The incredible shrinking gap

There is no way that the Tories would be honest with the public about the cuts that are needed to get the UK back on an even keel. They would not get elected if they did.

The best we can hope for is that they have good plans for the necessary cuts in place, and get voted in by the sheeple without having to reveal them.

Only 25% of the British public believe that the UK's debt is a significant problem. And Gordon Brown isn't one of them!

Another thoughtful post, Stephanie.

Neither Labour or the Tories are providing details as to how they would cut the deficit – and sadly that’s no surprise as there is a General Election looming and most of the public are either in ignorance or denial about the size of the problem. The policy being followed seems to be don’t anger the voter just before you need their vote.

According to Nick Robinson’s blog:
https://bbc.kongjiang.org/www.bbc.co.uk/blogs/nickrobinson/2010/03/its_the_deficit.html

A poll in the Mirror today suggests that 50% of people believe that the deficit can be dealt with without any impact on the public services. 75% say dealing with inefficiency will do the trick.

If this poll is accurate, I find those statistics almost as frightening as the public finance figures. What it means is that at least three-quarters of the population are largely ignorant of the most important issue that faces the country; i.e. the UK is worse than broke. This will be a major blow to them and their friends, family and colleagues in multiple areas of life.

We are about to go into a General Election discussing dog licenses, party funding, minor changes to the voting system and candidates’ wives - and not the giant elephant in the room (public finances). The public will be very angry with all parties when they realize the true nature size of the problem and cynicism about politicians will increase even further.

Thanks for the clarity of explanation Stephanie. But...here we go again: what is the size of the deficit policy gap? How will the EU/Bond Markets/IFS etc etc react?

Surely, for the sake of UK strategic economic purpose, we need to break away from the "my willy is smaller than your willy"!

The real issue for citizens and business is what pattern of medium- long term revenue raising and govenment expenditure will offer some security to households, address the North-South economic divide and help industry gear up for the sectoral competitive battles ahead.

So let us please opt for the grown-up debate about how we are going to fit government expenditure patterns and levels around real economic and commercial imperatives. At the end of the day, of course we are vulnerable to market sentiment, but is'nt that where we came in? The last trend in market sentiment was built around efficient market theory, and we are unfortunately shouldering the cost burden of that cerebal error!

Wouldn't it be nice if someone put an actual plan on the table for all to review. Future projections mean nothing as the economist declared that the boom would be never ending and the governments shouted in affirmation. 2014 only matters if something is begun now...and what will that be...who will pay....how will the taxes be distributed by class and profession and where will the cuts be made. Simple spreadsheet will do.
And maybe in a fit of honesty they will say what they will do to prevent this from happening again. Institutional corruption is the corporate culture.

The irritation to both your, and Nick Robinsons view, of EC chastisement is to focus more on the Conservative position than the current bag of poo that got us into this mess in the first place.

The primary charge is that the sitting Government is not doing enough, earlier enough. How ironic that we got here spending far too much, far too quickly.

Focus is the benchmark of incisive and factual reporting. Cynicism is for entertainment. Let's have facts - not jaundiced knockabouts.

Stephanie, I listened to this first thing this morning and following your link and I am sure that Ken Clarke was absolutely clear in this interview refering to the 'bulk'. I don't think he backtracked at all in this interview. If anything he seemed very clear and open. I think your commentary is misplaced on this post. He does say it is necessary to get rid of the structural deficit, but he makes no commitment in say 4 or 5 years and seems to me in listening that it is more in general terms.

The EU and IMF have regularly warned Gordon Brown over his largesse with the public finances for nigh on a decade now. He ignored all the warnings then and will continue to do so. The ignorance of Brown is matched only by the ignorance of the sycophants in the media who fail to challenge him about these multiple warnings. Twenty minutes spent Googling "IMF warns Brown" "EU warns Brown" and "Brussels warns Brown" throws up plenty of articles going back to 2001. Oh for someone with a bit of backbone like Paxman to put the numerous warnings to Brown and ask him why he ignored them for 10 years. *Insert roll eyes smilie*

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

It would be interesting to read the actual EU report - as you imply the EU has always had a persistently deflationary stance probably for historical reasons - but the problem today in terms of economic recovery is a demand deficit across europe (Madam Legard's recent remarks are interesting in that respect). As I understand it the EU is not recommending cuts this year - just as well given recent statistics . It would be good to have an economic discussion that focussed on the whole picture - sustaining the recovery, dealing with the Banks - lending to SMEs is still apparently an issue, placating the markets and dealing with the implications (and social justice of) the cuts

Steph,
You say "Now, another way to describe the government's plans would be to say it plans to cut the structural deficit - the borrowing that won't go away with the recovery - from 9% of GDP in 2009-10 to 3.1% of GDP in 2014-15. In other words, they would reduce the structural deficit by two-thirds over the period." I'm struggling to understand how this is equivalent to Labour's claim that they will "halve the deficit by 2014/15". Could you give us the maths please?
You also say "...we can only conclude, once again, that the difference between the parties is less than they would have us believe." I agree, there isn't much difference in the approaches. The difference is in whether either or both can be believed. Labour has spent the past several decades telling us that the Tories are good at cutting public spending, so I think we have to believe that the Tories will indeed cut public spending. Given the history of public spending under Labour governments, can we believe that Labour will actually deliver the cuts they promise?

Apologies for cross posting my own posting from Nick Robinson's blog but this blog is more appropriate.

"91. At 4:19pm on 16 Mar 2010, John_from_Hendon wrote:

Cuts!
12.7% equivalent to deficit of 178 bn
therefore
3% equivalent to deficit of 42 bn

this is cuts or tax increases of 136 bn

(Now total defence spending is 36 bn, NHS 90 bn)

Are you scared yet !!!!!

Only way to do this is something drastic say 20% pay cuts for all civil servants/MPs/Doctors/Nurses/Teachers etc etc. + 20% vat"

How do you save 136 bn a year - I don't think it is possible without massive pay cuts for the civil service and all public servants - no-one can be 'protected'.

I haven't yet looked at detailed expenditure to analyse how much of the cost is pay - I'll dig out the figures later and will revert - but my guess is that a cut of between 15 and 20 percent will be needed. And what will a 20 percent cut to the rest of the economy!

As far as I was aware, the Conservatives have already said that they would announce their cuts after the budget. A sensible decision really as it makes them look better. Nothing like listening to a suicide note from a Chancellor who won't be coming back after the election whether he likes it or not, and then listening to a Tory whose budget will have the benefit of prior public reaction to Labour's, have been changed to better fit that reaction.

I have confidence in the Conservatives.

