Spending Cuts & Economy - Austerity Forever!

[Ralph]

Listening to the Jeremy Vine show I find it frustrating for some public sector workers to claim they pay more in to their pensions than private sector workers so therefore should have more benefits - how do they work that one out! Then another public sector worker says they made the right choice to be a public sector rather than private sector worker (so those of us in the private sector made a bad career choice). How would the economy work if we were all in the public sector? The answer is it wouldn't.

I have to say I sympathise with all low paid workers be they in public or private sector but there is a serious misunderstanding by the public sector of how pensions work.

There's lots of well paid public sector executives milking the system very nicely. Just as the top of the private sector is doing the same.

It's always the poorly paid public sector workers the Union leaders parade in front of us to make private sector workers feel this is a fair strike. The Union leaders are looking after their own generous pensions as well.

The only private sector workers I expect that will support this action are those with a vested interest through wifes/partners in the public sector.

I reckon this is the biggest divisive issue of opinion in the country since the strikes at the end of the 70s.

If the public sector gets everything they want it will cause massive resentment as private sector workers take the pain of "real life" pensions battered by the the massive downturn in world economic fortunes and are asked to chip in to protect the "rights" of the public sector.

It's simple economics - the money isn't there - we all have to put more aside for the future and work longer and retire later. Welcome to reality horrible as it may be to take. As said the light at the end of the tunnel has been turned off New thinking required for the new world.

Glad I got that off my chest! - anyway better get back to work - somebody's got to!

[Nyder]

Sorry to sound like a broken record, but the money IS there - well it is for the NHS Pension Scheme. £2 billion in surplus last year to be precise. Which went straight back to the Treasury. Lucky old them! Unless you're a Chief Exec or a Director, then these "gold-plated pensions" are a complete myth. Why not scrap public sector pensions then? I'd happily have more in pay packet every month, then rely on the tax payer in retirement in the form of benefits when I can't afford a decent living.

That last line was a tad facetious by the way The main issue here is how to make private pensions more affordable, not how to bash public sector ones.

[Ralph]

I know lots of middle earning public sector workers on pensions in excess of £20,000 a year. To have this in the private sector you need a pension pot of at least £400,000.

[wombatskidude]

Shame on Labour for not backing the strikes.

Even with the demise of Murdoch, Labour are still scared of looking left-wing.

[Rob McCow]

How about anyone earning over sixty grand in the public sector gets moved onto a private pension scheme? No?

Never mind.

[Rob McCow]

Of course, if Jeremy Clarkson had his way...

[Jason Thompson]

It's always the poorly paid public sector workers the Union leaders parade in front of us to make private sector workers feel this is a fair strike.

And are those poorly paid ones not a particularly important element then? Yes, the highly paid ones are looking after their own interests, but does that mean the poorly paid ones should suffer? Yes, a public sector worker with a huge pension should maybe not have as much to complain about, but why should the poorly paid ones suffer with the same cuts, which will have a far more significant effect on their income and lives?

The only private sector workers I expect that will support this action are those with a vested interest through wifes/partners in the public sector.

Sorry, but I'm afraid you are wrong about that.

I support the strikes. My wife works in the teaching profession, but although that is undeniably a factor that is not the main reason I support them.

Teachers in particular get a crap deal. Everyone says they should 'take their lumps' like the rest of us, but the fact is they already have, and then some. They get paid based on the time they spend with students, but this takes no account of the time spent outside of school during which work inevitably has to be done in order to make the work done in school effective. NASWUT suggested a 'work to rule' strike, which would have shown just how much extra unpaid work teachers actually do.

Teachers effectively get paid for about 60% of their work. They're being offered what amounts to an 18% pay cut over the next few years, and told to put up to 50% more into their 'pensions'. Pensions that are not voluntary and amount to a second tax on their income. And yet teachers are an absolutely VITAL part of the infrastructure of this society, or indeed any other. Of all the people to hit with huge cuts, the ones who provide the next generation with the foundation they need to be a useful member of society in future years? Really?

But again the issue most often overlooked is that the strikes are also about employers honouring agreements and promises, and employees showing they will not take any old crap they get handed.

It's simple economics - the money isn't there

Utter rubbish. The money to sustain everything as it is may not be there, but what sort of pay cut and increased pensions are the MPs who are making this 'deal' taking to support the economy? How much are George Osbourne and Michael Gove going to suffer if they get their salaries reduced a bit?

