Budget

[????]

Huguenot Wrote:

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> Fair comments, Quids, but no need to make it

> personal old thing.

>

> If London was a country in isolation, then you'd

> be paying no income tax at all (I average around

> 7%), it's one of the benefits of city states - all

> that corporation tax (18%).

>

> I didn't come here for tax issues, so much as for

> a progressive socially minded environment that had

> a good industrial infrastructure and market

> opportunity.

>

> Strictly speaking I'm a Blairite socialist, I

> don't believe in redistribution of wealth, I

> believe in equality of opportunity and

> meritocratic rewards.

>

> I'm not saying that public sector isn't bloated,

> I'm just observing that you don't suddenly turn it

> over in one budget. Marmora Man's ideas are

> desirable and workable in principle (although I

> can't guarantee that private companies don't have

> similar levels of administration).

>

> I don't know how easy it is in practice. Both

> teachers and healthcare workers have seen above

> inflation rises in recent years, but both are

> threatening to strike unless that continues. The

> latest NUT conference are balloting to strike

> unless they get what amounts to a 15% rise on

> average.

>

> A budget that fixes expenditure may well be

> perceived to be either reducing pay in real terms,

> or shutting hospitals or schools. You may get a

> strike which damages the economy more than the

> benefits accrued (don't forget public sector is

> 45% of GDP).

> I continue to argue in the main that governments

> have very little control over the 'big budget'

> elements, which is why we get so excited over

> nominal issues like quangos and MP's expenses.

Apologies for the personal thing - It reads worse than I meant it to sound :-$

[Keef]

Mick I'm interested to know how you'd cut back on uni education? I agree with what you say about it in theory, but how do you avoid it going back to rich kids going, and poorer kids missing out?

[????]

Keef I think there's been a decline in the number of the poorest kids (bottom decile) going to Univesity for some time now...

[Keef]

Yes, the poorest kids perhaps, but what about those who aren't exactly poor, but who's parents don't have the extra money for uni?

I was about the second to last year to get the old style grants, and withut them, I'd have had no chance of going anywhere!

[louisiana]

Marmora Man Wrote:

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snip

>

> I estimate this would save, over 5 years, ?50.6bn

> + non Defence spending of ?65bn. Which is well on

> the way to closing the black hole created by this

> government. It would hurt - but it's better than

> yesterday's budget which was a fantasy land

> exercise topped off with political gamesmanship.

Um, well, the IMF seem to think we are in much deeper doo-doo than the Government admits, which may prove to be even more challenging budget-wise.

IMF sees further 200 bn dollars UK bank losses.

"Britain?s banks have written off only a third of the losses they ultimately face, the International Monetary Fund said on Tuesday as it suggested lenders would have to raise at least $125bn in additional capital to rebuild their balance sheets.

"Britain?s banks have already written off around $110bn on complex debt securities and other assets on their balance sheets, but the IMF estimates they face another $200bn in losses over the coming two years as loans to companies and consumers go sour."

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There's been quite a torrent of denial from the Treasury, but if you ask me who do I believe, IMF or Treasury/Darling, I have to say it's not the latter...

And these numbers start to put the Budget numbers into context.

[Mick Mac]

keef. Id suggest significantly fewer people get to go to uni and the savings would fund means tested grants for tuition and subsistence. Currently poor students are put off by the huge debts they foresee on leaving.

[louisiana]

Ho hum, the IMF has basically saying the Treasury assumptions are hyper-unreal. So all these figures are, well, fiction.

[Marmora Man]

Keef,

Too many people go to university these days. I was lucky and came up thru' the Grammar / Technical / Secondary Modern school system where anyone from any strata of society** could get to a good school and on to university if he / she was bright enuf. By the time I was at university about 12% of all 19 - 21 year olds went. This system nurtured many of today's politicians and leaders of industry / commerce who were not all from a privileged elite. There was greater social mobility then than now.

With fewer at University the available funding can be provided at no cost to the student. It's only the pointless expansion to a target of 50% (plucked from the air) that has meant the end of student grants that earlier generations were fortunate enuf to receive.

** Yes I know the system wasn't perfect and some chose not to go to The Grammar" because of the cost of uniform or the need to contribute to family incomes - but the Crossman led campaign against grammar schools targeted the wrong end of the problem - it wasn't that the grammar schools were creaming off the best but that the secondary modern schools were failing the less academic.

[indiepanda]

Keef Wrote:

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> Yes, the poorest kids perhaps, but what about

> those who aren't exactly poor, but who's parents

> don't have the extra money for uni?

>

> I was about the second to last year to get the old

> style grants, and withut them, I'd have had no

> chance of going anywhere!

I was in the same camp, but I think the reason they could afford to give us grants because much fewer people went to university in those days. I'd vote for dropping the ridiculous targets they have for % of people in higher education these days - there aren't enough graduate jobs to go round, would be better if more people learned a trade.

As for the increase in tax to 50%... well, I suspect that's going to be a bit of an own goal. But then Labour seem pretty likely to lose the next election anyway so I guess they might as well get their parting shots in while they can. I have to admit the idea of paying 50% tax plus the 1% NI would be enough to put me pushing for the kind of job that paid that well.

There's something about the idea of giving away in tax more than you earn, to fund the generous pensions of civil servants and to pay MPs who can vote themselves inflation busting payrises and claims ridiculous expenses that would really stick in my throat. I wouldn't assume all of those earning over ?150k get to avoid tax either - there are going to be employed people earning at that rate and you can't avoid much tax via PAYE.

[????]

Yup - the irony of this 'no-one can fail' idiocy is 1000s of indebted twenty somethings with devalued degrees and awful propsects...