The Commission would do much better to sort out its own economic mess before giving advice to others. It has absolutely no credibility whatsoever. For example, why have the EU's own accounts not passed the audit test for many years. This comment may have already been made by others ahead of me, but it is impossible to tell at this point because they are all "in moderation".

Let's face it you put forward what needs to be done to sort the mess out and you never get elected.

I'm going with the party I think have the Cajones to sort it out.... and that ain't the one that thought money grew on trees

It'll be a hard few years, but then we can all get socially soppy and vote this lot back in again....

At least we'll see the return of 'Alternative Comedy'

more about #11

Income yields 140.4bn and Vat 67.2bn and NI 94.8 bn (Table 2.9: Current receipts - HMTreasury, 2009 Pre-Budget report: the economy and public finances – supplementary material)

We need 136 bn - so double income tax (all rates) or put VAT up to 50 percent from 17.5 percent (!!!!) or raise NI to 25 percent from 10 percent - all plainly ridiculous so I can't see any way other than a drastic cut to public sector pay of 20 percent across the board - no execmptions.

"Now, the Conservatives may say this misreads their position. But to do that, they would surely need to say what their position is"
=======================================================================

Under-pins the light weight and inexperienced argument. Nice chaps though.

Poor Ken Clark, a Tory I much admire and a great Europhile, he is wondering what he is doing in that shadow cabinet. His Homer Simpson moment...doh.

What a choice for the voter.

As Stephanie points out, what we thought was a £37bn structural hole 18 months ago, was revised up to £90bn a year ago, and then revised down to £73bn in the November PBR. As is often the case in economics and in life the future is unknowable and modest changes in economic growth can have a marked effect, over say 5 years, on the structural deficit. Its not really true to say it won't go away with the recovery. The problem is that we simply don't know how strong the recovery will be. Consequently we don't even know our starting position with regard to the structural deficit profile with any confidence. In the fullness of time I suspect that today's feverish debate about whether or not to start the deficit reduction programme in 2010 or 2011 will seem fairly trivial. The lunatic comments of so-called bond vigilantes should not be allowed to poison a sensible debate

For those who want to know what it would be like under the Tories, they only need to look at the Tory governments from 1979 onwards. Before the election, the Tories said that unemployment was too high under Labour. When they got in, they doubled it even though the oil money had started pouring in.

Simply, those who wish to double unemployment should vote Tory.

#2
"A poll in the Mirror today suggests that 50% of people believe that the deficit can be dealt with without any impact on the public services. 75% say dealing with inefficiency will do the trick"

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

Bet at least 95% know who won ex-Factor.

Huge economic issues and the most dumbed down electorate ever.

One huge rude awakening coming peoples way. I will be watching from my bunker in Berlin :)

It is obvious to me that once the election is over, irrespective of who wins, there will be tax increases and cuts (including front-line services).

Delayering is the easy way of cutting cost out of any organisation so starting at the top and removing the useless and enormously expensive institutions of the EU would seem like an ideal way of tackling the whole of Europes national deficits.The sigh of relief from over regulated and overburdened (by taxation) populations across the continent would be deafening. It would be a shame if it stopped their though. Yes I know - wishful thinking on my part but dreams will soon be all most of us will have left.

Stephanie - Get a life and a brain PLEASE!!!!. We are shortly to have a budget - a week away - followed later by an election. Do you expect the Conservatives to give away all their best ideas, just for Labour to pinch them, like in the past. Keep you powered dry till after Labour are forced to divulge their plans. At least give the Conservatives the benefit of the doubt for a week or so.

The Teasury and the Bank of england are the ones who will decide on our economic policy after the election just as now. These politicians who claim to understand public expenditure are only the spokesmen for the real movers and shackers. They are presented with options and have to choose based on limited knowledge.
It's ironic that the sign on the front door of No.10 says " First Lord of the Treasury". That shows how far we have come that requires the holder of this office to be an expert on every subject under the sun but master of none. The first duty therefore, of any administration, is the need to uphold the integrity of the public finances.

Looks like slavish adherence to targets set on what basis, by whom and how long ago? The important issue is that the deficit is under control and is appropriate to the economic cycle i.e. it is not just a question of how it is funded in relation to adding to the overall debt but it is managed strategically and as part of the strategy to recover. Smart borrowing is an answer as well as carefully decided taxation and control of public expenditure rather than raw cuts.

Structural deficit £180b. Assuming post tax income for average worker is £17k (net of taxes and benefit payments) then cutting the structural deficit would amount to £180,000,000,000 divided by 17,000. Well we can all do the maths (if you have a calculator with enough numbers), then it looks like hyper unemployment! If this calculation is correct then all forward thinking employable people will choose to emigrate - unfortunately these are the ones that probably generate overseas income and pay taxes!

Perhaps Boredom Grown can use the British numerical system to spin his deficit? The deficit would then only be one hundred and eighty thousand million pounds - sounds better to me.

This has been a long time coming and I see little chance for the UK unless there is rapid depreciation of Sterling combined with rapid increase in manufacturing, but this requires investment in plant and equipment, which I do not think we possess anymore.

With this analysis, I have just realised that I need to sell my over-valued house and emigrate; not for my benefit but for my children.

Will update you once I have moved.

post 2 banjo10 - I agree with you entirely. I also accuse the mainstream media, including the BBC of not getting the facts to their viewers. If you want to know if it is snowing outside, BBC news 24 will give you reporters up mountains, reporters in Wales, London, Scotland, The South Pole; reporters and talking heads in the studio:- "Yes it is definitely snowing". Pieces are done with scientists, meteorologists, weatherologists, rainologists, chillyologists. There is a whole section on the website detailing the white stuff. There are pieces on the white stuff from history. Viewers are invited to send in pics and get their names on the telly. It really couldn't be more accessible, interactive or thorough. After all that the average person could get a PHD in snowology based on the media coverage it receives.

Why then aren't they educating the general public in something as important as the brown stuff - brown in more ways than one. These polls actually tell us that the BBC is deliberatly ignoring the biggest story in our lives.

Journalism - you don't know the meaning of the word

Another way to describe the government's plans would be to say it plans to cut the structural deficit - the borrowing that won't go away with the recovery - from 9% of GDP in 2009-10 to 3.1% of GDP in 2014-15

It seems to me that there is there a big assumption in this sentence about 'the recovery' that makes confining policy priorities to structural debt meaningless

Excellent thoughts, as always, from Stephanie. But whenever I hear politicians speak of 'halving the deficit' I want to add 'doesn't this still mean the year-on-year sum of the yearly deficits is still going up - i.e. the National Debt?'

