The new coalition government – in the joint personage of Conservative Chancellor George Osborne and Lib Dem Treasury Chief Secretary David Laws – took its first steps today to begin bringing down the huge national deficit, announcing £6.2 billion public spending cuts for 2010-11.
The BBC has a brief summary of the proposals here:
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• £1.15bn in “discretionary” areas such as consultancy and travel costs
• £95m through savings in IT spending
• £1.7bn will be saved in delaying or stopping government contracts and projects
• Reductions in property costs will save £170m
• More than £120m expected to be found through a freeze in civil service recruitment
• £600m by cutting the cost of quangos
• £520m will be saved through other low-value spending
Some spending areas have been ring-fenced from cuts – for example: the overall budgets for the health, international aid and defence departments; schools’ funding, the Sure Start programme and spending on education for 16-19-year-olds.
Cannily, the coalition is recognising the importance of taking the public with them, and there are crowd-pleasers thrown into the cuts primarily for symbolic reasons rather than because they save that much cash – most obviously, that government ministers will no longer have dedicated ministerial cars and will be expected to walk, use public transport or pooled cars where possible.
Most controversy so far has centred on the abolition of the Child Trust Fund – though as its abolition was part of the Lib Dem manifesto the party can hardly be accused of hiding this cut. For an interesting counterview, though, check out The Guardian’s Zoe Williams’ plea to save the Child Trust Fund here (hat-tip Andrew Sparrow).
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38 Comments
You fail to mention the £1.12bn which has to come from Local Authorities – that is where all the real pain will be felt.
With school funding being sacrosanct the cuts will have to fall on care or community services (or both).
Whilst we have these immediate cuts it will tighten the screww on local services there is also the likeliehood that councils will make up this deficit by increasing council taxes next year.
It is the cuts at local level that will have the greatest impact on us lower paid people and where we will need to be vigilant
The BBC summary missed out this very significant item:
“In addition, £1.165 bn of savings will be made in local government by reducing grants to Local Authorites [sic] to reflect their contribution to the £6.2bn.”
http://www.hm-treasury.gov.uk/d/press_04_10.pdf
The numbers appear to imply a cut of nearly 4% in overall funding for local authorities.
So out of work executive chauffeurs and IT experts will be soon be found busking in the Tube as reluctant Cabinet Secretaries pass by to ‘strap hang’ with asylum seekers from Afghanistan and Vince Cable from Twickenham.
Sounds like a cartoonist’s dream come true.
Glad Child Trust Funds are gone that was nothing more then fairytale economics and the money will be better spend in education at all levels and we should further push for no tuition fee’s (even if it’s just for the first year), that would vastly improve lower/middle income families chances of getting their children the best start. Along with more apprenticeships for Young People.
As for the rest well it all just numbers isn’t it and the prove will be in the eating. From all accounts it seems that these cuts were already in progress as departments tightened there belts in anticipation It wont be till next 18 months that the real nasty cuts have to come.
I heard a Labour spin doctor say how the cuts to child trust funds are `unfortunate`. Unfortunate for whom? The biggest story of the election was the rebellion by the low and middle income workers (particualarly in the private sector) who were locked out of Labour’s `lollipop benefits` system through either being single or earning the average wage. This was bolstered by pensioners with fixed incomes who had seen their interest rates fall to nothing through Labour incompetence.
All these people see the benefits of supporting through taxation schools etc – what they failed to see is why they should subsidise an election bribe that as David Laws said was simply giving money with one hand only to take it away with the other due to future deficits.
It’s time for us to get real – we are doing the right things for the country in the best way possible. Stop being so negative and start doing the only thing possible – give the situation to people as it is and really develop our own narrative that lays the blame where it resides – with Labour.
This is the real harm hidden in the cuts.
http://liberalconspiracy.org/2010/05/24/dont-cut-the-future-jobs-fund/
Whilst I still support the coalition and the party I find this very disappointing and saddening.
Please see:
http://www.nextleft.org/2010/05/child-trust-fund-great-liberal-policy.html
Hang your heads in shame, citizens.
