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Independent: One Million Public Sector Jobs To Go

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http://www.independent.co.uk/news/uk/politics/now-its-osbornes-turn-to-join-europes-axemen-1994089.html

Now it's Osborne's turn to join Europe's axemen

'Star chamber' to oversee cuts of £60bn a year and a cull of up to 1 million public-sector jobs are planned. Sean O'Grady reports

Tuesday, 8 June 2010

"Unavoidable", "painful" and "inevitable": the public spending cuts planned by the Government will "affect our whole way of life", David Cameron declared yesterday, as Britain prepares to join the wave of austerity sweeping across Europe.

Governments from Madrid to Dublin to Berlin have announced draconian measures to rein in their yawning budget deficits and defuse the eurozone financial crisis, and the Chancellor will step up the pace of the coalition's assault on public spending today by detailing how the comprehensive spending review this autumn will deliver the most radical spending cuts since the Thatcher years.

The Chancellor, George Osborne, and the Liberal Democrat Chief Secretary to the Treasury, Danny Alexander, are expected to outline plans for a Cabinet "star chamber" that will oversee cuts of perhaps £60bn a year, almost one-tenth of current public spending plans.

Modelled on the Canadian experience in the 1990s, a process of consultation with the public and public-sector workers will also be launched. Such a "conversation" about how to re-prioritise public spending "fairly" was a key theme in the Liberal Democrat election campaign, and reiterated by Nick Clegg at the weekend.

Despite the attempt to carry public opinion with them, the scale of the challenge that ministers face means job losses are inevitable for at least 30,000 public-sector workers this year as a result of the £6.2bn in immediate cuts already announced. If they do follow the Canadian example, a reduction in the public-sector headcount of perhaps 1 million will be implemented over the planned five-year life of the Cameron-Clegg administration.

Although designed to impress the markets and preserve the UK's AAA credit rating, the Government's strategy carries its own risks – a severe knock to confidence at a delicate moment in the recovery, with the financial crisis in Europe threatening to disrupt plans even further, especially if the banks need more state aid. Simultaneous deflation across Europe and the wider world – entirely unco-ordinated by the EU or the G20 – also threatens to plunge the world into a double-dip recession.

Even with spending cuts on the scale envisaged, tax hikes seem unavoidable: many experts believe Mr Osborne's emergency Budget on 22 June will see a rise in VAT to 20 per cent, as well as rises in capital gains tax and reforms to tax credits.

What has been called a "cult of austerity" is now seeing millions of public-sector workers being sacked by governments from Madrid to Budapest. Prestige projects are being canned: a new airport for Lisbon is one casualty, the restoration of a Prussian palace in Berlin another. Some countries, such as Greece and France, are forcing state employees to postpone their retirements. VAT is up almost everywhere. Where they are able to keep their jobs, public-sector workers have been asked to take pay cuts of anything up to a fifth, with welfare payments to the middle classes and spending on transport and infrastructure also favourites for the axe.

Germany announced more swingeing cuts yesterday to "set an example" for heavily indebted eurozone states such as Greece, Spain and Portugal. Chancellor Angela Merkel will save €80bn by 2014 by reducing family tax credits, cutting 15,000 government jobs and delaying construction projects. There is also speculation that Berlin will raise VAT on food from 7 per cent to 19 per cent and abolish military conscription.

Such a scale of cuts is likely to be more than mirrored in Britain, which has a deficit more than twice as large as Germany's in relation to national income.

Mr Cameron stressed that unless further action is taken, the cost of servicing a national debt projected to hit £1.4 trillion could balloon to £70bn a year, or more than the schools budget. At £156bn last year, annual borrowing was due to be halved by 2014 under the Labour government's plans, now regarded as inadequate by the coalition.

Mr Cameron said that the cuts he will make will "affect every citizen" and the aftermath will "last for years". The £60bn of annual cuts that will probably be announced equate to about half the NHS budget, or defence and police spending combined.

Given that the NHS, overseas aid and defence have been "protected" by the Government, the most severe cuts are likely to hit areas such as transport and housing. The Business Secretary, Vince Cable, has warned of cuts to infrastructure that might jeopardise long-term growth.

