emergency uk budget

[Jason]

Drifterwood, Dandelion et al - we're getting pretty profound here!

The analysis of the problem that works for me is around the concept of entitlement and the "entitlement generation". Very many people advance the belief that they have a "right" to benefits, pension, wealth, the riches of our society. Yet it seems to me that the usual expectation should be that we all aim through a lifetime to put in as much or more than we get out. Of course there will be some in society who need extra support, and some who can contribute more, but most of us should jolly well be pulling our weight.

The howls of outrage right now on raising the state pension age are typical of the problem. People feel entitled to retire earlier on a bigger pension. Of course right now you can retire at any age you wish if you have your own pension. The surprise for most people is just how much you need invested in a pension to get a decent pension income. You can also do the figures in reverse. Most who receive only the state pension (having made no private provision) also receive pensioner's credit and other benefits. Calculating the notional money pension pot that this represents produces something like £180,000, roughly the average cost of a house in the UK. There is no way that NI contributions through a working life could have built to this sort of pension pot.

Yes we want the social dimension of a caring society, but hand in hand with a doctrine of personal self reliance. If you can pull your own weight you should. The rich should be contributing greatly to society - but not through high taxes. We need a spirit of benefation such as existed in the UK a century ago and which flourishes in the USA still.

 

[midlifebear]

One of the proposals to help raise revenue for the State of Utah, famous as an enclave for big mormon families of 8 or more children, was to put a "sin" tax of disposable diapers. This would have not only raised a train load of new taxes, but it would have also given some relief to the local land fills. Of course, every time it is proposed it is quickly tabled and the tax on hotel rooms, liquor, and cigarettes goes up $20 or $30.

 

[dandelion]

The analysis of the problem that works for me is around the concept of entitlement and the "entitlement generation". Very many people advance the belief that they have a "right" to benefits, pension, wealth, the riches of our society.

Didnt a lot of this come about after WW2 (following hot on the heels of WW1), when people were tired of getting killed on behalf of their country, and decided it was right to expect something back. As far as I am concerned, the government is my servant, not my master, and servant of everyone else in the country. Its job is to make my life better. No other reason to allow it to exist. The country is much richer now than it was then, yet it launched itself into a program of improving the lot of the common citizen. You may argue it succeeded, but that is no excuse to stop. Strange how it came about that nowadays two working adults per family group is the norm, and most of that extra money goes on housing. Its a huge scam syphoning off money into the hands of...er...banks. We live in a throwaway society, where goods are designed to last the 1 year guarantee period and then go into landfill. This is unsustainable, and is a fraud against everyone. There is no shortage of wealth to pay for retirement, it just that we continue to throw it away.

Yet it seems to me that the usual expectation should be that we all aim through a lifetime to put in as much or more than we get out. Of course there will be some in society who need extra support, and some who can contribute more, but most of us should jolly well be pulling our weight.

Well without a certain amount of work obviously the country would grind to a halt. Yet we have all heard of people forced to retire who do not know what to do with themselves. Why this talk of 'pulling our weight'? let those that want to work do so for the pleasure of it. The rest of us will do what we want to do. MPs are an example of this pure nonsense. As a group they claim they could not possibly do the job for less than the £60 K +benefits (another £40K?), but I bet half of them would do it for nothing. The other half could not afford to do it for nothing, but would do it for half. If they seriously expect the country to go into an era of austerity, if they seriously believe it is necessary, perhaps they should lead by example.

The howls of outrage right now on raising the state pension age are typical of the problem. People feel entitled to retire earlier on a bigger pension.

They have certainly been led to expect a bigger pension. Been told that the state pension just isnt enough, and they need to work for a greater one. Yet ive met quite a few people happily living on the state pension (with or without pensioner credit deemed necessary by the state to add up to a sufficent pension). Clearly, if you want twice as much income its going to cost twice as much, but how come twice as much is deemed necessary? Why exactly will your retirement present washing machine not survive longer than you do?

