* News * Politics * Economic policy Ministers admit family debt burden i
 

http://www.guardian.co.uk/politics/2...res?CMP=twt_fd

Not looking good the torries want us to get into debt to help prevent private sector going down with public sector. To do it shift the debt of the government to ordinary people to increase debt there hold on mortgages/credit cards etc.

So in effect credit crunch 2.

So this what austerity policy come down to feel its admission they are failing.

Theyre scared we going into the big depression something like the 1930's we need to head it off. To do it by spending our way but they wont do it as it would be egg on there face.

Questions will be undoubtably raised was the cuts too deep too quick personally I think so.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

If your household, due to poor financial decisions, was suddenly in debt where the level of interest payable was horrendous, your household would have to suffer cuts to get out of the hole, despite rising prices for necessities.

Borrowing more would only make the situation worse, so the answer would be a short period of severe austerity to minimise interest payments, or a longer period of medium austerity handing over more of your cash to the banks in interest payments.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

Spending our way where? Down to the IMF with a begging bowl?

You know, if there is likely to be anything entertaining about the financial mess we're in, and the difficult five years ahead as we get out of that mess, it will be the re-emergence of the loony left with all its ill-conceived, un-costed and batty ideas.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

does the predicted figure of £77,000 debt include mortgages ?i assume so and given that is correct i don't think that's bad ,if they don't then it is horrendous

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

They aren't as deep as they will be if the country nearly goes bankrupt (as happened in Ireland and Greece).

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

It is indeed a complete mess up.

What they should be doing, of course, is cutting public sector harder and more broadly, reducing rather than increasing taxation and allowing both public and private debt to be deleveraged simultaneously.

Sadly of course the nation is so public sector horny now that we refuse to entertain funding cuts to some things and the Lib Dems and Dave's pretend Tories are so busy trying to be 'progressive' that they're basically doing a Labour-lite.

The cuts were not too deep nor too quick, and it's interesting that for all this concern over cuts I don't remember there being much concern when the expansion in the public sector that they don't really roll back very far was being done. Quite the opposite as I remember all political parties and many people thought it was great.

Feel the pain mertle. For me personally I'm simply lowering my standard of living appropriately to ensure that I do not incur additional debt, indeed I'm actually paying debt off.

The worst part about it is, to be honest, that it will further pressure interest rates to remain unnaturally low, holding inflation higher.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

What Mertle seems to forget is that those who lend us the money to fund our spending don't do it out of love and won't keep doing so (or will at least charge a lot more for so doing) unless we can show we're taking this issue seriously. Contrary to what Brown evidently believed, borrowing isn't a bottomless pit and our international credit rating is now under severe pressure. Unlike Joe Soap who runs up a credit card bill and can conveniently walk away if he can't pay, UK PLC can't be seen to do that - certainly without facing very grave consequences for us all. IIRC we're already spending the equivalent of the entire education budget just servicing the interest on our debts!!! Do we really want that amount to increase??? That's the real world and those who still can't accept that we live in it really need to wake up.

http://www.debtbombshell.com/

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

That is what is costing us dearly a quick google threw up this

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

a scary number that will undoubtedly get bigger before it gets smaller .Saving that interest payment or even half of it would go a long way towards restoring sevices that have been cut so the quicker we can get rid of that burden the better imo .

I don't understand why people can't realise that the uk's budget works exactly the same in principle to a house hold budget ,this year i will be using any tax refund i get to reduce or if possible get rid of the majority of my debt ,(i don't have a mortgage so my debt is relatively small)but in doing that i hope to free up more cash to keep in the bank for the lean times i know are just around the corner ...no holidays or big telly for Martyh :) but i will have the security of no or not much debt

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

After more than a decade of governmental profligacy, too many people have become used to spending what they don't have and being able to walk away if/when they can't pay and start again. It's not quite that simple for UK PLC to do that and any bail outs will come at massive cost as the Greeks and Irish have found out.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

exactly ,and if that happens to the UK then people will think the dark ages are back

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

I not saying dont cut I am saying do it at pace the country can support this slash and burn will get us in worse mess.

Why has the torries let there rich budies off the hook with there debt to taxman.

Not long back Vodaphone was allowed to negate on 6 billion of debt.

That could been 6 billion softening of cuts and why is frontline services going ahead greedy rich people who on staggering wages.

So kick the hell out of the poor/working class while letting there rich friends get away with blue murder not the right way going about the situation.

If we claimed 60% owed from these we would be significantly in less a mess but hell lets look at closed narrow tunnel vision.

There alot been brainwashed to horrendous levels makes feel that this country not proud to live in with all this selfishness atitudes.

There alot balony being peddled by papers to drive witchunts and persacution. In the 40's it was the jews today its the vunarable, disabled, poor and elderly.

Lets be narrow minded while we see the torries bring capitalism to our shores and before you start moaning of american style state.

