The government’s Ā economic policy has Ā allowed the economy to generate many new jobs. Many more families now have at least one income earner. The best way to cut the welfare bill is to help people get a job. The best way to cut Ā public spending is to help the creation of many more better paid jobs.
One of the best ways to get a better paid job is to accept a less well paid job and work your way up the organisation. Some get promotion with their current employer. Some change employer to obtain a better job. Some take advantage of Ā training programmes to lift their skills and earning Ā capacity.
The UK needs to lift its productivity so we can pay ourselves more. Ā We need to work smarter and more effectively. Current policies have led to more people working for themselves and to setting up new businesses. This augurs well for the future, as some of these will grow into larger concerns.
1.7m new jobs is a good start. Now we need more better paid jobs. I wish to see in the next Conservative manifesto tax, training and business policies which assist growth, higher productivity and better education and training for UK citizens. We need to place Ā strivers at the heart of our approach,helping remove tax, regulatory and educational obstacles to success.
November 1, 2014
Good morning.
Many of those on benefits wish to remain on them because they are far better off. That is not their fault, but the Party Political process whereby, every party has to make more and more promises to spend, spend, spend. Labour where especially profligate while in office. Not only did they increase the size of the State Sector with non-jobs, they paid and gave them far better terms than those in the private sector. This meant that the private sector had to pay extra taxes to support them and not invest in real jobs and growth.
All the while the above was going on, they pulled in loads of immigrants who found that poorer paying jobs were both plenty. They took those jobs and so prevented those trying to get on the jobs ladder a chance.
I have said here before. You cannot have a welfare system such as ours and, an open door immigration policy. One or the other, but NOT both !
A good piece with much that I agree with and, things that myself I have done.
November 1, 2014
JR,four and half years weed on Cameron. More Middle East wars, economy is still a basket case, UK dominated by the EU in evening it does, immigration out of control, public services unable to cope, social cohesion a mess because of political correctness and not having the courage to deal with it because all roads lead back to politicians policies. Housing being built on every piece of open land because of the immigration problem. Good to read how the UK contribution to the EU has quadrupled since 2008, report on overseas aid stating how vast amounts wasted on corruption while reducing 20,000 military personnel. May spending a billion and still failing to deport foreign criminals and still not resigned, unlike Clarke before her, MPs expenses to be kept secret but give a huge pay rise, Sir John Nott writing today he does not understand Cameron’s liberal views or judgment. I do not think we are getting on in the world or at home. Look at your leader there is a bit of a clue.
November 1, 2014
All of which is true- but the prospects of getting higher wages is minimal because we have a low skill, low pay economy.
The financialisation of the UK economy has been catastrophic for the British people.
November 1, 2014
mickc
“we have a low skill, low pay economy” Total and utter nonsense .
We have skills shortages yes, we have a lack of work ethic yes, we have too many people with a minimum wage work ethic, but we are definitely NOT low skill low pay economy as one Google search of jobs will show you.
We are on course to create another 2million new jobs in the next 12 months, these jobs are in digital, engineering, manufacturing and STEM skills as well as healthcare and education.
Oh and JR just so you know the government hasn’t a clue why these jobs have been created and its nothing to do with any of their policies. Its a structural shift in the market, its a new paradigm. If the government stopped fannying around with idiot schemes like Portas initiatives, so called business improvement districts startup roadshows and STILL closing car parking etc we would have even more growth in the economy. Either scrap business rates or at least make them local, scrap NI and merge it into one tax, the THIRD forced pension scheme ( because the government stole the money from the last two and wasted it ) Autoenrollment is another piece of red tape that will hold back the economy too
November 1, 2014
Err, really?
Most new jobs aren’t low skill and low pay?
Fantastic, the future’s so bright i’d better wear two pairs of shades!
Yes, the UK is indeed “the envy of the world”!
November 2, 2014
Mickc
Yep really, what part of that do you struggle with?
5 million people earn the London living wage of less in UK ( the highest ever)
27 million people earn MORE than the London living wage in the UK ( the highest number ever)
There are 32 million people in work in the UK ( the highest number ever)
Less than 11% of companies offer Zero hour contracts
89% of companies offer permanent jobs with fixed hours
Rather than wear two pairs of shades ( blinkers ) I would suggest you open your eyes to the actual world around you
November 1, 2014
What do you mean Mickc? The UK is a high skill economy. What do you mean by the ‘financialisation’ of the UK economy being such bad news? Would it be a good idea to have an ‘unfinancialised’ economy where there is no capital market (north Korea is probably the only one now) or maybe one where there is no access to capital markets (Venezuela) or perhaps just one where there is a capital market but the state is always looking to demonize and regulate it (France)? Looking around at other ‘finalcialised’ economies such as Switzerland, Hong Kong or Singapore they look rather like a model to follow.
November 2, 2014
@mickc
There is an interesting blog entry[1] about changes in the workplace. One school of thought predicts technology is going to empower us to have more fulfilled working lives; the other is of a “hollowed out” labour market (with a link to an Economist article that dealt with this matter), falling incomes and fewer opportunities for employees to improve their skills. It appears to be a well-referenced piece.
