So tomorrow we get the Comprehensive Spending Review, otherwise known as cuts. A thread to speculate what might happen, discuss what you think should happen and then comment on what is actually announced seems a good idea.

 

Some things have already been announced and some of them are actually good. For example, a reduction in the amount of tax relief available to the wealthiest is a good move. But we will probably see some pretty nasty cuts announced tomorrow.

Well, we've already seen a blisteringly painful 50% cut in housing yesterday...and an 8% cut in Defence would imply there are some huge cuts about to be made elsewhere.

They've killed RAF Kinloss in Moray, and RAF Lossiemouth just along the road is on shaky grounds.

 

Both of them are in the same County and closing them loses £150m pa for the local economy and 1 in 5 jobs in Moray.

 

RAF Leuchars has thankfully been saved, for now.

Being announced now.

God, I'm so fed up of these out-and-out LIES from the Coalition. They keep claiming the finances were so much worse than they thought when they made their promises during the election - even though the deficit is £15bn LOWER than forecast in May.

It's not all bad. The bank levy is being made permanent. The 1500-capacity prison that Labour planned is being scrapped. The average cut in departmental budgets over four years is 19% rather than the 25-40% figure mentioned so often. It looks like that was just spin to make the reality seem less awful - just as some of us suspected all along.

God, I'm so fed up of these out-and-out LIES from the Coalition. They keep claiming the finances were so much worse than they thought when they made their promises during the election - even though the deficit is £15bn LOWER than forecast in May.

That's at least partly true. The tax on bankers' bonuses raised a lot more than expected. Unemployment has been lower than anticipated meaning less money paid out in benefits and higher revenue.

 

Ministers have claimed that Labour ministers had sanctioned additional spending in the months before the election without announcing it. I don't know to what extent that is true.

 

You should bear in mind a statement from the Chancellor earlier this year that cuts "more severe than under Th*tch*r" were unavoidable. That Chancellor was Alistair Darling not Gideon (call me George) Osborne.

That's at least partly true. The tax on bankers' bonuses raised a lot more than expected. Unemployment has been lower than anticipated meaning less money paid out in benefits and higher revenue.

 

Nevertheless, it's completely disingenuous to say pledges made during the election campaign don't apply now due to "the situation being so much worse than we all thought", like we've heard from the Tories over the last few weeks about their broken promise on child benefit and Clegg and Cable and tuition fees.

 

Also, isn't it only 19% cuts average due to the fact health and international aid are being protected? If you take them out of the equation, I think it is cuts of 25% and upwards for most departments. On that note, I love how Osborne is now claiming he's cutting less than Labour would've planned - either they're "deficit deniers" or not, they can't have it both ways.

 

You should bear in mind a statement from the Chancellor earlier this year that cuts "more severe than under Th*tch*r" were unavoidable. That Chancellor was Alistair Darling not Gideon (call me George) Osborne.

 

Darling was an utter idiot for his comments during the election campaign, as he mistakenly believed Labour needed to appear "tough" on the deficit to have credibility. One of the rare occasions where Gordon Brown's political judgement was right was his original hope to frame the election as "Labour investment vs Tory cuts" - it's a shame he was defeated by Darling and Mandelson on that. But what Darling tried to hide was that there was a so-called "escape hatch" in his plans, which effectively meant that, if economic growth started slowing (which seems likely to start happening soon, as a ripple-out effect from the US slowdown), Labour's cuts would've been deferred. This is a far more sensible approach than the Coalition, who are apparently hellbent on pushing through these cuts come what may.

 

Anyway, on the specifics of the spending review - more benefits cuts, halving in the already under-par housing budget, 20% cut in police budget, at least 500k redundancies from the public sector (plus probably more to go from the private sector due to the knock-on effect the redundancies will have on the wider economy) and a pitiful bank levy which is a quarter the size of the levy Obama wants to bring in in the US. Plus the "greenest government ever" are cutting 25% from the climate change budget and 40% from the environment budget, while the government committed to "the most radical decentralisation of power ever" are cutting 37% from council budgets while ordering them to freeze council tax.

 

In fairness, it isn't ALL bad - the reduction in prison places is welcome and will hopefully stop the absurd "prisoners arms race" between the Tories and Labour. I can accept the defence cuts even though it will hit construction jobs, and also can accept the cuts to the culture budget, including (grudgingly) the 16% real cut to the BBC. I'm also glad capital spending is being treated with some leniance, and the promised rise in apprenticeships would be good, although I'll reserve judgement - the devil's in the detail, as there's been countless times the Coalition has promised things before they start completely unravelling under scrutiny, including Clegg's "fairness premium", which like Andy Burnham said is "robbing Peter to pay Paul".