While you see more and more billionairres cream the money away in the world. While the do this we are all suposed be grateful they put bread on the table with few jobs here and there. These billionairres know what theyre doing to try justify theyre rape of the world finances. They all starting to agree to give charities 50% of theyre wealth, 38 have signed up. Stuff the charties start producing the jobs stop the cuts that maximise profits. Its nice gesture but jobs is whats needed do this stupid government think a profit driven private sector will take the slack.

You already see the signs of these companies moving to cheap low paid nations all due to they wont pay a fair wage.

Mark my words it will get worse until the worlds governments work together against the people.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

With the protestations so far you'd think they already were.

Not actually that far away relatively, the coalition isn't going to do enough, they will bring borrowing back below GDP growth by 2014 according to the OBR. So we will still be accumulating debt, just by then predictions are that debt will be shrinking as a % of GDP.

By this time of course depending on which measure you look at the UK's debt and unfunded liabilities then add up to anything from around 80% of GDP to 400% of GDP.

Government and individuals lived beyond their means over the past decade. Government is going to, in a small way, start working towards living within its means, individuals have to do likewise.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

The problem when you have so many of the public refusing to accept that the good times of unlimited credit are over and refusing to give up a lifestyle they cannot afford and was paid for on credit they will never accept the idea that they cannot have it anymore .The longer it takes to get the loan payments down the longer we will have to have reduced services .
I have posted a link showing the interest payments for the first half of 2010 ,21 billion ,that is only the interest for half of the year ,it does not include any actual repayments of borrowed money the sooner we get rid of that the better for UK PLC

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

Ah the #UKUncut spiel.

Vodafone didn't have a debt of 6 billion, that figure was never actually the case. The tax man got a billion out of Vodafone and were potentially entitled to nothing, Vodafone paid tax on that income elsewhere in the EU, the UK didn't fancy the trip through the EU courts to try and justify a part of the UK's tax code which is potentially incompatible with EU law.

The rest 'owed', as always with my responses to UKUncut, if you can demonstrate that companies have evaded tax, which is illegal, you should be going to HMRC.

http://www.iea.org.uk/publications/r...eb-publication

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

Quite. It always seems strange to me that those who remind us of the vast underpaid armies of workers in India, China etc. argue that our people deserve to be better off but don't seem to accept that we're in competiton with those nations. Unless we become more competitive they'll continue taking our jobs and the wealth that goes with them. Things may be bad now but unless HMG gets to grips with our debt things are going to get a whole lot harder for us all.

As regards UK Uncut - I was listening to a spokesman for them a few weeks back banging on about the banks etc. and setting out how the UK's problems could be solved by getting tough on them. When faced with a financial expert it soon became clear he really didn't have a clue what he was talking about but of course there are plenty out there who believe what they want to hear and buy into the simplistic nonsense these people talk......

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

Osem one problem with that that is EXPENSIVE britain. At current we would never compete even if we cut our national spending to the bone.

The land and property prices so grossely inflated beyond any reasonable sense.

The government got options devalue it might not be popular but we got to consider driving those prices down. London and the south been huge culprit with it commuter belt pricing. So wages have to follow in line sp people not just afford morgages but even just to rent property around place of work. To cap it companies end up paying over the odds too.

Blame successes of governments to not keep the housing market and estate agents in line. Some will say aha its only the value that people willing pay but it seems all its done shove wages higher estate agents see more milking and it keeps spiralling out of control.

The rest of the country now see also prices starting get silly even in predominant poorer areas. I saw terraced house where usually it was 50k I am now seeing 100k and one in not brilliant area 160k:shocked:. You would be bananas to buy terraced 160k when you get semi or detached or bungalow similar priced better location.

It just crazy greed.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

I think many people would agree on the point about the cost of housing. It has become utterly ridiculous. Not sure you can blame estate agents though, I think the people with the actual money to spend are the ones who have been happy to push prices ever higher. As a nation we have become used to the idea that we can expect to make endless profit by working our way up the property ladder. Some have observed that house prices are the one part of the economy where everyone seems to think that rampant inflation is a good thing.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

i would agree that house prices are a driving factor for higher wages therefore higher prices but without actualy forcing prices down with capping i can't see what we can do about that because so many people use there homes to either obtain credit or as a pension fund

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

There's little doubt property prices are too high but given the large proportion of debt linked directly to them, driving prices lower will result in negative equity. Furthermore, many people have scrimped and saved over the years to own their houses as some form of security and asset for their old age - they won't be too happy about that asset being significantly and deliberately devalued. Stock market uncertainty, low interest rates and doubts about the security and value of personal/private pensions all add up to make property a more appealing long term investment and I know plenty of people who've ploughed money into property to provide what amounts to a pension or security blanket in the event of redundancy.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

mertle, given your comment about how things would all be fine if companies would pay their taxes do you have any comment on the link I posted, or the very simple fact that none of these companies are engaging in illegal tax evasion and have paid the taxes that are due?

Or that >70% of company taxes are paid by customers and staff, as noted by that link?

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

The article, in the third paragraph, does highlight the expectation that the shortfall in income will be taken up by increased personal debt which implies that people will rather borrow than accept a lower living standard.

