Question: Is the Labour government lying about future public spending?
| Yes | 86 | 100% |
| No | 0 | 0% |
86 Responses in 25 days.
Question: Is Ed Balls a liar?
| Yes | 105 | 100% |
| No | 0 | 0% |
105 Responses in 25 days.
Had to chuckle.
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Saturday, July 25, 2009
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Implying or hinting that public spending cuts (and probably tax increases as well) won't be necessary to put UK public finances onto a sustainable basis is misleading at the very least. But the relevant policy issues are more complex than just the question of whether Brown (and Ed Balls) lied.
ReplyDeleteThe latest data have dashed any hope that the economy is coming out of recession:
http://www.independent.co.uk/news/business/news/hopes-of-early-end--to-recession-dashed-1760769.html
The real worry is that early public spending cuts - before the economy is back on a sustainable growth path - could make matters much worse. In current conditions, the looming possibilites of a double-dip recession, a period of secular stagnation or even deflation, with prices declining on trend, cannot be readily dismissed.
If accessible, it's worth reading Sam Brittan in Friday's FT on: How the budget hole developed
www.ft.com/cms/s/.../a61b04f2-77bd-11de-9713-00144feabdc0.html
The real worry is that early public spending cuts - before the economy is back on a sustainable growth path - could make matters much worse.
ReplyDeletePrecisely, Bob. Rudd has said in Australia today that as the economy turns the corner, the public must prepare for financial misery for the first year.
"the public must prepare for financial misery for the first year"
ReplyDeleteIt will almost certainly take far longer than a year of fiscal stringency (misery) in Britain to put public finances back onto a sustainable basis. As Mervyn King (BoE Governor) remarked in recent testimony to the HoC Treasury select committee, public finances were not on a sustainable basis even before the credit crunch started.
As for the extent of fiscal misery downstream, much will depend on how soon and by how much sustainable GDP growth is achieved along with - importantly - growing (instead of shrinking) tax revenues. And also how soon the government can recover its huge stakes in the ailing banks: RBS and Lloyds TSB merged with HBOS.
A critical factor in getting the economy back to growing again is getting the banks collectively to increase their lending to business. There's a challenging chicken v egg situation about that: without more lending to business prospects for business will continue to be gloomy so the banks will continue to regard lending to business as too risky.
A critical factor in getting the economy back to growing again is getting the banks collectively to increase their lending to business.
ReplyDeleteThis is critical and despite the risks, government must get behind this.
The only alternative explanation for Labour's nonsense about spending is that they are genuinely nuts.
ReplyDeleteI don't think Labour are nuts, "confused" and "worried" are probably better descriptions.
ReplyDeleteGB wants to go into the general election saying the Conservatives are committed to slashing public spending while Labour, if re-elected to government, would try to maintain public spending so far as is feasible - as they probably would.
The political debate on public spending is anything but reassuring.
"A former adviser to Tony Blair, however, has claimed that billions of pounds of spending can be slashed from Whitehall budgets through a mixture of innovation and cutting back on waste. . .
"'Billions of public spending can be saved, for instance, if services for those with chronic [helath] conditions like diabetes are redesigned around self-care.'"
http://www.guardian.co.uk/politics/2009/jun/24/george-osborne-tories-emergency-cabinet
At that stage, I really start to wonder if he knows what he's talking about.
Amputations among diabetics are currently running at the rate of about 100 a week. Is he suggesting those should done through "self-care" regimes? Diabetes is the largest cause of renal failure and one of the main causes of blindness among adults, all of which shows why careful monitoring of self-care by patients will continue to be essential to avoid downstream escalation of the costs of care to the NHS.
The prospect of saving billions is an illusion. Most diabetics that I know about are already on self-care regimes anyway and I was under the clear impression that a recurring problem with self-care regimes for potentially homicidal schizophrencs is that they can't be relied on to take their medication.
Yes, seems to me that they're looking in the wrong areas to cut. The crazy schemes like databases and social engineering should be first cabs off the rank.
ReplyDeleteAs for the NHS database of personal medical records costing £12 billions, compare these two news items:
ReplyDelete"Patients who do not want their medical records to be placed on a national electronic database are being coerced by NHS managers to give their consent, the British Medical Association said last night."
http://www.guardian.co.uk/society/2009/mar/11/nhs-database
"Two NHS trusts in Sussex and Surrey have been found in breach of the Data Protection Act. Sussex and Surrey NHS Trust was found to have left a ward handover sheet on a bus and had two laptop computers, which had not been encrypted, stolen. Epsom and St Helier NHS Trust was found to have insecurely stored hospital records for nearly two years after data was transferred between hospitals."
http://news.bbc.co.uk/1/hi/england/8155409.stm
Says it all, doesn't it?
ReplyDelete