By Tim Nicholls /@tim_nicholls
This country is broken. The economy is crippled by government debt. We stand on the precipice of oblivion and only one man can help us now. The transition from failure to success will be painful for all of us; but with the Tories at the helm, the country will see itself into calmer economic waters and society will be ‘unbroken’.
Now, myths have abounded in the news that has come out of Manchester this week, but the whopper to sink all whoppers is the assertion that the Conservatives have won the argument on the economy. Apart from being patently false (a point dealt with in several other LabourList posts), this lie gets its sting from the possibility of becoming true. I do not mean that the Conservative plans for the economy are, or will be, the right ones for the UK now or in the future: I mean that they might win the argument. If they do this, it will be by continuing that argument that has been coming from top-Tories this week and was the main force behind Cameron’s speech.
They will do it with brinkmanship.
But it will be false brinkmanship, based on the out-and-out lie that Britain is teetering on the edge. It’s a clever move from the Leader of the Opposition: he can blame Labour for bringing us here, show himself as the last resort for recovery, make voters submit to policies they will find ‘painful’ and build in an excuse for his party’s later inaction, should they win in May. And if we in Labour allow this tactic to continue, we will lose.
The lie is easy to dispel: it is a simple matter of fact. We can start by showing that the UK has been set firmly on the path to economic recovery by the Government’s actions, not just in saving the banks, but minimising the impact of unemployment (including new jobs, training, mortgage holidays) and setting up the beginnings of a new green economy to see us into the future.
We can do it by showing that ‘painful’ spending cuts are simply unnecessary pain: a growing economy is the best way to pay down debt, but Tory plans will stunt the economy meaning that debt repayments will hit services harder and thus begin a self-perpetuating vicious cycle. We can do this by showing that the Tories’ sums simply do not add up and more money will be needed, likely from more cuts.
Cameron’s got a head start: in hard times, it is natural to be pessimistic and having been surrounded by the recession for 12 months, people will be only too willing to believe that the situation is dire.
But that does not make it true. Labour has to fight this election on optimism, dispelling the many myths that have come from Messrs Cameron and Osborne this week and countering their dour messages of austerity and pain.
This will be easier once green shoots emerge, but we cannot wait for them. We have to show that this is the best course, as global leaders and respected economists have testified, and that to stick it out is the quickest and best route to economic recovery.
It’s doable, I do not doubt that: the best thing about false brinkmanship is that it can be countered by plain simple fact.
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Demonstrating that you are mendacious is hardly defensive. Raw nerve, no, sorry- I'm not a member of any political party, so the Tories amour propre is their concern. I do particularly despise New Labour however. You've taken this country two-thirds of the way to making "House of Cards" a reality, made politics a dirty word, made lying the standard procedure of government- and then preach to the rest of us. You'll be preaching in the desert soon enough.
Unlike the Tory Eurosceptics, the militant tendency were roundly defeated by Blair and Brown. There's been no 'clause 4' moment in the Tory party, and until there is, I can't trust they won't attempt another internal coup when in power. I wish I could trust Hannan was the 'loony' wing, but since the vast majority of Tories I encounter here seem to fanboys, the evidence supports my assertions rather than yours.
If you'd bothered to ready any of my posts, Bill, you'll see I caveated them every time by saying 'this may not represent the whole Tory Party'. But still, the defensiveness of you on others on this show me that I've hit a raw nerve.
"I personally don't care about private education since it affects a tiny 6 per cent minority, but virtually every Tory I know seems to have radical opinions about state education, often without sending their children there."
This made me laugh, if 44% of voters are voting Tory, lets be kind to you and say all 6% are Tories. What about the other 38% of these Tories, do they have no right to express a view on state education? If everybody pays tax and that tax is spent on services are you saying that some can have a say and others cannot? Are you saying that the person who spends 20,000 per annum on private education, cannot comment on the percentage of his tax that supports education?
Comprehensive education has failed so many of my friends. I was with friends yesterday and we were discussing exactly this. They believe their children have been failed and are distraught. I can stand up and say it is not very good. It has been a retrograde step. A serious mistake that satisfied the "shouting crowd".
You want us to believe that Hannan is somehow the real power in the Conservatives, their "true face". Is he on the front bench, Peter? Is he a shadow minister? Does he have more clout than, say, Jeremy Corbyn or Denis Skinner?
Every party has it's loony wing, Peter, as a Labour drone you should already know that. Trying to tar a whole party with the rantings of its extremists is just "Big Lie" in action. The fact that you're flattered to be grouped with Blair and Brown says it all.
Your prose is cracking up, suggesting to me your arguments are falling apart. Just to clarify.
1. The NHS. I've heard consistent attacks by Hannan et al about the NHS being a 'marxist' system. You never heard those? Well, you should stay in more often.
The argument that I and many make about the insurance based Singapore Model is that it would create, in the Medicaid state subsidised section, a cheap second tier and therefore end the UNIVERSAL element of free healthcare.
This is precisely the bit that seems to alarm so many Tories. What is the point of a free market if some goods are free to everyone? The NHS is something they've loathed from the beginning because of its socialist roots, but they can't attack it directly because of its popularity.
You say such Tories don't exist. I say you're lying.
2. Education.
On this blog private education is most likely to bring out partisan warfare, split right down party lines. I personally don't care about private education since it affects a tiny 6 per cent minority, but virtually every Tory I know seems to have radical opinions about state education, often without sending their children there.
I know from various speeches Oliver Letwin and others have made, the comprehensive system is the target of much of their thinking. I have no problems with reform, or indeed setting and streaming. The voucher system may or may not bypass the bureacracies of LEAs, and may be subtly engineered not to create greater educational inequalities across the country. But just like free universal health care, the universality and equality of modern education is anathema to many of the Tories I know. They would basically like to see the whole of education privatised.