George and Stuart, yes we all expect to see a huge list of hand-wringing articles from the left decrying each item in turn and saying why each is a disaster. This is the dishonesty of the Labour Party. Alistair Darling himself admitted at even if Labour won the election the impending cuts would be “worse than Thatcher”, but now absolved of responsibility Labour are free to condemn each and every measure to get the deficit under control, without – of course – saying how they would have done it instead.
Yes, Stuart, in an ideal world, poor young adults, would receive some form of “community inheritance” to help set them up in life, a very fine Liberal idea. However it just isn’t possible, as Gordon Brown and his chums have blown everything the family owns and we’ve ended up down at “Cheque Converters” signing over the next 40 year’s salary just to keep afloat.
These cuts look hasty and poorly thought through with too much old style smoke and mirrors. Over the next few days I think many of us will worry more and more about what we have signed up to as the detail reveals what cutting means in practice.
We are going to have justify these in our communities.
I also have to say I am worried about the eagernessof some on here to support these cuts. Let’s hear the rationale. Uncritical support is going to damage us locally.
What would you cut instead AlexKN? Or are you one of those who still thinks that we can spend our way out of this problem that we got into by spending too much?
I don’t accept the view that Greece has made a massive change to the situation especially in light of UK borrowing coming in below expectations. It was right that if forced us to look again but does not justify Laws’ change of approach. I believe our manifesto was broadly correct, remains so and a substantial firming up of the last Govt’s 4 year plan would have been the way to go. That would have mean things like retaining the NI increase. The ‘jobs tax’ line is largely political not economic and not supported by data on past rises. Thereafter a programme of cuts matched to the actual level of growth, revenues etc could have been developed over weeks and months not days. What was then cut would be seen to be based on fact not ideology and we take along the public in some difficult decisions.
What I hoped to see was a calmer less shrill approach where tough decisions were made on evidence and not rushed into in a few days outside of Parliament. The unintended consequences of some of today’s proposals may show that Osborne and Laws have acted naively and perhaps rashly. At the moment I see a lot of gestures but not necessarily sound decision making.
Never in a million years would I consider myself an eager coalitionite but it seems to me a logical balance to ringfence Sure Start but cut the Child Trust Fund. The coalition is increasing the number of health visitors operating from Sure Start centres. As a parent of a three year-old I consider the health visitor service to be an absolute lifeline but the Child Trust Fund is a bit of tokenism. My own child’s CTF has lost nearly a quarter of its value in only three years – there must be hundreds of thousands of CTFs that have wasted away in the same fashion.
A freeze in recruitment is not as nice as it might seem.
It can mean a heavy workload on existing staff, particularly if they are in a team where it just happens a number of co-workers have left.
It means anyone whose career is in that area but is current having a career break cannot get back into employment.
It means no new jobs are opened up for school-leavers and new graduates.
So, because no-one is actually thrown out of a job, there is not the trauma of redundancy. But there are a lot of hidden victims.
“I just like the idea of the current government cleaning up the shit left on the floor by a Labour party suffering from diarrohea.”
Arrogant, mindless, damaging twaddle. Sure, Labour tried out a whole range of statist do-gooding initiatives, some of which worked better than others. But if we just go in there with a “four legs good, two legs bad” type of attitude, and scrap everything just for the sake of kicking the Labour party, then we will mess up. Seriously. Necessary savings are one thing, but I didn’t vote for a bunch of Luddites!
David Allen – couldn’t agree more. I and I’m sure many other LibDem members are not against many of Labour’s social initaitives per se. We need to accept the value in some of what they have done right as well as where we were wrong. After all we did wrongly oppose the minimum wage and often appeared to be uninterested in Sure Start. Those sort of things are not my major area of difference with Labour and in my area of the North that would be the view of the majority of our voters. In my constituency we were driven back from a strong position in the last week or so of the campaign with the ‘vote Clegg, get Cameron message’ and from their point of view it has come true. We have begun to leak members to Labour and Greens and this sort of gung ho cutting is going to set us back 10 years or more.