Yes we want the social dimension of a caring society, but hand in hand with a doctrine of personal self reliance.

Then maybe we need a reorganised society which aims to make people more self-reliant, rather than reliant on replacing all their personal goods every 5 years or so, and thus wholly reliant on others. I dare say pensioners wouldnt mind at all working 1 day a week to pay for their extras. Many do something of the sort already. Yet what we have here is an all or nothing fiat to keep them full time employed for an as yet indeterminate number of extra years.

If you can pull your own weight you should

But what does that mean? Did you see the TV program where some MPs were sent to live on an unemployment riddled housing estate for a week? They were utterly clueless how to survive. The poor knew how to survive on that level of income, the MPs did not. Did the MP truly deserve to have 10x the income so he could just waste it?

The rich should be contributing greatly to society - but not through high taxes. We need a spirit of benefation such as existed in the UK a century ago and which flourishes in the USA still.

Ah yes, so the poor man at the gate of the rich man in his castle should still be tugging his forlock and bowing to the master, because the master's father and his fathers father have ruled that town for generations...Money breeds money. Rich men pay through their nose for a good education because they know it will keep the money in the family. Then have a word with an old school chum and get the lad a job in the city where he can rip off some pensioners. Nothing fair about that at all.

 

[Jason]

Didnt a lot of this come about after WW2 (following hot on the heels of WW1), when people were tired of getting killed on behalf of their country, and decided it was right to expect something back. As far as I am concerned, the government is my servant, not my master, and servant of everyone else in the country. Its job is to make my life better. No other reason to allow it to exist. .....
Ah yes, so the poor man at the gate of the rich man in his castle should still be tugging his forlock and bowing to the master, because the master's father and his fathers father have ruled that town for generations...Money breeds money. Rich men pay through their nose for a good education because they know it will keep the money in the family. Then have a word with an old school chum and get the lad a job in the city where he can rip off some pensioners. Nothing fair about that at all.

The Welfare State that was created after the 2WW was indeed part of a new ethic. The idea was - and is - that people contribute as they are able to pay for benefits as they need them. It is a sort of insurance policy for society. This is something different to what is termed the "entitlement generation". This is a belief in entitlement without contribution. In the UK we are seeing it with a generation of young, unmarried mums whose costs are covered neither by their partner nor their parents, yet who believe they are entitled to be funded in the lifestyle they have selected (yes I know there are exceptions who have not selected this lifestyle, but most have). Even more extreme we are seeing long-term couples who make no secret of their decision to say to the benefit office that the man lives with his parents so that the woman claims all benefits as if a single mum - and the family in adiition have the man's income as a sort of perk. There is a deep-seated belief that the state should pay for the chosen lifestyle of individuals.

The fundamental purpose of government is the safety and security of its people. Whether a government should have a remit to make our lives better is doubtful. Certainly more controlling governments have tried this, and usually achieved the opposite. A more libertarian approach would be that governments should provide the framework of law and order but with the decisions - including making life better - given to people both as groups or individuals. Correct government is pretty much the same as slim government.

The class argument is tired and largely unhelpful. Of course there is inherited wealth and inherited advantage in UK society and in all societies. But the opportunities available to individuals irrespective of wealth are greater than they have ever been. The problem is that parents and society often fail to encourage children and young adults to take advantage of them. We need a greater spirit of individual responsibility. The one trick the rich have that enables them to create wealth is that they accept that they are responsible. If the entrepreneur gums up, s/he doesn't make a profit and the responsibility is that of the entrepreneur.

The recent budget ticks a lot of boxes. It is a budget for slimmer government, it is looking at the problems of the "entitlement generation" and it is aimed at the financial security of the country. It is what a government should be doing.

 

[Drifterwood]

Drifterwood, Dandelion et al - we're getting pretty profound here!

Not really, Jase. It is simply about prosperity. Real prosperity not the New Labour mirage of prosperity.

Government's job, IMO, is to create and or maintain a system in which we can prosper.

