Emergency budget: Labour reactions

Give me a break alex. I have posted three perfectly polite, reasonable and valid responses to jeff and b bendles questions but all have been rejected. Which golden rule was it that they were supposed to have fallen foul of?

Again, being posted in the middle of the night.

Its in the middle of the night because im abroad and theres a significant time difference. And ive posted three responses to this topic over the past three days so unless anything sent after a midnight deadline gets deleted these days shouldnt at least one of them shown up by now? Its not a debate if you only show one side.

I would like to complain also. You've started to publish stuff which gets responded to and then delete my. Whats that all about?

Lucky the leadership debates arent being run by LL. Otherwise the mikes would only work when their favourite candidate was speaking. Everyone else would be edited and paraphrased into comic book villians.

One of the many problems that this budget could have answered, but didn't. Is the issue of confidence, not just the international financial markets that the govt seem intent on pleaseing at all costs, but the issue of public/high street confidence. I may be wrong, but nowhere have I heard the Treasury talk about confidence.

Surely cutting public sector funding, will lead to thousands becoming unemployed and on welfare benefits. Now, I agree that we have to reduce the deficit and all that, but the point is confidence. Surely the fact that unemployed stats are rising, would lower confidence in Britain PLC just in itself. Also, with more unemployed comes more social breakdown, and with less benefits we could see financial poverty increase. All of which would call into question, the confidence of the country.

The phrase, "an attack on one, is an attack on all" springs to mind. As surely it would benefit the nation as a whole if they included some confidence boosting measures. It's all well and good cutting, but without confidence or hope within society then the whole emergency budget becomes meaningless.

@Jeff

Well said.
There are far more effective methods f getting people into work than proposed by ignorant greedy MP's in Parliament who can only judge people in society by their own attitude towards real work.

You have to build people up gradually and increase their activity cycle in a positive manner. Build thier confidence, their skills and then give them a decent job at the end of it. The technique to build people up is used in the military and it is very effective and positive. People working as individuals and as a team to accomplish a goal in a positive manner.

Thanks, Ralph, but I am only stating what used to be considered commonsensical Labour Party principle, as intimate a part of what we were, believed and stood for as the salt and oxygen flowing in our blood. I never believed it would ever have been possible for the Party to divorce itself so comprehensively from these fundamental principles. The last decade or so have proved me wrong.

It's nice to see an ocassional comment from you again on this site. Although you must be very busy your humanity, courage, common sense, decency and honour have been missed by many of the "old guard" who still visit and comment sometimes on LabourList.

If you have the leisure, don't be a stranger.

@Jeff

Never unerestimate the ruthlessness, greed and short-term stupidity of the old Labour Cabinet and the MP's who took the mickey out of the public by taking all the credit for being in their elected positions as if they had somehow "earned" the right.

It is a special kind of stupidity.

As far as my colleagues on Barking and Dagenham Council are concerned those values are more pertinent today than they have ever been and I am proud to serve with them by serving first.

We have just declined a pay increase as councillors as recommended by some pointless governmnet body and are amongst the lowest paid in London.

That is because we know and understand the pain many are going through and we will see it through with them as their representatives.

Couldn't agree more Ralph. This wisdom has been missing in those who are happy to see the admittedly excellent Eastern Immigrants we have here and merely compare them to our hapless youths, chavs, scroungers etc. Some of them may be just that, but they are our hapless youths, chavs and dole scroungers and we need to help them. It will take understanding and effort to get some of these people who are used to a life or either enforced or voluntary idleness firing on all cylinders.

It surprises me that many on the left, full of compassion for the underprivileged look afar for fodder when so much is beneath their feet.

Is it true that Gordon Brown didn't bother to turn up at the House of Commons to hear Osborne's budget statement yesterday? Isn't it form for a defeated Prime Minister to make a speech following such a statement, defending his record and offering a critique of the economic policies of the incoming government?

I didn't see Gordon Brown in the House of Commons or hear his name mentioned at any time before or after Osborne's speech, which, I am sure heralds the start of a process that will end up causing huge suffering to armies of the most vulnerable and helpless men, women and families throughout the United Kingdom. Benefit uprating is planned to be pegged to the consumer price index, rather than the retail price index, which will mean much smaller increases in benefits, leading to the poor and the struggling getting poorer and having to struggle even more to keep their heads above water and to survive. The idea that "we're all in it together" will soon be dispelled when it becomes patently obvious that the poor and needy are destined to end up much deeper "in it" and pay the price for economic failure disproportionately more than the monied and the comfortably off.

People haven't yet realised just how nasty some of these proposals are.

And all implemented with the help of Liberal Democrat collusion.

Changes to Housing Benefit in respect to capping and under-occupation will doubtless trigger a forced exodus of men, women and children from stable and formerly relatively secure households to - who knows what? With next to no social housing having been built by the last Labour Government and no fair-rent controls imposed on private landlords, when Housing Benefit is capped, where are the cities of cheaply available accommodation going to come from for people expelled from more expensive rented housing to move into as an alternative? For many of these poor souls there will be, literally, nowhere for them to go: their homelessness will be the price of Conservative and Labour housing policy failure from 1979 to 2010. (In my view the Labour Party is particularly despicable in this regard having promised extensive social housing programmes time after time before repeatedly braking its word and doing next to nothing despite the burning need.) With unemployment about to soar from April 2013, Housing Benefit awards will be reduced to 90 per cent of the initial award after 12 months for claimants receiving Jobseeker’s allowance. "We're all in this together." Well, George, I don't think we're all going to run the risk of ending up begging on the street because we can no longer pay the rent on a garret are we? So much for Cameron's undertaking to protect the poor who now seem destined to face a future of homelessness and workfare under the "compassionate" Conservative Party. And with 25% cuts in spending pencilled in for all government departments bar the NHS, schools and overseas development the mind boggles in respect to how much suffering innocent men and women will have to bear.

But where was Gordon Brown?

