Parting shot from CBI boss

Once again the CBI, ALL political parties ignore the elephant in the room namely the EU. The coalition policy (hope) that redundant public sector workers will be hired by the private sector simply does not explain how how British job seekers will be given a job in favour of EU job seekers. If by some miracle of alchemy economic growth rates increase. How on earth will the government stop the immigrant hordes?

The CBI is right to castigate the government but once again the frustrated electorate are confronted with Red tory and Blue Labour. The economy is going nowhere. So far "growth" manifests itself through the HS2 rail plan which is a Keynsian reflex rather than entrepreneurial endeavour - does Cameron (can also read Clegg/Miliband/Balls/brown) really care? I suspect not.

So the cuts are politically motivated (oh all right, in part). Its good of Sir Dick to catch up with the rest of us on that. So the cuts might not work and could actually stop growth. Its really good of Sir Dick to catch up with the rest of us on that too.

Cameron probably isnt too bothered at this parting shot given it takes a wee bit of limelight away from the innocence of Coulson.

Sir Richard says "the tax and spending policies of the last government created a substantial structural deficit" and goes on to claim that "spending cuts and this month's VAT increase will fix the structural deficit over time".

I'd love to hear his explanation of what a 'substantial structural deficit ' is
Detail Nick Detail. These people rely on you guys not questioning their gobbledygook.

Oh and BTW spending cuts and the vat increase will increase the deficit due to lost jobs and consequently lower tax receipts and higher unemployment benefits.

Whatever one thinks of the spending cuts it seems unarguable that the government has been a total failure in setting out its vision (let alone any policies) as to where the future growth is going to come from.

Financial services will continue to be an important part of the economy but even if we wanted it to it will be a long time before they are contributing the sort of tax revenues we saw during the boom years. If we are not careful the next boom will be driven by offshore money buying up cheap UK assets because of the weakness of the pound.

My fear is that the Government have been in power less than a year, their honeymoon is already over and they seems to spend their entire time dealing with issues that if they had been handled better would not have required so much effort. Andy Coulson, BSkyB, tuition fees are all examples of issues that have been handled very badly.

Reducing taxes more for the poorest will help as they tend to spend more of their income. Richer people invest or save or spend overseas. Something needs to be done about the cost of fuel for businesses as this will restrict growth. Immigration is a political hot potato so balancing the needs of industry against the general populations' wishes is a difficult thing to do but in the interim we do need some sort of immigration quota. Better training for our young school leavers more matching them to careers and jobs rather than exams would be a good start. Better attitude from big business would also be useful but I will not hold my breath. What would be most useful is carrots to encourage overseas companies to invest here and british companies to remain. I am sick and tired of overseas call centres in India and Manila and wish more could be done to get these companies to create jobs in this country. What is stopping them? Too much beaurocracy, too high a tax rate and unfortunately wages set too low overseas. Get that sorted and growth will come.
Labour had no plans for growth apart from spending public money and creating non jobs so they should keep their mouths closed as they have nothing useful to add to the debate.

No3 - economicstudent

Your point on the structural deficit is a really good one. I notice that Clegg used it for the first time recently to defend the VAT rise - clearly someone told him to stop banding deficit on its own because its becoming clear that more and more people see this as being brought on mainly by the global recession.

Now Lambert uses it to and we need it to be well-defined and quantified so that the Coalition can be judeged against it - a) can they reduce it sensibly with their policies and b) where it can be clearly seen that their policies are potentially damaging ideoligical ones.

Wont hold my breath.

Like leaders of every other grouping, the chairman of the CBI is looking at his own and his members' bank balances and to hell with the rest of the country. Then Balls managed to get his tuppence in, criticising the coalition's policy in spite of the fact that his ideas still remain the same as the ideas his mentor and co-economic superhero Brown and himself used to attain a position of borrowing 150 billion quid a year with no clear idea how to get themselves out of the mess they got themselves into. Either we build a strong debt free economy ,or we continue on the track Labour recommended, where the only direction is down.

I seem to remember Sir Richard commenting during Ed Balls stewardship of education and his "diploma policy" initiative and referring to a "culture of low aspiration" to which Ed replied "Of course every individual business leader is entitled to his or her opinion".

I think you have a point, Cassandra. The outlining of a growth strategy is not even starting - I think Vince needs to pull his finger out and get to work on helping businesses, as well as George helping small businesses more and cutting H&S law and other red tape. The coalition need to make their own weather and start talking about these things, get some buy-in from the electorate and move things forward. I think the mood of change is with us and if the coalition don't keep up, Labour will steal their moves (if they're smart, or they could stick to the same old deficit denying)

"It's not enough to slam on the spending brakes. Measures that cut spending but kill demand would actually make matters worse".
-------------------------------------

And there you have it folks. Anyone with even the slightest bit of intelligence understands this. And that’s why George Osborne doesn’t. Ed Balls will have a field day with this. And it also explains one of the reasons why after so many years of new labour...... and a recession, the conservatives still couldn’t get a majority.
Of course its clear the poorest will suffer worst as a result of the Conservative led coalitions policies. And many of the wealthy who vote, fund and are associated with the tories will weather this economic debacle unaffected.
Ethical ideology 0. Ecomomic competence 0.

Welcome to the Dave and George show.

@1: Leaving the EU is the only answer the right has. Actually, there is also the "blame it on the previous government"

The Coalition has had six months to state it's intentions. Instead the Tories have took the Lib Dems up the proverbial creek and when AV comes around they'll rob the equally proverbial paddle. What's more the public have essentially been told that it was Labour's fault. It's true, the British public aren't that stupid, but we voted them in to help fix the economy, not blame Labour until the next election

Messrs. Cameron and Osborne are public schoolboys. They have been brought up to laugh at adversity and I'm sure they will. Sir Richard is tilting at windmills.

The last government left this country in an economic mess. It was 15 years in the making and will take many more years to put right. Given our present situation, the best we can hope for is medium-term growth of 1-2%. This will not be sufficient to absorb the unemployment resulting from public sector cuts/immigration/reduced activity in the financial sector/youth unemployment. Things are not about to get better.

The damage inflicted upon our economy was unpardonable. It was as if we were led by economic illiterates. We spent, we borrowed, we wasted, we indulged ... we did everything but plan for the future.

Well, the future has arrived and we now have to deal with it.

Having endured the last 15 years, I am prepared to be patient ... for a while.

Lambert is just confused about the economy if he thinks he can separate what is being done to the public sector from the growth prospects and therefore Ed Balls is confusing if he says he agrees with Lambert. There may be little talk of a double dip but writing off the likelihood is a little bold. No doubt about a jobless recovery (if that is not a contradiction it is certainly an oxymoron). Next mess is bankers' bonuses (sorry bonds).

Private business needs only one thing and that's confidence. Immigration is irrelevant. Carbon emissions are irrelevant and the retirement age is irrelevant. Margeret Thatcher reduced income tax and neutralised the unions. This gave British business confidence and Britain was still taking advantage of it until Socialism did what it always wants to do and spends other peoples money and ruined the economy. Sir Richard actually said the word confident. That's all we need. Let individual people free and they will create the growth that is necessary.

If politics has indeeed trumped economics on a range of policies, why do we assume that is a bad thing...?

It cannot, for instance, be even remotely sensible to keep allowing immigrants to flood into the country, when there are already millions unemployed here, we have to pay them benefits to be unemployed and build the infrastructure (e.g. houses/services) to support the influx of new people.

What we should really be doing, is training the unemployed to take the vacant jobs, changing attitudes to certain types of job, helping the unemployed relocate where necessary. Perhaps even paying a more appropriate wage for the work done, instead of business leaders preferred solution of bringing in dirt cheap labour from abroad and casting existing UK residents onto the scrapheap...

13. At 8:04pm on 24 Jan 2011, TonyH

Dont make the mistake of thinking a govt is financially constrained in the same way as a household or a business. It issues the currency and the only finacial constraint is inflation caused by the economy operating at full capacity. 2.5 million unemployed is not full capacity.

All governments since the 70s have imposed a VOLUNTARY constraint on themselves that means they choose to borrow an amount equivalent to their deficit spending.

This allows them to justify a 'natural' rate of unemployment defined as whatever it takes to keep inflation low. It is a massive con basically and we are still falling for it. Ed Balls may actually be one of the few politicians that understands this but I'm not holding my breath.

