Familiar tactics in economic battleground

new labour on the side of the motorist ,

done make me laugh

they spent 13 years giving them a kicking , ask top gear.

are they saying they where wrong then for 13 years then

New labour more faces than a town all clock

Heard on the today programme how Peter Mandleson tried his upmost
to politicse the Millenium Dome.

Labour about as useful as a chocolate tea pot

Wow, a very good blog post, Nick. You're quite right that Labour have no real plan distinct from the Tories - the question was always, "who will actually do it?". It's all well and good saying what you won't cut, but even after saying what you will cut you're required to actually go out and do it.

The most important point you made, though, is the fact that the debate will be won by whoever turns out to have been right a year or two down the line. The Tories are no different from any other political party; their main goal is to stay in power. To do this they must win elections, and to do that they must improve the economy - which takes time.

Too many people doubt the Tories' motives without thinking about their objectives. As mentioned, all that should matter is the academic question of which party has the correct economic plans?

"Dare I suggest that this battle is more likely to be won by who turns out to be right about the state of the economy in a year or two than it is by these wearily familiar exchanges?"

Indeed you may Nicholas, and I dare say, you're almost certainly correct as well.

I dare say the usual suspects will disagree with their usual invective...

OOPS!

Disunited kingdom retail sales still DOWN in February - despite a marked absence of the wrong type of snow.

Meanwhile the USA continues it's growth following the end of the global recession - example: retail sales UP for the 8th month running.

Some said that taking billions out of a shaky economy and causing mass fear amongst consumers would trash the recovery. The tories said it would promote growth.

People can now see the results for themselves - economic collapse.


Tories: taking labour's mess and making worse.

Do we really need this sort of dodgy dossier from the Coalition at this point? Shouldn't they be concentrating on governing not electioneering? They've only been in a few months for heaven's sake (!) and it's become clear that to do even a bog-standard mediocre job is going to require all their faculties. As for what Labour would cut - well whatever. There was the solid-as-houses Darling plan (wasn't there?) and we the public eschewed the chance to find out more when we got over-excited and kicked the Labour government out. No sense now, having done that, in shouting and screaming for the detail of what would have happened. We can't have our cake and eat it.

All sides just spout fiction.

Why do any of you bother with this politics sham?

so 2 out of the 3 architects for getting us into the mess
by spend spend spend and going to tell use how we are going to

cut/spend cut/spend cut/spend out way into a deeper mess.

what a pair of standup comedians they are

#6 I'll refer you to Irvin Stezlers comments in the Business Section of the Sunday times , that all about to change in the USA. Even for them the Debt pile is to big to go much further.

There used to be debate on this blog. Now it seems to have turned into a back slapping exrercise. Nick offers his back and the usual Millbank operatives queue up to slap it. You have to wonder whether they get paid per comment.

"Heard on the Today programme how Peter Mandleson tried his upmost to politicise the Millennium Dome." - IR35 @ 3

Sure, but he failed. It voted Conservative.

#7 unlis your mates Tonies doggy dossier that got us into a war in irag and caused the melddown of the MoD budget.

Nice one tony
Nice one Gordon
Nice one Labour

lets not have another one ever,

"who turns out to be right about the state of the economy in a year or two than it is by these wearily familiar exchanges?" You wont have to wait this long as it will be pretty evident in the next six months. Of course Labour has a lot to answer for from the last 13 years but it is important that the Coalition is vigorously opposed in their mission to turn the public sector clock back to the 1930's (and in some cases to QV1's time).

Locally having voted for the first and last time for LIB Dems I feel it is my moral duty to point out to them that they cannot be both part of a government and an opposition and if they dont like it the answer is obvious.

Speaking of the usual suspects; the faint pealing of Ivan Petrovich Pavlov's bell is heard in the distance, soon followed by much panting, tail wagging, salivating and barking on command....

God, I hate Mondays....

"They spent 13 years giving the motorist a kicking, ask Top Gear." - Survivor @ 1

Mmm. Well anything short of unlimited free petrol for 4x4's and prizes for knocking down cyclists counts as that in their book. Reprehensible bunch.

"We can't have our cake and eat it."

Lord knows, its never stopped you trying though, mate!

7. sagamix

Good sized bucket of chum there, S.

Oh the irony

One of the chief Architects of the deficit Mr Balls now lecturing us on how to get out of it.

Furthermore, even more incredibly, some commentators are even taking him seriously.

I only have one question for Mr Balls if he is so correct how did we get into this mess in the first place ?

Any chance that ANY politicians of whatever colour will put aside self-interest or the good of their party and consider the duty of care that they have to the citizens who elect them?

No, thought not.

So I shall not expect any of them to try actually thinking about the problems that they and the financial industry have caused and about how to put things straight whilst minimising the harm to ordinary citizens, either.

Ed Balls and red Ed crippeled the country and motorist whilst in power so will now say anything to get some good press . However whatever they say will be taken with a large pinch of salt by most people who know it dose not matter what they would do now , because they cant implement it.

18#

By which you mean the smelly bucket of fish guts and other associated bits used to attract sharks and the like, not the well known and respected dog food (other brands are available...)?

I've heard Saga's posts called a lot of things in the last 18 months, but "Chum" is starting to have an appeal all of its own....

So Cameron would rather centre the debate on the economy via an electioneering gambit. Hmm, but this is also on the same day that a cross party has launched a "People's Pledge" where voters would promise to support only those parliamentary candidates who back a referendum on our membership of the EU.

It is clear that Cameron who pretends to be Euro sceptic, but in reality like all the main politicial parties in the UK is firmly a Europhile would rather discuss anything except the EU. It is even more ironic that the democratic rights of Libyan's to depose their current leadre are not dissimilar to us Brits or the rest of Europe vis a vis the EU. So much for the new politics...

7 saga

Do we really need this sort of dodgy dossier from the Coalition at this point? Shouldn't they be concentrating on governing not electioneering?

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

If the opposition was concentrating on providing constructive criticism of government policy rather than a 24/7 narrative around competence then I would agree with you.

Unfortunately they are not, so the government needs to get on the front foot with regard to media management.

#23 See the CU tried to get harmanised coorpie tax through the back door with Ireland.

what they seeking is political union by the back door.

it should be resisted at all costs. even if it means a revolution in the UK.

What a pair of jokers.

They don't even look as if they know what they are talking about.

How are we expected to take advice on how to sort out this labour mess form two people who in their own words 'had front row seats' during the whole Blair/Brown period?

Balls with his A level economic models and Miliband with his sudden transition to friend of the motorist having spent all his time promoting the green agenda.

