may have experienced a record number in the past year. Indeed, Africa has been getting non-stop more violent and terroristy the more we've gotten militarily involved in it, and I'm pretty sure none of this instability is even a deliberate policy. The US mil-sec establishment is terrible at doing anything other than winning conventional wars. Maybe the government should think up alternative policies to promote stability abroad.....


EDIT: While I like the way this sentence sounds, it's fun to indicate it as an example of a dangling participle.

While eating at a restaurant, armed men walked in, assassinated someone at a nearby table point-blank, apologized to the patrons, and left.

[Furunculus]

Runners and Riders:
https://docs.google.com/spreadsheets...uWdbgchw#gid=0

Tories are going to lose the next general election - only really a question of how they want to get there.

Do they want:
a) a centrist grey-man who promises not to do anything exciting but try and push through the agreed program
b) a progressive/pro-eu actor who will attempt to push the party towards greater (dynamic?) alignment with EU regs
c) the sugar rush of a supply-side reformer (take2) who will attempt to capitalise on the freedom to realign away from EU norms

a) might get all the way out to Autumn 2024, b) and c) will be lucky to get beyond Spring 2023.

speaking personally - i want a) with the sole objective of finalising accession in CPTPP (and India too is poss), creating some kind of stability in NI, and finishing a status-quo re-review of the "IR" defence and foriegn policy agenda.

[Montmorency]

Runners and Riders:
https://docs.google.com/spreadsheets...uWdbgchw#gid=0

Tories are going to lose the next general election - only really a question of how they want to get there.

That's the spirit? Maybe it's too far to say that sentiment always reverts to the mean, but there is nothing the Labour Party can do to maintain outright majority support for 2 years.

a) a centrist grey-man who promises not to do anything exciting but try and push through the agreed program
b) a progressive/pro-eu actor who will attempt to push the party towards greater (dynamic?) alignment with EU regs
c) the sugar rush of a supply-side reformer (take2) who will attempt to capitalise on the freedom to realign away from EU norms

Is - is Boris Johnson seriously a Top 2 contender? Again? He's not Trump you know.

[Furunculus]

Is - is Boris Johnson seriously a Top 2 contender? Again? He's not Trump you know.

he may end up transferring his support to Mordant.

But whether he is a serious contender is down to his electability not his resemblance (or lack thereof) to trump.

Unless that is more a question about the polarisation of the electorate than the man himself?

https://www.theatlantic.com/ideas/ar...y-wins/671803/

[Montmorency]

Unless that is more a question about the polarisation of the electorate than the man himself?

More just failing miserably yet casting about for opportunities to have another go at it. The premise is that Trump is on another level and this is like one more of Johnson's unconscious pretensions at that pinnacle. (In that vein maybe Johnson the classicist would even cite Pisistratus in his own defense.)

But whether he is a serious contender is down to his electability not his resemblance (or lack thereof) to trump.

The Outer Party members who please themselves to manifest his electability are particularly messed up Britons, though I suppose that was the case in 2019 already.

https://www.theatlantic.com/ideas/ar...y-wins/671803/

This just references the common and well-researched flaw of presidential systems. A prime minister is registered as just another bureaucrat and has little prospect of attaining the symbolic stature of a Bronze Age god-king. Though I do think it's pretty inefficient that an executive selected from the body of a legislature should also have to continue fulfilling legislative duties, as British PMs do.

[Furunculus]

What/who are Outer Party members?

[Montmorency]

The party membership eligible to vote in leadership contests per the party constitution.

[Montmorency]

Note: Racism will not benefit China as a country or the CCP as an institution. (Nor will attempting to suppress women, but that's another developing story.)
https://twitter.com/GeringTuvia/stat...60127271038976

"Truss' political career was shattered in a flash by the baizuo's (white left) political correctness" - Mei Xinyu, an economist pundit, attributes the fall of the Truss administration to the selection of meritless "blacks," "Indians," and "female officials".

"The reason for this is that the most notable feature of this cabinet was not its meritocracy, nor was it a cabinet of people of high caliber. Rather, it was the unprecedented level of "political correctness".

"The Chancellor of the Exchequer, Foreign Secretary, and the other members of the "Great Offices of State" were not held by white men of native British descent, but were instead infused with the heavy-handed style of Black Lives Matter" 黑命贵风格浓郁:

"Truss appointed Suella Braverman, a woman of Indian descent, as Home Secretary, while Th?r?se Coffey was appointed as Deputy Prime Minister and Secretary of State for Health and Social Care. Despite being white, she's a woman nonetheless.

"If you ignore actual talents and choose only minorities, women, and even non-straight men as a form of "political correctness," your government will collapse sooner or later. The more time you keep doing this, the more spectacular will be your downfall.
15/

See also

[Montmorency]

Pinned: Labour expected to gain 1000+ seats in May local elections based on historical precedent. <500 would be a major defeat. 1500+ would be a major victory.

[Furunculus]

Pinned: Labour expected to gain 1000+ seats in May local elections based on historical precedent. <500 would be a major defeat. 1500+ would be a major victory.

seems pretty reasonable.

after 13 yrs of tory government it would be expected for the tories to struggle to maintain support, and local elections are usually the first and deepest hits to expose the cracks in their public appeal.

[Montmorency]

Joe Biden gaffe alert: @POTUS just said his rugby player cousin @KearneyRob “beat the hell out of the Black and Tans”….instead of the @AllBlacks - @SmurphyTV

[Montmorency]

Computationally-perfect division of the UK:

[Montmorency]

heh

[Montmorency]

If 4 years ago I had concluded that Labour would need at least 40% of the vote to expect a majority, but I did not anticipate such a large vote-split between Tories and BNP, nor such effective targeting by Labour and LibDems. The SNP did indeed get crushed though, offering up 3 dozen seats to Labour. No idea what effect redistricting had.

I wonder if anyone in the UK will admit, following one of the most lopsided results (ratios) in British history, that maybe pure FPTP is a little wack.

[Xantan]

First past the post system in UK politics always yielded lopsided or generally odd results, the pendulum from one election to another can swing enormously in one way or another.

I just hope we get to leave behind the Brexit bickering, it's doing no one any good. Even after what, 8 years?

[rory_20_uk]

If 4 years ago I had concluded that Labour would need at least 40% of the vote to expect a majority, but I did not anticipate such a large vote-split between Tories and BNP, nor such effective targeting by Labour and LibDems. The SNP did indeed get crushed though, offering up 3 dozen seats to Labour. No idea what effect redistricting had.

I wonder if anyone in the UK will admit, following one of the most lopsided results (ratios) in British history, that maybe pure FPTP is a little wack.

Yes Prime Minister called this out in the 1970s - the system almost always benefits the incumbents and major opposition so reform is always at best delayed.

After WW2, the Allies created Germany's system and then all chose to not implement something similar.