Real cuts

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we all have to face up to cuts and i believe that what ever party came to power in the election they would make cuts aswell. if we do not cut then we will be down the same road as greece which would be terrible for the uk. i think there needs to cuts but it is all about WHEN we cut and i think taking money out from the public sector really would hit people hard. IE... People would lose there jobs.

But me personally i think the chancellor is cutting at the wrong time. i think we should only cut in 2011 when our economy is stable, not when we are unstable at the moment. cutting now will result in more unemployed people and i think it could take us into a depression. and if i had the choice of VAT to be raised or national insurance i would choose national insurance. VAT will hit the poor and vunerable people of our communities!

The thing is .. what is the relative scale of these 'cuts'.

That is, how can people understand it?

By way of analogy, I offer the following {reprised} to illustrate:

This chap I know, he currently earns £54,100 pa but his outgoings are £69,700 pa yet he goes to the bank and asks to borrow another £15,600 this year to cover the difference between his income and expenditure.

The bank manager coughs and says this will be difficult because you currently have a mammoth overdraft of £890,000 which needs servicing at around 4% pa.

That is, you are already paying interest of £35,600 pa on your overdraft and you want to borrow even more?

Mr. Optimistic says Ok, look, to demonstrate my good intentions, I will cut my spending by oooh ... £620 this year.

If you were the bank manager, would you lend any money to this chap?

No - I would'nt either.

Unfortunately his name is Mr. UK plc and his real debt is the above numbers with several noughts tacked on i.e. hundreds of billions of pounds.

NB. This is a reworking of an earlier post, using revised numbers(May 2010), but I think you get the picture, which is definately not our friend Rosy Scenario.

I hear the cuts are being deferred until next year in Scotland - that must be nice for them.

Someone remind me what's "United" about this Kingdom...

The trick should be not to run up enormous, unmanageable debts in the first place.

That it was unsustainable was said time and time and time again during the boom.

The BBC cheerleaded the lunacy along.

These cut are sensible and have been done to try and help stablise the economy by showing the Markets (yes they are the people we owe all this money to ) that UK PLC although in debt , but not a lost cause .

kevinb 252 Previous

No - No excuses. This government needs to be held accountable in the HoC. Even more so now there is only one major opposition.

You say that Go's delivery was not perfect. Depends which way you look at it. I'd say he looks like a man who couldn't wait to tell the Country the bad news and at the end of it was expecting to climb the steps and lift the cup.

Life ain't that straight forward and he needs to find some other way of interaction with the people otherwise only trouble ahead.

GO may have pleased some right wing fanatics but is unlikely to be making many friends with the rest of us.

Labour are still stressing that the cuts will harm the economy . No what harmed the economy was they did not bank money for bad times when we were having good times .

It is proving that far too many have been glib about our deficit and debt levels.
By delaying cuts we risk burning the house down.
Better to even have a a softer 2nd recession now to control our deficit
than risk a Greek style meltdown. There will be hardship but we are
literally in an economic life or death situation. Learn the lesson. Don't vote Labour.

Real cuts - Nick Robinson
'The last government did begin to cut departmental spending - most noticeably the universities' budget - but it tended to hide this behind talk of making efficiencies or re-prioritising government programmes.'
--------------------------------------------------------------------
What about the first Gershon review and the cuts, er, I mean savings that flowed from that?

NR: 'Be in no doubt, however, that these cuts are real - departmental and council budgets are lower than they were - and by the end of the year they will be much much lower still.'
----------------------------------------
Er, once again ... what about the first Gershon review and the cuts or savings, that flowed from that?

Believe it when I see them!

I don't see any details of the £1.7 bn to be saved 'through delaying/stopping contracts and projects and renegotiating with suppliers'

Where is the list of these contracts / projects so we can make a fair assessement of them and the impact of them not happening.

In the past George Osborne has criticised such airy fairy 'efficiency savings' etc but what does he do once in office?

Yes he goes for the airy fairy figures !


I await the cries from Tory and Lib Dem MPs demanding that the local schemes in their constituency - the by-pass, the grant that would have meant an employer could expand, the new GP surgery or school refurbishment etc - be ring fenced

Nick, the main areas for cuts announced today seem to be consultancy, travel costs and slowing down projects and recruitment.

Some may think it is a bit shocking that the last Government didn't do this earlier. These areas are ripe for improvements in efficiency and value for money and, at a time of recession, one would hope that our politicians were working hard to cut out loose expenditure.

I hope someone will be calling up one or two of our former Ministers to ask them why they failed to spot such opportunities for savings.

re #4
The Tories are trying to make amends for the Community Charge!

2. At 6:22pm on 24 May 2010, Luke Thompson wrote:
But me personally i think the chancellor is cutting at the wrong time. i think we should only cut in 2011 when our economy is stable, not when we are unstable at the moment.

I doubt we could guarantee the economy being more stable in 2011 than now in spite of what the pundits claim. Sooner or later cuts will be made and jobs will be lost - or discontinued through natural wastage.

- - - - -

....and if i had the choice of VAT to be raised or national insurance i would choose national insurance. VAT will hit the poor and vunerable people of our communities!

Problem is that people have a choice of what they buy so with a rise on VAT they can reorganise their spending to a great extent. Most foods are non-VAT so they should still be ok in that area. Clothes are more of a problem - and the VAT on domestic fuel should of course be scrapped.

With a rise in National Insurance (just another name for tax) everyone in a job gets stung no matter how poor or wealthy they are unless a sliding scale is introduced as Labour had planned. Still not good though.

Nick - when was the last time that the Government had any money? (Trick Question)

Your sentence about governments with money centralising and governments without decentralising is a load of balderdash, hogwash and other words that would be moderated.

What, I assume you are saying is that governments dishing out money are centralised - the fact that a) it isn't their money it is the taxpayers and b) that they were borrowing 25% extra is conveneintly forgotten.

What a great way to to show how caring this Government is. I refer to what happened at BECTA today. the first Quango to go.

Announcements were made in the media and on the internet prior to the staff themselves being informed.

When staff were finally informed of the closure there was NO mechanism in place to support individuals who may have been distressed.

No timescales could be given by senior staff as to when closure would take place.

