Where would you make the cuts?

[????]

yup.......same old Pavlovian response. We - all of us- can't afford a levelling up...so a levelling would be more socialist and equal

[SeanMacGabhann]

sorry - it wasn't a pavlovian response, I was picking from the article in question

"HOW MANY QUALIFY FOR A PENSION PAID FOR BY TAXPAYERS?

Five million employees in all. That includes 1.3m health workers with the NHS, 1.6m in local government, 600,000 teachers, 600,000 civil servants, 200,000 in the armed forces, 150,000 police officers and 50,000 firemen.

"

In retrospect I should have just quoted the paragraph in full

But I genuinely (and I'm not saying this for arguments sake) don't get

"We - all of us- can't afford a levelling up...so a levelling would be more socialist and equal"

We can't influence a levelling up maybe - but I don't necessarily buy the private-sector company line about how they can no longer afford to keep employees pension schemes in some sort of decent shape

And again, I'm not arguing - there isn't any point because I am totally serious when I say your vision of ditching the schemes in the public-sector will definitely happen. I just fail to see how this is a good thing. More equitable, arguably. But not a desired result if you were having this conversation 30 years ago

[Milo]

I wouldn't make any cuts, just increase (mainly income and progressively) taxation. Presumably we'll get most of the bank bail-outs money back when they are re-privatised, any losses take through city windfall taxation. But the already existing budget deficit should have been delt with through tax increases anyway (New Labour wanting to increase public spending yet not increase taxation was unsustainable). I probably would cut (mainly unemployment) benefits, but increase the minimum wage fairly substantially - having the dual effect of getting greater numbers working and shifting a burden from the tax payer over to industry, the current situation where it's financially better to stay on benefits than work is crazy and destroys peoples lives.

[Jeremy]

I see Alistair Darling is set to unveil a 50% tax on bankers bonuses. I guess he thinks it will be a popular move...

[????]

Well it will be Populist...effective, good for the economy, or make any meaningful difference to the defeceit probably not.

[????]

Sean back to pensions.

My original post was in response to Stereoforths - saying tax the private sector employees pension. Actually more equitable and to encourage basic rate tax payers in the private sector to pay into a pension (the huge majority of whom have almost no meaningful private pension fund or in for most no arrangements at all) would be to have a 40% relief on all contributions..I would cap this at say up to 40% of ?200,000 to avoid the extreme wealthy exploiting it. But this costs money, to attack pension incentives for anyone earning above the basic rate of tax is mad and extremley unequal when compred to Public Sector pension arrangements.

I'd like everyone to have a decent retirement pension and for the vast majority of the working population (who work in the private sector) that isn't evn remotely going to happen. Personally I'd like a decent state pension for everyone, index linked and set to say final salary of average earnings..sounds raesonable to me and fair for everyone. Those people who could afford it and chose to could thencould then make their own additiuonal arrangements for retirement through investments or possibly some for of private ppension. To pay for this we could scrap public sector final salary pensions which are actually linked to inflation and carry no risk compared to huge risk and non-inflation linked poor return private pensions about which the only incentive to take up is the tax relief that Steref wants reduced to 25%. To your point on private companies carrying a final salaery pension liabilities they just can't afford it given demography and health trends and nor can the state a pity but fact.

As an aside with the public sector it appears to me that the debate always centres roughly around these spurious assumptions

Public Sector workers are all completely altruistic

Public Sector workers all earn far less than private sector workers with similar skill levels/qualifications

Public sector workers could leave their jobs tommorow and walk into jobs where they will earn twice as much as they do now

Public sector workers are all nurses and teachers and doctors (actually 21,000 dentists, 440,000 teachers, 230,000 Doctors and 390,000 nurses in total ie including private)

And with Pivate sectors

-Private sectors workers are all city bankers or boardroom directors with 6 figure salaries, offshore funds, million pound bonuses and severl homes.

Basically most private sector workers are going to end up with pensions of a very few thousand a year, many don't realise this yet, but that's the reality.

[SeanMacGabhann]

I would certainly agree that most of those assumptions are spurious - and if I debate with those assumptions as a subtext I will shift the tone accordingly

[Marmora Man]

I will enter this debate.

The Guardian's diagram is useful in breaking down public spending into areas but doesn't and couldn't indicate (the picture would be huge if it did), the various sub headings of exenditure within, say, the Department of Health. It is not the departments that need to be cut but the many, various and seemingly worthwhile projects inside those projects which all have their standard bearers and champions. Within my two areas of practical knowledge - defence and health I know there are major elements of inefficient and a lot of simply redundant spending. Cutting the DoH spend need not mean reducing the number of nurses - but it might mean reducing the number of unnecessary training courses and meetinsg that nurses attend to the detriment of their primary duty.

I am with ???? in this argument. I would propose the idea of a total freeze on public spending for three years - holding the budget to the 2008/09 level until April 2012. Three years on absolutely no real growth in funds and, effectively three years of reducing value in budgets would concentrate managerial minds wonderfully. There are some structural costs over which Gov't has little control - unemployment benefit being one of the more obvious, public sector pensions being another. These costs will come in as unemployment grows or public sector workers retire. It would be the Treasury's job to absorb these costs and reduce sspending elsewhere to keep the total gov't spend at today's level.

