Cuts will not save money fast enough 

Jonathan Cook

The complete removal of the Labour Party and their transformation into merely a 'think tank' would not save much in the short term, however, after about 30 years of the political cycle this would save the country countless trillions each year, whilst services would also improve year on year.

Jim

The most important cuts to make are to the size of the state, as this is where the cultural marxists promoting political correctness reside.
Abolishing all of the Quangos, banning donations to fake charities, cutting funding for global warming research, cutting pensions for elite state employees would all save lots of cash fast. Such cuts would also have the added benefit of destroying the power base of these marxists and stopping their agenda of destroying the culture of Britain.
To talk about raising taxes at this time, as Finkelstein does is utter madness, it also shows him to be on the side of the state and thus an enemy of the British people.

David

At last - a mature and sensible approach to saving money rather than the ConHome approash of "slash slash slash". Perhaps the only point missing is that it is possible spending may have to go up in the short term to pay for the changes needed to save money in the long term.

Denis Cooper

Clearly there are people employed in the public sector whose activities are non-productive or even counter-productive, and those jobs could be eliminated quite quickly; similarly there are private sector companies working on public sector projects which should never have been started and which could be wound up quite quickly; and in both cases there are no doubt wasteful practices which could be quite quickly suppressed to cut costs.

The problem is that while the private sector is still too weak to absorb large numbers of workers eliminated from jobs which are directly or indirectly funded by the state they'll simply remain unemployed and a burden on the state, albeit a smaller net burden, while their loss of purchasing power will depress consumer demand and lead to private sector redundancies and bankruptcies.

And if they can't pay their mortgages then that will lead to repossessions and homelessness and empty properties as a drag on the housing market, plus of course more bad debts for the lenders, and if they can't pay their credit card debts then that may end up with the taxpayer having to bail out credit card companies to stop them dragging down their parent banks.

The alternative to sacking unnecessary public sector workers would be to cut their wages, which would be less damaging to the economy but also less beneficial for the government's finances.

It seems to me that making any significant inroads into the budget deficit will take so long that the Bank of England will have to continue to print new money to make sure that the government can pay its bills.

By creating £120 billion of new money to buy, and then sequester or quarantine, previously issued gilts - ie taking roughly one sixth of all the gilts in issue out of the hands of private investors and so out of circulation - the Bank has helped the Treasury to borrow about £64 billion by selling new gilts to private investors who might otherwise have gone on strike.

That can't carry on forever, but I doubt that it can be stopped until next spring at the earliest.

Sheila

Groan.

On a day when we hear that £700 million is to go on non-jobs just to keep the dole figures down and boost the Labour voting clientele I cannot believe I am reading this.

Cameron must have the guts to cut the public sector, the bulk of which is useless.

Norman Tebbit has been there and done it and he says there's room for tax cuts.

Where's a pole cat when you need one?

family silver

There's another option: sell things the government doesn't need to own (and often does a bad job of owning) - Ordnance Survey, Royal Mint, Network Rail [CLG, ho hum], Royal Mail....

Sale and lease-back: it's what debt-heavy, asset-rich companies have to do. So should the State.

Andy

You could stop paying child benefit for a third or subsequent child to start in 9 months' time. That would save a bit and help the planet.

cuffleyburgers

I cannot believe that axing all quangoes and cancelling all public sector consultancy contracts would not be achieved immediately and would save billions.

Short the UK

Anthony Hilton on the UK - 29/7/09:

'Coming out of this crisis, growth rates are going to be much lower, partly because we will have to invest more to re-balance the economy, partly because we have a mountain of debt in infrastructure, Private Finance Initiative projects, private equity deals and commercial property, all of which will have to be paid down or written off — even before we get to personal problems with mortgages and credit cards.

And we will have to pay more tax, not just because government is hitting its borrowing limits, but because the £60 billion paid in corporation tax by the financial sector has disappeared and will have to be made good.

Last time around, Mrs Thatcher in the early 1980s used North Sea oil and privatisation to close the gap — and it was still pretty painful.

Unfortunately there is not much family silver left to sell: this time it could easily be much worse.

Recognising this, a member of the Bank of England's Monetary Policy Committee said the other day that the country needed 10 years of fiscal restraint — which is bankspeak for 10 years of high tax but low spend.