You may not be among that number. But to deny this is a strong strand of Tory thinking is yet again a lie.
Finally, you flatter me Bill, by putting me in the company of Blair and Brown, and suggesting I've converted you to voting Tory. It's a predictable attack - you've lost my vote - but if you are a recent Tory, it might explain your ignorance about how so many of the membership think.
You're clearly at a loss to understand debate when you complain that referencing people's expressed opinions is 'playing the man'. I refer you to a line I once said before about a growing a pair.
You still vaunt erroneous WHO data on the NHS (from 1998), interpret the figures in the worst possible light to claim that being in the top five to ten percent of healthcare systems (in 1998) means we are not world class.
I don't know why you do this, unless to propound the Singapore model of healthcare, which would create another tier of bureaucracy, and functions in a small economically liberal but socially authoritarian island. These are YOUR policy proposals, and they do not bear much inspection.
And stop playing the Nazi card. You, like Hannan, want to withdraw from the EU too. How does that make you a Nazi? I never said it did, so unless there's something in your wardrobe you're ashamed of, stop making stupid stuff up.
I'm now away for a week from an internet connection. So if I don't reply, rest assured it's not because I don't have response
I voted for Blair, God help me. The mendacity demonstrated by him, his successor and yourself is the main reason I'll be voting Tory.
Tory want to end the NHS - that last desperate tactic of the political left.
As for your other accusations we are automatons that trot out the party line or are eye-swivelling mad far-righters that keep a Nazi uniform in the wardrobe just in case.
Let me know when you actually have some policy ideas and want to stop playing the man.
Wow. That drew the Tories out of the woodwork. It's hardly moving the goalposts defining what I meant by the end the NHS (insurance based) or Comprehensive education (voucher based) or the constant refrains about immigration.
I explicitly didn't say these were Tory party policies, but they represent what the bulk of self defined Tories say here. I also didn't say that all Tories held all these views, and they clearly differ from Cameron's position. But then again, that was exactly my point. Cameron does not represent mainstream conversative opinion as I've encountered it
So Bill I think that's three strawmen of yours now lying in the dust.
As for your last sentence "the only people I know who want to withdraw from the EU" you omit the rights current Powellite hero - Daniel Hannan - from that list. Some forty percent of the Conservative party in a recent poll wanted full and immediate withdrawal too.
When you've finished lying let me know.
His initial set of accusations (my bold):
"With the Tories, no matter how 'nice' their front bench may seem, the posters here confirm my suspicions about the old nasty party. Look around, and the majority Tory posters want to leave the EU, ban immigration (except for anglo saxon types): they want an end to universal health care and free universal education. They despise any kind of equality...." etc etc.
His "revised" set of accusations:
"If you beg to differ, do not want to withdraw from the EU, do not want much tighter immigration controls, do not want to dismantle comprehensive education, or go to an insurance based Health system (like Singapore)...
Please speak up, Bill."
Can anyone else see a couple of differences in what he hopes will be taken as identical accusations?
In Peter's world of make-believe, "ban immigration" and "much tighter controls" are somehow synonymous, as are "end to free universal education"/"dismantle comprehensive education" (State grammar schools are free, Peter) and "end to universal health care"/"go to an insurance based system".(Singapore's system is universal, Peter, and they have the lowest infant mortality in the World- the UK is 32nd)
Non-sequiturs on top of strawmen. What false argument will you try next?
The only people I know of who want to withdraw from the EU are UKIP, the BNP and Bob Crowe's NO2EU Trot cadres. I want to stay in it and return it to being a free trade/customs co-operation zone as it was intended to be.
Was there anything else?
Anyway, the Guardian lead story made my day.
When I see Cameron I see someone who is hectoring and arrogant, someone who blames everyone else except himself. I also see an intellectual lightweight, someone who puts style over substance. As for "indecision", well what about a man who merely says "he is eccentric" about a high-profile party member who calls "a mistake" the institution that Cameron said was his main priority at last year's conference? That is a serious case of party indiscipline, Cameron bottled the decision to do something about Hannan. And what about Cameron's "we don't know what we will do about the Lisbon Treaty, but we will do something"? That is pathetic!
You really should stop inflating Cameron. We all know that you have a visceral hatred for Gordon Brown, but please do not give Cameron any more regard than he deserves.
Fighting an election on a green agenda is not only daft, it is plain suicidal. Not because the environment is not important, not even because the government have the wrong idea of how to tackle the problem, but because the electorate have more pressing matters to mind. Notice the huge fall in organic product sales? They are now percieved as a luxury that is ill-afforded by a worried nation. If the country was as green as the government makes out, people would cease to by alcohol or cigarettes in favour of organic products when times are tough, but they don't. They rid themselves of what they percieve as luxury items first, and remarkably that isn't the bottle of wine or the 20 benson and hedges.
We are certainly defining green shoots differently in respect of timing. I understand the government definition, but when there is even a small growth, the government will announce recovery and green shoots immediately. This will give the wrong impression and certainly those green shoots won't be felt by the electorate for a good time after the government announce it. This is what I mean about false hope. People will expect things to get better immediately, but it doesn't work like that at all.
By true Labour policy, I mean life changing policy. The vote for women wasn't a small thing, it was over half the population at the time it was brought in, so it was a majority policy that was very hard to argue with. Over 50% of the nation could not vote simply through how they were born. Likewise the NHS, it was a majority policy which has touched the lives of countless millions and has changed the face of Britain forever. Its not just policy though, arguing against the oppression of people, arguing the corner of the British worker and investing in a strong industrial base, all Labour.
