Wednesday, June 9, 2010

Bonfire of vanities

It never ceases to amaze me, both about Labour and socialists in general, in their inability to get their heads around whose money they were actually playing with. It's like dealing with demented toddlers in a sweet shop who are prepared to gorge themselves until sick without realising the consequences to those who have to pay for the gluttony and waste.
They have the keywords down pat though, fairness, equality, social justice, poverty etc. Yet never do they realise that those of us who earn in the real world (not the public sector) do not like the idea of the state picking their pockets to pay for these concepts.

Half a million of the poorest families will be denied free school meals by deep cuts in welfare spending.
George Osborne, the Chancellor, indicated yesterday that some departments would lose up to 20 per cent of their budgets when he laid the ground for a four-year austerity programme to last the whole Parliament.
Even social security spending will be included when every Cabinet minister will have to go before a panel of colleagues to justify every pound they spend. Mr Osborne said that the task ahead represented “the great national challenge of our generation” and that after years of waste, debt and irresponsibility it was time to rethink how government spent its money.
As he was announcing the spending review, which will cover the four years from next April, details of early cuts began to emerge. 
Michael Gove, the Education Secretary, said that he was scrapping plans by Ed Balls, his predecessor, to extend free school meals from next term to 500,000 of the very lowest paid.
The decision will cost families earning less than £307 a week about £600 a year, equivalent to a penny rise in their income tax for each child.
Mr Gove said that he had to make the savings to protect the overall schools budget. But his move was criticised by poverty campaigners who said that it raised questions about the Government’s commitment to reducing child poverty and protecting the poorest from cuts.
Children whose parents are on income support or jobseeker’s allowance will continue to be eligible.
Mr Gove said that Mr Balls had underestimated the costs. It would cost £125 million initially, rather than the projected £85 million, rising to £350 million in 2012-13 rather than the £215 million for which Mr Balls had planned.
The Child Poverty Action Group said that it was “stunned” by the move, which would have lifted 50,000 children out of poverty at a stroke.
OK, first off the measure hadn't been introduced, so what the poorest families haven't had they'll never miss, bit like PAYE.
Second, this was a bribe pure and simple to Labours core support, a vote for us and we'll give you more money in your pocket, they knew fine well that those who had to pay for this weren't going to vote for them anyway.
Third, should Labour not get elected, cutting this measure would get them the headlines of "cruel Tories" that they wanted, so essentially a win, win scenario for them.
Fourth, the Child Poverty Action Group is a fake charity, funded by the government taxpayer to lobby the government on behalf of the government and stuffed with bleeding heart Labour placemen. Closing them down would save the government at least half a million in grants, possibly up to £2.5 million.
Fifth, Children whose parents are on income support or jobseeker’s allowance will continue to be eligible. So those who are at the bottom of the food chain will still get this support.

Now where Labour got it wrong was by creating a system so complex that even where they were picking the pockets of the taxpayers (child tax credits) to give to the poor (If you could count on someone earning over £45k being poor) that they had a massive bureaucracy to administer it, this cost money that really could have gone to the poor and made the taxpayer better off by not having to fund it anyway. So great was Labours need for money that even those on minimum wage paid tax only to get some back if they had kids via a convoluted bureaucratic nightmarish system. There are far easier ways to do it including raising the tax allowances of working parents with children. But again Labour were deluded enough to see the public sector as part of the economy, rather than a drain on it, besides all those public sectors were likely to vote labour otherwise it might be like turkeys voting for Christmas.

So it's no good the Labourists and socialists screaming about cuts, they created the mess we're in where the government ended up paying out a third more than it was taking in. They can scream about the evil Tories, but they were responsible or rather irresponsible enough to believe that the money would never run out. It's time for the UK to pay the piper and the only way we can do that now is to cut away some of the flesh rather than trim the fat, in some cases the limb will have to be removed to pay our debts. This is what Labour and the socialists forgot, there's always a price to be paid for spending what isn't yours.

8 annotations:

John R said...

"cut away some of the flesh"

Actually it's not just "a pound of flesh" that's needed, there are whole limbs of the state octopus that need to be amputated completely. George really needs more than a scalpel to do what's needed.

It's not a case of trimming a bit and doing everything less well, there are things the state should not even be involved in that can be eliminated completely. That's where the real savings will be made. Fake charities and pointless quangos come pretty high on the list but they are just the easy targets.

English Pensioner said...

