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RichM

Our Economy Is Sh!t

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Not surprising when we're pricing ourselves out of being competitive to produce anything and putting all the dosh into unproductive housing assets. Plus the problems with the public sector tax abusers as mentioned in article.

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This information is truly frightening.

How on earth is this situation going to be improved?

Investment usually helps improve productivity. The Private Sector seems reluctant to invest so not much going to improve there.

The Public Sector has had the investment yet it would seem can't translate that into improved productivity.

More despair.

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The City has struggled to explain a continuing puzzle over the persistent weakness of investment, despite good rates of return and despite low interest rates and rising equity markets making for cheap costs of capital.

Like, duh, dudes, you may not have noticed but there's a whole world outside London, and no sane company is going to invest in such an expensive country when interest reates are rising everywhere but the UK and we're heading towards a global recession.

Geez, if those City analysts on hundreds of thousands a year are struggling to explain something so simple, do you think we can have their jobs instead?

The Public Sector has had the investment yet it would seem can't translate that into improved productivity.

Thank God for that: the last thing the remaining British industry needs is an _efficient_ government imposing stupid restrictions and high taxes on them.

Edited by MarkG

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Thank God for that: the last thing the remaining British industry needs is an _efficient_ government imposing stupid restrictions and high taxes on them.

I didn't fully expand my point sorry.

I suspect that the inefficiencies of the Public Sector might lead to more taxes to pay for more regulations as the current Government's centrist view seems to be that they can, by writ and regulation, "improve" matters.

Micromanagement is the jargon word I believe.

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The reason the economy is so bad is that the Conservatives screwed it up. New Labour have been working long and hard to try to recover it, but its not an easy job.

Anyone want a puff of what Tony Blair and his cabinet have been smoking for the past 20 years ?.

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The reason the economy is so bad is that the Conservatives screwed it up. New Labour have been working long and hard to try to recover it, but its not an easy job.

Anyone want a puff of what Tony Blair and his cabinet have been smoking for the past 20 years ?.

Bullsh*t. The economy was recovering in 1996. Labour inherited a healing economy - thats all and thats fact!!

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Bullsh*t. The economy was recovering in 1996. Labour inherited a healing economy - thats all and thats fact!!

Exactly. They just wanted to keep the cycle going so they made money cheap; trouble is they didn't achieve the increases in productivity so we got the mirage and not the miracle.

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Bullsh*t. The economy was recovering in 1996. Labour inherited a healing economy - thats all and thats fact!!

I think you might have missed the sarcasm there. :unsure:

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Me too. :D

Perhaps we should have some sort of sarcasm indicator for the hard of reading?

i know it is friday and were all tired but surely no one expects anything positive to be said on here about nu labour.

by default anything that looks positive must be sarcastic-or a mis- print.

( oh and i am not a nulabour apologist)

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The reason the economy is so bad is that the Conservatives screwed it up. New Labour have been working long and hard to try to recover it, but its not an easy job.

I'm no friend to the Tories, but that's rubbish. The Tories unwittingly got things going by devaluing the pound after Black Wednesday. Labour inherited a growing economy with manufacturing output expanding, and by sticking to Tory spending plans in the following two years built up a bigger surplus which Brown then proceeded to spend. To be fair, if Brown hadn't spent the money we/you would all have been complaining that public services were no better. Brown's hostage to fortune was that when the surplus became a deficit he carried on spending anyway. He could have cut taxes to keep the economy going, but instead forced a policy of cheap money on the BoE which led to a housing bubble and massive consumer borrowing.

These are the facts, my friends.

The interesting bit is now coming however. Government spending is tailing off, so will the economy falter? Or will a resurgent Eurozone boost our exports? Will the BoE have room to cut rates if the economy slides, or will rising dollar rates threaten the value of sterling? If the BoE does cut rates will consumers borrow and spend more? Or will they sit on their hands and hope the recession costs someone else's job and not theirs ...

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i know it is friday and were all tired but surely no one expects anything positive to be said on here about nu labour.

by default anything that looks positive must be sarcastic-or a mis- print.

( oh and i am not a nulabour apologist)

LOL. With reference to "I know it's friday and we are all tired" you are a born manager of people Don.

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I'm no friend to the Tories, but that's rubbish. (snip)

You see, laurejon has cleverly gotten other people to do his posting for him already... :lol:

by devaluing the pound after Black Wednesday.

You make it sound so deliberate! The Pound would probably have been there anyway had we not been propping its value up with artificial means. Still, at the time I was more interested in whether Todd and Cody were going to get back together on Neighbours, and choosing which Sixth form college I was going to go to. Preferably the one with the most "free periods." :lol:

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The scary thing is that it seems as though Gordy has just resorted to thinking on his feet. Is there really any long-term strategy behind all this or has he just completely fuc%ed up ??

