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The pre-Budget report in which Darling is Darling

Nick Robinson | 13:05 UK time, Wednesday, 9 December 2009

Low-key, business-like with no Brownite flourishing of political dividing lines. This is the Budget (okay, the pre-Budget report) in which which Alistair Darling has decided to be Alistair Darling.

PBRAs a result, he has made it harder for the Tories to mock him and his economic projections which confirm that Britain's recession was deeper and longer than expected and than in most other countries.

At the same time, he has spelled out his political aim by claiming that:

"The choices are between going for growth or putting the recovery at risk. To reduce the deficit while protecting front-line services or cuts which put these services in danger."

His hope will be that George Osborne does not tone down his reply, so that he can claim to be the serious man getting on with the serious and unglamorous job of running the economy, while portraying his opponent as inexperienced and untrustworthy.

It's amusing to think that it is precisely this low-key political style which led Gordon Brown to want to remove him from his job.

Update 1319: Alastair Darling is not announcing how every department's budget will be cut, or listing the programmes that will be cut.

He has, instead, just announced £5bn of savings as an example of what can be achieved.

He listed residential care for the elderly; pension personal accounts; IT savings; legal aid; prisons and regeneration budgets. It will be interesting to check the details.

And National Insurance is - as predicted - going up by 0.5%, raising £3bn per year.

Comments

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  • Comment number 1.

    HOW will the UK pay back the billions of debt?????? - this is party political posturing plain and simple. I am so fed up - DOES ANYONE OUT THERE BELIEVE A WORD THIS GOVT SAYS???????????

  • Comment number 2.

    Let's face it, no Government would announce bad news before an election. We all know that the next Government is going to cut public spending hugely. The question we'll have to decide is who do we trust to do that. Tories simply do not believe in public spending which is why the manifesto David Cameron wrote for the last election proposed taxpayer subsidies for private health care and private education.

  • Comment number 3.

    In announcing that the RPI was -1.5% in September and that would have normally meant no increase in the State pension in April 2010 he neverless said it would instead increase by 2.5%. Good news - but he then did a Brown codswallop by claiming it was a real increase of 4%!

  • Comment number 4.

    Do we need 3 different blogs on the PBR nick? Wouldn't it be more efficient (word of the day) to keep them together, and just update as you go?

  • Comment number 5.

    announcing saving and achieving them are to different things.

    Start by cutting the family courts that will save billions

  • Comment number 6.

    "Alastair Darling is not announcing how every department's budget will be cut, or listing the programmes that will be cut.

    He has, instead, just announced £5bn of savings as an example of what can be achieved."

    In other words he is pulling numbers out of the air and hoping we are stupid enough to fall for it?

    If the Tories came back and said they would make £10bn in savings would you expect Labour/the media to turn around and accept it without asking them how?

  • Comment number 7.

    I have to admit, i have not watched AD deliver his pbr, but from what I have read in news reports, it does not go far enough to cover either the deficit or Labours current spending.

  • Comment number 8.

    #1 Anyone who believes a word that any politican says is too naive to live.

  • Comment number 9.

    "He has, instead, just announced £5bn of savings as an example of what can be achieved"

    Correction - he has re-announced the savings Gordon Brown announced earlier this week. Some habits die very hard.

  • Comment number 10.

    "ronreagan wrote:

    HOW will the UK pay back the billions of debt?????? - this is party political posturing plain and simple. I am so fed up - DOES ANYONE OUT THERE BELIEVE A WORD THIS GOVT SAYS???????????"

    APbbforum seems to :-)

  • Comment number 11.

    Nothing short of a savage slash and burn will get our bloated public sector and hence debt, back down to manageable levels. Darling has copped out yet again. His lot are always the first to say to the tories 'where's the detail?', well the boots well and truly on the other foot now. What's he bothering for anyway, he'll be out come the election just like all the other wasters of the past 10 years.

  • Comment number 12.

    So is his 5b of savings NEW or just a reanouncment of mondays 3b G Brown anounced which in turn a partial reanouncement of any erlier cost cut.

    IE are we now cutting 8billion a year or 5 or 3?

  • Comment number 13.

    #4 having 3 blogs means that the anger will be dispersed, divide and conqour, first full of a state owned media, controlled by the state

  • Comment number 14.

    From Article "Alistair Darling has decided to be Alistair Darling."

    Nick, that seems exactly like New Labour deciding to be.....wait for it.....New Labour.

    We've seen what New Labour have given us over the years so I think we're all on the same wavelength here of what to expect and what it actually means. Alistair can say whatever he wants but I doubt he's being honest enough about the facts and the fact that he's being so vague on how to recover funds to clear the debt is the final straw in my book.

    I'm no fan of the Tories but I'm 100% certain that we need to oust this government. They have failed time and again and we, the people, are left with a huge burden while MPs are still earning far more than the average person for failing in their job.

    Like the bankers, they jumped out on to thin ice without properly assessing the risks they were taking and now the ice has broken and we've all gone plunging in to the cold depths. Still, we seem to end up rewarding MPs for failure as they get away with their own bonuses, you know the ones, they're called expenses.

    It's all well and good saying the burdens should fall on the broadest shoulders, I say those that made the mess should be the ones to clean it up.

    I always throw litter in bins yet I have to help pay for street cleaners, how is that fair?

    A small example but demonstrates the point. The MPs, the regulators and the Bankers all failed and made no attempt to look at, assess or control the risks adequately and it is the public at large that get to suffer.

    I don't have an issue with bankers, I have an issue with greed, which seems to be the main fuel that all these top bankers seem to run on. However, I don't want to see our government hammering down on the wealth creators needed in this country who may end up departing for countries that offer a better deal.

    After all, due to this government, the only thing our country is really good for is our Banking sector, that's why the government didn't want to regulate them. This is why the government should be sacked for the banking failures.

    I'm no genius but I know how to assess risks and work within budgets. These are the two things our government and the greedy bankers have failed on so can we please just get rid of them.

    Bring on the election Gordon, I look forward to NOT marking my cross against New Labour. New Labour is not the party of the people and I hope Gordon loses. If Labour do well, I may even consider the fact that the voting system was rigged by New Labour spies.....after all it's a good way to make use of the Terrorism acts by investigating potentially fraudulent votes and correcting them.

  • Comment number 15.

    Darling bottled it. Talk about spending, but little of cuts. Osborne is right - a pre-election report.

    So Labour can't be trusted - they won't unveil where the axe will fall until after the election. Will the Tories now step up and be honest? Time will tell...

    Pleased though that the MoD civilian workforce is to be trimmed. I know a good number of people who went to work at Air Command in High Wycombe, and the stories I've heard about pointless jobs... They have people dedicated to manipulating spreadsheets and answering MPs questions for Christ's sake! Can't people do these things as PART of their jobs?

    The other measures targetting the public sector won't go down too well. Expect strikes.

    50% on bankers bonuses. Would have preferred to see the rate set at a more penal level, say 90%, but it's better than doing nothing.

  • Comment number 16.

    Would NOW be a good time to join the Euro ?.................

  • Comment number 17.

    Labour lies, labour spin, no answer to massive debt.
    Black is White accordingly to labour.
    How are labour getting away with it?

  • Comment number 18.

    I'll wait for the small print to be analysed before making any judgement.

    Mind you the cost of a newspaper a day as a pension increase fills my heart with joy 8-D

  • Comment number 19.

    So let me see... Plan 'A' - tax and spend, didn't work so lets's do more of Plan 'A'... more tax and spend.

    Incompetent, arrogant and stupid. Also showing shocking cowardice at the inability to get to grips with the stunning car crash they have created.

    This is the equivalent of standing at a motorway pile up and offering to fill all the cars up with gas.

    Do they have the slightest idea or shame about the mess they have created?

    Theft. Pure and simple theft.

    We made mistakes; you are going to pay for them.

    Call an election.

  • Comment number 20.

    #2 what a farcical comment!