November 1, 2014
The best way for Brirain to get on in the world is to cut the welfare bill making annualised benefits worth tangibly less than the annualised minimum wage and abolish these obscene top ups. More Brits would want to work with the benefit that there would be less jobs for the hoards of Spanish economic migrants. Not paying those on benefits to have multitudes of children, while tax- payers can’t afford to, would help and akso increase the size of the workforce.
Often I work in the state sector and am absolutely dismayed at the plethora of underworked and overpaid managers. Their staff; lazy with the promise of union protection and great pension provision. The State comprises such a large part of the economy that the best way to help Britain get on in the world (and cut the deficit) would be to slash the state and return the benefits system to the safety net it once was not the way of life it has become.
November 1, 2014
Most of what you say is valid though I cannot see why you hit on Spanish economic migrants. Having lived amongst them for many years let me assure you that the ones I know are hard working, educated and often well qualified. Spain cannot afford to employ them because of the insanity of the Euro and the myopia of the EU. Bare in mind they only come to fill vacancies at the going rate which many unemployed Brits are ill equipped to fill. I’m sure they do not come to the UK to sit idly on the dole, it is not in their nature, because they have never been feather bedded with a UK type system in their own country. If they were they would have the added benefit of a splendid climate in their home country. They are work oriented, and as a bonus they are probably bi-lingual.
November 1, 2014
If self employment is the way to go for some people, which I think it is.
Then we need to legislate so that the taxman works with these people, instead of against them.
At the moment we have a situation where on too many occasions, too much time is spent on filling in the right forms (of which there can be many) to pay a whole range of taxes and insurance, sometimes in advance.
Self employment should be easy, you register once with HMRC and you receive accreditation, and that should be the end of it.
You should not be responsible for checking the legal status of others whom you may use as sub contractors, save for looking at their HMRC accreditation before payment.
The old 714, 715 system of past years was so simple to use, in comparison to todays complicated workings, with IR35 single source income rules, mini companies etc etc.
The sad fact is that successive governments do not like self employed people because they do not fit comfortably into a box, because for the most part they can think for themselves, and we cannot allow that can we.
Self employment is not for everyone, but those that do make a success of it usually go on to employ others, either through using other self employed contractors when they have a surplus of work, or by expanding through the setting up of private companies.
November 1, 2014
Whenever I have a slight disagreement with my wife or children, it really does not help if I remind them that I am, in a way, the breadwinner and that I put the food on the table.
The Conservative Party has worked wonders, thanks to IDS and his reforms bravely carried through and silently effective.
But talking up the economy is not going to inspire people to abandon Ukip. We need people who represent and who think like we do to do that.
November 1, 2014
Mike–Second prize: two lots of five visits from Tory MP’s plus Cameron and his kitchen sink; and a mystery to me that anyone should think such is going to boost their vote. There has got to be at least hope that Cameron can be swept away in the seemingly certain aftermath.
November 1, 2014
1.7m different jobs, not new ones. Many of these paid out of money recycled from high taxes. You could “employ” everybody by just recycling earnings of the more productive into less productive jobs. All you are doing is creating jobs and college places for the less productive from taxes taken from the more productive.
Take one highly productive businessman, whose taxes used to pay for a high but reasonable level of public sector service. He has now retired, worked and taxed out of existence, to be replaced by 5 or 6 lower paid managers/workers, all paying less tax than he did, but keeping the unemployment numbers down. Their taxes plus a top up from the bond markets go to pay 4 or 5 public sector workers.
It is no way to run a vibrant economy.
November 1, 2014
Joesoap
Nonsense. There is going to be upto another 2 million NEW jobs next year too.
It makes me really concerned how the vast majority of the population are just so unaware of what is going on around them. Prefering to believe their own prejudices rather than reality
November 1, 2014
The only reality is that you are making an assertion that remains to be proved in due course.
November 1, 2014
@Libertarian
Enlighten us – why should this be – 2 million jobs is more than has been created in 4 years through zero hours contacts and part time work.
What is changing in the economy that will drive these jobs because per capita GDP has fallen which means that each individual is spending less. Where will this boost arrive from?
November 2, 2014
Narrow Shoulders
the 1.7 million new jobs created last year weren’t all zero hour contracts or part time though. Less than 11% of businesses even offer zero hour contracts. 89% offer full time permanent fixed hour contracts.
My business ( which is collecting and analysing employment data ) has found that more than 60% of SME’s are predicting they will employ at least one more person in the next 12 months there are 4.2 million SME’s in the UK which will equate to a further 2 million new jobs IF they all do what they say they will.
The reason is simple, the rise and rise of small business, self employment and micro business. New technology the whole field of digital technology has created jobs that have not existed before. PPC, SEO, Social media marketing, blogging, digital engagement, graphic design, UI/UX all high skilled, knowledge based well paid work. The growing field of medical technology manufacturing in which the UK currently leads the world. mobile phone component manufacture (80% of ALL mobile phone and tablet processors are manufactured by UK companies). Healthcare is the single biggest growth market creating huge demand for qualified nurses, OT’s, physio’s and registered healthcare professionals.
Construction is beginning to recover and as more projects come on stream then this will also add to the growth of jobs.
November 2, 2014
Interesting data, thank you @ Libertarian.