The problem is, whether it is the case or not, it is not how Labour are percieved now. Labour seem to now concentrate heavily on the minority, more so than the majority and unfortunately that perception in a democracy makes Labour virtually unelectable. Policies that should not have a red rosette anywhere near them are being announced or considered and the once proud democratic stance that Labour politicians could argue from has been eroded by constant legislation that is wholly unnecessary in my humble opinion.
In '97 I expected Labour to be radical in its approach to the problems we had in this country. Many in the Labour Party at the time told me that I would be pleased with what would happen in the next decade, but a decade later Tony Blair was pushed out after promising a full term, GB was ousted on us unapposed and to make matters worse, a year later the twice resigned and disgraced Mandleson was undemocratically brought in to the cabinet as what amounts to GB's number two. Policy after policy has been put in place, law after law and then we discover that the people who should be fighting for the working people have been stealing from them all along, from a KitKat to second homes that provide a nice little earner to those who can claim enough.
We do disagree on some very basic issues, but my questions were meant to see how you percieved the future, particularly the near future, and it turns out we actually disagree on some very fundamental issues. 10,000 apprenticeships may well be a good start, but it is not radical enough. Negociating with industry and business can't work at the moment because as many of the top business people are saying, the country is stiffled by legislation and the policies announced by GB, and this is the real crux of the matter, are not good enough tools in themselves to win an election. In fact, Labour would be lucky to win a by-election based on the policies announced.
Maybe I'm misguided, wrong or just plain daft, only time will tell, but I've watched and listened very carefully over the past couple of years. Unfortunately the Labour Party haven't.
I'm not a Tory although I will be voting for the Tories at the next election after voting for Labour since 1997.
So let me reply to you:
"want to leave the EU"
Not me. I'm pro europe as a international trading body. What I'm against is a federalist state. And thanks to Labour thats what we are now in.
"ban immigration (except for anglo saxon types)"
This is such a old stereotype of tories its become a bit of a joke. Personally I love the bnefits immigration gives this country. We are practically a country of immigrants so what have we to complain about?
Except the problem is that we don't have the infrastructure or the land mass to support more and more people. We are at 61 million. Our country is creaking. And I dont want to see more rampant building of "anywhere UK" housing estates.
Its about balance. Getting the right mix of skills from abroad while also supporting countries abroad to improve opportunities for others.
"they want an end to universal health care"
Another glib sentence that has no foundation in reality. I love the NHS. So do all the Tories I speak to. What I object to is waste. And productivity under Labour has dipped significantly. We still have large gaps in our services. We need to define exactly what the NHS should and shouldn't cater for.
"free universal education"
You appear to misunderstand the concept of "free". It isnt free. I see no evidence that anyone wants to remove the availability of state funded education. Sadly Labour has undermined our system over the last decade to the point of us becoming uncompetitive.
"They despise any kind of equality"
Total and utter tosh. If you want inequality take a long hard look at Labour policy.
It's fair to say that most members of my Local Conservative Party Association want to nuke mainland Europe. One of them even refuses to eat brown-skinned babies.
Not many socialists either.
A dozen or so individuals who choose to comment on a Labour blog, who are probably not even party members and definitely aren't MPs is hardly a representative sample. In any case, unless you want to argue that withdrawal from the EU or a Singapore health system are likely to be policies of the Conservatives if they get in, I'm not sure what point people who keep coming back to this hope to make.
If you beg to differ, do not want to withdraw from the EU, do not want much tighter immigration controls, do not want to dismantle comprehensive education, or go to an insurance based Health system (like Singapore)...
Please speak up, Bill.
Because these policies are the Tory norms here, regularly touted by the fanboys of Daniel Hannan. If you haven't seen them, you haven't been paying attention. You think I'm making this up? I politely retort you're speaking out of your fundament.
As I've stressed over and over, the one nation Tories are stunning by their absence. Maybe they're just quiet. Or maybe they're a tiny minority these days.
http://www.guardian.co.uk/politics/2009/oct/09/taxpayers-alliance-director-tax
and if this was labour imagine the furore if we had been connected with a 'commie group'. But of course this is largely ignored never mind the influence of Ashcroft, the Midland Industrial Council etc.
We have to challenge these and we have to do this loudly and confidently.
Far from seeming like an angry madman, you want answers to a very legitimate question. Labour does need, in the run up to the general election, to spell out more precisely what they will do. I don't know what they will say, but much of the focus will have to be on the green economy. I'm sure you scoff, but it's a pertinent example as it will be based on transforming the manufacturing industry: so I would hope your coal miner/IT worker fears might be allayed. Much will have to be in supporting businesses to be able to provide job opportunities and we saw the beginning of this in Brown's speech with the promise to work with businesses to create 10,000 new apprenticeships in small businesses.
I can't speak for the gov't. I agree with you we need some firm proof of action: we have the beginning, in both the things I said above. As for your point about being a truly "labour" policy, I don't think I quite understand what you mean. Do I think we should nationalise industry to force it to create jobs? No, I believe firmly that much of a gov't's work is done by negotiation, rather than statutory force (but not all). If Labour can facilitate firms with direct support, it can work. This is very different from a Tory gov't which would rely on the trickle down effect of lower taxation, without realising that this will not necessarily result in more jobs, and certianly not quickly. So I do think that this is a Labour policy and I don't think a Labour policy would have to rely on nationalisation (though it certainly can be successfully employed to save jobs and force change in some businesses providing public services).
It seems, though, that we are defining green shoots differently. Green shoots are the product of a seed (gov't action on the economy) and grow into plants (a recovered economy). Green shoots are therefore the beginning of recovery and signs for real hope, not false hope. They show that things are back on track. What makes green shoots wilt and die is when the path is diverted by backwards gov't policies such as swingeing cuts. This has too often in history been the case, a right wing gov't has come in after a spending left wing one, on the same arguments the Tories are using now, and this has turned things to the worse. After you start spending (as you should) you have to see it through and get growth going.