9. At 7:49pm on 24 Jan 2011, Peter White wrote:
"cutting H&S law and other red tape"

What H&S would you cut then?, it is there for a reason because in the past unscrupulous business owners and lax individuals have caused injury and death, be it drivers hours or temperature measuring and cleaning in food outlets it has a purpose.

That life is lived forward but understood backwards is nowhere more apparent than the speed at which events are overtaking the present government.Ireland is in political crisis after severe spending cuts and two bank bail-outs by the ECB.Its default position is no longer paying of the deficit,that`s rising,but letting the banks write off part of their debt.

This policy for the fringe economies of Europe has recently been recommended by the rather staid "Economist" journal,asking "Does the Euro have a plan B?"

Sir Richard Lambert`s anxieties on the British economy reflect what happens when cuts are not accompanied by a strategy for growth.In relation to the current policy,Sir Richard has repeated an earlier comment of Mervyn King, that Mr.Cameron and Mr.Osborne are more concerned with politics than economics.

Let us hope that if the present policy is shown not to be working, the government will have the wisdom to change course before thay do too much damage.This will test whether it is based on economic calculation, or a small state big market sector ideology.

This comment was removed because the moderators found it broke the house rules. Explain.

I doubt that Sir Richard said that business supported the VAT increase. Business likes to support tax cuts so that it can then say that this will lead to more jobs as opposed to say bigger dividends for shareholders or say bigger bonuses for bankers. Thats why they like the spending cuts because it means tax increases are less likely and they have more to give to those who already have.

Tony 13

"The damage inflicted upon our economy was unpardonable. It was as if we were led by economic illiterates. We spent, we borrowed, we wasted, we indulged ... we did everything but plan for the future."

I hope you know there is an alternative explanation of the course of the British economy in the Labour years.However I think we share a similar interest in the future of the UK economy,its growth prospects and whether it`s able to serve the interests of the British people.

You condemn the failure of the last government,you need to be equally critical of the economic policy of the present one.I don`t know if you saw the excellent BBC 4 programme last night on the disparities of wealth and income in the UK,and the way they are produced by a market economy.This trend will increase as what remains of state assets are sold off.The forest,the NHS etc.

There`s a follow on programme tonight,9pm,same channel. You`ve still got time to catrch it.

This comment was removed because the moderators found it broke the house rules. Explain.

17. At 8:25pm on 24 Jan 2011, EconomicsStudent wrote:

'... All governments since the 70s have imposed a VOLUNTARY constraint on themselves that means they choose to borrow an amount equivalent to their deficit spending.'

=====================================================

I don't think the bond markets would agree with that approach. As lenders, I think they might baulk at uncontrolled deficit spending. If you choose to live the high life you need an income to support it. If your earnings are insufficient - be you household, business, or government - it is the lender who determines your lifestyle. Choice doesn't come into it.

As regards inflation, I think that the printing of money (QE) is a much greater threat than full employment. Employment inflation can be controlled using interest rates. QE leads to devaluation and because the UK is a net importer, this results in higher import costs and consumer inflation.

But hey, that's just my take on economics. One thing's for sure ... it definitely is an inexact science!

Talk about damning with faint praise. Lukewarm support for the coalition to date and what must be some disconcerting echoes of Labour's criticisms of their approach to dealing with the deficit.
Nick writes that "Ministers 'feel' that they have won the debate on the deficit." Interesting that he, perhaps very carefully, doesn't say that they have won the debate.

22. At 8:53pm on 24 Jan 2011, bryhers:

Point taken - although I am inclined to allow the present incumbents a little more time to act decisively.

Meanwhile, thank's for the BBC4 pointer. I'll watch on iPlayer - just my sort of program!

Ministers can kid themselves as much as they like that they've won the debate on the deficit. They haven't.

In fact they've been acting directly on the wrong deficit.

They should be tackling the external deficit which lets the Chinese and Indians do our factory work for us.

And they should be tackling the tax deficit - the amount by which they are failing to tax the wealthy.

Well, in a sense they are. Because by reducing the economically necessary government deficit by cuts, they are reducing demand for imports in a crude Keynesian way and they are ensuring the rich continue to be undertaxed

Nick says "The chancellor and the business secretary are seeing ministers from every department in turn to ask them what they're doing to help the economy grow"

I hope George and Vince like the Sound of Silence.

26. At 9:29pm on 24 Jan 2011, you wrote:
22. At 8:53pm on 24 Jan 2011, bryhers:

======================================================

Thank's again - I enjoyed that!

The CBI have administered a mild kick to Cable's posterior. And I think they are right to do so. Perhaps there has been a little too much making the LibDems in particulat seem "nice" and too little on clearing the way for business.

What there is not in his speech is any support for Labour's approach on the cuts.

Bryhers - I will also look for that program.

In my view the thing Blair and Brown should be most ashamed of domestically (i.e. other than Iraq) is that inequality in this country increased during 13 years of Labour rule.

Ed X 2 - be nice if you could acknowledge that as a FAILURE.

The Governmen have made some well-known moves to support business already. But the CBI are right to remind them that they cannot afford to take their foot off the pedal. It won't be easy but the UK has to moved away for good from Labour's public sector-heavy economy (which is self-evidently unsustainable) to a healthy private sector economy. Everyone will ultimately benefit from that.

I think Sam Cam should be appointed as a Business Ambassador with a roving brief (and a budget) to promote UK fashion/retail brands. Seems to me she would know more about increasing exports than Cameron/Clegg/Osbourne/Cable combined.

Why should the French and Italian fashion brands be the ones lusted after by the Chinese and the Indians?

We need the banks to do their job; providing no fuss, reasonably priced credit to the individuals and businesses who need it, and doing so at the kind of stable and modest margins which befit a core national utility. Without this, it's hard to see us growing much for the foreseeable future. I'm not too optimistic since although I say it's "their job", they don't agree; they see their job as either indulging in an orgy of crazy credit creation (and paying themselves absurd amounts), or not lending at all (and paying themselves absurd amounts). Surprised the CBI don't highlight this. Shape up, CBI.

19. At 8:35pm on 24 Jan 2011, bryhers wrote:

....Sir Richard Lambert`s anxieties on the British economy reflect what happens when cuts are not accompanied by a strategy for growth.In relation to the current policy,Sir Richard has repeated an earlier comment of Mervyn King, that Mr.Cameron and Mr.Osborne are more concerned with politics than economics.

-> Sir Richard doesn't explicitly mention Cameron/Osborne (your spin). But he sounds like a man frustrated at all politicians for the current lack of vision of how to achieve growth. I agree that the 'Coalition' need to spend much more time promoting growth as they do cuts. But equally in the real world any government is going to have to spend lots of time defending cuts .Labour says they have the answers for growth, but do they really ? Or just more of the same OLD failed ideas ??..... Sir Richard argues that cuts are required as is and will resolve the debt/structural deficit . I doubt you or Ed Balls agree with at all. I note Ed seems to have had a recent change of mind over having any cuts at all! but we know what he really thinks. Sir Richard's speech is also very critical of the tax & spend policies of the Labour Party. I doubt you or Ed agree with this either.

Let us hope that if the present policy is shown not to be working, the government will have the wisdom to change course before thay do too much damage.This will test whether it is based on economic calculation, or a small state big market sector ideology.

-> Your idealogy is if im not mistaken was that 'the market is a source of huge inequality unless tempered by state intervention...'. I doubt Sir Richard, industrialists, any business leader or any business man would agree with you. State intervention has failed and isn't the solution to growing our economy

12. At 8:01pm on 24 Jan 2011, Its_an_Outrage wrote:
Messrs. Cameron and Osborne are public schoolboys. They have been brought up to laugh at adversity and I'm sure they will. Sir Richard is tilting at windmills.
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Richard Lambert, as President of CBI has never impressed me favourably. Neither did his predecessor although I liked some of Digger's attitudes. Perhaps CBI President is one of those jobs - like Archbishop of Canterbury - that has a peculiar effect on the incumbent.

I have to agree with the tenor of his statement as reported by the BBC and NR. I don't want a return to Labour spin, but Dave & GO outlining a serious understanding of what is wrong with the UK economy and fiscal system together with their plans would go a long way to calming some wilder fears and giving us all something to work towards.

At the present time all we have is cuts. What then?

At the present time, we have extra external pressures. What is the proposed response?

We are not all public schoolboys (or girls), despite which we can still laugh at adversity and plough on.

It is helpful to have a direction in which to plough on.

Hey! Etc., etc. ...

