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35 business leaders back Osborne's cuts

Robert Peston | 21:57 UK time, Sunday, 17 October 2010

We have heard the reasons why the chancellor should reduce or delay his planned cuts in public spending - whose details will be announced on Wednesday - from the generals, senior police, university teachers, and the trade unions, among many others.

But apart from Tory and Lib Dem MPs and some economists, there haven't been many others urging George Osborne to stick to his budget pledge to reduce public expenditure by an unprecedented £83bn over the coming four years.

Until now.

In a letter in tomorrow's Daily Telegraph, 35 business leaders say they "would encourage George Osborne and the Government to press ahead with his plans to reduce the deficit". They add that it would be a "mistake" to water down or delay the deficit reduction plan.

For what it's worth, I think their wish will be granted, come the announcement of the Comprehensive Spending Review on Wednesday.

I don't see any sign of the chancellor or the Treasury changing the round numbers for spending reductions that were published in the budget Red Book on 22 June (although achieving the first year cuts will not be easy, given that there is an element of "spend to save" in much of what the government wants to do).

Even so, some will see it as striking and significant that the letter seems to re-cast British politics back in the mould that appeared to have been smashed by New Labour in 1997, that of a conflict between what used to be called capital and labour - in that many business leaders back the public spending cuts, and most trade unions oppose them.

In the letter, the bosses of companies including BT, Kingfisher, Asda, Carphone Warehouse, Microscoft UK, Whitbread, Alliance Boots, Diageo, Next, Hammerson and MITIE claim that "addressing the debt problem in a decisive way will improve business and consumer confidence".

They insist that "the private sector should be more than capable of generating additional jobs to replace those lost in the public sector".

And they argue that if the cuts are delayed, there would eventually be deeper cuts or greater tax rises, to meet the increased interest costs on national debt that would be £92bn higher - according to the Office for Budget Responsibility - under the plans of the previous Labour government.

Some of the signatories - such as Lord Wolfson, chief executive of Next, Paul Walsh of Diageo and Ian Cheshire of Kingfisher - are widely viewed as Tory supporters, who also signed a letter before the election calling on any new government to make the public sector more efficient.

But the intervention of others - such as the chief executive of BT, Ian Livingston, the founder and chairman of Carphone Warehouse, Charles Dunstone, the chairman of ASDA, Andy Bond, and the managing director of Microsoft UK, Gordon Frazer - will be seen as more surprising names.

Mr Dunstone, for instance, was a high profile business backer of Tony Blair's New Labour government.

The 34 businessmen and one businesswoman (Ruby McGregor-Smith, chief executive of the outsourcing conglomerate, MITIE) all say that the letter represents their personal views.

However the letter only carries weight because of the positions they occupy in the private sector. So there will be some who question whether this intervention in a highly charged political battle is appropriate for those running companies owned by pension funds and other institutions which look after the savings of millions of people with diverse affiliations and views.

The 35 also make one statement that will amuse many economists. They say "everyone knows that when you have a debt problem, delaying the necessary action will make it worse not better".

That may be true of individuals and even for most businesses. But there is a whole school of economists, largely those who call themselves Keynesian in some way, who would describe that statement as laughable.

They would argue that it was the application of prudent principles of personal finance to the level of the state that was to a large extent responsible for the severity of the Great Depression of the 1930s.

Comments

Page 1 of 3

  • Comment number 1.

    Perhaps looked at in a different perspective what these leaders are saying is that the public sector has become too big. I suspect that most people, including those of Keynesian persuasion, will probably agree.

  • Comment number 2.

    You know I can't help thinking these 'letters' are all stage managed from Tory HQ.

    Business leaders? Try asking the ones who provide services to Central and Local Government, they might not be so keen.

  • Comment number 3.


    "The 35 also make one statement that will amuse many economists"

    Are these the same economists that oversaw the virtual bankrupting of this country over the last 10 years, cheering on the Chancellor and then Prime Minister Brown as he destroyed our economy?

    You question "whether this intervention in a highly charged political battle is appropriate for those running companies owned by pension funds and other institutions which look after the savings of millions of people with diverse affiliations and views."

    I question your biased opinion is appropriate coming from the BBC.

    What exactly qualifies you to question the motivation of some of the countries top business leaders? (I don't think it is your 'O' level English Lit...)

  • Comment number 4.

    My family stand to be losers in all of this - We won't know till long after Black Wednesday. If it is bad news please remind me to spend as possible with BT, Kingfisher, Asda, Carphone Warehouse, Microsoft UK, Whitbread, Alliance Boots, Diageo, Next.

    Actually if it is good news for us - relatively speaking - I'll still endeavour to spend as little as possible with these businesses.

    Thanks

  • Comment number 5.

    Same old same old.

    These guys are like boring old farts that can't think of anything else to complain about. At least Victor Meldrew was creative and noticed the world around him.

    Each business leader can say what they want. Their views are no more important than the cleaner who hoovers out their boardrooms. In this country, it is still a democracy with each of us having a single vote.

    When their cleaner writes a letter complaining about the cuts we suspect the cleaner is worried about the loss of the local library, healthcare services, cuts to education, the chance of their kid making it to University and getting a job as a scientist. I happen to agree with the cleaner's concern. It's about the kind of country I want to live in.

    When the business leaders complain, it's because what? Well, they don't need the library, they can send their kids to Eton (and would probably have a fit if any their kids decided to take up a career in university research)! The world these people live in is like that of the majority is it? They can buy books so they seen no point in having a public library.

    Read Toynbee and Walker's Unjust Rewards: Exposing Greed and Inequality in Britain Today and you will see this crowd of crowd of business leaders are so far out of touch with reality, I wonder why anyone would expect these guys to have anything sensible to say about life in the UK let alone planet earth.

    I suspect that what they want is poorly thought out. Unless of course, they don’t want to have to pay for the mess they made and like the crumbs on the boardroom carpet, they expect the cleaner to do it for them on the cheap. And no doubt they'll be looking to pick up contracts where the local authority is no more than a contract provider rather than a service provider....

    And when you look at the global economic mess these idiotic free-market deregulated economy lovers enjoy, well perhaps rather than listening to them, we should send them off to visit the psychiatrist for a couple of years in a secure institution.

    On another note, what will Stiglitz advise the Scottish Parliament Robert?

  • Comment number 6.

    Mr Dunstone, for instance, was a high profile business backer of Tony Blair's New Labour government.

    Neoliberal business man, then. Well so is Cheney and look at his sense of how to create an economy!

    Neoliberalism is what created the mess.

    If I give you a poison, and it makes you really ill, who would be mad enough to prescribe more of the same poison to sort you out? And how mad would you need to be to take it?

    I reckon we should just turn around and tell the banks and anyone else daft enough to listen to them and not think 'There is your mess back. Sort it out yourself. We're busy living our lives and can't be bothered with your silliness, not toddle off. Your mess, your gambles, you lost. Go away, fool. On you go. Off!'



  • Comment number 7.

    How many of these companies have debts? and what proportion of their income are these debts?

    How many of these company bosses have demanded public funding for various projects? or tax relief?

    How many actually pay the proper rate of corporation and other taxes? You know the taxes if they paid properly and didn't try to avoid and evade would actually reduce the deficit. ROBERT - how about you doing a piece on this?

    How many will only build a store or office block only if the (boo hiss) state pays for road and other improvements?

    How many of these conpany bosses are non executive directors of other companies or even banks and so reward each other?

    How many pay their workers a proper wage? one that means their workers dont have to claim various top up benefits - the same benefits these bosses say are unaffordable?

    Somehow I can't see people loosing their jobs as somehow boosting consumer confidence. If I loose my job I won't have the ££ to spend on goods in their various stores.