There was no mechanism in place to discuss the redundancy process or support individuals in finding alternative employment.

All of these issues should and would normally be part of any GOOD employers’ procedures

If this is an example of the way the Government cares about working people then the whole Country is in for a very big shock ( perhaps not?? ) .

Please will they show some respect and concern for the wellbeing of their employees?

4. At 6:51pm on 24 May 2010, englandrise wrote:
I hear the cuts are being deferred until next year in Scotland - that must be nice for them.

Someone remind me what's "United" about this Kingdom...

That is incorrect

The devolved parliaments of deferring the cuts to next year, although they will have to add them to next years cuts

So, they will not be avoiding anything

Politicans like across-the-board or percentage cuts so they don't have to actually take responsbility for what is cut. A standard should be applied so that one can compare the need of particular programs rather than this percentage or that. There may be more efficienceies in one place than another but no one really wants to do the hard work. These approaches never work and are never fair. Like the banking mess, no one will be held responsible and no one will be able to say who deicded to make the cuts or how they were made. It is all behind the curtain and nothing is behind the curtain. Modern government..smoke and mirrors..shallow leadership and business and banking puppet-masters pulling the strings.

7

I hope you aren't suggesting that I am a right wing fanatic?

I too would like to see more announcements in HOC

Maybe Blair has broken that forever

14

Children's clothes are VAT free

The local government cuts are perhaps the most damaging.

Local authorities will have to drastically reduce front line services and staff as the council tax is being capped by the Con-Dem government. This is because they believe in 'local democracy' and 'transferring power back to the people'. Yeah, right...

They want councils to take the blame for a lot of the cuts that are going to take place rather than make national decisions and be held accountable. A cowards choice in my opinion.

It will be interesting to see how councils react to this challenge over the coming 18 months and the further cuts that are no doubt pending.

17

Apologies

I missed a bit out

The devolved parliaments have the choice of deferring the cuts to next year, although they will have to add them to next year's cuts

4. At 6:51pm on 24 May 2010, englandrise wrote:
I hear the cuts are being deferred until next year in Scotland - that must be nice for them.

Someone remind me what's "United" about this Kingdom...

You don't say whether you are complaining because Scotland has deferred the cuts, or because England haven't.

#7 mrnaughty2

"No - No excuses. This government needs to be held accountable in the HoC. Even more so now there is only one major opposition."

Absolutely - the problem with these announcements is there is no opportunity for questioning on the specific programmes affected. Just bare numbers announced.

Doing this at a press conference shows yet more contempt for our parliament. I disagreed with Labour doing it that way and I disagree with the ConDems announcing policies in this way too.

If we are ever to restore faith and trust in the House of Commons then it must be seen to be the place where the important announcements are made, the big debates are held and the great decisions are made.

So much for 'new politics' - just more of the same.

What I find peculiar is Cameron's comments about reducing taxes, surely there should be no talk of tax reduction when the money raised by keeping them where they are could help pay off the debt or mean less cuts this year. Or am I missing something?

Another thing, councils are not allowed to increase their rates yet will receive less money from the Government which will lead to more job losses and loss of services. Why the restrictions on the councils?

And Scotland gets £200million GBP from the Fossil Fuel Fund to soften the blow north of The Tweed; the Welsh get a visit in the first week of Cameron's presidency ..... but what about Blighty.

Oh yeah. That's right. The English get stuffed yet again!

Change of Government - my backside.

What's in it for The English who cough up the most in taxes and revenue income?

#16 Wyn Davies

I agree - there is a right and a wrong way to do these things. It seems clear which way the coalition is going to choose.

2. At 6:22pm on 24 May 2010, Luke Thompson wrote:
we all have to face up to cuts and i believe that what ever party came to power in the election they would make cuts aswell.
________________________________________

No, you're wrong. If only we'd've all voted Labour then the government would've successfully protected jobs and public services by extending borrowing.

25. At 8:06pm on 24 May 2010, Drabdavid wrote:
What I find peculiar is Cameron's comments about reducing taxes, surely there should be no talk of tax reduction when the money raised by keeping them where they are could help pay off the debt or mean less cuts this year. Or am I missing something?

Another thing, councils are not allowed to increase their rates yet will receive less money from the Government which will lead to more job losses and loss of services. Why the restrictions on the councils?

The tax reductions are aspirational, not likely within this parliament. The reason for mentioning it, is to remind Conservatives that this is still the intention

The reason for the restrictions on councils, is to prevent them just raising council tax in an ad hoc manner over the next year or so

It is tight, yet these are the times we live in, thanks to the overspending since 2002

Had this overspending not happened, we would not have such a big deficit and would not need to be so draconian now

At 6:51pm on 24 May 2010, englandrise wrote:
I hear the cuts are being deferred until next year in Scotland - that must be nice for them.

Someone remind me what's "United" about this Kingdom...


: Well when you find the answer to your question please let us know up here in Scotland as I for one have been asking that question for years in fact decades, as the union is so unequal in Englands favour, that its bound to sink sooner or later. sooner as far as Iam concerned

16

I agree entirely that despite the time pressures, this is not the way to do these things

28. At 8:17pm on 24 May 2010, genjirrumatio wrote:
2. At 6:22pm on 24 May 2010, Luke Thompson wrote:
we all have to face up to cuts and i believe that what ever party came to power in the election they would make cuts aswell.
________________________________________

No, you're wrong. If only we'd've all voted Labour then the government would've successfully protected jobs and public services by extending borrowing.


This is just not realistic, as the markets would not have lent any further money

Even Darling said there needed to be BIG cuts

The only issue was the timing

2#

Stooge alert.

30

What part of £1600 more per person under the Barnett formula don't you like?

Which part of the West lothian question disappoints you?

If you are an SNP supporter, then you will realise that in the recent election you got slightly more than the Conservatives, so it would appear that the majority do not want Scottish Independence

I am one who would love it, sooner the better

27#

Yeah.... and those wonderful quaisi-socialists of New Labour never did anything like that did they?

Ever heard of the Office of the E-Envoy?

Remember what happened to it???

Know how many people got stuffed that day?

Know which Outsourcer it put out of business?