By the very nature of coalition government some election pledges are bound to be abandoned. As the junior partner the Lib Dems are always likely to have to abandon more pledges than the Tories. I don't like the increase in tuition fees although the overall package - which may yet be changed - isn't quite as bad as it has been portrayed by some. The Tories have - thankfully - abandoned their inheritance tax cut.

 

I agree that the "it's worse than we thought" mantra is disingenuous although I always expected the Tories to say it. I hadn't seen his claim that the cuts are less than they would have been under Labour. As Labour haven't been very specific about what they would cut, he doesn't have any evidence to back his claim.

 

Some of the cuts in admin costs seem reasonable but 41% in DCMS? The cut in the BBC's budget is higher than it seems because they are having to pay for S4C and the World Service as well as having a zero increase in their income for six years. No doubt Murdoch will be pleased.

 

The cut in the Energy and Climate Change budget is bad news as it is already a low spending department.

Meanwhile, it now turns out that NHS spending will rise below inflation, amounting to a real-terms cut - another broken promise.

 

Also, the Treasury's own figures show the poorest 10% are hit the hardest directly by the cuts (and that's before we even consider the fact public service cuts will hit the poorest hard indirectly).

Meanwhile, it now turns out that NHS spending will rise below inflation, amounting to a real-terms cut - another broken promise.

 

Also, the Treasury's own figures show the poorest 10% are hit the hardest directly by the cuts (and that's before we even consider the fact public service cuts will hit the poorest hard indirectly).

NHS spending will rise by more than the rate of inflation but only just. Of course, NHS inflation is higher than general inflation because of an ageing population and new treatments becoming available so you can argue that it is a cut. However, both Tory and Lib Dem manifestos only promised an increase in funding in real terms. Technically, they are doing that. The Lib Dems also promised to cut waste and said that they had identified specific examples. If they achieve that (and I accept that it's a fairly big if), that could mean increasing spending on health care by more than the NHS inflation rate. I certainly hope so.

The cut in the BBC's budget is higher than it seems because they are having to pay for S4C and the World Service as well as having a zero increase in their income for six years. No doubt Murdoch will be pleased.

I thought S4C was the welsh language arm of Channel 4 and therefore was paid for by C4 instead of being a govenment funded channel :o

 

 

Learn something new every day.

I thought S4C was the welsh language arm of Channel 4 and therefore was paid for by C4 instead of being a govenment funded channel :o

Learn something new every day.

It is the Welsh language arm of C4 but it is mostly funded by central government - or at least it was. It was only set up after a Plaid Cymru MP went on hunger strike.

"Those who cannot remember the past are condemned to repeat it." - George Santayana

 

http://www.independent.co.uk/opinion/comme...in-2112069.html

Edited October 22, 201014 yr by munchkin

As far as I'm concerned the supposed "fairness" in these cuts is also completely disingenous, anyone who says that the poorest and women aren't being hit the hardest here are frankly living in a cloud cuckoo land, The Independent basically exposed the cuts to Public Sector jobs as putting the cause of Equality back about 30 years, because it is female workers who will bear the brunt of the redundancies... I already know several female friends of mine who are about to lose their jobs in the next few months, but only one of my male friends (who was on a fixed term "rolling contract" anyway...), so the Indie's story appears to have some legs to it going from what I see myself...

 

The attack on Housing Benefits is absolutely alarming to anyone with half a brain - I mean, okay, there are SOME people living in expensive accomodation in Central London, but Osbourne has used this TINY MINORITY as an excuse to hammer the millions of people who need HB, in fact they seem to be using it as an excuse to hammer anyone under the age of 35 who might happen to lose their job sometime in the next 5 years and also who might just happen to have their own place.... If you go down to the fine detail of it, it's really quite alarming, for example, your HB is due to fall by 10% if you claim JSA for over 12 months, and the big fanfare they made about £400 per week, well, yeah, that would be £400 for a FOUR BEDROOM HOUSE, just try looking at the rents of flats and studio apartments in London - £170 a week (and more) for a one bedroom place, so, how much you imagine a four bedroom place costs...?

 

Sickness Benefits too is a pretty dodgy area. Okay, no one likes malingerers, but limiting it to 12 months is LUDICROUS, this is gonna catch out a lot of people who are genuine claimants (for example, sufferers of MS and other progressive illnesses...), again, it's just hammering the most to get at the few, a bloody carpet-bombing where a surgical strike was far more appropriate, and we're already seeing the consequences of this and the cuts to social care also, as a woman with MS confronted the "And and Dec" of politics the other day when they were trying to give the hard-sell...