    After all the difficult decisions and appalling pain of the early 1980's to get public finances and the country back on its feet again, here we go back to the 1970's again . . . actually, it's even worse than that. And Old Labour have at last shown their true colours, hence the sheer glee of their left leaning supporters on these and other blogs.

    The reality is that post the election, if Labour are re-elected, the tax rises on everybody, middle classes especially, are going to be very, very painful. As you say, Labour will cut the public sector less and tax much much more.

    My view is that the Tories will also be forced to raise tax to stave off ruin and will do their best to protect the poorest - something which despite the Left's propanganda - we can all agree on. The only difference will be that the Tories will raise tax less punitively and cut public spending more. It was a clever trick to re-label tax and spend as secret tax and investment in public services, but the wheels have just off come even that spin.

    We really are facing economic and fiscal disaster - after a boom that should have left us with a huge cushion against the recession.

    And 71% marginal rates of tax on the bankers (50% on the pool then a further 41.5% on the remainder paid out) will simply drive them all offshore. You will no doubt say good riddance, but the country will be the poorer and the French will be in hysterics.

  • Comment number 21.

    Well,a lot of it had to be done, but I hope that as the economy picks up he will quietly shelve most of it.
    Tax at 50% is a bit 70s and nobody really buys it as a good move, not even him,as it will disincentivise the vast majority who only get into that bracket by working extra time.
    He is predicting the economy will start growing early next year ,on the day after Reuters have reported that the Economy started growing in the 3 months to November.So he knows he is right.
    Cheer up, Darling!
    It looks like he is being pessimistic on his forecast....I think we are due a bounce of about 3% in 2010 and am prepared to stand out against the tide on this one.
    At my son's school fashion show, 500 mums dolled up to the nines and money got spent before it and during it like there was no tomorrow.
    Unemployed labourers report that they have been offered work starting in January.
    Can anyone find a cleaner at the moment?
    Noticed all the new restaurants opening up?
    Is it really as bad as the gloomsters are saying?
    There is huge pent up demand for housing,both to buy and to rent,which as the credit flow improves wil result in a return to mortgage eligibility for millions.
    Darling is so determined not to be proved over-optimistic that he is actually being a bit gloomy.....and it is still too early to be cutting the public sector as it was the only thing that has kept the private sector going.
    On my street there are no longer any empty shops.
    Darling is obsessed about looking glum and serious, unflippant about the losses and the anger of Middle England, but he has not forgotten that there is an election around the corner.
    Glumness now allows the interest rates to be kept low for another 6 months which keeps Govt borrowing costs down,and improves the feelgood factor of those lucky enough to be on low-interest mortgages.
    Yes our borrowing was big, but what a superb way of making it cheap with the low interst rates....Spot on!
    Looks like he is getting the bad news out of the way now for a giveaway in the Spring!
    I do not think the opposition have anything new to say at the moment.
    The one year levy is smart, because we want to punish the banks, but not too much and not for too long, and in any case we own some of them ourselves.
    We need them to grow so that we can recover.
    The markets have taken all of this in their stride.

  • Comment number 22.

    BEEB Can you please either change the mural behind Andrew Neil and guests, which shows petrol on sale or 97.7 per litre or, preferably direct me to the forecourt of the garage selling it!!

  • Comment number 23.

    I love the way this Government produce forecasts for 5 years time ,yet are unable to even get this years right.

    With luck, they wont be here then, and they will be living off the excessive pension tax payers provide them with.

  • Comment number 24.

    Woohoo - he's reduced bingo tax. Seems like a tiny detail, but really it's pretty symbolic of this whole sham PBR. There are serious facts we need to face and measures we need to take - but what we've mainly got is tinkering at the edges stuff like this. He knew that the headlines were going to be all about the banker's bonuses.

    I know he's not stupid and must be aware of how radically we need to transform the business and finances of government, but putting them off into a vaguely defined future (conveniently after an election) is going to do nothing to bolster market confidence.

    Just announce some proper cuts man!

  • Comment number 25.

    Yawn yawn - let's have the general election.

  • Comment number 26.

    Bets on how long before it is IMF time?

  • Comment number 27.

    These governmental magic shows are very entertaining. Money appears and money disappears. A raise in taxes....what a surprise.....don't forget to write your bankers a holiday greeting card of thanks. Seems the bonuses paid to bankers exceed the tax increase, but we shouldn't dwell on the past.....or the present....or the future.

  • Comment number 28.

    Nick you're getting as good at Mandy at Labour's Spin.

    "As a result, he has made it harder for the Tories to mock him and his economic projections which confirm that Britain's recession was deeper and longer than expected and than in most other countries."

    Of course Nick. The complete waffle he's projected over the 2 years is now bullet proof from criticism. Now you say he did get it wrong all along and this means we all pat him on the back and say well done Darling for coming clean with us now! He hasn't though has he Nick? He's just papered of the chasms, not cracks.



  • Comment number 29.

    "Alastair Darling is not announcing how every department's budget will be cut, or listing the programmes that will be cut.
    He has, instead, just announced £5bn of savings as an example of what can be achieved."

    oooh, 5billion, eh? wow. massive savings there, I'm sure that'll help with the 1.4trillion quid worth of debt that the negligent idiots are racking up.

    1.4 trillion quid of debt? yet they still don't think that cutting spending is relevant? They want to reduce the *growth* in spending but not actually cut it? They're still just talking about a couple of quid here and there in imaginary efficiency savings and the occasional anti-toff-vote-winning policy that gets in another couple of quid.

    It's a 100% guarantee of total national bankruptcy if they don't get kicked out in 2010.

    They should be shot for treason; they've burdened everyone in the country for decades to come purely because they simply won't admit that their economic ideology makes no sense and can never ever work.

    Classic example; they spent 12billion quid on the failed NHS IT system; Darling said that we never actually needed it in the first place. Questions:
    1) If it wasn't needed, why did you spend 12billion quid on it?
    2) If it's not needed, why are you only shaving a bit of its budget off but not actually cancelling (or restructuring) it in a way that makes more sense?

    Same goes for the ID card system.

    Billions of pounds of *our* money simply burnt by a negligent government that simply doesn't understand economics or care about bankrupting the country.

    I'm absolutely fuming at these people for ruining our country, I'm sure I'm not alone in that.

  • Comment number 30.

    1404 Chief Secretary to the Treasury Liam Byrne is asked by the BBC's Andrew Neil why the government is increasing National Insurance - making it more expensive to employ people - precisely at a time when more of the country is out of work. Mr Byrne says that, by the time the rise is brought in, the economy will be growing well and able to cope. He also says NI has been singled out for a rise rather than income tax because it is the fairer choice.

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

    Can anyone help me out with this?

    Why is it fairer to raise income tax with one name than income tax with a different name?

    I think it has more to do with hiding the 1% increase by calling it two 0.5% increases personally.

  • Comment number 31.

    We all know the outlook is not to good on the fiscal front. All we have seen today is the political equivalent of Blackadder goes Forth - putting underpants on your head, sticking pencils up the nostrils and shouting "wibble, wibble" all the time.

    I think there will be another thing for the Prime Minister to claim - Great Britain historically comes first - not out of recession - but in losing its AAA rating!

  • Comment number 32.

    "I'm absolutely fuming at these people for ruining our country, I'm sure I'm not alone in that."

    Shooting them for treason is far too lenient in my opinion. Something involving a rusty cheese grater sounds more in my line of thinking...

  • Comment number 33.

    HIS FIGURES DON'T ADD UP. How can you borrow £176billion next year almost as much as this year and cut the deficit?

  • Comment number 34.

    "No flourishing of political dividing lines"!!! He referred to the recession of the 1990s when "twice as many businesses went under" and "Unemployment is not a price worth paying" etc. The whole of the PBR was a political statement rather than a realistic plan to cope with a crippling deficit for the ONLY G20 country still in recession. You could argue however, that with Brown at the helm we will not have to worry about being classified as a G20 nation for very much longer! Nick, even by your own pathetic standards of non-partisanship and blatant ant-conservative bias this blog is a travesty. A red rosette for Mr Robinson please!

