On Monday Parliament received the Treasury’s 2012-13 “Convergence Programme for the UK: submitted in line with the Stability and Growth Pact”. It was a timely reminder of more powers surrendered by the previous government.
We were told at the time that the UK would not submit its budget to EU scrutiny or decision prior to the Chancellor delivering his Statement to the Commons. The UK would merely send the EU the Budget Red Book as a matter of record after the Budget.
As so often with EU matters, it is not as simple as that. The government has sent a 235 page document to Brussels about our budget, spending and tax plans, and economic forecasts. Part of this, is a series of extracts from the Budget Red Book and part of it a long extract from the report of the Office of Budget Responsibility.
However, page 5 in the introduction and pages 29-30 on the Excessive Deficit Procedure go further than was suggested at the time of the agreement on the Pact. The introduction explains that the UK has to submit an annual Convergence Programme. The country is under an obligation “to endeavour to avoid an excessive government deficit” under Protocol 15 to the EU Treaties.
The section of the Excessive Deficit Procedure is even more concerning. The UK first accepted this requirement under Labour in 2008. “In November 2009, the Council made recommendations to the UK, including a target to correct its excessive debt by reducing the Treaty deficit below 3% of GDP by 2014-15.”
The new government reports that it “remains committed to bringing the UK’s Treaty deficit in line with the 3% target set out in the Stability and Growth Pact”. This is now planned for 2017-18, delayed from 2014-15.
This filing reveals the absurd paradoxes and contradictions of modern UK politics. Labour who now say we should not cut the deficit so fast or so far signed us up to an EU policy which requires us to cut further and faster to comply with the EU Excessive Deficit Procedure. Conservatives, who think it is right to cut the deficit and get more quickly to the point where debt as a proportion of GDP is falling, do not think the EU should be involved in these UK budget decisions.
It would be interesting to hear on this site from the bloggers who both think the deficit reduction is too fast and who think the UK should be following EU policies faithfully.
April 23, 2013
Sorry, but this makes me really angry.
1. The EU is one of the most profligate governments on earth.
2. There are, as you constantly prove quite correctly, there are no cuts: the debt is mounting fast and the deficit is still considerable, despite some cosmetics.
3. I did not elect M. Rompuy, Baroness Ashton or M. Barroso. I did not elect the Commissioners. I hardly got to elect the MEPs who came from a party list.
4. Mr Cameron is going along with all this just as Labour did.
That is why I am certainly supporting UKIP at the moment: we must get right out of the EU as soon as we can. It is getting dangerous. Frog in heating water syndrome.
April 23, 2013
On (2), I assume you simply ignore the vast number of economists, me included, who point out John is simply wrong to assert (it’s not a proof!) that there have been no cuts on the basis that there is still a deficit.
The logic is quite simple, and fairly inescapable (though do try). You cut government spending which ends jobs dependent on government spending, which reduces the incomes of those that were in those jobs, which decreases the incomes of those who benefit from the spending of people in general (e.g. supermarkets, local stores, etc), which decreases their spending, and the process carries on. It’s referred to in basic economic textbooks (I presume they’re all wrong are they?) as the circular flow of income.
Now regardless of your belief (and it’s a belief) about the size of government, this is an inescapable fact about cutting government spending. Maybe some other economic activity will take the place of that govt activity – that may well happen, but it won’t happen instantaneously.
Which means that, low and behold, GDP falls when governments cut back. Which then means that tax receipts fall (those income and consumption taxes), and benefits increase. Which means that the deficit doesn’t necessarily get any better (particularly if private sector jobs are lost due to reliance on govt contracts meaning that it isn’t just one public sector job lost but multiple jobs).
Which is why this “proof” is anything but.
Reply Try reading what I write and understanding it. I have pointed out that overall current spending is up in cash and real terms. There have been individual cuts in some budgets and programmes. It’s all set out in the Red Book for you.
April 24, 2013
James Reade: “which decreases the incomes of those who benefit from the spending of people in general”
And all this magic spending comes from *nowhere* so it does not have a depressive effect on the ‘real’ economy?
In fact all the spending you cite as boosting the economic activity is firstly taken (i) from the private sector – thus depresses economic activity, now. (ii) from the private sector in the future – since government borrowing is nothing but a promise to tax the bejesus out of the private sector, in the future. Thus depressing economic activity in the future too.
April 24, 2013
John Reade you are reading the wrong textbooks.
It actually goes like this: reduce the size of government and release resources back into the private sector which increases investment activity leading to increased employment and economic growth.
Your preferred solution which I imagine recommends increased government spending is premised on spending derived from debt; no more than spending now tax receipts anticipated in the future.
If you suffocate the private sector by continuing to increase the size of government where will you find the future capacity to both pay down the increased debt and service the future government current spending?
You will tell me of course that it will come from growth in the economy caused by increased consumption however the argument begins to look a bit thin if it is reduced to a simple illustration.
One man on a desert Island survives by catching one fish each day. He is later joined by another who decides his role will be defence of the Island. He also needs to eat and so the fish is shared equally.
A further man arrives on the Island and he is given the job of keeping a lookout for marauding gangs. He also needs to eat and so the division of the daily catch is now divided three way.
You might tell me that growth comes from the first man having to catch more fish but he is unable to do so without the investment of time in order to make a net which he is unable to do because all of his time is devoted now to catching the fish that sustains all three.
We end up with increased consumption but no growth.
April 25, 2013
You are so right. The empirical evidence appears to be that for every administrative overhead job lost, two jobs arise in the private sector. Indeed, the latter are lower paid. We either get our competitive edge back that way or by using labour more efficiently. However, the high productivity route requires capital investment, at a time where there is a lot of debt around and the banks are not in a healthy state.
April 23, 2013
I agree and I have switched to UKIP.
April 23, 2013
No, but the country did elect please like Major, Blair, Brown and now Cameron who have all happily gone along with this outrage. Giving more and more powers to the un-elected and unaccountable and more and more taxpayer’s money away to the EU, the IMF and the PIGIS.
