Responding to the protesters

 

               I was surprised how the government handled media interviews about the TUC protest against the cuts. They could have used them to set out more of the detail of the difficult financial situaiton we find ourselves in. They could have used it to ask how come we are going to get some unpleasant cuts, when public spending  is rising every year for 5 years?

               Many in the TUC seem to agree with the Labour line of doing less more slowly. Others think we should continue with the headlong growth rates of public spending  we were used to under Labour, denying there was any problem with all the borrowing.

               Ministers could, after all, have said on Sunday that they had just had a budget which relaxed spending controls and increased borrowing by £34 billion over the next four years compared with plans last June. How much more relaxation do people want and how much more do they think we can afford?  How much public service can we get for more than £700 billion a year? Is there room for any improvement in how we spend the money? Can’t the reduction in back office numbers be achieved by natural wastage?

              We need a more informed debate about just how much we are spending and borrowing. If we carry on borrowing too much, paying interest on the debt swallows up more and more of the spending. If we borrow too much, we could end up in a Greek or Irish predicament. Labour in governemnt recognised this, so they said they wanted to halve the deficit in five years. Looking at the huge sums of debt already built up, and looking at the likely growth in the debt, it is difficult to see how we could afford more than current plans, recently increased in the budget.

                I would like Ministers to remind people that this government plans to borrow an extra £485 billion over five years. That’s more than the total public debt in 1997. Surely even those in public service who do not like the fact must acknowledge, as Labour does from time to time, that there are limits to how much more we can borrow. We need a better debate on how we can run the public sector to achieve more with the large sums already on offer.

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81 Comments

  1. lifelogic
    Posted March 29, 2011 at 7:08 am | Permalink

    BBC seems very keen to point out how peaceful this, essentially state sector, near riot was despite the number charged.

    We cannot have this number of people over paid living off the backs of wealth creators often who often have no pension provision at all.

    First get rid of the prop BBC bias towards an ever bigger state sector, then stop the state doing half the things it does that are damaging or pointless and fire those doing this.

    Reduce redundancy to say 1 months wages – in the new easy hire and fire system jobs will be plenty so they can just get a new one without any delay anyway.

    Protect the voters from union blackmail with proper legislation.

    Some good news though reform, in part, of the absurd no win no fee litigation culture – alas too little to late, as usual, but better than nothing.

    • lifelogic
      Posted March 29, 2011 at 4:22 pm | Permalink

      Now I hear the EU wants us all to use electric or hydrogen car in cities – so now we we all need two cars or more. One I assume parked in some huge out of city car park. Electric cars also use more energy overall than efficient diesels anyway.

      Surely now everyone, even Nick Clegg, Porritt, Huhne, Major and Chris Patton must think the EU are all completely bonkers.

      Please can we leave now.

      • lifelogic
        Posted March 29, 2011 at 4:38 pm | Permalink

        Cameron pledges £3 Billion for a green investment bank? Just as the whole green agenda and nearly all green investments are falling through the floor as everyone but nutters have seen through the green con.

        • davidb
          Posted March 30, 2011 at 12:12 am | Permalink

          3 comments! Do you work?

          • lifelogic
            Posted March 30, 2011 at 10:01 pm | Permalink

            Yes from home perhaps I need to work a bit more now the banks are not lending any more.

      • Derek Buxton
        Posted March 30, 2011 at 12:50 pm | Permalink

        Unfortunately all the politicos you mention are fully paid up members of the eco fascist brigade, so no hwlp there.

    • Bazman
      Posted March 29, 2011 at 7:09 pm | Permalink

      How do you propose to make it easier to lay employees off and take them on than it already is? If you did make it you, you and you, as you seem to think it should be, how would you avoid exploitation by employers or do you not think it would not happen.
      Redundancy pay is very little for most people calculate it here.
      http://www.direct.gov.uk/dscript
      An extreme case of a 56 year old with 40 years service on £400pw would only be entitled to £11000. A 45 year old with 15 years service on the same £6800. If you think they are entitled to nothing you are wrong.
      Union blackmail? Such as? Very strict union laws often with employers using the law to circumvent any negotiation. Which is criminal.

      • lifelogic
        Posted March 30, 2011 at 10:05 pm | Permalink

        Easy fire would mean easy hire so anyone good could walk into a new job anyway – why should they get a pay of above 1 months wages at all?

  2. Alte Fritz
    Posted March 29, 2011 at 7:49 am | Permalink

    Indeed. Again, not a bad idea to base a debate on fact.

    There is a troubling argument from the hard left that if all the tax evaders and avoiders were made to pay up, then tax receipts would increase (£123bn, for example) and all would be well.

    You have said before that we are all tax avoiders when we claim allowances. The left argue that they mean the rich, not ‘ordinary people’. This is the germ of a pretty mad notion which could take hold. Those who peddle this line are in it for the long haul and will push the notion until it sticks.

    This is not yet Labour policy, but it appeals to many in the Labour party. Conservatives need to push a coherent line to anticipate this. It has already been argued on Newsnight, so be warned!

    • lifelogic
      Posted March 29, 2011 at 4:41 pm | Permalink

      If you avoid tax and prevent Cameron wasting it on something daft like HS2 or the green bank then you are doing the country and everyone a favour. Even more so if you spend or invest the proceeds wisely.

      There are few more moral actions you can take.

      • StevenL
        Posted March 30, 2011 at 1:00 am | Permalink

        Of course, the easist way for people to avoid tax is not to work in the first place, and just have a load of kids instead while the taxpayer houses and bankrolls you.

        Does this count as tax avoidance?

        • lifelogic
          Posted March 30, 2011 at 10:07 pm | Permalink

          Spot on lots of worker delay children because they cannot afford them because they are paying for other to have them.

  3. alan jutson
    Posted March 29, 2011 at 8:29 am | Permalink

    John
    The Government seem to have given up on any sort of sensible account of the deficit/cuts/increased spending situation.

    Face facts, it has lost the media war to the Labour spin merchants.
    I would guess that at present only one person in a hundred is aware that the government is spending more cash each year, than Labour did when in office.

    Government Ministers are/have been, an abject failure when it comes to being able to explain any policy in a sensible, simple and understandable form.