Does the labour party have a single serious operator who is prepared to face up to the deficit they created and come out and make some proposals for reducing it? They are a nonsense of a party.

Clearing up labour's mess...

"The next election may be more than four years away" ??? Really Nick? From where I'm sitting I'm preparing to vote for a new Government on May 5th, less than eight weeks away. Surely that counts as the "next election" to the Chief Political Editor of the British Broadcasting Corporation. Is this an indication of how much you intend to ignore the democratic process in Wales (and Scotland and Northern Ireland for that matter) over the coming two months? Your homework for today, Mr Robinson, is to dust off, read and digest the King Report and adapt your phraseology accordingly.

The tax or spend equation that surrounds the deficit is so marginal it is a pointless debate. This is just grand-standing by a political class having its own discussion whilst the country goes to the dogs.

What I want to hear from the politicians is what the country actually needs: namely, the reform of the banks so that the taxpayer guarantee only applies to the highly profitable retail banks. This would allow the full application of market discipline to the investment banks who have lost all the money whilst paying themselves hugely in the process.

Where does Cameron, Milliband Minor, Balls and Osborne stand on this issue? I think they will all say leave it to the Banking Commission or even that the EU might have another idea. Sorry chaps, but there isn't the time for any more prevarication. Do it and do it now!

Then once we have real banks we might be able to invest real money into a real economy and start improving our circumstances. Until then nothing will get better!

One wonders whether this is would be a classical piece of dis-information designed to make Balls expect another budget laden with cuts and prepare for it , whilst presaging an entirely different sort of budget.
I think frankly the fuel VAT is just populist and opportunistic to take advantage of the pre-budget purdah peroid by Balls, when Osborne cannot publicly make statements which could affect the markets. The scale of increases due to the market speculation seems sure to prompt a measure of some sort to try to alleviate the relentless upward rise, 1.40 for diesel at the local station this morning! For sure they will at the least cancel the planned increases, because that is easy to do and they can make political capital from it , despite the fact they have had a budget between when this was announced and the forthcoming budget when they could have cancelled it.

It remains the central plank of all the Coalition policies, even those that have nothing at their heart to do with deficit reduction or financial rectitude, to have them associated with the deficit argument which seems to have attained the status of recieved wisdom, and therefore can be blamed on the last government.
The "We don't want to do this but the last lot made me" excuse. Where the truth of the matter is they do want to do it for purely ideological reasons, just using a bit of misdirection to soften the public impact.

26. At 11:40am on 14 Mar 2011, rockRobin7 wrote:

"Does the labour party have a single serious operator who is prepared to face up to the deficit they created and come out and make some proposals for reducing it?"

No.

/thread.

22. F_S

18#

Metaphorically speaking Fubes...
Could have used Needle Tubes, Spinheads, Buzzers or Nymphs.
But it wasn't that subtle.

Mr.Robinson wrote:

Dare I suggest that this battle is more likely to be won by who turns out to be right about the state of the economy in a year or two than it is by these wearily familiar exchanges?

On the face of it,this is a re-run of the election debate on the speed and depth of cuts and that sense the arguments are drearily familiar.

However,I think conservative tactics are more subtle than Mr.Robinson allows.If private sector growth doesn`t compensate for loss of public spending,they can argue that because Labour spending plans are now a blank page,the result of Labour cuts would be worse,adding to low growth,a threat to the pound through loss of international confidence.

However,this pre budget positioning is of mainly academic interest.Last week I posted that the Arab Spring was Mr.Osborne`s black swan equivalent to 2007-8.We must now add a second,the Japanese earthquake and tsunami.Both are likely to damage world growth,the more vulnerable economies like ours will suffer damage.

As a postscript,the services are furious with the Conservatives.Income and pensions hit from three directions.A 3% increase in pension contributions,pay increases based on CPI not RPI and final salary schemes replaced by average salary to calculate pensions.These changes affect widows and men and women at the front.They will reduce income and pension by tens of thousands of pounds,more at the top.

Add in the redundancies,the loss of the Ark and Harriers which I am told would be invaluable off the Libyan coast.Critics mention Tornadoes and Typhoons as an alternative.Cyprus is a 1000 miles from Tripoli,it would involve refuelling fast jets in both directions.Malta has a small civilian airfield and lacks infrastructure which would have to be supplied.The logistical demands beggar belief.

They`re hopping mad,some are even saying they`ll vote Labour!

AS71 @ 24 wrote
the government needs to get on the front foot with regard to media management

>>>>

Translation: it's time they prioritized spin over substance. What happened to the new era in politics? Over so soon?

33 pd

Translation: it's time they prioritized spin over substance. What happened to the new era in politics? Over so soon

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

I don't think that a government should prioritise spin over substance, but they can't afford to ignore it either.

Britain is just drifting on a sea of uncertainty, with no particular direction for the future. There is no vision on offer from either party, so I see very little difference in what two years or even longer will make. Of course, what Ed Balls has on offer is unfunded, when has it ever been any different, but that will not stop the public believing in him, because they want to. No amount of the Coalition trying to produce evidence that Labour policies are unaffordable, will make a blind bit of difference.

As to the Coalition itself, Cameron now has many problems on the horizon. The Scottish elections are just one of them. Labour could do very well here, unless the Scottish do decide to believe Salmonds unfunded cuts, and they go up in the polls. The Lib/Dems will do very badly, which will make them even more uncomfortable in the Coalition. Furthermore, I reckon, the Conservatives now believe that Cameron does far too much to keep the Lib/Dems happy, and has forgotten his own party. This is no longer a happy union. The EU is another problem for Cameron with his own party, he has not kept his promises on this either. Then there is all the U turns, it looks like health will be the next one.

Britain should have engaged in 20% cuts, at least, right across the public sector, with everything included. Reforms should have then been made at the same time, to all the services. Using ever increasing taxation to cure the deficit will not work. Fear of certain sections of the public seems now to drive British politics, and it will end in tears.

It’s just not how modern politics works in this country, that’s all I mean at 7. Parties with a serious chance of untrammelled power (i.e. Labour and Tory) do not spell out what they’re going to do if they know – e.g. with the Cuts – it’ll be unpopular. Think back to pre May 6th if you doubt this; neither party wanted to (or did) give much detail on what was for the chop. The priority was to get in and the priority now is to stay in (C) or get back in (L). It’s the politicians’ fault of course, that this is how it is, but it’s also the public’s for being so squeamish about real choices. We prefer to avoid them. We have a low tax, high spend public. Thus the only way to find out what Labour would have cut was to have voted for another term – and we didn’t. No point banging on about it now. Like I say, when you’ve eaten your slice your plate is empty. Works both ways, I’m afraid, this does.