We all have to pull together, says the government. Fine, let's see you all taking some large pay cuts as a sign of your involvement and commitment to solving this problem. How about it? What's that? Too busy claiming second homes and cleaners and moat draining services on your expenses?

we all have to put more aside for the future and work longer and retire later.

Not in dispute. Why, however, should a whole sector of society be forced to put up to 50% more aside for the future?

I have a private pension, to which my employer contributs not a penny. I know I have to put some aside. I choose how much to put aside, where to save or invest it, and then deal with the consequences of having maybe not enough when I come to draw my pension after I retire. My choices, my fault, my consequences to deal with.

Public sector workers are forced by their employer to put aside a certain amount on the promise that they will get some back after retirement. Oh, unless the government changes its mind about how much to give you, that is.

[wombatskidude]

Cameron's flip-flopping on why he hates the strike has been positively Orwellian this week.

On the one hand, it's going to cost the economy £500m, destroy the fragile 'recovery', and single-handedly push Britain 'back' into recession.

On the other hand, it's just a damp squib.*

He knows he needs to make snide comments about the strike, but he just can't decide exactly why he's against it.

Steve Bell sums it up perfectly:








*A damp squib that was the biggest strike in 4 decades...

[Jason Thompson]

And just how does a section of the populace taking a day off for a strike cost the economy hugely, while the government giving everyone in the country an extra day's holiday for a royal wedding doesn't?

[Nyder]

Thanks for your posts Jason - far more eloquently put than my rambling!

[Nyder]

Incidentally the NHS Pension Scheme was already revamped in 2008 to take into account the fact that people are living longer. This is what probably contributed to the £2billion surplus last year. Hey DC - if it ain't broke - don't fix it!

[MinaHarker]

Incidentally the NHS Pension Scheme was already revamped in 2008 to take into account the fact that people are living longer. This is what probably contributed to the £2billion surplus last year. Hey DC - if it ain't broke - don't fix it!

Exactly as with the Teacher Pension Scheme, which was revamped in 2006 to make it less costly and take account of people living longer.

FTR, I think Ralph misunderstands how public sector pensions work. There is no "pension pot" - employee contributions are taken and used for Govt spending, with the Govt contribution basically being "theoretical" until it needs to be paid.

The Hutton Report into public sector pensions DOES NOT say they are unaffordable.

The Govt has said that the extra contributions they want to take from next April will NOT go into some "pension pot" - it will be used to pay off the deficit caused by fatcat bankers who a) got us into this mess b) are now getting bonuses.

Back in the 70s and 80s, the private sector has pensions just like public sector. They were dismantled by business leaders who wanted to keep the money for themselves and make bigger profits. Those pension schemes were lost because people DID NOT FIGHT for them.

In short, the money is there. This is just an assault by the Govt on people they think will lie down and taken it. Well, we won't. The private sector did 30 years ago, and look how that turned out.

One of the NUT's aims is "Fair pensions for all" - the NUT is actively campaigning not just for public sector pensions but private sector ones too. Don't let the Govt and Dail Mail convince you there is some us vs them issue. It's a divide and rule tactic designed to promote a race to the bottom where the rich get richer and the rest of us suffer.

Oh, and BTW - I worked (public sector) 1.5-2x as many hours last year as my husband (private sector), and made half as much money. So don't you dare call me "greedy" or "lazy" for protecting the one thing I have left.

[MinaHarker]

Ugh, sorry

*had
*take
*Daily

My iPad's autocorrect thinks I knows what I want to say better than I do.

[Stephen Morgan]

The strikes will affect me by the weekend as the whole of Unilever will come out on strike against proposed pension changes by the company.
Currently most of us are in a final salary plan to which Unilever contribute 7% to. They propose a change to a career average plan to which they will contribute 5%, which means we will have to top up our own contributions to meet a reasonable standard of living when we retire. In my case if I choose not to top up, it means a loss of £40 per week when I retire in nine years time.
Negotiations have been ongoing between Unite the Union and Unilever for almost eighteen months, neither side have reached a satisfactory agreement, and what has made matters worse is the fact that despite Unilever crying poverty, they have announced a £12 billion profit in the third quarter of this year.
All of Unilever will be out on strike on Friday through Saturday morning, justifiable I think, I hope we will get all the support possible. We have to make a stand against the Governments who have made it easy for pension laws to be changed, and the greedy fat cats who profit with obscene bonuses while we struggle to keep them in comfort.