Do these SMEs intend to take on and train their workforce? Are the skills already here? Or do we need to import 2 million to fulfil the SMEs’ needs? Can the skills gap be bridged without increasing the population?
November 3, 2014
Narrow Shoulders
The SME market place has now firmly embraced Traineeships and apprenticeships 500,000 new apprentice places last year.
However the skills gap is STILL a problem so I think that some overseas workers will be required to fill jobs until such time as we rebalance our education and training away from purely academic qualifications ( which 47% of employers aren’t interested in at all) to a more vocational based approach.
November 1, 2014
JR: “1.7m new jobs is a good start.”
That’s nothing when you have unlimited immigration, and ICT visas.
November 1, 2014
But Cameron has actually increased regulation, red tape and obstacles, has increased 299+ taxes, has increased tax complexity, has done virtually nothing on employment laws, has done nothing to provide new roads or runways, is wasting money hand over fist on green nonsense that does not even work, on pointless/counter-productive wars, a bloated and often incompetent state sector, the EU, misdirected aid and HS trains.
He still has a massive state sector deficit and he still had a fairly dreadfully run NHS and state sector in general.
Still some good news:- the government’s limited provision for offshore subsidies wind means many offshore wind projects will be cancelled. Buy why on earth subsidise any of this nonsense? Stop all the subsidy until the industry can stand on its own feet. Gas, oil and coal prices are falling after all. These expensive intermittent, bird and bat chomping energy machines make no economic (nor even environmental) sense.
November 1, 2014
Actually, a well known blog political website claims it is now 509 tax increases under Cameron. This is the low tax conservative who wants to keep interest rates low forever. I hope all pensioners, strivers and workers remember this when they come to vote. Undoubtedly a savior for those who are receipients of tax credits, child care vouchers, social and affordable housing and welfare. No wonder immigrants come here in their droves! And for those who cannot make it do not worry overseas aid will be given, although without proper checks to make sure it goes to the deserving.
November 2, 2014
Yet he still claims to be a low tax conservative at heart! He also promised Ā£1M IHT thresholds and a referendum on “any treaty that emerged from Lisbon” but then chose to rat on that and thus threw the last election.
November 1, 2014
Totally agree with Lifelogic and his comments about renewable energy and subsidies. Only this week we have read that more raptors have been killed by wind turbines than have been shot or poisoned. Bewick Swans are being killed on a scale not seen before and are in danger of being wiped out. Again turbines and intensive farming practices come into play here too. The John Muir Trust has been refused protective costs for a legal case against SSE where they want to erect 67 turbines on the edge of a national park and in wild land which the Scottish government said would be protected! The so called ‘green’ crap is doing so much damage. We constantly have to pay subsidies to turn off turbines here in Scotland. Fancy having to pay for electricity that is not even being produced!!! The whole thing is madness and if people’s bills were less they would have more money to spend on goods and services which actually boost our economy. The current energy policy is a disgrace and does nothing to improve our economy. All it does is ensure that more of us move into fuel poverty. With fossil fuel prices going down our bills should be getting cheaper but instead, we find them higher due to ‘green’ taxes and unfair subsidies for developers (often foreign) and landowners already rich. How is that a fair society and how does it help the poor?? UKIP is the only party to recognise this and this is why people are thinking hard about where to put their X at the next election.
November 2, 2014
They are not even saving any CO2 in reality (when all including construction and backup is computed) with these absurd rotating religious symbols. The main effect is to export of jobs and whole industries and ensure many cannot afford energy and heat.
November 1, 2014
JR: …”The best way to cut the welfare bill is to help people get a job.”…
Yes, all well and good, except that the Goverments’ cutting of the welfare bill, has led to the most vulnerable people with mental health issues and other disabilities being trodden upon and treated like criminals and not being given any money to live on for months and months on end. Many people have already committed suicide. How many more?
All because of a private American comany who think they know better than the patients’ own doctors. Just how are these people supposed to live, when they have no money to buy food or pay their bills? It is an absolute disgrace.
This reason alone is why I will not be voting for the so-called LibLabCon.
November 1, 2014
All very well said , and I am pleased you mentioned education. The UK cannot afford to carry an innumerate, illiterate youth. Any country that ignores it’s seed corn is particularly stupid.
I do not know whether you went on the Oxfordshire PM pep talk, but I somehow doubt that there was any decisive outcome. The inability of your party to see off Labour when they are weekly re-supplied with ammunition surprises me. I think it is because you all operate inside this Westminster bubble that you fail to see opportunities. For instance, the coming demise of Labour in Scotland, Labours refusal of a referendum on the EU, Labours refusal of English votes on English matters, Labours limp leadership. At no time in their history have they offered anything but spending other peoples money until it ran dry.
You could clinch the May 2015 election , but only if you overcome Cameron’s liberal, socialist, euophile leadership with an absolute guarantee of an in out EU referendum by the autumn of 2015 at the latest, and not subject to the myth of re-negotiation. This would ameliorate the aftermath of the disaster you are expected to suffer in Rochester. It would also concentrate the Marxist thinking within the EU. They have a lot to lose if we opt out.
If you cannot get it right at this stage of the battle then you need to rid yourselves of the general, unless you get your highs out of another Stalingrad.
Reply Yes, I went to the event
November 1, 2014
There is a slim chance for redemption for the Conservative Party.
