The 2010 Emergency Budget thread

[Anna B]

Interesting post, Vague boy.

I agree with a lot of it, but I'm afraid I do think it was the bankers fault.

 

First of all the wealth boom, particularly in the South East, was very real,

 

Funded almost exclusively by the taxes gleaned from the banking industry the government went on a spending spree. Easy credit also allowed the setting up of PFI (Private Funding Initiative) which built many if not most of the new schools, hospitals and public buildings. The ordinary people had no control over this. The massive wealth sloshing around in the catital had a trickle down effect to the service and supply industries so they too boomed. The million pound house had the effect of inflating prices all over the country.

 

Credit was pushed in the face of everyone and some took advantage certainly, without a thought for how they were going to pay it back, but when the government is actively encouraging a generation of youngsters to get £20K in debt to fund University education then it's understandable that the value of money and indeed stigma of debt becomes blurred.

 

Ask any bank teller and they will tell you that they had to sell products and hit targets just to keep their jobs. Banks also specialise in small print and an ability to complicate and confuse to the point that no one understands what's going on..

 

As for the rise in house prices, there were similar booms in the early 70's and 80's when house prices rocketed. However people have to live somewhere and renting is as expensive as buying.

The banks could have put a stop on rising house prices by simply refusing to lend more than 3 times annual income, or more than ordinary people could realistically pay back. That's how it used to be when they operated responsibly.

 

In America, so greedy were the bankers to find new markets and create more demand for credit, they actually went door to door in the poorest areas offering to set up mortgage deals that were initially cheaper than the rents people were paying. Then interest rates began to rise, and these debts brough the banks down.

 

Banks have only just avoided insolvency thanks to the billions poured into them by government, but they are now refusing to lend it to keep decent profitable companies afloat, hence the closures and unemploymant that has followed.

 

But still the banks keep on playing the money markets and giving out billions in bonuses.

[I1L2T3]

Interesting post, Vague boy.

I agree with a lot of it, but I'm afraid I do think it was the bankers fault.

 

First of all the wealth boom, particularly in the South East, was very real,

 

Funded almost exclusively by the taxes gleaned from the banking industry the government went on a spending spree. Easy credit also allowed the setting up of PFI (Private Funding Initiative) which built many if not most of the new schools, hospitals and public buildings. The ordinary people had no control over this. The massive wealth sloshing around in the catital had a trickle down effect to the service and supply industries so they too boomed. The million pound house had the effect of inflating prices all over the country.

 

Credit was pushed in the face of everyone and some took advantage certainly, without a thought for how they were going to pay it back, but when the government is actively encouraging a generation of youngsters to get £20K in debt to fund University education then it's understandable that the value of money and indeed stigma of debt becomes blurred.

 

Ask any bank teller and they will tell you that they had to sell products and hit targets just to keep their jobs. Banks also specialise in small print and an ability to complicate and confuse to the point that no one understands what's going on..

 

As for the rise in house prices, there were similar booms in the early 70's and 80's when house prices rocketed. However people have to live somewhere and renting is as expensive as buying.

The banks could have put a stop on rising house prices by simply refusing to lend more than 3 times annual income, or more than ordinary people could realistically pay back. That's how it used to be when they operated responsibly.

 

In America, so greedy were the bankers to find new markets and create more demand for credit, they actually went door to door in the poorest areas offering to set up mortgage deals that were initially cheaper than the rents people were paying. Then interest rates began to rise, and these debts brough the banks down.

 

Banks have only just avoided insolvency thanks to the billions poured into them by government, but they are now refusing to lend it to keep decent profitable companies afloat, hence the closures and unemploymant that has followed.

 

But still the banks keep on playing the money markets and giving out billions in bonuses.

 

Interesting post. I agree that banks aren't entirely (although IMO are largely) to blame and certainly privately debt is a major factor. That said for every irresponsible borrower there has to be an irresponsible lender.

[Rupert_Baehr]

 

Why do we still need 20,000 plus troops stationed in Germany?

 

Because you've got nowhere to put them should you bring them home.

 

They have barracks, houses, schools and all the other amenities they (and you) would expect where they are. If you were going to bring them back to the UK how long would it take (and how much would it cost) to provide adequate facilities there?

 

Remember, you have to build (and in many cases staff) those facilities before you bring the people back, so for some time you will need duplicated facilities.

[Dogs Of War]

 

The system should be changed so that nobody who can work will ever be better off on benefits, than in work.

 

 

 

I agree with you on this ,but this problem wont ,and cannot be solved until there is a big enough financial difference between wages and benefits.

 

For example , a job that pays only £6 per hour over a 40 hr week , after stoppages is only roughly £180 a week take home pay. now if you have rent or a morgage to pay ,plus standard bills like gas , electric ,water etc,you are basically no better off than on benefits.

 

There has to be an incentive to work .

 

this is not going to happen until the minimum wage rises drastically to a minimum of £8 per hour, making it worthwhile to work .

 

while ever companies are allowed to get away with paying such a low rate of pay , this situation will continue.

[Rupert_Baehr]

But the conservatives were happy to attack industries and let them move elsewhere in order to restructure the economy. Why are the banks immune, especially if we are structurally too reliant on the financial sector? After all, as the conservatives would argue, private markets would step in to fill the gaps.

