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Spending rows

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Stephanie Flanders | 09:56 UK time, Monday, 13 July 2009

Feels like old times. For some weeks now there has been a debate going on between No 10 and No 11 over what the government should say about public spending - and when they should say it. The chancellor thinks the debate is moving his way.

Lord Mandelson and Alistair DarlingWhen Lord Mandelson seemed to announce that there would be no official spending review this side of an election, the media took it as a done deal. After all, we had been told Mandelson was now the one pulling the strings, the big winner from last month's painful reshuffle.

If he said it wasn't happening, then surely it wasn't. The fact that he announced it, rather than the chancellor, was only further proof of his new power.

Except, as I said on the Ten O'Clock News that night, that wasn't the Treasury's view at all. In fact, officials there were very clear that the spending review had not been cancelled. Lord Mandelson may have spoken for the prime minister when he talked to Evan Davis on Today. But he did not speak for No 11.

Alistair Darling did effectively delay a proper spending review when he said a while ago that he would not be holding a review before the pre-Budget report. He said he would return to the issue then. That situation still stands. As I said on 29 June, many would say there are strong arguments to have a review sooner, but that's the chancellor's position.

The prime minister and his chancellor had what you might call a lively conversation about Mandelson's interview that Monday morning. The upshot was that the prime minister had to "clarify" his statement later in the day, to the effect that the question of a spending review was entirely the chancellor's decision.

Privately, Alistair Darling has always been clear that he did not think it was credible to go into an election campaign without giving the voters a fairly clear idea of your spending priorities. And as the author of both a PBR and a Budget that laid out the numbers on which all this talk of spending cuts is based, you could hardly say he has hidden the fact that spending is going to be squeezed.

Though he has not openly departed from the prime minister's script on spending cuts the past few weeks, it's been striking for us Treasury-watchers how little he has entered the debate. You did not find him appearing to suggest that spending would not be cut in real terms under Labour.

Nor did Darling rule out the possibility of some form of spending review before the election, albeit without the usual bells and whistles. on Saturday are consistent with that.

I'm not sure whether the PM really thought the government could get through to election day without talking about what parts of government they would spare and what parts they would save. But he clearly wanted to cede less ground on this than his chancellor.

Darling's allies think that Brown is now moving in the chancellor's direction - for example, with his slightly (very slightly) more upfront discussion of the spending cut issue in the week before last, and more candid response to David Cameron in .

I'm not sure the mention of some 'back office savings'" in public services represents much of a damascene conversion by Gordon Brown. But, as I and so many other independent commentators have pointed out, in denying that real cuts in core public services are coming, the facts are against him as well as his chancellor.

Whatever happens, he is finding out what it's like to be PM with an unsackable neighbour next door.

Comments

  • Comment number 1.

    Every family knows that when they personally take on, or agree to cover, massive debts of a family member that we will have to cut back their own expenditure. The Nation is no different.

    The positions of the politicians are taking (of being in public denial) is treating us all like the children that the Red Top press (mainly the Sun) tells us we are. Without the Red Tops we might be able to engage in a more informed and rational debate, unfortunately we (in the form of our politicians) are beholden to Rupert Murdoch, for good or evil, and this is preventing any form of political public acknowledgement of the simple economic facts.

    It would be nice to see 'The Sun' come out and say the National must cut back and the question is not 'if' but 'how'! We need debate. We need to see The Sun (and the Daily Mail) say so! They the politicians will be able to be more open - unless the media 'grows up' we will have an election that is a choice between two hidden agendas (which is not unusual!) but in this case the hidden agendas are huge and Nation changing.

  • Comment number 2.

    With the Prime Minister clearly wanting to inhabit both No. 10 and No. 11, it's no wonder that he's not coming out with anything which even translates as English to the rest of us poor mortals.

    The PM's job is to come up with priorities; the Chancellor's - to come up with the numbers. The sooner Brown realises this... well, the sooner he gets slightly less of a kicking at the next general election and it all becomes hypothetical anyway.

  • Comment number 3.

    "I'm not sure whether the PM really thought the government could get through to election day without talking about what parts of government they would spare and what parts they would save. But he clearly wanted to cede less ground on this than his chancellor."

    Nobody can be sure about what the PM thought or wanted, not even himself - it's the nature of these weasel (intensional) terms. That is the problem with the way so many of us write and talk these days, and in doing so, we just encourage those who are supposed to be accountable, to drift into the same unaccountable verbal behaviour. If one goes through most of this article (and the same goes for most journalists these days) what one gets is opinion (it's not even informed, as it can't be), which can be neither true nor false, but mere hedging, aka gossip/speculation. What reporting should be is just that, verbatim relaying of what happens, and, when done by experts (and I don't doubt SF's expertise), those making statements should be pressured to ensure that they are truth-functional (which, logically speaking, all statements technically are if they are not meaningless opinions/spin). What this article above comes down to stating very briefly is that this government contradicts itself, i.e tells lies, which is no way to run a railroad or anything else.

  • Comment number 4.

    Let the battle unfold: Honesty v Spin

    Go for it Alistair, tell us the truth, and please remember to include the fact that the UK's economic woes are mostly 'home grown' and were 'systematically manufactured' by Gordon Brown during his 10 years as Chancellor - and not by America, or anyone else in the world for that matter, which he would like to make us believe * and is relying on Mandy to help him with ...

    David Clift, a Future 500 Leader

    * remember Nick Robinson recent question to Obama & Brown, brilliantly exposing Gordon Brown's use of the blame game ... (ie it was the USA, and nothing to do with me!) ... for example take a look at and other examples/information provided there too.


  • Comment number 5.

    But there is no money to spend!

    The row is about the best way to pick our pockets to prop up the wreckage that these people have made.

  • Comment number 6.

    Isn't the clue here that the election is very likely to be held this autumn, which would clearly give the government an escape to publishing fresh estimates for key figures such as budget defitic and debt. It would also help to avoid going to the electorate before unemployment numbers turn truly dire.

