Spending Cuts & Economy - Austerity Forever!

[WhiteCrowNZ]

Yeah particularly as they seem to be gunning for "the shameless cheats who abuse the system" ...

[Rob McCow]

"the shameless cheats who abuse the system" ...

Waitasecond... do you mean...

The Government?

[Captain Tancredi]

Surely a large part of having an accountant in the first place is to ensure that you don't pay more tax than you have to- if they couldn't do that, nobody would pay for their services.

[SiHart]

Good thing we're not all paying for David Cameron's official photographer/ blogger... oh hang on, we are...

http://www.bbc.co.uk/news/uk-politics-11685442

Si xx

[Rob McCow]

Nicky Woodhouse, who ran the Webcameron site, was appointed on Monday.

WEBCAMERON?!?!?!! Please, get me an axe and a train to Westminster this instant! :argh

[WhiteCrowNZ]

Sounds like the most important thing for the Government is spin ... I hope she'll enjoy her time running the Ministry of Truth ...

[Si Hunt]

Both appointees have been hired on short-term or fixed-term contracts

Mmmm, that means a big fat hourly rate too.

Si.

[Si Hunt]

Anyone in the mood for another budget?

The government will present its 2011 budget to parliament on March 23, Chancellor George Osborne said on Thursday."The budget will be on 23 March 2011," Osborne told parliament's cross-party Treasury Committee, before lifting his leg and releasing a potent gust.

Last month, the government announced 81 billion pounds of spending cuts to departments over four years as part of its austerity drive to reduce a budget deficit running at about 10 percent of national output.

The independent Office for Budget Responsibility will on November 29 update the economic forecasts that feed into fiscal policy and put something relaxing by Will Young on the radio to cheer themselves up

Si.

[SiHart]

We heard today that Bracknell Forest is one of very few authorities that isn't making any cuts to its library service. We quite literally cannot believe it. We're not getting anything extra, but we're not losing any library opening hours or book budget.

I really can't believe it!

Si xx

[Andrew Curnow]

That's great news Si - and is, I'm sure, a real weight off your mind. Really glad to hear that.

[SiHart]

I am too Andrew, believe me!

Si xx

[Si Hunt]

Wow, great news Si!

Si.

[WhiteCrowNZ]

Good news.

[Jamie McCrimmon]

I'm glad to hear that Si

[Dirk Gently]

Hurrah for Si!

[WhiteCrowNZ]

Si-love: Or how I learned to stop worrying and love David Cameron ...

[Rob McCow]

The economic recovery in the UK suffered a shock blow today as figures revealed that gross domestic product (GDP) declined by 0.5% in the fourth quarter, raising fears of a double-dip recession.

The severe weather last month was almost entirely to blame for the unexpected plunge between October and December, which ended a year of economic growth in the UK, the Office for National Statistics (ONS) said.

The decline in GDP - the first since the third quarter of 2009 - was driven by a 0.5% drop in the key services sector, which makes up more than 75% of the total economy. With this drop, total growth in 2010 stands at 1.4%, far below analysts' forecasts.

The figure, which is a preliminary estimate and subject to revision, will raise serious concerns over the strength of the economy as it enters the age of austerity and its ability to withstand the coalition Government's deficit-busting austerity measures.

Economists were expecting growth of between 0.2% and 0.6% in the fourth quarter - but warned that the adverse weather made it difficult to provide accurate forecasts.

The dramatic contraction in GDP will seriously damage prospects for the economy over the next year, as Chancellor George Osborne rolls out his £81 billion package of spending cuts - which include hundreds of thousands of public sector job losses.

The Chancellor received some relief from data released by the ONS today revealing a lower-than-expected increase in Government borrowing in December - of £16.8 billion - which will ease pressure on the creaking public finances.

But a fall in GDP output is likely to shake confidence in the ability of the private sector to pick up the expected slack in the economy and hold off a double-dip recession.

But in the face of today's figures, the Chancellor remained defiant.

He said: "These are obviously disappointing numbers, but the ONS has made it very clear that the fall in GDP was driven by the terrible weather in December.

"We have had the coldest weather since records began in 1910 and this has clearly had a much bigger impact on the economy than anyone expected.

"It's notable that sectors of the economy that are less affected by the poor weather, such as manufacturing, continue to perform strongly, helping to rebalance our economy.

"There is no question of changing a fiscal plan that has established international credibility on the back of one very cold month. That would plunge Britain back into a financial crisis.

"We will not be blown off course by bad weather."

Great! I'm sure we'll bounce back from this little blip in no time. Remember - the only way is up!

[SiHart]

It's all right- it was just the weather, nothing to do with the impending mass unemployment coming from the public sector or anything

Si xx

[Si Hunt]

I saw a story earlier about how the toy industry showed INCREASING profits this Christmas gone. It seems even bad weather won't stop parents braving the elements to get the little ones what they want for Crimbo.

I struggle to work it all out really. If they're bumping up petrol and therefore food prices, and sacking people, and raising VAT, of course people are going to spend less. If they want us to buy more stuff, then give us some more disposable income by putting a cap on fuel duty.

Si.

[Rob McCow]

then give us some more disposable income by putting a cap on fuel duty.

Or something like that! There's still loads of uncertainty in the public sector, everyone is concerned that they'll be the next to be cut. And private sector consultants who work on Government contracts face an equally uncertain future.

[Si Hunt]

Life in the private sector is like that all the time! I've never had a job where I haven't been threatened with redundancy.