I apologise if this is badly constructed reply: I wanted to reply but Blackberries have screens the size of a peanut! Although we may disagree, it's been good to have some constructive debate for a change.You won't find me disagreeing that the gov't has to provide a positive message showing they can do it, in fact that's what this article's all about, but you will find me disagreeing over whether i think they can do it.
"Apart from being patently false (a point dealt with in several other LabourList posts), this lie gets its sting from the possibility of becoming true."
A lie, by definition, can never be or become true. It may become generally accepted as 'conventional wisdom', but 'true' : never.
tax credits - great idea
pension payments linked back to inflation plu winter fuel allowance etc.
Min wage which even the Tories now accept
the improvements are astounding in the public sector, forget what the Tories and Mail say, we should be very proud
But we have to fight the tories against the negativism and we have to show a new way forward, the liason with the City worked to start with and now failed so a new direction.
Plenty out there want it but are they listening ?
Human dignity is all.
The present generation of Conservatives has no feeling for human dignity ; and, yes, Labour has not been entirely successful in this regard since 1997.
What % of the Tory party do you think Daniel Hannan represents ?
This is not a call to go back to the core vote but to find polcies to fight the Tories against which shows the marked differences
Ditch ID cards for good
Ditch Trident replacement
Keep VAT at 15% for good
encourage green buisness's by massive tax breaks
Yes cut some things but ensure front line services are never affected
Time given for withdrawl out of Afghanistan
clearly state tax rises, for example raise basic rate but have a £10k starting level which will enable tax credits for some to be phased out
Encourages councils to build houses and not sell them, pledge to decrease the % of owner occupiers
give the FSA real teeth in regulation, and make sure the banks never go below a certain asset level
regulate mortgages to just 90% of value
Mortgages to just 3.5 times income
etc.
"In simple taxation terms you and I may benefit from a Tory administration (though not me on my current earnings)."
Ah, poor b*gger -:)
But the great thing that separates you and me from the Guy M's and Mike Thomas' (and Paul Pinfields) of this world is that we don't actually mind paying a bit more tax.
These aforementioned contributors to this site 'know the price of everything and the value of nothing.'
Peter, you share much with the Labour leadership, including a "flexible" approach to telling the truth. You are in fact just another Labour liar. Do Tories eat babies too?
With the Tories, no matter how 'nice' their front bench may seem, the posters here confirm my suspicions about the old nasty party. Look around, and the majority Tory posters want to leave the EU, ban immigration (except for anglo saxon types): they want an end to universal health care and free universal education. They despise any kind of equality - even if that means equality before the law (anti discrimination) or equality of opportunity - because anything that adheres to the Declaration of Independence 'all men were created equal' smacks to them of Stalinism.
LL is a great education on why the right should never gain a big political majority in this country, and why we must make sure Cameron is too vulnerable to accede to their ultra Thatcherite agenda
Philip Stephens wrote a first-class article in the FT today : 'Enough of the politics of pessimism' and in it, he said, "For all its troubles, the Britain of my experience does not seem to be sliding into economic and social chaos."
Conservatives are peddling the politics of fear and pessimism. Much of the media (and business) is following them because media and business regard the Conservatives as the winner in the general election ; that's human nature (albeit inadequate as a guiding light) ; it does not make it right.
The latest example of the Conservatives is the number of 'pen-pusing bureaucrats' in the MoD being greater than the our Royal Army trained strength. As a proportion ('pen-pushing bureaucrats' vs actual 'fighting personnel'), the ratio in 2008 was less than it was in 1997.
The thing that really annoys me is that Labour ministers have all the facts at their fingertips (well, as quickly as 'tell me, Sir Humhrey' will receive an answer) and they do diddly-squat to refute Conservative allegations.
The land that your house sits on does not belong to you ; all you have acquired are the freehold rights on the land, granted by laws passed over the years.
All land in this green and pleasant land of ours is owned by the Crown ('er in Buck House ; pragmatically, by government) and the Crown (ie government, of whatever political persuasion) may, at any time, use that land for whatever purpose it deems appropriate. If you don't believe me, ask people who had compulsory purchase forced on them so that a new highway could be constructed.
Morality and law are not always complimentary.
The thing is and we all know this, that Daniel Hannan, John Redwood, IDS, Nadine Dorres (should I mention her, ha ha ha )all represent the true face of the Tories.
that is why we have to fight as hard as we can to protect all those people who need the state's help because they are not in the lucky position like myself of a good wage in a solid job.
BTW: I think Daniel Hannan is basically John Redwood without the ears.
but the last sentence is all remembering Redwood is in a position of influence within the Tories.
'and relax the banking capital requirements for the short term.'
that is the EXACT same policy he is advocating for a recession that got us in the mess in the first place, their policies in the first place got us into the mess and labour's mistake was not changing them enough to crack down.
when I did my Economics studies I was always told Banks were supposed to hold in assets what they would have to pay out, surely lessons just HAVE to be learnt not to repeat history.
this bit in his blog explains everything about where he stands
A businessman by background, he has been a director of NM Rothschild merchant bank
Dialogue of the deaf, I'm afraid.
You think your privileged property rights come without obligations to the society which confers the privilege on you. I don't, but that's irrelevant because I'm not trying to impose anything on you or anyone else.
If people see a benefit in co-ownership of property - and I believe that the financial logic is compelling - then they will use it.
If I'm wrong, and they don't see the benefit, then they won't join in.
End of story.
