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The Irish Chemical Industry has much higher Value-Added Per Employee than Germany; but Germany has the world's major chemical companies and Ireland has none.

With 2% Irish GDP coming in the form of EU Subsidy it decided to create a tax haven in the Port Area in Dublin and offers tax rates of 0%-10% for foreign corporations to base invoice and billing centres. Hence German companies transfer their profits to a tax haven which Germany funds through the CAP.

The peculiarity of Ireland's economic success is matched by Lugano in Switzerland, the Cayman Islands, Bermuda, Jersey, Isle of Man, Cook Islands, Monaco.

As for Balance of Payments figures - yes Sean the total is smaller than the sum of parts, but if you ever look at company accounts they too do not balance which is why ACAs use a "residual error" to balance them. If you look at National Income Accounts you will find they are not accurate - in the UK alone the ONS has revised them so often because the VAT receipts are wrong and around £2 bn error is baffling them, some thing it is mobile phone smuggling.

I doubt China could produce one accurate figure, nor Bangladesh or Pakistan, and I doubt Russia, Brasil, Argentina et al would know an audited figure if it was posted in neon.

The great thing about Statistics is that the ignorant believe the figures and the intelligent want to see the calculation

Alexander Drake

Rob, they are great ideas for policy development, and I don't have a problem with any of them - but save them for releasing to the punters once you are in Government. The key is to gain the electorate's confidence that you can govern and make policy in the national interest - and then roll out the policy changes, demonstrating why they are a good move. Use the benefits of incumbency to assist the changes, not fight against it.

I agree - extremism in pursuit of liberty isn't a vice - but I'm not sure it's the elixir that wins elections either...

Alexander Drake

Loyal Tory, interesting points on John Howard and the GST.

When the GST was rolled out in Australia, it wasn't characterised as a tax increase so much as an inequitable tax CUT for the wealthy, on food and other basics.

You're quite right - Howard sought to settle nervous nellies when he regained the Liberal leadership in 1995 by saying there would "never ever" be a GST - and yet, he shifted on it in the lead up to the 1998 election, but he argued its case as the INCUMBENT, and had begun to develop a rapport with the electorate that allowed him to sell it as a change in the national interest.

I also agree that the Conservative Party has won in opposition by promising tax cuts. But at that stage Middle Britain didn't recoil instinctively recoil when the words "Tory" and "cuts" were in the same sentence. They seem to now. Restore the bond with the electorate, and then you'll be able to carry them when you want to drive tax reform.

You'll have to give up the warm inner glow for the election campaign, but it's worth it.

James Hellyer

Rick says:

"but if you ever look at company accounts they too do not balance which is why ACAs use a "residual error" to balance them."

As an ACA I can say I've never heard such nonsense in all my life!


Obviously, I bow to your superior knowledge of Australian politics. My thoughts on how the GST was characterised largely came from a Kim Beazley speech in 1998 that we happened to hear about over here:

"John Howard's GST will snake down every suburban street every day, into the mailbox once a month, in the envelope with the telephone bill, into the shopping bag every week with the supermarket docket. And it will be there on every child's birthday and every Christmas time."

I am not opposed at all to some caution going into an election. Thatcher exercised plenty when it came to tax rates and other matters in 1979 and was later bolder with the benefit of incumbency. I think few Tories would have a problem with that sort of caution from a John Howard or a William Hague or a Liam Fox because we would know it is combined with personal determination.

But what is being proposed in the Conservative Party right now is a little different from that. What is being proposed here is to go into an election with Labour's tax and spending plans, combined with a leadership that believes it is wrong to cut taxes if the economy is weak. The model here is not anything any successful centre-right party has done that I am aware of but instead our own Labour Party that adopted Tory tax and spend plans in 1997--not because they were worried about being seen as too conservative on tax but rather because people thought they would not be.

Here in Britain people's main concern is that Tories don't mean it when they say tax cuts. Only 3 in every 100 voters believed we would cut tax if we won this May--far lower than the support for tax cuts itself. People here say that is because the "brand" is contaminated and that's right--except that it is also contaminated if we adopt Labour's tax policies. The real answer is to move on from the past and explain why past Tory and Labour governments have wound up raising taxes (and destroyed much of their credibility in the process), and explain how our approach would be different.

The truth is our failure in office to manage the currency properly led us to turn to tax increases after the 1992 election. Labour's failure to reform the public services has had the same consequences. We need to be clear that we now believe in Labour's 1997 reform of the way the currency is managed, and that we no longer believe that pouring more money into failing public services in the answer, as governments of both parties have done in the past.

We need to show we have a plan to make public services better and a plan to deal with the problems in our economy caused in large measure by the rising tax burden. We don't need to paint the whole picture but we do need to indicate what brushes and colours we intend to use to paint it.

It is a strange world indeed that Rick inhabits. Tory economic and electoral success in the 1980s is just an illusion, a bubble, a "cult of personality." Only manufacturing industry is real. Living standards in other countries are real but not here: here they are just a mirage, a mere accounting fiction.

