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Are government plans to cut the UK deficit ambitious enough?

09:10 UK time, Tuesday, 16 March 2010

Government proposals to reduce the UK's budget deficit are not ambitious enough according to the European Commission? Do you agree?

The EC document, which will be published on Wednesday, has warned that the UK is not on course to cut its deficit in line with EU rules by the deadline of 2015.

Chief Secretary to the Treasury, Liam Byrne says the report is "wrong" and would mean £20bn more in spending cuts.

But Shadow business secretary Ken Clarke said the EU was right and the government needed to cut spending more rapidly.

What do you think of the report? Would the spending cuts and tax rises required to meet the EU target cause "irreparable damage" to the British economy? What options should be considered? What would you like to see in this year's Budget?

This debate has now been closed. Thank you for your comments.

Comments

Page 1 of 4

  • Comment number 1.

    Whatever the government plans, it can (and probably will) be altered by the EU, as since the Lisbon treaty came into effect, the EU can effectively take control of the economy of any of its members.

    Having said that, I fail to understand how it is that the government still gives billions of pounds away each year on foreign aid.

    There is so much more the government could do to reduce the deficit, but as it goes against their dogma, it's unlikely to happen, and it will be the British people that suffer.

  • Comment number 2.

    I think that the siren voices from the EU are typical interference from Brussels. Gordon Brown and Alistair Darling are right to hold back on cutting the deficit until we have real signs of recovery in the U.K. economy and not just a few "snowdrops".

  • Comment number 3.

    Irreparable damage has already been done.

  • Comment number 4.

    The only people who think so are this wretched Government and the Lib Dems. Most sensible people can see the ratings agencies hovering over us. If they sniff a Labour win then our AAA rating is toast and we are heading for a depression as we try and find enough money to service our stupendous debt. I believe that the Government are not being straight with the public and that following an election they would hold an emergency budget to act on the debt. They will not do this prior to the election because they care more about themselves than they do the country. The EU can see this, hence the report. Only an idiot (admittedly there are many in the UK) would keep on borrowing at this time. We really do need to take some pain to sort this out and at the moment all our political parties are paralysed with fear with what we really need to do to sort out this mess. For some ideas, look at the stance of Greece and Ireland and this will give you some idea about what is coming our way soon and for me, not before time.

  • Comment number 5.

    No. Our budget deficit is similar to that of Greece, which is facing a bailout from the rest of the EU. Because we're not in the Euro (and wouldn't qualify anyway) we will not get bailed out. We're in serious trouble and need to start paying off the debt NOW.

  • Comment number 6.

    When you are in debt to the extent that the UK is, you cannot go on borrowing non stop. The £178 Billion figure is not our total debt but the amount our debt is rising in a single year.

    This is too scary to ignore and must be reduced as soon as possible. The politicians do not have the political courage to do this as they are more self interest driven and we need a completely new set now..

  • Comment number 7.

    We simply must cut our deficit as a matter of urgency. This government is in denial.

    Its OUR money after all, and its OUR future. The Labour government should not be playing politics with the future stability of the UK. By holding back on public sector spending to win the public sector vote they are pushing us closer to bankruptcy.

    There is so much bureaucracy, so many quangos, so much waste. It HAS TO STOP.

  • Comment number 8.

    The whole area of central and local Government needs to be cut back, not by cheese-paring across the board but by removing whole departments that have been added over the last thirteen years.

    The only thing that has changed in that time is that hundreds of thousands have been added to the Labour payroll vote and red tape has multiplied to the point where both businesses and private life are being strangled.

  • Comment number 9.

    In the last year or so we've had a surprising amount of sense coming out of the EU, most of it against our government. The UK government has completely mis-managed the economy so far so it's rather hard to believe that they could be right here.

    Any signs of a recovery are an illusion, bought at huge expense with incredibly dangerous policies. You can't keep things going by printing money, and borrowing even more just makes things even worse in the long run, and the government (and Bank of England) has totally failed to grasp those two very simple points. The "irreparable damage" is needed. It'll destroy the very things that have caused the problems. Only once that has happened will we be in a position to have a real recovery. Yes, it'll be very painful in the short term, but what Treasury would have is very long-term suffering. They can't face the pain of pulling the plaster off in order to treat the festering wound beneath. Unfortunately I suspect that the public can't either, which is why we're seeing continuing signs of irresponsibility from the government in the run-up to the general election.

    When things are eventually on the mend we must make sure that we don't repeat the same mistakes as before. Chief among these is an obsession with borrowing money. That should not be routine for either individuals or businesses. It only ends up costing more most of the time and the banks are the only ones to benefit, as long as there are no defaults. A business borrowing to expand, where it will make more money from the expansion than it'll be paying in interest makes sense. Borrowing just to stay put, though, is simply an additional cost. It's the same for individuals, ultimately paying a lot more in order to have something now instead of saving up (and if you think of the saving as merely a shift it's only the first thing you get that you have to wait for).

    Everyone, from individuals to the government, need to learn to live within their means, and tighten their belts when times are tough.

  • Comment number 10.

    Gordon Brown has been trying to shore-up his self-perceived image as a sound and prudent finance leader, by underplaying the extent of the effects of the global downturn on Britain, which were exacerbated by his inept policies as Chancellor. Of course we need to bring down the deficit quicker than Labour are suggesting, but they are hoping to 'con' the British people into voting for them again. If they succeed, it will be a disaster for the Country.

  • Comment number 11.

    No, I don't think they're ambitious enough. Part of the problem is to do with future taxation on investment, the longer it takes to tackle the deficit the worse off people will be, in terms of Jobs and Job Security.

    Who in their right mind will invest in jobs if the massive deficit will mean massive taxation on any profits.

    Typically the Labour Government Spin Machine, has already started to criticise Brussels, tapping into the anti EU sentiment. Brussels knows we're bust, most business people know the government is incompetent in handling finance, Ministers cling to public sector projects like limpets - because it's about their careers when it should be about controlling the public purse.

    How much more of the NuLabour rubbish do we have to put up with?

  • Comment number 12.

    Labour have nothing to loose by understating the size of the problem. If they loose the next election it is not their problem to sort out, they can say whatever they like now. If they somehow manage to win the next election then they can't be held accountable for another 5 years!