No.

Course you dont.

Some of the comments on this blog reflect the state of mind among the great majority of people in the street: they do not seem to grasp how serious our situation is. Grumbles about the speed of the cuts, demands to postpone action to 2011 (at least), complaints about losses of jobs, and so on. After all this noise about cuts we have managed to "cut" ONLY 6 billions out of 156 annual deficit! How long will it be and what price we have to pay before we can start paying the 1.4 trillions debt?
It is hard to believe that people still don't realise the damage that New Lab has done to this Country. The cuts announced today aren't serious enough. They are just political cosmetics. Hardly any mention of the millions of "non jobs" or jobs for the boys created by the previous administration to buy votes. Reduction of funds to the Regional Agencies. Why? Anybody who has dealt with these politically appointed bodies must have experienced a degree of frustration at the bureaucratic way in which they operate, their arrogance and their incredible wastage: they should be scrapped immediately not just starved of funds and well paid. And this is only ONE example. Come on boys show what you are made of.

If anyone is interested the latest polls have Conservatives on 39%, Labour 32% Lib Dems 21%

You Gov poll over the weekend

29 Kevin says

"Had this overspending not happened, we would not have such a big deficit and would not need to be so draconian now.

===

And nor would we have had any banking system left which is what has piled on the increase in debt and deficit, just like it has on every similar country, Spain bailing out a bank only this week.

Should the Banks not have been bailed out Kevin? Is that your view as was George and Dave who's judgement was to let Northern Rock fall!!

British Banks would have fallen like dominoes.

Of course though we could close our eyes and shove our fingers in our ears and pretend its not a global recession and although our deficit is one of the highest, thankfully our total debt in relation to our GDP is not as know doubt you are aware Kevin.

"Children's clothes are VAT free"

actaully child size clothes are free which means if you have an above average child in height etc then you pay VAT . And the definition of child size is based on the 1973 act which bears no relationship to cahnges in average height and weight which has been updated in the NHS cahrts

"No, you're wrong. If only we'd've all voted Labour then the government would've successfully protected jobs and public services by extending borrowing."

and bankrupted us like in the 1970s if they haven't already

36 Giannir

"Come on boys show what you are made of."

==

Yes come on, there are millions, get them on the dole like the good old days. They're not real people with real families, they're just "non job" people, just numbers I can reel off with the wave of a hand and a tap on my key board, get them on the dole and then I can call them dole scroungers too. Its a win win situation!!! Oh happy days.

Shameful, Truly Shameful.

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38

Eatonrifle wrote

Should the Banks not have been bailed out Kevin? Is that your view as was George and Dave who's judgement was to let Northern Rock fall!!

Northern Rock should have been allowed to fail, yes

The very reason that the banking industry is so damn arrogant is because they were not allowed to fail

By the way, Lloyds TSB wanted to buy NR, and Darling said no

They then got talked into buying HBOS

Otherwise we would have had LLoyds TSB, Barclays and HSBC, all ok

Just HBOS and RBS real basket cases

So if you want to believe the myth that the entire banking system is up the swanny then feel free

In my opinion, NR was not allowed to fail because it was in the North East

In the private sector the price for failure should be that you go out of business, this is a safety valve

The damage done by nationalising Northern Rock was huge, and the impact has not yet been fully felt

Terrible decision

When the audit of the financial decisions taken by "The Great Leader" Gordon Brown and his acolytes of Darling, Mandelson and co are made public, will they then be held accountable and have their homes and financial assets removed from their ownership. Between them they must be worth a few million.

They did not spend their way out of a crisis, they spent their way into one.

36. giannair

Without sounding borish theres a reason why the people do not seem able to know how serious the situation is and its because no one knows.

So as you say come on boys show us what your made of and tell us the true extent of debts and of course our assets. In fact just give us a final reports of accounts for UKPLC and then we can all the information.

43 KevinB

"The damage done by nationalising Northern Rock was huge, and the impact has not yet been fully felt

Terrible decision"

=========

Letting NR fail would have led to tens of thousands of people losing life savings not to mention a "run" on most banks as people panicked to ake sure they didn't face a similar outcome.

Everyones entitled to an opinion although I think you'll struggle to find a well informed supporter of your view.

Even Dave and George have admitted they called this wrong,

46. At 9:48pm on 24 May 2010, Eatonrifle wrote:
43 KevinB

"The damage done by nationalising Northern Rock was huge, and the impact has not yet been fully felt

Terrible decision"

=========

Letting NR fail would have led to tens of thousands of people losing life savings not to mention a "run" on most banks as people panicked to ake sure they didn't face a similar outcome.

Everyones entitled to an opinion although I think you'll struggle to find a well informed supporter of your view.

Even Dave and George have admitted they called this wrong,


Sorry, you entirely miss the point

I said Northern Rock should have gone bust

Those working there would have lost their jobs, yes

Those with savings would have received protection under the financial compensation scheme

The government could have stepped in to protect those with savings above the level of the compensation scheme, or could have elected not to

The vast majority would have been ok

So maybe you need to be a little more informed yourself before making accusations

You asked me what I would have done, so in that context what anyone else would have done is irrelevant

For the record, many very well informed people entirely agree with my view

46

As far as your run on the banks comment....

Darling's indecision actually caused the run on NR

RBS and HBOS needed to be nationalised

Had the Government made the correct call on NR, they could have fully nationalised HBOS and RBS very quickly

There would have been no other runs, this is just a nonsensical point of view

Cajasur in Spain have been in difficulty for well over 12 months, and they are a small bank, basically completely stuffed by poor underwriting, large defaults on their loans compared to the rest of Spain, and stuffed by the Spanish housing bubble going pop

Their assets are just over 0.50% of Spanish Banking Asssets, so it is of that proportion

So, hardly hugely relevant

19

You a Right Wing fanatic Kev? No of course not. I thought that you had 20/20 vision like me.

Well maybe like me. You appear to have a bit more faith in the Tories than GO than I do. I'm just cynical of any politician when they start opening their mouths and then when my hero ends up in the dock for taking a brown paper bag with £2,000 stashed away in it, I tend not to get too emotive.