I know you didn't say Labour could create 2 million jobs, but that is the task ahead. What can Labour do to bring a sizeable number of jobs into the country? The unemployment figures are growing higher and higher, the dole queues getting longer, so what answers do Labour have to that?
Both political parties are going on about supporting people who are unemployed and helping them back into work, which is all very well when there is work to go to. The thing is, both parties know that there are no jobs, but both are going for the cheapshot tactic of cutting benefits where they can rather than looking at the long term good of the country. It sounds great to those in work that government will reduce the numbers on unemployment benefit, but that doesn't help the person who lost their job at Woolworths after working there all their life and it doesn't help someone who has worked in a carpet factory for 20 years only to find it is closing down and they are not qualified to do anything else.
Retrain them scream both parties! For what exactly? For when the green shoots appear and they can return to be warehouse or office fodder? Remember when the Conservatives attempted to retrain miners to be office workers, teaching them how to use spreadsheets? That worked didn't it? A guy is hammering at a coal face one week, the next he's being told to use a piece of electronic equipment to make pretty boxes and numbers in an office.
Stick it to the Conservatives, fine, but my point is Labour have no come up with a credible alternative to the electorate and virtually everything said is taken with a pinch of salt due to letdowns (to put it mildly) over previous manifesto pledges. Even if GB announced the nationalisation of the power companies, the water companies and the railways, the voters would want it done before the general election in case GB is having another one of his mad days, like the one where he promised no more spin from Downing Street.
So the question really is Tim, what will Labour do? I don't want you to come back with a soundbite policy, what have Labour given to the British people to convince them that Labour can and will make this country financially viable and sustainable? Are there any policies that can be truely defined as a Labour policy?
Incidently, kudos to you for actually getting stuck in and replying. I know I seem like an angry madman with a tendancy to drone on for hours, I probably am, but I do appreciate you discussing this sensibly.
The failure of the Thatcher government to control the money supply really should have put monetarist economics to bed - permanently
I have not said that we can create 2 million jobs at the drop of a hat. Green shoots are what they say they are: the beginnings of progress. That is what we have to recognise and get across to voters.
Great Britain plc should of course pay its debt, but this need relate only to its working capital. In the case of a country, that is the credit necessary for goods and services to circulate, and for productive assets to be created.
GB plc Equity, on the other hand should relate to fixed capital in the form of productive assets owned by GB Limited. As I am sure you know, equity need not be, and is rarely, if ever, repaid but it does pay a dividend to the shareholders.
is it even worth bothering to point out that it as real as a credit card debt?
Not really, Sue, because you don't buy a house with a credit card, and neither should you borrow long term to finance public assets, when you can bring in pension investors instead to buy Units of Public Equity.
Although it may be conventional, there is no need for the public sector to borrow to finance - say - productive investment in public assets, such as railways, roads, bridges and so on, as I pointed out here A Bridge Too Far
Utilities such as broadcasting, water and energy infrastructure should IMHO also be in public stewardship, but operated by a service provider consortium. Private service providers who pay a return to unproductive shareholders would actually be at a competitive disadvantage. Shame.
The longer we put off paying off capital, the larger the debt grows. Admittedly a major problem, since we're struggling to make the monthly repayments at the moment!!! The true scale of the debt is too horrible to contemplate, since by additing in PFI and the unfunded liability in public sector pension funds, the national debt comes to about 104% of GDP.
Why on earth should we pay off capital in respect of a sunk cost with a long term use? It may be conventional, but it's nonsense. By all means pay into a sinking fund to replace or upgrade a depreciating asset, but the land/location which underpins most public assets doesn't depreciate, does it, so why must we repay debt in respect of it?
As with the Humber Bridge example, it is quite straightforward to refinance debt with a new form of equity within a partnership framework - ie equity - but not the decidely inequitable form of shareholder value style Equity we are used to.
`Banks will not lend due to a shortage of capital, and the absence of creditworthy people, projects and enterprises. When they do lend, the rates are entirely disconnected from BoE rates.'
And if you consider us the country as a company called Great Britain Ltd, your statement sums up nicely why we'll be knocking on the doors of the IMF shortly, if cuts are not made soon. And if you remember the last time that happened, under a Labour Government, they imposed the cuts that the UK government had been too slow to implement.
As to your earlier statement dismissing the National Debt as an `unrepayable fantasy', is it even worth bothering to point out that it as real as a credit card debt? It is owed by pension funds, banks and other countries (such as China). The longer we put off paying off capital, the larger the debt grows. Admittedly a major problem, since we're struggling to make the monthly repayments at the moment!!! The true scale of the debt is too horrible to contemplate, since by additing in PFI and the unfunded liability in public sector pension funds, the national debt comes to about 104% of GDP.
A reply to your earlier post
You say:
"It's just that at the moment you are benefiting from privileges - of exclusive use of location, and limited liability respectively - for which you give nothing in return."
Yes I do "give in return". Firstly I "gave" to acquire the wealth in the first place to invest in property and shares.
Secondly I "give" in terms of share ownership in that my investment can decrease (or be virtually wiped out in a company failure) and I "give" by passing up other investment opportunities (opportunity cost) to let an organisation make use of my investment at a risk to me.
With regard to property I have paid for the "right" to own my property and no other individual has a moral cal upon my property. This is where you and I sharply diverge. The family sitting in the council house down the road has no moral call on my property, is not done down by my ownership nor do they have any ethical complaint over my purchase.
I "gave" by investing in property and I "give" by paying to maintain the proerty to the benefit of the surrounding area.
I totally reject the idea that you or anyone else have call upon my property and let's make this clear again the aspirational classes who wish also to own property will reject your idea out of hand.
This is a poor straw man even by your standards.
Where have I ever said there should be no return on an investment in UK Plc?
