Phoney deficit wars

If they won't have the honesty to tell us now what is coming, then how can they claim a mandate for those cuts and changes post election....whoever wins? All anyone wants where ever they stand politically or economically is the truth, a choice even. There is none, it seems to me that we have one party in this country with three faces. Does it matter who wins? Where is the differance? Where is the detail? Where is the choice?

This is the sort of debate that you get when a government starts an election six months early - without actually declaring it. Then uses official announcements and events as a campaigning tool. The budget was a disgraceful(nasty, not cunning)stunt.

The tories and liberals will not give hard information until the manifestoes have been printed - doing anything else would give Gordon and Co time to stage one of their silly copying exercises - more gurning over the despatch box.

The prime ministerial debates are a stupid idea. I will not watch them, as they will have no content worth learning, and will be full of vague blather from all sides. The election should have been called in September and the manifestoes should have been published then. There should be a period of complete media silence after the election is called, giving us time to read the manifestoes.

Stephanie a good summarisation of the obfuscation that’s going on regarding the UK’s Financial position. The problem as you well know is politics. If we were early or in the middle of the term of a 5 year Government, the hard decisions would probably have been taken. As it is we have worthy economists taking positions on wait and cut versus cut now.

The Electorate, in general, know we are in trouble, can see what’s happened to Ireland and what’s going to happen to Greece and they are worried. The Politicians know this. Labour are intent on saving their own skin (although Darling has lifted the Labour Kimono and it doesn’t look good) and the Tories don’t want to frighten the horses (just yet).

You say “The politicians won't say how, exactly, they'd get rid of the bulk of the deficit - so instead we're debating the meaning of the word "bulk". Can you imagine how the electorate are treating this debate? Yawn comes to mind. “I’m alright at the moment, the tide has gone out but I don’t see any Bulk Tsunami”.

Structural this, Bulk that, spending review deferred…….. it’s all shadow boxing. We are in Round 13 of a 10 round Boxing Match and the boxers are still sparring while the Boxing Arena is in flames.

We know we have to cut and (unfortunately) savagely. In my local area talk is of the local A&E shutting down. Nobody wants it because of the hastle of travelling a further 4 miles to the next nearest. But something’s got to give.

I am afraid our politicians have let us down because politics is overriding the National Interest. The more we delay the worse the pain. As one of your bloggers said yesterday it’s like an obese individual wanting more cake before he goes for a stomach reducing operation. We should be in theatre now having a stomach band fitted!

'That includes the £173bn that is spent on benefits, tax credits and public sector pensions: the Child Trust Fund, Child Benefit and child tax credits, free bus passes for pensioners - the lot.'

I know that it is only a small amount but why on earth does it cost anything at all to provide free bus passes to pensioners ?

If I want to run a bus service then I have to have a licence, it should be a condition of that licence that I take old people for free.

If I don't want to take old people for free then I should not apply for a licence.
(private bus companies don't run busses out of the goodness of their heart, they do it for profit)

The Child Trust Fund can go as well, my three children have one each, it appears to be a vehicle to employ fund managers as I can't see any other use for it (although it is one of Gordons babies so it would only be axed under the Tories)

Ms Flanders wrote:
'To repeat: these are the phoney debates we're reduced to, when politicians have decided the real ones are too tough'

Too tough presumably equates to vote losers.

Which in essence means whoever gets voted in will do so on a liars ticket.

Which in turn may lead to those having been lied to, being somewhat disgruntled.

Which in turn may lead to...........?

on the question of who do you trust to cut the deficit

surely not the party that has overspent by £160 billion over the last 8 years.

on the question of who do you trust to run services more efficiently

surely not the party that has presided over falling productivity in public services over the last 10 years together with unprecedented levels of waste.

Politicians talking about budgets and cuts are always phoney.

Lets talk about what they mean by the "sructural" deficit - they ignore everything spent on "investment" and so spend half their time trying to charcterise some spending as "investment". That is a bit like me not counting the mortgage repayments on my house within my monthly budget, it makes the figures look better but does not reduces the amount of cash leaving my bank account every month.

Then there is the politician's definition of "cut" - does not mean reducing the amount you spend merely spending less than the plan from last year said you would be spending in 3 years time. Politicians can then say they have cut expenditure when they have in fact increased it.

Then finally (the Labour trick) when all else fails do not talk about the amount of money being spent but discuss percentages of GDP because you can then fiddle the figures by putting in generous estimates of GDP growth so that the percentage of public spending (of GDP) comes down without actually having to make hard choices.

The simple facts are that public spending had got out of control before the credit crunch. I would estimate that public spending was probably around 20% too high. The idea that we can cut 20% off public expenditure without impacting on services is silly which means there needs to be a complete re-appraisal of what govt should be doing and more importantly what it should not be involved in. I suspect there is a lot of things govt spends money on that could be eliminated without 99% of the population even noticing.

What we have are the political parties arguing about whether the cuts should be 1.4% (in real, ie inflation adjusted) terms, 1% or 2%. Pathetic. In the real world, the private sector, a 1% cut in costs is an accounting rounding error not a proper cost cutting exercise. In the private sector they talk about cutting 10%+ off costs not 1%

'My point is just that big savings are possible, and they can happen in ways that have relatively little impact on all of us who use these services'

Of course they can, but clearly not while this government is in charge. The 10 O'clock news last night interviewed someone who pointed out that productivity had been falling in the NHS over the last 10 years.

Labour has spent the last 10 years proving beyond any reasonable doubt they are incapable of running public services effectively. What on earth would make anyone think they are about to start now ?

'Evan Davis had a ludicrous exchange with George Osborne yesterday'

Not as ludicrous as 'the Great Leader'. What happened to 'Labour investment v Tory cuts'? What happened to 'David Cameron Mr 10%' ? How many attempts did it take to get Gordon Brown to even mention the word 'cut' ?

On your central point I agree with you Stephanie. Our politicians are failing us in that in what is effectively already an election campaign we are not being given anything like the facts.
When the Budget was approaching I saw some innovatory suggestions on the notayesmanseconomics web blog which had plans for raising long-term economic growth, public spending cuts and tax rises from 2011. In effect a balanced and considered approach and far better than any of our politicians have managed.
On your issue of staff sickness I remember many years ago when I was a child a relative who worked in the Civil Sevice talking of the sickness culture where it was considered an addition to holidays. So this plan to save money in the NHS leaves me very sceptical after all this government has had 13 years to do it!

Stephanie - excellent observation on current political behaviour.

There is another Elephant in the Room that I would like to see you write about.

If Public Sector spending is cut by say £50 billion what about the multiplier effect on spending in the economy, jobs, tax take etc etc.

The spending cuts, however they are generated, must have a knock on effect on the economy - is this priced in and how will it all 'shake out'?

This is my last thought, following yesterday's blohg and now today's:

The king of the obfuscators is Alistair Darling. We have had a serious recession for 2 years, at least. Last November's spending review was the ideal opportunity to grasp the nettle.

Failing that, the Budget was the clear opportunity to lay Labour's spending policies before the electorate. There is no requirement for the Tories to do the same unmtil an election is actually called.

Darling stole the Tories' inheritance tax plans 3 years ago; their cider tax proposal; and their stamp duty proposals. Why then would they lay out their tax and spending p[lans before Darling gives his budget, when the Chancellor should reasonably be expected to give them something to counter.

Instead, the following day, the Chancellor tells us his cuts will be more savage than Maggie - sdo tell us specifically - there is the obfuscation.

I've read all yesterday's posts with interest, never having posted on here before. I stated at the outset that I am not a Tory and consistently stated facts all day yesterday, which were in general rejoindered by hyperbole, attacks on my sanity, idological mumbo jumbo, unsupported pronouncements on the opposition party; blind belief; etc.