No don't have boyhood heros Kevin, they probably turn out to be a Gary Glitter or Robert Mugabee or God help us Lord Archer.

49

You are right there with the heroes!

I used to do Leader of the gang at christmas......until one day......I didn't anymore, and felt very sick

@ 41 Eatonrifle

Missing the point. I don't blame real people and their poor families for the "non jobs" but the corrupt politicians who created these jobs.
The "non jobs" shouldn't have been there in the first place and therefore one cannot claim the right to keep them. I, like many millions in this Country, work hard as a self employed and have no guarantees for my future despite contributing heavily to the Country's economy.
I resent to having to pay with my hard and insecure work for people who work Monday to Friday from 9am to 5pm and earn more money and benefits.
Get real and leave ideology behind! As for the unemployment need I reminding you that thousands of jobs in this Country have been taken by foreigners (legal and illegal!) only because the British didn't think they were sufficiently remunerative or satisfying. Time to change the trend. Plenty of work out here, just not easy money like the social security ;-)

2.

Your right, any government that got in to power would have to make the same cuts, it's just not possible to continue 'extending' our borrowing and not end up in the same position as greece!

It's just impossible to imagine that after 10 years of Labour's borrowing and recession that there could be any other way out, obviously times are going to be hard, but I'm pretty sure that both Cameron and Clegg said they would be...

And yes it is disappointing that people will lose jobs but in theory, if the deficit plan works, in a few years we'll be back to where we started and can begin this whole process again, enjoy...

41 Eatonriffle.

Sad but true and you won't be hearing any cheering from this poster.

There will be a lot of worried families out there tonight and from someone that's had to make people redundant it is and should be the hardest decision of all and one that is made a measure of last resort not the one that the makes the balance sheet look good.

How low can you go! Hmmm! does a rattle snake have testicles?

Hey! does Law's have .........

re #43
Northern Rock may not have actually been insolvent. It is just that local people knew that sub-prime loans had been granted and that these type of loans were already causing problems for some Savings and Loans in the US. So they went for their cash. In their droves. Classic!

I think you are right about the north-east and Labour. There was some atoning to do for the late '50's and early '60's and a general election hoving into view from mid-term onwards.

#46 eatonrifle wrote:
"Even Dave and George have admitted they called this wrong."

Source, and evidence for this please. Or did you just make this up?

Remember that Labour spent months trying to find a private sector solution for Northern Rock.

re #48
RBS needed to be (part) nationalised? Hmmn. We may never know for sure. The short selling did for them when combined with the rumour mill. There is no doubt that the ABN Amro acquisition weakened them, but again they might just have got away with it but for a coalescing of these factors and the zeitgeist of the time.

A good example to look at would be Santander. They had a reputation for being well run and while having their share price marked down generally with the sector, were still strong enough to pick up some good assets at a knockdown price!

I wonder what would have happened if Darling with the BoE had guaranteed all deposits, irrespective of size, right at the beginning. Would have been a very brave move but we might be billions richer now! I agree his delay on NR was crucial.

We appear to have seen off nicky. I wonder if all this talk of NR will bring him back to the fray!

If "government" spending is the underlying reason we are "out of" recession doesn't that mean we should ALL have government "jobs" rather than pensions, incapacity allowance, jobseekers allowance etc. That would surely end boom and bust. "Unemployed, Madam? Now let me see, two door knocker checkers in your postcode area. Oh dear there's a litter checker AND two salvage and recycling overseers.As your in a flat you don't have garden ------ got it! We'll get window boxes fitted. You're now head grdener at --- let's check your adress oh and Wanted Window, box fitter good rate of pay, civil service pension scheme.
Is this economics or have I joined Alice? If there's no "money" whatever tha is, how can we live in an alternative world where these "jobs" stimulate an ecoom producing NOTHING?
We need to have real jobs that pay real money to produce value for the country. This imaginary trust fund producing thousands of pounds in 18 years time for chilren is pie-in-the-sky. Anyone who remembers even vaguely 1992 prices has only a vague inkling of what inflation can do. In the glorious 1970s it was best to buy on credit because it avoided the invitable price inflation. The phrase "The pound in your pocket hs not been devalued" rings down the years as history echoes if not repeats.Then we had albeit poor industry to "export or die". Now? What good "government" jobs that help purchase Tesaicoopasd food so their workers buy Hometravwilk paint and diy goods so their workers buy Vaufohonscodaud cars using Texbpsaintesc petrol diesel and paying tax to employ government workers!!!! Whose making this "money" stuff? Virtually no-one so until we get some real money the Government has to stop itself and US relying on the Bank of Michel Souris.

cutting benefits is wrong if they are going to do that then if there are job losses who funds the newly unemployed it isnt fair there are people who really want to work and cannot find jobs the government are only interested in 18 to 24 year olds what about older people and disabled who want jobs as a disabled persom myself who helps us to find jobs

56. At 10:59pm on 24 May 2010, johnharris66 wrote:

#46 eatonrifle wrote:
"Even Dave and George have admitted they called this wrong."

Source, and evidence for this please. Or did you just make this up?

Remember that Labour spent months trying to find a private sector solution for Northern Rock.

I could have sworn it was Ken Clarke during the election coverage said it was the right thing to do over Northern Rock,i was ill at the time so i could be wrong though.

"Northern Rock may not have actually been insolvent. It is just that local people knew that sub-prime loans had been granted and that these type of loans were already causing problems for some Savings and Loans in the US. So they went for their cash. In their droves. Classic"

Its a bit more complicated than that. Too complicated for me to be bothered to explain. It wasn't because Northern Rock was giving sub prime mortgages. Im not sure they were. Its because they were dealing with financial packages supposed to be AAA secure that contained American
sub prime mortgages. The run was caused when an announcement was made on television news that the Northern Rock had requested liquidity support.This panicked their customers into withdrawing their money. It wasn't really necessary. Its a bit complicated and Im getting the feeling that I'm being reeled in. I suggest you look it up.

16. At 7:44pm on 24 May 2010, Wyn Davies wrote:
What a great way to to show how caring this Government is. I refer to what happened at BECTA today. the first Quango to go.
------------------------------
Oh stop being so precious. Everyone and everyone who was not part of a quango have been wanting the axe to fall on them for ages. If people who do work for these organisations (and I use the term loosely) have been sucking up our money over the last goodness knows how long then it is about time they felt the cold hard truth about useful employment.

