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All new business must be allowed to operate free of the tax regime altogether for a given time, so it is able to build a lasting job-creating infrastructure. Key areas of the economy such as manufacturing and agriculture must be awarded special-tax-status and given the grace they need to make the profits to expand and grow. If people can make money they will invest and work like trojans. Re-balance the economy by making taxation favour the sectors we need to develop.

It is going to be difficult to cut overall Government expenditure during a serious recession - doing so will likely aggravate the problem.

That however, should not stop the Conservatives from redirecting future Government expenditure away from the wasteful, to the useful.

There is plenty of scope for Osborne (or a successor) to slash billions off Labour's expenditure on quangos, databases etc and redirect it so that it helps the man in the street.

The Tories could not then be accused of cutting, but they would be highlighting the waste.

The quote is taken from "Agricola" by Tacitus. Agricola was resisted in his occupation of our lands by Galgacus, a British Chief.

End of Chapter 29
"....is said to have thus harangued the multitude gathered around him and clamouring for battle:—

Chapter 30
“Whenever I consider the origin of this war and the necessities of our position, I have a sure confidence that this day, and this union of yours, will be the beginning of freedom to the whole of Britain. To all of us slavery is a thing unknown; there are no lands beyond us, and even the sea is not safe, menaced as we are by a Roman fleet. And thus in war and battle, in which the brave find glory, even the coward will find safety. Former contests, in which, with varying fortune, the Romans were resisted, still left in us a last hope of succour, inasmuch as being the most renowned nation of Britain, dwelling in the very heart of the country, and out of sight of the shores of the conquered, we could keep even our eyes unpolluted by the contagion of slavery. To us who dwell on the uttermost confines of the earth and of freedom, this remote sanctuary of Britain’s glory has up to this time been a defence. Now, however, the furthest limits of Britain are thrown open, and the unknown always passes for the marvellous. But there are no tribes beyond us, nothing indeed but waves and rocks, and the yet more terrible Romans, from whose oppression escape is vainly sought by obedience and submission. Robbers of the world, having by their universal plunder exhausted the land, they rifle the deep. If the enemy be rich, they are rapacious; if he be poor, they lust for dominion; neither the east nor the west has been able to satisfy them. Alone among men they covet with equal eagerness poverty and riches. To robbery, slaughter, plunder, they give the lying name of empire; they make a desert and call it peace.

The last line in Latin!
Auferre, trucidare, rapere, falsis nominibus imperium; atque, ubi solitudinem faciunt, pacem appellant.

Sadly, we were completely defeated. Tacitus comments

Perdomita Britannia et statim missa
Britain was completely conquered and immediately dismissed

The battle took place in Scotland.

You need to be careful though, Tony, that the unscrupulous don't just utilise the tax-free period and then shut down the business as soon as the tax requirement kicks in (and then rematerialise in a different guise shortly afterwards as another "new" business)

"Chris" - are you sure you're not really Boris?! ;-)

Paul D, you certainly raise a good point. I suppose the only way around that would be to make trying to cheat the tax-free period a serious offence, on a level with fraud. Hopefully if we could introduce such a system any movement into taxation would be very gradual so that it could be priced in. We wouldn't want to pull the rug from under a news business that is proving successful. If we adopted a tax-free system, perhaps some employers might be able to apply to have the tax-free period extended if they could show that they needed more time to develop. We need a radical plan to get the economy moving again and a tax-free system for new business would help, without impacting on existing treasury revenue. The great plus about such a system is that people would be moving off benefit and into jobs, contributing to the economy rather than just taking from it.

Rebalancing the economy as Tony puts it should be our No. 1 priority. Some of us have been stressing in these columns the need to foster manufacturing industries and finally it appears that David Cameron has also come round to accepting it.

This needs a fundamental shift in the national psyche - and a corresponding shift in allocating the dwindling tax receipts towards science and technology education.

A recession every 12 years is in fact a necessity so that the economy can be re-invigorated. The recession is a god-send to make sure that the meaningless degree courses are scrapped.

We also must ensure that the regulatory framework is in place so that the excesses of the last 10 years are not repeated - it means that the house prices may have to be in the doldrums for a consderable period of time. Houses should be homes and not become cash cows.

Finally, we must give credit to Gideon - he may not be as amusing as Cable is but the man on the Clapham Omnibus seems quite impressed. Let us not forget that 12 months ago, it was Gideon's speech in Blackpool which started the ball rolling for us.