    With an increasing apparent “U” turn on almost everything that is announced, it is clear that policies which are first presented in headline fashion, have not been clearly thought through, or have not been finalised fully before announcement. Quite how much is due to change by the lobbying of Lib Dems, or total incompetence when being devised is open to speculation.

    Given the figures you suggest are in the red book (if that is the right colour), and are on record, I do wonder why Ministers simply do not refer to them on a regular basis, or are they under some sort of gagging order.

    How many Ministers have actually said to an interviewer, “actually public spending is rising each year for the next five years, and borrowing has increased, the cuts you speak about, is the reduction in the rate of increase”

    We are told that the public sector has employed more than 400,000 extra people in the last 4 years at huge cost, has anything got better , has anything improved, are systems more efficient.
    No.
    So if all theses people were to go, would it get any worse. ?

    John the simple fact is, if I did not read this site, I would be in the dark as well !

    • CHEESED OFF
      Posted March 30, 2011 at 2:25 am | Permalink

      “Government Ministers are/have been, an abject failure when it comes to being able to explain any policy in a sensible, simple and understandable form”

      Entirely agree Alan. I was amazed to see last summer the vast army army of advisors and spinners in Team Cameron. With so many on the books it’s ironic that a relevant message is missing…or p’raps it’s a case of ‘too many cooks’?

      Personally I believe that the ‘belt tightening’ theme has been superceded much too soon given the precarious state of the national finances and feel that JR always has his tongue in his cheek when he gives the real budget numbers with that ever-spiralling debt. If he and others with real, business experience had the levers of power I doubt whether we’d have seen such laxness and failure to right the Labour wrongs. As one example the continuing public sector recruitment and concurrent redundancy figures are a disgrace to anyone with business acumen.

  4. norman
    Posted March 29, 2011 at 8:32 am | Permalink

    Who cares how much the debt is? If tax dodgers like Barclays, Vodafone, et al paid their fair share then we’d not only be debt free, we’d all be living in Utopia. Our country’s problems are down to greedy corporations and people who live in more expensive houses than me and have a better car, job, etc. than me. Why is it fair that my taxes should pay for their health care and their childrens education? It’s not fair!

    /me stamps foot and sticks out bottom lip

    They (and by extension the Tories) are the source of all our problems.

    • Robert Eve
      Posted March 29, 2011 at 4:55 pm | Permalink

      Idiot.

    • APL
      Posted March 30, 2011 at 12:17 am | Permalink

      Norman: “Why is it fair that my taxes should pay for their health care and their childrens education?”

      But they don’t Norman, the ‘rich’ often send their children to private schools and have private medical insurance.

      So in actual fact, they pay twice, once through their taxes and again through the medical insurance and school fees.

      Philanthropic lot the rich.

      • norman
        Posted March 30, 2011 at 8:51 am | Permalink

        Well then (keeping on my leftist mindset that I set out with to make the original post) why is it fair that they can send their children to private schools and enjoy private health care and I can’t? Is that fair? If they can afford to do those things, and those of us toiling manfully to fill the supermarket shelves they take their food from, lay the roads they (or their chaffeurs) drive their Bentleys on, etc. can’t then something is wrong and we need government to intervene to perhaps with an ‘Equality of Opportunity’ Bill or failing that the old fallback of higher taxes and more spending.

        I’d rather like to be left wing, their lines of argument are so easy to construct – completely fallacious, but nevertheless tempting….

        • alan jutson
          Posted March 30, 2011 at 10:53 am | Permalink

          Norman

          I thought your first posting was a sort of joke, so I did smile at its contents.

          Your second post appears to suggest you were serious, so from someone who did not have the benefit of private education (secondary modern actually), private heath care, or a Bentley and who’s family lived in rented accomodation. Can I offer you the words of wisdom that my parents gave me some 50 years ago, when I asked a simple question.

          “I need some more money, how can I get some more money”

          The answer I got.
          “The only way I know of getting more money is to either work harder, work to improve yourself and get a better job, or get a second job, then when you have that extra money, be careful how you spend it, as the pennies look after the pounds”.

          I have followed that advice all my life, and not done too bad.

          What efforts are you making to improve your lot, if you are not happy with it?

    • Johnny Norfolk
      Posted March 30, 2011 at 8:34 am | Permalink

      Norman you do not make poor people rich my making rich people poor. Governments never pass on anything on, they just spend it on pet projects that do not benifit the people.

  5. Richard
    Posted March 29, 2011 at 8:39 am | Permalink

    It seems increasingly likely that the Coalition do not want the financial markets to know that the cuts are actually quite modest and this is why they do not counter the endless propaganda in the media about “savage cuts”.

    It is all about retaining market confidence, being able to carry on borrowing cheaply by keeping interest rates low whilst inflating at a gentle 5% per annum, thus reducing the value of our debts in ten years by half.
    Regular scenes of violent disruption in London are ideal for these objectives as they show the world how we are all hurting and how tough the economic policies are.

  6. Rodney Dawkins
    Posted March 29, 2011 at 8:57 am | Permalink

    I agree, on your point about communication. We may have missed a good opportunity to try to illustrate the scale of the challenge facing the country. But the fact is they don’t believe the government. UK uncut are convinced that there is an ideological victimisation going on. That there are thousands of companies and wealthy individuals that are simply trying to run away from their responsibility by evading tax. Their political leaders are not honest about the increases in public spending that stemmed directly from a credit boom. A credit boom that was allowed to happen under Labour’s watch – when they set up the FSA and deregulated the City to a dangerous level. While Norther Rock was handing out 120% mortgages, and consumers were taking out mortgage re-finance, yes more tax was being collected and used to fund a myriad of new public sector activities, but those years were boom years. I believe the Labour party and the UK uncut movement lack basic economic literacy.

    Under Labour’s watch we ignored the fact that foreign imports were undercutting domestic manufacturers. We didn’t get to hear about tens of thousands of jobs being lost while cheap products were made available in hight-street stores. Some of us watched the boom with horror, especially in 2004 when there seemed to be a perfect opportunity to calm the boom down by increasing interest rates – this did not happen. A fall in house prices and consumer spending was deemed to be a disaster. Yes, it would have reduced tax receipts, but it also would have acted as a reality check. What we are dealing with now is the aftermath of a very badly run economy in Britain from at least 2004 until they left office. But as I said, the left do not believe it. They prefer their paranoia instead, and their collective delusion that the money ~is all there, it is hiding in the pockets of the bankers and the wealthy. I just wish the opposition could be a bit more outspoken about their role in the current need for a spending retrenchment. Saying that ‘perhaps we relied a little too much on the City.’ is not enough. They need to stop the hate that they have begun to engender against an imaginary enemy, who apparently if they could only be turned-over and their pockets emptied out, then the whole deficit would be paid.