Following their defeat in Rochester if they have the sense, they should use the window of opportunity to remove Mr Cameron and elect a far less divisive figure. Copying Blair and Brown economics has been tried and failed (as they ultimately did).
Cameron failed to win the open goal 2010 election and will soon have lost two by elections. He has lost over half of Conservative party members. He has continued the politically correct Blair project. He has got involved with futile foreign wars. The charge sheet of incompetence is too long to list here. Dr Redwood – what does Mr Cameron have to do to lose yours and colleagues support ?
November 1, 2014
How about a hammering in the TV debates with Mr Farage before the next election when the polls will show the people have woken up to 40 years of lies and spin by the legacy parties!
November 1, 2014
A promise of an EU referendum NEXT year.
Mrs Thatcher would have turned the EU tax demand to her advantage.
November 2, 2014
There is no one to replace Cameron, the favourites seem to be Borris, Terisa May, George Osborme, Hammond & Gove or even worse. Cameron is probably better electorally & as a presenter than all of the above – but he clearly needs sound policies to present & defend.
They are easy to find, just do a 180 degree turn from all his current daft policies.
November 1, 2014
I fully agree that the referendum is the key point in the General Election ; it would be sensible ( and practical ) to include it at the same time . The Conservatives are hanging their hat on the promise that a referendum will occur in 2017. The strong possibility is the Conservatives will not win an outright majority and a subsequent coalition will not agree to it ( we have recently experienced the technicality preventing the Referendum Bill being “financed” now – scuppered by the Lib/Dems ).
Recent Opinion Polls have shown a surge of the anti EU feeling in the country – surely this points to the wisdom of the Political Parties reacting sooner rather than later .
Reply We can’t get a referendum for May 2015 through this Parliament!
November 2, 2014
A promise of an EU referendum before the end of 2015, plus the promised Ā£1M IHT threshold (better still abolition) and other CGT and income tax reductions, a policy of cheap energy with a fair deal for England, sensible selective immigration and some UKIP accommodation would win the election.
But Cameron prefers to lose it seems.
November 1, 2014
It’s fair in the meantime to occasionally highlight the flaws in UK Managements, which frequently resides within a culture of self-delusion and complacency. The flaws in lower working levels and productivity are turned over and over for consideration with frequency.
There’s an old film starring Tom Hanks and Meg Ryan, with the unlikely title of ‘Joe versus the Volcano’. Even with a title like that, it has the occasional gem of substance in it. Tom Hanks’ ‘Joe’ is a put-upon employee who is given tasks which we learn in terms through the script, are literally unachievable due to inaction, or refusal to consider the logistics or terms of reference by his employer. Yet the fault for, and the negative consequences followed by these challenges are to be suffered by that employee only.
It seems a simplistic case but it is an extremely well-observed one. I could describe many hundreds of such instances but that fictional Hollywood case, twenty-five years in age comprises practically every element of them.
I’m aware that there are workplace talkshops, worker’s communications representatives and all types of levels of arbitration – but none of that ought be necessary where the means by which productivity or satisfactory completion of work is hindered by frequently-occurring, habitual or cultural – not to mention ‘known’ – weaknesses not tackled by workplace leaderships. These things shouldn’t need humorous inspirational video management vignettes – they need proper contemplation and application.
Included in your aspirations, John, I’d recommend a step-change appreciation in Management self-awareness and real-time appreciation of process under their own remit. All too often in the UK sphere, UK-culture management is signally lacking in these critical aspects.
November 1, 2014
This is not the case. the more qualifications , the more experience, the better results and the improved ability in the work place has culminated in staff being put back down to where they started 30 years ago or even in some cases in a lower position than they ever were.
The situation you describe above is one we were all led to believe many years ago and depicts a ladder where success can be demonstrated . This ladder does not exist. The rungs of the ladder are taken out. Exam syllabus’s change so frequently and older ways of learning brushed off and not given any credibility.Employers do not recognise skills , and often employ to their own limited vision , not being able to comprehend a higher state of ability and better production.
I am glad that Jaguar are employing 1, 400 staff and in these fields where there is a visible end product , the notion of self improvement in order to get a better position may work.We still have a problem with snob value . For example ‘BUT which university did you go to NOT ‘ But can you DO the job?’ These are the basic values which sets the parties apart . Tradition makes some vote left and some vote right , yet both sides display their wares in the same competitive way and employers give the posts to the ones who are really powerless.Come on the quiet one at the side of any leader often has more influence.
Manufacturing and trading though need to be boosted and England can do it.
November 1, 2014
Margaret, the new jobs created are at ~70% of the normal rate of long -term employees (like myself). The shortfall is topped up with in-work benefits. However 70% (circa Ā£10+/hr) is usually better than 100% elsewhere.
November 5, 2014
Unfortunately the good news is dampened by the loss of jobs in Rolls Royce.
November 1, 2014
I would say any improvement of the economy is due to the private sector and is despite government policy not because of it. This government has imposed hundreds of tax increases, presided over unprecedented amounts of waste, money printing and deficits, allowed the EU to impose more regulation every single day and, now, tries to claim credit for any slight improvement in economic activity. The political class has no answers to the problems we face, in fact it is the biggest problem we face.
