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economic situation is dire


ianrobo1
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Isn't tax avoidance perfectly legal? How can they ask them to stop doing something legal?

Perhaps the spirit of the law ought to be taken into account as well as the letter of the law?

Especially when, as Gringo points out concerning LBG and RBS, thousands of millions of pounds of taxpayers' money has been used to prop them up.

The Barclays comment was made by Vince Cable in response to the Barclays story. I think he'd say exactly the same if he were to be asked about any other bank (and indeed any other company) as he did do as part of the Guardian discussion regarding tax avoidance that they were running last month.

If banks and the financial system are seen as so crucial to the economic wellbeing of the country and such an integral part of the fabric of society that society has to bail them out when they have behave irresponsibly and anti-socially then they need to realise that acting in the public interest ought to be part of their modus operandi.

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Britain plunged further into debt in February as public borrowing soared to £9bn.

The record figure for the month brings borrowing in the 11 months of the financial year so far to £75.2bn, also the highest since records began in 1993, the Office for National Statistics (ONS) said.

The worsening state of the public finances was driven by a fall of almost 10% in Government tax receipts over the month compared to a year earlier as the recession tightens its grip.

VAT receipts in February were 31% below last year, thanks to the slowing economy and the Government's temporary VAT cut introduced late last year.

Sky News' business correspondent Joel Hills says the figures show just how much strain public finances are under.

"The recession is causing all sorts of problems," he said.

"What you are seeing is tax revenues fall as companies' fortunes deteriorate.

"You also see a greater dependence on social welfare, on benefits - as we saw... a record increase in the number of people claiming the jobseeker's allowance."

A year ago net borrowing was £1.1bn - just over a 10th of the latest figures.

The £75.2bn figure is more than three times higher than the £23bn recorded a year ago.

It means Chancellor Alistair Darling is virtually certain to exceed his net borrowing forecasts of £78bn for the current financial year.

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did anyone watch a dispatches program a couple of weeks ago - How the squandered our billions.

it was shocking the amount of cash the government wastes (& thats excluding bank bailouts).

it was billions on random buildings that weren't needed or even wanted in some cases, billions on IT projects that don't work, billions on defence contracts that failed to produce.

The worst was the billions spent on PFI which have nothing to show for it.

i swear if a good accountant could be given access to detailed accounts of the government, and he could say yes or no to every major spend, we could save tens of billions every single year.

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did anyone watch a dispatches program a couple of weeks ago - How the squandered our billions.

Yep, it was horrific. Funny thing is whenever anyone on here suggests public spending could be reduced without affecting frontline services, they normally get accused of wanting to put people into the poor house, burn the schools and demolish the NHS.

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Short and shallow?

UK recession 'will last longer'

The recession will be longer lasting in Britain than in any other major economy, according to forecasts released by the International Monetary Fund (IMF).

An IMF analysis predicts that the UK will be among the worst hit this year and the only major economy to experience negative growth across 2010.

It suggests that the global economy will shrink by 0.6% in 2009, compared to 3.8% in Britain. Japan's is the only major economy that will fare worse this year, contracting by 5%.

Growth across all G7 nations will be -3.2%, the same as the Eurozone economies, while in the US it will be -2.6%.

Next year, the IMF expects the UK economy to shrink by another 0.2%, while the rest of the world returns to growth.

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Funny thing is whenever anyone on here suggests public spending could be reduced without affecting frontline services, they normally get accused of wanting to put people into the poor house, burn the schools and demolish the NHS.

not any more they don't :winkold:

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Perhaps this has already been done, but have we had a poll on whether or not these large institutions should be bailed out or thrown to the wolves?

I certainly agree with Branson that General Motors and their like should go to the wall; and that all this money should be used to kickstart the electric car industry.

Personally, being a free marketeer, I think the banks should be allowed to collapse as well.

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Perhaps this has already been done, but have we had a poll on whether or not these large institutions should be bailed out or thrown to the wolves?

