I read Escotrogen's post with interest, he advocates getting banks to part with their money but that is what lead to this whole global crisis in the first place. We have to make cuts in expenditure and they have to be severe enough to start to swing the economy back.
It always amuses me that people automatically assume that wages in the private sector are so much better than the public sector. In most cases they aren't better at all and the public sector pensions are the envy of the private sector and, in many cases, still include final salary schemes that have been almost wiped out in the private sector.
Forget the high rollers that Labour keep harking on about, they are out there but not in sufficient number to make a realistic difference even by taxing them out of existence. Take away the very top private sector earners, in the middle and below the wages between the two sectors aren't that different and at the very bottom public sector wages are usually more generous that the private sector with hardly any public sector workers on minimum wage.
The private sector has been cutting its cloth for a while now as firms struggle to cope with the recession, now it has fallen on the public sector. A pay freeze now is not a pay cut because we are in negative inflation so the salary you earn this year is automatically worth more than the same salary last year. The idea of pay awards is to keep your spending power at the same level year on year, it is not a reward or a promotion, if inflation is negative there is no need for a pay rise anyway.

Originally Posted by Markintime

The private sector has been cutting its cloth for a while now as firms struggle to cope with the recession, now it has fallen on the public sector.

Hear HEar, about time they did their bit to help the economy

Originally Posted by nigegilb

Cameron is making a HUGE mistake over the referendum.

No he isn't. If the wretched thing is in place by the time he gets into power it will be a whole new legal ball game, the rules of which are unclear at this point. Under those circumstances, any referendum may have to be about remaining in Europe, not simply about accepting the constitution. Offering a referendum on leaving Europe would be a major policy development and, very probably, highly divisive - something which won't have escaped Labour's strategists. Under the circumstances, Cameron is wise to avoid an open-ended commitment


Quotation edited for brevity

As a strategic move I believe the speech was solid, it appears the markets agree also.
The issue of servicing an ever increasing national debt has now overtaken the issue of recession. By that, in laymans speak, I mean at the current rate of economic recovery versus the rate of borrowing and interest does not produce lines that converge.....
The flip side is reducing stimulus by cutting pay, services and increased taxation will slow the economy down even more.
In my opinion he got it right with measures that are cautious (the brakes need to be applied slowly), and by pre-warning, the negative stimulus may be reduced.
There will have to be an income tax rise, but not until the economy and individual psycholology of the UK population can take it - in a year or two.

The comparable European countries handled this much better on a national level, but they have more debt averse populations and spending cultures.

Originally Posted by FORMER_FYRDMAN

Originally Posted by nigegilb

Cameron is making a HUGE mistake over the referendum.

No he isn't. If the wretched thing is in place by the time he gets into power it will be a whole new legal ball game, the rules of which are unclear at this point. Under those circumstances, any referendum may have to be about remaining in Europe, not simply about accepting the constitution. Offering a referendum on leaving Europe would be a major policy development and, very probably, highly divisive - something which won't have escaped Labour's strategists. Under the circumstances, Cameron is wise to avoid an open-ended commitment


Quotation edited for brevity

Well if he sits back and allows it to be ratified, Mandelson will have done his job. Nurse Gordon Brown along until the Treaty is ratified, transfer more powers to Brussels in a stitch up super-state and to trump it all enthrone Blair as the new president of Europe and for sure he (Mandelson), is the only one smart enough to lead the Labour Party.

What effective power will Cameron be left with?

I'd go for the referendum and make a fight of it. There are few enough reasons for Labour voters to switch to Tory, or UKIP voters to come back to the fold. Does Cameron want a paper thin majority? Cos that is where he is heading.

I want the City of London to still be there in 10 years time, it generates 20% of UK GDP. France and Germany would sooner have the spoils to share amongst themselves. If that happens we'll be a basket case sooner than you know it.

For those with an interest in understanding short term macroeconomic projections (long term ones are just called guesses), this may help:

http://www.bundesbank.de/download/pr.../memmod_en.pdf
I believe the method was designed by Bank of Ireland.

Check page 179 if you are mathematically inclined and wish to model UK...

Originally Posted by Alsacien

As a strategic move I believe the speech was solid, it appears the markets agree also.
The issue of servicing an ever increasing national debt has now overtaken the issue of recession. By that, in laymans speak, I mean at the current rate of economic recovery versus the rate of borrowing and interest does not produce lines that converge.....
The flip side is reducing stimulus by cutting pay, services and increased taxation will slow the economy down even more.
In my opinion he got it right with measures that are cautious (the brakes need to be applied slowly), and by pre-warning, the negative stimulus may be reduced.
There will have to be an income tax rise, but not until the economy and individual psycholology of the UK population can take it - in a year or two.