I am well aware that what I am about to say will be unpopular and derided by many but cutting fuel tax means that tax will need to be generated from another source and I think it is about time that we actually thought more about our fuel usage and whether journeys are necessary. From an environmental point of view this is not entirely a bad thing.

I am well aware of the difficulties of rural communities and the increased costs of freight but there are no easy taxes and this one is easy to collect and as good as any other, if somewhat indiscriminate about who it hits.

25. At 11:38am on 14 Mar 2011, IR35_SURVIVOR wrote:
#23 See the CU tried to get harmanised coorpie tax through the back door with Ireland.

what they seeking is political union by the back door.

it should be resisted at all costs. even if it means a revolution in the UK.

====================================================

If we did rebel against the political elites would they acquiesce to the public demand or would they follow the well beaten path trod by Gaddafi? Somehow I am disinclined to bet a lot on the former course of action. But could the authorities give the order to shoot the British rebels? They wouldn't would they....

No26 RockingRobin,
I would have thought they would have acquired a degree of economic understanding at Harvard and Oxbridge.
Where did you study? Broadmoor?

Why are politicians so keen to say they're on the side of the motorist? How about being on the side of public transport users for once? Our idiotic transport minister has said that he will end the war on motorists, but train users have seen incredible fare rises, more overcrowding and more delays. Why is a polluting, road-clogging transport method so cherished?

Robin, I don't know why you're spouting off (26) on this matter of what Labour would cut. Whatever they (or indeed any party) said on that, it wouldn't be enough to slake your thirst - to satisfy your urges - would it? No.

The problem with what is being proposed by the two talking Ed's is that they are spending twice what they want to raise. I watched, listened and have read what was said and it just does not add up. I would welcome a cut in fuel prices but how will that be paid for, a bankers tax but that is being allotted elsewhere. So unless they have changed the laws of maths and can make two into one go twice then can some one please tell me where the money is coming from for this or are they going to raise tax else where or make further cuts or is it just grandstanding knowing that the day of reckoning is so far away that they can say and promise anything at present without ever having to deliver on them. However they should be aware that this one came home to roost with the Lib Dems as the electorate are starting to have long memories and will hold them to account if they do not deliver.

About time to as I have said for a long time that all parties should deliver against their promises made IE Election manifestos. These should not just be idle promises thrown in just to gain support.

36. At 12:08pm on 14 Mar 2011, sagamix wrote:

"Parties with a serious chance of untrammelled power (i.e. Labour and Tory) do not spell out what they’re going to do if they know – e.g. with the Cuts – it’ll be unpopular."

Actually I have to diagree - Labour suffered badly pre-election because Brown refused to use 'the c-word', as it was known, whilst the Tories did well as Cameron lead the rhetoric on cuts.

Of course, you're right about the detail not being there - as soon as Brown realised that being honest, no matter how bad the reality was, actually won favour with the general public, then the polls started to even out as Cameron failed to capitalise on the trend he started by being more specific.

"Dare I suggest that this battle is more likely to be won by who turns out to be right about the state of the economy in a year or two than it is by these wearily familiar exchanges?"

That all depends on the degree of disruption over the cuts in the public sector, large scale strike action will surely polarise positions and will put Labour in a difficult position as they too would have had to make cuts, yet would not want to be seen to be supporting strike action.

I have to say there is a degree of Schadenfreude from those employed in the private sector, who have had to endure redundancies, short term working and changes to their pensions over several years, largely without recourse to strike action.

The bankers do not epitomise the private sector any more than over paid council executives epitomise the public sector, so we have be careful to maintain a semblance of balance in these discussions.

Sagamix 7

I really had to laugh at that one dodgy dossier. I thought Labour held the record for that one.

The Darling economic policies are being carried out more or less, so what is the problem?. Glad to see you have moved to what you call the dark side, and support the Coalition. Strange position for a Labour leftie activist.

Balls is a deficit denier, so how could he possibly have a way forward for the economy. He told Britain they could keep spending at the time of the election for Labour leader. Seems to have changed his mind now he thinks he can grab power. Thats integrity for you, not. Balls helped get Britain into the mess in the first place, so no sensible person could ever believe he could get the UK out of it. Balls is a liability to Labour.

Yes indeed (stanilic @ 28), that is crucial, essential and extremely important. An efficient 'no frills' banking utility - owned by us and working for us (i.e. in the interests of the broader economy) - will transform our prospects. This is so obvious I can only assume it will happen at some point; preferably while we're still around and about and up to raising a glass.

I'm not sure which it is that I find more laughable, Labour saying they'll sort the economy out, or Labour saying they're on the side of the motorist.

40. At 12:17pm on 14 Mar 2011, RedandYellowandGreennotBlue wrote:

"Why is a polluting, road-clogging transport method so cherished?"

Because suppliers don't deliver products to Tescos on the train in carrier bags. Please, at least make a basic attempt to understand the nuances of the economy. Fuel prices underpin everything as they are passed on to the consumer. They hit food prices as that's how goods get to the shops in the first place.

Given you're anything but blue, I suggest you put the red side of yourself to good use and explain how Labour ran a deficit for a decade and we still ended up with pathetically bad public transport networks. You'd have thought that would have been the top priority, as any economist will tell you the importance of infrastructure.

Ball is balls. Make of that what you will.

Just watched Ed Balls bluster on 'The Daily Politics'.

Labour's new line is:
a) Tory economic policies a,b,c etc are unfair
b) Labour are not going to commit to reversing these policies

This, of course, enables Labour shadow ministers to rail against coalition policies, whilst at the same time allowing Ed Balls to defend himself from charges that he is making unfunded tax and spending committments.

The Labour line is cynical and opportunistic.

What this amounts to is:
a) Tory economic policies a,b,c etc are unfair
b) Labour are not going to do anything about it
c) Therefore Labour's economic policies are unfair (or, more accurately, equally fair or unfair).

So, that's Ed Balls sorted out, and its only lunchtime. Next please.

"As a postscript,the services are furious with the Conservatives.Income and pensions hit from three directions.A 3% increase in pension contributions,pay increases based on CPI not RPI and final salary schemes replaced by average salary to calculate pensions.These changes affect widows and men and women at the front.They will reduce income and pension by tens of thousands of pounds,more at the top."