I certainly agree with Branson that General Motors and their like should go to the wall; and that all this money should be used to kickstart the electric car industry.

Personally, being a free marketeer, I think the banks should be allowed to collapse as well.

no we haven't had a poll. you should start one.

the question is whether you are talking about the banks or other institutions as well?

i don't think we should subside any industry, but some of the bigger banks have to be kept afloat.

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If I was running a business and could find a loophole, I'd utitlise it. As long as it's legal.

I am looking to setup a small business in the coming months and it basically looks like you only get half of what your company brings in. Everything else goes in one form of tax or another. Great thing about the internet is as long as "business decisions" and the property of the business "servers the info is held on" is in another country, you're OK....I think.

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Perhaps this has already been done, but have we had a poll on whether or not these large institutions should be bailed out or thrown to the wolves?

A good question that has mainly been avoided. As I understand it, before the FSA if a bank went tits up then the BoE would step in and sell off the profitable bits that remained such as deposit accounts, mortgages etc. That way the only people who actually lose are the shareholders who took a calculated risk to invest in the bank. That is how capitalism should work and the attempts to prop everything up may well lead inadvertently to bringing everything down.

I not qualified enough to know what would have happened had several big banks gone pop but I suspect the market would have taken it's course and good banks like Lloyds would have survived and prospered.

What worries me enough to be buggering off elsewhere is that the debt we have incurred by bailing banks out could sink the whole economy.

Pop the poll up mate and lets finds out what people think..

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no we haven't had a poll. you should start one.

the question is whether you are talking about the banks or other institutions as well?

i don't think we should subside any industry, but some of the bigger banks have to be kept afloat.

Industries... I agree with you.

As for banks... I'm not so sure. A little economic revolution occasionally is a healthy thing. I just wonder if the decision to bale out the banks is for our good, or the good of the already haves... I'll take my chances... let them collapse.

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If I was running a business and could find a loophole, I'd utitlise it. As long as it's legal.

I am looking to setup a small business in the coming months and it basically looks like you only get half of what your company brings in. Everything else goes in one form of tax or another. Great thing about the internet is as long as "business decisions" and the property of the business "servers the info is held on" is in another country, you're OK....I think.

Become a freeman on the land and pay no tax at all. You could withdraw support to a corrupt government that syphons off Billions in tax payers money for the private owners of the bank of England.

part 1

part 2

part 3

Oh and the Barclays leaked memos detailing offshore tax scam made it on to wikileaks]

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If we let all the industries go to the wall what will we trade with the world for our imports? The banking system is shot and a new world player will take our place in the banking world, IMO.

For far to long this country has let industry go to the wall while countries like the USA, France, Germany, Italy, Japan, China and most of Asia have both built and supported theirs. This recession will drag on for us and the pound will loose a lot more value against foreign currencies if this attitude continues.

We will have to dig up the old mines and reestablish our industries if we are to build this country up again. The banks have cost us more than any industry in history and to trust them with our future again is a big mistake, all strictly IMO.

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Don't worry... between the bonus taxes and (perhaps more importantly) moves to prohibit bailed out banks from getting H-1B visas (the US equivalent of Tier 1/HSMP), I wouldn't be surprised if Goldman, Morgan, et al move most/all of their operations to London.

People were mocking Barack for only giving Gordon a few DVDs, but he's throwing in Wall Street as well.

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I think the fear is that if the UK/US governments allowed one retail bank to fall....it would have a knock on effect like a row of falling dominoes.

The fact that banking shares have fallen dramatically is already having a huge impact on fund & Pension values because alot of managers hadn't seen the warning lights & continued holding large stocks of former banking shares, like RBS, HBOS etc, hoping that they'd recover with the argument they were yielding decent dividends. We're talking final salary schemes as well as private pensions.... hence Cherie Blair being employed to take Sir Fred to task by some of the local authorities, in a hope of recovering the losses suffered by their Pension schemes.