I get the feeling it's the latter but maybe we all just "have the world the wrong way round" (Copyright A.Blair, 2006).

Macro-management......my **** !

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After temping in public sector organisations on and off over the last two-and-a-bit years I'd say a lot of this is bl**dy awful target-driven micro-management from the top down. Want to destroy morale and reduce productivity? Set managers targets, change them regularly, sit back and watch them do whatever it takes to implement them.

I once sat through a meeting in which a senior FE manager proposed serious discussion of how we could get 12 17 yr old apprentices signed up for a management course, as there was money available - but they had to be under 18. Where do you find 17 yr olds in management positions? Well, redescribe their jobs so there is some "supervisory" element and there you go! Easy innit. Even easier if you rewrite the rules so that some of the college's own employees (secretarial/admin) can be reclassified, and maybe get some in from other colleges (I'm not kidding).

I sat there and watched this utter b*ll*cks spouting from this manager's mouth wondering if I'd slipped through a space-time rift into a parallel universe...surreal or what. But the truth is he was simply trying to find ways, under pressure from his manager, to implement policy that ultimately derived from some d*ckhead NuLabour politician.

Looking back I can't believe I voted for this set of f*ckwits in 1997.

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So we are in favour of increasing productivity in the public sector, but we are against targets?

The whole point of the target culture in the public sector is to measure and increase productivity.

Clearly it is not working, but I've yet to hear any better suggestions.

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Clearly it is not working, but I've yet to hear any better suggestions.

Eliminate them. Privatise everything other than those few things that government absolutely has to do.

'Targets' in government employment don't work, because they're set by the managers, not by the people who pay their wages. They work in the private sector, because if the targets are bad or aren't met, then the company goes bust.

This is precisely why pretty much everything that government touches turns to crap: unlike private companies, they have no incentive to do things the way that we want them done, and lots of incentives to do the opposite.

Edited by MarkG

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We are against having a public sector, and are in favour of having a private sector instead. So that anything that doesn't work dies naturally. Targets become irrelevant.

Edit: Mark beat me to it!

Edited by megaflop

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So we are in favour of increasing productivity in the public sector, but we are against targets?

The whole point of the target culture in the public sector is to measure and increase productivity.

Clearly it is not working, but I've yet to hear any better suggestions.

I think the problem is that the centre has tried to define in too great detail.

It is easy as a "Quality Controller" to make oneself indipensable and to produce even more levels of analysis. That costs.

The truth is that Private or Public you somehow have to get all those involved to be their own "Quality Controller". Not easy but I'm not convinced current methods are working.

If I'm making motor cars I might hope that my employees would realise that if our products can't compete in the marketplace their jobs are at risk and that this would provide the incentives for all involved to perform well.

In the Public Sector that pressure is, I think, not so obvious.

The danger is that targets can become aims in themselves in the sense that, whilst on paper targets are met, the true outcomes aimed for are not. Or, as is often claimed, measures are altered to meet targets. For example, look at how when GCSE results are claimed to be improving there are many who say the standards have been lowered.

It might be that cultural attitudes are at work here too, in that this country has traditionally been "top down" in terms of management and the idea of "flatter" organisations hasn't really fully taken root enough yet.

I am one who thinks that local elections for many of the relevant Public Sector jobs such as Chief Constables, Heads of Childrens' Services, Chairs of NHS Trusts etc, along the USA model might give some improvement.

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Twin set of data cast gloom on Britain's economy

Our productivity is pants. That is a hardcore sign of a naff economy. Our productivity trails the rest of the G7. What a mess.

History shows our productivity has ALWAYS been poor because we are crap at managing/manufacturing.

Also our education levels are poor wrt to the US in terms of people who went for higher education.

Exactly. They just wanted to keep the cycle going so they made money cheap; trouble is they didn't achieve the increases in productivity so we got the mirage and not the miracle.

Not so. Things are improving. Productivity is improving mostly due to the IT industry. Productivity per worker per hour in the UK has been increasing since 1990 by about 1.5 to 1.9% per year.

The key to further improvements is in education. Improve education and get rid of some of the 'useless' degrees and concentrate on the ones that will give a good career.

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History shows our productivity has ALWAYS been poor because we are crap at managing/manufacturing.

Also our education levels are poor wrt to the US in terms of people who went for higher education.

Not so. Things are improving. Productivity is improving mostly due to the IT industry. Productivity per worker per hour in the UK has been increasing since 1990 by about 1.5 to 1.9% per year.

The key to further improvements is in education. Improve education and get rid of some of the 'useless' degrees and concentrate on the ones that will give a good career.

That's no where near enough growth in productivity considering the increase in the money supply. The money has been sucked into the wrong assets.