  • Comment number 35.

    ...so all those hundreds of billions of £'s of public money that was pledged by this government to bail out the banks has now magically turned into debt on the public's balance sheet.

    ...and all accepted without a single politician or banker put in the dock.

    This is socialism for the rich and penury for the taxpayers.

    DEMOCRACY IS A SHAM!

  • Comment number 36.

    Best go to the financial blogs if you want sensible comment on the PBR.
    You won't get it from NR.

  • Comment number 37.

    From 'Chancellor aims to get serious'
    #3 Poprishchin
    'All the signs are that it will be another increase in National Insurance, though no-one in the Treasury will confirm that.'
    What further proof is needed?

    Froom BBC News:
    'National Insurance will go up by a further 0.5p from 2011 and public sector workers face a 1% pay squeeze, Alistair Darling has announced.'
    It isn't that I'm a great observer of politics and politicians it's because they're all so 2-dimensional and awful you can see right through them!

  • Comment number 38.

    'Front line services' - the new 'Racist'...?

    This simple three word mantra 'Front line services' has become the last defending post of the newlabour crash.

    If they seriously think they can spend six months bleating 'front line sevrice' and expect us to believe that they would protect them if, god forbid, they actually won an election, then they are evben greater fool than I thought.

    We've heard enough of 'front line services' and most of us have been victims of some of the utter jopbsworths who hold these positions and believe in their god given right to a job...unlike the rest of us useless wastrels.

    I am thoroughly sick of being treated like a second class citizen because I do not have a job in 'front line services' but this is the divide and rule politics of newlabour; let's create a super class, givem a name and say under no circumstances cvan they be touched...and that superclass is 'front line services'

    if ever there was a way to guarantee underperformance, arrogance, reluctance to chnage and blind adherence to outdated work practices it is giving someone a job that under no circumstances can go. That position is usefully filled by the newlabour 'front line services' jobsworth.

    Why is anybody absolutely mission critical in any job; incapable of scrutiny, impervious to criticism and unable to be fired? This is a national scandal and a typical pull the wool over their eyes and blinf them with a catchphrase that cannot under any circumstances be gainsaid.

    Nonsense.

    There should be no sacred cows (for this is effectively the same as this ludicrous nomenclature).. every area of the public sector should be open to scrutiny and nothing should be protected.

    Pathetic politicking and the electorate is past caring.

    It will go the same way as the way Boris Jonson managed to bury the 'racist' jibes of Ken Livingstone and I for one cannot consign the ludicrously self important phrase 'front line services' to the bin fast enough.

    Call an election

  • Comment number 39.

    I watched th whole thing. More than most of the labour back benchers did who left in droves after the chancellor sat down. Surely we voters deserve a bit more from our MPs than this. They may not agree with Osborne or Cable but at least have the decency to listen as I did and potentially learn something. If their views are being based on the narrow confines of their own party alone without then there really is no hope for us.

  • Comment number 40.

    11. At 1:44pm on 09 Dec 2009, Breakfast-Maker wrote:
    "Nothing short of a savage slash and burn will get our bloated public sector and hence debt, back down to manageable levels. Darling has copped out yet again. His lot are always the first to say to the tories 'where's the detail?', well the boots well and truly on the other foot now. What's he bothering for anyway, he'll be out come the election just like all the other wasters of the past 10 years."

    You have constructed a political narrative, where the government is responsible for the level of public debt..You are of course at liberty to sustain whatever illusions you like,my anxiety is that the conservative leadership actually believe this kind of nonsense, and will act on it if in government.

    To help you cool down,I suggest you consider the following detail contained in a recent IMF report. (Blanchard,Caruana,Moghadam,2009)

    The economic crisis began in the private sector,not government.

    The government response to increase spending is broadly correct.

    The UK was a strong economy before the crisis broke.

    Levels of government debt before the crisis were around the European average,Britain like every other economy received routine warnings about credit inflation,including one from Mr.Brown.Problem was no-one understand the clever instruments the banks created,least of all the banks themselves.The slower recovery here is because finance is bigger in the economic mix which was where the crisis imploded and where a lot of the cash has gone.

    `Slash and burn` would revive the disaster for which the private sector
    was responsible.The rational policy dilemma is to cut enough to show our currency is stable,and sustain spending while the recovery is fragile.This is something the Conservative front bench don`t seem to grasp,I hope its just opportunism,not economic ignorance.

    To an observer you appear to have reversed cause and effect, which I hope you don`t do in your daily life.Levels of state spending are a consequence of the crisis,not its cause.

  • Comment number 41.

    Although I remain sceptical about the whole shenanigans, I am rather weary of those who use cheap cynicism to dismiss all politicians. Scapegoating is never an attractive spectacle.

  • Comment number 42.

    re: 33 PalusKeg wrote:
    "HIS FIGURES DON'T ADD UP. How can you borrow £176billion next year almost as much as this year and cut the deficit?"

    aha; and therein lies a perfect example of the labour spin that doesn't actually make any sense and which often contradicts itself at every turn.

    The reason was that he wasn't talking about the structural deficit, there'll still be 1.4trillion quid of debt, it's just that it'll be rejigged because they've redefined "structural" debt and thereby hide 90% of the debt from people like the BBC who don't understand enough about economics to pick apart the lies.

    It's the same with unemployment figures. Too many unemployed? Makes you look bad as a government for having so many people out of work? Simple; just stop counting half the people and pretend they're in some kind of "training".

    It's how labour operate; they destroy everything they touch, and then lie about it by skewing all the figures.

    The BBC are complicit because they never report on these blatent lies.

  • Comment number 43.

    No questioning of the lack of honesty with regard to this head in the sand PBR by the BBC's lead political commentator, what a surprise.

    A shame that position will not be up for election in the next six months. At least with the general election we will have the chance to remove Labour from being the government but not unfortunately their cheerleaders at the BBC!

  • Comment number 44.

    So this country was NOT best placed to be first out of recession as claimed by Clown, Darling, Mandy etc etc, and the Tories WERE right - this recession was far worse than Clown and his pals thought - the Tories were accused of talking the UK down - Good G - d this lot have reduced us to Zimbabwe level - printing money - telling lies - blaming everyone else, and they STILL think we believe them - WHAT A FARCE.

  • Comment number 45.

    Hey!

    Just thought I'd highlight my absolute joy to hear of the 0.5% increase in both Employers and Employees NI Contributions.

    As a self employed professional with a Ltd company, forced into this situation because HM customs refuses flat out to entertain me as CIS, I'm now looking at a total deduction of 64.8% of my income (once over the threshold) in Tax and NIC's. Funny enough, although self employed, HM customs 'would like the extra 12.3%' of my income, er, just by employing myself!.

    Also, my Accountant advises me today that they have received a rather worrying letter stating that I have 7 days to pay for an under-payment within the last tax-year, dated 6 days ago 'failure to respond will result in distrain'. Distrain I ask, yes she says - the flat noses!

    This despite the sums not being due till the end of Jan 2010!

    I must remember to look and take note of my clock when I sit down to watch this evenings TV - Cookoooo!, Cookoooo!, Cookoooo!!!!

  • Comment number 46.

    rr @ 38 (and umpteen previously)

    It's always the same old song with you, Robin, isn't it? - slash the public sector till it bleeds to death.

    And Nurses in particular, am I right? (yes, I know I am)

    You see a Nurse and you just think the ONE THING, don't you? ... The Sack.

    Barely changed since you were 22. Sap to burn. How is that possible?

  • Comment number 47.

    40 bryhers...

    the uk was a strong economy before the crisis broke...? have you been living somewhere else or does your television set not provide a gazillion programmes on how to put in a new kitchen and bathroom into an old wreck of a hosue and sell it to some other unsuspecting punter?

    The Uk was a bubble economy built on a mountian of cheap debt while manufacturiong shrank faster in twelve years under newlabour than in eighteen under the tories.

    Selecto-vision is what your version of events is called; you would have us believe that the nirvana of whoch you speak is just around the corner again after just a little more tax and spend from newlabour.

    in your dreams,

    Call an election

  • Comment number 48.