Of course there should, but that return should be in the form of a dividend from a form of National Equity based upon the Commonwealth.
As opposed to "interest" on an Alice-in-Wonderland National Debt which anyone who understands the system knows is structurally unrepayable.
He is continuing to run up the deficit via Quantitative Easing for political purposes.
QE does not run up the deficit. The government does, and QE assists in funding it.
I see you are a fan of Mr Redwood.
Hog all the available cash" indicates that Mr Redwood doesn't get it, either. There is infinite cash available: the questions are what it should be created and used for, and who should create it.
QE merely replaces with publicly created credit the crazy credit created privately to inflate the property bubble and now draining out of the collapsing system. This QE credit=money cannot and will not enter the economy unless is is lent or spent into circulation.
Banks will not lend due to a shortage of capital, and the absence of creditworthy people, projects and enterprises. When they do lend, the rates are entirely disconnected from BoE rates.
The BoE is currently as much use as a chocolate teapot. It is pushing on a piece of string. No monetary tools can work, when the problems are fiscal.
Neither New Labour nor Tories will spend for purely ideological reasons, inextricably entwined with the absence of a sustainable fiscal system and the need for systemic fiscal reform.
Job creation under the present climate is unlikely to happen under Labour or the Conservatives. Neither have a clue how to build 2 million new jobs into the economy and both are concentrating on distraction techniques. Train all the young people you like, but without a good, viable and sustainable job at the end, its a waste of time. You can not say that Labour will guarantee jobs, nobody can and to say it is making yourself look rather silly to say the least. All Labour can do is hope and pray that something comes along, because as far as viable and sustainable future jobs go, Labour haven't the first clue where to start.
Lose the Party line for a moment and explain to me where you think 2 million jobs, 2 million sustainable jobs can be created? And tell me why you think there is a future in a so-called green economy when the electorate are so resistant to the taxes needed for said economy? And please please please don't make the mistake of mentioning wind mills or we'll be stuck on it all day.
I simply don't believe a word Gordon says. (Too many lies. Too few apologies. Too many crass decisions to save political face)
He is continuing to run up the deficit via Quantitative Easing for political purposes.
"QE has been great for a government wishing to hog all the available cash in a pre election year without driving up its own borrowing rate too much.
When we stop QE we will find out the true cost of government borrowing. It has done nothing to ease credit for the cash starved private sector. Banks offer very different deposit and loan rates for the private sector, divorced from the artificial money and government bond market rates.
QE has helped push up share and bond prices which helps confidence in assets amongst investors.
QE is helping drive down the pound, which might in due course assist in correcting the balance of payments deficit. The absence of action to tackle the government deficit, coupled with the amount of money being created is bad for overall confidence and bad for the value of the currency."
The BBC only allow Vince Cable on to critique government finances. George Osborne is too chicken to rock the boat before an election, so it is pointless listening to him.
The only person I trust is the man who is frozen out of front line politics and just speaks his mind........
The only person I trust is the man who is frozen out of front line politics and just speaks his mind........
Wait and see the uproar that generates.
Robinson on the DAily Politics was at the same time both attacking the Tories for not fully dealing with the cuts needed and also attacking the Tories for making the cuts.
Expect more of this stupidity when the Labour budgetary plans come out.
"The fantasy complete, everybody worried about money. So everything falls to bits, rubbish, it only gives us something to centre on. This happens regularly, it is not the first time we have run out of money. And it wont be the last.Only thing is it will be better for the working people if we go through it with labour."
I suggest you look at the interest repayments on the debt, the cuts in spending to manage the det that will mean your precious Labour government culling jobs etc.
Then come back and imply reckless spending and running up of debt doesn't matter.
And there, your first paragraph made me think I'd won someone over!
I have to say though, you say that green shoots matter 'jot', but then say that when the electorate stop losing their jobs and enw ones are created. What is that if not evidence of recovery, i.e. green shoots. I agree that recovery is not a purely economic thing and that job creation is key to winning over the electorate: they are the green shoots we need. I also happen to think that the green economy, guaranteed jobs for young people will show that people can trust Labour to help in getting to that point.
I'm sorry, but the countries that I used as examples were in fact victims of savage Freidman-inspired cuts in public services, unemployment rocketed, along with inflation. Gov't imposing the cuts spent money on bailing out financial institutions (mostly foreign creditors) and not on ensuring employment and the financial security of citizens.
Yes lets default on our interest payments.. and the pound collapses and food prices double and petrol trebles. and lots of OAPs die.
Debt used for investment in productive capacity does not matter, and in a debt-based economy there has been no alternative for the public sector. Debt incurred to pay unproductive bureaucrats and consultants in either the public or private sectors is wasted.
I responded to you at length yesterday in respect of your misunderstanding - shared with many - of how the system works.
"The government is printing money and demanding too much from the lending banks (they are required to hold increased levels of government debt and are crippled from lending to the private sector which would stimulate the economy through lending)."
Banks are awash with liquidity - they have enormous excess reserves they hold (at 0.5%) with the Bank of England.
Because they wish to maintain their solvency they are not prepared to lend to people, projects and enterprises they perceive as not credit-worthy. There will be no recovery in the UK without systemic fiscal reform.
That is no more likely under the Tories than it is under New Labour. Cuts in productive capacity, either in the private or public sectors, are the last thing we need.
And please do not trot out the usual crap that the public sector is not "productive" - of course it is.
So if the debt doesnt matter then why are the labour goverment cutting spending ? Ed balls said he was cutting education then Gordon said we wasnt? and then we will stop all unesscery spending ? why are we spending money that we dont need to spend ?
ricki
Applied to individuals, I agree with you. But neither the UK nor any other government is a domestic household, and household economics do not apply.