Some idiots thought that having a loan to buy a new car meant that they were prospering. The balance was all wrong. The TorieDems should embark upon a massive housebuilding programme within existing urban boundaries. Yes, go up a few floors. This should reduce the price of housing and provide jobs. And yes, this should include affordable social housing.

 

[Jason]

I agree we need more homes. And therefore to get rid of the excessive restrictions on building within existing urban areas. Somehow I can't see it happening. The NIMBY squad would jump in - no new building on my patch thank you very much!

 

[dandelion]

The fundamental purpose of government is the safety and security of its people. Whether a government should have a remit to make our lives better is doubtful. Certainly more controlling governments have tried this, and usually achieved the opposite. A more libertarian approach would be that governments should provide the framework of law and order but with the decisions - including making life better - given to people both as groups or individuals. Correct government is pretty much the same as slim government.

Historically governments have always had a prime task of handing wealth to those who support that government. There is a universal concern for the continuation of the country, because if it falls so fall all the perks of those who ran it. The safety and security of individual people has frequently been quite a low priority. Privatising the redistribution of wealth is a non-starter, because it means individuals must voluntarily hand over money, and very few are willing to do this. Whether by accident or design, the conservative party is the party most supported by the wealthy and indeed the established aristocracy, and it is now embarking on a program of cutting the redistribution of wealth to the poor from that class which supports it. This is hardly a surprise. What is more surprising is that a consensus is possible with more left leaning parties, because current circumstances require some retrenchment in government activities.

The Welfare State that was created after the 2WW was indeed part of a new ethic. The idea was - and is - that people contribute as they are able to pay for benefits as they need them. It is a sort of insurance policy for society.

I dont think the welfare state has ever been a pure insurance provider in my lifetime. Insurance companies assess the risk of each client and charge accordingly. The welfare state at best takes contributions from everyone and redistributes them to those most needy. At worst (if you regard this as worst), it takes money from some with a lifetime of employment and payments into the system and gives it to others making no contributions. I do not regard this latter as bad. I would joke, though it isnt really a joke, that its far better to give an unemployable family money to live on than to leave them to their own devices, because then you can expect them to be burgling your house and mugging you at knifepoint. Our society only works by the consent of the poor to remain poor.

Thatcher understood this quite well, and instituted a swath of measures designed to cut apparent unemployment numbers even though no one lost benefits or became employed.

This is something different to what is termed the "entitlement generation". This is a belief in entitlement without contribution.

Well...I believe in it too. It was interesting listening to some recent debate over Grammar schools, where some experts were talking about their statistics demonstrating that Grammar schools dont work. My own perception is that they worked very well to get some people out of poverty, but I dont know what their evidence is. The fundamental principle though is that children of the poor will remain poor, and children of the rich will remain rich. It is historically proven to be that way, unless action is taken to change it. Part of that is simply taking money from the rich and giving it as an entitlement to the poor. Making it means tested is an acknowledged nightmare, because it introduces disinsentives to work.Citizens of a country are entitled to a fair share of its wealth. Fair takes into account that some are generating much more of that wealth so deserve to keep it, but it also means those that were simply born into that country are entitled to a share also. This is especially the case when circumstances conspire to prevent the poor getting jobs. Allowing in cheap labour pushes down pay rates so the poor can not earn enough to live. Unrealistically high wages for many mean that such low paying jobs become a bad joke against the poor, which 'the rich' would never ever contemplate taking.

Even more extreme we are seeing long-term couples who make no secret of their decision to say to the benefit office that the man lives with his parents so that the woman claims all benefits as if a single mum - and the family in adiition have the man's income as a sort of perk. There is a deep-seated belief that the state should pay for the chosen lifestyle of individuals.

indeed there is. Doesnt the conservative party have a scheme to introduce tax breaks for people if they get married? These people seem to believe the state should subsidise them to get married?

The class argument is tired and largely unhelpful. Of course there is inherited wealth and inherited advantage in UK society and in all societies. But the opportunities available to individuals irrespective of wealth are greater than they have ever been.

