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The Economic Medicine that is necessary

thisoldman
Grafter
Posts: 1,220
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Registered: 06-04-2009

The Economic Medicine that is necessary

Further to my recent post,the election is not important, I was going to post some of the ideas of our small think tank on what needs to be done.
Alas, this is not going to be possible, due to some members disagreeing with the idea of posting sensitive information in a public forum and secondly, there is no way an almost 2oo page report could be produced here.
So, to avoid disappointing people, I am taking the liberty of posting a few of my ideas and some of the general ideas of what needs to be done to address the huge economic deficit we face, and the concomitant implications and consequences ,of these measures.
I believe that in order to reduce the economic deficit, the following unpalattative measures will have to be taken.Some will be taken immediately and others will be phased in over the next 6-12 months.
Some of these measures are more than likely to lead to industrial action  and political mayhem, which may result in the need to call a fresh general election in six months time. Hence, what I am about to post has to be read in the context of many unknowns and certain caveats.
With regards to the economy, the issue is fairly simple: revenues must increase and costs must be reduced.
I expect the following to happen fairly quickly.
vat on essential goods and services to rise to 23%
vat on non essential services to rise to 25%
fuel duty to rise by 4p per litre
utility costs (gas water electricity) to rise by 11%
council tax to rise by 2 %
income tax to rise for everyone  (varying amounts  as per tax brackets)
tax on beer cigarettes etc to rise by 15 p
increases on rail,bus and air travel.
existing subsidies to councils to be cut by 38%
nhs cuts to be around 19%
education cuts 11%
social welfare cuts 10%
all final salary pension schemes to be abolished.
international aid to be cut by 40%
armed forces cuts of 20% ( Iraq and afghanistan withdrawals to be speeded up)
the 250 billion welfare bill to be slashed by 30%
increases in national insurance, tv licence,car tax.
Regional development grants to be cut by 50%
new bank tax on investement activities.
Bank of England rate to rise in stages to 2%, immediate bank rate increase of .5%
Other measures.:
Major limit placed on immigration. Only people with  an essentisal occupation to be admitted. No benefits to be paid to new immigrants for 12 months.
All nhs/education/public housing building programmes to be substantially reduced.
Contribution to eu to be challenged and substantially reduced.
Draconian cuts to, child and family services, medical services, university places, probation and social services.
30% cut in public service employment ( mainly government depts) with many posts diverted to the private sector.
I am also of the view that these measures will lead to subtantial public  unrest and  the strong possibility of a general election being called within one year.
The gradual decline in the fortunes of the dup and minor parties in N I. will lead to a breakdown in the good friday agreement and the possibility of renewed political conflict as Ireland  heads towards united republican status.
Equally, the status of Scotland and Wales will come under intensive scrutiny and regional grants will be abolished to bring all
parts of the uk into political conservatisism.
18 REPLIES
Community Veteran
Posts: 1,358
Thanks: 29
Registered: 07-03-2008

Re: The medicine.

Looks about right. Acceptance not very likely. Predictions of unrest very likely. Oh well!!!!
Community Veteran
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Registered: 15-06-2007

Re: The Economic Medicine that is necessary

You have just ruined my morning  Sad
dgdclynx
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Registered: 05-04-2007

Re: The Economic Medicine that is necessary

I dont believe it. 6p on basic income tax would be enough.
Community Veteran
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Registered: 07-03-2008

Re: The Economic Medicine that is necessary

It would be illuminating if you could indicate the likely sums that would accrue from each financial burden that we are to be subject to and how near to settling the account will take. My guess for the latter is at least a whole Parliamentary term. The thought of another bout of Labour, albeit modified by Lib Dems, is not an attractive one. Nor is a potential PM called Balls either!!!
thisoldman
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Registered: 06-04-2009

