While All the news channels and newspapers are going on about Osborne's "tough" budget cuts, I'm still trying to work out what they heard that I didn't.
Aside from the completely expected rise in VAT and CGT there was little in this budget that put any flesh on the bones of the cuts we are all told to expect. A public sector pay freeze? Well, no doubt the public sector will complain, but let's be honest - this was two years overdue (at least).
Instead the Chancellor has deferred adding any detail on the cuts until October - which makes me wonder why he had this budget now when half the stuff he mentioned was deferred until next year anyway! It looks to me as if this was designed to grab headlines - which it has - and, perhaps more than this, it looks like it was forced by the Lib Dems to push their election pledges.
When it came to actual cuts, there was no detail whatsoever - hardly surprising as the government haven't held their comprehensive spending review yet - but the media have gone mad over the prospect of a 25% cut in public sector spending.
Which wasn't what was said - if I understood it. I thought the Chancellor said the cuts would "average" 25% - not that public sector spending would be slashed by 25%. There is a difference - if you cut the spending of a minor department by 50% and that of a larger department by 1% you'll get an average cut of around 25% - but that won't necessarily slash the combined spending of those two departments by 25%.
If the budget of the first department is £6 billion and the second is £60 billion then you'll save around £3.5 billion pounds off a total spend of £66 billion - which is about 5%. So, although you've cut departmental budgets by an average 25% the actual savings in money terms is only 5% - hardly the sort of thing to solve this crisis.
So, unless I missed something, I'll defer my opinion on whether this is enough to stave off the coming crisis until Osborne actually adds some specifics. So far, all we've got is a paltry few billion pounds worth of cuts which won't make the slightest difference in the long run - or even in the short term.
Showing posts with label Public Sector. Show all posts
Showing posts with label Public Sector. Show all posts
Wednesday, June 23, 2010
Wednesday, April 28, 2010
And this helps how, exactly?
To be honest, I don't know the details of the dispute between Birmingham council and the unions over equal pay for women. It's something to do with bonuses being paid to "men" which were denied to "women".
It doesn't sound quite right to me, because, as far as I can make out the bonuses were paid to people doing different jobs - for example, refuse collectors got a big bonus while care workers didn't.
I don't actually see what that has to do with equal pay for genders myself. After all, there are plenty of men working in social care and they didn't get the big bonuses either - and there is nothing to stop women working on bin collections which means they could have got big bonuses if they'd decided to do that job - but hey, I've given up trying to make sense of the equal pay rubbish (I can't make sense of it, because there is no sense to it).
What I do wonder is who has actually benefited from this court case. As I understand it, Birmingham City Council have stopped paying bonuses to people doing "man's" work - so they lose out. The women who are supposed to have lost out will get a couple of grand each maybe - but they've probably all lost their jobs by now or seen them transferred to a private care company who will give them even worse pay and conditions and Birmingham City Council don't actually have any money other than that they take off the taxpayer.
So the men working for Birmingham City Council lose out, the women working for Birmingham City Council lose out and the people of Birmingham City lose out. As far as I can see, the only people to benefit from this are the lawyers who now see an opportunity to milk councils up and down Britain for more cash.
And all this at a time when we are facing the biggest cuts since the nineteen seventies according to some think tank.
It's a bit like handing a glass of water to a drowning man.
It doesn't sound quite right to me, because, as far as I can make out the bonuses were paid to people doing different jobs - for example, refuse collectors got a big bonus while care workers didn't.
I don't actually see what that has to do with equal pay for genders myself. After all, there are plenty of men working in social care and they didn't get the big bonuses either - and there is nothing to stop women working on bin collections which means they could have got big bonuses if they'd decided to do that job - but hey, I've given up trying to make sense of the equal pay rubbish (I can't make sense of it, because there is no sense to it).
What I do wonder is who has actually benefited from this court case. As I understand it, Birmingham City Council have stopped paying bonuses to people doing "man's" work - so they lose out. The women who are supposed to have lost out will get a couple of grand each maybe - but they've probably all lost their jobs by now or seen them transferred to a private care company who will give them even worse pay and conditions and Birmingham City Council don't actually have any money other than that they take off the taxpayer.
So the men working for Birmingham City Council lose out, the women working for Birmingham City Council lose out and the people of Birmingham City lose out. As far as I can see, the only people to benefit from this are the lawyers who now see an opportunity to milk councils up and down Britain for more cash.
And all this at a time when we are facing the biggest cuts since the nineteen seventies according to some think tank.
It's a bit like handing a glass of water to a drowning man.
Wednesday, April 14, 2010
No Dave required
I don't know if you saw BBC Breakfast this morning, but they featured an item about a small village in Rutland who, fed up of slow speed Internet connections, decided to band together to get high speed broadband access. They got together with a local telecoms company and now have the fastest rural broadband access in the country.
Good for them.
I really hope Dave was watching too - because it demonstrates two very important points. The first being that his "new idea" for "big society" isn't anything new and doesn't need to be big. It also demonstrates that it doesn't need a Tory government either - but that's by the by.
The second and more important thing that this demonstrates is that this was achieved without any intervention from the state whatsoever. There was no need for any "development agency" or fake charity to get involved - indeed, it is quite likely that it only became possible because the scenario was such that the state wasn't involved at all.
And that is the important point - the state does not need to be involved.
The biggest obstacle to society in a democracy is the state - and the more the state gets involved the less democratic that society becomes. Because the state decides what a society will and will not be allowed the society becomes competitive rather than collaborative. Rather than having communities agreeing on what is required you end up with factions fighting against each other for the cash the government will hand out.
And the way this state interference manifests itself is through the myriad of quangos and agencies that proliferate up and down the country and if the were really serious about enabling people to take control than the only thing they need to do is dismantle this quangocracy and the Tories have no intention of changing that.
I know they have no intention of doing so because the reason most of these things exist is our membership of the European Union - and the Tories have no intention of doing anything about that.
We don't need a big state or a big society - we just need to get out democracy back.
And the only way we can do that is by leaving the EU.
Good for them.
I really hope Dave was watching too - because it demonstrates two very important points. The first being that his "new idea" for "big society" isn't anything new and doesn't need to be big. It also demonstrates that it doesn't need a Tory government either - but that's by the by.
The second and more important thing that this demonstrates is that this was achieved without any intervention from the state whatsoever. There was no need for any "development agency" or fake charity to get involved - indeed, it is quite likely that it only became possible because the scenario was such that the state wasn't involved at all.
And that is the important point - the state does not need to be involved.
The biggest obstacle to society in a democracy is the state - and the more the state gets involved the less democratic that society becomes. Because the state decides what a society will and will not be allowed the society becomes competitive rather than collaborative. Rather than having communities agreeing on what is required you end up with factions fighting against each other for the cash the government will hand out.
And the way this state interference manifests itself is through the myriad of quangos and agencies that proliferate up and down the country and if the were really serious about enabling people to take control than the only thing they need to do is dismantle this quangocracy and the Tories have no intention of changing that.