I don't know which party one joins if one believes all this nonsense but it isn't Conservative. Maybe the Lib Dems with thwir support for higher tax? Or one of the fringe parties on the left or right that still believe in big government, tariffs and the industries that made us wealthy in the past but started to make us poorer as the need to prop them up grew.

But then again parties are really for people who believe that others can actually achieve something. So perhaps he would be better off in a party of one.


Fiction writers like to get acknowledgement for their output but the chap at 13:47 was too shy.

What is this "cult of personality" drivel ?

The simple fact is that North Sea Oil financed the destruction of manufacturing in Britain and overheated the Japanese economy leading to Tel Ramsden making a fortunate out of Japanese equity warrants. The Norwegians built a Fund with their oil revenues - and had Britain done the same it would have no pensions problem.

As for Manufacturing, 66% British exports are manufactured goods and a large proportion of imports. Much of the engineering sector survives on producing weaponry for export rather than having a broad base.

The German population grew by 18 million after 1990 thus increasing the denominator however Britain is not richer than Germany; its productivity is lower in key industries, and it is not a particular healthy economy with Consumption at 70% GDP.

So perhaps he would be better off in a party of one.

Frankly I think we all would be. You could have your own with The Mad Hatter, since you are seemingly histrionic. I hardly think it clever that the world's last major Communist country supplies us with computer equipment, electronics, and most of our manufactured goods - it seems China is going to follow Japan, Korea, Taiwan, Thailand et al in supplying the goods to the English.

After all the two sectors which have created the biggest number of jobs in Britain in the past 20 years are Hairdresing, and "Caring Professions".

There is a party that believes in the rubbish Rick spouts but I hesitate to spell out their name. British and National are in their title, however,


look at company accounts they too do not balance which is why ACAs use a "residual error" to balance them. If you look at National Income Accounts you will find they are not accurate

"Residual error" is in ONS Newspeak now "statistical discrepancy"

Residual Error is the National Income Accounts explicit delineation of imbalance, In the case of the Corporation the imbalances are not explicit but padded into timing differences or parked in derivatives valuations.

In short James Hellyer, you are correct in that ACAs do not use "residual error" - statisticians do. ACAs merely go through the numbers produced by the corporation which have been pre-fudged.

Atlantic Computers was a superb example, as of course is Enron, Global Crossing, Worldcom etc; and I would not even want to look at the banks and their valuations on derivatives contracts.

The basic pont was that noone expects the sum of balance-of-payments statistics globally to sum to zero because the numbers are inaccurate. In the case of the US under Clinton the reported Income and Assets of US corporations grouped to a larger sum than the statisticians could reconcile with overall share of profits in GDP.

Clinton had the statisticians upgrade their estimates of GDP growth predicated on what turned out to be fantasy accounting from Enron, Worldcom, Halliburton, Global Crossing inter alia.

The trick of parking liabilities in unconsolidated shells was one of the oldest, and it is now popular with both British and German governments; and has sad consequences as Freddie Mac and Fannie Mae will show the US Congress.


here is a party that believes in the rubbish Rick spouts but I hesitate to spell out their name. British and National are in their title, however,

Posted by: | 04 December 2005 at 14:10

You are a peculiar little species, I wonder which contributor is so afraid to put a name to the venomous little bile that you unload on site. Do you only crawl out during the darker hours or do you find you can glide on your slime during the day too ?


Rick and Anonymous: Please move on from this personal spat or I'll ban both of your IP addresses. There'll be no second warning...

James Hellyer

"In short James Hellyer, you are correct in that ACAs do not use "residual error" - statisticians do. ACAs merely go through the numbers produced by the corporation which have been pre-fudged."

You really don't know what you're talking about do you? Citing examples of audit failure doesn't mean that "ACAs merely go through the numbers produced by the corporation", it demonstrates that bad auditors can fail to detect - or even be complicit - in management fraud.


This thread has got a bit heavy since my last visit. I guess the old cliche - "lies damned lies and statistics" comes to mind! The point I was trying to make yesterday, was that economics seems to have changed so much over the years that it is difficult, or should I say impossible, for a layman to make much sense of it. We live in an age of soundbites and headlines. If the headline says "UK in economic crisis" we can take it in, though unless it is accompanied by some effect that we can experience, such as high interest rates, or job losses, it will not cause any great worry or distress.

It is possible that the ONS may be no better than a team of Enron auditors, though it would be extremely hard to prove. Personally I view a lot of official statistics with a great deal of scepticism, particularly those to do with asylum and immigration! The EU auditors have failed to give approval to the EU accounts for eleven years running, and everyone seems to simply shrug their shoulders and change the subject.

Along with all this uncertainty, we are presented with economic theories, like "cutting tax will increase economic growth or get us out of a recession [if we were in one]", or "increasing public spending will keep the economy growing". If a theory is presented to voters, it requires a lot of explaining and to have any chance of success, the person or people doing the explaining need to have credibility with the public. Both DD and DC still have that credibility, but they will need to be singing from the same hymn sheet.

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