    The opposition parties, on the other hand, have much to gain by rubbishing Labour's plans.

    I won't trust what any politician says about the deficit until after the election. Come to think of it, I don't trust much they say at any time.

  • Comment number 13.

    I doubt it very much. I doubt that there has been that much honesty about the actual position in the first place. I doubt that this government at least will have the aptitude to address the situation - after all they got us here. I doubt a new incoming government would be much better.

  • Comment number 14.

    All the big cuts are going to be announced after the general election. Probably just as England lift up the World Cup.

  • Comment number 15.

    Until detailed plans are actually presented by each UK political party as to how they intend to go about reducing the budget deficit, it is difficult to say if they will be sufficient... and even harder to decide who to elect come May.

    We need to see what is considered essential spending and how that is to be protected and paid for, what is to be reduced or cut out, where the money is coming from and where it will be going. Unless I am convinced that a spending cut is wholly necessary and unavoidable, I do not see why I should accept any increase in taxation - I don't feel we are getting value for money NOW never mind when 'the deficit' is used as an excuse to cut back on the services which are the only reason taxation is paid in the first place.

  • Comment number 16.

    I suspect the Labour party is deliberately trying to collapse the pound to have an excuse to force the Euro on us.

  • Comment number 17.

    This deficit is massive.The worrying thing is that the electorate now seem to be falling for the same old spin.When GB was chancellor he kept harping on about only borrowing within the (ever increasing) economic cycle - we should have been paying down debt but were already running a large deficit when we were told the economy was strong-also remember the good old no more boom and bust speech he made.Why should we now believe that continuing to borrow at unprecedented levels will be good for us long term ?
    Commonsense alone (and I am an accountant) tells you that you cannot borrow your way to recovery,in fact you are just adding to the long term pain. Also history has shown that goverment is not as good as the private sector at spending our money - as an individual we take on a mortgage but we pay it back and we only borrow for Capital investment(ie for an Asset) not for everyday spend - I prefer the Australian model which is striving to eliminate government debt completely over a period of time.We already face an enormous amount of hurt for the largely ireresponsible handling of our economy for the last 12 years-I hope we are not naive enough to think that more of the same is the way forward.

  • Comment number 18.

    The EU is right to worry about Britain. If we (and Germany who are getting similar predictions) can't straighten out our economies how on earth can we be expected to bail out Greece and subsidises all those French farmers? It'll be a disaster!

  • Comment number 19.

    Much of our recession has been caused by sheer greed and the fact we were taken into a war by blair which was basically none of our business.

    Our industries are finished, and we export little.

    And now we are being dictated to by the EU.

    I honestly believe the time is near when people are just going to say enough is enough...where are the taxes going?

    Why another fuel rise.

    Why are we supporting other countries with billions of pounds in aid when our own country is basically bankrupt.

    And why further cuts in public spending when our taxes have risen significantly and compared to even ten years ago we have less public services than ever before.







  • Comment number 20.

    All this user's posts have been removed.Why?

  • Comment number 21.

    2 points to make here-

    Firstly I am not happy with how the gov are kicking jobs but still spending stupid amounts on red tape, pay rises, none jobs and schemes we dont want. The daft ideas and insane wages need to be cut first, then the staff.

    Second I am pretty sure if we do as the EU says we would be in a worse position than greece as we wont be bailed out. Some of the EU dont like us anyway since one the lead players is france who have had a chip on their shoulder for a long time (and didnt want us joining in the first place!). The EU can dictate how we run our economy but they wont want us to succeed anyway. They need to get their noses out or their wallets.

    In the end we are stuck between a rock and the EU. One as intelligent as the other.

  • Comment number 22.

    If you are unfortunate to have large ammounts of debt on your credit cards,you do your very best to reduce your overspending and pay of the debt as soon as possible.Why cant this stupid Labour government se that.

  • Comment number 23.

    The EU is right to point out the problem what the Government (David Milliband) is doing in China is most likely seeing if they can get the credit limit extended from the Chinese bank manager.

  • Comment number 24.

    The 3% deficit limit was agreed as part of the Maastricht Treaty and was thought appropriate at that time when private credit was keeping western economies buoyant.

    Times have changed, government borrowing is now required to replace private borrowing. Government deficits are if anything too low at the moment and as a result there is a risk of uncontrollable increases in unemployment, and should not be reduced unless and until private credit returns to its pre-crunch level.

    The needs of the real economy are much too important to be over ridden by the irrational fears of market traders.

  • Comment number 25.

    Neither Brown's NuLabour nor Cameron's BluLabour are actually planning any cuts; both have made totally unrealistic assumptions about economic growth and therefore the increase in tax receipts so they don't have to reduce the already excessive powers of central and local government.

    With the productive sector carrying its own weight in government spending (50% OF GDP is spent by the government) there will be no growth, tax receipts will not rise and the IMF will have to impose the genuine, deep ("swingeing" if Cameron prefers) cuts in the state sector we need. one million plus non jobs since 1997 at an average of £30, less recycled "tax" is £20 Bn/year which is an easy win, if either party is willing.

  • Comment number 26.

    ceretainly the deficit cutting plans are sensible we are talking about
    the affect of people's lives if you are looking at cutting the cost of the benefit system how many vulnerable people are to be considered worth alienating further after all the work to drastically cut nhs waiting times who are going to have to wait longer to pay off the deficit the right wing consider that the deficitis a balance shhet that does not affect people's lives, since all mps are earn way above average earningsthey are not affected by public expenditure cuts in public spending hit the most vulnerable hardest, not as they would have you believe the whingeing comfy middle class who don't want to pay for anything other than themselves4 years to halve the deficit
    the way the conservatives bang on about it you'd thinkthey would have paid of the post ww2 marshall plan debt when they were in office
    infactthe labour government did it turing the period of sustained growth during the early 000s
    their breath taking hypocrisy would be beyond belief it wasn't a permanentfeature of the shadow administration,the leaders of whichwere key advisorsto the disasterous tory chancellors of the 80s and early 90s
    their reelection would inevitably mean a return to the high inf;lation high interest rates and unemployment which would accompany the promised return to thatcherite policies

  • Comment number 27.