If that assumption is the basis for Osborne's hopes for private sector growth then he needs to do a 101 course on mass human psychology. The opposite is the most likely effect with people taking austerity measures on the nose and through fear going beyond that and salting a little away for the many rainy days to come.

The more dire consequences are that the "hoped for" resurgence in the private sector will not take off at all but may sink with the public sector cuts and more importantly the public mood will become bitter and resentful. Bitter people who have been compelled to go from prosperity to austerity are militant people in the making and the TUC turnout shows that many are well on the way to bitterness. Give it time and we will not be able to keep up with the number of concurrent strikes.

We are not an island unto ourselves when it comes to economics and our fate may well lie in what the USA does when their QE phase ends in 12 weeks time. The expectation is that interest rates will start on the path back to reality and the default is that we will be compelled to follow. If that comes to pass then the pressure on mortgage payers will be excruciating and the natural reaction is higher pay demands.

An awful lot of the coalition's ideas are based on little more than "hopes" based on static expectations in a dynamic world. They have lasted thus far because their policies were phased but now have to face the potential wrath of the public in the May local elections and possibly icy cold winds blowing from the USA later in the Summer. Labour who by default should never govern again must be quietly confident that they will get back in on a protest vote long before the 5 years are up.

Nothing is logical in this life and as was commented when the ideas were put forward. The public can talk the talk but will they walk the walk, the answer is a resounding no, they never have nor ever will.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

I am not sure how to phrase this, but I've always thought that artificially high house prices are a bit of a lie. They make you think you are wealthier than you are.

The problem is that while it may be true that (for example) you bought your house for £60,000 and it's worth £260,000 now, so on paper you are £200,000 better off, if you actually move, you'll probably find that other houses have increased by a similar amount (unless you move to a cheaper area), so you've actually made little or no profit, or even a loss after you take into account solicitor's fees.

The only time you might actually be generally better off if is if you actually buy another house. That way, you actually can capitalise on rising house prices because you don't have to buy another to replace it if you should sell it.

How many people can afford to do that though? Not that many thanks the high house prices.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

You hit nail on the head there its false economy its likes to make you believe that your 200k home is money in the bank. The only people to get benefit is those who down size ie 4 bedroom house to 2 or 1 as family grown up fled the nest.

I think its all been driven by few who shown by buying and selling property they become millionaires. I read somewhere a couple had done 26 moves to go up the ladder to make the million tag but its rare.

So question is how much impact would devaluation do would the benefits outway the negativies. Problem is the perception that we all would lose money but the fact those moves would be cheaper as house prices take a hit.

Yes Osem the economy is on mortgage lending not sure its right way either. There needs to be balance which makes the country as whole less expensive. Maybe people do use it to fund pensions.

Problem is we dont address it do nothing where will the country be in 20 years. Wages will have to spirral to compete with the upturn of mortages but the problem is rental occomodation tends to follow as either private landlords or council/housing assoc try recoup there outlay.

In reality people got into mortgage lending when theyre income levels dont support it but who created the moto every one should own there home.

I think this legacy also pushed the market beyond breaking point something goto give for sure.

Ignitionnet not ignoring you sorry that link maybe they did get figures wrong but net result is they still had to chase them for money owed.

Its about time business paid there way how many small firms go to the wall because big business fail to pay. Those who dont go bust they end up trying to goto small claims courts. Big businesses have horrendious atitudes when it comes to paying up its debt. They also know governments/businesses can be reluctant to take them to court and end up settling out of it. Again it still dont make it morally right.

The other example on Green not good one just because he used clever accountants to negate his tax obligations abusing loopholes dont make it right.

There too many loopholes to cheat and many if not all need shutting.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

They didn't chase them for money owed, there was a dispute about how much was owed.

Vodafone set aside 2bln in the event they had to pay the full amount. They were doing what a company is supposed to do, legally maximising shareholder returns. In this instance there was a legal ambiguity which HMRC didn't want resolved as it will likely cost them a lot of money if it's resolved against them.

Why are small businesses going to the wall because of larger ones? The entire country doesn't run on the proceeds of taxation and we, from the biggest company to most individuals, pay far too much tax. Small companies have their own tax wheezes just as large ones do though obviously at lower scales.

The economy isn't based around government, or shouldn't be anyway, that the previous government decided to make it that way and the fallout shows just how utterly broken that model is.

You've gone back to the old 'fallback'. About how it's 'morally right' for them to pay more tax. It might be, but given your complaints about costs and the noting that at least 70% of that extra tax will be born directly by these companies' customers and employees I would suggest the only morally right thing to do is for government to stop troughing, get out of the way, let those who want to work and become wealthy get wealthy, get those who don't want to work into work whether they like it or not by ensuring that welfare doesn't reward laziness (Welfare To Work) and use the wealth generated to take care of those who cannot work while minimising the tax burden and ensuring people have more money to spend and invest.

TLDR: It's not my fault some stupid girl decided that becoming a baby factory was a viable career, or that some illiterate numb nuts didn't pay attention at school, I shouldn't be footing the bill either directly or indirectly via a 3rd party for their Sky TV.

