Budget 2010: EU calls for faster UK deficit cuts

Old_Slaphead

viscione wrote: »

Basically to sum this thread up

the conservatives will cut spending far too quickly when our economy is just barely coming out of recession, therefore prolonging the recession and increasing our debt sop we may be debt free by 2020 and wages will be similiar to what they are today.

Or

Labour will not increase spending but will keep spending and slowly cut the deficit over the next 4 years to ensure our economy stays in growth and we are out of debt by 2016, wages will be stronger and Britain will be a better more competitive country to live in.

Once again Labour gets my vote!

Of course you are entitled to your views but they're wrong.

No matter which party is in Government we will not be debt free by 2016, 2020 or whenever. Both main parties are only talking about reducing the annual budget deficit - the national debt will still continue to increase.

The only way that (on your premise) wages will be 'stronger' and the country more competitive is if the workers are much more productive and the government spending as a percentage of GDP is lower than now.
Labour's track record on these issues leaves a lot to be desired.

I don't have too high hopes for the other parties being much better at the task in hand. I think that we've just got to accept a much lower standard of living and poorer public services from now on.

Sir_Humphrey

Old_Slaphead wrote: »

I don't have too high hopes for the other parties being much better at the task in hand. I think that we've just got to accept a much lower standard of living and poorer public services from now on.

I think it is better characterised by a choice between having fewer consumer trinkets, or maintaining public services.

Politically, I would expect lower levels of private affluence to lead to greater support for public services. I have in mind The Affluent Society by J K Galbraith.

A reduction in the number of consumer trinkets bought would be a feature of rebalanced economy in any case, and is already starting with the reduction in the value of sterling. This is part of the process that is covered by the euphemism of a "rebalanced economy".

Kohoutek

Sir_Humphrey wrote: »

I think it is better characterised by a choice between having fewer consumer trinkets, or maintaining public services.

Are you joking? Consumer trinkets? We're a net energy importer, we're a net food importer, almost all clothes sold in this country are imported. I agree that we shouldn't miss all the rubbish made in China in the Argos catalogue, but I'm afraid we're much more dependant on imports for essentials than you suggest.

Sir_Humphrey

Kohoutek wrote: »

Are you joking? Consumer trinkets? We're a net energy importer, we're a net food importer, almost all clothes sold in this country are imported. I agree that we shouldn't miss all the rubbish made in China in the Argos catalogue, but I'm afraid we're much more dependant on imports for essentials than you suggest.

I said reduce, not eliminate. That might mean keep shirts a little longer and darning socks.

Just getting losing the rubbish and keep the essentials would be reduce the imbalances.

The reduction of sterling makes imports less competitive, which ought to allow import substitution for some of those products.

Kohoutek

Sir_Humphrey wrote: »

I said reduce, not eliminate. That might mean keep shirts a little longer and darning socks.

The reduction of sterling makes imports less competitive, which ought to allow import substitution for some of those products.

To be honest, if we get to the stage where people can't afford to buy new clothes as often as they'd wish, then I think they might start to think differently about a large proportion of the taxes of their labour going towards funding our prodigious public sector and its pension system.

I hope that devaluation will stimulate our shrinking productive sectors of the economy, but it's going to take a lot of effort to rebuild our once magnificent textile industry for example - and the cost of imported raw materials will still be expensive. And today's Britain is hardly an entrepreneurial society given Labour's emphasis on raising taxes, lowering education standards and increasing entitlements and public sector jobs.

Sir_Humphrey

Kohoutek wrote: »

To be honest, if we get to the stage where people can't afford to buy new clothes as often as they'd wish, then I think they might start to think differently about a large proportion of the taxes of their labour going towards funding our prodigious public sector and its pension system.

That was not the case in the past. A reduction in consumerism will also reduce personal greed. In addition, more people will not be able to afford to opt out of publically funded services, making their effective funding even more politically necessary.

Pennywise

Sir_Humphrey wrote: »

This is why cutting public spending can only be a slow affair.

So why havn't Blair and Brown already done it - after all they've had over 12 years, so it's a little late in the day to start doing it now!

Anyway, it's not about cutting services - it's efficiency we should be concerned about. The public sector could provide the same service for a lot less money if the waste was cut out

Optimist

Pennywise wrote: »

So why havn't Blair and Brown already done it - after all they've had over 12 years, so it's a little late in the day to start doing it now!

Anyway, it's not about cutting services - it's efficiency we should be concerned about. The public sector could provide the same service for a lot less money if the waste was cut out

I seem to remember Mr Brown was in denial about the problem up until late last year

Sir_Humphrey

Pennywise wrote: »

So why havn't Blair and Brown already done it - after all they've had over 12 years, so it's a little late in the day to start doing it now!

Anyway, it's not about cutting services - it's efficiency we should be concerned about. The public sector could provide the same service for a lot less money if the waste was cut out

Raising public spending from the levels of the 1990s was felt to be a good thing. I think it was a good thing too.

Re waste, you sound like my old colleague Jim Hacker

Kohoutek

Sir_Humphrey wrote: »

Re waste, you sound like my old colleague Jim Hacker

But it's not just an anecdote.

The ONS have calculated that public sector productivity declined by 3.4% from 1997 to 2007, and private sector productivity rose by 28%. And yet the average retirement age in the public sector is 58, compared with around 65 in the private sector. Average annual earnings and average annual wage increases are higher in the public sector.

http://business.timesonline.co.uk/tol/business/industry_sectors/public_sector/article6974029.ece

Surely rising wages with falling productivity is indicative of waste? Obviously it's an average across the whole public sector, but there must be some departments that are performing particularly badly to produce those productivity figures.