Sir Richard should have gone all the way and told the absolute truth, which would have been very helpful. It is true to say that this Coalition has not set out a vision for growth. Before the Election the Conservatives were making the right noises, but since the Coalition was formed the policies seem to have changed. There are no meaningful cuts in Government spending. This Government is relying on tax rises to solve the deficit, something which has been tried before and has failed for the same reasons it will fail now.

The word has gone out that Britain is now a very expensive place to do business and is over regulated. Thus not only are companies and wealthy investors leaving Britain, but they are not being attracted here to do business in the first place. With so many Countries now offering competitive rates of tax to attract business, Britain is in a very poor position to compete. Therefore unless you do two things at once, that is, make substantial cuts and lower tax, the desired growth will always be as far away as ever. The 50p tax, for instance, is merely there, as a symbol of proof of punishing the high earner, not to collect tax. Though exactly what high earners have done wrong is a mystery to everyone, considering they have simply paid their taxes like everyone else. Ever more regulation is coming down on business in the form of maternity leave, equality etc which further impedes business in growth policies.

Britains poor education over the years has produced a work force that is not fit for the modern World. Over the last 10 years the UK has constantly moved down in the World tables in key subjects. This has meant that business has become reliant on those from other Countries to do skilled work. This is not a problem which can be solved quickly, and therefore Sir Richard is correct when he says that immigration is still needed. The Governments scrapping of the forced age of retirement is as much to do with keeping skilled workers at work as it is to save money. The new generation of workers do not have the skills to replace these people. However this will lead to much youth unemployment.

So with Britain being uncompetitive on tax rates and regulation, and not having a skilled work force, why would any good business come to Britain, is more the question. Therefore growth is very unlikely to come.

In Britain there are also a lot of business that should have died a natural death long ago. This will most probably happen in the next few years, seeing more unemployment. Inflation is also a factor to contend with, which will see the erosion of all our living standards. All the same old problems Britain has seen before.

So why is Sir Richard saying this Governments policies are more about politics than they are about helping Britian. It is not for the reasons Labour would like to believe. It is because the Coalition now, like all political parties fears the public. They do not dare to make the right decisions for the future of the UK, because of a public which has become reliant on Government spending, through high taxation and overspend by Government. Furthermore the Conservatives are being held back by the awful Lib/Dems in Government, who are still wedded to spending.

I have come to accept also, that Britain will lose its financial sector, the only really lucrative side of the economy. With Government potentially coming forward with regulation that the World will definitely not follow, it is inevitable. Furthermore, the publics lack of understanding of banks, and their importance to our economy, seems to hold too much sway with both the media and the Government. It is not that the banks will not lend, it is that there is little demand for them to lend from good business. Business is not expanding nor opening new operations in Britain. If banks are to lend to small business, they must be sure of a good success rate, otherwise we will be back to the same problems.

It perhaps would have been better for Labour to have won this last Election. The demise of the economy under the policies of Balls would have happened much quicker. This would have enabled outside forces to take over our economy and impose the correct measures needed. It seems the British public will only believe the truth when Britain does crash and burn.

In a sense Sir Richard Lambert is right in that the focus is more on the reduction of public spending than it is on specific measures to create new business, commerce and industry.

Government seems to be saying that it feels that it has created the right market conditions and now expects the private sector to step in and create the necessary new jobs.

Sadly this type of thinking is not the same as the short, medium and long term strategic planning that is necessary to develop the UK infrastructure and generate new jobs.

With planning, though you start with certain fundamental aims and objectives that drive your policy implementation, you also build in a backup plan which automatically kicks in when your monitoring indicates
that things are not going according to the desired plan.

The abolition of Regional Development Agencies for example may save money but does it lessen the role they had to play. Growth by expectation does not contain the necessary backup plan utilised when developing growth by planning.

I do wonder what indicators Government uses to prove that growth has taken place. Do they check to see if there are more new small businesses or whether fewer businesses have gone into receivership? Do they check to see if small firms are taking on extra employees or merely doing more with the existing ones? Is the growth reducing numbers of unemployed people in the UK or merely merely increasing through the use of imported labour and expertise? Are all regions growing at the same rate and if they aren't what actions are government taking to remdy this? If unemployment is high in one region and there are shortages of the skills possessed by those people in another region what plans are there to move the unemployed to the available jobs? And what actual action is being taken to deal with the long term unemployed?

I get the impression that the government does not have enough knowledge of the market place and its workforce. It tends to work reactively by responding to expected and unexpected changes rather than working proactively in a well planned, well-executed and well resourced way to move events in a particular direction.Cutting the benefits of the unemployed for example reduces public expenditure but only generates misery if there are no jobs for the unemployed to go to. Not a good plan as miserable voters tend to vote for someone who reduces their misery not those who increase it.

And what of the deficit? Given that it was the prime driver of much government action why are we not hearing regular monthly reports of the deficit going down? Is the government borrowing less month by month ? Has the amount of interest being paid fallen? The public wants to know these things especially because of the hardships they are going through.
Couls it be that the deficit reduction plan is not working? Is that why we hear politicians merely repeating the same message that the cuts need to be made and that we are are all in this together?

I found Vince Cable's comments about the government moving on implement plans for growth puzzling when surely they should have been done at the same time as plans for dealing with the deficit. It was almost like an afterthought as if getting the deficit down was a panacea for all our economic woes and a substitute for good planning.

You can almost hear the government thinking " ah well just focusing on deficit reduction seemed a good idea at the time but we did not think it through", something that was typical of New Labour thinking and look where it go them?

Like many things in government only time will tell, but to quote the song, "there may be trouble ahead"!! Let's hope the government has a good plan to deal with it.

"I'd love to hear his explanation of what a 'substantial structural deficit ' is
Detail Nick Detail. These people rely on you guys not questioning their gobbledygook."

Oh great, another lefty apologist.

The rotten champagne socialists had to be removed and the deficits ... plural ... have to be tackled both structural and in balance of payments.

This means tackling and redistributing the opportunities held by the vested interests and establishment as the truth is that there is little difference in reality of action between the old champagne middle groud socialist govt and the coalition govt. The only difference is that the Tory end of the Coalition will fight to preserve institutional privileges on tax rates/loopholes and in the city.

The UK economy is still tipped in favour of traditional and new vested interests and the business interests of the banks, monopolies, globalised, well connected and all of which are joined at the hip with the political class.

The coalition govt need to tackle the vested interests and flatten out these privileges and promote all things British or they are no better than Old new Old Labour.

This does mean having vision, strategy, planning and a clear delivery process and time-table ... this would mean charging e.g. supermarket monopolies for importing too much food from overseas while British milk churns rust in English farmyards and rural and county cow sheds stand empty. - 100,000 new jobs?

This does mean a new scrappage scheme linked to purchases of British built vehicles - 200,000 new jobs?

British banks have strangle-hold on our Uk economy (pay 10% of UK tax revenues and control 90% of UK capital) and turn their back on the UK to pursue global speculative investment opportunities - our banks need gradual restructuring for putting Britain first.

Immigrants and health tourists should pay higher UK taxes and be charged for their health care as a completely 'open door NHS' is unaffordable (£103 billion pa and rising).

The UK needs vision and strategy ... but British vision and strategy ... CBI Lambert missed the important bit as all of these big noise,vested interest nitwits do ... the 'British' element of vision, strategy and planning.

The coalition govt can rebalance and redistribute the UK economy in the March budget by using redistributive tax policy as including tax policy for immediate effects such as selective import tariffing... or they can face a general election later this year or next year as the UK economy grinds to a halt as real net disposable incomes fall through the floor under global inflationery pressures, UK tax on tax on tax, vested interest greed and the EU straightjacket of red tape.

I have to admit that the Lib Dem side of the Coalition have the best ideas on taxes ... Council tax, CGT, income tax ... perhaps GO should listed to them more in drawing up the March budget which can very easily be his first and last... and reverse the VAT increases!

Anyone got it yet?

"I hope you know there is an alternative explanation of the course of the British economy in the Labour years."

Ah, theres a novelty. Another excuse to wheel out the "it wasnt us, we didnt do it, it was the tories fault and it started in America" line...


"You condemn the failure of the last government,you need to be equally critical of the economic policy of the present one.I don`t know if you saw the excellent BBC 4 programme last night on the disparities of wealth and income in the UK,and the way they are produced by a market economy.This trend will increase as what remains of state assets are sold off.The forest,the NHS etc."