---------- Post added at 13:03 ---------- Previous post was at 13:00 ----------

One big driver was Gordon Brown's raid on pensions making investment in property, rather than traditional pensions, an apparently viable way of saving for retirement. http://www.thisismoney.co.uk/pension...5&in_page_id=6

Taxation once again screwing things up.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

Ignitionnet I dont mind people getting rich but the have duty to provide jobs this where we seen big imbalances all over this country. Jobs have been cut not because not being affordable but to maximise greed. There needs to better incentives to make private sector create the jobs the country needs.

There is also not enough manufacturing industry we got imbalance to service industry too. Lots of consumer led industry which relies on people create jobs to spend for goods/food etc.

I think this why rightly the purge to public sector jobs to balance it but also have to solve why it happen in firstplace. It happened to elevate the slack from private sector job cutting. Effectively the motto getting people off the dole into jobs. Problem is you have to give them a wage so the balance again is wrong too many public sector jobs caused our mess. I also think there issue about paying top up wages to low paid family credit to company staff which those companies could easily offord to pay the going rate themselves. Maybe means test the credit to whether companies can pay minimum wage. Regulate the situation fine companies who dont to the line.

The problem is this not just labour fault its been every govenent ignored the warnings. Every government stuck there head in the sand hoping it would go away passing the buck hoping it would not blow up on there watch.

Yes there all to blame for the fiasco in housing market believing a false economy that it would boom and boom without the consequences of the future.

Its not rocket science that if your housing is too expensive to competitive market then it has knock ons. That is companies has to push prices up as they have to give sensible wages even cut staff to pay bigger wages. Then have less chances to compete against rising countries on the up where labour cost much lower due to living in shacks. Brown was an idiot to suggest it but analysists, papers and governments before and since ignored the problems that out of control housing market would create. Everyone was guilty.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

The trouble there is that there are a few companies (Tesco, BT, HSBC etc) who have a tendancy to threaten the government if the government does something they don't like. Fairly certain that forcing them to employ more staff would be one of those things.

Another problem is that the government (in the 80s) encouraged companies to move their manufacturing operations abroad, apparently meaning for the UK to rely on service industries to finance our economy.

Then, the Government in the 90s encouraged outsourcing of a lot of service industries. Note: I don't think any government overtly encouraged anyone to outsource, but the Governments of Margaret Thatcher and John Major make it a lot easier to outsource manufacturing, and the government of Tony Blair apparently made a lot of changes to the law to make it easier to outsource services.
The problem is that successive governments did just use the house prices to tell people how well the economy was doing. All the time they were doing this, there was no will to reduce prices (it would have made the economy look like it failed).

Even now, I don't think any government could do anything to massively reduce the price. Certainly not if it wants to survive until the next election. They've spent so long telling people that the value of their house is a good indicator of how wealthy are that any attempt to reduce that value (even by 10%) would be enough to pretty much guarantee someone launching a no-confidence vote.
Add to that the cost of Land. All those workers are going to need somewhere to work, and the house prices are driving Land prices up as well.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

Scenarios.

1 - cut spending brutally and lower taxes, ignition's idea. This is a one way street to recession, economies grow on spending, cutting public spending will shrink it. Tax cuts mean spending has to be cut even further to balance the books. This will mainly course a disproportionate gain to the wealthy. After all taxation is enforced spreading of wealth for the benefit of the majority.
2 - maintain spending and taxes, sounds ok except there is a deficit to fix so not viable long term.
3 - increase spending and taxation. Taxation would have to increase more than spending to balance the deficit, could be doable with income tax increases as they are very low compared to historical levels. Would likely trigger a recovery but could have longer term consequences.
4 - increase spending and reduce taxation. Fast track to IMF :)

Of course a number of basic problems need fixing, if these get fixed somewhow then the rest will fall in place.

1 - wages falling behind living costs, so basically 'real' inflation exceeding income levels. This has been a problem for a decade or more at least, hence the reliance on debt to get through life.
2 - unbalanced economy and investment, certian parts of the country clearly significantly more wealthy than others and this is not been helped by certian areas been a magnet for investment and others not touched.
3 - unregulated capitalism. Its basic maths. If someone gets richer, then someone else is getting poorer at the same time. There is limited money supply which means there is no such scenario where everyone wins. If you track the wealth of billionaires during recessions it is not uncommon to see them see large growth during those periods in comparison to booms. I am not calling for communism, but its clear there needs to be a manipulated shift of some form to transfer wealth from the few rich to the majority poor.

All of this is unlikely to be fixed and especially #3, so government's choose a easy cop out. They make credit easier and as such introduce new money so the rich can see their growth without giving it to the poor, instead the poor just borrow so they can spend. Notice how governments consider it a priority to get things right for the banks to loan out again, thats how they see a recovery.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

Not quite as oversimplified as some of your points but the basic premise, that cutting public spending and taxation is a one way street to recession, is incorrect.

Economies should grow on production of goods and services more than spending, money being taken in tax isn't being spent efficiently but is funding whatever overheads are required to collect and distribute it along with overheads on the services that it may or may not be used to provide. It is precisely that dependence on spending that you are advocating that was the cause of the bust - as a country we weren't producing we were just spending what we had, then what we didn't have.