Why hasn't the coalition announced plans to deal with the banking mafia - come on Vince where are you - has George got you muzzled? Obama seems to be going it alone when it should surely be a fundamental element of the government's plans to repair our economy.

47 kevinb

"For the record, many very well informed people entirely agree with my view"

Not the current governments bank and business secretary Vince Cable. He wanted it to be nationalised.

I think your obsession with allowing Northern rock to fail is about class warfare. Lots of people in the North East vote Labour therefore the North East is your enemy. What about all the other banks that received government help? Do they vote labour in the USA? (Fanny mae and Freddy Mac). Interesting hearing these Hardwidge period classic comments again though. Do the one about the Southern Rock again. That was my favourite.

51. At 10:35pm on 24 May 2010, giannir wrote:
............. I, like many millions in this Country, work hard as a self employed and have no guarantees for my future despite contributing heavily to the Country's economy......

Unless you primarily export goods or services abroad then you contribute no more or less to the economy than a public sector employee. You're simply moving existing money around the economy.

The cuts are important - but not the whole story.

The new government must dismantle the surveillance/nanny state created by Brown and Blair. Not only would this save money, but it would help restore civil liberties.

With regard to the Regulation of Investigatory Powers Act (RIPA), it is not sufficient to say local authorities may continue snooping if they get permission from a magistrate.

Local councils should have NO powers to tap phones or intercept emails, under any circumstances!

If a crime is suspected, that is a matter for the police - not local councils.

RIPA must be repealed altogether and consigned to the dustbin of history.

Want to save money?

Leave the "EU"!

"It's an old truism that governments with money centralise and claim the credit for spending whereas governments with no money decentralise and pass on the blame for cuts.
So, it is with today's announcement."

The new government's only been in place for a few days. The previous government spent 13 years getting us into a situation where we're spending £160billion more than we earn every year.

Labour wanted to let "growth" pay off most of the deficit instead of cutting spending (or raising taxes too much), but the deficit is so large that that's impossible for 2 reasons:

1) The interest we pay on the debt massively outstrips any gains we could ever get from growth. Remember that we don't just owe £160billion, that's just a single year's overspend. We actually owe more like £1trillion (or more like £2trillion if you count all the off-balance-sheet stuff), and that total debt is still increasing by about 15% per year at the moment. It's completely unsustainable (unless you have a growth rate of about 20% every year for the next 20 years or so), and we're a hair's breadth from being classed as bankrupt.

2) The markets know point 1 is true and so need to see real cuts happening to avoid us being put into a situation like Greece.

The cuts might be uncomfortable for unions (and for private companies who had been contracted to the government on pfi etc), but they have to be done. If we don't cut now, then the situation would become far far worse.

Also, please can the BBC stop saying that cutting public spending takes money out of the economy? It doesn't, it's the complete opposite. Cutting public spending allows the private sector to keep money that it otherwise would have had to pay in tax rises. So, although a private company which had a government pfi contract might have to lay off some workers, it means that all the other private businesses in the country who didn't have that pfi conttract won't have to pay the tab for that contract as tax payers.

I'll be happy when the cuts reach £120 billion a year -at that level we might, just might, clear the Gordon Brown debt mountain in 10 years (IF the world's economy is as benign and helpful as it was from 1995 to 2007).

Otherwise my grandchildren will still be paying extra taxes on his behalf.

Cut, cut, cut and cut again - and sooner rather than later as it can ALL be blamed on Brown - then we can have some middle-class tax cuts in 2014.

Start with charging for education, the NHS, and fully-privatise Council services (ie Councils, which should then be functioning only to provide the specific services the public have voted for in referenda)
Bins daily, weekly, fortnightly or monthly? Why should the Council IMPOSE the collection intervals - and not ask people what we want (and the cost) and let US choose?

Darling has the cheek to say the coalition has not given enough details about the 6billion cuts!
Darling then says labour were going to cut 15 billion, but gave no details!

What a shower the ex labour government were.

Labour cancelled the spending review to hide what was coming and said the country was at risk if 6 billion was cut this year, even though they now say they were going to cut 15 billion (they never mentioned that pre election).

Darling then says announcements should be made in parliament! I remember every labour 'headline' was announced on the bbc or in the newspapers, never in parliament,hypocrites to a man.

Labour are completely to blame and I wish this new government every success as do most of my colleagues and friends.

#70, RTJ199

Absolutely bang on - Darling's hypocrisy was staggering.

65. At 01:23am on 25 May 2010, spotthelemon wrote:
51. At 10:35pm on 24 May 2010, giannir wrote:
............. I, like many millions in this Country, work hard as a self employed and have no guarantees for my future despite contributing heavily to the Country's economy......

Unless you primarily export goods or services abroad then you contribute no more or less to the economy than a public sector employee. You're simply moving existing money around the economy.

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

Wrong!! If all every single one of us did was simply move money around, then the economy would never have grown, ever. But the economy does grow, usually year on year, with occasional retreats during recessions. The economy grows by creating wealth - and all wealth starts being created, in the first instance, by taking some natural resource (sunshine, water, what's in the ground, etc), and converting it into something more useful (food, shelter, energy, clothing, transportation, along with all the other paraphenalia of our modern lives).

Now, a government could do this, along with the private sector. But history has shown that governments are not very good at doing this, at least not efficiently, and more often than not in physical delivery terms either. So it makes sense for the private sector to do it, which usually makes a far better job of it, and then have the government (which is funded by us taxpayers) pay for it, at least for those wealth creating goods and services that are deemed to be in the greater public interest.

But the money used to pay for those public sector-provided goods and services comes initially, for the most part, from the private sector, and they get that money by creating the wealth in the first place. It is NOT done by the private sector simply moving money around, as you glibly state.

70

Darling is not a fool. Given a freer rein as Chancellor, he would have made earlier and deeper cuts to public expenditure and been more honest with the public about the need to get it back under control. But he was constantly battling against the No10 judgement that (a) it was poor tactics to give us bad news ahead of an Election and (b) talk about public expenditure being 'out of control' would reflect badly on the overspending that Brown had sanctioned.