Well spotted, Paul D!

That is why, for example, why the £10,000 tax free limit for limited companies came and went so quick, because we tax advisers abused it to the hilt.

@ Yogi, keeping house prices low and stable is easy - the UK has had long periods of price stability in the first six-and-a-half decades of the 20th Century (except for a blip after WW2, let's blame that on Labour).

What's the secret? Sensible banking supervision, liberal planning laws (lots of new builds when and where required) and domestic rates/Schedule A taxation, which between them amount pretty much to Land Value Tax.

I am sure that everybody here will shout "Hurrah!" to 'sensible banking supervision' and "Boo!" to the other two elements of this. In other words, it will never happen.

Tony "All new business must be allowed to operate free of the tax regime altogether for a given time, so it is able to build a lasting job-creating infrastructure" If your proposals were adopted how would you expect a five or ten year old business to survive with an onslaught of new competition, they'd be laying off staff at the same rate the newby company was hiring.

"Boo!" to the other two elements of this"

Mark Wadsworth, perhaps because there is another way to achieve stability in the housing market other than liberalised panning laws and lots of new builds, like immigration control and a population policy.

A-Tracy, its down to individual business to develop its own niche and catchment areas. I feel its unlikely that a new retail business for example would be trying to pitch tent in areas that are already well serviced. There are so many areas of our economy that need to be developed, manufacturers for example, and as the new economy develops those new manufacturers could even supply and boost existing retail services.

@ Iain, of course we need a sensible immigration policy, not this 'open to all comers' nonsense, but immigrants fall into two distinct categories:

1. First world countries. Gross immigration from these is quite small and is more than compensated by emigration to the same countries.

2. Welfare claimants from Africa and Indian sub-continent, who take away social housing, but otherwise have little effect on house prices.

In any event, the previous two house-price-booms-followed-by-recessions (early 1970s, late 1980s) had nothing to do with immigration, which was negligible compared to what we have nowadays.

New retail businesses pitch up exactly where existing businesses have established a clientele for their product? Don't you ever wonder why so many Kitchen and Bathroom shops are in the same town, or why all the estate agents are in the same part of the town. Or indeed why so many restaurants all open up on the same street!

Small manufacturers can't compete with imports because of our social legislation (eg increasing holidays, shorter hours, more extended leave for a wide and increasing number of reasons) and high living costs which our exporting cousins simply don't have. Not enough people want to pay £10 for a china mug made in Stoke when they can pay £2.50 for one from Indonesia.

A-Tracy, the catchment area must be sufficently large if several retailers appear offering the same services. On the matter of imports I have long argued that we should impose a wage-equalization tariff so that British traders are not undercut and put out of business by sweatshop labour from the East. Those countries that do not pay decent wages should not be given free access to our domestic market. If we are serious about competition and consumer choice then we need a level playing field, currently our market is swamped by cheap and inferior produce. Quality Britsh made goods are being priced out because everything is done to encourage trade with China etc.

No, there are examples in Cheshire where very small towns have an explosion of similar retail outlets.

On the wage-equalisation tariff - it's everybodies free choice whose product they purchase and they choose overwhelmingly at the moment to buy the "cheaper and inferior products" from abroad. If you impose import tariffs to compensate for wage differentials whose to say that this won't provoke reciprocal tariffs on the produce that we need to export. Also how would you account within your proposal for the effects that this would have on the cost of living/inflation as our economy is now very firmly based on our ability to purchase for our needs at very low prices?

A-Tracy, as things stand consumers don't have a choice because the only option is the import, particularly in areas such a manfactured goods. You and I and everyone else pays for imports to stay dirt cheap by paying the higher interest rates needed to keep the Pound overvalued. So you get your cheap Chinese TV sets but pay for it in your mortgage. An internal market would mean us paying a more realistic price for goods, but it would also mean many more people in work and far lower interest rates. Once we developed an internal market abundant supply would bring prices down as business competes to corner the domestic consumer. Those who think cheap imports are wonderful should have a little think about the higher interest rates needed to make sure that the Pound keeps those imports dirt cheap. No wonder so many people end up being repossessed.

