Osborne’s voteless recovery?

daniel maris

Fraser - There may be some small GDP growth. But remember our population is also growing all the time thanks to mass immigration. So if we have (net) 250,000 extra people come into the country that wipes out the GDP growth on a per capita basis. I don't know why you choose to ignore that basic arithmetical fact.

The feelbad factor is widespread and includes concerns over the attacks on our pension entitlements, real cuts in wages,the lack of decent housing and rampant inflation. This is then contrasted with the sight of Osborne and the Bank of England boss relaxing at Wimbledon, along with RBS bosses...the continued uncontrolled bonus culture...and a feeling that politicians are living on an entirely different planet.

Rhoda Klapp

Recovery, or patchy, fragile dead cat bounce?

Around the family table yesterday were three people who had been employers. One has sworn never to be one again, another pays casually now, and the third is stuck with it, and wondering why part-timers who don't do mondays get bank holiday mondays paid.

Jack Simpson

Fraser, I agree with many of your arguments, but your constant pessimism about my party's re-election chances is just ridiculous. You don't seem to understand the extent to which Labour has lost trust in the economy in a way that it will take years to recover, as was shown by their failure in the local elections to make the gains they should have done and our surprise success. And of course people like a moan about the government of the day mid-term when asked by opinion pollsters, but would they actually choose Ed Miliband and Ed Balls to run the country, when push comes to shove?

William Blake's Ghost

Further spending and tax cuts ain't nowhere near enough to make the difference. Cameron and Osborne said they would fix Broken Britain not just hold off total collapse until the next Labour Government (2015 if we go on like this). They need to face the Elephants in the room instead of lying down and troughing with it. Unless the EU and the Libdems are dispatched there will be no economic recovery but just more inflation and a massive extension of the welfare state with all Brussels's benefit scrounging nations with their basket-case economies being the sole beneficiaries.....

Holly ......

How much of this feeling of being 'worse off' is because we have had credit taken away from us?
We were always this broke, it's just that no one noticed/realised because Bozo & Co hid it from us via easy credit.

Extranea

This is a somewhat simplistic look at a complicated picture.
The re-writing of history over the Major years is ridiculous as he lost credibility within 6 months of being elected and it was Major who cocked up the economy in the first place.
As for job creation - due to the Tory rhetoric before the election, people believed they would halt immigration, but they can't, so the rhetoric will not meet reality basically because they were dishonest.
As for the recovery - exports are growing because of the devaluation of the pound - as soon as interest rates start rising, pain to families and the slowing of exports will ensue. And it is the right of the political spectrum that has been calling for higher interest rates for over a year.
At present, Osborne has not got the backing of the public because he does not deserve it - as you say - he has not done enough for growth and without growth the deficit will remain or get bigger. Truth about the deficit http://bit.ly/dIzmaz
There is still 4 years to go to the finish line - plenty of time for Osborne to produce his tax cut winning 1980's style election win.
http://bit.ly/kBFhNf

JohnPage

You lot keep praising Osborne. But I've seen no sign of this alleged brilliance.

Steve Tierney

>.Osborne doesn’t need a Plan B. But I have been arguing for a Plan A+ in the form of a growth-stimulating tax-cut for the low-paid, <<

I'd go a different way. I'd cut fuel duty by a large amount. Maybe 20p or that 80p you were talking about. Or more.

strapworld

But how does a cabinet made up of millionaires, know what 'ordinary' people are feeling? How does a cabinet that drives around in government cars care about the cost of fuel?

The rise in VAT was a stupid mistake, but Dashing George will not change that. He could reduce the tax on fuel but he wont. He could reduce taxation but he wont. He could even devalue the pound- which would have an effect on trade- but he wont.

He has set his course and he will stick to it. And in so doing lose the election and give Boris the opportunity he is waiting for.

nonny

This is not a vote less recovery because there are no votes. The election is not until 2015.

Wait until closer to the election for tax cuts - Osbourne would be mad to make them now and have nothing but a missed deficit target to show for it.

Axstane

We could also have a low inflation rate if, like Zimababwe, we had 80% unemplyment. Their flattened inflation is due to a simple lack of demand.

