Conservatives

[DJ Barry Hammond]

We were told that austerity would cause a triple dip recession, that unemployment would go through the roof, neither has happened. Our growth has been at least on a par or better than America on average while reducing the deficit.

 

The deficit should and could have come down sooner but at least we're travelling in the right direction while America has to worry what will happen when the stimulus is turned off.

A cynic could say those things would have happened had the original plan be followed, but I guess some credit should be given to George for changing course / pace.

Of course there are problems with both approaches, because if Austerity is sucessful and people's living standards increase, but the essential services provided by government don't match new expectations because the lack of funding means they haven't kept a pace with standards - you'll get a new government and a need for greater spending.

So as with everything, the answer is probably neither - it's getting that balance between the two.

[Rincewind]

The programme with Ian Hislop was interesting the other night on deserving and undeserving. Just after the time of the depression, early 30's Labour were in power. The person in charge of Labour etc was a woman called Margaret Bodnfield? She was very popular and rose through the ranks of a shop union representative. Anyway she brought in austerity and it ended her career as a politician.

Lost her seat and was regarded as a traitor. I don't think austerity worked then. For it to work people have to suffer and it is normally the worse off..

 Margaret Bondfield.

 

Anyway the most important question today is will City win?

[Guest MattP]

It's absolutely unbelievable that anyone seriously believes the government has implemented any sort of austerity. It hasn't.

We've been as profligate as we've ever been the last few years, no one will be able to implement what's needed as they would be voted out at any election; we're selling our children down the river and we are still moaning about us, it's laughable.

[DJ Barry Hammond]

It's absolutely unbelievable that anyone seriously believes the government has implemented any sort of austerity. It hasn't.

We've been as profligate as we've ever been the last few years, no one will be able to implement what's needed as they would be voted out at any election; we're selling our children down the river and we are still moaning about us, it's laughable.

Really? An austerity denier?

http://www.bbc.co.uk/news/uk-politics-11579979

http://www.ft.com/cms/s/0/675b99c4-2f9b-11e5-91ac-a5e17d9b4cff.html#axzz45QQ8YfjP

http://www.telegraph.co.uk/finance/autumn-statement/12014530/Autumn-Statement-2015-live.html

[SMX11]

It's absolutely unbelievable that anyone seriously believes the government has implemented any sort of austerity. It hasn't.

We've been as profligate as we've ever been the last few years, no one will be able to implement what's needed as they would be voted out at any election; we're selling our children down the river and we are still moaning about us, it's laughable.

 

Agreed. Unfortunately there isn't another political party currently offering radical change. 

[Alf Bentley]

We've had this discussion before Alf. You're bound to have deficits during certain stages of the economic cycle. If you claim to be Keynesian you shouldn't be increasing the deficit during the longest boom in history. Not only should you be using the boom to repay debt but you should take money out of the economy to stop it from over heating but by increasing spending you're stoking up the boom. Bust always follows boom and the bigger the boom, the bigger the bust.

 

 

Sorry about the delayed response. Real life and football intervened.

 

Indeed we have had this discussion before. I put the Keynesian argument for a stimulus in the early years of the coalition govt, when the economy was in a down cycle. You contested it and put the Thatcherite case for austerity cuts to spending so as to eliminate the deficit. Certainly, I have several times accepted the argument that Labour shouldn't have been running a sustained deficit during a boom. Public spending was needed after years of the Tories starving the NHS and schools of funds, but Labour should have increased tax to fund this, not run a deficit around 2001-2006. The same applies to the Thatcher Govt in the mid-late 80s, when the economy was booming, but the Tories ran a deficit....and to 2010 onwards, when the economy was struggling but the Tories delayed the recovery by cutting and running a surplus.

