Darling's big gamble
Alistair Darling's big gamble is not simply that an injection of £20bn can make the recession shallower and shorter. It is that the economy will recover strongly and swiftly enough to allow him - or his successor - to pay back not just that £20bn but the eye wateringly large half a trillion pounds of borrowing which he revealed today.
What's more the chancellor's bet depends on other risky gambles. First, that the British economy will recover as early as the second half of next year. Second, that the government can deliver a major clampdown on spending and huge efficiency savings. Thirdly, that the electorate will support a significant rise in taxes targeted at the wealthy but which will hit those on middle incomes too.
As such this represents a break with both the economics and the politics of the last 30 years - a break with the caution that led Labour's Prime Minister Jim Callaghan to say that you could not spend your way out of a recession and Tony Blair to shy away from increasing income tax.
If Mr Darling wins his bet the economy will be boosted and Labour will dare to dream of winning a record fourth term. If he loses, we will all be paying much much more for a long long time but it will be a Tory not a Labour chancellor who's sending out the bills
I'm 
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I feel like I just watched a desperate poker player decide that as the blinds are too big he might as well go all-in on a 2-7 off-suit.
With my money and my kids futures.
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Hey, let's all gamble with several billion pounds. While we're at it, why not put £10 billion on the 2.30 at Doncaster? It's only the nation's money that's all. Tell you what, the crown jewels are worth a bob or two - let's pawn them for £5 billion (they're only part of Britain's heritage after all). Finally, sell the people! That's it, kill everyone and sell off the body parts - that'll work.
Absolutely astonishing - I'd be hung up by the you-know-whats by the missus if I gambled as much as £30, yet this govt is risking to ruin the nation on a punt. This is appalling. Even if you're a core Labour voter - surely you must be able to see the madness and desperation in this.
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I cannot believe that the economy will grow as forecast.
Even if the credit crunch is sorted out, too many people will be scared to borrow again
And that is what was responsible for most of the 'growth' in the British Economy - especially in the last few years.
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This is truly a gamble and I see nothing that encourages me to think it will work.
I know some of it will work by the law of averages but we are facing the biggest economic crisis in sixty years - not my words - and this is just a feeble response.
Where is the determination to turn things around, to set new visions and goals? No sunlit uplands for the British, I fear.
I am sorry but this government has run out of steam, run out of ideas and now it has run out of money.
It is reduced to flashing its credit card at the bookies.
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It is a gamble he has to take, and one the Tories would have taken if in power. They are just playing politics.
I can guarantee that the economy would have been in exactly the same position now who ever had been in power.
That the global mess would have happened in exactly the same way.
George Osborne's posturing at the dispatch box today was that of a spoilt school bully. I refuse to vote for anyone, Tory, Labour or Liberal who is so arrogant and vicious.
It is the Torys' city friends that have been building this situation since the early eighties when they were told to go forth and do as they liked, and Jim Slater was their idol.
But the true lie falls to both Parties as they believe they can actually do something about it.
The genie is out of the bottle has been for decades. It is just sad that we will pick up the tab.
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win or lose we all pay for a long long time
This is just tinkering so much for the promised help....
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Fantastic all out troubles will be over by next Summer.
Nice one Alistair youre a star
All hail the Android Emperor
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How incredible.
One minute he is abolishing the 10% "to simplyfy the tax system" now he is adding
a 45% rate.
For heavens sake wasn't this the perfect chance to announce a fundamental change to a truly progressive tax system (a la France?) It has to be crazy that one pound is not taxed and the next can be charged at 20%. It would enable us to start to symplyfy the whole system for the 21st century.
What am I missing?
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I can't see what other real choice he had. Opting to cross his arms and say "there's nothing we can do" would have been met with disastrous consequences. As with everything these days, we want results now and never prepared to wait.
Remind me some of the reason of the Credit crunch. Oh, yes. People spending beyond their means. hmm...
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Indeed they are the parameters of the bet and to succed all three need to come to pass. The odds are very very poor.
This is all about shoring up core support to try to turn a whitewash at the next election into a crashing defeat and leaving a huge problem behind for the incoming probably conservative government.
Having spent the contents of the piggy bank he had to sell the freehold, he has now taken a second mortgage out on it safe in knowledge he is going bankrupt and will never have to pay it back.
Low politics of the very worst kind - he should be ashamed of himself.
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I wonder if the borrowing of 118 billion (aargh) includes the off balance sheet items, which will probably rise if there's more spent on railways, housing, hospitals etc. What does everyone think?
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So..
15bn a year fiscal stimulus.
Employer's and employee's paying 40bn more a year.
How is taxing jobs going to make this recession shorter?
How is taxing the very lifeblood of the economy going to keep people paying taxes and growing the economy.
It won't.
The VAT cut doesn't apply to
Food,
Domestic energy
Petrol/diesel
Alcohol
Tobacco..
I've just found out thanks to the NI changes and fiscal drag on the income tax threshold I'm 30 quid a month worse off.
So I have spent 1200 pounds in the shops a month to be quits.
I won't, I'll be spending nothing. I'm battening down the hatches for worse to come.
It's a simple choice.
Vote for more of our good money wasted on Labour's pet projects (ID Cards, Children's database) and their voters, or vote for someone else who will govern ALL of Britain.
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Er...hang on. We will all have to pay it back even in the best of circumstances. This will cost us £100 billion easily. The housing market is on its' knees, the city is bust, we are not going to have some miracle in any quarter in 2009, 2010 or ever. At the recovery time I hope that we are able to tap the wealthy to request as nicely as possible that they pay a bit more, but the loopholes still remain.
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It seems Alistair is a betting man - he's betting his job that the public are so gullible they'll fall for this sham budget and believe that the debt black hole we're in is because the government wishes to rekindle the economy they've thouroughly drenched.
We'll see how good his cards are when they call the snap election next year.
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Darling predicts that we will not be in total recovery until 2015. That takes care of the entire first term of any new Government. Guess who may have to carry the can? Disgraceful!
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Nick,
notice that commentators on Radio 5 are going for the conservative MPs for baying when Darling made some of his announcements.
I am not at all surprised that they were either, I mean the gall of the two of them Darling Brown. We are in a better position than most, I mean, you couldn't make it up.
As for Brown sat on the front bench grinning like a cheshire cat. He will never learn will he. Serious man for serious times, you've got to laugh.
In the meantime a British citizen still lies dead in Pakistan, killed by an American remotely controlled Drone. Meantime the de Menezes inquest continues. Meanwhile Gordon still didn't ackowledge the death of the soldiers last week, nor did he understand about Baby P.
At least he was not picking his nose during the Darling speech. However, what he failed to understand is the fact that he is unelected as Prime Minister, he doesn't understand the real problem. We do not live in a representative democracy. We are ruled by a despot.
Finally, you have to laugh because this was not a budget, it was a Pre-Budget report, and so there will not even be a vote for the Tories to vote against. So, all the nonsense about whether the conservatives would vote for or against is well, nonsense.
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By the way Nick, do you STILL have to have George Osbourne's holiday in Corfu link shown on your blog - it is so passee.
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The Next Election.
Whenever it is, the truth is both parties have the same economic scenario.
If taxes have to rise under Labour they probably will under the Tories too because the scale of public service cuts would be vast if not and couldn't be wished away with the oldest con in the book "cut waste".
Hundreds of thousands of redundancies, massive upfront severence payments and massive revenue costs of benefit payments.
The Tory "Final Solution" all over again.
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It's not a gamble though is it because Darling must know deep down that it wont be him that has to pick up the tab in a few years time. He can't really lose unless by some unforeseen circumstance Gordon Brown is returned for a fourth term.
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Not so much a gamble as a last desperate throw of the dice. " Drowning man clutching at straw " springs to mind. The whole budget smells of Gordon Brown, sneaky , untruthful, full of meaningless rhetoric and I suspect, totally ineffective as the answer to the problems Brown got the country into. Do they honestly think that the tiny amounts ( on a personal basis ) being handed out will have any affect on the wider economy. Already rumour is rife that they already may be having difficulty raising the cash they intend to borrow on anything like sustainable terms. The hole we're in may just have got bigger. This was a budget all about preparing the way for a June election, with more giveaway in April and the bad news about tax rises already mentioned therefore not required to be mentioned again, and hopefully forgotten about by the punters. The rise in the stock market was more about the US bailing out their biggest bank than Darling's non event budget statement.
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Can I make a useful suggestion to the Chancellor. If he wants to know how to pay for the tax cuts he has announced then he need look no further than Public Sector Pensions. Brown had absolutely no scrupples about raiding the pensions of people working in the private sector so why shouldn't the Labour government do the same to public sector pensions.
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I just find this so depressing, the current financial crisis has occurred because of irresponsible borrowing and economies fuelled by unsustainable consumerism and unsustainable house prices – and what is the proposed solution? More of the same! Has Darling learnt nothing? – surely this will lead to an even worse boom bust disaster a few years further along with an economy grappling with a crippling debt – but I assume Darling believes it won’t be his problem then – no it will be ours and our children’s ...
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Nick.. you have made a typing error.
Presumably you mean the "eye wateringly large half a trillion additional pounds of borrowing he unveiled today"
In any case, if cassius is right we won't have to wait and see because inflation will take care of it:
http://cassiuswrites.blogspot.com/2008/11/we-may-not-have-to-wait-for-darlings.html
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Okay he's bet 20 billion pounds.
How do we bet that he's got it wrong because that's an absolute certainty!
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Definitely best summed up by Sir Richard Mottram when Martin Sixsmith resigned.
http://en.wikipedia.org/wiki/Richard_Mottram
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This is a disaster for our country. To saddle every tax payer with another £3000.00 of debt is ludicrous.
There is no way this unfunded tax cutting fiscal stimulus will work. Brown & Darling can dress it up anyway they like, but they may as well roll dice.
The G20 countries in Washington agreed ONLY countries with solid surplus' should attempt this exercise. France and Germany are not going down this route.
Every tax payer will suffer massively. Brown remains in denial as he watches impotently the disintegration of the economy. He has ruined our pensions, ruined our savings and now ruined our economy.
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Nick
Usually, in the case of a bet, it is clear whether or not a winner or loser has been backed. Not in this game.
Who will be the judge in terms of whether or not the gamble succeeded ? No matter what happens, Brown will say, "It would have been worse, but for the action we took."
Impossible to prove, impossible to disprove.
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Did I hear correctly on Nick's report on the main 6 pm BBC news?
Did I hear him say that if the Chancellor's big punt with our money pays off in the short term then he (Nick) was looking forward to Labour winning a fourth election?
If I did mishear then apologies.
Or was it simply left-wing right-wing balance with Peston the Knowledge on the programme?
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Is anybody modding this to approve some of these posts??
Also notice the tax rise for business on fuel. They are taking the VAT off (therefore claimable) but adding it in duty (not claimable)
With one hand he giveth and the other he taketh away!
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Gordon just bought a drink at the last chance saloon.
If it comes off (which I doubt), he will hail himself as the country's saviour and we'll never hear the end of it.
If he loses, well - what has he got to lose?
The Conservatives will pick up the poisoned chalice in 2010 and they will have to increase taxes to pay it all back. Enter Labour again in 2014 under the guise of high taxation to "get the country back on it's feet!"
God help the lot of us!
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If the Public Debt is heading for a Trillion (or more) then I assume this is the official borrowings figure?
What is the accumulating size of the PFI debt currently residing somewhere off-shore?
It would be nice to know how the country will also pay for that.
Silly me - we'll borrow it!
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#5
I beg to differ. The last tory govt left the economy in an extremely healthy state, which this Labour govt has abused and squandered. Name the last Labour govt which left the economy in a healthy state? Go on, name it. You'll be going back a long, long time. I appreciate that, for a Labour supporter, this must be a hard pill to swallow, but in the last 11 years your beloved party has absolutely bust this country for at least 2 decades. I say 'bust', but there's a more appropriate word to use which wouldn't get past the moderators.
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Have to say the 'fiscal stimulus' element doesn't seem very stimulating. There is a lot of giving with one hand and taking with the other. Also, converting VAT to fuel duty tax will hit the transport sector because they can't reclaim fuel duty, but they can reclaim VAT.
I'm extremely disappointed in the other side of the equation. This could never just be about throwing money about (which hasn't been done very successfully), but also had to be about reining in public spending. GBP5bn of 'efficiency' savings hardly scratches the surface, when we know from bitter experience that efficient is not a description that even the most rabid labour apologist could direct at this government.
Most importantly, and worryingly, and I suspect what will condemn the currency over the next few weeks/months, is that as per usual, labour has taken the most optimistic possibly projections, tweaked them upwards and then rounded them up again for good measure when arriving at their figures. It will not take long for the markets to see through these and realise that they are simply not sustainable.
The idea that negative growth will only last for the first two quarters of next year is risible. But it does pretty much confirm that 6 June will be the day for GE, because if they wait till 2010, and the economy is still in recession, it will be clear to everyone that their figures are a complete and utter fiction.
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How about suggesting that our MP's have a review and cut on their expenses? That should save us a few hundred thousand at least!
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This is a joke.
The economy is not going to grow as predicted.
Scorched Earth policy sounds like such a meaningless phrase given the announcements Labour made today. It is far, far worse than that.
No wonder Gordon Brown looked so ill and embarrassed on the front bench today. In his heart he knows he has wrecked the country.
Social mobility anyone?
Well yes- we are going to be very Socially Mobile. Just not in the direction Labour hoped.
The lesson is. Never, ever, ever vote in a Labour government again.
If somehow Labour do get re-elected one day - then immediately diversify all your assets into gold and run for the hills and dig a bunker.
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Can the government tell me if my customers standing orders will still be paid in december now the amounts are wrong? Can anyone tell me how I get new payment instructions set up in 4 days to avoid going into a cash flow black hole in December? Can anyone tell me how we make sure all our customers software is changed to use to the 15% rate in 4 days? Can anyone tell me the benefit of having to cancel all my useful projects this week to deal with the effects of this ridiculous stunt. In fact can anyone now tell me why I should bother running a business at all? Can anyone tell my why an UNELECTED prime minister can saddle us with debt like this for years? ELECTION NOW!!!!!!!!!!!!!! IF ANYONE AGREES LET IT BE KNOWN AND FAST BEFORE WE ALL END UP IN MASSIVE DEBT FOR YEARS AND YEARS!!!
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What is worse - these borrowing and debt figures will be the false figures that don't take into account PFI or Public Sector Pensions debt.
So the figures are made to look more rosy since they not only exclude total debt but are also based on overly positive economic growth forecasts.
By the way - anyone notice the Fiscal Stimulus? I didn't see one.
Thanks Labour.
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This comment was removed because the moderators found it broke the House Rules.
The Sun's headline was wrong at the time, but so apt for now:
'Will the last one leaving Britain turn the lights out?'
If we can even afford them . . .
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NB 38
Brown is such a loser I wouldn't give him a pound to buy me a lottery ticket.
Guess What! He's just gambled away squillions of our money on a non runner.
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32# Peaslaker
Easy to your question.
The Blair/Brown Government 1997/01.
The Blair/Brown Government 2001/05
The very reason they got re-elected at the end of these governments was the "Economy Stupid"
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The odds of Labour winning the next election have just gone from 2/1 to 2.45/1
So when you say ''If Mr Darling wins his bet the economy will be boosted'' do we assume the opposite?
I think it was a great statement in doing absolutely nothing and as such the economy will run its course with no interference as it should be done.
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The only gamble is whether the headline giveaways will be sufficient to con the electorate and allow Gordon Brown to call an election next year.
We had just such giveaways before each of the last two general elections.
This is the same. A small handout followed by huge tax increases.
If we re-elect this government we have only ourselves to blame. Even the bible told us we must save in the good years to have something for the bad. Gordon Brown should have read about Moses before spending even more than was earned in the good years such that we already had a huge deficit going in to the recession. This is why the UK is the worst prepared major economy for a recession.
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It used to be the custom that leaking details of a budget was a resigning matter. Remember the Chancellor Hugh Dalton in 1947 - he made a remark to a journalist on his way into the House to deliver his budget and was later forced to resign.
These days, it's all spin and leaks!
Announcing in advance that VAT is to be lowered will no doubt cause some people to put off large purchases until next week.
Brown knows he will lose the next election so he is deliberately wrecking the economy with reckless borrowing.
Callaghan and Healey brought this country to its knees in 1979 by sheer incompetence. Brown is destroying our chances of recovery as an act of wilful vandalism, to leave as big a mess as possible for the next government. He is like a spoilt child who says if he can't have his way, he wants his ball back!
Brown is effectively borrowing money from us, then lending it back to us with 'temporary' tax cuts. It's time these people were shown the door.
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I would like the name of Darling's and Brown 's Optician - so that I can buy a nice pair of VAT-reduced rose-tinted spectacles.
Then I'm off to the pub to have a pint of whatever those two clowns are drinking - because they could not have been sober when they cooked up this half-baked mees and tried to call it a plan.
Also, sadly I am of an age when I may never see this wretched debt paid off. Thanks guys!!
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Lol - I advise everyone to take a look at the pre-budget report quotes (from political figures not the public)
Surprisingly enough, nearly all the commentators (and we're not just talking the tories here, also CBI, IFS, CoC) find quite a few faults mixed in there
The unions meanwhile regard it as a 100% success, showing just who this government serves:
"The report gives Britain a reason to be optimistic this Christmas and beyond. This is a welcome warm-up exercise after 30 years of inaction and neo-liberal economics. Gordon Brown has thrown off the shackles of new Labour to reveal the real Labour."
Derek Simpson - Unite
Couldn't have said it better myself...sickening
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What did you mean by, in response to Brown's PBR plans:
"If the public like them we'll all be happy, Labour will win a fourth term, if not it will be a Conservative Chancellor who will be putting out the bills"
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I just can't believe the sanctimonious hypocrisy.
They have given the "higher paid" - code for big-bucks folk - a warning that there will be a tax increase in the near future. That allows them the time to work out, with their financial advisors and lawyers, how to shelter as much as possible, to reduce the actual amount of tax they will pay.
Darling and Brown say that, as their manifesto said they wouldn't increase personal taxes, it's only fair to give warning of their intentions.
Excuse me.
Where in the manifesto did it say that the poorest tier in society would have THEIR tax raised from 10p to 20p?
Did they get a warning that, after another election, they would have to pay more tax?
And be told that the NEXT manifesto would include that change?
Not at all. It just happened...
It was Gordon's way of shafting people. For their own good, no doubt. And, by trying to create a "pay-back", all sorts of stupid and expensive arrangements were put in place to attempt to "equalise" most - not all - people's real income. By making them dependent on state hand-outs.
That's the worst type of socialism. The "come to us", hand-out philosophy that created economic carnage in the USSR and China.
It's about time that all the rowlocks that appears on here about the nasty "Tory boys' friends" stuff is dumped.
How can it be reasonable for a Labour government to raise taxes on the poorest - without flagging it in a manifesto - but defer increased taxes on those who could more readily pay it?
God help us all.
Over many years, I've voted for all sorts of parties. Tory, Labour, Liberals or Independents - depending on the national or local conditions.
I have never, ever, come across such a bunch of stuffed up, self-regarding folk that now run this nation.
Possibly the worst hypocrisy is the Chancellor's talk about "efficiency savings". Whenever the Tories talk about it, New Labour ask "where will you cut front-line services". But now they brag about historical savings and promise more in the future.
IF they saved in the past few years, then why was it necessary to keep on raising tax levels?
IF they could do it in the future, then why are opposition parties wrong to say that cuts - efficiency savings - can't possibly work?
This administration plans to give MPs a really long break, very soon.
So just who will be around to disect the constant stream of legislation that pours out of Brussels?
Who will be ploughing their way through the huge increases in general and corporate legislation and regulation that strangles British business?
National debt... who cares?
It seems pretty obvious that Brown and Co have already decided that they can't win the next election, so a scorched earth approach will leave their successors with so many problems that normal service will not be possible for another decade.
Thank goodness that the majority of the present government will no longer be involved with managing an economy (except getting the turkey for their family Christmas. Or should that be Wintertide, or some other rubbish...?).
Gordon has been happy recently, because he found a way to blame others for the disgraceful waste of UK plc's resources.
We will have the pleasure of paying for his "quite suitable" pension. Shame that the people who pay for his pension have seen their own pension schemes going down the pan.
But, hey ho... You can only be a good Socialist nowadays if you've got a few dozen bottles of decent wine in the cellar.
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How exactly can we tell if Darling's gamble pays off? There is no way of knowing what the future would have been without these measures.
Presumably the Government will just tell us that things are better than they would otherwise have been and expect us to believe it.
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#41 Eatonrifle
I take your point but I fear you deliberately missed mine. What I meant was, when was the last time an outgoing Labour govt left the economy in a healthy state?
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39 bluntjeremy
I think a lot of local councils are doing just that to the street lamps every evening, because they can't afford to run them.
Even though council tax has pretty much doubled over the last decade....
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The problem with heavy government borrowing is of course its possible effect on the value of the pound. Germany, France and Italy all have larger outstanding public debts than the UK has. However they have the advantage of membership of the Eurozone.
The euro is backed by the combined weight of the economies of all the member countries, while the sterling area, on which the pound depends, consists essentially nowadays of only the UK.
I wonder if Gordon Brown now regrets blocking UK membership of the Eurozone. If the UK had joined, the extra borrowing required to reduce the effect of the recession would have been less risky.
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Impressive speech. Ali D touched a lot of bases. Sounds like some might work. Pensioners will be glad for their extra fiver a week.
I'm also impressed that an attempt has been made to redress the imbalance that has grown between high earners and the proportionate tax they pay. We have after all seen some very high earners bring the western world economy to the brink of collapse. It is only fair they pay a bit more of the tax that is being used to rescue them from themselves.
This is otherwise classic Nu-Labour. The VAT cut is a window dressing, and a very expensive one at that - something for them to throw at the Tories "We cut VAT when you would sit back and do nothing". I would expect the effect of this cut on spending to be nil. We also had some very small handouts to low earners.
So we had costly window dressing and minor tax cutting. Classic.
He did give us the specter of increased NI.
We have tax increases planned for 2011. Have Labour learned nothing from this past year? The "10p tax fiasco" was planned for 12 months ahead, at a point in time when no-one could predict the state of the economy. It was an act of arrogance. Now we see the same thing, but now the plan is for a change over two years ahead.
Labour have been very bad at predicting what was going to happen (even by their own admission) and I doubt they have improved.
ALi D has had some good ideas about how to help the economy, and he's had some bad ones. Sadly, he does not know which is which.
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Why do I keep remembering Auden?
"Every farthing of the cost,
All the dreadful cards foretell,
Shall be paid .."
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50- Oh I can't give you the year but it was well before I was born (in fact before most here were born). Certainly Brown's reputation for prudence was largely based on the healthy economy he inherited in 1997. The funny thing is I discuss these matters with friends. Some are very clearly Labour voters and the sad thing is there is no reasoning with them when you point out just how much their government has messed up. You can explain that a large part of the crisis is Brown's work and through his failings and it doesn't register. You can argue that the ecomomy was in greatshape in1997, that there was a big surplus and Britain has Europe's largest pension fund. It won' t matter. I am not Tory or Lib Dem, I will vote on who I think is right for that time but I am staggered at the sheer stupidity of some people whose only argument is to dig Thatcher up. You think this is how the rest of Europe chose their governments? By looking back?