But Brown has gone now, and Labour needs to move on and grow up. Darling's performance yesterday suggests they still have some way to go. I feel sorry for BECTA staff and for this summer's graduates who were hoping to work in the public service, but the idea that this package of cuts will have a significant net impact on employment is implausible. And Darling's criticism of the Government for failing to give detail of job losses is risible - he certainly wouldn't have been stupid enough to do anything of the sort himself.

70. At 07:04am on 25 May 2010, RTJ199 wrote:

Rampant hypocrisy seems to have now moved in some quarters from a matter of embarrassment to a cynical campaigning platform.

Perhaps because there are some media who see more merit in stirring than reporting, and who view press releases as news headlines without much need for being questioned.

It goes either to competence, or agenda.

68. At 06:00am on 25 May 2010, getridofgordonnow wrote:

...please can the BBC stop saying that cutting public spending takes money out of the economy? It doesn't, it's the complete opposite.

I expect facts from my uniquely-funded national broadcaster. And, preferably, accurate ones.

62. At 00:45am on 25 May 2010, Mick wrote:
16. At 7:44pm on 24 May 2010, Wyn Davies wrote:

This seems to have been of great concern to some, as this report suggests (though many comments would seem to indicate the concerns highlighted might not be too great):

https://bbc.kongjiang.org/www.bbc.co.uk/blogs/thereporters/rorycellanjones/2010/05/becta_does_it_deserve_to_die.html

re #61
Good point. You're right. But all banks, including the wannabees, trade paper. It wasn't necessarily the paper wot dun it!

However, NR weren't into that in such a big way. It was B&B who had gone mad both on offering sub-primes AND trading paper. I haven't looked it up yet, but do I recall correctly that the 'bad' bit of NR is twice as big than the 'good' bit? The 'good' bit plus the 'not really bad' bits of the 'bad' bit could well add up to the fact that NR was solvent but just having a current net assets problem. Don't want to diminish that, because it is very important for a bank, more so for a primarily mortgage bank.

I was in the US when this was happening at first and was following it over the internet. However, I recall on return the radio testimony from people in the north-east who spoke of hearing from relatives who worked at NR that there COULD be problems because of LOANS made, so they went to their local branch for information and/or to withdraw savings. This was before NR made the call for support.

You are right, it is complex and we'll avoid a complete re-run right now. The early estimates from the Liquidator were hopeful - some news will pop up no doubt around the autumn when the meejah do their 'x years after' thang!

"Im not sure they were. Its because they were dealing with financial packages supposed to be AAA secure that contained American
sub prime mortgages."

Not strictly true.

They were issuing their own collateralised mortgage packages through an offshore company in Jersey. NR's problem stemmed pretty much exclusively from the fact that they borrowed short and lent long and their business model absolutely fundamentally hung on the liquidity markets. Very high risk, very lucrative when conditions are right. Disastrous when wrong.

Now how many other private sector firms with a dodgy business model have been saved by the Government? Not flippin' many. Saving NR was purely about saving votes in the NE heartland. It should have been allowed to go under. Same with HBOS. 80% of its debts, which then Lloyds got saddled with were down to bad commercial loans, the remit of one Peter Cummings, who thought he was untouchable. Not mortgages. Not sub-prime. Bad commercial loan decisions. Nothing else.

"2. At 6:22pm on 24 May 2010, Luke Thompson wrote:
we all have to face up to cuts and i believe that what ever party came to power in the election they would make cuts aswell.
________________________________________

No, you're wrong. If only we'd've all voted Labour then the government would've successfully protected jobs and public services by extending borrowing."
====================================================================

Which cloud-cuckoo land do you live in??? Have you any idea of the size of our accumulated debt? When interest rates pick up, we'll soon be paying out most of our income in interest to lenders!!!

These £6bn of cuts are a very small proportion of the annual deficit of £156bn. There's masses more to be done. As far as pain is concerned, "you ain't seen nothin' yet".

57

Nicky

AAAAAAAAAAAAAAAAAAAAAAAAAAGGGGGGHHHHHHHHHHHHHH

This morning my brother, two of my closest friends, and my former university flat mate are all either unemployed or have been give a timetable for their redundancy.

My brother worked for an events and training company. They relied on government funding to operate. That funded was cut yesterday. They have had to close down, axing a work force of 54. My former flat mate also worked for a training company who have had to lay off half their work force for the exact same reason.

My two friends both work for local councils, manning IT systems which deal with social care and planning respectively. Due to these same round of cuts their departments have both had to axe staff. They've both been working there five years, but have been given a timetable for their redundacy.

This is the reality of the 'cutting wasteage' which the Conservative party duped the country with in the lead up to the election. Raning about avoiding Labour's 'Tax on Jobs' is all well and good. But when the alternative means thousands of people working in local government AND in companies which relied on funding FROM local government lose their jobs is that really worth it?

61. At 00:33am on 25 May 2010, DH Wilko wrote:
"Northern Rock may not have actually been insolvent. It is just that local people knew that sub-prime loans had been granted and that these type of loans were already causing problems for some Savings and Loans in the US. So they went for their cash. In their droves. Classic"

Its a bit more complicated than that. Too complicated for me to be bothered to explain. It wasn't because Northern Rock was giving sub prime mortgages. Im not sure they were. Its because they were dealing with financial packages supposed to be AAA secure that contained American
sub prime mortgages. The run was caused when an announcement was made on television news that the Northern Rock had requested liquidity support.This panicked their customers into withdrawing their money. It wasn't really necessary. Its a bit complicated and Im getting the feeling that I'm being reeled in. I suggest you look it up.