What, Auntie Beeb stirring it and pushing the soft-left agenda trying to get the villagers angry enough to sharpen their pitchforks in Whitehall, whilst their chosen political party pulls itself apart at the seams? Perish the thought.

21#

Does your BBC handle end in uqwit?

Susan

You seem to expect growth to come from outside investment. They are not doing this out of the goodness of their hearts it is to take money out. They will always go where they can get the best return - that was why Ireland appeared to have a booming economy. They can take their money out of this country too. So I wouldn't want to rely too much on inward investment.

The skills shortage is a problem and the education system does not seem to be delivering. However you need to look at cultural influences on attitudes to education too. Then ask yourself does the education system create or reflect the society in which it operates? Countries around the world that have rapidly improving education systems are characterised by strong pressures from parents. Unfortunately, my experience is that whilst parents say they want their children to achieve, they end up complaining that the children are under too much pressure. Furthermore, it is not unusal to hear someone on TV or Radio 'joke' that they were never much good at Maths. You have a few high profile and successful people who say that they weren't much good at school and the cultural pressure saying that education is a waste of time has been enhanced. There are poor schools and bad teachers, but they are not the whole story about the skills shortage.

10#

Hasnt anybody changed that scratched record yet?

39. At 08:22am on 25 Jan 2011, Fubar_Saunders wrote:
Oh great, another lefty apologist.


Ah Fubar the king of the one-liners.
Another classic.
What I really like about you is the amount of thought that goes into each post.

EconomicsStudent 3

The correct way to describe a structural deficit that is deemed very large and needing Government attention, is Chronic Structural deficit. I thought you would have known that if your are an economics student.

Reading through your posts, I think you are more a student of Labour than economics frankly.

Susan

What Economics text book did you get that out of ?

!A very large structural deficit that needs govt attention is a chronic structural defioit.'

Friedman, Keynes, hayek, Ricado......????
I must have missed it

31. At 11:31pm on 24 Jan 2011, Cassandra wrote:
Bryhers - I will also look for that program.
In my view the thing Blair and Brown should be most ashamed of domestically (i.e. other than Iraq) is that inequality in this country increased during 13 years of Labour rule.
Ed X 2 - be nice if you could acknowledge that as a FAILURE.

Surprised that a nice intelligent girl like you would fall for that one.It`s a myth.

What is true is that unfettered markets produce huge inequality of outcome at any level of social mobility.In the Labour years the economy pulled strongly in that direction,Britain persisted in the wide disparities of wealth and power which first emerged in the Thatcher period.

However,public spending pulled in the opposite direction and Britain was one of the three cuntries which went against the world-wide trend to increasing inequality.The OECD Report,"Are we growing Unequal",(2008),states,p.5,..."the past five years saw growing poverty in two thirds of the OECD countries.Canada,Germany,Norway and the United States are most affected.The remaining third,particularly Greece,Mexico and the United Kingdom have seen a shrinking gap between rich and poor since 2000..."

The report contains more detail,is avalable on online.

Bill 43

Thats how the Global economy works, you either enter into being competitive or die. It is really as simple as that. Irelands demise was Government overspend and their housing market.

I think I have made all these points about education before. It did not seem necessary to repeat them.

Economics 47

You forgot to include is 'deemed very large'. If you are going to quote me, quote me correctly.

I think you missed a few lessons to be honest.

Ask your teacher.

Richard H2

"-> Your idealogy is if im not mistaken was that 'the market is a source of huge inequality unless tempered by state intervention...'. I doubt Sir Richard, industrialists, any business leader or any business man would agree with you. State intervention has failed and isn't the solution to growing our economy"

An excellent programme by Michael Sandels,BBC 4,2100 HRS Sunday,discussed a range of issues connected with social mobility,the market and equality in front of a live audience.He teaches social philosophy at Harvard, but like good American academics he is not narrowly specialized and knows some economics and sociology.The follow on Monday programme was more philosophical in tone.

Have a look at the Sunday offering if you have time,then come back with some comment.

Anyway Nick, welcome back after the weekend...

"He fears that the government's cap on immigration could stop firms hiring the workers they need."

Then he can hardly criticise the Government for not looking at the wider picture when he himself is failing to do so. There are more than enough workers in the UK to fill the vacancies that are out there. Problem is that Sir Richards fellow members are not taking them on, but still continuing to take n cheaper immigrant labour. Out of the 300,000 new jobs created between June and December, two thirds went to workers from overseas. His post was Head Of the CBI. The Confederation of BRITISH Industry. Not the Confederation of Globalised Industry. Whoever succeeded Labour HAD to do something about immigration and thanks to the input of the LibDums, what is being done at the moment is not nearly enough and is full of holes and is being exploited by external global players. There is work out there, but you are no longer competing in a market against other locals or people from an adjoining city, you're competing for jobs against the rest of the world on your own doorstep. And, unless Sir Richard's members are going to change their tune, they are seriously not helping. Government does not have an obligation to provide private sector jobs to three quarters of Europe and Asia, they do have an obligation to provide a good framework for its own citizens. Labours open door policy has been catastrophically damaging in this respect. And if the CBI cant see it, they dont deserve to be listened to. Cant hire the resource immediately? Then grow your own. Train your own staff instead of always thinking its someone elses job to do it for you, you lazy so and so's.

"He's worried by ministers plans to scrap the age at which people are forced to retire, ministers' unwillingness to expand London's airports, proposed anti bribery laws and much besides"

Retirement? Well, thanks to the elephant in the room which no-one dares deal with, pensions, thats not likely to change soon. In order for it to be affordable, if the current rates are to be honoured, we'll all have to try and retire later and later. Those of us who arent chucked on the scrapheap by Sir Richard's fellow members in our mid forties, anyway. Given that private sector pensions were virtually killed off by the monocular megalomaniac in his first week in office in 97, I cant see what other alternative it has left us, but to try and keep on working til we drop.

As for expanding Londons airports, Heathrow is already at bursting point. Gatwick cannot grow larger. The only viable alternative is Boris Island, which no-one has got the guts or the vision to back. Especially not Vince. Vince can barely see as far as the end of his own nose. And so far as anti bribery laws are concerned, once the membership shows its capable of behaving itself, then those kinds of legal steps need not be taken. Until that day, tough. There is a need for such legislation and that is that. Like it or lump it, Sir Richard.

"It's hard to see anything much has happened" on government promises to cut Whitehall regulation"

Again, with Vince in the chair, what do you expect? Still pandering to the soft left. So long as he's there and continues to run the department based on his own personal prejudices, like Mandy ran it as a means of expanding his address book of filthy rich plutocrat mates, it isnt going to change.

"Condemns the Business department and says it should become "less of a talking shop, more of an action orientated growth champion"

See above. Yet another department not fit for purpose.

"The speech's timing - on the eve of publication of what are likely to be sluggish growth statistics"

Which will be more than just ever so slightly influenced by December's adverse weather conditions, but hey, lets not let that get in the way of pursuing an anti-tory agenda, eh?

"... and just days after the return of Ed Balls to the economic stage - will ensure that it gains plenty of attention."

Especially with you helping it along mate, ignoring a lot else that has been going on in the Westminster bubble...

"Labour's new Shadow Chancellor says he agrees with Sir Richard but also claims that the CBI's boss agrees with him. Really?"

Anybody who believes a single word Blinky comes out with wants their bumps felt, as my old gran used to say. Ed is only interested in being leader and in his mind PM, the job that is "rightfully" his. Where have we heard that before?

"There is, however, one line that Ed Balls can point to - "It's not enough to slam on the spending brakes. Measures that cut spending but killed demand would actually make matters worse"."

So, Ed is saying that the only demand is from the state, fed by the golden teat of the Financial Services sector. The man has learned NOTHING, he cannot see the flaws in HIS policies which played a direct part in the mess that we are in now. Only ignorant fools, tory haters and politically illiterate idiots would follow this man beyond the end of the street.

"The government has struggled to develop a growth agenda. It cancelled plans for a White Paper on the subject. It published, instead, a list of problems rather than solutions."

Agreed, not good enough. Hardly surprised though. This lot couldnt lead their way out of a paper bag.

"The chancellor and the business secretary are seeing ministers from every department in turn to ask them what they're doing to help the economy grow. The fear in Whitehall is no longer a double dip recession but a jobless recovery."

Its not a jobless recovery. There ARE jobs out there. The problem is WHERE they are going to. And St Vince aint gonna do a thing about that.

"Ministers feel that they have won the debate on the deficit. Sir Richard Lambert's speech is a reminder than they are not yet winning the debate about how to get the economy growing."