[Rob McCow]

despite Unilever crying poverty, they have announced a £12 billion profit in the third quarter of this year.

Yeah, that kind of statistic makes you sick, doesn't it? I suppose they'd argue that it's more complex than that and most of their profits are overseas, but with £12 billion floating about they could probably afford their pension contributions in the UK.

[Rob McCow]

Pressure is mounting on the Coalition to reverse course on its strategy of spending cuts after the British economy officially slumped back into recession in the first three months of this year. Economists warned that George Osborne's plan for deficit reduction will damage any recovery over the coming years, with 90 per cent of the Chancellor's planned cuts still to be enacted.

There were signs yesterday that the Coalition's united stance on spending cuts was wavering. The former Liberal Democrat Treasury spokesman, Lord Oakeshott, who is close to the Business Secretary Vince Cable, described the cuts scheduled for this year as "self-harm". He said: "Five per cent more cuts are the last thing we need while the economy is flat on its back – that would simply be self-harm." He called for the Coalition to instead borrow more using the UK's record low interest rates to fund an ambitious national home-building programme.

Yet Mr Osborne insisted yesterday that he would not sanction more borrowing, even with the economy slumping again.

"The one thing that would make the situation even worse would be to abandon our credible plan and deliberately add more borrowing and even more debt," he argued. Even in the grip of a double dip, there is to be no "Plan B".

So perhaps it's time to ask again. Should the spending cuts continue? Or should they be postponed until the economy is in a bit of a more healthy shape?

[Perry Vale]

"The one thing that would make the situation even worse would be to abandon our credible plan and deliberately add more borrowing and even more debt," he argued. Even in the grip of a double dip, there is to be no "Plan B".

The telling word there is "deliberately". Of course the fact is, Osbourne has inflicted his huge cuts, yet still borrowed billions more than he said he would. He's cut everything, yet we're more in debt, and back in recession. We're ****ed. Oh, and the other thing he's done is be wrong on every financial forecast and prediction he's made. Mystic Meg would do a better job. Or a weather forecaster.

In other news, the Pope is Catholic, apparently.

[Rob McCow]

Austerity will last forever, reveals Cameron, and Communist China is great:

The government is to forge a "leaner, more efficient state" on a permanent basis, David Cameron has said as he signalled he had no intention of resuming spending once the structural deficit has been eliminated, a clear change to claims made after the last general election .

In a change of tack from saying in 2010 that he was imposing cuts out of necessity, rather than from "some ideological zeal", the prime minister told the Lord Mayor's banquet that the government has shown in the last three years that better services can be delivered with lower spending.

Cameron said that the government would press ahead with tackling the deficit after cutting it by a third. But he made clear that his party intended to go further.

"We are sticking to the task. But that doesn't just mean making difficult decisions on public spending. It also means something more profound. It means building a leaner, more efficient state. We need to do more with less. Not just now, but permanently."

The PM cited Michael Gove's work in cutting administrative staff at the education department by 40% while 3,000 free schools and academies have been established. He also said the government has cut 23,000 administrative posts from the NHS while employing 5,000 more doctors.

He said: "So you can have a leaner, more efficient, more affordable state that actually delivers better results for the taxpayer."

The remarks by the PM contrasted with his claim after the 2010 election. In his New Year's message for 2011, issued on 31 December 2010, he said: "I didn't come into politics to make cuts. Neither did Nick Clegg. But in the end politics is about national interest, not personal political agendas.

"We're tackling the deficit because we have to – not out of some ideological zeal. This is a government led by people with a practical desire to sort out this country's problems, not by ideology."

A few months earlier that year, in his first Tory conference speech as PM, Cameron said he would have preferred to tackle the deficit in ways other than public spending cuts. He said: "Everyone knows that this government is undertaking a programme of spending cuts. I know how anxious people are. 'Yes', they say. 'Of course we need to cut spending. But do we have to cut now, and by this much? Isn't there another way?'

"I wish there was another way. I wish there was an easier way. But I tell you: there is no other responsible way. Back in May, we inherited public finances that can only be described as catastrophic."

In a sign the PM believes that he needs to make a more aggressive defence of spending cuts, Cameron also rebuked the Archbishop of Canterbury, who warned earlier this year that children would "pay the price" for the government's decision to cap benefits at 1% a year until 2016. In remarks endorsing a letter by 43 Anglican bishops, issued a few weeks before his enthronement, Welby said in March of the benefits up-rating bill: "These changes will mean it is children and families who will pay the price for high inflation, rather than the government."