When I first got married in 1983 interest rates rose to 14% and we were certainly manufacturing lots more than we are today?
Over the last decade we had our own thriving pottery industry and I've always supported these businesses but they're still disappearing to low cost Countries.
If as you suggest we close the doors, push up prices are you sure that there'll be sufficient savings in the economy not to stoke up inflation and the cost of living? Your assumption that we would all benefit from lower interest rates discounts those that have been prudent and the majority of pensioners. It also discounts the very large numbers of families living in social housing and rentals, how do these people benefit from your lower interest rates because if everything costs more I can't see how they benefit from it.

A-Tracy, in 1983 manufacturing was beginning to fall apart as higher interest rates make it difficult for British business to export. On the matter of savers, we can't run the economy and set interest rates exclusively for the benefit of depositors, we have to look at the wider picture. We should encourage saving, absolutely, and I certainly remember Mrs Thatcher saying over and over about high interest rates that "It's good for savers" but we have to get the balance right between providing liquidity and having sufficient reserves. Like Mr Cameron said today, the British economy needs to be balanced to last.

We've had a period of low interest rates and we've seen a constant and steady decline of our manufacturers? If you ignore depositors and I'm including the money market funds, from whom do we borrow the money to encourage the largess that you seem to support. I actually agree with you about balance but I often wonder whether the scales have tipped too far for this to be achieved in the UK as we keep being told external factors in a global economy cause problems for us all.

We need to find new niche products that the developing world needs but they haven't got the technology or expertise to produce and then protect our skills. Rather than set tariffs our next generation needs to be a lot smarter than we were. In the pottery industry for example we actually sent experienced potters to train Indonesians, thus handing over freely hundreds of years of built up skills that were transferred in a very short period of time.

We need to move forward rather than looking back at what could or should have been.

Think about it Tony what is stopping anybody taking on a business loan using whatever security they have and starting to make something that people need? You're mainly taxed on profits most new businesses don't make any for a couple of years. Taxes that stunt growth are Employer's NI, Business Rates, Fuel Duty, Sick Pay, Maternity Pay etc. because these are demanded whether you make money or not.

A-Tracy, I'm glad we can agree that the economy now needs to be re-balanced, we have become too service-dependent and this has created a number of problems. On the question of tariff's I would ask people to consider they think it fair that British jobs are lost or never get an opportunity to develop because producers in the East can undercut with sweatshop labour? The Americans are starting to take this matter seriously and realize that its foolish to sacrifice jobs just to uphold some principle of free-trade.

I certainly agree that we need a revolution in skills and that should begin in the final year of school and developed through appreticships. Since the decline of hard industries we have lost much of our training infrastructure. That must return and here government has to support employers to train young workers. There must be more of a vocational dimension to education. I was educated in the early 1970s and as a young pupil studied metalwork, plasticwork and woodwork, we were taught how to make toothbrushes, cheeseboards and pennants, simple skills that every pupil was capable of, and we enjoyed the sense of achievement too. We need to get back to those core blue-collar skills, it does us no good as a nation to have every child efficient with a PC but lacking any other skills. However the training revolution must have industries to provide the jobs for the next generation, and we need to get back to making televisions, furniture, modes of transport, the everyday items that we can produce for sale to our domestic market.

A-Tracy, your observation at 16.31 that similar shops or businesses tend to open up in the same area is called "agglomeration" and is a concept familiar to people who are interested in land values.

You have however contradicted yourself. At 19.20 you state (correctly) that interest rate cuts will not benefit tenants relative to homeowners, and at 20.43 you state that Employer's NI, Stat Maternity Pay stunt growth whether a business if profitable or not (also entirely correct, you could add VAT to the list) but then you spoil it by adding Business Rates to the list instead.

Business Rates are just part of the rent that a business has to pay (whether a business is profitable or not). Successive governments have experimented with having Business Rates-free zones, and all that happened was that landlords put up the rent by the same amount.

The SNP are determined to run this experiment again - scrapping Council Tax and Business Rates and replacing it with higher income tax or corporation tax, and take it from me, it will be a disaster.

Hi Mark, thanks for your correction, I take on board your explantion about how business rates can vary and in certain circumstances be rebated as you've correctly pointed out via rate free business zones, we had examples of this in Salford and Warrington during the 80's and it certainly hasn't helped sustain industrial development in those areas.

We have seen an explosion of retail outlets and distribution centres which were in reaction to the retail boom and now many of these units are emptying.

I only included rates as an example of a business expense that the majority of existing businesses have to pay both in times of boom and bust. What is the contradition though because I'm confused and I want to understand better the policies that politicans are trying to force on us all?

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