I know they have no intention of doing so because the reason most of these things exist is our membership of the European Union - and the Tories have no intention of doing anything about that.
We don't need a big state or a big society - we just need to get out democracy back.
And the only way we can do that is by leaving the EU.
Saturday, April 03, 2010
A good start
So another member of the body set up to advise the government on drugs has resigned.
Good. Now would be a good time to be shutting down pointless and unnecessary quangos - let's start with this one.
Good. Now would be a good time to be shutting down pointless and unnecessary quangos - let's start with this one.
Monday, March 08, 2010
Quarter of a million workers go on strike ......
.... and hardly anyone notices.
Let's see ..... the average wage for a public sector worker is around £25K a year which is about £70 a day. They're striking for 2 days for which they'll get no pay saving us, the taxpayer, around £30 million roughly.
Shame it's just two days. Do you think they might extend it a little ..... say, a couple of years?
Let's see ..... the average wage for a public sector worker is around £25K a year which is about £70 a day. They're striking for 2 days for which they'll get no pay saving us, the taxpayer, around £30 million roughly.
Shame it's just two days. Do you think they might extend it a little ..... say, a couple of years?
Saturday, March 06, 2010
Shrink to fit
The news that the BBC is going to cut a couple of radio stations and reduce its Internet presence is a bit of a smokescreen. On the face of it it sounds as if the BBC, like the rest of us, is doing its best to reduce its costs. It isn't - and has no intention of doing so, but it has led to a debate about what we want from the BBC.
Do we keep Radio 3 and Radio 4 or just Radio 4? Do we need BBC 2 and BBC 4 or can we get by with just one TV channel? This is what I keep hearing - where do we cut the BBC?
We cut it at its source of funding - the licence fee.
The BBC is too big and is doing too much - way beyond its remit, in my opinion - but the debate about what services to cut is not the right way to think about how to reduce it. The obvious answer - obvious answer to me, anyway - is to force the BBC management to make the decision about what to cut and you do this by reducing the amount they receive from the taxpayer.
I'd start with a 10% reduction in the licence fee every year for five years followed by a ten year freeze. That should be enough to get the BBC to cut some of its multitude of stations and services.
Whether we're left with just one TV channel and one radio station is irrelevant - but if, after that fifteen year period, the BBC is failing to fulfil its remit as a public service broadcaster then just get rid of it.
Do we keep Radio 3 and Radio 4 or just Radio 4? Do we need BBC 2 and BBC 4 or can we get by with just one TV channel? This is what I keep hearing - where do we cut the BBC?
We cut it at its source of funding - the licence fee.
The BBC is too big and is doing too much - way beyond its remit, in my opinion - but the debate about what services to cut is not the right way to think about how to reduce it. The obvious answer - obvious answer to me, anyway - is to force the BBC management to make the decision about what to cut and you do this by reducing the amount they receive from the taxpayer.
I'd start with a 10% reduction in the licence fee every year for five years followed by a ten year freeze. That should be enough to get the BBC to cut some of its multitude of stations and services.
Whether we're left with just one TV channel and one radio station is irrelevant - but if, after that fifteen year period, the BBC is failing to fulfil its remit as a public service broadcaster then just get rid of it.
Tuesday, December 22, 2009
Why can't we cope any more?
It really is ridiculous that a little bit of snow can bring this country to a grinding halt. The other day I criticised the spirit of people who give up at the slightest suggestion that things may be a little difficult, but that was a little unfair. What is apparent is that, despite the adverse weather, most people are doing their damnedest to get to and from work. Unfortunately, they are having to do so without the option of public transport.
This is the real problem; not the spirit of the people, but the attitude of public services - particularly those who run public services. I expect half the problem is the fear of litigation. It doesn't seem that long ago to me that we used to laugh at the way they used to sue at the drop of a hat in the USA - now we're even worse here.
It took me almost five hours to drive home yesterday evening. All the roads were icy as hell and not one of them had been gritted - but I've driven in far worse conditions and never experienced anything like that amount of gridlock before. I can remember driving my old Riley Elf in worse and even riding a motorbike in more difficult conditions. I wasn't one of those fair weather bikers - my bike used to be my main form of transport and I can perfectly recall those days when I'd climb off frozen stiff by half an inch of snow and ice caked to my front!
But I always got to where I was going. Maybe it's the cars? Cars today are more powerful and loaded with driver aids that, although they make cars easier to drive, tend to disconnect the driver from the road - particularly power steering.
I don't know, but I do know that other countries cope OK in far worse conditions. It's actually rather embarrassing that Britain struggles so at these times and I really don't understand why.
Perhaps it's just symptomatic of the way our country is run?
This is the real problem; not the spirit of the people, but the attitude of public services - particularly those who run public services. I expect half the problem is the fear of litigation. It doesn't seem that long ago to me that we used to laugh at the way they used to sue at the drop of a hat in the USA - now we're even worse here.
It took me almost five hours to drive home yesterday evening. All the roads were icy as hell and not one of them had been gritted - but I've driven in far worse conditions and never experienced anything like that amount of gridlock before. I can remember driving my old Riley Elf in worse and even riding a motorbike in more difficult conditions. I wasn't one of those fair weather bikers - my bike used to be my main form of transport and I can perfectly recall those days when I'd climb off frozen stiff by half an inch of snow and ice caked to my front!
But I always got to where I was going. Maybe it's the cars? Cars today are more powerful and loaded with driver aids that, although they make cars easier to drive, tend to disconnect the driver from the road - particularly power steering.
I don't know, but I do know that other countries cope OK in far worse conditions. It's actually rather embarrassing that Britain struggles so at these times and I really don't understand why.
Perhaps it's just symptomatic of the way our country is run?
Thursday, July 09, 2009
An army of bureaucrats
Apparently, there are 100,000 "civil servants" working for the Ministry of Defence. To put that into context, it means that every trained regular soldier in the British Army could have their own personal bureaucrat assigned to them and there would still be a couple of thousand pen-pushers sitting around with nothing to do.
And I wouldn't mind betting that the bureaucrats never find themselves short of the "right equipment" - except when they leave their £3000 laptop on some commuter train. British soldiers in Afghanistan have been known to beg for bullets from US soldiers, but I doubt whether the bean counters at the MoD ever run short of batteries for their calculators
And that is just one government department out of God knows how many we have these days. There are too many departments and each department has too many bureaucrats. Why do we need so many?
Well - we don't. It's just empire building by people who do so just because they can. We often hear people - such as David Cameron - tell us that we need smaller government without ever really saying what that means. What it should mean (apart from the obvious cull of the quangos) is fewer government departments employing considerably fewer people.
We don't need a separate "Justice Department" from the Home Office. We don't need a Secretary of State for Scotland as well as a Scottish Parliament (and if we do then why isn't there a Secretary of State for England?). Why do we have to have a Minister for Africa, Asia and the UN? Why can't the Foreign Office do that?