    Can we have a list of the salaries and bonuses these bosses receive? and the tax they have paid so we can see they are paying their proper share?

    After all we are all in this together or are some people more in this than others?

  • Comment number 8.

    1. At 10:39pm on 17 Oct 2010, ARHReading wrote:

    100 apples. 7 of them are mine. Send 90 to China/India. Do I have too many and you have to few?

    OK.

    Let's have 100 apples. 7 of them are mine. Send 10 to China/India. That leaves 83 for you.

    It's all relative. Government looks big, only because the private sector diminished.

  • Comment number 9.

    They insist that "the private sector should be more than capable of generating additional jobs to replace those lost in the public sector".

    So why are they not doing it already? Why do they have to wait until the public sector has been reduced?

  • Comment number 10.

    Perhaps MITIE would care to return the 40% of their Business that was outsourced from the Public Sector back to the Taxpayer? They could do this by volunteering to perform the contracts for free.

    Perhaps BT would like to cancel the Government Support for their Pension Black Hole and fill it from profits instead.

    Perhaps ASDA would care to stop using free labour from the DWP. Their excellent scheme of giving "welfare to work places" that are paid for by the taxpayer might only save a few pounds. But every little helps.

    Maybe Kingfisher would like to publicise their plans to reduce their (at 31 July 2010) £250m debt against £19m Cash.

    Its that kind of irresponsible assumption that the public sector was there to bail out the shareholder that led to the situation we are in. Are they seriously expecting to be taken at face value?

  • Comment number 11.

    Hey, Rob, your pain just leaps from the screen!!!!

    How about this? You promise to earn less than the Prime Minister and I'll tell these nasty men to go away!!!

  • Comment number 12.

    These business leaders? are they special, do they have their own agenda?
    are they supporters of the Conservative party? Well lets look at the questions.
    Are they special no they are individuals "who contribute to the running of a particular business" In fact they are the servants of the shareholders!
    Have the shareholders authorised these "nmanager" to make a political statement?
    Now lets see what they promise! "The private sector should be more than capable of generating additional jobs to replace those lost in the public sector." I wonder how they are going to manage to even achieve a small percentage of new jobs to cover the thousands of jobs that will be lost by cuts in services. Lets look at the evidence. Kingfisher, of course they had nothing to do with the demise of Woolworths!! Microsoft UK, why are wee at all interested in company which is 100% owned by an American corporation, and set up to absolutely minimise the amount of tax paid in the UK on maximum remits back to the US.
    Whitbread the brewers, not the same company that has consistently avoided VAT by any chance? Diego used to be United Distilleries enough said then. Next but of course, cheap imports, good example of a British job exporter as most of their product is produced at wages below our national minimum wage. Another good example of market capitalism at it worst.

  • Comment number 13.

    I cannot help thinking that the "captains of industry" are not politicians and should not use their office to promote politics.

    If they were all so good we may not be in this predicament.

    It is about time this government realised that they got voted in, the countries problems are theirs now, not their predessesors.

    If they put as much energy into providing good quality solutions as they do into this blame culture they have we would be positevly rich.

    And a message to Mr cameron Et al cutting back is easy, it will shrink the country and start a downward spiral that will accelerate our descendancy towards a third world country. What this country needs is a level of sophistication that is lost on the thugs that govern the country.

    If I had to choose a legacy, it wouldnt be the one that this government will be remebered for.

  • Comment number 14.

    RP this blog - "But there is a whole school of economists, largely those who call themselves Keynesian in some way, who would describe that statement as laughable."
    VS
    SF (5/3/2010, quoting Broadbent and Daly) - "There is a significant body of cross-country evidence suggesting that during the transition, the economy fares better in corrections driven by reductions in current spending - better, even, than when no correction is made - than in those driven by cuts in investment or higher taxes."
    Theory VS Empirical?

  • Comment number 15.

    Beware the Business-Banking complex.
    I have no doubt that cuts in public services would be the prime Conservative Party aim irrespective of deficit, bank bail-outs or Parliamentary majority.
    They conveniently forget to tell us that the private sector would also have to "borrow money" (look up Fractional Reserve Banking) to buy and run services, which would be more expensive than government borrowing plus they would have to make a profit.

  • Comment number 16.

    35! wow thats a lot. Of course non of these business leaders is likely to see the profits of their companies suffer directly, due to the downturn in business. Although they may see some fall off due to secondary effects.

    The problem is the current government has a distinct lack of sophistacation, it is the same old tory politics if cut backs.

    I would be the first to agree that the current financial situation faced by the country must be resolved. Cut backs do not generate wealth, it reduces wealth. Cut backs do not get to the root of the problem, they just change the focus away from the problems.

    This government must stop the blame game (you are now the government so you are now responsible, not your predessesors)and please remember the collapse of the international banking system, the lack of commerce and industry, the lack of natural resource is a problem that started with the last conservative government and continued with the last government.

    So come on David et al please lets see some original thinking, some wealth creation that is shared around the population of the country and some solutions that will help the country to provide for its future, not one that see's each successive generation become poorer than the previous one.

  • Comment number 17.

    Diageo confident of the private sector creating jobs? Eh, tell that to those in Kilmarnock and Glasgow...

    [Unsuitable/Broken URL removed by Moderator]

  • Comment number 18.

    Regardless of which school of economics you subscribe to - it's hard to deny that those countries who have done a good job of reducing debt in recent years (Canada, for example) seem to be weathering the global financial crisis better.

  • Comment number 19.

    The massive debt problem facing this country is the relentlessly increasing level of debt over 20-25 years being carried by financial companies.

    The signatories to this letter know that they need a distribution in real terms from wages to profits. That will happen more quickly in the economic conditions which the policy they advocate.

    One of these signatories are my employer. I may drop him an email.

  • Comment number 20.

    Excellent point by Robert at the end of his article. It shouldn't an excellent point - it shouldn't have to be said.

  • Comment number 21.

    18. At 11:55pm on 17 Oct 2010, The-itinerant-ex-pat wrote:

    Canada is fine?

    Not according to David MacDonald at the CCPA who points out the fragile jobs recovery means over 200 000 full time jobs have been lost and not replaced in his 'Why it’s time to press the ‘pause’ button on austerity' article.

    ------------


    Prof. Greg Philo in the Guardian proposed a 20% wealth tax on the richest 10% who have a value of £4 000 000 per household to pay the banker bill. Obviously it would be graduated, so those who had only 4 000 000 would pay less than their richer cousins (can't have the tinyier millionaires suffering too much!).

    These letter writers strangely, seem to thin that isn't worth supporting. I think it is far better idea than any of these people have ever had in their lives.

    I'd put in the link but the moderators are being fussy tonight.

  • Comment number 22.

    To those of you familiar with my analysis please note this.

    The business model of these retailers is dependent on leveraging high commercial property prices created by planning law.
    The business model of this out-sourcer is dependent on the employment agency and employment business act and regulations.

    These "leaders" run business' whose models are dependent on the 2 specific pieces of legislation I have repeatedly identified on BBC and other sites as creating costs and barriers to manufacturing and the internet freelance business model.

    So I repeat again. Financial services de-regulation and setting aside a part of london as free from planning law made canary wharf a world power in financial services. We need to do the same for the whole country, every business and individual.

  • Comment number 23.

    Not many manufacturing giants in that list. What worries me most about the attitude towards these cuts is the number of times I hear phrases like, 'Well, it's got to happen' or 'its inevitable' and so on as if there are no alternative ways of achieving equilibrium without causing untold misery to millions. Of course the real joy to the Tories is that they can use this situation as a way of dismantling public services to a level Thatcher could only dream of and we have been convinced that we have to take the medicine. Nothing will be safe; not even the National Health. I suppose that's one way to bring down the pressure on pensions - kill us off early. As for the claim that the private sector will take up the slack, who, pray, will be buying these wonderful goods and services? The three to four million unemployed? That old double dip looms large.