No. An obsession with the Thatcher years, and an obsession with who is a toff and who isn't is stagnating any progress we as a society have to make. Do I care about what the damage will be? Well in the short term yes. In the long term no as I will be moving abroad with my husband in a few years.
But this country is going to be very bad for a long time. Back to being the sick man of Europe. And this after again a Labour government. You had your 11 year party, now the bill has arrived and no one can pay. You can keep your biased BBC, your spin and lies and your PM that thinks he can get away by lying to us all.
One more thing. The USA kicked out a president that had brought the country to its knees financially. That courted the large spenders in the city and that started an illegal war. We were all rejoicing here. But will we kick out our own government who did all this and more?
Well I am not sure people are clever enough to understand the level of debt Brown has gotten us into.
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50#Peaslaker
Well only slightly but you're not the first to peddle the idea that in 1997 Labour were bequethed a golden economic legacy.
On what measure?
Interest rates?
Inflation?
Employment?
Even Borrowing against GDP was onlt at the level of the UK up till 2007/8.
And if you're honest enough to admit it and many aren't there was no worldwide economic credit crunch fed reession during the last Tory administration was there?
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I support, as a matter of principle, higher rates of tax on very high earners. Should be doing that anyway - but from a redistribution perspective rather than a pay back borrowing angle. Having said that, I think this whole package is a bit of a joke. It's just tinkering around on the margins of the problem (as per usual). Cutting VAT for one year by 2.5 pc will have ZILCHO impact. Why, for heaven's sake, don't they do something big if they're going to do something. Otherwise, don't bother. This recession is going to be very very severe - it's going to be epoch changing in ways we don't yet understand. Either do something big or do nothing - another 20 bill of borrowing, on top of what's already there, is trivial and a waste of everyone's time.
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#36
I feel for you, man.
Ali D would not have considered such inconveniences. He would also not have considered why so many items are priced at the psychological levels of £0.99, £9.99, £99.99. It's easier to sell off something marked at the "half price" of £49.99 instead of its full price of £99.99. Mark something as "Now £97.58" and customers will be wondering what the hell is going on.
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This is like the prelude to the 2005 election all over again.. Give the voters lots of goodies, if you win, withdraw them; if you lose, it s some-one elses problem. Forget Darling, it is the Prime Minister
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#56 Eatonrifle
You still haven't answered the question, which seems to be a trait of Labour supporters (just listen to the PM at PMQs)!
The question was; when was the last outgoing Labour govt that left the economy in a healthy state? Asking me a question isn't the same as answering a question! It's a fair question too!
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Terrifying.
Welcome to 2010: the new Middle Ages, where a pint of ale costs six eggs and a tankful of petrol costs a pig and three chickens.
Thanks Labour.
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So the government is going to save an extra £5 billion in efficiency savings in 2010-11.
Or to put it another way, the government are wasting £5 billion in 2008-09 and they will be wasting the same £5 billion in 2009-10 before they finally get round to sorting this waste out in 2010-11.
Unbelievable!
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Nick, In your television interview with Peston could I believe it that even you showed a little doubt as to weather the figures really add up. Yes, you use the word gamble, a last throw of the dice of a desperate goverment.
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#21 could not agree more.
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The death of Nu-Labour
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An excellent deconstruction of Brown's lies
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peas @ 60
well hang on, there's only been 2 outgoing labour governments in the last fifty odd years - also, governments tend to lose if the economy is going bad, don't they? - so, to be fair, I don't think you have much of a point
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I completely support taxes being raised on the obscenely rich. I'm sure were the Tories in Number 10, we'd be seeing massive tax breaks for the rich and huge tax rises on the poor. Lucky for us, people with morals currently reside in Downing Street.
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Peaslaker/Eatonrifle,
you both appear to be falling into the all Labour bad/all tory good and vice versa trap.
The answer to the original question is 97/01 Blair Brown by a wide variety of measures.
It was the first labour government ever to achieve the feat since the war (it couldn't have been worse after the war). It actually technically was better than the state when they received it from John Major.
It is the last term and a half that knackered it.
Brakes applied too late or not at all (in this case) = car crash (higher the speed more the damage - and we were moving fast)
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re: 68, TheHandOfHistory
Lucky for us, people with morals currently reside in Downing Street.
LOL pull the other one! You mean those people who DOUBLED tax on the poorest?
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With all this debt we are stacking up for ourselves in the near future can we still afford to host the Olympics in 2012? Perhaps we should offer the Olympic baton to the French, purely in the interests of good neighbourly relations. After all they were very keen to win the bid.
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60#Peaslaker.
I'm sure you understand that a term such as "economic health" is both relative and subjective and not just limited to "outgoing" governments but all terms of Government.
Theres only been two outgoing Labour Govrnmernments in the last 58 years!! and it proves nothing .
Your premise is that ougoing Tory Government leaves the UK with a healthy economy? Based on 1997 presumeably? As stated in my previous post that is at least debateable.
The previous outgoing Tory, Ted Heath in 1974 left an economic disaster (three day weeks, high inflation, high borrowing, power cuts) that set the scene for the rest of the decade.
The Thatcher Government of 79-83 was hardly an economic success, remember that recession?
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power_2_the_ppl
The people who doubled tax on the poorest were the Tories in the 80's and 90's - a party you support despite them being completely contradictory to your name, "power_2_the_ppl".
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#57.
Sagamix
Welcome to our world.
Do you know what really kills me? You know, with the economy they inherited in 1997. The one that was starting to deliver surpluses and increased spending on 'infrastructure' and all that?
Do you know what really gets my goat?
I'll tell you.
It would have been easier to get it right.
They had to really go out of their way to screw it up so badly. Not just a little bit out of their way. Not even a two or three year mid-term brain-wobble out of the way. No. They had to go a full decade out of their way to screw things up so comprehensively.
It would have been easier to get it right.
That's what kills me.
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65 and 66 Power-to-ppl
Both those links you posted say it all.
Thanks Labour.
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Sorry Nick, but what a one-sided economically illiterate blog. What you don't ask of course is, what are the risks if we follow Tory policies and do nothing?
The risks are pretty plain, especially if other governments around the world are as idiotic as our current Opposition (fortunately Obama and his advisors are not idiots).
If we do nothing, it is almost certain that the world will go into the worst recession for eighty years, destroying vast swathes of productive capacity which will take years if ever to come back. Unemployment will rocket, living standards will fall, and social unrest and conflict are inevitable.
But then, hey, better to inflict this on the world than raising taxes on British Daily Mail readers. Pathetic narrow mindedness.
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message 5 Old Boar: "I can guarantee that the economy would have been in exactly the same position now who ever had been in power."
eh? Do you know what guarantee means? Do you know what Ken Clarke's 'tight' fiscal policies were? Brown did the opposite as soon as he could.
Only your last sentence is true.
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re: 73, The Hand Of History
It's the year 2008 dontcha know... Perhaps Rip Van Winkle would be a more appropriate username for you.
The Labour party doubled tax on the poorest... check it out here.
Justify that.
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RE: artisticsocrates
Just so you understand - Darling did not increase the weekly state pension beyond what it was due to increase by anyway.
And to make matters worse for pensioners, their average inflation cost is c. twice the RPI so again in fact they will be worse off going into next year.
Nothing changes regardless of which party is in government - lots of rhetoric, no action.
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Nick, I'll happily take the bet with you - against Darling's predictions that is!
What is so shocking is how a government who have shown themselves to be utterly incompetent and completely incapable of understanding why we are in this situation, is allowed to continue so recklessly and, when they fail, which they will, just walk away and put it down to bad luck.
The situation is farcical. Indeed, if the situation wasn't so serious, we could see this as a reworking of a comedy classic, Dad's Army - Brown as Captain Mainwaring and Darling as Sgt Wilson - well, as Private Fraser would say 'We're doomed, doomed!'.
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novoludo wrote:
Sorry Nick, but what a one-sided economically illiterate blog. What you don't ask of course is, what are the risks if we follow Tory policies and do nothing?
From what I have seen the idea that the Tories wanted to do nothing seems to be a New Labour invention - the Tories have suggested ideas like suspension of corporation taxes and company NI to keep smaller companies afloat (and allow them to keep on staff that will otherwise be on the dole). They also suggested ideas to encourage companies to hire new staff. From what I have seen New Labour have actually used some of these ideas.
I don't think that the Tories have came out with the best ideas here - my opinion is that the Lib Dems have the right idea, sending money into the pockets of the low and middle earners is a very positive thing.
However, doing all we can to keep companies afloat is also sensible.
The New Labour ideas doesn't really do much in the short term (I suspect that many companies will consider the VAT cut to be extra profit) and the tax increases could potentially mean that anyone earning 30,000 or above would be worse off (that is based on a comment I read - I am sure once people have had a chance to check the numbers this will change) but even a government minister said that by 2011 anyone earning over £40,000 would be worse off - yes this is quite a lot but we are not talking "mega bucks".
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#78,
I'm not going to check out your Tory propoganda links.
The economic recession we're in now is as a direct result of greedy Tory businessmen like Conrad Black.
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#76
If we do nothing, it is almost certain that the world will go into the worst recession for eighty years, destroying vast swathes of productive capacity which will take years if ever to come back. Unemployment will rocket, living standards will fall, and social unrest and conflict are inevitable.
What productive capacity are you talking about? Our capacity to cold-call folk in their own homes and sell them another loan? Our capacity to inflate the value of a two bed ex-local authority flat by another 15% per year? Our capacity to remortgage and go and treat ourselves to a Porsche Cayenne and an all-inclusive holiday in Mauritius?
Even with spending at 8% of GDP your scenario is nailed-on.
The 'tough choice' we needed today was Darling standing up and saying he'd had a talk with the other main parties, there had been a consensus, we have been living outside our means and we'd learned our lesson. The borrowing stops here!
What we got was 500,000,000,000 pounds of planned borrowing from a government who not once in eleven years of trying, one budget per year, five years of annual projected borrowings per year, PLUS half-yearly pre-budget reports, one hundred individual borrowing projections - some as little as six months in advance - not ONCE surprised on the downside. Half a trillion pounds of projected borrowing. And a 100-0 record for being delusionally optimistic
We are so doomed.
Utter incompetence.
We will need to redefine incompetence.
Just as there was a proposal to quantify a unit of beauty as a 'Helena' after Helen of Troy - being the Unit of Beauty required to launch a thousand ships we will need a new unit of incompetence. I submit such a unit 'The Brown'. The level of incompetence required to destroy a nation, its currency and its entire international standing.
Oh, looked at the UK - they are sooooo Browned.
Oh, look at the England cricket team, they are soooo Brown.
Did you see that David Beckham miss that penalty? He was sooooo Brown.
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I've seen heroin addicts refuse treatment for a fatal infection if they couldn't get their methadone in hospital.
When people are locked into failing ways they never listen: see arrogant big business and the consumer boom.
When the consequences of their decisions becomes clear they don't want to accept the medicine: see undermining the fiscal stimulus and job layoffs.
When the pain of treatment kicks in they blame someone else: see violence in hospitals from the disturbed and drunks.
When someone promises a cost free easy way out they get sucked back in to the problems that caused it: "Don't worry mate, you can share my needle."
Masters of the Universe and urban sophisticates like to pretend they're different or better but they're not.
It would be nice if this story had a happy ending but people procrastinate. They never want to hear the truth so voting for Tory lies is a cheap and easy way out.
The sad thing is people know this...
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I just watched the BBC Six O'Clock news on iPlayer.
Things must be bad for Labour. The BBC reported the news almost straight and with little bias. (The way they did during the early days of Labour's Iraq war).
In the main discussion of the situation, I only noticed one bit of bias. The lack of bias was clearly a bit of a surprise.
Obviously - the report wasn't squeaky clean. At one point they liken Brown's bust to other recessions. They name Lamont as a Tory, but Denis Healey appears to belong to 'no party'.
I didn't notice any cobblers coming from Nick Robinson. Of course Robert 'son of Labour peer' Peston managed to conclude his piece that "the markets bounced back due to the Chancellors speach", rather than welcoming news on Citi Bank or Obama's economic team being announced.
As I say - things must be dire for Labour - if the BBC are largely broadcasting the facts. Who'd have thought it?!
6 O'Clock News
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Well, the master has spoken.
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68 TheHandOfHistory:
"I completely support taxes being raised on the obscenely rich. I'm sure were the Tories in Number 10, we'd be seeing massive tax breaks for the rich and huge tax rises on the poor. Lucky for us, people with morals currently reside in Downing Street."
Isn't it a pity that "people with morals" didn't bother to tax the "obscenely rich" when they were piling up their big bonuses over the last 5 - 10 years?
In fact, those "moral" guys were so busy getting so far up the orifices of business that they couldn't even think of raising taxes, at a time when money was sloshing around in tyhe City.
New Labour was committed to keeping business "on-side". Pity.
But, they (Blair allowed Brown to commit it and Brown forced Darling to see it through) raised the rate of tax on the poorest paid from 10p to 20p.
Do you really think THAT was "moral"?
The apparent cost of rectifying that assault is about GBP 2.5 - 3 Billion.
Tinkering with VAT could have a GBP 12Billion impact.
So why didn't these "moral" guys re-establish the 10p break and increase personal allowances?
That would help people. And the poorest people need money to spend on things to live.
As retailers chop prices to attract trade, it will be impossible to see whether the reduction in VAT has any real impact on the cost of life.
This is a politically naive pre-budget statement.
Hopefully the last from this administration...
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82 TheHandofHistory
I agree with you. Thanks to the fiscal stimulus, I think that now is the time to buy this for the rest of my family as well.
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I now know the reason that they chose "Labour" as the name for their political party.
What they mean is "Labour" - as in the phrase:
"Labour under a misapprehension"
It is now all clear. They have set out (and succeeded) to deceive from day 1.
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The Tories were just want to hand out tax freebies with no guarantee of delivery from business. Finance is just a surface thing. What matters is attitude and I see no great uptake there. The danger is business will just flinch at the challenge, bank the money, and cut jobs anyway. That's what they did during the Thatcher years and there's no reason to suppose they've changed.
By focusing on investment and job creation and retention people will be more likely to create a better and more agreeable outcome. British industry and society is a borderline basket case even after all the positive work Labour have done and falling back now is the last thing it needs. This is why being circumspect about tax freebies, and pressing forward with the Brown agenda and a forth Labour government is needed more than ever.
I haven't seen a peep from the Tories about raising R&D, a long-term attitude to finance, or fair wages. Not a peep, and these people are supposed to be the party of developing business opportunity and everyone's pal? At the first whiff of danger they shrivelled like a sheet of polythene exposed to the flame. Where's the vision? Where's the leadership? Where's the guts? I don't see it, probably, because the Tories don't have it in them. Paper tigers, the lot of 'em.
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82 TheHandOfHistory wrote:
"The economic recession we're in now is as a direct result of greedy Tory businessmen like Conrad Black."
And presumably nasty, greedy businessmen like Lord Drayton, who spotted the opportunity to corner a market just before this government decided that it would commit to a particular product?
Oh, that can't be right, can it?
He's a Labour Minister...
Conrad Black is a Canadian. Pain in the a**e like Rupert Murdoch. But Blair flew to Oz to court Murdoch and his team before the 1997 election.
Being eager to make money is not a Tory preserve.
Just check out Tony Blair's GBP 12 Million over the last year...
You may say he's not representative of Labour. But he provided the face which allowed this adminsitration to come into power.
And 20+ ex-Labour ministers are now engaged with private companies (often involved with areas within which they had ministerial competence).
I don't like that at all.
I would be happy to vote for any party that didn't screw with the poorest part of the population, didn't assume that a moderate income was "rich", and didn't treat the "rich" as a very special breed who need handling with kid gloves.
This PRB is a disgrace.
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#87 fairlyopenlytory,
Running a large country is a very difficult and complicated business. Mistakes happen. It's not easy to decide what bits of the pie to cut up.
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86 Vagueofgodalming
Christ on a bike. Labour has clearly also been spinning a personal line for Krugman's own ears.
Labour will stop at nothing to push the lies will they?!
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Will those who proclaim the answers come forward and say so?
Or does the dust of by-gone years block their ability to hear the truth.
Naive: the action to command the balanced approach or Naive: in the unaction of the completely deflated tories.
I'm comfortable in the knowledge that to do something is better than just to stand-by and watch.
Good will and Good grace are effective and the response to active means, will always over-power the weak and dare I say Naive non players.
As the snow falls, on the hill side, lift up your hearts and remember, its good to do something.
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People forget how big business fought change and how they screamed at the merest whiff that their house price rise would slow. They also forget how Labour has massively redistributed income to the poor via tax credits while the Tories still vehemently oppose a rise in the minimum wage.
If the Tories were so good why do they side with the CBI in opposing corporate governance law, and why don't the wealthy classes who hire accountants to take the strain helps out the poor with organising their tax credits? Perhaps, it's something to do with the Tories not wanting to dilute their power and privilege, eh?
I note, the record of George Osborne is still stuck on trying to undermine economic recovery and almost shrill with indignation that Alistair Darling remove his capacity for cheap and easy tax bribes. If Labour repackage their presentation so people are better educated about the realities and tune assistance so folks in need get their due he'll blow a circuit.
I remember being told by my mother about the formation of the NHS and how people where so pleased at being able to get treatment including, things like free glasses and dentistry. By focusing on economic opportunity and helping folks get their due Labour can draw an immovable line on Tory arrogance and greed. There is no going backwards, only forwards: life, not death.
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#89,
HAHAHA... that's really hilarious! You should do stand up. -_-
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Commentators keep referring to this package of measures as a "big gamble". Is it not the case that doing nothing would be an even bigger gamble and more expensive in the long run.
Another point-The record borrowing is compared with previous records-i.e. Healey, Lamont etc. However, I fear that these comparisions are based on nominal numbers and not adjusted for inflation. By doing so the media is unwittingly (or otherwise) engaging in uninformed scare mongering.
Finally, I am going to smash my TV if I hear once more a Tory politician repeat that they would not start from here. This is useless. The public know that-what they desperately want is a semblance of an alternative solution-only the Liberals seem to be addressing this need. Osbourne and Cameron are treating all this as a Junior common room debate. If they could only spend as much time listening to the pain and angiush of ordinary people as they do in coinning clever sound bites, our country's interests would be better served.
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#85
jonathan_cook
You are to politcal bias what Mary Whitehouse was to swearing and other such nastiness........
Please get yourself a life.
Bill
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I saw Billy Elliot at the theatre on Saturday night. It reminded me of why it is totally immoral to vote Tory.
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84 Charles_E_Hardwidge wrote:
"Masters of the Universe and urban sophisticates like to pretend they're different or better but they're not.
It would be nice if this story had a happy ending but people procrastinate. They never want to hear the truth so voting for Tory lies is a cheap and easy way out.
The sad thing is people know this..."
The sad thing, dear Charles, is that the procrastinating population voted for Labour lies. Well, in truth, most of them didn't, but our peculiar system allowed this obnoxious, deceitful, government to be in place.
Far as I can see, there are just as many well-heeled super-rich ready to give support to Labour as to Tory - or other - party funds.
Whoever thought that a Labour government would snatch away a 10p tax-rate for the poorest?
Was that in the manifesto?
Was it necessary? No.
Could it have been stopped? Yes.
Why didn't Brown think twice before scrapping that concession to the poorest folk?
And why, after so much opposition from the nation and his own party, did he insist that it should be executed by Darling?
Making a minimal tax concession peremanent just doesn't fix the problem that HE created.
Masters of the Universe?
Do you mean the financial organisations that Brown decided should be treated with such delicacy that the over-sight body he created - the FSA - couldn't be bothered to check out why Northern Rock's operation was flawed?
Or bother to check whether the funds they claimed were "assets" were actually worthless bits of paper?
Come on.
This has been the worst bunch of socially suicidal idiots to have been in government during my voting lifetime.
"The world" got it wrong.
Not true.
The USA allowed stupid things to happen.
The UK government could have forced our institutions to explain why a bit of paper saying that "pretend value" was worth anything at all...
I'd offer you a cheque for GBP14BIllion.
Wouldn't you like to know whether it was backed by some real funds?
Sorry. Forgot. You're into computer games. So pretend stuff really does exist....
Well it must, if people can get divorced because a couple of atavars get too excited.
What a pity that this whole sorry bunch couldn't prove to be atavars.
At least, when we turn off the PC, they'd just disappear.
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99 TheHandOfHistory wrote:
"I saw Billy Elliot at the theatre on Saturday night. It reminded me of why it is totally immoral to vote Tory."
Forgive me.
I thought that Billy Elliot ended up dancing in a massively state funded theatre, attended and largely paid for by those nasty capitalists.
What the hell has culture to do with parties?
Are you saying it was immoral to have working class people doing really good stuff because there could be opposing "class-warriors" supporting them?
That's just garbage.
The whole "class" stuff is garbage too.
If it wasn't, Labour would have rejected the couple of million donation from Lord Sainsbury.
I'm really a-political.
But I thought that Billy achieved what he desired because he wanted to, fought for it and eventually achieved it. That sounds like the sort of self-help, supported approach that characterised the Tory philosophy.
You can. But it's going to take your effort.
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Now Nick, if I were you, and I speak as a friend, I'd start cosying up to Dave right now, and even (aaaargh!) Georgie-Porgy,because they will be your new masters soon, soon, soon. And Auntie Beeb will be due for a haircut, mark my words. That should save a billion at least.
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Guess who...
"When people are locked into failing ways they never listen: see arrogant big business and the consumer boom."
For goodness sake, we all know that business can get out of control.
That's why we elect governments who can contorl them.
This lot hasn't done that.
Consumer booms are really quite OK. Unless they are funded by credit.
This lot didn't want to control credit.
Every transaction attracted some taxable element. To justify a "growing economy".
Rowlocks.
Brown was the credit-controller in chief.
But he never, ever, tried to rein it in.
That would have stalled the fatuous claim that the UK had never had such a prolonged period of growth. Even if it was based on a bubble...
Didn't it make you (yes, even you Charles) want to throw up when the Chancellor/PM claimed there's never been such sustained growth?
Well, yes, I suppose if you ignore the Victiorian era. That was at a time when banks did what banks should do.
Brown detached management and oversight way beyond what Thatcher had imposed.
All that "not me, folks, it was nasty US people who dun it" stuff has no basis in reality.
Think bubble - live with it.
Don't blame people who didn't like it.
But just carry on, imagining that real people with real income/expenditure issues will be really grateful that you have managed us into debt for our kids.
In the world of the blind, the one-eyed man is king.
How true is that?
By the way, mods, I've checked and there is no rule against this posting.
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I've commented on the Daily Politics Blog and won't repeat it in depth here...
In a nutshell, I think Labour have left us in a weaker position, we're not well placed to suvive any further crisis and the UK will be Bankrupted even more quickly.
Credit to them for some big, brave decisions, but they were also the wrong decisions.
Osborne's view is the correct one.
I hope somebody will put forward some sensible amendments in the debate on the Budget speech...
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All Hail Darling Brown, The blessed fornicators of GB!!!
we will take longer than their optimistic forecasts to be rid of this millstone.
I'm all for treason charges to be bought againsts the Labour party.
THey have ruined us.
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The country going (gone) down the pan.
Trillions of pounds in debt.