Hugo Chav

AA Gill - 29/6/11:

The Labour Party has been holed below the waterline, its New Labour experiment torn down to reveal that the Old Labour certainties no longer exist. It consists of a disparate and bad-tempered group of special-interest wonks, bobbing in the lifeboats of the socialist movement.

The Conservative Party, too, has been routed by the election and the experience of a coalition with the Liberal Democrats. It has jettisoned the old shibboleths, like aircraft carriers, Scottish regiments, monetarism, privatization and neckties.

Both sides seem to realize that for the foreseeable future, it’s going to be about who can stand the longest on the pivot of events and put a smiley face on the fiscal hardships. No one wants the vision thing at the moment, or the testosterone buzzwords of leadership.

All About Empathy

It’s now all about empathy: Changing your mind is the new horizon. The biggest change is that perhaps all of this is a natural consequence of a century of fully emancipated democracy -- political Darwinism, where the extremes die out and the grosser injustices are whittled away. As the differences grow smooth, to stray from the path of the fittest is to court extinction.

Perhaps it’s just a domestic hiatus after a terrible fiscal accident: political bed rest, while the big economic decisions are being made by Brussels, Berlin and Beijing.

Either way, it’s a fair bet that the Conservative and Labour parties that square up behind Cameron and Miliband at the next election will be very different from those that gathered around Thatcher and Blair.

Simon Stephenson.

Holly : 4.19pm

Spot on. There is a problem with distribution of wealth-creation in that too much of it is going to low consumers, and too little to high consumers. Labour's answer was to feed the high consumers with credit, and without some means to write off unsustainable balances, this was always going to be no more than boosting the present by robbing the future. The future is where we now are, and the reduction in living standards now being felt by Joe Public is 100% the result of the policies of the last government, and nothing to do with what the new government was forced to do.

Certainly it could have been possible to make things slightly less bad in the short-term - i.e now - but only at the cost of making things doubly bad for next year and the year after.

I'm not convinced that the government is really prepared to deal with the underlying problem with income distribution, but what it is doing to clear up the mess left by Labour's teen-mentality short-termism is appropriate and hard to criticise.

Simon Stephenson.

Axstane : 5.06pm

Mmmmm. Not so punchy if you mention the 80% unemployment though. And the Hari generation's all about punchiness, you know.

Fex Urbis

Everyone knows the vast majority of new jobs are part time with little job security. the high street is dead, overseas demand for our wonderful goods is falling, living standards are being crushed, GDP growth is sluggish. Zero interest rates are being used to maintain ridiculous asset values.

No Fraser, Osbourne isn't really doing the great job you think he is; but as you have proved time and time again you really have zero understanding of how economics, markets and cycles work.

ndm

Fraser Nelson writes:

-- But I have been arguing for a Plan A+ in the form of a growth-stimulating tax-cut for the low-paid, financed by more ambitious spending cuts.

Is that a cuckoo in the glen, I'm hearing - or just Fraser Nelson?

daniel maris

I feel like I'm pointing out the Emperor has no clothes here. Does no one else agree that with net immigration of 250,000 you need an EXTRA 0.5% growth before you even "break even".

And I agree with John Page. Osborne has shown absolutely no sign of brilliance. He's spread economic fear and gloom across the land - which has worsened the problem.

Colin

Fraser, you should go and have some off the record chats with people who actually know the extent of the personal catastrophes that sit on the "balance sheets" of millions of UK families.

Things are so bad for so many people that nothing short of a large scale debt amnesty and a programme of fiscal stimulation that allows more working people to keep more of what they earn, are the only things that will prevent Greek style unrest here.

The entire fiscal universe in the UK is out of control. Taxes are far too high - for everyone. We are pissing money away on insane schemes such as wind power. Wasting billions on un-winnable wars and sentencing future generations to a lifetime of rectifying the mistakes of political crooks who care more about their personal credibility than the future well being of our country.

I look back over the past thirty years or so and wonder how the f*ck. we ever managed to get along on the fraction of government income and bureaucracy that we have now. When you consider the advances in technology, how on earth can a government possibly consume so much of our money, for so little benefit.

I haven't even mentioned Europe.