The comparable European countries handled this much better on a national level, but they have more debt averse populations and spending cultures.

Excellent post. I think that there are many people in the UK who appreciate the enormity of the problem and that there are going to have to be some stern measures taken if the situation is going to improve. They might not revel in the austerity measures taken but they can, at least see that there is a road to recovery and that we, as a nation, are going down it. In times of trouble people turn to a strong leader and George Osborne is showing himself better able to face the harsh realities and lead. I have no faith in the nebulous utterings of Cameron, in my book he's trying to be another Blair but Osborne is willing to stand up, give us the bad news and then lead us out of the mire, at least I know what he stands for and can put some faith in his clearly stated policies.

Originally Posted by nigegilb

Originally Posted by FORMER_FYRDMAN

Originally Posted by nigegilb

Cameron is making a HUGE mistake over the referendum.

No he isn't. If the wretched thing is in place by the time he gets into power it will be a whole new legal ball game, the rules of which are unclear at this point. Under those circumstances, any referendum may have to be about remaining in Europe, not simply about accepting the constitution. Offering a referendum on leaving Europe would be a major policy development and, very probably, highly divisive - something which won't have escaped Labour's strategists. Under the circumstances, Cameron is wise to avoid an open-ended commitment


Quotation edited for brevity

Well if he sits back and allows it to be ratified, Mandelson will have done his job. Nurse Gordon Brown along until the Treaty is ratified, transfer more powers to Brussels in a stitch up super-state and to trump it all enthrone Blair as the new president of Europe.

What effective power will Cameron be left with?

I'd go for the referendum and make a fight of it. There are few enough reasons for Labour voters to switch to Tory, or UKIP voters to come back to the fold. Does Cameron want a paper thin majority? Cos that is where he is heading.

Nige, the point is that Cameron can do nothing until he's elected and the timetable allows ratification before then, unless the Czechs do something spectacular. Stitch-up is the right expression but, even if he offered a referendum now, Cameron is likely to find that the caravan has moved on before he can actively do anything about it.

Bottom line is too much money is being spent that shouldnt have been spent in the first place by labour. The key to balancing the public books is going to be identifying what we can do without. And payrises for overpaid public servants seems like a good start.

If they dont like it they can leave and try their luck in the private sector. Double winner, they can then do something productive for the economy by generating income. If the job they leave really needs doing then it opens up a slot for somebody currently unemployed who IS prepared to work for that wage. Or if they were doing a non-job that we can do without then saves us all a packet. Happy days.

However the main thing is all these cries of 'how beastly' they are going to get the chisels and saws out should remember if Labour had kept the books more in balance in the first place. Either by employing less civil servants, or employing them on sensible money, then nobody would have to be feeling the pain now. It was all avoidable.

Originally Posted by FORMER_FYRDMAN

Originally Posted by nigegilb

Originally Posted by FORMER_FYRDMAN

Originally Posted by nigegilb

Cameron is making a HUGE mistake over the referendum.

No he isn't. If the wretched thing is in place by the time he gets into power it will be a whole new legal ball game, the rules of which are unclear at this point. Under those circumstances, any referendum may have to be about remaining in Europe, not simply about accepting the constitution. Offering a referendum on leaving Europe would be a major policy development and, very probably, highly divisive - something which won't have escaped Labour's strategists. Under the circumstances, Cameron is wise to avoid an open-ended commitment


Quotation edited for brevity

Well if he sits back and allows it to be ratified, Mandelson will have done his job. Nurse Gordon Brown along until the Treaty is ratified, transfer more powers to Brussels in a stitch up super-state and to trump it all enthrone Blair as the new president of Europe.

What effective power will Cameron be left with?

I'd go for the referendum and make a fight of it. There are few enough reasons for Labour voters to switch to Tory, or UKIP voters to come back to the fold. Does Cameron want a paper thin majority? Cos that is where he is heading.

Nige, the point is that Cameron can do nothing until he's elected and the timetable allows ratification before then, unless the Czechs do something spectacular. Stitch-up is the right expression but, even if he offered a referendum now, Cameron is likely to find that the caravan has moved on before he can actively do anything about it.

This is what Hague said the other day;

And even if the Treaty had been ratified when a Tory government took office, a referendum could still be possible. He said: "We haven't made the decision," he said. "I certainly haven't ruled that out."

The point being, if Cameron was brave enough to promise the referendum, the two remaining countries would have very good reason to stall their own process. Without the promise of a UK referendum it will be ratified by May. Cameron's policy appears to be to will that to happen.

There is no way Hague would hold a referendum in these circumstances, Tories are trying to con the electorate. UKIP vote will hold, rightly so.