 

What I reject are the ideas (a) that Labour over-spending caused the 2008 downturn; and (b) that Labour habitually over-spends, while (implicitly) the Tories keep the public finances healthy. Labour do tax and spend more, the Tories less, but that's politics. The Tories aren't any better at keeping the public finances steady.....in fact my graph showing the surplus/deficit since WW2 suggests that, if anything, the budget balance has tended to decline more often under the Tories (the special case of 2008 notwithstanding). The small pre-existing deficit may have made the 2008 crash a bit worse, but most of the problem was due to global financial deregulation & irresponsibility - hence why the entire western world was affected. Ironically, the Tories had committed themselves to stick by Labour spending plans - and had criticised Labour for not deregulating enough!   Blair/Brown deserve criticism from Keynesians and from the Left for their deregulatory approach, but the Tories haven't got a leg to stand on....they've just successfully sold a lie to the public.

 

My point in posting the graph wasn't tit-for-tat politics, though. What the graph shows is the structural nature of the UK deficit problem - and its history trajectory. I'll post it again, as it's really interesting reading for anyone with an open mind.

 

Basically:

- Post WW2, we had what the French describe as "the 30 glorious years": the surplus peaked under Attlee, but we remained in the black until 1975: post-war reinvestment, a young population, Britain still the "workshop of the world", consistently high economic growth under govts of either persuasion (slightly better surpluses under Labour in the 60s than under the Tories in the 50s, but I don't want to be too petty).

- 1970s: Things started to go wrong under Heath, then got worse under Wilson/Callaghan and we went into the red in 1975: the oil price hikes by OPEC a key factor, plus slower growth, Heath's 3-day week, Callaghan's winter of discontent etc.

- 1980s onwards: We have stayed in deficit almost continuously since then, under Tories and Labour alike (apart from 2 years under Thatcher & 4 years under Blair); a manageable deficit, but a near-continuous structural one

- 2008: The crash and rescue of the banks caused a much bigger deficit under Brown....and after 6 years of "austerity", at least 50% of that deficit is still there, despite the pain caused to some of those at the bottom

 

Why do we have a near-continuous structural deficit? I'm no expert but factors include: countries worldwide becoming developed enough to compete with us; an aging population; our historically adversarial management/labour relations (fault on both sides); plus our electorate constantly demanding low tax AND high-quality public services (impossible!); short-termist financial markets demanding high returns instantly; wealthy corporations/classes avoiding tax by taking money offshore etc.

 

UK Deficit Since World War II

Chart D.03t: UK Deficit Since 1947

The UK deficit started out in 1947 at 3 percent of GDP and then immediately went into surplus, as the Attlee government worked to reduce the huge debt racked up in World War II. The surplus peaked at 6.3 percent of GDP in 1950 and then declined to a surplus of 0.9 percent GDP in 1961.

But then surpluses started to climb again reaching 7.6 percent GDP in 1970 during the Wilson government before declining sharply. The UK scored a deficit of 0.1 percent GDP in 1975 for the first time in nearly 20 years.

The UK ran a budget deficit till the end of the Thatcher years, with a peak of 2.2 percent of GDP in 1981. In the mid to late 1980s deficits declined, and went into surplus in 1989 at 1.9 percent GDP.

Deficits returned in the Major years and the ERM crisis, reaching 5.7 percent GDP in 1994. But then the deficit came down and went into surplus, maxing out at a surplus of 2.3 percent GDP in 2001.

Moderate deficits were the rule in the mid 2000s Blair years. But the deficit rocketed upwards to 6.9 percent in 2010 in response to the Crash of 2008 and the Great Recession. In the recent recovery, the budget deficit has declined to 3.3 percent of GDP.

[Guest Sharpe's Fox]

To expand on Alf's points, a moderate deficit is no bad thing. Our economic system is based on debt, indeed that's what money is, and that debt is either in the hands of the public sector or the private sector. If the private sector is in surplus then the public sector is in deficit and vice versa. It's better for the public sector to be in deficit because not only does that mean business is in surplus and so can invest in actual human beings and not figures on a graph but the public sector can command much lower interest rates (almost zero) on their debts.

Of course the deficit we had is unsustainable but don't think a budget surplus is the be all and end all.

[SMX11]

Sorry about the delayed response. Real life and football intervened.