[Brendan]

All very well and good but what?s the use of technical qualifications and trades in a country that destroyed its manufacturing industry to replace it with a ?knowledge based economy? that could supposedly magic money out of nowhere?

[????]

Well, a useless apprenteship doesn't leave you with a significant debt and we have (until the recent shite) been pretty short of many 'trade skills'...and believe me we could do with those trad skills now. Still,the mines will be opened again soon..

[Brendan]

Well Britain does have an exploitable amount of natural recourses left and the ability to industrialise but that would put power back in the hands of those who control the means of production. Isn?t that the communist evil everyone has worked so hard to destroy over the last few decades?

Don?t forget the next government will be conservative so we can?t have that sort of thing going on. Primary production should be kept out of sight, out of mind and out of our voting constituencies, preferably somewhere far away and full of brown people who will be grateful for the work. But nowhere near where we go on holiday mind. Nobody wants to see that sort of thing.*

*Other opinions are available.

[indiepanda]

Brendan Wrote:

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> All very well and good but what?s the use of

> technical qualifications and trades in a country

> that destroyed its manufacturing industry to

> replace it with a ?knowledge based economy? that

> could supposedly magic money out of nowhere?

I ahree about manufacturing, but have you ever tried to find a decent plumber or decorator? Good trades people are like gold dust, I've had to wait months to get someone decent to do a job for me before.

[Huguenot]

Cuts....

Quids and MM have highlighted the need for cuts in the budget, which they didn't feel were apparent.

The Institute for Fiscal Studies (a big academic but politically neutral research group), said there were massive cuts in the budget. Perhaps they were there, but the chancellor didn't want to talk about them?...

The chancellor avoided mention of spending cuts in his budget speech, concentrating on a 0.7% a year increase in spending from 2011, which excludes investment in key areas such as schools and hospitals. But the IFS pointed to the 17% annual cuts in investment spending from 2011-12 which will see it halve in three years, concluding that this will mean total spending will fall by 0.1% a year over that period.

Once the effect of the 8% annual growth in debt interest payments and rising spending on unemployment benefit are stripped out, spending across government departments will have to fall by an average of 2.3% a year in real terms, said IFS economist Gemma Tetlow. Cuts of this order were last seen in the 70s.

She added that with the government pledged to continue increasing spending on overseas aid, it was likely that all other departments would face spending cuts. "Health, education, law and order would all experience real cuts."

Chote said it looked likely that the bulk of the savings required over the coming eight years would mainly come from spending cuts rather than new taxes.

"The main burden of the looming tightening - at least over the next few years - is likely to fall on the users of public services," he said.

So does that mean you actually got what you wanted? I'm guessing you'd disagree with the final statement, as you'd see the main burden of the cuts falling on pointless administrators?

[????]

And that is most of us, certainly me and my family but we've (UK PLC) been living beyond our means for too long and that means we need bigger cuts - Public Spending and the huge pension liabilities of the public sector are not sustainable. Nor, is the public sector very efficiently managed or run.....the service delivery has a lot to be dessired too. Hugenot your emotive "Are we to scrap pensions?" is the kind of emotive response that the Public Sector gives as soon as anyone dares to qusetion its cost and effectiveness....anyay, now we need to do these things or investors won't invest in our debt unless we can demonstrate we are dealing with our huge debts, as you say this is happening but it will take morethan the eduction of inflation it will take cuts....

[seamusmac]

I'm not an economist by any stretch of the imagination but this seems to nail the real reasons behind the tax hike.

Desperate Brown

[Brendan]

What I don?t get is why little Al and his big mate Gordon keep on reiterating that this is a problem that the whole world is facing.* Every country is up to its eyeballs in debt apparently.

Well if every country in the world is up to its eyeballs in debt, who do they owe all this money to and why don?t they just tell them to go fuck themselves?

*I understand that they are trying to absolve themselves and thier supporters because admitting to being short-sighted, self-serving and arrogant would mean that the entire country would similarly have to stare that truth in the face and quite possibly consider becoming decent and sensible. That would in turn lead to a moral obligation to publicly execute just about every senior member of the major political parties.

[Mick Mac]

They borrow money from investors, here and abroad, in the form of government bonds. The more they issue. The more they owe. Some governments may be unable to guaranteee repayment of their bonds to investors eg Ireland.

[Brendan]

Yeah I know. But in theory all investors are ?part of the world? so if the whole world is in dept who is profiting from the interest? Surely they can?t be in dept too? Whose economy are their profits being fed into or are the profits not as important as the political puppet strings that come with national dept?

Seriously why don?t we tell them to go fuck ?emsleves? What are they going to do? The lack of any profit they make being fed back into our economy surely can?t be worse than having it as a deficit in public spending?

[Mick Mac]

All governments of the world are in debt, but lots of people remain wealthy and invest in Government bonds. Governments always have debt to top up the tax take.

If you default on government debt you will not be able to raise money in the future. Russia defaulted on its debt thoughh, so who knows.

[candj]

Thanks for the Econ 101 lesson, Mick Mac. I do agree with all of your arguments especially the fact that taxing ?150,000 income at 50% will ultimately have a negative effect. Although it's only .05% of the population I don't doubt that we will see people who don't have to be in the UK leave or at least take their money elsewhere. It certainly does seem like a pre-election ploy on the part of Mr. Brown.

[louisiana]

Brendan Wrote:

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> What I don?t get is why little Al and his big mate

> Gordon keep on reiterating that this is a problem

> that the whole world is facing.* Every country is

> up to its eyeballs in debt apparently.

Except China. China is basically bailing out the US etc.

[Mick Mac]

Thanks candj - my economics is very low level, but nice to have someone agree with me, does not happen very often.

[????]

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