Voted in on the basis of the least bad option available (or the duff promises made perhaps), given the voting system and the old established party brands.
April 23, 2013
Mike, do you think we have we have any say in the government of this country? Our politicians also come from lists, carefully controlled by the parties. They follow the party line to further their careers. In safe seats there is no point in voting. Our political leaders don’t do what they say they’ll do.
I’d be more in favour of coming out of the EU if I had any confidence in those running our own country, but look at the clueless shambles we have in charge now. Rich boys with not the faintest idea about the real world, with no experience of the real world having to make decisions on things they don’t understand. But they do have a following of yes men all the same all from the same background to back them up to perpetuate the system that serves them so well.
April 23, 2013
Indeed, very true.
April 24, 2013
This is from an article yesterday by Michael Wright on the crisis in France:
“But it is the effect that the scandal has had on the people of France that I find so telling, and so touching. In Britain, we are used to our politicians lying to us. It is one of the cosy constants in our daily lives: rocks are hard, trains are late and politicians are incapable of telling the truth. This is fine, because at least they are consistent, and their mendacity helps us to forget how easily we lie to ourselves. In France, many people really do seem to believe that the state is run by people who have their best interests at heart.”
April 23, 2013
@Mike Stallard:
Actually, you did elect Mr Van Rompuy, only not directly but indirectly, by electing Mr. Cameron, who voted directly for Mr Van Rompuy. You also didn’t vote for Cameron directly (unless you live in his constituency). Even your election of Mr Farage next year may be not be a direct vote for him.
April 24, 2013
We may, as you say, have indirectly voted for rumpy pumpy but we can NEVER get him out.
April 26, 2013
@Vanessa: The Camerons may indeed not want to get of him as yet, but do not dispair, Van Rompuy will be gone after next year.
April 25, 2013
Peter van Leeuwen. No doubt you are technically right. However, when UKIP top the poll in the 2014 MEP elections, you will thenceforth see a different Mr Cameron.
April 25, 2013
Gordon Brown voted for Rompuy who no one (apart from his safe labour seat constituents for him to be an MP) in the UK voted to be PM, not even his own party.
April 23, 2013
@Mike Stallard: “I hardly got to elect the MEPs who came from a party list.”
What utter nonsense, don’t blame others if you don’t have a clue, the party lists before polling (and thus who are most likely to be elected to office), so it is just like FPTP, don’t like the candidate(s) – don’t vote for the party!
Tend to agree with all the rest you said though Mike, I who used to defend the Tory party here, ho-hum – so Mr Cameron has two years to save my vote (its already been lost locally on local issues), otherwise it will be going elsewhere, and it is not just about the EU either…
April 24, 2013
What if you like the candidate at the top of a party’s list, but you don’t like a candidate below him on the list who may get elected on his coattails?
April 24, 2013
@Denis: If I like my prospective MP, the parties policies and its leader but don’t like some of the other candidates should I not vote for my preferred MP/party?! Politics is not, or should not be, about the personality but the policy…
April 26, 2013
As you know under the present vile system for the EU Parliament elections you can only vote for the whole of a party list, you cannot pick and choose between candidates on a party list. Therefore those who vote for a party because they agree with the lead candidate that we should leave the EU may well unwittingly help to elect a eurofederalist further down the party list, which cannot be right.
April 23, 2013
1. The UK government is pretty profligate as well, as countless people on this blog have pointed out over and over.
2. The UK government has made plenty of cuts (e.g. capital spending, even if they bizarrely like to blame Labour for this; and research if you count in terms of real money instead of nominal money; and education at the tertiary level). Unfortunately they have cut the useful / productive stuff rather than the waste /non-productive stuff, see point 1. (One of the few capital spending projects they are happy to throw money at is HS2, which will give a net negative return to UK PLC.)
3. I did not vote for Cameron, Clegg or Osborne (and only a few tens of thousands of people did). So what.
4. Mr. Cameron is just Mr. Blair over again, but hopefully, unlike Blair, he will be removed from office before he gets the UK involved in some pointless foreign war.
Unfortunately UKIP will not win the next election because if they did it would be amusing to see all the UKIP fanboys discover that in the end the people who are in UKIP would do an even worse job of running the country than the current jokers. Blaming all the problems a country faces on Johnny Foreigner has generally not been a recipe for success in the world.
April 24, 2013
I think the 2015 election is going to be very interesting. You say UKIP is not going to win – that may be true. But who is going to hold the balance of power ?
People are so fed up with the 3 EU parties realising that none of them says anything different.
You may think UKIP is made up of ignorant citizens but it has many, many ex-tories who, surprisingly, have worked in government offices. Maybe not in cabinet but nonetheless no more or less experienced than most people who put themselves forward as candidates in elections from any of the other parties.
April 23, 2013
Not fast enough, and the deficit figures are still a work of fiction.
We know from the ONS that between 2005-2010 that the pensions debts which are still hidden off the books went up by 736 billion a year. That’s per year, not over a 5 year period.
That’s not being got under control, its being increased.
April 23, 2013
From “…..bloggers who both think the deficit reduction is too fast and who think the UK should be following EU policies faithfully” ?? That comprehensively cuts me out then.
April 23, 2013
Tax, borrow, waste, and inconvenience in every single direction from this coalition. Plus say one thing quietly but just do the opposite or rat on the voters as with Osborne’s IHT.
April 23, 2013
I’ve said it before and I will, no doubt, say it again. Give me executive powers to run Wokingham Borough Council and I will have the head count down from 5000 to 4000 within two years with no identifiable affect on services.
Give me executive power to run the country and I’d double military pay and pensions and then take on the public sector unions!
April 23, 2013
Cuts me out too!
April 23, 2013
The majority out here in the real world want out of the EU as soon as possible. There are NO benefits other than bureaucracy and costs by unelected dictators. The EU is a political union by stealth and we do not have to be in it to trade and cooperate with our European friends. China, America, Japan etc. are proof of the nonsense spouted by the three political leaders or the 3 million jobs at risk baloney. Not with an annual trade deficit of £50 billion it won’t! So if the mainstream parties won’t do it then it has to be more votes for the sensible policies of UKIP.