We're always being told - by Labour supporters - that cutting back public sector spending will mean fewer teachers and nurses or less schools and hospitals, but it doesn't mean that at all. It just means less government and considerably fewer bureaucrats.
And if that means more money being available to buy books for schools, pay for more operations or ensure our soldiers get the equipment they need and deserve how can anybody object to that?
And I wouldn't mind betting that the bureaucrats never find themselves short of the "right equipment" - except when they leave their £3000 laptop on some commuter train. British soldiers in Afghanistan have been known to beg for bullets from US soldiers, but I doubt whether the bean counters at the MoD ever run short of batteries for their calculators
And that is just one government department out of God knows how many we have these days. There are too many departments and each department has too many bureaucrats. Why do we need so many?
Well - we don't. It's just empire building by people who do so just because they can. We often hear people - such as David Cameron - tell us that we need smaller government without ever really saying what that means. What it should mean (apart from the obvious cull of the quangos) is fewer government departments employing considerably fewer people.
We don't need a separate "Justice Department" from the Home Office. We don't need a Secretary of State for Scotland as well as a Scottish Parliament (and if we do then why isn't there a Secretary of State for England?). Why do we have to have a Minister for Africa, Asia and the UN? Why can't the Foreign Office do that?
We're always being told - by Labour supporters - that cutting back public sector spending will mean fewer teachers and nurses or less schools and hospitals, but it doesn't mean that at all. It just means less government and considerably fewer bureaucrats.
And if that means more money being available to buy books for schools, pay for more operations or ensure our soldiers get the equipment they need and deserve how can anybody object to that?
Wednesday, July 01, 2009
The return of British Rail?
The government has nationalised the East Coast mainline after National Express floundered.
I know a lot of conservatives will be horrified by this, but personally I think the whole damn lot should be brought back into public ownership*. I never could see the point of privatising the railways - the taxpayer was always going to end up paying for it one way or another anyway - and I've never made it a secret that I believe certain things should be in public ownership.
I don't see this leading to a mass nationalistion of the railways, though - more's the pity.
* I know this seems at odds for someone who claims to be a conservative, but as I've remarked before, my politics are not that straightforward. They are a mixture of various different ideologies formed through various influences and a wide variety of sources over decades - not learned by rote from a book or by narrow selection of opinion.
I know a lot of conservatives will be horrified by this, but personally I think the whole damn lot should be brought back into public ownership*. I never could see the point of privatising the railways - the taxpayer was always going to end up paying for it one way or another anyway - and I've never made it a secret that I believe certain things should be in public ownership.
I don't see this leading to a mass nationalistion of the railways, though - more's the pity.
* I know this seems at odds for someone who claims to be a conservative, but as I've remarked before, my politics are not that straightforward. They are a mixture of various different ideologies formed through various influences and a wide variety of sources over decades - not learned by rote from a book or by narrow selection of opinion.
Tuesday, April 14, 2009
The wolves are gathering
Teachers from the NUT have voted for a 10% pay increase.
Activists insisted they would take "no lessons in morality" from ministers who fit their homes with "sinks from Habitat" - an attack on Jacqui Smith, the Home Secretary.
No? But the rest of us are supposed to? How about they take a "lesson in morality" from us - the taxpayers. No - teachers are not taxpayers - their pay comes out of private sector taxes. They are tax recyclers and consume more than they recover.
So, the private sector is shedding jobs and taking wage cuts to cope with this recession - how about the teachers do the same?
Activists insisted they would take "no lessons in morality" from ministers who fit their homes with "sinks from Habitat" - an attack on Jacqui Smith, the Home Secretary.
No? But the rest of us are supposed to? How about they take a "lesson in morality" from us - the taxpayers. No - teachers are not taxpayers - their pay comes out of private sector taxes. They are tax recyclers and consume more than they recover.
So, the private sector is shedding jobs and taking wage cuts to cope with this recession - how about the teachers do the same?
Wednesday, April 08, 2009
Economic evolution
As property prices soared, public servants complained they were being priced out of home ownership. In response "benchmarking" delivered to the public sector wages that were linked euro for euro to equivalent jobs in the private sector. Those salaries were then linked to public sector pensions. The result? Long-retired public servants found themselves with fabulous defined benefit pensions beyond their wildest expectations.
Meanwhile the private sector is haemorrhaging jobs, while those who hang on must take wage cuts as they watch their pensions collapse. While they suffer the slings and arrows of the free market they look on bitterly at their public sector colleagues. If they got benchmarking on the way up, why don't they take it on the way down?
That's how the Irish Tiger became extinct. First it gorged on the private sector and then, when there was no more meat left to strip from those bones, it ate itself. No, I'm not gloating - we're no better off. This is just an indication of what is to yet to come in Britain - only much much worse.
Meanwhile the private sector is haemorrhaging jobs, while those who hang on must take wage cuts as they watch their pensions collapse. While they suffer the slings and arrows of the free market they look on bitterly at their public sector colleagues. If they got benchmarking on the way up, why don't they take it on the way down?
That's how the Irish Tiger became extinct. First it gorged on the private sector and then, when there was no more meat left to strip from those bones, it ate itself. No, I'm not gloating - we're no better off. This is just an indication of what is to yet to come in Britain - only much much worse.
Monday, April 06, 2009
Fat cats in the council
More than a thousand council "staff" are being paid more than £100,000 a year - and 16 earn more than the Prime Minister according to the Telegraph.
How many did you vote for?
No - me neither.
How many did you vote for?
No - me neither.
Thursday, March 26, 2009
Then and now
I loved the seventies - but I was nine when they started and nineteen when they finished so I didn't worry too much about politics, economics or employment, but they were defining times for kids growing up back then.
I don't remember the fifties - being born in 1960 - but I do seem to recall that back then kids didn't have their own identity. They tended to have hair cuts like their mums and dads, dressed in mini versions of their parents clothes and listened to the sort of music their parents listened to - until rock'n'roll came along.
A generation later and things have swung the other way. Now we have parents who dress like their kids, wear their hair like fifteen year olds and listen to Girls Aloud. Things are not totally different, though - with eight year old girls encouraged to wear things designed for thirty year olds with no sense of shame.
But for me, the seventies were MY time. We had our own music - glam rock at first, then punk later. We had our own sartorial elegance - different from my parents, different from my older brothers and different again from the next bunch of teenagers with their New Romantic look. We even had our first experience of the freedom that your own form of motorised transport could bring with the rise of the sports moped. People forget that, before we got our hands on Yamaha FS1E's, Suzuki AP50's and frantic Fantics, the only form of transport available to 16 year olds were pushbikes, buses or the crappy mopeds with baskets on the front.
Even so, I was well aware of the problems of the time. The power cuts in the early seventies were actually quite exciting and fun for kids my age, but I was well aware of the problems they caused for my folks - as well as the high inflation, cost of food and industrial strife.
According to official figures, our public sector today isn't much larger (maybe even smaller?) than it was back then, but the big difference is that the majority of our public sector back then was producing something - something which they don't do any more.