I guess some increase in the National Debt is OK - like about 2% per year - but simply to 'half the deficit' doesn't sound like good practice unless the deficit were already only 4% of the debt - and we know it isn't that small.

I can't believe our politicians are so stupid that they don't understand the difference between 'deficit' and debt'...so am I wrong to worry about this?

Not surprised you've had your wrists slapped Stephanie, I suppose 2 unbiased blog entries was enough for this month.

Why be critical of an opposition who know that the majority of voters are living in cuckoo land, and they know that even being half open will destroy any election chances. Can you really blame them for some vagueness?

Its the current government that have the Treasury employees working for them that should be giving exact details. Which they cannot, as most of their plans are based on unrealistic growth levels.

Can you imagine if Osborne said he believes growth over the next few years would be in the 1%-2% range, rather than 3.25%. You and others would blow him away for talking down the countries future.

#11
"How do you save 136 bn a year - I don't think it is possible without massive pay cuts for the civil service and all public servants - no-one can be 'protected'. "

==============================================================
No one is suggesting going from a £178 bn to £42 bn in ONE year. Even Gengis Khan could not do that.

Even so it is a massive reduction over the lifetime of a parliament.

I repeat 'economic pre-requisites will write their own script'.

Labour will cut and conceal with spin, and tax.
Conservatives will cut, and tax.

Both cuts and tax hikes are a given.

... and what underpins all the forecasts of both parties is unrealistic growth expectations. Darling's record on this is bad.

Back to growth as the real issue.

No political party dare spell out the only way to make savings in what I term "Service Industries" (Civil Service, Local Authorities NHS etc)WHY? Simply that 86% of costs are STAFF costs. You save very little by turning out the lights! Hence there have to be staff reductions--- weeding out the "nice to have" from the essentials. Very painful for all concerned. However Mr. Brown has presided over deficit after deficit--at least £160 BILLION since 2002. This was NOT the work of other countries and/or wicked bankers. It was the Government of the day. It is a long and painful journey back.

What Europe says has not effect on the debt, the IMF and the World bank well we know what they really are, part of the cabal.

It makes no difference be it Labour or Conservative or Liberal, they can only do the same thing, the real power to do anything lies with the people who really run the government in the important matters.

So what you should do is ask GS and the rest of them, because they all work for them in one way or another

@ No. 11

How do you save 136 bn a year - I don't think it is possible without massive pay cuts for the civil service and all public servants - no-one can be 'protected'.

Currently, half of all civil servants earn £20K or less. One in five earn less than £15K. Any cuts to these low paid workers will be made up by benefits such as family tax credit so there will be no savings.
Recently the MoD shaved off £3.5K from the E1 grades pay scale, this amounts to a reduction of around 15%. However, more senior grades avoided any cuts to their payscales.
The civil service only make up about 10% of the public sector and they have by far, the worst levels of pay. Tinkering with their salaries won't make much difference so you will need to start looking at cuts in the other 90% of the public sector who have higher levels of remuneration.
Perhaps it's time to ask for a rebate from the EU. After all, when the auditors last looked, they couldn't say where all the money had gone.

21. At 8:08pm on 16 Mar 2010, Keith Sloan wrote:

"Stephanie - Get a life and a brain PLEASE!!!!. We are shortly to have a budget - a week away - followed later by an election. Do you expect the Conservatives to give away all their best ideas, just for Labour to pinch them, like in the past."

I think it might be you that needs the brain, the Tories have been constantly changing any policies they come come up with for years. I have yet to see what might constitute a best idea!! Its why they are in opposition to government and are likely to stay there.

18. At 7:55pm on 16 Mar 2010, Fairsfair wrote:

For those who want to know what it would be like under the Tories, they only need to look at the Tory governments from 1979 onwards. Before the election, the Tories said that unemployment was too high under Labour. When they got in, they doubled it even though the oil money had started pouring in.

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


Currently we have 2.6 million officially unemployed plus a further 8 million economically inactive. Plus there will no doubt be a further few hundred thousand hidden on other statistics somewhere (or not)

I don't suppose you have the corresponding figures under the Conservative by any chance?

#27
"I can't believe our politicians are so stupid that they don't understand the difference between 'deficit' and debt'...so am I wrong to worry about this? "

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

Total debt is only an issue if you can't service it - this is why deficit is the only show in town.

Owing a lot on your Barclaycard only matters if you can't make the minimum payment.

In percentage terms German debt is some 8 per cent more than UK but they are re-furbishing the old East Germany and their deficit is only 3.2 per cent.

The market is beginning to wory about that 'minimum payment' on the UK Barclaycard.

It is obvious that the Tories should act cautiously at this stage as they have yet to see the Books!!.
Any incoming administration, whether it be a Government or a Company, would form an opinion as to future spending plans after all information was to hand. I personally feel that things could be a lot worse than we are lead to beleive.
This present Government keeps hanging its hat on future growth of 3% or more by next year. If this is not acheived then things will get a lot worse. I for one feel that such growth is "pie in the sky", for to obtain this would mean returning to the massive personal debt levels we had before, which fueled growth figures that were really a mirage.
The only weapon left in this Government armoury is inflation, which in a few years would eliminate the debt completely. This would only raise more problems as our wage bills soar and our competitiveness disappears altogether. Once inflation is out of the bag it is very hard to get it back in!!
Whoever wins power is in for a long hard slog with a lot of Public Sector anger if jobs start to be lost.
I think that there is only one thing worse than losing the next Election and that is winning it!!.

Typical labour bias. Let us hear about how we arrived at this point a bit more; Brown's profligacy, that's how. He cannot be the man to get us out of this mess.

#37
"It is obvious that the Tories should act cautiously at this stage as they have yet to see the Books!!."

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

True but since when has 'caution' meant 'changing position' every week.

That is the way to snatch defeat from the jaws of victory.

Fairsfair wrote:
"For those who want to know what it would be like under the Tories, they only need to look at the Tory governments from 1979 onwards. Before the election, the Tories said that unemployment was too high under Labour. When they got in, they doubled it even though the oil money had started pouring in."

I remember those times. My taxes were going to support inefficient nationalised industries staffed by (not all but in many cases) an indolent workforce producing shoddy goods no one wanted, backed up by hidebound unions. Things had to change. All Thatcher's works were not right by any means, certainly strategic industries such as nuclear should have been held on to. But now under Labour we have 8 million economically inactive adults, and manufacturing has declined faster in these last 13 years than the previous Tory 18 years. Not exactly a proud record.

