BBC BLOGS - Stephanomics
« Previous | Main | Next »

Optimistic and steely-eyed

Post categories:

Stephanie Flanders | 17:16 UK time, Thursday, 23 April 2009

A Budget of rose-tinted realism is my view of the chancellor's efforts on Day Two.

Optimistic the Treasury certainly is - about the economy, about the appetite for government debt, and about much else besides. But on the scale - and permanence - of the hole in the public finances, this Budget is quite steely-eyed.

In my previews of the Budget (see Monday's piece and Tuesday's piece for the Ten O'Clock News), I flagged up that the OECD and others believed that a lot of this year's budget deficit was structural, and couldn't be expected to go away as the economy recovered. It turns out that things are worse than the OECD - or anyone else - thought.

The Treasury now thinks that the structural deficit will be 9.8% of GDP this year - out of an overall deficit of 12.4% of GDP. Almost all of that has appeared in the last two years: the Treasury claims the structural deficit was a mere 2.7% of GDP as recently as 2007-8.

As Martin Wolf comments in today's FT, dividing the deficit into "structural" and "cyclical" portions is heroic guesswork at the best of times. When the numbers are this large, and when they change so radically from year to year, you start wondering whether there's much point in maintaining the distinction at all.

For all of us, the key point is that the public finances are going to be in dire shape for nearly a decade, even if all of the chancellor's economic forecasts come true. The pain which follows from that basic truth was spelled out more clearly by the experts at the Institute for Fiscal Studies this afternoon.

As they point out, if you add yesterday's budget squeeze to the measures announced last November, the government is now planning to tighten the budget by well over 6.4% of GDP by 2017-18 - or £90bn a year in today's money. Whether through lower spending or higher taxes, that translates into £2,840 a year for every family in the UK.

Looking at the components of that squeeze, the IFS analysis shows that the chancellor has left a lot of the hard work undone, although since it applies to the parliament after the next one, you can see why he might not have thought it was worth his time.

According to the IFS, the tax rises already announced would only raise about £300 per family per year, slashing public investment will net £400 per family per year, the squeeze in spending would raise about £700 per family a year.

The Budget Book shows that more than half of the total squeeze pencilled in by 2017-8 will be achieved through unspecified tax rises or cuts in current spending. All we know is that it won't be through cuts in public investment - there won't be much of that left after annual cuts of more than 17% a year between 2012-14.

I mentioned yesterday that the spending plans would certainly mean real cuts, given the rising cost of servicing the national debt and rising expenditure on social security and other things the government can't do much about.

Once the government has paid those bills, the IFS expert Gemma Tetlow says, the new plans suggest that departmental spending will have to fall by 2.3% a year in real terms - the tightest outcome for spending over a sustained period since at least the late 1970s, probably earlier. As she points out, if you applied those cuts across the board to existing expenditure plans, only the Department for International Development would emerge with real growth in resources over that period.

I wonder whether the cross-party consensus on expanding foreign aid can possibly survive the onslaught ahead.

Comments

  • Comment number 1.

    Actually there is one thing that they can do it remove of the illegal
    imigrants and also the migrant workers. Properly enforce the minimum wage (which was juust a sop to the back benchs anyway, like fox hunting was) then then get the unemployed to do this work.

    That would make a rather big whole in the structural issues.

    Also what they could do is buy british in the defence industry where it is much better and meats the requirements of the MOD rather than that of the treasury, keeping high tech jobs in the UK. Recentlty they have with the PUMA LEP brougth Canadian rather than a far supperior british solution. Keeping highly skilled engineers in useful work etc and also having a manufacture base to build from


    Its all talk , smoke and mirror's.

  • Comment number 2.

    I'm staggered at the portion of annual debt mountain, that now is structural in nature.

    And no efforts were made to address this problem or to reduce our borrowing on any other matters in the Budget.

    The Chancellor's speech rather reminds me of the captain of a sinking ship saying,

    "Don't man the lifeboats or the pumps.
    A new captain will be helicoptered aboard tomorrow.
    HE will take appropriate action."

    Delaying decisive action simply kills off jobs prospects, and costs us millions in the process.

  • Comment number 3.

    newsjock - You might think it sounds ridiculous. But if one was uncharitable, sceptical and, oh go on then, cynical [which I would never be guilty of, of course..] one might imagine, in a flight of fancy, that Gordon Brown knows the next election is lost, and detests the Conservative Party so much, that he is determined to do the following...

    Margaret Thatcher said her biggest said legacy was 'New Labour'.
    Gordon Brown can get his revenge by turning the Tories into 'up-to-their-necks-in-debt' profligates that have to go to the IMF for a bailout..

    Of course, that assumes that Labour can avoid a sterling crisis until then...

  • Comment number 4.

    Anyone remember the growth and stability pact in Maastrict? Dead as a doornail. Anyone recall the sacrifices Europe including Britain was going to make to slow global warming? Dead as a doornail. What about Europe becoming the best place in the world to do business as Tony Blair promised when he was President of the EU? Deader than dead.

    A decade for Britain's finances to recover Ms. Flanders? Why so optimistic?