There is a much larger middle class. Yet you have only to look at who are members of parliament, whether they are rich and how many of their ancesters also were in parliament to realise the aristocracy is alive and well and keeping a firm grip on its assets. meanwhile the real poor remain poor. It is portraid that the middle is paying taxes to subsidise the poor. This isnt true, or shouldnt be. The middle can take care of itself. The rich need to be taxed to pay the poor.

The problem is that parents and society often fail to encourage children and young adults

The example they see is the example of being poor, living poor and staying poor. The way to break this cycle is to make them rich so they have a stake in society. You have to give them that stake.

The one trick the rich have that enables them to create wealth is that they accept that they are responsible.

Nonsense. the one trick the rich have is the realisation that they like being rich and want to stay that way. And that they have the means to do so. Money makes money.

If the entrepreneur gums up, s/he doesn't make a profit and the responsibility is that of the entrepreneur.

There are a few celebrated examples of entrepreneurs who have come form nowhere and become rich. But there are a lot more who have come from somewhere and become richer, and others who have simply stayed rich.

 

[dandelion]

I agree we need more homes. And therefore to get rid of the excessive restrictions on building within existing urban areas. Somehow I can't see it happening. The NIMBY squad would jump in - no new building on my patch thank you very much!

What we really need is to get rid of a big chunk of the population. Serious measures about non-EU immigration would be a start. Have we just had a new emergency quota pitched at just a little higher than expected demand? Incentives for people not to have children. More housing, obviously, which we have just started by banning building on gardens. (though the measure has some merits: people do not want to live in matchboxes. There are quite enough of them already. A policy of affordable housing is worthless if it can only produce affordability by reducing size but charges the same per square foot.)

 

[Jason]

It was interesting listening to some recent debate over Grammar schools, where some experts were talking about their statistics demonstrating that Grammar schools dont work. My own perception is that they worked very well to get some people out of poverty, but I dont know what their evidence is.

Grammar schools work - or worked; there aren't many of them now.

The selective system of course meant that for every Grammar there had to be a Secondary Modern. After Comprehensives were introduced some interesting statistics were possible. Take two areas which are as near as you can find them equal. Look at the academic performance of the Comprehensive measured in terms of exam passes. Then look at the academic performance of the Grammar, and no surprise it is higher. But look at the Secondary Modern, and it performs better than the Comprehensive. Despite recruiting the bottom two thirds (or thereabouts) by ability as measured at 11ish the Secondary Moderns still outperform the Comprehensives, recruiting across the ability spectrum.

The old system worked better for everyone than the Comprehensive system. And it certainly provided ladders out of poverty for many. The clever thing would have been to reform its many faults and make a fundamentally good system better. I know there are good Comprehensives, but nationwide the system seems to have delivered a weak, even sub-standard education.

I don't see how we can go back to Grammar Schools. The clock can't be turned back. Basically 97% of UK kids go to a Comprehensive, and 3% to a Public school - those going to Grammars hardly register as a percentage. We've got a state/public split of indifferent/excellent schools. Cameron went to Eton - the 19th prime minister this tiny school has produced. Clegg went to Westminster. Most of the cabinet, both Con and Lib Dem, went to public schools.

Maybe the way forward is to make public schools more accessible through scholarships. Though those scholarships require some form of selection, which is quite an obstacle ... But I think this is probably what we will see. In another 30 years or so we might have got back to a Grammar School system, though we will be calling it something else.

COOL FACT - Hogwarts is a Grammar School - though it selects not by academic ability but by magical ability.

 

[dandelion]

COOL FACT - Hogwarts is a Grammar School - though it selects not by academic ability but by magical ability.

More of a specialist academy, surely?


There wouldnt be any real problem reintroducing selective education. Just let schools who want to apply. I think the real point is that kids who are good at learning like learning and are cooperative. Its easy to teach them. The objection to grammar schools was in part that thy got all the resources. I expect there was some truth in this, because the emphasis was indeed on creating a relatively small number of well educated people, concentrating on the best. Maybe the reality is that someone somewhere decided they no longer cared about producing a small number of well educated, but felt that a big number of averagely educated was better. I dont agreee, most education is a waste of time. Some of it comes in useful, sometimes. To make an impact on the nation strength in depth is very important.