"Add in the redundancies,the loss of the Ark and Harriers which I am told would be invaluable off the Libyan coast.Critics mention Tornadoes and Typhoons as an alternative.Cyprus is a 1000 miles from Tripoli,it would involve refuelling fast jets in both directions.Malta has a small civilian airfield and lacks infrastructure which would have to be supplied.The logistical demands beggar belief."

They`re hopping mad,some are even saying they`ll vote Labour!
-------------------------------------------------------------------------

And I bet you got that from the Grauniad, didnt you, bryhers? There is more disappointment, more anger, more opprobrium directed at the senior ranks at Flag/Star Officer level and the failures of leadership at that level and in the MOD and Defence Equipment & Support than there is at the politicos. There is little time for Cameron or Fox, but suggesting that the "fury" (always a word the left thinks it has a monopoly on, isnt it? "Fury"... maybe they should copyright it. Get the OED to introduce a new definition....) is purely aimed at Number 10 is factually inaccurate. It is also accurate to say that SDSR is seen within the forces as being Treasury led rather than by Strategic Requirements. However, it was pretty much always thus.

Taking the other points, there has already been three revisions to the Armed Forces Pension Scheme over the last decade and a half. One of those was introduced by the Tories in the 1990's following the end of the Cold War and the "peace dividend". The others were done under Labour.

Also, the UK Armed Forces Pension Scheme is Non Contributory. Always has been. I should know, I was in it for 16 years under AFPS75. So, we'll have a little less of this "contributions up 3%" disinformation, if you please. Its an untruth.

Secondly, you should have stuck to what you got right in the previous blog, namely that if there is a NFZ for Libya that it should be the Arab League that runs it, given that they are closer and they have got the numbers of airframes to be able to do it, and chances are in some Arab nations, the political and popular support for it. Particularly Egypt.

1) The Harrier is a Ground attack aircraft. The GR9 can barely defend itself, air to air, let alone be an interceptor, shooting down any Libyan aircraft. It has no Air To Air radar. It could provide some Close Air Support, but is hardly an ideal aircraft for attacking highly mobile artillery pieces, mortar baseplates and tanks, for which the US A-10 is far better equipped. The Sea Harriers could have fulfilled the role, but Labour sold them all to the Indians, following SDR98. The Ark or any carrier being there is neither here nor there. Remember Illustrious is just coming out of refit and is not due to be paid off for another 3 years yet. Should she be required, she can be used.

2) Malta is the closest airfield. However, it is not logistically equipped for such a purpose as running an NFZ. Akrotiri is too far away and wouldnt be used unless it was a unilateral British operation, which it is not. Closest workable alternatives are Decimomannu in Corsica and Goia Del Colle in Southern Italy, the latter being used for the Balkan NFZ in the 1990's, which has the infrastructure to be able to deliver against this mission, should it go ahead.

The Typhoon could be used in an air to air capacity, but would be no more effective than the US F18 Hornet or the Egyptian F16's. The Tornado GR4 could provide kinetic weapons delivery and photo-recce, but you have to start asking serious political questions about how involved you want to get. Soon as you start blowing up tanks and pushing back government forces, you're not just protecting the rebels, you're declaring war on Ghadaffi. If he holds out, you'd better be prepared for the backlash that comes afterwards, because if you thought he was bad in the 80's - targetted assassinations, weapons supply to the IRA, blowing up bars with US Servicemen in them - that will be as nothing compared to how the regime will behave towards those nations taking part in any such escapades if it survives.

And as for the "some are saying they'll even vote Labour".... oh please, give it a rest. You know you cant prove that, I know you cant prove it, so lets just have less of it, shall we?

Try and stick to the truth in future.

"47. At 12:34pm on 14 Mar 2011, djlazarus wrote:
I'm not sure which it is that I find more laughable, Labour saying they'll sort the economy out, or Labour saying they're on the side of the motorist."

I agree it's a close call. On the 'economy' it's purely incompetence but as far as the motorist is concerned, I think Labour's treatment of them was calculated, so marginally I'd say that Labour saying they'd sort out the economy is more laughable.

40. At 12:17pm on 14 Mar 2011, RedandYellowandGreennotBlue wrote:
Why are politicians so keen to say they're on the side of the motorist? How about being on the side of public transport users for once? Our idiotic transport minister has said that he will end the war on motorists, but train users have seen incredible fare rises, more overcrowding and more delays. Why is a polluting, road-clogging transport method so cherished?
-------------------------------------------------------------------------
Absolutely! Why the bus? Well, some people cannot afford a car, are unable for various reasons to drive a car, so buses are and will always be needed. But why the polluting, road-clogging buses? Politics, outdated and muddled thinking and peculiar ideas that are thought to be 'green'.

New buses are becoming greener at last; some are now using butane for fuel and I have an idea that some hybrids are in service now. I suspect, though, that it is only in major urban centres. A lot of the buses in more rural areas that I see are smoky old diesels.

But the sensible alternative, personal transport that takes the user from their A to B (instead of forcing them to travel from A to B to C to D), at no cost to the taxpayer, using engines that are regularly improved as far as pollution is concerned and are able to carry goods or equipment or tools or large and/or heavy parcels or luggage, etc., conveniently and quickly, has been bad-mouthed for so long that people have been brought to believe in the less efficient alternative.

Roads have actually been made less efficient for the motor car in the UK - hence the traffic clogging - for decades. Initially it was a lack of or a restriction on investment (Mrs T's veto on the building of a four lane M25 from the outset) but latterly it has been wilful obstruction.

On a level 'playing field' the bus would have been forced to modify and improve much more over the decades.

This is just tiresome. I am disabled and on benefits, so as far as EITHER party (and most of the public) is concerned I'm scum. Both seem bent on gutting the welfare state and bullying us into a workfare system that is already failing, getting only 13% of mandatory participants in the Work Programme back to work (and then for seldom longer than six months).

The left continue to argue that the way to stimulate the economy (and inactive people) is a higher minimum-wage. The right continue to argue that the way to stimulate the economy (and inactive people) is to reduce state benefits. But outside the punch and judy show of "cheats and scroungers" rhetoric there is a THIRD option available to us, which is to TAKE LESS TAX!

Giving every single citizen the £10,000 personal tax allowance that Vince Cable promised before the election (and which is currently a government 'aspiration') would do more to make work pay than any measure of spurious "welfare reform" by IDS, the man with delusions of adequacy, or snake-oil Work Capability Assessments by ATOS healthcare. It would make the Tax Credits infrastructure redundant in a single hit, saving £23.7 billion [according to the Guardian] which would more than cover the cost of the tax-cut. It would make part-time work pay for parents, students or people with disabilities, encourage people who are working to do more and it would also treat the public with the respect we deserve.

https://falseeconomy.org.uk/campaigns/report/im-from-the-right-and-i-think-cuts-are-wrong

"Why is a polluting, road-clogging transport method so cherished?"