Cameron said: "There are some people who seem to think that the way you reduce the cost of living in this country is for the state to spend more and more taxpayers' money. It's as if somehow you measure the compassion of the government by the amount of other people's money it can spend.

"At a time when family budgets are tight, it is really worth remembering that this spending comes out of the pockets of the same taxpayers whose living standards we want to see improve. I hope the Archbishop of Canterbury will forgive me for saying – it's not robbing Peter to pay Paul – but rather robbing Peter to pay Peter. Let's be clear. The single biggest threat to the cost of living in this country is if our budget deficit and debts get out of control again."

Cameron's remarks were also aimed at Ed Miliband, who has dominate the political agenda since the conference season with his focus on the costs of living.

The prime minister also used his speech to announce that he would lead a trade mission to China in December. He had to postpone a visit earlier this year after China, which was irritated with Cameron after he met the Dalai Lama, made clear that he would not meet the main Communist leadership.

He said: "As China's new leadership sets its direction for the next 10 years, as their country's star continues to rise in the world, I will take senior British ministers – as well as business leaders from every sector large and small – to forge a relationship that will benefit both our countries and bring real rewards for our peoples. Opening the way for British companies to benefit from China's vast and varied markets and preparing the way for a new level of Chinese investment into the UK.

"This is a relationship that is for the long term, that matters for Britain and China, and which I look forward to continuing to strengthen in the months and years to come."

Far be it from me to express a political opinion, but I think I want to vomit.

[SiHart]

I'm not surprised. It was always an idealogical campaign rather than austerity measures. Anyone in local government could tell you that. We don't spend and spend and spend, we provide services. They don't make money, they just cost. The postive things they provide aren't always easy to measure, so you get rid of them. Only later do you realise just what it is you've lost. This government is so ****ing shitty and horrible.

[Perry Vale]

Nothing surprising, it's all by design.

After the next economic collapse, Primark will do a roaring trade in orange jumpsuits....

[Mike Saville]

It is an oft repeated meme, that Conservative governments know the cost of everything and the value of nothing. Austerity may well have helped the national purse, and the south, but up here we have closed most of the libraries, sport and leisure centres, our swimming baths, some art galleries and museums, and quite probably the historic City Hall in 2014. The 200 year old state coach of the City of Newcastle had to be sold to prevent redundancies elsewhere (luckily it was bought by the Freemen of the City so it can remain, but it could just have easily been sold overseas). We no longer have a municipal waste station in Gateshead (tip), and bins are emptied less frequently.

They can throw billions at the white elephant that is HS2 (linking the south to the north- because to London, Birmingham is the North), but do nothing to improve the actual services 90% of the country.

As ever, they systematically dismantle everything, so that 'private investors' can pick over the profitable bits and buy them at a massively reduced rate, and leave the councils to get the blame for the stuff that costs.

I fear for this country, I really do.

[Perry Vale]

What crisis? Billionaires’ fortunes double since 2009

Amid talk of austerity measures, lost jobs and slashed wages, the super-rich seem super-resistant, with their wealth doubling since the financial crisis, adding $226 billion to their wealth in the last year alone.....

On an interesting side note, the bulk of the wealth of the world’s richest derives from the recently-rescued finance, banking and investment sector (17 percent), with manufacturing making up just 8 percent.

Austerity - The transfer of wealth from the bottom to the top.

[SiHart]

Which of course benefits most of the cabinet and their friends. Tossers.

[Perry Vale]

This is how Cameron was dressed when he called for permanent austerity...



And this is who he was talking to...



We're all in this together.

[Perry Vale]

Farming subsidies: this is the most blatant transfer of cash to the rich

It's the silence that puzzles me. Last week the chancellor stood up in parliament to announce that benefits for the very poor would be cut yet again. On the same day, in Luxembourg, the British government battled to maintain benefits for the very rich. It won. As a result, some of the richest people in the country will each continue to receive millions of pounds in income support from taxpayers.

There has been not a whimper of protest. The Guardian hasn't mentioned it. UK Uncut is silent. So, at the other end of the spectrum, is the UK Independence party.

.....

The minister responsible for cutting income support for the poor, Iain Duncan Smith, lives on an estate owned by his wife's family. During the last 10 years it has received €1.5m in income support from taxpayers. How much more obvious do these double standards have to be before we begin to notice?

And so it goes on...