  • Comment number 5.

  • Comment number 6.

    Thanks for your clear, specific analysis.

    If the issues are as serious as you say, then why not cost out major areas of expenditure such as:

    * Trident
    * Eurofighter
    * ID cards?

    Also, I suggest we need to look critically at the so-called "active labour measures" proposed. The DIUS Select Committee Report on the new Qualification and Credit Framework [QCF] January 2009 indicated some ways in which this might be begun. See the paragraphs in bold at http://www.parliament.the-stationery-office.co.uk/pa/cm200809/cmselect/cmdius/48/4806.htm

  • Comment number 7.

    Sorry but I am not at all convinced that this treasury view is realistic. Anyway - how can you be both rose tinted and realistic. This all comes back to the validity of forecasts and when the model is bust how do you validate another new model with effectively no relevent data. I really do not think the pundits understand what is going on. It is obvious that the models are bust from the wide variation in how deep the dip is going to be. And it is not as though the bad news has stopped is it, most reviews just says not finished, could be worse to come. Its on par with a man walking down a hill in the dark and saying not far now. And vested interest dominates many voices - its going to be okay, I say so, and BTW I also have the job of selling all this humungous UK debt so lets keep it rosey, and dont mention that small point in the press release. And meanwhile domestically every little vested interest is crawling out of the woodwork to protect their budget, their money as they see it. As the squeeze is going to be ongoing the lobby groups are going to be busy shouting for years. But who knows we may see a reduction in the pressing need for road roundabout gentrification.

  • Comment number 8.

    OH GORDY!! ALL THOSE CHICKENS COMING HOME TO ROOST!!

    WHAT WILL YOU DO? DO A TONY GORDY GO GO GO!!

  • Comment number 9.

    5 StrongholdBarricades

    The 72 percent of public stat in favour of cuts is interesting, almost everybody not employed in the public sector I would say. The gulf between politicans wanting to continue riding along on a wave of spend is miles away from what most of the public want. The dismantling of some of the more extreme brown fantasy island features are pending it would seem. But nevertheless the idea seems to be to hold back any resolution until after the GE. Seems a bit barmy, if they get back in they have their own goose to cook, now that would be funny. If kicked out they have left a scorched earth and everybody will know it, every PMQ will be look at the mess we have to deal with, or is this their idea of punishing us for daring to question. Either way a long time in the wilderness looks at least an option, you need a totally different crew and new ideas and presentation and a long time to overcome this sort of credibility chasm.

  • Comment number 10.

    Mindboggling, Stephanie, especially as many of the population are unaware of the real extent of the catastrophe of the next decade. I still cannot believe that Gordy would want to lose the next election as his legacy in history would truly be one of gross negligence - and he would never return to power - can't see anyone buying his memoirs either.If things are so bad, what options are there for the Tories? All they seem to suggest is that we do not wait until 2011 to start to act but get to grips next year. On the basis of the stats you give the only option is to reinvent society and how we operate. Can you supply thoughts about the alternative or is it that global view of the UK government is so poor that we face IMF intervention before the election?

  • Comment number 11.

    what was really evident from this budget is that the government has decided their time is up and the next election is unwinnable..note that all the nasty medicine is left until after the next election and the top rate tax was trying to set a trap for the tories...if i were the tories i would try and lose the next election and let this tawdry government be hoisted on their own petard!

  • Comment number 12.

    "I flagged up that the OECD and others believed that a lot of this year's budget deficit was structural, and couldn't be expected to go away as the economy recovered. It turns out that things are worse than the OECD - or anyone else - thought."

    Words to the wise: Look into why the OECD PISA people removed the UK's detailed educational data for 2000 and 2003 (literacy and maths). Why was the Treasury's Leitch Review (2006) so concerned? Essentially the same was said in early 2007 across the pond here... so... why don't we hear more from our economists' and their solutions to this?...........or were liars' loans, predatory lending and securitisation their solution?

    Any suggestions? ;-)

  • Comment number 13.

    "The Treasury claims the structural deficit was a mere 2.7% of GDP as recently as 2007-8."

    Interesting since at the time they were claiming that they were following the "golden rule" of balancing the budget over the economic cycle, i.e. of having no structural deficit at all.

    Of course the true deficits are MUCH higher. All the government's "off balance sheet" borrowing (PFI etc) should be added. So even Darling's appalling figures yesterday were a gross understatement of the awfulness of the situation.

    This government has borrowed as much in just two years as all the governments before it for the last thousand years. Please, please will somebody tell Gordon he's out of his depth and needs to go and go now?

  • Comment number 14.

    I guess if you look at the figures provided by the government one might conclude that they saw the crash coming and did nothing about it. In hindsight they now see things differently, or so they say. The basic issues of honesty and integrity in government have long been lost and the price is now being paid. Keep electing the glittering gold and you will continue to find less valuable metal under the surface. In China they have a saying: Wholesale thieves, start a bank.

  • Comment number 15.

    Fundamentally we are living through a crisis of economic theory. The theory was wrong when it claimed that with no or light regulation the market will provide stability. This is a problem for economists, but a tragedy for the rest of us.