Simple.

T-A-X. All (legal) road users pay it. Its an easy source of income. Why would they do anything to reduce the tax take?

re #12
Chuckle of the Day Award?

"Like I say, when you’ve eaten your slice your plate is empty. Works both ways, I’m afraid, this does."

So why did we end up borrowing more and more from the Arabs and the Chinese to pay Mr Kipling a fortune under PFI to bake even more slices then Saga?

susan @ 45

Not sure where you're gleaning support for the Coalition in my post 7. As if! Re Balls and his 'deficit denying', not really - conventional economic theory lends support for not cutting in a recession (for doing the opposite even); so whether one agrees with that or not, and I know you don't, it doesn't follow that to oppose large public spending cuts at this time is to 'deny' the existence of the deficit.

10. At 10:49am on 14 Mar 2011, IR35_SURVIVOR
(US growth) - "...that all about to change in the USA. Even for them the Debt pile is to big to go much further."
=================

Mmm - so the increasing power of the republicans might force Obama down the same tragic path as the disunited kingdom?

The USA has been showing growth up to this point. Let's say they adopt policies similar to the disastrous ideology of the tories and the US economy subsequently goes into collapse like the domestic economy here. That would pretty much reinforce the causal role of the cuts/austerity/fear ideology in economic collapse.



Tories: taking labour's mess and making it worse.

re #37
Work is a good way to get Britain out of recession. I suggest we make travel associated with work totally free!

No46 Saga,
Have you noticed the right wing loonies are out in force today? RockingRobin and IR35 have now been joined by Susie to form a dynamic triumvirate.
It will develop into a day of undiluted laughter.

Something for Mr Balls & Co to chew over....

https://blogs.ft.com/westminster/2011/03/the-banker-tax-is-paid-overwhelmingly-by-non-bankers/

And whilst he's at it, he can chew on this as well.....

https://blogs.ft.com/westminster/2011/03/would-ed-balls-vat-plan-breach-eu-law/

54 DeusExMacintosh ...

Just wanted to congratulate you on your choice of 'handle' (unless that's your real name of course, in which case may I offer my commiserations ???); I'm just hoping your comments live up the billing (unlike mine, obviously ...) ...

On (ish) topic, we had Balls up here (to add to the long list) last week or so; or Marty as we call him ...


It's grim Down North ...

#32 Bryhers wrote:
"However,this pre budget positioning is of mainly academic interest.Last week I posted that the Arab Spring was Mr.Osborne`s black swan equivalent to 2007-8.We must now add a second,the Japanese earthquake and tsunami.Both are likely to damage world growth,the more vulnerable economies like ours will suffer damage."

If, as was discussed before, circumstances change, then economic policy may have to change as well. Of course no Chancellor will discuss changing course in public before actually doing so.

Economies can be vulnerable in several ways, exposure to international trade, lacking raw materials, etc. Having high levels of debt, both public and private, also makes an economy vulnerable. Will Labour accept this, or set their face against it?

Finally, there are too many birds on this blog (swans, owls, and even robins). Countries that are not indebted have more options when confronted with black swan events. We should reduce our national debt to be better prepared for a WMD attack on London.

OOPS!

Mortage lending DOWN - both compared with previous month and with same time next year.

The collapse of the domestic economy caused by tory ideology is gathering pace. Hopefully the recovery in the rest of the world will continue so that the handful of 'british' exporters can continue pick up a few scraps from the table of the functioning economies.


Tories: taking labours mess and making it worse.

58. At 12:51pm on 14 Mar 2011, sagamix wrote:

"Re Balls and his 'deficit denying', not really - conventional economic theory lends support for not cutting in a recession (for doing the opposite even); so whether one agrees with that or not, and I know you don't, it doesn't follow that to oppose large public spending cuts at this time is to 'deny' the existence of the deficit."

The problem with the so-called Left citing conventional economic theory is that they only consult such textbooks in the bad times.

Yes, Keynesian theory suggests spending in a recession to stimulate the economy is a good thing. It also states that the inverse is to save during the expansions. Gordon forgot that bit.

Are you really going to tell people you believe a state can spend in both the bad times *and* the good times? We were supposed to save during the expansion with the specific intention of using that money to spend during the recessions. If you don't, you find credit is much harder to come across and much more expensive.

On top of that, we ARE still deficit spending. Last time I checked we're still borrowing and still spending every year. That should make it clear to you that arguing for more spending is beyond stupid (as well as unfeasible) when we know the problem is with what the money is being spent on - not how much.

That's the problem with armchair economists and the entire Labour Party model. It's not socialist or leftist by any means; it's just fiscally-irresponsible capitalism. The sooner we recognise it for what it is the better. Spend in the good times, spend in the bad, assume the money supply is limitless.

sagamix 58

But you said at 7 that Darling had a solid plan for the economy. So unless, like Balls you change your mind very quickly, you support it. As the Coalition are following pretty much the same plan as Darling, you must then support the Coalition. As Darling does not support Balls on economic matters, I fail to see what your post was about in the first place, if you are now changing your mind.

Guess you are just an opportunist as well, trying to sell Labour to get them into power, with no actual thought for how their policies effect Britain and its people.

I for one am glad that they are shining a light on Labour's good-time government. Hopefully it will mean a shift away from the left's politics of envy and fear and lead to hope, aspiration and responsibility. I'm happy to accept that Labour were trying to improve the services of the country and they got rather carried away but retrenching to the old leftist roots would completely distance me from them, and I suspect most of the electorate as well.
If the coalition can turn around the economy in two years time and we start growing on a better and more sustainable footing, I can see Labour being out for a very long time again. As I said before, how do Labour decontaminate themselves from fiscal irresponsibility?

The exchanges may be wearily familiar but the economic back-drop is markedly different. No government has ever had to manage a structural deficit and over-spending to this extent before.