    Whether ambitious enough or not, I do not believe they are Honest enough .. and will not be until the election is done with. The conservatives want to be more open and honest - but will lose votes as a result ; meanwhile Labour want to hide the facts from the electorate in order to try desperately to retain power - then after the election they know they will have to cut costs or completely bankrupt the nation.

  • Comment number 28.

    " 20. At 10:22am on 16 Mar 2010, Emily radetsk wrote:
    I think we can't cut back too severely or the economy will shrink. I don't see why people are criticising Brussels, if we'd listened to them years ago on economic policy rather then being blindly led by USA we'd be in much better shape."

    So why are Greece and Ireland completely bankrupt then?

  • Comment number 29.

    The economy

    a simple example - a friend wants to open a coffee shop within an existing shop. clears everything with everybody properly ...

    a year later the planner from the council still refuses to give permission - for no apparent reason ... result : three jobs not created for one year ..

    this planning man should be the first type of public servant to go

  • Comment number 30.

    We should have no doubt that we will be paying back the £175+Billion for decades. It will be necessarily painful whoever wins the next election: tax rises and cuts in public services are inevitable.

    Inevitable, that is unless you listen to the Labour party who for months denied that there was any need for cuts. Instead they just keep on spending.

    That's fine for them with their pensions, fees for public speaking and memoirs, but the rest of us will be paying back this debt, and the interest on it, for years to come.

  • Comment number 31.

    The Labour Government has got us into this financial mess and their current plans will not get us out of it.

    The solutions are quite simple.

    1. Workers are more important than the long-term unemployed. People who don't want to work should be moved from expensive accommodation that they cannot afford. They should live in cheap accommodation costing no more than £100 a week, regardless of the number of children they have.

    2. Replace most jail sentences with fines, taken directly from bank accounts or via loans with unemployed people having to work to pay back fines. Bring in bailiffs and take back as much money as possible from homes etc to avoid the expense of jail.

    3. Place persistently violent criminals in oubliettes and just feed them on basics. Turn most prisons into cheap accommodation.

    4. Scrap Trident and do not enter into illegal wars and invasions.

    5. Make minimum pay 50% higher than benefits, so that people have an incentive to work. At present most teenagers would be better off having lots of children rather then going to college. Increase tax relief to £12,000 and reduce total benfit packages to £8,000 per household.

    6. Accept that the UK is a pauper state and needs to take appropriate action. We can't afford to keep pretending we're well off. Most of us aren't.

    7. Introduce a maximum wage of £100 an hour. The highest paid public sector employee should be the Prime Minister.

    All these policies should save billions.

  • Comment number 32.

    "Ken Clarke said the EU was right", I doubt many other tories agree with that. The EU is right when it suits the Eurosceptics.

  • Comment number 33.

    This is ridiculous, we could reduce our budget deficit a lot quicker if we didn't have to pay so much money to the EU.

  • Comment number 34.

    There is no excuse for any developed country to be running a deficit amounting to a double digit percentage of GDP, and it is catastrophic economic incompetence that got us here. Labour has no idea how to run an economy, it never has (history proves it), and chances are it never will. Ken Clarke got this country out of recession once, and I'd trust his judgement on this far more than that of anyone on the other side of the house. As for the EU, it's high time the UK adopted the French way of doing things. Sign anything, agree to anything and feign co-operation to avoid confrontation, and then just go ahead and do their own thing regardless. It works beautifully for them, and could for us.

  • Comment number 35.

    The economy is in a huge mess. The 'government' are trying to spin and make it appear not as bad with the election looming. Brown's handling of the economy was incompetant and this countries childrens' children will pay for his socialist folly. We MUST get these charlatens out of government before they turn us into the third world country. Why oh why do Labour ALWAYS destroy OUR countrys economy

  • Comment number 36.

    There don't appear to be any plans, just a target. You always get this with stalinist regimes and the outcome is certain- failure if we don't get rid of these fools.

  • Comment number 37.

    infactthe labour government did it turing the period of sustained growth during the early 000s

    What planet are you living on desabled ? You are deluding yourself if you think Labour paid down debt in the "good" times - we were borrowing hand over fist throughout Labour's reign apart from perhaps their first year in power and that was because they inherited Finance in relatively good shape.

    Also I actually disagree with some of the stuff that happened in the Thatcher era but you are completely misguided to suggest that they did not pay down debt whilst in power.

  • Comment number 38.

    Re# 29. At 10:40am on 16 Mar 2010, James wrote:

    "The economy"

    "a simple example - a friend wants to open a coffee shop".....


    But the friend can't because before they even start the local council wants an unfeasible high £50,000 a year rent to subsidize wastage from the PR department and the three unnecessary managers they employ who are managing the manager of applications.

    Therefore the initial idea of the friend even starting to run a coffee shop is a no go before it even gets off the ground.



  • Comment number 39.

    The budget deficit is very, very close indeed to being unmanageable, no matter what any politician of any party may say. It is too huge.

    Mark my words; after the General Election, we will see that, far from beginning to come out of the woods, we have not yet even gone into the woods.

    Why anyone would want to govern this country right now is completely beyond me. Whoever ends up in power is on a hiding to nothing.

  • Comment number 40.

    If you're up to your neck in debt, you stop spending money and try to pay it off. You don't apply for another credit card, or another loan.

    Surely the 'economic experts' who are telling us to keep spending money are the same ones who got us into this mess in the first place?

    Time for some common sense - if you can't afford it, you can't have it. And right now, we can't afford anything like the current levels of public spending.

    So to this, and the next government - STOP SPENDING MY MONEY!

  • Comment number 41.

    What plans? There does not seem to be any. The Government seems to want to continue to spend beyond it's means, and will I fear continue to do so until the markets say enough is enough and the pound crashes.
    The UK is acting like an individual who is spending way more than it earns, knows he has to cut back, but keeps putting it off, and instead puts more debt on creditcards etc to continue to keep the lifestyle to which they are accustomed.

  • Comment number 42.

    "2. At 09:52am on 16 Mar 2010, Alfred Penderel Bright wrote:
    I think that the siren voices from the EU are typical interference from Brussels. Gordon Brown and Alistair Darling are right to hold back on cutting the deficit until we have real signs of recovery in the U.K. economy and not just a few "snowdrops". "

    Wrong. It's the deficit that is preventing the recovery. Too much of our tax is going to pay the interest on the ever increasing debt - and those payments will increase even more if we lose our AAA rating. All this stuff about not cutting spending because it might hurt the recovery is total nonsense - you don't pay of your credit card by adding more debt to it! Only Brown, Darling and few other idiots cannot see this.