November 1, 2014
Andyvan
Exactly right
November 1, 2014
…………………The political class has no answers to the problems we face, in fact it is the biggest problem we face……………….
Indeed with a few exceptions. All of the current legacy party leaders have all got PPE degrees, never had a proper job before elevation to the top of their parties. The sadness is it shows. It shows a lot in their extremely poor judgement and decision making, lack of connect to the public and action or lack of reaction to events.
When is there going to be a national inquiry into some of the scandals that have emerged where we have 1000’s of female victims apparently overlooked or ignored due to political correctness or fears? No comments from our leading class!
November 1, 2014
With regard to getting on in the world it would be very helpful to have Mr Redwood’s views on the massive transfer of powers in 44 policy areas to the EU, which takes place today, thanks to the Lisbon Treaty. These policy areas apparently include border controls, criminal law, immigration, police cooperation, our ability to withdraw from the EU, and many more. Gerard Batten MEP has written on this on his website, but I would like to hear from those in government who seem to have no intention of informing the UK electorate of this further surrender of power taking place today.
Reply The last government surrendered these powers under Lisbon a long time ago, and I voted against it at the time.
November 1, 2014
Sorry Mr Redwood, but you did not answer Chris`s post from 8.51am !!!
November 1, 2014
Reply to Reply.
While what you say is factually correct, it is an open goal for UKIP if they care to use it. The electorate will associate it with the current government no doubt correctly, because CMD, his cohorts, and the Lib/Dems agree with it. If used correctly it could be yet another nail with which to pin down Labour as operating against the interests of the British people.
November 1, 2014
Well, JR, that is a completely illogical position just on the strength of Cameron’s own words, as I have pointed out in my comment below.
November 1, 2014
It is very good that there are”… more people working for themselves and to setting up new businesses”. If they are to grow into larger concerns then I think the regulatory burden applied to small businesses needs to be significantly eased.
November 1, 2014
JR: “1.7m new jobs is a good start. ”
1.7 seems to be the popular number at the moment whether it is millions or billions which leads me to this report from the Telegraph:
“Britainās net contribution to the EU rose by a third last year to Ā£11.3 billion, figures from the ONS have shown.
Net payments to Brussels rose by of Ā£2.7 billion between 2012 and 2013 and has quadrupled in the last five years.
The analysis does not include a separate Ā£1.7 billion payment which Brussels demanded last week.”
I don’t remember any mock outrage from Cameron about those payments. In fact he and you have boasted that he got a cut in the EU budget. In the meantime these increases have continued without comment by you or your party, in fact quite deliberately not publicised. One thing worse than someone who is happy to pay our money to an anti-democratic foreign organisation is someone who pretends to be unhappy, for public consumption, but really is just as happy as the others – your party and its leader fall into the latter category.
November 1, 2014
Very well put.
November 1, 2014
Good on ya Brian!
This is an inconvenient truth that the politicians fail to talk about, aided and abetted by the pro-EU media. All the time the public are given the mushroom treatment.
Tad
November 1, 2014
On Monday Cameron also boasted that just exercising the UK’s existing EU treaty right to opt out of certain EU Justice and Home Affairs measures represented a return of power from the EU to the UK, indeed he said the “biggest” transfer of power from Brussels back to Britain almost as if there have been others in the past but they were smaller … I can’t think of any, at the moment.
At Column 28 here:
http://www.publications.parliament.uk/pa/cm201415/cmhansrd/cm141027/debtext/141027-0001.htm#14102711000001
“… it is very important to recognise that we have already achieved the biggest transfer of power from Brussels back to Britain by opting out of 100 different pieces of legislation.”
In which case it is surely also very important to recognise that opting back into some of them would represent a transfer of power from Britain to Brussels, and so why did Hague not anticipate that this contingency might arise and make sure that it was covered by his “referendum lock” law, not completely ignored?
November 1, 2014
1.7 million jobs. About 20% real, the rest part time and self employed.
With half a million immigrants coming to this country every year, wages will just continue going down.
I see Simon Heffer in todays Mail has CMD sussed. He won’t give a referendum before 2017 because he intends to resign by then and if he offers one before, he might lose it and that wouldn’t do.
When will it all end John, this relentless destruction of England and our culture.
Who is pulling the strings?
November 1, 2014
Goldman Sachs?
Their Chairman (an ex EU Commissioner) thinks that unfettered immigration into the EU is highly desirable. Desirable for whom is not clarified.
November 2, 2014
Ian Wragg
” 1.7 million jobs. About 20% real, the rest part time and self employed.”
Total nonsense, you are making it up. Read my posts above for the real data.
Wages are rising, not by a huge amount but they are rising NOT going down. Oh and the NMW has just risen again too.
November 1, 2014
The creation of many more private sector jobs is exactly what austerity is all about. It is indeed to cut public spending where it is mostly inefficiently and wastefully spent and transfer that spending to the private sector were the opposite is true where levels of income needed to sustain that spending is reduced because of it. The rise of the public sector and central planning and control that allocates resources incompetently and often corruptly costs rise to unsustainable levels. So we are seeing debts and deficits above that which income can cope with that will eventually erode living standards and impoverish the nation. To map the rise and fall of a society it is only necessary to see the effects of the % of private to public spending. The tipping point of decline like the Laffer curve comes when the % of public spending v private reaches an unsustainable amount and that point was reached some considerable time ago. It probably mirrors the rise of the influence of socialism and left wing ideas.