The productivity gap (how productive we aren't in relation to our competitors) is growing.

What's the point of growing at 2% a year if everybody else is growing at 4%.

The key to further improvements is less regulation, a better business framework. Tax breaks to get money flowing to the right parts of the economy. Less government.

P.S. I hope that Paddle's is not just another sarcastic post that I'm falling for again?

Edited by bandylegs

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The scary thing is that it seems as though Gordy has just resorted to thinking on his feet. Is there really any long-term strategy behind all this or has he just completely fuc%ed up ??

Big government rules

Fraser Nelson

The secret to everlasting left-wing government was discovered in Sweden decades ago. First raise tax and employ as much of the electorate as possible. Next, offer generous welfare and bribe the middle classes with childcare. Soon, a critical mass of voters becomes part of the government project, and votes for its expansion. Higher private sector earners may squeal at the tax rates, but are easily outnumbered. Eventually the right-wing opposition grows tired of losing elections, and starts pledging to outspend the government, if elected. Then victory is complete.

The architects of New Labour used to dream about such an outcome. ‘There will never be a common morality of the citizenship until a majority of the population benefit from the welfare state,’ wrote Anthony Giddens in his book The Third Way. So it must be enormously satisfying for the Prime Minister, after years of expanding welfare and the public sector workforce, that he has achieved this goal. His army of state beneficiaries now has four divisions: state employees (15 per cent of the electorate), the out-of-work and on welfare (11 per cent), benefit-dependent pensioners (18 per cent) and pensioners with independent means (8 per cent). Add these all together, and it turns out that more than half of the electorate are today, in one way or another, in the pay of the government. And this is before counting untraceable tax credits or subsidy-dependent farmers.

New Labour has, then, entered its psephological promised land — where no party can win power on a platform of radical cutbacks in government. Worse, it has dragged the Tories with it. Rolling back the state, once the leitmotif of Conservatism, has become the mission that dare not speak its name.

Tony Blair and Gordon Brown are not modest men, so it must pain both to have to hide the scale of their accomplishment beneath decoy statistics. No post-Soviet country takes pride in buying up so much of the electorate, so the real figure is hidden beneath far more modest assessments. The official count of 5.8 million state workers leaves out the likes of university staff, GPs and anyone who is subcontracted to work for the government. Include them, and the true figure is 6.8 million people — a staggering 784,000 more than there were in 1997. Today, one in four employed people in Britain works for the government.

Unemployment, too, is massaged down. At 5.1 per cent of the workforce — 870,000 people — Britain’s official claimant count is about half French and German levels. But this is just a tiny part of a far larger story. Among those not included in the unemployment figures are the 2.7 million who have been put on incapacity benefit — which pays out for life, once a doctor is willing to sign the requisite form. Ministers privately believe two thirds can work, but they have have no stomach for the upheavals involved in forcing them off benefits.

The story of state dependence does not end here. Some 790,000 are on lone parent benefit, and once other schemes like the carers’ allowance are included, the total figure is 4.51 million out of work and on benefits. But unlike in the 1980s, when the unemployed were bitter because they wanted to work and suffered without salaries, millions now choose benefit dependency as a lifestyle. And it is not irrational: with the right combination of other allowances, incapacity benefit can pay up to £278 a week — against the £176 a week guaranteed by the minimum wage. And this is before the free cars which are often thrown into the deal. Little wonder that some 2.5 million have been on welfare for five years or more and are, statistically, more likely to die than find another job. They are a permanent part of the British electoral landscape.

Politically, they are a powerful block which forms the backbone of Labour support. Of the 200 most welfare-dependent constituencies in Britain, just seven are represented by Conservatives. Figures provided to The Spectator show, for the first time, the political dynamics of this voting block. Most of the new public-sector workforce has bypassed London and the south of England. But in great cities like Glasgow, Liverpool and Newcastle, one third of all adults are on benefits and one third of the workforce is employed in the public sector.

In places like Cynon Valley, half an hour north of Cardiff, the Communist Party of Britain is not only alive but opening new branches. It needn’t bother: capitalism has been virtually squeezed out already. Unemployment is no greater than average, but almost 43 per cent are on welfare and 35 per cent of workers are paid by the government. It is against such a background that Conservatives are trying and failing to win back Wales and Scotland — in both, state spending is higher than in any country in the developed world save for Sweden and France.

The price for high subsidy and a growing public-sector workforce is miserly economic growth. In Glasgow, companies complain that they can’t attract young graduates because so many of them are being lured into the public sector by the salaries: £36,000 to advise the devolved government on train timetables, for instance.