Maybe so. Maybe some firmer leadership with real vision would help light the way. I dont see any chance of that though with either the current incumbents or the party opposite, who are merely trying to bide their time in the hope that they will be electable purely on the basis that they are not the George & Dave Show and in the hope that the wider populace retain this incredible goldfish like ability to not be able to remember anything past last week without being prompted by the media.

45#

Touche.

I showed as much as you.

Thats all I needed to show.

Did you think as hard about it too, or did someone else in yesterday's CommentIsFree think it for you?

"structural deficit"

We need to challenge people who use this expression.

1. Although I am no fan, Gordon Brown did broadly keep to his mantra of "prudence", i.e. balancing the public finances over the normal economic cycle - he only stopped doing it when the world's financial system went off a cliff and we faced seeing our banking industry go to the wall en masse.

2. The credit crunch was not a normal cyclical effect - it was something completely different caused by the meltdown in the USA.

3. If you look at the figures, borrowing by HMG to fund the bank bailout accounts for the excess borrowing with the additional stimulus Darling decided to apply to stop the UK going into a deep recession - we are still reaping the benefits of this now, until the spending is complete.

4. We have a substantial asset in the shape of our holding in bank equities which balances a large part of the "structural deficit".

5. Why does anyone think it makes sense to try and pay off this deficit by slashing general public spending? Clearly we wil be able to sell off the bank holdings over time - and use the money to repay a large slice of the strucural debit.

Think of a family whose house is damaged in a storm. They have to get a mortgage to fix it. Normal people accept that a mortgage is long term borrowing that will either be paid off in 20 years, or when the house is sold, but no - this family decides to live on the breasd line to pay it off as fast as possible. They're simply misunderstood the situation and paniced themselves into an unecessary and painful course of action.

The pace and speed of the cuts WHICH ARE ONLY JUST ABOUT TO BITE as well as the impact of the weaker pound depressing living standards and the lack of any credible policy to stimulate private growth points towards recession - the Irish experience is simply a foretaste of what is going to happen to the UK.

I'm glad the CBI has put its head over the parapet - but they need to stop advocating extreme deficit reduction because we can't take £1Tn of aggregate demand out of a faltering economy and not expect it to go into recession - add in the infantile libertarian ideology of today's Tories and you rapidly realise that there is nothing at the centre of GO's plans other than prejudice against public spending and government regulation.

50. At 09:01am on 25 Jan 2011, Susan-Croft wrote:
I think you missed a few lessons to be honest.
Ask your teacher.

OK Susan Will do. Thanks for heads up.

FS

41. At 08:28am on 25 Jan 2011, Fubar_Saunders wrote:
"I hope you know there is an alternative explanation of the course of the British economy in the Labour years."
Ah, theres a novelty. Another excuse to wheel out the "it wasnt us, we didnt do it, it was the tories fault and it started in America" line..."

Why do you find it so hard to accept that other people have a different view to you? Why should it be so important,unless your desire to dominate arises from some perceived weakness.

I would be concerned with your inflexibility,tendency to be abusive,flight of the Condor prose.Marks of an authoritarian personality which is found on the extreme fringes of all political movements.

susan @ 49

"Ireland's demise was Government overspend and their housing market."

And the banks, of course.

Last word:

Until this right wing government accepts intellectually that government is not an abnormality blocking the path of private capital, but is integral to its stability and growth, they cannot move forward because it means turning its back on the core institutional transformation of the past 70 or more years.

Fubar 52

I agree with a lot of your post. However, on immigration, I am afraid I do not agree.

You have to take into account the skills gap in Britain. Put your average Indian student up against a British one, and the Indian student is far in advance. In a lot of cases the British one does not even understand their subject to any standard. A lot of businesses cannot afford to wait to train people, they need them now. Also it is up to the Government to provide a skilled work force, through tailored, to suit the economy, education. We pay enough tax for goodness sake to provide for it. The immigration that needs to be addressed is from the EU where a flood of unskilled workers has been coming in.

You also need to take into account that a lot of the immigrants will do jobs our people refuse to do. That is partly why they are hired by employers instead of Brits. The work ethic of the poles for instance has ensured that many of them have gained work where our people have not.

Re inequality: free market economy acts to increase it, governments in liberal democracies can mitigate (but not reverse) with intervention - labour mitigate more than tory.

The UK economy contracted between Oct and Dec, unemployment is rising. We are in a double dip recession. Anyone care to defend the Tories?

49. At 08:55am on 25 Jan 2011, Susan-Croft wrote:
Bill 43

"Thats how the Global economy works, you either enter into being competitive or die. It is really as simple as that. Irelands demise was Government overspend and their housing market."

I think you`ll find that Irish government finances were in quite good shape.What did for them was the Irish state madxe itself responsible for the debts of the banks,much of which was toxic.The inflated housing market didn`t help,but a lot of the paper the banks held was international.

I wonder why people seem to be concerned what Mr. Balls thinks and says. To me he is so central to the disastrous failure of the last government to be relevant to anything very much: in short, he is a busted flush. The only relevance he has is what people bestow on him and more fool them.

The comments by Sir Richard are very valid in that there has been an absence of an economic strategy from the government so far. All we seem to have seen to date are very worthy expressions of faith in the private sector.

I can appreciate the dilemma of the Coalition in that they are trying to steer a loaded oil tanker away from the iceberg towards which the former captain drove it at full speed. We all understand that the necessary manouver is going to take some time to be effective and might not even succeed. However, it is reasonable to expect some idea as to outcome.

I do feel that this all hangs on the Banking Commission which has been given too long to make its report.

After the spending cuts, the tax increases the next intiative is well overdue. Now we need banking reform as a matter of urgency followed by the structural economic reform so that our economy can progressively revert to greater value added manufacturing.

Sadly, at the moment this could easily be made more difficult by inflation requiring stronger domestic interest rates which might probably increase the value of sterling against the US dollar and the Euro.

I don't think the Treasury really understands the tight-rope on which our economy is struggling. Or maybe they do and so are scared to do anything. For the Treasury this seems to be normal behaviour whatever the government.

61 RedandYellowandGreennotBlue

The UK economy contracted between Oct and Dec, unemployment is rising. We are in a double dip recession. Anyone care to defend the Tories?

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Remind me how many quarters of contraction are required for a recession?

We heard Dave and George say, quite often, in the General Election that we should listen to business leaders because they back our plans. I wonder if we will hear that now.
Yesterday I read the paper prepared by BIS and the Treasury on the path to sustainable growth published last November. I was really disappointed by its content not much there at all. It's not surprising, to me, then that the growth figures just announced are down to 0.5% in the last quarter.
Ireland shows us that you need both a reduction in spending and a strong growth strategy to increase tax revenues to bring down a deficit. It looks to me that the Government are cutting too quickly before the economy is growing at a rate strong enough to reduce the deficit. There is a real danger that the deficit will stay static or even increase this year. The question is do Dave and George have the bottle to admit they have got it wrong like Lawson did in the 80's when the Thatcher monetarism experiment didn't work out as planned.

Lest we forget....

This is the kind of 'stimululus' to the economy that the labour party likes to advocate..

https://www.telegraph.co.uk/news/newstopics/politics/8279974/Private-Finance-Initiative-hospitals-will-bring-taxpayers-60-years-of-pain.html

Never in the history of any government of this country has money been spent so badly over such a long period creating an illusion of growth.

This is the real newlabour legacy... giving children leaving school today the next sixty years to ray off their PFI cantracts.

Schools built as part of Ed Balls 'Building Schools for the future' programme now abandoned but costing the government £370,000 a year to maintain.

Hospitals built for a contact price of £1.2bn with a capital valkue of £118m.

What on earth were newlabour playing at?

More was spent on PFI in Gordon Brown's first year of office than the previous five years under the tories. PFI was never intended to be used for schools and hospitals but now we are all saddled with newlabour's debts.

Richard Lambert should make more attempt to explain where the private sector can help without the artificial prop of the kind of ludicrously inefficient government spending at which newlabour excelled.

£229bn of debt for £56bn of capital value... this would make most mortgage lenders blanche at the sheer dishonesty of it all. Returns of 71% all signed off by Ed Balls, Ed Miliband and Gordon Brown.

Never should this bunch of miscreants be allowed back into power. Whatever their politics, whatever their principles; they have sold this country up the Swanny river.

It's grim up north London...