I heard someone talking on the radio about figures they had presented to government showing why grammar schools dont work. The person was entirely convincing that he/she believed what they were saying, but I dont know who it was or what the evidence was. Commented that it was very difficult to convince ministers who claimed their own experience was that grammar worked. So similarly I remain unconvinced, but interested to see what their evidence was.

The selective system of course meant that for every Grammar there had to be a Secondary Modern.

From what I have read there were some truly terrible schools. So, obviously, the solution to having bad schools is to abolish the good ones....

After Comprehensives were introduced some interesting statistics were possible. Take two areas which are as near as you can find them equal. Look at the academic performance of the Comprehensive measured in terms of exam passes.

My education story. Grammar schools survived longer than average where I live (abolished by the conservatives, by the way). Once I was talking to a local councillor/school governor who was proclaiming the benefits of the new comprehensive system. I agreed with him that I would naturally expect exam results to have fallen at the school which used to be the grammar. But I never got a clear answer on how the results for the whole area compared to immediately before the change. If it was good news, I would have expected him to have the info at his fingertips. Exam results were not published at that time, does anyone have them now?

I know there are good Comprehensives, but nationwide the system seems to have delivered a weak, even sub-standard education.

The system has been enormously more centralised than before. Introducing a national curriculum, for example. Everyone is aiming to beat the average result, not aiming to get the top result.

Cameron went to Eton - the 19th prime minister this tiny school has produced. Clegg went to Westminster. Most of the cabinet, both Con and Lib Dem, went to public schools.

The ultimate demonstration of the comprehensive fallacy. Public schools may or may not be better run, but money talks and a lot more is spent per child in educating them. It works. We still have selective education creating an elite, but now you have to be rich to get in. (this applies to good comprehensives too, of course)

Maybe the way forward is to make public schools more accessible through scholarships.

The grammar school system had the public schools on their knees. They were steadily going out of business, because people were able to get their children into good state schools. Which doesnt sound exactly fair, since grammars are supposed to select on ability, but does demonstrate the fact that an expensive education will give you an advantage whatever level. (so getting into a grammar aged 11). Or maybe it shows the number of rich people is growing and they have given up on state education.

Oh and I have to add...My niece was just complaining that her school had given early retirement to the only good maths teacher and his replacement was rubbish... but presumably cheaper.

 

[798686]

Can't be bothered ploughing thru the whole thread, I'm afraid. But the markets seem to have reacted positively to the new budget and deficit-cutting plans.

Seems like investors/speculators are thinking the pound a safer bet than the eurozone or dollar, and are pleased with the speed/determination of the British Gov to reduce the debt. Top business is on board too, according to today's papers.

*Grammar schools survived where I was brought up, too. Gave a lot of poorer people (like me, hehe) access to a good education - but was kinda elitist, and too hot-housing imo (fancied itself as a public school really). The secondary-modern schools nearby weren't much cop though.

Oddly enough, the middle of the road people (average at grammar school, high-flyers at 2ndary mod) are the ones who seem to have done the best since leaving school. The top intellectuals at my school seemed to crumble under the pressure a bit, and maybe missed out on developing good social skills due to the unbalanced focus on purely academic achievement.

 

[Jason]

Can't be bothered ploughing thru the whole thread, I'm afraid. But the markets seem to have reacted positively to the new budget and deficit-cutting plans.

This seems a very fair overview. The quantitative view of the markets is the closest we have to the average of economists' interpretations of the position, and it does seem very good indeed. At least the government is doing what has to be done.

