Public sector/benefits to be savaged FT article

donaldtramp

I was even more disgusted about the mess Clown has gor our country in after reading this article:

http://www.ft.com/cms/s/0/7ab01302-3b36-11de-ba91-00144feabdc0.html?nclick_check=1

<H2>Tackling Britain’s fiscal debacle

Published: May 7 2009 19:45 | Last updated: May 7 2009 19:45

In 2010, according to the European Commission’s latest forecasts, the UK government will be spending 52.4 per cent of gross domestic product and receiving just 38.7 per cent of GDP in revenue. It will, as a result, have a gigantic general government deficit of 13.8 per cent of GDP. Worse, the UK’s cyclically-adjusted deficit will be 12.2 per cent of GDP. These are numbers one would expect in a time of war.
Only five of the 27 members of the European Union are forecast to have a higher share of public spending in GDP than the UK in 2010: Sweden (57.3 per cent); Denmark (57 per cent); France (56.4 per cent); Finland (54.3 per cent); and Belgium (also 54.3 per cent). But only six EU members will have a lower revenue share than the UK: Romania (33.3 per cent); Ireland (33.5 per cent); Slovakia (34.1 per cent); Lithuania (34.8 per cent); Latvia (36.2 per cent); and Spain (37.3 per cent). Just one member will have a bigger deficit than the UK: Ireland, on 15.6 per cent.
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The forecast deterioration in the UK government’s fiscal balance, of 11.1 per cent of GDP between 2007 and 2010, is also the fourth largest in the EU, after Ireland (15.8 per cent), Latvia (13.2 per cent) and Spain (12.0 per cent). How did this fiscal debacle occur? The answer lies far more in spending, forecast to jump by an astounding 8.4 per cent of GDP between 2007 and 2010, than revenue, forecast to shrink by a more modest 2.6 per cent of GDP.
What makes the UK’s rise in government spending as a share of GDP puzzling is that the decline in GDP itself is not exceptional. The Commission forecasts the decline of UK GDP at 3.8 per cent this year, slightly less than for the EU and the eurozone, both of whose economies are expected to shrink by 4 per cent. In 2010, the UK economy is forecast to grow by 0.1 per cent, again slightly better than the EU and the eurozone, both on -0.1 per cent.
The painful conclusion must be that the UK has lost control over public spending. It has to get it back again. Whether they like it or not, UK voters will have to elect a government willing to achieve this end. Government solvency is at stake. The next government will, as a result, find itself in a war of attrition with its own servants. If David Cameron leads the Conservatives to victory, as many expect, he will have to be tougher than Margaret Thatcher, elected prime minister three decades ago.
It is possible, of course, that a powerful recovery will do the trick. In the Budget, the Treasury concluded that the UK had suffered a permanent loss of 5 per cent of GDP as a result of the crisis, while trend growth was 2¾ per cent. The Treasury also assumes the output gap – a measure of excess capacity – will peak at 5 per cent of GDP, then disappear.
It would be highly irresponsible to plan the public finances on the assumption that the economy will soon return to the level and assumed growth of the pre-crisis era. Indeed, I share the view advanced by Robert Chote, director of the Institute for Fiscal Studies, in a recent study, that the UK had an unsustainable boom. A part of the economy was an illusion.
It is possible to propose that, since the British now spend like the French, they should pay taxes like the French. But that would mean a huge increase in taxation – perhaps of as much as 10 per cent of GDP. While some increase in tax rates will be inescapable, to bring the ratio back to where it was before the crisis, the British are not going to accept a vast increase in the tax burden.
Nor is it reasonable to assume that such huge deficits can be run for long without risking big jumps in interest rates. The Treasury forecasts a rise in public sector net debt from 36.5 per cent of GDP in 2007-08 to 76.2 per cent in 2013-14. It is likely to end up higher. A prudent government would not only wish to halt this rise but also to reverse it, to renew the fiscal flexibility it is using up.
Government spending will have to be cut down to size. According to the IFS, the government has pencilled in the tightest spending plans over a seven-year period since April 1985 to March 1992: a 0.1 per cent annual average real increase from 2011-12 to 2013-14, followed by a possible 0.5 per cent annual real increase in current spending for a further four years. This is the least that has to be achieved, given the dire starting position. In effect, government spending may have to be stagnant in real terms for almost two successive parliaments.
That is what happens to a country that has not only spent freely, but now finds itself far poorer than it had hoped. It is clear what this must mean: a sustained freeze on the pay bill; decentralised pay bargaining; employee contributions to public pensions; and a pruning of benefits. It is obvious, too, that this will mean massive and painful conflict between governments and public workers.
Hitherto, the vastly increased levels of government borrowing have concealed the true extent of this crisis. But these deficits will have to be eliminated. The bulk of the action will have to come from control over public spending. The next prime minister is likely to end up quite as hated as Margaret Thatcher was. But, as she liked to say, there is no alternative. The unsustainable cannot endure. If UK policymakers do not take the needed decisions willingly, markets will force them upon them.