    In addition, quantitative easing will hit the buffers sooner rather than later and then the effect of the absence of overseas buyers of gilts will become visible and gilts will be harder to sell and yields will go up. This is also an incentive to hold elections in 2009 rather than 2010.



  • Comment number 7.

    The truth will out regardless how politically hard it is.
    I have a bit more respect for Darling since it became obvious he was not completely Brown's poodle
    But I can read and interpret figures from the government and if they were to attempt to enter the next election without admitting there will HAVE to be cuts to operational spending then frankly they would be lying - and we would be right to ignore everything they say
    So how about it Darling - honesty may well be the best policy in spite of what Brown says and does ..

  • Comment number 8.

    "6. At 11:04am on 13 Jul 2009, Econoce wrote:
    Isn't the clue here that the election is very likely to be held this autumn"

    I agree Econoce, the evidance for my assumption is that:-

    1) VAT and Fuel Duty due up in December
    2) NI up in April
    3) 10p Tax fix only applies for this year so re-ignights in April
    4) Labour MP's beleived the treasuries promise (like the last one) that no 10p tax payer would lose out
    5) Airport taxes double next year
    6) We are getting a lot of pre-election promises (ie No University fees if you dont borrow from the state, garanteed elderly health care, new energy idears etc)
    7) 50p tax starts in April
    8) Tax revinew is falling and spending is rocketing and after april falls (from the goverments OWN figures)
    9) Concil tax riese in April
    10) We have a large number of public sector pay reviews early next year which will need to be very low $ rises if any.

    My got feeling is that IF G.Brown has a good conference the september he will go for an election early November.

    So expect Spin Spin Spin from now till then

  • Comment number 9.

    Dear Editor,
    Well and wish to hear the same from you.You have correctly analysed the !spending review! by this article.Your writings are inspiring.
    Now,Britain is facing ,sitting like !cat on the Wall!position on many burning issues.
    Labor partys original concept of public enterprises are slowly changing into modern capitalism.
    Still,entire world is appreciating of London Metro Transport to many people.
    Yes,time has come out from old,rigid economic policies to reality.
    If Labour party politcians,thinkers,well wishers are not upto the mark on their sayings,actions on financial stability,creating more jobs to needy youth,adults,and reducing expenses on Afghan issues may give very good advantages to Conservative Party to get power in future elections.
    I always likes Liberal Party to come into power in Britain.
    Still,my wishes are in dream stages.

  • Comment number 10.

    Re: 3 JadedJean

    Indeed, credibility and trustworthiness are not words I would use to describe this government.

    Not good for the country, not good for NuLab.

  • Comment number 11.

    No.1. John_from_Hendon wrote:

    ".....unless the media 'grows up' we will have an election that is a choice between two hidden agendas (which is not unusual!) but in this case the hidden agendas are huge and Nation changing."


    John,
    Darn it - you've succeeded in hooking me with that line.
    Go on then, please stop teasing and go ahead and explain what the "two huge, nation changing, agendas" actually are........

  • Comment number 12.

    #11. MrTweedy wrote:

    John,
    Darn it - you've succeeded in hooking me with that line.
    Go on then, please stop teasing and go ahead and explain what the "two huge, nation changing, agendas" actually are........"

    (That is JJ's field of pretense of analysing the un-analysable and unfathomable...)

    The parties are strange 'beasts' a complex of contrary interests. Tories are split between the traditional libertarian an one-nation etc., etc. Labour are split between the more social-market group and the egalitarian etc., etc. To say nothing of the partisan support for individuals. None of these agendas match very closely with Rupert Murdoch's and he decides which side we will vote fro, according to the party spin doctors!

  • Comment number 13.

    Steph

    This Might be off thread a bit, but is there any chance of the ´óÏó´«Ã½ journalists telling the UK taxpayers how much the War in Afghanistan is costing the taxpayer, sadly we can all see how much it is costing in human lives at the moment, It seems the journalists of ´óÏó´«Ã½ are very good at telling taxpayers how much the Banking Crisis has cost the UK, but when it comes to Wars the silence is deafening !

  • Comment number 14.

    13. At 1:02pm on 13 Jul 2009, AverageCit wrote:
    Steph

    This Might be off thread a bit, but is there any chance of the ´óÏó´«Ã½ journalists telling the UK taxpayers how much the War in Afghanistan is costing the taxpayer, sadly we can all see how much it is costing in human lives at the moment.

    No, we know half the story. We know how many have been killed, but wounded? That must be in the hundreds.

  • Comment number 15.

    At Icewombat (nr 8)

    Very impressive list - you nailed it for everyone there and then: lib dems and conservatives should plan for elections this autumn.

    I do not know what the conference dates are for sept/oct, but I guess that labour will be gearing up for an election 4 or 5 weeks post their conference if they deem their conference a success and get some better poll ratings as a result of it.

  • Comment number 16.

    Posts 8 - your assumptions appear more than plausible - here's a little bit more information supporting point 9 on your list too ...

    ...

    which refers to the use of 'penalties' to boost council tax (so they can then reduce central government's contribution to councils) that Ed Miliband is likely to propose in the Autumn ... and which is also a crafty way of deflecting blame onto councils and climate change ... and away from the central Government ... except it's been spotted ...

    ... they are clearly not only 'experts' in 'spin', but are experts in 'scams' too ... it's just a shame they're not 'experts' at 'governing', or 'managing an economy' ...

    David Clift, a Future 500 Leader

  • Comment number 17.

    John_from_Hendon (#12) What do you teach, and to what age group/ability range?

  • Comment number 18.

    #17. JadedJean wrote:

    If I answered any part of your question it would be moderated!!!!

  • Comment number 19.

    John_from_hendon (#18) "If I answered any part of your question it would be moderated!!!!"

    Why don't you put that assertion empirically to the test?

    ("That is JJ's field of pretense of analysing the un-analysable and unfathomable...)"