If the 'majority poor' want to become wealthier we aren't totally averse to social mobility here - I was raised by my grand parents, one a bar maid the other a truck driver, and am typing this from my hideously overpriced flat in Twickenham's Riverside district.

I absolute don't see why the money I have worked to earn, and worked my way up through my career path to earn, should be redistributed to those who either can't be bothered to work or don't wish to better themselves. The state should supply a safety net to ensure a standard of living, it is absolutely not its job to ensure the rich are less rich that will only result in the poor becoming poorer.

So dealing with the 4 scenarios you mentioned objectively:

1 - Would cause pain in the very short term while private sector investment lagged however would in short-medium term and beyond result in higher growth and everyone being wealthier, just as happened with Thatcher whether we may like it or not all demographics were better off at the end of her tenure. Wealth tends to lead to more wealth, that's the way of things. The biggest thing that can be given to those who are poor is opportunity.
2 - Unviable. A public sector of >50% of the economy will slow growth - note how the previous government's 'growth' was basically all public sector and asset bubble. Crowding out the private sector while using their money to fund the crowding doesn't work.
3 - Would be an incredibly bad idea. Due to much increased levels of competitiveness and mobility among the work force excessively high income tax rates would likely lead to a loss of revenue as those paying the most are able to most easily leave or make alternative lower tax arrangements for their earnings. The income tax base has been shrunk and already our taxation rate, if you include the income tax in disguise that is National Insurance, is quite high enough thank you.

I don't like the idea of simply giving those who are less rich money in the name of equality. It seems quite obvious we come from very different points of view on this - as someone whose wealth, entirely earned through work, you advocate redistributing I'm inevitably not going to agree. The tax man eats 37% of my income from my pay slip and then some more of it that would be in my pocket from employer's NI - over 3% more.

Putting it another way we're in the first week of April - I still haven't earned enough to pay my tax bill for this calendar yet, will take me until May.

I would also suggest that a major problem that needs fixing is the amount of long term unemployed who are intentionally so, and a welfare state that offers little motivation to attempt to find employment to many and promotes being a baby factory as a career with decent earnings and housing prospects.

---------- Post added at 17:23 ---------- Previous post was at 17:17 ----------

Or they want the banks lending to businesses to improve their liquidity and make it easier for them to purchase the goods and services they need to operate. Sorry to ruin the socialist rant with that inconvenient fact and all that.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

the thing is it creates a false economy.

a business could run for years surviving just on overdraft's and thats what many were doing, and hence a load going bust when the bank wanted it smoney back.

debt to increase liquid assets is fine when the company has the ability to pay it back, but that wasnt the case.

you also said yourself inflation is a problem, and creating money via debts is a prime cause of inflation as everytime money is created then the value of it drops.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

That applies to governments as well as businesses and individuals....

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

to an extenct, governments can do things that business and individuals cannot tho. They can certianly do a lot more than previous ones have done but its political reasons like wanting to stay in power that stop them.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

But the previous government didn't - it spent money it didn't have, and eventually the free-for-all has to stop, and we have to live within our means as a country (slightly frightening that borrowing over £140 million per day to stand still can be called "living within our means....).

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

Ignitionnet it all right blowing the trumpet of Jobs and more Jobs but where is these jobs going to come from when Private sector not creating them. Especially when they are driven to excessive profits which they have no intention off using to expand create jobs. The Greed mentality is just as damaging as the the mentality to live with the jones as they say.

Not talking about these stupid jobs like telephones sales which seem to irritateg people on cold calling. Proper jobs which will get the country back on the feet. I read an analyst say that most jobs are temp and part time but very few full time long term jobs are being made. Which has too be worry for the country.

You got to remember why all these quango jobs and increase public sector jobs was created to alievate those lost Private sector jobs. The unemployed would be horrendous without the drive which actually initially started by the tories. Sadly we may have to accept some will always be unemployed with modern society. I think full employment is impossible dream. There lots factors which I posted in another thread mechanism, 12 hour shifts it all erodes jobs.

Those issue wont go away its been worse when companies will move jobs to abroad where labour market is cheaper. Unitl we do something about Land and housing false economy JOBS wont come unless the following but is morally right.

Aha we might solve it by making english slums where very poor live in tents and shacks. Dont get anything so willing to work for a pound a week in work houses and go begging in the streets or worst robbing rich and murdering.

It was called the victorian period and it seem some people want it to return.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

Nothing like a tirade full of emotive statements to liven up the debate.

Nobody want the Victorian period to return, but neither do we want to be in the same boat as Eire or Greece.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

not the same situation, the government has the means to pay back what its borrowing, I agree the deficit is at a high level but its unrealistic to expect to have no deficit. It also has mechanisms it can call up on for a increase of tax revenue should it be needed. Quite simply put a government shouldnt be compared to a business, another mistake tories tend to make they try to run it like a business.