61. At 09:33am on 25 Jan 2011, RedandYellowandGreennotBlue wrote:
The UK economy contracted between Oct and Dec, unemployment is rising. We are in a double dip recession. Anyone care to defend the Tories?


Must be a mistake Redandyellow for:

(Sir Richard) goes on to claim that "spending cuts and this month's VAT increase will fix the structural deficit .......

Sagamix 57

Shows the usual lack of knowledge on a complex issue.

60

Well a Government can intervene as much as it likes as regards inequality, it will make little difference. As the pie of the economy because smaller, through lack of growth, the poor and the uneducated will become poorer. You have to grow the pie by encouraging more business, by lower tax rates, less regulation and good education for its work force. These are issues that Labour failed to address when in Government, preferring instead to spend beyond the means of taxation. Thus the disaster we have now.

"I do feel that this all hangs on the Banking Commission" - stan @ 63

Yes, this is THE issue. Without a fit-for-purpose banking sector, without radical reform of this failed industry, we will struggle. Needs to be re-cast as a Utility, with an obligation to act in the interests of the wider economy rather than those of its own directors and employees.

61 RedandYello..

No pain, no gain.

We don't live in newlabour handouts for all anymore. They spent all the money.

The road back will be long and hard, but at least based on sound finances not newlabour fudged numbers and PFI.

It's grim up north London...

#34 Saga,

Couldn't agree more with you (for once :)

The banks have a large responsibility to generate investment capital and lend to businesses, however I fear they have been repairing their balance sheets with taxpayers money that they should have been lending; therefore enabling another round of bonuses (nice for them)

The coalition has not been clear in its proposals. I don't think they really have a clear strategy to promote the UK as a place to invest and do business, at the moment the focus is on cost reduction (a necessary task) but they seem to have no clear direction as to how to attract growth to the UK

Immigration is a red herring - there are more than enough people out of work here to fill the jobs, most of the 'new' jobs aren't that specialised that they all need to be filled from overseas employees. It's just cheaper to bring immigrants in

If they want to help then a clear plan is needed, not just cost cutting but growth planning - and when I say planning I don't mean 'just hope the private sector creates some jobs'

bryers 62

I have learnt from a long experience with you, that reasoned argument is pointless. Frankly I am shocked by some of the tripe you write, but it is not up to me to stop you continuing. All I will say is you are incorrect and the Irish problems are as I have said already.

"It's not enough to slam on the spending brakes. Measures that cut spending but killed demand would actually make matters worse"

OOOPS!

The performance of two broad sector of the disunited kingdom economy illustrate it well.

The world is coming out of recession. The tiny sector of the british economy exporting to them is growing nicely, fueled by the upturn in other countries and a weak pound.

The much larger sector that provides goods and services within the disunited kingdom is floundering - growth has been suppressed by the ideologically driven cuts.

It will be interesting to see the growth figures to be released today.

OMG (!) we've gone into a vacuous contraction. About to give birth to a poshboy Double Dip unless the drugs are changed.

Fubar @ 52 wrote:
There are more than enough workers in the UK to fill the vacancies that are out there. Problem is that Sir Richards fellow members are not taking them on, but still continuing to take n cheaper immigrant labour.

>>

Fubar, this point is only valid if you assume that companies are preferring immigrant over UK workers because they are cheaper. It is also possible - in fact, it's often true - that the overseas workers are better qualified. And sadly, given a straight choice between a worker from central or eastern Europe and one from the UK, with similar qualifications, employers opt for the immigrant because of a superior work ethic. You're probably thinking fruit pickers and the like, but that's only a small percentage of the overseas workforce in this country.

Global competition for jobs is inevitable. I can't remember who said 'British jobs for British workers' but it was a meaningless soundbite. The only solution is to improve education and training so we can compete better. Also, a more international mindset might help - as opposed to the constant bleat about how GB would be G again if only it weren't for those nasty Europeans and other foreigners.

60. At 09:29am on 25 Jan 2011, sagamix wrote:

Re inequality: free market economy acts to increase it, governments in liberal democracies can mitigate (but not reverse) with intervention - labour mitigate more than tory.

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

Not at any time under 13 years of 'entirely non strategic New Labour' did they mitigate more than ... what?

A 'free market' is not fair ... it just delivers outcomes ... the assumption of 'perfect competition' is used as a notion of fairness but that is an economic abstract that has never applied anywhere in practice.

The UK problem is now that our UK and foreign raider vested interests have a disproportionately large monopolistic and controlling import and other effects on the market outcomes and prices in this country ... which means they must be tackled, flattened, taxed out of existence, investigated and eradicated ... to give a true level playing field of British business and consumer opportunity.

Fairness and equality of opportunity has to be constructed and engineered ... it is most unlikely to just occur as a 'market outcome'.

For Britain this means having British perspective vision, strategy, planning ... being radical and bold ... flattening out vested interests, increasing competition, protecting and growing business opportunities ... having a cast iron delivery plan with British interest criteria on very issue... ignoring the Whitehall mandarins ... and getting on with doing anything and everything that put's Britain and British people first ... and first in every British queue.

This is also why New Labour and the champagne socialists failed so miserably and the inequality gaps have got wider ... and why it is time for the Coalition govt to deliver on their promises/pledges and manifesto commitments and tackle these vested interests.

The main weapon against these old and new establishment/vested interests (including UK banks, supermarkets, multi nationals, import spivs) is tax policy and this can be used with immediate effect to redistribute and rebalance the UK economy ... why does the Exchequor gather 15-20 times more in VAT than in e.g. import tariffs when our real net disposbale incomes are falling and all manner of rigged cheap and not so cheap imports flood our country and this is what has killed our innovation, growth in industry, jobs, domestic tax revenues, output and BOP figures?.

The only other issue is ... there is no point in creating extra new jobs and most of these going to all manner of 'immigrants' ... something needs to change in a big way and we need it now! This is mainly an EU related problem.

Is this really 'Britain' or is it just a 'nowhere land'

"Shows the usual lack of knowledge on a complex issue." - susan @ 68

Don't be churlish, Susan. The banks were a massive factor in the Irish demise and you forgot to mention. Just helping you out. As I do from time to time.

"Why do you find it so hard to accept that other people have a different view to you?"

Look who'se talking my dear bryhers! Or is the difference between us down to semantics where you accept that others have a differing view to yours, but the difference is that you holding your view makes you morally and intellectually superior to those you metaphorically throw in the big toy box labelled "mouth breathing unthinking right wing Daily Mail readers"?

I just think that people in glass houses shouldnt throw stones. Its quite simple. If you dont want what you've posted held up to scrutiny or for anyone to take exception to it, then dont post it. If you're looking for a fan club where you'll be lauded as a left wing sage, try Labourlost.

"Why should it be so important,unless your desire to dominate arises from some perceived weakness."

I dont have to dominate anything. Just offering a counter point and trying to blunt the left wing blades of revisionism.

"I would be concerned with your inflexibility,tendency to be abusive,flight of the Condor prose.Marks of an authoritarian personality which is found on the extreme fringes of all political movements."

And there we go. The final predicted flourish where the lady who cant bear to have her views held up to any kind of scrutiny that isnt sycophantic attempts to dismiss another poster as a closeted right wing crypto-fascist.

And you say that I'M inflexible, abusive, authoritarian.... Hah Hah. Brilliant. You might want to get yourself down to your local A&E, see if they can patch up that self inflicted bullet wound on your foot before the nasty baby eating tories close it down and leave you with nothing but a box of elastoplast for comfort.

Sagamix @ 74

Yes, it certainly looks as though Mr Osborne has got it badly wrong. No doubt he'll try to blame it all on the previous administration, but from a voter's point of view, that particular defense is wearing very thin.

64#

Not to mention the complete inability to distinguish between lower rates of growth and actual contraction. But hey, why should the original poster let the truth get in the way of a good tory hating rant? The plebs'll never know the difference. Too busy watching Dancing On Ice.

60#

Course they do Saga, course they do. Time for your lie down now.

nautonier wrote

there is no point in creating extra new jobs and most of these going to all manner of 'immigrants'

>>

I'm not sure why you have put inverted commas around the word 'immigrants'. Are you suggesting they are UK-born workers pretending to be immigrants? Anyway, your comment is untrue. Our economy benefits when new jobs are created, whoever does them. The US economy is three times the size of its closest rival and I believe you'll find the occasional immigrant among its workforce.

