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@Deanmck7
Your opinions may not be nonsense, but your assertion that I quoted is a nonsense.
1. You've taken a probably-inflated CND estimate (these people are hardly unbiased) for the entire life of the project and turned it into an >annual amount<. Even the CND never said £205Bn a year. That's absolute lunacy.
2. You've determined that tax avoidance is £50Bn a year. Official estimates are in the £35-40Bn range. Of course, they could be wrong. But there's more reason to believe their estimate than yours. But the difference £10-15Bn, not a big deal.
3. You've ignored the cost of ending that tax avoidance. It will have four costs. A. Increased regulation on UK companies (the law-abiding ones), reducing profits and therefore Corporation Tax, also probably reducing employment and therefore Income Tax and National Insurance. B. Increased investigation costs, more inspectors, etc. C. Because of A) above, increased incentive for companies to move more of their operations out of the UK, decreased incentive to come here, with knock-on effects on CT, IT, NI, and probably VAT. D. To the extent any of the above reduces employment, increased benefits costs. These (A-D) are real costs in the real world. How much will they cost? No one knows but it isn't zero, and you assumed it was.
4. You ignored the security cost of abandoning Trident. We know China, Russia, and Pakistan have nukes, and Iran might, or might be getting close. If history teaches anything, it is that while there are bad people in the world you need to either defend or deter. There is no defense against nukes, there has to be a deterrent. If we abandon Trident our defence relies on the resident of the White House. That comes with significant costs, moral and probably monetary. You may wish to rush into the arms of the Donald but I do not.
5. You vastly understated the impact of coronavirus on the UK budget. It's going to cost over £300Bn this year alone. You've accounted for less than £100Bn.
Your opinions may be valid. There's certainly an argument to be had about Trident and about whether we are doing enough about tax avoidance. There can be legitimate views about what the real costs are, and what the cost of reducing tax avoidance would be, and what could be saved by eliminating Trident. Many people will have legitimately different opinions about those things.
But the numbers you used were a nonsense, and I stand by that. If you want to advocate your opinions you should do so with numbers that make sense.
TakingMyTime; we are all entitled to an opinion, however, what makes mines nonsense and yours correct?
The whole reason the country is in a mess as businesses sector has been punching above it's weight for years. House prices at record highs, construction at record highs, petrol prices record highs, share prices record highs. However if you measure the GDP against the minimum wage and ask a simple question, when the recession hits (usually every 10-13 years) will the country be able to sustain the standard of living it has been the past 3/4 years whilst the majority of the population have been overspending to try and meet the overinflated prices of live.
The short answer is no.
The government is to blame for all of this. Whilst I do not agree with capping sectors and markets as everyone has an entitlement to make money inclusive of businesses, you can't have an unlimited financial business sector whilst having a capped public financial purse.
You have to earn money to make money as the old saying goes. Same applies to the country and how its run.
The cost to the country of furlough isnt as high as it first seems.
If we didn't have furlough and people were being made redundant instead, there would be the costs of unemployment benefit and associated claimable benefits to be taken into consideration.
Anyhow, I hope noone loses their job. I know its very unlikely, but things are bad enough for many as it stands.
@DeanMck7
"Given the renewal of trident costs circa 205 billion and the amount of offshore tax avoidance that's lost is circa 50 billion.
Stop these two for a year or so and the country will be fine. "
Sorry, but this was a nonsense. The furlough is a fraction of the cost. Thousands of small businesses are being destroyed. That means hundreds of thousands of people moving onto benefits instead of paying taxes. VAT and Corporation tax receipts are being decimated. People on furlough are getting a fraction of their income, and that means lower income tax, lower national insurance, eventually lower inheritance tax.
Lower incomes means lower house prices, which means lower stamp duty receipts. Lower share prices means lower capital gains tax receipts. Hardly any driving recently means petrol duty receipts were microscopic for several months.
The costs of this are astronomical.
" You have already decided that BA's version of events must be more truthful than Unites."
I disagree with this evaluation. One doesn't have to accept BA's version to be convinced that Unite is a thoroughly dishonest organisation.
I had the unfortunate experience years ago of being a union member and learning from bitter experience that the union personnel are more interested in their own power and remuneration than in the interests and well-being of the people they supposedly represent. Since, I've learned that not all unions are like that, but Unite has managed to convince me that they are driven by their own political agenda more than by the well-being of the workers. I hope WW crushes them, and the BA staff find a way to get better representation.
That’s a really well put post Boris.
I personally feel BA have created many internal cultures within BA (management/ crew at LGW vs LCY vs LHR WF/EF vs LHR MF vs LHR management if that makes sense if that makes sense.