What is truly shocking is that at the end of 5 or 6 years of austerity we will only just be breaking even on a year's accounts, ie in 5 or 6 years time we will have stopped increasing the nation's deficit. It will take a further decade or more of austerity to bring the figures back to the position Labour inherited in 1997 - basically a generation going nowhere. I know there are problems in many countries and I know Labour encountered a global storm, but it seems hard to escape the view that future economic historians will see Labour as presiding over the biggest boom and biggest bust of peace time. We need to be clear in the years ahead that the pain that this budget and subsequent cuts will cause is the fault of Labour's politically motivated economic idiocy. Let's hope that Labour will never again be elected.

 

[798686]

What is truly shocking is that at the end of 5 or 6 years of austerity we will only just be breaking even on a year's accounts, ie in 5 or 6 years time we will have stopped increasing the nation's deficit. It will take a further decade or more of austerity to bring the figures back to the position Labour inherited in 1997.

I agree, it's kinda sobering. It does feel somewhat of a relief that the gov is taking action though, regardless of how long it will take.

I know there are problems in many countries and I know Labour encountered a global storm, but it seems hard to escape the view that future economic historians will see Labour as presiding over the biggest boom and biggest bust of peace time. We need to be clear in the years ahead that the pain that this budget and subsequent cuts will cause is the fault of Labour's politically motivated economic idiocy.

I agree - they did have the whole credit crunch/banking failure to weather somehow, and that obviously added to our debt; but even so, Gordon Brown did seem to switch from being one of the most competent chancellors we've had (pre-2001 election), to one of the least. Plus, despite promising to stop the boom/bust cycle, they delivered one of the worst cases ever. :redface:

I did like a lot of New Labour policies to begin with, and I think the welfare state and helping people in society is extremely important - but turning the state into a hugely expensive, oppressive and profligate machine didn't seem to be the answer. :frown1: Not to mention selling us out to Europe, but that's another thread...

I saw Theresa May blame Labour yesterday for the situation we're in, and I don't normally like that sort of thing as it's unnecessary - but maybe this time it's important to do so, so they're not eventually blamed for a long period of austerity that they didn't cause? I seem to remember the finances Labour inherited in '97 were fairly healthy (one of the few remaining things the Tories were doing right at that particular point).

 

[Jason]

The Thatcher-Major government failed to carry the country with them. Thatcher became a bogey woman, while 3m unemployed was seen as too high a price. Yet the government took sound economic decisions so that when he left office in 1997 John Major could (correctly) state that the economy was in robust health. Labour could then go on their spending spree and buy the popularity that won them two further elections.

I hope the present govenment has learnt the PR lessons. The concept of a Coalition is just wonderful. What we have to guard against is Labour politicians arguing that if they were in power they would not be cutting X, Y and Z and it is all the fault of the sadistic Conservatives.

What has been interesting is the level of popular support for cutting benefits. I hadn't expected this. Yet there are a lot of people who know someone who is perfectly able to work yet is claiming incapacity benefit (at a level higher than many wages). Maybe, just maybe, the Conservatives have identified some popular cuts.

 

[798686]

What has been interesting is the level of popular support for cutting benefits. I hadn't expected this. Yet there are a lot of people who know someone who is perfectly able to work yet is claiming incapacity benefit (at a level higher than many wages). Maybe, just maybe, the Conservatives have identified some popular cuts.

I agree - there does seem to be widespread support of the cuts, and awareness of the need for it (like Ireland). I'm quite pleased really.

Yep, the welfare bill is far too high. I'd be reluctant to single out Incapacity tbh - straightforward incap is about £80 per week, if it includes Income Support. It's DLA that pays out more, I believe. I agree with getting ppl back into work who can do so - but I think the new criteria (introduced by Labour) chucked 2/3 ppl off incapacity, not all of whom are able to work full-time and replace their benefits...at least not immediately. The ESA sounds better, where ppl are coached into a job, and supported during the process - rather than either being paid for doing sod all, or booted off and left with nuthin.