Here is the position of the Institute of Fiscal Studies that Stephanie referred to. The most respected and informed UK body on tax and spending. It shows that Darling is living in cloud cuckoo land.

https://www.ft.com/cms/s/0/9737d9d4-3850-11df-8420-00144feabdc0.html

I also yesterday posted exact references to the pile of experts who derided Goirdon Brown for selling our gold reserves and the officials who described his pension tax 'theft' that has left many with reduced or nmo pensions (thereby adding to the State burden) as 'nuts'.

Having read thes, and reviewed widely, I am convinced of the following:

Once an election is called the Conservatives will lay out clearly all their policies, including tax and spending; they will be seen as the party with a grip on reality; Cameron, Hague and Clarke will hammer Brown, Darling and Mandelson and we shall fight a real election, with real choices for the electorate.
As you may see, yesterday's debate has now made up my mind...and I'm angry as well as scared at the possibility of this dishonest (Hoon, et al), deceitful (Brown's lies to the Comons Committee) and deluded (Mandelson on the BBC yesterday glowing about spending coming down....) Government.

Thank you for your patience in reading what I've posted.

'To repeat: these are the phoney debates we're reduced to, when politicians have decided the real ones are too tough.'

But perhaps you should take a look at yourself and the lies and spin you've allowed this government to get away with.

Did you ever criticise Gordon Brown for saying he was being prudent with a purpose all the while he was endulging in the most wreckless spending spree in this country's history ?

Have you ever bothered to point out the impact of this spending spree on the nation's finances ?

Not as far as I've seen. Little wonder then, to quote your colleague Nick Robinson, 'few voters recognise the facts'.

My question to ministers is that if you can conjure up £11bn of "efficiency savings" what have you been doing over all these years. Or is it the case that these savings are simply highlighting what has already been planned. As anyone who has a real job in organisations knows extracting efficiency savings especially through IT is no trivial bean counting exercise.

It would be nice if the policital parties could also address the 8 million people who are available for some sort of work but the large majority of whom are supported by public expenditure.

The unchallenged assumption is cuts in public sector departmental/sector budgets generate a pound for pound reduction in public expenditure but the law of unintended (or is it undeclared) consequences will always apply.

Here is an interesting breakdown of spending and where the tax receipts come from that shows how big our problem is.

09/10 - 'Managed' Expenditure £704 billion.

09/10 - Govt Receipts £541 billion.

Income Tax £146 billion
VAT £78 billion
Corporation Tax £42 bilion
Excise Duties £46 billion
National Insurance £97 billion
Business Rates £25 billion
Other Sources £107 billion.

The interest on our deficit will be increasing too.

So for example if income tax was doubled to 40% and 80% this would not be enough to remove the deficit (ignoring all the knock on effects of reduced spending across the other taxes).

The reason the politicians won't talk about it is because any possible solutions are unvotable for!

Stephanie

Thanks and bang on with a your blog. Entirely agree:

Labour know very well that the truth about what they will have to do if re-elected will lead to slaughter at the General Election. They have twisted and spun and then simply glossed over the real issues. Until yesterday, no one in the press (especially the BBC in my view, absent some excellent blogs from you recently) has dared to hold Labour to account for this.

Equally, Labour's deceit does make life very difficult for the Tories: they announced a whole series of measures during their autumn conference last year (people seem to have forgotten these; at least they represented a start) and have promised to lay out further details before the General Election. However, doing that is very difficult when the Labour Government itself daren't tell us the figures.

I would call this far more 'ludicrous' than George Osborne's inability to be clear: if Labour who are in power can't produce any numbers supported as they are by the thousands of civil servants in the Treasury, why should anyone expect the Tories to, when they have far less information and support?

The Tories are naturally and rightly wary of announcing a series of potential cuts, only for Labour to hammer these as being worse than theirs. With no Labour numbers for comparison, it will be impossible for anyone to know the truth. Which is exactly how Labour want it. Their whole strategy is to damn the Tories as being worse, whilst not telling anyone what they would do themselves. You'd think they were the Opposition not the Government.

That's why I find Labour's whole attitude deceitful and sickening: they created this mess. We had 16+ years of fabulous growth; how can it be that after an 12 month recession, the national finances are in total meltdown?

Labour are playing politically a very clever game; and they are avoiding being held to account both for their past failures and the present deceit very skillfully. It will be touch and go as to whether they get away it.

I do also hope that the BBC's political editor reads your blog.

Here's the dilemma:
The Tories have always claimed that there need to be considerable cuts in public expenditure resulting in the fall in their poll ratings. Labour have always suggested they were not making cuts and if they were they would wait to do so and their ratings have improved.
The fact is the public dont want to hear the truth and Labour's strategy of hiding the cuts has borne fruit.
So the public are to blame for the lack of debate about serious matters because the public dont like to hear that there are going to be cuts.
Hopefully, after the budget we are going to wise up and realise that Labour are going to cut just like the Tories and the real issue can be considered..... can the nation re-elect a party which has made such an unequivocal mess of the economy? Of course the Tories may have made the same mistakes, but they were not in power and so we will never know. The real tragedy is that as a nation we all made huge sacrifices to put the economy right under the last Tory administration, all for nothing thanks to Labour.
Labour inherited a very strong economy and have ruined it. There cannot be any doubt that the size of public expenditure cannot be sustained, as every time there is a recession the nation's debt will have to grow to maintain services that are unaffordable.
Bring on the election, bring on a change of government and let's hope this time when the Tories have sorted the mess out, that Labour will not ruin things again.

With apologies to an ancient author:
"To cut, or not to cut, — that is the question: —
Whether 'tis nobler in the mind to suffer
The slings and arrows of the outraged jobless,
Or hold spending against a sea of debts,
And by growing end them?"

"Thus elections makes cowards of them all;
And thus the rhetoric of resolution
Is sicklied o'er with exaggeration of false promises;
And speeches of great pith and moment,
With this regard, their momentum turns away,
And lose the outcome of election".

I think there is a deeper problem in relation to the public finances and that is that there is an ever growng demand for public services but an alarming unwillingness to pay for them in the form of taxes or charges. Labour has increased enormously the spending on the NHS and education (each to more than double the 97 level) and many other spending depts have seen big increases (plus 2 wars etc)but tax revenues have not kept up (with most extra coming by stealth rather than an honest statement that if you want this much more spent on the NHS it is going to mean 5p or whatever on the standard tax rate). Almost every night on news bulletins we see some expert/spokesman saying more public resources should be devoted to XYZ, local news bulletins demand almost nightly that money be spent onroads/flood defences/expensive cancer drugs/care of the elderly etc ad infinitum, none of these bulletins ever says what should be scrapped/who deprived of resources to pay for this, there is a presumption that more can be found. As someone just on the point of joining the elderly population, I am staggered by the constant new demands to the State coming from the elderly population.
I think I blame first most of us, who at least implicitly want to free ride (assume someone else will pay),second the politicians who don't honestly present us with the bill for what we want (we need to have costed options presented on a regular basis), and finally the media who convey our demands for service in often emotive ways , but don't ever ask us to consider what we will give up to have this new demand met.

The honest debate needs to be around the level of payments the state makes to individuals, whether that is welfare or salaries. Fundamentally we cannot expect the level of savings demanded by the defict to come from stripping away expenditure a narrow range of departments. Until this open and honest debate gets underway the British people are being hoodwinked by every party.

Ireland's politicians have been far more courageous both in raising taxes and cutting expenditure. We genuinely are all in this together and everyone will suffer but this is the price to pay for a decade of tax spending fueled by debt, the taxes have no evaporated and we need to repay the debt both personal and government. However no-one will starve and we will get through it.

If only the politicians aspiring to run this country could tell it how it is.

This is all just electioneering. Who cuts what and by how much is really irrelevant. The UK's economic problems are only a part of the wider global problems. These problems are structural.

The international financial system is broken. The dynamic babalnce between governments, workers, consumers and financiers is effectively dead. The true economic consequence of globalisation are now open for inspection. The comodity markets are a mere casino.

So whoever wins the election, they can run around with their bloody cutting knives, hurting a lot of people and achieveing precisely nothing.