November 1, 2014
A thorny problem which only leaving the EU can solve, because the EU operates on the socialist ‘beggar my neighbour if he is doing well’ principle.
November 1, 2014
Averages are dangerous – remember a man with one hand in a block of ice and his other hand in boiling water, on average he is comfortable.
So we have half a million immigrants per annum – almost all unemployed when they arrive, many don’t speak English and have no skills, so really unemployable. Then you have 250k British emmigrants – mostly with degrees or top jobs, going out to the USA or far east on large packages. The dishonesty of the Immigration lobby will tell you that we have ‘nett’ 250k immigration.
The point I want to make is that is why ‘average’ wages are low and perhaps falling, how could it be otherwise? The problem is not with employers, the job market, the minimum wage etc. it is all to do with the failure of the British governments to guard our borders and the dishonesty of the employment lobby – and Labour for making a big deal about it, because every other measure of our economy is positive (ish).
November 1, 2014
Deloitte did a report for the Australian government. Its basic finding (paraphrasing Prof Bill Mitchell), that the private sector manages uncertainty and volatility: ā¦ by laying down the law ā imposing rules on ourselves ā in areas as diverse as human resources (HR), information technology (IT), finance, legal, marketing and executive governance. The time required for employees to comply with self-imposed rules has become a crippling burden. Middle managers and senior executives are chalking up 8.9 hours a week complying with the rules corporates set for themselves, with other staff spending 6.4 hours.
The ācompliance sectorā is already larger than the construction, manufacturing or education sectors in terms of people employed. Close to 1.5 times the size of the public sector in Australia (including federal, state, territory and local government). More than three times the size of Australiaās mining sector.
The bottom line of the research is that where rules donāt exist, we create them. Where they already do exist, we make more that overlap; contradict; eat our time and weigh us down. They document in the report, the case of a āfirm that insisted staff complete an ergonomic checklist and declaration when they moved desks. They then introduced āhot deskingā such that everyone spent 20 minutes a day filling out forms.ā
Around ā16 per centā of our available productive resources are allocated to āadministering and complying with rules and regulationsā. And they note that is an understatement. They also conclude that the impact of government compliance requirements is equal in cost terms to about 5.9 per cent of total national income, which sounds large. But then the private sector āself-imposedā regulations, including those that seek to control labour; impose costs equal to 9.7 per cent of national income. And that figure doesnāt take into account the āefficiency costsā, the lost income that the regulations impose.
In the UK, it is difficult to see where all these better paid jobs are going to come from. A Conservative government expects the āmarketā, the āsupply sideā, to take all the risks. Government should not intervene, except in cases that have positive voter influence.
But the coalition has managed to create a lot of jobs that have little work associated with them hence the low productivity numbers. In fact, as Neil Wilson says; they have actually managed to privatise a lot of unemployment. So employers are now paying “in work” benefits that were previously paid by the DWP. Clever in’it. Some may recognise this as a small step towards a Modern Monetary Theory (MMT) style “Job Guarantee” scheme for the unemployed. How socialist is that?
November 1, 2014
All very laudable, JR. It is of course the avenue by which most of us succeeded. How do you cater though, for the ‘inked’ and nose studded; the lip pierced sub culture that is unemployable ?? Their cost to society is incalculable.
November 1, 2014
Excalibur – They now contribute via the ‘black’ economy which is now included in GDP.
Tattoo parlours are thriving.
Shouldn’t anyone with tattoos above the collar or on the hands be barred from claiming unemployment benefit ? By virtue of the fact that they have rendered themselves unsuitable for a lot of the new jobs coming on stream ?
November 1, 2014
“The governmentās economic policy has allowed the economy to generate many new jobs.”
How has ‘the economy’ generated new jobs and what did the government have to do with it? Lots of people have had to become self-employed – many earning very little doing low paid, low skilled jobs. Lots of people only work part time.
1.7 m new jobs … and net migration has been how much since 2010 – must be over a million. People by simply existing create demand. If we had an influx of a million people a year we’d have loads of new jobs.
November 1, 2014
Our debt is increasing.
The tax take is down.
This is the reality.
These are the only things we need to know. Whatever is ‘coming in the future’ is pure conjecture.
November 1, 2014
How many ‘non-jobs’ have been created in the Public Sector, filled by ‘jobsworths’ who implement worthless regulations and laws we didn’t want or need? These do not produce wealth, they drain it from the private productive sector; and how much extra tax are we paying to keep this racket going?
Don’t expect Cameron and his clique to do anything about it. Is he still saying ‘the deficit has been cut a third’. Seems we heard this a long time ago, and we still hear it. There is not much difference between Labour and the Tories – they each say much the same thing on most issues. They only pretend to be different to fool us – while following much the same agenda, to protect their control over society driven by a semi-secret ideology which acts against the concept of freedom of the individual.
November 2, 2014
Indeed both Labour and the modern Conservatives follow the rules of political correctness….playing by the same rules leads to the same outcomes .. bankruptcy, overcrowding, a low wage/low skill economy, overblown house prices, dear energy etc. poor/inadequate NHS services etc.