    A reality check is sorely needed. We need to apportion the deficit and communicate, for instance, the size of banker bonus in relation to the City’s handling of trillions in funds – since it is a global hub. We need to explain to youngsters that a company earning hundreds of millions may not be simply avoiding its tax in a mean-spirited way, but retaining its profits so that it can contribute to the real economy. We need a liberal commercial environment or else companies might never grow to the point where they are major tax contributors. The danger of driving commerce away is not a scary story, it is an economic fact of life.

  7. Electro-Kevin
    Posted March 29, 2011 at 8:59 am | Permalink

    The BBC do not help you.

    The licence fee is unpopular.

    (I thought Radio 4’s coverage was disgraceful.)

  8. Susan
    Posted March 29, 2011 at 9:06 am | Permalink

    To be honest, I don’t believe it would make a blind bit of difference if the Coalition did point out how much spending will still go up over the next five years. The point you are missing, is that society in Britain has changed dramatically over the period Labour were in Government. The UK is now a much more socialist Country. Reliance on the State is now expected rather than a mere safety net and the public still has the spend mentality. Labour were able to build up this dislike of big business, banks and enterprize before they left Government and the public have accepted this. All these people are seen to be to blame for the financial crisis and the public see no reason why they should suffer for it. This of course if not true, but when did the truth ever matter when dealing with propaganda that has worked.

    This has not been helped by the fact that the Conservatives themselves did not set out before the election how bad Britains financial problems actually were. Furthermore, when coming to Government, in Coalition, the Conservatives retained the 50p, which was put there for no other reason but spite by Brown, and continued to bash the bankers. Therefore, the message to the public against those who actually create the wealth, has been very much reinforced by the Coalition itself.

    Britain has very few successful growth areas, one was, and is, the financial sector the other was the oil industry. The new tax on the oil industry was a mistake. This will take much needed investment away. Old fields and exploration are very expensive and this extra tax will see many projects cut and jobs lost. Bottom feeders will see no reason to keep more expensive old fields alive. However, I have accepted already, that this Coalition would rather please the public than do what is right for the British economy. Growth will not return until taxes are cut for high earners, but even if it did, who would the jobs go to. Poor education has ensured that Britain does not have a good skilled work force to take the jobs. In the private sector skilled jobs are often left unfilled until someone from abroad can be recuited to take them. In a lot of cases public sector workers who come out of work would not have the right expertise to work in the private sector. So would the UK be reliant on immigrants yet again to do the jobs, British people cannot.

    Then there is Cameron himself, I have lost count of the number of people who have said to me he is just another Blair. The Libyan adventure seems to have just proved this view to be true.

    I am afraid unless this Coalition can get spending under control, which is not the case at the moment, cut regulation on business and lower taxation especially for high earners, Britain will not see the revival in the economy it is looking for. It is, for instance, a lot of good increasing the personal allowance for low earners, which costs so much, when there are no jobs for them to go to. Coalition for the Conservatives has merely tainted the brand and alienated true Conservative voters.

    • Robert
      Posted March 30, 2011 at 10:44 am | Permalink

      Very well put, a cogent articulation of the problems facing the so-called Conservative party.

    • Acorn
      Posted March 30, 2011 at 2:16 pm | Permalink

      Well put Susan. The question is; have we gone too far over the cusp to terminal socialism, to attempt a rescue?

  9. Brian Tomkinson
    Posted March 29, 2011 at 9:19 am | Permalink

    This government has been singularly bad at public communication. Almost a year in office they have left it too long to explain clearly and concisely the economic inheritance from Labour and what they are actually doing to resolve it. The failure started even before the election when the stark facts about the economy and what needed to be done were disguised, presumably not to scare off the voters. Positions have become entrenched based on a false premise that the government is cutting (when it is actually increasing spending) too much and too fast (when the debt is actually going to increase by over 50% in 5 Years). To many of us who take a particular interest, the government is not being too bold in dealing with our debt problems but too timid. The government has added to its problems by ring fencing areas of expenditure and “finding” money for all sorts of things when they have told us there is no money. The EU can have as many £billions as they ask for; we can give foreign aid to India which is a nuclear power and has a space programme; we can fire missiles and bomb Libya….The government has also shown a lack of competence and weakness by prematurely announcing policies and when the media and some sections of the public speak out against them abandoned or changed significantly the policy. This all gives encouragement to those who want to change the perceived government economic policy. We can look forward to a year of trouble ahead.

    • alan jutson
      Posted March 29, 2011 at 4:06 pm | Permalink

      Brian
      Agreed, my version still in moderation.

    • CHEESED OFF
      Posted March 30, 2011 at 2:46 am | Permalink

      Again I agree absolutely – see above.

      Cameron and Crew wantonly disregarded the advice given on this site by its host and many of its contributors before last year’s election and they have continued to do so.
      Instead he favoured the Big Society nonsense and ‘softly softly, catchee monkey’ approach. There is much disappointment within the ranks and that could well fester into something more dangerous for these faint-hearted ‘Conservatives’.

  10. Javelin
    Posted March 29, 2011 at 9:28 am | Permalink

    Melanie Klein (the child psychiatrist) has a theory called object-relations and a stage in the childs development called the “schizoid position” – this is when the child sees the Mother as good or a bad. Part of childs development is to understand that the Mother can be both good AND bad, and to do so involves a more sophisticated world view.

    This “immature” schizoid position is one politicians often find themselves in.

    When half a million people see the cuts as a bad thing. I think they deserve to be listened to. I think their point is that GDP will suffer with cuts being so high. As I posted recently, in 2015 8% of Government spending will go on interest repayments and 25% on PFI, pension and interest repayments. I think 25% of taxes being non-productive will make a serious dent in the GDP. I would reckon more than 5% but not as much as 15% of GDP will drop away.

    So lets believe that the protestors and the Labour Party are right – that GDP will drop away.