How much tax? He did not say, but given the size of the budget deficit, we are looking at a basic rate of income tax rising towards 30p in the pound, or a VAT rate increasing from 15 per cent to 22.5 per cent — or most likely a bit of both.

All this presents an interesting challenge for our politicians as they prepare for the next election. They can do the sums as well as anyone.

But only the Liberal Democrats, through Vince Cable, even come close to talking about it.

The others do warn us that we will have to lose weight but at the same time say we can continue to feast on chocolate. Sadly theirs is another phoney war.'

TGF UKIP

Of course while the fanzine hacks are happy to link to their fellow cheerleader Daft Danny all day, the sort of link you're never going to get from them is to Geoffrey Wheatcroft's piece in the Guardian on Monday.

There is a comment on it and a link to it on Guido of course today at order-order.com and I highly recommend Coffee Housers read it.

The article brilliantly expresses the reservations about the Cameron and the Clique articulated so regularly on this website.

"There's something not quite right about Cameron and his team, something fishy, something dodgy."

Chris lancashire

There are many excellent suggestions in this thread but you are right Mr Balckburn, they will all take time to work through. There will be no alternative, in the Tories' first year to a tax raising budget. I do hope that they go for a 20% VAT tax rate. This will raise around £25billion compared to the present 15% rate (17.5% on Jan 1), provide welcome breathing space for the Govt until much needed cuts work through and, if as many said (including myself) that the 2.5% cut made little real difference then the 2.5% increase shouldn't hurt too much.

Now that's Real Help Now.

Robert Eve

Spot on Andy!

Trevors Pen

"David Cameron is likely to win, but don't expect a Conservative government".

Heffer in today's Torygraph.

AndyLeeds

Chris Lancas has it. By raising VAT. This dimwit should never have reduced it to 15% anyway - he couldn't afford to do so.

Next we need to take an axe to the State and to sort of the tax and benefits system. Both are so complex it just isn't true.

Publius

Sounds too me that too many of these 'we must raise more tax' arguments are based on the premise that we need to maintain the vast, bloated machine as is.

The list is too long to mention, but while The Equalities Commission continues to exist; while my local council continues to insist on financing Black History Month and annual LGBT festivals; while road signs, speed cameras, and street lighting continue to proliferate, I do not expect to pay one red cent extra in tax.

LLOYDJ

since we all live longer why hasnt the pensionable age been raise befor now? If the savings that are mentioned wrt women , why not progressively raise the age for both over the next 10 years to age 70. This would save billions

Stephen

Andy: We could stop paying Child Benefit completely. We don't need to increase the population and we certainly don't need the civil servants. And the saving would help make sure that the entrepreneurs and wealth generators who will rebuild the country won't be scared off by (more) badly focused tax rises.

anne allan

Raising VAT to 20%, let alone 22% would be counterproductive. It would cut consumer demand and the black economy would flourish.

seb

Short the UK, as always, is right to remind everyone who reads these comments of the usually overlooked, elephant-sized fact that the UK's real economy is barely creeping along and needs pro-active TLC from our next government rather than the benign neglect it's endured for generations. Denis Cooper's comment is another reminder of this same ugly truth: discarding many clearly useless public sector jobs will in the short term only add to the queues of unemployed. The real economy, which ought to have employed far more of the nation's talented and resourceful people, is now too skeletal to re-employ them in useful capacities. For "Post-Brown", read "Post-Belsen".

JohnAnt

The point is, surely: the expectations weren't legitimate - women were outliving men by a great and increasing distance, and as an insurance class, putting less into the system. It was an unfair inequality, and and unjustified 'expectation'. The historically accrued 'rights' of long term incapacity benefit recipients who suffer from Don't-feel-like-it Syndrome rest on an even more unfair expectation.
Do it Now, Do it Quickly, Do it Radically. Not a bad motto, if they need one.

ukbix

"The historically accrued 'rights' of long term incapacity benefit recipients who suffer from Don't-feel-like-it Syndrome rest on an even more unfair expectation."

You dont get any historical rights on IB, other than it goes up slightly after a certain period of time.

All (except those with the most serious conditions who are exempt) have to regularily prove they are unfit for work.

And there is certainly no mention of any dont-feel-like-it syndrome in the medicals, which are mainly software driven and operated by a third party company (ATOS)

Fraud on ib is around half of one percent.