Huge spending cuts, anyone?

Discussion in 'Current Affairs, News and Analysis' started by Blogg, Jul 18, 2008.

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  1. No matter what anybody says about firm Aircraft Carrier contracts, F35 etc etc, it has to happen.

    Brown, our oh so "prudent" Chancellor, has pushed this country to a point where in practical terms he has blown up borrowings to an entirely unsustainable level. Some thing has to give, if not in the lifetime of this Government then the next.

    UK Budget deficit soars to the worst since records began

    "Britain's budget deficit has soared to the widest in more than 50 years, underlining the pressure on Gordon Brown to rip up his borrowing rules as the economy heads into a downturn.

    The deficit swelled to £24.4bn in the three months to June, official figures showed today. Last month alone, the shortfall increased to £9.2bn, higher than the £7.4bn pencilled in by economists.

    The figures come as speculation mounts that the Treasury is expected to re-write its own rules on borrowing in order to avoid forcing up taxes

    The figures were horrific, absolutely horrific,'' said Philip Shaw, chief economist at Investec. "Faced with a choice of tightening fiscal policy, breaking both the rules or changing them, the Government seems to be opting for the third choice.''
  2. But Northern Rock shareholders are happy.

    That's the important thing.
  3. No wonder Cameron has been told that the next election is the one to lose with the shiite storm of economic collapse coming over the horizon.
  4. Biped

    Biped LE Book Reviewer

    Yeah, I think 'Call me Dave' might very well be advised to stay at the back when volunteers are called for - it's going to get messy, very messy, and his first term is going to kill the Conservatives just for trying to put Broon's screw-up right.
  5. msr

    msr LE

    Margaret Thatcher knew what needed to be done.

    And did it.

  6. Just like the 1979-1983 parliament, which needed the redeeming feature of a war to make the then government liked!
  7. Biped

    Biped LE Book Reviewer

    Dave hasn't got a pair like she had. Do you REALLY think he's got what it takes to put all this right AND win the following election?
  8. labour sold off all the nations silver while the going was good. Now its going badly, there is nothing in the cupboard. New labour are going down the tubes, the concern is whether they take the country with them.
  9. Bring back maggie.

    She´ll sort it.

    And bring the argies to heal.
  10. Spanish is not the 1st language of the NHS but I guess they will be cheap! :D

    ps Glad i'm not a Transexual outreach worker on £45k + copper bottomed pension. An awful lot of non jobs in Quango land need to go. :x
  11. So, our unelected Prime Minister is now wrecking the economy in time for a Tory Govt, how cynical can it get?

    Brown is not playing by the rules any more

    FRASER NELSON 8:55am

    The Scorched Earth policy has begun. The FT has a hugely significant story – that the Treasury is “working privately on plans to reform Gordon Brown’s fiscal rules” which would “initially allow for increased borrowing”. In the vernacular, Brown has realised that if the Tories win the next election the he is now spending with Cameron’s Gold Card – every by-election bribe, every union sellout will be funded by borrowing with the bill sent to D. Cameron Esq. Cameron will have to tax us to pay for what Brown is today spending.

    The Treasury is claiming that it was always going to “review” its 40% limit after the current economic cycle ends. It will struggle to find a single sentence in any speech that will corroborate that. Danny Finkelstein said on Newsnight that this will undermine the whole New Labour project. My take is that Brown doesn’t care, not any more. Like a retreating army, he doesn’t want the advancing Cameroons to have any advantage at all. Debt is a boring subject, but it means we’ll all pay more taxes for longer. I have blogged here before about Brown’s existing ballooning debt, and here about how Britain over the last decade ramped up debt while properly-run countries vastly reduced it. This is big, serious and a problem: the consequences will be with us for years.

    Before too long, I suspect the Treasury will be saying how these fiscal rules are elastic, and how Brown never pledged they were set in stone. So here is a quote of Brown from Newsnight five years ago.

    “I can give you a guarantee that is our fiscal rules, that we must uphold. And that is the basis of... and that discipline is the basis on which I think people have seen this Government as competent.” (complete bolleaux)

    Quite so, and breaking these rules will strike people as a demonstration of incompetence. Or the most appalling short termism. The Irish government decided a few weeks ago that it would tighten its spending this year, because tax receipts were falling. Is this idea so hard for Gordon Brown to grasp? The entire country is cutting back its spending, why can't government?
    Brown, however, is on a mission to raise state spending - and, right now, it looks likely to be a Tory government that pays tomorrow for the money he borrows today. It is impossible to understand Gordon Brown without understanding his approach to debt. It is his weapon of choice, and if he loses the next election he can right now start turning that weapon on the Tories. So he will have to feast on humble pie, and his own words, as he tears up his rules and lets debt soar above 40%. Yes, he may lose the election. But he has realised one upside to this inevitability: he can start spending David Cameron's budget now.
  12. what brown needs is a good war!

    of dear he already has one and he's screwed that one up as well
  13. 24 billion isn't even the tip of the iceberg. It's about a third of what the government will have to cough up if Northern Rock goes belly up. If you factor in all the Enron stylee, off balance sheet, PFI shenanigans and include unfunded civil service pensions I've heard the total is well over a trillion quid!

    The biggest single problem is welfare spending. With a third of households getting most of their income from benefits, we spend more on welfare than on health abd education combined. So much for the 'schools and hospitals' reflex that Labour MPs have developed when questioned about tax.

    Dave will need to stamp on welfare abuse/dependency wery hard indeed. It won't be pretty. There will be riots. Our own dear Sven will be manhandling barricades in Westminster and fighting running battles with the police because he's too badly disabled to work.
  14. Ord_Sgt

    Ord_Sgt RIP

    Don't forget that just the 3 months to June, it doesn't include the money borrowed over the last 11 years.

    The bill is HUGE and growing. This is going to hurt, a lot, when it all has to be paid back.

    Another IMF loan to bail out the 'sick man of Europe' when this bunch of chancers leave office for another generation?

    Do the electorate never learn?! Labour, tax and spend, beyond our means, every fcuking time!!!!!!
  15. Exactly there is no North sea oil dividend, no selling off of; telephone, power, water or railways, etc. Regardless of if you think thought it is was right or wrong it raised the government money to help bring the country out of the defecit labour had left it in.

    There was some heavy industry still working and while this has now either died a death or been brought out by overseas investors, thus it is not at the level that will help to regenerate the job market.

    The mass release of social housing stock whilst a good idea in many ways was realy a major move to spur investment in the banking and insurance sectors. While this did help with both reducing the balance of payments and move some new investment into the city, it is a double edged sword.

    Privatisation and contracting out is pretty much a done deal short of finaly privatising the HMF and the Police...Im sure Serco will step up since they have done such a good job of... :roll:

    The credit crunch isnt just debt it is debt that has been speculated on and or resold. there lies the rub an economy built on speculation is invariable doomed at some stage or another?

    Answers! Humm! Not many other than a bloody good cull of humanity would not be such a bad thing!