Politicians lie, obfuscate and dither because large swathes of the electorate are too stupid and delusional to accept the truth. They will not vote for austerity and cuts because they dont believe its really necessary, and thats down to the dumbing down of large sections of the electorate combined with bare faced lies by our serving politicians.

"Sharing the proceeds fo growth"
"Abolition of Boom and Bust"
"Balancing the books over the economic cycle"
"Investments versus Cuts"
"Ringfencing XYZ"

Its all designed to mollycoddle the dumb electorate, and I for one am sick of it.

We will not get the truth as the truth will not win you an election, plain and simple. That fact is OUR fault, the stupid electorate too blind to see the writing's on the wall.

I am not convinced Labour have a plan, or are even capable of a deficit reduction. Their governance has put us here in the first place. So if they suddenly start implementing cost savings, one would have to ask, why on earth couldn't they have governed with these costs savings from the outset! Trouble is, I'm not convinced the other lot have much of a clue either - in any event Labour needs to be removed before they do any further damage.

We all know that a massive reduction in government spending is necessary. Now the budget is over, Darling is admitting it. But of course he does not stand any chance of being Chancellor after the election.

If Brown gets back in, we will be given more smoke and mirrors. Marvellous headline savings and cuts will be pulled out of hats, services will appear to be preserved (by magic or good fortune), and some services may be enhanced for "fairness" reasons. Thus he would continue to govern by stealth, the deficit reduction targets would appear to be achieved because some clever accounting techniques will be introduced.

If Cameron wins, I hope he will recognise that we (the electorate) are worried by the enormous debt, are demanding austerity measures, and have been angered by the deception tactics of Brown. We want things to presented in a way that we can understand and believe. We want things simplified! Give us faith in our leader and we will pull together to make Britain great again!

What we need is a coalition (hung) government after the election which should then cut ALL departments budgets to reduce the deficit to zero in 3 years. No one will like it so after 3 years we can have another election to see what happens next.

The govt intends about two-thirds of the tightening between 2010-11 and 2014-15 to be achieved by spending cuts and about one third through tax increases. The biggest losers are estimated to be individuals with incomes over £100,000 a year.

Personally, I think provided frontline health and schools are protected, then I can't see many reasons to cry for the bankers, millionaires (including those on the Shadow frontbench?) and ex doms who will all face the highest tax hykes.

Sounds like a price worth paying to sort out the mess caused by the failure of the private banking system...

Talking of banks, anyone think of a good reason for selling off cheap our public stake in the rescued banks to rich friends? I thought not. Now who came up with that plan and where did it get buried?

Two Points. Firstly no-one is discussing how the next government might use inflation to help ease the problem to the detriment of all those with fixed capital and income. Second surely one way to save money but protect public services is to ensure everyone in public service actually does something to provide the service ie empties the refuse bin, operates to save a life, patrols the streets to prevent crime. Get rid of the armies of people who record and monitor what those on the frontline are doing.

As i said on an earlier blog post you are showing yourself up by letting the IFS do your job for you and then you start being wise after the event. Your initial reporting of the budget on the news was completely misleading as a result. And no mention of the worse than Thatcher cute that are on the way even if Labour win. This simply will not do. State sponsored drivel i am afraid.

The government have the figures, the opposition do not. The Conservatives have asked for the figures and have been refused.

Labour have a habit of stealing policies so it is hardly surprising that the Conservatives are keeping theirs quiet. However, they should say so very clearly:

"We will define our policies after an election is announced and/or when we have the official figures".

And meantime keep banging the drum about the fact that the government will not release those figures which must be due to the fact that they are a clear indictment of their economic record.

The elected government, business representatives in reality, have been asked to govern and as business representatives do not know how to govern. Tax the banks 8 billion, problem solved. When the public is confronted with the final outcomes, and the clock is ticking so at some point they actually have to do something to address the matter, the political landscape will change in dramatic ways. The powers that be wish to maintain the status quo and that simply will not work. Change will come because they are unwilling to change. UK today = Japan of the 90's.

There is another argument to be had - protecting front line services in the face of cuts.

What constitutes a front line service?

At the weekend, in front of a studio audience, the Prime Minister was unable to give guidance - indeed he claimed it was a decision to be taken at a local level.

Asked about psychology being a front line service the PM was only able to say it was a very important service, but would not confirm that it would have its funding protected.

If the Government claims that the decision on what constitutes a "front line service" should be taken at a local level, they cannot claim that the front line services will be protected by their cuts in the budget - they do not control the definition, or what is spent in those areas - the only way they can come close to making the claim is to guarantee the total budget will be ring fenced - and so no cuts.

But the entire budget is not ring fenced if efficiency savings are to be made that will reduce the deficit as claimed.

How will the efficiency saving of £550 million on health be put through - will the NHS just get £550 million less, then told it is a saving from reduced absenteeism, but that local trusts must decide how that is achieved, and where the money comes from instead if it is not?

Or will they still get the same amount of money - less any saving that they make through reduced absenteeism?

If the latter, what incentive does a Trust have in spending time and money in trying to reduce the absenteeism, any more than they will have been doing in the past?

If the former, then front line services (however they are defined) will be at risk if the efficiency is not achieved.

So both claiming the saving (as a cut), and also claiming that front line services will be protected are a sham.

My personal view is that Labour will be unable to make the cuts that are needed. They are really taking the Mr Micawber view.

That is why they keep referring to the hope that unemployment will not be as high as is forecast.

They have forecast debt levels based, in part, on an assumed level of unemployment - yet hope the deficit will be lower because unemployment is not so high. This has happened to a degree - but why?

They can keep unemployment down by moving the unemployed into Public Sector jobs, as they have been doing over the last 2 years. That is sustainable only while you are able to get away with an increasing deficit (as Labour have been over that period). But what happens when you are forced to reduce the deficit, and forced to make cuts in the number employed in Public Services?

Then the unemployment will go up. The hoped for Micawber view will not materialise. Labour will be forced to take even tougher action, due to their initial delays.

#19 & #20 - spot on!

No one seems to be commenting on the fact that cuts are as much a political issue as an economic one, By political, I don't mean the trivial arguments going on between the parties about the odd billion here or there, or what constitutes the 'bulk' of the structural deficit. I mean that the Conservatives should be arguing for the cuts they would make even if the budget were balanced - the cuts that accord with their political ideology. They believe government has become too big, and should get smaller; that the government interferes in too many areas of life, from which they believe it should remove itself. Why aren't they arguing before a mass audience for a cull of the quangos. Why aren't they arguing for the complete elimination, rather than reduction, of various government programmes. It seems these arguments are only ever made in small circulation magazines.

#21 foredeck

The global financial system is broken because it was not properly regulated and that happened on this government's watch.

When you run the world's major financial centre (the City of London) you cannot claim with any credibility that this crisis just happened to you - it was their job to manage the economy and it's part in the global financial system... and they have failed miserably.

They proved that they were novices then and are still novices now.

"23. At 12:07pm on 26 Mar 2010, Clinterous wrote:
I am not convinced Labour have a plan, or are even capable of a deficit reduction. Their governance has put us here in the first place. So if they suddenly start implementing cost savings, one would have to ask, why on earth couldn't they have governed with these costs savings from the outset! Trouble is, I'm not convinced the other lot have much of a clue either - in any event Labour needs to be removed before they do any further damage."

So you want to remove one lot who don't know what they're doing and replace them with another lot who don't know what they're doing and this will prevent any further damage..... some times I think 'democracy' isn't such a good idea.




Regarding the NHS sick days, although there is some abuse by some staff members the reasons NHS staff take more time off should be blatantly obvious. Firstly they come into contact with lots of sick people so are exposed to more illness. Secondly because their patients are ill they are sent home rather than infect the sick. I briefly worked in a maternity unit and was grabbed by a staff nurse and ejected because I had a minor case of conjunctivitis. I was forced to stay home for 5 days rather than infect any of the babies. If you seriously immuno-compromised people (like HIV patients, cancer patients on chemo, those on immuno-suppresive drugs for organ transplant) you don't want some nurse with a cold sneezing around the ward. Generally we DON'T approve of hospital acquired infections.