  • Comment number 43.

    Unfortunately, Brown is apparently still under the belief that he is "saviour of the world" and is always RIGHT no matter what. He believed he had got rid of "boom and bust"; he was patently wrong. When V. Cable challenged him in Parliament in 2005, Cable was told he as wrong and Brown was RIGHT; he was patently wrong AGAIN. How many times and incidents where he was wrong have to be repeated?

    I suspect the if G** himself told Brown he was wrong, Brown would contradict him

  • Comment number 44.

    31. At 10:41am on 16 Mar 2010, Jonathan wrote:
    The Labour Government has got us into this financial mess and their current plans will not get us out of it.

    The solutions are quite simple.

    1. Workers are more important than the long-term unemployed. People who don't want to work should be moved from expensive accommodation that they cannot afford. They should live in cheap accommodation costing no more than £100 a week, regardless of the number of children they have.

    2. Replace most jail sentences with fines, taken directly from bank accounts or via loans with unemployed people having to work to pay back fines. Bring in bailiffs and take back as much money as possible from homes etc to avoid the expense of jail.

    3. Place persistently violent criminals in oubliettes and just feed them on basics. Turn most prisons into cheap accommodation.

    4. Scrap Trident and do not enter into illegal wars and invasions.

    5. Make minimum pay 50% higher than benefits, so that people have an incentive to work. At present most teenagers would be better off having lots of children rather then going to college. Increase tax relief to £12,000 and reduce total benfit packages to £8,000 per household.

    6. Accept that the UK is a pauper state and needs to take appropriate action. We can't afford to keep pretending we're well off. Most of us aren't.

    7. Introduce a maximum wage of £100 an hour. The highest paid public sector employee should be the Prime Minister.

    All these policies should save billions.


    ----------

    What can i say - i agree entirely!


    just to add: how are we supposed to cut the deficit (debt) if we dont curb our spending? is it not common sense that wehn trying to manage your finances you first look at your outgoings and try to reduce them? the 2 "illegal" wars are costing billions EVERYDAY. until there is talk of totally pulling out - the tax payer will forever be paying more and more. just look at the fuel prices! petrol is going through the roof despite the barrel price being at a moderate low. the tax we pay on petrol is immoral. its a guess, but a confident guess that in the last 12-15 months and taking into consideration the next 3p price on petrol in april - mr bronn would have added atleast 12 pence tax per litre of fuel! he has restructed the road tax pricing to take more money, introduced hips which is another tax, wants to add a bin tax, which is another tax.

    id cards and the 2 illegal wars have contributed to our financial mess - fact.

  • Comment number 45.

    All this user's posts have been removed.Why?

  • Comment number 46.

    Nu Labour will not reduce deficit at present it is playing politics with the UK public as it is scared to increase taxes and cut services as it would cost them votes and they are desperate to stay in power the cuts I think we should make is in local Councils for example The Chief Excecutive of Cheshire East where I am is on between £171,000 to £222,000 per Year way way too much cut it back now I say for doing what I say many others Iam sure are too on large wages

  • Comment number 47.

    Despite the UK finances being in tatters, Mr Darling will "find" a few £billion of borrowed money to give to voters before the GE. We ALL know and now the EU concurs, that drastic spending cuts & tax rises are necessary. The Conservatives will not be so stupid as to return UK to recession but we need to get on with it NOW.

    I also see Labour coming up with all these "voter friendly" policies that they should have pushed out over their 13 yrs in power and we know none of them will actually happen. Labour under GB has absolutely no shame and the sooner you marginal voters put them out of office and us out of our misery the better and remember - we don't want a hung Parliament thank you or nothing will get done.

  • Comment number 48.

    Plans, they have plans?

  • Comment number 49.

    Obviously by this page and the comments most of the Brits have stated, they appear to have absorbed the political bull handed out by the Gov.
    The continuous insults thrown at the Brit Public thru the Gov Media on how we should recoup almost a £trillion sunk into the economy over the last year.
    If the Gov listened to their constituants they would stop giving our hundreds of billions away in foreign aid to countries whom send rockets into space (India), China, which is the fastest growing economy in the world.
    How is it that we are giving hundreds of billions away to these countries when we are in a financial state of collapse which the gov denies?
    Then the Gov wonders why the BNP are getting so popular.
    Sorry big 3 parties your'e not even on my list to vote for.

    The UKIP and the BNP have the subjects that matter to Jo Public in their Manifesto not the Big 3.

  • Comment number 50.

    We shouldn't be needing the EU to tell what is obvious... the UK has spent way beyond it's means, and is continuing to do so.

    We need huge cuts, and fortunately, there is much that can be cut without any real harm. So much waste has already been documented that it hardly needs repeating... but here's a start:
    Overseas aid - why should UK taxpayers fork out for corruption and incompetence abroad?
    Quangos -each with it's own senior management, crazy salaries and pensions.
    Huge payments to foreign scientists for dubious climate change studies.
    Health tourism.
    Targets and the pen-pushers who monitor them.
    University academics who turn up for work a couple of days a week.
    3rd rate polyversities and the hopelessly unsuitable students who attend them.

    And I haven't even got to the EU and their industrial scale money squandering machine!

    Wake up and start cutting!

  • Comment number 51.

    Even if this crew managed to reduce the deficit by half in four years it would still be £85billion, clearly unsustainable.

  • Comment number 52.

    about as tough as wet tissue paper, and for all those who agree about spending more, who is going to pay it back,remember it is a public sector borrowing requirement, why because there are far to many employed in the public sector doing little or nothing it swallows cash wholesale and produces not one pennys worth of goods in return

  • Comment number 53.

    Cuts and tax rises aren't the only way out of this, and the government knows it.

    If it cuts too hard the infrastructure of the nation will start to suffer, and it will be very expensive to put right in the future. If it taxes too hard it will cut off the consumer led recovery (which, since we have have precious little manufacturing, is the ONLY way out of this mess).