“A lot of money from la-la land”.
Well, there you have a point, though I don’t think most of us knew it at the time. What the bubble did for us was to create an artificial increase in capital “values” such as the price of housing. We then taxed it, converted it into income, and told ourselves we had achieved permanent economic paradise. Labour chose, for example, to spend a lot of the money on the health service. No doubt the Tories would have preferred to give it back as tax cuts and let people buy foreign holidays with it. Vince did identify some of the parallel problems with debt, but I don’t think even he fully foresaw what the bubble would mean.
In hindsight, it’s dead simple. Converting capital value into income and spending it is folly. Especially when you have not genuinely increased your capital, you have only found a way to tell yourself that a £200K house is now worth £300K. It is folly when the debts are called in, and the capital inflationary spiral goes into reverse. Suddenly you have a lot less tax revenue to spend. It was a private sector bust, but it was the public revenues that got busted.
Well, now we are sadder and wiser, and we can’t go on spending the way that Labour did. But it would simply be dishonest to blame Labour too comprehensively for all that has happened. Whether their spending was productive or wasteful, for example, has almost NOTHING to do with the cuts we have to make. We would still have to make cuts even if we thought they were all a crying shame and that Labour had spent money brilliantly well.
Equally, we might in theory have to put a limit to the cuts, even if it meant continuing to fund things we thought were wasteful. The reason is because public spending equals jobs, equals wages, equals consumption of private sector goods, equals jobs in the private sector. Cut too harshly – even if you are only sacking time-wasters and pen-pushers – and you cause recession. Then tax revenues fall, and you find that you haven’t managed to cut that deficit after all!
What I’m crusading against is believing too much of our own propaganda. Look, we hate Labour because of Iraq, detention centres, league tables, and spin, don’t we. isn’t that enough? Because if we just have to wreck everything they ever did, for some crazy psychological reasons of our own, we shall end up the losers.
Thinking further – I fear I know what our problem psychology is all about.
It’s guilt. No matter we can rationalise the deal with the Tories. We don’t, in our bones, feel happy with it.
Some of us are over-compensating by kicking the cat. Or the Labour Party. Harder and more mindlessly than we should be doing.
Not a good response.
AlexKN: “we did wrongly oppose the minimum wage”
Eh, what? You’ve been reading (and believing) too much Labour literature by the sound of it – we certainly didnt oppose Labour’s minimum wage! In fact, a minimum wage become LD policy before it became Labour policy! LD policy was for a regional minimum wage though, which funnily enough the Labour Party now believe in also, as they are now pushing a “London Living Wage”, which is, lo and behold, a regional minimum wage.
“from their point of view it has come true”
But is it actually true or not? By voting Clegg where the Lib Dems could take the seat/keep the seat off the Tories, how did that contribute to the likelihood of Cameron being PM? Had they voted Labour, in LD/Tory marginals, it would have made no difference at all. Just because people think they are right doesn’t mean you can’t tell them they are wrong. Let’s stop idolising the stupid: we saw what that led to in the leaders’ debates.
“we have begun to leak members to Labour and Greens”
Where is the evidence for this? If anyone in the Lib Dems joins Labour, as opposed to being little bitches and saying they’ll never vote Lib Dem again, then you have to wonder why they were in the Lib Dems in the first place. As for the Greens, well – they’re not going to form the next government nor have they any hope in hell of expanding upon their first MP for three elections’ time. So again, you have to wonder what value a member is if they choose to support that lot.
“though I don’t think most of us knew it at the time”
Fair point. But now that we know it was all voodoo economics, let’s not defend it – let’s remedy it.
“Whether their spending was productive or wasteful, for example, has almost NOTHING to do with the cuts we have to make”
They borrowed beyond our means to fund the massive spending splurge. The real kicker, I’ll concede, was the bank bailout. Obviously given the circumstances we didn’t have a choice, but arguably we could’ve avoided being in that situation by not building an economic boom out of thin air. Let’s hope the next lot find another way to structure the economy.