"If I want to run a bus service then I have to have a licence, it should be a condition of that licence that I take old people for free.

If I don't want to take old people for free then I should not apply for a licence.
(private bus companies don't run busses out of the goodness of their heart, they do it for profit)"

If you do it that way around, it still costs the governement pretty much the same amount of money (just hidden from the accounts) as the bids for the licenses are lower, but it makes it harder to get companies to run routes where lots of pensioners live - by doing it this way around the incentives ensure there is a financial reason for the routes to go to those sorts of areas more regularly.

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

Does anyone really think that the result of the election matters in the grand scheme of things? There is a strong consensus among the political class on broad economic policy (independence of the Bank of England; differences on public spending that are within rounding error); the differences between them are only about who wins and who loses as a result of particular tax and spending decisions.
All the decisions that really matter in the long run (pension policy, environmental policy) are well beyond the decision-makers' five-year electoral cycle. No wonder this results in 'ludicrous exchanges', full of sound and fury.
I shall offer my four point plan for dealing with the deficit:
1. Abolish every target in the public sector. As has been well documented, management-by-target results in behaviour intended to meet the targets and not the needs of service users. How much resource is wasted in setting and monitoring counter-productive targets?
2. Policy decisions should be driven by ease of admininstration. Take tax credits as an example: great in theory but a nightmare - and therefore expensive - to administer.
3. Raise the normal retirement age to 70. We are on average living longer; we should expect to be economically active for longer and not be funded by the public purse for twenty years of retirement.
4. Stop worrying about it. Who lends the government all this money? We do, through our pension schemes and insurance policies - all hungry to buy long-dated gilts to earn the interest to provide our future income. And it is only money after all.

#11
"The spending cuts, however they are generated, must have a knock on effect on the economy - is this priced in and how will it all 'shake out'? "

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This really is the billion dollar question.

No one, no one sensible, denies the urgent need for deficit reduction.

How to do it without killing the patient. A skilled fiscal surgeon or a back street butcher.

(kevinB, are you still talking to yourself on the other board. Keep up :) )

I'll sum this post up in a sentence, in case anyone gets down this far without having actually read it properly:

"The current crop of politicians are completely inept and would lie bare-facedly to their own grannies if it meant they could get re-elected."

One observation is that the "bulk" of jobsagoodin's comments are little more than Tory propaganda pandering to cAshcroft and his Saatchi seeking cronies. Then again, no balance and no substance are you Osborne in disguise?

If the Tories get in then we can look forward to more asset stripping and higher charges and poorer service from privatised organisations.

Here's a suggestion: remove all spending and revenue raising powers & the running of primary services from elected politicians. Depoliticise the management of this country, hand it to a non-cyclical body and thus allow for long term, HONEST and consistent planning that grasps and addresses thorny issues without having to worry about 5-yearly elections which encourages wild lurches from one spectrum to another via costly assembly & disassembly of 'initiatives' as control passes from set of short-term manipulators to the next.

How can a management of a country requiring intelligent 5, 10, 25 & 50 year spending & revenue decisions ever be handled on a partisan, sub-5 year cyclical basis ?

#6
"surely not the party that has overspent by £160 billion over the last 8 years"

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They built the 'spend machine', let them tame it.

Stranger things have happenned.

#31
"Asked about psychology being a front line service the PM was only able to say it was a very important service, but would not confirm that it would have its funding protected. "

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

You did not report his answer. (I saw the same programme).

He said the scope and direction of the cuts will be down to management; up to them how they utilise a smaller pot.

Sensible answer from the PM.

It's comedy time again! It doesn't matter who wins but it will be fun watching them play pass the parcel at a faster and faster rate to ensure that they are not caught in possession when the time bell rings!

Chris911t. Now you can't be serious. The Tories would never pinch an election startegy from Labour - or would they?

Strategically though it is interesting to watch their maneuverings. Given the opportunity that is available, the Tories seem hell bound on loseing this election. Funny thing is they, like a lot of posters on here, don't appear to even know why!

Labour have to thank the Tories for helping them out. The closure of the opinion polls when the party itself is busily shooting itself in the foot is quite amazing. 3 months ago they didn't have a cat's chance in hell and now they could just pull it off!

The Lib-Dems have to play their cards very carefully but they can be both king-makers and achieve their lifelong dream of PR in one fell swoop.

It will be fun. It will also be totally irrelevant as the next wave in the on-going financial crisis/saga will sweep all of their plans away.

Am I alone in liking government spending? Why would anyone want a valuable and vital service (e.g. health care, postal services) be provided by a profit-making privately owned enterprise. That way, I not only pay for the service, but also the profits passing to shareholders who have no reason to gain from the activity. Does anyone really believe that private for profit organisations are more efficient with their spending on company cars, prestige offices, frequent rebranding, advertising, BUPA etc? In the public sector, many if not most people work very hard out of a sense of duty, there are no profits diveted elsewhere so services can/ should be provided at cost. If there are failings of management they should be dealt with, but let us not delude ourselves that the private sector delivers better value for money- it is a complete myth.
So rather than looking at cutting government spending, let's make sure that those who grow rich either from working in, or owning, the private sector contribute to the cost of public services in full measure.

35. At 1:09pm on 26 Mar 2010, Peter_Sym wrote:

Regarding the NHS sick days, although there is some abuse by some staff members the reasons NHS staff take more time off should be blatantly obvious. Firstly they come into contact with lots of sick people so are exposed to more illness. Secondly because their patients are ill they are sent home rather than infect the sick. I briefly worked in a maternity unit and was grabbed by a staff nurse and ejected because I had a minor case of conjunctivitis. I was forced to stay home for 5 days rather than infect any of the babies. If you seriously immuno-compromised people (like HIV patients, cancer patients on chemo, those on immuno-suppresive drugs for organ transplant) you don't want some nurse with a cold sneezing around the ward. Generally we DON'T approve of hospital acquired infections.

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



You had better tell Alastair he can't have his £550 million back then.

Make him an offer

Peter_Sym wrote:
"..."

Sorry Peter, it doesn't matter what you say.

There is a determination to make the public sector workers pay the price for the **** up the private sector finance industry made.

It would do no harm to retrace history.

Last year the PM characterised the choice on the economy as between Labour investment and Tory cuts (10% etc.)

Now the Labour position is that cuts in spending will be needed that go well beyond those experienced in the 1980s but - compared to the Tories -Labour cuts will be 'nice' cuts. As Labour will not discuss these cuts ahead of a spending review let's stop talking about it.

We have enough information on which to base our votes on 6 May.

#8
Productivity is a very contentious issue when it comes to saving lives I guess and can be argued logically from whatever political perspective. However, I suppose it would be fair to say that the idea of throwing money at a problem to make it go away has once and for all been consigned to the rubbish bin. Which kind of makes you wonder what a government can actually do when the call goes up for "something must be done"?
Re: phoney war, Labour hiding behind an inability to do anything until the recovery is set, Tories hiding behind we want to act earlier, but can't commit until we have seen the books. Not easy to argue with either. However, the Tories seem to have fallen upon a good idea which is some sort of independent auditor whose job it would be to keep a tally on the liability side of the equation as opposed to the opaque view that we have at the moment with unfunded public and state pensions and of course the PFI's. If we had one now, we could see what the scale of the problem was and as such demand an action plan from each party thus having a real choice as opposed to the phoney one that we have at the moment. I do however wonder if this is one of those ideas that seem great when you are in opposition, but a pain in the butt when you are in power (a bit like PR)and so perhaps may never see the light of day. Shame if that is the case.

31. At 12:55pm on 26 Mar 2010, Eddie wrote:
There is another argument to be had - protecting front line services in the face of cuts.

hat constitutes a front line service?