The irony of all that is that if we had a public sector today like the public sector of the seventies - but without the union power and militancy - we'd be far better placed to come through this economic crisis than we actually are simply because we still produced things. Sure, the car industry would still be in dire straits as it is now, but our coal industry would have been flourishing (as, indeed, our current coal industry is - but it's too small to make much difference now).
I keep hearing so-called economic "experts" telling us that the government have to keep spending to "create" jobs - but jobs doing what? Spending more money on an unproductive public sector isn't going to achieve anything except even more massive levels of debt for our children and our children's children to deal with. It's a great way to bankrupt the nation, but other than that I can't see what it will achieve.
Our governments - both Tory and Labour - have hitched us to the services industry and, as I've said before, this is a mistake. Services do not lead an economy - they are supporting structures to a manufacturing industry. That is why they are called "services" - they service something.
The only way out of this crisis is to produce something which we can sell to the rest of the world - even if it costs you money to make it. At least you get some revenue back. If you spend £400 billion quid on a public sector and get nothing for it, that still costs you £400 billion. If you spend £400 billion and get £200 billion in return it is costing you half as much. A £200 billion loss isn't great, but it's still better than a £400 billion loss!
So I'm all for the government spending money IF they spend it on producing something. UK Coal are struggling to find investment to open up new pits - give them the money! GM are threatening to shut down Vauxhall Motors - buy it off them! Corus are closing down steel plants - take them over!
Nationalisation, in the short term, is the way to go. It shouldn't be reserved for banks - indeed, I'm not sure that it is even sensible to support banks that way - it can work for industry and it is only by producing something that we will get out of this mess.
The public sector is the key to our future. We have to cut out the unproductive chunks and divert the cash we spend into producing something. There is talk of cutting defence spending - how ridiculous is that? It is the right time to actually increase defence spending - but only if you spend the money buying things made in Britain. Get those aircraft carriers going - but not with French contractors. Get new trucks and patrol vehicles for our soldiers - but not German or South African ones. Get new aeroplanes (ones we actually need rather than expensive and largely useless Eurofighters) and transports for the RAF, but find a way to build them here.
The public sector has to move from being unproductive to productive. The government has to cut the current public sector by a half and divert the money - plus more - into nationalised industries with a longer term aim of selling those industries back to the private sector once we are through this mess (but with a provision that those industries remain British owned and located in Britain.
Production is and always has been key to economic survival. The USA will recover quicker than us because it makes things still. Germany, France and Italy will survive better because they make things still. A nation that makes nothing is worth nothing.
I don't remember the fifties - being born in 1960 - but I do seem to recall that back then kids didn't have their own identity. They tended to have hair cuts like their mums and dads, dressed in mini versions of their parents clothes and listened to the sort of music their parents listened to - until rock'n'roll came along.
A generation later and things have swung the other way. Now we have parents who dress like their kids, wear their hair like fifteen year olds and listen to Girls Aloud. Things are not totally different, though - with eight year old girls encouraged to wear things designed for thirty year olds with no sense of shame.
But for me, the seventies were MY time. We had our own music - glam rock at first, then punk later. We had our own sartorial elegance - different from my parents, different from my older brothers and different again from the next bunch of teenagers with their New Romantic look. We even had our first experience of the freedom that your own form of motorised transport could bring with the rise of the sports moped. People forget that, before we got our hands on Yamaha FS1E's, Suzuki AP50's and frantic Fantics, the only form of transport available to 16 year olds were pushbikes, buses or the crappy mopeds with baskets on the front.
Even so, I was well aware of the problems of the time. The power cuts in the early seventies were actually quite exciting and fun for kids my age, but I was well aware of the problems they caused for my folks - as well as the high inflation, cost of food and industrial strife.
According to official figures, our public sector today isn't much larger (maybe even smaller?) than it was back then, but the big difference is that the majority of our public sector back then was producing something - something which they don't do any more.
The irony of all that is that if we had a public sector today like the public sector of the seventies - but without the union power and militancy - we'd be far better placed to come through this economic crisis than we actually are simply because we still produced things. Sure, the car industry would still be in dire straits as it is now, but our coal industry would have been flourishing (as, indeed, our current coal industry is - but it's too small to make much difference now).
I keep hearing so-called economic "experts" telling us that the government have to keep spending to "create" jobs - but jobs doing what? Spending more money on an unproductive public sector isn't going to achieve anything except even more massive levels of debt for our children and our children's children to deal with. It's a great way to bankrupt the nation, but other than that I can't see what it will achieve.
Our governments - both Tory and Labour - have hitched us to the services industry and, as I've said before, this is a mistake. Services do not lead an economy - they are supporting structures to a manufacturing industry. That is why they are called "services" - they service something.
The only way out of this crisis is to produce something which we can sell to the rest of the world - even if it costs you money to make it. At least you get some revenue back. If you spend £400 billion quid on a public sector and get nothing for it, that still costs you £400 billion. If you spend £400 billion and get £200 billion in return it is costing you half as much. A £200 billion loss isn't great, but it's still better than a £400 billion loss!
So I'm all for the government spending money IF they spend it on producing something. UK Coal are struggling to find investment to open up new pits - give them the money! GM are threatening to shut down Vauxhall Motors - buy it off them! Corus are closing down steel plants - take them over!
Nationalisation, in the short term, is the way to go. It shouldn't be reserved for banks - indeed, I'm not sure that it is even sensible to support banks that way - it can work for industry and it is only by producing something that we will get out of this mess.
The public sector is the key to our future. We have to cut out the unproductive chunks and divert the cash we spend into producing something. There is talk of cutting defence spending - how ridiculous is that? It is the right time to actually increase defence spending - but only if you spend the money buying things made in Britain. Get those aircraft carriers going - but not with French contractors. Get new trucks and patrol vehicles for our soldiers - but not German or South African ones. Get new aeroplanes (ones we actually need rather than expensive and largely useless Eurofighters) and transports for the RAF, but find a way to build them here.
The public sector has to move from being unproductive to productive. The government has to cut the current public sector by a half and divert the money - plus more - into nationalised industries with a longer term aim of selling those industries back to the private sector once we are through this mess (but with a provision that those industries remain British owned and located in Britain.
Production is and always has been key to economic survival. The USA will recover quicker than us because it makes things still. Germany, France and Italy will survive better because they make things still. A nation that makes nothing is worth nothing.
Wednesday, March 25, 2009
Them and us
The public sector can look forward to "inflation busting" pay increases while the private sector struggles.
NHS staff, police officers and teachers were all told yesterday that their awards will be met in full - on the day the Retail Prices Index, which is used to set pay rises, fell to zero for the first time in 49 years.
Nice for them - not so nice for those of us in the private sector whose pockets are being picked to service these arrangements. Still, no one minds teachers, coppers and nurses getting more money, do they?
Meanwhile, senior civil servants earning up to £200,000 a year are pressing for a 3 per cent increase in the pay pot used to boost their salaries.