    #38 rockrobin7
    mmm well when you or someone in your family ends up in your local hospital's A & E dept ,if they still exsist, to find no doctors or nurses on duty that day but "It's ok an auditor or a manager will see you now"
    you remember back to the exceedingly ridiculous post no.38
    I'll leave it at that as what I really want to say would not make it past the mods.
    People like you don't deserve "front line services!"
    Sid

  • Comment number 49.

    #40 "The economic crisis began in the private sector,not government."

    It was fed and actively encouraged by Gordon Brown who repeatedly congratulated the City on its innovation and ingenuity. He planned based on the tax receipts that these deceptions were generating. He created a regulatory regime that failed to spot that the banks could not understand half of what was on their books. All the time the economy was growing he was running an average budget deficit of £30 billion (2000 - 2008). He repeatedly encouraged us all to carry on taking on debt and this fuelled the growth. Gordon Brown was at the centre of all of this. He is culpable.

  • Comment number 50.

    #40 bryhers

    Sorry but I'm not going to let you get away with that rubbish.

    The financial crisis has caused the global recession, yes, BUT NOT THE UK'S CURRENT FISCAL AND FINANCIAL CRISIS.

    As you should well know, Labour borrowed some £40 billion in 2007 alone at the height of the boom; when the recession hit, taxes decreasd by some £40 billion, leading to deficits in the order of £78 billion as announced today.

    The reality behind our fiscal crisis is therefore plain and simple: Labour borrowed far too much during the good times, leaving us without a cushion and in too much debt for the bad times.

    That's why the UK - not France and Germany - is in such trouble. To blame this on the global recession rather than Labour's actual behaviour in terms of borrowing is blatantly biased.

  • Comment number 51.

    #41 R Newton
    'I am rather weary of those who use cheap cynicism to dismiss all politicians.'
    I am rather weary of the cheap cynicism used by politicians, and their ilk, to dismiss their detractors by pigeonholing criticism as cheap cynicism.
    Your turn...

  • Comment number 52.

    Nick just watched your summary on Andrew Neils show on Darlings performance,only you could deduce this could help Labours electoral chances at the next election.

  • Comment number 53.

    Did anyone else pick up the lie about efficiency savings? Darling claimed that they had already achieved £21.5bn of savings while the NAO suggests that they cannot find at least half of it.
    "The National Audit Office assessed the programme when it was part-way through, and found that only about a quarter - 26% - of the £13.3bn in savings then being claimed by departments "fairly represent efficiencies made". Just over half - 51% - "represent efficiency but carry some measurement issues and uncertainties"; and 23% "may represent efficiency, but the measures used either do not yet demonstrate it or the reported gains may be substantially incorrect."

    Stephanie Flanders gave a detailed breakdown http://www.bbc.co.uk/blogs/thereporters/stephanieflanders/2009/12/efficiency_trap.html

    At least Darling can lie as well as Brown.

  • Comment number 54.

    46

    Aha, the standard stock response by Saga to any suggestion of spending less money.

    "YOU EVIL RIGHT WINGER"

  • Comment number 55.

    40. At 2:35pm on 09 Dec 2009, bryhers wrote:

    "You have constructed a political narrative, where the government is responsible for the level of public debt..You are of course at liberty to sustain whatever illusions you like..."

    Hard to believe that anyone is so blinkered that they don't hold government responsible for the state of the public sector finances. Labour's mistake was to assume that there would never again be another recession - surely even you must admit it would have been a good idea to reduce our debt during years when the economy was growing.


    "The rational policy dilemma is to cut enough to show our currency is stable,and sustain spending while the recovery is fragile."

    I am very glad to see that you believe that cuts must be made to reassure the markets. This is something Darling mentioned in the PBR. However if you look at the figures, the measures announced in the PBR show spending cuts in 2009-10 and spending increases in 2010-11 and 2011-12 and 2012-13. Isn't this is the exact opposite of what you are suggesting?

  • Comment number 56.

    rockRobin and BluntJeremy# - there is little point in telling the majority on HYS what is the truth - we know it BUT the likes of Sagamix and Sid whatever can ONLY see things through Zimbabwe type glasses - print more money - lie, lie again, and if found out blame the Tories first and the USA second - roll on 2010 and oblivion for this shower of nincompoops.

  • Comment number 57.

    So basically its Sovereign Debt Crisis here we come.

  • Comment number 58.

    This PBR is about electioneering and not anything else.
    What needs to happen is that growth is stimulated and cuts made to stem the fall in the deficit. Stimulating growth is not a scheme to get people to get new boilers or cars, it is tax cuts to business and individuals so they feel they have a bit more in their pockets to go and spend. Close loopholes in accounting so people pay fairly for their incomes particularly hedge funds.
    There are clearly no economists advising anybody in government. Taxing more won't get us out of the mess. It is business that will do that and helping business is the way forward. NI contributions are a tax on the poor also because £20k is not a huge salary.
    What planet does Labour occupy nowadays?

  • Comment number 59.

    I echo Nick's comments made to Andrew Neil Ouch! If this PBR is meant to be the slow responsible way back to recovery, protecting public services, imagine what the pain will be like under Osbourne's plan of cutting deeper and quicker.
    I'm one of the broad shouldered people who will see Tax and NI rise and running my own business I'm one of the wealth creators to but, unlike the weak kneed ones that George was talking about being scared away, I will stay here and work harder. I do think its only fair that I should pay more than someone on 20-30K per year as I do have a good standard of living.
    I am a little bit fed up though of George talking the UK down everytime he opens his mouth. I know its bad but actually making a meal of it is not going to help confidence return or me find customers. It would be better if he gave us a vision of how much better his plans are and what we can look forward to. At the moment the tory front bench remind me of the Bush White house planning to go into Iraq. They are planning for winning the General election but do not seem to have thought through what happens afterwards -lets have a bit more vision please.
    I do think that we need to reduce the debt by a combinbation of growth and public spending cuts at a responsible rate. I am concerned that if we move too fast we will see a repoeat of the depression of the 1930's the question is what is too fast?
    I'm also with Darling on the bankers bonus tax. They have only made profits because we have gone into so much dept to support them. Don't forget how many billions RBS were in the red last year - I can't quite equate that with the need to reward sucess. Here in the real world bonus's are paid out of profits i.e when you have paid off your debts. I think the banks should concentrate on paying us, the taxpayer, back first before they give bonus's to people who earn 5-6 times more than the average person anyway.

    GAC at no 3 Darling said a 'real term increase of 4%' That's because prices have fallen by 1.5% that's what the minus 1.5 September RPI means. So if you count the difference between -1.5 and + 2.5% it comes to 4% -it's called maths if you are interested :-) hence a real term increase of 4%. Of course it depends which measure you take as the real inflation figure.

  • Comment number 60.

    45. At 2:50pm on 09 Dec 2009, Feel_Bad_Factor wrote:
    Hey!

    Just thought I'd highlight my absolute joy to hear of the 0.5% increase in both Employers and Employees NI Contributions.

    As a self employed professional with a Ltd company, forced into this situation because HM customs refuses flat out to entertain me as CIS, I'm now looking at a total deduction of 64.8% of my income (once over the threshold) in Tax and NIC's. Funny enough, although self employed, HM customs 'would like the extra 12.3%' of my income, er, just by employing myself!.

    Also, my Accountant advises me today that they have received a rather worrying letter stating that I have 7 days to pay for an under-payment within the last tax-year, dated 6 days ago 'failure to respond will result in distrain'. Distrain I ask, yes she says - the flat noses!

    This despite the sums not being due till the end of Jan 2010!

    I must remember to look and take note of my clock when I sit down to watch this evenings TV - Cookoooo!, Cookoooo!, Cookoooo!!!!

    We also had one of these letters and after 2 weeks of argueing it turned out they owed us quite a large sum!!!

  • Comment number 61.

    The benefit culture is where the biggest savings can be made; but Labour won`t go there because it will affect their core voters. Easier to have ago at the workers instead.