“We don’t, in our bones, feel happy with it.”
To be honest, I feel guilty about feeling good about it. I know I shouldn’t like it, because it will hit someone, but I do. It appeals to my innate sense of balance. We as a nation had it far too good for too long. Then the crisis hit and we had it taken away from us. Now we have to deal with the aftermath. This is why I said “let’s cut the fuck out of wasteful public spending”, or words to that effect – we need a more resilient state, one that we can rely upon in hard times, not one that owes so much that it takes us down with it.
Redistribution of generational wealth is a major part of the problem.
My parents doubt a detached three bedroom house in Surrey in the early 60s – cost £6000. Now valued £450,000.
This was paid for with an endowment mortgage which also paid a huge lump sum on completion.
Father had a management job with index linked pension, firstly in the private sector later in local government.
He was offered and took early retirement, at 56, this was enhanced to 65, protected against inflation rises.
He has been collecting this still growing sum for past 26 years.
I attended a leading grammar school for free and after I left it became Independent and fee paying. £8,000 a year.
I did a paper round every morning from the age of 13 and during the holidays undertook a variety of temporary jobs, including GPO, Garage repairs, Department stores. My parents did not need to give me pocket money.
When I went to university, despite my parents decent income I still received a sizeable grant. Beer was 1/6 a pint.
After university I initially became a teacher but later went to work for a multi national company. The variety of jobs was endless.
Two of my three children are now in their mid 20s and still owe over £30,000 in university loans. That was in addition to the many thousands I put their way and the various bar jobs around campus they scrounged.
They always found it difficult to get holiday jobs because of the prevalence of migrant labour. They have battled through the system and are just about keeping their heads above water. The chances of them owning a house on their current salary are in fantasy land. They have been tested by SATS since they were 7 and been subjected to every innovation that the education system could come up with, and always told it would be to their advantage. it wasn’t.
In retrospect the post war generation ‘never had it so good’, and the Blair generation of schoolchildren never had it so bad. The wealth of the country is tied up with the 60-90 year olds who had everything go their way.
Now we are asking their grand children to pay again, two or three times over.
The fiscal trick of this government will be to free up the capital seemingly locked in with the older generation and give it to the young so they can live their lives in the same way their parents and particularly grandparents achieved.
blanco
I was referring to my own constituency. As I look after membership issues I know what is happening in that respect in my area. Over several years we have recruited several ex Labour people, some are amongst out most active members. We also have some long standing former SDP people and others with more of a social democratic set of beliefs than the current party leadership. Although I come from a more traditional liberal background I recognise what my colleagues have brought to our local organisation even though their starting point was different. We have begun to lose these people and a number of younger people expecting something more radical and less pragmatic. If we talk ‘left’ and then act ‘right’, we will lose members and voters.
It could be different elsewhere although I know enough colleagues around the country to know that similar processes are at work all over even if they are more acute in some areas than others. We need to deliver on the new politics and not today act like every other party has done. It’s disappointing how many seem so complacent.
Keith Browning – spot on.
Grammar schools, house-price capital windfalls, index-linked final salary pensions, University grants, holiday travel at a time when the world was relatively unspoiled, a reasonable rail network, unclogged roads … i could go on.
Truly a fortunate generation.
@AlexKN
I understand the frustration of the Labour-leaning Lib Dem supporter. But it is still wrong to say “we voted Clegg and got Cameron.” In 2005 I could similarly say I voted Kennedy (so to speak) and got Blair, or Kennedy in 2001 or Ashdown in 1997 and got Blair all three times. “I didn’t vote for this!” But lots of people voted Tory, and more voted Tory than Labour, and more voted Labour than Lib Dem. We all vote for a local MP, not for the Prime Minister.
The thing is, I have it on authority that this government will deliver more Lib Dem policies than any government since at least World War II. Why? Because there are Lib Dems in it, for the first time since WWII. I don’t get this thing about the leadership being “right wing”. Economically liberal, yes. But I thought Lib Dems intrinsically knew that the old left-right axis is a bit pants? Maybe we should emphasise that more, I don’t know.