Officials from their union, the First Division Association, claim the boost is needed for around 4,000 Whitehall staff on at least £60,000 because their pay lags behind equivalent posts in the private sector.
Fine - go and get a job in the private sector, then. Oh, there aren't any. Nor do you get the security, fat pension and the opportunity to retire at 60 either.
John Philpott, chief economist at the Chartered Institute of Personnel and Development, said: 'The public sector is at present an entirely recession-free zone.
Recession free? Hey, it's still boom time at the public sector trough - it's just a question of how many more people can stuff their snouts in it before the private sector is sucked completely dry.
Last week, official figures showed that 30,000 jobs were created in the public sector last year, while 105,000 were lost in the private sector.
Not too long at that rate. Enjoy it while you can, public sector piggies - the revolution is coming.
NHS staff, police officers and teachers were all told yesterday that their awards will be met in full - on the day the Retail Prices Index, which is used to set pay rises, fell to zero for the first time in 49 years.
Nice for them - not so nice for those of us in the private sector whose pockets are being picked to service these arrangements. Still, no one minds teachers, coppers and nurses getting more money, do they?
Meanwhile, senior civil servants earning up to £200,000 a year are pressing for a 3 per cent increase in the pay pot used to boost their salaries.
Officials from their union, the First Division Association, claim the boost is needed for around 4,000 Whitehall staff on at least £60,000 because their pay lags behind equivalent posts in the private sector.
Fine - go and get a job in the private sector, then. Oh, there aren't any. Nor do you get the security, fat pension and the opportunity to retire at 60 either.
John Philpott, chief economist at the Chartered Institute of Personnel and Development, said: 'The public sector is at present an entirely recession-free zone.
Recession free? Hey, it's still boom time at the public sector trough - it's just a question of how many more people can stuff their snouts in it before the private sector is sucked completely dry.
Last week, official figures showed that 30,000 jobs were created in the public sector last year, while 105,000 were lost in the private sector.
Not too long at that rate. Enjoy it while you can, public sector piggies - the revolution is coming.
Tip of the iceberg
I doubt whether there are very many people on this earth who truly recognise the sheer scale of the economic crisis that is slowly unfolding before us - I know I don't. I have my suspicions, of course and those suspicions are being enforced on a virtual daily basis.
There are some people, obviously, in each national government who have an inkling of just how bad it could be based on what they know about the state of our economy - and they know far more than they are letting on to you and I. One of those would be the governor of the Bank Of England.
In a highly unusual intervention, the Bank’s Governor, Mervyn King, said that the Government must be “cautious” as Britain faces “very large fiscal deficits”.
This is a civil servants way of saying "we're up the creek without a paddle and there is one bloody great waterfall coming up". The Telegraph says that this is likely to "anger" the PM as he tries to get other nations to put up some cash in the "the biggest financial stimulus the world has ever seen". Actually, I think we've already done that - and it hasn't worked.
Mr King’s warning undermines not only Mr Brown’s plans but also the foundations of the G20 summit that the Prime Minister is hosting in London next week, since the meeting is broadly regarded as a platform for world leaders to agree to spend extra billions on averting a global depression.
Seeing as those "foundations" were built on rapidly shifting sands, it wouldn't take much to undermine them. Spending billions - or even trillions - won't help because the solution to debt is never more debt.
It is rare for any leading public official — let alone the Governor of the Bank of England — to deliver such a public warning over the country’s finances in the run-up to the Budget. However, appearing before the Treasury select committee yesterday, Mr King gave warning of the dangers of borrowing any more.
“I’m sure the Government will want to be cautious in this respect,” Mr King said. “There is no doubt we are facing very large fiscal deficits over the next two to three years"
Two to three years? Make that two to three decades and you'll be a bit closer to the truth.
“Given how big those deficits are ...."
And they are very large, but the government is keeping quiet about just how bad the situation really is.
"..... I think it would be sensible to be cautious about going further in using discretionary measures to expand the size of those deficits."
For God's sake, stop spending money we haven't got!!!!!
“The level of the fiscal position in the UK is not one that would say: 'Well, why don’t we just engage in another significant round of fiscal expansion?’ ”
In other words - either someone else has to bail us out or we're fucked. Which, of course, is why Brown wants the rest of the world to spend big. For some reason, they don't seem too keen to cripple their own economies just to save Gordon's arse. People can by fickle.
Make no mistake, if the governor of the Bank Of England is saying these things then the situation is far, far worse than the government are letting on. Civil servants like this just don't do this sort of thing unless things are very dire indeed.
And they are. All we have seen so far is the merest tip of the iceberg. There is a whole lot more to be revealed yet.
There are some people, obviously, in each national government who have an inkling of just how bad it could be based on what they know about the state of our economy - and they know far more than they are letting on to you and I. One of those would be the governor of the Bank Of England.
In a highly unusual intervention, the Bank’s Governor, Mervyn King, said that the Government must be “cautious” as Britain faces “very large fiscal deficits”.
This is a civil servants way of saying "we're up the creek without a paddle and there is one bloody great waterfall coming up". The Telegraph says that this is likely to "anger" the PM as he tries to get other nations to put up some cash in the "the biggest financial stimulus the world has ever seen". Actually, I think we've already done that - and it hasn't worked.
Mr King’s warning undermines not only Mr Brown’s plans but also the foundations of the G20 summit that the Prime Minister is hosting in London next week, since the meeting is broadly regarded as a platform for world leaders to agree to spend extra billions on averting a global depression.
Seeing as those "foundations" were built on rapidly shifting sands, it wouldn't take much to undermine them. Spending billions - or even trillions - won't help because the solution to debt is never more debt.
It is rare for any leading public official — let alone the Governor of the Bank of England — to deliver such a public warning over the country’s finances in the run-up to the Budget. However, appearing before the Treasury select committee yesterday, Mr King gave warning of the dangers of borrowing any more.
“I’m sure the Government will want to be cautious in this respect,” Mr King said. “There is no doubt we are facing very large fiscal deficits over the next two to three years"
Two to three years? Make that two to three decades and you'll be a bit closer to the truth.
“Given how big those deficits are ...."
And they are very large, but the government is keeping quiet about just how bad the situation really is.
"..... I think it would be sensible to be cautious about going further in using discretionary measures to expand the size of those deficits."
For God's sake, stop spending money we haven't got!!!!!
“The level of the fiscal position in the UK is not one that would say: 'Well, why don’t we just engage in another significant round of fiscal expansion?’ ”
In other words - either someone else has to bail us out or we're fucked. Which, of course, is why Brown wants the rest of the world to spend big. For some reason, they don't seem too keen to cripple their own economies just to save Gordon's arse. People can by fickle.
Make no mistake, if the governor of the Bank Of England is saying these things then the situation is far, far worse than the government are letting on. Civil servants like this just don't do this sort of thing unless things are very dire indeed.
And they are. All we have seen so far is the merest tip of the iceberg. There is a whole lot more to be revealed yet.