Mertle made a point which you havent answered, he basically saying the same as me in that these jobs are not going to just appear. It is a global market.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

erm, how has the government the means to pay back what it is borrowing?

The only money the government has is taxes, and we have a shortfall on those at the moment - should we raise those?

Re the jobs - encourage private industry to thrive, which will create more jobs; like it or not, we are a service/creative industry hub, as we cannot compete in (many) manufacturing areas. Just creating more public sector jobs builds a larger deficit - we need a reasonable sized public sector, but over 50% is not, imho, reasonable sized.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

The government could raise taxes tommorow if they wanted to. The reason they not is quite simply there is no real need to for how they want to run the country.

Dont think you think its a sad state of affairs we only have a service sector, which is basically supermarkets, takeaways ,that sort of thing. A nation full of shopkeepers :( A creative industry is and never will be a mass employer.

Ultimately if we didnt vie blueprints to chinese factories there wouldnt be a need to compete either, thats just simply companies getting greedy and wanting to cash in on the cheaper labour. Why the UK was viable for manufacturing in the 80s and before and suddenly not now is a question that should be raised, our wage inflation has been low since then compared to historical data.

If I owned a company that was able to make a profit using a uk workforce but then suddenly told me that if they dont go offshore they will go under I would be asking a lot of questions.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

Yes it is a global market and how do you suggest UK PLC competes with that global market unless we make efficiencies, drive costs down and start creating wealth as opposed to borrowing? Having already lost so many jobs (service sector, manufacturing, hi-tech etc.) to the likes of India and China you appear believe that UK workers can still be insulated from the harsh reality and have a God given right to jobs, better pay and conditions. The only way for this to happen is if sufficient wealth is created to fund those jobs, salaries and conditions and why would companies competing in your global market choose to employ people here if the cost of so doing (via tax, regulation etc.) is so much greater than elsewhere? The countless £billions being paid in interest on our debt every year aren't generating any jobs, building any schools or anything else are they. It's money wasted.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

The current level of UK debt is due to the twin evils of gross over spending by the last government and banking stupidity but it is not and never has been the end of the world.

Countries like many of the largest companies operate on a permanent debt basis. The ways of eradicating debt are, paying it down, inflation or liquidation. A combination of inflation and growth has always taken care of debt in the past and unless the coalition has also stopped the economic cycle inflation will help in the future. Growth is the coalition's responsibility but anything in that direction is on their "hope for" list with the last budget showing a small element of afterthought.

IMO we are being conned with the real agenda being wealth re-distribution. There was too much easy distribution of wealth towards the poorer in society but I have no doubt that if all the coalition's agendas are followed through everybody up to the super rich will be a heck of lot poorer but the super rich will see the wealth once again moving towards the concentration of the most in the hands of the few.

Notice how many companies are showing record profits whilst raising prices in the face of austerity. We should be in a deflationary environment where companies compete for the reduced spending power of consumers but somehow suppliers of essential services are bucking the trend. IMO it is blatant wealth distribution.

These are charts which show that the "end of our financial world is nigh" is nothing but political rhetoric to push an agenda. We are led to believe that our AAA rating was under threat. Rubbish abetted by an agency already thought to be worthless as it signed off AAA rating on the USA banks debts that went on to cause a global banking crisis.

We are being conned on the cause and if the public are long term stupid enough to go along with the path to the consequences then welcome to the world of my early life where the poor were poor and the rich incredibly rich with almost nothing in between.

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

Look at the lower chart and see the power of inflating debt away whilst simultaneously growing an economy. The much maligned Boomers paid that debt down at tax levels that hurt.

---------- Post added at 10:53 ---------- Previous post was at 10:35 ----------

We need lots and lots of people prepared to slave away in factories for minimum wage. The fact that they cannot live on what they will earn is an unfortunate detail but at least they will have a job;).

We also need to stop silly aspirations and close universities wholesale as that gives people aspirations way beyond what the economy needs.

I still do not see how we can compete in many areas as consumer electronics are so cheap that for something like a computer hard drive the largest percentage cost factor is not production or shipping half way round the world but the local white van man delivery.

I live in an area where everybody wants to get rich off of every job they do whether it be window cleaning, gardening, plumbing etc etc etc. They have to learn to be poor and realise that their value is counted in small change. Will it happen... of course not but the consequences of trying to make it happen may not be pretty. The Chinese curse of "may he live in interesting times" is just beginning for all of us.

Will the last person to leave UK plc please turn out the lights ( in case the power ever comes back on:)).

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

how does driving wages down whilst having high inflation create wealth?

In truth to compete we need deflation, the dole in the UK is more than the average salary in romania. The difference between ourselves and some countries is immense. But we cannot drive wages down without the cost of living going down with it, it doesnt compute. Taxes for the vast majority of people only makes up a minorty of living costs, so cutting taxes wont be sufficient if the idea was to deflate living costs via cutting taxes. Things like housing costs, food, electric, gas, petrol all need to go down as well.

