The 2010 Emergency Budget thread

[emma royd]

Interesting article on how this is going to increase child poverty:

http://www.touchstoneblog.org.uk/2010/06/budget-claims-on-child-poverty-do-not-stack-up/#more-8493

 

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No it isn't. It is a left wing sponsored blog put out by the TUC to help Labour try to undermine the newly elected government.

 

You are attempting to pass off left wing propoganda as fact.

[Mister M]

The main reason behind the 2010 Emergency budget is undoubtedly the credit crunch, in which the British banks played a big part.

 

Andrew Grice of the Independent has broken down the cost of the banking crisis. It's going to cost the British taxpayer £850 billion.

 

It's sickening reading but worth persevering nonetheless.

 

http://www.independent.co.uk/news/uk/politics/163850bn-official-cost-of-the-bank-bailout-1833830.html

 

Incidentally I wonder if one of you brainy people out there could explain to me (or provide me with a link) what would have happened had the state not intervened. Would things have been any different?

[Rupert_Baehr]

... what would have happened had the state not intervened. Would things have been any different?

 

Well, for a start, the country would still be deep in a recession.

 

I certainly wouldn't argue that the country relies far too heavily on the financial sector, but given that it does, then had the government allowed that sector to fail what would have produced the (albeit not very impressive) recovery?

 

The one thing that really annoys me is that the banks are still paying themselves huge bonuses. They were given financial aid to help them get back on their feet and to allow them to do the job they were supposed to have done - to ensure a safe but adequate supply of finance to the rest of the economy.

 

Instead of which they have continued to pay themselves massive bonuses, which may be one of the reasons they don't appear to have money to loan to business.

 

Why did the last government allow them to do that? When is the present government going to stop it?

[Wildcat]

Well, for a start, the country would still be deep in a recession.

 

I certainly wouldn't argue that the country relies far too heavily on the financial sector, but given that it does, then had the government allowed that sector to fail what would have produced the (albeit not very impressive) recovery?

 

The one thing that really annoys me is that the banks are still paying themselves huge bonuses. They were given financial aid to help them get back on their feet and to allow them to do the job they were supposed to have done - to ensure a safe but adequate supply of finance to the rest of the economy.

 

Instead of which they have continued to pay themselves massive bonuses, which may be one of the reasons they don't appear to have money to loan to business.

 

Why did the last government allow them to do that? When is the present government going to stop it?

 

France and Germany favour a Tobin tax, why not the Conservatives?

[Tony]

That's rather a sweeping generalisation and neither does it take account of the fact that the € is in trouble, not the £. It has nothing to do with good fiscal policy. Brown liked it simply because he had run out of money from all other areas so the idea of yet more indirect consumer taxes to prop up his ongoing financial failure was very attractive.

[andyofborg]

 

Instead of which they have continued to pay themselves massive bonuses, which may be one of the reasons they don't appear to have money to loan to business.

 

Why did the last government allow them to do that? When is the present government going to stop it?

 

in truth, there is very little they can do to stop them.

 

some banks have contractual obligations to their staff to pay bonuses. they would have to renegotiate those contracts of employment to stop.

 

legislation to prevent this would be almost impossible to write and enforce.

 

and banks that have not taken any government help will probably feel quite free to ignore the governments protestations.

 

the people to force these changes are the banks owner's, the shareholders, though in general they seem to have been absentee owners, content to take the money but take no responsibility.

 

while the government does have a significant shareholding in one bank, and minority holdings in others, so they could try and push these changes through but whats the point when all the other banks are doing the same.

[andyofborg]

France and Germany favour a Tobin tax, why not the Conservatives?

 

because they favour what osbourne announced this week.

 

the idea behind it isn't such a bad one. the highest payers will be the ones who have the riskiest funding models, the lowest payers will be the ones which have the safest funding model, which is how it should be.

[L00b]

France and Germany favour a Tobin tax, why not the Conservatives?

They would: their respective financial sectors are in much worse shape than the UK's.

[andyofborg]

That's rather a sweeping generalisation and neither does it take account of the fact that the € is in trouble, not the £.

 

at the minute, once the market has had enough of savaging the euro they will turn their attention to sterling.

 

has harsh as it was, this weeks budget was, to some extent, aimed at trying to prevent this.

[Twiglet]

In economical terms, it's only a 'real bad news' if your prophecies come to fruition and, essentially, that was the choice faced by the Chancellor (the same amount has to be saved over the same time period, regardless of how to get there): cut more now and promote growth through business activity from the off, or cut less and promote growth through business activity less or later.

 

 

It is going to come to fruition, the cogs are already turning. It's mind blowing to even think that potentially, another 1.75 million people could lose their jobs, at a time the government is making it unacceptable to be unemployed. This doesn't just affect civil servants, it's all public sector workers (except those in the NHS and international aid). 25-30% cuts (to compensate for the ring fencing) across the police, frontline services and the arms length government bodies is likely to be catastrophic.