 

The Child Benefit farrago is similarly ludicrous because of the way they've gone about it. "Fairness"?? Bollox... How can it be fair to stop Child benefit to a single parent who happens to be paying 40% tax and in a £43k a year job, but not stop it for a couple whose combined income is topping about £80k...?? Perhaps the universality had to stop, fair enough, but if you're gonna go down this path, then you really should MEANS TEST it and partner's income should also be taken into account... And, well, I dont wanna hear bullsh"t excuses as to why that cant be done, seriously, I dont.... This is basically an attack on single parents/divorcees/widows, etc....

 

I too am sick of this bullsh!tting from the Lib Dem end of the "coalishun" in particular, that they didn't appear to know things were as they were before the election, what absolute tripe, they had the likes of Robert Peston TELLING them how bad things were on a bloody regular basis just about, all they had to do was turn on the telly, or were they too busy making false promises to the students and going on photo opportunities to wheedle votes out of them to listen...? Yes, we all know that compromise has to be done in a coalition, but I wasn't actually aware "compromise" meant "selling out every principle you ever had"... I'm particularly disgusted with Vince Cable, I've completely lost all respect for him.. And I dont buy for a minute what Danny Alexander is saying about going after the rich tax avoiders either, I mean, that means he'll have to go after his boss, Georgie boy and a few others in the Cabinet, as well as Tory top chum Phillip Green..... Yeah, right, let's see....

 

The bank levy is simply not hard enough, it should have been a "Robin Hood" tax. Because now you have a situation where in the life of this Parliament the banks are only going to be expected to part with £10 billion, but the poorest are being hit for a damn sight more... "Fairness", my arse.... And, no, I dont care about the "long-term", the banks should be getting hammered NOW to pay back that £500 billion we gave them to prop up the whole banking system... It's disgusting that bankers are awarding themselves a £7 billion bonus when the deficit they created is nowhere near being paid back...

 

But there's another mantra I'm absolutely sick of hearing also, the idiot cry of "we're all in this together", coming from Cameron, Clegg, Osbourne, et al.... Sh!te..... Every time I hear some rich, white, male politician spout this rubbish, the bile in my throat just rises..... To say I'm disgusted with this "spending review" would be an understatement....

 

 

 

 

 

 

 

You're not alone in loathing this "We're all in this together" nonsense. The fact is it is almost impossible to make cuts in a progressive manner. They are almost certain to be regressive. To cut the deficit in a progressive manner, tax rises targeted on the wealthiest are required.

 

I went to see the Manic Street Preachers last night. James' introduction to Masses Against The Classes was interesting. He didn't say anything specific but there was almost a hint that he suspected bankers deliberately caused the crisis to precipitate the end of Labour's rule. The inadequate nature of the bank levy thus represents payback time.

He didn't say anything specific but there was almost a hint that he suspected bankers deliberately caused the crisis to precipitate the end of Labour's rule. The inadequate nature of the bank levy thus represents payback time.

 

That's a slightly fanciful notion tbh, the crisis started in America, and ended up biting us on the arse because we chose to be so closely allied to the US (a choice made BY Blair and Brown let's not forget)... All "Nu Labor" had to do was install the same sorts of banking practices as Australia, Canada and New Zealand, all of whom have tougher regulation, and all of whom pretty much avoided any problems... Nu Labor were the ones who took regulatory powers from the Bank of England remember, and it was David Blanchflower at the Bank of England who warned us all of this, and Nu Labor didn't listen... Labour was brought down by Blair and Brown mate, not by the bankers....

I think "we're all in this together" is going to come back and MAJORLY haunt the government... I can see it becoming an ironic slogan for government bull$h!t in decades to come.

 

The fact is it is almost impossible to make cuts in a progressive manner. They are almost certain to be regressive.

 

Which is exactly why the bulk of deficit reduction needs to come from tax rises on the wealthiest, rather than this Government's mix of massive spending cuts and minimal tax rises which affect the poor as well as the rich (VAT), thus taking demand out of the economy. And the key is to put taxes on land, so that the ridiculous argument that people would flee if there were higher taxes wouldn't apply.

Nobel Prize-winning economist Paul Krugman on the government's cuts:

 

 

British Fashion Victims

 

In the spring of 2010, fiscal austerity became fashionable. I use the term advisedly: the sudden consensus among Very Serious People that everyone must balance budgets now now now wasn’t based on any kind of careful analysis. It was more like a fad, something everyone professed to believe because that was what the in-crowd was saying.

