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The problem as I see it


woolybanana

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Not being a voter or living in the UK makes my views entirely theoretical but here is the major problem of the moment as I see it:

Brexit plus a possible Corbyn regime.

Already, Brexit is causing many companies to review their possible investment and location decisions, with many tempting offers being made to get them to move.

Their decisions will be made mainly on what is best for their long term health which means levels of profit for shareholders many of whom are pension companies.

In comes the Hard Left regime of Corbyn and McDonnell and the Communist Unions.

In come tax rises both on industry with a massive increase in corporation tax and in comes a huge increase in union representation.

Also, income taxes increase sharply, property taxes, in the shape of the new land tax, mean that property owners taxes are multiplied by four plus, apparently as Corbyn said last night, a wealth tax.

And we must remember that the UK is already very deep in personal and public debt with the books unbalanced and borrowing through the roof

Result, industry ruggers off to new climes where it feels there is a better ambience and where they feel welcome, unemployment rises sharply, property prices begin to crash as people can no longer afford to buy and are in negative equity, banks and building societies start reclaiming property or even start to go bust.........

The middle classes are wiped out.

We also have no military to speak of and not Trident, the redundant base having been rented to ..... Mr Putin, by widow Twankey.

Result, UK PLC is bankrupt, as bankrupt as Greece and Venezuela, overgoverned, run by the Unions with a PM has no experience of office of any kind.

On the other hand, there could be candy floss for everyone.

It is interesting though that France is just struggling to get rid of the taxess and rules and regulations that Corbyn is proposing, in order to give industry the chance to produce and to start growing again. She has a large deficit but personal debt is much much lower.

There are many many much more important things out there than worrying about foxes, Horatio.
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Project fear woolly..

Actually Corbyn stands very little chance of forming a government but TM stands a very good chance of not increasing her majority by enough votes to make it possible for her to do what she wants. That was after all her reasoning for calling the election in the first place.

There were an awful lot of people who voted to leave the EU that were labour voters. They don't just switch parties overnight, especially when the manifesto from the Conservatives contains worse things than foxhunting, from their point of view. Similarly there were very many conservatives who did not vote for brexit, and whilst they might be loyal and resigned to the result perhaps they don't like the hard version of brexit that TM is proposing? And we all know what happens to arrogant politicians who call elections or votes thinking they are certain to win.
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[quote user="lindal1000"]And we all know what happens to arrogant politicians who call elections or votes thinking they are certain to win.[/quote]

 

I dont but I am probably being more retarded than usual, who are you referring to?

 

Aha! - Probably David Cameron and the referendum.

 

Its been a turbulent year in politics but at least on this and another French forum the s**tflinging and venom has finally died down.

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Oh dear Woolly

have you been indoctrinated by May mind-thought?

Businesses will set up and stay wherever they can make money (aka profits). JC is proposing to increase Corporation tax to a level lower than when the Tories began their austerity policies.

Where companies queuing up to exit the UK before then? If so I did not notice it.

The proposed increase will leave UK tax levels below those of Germany. You will notice how world companies such as Ford, VW, Bayer, Hoechst or BASF are rushing to depart.

If companies in the UK are preparing to leave the European archipelago then I would suggest it has more to do with uncertainty over Brexit than the thought that JC might win an election that he started out 20 points behind and would then increase taxes to levels still below most of our near neighbours - Ireland excluded.
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The arrival of Marxist wealth confiscatory fanatics with their tax and spend agenda, mad redistribution and plans to force left wing unions into every company may well be the last straw for many companies, particularly if Corbyn passes a transaction tax as well.

I was not aware of May's agenda as I have not read her manifesto. In fact, I do not understand this Tory party; they are certainly not the one I supported many, many years ago.

There are good things in Corbyn's plans such as the eventual renationalisation of the railways BUT only if there is a no strike contract right from the start with compulsory and binding arbitration, and no closed shop or compulsory political levy.

As to nationalising the power and water industries, that is just dogma that is not needed as governments can control by regulation.

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I'm irritated by this knee jerk assumption that nobody seems to be challenging, that if corporation tax is nudged just the tiniest bit higher, hundreds of corporations will instantly vanish in a puff of smoke.

a) relocation is expensive and time-consuming and disruptive. You don't do it unless the payback is going to be significant

in conjunction with

b) the UK is currently one of the cheapest countries in Europe in terms of business taxes. Corporation tax probably is too low, after all part of the point of attracting businesses to your country is so they will contribute to the economy isn't it, not to feel so flattered that they chose your country to make their money in, that you give them handouts. Nudging tax up a few per cent is not going to make the UK an expensive country to business in - just not quite as bargain-basement cheap. It can go up 5 per cent and the only change that would make in the rankings is that it would have leapfrogged Slovenia and be on a par with Latvia.

http://www.doingbusiness.org/reports/~/media/WBG/DoingBusiness/Documents/Profiles/Regional/DB2017/EU.pdf
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[URL=http://s253.photobucket.com/user/bfb_album/media/18671266_10209204471650819_7068984890360906528_n_zps7qs0yo2w.jpg.html][IMG]http://i253.photobucket.com/albums/hh80/bfb_album/18671266_10209204471650819_7068984890360906528_n_zps7qs0yo2w.jpg[/IMG][/URL]
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there is only ONE THING that I believe T May has said that is absolutely TRUE, and that is that the only poll that counts is the one on June the 8th........... next week[:-))]

I can vote.......... but for whom, well, I am starting to wonder if I should get hold of a crystal on a string and hold it over the voting form and see what happens............ in fact maybe I will do just that, because I don't trust one of them, greens included, but I must vote...... because I just have to.