    It is too early to make any real comment on Daling`s speech. As with any Labour budget speech, it usually takes a week or two for the fine print to be decoded.

  • Comment number 62.

    "Aha, the standard stock response by Saga to any suggestion of spending less money.

    "YOU EVIL RIGHT WINGER"


    As in professional BBC blogger Hayemakers response to any Labour voter:

    1: Insult
    2: you Labour employee you!
    3 You trotsky-esque, champagne socialist

  • Comment number 63.

    Nick,
    Please can you, or someone at the BBC, report on the structural deficit? Darling said that the deficit would be halved within 4 years, and as many people have already pointed out on your blog (and elsewhere), that reduction did not refer to any part of the structural deficit whatsoever which is going to increase exponentially (1.4trillion and counting, and even that's only if we reach the insane heights of labour's growth forecasts).
    Are you and your colleagues at the BBC hiding this labour-lie deliberately for your own political reasons, or is it that you simply don't understand economics enough to be able to report it properly?

    1.4trillion is a lot of money, and darling's claim to "reduce the deficit by half" is simply a blatent lie as everyone who hears that claim would assume he means the full deficit, not just the deficit for a single given year.

    If he's talking about the non-structural deficit, then he shouldn't be talking about halving it within 4 years, he should be talking about getting rid of it completely and having a budget surplus; how else can we ever pay back the 1.4 trillion of structural debt?

    It's like spending 10grand a year on your credit card for 10 years, ending up owing 150grand (ie including interest) after that 10 years, and then saying "I'll halve my credit card debt" and meaning that you'll only be spending 5grand a year going forwards instead of 10grand but that you simply don't care about the 150grand and its resulting interest going forwards (or the 5grand/year debt plus interest that you're now racking up)

    This is an absolutely critical point, and by not addressing it we're 100% guaranteed to go bankrupt as a country; you absolutely MUST start reporting on it.

  • Comment number 64.

    #59 - if u call telling the truth talking the UK down that is your business - I, for one, would prefer the truth, and face up to it, than telling lies and running away. As for any tax on bankers bonus - LAUGHABLE politics for any Liebour fools left to believe it - a pathetic gesture when UK is TRILLIONS in debt - the Tories leave a surplus - Liebour leave the BIGGEST MOUNTAIN OF DEBT EVER - and as a businessman u seem to imply that Liebour r doing the right things??? - G - d truly help us.

  • Comment number 65.

    "It's amusing to think that it is precisely this low-key political style which led Gordon Brown to want to remove him from his job."

    So Gordon would prefer someone who was all style over substance? Explains a lot.

    Oh and please noone take that in the way that I'm saying Darling has a particular lot of substance behind him.

  • Comment number 66.

    Agree this Government has taken heed of the Zimbabwian fiscal policy and pretty much replicated it here. I do feel though that George is a bit of a lightweight shadow. Ken would have been far better in this situation.

  • Comment number 67.

    It would appear that the Brown Government has abdicated from Government. What an insult to democracy that we are still forced to pay their wages.

  • Comment number 68.

    Bryhers

    The UK will soon be a trillion pounds in debt. The banking 'crisis' cost £135bn. Where does the rest come from?

  • Comment number 69.

    59. At 3:16pm on 09 Dec 2009, wirralwesleyan wrote:

    "At the moment the tory front bench remind me of the Bush White house planning to go into Iraq. They are planning for winning the General election but do not seem to have thought through what happens afterwards -lets have a bit more vision please."

    I'm pretty surprised to see this brought up after the PBR ducked all of the big questions. Don't forget that Labour has the huge machine that is the civil service to come up with a Spending Review, and finally tell us where the cuts will fall. They have however refused to do this, and decided that the next Spending Review should fall after the election.

    Given that Labour, with access to all sources of data and armies of civil service economists and policy analysts, refuse to come out with detailed plans, why do you think the Tories should?

  • Comment number 70.

    #56 ronregan - thanks for that . I don't know if sagamix will be delighted at being mentioned in the same sentence as me !
    whilst I am here I would just like to put you right on a few things in your post.
    I have never voted labour and never will.

    Blaming the tory's and or the yanks - IF THE CAP FITS !!!

    are you suggesting that the labour party in the past 12 years have actually spent the money that they poured into education and the health service wisely???
    no they have not ,not by a long way. there are now more people ticking sheets and filling in reports than there are people actually delivering the "front line services" a pathetic waste of time and money.
    an example of this would be a consultant in a hospital who is being "managed" by 6 yes six managers whilst his team has been cut to pay for them.
    Sid
    PS. would that be the Zimbabwe that unlike the UK is no longer in recession ??

  • Comment number 71.

    "As a result, he has made it harder for the Tories to mock him and his economic projections which confirm that Britain's recession was deeper and longer than expected and than in most other countries."

    So Darling is having to admit that the UK will be in recession longer and deeper than most other countries and that he got his predictions wrong on how bad things are.

    And this makes it harder for the Tories to mock him?

    On which planet?

  • Comment number 72.

    It was kind of a predictable budget to be honest.

    You have to remember that the bar in general, is set by the opposition. Through pressure in the commons, in PMQs, and their own policy. They are the ones trying to talk their way into power.

    When the bar is unbelievably low, the government aren’t going to risk some record breaking leap, and falling, when they can just clear it with a little hop.

    A lot of people blame Brown for a poor era of PMQs. The exact same formula. It’s just a particularly weak opposition, not really doing much to force any issue.

    Blair battered Major (as well as every other tory leader, lets be honest) in the commons for years, when he was making policy errors. Which forced JM to quite frankly come up with some quite revolutionary policy to counter. Sadly, we never got to saw it, but it’s an example of governments simply rising to the level of opposition.

    Let’s cut to the facts. Here’s what we have with the tories, in regards to commitment.

    1: About 13 billion in cuts.
    2: No tax rises as of yet.
    3: Commitment to cut tax, which will actually cost several billion, not save it.
    4: Everything else will be detailed after they are in power, in “emergency” budgets
    5: A commitment to tell people how good they are at saving every 2 minutes in newspapers.

    I wouldn’t say that’s a very high bar, in regards to policy. In fact, it’s lower than a snakes belly. Other than a bit of Coulson spin in the media, about Cameron austerity versus Brown spending, you could even argue that they haven’t even moved as far as Labout in regards to public spending cuts.

    Labours report (remember, very low bar. Not much to surpass. Not hard to better)

    1: Probably closer to £25 billion in cuts
    2: Quite a notable tax rise. As well as stealth tax rises.
    3: Cuts to public service pensions
    4: Commitment (probably in law) to cut deficit in half in the next decade. Opposed by DC
    5: Everything else detailed in a new budget. The tories “50 day” emergency budget in all but name.

    You know. There are a few arguments. One probably being that people want to know spending cuts now.

    I think it’s pretty obvious that none of the major parties will oblige with that. They may as well just throw in the towel now, if they did.

    The only real commitment from parties is that “you’ll have to wait”. I don’t think Labour or Tories have trumped each other in the cuts war.

    If anything, the tories have the work to do. As in, as far as I’m aware, if you take into account their tax cuts which they have to pay for, have they made a single saving yet?

    Surely cutting inheritance tax, and corporation tax, will swallow up at least 5 billion? Meaning their net cut is probably about 8 thus far.

    I think it’s quite obvious that both cuts and tax rises are probably coming. The closer reality being, Labour don’t want to cut, and the tories don’t want to tax.

    Who’s the more austere in reality? That will probably just turn into a media war as well.

    Cameron says the word the loudest, and most often, and labels anyone with alternative policy a “liar” (a blair trick if ever I saw one. Just replace “dishonesty” with “sleaze”).

    The truth being, in my opinion, Camerons trying to gain power, via default, by making the least amount of promises he can. Giving him a free run (and budget) to shape and cut how he pleases once in power.

    Ala Tony Blair.

    This has set the level of politics very low in general. Meaning “cards close to the chest” until the election







  • Comment number 73.