In our current system, money is debt, and debt is money. Repay the debt, and money is destroyed.
Have you never heard of equity, Guy? It's not debt.
If your balance sheet contains equity, why should not the national balance sheet? You account for both the mortgage and the house, don't you? How come UK Plc does not?
Why is a "national debt" necessary? It is an unrepayable accounting fantasy, and we should recognise that fact.
No, sorry, I don't agree.
The US New Deal did not work, the '37-38 dip shows that.
Additional stimulus beyond the automatic stabilisers injects inflation into a system that structurally cannot take more inflation. Servicing the interest then becomes a problem; austerity cuts follow as a result of serious risk or occurrence of default or near-default.
Every single one of the example you cite were countries thinking they could spend their way out of trouble.
As for hitting purchasing power, what did the 10p tax hike do? You lost any credibility of compassion for low and middle incomes then.
In terms of economic track record, it simply isn't with the Labour Party. I'll leave you with these words....
"We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists, and in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step."
Have you see what's happened to factory gate prices in today's news?
And you are printing money to further put fuel on the flames....
To use the tactic of a broken Britain is one thing, but if Labour attempt to show the pain that will needed to fix the problems, whether Britain is broken or not, the electorate will hit Labour over the head with the line "But you got us here!" and whether that is right or wrong, it is the common perception.
The second problem with this war of words is an issue of trust. I've yet to meet anyone who trusts GB wholeheartedly. Everyone is doubtful over his leadership, whether it is because he is so obvious with his lies or even to the truely faithful, his dithering when it comes to the big decisions. That dithering by the way allows the Conservatives to claim the higher ground time and time again. The electorate are not blind lemmings, they remember all the times GB has dithered, the Conservatives have announced what they would do, then GB has copied rather than making his own mind up or showing any sort of credible leadership.
I'm sure many will be tired of me going after GB, but he is the problem at the heart of why an election campaign will be so difficult this time around. You can kid yourself it is about policy, but there is barely a cigarette paper between the policies of Labour and the Conservatives on several important issues. Both parties know there needs to be vicious cuts, so the language has changed, the posturing is now different and the policies have been adapted to allow movement in the future when the existing ideas don't go far enough. The real issue isn't who will give the most, who will cut the least, but who will be the one to lead this country.
Look seriously at GB and Cameron. Who appears to be the statesman? Which one has a hissy fit in even the most tame of interviews? Which one dithers on decisions? Or even the most basic, which a politician shouldn't be judged on but they are, which one has the most amount of visual ticks? You may disagree with me, but if the television debates go ahead, the stark contrast between the two party leaders will be there on your television screen and the electorate will be watching, listening and unfortunately laughing at what Labour have put up to fight the cause.
You say its about facts Tim? Not really, it never has been about fact. The reason it has never been about fact is the electorate now know since the expenses scandal that politicians of all sides will jiggle things around in circular motions until the so-called facts fit what they want to say. Remember "It was all within the rules"? Remember "I have done nothing wrong"? So you may as well forget the factual approach, the Conservatives have already realised that and are now working on the idea that by tapping into the widely held view that Britain needs fixing because of mess caused by Labour they can strike a cord with voters. And Tim, it is working for them. The electorate, those old enough to remember, know what happened in '76 under Labour. They remember '78 under Labour and unfortunately the events of '07 and '08 have brought back memories. Even the postal strike, although completely different to the events of '78 is causing people to say some wierd and wonderful things on the streets of Britain.
Green shoots matter jot. Until the electorate stop losing jobs, until there are new jobs to replace the old ones and people don't fear what will happen to them under the ludicrous welfare reforms proposed by both sides, economic recovery will not have any influence over the general election. What will have an effect though is Conservative tactics, the overall plan and few have actually seen what that is yet.
They propose welfare reform, first proposed by Labour. Labour can not say a word about it, because its what they were going to do. Inheritance tax, first proposed by Labour. Labour can not say a word about it, because its what tehy were going to do. Pay freezes, very quickly proposed by Darling. Labour can not say a word about it, because its what they are actually doing as well. Are we seeing a pattern yet? Should I carry on for another two paragraphs on a similar track?
Without meaning to sound like a stuck record, GB is the primary problem. The electorate don't believe a word he says on anything, let alone believe anything he says as fact. "No more boom and bust" Yes of course I was going to bring that up because it defines GB. He's a liar, a cheat and a swindler. For every two steps the Labour activists take forward, GB will ensure you go back three steps with the electorate. So what is the answer Tim? It is staring you, all the other Labour activists and the PLP in the face. What can Labour do to increase their chances at the general election?
"Hoping" is not an option.
There will be no sustained recovery until markets and lenders see the deficit is being brought under control.
The government is printing money and demanding too much from the lending banks (they are required to hold increased levels of government debt and are crippled from lending to the private sector which would stimulate the economy through lending).
The recovery in this country in the private sector is weaker than in other countries. The private sector weakness is driven by uncertainty with respect how many more bills it is expected to take on from the public sector.
Labour's present policy is purely based around the election. It is doing nothing for sustained recovery and therefore sustained job security.
The deficit and Labour's electioneering are at the heart of all our problems.
Please just call an election so we can get the "real recovery" underway..........
David Cameron is not Gordon Brown and that obvious fact is all that Cameron requires to win the next general election. Policy announcements from the current government seem to count less now than I can ever remember, because the electorate do not believe anything Gordon Brown has to say; he's reneged on so many pledges and promises in the past that he's become completely discredited. Still, Gordon will go down in history as only the second Labour Prime Minister never to win an election, Jim Callaghan having beaten him to the punch in 1979.