If there have to be cuts, everybody has to have their fair share, and I don't think there should be any exceptions. Workers in the private sector have had to have pay cuts, or zero pay rise so why not government employees and all benefit claimants? Whilst I would not like to see my pension cut, I would be prepared to accept it provided ALL state employees had a similar cut.
I think this is far better than having tax increases, which affectively does the same thing to an individual's spending power, but enables the government to waste the extra money.

Anonymous said...

£307 per week!! When i first started Work I earned £9 a fortnight; then I joined the RAF and it went down to £2.10!! And I'm not all THAT old you know!!

John R said...

@English Pensioner

"everybody has to have their fair share" - no, no, definitely not!!

Why should we cut something we want/need/should have, even slightly to allow something unnecessary to be left in place? I dont think you should have to be willing to accept a cut in your pension when we still have fake charities and 700 quangos in place. Kill them all off first, entirely, not a brick left standing, real scorched earth.....then look at things like pensions.

No more salami slicing - it's the weak way out. Be decisive, George, close some things down completely to save others.

Trooper Thompson said...

When you're in a hole, keep digging! Yes, keep digging. A few more shovels of dirt and we'll make it to the magical kingdom of fairies and elves, the socialist utopia, it's down here somewhere.

CountingCats said...

their inability to get their heads around whose money they were actually playing with

You miss the point. They know exactly whose money they are playing with.

A very good friend of mine was also a screaming lefty, and he was adamant that everything we posessed was ours for only as long as the government permitted. He firmly believed that we held private property, of any sort, only on the sufference of the state, and that holding could be rescinded at any time.

He was quite oblivious of the fact that this made us chattels of the state.

He knew whose money it was, it was the states money, to dispose of as government saw fit. As also is every other pound in both your and my pockets.

Anonymous said...

Much as I rarely like to inject a bit of truth into the proceedings of anonymous bloggers on matters of economics.

The right wing, light touch regulatory environment, which to some extent New Labour copied, led the banks to ultimate collapse. We were days away from not being able to withdrawal funding from banks and yet the blame is pinned on those that knew that we had to recapitalise the banks to safeguard people's savings. Neo-liberal, unregulated markets are to blame.

To claim it is government or too much government that has caused the hardships of today is absolute rubbish. Look to Germany and France, and we see a capitalist economic model which did and does not rely on debt and greed. Conservatives are happy to blame the state, but quite frankly the State, quite literally, kept peoples mortgages, savings and incomes during the recession by a sensible approach to banking re-capitalisation.

Secondly, the structural deficit prior to the global downturn was smaller then inherited in 1997. To say that Labour was inprudent during the whole 13 years is a myth. The resultant spending has come after a major 'black swan' type of effent which is difficult to predict.

People would have complained if pre-2007 Labour had said we should regulate more; hindsight is always helpful.

You are right to say that the structural deficit needs to be dealt with. However, you can not neatly split the private from the public. The public sector, righly increased in the downturn, to stop an even heavier recession and the secondary effects on unemployment and social benefit payments, was the right call because otherwise we would have spending more of your hard earned money on a longer recession. Now we need to manage the debt down sensibly keeping an eye on inflation and interest rates.

Savage butchering of the public sector does no good if its not sensible. In addition a lot of small SMEs rely on the trickle down effect from the public sector. Over harsh cuts will harm small business and wholesalers. Coffee shops and high street stores rely on income generated from public sector workers as well, too many on the doll and you can see the impact on small stores and business just as much!

A double dip harms us all. And Tories salivating over 3.0m on the doll does not help.

You blog piece is correct to say we have spent beyond our means and correct to highlight that we need to cut the size of the state, but conveniently ignores the core reason for the recession and the impacts of poor policy positions on reducing the debt, and the links between SMEs and the public sector.

For record, I work in banking, pay 40% tax and am not a communist.

Quiet_Man said...

You are quite wrong about the public sector not being in need of butchering, it cannot be good for any society to have 52% of its workforce in the public sector. The public sector should be there merely to do the tasks that the private sector cannot or will not do. Nor should the public sector be there simply to keep jobs down and over regulate business and the general public. There simply is no need for diversity co-ordinators nor the multi-million costing translation services provided by national and local government.
In short the public sector needs to be trimmed back to 1997 levels at least and if that means jobs will go, then that is the price we will have to pay. Yes it can't be indiscriminate, but it needs to be done. Reducing taxation to businesses and removing the minimum wage will help in enabling private industry (the real money makers) to employ more and expand. Removal of the inefficient FSA and a return to control by the Bank of England will help better regulate the financial sector again to make money.
But whatever happens, it's going to hurt and the public sector are going to be hurt the worst.