The real issue is whether or not the Coalition can conjure up the right policies to stimulate faster growth. If they can then Big Ed and Little Ed will have to come up with something better than some lollipops for motorists.

marnip @ 43

That's not how I recall it. I seem to remember the tories' 'age of austerity' talk going down like a bucket of sick and their poll ratings sliding accordingly. Cue the U turn and the adoption of more balanced rhetoric. Reason they won (IMO), albeit after extra time and penalties, is 'time for a change'. Thirteen years is a long long stint, after all, and people had had sufficient of Gordon Brown. Not just Gordon either, to be fair, the whole New Labour project was no longer fresh and intriguing. Some of the public had even had enough of Harriet Harman. TFAC is the most potent force in politics (transcends mundane stuff like policy detail) and it surprised me - still surprises me - that Team Cameron's win was so very fuzzy, that they didn't cruise it in 90 minutes.

66. At 1:05pm on 14 Mar 2011, jon112dk wrote:

"The collapse of the domestic economy caused by tory ideology is gathering pace."

You do realise the cuts being made are cuts to borrowing, right? Can you please point me to the alternative? We're not cutting any debt. All that's being done is to slow down the piling up of that debt. The debt is still growing, as are the interest payments.

I really have to say, it seems like you have no concept whatsoever of how bad the problem is.

40. RedandYellowandGreennotBlue

'Why is a polluting, road-clogging transport method so cherished?'

In terms of tax revenues is it not more profitable than rail networks which are relatively more subsidised?

Rail is the most efficient and least polluting of any freight transport. It's criminal that it has been allowed to decline at such a rate against the growth of road freight.
Marnip #48: No, 'suppliers don't deliver products to Tescos on the train in carrier bags.' But a better, more integrated rail and road network could lessen the reliance on road freight. Particularly as containerisation is generic to all forms of transport.

The depth and speed of making cuts in spending and tax rises are the critical factors for an economy teetering on going back into recession - and if it does go into reverse, the fall in tax take and rise in welfare payments will drive up the deficit, not reduce it - so the cutting too much too fast will increase the deficit - the exact opposite of the stated aims of economic policy.

That is exactly what happened in Eire - a rightwing government that George Osborne praised as providing "a vision" for how to run an economic policy - and it's exactly the policy he is following here - only more so.

The point about the risk of causing another recession was made as soon as the spending cuts were announced months ago - since then we've had Q4 showing recession on the way and the impending body blow to growth from the huge hike in oil prices about to hit.

There is a dogma at the heart of coalition thinking based on the concept of the public sector "crowding out" the private sector - so all you need to do to get growth is shrink the public sector - but there is a fundamental flaw in the way this is being applied.

Unlike a cut in spending matched by a cut in taxation, the current strategy is to take £110 Bn in cuts and tax increases out of the economy completely - the spending power is not being shifted via tax cuts to the private sector, so this is a total loss of aggregate demand to the UK economy - and as every pound that would have been spent by the government then circulates several times before it lodges back on deposit somewhere, the impact of cutting £110 Bn is magnified several times in terms of total demand - how much this is depends on where, how and when it falls.

As a very large proportion of the cuts will be in capital projects such as schools, roads and buildings, its will impact be be large - potentially ten times the amount being taken out of the economy. This is particularly true of the constrcution industry which has ten times as many people employed in producing materials which are then used by those directly employed to build.

We were promised a White Paper for growth, but it was shelved. Now we are told the budget will deliver a series of measures for growth - these include Enterprise Zones (a lacklustre idea dusted off from the 1980s Tory government) and tax breaks to take on workers. As any neocon will tell you, most of these handouts simply replace money companies would have spent anyway and rarely produce any net benefit.

IMHO there are a number of other serious issues waiting in the wings - the collapse in mortgage lending and first time buyers risks a property meltdown, just as it did in Eire.

The oil price hike will further reduce the purchasing power of British consumers, as more of their money goes abroad to pay not only for motoring, but also heating, plastics, food and everything else that uses oil.

Paul Mason's NewsNight Blog's analysis of the risks of a further round of banking crisis flowing from the Euro debt situation will come to a head in the next few months, with many British banks very exposed.

Events in Japan are in the short term very deflationary to world demand - this would in itself be enuogh to tip many economies into recession.

Therefore for Labour to propose to slow down the rate and scale of cuts and tax increases right now seems to be the only logical and practical response to a reasoned risk assessment of double dip recession.

I'd only add that UK PLC now owns £85 Bn woth of banking investments which should be considered against the borrowing requirement of £110 Bn this year - this is a relatively liquid asset that can be set against some of our borrowing, when considering how we manage our debt level in the short to medium term.

To continue with the original cuts plan in the light of events must make any reasonable observer ask whether the strategy is really about reducing the deficit when there is plenty of evidence that it will rise not fall - and therefore the real polcy objective is to shrink the state at any price - even if it is counter-productive, raising unemployment, cutting living standards and seriously damaging public services.

The Ofice for Budgetary Responsibility's assessment of the government's plans was supportive and predicted rising exports, growth and lower inflation. It has been wrong on vritually every forecast so far - given the hugely recessionary proessures within the UK economy and from outside factors, how can they still go on predicting economy growth and falling debt?

We know the difference between Centre Coalition Govt and Centre Opposition.

One says it is going to remove structural deficit over 5 years, the other said it would halve it over 4 years.

I looked at the OBR November update - strangely structural deficit doesn't appear anywhere. I suspect if you ask George O or Ed B the sheer amount of tumbleweed would knock you over.

So I'm going to have a bash. Deficit at election a little over £150bn, so lets say £100bn is structural (dont know but I think this is prob on high side, however as previosuly indicated no politician or quango report to help me).

So we run that off over 5 years for the Torylition and run-off to £50bn over 4 years for Labour (we assume they both benefit from some mystical economic growth that gets rid on the other bit of deficit).

For the period of this parliament that means about £90bn total extra debt arising from Labour. This is in context of projected debt of £1.3trillion by 2015. Or if you prefer in the context of around £700bn of govt spending each year.

A little history to throw in - Labour/Tory spending plans pretty much the same for much of 1997-2010 (and please remember that good ol Ken left us with £350bn of debt having more than doubled it during his impressive chancellorship).

So there we go folks - take your pick.

By the way, most up to date yougov has the electorate at 44% Labour and 43% Torylition (33% Tory, 10% Tory-lite). Now which side needs to improve its message?

(PS - I dropped a bit of tuna baguette on my sums at one point so please feel free to challenge or provide alternatives)

72#

Ignore him, he's like one of those screaming red faced 8 year old kids in short trousers who you see stamping their feet and bawling in the supermarkets when they're not getting the level of attention they want.

Their mothers frequently ignore them and in this case, in my very humble opinion.... Mother Knows Best.