    "The benefit culture is where the biggest savings can be made; but Labour won`t go there because it will affect their core voters. Easier to have ago at the workers instead."

    To be fair, you could say the same about tax rises.

    Both parties have their prize pig to protect.

    Cameron won't touch taxes, and will cut more. Brown will cut less, and go after taxes.

    Rock, meet hard place

  • Comment number 74.

    #40, bryhers wrote:

    "11. At 1:44pm on 09 Dec 2009, Breakfast-Maker wrote:
    "Nothing short of a savage slash and burn will get our bloated public sector and hence debt, back down to manageable levels. Darling has copped out yet again. His lot are always the first to say to the tories 'where's the detail?', well the boots well and truly on the other foot now. What's he bothering for anyway, he'll be out come the election just like all the other wasters of the past 10 years."

    You have constructed a political narrative, where the government is responsible for the level of public debt..You are of course at liberty to sustain whatever illusions you like,my anxiety is that the conservative leadership actually believe this kind of nonsense, and will act on it if in government."

    bryhers,
    Who else, except government can be responsible for public debt?
    Private debt is down to individuals and companies borrowing too much - which was allowed and even encouraged by the govrenment. That was certainly true in the UK.

    "To help you cool down,I suggest you consider the following detail contained in a recent IMF report. (Blanchard,Caruana,Moghadam,2009)
    The economic crisis began in the private sector,not government.
    The government response to increase spending is broadly correct."

    The failure of governments around the world to recognise that the financial sector was running out of control had nothing to do with the
    poor private folk, who were led to believe that they could borrow as much as they wanted, regardless of their real financial situations.

    "The UK was a strong economy before the crisis broke."

    What? The UK built a massive credit-fuelled debt. Is that what you call a strong economy?

    Manufacturing operators declined faster under Brown than under Thatcher. How does that qualify the UK as a strong economy?

  • Comment number 75.

    62

    You must have me confused with someone else. I don't think I have ever called anyone a Trotsky esque Champagne Socialist. Or, for that matter, either of those two things.

    Neither do I have anything against Labour supporters as such.

    What I do have an issue with, and reserve the right to be insulting towards, are those (Tory, Labour or Lib Dem) who swallow whole what their party tells them, don't perform even the most rudimentary cross checking or analysis, then spout it back to us word for word on these forums day after day (to be fair, Saga doesn't do that). If you would bother to check, I give credit where credit is due (this very day I sent some the way of Darling, although admittedly that was before the PBR).

    For your information, those who fit into this category at the moment are overwhelmingly the die hard, never voted anyone but Labour, class warrior types, going to the trenches in a desperate attempt to save their lot from catastrophic defeat.

    You can spot them by any of the following phrases (paraphrased):

    "It would be even worse under the Tories"
    "Vacuous posh boys"
    "Toffs"
    "The Tories will give massive tax breaks for the rich"
    "The Tories want to punish the poor"
    "The Tories hate public services and can't wait to abolish them completely"

    Point taken? There are a few more. All complete rhetorical nonsense, class warrior stuff and empty conjecture, but there are plenty who have had it drummed into them so long that they can do nothing else but blurt it back out day after day without thought.

    Give me a real reason to support Labour (there are still some, although none related to actual performance) and I will debate it with you calmly and ratinally. But I will heap scorn where scorn is due.

  • Comment number 76.

    Mike at 73 I think you've pretty much got it there, either way at least one portion of the electorate is going to get shafted but neither party wants to say how their going to do that.

  • Comment number 77.

    If you want to know where we will be in 12 months time look at Ireland.

    They have another budget cutting the public sector today.

    If you don't think this is where we going after this PBR your a fool

  • Comment number 78.



    47. At 2:54pm on 09 Dec 2009, rockRobin7 wrote:
    40 bryhers...

    "the uk was a strong economy before the crisis broke...? have you been living somewhere else or does your television set not provide a gazillion programmes on how to put in a new kitchen and bathroom into an old wreck of a hosue and sell it to some other unsuspecting punter?
    The Uk was a bubble economy built on a mountian of cheap debt while manufacturiong shrank faster in twelve years under newlabour than in eighteen under the tories.
    Selecto-vision is what your version of events is called; you would have us believe that the nirvana of whoch you speak is just around the corner again after just a little more tax and spend from newlabour.
    in your dreams,
    Call an election"

    You make two substantive points which I have extracted from what is mostly an incoherent rant.(1) You dispute the UK was a strong economy before the crisis,(2),that the shift from manufacturing to services is evidence of weakness.

    As far as the pre-2007 economy is concerned,we had levels of growth and employment which were greater than our French,German and US competitors.Despite the slump there are still 2,1/2 million more people in employment that 1997.An IMF report(2009) confirms the strength of the British economy up to 2007.

    As far as the shift to services is concerned,this is a common feature of the post-industrial economy across the developed world.As Warren Buffet says,a buck,is a buck,is a buck.

    Levels of personal debt were high prior to the slump, but the source of that was highly leveraged mortgage debt in the USA beginning the process of bank failure which affected the broader economy across the world.

    What you must find it difficult to get your head around is the crisis began in the private sector of the economy,not government.The struggle over debt, which is international,is a response to crisis, not its cause.

    Like many others here,you have reversed cause and effect.You probably didn`t even notice.

  • Comment number 79.

    33. At 2:19pm on 09 Dec 2009, PalusKeg wrote:
    HIS FIGURES DON'T ADD UP.


    Au contraire. The figures are quite... settled.

    And anyone who questions that, especially from within uniquely funded organisations, would not be seen as a team player. Index-linked pensions can hinge on such things.

    Meanwhile, licence fee payers who continue to feel the Emperor's latest set of clobber is anything but golden are, of course, to be labelled, perjoratively, in any distracting way possible.

  • Comment number 80.

    For a while I was starting to get worried, what with the pro-Labour BBC spin and opinion polls moving back towards a better position for the government I was worrying that we might get another 5 years of these utterly incompetent fools.

    Nick Robinson has the skill of making Alistair Darling sound, in some way, sane, even though our budget deficit is impossibly massive and he is tinkering around the edges.

    Then I went out into the real world. The woman on the supermarket checkout was talking to the man filling the bags about how utterly incompetent they all are, a lady they were serving who worked for the NHS chipped in with a few expletives and I realised that everything was alright with the world.

    They are going to get a caning next year. Rightly so!!!

  • Comment number 81.

    #73, Mike.

    I'm not sure that restraint on tax raising is a "prize pig" so much as a necessity at this point. The government is already a millstone around the neck of the private sector, we're a very high tax economy.

    Personally, I'd like to see a lot of cuts:

    Scrap the ID card scheme, biometric passports, the olympic games and contactpoint.
    Pull out of Iraq. NOW.
    Make child benefit and "baby bonds" means tested.
    Slash quangos.

    Then start a review of the entire public sector in order to find out why it's got so big, find the fat and trim it.
    When that's done we start to look for 'services' that are non essential and get rid of them as well.

    We are horrifically over-governed and over-taxed in the UK. Time to take an axe to the whole structure of the public sector.

  • Comment number 82.

    Voting is a risky business. We have to choose a party to run the country based on what they promise us and a belief that they will be able to deliver. This belief is based either on 'they have got it wrong in the past so they will go on getting it wrong' or 'they haven't got a recent track record so we hope they will be better than the other lot' or 'sooner the devil you know' and other permuations that boil down to the fact that we don't really know who to believe.

    The problem is that the parties are not prepared to communicate clearly with the public. Though the Tories (and I detest Cameron) are doing a better job than Labour.

    On the Dragons' Den they ask for projections, they ask for justification for the projections and ideally expect people to be able to predict why these might not be achieved. That's what I want the poltical parties to do. Then I can decide which party is taking the largest risk compared with perceived benefit. I want this to be presented in a way which makes their position clear. Knocking the other party would be for another forum.

