Lobby group the Confederation of British Industry (CBI) is urging Chancellor George Osborne to make cuts to the public sector rather than increasing the tax burden on its members. In a letter to the Chancellor ahead of the emergency Budget the business group calls for major reform of the public sector to create savings to help …
Now the public sector has its own problems. But, remind me again, who caused the biggest increase to our debt in recent times? It wouldn't happen to be the bailout to those failed private enterprises, the banks, would it?
Before demanding public sector cuts
Perhaps the CBI would like to have a whip-round amongst its members to repay the massive bail-outs that private sector financial institutions received? Maybe lead by example and freeze boardroom salaries? Or do they feel that belt-tightening is just for the little people?
Some fairly uninformed people on economics here. A few facts - the CBI do not (mostly) represent banks. The vast majority of their members are in other business areas. Manufacturing, retailing, services and so on.
As for the bank bailout, then the direct costs were about £35bn. Most of that (if not all) will be recouped when the shares bought by the government are resold onto the market. That figure of £35bn may sound large, but it has to be put against a PSBR of over £160bn this year alone.
The real damage caused by the financial meltdown was the recession - that hammered tax revenues and also caused increases in public sector expenditure in other areas. However, even allowing for this, the structural debt was reckoned to be about 7-8% wjhich is unstustainably high. At a time when the economy was (apparently) doing well, rather than paying down the debt, several countries, not the least of which was the UK's, was increasing the borrowing requirement. In the last few years before the financial meltdown a lot of the growth in the economy was illusory. It was borrowing based growth pumping money into the economy (both private and public) leading to an artificially prolonged boom.
The real issue here is that growth forecasts were overstated as they were based on wholly unsustainable private and public borrowing models. As Greece, Portugal, Spain, Ireland and the UK are finding out, then you get a private collapse first and then the much more serious danger of a sovereign debt crisis.
It's a failure of the education system in this country and the growth of wishful thinking that lead us into this unsustainable position. Quite simply, if the money isn't there, and nobody will lend it to you (as Greece found out) then you damn well can's spend it. Try and recover the money through extra taxation (which, at the current PSBR level would mean raising the equivalent of an extra £1,500 per man woman and child in the country just to get back to a 4% PSBR requirement), then it will flatten private expenditure and investment.
There is not nice way out of this, and we got into it partly through an exercise in collective self-delusion about what is really required to make a prosperous economy.
nb. this is all against a background of increased tax take from the mid 1990s anyway - various taxes, indirect and direct, company NI, personal NI, pension investment treatments and so on have increased over the last decade or so.
Rich people call for lower taxes and dont need public services.
Well theres a surprise.
The sooner the Gov't stop listening to them the better.
Can anyone explain to me
how a Trade Union of largely foreign owned companies has any say in a democracy?
Do you get more votes the more money you have?
As a voter it takes ages to get to see my 'representative' but as a business I can pop in later that afternoon...
To a level it's very true that metric fuck tonnes of cash are wasted in some public services, e.g. Social Services and Mental Health care, where a cpn/sw will rack up over 3 hours of paper work for every hour spent with someone.
Of course a lot of that is down to succcesive governments fascination with beurocracy, and sadly it would take a root and branch review and years of work to get into a sensible state.
However in a private company you wouldn't have your top developers stuck doing your IT tech support (not unless it was very small or slowly sinking.)
My old dear got the boot from the NHS because she was rubbish at paper work and thought the idea of the job was to help people, a silly notion she'd picked up from over 30 years in the service.
But everyone has to face cuts and costs for it too work, so suck it up and pay out lol... Everyone wants cuts for other people, but that's the kind of sensible society we are...
"metric fuck tonnes of cash are wasted in some public services, e.g. Social Services and Mental Health care"
Bet you'd change your tune if it were your mum who sees a cut in her care and support.
Society means your Obliged to support each other, like it or not.
I don't see what that has to do with anything, the increase in beurocracy has lead both to an increase in costs and a decrease in productivity. If you were capable of reading you'd have understood my point.
And you can't spend money you don't have, well you can but not forever, eventually you have to pay the money back + interest.
Society and Money
"Society means your Obliged to support each other, like it or not" Yes but to what degree?
The UK for years now has been the soft touch of the world. Thats why so many people try to get here. There was a C4 news report a couple of weeks ago about single mums, typically with 8 or more children being totally taken care of by the state (such people IMHO are a waste of atoms). WTF - I want that stopped NOW. Having children should not be a career option for these low lifes - creating the next set of low lifes, and then some. These "hard done to" kids had better stuff than my own - iphone, trendy expensive trainers, Sony PSP - WTF WTF WTF. Bring back the workhouse - where all these dossers should go that ain't paid no dues. Society should also work on a "put something in, get something out" policy, at the moment the people putting an awful lot in - seem to be getting very little out.
On the subject of money.... of course we can keep spending it! Western economies believe the way out is simply by printing more money on a permanent basis.
I assure you this is going to end horribly, it's just a matter of when (which funnily enough is the only thing the Gov't can decide on - let it crash right now or prop it up as much as possible for as long as possible). It is a fact that Keynesian economics is flawed and does not work - the politicos are too frightened to tell us that (largely because they have continued to buy into it over and over for the last 60 years).
By all means lets have a "society" and a "Social State" but lets keep it sane - not INSANE which is what a labour gov't does every time it gets in.
"Society means your Obliged to support each other, like it or not." Says you.