</H2>

Clown and his bunch of self serving expenses claiming idiots must leave NOW!
They have destroyed our country.
The public sector and benefit recipients cannot blame whoever wins the next election for cuts in their money, the problem has been caused by the current government. No-one else.

Wookster

Welfare spending comes to £190Bn of the government's £670bn budget. That's about 30%.

Our welfare system is desperately broken and needs repair. As I see it, there is something desperately wrong with being able to claim welfare for your entire life, doing nothing in return for the good of the community/ state.

donaldtramp

There is simply no other choice.
Benefits claimants will complain that they can only afford the one car and one plasma TV under the new regime. Public sector workers will complain that they are paying in 6% and no longer receiving 23% from the government as guarantees to their final salary bullet proof pension that robs from everyone who isn't in public sector employment.

But looking at what the mess Brown has left us with...
Was it fair to dole all of that money out in the first place? Was it fair to the taxpayer and the private sector in the first place?
Was it fair to create a "but I'm entitled to it" money for nothing culture?
His ideas of fairness has been to take from the hardworking and dish the money out willy nilly on wasters.
When has given people money for nothing EVER produced a better and more productive society?

Well done Clown. You've screwed our country up for the next few decades. I can't wait for the next election. He will go down as the most unpopular and useless prime minister Britain has ever had. A typical end to a Labour stint in Government, the country on its knees...

Dithering_Dad

Got to agree with everything the above have said

We're knackered because nu-labour didn't put anything away for a rainy day, didn't fix the leaky roof while the sun was shining and built a house of straw while they should have been building one from bricks. etc. etc.

marklv

I don't think there is too much room for spending cuts. One good idea would be to cancel all these hugely expensive IT projects that the government started - NHS, defence, etc. Get rid of the bloody lot and you'll save billions.

marklv

donaldtramp wrote: »

There is simply no other choice.
Benefits claimants will complain that they can only afford the one car and one plasma TV under the new regime. Public sector workers will complain that they are paying in 6% and no longer receiving 23% from the government as guarantees to their final salary bullet proof pension that robs from everyone who isn't in public sector employment.

But looking at what the mess Brown has left us with...
Was it fair to dole all of that money out in the first place? Was it fair to the taxpayer and the private sector in the first place?
Was it fair to create a "but I'm entitled to it" money for nothing culture?
His ideas of fairness has been to take from the hardworking and dish the money out willy nilly on wasters.
When has given people money for nothing EVER produced a better and more productive society?

Well done Clown. You've screwed our country up for the next few decades. I can't wait for the next election. He will go down as the most unpopular and useless prime minister Britain has ever had. A typical end to a Labour stint in Government, the country on its knees...

Actually, a single person with no children can only claim £60 a week in dole - one of the lowest rates in the Western world. It's the people (chavs) who have loads of kids who get showered with taxpayer money and large detached council houses in which to house their horrible brats.

marklv

Wookster wrote: »

Welfare spending comes to £190Bn of the government's £670bn budget. That's about 30%.