Actually, I am afraid that you are wrong in part

You are correct in saying that NR did not offer sub-prime mortgages, so the other poster saying they did was incorrect

They did have greater arrears on their mortgages than was disclosed to the FSA on their regular returns, and this information may have 'got out' on the local grapevine..no way of knowing

They did not actually get involved in the sub-prime issues in the US either

What did for NR was trying to expand too quickly, and having a model that relied entirely on the wholesale money markets to fund their lending

In other words, their savers were never able to deposit enough to lend to their borrowers

When liquidity on the wholesale markets WAS reduced significantly due to the US scenario, NR were stuffed

They had no plan b, and for a business of that size to be so reliant for their entire existence on one funding stream, was unforgivable

When they requested liquidity support, as you say, it was a shock

Darling delayed in acting, and this caused further panic, queues, and the run began

I do not write this in an adversarial way, simply to provide the actual story

As it happens, Lloyds TSB tried to buy NR very early on, so the poster who said that the government tried to sell NR for months was wrong

Darling blocked that

A sorry tale all round, really

Various directors have been fined, and banned from working in Financial Services ever again

64. At 00:58am on 25 May 2010, DH Wilko wrote:
47 kevinb

"For the record, many very well informed people entirely agree with my view"

Not the current governments bank and business secretary Vince Cable. He wanted it to be nationalised.

I think your obsession with allowing Northern rock to fail is about class warfare. Lots of people in the North East vote Labour therefore the North East is your enemy. What about all the other banks that received government help? Do they vote labour in the USA? (Fanny mae and Freddy Mac). Interesting hearing these Hardwidge period classic comments again though. Do the one about the Southern Rock again. That was my favourite.

Vince Cable isn't the be all and end all

You are mistaken re the class warfare comment

I like the North East, it is a great place. My anger is totally directed at a flawed business, not the people working for that flawed business

IF Governments interfere in failing private businesses to keep them afloat, then they remove the safety valve, which is there

Some people may very well have class warfare as an agenda, not me

66. At 01:55am on 25 May 2010, DistantTraveller wrote:
The cuts are important - but not the whole story.

The new government must dismantle the surveillance/nanny state created by Brown and Blair. Not only would this save money, but it would help restore civil liberties.

With regard to the Regulation of Investigatory Powers Act (RIPA), it is not sufficient to say local authorities may continue snooping if they get permission from a magistrate.

Local councils should have NO powers to tap phones or intercept emails, under any circumstances!

If a crime is suspected, that is a matter for the police - not local councils.

RIPA must be repealed altogether and consigned to the dustbin of history.


Nick Clegg wants public involvement in which laws are to be repealed

May I suggest that you write to him directly, as I have read your RIPA post about 100 times, and I am sure that you will get a reply from him

I also agree with you as it happens

How can we ever trust a Labour government again with the economy given this litany of waste?

They weren't investing in front-line public services, as they claimed. Far from it. £2B on government advertising, £80m on Becta quango.

For sure tougher cuts will have to come but Brown's argument that cutting any spending early will lead undermine recovery is total fantasy.

It is reported that Regional Development Agencies will stay or go depending on how popular or otherwise the RDA is in its area. Under Labour the northern RDAs were well funded and extremely popular because they handed out gold bars to all who asked. In the south, the opposite was true making the south east RDAs very unpopular, particularly with Tory shire county chiefs. (Witness Kent CC and SEEDA.) Ergo those who spent all our money on so-called economic development projects get to be saved to continue public sector profligacy, while those with tiny budgets, and who were relatively frugal with public money, get binned. Funny old world.

The Labour Party was promising cuts on a scale more austere than those of the Thatcher era. All we are talking about is timing. The situation in Europe has accelerated the need for action. Let's move on to more positive things like the effects of some of the reforms promised by this government.

"But when the alternative means thousands of people working in local government AND in companies which relied on funding FROM local government lose their jobs is that really worth it?"

The companies have to diversify. Harsh, but unfortunately, thats the way it is. The local councils... well, there's no other way of dressing it up, its unaffordable, low hanging fruit.

Either that or keep on spending at 3bn pounds a week and the IMF will do it for you, if not worse. Its all well and good going on about being duped, but ultimately your choice. You either think monopoly money grows on a tree in the garden of No11 Downing St, or you're more realistic.

Pretty obvious Bertie Wooster has us headed for a double dip. 3 million unemployed by Christmas?

Good to hear that he has no cuts what ever for the 'overseas aid' budget. Make sure you look after the people that count.

How would India afford it's space programme if he didn't keep sending them our money?

re #82
Amen! And yes! Yes, again, I say yes! Especially the last bit.

I have been exercised for years by the fact that we are all over MPs, parties, Westminster, for three weeks every few years and when it is all over we are back slumped on the sofa watching the footie or Coronation Street. I am as guilty as most but I have made some effort to engage in between times with my MP, Government Ministers, the media etc on issues that I feel are important and am motivated to take up. If you like, posting here is a small bit of that.

I, too, would encourage all on this site to let Dave & Cleggie & Co know what you think about any issue that is important to you.

Here are some tips:
Posted letters better than e-mails.
Short letters better than long.
Copy letter to your MP, even if in different party.
Copy letter to national (quality) newspaper.
If you write c/o House of Commons you can put three or four letters in one larger envelope with one stamp.
When you hear PM or a Minister or MP wittering on radio or TV write and challenge them if you disagree.
Support them if they are doing something you approve of or is right, especially if it is brave.
Ask questions.
Chase for replies.
When received, ask more questions!
Give them encouragement to do good.
Be polite.
If handwriting letters, don't write in green ink. {Martin Bell says he received letters written in green ink around the time of full moons!}

Let's get this representational politics thing really going!

And hey! HEY! Let's be C A R E F U L out there, today ...

It would appear from reading these comments that through all of this people are simply looking to blame instead of accepting what needs to be done.

There are a priori arguements here about how Scotland or Wales might have more than those in England. There is mistrust of anything or any action a politician is carrying out.

We all knew that there would be cuts but now people want to defer them and complain about how it'll affect the status quo. The fact is that the economy set itself up for failure- it would have done regardless of the party in power- because humans are greedy and so by extension is everything we do.

I wonder how many people were complaining about how things would be if things went boom when their house value soared.

I wonder how many people who have started backlashing against each other on here about their colours have a clue more than anyone else about whats best.

We are all in this boat together... I don't think now is the best time to argue amongst ourselves whilst the sea threatens to pull us under. There will be time for that once we are safely back on the shore. For now lets just keep on bailing.