Further to my earlier comment, which I have shown to my Whiffy, I will not be leaving the UK any time soon! Unfortunately, she is Irish and not prepared to move further away form Ireland than UK. Since they have a bigger problem (so she thinks) I will have to stay in the UK. As a redoubt free-marketeer I will invest in the Euro to ensure that we can afford the family vacaion to the outlaws.

As a parent, I am alredy discussing ways that my ten year old and eight year old can get thir degrees and emigrate. They can visit me and my wife in our old age at depreciated prices.

If they do not emigate then I will covert to Islam and emigrate them and myself to an oil prducing nation - Norway! here I come!

We can be scandalised by super earners in the public sector - it might make us all feel better - but the total amount saved would be tiny compared to the £175bn that needs to be removed from public spending.

The problem with making low paid public sector workers redundant is that they end up on welfare or their families simply get more tax credits (quite rightly). For this reason and others, according to the FT, to remove 12% in real terms from public expenditure, you need to apply cuts of x1.5 that percentage; i.e. more than 18% in actual cuts. But how to do this without plunging the UK into a depression?

If key 'frontline services' are to be protected radical and deeply unpleasant solutions may be required:

1. Deliberate policy of high inflation (with the headline figure as hiddn as possible), without complementary wage rises

2. 0.8 posts as the norm in the public sector (i.e. 4 day week)

3. 20% VAT and 5% VAT on food

4. Carbon taxes

5. Reduction in the minimum wage, which is almost the highest in Europe

6. Unemployment benefits not more than 80% of the minimum wage

7. Higher taxes for the wealthy, including the closing of tax loopholes

8. Cancelling Trident and the aircraft carriers

9. Cancel any outstanding projects and delay routine investment

10. Mass privatisations (perhaps even the motorway system?)

Not my choices, just things that might get considered.

Who ever gets in Tories , Labour or anyone else, the deficit is going to be reduced far quicker than a 50% reduction in 4 years time.

Its simple maths , our growth in the coming years is going to be subdued and our current tax income is £200 billion short of our current expenditure (Roughly £4000 a year for every man resident of the UK).

Unless a real and significant plan to reduce our public spending is introduced the UK will simply be unable to borrow ANY money at reasonable rates of interest.

The UK is on its own with its own currency, there will be no international bail out without repercussions.

The lie of "No cuts required" by Gordon Brown will be highlighted in depth in the months to come.

We have to roll back 13 years of mismanagement and bloated public spending.

Its not rocket science, its simply recognising naive ideology that an over bloated public sector is not an investment but an expenditure that needs to be paid for in cold hard cash not via borrowing on the never never.

I have a fantastic idea, that should any of the main political parties have the bravery to do it would get my vote tomorrow. Instead of the nonsense of cutting the wages of hard working, honest & faultless Public Servants lets get the money back from the people who put us in this positions in the first place. Before any of the type who are responsible for draining the life blood out of our country say, "well it's tied up with contracts" & "we will lose the cream of the profit makers" have a look at what our cousins over the pond are doing

I am awaiting "writingsOntheWall" and "John_From_Hendon" to comment - as I appriciate, but disagree with their politics. Actually, I disagee with most people in the UK in that I believe that we can create a new economy based on green energy creation. Unfortunately, the current government creates jobs in health, where the income (take it as savings) are not patentable but are realised worldwide.

I suggest cutting funding for health research and put it into green energy. I say this even though it is contrary to my employer's strategic direction

It seems as though people in this country are looking for a scapegoat and blaming Gordon Brown for this international failure of Capitalalism. I wonder if Barack Obama is blaming Gordon Brown even though it started in America. What is interesting to me is that the very experts and pundits who run the international capitalist system did not warn of the Credit Crunch and are now trying to tell us how to correct it and are trying to divert attention away from their failure by blaming others.

On Debt Deflation:

Getting from a (fiddled and understated) deficit of 178 bn a year down to just 42 bn a year - although nearly impossible will be necessary, but we forget the 200bn Bank of England QE and the 'investments', NR Bad Bank, RBS and Lloyds - (I guess a conservative figure of) say another 500 bn. (Total of 878 bn rather than 178 bn. i.e. 62 percent of GDP!!!)

What is most frightening, far more so than the public debt, is the necessity to undo the over leveraged personal private sector debt. (i.e. mortgages secured on property already in, or that will be in, negative equity etc.)

As I have written before it ain't started yet! (it = the recession/depression). This is the direct result of an insane zero interest rate policy at the wrong time in the recessionary cycle of this crash. (And there is a very cogent argument that the bubble itself was perpetuated, if not caused by too low interest rates during the last decade too.) We needed to have some economic ammunition to help the recover gain momentum but the idiots (= BoE /M. King, MPC etc. etc.) have blown the entire arsenal before we have gone through the necessary debt-deflation. They have absolutely no excuse for this incompetence.

21. Keith Sloan wrote that the Conservatives have to keep their powder dry - I agree.

Time and time again Nu Labour have pinched Tory ideas because their approach is to pander to the left whilst taking the middle ground.

As yet we are in the phoney war. No election has been called, we face an imminent and irrelevant budget so why should the Conservatives show their hand. Nu Labour are playing poker and you don't broadcast your hand until you need to.

What is more serious is that our economy is being driven by the needs of an election and NOT by the real needs - which is to address sluggish growth and a disastrous deficit growing by the day by millions.

It's Nu Labour and the Clown who should be ashamed!

Well, I've said this time and again - we have 2 and 1/2 NuLabour parties here and none of them has any clue how to deal with the mess we're in !!

Along comes the Big, Bad, Brussels Wolf to tell us to shape up or shuffle off !!

News ?? Hardly !!

Mind you, said Wolf also told the other European nations the same thing, too, so they are not just picking on us !!

#42
"Not my choices, just things that might get considered"

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

And all this because clever banker not so clever and Darling and Brown very clever at taking money that is not theirs.

Amazing how everyone has fallen for the line spun by Brown that he bailed out the UK economy, the workers BUT not the banks and that there was absolutely was no alternative. Moral hazard is the huge 'elephant in the room'.

On the bailout Brown got it as wrong as possible. Brown's whole approach is to blame something else.

'Wasn't me, honest, a big boy did it and ran away.'

"6. Unemployment benefits not more than 80% of the minimum wage"

Is this after said minimum wage has been cut or before.
Why not go the whole hog and just shoot them.

This whole shabby episode in our history seems to be a gigantuan mickey-take.

Is it some ghastly social experiment to see how far people can be pushed ?

The 'scales of justice' need to be dusted off and put to use. Any society that does not give the minimum weight to fairness and equity is doomed.