At LGW you have the personable service you’d expect from a small airline, the infamous first class lounge manager that is well known (and discussed amongst frequent flyers, CSM’s that remember you by name rather than using an iPad etc. Whereas LHR is often the opposite at LHR (just my opinion).
I know LGW staff feel differently now the new manager came over from LHR.
I spent a lot of time looking at remuneration last night and it seems BA pay more than Virgin but have less happiness/ moral, they pay less than easy jet (1/2k PA) but nicer conditions. They need to find a happy medium and I hope they do
As I see it. No matter what the unions or government do (or attempt to do) BA or more exactly IAG are going to do whatever they like regarding re-structuring BA in order to maximise profits. Unfortunately for BA it looks like the PR battle is not going their way but will it ultimately make any difference to their plans in the long term. I don't think so. BA will increase their profitability regardless.
With regards to BA pulling out of LGW. We still don't know what their plans are. I'm leaning towards BA pulling out of LGW but replacing them with Iberia, Vueling, LEVEL etc. All of which are under the IAG umbrella. That way they keep their fingers in the pie with regards to slots. Again an example of the interchangable BA or IAG hat that gets worn to suit the purpose.
Personally, I don't believe the doom and gloom estimates touted about the aviation business. If you look at the load factors within Europe. Even now people want to travel. The same in the USA. Flights are busy. When people see this happening they are strangely drawn to following the herd. What doesn't help is some countries are still completely locked down. Take Australia for instance. Citizens are not allowed to travel overseas (unless you are granted an exception). Foreigners are not allowed in. If you are granted an entry permit everyone is forced to quarantine for 14 days in accomodation provided by the government at the port of entry. So no going to your home, unlike the UK. This has a devastating effect on Qantas business. They're not flying internationally, apart from repatriation flights until at least end of July. As a side note which most will be probably be aware the boss of Qantas, Alan Joyce is of the same mold as O'Leary and Walsh. When countries open up there will be a boom in people wanting to travel regardless of the risks.
Another thing I have noticed was BA was scared of Norweigian Air Shuttle. IAG own 4.16% of them and whether they come back is yet unknown. But Easyjet and Ryanair. They're the real danger. So much so, BA is trying to emulate them in every way.
As investors we want to see big profits and can quite easily not see the real effect it has on staff to achieve this. Morale in BA has been very low for a long time and I don't see it improving. The staff at BA are in general under appreciated but I don't see this problem being as prevalent in Easyjet though. A big shoutout to Portland for the high praise for the LGW crew. It's very much appreciated. Yes some staff are as useful as a chocolate tea pot and I'm mainly pointing the finger at management here, but that's the same in every business. The frontline staff is what the world sees and along with your product judges your business. In the short term IAG have a fight on their hands and they may lose the odd battle. But they will win the war. The question is, at what cost?
Good post Dean.
Personally on the furlough system, we have done more than most of the world (actually, I can’t think of a country that has offered so much for so long)
It’s going to be a tough for many sectors and no matter how long the furlough scheme lasts, there will be cut backs (but not in all industries)
Sibloggs totally agree, lets be brutally honest though. The government can prevent the damage to the economy and businesses by keeping the furlough going. My last analysis, it was costing the taxpayer circa 14 billion per month. Given that it struck in mid march, we are talking its cost to the taxpayer to be roughly 45 billion. In fact lets round it up to say 50 billion.
Given the renewal of trident costs circa 205 billion and the amount of offshore tax avoidance that's lost is circa 50 billion.
Stop these two for a year or so and the country will be fine. However, its the government intention to create the deep divide again (not wanting to get political but you get my drift)
Portland, agree with your point, however the damage is done with the media on the 12,000 employees and would be a waste of time giving the government it back as it wouldn't get the reverse appreciation it deserves from government and the media and as I said, the public have already been fed the negatives of BA (without going in to detail that it only equates to two days worth)
Micky - for those who are on amazing legacy packages, you’re right, they will be getting huge pay offs. Don’t like it, they can find another job! The company I worked for did a blanket pay decrease, reduced holidays etc. I took it on the chin and found another job and it worked out very very well. No one is making them work there!!!!
I have very little respect for anyone who strikes to affect the consumer!
The crew at Gatwick will not be worse off (unless they close LGW which I very much doubt). If you can show me evidence that the statements incorrect- I’ll hold my hands up!
Be warned, if you share me an article related to Unite, I will actually laugh
Portland......you really need to read the details of what BA is proposing to do to the existing staff.
The new employment conditions are even worse than the existing MF contracts !
To say you doubt the existing crew will be worse off financially is a ridiculous statement.
How would you feel about a 50% - 70% pay cut and a complete tearing up of your employment contracts and agreements .
Does your wife work at LGW? (that’s where I do 80% of my travel from).