    But there's a third way. Let inflation rise to 4%, and inflate our way out. Just like your mortgage doesn't seem so big after ten years of paying, so too our debt will 'shrink' as well.

    But the government will couple this with one more nasty surprise. It will keep interest rates very low. Lower than the rate of inflation. So your savings will actually go DOWN in value. This will force people to find other places to keep their money. Like buying property for example.

    And hey presto, we'd have a consumer led recovery.

    This is the real plan. This is the ONLY plan. And the government is being duplicitous in hiding it from us.

  • Comment number 54.

    The EU isn't always right you know. The chancellor has adopted a strategy which makes long-term sense. Get the economy recovering and use some of the expansion to reduce the impact of cuts and taxes when they do have to be applied.
    This strategy is beginning to pay off in the USA.

  • Comment number 55.

    *****19. At 10:15am on 16 Mar 2010, Xantal wrote:
    Much of our recession has been caused by sheer greed and the fact we were taken into a war by blair which was basically none of our business.

    [All started with the interest rates being Too low for too long, money was too cheap]

    Our industries are finished, and we export little.
    [Very true]

    And now we are being dictated to by the EU.
    [Which NO ONE has voted for in its present form]

    I honestly believe the time is near when people are just going to say enough is enough...where are the taxes going?
    {Wish they would, trouble is we have a gutless electorate, who are herded like sheep & fed benefits by Govt & they know it]

    Why another fuel rise.
    [Pounds dropping against the dollar, & speculators ?]

    Why are we supporting other countries with billions of pounds in aid when our own country is basically bankrupt.

    [Beats the hell out of me... ask 'Buster Brown']

    And why further cuts in public spending when our taxes have risen significantly and compared to even ten years ago we have less public services than ever before.

    [Because 'Buster has created the biggest benefits dependant state in history, to increase the Labour voting base & we can't afford it, never could] ********

    It all boils down to the fact that Labour has never worked out as viable option, every one since 1924 has gone bust, then it takes years for the next Govt. to sort out the mess.
    All they do is tax.
    You don't have to be brain of Britain just to put the 'prices up' and you can't shop any where else!

    But the sheep will keep bleating in the lame hope their not going to get the 'chop' from tax farmer Brown.

  • Comment number 56.

    I am surprised that the current mob in power has'nt said they will reduce the deficit by 50% already as that is about the natural fall in deficit recorded after all recessions in the past when the economy recovers. The real difficulty is the remaining 50%. As we leave recession and unemployed numbers fall and tax reciepts increase the elected government of the time will claim to have reduced the deficit when in actuallity they will have done nothing !!!

  • Comment number 57.

    I'm still perplexed by the anomoly of a meltdown in the private sector resulting in the public sector having to bear the brunt of swingeing cuts.
    WHY?
    Ken Clarke...that old dinosaur. He's a relic from a bygone day, an old Thatcherite, whose attacks on the public sector left 3 million unemployed in the early 80's. Does he propose putting tens of thousands of public sector workers on the dole again? What purpose would that serve. And those left..pay freezes or cuts on already poor wages. Hardly the panacea to the ills of a cataclysmic capatalist disaster.

  • Comment number 58.

    No - they are not. The UK has been living on a bubble of excessive borrowing for far too long, just like the US. That is why they have both been hurt relatively far more than those countries with far less of a debt culture.

    The problem is that, with an election coming up, NONE of the parties want to tell the public just how hard and painful it will be to get back to a reasonable state of affairs.

    It would be easy to make party political points but the reality is that we can see that the current government claimed financial prudence while mortgaging us up to the hilt - but we have no idea what the other parties would have done. I suspect exactly the same.

  • Comment number 59.

    to 26 Desabled.

    The period of sustained growth you are talking about was from GB spending financial services tax receipts, which we all now know was toxic debt, so there WAS NO period of sustained growth, only fantasy growth. If Gordon has put some money in the piggy bank instead of balooning up public services to get votes we would not be in this mess. Remember - "there will be no more boom & bust" spoken by a delusionist who thought he actually HAD stopped it.

  • Comment number 60.

    The economy is in a state, and the coffers are empty.

    Whoever wins the next election, we'll see tax rises and spending cuts.

    Yet we'll still carry on doling out foreign aid, and providing healthcare, schooling and other services to foreigners who are still pouring into the country.

    And the government is still committed to building 3 million houses, and the expenditure involved in providing the extra infrastructure that will entail.

    The tories might be useless (well, not might - they ARE useless).

    But Labour has to go NOW!

  • Comment number 61.

    >>> 39. At 10:56am on 16 Mar 2010, Doctor Cheese wrote:

    Why anyone would want to govern this country right now is completely beyond me. Whoever ends up in power is on a hiding to nothing.

    This is so true. A pyrrhic victory for the Tories if they win. Just as in 1979, inheriting a broken economy will require very painful measures which they will be remembered for. How soon we forget who keeps breaking it.

  • Comment number 62.

    It looks like we're in for another round of privatisation to pay off our debts and it'll be the wealthy who benefit again. It has been corporate policy to offshore jobs to boost profits leading to massive trade deficits, hence everything being made in China. The corporations have gained while the working man has seen his wages either stagnate or fall. Borrowing has been used to offset the drop and now the country is over burdened by debt. It is high time that governments take on the corporations. Their profiteering and blatant disregard for society, democracy and the environment has lead us to the edge of the abyss

  • Comment number 63.

    Did anyone really notice sustained dramatic improvements in services when the government starting spending billions on everything that moved? I didnt.
    Funny that the slightest mention now of a cutback produces squeals of horror at the 'draconian reduction in services' blah blah blah. Fundamentally the public sector finds it very easy to spend other people's money and hates to be told to stop. But now is the time. I'd start by axeing a lot of Capex - government, local councils are always knocking down decent buildings to build the latest must-have legacy vanity project. Then I'd scrap the gold-plated pension schemes. Then the million pound payoffs for Council CEOs. Meanwhile at the other end, the end of my street has THREE name plates, two of which are less than 2 feet from each other. Savings can be made everywhere with minimal effect on services.

  • Comment number 64.

    We are already paying 0.95% more on govt bonds than the Germans, more than Italy, and more than Spain, and only 0.1% less than Portugal who were forced recently into significant and immediate cuts.