"60. At 09:29am on 25 Jan 2011, sagamix wrote:

Re inequality: free market economy acts to increase it"

You're stuck in the past Saga. The free market today is all about win-win. You've got to develop a positive outlook rather than that win-lose (or even lose-lose) view that you have.

Pull back those heavy drapes, saga, squint out at the bright shiny world outside.

We've already establised that 'inequality' is meaningless in the abstract. If I get 100% better off and you get 5% better off, we're still both better off. See, that's a win-win, but your blinkered view can't look beyond how much better I've been getting on (relatively) to you so you say there's something 'wrong' and want to tax the enthusiasm out of me. Wrong way of thinking, saga. Stuck in the old class war days of the 1960s.

61 RedandYellowandGreennotBlue

The UK economy contracted between Oct and Dec, unemployment is rising. We are in a double dip recession. Anyone care to defend the Tories?

>>>>>>>>>>>>>>>>>>>>>>>>>

ONS estimate that the bad weather contributed to most or all of the fall in GDP (-0.1% from Construction and -0.4% from Services), it would have been flat otherwise.

Amidst all this gloom, UK manufacturing growth increased again and IMF has revised its world growth forecast for 2011 unpwards.

#47 economicsstudent

I doubt very much that susan croft has even heard of Ricardo let alone read him.

#83 andy

for "tax the enthusiasm out of me...."

Most would re-write that as, "tax the greed out of me...."

82. At 10:14am on 25 Jan 2011, pdavies65 wrote:

nautonier wrote

there is no point in creating extra new jobs and most of these going to all manner of 'immigrants'

>>

I'm not sure why you have put inverted commas around the word 'immigrants'. Are you suggesting they are UK-born workers pretending to be immigrants? Anyway, your comment is untrue. Our economy benefits when new jobs are created, whoever does them. The US economy is three times the size of its closest rival and I believe you'll find the occasional immigrant among its workforce.

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

Those coming into Britain from the EU, to steal our jobs ... legally are not immigrants under EU bureacracy.
We're not discussing the USA ... we're discussing the UK !!!!
No wonder the UK is in such a mess when your kind of warped logic prevails when 2 out of every 3 new jobs in the UK last year ... went to an 'immigrant' ... but perhaps you yourself are a job stealing immigrant or just think that the UK is 'nowhere land'?

70. rockRobin7

'The road back will be long and hard, but at least based on sound finances not newlabour fudged numbers and PFI.'

Long, hard and full of potholes.

Which under the Tories we are encouraged to fill in ourselves.

#88

Apologies & correction... Coalition government.

Susie:

"You have to take into account the skills gap in Britain. Put your average Indian student up against a British one, and the Indian student is far in advance. In a lot of cases the British one does not even understand their subject to any standard."

I'm not defending the definite dumbing down of the last decade Susan, nor am I disparaging the academic abilities of Indian, Chinese and other students. But, I think its a bit broadbrush to say they're all great and we're all cr*p. But, more centrally than that, we're not just talking about students and graduates here, they're not the only ones in the jobs market. There are numerous other professionals, particularly in IT where outsourcing, offshoring and the abuse of the InterCompanyTransfer schemes have wrought some very serious damage.


"A lot of businesses cannot afford to wait to train people, they need them now. Also it is up to the Government to provide a skilled work force, through tailored, to suit the economy, education. We pay enough tax for goodness sake to provide for it."

In some respects true, but in others I absolutely fundamentally disagree. There is no reason why a company, regardless of its size cannot engineer into its plans for the future a policy for internal growth and sustainability of its own workforce and expertise - training and promoting from within, even if it means hiring in interims and contractors to deliver training needs analysis and to put the frameworks in place. Again, highly evident in the IT industry where it has been much much easier to import in cheaper labour already trained from the subcontinent or eastern Europe than train their own workers in house. And, this has really been going on for at least 10 years. They COULD do it, they COULD wait, they just dont want to. They see employee loyalty as
a one way street flowing only in their direction and if people want to get on, to develop themselves, they have to leave and go to different employers or fund their development themselves. Its not just the IT industry this will be happening in, it will be happening in a lot of other sectors as well and it doesnt just affect the young. The young are disproportionately affected because of the dumbed down standards leaving them at a distinct disadvantage to overseas sourced competition, I grant you that, but its not just all about them.

"The immigration that needs to be addressed is from the EU where a flood of unskilled workers has been coming in."

Yes, and from outside the EU and the recent court case where the Belgians found that they could no longer send an Afghan back to where he first came into the EU because "it would infringe his human rights" (Jesus Christ, how bad must it be in Greece compared to Afghan for that to be seen as a human rights violation?), now means that basically, anyone coming into the EU illegally can make their way to any one of the non PIIGS economies by whatever means, knowing they are safe from being chucked out or returned to their point of entry. You might as well just revert to Labour's open door policy and have done with it, handing out fistfuls of fifty pound notes and keys to subsidised BTL private sector housing at the unloading ramps of the ferries or in the Arrivals terminal at Heathrow. Its utterly ridiculous.

"You also need to take into account that a lot of the immigrants will do jobs our people refuse to do. That is partly why they are hired by employers instead of Brits."

Yes, and the main and I would say over-riding reason for this has been the culture of cradle to grave welfare dependency. Buying votes. "Doesnt matter what you do with the opportunities that life gives you, the state will always provide. Arent we great? Vote Labour!"

"The work ethic of the poles for instance has ensured that many of them have gained work where our people have not." Indeed, I dont dispute that. I have no problem with movement of labour across the borders of the EU, where there are vacancies that cannot be filled locally. That, after all, is what I am doing in Belgium. They couldnt find anyone locally to do what I do, so I got the nod. I didnt take anyone elses place. The Poles put a lot of tradesmen to shame and rightly so. Particularly plumbers, where the industry got a kick up the backside that it rightly needed. One would like to think that those who were previously in the industry have learned from the experience. Cost and quality are important, but there has to be a line drawn somewhere. One could look at the Arabian Peninsular where in the UAE, 80% of the populace are expats. The locals are all in quite senior positions and until recently, these countries/provinces had accumulated a lot of sovereign wealth through the exploitation of oil. That is not true of the UK and its fast becoming a thing of the past for the UAE, as Dubai has found out to its cost.

pdavies 82

Not true actually, it is far better for out of work British people to do the new jobs created rather than bringing in a constant stream of immigrants. The cost to the taxpayer of not only the new entrants to Britain including dependents, in services such as health, education housing and also possible benefits depending on the salary for the job. Plus the added cost of benefits for the unemployed Brit, far outweighs any gain.

The only time Britain should take immigration of any kind now, is to provide the skilled jobs British people are not educated to a level to do.

fubar @ 81

Not sure what your problem is with my point. It's factual. Labour DO tend to give greater priority to mitigating increasing inequality than the Conservatives. Brown's tax credit regime, for example. Plenty of others.

(mitigates = acts against something but doesn't eliminate it).

Thus, inequality will rise under Labour (in this era of rampant global capitalism) but not as much as under the Tories.

C'est ca.

83 AndyC555

We've already establised that 'inequality' is meaningless in the abstract. If I get 100% better off and you get 5% better off, we're still both better off. See, that's a win-win, but your blinkered view can't look beyond how much better I've been getting on (relatively) to you so you say there's something 'wrong' and want to tax the enthusiasm out of me. Wrong way of thinking, saga. Stuck in the old class war days of the 1960s.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

According to the somewhat potty notion of relative poverty, if we moved the poorest 10% of the UK population onto a remote uninhabited island, then they would be better off than they were in the UK, as they would all have the same amount of wealth, i.e. nothing. No-one would be living in poverty any more - they may have no food, shelter, medicine etc but at least they wouldn't be poor!

85. At 10:21am on 25 Jan 2011, eye-wish wrote:
#47 economicsstudent

I doubt very much that susan croft has even heard of Ricardo let alone read him.

>>>>>>>>>>>>>>>>>>>>>>>>>

Don't they make Pernod?

"86. At 10:24am on 25 Jan 2011, eye-wish wrote:
#83 andy

for "tax the enthusiasm out of me...."

Most would re-write that as, "tax the greed out of me....""



Would they? 'Most' people see enthusiasm as greed do they?

You think that if anyone gets a bit 'uppity and succesful' the best thing to do is teach them a lesson by taxing them in a penal way?

With me, success for others is a good thing, something to aspire to.

I suspect that with you, success in others is a cause of painful envy and a rising of bile.

let's hope there are more like me than you, for the sake of the economy.