At the weekend, in front of a studio audience, the Prime Minister was unable to give guidance - indeed he claimed it was a decision to be taken at a local level.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

I agree, a complete abdication of responsibility, a tactic that simply will not work!

I work for a homeless charity and most of our funding comes from the LA. We've already been through cuts and are pretty efficient, helping over 200 homeless families and single people at any one time, (about 500 over a year), saving the LA a fortune in temporary accommodation costs. Comparable LA services didn't even have scheme budgets until recently but I'd guess that we are much more efficient as we earn much less, have less sickness, do not have gold plated pensions etc.

I used to work for the LA but got out after a short time because I couldn't stomach the politics or the waste having worked for charities for years before. Demand for our services is always high and increasing, yet the priority of senior LA managers will be protecting their own empires at the charity/voulentry sectors expense; particulary non front line jobs in admin and middle managers.The bigger their teams/department budget the more they get paid. This rewards poor performance and overspending.

I expect we will truly have to become the "voulentry sector" if we want to continue delivering services. Not sure I'll be putting in my regular 50 hours + per week for no pay though, I only get paid for 37 of them as it is.

The source of the deficit is Banking. Banking is a global industry failed and was rescued by taxpayers. The

"three phoney debates about the future of Britain's public finances are distracting from the lack of serious ones"

and those serious ones are about how banking will restructure itself to return the capital extracted from the rest of the economy in that rescue.

Where will the Banks be cutting spending?

It cannot be in employment - that would simply transfer employees to the Unemployment Register where the taxpayer will be expected to subsidise the Banks through payouts on National Insurance payments and retraining so that they do not become long term unemployed.

It cannot be in industrial and business investments outside of banking - the rest of the economy can only really afford Banking if they serve a genuinely productive purpose. This was, in part, a source of their failures.

It cannot be in infrastructure or daily operations - which economists tell us is more efficient than anything the Public Sector can provide.

Where will the Banking Industry have to find cuts? Profits are the only reasonable place. Which suggests that the next government is going to have to raise Corporate Taxation - not the income tax that individuals pay: individuals have already subsidised the banks enough, thanks.

That is the source of the phony debates: public relations and spin on behalf of banks whose shareholders and boards are still enjoying the same unsupportable business activities that led to the rescue in the first place. The rescue package was put in place, now it is time for the Public Sector to start demanding serious, sustained and structural reforms.

It is exactly what the Banks demand of their debtors.

Stephanie, can you please refrain from Americanisms? You said "math" instead of "maths" and I note that the BBC now refers to "airplane" instead of "aeroplane". You are the British Broadcasting Corp. When you revert back to using the Queens English I will comment on your topics.

BTW, everybody knows there is an elephant in the room but nobody is going to acknowledge that fact until after the election. How big it is and how you tame it appears of no concern to the public as for now it's just grazing. But when it charges, and it will, unless someone takes control of it, there will be hell to pay. When someone in politics acknowledges this simple fact, I'll vote for them.

Why are BBC political blogs like this one still open for posting comments when Brian Taylor's blog in Scotland has been closed down? We demand an explanation.

Is this another Union dividend? Has Labour interfered to stop the blog?

#46
"but let us not delude ourselves that the private sector delivers better value for money- it is a complete myth"

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

Spot on.

Great post.

I am very suspicious of efficiency savings - just look at your Council tax bills! My bill says that the Police Authority plans to make £14.8 million of savings (sounds great doesn't it) but then is asking for a 4.8% increase in the budget. Can you imagine going into a board room and saying 'Great news I have identified £14.8 million of savings but I need a 5% increase in my budget'. Please, somebody explain to me just how that works

Just a quick question. When we're talking about efficiency saving through reduced "sickness absences", how does the money acutally get saved. If peop, turn up to work instead of going sick they still get paid don't they?

Ok, so more work gets done, which is a good thing, but money is not saved.

Unless of course, other people are then laid off because they are no longer needed to do the work. That would save money alright- but then, would that be an efficiency saving, or a cut?

#52
"The source of the deficit is Banking. Banking is a global industry failed and was rescued by taxpayers"

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

Correct. The prime cause of the 'mess' we are in is the banking sector.

The establishment (i.e. All major political parties, the banking class, and the media) want us to conveniently forget.

We won't.

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

I think nobody can now contest that bringing down the deficit will require spending cuts AND tax rises
In a way I am glad that Liam Bryne has finally admitted this although the strategy cannot ever be two fold though, it is just a question when it should be employed?
Cameron seems to be waiting at the front of the queue for the starters gun by saying the Tories would deliver a lower deficit much faster than Labour would, while simultaneously pledging to “ease the tax burden” via tax cuts for the corporate sector. (No employers NI increase, cut in corp Tax*, etc etc).

This all sounds very nice but I would like to see more detail on this "secret plan" that will allow him to painlessly reduce the deficit more quickly than Labour while also protecting spending on the NHS and reducing corporate taxes

All parties need to give more detail about how we deliver economic growth as well

Surely a good sustainable budget is one that is based upon the revenue generated by taxation. At what point in history did governments decide that a budget should have a defecit?
We need to become more self sufficient as a nation instead of relying upon debt and servicing of that debt to survive. From individuals to companies to government.
It's not rocket science, we just need a government capable of investing resources in our country to provide a sustainable, self-sufficient future that doesn't rely on resources from other countries.
We need to invest in farming, engineering, energy (solar, wind, bio, and tidal) for example. Lets be a bit industrious and do something for ourselves as a nation instead of relying upon credit and imports. A new industrial revolution.
Increase in farming = less imported food & more money staying in UK economy.
Increase in engineering projects to manufacture something of value to create jobs (electric cars for example) that can be consumed by UK citizens to keep money in the UK economy.
Increase in sustainable energy products to reduce our reliance upon foreign oil & gas & revive the construction industry providing new jobs.
Lets gradually sell off bank shares owned by "UK Plc" and use the proceeds to invest in these industries. Use the money and taxation generated from these intitatives to subsidise these industries & get people employed again thus reducing the defecit and eventually start repaying the national debt.

In a double dip scenario government will be forced to bring its deficits down to the 3% to 4% mark pretty rapidly. This should be easily doable.

1. Stop paying public sector pensions until the recipient is 75 years old
2. Stop the NHS from wasting vast sums of money on expensive operations for the over 75's
3. Make working adults pay for basic healthcare like dentistry, physiotherapy etc
4. Cut ALL welfare payments by 20%
5. Send benefit cheats and health tourists to jail for 100 days if they attempt to abuse our generosity
6. Renationalise BP and let it have ALL of the British hydro-carbon deposits in Falklands, Iraq and (soon to be) Afghanistan
7. Impose punitive green taxes on hydro carbon wasters

Who wants to bet against at least 4 of these points being realised within 5 years??

The size of any cuts depends on the rate of growth coming out of the recession. The Chancellor has been criticised for a growth estimate that is too optimistic. However, the Bank of England's mean forecast is entirely consistent with the Treasury forecast and looks entirely achievable under the current package of policy measures. Prior to the release of the ONS 1st quarter restatement and based by earlier GDP estimates out of the European economies it did appear that the UK was the last of the major economies to emerge from recession. The US has received stimulus packages larger in scale and scope than the UK and it is not surprising that it is recovering quickly. However, across Europe the latest figures show a different story with the UK performing well against its peers. My forecast, is that the UK economy will show 3.5% GDP growth (real), 5.2% (nominal)by the final quarter 2010, that unemployment will have fallen by 150000 using the claimant count. Net borrowing obviously depends on the pickup in tax receipts but will show a further fall of between 16 and 20bn.

Turning to debt issuance and the prospect of a UK downrating. On average UK debt has a term to maturity of about 14 years. This compares with the US at 6 years and many European countries with less. This is entirely fortuitous but the level of UK exposure to default risk is currently very low. It maybe in some party's interest to create a ratings scare but in practice the prospects of a down rating from AAA is very unlikely in the short to medium term.