    The opposition to the generally accepted nostrums of the past twenty five years was starved of cash to survive and carry out research and has withered to almost nothing. I vividly recall Mrs T's attach on various groups of economic thought that she decide were 'not one of us' - she cut off their funding.

    Economics has failed. Any, and all, economists who has been trained or 'qualified' in the last twenty five years are failures.

    We again need to return to fundamentals. Trade in physical goods is good. Using capital to build productive capacity which when combined with labour produces goods is good. Money is lubricant and a means of exchange.

    The store of value aspect of money has proved to be illusory and I am reminded of the story about academics discussing in what to invest the college funds - one historian challenged the others by pointing out that property is not a safe-as-houses in the longer term.

    The problem we are facing is that the 'wise men' who are still running things can't get their head round the obvious - that land, property and specifically houses are no longer a safe 'investment'. Throughout the budget yesterday there were numerous indications that the prevailing wisdom is still that it is possible to engineer a house price boom and that will cause the economy to recover. This is simply wrong, and the authors of the 260 Red Book are wrong. The World has changed and their whole life is now seen to be founded on a lie. They must go if we are to recover - specifically Sir Nicholas McPherson (and indeed his predecessor now Cabinet Secretary - Sir Gus O'Donnell) both were educated in the fundamentally flawed economics. They just don't get it!

    Recovery will NOT come by re-inflating asset prices. It can only come by making and selling things that people want - trade and manufacture! The fallacy at the heart of the budget is that its authors just don't get this!

  • Comment number 16.

    Lies, spin and devious con tricks and manipulation of figures have played a part in causing the current 'recession' and I think someone like me needs to come out and say that we saw this again in yesterday's 'budget'.

    If GBP £700+ billion (net present value?)in UK government debt is the reported summary of the Chancellors' view of the current UK govt. debt level - The real UK government debt level is GBP higher that one trillion?

    Obviously, no one will know for sure until we look back in the years to come?

    Sooner or later private banking concerns will in my view have to become a thing of the past in terms of the the money supply in each country, economy, region, globally will become increasingly political and with more government intervention. Banking can remain private but it looks like governments will have to decide this year whether to undertake a competent 'hands-on' macro-economic role on our money supply or keep the current economic conditions in a 'flat economy'. How long can the tri-partite UK finance sector regulators sit on the fence?

    Interesting that the Chancellor did not move on taxing 'non-doms' - presumably this is partly as a deviant tactic to wrong side the Tories leading up to the elections as more and more UK 'high-earners' will seek to avoid tax next year by any means available? Both Labour and the Tories are very quiet on the 'non-dom. tax issues' so, perhaps there is a truce while both sides sort the 'skeletons rattling in the cupboards' on this issue?

    Looks like the UK economy is driven firstly by government politics and economics comes in a poor second place. It's the election - Stupid!

    The other issue - has the government got sufficient reserve fund in case of e.g. a major international fuel crisis - another war? - I very much doubt it.

    Many, many issues still to unravel yet?

  • Comment number 17.

    The idea that the public can be sold, and maybe they can, that the meltdown was a result of a misunderstanding of economic theories is a bit strange. You will suffer and pay because others chose not to regulate or enforce basic accounting practices. This is not complex economic theory, this was greed and conspiracy: banks, investors, government regulators and elected officials. More educated but not a whole lot different than the pirates off Samolia.

  • Comment number 18.

    Never in the long list of people who have held the post of Chancellor of the Exchequer has one ever had to deliver such a depressing and devastating state of the economy address. There may be some who can present from some dark corner of the Nation's history an example which contradicts this but, I bet you at the end of the address they were not accused of being widely optimistic as has been leveled at Alistair Darling.
    This accusation is leveled because of his predictions on growth from 2010 onwards, many are asking how did he arrive at such optimistically high figures. The answer I am sorry to say is because he practised to deceive, the growth figures were carefully selected to stop the borrowing requirement over the projected period being shown at the more realistic and honest figure of; "ONE TRILLION POUNDS STERLING".
    What a pathetic excuse this was for a budget to rescue the Nation's economy, with this practise of being economical with the truth we see the budget for what it is, a pathetic attempt to save the jobs of 350 New Labour MPs. Self first,Country last is the New Labour cry.

  • Comment number 19.

    jollo13 (#11) I believe they've hoisted themselves with their own petard (grenade). After all, it's what anarchists often did in days gone by before they called themselves Mensheviks or worse.

  • Comment number 20.

    19. At 10:21pm on 23 Apr 2009, JadedJean wrote:

    jollo13 (#11) "...petard (grenade)...".

    A petard is not a grenade!

    A petard is a type of siege weapon which has the specific use in blowing holes through things, generally doors. It does this by having its iron or bronze body fixed to the door with a number (three or more) stout screws after having it chamber charged.

    You ignite the fuse, retreat and take cover. One of two things happens: either the door is blown, or the weapon is blasted from the door which remains intact, because the screws give way - the latter gives rise to the expression of being 'hoist on one's own petard'.

    Grenades are munitions that glow up and fragment - not the same thing at all.