  • Comment number 24.

    @21 I didn't say Canada was fine. Just better at managing the effects of the financial crisis which, IMHO, can be attributed to better management of the National purse & bank balance! . ... Recessions call for tough decisions and Canada still has some tough times ahead, but not as tough as the UK.

    From the article to which you refer.-

    "Canada has, by far, the lowest debt load of the G7 countries.

    Our debt load is so low that Canada could run up another $475 billion dollars in debt and still beat Germany (which has the second lowest debt-to-GDP ratio at 62%).

    To boot, KPMG already ranks Canada second only to Mexico as the most tax-competitive country to do business and our corporate taxes are still declining. "


    (I keep reminding myself that this recession was not caused by a downturn in consumption. Reduced consumption was a result of the sub-prime/Lehman etc, etc, shenanigans - but that's another story)

  • Comment number 25.

    #21

    I suggest you read that article again and check the mathematics involved in terms of the population. It's a pie-in-the-sky nonsense that suggests there is a magic bullet out there to solve all the problems. There isn't.

  • Comment number 26.

    Would these 35 business leaders vote for the cuts if they were living on minimum wage i think the answer would speak for itself.

  • Comment number 27.

    24. At 02:09am on 18 Oct 2010, The-itinerant-ex-pat

    200 000 full time jobs lost isn't fine by any measure, particularly if you are one of those 200 000 people.

    "To boot, KPMG already ranks Canada second only to Mexico as the most tax-competitive country to do business and our corporate taxes are still declining."

    What's that got to do with anything? Other than businesses successfully lobbying to obtain their very own generous welfare system so they can sponge off the public purse.

    How many Mexicans are going across the border? What are they doing when they get there, looking for a game of golf and some designer handbags? They are escaping poverty and misery. Hardly three cheers for the Mexican government. Tax competition! Good grief! With low taxes the roads fall apart, education, healthcare and all the services people use fall apart. You know, street lights, traffic lights, police, sewars, libraries, rubbish collection, public health, etc all have to be paid for. A race to the bottom might be good for the boardroom in the short-term, but it certainly is not for you or your kids, unless of course you are one of the richest 10% of the UK and can afford your own personal street lights etc. Think about it.

    I don't want businesses sponging off the public purse - it really is time to stamp out all forms of corporate welfare. If businesses don't want to pay their fair share then they need to be booted out of the country.

    KPMG values/activities leave a lot to be desired in many an eye, so what they have to say is rated extremely low on my credibility spectrum.
    http://taxjustice.blogspot.com/2010/06/invisible-elephant-kpmg-tops-corporate.html, http://taxprof.typepad.com/taxprof_blog/2008/12/nlj-irs-probe.html

    I keep saying this, if you don't want to pay taxes, then move to Congo DRC. The cops aren't paid too often, so if you need help you'll find you are on your own, but that won't matter will it, just so long as you pay as little as possible.

    25. At 02:28am on 18 Oct 2010, GeoffK1874 wrote:

    I made no reference to anything other than the reduced employment.

  • Comment number 28.

    If the pronouncements of channel 4 are to be believed various tories in the cabthave moved their tax liability or avoided it says a lot for us all being in it together.However would ou exn ss.

  • Comment number 29.

    Just noting 10 mins in the middle of the night for a fairly simple comment says a lot about bbc moderation probably a poor guy with masses of web pages all at once.

  • Comment number 30.

    "They would argue that it was the application of prudent principles of personal finance to the level of the state that was to a large extent responsible for the severity of the Great Depression of the 1930s."

    Sorry, but the cause was allowing the Banks to go bust in 30's. This time we have not allowed the Banks to go bust, and most people would agree that we should not have allowed Northern Rock or Lehmans to go bust, and if we had not allowed Northen Rock and Lehmans to go bust there would have been less a collapse in confidence and thus cost in bailing out the other banks.

    The UK has been spending beyond its means at a steadily increasing rate for the last 10 years. If labour had stayed in power we would have ended up being bailed out by the IMF, and having an externally imposed austerity program like Greece. The tories and lib dems have inherited a spectacular mess, and should be praised not blamed for having to clean it up.

  • Comment number 31.

    @30 Absolutely. Between 1921 and 1929 nearly six thousand banks failed in the USA. From 1930 to 1933 it was almost nine thousand.

    @24. We can trade examples and opinions forever C-D. Or simply fail to agree that having less Debt is preferable to having more Debt.

  • Comment number 32.

    31. At 05:43am on 18 Oct 2010, The-itinerant-ex-pat wrote:
    @24. We can trade examples and opinions forever C-D. Or simply fail to agree that having less Debt is preferable to having more Debt.

    Oh the debt, the debt. the horror, the horror.....

    Laughable

    If they are worried about public debt, stop issuing debt.
    If they are worried about private debt, increase Govt spending.




  • Comment number 33.

    This is typical of those who have, they always want to squeeze those who have not. Yes there are people who take advantage of the benefit system and that should be stopped but they are not always the poor. The Banks took advantage of the system as they came running to it when they got so much so wrong.

    These 35 are all in the same category as the bankers, greedy capitalists who live in comfort, they pay low wages to the many and grab high ones for the few. This is so typical of Anglo-American Capitalism. What many forget is that these organisations with their financial power can tread on anyone in their way. Individual workers and the many small businesses are the ones that will suffer.

    NEVER IN BEFORE HUMAN HISTORY HAVE SO FEW CAUSED SO MUCH HURT TO SO MANY.

  • Comment number 34.

    A colleague recently moved from a small private firm to a large private utility company, and he cannot believe the waste and inefficiency.
    If we move beyond the dull honk of tribal prejudice, we all know that large organisations, whether they be public or private, inevitably generate and suffer from significant inefficiency and waste.
    This truth should not automatically lead us to conclude that The Cuts are therefore correct, irespective of their timing or scale or extent.
    The fact that the measures taken to avoid the global financial catastrophe worked (astonishingly) as well as they did leaves us complacent to present danger – cuts should be applied with a careful measured maturity, not with the lazy dull honk of tribal prejudice. We desperately need better than that.

  • Comment number 35.

    you say
    The 35 also make one statement that will amuse many economists. They say "everyone knows that when you have a debt problem, delaying the necessary action will make it worse not better"

    I say these companies actually do not produce stuff, only sell on the whole (discuss this one if you like) .
    The medium term view is to take a bit of a hit to profits they let the good times role.

    I also say the real spin on the news has kicked off with this letter. I am glad to go to work to get away from it all

  • Comment number 36.

    Well these people are no less qualified to comment than a former postman and home secretary.

  • Comment number 37.

    "The 35 also make one statement that will amuse many economists....laughable....to a large extent responsible for the severity of the Great Depression"
    "conflict between what used to be called capital and labour"

    Your analysis is interesting but rather 1970's in its approach.

    The truth is that we dont't agree about how strobgly we should tackle the deficit, just we don't really know why the Great Depression was so deep for so long.

    However, in recent decades it is impossible to find an instance where a softly, softly approach has worked, and I think this is down to human nature as much as anything else. A government is either on 'social justice' crusade, spending as it does so, or it is on a liberal, free market, small government mission. Middle roads don't usually exist - New Labour was supposed to be Third Way, but it was spendthrift as we can now see.

    I just think laughing at the opposite point of view is, well, rather sad.

  • Comment number 38.