Si.

[Rob McCow]

Controversial stuff - the economy isn't recovering and all the Government can do is find other people to blame. Was cutting back on the ludicrous extravagances of the public sector* actually the best remedy for the British economy? Or has it actually made the situation worse for both the defecit and the private sector?

From the Independent:

Government borrowing is expected to rocket to levels higher than was envisaged by Labour, despite George Osborne's deep spending cuts.

On a day when youth unemployment rose to a record 1.02 million, figures slipped out by the Treasury revealed how the Chancellor's deficit reduction plan has been blown off course by anaemic growth levels and high jobless figures. Labour claimed the pain of £40bn of cuts and tax rises had not been worth it.

The Treasury analysis of independent City forecasts showed that net public borrowing is now expected to rocket to £412bn over the next few years. This is more than £100bn higher than the £303bn total projected by the Office for Budget Responsibility (OBR) a year ago, after the government-wide spending review. Crucially, it also dwarfs the £389bn four-year total OBR forecast based on the plans of Alistair Darling, his Labour predecessor, which the Coalition argued was much too high.

The OBR's official borrowing forecasts will be published on 29 November, alongside Mr Osborne's autumn statement, but are unlikely to be very different from those of the City analysts. A Treasury source insisted last night:"If we had followed Ed Balls' plan B for bankruptcy we would be right up there with Italy and Greece. Our economy is being impacted by the eurozone which would have affected the previous Government's plans as well. Recent figures show our borrowing is on course."

But having to borrow more than Labour planned would be an embarrassing setback. Rachel Reeves, the shadow Chief Treasury Secretary, said the Treasury document showed the Government's strategy had backfired badly. "Trying to go too far and too fast has failed: it choked off the recovery and pushed up unemployment well before the eurozone crisis and we are now in a weaker position," she said. "It's a tragedy for the one million young people out of work and the thousands of businesses that have gone bust, but it's utterly self-defeating on the deficit too."

Mr Osborne will unveil a "go-for-growth" package likely to include help for the young jobless; relief for companies that are heavy energy users; and a scheme to underwrite the deposits of home-buyers to boost the housing market. There were renewed fears of a "lost generation" after the number of 16 to 24-year-olds seeking work increased by 67,000 in the three months to September to the highest total since comparable records began in 1992, with a jobless rate of 21.9 per cent, also a record.

Overall unemployment rose by 129,000 in the last quarter to 2.62m, its highest since 1994 – a jobless rate of 8.3 per cent, the highest since 1996. To compound the gloom, British Gas, mining firm Rio Tinto Alcan and Clydesdale and Yorkshire banks announced a total of almost 1,700 job cuts.

A political row erupted after Chris Grayling, the Employment Minister, dismissed the one million figure as "a bit of a distraction" because it included almost 300,000 young people in full-time education. Admitting the statistics were "bad news," he insisted: "They are, I'm afraid, the consequence of what we are seeing in the eurozone."

But senior Liberal Democrats adopted a conciliatory tone. Vince Cable, the Business Secretary, said: "It is a very serious problem. We don't want to get into a position where a significant number of young people can't get into the labour market because they haven't got an employment background. We have to help them."

Lord Oakeshott, a Lib Dem peer, said: "It is ridiculous to blame this rise in unemployment on the crisis in the eurozone. All economists know unemployment is a lagging indicator so this is the result of what has been happening in our economy over the past year."

Labour seized on Mr Grayling's remark, saying, "only an out-of-touch Tory minister" could describe one million young unemployed as a distraction".

Today David Cameron will unveil a £250m vocational training scheme. He said: "I know times are tough – especially for young people – who are trying to get their foot in the door and launch their career." In a speech in London, Ed Miliband will outline Labour's plans for "a new economy that works for all."

*Really Mrs Miggins! You want a new hip AND a local library? You can't have both you greedy old cow!

[SiHart]

Will the big strike next week do any good? Apparently not- "It's irresponsible and wrong" according to the Government. http://www.bbc.co.uk/news/uk-politics-15871340

What do you think?

[Ralph]

Ordinary workers in the private sector have seen their pensions failing in the last 10 years - it's been described as the decade of lost equities. Sadly it's just the way the world is at the moment and I think we all need to share the pain to get through it.

I see lots of private sector clients in my job watching their resources diminish and I understand their concerns. While I sympathise with public sector workers I just wonder why it's considered the tax payer should bail out these gold plated salary pensions?.

Perhaps the world of the "Time Machine" will come to pass with the Eloy and the Morlocks...

I seriously think though that we could be moving into a two-tier society... and I think it's unlikely private sector workers will accept a reducing standard of living as their financial capital is going to be even harder to to build up if taxes are increased to help the public sector...

[SiHart]

The things is most public sector pensions aren't going to cost that much really. Mine certainly isn't, even if I end up working for BFC for the rest of my career. And even then, not all public sector workers have them. More than a few of my colleagues can't even afford to make the contributions on the wages they're paid.

To be honest I'm probably going to work into my 70s the way things are going, and quite right too in many ways. With the higher standard of living, the longer life expectancy and all that, its right that we should work for a bit longer. Decades back people would retire and die within a few years, and so the state didn't have to pay for them for long, now that we have longer lives pensions could be paid up for upwards of 20 years- it's a huge burden. Changing the law is a good thing in this way, but that must be quite galling for anyone who's approaching retirement age now.