The shadow Chancellor, Alistair Darling, rejected the Government's claims yesterday, saying: "Yes we have got to get our deficit down... but we have also got to make sure that we get growth in place, not just in here but in Europe, because if you don't get growth you will not get your borrowing, you will not get your debt down, and there is absolutely no sign that this Government grasps that."

How Canada did it

*There are two lessons from the Canadian experience – what they did, and how they did it.

The "what" was a budget deficit that had peaked at 9 per cent and was destabilising the Canadian economy. The Liberal government of Jean Chrétien was elected in 1993 and eliminated the deficit entirely in just three years. By 1999 the Canadian national debt had been slashed from almost 70 per cent of national income to below 30 per cent.

The Canadians showed that it could be done. They were helped by global growth – a sharp contrast with now – and a free trade agreement with the US, but the achievement was historic.

The "how" was by rejecting "across the board" panic cuts and planning their "programme review" meticulously. Crucially, the strategy sought to involve the public and public sector workers in decisions: An official report called it a "societal project".

There were no ringfenced areas: welfare, defence, transport and agriculture came off worst. Early retirement helped cut a fifth of the public workforce – a million jobs in UK terms. The approach was less "what to cut" and more "what to preserve". David Cameron will note that Mr Chrétien was re-elected in 1997.

House prices only ever go up.

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Order of importance in reverse order:

4.Jobs

3.Controlling Inflation

2.HousePrices

1.Monetry System (debt based faith) "the matrix".

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I just hope they get rid of the useless ones rather than the productive ones. Voluntary redundancies seem to do the opposite, only the capable or nearly retired leave.

Anyway, good news that a house price prop has been kicked away, we just need mortgage support to be reduced for the edifice to crumble.

If a public cut of a million is actually carried out (and I have my doubts), I would expect another million private sector jobs being at risk. With disability claimants moving to JSA, official unemployment figues could break 4 million. Throw in a reduction in mortgage support and housing benefit and we should see a halving in house prices.

But based on the disappointments of waiting for this HPC for many years, I wont hold my breath to see a politician implement their words.

Do you think the govt will actually do it?

VMR.

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hope my girlfriend isn't one of them. Then again if it has a good effect on house prices then one income should be quite sufficient.

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No wonder the great entitled are prattling so frantically on here. The brake cord on the gravy train has just been pulled, and they are terrified they might have to get off, blinking into the sunlight of concepts like 'competing in the jobs market' and 'possibly being fired with no-one giving a sh*t about my shrieks for a tribunal'.

Just watch them elbow their former comrades towards the door to stop themselves being first.

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Because they don't have a clue how many public sector jobs will be cut, they keep plucking figures out of the air.

That's outrageous - as if the British press would do something like that :lol:

A million over 5 years will be fine anyway. It's only 200K per year and Alistair Darling assured us the economy would grow by what 2,3% next year. We should comfortably be able to re-employ these people, and all thanks to the recovery that Gordon and Alistair locked in.

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10 points to the first hack who points out that we have not yet had the real recession, that the ‘recovery’ is as much a myth and illusion as the ‘successful’ financial sector and that there will never, ever, ever be a ‘recovery’ that leads to the return on 2007 levels of madness.

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Totally extraordinary - we spend £200m on bailing out the banks and QE and then instead of waiting to see what affect this will have we do the ooposite and make draconian cuts. You couldn't make it up - if this was in a novel I would have dumped it by now, as being to silly for words!

What do people expect the QE to do - suddenly solve everything! Any measure which tries to influenece a national economy will take years to take effect. What do people think it is - a magic wand? And it has to be said the economy IS growing - bit slow but we're coming out of recession. So now we're faced with the prospect of a new inexpereinced chancellor implementing a slash and burn strategy - just as things are staring to improve.

We should take note of this moment - if the Tories implement the cuts as outlined above and the rest of Europe follows suit we will really see a recession the like of which we haven't see in our life times. These cuts are idealogical - the Tories want ro shrink the state back to levels of the 19th century - we'll be back to Victoria times.

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Totally extraordinary - we spend £200m on bailing out the banks and QE and then instead of waiting to see what affect this will have we do the ooposite and make draconian cuts. You couldn't make it up - if this was in a novel I would have dumped it by now, as being to silly for words!