    A lot of these companies are in debt however I have yet to notice any of these bosses taking a cut in salary in a concerted effort to reduce these debts.
    I am looking for 35 signatories to sign a letter to state in these times of austerity nobody should earn more than the prime minister everything above that threshhold should be taxed at 100% and the money given to support the people who are adversely effected by these cuts. I wonder if these 'whizzkids' would agree and sign the letter after all they would still be well off and what a noble gesture it would be.

  • Comment number 39.

    cameron c...doc
    [Download cameron c...doc (12.5 KB)] Download(12.5 KB)

  • Comment number 40.

    This letter would carry a lot more weight in my eyes if it was clear that all 35 of these businesses are currently increasing their staffing levels. I am keen to see the whole list of 35 names and will watch over the next year to see that they are taking on additional staff. If these 35 are not making a substantial contribution to unemployment reduction then their own decisions will confirm the nonsense of Osborne's over aggressive stance. I do fear that the big public expenditure cuts will lead to dramatic reductions in spending by middle income families as expectations about the near to medium term prospects worsen (I have revised my own rough and ready spending plans for first time in a decade to add a bit more to savings). My really deep worry is that there is now only the USA providing any sort of stimulus -Osborne is hardly in a position now to tell Germans to undertake some fiscal stimulus even though they could without much risk. Even in the USA there is now strong whiff of protectionism about which, if realised as policy, will wipe out any benefit for rest of world from US stimulus.

  • Comment number 41.

    This post highlights everything that is wrong with this country I wish we could get up a campaign designed at getting those pension fund managers to reign in all the corporate excess exhibited by these selfish individuals. Cut their wages to something realistic to their merit. Then we wouldn't have so much tax evasion (see none of the major banks signed up to interpretting tax laws to the spirit of the law as opposed to the letter of the law). Instead we have this. They seem enthusiastic about hard working citizens' lifes being ripped apart. I only hope what goes around comes around.

  • Comment number 42.

    'Captains of Industry', urging Osborne not to water down cuts is fairly predictable I suppose. However, they are running companies, not countries. They are no more qualified to advise the Chancellor than any other reasonably well-educated, well paid member of the public.

    When Bond, Wolfson, Walsh et al fire a chunk of their workforce, the problem becomes that of the Treasury - dole pay. They wash their hands of the redundant staff, tick another box on their balance sheet and pop off to their respective clubs rejoicing. Osborne picks up the bill.


  • Comment number 43.

    "the private sector should be more than capable of generating additional jobs to replace those lost in the public sector".

    "Should be?" For sure. "Is?"

    How many net-jobs have these companies created since the crunch in 2008?

    How many will be created in their current plans?

    Will they write, before the next election stating how many jobs they did in fact create?

    I have more respect than some posters for business leaders, but unless they are speaking to their own businesses the above statement is nothing more than an economic prediction, drafted for them by whom?


  • Comment number 44.

    Shouldn't the headline be 'Large companies want more unemployment to keep wages low and profits high'.

    Modern Monetary Theory shows that the deficit is nothing more than the private sector saving rather than spending. Without spending there is nothing to tax.

    Big business wants to tie the hand of government so that they don't realise that if the government spends £100 then as the money bounces around the economy, taxed as it goes, they will *always* get £100 back in tax for any positive tax rate.

    Only if that transaction sequence is interrupted by saving will the government fail to get all the tax back in the same accounting period as the spending. And if people are saving they're not spending. And if they're not spending there can be no inflation risk.

    So what's the problem?

    And that's why the pointless hysteria over the deficit will be the subject of Psychology PhD's for decades to come - particularly those centring around 'psychological anchoring'.



  • Comment number 45.

    RP 'The 35 also make one statement that will amuse many economists. They say "everyone knows that when you have a debt problem, delaying the necessary action will make it worse not better".

    That may be true of individuals and even for most businesses. But there is a whole school of economists, largely those who call themselves Keynesian in some way, who would describe that statement as laughable.

    They would argue that it was the application of prudent principles of personal finance to the level of the state that was to a large extent responsible for the severity of the Great Depression of the 1930s.'
    -----------------------------------------------------------------------
    Robert, as well as the above, in your piece to mic in the 8am news, you cast doubt on the qualification of business people to comment on the running of the wider economy.

    They are probably better qualified than most, if not all, politicians.

    I was amused that, in the post-Shadow Cabinet appointment analysis, it is widely presumed that a partial study of economics (PPE) at degree level and a couple of years working on a newspaper on a middle desk or back desk makes one supremely qualified to be Chancellor of the Exchequer or their Shadow.

    And the remark about Keynsian economics and debt is laughable! How long have you been a banking/business correspondent and now Editor, Robert? You've just done an 'Evan'! And big time!

    How do you think most of the businesses finance their operations? What were you blogging about all last week? Business, Debt, Liverpool FC.

    If I was in one of the main chairs on the Back Desk at the DT looking at this piece, the blue pencil would have gone straight through it and it would have been thrown back at you with the instruction "Do it again!".

  • Comment number 46.

    It is thought that 500,000 private sector employees will lose their jobs as a knock on effect of these cuts so what cost to the treasury for the unemployed caused by this. It's a load of codswhallop this just shows how innept these business leaders are. By 2014 we should be feeling the worst effects of these cuts and I'm going to write to the Telegraph demanding these people lose their jobs. I won't forget.

  • Comment number 47.

    32. At 06:02am on 18 Oct 2010, MetalGasket wrote:
    31. At 05:43am on 18 Oct 2010, The-itinerant-ex-pat wrote:
    @24. We can trade examples and opinions forever C-D. Or simply fail to agree that having less Debt is preferable to having more Debt.

    Oh the debt, the debt. the horror, the horror.....

    Laughable

    If they are worried about public debt, stop issuing debt.
    If they are worried about private debt, increase Govt spending.

    -------------------------------------------------------------------
    Please can you say how increasing Government spending cures the problem of private debt?

  • Comment number 48.

    15. At 11:48pm on 17 Oct 2010, thomas_paine wrote:
    Beware the Business-Banking complex.
    I have no doubt that cuts in public services would be the prime Conservative Party aim irrespective of deficit, bank bail-outs or Parliamentary majority.
    They conveniently forget to tell us that the private sector would also have to "borrow money" (look up Fractional Reserve Banking) to buy and run services, which would be more expensive than government borrowing plus they would have to make a profit.

    ...........
    Yes it will end up costing us more, and amasingly no one will notice. Who noticed with big profits this year that BT agreed to a 9.3% increase in staff pay over three years. Much bigger increase than the public sector right. Then two weeks later they put up charges by 10%! No, we cant let the profits take a hit we will just pass it on to the customers. They are all hypocrits. The bottom line is that the private sector is not audited like the public sector and therefore no one knows whats going on and you end up needing expensive regulation to prevent abuse of their position (see the banks).

  • Comment number 49.

    41. At 08:13am on 18 Oct 2010, bmac1 wrote:
    This post highlights everything that is wrong with this country I wish we could get up a campaign designed at getting those pension fund managers to reign in all the corporate excess exhibited by these selfish individuals. Cut their wages to something realistic to their merit. Then we wouldn't have so much tax evasion (see none of the major banks signed up to interpretting tax laws to the spirit of the law as opposed to the letter of the law). Instead we have this. They seem enthusiastic about hard working citizens' lifes being ripped apart. I only hope what goes around comes around.

    .............
    Once the government have created another 1930s depression and the masses (read, educated 'middle' class) have revolted, they will get there come uppance. This time round it will not just be the manual workers effected.

  • Comment number 50.

    I thought this might be significant, until I saw Gerald Corbett's name on the list ...

  • Comment number 51.

    @44

    What does "modern monetary theory" say about fundamental problems like fossil fuel depletion, which has driven the last two centuries of growth? The growth needed to overcome the rate of debt increase simply isn't there.