 

[dandelion]

I dont know what you guys are crowing about. The budget statement says the government plans to cut 32 billion from spending and raise 8 billion in taxes by 2014. Thats only 40 billion. They also expect approximately 20% growth in GDP by that time, which would raise 100 billion. So weve had about 10 billion cuts already, or already amnnounced thus total cuts from the economy only about 50 billion. or 9% of the government budget. Thus their main strategy is to do absolutely nothing and wait for the economy to recover.

There are some spending figures here Public Spending Chart for United Kingdom 1999-2011 - Central Government Local Authorities which demonstrate that cutting 50 billion only brings the budget back to the level it was at under labour in 2008 or so before the financial crisis hit. In other words, they plan to return to the level of spending labour had set pre-world financial crisis. Big change, huh?

 

[Drifterwood]

Big change, huh?

Yes and no.

The issue as always will be about sustainability.

I think of this budget in terms of Osbourne going to his Bank Manager (the Bond markets) and promising all sorts of things to get his overdraft extended. He has succeeded, but I don't think anyone really expects all his promises to be met, rather enough so that when he goes back to the Bank Manager he can demonstrate that he has done enough to keep their confidence.

You and I, dear friends, are pawns in this merrygoround farce.

 

[dandelion]

The conservatives (and libs) are trying to spin this hard that they have made essential changes. A quick read through the budget seems to say that by far the greatest part of cuts had already been planned by labour, and both sides are/were relying on a recovery of the economy to bring in a similar large amount. This budget announces a relatively modest by comparison extra set of cuts which are anyway spread over 4/5 years. Almost certainly much of this would have been in Brown's budget next april had he won. probably it was sitting on the new ministers desks when they arrived.

Basically the budget statement detail says labour and cons have pretty similar policies. The conservatives, however, are trying to spin it as their fixing labours disaster. This is plainly untrue on the official printed facts.

 

[Jason]

Basically the budget statement detail says labour and cons have pretty similar policies. The conservatives, however, are trying to spin it as their fixing labours disaster. This is plainly untrue on the official printed facts.

Look at it this way:

• The markets like this budget. The market response is as near as we are ever going to get to an objective valuation of the economic strengths/weaknesses of any budget. It seems to me that a reasonable conclusion based on the market reaction to this particular budget is that it is the right budget.
• Perhaps Labour would really have brought in a broadly similar budget - ie a right budget. But:

a) They are shouting and screaming that they wouldn't have done anything like this and it is all the fault of those sadistic Tories.
b) When they had the chance with their last budget they didn't, and there seems to be pretty much a market consensus now that the cuts should be soomer rather than later (and should have started in the last budget).
​

Labour's present attacks on the budget are very sad. For the good of the country they should be 100% behind this budget. Only if we have general public support for austerity will we make it work, and a major party saying it is not needed and they wouldn't do it is deeply unhelpful and ethically suspect. If they get their message across it will do deep and lasting damage to the country.

My view is that Labour, had they been elected, would have had the markets move against them almost instantly. Maybe they would have responded with an austerity budget, but they would have had all sorts of internal problems from MPs who believe their own rhetoric and TU funders. I suspect they would have indeed done what they said they would do and delay. The only remaining question is whether on this scenario we would be in preliminary talks with the IMF or whether we would already be taking IMF loans - and with the IMF setting the budget.

Labour made the biggest mess of the economy of any peace-time government. And in opposition they appear to lack the balls to do the right thing and support the only course of action that can work. I hope they are never, ever again in power. Economic incompetence I could put up with, but the moral vacuum of a party that took the UK to war by lying to parliament and now puts Labour party popularity above the good of the people of the UK means that for me Labour are beyond the pale.

Presumably the Coalition will legislate to stop the TU donations to Labour. I can hope the Labour party might go broke. Boundary changes might hurt them. Then there's the Iraq enquiry - and whatever other dark doings of Labour can be dug up and exposed to the ligt of day. And of course proper investigation of the strange death of David Kelly.

 

[dandelion]

Look at it this way:

• The markets like this budget.

• Dont disagree. But since its pretty much labours intent anyway, presumably they would have liked that.