All the main parties promised cuts. The Greens said no cuts whatsoever are needed, and we should instead order a massive increase in public spending on top of the £168 billion we already owe. So to say that the party leadership talked “left” before the election is not true – it talked “liberal” and now it’s acting “liberal”.
@blanco
Thanks! Say that again and keep on saying it, for of course it’s the truth.
Happy to oblige, Paul.
Check out this pic of tomorrow’s Indy front cover:
http://twitpic.com/1qpmkv
So the debt is £893bn. The cuts are £6bn. How the hell did Labour let the debt get so high??? It wasn’t just the bank bailout, which was necessary. Why didn’t they increase taxes to cover all the extra expenditure? Because they feared the voters would punish them? No wonder they took the easy way out, wrecked the chance of a deal with the Lib Dems, because they have made a right old mess and don’t want the responsibility of sorting it out.
@blanco
I do not believe we have been a straightforwardly economically liberal party for many years.We have intertwined economic liberalism and more social democratic economic thinking. One way of looking at the current situation is that the former strand has ‘won’. I know it is not that simple but I do suspect that we are now seeing the party’s identity shift. For some it will be maturing, for others selling out. We will lose some members. I’d guess 15 -30% who do not view themselves as economic liberals or who were simply unprepared for the severity of cuts or the reality of government will drift away. I am also sure we will struggle in some Northern, Scottish and Welsh seats where collectivist community traditions are stronger. I would expect us to lose most of our university seats – the signs of this already present this year. Where we might gain support I am not so certain. We may find we are once more a smaller party or we may find that we evolve into something more akin to the German Free Democrats, nominally a separate party but usually the junior party in a right of centre coalition. I’m not sure either are what we intended!
@AlexKN
I don’t think we’ll lose 15-30% of our support – we have been able to square economic liberalism and social democratic economics for some time now, and in most cases there isn’t a massive difference between the two. Even economic liberals understand the need for essential public services being paid for by the state where there is a natural state monopoly, and social democrats understand that the expansion of the state into every area of public life only leads to the loss of civil liberties and the autonomy of the individual, itself the basis for collectivist models. I agree that we will struggle in the Northern, Scottish and Welsh seats – and we lost Oxford West, the vote went down in Oxford East and Cambridge, and other seats like Durham we didn’t do so well in. I suspect the issue is that a lot of our voters in those areas (not necessarily members) are Labour-lite, but didn’t want to disgrace themselves by voting for a party which trampled on their beliefs, and now they have a convenient excuse to go back to Labour, i.e. because the Lib Dems are working with teh evil Toriez.
It’s worth bearing in mind that the German Free Democrats also prop up the German Social Democrats as well as the Christian Democrats. They are seen as a centre/centre-right party that is fairly promiscuous. Whilst that might seem unpalatable, it means they’ve been in government for most of Germany’s post-1949 history, getting their policies enacted. We either choose to be a subsidiary of the Labour Party (Labour’s “bitch”) or we free ourselves to swing between either party (the “ho”). I think Britain needs a centrist party that can chart a course beyond the fake left-right axis.
The real challenge is to grow our support and seats to a similar level to that of Labour and the Tories – and remember, we got 23% and 57 seats, whereas Labour got just 6% more and 200 more seats! We know the system is broken, and AV might not change that, but let’s get the referendum passed, and start targeting more. We should identify what our vulnerable seats are and where we can take seats off the others. We need to be hitting levels of support of around 30%.
blanco: “How the hell did Labour let the debt get so high???”
You might as well ask “how did Labour keep the debt so much lower than in most other major economies?”
It’s just as valid a question.
Our debt was at perfectly acceptable levels between 1997 and 2007 (in fact by 2002 it was at a record LOW). Then Brown decided on a Keynesian response to the worldwide recession and financial meltdown.
He was scarcely alone in this. Most other major countires did the same. And most of them now have much higher levels of debt than we do.