Why didn't he challenge any of these policies?

Is he still in the country?

My understanding is that jobseekers allowance and housing benefit are supposed to be a temporary crutch not a way of life and therefore limiting the duration of the 100% rate should only effect those that (for whatever reason) do not seek out and obtain employment within one year. Now of course this is predicated on the notion that there will actually be jobs for them to have (and a number of people on here are under the impression that unemployment will soar, something that i am not entirely convinced of but stand to be corrected). I think in general that allowing benefits like job seekers and housing benefit to go on indefinitely does disincentivise people to actually seek out employment. One argument I have heard many times is ''why should i go out and work when any job i get will only pay me a few pound more than i get on benefits anyway?'' there doesnt seem to be any recognition of the fact that these ''temporary'' benefits are not a god given right to be relied on forever. As a civil servant i would recieve full sick pay if i went on long term sickness, this reduces after 6 months and eventually cuts off altogether. Would it be fair if it did continue at 100% for as long as i wanted and when i was well enough to return to work i said ''why should i go back? I get paid the same for sitting at home?''. Obviously this doesnt apply to disability benefits which should be increased as much as practicable.

Perhaps one way to prevent the cuts adversely effecting the public services that we all rely on would be to give people claiming job seekers an alternative between a reduction in their payout (after 12 months)or a sort of community service where they are given the opportunity to work for the public sector in return for benefit topups? At least this would put their skills to good use and give them something to put on their cv to entice prospective employers. Just a thought.

So the unemployed on community service, like criminals you mean. Why not go the whole hog and build places where they can live, houses where they can work, yes we used to call them workhouses?

One argument I have heard many times is ''why should i go out and work when any job i get will only pay me a few pound more than i get on benefits anyway?''

It's interesting to hear you say that, because I worked with unemployed people and those employed to help them, and I can't recall hearing anyone who was actually on benefits say it once. When and where did you come across people making that argument?

Likewise, the working for the public sector - in theory this makes sense, but what sort of work exactly do you see them doing?

You sound like a very young man, Stephen. I say this because your point of view seems to me to be naive in a manner indicative of a lack of life experience. You seem to believe that the unemployed are homogeneous. They are not. They come in all shapes and sizes, races, ages, abilities and live in different parts of the country facing completely different problems requiring very different solutions. My understanding is that the 10% cut in Housing Benefit for the long-term unemployed is unconditional. The cut will be made to all and sundry irrespective of their age, how hard they have tried to find work, or their personal circumstances. As I understand it the cut in Housing Benefit is not intended as a sanction levied against people who refuse work, won't participate in training and other government sponsored job-seeking programmes, are reluctant to travel a fair travel-to-work distance in order to secure employment, or have turned-down low-paid, low-skilled or part-time jobs.

THE HOUSING BENEFIT CUT WILL NOT BE MADE BECAUSE PEOPLE ARE INTENT ON LIVING ON BENEFITS INDEFINITELY OR BECAUSE THEY HAVE NOT TRIED HARD ENOUGH TO FIND WORK. IT IS A MEASURE DESIGNED TO PUNISH INNOCENT AND WHOLLY BLAMELESS MEN, WOMEN AND FAMILIES FOR ENDING UP IN A SITUATION THAT IS FOR THE MOST PART COMPLETELY OUTSIDE OF THEIR CONTROL.

You might as well cut the housing benefit of diabetics because of their diabetes and desire to save money on insulin, syringes and needles. Such a policy won't make them well; it will only make them worse and suffer even more.

For concreteness let me give you and example to illustrate how unfair this coalition policy actually is Imagine a man or woman in their sixties who have worked all their lives before becoming made redundant. An experienced person in that age group will find it very, very hard to find alternative employment however low they set their sights: many people in this situation either remain unemployed for years or even until retirement. In my view a man or woman in that situation who has tried their very best to get another job, but failed because employers do not want to hire older workers approaching retirement, who then loses 10% of their housing benefit NOT because they have done anything wrong other than being rejected by employers in respect to the many job applications they have made over the past twelve months is in my view more than inhumane and cruel; in my view a completely heinous and heartless action like that is positively wicked. A person facing such a cut may well not be able to make up the money lost out of their Jobseeker's Allowance and may be forced out of their home, even ending up completely homeless and sleeping on the streets in the worst possible circumstances. From a nadir like that perhaps there might be no way back for such unfortunates to a normal life and they will be lost forever.

As far as workfare goes I wouldn't be so set against it if it paid the people on it the going rate for the job, i.e., at least the minimum wage, and offered them enough hours each week to make their work financially worthwhile. Making people work for their benefits stinks to high heaven. If a public or private employer couldn't exploit people like that why should the government be able to?

You could not make sick people better by threatening them with poverty any more than you can force the unemployed into gainful employment by a policy of impoverishment and starvation. This is an utterly miserable policy unworthy of any British government worth its salt. A policy like this will cause catastrophic, untold and unnecessary suffering to armies of vulnerable and helpless people least able to fend for themselves. With an anticipated 750,000 public sector workers set to lose their jobs over the next several years (I hope you won't be numbered among them) the competition for work is going to be fierce and many workers are going to be out-competed by younger job-seekers, unemployed themselves or currently in work.

As such the 10% cut in Housing Benefit for men and women unfortunate enough to have suffered one year of unemployment is pernicious, malicious and extraordinarily harsh, especially for a Tory government who innate cruelty has supposedly been tempered by their Liberal Democrat partners. The proposed Housing Benefit cuts are a truly diabolical policy spawned by a coalition that laughably trumpets fairness and a proportionate sharing of the deficit's pain while introducing a budget more regressive and unfair than any I can remember.

Abysmal and awful.

Although I bet James Purnell and John Hutton are cheering!

And I bet Caroline Flint is ecstatic! Hundreds, thousands, even tens of thousands of unemployed council and housing association tenants are going to be thrown out on to the street! We can all see now that Caroline was a woman ahead of her time although... erm... unfortunately... a member of the wrong political party it seems! But that was always true as far as Caroline Flint was concerned wasn't it?