  • Comment number 52.

    The comments made by industry need to be put into context.
    The issues of running a country is somewhat different then running a business, as the previous Conservative Government found out to the cost of our industries.
    It is not a surprise that companies like BT would be right behind the government strategy especially when the cut backs will raise opportunities for BT to step in to acquire lucrative contracts of work. Is there a conflict of interest with their comments?
    I also find it distasteful that the government employs individuals to look at reducing the deficit and government spending while creaming off money through the use of tax loop holes. The normal working people will be funding their involvement to further find ways to compensate their lack of responsibility to our country.
    Fairness is not the word I would use for the current policies.

  • Comment number 53.

    I wonder how many of them would be willing to place a significant wager - lets say, 25-50% of their personal fortune, on the ability of the private sector to generate additional jobs to offset the loss of public sector spending.

    A lot of 'growth' in the past 15 years has been sustained through cheap debt fuelling consumer spending; that tap has been shut off. Those of lucky enough to avoid redundancy so far have seen pay freezes; most of my friends and family who have been through it have found themselves having to take significant pay decreases, or move from full-time to part-time work - our own household income is down by ten grand. So I can't see growth coming from consumer spending any time soon.

    (Which is another thing simple employment figures miss).

    Equally, private sector growth has also been sustained by public sector spending, which is about to be cut back.

    So that really leaves us with export based growth. It's a possibility - consider Germany - but we also need to remember that the German economy also has a high level of structural unemployment - it's export economy is high-tech / high-value but hasn't generated high employment - not even by trickle-down.

    Personally - I'd take these 35 at their word, and turn them into a taskforce, charged with working out how to generate those jobs, particularly in the former industrial areas where we have moved the public sector offices to mask the failure of private enterprise.

  • Comment number 54.

    @ 46. At 08:43am on 18 Oct 2010, bmac1 wrote:

    > this just shows how innept these business leaders are. By 2014 we
    > should be feeling the worst effects of these cuts and I'm going to
    > write to the Telegraph demanding these people lose their jobs. I
    > won't forget.

    They may be inept at business, but the are pretty "ept" at gouging money from the firms. E.g. Gerald Corbett grabbed plenty of money before his firms (RailTrack, Woolworths) went down the pipes.

  • Comment number 55.

    The whiff of self interest is over powering.

    Each company thinks they will get something out of this for example:

    + ASDA think that planning rules will be relaxed so they can deliver "more jobs" - minimum wage "McJobs" no doubt

    + MITIE see themselves getting more outsourced deals with fat profits since Government cannot buy anything effectively

    All very typical, all very sad.

  • Comment number 56.

    30. At 04:59am on 18 Oct 2010, WorldCupMadness wrote:
    "They would argue that it was the application of prudent principles of personal finance to the level of the state that was to a large extent responsible for the severity of the Great Depression of the 1930s."

    Sorry, but the cause was allowing the Banks to go bust in 30's. This time we have not allowed the Banks to go bust, and most people would agree that we should not have allowed Northern Rock or Lehmans to go bust, and if we had not allowed Northen Rock and Lehmans to go bust there would have been less a collapse in confidence and thus cost in bailing out the other banks.

    The UK has been spending beyond its means at a steadily increasing rate for the last 10 years. If labour had stayed in power we would have ended up being bailed out by the IMF, and having an externally imposed austerity program like Greece. The tories and lib dems have inherited a spectacular mess, and should be praised not blamed for having to clean it up.
    ............
    Tory propoganda. You need to check your history, spending was a higher percentage of GDP by the tory Major government. Truth is after the credit crunch tax receipts fell off a cliff. Ireland and Greece are both going down the austerity route and is it working? No, it is putting there economies into a death spiral, where cut backs actually reduce tax receipts requiring further cuts. The Government are simply going to speed up the time is takes for the depression to arrive. The problem is the debt, both private and government based has reached a level that cannot be serviced through economic growth. The last 20 years growth has been achieved through people borrowing against property values and that has reach the end of the road. There is no alterative source of spare income to ensure economic growth. We have got to this point as a result of wages dropping in real terms and our debt based monetary system. The latter needs reformed and replaced with a debt free monetray system, its the only way. Government default is inevitable.

  • Comment number 57.

    I'm not using any of the these companies again. You can bet all these smug upstarts are torys therefore happy to toe the line regardless of cost, are they just sheep? Surely they can see a bit deeper than their back slapping pals or is it probably better for them to be in the loop with their chums than outside with the compassionate people. What a disappointment they are!!!

  • Comment number 58.

    By using the language of personal debt to describe macro economics these people are either ignorant or patronising. They should concentrate on selling soap powder and barbecues.

    Most of their companies are highly leveraged and have used debt to fuel growth. Most Tories have encouraged the British People to run up huge personal debt in an ideological battle to turn us into properly owners. I don’t remember warnings about personnel debts of over 400% of income when people were encouraged to buy council houses!

    These cuts are ideologically motivated and go way beyond deficit management. They are economically illiterate and don’t address the real underlying cause of the problem; median wages suppressed by globalisation so consumers are forced to supplement low wages with credit and benefits.

    And who has profited most from that - the purveyors of soap powder and barbecues of course!

  • Comment number 59.

    A simple question, can a Keynsian stimulus work in an open economy like that of the UK?

    With about 30% of the economy made up of international trade, much of any stimulus will "leak" and all that will be left in the UK is outstanding debt. Specific examples are the car scrappage scheme where 80% of the cars were imported and wind power schemes where the imported component is even greater. Those industries where the UK has strength, such as aerospace, are so globalised that there is nothing that the UK can do to stimulate demand.

  • Comment number 60.

    For heaven's sake; this is the Tory press doing what it always does - promoting the Tory party's policies.

    That this has been stage-managed to coincide with Wednesday's announcement is obvious; the 'business leaders' - all Tory supporters - have been drafted in to give some credibility to the most regressive measures in generations.

    The fact that, just like the architects of the plan, they won't feel any of the pain, is sickening.

  • Comment number 61.

    I really think that we should stop trying to predict the out come, and wait at least a year to see if the cuts do or don't effect the economy.
    It takes at least that time for the policies that were enforced during the last Government to finish.
    How many times have we all heard that the GDP has to be revised.

  • Comment number 62.

    @ 57. At 09:38am on 18 Oct 2010, bmac1 wrote:

    > Surely they can see a bit deeper than their back slapping pals or
    > is it probably better for them to be in the loop with their chums
    > than outside with the compassionate people. What a disappointment
    > they are!!!

    I didn't get where I am today by going outside to meet compassionate people, Reggie!

    Come on - the guys are jokers. One of them runs a cut-price supermarket, while another supplies phones. Others sell electric drills and cushions etc. and another one has a betting shop. We'd be better off listening to the flippin' rotary club!

    The least said, the better.

  • Comment number 63.

    Even if this "Gang of 35" do create more jobs you can bet they will be low paid jobs.

    Minimum wage + family = inability to live = entilement to top-up benefits. So the taxpayer will end up subsidising the payroll of this mob. Good for their profits but not much help in reducing public expenditure!

  • Comment number 64.

    If the TUC were to send a letter to the Guardian I am sure it would be considered as the 'Loony left'!!!! by the Tory press.
    A quote from the letter 'They insist that "the private sector should be more than capable of generating additional jobs to replace those lost in the public sector". I am sure that if these jobs don't arrive they will again blame the last Government.



  • Comment number 65.

    Some or most or even all of these 35 business leaders are also the same ones as controlling former or current monopolies, globalised multi-nationals who do not put the performance of Britain for the sovereign and non existent contsitutional rights of ordinary British people as being high on their own list of business priorities.