For instance, if UK debt (as % of GDP) were the same as Germany’s, then today we would be looking at a national debt of well over a TRILLION pounds, rather than the £893bn it actually is. It’s a good job you’re not German, you would be unable to sleep at night!!
UK debt was massively higher in the 1950s and 1960s than it is now, but you know what? We got through it, we got the debt down, and we did it despite massive expansion in the public sector, rather than panic-inspired cuts at the wrong time.
@David Allen :-
“Labour… now seem to be regressing into a narrow working-class party who will blame the immigrant”
I have read quite a few comments along those lines on this site. Not sure where it’s come from – who from Labour has started bashing immigrants? I’m afraid it is the Lib Dems who have signed up to the Tories’ immigrant quota scheme, not Labour. If Labour start courting the anti-immigrant vote, I’ll stop voting Labour immediately.
Paul McKeown :-
“Anyone who thinks that Labour or any other cuddly party would or could do anything else is gullible or wilfully in denial. Anyone from Labour who says they wouldn’t make cuts of the same magnitude or greater is simply a liar, a utopian fool or uninformed.”
That’s a breathtaking misrepresentation of the entire debate, which as you well know is all about the TIMING of cuts, not the necessity of making them. Labour have been consistent in their argument about delaying cuts until growth is well established. If that makes them “liars” or “fools” then so were the entire Lib Dem party during the election campaign.
Were you in favour of Osborne’s plan before the election? If not, at what specific point were you converted?
@blanco: “I don’t get this thing about the leadership being “right wing”. Economically liberal, yes. But I thought Lib Dems intrinsically knew that the old left-right axis is a bit pants? Maybe we should emphasise that more, I don’t know.”
Equidistance is perhaps something that needs emphasising again a bit more
Stuart Mitchell:
Please don’t lecture anyone on issues of truthfulness as a supporter of a party whose leader lied to Parliament in order to join an illegal war against a sovereign nation.
Will it be honest for Labour to oppose all of the Tory government’s cuts, when Labour would have to make substantial cuts itself were it in office?
Labour, as a collectivity, has never appealed overtly to xenophbia (as far as I can recall), though some would say that the anti-Europeanism of the 1970s sometimes vered in that direction.
@sesenco: That comment was uncalled for. I’ve spent the past seven years condemning Blair over the war, as have many others on the left. My conscience is clear on that score.
By the way, I am alarmed by your reference to our “Tory government” – do you know something the rest of us don’t??
@Stuart Mitchell
All this talk of “timing” was just an attempt to nuance the same story across all three parties. Frankly it gave me toothache in the a*se. Couldn’t care less, never could. Get on with it. Just like Alistair Darling clearly wanted to, as well, if it weren’t for all the forces of hell.
@ blanco, 24th May 2010 at 8:24 pm
“We as a nation had it far too good for too long. Then the crisis hit and we had it taken away from us. Now we have to deal with the aftermath.”
Unfortunately it isn’t “we as a nation” who’ll be suffering hardest, it’ll be those who got least out of the good times while the more fortunate took the money & ran. LibDems need to ensure that those at the bottom aren’t plunged further into poverty and exclusion if there’s to still be a “we as a nation” (or a thriving party) at the end of this.
@ blanco, 24th May 2010 at 9:39 pm
“I don’t get this thing about the leadership being “right wing”. Economically liberal, yes. But I thought Lib Dems intrinsically knew that the old left-right axis is a bit pants? Maybe we should emphasise that more, I don’t know.”
Well there’s lots wrong with a left-right axis where the “left”‘s government goes around invading countries for no good reason and subjecting its own citizenry to bizarre “security” controls. But that doesn’t invalidate the notion of left/right per se: the dichotomy between granting freedoms that may exacerbate inequality vs. widening opportunity to enjoy shared freedom still distinguishes the two sides, and it’s alive & kicking at the heart of liberalism too.
Sesenco, 25th May 2010 at 1:08 pm
“Labour, as a collectivity, has never appealed overtly to xenophbia (as far as I can recall), though some would say that the anti-Europeanism of the 1970s sometimes vered in that direction.”