A fair few actually both friends and family members. I live on a council estate and come from a low wage background. Through hard work my wife and i are finally now living comfortably but i spent years working low wage jobs such as retail security while i gathered the experience and qualifications to get where i am. And i didnt resort to living off benefits to do it which is why i am perhaps less forgiving of people i know who tell me it is demeaning to work in a shop or takeaway and they would prefer to sign on. Not saying this is the majority but as you asked me about my personal experience of benefits there it is.

So your friends and family are benefit scroungers?

The terms are unfortunate but the fact is i do have an aunt that had her first child at 16 and has never held down a job for more than a week since. Her kids are now 18 and 24. The 18 has never worked in her life despite leaving school at 16 with no gcses due to truancy and bad behaviour, the one that is 24 is qualified as an electrician but lost his first and only job due to not turning up because he was out clubing with friends the night before. These are examples of people i know who would benefit from a real incentive to work. In contrast i have a friend who was made redundant a couple of months ago that has been looking for work and in the meantime is claiming benefits to helpout until he gets another job. Which is what jobseekers is for.

I always thought that the incentive to work came from positive things associated with employment like status, wages and the possibility of progression or career advancement, not from fear of destitution, homelessness, poverty, disease and starvation. Or at least not in a supposedly advanced, civilised and humane European nation at the beginning of the twenty-first century.

You seem not to be considering the fate of perfectly respectable men and women, denied work, despite their best efforts. Are you honestly saying that innocent men and women facing unemployment should be threatened with ruin because they have been unable, despite all of their best efforts, to remedy the situation in which they find themselves, rooted in global economic failure and entirely outside of their control? You seem to be basing your blinkered views on a relatively small sample of badly behaved individuals, conflating their peculiar situation to include all of the unemployed, to justify inflicting the harshest penalties on millions of law-abiding decent people who have nothing whatsoever in common with the few bad apples you have picked on as examples.

This is, frankly, a ridiculous and poorly reasoned argument.

The proposed Conservative cruelties will affect ALL Jobseeker claimants. It will not matter if they attend their Jobcentre every day, make hundreds of applications by letter, telephone or email. It will not matter how many interviews they have or how hard they try to secure some kind - any kind! - of gainful employment. It will not matter how much training they agree to do, or how little money they will accept as an hourly rate, or how few hours they are willing to work. No matter how hard people in that dreadful position "work to find work" if they are unsuccessful and are rejected by employers - for being too old, too young, over-qualified, under-qualified, too experienced, not experienced enough; have a medical condition or children to look after or ageing relatives who need help and care; don't have a driving license or access to affordable transport - whatever - they will be penalised and run the very real risk of becoming homeless through no fault of their own. You must realise that innocence and guilt, or abuse of the system, will have nothing to do with the proposed cuts in benefits and therefore, to me and to many others, this whole sorry abusive Freud inspired mess stinks like a week old fish on ice.

You can take it from me that sweeping unjust Housing Benefit reforms such as those proposed by the Conservatives will cause unendurable suffering to hundreds of thousands of blameless men and women who deserve much better treatment from a supposedly compassionate country that cares about it citizens.

Hopefully as you mature you yourself will have a change of heart.

A little patronising and inaccurate. I expressly said that this was not the majority rather it was an example. I did propose some other options as well but. They seem to have gone missing and I don't have time to rehash it now.

Cheer up, son.

I'd be pleased if you would correct my inaccuracies and point out anything I have written anywhere that isn't factual or true. My back is broad so please feel free to patronise the hell out of me! I will emerge unscathed and unbowed! Scout's honour. I far as I can judge you seemed in favour of the 10% Housing Benefit dock as a way of "incentivising" the long-term unemployed into finding work. I don't remember seeing you write that the policy should be restricted to affect only a minority of malingerers rather than everybody, innocent and guilty alike, indiscriminately and unconditionally. Perhaps I missed something. If I did please accept my apology and be kind enough to point out to me exactly where I was mistaken.

A few years ago I would have said to you as a young man that "The world is your oyster." With the Conservative Party now intent on implementing economic nonsense coupled with a remorselessly unenlightened and cruel social policy I'm going to have to devalue this former prediction and I'm afraid you're going to have to settle for, "The world is your cockle" instead.

Cockle? Mussel? Whelk? Scallop?

Some kind of non-luxurious shellfish anyway.

But never oysters!

May good fortune favour you.

@chris cook

"It is indeed pathetic, and the tragedy is that Paul and his fellows actually believe the 'public sector unproductive; private sector productive' bollocks they continually parrot on this site."

I've been impressed in the past with what seems to me to be genuinely fresh thinking you have produced, especially as far as the housing sector is concerned. I admit that I don't follow every argument's logic, but I put that down to me, not you. However, your statement above seems odd.

I work in the public sector - I'm a hospital doctor. Clearly, my wages and the costs of what I do are paid by the state, but any good I can do in terms of saving lives and putting people back together to continue their lives also benefits society. But in a macro sense, surely the private sector has to be bigger than the state, or else as a country we'd fail. The state is a safety net onto which I'm delighted people can fall, but it cannot be an end to itself.

Perhaps there's a nuance: the public sector is "largely" unproductive in an economic sense, and the private sector is "largely" productive economically. Of course, in both camps there are exceptions: hedge funds, and government waste spring to mind. The right balance is surely one in which the private sector produces more than enough wealth to allow the public sector's necessary overall unproductiveness to give us all a fair society. I want a really caring, providing Government, but only if the private sector can afford to pay for it. I don't want us to go broke by having a public sector that's out of kilter with what the private sector can support.

@ Jaime T

A bit late into this, and I see the two Peters are in there first.

I do not recommend this (although there may be the odd 'tankie' on the LL site who would) but it would be quite possible for the UK State to provide every service we need, to pay those providing the goods and services and to issue tax demands to us in respect of these services.