  • Comment number 21.

    #15 How can you say that economic theories have failed when most governments regard them with contempt?
    Classical economics recommend minimal taxes, most European countries have high taxes. Classical economics recommend a free market, without minimum wage and government intervention: all European countries have minimum wages, state monopolies, and all of them massively increased their intervention by bailing out banks and other companies. Classical economics recommend free trade, most countries retain some barriers to trade.
    Look at Singapore for an example of a country that pays attention to the theory and reaps the benefits.

  • Comment number 22.

    John_from_Hendon (#20) OK, I stand technically corrected - but .... it's not a gallows! ;-)

    It fitted better as an image than 'with their own siege weapon' ;-)

  • Comment number 23.

    Optimistic and steely-eyed. You left one out Ms. Flanders, "brain dead." But then he's your old Darling, not mine. Commercial real estate, credit card debt, bond market bubble, and emerging markets all on the verge of collapse and not in anyone's computations of the damage to be worked out yet and he's optimistic. He's the kind of man who would tell you not to worry when your horse is dead last by twenty furlongs because there's still half a race left to run. When it's over, he'll tell you how well it went because the horse after all did cross the finish line....four hours after the race was over and everyone else went home.

  • Comment number 24.

    I often feel that Gordon Brown is a man in almost permanent emotional rage at his perceived enemies. He can never be wrong either. Brown's actions of late are set on a detertmination to damage the chances for the Tories when they win the next Election. Gordon is already so bitter about Tony Blair not giving way in time, that he now hates Cameron just as much, GB is simply setting up the Conservatives for a fall, not being in the slightest way worried as to the dame to us, the Nation, the People or even his own constituents. He will go down in History as the man who broke the British Economy. His spin machine gave away his true nature as GB loves to hate first, then get his punches in second. That grinning fool of a show he did on You Tube looked like a man positively deranged. He is no fool and knows the Game is lost and he is a very bad loser.

  • Comment number 25.

    Morning Stephanie,
    I have a couple of questions related to your analysis of Government predictions.
    Has anyone compared Gordons predictions on growth during his chancellorship to the actual values achieved?
    If the country is in decline with fewer workers and lower tax receipts, does that mean that GDP gets smaller? If so, then do the percentages quoted take account of this?
    I'm constantly torn between the two emotions of anger at what this Government does to its electors, and just numbness at it all (just ignore it and it will go away).
    Oh, and have a nice day!

  • Comment number 26.

    A few questions and comments come to mind after reading all of the above comments:

    (i) How many of these billions or trillions will be erroded by inflation/hyperinflation? Is that the real unspoken plan? It seems to be what Obama, Geitner and Bernanke are planning for the US.

    (ii) Does it really matter? Nobody can predict what the outcome of this mess will be for the whole world. Economies around the world are collapsing. The UK's bad news today will be matched/surpassed by another country's bad news tomorrow e.g. Germany's negative growth (now there is a silly term) of 6%! No matter what a government does in terms of borrowing or cutting or both will make a blind bit of difference until this thing works itself out. It doesn't look like we have reached a bottom yet. The only certainty is that nobody knows.

    (iii) Did we see the start of a new and desperate phase yesterday with China's naval display? What will the western response be -to start a crash programme of building newer/better ships, submarines and planes until we then feel the psychological need to use them? - it has happened before!

    (iv) Where is the new Keynes going to come from? We need a whole new way of looking at economics because the model we are presently using is no longer adequate for any real planning.

    Just thought I'd ask

  • Comment number 27.


    MarcusAureliusII


    "Commercial real estate, credit card debt, bond market bubble, and emerging markets all on the verge of collapse and not in anyone's computations of the damage to be worked out yet and he's optimistic. He's the kind of man who would tell you not to worry when your horse is dead last by twenty furlongs because there's still half a race left to run. When it's over, he'll tell you how well it went because the horse after all did cross the finish line....four hours after the race was over and everyone else went home."

    Sounds very similar to what's happening in the US to me just substitute Brown and Darling for Obama, Geitner and Bernanke

  • Comment number 28.

    #15 John from Hendon

    Yes, economic theory has failed.
    Perhaps now you will take an interest in what Marx wrote.
    Capitalism by its very nature is unstable and is destined to be replaced.

  • Comment number 29.

    I think it is now widely accepted that whatever Government is returned after the next General election there will have to be severe cuts in Public spending if the Country is ever to return to a balanced economy. The electorate know this and many of them can empathise with these painful but necessary actions. They know because they are putting them into action within their own household budgets; cutting down on spending, paying down their debts and trying to save.
    Against this public awareness of the individuals and Country's debt the electorate should be able to handle some honest speak by politicians, on the surface it would appear there will never be a better time.
    So, the Conservatives should be bold and tell the people there needs to be the severest of cuts, this will mean; job losses, the end to early retirement for many in the public sector, the end of final salary schemes in favour of defined contribution pensions for the pulic sector( this measure should equally apply to MPs), an end to Quangos those unelected bodies who cost so much and deliver so little, the end of child credits or any other kind of credits other that to those on or close to the minimum wage, Government at Westminster will be smaller to reflect the costs and local decisions at devolved assemblies circa 450 MPs should be the new total.
    Now some will say this will just be a suicide note from the Conservatives, that the people will not vote for such a period of austerity. If that is the case and New Labour are voted in then the Conservatives will have avoided a "poisoned chalice" and the people will have got the Government they wished for. Such an outcome will confirm that when it comes to tough decisions the majority of the electorate have no more stomach for tough decisions than politicians.