Tuesday, March 24, 2009
Roll out the barrel
In a comment to my previous post, the Fat Bigot (excellent blog, by the way) seems to have a degree of sympathy for the Tory party with regards to not doing anything to upset the public sector. To be honest, he's right and I completely understand that point of view, but my point is that by doing so the Tories are abandoning the very people who actually support them and who they exist to represent.
The public sector has plenty of support and representation in political life. They have the Labour Party, the Lib Dems and various small parties such as the Greens and even the BNP who all openly support big government. They have multiple unions to organise and direct their grievances. They have the bulk of British media supporting their cause and only too willing to offer support and justification for the public sector.
The private sector has nothing and nobody. The large corporations do have leverage - substantial leverage - in so much as they can, if government does something which adversely affects their ability to do business, threaten to move elsewhere, but the vast majority of small businesses, self-employed and private sector employees have nothing.
We are not organised. We don't hold protest marches when government action slashes our pensions. We don't go on strike when they pick our pockets to feed the state machine. We don't picket government buildings when government policy leaves us without jobs - we just bend over the barrel like we're told to.
That is what the Tory party existed for; to provide political representation and a voice to the millions of individuals who make up the private sector. Now they cosy up to the public sector with their mates from Labour and Lib Dems. They go to great lengths to keep the public sector happy while telling us to shut up and get on the bloody barrel.
And they expect us to vote for them?
Bollocks to that. They've abandoned us - we should abandon them.
The public sector has plenty of support and representation in political life. They have the Labour Party, the Lib Dems and various small parties such as the Greens and even the BNP who all openly support big government. They have multiple unions to organise and direct their grievances. They have the bulk of British media supporting their cause and only too willing to offer support and justification for the public sector.
The private sector has nothing and nobody. The large corporations do have leverage - substantial leverage - in so much as they can, if government does something which adversely affects their ability to do business, threaten to move elsewhere, but the vast majority of small businesses, self-employed and private sector employees have nothing.
We are not organised. We don't hold protest marches when government action slashes our pensions. We don't go on strike when they pick our pockets to feed the state machine. We don't picket government buildings when government policy leaves us without jobs - we just bend over the barrel like we're told to.
That is what the Tory party existed for; to provide political representation and a voice to the millions of individuals who make up the private sector. Now they cosy up to the public sector with their mates from Labour and Lib Dems. They go to great lengths to keep the public sector happy while telling us to shut up and get on the bloody barrel.
And they expect us to vote for them?
Bollocks to that. They've abandoned us - we should abandon them.
Monday, March 23, 2009
The public sector needs telling - no kidding!
There's an advert doing the rounds on ITV right now - as with a lot of adverts I can not tell you what it is advertising or for which company (not because it is illegal - I genuinely can not remember) - during which the narrator refers to kids as "drains on resources".
As anyone who has kids will tell you this is a largely accurate description of children. Yes, we love them to bits and we wouldn't want to be without them, but they cost an awful lot of money. Most parents are openly honest about this both to themselves and to their own children, but for some reason we're less likely to be so honest about public sector employees.
To be honest, I don't love public sector employees to bits. If the truth be told they are often pompous, officious jobsworths with an over-inflated self-importance which, more and more these days, is often linked to the most sanctimonious self-righteousness. While we're being truthful, the other fact of the matter is that I, like many other people, could quite easily do without the vast majority of public services which are not actually there to serve the public at all - just niche groups.
And yet, for some reason, when it comes to the massive cost of public sector employees we're supposed to treat these people with kid gloves which we don't even reserve for our own children. In The Telegraph today, Janet Daley reminds us of how the Tories are currently trying to perform a high wire balancing act as they juggle tax revenue with public sector costs and the prospect of having to form the next government.
While Cameron, Osborne and Hague are only too willing to be "straight and honest" with the private individual and private enterprise, they increasingly fudge the issues relating to the single area which, whoever does form the next government is really and truly going to have to get to grips with; public sector spending. The reason for this, as Daley points out, is the worry that if they are "straight and honest" with the public sector then the public sector will behave like children and throw a major tantrum.
Even the usually reliable Daley falls into the trap - calling public sector employees "taxpayers". They aren't taxpayers - they are tax recylcers. The government takes a big fat lump of money from the pockets of private sector employees and businesses then hands it to public sector employees and "businesses" - and they give a small proportion of it back to the government. For the vast majority of public sector employees, the chances are that they will get every bit of what they pay in tax back with their pension - and then some. And who picks up the tab for all this - the private sector.
The Tories are only too happy to be straight and honest with those of us in the private sector. We're the ones bearing the brunt of unemployment, we're the ones whose pay is falling (average earnings in the public sector are now higher than in the private sector) and we're the ones whose hard-earned pensions are being plundered to pay for the pensions of those in the public sector.
We treat the public sector more softly than we treat children. Telling them what a great job they do, how they are so invaluable to society and so on - boosting their esteem in the same way the "all must have prizes" education system does to badly behaved children.
The truth is that the public sector is a massive drain on resources. They aren't using the money well, they mostly aren't doing a great job - most are crap at whatever job they do (and which the private sector could do a lot better, for less) and they mostly are insulated from the economic reality which those of us in the private sector face.
Some one, at some time is going to have to say enough is enough and start getting tough with the public sector. It doesn't need pruning - it needs cutting down, the roots dug out and replanting.
As anyone who has kids will tell you this is a largely accurate description of children. Yes, we love them to bits and we wouldn't want to be without them, but they cost an awful lot of money. Most parents are openly honest about this both to themselves and to their own children, but for some reason we're less likely to be so honest about public sector employees.
To be honest, I don't love public sector employees to bits. If the truth be told they are often pompous, officious jobsworths with an over-inflated self-importance which, more and more these days, is often linked to the most sanctimonious self-righteousness. While we're being truthful, the other fact of the matter is that I, like many other people, could quite easily do without the vast majority of public services which are not actually there to serve the public at all - just niche groups.
And yet, for some reason, when it comes to the massive cost of public sector employees we're supposed to treat these people with kid gloves which we don't even reserve for our own children. In The Telegraph today, Janet Daley reminds us of how the Tories are currently trying to perform a high wire balancing act as they juggle tax revenue with public sector costs and the prospect of having to form the next government.
While Cameron, Osborne and Hague are only too willing to be "straight and honest" with the private individual and private enterprise, they increasingly fudge the issues relating to the single area which, whoever does form the next government is really and truly going to have to get to grips with; public sector spending. The reason for this, as Daley points out, is the worry that if they are "straight and honest" with the public sector then the public sector will behave like children and throw a major tantrum.
Even the usually reliable Daley falls into the trap - calling public sector employees "taxpayers". They aren't taxpayers - they are tax recylcers. The government takes a big fat lump of money from the pockets of private sector employees and businesses then hands it to public sector employees and "businesses" - and they give a small proportion of it back to the government. For the vast majority of public sector employees, the chances are that they will get every bit of what they pay in tax back with their pension - and then some. And who picks up the tab for all this - the private sector.
