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Uk's "unavoidable" Austerity Budget Takes On Public Sector Unions

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I generally respect Mish's musings but he does seem to have some sort of 'thing' against Unions. He seems to think that they are the root of all evil.

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http://globaleconomicanalysis.blogspot.com/2010/06/uks-unavoidable-austerity-budget-takes.html

'Heading into G-20, Europe sent president Obama an unmistakable message that budget deficits are more important than stimulus.

'UK Public Sector Unions Face Severe Cuts

Setting the scene for years of potential strife with the powerful public-sector unions and their allies in the Labour Party, Britain’s new coalition government on Tuesday unveiled the most severe package of spending cuts and tax increases since the early days of Margaret Thatcher’s era.

The cuts and tax increases, including average budget reductions of 25 percent for almost all government departments over the next five years, will make Britain a leader among European countries, including Ireland, Greece and Spain, competing to show they can slash spending and appease investors worried about surging debt. But the sharp reductions defy conventional economic wisdom, which holds that governments should increase spending to stimulate growth when the private sector is weak.

The steps outlined to the House of Commons by George Osborne, the chancellor of the Exchequer, would cut the annual government deficit by nearly $180 billion over the next five years, shrinking Britain’s public sector and instituting tough reductions in public housing benefits, disability allowances and other previously sacrosanct aspects of the country’s $285 billion welfare budget.

Only health and international aid spending would be protected from the 25 percent cuts for government departments by 2015, the steepest fiscal spending reductions since the 1930s. Mr. Osborne also announced a two-year wage freeze for all but the lowest paid among Britain’s six million public servants and a three-year freeze on benefits paid to parents for rearing children, in addition to new medical screening for people claiming disability benefits, part of a bid to cut $16 billion from the annual welfare budget.

Last week, President Obama wrote to the leaders of the so-called Group of 20 nations, including Britain and other major economies, saying that while “credible plans” to cut national deficits were important, cutting them too quickly could lead to “renewed hardships and recession.” The letter was seized upon by the Cameron government’s opponents in Britain, who cited it on Tuesday in condemning the Osborne budget.

“It’s back to the economics of the 1930s,” Ed Balls, a left-wing Labour figure who is one of five candidates running to succeed the former prime minister, Gordon Brown, as Labour leader, said in a BBC interview. Over the longer term, the main significance of the budget may be judged to be the signal it gave that the Cameron government is prepared to wage a political war to reduce the size of the public sector in Britain, which expanded rapidly under Labour. During that time, more than one million jobs were added to the public payroll, and the public sector accounted for roughly half of the economy.

Mr. Osborne made no secret of the government’s intentions. “A genuine and long-lasting economic recovery must have its foundations in the private sector,” he said. “That is where the jobs will come from.” '

While I disagree with raising taxes, it is crystal clear Osborne has his head on straight as to what will drive a sustainable recovery. It is equally clear that Ed Balls is a Keynesian clown of the same mold as Krugman and Obama.

The last thing the UK and US needs is a bunch of political hacks beholden to public unions. Freezing wages is only a start. Slashing benefits is what desperately needs to happen.' '

it's funny though,some bits of the public sector are more equal than others.Quite why the behemoth NHS is free from austerity I don't know.And whilst it's a start,I think most of our political class are in the dark about how bad this is gonna be.

Hmmm, so let me get this straight, you want to pay more taxes and get less service from the NHS should you need it to keep the bankers happy for the mess they created? Sounds like a great plan!

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Uk's "unavoidable" Austerity Budget Takes On Public Sector Unions

And they will lose ( The Unions ) this coalition will adopt the Thatcher policy, so goodbye to these irritant remaining Unions ( The Government`s opinion IMHO ).

Their Members know their jobs are at risk and will do nothing but sit back in a passive mood hoping they will not be a target.

What`s the betting Bob Crow is top of their list. ;)

The right wingers in the Tory Party require their pint of blood.

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And they will lose ( The Unions ) this coalition will adopt the Thatcher policy, so goodbye to these irritant remaining Unions ( The Government`s opinion IMHO ).

Their Members know their jobs are at risk and will do nothing but sit back in a passive mood hoping they will not be a target.

What`s the betting Bob Crow is top of their list. ;)

The right wingers in the Tory Party require their pint of blood.

They'll be allowed to win.

Banks need plenty of printy printy still - the unions can cop for the blame just like last time.

Edited by Injin

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  • 152 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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