    Or are you perhaps fonder of rhetoric, projection and appeals to authority/dogma (the ad hominem)than you realise? See my earlier (genuinely well meant), helpful analysis. If one is to fruitfully discuss any issue, one has to get down to critically analysing basic assumptions.

  • Comment number 20.

    Post 6, has an interesting point.I always thought GB would hang on to the June 2010 hoping for a miracle.However on reflection it's becoming increasingly obvious that the "Gamble" of keeping public expenditure running at pre recession rates is not maintainable through to June 2010,so calling an election in autumn could be his best bet.Calling an election after the markets has withdrawn the governments credit line is not really an option.

  • Comment number 21.

    Econoce/Icewombat

    Odds for election in November 2009 are 14-1 by one leading bookmaker.Might be worth a bet??

  • Comment number 22.

    #19. JadedJean

    I recall a discussion many years ago with an academic at a minor institution that went, in summary, it is all about policy and personalities are not relevant (when discussing the factors influencing voter choice). They became dogmatic and insistent much in the way that you do. However their analysis was also wrong.

    I do not pretend, as you do, to 'know' everything about all of the factors that influence voters or indeed the almost completely unscientific pretend science of economics.

    However When I pose a question as I did in direct and unambiguous terms in the previous blog. And you say that you are answering the question as posed. I know that in logic I am right to judge your response on the basis of whether or not it addresses the question I asked! And you did not do so. Thus in logic your response must, and can only be, wrong.

    "If one is to fruitfully discuss any issue, one has to get down to critically analysing basic assumptions."

    Yes, but.. if your model of analysis is not congruent with the real World, that is to say what the man in the street experiences, and what motivates his/her actions then the modelling approach that you are taking is not useful. This is my considered view of the techniques you have a tendency to use.

    In my experience economics is best understood by following the money, not by examining the social motivations and causes underlying the action of the actors. I do not in general think that many of the 'ologies' or indeed psudo-ologies have much scientific or logical contribution to make to the (similarly unscientific) study of economics. In the end it boils down to the very simple if your income is 19/6 and your expenditure is one pound result happiness through economic well-being and vice versa. I discount the value of genetics and eugenics or whatever your current fad is in understanding economics.

    I reiterate that your model of mainly considering non-economic factors to understand economics is in my view of very limited value to understanding economics. Price is important, the changes in price are important and the accesses to a share of the available money are important. Power relationships are important. Economic and legally enforced monopolies and cartels are important. But the genetics and second level features which govern these are of less importance. Mainly it is about MONEY, its supply and relative stabilities and distribution.

  • Comment number 23.

    The business of government has been business and the results are clearly seen. The price of the business of government being business is that governments accumulates a great deal of power and also owns the printing press. In governmental thinking, not subject to conscience and dependent on political patronage, the maintainence of government is the highest priority. In that thinking, a reduction in government would further unemployment and therefore hurt the economy. Services are the cloth they hid behind. They always run up a list of services that would cause some distress in the citizens and do not look at lower executive salaries, tranfering some operations to the private sector, eliminating redunant activities and sorting out who is responsible for what. Eliminating some of the graft and corruption would also help right the ship but that would mean going after some rather large firms with political support. These are political discussions about elections and not really about economics as we are discussing money that does not exist. As they said in Horoshima: Don't worry, it's only one plane.

  • Comment number 24.

    14# vimeiro

    Yes I stand Corrected, unfortunataly in the horror war and the way this one is being reported the wounded have also been overlooked and their Lives have been ruined also.

    This War in Afghanistan is a going to go on for a very long time, it could go on as long as the troubles in Ireland, the people need to be fully informed of all the costs both in human lives and costs to UK Taxpayers, to make a informed choice as to whether we should continue with it or not.

  • Comment number 25.

    It's counter intuitive, but the last thing we need is a government that believes cuts are the answer to this worldeide financial crisis.
    What individuals decide to do when faced with uncertainty is to hold off all but dire necessity purchases. What Governments must do in times of such uncertainty is quite different. Because the role of government is to manage the overall economy even when the crises may be imported from somewhere else as this one has been.
    We need Governments that keep their heads, ensures overall spending keeps going and avoids banks going bust, no matter that that policy involves lots of debt. Fortunately, that's what the Brown Government has done. Most other governments in N America, China and Europe have followed. As speed was always of the essence, the fact that HM Government was exceptionally quick off the mark last October, has probably saved us billions - we shall never be able to know exactly how much.
    What we do know NOW is that our UK investment in VAT cuts last November and extra benefits for unemployed and low income families have stimulated spending and kept production and employment higher than in countries like Germany that rejected those policies. Germany and others now paying the price for their delay inadopting sensible policies.
    We also know that our investments in UK Banks are likley to bring them bak into tax-paying much earlier than in other countries such as the USA. And that we have many £ billions worth of shares to show for that investment. Over the next several years, those shares can be sold off in batches to fund public investment, or to keep our taxes as low as they are already. Or bits of both.
    At the present time, nobody can be sure exactly when the banks will start paying taxes again, nor when their share prices will have risen to put us taxpayers into profit. Because of those uncertainties, anyone can make predictions about the current deficit which are just debating pints, because no one knows.
    The real issue is: how can we be sure that the nay-sayers really understand the uncertain and unpredictable nature of the financial crises? If they show such lack of understanding, are they suitable to manage the UK economy?

  • Comment number 26.

    It was very decent of Ally to provide the Scotsman with another reason for Scots to support independence.

  • Comment number 27.

    #25. leftilkley wrote:

    "...the last thing we need is a government that believes cuts are the answer to this worldwide financial crisis"

    But unfortunately the same impetus to balance the books that took hold in the 1930's (and earlier) has taken hold and it is probable that it would have taken hold in any circumstances.

    You also greet with unalloyed joy the fact that the Banks have not gone bust. I sympathise with the view, but there is a huge cost to be paid by us all in inflexibility and economic ossification and this will undoubtedly hold back the economy and this needs to be recognised.

