Darling's report

[elbows]

Yeah plenty of business-friendly stuff for the short-term to earn their praise.

Another thing in the pre-budget report that Ive yet to read detail on, is the government supporting mortgage-backed securities which is an attempt to get that particular sort of credit flowing again.

 

[MikeMcc]

Can't see any benefits for me, I earn too much to be affected by the benefits changes and the VAT changes won't affect fuel, rent, and food. Possibly some small help for the company I work for. A bit of a non-event for me until the taxes start going up.

 

[FridgeMagnet]

I can't say I feel any less fucked-over and bitter than I did yesterday. I can also pretty much guarantee that this will be the same come the election, and probably worse, and that most people will be in a similar situation.

 

[agricola]

Not really, thats just the standard tory position, along with not wanting higher taxes for the middle and top, and criticising high levels of government spending and debt.

High levels of government spending are not by themselves a bad thing. The point is that since 1997 Labour has spent billions and billions of pounds on needless projects that have often been badly run, badly audited and have failed to do what they have set out to do. Take the disaster of the PPP for the Tube for example. Or ID Cards. Or the NHS computer system. Or the large number of Government contracts Crapita have been able to get despite being rubbish. Or PCSOs. If the Government was genuinely investing for the long term this spending would not be a problem - but they are not doing this.

For sure at any moment in time we can find examples of government waste that arent good, but that doesnt stop the talk of waste and greater efficiency being bog-standard tory code for cutting back on things they dont care about.

To borrow a phrase heard in an episode of the Sopranos, even a broken clock is right twice a day. Yes, the Tories do cut services, and yes they did invent PFI and carry out their own pre-1997 financial idiocy - but Osborne is right that we need to cut a lot of the excess spending before increasing the tax burden any more.

When households and businesses reduce spending, you either live with the subsequent shrinkage of the economy, or else government spends more to try to fill the gap. Its not just the lender of last resort, but also the spender of last resort. Whilst it is obviously not great to be increasing the debt of the nation as a result, these are pretty standard economic measures, the likes of which we are seeing in the USA too. Yes its incompatible with certain economic ideologies, and is classic Tory attack territory, but if they were in power now even they'd be doing a bit of it.

They might be carrying out a bit of fiscal stimulus, but I would hope they would also take a long and hard look about what the Government is spending / is planning to spend its money on and question whether that is actually required. Of course, ID cards are the single best example of this.

I am all in favour of higher taxes and a massive increase in government spending. My disagreement is about what they spend the money on, I think they should not be trying to permanently prop up the culture of excessive consumption, they should let it down gently whilst spending big on low-carbon infrastructure and associated jobs. But no, the existing system may have gone pear-saped but we'll still be praying to the market gods for a solution for some years to come. Pace of oil production declines will determine how long such illusions can be maintained.

As I said above, they are not doing that - they are carrying out this madness in order to prop up part of the system and with the aim of prolonging their own stay in office.

 

[Prince Rhyus]

If Brown had called an election a year ago and lost...what would be the lot of Cameron and Osborne?

 

[elbows]

Well Ive read a bit more and it seems that the governments measures were a bit more extra-ordinary than Id thought. Apparently the idea of spending our way out of a recession has been a political no-no for 30 years, and its been nearly 30 years since the top rate of tax started to be lowered considerably.

So apparently it really is a new era in British life and British politics, although we'd be hard pressed to really notice yet. People's levels of cynicism dont seem to have changed, and most appear to think either not enough is being done, or the wrong things are being done.

The pound has not been doing too well lately, and all the details about larger future government borrowing could cause it to deteriorate further, or there could be problems selling government debt. There are no shortage of warnings that the UK could have a huge financial crisis similar to what happened to Iceland. And apparently the chancellors figures are based on lots of cutbacks and efficiency measures, as well as the economy recovering by the second half of next year.

Its a bit strange really, in some ways the political clock has gone back 30 years, but the masses are still in a different phase, most people who will be ruined by this crisis have not felt the worst yet. Once far more jobs are lost, is it reasonable to expect that the mood will turn nastier, that decades of despair and mistrust of the system will give way to an anger and more immediately desperate population? I dunno I guess I just expect that at some point there will be a partial reconnect between a lot of people and the establishment & media. The news & politics of the day will have a more noticeable correlation with whats happening in our daily lives, and the stakes will be higher. Apathy will not vanish but it may diminish quite a bit.

 

[elbows]

As I said above, they are not doing that - they are carrying out this madness in order to prop up part of the system and with the aim of prolonging their own stay in office.

Yes I agree with that and your other points. Most of the terrible failings of New Labour are going to receive extra, and deserved, attention now that the good times are over. And its territory that the Tories will feel extremely comfortable with, unlike the banking part of the crisis where they didnt have much to say about issues like regulation. No, they need to focus on the last decade where Labour were irresponsible during the good times, rather than the direction, attitude and systemic weaknesses whose origins go back further, to when the Tories of the 1980's were shaping things.

Im not sure how well people are going to cope with another version of the 1980's, when we havent really gotten over the last one yet. But thats what we'll probably get, especially if the country goes bust and has to go to the IMF for help.

 

[gunneradt]

Still dont know why people think the VAT cuts wont be passed on. Granted it wont for beer, petrol & cigies because they are raising other duties on those at the same time, but most retailers should just type the new VAT numbers intot heir computer and we will see a reduction in price.

far too much work for most online businesses to do this immediately - especially in the run up to christmas

 

[girasol]

I think that any economy which is based on consumerism and on people buying things they don't need is going to go wrong isn't it?

What hope does this country have when we're being encouraged to go shopping for luxury items? Why aren't we investing in useful things? Housing, education, health, transport? They all generate jobs and they all require that money be spent.

I can't believe it's come to this, we're being urged to go shopping, wtf??? what a mess.

 

[agricola]

I think that any economy which is based on consumerism and on people buying things they don't need is going to go wrong isn't it?

What hope does this country have when we're being encouraged to go shopping for luxury items? Why aren't we investing in useful things? Housing, education, health, transport? They all generate jobs and they all require that money be spent.

I can't believe it's come to this, we're being urged to go shopping, wtf??? what a mess.

Its the debt that is the problem, not consumerism per se. People were encouraged (and still are by the government) to spend money they do not have in order to keep growth up. Now they will pay the price.

 

[elbows]

far too much work for most online businesses to do this immediately - especially in the run up to christmas

Should be even easier for online businesses than physical stores, no need to physically change price labels. Unless of course the shopoing cart software sucks.

At least one online computer parts supplier has already sent me a 'vat cut comes early' offer where they've shaved 2.5% off their prices in advance.

 

[agricola]

According to the BBC, the Treasury managed to leave a reference in the report to VAT rising to 18.5% in 2011.

But it was a mistake, they didnt mean to include this piece of debating material, that was rejected anyway.

 

[mk12]

Can't see any benefits for me, I earn too much to be affected by the benefits changes and the VAT changes won't affect fuel, rent, and food. Possibly some small help for the company I work for. A bit of a non-event for me until the taxes start going up.

Here's what it means for you: http://www.guardian.co.uk/business/2008/nov/25/pre-budget-report-implications

http://news.bbc.co.uk/1/hi/business/7746241.stm