Compulsory reading folks

https://www.guardian.co.uk/commentisfree/2010/mar/11/banks-lied-darling-puppet-city

We don't want to get to this point...

https://news.bbc.co.uk/1/hi/6314559.stm

47

How many more times are you going to cut and paste this?

Fairsfair wrote:
"It seems as though people in this country are looking for a scapegoat and blaming Gordon Brown for this international failure of Capitalalism. I wonder if Barack Obama is blaming Gordon Brown even though it started in America. "

We are not blaming Brown for this 'international failure of Capitalism' as you call it. We blame Brown for the £200bn of borrowing he incurred between 2001 - 2007 by running a deficit instead of a surplus, at the top of the global economy. So he spent £400bn that he shouldn't have; money we could do with now. Then there's the small matter of £200bn at least incurred on PPP/PFI schemes which will take 30 years to pay off. Economic incompetence and policy error is what we blame Brown for.

To Richard Dingle,

I realise that my list of spending cuts must have come across as heartless, I was mostly trying to get across the size of the problem and the almost impossible task of finding cuts that do not slice into key frontline services. (I shall follow up on your suggested links.)

The UK needs to find £175bn+ in cuts. The total public debt is heading towards £1 trillion, plus there's £1.5 trillion in private debt. Add to this Mandelson says we need to find £500bn for a 'state investment fund'. If we "double dip" these debts could get even larger.

Yet a poll in the Mirror today says that 50% of people believe that the deficit can be dealt with without any impact on the public services and 75% say dealing with inefficiency will do the trick!

I fear there are going to be a lot of VERY angry people on these islands of ours. It will be the little people that get hurt the most. In my view the anger should be directed to the bankers, casino capitalism and those who administer the system.

Stephanie may like to comment on this but - incredibly - very little has been done to ensure what happened to the global financial system won't happen again. When the next crash happens where will the funds come from to bail out the system?!

The Election is only 7 weeks and 2 days away, that's 51 days....bring it on

I think Brown will trip up during one of the 3 'TV Debates'

The accusation that the Conservatives are indecisive, have no policies etc are interesting, yet absolute garbage

Just think about the following

When George Osbourne made the IHT speech....who was only too pleased at the time to pinch the idea? No talk of helping rich people then?

Who was it that could only be described as toadying to the City....telling them how wonderful they were...it couldn't be ...could it?

Who said Labour Investment versus Tory cuts.......when there was no investment, it is purely spending, spending money the Government didn't have, whilst trying to fiddle the cycle so that he could hide the fact he had not kept to his so called golden-rule

PFI...what a con...whilst accusing the Conservatives of wanting to privatise the NHS (when this has never been even considered) when we now pay 4 or 5 times more for each hospital than we should

3 times the funding into the NHS....£26bn wasted on the doomed NHS IT ..the list truly is endless

I would like someone on here, who thinks that all of the things I mention, and the other posts mention, are just 'Tory lies' and that Gordon Brown has done a good job to just tell me what evidence there is of that?

Unemployment will go up significantly in coming months

To whoever said they remembered what it was like under the last Conservative Government, then I hope you recall what it was like under the last Labour Government

We nearly went bust then too, 3 day weeks, etc, this country was a joke internationally

Strikes all over the place, the winter of discontent etc, unburied corpses, rubbish mountains...

Now, with the end of the Labour Government imminent, we are virtually back there again

There is a reason Labour had never won 3 terms before......Sadly we now pay the price

£500billion of debt....too much spent on the welfare state...which is wasted

I have been saying for years, raise the tax threshold to £10K or £12K, and have one rate of income tax...we should be spending less money on unnecessary rubbish, so that the things that really matter can be done properly

Why do the government spend our money advertising on TV to get people to stop smoking?

Why not put the telephone number to give up smoking on the cigarette packet?

Why do I get loads of adverts about STD/contraception on my TV?

More money wasted...the young people who need to see the adverts aren't watching the damn TV!!!!!!!

£170billion sounds a lot....well it is really, although if there was the collective will to reduce it to zero in 3 or 4 years maximum, it could be done

I prefer(as I have posted before) a 10% pay cut across the public sector, with no exceptions, other than the armed forces

No job cuts in the next 12 months, whilst the analysis can be done to see what can be saved, and if everyone in the public sector realised the mess we were in, maybe they would see the wood from the trees

There are loads of things that can be done to cut the cost without cutting the service

Most of us have had to make economies of one sort or another, I am sure...So why should the government think that with our money, they should be exempted from this?

As for growth...I am not sure I have seen anyone believe that we will get growth of 3.5% this year...so Darling's figures in the Budget will be interesting

He knows he will be gone even if Labour win, which I think won't happen, so will he take this chance to extract revenge on Brown, a la Howe?


It was always going to end in tears......

#53
"When the next crash happens where will the funds come from to bail out the system?!"

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

Next time there will be no bailout. As for this one I am using my opt out clause.

I expect many people have trouble comprehending debts of billions and trillions of pounds. If the figures could be given per head of population, that would be far easier to understand. Then if the Labour policy could be related to a national debt of say £30,000 per person and Conservative policy to £25,000 per person or whatever then we would all have a clearer idea of the real impact of their policies.

#54
"I think Brown will trip up during one of the 3 'TV Debates'"

Do you mean literaly like Kinnock on the beach.

The government's deficit reduction is based on expectations for GDP growth that were last announced in the autumn pre-budget report.

They are:
2010-11 = 2%
2011-12 = 3.25%
2012-13 = 3.25%
2013-14 = 3.25%
2014-15 = 3.25%

Now, what do you think produced these numbers?

1. The Treasury have some very talented economists, who having analysed everything possible, and using sophisticated modelling software, generated the most accurate forecast possible.

2. Alistair Darling only had the 2010-11 figure and needed to generate the next four years. So he thought of a number that sounded good (greater than 2%, less than 4%), sounded like it was scientifically generated (rounded to a quarter of a percent), and then cut and paste the number for the 4 years.

???

As Stephanie points out above, every 1% GDP accounts for about £15Bn, so reducing these growth figures by as little as 1% really does blow everything all the political parties are saying out the water... as this alone is equivalent to raising VAT to 21%.

Why aren't we focussing on why we are in such a mess ? It's almost as if the spin doctors are dictating the scripts for media journalists instead of journalists doing their own research and publishing their own ,validated, opinions. The Labour response seems to exist completely of name calling and implying doom and despair if anyone but Labour is running the economy but what is their record to date ? In desperation the media are concentrating on what the Conservatives will do as if they are being told what to write by spin doctors.Doesn't anyone think for themselves in the media ?

#54
"The Election is only 7 weeks and 2 days away, that's 51 days....bring it on"

Why does everyone reckon it will be May 6.