April 24, 2013
Firstly the EU isn’t unelected and the next election for MEPs is in 2014.
Secondly the EU has always been about a political union and this was mentioned in the treaty of Rome. There’s nothing stealthy about this.
Thirdly the UK will be subject to tariffs and quotas if we become like China, Japan, and the USA.
Fourthly the trade deficit is still likely to be £50 billion even if the UK leaves the EU because the UK doesn’t make anything other EU countries want to buy.
April 24, 2013
You do come out with some stupid statements at times Uni, but this one…”the UK doesnt make anything the EU wants to buy” has to be your most stupid.
April 24, 2013
“Secondly the EU has always been about a political union and this was mentioned in the treaty of Rome.”
Here is the Treaty of Rome:
http://www.eurotreaties.com/rometreaty.pdf
so please point out where it was clearly mentioned that it was about a political union.
Reply It said “ever closer union”, not political union
April 23, 2013
If ever there was a case for a change in our relationship with the EU it’s this.
We are outside the Euro and there seems at last to be agreement between all political parties that we have no intention of joining. The EU therefore has no reason to be consulted or advised of the UK budget or our financial planning.
This is not an area for “renegotiation” we simply need to give polite notice that from a certain date we will be opting out of it.
What are Brussels going to do :
Withhold money from the UK ? No : we are a net contributor
Fine Us ? No : Ditto
Throw us out ? No : they need our money
Exclude us from the single market ? No : we have a trade deficit with the other 26
Get even more annoyed with us ? No : we are already the leading member of the awkward squad.
I sometimes wonder whether our politicians realise how strong a hand we are holding.
April 24, 2013
1) The UK agreed to have their budget checked by the EU so we can be fined for non-compliance by the ECJ.
2) The EU is not dependent on UK contributions, so they can easily throw us out and raise the UK’s net contribution through a minor increase in the EU’s budget.
3) Losing access to the markets of other EU countries will destroy large parts of the UK economy as 50% of the UK’s exports go to the EU. The trade deficit means the UK is in a weak position, not a strong one.
The politicians have realised how weak the UK’s hand, you have not.
April 24, 2013
Uni,
In a post just above this one, you stated that “we dont make anthing the EU wants to buy” and now in this post you are stating “losing access to the markets of other EU countries will destroy large parts of the UK economy as 50% of our exports go to the UK”
Come on Uni make your mind up.
April 24, 2013
No; as quite obviously you have zero loyalty to this country I expect you’ll be sorry about this and want to get it changed, but under the terms of our euro “opt-out” protocol we are exempt from the EU treaty provisions which allow sanctions to be imposed for non-compliance over the budget; see my more detailed comment on this.
April 24, 2013
My point is that as a net contributor any money withheld from us in fines can be recouped by not sending Brussels our net contribution.
According to Nigel Farage it’s more than £50m per day but I’m sure that’s an exaggeration.
The EU are certainly not going to throw out a net contributor and GB is a country with which the other 26 have a trade surplus ! In other words, they sell us a lot more than we buy from them.
You are quite wrong : our adherence to EU rules and the ridiculous pro-Brussels bias in the Foreign and Diplomatic service means our politicians don’t get to play their strongest hand in negotiations.
Daniel Hannan recently told me that British diplomats and the Civil Service are prevaricating in the hope of a return to normal, quiet subservience when Ed Milliband wins the General Election in 2015. God help us !
April 24, 2013
You have forgotten our fish to name but one of our strengths. If they threw us out we would take back our 200 mile exclusion zone and fire on all the Spanish boats fishing in our waters.
There are many other examples of how strong a position we hold. Think about it !
April 25, 2013
1) We are not in the Euro zone so we don’t need our budget to be checked.
2) The reason that France removed its veto and let us into the EU was that it wanted an additional rich paymaster. Germany’s motivation is similar.
3) We won’t lose access to EU markets. They won’t cut off their noses to spite their faces.
Fear, Uncertainty and Doubt. FUD, FUD and more FUD. That’s all we ever get from you.
April 23, 2013
“the absurd paradoxes and contradictions of modern UK politics”
As you are well aware, we have had a convergence amongst the main parties and we now have virtual LibLabCon One Government. There is currently only one alternative: UKIP.
April 23, 2013
@Winston Smith: There are many alternatives, UKIP is just one, the Tory party could change, Labour could change, the plebs might decide that far from UKIP being the only alternative is actually the SLP!
It is sort of comment that certain UKIP supporters make, being very arrogant, that actually puts dissatisfied voters off UKIP…
April 23, 2013
UKIP are pushing at an open door – but they need to improve their tactical effectiveness at local level.
April 23, 2013
Given that the UK’s deficit reduction has been a failure despite being a policy goal I’m not sure what you are advocating! Maybe hoping that somebody will say x years of dither needs replacing with action?
April 23, 2013
I don’t presume to be someone you would actually refer to directly in one of your posts, but I figure I’d point out that I’ve never at any point suggested we should follow everything the EU says faithfully. I’m an economist and therefore I know most decisions made by politicians are wrong.
April 24, 2013
They are wrong because they take advice from usless academic economists who have failed to predict any of our economic problems or offer practical solutions. They have no incentive to do otherwise because they are employees of the State and, consequently, are not accountable, nor is there any risk to their earnings and unsustainable benefits.
April 24, 2013
Indeed “experts” who know what the best advice to give is, in order to maximise the chances of future promotion.
April 23, 2013
Labour are absurd as usual why are they signing up to this nonsense? But then Cameron and Clegg are doing just the same.
But do not worry though, I am quite sure we can fully rely on the cast iron ratter to ensure we have a fair, heart and soul, referendum just a few years after he has left office.
April 23, 2013
Why would you want to hear from the usual two or three pro-EU cranks who comment on this site regularly unless it is to provide a bit of amusement for the other commenters? Their views will be predictably absurd.