  • Comment number 30.

    #28. duvinrouge wrote:

    "Perhaps now you will take an interest in what Marx wrote."

    If by 'you' you mean people, society and economists in general I would agree with you, but if your use of 'you' is intended to refer to me I should inform you that, as you could have found out through my previous postings, not only have I studied the economics and social writings of Marx but also those subsequent authors who have continued the same tradition of analysis of economic and social power relationships. However there is a real World that is not inhabited by academic economists and social scientists...

  • Comment number 31.

    THE WIZARDRY OF OZ

    Stephanie, in some respects it's unfair to be too critical of you and other journalists, but let me ask a straight(ish) question:

    "Why do you hang on to (and try to interpret) what Darling and othes like Yvette Cooper thave to say given that they've frequently said that we live in unprecedented times and that other politicians asay they should tell the public the truth?" [Paxman on Newsnight astutely asked Cooper why, as she kept saying that these are unprecdented times, did she keep citing precedents like the 80s to wrong footthe oppostion?).

    Instead, why don't you (idn't you long ago) report on what the hard-nosed empiricists (i.e demographers and educationalists) from the OECD in Brussels, to ETS to Leitch here) have colectively, if not somewhat too urbanely in my view, been saying for some time is really driving the economic 'downturn' - i.e. our dysgenic demographics - and well before it hit the popular press in the 2007 in the guise of 'the credit crunch'.

    I can only conclude that the silence must be put down to the fact that our 'economists' and journalists have been schooled in the wizardry of Oz.

  • Comment number 32.

    It seems that every day something new pops out to lower still further the rock bottom view of Brown's competence - what is below rock bottom? As I reflect on the Budget only two possible explanations come to mind - can anyone think of any others?

    1. Brown/Darling genuinely believe that the huge structural problems faced by the UK can be solved through a few efficiency savings (which may not be real or alternatively why have they not been obtained already) and raising more tax from the richest 2% of the country.

    2. Brown/Darling have cynically and selfishly acted in a political manner, against the country's best interest, to avoid tackling the problems now. Using the very highest (but implausible) growth forecasts has enabled them to duck, until after the next election, the tax and spending pain that has to come.

    Given that Brown/Darling do have brains, explanation 2 sounds more plausible and implicitly acknowledges that they accept that the structural problems can only be tackled with the mandate given by a general election. However, waiting a year will only worsen the position. Come on guys lets have the election now so that re-building can begin. Is our only hope that Labour will be completely decimated in the forthcoming local and European elections, leading to a vote of no confidence in Brown by Labour MPs?

    Months ago I said on one of these blogs that we need a statesman to come forward and lead us through the mess. By definition a statesman would be honest - and we need bucket loads of honesty now. If we end up with spin (whether political or for any other reason) we will simply make ill-informed and wrong decisions. We need to have a proper debate on (i) what public services can/have to be abandoned and (ii) what industries are going to rise up to fuel the new world, and how we nurture them. Both of these are needed - one only will not be sufficient.

    There is no question that there will be a lot of pain which will have to be shared out until re-structuring has been achieved successfully. 50% top rate tax on the "rich" is a given (albeit preferably without the stealth tax add-on items that actually increase that burden to 60% or more). But so too must there be more pain for the middle and lower classes in the form of higher basic rate income tax and/or VAT and reduced social welfare. Unions need to be brought on-side immediately to prevent strikes seeking to influence how the pain is shared. Stopping the accrual of public sector defined benefit pension scheme rights seems to be a given as well.

    The government that properly tackles public sector efficiency should probably employ Fred the Shred to lead the charge against waste. Some big cuts seem obvious, such as ID cards and Trident, others will be harder to find. It is quite ridiculous to read stories such as on one of these blogs a few days ago that the NHS employs agency nurses at a greater cost than full time staff because the cost goes to a non-staff cost line which is subject to less control.

  • Comment number 33.

    John_from_Hendon (#15) "Fundamentally we are living through a crisis of economic theory. The theory was wrong when it claimed that with no or light regulation the market will provide stability. This is a problem for economists, but a tragedy for the rest of us.

    The opposition to the generally accepted nostrums of the past twenty five years was starved of cash to survive and carry out research and has withered to almost nothing. I vividly recall Mrs T's attach on various groups of economic thought that she decide were 'not one of us' - she cut off their funding."