• The market response is as near as we are ever going to get to an objective valuation of the economic strengths/weaknesses of any budget.

• Id hardly call it objective. They are assessing the prospects to make money from the british government.

Perhaps Labour would really have brought in a broadly similar budget - ie a right budget. But:

a) They are shouting and screaming that they wouldn't have done anything like this and it is all the fault of those sadistic Tories.​

Just as the tories are screaming it is all the fault of those labour people

b) When they had the chance with their last budget they didn't, and there seems to be pretty much a market consensus now that the cuts should be soomer rather than later (and should have started in the last budget).

A quick read of the government budget statement this morning seems to show that 5x as much of the plan to balance the budget had already been put in place than was announced in the new budget(£100bn to come from growth,£100bn from existing cuts/taxes and £40bn from these new changes. Labours differentiation from the conservatives during the campaign was that cuts were needed, but not quite yet. Obviously this was a political tactic, but it is one arguable on economic merit because it is very much a judgement call when exactly to stop pumping money into the economy and start clawing it back. It is my expectation that labour would have done something similar to what the con/libs have done now next april, with announcements now about the pain ahead, just like the current government, to give clear signals to the markets. It would be a few more billion on the bill, but negligible compared to the total and probably less than BP is costing.
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Labour's present attacks on the budget are very sad. For the good of the country they should be 100% behind this budget. Only if we have general public support for austerity will we make it work, and a major party saying it is not needed and they wouldn't do it is deeply unhelpful and ethically suspect. If they get their message across it will do deep and lasting damage to the country.

Come on, what do you expect, this is politics! BUt the conservatives have hardly started by playing fair: they are claiming that labour totally screwed up and also screwed up on fixing the mess, you can hardly blame labour for fighting back in the same way.

My view is that Labour, had they been elected, would have had the markets move against them almost instantly.

I dont agree. Youre the one who keeps posting what a disaster the eurozone is. britain shines by comparison (at least on your analysis). The money has to go somewhere. If everyone gets downrated to C, then B just shines.

Maybe they would have responded with an austerity budget, but they would have had all sorts of internal problems from MPs who believe their own rhetoric and TU funders.

Yes probably they would. Which is why con/lib may well be better placed to carry them out. But it is still unfair to claim labour would not have done so. But dont forget labour now has the luxury of opposition to be as fanatical as it wants without it causing any harm. They can afford to let the left let of steam for the time being. The conservative right (and maybe even the liberal left) are of more importance to the country right now.

I suspect they would have indeed done what they said they would do and delay.

Yes, I think so. Anything else would have looked too hypocritical. But its only 9 months to the next due budget, and Im sure they would have been announcing things this year.

Labour made the biggest mess of the economy of any peace-time government.

I cant say. I havnt studied how big messes other governments have made. But funamentally they did not. International big banks made the mess.

I hope they are never, ever again in power.

They will be. Unless Cameron can arrange some miracle to set the liberals up as the natural second party of british government and in 5 years if lib/con really screw up.

I personally do not like this line of argument that labour screwed up because I think it mostly a lie. In my eyes it hurts the conservatives for uttering the lie more than labour for being accused of it. If they want to be reelected in 5 years they need to demonstrate fair dealing. I expect they know that, what they are trying to do is put across the severity of the situation but I think they are missing their proper target. Then again, maybe they think they have to blame someone and saying its the banks fault will not help relations with moneylenders. Though if thats true it isnt a promising sign either.

Economic incompetence I could put up with, but the moral vacuum of a party that took the UK to war by lying to parliament and now puts Labour party popularity above the good of the people of the UK means that for me Labour are beyond the pale.

I think youre a conservative supporter! Labour are out of power because they took the country to war, not because they mishandled the economy. I think Cameron knows this too, which is why he is making noises about bringing troops home.

Presumably the Coalition will legislate to stop the TU donations to Labour.

I dont see why. How is it democratic to stop any group forming and funding a political party to fight for whatever its aims are in parliament? The proper way to reform party funding is tighter spending caps.