 

That said, don't we practically own some of the big banks. We can make em stay

 

'But the conservatives were happy to attack ...' - Blame it on Maggie!- It must be her fault! :hihi:

 

Do you remember when the Union Convenor at Cowley had his car searched (random search, standard procedure) and the security people found his golf clubs and clothes in the boot? - Just in case - in the really unlikely event - that there should 'happen' to be an industrial dispute that morning, then if (very slim chance, of course) he should call them out on strike he wouldn't have to bother to go home to get his kit.

 

Everything was quite obviously Margaret Thatcher's fault.

 

I agree that the country should not have concentrated so heavily on the financial sector, but the failure of British Industry wasn't solely due to the Tories; indeed the blame should be spread around fairly widely.

 

Having said that, I hope the present government does encourage manufacturing industry and I hope it encourages exports, but I don't see how anybody might think it would be a really good idea to drive out the bankers first.

 

As for 'practically owning some of the Big Banks' which ones? The Government owns about 65% (?) of Lloyds, so presumably they have a lot of control over that bank, but there are plenty of others who may be ready to move.

 

It's easy to dismiss a suggestion that the banks might move as 'bluster'. I wonder what the countries they moved from (not so many years ago) said when they threatened that move?

[*_ash_*]

 

Agree with that. But, and it's a big but, we must still help those who need it.

 

The system should be changed so that nobody who can work will ever be better off on benefits, than in work.

 

Apologies if been said already, I've not read the thread.

 

This, (bold) is the entire problem with the unbolded quoting.

 

Benefit is about giving out [at least] the basic minimum with which is required to live on.

 

NMW is [as I see it] a statement and action, about paying the minimum to what is required to live on.

 

These seem quite similar. So the [logical] answer would be increasing NMW, however, increasing NMW is counter-productive as it ups prices, hence, the price of living. Hence, the basic minimum with which is required to live on then has to increase, which is payed to people on benefits, who need that amount for basic minimum required to live on.

 

It's a fine balance, which is currently imbalanced. IMO.

[Weazel2006]

It isn't up to businesses to offer higher wages as incentives for people to work. Drop the levels of benefit to make current wages more appealing, saving money to spend on new business startups.

 

You talk about raising the minimum wage, we already earn more than 90% of the planet and you want more?.

 

There are people starving that work harder than some in this country....im on benefits and even i want it overhauled, it's a joke and far to easy for people to just sit on the sidelines.

 

There was always going to come a time when our better living conditions and easy credit would see a downturn, it's here. If you are not living within your means your going to struggle bigtime over the next 5 years, anyone else will hardly notice a thing, and if your being sensible with your money it will pay off for you in the end. Crunch time and hope the axe coming on the 22nd is a swift and decisive one.

[taxman]

I'm sure they've been planning a rise in VAT since day one, and earlier.

 

He's already signaled other things, changes in National Insurance rates and thresholds, a NIC holiday for some companies employing 10 or less workers. Labour's planned rise in NIC for employees will probably be introduced, tax threshold up to possibly counter it.

 

I'm sure there will be no cutting back in the Parliament wine cellar though, almost £18,000 has been spent in the last 3 weeks topping it up to its current value of £864,000.

 

Of course we are "all in it together"

[Mister M]

But the conservatives were happy to attack industries and let them move elsewhere in order to restructure the economy. Why are the banks immune, especially if we are structurally too reliant on the financial sector? After all, as the conservatives would argue, private markets would step in to fill the gaps.

 

That said, don't we practically own some of the big banks. We can make em stay

 

Yes I seem to remember they called it 'creative destruction'!

 

Unfortunately Gordon Brown and 'new' Labour got way too close to the bankers and the square mile. I think there was some kind of Faustian pact where the financial services and the housing market were allowed to develop unchecked with little regulation & few questions asked - though what Labour got out of it is questionable. Pehaps the Kudos amongst journalists that they had left their 'cloth cap and smoke stack industries' image behind.

 

I suppose the ideal is that there would be a balance between the different sectors of the economy and different regions of the UK.

[I1L2T3]

'But the conservatives were happy to attack ...' - Blame it on Maggie!- It must be her fault! :hihi:

 

Do you remember when the Union Convenor at Cowley had his car searched (random search, standard procedure) and the security people found his golf clubs and clothes in the boot? - Just in case - in the really unlikely event - that there should 'happen' to be an industrial dispute that morning, then if (very slim chance, of course) he should call them out on strike he wouldn't have to bother to go home to get his kit.

 

Everything was quite obviously Margaret Thatcher's fault.

 

I agree that the country should not have concentrated so heavily on the financial sector, but the failure of British Industry wasn't solely due to the Tories; indeed the blame should be spread around fairly widely.

 

Having said that, I hope the present government does encourage manufacturing industry and I hope it encourages exports, but I don't see how anybody might think it would be a really good idea to drive out the bankers first.

 

As for 'practically owning some of the Big Banks' which ones? The Government owns about 65% (?) of Lloyds, so presumably they have a lot of control over that bank, but there are plenty of others who may be ready to move.

 

It's easy to dismiss a suggestion that the banks might move as 'bluster'. I wonder what the countries they moved from (not so many years ago) said when they threatened that move?

 

Simple point. In the 1980s the Tories were happy to attack certain industries to bring about structural change. No baggage. Don't have to mention Maggie. It is what happened.

 

As for financial institutions leaving. We'll see. It may have escaped you that the IMF is pushing for global taxes on banks, plans that were presented to the G20 in April. All Osbourne is doing is introducing taxes that will be introduced in other countries so wherever a bank decides to go the taxes will still apply. Two types of tax - a levy (which is what our banks may get to begin with) and a tax on profits and pay (which they may get now, or more likely later). It genuinely is all bluster from the banks.