I wouldn't mind so much if the emphasis of this statement was on "EACH OTHER". The current system is that the wealth producers support the non-wealth producers and others who make no effort to contribute anything to society.
If the government forced people to serve their local community whilst benefitting from finanancial State safety nets, "society" would be significantly improved. Unfortunately, although they have the power, our populist overlords haven't the balls to implement this.
I'd just like to say that both sides of the debate have positives and negatives going for them.
The public sector is staffed by well meaning hard working people on the front line and probably a few layers higher up. But there really is a load of dead weight in there that should be chopped. Of course it wont as the unions that are so tied into government will strike if jobs are threatened.
The private sector, and this is aimed squarely at the companies and industries that were bailed out by the government have their own problems. "Hello," if your business model isnt working then change it, grow with the times, What ever happened to survival of the fittest.
Banks, well don't even get me started, you got us into a load of this mess.
Government, when will you ever learn. If you put out a tender and then a company replies that has previously tendered business, got the contract and then delivered late and out of budget then why the hell would you give them the contract for something new let alone if they have a string of late, non delivered over budget prodjects attributed to them. Government take a chance on the small companies not the EDS's or other large companies that are forever failing to deliver. Smaller companies want the business, they can scale up with the cointracts just as EDS and evey one else does, Win a tender, hire some contractors, get the job done, move on.
As for the other comments on this thread...
People blatantly playing the system, - On benefits for more than 1 year? Report to your local council where they will direct you to the community field where you will dig a hole for 5 hours, have an hour for lunch and then fill it in for the final 2.5 hours of your day. You would do this 4 days a week. on the fifth day you would be looking for work and chasing up any interviews that you had been looking at in your time at home like other working people. For the work you did digging holes you would get your standard jobs eakers allowance. You would continue this work rain, hail or shine throughout the year with 20 days off for holidays. Now how long do you wish to spend on the dole?
In my opinion if you have never worked and never put in to the system then you don't deserve to get anything out. The NHS would still be there to look after you medically.
We also need to look at how much of the national debt is tied into helping out other nations with disasters etc. Do we really need to spend 500M on helping some other country when a token gesture of a million would do. Harsh I know, but hey charity starts at home and you can guarantee that we wont be seeing that 500m any time soon from the recovering country.
Private sector companies - stop giving massive bonuses to teh head sheads and freezing pay rizes on the ground floor work force. you just alienate them and productivity goes down.
If the CEO deserves several million pounds in bonuses for failed productivity dosent tehguy on the ground deserve a 5% payrise as well?
I wandered through this spouting
You managed to stop short of saying that 'there is no such thing as society'
Which statement of course is the bigest driver to our society being in the shit today.
The stuff you are whinging about (which i tend to agree with - but I am a little less, err... national socialist about) are about the social responsibilities of the individual.
Question then is when a school leaver who has been failed by the education system, and therfore un-able to get a decent career, failed by 'The Market' so is functionally homeless, and will be for the forseeable future. Endlessly bombarded with expectaion raising consumerist propaganda from the media. possibly picking up the occasional stories of how pretty much all of the great and good in our 'society' are self servinge greedy bastards with both feet in the trough.
Why should such a person give a fuck about social equity? I dont see them getting any of it.
An entire council estate of sprog poppin doley skagheads will in the course of their miserable existences do far less harm to GB plc than one tosser in a corner office of a steel and glass skyscraper taking the UK economy to monte carlo and puttign it all on red.
and fyi we haven't had a labour government in this country since 1979 (dont be fooled by tony blair - so nearly an annagram of tory plan b)
And in other news...
pigs vote for bigger trough.
Cynically conceived soundbyte
Get some numpty in the CBI to demand massive cuts that cause outrage among decent people.
That way, when the Blue and Yellow Tories make their own slightly less massive cuts they don't seem as bad.
Turkeys voting for christmas in some cases
Considering that the government departments are channeling huge amounts of money (often, but not always badly) to CBI members, cutting off that flow of cash would see lots of companies lose some very lucrative business.
Unless of course what the CBI actually mean is 'outsource' all that department business to their members so that they can srew the taxpayers some more...
CBI are just greedy toss pots. My message to the CBI....
I aint paying for your filthy fat belly to get fatter. Now cough up or shut the fuck up.
If you dont like it, get out of britian. There's plenty of other companies happy to take the profits and pay their way.
If you work in the public sector then the party is over
My hope is that the front line people who do the actual work don't get it in the neck, just the dead weight that has been added over the past ten years.
I've worked in the private sector and ...
They are soooooooo efficient. Wow, they are soooo efficient. Sooooooo efficient. I mean really really really efficient. !00% efficient ... no, 1000% efficient ... no 1000000000000000% efficient.
There is noooooo waste. I mean noooooo waste. Nothing is wasted. How many times can I say it ... they just don't waste a thing. No waste whatsoever.
Everyone works sooooooo hard. Really really really hard. All of them. 24 hours a day .. no 25 hours a day ... no 25 million hours a day.
Employees work for such reasonable salaries. really really reasonable. They work for nothing. The directors PAY to work - they pay £millions ... no, £trillions ... no, £gooleplex-brazillions.
The private sector always gets it right. Soooo right. They never make a mistake. Their judgement is perfect. They have their head so screwed on the right way you'd need a spanner to get them off again.
Good old private sector. Salt of the earth. Backbone of society. Pillar of he world. Key to the universe. It is an honour to top myself to relieve them of the burden of carrying me along.