What do people expect the QE to do - suddenly solve everything! Any measure which tries to influenece a national economy will take years to take effect. What do people think it is - a magic wand? And it has to be said the economy IS growing - bit slow but we're coming out of recession. So now we're faced with the prospect of a new inexpereinced chancellor implementing a slash and burn strategy - just as things are staring to improve.

We should take note of this moment - if the Tories implement the cuts as outlined above and the rest of Europe follows suit we will really see a recession the like of which we haven't see in our life times. These cuts are idealogical - the Tories want ro shrink the state back to levels of the 19th century - we'll be back to Victoria times.

alright gordon

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I just hope they get rid of the useless ones rather than the productive ones. Voluntary redundancies seem to do the opposite, only the capable or nearly retired leave.

Anyway, good news that a house price prop has been kicked away, we just need mortgage support to be reduced for the edifice to crumble.

If a public cut of a million is actually carried out (and I have my doubts), I would expect another million private sector jobs being at risk. With disability claimants moving to JSA, official unemployment figues could break 4 million. Throw in a reduction in mortgage support and housing benefit and we should see a halving in house prices.

But based on the disappointments of waiting for this HPC for many years, I wont hold my breath to see a politician implement their words.

Do you think the govt will actually do it?

VMR.

R 4 reports a plan is to take the "top brains" from all the departments and get them to "scrutinise" other departments budgets.

to me, this is adding a further layer of beaurocracy to already bloated Government.

If it was me, Id take that level they wish to "oversee", and cull them first. no payouts or parachutes.

then Id cut all salaries above 25K and half the difference over 25k.. today.

Id ban all bonuses and any tax free perqs.

Id ban any other than cattle class travel.

travel allowances as per the lowliest of the low.

None of the above requires an IOTA of extra oversight. it means real cuts and only the top deadwood to go.

Then, Id go further.....id start having the new lower paid heads looking at the admin of their organisation and start snipping and pruning. starting at the top tiers wroking down....

Buyers departments would have a particular mission...to cut the cost of everything they buy....

the list would go on..

note, I havent touched a single front line service....just the cost to run it.

Oh, and Id have the troops home from all theatres. we can no longer be the World Police.

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Totally extraordinary - we spend £200m on bailing out the banks and QE and then instead of waiting to see what affect this will have we do the ooposite and make draconian cuts. You couldn't make it up - if this was in a novel I would have dumped it by now, as being to silly for words!

What do people expect the QE to do - suddenly solve everything! Any measure which tries to influenece a national economy will take years to take effect. What do people think it is - a magic wand? And it has to be said the economy IS growing - bit slow but we're coming out of recession. So now we're faced with the prospect of a new inexpereinced chancellor implementing a slash and burn strategy - just as things are staring to improve.

We should take note of this moment - if the Tories implement the cuts as outlined above and the rest of Europe follows suit we will really see a recession the like of which we haven't see in our life times. These cuts are idealogical - the Tories want ro shrink the state back to levels of the 19th century - we'll be back to Victoria times.

Err this is the whole point of why it was burning money to attempt a bank bailout in the first place, its not new, people were told this two years ago when it happened, you sound suprised for some reason, its been inevitable due to the debt growth of the last 80 years, its called a depression, its been pointed out it was happening since the financial system finally imploded in 2007 due to the ever expanding and unpayable debt issued, if you were silly enough to assume piling on more debt onto unpayable debt was going stop a depression (default /reset) then thats your short sightedness, anyone with a grasp of financial economics understood that trying to add sovereign state insolvency to complete banking insolvency isnt exactly a solution that avoids the original problem

Edited by Tamara De Lempicka

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850 'Billion' bailing out the banks, not 200 million!

where are your figures, or anyone elses coming from?

much BoE support is secret, and who knows how much benefit the bankers have from weak "haircuts" on their collateral.

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Because they don't have a clue how many public sector jobs will be cut, they keep plucking figures out of the air.

We live in an amazing decimal universe.

All important numbers turn out to be powers of ten.

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Totally extraordinary - we spend £200m on bailing out the banks and QE and then instead of waiting to see what affect this will have we do the ooposite and make draconian cuts. You couldn't make it up - if this was in a novel I would have dumped it by now, as being to silly for words!

What do people expect the QE to do - suddenly solve everything! Any measure which tries to influenece a national economy will take years to take effect. What do people think it is - a magic wand? And it has to be said the economy IS growing - bit slow but we're coming out of recession. So now we're faced with the prospect of a new inexpereinced chancellor implementing a slash and burn strategy - just as things are staring to improve.