    Your opinions are close to the belief that the only way to get the economy going is to borrow more, without any sense of the need for a limit or constraint. This policy will, and indeed must, require, by virtue of arithmetic, moderation at some point, or perhaps you believe otherwise. If so, I would like to hear a rational and reasoned set of steps to get from where we are today to any future recovery. (It would be best in your response if you could define what you mean by recovery, and for whom.)

  • Comment number 28.

    #11. MrTweedy wrote:

    ""two huge, nation changing, agendas""

    As a further thought it is quite possible that the two conservative parties (Tory and Labour) have the same agenda and (as usual) the 'Nation Charging agendas' will be the same! It is quite possible the media are conniving to present the choice between the two parties as being a real choice when it is nothing of the sort as they are both the same!

    (Indeed if the third part had the balance of power there is also no guarantee that it would make any actual difference!)

    It is after all, all about the numbers and arithmetic.(and greed!)

  • Comment number 29.

    John_from_Hendon (#22) First you presume to know what 'the man in the street' thinks, and secondly you then take that fantasy (presumably of rational man) as your model of 'the real world' (which we now know is irrational, see Kahneman's Nobel or see earlier links for work in more the more austere field of Behavioural Economics).

    You then say:

    "I do not in general think that many of the 'ologies' or indeed psudo-ologies have much scientific or logical contribution to make to the (similarly unscientific) study of economics."

    which is clearly just a statement of what you don't know, i.e that you dismiss what you don't know/understand, which is true of everyone by definition (this is rarely obvious to many people when they say it alas). Yet you don't appreciate the irony, nor will you be corrected, no more than LibertarianKurt (or heaven forbid, as you don't deserve the comparison but are heading there), foredeckdave.

    I'll give you another chance: do you see what you have in common with the above, and why, and do you see why this is an important point about 'the man (and ever more so), woman in the street' and their thinking? You have nothing to offer when challenged on your demand that Mervyn King nd the MPC raises interest rates other than appeal to your own authority. What extra, privileged, knowledge do you have to justify that? Prima facie it's more of LibertarianKurt's Austrian School transcendentalism, which is why I pressed 'Two Dogmas of Empiricism' for so long. A lot of emprically well versed researchers across the world are very worried about people who think in such ways with nothing more than their presumptions that they are privy to how 'the man in the street' thinks, especially as we know that how they think is normally distributed and changing as a function of immigration and dysgenic fertility ;-). You see, the links I've given in past posts are to measures of how 'the man of the street thinks', and that's why what I have to say is relevant to economics. People across the world are not all the same, not even within a nation.

    "I discount the value of genetics and eugenics or whatever your current fad is in understanding economics."

    So you said, but that's why I've been trying to enlighten/educate you (along with others). People like Keynes didn't 'discount the value of genetics and eugenics or whatever' - he was a senior member of the Eugenics Society in fact. Nor do (look up Vanhanen, and see what Murray was responsible for in the 80s under Reagan).

    You should be taking on board that what's reported as it was being predicted on the basis of data trends at least as far back as 2001, and by Herrnstein and Murray back in 1994.

  • Comment number 30.

    RE: 25. leftilkley

    "We need Governments that keep their heads, ensures overall spending keeps going and avoids banks going bust, no matter that that policy involves lots of debt."

    Is there any limit to that? Is there any level of debt that is so high that you would abandon that suggestion on the grounds that the level of debt had risen too far? If so, where is the upper limit? If not, try sketching out what it would take to repay a peak debt of, say, twice the UK's GDP.

    What happens if the UK government gets to the point where no one is prepared to lend them any more money? What then?

    "What we do know NOW is that our UK investment in VAT cuts last November and extra benefits for unemployed and low income families have stimulated spending and kept production and employment higher than in countries like Germany ..."

    Sir Alan Sugar (who recently joined Brown's government) publicly dismissed the VAT cut as irrelevant. Of course, he might be wrong, in which case in January, when VAT returns to its normal level, life for retailers will be pretty bleak. I take it you know that in the first quarter of this year the economy contracted significantly more than predicted? In fact over the last year or so almost all the actual economic results have turned out worse than the preceding forecasts made by Brown's government. One way to read that is that their actions are making things worse.

    "We also know that our investments in UK Banks are likley to bring them bak into tax-paying much earlier than in other countries such as the USA"

    I take it you don't mean Northern Rock. Last I heard, the remnants were being offered to any available buyer on terms that would cost the UK taxpayer around six billion pounds. I'm not aware of any credible outlook for getting RBS off the life support machine.

    "Over the next several years, those shares can be sold off in batches to fund public investment, or to keep our taxes as low as they are already. Or bits of both."

    So again, you're not thinking of Northern Rock. You could also read post 8 earlier in this sequence where I count five separate tax rises that are already in the pipeline. If RBS turns out to be another Northern Rock style money-pit, presumably the government can just borrow the cash to pay for it.

  • Comment number 31.

    #14 vimeiro. As you may expect the numbers are compiled in such a way as to be hard to understand, open to manipulation and open to interpretation. However around 2,500 is the probable ball park number of British servicemen wounded in Afghan operations. This excludes any stress related psychological conditions that develop post combat experience.

    #25 leftilkley. The problem is the government does believe that cuts in public spending are needed - they are just delaying telling you the magnitude of the cuts that will be imposed.

    Most of Europe has not acted to rescue its banks ala the UK. Take a look at Iceland (it tried and failed), Latvia, Estonia, Lithuania, Belorus, the Ukraine, Romania, and Hungary are other examples.

    We do not know that UK banks are likely to be back in tax paying mode earlier than those elsewhere. Given the yet to be revealed problems in commercial property, and the existence of almost $600 trillion of outstanding credit derivatives we do not even know if the banks have been effectivly rescued, or if we have merely postponed a systemic collapse.