    But on the other hand the Labour Party must accept that the massive scale of the debt is caused by the false believe that Government spending to date has been an investment and something you cannot escape from paying back. They have had 12 years to prove that Government spending was an investment and produced more tax than it cost – and that has been proven WRONG – by the VERY existence of the debt.

    A lot of Government spending is an investment, alot is humanitarian – but a lot is also of an unproductive benefit.

    If this Government does not seriously target unproductive Government spending (interest repayment included) that is a very real danger that the 5-15% fall in GDP cause by the (absolute minimum) 25% of unproductive spending over the next 5 years will cancel out any growth in the private sector and cause us to fall back into a cycle of debt and failure.

  11. waramess
    Posted March 29, 2011 at 9:33 am | Permalink

    The debate has become insufficiently robust. Two left wing governments slagging off each other over whether it should be slightly more or slightly less is not the direction we should be heading.

    What exactly is the fiscal difference between Balls and Osborne? It is not meant to be a criticism of Osborne that he is a Keynesian nor that he is left of centre nor that his policies are less than a whisker away from those of Balls; just that he and his leader are in the wrong party.

    We have no alternative policies to those proposed by Labour’ just a couple of guys who would have us believe they lead a more professional bunch who can sort the mess out.
    I don’t believe that for a minute but, to their advantage of course, the jury is still out.

    By their own account this years deficit is larger than that ratcheted up under Brown. OK much of that is in interest payments but that does not detract from the fact that is was forseeable and in five years time we will not have repaid one penny of indebtedness even if everything goes as planned, which it will not.

    No growth, no prospect for growth, wealth creation being sucked from under us by interest costs and only oil revenues to stand in the way of a total collapse.

    This is no way to go and all of our right wing MP’s know that, so where are the protests? Or, is it all about tribal loyalties and pay slips?

    • norman
      Posted March 29, 2011 at 6:09 pm | Permalink

      There’s a Tory MP, can’t remember his name but sure he is something to do with the Treasury, who now and again pops his head above the parapet and posts on The Spectator blog.

      Every single post he makes runs along these lines:

      ‘We’re saving the country, thanks to us your children’s future is now bright and money trouble free whereas if Labour (boo hiss!) had won the last election it would have been a millstone round the necks of the next five generations. Come frolic with us the green fields of super growth and a debt free future’

      He doesn’t seem to realise that a £1.3 trillion debt as opposed to a £1.4 trillion debt is little more than a rounding error, especially given the vagaries of interest rates. Either that or he thinks we’re all idiots, which is a fair assumption given that Labour is leading in the polls and will no doubt give the coalition a bloody nose in 5 weeks time.

      By the way, I wouldn’t bank on oil revenues. Already paying a super tax before this budget, now paying an uber tax, one company, Statoil, already put a hold on a £3bn development, and I expect current fields will see a drastic cut back in planned investment which will cause a sharper production drop than forecast as the small companies which now inhabit the North Sea seek friendlier climes for their (relatively compared to the majors) small budgets.

    • Derek Buxton
      Posted March 30, 2011 at 1:00 pm | Permalink

      This has been the problem since well before the Election. Cameron should have been fighting for months before it happend, but he didn’t. Now he is/ should pay the price.

  12. Scottspeig
    Posted March 29, 2011 at 10:07 am | Permalink

    I would just rather see the government enact the cuts that were promised and then at least the Socialists and BBC can then be making a truthful stance about the “cuts” – as far as I can see, borrowing money does not equal cuts.

    This government is a mockery of true Conservative thinking (thankfully, there are a couple of good initiatives at least!)

  13. Bill
    Posted March 29, 2011 at 10:08 am | Permalink

    How the “cuts” are applied is paramount.

    Most business’s when faced with budget reductions start off by cancelling cleaning contracts or getting rid of the canteen …or axing the apprentices.

    Instead of looking at…say why it takes two people to fly to Singapore club class to secure a contract. Or Is it necessary to have Sunday working at double time instead of working later hours during the week at time plus a quarter?

    Gradually though they see sense and a new plan is drawn up.

    The perception in this round of savings is that the establishment, the bureaucracy is looking after itself (look at the Guardian’s job pages) and the savings are being taken at the coal face.

    Such as soldier’s being given notice while in Afghanistan, RAF trainees being made redundant and headlines about NHS staff

  14. English Pensioner
    Posted March 29, 2011 at 10:21 am | Permalink

    I think the Tories are doing the right things, although I feel (unlike the TUC & Labour) that they should be done far more rapidly.

    But I think their PR is abysmal ! They know what they are doing, but are failing to get it over to the general public and need to “dumb down” the language that they use in order to get it over to the less well educated.
    Why not refer to “economies” rather than cuts, this is what we’re doing in our household; we’re just trying to save by cutting down our car mileage by better planning of our journeys, by keeping a lookout for any special deals at the supermarkets, by eating out slightly less often or having maybe cheaper items from the menu. Not a lot, but enough so that we are still living within our means.
    These are the sort of things government should be doing, and putting it into this type of language for the public; the sort of language that “Sun” & “Mirror” readers understand.

    It is no use talking about the deficit when most people don’t know the difference between deficit and debt, including an ex-Labour minister, who suggested it could be paid off over a longer period, like a mortgage!
    It’s time the Tories dropped the Public School and Oxbridge language and started to use words the general public understand. If there is one thing that Labour is better at than the Tories, it is their ability to get their message over to the general public.

    So, as far as I’m concerned, its not “better informed debate” we need, but a better informed general public who actually know the meaning of the word deficit, and that means far better PR by the Tories.

    • alan jutson
      Posted March 29, 2011 at 4:10 pm | Permalink

      English Pensioner

      Agreed, getting across the facts to the population are the problem.

      The government has failed, and failed badly in this regard.

      • lifelogic
        Posted March 30, 2011 at 10:16 pm | Permalink

        Anyone appointing Chris Patton to the BBC clearly has not interest in getting the fact over to the population just stuffing them with pro EU, pro green, pro big government propaganda.

  15. Michael Read
    Posted March 29, 2011 at 10:26 am | Permalink

    In local government, the cuts should have gone much deeper. True, planned expenditure is being trimmed. But all the ridiculous vanity spending remains. They are spending to their budgets.