The Tories are only too happy to be straight and honest with those of us in the private sector. We're the ones bearing the brunt of unemployment, we're the ones whose pay is falling (average earnings in the public sector are now higher than in the private sector) and we're the ones whose hard-earned pensions are being plundered to pay for the pensions of those in the public sector.
We treat the public sector more softly than we treat children. Telling them what a great job they do, how they are so invaluable to society and so on - boosting their esteem in the same way the "all must have prizes" education system does to badly behaved children.
The truth is that the public sector is a massive drain on resources. They aren't using the money well, they mostly aren't doing a great job - most are crap at whatever job they do (and which the private sector could do a lot better, for less) and they mostly are insulated from the economic reality which those of us in the private sector face.
Some one, at some time is going to have to say enough is enough and start getting tough with the public sector. It doesn't need pruning - it needs cutting down, the roots dug out and replanting.
Tuesday, February 24, 2009
Cuts to the police reveals the leftist mentality
What public services do you use? No, roads and streetlights don't count - they are public utilities, not services. You don't "use" the guys who mend the road, the council does.
I mean what public services do you directly use?
I reckon I'm like most people and all I really use to any regular sort of degree are the bin men, schools for my kids, our local GP and the Royal Mail. I've never had any need to use countless hundreds of other services that the government provide - drug counsellors, five-a-day co-ordinators, youth offending outreach workers and so on. I've also been quite fortunate to never have needed to use the Labour Exchange - or whatever it's called now - but I suspect over the coming months and years millions of Britons will find out what that is like for the first time.
Bins, schools, health, post. That's about it for me and most people as far as "front line" public services are concerned - plus one other.
The police.
Whenever people like me suggest that the public sector has grown out of control in recent years the lefties always counter with the "what schools and hospitals will you cut?" question. The answer for most conservatives is, of course, none - there is ample scope for the public sector to make cuts without touching the services that most of us use on a regular basis.
I now realise why they ask that question. They are not being disingenuous as I originally thought - they genuinely believe that the first place you need to make public sector cuts is in the services we most use.
Why is this? Well, socialism is all about victims as groups rather than victims as individuals. Hardly surprising I suppose, given that it's all about "collectivism". The whole leftist movement is based on identifying various victim groups and then supporting their cause.
Originally it was the cause of the working man, but leftists soon cottoned on to the fact that any "victim group" is worth supporting - it's not about the who, it's about the how. The more victim groups they can identify and support, the more support they get in return. The more support they have the more they can build the society they envisage.
The trouble with that is, once you've exhausted the basic victim groups - working man, women, blacks, homosexuals and so on - you start running out of victim groups to support. So they invent new ones. Drug abusers are no longer self-harming idiots - they are "victims" who require "front-line" services. Criminals are not morally reproachable, but victims of their circumstances and in need of "front-line" services.
All this means that when a recession strikes and there is a need to cut public spending, they just can't bring themselves to cut spending on their favourite victim groups - firstly because they really believe their own bullshit, but also because that is where their key support now lies.
So instead of cutting the myriad of services which most of us will never have any reason to use, they cut the services which we will.
I mean what public services do you directly use?
I reckon I'm like most people and all I really use to any regular sort of degree are the bin men, schools for my kids, our local GP and the Royal Mail. I've never had any need to use countless hundreds of other services that the government provide - drug counsellors, five-a-day co-ordinators, youth offending outreach workers and so on. I've also been quite fortunate to never have needed to use the Labour Exchange - or whatever it's called now - but I suspect over the coming months and years millions of Britons will find out what that is like for the first time.
Bins, schools, health, post. That's about it for me and most people as far as "front line" public services are concerned - plus one other.
The police.
Whenever people like me suggest that the public sector has grown out of control in recent years the lefties always counter with the "what schools and hospitals will you cut?" question. The answer for most conservatives is, of course, none - there is ample scope for the public sector to make cuts without touching the services that most of us use on a regular basis.
I now realise why they ask that question. They are not being disingenuous as I originally thought - they genuinely believe that the first place you need to make public sector cuts is in the services we most use.
Why is this? Well, socialism is all about victims as groups rather than victims as individuals. Hardly surprising I suppose, given that it's all about "collectivism". The whole leftist movement is based on identifying various victim groups and then supporting their cause.
Originally it was the cause of the working man, but leftists soon cottoned on to the fact that any "victim group" is worth supporting - it's not about the who, it's about the how. The more victim groups they can identify and support, the more support they get in return. The more support they have the more they can build the society they envisage.
The trouble with that is, once you've exhausted the basic victim groups - working man, women, blacks, homosexuals and so on - you start running out of victim groups to support. So they invent new ones. Drug abusers are no longer self-harming idiots - they are "victims" who require "front-line" services. Criminals are not morally reproachable, but victims of their circumstances and in need of "front-line" services.
All this means that when a recession strikes and there is a need to cut public spending, they just can't bring themselves to cut spending on their favourite victim groups - firstly because they really believe their own bullshit, but also because that is where their key support now lies.
So instead of cutting the myriad of services which most of us will never have any reason to use, they cut the services which we will.
Friday, February 06, 2009
It's all in the timing
You've got to hand it to the bosses of Royal Mail - they really are doing the best they can to ruin a once great service.
Royal Mail plans to cut 16,000 jobs in a move that would unleash further industrial unrest on the battered economy.
Royal Mail has had years of losses during the previous boom when it could have reduced costs gradually through natural job losses and modernised at the same time, but when do they decide to do it? Yep - just as the country lurches towards a depression and just as they make a decent profit.
Royal Mail, which employs 170,000 people, has contacted regions around the country asking about interest in redundancy, part-time working and other cost-saving moves.
Now if they had done this during the time when the country appeared to be doing OK they'd have got plenty of volunteers for redundancy and early retirement - but few people are going to voluntarily chuck themselves on the dole queue when unemployment is rising faster than you can say "first day cover" and no one wants to take early retirement at a time when their annuity is likely to be worth less than a first class stamp.
Perhaps worse than that is the fact that when they were making huge losses Royal Mail could at least have used that as an excuse to cut jobs - but they actually make a profit now and to start laying people off when you're making more and more money year on year smacks of greed.
The Royal Mail should never have been privatised - even in part. The Victorians were quite probably the greatest believers in private enterprise ever, but even they saw the need for a universal postal service to be a state run industry.
Royal Mail plans to cut 16,000 jobs in a move that would unleash further industrial unrest on the battered economy.
Royal Mail has had years of losses during the previous boom when it could have reduced costs gradually through natural job losses and modernised at the same time, but when do they decide to do it? Yep - just as the country lurches towards a depression and just as they make a decent profit.
Royal Mail, which employs 170,000 people, has contacted regions around the country asking about interest in redundancy, part-time working and other cost-saving moves.
Now if they had done this during the time when the country appeared to be doing OK they'd have got plenty of volunteers for redundancy and early retirement - but few people are going to voluntarily chuck themselves on the dole queue when unemployment is rising faster than you can say "first day cover" and no one wants to take early retirement at a time when their annuity is likely to be worth less than a first class stamp.