 

And it’s a fad that has been fading lately, as evidence has accumulated that the lessons of the past remain relevant, that trying to balance budgets in the face of high unemployment and falling inflation is still a really bad idea. Most notably, the confidence fairy has been exposed as a myth. There have been widespread claims that deficit-cutting actually reduces unemployment because it reassures consumers and businesses; but multiple studies of historical record, including one by the International Monetary Fund, have shown that this claim has no basis in reality.

 

No widespread fad ever passes, however, without leaving some fashion victims in its wake. In this case, the victims are the people of Britain, who have the misfortune to be ruled by a government that took office at the height of the austerity fad and won’t admit that it was wrong.

 

Britain, like America, is suffering from the aftermath of a housing and debt bubble. Its problems are compounded by London’s role as an international financial center: Britain came to rely too much on profits from wheeling and dealing to drive its economy — and on financial-industry tax payments to pay for government programs.

 

Over-reliance on the financial industry largely explains why Britain, which came into the crisis with relatively low public debt, has seen its budget deficit soar to 11 percent of G.D.P. — slightly worse than the U.S. deficit. And there’s no question that Britain will eventually need to balance its books with spending cuts and tax increases.

 

The operative word here should, however, be “eventually.” Fiscal austerity will depress the economy further unless it can be offset by a fall in interest rates. Right now, interest rates in Britain, as in America, are already very low, with little room to fall further. The sensible thing, then, is to devise a plan for putting the nation’s fiscal house in order, while waiting until a solid economic recovery is under way before wielding the ax.

 

But trendy fashion, almost by definition, isn’t sensible — and the British government seems determined to ignore the lessons of history.

 

Both the new British budget announced on Wednesday and the rhetoric that accompanied the announcement might have come straight from the desk of Andrew Mellon, the Treasury secretary who told President Herbert Hoover to fight the Depression by liquidating the farmers, liquidating the workers, and driving down wages. Or if you prefer more British precedents, it echoes the Snowden budget of 1931, which tried to restore confidence but ended up deepening the economic crisis.

 

The British government’s plan is bold, say the pundits — and so it is. But it boldly goes in exactly the wrong direction. It would cut government employment by 490,000 workers — the equivalent of almost three million layoffs in the United States — at a time when the private sector is in no position to provide alternative employment. It would slash spending at a time when private demand isn’t at all ready to take up the slack.

 

Why is the British government doing this? The real reason has a lot to do with ideology: the Tories are using the deficit as an excuse to downsize the welfare state. But the official rationale is that there is no alternative.

 

Indeed, there has been a noticeable change in the rhetoric of the government of Prime Minister David Cameron over the past few weeks — a shift from hope to fear. In his speech announcing the budget plan, George Osborne, the chancellor of the Exchequer, seemed to have given up on the confidence fairy — that is, on claims that the plan would have positive effects on employment and growth.

 

Instead, it was all about the apocalypse looming if Britain failed to go down this route. Never mind that British debt as a percentage of national income is actually below its historical average; never mind that British interest rates stayed low even as the nation’s budget deficit soared, reflecting the belief of investors that the country can and will get its finances under control. Britain, declared Mr. Osborne, was on the “brink of bankruptcy.”

 

What happens now? Maybe Britain will get lucky, and something will come along to rescue the economy. But the best guess is that Britain in 2011 will look like Britain in 1931, or the United States in 1937, or Japan in 1997. That is, premature fiscal austerity will lead to a renewed economic slump. As always, those who refuse to learn from the past are doomed to repeat it.

 

http://www.nytimes.com/2010/10/22/opinion/...tml?_r=1&hp

That's a slightly fanciful notion tbh, the crisis started in America, and ended up biting us on the arse because we chose to be so closely allied to the US (a choice made BY Blair and Brown let's not forget)... All "Nu Labor" had to do was install the same sorts of banking practices as Australia, Canada and New Zealand, all of whom have tougher regulation, and all of whom pretty much avoided any problems... Nu Labor were the ones who took regulatory powers from the Bank of England remember, and it was David Blanchflower at the Bank of England who warned us all of this, and Nu Labor didn't listen... Labour was brought down by Blair and Brown mate, not by the bankers....

I wasn't making it as a serious suggestion. I wouldn't rule it out entirely but it is - to borrow your phrase - a slightly fanciful notion. I think the bankers acted the way they did knowing full well that the government would have to bail them out if it all went horribly wrong. That's why we need to go back to a separation between investment banks and high street banks. An investment bank can be allowed to collapse, a high street bank can't.