April 23, 2013
Nothing like having a closed mind is there Max?!
April 24, 2013
Well the argument they put are so funny, irrational and so easy to show to be such. So it is entertaining.
A bit like saying we do not want to be a “Greater Switzerland/Norway” but never giving a single sensible reason why.
April 24, 2013
lifelogic: “Well the argument they put are so funny, irrational and so easy to show to be such. So it is entertaining.”
Well yes and I suspect they are saying the same about many of your arguments “Lifelogic”, but of course I would not expect someone who thinks they have ‘logic’ on their side to agree with me…! 😛
April 23, 2013
I don’t think we should apply this country to what the Labour party have signed up to, even though the EU thinks we should. Its wrong for them to dicate to us when we are not in their eurozone. We should have a government who has the will and guts to say no this is to much to far and opt out. Why the present government adhere to all the rules so dogedly I’ll never know, where is their bottle?
Its obvious it does not suit many, it goes against the grain of most in this country so it would have the countries backing, so why do they hesitate?
The last Labour government would have sold our souls if it meant them gaining power again, so this should be made public knowledge and expose them for what they signed up to. Trust them again, no way.
April 23, 2013
So we are not actually going along with it if Labour get in, right? I can’t believe any Country wants to be controlled by others unless there is war time and a peace initiative from outsiders.
April 23, 2013
Judging by your tone I believe that it should remain an internal matter for the UK to sort out, we are not in the EZ so it really should be none of their business. It is just another illustration of how far the tentacles of this monster now stretch, all without the will of the people.
Time to accelerate our exit.
April 23, 2013
best comment may be yesterday’s YOUGOV poll – UKIP back on record 13 % Conservative on 32 & Labour 39. I think it reasonable to add UKIP & Conservative vote-share (though proportion of UKIP that will vote Conservative in 2015 is unknown). That gives 45 v 39 – best margin for several months.
April 23, 2013
@Christopher White: Sorry but that poll indicates a Labour Government in 2015, not a Con/UKIP coalition, 13% on any vote is not going to put any candidates backside on the Green benches of Westminster, in fact it might5 not even save the deposit…
April 23, 2013
Clearly a UKIP deal is the only hope for the Tories, but who can do a deal with serial ratter like “heart and soul” and the IHT ratter Osborne.
April 23, 2013
I agree entirely with the Conservative position as described. Nor should the EU be involved in budget decisions.
It is, however, delicious to see the Left skewered on every single issue – they have to operate a personal and party duality on everything from home ownership, selective education and energy to their position of womens’ rights as opposed to that on faiths (which have different views-ed) but OK so long as they are not Christian.
Why are they taken seriously ? It beggars belief.
April 23, 2013
Deliberate Stupidity:
Einstein defined stupidity as “doing the same thing over and over again and expecting a different outcome” or words to that effect (note to pedants, I couldn’t be bothered to look the exact quote up)
So what I have been pondering on is why. Why do all the main party leaders of the LIBLABCON want to keep Britain in the EU? It has demonstrably done nothing whatsoever to enhance this country and has done much to destroy it, bleeding us of our natural resources (fishing, agriculture etc) and hard earned wealth in the form of contributions we could easily spend better ourselves and taking our sovereignty to boot.
Any MP who pretends otherwise is either;
A) lying
AND
B) stupid
AND/OR
C) In it for the juicy sinecure at the commission (or has already sold their soul for such)
So why keep it? Why continue to be part of the EU?
I think they’re scared….
None of them want to actually do anything. None of them want the real responsibility of running a country. Look at Mr. Cameron, THE PM! commenting personally on the issue of a (footballer-ed) who kicks a bag of wind about biting another (footballer-ed) on the arm and he’s got form: talking about carrier bags in in supermarkets as well back in 2011.
C’mon he’s supposed to be the PM! hasn’t he got more pressing demands on his time and more important priorities to deal with?
That’s his level alas!. That is the extent of his expertise. That’s all he has. Leading the running of a whole country is beyond him. Far easier to let the wrinkly multi-chinned unelected unaccountable demons of the EU take control, and leave him to sort out carrier bags, fat tax and salt restrictions, non existent global warming (how I’ve felt the heat this winter!) and chomping mad footballers…..
And let’s not pretend Clegg and Milliband or the other front bench clowns could fare any better.
Cameron is not a Prime Minister and was never likely to be one. He is a middle manager in a low-end business and that is all he will ever be.
Thanks to him and to Blair and Brown before him, the UK is a low-end business now. As long as he and his ilk are there wielding centralised power while uttering “I’m not listening…I’m not listening lalalala” with his fingers in his ears, that’s all we will ever be.
We are approaching (and will suffer the consequences of) the nadir of an affliction (the EU) imposed on us by stealth, originally sold as dishonestly as the worst commission hungry dodgy dealing rogue trader on the high street you could ever find
There is only one way to govern ourselves again and take back our sovereignty; invoke article 50 of the Lisbon Treaty give notice of leaving (every EU regulation and legislation will still stand) and we can then have the luxury of unpicking 40 years of integration and homogenisation at our own pace while saving heaps of cash and benefiting from having direct influence on global policy via EFTA just like Norway does or via bilateral agreements such as Switzerland.
To keep on with this renegotiation meme (a fantasy) and illegal under EU legislation due to the Acquis communautaire or pretend we govern ourselves is deliberate stupidity of the highest order to veil an outright lie.
April 23, 2013
I wholeheartedly agree with the propsal from the EU to cut government spending; I merely disagree with them as to which part of spending ought to go. As the EU has for the last decade and a half failed even to strong-arm its own tame financial watchdog into certifying its accounts as not corrupt, then clearly it is our duty as a sovereign nation to help uphold the international rule of law by drastically cutting the amount of money we give to them.
After all, we have signed international treaties binding us to act to reduce corruption as far as possible, and we have much evidence to suggest that the EU is corrupt, and no evidence to the contrary. Clearly we must act, but cutting our grant to them to zero if necessary, until such time as correct accounts are submitted.