One of the basic problems is that too many political crooks have made too many really stupid mistakes, and despite the reality that many of those mistakes are leading us down the wrong roads, they don't have the humility, integrity or common sense to own up and begin to fix things. They all, Osborne included are too shit scared or arrogant to be seen to be capable of making a mistake. Osborne's ridiculous comment on foreign aid is a classic example of political stupidity - how the f*ck does he come back from a ridiculous comment like "the government will not balance the books on backs of the world’s poorest people". What a pr!ck...

We need a full blown political reset in the UK. Even the expenses scandal, which should have seen the back of most of them, had no effect. Like the banks, they're back to Business As Usual - taking the piss out of tax payers...

That's it, rant over. Partagas D4, followed by lie down beckons...

paulg

I have said it before it is no good putting up interests rates to control inflation, the tax on fuel must be cut.

You can buy good from china for peanuts, but food and necessities that you mention are transported around the U.K by lorries, the fuel duty, is an accelerator that is past on to all other goods.

Its inflationary and a ten pence cut in fuel duty will take the sting out of inflationary pressures.

It’s a new way of controlling inflation but it gets to the heart of the problem.

Simon Stephenson.

daniel maris : 7.05pm

"Osborne has shown absolutely no sign of brilliance. He's spread economic fear and gloom across the land - which has worsened the problem."

I am prepared to accept that someone else might have been able to sell the necessity of what has to be done better than Osborne has done. Might have been able to. But the principal reason the coalition is having such difficulties with policy implementation is the attitude of the Labour dinosaurs who are unwilling to accept any responsibility for the creation of the calamitous situation we are in. I appreciate that humble pie is not a particularly delectable dish, but I should have thought that if the Labour hierarchy is serious about its devotion to the wellbeing of UK society, then it would put the lid on its self-righteous carping about measures it would have no choice but to be implementing itself, and which became non-negotiable because of its own misjudgements.

Boudicca

It isn't just Osborne to blame for the voteless 'recovery.'

There's Clarke's attempted libralisation of justice.

Failure to repeal the HRA and the repeated instances of judges deciding that convicted criminals and terrorists must be allowed to remain here.

Foreign aid: borrowing and giving away billions whilst telling us there's no money and the defict must be cut.

Bailing out the Euro. WHT US? Cameron should have cancelled Darling's agreement and told the EU we aren't paying.

Cameron's pro-EU Agenda and supine behaviour every time the Commissars demand something.

Cameron hasn't impressed people who don't normally vote Conservative and he has alienated those who didn't but might if he actually behaved like a Conservative.

This is a voteless recovery because they don't deserve our vote.

Edward Sutherland

Could someone explain to me why Mervyn King, the discredited Governor of the Bank of England,recently received a knighthood? The man has failed miserably; none of our major competitors have anything like our inflation rate. Generals who fail in the heat of battle are sacked; chief executives of failing public companies are sacked; and even half-decent football managers are not immune. But King sails serenely on, forever polishing his letter-writing skills with his all-too-regular letters to the Chancellor, urging all to "look through" the inflationary "blips" in food prices and fuel. But of course those of us without inflation-proofed civil service pensions don't have that luxury!

Simon Stephenson.

Colin : 7.20pm

I've waited a long time, but it's wonderful to read something that indicates that I'm not the only person in the country who thinks like this. Bravo.

Hope you don't mind having me as an ally in thought!

Baron

William Blake’s Ghost & Colin, bravo, boys, bravo, the sad news is though the team running the show ain’t seeing it the way you do, pity, but there you have it.

adding all the taxes the Government collects, the country is slogging for almost six months to satisfy the insatiable demand for cash by the State, as if that wasn’t enough, the Government borrows some more so that the State spends substantially more than the 60mn plus of the unwashed, where and on what?

before you click on the URL below or paste it (you have to also click on the bar graph to enlarge it), have a deep breath, a stiff drink, you need both, the picture will amaze you in at least two respects: the massive borrowings up to 2007 (Brown’s prudence in action), the depth of the recent borrowings (includes the banks’ rescue though), mind blowing stuff, keep in mind there’s a lot of liabilities off the Government’s balance sheet, too….

http://www.guardian.co.uk/news/datablog/2010/oct/18/deficit-debt-government-borrowing-data#zoomed-picture

TrevorsDen

I have never read - from the first letter of the headline to the last fullstop of the last comment (at the time of writing) a bigger load of codswallop ever.