It does not need to be held until June 3, this will allow for the first revisions on Q1 GDP; there seems to be a tendency for GDP to be fiddled, sorry, revised upwards.

All these self-proclaimed economic experts who post here advocating massive public sector pay cuts should watch their backs. Why should public sector workers shoulder the burden of rescuing failing banks? The suggestion of 20% pay cuts by some people is idiotic, to put it midly. If the government tried that it would face non-stop strikes across the entire public sector, and all the mess that would cause. The only way to reduce th deficit is by raising tax - there is no other way. VAT will have to be imposed on food and books/newspapers, the 50% rate of income tax will have to replace the 40% rate, the basic rate will need to rise to 30%. This is what needs to be done. Not for decades, just for some years, until the economy has recovered. It can be done and it needs to be done.

The first party to promise to scrap Trident, the National ID data base, the many other data bases to record and regulate our behaviour...and so on...will immediately demonstrate a commitment to democracy and sensible economic behaviour...and just might be worth voting for.

As for those that think the answer is to cut public employees pay by 20%..or by that many jobs...lets hope this isn't the level of intellectual thinking in any of the main political parties.....the fabric of this society is fragile enough as it is.

"Currently, half of all civil servants earn £20K or less. One in five earn less than £15K. Any cuts to these low paid workers will be made up by benefits such as family tax credit so there will be no savings.
Recently the MoD shaved off £3.5K from the E1 grades pay scale, this amounts to a reduction of around 15%. However, more senior grades avoided any cuts to their payscales.
The civil service only make up about 10% of the public sector and they have by far, the worst levels of pay. Tinkering with their salaries won't make much difference so you will need to start looking at cuts in the other 90% of the public sector who have higher levels of remuneration.
Perhaps it's time to ask for a rebate from the EU. After all, when the auditors last looked, they couldn't say where all the money had gone."

All true. And the idea of exempting the armed forces from pay freezes is sentimental but plainly moronic. Part of the public sector pay problem lies in that immovable behemoth, the NHS. Blair's policy of showering doctors and dentists with massive pay rises certainly pleased the BMA and its members but did nothing to improve medical care. I would like these highly paid 'white coat' wearers to take a 10% pay cut and be paid mainly on performance (meaning patient feedback), not simply wait for automatic pay rises on never ending pay scales. It is the NHS that needs pay discipline, not the civil service. Paying all clerical civil servants minimum wage won't cut the deficit by much.

#56
"Then if the Labour policy could be related to a national debt of say £30,000 per person and Conservative policy to £25,000 per person or whatever then we would all have a clearer idea of the real impact of their policies."

Trouble is polticians are addicted to lying; their ingenuity and the effort they put into that prime activity precludes any other activity.

We never learn from history, we cherry pick and leverage the bits we want to serve the purpose in hand. But history does repeat itself.

When 'bad things' happen we rationalise with hindsight - no surprise, that was bound to happen.

The social mix in this country is very different from 50 years ago. If things kick off and get ugly social tensions will escalate and be exploited.

It is not just about the deficit.

#2 >>A poll in the Mirror today suggests that 50% of people believe that the deficit can be dealt with without any impact on the public services. 75% say dealing with inefficiency will do the trick.

And 100% will vote the Page 3 girl in as the next PM !! Says it all !!

57

I realised that I had possibly not written that sentence very well when I re-read it...Would be funny if he did trip in both senses!

23 >>Smart borrowing is an answer ...

They said that 10 years ago and look where we are now !!

#58
"Now, what do you think produced these numbers?"

Probably magic mushrooms.

An economist or an accountant would be prudent and use the lower range.

Politicians not so, they need to underpin their schemes.

Is it not time to seperate economic management from politics.

Politicians can then concentrate on things they can handle like dog licences.

What a game. Politicians play around with things they dont understand, screw up big time, blame someone else, then retire to write a book or go on the after dinner speech circuit.

Ordinary Joes are still wondering what hit them 5 years later.

61

You miss the point

The mess we are in is down to Brown, not the bankers

Your suggestion of raising income tax from 25% to 30% is in itself a 20% rise?

Not quite sure what you are saying to be honest

I think those in the public sector have no idea what has been going on for the last 2 years

I personally feel a 10% pay cut, with no job losses is much better

Your tax suggestion clobbers private sector employees, who have already taken large salary cuts in many cases

Anyway, that's my view

62

We are broke...why do you not see that?

Nobody wants to make cuts...we just can't keep borrowing endlessly

£178,000,000,000 is quite a bit of money

That's how much more this government intends spending ABOVE tax revenues in just one tax year

I think you've had your knuckles rapped Stephanie, judging by your sad return to the government line. Hope it didn't hurt too much!

Couple of points..wasn't the 3 day week under Ted Heath because of miner's strikes, docker strikes, dustman strikes and steel worker strikes? I was very young at the time and had no idea how serious it was-lighting my way to bed with a candle/oil lamp seemed very exciting and quaintly old fashioned. When Labour got in after Ted Heath, the unions ran the country again, it took Maggie to break their stranglehold.

At least that's what I remember, but I could well be wrong as I was do young, and politics flew over my head a mile high!

Another thing is, why are the Europeans passing judgement on our fiscal policies? We aren't a Euro nation, and our finances are our own affair. Crikey, they can't even sort their own house! What a cheek!

And finally, since Alistair Darling relies on an over optimistic fantasy growth figure to balance his 'halving the deficit' mantra, it's a work of total fiction! The Conservatives cannot possibly know what they have to play with until they've seen the full accounts, not the summary. Who in the right mind promises to do anything without being in possession of the facts first?

Please go back to your unbiased reporting Stephanie. It becomes you more.

63

The idea of exempting the armed forces from pay cuts is moronic according to you? Sentimental?

What utter tripe

They are paid too little as it is, and we need to show them they are worthy of our respect, for what they do, and after the dreadful way this inept government has treated them

They are in my view, a special case

Clearly you don't think much of them

When I talk about a 10% pay-cut, I mean EVERY publicly funded employee, which includes dentists, doctors etc etc etc and MPs

41 >>If they do not emigate then I will covert to Islam and emigrate them and myself to an oil prducing nation - Norway! here I come!

Now !! Now !! Lets not get too drastic. The Church of Jesus Christ of the the Latter Day Saints will welcome you and ensure that you are taught the joys of having more than one wife !! They are also gaining a great many converts in the East, so you may be welcome to "join" them over there !!

#23
"Smart borrowing is an answer"

What is smart borrowing.

Is that where Darling borrows £142 bn and then rather than re-pay it denies all knowledge he ever borrowed it in the first place. 'Not me Guv, it was big tory boy who ran away.'