I’d certainly clear them of the latter suspicion too: left opposition to the then EEC was always founded on the notion of a pro-business Europe overruling socialist policies at home. That’s not to say Labour have always been squeaky clean: all three parties have yielded to anti-immigration sentiment at some time, and New Labour’s enthusiasm for the “War on Terror”‘s hardly done wonders for racial harmony or international relations.
Nice discussion on Labour’s debt embarrassment by the way, the most sensible critique I’ve so far seen.
Tabman
Grammar schools, house-price capital windfalls, index-linked final salary pensions, University grants, holiday travel at a time when the world was relatively unspoiled, a reasonable rail network, unclogged roads … i could go on.
Truly a fortunate generation.
Grammar schools also imply secondary moderns? How come you don’t give them as also a wonderful thing? Or do only the 20% who got into grammar school count as real people?
Ditto house price windfalls – not everyone owned houses. Though I guess you could also list easily obtainable council housing as fortunate for the rest.
University grants – not so many people went to university. Holiday travel – only a few could afford to go on foreign holidays.
Back to grammar schools – life is not super-super in those places, like the whole of the administrative county of Kent, that still have them. The argument that they were stuffed full of bright working class kids is nonsense. Where I grew up, the grammar school was in a nice leafy suburb area, the secondary modern on a council estate. That made it pretty clear where you were meant to go, and mostly you did. Actually, the Catholic schools were comprehensivised earlier than the other ones, and what with me being a papist I went to the newly formed Catholic comprehensive and I can’t say I did any worse there than I would have done if I had gone to the secular grammar I was offered a place at. It don’t think it harmed me that I remained mixed with some of my council estate mates in secondary school.
Grammar schools were for the day when we wanted 20% brain workers and 80% brawn workers. Life isn’t like that now. I don’t see any particular reason why having the bright kids attend the same school as the others is put down as such a huge problem, particularly as setting and streaming is the norm everywhere now. The bigger problem is the brain-rot caused by television and other aspects of big-money driven commercial entertainment. But I suppose it’s not very liberal to say that.
David Allen
Well, there you have a point, though I don’t think most of us knew it at the time. What the bubble did for us was to create an artificial increase in capital “values” such as the price of housing. We then taxed it, converted it into income, and told ourselves we had achieved permanent economic paradise.
It seemed pretty obvious to me, but saying so got you into trouble. If you said it was wrong that house prices were rising in a long-term unsupportable way and wrong that so much money went into this non-productive “investment”, you were generally denounced as some sort of evil Marxist who wanted to drive everyone back to the days when the council decided what colour door you had. If you said mortgages should not be so easy to obtain, you were some evil commie who did not understand that 5-multiple mortgages and the like were making it “easier to buy houses” – even though that is economic illiteracy (house prices rise to meet what is available to pay them, so easier to obtain mortgages just push them up – listen to all those Tories, including most recently Cameron in one of the election debates, repeating this nonsense).
Even now, the Daily Mail, Telegraph etc are leading the call not to tax capital gains on second-home ownership at the same rate as income earned by work. See how the rich have the media on the side but there’s no equivalent voice for the poor or even for the real middle (as opposed to what the Mail and Telegraph call “middle class”, which is at mots the wealthiest 10%).
See how these subsidy-junkie “buy-to-let” people moan about paying CGT, even though they’ve already benefitted massively from housing benefit – money taken straight from workers and given to non-workers – which underwrites the big profits they get from rent alongside the low-taxed capital gains. We even had the claim in one of the Tory propaganda sheets you have to pay money for that “second home ownership is the main business” in various rural places in defence of low CGT on them. Can you believe it? These people turn the countryside into economic desert by pricing out the workers from living there, then say they are wonderful philanthropists who should be low taxed because they are the main business there?
Listen to Uncle Vince: http://news.bbc.co.uk/1/hi/politics/10151510.stm on the subject of timing of the cuts. He looks a little uncomfortable, but if you just listen to him, he sounds fairly sure of himself. He has certainly retained his sense of humour, in any case.