    Some of these are the 'goondog import/export billionaires' exporting British jobs and adding to Britain's balance of payment deficits by making fat profits importing trillions of pounds of damaging goods and products that Britain should be producing or adding process value to in the UK.

    Looking forward with glee to the Chancellors' future tax cuts for Britian biggest globalised companies is one thing, but sitting there with piles of cash that could be invested and diversified into the British domestic economy, is quite another ... and refraining from doing so because the ordinary Brits do not have enough spending power to make the high profit levels that are expecetd in their investment decisions ... and it is therefore backstabbing on their part because of the untested and unquestioned rights and privileges that enable their companies to abuse their market positions and the goodwill of the ordinary British taxpayer and the electorate.

    Cutting the deficit ... hardship for many ... is no skin off their noses ... they already have their vastly privileged positions as mass importers and are backed with strategic 'UK sell out' investment finance by every banker and financier in the UK.

    The goondog billionaires are good at running their companies in their globalised world but they're back stabbing ordinary Brits every day and also prefer foreign labour at every opportunity.

    The Coalition will split Britain permanently ... socially and economically ... unless they rebalance some these inequities between globalised - v- domestic issues and recognise the sovereign and constitutional rights and privileges of British stakeholders in comparison with the banks, international middle men importers, balance of payment deficit wrecking and other back stabbing.

    This is a major fairness issue ... the globalised businesses that use the UK as a leverage base for pushing cheap imported goods on us should be putting more money into our UK domestic economy or face higher taxes and import tariffs and more and more competition reviews on their UK activities.

    The govt should be directing UK strategic business and economic policy in the national interest for all Uk stakeholders and not just for the substantial benefit of the banks, big corporates and 'middle men importers' and which collectively represent, the 'triangle of strategic despair' for the beleaguered manufacturing and domestic productive sector of our UK economy.

    That's right they don't know how to run and economy ... they just know how to use untested and unquestioned privilege to make more and more money in their own self interests (with help of the political class/ the 'establishment' of course and with whom they are 'joined at the hip').

    We should say to them invest the money you've taken from us ... or see your monopolistic global supply chain empires dismantled in the interests of competition and fair trade and fair balance of UK constitutional and sovereign rights and privileges.

    SME's are the best for British jobs/British output ... let's give them some help, some tax and other breaks, investment and profits and margins. Britain can 'recover' very strongly in terms of GDP figures but still have 10 or even 15 million people 'economically inactive' during the next 5 or 10 years ... ie Britain can receover but be split without major employment projects.

    When the 'Goondog Billionaires' speak of 'recovery' ... they mean their own recovery/improvement ... not a 'general economic recovery' in Britain.

    I'm not concerned about the 'cuts' for defict reduction ... I'm very concerned about the total absence of policy in 'fair rebalancing' for British worker job creation.

    It's the banks and goondog billionaires that stifle UK British worker job creation beyond their own supply chain interests ... its our UK government that allows and indeed ecourages them to do this due to a lack of 'fair minded' strategic UK govt. business planning.

    I must say I'm very concerned about 'Wednesday' of this week ... because of the lack of fair rebalancing of British strategic business interests.

  • Comment number 66.

    My question to all how many companies/newspapers are foreign owned where they don't pây taxes to this country??????

  • Comment number 67.

    The interests of these business leaders are quite different from the interests of the overwhelming majority of people in the UK. For example, one result of the extra fear of unemployment that the cuts will cause, will be to reduce pressure to increase wages in line with inflation. This will certainly make it easier for these leaders to increase the profitability of their companies, but at the expense of their employees.

    It is obvious that, by intervening in this way, these leaders are doing the coalition a favour. Cynical people might suspect that they might be hoping for favours in return. Perhaps a knighthood, or a seat in the House or Lords, or more seriously neglecting to refer a take over, which they might be contemplating, to the Monopolies Commission, or no increases in corporation tax.

    Collaboration between big business and government is unhealthy for democracy and should always be viewed with suspicion.

  • Comment number 68.

    We are not going to get global stimulus together with an end to gold standard proxies (pegged RNB, eurozone countries, US states etc., all not respectively floating) so the AD way of Keynes isn't an option. Spending cutting is the only way to go.

  • Comment number 69.

    You are rated by others and probably yourself for your commenetary on the financial situation yet you do not have the intelligence to include the following points

    (i) these business men operate in large corporations their responsibility is to maximise the profits of their shareholders. They do not have responsibilities to our society which is why they will make people redundant, outsource overseas etc. On whose behalf have they really signed this letter?
    (ii) as wealthy individuals they and their families will be untouched by the cuts - in the voluntary sector for elderly in which I have experience, the cuts are already biting and lives already significantly damaged.
    (iii) the letter is clearly a follow-up to the national insurance letter before the election and is a Tory gimmick.

    It is difficult to see why you can't be more discerning in your commentary - unless you are biased.

  • Comment number 70.

    61 Foxyeric

    Sorry can't agree when we lose these services they will be gone for good we will then have to pay for these services which we now recieve for free so the poor will be impacted a great deal more than the rich. I think some of the poorer neighberhoods will not be nice places to live as anyone in severe finanacial constraints may not be able to pay for the services they now recieve and therefore go without and with the amount of job losses predicted that could be a lot of people doing without. These business people won't go without.

  • Comment number 71.


    "the private sector should be more than capable of generating additional jobs to replace those lost in the public sector".

    Yes - but in China probably knowing the past performance of most of this bunch of shopkeepers and property developers. Osbourne would have done better to thank this lot for their support and move on quickly. Their opinion really shouldn't count.

  • Comment number 72.

    Your penultimate, penultimate point "The 35 also make one statement that will amuse many economists. They say "everyone knows that when you have a debt problem, delaying the necessary action will make it worse not better".
    Apart from being an example of the compositional fallacy it is a good example of the new conventional wisdom which needs to be strongly challenged. Here are two good examples of the balance sheet recession argument and the folly of premature austerity.
    http://www.watsoninstitute.org/news_detail.cfm?id=1388

    http://www.youtube.com/watch?v=6k0_a1JS5hU&feature=related

  • Comment number 73.

    They insist that "the private sector should be more than capable of generating additional jobs to replace those lost in the public sector".

    But thats not what will happen is Robert? You know that the "business" will try and provide the services no longer under public purse with as few people as possible in order to make as much profit as possible - and for those services that can not be made profitable - tough

    I wonder how much a stamp will cost to get a letter tot he Outer Hebrides in 18 months time?

    Is BT better than British Telecom?
    Is British Gas owned by shareholders better than british gas owned by the tax payer?

    On and on and on

    And then the fundamental question - why is it more expensive for the same or poorer service?


  • Comment number 74.

    I am sorry to disappoint you all but there is no cut in government budgets which are due to increase from GBP 640 billion this year to GPB 659 billion in 2014-15.

    All that is happening is that the government is switching spending from so-called services to paying interest on the rapidly growing national debt.

    What should amuse those economists is why is it that the government is accounting inflation into their budgets at the same time as members of the Bank of England Monetary Policy Committee are running about the country so concerned about deflation that they want a further stimulus of quantative easing?

    The only thing that seems true to me is that white men speak with forked tongues.

    What I want to hear is how are we going to restructure our economy away from the corporate nonsenses of big government and big business and when is this policy going to start, if ever? I want to see busy industrial estates and high streets in which everyone has money to spend in their pockets just once more before I die.

  • Comment number 75.

    66. At 10:14am on 18 Oct 2010, foxyeric wrote:
    My question to all how many companies/newspapers are foreign owned where they don't pây taxes to this country??????