Perhaps worse than that is the fact that when they were making huge losses Royal Mail could at least have used that as an excuse to cut jobs - but they actually make a profit now and to start laying people off when you're making more and more money year on year smacks of greed.
The Royal Mail should never have been privatised - even in part. The Victorians were quite probably the greatest believers in private enterprise ever, but even they saw the need for a universal postal service to be a state run industry.
Wednesday, January 21, 2009
The first cut is the hardest
A nation is not unlike a household and governing a nation is not unlike managing a home - which is why you shouldn't let politicians and political commentators tell you how difficult and what a mammoth task it is - it isn't. The only significant difference is scale.
You've got income and expenditure, things you can sell and things you need to buy and pay for. You've got things to maintain, things to improve and new things that could save you time and money. You've got to deal with those who break the rules and punish them when necessary and you've got to educate those who are going to one day take over from you. You've got to deal with your neighbours and settle your disputes where necessary. Perhaps most importantly, you've got to manage your budget.
With the national debt spiralling out of control as Gordon Brown tries to save the world (at the expense of British taxpayers) my mind wanders to the question of how we are going to pay this massive debt off. As a homeowner, virtually the first thing I think of when I acquire any debt (after the missus has decided how to spend it in the first place) is how am I going to pay it off? How much, how often and for how long?
To be honest, I don't think Brown has even considered this - probably because he realises that he will be long gone before the sheer enormity of the problem is realised - and I don't really believe Cameron has considered it much either, even though he is quite possibly the one who is going to be most exposed to the crap left behind by the NuLabour years.
If Cameron is really serious about gaining power and doing something positive in that time he needs to think about that now. I believe there are troubled times ahead for whoever wins power at the next election and that it is quite likely that whoever does get in isn't going to be around for more than the five years maximum between elections - so if Cameron wins at the next time of asking he isn't going to have much time.
And as any householder knows, when your debt is so large it is causing you difficulties in your everyday life the first thing you need to do is reduce that debt. Cameron can try and spin that anyway he likes, but the simple fact remains that to do that he has two choices - either put up taxes or reduce public spending.
That's the way it works in a household - you either increase your income (put up taxes) or decrease your expenditure (cut spending). My bet, at the moment, is that Cameron is planning tax hikes in the short term - another reason why he isn't likely to serve beyond one term - but with rising unemployment and rapidly declining productivity any increase in taxation is unlikely to raise the overall tax take significantly (if at all). Try and push it higher to increase the national income and you'll drive businesses away and it will fall further.
That's why I believe the only real option is to cut spending - public sector cuts. There are, of course, essential services that shouldn't be cut - the schools and hospitals that the left always whinge will be the first to go. They won't, but only the most entrenched leftie would argue that we really can't do without all those quangos, agencies and jobsworth five-a-day coordinators, street scene directors and anti-smoking patrols.
The NHS accounts for less than 20% of public spending, education even less and defence around 10% (if that). So you can leave schools, hospitals and soldiers untouched and still have scope to look at cutting a proportion of the 50% that isn't covered by those areas. A simple, across the board reduction of 20% cut in quango spending will save us some £25 billion a year - yep, really that much - without any increase in taxation or any noticeable cut in public services. You'd probably notice a significant improvement if anything!
A 20% cut now followed by a year on year reduction of 5% would contribute billions towards paying off the huge debt that Gordon Brown has saddled us with. You just tell every quango that their budget is to be reduced by 20% next year and let them work out how that pans out. If its budget is £5 million that means that next year it will be £4 million - if their budget is £500 million then next year it will be £400 million. Surely they can work that out?
It really isn't rocket science and isn't even that painful - unless you are a quangocrat - and it certainly isn't hard. So why won't they do it? Could it be that quangos have become the retirement home for has-been ministers and their cronies?
You've got income and expenditure, things you can sell and things you need to buy and pay for. You've got things to maintain, things to improve and new things that could save you time and money. You've got to deal with those who break the rules and punish them when necessary and you've got to educate those who are going to one day take over from you. You've got to deal with your neighbours and settle your disputes where necessary. Perhaps most importantly, you've got to manage your budget.
With the national debt spiralling out of control as Gordon Brown tries to save the world (at the expense of British taxpayers) my mind wanders to the question of how we are going to pay this massive debt off. As a homeowner, virtually the first thing I think of when I acquire any debt (after the missus has decided how to spend it in the first place) is how am I going to pay it off? How much, how often and for how long?
To be honest, I don't think Brown has even considered this - probably because he realises that he will be long gone before the sheer enormity of the problem is realised - and I don't really believe Cameron has considered it much either, even though he is quite possibly the one who is going to be most exposed to the crap left behind by the NuLabour years.
If Cameron is really serious about gaining power and doing something positive in that time he needs to think about that now. I believe there are troubled times ahead for whoever wins power at the next election and that it is quite likely that whoever does get in isn't going to be around for more than the five years maximum between elections - so if Cameron wins at the next time of asking he isn't going to have much time.
And as any householder knows, when your debt is so large it is causing you difficulties in your everyday life the first thing you need to do is reduce that debt. Cameron can try and spin that anyway he likes, but the simple fact remains that to do that he has two choices - either put up taxes or reduce public spending.
That's the way it works in a household - you either increase your income (put up taxes) or decrease your expenditure (cut spending). My bet, at the moment, is that Cameron is planning tax hikes in the short term - another reason why he isn't likely to serve beyond one term - but with rising unemployment and rapidly declining productivity any increase in taxation is unlikely to raise the overall tax take significantly (if at all). Try and push it higher to increase the national income and you'll drive businesses away and it will fall further.
That's why I believe the only real option is to cut spending - public sector cuts. There are, of course, essential services that shouldn't be cut - the schools and hospitals that the left always whinge will be the first to go. They won't, but only the most entrenched leftie would argue that we really can't do without all those quangos, agencies and jobsworth five-a-day coordinators, street scene directors and anti-smoking patrols.
The NHS accounts for less than 20% of public spending, education even less and defence around 10% (if that). So you can leave schools, hospitals and soldiers untouched and still have scope to look at cutting a proportion of the 50% that isn't covered by those areas. A simple, across the board reduction of 20% cut in quango spending will save us some £25 billion a year - yep, really that much - without any increase in taxation or any noticeable cut in public services. You'd probably notice a significant improvement if anything!
A 20% cut now followed by a year on year reduction of 5% would contribute billions towards paying off the huge debt that Gordon Brown has saddled us with. You just tell every quango that their budget is to be reduced by 20% next year and let them work out how that pans out. If its budget is £5 million that means that next year it will be £4 million - if their budget is £500 million then next year it will be £400 million. Surely they can work that out?
It really isn't rocket science and isn't even that painful - unless you are a quangocrat - and it certainly isn't hard. So why won't they do it? Could it be that quangos have become the retirement home for has-been ministers and their cronies?
Subscribe to:
Posts (Atom)