People losing their homes.
The pound at it's lowest ever
Businesses going to the wall etc etc.
Whre is our New Business secretary?
The hero brought in, to help sort out this financial disaster.
LORD MANDELSON IS SAT SULKING IN A CORNER.
WHY?
BECAUSE HE HASN'T BEEN INVITED ON TO STRICTLY COME DANCING.
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I can't help thinking that the VAT reduction is rather like benefits.
If you don't take benefits up, filling in reams of paper, you don't get the benefits.
Likewise, if you don't spend on VAT rated items you don't get the somewhat dubious advantage of the VAT reduction And hence the government is not actually putting money into the economy.
For lower income families and pensioners the main expenses are food and energy for cooking and heating. And these are at zero or virtually zero VAT.
Most families will also put these first before spending on non-essential items.
So I really can't see how the VAT decreases is going to reflate our economy.
On a personal note, we have a small mortgate. Our mortgage repayments have reduced by about £100. With reduced food costs, very environmetal, cheaper methods of heating and cooking (woodburner and cooking in bulk on Economy 7), and reduced monthly investments (due to stopping direct debits), I think we ae about £280 a month better off.
So what will I do?
Easy, pay off our mortgage more quickly thus helping HBOS get more money in its coffers, since the interest on the mortgage is much higher than I can get in a bank account (all cash ISAs taken up).
A 2.5% reduction in VAT will mean almost nothing to most people. In fact, I doubt if all £12.5billion will be taken up.
And the in 2011 we will be taken to the cleaners by the tax man.
What a way to run a country.
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The best way for Darling to have put money in peoples pockets would have been to have reduced energy VAT from 5% to zero. Everyone is affected by these costs.
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Re my #16
May I quote Pericles:
'the worst thing is to rush into action before the consequences have been properly debated'
May I say that of course parliament ought to debate the Pre-Budget Report, which was not a report at all but a budget. For anybody to say that it was not a budget is, to put it mildly, mad, or insane.
There must be a debate and there must be a vote. I'll tell you why because when this goes completely pear shaped I want to know who was in favour of this madness, just like I want o see who voted for the illegal war against Iraq and who voted for Gordon Brown as Prime Minister.
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Let's face it. The Tories' alternative strategy (such as it is) is only a political strategy. No one really know what is going to happen, we just have to wait.
If the Tories tell AD that he is right then if he fails they have no come back. So they have to disagree and have some vague alternative so that they can say, "If only you had done it our way." The point is that even if AD had followed the Tories' strategy, they would have had to come up with an alternative to show that there is a difference between the parties. Politically the Tories want AD to fail, otherwise they will not win the next General Election.
But here is the problem for the Tories and all Gordon haters. The word we are hearing all the time is CONFIDENCE. If you talk down AD's plans too much confidence will stay low and the recession will be deeper. This will achieve Gordon's demise. Job done. But we will all be in a deeper recession than if we had done what we could to build up confidence ie hoping AD has got it right. More people will be unemployed, debt will be higher if we doubt too much.
Are we trying to quickly get out of recession or are we trying to get rid of Gordon? The battle lines have been drawn and by the time of the General Election they will be too firmly set to change.
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The government has got it wrong -
Externally it would be better to secure HMS Britain and wait until you can see which way the tides are running (I.e - the patern of trade) and thereafter set the sails by way of investments;
Any sailor will tell you this rather than expending all your fuel going in a direction where there may be no harbour;
We are only a small nation we do not set the markets in commerce but react to them;
However within our own borders we should be investing to reduce and avoid imports and to therefore increase self sufficiency in all commodities and products from food to energy. We will therefore need to venture into dangerous waters less frequently;
When the tide turns we will therefore be ready to take advantage.
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never has the phrase going for broke been so apposite
They know that increasing taxes/cutting spending will not only be unpopular but bring many other grievances about Nu Labour rule to the surface
people will be very unhappy indeed about paying more taxes when so much money has been squandered in the last decade
think of the iffy PFIs that really cost far more than traditionally financed projects of which the farce on london underground is jsut the biggest
or Network rail which consumes vastly more subsidies than BR ever did, delivers scarcely better services despite fares being about 15% hgher in real terms than in 1995
think of the 100000s of public sector jobs created which very often add no wealth to the economy the anti obeisity/5 a day/anti smoking/ sustainable development coordinators all of whom could be fired without anyone beyond their immediate families caring
Or the council Bin Stasi who depite being paid by council tax payers make council tax payers lives a misery reflecting councils who are determine to grab ever more money and do ever less in return
think of the thieving MPs who have helped themselves in exchange for far worse represetation
or ID cards that will cost billions and cause everones data to be stolen but which they plough on with regardless
or the foreign wars which have been a disaster cost billions but which have affected the political careers only of those who opposed them
all the above are actions of Nu Labour which are entirely of their own free will which they chose despite vehement and well argued opposition across party lines which owed much to the fact that they were a lousy deal for taxpayers
a harsher economic climate will raise resentment against the above to new heights no wonder Darling wants to defer the pain until later
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Nick,
everybody seems to be sayig that the next election will be won or lost over the economy. This is sad, there are so many other issues but try this.
The demographic time bomb is about to go off big time. I have said before but it needs repeating, the babies born between 1944 and 1949 will be retiring over the next five years. A huge number in comparative terms.
Their incomes will fall hugely as they go from hard working to a well earned retirement. One main problem will be the women who have made very little allowance for their retirement other than to have got married to a man who has supported them throughout their working life.
Many men are going to have to explain to their wife that they will have to cut back on their spending, the money just won't be there. Furthermore, many women will get really fed up with having their husband around the house all day whereas previously he was at work earning money to support the family. He will see exactly how little she does, other than the washing, or maybe a little cooking. Caring for the home was not very efficient.
So, as the time bomb goes off there are serious repercussions, both financially and socially. I mean Harriet Harman and the Womens Institute now wanting to monitor the papaers for adverts for massage parlours, what else is a man to do with all his time?
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Doomed Bankrupt Broke.
"Last one out Switch Off The Lights"
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I think its interesting to note Darlings words about the VAT cut. He HOPES that retailers will pass this cut on as soon as possible.
What if they don't? What's he going to do then.
Plus think of the overhead involved. Prices have to be adjusted downwards now, with a one off cost, then put back up again in a years time, with a one off cost.
Have these costs been factored in? Bet your life they haven't. Meanwhile repalcing the VAT cut with extra taxes on fuel, for example, gives nobody any benefit, and in fact worsens the impact on business.
Since this whole exercise was dressed up as a way to kick start the economy, and attempt a recovery from recession, it has failed before its even got started.
As another cynical attempt by this useless government to pull the wool over our eyes yet again it has succeeded, for a while at least. I give it a week before some wheels start coming off, and we require more emergency stimulation.
I wonder exactly how many people in this country confidently expect to still have a job in 2010, and are happy about how much their cost of living is going to rise, and who will put an x by the name of their user friendly local Labout MP in the election?
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#110
Let's face it both Labour and Tory strategies are political. It is just that the Labour one is formed from desperation whereas the Tory one is formed from the expectation of having to sort out the mess they will inherit in 2010.
If anyone believes that the public at large have confidence in the AD proposals then they must be living in a parallel universe. We are all deeply cynical about Labour's ability to sort out the mess they have created. History is likely to be repeated yet again.
When I heard about the 45% tax band to be introduced I could only imagine that AD was wearing a titanium 'box'. Why do this now if it hadn't been necessary in the last 11 years? It raises a negligible amount of revenue so is just a gesture.
And surely no one has forgotten that wealthy people manage their tax affairs to minimise their tax liability. Lord Cashpoint comes to mind in case anyone has forgotten. I dare say that other Labour fat cats, like Lord Sainsbury with his £2m donation just the other day, also pay tax at a far lower effective rate than the average worker.
I didn't have high expectations before the pre-budget report and even then my optimism, such as it was, has been dashed by this shambles of a plan to rescue the economy.
I realise morals and principles are not to be found in Downing Street these days, but come on, how low can this current Dad's Army go with Captain Mainwaring at No. 10?
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I wonder if Studs Darling knows which businesses are going to improve during the next two yeras to justify his self serving prediction of 1.5 - 2 pct growth in 2010?
Assuming it will grow is the justification for some of the measures announced, even the horrendously high borrowing figures. What he's looking for is a 3 percent turnround, given that next year is totally negative.
Since the bulk of our growth in the past 10 years has come from banking, and we don't even want to think about that any more, exactly what is going to give us the growth?
Don't misunderstand me. I desperately want us to grow. Any half sensible person would.
Unfortunately the politicians are living in a surreal world. They, particularly Brown, can't admit to the truth, and therefore can't really address the isues, and use this sleight of hand approach well favoured and used by Brown during his time as chancellor, of concocting a future growth figure, assuming it is real, and using it as the base for other calculations.
This will all end in tears. Ours.
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Before posting I scanned the incoming comments: good comment boilerbill. It said a few useful things and provides a good lead into my own comment:
Economists have been telling us over the past few weeks that we're in a situation where the normal rules don't apply. There is a saying in Go that "Strange things happen at the one-two point". Here, the normal heuristics of play break down and novices are often confused by this.
Sensei's Library comments: "The one-two point is a critical point in many life and death problems. The difference between living or dying locally is at least 20 points. It is something that cannot be taken easily. That's the difference between winning and losing, or losing and losing badly."
How much of this situation is solved by intuition and paradox, and how much by calculation and planning is anyone's guess. I've commented, only half-seriously, that Gordon Brown is a Tao master. Meanwhile, the Tories are still trying to calculate and position like they're playing chess.
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Surely time for a general election now. A government bereft of ideas spending more than it has. Oh dear is this not how the whole sorry mess started, except that it was us the puplic spending too much.
Has the clown in number 10 and his puppet not worked it out yet ,you put up the price of fuel then everything else goes up it is all carried on a lorry sooner or later. Just exactly how much of the price of fuel is tax Mr. Darling 80p in the pound or more.
Left in charge that will be the top rate of income tax to before long, I am old enough too remember it being 75%.
Maybe the tories are little different, but it will be the feel good factor again like the arrival of Thatcher and Blair.( Blair only for the fools who belived there was was some substance behind the idiotic grin.)
Gordon you have taxed this country to a stand still and you are not even elected to the office you hold, time to go now. You Darling and Blair have nothing to fear from your failed plans, someone else will have to sort the mess you left behind.
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All hail Mighty Labour...
We are one of the most indebted nations on the planet, heading for all time record borrow above 53% GDP.
Our government borrowing and liabilities total more than 100% GDP. The national debt is heading for 1tn pounds.
Our personal indebtedness is over 1.5tn pounds.
They've destroyed the best private pension provision in the world and made it into one of the worst.
Sold gold at rock bottom prices.
Falling out of the Top 10 most productive economies.
Sterling in the toilet.
What do we have to show for it?
A wrecked services industry, the engine room, stalled.
1,000,000 manufacturing jobs lost.
A load of new schools and hospitals, mortgaged through PFI, another 30 years to pay for them and another 200bn to find.
Educational standards grade inflated, Universities that charge fees. Pupils with more rights than teachers. Special schools closed. All must win prizes.
We own the worst bits of two irresponsible banks and shares in others, depreciating assets turning into liabilities every day.
A massive civil service, nearly ONE MILLION added to the payroll since 1997. Their pensions are unfunded, there is no pot.
£35,000 for a smoking cessation officer for prisons is just one example.
Minimal gold and cash reserves, nothing for a rainy day.
Labour have failed to reduce child poverty as promised.
Our society is fragmented, violent crime has increased to levels way above 1997.
We have parts of the country with lower life expectancy than North Korea and about as much aspiration of life.
Hospitals that kill you with infections that they promised to sort out.
We have a police force mired in red tape unable to police and spending their day doing paperwork.
A demoralised armed forces, starved of equipment, falling recruitment numbers and sent to fight overstretched and under-equipped.
A government that will readily send them to fight but will not honour the military covenant.
We have local authorities using terror legislation to fine you for leaving your bin lid three inches open. They put CCTV cameras in parent's bedroom.
But they can't stop a baby being tortured to death.
And they'll whack up your council tax above inflation every year.
We have criminals using human rights legislation to sue their victims.
Immigration is still out of control, annual net immigration at 250,000 a year. Unwilling to deport. In fact, actually letting out convicted murderers & rapists onto the street to commit crimes again.
They want more databases and more intrusive information. But they can't keep our data safe, every child, every parent's personal details are still out there. A treasure trove waiting to be found.
They talk of the environment but dither over our energy security.
They take their money from anyone and they think resigning twice in disgrace is no big deal.
They wonder why they are trusted, yet break the law and think it's not worth resigning over.
They steal their policies, refuse to debate and then play the personalities of the opposition.
What do we get?
Hard working families are now harder working families to keep their heads above water.
Partisan tax cuts to bribe their core vote when the whole country is looking for leadership.
Falling social mobility, the poor stay poor and poverty of aspiration.
A generation spent just doing nothing but re-paying this obsolete political idiom, paying back being lied to, misled, spun into submission.
The last Labour social experiment. Another failure in engineering society, just like all the ones before it.
Their defence?
Well, the Tories were a bunch of rotters in the 1980s and 1990s.
Still, things can only get better?
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I for one would just like to see all the government apologists on here justify AD's tactics without mentioning the Tories, or the rest of the world.
Let's forget for a moment that Labour have previous when it comes to economic mismanagement. Hell, let's even forget the fact that they're the reason we're in this mess at all. Can you actually justify this PBR on its' own merits and keep a straight face? Or is it just your blind hatred of the Tories that makes you agree with any old nonsense that Labour choose to throw at us?
I'm just staggered that it's come to this. I'm stunned that any government would openly practice a scorched earth policy just to spite the electorate and the next government because they were so sure of losing the next election.
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92 TheHandOfHistory wrote:
#87 fairlyopenlytory,
"Running a large country is a very difficult and complicated business. Mistakes happen. It's not easy to decide what bits of the pie to cut up."
Missed your gem.
Shame really.
There are lots of people who post here and seem to believe that political allegiance is part of their DNA - rather than the outcome of consideration... That is sad.
If and when I vote Labour, my basic premise is that a considerable amount of attention will be placed on the poorer element of society.
Of course the national pie is difficult to slice. I'm not a "re-distributor" by nature. But I like it when governments get out of the way as much as possible, so people earn - and keep - as much as possible.
That's why I applauded Brown when he introduced the 10p tax band. And dislike the stupidity of withdrawing it. And I really don't like all that "tax-credit" stuff that puts a burden on people to claim back money they should never have lost through taxes.
It's just been a bit hard to take that a Labour government has been so close to big business that it couldn't bring itself to regulate it properly.
Especially the finance houses. Where was the oversight? Why were companies able to wave a bit of worthless paper and say these were "assets"? Bad regulation.
FSA was imposed to replace the previous Thatcher/Major regime. It didn't do a decent job. Had it done so, our banks would have had far, far fewer problems. So we wouldn't be so badly placed.
Brown allowed a massive explosion of credit. That had nothing to do with US or any other nation's problems... just a local issue. He could have, but didn't, stop it.
How on earth did that help the nation?
I don't much like the tone of most political parties. Policies don't mean a thing. What you DO means something.
I strongly believe that this administration has been crap at delivery.
Anyone can spend other people's money. Doing it with constraints is what I look for in governments. That's the only way you and I get value for the taxes we pay.
Is that a nasty, Tory, position?
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#15. The level of borrowing won't leave the Tories with scorched earth but with a get out of jail free card for one and a half parliaments. First term governments, unless they make a complete pigs ear of it like Heath, get the benefit of the doubt from the electorate. Assuming the Tories win in 2010, they will inherit massive debt which the PBR yesterday acknowledged won't return to surplus until 2015/16, they will make some moves to reduce borrowing, dropping ID cards etc, and the economy should be recovering by the early part of their first term. In 2014 another election is due, Tory slogan could well be, "We're making a difference, give us more time to complete the job," if they are able to get the books back into the black before 2015/16 it will look like they've pulled off a miracle and the electorate will back them for it. I think yesterday Labour has put itself out of power until at least the mid-2020's.
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I know I've said this before, but it's worth trotting it out again now we know some of the numbers involved.
This fine government of ours is going to borrow extensively for an infinite number of years in an attempt to invest, sorry I mean spend, our way out of recession.
So this borrowing will have to come from somewhere.
Can we, as individuals, come up with this kind of money?
Can our investment managers (pension funds, life insurance companies, investment trusts, ISA providers) come up with this kind of money? Bear in mind when answering that the value of their existing investments has shrunk dramatically in the last few months because of the stock market collapse, and interest rates are now lower.
Can other governments provide us with loans? Bear in mind that all other governments are in the same boat as us and, strangely enough, they want to borrow as well.
Can the banks provide us with the loans? These would be the same banks, like Citibank yesterday, who are having to be bailed out with government money. Oh, what am I saying, its not government money, its our money.
Anyway, yet again, when you look around the only possible providers of the loans the government needs, and desperately needs, and will need for some time, they are not in a position to provide the money.
The government is deluded and we are being conned, again.
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What fiscal stimulus?
There isn't one.
There is an awful lot of debt that would have been there in the first place; that is the lie of this budget.
It's an admission that things have got completely out of control before they have even tried to spend any money because the economy has hit the skids and tax receipts have collapsed. But is was wrapped up in an hour of telling us how nadly off the rest of the world is and how a few benefit claimants are going to get more money.
What are they doing for the housing marekt?
What are theydoing for the building sector?
What are they doing for the auto industry (and we are Europe's largest manunfacturere of cars)
Squiff all.
When will reporters catch up with the fact that this is an announcement about how bad things have become without a stimulus.
Call an election
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Yesterday was a cynical betrayal of tomorrow's children.
They are condemned to a debtors prison so Labour can buy short-term favour at the polls .
Most of the "help" is targeted on non productive sectors i.e. client voters
and very little on real productive people .
Debt and borrowing are not a serious issue if we are left with assets in return but future generations will have nothing to show for this prodigal action .
The lesson of history is that Labour never learn the lessons of history
It is also a great betrayal of an article of faith that this would be a "land fit for heroes"
There is nothing heroic about the Government .They crave the ermine and cash and power and need just four more years to completely erase our heritage
Shame!
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Nick,
just heard the report from Afghanistan that some members of the Taliban have been arrested for throwing acid into the faces of some young girls.
Now the President Karzai is quoted on the Today programme as saying that these people will be executed. Well excuse me, what sort of country are we meant to be occupying.
In my book we do not extradite anybody to a country with cpaital punishment, yet we support by the deaths of our soldiers a government which wants to hang people for throwing acid. I don't know which is worse.
I think that it is time for us to withdraw and stop any returns of asylum seekers in our country. Milliband, who is on a visit, must say to the President, you will not execute these people, they will be given a proper trial and if convicted they will be inprisoned, and not executed.
Milliband should also impress on the Ameicans that no British soldiers, of whatever type, will ever be involved in the identification and summary execution by Drone dropped bomb, anybody, without a fair and open trial in front of a jury.
The next election will not be just over the economy, it will the wars as well, the forgotten wars.
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I'm terrified. If these latest growth forecasts are anything like the rest of the government's forecasts, the UK is in big trouble.
If investors don't want to buy these highly didgy bonds when other, more creditworthy countries are offering their own bits of paper then....what?
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Nope, pockets still empty. Until the greedy energy companies are nationalised and prices reduced, money is being poured into a leaking bucket and wasted. The problem is not going away. Energy companies have a lot to answer for - their hikes destroyed peoples ability to servfice debt - taken on during GB's period of stability.
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94 Derekbarker
The answer is fairly straight forwards.
Remove the man who will not own up to the mistakes on his watch and who would rather blow billions at policies that are designed to protect his political position, rather than improve the countries economic fortunes.
Thus step 1 in any sensible plan is the same:
1. Remove Gordon Brown.
It doesn't really matter which party comes up with a plan. Step 1 for all parties, including Labour, should be:
"remove Gordon Brown".
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I keep hearing what we shouldn't do, what everyone is doing wrong. Does anyone have cogent suggestion for a strategy to deal with the two big issues. A global ecoonmic crisis and world that's running out of resources/ overheating. I can't escape the feeling that we are arguing about who left the taps on as the titanic sinks.
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#124 herb
Infinity seems to be a shrinking concept - it seems that for you it means any number you cannot count to on 1 hand!
Wasn't the point that, unlike the previous Government with their pre-1992 fiscal stimulus, this one has admitted that there will be tax rises in the future to pay for said stimulus and provided detailed plans for what taxes they will increase?
#125 goblin
But that's a good thing no? Isn't your belief that we should contract fiscal policy, attempt to balance the budget, and enjoy the constructive impacts of the icy winds of a deep recession in re-shaping our economy? So isn't it great that there's no help for the sectors you refer to, and a relatively minor fiscal stimulus?
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Does Alistair Darling have white hair and black eye-brows, or is it the other way round? I forget things sometimes
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I've decided to become an anarchist.
Where do i join!!!!
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This was done on purpose by Labour to have a go at the Conservatives.
Fact is for the decade or so this shower have been in "power" they ignored what was happening. Blair jet setted about the world showing off and trying to earn a Sainthood.
I was alarmed for years at how people managed to use money that was not their own to have foreign holidays (some three or four a year), designer clothes, home improvements (designer kitchens they never cooked in as they ate out or had takeaways), running to the Dr for antibees every time they have a cold costing the country millions, I could go on......RANT!
However, now the banks have been called to account for allowing this to happen and Herr Brown (the Chancellor during said period) has seen a way to, he thinks, boost his image. What a mucking fuddle.
And, the Tories will inherit the bill in a few years time. However, if they, the Tories go along with Boris' niaive thinking that 400,000 illegal immigrants can stay and pay tax (that's a laugh, they mostly work on the black economy, I am surrounded by them here in NW London), then the BNP will get more control. FACT.
I want the Conservatives in and hope, trust and pray they have and are learning fast. They are our only hope.
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131. The world does not appear to be overheating from where I stand. Merely, the cycles of nature change from time to time. It's just some silly boffins earning a living out of it - a lot of them don't have a degree in common sense.
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133
White hair and a black heart ...... if you can find it!!!!
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"Well love, looks like it's time to buy that 1,000 pound TV, we'll save 25 quid. Or do we pay the mortgage?"
In touch as usual 17.5%, 15% makes no difference, another pointless gesture.
Food No VAT
Childrens clothing No VAT
Hard pressed, middle income families will see no difference.
In addition this morning on sky news there was an opinion poll,
Will the altered VAT rate, encourage you to spend?
90% said NO!
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There appears to be worldwide support for Mr Darling's proposals, particularly amongst informed opinion. Those against? halve-baked politically illiterate Tory bloggers.
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Nick,
The problem with the PBR is that it is based on a dramatic revision of the previously upbeat forecasts. No one believed the previous forecasts, but we are being asked to accept these revisions at face value. Without worrying overly about how we got here, is it realistic that the economy will recover in the timeframe suggested by Darling? If not, what does this mean for jobs and for tax revenues? How long will the recession really last, and which taxes will need to go up to fund the deficit? Will this prolong the recession even more?
The only viable outcome from the current situation is that jobs will have to go in the non-productive sectors to allow the productive areas to grow. By definition unemployment will have to rise. In effect we will have a rerun of the late 1970's / early 1980's. It is not a pleasant thought but it is the future that we have had constructed for us by the policies pursued by our politicians of the last 10-15 years.
