back to article Coalition failing on UK economy

The Coalition government might be doing a good job of slashing public spending, but it lacks the vision needed to get the UK economy back on track. The criticism comes from outgoing CBI boss Richard Lambert, who used his final speech as boss of the lobby group to lambast the government's failure to outline a path to economic …

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Pirate

You what ?

"action-oriented growth champion" ?

Guards, take him to the dungeons !

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Headmaster

Of Course Welsh is...

Far be it from me to defend a economically/psychopathically minded man such as Lambert, but he was and is 100% behind the ConDem public sector massacre, it is just that with the banks not lending to anyone, with money being taken from the pockets of PAYE-suckers via tax and uncontrolled inflation... well it might be nice if government stopped kicking over everyone else's toys and worked with the rest of the country to ensure the economy doesn't collapse.

Of course not all business is being overlooked as I'm sure ministers are wanting to ensure they have a directorship or two lined-up, and on that note, who wants to take bets on Mr Osbourne walking on to the Vodafone board when he gets to "spend more time with his family"?

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N2

Years ago

I asked my father, "So why does Labour only get one term of government?" to which I was promptly informed that it always takes twice as long to clear up their mess as they always run out of our money.

So no surprises that during the last 9 months things havnt picked up after the country was well and truly fucked on a biblical scale by the last lot of clowns.

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Paris Hilton

Back to the 1930s

Richard Lambert shouldn't be so concerned about how small businesses can provide jobs for the 400,000 public sector workers who, he predicts, will lose their jobs. When they do, those small businesses won't have any customers any more and many of them will go to the wall.

Look on the bright side, though: unlike in the 1970s, there is no oil bonanza to rescue the UK economy from crass mismanagement, and all the political parties will be forced to (re)learn that Keynes got it right after all.

Paris, of course, follows rational economic policies, boosting employment and limiting working hours so that life is there to be enjoyed.

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Bronze badge

More credit?

Surly that's the last thing we need!

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FAIL

Who would have guessed?

A political party big on talk and short on action. Now there's a novelty. I'd like to put in my manifesto for the next General Election on behalf of the 'They are all rubbish, We are the best' Party:

"We will endeavour to increase the good stuff and decrease the bad stuff. Only when we are in power we will know exactly what is required to achieve this but rest assured we will give you the full details at a time of our choosing."

I don't see how anyone can fail to vote for us

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Paris Hilton

Don't worry - it's the coalitions Tory way

Slash public expenditure, lots of people unemployed, poorer responses from existing public services as revenues are relatively down and benefit totals relatively up.

Let a generation or two develop very poor health (spots,ricketts, poor immune systems) and hail the return of the developer bringing jobs (capitalist jobs) to poverty struck masses.

I wonder if her majesty might enquire of the well-being of her subjects while all this goes on?

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g e
Silver badge

Public sector workers

That's a lot of jobs to go but, economically speaking, public sector employment is way too large.

The problem (or a fair part of) lies in the fact that public sector workers are tax *consumers* as they are paid for out of taxation whereas private sector workers are tax providers. So if you don't have enough tax providers for the tax consumers you're going to get a negative cashflow, essentially and go into debt, and the only way to fix it it to try & turn the cashflow positive again, meaning public sector cutbacks.

Harsh but true, not the employees' fault, either, but that's not going to cheer them up any.

I sometimes wonder if the gov could be privatised, giving everyone 'shares' based on their tax contributions or something... The annual shareholder meeting would be amusing...

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FAIL

Wages are but one cost

While wages may represent a large proportion of the Government's expenditure, it pales into insignificance when set against the annual benefits bill or the amount of cash given to the private sector. The latter of which were given free reign by the last Government (and probably will be allowed to continue under the present one) to rip the taxpayer blind with their outrageous fees and poor performance. (not all, but far too many) This happens because they 'fund' political parties and get kickbacks and contracts in return.

Other countries are happy to have a large civil service providing good services at relatively low cost and their financial position is better than the UK's. That is because they are not locked into 30 year PFI contracts where the contractor does the same job, only at a far higher cost than the public sector crowd can do it. Oh and the public sector workers are not able to move their income to off-shore tax havens in order to avoid paying tax...

Just cutting the public sector without fixing any of the other problems is not going to help the economy much. No one solution can work properly in isolation from other solutions in other areas and I think the CBI is just twigging to the fact that the Coalition's strategy is to reward their mates and give them more of the pie to bite into, rather than to solve the myriad of other problems and barriers facing smaller companies.

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Anonymous Coward

Why Outsource

I often wonder what would happen if import duty was 1,000,000%.

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Anonymous Coward

CBI

So he follows the general CBI script of:

"There's too much red tape"

"Health and safety has gone mad"

"Why should we pay for maternity leave, it's their own fault for getting pregnant"

"We have to pay too much in Tax/NI/etc"

"The mimimum wage will take us all to hell in a handcart"

"Get rid of employment protections, we should be able to hire and fire at will"

wah, wah, wah.

Cry me a river.

Also, I suspect he's bang up for a job at the Daily Mail now.

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Entirely correct

The coalition is - in much the same ways as the Labour party - failing the country...

a) Cost of capital for investment is prohibitive - just look at the interest rates and fees charged by the banks. We own two of them, we could instruct them on what we need - fee free and 1% interest rate business banking.

b) Purchasing decisions. Buying a 20,000 BMW because it is cheaper than a 25,000 Jaguar for the police is just one example of the millions that I could choose. Buying the BMW removes 20,000 of demand from the UK economy and nothing else. Buying the Jaguar removes someone from unemployment, retrieves taxes, generates demand, all in all if you do even the most basic calculations spending another 5000 to buy local makes it cheaper! Germany, France, Italy, China, India, USA, Russia, Spain, Portugal etc etc etc have worked this out - just look at what they buy. The government could very very easily change their current mistaken policy to ensure that all buying decisions calculate the REAL costs and benefits of a purchase.

c) Regulation, we are the only country in Europe to enforce the myriad of stupid European directives and then add to them with our own mess of health and safety and other rubbish. Bonfire of this lot would be good, but I'm not holding my breath.

So all in all, the three very simple steps that would make it possible for our economy to grow have been scrupulously ignored because the people 'in charge' are far more interested in lining their pockets with expenses and non-executive chairmanships.

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Anonymous Coward

it'll end in tears

why? Because the Tory party, British capitalism's very own political arm has always been a show case of the utter inefficiency of said British capitalism.

Bunch of bloody bankers.

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