In which case we would all be in the 'Public Sector' and we would all be equally 'productive' of 'money's worth' in goods and services. But not profit.

Instead of which we are accustomed to private companies (the private sector is essentially defined by ownership within a joint stock limited liability company vehicle) acting as intermediaries who provide some or most goods and services, and instead of tax demands they issue invoices.

Having deducted 'costs' and applied double entry book-keeping principles then a surplus/(deficiency) is created which we call 'profit' or 'loss' and this accrues to/ (is deducted from) the bank accounts of the shareholder owners of the companies.

Through 'cost cutting' - which more often than not means suppressing wages or otherwise offering worse conditions - a greater share of the surplus value created by the interaction of individuals (labour) and 'Capital' goes to shareholders.

This surplus value is denominated in the peculiarly worthless claims over value issued by banks which we are accustomed to think of as 'money'.

The point I am getting to is that 'productive' in Shareholderspeak actually means 'productive of profit'.

From the perspective of the entrepreneur, the public servant, the private employee and so on it is they who are productive, and the shareholder who is 'unproductive'.

But unfortunately they don't own the media who drum into us the propaganda written for and on behalf of the landowner and 21st century rentier class.

@Chris Cook

Thank you for your reply. I confess that I'm not much wiser. In particular you say that losses are deducted from the bank accounts of shareholders. Is that really the case? I own 125 shares in Friends Provident, from when they demutualised and compensated my tiny private pension in shares. The shares went down, then up, then mostly down but I never had a charge to my bank account.

My original point is balance between the public and the private sectors. Neither are angels or satans. But I do think that at a macro scale, we need to generate enough taxable wealth to allow the Government to pay for schooling, education, health, transport, etc. I don't think it is heresy to suggest that spending within a budget is conservative. Doesn't everyone? I want the spending budget to be increased to allow us as a nation to spend a lot more, but to raise the spending budget, we need to earn more.

In very simple terms, we want to extend the kitchen to give a garden / playroom for the children. I had it costed by a builder last winter at £12,900. We don't have that money lying around, so we're saving for it. Is that wrong? No it's not. Should we have extended the mortgage for it? Well, we could have, but we felt uncomfortable.

If you scale up that thinking to a Government level, we all want things (better healthcare, better education, etc). How are we going to pay for it? I believe that it is entirely coherent with being left-leaning to also believe that we need to generate wealth to pay for social policies.

@ Jaime T

'Deducting from your bank account' is a figure of speech.

The problem is that your definition of 'wealth' is in fact the opposite. It is a claim over wealth created by a bank as the deficit-based IOU money we are accustomed to using.

Leaving that to one side, you are making the erroneous assumption that the only two options are 'Public' = State and 'Private' = owned by an individual or a Limited Liability Company.

That may be the convention, but there are other, complementary ways of doing it using partnership frameworks for investment in productive assets.

It is quite possible for stakeholders to create and share surplus value without paying a 'profit' to someone whose only interest is in making money from money.

In fact, it is more efficient for stakeholders to finance themselves in this way than to pay returns to unproductive shareholders, whether generally, or the shareholders of credit intermediary banks in particular.

The Co-operative Advantage to which the Co-operative movement refers is precisely this freedom from creating 'shareholder value' - which is not 'wealth' but its opposite.

Jaime- I've only time for brief comment now, but spotted some excellent input on this thread.

Looking back to the 80's, and that 18 year Tory government, how was wealth generated then?

It seems to me a complete reliance on the banking and financial sector; all short termism.

Manufacturing/industry was decimated- which could have been a real driver, as in Germany.

I'm no economist, but it appears as if the Tories are saying now- increase the private sector by whatever means, and miraculously we will recover.It appears an ideological attack on the "state."

I'd like to see more innovation and ideas on what really could generate wealth in the long term, not just making quick bucks.

Also- a civilized welfare state and decent public services.

@Jaime T

I think Chris point is not one about balancing the books or saving money Jaime, it is the very fact that "wealth generated" is not being "generated" ultimately. Nobody disagrees with your point that balancing and generating wealth is important, the problem is that the money needed to invest in the very private sector that we need to grow is not reaching it.

The reality is that wealth is being prevented from being used to invest in essential technological and other industries. It is incredible how little this country spends on research and innovation. During difficult times historically it has taken wars and all sorts of problem to push this country our of the neo-liberal lassaiz faire malaise and into developing the technologies and skills needed that have raised us up in the world.

What we have witnessed recently amongst the politicians is their bias towards one sector at the expense of all others which is neither sustainable, logically justifiable or even effective in addressing some of the long-term economic problems this country faces.

Shareholders (major ones) tend to leach the life out of the private sector, they do not contribute towards innovation, skill or creativity they simply take the life out of it. Retaining the competitve edge is essential, being able to get one over on your competitors via hard graft and innovation these are traits that are essential to the private sector, the essential private sector, and ironically they are being stifled and crushed under the weight of corporate monsters that lack any market diversity whatsoever and are owned by entites that in many respects a monopolised entity that would operate in a similar fashion if it were State Owned and run by Communists.

It is only private in title and have tremendous political power thanks to our weak/stupid MP's.

This occurs whenever power is concentrated in any one place, public or private, the end result is the same, an entity that becomes its own worst enemy and fails to deliver and function as effectively as it should.

For me the markets are essential they are the means by which we generate wealth and the Labour Party is exists as a consequence of the markets.

The Labour Party in my own mind exists to ensure the markets (that are one component of a civilised society, a damn important one, but just one nonetheless) perform their role without causing harm to society by doing what governments, individuals and even Empires have done historically, to ensure that wealth does not end up being concentrated to too few and preventing civil unrest.

It is of course in the interests of any country to ensure that meritocrcy exists as far as is humanly possible (this is an alien concept to many Labour MP's currently) so that we have the best industries, the best public sector and the ultimately the best quality of life for as many people as possible and that is the goal of both main partys. Or at least it used to be.