If you invest in land/location then you are entitled to a return on that investment. If you invest in an enterprise, then you are entitled to a return on that investment commensurate with the risks.
No problem. It's just that at the moment you are benefiting from privileges - of exclusive use of location, and limited liability respectively - for which you give nothing in return.
In my opinion, you should pay society - not the State - in respect of those privileges, in view of the investment of society in making those privileges valuable.
I am interested in how such investments and returns may be made in a sustainable - and increasingly networked - economy.
Do you think our society is sustainable, Guy? And as a committed environmentalist, do you believe that limitless economic growth is consistent with our survival? Do you not realise that it is the system of financial capital - of which your beloved property rights are a core component - which, combined with human greed, have put us in the shit we're in?
"You actually think the National Debt can and should be paid back."
I generally think that if you borrow from someone you should pay it back.
I know you'd like the UK to refuse to repay its loans as this would probably bring down the international finance system but most of us think this a mad and unethical idea.
Glad you were listening enough to tell me noone's listening. A first year GCSE student might come to the same conclusion as George Osborne, but that would be because they haven't had the chance to learn enough to tackle the situation. What is Mr Osborne's excuse?
The economy has not yet recovered fully, but it's only a year since the collapse of the banks: the work is not done yet. If we cut now (and Gov't cuts will be lower, less drastic and come after the beginning of proper growth) it will stop economic growth. It would be like a business taking on a loan so it could increase production and immmediately selling of its factory to pay back the loan straight away: production bombs, everyone's poorer.
The 'cut now/debt bad' mentality is persistent, despite its constant failure. History shows us that borrowing and spending works (e.g. US New Deal) and harsh cuts do not (e.g. several South American economies in the 70s and 80s, and Eastern European/former Soviet economies in the 90s, as well as the East Asian 'Tigers').
What is more, specifically about the Tory cut plans, is that they do not add up. Talk from conference was all about paying down the debt, yet the new policies that will require spending seem to be being funded by the cuts that are supposed to service debt-repayment. So where, then, will the money come from?
This is not to mention the fact that despite the fact that the Conservatives want to look compassionate and have, therefore, pledged not to hit the lowest wage-earners, they will pummell anyone above this. By removing the modest sums that are given to middle class families and people that earn just over £18,000, they will be hitting their purchasing power. Which will mean less is free for spending, and the economy will decline again.
If you cut and stop economic growth, what happens then? If people can't afford to spend because the social safety net has been removed from them before the country is properly back on its feet, what happens then?
Conservative economic thinking lacks forward thinking: it's paralysed by a fear of borrowing. That's why the Conservatives have got every economic decision since the beginning of the recession wrong and that's why their plans for the future are wrong too.
You actually think the National Debt can and should be paid back. You think that cuts will grow the economy. You think that finance capital actually adds value rather than existing to extract it.
By all means keep being a dog in a manger, defending the indefensible. The rest of society will simply route around you.
And what is even quasi-Marxist about the solutions I am putting forward other than that you find it a useful all purpose label for people who you disagree with?
The reason they are winning the arguement is because the voters dont belive a word our leadership says , they also think that our leadership treat voters like children .
Until we have a change of leadership and culture in the leadership we will not be listened to or belived .
ricki
Someone has to provide the investment and why should that not be me through shareholding?
Further if I move abroad to retire and keep my UK property why should I not charge a rent on the tenants?
In the shareholding example it's money I have earned and reinvested why is this wrong?
In the property example it is property I have bought, funded and now use as an "investment" why is this wrong?
Or are you saying that no one owning property should be allowed to rent it out and no one having money to invest should be allowed to?
It really is a crazy set of ideas you have.
"It is fanciful to the point of downright lies that this debt, the largest since records began, can be paid back with economic growth. It cannot."
Mike, you ignore the reality of a debt-based economy. It cannot be paid back. Period. To pay back the debt destroys the monetary base and leads directly to depression.
The best that can happen is that the debt shrinks relative to GDP as it has in the past, and New Labour, and the author, hope would do again.
"our economy is unproductive, our public services are unproductive."
Pure ideology.
You simply define the public sector as "unproductive" because you define productivity only in terms of private profit. By your logic a nurse is an unproductive drain on the productive private sector - ie shareholders - when she works in the public sector, and magically "productive" the minute she is working for shareholders.
Complete bollocks. In fact it is rentiers such as landlords and shareholders who are "unproductive". They, and their apologists like you, cheerfully tell us that Black is White, and we continue to swallow this - the biggest of the Big Lies.
I am no more of an advocate of the State than you - but unlike you, I see no need for rentiers either.
...... Will somebody please tell Mr Nicholls that nobody is listening. A first year GCSE maths student can work out the mess we are in and probably how we got here.
0.9% GDP in 2010. Against a budget deficit of 14%
3% GDP in 2011 (which is fanciful) Against a budget deficit of 11%
Then what?
Yep, even a Labour government starts cutting government spending by 7% over the course of the next Parliament.
It is fanciful to the point of downright lies that this debt, the largest since records began, can be paid back with economic growth.
It cannot.
Now Labour only last month were saying 'Tory cuts v Labour investment' when it's own Treasury figures indicated that a 7% reduction in government spending was in its own plans.
That's another bare-faced lie.
I do not doubt that: the best thing about false brinkmanship is that it can be countered by plain simple fact.
False brinkmanship, our debt is very large, our economy is unproductive, our public services are unproductive.
How is that false? Prove otherwise.
The result if this was allowed to continue we would be subjected to ever decreasing living standards, who suffers the most - the poor. They are already suffering from the result of Labour policies. Living standards that have already been in decline since 2005.
Plain and simple fact? You wouldn't know what a fact was if it came into your home and defecated on your sofa.
Lies though are a different matter.