    Then having said how much they are going to pay back each year, they draw a line to represent this amount of money. On it they put a mark which represents the balance of 'spending cuts' at one end and 'tax rises' at the other end. Under the spending cuts they put figures indicating where these cuts would come from and under the tax rises they would list how taxation would change. If you have ever been in a Primary School clasroom, you can see how this would make an excellent display!

    Now I know that no party will actually keep to the figures they present pre-election, but it would be a way of giving me an indication of the way they are thinking. Of course it would be an oversimplification, but it would be better than an incomprehensible fog.

    I think that the election will be won by the party which is most believably explicit about taxation and expenditure. The trouble for Labour is that the default result is 'Tory Win' and Darling, by being vague on cuts, has just ensured that the default setting remains in tact.

  • Comment number 83.

    #78 bryhers

    "As far as the pre-2007 economy is concerned,we had levels of growth and employment which were greater than"

    Based on bad debt, a dead-but-still-standing property market that was and still is out of touch with reality, and sustained government borrowing in boom times.

    There's a difference between where the crisis originated and who should have taken action.

    We could elect a seagull to PM and they'd have done as good a job as Labour, who should have spotted (as many thousands of people seeming neither in government nor finance did) that things were overheating and put controls in place. Limit the amount of debt individuals could take on, regulate the financial sector.

    Make no mistake, Brown and Labour were basking in the reflected glory of a illusion when they should have been keeping an eye on the bottom line.

  • Comment number 84.

    49. At 2:56pm on 09 Dec 2009, njl100 wrote:
    #40 "The economic crisis began in the private sector,not government."

    "It was fed and actively encouraged by Gordon Brown who repeatedly congratulated the City on its innovation and ingenuity. He planned based on the tax receipts that these deceptions were generating. He created a regulatory regime that failed to spot that the banks could not understand half of what was on their books. All the time the economy was growing he was running an average budget deficit of £30 billion (2000 - 2008). He repeatedly encouraged us all to carry on taking on debt and this fuelled the growth. Gordon Brown was at the centre of all of this. He is culpable."

    The problem with the thrust of what you write is that it largely consists of retrospective wisdom.By this I mean the policies which the government should have followed if we knew what we know today.

    Leaving aside the vanity of retrospective wisdom,it is the case that apart from routine warnings,no central banker understood the complex leveraged instruments the banks created to make large profits. The IMF didn`t as they now admit,Bernanke didn`t,or King or Buffet, although by 2006, the latter had his suspicions.Not even the banks themselves understood them ,as the head of the Banking Federation recently said.
    The opposition certainly didn`t either.

    The crisis began in the private sector,not government. Regulatory regimes failed across the world through lack of knowledge,not irresponsibility.Government debt is a response to the crisis not its cause.This is capitalism,it is subject to convulsions,understand it,then you begin to control the bitch.

  • Comment number 85.

    Re: #78 bryhers
    You state that there are 2.5 million more people in employment now than in 1997. How many of these are in the public sector? Most of them.
    How many are adding real wealth to the economy?
    How many are just sucking up our taxes?

  • Comment number 86.

    Bryhers

    You keep quoting from that very brief IMF report (published 10 months ago) that was just an initial look at the crisis. It makes passing reference to 'strong economies like the US and UK' but it also criticises Governments and central banks for basically not knowing what was going on.

    it's no ringing endorsement of Brown at all.

  • Comment number 87.

    Ref 59
    it may be maths if looked at in such a 'pure' way but it is not an increase of 4% in the pension which is what he was trying to get credit for. Try giving your staff a real time increase of 4% but only increase their gross by 2.5% and see what they think of your maths!

    If a Pensioner's spend was the same basket as the RPI then you would have a mathematical case, but as a pensioner I know my essential spend is not less year on year in 2009 nor is it likely to be for 2010.

    The issue is simple and it is down to how one interprets the math - will a pensioner have more to spend? yes, 2.5%, will a pensoner have 4% more to spend? no, because their average weekly basket of spend has not reduced in price!

    Yes it is maths, but not as you know it!

  • Comment number 88.

    If anyone would like to read that IMF report Bryhers keeps going on about, it's easy to track down, just google the combined authors. It makes two references to the UK, one where it says that over optimistic messages were given by the IMF because the IMF didn't realise what was going on, in the other it criticises the UK for it's actions over Icelandic banks.

    The report is more to do with why the IMF got it wrong but it also criticises Governments and Central banks for having poor regulations.

    The idea that it somehow absolves Brown is laughable. Remember it was February 2009 that the report was written. Since then....

    July 2009 IMF issues a stern warning to the UK Government to seriously address its debt problem and not test the markets patience, as national debt begins to touch 100 per cent of GDP.

    Oct 2009 IMF names Britain as one of the countries most vulnerable to a credit shortage between now and the end of next year.

    Nov 2009 ... IMF singles out UK as being at significant risk from the threat of rising debt interest costs as it absorbs the effects of the credit crunch

    Bryhers is using a report about why the IMF was overoptimistic to defend Brown whilst saying that all the other reports (specifically about the UK) are inaccurate.

  • Comment number 89.

    "Hard to believe that anyone is so blinkered that they don't hold government responsible for the state of the public sector finances. Labour's mistake was to assume that there would never again be another recession - surely even you must admit it would have been a good idea to reduce our debt during years when the economy was growing."

    Of course the government is responsible for public sector finance,or perhaps you think it`s the seven dwarfs.In the good years,debt was around the European average and below France,Germany,Japan and the USA,so not exceptional.Current debt reflects the severity of the crisis we are living through,it is a response to problems generated in the private sector,not government.

    The paying down of debt is not the opposite of what I believe,it`s a question of timing.Cut too soon and you risk returning to the dark place we were in a year ago,cut too late and you risk the status of the currency.It`s a difficult balance.

    The economist John Maynard Keynes was once accused of changing his mind. He replied that when the facts change,so do I.what do you do? The facts have changed,what do you do?

  • Comment number 90.

    Well it's becoming a little clearer, isn't it? The debt'n'deficit HAS to be dealt with and both main parties know that. It's just a matter of the fine detail ... the nuance.

    Labour will incline more towards tax rises - particularly on the better off - and will bend over backwards to protect the public sector. They'll cut spending but they won't slash it.

    The Clowns will also bend over backwards (mmm!) but in a different way and with a different purpose. They will do their utmost to avoid tax rises and will muller the public sector if that's what it takes.

    Clear blue water.

  • Comment number 91.

    I've said it before and it is turning out to be true........Labour are determined to leave the Tories with our finances in the worst possible state hoping that they will get back in at the following election. They did it in 1979 but it backfired on them very badly (as the Tories stayed in til 92) and I hope it will do so again.

  • Comment number 92.