April 23, 2013
@Dan H: Indeed, if we stopped paying the membership fee to “Le Club” (and thus leave the EU), and used the money to pay-down the deficit, how long would it take?…
April 23, 2013
No matter how many times you tell that lie it will never become true. Every year the Council of Auditors has approved the EU’s accounts.
If the europhobes had any evidence the EU was corrupt they would be using this evidence, rather than launching smear campaigns.
April 24, 2013
You should read Animal Farm.
April 24, 2013
Not sure he would understand ‘Animal Farm’, but let’s hope he reads it now and gets a better perspective of the EU aristocrat!
April 24, 2013
@U5: No mater how many times you tell that lie it will never become true. The EU accounts have NOT been signed off by the Council of Auditors in years. To try and defuse this impasse the Commission, it would seem, has suggested that the auditors should accept that there will be some irregularities whilst getting MEPs to vote to accept the partial audit!…
As for you other comment, “If the europhobes had any evidence the EU was corrupt they would be using this evidence, rather than launching smear campaigns.“, U5 do try and keep up with the actual events. A certain ex UKIP (now Conservative) MEP has done just what you say should have been done, doing so whilst in the role of the EU’s chief accountant, for their pains they were sacked by the commission for raising such concerns, and has ever since been regularly vilified by hard-line europhiles ever since – in other words rather than investigating the allegations supporters of the EU chose to launch smear campaigns against the whistle-blower…
April 23, 2013
I have just spent half an hour persuading a nearby resident to vote UKIP . I will now send him your blog ; I could not produce a better argument in a hundred years !!! .
April 23, 2013
We are not going to get enough UKIP b…. on seats in time for EU change ….. better change within the parties than branch off . Building up parliamentary seats takes a long time.
April 23, 2013
I see that Barroso may be advocating less austerity now – change of heart? Merkel apparently unenthusiastic, but Schauble, the barometer, is supposed to be showing signs of weakening on this.
http://www.spiegel.de/international/europe/barroso-says-austerity-in-europe-has-reached-its-limits-a-896019.html
Time for Growth: Austerity Has ‘Reached its Limits,’ Barroso Says
“…Striking statements were made by one of Europe’s most powerful men on Monday night, when European Commission President José Manuel Barroso said the strict austerity measures thus far imposed on the EU’s beleaguered economies may have reached their political limits.
Although this policy is “fundamentally right,” it has nevertheless “reached its limits,” he told a conference in Brussels. “A policy, to be successful, not only has to be properly designed, it has to have the minimum of political and social support,” he added….”
April 23, 2013
That is code for asking for more money to waste.
April 23, 2013
” … the absurd paradoxes and contradictions of modern UK politics.” You telling us? We out here, has to put up with every consequence of Westminster’s amateur Punch and Judy politics. “That’s the way to do it” with a shout of “Oh no, it isn’t!”
Just tick the boxes and proceed to ignore it. If I remember correctly, France and Germany were the first to break the EDP. The “no bailout” clause fell at the first hurdle as well.
PS. Has anyone got any Greek Euro notes, serial number starts with “Y”. The rumour is that prior to the Troika nuking the Greek banks, all the Y series Euro notes disappeared from bank counters and ATMs. Does anyone know if the same thing happened in Cyprus with its “G” serial numbers? 😉 .
April 23, 2013
JR, I appreciate we are getting near the County elections and the General is not that far away now. So I understand that some of my posts are now getting the delete button or the long pause before a moderation equivalent.
I understand that if you are not on the front bench or a PPS bag carrier, you are lobby fodder. I have to agree with “credible” above, we really do have an extremely deficient democracy. Crikey, there are some African states that have more open systems than ours. Be that as is, today I read the Dutch economy has hit the skids. They are following the same suicidal austerity ideology as the UK; the Troika model. Me; an original Orange book Lib Dem, have given up. I can’t see a mechanism to get us out of this nightmare. We need a quantum shift in UK politics. So as Bonnie Tyler said:-
Where have all the good men gone
And where are all the gods
Where’s the street-wise Hercules
To fight the rising odds
Isn’t there a white knight upon a fiery steed
Late at night I toss and I turn and I dream of what I need
I need a hero.
Reply I post many items critical of the Conservatives. I only delete items which are potential libels of people and institutions, and delete references to other sites I have not time to check out.
April 23, 2013
Just tell them that we will be good boys when the other naughty boys do as they are told too. We have behaved with chicken and pig accommodation but they haven’t. And by the way we don’t have to worry about our deficit because we just forge it. What a bloody cheek they have.
April 23, 2013
Slightly off topic, but Keynes summed up the whole debt/deficit business in ten words when he said “Look after unemployment and the budget will look after itself.”
What he meant was that government should pitch the deficit (or suplus) at whatever level minimises unemployment without exacerbating inflation too much. As to the debt and deficit, those are simply numbers that come out in the wash, and should be ignored.
April 23, 2013
Unemployment can be looked after by removing benefits from the work shy and getting rid of the minimum wage. The deficit is irrelevant in a true market economy.
April 24, 2013
@JimF: You really do seem to be living on Mars…
April 24, 2013
While that might work in the world of right wing fantasy the problem is that we live on planet earth. Removing benefits will just make the poor more desperate and as long as there are more people unemployed than there are jobs available it won’t make them more employable.
Also all removing minimum wage will do is reduce the wage of many jobs. It won’t result in more jobs being created.
April 23, 2013
Ah! The mythical NAIRU…
Rather hard to pin down when you have large scale immigration.
April 24, 2013
@Mark: Indeed but if we did how many UK passport holders would be forced to return to the UK (due to tit-for-tat measures taken elsewhere), thus there might not be much of a change in the total numbers. The problem is not so much the numbers of people wanting/needing jobs/welfare but the number of jobs available (and if the intention is to reduced welfare spending that means full time and properly paid employment as in-work benefits is were the majority of the welfare budget is spent).