Len is one of the biggest issues here, he spends a lot of time making up stories to stir the pot, complains about salaries of senior staff (not just BA) but he’s receiving over 150k and benefited from a 400k interest free loan. The guys poison imo.
Of course BA won’t withdraw the redundancy notice, if they did that, they would need to start the consultation period again! I really think Len thinks all organisations are not for profit sometimes, yes IAG have done exceptionally well in recent years but that hasn’t always been the case.
BA are playing hard ball but I really doubt (and hope) any of the new crew will be worse off financially. I really respect the crews at LgW, it’s common knowledge they get paid less but I always think they provide a more personable service (thank your wife from me!!). The new crew at LGW already get paid 7% less than EasyJet but with nicer conditions (and probably a slighter nicer working environment).
Portland, my wife is BA Cabin Crew and not one who is on the old "Worldwide" contract. The annual salary figures I've read being paid to Cabin Crew is laughable. If BA reduce my wifes wages by 70% then she may as well pay them to work there.
From what I have seen the number of BA cabin crew on the various contracts are Worldwide = 6,382, Euro fleet =1,853, Mixed fleet =6,027, LGW Mixed fleet=1,881.
The one thing we can't seem to get to the bottom of is that BA are saying the unions (Unite) won't meet with them and Unite are saying BA won't attend meetings with them either. I heard Len McClusky on Sky today saying he would meet up with BA anytime 24/7 if they remove the redundancy notices issued to staff. Perhaps that's the sticking point.
As far as we are concerned it is obvious BA are using the current covid situation to justify Willie Walshes long held view about restructuring. However, we can understand with BA wanting to save money. For us the full time cabin crew total salary is relatively low so i don't think that would change much. It's not going to go up anyway. That's if she still has a job. There are lots of ways BA can save money with staff (voluntery redundancies, job share etc.) but it does seem that neither side is talking about it, yet. 99.7% of LGW cabin crew are in the union so I expect there is a lot of pressure to get talking at least.
Ultimately, I feel this situation does not help BA or their staff but could have a big effect on IAG's profit as BA is the biggest slice of their revenue cake.
Borris, they need to or anything they say will be manipulated by the unions!
The more I think of this the more I feel Unite are having a battle with BA rather than Unite representing their members which is terrible for the members as they’ll be the ones that suffer from Unites actions. I can’t stand Unite and I hope the members fight back again their union for better representation!
My neighbour is a pilot for BA and a member of Balpa, they are in discussion, finding solutions etc, then you have Unite spending 1000’s on a hate campaign!
Who’s going to get a better result, my money is on balpa
I don't think the article is strictly accurate. In an email from Alex Cruz to staff yesterday he actually stated, "IAG's operating cash burn totals £178 million every week." One could presume that this covers all the airlines under the IAG umbrella not just BA. If not, why did he not state BA's cash burn. Although as this was an email to staff about job losses etc. it would appear to serve a purpose.
One thing I have noticed are the terms British Airways and IAG are used interchangeably to suit the agenda, when in fact they are two seprate entities. I think sometimes people lose sight of that.
Well said Mark!
Thoughts on redundancy.
There are going to be a lot of companies/ industries that are going to be badly hit by the upcoming worldwide recession/depression and there will be a lot of people across all sectors that will lose their jobs and I feel for every one of them. It’s a terrible feeling to lose your livelihood be it by redundancy or a business failing.
And given what we are facing in the coming months that makes govt vanity projects like the “look how tough we are being” quarantine period even more exasperating!
It seems the unions/ MPs are using the fact IAG have used money from the furlough scheme to benefit the company during the consultation period against BA. Obviously, its got nothing to do with the fact that airlines cant fly and need to reduce their fleet.
As WW and AC have pointed out, the furlough scheme have only saved us approximately 2 days of spend. The simple solution (with growing confidence planes will be flying) would be to pay the UK government back the money its been given for the 12k staff it will be making redundant via furlough payments (not for the staff that will keep their jobs after the scheme ends)
That would then not give the unions/ government a leg to stand on!
Well here's a proactive news story about it
https://www.proactiveinvestors.co.uk/companies/news/921146/iags-british-airways-burns-178mln-per-week-amid-job-cuts-controversy-921146.html
In the long term, streamlining the business is a positive for shareholders... The gov't may try and encourage the retention of employees though - it won't be helping the recession vibes
Whats your thoughts on the redundancies guys? A lot of pressure seeming to come from government ministers now about axing the 12,000 job cuts if BA continue taking the furlough money?
I do envisage a lot of shareholders within government so hopefully this dies down. I mean Jermey Hunt has been pushing and finally got horse racing back up and running (nothing to do with all those donations he got from the industry owners!!)