The only smart borrowing is too borrow as little as possible and spend it on socially useful projects.

maybe tax and regulate the way the USA is doing would be a very good idea halt the downturn in employment ease social burden on the NHS, we would all have a lot less to pay back and local councils would have another licencing revenue to fix the roads with. :)

#71 >>We aren't a Euro nation, and our finances are our own affair.

We are not a Euro nation but we are in the EU, hence Brussels thinks they can comment on out state of finance. However, some would say that we may be better off as "those little European off-shore islands" !!

Stephanie, you even missed an obvious one - 1/3 of a dinner is a Dog's Dinner. Which also prompts me to remind you all of another "Now you see it, now you don't" - Canine insurance.
The Conservatives, as suggested regarding impending election, have to keep everything close to their chest. Whether they have a cunning plan or not! Ali D will not make any significant changes in his pre-election Budget.
As regards figures - a 40% cut in public spending would just about balance the books providing the revenues remain the same. As unemployment and part-time working is rising so will the black economy, regardless of how many cheque books we eliminate. One step nearer to eliminating cash! Tax and VAT increases only encourage this. So I'm opting for a Black as opposed to Brown economy.
I await forthcoming variations of "When the going gets tough, the tough get going" and "The Internet changes everything" and "Change..." etc. After all, the Hustings cometh.
One prediction I'll take bets on - Sun readers will be told to vote Conservative.

I believe that all the EU is saying can be boiled down to the Macawber Principle - "Income - £1, expenditure - £1 0s 6d; result - unhappiness" !!

The "7 lean years" is upon us and any unproductive demands on the ever-shrinking pie will stretch those years even more. We simply cannot afford the level and cost of the Public Sector as it is and any attempt to "tough it out" will reduce Britain to a wilderness that's ripe for raids by modern-day vikings !!

#77 >>One prediction I'll take bets on - Sun readers will be told to vote Conservative.

No, they won't !! They'll put up their own Page 3 girl to challenge the Mirror's for PM !!

As is obvious, I only buy high-brow newspapers (mainly for the pretty pictures) !!

In my defence I did not "advocate" any cuts; certainly not 20% cuts to public sector pay. I merely provided a list of possible cuts that our politicians might end up discussing.

Yes, one of them was offering current or new public sector workers 0.8 contracts, i.e. a 4 day week. Thereby keeping people off the dole (perhaps even slightly expanding employment). Yes, it would hit low waged public sector workers hard, though tax credits would partly mitigate the pain for some. The politicians will reject this idea as politically impossible, so it’s more likely it will be mass redundancies or wage reductions via frozen pay and inflation.

Someone mentioned tax rises as the answer, but the rises would have to be enormous to make up for a £175bn hole. I can’t believe they’ll be more than a part of the answer; perhaps a 20% general VAT rate and 5% of VAT on food and a new top rate 50% income tax rate.

I fear the public are not prepared. I was quite shocked by that Daily Mirror poll; it seems that 75% of people have little idea what's about to hit these islands and their lives. How will they react after "10 years of boom"? Not well, I imagine. If the global financial system collapses again (not impossible) all these calculations will be so much tumble weed; there is no more money for bail outs.

Please read. This is a call for my understanding.

I wasn't born by the 'Winter of our discontent' but hearing about the 3 day week and 'you've never had it so good' (I had no time line as a child, just sound bites) I thought wow, only working 3 days a week is better than school.

For, nearly, the past two years I have learnt most everything I know about economics (I thought I grasped a bit) on this blog, from your comments the links and my own searching. I thank you all

To me the debt and the deficit are unreal figures I just can't comprehend (I saw the numbers board on Wall Street (on 'Trading Places' on video in the mid 80') rapidly advancing, my dad said 'that was America's debt' I couldn't comprehend. The leading Superpower in debt!

Since then I have kept an untrained but informed and accurate eye on goings on. In 2002 I was reading about a London first time buyers going for 7x mortgage for a shabby flat. This I felt was going to end in tears. In June 2004 (as some has found and posted recently) when I was still a Radio 1 listener, their news reported as a headline that Britons personally now owed 1 trillion pound. This I concluded was unsustainable. It seemed like only a few months after that they reported £1.3 tr was indebted. I have my own feelings about how this will end, but some on here are arguing sense and offering hope.

To my friends I stated my 'feelings' (based on house prices, released figures, numbers of people shopping and my general ability to spend given my current fiscal position) on the forthcoming economic disaster and my feelings were correct. My feelings on last December's GDP output were correct 'less than the experts predicted'. And then the most recent GDP out figures again I 'felt' correctly as + the smallest possible. They have of course been raised upwards.

Kevinb ask recently what for April? Before April, my two pence worth I think they will remain the same at +0.3. For April 0%.

I now forget what I was going ask. Oh yes, can any political party lead us out of this? - Rubbish question.

My question is this. Will we get out of this?

We don't have an economic problem, we have a political problem.

I have a £200k home that would cost £80k to build. That remaining £120k is the cost of land with planning permission. It works out to be 18 years of repayments on a 25 year mortgage.

In other areas planning permission can be much more expensive. 4-6 times the cost of building and land.

Think about the lifestyle you and everyone you know would have if paying off the mortgage took 4-7 years instead of 25.

Business faces this and many other costly regs and rules from govt. Many jobs and industries are priced out of existence, others can hardly turn a profit.

Surely in making law parliament and the administration should balance cost and benefit. Failure to do that indicates our current arrangements are not fit for purpose.

Morning Stephanie,
nice political piece here.
However, nobody is listening to the economies of truth from either side!
Nobody cares what they say because it hasn't affected them personally (yet).
We are all sleepwalking through this financial crisis, just looking to next week, not next 5 years.
My biggest fear is that the main voters who will decide the Government colour for the next 5 years are blissfully ignorant of the scale and the depth of this problem. They will vote the same way as they always have and we will have another Labour goverment for a few more years. It makes no difference what we in the South do, it's the marginals in the Midlands and the North who will decide the next Government and I think that all of the contributors to this blog know in their heart of hearts that we will receive another Labour government.
Opposition parties do not win elections in the UK only Government parties lose the election (usually because of a recent scandal).

Peter Mandelson couldn't have put it any better...on message once again Stephanie well done

Anyone reading this blog would think the Tories are responsible for the financial calamity we are facing. Incredible stuff from the incredible BBC. How about some analysis of the party which got us into this mess?. Are they blameless in BBC land?.

Joke of the century - https://news.bbc.co.uk/1/hi/uk/8567455.stm

>>The UK Foreign Secretary David Miliband has called on China to build an economy which is not only more efficient but also more stable and just.