We should take note of this moment - if the Tories implement the cuts as outlined above and the rest of Europe follows suit we will really see a recession the like of which we haven't see in our life times. These cuts are idealogical - the Tories want ro shrink the state back to levels of the 19th century - we'll be back to Victoria times.

Yes. Let's continue spending the money we haven't got on the people we don't need. That's a wonderful idea.

Flapjack. Do you actually believe the rubbish you've written? Do you think that sinking the country deeper in debt is helping? What do you mean by "coming out of recession"? The UK is effectively bankrupt and until the deficit is reducing the UK is not coming out of recession.

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So one million public workers on the dole, plus at least another million again from the private sector (as a consequence).

As VMR says, official unemployment will actually hit well over four million. Four million people looking for employment or business opportunities that don’t exist.

The emperor has been exposed as the mad bare ar$ed fool that he his, and everyone will suffer the consequences of his abject stupidity.

Well done Labour. They may not have started this mess, but they’ve contributed more than their fair share in making the pandemonium ten times worse.

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So one million public workers on the dole, plus at least another million again from the private sector (as a consequence).

As VMR says, official unemployment will actually hit well over four million. Four million people looking for employment or business opportunities that don't exist.

The emperor has been exposed as the mad bare ar$ed fool that he his, and everyone will suffer the consequences of his abject stupidity.

Well done Labour. They may not have started this mess, but they've contributed more than their fair share in making the pandemonium ten times worse.

cheaper to pay a non job the going rate...ie JSA, rather than 35K plus perqs.

and cancel his pension too....he'll need it to finance his unemployment.

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cheaper to pay a non job the going rate...ie JSA, rather than 35K plus perqs.

and cancel his pension too....he'll need it to finance his unemployment.

I don't 'earn' £35k, can I be exempt? Hell i'll even work two days less ;)

How about we target the low hanging fruit first? i.e. the 800+ public servants earning in excess of a £100k?

Some even get a nice retirement package, freeing them to fleece some other organisation. Time to build guillotines and knit some scarves.

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Yes. Let's continue spending the money we haven't got on the people we don't need. That's a wonderful idea.

Flapjack. Do you actually believe the rubbish you've written? Do you think that sinking the country deeper in debt is helping? What do you mean by "coming out of recession"? The UK is effectively bankrupt and until the deficit is reducing the UK is not coming out of recession.

Yes I do believe it its called deficeit financing - nearly the whole of the business use it. Do you work in the public sector? Most companies big and small borrow money to expnad their operations - 10- 11% is very conservative (no pun) and would be seen as wholly acceptable by most accountants. There would be a problem with a 50% deficeit I agree but it happens - look at the Man U/ Glazier thread - they have a $1.1 bn debt - 50% of their 'assets'.

What you seem to forget is that the UK govn has a very strong tax base - we are all hooked into the system and for most people tax is hard to avoid. When the economy starts to grow again tax receipts will accelerate rapidly. I think you need to do some more research and perhaps try Economics 101 on wikipedia.

Just a foretaste of whats to come

http://news.bbc.co.uk/1/hi/business/10261567.stm

Hope you keep your job - I can tell you going from £500 per week to £65 is no fun and something i wouldn't wish on anybody!

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Totally extraordinary - we spend £200m on bailing out the banks and QE and then instead of waiting to see what affect this will have we do the ooposite and make draconian cuts. You couldn't make it up - if this was in a novel I would have dumped it by now, as being to silly for words!

What do people expect the QE to do - suddenly solve everything! Any measure which tries to influenece a national economy will take years to take effect. What do people think it is - a magic wand? And it has to be said the economy IS growing - bit slow but we're coming out of recession. So now we're faced with the prospect of a new inexpereinced chancellor implementing a slash and burn strategy - just as things are staring to improve.

We should take note of this moment - if the Tories implement the cuts as outlined above and the rest of Europe follows suit we will really see a recession the like of which we haven't see in our life times. These cuts are idealogical - the Tories want ro shrink the state back to levels of the 19th century - we'll be back to Victoria times.

Um, the rest of Europe are cutting even more - including the Socialist Party in Spain. rolleyes.gif

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  • 259 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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