[i.munro]

This is a common statement to read but isn't really true. Consider 1990s Canada, Sweden, etc. And though I don't want to get dragged into the politics of this, people who oppose deficit-cutting really need to propose a reasoned alternative.

Rather I'd say the first step should be for the proponents of cuts to show that they will result in a cut to the deficit. The Thatcher experience shows that throwing a lot of people out of work results in increased welfare spending & reduced tax take. Yes there is the canadian experience but they did their cutting during a world economic upswing so those who lost jobs had somewhere to go.

[seankenny]

All these things are obvious with hindsight but were still steps into the unknown at the time. Actually we are in a world economic upswing right now ...
[/quote]

In China or India I presume, rather than the EU which buys the bulk of our exports?

[lagerstarfish]

Perhaps citizenship training with an exam for all over 18s who want to vote or claim benefits?

Innit?

Getting dangerously close to my Luton plan there lagers. 

I'm all for The Luton Solution.

[Sloper]

Oh and Sloper, saying "I work in the private sector so I'm not directly affected" before predicting a 3 quarter recession which will have been directly caused by Tory economic policy is what it looks like. Contradictory nonsense.

Sorry but if there is a second round of the recession it won't be the Tory policies that have caused it it will be the fact that we postponed the pain of the first bout via quantitative easing and not delaing with the fundamental imbalance in our economy and the structural flaws . . . . or if you like (per Gordon Brown and the rest of the New Labour apologist morons) it was an international recession started in America and nothing to do with the Tory policies

I would suggest that government policies take a minimum of three years to have a direct effect if at all. 

What happens over the next two years is not going to be the result of Tory policy.  The Tory cuts are within 1% of what Al 'the Badger' Darling was proposing and Al Jolson supported.

[slackline]

I found the fact that Vodafone have had a £6.9bn tax bill scrapped outrageous.

Except that isn't a fact. The case had been going on for something like 13 years and it was never certain that the whole amount could be collected. A deal was done whereby HMRC received something like £1.4bn. I'm not saying it was right (far from it) but this "£6bn written off" statement is just headline grabbing stuff.

While I agree with a lot of Hari's sentiments, he has a tendency to throw figures about as FACT when they're not. Obviously I agree that big companies and rich individuals should be taxed properly (I'm always going on about it) but it's not that easy / simple.

Seems its tax on a £180bn purchase of a german company that Vodafone bought that is the source of the debt (they tried to set up a subsiduary company in Luxembourg to avoid paying UK tax, but it was ruled by law, and HMRC agreed, that they were liable to pay the tax).

I'm sure there's more to it though.

[Jaspersharpe]

Sorry but if there is a second round of the recession it won't be the Tory policies that have caused it it will be the fact that we postponed the pain of the first bout via quantitative easing and not delaing with the fundamental imbalance in our economy and the structural flaws . . . . or if you like (per Gordon Brown and the rest of the New Labour apologist morons) it was an international recession started in America and nothing to do with the Tory policies

I would suggest that government policies take a minimum of three years to have a direct effect if at all. 

What happens over the next two years is not going to be the result of Tory policy.  The Tory cuts are within 1% of what Al 'the Badger' Darling was proposing and Al Jolson supported.

 

So, in short, don't blame the Tories for the cuts, don't blame them for the consequences of the cuts and wait three years before blaming them for anything.



Pull the other one, it's got a Big Society on it. You dick.

[Sloper]

Jasper, do you really think that the government can whistle and the economy or society will respond like a well trained gun dog?

Macro economic policy changes take time to work through.  Remember when Thatcher abolished foreign currency controls in 1979, there wasn't an immediate exodus of retirees to Spain, that took another couple of decades.

When the top rate of cgt came down from 98% there wasn't a sudden surge of individual investors building a portfolio for their retirement.

The cuts were coming regardless as to whether Labour were returned or not, yiou will remember Alistair Darling saying that they would be deeper than Thatcher's cuts, the only issue of difference is what is cut and how rather than the extent of the cuts.

As for the big society thing, that's a pile of poo and we both know it.

[slackline]

Musing on my cycle to work this morning I wondered, how many people (as a proportion of the total population) fall into the various categories...

a) Totally reliant on the state for their existence (including the elderly in state care).
b) Rely on state support to supplement their existence (without which they would be below some arbitrary threshold for 'poverty')
c) Rely on state support to supplement their existence (without which they would not be below some arbitrary threshold for 'poverty')
d) Don't rely on state support at all.

Its just that there is a lot of talk about cuts X, Y and Z hitting the poorest hardest, but I realised I've no idea of exactly how many people this will actually affect (and haven't the time to look it up).  For example, I've a friend who was made redundant two years ago and has opted not to work as he and his partner have two small kids.  His partner lectures at Shef Uni and it was cheaper for him to stay at home and look after kids than try and find work and pay for child care.  All the Child Benefit that they got was going straight into a savings account for each kid, with its withdrawal it simply means that the cash isn't being saved, no real difference to their life, so they fall into c).

