725,000 public sector jobs face axe, economist warns

ILW

scrappy2000 wrote: »

Wouldnt it be better to keep people in work?...rather than having them join the dole queue?.....if the government keeps people in work then they are contributing to the economy surely....not taking from it

Not if their contribtion is less than are paid.

Your argument says that if the Government employed everyone at say a million pounds a year then all would be great. In the end someone needs to be making the money to pay the wages.

lemonjelly

ILW wrote: »

Most private companies that deal with real customers would not survive if that were their attitude, the customers would just go elsewhere. It is the ones that have been put into a virtual monopoly by lax public sector spending controls where this happens.
If I had a customer that was prpeared to pay me £1,000,000 per week and not be too hot on the results I produced from them, I would probably be taking 11 month holidays in Barbados.

ILW wrote: »

It is completely untrue to say the private sector as a whole takes cash out of the system. It is the ONLY thing that puts cash into the system (except borrowing)

You don't think that the above 2 statements you made completely contradict each other?

Do you think that a company should treat all of its customers (regardless of who they are) well, fairly, equally? A good business model would dictate that you should. Poor customer service is one of the biggest reasons for switching imo.

Regarding the second post I've quoted, actually this is not true. The firms doing best at the moment are social firms http://news.bbc.co.uk/1/hi/business/10277248.stm who probably have a good balance as they are neither public nor private in the strict senses.

A lot of the public sector is also related to preventing serious costs, rather than creating wealth. Prevention is better than a cure. Better to spend a few quid on prevention rather than spend millions on clearing up the mess afterwards...

Old_Slaphead

lemonjelly wrote: »

I responded by highlighting that the banks/financial services have cost the taxpayer an estimated £850bn. Ergo they are not wealth creators, but a drain on resources.

I think to suggest that the banks have 'cost' taxpayers £850bn is somewhat exaggerated. Ok they've provided short term guarantees and liquidity covering that amount but treasury officials reckon that the total actual £sd cost, spread over several years will be £20-50bn.

A lot on money, yes, but only the equivalent of what the public sector accrues each year on it's pension liabilities and around 1/3rd of the current annual budget deficit.

http://www.guardian.co.uk/business/2009/dec/04/bailout-bank-national-audit-office-report

marklv

ILW wrote: »

True, but generally I dont have to pay for them if I don't want to.

You (not you personally but the general public) do have to pay for them by acquiring the products and services they offer. Your argument is bogus because it's not possible to cherry pick what you want from public services and only pay tax on what you want. Nonsense.

marklv

Old_Slaphead wrote: »

I think to suggest that the banks have 'cost' taxpayers £850bn is somewhat exaggerated. Ok they've provided short term guarantees and liquidity covering that amount but treasury officials reckon that the total actual £sd cost, spread over several years will be £20-50bn.

A lot on money, yes, but only the equivalent of what the public sector accrues each year on it's pension liabilities and around 1/3rd of the current annual budget deficit.

http://www.guardian.co.uk/business/2009/dec/04/bailout-bank-national-audit-office-report

I have an idea - simply deduct the basic state pension from all public sector pensions, including those currently being paid. That would save a fair bit I would think!

marklv

ILW wrote: »

Not if their contribtion is less than are paid.

Your argument says that if the Government employed everyone at say a million pounds a year then all would be great. In the end someone needs to be making the money to pay the wages.

And how do you assess this 'contribution'? I'm all in favour of appraising the value of individual jobs, but there are still millions of perfectly worthwhile public sector jobs.

marklv

tomterm8 wrote: »

Um, we don't forget that. They will also adjust pensions, holiday entitlement, and institute recruitment freezes. They will freeze most new capital spending. They will also freeze all benefit entitlements. And probably adjust job seekers allowance.

This is all a drop in a £150 billion hole, though.

The economist knows all these things... and is predicting 750,000 job losses. I would guess maybe half this number would be as a result of recruitment freezes and compulsory retirement.

This article is assuming that 80% of money raised will come from savings and 20% from tax. This is untenable and impossible to accomplish as it would destroy the fabric of society; Cameron knows it but won't admit it. He will have to split it 50/50 between tax and savings, and risk the wrath of Tory backbenchers.

kabayiri

JasonLVC wrote: »

I'm not having a go at Labour, just presenting the opinion as to maybe why the private sector got so involved with the public sector (and why that gravy train is coming to an end, hopefully).

I rather suspect that the government will be relying quite a lot on private sector companies to 'fill in the gaps' over the next few years.

None of the major parties renounced the use of PFI in their manifestos.

There is only one valid reason for this. They suspect they may need the extra leverage this form of borrowing offers.

tomterm8

marklv wrote: »

This article is assuming that 80% of money raised will come from savings and 20% from tax. This is untenable and impossible to accomplish as it would destroy the fabric of society; Cameron knows it but won't admit it. He will have to split it 50/50 between tax and savings, and risk the wrath of Tory backbenchers.

That is an interesting view; personally, I believe that Cameron doesn't know anything of the sort. He believes that increasing tax rates will have a worse effect than spending cuts, because increasing tax rates would have the effect of harming businesses.

marklv

tomterm8 wrote: »

That is an interesting view; personally, I believe that Cameron doesn't know anything of the sort. He believes that increasing tax rates will have a worse effect than spending cuts, because increasing tax rates would have the effect of harming businesses.

Irrespective of what higher taxes can harm, if they need to be raised and have to be raised, they will be raised. Moreover, businesses are generally a lot more resilient than you think.