Gerry 76

Now how many other private sector firms with a dodgy business model have been saved by the Government? Not flippin' many.

By the Tories probably none - by labour only a few more.

In other Countries the governments do tend to step in a lot more. The problem lies between a flawed business and a a flowed business model.

All businesses have to undergo change. Take for instance BA. Yet again this year BA is expected to make substantial losses on it's business operations. Is it flawed business or does it business model have to change. The banks are not flawed businesses but for a while there business models were. it was right to bail out the banks correct their their business models and make sure that there to be4 sold of at a profit at a latter date.

We should have done the same with Rover and Chorus. Other Governments would have done so.

This also applies to UK plc. Do we let it go bust or change the business model?

re #78
My apologies for the tortology AND the nicky fright!

re #80
Another apology - to DH Wilko - we are re-running the NR thing and its all my fault.

SorREEEE!

Last line of kevinb's - Hmmn, not enough of them, unfortunately. I am not totally in favour of completely bank bashing all of the time but I have an uncomfortable feeling that quite a few guilty parties in the banks will escape any sanction. Not happy about that.

Unfortunately for us many of the good arguments that were advanced in 2008 to cope with the international financial crsisi were poooh-poohed by the leftie posters and the government at that time. I think time suggest we were right, but that's not much good now.

Now we have to cut, something that was always forecast and expected. And we are not alone. Spain last week and Italy yesterday are proof that everybody realises the money splurging game, in the name of investing our way out of trouble, is well and truly up.

Browns old strategy is well and truly discredited, and now all governments are in the same state - over borrowed, overcommitted to state participation in the national economy, and now easy way out of the problem. For all the euro countries they have the further burden of having to continually compromise without damaging the weaker members, ensuring enduring weakness overall.

We at least have the blessing of having our own currency, and being able to influence directly our own destiny.

Currently it means a weaker pound, depressed stock market, reducing public sector, which will bring with it lower national debt and growth opportunity. Later a resurgent economy will see the need to raise interest rates, to battle inflationary pressures, which will strengthen the pound and make the UK an attractive place for foreing investment again.

Tomorrow things will be evn better......

88

Quite right

People who moan about everything and don't vote are just so annoying

Someone like DT who has a strong belief in an issue, should write to their MP, and MAKE IT HAPPEN

Too right

Incidentally, the Dollar/Euro is rapidly approaching the 1.17 level it was at originally

There are very turbulent times a coming

76
"They were issuing their own collateralised mortgage packages through an offshore company in Jersey. NR's problem stemmed pretty much exclusively from the fact that they borrowed short and lent long and their business model absolutely fundamentally hung on the liquidity markets. Very high risk, very lucrative when conditions are right. Disastrous when wrong."

Yes I did get that wrong. The money markets I think had the problem with these mortgage packages. They increased the LIBOR rate, Which gave Northern Rock problems borrowing to maintain their business model. Which was wrong. Something like that. The company tried to grow too quickly. Several other former building societies did similar I don't think they were allowed to fail either.

I blame Thatcher, Reagan myself and the financial industry who they allowed to take over the US and the UK. Where did Blair end up when he left?

"Now how many other private sector firms with a dodgy business model have been saved by the Government? Not flippin' many. Saving NR was purely about saving votes in the NE heartland. It should have been allowed to go under."

Railtrack? also have you forgetten about your donkeys wearing red rosettes theory? Unfortunately We don't have PR Labour only need enough votes to win the seat. With the Conservatives being the party of the south and the Lib Dems seen as a wasted vote, who else do you think they should vote for? I waste my time every general election to vote Lib Dem by the way.

Gerry Mandering 86

It is all just tinkering anyway. 6 billion is peanuts and if this coalition found this amount of savings hard to find, which they obviously did, the real figure to be cut will prove impossible for them. Some of this 6 billion they have already spent, so the figure for reduction of debt is smaller anyway.

Unless this coalition is prepared to start dealing with the real issues such as welfare, public sector pensions and pay, they are on the road to nowhere. Some of the cuts they intend to make and some of the tax rises they have made, are wrong in my opinion. They have already ring-fenced some areas which should be subject to cuts such as the NHS, this massive budget could certainly take some cuts. Overseas aid, is another budget which should see cuts. It seems pretty certain that with the combination of left-wing and right-wing parties, up to now, there is neither the ability or the will to really get to grips with this debt.

I do not buy this 6 billion this year is enough, nor will the markets, I believe. Britain has real scope for big cuts and moving money from the public sector to the private. Anyone looking at the UKs growth figures will understand this needs to happen sooner rather than later.

This 50p tax should also be reversed and all the other punitive tax measures put on high earners. It will not raise any money, as already many high earners have moved to reduce their tax bill, for this coming tax year. This will, therefore, see a reduction in tax collected for 2010-2011. Furthermore, with the NI rise and the very high capital gains tax still in the pipeline this will most certainly impede growth. No wonder Osborne looks so unhappy.

It would perhaps be better for Britain is the IMF did take over our economy.

"But when the alternative means thousands of people working in local government AND in companies which relied on funding FROM local government lose their jobs is that really worth it?"

Public expenditure cuts always have victims, and it is good to see a post here which deals with the reality of the cuts' impacts.

But high taxes also kill jobs. And over the next few years we're going to have to endure a combination of tax increases and expenditure cuts which will mean that our economy and employment will grow much more slowly than it otherwise would have done.

Cameron and Clegg will get the blame for this. But I'm afraid it is Brown we really have to thank for getting us into this mess. He ramped up the public expenditure that created the sort of jobs your mates are doing, without raising taxes by enough to pay for them. So, the jobs were paid for with borrowed money, even though our economy was buoyant at the time. Now we have no alternative but to rein in the massive overdraft Brown took out on our behalf. As a result, we'll spend decades paying higher taxes and getting less public expenditure for them.

New Labour started well in 1997. But, by 2005, Brown started to believe he could walk on water. Your mates are paying the price for the fact that he couldn't.

#93 is it the policies that GB persused and Euroland copied will soon
bring down the euroland, if that is the case we truly owe GB a huge debt of gratitude.

90

BA is only able to keep in business because of the landing slots it has

Other than that it wouldn't last 5 minutes