    Even if your post contained any facts at all it would still be necessary to explain why it so crucial to rescue the UK banking system when, in 2001, it was so crucial that we supported the IMF in destroying the Argentine banking system.





  • Comment number 32.

    #29

    Still on your egotistical rant. Silly LITTLE person :) Wrong as usual

  • Comment number 33.

    I have to ask myself what will be the point of the Government firing blanks in the run up to the next General Election, for its quite meaningless in Cabinet Ministers simply talking in ever increasing circles about the need of a needs to inform and tell the General Public further still about just what will be the final outline in Public Expenditure after this pending Election when even today no-one knows for sure about how our Economy will react in ALL the now Short, Medium or for the Longer Term.

    In the Head - Cases of both Mandy -V- Browns Darling, it going to be who's Crystal - Ball are we going to use, Yours or Mine, OR do we go for a bottle each, and look for a Genie.

  • Comment number 34.

    Lets hope that you and others can encourage a grown-up debate. I read Darling's article in The Telegraph. He promises to set out his spending plans for the electorate so that we can see the lie of the land. Mervyn has told him to do the same for the gilt markets by the PBR. Debt drag on growth will kill our recovery unless it is firmly dealt with.To have net debt as high as 80% of GDP by 2013/14 is not on the cards.

  • Comment number 35.

    Post 28 - I agree, and your point brings out another key point - 'Democracy - what Democracy' ?

    As well as telling us their priorities/plans for Government (which includes balancing the books), the next election should also be based on their clear manifestos for giving people proper democracy, a 21st century democracy, instead of the sham of a democracy* we currently have ... (and which your post also points out).

    Let's not forget that during the expenses fiasco they all promised us this ... so let's see it, judge them on it, and ensure they commit to following through with it ...


    David Clift, a Future 500 Leader

    * We only get a say/vote once every five years in a general election, and even then only a small minority of votes actually make a difference as to which of the two main parties gets in Government ... the only votes that effectively 'count' are fringe votes in marginal constituencies (2-3% of the total) - and that's why the two main parties keep changing the voting boundaries too! 21st Century democracy? ... and yet we often hear politicians quote our 'democracy' as an example for others to follow!

  • Comment number 36.

    Re:28.
    The trouble with ALL Politicians is that they believe after a spell in Parliament that it entitles them to call themselves "Career Politicians".

    Now, thats not a bad attempt of Self - Labelling for some 650 Jump -Ups to believe, for to become a Politician in the First-Place ALL you have to do is promise everybody the World, then leave your brains behind when you go about your Parliamentry duty, and better still allow themselves into being Whipped into keeping quite and towing the Party Line so that no mud can stick to them personally, thus allowing them to appear on Question Time and blame everyone else for their own problems, except the Politicans themselves.

    This really is not a bad way of being feather-bedded into in a Guaranteed Job of Employment along with all the trappings of lavish Expenses, in a Job that anyone can do for at lease 4 Years and more, without any needs of passing any forms of Public or Private examinations for their Post of Employment as M.P.'s in the First-Place, other than getting themselves elected UNDER SOME Political Parties banner.

    So ask yourself, have you ever met any hard up Politicians in need any real needs for YOUR Advice, and just what have they done for you that has been so special in the last 5 Years to warrant your Vote the next time around, for if anyone wants to break the mould in the current climate in this Political merry-go-around of changing backwards and forward between both the Labour and Conservative Parties in forming Governments, that has been going on now for much longer then anyone can now remember, then it IS firmly in ALL the hands of the Public to cast their Votes elsewhere at the next General Election, if you really want that is any new era in British Politics, for you WILL NOT get any improvements while remaining with the set up of the Status-Quo.

  • Comment number 37.

    I don't think it matters all that much if the election is Nov/May and the Tories/Labour win...the policy is in the mathematics now.

    Tories are going to cut but so are Labour, and like much else about the two parties the differences are less than skin deep.

    The cuts will come because they have to.... behind that (and not far behind) is the pension crisis about to become post-looming and arrive --those are the things determining what life will be like for people; not which version of the single ruling party gets to put it's appartachiks onto Newsnight...

  • Comment number 38.

    If there is any way of avoiding telling the British people the truth about anything, the Rev Gordon will find it. Sadly his upbringing in the bosom of the kirk seems to have made truth something that repels him. His chancellor however seems to have retained a modicum of of integrity in spite of his manse upbringing and his law training , and appears to suffer a wee bit of embarrassment when he endorses the lies of Brown and the dark one. Whether Brown's freedom with the taxpayer's resources has helped Britain during the recession is anybody's guess , but what it has done is put the country's finances in the worst state in history (ignoring the dark ages ). Brown's great plan will mean that the country will be struggling probably for at least the next fifty years attempting not to pay off the debt, but merely to service it.

  • Comment number 39.

    Gordon Brown knows only too well (as does his chancellor) that there is little alternative. Considering the massive debt this government has saddled the country with for the next generation he has only 2 options:
    Increase taxes.
    Cut expenditure.
    I have no doubt that the spin doctors in Number 10 will throw out the usual platitudes; spending on health and education; spending on the police and armed forces.
    No mention of increased taxes in all this to pay for the cost.
    The point of the exercise is to win the next election, not be honest with the voter.
    Then, after the election, a rise in VAT; a rise in Income Tax; a rise....a rise....etc.
    After all someone has to pay for it.
    The taxpayer once again.

  • Comment number 40.

    #29. JadedJean wrote:

    Sorry, but you piece is more balderdash and deliberate misunderstanding and missinterpretation...

    Your view of 'enlightenment' is to reiterate most of the academic 'rubbish' taught by some of the worst schools of sociology in the name of academic work in the last decades, and is irrelevant to economics which is about the economy. It meant nothing at the time and means nothing now. It contributes nothing to the sum of human economic knowledge and was always essentially a way of keeping academics off the street and the dole queues! And of course letting people feel that as long as the had an 'ology' they were just tickety boo! But alas they forgot to tell people who studied it that it was just a game, and also nothing to do with economics. Which is, like it or not, what this blog is about!