 

Indeed we have had this discussion before. I put the Keynesian argument for a stimulus in the early years of the coalition govt, when the economy was in a down cycle. You contested it and put the Thatcherite case for austerity cuts to spending so as to eliminate the deficit. Certainly, I have several times accepted the argument that Labour shouldn't have been running a sustained deficit during a boom. Public spending was needed after years of the Tories starving the NHS and schools of funds, but Labour should have increased tax to fund this, not run a deficit around 2001-2006. The same applies to the Thatcher Govt in the mid-late 80s, when the economy was booming, but the Tories ran a deficit....and to 2010 onwards, when the economy was struggling but the Tories delayed the recovery by cutting and running a surplus.

 

What I reject are the ideas (a) that Labour over-spending caused the 2008 downturn; and (b) that Labour habitually over-spends, while (implicitly) the Tories keep the public finances healthy. Labour do tax and spend more, the Tories less, but that's politics. The Tories aren't any better at keeping the public finances steady.....in fact my graph showing the surplus/deficit since WW2 suggests that, if anything, the budget balance has tended to decline more often under the Tories (the special case of 2008 notwithstanding). The small pre-existing deficit may have made the 2008 crash a bit worse, but most of the problem was due to global financial deregulation & irresponsibility - hence why the entire western world was affected. Ironically, the Tories had committed themselves to stick by Labour spending plans - and had criticised Labour for not deregulating enough!   Blair/Brown deserve criticism from Keynesians and from the Left for their deregulatory approach, but the Tories haven't got a leg to stand on....they've just successfully sold a lie to the public.

 

My point in posting the graph wasn't tit-for-tat politics, though. What the graph shows is the structural nature of the UK deficit problem - and its history trajectory. I'll post it again, as it's really interesting reading for anyone with an open mind.

 

Basically:

- Post WW2, we had what the French describe as "the 30 glorious years": the surplus peaked under Attlee, but we remained in the black until 1975: post-war reinvestment, a young population, Britain still the "workshop of the world", consistently high economic growth under govts of either persuasion (slightly better surpluses under Labour in the 60s than under the Tories in the 50s, but I don't want to be too petty).

- 1970s: Things started to go wrong under Heath, then got worse under Wilson/Callaghan and we went into the red in 1975: the oil price hikes by OPEC a key factor, plus slower growth, Heath's 3-day week, Callaghan's winter of discontent etc.

- 1980s onwards: We have stayed in deficit almost continuously since then, under Tories and Labour alike (apart from 2 years under Thatcher & 4 years under Blair); a manageable deficit, but a near-continuous structural one

- 2008: The crash and rescue of the banks caused a much bigger deficit under Brown....and after 6 years of "austerity", at least 50% of that deficit is still there, despite the pain caused to some of those at the bottom

 

Why do we have a near-continuous structural deficit? I'm no expert but factors include: countries worldwide becoming developed enough to compete with us; an aging population; our historically adversarial management/labour relations (fault on both sides); plus our electorate constantly demanding low tax AND high-quality public services (impossible!); short-termist financial markets demanding high returns instantly; wealthy corporations/classes avoiding tax by taking money offshore etc.

 

UK Deficit Since World War II

Chart D.03t: UK Deficit Since 1947

The UK deficit started out in 1947 at 3 percent of GDP and then immediately went into surplus, as the Attlee government worked to reduce the huge debt racked up in World War II. The surplus peaked at 6.3 percent of GDP in 1950 and then declined to a surplus of 0.9 percent GDP in 1961.

But then surpluses started to climb again reaching 7.6 percent GDP in 1970 during the Wilson government before declining sharply. The UK scored a deficit of 0.1 percent GDP in 1975 for the first time in nearly 20 years.

The UK ran a budget deficit till the end of the Thatcher years, with a peak of 2.2 percent of GDP in 1981. In the mid to late 1980s deficits declined, and went into surplus in 1989 at 1.9 percent GDP.

Deficits returned in the Major years and the ERM crisis, reaching 5.7 percent GDP in 1994. But then the deficit came down and went into surplus, maxing out at a surplus of 2.3 percent GDP in 2001.

Moderate deficits were the rule in the mid 2000s Blair years. But the deficit rocketed upwards to 6.9 percent in 2010 in response to the Crash of 2008 and the Great Recession. In the recent recovery, the budget deficit has declined to 3.3 percent of GDP.