The sheer arrogance and temerity of this David "Millibrain", whose own government made one of the biggest hashes of their own economy !!

Perhaps he'd also want to teach the Germans and Japanese how to export their products world-wide and get lots of foreign exchange !!

And speaking of arrogance - https://news.bbc.co.uk/1/hi/sci/tech/8571347.stm

>>"[There was] less arrogance than in previous years - we have, I think, moved beyond the G8 world to the G20 world where more countries are involved - but [there was] still arrogance and it could have been much better handled by the rich countries," he said.

>>The EU limited its room for manoeuvrings, he said, because ***too many of the leading political figures wanted to demonstrate that they were leading***.

In other words, Our Glorious Leader wanted to be able to say, "I have saved the world !!" again but his "igor", Ed "Millibrain", failed to get any one to listen to him. So "Millibrain" threw a temper tantrum and squeaked about China scuppering the Copenhagen Meeting just because *he* ("Millibrain") didn't get what *HE* (Our Glorious Leader) wanted !!

It appears that delusions of grandeur is infectious !! The Brothers Millibrain !! That would sound like a comedy duo if it wasn't so sad !!

Yet another spin exposed for what it is. Yet another lie to add to the list. And they want to be re-elected ??

https://news.bbc.co.uk/1/hi/business/8571456.stm

Will we see the end of another monolithic lame duck ?? Once BA flights are blocked from US airports, Sir Richard will be dancing on the rooftops !! Remember Virgin *ATLANTIC* ??

Could it be that BA will soon join its mate, British Leyland in that Great Lame-duck Pond in the Sky ??

Cuts ?? Who needs cuts when Unite is determined to destroy what's left of the service economy ??

https://news.bbc.co.uk/1/hi/world/europe/8569474.stm

>>Officials in northern France are making their mark on London's 2012 Olympics by rebranding the Pas de Calais region as part of *southern England*.

>>Their aim is to offer foreign sporting teams training facilities in France, at cheaper prices than in the UK.

Well, it *WAS* English not that long ago !! And it's only 40 or so miles to London, admittedly with a bit of water to cross !! Smart chaps, these Frenchies !! :-)

A possible solution re personal debt would be to use state diktat to cancel it (mortgages, cards, the lot).

There is the moral hazard argument, but Brown has already shown the way on that one.

This would free personal resources and help growth.

The banks would have huge writedowns but would have the satisfaction of taking their share of the pain.

I was puzzled by the sudden uptake in the idea that we can't cut the deficit because it might negatively affect the recovery. Puzzled until I read this in Freakonomics by Levitt and Dubner:

"It was JK Galbraith, the hyerliterate economic sage, who coined the phrase "conventional wisdom". He did not consider it a compliment. "We associate truth with convenience" he wrote, "with what most closely accords with self-interest and personal well-being or promises best to avoid awkward effort or unwelcome dislocation of life. We also find highly acceptable what contributes most to self-esteem". Economic and social behaviours, Galbraith continued, "are complex, and to comprehend their character is mentally tiring. Therefore we adhere, as though to a raft, to those ideas which represent our understanding".

Levitt and Dubner continue: "So the conventional wisdom in Galbraith's view must be simple, convenient, comfortable and conforting - though not necessarily true".

#80
"I was quite shocked by that Daily Mirror poll; it seems that 75% of people have little idea what's about to hit these islands and their lives."

How many so called experts or politicians actually understand the full ramifications.

They will rationalise after the event, not before.

Steph, your article today does read a bit like an advertisement for Gordon. Then again, I dread to even imagine what would happen to this country with the Tories. I still find it lacks balance. Has Labour promised the BBC to retain the license at its present level?

The Tories are using the media to scare people away from a hung parliament; perhaps that's exactly what we need, as long as it leads to a coalition and not a second election.

Well it didn't take long to call your bluff did it Stephanie?

A return to labour dogma - just what was needed given the latest polls, eh?

And judging by a number ofd contributions on here there is still a sizeable chunk of people who have actually no clue and have swallowed the government line at every turn.

Thanks to Kb #54 and others for pinting out some deficiency in others' thinking.

Truth is the government can no longer hide their serious shortcomings. Another classic Mandelson tactic of misdirection by not asking any questions of the government relayed in this blog comment.

Lets not forget, the PS spending review has been postponed which means we don't actually know the true figures that exist at the moment and its not been commented on (surprise, surprise).

For all those who think the current government is ok - would you please emigrate (and not come back). Do us all a favour left here to pick up the pieces.....

Lets see what level of detail is provided on cutting the deficit is provided by Darling on the 24th. It is all very well saying you are going to cut the deficit by x%, but if this is based on overly optimistic growth assumptions then the markets are going to hammer GILTs. Their fiscal stability pact of halving the deficit is just another (golden?) rule to be broken with no sanctions (apart from those applied by the markets).

If Labour are not going to provide details on reducing the deficit and/or be held to account for this before the election, I don't understand how or why the conservatives should be.

I don't think it matters whether the reds or the blues win.

Either one of them will end up having to print more money to fill the debt hole.

More QE will be announced soon, and sterling will slide further.

And if I had any money I'd bet on it.

This situation is a difficult one for our politicians where they do not want to admit the scale of the spending cuts and tax rises that will be required to achieve something like the Maastricht Treaty objectives. This is just another example of the moral hazard argument that is a theme on notayesmanseconomics, there are ones for the UK as well as Europe and Greece.
Although I feel that this is true of most of the main parties I feel that you have failed to point out that it is Labour who are in government and are responsible for our current situation.

#89

..........at the end of the day there is only one component too big to fail..the PEOPLE.

Does anyone actually trust this UK government with government numbers, figures, statistics, spending plans?

If the Tories succeed in the general election they will find an absolute mess and mountain of lies regarding UK government finances.

Patience is a virtue and Tories and Lib Dems do not know the true state of government finances because the government is ...surprise surprise... bending, twisting, manipulating, fudging the figures... on the direct instructions of 'Goondog Trillionaire' (or is it 'Goondog Quadrillionaire'?).

#86
"The sheer arrogance and temerity of this David "Millibrain", whose own government made one of the biggest hashes of their own economy !! "

Arrogance is a national characteristic. They still think sterling has all the swagger of days of Empire rather than the truth - a sad little niche currency.

The number of peoople on this board who would rather part company with their own genitals than admit the EU or the Germans can teach them anything at all is staggering.

Still waiting for someone to give me a coherent argument as to why Gordon Brown has been successful, with examples/evidence etc

Don't be shy now