Personally I fall into d) as I'm in receipt of zero state benefits, as do most of the people I know (most people don't have kids, may be a few people I know who do take benefits).  Out of your circle of friends how many will be affected by these cuts?

It stands out to me because a lot of headline inches are being given to "poorest hit hardest", but does the number of inches actually equate proportionally to the number who will be affected?

I'm fully aware of Indices of Multiple Deprivation (download data by Super Output Area linked from here), but they're composite measures that without providing the number of individuals in each area, and besides which its an average for an area.

[slackline]

I found the fact that Vodafone have had a £6.9bn tax bill scrapped outrageous.

Except that isn't a fact. The case had been going on for something like 13 years and it was never certain that the whole amount could be collected. A deal was done whereby HMRC received something like £1.4bn. I'm not saying it was right (far from it) but this "£6bn written off" statement is just headline grabbing stuff.

While I agree with a lot of Hari's sentiments, he has a tendency to throw figures about as FACT when they're not. Obviously I agree that big companies and rich individuals should be taxed properly (I'm always going on about it) but it's not that easy / simple.

Seems its tax on a £180bn purchase of a german company that Vodafone bought that is the source of the debt (they tried to set up a subsiduary company in Luxembourg to avoid paying UK tax, but it was ruled by law, and HMRC agreed, that they were liable to pay the tax).

I'm sure there's more to it though.

It worked once, lets try it again

[csurfleet]

I reckon its probably for me:
50%: D - working, not reliant kids.
30%: C - students, could probably survive on loans (are they getting benefits? I don't know the details never went to uni)
20%: B - 'Musicians' - would probably be forced get off their arses if you cut their housing benefit. What percentage of them is actually looking for a job and which are just saying they are is an unknown even to me though!

[philo]

people are right, the students do have some scope on the financial difficulty the country is in but do not think it will change their lives.  The one hour of citizenship they do have a week also contains all of the other stuff like sex ed / tutorial based content in my school. 
I feel the fatal floor within my school at least, is that the system has no basic measures of how the students "succeed" in these lessons.  Maybe we should be studying finance and things like law as compulsory for at least the 16-18 bracket.

[slackline]

I appreciate it is complex, but its not impossible to estimate (as long as it is borne in mind that its an estimate and not an exact number/analysis).

Besides, long gone are the days of a "job for life", most people will have been employed in several jobs by now, some of which may have been in the public sector, some in the private (myself included).  So the low-skilled leisure centre admin clerk will get a job somewhere else.   There may well be a throwback to such a culture in the public sector where people think they are sorted for life (some may even get a little blasé and be a bit lazy in their approach to work, I saw plenty of lazy people when I worked at the council part-time for a year).  But public sector isn't, or shouldn't be that different from the private sector it is after all still about getting value for money and if there is wasted resources then that waste should be removed, its in everyone's interests.

Factoring pensions in will have varying effects, some who are made unemployed from public sector now aren't going to sit on their laurels for 35 years waiting for their public sector pension to ripen, they're going to find gainful employment in the private sector and start a private pension.  Others will be closer to retirement and have less scope for this.  It also seems state pensions are to be revised too.

[slackline]

Yep, hence my use of "state pensions", although I should probably have separated it into a new paragraph. 

[tomtom]

Vaguely related (my head is thick with cold, so forgive me if already mentioned) but whats slipped under the radar is that this month public sector employee pension contributions have risen (whether or not that is fair enough is another debate) but his does relate to a 2-3% pay cut (on top of a pay freeze) on what people get in their pocket....

[john horscroft]

   Now then, at least three Nobel prize winning economists, including Joseph Stiglitz, no sandal wearer he, have taken issue with Georgie Porgie's austerity measures.  So, three Nobel laureats versus one slightly dim Eton boy made good.  No contest really...... 

[tomtom]

So, three Nobel laureats versus one slightly dim Eton boy made good.  No contest really...... 

Well ... as the Black Swan guy frequently points out, we don't need to be too deferential to winners of the economics Nobels. Ultimately economics is a bit of a pseudo-science.

Incidentally, as a practical experiment, find someone with a large credit card debt then suggest that they to go a bank, ask for additional borrowing of 10% of their salary each year for the foreseeable future then quote three Nobel laureats as the reason the bank shouldn't refuse ...

Big Dave from ideal home finance, who hangs around outside Cash Converters (down the road) - the fella with Mum and Dad lovingly tatooed on his knuckles - will readily agree to such a deal...

As long as your not Greece that is - then you'll have to go and see @lagerstarfish financial services...

[Sloper]

  Now then, at least three Nobel prize winning economists, including Joseph Stiglitz, no sandal wearer he, have taken issue with Georgie Porgie's austerity measures.  So, three Nobel laureats versus one slightly dim Eton boy made good.  No contest really...... 

John you let your prejudice get in the way of reason again, are you so bigotted about other things? (PS I think there were something like 35 eminent economist types who said Howe was wrong and he and Thatcher turned out to be correct).