    In the London Borough of Islington, and there are staffing cuts of just 300 or 5% of the total workforce or the usual annual natural wastage rate for the last five years.
    No senior officers – numbering nearly 200 and defined as those earning over £80k are being cut.

    Cuts are, however, taking place in services for kids and the elderly and the bin men and girls are being casualised. Handy material for the Labour party seeking to distract attention from the real story.

    • Johnny Norfolk
      Posted March 30, 2011 at 8:38 am | Permalink

      Governments should lay down the things a local authority MUST do, That would protect the front line. They would then be forced to cut the admin, and reduce non essential pet projects.

  16. Mark Baker
    Posted March 29, 2011 at 10:28 am | Permalink

    Richard Murphy says the money can be raised through collecting tax that is currently evaded and avoided. The TUC buy his nonsense and I see no one other than Tin Worstall publicly refuting these arguments, which are the core of the Uncut movement.

  17. Winston Smith
    Posted March 29, 2011 at 10:43 am | Permalink

    The problem is yet again, a failure of communication. I see two major factors. Firstly, the media. The left-wing State broadcaster controls more than half of broadcasting and when you include internet, I would estimate that more than two thirds of the population are exposed BBC news output. Labour recognized the power of the BBC and installed their placemen to manipulate output. Also, much of the print media commentariat are part of the London based left-leaning liberal elite, living in their own bubble.

    Secondly, Conservative leadership communication is nothing short of woeful, except for Cameron’s personal PR. Ministers, that I see on TV, are simply awful. Adam Afriyie was on Sky News recently. He is articulate, intelligent and very persuading. He demolished the interviewer. He is a self-made businessman from a working-class background. Why is he not in the Cabinet? Then, I watched Theresa Villiers appear incompetent and entirely unconvincing. I cannot see anything changing until Cameron and his clique are removed. I will not vote Conservative until this happens (unless there is a remarkable change in policy and direction).

    • APL
      Posted March 30, 2011 at 10:48 pm | Permalink

      Winston Smith: “I cannot see anything changing until Cameron and his clique are removed. ”

      Hear hear. Sadly our host boast of voting for Cameron.

  18. fake
    Posted March 29, 2011 at 10:54 am | Permalink

    I think the point is that most of these people don’t believe in more debt.

    They believe in raising more taxes, they go on about “the tax gap” etc.

    • StevenL
      Posted March 30, 2011 at 1:27 am | Permalink

      Yes, they are happy with state spending at 50% GDP and want tax to rise to meet it. Then they’ll want 60%, then 70% etc. They howl about how evil the tories are for wanting 40%.

  19. Denis Cooper
    Posted March 29, 2011 at 11:55 am | Permalink

    It’s really far too late to start educating the public about the precariousness of their government’s financial position.

    The time to make a start on that was in the spring and early summer of 2009, when it became apparent that the Labour government had arranged for the Bank of England to rig the gilts market so that it could carry on over-borrowing to fund its over-spending during the year leading up to the general election.

    For some reason Osborne chose not to speak out about that and condemn it.

    I repeatedly warned about the potential political consequences, for example here in April 2009:

    http://www.johnredwoodsdiary.com/2009/04/16/carry-on-saving-or-spending/

    “So like last week, the Bank is buying back previously issued gilts faster than the Treasury is issuing new gilts to fund the budget deficit.

    Eventually this silly game must come to an end, but basically the Government has a novel funding mechanism which should see it through this year at least.

    George Osborne has nothing to say about this “money-go-round”, even though it could just prevent him from becoming Chancellor … ”

    For some reason the Tory party couldn’t even bring itself to drive home to the public the easily understood message that the government was having to borrow a quarter of all the money it was spending, and clearly that couldn’t continue.

    To my knowledge that simple formulation came up on only a couple of occasions even during the general election campaign – once when Clarke used it in a newspaper article, and once when Cameron said it almost as an aside during one of the TV debates.

    It should have been said again and again, and it should have been on billboards all around the country, but it wasn’t.

    And it’s still more or less true now, yet swathes of the public still haven’t grasped it; not because they’re stupid, but because it hasn’t been explained in terms which they can immediately understand when they have so much else to think about in their everyday lives.

  20. acorn
    Posted March 29, 2011 at 12:06 pm | Permalink

    “We need a better debate on how we can run the public sector to achieve more with the large sums already on offer.” [JR]

    To do that we will have to find a cure for “Baumol’s Disease”. The vast majority of the population has no concept of what £485 billion extra borrowing means in terms of their household weekly income. They have no concept of the £90 a week, per household, that is being spent for them on health care or the £70 h/w, spent on education of our kids. Or, the average £180 per week per some households being paid to other households in benefits and the like.

    Paying £35 pounds per household week in government debt interest payments, starts to look like loose change. Having to borrow £115 a week from someone, every week, to help pay the above; painful.

  21. Mike Stallard
    Posted March 29, 2011 at 12:43 pm | Permalink

    With the Euro just about to explode and the government blithely continuing Mr Brown’s disastrous flight into bankruptcy, it really takes the biscuit for people to grumble when they think they might have to do something to save their indebted country.
    How anyone who has a smigeon of self respect can put on a balaclava and break shop windows or pretend (Ken Livingston) that there actually is no debt at all or support the idea of cuts (BBC, Ed Miliband) when they know it is a lie, I cannot understand.
    There is so very much that an opposition could say. But the TUC controlled left is still way back a hundred years ago with the Tory Landlords in their bowler hats and the Dockers’ tanner.

    • StevenL
      Posted March 30, 2011 at 1:30 am | Permalink

      It’ll get madder and madder as the wheels start to fall off. With China, Brazil etc growing at 10% and the west growing at 1% the squeeze will only get tighter.

  22. BobE
    Posted March 29, 2011 at 1:28 pm | Permalink

    Reduce all public servant salaries so that none are earning more than the PM. This should include council employees as well.

    • lifelogic
      Posted March 30, 2011 at 10:18 pm | Permalink

      And fire the 50% who are pointless or just do damage.

  23. Alte Fritz
    Posted March 29, 2011 at 1:45 pm | Permalink

    You ask “How much public service can we get for more than £700 billion a year? Is there room for any improvement in how we spend the money?” Here is a sugestion.