April 23, 2013
While statistics are a useful measure of what is happening it is about time we stopped chasing them.
We need government plans to improve productivity, improve employment, improve the balance of payments and improve the life balance of the majority of the population.
Let us see some proposals on these fronts backed up by a balanced financial appraisal as to how they are to be acheived. Let statistics follow the solutions and stop them being the immediate end.
For example improve employment levels by reducing the cost of employment. This should be done by reducing employers’ NI contributions. If successful it would result in a higher take from income tax, VAT, corporation tax etc. Will this be balanced? We cannot be sure but it is worth the risk of trying.
Similarly improve the income of the poor by raising the minimum wage. This will result in a similar increased tax take, allowing further reductions in employers NI contributions thus further speeding up the employment cycle.
April 23, 2013
So, reduce employers NI contributions and then make them pay higher wages?
I grant you a honorary ‘A’ Level in Keynesian Economics.
April 23, 2013
For further information Protocol No 15 is the UK’s “opt-out” from the euro, and may be read starting on page 285 here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2010:083:0201:0328:EN:PDF
It does indeed say:
“5. The United Kingdom shall endeavour to avoid an excessive government deficit.”
but before that it says:
“4. Articles 119, second paragraph, 126(1), (9) and (11), 127(1) to (5), 128, 130, 131, 132, 133, 138, 140(3), 219, 282(2), with the exception of the first and last sentences thereof, 282(5), and 283 of the Treaty on the Functioning of the European Union shall not apply to the United Kingdom. The same applies to Article 121(2) of this Treaty as regards the adoption of the parts of the broad economic policy guidelines which concern the euro area generally. In these provisions references to the Union or the Member States shall not include the United Kingdom and references to national central banks shall not include the Bank of England.”
At this point it becomes necessary to cross-reference to the main bodies of the treaties to try to establish exactly what does and does not apply to the UK under the terms of the “opt-out” protocol, but the procedures discussed in this blog article spring from Article 126, and the UK being exempt from:
“9. If a Member State persists in failing to put into practice the recommendations of the Council, the Council may decide to give notice to the Member State to take, within a specified time limit, measures for the deficit reduction which is judged necessary by the Council in order to remedy the situation.”
and
“11. As long as a Member State fails to comply with a decision taken in accordance with paragraph 9, the Council may decide to apply or, as the case may be, intensify one or more of the following measures:
– to require the Member State concerned to publish additional information, to be specified by the Council, before issuing bonds and securities,
– to invite the European Investment Bank to reconsider its lending policy towards the Member State concerned,
– to require the Member State concerned to make a non-interest-bearing deposit of an appropriate size with the Union until the excessive deficit has, in the view of the Council, been corrected,
– to impose fines of an appropriate size.
The President of the Council shall inform the European Parliament of the decisions taken.”
presumably means that as far as the UK is concerned the EU has no legal means to follow up on its disapproval and try to enforce compliance.
Perhaps JR could explain precisely what requirement the Labour government accepted in 2008, and why.
April 23, 2013
The Cuts – not far enough nor fast enough – says this scrounger !
The EU wants more ? – Yikes – good on the EU – from this Euro Sceptic !!
Welfare – the largest single budget – could be more generous and save money ! Honestly !!…
The Green Party ‘Watermelons’ propose a ‘Citizens Income’ – their starting rate would be that of JSA (c.£72.00 per week). This sounds remarkably like What Liebores Lord Desai once proposed. The money would be paid to all adults – without any nonsense – no demands that the unemployed look for work. This benefit would be taxable – for those earning over the income tax threshold = not Moi = sorted !!!
April 23, 2013
And what happens when the money runs out because nobody is working?
April 24, 2013
The money runs out – simples !
April 23, 2013
I think the UK should be reducing its deficit much, much, much faster. Not because the EU says so, but because:
it would be sound finance;
a deficit means more debt, which means more future taxes;
the Conservatives and Lib Dems both promised at the GE to eliminate the deficit by 2015.
April 23, 2013
I wish I had more time to make a full contribution but for now my response to the EU and Labour lovers here is…. ha ha ha ha ha ha ha ha ha ……answer that and stay fashionable. I doubt the usual suspects will reply to this comment. Sorry not doubt, but “know” they won’t.
April 23, 2013
The fact the UK economy is bumping along at about zero growth, shows that the Government is reducing the deficit at about the maximum rate possible without entering into a PIIGS style economic death spiral with permanent recession / depression. Where I think the Government has got it wrong is that when Margaret Thatcher left office Government spending was about 32% of GDP, currently it is 49% of GDP. If you want any significant economic growth this has got to be reduced. This coupled with loose monetary control, crazy energy policies and EU dictated supply side legislation means that we are currently stuck with stagflation, stagflation and stagflation with no significant growth in sight!
Unfortunately, Europe has learnt nothing from French LMU which linked a number of European countries into a currency union with a common percentage of gold and silver in their coins. In 1908 Greece was kicked out for fiddling the percentage of gold and silver in their coins more blatantly than the others! In 1927 the whole system collapsed due to the fatal weakness that there had been no fiscal or political union. It all sounds familiar doesn’t it. France Hegemony was the reason for setting up this system to counter their loss of power from their defeat in the Napoleonic wars. French Hegemony and the control of German industrial muscle has also been the driving force for the Euro and Eurozone. The outcome will be the same it is just a question of how much economic damage happens in Europe before this occurs.
Likewise, France and some other European countries have learned nothing from their more than most economic suffering in the 1930’s from clinging to the Gold Standard. The Euro instead of using the fixed exchange rate of gold uses the German cost / productivity standard which also makes most Eurozone countries uncompetitive and in a permanent recession / depression, just like the Gold Standard did in the 1930’s.
Al European countries including the UK are trying to control their deficits using front loaded tax rises and back loaded spending cuts, which we now know from OECD statistics is the worst way possible economically in trying to control a deficit, where each 0.5% tax rise decreases GDP between 0.9 and 1.7%.