It is no longer the goal of the PLP though and that is why they failed so badly as they became enamoured of the shareholder and finance sectors, they themselves became part of the problem as they maintained the status quo.

What does Tony Blair and William Hague both have in common?

They both called for further finanacial de-regulation before the banks crashed.

Both became a part of the problem, not the solution and like the MPs wanted to continue a deeply flawed status quo, refused to accept (mainly because they were cashing in directly and indirectly) that anything was wrong, even in their own constituences and went along with it all.

MP's avoid dealing with the economic problems by allocating the casework to unpaid interns and office helpers, this permits them to spend thier days pursuing other things.....

None of which includes addresssing the serious inequailities that need to be addressed to restore this countries economic position, or in fact to permit us to invest in our people so that they are the pride of the nation whether they work in the public or private sectors.

The people have been forgotton by the PLP who have allowed themselves to to be composed of a single "set" of people with limited ability due to non-existent experience. The culture is one of political apathy and ignorance and Labour is incapable of running the country effectively at the current time. The leadership contest is becoming as vastly irrelevant as the PLP has become.

Without any real depth or understanding, and with a denial never mind a refusal to discuss any of the core issues facing real people every day in their very real lives.
Real lives the majority of MP's just simply do not understand or care for.

The people were very wise to vote the way they did, no party deserves to be in power at the moment. But the Coalition is under incredible pressure to ensure it succeeds whereas the PLP is simply bitter that it has lost the £££. The Tories want that landslide in the next General and they are more than happy to do whatever it takes to get there and the Liberals are a great help to them at the moment. I suspect Labour will be out of touch and equally out of power for a very long time. You have to bring meritocracy to the party first before you can bring to the country and at the moment the Party is still a garden party for the privalaged most of whom could not tell the difference between right and left even if you tattooed the directions on their bodies. Stupid, ignorant and of no use to anybody and in it for what they can take and not for they can contribute.

Big problem for us at the moment. We are, along with the other partys still part of the problem. Vince Cable though I think may well begin to move things in the right direction if his banking plan works. A small start but a necessary one for this country.

Good comments Ralph.

@ Jaime T,

I beg your forebearance in me making a comment when you have replied to something that Chris C has written.

Your wages and costs are paid for by the taxpayer ; the NHS, in itself, is a gigantic insurance scheme in which the insurance company is HM Government, covering the whole population of 61 million people.

The main difference, financially, between the private-sector providers (BUPA, AXA etc) is that the private providers' insurance premium is a flat, per capita charge (plus extra for "bells and whistles") whereas the tax paid to pay for the NHS is (roughly) proportionate to income.

What is "productive" economically is largely a product (if you'll excuse the pun) of mind-set, personal values and brain-washing propagated by vested interests.

In your own particular profession, people have always sought relief from pain. It used to be paid for purely out of the patient's pocket, which would place it squarely in the "productive and private" sector, according to conventional wisdom because an individual, of his (her) free will had purchased a service privately given.

Put it this way - if you have your appendix removed privately, it counts towards GDP (the productive economy) - the doctors record their invoices which are recorded as "income."

The very same doctor could do the very same job in the NHS and it becomes "non-productive" because it's paid for by taxation and the "wealth-generating" private sector?

All we need to subsist are water, food, clothes, a roof over our heads and a source of energy for the cold winter nights. Everything else that we consume is extra and has come about because of the innovative capacity, imagination etc of homo sapiens.

Provided the demand is there (and, for sure, it is in healthcare) all goods and services - whether provided by the public sector or the private sector - are "productive."

Along the way, our values become distorted, so that people do silly things like buy bottled water, "personal" number plates but hey! these are produced by the private sector so must be "wealth creating."

And I bet you dollars to doughnuts that tomorrow, a big 40-foot truck/trailer heading north from the Vale of Evesham carrying thousands of bottles of bottled water, heading north, will pass, on the other side of the carriageway, another big 40-foot truck/trailer carrying thousands of bottles of Highland Spring Water, heading south.

@ Jaime T,

That's my comment above, starting, "I beg your forebearance ..."

I was "timed out."

There's a reason I'm a doctor and not an economist, and it comes down to my understanding of economics.

Simplistically, take 2 employees. One private sector, one public sector. Both paid £30,000 (or any other figure). Both spend nearly all of their income each year. Both will contribute the same in tax, VAT, fuel duty, etc to the state. Their employers also pay the state employers' NICs. Let's say the total taxes paid to the state are £10,000 by each employee.

The private sector employee is a net gain to the state of £10,000. The public sector employee is a net loss to the state of £20,000.

Now, I wouldn't say this is an argument for having no public sector, because that is ridiculous and does not acknowledge the less tangible "good" that a public sector employee can deliver for the cost to the state of £20,000.

But in my rather simplistic mathematics, it does not do anyone any good to get the balance wrong, across the country, of £10,000 contributors and £20,000 withdrawers, especially if we want - as I do - to ensure that our state can provide a safety net for those who cannot help themselves.

@ Jaime T,

That's too simple and ignores the basic equation that output = income = expenditure (neglecting, for simplicity, exports and imports).

It does not matter, in accounting terms, who provides the output.

The balance between the "contributors" and "withdrawers" depends on the social characteristics of a particular nation state.

The US (and the UK, to a lesser extent) and the Nordic countries have different attitudes towards what you call "contributors and withdrawers" and, as far as I am aware, the Nordic countries are functioning perfectly well.

I recommend David Smith's "Free Lunch" - it's excellent. All will become clear ....

Jaime T

The problem with this profit and loss analysis (private sector gives state 10k, state employee costs it 20k) is that the remaining 20k either pays goes largely to stimulate the private economy.

The money a state employee pays for cars, pizzas, travel insurance or consumer goods is exactly the same as a private employee.