John Redwood wrote an excellent Book titled ‘The Death of Britain’ detailing the damage that new Labour, the first truly politically correct government did to Britain.
How ironic that his own party is now continuing New Labour’s work.
November 1, 2014
It is indeed welcome to see employment up, including the self employed. Many of the latter, if the past is any guide, will fail. Let us hope they have the drive to pick themselves up, dust themselves down and start all over again – and despite the excessive tax and regulatory burdens under which they must operate.
One cosequence of this success is higher taxes paid to the EU. I was astonished to read this morning the scale of increase in the UK`s net contribution to the EU in recent years. Apparently, it was Ā£2.7 billion in 2008, Ā£3.8bn in 2009, Ā£7.2 bn in 2010, Ā£7.5 bn in 2011, Ā£8.5 bn in 2012 and Ā£11.3 bn in 2013. According to the Daily Telegraph, “Britain has already discreetly paid an extra Ā£2.7 bn to the EU over the past year as a result of the country`s strong economic growth…The top up payment, which has already been made, is in addition to another Ā£1.7bn which was demanded by EU last month.” These are extraordinary increases. We are being taken for a ride and taken for fools.
Some of the responsibility must rest with the Blair government. I see that the current leader of the Labour party is seeking to promote another EU cause, regionalisation via the wheeze of an elected Senate, under the guise of House of Lords reform. I trust that the Labour party`s past and present intentions are given the airing they deserve between now and the GE UKIP is sure to do so.
November 1, 2014
“1.7m new jobs is a good start” :
Are these all additional jobs ?
Or just job turnover ?
Over what period of time ?
Over a period of 4 years this just looks like the number of jobs taken by immigrants.
What is the average wage of these jobs ?
Are these jobs at sufficient rates of pay to make a positive contribution to the country’s financial state and reduce our national debt or just to improve the profits of the large corporate businesses through working tax credit?
Are these public or private sector jobs ?
November 1, 2014
JR said himself that income tax increases are cancelled out by the cost of additonal in work benefits. So the answer is that these jobs do not make a positive impact on our financial state.
November 1, 2014
I agree with your post but I would urge you to step up your efforts to persuade the government get tax down to a more reasonable level.
Current tax levels are extreme.
November 1, 2014
In a country which had a communist government, labourers, semi-skilled, skilled and management said to me. And I quote exactly:
“In the West, if you work hard for a boss, a capitalist, he will see you are working hard, making him more money. He will like you. He will not make you redundant. He will give you more hours to work so making more money for him. You will yourself get more money. He will promote you because you are a good worker.”
Well that was the dream, comrades!
“The Good Soldier Å vejk” by Jaroslav HaÅ”ek was before their time. But is now in even greater employment than it ever was.
November 1, 2014
Some of those people on some benefits already have a very important job, looking after their families and bringing up the next generation to be decent and useful citizens. The fact that this is an unpaid job, even though it may involve more than full time work in the usual terms, is clearly irksome to those who would prefer it if all work of all kinds was liable to taxation, but doesn’t mean that their work is not of crucial importance.
November 1, 2014
A point well made Dennis.
Government really does want them to go out and earn, to the extent that it will pay childcare greater than the taxes received in return.
Strange.
November 1, 2014
All very sensible, but unless immigration is drastically curbed, the pressure to work smarter will be limited. Necessity is the mother of invention.
I think it’s true that since 1997 we have admitted about 3 million immigrants. That’s had its effect, including the suppression of wage levels.
November 1, 2014
In Scotland, meanwhile:
http://www.scotsman.com/news/politics/top-stories/scottish-independence-66-back-new-referendum-1-3590293
“TWO-THIRDS of Scots want another independence referendum within the next decade and more than half think one should be held within five years, a poll has revealed.”
“66 per cent said they backed another referendum within the next ten years, regardless of the circumstances.”
“More than half (53 per cent) of people said they supported having another referendum if the Conservatives win a majority in next yearās general election, while 54 per cent said a vote should take place if the Tories win in May but do not have any MPs north of the Border. Meanwhile, 55 per cent are in favour of a second independence referendum if the UK votes to leave the European Union in 2017.”
This news comes on top of two polls showing that Labour, the LibDems and the Tories all face very heavy losses to the SNP next May – of course the Tories only have a single seat to lose, and the LibDems only have 11 to lose, but proportionately their projected losses would also be very heavy – and there is a real danger that the SNP would end up holding the balance of power at Westminster.
So now it’s only the six months to the UK general election left to prevent catastrophe, rather than the eighteen months to the Scottish Parliament elections.
November 1, 2014
I applaud Dr Redwood’s attempt at putting a positive gloss on the coalitions economic record by omission of key facts. That is what seasoned politicians do.
There are problems however. Dr Redwood does not adequately explain how his government can possibly create many more better paid jobs – when all he has done so far is create many more hand car washers, big issue sellers, zero hour contract job shares etc. … and those shunted into self employment by job centres to get individuals of the unemployed total.
Lord Redwood well knows that paying ourselves more requires higher productivity. The incentive for this has been destroyed by continued unlimited immigration – it’s cheaper to employ low skilled workers and get taxpayers to top up wages than invest in new technology.