The increasing dictatorial interference of the EU in the formation of UK laws and policy in my number one reason for being in the process of leaving the UK, as since childhood I always promised myself I would not live in a dictatorship, which is effectively what we have with an undemocratic, unelected, unaccountable administration in Brussels which imposes 80% of our laws. With an (words left out-ed) Commission President with his 27 person unelected Politburo being the only people able to introduce legislation into the EU parliament for their rubber stamping. This is going to get worse with qualified majority voting applying to many more areas from January 2014. So a German, French or Greek minister who I and no UK citizen has any power to elect and will be driven for what is best for their reelection changes in their country can decide what legislation is good for me, my family and the UK as a whole. This is rapidly rendering the UK parliament as to little more than that of the head of a provincial area. We can see how compatible UK interests are under such a system with their imposition on the level of bonuses that one sector of private industry can pay throughout the world with the banking bonus cap. Margaret Thatcher was right again “Socialism by the back door”.
With this sorry state of affairs for the UK and Europe it is no surprise that I am a UKIP supporter. The citizens of the UK and Europe deserve better than what the EU costs and delivers.
April 24, 2013
Al European countries including the UK are trying to control their deficits using front loaded tax rises and back loaded spending cuts, which we now know from OECD statistics is the worst way possible economically in trying to control a deficit, where each 0.5% tax rise decreases GDP between 0.9 and 1.7%.
Either provide these OECD statistics or admit you made them up.
since childhood I always promised myself I would not live in a dictatorship, which is effectively what we have with an undemocratic, unelected, unaccountable administration in Brussels which imposes 80% of our laws.
It’s not a dictatorship as the Councillors and MEPs are elected, and the Commissioners are appointed by the Councillors and have to be approved by the MEPs.
The UK is far more like a dictatorship that the EU because the FPTP electoral system results in MPs being elected with as little as 20% of the votes, 400 MPs are in safe seats so they don’t have to worry about being re-elected, and the Lords is unelected.
With an (words left out-ed) Commission President with his 27 person unelected Politburo being the only people able to introduce legislation into the EU parliament for their rubber stamping.
The Commission is the executive, so it’s their job to introduce legislation for the legislator (the European Parliament) to vote on. Also the European Parliament is free to reject or amend this legislation.
This is going to get worse with qualified majority voting applying to many more areas from January 2014.
Since when has allowing one country the right to veto the wishes of the other 26 been considered fair or democratic?
So a German, French or Greek minister who I and no UK citizen has any power to elect and will be driven for what is best for their reelection changes in their country can decide what legislation is good for me, my family and the UK as a whole.
QMV prevents this happening because if a majority of the countries don’t agree to this it will be rejected. You’ve also ignored that the UK can also try to force changes on other EU countries because it doesn’t fit with your “EU is trying to attack the UK” ideology.
We can see how compatible UK interests are under such a system with their imposition on the level of bonuses that one sector of private industry can pay throughout the world with the banking bonus cap.
Given how much popular support this bill had in the UK it seems that the problem isn’t that the EU doesn’t represent the people but that it shows how little the UK politicians represent the people.
April 23, 2013
I think the whole debate of “too fast – too slow” is bogus.
The discussion should be about where do we spend the public money for the best effect on the economy.
We certainly have too big a state, too much welfare, poor control of the immigration. These areas should be reformed and the spending reduced swiftly and decisively, especially in the areas of administration. Taxes and benefits should be streamlined, automated, simplified. Businesses should be freed of volumes of state regulations.
On the other hand, we have unproductive workforce, lack of capital, lack of innovation. The Government should invest in basic research, vocational education, small enterprise a lot more during the slump than during the boom. Pro-cyclical tightening there is really self-defeating.
It is not the level of debt that caused the downgrades; it is diminishing prospects of economic growth that would warrant the means to repay it, because no-one can see any plausible plan of action to get things moving again (hint: “cutting” does not count as a plan).
April 23, 2013
I see from Governmment figures that we borrowed just £300 million less than last year.
Talk about too fast, too deep is simply pie in the sky. as I would suggest the margin for calculation/error is more than this sum.
The simple fact is:
The government has just tinkered around the edges so far !
Opportunity was knocking, but has been wasted !
We have really just continued with print, borrow, spend and waste.
April 24, 2013
Alternatively the Chancellor put off some spending until the financial year ended so the figures wouldn’t show an increase in spending. For example delaying payments to international organisations.
April 23, 2013
This doesn’t just apply to the UK but to all 27 EU-members, comes with being member of the club! Your man in Brussels (Olli Rehn) is apparently quite easy on cuts, now that more international and national voices are pleading for growth rather than just austerity. So why not have a talk with him? As long as the UK can show that it is planning to make structural reforms over time, all should be reasonably easy.
You cannot really disown the previous Labor government or its policies. They were the right government for the country, having been elected democratically. Taking responsibility for democracy includes those times when your party was not in government.
April 24, 2013
Regarding the latter half of your ‘rant’ – do you include the PVV – from your homeland ?!
April 24, 2013
@Robert Taggart: You put me in a difficult position here, as I despise the PVV for a number of reasons. But just like you, I have no choice, it has been a democratically elected party.
April 24, 2013
Oh no, not “the club” crap again.
April 24, 2013
@Denis Cooper: Would you have prefered the word union? The UK is part and parcel of these decisions. You haven’t yet left the club. I think that you even think it unlikely that this will happen in future, even though you may want to leave.
April 25, 2013
Don’t you understand anything about British history? No parliament can bind its successor. Take the Treaty of Utrecht. It brought about an uneasy peace. However, when the Whigs ousted the Tories, it didn’t last very long.
April 26, 2013
Uturn on Utrecht ?
Next…
Uturn on Union !
April 23, 2013
Given how the Chancellor keeps claiming that he’s reduced the deficit by a third, has created over a million jobs, and that his plans will half the debt by 2017-18 (pushed back from 2014-15) he should have no problem reducing the deficit below 3% of GDP. After all it’s not like he’s borrowing more money every year, unemployment is static, there’s no annual growth, and he’s constantly increasing the national debt.