 

The general rule with governments is that they will at least spend all the money they raise in taxes plus whatever they can get away with.

 

The real issue in my view is the current monetary system. Looking at your summary of the the post war decades highlights that to me. What happened in the early 70's? Change in the monetary system from the Bretton Woods system which while flawed had the reserve currency (US$) pegged to gold and hence restricted the expansion of credit around the world. With the current fiat standard i.e. the $ being backed by nothing and hence nothing backed by anything other than 'confidence'.

 

Until we stop central bankers & private banks inventing money out of thin air without anything backing it you will always cause the expansion and the inevitable contraction when bad investments don't yield what was expected. Unfortunately I see no change until this system has totally failed, which has the potential to devastate millions of people around the globe 

[Rincewind]

This is how much some MP's think of the ordinary working man.

 

[Jon the Hat]

This is how much some MP's think of the ordinary working man.

 

 

Unless you know what she claimed for it is rather hard to get excited isn't it.

 

If you actually look into it, for 2014-15 as an example:

 

The Conservative MP claimed the bulk of her expenses on staffing costs – £137,127.53– as well as £22,794.66 on office costs, £10,330.79 on accommodation, 2,854.18 on travel and £260 on ‘miscellaneous expenses’.

Read more: http://www.ryeandbattleobserver.co.uk/news/hastings-and-rye-mp-in-top-10-expenses-claimants-1-6958686#ixzz45WP87N7x

 

So she is actually spending on her accommodation and travel about £1000 a month, which is not a lot really.  You could argue MPs shoulding spend £150k a year on staff and an office, but that would be a philosophical point.

 

[Darkon84]

Strange that, I've just totalled it all up and it only comes to around £400,500, with nothing on there seemingly out of the ordinary or ridiculous.

 

Rough figures from the IPSA (Independent Parliamentary Standards Authority) as follows:

 

2010-11: £24,000

2011-12: £36,000

2012-13: £33,800

2013-14: £164,500

2014-15: £173,500

 

But hey, memes are always correct. Never forget what Abe once said.

 

[Jon the Hat]

Meanwhile, the "depressing" comment was aimed at the burnt out pier, which is re-opening on the 21st May after a rebuild.

 

http://www.ft.com/cms/s/2/97b6f7e6-ad46-11e2-b27f-00144feabdc0.html#ixzz45WU2NdW7

The rain is pounding down and a vicious wind is whipping off the dirty brown sea. It is hardly the moment to take seaside snaps, but Amber Rudd is putting a brave face on it as she poses for pictures by a grubby BT phone box, framed by grey sky and the skeleton of Hastings’ burnt-out pier.

“Doesn’t it look a bit depressing?” she laughs. The photographer has stood her by the very phone box that just an hour earlier locals had told her was being used by drug dealers.

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email [email protected] to buy additional rights. http://www.ft.com/cms/s/2/97b6f7e6-ad46-11e2-b27f-00144feabdc0.html#ixzz45WUEvCMi

Rudd is determined to see the brighter side of Hastings. She points out that the pier – almost destroyed by fire in 2010 – will be rebuilt just in time for the 2015 election. “It will bring a feelgood factor to the town,” she says, her skirt and hair flying in the blustering wind. “It’s like having a burnt kitchen in the middle of your house, you can’t avoid it. You walk along quite happily and then you see that and – urgh! It sends out absolutely the wrong signal.”

She is warming to her theme as she points along the deserted beachfront: “Look along there, that funny boat-shaped thing you can see, that is the new Jerwood Gallery,” she says. “It’s part of the whole Hastings cultural renaissance … Hastings is one of the 11 finalists for city of culture for 2017,” she says in her cut-glass accent. But the locals thought the notion was ridiculous, didn’t they? “Yes, I’m afraid they did. But I think it’s a brilliant idea!”

 

[Webbo]

It seems that people who are too clever to believe the right wing media will believe anything.

[Claridge]

Corbyn couldn't even fill in his tax return on time and people want to let him run the country.You couldn't make it up, no wonder he took his time releasing the forms

[Guest Sharpe's Fox]

Corbyn couldn't even fill in his tax return on time and people want to let him run the country.You couldn't make it up, no wonder he took his time releasing the forms

Dodgy Dave left his kid in the pub, mate.