    - Even foregin owned companies have to pay UK corporation tax on profits that have arisen in the UK. There are some avoidance schemes to reduce this number not all which are controversial such as investing in fixed assets. Who owns a company does not matter. A company cannot have a nationality, only individuals. It's a bit like when people say they will only drive a British car. What they're really bothered about is British jobs rather than where the profit goes so buy a Honda, Toyota, Nissan etc. as they are all British built (caveat, not all models). Of course you could build one yourself if you really detest profit (the thing which means we no longer live in caves).

  • Comment number 76.

    This is really simple but not enough people understand it.

    If we cut too steep too fast we will enter a downward spiral - see Ireland and Lithuania.

    If we don't cut the deficit interest rates will ruin the country sending us into a downward spiral - see Greece et al.

    So we need to lower the deficit without cutting too much. This can be done by raising taxes on the people who got us into the mess so they can pay for the negative externalities they have created. If negative externalities are not paid by whoever caused them that is no different from receiving a government handout, and what is worse it's a handout to people who are already rich.

    Wealth disparity is ruining this country and if it isn't reduced things will never improve.

  • Comment number 77.

    The sheer ignorance of macroeconomics exhibited by "business leaders" and Government alike is almost mind-blowing. But I suppose we should not be surprised. Ever since Margaret Thatcher, the dogma has been that we should extrapolate the economics of the Grocery store to the economics of how to run the country. It's the easiest thing to explain to the voter (even if it's not true). And most of these "business leaders" are essentially jumped-up grocers. The same mantras keep coming out "save more today so we are better off tomorrow." "More pain now, less pain later."

    Absolute nonsense of course. On a national scale, if everyone saves more today, then we just get deflation and no-one is better off tomorrow. The national equivalent of "saving more today" is actually spending more - but capital expenditure rather than current expenditure. Invest in the country's infrastructure and in education and training, etc. Yet these are the very things the Government is cutting back.

    And as the Government spends less and reduces public sector borrowing what happens instead? The free-market believers presumably think the money freed up will be invested in spanking new infrastucture, factories etc in the private sector. Sigh... In reality we know it will just get pumped into yet another asset bubble.

    Is the public sector too large? Possibly. Though now doesn't seem the right time to worry about it. It's not like there is a severe labour shortage afflicting the private sector, and at least most of the public sector workers are doing more good working than being unemployed.

    Are there too many overpaid managers in the public sector. Certainly. But the same can also be said of the private sector as well. The ballooning of management hierarchies and their over-valuation in all sectors seems to be an unforseen consequence of technogical advance and information overload.

    There is a long list of things our economy desperately needs, eg
    - more spending on invesment, less on consumption
    - reduction in the gap between rich and poor
    - an end to asset bubbles (particularly housing)
    - reduction in private debt
    - control over (and reduction in size of) the banking sector

    The fanatical concentration on public sector spending as the root of all evil is at best distracting us from dealing with these more important issues, and at worst it is getting in the way.

  • Comment number 78.

    Japan has had its "Lost Decade". Now its our turn.
    The U.S. economy is broken (Brown's fault, of course). Our economy will follow theirs.

  • Comment number 79.

    These privileged people have a right to have their views known, but would less privileged people like myself and 34 of my friends get the same amount of exposure in the press? Remember this is their 'personal view' and does not represent the views of their respective companies. Remove their status from the equation and they are supposedly the same as everyone else.
    The only one of these companies, I will be purchasing from in the future will be microsoft and thats because there is hardly any other alternative, but my Costa Coffee loyalty card will be cut up and I will contact Whitbread to let them no reason why.
    The cuts have been talked about for so long by Richard Osborne, that he has successfully talked down the economy, before the majority of the cuts are even in place. I believe he is the most dangerous Chancellor we have had in the last 30 years. Every decision he makes seems to provoke public outcry, and results in a change in policy somewhere else, to counteract his original decision.

  • Comment number 80.

    75. At 10:41am on 18 Oct 2010, Lindsay_from_Hendon wrote:

    66. At 10:14am on 18 Oct 2010, foxyeric wrote:
    My question to all how many companies/newspapers are foreign owned where they don't pây taxes to this country??????

    ........................

    Who owns a company does not matter?

    .........................

    Hmmm ... where do you get that from ?... Most of Britain's large companies are substantially foreign owned by way of shareholdings, stakes, bank loans etc ... have a global and not a UK domestic outlook/complexion ... and the result is they invest in Britian only to the extent thay they can get an opportunist trading/supply chain strangle hold advantageous position on the UK ... they have no real interest in the UK in terms of e.g. subtantial job creation schemes, British people, British children etc ... most of them have piles of cash now and would rather employ any foreigner than a Brit and they say that they don't know what to do with it?

    I'll have to disagree most strongly with your statement.

  • Comment number 81.

    77. At 10:55am on 18 Oct 2010, random_thought wrote:
    The sheer ignorance of macroeconomics exhibited by "business leaders" and Government alike is almost mind-blowing. But I suppose we should not be surprised. Ever since Margaret Thatcher, the dogma has been that we should extrapolate the economics of the Grocery store to the economics of how to run the country.
    -----------------------------------------

    Apparently Margaret Thatcher's father would not allow electric light upstairs over the shop. He would read his newspaper by the light of a streetlamp near the living room window.
    That is where MT learnt her economics of the grocery store!
    (True story from my father who was a child in Grantham in the 1930s).

  • Comment number 82.

    the 35 business leaders, call me old fashioned but shouldn't it be a democracy rather than 35 people from the same sector who sho little track record of putting the british people first.

  • Comment number 83.

    70. At 10:23am on 18 Oct 2010, bmac1
    75. At 10:41am on 18 Oct 2010, Lindsay_from_Hendon

    Points taken. I think you are right excuse my ignorance being out of the country for some years I have lost touch. Although I will be returning to the UK at the end of the year, if there is one left!
    What frightens me is the country is going down the same road during the Thatcher years.
    I do not detest profits I would like to see they are used in a manner that the country as well as the company gain. The country needs to be more understanding to each others problems. Very hard to always believe what you read or hear in the Newspapers.



  • Comment number 84.

    Can Mr. Peston or anyone else for that matter please put an end to my continuing confusion by repeated claims by the Con-Dems that such cuts are necessary because Labour have all but bankrupted the UK by economic mismanagement and counter claims by Labour that had they not baled out the banks there would have been economic meltdown.

    Surely someone is able to provide a comparison of the UK budget deficit and borrowing figures BEFORE and AFTER the banking crisis so that fair-minded people unblinkered by party-political prejudices can reach their own conclusion over how we got into this mess and whether cuts are being targetted and accelerated out of necessity rather than political dogma distorting and exaggerating culpability as it's justification.

  • Comment number 85.

    76. At 10:48am on 18 Oct 2010, AdTheNad wrote:
    .....Wealth disparity is ruining this country and if it isn't reduced things will never improve....

    This could be said of 99% of countries on our planet.

  • Comment number 86.

    So, 35 business "leaders" are in favour of the public-service cuts, because they say it will increase business and create consumer confidence. They are bad liars, the letter only proves how eager they are that their respective companies will be able to cash-in on the need for service provision. This blatant abdication by central, and by default, local government, gives a green light to the Balkanisation of Britain, in terms of service provision, the wealthier areas will manage to pay for their essential services, the poorer areas will not, and subsequently will be "earmarked" for "regeneration", in other words,they will become uninhabitable by those who need services,and then become inhabited by those who can afford the private-sector rates for service provision. The poorest Britons are being marginalised and out-priced, squeezed into an untenable life-situation, with no social-cohesion left, only a disparate conglomerate of different cultural factions each with their own agenda, and each with their own priority-status. This copying of the worst of American-style governance,will cripple British people's ability to function as an economic collective and push us even further down the service-industry road, privately-financed, service-industry, not publicly-owned,council-run services, government by gangsters, is what this will mean for the poorest, unique and special social and health services will also suffer greatly from this job-theft and out-sourcing of service-provision. It is a despicable plan, and one which deserves to fail as soon as possible, its more boom for the money-men, more bust for the public-purse and for employment.