    I remind you that your long diversion was in response to my quite sensible economic question about the necessity, or not, of asset price inflation to create a recovery in the UK. (And, by the way, nothing you have written since has address this question so I repeat the Oxford poetry professor's rubber stamp response - 'WRONG'.)

  • Comment number 41.

    #34

    Shireblogger

    Sorry, must be missing something. Net 80% of gdp debt is fairly ok. Are you talking only public debt? Without private debt it's not a useful measure. A net public 80% debt with private of 0% would be a social-democratic heaven

  • Comment number 42.

    There's another thing I am missing. What level of control does the UK govt have over the private banks? I mean, "private" in quotes. Presumably some banks have the UK public as majority shareholder? Presumably some UK banks are under, or about to be under, tighter regulatory controls?

    The reason I ask is that could be the ace in the current party's hand. At some stage policies may be introduced by imposing regulations directly through private banks. For example, a brute force way of reducing the private debt would be to force the banks to reduce transaction costs and interest rates, whilst maintaining the current monthly repayment amounts. And so on and so on.... Is this likely, possible, ..?

  • Comment number 43.

    #24 "This War in Afghanistan is a going to go on for a very long time, it could go on as long as the troubles in Ireland, the people need to be fully informed of all the costs both in human lives and costs to UK Taxpayers, to make a informed choice as to whether we should continue with it or not."

    Believe it or not, the "War in Afghanistan" started in 1839 (First Anglo-Afghan War) through the Second and Third Anglo-Afghan Wars and changed hands in the 1980s to the Russians and then back again to the Anglo-Americans in the late 1990s and is still going on !! They are all about one thing and one thing only - who dominates Afghanistan - completely forgetting that Afghanistan is not so much a country as a collection of tribes with different and shifting loyalties !!

    The British lost one (the First), won one (the Second) and drew one (the Third) !! The Russians (Soviets) thinking that they will do what the Tzar failed to do, invaded, spent years and lots of lives, and lost their war !! Now, the Americans are learning that all the modern weapons are not going to help win a war in those mountainous terrain and that they can bomb the hell out of a place but they cannot "own" it unless they have a man with a rifle on the ground there !!

    The financial cost of these wars cannot be quantified because these are really political and psychological wars !!

  • Comment number 44.

    #25 Leftilkley
    I ask this question with utmost respect.......are you for real?
    I don't wish to upset you in any way and if these are your own thoughts and opinions then again I respect them, however I find them quiet questionable.
    Do you really believe that the Government were quick off the block in saving the banks? My take on this is that they were presented with a fait acompli (excuse spelling, French never was a strong subject for moi)and the Government had no option but to bail out the banks or face financial meltdown. The only reason that we did it first is because our system would have been the first to implode. If the Government handled the situation so well, then how did we end up with the Lloyds/HBOS fiasco and the RBS Fred Goodwin disaster.
    I am in agreement that as much relevant spending needs to be made as possible, but that does not excuse the profligate methods currently being exercised. This Government cannot even purchase efficiently (can anyone tell me of a major project that has been delivered on time and on budget?)
    There is sufficient waste to reduce dramatically the current level of spending without affecting the jobs of nurses, teachers etc etc that GB goes on about time after time.

  • Comment number 45.

    Re: 43.

    Yes your right, for if things go Pear Shape, this current confict in Afghanistan will be remembered as Gordon Brown's Vietnam.

    Therefore, there is no point in trying to expect our gormless Prime Minister to know when HE, or perhap anyone else will be able to bring our Troops Home having completed the task that they have been sent out to do, for as I've been saying to people, you cannot simply turn any Warfare OFF like some kind of switch in a hope that everyone will just stop fighting, because [OUR P.M.] saids so, for we are in this fight for the long -haul, and for the foreseeable future with an unknown Price to pay in terms of how many of our brave lads, that won't be returning.

    For gone are the better times when ALL the Armed Services T.V. adverts that were only suggesting that everyone whom joins the Army will see the World, or receive a Full Time training course so that they then would go back into Civie-Street with a Full-Time career, for back then someone forgot to mention the Battle-Fields, and Armed Combat.

    Once again we are losing our younger Generation in a War that cannot be really won, whereas we have the largest monetry Debts in our History having to once again afford a War, without being able to afford the Peace, for when will we ever learn that Politicians are at best only capable of taking the position of back seat drivers in everything they do from the safety of their Arm-Chairs, with a long Summer Holiday break in prospect where the only HEAT they will have is somewhere on the Beach of slumber.

  • Comment number 46.

    #44 newthink

    You are quite right. The government reacted in total panic. Its hand was forced at every turn. By flooding the market with money (QE buying the debt) the government is attempting to soften the collapse of the inflated asset bubble they relied upon for their program. The real test will come when the bottom is reached. Will the international investing community (I hate that word) be prepared to buy the Gilts to finance the massive debt which has been incurred rescuing the banks from their disastrous mistakes?. That is when the jury can reach a final verdict. I am (typical for a deflationary period) not very optimistic.

  • Comment number 47.

    41 FrankSz - sorry been out for a pint!

    I was talking of net public debt. Sustainable investment rule for prudence at 40% - not as relaxed as you on this measure going to 80% - we're spending more than we receipt, we're spending on overdraft to lifeboat not invest, we're going to pay/are paying private investors more interest charges than it costs to fund major spending departments.I dont see Darling's growth projections ( including QE) bailing this one out over the medium period.....inflate it away I hear some saying. I dont.

  • Comment number 48.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 49.

    John from Hendon let the cat out of the bag in the first line of his first post.....the misunderstanding that what was sensible in the economics of a familly was also true for macroeconomics. A mistake Thatcher and her acolytes made and with it we bade farewell to large parts of the 'real' UK economy.
    That said, JadedJean wins no prizes for transparent English: perhaps she needs to read and act on Orwells advice.
    Right kittens, claws in and time for breakfast

  • Comment number 50.