If my assessment is correct, on what basis are Darling & Brown seeking to be re-elected? They should hang their heads in shame and go now.
All the best.
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Just been having an in-depth look at our finances and how we are adapting to the current climate.
Paid off the remaining loan on our car three weeks ago, saving £270 per month at 6.5%.
Am roughly £280 a month better off from savings on mortgage reduction, heating (acquired a woodburner instead of oil), more efficient cooking methods (batches by Economy 7).
We buy all food and wood locally thus helping the local economy.
Use all offers - 25% off wine in Tesco last week - informed by an local grapevine.
Use all possible vouchers.
Use a Tesco creditcard to build up points. Wife travels overseas so bills provide vouchers - FOR CHEAP WINE.
Airmiles will help with holiday costs.
Drive efficiently and plan journeys, reducing fuel costs and increasing servicing intervals.
Use cash ISAs and internet saving accounts to maximise interest.
So what to do with the money!!!
Pay off the mortgage even more quickly (increase the monthly over payment from £200 to £400), and save for the bills that will flood in in 2011.
Will we go out and spend?
NO. Not unless there are large discounts on things we REALLY need.
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Gordon's house of "credit" cards has collapsed.
What is shocking is the extent of the collapse, and in such a short period of time.
Let's not waste time comparing our situation to other countries. Let's just face up to the fact that the income, that this government took for granted in its spending plans, has dried up.
It is as simple as that. There is no money coming in, and now we have a huge gap in the finances.
This gap is here to stay, as the government admitted yesterday. They are responsible for this, nobody else. They didn't plan ahead adequately, and that is glaringly obvious.
When it comes to election time we all need to bear this in mind, and remember the pain and anguish of the past few years. It's not just yesterday's debacle, but all the things that have been inflcited on us since 1997 which palpably have not been used properly, and certainly not for the purpose for which they were intended.
The raid on pension funds tax credits, the increase in NI contributions, the monkeying around with tax bands and rates, the erosion of the tax free allowances, the abysmal 50p pension increase, the cynical manipulation of inflation measurements to hold salary increases dwon, effectively denying the real rise in the cost of living.
All of these things need to be taken into account. We were cosntantly told that this made our economy stronger and better. the money's been taken, spent, and wasted. And they want more.
The election will sort them out, but it won't do anything to repair the damage that they have caused us, and our children, and our children's children.
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Prudence is dead!! But there was no need for George Osbourne to take out his personal grief on the house of commons, he'll just have to accept it, the poodle is gone now.
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Basically Brown wanted a Socialist state and we are getting one. State owned banks and subsequently state owned industry by default. Huge taxes for the rich and state jobs for the poor. If, perish the thought, Brown wins the next election I will know that our home, as a family, lies abroad. That will be a hugely sad day. If the Titanic is sinking you save your family.
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#131 In regards to the overpopulation issue, which in turn has an effect on the environment/natural resource issue too, there are two simple but effective tactics that ought to be employed without delay, that will also help economically in the long run.
1. Abolish all welfare and benefits for all but the first-born child in a family. This will slow-down the birth-rate and make it more likely that families who choose to have extra children are able to afford them, since there will be no financial incentive for them to be there.
2. Offer a tax-free sum of £2000/£3000 or so to anyone volunteering to be sterlised under a national programme. This will pay for itself in a few years and in the long run save billions in welfare payments, since invariably the first people in the queue for the money will be those who we shouldn't be encouraging to breed anyway. Closely followed by couples who choose to not have children who are always overlooked by the government.
Regarding the economy, there are so many things that could be done without a reckless spending splurge with money we don't have borrowed at rates we can't afford. Let's think.
- Since the banks now owe the public a favour, get them to refund all their illegal bank charges to their customers from the past 3 years. The fact that they are still allowed to charge illegal penalties despite the regulations preventing them from doing so shows the inherent arrogance that runs through the industry. And since the banks are now only staying afloat because of the British taxpayer it's about time we saw some returns. This one action would be more of a fiscal stimulus than anything announced yesterday, and all it involves is banks returning money to the public that they stole off us illegally.
- Scrap the insane ID card scheme.
- Scrap the 500,000 public sector non-jobs.
- Abolish all the ridiculpous QUANGOs.
- and so on...
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Brown couldn't run a pie shop.
Darling couldn't get a job as a bus conductor (ex transport convener Edinburgh).
Yvette Cooper talks like a robot and clearly hasn't a clue (trashed by Cable and Hammond last night).
If I hear the expression "exceptional times call for exceptional measures" I'm going to puke. Everything the Nu Liebour aparatchiks say is scripted.
Nick Robinson:"Lovely day Prime Minister.."
McWaste: " 50 quarters of uninterrupted growth...."
Nick Robinson: " No, the weather Prime Minister....."
McWaste: "No more boom and bust.."
Labour have trashed the economy and left us with hugely underperforming public services.
They have squandered the inheritance received in 1997.
Blair lied to us about Iraq. Brown lied to us about the economy.
It's time for a new government.
Get on your bike Broon and take your failed project and its spinmeisters with you!!!!!!
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135 - sorry to get off track a little - but you have mentioned Boris - his frankly amazing comments of the weekend have become somewhat lost in the furore over yesterdays PB speech...
What (135) are your views on Boris's weekend statement - I would be interested to know from a Tory supporters perspective.
I cant really fathom out which od the following it is?
(a) a Boris gaffe?
(b) an attempt to close once and for all the "piccannie" era - to show himself to be broadly a multi-culturalist
(c) a very clever and subtle pitch for the Leadership of his Party - on the grounds that whilst Cameron increasingly looks one-dimensional and slow to respond to anything - put simply out of touch with world events - Boris again evidenced a suprising pragmaticism and ability to "go with the flow"....
My gut reaction is that it was planned and pre-meditated more in line with b and c - and certainly not a gaffe!....
On to the PBR - if unlike the Tories the Labour notion was to do something,my view is it is a partial success I'd give it 6/10 - however,there are some things he could have better spent £12bn on than a VAT reduction - i.e targetting that sum on increasing personal allowances for those with incomes under £30k - for increased spending on tax evasion and benefit fraud.
Credit where it is due on help for pensioners,child benefit (but still he has'nt address the fact millionaires get it too) and in the short term small businesses.
However,I feel with VAT he is blinkered by "immediacy" but will be plagued by in real terms both the lack of take up from some retailers and the fact of the cost to small businesses to implement it...
Intersting to hear the likes of James Caan and Will Hutton praise the measures...
Finally-George Osborne - in terms of rehashing old ground,stating the obvious and acting ANGRY MAN = world class = well done - In terms of taking the opportunity to outline Tory plans and the paucity of Darlings ability to gamble massively on certain areas - a dismal failure.
I and everyone I have spoken to believe Ken Clarke would have murdered Darling yesterday rather than ultimately be overshadowed by Darlings very clever put-down and Cables continued political and economic excellence!
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Oh what a clever strategy! The chancellor has increased the income of shopkeepers by 2%, which means that they've got more spending power... so we can pay our way out of the recession!
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Can't believe the miss guided optimism by some of the bloggers here. Talking about snow, and it'll all be alright.
Alistair Darling this morning stated that he was looking to borrow, another Billion Pounds or there abouts.
Or there abouts? When you are talking that amount of money. Or there abouts seems a little frivilous.
I think we should be very worried.
But hey, at least the ID cards have started, so that white elephant has started it's romp into the china shop.
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#139
http://www.renegadeeconomist.com/
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139:
The original proposals of a few weeks ago to ease the banking crisis possibly but yesterdays budget measures? Quote me some concrete examples of world wide support for these. Most of the reports I have seen have rather doubted that they will work and that projections for growth are somewhat optimistic.
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So, putting aside the mid- to long-term (assuming Nu Lab are even in power come 2011 - a big 'if' there), the urgently needed 'financial stimulus' boils down to this.
1. 2.5% of VAT on selected items. (But not until 1st december, so forget about business or shops getting any boost whatsoever until after the weekend).
2. An increase on petrol/diesel for everyone - which, unlike VAT, cannot be reclaimed by businesses and adds costs across the board.
What were they thinking? (Assuming, of course, that anyone was thinking and that this is not just the 'Law of Unintended Consequences' coming in to play once more).
So, it looks like Britain is indeed "uniquely placed" to face the recession - if 'uniquely place' means draped over a barrel ready to receive a very dubious 'financial stimulus' in a very painful manner.
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Slightly off topic, I know, but something that helps to undermine the Prime Minister is his own poor behaviour in the House of Commons. It is only just now that I have been able to see in full Osborne’s response speech to the PBR, and almost throughout it, Brown was smirking, laughing, pulling faces, giggling with his neighbours on the front bench, seemingly doing everything that he could to appear like a naughty schoolboy – the worst kind, the kind that is confident that he is going to get away with something.
I do appreciate what his game is – he is trying his best to make the Tories look, not merely wrong, but utterly irrelevant. That seems to have been one of his themes for a long time. But in truth, when Osborne was delivering a surprisingly withering critique of the Government’s part in how we have got into the parlous state that we are in today (in the main, an accurate critique too), Brown just looked like someone who both didn’t care and was encouraging those around him not to care either.
Brown has often been portrayed as a man who is motivated too much by his shallow, tribal hatred of the Tories and too little by his desire genuinely to do good for the nation. That may be true or not. But his behaviour seems to indicate it is true.
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MANY SMALL BUSINESSES WILL ACTUALLY BE WORSE OFF.
Thousands of small businesses on the VAT flat rate scheme (FRS) pay a fixed rate of VAT to the Inland Revenue. In many cases, these rates have not dropped by the full 2.5% reduction and result in small businesses being worse off. This is the opposite of what the government says it’s trying to do.
For example, I run a small business in the IT sector that has a handful of employees - before 1st December we charged customers 17.5% and paid the Inland Revenue 13% on the flat rate scheme. This was a 4.5% saving that helped the service industry compete with low cost competition from countries such as India. After 1st December we will charge customers 15% and pay the Inland Revenue 11.5%. The saving is now 3.5%. This is actually reduction of 1% at a time that the government is saying that it’s helping small businesses.
If interested, more details on my blog: http://www.andrewgill.com
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What a load of old cobblers is spouted here by Government apologists!
Could any of you please tell me where you have got this notion that the Tories would stand aside and do nothing?
As has been said in other posts..many of Darling Browns' measures in the PBR are little more than Tory proposals,slightly repackaged to give the illusion of originality.
Plagiarism,as we all know,is something this Government are renowned for.
Blind support and idolisation of a failed and bankrupt Government is not how democracy is supposed to work.The whole idea is not that one has to mindlessly support only one particular party(probably because Dad told you to)...but to have a mind ,and vote for whoever you think may do the job better than another.
That's it...this is not a game of football..it's the future of everyone ,and it's about time some here realised that.
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#146
Gordon Brown may not run any pieshops, but he's certainly keeping them in business...with the Labour parties financial incetives to encourage banks to lend to small businesses, I mean.
Still, pie shop or no, I doubt Gordon's going to eat the British economy
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I have been sat in the office this morning listening to others chit chat.
There are many here who ordinarily would have gone along with the Labour spin and been taken in by the bribe and voted Labour.
The mood has changed, EVERYONE to a man has seen through the spin.
Labour are well and truly doomed whenever they call the election. They may even have condemned themselves to never achieve power again.
It would appear in 97 people were prepared to give them one more chance, and as things didnt appear to be going too wrong they voted to keep them in at subsequent elections. But they have all woken from their slumber and they have noticed that the emporer is naked.
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I think it's high time that we put to bed this erroneous argument propagated by Darling and touched on by Vince Cable that The Conservatives proposed to sit on their hands and to do zilch about the current credit crisis. They've gone to some length to set out what they would have done. They're not in Government so they can't act upon it. The onus is on Alistair Darling and Gordon Brown to come up with the answers. Whether they have been successful or not remains to be seen but many people are somewhat sceptical this morning.
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OECD forecasts that UK recession will be deepest of any major industrial economy
Labour fans - Brown's has gambled means that he holds his political ambitions higher than those of the Labour party itself.
If Brown's gamble fails, Labour may well be totally destroyed as an electable party. At best Labour will be out of power for a generation.
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Can someone tell me if the VAT on heating oil has changed?
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04 Stalinic
Normally disagree with your posts but couldn't agree more with this one apart from one small matter.
The credit card that Alistair Darling isn't his but belongs to people like you and I. It's easy to be brave when it is other people's money you are gambling with!
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Are Brown & Darling SNP infilltrators? Sent to destroy the English economy before returning triumphantly to an independent Scotland.
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Time to get selfish I suppose.
This country where I was born and have been happy to live, and pay the necessary bills in the form of tax and NI for over 40 years, has been brought to its knees by a bunch of incompetents. I hope and pray that the electorate doesn't get fooled en masse by them one more time.
If it does, then time to leave I'm afraid. I'm close to retirement and plan to finish work next year anyway. I see no reason why I should continue to foot the bills for a feckless government that I didn't vote for, so if Labour get in again I'm off.
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147. Boris is between a rock and a hard etc.
He has an Anglo Indian wife. He has a foot in both camps. To keep these illegals and naively think they will all contribute to the economy is foolish. It's a problem Labour allowed to happen.
Boris has thrown the suggestion out to the floor (us) like phone in radio programmes do. It may not be his view in his heart of heart to keep them but he has certainly opened the debate.
If David endorses this "keep them" view then he will fall out with the electorate who have been sorely affected in some vicinities. Many vicinities in fact.
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Jackboot Jacqui's plan for Britain thrown out by the sensible
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#158 sicilian
You're right - they wouldn't do nothing.
They would cut expenditure significantly to try and get us back to fiscal balance during the recession, as borrowing money is bad and depletes 'the national purse'.
They would increase interest rates to maintain an over-valued exchange rate (at least that's what I think Osborne meant by his criticism).
Contractionary fiscal and monetary policy in a recession may be tough over the next 5 years, but its this kind of tough love, in their view, that will enable Cameron and Osborne to rebuild the economy.
It's a valid political choice. But they would struggle to find any experts who support their view.
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To enlarge on this illegal immi. debate:
Some may pay tax but most do not. Just come and see Edgware, Wembley, Southall the list goes on.
But for sure ALL are using the National Health, Schools, Transport, Roads, Sewers, Water etc etc etc etc Now do the sums.
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139. braveSouter wrote:
There appears to be worldwide support for Mr Darling's proposals, particularly amongst informed opinion. Those against? halve-baked politically illiterate Tory bloggers.
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Either delusional or trolling (that or a poor attempt at wit)
I have yet to see informed opinion that agrees with this - every single newspaper (ok haven't seen the mirror) and news outlet disagrees - even the guardian! - why the world would care about darling cutting vat and raising duty i dont know
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People aren't stupid. We're no better off after this PBR.
I don't have any extra money. The big VAT cut means that I might save £10-15 on my Christmas spending this year!
Great, I'll put that aside to get a mortgage. No, wait, my mistake, the banks still aren't lending to each other, or to business for that matter, which means they still won't lend to me.
Until this problem is sorted, the economy remains is serious trouble and no 2.5% savings are going to make any difference.
Actually, I lie, it will make a difference, we are going to have to spend hundreds getting our price lists and brochures reprinted. Thanks!
Just because something which costs £100 pounds today will only cost £97.50 on Monday doesn't mean I can suddenly afford it.
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158. Quite right.
Our new Conservative government when in power will need to see what this lot have left in their desk drawers unless of course they've cleared them.
Let's get the written warning and the dismissal across in the ballot box. Blue is the colour.
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The VAT element of this "budget" is the most expensive part and likely to be ineffective. It was chosen because it could be done quickly - quicker than any solution based on a reduction in income tax. This is a political statement and not a financial one.
I can't see the price of my one fortnightly (if I'm lucky) treat of lunch in the pub at £9.00 is suddenly going to become £8.99. By the time the cost of changing the prices has been factored in, the landlord will have to put up the price to £9.00 anyway.
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153 JRperry
I agree with you. Normally, however, it is smugness that makes him act like this.
Yesterday things were different. I was watching him closely. Brown was ashamed and trying to distract attention away from what George Osborne said.
Oddly - the remark that seemed to sting him most was that he was "unelected". Brown turned to James Purnell and you could lip read what he was saying. "Unelected, unelected, what does he mean?!"
Purnell just shrugged his shoulders at his boss. But like everyone else, Purnell knows that Gordon's ambition requires him to be elected as PM, not just to have stolen the job.
That is why Brown is willing to gamble not only the fortunes of the country, but the future prospects of the Labour party in order to satiate his personal ambitions.
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162. Yep. That's it. Even though they may get clobbered for their own high tax they's just imposed!
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163. Please don't go! The country needs decent respectable people like you. Not the shower of benefit thieves, illegal immigrants, grabbers and do-gooders (Baby P).
Your country needs you!
(Anyway, I know dozens of people who have become disenchanted abroad. No National Health, language problems, many many difficulties but they cant afford to come back)
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"They would increase interest rates to maintain an over-valued exchange rate (at least that's what I think Osborne meant by his criticism)."
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I think he actually called for a cut in interest rates to encourage lending. Seems perfectly sensible to me.
A puny measure (2.5% cut in VAT) now will mean higher taxes for many, many years.
Ultimately, there is nothing in the PBR to encourage people to get out there and spend money they do not have.
I don't think enough has been made of another very interesting point. Every Labour Government goes bust!
Gordon Brown, of course, promised that he had managed to end the inevitable cycle of boom and bust. How wrong he was.
The time he was right was back in 1997 when he told us all "we have learnt from the mistakes of the past, you cannot spend your way out of a recession". If only he would heed those wise words now!
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#153
Interesting point. It is also clear from his performance at PMQs, when he can't even bring himself to look at the opposition, that he has a deep, abiding hatred of the Conservatives, and at best, a thorough disregard of anyone who is not Labour.
The question is where does this come from? Having been brought up in a manse, it is understandable that he would have left leanings, the Protestant and Catholic churches in Scotland are both steeped in the roots of the Labour Party, but this pathological hatred can hardly have been taught at his father's knee. Furthermore, he won't have come across too many Tory boys in Fife in the 1960s, other than on the rugby pitch.
I suspect it is more to do with his Glasgow University days, during an era when it was largely a preserve of the middle classes (as a minister, his father would certainly have been considered middle class). Even then, 1970s Scotland was about as left wing as you could get anywhere in the UK, so it draws the inescapable conclusion that Brown's problem is fundamentally with the English, because it is the English, and only the English, who can elect a Tory government.
Is it possible, then, that his entire political career has been directed to this point - making the English pay for having the temerity to not be socialists?
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Two quotes from this article make sobering reading:
"It is stunning that Brown's policies have cost HM Treasury, in real terms, more than it took to defeat the Luftwaffe and the Wehrmacht."
............and really, really worrying read this quote and then click below to see the graph:
"The chart above (click to enlarge) shows the cost of insuring in the credit default swap market against the U.K. government going bust is nearly triple the German rate. British Gilts are becoming the junk bonds of the G7. "
How close are we to an IMF bail out?
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#175 laugh_on
Osborne picked up on the ~25% decrease in the value of sterling, and suggested that this was due to woeful government policies [stats suggest that it was due to over-valuation over the past few years e.g. against the Purchasing Power Parity long-term equilibrium, but I digress]
Now, the reasonable interpretation from this is that Osborne considers the $2 to the pound rate is what we should be aiming for - and that monetary policy should be adjusted to target this exchange rate.
What this means is that interest rates should be increased to ensure we don't suffer from 'a sterling crisis'.
This is how we used fiscal policy in the 1980s and 1990s in the ERM (and incidentally one of the reasons Conservatives give for not adopting the Euro - the ability to have a flexible exchange rate is valued in this context, apart from, it seems, when the exchange rate shows flexibility).
Unless Osborne was just yapping on about a justified decrease in the over-valued pound to try and gain political advantage, and proposes no policy changes to get sterling back up to the desired level? I hope you're not suggesting that this is the case.
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Unless of course he was proposing that:
* Interest rates should increase to ensure sterling maintains its desired value of $2 to the pound
* Interest rates should decrease to stimulate the economy
I'm no expert, but there appears to be a couple of difficulties with this set of policies.......
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Didn't anyone else watch BBC 2 last night...
The American Time Bomb....
"Is America facing an even greater threat to its economy than the meltdown of its banking system? David Walker, the former Comptroller General of the United States believes that his country is about to drown in an ocean of debt. He's so concerned that he quit his job to raise public awareness on the issue. He believes his message to be the financial equivalent of former president Al Gore's warning about the environment, An Inconvenient Truth."
Be afraid...
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#144 rcrobjohn
Your dead right and sadly its going to be a more common theme - watch the flood gates open and see honest hardworking, wealth/job creating people leave this once great country. No co-incidence that last time labour were in power emmigration soared!
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@9 wdowell
"Remind me some of the reason of the Credit crunch. Oh, yes. People spending beyond their means. hmm..."
Including Gordon Brown perhaps?
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Some interesting extracts from the full statement.
In 2011-12 employees' NI will provide an additional 2450 million and employers' NI will provide an additional 2650 million. This is what Osborne was referring to when arguing that just as we start to come out of recession we add to the costs of employing people and those fortunate enough to be in work pay additional tax thus limiting their spending power. Doesn't seem to make sense to me.
2010-12, efficiency savings of 10 billion are to be found in Government exenditure, reducing Government expenditure growth to 1.2 percent. When Cameron dared to mention the possibility of reducing expenditure Brown painted a picture of hospitals and schools closing.
Nick - could you ask Brown for a list?
This against a backdrop of a proven inability to accurately forecast growth and therefore tax receipts. This statement represents the very very very best case outturn.
Whoops, shouldn't have said that. When it all goes pear shaped Brown and some of his apologists on this blog will blame Fredalo for talking down the economy.
This prebudget statement is the last will and testament of Labour - but true to form, instead of a bequest we have to pay for the funeral and buy tickets for the wake.
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164 Thank you for your views - which I respect.
I do actually find myself unusually - totally in agreement with you.
I wonder what the Treasury could do in terms of calculating the cost benefit to the economy of repatriating IMMEDIATELY - any person living in this country either illegally,or beyond the terms of their visa - who is not actually making a NET contribution to the exchequer.
My pragmatic view is that if someone can evidence that although they may be here illegally they are contributing a net amount to the exchequer in terms of not scrounging or sponging - then an amnesty to allow themselves to be "legalised" may be productive.
Those that are NOT - should be repatriated immediately - and if thats to somewhere where they are not wanted,or liked = TOUGH!
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#180 gold
And it's all Gordon Brown's fault.
What a disaster!
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158 - Agreed. All the political parties have said what they will do but the Puppetmaster Mandy has told everyone to say the Conservatives would have done nothing on the basis that say it often enough some people will believe it.
Both the Lib Dems and the Tories have come up with better more focussed suggestions than the reduction in VAT.
Some of the things in the report were o.k. but not the big expensive one.
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178. At 11:48am on 25 Nov 2008, balhamu
Before I carry on with my arguments, I should make it clear that I am no economist and have no pretensions to understand the intricate ins and outs of this crisis.
I do, however, take a pretty detailed interest into anything that may affect my wallet.
Osbourne this morning said "Interest rates are 3 per cent here, they are 1 per cent in the US. It is clear they can come down."