The truth tho is these jobs didnt need to go, companies were making money without taking such action, however in a capitalist fashion where profit growth is demanded boss's under pressure have made such moves to improve the bottom line. I seen the tricks they pull, when I used to work for walkers crisps in a management position there used to be briefings with shop floor staff and the story went like this. They were told the company made a loss/profit not based on actual profit but rather on profit targets. So eg. if the target was 100million profit and we made 86 million profit the staff were told we made a 14 million loss and hence a reduction of staff on the shop floor as well as compulsary overtime (without overtime wages). Those who didnt sign up for the work time directive were simply let go. Each year the profit target went up without a realistic reason justifying how it could be achieved, it simply went up. Occasionally automation coming in (which reduced the staffing levels) could justify it but not every year.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

How does losing more and more jobs to the likes of India and China because we can't compete with them create anything except unemployment? Nobody wants lower wages but some wages are better than no wages don't you think? Whilst acknowledging the fact that people in many other countries have to work much harder for much less, you still seem to think that people here have a divine right to a certain standard of living even if we don't create the wealth to support that. We're clearly not generating the revenue to match our spending and although it'd be lovely if we could borrow more and more money to keep people's standards of living up we can't do that. Something has to give.

Portugal is now requesting an emergency bail-out as we speak. They've failed to tackle their problems and are now going cap in hand to Brussels to keep them afloat. Do you really think that can't happen here?

http://www.cableforum.co.uk/board/35207852-post43.html

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

Think of it this way.

in terms of GBP for simplicity sake.

Worker in uk gets paid £6 an hour.
Worker in china 60p an hour.
Outsource due to massive saving.

Uk tries to compete drops to £4 an hour.
China still at 60p an hour.

Is that going to stop the jobs been outsourced? unlikely.

What would stop it however is taxing outsourcing or making it illegal. However that would be illegal in itself with eu countries and probably damage trade with others :)

What can hope for is large inflation in likes of india and china so the gap gets closed and somehow deflation to occur here. Unlikely whilst interest rates are pegged down tho.

Thinking about this in the bigger picture the plan was probably more than about saving money, I expect various large companies considered the uk and usa saturated markets, so they deliberatly started a policy of shifting wealth to poorer countries which opens up new markets once the people there get wealthy enough to buy products.

In terms of unemployment I agree increasing it doesnt add wealth, so ask the tories why sacking people is helping the economy as they the ones increasing unemployment deliberatly. Their impatience has led to bad decisions, they should have waited for a recovery and the private sector to pick up (to prove their point) then to start shrinking the public sector.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

What HMG is having to do is save money. They're trying to do that by cutting costs and improving efficiency in those areas funded directly by the public purse. At the same time they're trying to create the conditions in which the private sector can take up some of those jobs and create new ones which don't come at a huge cost to the public purse. It's not rocket science but it does take time and sadly involve redundancies amongst those who've been led to believe their jobs/conditions etc. were secure. The very fact that the markets aren't imploding is the best possible evidence that this action is what the international financiers want to see and that's why our credit rating hasn't yet been devalued significantly. Put Brown back in office with a populist mandate to spend and that'll change and we'll be where Portugal is now.

The reality is that we cannot make companies operate here and we cannot prevent them from leaving if they so wish. There are plenty of countries competing with the UK for jobs, tax revenues etc. It may not be palatable but the only areas in which savings can be made are those over which HMG has control i.e. the public sector. Yes they can try to raise extra revenue from corporation tax and cut avoidance to bring in more money but, as popular as that may be to some, it certainly isn't going solve our problems and may well lead to us losing more jobs and more revenue as companies choose to relocate elsewhere. They've been doing this on quite a scale in recent years so let's not delude ourselves that this won't escalate if the burden on them is significantly increased. The net result of that will be the need for even more cuts in government spending and matters being taken out of our hands. If you think what's being done now is tough just contemplate what that would be like.

We had a government which, for over a decade, led everyone to believe they'd broken the cycle of boom and bust. They had us believe we could spend our way to everlasting growth and prosperity. What a nice thought that is, how popular amongst the electorate to make them believe we can spend money we don't have and get better off in the process. A grand Ponzi scheme if ever there was one! Of course, it didn't work and rather and we're now facing the massive problems we see elsewhere in Europe.

If HMG was like New Labour they'd pretend it can all be done painlessly of course. They're doing that now. Criticising cuts but refusing to say who'd really suffer in their hands. The architects of our 'bust' haven't even got the balls to accept the responsibility for what went wrong, let alone deal with it. In their hands the only growth industry would be begging bowls and they'd be made in China.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

Osem

Simple question do you hand on heart believe private sector will make 2 to 3 million jobs this country needs. We talking PROPER jobs here not part time not temp but proper jobs.

You do realise why Torries and Labour built the public sector is because widespread Autistcy from private sector. Many factors have happened to weaken our Private sector workforce some down to developing countries, some down to Pure Greed.

To exasperate issues the government forcing the retirement UP how the hell that going to help churn of labour. Thats going to really help just because they want people to die at work saving them paying a pension. Firms already saying its wrong to force them to keep workers upto these retirements. It should come down NOT UP. Those in skilled jobs should be kept to possibly give there experience to younger hands. Basically those who got something to give in experience to train others should retire when they see fit to do so else I would have the retirement 60 for all others.