    Addendum (#48) One of the reasons why many in the education profession (and helping professions in general) find this anathema is because it forces them to re-evaluate what they've been doing, namely, it forces them to see that they're only selecting behaviours in those they work with, not inculcating them de novo. This forces many to see that they can not raise attainment, but only equip those genetically prepared to develop along pre-determined paths. This nearly all depends on intakes (hence the KS2 attainment accounts for some much in the government Contextual Added Value HMG regression model predicting KS3 and KS4 attainment against which school are judged - past behaviour is the best predictor of future behaviour because behaviour is largely genetic). That is, 'teachers' become selectors and resourcers of largely innate, maturing behaviours which find expression or niches. For most going into these professions (and the same goes for all other helping professions), it can come as a depressing shock (to their narcissism) to realise that they were once operating as misguided cognitive alchemists/bullies. They tend to come to realise this only later in their professional careers as the evidence of their failed omnipotence is driven home, especially these days with our rapidly changing demographics in the inner cities. Narcissists suffer most in mid-life. It is a breaking experience for many.

    To see where an economy is going, study where the nation's are headed.

  • Comment number 51.

    The conflict between No10 and No11 is really at the heart of the issue at the moment, and is a clear indication of the weakness of GB to lead the country out of the mess it is in at present. On one hand there is the PM who is having to make concessions and promises to everyone to buy their support, and on the other is the Chancellor who is now able due to the weakness of the PM to be very slightly more open about the problems looming in the future.
    The Chancellor knows that spending cuts are needed and is beginning to make noises accordingly, whereas the PM cannot contemplate cuts as the Unions and backbenchers won't allow it (Royal Mail fiasco).
    GB is acting like a single father that just wants to buy the affection of his children by spending on his credit card regardless of what problems it will bring in future.

  • Comment number 52.

    Re 25. leftilkley wrote:
    This analysis might have some credibility if it also addressed the following:
    (i) The impact that such massive borrowing will have on our future prospects for recovery. We are already paying circa £43 Billion servicing the national debt and this will increase substantially as global interest rates rise which they most surely will - they cannot stay at near zero forever. This will be a massive drag on our economy for many years to come.
    (ii) Why have we had to borrow so much money? Totally absent from your analysis is the fact that Gordon Brown went on a massive borrowing binge during the good times instead of building up reserves. Using money saved during the good times to stimulate an economy in the bad times is not the same as using borrowed money to do this as you imply. Other countries with significant debt have enbarked on much more modest stimulus than our government. Other countries have not followed Gordon Brown, in fact many have publically rebuked him. The countries that are providing more substantial stimulus such as China are using reserves they built up in the good times. Comparing these countries to ourselves is fundamentally flawed. Furthermore not all countries have had to bail out their banks. In the UK the reason why we had to do this is that Gordon Brown tore up the effective regulatory system that existed in 1997 and replaced it with his own system that totally failed. The UK was not the only country to make mistakes in this regard but this does not excuse Gordon Brown from his failure in his duty to regulate the banks.
    (iii) We are not investing, we are wasting. If money was going into infrastructure / capital projects we might build up skills that could transfer to the private sector as the recession ended, people concerned would start generating wealth which could start to reduce our national debt. Instead we are cutting capital projects and government money is going into supporting an army of pointless bureacrats that will never be able to transfer to the private sector and will be a permanent burden on the state. The only way we will be able ot keep this model going will be to continue borrowing. These people will nevet become self sustaining. Our government is not investing, it is wasting and we will not be able to continue boroowing at current levels indefinitely. Sooner or later we will have to reduce this waste, all that currency government policy is doing is putting off the fateful day.
    (iv) How are we ever going to repay this debt. Most of the budget defecit is structural (ie will not dissapear when the recession ends). Even the governments own institute of fiscal studies admits this. We were already running up a substantial defecit even during periods of above trend growth and no-one expects the UK to return to anything above modest growth anytime soon. So unless we are going to borrow indefinitely public spending will need to be reduced at some point and before we see above trend growth. The defecit is not going to dissappear on its own as our government pretends.

    All will be achieved by throwing borrowed money to prop up an inefficient / loss making economy is to push the problem into the future. It will not mitigate the problems as you claim.

  • Comment number 53.

    When we censor what we find offensive, and what we find offensive is true, that's when censorship is it's most destructive as it fuels denial and deceit.

    We are unwilling to learn from the recent economic crisis as in practice, those most responsible (directly and indirectly), complain vociferously about, censor, or rationalise by diffused responsibility (e.g. globalisation), what most decisively challenges their core behaviours and holds them responsible/accountable.

    Until we see this behaviour change, politicians, journalists and bloggers can post what they like, it'll all just amount to idle gossip.

    Read ETS (2007), Leitch (2006) and OECD reports (e.g. PISA, 2000, 2003, 2006) on differential skills, much of the rest is magical thinking based on Lysenkoism which sadly is tacitly central to most of economics in the Liberal-Democracies.

    See our ageing populations for the consequences of our having pawned and asset-stripped the state they built decades ago.

  • Comment number 54.

    John from Hendon

    We recently had the illusion of wealth through debt, and as JadedJean points out, we are still developing the illusion of freedom through mass market exploitation. Unfortunately, mass market exploitation encourages reckless and feckless behaviour, which in turn acts as a drag on the general economy and the welfare state.

    The whole thing is a balancing act, between the positive and negative affects of liberal behaviour. The more liberal we are, the bigger the potential mass market, and the bigger the potential profits for those at the top of the pyramid.

    The recent asset bubbles eventually became unstable due to excessive gearing/ leverage. Similarly, if the British population becomes too free (excessive freedom), the liberal bubble will burst, and we'll end up with a bankrupt welfare state and an ungovernable workforce.