[Claridge]

Dodgy Dave left his kid in the pub, mate.

Good point, but I don't want him to babysit my kids, I want an economy that rewards hard working people

[Guest MattP]

Looks like Corbyn has failed to declare some income as well according to the papers this morning.

Whoops.

[Strokes]

Looks like Corbyn has failed to declare some income as well according to the papers this morning.

Whoops.

Crooked corbyn has a ring to it.

[Bryn]

They're all as bad as each other, makes me sick.

I think Corbyn is a better man but the way he's pitched himself he had to make damn sure he was clean.

[Bryn]

The telegraph today are right that it's wrong that Labour are making this into an inheritance tax issue as well. My problem with hamface isn't that he inherited money, it's the suspicion of tax avoidance leading to the generation of that money in the first place.

[RobHawk]

The telegraph today are right that it's wrong that Labour are making this into an inheritance tax issue as well. My problem with hamface isn't that he inherited money, it's the suspicion of tax avoidance leading to the generation of that money in the first place.

Have Labour really made a big issue about inheritance tax though? Corbyn on Andrew Marr on Sunday seemed to say there was nothing wrong with what the Cameron family had done regarding inheritance, but inheritance tax rules may be something else to look at further down the line. 

 

It seemed quite a measured response to me - which surprised me somewhat. 

[Rincewind]

Someone was talking last night about a few years ago a company owner set up a business in Germany which consisted of a room in an office block and transferred money from this country. Apparently the way he did it was illegal. He was going to be prosecuted and faced jail but there were multiple instances of fraud and most had to be proved. He offered to pay 5 million back in exchange for his freedom. The tax office agreed but he still pocketed 10 million. 

And people are defending this sort of person.

When the Labour party was set up many years ago they included a rule that any donors had to be named which was mainly trade unions. The Tories have no such rule and can keep them secret if they wish to.

Politics is a dirty business and anyone would be naive to think deals do not go on without the public knowing across ALL PARTY's.

75% of known Tory donors have oversea interests. Read into that what you like. Which will be nothing from Tory supporters.

 

I am wasting my time though. I am just an insignificant member of the general public with no influence as to what happens between those at the top of the tree.

[Guest MattP]

Someone was talking last night about a few years ago a company owner set up a business in Germany which consisted of a room in an office block and transferred money from this country. Apparently the way he did it was illegal. He was going to be prosecuted and faced jail but there were multiple instances of fraud and most had to be proved. He offered to pay 5 million back in exchange for his freedom. The tax office agreed but he still pocketed 10 million. 

And people are defending this sort of person.

When the Labour party was set up many years ago they included a rule that any donors had to be named which was mainly trade unions. The Tories have no such rule and can keep them secret if they wish to.

Politics is a dirty business and anyone would be naive to think deals do not go on without the public knowing across ALL PARTY's.

75% of known Tory donors have oversea interests. Read into that what you like. Which will be nothing from Tory supporters.

 

I am wasting my time though. I am just an insignificant member of the general public with no influence as to what happens between those at the top of the tree.

 

It's hard where to start with this post, it really is.

 

I know I'm wasting my time but anyway, leaving aside the ridiculous opening story for a start the Tories can't keep donations secret if they wish, any donation over £5,000 has to be declared to the electoral commission.

 

75% of known Tory donors have overseas interests? I'd love to see the source for that, what does a "overseas interest" even mean?

[Bryn]

Have Labour really made a big issue about inheritance tax though? Corbyn on Andrew Marr on Sunday seemed to say there was nothing wrong with what the Cameron family had done regarding inheritance, but inheritance tax rules may be something else to look at further down the line.

It seemed quite a measured response to me - which surprised me somewhat.

I don't think it should be reviewed down the line. Broadly speaking you'd call me centre left but I believe fundamentally you should be entitled to pass money to your next of kin without penalty, assuming you've earned and managed that money legally and appropriately during your lifetime, which is one of the things I go the other way on.

[Bryn]

I suppose the only exception to this would be vast wealth being kept in an economically inert fashion. But even that should be taxable in other ways.