PS Georgie was at 'oikey' St Pauls rather than up at Eton.

[john horscroft]

Fair cop thesiger, it's a proper pseudo-science - even I managed to get an a-level in it      However, school-boy error likening the country's fiscal position with an individual trying to get a loan off a bank  let's face it, the banks aren't lending to anyone as they try to de-leverage after their last fuck-up.  Meanwhile, interest rates are at a historical low, ie moneys cheap, we'll pay our debts off and, whatever Sloper says, we ain't Greece. 

As far as the great Slopes is concerned, well, that really is praise from Ceasar himself!  Accusing me of prejudice?  No just taking the piss fella.  I think it's your good self who lays himself open to charges of prejudice with your penchant for stereotypes of every kind, public sector workers, trades unionists, those reliant on benefits.  I couldn't give a toss which school Gideon went to - the fact is he's never done a proper job, knows nothing of the everday lives of those who stand to be worst affected by the cuts and hasn't the imagination to put himself in their shoes.  So there...... 

[john horscroft]

Some truth there fella, but I'm not arguing against the whole notion of debt reduction, just the speed, tactics and, dare i say it, the fairness of the whole exercise, (ducks)......

[superfurrymonkey]

What worries me is the lack of any real economic reform, I mean what's the point of getting our defecit under control is it just so we'll be in a better position to ride out the next economic storm caused by some new bubble whatever that's going to be, not to mention that economic growth is unsustainable vis a vis the environment and ever dwindling resources. 

[slackline]

What worries me is the lack of any real economic reform, I mean what's the point of getting our defecit under control is it just so we'll be in a better position to ride out the next economic storm caused by some new bubble whatever that's going to be, not to mention that economic growth is unsustainable vis a vis the environment and ever dwindling resources.

  A symptom no doubt of the capitalist society/free-trade.  Things can't always grow bigger and bigger and bigger, markets are just like gravity, what goes up, must come down (although I know nothing substantial about economics other than Adam Smith helped influence Darwin's formulation of evolution by natural selection).

[Jaspersharpe]

Not all economic growth has to involve utilising dwindling resources, trashing the environment or indeed, anything actually getting "bigger". The UK's online economy is likely to be the biggest area of economic growth that we have in the next few years (as an example).

[Sloper]

But John, how about someone just taking the piss out of someone because they're black, indian, gay etc etc would you call that just a bit of banter or evidence of some underlying prejudice of an unpleasant sort.

Labour and those on the left have been making class based snide remarks about the Tories for a few years now (I think the crewe & nantwich by election was the start), Labour and their fellow travellers have made attacks based on people's appearance (Anne Widdicombe) and things which to some had a whiff of anti-semitism (depicting Michael Howard as fagin) and in the current case misrepresenting a lib dem as 'the friend of the illegal immigrant'.

Now let's deal with the 'never done a proper day's work' aspect.  What do you think Tristram Hunt's real world experience is (other than being Lord Hunt's son and a new labour luvvie)? Or that woman who 'is off the telly' who scraped home in Geoff Hoon's old seat etc.

Now let's have a look at the nepotism, yeah I'm sure Ed & David Millband had real jobs and got selected on merit in open competitions, what about Dunwoody jnr who they tried to get into Crewe & Nantwhich or Tony Benn's grand daughted in Kent and countless more.

Do you know, you're not alone in this, and it may be uncomfortable for you to acknowledge it but you are prejudiced and biggoted against people because of their social background and where they went to school. As for my prejudices, I think you're rather misrepresenting my views as a means of denying your own. 

Anyway, I'm down at the Sheaf on Thursday and would gladly buy you a pint and discuss things in a more convenial fora. (the pint will of course be the product of exploiting the weakest members of society and what's more I will be evading the income on the profit of the exploitation).

[john horscroft]

Come on Sloper, be serious!  I’m probably the only person in the world who holds New Labour in greater contempt than you, so throwing Tristram Hunt at me is hardly going to rattle my cage is it?  As for http://www.gloria-de-piero.co.uk/biography.html at least she’d be a shoo in for a DFBWDP thread and even she has to be an improvement on Geoff ‘Buff’ Hoon!

As for public skool boys who revert to type and grind the faces of the poor beneath their Gieve’s and Hawk brogues, I reserve the right to take the piss.  Those who renounce educative advantage through wallet size and commit their lives to fighting inequality may be saved my withering gaze but Gideon and his ilk will be the first ones up against the barricades mate and that’s not prejudice, it’s just common sense.  Now, what about your tendency to generalise about public sector workers, trades unionists, benefit recipients eh, now that does smack of prejudice!  See you at the splendidly proletarian Sheaf for a pint you lackey......

[slackline]

"we're all in this together". says George Osborne

  Well if this investigation is accurate maybe he he should start paying some of the £1.6million in tax that he's dodging paying through "loop-holes"  

Dispatches : How the Rich Beat the Taxman