Our welfare system is desperately broken and needs repair. As I see it, there is something desperately wrong with being able to claim welfare for your entire life, doing nothing in return for the good of the community/ state.

The problem is that too much money is spent on the wrong people. We throw buckets of cash at huge families of idle individuals, and thus encourage the parasites to breed more to get more cash. While some poor !!!!!! with no dependent kids who got the chop from his last job gets a pittance of £60 a week to live on.

donaldtramp

No room for spending cuts? I disagree entirely.
The public sector workforce has mushroomed under Labours governance.

There are hundreds of thousands of people employed in the public sector that weren't there before they came to power. These jobs(and associated pensions) will HAVE to be culled, read the article.
I agree with you totally about the nonsensical IT projects, ID cards etc. They must be dropped immediately.

Actually, a single person with no children can only claim £60 a week in dole - one of the lowest rates in the Western world. It's the people (chavs) who have loads of kids who get showered with taxpayer money and large detached council houses in which to house their horrible brats.

I agree with you about the families who are breeding for a living on the state. They are not going to have a nice time of it in the coming decade or so and I have absolutely no sympathy at all.
A work ethic is going to have to be forced on this country and the layabouts are going to be punished financially into complying. The country has no option.
We can't afford to carry them any more, simple.

PasturesNew

Essential: Street cleaning
Non-essential: Diversity coordinators for the 'grass verges on every street' project

Essential: Housing help
Non-essential: Department for translation of obscure documents nobody reads into 120 equally obscure languages (bound to be something like that)

And similar .... they made jobs up for years.

CLAPTON

My memory recalls (possibily falsely)

Conservatives
-were committed until very recently to meeting Labour spending plans
-were to continue expanding the state although at a lower rate than natural growth in the economy
-were fully committed to the 'light' touch regulation in the financial regulation sector
-were considering deregulation of the mortgage sector completely.
-didn't (as far as I recall) argue for steep (or any ) increases in interest rates or any other action to stop the housing bubble.
-argued that Brown pension raid has ruined the pension industry but doesn't intend reversing it.
-think that 50% tax on 150k will ruin the country but it wont be a high priority to reverse it.
-would have bailed out the banks the same as Brown
-would have enable printing money too just like Brown

so Brown may be a clown but what does it say about the others?

donaldtramp

CLAPTON wrote: »

My memory recalls (possibily falsely)

Conservatives
-were committed until very recently to meeting Labour spending plans
-were to continue expanding the state although at a lower rate than natural growth in the economy
-were fully committed to the 'light' touch regulation in the financial regulation sector
-were considering deregulation of the mortgage sector completely.
-didn't (as far as I recall) argue for steep (or any ) increases in interest rates or any other action to stop the housing bubble.
-argued that Brown pension raid has ruined the pension industry but doesn't intend reversing it.
-think that 50% tax on 150k will ruin the country but it wont be a high priority to reverse it.
-would have bailed out the banks the same as Brown
-would have enable printing money too just like Brown

so Brown may be a clown but what does it say about the others?

The conservatives are being quite rightly cagey about what will have to happen in the next government. Clown just spouts about their wish to cut public sector spending every time he stands up. I'm sick of hearing it.
No opposition party will stand up and say they are going to cut spending. The thing is there is now no choice. Clown has just made the debt even bigger by failing to tackle it.
Do you think public sector spending would have been allowed to spiral out of control under a conservative government?
Do you think the socail security spending would have allowed to go anywhere near the 1/3 of the entire budget as it has under Brown?
Do you think they would have allowed the public sector pensions liabilities to be approaching £1Trillion?
Do you think they would have expanded the state in such a way that it now controls massive sections of your life?
Do you think they would have employed an extra 100,000 or so non productive civil servants as labour has?
They can't go back on Browns pension grab that money is long frittered away.
This is what happens under a socialist government, you promise everything to everyone and then panic as you realise that someone has to pay the bills.
Remember Brown was chancellor ALL through this massive bubble. He was at the helm. And remember those infamous words,

"There will be no return to boom and bust"

Well you were correct Clown. It was boom and CATASTROPHE!!