    This monring, a young man from British Gas telephoned to urge the benefits of using them as my gas and electricity supplier. He wanted to do the whole thing by phone; nothing in writing would answer my questions.

    He told me that 4% savings against my current supplier would result in a reduction in monthly cost from £165 to £95. We talked around this for a while in terms of percentages and fractions. Nothing complicated; I can barely add up, but the poor lad was at sea. He admitted to not knowing what ‘a third’ is.

    Is this what 140 years of compulsory education as well as vast public expenditure leads to? A lad who cannot perform the most basic mathematical tasks?

    One reason, I think, why the public is so easily hoodwinked about public expenditure and other public issues is that the simple mental ability to work something out by one’s own wits has gone.

    • Mike Stallard
      Posted March 29, 2011 at 1:54 pm | Permalink

      This is a very perceptive comment indeed. Well said!

      • Electro-Kevin
        Posted March 30, 2011 at 12:30 am | Permalink

        People think that English – the language of Shakespeare is the most important.

        It is not. Shakespeare granted importance by science, not by literature. He would have been of no consequence without it.

        The language of mathematics is what commands true power.
        (Hat Tip Niall Ferguson.)

    • StevenL
      Posted March 30, 2011 at 1:38 am | Permalink

      I don’t know if you’ve ever done telesales for one of these big utilities firms, but the last thing they want is you to be able to think indepedently or add up anything more complicated than your sales target.

      I once worked for one, which shall remain nameless, where we called people who had applied to leave and routinely represented ourselves as £80 a year cheaper than other firm by virtue of having no standing charge, without explaining we added it to the first X number of units.

  24. Lindsay McDougall
    Posted March 29, 2011 at 1:50 pm | Permalink

    The only MP on the Left who has been honest about the consequence of not cutting public expenditure is Caroline Lucas of the Green Party. She said during the General Election campaign that she would cut the Trident replacement and more or less nothing else, and would be content for total taxation to rise to 45% of GDP. The Green Party is in part the old Communist Party in exile, so this shouldn’t surprise us. Anyway, full marks for candour, Caroline, although I’m a little bit surprised that you got elected.

    By contrast, the Balls/Milliband duo are complete charlatans. They know full well that the Labour government was spending £4 for every £3 of receipts. They also know that their policy of “gentle cuts” would result in the total government deficit rising to more tha 100% of GDP. At that level, bond rates would rise to about 7% and a whopping 15% of public expenditure would be debt interest. Don’t go there.

    This is a Tory Wet government, with its love of the EU and its reluctance to cut public expenditure adequately. If it gets rid of the structural deficit, I might vote for it again. If it doesn’t, I probably won’t. I voted to kick Edward Heath out in February 1974 and I voted to kick John Major out in 1997. Both votes came easily.

    • Lindsay McDougall
      Posted March 30, 2011 at 12:09 pm | Permalink

      PS One of the things that I liked about Enoch Powell was the title of his first volume of collected speeches “A Nation Not Afraid”.

      In contrast, many of our politicians and voters seem to live in the realm of Hilaire Belloc’s poetry:
      “And always keep ahold of nurse
      For fear of finding something worse”

  25. Conrad Jones (Cheam)
    Posted March 29, 2011 at 2:32 pm | Permalink

    Mr Redwood,

    I agree totally:

    “We need a more informed debate about just how much we are spending and borrowing.”

    We certainly do.

    Unfortunately, under Labour – there was NO debate or discussion with the Public on how to solve the Banking Crisis. Gordon Brown is an easy target but it is not just one man that is causing this wreckless disregard for the voting public’s opinion on how to solve issues such as debt and humanitarian issues in the Middle East.

    The debt Crisis in Iceland was tackled differently – they allowed the Banks to fail and are now setting a solid financial foundation. Our financial foundations are likely to change into quick sand – dragging people into an abyss of debt that can never be repaid.

    Obama did not debate with the American people on whether he should allow American service personnel to risk their lives in Libya. He used the UN and changed the term “War” into “Humanitarian Intervention”, as if we are dropping food parcels and not tomahawk missiles on the Libyan people.

    There are issues to be addressed with the Public sector spending cuts. Perhaps we are spending too much on Council and Government services. If we are, then why haven’t these issues been addressed before. Why wait until the Banks start collapsing through fraudulant securities manipulation, mostly based on an inflated Housing market which they profitted from.

    In your piece you mention the waste of Government spending through increased interest payments required to service an increasing debt. Absolutely true – but; you did not mention the £200 Billion Pounds that the Bank of England created and gave to the Banks for a problem that they themselves caused.

    The focus on the public sector workers who did NOT cause the financial crisis – by the Government; does seem to be a deflection of blame onto a group who provide – in some cases – life protecting services; and consequently has the appearance of being slightly unfair.

    We also need to establish how much money we are currently spending in Libya. The American Tomahawk missiles cost a million pounds a piece. I believe over a 110 have been used so far. That’s 100 million pounds just to allow the No Fly Zone to begin.

    What the Government is saying by it’s actions is that it’s ok for Banks to be profligate in it’s risk taking for pure profit (they will be Bailed out anyway), it’s ok for tax payers money to be spent on killing Libyans in what is essentially a civil War. But it’s not ok to “waste” money on Nurses and Council Services.

    If public sector spending is out of hand then this is not the time to deal with it, that time passed in 2004 when Tony Blair spent some of his time doing Arms deals with Gaddafi. No doubt backed by public sector money guarantees for private sector “business” deals.

    We cannot detach Libya from this issue of spending cuts because War is by far the most costly Government activity. When talking about Government waste we should focus on War and Bank Bail Outs.

    So I do agree with you – we must cut the waste of public money into unworthy casues now. As you point out, the debt is getting bigger and the interest payments will eventually mean that our direct taxes will mainly go to servicing this debt.

  26. Conrad Jones (Cheam)
    Posted March 29, 2011 at 2:52 pm | Permalink

    When talking about Tax Avoidance, it should not come as a surprise to most people, that various Companies who have their Corporate Headquarters based in Bermuda or the Bahamas have their Main Offices located in the UK. This is pure tax avoidance.

    I don’t like the idea of Public sector Pensions being many times the value of my own meager private sector pension, but this “Hate the Public Sector” worker rubbish is nonsense as it completely deflects blame from the Government who ( especially Labour) who allowed for this waste to go on.