My take on the budget is that the Chancellor has played the economy with a flat bat because at this stage, do nothing of significance is the best strategy as the credit shock dissipates and the economy rebounds from what was a 6% cut in real GDP in 2008. I believe that premature cuts in the government's share of the economy would not result in an immediate transfer of activity to the private sector and the risk of growth foundering are very high.

No government has had to deal with a largely externally generated shock of this magnitude outside of war. Whatever one's view of the longer term performance of the economy since 1997, they have performed very well in dealing with this crisis and its aftermath.

46. At 2:16pm on 26 Mar 2010, Friedrich Engles wrote:
Am I alone in liking government spending? Why would anyone want a valuable and vital service (e.g. health care, postal services) be provided by a profit-making privately owned enterprise.

XXXXXXXXXXXXXXXXXXXXXXXX

You are right but miss out an alternative which is more efficient than either. See my post 51 re the LA

IMHO the most viable/efficient alternative to deliver many services (not all and not the ones you mention)... is the not for profit voulentry/charity sector. Any savings are either handed back to the funders (in hard times) or reinvested into meeting the needs of the community. Our staff are committed as the pay isn't very good and we have never been privy to the bonus culture or expected the taxpayer to pick up the tab for unafordable pensions. Most organisation are NOT the "woolly pully brigade" any more, delivering vital statutory services and are subject to EU competive procurement rules, competing with the private sector and LA to win contracts....and because of all the above we generally do win!

In short we are used to doing an awful lot for very little in comparison to either the private or public sector...although in my experience many public sector workers also work very hard (but quite a lot don't and get away with it!).

#60 Modest_mark,

"This all sounds very nice but I would like to see more detail on this "secret plan" that will allow him to painlessly reduce the deficit more quickly than Labour while also protecting spending on the NHS and reducing corporate taxes"


Sorry mark but you are just going to have to wait, and wait and wait and wait and..... Perhaps the real truth is that he just doesn't have one!!

Please can we have less of the americanisms e.g. "do the math" as seen in the "Stephanomics" blog. What is wrong with sums or Maths???

Enjoy the blog but please watch your language

Does anyone think that Jobsagoodin might be a Tory? Thanks Stephanie for an unpolitical review of the political obfuscation currently ongoing.

Friedrich Eagles 46

' In the public sector, many if not most people work very hard out of a sense of duty, there are no profits diveted elsewhere so services can/ should be provided at cost'

The logic of your arguments suggest you would prefer to see everything under public ownership. Is this correct ?

58

This Government brought in the FSA regulatory framework that took bank regulation away from the Bank of England.

The FSA, the Treasury and Government ministers were asleep at the wheel.

I repeat. Canada, the US nearest neighbour does not have this problem.

Anyhow, the deficit is real. We have to choose between half-hearted, wishy washy proposals for efficiency savings and an enterprise led government of business entrepreneurs who know how to create the private sector wealth that will pay the corporation and income taxes that will get us out of this mess.

If Labour are going to save us, how come they can't even get the banks WE OWN to meet the lending targets to get SMEs going again. How come they can't persuade individuals to start spending again rather than saving? The budget was smoke and mirrors, just like the phoney unemployment figures that disguise the 8m inactive adults because as I know, after 6 months you stop getting benefit even though you are pre-pension age (i.e. under 65 for MEN!) and cannot even get an interview for a job despite a hugely successful career.
Any of you that are secure in the public sector, well done. Turkeys don't vote for Christmas.
Oh and I've worked in the public sector. Just go to NHS and LA car parks on a thursday or friday and count the number of exec saloons the managers drive and the number of empty spaces (they're colloquially known as 'awaydays').
To repeat: 12% increase in NHS managers; 2% increase in nurses last year. Nurses don't take sickies like overpaid managers do...
Less hyperbole, more facts please, because in 24 hours the 'beaters' have turned me from wondering who to vote for to a nailed on Tory voter.
Finally, have you considered the possibility that the BA and rail strikes are being engineered by UNITE, so that King Gordon can sail in on election eve and save the [planet (just like he told parliament he saved the global criscted that after it slipped out).

Is this the possible fate of the UK? Extreme I know, but possible? I don't know but I hope not.

https://www.powerswitch.org.uk/portal/index.php?option=com_content&task=view&id=2079&Itemid=2

Scary....

Obfustication, elephants in the room, avoidance.... There are a lot of accusations but with a few exceptions contributors to this discussion, including the very questionable experts, are just as guilty of ignoring the obvious. Keep talking about cuts as the inevitable, and ignore what the politicians are hiding is that the most effective way to achieve a controlled reduction in the deficit is to increase taxation. We have all had the investment and reaped the benefits, now we have to start the repayments. The talk about poorer services doesn't stand up to scrutiny. Anyone who thinks the squalor in which health and education existed before 1997 was better than now wants their head examined. However badly the investment was managed, and it was bad, it has rebuilt the public service infrastructure and now it needs to be paid for. Yes, we will just have to accept some cuts, and there is stacks of room for efficiency savings, but it is a straight choice between paying up front through taxation, or ripping apart public services. Essentially share the cost across society, or concentrate the misery on the needy.

The media is guilty of focusing down on the phoney debate about cuts as directed by spin and but there are hopeful signs that you and a few others are starting to open out the discussion into economic reality. I watched John Redwood's budget speech and he quoted from the red book saying that the interest on the debt at £43billion in the current year is already a more expensive programme than the defence budget which is put at £40billion. This will shoot away because the debt is increasing too rapidly. This defines the problem for me. The political discussion should be about which party best understands wealth creation because soon that is all that will matter.

#52 & 58 "The source of the deficit is Banking" - er no it is not. Banking is some of the deficit but sadly the govt had already lost control of public finances before the credit crunch. Based on historic long term averages, public spending was already 15% too high before the banking crisis.

What the banking crisis has did (apart from proving the fact that a lot of bankers had not a clue) was determine when we had a crisis. All Labour govts end with economic mismanagement and a descent into public finance failure the Brown govt was always going to match that record.


#46 & 55 "but let us not delude ourselves that the private sector delivers better value for money- it is a complete myth" No that is not the myth - the myth is that the private sector ALWAYS delivers better value. In most cases it does but not all cases - and any case where govt is on the other side you can guarantee they will completely screw up the contracts and make overly generous payments to the private sector

#64 what-to-do-now

I can just see at last one regular poster who will blow a fuse when he sees your post! He already believes that he faces unfair competition with charities.

Why should people provide public services when "the pay isn't very good"? In your scenario the charitable workers are paying the price in even lower wages. Perhaps an even better option is to establish co-operative enterprises.

A question: what information about the economy do Cameron and his team not have access to? If this information is crucial, what right does the Government have to conceal it and how can the Conservative party formulate policies without it?

Oh: and will the Conservative party bring back assisted places? Please, please do.

[I will only call them Tories when someone else gets called the Whigs.]

Oh: and it's=it is. Belonging to it=its.

Please can we have fewer of the americanisms ...

#67
"Does anyone think that Jobsagoodin might be a Tory?"

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

No way.

More like a NuLabor apparatchik.

:)

Labour has been telling us for years that a Tory government would mean spending cuts whereas a Labour government would mean increases in public spending. For once, we should believe them.
So, if you think spending needs to come down, vote Tory. If you think spending needs to go up, vote Labour.
Simples!

#46 & 64 "Am I alone in liking government spending? Why would anyone want a valuable and vital service (e.g. health care, postal services) be provided by a profit-making privately owned enterprise. "

The example I always use when people suggest that the private sector should not be involved in utilities is BT. For those who are not old enough to remember BT before privitisation it was worse than useless - there were about 2 types of phones you could buy and if you lived in the country you could wait months for a telephone line to be installed. The prices for phone calls were also eye watering - they make mobile phone call charges look reasonable. Now we have a vibrant and diverse telecommunications sector.