    We cannot pussyfoot about any longer, the markets have spoken, we have no choice but to cut our deficit, and to start doing it NOW. Labour will never do it, they are too much in hock to the unions and public sector vested interests. As ever, a tory government will have to come along and make itself unpopular by undoing the mess created when a labour governemnt has spent all our money and more.

    Will we ever learn?

  • Comment number 65.

    #39. At 10:56am on 16 Mar 2010, Doctor Cheese wrote:

    "Whoever ends up in power is on a hiding to nothing"

    I've thought of this too.

    If I didn't know better I would think that someone somewhere had a motive to deliberately sabotage and bankrupt our economy and our country.




  • Comment number 66.

    Look at history. Labour doesn't know how to budget -they only know one way.... SPEND SPEND SPEND. They aren't worried they know that the tories will have to sort out there almighty mess. Just in time for them to come back into power in another 8/12 years and cock it all up again.

  • Comment number 67.

    I can't help thinking that these calls for cuts - taken for granted in this HYS - are a trifle suspicious. Just look at what is being proposed. Cuts in public spanding which will affect those who are most in need. The cuts will be targetted at the unemployed, the elderly, health provision and education. There will be no cuts in bankers bonuses, the massive salaries to council executives, university vice chancellors and so on. There will be plenty of money for foreign aid to 3rd world dictators and for military spending - although cuts will be imposed on troops on the ground, but not on the salaries of generals, admirals and the civil servants in the higher posts in defence.

    The rich, the bureaucrats and the politicians they have selected (we don't elect our politicians, they are selected) are all singing the same song and the gullible public are being induced by the media (shame on you BBC) to a cutting competition. The elite, the bankers and their friends, will not be satisfied until the elderly, the sick and vulnerable, are tearing our hospitals and schools down with their bare hands. And even then HYS commentators will be calling for more cuts to balance our budget.

    Break the habit folks. Demand investment in our manufacturing sectors, demand more educational facilities, demand more care for the sick and vulnerable, for this is the way to prosperity. Don't listen to the economists and so called experts who are calling for cuts; for they have something to gain.

  • Comment number 68.


    The Government indeed does have a problem of basic understanding here - The systematic destruction of our Backbone Industrial Manufacturing Industry continues unabated through-Closure / Sell-offs / Take overs etc., along with all supportive industries eg Gas / Water / Fishing / Mining / Farming etc., so it is not rocket science to understand we ARE SHORT OF MONEY !!

    OUR INCOME COMES NOWHERE NEAR TO BALANCING OUR COSTS - HENCE DEBT !!!

    WE ARE STAING INTO THE ABYSS OF BANKRUPTCY AS A NATION !!!!!

    Actions needed NOW -

    Leave the shackles of the EU !
    Stop the uncontrolled input of immigration !
    Stop the ridiculous costs of WARS !
    Stop NOW The continuing expense and pay-offs scandal !
    GET RID of all hangers-on and scroungers !
    ETC.

    We are staring into the abyss of Bankruptcy through uncontrolled - unmanaged and unrequired borrowing beyond our means !

    GET REAL - GET INTO THE REAL WORLD - BORROWING WITHOUT INCOME + DEBT !!

  • Comment number 69.

    #44 "the 2 "illegal" wars are costing billions EVERYDAY. until there is talk of totally pulling out - the tax payer will forever be paying more and more."

    Ignoring the fact that there's about ten British troops still in Iraq the Afghan war is costing about £1.5bn a year, not a day and much of that would have to be paid for anyway as our soldiers get paid & fed whether they're at home or at war. Our benefit bill on the other hand costs £180bn a year. 'Scrapping Trident' as you helpfully demand would mean putting 40,000 sailors, dockyard employees, Rolls Royce staff etc on the dole and adding to that. There aren't many vacancies at my job centre for nuclear submarine maintenance people.

  • Comment number 70.

    We stop paying aid out to other countries, we stop paying into the EU funds just to get it back and we get our MP's to pay back what they owe, we reduce our Nuclear Deterrant program by half (£16Bn anyone??) that will result in us cutting a LARGE amount of money staying in "the pot" to reduce this bag of **** and bring our "debt" down to a more manageable level. If we have not got the money why are we paying out???

  • Comment number 71.

    I am sure that Prudence does really want to make drastic cuts now to reduce UK debt, why won't he? Because he doesn't want to further upset the electorate before May. He would rather continue to bury his head in the sand and let someone else clear up his mess. Only consolation is that his days are numbered and hopefully Uk will not go the way of Greece

  • Comment number 72.

    We all know now that Brown's so-called economic "success" was built on an actively encouraged mountain of unsustainable personal debt - which is also (no coincidence) what caused the crisis which nearly brought down the whole banking system.

    What was Labour's solution? Massive commitment of newly-created money, supported by Government borrowing - a burden which will hang over British taxpayers for years if not decades to come.

    And what are they doing now? New promises to spend 10's of billions of £ more on 'super-fast' broadband, high speed rail lines to benefit a few etc., which we can well do without.

    The elephant in the Election campaign room is that the country can't afford any of this - It is just a pity it takes an outside body like the EU to point this out.

    Now that we have proved 'Debtism' doesn't work, the first party to come out and say this openly, and start to put the burden back onto those who caused the problem (mainly reckless banks and those who have over-borrowed) wins my vote.

  • Comment number 73.

    I am sick and tired of our country receiving instructions from the European Commissionon about what is should or should not do.
    Great Britain got along quite nicely thank you before we were foolish enough to throw our lot in with them.
    The citizens of this country must open their eyes and see the size of this problem - G. Brown has engineered a situation way out of his control and seems bent on making matters worse.
    Roll on the election when we might, only might, be able to remedy the biggest travesty in our economic history. It is time to leave Europe for good - let the public decide if the politicians can't. They love to strut their stuff on the larger stage so aren't best placed to see what the insiduous EU are working towards.

  • Comment number 74.

    Right on Jonathan. Totally agree with all you have written. We are truly stuffed and it always, always, always ends in tears when Labour are in office - but this time it is catastrophic. How has this been allowed to happen? Answer: a government full of liars, self-seekers, profligate wasters and incompetent idiots.
    They were handed a terrific economy by Ken Clarke after painful Tory measures and the ruined it in one decade. Speaking of Clarke, Cameron should have the wit and the courage to appoint Clarke as shadow Chancellor.Osborne is too light weight. Does not show good judgement from DC at all.

