Not So Radical Spending Cuts 65

The Comprehansive Spending Review announced today is designed to bring public spending back to the same level in real terms that it was in 2006/2007.

I am going to write that again.

The Comprehansive Spending Review announced today is designed to bring public spending back to the same level in real terms that it was in 2006/2007.

It is not radical. It is not nearly radical enough. The state sector is much.much too large in this country. We could have a much smaller public sector which at the same time was much more effective at wealth redistribution. 500,000 public sector job cuts hardly scratches the surface of needed reductions in our ludicrous bureaucracies. The Pivate Finance Initiative, Internal Market mechanisms, feee nd academy schools and their hordes of accountatns and administrators should all go and be replaced bysimple direct provision of necessary services. Local incometax should fun over half of public spending, decided upon and provided close to the point of delivery. Andthe UK should be broken up anyway.

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65 thoughts on “Not So Radical Spending Cuts

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  • mike cobley

    Craig, I’m…nonplussed. So half a million job losses aren’t enough? And we should break up the UK because the people who live on this island are not strong when they work together?

  • Vronsky

    And if Scotland should be independent, why not Cornwall? Or at least allowed to retain its parliamentary boundaries. You need to speak to your Liberal colleagues, Craig.

  • Dougf

    Usually I don’t find your views all that simpatico which is no biggie. Variety being the spice and all.

    But I totally agree with your observations here. The problem,however, remains — where are the future jobs that support any form of welfare state going to come from now that financial slight of hand has proven not to be a long-term value creator ?

    I frankly don’t have a clue. The problem I suggest is that others don’t have a clue either. May you live in interesting times is looking more like a curse with each passing ‘interesting’ day.

  • MJ

    “where are the future jobs that support any form of welfare state going to come from now that financial slight of hand has proven not to be a long-term value creator ?”

    Call me old-fashioned but my understanding is that only proven and reliable means of creating long term value is to make things.

  • mrjohn

    post industrial nations have arrived at their inevitable destination, not enough work to go round, so we have pretend jobs, some well paid in finance, some not so well paid in public services

    but we place so little value on the really necessary roles of farming, building, sanitation, nursing etc

    I think we should admit that we have mechanised & computerised society to a point where we need few workers to keep it ticking over

  • Roderick Russell

    The fact is that the debt crisis caused by bailing out the banks is just too large for the country to deal with, particularly as the traditional economic engine ( manufacturing & the maritime sector) is a poor shadow of its former self. Cut backs will never be sufficient to solve this problem.

    I agree that the bureaucracy does need cut back at some point; except that it can never be cut enough to solve the problem – and surely it would be more prudent to cut in good times, and not in these troubled economic times.

  • alan campbell

    Hey, just cos you were kicked out of your job doesn’t mean you should gloat about half a million people losing theirs. Each job loss is a potential family tragedy.

  • alan campbell

    PS It was so lovely to see the ConDem MPs cheer and wave their order papers at the sound of half a million jobs lost. Alan B’Staad MP would be proud.

  • glenn

    I thought the Scottish nationalists weren’t calling for independence quite so loudly these days, since their banks had to be bailed out by the rest of Britain to such an extent?

  • ingo

    Stillwaiting with baited breath for the cheerleaders who supported Osborne with their letter on Monday, to come out and surprise us with thousands of job offers.

    It becoming clear that unless britain uses its sectors of excellence and expands its manufacturing capacity, we cannot expect consumerism to pull us out of this ditch.

    Britains energy capacities around its coast are vast and untapped, still, estuaries in the east of England are flood alleviation schemes and energy egenerators at the same time, so why are we engaging french nuclear companies to make us even more dependent in future?

    Britain must safeguards its capacities to feed itself, limited protectionism will stop the supermarkets playing with farmers lively hoods, there should be guaranteed quotas for British goods and we have to make more of them ourselves again.

    Only manufacturing will get us out of thius recession, relying on screwing the lower classes whilst protecting the City is unsustainable, a receipe for contraction.

    Off course we blame oLabour for it, but the City will earn regardless of what happens, regardless of who is in power the banks and bonus receipients will still stash their loot, gained from extra ‘debt business’, somewhere in an offshore haven.

  • alan campbell

    And for all the liberal voters out there:

    Alex Deane: In resurrecting the Intercept Modernisation Programme, the Government breaks a clear, basic and fundamental promise.

    Buried in the Strategic Defence and Security Review, the Government plans to introduce a programme to preserve the ability of the security, intelligence and law enforcement agencies to obtain communication data and to intercept communications

  • Alfred

    Good to see you taking a radical position on public expenditure. William Gladstone would have approved.

    Thing is though, if you cut spending, what taxes would you eliminate?

    Here are the taxes I would eliminate (percent 2007-2008 revenue in brackets):

    Corporation tax (9%) — result, powerful stimulus to investment in UK.

    Income tax (29%) — result, only poor people will need government funded healthcare, housing, education, etc.

    Then you can throw in capital gains tax, inheritance tax and business rates, and you’re still cutting total tax revenue by less than 50% — And no need for a local income tax. If you want devolution, give local authorities a share of the VAT, fuel duties and the myriad other taxes that made up 55% of 2007/2008 revenue.