April 24, 2013
@U5: Indeed, but perhaps he is following The Gordon Brown Book of Presentational Style, after all not only did GB once claim to have abolished boom and bust but later went on to claim that he had “saved the world”… Sometimes politicains (and indeed bloggers) allow themselves to get carried away with the spin, most people with any sense simply looks through it all and just deals with the facts as laid out in the official documents etc.
April 23, 2013
What on earth can anyone say! The whole thing is completely bloody crazy and beyond my understanding. We have got to get out of the EU, I don’t really care how. Maybe we should abandon good manners.
There are many mentions of UKIP. I would vote for them in this respect but I support another, so far much smaller party, the English Democrats, who also want out the EU but campaign for an English parliament too. We are frustrated by the lack of democracy in England. The fact that MPs from Scotland Wales and NI can vote on English only issues in the UK parliament is as unjust as the EU dictating to the UK, but it doesn’t get the level of attention it should and is not as high yet in peoples’ conciousness.
UKIP is against an English parliament.
April 24, 2013
@TPW: Funny how you don’t mention if you think English MPs should be able to vote on Scottish, Welsh and NI affairs?… Also, as I understand it UKIP are against a English parliament because they support a United Kingdom.
That said, of course should any of the four nations democratically decide to leave the Union then they will not have Westminster MPs in any case, problem solved! In my opinion parties such as “The English Democrats” are just as much a part of the problem as any of the ‘nationalist’ parties from the other four nations.
April 23, 2013
“The journey not the arrival matters.” – T. S. Eliot
Or, to step back further, according to the EU, the intention to take the journey is more important than either the pace of the journey itself or the arrival.
You are thinking too much in quantitative terms for the Frenchified EU; to the true French bureaucrat everything can be thought of in qualitative terms but nothing in quantitative ones. The 3% is merely an aspiration, and is only symbolically important; whether or not it is attained is less important than the fact that one has taken, on balance, a series of measures which will move things in generally the right direction. If one fails to move in the right direction having taken measures, this might either be a consequence of external factors or the fact that the 3% was wrong in the first place.
April 24, 2013
The modest economic growth enjoyed by the UK in the period 1997-2008 was fueled by public and private borrowing. Since everyone has subsequently had to repay debt instead, the impetus to growth has naturally disappeared. As long as that deleveraging process continues, and it may take another ten years, the compensating effect of government spending will be negligible. Obama’s trillion-dollar stimulus was an example. So the government might as well cut spending and get its house in order.
April 24, 2013
I think this article by Alistair Heath, editor of the City AM business newspaper, sums up the situation regarding deficit reduction rather nicely:
http://www.telegraph.co.uk/finance/comment/10013370/Keynesians-are-wrong-because-George-Osbornes-cuts-are-actually-very-modest.html
As to whether our budget should be subject to review by Brussels, why not? If it’s a sensible budget then there should be no problem, whereas if it’s a foolish one then surely it deserves open criticism by whomsoever wishes to do so, including the hated Brussels bureaucrats.
And as to allowing Germany/Brussels to enforce fiscal rectitude on us, well somebody will eventually do so if we continue with the current massive deficits. Which is better, to have discipline enforced by an open and agreed procedure enshrined in an EU treaty, or to simply wait until the faceless figures behind the markets finally decide that the UK has gone too far and force a much more painful correction on the country?
In an ideal world, I agree that our government should be free to spend as it wishes, but successive governments involving all three main parties have clearly shown themselves to be very far from ideal, and totally incapable of balancing the books voluntarily. The question is not should somebody force them to do so, but who do we want to rein in our profligate politicians? Angela Merkel or George Soros? I know which one I’d prefer, but then I have a soft spot for powerful women.
April 24, 2013
That’s all well and good, but there is a difference between the OECD, which also evaluates member countries’ economic policies and prospects, but has no practical call on resources or right to control, and the EU, which can use QMV to impose such things as the Tobin tax, or simply impose via the Troika on Eurozone states without any pseudo-democratic mandate whatever. It isn’t even a negotiation: it’s a dictatorship.
April 24, 2013
Mark, the EU FTT (the Tobin tax you refer to) has nothing whatsoever to do with deficit reduction or getting control of public spending, which is the subject of this blog entry.
It’s not a dictatorship, it’s just a very warped and badly distorted form of democracy. We should remember that our own system has many critics who regard the ‘tyranny of the majority’ as a bad thing, and often rightly so. The dictatorship that will cause the real pain in the end will be that of the unforgiving markets if and when they get tired of out hapless and ineffective leaders. Personally, I like to know who’s to blame for the pain, not just to read rumours that it may be down to the likes of George Soros or PIMCO.
April 24, 2013
Since when has something decided by democratically elected individuals using QMV been considered a dictatorship?
April 24, 2013
I don’t think that Troika decisions are subject to any vote, but perhaps you can show otherwise.
April 24, 2013
There speaks another enemy of democracy.
April 24, 2013
To succeed in its aims the EU project had to either capture the imagination of Political Leaders or attract them through corruption and the fear of being in some way left out or reduced to insignificance. Weak and venal leadership has managed to get us where we are today with the EU. A magnificent project in some ways but reduced to an Orwellian shambles of corruption and deceit in the end. I want no part of it. It is difficult enough to control the greed and selfish ways of some of our own politicians hiding behind privilege and the real strength of other more worthy men, to have to control the naked greed and ambition of continental idiots. I vote for policies not parties, UKIP is the only chance we have to start again in many ways and mould real policies that will provide the means for the next generations of UK people to thrive and prosper without fear of any other nation or Union. It will be hard but cream rises to the top and present main parties have to me curdled.
April 24, 2013
Perhaps if the EU was really an entity we could along with other members of the EU vote for the CDU using PR.
April 24, 2013
Personally I think cuts should go further but that’s not really the point. The point is that it’s NOT the EU’s business.
April 24, 2013
I too want faster and deeper cuts but I’m damned if it’s any business of the EU to tell us.