As explained in a previous post by the Doctor, despite record numbers in work there has been no net benefit to the treasury. Going forward we do not know the cost or indeed whether public services can cope with present rates of population increase.
The coalition seem to want to talk about the economy but theirs isn’t a proud record. Putting Ā£2 into the economy through the bond markets and recieving Ā£1 at the other end in GDP isn’t a healthy economy it’s a ponzi scheme.
Reply The unreliability of your argument is underlined by referring to me as Lord Redwood when I am pleased to be an elected Commoner.I can assure you there are good new jobs on higher pay being created as well as the lower paid jobs which attracts the criticisms.
November 2, 2014
Reply to reply. Thanks for your reply Dr Redwood.
I must say it was a little harsh of you to assume that because, at face value, I had committed a fallacy by referring to you as a Lord…..therefore the rest of my arguments must be wrong!.
I didn’t actually say that no ‘good’ new jobs on higher pay are being created that would be silly. What I am saying is that the bulk of the ‘new jobs’ are of a low grade and will likely remain so on current immigration trends. This is backed up by statistics that show income tax gains being eradicated by in work benefit payments.
I am aware you have not been appointed to the house of Lords. I think many commentators here are annoyed that certain individuals are elevated to the status of Lord, or Sir..and others denied honours seemingly for petty party political reasons.
The Oxford English dictionary defines a Lord as :a man of noble rank or high office; a nobleman. I think JR can be a Lord in spirit at least!
John Redwood is a much more deserving of the title of Sir than John Major for example. There is a bias in the system of appointments towards those speaking as the politically correct do.
My criticisms are not of you personally – rather the poor standard of debate that constrains the independent mind, to a lesser or greater degree. Showing more independence than most of your colleagues , in our current climate seems to have precluded you from ministerial duties.
When a promotion is made these days, it’s usually to an individual nobody has ever heard of. Possibly because they have kept their head below the parapet and been extremely careful to tow the party line. This is very wrong and partly explains why governance is so poor in this country.
Reply Thank you for your generous explanation.
November 3, 2014
Kenneth R Moore
“What I am saying is that the bulk of the ānew jobsā are of a low grade and will likely remain so on current immigration trends” Wrong !
Read my posts further up the thread for the real data on jobs, job creation and our skills shortages in high paying jobs
November 6, 2014
I can find no accurate figures you have given that disprove my claims.
I do agree with you to an extent that there are skills shortages particularly in Engineering. It is ludicrous however to suggest that 500,000 people are coming to the Uk every year to work in high end electronics manufacture and healthcare!.
The conclusion of John Redwood that increases in income tax are matched by increases of in work benefits points to a surge in low grade job creation. If skills shortages were being filled then we would expect to see a net gain to the treasury from these better paid jobs. .
November 1, 2014
All good ideals Mr Redwood but you party, Labour and Mr Clegg’s band of curmudgeons need to recognise that once people (voters) move up the wages ladder they want to be able to benefit from their increased earnings. Otherwise we may as well stay on minimum wage with top up benefits. At present we are punitively taxed (especially single earning households who pay for families with only one tax free allowance) once we reach Ā£42K and have universal benefits removed at Ā£50K. These are aspirational wages that are not huge in London.
Additionally even at Ā£40 and Ā£50K we do not have as much disposable income as many on benefits who seem to be insured against rises in the cost of living.
Make it worthwhile for us to work please.
Reply I agree, which is why I support the Conservative offer on tax for 2015 with a further rise in both the 20p tax threshold and the 40p tax threshold.
November 2, 2014
“The best way to cut public spending is to help the creation of many more better paid jobs.”
The words carts and horses spring to mind on reading this statement. Firstly, we need to recognise that all money that is earned in the private sector in the UK originates from government spending. If it doesn’t it must be couterfeit.
Secondly, we need to take into account the question of taxation revenue. In a closed economic system where no-one saves their money spending and revenue have to balance regardless of the level of taxation.
If taxation is set too high the number of transactions to recoup the amount spent will be too few to fully engage the capacity of the private sector. Therefore if we wish to stimulate the private sector , to create higher profits and generate higher wages, it is taxes rather than public spending which needs to be cut. The revenue received will not fall due to the increased activity in the economy.
Reducing taxes could however generate higher than acceptable levels of inflation , but only if it is overdone. Then is the correct time to reduce government spending to bring that back under control.
Reply What a ridiculous assertion. The private sector can create jobs without public spending to back them, and private sector banks can create credit for the private sector.
November 2, 2014
Yes, the private sector can create jobs without public spending to back it, but only if the money created originally by public spending is left in the economy long enough. If taxes are too high it is removed too quickly for that to happen effectively and they do not raise the expected revenue. That’s an argument which I would have thought would have appealed to the political right. They are correct in saying that taxes are too high.
On the other hand the left are correct in pointing out that government spending is important too.
Private banks can indeed credit for the private sector and that is what we all have in our private bank accounts. But, ultimately the private banks have to be able to guarantee their created credit against real Bank of England created money. They can’t really “create money out of thin air” as some mistakenly claim. Only central banks like the BoE can do that.
Reply The Bank of England has to supply notes and coins on demand, and is the lender of last resort so there is usually confidence in the main commercial credit creating banks.