  • Comment number 75.

    Not until the election is out of the way will we really see what the government(any government)are planning to do about the deficit. Labour dare not reveal the true cost of Browns reckless tax and spend policies between 2001 and 2008 so claim it's not the right time to cut spending and raise taxes. Anyone with any sense of course knows that the "right time" will be one week after the election. Cowards.

  • Comment number 76.

    "Are government plans to cut the UK deficit ambitious enough?" - To cut, or not to cut - that is the question...
    We should cut spending wherever possible, and where it does not directly affect our economy - such as multitudinous 'pet' Government propaganda projects, Foreign-aid, immigration, minorities & PC quango's - 'ad nauseum'.
    Of course, Labour are trying desperately to convince us that they will 'get us through this recession' without much pain. In truth, we are being given our periodic 'sugar-lump' so that we'll be comforted into believing that it will be the same after this recession - it won't! it's pure, typical Labour 'spin' prior to the Election.
    The Financial world - who are giving us financial credit in order to keep us going - is waiting for the UK to prove to them, that we are acting responsibly in dealing with this recession. If we don't get rid of non-financial, non-productive, wasteful costs, they will stop this credit. Then we will really feel the pain.
    We have to 'toe the line' - not follow a self-serving 'party' line.

  • Comment number 77.

    IF Gordon the CLOWN hadn't been borrowing so much to fund spending when times we good we would NOT be in such bad shape now. They blame "global" issues BUT the UK Goverment is responsible for too much borrowing and spending, as were the Banks and masses of the population.

    Cuts have to be made, taxes will rise - however the most important thing we need NOW is the belief that things can get better.

    New Labour are in complete denial, as are the Liberals. Proping up the economy with spending can not continue. UK plc is borrowing £1 for every £4 it spends which is sheer lunacy. Next year our interest payment will start to rival our ENTIRE spend on the Military. We need to get real.

    Cuts now, across the board - no I'm not talking about Police, Nurses or Teachers - I'm refering to the COUNTLESS numbers of Public servants employed (now over 700,000) over the last 13 years. Give me the authority and I'll cut them tomorrow.

    Painful yes -
    Necessary - ABSOLUTELY
    When - As soon as possible

    The working Public will only start spending again when they know where the pain is going to be.

  • Comment number 78.

    45. At 11:08am on 16 Mar 2010, Peter Bridgemont wrote:

    "Anything from Europe people use the word 'dictated'. It was being dictated to by America eg. removing the controls on the banks, that led to the crunch. Our press belongs to the über-rich who of course prefer USA's all- for-big-money, hard line capitalism, to Europe's more mixed, more liberal- and much more successful- approach."

    *****

    So tell me Peter, Why are we being *forced* to pay the EU/Brussels billions of pounds every year when our own country needs the income right now?

    Perhaps its time we told them to find another alternative source of funding?






  • Comment number 79.

    So, the EU have a go at the current government 2 months before an election, I call that political interference.
    We need to get out of the EU, go back to just trading with them.
    As to the deficit, until we see proposals from all parties we cannot judge who is best.
    Personally I won't vote tory, not after what thatcher did to wreck the country.
    But the EU telling us what to do is just not on, they can get on their bike and we'll sort it ourselves.

  • Comment number 80.

    Whilst we live under such a greedy capitalist regime the country, and most people in it, will be constantly in debt. If only people showed a bit nore restraint and stopped "spending" money they do not have things might improve.

  • Comment number 81.

    Without a doubt - it is time for the Revolution!

    Viva La Revolution!

  • Comment number 82.

    I agree that the government's plans are not adequate. The government is only planning to halve the deficit, when the long-term plan for any government should be complete elimination of its debt. Beyond this, the UK government's long-term aim should be to build up a sovereign wealth fund. Yes, it is sometimes necessary to spend more in a recession to avoid prolonging it, but the government was running a deficit in many of the boom years as well and on balance, governments should be spending less than they receive.

  • Comment number 83.

    Probably not, but not much else they can do whilst they are determined to ring fence the largest areas of public spending (Education, Health and Defense). These areas like everywhere else will have to be cut back. Whilst both Labour & Conservative ring fence spending in these areas neither parties economic policies can be taken seriously, whether you think the cutting should start sooner or later.

  • Comment number 84.

    How on earth can we know what the plans to cut the deficit are like? We won't find out the real plans until after the election. Anything we are told this side of the election is just propaganda, not a real plan.

  • Comment number 85.

    When you spend too much and get yourself into debt, you reduce spending to pay back the debt, or you go on a spree and eventually declare bankruptcy. This must be the Clown's plan for the UK. The Clown suffers from delusions that he is always right and that he deserves to be Prime Minister. He is a dreamer driven by stalinism, which history tells us failed. He sees himslf as the father of the nation and his subjects as his children. He believes that he is saving the world. Surely no-one will support this moron in May.

  • Comment number 86.

    The government and its supporters are living in a fool's paradise. It is not a case of when to start reducing the deficit, but when just to stop the deficit growing. The deficit for this financial year alone is to be about 178 billion (12 per cent of GDP) but the total deficit is about 800 billion. The government is not planning to reduce the annual deficit to 3 per cent of GDP until 2015, by which time the total deficit will be near total annual GDP. We have just had a large deficit in January for the first time since records began. It is time for people to realise that our economy is simply not big enough to sustain current spending plans - you can call it a double dip, but it would be more accurate to call it the economy returning to its true size. There is no economic cycle here, just overspending. If we make no effort to live within our means now the pain later will be very severe indeed.

  • Comment number 87.

    I think comment no 1 is not actually correct. As I understand it if we were a full Monetary Union member and had the Euro as our currency then the EU may well be able to take measures against us to reduce our debt but as we are not then they can tell or ask us but the power they have to make us do so is much less than full Monetary Union members.

    We do however need to reduce debt on a planned and gradual scale and ideally we need to encourage growth in the economy and fund it from that. Tax rises may have the opposite effect however so need to be targeted well.

  • Comment number 88.


    Many of the comments on here are completely divorced from reality and amount to the usual fantasy politics or the useless utopianism that pretends that nothing ever costs any money.