    Labour’s contributions:

    1. War debts in Afghanistan
    2. War debts in Iraq
    3. Public Sector Pay Rises
    4. Public Sector Pensions
    5. £200 billion pounds given to private Banks to encourage more risky gambling

    Let’s not forget David Cameron demanding Britain get’s involved in the Civil War in Libya. How much is this going to increase the National debt. Some say “charity” should begin at home.

    Why is it that the tax payers get lumbered with toxic debt discarded by Private Banks?

  27. John Ward
    Posted March 29, 2011 at 3:39 pm | Permalink

    There are two holes in Mr Osborne’s bucket:

    1. The EU, whose bailout demands have effectively wiped out all UK expenditure savings to date.
    2. Interest rates, which must rise now that China is using them – and the Fed Board Members make-up is increasingly hawkish on upping rates.

  28. REPay
    Posted March 29, 2011 at 3:51 pm | Permalink

    John, you are so right about the need to make the case for cuts. I think some idea of how much per person Labour borrowed and the debt per person (or per houshold) and how this is growing should accompany ever announcement related to money. As I have said here before the Government’s PR is terrible – partly because it is focused too much on the media and not enough on the voter. (This too was Labour’s mistake and the style of this government is too close to comfort to that of Labour.) Come the next election the message will be – bankers caused the problems and the public sector and poor had to pay. A one term government. If they get on top of the deficit Balls will come back and pick up turning the UK into a public sector dependant society where what government gives you (or lets you keep) is all that is available.

  29. Geoff not Hoon
    Posted March 29, 2011 at 4:09 pm | Permalink

    Mr. Redwood, A century ago the late James (Lord) Hanson said to a small group I was in “I would be delighted to cut my advertising spend by 50% but none of this lot ( his marketing group in Hanson Trust) will tell me which 50%”. So it is with the spending of taxpayers money. At the top government know whatever they set out as “fiscal policy” has the backing of law and we simply pay up. Until either a party or the public say no we will not continue taxes at this level labour or sadly conservative will continue on with the eventual total run down of what was once an economic powerhouse. As Lifelogic says we have to be out of the madhouse by then.

  30. Winston Smith
    Posted March 29, 2011 at 4:49 pm | Permalink

    The biggest spender on advertising became the State under Labour. It now dwarfs the budget of the largest corporations. I listen to commercial radio at home and at work. The majority of all radio adverts were from State agencies. This slowed to a trickle in the summer. However, I have noticed they are becoming more and more frequent. The old favourites are back: level crossings, look out for motorbikes, become a teacher, TFL are doing a great job, etc. They are now joined by incessant adverts to join MI5; “remember, do not tell anyone about your application” (no, I’m not joking) and the Police. What happened to curtailing COI expendituret?

    http://www.bbc.co.uk/news/technology-10851273

  31. rose
    Posted March 29, 2011 at 5:38 pm | Permalink

    My reaction too. How can the government spokesmen be so stupid as to miss the trick every time? “Cuts – what cuts?” should be their starting point, whenever they are interviewed, and simple numbers should follow. It was the same in the eighties, and the Conservatives have never lived down those lies either.

    • APL
      Posted March 30, 2011 at 7:45 am | Permalink

      rose: “How can the government spokesmen be so stupid as to miss the trick every time? “Cuts – what cuts?””

      You’d think they were doing it deliberately. Why would they do that?

      • rose
        Posted March 30, 2011 at 11:05 pm | Permalink

        I fear, APL, it is because they wish to deceive the investors, and carry on borrowing and spending, and at the same time printing money, without being found out in time.

  32. Stewart Knight
    Posted March 29, 2011 at 6:14 pm | Permalink

    This is a problem I have been talking about, and frustrated over, for more than 15 years; the Tory inaction against a dishonest onslaught from Labour and their supporters.

    I have said year on year that the Tories need to fight Labour on their own ground and using their own tactics; that’s why the party was out of power for so long despite lies, deceit and dishonesty being the order of the day and official tactics of Labour since 1994.

    Fight them on their own terms and they will be forced to fight on ours. Mandelson, Campbell, Blair to name but a few, had a free rein to lie and deceive in order to discredit Tories old and new, policies old and new, and the facts, old and new. The BBC has felt free to do so because they are fallowing the lead of Labour and the unions.

    We should and must do the same if Labour are to be denied a win at the next election by default and deceit.

  33. Robin
    Posted March 29, 2011 at 6:21 pm | Permalink

    Well said John!
    David Cameron does not appear to be up to the job. He needs to get his act together and stop being afraid of the bbc.

    • APL
      Posted March 30, 2011 at 10:55 pm | Permalink

      Robin: “He needs to get his act together and stop being afraid of the bbc.”

      How about abolishing the BBC license fee. Force the BBC to go voluntary subscription overnight. With Digital Terrestrial Television, the technology exists to facilitate a subscription based BBC.

  34. BobE
    Posted March 29, 2011 at 6:54 pm | Permalink

    Well in four years time there will be another labour government and I’ll wager it won’t be let by a milliband.
    I was asked today why this would be the last census. My reply is that Britain won’t be a country in 2021, It will be a region of the EU, or the EUSSR. So no more need of a census.

  35. BobE
    Posted March 29, 2011 at 6:54 pm | Permalink

    led not let, sorry

  36. Bazman
    Posted March 29, 2011 at 6:55 pm | Permalink

    The race to the bottom continues. Instead of cuts in corporation tax in which case the money is just spent on making the directors richer. The money spent on these cuts should be invested on the infrastructure and training of the workforce of the country. The companies would then want to come here. If you think they are in a country for the main reason of low taxes then you are wrong.

  37. Bernard Otway
    Posted March 29, 2011 at 7:15 pm | Permalink

    If this party had been visited exclusively by Aliens from 100 light years away in the last week
    they would NOT know how to tell people about it because they are USELESS in getting anything across especially countering anything the Liebour Liars say about the NASTY CUTS
    and what transpired over the weekend. I give you John some free advice ,get Cameron to talk to and LEARN how to do anything right by bringing FW De Klerk from South Africa to explain HOW he transitioned that country from Apartheid in 1988 through unbanning the
    ANC and releasing Mr Mandela to 1994 and what followed with minimal bloodshed,and getting the Whites who were anti to ACCEPT. however I wont hold my breath.