83. At 10:17am on 25 Jan 2011, AndyC555 wrote:

"60. At 09:29am on 25 Jan 2011, sagamix wrote:

Re inequality: free market economy acts to increase it"

You're stuck in the past Saga. The free market today is all about win-win. You've got to develop a positive outlook rather than that win-lose (or even lose-lose) view that you have.

Pull back those heavy drapes, saga, squint out at the bright shiny world outside.

We've already establised that 'inequality' is meaningless in the abstract. If I get 100% better off and you get 5% better off, we're still both better off. See, that's a win-win, but your blinkered view can't look beyond how much better I've been getting on (relatively) to you so you say there's something 'wrong' and want to tax the enthusiasm out of me. Wrong way of thinking, saga. Stuck in the old class war days of the 1960s.

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

To say that Saga and I do not always see 'eye to eye' is something of an understatement ... but on this point I think that Saga is right in economic terms ... the UK free market is distorted by the unique situation/circumstances of the UK and new and old vested interests ... but on the point of the UK free market creating inequality ... I think that to some extent that he is right as the market as built up over-powerful new and old vested interests.

I recall hearing one UK importer (reputedly a billionaire) say recently that he would not invest in UK manufacuring unless the UK tax rate on his business was zero and he got a subsidy for investment from UK govt as the UK operating costs are too high and with too much red tape, employment law issues etc... obviously for these elevated and worshipped vested interest spivs ... the money is made in UK import spivving and not in creating UK jobs for British people.

If anyone wants fairness, open opportunity, etc ... then it has to be constructed in the UK as the UK markets are rigged in favour of monopolies, multi-nationals, banks, institutions, etc ... establsihment led vested interests.

This needs a strategy and politicians with XXXXX without the Ed.

robin @ route

I'd prefer it if you didn't blog about PFI (since it's a good point), better all round if you stick to banging on about government spending generally. Because the flaw in Labour’s economic stewardship wasn’t government spending, it was a failure to deal with the banks and their predilection for reckless “growth” and speculation. This culture in the financial sector, aided and abetted by cheap money and complacent regulation, and by the bonus model, has caused the problems we now have. When criticising Labour for this - as they should be criticised - it helps if one isn’t of the Right (certainly not a Conservative) since enthusiasm for the City was then, and still is, more prevalent in those quarters than in any other. What’s important now, regardless of the politics, is to address this issue. To say that we’re so reliant on the tax-take from a sector which is too large, creates virtually no real net wealth, and pays itself a fortune for (not) doing so, so reliant on this that we can’t act, is rather abject.

What is making my blood absolutely boil at the moment is this drip drip of politically motivated and unhelpful criticism (with the sneering hypocrites Labour standing in the wings egging them all on) every single day about something or other.

This Coalition is just not being given a chance. It is less than a year old and already every single minute decision it makes is being criticised. It would be different if we were into the 4th or 5th year - then some judgement can be made. But right now, it is simply too soon to say.

There may be one or two serious issues - Andy Coulson showed poor judgement no question - but the rest is just down to one person's point of view vs another (Tuition Fees - I'm not convinced most people are as bothered as Labour say but internal division allowed the Coalition to be painted as a combination of dithering and uncaring).

This CBI criticism is just one small part of it.

It has now become a fact (because Labour's spin machine has made sure of it) that the Government is "cutting too far, too fast". It is one of those trite phrases that sticks in people's minds and true or not, brainwashes those who blow in the wind one way or the other depending on the latest headline they hear.

I really do wish the Coalition would take on these critics much more vigorously instead of just (as it seems at the moment) being buffeted from one crisis to the next.

Osborne and Co - if you are listening this is what I suggest.

(1) You have nailed Labour on the deficit but, like slippery eels, they have shifted the Agenda. You need to do the same. When they talk about "cutting too far, too fast", every single time they need to be reminded that their plan also involves a huge cut. Not as big as the Coalition's but still incredibly large.

You wouldn't think so listening to Labour. You would think that they are planning almost no cuts. Nail them down on this. Point out they also are planning big cuts (remind the public of the figure) and keep demanding they tell us what it is they plan to cut.

In the public's mind due to Labour slippery spin, Labour is not now making any serious cuts and therefore asking them to say what they would cut doesn't have the impact it did a few months ago.Relentlessly focus on this figure that Labour will need to cut by so that Labour's hypocrisy can keep being exposed

(2) Talking about Labour's repsonsibility for the debt has got you this far but it will get you no further. The public want answers as to why we need to cut at the rate you are planning.

The answer to this is to focus on the extra cost of this debt in interest. Listening to Labour (and fixed in the public's minds due to their spin), you would think that this debt cab quite happily sit there for several more years without any real problem. If you put it like this (and this is how Labour are putting it), in the public's mind, you would question why we can't just leave the debt a few more years.

They need to be reminded of the consequence of not paying this debt. We pay enormous interest. As well as the ever present risk of debtors refusing to lend us credit, a more serious point is the extra amount of money we pay in debt interest the longer the debt builds up.

Calculate the additional amount of debt interest that the public will have to pay under Labour's plans but will not have to under the Coalition's plans. Then remind the public about it - and remind them and remind them and remind them. So Labour cannot get away with this "it would do no harm to leave it" myth. And also remind them that not one penny of this money goes towards improved services - hospitals, schools, Police etc - it is simply wasted on paying back the additional debt that under Labour plans we would all be paying.

This is the kind of approach Osborne and Cable need to adopt to nail this slippery Labour eel. If they don't, the Labour myths will become embedded and the Coalition's support will drop even further.

My fear is that we are going to see a Labour Government get back in sooner rather than later which would not only be unjust as they caused most of the problems in the first place but also will be disastrous for our long-term financial stability.

The whole HMG needs structural reform and not cut just for cutting although the % are write, Defence and police should not have been cut so badly, but the police should get out other castle and police that would cut crime etc.

It is policy areas such as the family courts that need address and their costs and impacts.

Removal of all migration labour until unemployement on all measure is below 0.5% and that would get things moving , also it would mean business cannot be run on any more sloave labour. Why the unions do not point this out is a suprise really

"Fubar, this point is only valid if you assume that companies are preferring immigrant over UK workers because they are cheaper. It is also possible - in fact, it's often true - that the overseas workers are better qualified. And sadly, given a straight choice between a worker from central or eastern Europe and one from the UK, with similar qualifications, employers opt for the immigrant because of a superior work ethic. You're probably thinking fruit pickers and the like, but that's only a small percentage of the overseas workforce in this country."

Believe you me pd, I'm thinking a lot broader here than just fruitpickers. And, I'm not just talking those who have come to the UK on Tier1 visas, who end up flipping burgers, denying the Labour produced dumbed down street trash even the opportunity to ask "would you like to go large on that?", I'm on about offshoring and outsourcing across international boundaries and the system not being robust enough to stand up to abuse. I'm on about a weak, not fit for purpose immigration policy centered around deliberate expansion of multiculturalism, which was a political decision. You're deliberately saying that compared to a Ukranian, compared to a Nigerian, compared to an Indian, that the British are fundamentally lazier, do not want to get on in life, do not want to achieve and are not interested in social mobility without it being artificially intervenously dripped into them by some bleeding heart Islington left-wing do gooder.

Nice to know you have such a high opinion of your fellow citizens and the working class that your party purports to care so much about. "We need your votes guys, to smash the tories, but hey, let us tell you a little secret... deep down, we hate you really and wouldnt rely on you for the time of day."

"Global competition for jobs is inevitable."

No it isnt. Not at all. It does not have to be inevitable, I absolutely disagree.

"I can't remember who said 'British jobs for British workers' but it was a meaningless soundbite."

Very conveniently forgotten mate. The first person to say it recently was Nick Griffin. The second one was the member for Kirkcaldy & Cowdenbeath. You know, the Unelected Prime Minister none of us wanted.

"The only solution is to improve education and training so we can compete better."

Put that down as a "FAIL" for Blinky, during his term as Education Minister then, shall I?

"Also, a more international mindset might help - as opposed to the constant bleat about how GB would be G again if only it weren't for those nasty Europeans and other foreigners."

I'm not bothered about GB being G again, I'd be quite happy for it to be just B. And, if you'd care to read between the lines, its not the Europeans or the other immigrants that I'm criticising here, its the political system of our own nation and the EU, before you think about turning that "implied fascist" firehose on me, along with bryhers. She's already tried that. I'm sure that the pair of you would be quite happy with a left wing leaning United States Of Europe. Left wing is as left wing does. Its in your DNA.