So there's an accelerator effect which means that, far from 'crowding out' private enterprise and initiative, the public sector is in a deep symbiotic relationship with the private sector.

As we'll all find out when the effects of this budget, and subsequent expenditure cuts, become clear.

I would not want to be a private entrepreneur in Liverpool for the next five years.

@ Peters B and J

Thank you for your comments. I feel the same as when I read "A Brief History of Time", the well-known book by Stephen Hawkings. I was fine up to Chapter 5, and then suddenly I could read the English words, but could not understand what they were saying!

I think we're possibly talking at different levels. I understand that most of the public sector employee's £20,000 net spending is going to the private sector, but we need two public employees to do that to make economic sense for the private sector to employ one person at the example £30,000.

So, while I don't doubt your analysis, and if I get time I'll certainly look out the "Free Lunch" book, it's still in my mind a question of balance between public and private sectors. Both are necessary, but it's also necessary for both to be in balance. Meanwhile, in the real world, I've got 5 operations tomorrow (all planned, and relatively minor). From an economic sense, I can only hope that the net good of those operations outweighs the cost of the wages and costs to the hospital; from a personal sense I'd still do them anyway even if there was no economic case as I went into medicine for other reasons.

Don't get me wrong, Jaime. While I'm totally opposed to the idea that 'public spending' is intrinsically unproductive, that doesn't mean that I always assume it is productive.

There are plenty of reasons to believe state owned, hierarchically managed and market protected institutions are more likely to become wasteful, self serving and inefficient. It's on this level that I welcome competition, and hate monopoly, in whatever sector it is found.

However, it is possible to create innovation and competition in public services, just as it's possible to find bloated corrupt bureaucracies in the private sector.

Although labour supporters can rub their hands with glee and tell their not so bright tory friends 'I told you so' the labour party must share some of the blame for this budgetary outrage.

Rather than doing everything possible to stay in power, we ditched a winning prime minister for a, lets face it, losing one.

We assumed a more 'old' labour approach to problems would return the missing millions of voters to the fold.

We thought that everyone could see thru cameron and osborne.

We were .. er .. wrong.

Vince is arguing now that he didn't say VAT is regressive b4 the GE as CT is the most regressive tax. I agree, so why didn't he stop Clegg pushing for it and go for low CT instead, maybe a CT that only pays for things that directly affect the home - planning, parking, parks and recreation? With the rest paid for through, if necessary, higher income tax?

If GB had been honest about this at the GE we could have had a fair debate then. Now GB had a problem with honesty, and chose NI rise that is almost as fair as an income tax rise but he lacked the bottle to tax the rich so he went for the earners.

Correct me if I'm wrong but didn't Labour refuse to rule out a VAT rise before the election?

As it is this is a pretty fair progressive budget in really tough circumstances. Suck it up because you all sound hysterical.

A phrase that William E Gladstone himself coined, "national injustice, is the surest road to national downfall". A phrase that rings home with me, after watching this depressing budget by a man who dares to tell the people to tighten their belts. When he himself is heir to a massive fortune, and is so wealthy along with his partner in crime - David Cameron, that they'll never be effected by their own policy decisions.


But specifically, there has been nothing mentioned about giving students and young people a helping hand in life. As a young man, about to become a student myself, all I hear is cuts, cuts and cuts. Oh and if you have a couple of million to spare or if your an employer then today doesn't matter. It's disgusting, we should be helping and guiding young people to fulfil their potential. Afterall, holding young people back today and withdrawing vital funding/resources for young people in general can only lead to future generations of poverty and social community problems.

To those Tories, who consistently argue that somehow Labour is soley responsible. Well, what would you have done during the banking crisis and the recession? Maybe Labour should have let the banking sector collapse, with the loss of all customers accounts/finances? Should Labour have just stood aside and let the country's economy crash into depression?

Had Labour implemented Bank regs prior to previous GE to stop the crash the cost to the economy would have cost Blair the GE as Tories would have campaigned to end them

Elliott,
You know, we should have let it all collapse. Asset prices and property prices would have tumbled and the wealthy would have been worst hit for once. Instead we bailed them out and now they have got back in power they are laughing at us, but remember we are all in this together!!

@Paul

I agree that we should have let it all collapse, but I doubt the the wealthy would have been particularly badly hit. I would wager that most of the shares in the idiotic banks are held by pension funds and small investors. Most truly wealthy people will diversify their investments to protect themselves from the collapse of a particular sector.

The government threw money away supporting bad businesses for political ends, in just the same way as they offered money to Forgemasters (despite not having the cash to back up the offer) for political ends. Politics and business rarely mix well, as we have seen...

How can Labour complain - they vetoed a liblab pact, forcing the libs into bed with the Tories, campaigned without a credible alternative without a credible leader.

Jonathan, I was personally in favour of a Lib Lab coalition.

But 2 factors that have been cited are- the LD's had already decided they were going to do a deal with the Tories.

Also- the numbers didn't stack up.

But it has to be remembered that 52% of the population voted Labour or LD; so one can only presume left or centre left preference.That means whatever decisions to be made, there is not a mandate.

Also, many LD's have deflected to Labour or left the party; that may increase as we see how events transpire.

Labour MP's backed Gordon through everything, every poll decline, 90 days etc., then dropped him when he suggested STV with the libdems. The PLP wasn't prepared to give up safe seats, so we take the hit. Hypocracy rules.

I note that Labour MPs in the house refused to say where they would make cuts. Until the time that Labour can promote a rational alternative, their howls should be ignored. We are in the mess we are in because they were so keen to spend money we didn't have.

I hear the sound of a predictable troll......

I agree entirely, Mike. I mean, when people disagree and make valid points, they must be trolls, right? Because if they aren't diehard Labour they can't be right, surely?