Also the way the FSCS scheme works is that building societies, even ones who have been prudent in the past & responsible in their lending and in no way involved in these toxic debt assets, are being punitively "taxed" by huge levies imposed by the scheme. ie. Skipton BS required to hand over £25M & Nationwide BS reserving a whopping £250M to pay the levy from their balance sheet.The figures involved are just mind boggling and the general consensus is, that the tax payer has not finished bailing the banks out just yet neither....There's more than likely more bad news on the way for a fair few major financial institutions as a payback for reckless lending & involvement in credit default swaps, catches up with them after decades of policies driven by greed, insane bonuses & profit. The UK in particular has the highest levels of personal debt per capita of any other economy in the world. This could not continue & will take a fair few years to rectify itself. We may well see as a next step full nationalisation of some financial institutions.

Some commentators are starting to see green shoots of recovery. However, I was listening to Neil Woodford yesterday, from Invesco Perpetual, on a webcast, who is one of the most respected fund managers in the country. He is very downbeat about the UK & US economies for the next 2 to 5 years, saying that this recession is not like any other we've experienced as the amount of debt in the whole mechanism works it's way through. Unemployment will rise significantly & weaker business models will fail. Yet there are companies & sectors, which will buck the trend & currently offer stocks well under their true values giving good returns on dividends. As a fund manager running the IP high income & income funds, of course that is his job to source & purchase.

In the long run the UK economy & businesses that survive should come out of this leaner & more robust going forward, however the road will surely be rocky in the interim!

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Oh dear, that's another cunning plan done for

The government has limited scope to implement its planned stimulus package as borrowing soars, according to a key economic think-tank.

The Ernst & Young Item club forecasts that net borrowing will rise to £180bn in the forthcoming tax year and will exceed the chancellor's own prediction.

It said that public finances were deteriorating "at an alarming rate".

It also called for a temporary cut in national insurance contributions to encourage businesses to hire staff.

On Thursday, the IMF said that the UK would have to borrow 11% of national income to battle the financial crisis - the highest of the G7 nations.

The Item club says that figure was overly optimistic. It forecasts borrowing to stand at 12.6% of GDP next year and that the UK would be running deficits over the next decade.

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Leaner most often means fewer jobs.

It does ..the short term effect globally is that many businesses are failing because they see their market decimated....and even the ones who CAN sell their products are being stifled from trading because they simply cannot get finance from the normal channels. Some developers & such like are starting to look at innovative ways of raising capital by tapping into private investment & by passing the banks altogether. eg the emergence of Sale & repurchase contracts..

Leaner also means less tax for the government to spend.....and consequently the one's who have jobs are going to feel the effects also...

Where the hell is all the money coming from to support these failing institutions?,....The US & UK have spent an awful lot of their reserves propping up the war on Iraq & Iran already. This is tax payers money! Less people in work though means less people paying tax.

cue higher stealth taxes methinks along the line somewhere....

When the US Treasury bailed out Freddie Mac & Fanny Mae...this DOUBLED the US national debt overnight!!...& that was only the beginning...we're talking Trillions more being pumped in to support the financial system since then...on both sides of the Atlantic.

As I see it...we've all seen that you can't continue to run an economy based on personal debt allied to property prices indefinitely...there had to be a pay back time...but on the other hand nor can you run the country's finances on the same basis either in the long term neither.

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It does & thereby less tax for the government to spend

It wasn't quite where I was going with my comment, Julie.

My point was that the 'leaner' tag is generally said to be a good thing which, if the only purpose of our existence was to serve the economy (or those functioning parts of it), it might well be.

The economy, though, ought to be here to serve us (all of us).

we've all seen that you can't continue to run an economy based on personal debt allied to property prices indefinitely

Perhaps we have learnt that 'indefinitely' can't be applied, we certainly have not learnt the rest, though.

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