    No matter which political party is voted into government, there will be massive cuts in all public spending AND massive increases in taxation and there is nothing that anyone can do about it. Any politicians who try and pretend otherwise should routinely be dismissed as liars.

  • Comment number 89.

    Yes I agree. Public sector workers get paid more than those in private sector, fact. Let's ditch the myth they are badly paid. And ON TOP they get massive pensions and severance pay. We can save billions from overpaid council and hospital executives without affecting front line services.

  • Comment number 90.

    This government is unable to produce a workable plan because it would be contrary to its policies and they are not bright enough anyway.

    Our only salvation is a hung parliament after the next election, where Vincent Cable is put in charge of the economy and Nigel Farage tasked with getting us out of the EU within 6 months, so preventing millions falling through a massive hole into Brussels every minute of the day.

  • Comment number 91.

    Labour's proposals are nowhere near as stingent as they should be, and there is a reason for this.

    Brown and co are not, as many think, living in some kind of denial. They are, as typical politicians, set to produce a cosy little budget that will give a false sense of security to their many supporters, especially the long-term benefit scroungers who have never put one penny into the state coffers in their lives.

    If they regain power then, and only then, will Darling introduce an emergency budget that will tax heavily and cripple anyone who works hard, or saves. The taxes obtained will help enlarge the civil service, a necessary function to cope with our ever-growing numbers of immigrants and asylum-seekers.

    None of the money obtained will be used to reduce the national debt - a debt that did not exist when Labour came to power.

  • Comment number 92.

    If you are yet to be convinced of the financial trouble this government has landed us in you might want to visit debtbombshell.com. The basic facts are that we now owe more than 900 billion pounds and this is growing beyond any reasonable control. If we don't arrest this wild borrowing NOW we will be bankrupt within 18 months.

    Happy now Gordon?

  • Comment number 93.

    When you are deep in the red only a complete fool goes on building up debs. Gordon Brown is always very generous with OTHER PEOPLE'S money (just look at all his PFIs) but this has to stop.

    One economy he could make immediately would be the disbanding of the Equality and Human Rights
    Commission. They've all had enough taxpayers money to be able to retire in great comfort.

  • Comment number 94.

    None of these confident "experts" foresaw the crash. But historians will recount the lesson of the 1930's: cut too much too fast and you depress demand and hurt the economy on which the finance ultimately depends. Of course we've got to pay it off and yes it will hurt badly, nothing exempt. But we mustn't expect to know how badly, not from either main party leader, till after polling day; the inevitable price of parliamentary democracy.

  • Comment number 95.

    David (#53) The problem is that inflation doesn't work as a solution. You won't be able to continue to attract investment, and interest rates will be forced to rise to stop a massive exodus of wealth. It is merely a matter of how much damage you can do to the economy (and the pockets of its citizens) before reality hits home.

  • Comment number 96.

    National economy does not need high taxes. The budget must be cut. The pork barrels fill with public welfare and bogus transportation projects. Government deficits disappear with proper appropriations.

  • Comment number 97.

    I am Labour. I think that there we have to speak not about cuts but more about looking for other ways how to organize economic. Simple cutting will really harm a lot of people and the country itself. But leaving everything as it is will do the same.

    So I think that economic must be reorganized in union with cutting expenses. But reorganization must go first. Otherwise every try will turn out as fail.

    First of all in every economic we have to speak about manufacturing. Without this there will be no independant and developed economic. If you would take a look on streets you will see that most of cars are from other countries. So is with other products as well. And to regulate this there is only one tool - monetary policy. The best way is to ensure that prises in the UK in GBP stay stable and together with this is working free market law - currency (as well as any product) prises are dependant on demand and offer levels. It is possible to do that. And market will arrange verythig by himself. And it will help and develop increase in employment. If that will be achieved there is other treat that every country must avoid - dont let in to much workers from other countries. It always leaves demage to any economy because it demages free market rule, the same as priviously said - on demand and offer correlation are dependant salarys level.

    Other thing to do is to ensure that every working man gets enough money for their family. It means what Labours are doing all the time - to rise the minimal pay rates and to esatablish more hard progressive taxes. And it is good for enterprises as well because they get their profit from society. And if their income is low than enterprise will not be able to sel their products and services, so there will not be the profit for taxes. So the cutting expensis and rising taxis to low-payed people without ensuring good monetary policy and progressive taxes will lead the UK to serious problems in the future.

    So be afraid to cut common workers income.

    About cutting government expenses. I dont know much about government expenses but I do know about some Benefits. There are at least 3 different benefits that are ruled by HMRC and treated separately. It means you have to fill in one and the same info for three reasons to send it to one office. And in that office there are lot of people dealing with one info three times... You call to one and to another and all the time tell them the same info. What a terrible wasting of money. Employment that does not create any additional value must be forbiden. No one can afford this, even the UK.

  • Comment number 98.

    We do need to cut our spending, that much is clear, although quite why the pain should fall on the taxpayers who have already taken on so much additional burden in the past 13 years is another matter. There are areas of central and local govt that can and should be trimmed without affecting basic (emphasis on basic!) services. The NHS must stop trying to be all things to all people, and health tourism must end now!Similarly, ending our ill-judged military involvements in Afghanistan and Iraq would instantly save a fortune. Stopping overseas aid to countries that do not need it is another option. Curbing immigration and rolling back the benefits culture are also essential. The only person with the nous, vision and guts to do all this is Frank Field, but as soon as Blair realised that he meant business, he was removed from Government, so the best person for the job will, sadly, never be given the chance.

  • Comment number 99.

    "Are government plans to cut the UK deficit ambitious enough?"

    It matters not a jot what the European Commission says or what this or the next government says or even what we say here.

    Global debt markets are the final judges and if they don’t like the UK economic direction we will soon know as they drop our credit rating and require increased interest rates for UK debt.

    Politicians like Bryne simply saying “They are wrong.” is about as useful as Mr. Canute’s ill famed beach party.

  • Comment number 100.

    Let's face it - Labour had so much income at its disposal through the last decade and they squandered it and mis-managed it.

    Nothing Labour can say or do is ever going to save them from electoral defeat - and thank god for that.
    Any part other than Labour - is my motto.

 

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