Labour's ineptitute on the deficit and mistakes like the VAT cut are responsible for this mess, yet the party is happy to blame others. And I notice they haven't been praising the raises for low paid public sector workers, the tax decrease for the poorest, the bank levy, the CT freeze or the NI holiday. But I suppose those are going to hit the worst off are they? Don't listen to me though, or engage with my points. Do feel free to call me a troll too.

Not interested in engaging with Tories. This is a Labour site. I don't think you should be here.

God you really are hilarious... Presumably because us "Tories" have plenty of decent points you find it hard to answer. Much easier to stick to party politics and pat each other on the back for sticking to the Labour line, isn't it?

Actually, this may be new information to you, but not everyone who is against Labour is a Tory or Lib Dem. There are plenty of people regardless of party bias who believe, rightly, that Labour has messed up the country in its 13 years of power. You lot sitting here with your rose tinted spectacles on will never improve things if you aren't open to any other views not considered "Labour". The party should get its own house in order and be offering some real, decent suggestions as to how to cut the deficit - intead it's just "let's attack the Cons because it's easier".

Your narrow-mindedness does you no credit, nor does your black and white "Lab-Con" mentality. If you were actually able to back up all Labour's arguments and knock down all the Tory ones, you should do so, but as with so many here, the idea of even remotely sympathising with a "Tory" is abhorrent to you. Hence no posts on "on the plus side, this has been done..."

The public and the HoC would hold Labour in much better stead if they were actually able to present a mature and reasonably front which recognised some of its mistakes and did not force itself to disagree on party grounds at every turn. So maybe if you listened to the odd Tory argument, you'd be better off for it.

A CT freeze forces councils to cut staff. I wish Gordon the moron had run on a platform of cut the dafter things otherwise increase income tax as necessary, the only fair tax. He chose NI for political reasons, partly because as only workers pay it the non-earning rich don't pay it and don't kick up a fuss, otherwisev it's similiar to income tax. At least with VAT it hits even the rich and essentials don't have it.

Not interested in engaging with Tories. So not with any of the male leadership contenders then?

What doesn't appear to have been factored into the calculations - and of course, this is nothing new - is the effect of high unemployment in already depressed areas

There seems to be an unrealistic optimism that jobs lost in the public sector will miraculously be replaced by private sector expansion, but with absolutely no strategy to enable this to happen other than some weak incentives for start-up businesses. There has never been any evidence that this will happen and there is even less now. I just don't see someone with some resources heading for an area they do not know, away from their friends and family, to start a business - it is pretty obvious that those areas most of appeal to the private sector will remain so unless there is a very active and directive regional policy.

It was a very predictable neo-liberal, small-state/'sound money' Tory budget without a scrap of influence from the LibDems, other than those who would have opted for the same strategy in any case.

Mike, you should step back a little and look at what you have written. The best strategy to encourage jobs growth is to give tax breaks to business. Osborne's initiative today WILL encourage people to take on more staff. It will not be miraculous. It will take time, but it will come. In the meantime, all of those people who are employed by the state, but should have been employed by the private sector will suffer. It is not credible to pretend that you can run such a massive public sector over the long term. The country needs a thriving private sector, with the public sector strictly limited to serving the needs of the public.

Nowhere in the budget did it say that people had to move to start businesses in the target areas. The idea is to incentive businesses in the target areas to take on more staff. I live in one of the effected areas, and this afternoon, one of my businesses started to advertise for new staff on the back of today's budget.

In the end, there is simply no alternative to 'sound money'. And before you say there is, you should look at the economic ashes that Brown & Co left.

No, it isn't. That's a load of free-market hogwash. Left to the market, cities such as mine would have continued to decline. Relatively low-level tax breaks are simply not going to get people to uproot and start businesses, and the idea that thousands of people are going to suddenly get the urge to do so here is neither realistic nor practical. As for taking on new staff - given that the unemployment is going to make it harder for small businesses to survive, that's not exactly credible either!

It is perfectly credible to have a large public sector, but not if you are an economic neo-liberal. You have an ideological preference for a small state, but of course, that isn't the socialist or social democratic view.

Its really a total waste of time discussing this with you because we simply have entirely different ideas about the sort of society we wish to see.

@ Mike H,

" ....free-market hogwash ..."

In April 1979, the ILO unemployment rate was 5.3 per cent.

After 18 years of a "business-friendly, tax-cutting Conservative government" the ILO unemployment rate was 7.2 per cent, in an economy in strong recovery phase after the early 1990s recession.

In fact, the lowest ILO unemployment rate achieved by the Conservatives was 6.9 per cent in 1990, at the tail-end of the Lawson boom.

That's some job-creation policy ....

Peter: I think that the Tory record on unemployment is absolutely clear. They use it as a weapon and a form of punishment for those who have the temerity not to vote for their 'solutions'

Mike H,

Not only a weapon - as long as there is significant unemployment : (i) the vigour and virility of the labour supply is diminished and (ii) it keeps wages low at the bottom end.

And ever it was so....the Tories will never change

Mike you are wrong. The incentives are for people in the target areas to either take on staff or to start new businesses. The state cannot be larger that the private sector who's taxes support it.

Don't presume to tell me that you know what my preferences are for the size of the state. As it happens, you are wrong. The size of the state should be in balance with the private sector.

Paul,
I have been in business for 30 years. Tax breaks and such incentives do not foster employment, the profit motive does that and to make a profit you need CUSTOMERS.
With no demand in the economy there are no CUSTOMERS.
Its really very simple but if you deflate the economy, you create UNEMPLOYMENT.
We need a strategy for growth not wishful thinking and cuts.
We have a coalition of Gladstonian Liberals (Orange bookers) and 1920's Tory economics. None of them have ever EARNED a penny in their entire lives and to cap it all we have the heir to a baronetcy telling us to tighten our belts.
Its pathetic, it really is.

@Paul

Your point about customers is only correct if you have no additional customers. If that is the case then your business is in trouble. But, my business does have additional prospects available to convert to customers. It is true that business is quieter than normal, but they are still out there.

