The 2010 Emergency Budget thread

[taxman]

I know how many digits there are on a hand.

 

Considering Cleggeron sent a message to all Civil Servants asking them for ideas on how to make cuts, doesn't inspire any confidence they know what they have promised to do either.

 

I got my letter from the pair of jokers on Thursday. They've plucked the 25% figure out of the air without any basis or plans on how to implement it.

[I1L2T3]

What makes you so sure they are achievable? and even if they are achievable the cuts in immigration officials, tax inspectors, social workers etc is neither desireable nor necessary. Indeed it is in most cases counter productive.

 

Here is a pretty damning assessment from Forbes. Not only will this budget move us in to a double dip recession, it seems designed to create a depression.

 

http://www.forbes.com/2010/06/22/george-osborne-emergency-budget-markets-united-kingdom.html?boxes=marketschannelnews

 

Ah, but it will be Labours fault whatever happens

[Twiglet]

I got my letter from the pair of jokers on Thursday. They've plucked the 25% figure out of the air without any basis or plans on how to implement it.

 

And you probably know as well as I do that this is a piece of political propaganda that means absolutely nothing because behind the scenes they're already implementing everything anyway.

[Wildcat]

Their intention appears to be to increase suffering and with unemployment expected to rise to 4 million as a direct result of their policies how is penalising those made redundant and unable to find work going to help? the £100m a year raised by the measure will do nothing to reduce the debt.

 

There are some real little horrors buried in the fine print of this Budget.

 

Just take the measure to cut housing benefit by 10 per cent for anyone on the dole for more than a year.

 

The crackdown on the workshy only raises around £100m a year. But it is as tough as nails. It basically delivers an ultimatum to hundreds of thousands of long term unemployed: find a job or move house. This is the Cameroon version of “on yer bike”.

 

The average local housing allowance claim is around £110 while the average for social housing benfit is around £90. So the measure will basically knock £10 a week, or £500 a year, off the income of a JSA claimant living on £67 a week.

 

For those without kids or the ability to rely on the income of a partner, this will mean they’ll struggle to stay in their homes. Being forced to move also raises all sorts of administrative complications (with waiting lists and benefit switches) that I’m sure the Treasury haven’t fully considered.

 

Working back from the Treasury figures, it looks like around 200,000 people will be affected for at least a year. The Treasury put the figure affected for at least a month even higher, saying one sixth of all housing benefit recipients will be hit.

 

Sure, it is an incentive to move to a part of the country where they’ll find more work. Opinion polls show there’s lots of appetite for cracking down on benefit scroungers. But the coalition can hardly claim this measure is cuddly and progressive.

 

http://blogs.ft.com/westminster/2010/06/osborne-says-on-yer-bike-to-200000-jobless/

[Bigthumb]

Perhaps it is you that don't get it?

 

If public debt was 300% of GDP we would be in a worse situation than we were in the 50s when it was 200% of GDP, but we aren't, the current level of debt is 62% of GDP.

 

Your figures are obviously way out of date.

 

http://www.independent.co.uk/news/business/news/nationalisation-pushes-debt-to-100-per-cent-of-gdp-960334.html

 

Part nationalising the banks put government debt beyond 100% GDP 2 years ago, and as Darling's budgets had planned for this debt to carry on mounting at 11% each year through the next parliament we would certainly be approaching 200% by then.

What makes the situation worse than it was in the 1950s is the population also have massive debts this time around. That is another £1.7 trillion, or about 130% GPD on its own.

 

For those interested in history we had rationing in the 1950s and purchase tax (VAT) was increased to 66%.

[Wildcat]

Your figures are obviously way out of date.

 

http://www.independent.co.uk/news/business/news/nationalisation-pushes-debt-to-100-per-cent-of-gdp-960334.html

 

Part nationalising the banks put government debt beyond 100% GDP 2 years ago, and as Darling's budgets had planned for this debt to carry on mounting at 11% each year through the next parliament we would certainly be approaching 200% by then.

What makes the situation worse than it was in the 1950s is the population also have massive debts this time around. That is another £1.7 trillion, or about 130% GPD on its own.

 

For those interested in history we had rationing in the 1950s and purchase tax (VAT) was increased to 66%.

 

They come from May this year.

 

http://www.economicshelp.org/blog/uk-economy/uk-national-debt/

 

I can only assume that the Independent's figures include future pension liabilities, which is a cheat because there is no borrowing for them now and including them would make a comparison with any other figures invalid because they won't be included there either.

 

In the words of my article:

 

pension liabilities are not things the government are actually spending now. Therefore, there is no need to borrow for them yet. It is more of a guide to future public sector debt. I don’t accept the fact that future pension liabilities should be counted as public sector debt.

[Bigthumb]

They come from May this year.

 

http://www.economicshelp.org/blog/uk-economy/uk-national-debt/

 

I can only assume that the Independent's figures include future pension liabilities, which is a cheat because there is no borrowing for them now and including them would make a comparison with any other figures invalid because they won't be included there either.

 

In the words of my article:

 

Oddly enough most people think that we will have to pay for black hole in the public sector pensions fund, unless of course the public sector workers are prepared to take a cut in pensions like the rest of us or dig a little deeper into their own pockets and pay for it themselves.

 

In the 1950s, as you well know, there wasn't a shortfall in the public sector pensions pot.

[Wildcat]

Oddly enough most people think that we will have to pay for black hole in the public sector pensions fund, unless of course the public sector workers are prepared to take a cut in pensions like the rest of us or dig a little deeper into their own pockets and pay for it themselves.

 

In the 1950s, as you well know, there wasn't a shortfall in the public sector pensions pot.

 

That may be true but the Tory set up Office for Budget Responsibility showed that long term the costs of Public sector Pensions would go down as a proportion of gdp, below what they are today. So there is no black hole. They did say the costs would increase in the short term, but the reasons for this is the pay freeze and redundancies planned that will increase the net cost by starving the taxpayer of employee contributions.

[Bigthumb]

That may be true but the Tory set up Office for Budget Responsibility showed that long term the costs of Public sector Pensions would go down as a proportion of gdp, below what they are today. So there is no black hole. They did say the costs would increase in the short term, but the reasons for this is the pay freeze and redundancies planned that will increase the net cost by starving the taxpayer of employee contributions.

 

You are dreaming my friend. I have better things to do with a Saturday than waste my time if you can't be sensible.

[Wildcat]

You are dreaming my friend. I have better things to do with a Saturday than waste my time if you can't be sensible.

 

Check it out for yourself, the link explains it and it contains a link to the report so you can check the references:

 

The OBR have a new projection of the future cost of public sector pensions on this basis, which has been ignored today. Here are its projected figures taken from para 5.26 of the costs of paying public sector pensions (ignoring contributions) as a % of GDP. This figure looks to me as if it has been has been revised downwards from previous HMT estimates:

 

Public service pensions % of GDP

2010 1.8

2020 1.9

2030 1.9

2040 1.8

2050 1.7

 

http://www.leftfootforward.org/2010/06/misplaced-outrage-over-gold-plated-public-sector-pensions/