This, he argues, would be a more sensible approach than any cut in VAT as it would encourage lending in the banking system.
Coupled to this policy, he argued that the Government must put active directors onto the boards of part nationalised banks. Once there, they could force banks to start lending to each other and, therefore, ultimately to us.
Obviously, if they did this, the Government would have to directly insure/underwrite this lending.
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# 172
I actually disagree with you on this. Brown wanted power. How and why it came to him he does not see as relevant I believe.
Although we dont elect Prime Ministers anyway. We elect parties. Or thats the theory.
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#187 laugh
Ok - he's got two completely conflicting policies then.
If interest rates come down further, the exchange rate will likely depreciate further (depending on whether currency speculators are currently anticipating a further decline and pricing it in already).
Osborne says this is bad - sterling should be at the magical $2 per pound mark.
So interest rates need to rise as well as fall to fulfil his two aspirations.
My suspicion is that he was merely making political capital about sterlings fall in value to its long-term equilibrium.
And he can ignore the implications of reducing interest rates further e.g. on further declines in sterling by blaming them on the tripartite regulation of banking by Labour in the teeth of Conservative opposition or something like that
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A cunning plan!
We must all praise GB and AD...
We must go out and spend a little...
We must make viewings to see houses...
We must say - when asked -
Yes... the government are doing a great job.
We now have every faith in them.
When stopped in the street say - Yes - we will vote labour at the next election.
This way... GB will go ahead in the OP's...
He will become brave and call an early election...
Then, we go into that booth... :)
If we don't we will have another 18 months of this gang and remember - that is another 2 full budgets and another pbr's...
We must be cunning to rid this country of the worst government we have ever had...
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172 and 176
I first noticed Brown's strange behaviour during Cameron's speech in response to the budget earlier this year. I think it is still up on the No 10 website, if you want to have a look.
Aside from the disgraceful Balls "so what?" incident, there was also the stage where Cameron was deep into the 10p tax issue (before it really blew up, of course). The footage cut to Brown, who had already been seen to be acting up in they way I described before in 153. This time he had got beyond himself and was trying to do an impression of crying with laughter.
Frankly, I think this sort of behaviour demeans the office of PM.
These are difficult times for many people; many people think that some of the problems affecting the poorest in our society are directly the fault of the Government. The least he could do is try seriously to counter the arguments, rather than merely seeking to make people who are expressing valid points look stupid. For me, all he achieves in that is making himself look stupid.
The real problem is the state of the nation. Trying to use childish methods to wipe the opposition into the floor is a sideshow. The PM would do well to show that he knows this.
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So the consumer boom is all down to Gordon is it? He must have been busy forcing everyone individually to go into those shops and rack up thousands of pounds of debt on credit cards. No wonder he didn't have time to look after the economy! I think we need to look at ourselves as well as the Government.
It is true that we are in a terrible mess at the moment. The Banks took incredible risks with our money in giving out loans that went wrong. I do not think, also, that the Government did enough to stop the recklessness in the financial sector. Which has made the mess a bit worse than it should have been.
Then again its only 6 weeks ago or so since George Osbourne was saying we must not increase regulation on the city -so despite the rant at the dispatch box yesterday (tip for George less is more you came over as slightly hysterical) we can assume that the Tories would have got us to the same place.
The question is what to do about it -do you bring forward public spending and keep people in jobs so that they can spend and continue to pay the mortgages. This means you have to pay back the money when times are better. As Darling has decided
or
Do you do nothing and let unemployment increase like Thatcher did and those of us around in the 80's remember what that was like. Apart from the high earners who benefited from the big bang in the city of course. Which appears to be Osbournes decision although he didn't actually say yesterday -too busy restoring his bad reputation as a sailor I guess
The reason the major givernment got the economy back on track was through a fiscal stimulus in the 90's said at the time that it was a gamble and we were in a terrible state etc.
What I want to know from George and David is what would you have done if you were in Government. This is the great unanswered question.
We know from this morning that Geroge would freeze council tax -which contributes about £25 billion to the total tax income of £545 billion next year. Not really enough for me to make a judgement and I hope they have more plans than that. Although I suspect that possibly they do not really know what they are going to do apart from giving me an incentive to stay married beyond my silver wedding anniversary!
Roll on the next election at least we can't say that all the parties are the same anymore.
Finally a personal irritation to all thouse who talk about Brown being unelected. We do not elect a Prime Minister in the UK never have and are unlikely to do so in the foreseeable future. Thus Major wasn't elected by the people after the Tory MP's (not even the party) defenestrated Thatcher and Brown is the same. I'm sure it won't stop everyone using it ad nauseum but at least I've got that off my chest.
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#191 jrperry
Yes - you could even say that 'this strange man' Brown is 'faintly autistic'.
Hopefully for Cameron this'll be enough to win the election - "don't vote for the weirdo".
Maybe Saatchi and Saatchi can develop "The Brown Monster" or some other witty campaign to go with it (after 'Demon Tony' they have a lot to live up to). Maybe they can shackle him up in "debt irons" or something.
Maybe other posters can help develop the idea.
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The tapering off of personal allowances for people earning over £100k plus the increase in NICs means that every pound earned between £100k and about £107k will be taxed at a marginal rate of 61.5%. 61.5%!
Once employer NIC is taken into account, the Government would get 74.8p for every 38.5p the worker gets. 66% for the government, 34% for the worker.
The "brain drain" has already hit the corporate sector - Regus to Luxembourg, Shire and UBM to Ireland. How long before the same really begins to bite for individuals too?
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187
Todays comments and yesterdays vitriolic nonsense sum Osborne up
He Has'nt Got a Clue!
Whatever he says today,can be directly contradicted to what he says yesterday -
When he does say something he did'nt contradict yesterday - it is something blindingly obvious - or something he knows is going to happen (like a further interest rate cut0 - so that he can claim some kind of non-sensical victory.
I wont attach this to the Tories - as I believe they have in their midst some very astute fiscal and economic brains - its a pity Cameron/Osborne and Hammond are''nt amongst then - so Club David then shall we call them - simply DONT UNDERSTAND - There is no simple trick,there is no BIG idea,there is no magic wand - Laissez Faire certainly wont wash...
This GLOBAL crisis requires GLOBAL action and also requires a multitude of components to have any chanceof success.
I reiterate my earlier point - Darling had a go - some very very positive steps have taken BUT he has missed some opportunities and taken a risk -
Time will tell how successful THIS COMPONENT HAS BEEN BUT THE pbr IS BUT A SMALL COG IN A GLOBAL AND INDEED uk WHEEL!
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Osborne, Pah, the man has become the political turkey, every time he opens his mouth, he is shot down.
The tories opposed the national minimum wage and young naive Osborne tries to champion the low income N/I payments.
The tories are out of their depth, their clueless, divided and have nothing to offer the British public on opposition politics.
Osborne and Cameron and the do nothing plan! jeez! do we really pay these two a wage?
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189. At 12:28pm on 25 Nov 2008, balhamu
I think Osborne will argue that both are possible.
By cutting interest rates, he can stimulate lending in the banking world.
At the same time, by not signing up to record levels of debt, he can protect the pound.
The two parties are pushing two very different and risky policies. It is up to us to decide which view to subscribe to.
I have made my decision based not on political bias, but on my own assessment of the facts. Based on this, I have to believe that the hugely insignificant measures being taken now by Darling and Brown will have no immediate effect.
These measures will, I believe, lead only to a longer and harder recovery and less money in my pocket for many years to come.
I don't know what the answer to this crisis is, however, I truly believe that Labour are on course to make things a whole lot worse before they can get any better.
Does anybody else think the dates of everything we have heard coincide a little too neatly with some important political (not economical) dates.
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Nick,
I hope you will pull Darling up on his claims that only those on at least 40k will be worse off when the NI increases kick in.
That figure is based on Income Tax allowance falling back to the level it was before the 10% tax cock up made it necessary to increase it this year. The true figure is that anyone on 20k will be worse off than they are THIS year which is what the measures should be judged against.
You have to give Darling credit though for creating a new spin device - say you are going to cut allowances next year and when you don't - hey presto - an instant tax cut!
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No 192, it was Gordon the Golem who assured everyone at every opportunity he could that he'd broken the cycle of boom and bust, so don't go blaming the people.
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#197 laugh
Ok - we know that Osborne wants to embark on contractionary fiscal policy during recession (cut taxes, cut spending by more).
Maybe that will prevent any decline.
What isn't clear is how Osborne plans for sterling to reach $2 per pound. If not interest rate policy (used to sustain the exchange rate rather than for domestic policy needs) then what?
Magic? Osborne says "I want a $2 per pound exchange rate" and currency speculators say "Your wish is our command" and grant it? They certainly didn't listen to him when he said "I'd like a sterling crisis to destroy Labour please".
It's just not clear. His interest rate cut will do nothing to increase the value of sterling - quite the opposite.
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193 Balhamu
Mmmm.... I like your monster theme, but how about a 'tax monster' that runs round chasing everyone and taking away their pay packet before setting light to the cash with it's fire breath?
Maybe it could be called "Wadzilla"?
Of course, the monster would have the head of Gordon Brown, with Tony Blair's ears and Alistair Darling's eyebrows.
Haircut by Hazel Blears with neck courtesy of Margaret Becket.
At 300ft tall Wadzilla would need a very large Peter Mandelson purple V-neck jumper.
Arms to be supplied by Charles Clarke and hands thanks to Miliband (complete with banana of course).
From the waist down, that'll be Ed Balls with shoes by Claire Short.
Joke ;-)
I had thought Labour would go for a 2009 election. In which case it would be a horrible partisan battle with a lot of election smears.
After yesterday, I think 2010 more likely and given the gamble is 50/50 one way or the other, the economy will decide the outcome of the election and not smear tactics.
In case you are wondering - I hate political smear campaigns and like them to be fought on the facts and policies. Majority consensus based on factual representation is a good safeguard.
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So there we have it a time bomb ticking away. The gamble is laid and the nation holds a collective breath. I just don't get it, with the VAT reduction being so immaterial is it really worth borrowing so much more to kick start the economy. Surely the one thing we have learned in the last few months is spending beyond our means is NOT the answer. Given the scale of the issues involved perhaps we should have a referendum on the package and let us decide.
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derekbarker @196 wrote...
"Osborne, Pah, the man has become the political turkey, every time he opens his mouth, he is shot down.
The tories opposed the national minimum wage and young naive Osborne tries to champion the low income N/I payments.
The tories are out of their depth, their clueless, divided and have nothing to offer the British public on opposition politics.
Osborne and Cameron and the do nothing plan! jeez! do we really pay these two a wage? "
Really on topic that..eh?
I suspect that you don't pay a penny towards their wages..but I can guess who pays yours.
If you have anything to say,try making it meaningful,rather than a hysterical rant!
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From the graphs I have seen the PBR assumes a short an shallow recession compared to previous post-war recessions.
As Darling told us a few months ago that our position is the worst for 60 years I find this contradictory. Of course no one can be sure, but I do wonder whether the PBR is wildly optimisitic. If the latest debt-fuelled Labour binge is unsucessful are we going to have another and even bigger binge?
Hold on to your wallets to pay the Labour tax bills that are accelerating towards us down the line!
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Balhamu 193
Strange remark. I wonder what your motivation is?
I'm not trying to make a party political point at all. Quite the contrary - this is a time of considerable danger for the nation as a whole, and it demands a constructive approach to politics. That means serious assessment of people's arguments, not pathetic efforts to dismiss or marginalise sound and reasonable views of what needs to be done.
My concern is that leaders just now need to look and behave like leaders. I'm well aware that this blog is looked at by people at No 10, and it is to them that I am saying that a bit of dignified behaviour would be an advantageous contrast from some of the scenes of yesterday.
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one way or another we are going to have to accept that tough days are ahead, things are never going to be as they were, if this gamble gives back consumer confidence and a healthier economy, maybe then we wont have to worry about our jobs, lets face it, I would rather pay higher taxes and have a job in the morning. I think it is a bold move, and I hope it pays of!
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Global Crisis
Global Action ............................................................................................................................. blah blah blah blah blah blah blah
Partly true it has to be said but not the whole story as everyone knows. We in The UK are uniquely unable to steer our way through it comfortably because of previous policy mistakes. Those to blame include, bankers, individuals, financial advisers and POLITICIANS. There is no getting away from that fact!
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#201 jonathan
I like it.
It could be a series of campaigns - with Cameron and Osborne making appearances towards the end to defuse the tax bombshell that the Brown Monster has left.
I'll share the royalties from Saatchi and Saatchi with you.
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199.
I am surprised that anyone really believed Gordon when he claimed he had abolished boom and bust -it was just political ego talk. I thought he was talking rubbish then and still do.
What I was trying to say (and obviously failed) was that the current crisis is very complicated and in my view is a combination of a number of factors not just political decisions.
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I don't recall Osbourne saying anything like $2 was the natural position of Sterling.
Or most of what his detractors have said either...
Isn't that Labour's way... steal the policies then play the Opposition personalities.
Face it, he was right with one thing he said yesterday.
Every Labour Chancellor eventually runs out of money.
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All this global solutions for a global problem....
Yes, look at the two banks in the worst mess.
Northern Rock, lending 125% of a house price and ridiculous multiples.
Bradford & Bingley, lending to amateur buy-to-letters...
The biggest house boom in the world, right here in the UK.
This was all America's fault, wasn't it?
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The Labour bloggers' 'arguments' make as much sense as a Polly Groinflea article--- ie. none.
We need an election NOW.
A vote for Labour is a vote for tyranny and waste. Do the right thing... vote out the liars who ruined our country.
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208 Balhamu
It would of course require Vince Cable to make a cameo appearance during the defusing of the bombshell shouting "don't cut that wire" any time someone was about to snip a wire.
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#203
Maybe you should pay more attention to what Osborne is saying?
A direct cut in income tax, only favours the super rich.....YES. (think about it!)
Cameron said he had a plan?
what was the plan? DO NOTHING PLAN!
I merely point to your peers and what they advocate. Cut tax for the rich....full stop.
dontneedthegrief, can you elaborate on the tory plan? Take your time now! Osborne and Cameron might take you up on any suggestions>
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#214
A direct cut in income tax, only favours the super rich.....YES. (think about it!)
Unless your definition of 'super rich' includes everybody earning over the single person's allowance then I suggest you've been sniffing the Labour glue a bit too heavily this morning.
A direct cut in income tax favours everybody who pays income tax. It's quite simple really.
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#215
Hmmm, So a direct cut in income tax would result in less money for the public srevices
which in turn would create less employment
So a switch of decreased VAT to direct tax of 2.5% would leave us with less jobs and HEY! A 2.5% cut to those who earn over 100,000 is a lot more than those who earn under 10,000......yes
Jeez, you tories are so predictable
look, lower food costs and lower energy bills are the way forward in these difficult times....can you not see that?
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#216
"look, lower food costs and lower energy bills are the way forward in these difficult times....can you not see that?"
Neither of which are affected by the 2.5% reduction in VAT.
So your point is....?
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I worked for a huge financial institution in the eighties. It got into trouble and the Bank of England threw it a lifeline. None of this was made public and the company thrived, paid back and was eventually taken over by Abbey (National).
It wasn't THAT bad. The recession was bracing and actually did a lot of good for people.
Things picked up and people were happy.
During the last decade the Labour shower didn't look out from under their umbrella. They failed to see what was happening because the oft quoted:
"Britain tries to save the world but it can't save itself " became true. Now they think they can up their profile by ostensibly giving handouts. They keep saying it's "the right thing to do". Well, no, it's the LEFT thing to do and it won't work.
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216 Derekbarker
That doesn't make sense I'm afraid.
By the way there is no VAT on food.
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Is it me or does Yvette Balls/Cooper look like Ken Dodd in drag?
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And don't you understand, derekbarker, that VAT is not levied on food?
This is a massive gamble by Gordon the Golem and his streetwalker Darling. But it's gamble with OUR money and it seems based on ridiculously optimistic forecasts. The streetwalker forecast borrowing of £43 billion this financial year in MARCH and now he's revised that to circa £70 billion.
What if his other forecasts are out? He and his cohorts get chucked out of government, but with their seats in parliament in Labour safe areas they'll still have their jobs and no doubt numerous non-executive directorships await them while in opposition.
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There are two big differences between this 'bust' and the 'bust' of the early 90's.
Following the Lawson Boom, we entered a recession with a 2% surplus in the economy.
Following the Brown Boom (if he can really take any credit for it), we enter a recession with a 3% deficit.
However we work our way out of this mess, let us not forget who left us so completely unable to deal effectively with it.
The problems may be global, but, after 13 odd years of growth, how can we possibly find ourselves in a situation where we have no money in the bank?
It is a stunningly poor effort and shows a complete lack of competence.
We all sit here now praying that the slightly pathetic measures taken by Brown and Darling work, but nobody can really be sure whether they will save us or destroy us.
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216 - derekbarker
"Jeez, you tories are so predictable
look, lower food costs and lower energy bills are the way forward in these difficult times....can you not see that?"
sir, i agree that lower food and energy costs would be far more beneficial than what has been done.
should you not be directing this directly at labour supporters and the government?
we do not pay any VAT on food, and energy prices will not be reduced, darling will simply set up OFGEM to "review" the pricing at certain times, which is what they should be doing anyway?
it appears that your way forward, has been dismissed by the government who are in charge.
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The winter fuel allowance + £25 went into banks today. All strategically timed for the best effect.
They are so predictable.
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#216
Jeez, you tories are so predictable
look, lower food costs and lower energy bills are the way forward in these difficult times....can you not see that?
Yet again demonstrating that if you give Labour apologists enough rope they will hang themselves.
I suppose you know that most foods are zero-rated for VAT. You did know that didn't you? And domestic energy is rated at 5% - the EU won't let us cut it any lower and so it's staying the same.
Petrol is going up though.
You have been suckered. That Labour glue sure is strong stuff.
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You're right Nick it is a big gamble, but, isn't that what new Labour is all about: gambling with our money. Anyway, I and many others on this blog won't shed a tear when the whole mess comes crumbling down around their feet early next year. The New Labour woodentops are 'money junkies' They don't mind spending it so long as it's not theirs, don't mind gambling with it so long as it's not theirs and I suspect, very soon, they won't mind printing it too. because when they've finally exhausted all of their main options this is their last option: print print print, and damn the consequences.
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#219
Jonathan, would part dont you understand?
A drop in VAT registered business has a direct like to the retail price index....yes
Allowing cuts passed on to goods inclusive of foods and energy...yes
Are you following the real plan now!
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#72. "Theres only been two outgoing Labour Govrnmernments in the last 58 years!! and it proves nothing .
Your premise is that ougoing Tory Government leaves the UK with a healthy economy? Based on 1997 presumeably? As stated in my previous post that is at least debateable."
Well, "eatonrifle", I notice you still failed to answer peaslaker's question, which was, in case your attention span is limited, name an outgoing Labour government that left the economy in a healthy state.
To help you, here's a list of the two of them:
Callaghan 1979 - winter of discontent, say no more.
Wilson 1970 - high unemployment and inflation
Attlee 1951 - austerity budget
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"There is a saying in Go that "Strange things happen at the one-two point". Here, the normal heuristics of play break down and novices are often confused by this.
Sensei's Library comments: "The one-two point is a critical point in many life and death problems. The difference between living or dying locally is at least 20 points. It is something that cannot be taken easily. That's the difference between winning and losing, or losing and losing badly."
"
My Goodness - I actually have something in common with CEH (having learnt the game in Cambridge in the early 1980s) - although I would argue that the difference between life and death is more than 20pts - it depends on the resources committed (And yesterday Labour committed a tremendous amount of resources - without reading the position ahead)
Another Go Proverb : Large groups never die (They get bailed out by the Government)
Another Proverb Ipo-Gi (putting all your eggs in one basket) is a bad thing.
And another - Don't make Dangos (Quangos!)
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#210 flanflinger
So I must have imagined the fuss that he was making a few days ago that sterling had plummeted from a value of around, er, $2 per pound to around $1.50 per pound, and the detrimental affect this would have on our economy.
And yet you say he doesn't believe that is the right level for the pound, and has no plans to get the pound back there?
There are contradictions there, certainly.
I guess you subscribe to the view Osborne was just politicking, and does not really believe the Government deserves criticism for the recent depreciation of the pound. He just hopes it attracts it anyway.
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Research shows that Browns debt bubble is twice what it cost us to defeat the Germans in World War 1
Pack up your troubles in your old kit bag.
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So thats an extra £4000 for every working person in the UK to pay back in tax (114 Billion divided by 30 million). Yay.
But I of course benifit so much from these tax cuts. Oh, no I don't. Great. Thanks catepillar eyebrows.
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For those who haven't seen this, you will be amazed (or maybe not!).
No woman would vote for Brown after seeing it, I tell you....
http://www.youtube.com/watch?v=6VaP1HB7Vew
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but nobody can really be sure whether they will save us or destroy us.
Well I know what they will do. They will destroy us.
Let's suppose, by some miracle, people keep buying the half trillion quid in bonds that HMG will be issuing to cover these monstrous deficits and we emerge on the other side of this recession without hyper-inflation.
What then? We'll still have the same imbalance that had us running 3% budget deficits for the past six or eight years. What will happen to us when we emerge from this recession and come to trying to pay back this debt? So that, you know, the next time we have an unsustainable property bubble that hits us out of the blue we'll actually have some money saved before we hit recession.
Now that our national debt has been quadrupled by this government's beserk financial policies. What kind of tax rates will we need to try and pay it down over any meaningful time-frame. And what will that do to our 'recovery'?
The die is cast. The economy is finished. We have only one chance in the next 18 months to save the UK.
These mentalists are even predicting the recession will end by Q3 2009. They reckon the economy will be growing by then. Just not enough to prevent an overall negative GDP for the whole year. In fact on the government's calculations we are almost half way through the recession already.
Oddly this quick recession which is projected to have only one quarter (Q2 2009) in the entire tax year 2009/2010 will still lead to a projected 2009/2010 deficit of 118bn quid. Man. That is one bad quarter they're lining up for Q2 2009 to take down the whole years budget like that.
This governments figures are just completely made up. Have been for years.
They haven't the first clue what they are doing.
The damage may already be irreparable - I suspect it is - but hopefully we can seize the one chance we're going to get to try and fix it in the next 18 months. Because if these economic dementors blag another term with a mind-set such as they've shown over the past decade then this country really is finished.
I think we all know that it's probably too late already. The smug look of Brown yesterday tells of a man who knows he's done enough now to wreck the economy and that the Tories are powerless to save it.
Gold is only 800USD an ounce. In 18 months time we'll be marvelling at how cheap it was at only 800USD an ounce.
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Old Labour is back.
DAVE PRENTIS, UNISON: "Brown and Darling have shown their strength, courage and determination to face the economic challenge head on. Their extensive experience has kept them in tune with what the country and business needs. Gordon Brown has thrown off the shackles of new Labour to reveal the real Labour."
If unison likes it, that's good enough for me.
We are categorically screwed.
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It seems trawling the papers, they are calling the death of New Labour.
The concept that wealth creation and better public services go hand in hand is dead.
Instead, Brown has attached the jump leads to the corpse of Old Labour to wake the dead.
Yesterday, New Labour broke their core promise, not to increase income tax... and an increase aimed straight at the wealth creator.