Throughout all this, pensioners have been a force for resistance: poor and rich, they still tend to vote Tory. They are highly likely to turn up on polling day and pack a powerful political punch. The Department for Work and Pensions calculates that more than two thirds are now dependent on benefits for half their income. Today, no Brown budget is complete without a bung to pensioners at the end, even if it is a desultory ‘winter fuel’ payment. So the battle for their votes increasingly comes down to old-fashioned bribery. At the last election, the Conservatives promised to restore the link between the state pension and earnings — thereby attacking Labour from the left and offering even more money.

Outspending Labour was, in fact, Michael Howard’s strategy for the entire 2005 election campaign. The Conservative leader did speak about lowering taxes, but without much passion: his opinion polls told him it was not a priority. The Tory economic manifesto involved raising the tax burden and outspending Labour every year. It ended up being a truly Scandinavian election, with each political party proposing to spend more and tax more, at a time when Britain’s global competitors were doing exactly the reverse.

The architect of the ideological surrender is Oliver Letwin, the former shadow chancellor, who is now in charge of the 18-month policy review ordered by David Cameron. He is the son of two brilliant Conservative academics, Shirley and Bill Letwin, but his formative experience came during the election before last, when he suggested a Tory government might shave £20 billion from the £440 billion of government spending. Labour brilliantly, if mendaciously, translated this into threats of spending cuts in every constituency and Letwin was sent into hiding. He came out a chastened and changed man.

Cameron’s present policy, drafted by the repentant Letwin, is that the Conservatives will ‘share the proceeds of growth’ between tax cuts and public spending — which, on close inspection, involves proposing no meaningful tax cuts at all. His view of the electoral landscape is similar to Blair’s. ‘I don’t suppose anyone gets up in the morning thinking, “I wish the state were smaller”,’ he declared during his leadership election — and, with those words, cemented the big-government consensus which Letwin shaped at the last election. Cameron has adopted Labour language, referring to health spending as ‘investment’ — in other words, a good thing of which there should be more. Like Brown, he plans only to moderate the growth of spending. Any talk of cutting spending has been banned, by high command.

George Osborne’s plans to examine the case for a flat tax are another casualty of the ban. The shadow chancellor proposed this idea last summer, and has been retreating from it ever since. The word has gone out from the Cameron team to close down public discussion. ‘My wings have been clipped,’ said one former Tory Cabinet member this week. ‘I have been told not to raise the subject of flat tax, or tax cuts, now.’

A martyr to this cause is Howard Flight, who was sacked as an MP for telling a private audience that a Tory government might actually be bolder than its manifesto and cut spending. He admits the need to win votes in the huge public sector has had an effect. ‘For the last seven years the party has been inhibited about having an open debate both internally and externally,’ he says. ‘People are frightened of losing votes: we only have to say we’ll cut waste, and they say we’ll cut spending.’ But he says, ‘It’s easy for Labour to spread false propaganda, so perhaps the best thing for us to do is shut up about it.’

The crusade for smaller government has moved out of the House of Commons and into the nearby office of the TaxPayers’ Alliance campaign group of small-government Conservatives. ‘We were set up because the Tories had stopped making the case for lower taxes and started buying into Labour’s arguments,’ says Matthew Elliott, its chief executive. He predicts that Cameron will bury tax cuts even further down the agenda as he starts to pitch for public-sector votes.

Here, Cameron has grounds for optimism. Unpublished data from YouGov shows that 35 per cent of public-service workers lean towards the Cameron Conservatives — by no means hopelessly behind the 41 per cent who would vote Labour. The two groups are strikingly similar on all other issues, with one exception: government workers are much more relaxed about their personal finances. Little wonder: under Labour, they are now paid more and work less. Cameron is unlikely to threaten this. In this way, Britain moves steadily towards the failed eurozone model, with a tax burden now even greater than that of Germany, and no political party is blowing the whistle.

In Sweden the Conservatives have already had their Cameron revolution. Two years ago a charismatic 39-year-old named Fredrik Reinfeldt took the helm of the opposition party and changed the agenda: going cold on vouchers for schools, moving the emphasis away from tax cuts and talking about the environment instead. Much as this dismayed people like Fredrik Erixon, an economist at the Timbro free-market think-tank in Stockholm, he sees this as a compromise that both British and Swedish conservatives will have to make.

‘With so many taking their income from the government, it is basically impossible for a party to be elected proposing drastic cuts in public spending,’ said Erixon. ‘So even if Sweden has a change in government at the next election, the policies will not change — it will just be new faces. The Social Democrats have won the ultimate battle of politics: they have redefined the political debate.’

Blair will leave politics with the same accomplishment. Thatcher declared that New Labour was her greatest legacy and the Prime Minister can step down knowing his victory has been just as profound: to have Cameron abandon the quest for small government and join him in pushing forward the frontiers of the state.

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  • 301 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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