    It wasn't just economic thought was it, it was anything which was at odds with the 'Josephian' anarchistic program of anti-statist pro-individualism i.e. deregulation. In the topsy-turvy, contrary-to-the-fact Liberal-Democratic economies many of us live in, those pointing out the narcisisitic irrationality of it all were marginalised as 'subversives', many losig their jobs. Hernnstein (1983) allegedly died (1994) still thinking there was a 'liberal-conspiracy'. I've certainly heard others in my field say much the same thing but have wearily pointed out that 'conspiracies' have to be illegal. This was legal, but venal.

    Still, one small mercy - it looks like a few less than projected will be going to 'university' this year...

  • Comment number 34.

    The UK is bust.

    A nation which can't feed itself and has to print money to pay its debt is lower down the evolutionary scale than a banana republic. See that thing on the horizon? It's a tidal wave.

  • Comment number 35.

    Right here we go -

    My post yesterday, number 7 -

    ''This all comes back to the validity of forecasts and when the model is bust how do you validate another new model with effectively no relevent data. I really do not think the pundits understand what is going on. It is obvious that the models are bust from the wide variation in how deep the dip is going to be. And it is not as though the bad news has stopped is it, most reviews just says not finished, could be worse to come.''

    Didn't take long did it -


    ''The UK economy shrank 1.9% in the first three months of 2009, according to gross domestic product (GDP) data from the Office for National Statistics.

    The figure was much worse than the expected level of about 1.5% and followed the contraction of 1.6% in the previous three month period.'' BBC News

    The forecasts are usueful, but only to see how far out they are. I don't know about rosey tinted glasses, chemical intervention is needed for some opinions, they are either visionary or halucigenic..

  • Comment number 36.

    What is needed is something radical, right now, not half hearted but full on. Something as radical as privatising the NHS, this colossal monolith, that is almost impossible to reform in its current state. Keep it free at the point of delivery, but have private companies bidding for scarce government resources.
    A: You will get much better value for money.
    B: You will get a better service.
    C: The money raised through the sell off and savings will go a very very long way to clearing the debt.
    Its a no brainer, the NHS should not be a bureaucracy, it should as a collective be a health service providing the very best service free at the point of delivery.
    Privatise the NHS now, clear the national debt, enter the 21st century with a health service lean, efficient and effective.

  • Comment number 37.

    chrisbob99 (#36) "What is needed is something radical, right now, not half hearted but full on. Something as radical as privatising the NHS, this colossal monolith, that is almost impossible to reform in its current state. Keep it free at the point of delivery, but have private companies bidding for scarce government resources."

    And what, if despite appearance and funding to the contrary, these 'inefficiencies' have absolutely nothing to do with it being a Public Service at all, but like all other facets of the Welfare State in recnet decades, it's been subject to consecutive anarchistic governments' relentless 'Permanent Revolution' tacitics since 1979 designed to weaken, fragment and sell off the state to the Private Sector interests for profit through PP/PFI? Looking at the economic mess which we are now in (and think of the land value of hospital sites and schools subject to PPP/PFI), it doesn't matter which bunch of anarchists one points to (they're just naive/corrupt/self-interested/narcissistic politicians doing the bidding of their funders in most cases - look at how they crave the lime-light and celbritism), it's the deregulative anti-statist polices of strategists like Keith Jospeph in the past which has brought this about (except since 1999/2000 it broke off its leash).

    You, along with so many 'neo-liberals' posting here, appear to me to be using the consequences to justify yet more of the same. Do you do so wittingly?


  • Comment number 38.

    JadedJean (#37)

    Yes I do, you see in simplistic terms the economy, welfare state etc are only valid in their current form for a finite period of time. The world moves on and so these things must also evolve, its part of being a human invention. To a certain extent I agree with you, there has been tinkering now is the time for radical action.

    Yes change is a scary thing, no one likes it, but in times such as these we are presented with two options, despair, gripe and do nothing, or seize the opportunity to radically overhaul and reinvent ourselves in ways we would not allow before. When you have already fallen there is less to be afraid of, we are not dead!

  • Comment number 39.

    chrisbob99 (#38) "The world moves on and so these things must also evolve, its part of being a human invention."

    For a few minutes, suspend whatever you believe true, watch this, think about Obama's home city and what's happening there (it's one of the most politically corrupt places in the USA). After you've watched it, ask yourself sincerely whether you see evolution at work or the reverse (dysgenesis).

    Is it within your (or my) gift to change what's physically the case via lofty rhetoric, or do those who deploy such tactics do so solely in their speech writers' interest of national asset stripping before moving on elsewhere to do much the same in this global (internationalist) economy?

    This is not griping, it's just harsh analysis.

  • Comment number 40.

    JadedJean, we are in danger of being the only ones left here.

    I hear what you are saying, but the way I read it you are taking the hopeless path? Change will come in all these areas whether you or I like it or not, I suggest taking control of it and making things fit for purpose, rather than allowing the small number of corrupt individuals you seem to think dominate this world bend it to their own end.

    I know on the face of it my suggestion seems way to out there, but can you honestly see the same system being in place in fifty years time, do you think our children will have the same system, of course they won't. The NHS is nearing the end of its lifetime in its current form, it is no longer doing what it was supposed to do, humans are corrupt, but they are also innately positive, and by attempting to suggest we are worse now than in the good old days, i.e. we are regressing, is crazy in pretty much every way. History teaches us that, for every one thing you can say we have lost, I can give you ten we have gained.