It's public services, unreformed and a money-pit are destroying wealth (with -20% productivity). Bloated with wasteful managment and administration, it's time for reform is NOW.
There is a choice, a proper choice at the next election.
Small government, light and tight regulation & less waste. Reformed public services.
Big government, tax, spend, waste, same as yesterday.
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On reflection this 15bn 'stimulus' is no such thing. It'll be assuming that spending continues at the same rate as 2006/2007. Which is most unlikely.
I'd have thought there would be a significant belt-tightening coming up and VAT-able spending will be right down. So it's reported as a 15bn 'give-away' to further try and camouflage the enormous budget deficit.
It'll be all, 'Oh our budget deficit was actually 110bn and not the 78bn we forecast but we did 'give away' 15bn in tax cuts. By the same twisted logic they gave away the rest of the 110bn in tax cuts too.
Ie they were never going to get that money in the first place.
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Never before have I felt so disenfranchised. What sort of democracy do we live in when an unelected Prime Minister can destroy our economy in one statement? GB was only able to bail out the banks before everyone else because he didn't have to struggle getting it through Congress like the US administration. It's a case of not now , not ever Darling. Please can we have a referendum on this so-called fiscal stimulus.
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#227
Allowing cuts passed on to goods inclusive of foods and energy...yes
Are you following the real plan now!
Take that bag away from your nose for one moment while I explain...
What about the extra costs that will be put onto goods inclusive of foods and energy as a result of the increase in fuel duty?
You can put the bag back now. And breathe.
Oooooooh, pretty Labour patterns.
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balhamu
more delusional rambling on this post from newlabour apologists.
Has it escaped their attention that the tories started their rececssion with a national debt at 27 percent of GDP and a budget surplus as opposed to the 41% debt of newlabour and a forecast 8 per cent highest ever budget deficit?
Clearly newlabour apologists have determined to ignore the facts not just of their own disasterous legacy but also the prior administrations fiscal probity.
Never mind, it's a matter of public record that all prior newlabour and labour adminsistrations ran out of money so there's little balhamu can do about it.
Even less his party, who appear to have decided to wrap up a disasterous budget deficit announcement in a mini stimulus package that misses vast tracts of the economy.
There is nothing wrong with diverting public resources towards infrastrucutre investment; this is excactly what the Major government did to great effect. Sadly newlabour are simply not doing enough of it because they are fresh out of cash; too busy paying the interest bill on the existing high level of debt, too busy handing out money to the workshy on benefits, too busy looking after the client state.
So we have a misdirected, wrong headed, fizzle of a fiscal stimulus when the whole world was expecting a bomb. The bomb is the gogantic level f public debt already run up without any newlabour fiscal stimulus they have finally had to own up to.
What a shame.
The emperor has no clothes..and his court has no money to buy any. As if any sane commentator (exluding the newlabour apologists) thought any different.
The last year has been a gigantic exercise in cover up but finally all has been revealed; we have no money.
I did warn you.
Call an election.
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Britain can't take much more. Nu-Labour have locked the windows and doors and they're wet-farting like hell.
Bring on the election.
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This VAT issue is just yet another example of how government does not understand the workings of business.
Retailers dont apply standard mark-ups to products they price point. Meaning, they decide what is the perceived value of said item and charge accordingly.
Youre a retailer, you sell gloves, your most popular line retails at 9.99 Inc Vat. Today you will be asking yourself If I drop this price to 9.77 will I sell any more gloves, will 22 pence off lead to more sales or shall I keep the price at 9.99 and make 22 more pennies.
Youre a customer, will 22pence off make you buy a pair of gloves on Monday that you wernt going to buy today. Does a 2.5 percent discount make you ever spend more... Of course not.
All this will do is reduce revenue and help shop keepers make a little more.
Its also worth noting that the majority of what most people spend goes on food, fuel, rent and mortgage payments. This measure mainly helps those buying luxury goods.
It would have been far better to target this money at specifc areas. No Vat on new cars for 2 months for example would have made a real difference. Reducing or even wiping the tax off domestic fuel bills would also have helped everyone this WInter.
Darling is a muppet and so is Brown.
Time for a change.
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derekbarker 227
You have obviously just discovered there is no VAT on food, and that VAT on domestic gas and electicity remains fixed. Unfortunately, in trying to construct an argument that the Chancellor's changes will bring down the cost of food and fuel, you have become incoherent.
Perhaps you realised that you were wrong but just had some need to get the last word in?
Anyway, if you really think that food and gas/electricity are going to come down, then tell us how, but choose your words more carefully.
To help you along, the increase in road fuel duty to balance the cut in VAT actually increases transport costs (hauliers can reclaim VAT but not duty), so the way I see it, food costs have more chance of rising than falling.
I don't see how any of what happened yesterday changes my gas bill, on the other hand, but obviously you do, so let's all hear it.
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"break with both the economics and the politics of the last 30 years"
It's not just a break with economics of the last 30 years, it's an economic break altogether.
They've given up trying to use economics (not that they ever really tried before) and are just throwing money at weird schemes which don't benefit anyone because they simply have no idea what they're doing.
Labour are like children playing pin-the-tail-on-the-donkey with all our tax money; they're self-evidently totally negligent (2.5% vat rebate to make everyone go out and spend?!) and need kicking out before they complete their scorched earth policy.
Just when you think they can't do anything more stupid than before they trump themselves again.
By the way, the vat reduction is a con; they're using it as a smokescreen to hide the excise duty increase on fuel; businesses can claim back vat but not duty.
If I were a haulier I'd be very very unhappy right now.
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When will the Government learn.
The Bank of England base rate was reduced by 1.5% - the banks did not rush to pass this on to mortgage holders and those with loans with the result that banking margins have increased.
Now VAT is reduced by 2.5% and guess what, retailers are not rushing to pass this on either. For small items it is too expensive to pass on and the 800 quid TV is already on offer for 600 quid, and will simply be the 780 quid TV for 600 quid. As for new cars, you can pretty much go into any dealership and dictate your own terms right now.
This is of course more to do with politics than the economy. The hope is that the 3rd quarter figures will show some growth in the UK economy so Brown can call a snap election mid October 2009 and argue he has got us out of the mess.
Come Jan 2010, the increase in VAT back to 17.5%, which everybody will seem able to pass on to customers, will snuff out any signs of recovery and hurtle us back into recession. If Browns autumn election plans fail because he is way behind in the polls, expect the VAT reduction to be extended by 6 months !!!
Thing is, are the British public stupid enough to fall for it ?
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I've heard that the Saudi and Abu Dhabi rulers are waiting for the UK to fall apart and intend to buy us at a bargain price.
If that doesn't happen they will encourage our large companies to move their head offices to their new cities and charge them negligible corporation tax.
Whichever way you loook at it, if Brown is looking for corporation tax to pay off a large percentage of the debt forget it.
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It is generally felt that the concept of meritocracy is good, ie an individual is rewarded for their contribution. A recession arbitarily penalises people, some very very heavily. As a meritocracy encourages people to make an effort, and a recession has the entirely opposite effect there are NO, repeat NO, longterm benefits from a recession, any more than there are any long term benefits from a bubble. It is for this reason that whilst cycles are inevitably in an economy, that a governments job is to mitigate the effects through prudent management. Repeated UK governments have failed dismally in this responsibility due to short term policies.
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"Things must be bad for Labour. The BBC reported the news almost straight and with little bias. (The way they did during the early days of Labour's Iraq war)."
When was this 'non bias' evident during the Iraq war? I missed that!
When did the BBC ever properly challenge Tony Blair over the blatantly flawed evidence for WMD in Iraq? When did they ask him about Saddam's Brother in Law who defected to the west in 1995 with all their nuclear secrets and WMD secrets, the secret being that there was NO nuclear weapons program and the chemical and biological weapons programs had been scrapped and remaining stocks fully destroyed? When was Mr Blair asked about where the UN estimate for the quantity of the remaining 'unaccounted for' stocks of WMD came from? The unaccounted stocks never existed and the figure came from a UN estimate based on a theoretical maximum output from the weapons factories. This estimat was necessary due to Saddam refusing to comply in early 1991 with weapons destruction programs. Later that year and the next he saw how determined the UN teams were and began reluctant compliance with the UN and by 1995 all stocks were destroyed except for those stocks that the UN 'theorised' could potentially have been manufactured.
Over the years that followed, Western political pressure ensured that the UN estimate of unaccounted for stocks morphed from stocks that theoretically could have existed into a definite figure of stocks that did exist and had not been accounted for.
thousands of Iraqis have been tortured to ascertain the whereabouts of these stocks that have never existed.
Also when was Blair challenged about the nature and 'shelf life' of these stocks of WMD? Or the FACT that these weapons stockpiles (had they existed) would have been rendered inert by time and the laws of physics and so could not have posed the west ANY threat at all even IF they had still existed?
I gained this information myself, pre invasion, from articles written and seminars and lectures available on-line by weapons experts and UN officials that were openly telling anyone who would listen the facts about this pre-war. I had to scour the far crevices of the internet to find, and then check, these sources. The BBC was hopelessly remiss in it's duty to inform during this time and they seriously mislead the nation on the need to go to war.
What is now accepted by the BBC and others as an awkward and 'unfortunate in hindsight' truth was known for certain before the invasion by those who took the effort to learn.
Labour lied and the BBC helped them to do so.
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#236 flanflinger
Labour promises on income tax:
* 1997 - will not raise the higher rate of income tax from 40% for the next Parliament
* 2001 - will not raise the higher rate of income tax from 40% for the next Parliament
* 2005 - will not raise the higher rate of income tax from 40% for the next Parliament
All met (though there was a fudge - that they were quite open about in the 2001 manifesto - with a new 1p NI rate on incomes above the upper earnings threshold)
* 2010 - If elected, we will not raise the higher rate of income tax from 40% for the 99% of people who earn less than 150,000 pounds a year. Income above 150,000 will be taxed at 45%.
I suspect that Labour won't have the opportunity to implement their 2010 manifesto.
So they will keep their promise.
The Conservatives can hike VAT up to 20% or cut tax credits or other policy that impacts the super-rich (or "middle England") a bit less than the Labour proposed 45% income tax rate.
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233 flamepatricia
Brilliant video.
Reminds me of a rhyme at school
"Everybodys doing it, doing it
Picking their nose and chewing it"
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#239
Look, boy wonder! the labour party rejected the proposed fuel escalater that the tories were so keen to introduce.
You must try and think, stop being a reactionist I know you and your type are short on policy, but, HEY! ignorance is no excuse.
Sub by name and sub by nature I guess. O'oo)
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Like lots of other people, before we get into the 1trillion pound debt situation (which is a very low estimate, and based on the mad labour estimated growth levels which nobody else thinks is anywhere near right), I think we should have a vote.
I don't want my kids to be saddled with what'll more realistically end up being 1.5 or 2 trillion of debt thank you very much.
How can labour supporters possibly justify a trillion pounds of public debt and say that it means the economy's been run well and we're in good shape?
Things have gone way too far to wait until 2010 for an election; we need one now before the trillion racks up. What voter in their right mind would vote for a party that's happy to rack up a trillion pounds of debt without a care in the world and then blame it all on the americans?
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In future can the contents of Darling's PBR be referred to as a risk-all stimulus rather than a fiscal stimulus.
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#240 Goblin
Yes - they did go in with debt at 27% GDP - you're right.
But why was that?
Was it their prudence and responsibility?
Current budget deficits 1979-1991 totalling £76 billion suggests otherwise (source: HMT Public Finances Databank).
Contrasts with the current budget deficits 1997-2008 of - wait, hold on a second I'll rephrase that - current budget SURPLUSES 1997-2008 of £1.9 billion.
Was it by selling off the family silver?
In a word, yes. Vast deficits in the public finances were funded (and more) by selling off utility companies (gas, electricity, water, telecomms) at a discount, selling off vast parts of the council housing stock at a discount, and privatising many other things at a discount. North Sea Oil at peak flow also helped reduce the National Debt that irresponsible policies (that led to a high current budget deficit) would have otherwise caused. £310 billion worth of privatisation and North Sea Oil revenue 1979-1997 sure helped a lot!
But isn't selling things we own off at a discount not really improving the Nation's Balance Sheet
Indeed.
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Interviewer: "So, Mr Darling.. heading for a record 1 trillion pounds national debt, no growth, falling tax revenues, falling house prices and no-one willing to lend, what are you going to do?"
AD: "Well, more than the Tories, you see, it's all their fault and if it's not their fault, it's America's fault. Not ours......oh no.
You see, we've had record growth, record employment and now we're going for a record recession, record unemployment and record debt."
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242 carrots
Totally agree.
Just spoke to a client who isn't going to bother to change price tags and will amke the adjustemnt at the till.
Also agree about the majority of spend in the average house. Food, fuel, mortgage/rent. That leaves free disposable income for goodies.
With decreasing disposable income this VAT farce is worse than useless.
Much better to have all essentials at zero VAT to increase free disposable income to help reflate the economy.
That means fuel - electricity, gas and heating oil.
Of course we must look after the most disadvantaged families, so the drug dealers, cigarette and booze suppliers shouldn't be affected too much.
Excuse me for being cynical but ............
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237 U9461192
Then there is the effect of the "negative fiscal stimulus" to take into account as well i.e. anyone really hard up is going to save every penny they have since they have advance warning of tax rises in the near future.
It doesn't matter how much you earn. If your outgoings are close to or exceed your income, you will not feel very "fiscally stimulated" to pop down to Argos when you know the government will hit you with tax rises in the near future.
You will instead find yourself "saving for a rainy day".
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196 DerekBarker
Ohhh did someone mention public sector pay:
How about this for a laugh, dont spose there are any saving to be made here
Wow another trillion quid
Some great salaries
1) BOB KILEY - Transport for London commissioner - 1,146,425
2) ADAM CROZIER - Royal Mail chief executive - 1,038,000
3) JOHN ARMITT - Network Rail chief executive - 1.027,000
4) IAIN COUCHER - Network Rail deputy chief executive - 924,000
5) DAVID MILLS - Post Office chief executive - 816,000
SUPER value Eh Derek !!
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Any 'benefit' to industry, business and retail provided by the reduction of VAT from 17.5% to 15% is wiped out - and probably made worse - by the increase in fuel duty (which companies cannot reclaim).
One again the Law of Unintended Consequences shoots NuLab in the foot.
(Unless the really wanted to increase costs for the productive sectors of society - which, knowing what a bunch of parasites they are, wouldn't surprise me at all).
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#233 flamepatricia
.....eeeuuurrrggghhh!!
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#251 derekbarker
I saw on TV yesterday that Labour were going to increase petrol by 7p per litre.
They might have rejected the fuel escalator but that hasn't stopped them putting the price up, has it. Haven't we all been hammered enough..?!
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242 Carrots
Of course you are correct and every retailer who has appeared on TV since has said it will make no difference.
Personally I don't think this was planned to be a "fiscal stimulus" at all. The method Labour have selected is so stupid, you'd need to be really, really mad to think it could kick start economic growth.
I think the VAT move was branded a "fiscal stimulus" - but is instead just electioneering and the only thing Brown could "afford" to do as an election bribe (whilst trying to make it sound responsible and not like an election bribe), which would sound like a big gesture on behalf of government when he is being interviewed on the sofas of GMTV.
Unfortunately for Brown - it seems that almost the entire country and media included think Brown is talking baloney.
(Brown knows he has been talking rubbish for months now, but will be genuinely surprised that the country has woken up and discovered that the android emperor has no clothes. He will be genuinely surprised we haven't fallen for more guff)
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Carotts in all fairness are you suggesting that luxury goods are the means to collective profits?
Is it not the case that conservative values are dead as the whole world moves to a more collective responsibile position of shared wealth and values.
I take it by your post that you do agree that the continuation of high employment is a better progressive measure than the tories ideas of low tax and high unemployment.
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238. I am surprised that you think we live in a democracy. The majority of our parliamentarians are unelected. A large proportion are the ancestors of medieval vagabonds. The Prime Minister was elected in the same way as all the other members of the House of Commons.
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#251
Look, boy wonder! the labour party rejected the proposed fuel escalater that the tories were so keen to introduce.
Good for you. And this has what to do with the issue at hand?
Which is that lowering VAT will not affect the cost of food or domestic energy. The poor, for whom food and heating make up a disproportionate amount of their spend will gain very little from a 2.5% VAT cut.
Indeed, thanks to the brain-trust that is Gordon Brown and his demented approach to all things economical in his rush to try and grab some cash back he's actually increased the cost of food by hiking the tax on fuel.
What a chump eh?
Clueless to the very core of his being. If you chopped his head off (for treason) his neck would have 'CLUELESS' running right down his body like a piece of Brighton rock.
Either that or 'INSANE'. Hard to be sure until the autopsy.
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Whatever happened to Due Diligence?
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getridofgordonnow
Things have gone way too far to wait until 2010 for an election; we need one now before the trillion racks up. What voter in their right mind would vote for a party that's happy to rack up a trillion pounds of debt without a care in the world and then blame it all on the americans?
Getrid - don't forget Margaret Thatcher - and the Banks too. I'm sure Labour will find a way to blame everbody else but themselves when they lose the next election.
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Very interesting video this one:
http://uk.youtube.com/watch?v=ku2yxP9ceRI
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258 Carrots
Here is a map of the UK showing the job growth by location and type.
Across the country over the last 10 years you will not be surprised that 2 in 3 new jobs have been created in the public sector.
errr.... wealth creating jobs?????
Anyone got any ideas why the UK economy is going down the pan?
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This comment was removed because the moderators found it broke the House Rules.
balhamu
can you for once address the here and now.
Tory adminsitrations dealt with the economy they had at the time... fluch with North Sea oil.. after an election in 79 the labour administration were dumb enough to throw away.
Selling the nations assets? What are you going on about? British Steel was bankrupt before it was restrucured and sold off. Funnily enough you can't sell anything without getting it into decent shape...all these assets had been inherited form the prior labour admisntration as bloated and inefficient. So good on the tories for turning thme arounfd and selling them.
now for the present day; the whole point about the current mess is newlabour inherited a golden legacy and squandered it..sold all our gold at completely the wrong price and ran up a huge deficit ahead of a downturn.
now the elepahnat in the room is the RBS under quasi public ownership with a 2 trillion pound balance sheet that could have to be 100 percent nationalied... this would bust the UK completely and we are a hairs breath away form this happening.
This is the newlabour legacy...leaving our children with a mountain of debt to pay off and the country a hairsbreath away form bankruptcy.
And I'm supposed to be grateful for a few schools and hospitals.
I have made clear on these posts before that the government is witholding information ... you have denied the level of personal indebtedness but I notice you have now dropped your protests in the face if ineluctable evidence against.
You will soon be eating your words about the national balance sheet of the Uk as the downturn spins out of control. Unsold inventory is piling up every day. Business failures are acceleratiing. The housing downturn is alredy worse in eighteen months than the five year downturn under the tories.
Call an election.
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265 U9....
Surely a piece of Brighton rock would have 'BRIGHTON' running through it.
Isn't Clueless somewhere in Scotland - a seaside resort I believe.
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251 DerekBarker
Derek
The Fuel Price Escalator (FPE) was just a formula for the automatic increase of fuel duty above inflation.
The FPE was introduced by the Tories in 1993, they set at an annual increase of 3 percent ahead of inflation, later rising to 5 perc%. After gaining power in 1997, the rate of increase was raised by the Labour government to 6percent per year.
The end to the escalator was announced oi November 2000, following the fuel protests.
Your beloved leader was forced into this.
So lets not go pretending that Labour are the motorist friend shall we.
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derekbarker quotes...
"You must try and think, stop being a reactionist I know you and your type are short on policy, but, HEY! ignorance is no excuse."
Delboy..after your display of ignorance this afternoon (VAT on food etc etc etc)..I think you should gracefully retire for a while until you feel better.
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The Times is already reporting the start of a brain-drain.
At the moment they're reporting on the massive increase in Australians who were here "permanently" that are now leaving, but there's been a large surge of uk-born citizens getting all the relevant papers in a bid to get out while they still can too.
"expatriate associations reporting a surge of interest"
This is one of the many reasons that we need an election. The international money markets have already realised we're finished under labour (hence the pound becoming worthless), and the general population are now realising it too.
Last person leaving please switch out the lights (sorry; forgot; there won't be any lights because we won't be able to afford the electricity)
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U9461192 @265 wrote:
"Hard to be sure until the autopsy."
Does he have to be dead? Can I get my cleaver now?
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#262 jonathan cook
Personally I don't think this was planned to be a "fiscal stimulus" at all. The method Labour have selected is so stupid, you'd need to be really, really mad to think it could kick start economic growth.
I agree. Trouble is, Gordon is now suffering from delusions of grandeur. He thinks he only has to say something and it will work. Look at how all the other countries hailed him as their saviour (particularly the French - who can't even bear to have him set foot in their country and would prefer to speak to Blair) when he told delegates at G20 how he brought Britain back from the brink of bankruptcy (which he was instrumental in causing). The man is a complete waste of space and should be got rid of asap.
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I take it by your post that you do agree that the continuation of high employment is a better progressive measure than the tories ideas of low tax and high unemployment.
I notice you give us a false choice of 'high employment' compared with 'low tax and high unemployment'.
What we're actually going to be getting under this Labour government is astronomical debt, high taxes and high unemployment.
Three million unemployed projected by end of 2009.
At least Brown has nailed his colours to the mast. Recession over by Q3 2009 so we'll know before we commit to the full 500,000,000,000 of borrowing whether keeping those million pretendy public service jobs manufactured since 2001/2002 jobs and the trickle-down posts at Starbucks, Pizza Hut, call-centres etc is likely to be the only cost we'll be shouldering.
I'd say it's definitely shaping up to be a cut and run election before Q3 2009 is out. That way when Brown's insanely optimistic predictions are blown out of the water and we're already sitting there with another 200bn quid of national debt he'll be blaming the Tories for the recession lasting longer than he'd planned.
You just know it won't be his fault for getting it wrong. Again. Don't you.
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If the interest on this trillion pounds is 5%, that means it's 50 billion in interest alone (and that assumes it's not compounded, which I'm assuming for the sake of simplicity as the full trillion isn't racked up in one go so it probably evens out to around 50billionish).
That means that the planned "efficiency savings" of 5 billion a year would take 10 years just to pay off the interest, without paying off any of the actual debt.
These figures are truly horrific, and even these figures of a trillion are the "optimistic" labour ones.
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By the way, why is this called a "Pre-Budget Report" when it was a budget? And we've another one to look forward to in March, joy of joys. No doubt Gordon the Golem's streetwalker will be revising his forecasts again then. And I can only see the forecasts getting worse then.
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Ooh, looks like Darling's going to get hauled up for a debate on his budget.
Did any of you ever have a kid in class who always got his bigger brother to do his homework, got good marks and then did badly in the end of year exam?
I have a feeling Darling is going to getting monstered by Osbourne.
After Labour's long faces yesterday, after that debate, it'll be the long knives for someone else.
And I can't wait.
Bye bye Labour. See up unfortunately sometime in 2030-ish.
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#274
dontneedthegrief, jeez I cant get through to you...Eh, look! stop thinking about your-self and try looking at the bigger picture.
I repeat again....tax cut, in income tax, dont serve the nation as a whole collectively.