  • Comment number 87.

    85. At 11:14am on 18 Oct 2010, foxyeric wrote:

    This could be said of 99% of countries on our planet.

    I agree completely.

    We need to be working to improve 99% of the countries on our planet.

  • Comment number 88.

    It is indeed most reassuring that these 'captains of industry' believe that they can conjure up millions of extra jobs to compensate for the massive cuts that Mr Osborne and his LibDem lackeys are about to inflict upon the nation.

    However, before we get too carried away with their enlightened optimism, perhaps we should consider that their business models are themselves predicated on there being a growth in DEMAND, which, of course, depends on consumers having the MEANS - as well as the will - to spend, spend, spend.

    But what no one seems to grasp is that the demand has traditionally come from two quite specific revenue streams - both of which are now closed.

    The first was the ever more elaborate, and ultimately unsustainable, borrowing mechanisms we are all familiar with, e.g. credit cards, interest-only mortgages, equity release schemes etc., courtesy of the financial sector. This conveniently compensated for the fall in real incomes with the significant rise in lifestyles, but helped generate the mass debt crisis we are now in.

    The second was the public sector expansion. Indeed, far from the argument that government spending inhibited growth in the private sector, the opposite is true: A) With the mass investment in schools, hospitals and roads, etc. this facilitated significant private sector contracting arrangements; and B) In an economy which has done away with its industrial base and is thus reliant on the low-paid service sector, those individuals in well-paid government jobs spend their money in the private sector on clothes, plasma TVs, IPads, holidays, cars etc.

    Thereby, as and when the cuts fall in the public sector, this will directly and indirectly lead to jobs being lost in both the public and private sectors, which will lead to a reigning in of consumer spending and an inevitable contraction, NOT an expansion of the private sector. there will be more unemployment, more debt defaults and more repossessions on mortgages. Banks will face even more problems and be even less likely to lend. In fact, an increasingly downward spiral. As for Mr Osborne's cherished desire to address deficit, he will see instead have to confront rising welfare payments and a fall in tax revenue, leading to the deficit getting worse not better.

    What is clear to me is that these so-called 'captains of industry' might understand the day to day process of sales in a given market of easy money, i.e. the micro-economic picture, but they haven't the foggiest about cause and effect, i.e. macro-economics.

    Indeed, if I were the CEOs of Next, M&S, Mothercare and Boots - who, incidentally, were the major beneficiaries of the previous strategy - I would be careful what I was promising. Let's see if they put their money where their mouths clearly are. Somehow, I doubt it very much.

  • Comment number 89.

    Robert, last week you wrote about Siemens and their guarantees to German workers. That article is now closed to comment, might this be related to the ownership of the former BBC Technology, who manage this website?

  • Comment number 90.

    In the name of efficiency, both public and private.
    Sack lots of people. Re-employ them. Sack lots of people. Re-employ them.
    This costs a lot of money and creates externalities.
    How is that efficient?
    Are we going round in circles?

  • Comment number 91.

    Here we go round the mulberry bush - once again. All these quangos getting the chop were, in large part, the creation of the sainted Margeret because government departments were getting too big and unwieldy! Plus ca change? The problem now goes into reverse. Unless, of course, 'volunteers' take up all the slack. Just like the Army, I want three volunteers, you, you and you.
    Regards, etc.

  • Comment number 92.

    Who cares what business leaders have to say? They run businesses, not countries. Enough of these fat cats who may be very good at making money, but know nothing of the bigger picture. I'm waiting for a letter from 35 nurses to say what they think should be done with our economy.

  • Comment number 93.

    80. At 11:06am on 18 Oct 2010, nautonier wrote:

    You are missing the point. Many UK companies are foreigned owned in part of whole (if a company which is a bit of paper in a drawer can have a nationality) true but the UK shareholders do not care about the UK either. Shareholders care about shareholder value which is the market value plus dividends. When BP dumped all that crude in the Gulf of Mexico, I didn't care about the birds and the fish - I cared about the lack of dividend. This is what all shareholders felt, whether UK or foreign.

    The company directors have a LEGAL obligation to maximise profits and they only do things like charity events to make consumers think positively about the company and purchase their goods or services hence increasing profits.

    So, I say again, who cares about the nationality of shareholders?

  • Comment number 94.

    87. At 11:24am on 18 Oct 2010, AdTheNad wrote:
    85. At 11:14am on 18 Oct 2010, foxyeric wrote:

    This could be said of 99% of countries on our planet.

    I agree completely.

    We need to be working to improve 99% of the countries on our planet.


    - Where's the 1%? La La Land?

  • Comment number 95.

    Cheap political trick, I am sure you can get twice this number to have the opposing view

  • Comment number 96.

    79. At 10:58am on 18 Oct 2010, factual_reporting wrote:

    The cuts have been talked about for so long by Richard Osborne, that he has successfully talked down the economy, before the majority of the cuts are even in place. I believe he is the most dangerous Chancellor we have had in the last 30 years. Every decision he makes seems to provoke public outcry, and results in a change in policy somewhere else, to counteract his original decision.

    - I totally agree, Richard Osborne must go now and the Prime Minister Michael Cameron! And don't get me started on Rick Clegg!

  • Comment number 97.

    87. At 11:24am on 18 Oct 2010, AdTheNad wrote:
    We need to be working to improve 99% of the countries on our planet.
    I believe this is really impossible unfortunately, when you have everyone crying about themselves, and their little bit of land.

  • Comment number 98.

    94. At 11:36am on 18 Oct 2010, Lindsay_from_Hendon wrote:
    Where's the 1%? La La Land?
    Nearly right in 'Cannes' La La La La La la

  • Comment number 99.

    These business leaders are expressing these views because they want to generate stability they are more likely behind the scenes concerned that consumers will cut back on spending and hit their bottom lines, they dont want to see adouble dip. The private sector as it stands cannot soak up large amounts of public sector workers being made redundant only today it was annouced every job has four people chasing it so the private sector is failing in that respect.
    What this country needs is to focus on manufacturing & agriculture and move away from a reliance on banking & services. For those that say it doesnt matter whether the UK owns businesses or not they are deluding themselves its vitally important we start owning our own business as Peston pointed out Siemans is taking jobs in the UK and moving them to Germany thats killing British jobs and will add to our imports.
    Large corporations are also part of the global problem, take cement four companies dominate globally this raises the bar in terms of new entrants and kills jobs we have to question why monopolies bodies have allowed this to happen repeatedly. This was further underlined this weekend with concerns over the four large global auditors. The government should be looking at every facet of business and questioning the theory we cannot keep allowing companies like Kraft, Nestle, Microsoft to so dominate market segments and decimate countries & societies for a priviledged few. That not talking socialism its talking realism for I am a capitalist but one that believes capiltalism unchecked is killing nations.

  • Comment number 100.

    83. At 11:09am on 18 Oct 2010, foxyeric wrote:
    "What frightens me is the country is going down the same road during the Thatcher years".
    What frightens me is that once again, Labour have left their usual debt legacy as they did at the end of the 1970's where Thatcher style cuts are requried to bail this country out!
    Who actually votes for Labour? It's frightening that they haven't all learnt the lesson that Labour cannot run a country as all they do is spend, spend, spend. Must repay the Unions, must spend more public money, must create more public jobs to repay the Unions, spend, spend, spend, racking up enormous debts.
    It would be great to see what the Tories could do without Labour always leaving them with a record budget deficit, (the 1980's economy is almost identical to today's economic mess)


 

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