    We are facing now the consiquences of greed, I know that, but this could be our way out, in my view, handled correctly, a win win situation.

  • Comment number 41.

    Oh and btw Chicago has always been corrupt hasnt it, isnt it mafia central?

  • Comment number 42.

    Another area that should be for the chop is the Family Courts and CAFCASS. They have soaked up £50+ billions over the last 13 years to no good effect. Just pain and missery for the Children, Grandparents , exteneded families and oh yes those most Evil Fathers. State inforced childnapped via the forced adoption process and the deaths of Vicky Columbie, Bady P et al all covered up by Spin and deceptions.

    Yet a number of groups have been torn to shreds for trying to raise this issue to Media and Population at large, which has coarse put them on a catastrophic coalision coasre with Zanu-labour, for daring to be messengers.

    This is one area that is ripe for reform that would say billions from those that ply their "trade" in this arena of hell.

    that is where the saving to get use out of this mess will come from not by cancelling Eurofigter etc. But closing the Family Courts and all those parasites that hang from it.

  • Comment number 43.

    chrisbob99 (#40) "I know on the face of it my suggestion seems way to out there, but can you honestly see the same system being in place in fifty years time, do you think our children will have the same system, of course they won't. The NHS is nearing the end of its lifetime in its current form, it is no longer doing what it was supposed to do, humans are corrupt..."

    Are you worried unpleasant thoughts may scare dreamers and spin-meisters away?

    We've had this system for decades. We've seen it undermined for decades (by government), but in recent times, like education, the rate of that subversion has accelerated. The NHS is made up of people and technologies. How do you make organisations work less well other then stocking them with people who don't work well i.e. who can't make systems work well? I suggest you look at the fundamentals. Look at how our population is changing (births are down and we ae dumbing down too through too much smarter female educaton) and look at where we have been importing replacement labour from. Those working in these public organisations can't speak out as doing so is proscribed by (RRAA etc) law.

    So, what are you (or I) going to change? Where is your new human capital going to come from? Have you noticed how miraculously we have gone from sending 30,000 each year to university in the 1960s to 300,000 today? How was that possible (I know its profitable in terms of loans and property development etc but educationally and lon-term socio-economically it's a disaster)? Ability has not changed - it's genetic, if anything, nationally it's slightly deteriorated through too much female education (subtle one that) and too much low skilled immigration. If there are more people delivering services today than there were in the 60s, at what cost is that being done -i.e how can it be the same standard given the above? Have you or others dared to ask these questions? What stops people asking such quesions? Where do people get their aspirational thoughts from? Is it Los Angeles/Hollywood? Is it all the creative writing (aka 'story-telling') degrees? I ask, because there is no evidence for any of it - saying it doesn't make it true - that only happens in LA LA Land ;-(

  • Comment number 44.

    JadedJean (#43) Interesting thoughts, nice editing, but fundamentally wrong. If I have read you right the gist of your argument is that the change that has occurred since the 1960's or whatever arbitrary date you choose has had detrimental effects on us as a nation. Unfortunately for you and anyone else who has a luddite tendency change is and will always happen. This world is no longer the world of the 1960's, we are well into the 21st century where a nations borders are little more than a line on a map. Where immigration has served to help expand our collective wealth beyond recognition, the country is nothing like it was 40 years ago, and in 40 years time the world will be nothing like it is now. Evolve or die, lose hope then die, do nothing then die, I don't want to be part of that.

    I'm am not so naive as to think the upheaval and ramifications of privatising Europe’s largest employer (are we the largest nation? Is it Europe’s best health service?), won't be anything less than enormous, the economic consequences alone will be massive, but they were massive when the NHS started, so why be afraid now.

    #42 - Great points, that really is another area where huge savings can be made! Let’s get radical, lets strip out the vested interests, the fat, and get lean and hungry as a nation again!

  • Comment number 45.

    chrisbob99 (#44) "Unfortunately for you and anyone else who has a luddite tendency change is and will always happen. This world is no longer the world of the 1960's, we are well into the 21st century where a nations borders are little more than a line on a map. Where immigration has served to help expand our collective wealth beyond recognition.."

    Can I ask you for the empirical evidence behind what you assert, as mine shows the opposite. Just bear in mind where the sub-prime market was and how secuitization of that predatory lending could make some think that minority groups contributed to the economy. Penny dropping yet?

    Why do you think the UK's 15 years old's PISA data was excluded on sampling grounds for the detailed comparative OECD maths and literacy PISA results in 2000 and 2003? Why are KS3 SATs going? Why did the NFER CAT3 have to have a conversion score from the CAT2e? And why did many teachers in the early noughties initially think that because the kids were seeming to score better on the CAT3 that they had brighter kids?

    Who is it easier to sell lollies to, grown ups or 'children'?

    Take this on board: - If the presmises one unquestioningly holds true are in fact false, one can do an awful lot of harm via valid reasoning and spin

  • Comment number 46.