Wow! what part of the VAT discount dont you understand or you so bleak and unconfident that you would like the nation to collapse?
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"...uniquely placed"
Like I said before: rolled over a barrel ready to receive a painful 'financial stimulus' (heck - choose your own euphemism).
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Perhaps the Tory bloggers could give Mr Brown and Mr Darling a rest, and give a little attentoin to the Tory Shadow Health Secretary Andrew Lansley who has said that the recession "could be good for us" in many ways. Is this the same Andrew Lansley that a few years ago said that the race card could play well for the Tories. It would appear that the leadership of the Tory Party is infested with novices.
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#275 getridofgordonnow
The Times is already reporting the start of a brain-drain.
At the moment they're reporting on the massive increase in Australians who were here "permanently" that are now leaving, but there's been a large surge of uk-born citizens getting all the relevant papers in a bid to get out while they still can too.
"expatriate associations reporting a surge of interest"
This is one of the many reasons that we need an election. The international money markets have already realised we're finished under labour (hence the pound becoming worthless), and the general population are now realising it too.
Last person leaving please switch out the lights (sorry; forgot; there won't be any lights because we won't be able to afford the electricity)
I've been saying this for months. We are leaving Britain next year (hopefully) for six months to see if we can live in another country and several of our friends are doing the same. We are all taxpayers and we're all sick to death of being shafted.
Unfortunately, I can see Britain ending up with a mass of jobs which cannot be filled because any UK citizen worth their salt has left for another country which will treat them better. The only person who can't see this is Gordon Brown.
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279 getrid .........
Not sure if I understand you correctly.
5% interest on gilts is per annum and not compounded. Thus it would be £50 billion per annum.
If the government was unable to meet this commitment the country would be broke. I don't think the government has ever been unable to pay the interest on gilts.
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#282
And a cut in VAT only helps those with enough money, and confidence , to go out and spend money on non-essentials (read my lips; food, children's clothes/shoes and energy prices are unaffected by the reduction in the VAT rate).
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Delboy at 282...
"I repeat again....tax cut, in income tax, dont serve the nation as a whole collectively.
Wow! what part of the VAT discount dont you understand "
Derek,dear boy....if I could understand your English and its grammar,I would respond.As it is ,your posts are nonsensical ramblings..therefore I choose not to reply.
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Yes - there will be a debate on this budget + it looks like a Labour MP made a prat of himself in the process:
You can spin but you can't hide Gordon
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I find it impossible to be as confident about a turnaround in the economic prospects toward the end of next year as I see the Labour Party is. Shouldn't we address the "confidence" which would have to emanate through the banks. Shouldn't the government force the banks to be more professional and lend responsibly. Otherwise if as we have rightly or wrongly structured our personal finances through the value of our homes then if that market collapses - it will be catastrophic to our economy. You can forget the amount borrowed so far - we will be the next Iceland...it's not beyond the realms of possibility.
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The Speaker Michael Martin has just told MPs that the pre-Budget report will be debated in the Commons tomorrow, as requested by George Osborne.
http://blogs.news.sky.com/boultonandco
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#271
Goblin - your argument that the Tories were far more prudent (e.g. going into recession with 27% debt) falls apart in front of your eyes. That means it's irrelevant (as all facts inconvenient to your argument are).
Your blame for Brown for the banking problems defied belief. I know you like to pretend that tripartite regulation would have made a difference, but it's phoney. The only conceivable difference it could have made is in a more rapid response to the symptoms once the illness had been caught e.g. avoiding upset for Northern Rock etc.
The Government still owns many assets, dwarfing the size of the national debt. National debt could be abolished at a stroke by, for example, privatising the road network (though, of course, this facility will no longer be supplied free-of-charge). Cameron and Osborne shouldn't lose sight of the opportunities the current situation gives to force through privatisation that has been too politically unpopular in the past. So I'm not overly worried about the National Debt - even if it rises to e.g. 60% of GDP.
fyi I haven't dropped the protests over your dodgy personal debt figures - still waiting for you to provide a credible source with the raw data to test your assertion out
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Did I hear something in the so called "budget" yesterday about selling some of the country's assets to reduce debts.
Good idea - well it was when they were worth something, but not now. Today it would be a fire sale.
And didn't Gordo sell our gold at 200 dollars an ounce, whereupon is quickly rose to 700 dollars an ounce.
Mmmmmmm......
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286 mikepko
yes, it would be 50billion per year in interest in that situation, but the debt isn't racked up in its entirety in one go at the start. Mind you, having said that, none of it even starts to get paid back for a long time either, plus we've already got a massive debt right now, so I'm not too sure what the final interest bill would be.
Has anyone done the maths on this and found out the full interest on the figures from now until 2016, taking account of our current debt levels plus the additional debt to come, and taking into account how much (if any) of the debt gets paid back as each year goes on?
balhamu: you're good with figures and know a lot of statistics, do you know how much interest would be due on the final trillion?
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derekbarker 282
(see my 243.)
You are becoming incoherent again.
Tell me how yesterday's PBR is going to make my dinner and my gas bill cheaper (thus enabling me to buy my Christmas presents after all). You seemed to have a theory on that earlier.
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Balhamu wrote:
"Your blame for Brown for the banking problems defied belief. I know you like to pretend that tripartite regulation would have made a difference, but it's phoney. The only conceivable difference it could have made is in a more rapid response to the symptoms once the illness had been caught e.g. avoiding upset for Northern Rock etc"
EXACTLY. That's why it should work - you nip the inevitabe greed in the bud.
Brown has completely destroyed our economy.
My move to the far east fell through yesterday owing to this recession. I am now doing everything in my power to flee this country. I'm in my early thirties with a wife a two children. My wife is a tax payer too. We are all fleeing.
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Nick,
it would appear that even the Speaker reads your blog, and the comments, or at least he gets his minions to.
I refer to #109 and #16 to indicate that Project Griffin is back on track.
Dare anybody argue, it was after all yours truly who drew your attention to the fact the this was either a Pre-Budget Report or a Pre-Budget Report and a crisis budget. Ok so they now call it an emergency budget rather than a crisis one but you get my drift.
Another Griffin victory for democracy, of course they should have had a debate, I don't know why Darling Brown could ever have thought that there should not be one. Mind you who actually voted for Gordon as PM, voting papers please.
I hope that Gordon Brown remembers to name the dead this week, including the British citizen killed by an American attack in Pakistan. Or doesn't he count, because I don't think he has had any trial on any suspected actions he might, or might not have taken.
If Gordon does name the dead, possibly including the four Irish policemen, can we take it that he just forgot last week, or is he just 'playing politics' when it suits him to be serious and sombre.
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#282
I repeat again....tax cut, in income tax, dont serve the nation as a whole collectively.
It serves the nation as a whole collectively much more than cutting VAT by 2.5%.
The only people who are not served by an income tax cut are those who pay no income tax. Now I can see why you wouldn't want to cut tax on the rich because you hate them for being rich. Okay, whatever helps you to sleep at night. But I don't understand why you wouldn't want to cut taxes on the poor. Okay, as a by-product the rich would get a tax-cut too but it seems perverse to spite the poor of a tax-cut just so that the rich don't get one too.
Indeed I'm sure it would be possible to juggle the various tax thresholds so that you gave the poor a tax cut but kept those on 40% tax paying the same tax overall.
You know, so you raise the lowest level of tax threshold to (say) 10K so that nobody earning less than 10K pays any income tax and then you lower the 40% threshold so that folk earning over the 40% threshold (the 'rich') are no better off.
Hey presto. Poor have more money. Rich are no better off. Your insane hatred of people with more money than you assuaged PLUS more money in the hands of those who need it most.
But what do we get? Mucking about with VAT.
This VAT juggling is nothing to do with helping the poor. I'm not 100% certain what is its purpose since he rather harpooned any good it might do by shoving 7p on a litre of petrol.
Perhaps it was just all an elaborate smokescreen for making public the astronomical levels of debt he's planning to take on. There certainly seemed to be an awful lot of (relatively) piddling detail - 200 million here - 200 million there when the main figure was five hundred billion of additional borrowing. On top of the four hundred billion of borrowing we've ran up so far.
A quadrupling of national debt to preserve jobs. Many of these jobs only made possible by astronomical borrowing and squandering in the first place.
Starbucks franchises all selling three quid coffees to bank staff all selling wholly unsuitable mortgages to clip-board monitors all paid wholly unsustainable wages by HMG borrowing hundreds of billions.
A merry-go-round of unsustainability.
And how does Gordon 'miracle' Brown propose to deal with this unsustainability? Borrow another 500,000,000,000 quid.
To 'save' two million jobs that only exist because we borrowed 1,000,000,000,000 quid already (total increase in government + mortgage + individual debt since 1997).
Utter insanity.
We might as well abolish fuel duty and employ the two million in massive toll-booths every 100 yards on the motorway for all the value they're adding to the economy.
Sheer folly.
This government just lacks the guts to tell people the truth. And so, rather than take the tough choices they continually claim to be making they're just taking the easy way out and to hell with the consequences.
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It would not stretch the imagination too far to think that Darling, aka Brown, is deliberately digging a deeper hole, to leave as big a mess as they can for the Tories to wallow in.
In my lifetime, I've seen the same sorry state of affairs, every time Labour are in power. They are abysmal and they will never change I'm afraid.
Whelk stalls come to mind.
What sane person, if they are deep in debt, borrows more money and gets deeper in debt? In my experience, only desperate gamblers.
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If we end up bankrupt and are forced to go to the IMF - then we have to accept the IMF's terms which would include spending cuts.
Which government projects should be saved and which axed?
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#293 mike
I think there was something about selling some assets over the medium-term, yes.
But it was small-beer. More radical options are there for politicians of whatever persusion to use if they consider paying the national debt off quickly a big priority over the next 5 years or so (e.g. road privatisation, school privatisation, hospital privatisation, police privatisation)
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Nick,
with regard to the VAT changes I hope that firms realise that if they charge a fee for their services and they invoice only say every three or six months, then they must pro rata their VAT for the period up to the 1st December at 17 1/2% and for the period up to the 31st December at 15%.
Thought that I would add to the chaos because the sums are miniscule but the procedures are the same. This change should be enforced immediately, or will we see the budget signs outside the shops, buy at pre budget prices. Ha Ha Ha.
The whole VAT change announced by Darling yesterday is already turning into a disaster. Typical of Britain today, both incompetent and inept, just lie the government.
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#300 jonathan cook
Which government projects should be saved and which axed?
Ooohhh don't get me started on this one.
For a start, I think MP's have got to set an example to us all and take a salary cut and reduce their expenses to, say, £25,000 per year. It's more than generous and one fifth of what some of them are claiming. If they crib about it they can leave.
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296
conscious-h.....
We too are hoping to move to the Middle East early next year because of my wife's job - very busy.
And if it goes well (I'm 57 and a bit long in the tooth to work abroad) we might decide to emigrate.
I love England - well rural England - but wouldn't miss the cities. Too much traffic, too much pollution, too much crime, and certainly too much bad manners.
I hate the fact that as an Englishman I am ruled by Scots - and pretty poor Scots at that. Politicians - self-serving professional liars is all they are.
I hate all the petty rules and regulation - Health and Safety - Terrorism Laws use to snoop - identity cards.
I hate European interference with my life and its erosion of our culture.
And I hate the way the UK is becoming American in everyway. Language, dress, loudness, and total lack of culture.
The sooner we're away from here the better.
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#301
Schools and hospitals are already privatised. I don't think all those lovely PFI consortia would be too happy if the government went and sold their assets for them.
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#304 Mikepko
Good luck with the move.
Like you, I'm doing it very, very reluctantly. I love this country, but living is unnecessarily difficult and there is far too much state intervention in my private life.
I'm hoping to move aboard with the company that I work for, and on Thursday will get a clear indication what 'plan b' is.
'Plan c' is to do join another company that needs resource overseas.
This country is finished for a decade.
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#304 mike
Far better to be ruled by the Saudi Royal Family than Scots eh? Or are there English rulers of this middle-eastern country you are fleeing to.
And you'll see the meaning of petty laws in the Middle East I'm sure. Try not to insult or say a bad word against any royals is the best advice.
And you won't escape Globalisation in the Middle East I'm sure!
But good luck to you!
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281 You suggest that in the forthcoming debate on the economy Mr Darling will be "monstered" by Osborne. The Chancellor will more likely feel that he is being 'savaged by a dead sheep'. The two overgrown schoolboys leading the Tories are clearly out of their depth. After observing the Tory front bench, I am not sure if they could, collectively, work their way out of a paper bag.
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#308 bravesouter
...and you think Labour aren't out of their depth? We couldn't be any deeper in the sh*t than we are under Gordon Brown.
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Nick,
whilst all attention is on the budget I hope that people listen to the report about jails in Iraq, you know the country which we went to war with and now occupy.
Apparently the jails are overcrowded but worst of all the prisoners semm to complain of being tortured. This is totally unacceptable because I thought that one reason for our invasion was regime change and the end to terror, and torture.
Now we have been in Iraq for longer than WWII went on for, yet torture still occurs. Our soldiers must put an end to this. We must have a presence in the jails to prevent ill treatment.
We heard this morning that in Afghanistan President Karzai is quoted as saying that the people who threw acid over some girls will be executed, well sorry but no! This is unacceptable behaviour, Milliband must instruct the President that there should be no executions in Afghanistan, one will be enough to say that we are off.
My son was given an honourable discharge and now has an injunction against him preventing him from speaking in public. Well done the BBC for bringing to the attention of the public what is going on in our name. Yet more shame on the government. These human rights breaches must be stopped, immediately.
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When Government's borrow they are obliged to take out insurance to cover for the eventuality of the Country going broke and defaulting.
For developed economies like the UK the premium cost should be no more than nominal to cover admin and provide a little bit of margin for the insurer.
August 1st 2008 the premium was 15 basis points.
Yesterday it was 87.5 basis points, a risk premium of 72.5 basis points.
Not exactly a vote of confidence in UK plc's balance sheet.
Guess who pays the premiums?
Makes you proud to be British.
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#295
Well perry, your consistent coherent arguments add up to a whole lot of nothing really. YES.
Young Osborne and you lot certainly are afloat with ideas (not).
Take the cloth out of your ears, if that fails, clean your ears and listen in (button head)
The tories offer nothing but tax cuts for the super rich, dead wood policies in todays world, jeez are you another part time tory clown that doesn't understand basic sums
like a DECREASE in VAT.
It wasn't so long ago that Osborne was calling for more deregulations in the banking sector. (PRAT)
Are you cons really suggesting a return to the 1980's low tax and high unemployment.
Would you rather we had interest rates at 15%.
And do you really think a direct cut in income tax will help lower food and energy cost? think on numpties?
Empty and void, tory elitists, give way and support the real plan of the labour movement and our new found American comrades.
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#305 obangobang
But only a minority of schools are subject to PFI.
There are a lot of schools that are still owned by local authorities, for example.
Maybe can't sell off their playing fields though, as someone's already had those pickings.
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#113
I refer to my earlier rather frivolous comment but there was a serious side to it. Consider that now a conservative MP has removed a posting because, well he was actually right.
Mt point is that he was looking at the effect on mental health of unemployment. May I say that there is the same problem with regard to retirement, especially early retirement, for men and women in their fifties.
Many firms will retire their older workers rather than make them redundant. I hope that they have received some form of counselling because it comes as quite a shock when you are at home with somebody all day when you previously only saw them for a short time. Not everybody will be able to spend their whole day commenting on Nick's Blog or studying with the Open University. Golf is not the answer either.
I am lucky, I planned for my retirement and my previous employer would reduce the working week by one day for every year that you were closer to retirement. This gave people time to adjust, a very good employer indeed.
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269. jonathan_cook
Funny who would have guessed it.
Funnuy how they left Scotland out of the figures where you just know it will be even higher.
Funny how the government dont see this as a problem.
Clueless doesnt even begin to cover it.
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270. MaxSceptic
Its bad form to shoot the beaters or your neighbours bird...
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Nick,
I really can't understand something. Gordon Brown keeps telling us that some of the banks have been nationalised, temporarily as well. So they are not permanent. However, even if temporarily taken into public ownership then all the employees are actually state employees anyway, including the board and all the executives.
The government can do what they like with them. Why haven't they sacked the directors, why haven't they put civil servants in control. What sort of nationalisation is this, it's a sham.
When the mines were nationalised the workers became employees of the state. Surely the same with the nationalised banks. Have the workers been forced to sign the Official Secrets Act as well. How much have the banks really been nationalised, or haven't they been nationalised at all.
Remember my favourite saying of the moment, he who pays the piper calls the tune, or is this another inglorious situation for a pathetic government. I wonder what the unelected Lord Mandelson has to say.
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I'm pleased that there will be a debate on the PBR. I for one would really like to hear what the opposition are going to do if they form a government. It's very easy to just criticise and offer no solution but I think the British people deserve to be treated better by the opposition.
It does make us feel better to blame someone. However, considering that this Government has been in post now for 11 years it has to take responsibility for the mess that has occured on their watch
and it seems to be doing that.
Although accepted, a lot of people posting here (earlier today) do not like their solution. All the more reason for you party members to encourage George to come clean or for some of you who want a tory government to tell us what the alternative is -surely you know what they are going to do? It can't just be political posturing at a time of grave economic emergency can it?
The charge that the Government have gone back on their promises re income tax is not really true because for the plans to come into force they need to win the next general election i.e. we need to approve them first.
I look forward to debating the opposition proposals here when they present them. I suspect though that it will not be after the debate on the PBR!
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313. balhamu
But only a minority of schools are subject to PFI
Just out of interest how many is a minority ?
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#120 the last 10 years of labour very well summarised.
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So Gordon, Alistair and Mervyn want the banks to start lending everyone lots of money, and for us all to go on a spending spree. (Precisely what got us into this mess in the first place!)
I heard a shopkeeper talking on the radio about the difficulty he will have re-pricing all his stock ready for the drop in VAT. Shoppers will save a few pence, but this will leave a huge gap in public finances just at a time the Government is borrowing more than at any time in history.
Labour and the Bank of England have not got a clue!
Long after Gordon has been sent packing, we will still be paying the bills. Either he is completely incompetent - or this is a deliberate attempt to torpedo any chance of recovery to make things as difficult as possible for the next government.
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What, like the Tories run out of things to sell off and people to sack? This economic issue isn't really about money it's about behaviour. But, bad management and greedy people don't what to hear that like the Tories hated Teresa May (a Tory) for saying they were the nasty party.
I've pretty much quit listening to the Tories and their online wannabes because you can't have a sensible discussion and they want to grab the whole cake. It's the same ignorance and attitude all the time like nasty children trying to get their own way.
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I'm just glad there will be an emergency debate tomorrow.
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Can anyone explain to me how a £20 billion fiscal stimulus package translates into the need for an additional £500 billion government borrowing over the next 5 years? I haven't seen a breakdown of where the other £480 billion is going - or am I being naive?
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#317 TAG
My understanding of this was that the money was used to prop up the financial sector, which just happened to include banks which had been too lax in their lending.
I didn't think that the government had any jurisdiction over how they were run, which is why they can only cajole and goad, and not force them to lend money. I think they already knew this when they handed the money over.
I may well be wrong but that is my interpretation of it.
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#282 and some other postings
Derek,
You have to admit that the cut in VAT was a quick-hit target - as the Chancellor admitted.
It has no impact on the cost of food, children's clothing, council tax, etc...
It is designed as a temporary measure. So retailers should, in theory, reprice everything they have in their stores by next Monday? Just ain't going to happen.
If Darling or Brown actually walked down the high street from time to time, they'd see retailers offering discounts all the time. Or comparing their prices with other major chains.
Some of these people offer 20 or 30 or 50 percent discounts, as they are desperate to get some cash flow.
Giving another couple of pence in the pound will do nothing to attract real spending...
I disagree that direct personal tax reductions can't be made to work.
Brown raised taxes on the lower earners from 10p to 20p.
He didn't pre-announce that in the manifesto. He just did it. (I'm OK with a 45pc rate for the highest earners - after all they will probably find ways to get around it, with so much advance warning!)
Brown did NOT need to take away the 10p break. He could simply have said that it would ONLY apply to people whose income was less than GBPNN,000 (Not too difficult to work out what the actual number should be for all the highly paid "advisors" flocking around No. 10 and No. 11 Downing Street.)
In that way, people who really need it would keep limited income. They wouldn't be forced to jump through hoops to reclaim money via tax-credits.
Darling claimed - boasted even - yesterday that the government had made huge "efficiency savings" and planned even more.
But, every time a Tory or Liberal spokesman says that state spending is inefficient, Labour MPs howl nonsense about "slashing services". I didn't hear them shouting at Darling about invisible impact of such savings. (Frankly, I have no idea whether they exist or not. Anybody out there with some details about where all those savings happened?)
If the efficiency savings are real, why do taxes keep on going up? They should at least be reduced by the amount of "real savings".
Northern Rock was taken into state ownership because it had a bad business model. The FSA were aware of that. They did nothing. It is effectively being run down - just as it would have been if it had been taken into administration.
The FSA may have had some oversight of the capital finance houses were supposed to hold, to justify their spending levels. But they didn't seem to have a clue whether bits of paper saying "I'm worth a Billion" had any practical value. (I could knock out a few hundred of those this evening...)
What sort of regulation was that?
But it was Brown's idea to create this overstretched mob.
(Just like it's his idea to have OFSTED being responsible for overseeing social service work. How the hell do you think that folk, who can't even make sure that educational standards are maintained, can also check whether some poor social worker gets the help he/she needs when a kid is in trouble?????)
I could identify at least 100 people who, operating under normal business conditions, could strip out at least 3 percent of government spending, with hardly any recognition of the fact. If they were allowed to do a "proper job" they could take out at least 5 percent.
5 pc of GBP 600Billion is quite a lot.
And if they were allowed to be really pragmatic, they'd slash 15-30 Billion even before they had the new pictures up on the wall of an office they probably wouldn't use too much anyway!
This is a disastrous situation for the UK.
Created because there has been inadequate control of the means (our taxes) and a lack of regulation.
(By the way, how are you children doing?)
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#139 are you living in fairy land?
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Why is Gordon so optimistic that we will have a short recession?
Is it because he has gone around all the countries that actually "fixed the roof while the sun was shining" and has been talking up the idea of "fiscal stimulus"?
Maybe Gordon hopes that the combined power of all the countries in the world who managed their finances well, could in turn kick start the one country that didn't bother with sound financial management?
Brown to rely on other countries?
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#176-
very good point indeed.
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If this is true, then it shows the contempt that Labour have for parliament and the British people
"Can this really be true? I may be behind the curve on this and it has been written elsewhere, but I hear that Alistair Darling is ducking out of leading for the government in tomorrow' debate on the Pre Budget Report and that his stand in will be the Pontefract Princess, Yvette Cooper.
What an insult to Parliament, if true."
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322 CEH
Why don't you just lighten up a bit Charles ?
Perhaps you could go and spend some of the new extra money in your pocket, which would boost the economy and cheer you up a bit.
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Charles_E_Hard.... @322 wrote:
"... you can't have a sensible discussion and they want to grab the whole cake."
But as you've repeatedly written you don't debate anyway.
As for the cake: "Let go".