  38. Bryan
    Posted March 29, 2011 at 7:21 pm | Permalink

    Does Mr Cameron ever hear what you are saying John?

    The inept naive PR team conspired to ‘lose’ the election when it should have been a shoe-in. They are losing the argument now by, again, letting the Labour/Union machine take the initiative.

    Who cares if they and Mr Balls are talking rot – it resonates with the majority because the Conservative response is always on the back foot.

    I ask again – does Mr Cameron listen to other than those who tell him what he wants to hear?

    Even I am starting to believe Ed*2.

    Help

    • APL
      Posted March 30, 2011 at 7:53 am | Permalink

      Bryan: “Does Mr Cameron ever hear what you are saying John?”

      The only fellow who has any faith in John Redwoods doctrine: ‘change the Tory party from within’, is John Redwood himself.

      Nobody else, least of all people like Ken Clarke, David Cameron give the ‘Redwood doctrine” any credibility at all, because it has none.

      • lifelogic
        Posted March 30, 2011 at 10:22 pm | Permalink

        I have little confidence on change from within but even less in the UKIP alternative with the UK voting system. Change from within is the only hope.

  39. Conrad Jones (Cheam)
    Posted March 29, 2011 at 9:56 pm | Permalink

    It’s sometimes difficult to know who is in charge sometimes if we look at how much someone in the Public Sector earns.

    Prime Minister’s Salary: £ 198,661 (Not Bad?)

    Mervyn King’s Salary: £ 305,764 (Even Better!)

    Ellen Alemany Basic Salary: £1,800,000 (A lot better!!)
    http://www.efinancialnews.com/story/2011-03-18/ellen-allemany-paid-six-million-in-rbs-pay-disclosure
    (Total Remuneration is £5,993,000 – yep £5.993 million)

    Average Nurse’s Salary (Band 4): £ 21,798 (With pay freeze effective from April – Inflation will mean that this is a pay cut)

    “Royal Bank of Scotland, the UK bank bailed out by the UK government in 2008, last year awarded its highest-paid executive a base salary of £1.8m, 12.5 times more than the UK’s Prime Minister and six times more than the country’s highest-paid civil servant. The banker is understood to be Ellen Alemany, chief executive of RBS’s Citizens arm and head of its Americas business. ”

    What I do not understand is – if she is earning this much money, she must be generating a substantial amount of income for RBS. Even though this is an American arm of RBS, the way global companies usually work is, if it’s UK business was doing badly, the American business would have to componsate by salary freezes and even cuts to balance the cash flow of it’s failing member companies.

    I work for a Global Company who’s American Business was doing badly last year – because of this, the British Companies hads to take a pay freeze despite making a good profit in order to help bail out the American sidfe of the Business.

    My question is – if RBS is doing so well – indicated by an executive’s pay being 12.5 times that of the UK Prime Minister’s salary, did Gordon Brown bail out the RBS with our money? Isn’t this where most of the waste is? I’m no fan of generous public sector pensions or housing benefit parasites, but we have to look at all sides as to where the tax payers money is going to. Nurses, Police, A&E Doctors, Firemen are pointed to by the Government when Public Sector debt is spoken of – but when our house is on fire, or we get burgled or feel chronically ill we have to go to A&E, who are the people who are there to help – it’s not Ellen Alemany.

    And before you come back at me with – “Well, this is how the Private Sector attracts the Best”, the RBS isn’t private sector anymore – it’s Nationalised. This Salary is being subsidised by Public Debt. Ellen Alemany has the biggest Public Sector Salary of all.

    How’s that for public sector waste?

    In fact, if we got rid of her – we could afford another 82 “Band 4” Nurses, or encourage the existing Nurses to stay in the NHS by giving them a pay rise in line with inflation. We’ve already paid to train them and the United States Private sector Hospitals must be starting to look very attractive to them. With her total remuneration package we could afford an additional 274 Band 4 Nurses (two hundred and seventy four nurses).

    • APL
      Posted March 30, 2011 at 7:56 am | Permalink

      Conrad Jones: “Royal Bank of Scotland, the UK bank bailed out by the UK government in 2008, ”

      Letting the RBS go bankrupt in 2008 would have solved the problem.

      • Conrad Jones (Cheam)
        Posted March 30, 2011 at 9:37 pm | Permalink

        I agree.

        That would have saved the tax payer a lot of money and provided all the regulation we need for the Banks.

        It’s a shame Gordon Brown didn’t figure that out – I wonder why he bailed them out?

        Perhaps our next chancellor should be educated in Iceland.

  40. Jon Burgess
    Posted March 29, 2011 at 10:27 pm | Permalink

    You seem like a thoughtful and sensible chap, Mr Redwood. The comments you make highlight the diffrences between what you think and believe and what your ministerial colleagues behaviour says about what they think and believe.

    You must be conscious of the fundamental change within the core of the parliamentary conservative party – it has seismically shifted to the left and you are on the fringe and will continue to be excluded from anything meaningful. Your ministers agree more with the Labour front bench than they do with you.

    It must be dispiriting to do what you do – expose your party’s surrender to the left and be ignored and marginalised as a result. What will it take for you to question your loyalty to Cameron? Or would you argue that you will always remain loyal to the party that would rather you were not there?

    The longer you linger within the arms of those that despise you, the less chance you have of galvanising support for a truly conservative alternative to this spineless shower of wets and Blair clones.

  41. Bazman
    Posted March 30, 2011 at 3:07 pm | Permalink

    It would be interesting to know how much these cuts are costing private companies that work for the government in lost revenues and how much the tax hikes were costing oil companies who’s investment is required to find new oil, but what would be the most interesting would be to find out how much the job losses and the resultant cost to the individual, increase personal debt and how this effects the takings in the shops/services. Most people live pretty close to the edge for sure, some by poverty/ circumstance and a lot by keeping up an image. Rent/mortgage council tax and utilities, food is often expensive takeaways/pre-prepared too and cheap clothes/staying in? They would just die darling! There can’t be much to cut. Unlike banks their debts will stay with them forever at credit card rates. It’s expensive pretending to have more than you have. What will the neighbours think? Tut. The stress on relationships. Never mind, supermarket beer remains cheap. For now. Missing one there George. The price of sugar is a bit low too come to think of it..

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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