And the future, well, the housing market is disgusting and disgraceful..... a true honte[:@]....... and I am the only person who seems to see it like that amongst my friends, and what will be will be about that.

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I'm sure you're not the only one thinking that Idun. Just out of interest, what is it about housing that is bad, from your perspective. I know people complain that with the prices going up it is virtually impossible for young people to buy, but then I have heard others worried that they are going down. Rentals seem a problem in the South. You seem to have to be earning a good salary before you can even get a look in..

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My aunt, born during WWI, so knew austerity first hand, always said that in times of crisis a coalition government was what was needed - and if we are not now in a time of crisis, I don't know where we are.

All I see currently is one huge shambles, and like others, don't approve of either the manifestos or the politicians either.  But I voted (postal) so I could now criticise to my heart's content if I so wished. 

But instead, I expect that almost everything will carry on as normal, which is what I find the most depressing thing of all.

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[quote user="Judith"]My aunt, born during WWI, so knew austerity first hand, always said that in times of crisis a coalition government was what was needed - and if we are not now in a time of crisis, I don't know where we are.

All I see currently is one huge shambles, and like others, don't approve of either the manifestos or the politicians either.  But I voted (postal) so I could now criticise to my heart's content if I so wished. 

But instead, I expect that almost everything will carry on as normal, which is what I find the most depressing thing of all.

[/quote]

Utterly depressing and I wish I could stay away from all this General Election stuff like OH is doing but I am, alas, like a rabbit caught in headlights[+o(]

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WB wrote:

My point is that is the coincidence of a rise in corporation tax and Brexit which will cause an exit of companies. Of course, there is also the arrival in power of a government which is hostile to business.

Well actually Brexit was raised I think by me and you now have latched onto it.

As has been pointed out by Norman's post where the option of moving elsewhere to reduce taxes is significantly limited, and by Eurotrash who rightly point out that the cost of a hop across a border is not une tranche de gateaux.

Lets take the case of Acme Widgets 9AW) currently located in London. Scared by the increase in Corporation taxes they decide to move to Dublin.

Why Dublin?

1. Corporation taxes are even cheaper than the UK is today let alone when JC increases the levels.

2. It is still close to home (UK)

3. They speak English and AW does not have to worry about issues of language and language training for its staff.

AW is a moderately technologically advanced company and so on its move it wants to retain 2/3rd of its 1000 staff. so it wants to retain 670 staff from its current roster because of their knowledge of the business, specific technical skills etc.

Let's see what this company is faced with:

1. 330 redundancies of those staff not offered a move - say 10K per employee = £3,3m

2. However of the 670 you want/need to retain 170 say no. They may have spouses that cannot move, children whose education would so disrupted as to make them say no, even perhaps those who hate the Irish - the reasons matter not. [And to add that a 75% take up would be exceptional. My experience of UK to Germany would suggest that 25% would be generous, but there we have an additional language barrier.]

3. So 170 key employees will need to be replaced. In a market where jobs are scarce the uptake will be higher than as in the current UK where people can just walk away and get and equivalent job with someone else.

2. Moving packages for 500 employees - this is a cash payment (bribe) for the move. It includes the costs of new curtains, new built in furniture - kitchens, wardrobes, etc. - a variable feast and one that will depend on your level in the company, but 15k is probably not far off. Add to this the physical removal cost or perhaps 10k and we have a total of £57m

3. Some will demand that their children can continue in UK education so boarding/education changes will apply as will six return air tickets from their school to Dublin (3 x holiday and 3 x half term) - say or average 0.5 children per person moved. £7,5m

4, Each employee will be offered 2 x return tickets per year home to return to friends and relatives. £0.25m

5. You will have to provide minders for each and every person who transfers, who will help them find a home, re-register their car, become aware of any registration or taxation requirements, best local schooling and advise or all or any issues. At best a minder can look after 5-6 persons. Duration is probably one year and maybe more for some. £1.5

6. Some of the staff moved will face problems and will not be able to function at 100% for some period of time, This can be due to spouses who are unhappy, children who cannot settle - loss of friends and networks in both cases are important. Their loss of productivity I the first year might collectively be judged at £10m

7 The missing 170 key staff will need to be replaces/retrained. If you are lucky you can use existing staff from the UK to act as temporary mentors and train staff for 3-5 days per week. You fly the in, you put them in hotels and feed them and fly them home each week. £4.8m

8 the whole operation will need to be overseen by (in)human resources - at least 2 personal officers plus assistants for a minimum 2 years - one for planning and one for enactment. .25K

9. Then there are the legal issues. You could perhaps leave all as is. But you would probably need to change your legal contracts - if only to say the disputes will be agreed in Dublin and not London. Paper-heads are easily changed on computers but envelopes with company logo will probably need to be changed. As will business cards and the costs for this are staggering - probably .25k

10. Of course we miss the fundamentals of physically finding a suitable location and renting/buying. We miss the loss of productivity of the team due to newcomers who need training, new location, disruption at a personal level, disruption of their family lives etc.

There are probably many things I have left out but our running bill for year 1 is over £83m or £83000 per current employee.

And that Wooly is why the world is not centred in Dublin. However if Brexit means that our fictitious company were to find its market limited or subject to tariffs then the art of survival might just kick in.
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