Simply the reality is we going to be faced with massive unemployment burden which for no fault will be blamed as the new lazy people in the coming decades. No doubt hoping to deliberately force them to break rules so only pay them hardship grants save money. Read that they now a deliberate ploy to force people to apply jobs they cant do and try get people to get infractions. Not withstanding the issue about forcing loads incapable disabled into market now employer will ever take on with masses of free labour.

Everything which is going on is absolute oposite what is needed yes the Public sector needs to be rasionalised as it way too much burden on purse. However many places are top heavy with idividuals getting rich milking the cow with stupid horrendious wages. However there not losing there jobs its services and bottom workers. Which SHOULD NOT HAPPEN.

There was case about spending £200 for light bulbs etc I would say it was possibly businesses abusing the situation of guaranteed income from public sector. Not completely convinced it was labour it happen during tory stewardship too. Lots firms abuse the public sector charging more than they should.

You can see right through the deceit of this government and it STIINKS

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

If it wasnt so serious I would laugh at the thought of the private sector creating so many jobs, but I wont laugh as it is very serious.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

mertle, your post is indeed not funny.

In a hurry but one obvious point, wanting people to 'die at work' is nonsense, life expectancy has increased dramatically and the UK, along with its peers, has to make allowances for this in order to try and keep pension costs sustainable.

It's especially an issue for the UK as some idiots decided that people didn't need to save for their pensions and current tax payers would pick up the tab, which is great as the baby boomers retire.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

One problem is that of course some people live so tight that they simply cannot afford a pension. Any system that would be brought in would have the state paying for the poor still.

It is worth mentioning that NI tax income exceeds pensions out costs as well as IB costs, the budgets it is supposed to fund. The issue is most likely the government want to use NI tax income for other things :)

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

Its not to be funny thats MY FEAR this policy will do. Flog people at that age. Not everybody fit and healthy why should'nt people have a right to retire and enjoy relaxed while they can do something from 60.

Whether its state funded pension or private funded by businesses its one of the craziest moves of this government to expect people to work hard at that age. Pensions issue not just down to ignorant of not saving. City people abused it by speculating wildly causing it to lose money. Plus there was corruption in pensions few years back its not peoples fault. Also as peoples wages shrunk in real terms more and more finding less FUNDS to even contemplate it.

Squeeze pay causes knock-ons.

If the retirement was actually reduced it opens up loads jobs to fill surely CHURN more important to get people in work.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

It may have escaped you but the private sector already creates and maintains the vast majority of jobs and the wealth which provides the revenue necessary to run the public sector. Of course they can't create these jobs overnight but one thing's for sure, crippling private enterprise with the bill for a bloated public sector and massive debt doesn't help them create more jobs or pay more tax to run the NHS etc. does it. It's not a choice you know, we can't simply choose to avoid economic reality like some people try to avoid paying their debts by moving them around. If that was possible don't you think the Irish, the Greeks and the Portuguese would have taken that route? Chosen not to go bust? Chosen just to carry on borrowing from international investors who're quite happy to throw good money after bad? I mean it's by far the easier option isn't it or do you think they too are obssessed with that well known Tory ideal of grinding the poor into the dust and this is all a bit of spiteful fun for them?...

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

it hasnt escaped me but it also hasnt escaped me it is in terminal decline as well as over crowding themselves in limited parts of the country.

you dont see the flaw in that cutting taxes is not going to do much for job creation? the problem is much wider and that is inflation needs to be dealt with as a much bigger priority as that determines costs more than anything.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

The stats show otherwise.... Link

On pages 95 and 96 of the this year's budget, NI income is shown as £96.5 billion and Social Security Benefits expenditure as £169 billion.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

did I say social security benefits?

I said pensions and IB. Not child benefit, housing benefit and the rest.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

No, but you did suggest that the surplus was an indication of the government's intentions, which it is not. There is a suplus every year, and it is growing. A chunk of the surplus is loaned to the Government and paid back with interest. This is not a Tory (or, indeed, a Coalition) invention.

You also referred to it as 'NI tax', which it most plainly isn't; it is operated and held in an entirely different way than general taxation.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

The dependent contributions aside NI is just another tax, in order to compensate for loss of NI revenue to the general tax pool other taxes would have to be increased.

EDIT: As a reminder there are other benefits available to pensioners, and indeed a number that just draw the basic state pension will be topped up in some way via welfare. It would be interesting to see those figures actually.

Lastly NI also partly funds the NHS and is the fund used to pay SSP.

Re: * News * Politics * Economic policy Ministers admit family debt burden i
 

Oh look. Looks as though Duncan Weldon / False Economy were engaging in some quite selective quoting of figures, along with a not inconsiderable amount of extrapolation. To the extent where the OBR have released figures clarifying.

Looks as though the anticuts group's economist's £245 billion is actually £17 billion. Oops.

I was expecting such unbiased content from a group devoted to showing that spending cuts are a 'false economy' too.