At the same time there should be a major review - entitled "What is Government for". Most regular readers would know the outcome I would desire, but if done properly, independently and with real academic rigour perhaps the nation as a whole could decide whether it wants to be a high tax, high government spending society (as, say, Sweden is characterised) or something else. Whatever the options identified they could be presented as a democratic choice via a general election in 4 years time.

Two anecdotes to illustrate room for manoevre:

Discussion re funding of a particular DoH sponsored project:

Me: We estimate the budget to be ?89,000 for next year

DoH: Can't you make it over ?100,000 - we've a lot of money to spend before year end, if we don't spend it we won't get the same bugdet next year.

Discussion re major programme to change and "improve" appraisals and revalidation of Doctors.

Me: So the DoH plans to create a system to appraise and revalidate doctors professional skills? Will it make any real difference to the quality of patient care?

DoH: Probably not.

Me: But it will involve almost 1,000 doctor years to appraise and revalidate everyone of the 100,000 doctors in UK over a rolling 5 year period.

DoH: Yes - that's about right.

Me: So will you be reducing the number of hours devoted to patient care by that much or increasing the numbers of doctors by that much to maintain time spent of patient care?

DoH: Oh, I haven't thought about that yet.

Me: But you want to implement this from 2010.

DoH: Yes

Me: God help us!

[Brendan]

Marmora Man Wrote:

-------------------------------------------------------

> perhaps the nation as a whole

> could decide whether it wants to be a high tax,

> high government spending society (as, say, Sweden

> is characterised) or something else.

Don't mention Sweden's socialist nightmare: http://fliiby.com/file/340916/lscnouu71b.html

[????]

Sean to illustrate

From BBC

TUC general secretary Brendan Barber, who broadly welcomed much of the chancellor's statement, said: "Public sector workers - many of whom are low paid - should not have to pay the price for a crash they did nothing to cause."

So, all private sector workers caused it? Private sector Job losses and pay freezes and suspension of works and half pay and stopped overtime are all deserved?....

Simply put why on earth should the private sector alone face deal with the recession and catastrophic public fiinances Mr Barber much of which goes to fund public sector jobs and pensions

[SeanMacGabhann]

Hmmm. You're Reading more into his words than he is saying

[Magpie]

"Public sector workers - many of whom are low paid - should not have to pay the price for a crash they did nothing to cause"

I'm not sure that public sector workers can get out of the blame - or was the record increase in personal debt over the last 10 years entirely due to private sector workers? This is of course what caused the crash; people borrowed too much money to fund a property bubble. When prices started unravelling the banks were left with toxic assets and needed to be rescued. This has been spun around and all the blame has been put on the bankers, as the reality (ie it was caused by irresponsible borrowing) involves taking on some level of responsibility.

Secondly, the reason the UK is uniquely placed to do badly is because good old Gordon Brown spent all the tax receipts in the good years on public sector workers, so actually their guaranteed annual pay increases, and final salary pensions are contributing to the current crisis. My proposal would be to freeze public sector pay across the board, or adopt the Irish approach and have targeted pay reductions at the highest paid civil servants. This seems the equitable and fair response to me, given that those of us in the private sector have already seen pay cuts and job losses.

[????]

Magpie although I agree with your conclusion the credit crunch is a bit more complicated than that and largely involves highly leaveraged trading of various financiial 'assets' many based on property especially in the US - the UK homeowner (public or private sector) has had little effect in the toxcity of these assets on that given that there's been very little repossession of private property here and houseprices have not collapsed as much as many predicted (yet). The blame for the banking crisis is largely at the feet of US lenders, credit agencies, auditors, international investment banking (which the UK is heavily involved in), crazy corporate leaverage and lending, financial regulators for not regulating and the governments for letting this all steam ahead merrily. People in the UK borrowing and spending heavily hasn't really come into the credit crunch other than stoking the boom and now paying backk debt rather than spending.

Where I do agree is on your second point that as much of the governemnts spending has been funded by this mirage and now it's stopped and won't be returning for a while leaving us with horrendous ongoing public sector costs and no spare cash to deal with it in the hard times as our then Iron Chancellor apparently believed his own "No more boom and bust" mantra. I truly think he's incompetent and ill fit to govern on this alone let alone his myriad other faults and I've never voted anything other than Labour in a general election. That'll change next year. Yesterday's budget statement was a disgraceful excercise in trying to get relected rather than dealing with the very severe problems that face us all.

But back to the point, we are all suffering as a result and thus far the private sector the vast majority of whom are not employed in high paying city jobs have faced the brunt of the recession in terms of redundancy, pay cuts, lay offs, pay freezes, etc and the Public Sector's spokespeople lines on freezing pay (let alone job cuts) seems to be saying that the public sector should somehow be immune to this.....self-interest clouded in propoganda from those whom continually preach us on collectivism, fairness and equality. I'm fed up with it.

[????]

http://news.bbc.co.uk/1/hi/uk_politics/8407318.stm

This from the man who people say cares!!!!!...he cares about mr G.Brown PM being re-elected and not much else.....

This is damaging our county's economy and finacial credibility and u;ltimately all of us.... He's meant to serve the country not himself. Get him out.