We can have no confidence that Labour will be able to implement even weak reforms to save expenditure. Despite pensions being a time bomb that has been building up for decades labour twice dropped the ball in the last government. Firstly by ignoring the pension report on state pensions that they commissioned. Then by caving in to a weak attempt at public sector pension reforms, only moving pension age for new recruits whilst still allows existing members to retire at 60.

Would Ed M be able to do any better than blair / brown? Absolutely no chance it would again be put of until for someone else to sort out.

51 "And I bet you got that from the Grauniad, didnt you, bryhers?"

Golly gosh, no fubar, bryhers picks up all her tit-bits of knowledge from chums she invites round to dinner. If she wants to find out the working-class view, she asks one of the waiters.

"That is exactly what happened in Eire - a rightwing government that George Osborne praised as providing "a vision" for how to run an economic policy - and it's exactly the policy he is following here - only more so."

It would help a great deal if you compared like with like. There are monumentally significant differences between the economies of the UK and Eire.

"IMHO there are a number of other serious issues waiting in the wings - the collapse in mortgage lending and first time buyers risks a property meltdown, just as it did in Eire."

So, do you want lending to go back to the unchecked, untrammelled silly levels that it was at before or not? What cut the first timers out was the unsustainable boom in buy to let. Get rid of them, you get rid of half the problem. Do you not think that property in the UK is overpriced for what it is? Do you advocate reflating the property bubble?

"I'd only add that UK PLC now owns £85 Bn woth of banking investments which should be considered against the borrowing requirement of £110 Bn this year - this is a relatively liquid asset that can be set against some of our borrowing, when considering how we manage our debt level in the short to medium term."

Slight problem there Dicky, old chap. You flog that off and reap the money back from it and you can only do it ONCE. Whereas you're already talking about short to MEDIUM term. From a one off hit, there is no medium term.

73. At 1:13pm on 14 Mar 2011, TheBlameGame wrote:
40. RedandYellowandGreennotBlue

'Why is a polluting, road-clogging transport method so cherished?'

==============================================================

There was a TV program recently on the freight company Eddie Stobart which in the UK uses road and rail. From a depot in the Midlands a regular shipment went by rail to the Tesco depot in Livingston, Scotland (Glasgow to Liv by road). Tesco then required an extra shipment which went by road.

In theory the rail consignment should have arrived well before the road option. But the freight train often had to give way to passenger trains during the day as these had priority. In the end the road beat the rail option by a whisker.

Comparedto North America freight rail does not have anywhere near enough sidings to make rail freight profitable. Due to competition from passenger traffic rail freight only has sole use of the rail network between midnight and 4am. As you say infrastructure for rail freight is pretty much non existent.

Ed Balls and Ed Miliband are the embodiment of Labour's lurch to the left since the last election. Perhaps lurch isn't the right phrase. How about a pair of jerks.

73#

Absolutely spot on correct, TBG. No-one has come up with a strategy to address this in twenty years. Utterly baffling as to why it hasnt been done.


Saga#
"Some of the public had even had enough of Harriet Harman."

Some? Only SOME? Try "almost all"!!!

Some professional commentators, and the dangerously clever Ed Balls, are saying that Osborne is repeating the mistakes of the 1930's by deep 'cuts', and is therefore likely to push the economy into a double-dip recession.

Whilst history often provides useful lessons, they may not always exactly replicable for the (economic) environment of today.

So, if (very big if) Osborne really understood what is required to unleash those animal spirits, especially of SME's, and did the needful in the forthcoming budget, then another recession might be averted.

Rather pessimistically, this blogger does not think that Osborne has the faintest idea about how to free SME's from 'the enemy within', and so any recovery is likely to be muted.

jon112dk

'The collapse of the domestic economy caused by tory ideology is gathering pace.'

Or, as someone who wasn't economically illiterate might put it, 'essential rebalancing of the economy'

Funny how you haven't mentioned the fastest rate of growth in manufacturing in 16 years anywhere.

Anyway, it does'nt really matter too much what the Coalition or the Opposition do now over the next few years because the eye-watering levels of taxation now mean only one thing for the general public ...

Cash is king again.

Politicians never really learn, do they?

"Out of the 275,000 paying the new top rate of tax, only 63,000 work in ‘financial intermediation’, defined to encompass banks, insurance firms and pension funds."

From the FT article referenced at post 62.

I'm surprised it's as many as 275,000. Don't these people have good tax advisors?

marnip @ 67

No, I believe in aggregate debt at manageable levels (40% of GDP) and balancing the books re income and expenditure, so no deficit and no surplus over the piece. Labour seem to believe in this too: debt was 40% when they came in and was 40% when the global financial system went for a burton. Anuual deficit (at 3%) about the same too. Where I take issue with Labour's approach was their insistence on running budget surpluses in the early years (paying the debt right down to 29% - an absurdly low amount). This really was silly and was driven more by politics (of both the national and the internal Brown v Blair variety) than anything else: all it meant was that in order to fulfill their mandated mission to upgrade public services they had to 'splurge' in the later years (cue deficits and cue aggregate debt back to where it started at 40%). Not good for VFM when spending is large & lumpy like this. How much better to have spent the same (in total) but ramped it earlier and more gradually. Tony wanted to do this, interestingly, but a certain 'Iron Man' of a Chancellor, keen to look all prudent and tough, stood in his way. Still, regardless of this, one must be fair and acknowledge that we wouldn't be facing a UK fiscal crisis of anything like this scale if it weren't for what happened (with the banks and US sub-prime and credit derivatives) happening.

FS 51


" And I bet you got that from the Grauniad, didnt you, bryhers? There is more disappointment, more anger, more opprobrium directed at the senior ranks at Flag/Star Officer level and the failures of leadership at that level and in the MOD and Defence Equipment & Support than there is at the politicos. There is little time for Cameron or Fox, but suggesting that the "fury" (always a word the left thinks it has a monopoly on, isnt it? "Fury"... maybe they should copyright it. Get the OED to introduce a new definition....) is purely aimed at Number 10 is factually inaccurate. It is also accurate to say that SDSR is seen within the forces as being Treasury led rather than by Strategic Requirements. However, it was pretty much always thus."

My sources are more intimate,this enables me to speak with a borrowed authority on the fury felt by service personnel.

Like the police,they thought the conservative government were on their side.They feel betrayed.

A final point of contention.Instead of retiring at 55,it is now 60.But there is no statutory obligation for men or women to be kept on beyond 55.Some could be retired at that age and not get their pension until 60.

I don`t read "The Guardian",have always thought of it as a paper for social workers and other worthies.I read "The Times" and FT.