Re: The Economic Medicine that is necessary

hello colintivity:  Now im a bit out of my depth,but iv asked around. The consensus is that the nat debt is around 639 billion and that if all the measures mentioned above were implemented, then we are looking at a 5 year  austerity programme.
It all depends on what measures are implemented first, otherwise the debt wil grow and grow.
Community Veteran
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Registered: 07-03-2008

Re: The Economic Medicine that is necessary

Hi! your Worship!
Grateful for candour, at least there might be hope for a significant dent in the problem during the next term of Parliament. At least Labour was not prepared to act very soon, therefore exacerbating the situation. The medicine will be unpleasant whoever administers it. Let us hope that the powers that be will leave what is left of British industry some incentive to get on with making something.
I noticed that the BBC commentator remarked that at least the outgoing and incoming PMs were riding in  "British" cars...I thought that Ford (USA) sold Jaguar to Tata in India!!!
Community Veteran
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Registered: 12-08-2007

Re: The Economic Medicine that is necessary

Quote from: thisoldman
hello colintivity:   Now im a bit out of my depth,but iv asked around. The consensus is that the nat debt is around 639 billion and that if all the measures mentioned above were

According to figures being discussed this morning the debt is £167B.  Maybe there will be some clarification once ministers are in position.
Lurker
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Registered: 23-10-2008

Re: The Economic Medicine that is necessary

Quote from: colintivy
I noticed that the BBC commentator remarked that at least the outgoing and incoming PMs were riding in  "British" cars...I thought that Ford (USA) sold Jaguar to Tata in India!!!

Aren't they still made in Birmingham though?
Its about as close as you can get to a British car I would have thought.
Community Veteran
Posts: 18,545
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Registered: 12-08-2007

Re: The Economic Medicine that is necessary

Further to my earlier post I've just found this info:
Quote
The UK national debt is the total amount of money the British government owes to the private sector and other purchasers of UK gilts.
From figures published February 18th 2010, UK public sector net debt was £848.5 billion. (or 59.9% of National GDP) – Source: Office National Statistics [1]
Excluding Financial sector intervention, public sector debt is £743 billion or (52.7% per cent of GDP)
The PBR (annual government borrowing) forecast for 2009/10 is for net borrowing of £178 billion or 12.6% of GDP.
Lurker
Grafter
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Registered: 23-10-2008

Re: The Economic Medicine that is necessary

Can you find a figure for off-book liabilities anywhere?
Community Veteran
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Registered: 12-08-2007

Re: The Economic Medicine that is necessary

One of the biggest off-book liabilities is the PFI which has been an expense disaster.  Unable to find exact figures at this point but this site has a useful debt calculator that may be interesting:
Debt Calculator
Community Veteran
Posts: 18,545
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Registered: 12-08-2007

Re: The Economic Medicine that is necessary

Just found that the PFI liability for Scotland for 2010-11 is £27.7B.  Still looking for the total UK figure.
Community Veteran
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Registered: 24-09-2008

Re: The Economic Medicine that is necessary

Not totals, but per household, came up with the following
£30,000 per person public on-book debts,
£5000 PFI off-book debts
£30,000 off book debts of public sector pensions
figures quoted by the BBCs finance editor on Radio 4 back end of April, I remember making a note of them.
I also made a note of a total figure of '£90,000 per household'. It was on the PM prog. R4 around 28th April.
I told my Mother-in-law who immediately asked why Brown wasn't in prison.
Lurker
Grafter
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Registered: 23-10-2008

Re: The Economic Medicine that is necessary

@journeys, you have spotted the biggy - the off-book Public Sector Pension deficit.
And of course you are right - if GB had been head of a company, it would have been shut down and he would be in prison.
The cost of the public sector right now is an issue, but the commitments we have made to our public sector for their future are also worrying.
Question:
If a government expands the public sector such that 1 in 6 employed people work for the public sector, would it ever be easy for anybody to overturn said govt with a large margin?
How many households depend upon a job in the public sector?

(Immigration topic to follow!)