  • Clark

    So, about half a million public sector jobs are to be axed, but which jobs, exactly? With such a large number, it could include lots of workers on low pay. How many of our expensive new bureaucracy does it include?

  • Alan G

    “The Pivate Finance Initiative, Internal Market mechanisms, feee nd academy schools and their hordes of accountatns and administrators should all go”

    except it’s not them that’s going to go is it? It’s teachers, social workers, nursery nurses, street cleaners, bin men, bin collections, after school clubs and firemen.

    Additionally the tories housing policy can be summed up like so:

    “staying in your council house is a drain on society – other people need social housing too. Buying your council house and removing it from social housing stock is ok though”

  • Anonymous

    The point of slashing public spending is not to make people unemployed. The point is to make them more productively employed in the private sector. The result should be an increase in national wealth and an increase in Britain’s international competitiveness.

    In proposing, above, what taxes to cut, I omitted reference to national insurance which accounts for 19% of Government revenue. This impost should be eliminated, the minimum wage reduced proportionately and all health, pension and unemployment benefits means tested. The result would an increase in the international competitiveness of British labour and hence a reduction in unemployment.

    With the elimination of the national insurance tax, corporation tax, and income tax, the government would still have a revenue equal to 20% of GDP for essential services such as the police, national defense (2.5% of GDP) and the administration of justice.

  • Can't pay, won't pay anymore

    It’s about time we had a proper bourgeois revolution in this country and squeeze both the rich and poor alike until their pips squeak. Those two classes have been living off us middlin income people for years.

    To be fair the poor have only been screwing us for about sixty years whilst the rich have been at it for millennia, but still…

  • Suhayl Saadi

    On these matters, I find myself in agreement with Roderick Russell, some of Craig’s elaborations re. the details (getting rid of PFIs, etc.) and paradoxically, Alan Campbell.

  • glenn

    Hello again Alfred, glad you’re still posting… but that’s a pretty mean prescription you’re proposing! With the minimum wage reduced proportionally to NI being eliminated, all other taxes collected will also be reduced by about the same amount across most of the working sector. Minimum wage sets the floor, and if that drops everything else drops with it. Not at once, of course, but over a short period (perhaps allowing inflation to take care of it).

    Getting rid of the corporation tax is not going to attract much investment. Most corporations don’t pay tax anyway, once they’re through with their various dodges and fiddles. Re-investment never gets taxed anyway, just the money taken out. All the investment is currently going to China or India, nobody’s interested in building a manufacturing base in the UK (not once the start-up grants are used up, anyway).

    Given there’s already a huge surplus of labour, throwing an extra 1/2 million public workers on the dole is hardly going to boost the economy by making “them more productively involved in the private sector”. On the contrary, it’s going to add to our woes – those 1/2 million carry many extra jobs in services supporting them. Instead of being tax-payers, they will become welfare recipients.

    This is what I’d like to have seen:

    – 20% tax added to everything earned over £1 million/year

    – Corporation tax strictly enforced

    – Import duties to make it _at least_ as expensive to employ sweatshop labour as British labour

    – Inheritance tax amounting to 50% of anything over £1 million

    – Annual wealth tax of 2% of net wealth for estates worth over £1 million

    – 80% tax on proceeds from privatised public utilities (water, electricity, etc.)

    That might seem a bit harsh on the rich, but we’re all in this together after all, and I think they can stand the pain a bit more easily than those bumping along the bottom – particularly with their first million/year not being troubled any more than at present.


    But from your thinking about what the state should actually be for, I think you’re what the Americans would call a Libertarian, am I right, Alfred?

  • paul

    It’s certainly working a treat in Ireland. Perhaps all the newly unemployed can move there.

    Removing employment in an economy which already under utilises its available workforce is insane, no matter how great your dislike of some aspects of it.

    How does cutting housing benefits remedy the problems of PFI?

  • somebody

    The old witch is (nearly) dead. That was Thatcherism.

    This crowd’s hatcheting job will be much worse. What epithet will be given to them. Bullingdonian? Cameroonery? Or how about a good Clegging?

  • glenn

    somebody: Looks like it might be a wise precaution to get a bottle of fizz in the ‘fridge, ready for the celebrations, eh?

  • Mark Golding - Children of Iraq


    Actions speak louder than words and it was Agent Cameron that ‘hatched’ a perfectly good weblog on the advice of the security services – even after rather naively I told him it was a great revolutionary idea to post impromptu videos of his family life (washing-up and playing with the kids) which gave the British public a window on the real man.

    My advice was thrown away and all future video posts on WebCameron were strictly stage managed political garbage…

  • Joseph

    “The point of slashing public spending is not to make people unemployed. The point is to make them more productively employed in the private sector.”

    Anyone who believes that the private sector will pick up the public sector employees who have been made redundant is either an idiot or an economist. (Or both — is there a difference?) Don’t look at what CEOs say in letters to The Daily Torygraph, look at the provisions their finance directors make in their balance sheets for redundancies and slowdowns in pubic purchasing.

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