Similarly (but more controversial) is British Rail. I remember taking the train in the late 1970s and 80s between Newcastle and London. Even then it was cheaper to fly. The service standard was dreadful, the food inedible - hence all the jokes about BR pork pies. Now journey times are significantly quicker, flying is still cheaper, but the quality of food is a lot better - and there are just as many services.

Admittedly there are examples of things that should never be in the private sector (the armed forces for starters) but it is not the case that everything would be better if utilities owned by govt - indeed there is a very good argument that many of the problems of Royal Mail are as a result of 30 years of govt starving it of cash

We are assured that the questions put to these muppets will be real questions from the audience. The problem is that you have to tell them what your question will be before you have any chance of becoming a part of the audience. Then if they like your question you may get an invitation.

So much for spontaneity and genuine answers. They will have had days to work out their replies with the aid of the Spin Team. It will just be a great big waste of time and will tell you nothing about what these provenly greedy and mendacious people are really planning.

SKB 41

'One observation is that the "bulk" of jobsagoodin's comments are little more than Tory propaganda'

Truth hurts does it? Good.

One observation of you is that this is the only post you've ever made. Kind of suggests your just a New Labour stooge.

If Gordon and Alistair were either running your choice premier league football club or a FTSE 100 company, would anyone consider their achievements over the past 13 years a success? We would have had them chucked out of their jobs at the football club and they would have been hounded out of the job at the company. So because we don't believe in the quality of the alternative managements, we might have to put up with the status quo. That's not much choice for the electorate. If Labour voters think that only Tory voters will pay the extra tax, then they are sadly mistaken as Darling didn't even increase the personal allowances, so the low paid are stuffed again. So much for Labour helping the poor.

andy mac 67

'Does anyone think that Jobsagoodin might be a Tory? '

Doh! and I was trying so hard to keep it a secret.

Actually if you look through my posts you'll see I've praised Stephanie on more than one ocassion, and also Nick R too.

That isn't to say she doesn't deserve criticism from time to time. On this ocassion I wasn't criticising this particular blog, rather her failure to point out GB's complicity for the mess we're now facing.

Can you give any examples where she has mentioned Labour's spending spree over the last 10 years when discussing the deficit. If not, can you explain why this hasn't been mentioned ?

#69 rougepierre,

"Anyhow, the deficit is real. We have to choose between half-hearted, wishy washy proposals for efficiency savings and an enterprise led government of business entrepreneurs who know how to create the private sector wealth that will pay the corporation and income taxes that will get us out of this mess."


What a complete load of absolute twaddle. The only private sector that has any such track record in producing money (note I say money - that is a very different thing to wealth!) is banking and finance. Now we have seen just how fragile that money production has been.

As for the rest of the private sector just look at its comparative record. The only area in which the private sector leads the world is in executive pay on all the performance analysies the sector lags badly behind its competitors.

#71
"Anyone who thinks the squalor in which health and education existed before 1997 was better than now wants their head examined."

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

Agreed. I have been impressed by the turnaround in public services. This does not come cheap; you get what you pay for.

On the subject of waste. There is bound to be waste and duplication in a massive organisation like the NHS; this needs to be dealt with and is slowly being dealt with.

The mantra that 'public bodies = waste / private firms = lean efficiency' is an over simplification.

The sheer hugeness of an organisation will lead to the 'waste' issue irrespective of which sector it is in. There are many cases of large private enterprises calling in the management consultants to help with identifying 'waste and innefficiency'.

I'm going to stick my neck out and predict the Election will NOT be May 6th. Precisely because everyone assumes it will be, I can see Gordo delighting in wrong-footing the Tories. That apart, like Mr Micawber, GB will be hoping for better news. Plus he'd get another 2-3 weeks at 10 Downing St.

Any takers out there ?

Andy mac 67

'Does anyone think that Jobsagoodin might be a Tory'

Does anyone think you might be another New Labour stooge ? Glad to see I'm annoying someone in Labour high command (not the Prince of Darkness by any chance ???)

This was an interesting post, I just wish some of the interviewers would have a similar insight when asking questions of our politicians and call out non-answers for what they are.
However there is one point I think you and others may have missed particularly in relation to the "savings" achieved by reducing staff sickness in the NHS. If we suppose that it is indeed possible to reduce staff sickness by say 25%, then that will only become a cost saving if you reduce the number of nurses/doctors/admin staff etc. Otherwise you may have more staff available (which is good), be able to treat more patients (also good) but the money spent will be no less than before. In fact costs may go up as someone on duty will incur other costs as they work using drugs, consumables, etc than an employee on sick leave. Therefore staff reduction has to be involved to achieve a cost reduction. The reduction may be with current headcount or by less use of agency nurses. Either way there will be fewer staff employed and if a saving of £550m is to be made, that is a lot of staff. However I do not hear our politicians proudly claiming that they will be making thousands of NHS staff redundant - both they and the journalists seem to dodge the issue that any efficiency cost savings must involve significant staff reductions. It is probably inevitable, but a bit more honesty all round would help to set expectations, whichever party has the job of cutting costs.

#73
"public spending was already 15% too high before the banking crisis."

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

Agreed it was rising year on year but that is what Labour administrations do. They are the party of public sector investment, a strategy desired by the great majority of the people in this country who even now, with the Fat Lady Speculator about to sing, don't want cuts.

Nothing to do with 'out of control'.

It comes down to whether you want a public sector or not.

There is compelling evidence that the level of spend is beginning to have results in terms of quality especially in the NHS.

The private sector really wants to pull its finger out and 'grow the cake a bit' as the public sector needs more tax revenue. As the more advanced and successful private sector in Germany, for example, does.

Our private sector really is the problem, not the public sector.

Having just lit the blue touchpaper I shall withdraw to the pub :)

71: "Anyone who thinks the squalor in which health and education existed before 1997 was better than now wants their head examined.

May be there was squalor whatever you mean by it (compared to what? Zambia?), but certainly "in it" education existed. As someone who works in "education" I can tell you that it does not exist anymore. The products of Labour "education" efforts have no heads worth examining. Anyone under twenty who is capable of independent thinking is terrifically lucky to have had a thinking family, an extraordinary teacher, or just a surprising set of genes. This applies to public schools as well; they also have to jump through Government hoops. The dumbing down in the last 10 years is a wonder to behold.

As to health, a shabby humane consultant-led system has been transformed into a managerial monster, where bed-managers override medical decisions.

Bottom line: would I prefer a 70s hospital to one now, with all its bells and whistles? Of course I would. Would I prefer a state school in the 70s to a school now? What do you think?

There needs to be legislation to ensure no party gains an advantage by running up a deficit or they should only be allowed to spend surpluses that they have run up in previous years.

If the government changes then the surplus of a previous government should be offlimits to the new government.

People will look back in 50 years times about how we ran things and decide that we were corrupt and ignorant to allow this cheating to happen.

Of course the 'war' between the two main parties over the deficit is phoney. I think that there are two main reasons for this.

In a 24/7 news environment, with so much analysis, politicians are reluctant to get into a detailed debate about how much pain they want to impose on beneficiaries of public spending and on taxpayers, just in front of an election. The fact that so much is being talked - and blogged- about in the media about this 'non-contest', when there is little flesh to put on the bones of a story, illustrates the point.

Secondly, we have lived for some time now in an age when the political debate was meant to be managerial not ideological. Hence Cameron's and Osborne's policy of using Blair as a role model and trying to rid themselves of the 'nasty party' image. However the credit crunch, banking crisis and 6% contraction of the UK economy really undermined the presumptions behind this Conservative approach. The events of the last 2 years have opened up the possibility, perhaps necessity, of the Conservatives setting out some ideological 'clear blue water' between Labour and themselves. They have struggled to come to terms with this, not least on their approach to the macroeconomy. The pathetic comments of Mr Osborne in response to Evan Davies on the Today programme bear this out.

Does this Tory floundering reflect the fact that they are indeed still thinking in managerial terms and there is genuinely no difference of substance between Labour and themseles on macroeconomc policy? Or have they thought much more about the ideological case for cutting the deficit faster -and perhaps a host of other measures to roll back the frontiers of the state, but are reluctant to discuss it (back to my first point)?

