Spot the loophole

From the BBC:

Universities Minister David Willetts confirmed on the BBC's Politics Show there would be measures to boost firms outside the South East of England. This is expected to take the form of a three-year scheme to exempt start-up firms elsewhere in the UK from paying NI for the first 10 people employed.

Oh dear oh dear.

1. We're in a recession right now (or in the lull before the next one). As a matter of day-to-day practicality, it's easier and cheaper to ensure that as few people as possible lose their jobs than it is to dream up cunning plans whereby new jobs will be created. Any fule kno that not losing a customer is usually much cheaper than winning a new one, and the same sort of logic applies here.

2. What does 'start-up firm' mean? I'd advise any existing business employing ten or fewer people to shut up shop, start up a phoenix company the next day and take on the same people, hey presto, tax breaks!

3. Must it not be obvious to a blind man (no offence meant to any blind people reading this) that this is a barrier to job creation as much as an incentive? There may be 'start-up firms' employing ten or fewer people who were thinking about taking on another two or three, but for whom losing the tax break on the first ten wipes out the commercial benefit of taking them on.

4. Most small businesses employ family members to use up their tax-free personal allowances. So most small businesses can reduce their nominal headcount by two or three to suddenly slip below the magic figure of ten and hence qualify.

5. Does it make the slightest bit of difference to somebody looking for a job whether he or she gets taken on by somebody who already employees nine people, nineteen or nineteen thousand? A job's a job.

6. Isn't this a barrier to growth, however subtle? If your business employs fifteen or twenty people, you might have been worried about the 'start-up' competitor up the road who has rapidly grown to ten employees. At least now you know that your competitor will be encouraged to halt further expansion (see 3. above).

Continued page 94.

Help from an unlikely quarter

There was a nice article in today's Evening Standard, written by one of The Priced Out Generation, which in turn refers to a book by David Willetts MP (and I'm hardly his biggest fan) entitled "The Pinch: How the Baby-boomers Took Their Children's Future — And Why They Should Give It Back".

As we all know, the Tories are happy to complain about the massive public sector debts that the government has run up - despite not having any clear commitment to doing anything about it - but are usually silent about the fact that the extra personal debt that a young family has to incur to 'get on the property ladder' are far, far higher than their pro rata share of that government debt. What might be especially galling for the Tories is that they invented Home-Owner-Ism as an economic philosophy, but a Labour government did it so much better.

Anyways, his book got a fair write-up in The Torygraph (of all places!):

... pensions schemes and property booms have concentrated wealth and power in the boomer generation, and encouraged by the government and banks, “they borrowed as if there were no tomorrow”. However personal saving rates – the amount saved as a percentage of disposable income – have gone into the negative.

“[That is] almost unprecedented for any large western economy — and that in turn now imposes a heavy burden on their children,” Mr Willets said, “A young person could be forgiven for believing that the way in which economic and social policy is now conducted is little less than a conspiracy by the middle-aged against the young... I do not believe that this is because the boomers are unusually bad and selfish,” he said. “I think it is rather that we have lost sight of the importance of the contract between the generations that holds any society together. The breaking of this contract is above all what is broken about our society.”

This all supports my thesis that when arguing with a Home-Owner-Ist, the best strategy is to point out that the nice £x00,000 paper capital gain they are sitting on:

a) Is not worth much to them in practice (unless they keep MEWing, but that is a self-defeating strategy, saving up in advance is usually a better way of financing things), and

b) Means that their children would have to shell out an extra £5,000 or £10,000 a year in mortgage repayments just to be able to keep up with (let alone overtake) their parents, they'll be stuck in a one-bed flat until they're forty and there'll never be any grandchildren. It's not just a zero-sum game, it's a negative-sum game, taking the family as a whole, and we would have the first economy deliberately designed so that disposable incomes actually go down over time, rather than going up (which has been the overall trajectory for the past century or two).

Further, it's all well and good the NIMBYs yapping on about "garden grabbing" and "the hallowed greenbelt", but somewhere else some other NIMBY is preventing a house being built for your children, so how do you feel about that? Are your children really the sort of people you'd want to exclude from your own neighbourhood, and it not, why should they be excluded from somebody else's?

David Willetts speaks

From yesterday's speech "...fear of litigation means school trips and adventure holidays are now abandoned. Instead, children get their excitement by retreating to their bedrooms to play video games or the artificial stimulus of drink and drugs."

Fine so far, I think he's sort of missing the point a bit, but what's this?

"Nearly half of all gangs now meet in public playgrounds"

For f***'s sake David, don't keep us in suspense like this! Where do the other half of gangs meet? In shopping centres? In church halls? Somebody's front room? And where do they go once they have met? I will not rest until I find out! Do these gangs prefer swings, slides or roundabouts? So many questions!!