Up until now, my attitude has been to hold tight with my current staff and wait for the upturn. But, now that it will be cheaper to employ new staff, I think the scales have tipped in favour of expansion, and I have decided to take a punt. I am not talking about a return to the good times, but I am now looking for a dozen new surveyors. If I am successful, that will be a dozen more families earning circa £36,000 per year.

So, yes, businesses depend on customers, and not all sectors are performing well, but for me, the budget is an opportunity to expand.

You are a very strange sort of businessman. You increase your workforce at a time when you have no evidence that the demand for your products will increase. In fact you have evidence to the contrary, the government has taken £40 billion out of the economy over the next 5 years.
If the budget is an opportunity for you to expand you must be an insolvency practitioner or a bailiff.

@Paul Hillyard

Spot on.

There can be no long term solution unless and until wealth inequality is addressed by systemic fiscal reform.

These jokers are applying systemic fiscal reform in a double dose of the neo-liberal voodoo economics which got us where we are - aided and abetted, to their eternal shame, by New Labour.

But it's even worse than you say.

@Paul Pinfield
In the end, there is simply no alternative to 'sound money'.

He is absolutely right.

We desperately need sound money to be available to both the public and private sectors to develop the productive assets and enterprises so desperately needed.

But that is not what we are going to get. Sound money does not emanate from banks centred around a deficit-based money supply and credit creation based upon risible amounts of capital.

We will merely get a continuation of the terminally unsound privatised system of credit creation responsible for the disastrous bubble in property prices.

There will be little or no credit available to create new productive assets, and what little there is will be pumped in to inflating or supporting existing asset prices in the FIRE (Finance, Insurance and Real Estate) economy as before.

Only public credit created by government, and professionally managed, or a new approach to mutually guaranteed private credit, will do.

It is indeed pathetic, and the tragedy is that Paul and his fellows actually believe the 'public sector unproductive; private sector productive' bollocks they continually parrot on this site.

But Labour has the problem that there are way too many in the Party, and at least two of the candidates for party leadership, who also appear to believe this balderdash.

Chris,
I'm not so harsh on New Labour, 3 elections without the Tories is good enough for me. It's pointless being in opposition.
The impressive thing about this lot is how quickly they have started to defend their class. They have grabbed the agenda and backed by all the mainstream media have decimated the opposition.
When we get back to power we have to be equally ruthless and equally dishonest in opposition.

Being dishonest in power didn't help Gordon Brown.

Paul, go away and troll somewhere else.

Please can we have no more talk of trolling. No one cares. This site is tough enough to run as it is. There's always going to be criticism. But debate politely with each other, please.

Yeah, well, some us of made a donation because we thought it was a 'Labour-supporting website', but, it appears, were deceived.

As a grassroots, Labour supporting website, LabourList relies on donations from our readers and from people who share our aims, in order just to survive and continue our work.

Please consider supporting LabourList by donating £25, £50 or £100, or an amount of your choosing. If you would like to contact us regarding funding, please contact the editor at mail@labourlist.org.

Deceived?

The whole point of the LL is to discuss and debate Labour-related issues. Would you prefer it all one-sided with nobody to disagree?

Would it suit if all the people who would vote for a party other than the Labour Party declared that they were Labour-minded before they post or is that a little too obvious?

Why is there this tribal reaction to comments that are away from the current Labour thinking? What is gained by calling someone a Troll or ignoring their comment (or any valid points) just because they wouldn't tick 'Labour' at election time?

If someone is attacking Labour ideas come up with a valid counter argument or just ignore it. Blimey, life is too short.

Bill. You're missing the point. I've seen you blow several gaskets because you feel personally attacked. Ludwig has contributed stellar stuff to LL, both in terms of content, and (it seems) in terms of dosh.

This is Labour List. Dissent, debate, for sure. But John Doe and Bill Lockhart have been carrying out a sustained attack of snide, with no pretence of debate.

If I want to debate Tories, I know where to go. If I want to have a generally centre left discussion (with reasoned dissent) Labour List is about the last bastion.

But it won't be if the right wingers keep trying to get the Labour supporters to leave.

Pure ad hominem. If Ludwig decided to depart the site, and changed his mind, what business is it of yours?

You claim to be here for 'intellectual stimulation' or debate, though (as the comments passim here prove) you main motive seems to be the negative emotional gratification of insulting Labour supporters.

You claim to vote Lib Dem, but then defend the most extreme right wing Tory policies (e.g. IHT).

There are some right wingers here who post cogently, don't resort to personal attacks, and show the ability to debate - I'd cite Max Sceptic or Magna Carta.

But this strange need to stab others in the back is very disturbing.

When it comes to inconsistency, I'd rather have Ludwig's.

Yes, well, I didn't put the quotation marks around the piece about donations, which is actually behind the 'Donate' in the top menu of LL. We could have done all of 1-3 without the interference of the non-Labour commentators. They are, by and large, as intransigent as you suggest Labour contributors are. The website has become useless because of the intervention of people who simply wish to dump on Labour. Anyway, I'm not debating here any more, just pointing out what the purpose of the list is supposed to be. If, moreover, people wish to contribute here, they might wish to click on the 'Donate' button.

This site seems to be great for you at the moment, Lofty. I think this proves Ludwig's point.

There are far too many Tories on here. I'm not in the least interested in 'debating' with Tories - that's why Conservative Home works well, because they severely ration the number if non-Tories allowed to post

Alex. If nobody else notices the anomaly - you should. Within a couple of posts a known right winger has told two Labour supporters to leave this site.

If that's not text book 'information interference' (i.e. trolling) I don't know what else is.

The laughable thing is that the same people say they're just interested in debate and intellectual stimulation.

Why do they need to insult, inflame and try to deter others then?

There's a declared bias to this site. When I post on Conservative Home I watch my P's and Q's and make sure my comments are substantive.

This is just taking the p**s. They know it. We know it. But the uneven hand of moderation misses the game.