Now do tell us how - according to the sainted Brown - the UK is 'uniquely placed' to weather this recession (ex-"downturn") bearing in mind that, as the BBC report:
The Organisation for Economic Co-operation and Development (OECD) has warned of a "severe" economic downturn in the UK in 2009. The Paris-based body has predicted that economic output in the UK will fall by 1.1% next year, more than any other major G7 country.
Damn Tories - it's all their fault.
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#322 CEH
I've pretty much quit listening to the Tories and their online wannabes because you can't have a sensible discussion and they want to grab the whole cake.
..there's no cake left, Charles. Gordon and Alastair have had it all - and eaten it!
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#174
The er, "Shower of benefit thieves, illegal immigrants, grabbers and do-gooders"?
Whats wrong with benefit thieves, illegal immigrants and do-gooders?
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I'm not sure if this will get to No.1 on the MTV chartshow this week, but the PBR has made it to video music format
....... I don't like the look of the backing dancers. Let's hope they don't play Glastonbury.
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There's a petrol price website here in case anyone isn't aware of it:
http://www.petrolprices.com/blog/fuel-prices-to-rise-as-motorist-hit-with-p-duty-increase-106.html
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VAT to go up in 2011 to 18.5%
Is that just after a general election?!!
Fiscal kick in the Ed Balls
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Ok the country has high public debt and there is extremely high personal dept, surely if Darlings rescue plan of encouraging everybody to spend more does not work it is only going to have to mean more dept, this can only mean a complete meltdown of the country. No party has the guts to say we have to go through a bit pain, goverment and public alike who have over borrowed or have big credit card dept must readjust their spending, espeacially the Goverment. If not it will surely all end in tears and responsible will spend many many years bailing out the irresponsible.
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I'm honestly terrified. This could bankrupt the UK. Will the government bonds sell? I'm told that insurance costs more for UK bonds than the rest of Europe. No wonder: the government's growth forecasts are a bit of a fairy story. Who's the chief fairy, I wonder.
As for forcing the banks to lend at 2007 levels, fine but it's going to cost more. Who in their right mind would expect a bank to lend at those same reckless levels without considering the risks of a downturn? Who would lend someone the price of a home without demanding a margin of 10-20% in case something goes wrong and the asset value falls?
Furthermore we should stop caning the banks for greed. The government knew very well what was going on and happily took a huge dollop in tax presumably in the hope that it would continue ad naus. They knew very well that banks were borrowing short term to fund long term loans - that's what fouled up Northern Rock. They knew about the credit bubble and did nothing. The media had been pretty vociferous on credit and house price bubbles. But Brown was basking in it while it lasted.
It's more dire a situation than most people think.
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322. Charles_E_Hardwidge
You really should read the article that JC posted at 269
Try to outline just how this is sustainable in real terms, try to avoid your usual rhetorical garbage and explain how this can continue.
Like it or not the UK is faced with massive public sector cut backs, that will lead to strikes and a lot of pain for the public.
The labour government dont want to be seen to be doing this so they are borrowing vast sums to tide them over and retain an over bloated, over wasteful, inefficient public sector in place until the next election.
They know they have lost the next election and they know that the evil Tories will have re-landscape after their scorched earth policy. Brown is just buying himself time with our taxes.
Every recent labour government ends in economic disaster. Name one that hasnt?
SO come on explain how all this growth in public sector jobs is sustainable, where does the money come from.
Any businessman knows that the admin department can not be bigger than the production team. But if you know different do tell!
Stand by for more rhetorical garbage everyone….
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#242 - good point
very very few labour MP's have experience of running a buiness and if they did it would surely be like present public finances-"bankrupt". History shows they are only any good at wasting other peoples money.
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120. PhaetonFlanFlinger
Way to go....nice post
2 corrections though.... hate to be picky
Bin lids
Its one inch open for a fine. 3 I think might be prison.
Immigration
Decreasing now, they are all fleeing.
Bloody good summary though
A star.
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It seems strange people are surprised by the 500 billion pound increase in National Debt solely to win the next election in Oct 2009.
After all Gordon paid 2.7 billion just to try and win the Crewe and Nantwich by election, a safe labour seat which was subsequently lost.
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#296 conscious hypocrite
It wouldn't have been 'nipped in the bud' though would it? It could conceivably have led to more rapid reaction once the problem existed and prevented the panic that led to people queuing outside the Rock to withdraw their saving, not prevented it in the first place.
The FSA performed exactly the same functions with the same people as it would have done had these functions been performed by the BoE. What would have changed is the communication channels may have been slightly clearer (though being in one organisation doesn't necessarily make this happen)
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This comment was removed because the moderators found it broke the House Rules.
#322 Charles_E_Hardwidge
"they want to grab the whole cake."
Yes, this is the old labour argument.
Labour is traditionally obsessed with how to divide up the cake.
Unfortunately, they have no recipe themselves, or an idea how to make a bigger cake.
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Amazing. The Spectator article someone posted before is spot on. Repeat the fact the Tories will do nothing (a lie, but then this is Brown and Campbell orchestrating this) and some fools will believe you. Cooper (fix your hair love) didn't defend the budget on newsnight, no she spent the entire interview pointing (how common) to the Tory saying that THEY would do nothing. I wanted Good Old Vince to lay into her more but he is not a man to score purely political points. The tide however is that amongst many people I know, there is a sense that they will not be voting Labour. And these are working class to higher earners. Brown is the main issue. Apart from his appaling record (which I kindly explained to a group of them) he is off putting to voters. The question is, what will the Tories do. They have heavyweights like Clarke and Hague who should step up and weigh into the debate. There are still people that make apologies for the government without understanding basic economics. Some actually believe it is a natural cycle. Again I worked in Europe a lot and the governments of the Netherlands, Germany hell even Spain all manage to introduce fiscal stimuli because they managed to hold on to a surplus in the boom. The Dutch announce when there is money left over (that happens there) and explain to their people that it will go into their savings. They are prudent. Not Brown. No matter who is at the helm there, they stick to a spending and saving plan.
That is why those countries will recover and this country won't.
But Brown has it easy. He has messed up enough so the Tories if they win, will get into trouble and if Brown wins (and I am off to another country) he has 5 years to raise tax and then drop them again before an election takes place.
Brown is not in it for you and me, he is in it because he wants to keep the job. We are talking about a man that has spent ten years trying to get Blair (how I miss him! Unbelievaby) out of the top seat so you don't think he will let something like a recession and the largest debt in peace time hold him back do you?
Why do you think he brought Mandeleson back? And Campbell and that God awful Derek Draper? (well they are all awful).
When Mandelson was messing up the Lions tour in 2005, the players nicknamed him Sebastian (after Little Britain's character). He hated it and was always the butt of the joke. This man is now yet again powerful in the British government.
The BBC I think has been the worst disapointment for me. I am a staunch defender of it but have been so completely let down by their coverage. They really have run scared since the kelly case (and let's not mention the fact alistair Campbell still has the audacity to show his face) and are incapable of even appearing biased.
So. A tory government in 2010? Well if I were the BBC I'd be scared.
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Probably a really large fiddle is being enacted by the mortgage societies. Listening to BBC Radio 4 this evening, I heard how people who fall into debt on their mortgages are refused extra time to make up their payments and interest debts. Reasonable offers made are refused, causing surprise in the Courts where the cases are held. Decent, upright people who have never caused problems are allowed no leeway.
I wonder if the mortgage companies are keen to foreclose so that they can gain property at rock bottom prices. These can either be added to a stock kept in reserve for better times, or perhaps they are selling it to overseas property developers who have their own agenda.
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#300
one problem here, I reckon even the IMF coffers are probably getting a bit low by now
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Has anyone noticed that this VAT decrease is smoke and mirrors?
Supposing I am a shopkeeper selling an item for 100 GBP. I would normally add 17.5% VAT on top and charge the customer 117.5 GBP.
If I now sell the same item at 100 GBP and only add 15% VAT, the customer has to pay the grand total of 115 GBP.
This is only a price reduction for the customer of just less than 2.13%. This is hardly going to convince many people to go shop the country out of recession!
It is all just smoke and mirrors by the Labour Government.
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322:
Your post tells me that you haven't quit listening to The Conservative posts at all. Come on come clean! You surely can't totally agree with the labour rantings on here!
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#319 carrots
After a bit of digging:
There are 22,734 state schools in England (448 nursery, 17,361 primary, 3,343 secondary, 1,078 special schools, 448 pupil referral units and 56 academies and city technology colleges).
There are 118 English PFI projects in schools with a total capital value of £5 billion - many of these are at the LA level and so involve many schools [from the HMT PFI signed projects list]
At July 2007, 651 schools using PFI were open and a further 232 were under construction - 884 schools had been or were being built under PFI according to a written answer in Parliament
884/22734=3.9% of schools built under PFI
Does this count as a minority in your view?
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"Even if unemployment reaches 3 million, that still leaves 90% in secure jobs. Most people will suffer not at all in this recession: on the contrary they will do well as prices fall and the real value of their earnings rises."
The voice of those 'nasty Tories'?
No. Polly Toynbee - the voice of true Labour - in today's Guardian.
(Probably emailed from Tuscany).
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Here's a twist to Barrie's famous tale: Instead of Peter Pan, Darling leads them all to Never-Never Land!
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#355 If Darling is the new Peter Pan, is Yvette Cooper Wendy? Ugh!!!!!
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One thing for sure, Prudence has gone out the window and now its only New Labour by name.
Labour have never left this country with a healthy economy, their problem is waste spend and more waste.
Just how can I ever trust them again, especially under Gordon Brown who's mantra bellowed in our ear holes every time I put the news on... and what ideas has Alister Darling prevailed in this current situation, remember him when he wasn't Chancellor?
The 1% hike in VAT cannot certainly be no error - no way! What in blue thunder is Gordon Brown doing about it if it was? Is he really that much of a undersized mouse not to do anything about it - I want to know why was it even in print!
Dare the BBC ask instead of piffling about it?
After this fiasco we heard on Monday anything can happen, putting VAT up is only one option, don't forget these folks work by the back door.
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Seriously, I've nearly 100 percent tuned out the Tories and people who just post online for thrills and spills. I'm not in your target market and you need to deal with that. Bottom line: you have to give me a reason why I should be interested or give up any of my time to listen.
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254. balhamu
..... But isn't selling things we own off at a discount not really improving the Nation's Balance Sheet
This family silver, your talking about all those loss making industries right, you know the ones that needed huge tax payer subsidy to keep them afloat.
Im wondering, how exactly is a business that has lost millions for years exactly valued.
The only value that I can think of is their potential to make a profit if released from public sector thinking and run by the private sector.
Government couldnt run a market stall.
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#348 phoenixarisenq
"I wonder if the mortgage companies are keen to foreclose so that they can gain property at rock bottom prices"
Yes you are probably right!
Another form of carpetbagging. And no doubt an unintended consequence of Labour's half-baked bail out.
Instead of now threatening the banks to lend even more money, Alistair would have done much better to require them to help those already in debt, in return for Government funds.
Forcing banks to make more 'bad loans' can only make the situation worse. Helping those in debt is a better solution.
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djlazarus@268
Bill White, leading economist and head of monetary policy, at the Bank for International Settlements spotted the problem 2.5 years ago:
http://www.telegraph.co.uk/finance/2932605/UK-policy-blamed-for-soaring-debt-levels.html
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atrisse@339
"Will the government bonds sell? "
There was a piece on the news tonight with ?a bond trader saying that there's already an over-supply of bonds in the market. I'm no bond expert, but I guess that means the govt has to pay even more to get them taken up?
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shellingout@325
The banks ARE lending - to creditworthy customers. Mortgage lending is probably down because people don't want to buy houses today if they're going to go down in value next month. Lenders are also requiring sensible deposits because they're also worried that house values are still going down and, since people haven't saved (all those student debts to pay off?), they don't have the money for the deposits. If the govt FORCES banks to lend, is it going to make them lend without requiring sensible deposits, or to businesses or people who aren't reasonable credit risks, creating more bad loans? It's all spin again. Blame the naughty banks and fill the media with nasty comments.
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120 and 122:
agree, agree, agree!
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#304 mikpedo
I'm the same age as you and I agree with your every point.
I'm trying to persuade my husband to move to France, not one of the tourist areas, just somewhere peaceful, rural and away from the insanity prevalent in the UK from this government and it's broken society which can only get worse as times get tougher.
Another problem in 2015 will be the energy gap which are now inevitable because Labour has spent the last 10 years prevaricating over a secure nuclear energy supply. We'll miss England, and I fear we'll be watching it disintegrate on French TV.
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Goodness me, it's 30 minutes past midnight and blogs sent in around 9:00 in the evening are only now being moderated. I hoped to see some interesting postings, but it seems that there is a "go-slow" at the moderators' desk. Is it because certain writers have such long blogs it takes hours to process them?
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353 Max:
Yes Polly, everything is actually just great. I can feel myself getting richer by the day ...
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365:
The problem with this is that as all the disgusted people including the job providing high earners leave the country and are replaced in part by benefit seekers etc. the Opposition vote dwindles and the situation perpetuates itself.
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#368 sicilian
The problem with this is that as all the disgusted people including the job providing high earners leave the country and are replaced in part by benefit seekers etc. the Opposition vote dwindles and the situation perpetuates itself.
Unfortunately, yes it does, but unless everyone takes to the streets, which is a bit pointless now - after the event, governments will just do what they want to do anyway. We have family here and given the choice we wouldn't go and leave them, but the next few years here look pretty bleak, and we just can't afford to be taxed any more.
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352. balhamu
Yes it does, many thanks, interesting.
But I was rather thinking of new schools
It would be intersting to know what proprtion of new schools have been built and funded from taxation v the number of schools built under PFI
Same with hospitals.
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#359 carrots
You miss the point I was making though, which wasn't that Government should be running these industries or that they should have been privatised (though some of them - e.g. rail - should not have been).
Robin (and others) suggested that the previous Government was prudent and responsible, pointing to the decrease in debt 1979-1991.
I pointed out that the Conservatives ran current budget deficits totalling over 75 billion 1979-1990 (compared with the small current budget surplus of 2 billion 1997-2008). And that the only reason debt did not increase massively was because of privatisation proceeds and peak North Sea Oil revenues.
Hardly prudent! Especially as those assets privatised were done so at a discount of 10-30% (and higher for council house sales).
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#370 carrots
You suggested that there would be no proceeds from privatising schools (making a side point about the impact that PFI has had on state assets).
I showed that over 96% of schools are still in the state sector, suggesting that there could be (though many are Foundation schools owned by the trust, so I'm unclear whether the Government would get the proceeds of any sell-off). I wasn't suggesting it was a good idea btw - just that the state has a lot of assets that politicians could, if they wished, sell off to rapidly pay back the national debt.
I suspect that most new schools (and hospitals) have been built with PFI - that is correct. But I don't see the relevance to the point we're talking about
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#370 carrots
And you might be interested in the 'Government Doomsday Book" - the National Asset Register
337 billion of assets held by central government in 2007 (e.g. strategic road network of Highways Agency valued at 72 billion pounds - and more if road pricing is allowed in any privatisation).
This excludes the banking industry assets we now own e.g. Northern Rock).
This excludes all assets owned by local authorities (and TfL for example) - which will also be in the hundreds of billions.
Lots of scope for an innovative government to make a packet in privatisation to pay off the national debt if it wants to.
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373:
'Lots of scope for an innovative government to make a packet in privatisation to pay off the national debt if it wants to.'
So what's stopping them?
Could it be that they aren't in fact innovative but steeped in old dogmas?
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#374 sicilian
A lot of the savings will be very politically controversial (e.g. selling off the strategic road network and allowing the new private owners to charge tolls) and will also constrain the Government (e.g. private companies will be less concerns with wider strategic aims for transport in setting tolls for strategic roads).
I suspect that the Government will bring forward approximately 50bn of privatisation in less controversial areas to help get the national debt towards its 40% target in the 2010s.
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373 balhamu
cool, so even if they sold every single government asset including all the roads they'd still only pay off about a third of the trilion pound debt.
That puts it all into perspective. If you'd expected that to defend your cause then you've just shot yourself in the foot!
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#376 getrid
Don't forget this all excludes local government, which will add hundreds of billions onto what's available.
It will certainly get debt back down to ~30-40% GDP, if a significant portion of these assets are sold off.
This was how Conservatives reduced the debt in 1979-1991 and why they are heralded for 'prudence and responsibility' by many on here. Labour have the additional advantage of not having run up massive current budget deficits during the good times.
I don't really have 'a cause' to defend other than moderating some of the ridiculous assertions made by some right-wing contributors to this blog.
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372. balhamu
I wasnt really making a point in this particular instance I was trying to find out how many, if any, new schools and hospitals have been built through taxation.
I have never seen any figures for this.
Many pro labour supporters argue that higher taxation has led to many new schools and hospitals being built.
Some pro Toris argue that not one has been built through taxation and that all are PFI projects.
The point that I was trying to get to is that if none or very few have been funded from taxation then this is poor show given the massive increase in taxation over the last decade.
Labour regularly argues that it has fixed the infrastructure that the Tories had previosly allowed to rot.
If PFI has been used to do most of this then this is not a fair reflection of the facts.
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358. charles_E_Hardwidge wrote:
Seriously, I've nearly 100 percent tuned out the Tories and people who just post online for thrills and spills. I'm not in your target market and you need to deal with that. Bottom line: you have to give me a reason why I should be interested or give up any of my time to listen.
You have to give me a reason why I should be interested or give up any of my time to listen.
Odd comment... why are you here then?
Note you didnt answer the question about how public sector spending is sustainable
Ill put you down as a dont know.
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377 balhamu
"Labour have the additional advantage of not having run up massive current budget deficits during the good times."
eh?! have I missed something? All the figures I've seen show humungous public debt right the way through the boom under labour; massive debt from start to finish. The only time it wasn't a huge debt was the first 2 years when they were following tory spending plans, thereafter it's just constantly grown.
Are you just saying that to wind us all up?!
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#378 carrots
I would suggest not much of the 'new build' investment, and a lot of the 'equipment' investment.
Increases in taxation have funded increases in expenditure (to allow Labour to increase current spending and not increasing borrowing to do this - and meet their first golden rule to balance the current budget). They have, in the main, not financed borrowing.
PFI projects have funded 56 billion pounds worth of investment (as I showed above - much of this is coming on-stream in future years though). Total investment under this government since 1997 has been 178 billion pounds, though it's difficult to say how much is PFI because it's unclear how much is on-stream already or if PFI debt is included in net investment figures.
I'm sure the Institute of Fiscal Studies have given it a good go at some point. PFI just ain't transparent enough to work out whats happening quickly. I can fully agree with that critique (and have in the past on this board too).
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#380 getrid
Do you understand the difference between current spend (the day-to-day bills) and capital spend (investment in e.g. hospital equipment, school buildings - basically preparing for the future rather than spending)? Or do you just pretend not to?
Let's use an analogy from personal finance (as you right-wingers seem quite keen on that - with the national purse and borrowing on the country's credit card and so on).
The Government has worked overtime (poor analogy I know - the country might be a better choice of words - but bear with me) and earned enough money to pay its gas bills, water bills, electricity bills, food bills, petrol expenditure and so on.
It has borrowed money to go back to university (to improve skills and improve future earnings), to purchase a house (which will avoid having to make rental payments in the future and will make a healthy return over the long-term) and a car (again, saving money on taxi bills and transport costs over the long-term).
The government have balanced the current budget. That means that they have 'earned' enough money (through new stealth taxes or whatever you want to call it) to pay their day-to-day bills (such as police spend, education spend on teachers, social care spend, benefit spend, student loan interest subsidies and so on). At April 2008, they had a £1.6 billion surplus on their current budget.
The Government have borrowed money (both on the balance sheet and off it through 56 bn of PFI spend) to finance investment.
They were quite open that they were doing this - indeed, that was the approach set out in their Golden Rules in 1997.
Better than an approach were you sell everything in your house so you can eat out at fancy restaurants and give presents to your mates, while deciding not to take out that loan to go to university to improve your skills, as the 1979-1997 approach could be typified as using the same personal finance analogy.
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#382 (to add to #381)
Before you pick me up on the increase in borrowing to pay the day-to-day bills during recession, here's another analogy from personal finance.
You've been burgled and badly beaten by the burglars meaning that you have to work fewer hours, and have lost lots of equipment that your business depended on.
Yes - you could have, in retrospect, lived in a nicer area, invested a lot more in a high-tech burglar alarm and a better lock on your house, but you have taken the same precautions as other people.
You borrow some money to tide you over the next couple of years while you recover and replace some of the things in your house that were stolen.
(banks have been behaving badly, the Government could have regulated more to prevent this, but they did as much as any other country did. Borrowing in recession is the right thing to do to tide the country over until it is back on its feet)
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re: 383, balhamu
Here's a better analogy:
Brown inherits a lump sum from his prudent old aunt, and then, feeling flush, he dashes into a casino and gambles it all away. Running out of money, he bends a hardworking taxpayer over the table and steals his wallet. Rushing back to the roulette wheel he cries 'double or nothing! Double or nothing!' Brown does this all night, losing repeatedly, getting deeper and deeper into debt and mugging taxpayers to cover his losses... until the mugged taxpayers all join forces and teach Brown a lesson he'll never forget.
Morning comes. A broke, bruised, bleeding Brown staggers home in tears, reeking of gin. Sarah stands at the door of No. 10, rolling-pin in hand, frowning and awaiting the bailiffs.
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383:
You're too kind to The Government of the day! The argument is how much blame do they take? At present apparently none. No apologies , nothing! Not us Gov!!!!!
Not good enough.
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#385 I'm not saying that.
We could have invested in a better burglar alarm and hired a security guard (regulate banks more strictly). That much is true. We could have also done less home improvement over the past 11 years and accepted that our roof leaks, that our skills were quite low and we were quite unhealthy (poor infrastructure, massive poverty), and instead charged a bit less for our services to luxury clients (lower tax on the rich) and paid off our mortgage a bit quicker (reduced the debt)
None of our friends invested in this super-duper security though, and our meddling aunt (who's a fine one to talk as she sold all the family heirlooms to pay for big parties when she was a little younger 20 years ago, and then racked up a huge credit card bill to continue partying once all the heirlooms had been sold) was telling us all this security was a waste of time anyway and that we had too much and were making our house too like a prison forbidding for visitors (we should have reduced it and the level of security we had was driving away financial firms to other countries).
Read my comments - you'll see I accept that the Government could have theoretically done more (though how politically feasible that was is another question entirely)
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#384 ptpp
So what casino has Brown been gambling our money in then?
Unless you accept Dave's fairy-tale that this problem has been caused entirely by Brown taxing too much, regulating too much (or too little depending on what day of the week it is and what colour flip-flops Dave's wearing), not paying back the National Debt enough, investing too much in schools etc, and that this is a British problem (what do you mean there's civilisation outside the UK's borders - I don't believe you).
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In this current situation why did the chancellor not produce a simple and effective vat saving by making vat free on all building works and materials, he could limit the time for that, but it would encourage many people to spend and this would improve the housing stock, create work across the board. Many people have unfinished diy or building work in their home a vat amnesty would encourage these to be finished improving the value of the home and the well being of the people. Keep builders employed and competitive as currently many builders compete against vat free buildiers. It also reduces the anomoly that only new buildings are exempt and means that essential maintenance will be carried out more readily saving future larger bills.
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