    #45

    I'm not a hundred percent sure what you are raging against, are you implying immigration and the less well educated have served to reduce our wealth? I'm assuming you are involved in education, in which case are you also saying that children are not educated to the same level as they were?
    My personal experience would contradict this, I think children now are far more aware of the world and its issues than any generation before. They may not be engaged in polarised political debates as was one the case, but they are all too aware the world is changing. You appear to want to turn the clock back, or stand still, that to me is a serious case of apathy, something kids are accused of all the time!

  • Comment number 47.

    Dresden experienced a "change" during World War II; as a result of the raid that went horribly right......

  • Comment number 48.

    chrisbon99 (46) "I'm not a hundred percent sure what you are raging against,"

    Maybe if you spent a bit more than 14 mins thinking about what I've said it would become clearer?

    "..are you implying immigration and the less well educated have served to reduce our wealth?"

    Do bears....

    OK, let me spell this out for you - do you think the extensive sub-prime predatory lending to minority groups in the USA in wake of changes to the CRA in the USA (warning, this gets heated) inreased Lehman Brothers wealth and contributed to the growth of the USA economy through a balooning Financial Service Sector and support services/sectors like building?

    "I'm assuming you are involved in education, in which case are you also saying that children are not educated to the same level as they were?"

    Did you bother to watch the ETS video?

    "My personal experience would contradict this, I think children now are far more aware of the world and its issues than any generation before."

    Ah, so you reckon we should ignore the largest educational testing service on the planet (ES) which does most of the USA's official tests and go by your personal experience instead? Why? Serious question.

    Incidentally, did you look at the Leitch Review (2006) or the OECD report? Both linked like the video above.

    If you don't like this response, may I remind you of what you said above:

    "I think children now are far more aware of the world and its issues than any generation before."

    Here are the links again

    What more people seem to do today is egocentrically describe their own limited experience/false beliefs instead of allocentrically describing the world based on objective evidence (which is much harder). More people today don't appear to know the difference. More people today confuse opinion with evidence. More people today misuse words because they can't tell the difference. There are more people about today who are less bright than there used to be. The former are prone to confuse what they would like to be so with what is real. It's a sign of our narcissistic, celebrity, media driven times. They make very good consumers.

  • Comment number 49.

    I have lived and survived the last two reccessions and whilst I understand that this one is Global this time at the age of 65 it has ruined everthing I worked for.

    I have to say that the political ambitions of Gordon Brown have been the main factor in the UK now ending up as the poor man of Europe - he knew this was coming but did not risk telling the truth.
    Even now he is directing his Darling to lie for him. Today proves that they have not got a clue how to run the country.
    I think the lesson to be learned is that nobody should be allowed to be an unelected Prime Minister.
    I saw Gordon on the beach at Warbleswich on his Hols last year - he was pathetic - came on with his two children and Sarah wearing his Churchill shoes suit trousers and long sleeved shirt.
    - the poor kids did not have a ball bucket or spade to play with or even a towel.
    Brown took the youngest down to the sea after rolling up his trousers - spent five minutes paddling came back and spent the next half an hour talking to the security guys leaving Sarah with two very dejected looking kids. That sums him up for me - cares for no one but himself.I have been labour most of my life but no more - politics corupts and boy have we seen it both morally and finacially with ALL parties. Vince Cable is the only one in Westmister I would ever vote for.
    David H

  • Comment number 50.

    #48

    I would make a comprehensive reply to your points but you seem far to angry and bitter to see what I am saying. i would just say that I think to go by statistics, think about what you are saying, statistics as a way of solely forming an opinion is laying you open to the manipulation of the very people in power that you seem so convinced are out to get you, and everyone else. We are all part of a human world, there is NO CONSPIRACY!!!

    Any this is way off the point of nationalising the NHS.

  • Comment number 51.

    chrisbob99 (#50) "We are all part of a human world"

    Yup, we're all made of chemicals - la la la ... except we differ genetically from each other by ethnic group in very significiant ways, even though humans share 99% of their genome with chimps ;-)

    Here's another heads-up (apart from telling you that you can't judge anger accurately): Individual ('clinical') judgement (or intuition) is just a derivative case of actuarial/statistical judgement. That's why very simple regression equations do as well if not better than professional opinions all the time. That's why you'll hear doctors talking the language of risk factors these days - evidence driven practice etc etc..

    As to conspiracies - I'm sorry, but they really do happen of sorts, it's just politics, which counts on the general public (or outgroups) not being very clued up (also called state/business/academic secrets - every experienced Civil Servant has one - see Michael Meacher's interesting ideas about the PNAC/9/11 etc on youtube). Sorry to spoil your naive conception of the world, but there was also once a Jewish 'conspiracy' to take over the world too - it was called Bolshevism (Stalin put an end to that via purging them in the 30s, and ending the Comintern in the 40s which was had been what WWII was all about - see Axis Powers pacts in the 1930s).

    Now, back to the NHS - who profits from PPP/PFI? Who lends the banks money to bail them out? Where does it come from? Who borrows it to build hospitals and make big profits? See the money pump, if ever so dimly? See how WWII came about?

 

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.