If the latter is true then the forthcoming election may represent a real choice in philosophy about the way government should intervene in the economy. It would certainly be more interesting, not least for economics journalists, if this were true! However I fear that it is not true. One litmus test would be for the Conservatives to abandon the ridiculous notion that you can protectively ringfence huge departmental budgets such as health and education, when almost inevitably you cannot if you wish to get the deficit down faster than Labour would.

I like the title: PHONEY DEFICIT WARS!
Why is it that the UK cannot define “bulk”, as in deficit? Does the UK Government not keep books, or is it that the books are "in the eye of the beholder"? It seems frightening to me that the two leading parties have a debt separation of £8bn! That’s a big degree of separation that's bigger than a pile of peanuts!
Has it occurred to the Conservatives that the structural debt is likely insignificant in comparison to the investment debt, which I suspect is riddled with CDS cancer.
0.6% of GDP by 2015-16? This is a joke, right? The debt figure currently stands at 13% of GDP, and you know what, it doesn’t really matter whether this is structural or investment. Debt is debt; debt must be serviced. Debt costs "interest" and benefits the debt holder (who may very easily have bet against UK GDP performence in the first place).
Neither David Cameron or Nick Clegg seems to have an answer on how to make the borrowing go away. Gordon Brown has an answer, but is holding back – maybe for European support. Gordon has the Tobin Tax, a tax on all foreign transactions. This tax would have minimal effect on the little people, but mega effects on the Goldman Sachs of this world. It hits the financial wheeler/dealer big-shots – the ones who caused this financial chaos to begin with; it also establishes audit trails for detecting hanky-panky. It’s the right tax at the right time to alleviate debt and save social programs. So why aren’t the Brits out on the street clamouring for Gordon Brown’s Tobin Tax? It befuddles me!
The G-20 Governments were divided about taxing financial trading. Gordon Brown told a meeting of finance chiefs in St. Andrews, Scotland that such a levy could prevent excessive risk taking and fund future bank rescues; he's right. US Treasury Secretary Timothy Geithner said a “day-by-day” tax on speculation is “not something we’re prepared to support.” Do you dig that? Let me repeat it: Timothy Geithner said a “day-by-day” tax on SPECULATION is “not" something we AMERICANS are prepared to support.” Wow, did anyone ask him why?
Here’s something that Brown said that made far more sense to me: “…Banks enjoy the rewards of their successful trades yet leave taxpayers to pick up the cost of their failures.”
Public spending cuts often hurt the folk that had nothing to do in raising the debt.
Operational efficiencies often hurt the folk that had nothing to do with raising the debt.
Your point is well-taken. Public spending cuts and operational efficiencies never result in huge savings, if they materialize at all.
So, why not get with something that will work, and that will irritate the American financial bail-out boys simultaneously?
Tobin Tax!

We the electorate are not stupid, we know that public services will have to be cut, taxes will rise, especially under a Labour Government, they always do. However can someone tell me why every party appears to think that overseas development aid will remain untouched? Why, as far as I am concerned, charity begins at home. Let us sort out our own problems before giving excessive amounts of money to overseas people which probaly ends up in someone's back pocket.

Some very interesting and informative comments, esp 19,20, 46, 47, 71 and 63 to name just a few. Thanks for posting. It has made this the most substantive blog by far for ages.

A totally refreshing change from the acres of usual right wing rants that the trolls tend to post. They must be out buying their cider....Of course, not. They live in Dubai. [Cheap, I know- sorry].

Hopefully, one benefit of this banking crisis is that gov'ts and the public will realise that benefits of a loosely regulated financial sector are purely illusory and that there are far more important and relevant indsutries. A mondern new deal is needed.

A project London needs is Crossrail, but it looks like the Tories will now not support it. Another lost opportunity...

"efficiency savings" These should be renamed "inefficiency savings"

Whilst People cannot get proper medical treatment and also have to pay for dentistry, whilst education is not free at university, whilst our public transport system is unreliable and more expensive than taking the same journey in a car, whilst people are expected to wait until 68 to receive the state pension then the government is failing and is inefficient.

Making cuts will result in even more inefficiency.

It annoys me that the vast majority of the population has been fooled into believing that spending cuts are necessary when we need to increase spending not cut it.

With a more moral tax system we could remove the deficit entirely and gain a surplus of tens, even hundreds of billions which could then be spent on improving the country.

92. Keyneswasright wrote:
"Does this Tory floundering reflect the fact that they are indeed still thinking in managerial terms and there is genuinely no difference of substance between Labour and themselves on macroeconomic policy?"

You're probably right. The problem KWR, I believe, is simple. To go back in history. Blair via Mandelson learnt a big lesson from Clinton in the mid 90's - appeal to all sections of the voting public. So NuLabour under Blair embraced the Middle Class as well as their traditional support.

For 13 years the Tories have struggled or floundered to differentiate themselves, because NuLabour and the Tories occupy similar political positionining. Time after time they propose measures (the latest being no stamp duty for first time buyers of houses under £250,000) only to see myopic Brown steal the idea from Tory policy.

However in reality it's all smoke and mirrors. Brown (who learnt his dogma from Jack Jones the Communist TGWU leader) with his stealth and not so stealthy tax policies is quietly bleeding the Working and Middle Classes dry - very clever policy.

I notice today even Bob Crowe of the RMT is taken in and believes the current NuLabour party is not Labour - hence all the strikes (although I think the Unions are making a power grab, which we will all pay for in the long run).

No wonder the Tories are finding it difficult. Add to the mix the deficit and the toxic effect reducing this will have on Polling Day and I think we are headed for a hung parliament. Heaven help us. Today's environment feels more and more like a rerun of the 70's.

May I talk about the long term view? The size of the National Debt has been discussed in Lord Macaulay`s History of England. It may be useful to take a long term

The American War of Independence-" The nation must( it was thought) sink under a debt of a hundred and forty milllions unless a portion of the load were borne by the American colonies. The attempt to lay a portion of the load ..produced another war.. That war left us with an additional hundred millions of debt, and without the colonies whose help had been represented as indispensable...Soon after the wars which sprang from the French Revolution and which far exceeded in cost any that the world had seen...After a few years of exhaustion, England recovered herself> Yet like Addison`s vatitudinarian, who continued to whimper that he was dying of consumption till he became so fat that he was shamed into silence, she (England) went on complaining that she was sunk in poverty till her wealth showed itself by tokens which made her complaints ridiculous"

What about the younger generation of today 2010 taking on all this debt? I and many others were born just after the Second World War, and the National Debt was the highest in proportion to National Income that it has ever been, and by a long way. I and many others grew up with that debt, and things just got better as Lord Macaulay says.

I'd just like to add that the real reason that the public sector deficit wars are phoney is that the real dead weight dragging down the economy is private debt - and nobody even wants to talk about it, yet is was this that did the damage to the banks and created the need for deficit public financing to rebuild their balance sheets!!!!

We require a programme of private debt reduction (or deflation) so that the economy can really start a process of recovery. Presently all the parties seem keen to get the private sector to take on more and more debt - which is economically illiterate and ultimately insane.

Richard Dingle wrote:
"... The prime cause of the 'mess' we are in is the banking sector.
The establishment (i.e. All major political parties, the banking class, and the media) want us to conveniently forget.
We won't."

That's what your mate G Brown wants you to think. Stupidly, he piled up over £200bn of state debt in the years 2001-2007, at the top of a boom when he had record tax receipts coming in. Plus so many £bns in off balance sheet PPP PFI schemes that the Treasury is a bit coy about revealing the exact figures.
Even Darling's PBR last December indicated that 75% of the deficit going forward is due to past overborrowing & overspending. Only (but still bad admittedly) 25% of said deficit is due to the banks.
So blame where it's due.
Brown wants us to forget that of course.
We won't.