    The real problem with taxation and the budget balance is not the need to get the rich to pay up,or the banks to pay up, it is that the average earner and the low earner are taxed far too little and receive far too much back in the way of tax credits .
    And our main tax-earners, the financial sevices industry and the construction sector ,are both on their knees.
    We need new ways of generating cash from abroad.
    Secondly we need to revalue UK citizenship.It does mean something and it is worth something.
    Nowadays UK citizenship granted on a hardluck story, or soandso is soandso's brother ,rather than on the merit or contributory potential of a new entrant.It is laudable but it is not a good way to fill up a country.We are not the Ark.
    We need to be sympathetic to others' plights,but there is a permanent revolving disater going on all over the world, and when our economy is on the ropes we cannot afford such largesse.
    And seeing as we are now a poorer nation ,why not have a UK citizenship auction,with former colonies in particular being most welcome to apply.
    Two hundred thousand new citizens paying two hundred thousand pounds for a non-benefit-entitled UK passport would generate £40 billion for the government.
    Also China now has so many millionaires and has done so well,why not let wealthy Chinese purchase citizenship too.
    We cannot compete with China on a goods-for-goods basis, but we have something that wealthy Chinese people do appreciate.....freedom of expression, a beautiful country, and cosmopolitan diversity...... and they have something we need...financial acumen,experience,daring,and , of course, cash.They would bring with them cash and expertise and would be welcome new blood.
    Let's make the granting of UK citizenship conditional to a payback of the benefits received during the initial residency period, rather like student loans.And lets get the money back from them during their stay if they fail to be granted residency.
    No cash, no entry.
    On the left there is a need for fresh-thinking and new moves on looking at the state versus the person, what either can and cannot do, and must and must not do, for themselves and for each other.
    That the state can do so much for people is amazing but there is a distressing tendency to greater dependency, eg first give people a free medical appointment, then give them transport to their appointment, then give their relatives transport to visit them in hospital, and free delivery of their medicines, free 24 hour helplines, free legal advice, free welfare advocacy ,umpteen appointment made at practices and hospitals for idiots who miss their appointment and demand other appointments which they also miss, free dandruff shampoos,nappy creams and buildup drinks for heroin addicts, free benefits for people starting their second third and fourth families, ......etc etc......what next....free Christmas cards and stamps?
    WE ALL KNOW THAT THE GOOD TIMES ARE OVER.
    Working people are getting fed up subsidising people who do not work.
    Although it would make employment costs higher, it would be better to have a higher minimum wage but with reduced employer's costs which are really a hidden form of income tax.
    There is a way of making this cost neutral to the government.
    It is also time to declassify drug and alcohol addiction as a disease worthy of social security benefit.
    Scores of millions of pounds are wasted on hundred pound an hour interpreters for people who have been resident in uk for months or years,instead of the month it would take them to acquire a basic version of the language if they were given English lessons as a compulsorY feature of residency or asylum seeker entitlement.
    And the pendulum is swinging towards workfare, unpalatable as it seems.
    There is a need to rationalise benefits such as housing benefit.
    People with various emotional problems are paid housing benefits directly to themselves instead of to their (ususally social) landlord, but do not pay the rent, rack up huge arrears, get evicted, and come back to the social services requirung emergency housing, this time costing on average four times more than the original housing they were being given the benefit for.
    We are so wary of exploitative landlords that we are causing feckless tenants to become homeless unnecessarily.
    Get the rent paid directly to social landlords, and sort out a system for private landlords too.
    I know that this is not about the budget, but this is where all the money goes.
    I must be getting old.

  • Comment number 93.

    #84, bryhers wrote:

    "49. At 2:56pm on 09 Dec 2009, njl100 wrote:
    #40 "The economic crisis began in the private sector,not government."
    "It was fed and actively encouraged by Gordon Brown who repeatedly congratulated the City on its innovation and ingenuity. He planned based on the tax receipts that these deceptions were generating. He created a regulatory regime that failed to spot that the banks could not understand half of what was on their books. All the time the economy was growing he was running an average budget deficit of £30 billion (2000 - 2008). He repeatedly encouraged us all to carry on taking on debt and this fuelled the growth. Gordon Brown was at the centre of all of this. He is culpable."

    The problem with the thrust of what you write is that it largely consists of retrospective wisdom.By this I mean the policies which the government should have followed if we knew what we know today.

    bryhers,

    You may feel it there was retrospective wisdom.

    I had to fight with my children NOT to borrow whatever was offered to them, because it was way above an affordable level and made NO economc sense.

    Ans when I moved house, I found it totally gross that people would offer me much more money than I either wanted, or the value of a home could justify.

    Hoiw does that equate with a "prudent" approach to finance?

    Brown was a failure. He screwed up private pensions. He encouraged a credit boom that has no precendent in UK history. House prices would have risen in the UK because the demand was high.
    They could not have risen so rapidly if Brown had not allowed credit to slosh about with such limited restrictions.
    I'd like to find a web site that indicates when banks changed from being organisations that lent what they had, into organisations that lent what they could borrow.
    Seems to me that banks borrowing to lend has accelerated very rapidly since Brown changed the regulatory framework. I found the stats. But Brown seemingly didn't think it was important.

    Man's a fool.

    Darling at least tries to be a bit more honest.

  • Comment number 94.

    I listened to Hutton the Governments economist stooge on sky. Another man squirming on the hook because he got every forecast wrong. I hope this is another area that will be reformed after the election, if Labour lose, doing away with people who are paid to follow the Government line on the economy. Lets have some real economists who have been alienated by the Government for telling the truth and who warned of the credit bubble and spiralling public debt.

    As soon as the election is won whoever wins, will have to set about slashing the public sector. It is the only way forward and should have happened already. This very much depends on whether our economy can hang on another 6 months as we continue to incur more debt. Taxes should not go up, the public sector should be cut to a level that can be afforded. There will be no growth until the debt is brought down we will merely bump along. Increases in tax will impede growth in our economy, lose us business and investors to other Countries and stop the over taxed public from spending.

    If anything, even in this recession taxes should be cut as much as possible especially for business. Business in the private sector is the only thing now that will bring us growth and jobs in the economy. Any extra burden of tax such as Darling put on business today through NI is a backwards step.

    Darling is not afraid of withdrawing the stimulus of public spending he is afraid of losing votes as the full scale of our fiscal position in Britain begins to dawn on the public.

  • Comment number 95.

    78. At 4:21pm on 09 Dec 2009, bryhers wrote:

    "...Despite the slump there are still 2,1/2 million more people in employment that 1997"

    ===

    Yes, and the population has risen by 3.1 million over the same period. So just what is your point, apart from trying to misrepresent the statistics to suit your argument?

  • Comment number 96.

    40. At 2:35pm on 09 Dec 2009, bryhers wrote:
    "You have constructed a political narrative, where the government is responsible for the level of public debt..You are of course at liberty to sustain whatever illusions you like"

    89. At 4:50pm on 09 Dec 2009, bryhers wrote:
    "Of course the government is responsible for public sector finance,or perhaps you think it`s the seven dwarfs"

    Bryhers, could you explain these two comments. If I understand you correctly, you believe the government is responsible for public sector finances but that does not include public sector debt. Maybe you should think before posting.


  • Comment number 97.

    "29. At 2:09pm on 09 Dec 2009, getridofgordonnow wrote:

    Classic example; they spent 12billion quid on the failed NHS IT system; Darling said that we never actually needed it in the first place. Questions:
    1) If it wasn't needed, why did you spend 12billion quid on it?
    2) If it's not needed, why are you only shaving a bit of its budget off but not actually cancelling (or restructuring) it in a way that makes more sense?"

    Working in IT and a owner of a IT company it amazes me how a single IT project can cost 12Billion, ie £200 for every man woman and child in the country or nearly £500 per house hold! or 120,000,000 man hours or (55,555 man years) of development time at 100 per hour!

    I was a constulant on a big retail website, it currently process over a million of orders a day worldwide, is secure and works. The total development spend was in the millions (just under half of which was spent premoting and advertising the site and yearly cost of maintaining and running the sit is approx a million.

    The NHS project is 4 THOUSAND times more costly than that system!

  • Comment number 98.

    85. At 4:39pm on 09 Dec 2009, njl100 wrote:
    Re: #78 bryhers
    You state that there are 2.5 million more people in employment now than in 1997. How many of these are in the public sector? Most of them.
    How many are adding real wealth to the economy?
    How many are just sucking up our taxes?

    ===

    I can answer that.

    Total size of public sector in 1997 = 5.178 million

    Total size of public sector in 2009 = 6.039 million

    A rise of 861,000 public sector workers under Labour.

  • Comment number 99.

    84. At 4:37pm on 09 Dec 2009, bryhers wrote:

    "...The problem with the thrust of what you write is that it largely consists of retrospective wisdom.By this I mean the policies which the government should have followed if we knew what we know today"

    ===

    89. At 4:50pm on 09 Dec 2009, bryhers wrote:

    ."..The economist John Maynard Keynes was once accused of changing his mind. He replied that when the facts change,so do I.what do you do? The facts have changed,what do you do?"

    ===

    Well, it seems as though YOU would call it retrospective wisdom.! Oh, but that would be belittling the great Keynes, wouldn't it?

    You seem to be tripping yourself up here.

    Mind how you go!

  • Comment number 100.

    y @ 98

    Only 6 million work in the Public Sector?

    Are you sure? ... that seems quite lean and mean.

 

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