FS51


I am also told the Sea Harrier was an excellent fighter,unfortunately retired by the previous government.

However,the Ark`s Harriers have recently been updated,have first rate kit and while primarily a ground attack aircraft,may well see off the Libyan opposition.

It was interesting to see a change in tone (i.e. softer) from both Ed Milliband and particularly Ed Balls in the clips I saw of their pre budget announcements today. No doubt it's all part of the Labour spin machine which we thought might be put out to roost following the last election (Note how for the last few months no Labour politician, however minor, has been allowed to mention the government without the appendage of 'Conservative led' once it became apparent there was no need to attack the Lib Dems any more.)

However, despite the softer style the substance, or lack of it, remains the same. No tough decisions just populist measures i.e. tax the bankers and reduce fuel VAT which (like the 50p tax band)they know will have widespread support despite the fact, as someone mentioned above, they spent their years in office taxing motorists to the hilt and it won't address the underlying causes.

Nick says that Tories key point has been that Labour tell you what they wouldn't do not what they would. That is true up to a point but in my view they haven't been doing that nearly enough. Even by Labour's stated account that they would halve the deficit (which i don't belive they would have done if Gordon Brown had survived) they would have had to be making massive cuts now, but if you listened to them you wouldn't think so. Just platitudes like cutting too soon too fast and difficult decisions. While we know they will squirm out of any detail, every time they oppose cuts they should be pressed on what cuts they would have been making to half the deficit were they in power. No doubt all you would get is targetting bankers and all the 'rich' with generalities about improving efficiency.

88 "My sources are more intimate,this enables me to speak with a borrowed authority on the fury felt by service personnel."

"intimate" sources? Perhaps you need a bigger dining room table or perhaps you should invite fewer guests?

Unless you've spoken to every single member of the armed forces, your 'authority' is merely the view of the people you HAVE spoken to and their view of what the people they know are feeling.

All a bit tenuous.

The proof of all this will be in the proverbial pudding... whether it's an Eton Mess or a Red Pudding remains to be seen.

But seriously, time will tell and the 'stuff' in between is just parties fighting for votes with the usual Punch & Judy rhetoric. At present, it's just too early to make any long-term predictions.

The Tories desperately need some economic happy time in order to justify the cuts (or they'll be for the chop themselves); while Labour will be banking on the economy going pear-shaped in order to say "I told you so".

Both parties are guilty of being too soft on the banks; both parties are currently committing environmental hypocrisy by attempting to 'befriend' motorists over proposed cuts to fuel tax.

Personally, I'd love to see Osborne and Balls go head-to-head in a boxing ring, or perhaps Mexican wrestling, but that perhaps belies my understanding of this otherwise complex issue.

PS: Top Gear being referenced as a source of unbiased, public opinion on motoring = hilarious!

#74 Richard Bunning

In the interest of truth, justice, etc, I would add that at least some government borrowing will eventually be repaid. This results in a negative multiplier in the future.

Respected economists disagree about many of these issues you raised. I find it ironic that you seem to accuse the coalition government of dogmatism, whilst at the same time your contributions rarely seem to acknowledge academic uncertainty and intellectual doubt.

84. jobsagoodin wrote:

'Funny how you haven't mentioned the fastest rate of growth in manufacturing in 16 years anywhere.'

But how much of that can you attribute to a government not yet a year in the job? Surely some credit must go to Lord Mandelson and Gordon Brown.

re #54

They might be better at budgeting if they stop fudging the statistics.

I know someone who has been unemployed for a while and every quarter they have their payments stopped for a couple of weeks without reason.
My untrusting instinct tells me this is to massage the quarterly unemployment figures.

92 - "PS: Top Gear being referenced as a source of unbiased, public opinion on motoring = hilarious!"

Popular programme, though, isn't it? There are some lefty wets who don't understand the shows popularity but that's mainly because they don't understand people.

sagamix 87

'debt was 40% when they came in and was 40% when the global financial system went for a burton'

and not far shy of 100% by the time Labour's deficit is eliminated.

' one must be fair and acknowledge that we wouldn't be facing a UK fiscal crisis of anything like this scale if it weren't for what happened'

Correct. And what happended post 1999 was that Labour went on the most reckless public spending spree in this country's history. Shame they still won't fess up and admit they got things so horribly wrong.

What I'd like to see from both sides is some humility, openness & honesty. Labour should acknowledge the mistakes they made & explain why what they're saying now is different from what they were saying in Government. They also need to come clean on the figures. the Conservatives need to acknowledge that they happily supported Labour's expenditure plans until 200, that the major cause of the deficit was the global recession & why such savage cuts are necessary. I seem to recall them attacking the previous Government's proposals to increase National Insurance contributions - yet these are rising next month as proposed by their predecessors. Until I see some honesty & humility, none of them are getting my vote.

65. At 1:02pm on 14 Mar 2011, johnharris66 wrote:
#32 Bryhers wrote:
"However,this pre budget positioning is of mainly academic interest.Last week I posted that the Arab Spring was Mr.Osborne`s black swan equivalent to 2007-8.We must now add a second,the Japanese earthquake and tsunami.Both are likely to damage world growth,the more vulnerable economies like ours will suffer damage."

"If, as was discussed before, circumstances change, then economic policy may have to change as well. Of course no Chancellor will discuss changing course in public before actually doing so."

If Japan has an output gap,then the medium term consequence of earthquake and tsunami could be to stimulate growth as investment in building and infrastructure builds up,increases employment with effects through the economy.

The short term effects will be negative however as Japanese output falls reducing their demand for goods and services throughout the world.

How Mr.Osborne responds will be a test of his statesmanship.He could be faced with deflationary forces from several directions at once,from oil,from world trade and his own spending cuts.

If he he needs to change his policy of rapid cuts will he do so? Or will ideology trump pragmatism.We don`t know,he hasn`t yet been tested

72. At 1:13pm on 14 Mar 2011, Marnip wrote:
You do realise the cuts being made are cuts to borrowing, right? Can you please point me to the alternative? We're not cutting any debt. All that's being done is to slow down the piling up of that debt. The debt is still growing, as are the interest payments.
I really have to say, it seems like you have no concept whatsoever of how bad the problem is.
========================================

I realise exactly how bad it is.

We have ....

Growth DOWN
Inflation UP
Tax UP
Unemployment UP
Consumer spending DOWN
Consumer confidence DOWN
Mortgage lending DOWN
House prices DOWN

Shall I go on?

Old adage: when in a hole, stop digging.

The tories inherited a mess and are making it worse, not better.