    In this context, "excessive freedom" is a lack of restraint amongst the wider population. Examples include: health problems, such as diabetes, caused by lack of moderation in diet; drug and alcohol addiction; marital breakdown; financial debt; distrust of authority; loss of social capital and increased individualism; mental health issues due to psychological manipulation from the marketing of lifestyle products and the motivational science of business and the effects of a fast edited media frenzy; trafficking of prostitutes for the sex industry; lack of purpose and lack of shared values; lack of good education, despite half the population possessing a degree; etc etc etc......

    Unfortunately, all the above have a financial effect on the economy.

    The three main political parties in Britain all have a liberal mass market agenda, because they know it is much harder to contain the negative affects of liberal behaviour than it is to benefit from the positive affects. They all live in hope of constant economic expansion keeping the balance positive. However, there is a significant risk that the balance will move to the negative as the unstainable elements outweigh the positives. If and when this happens, the liberal bubble will burst and Britain will end up morally and financially bankrupt. We will then have to beg the adult countries of the world to bail us out.

  • Comment number 55.

    Eloquently put Mr Tweedy (Post 54)

    I also believe that many of the results of 'excessive freedom' quoted are generated from the application of outdated 'economics'* too ...

    which systematically generates 'divides' (e.g. individualism), 'waste' (between 40-80% of our taxes are wasted) and 'stress' (e.g. just trying to keep a basic roof over the head**), as well as driving more 'self interest' and 'greed' too (ie. it 'amplifies' them).

    Such outcomes make the overall 'economy' worse, and gives lots of otherwise hard-working people 'little hope' (e.g. future generations) - i.e. the 'values system' is broke, and 21st century 'economics' will have to rebuild it ...


    David Clift, a Future 500 Leader

    * Poweromics = People using position and power for their own personal gain, based on poor moral values, self interest and greed. Take a look at for more examples/information.

    ** If the Government had ensured a steady supply of housing (an actual asset) over the last decade, the focus on property prices (asset inflation) going up would have been much less (and the banks would not have been able to profit so greatly from this failure). When the Government introduced inheritance tax they also made 'land' one of the few things exempt from it too! ... how about taxing 'land ownership', as people cannot avoid it by moving their 'land' abroad, and it would make the mega-rich landowners (e.g. the Duke of Westiminster) more likely to release some of it, instead of snapping up more of it and holding on it (nb footballers on £100,000 a week are starting to cashing in on this loophole too) ... so our children don't have to pay 'an arm and a leg' just to get a 'roof over their head', and get more 'freedom' to be 'innovative & creative' ...

  • Comment number 56.

    fromtheedgeofthefen (#49) "That said, JadedJean wins no prizes for transparent English: perhaps she needs to read and act on Orwells advice."

    Transparent English risks much hissing, a good part of the blog disappearing, and closure to comments.

    As can be seen from this and this Peston blog, people don't change, and when their core assumptions are challenged, they fight tooth and nail to maintain their status quo or... just ignore/dismiss what's perceived as criticism altogether when there are no credible sanactions...

  • Comment number 57.

    #25 "Most other governments in N America, China and Europe have followed."

    China has *NOT* followed Crash Gordon's disastrous policies !! It has spent money that it has in reserve and has *NOT* incurred any debts over its spending !!

  • Comment number 58.

    Labour is nearly there...

    Mandy let the cat out yesterday when he stated that we were in for 10 lean years and that major effecancy savings would be required but even so there would be no changes to front line services.

    One mans "effecancy saving" is another mans "cut".

    Nice to know that Labour after 12 years and 10 years of carrying out "effecancy savings" can still find more MAJOR effecancy savings!

  • Comment number 59.

    #58
    Mandy is now stating there will be spending constrints......not cuts!!!
    That schools, hospitals, police will be ringfenced and no spending reductions there, but elsewhere there will be spending constraints.
    So there we have it, no cuts, just constraints. Priceless spin.
    Do New Labour actually think we are that thick?

    I can't wait to see by how much their vote share is cut (or should I say restained) in the election.

  • Comment number 60.

    When is a cut not a cut? - when it is a constraint.

  • Comment number 61.

    Number 58 - If Mandy did say we are in for 10 Lean years, he's actually not entirely wrong (I personally believe we're entering a new era, a Lean era, with a newly emerging 21st century 'economics' too) - the problem is that he (and most others) don't actually know what 'lean' actually means (eg it doesn't 'lean' and 'mean' - in fact it's quite the reverse - and more to do with being 'fit for purpose'!) ... and this is a subject I personally know a fair amount about (having, prompted by the CBI, recently written a whole book about it)...

    Lean is a 'management system' which utilises a 'continuous improvement philosophy' throughout the enterprise to systematically help front-line staff to improve the way that value is provided to others (and they normally improve this by between 40-80% initially, and then continue to improve this too, without relying on the use of expensive 'consultants') .... the improvements made then increase the demand/type of services requested which drives the need for MORE 'front-line' staff ... and much LESS 'management' - and more specifically, a fundamentally different style/type of management e.g. it removes arbitrary league tables, targets, bonuses, management reports/meetings etc, and focuses on supporting staff to solve problems (instead of hiding, avoiding or processing problems)*.

    As you can probably imagine this is the complete opposite to what we currently see in Government and most of the Civil Service - Sir Gus O'Donnell (cabinet secretary, and head of the civil service) knows this all too well - but has unfortunately done very little about it - perhaps he's going to start to do something about it now (and actually earn his large salary), but more traditional 'civil servants' (and in particular 'senior managers') are unlikely to find this easy, as they will have to learn to do the opposite to what they have always done (e.g. listen instead of tell, support rather than drive, understand rather than assume etc etc) ... and take responsibility.

    Interesting times - it's just a shame it's taken so long (and a huge crisis/burden of debt) for them to face up to it ... or do anything about it ...


    David Clift, a Future 500 Leader and author of "Lean World"

    * Take a look at for instance.

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