Richard

Simon Stephenson,

But are you prepared to go further back into the origins of this crisis, and award some of the blame to Thatcher and Lawson as well? The policy of deregulation and excessive dependency on the financial sector began in the 1980s. New Labour was at fault, certainly, but their fault was to accept those Tory orthodoxies and do nothing to change them. Rhoda Klapp had it right, I think, when she said recently that Brown increased public spending without taking the political risk of raising taxes to pay for it. Labour was in a position of extraordinary strength, but they still did not dare to try to move public opinion towards accepting some increases in Income Tax to pay for the investment in public services - which virtually everyone agreed was necessary, given the state of our services after eighteen years of Tory underfunding. At that time it is quite possible that the argument for increased taxation could have been won, but New Labour funked it (or didn't want it). Their failure - probably the result of years of media demonisation - was a failure to live up to their own supposed principles.

So the question of blame is more complicated than you suggest. The crisis is Blair and Brown's legacy, certainly, but it is Thatcher and Lawson's legacy too. I suppose one can hardly blame the coalition for trying to heap all the responsibility onto Labour, but it's facile, and it obstructs the serious historical analysis we will need in order to get beyond this mess - an analysis that has to encompass the reasons why so many of our manufacturing industries failed in the second half of the twentieth century, leaving us with an almost uniquely unbalanced economy. I suspect that in the long run the public won't buy the simplistic coalition narrative. Both of our major political traditions are implicated in this crisis. For both to admit as much would be a start.

Andy Leeds

TrevorsDen,

Then you have quite obviously never read a Labour Party manifesto nor an Ed Balls Press Release.

daniel maris

Simon Stephenson -

There are are at least two ways you can shed 20% of employees in an organisation. 1. You can wait for them to retire or move job or die in office until the number has reduced by 20%. 2. Or you can tell all the employees that all their jobs are under threat and indicate you are going to cut the number of staff by 20%.

Osborne chose the second option and the retailers on the high street are now suffering the consequences. It was an idiotic way to proceed but not surprising, coming from such a pampered ideologue, with no experience of how real life is lived (if you exclude acting as the Bullingdon Club's social secretary).

Trying to blame this crisis on the Labour hierarchy is nonsense, given that every leading, mature industrial nation has been through a very similar experience. The greedy bonus snaffling banks were to blame fair and square. They didn't look at the toxic debts they took on. People of limited means can't be blamed for taking credit when it's on offer.

daniel maris

YOu need another update giving the number of people who settle ILLEGALLY each month and therefore don't appear in the figures officially.

daniel maris

This government has no solutions to our economic problems. F Urbis is right to point to the poor quality of a lot of the job creation.

Why - in a country where the per capita income is £22,000 - would you want to attack public sector pensions averaging £4000 per annum? Is that really going to address our economic problems.

Why, if it is clear that mass immigration is acting like dead weight on your economy, would you allow that mass immigration to continue? Remember, each of those 1600 immigrants Fraser refers requires a new flat or house to be built (if not for them then for someone somewhere they displace in the housing market). That alone is a huge investment - probably around £150-£200K in London and the South East. They also need doctors and other professionals to care for them. Maybe add another £10K for that. Capitalist employers pay none of these on costs.

We need to turn our economy round, to refocus on energy independence, an expanding agricultural sector, housebuilding, land reclamation, manufacturing, intensive recycling and reuse, labour reforms (so that jobs go to citizens, not migrants), and improved working conditions (specifically a reduction in the working week).

We need to forget about the financial sector, stop mass immigration, leave the EU and give up on our misguided commitment to free trade.

Baron

Richard @ 8.49:

most things in life are more complicated, we can argue till dawn of the day we get drowned in the argument, the one thing about the recent economic past is undeniably true, cannot be argued, explained any other way, we are in a shite in large part because of one, just one single decision the dour Scot took when he was in charge of the national purse.

you have a peep at the graph in my posting above, the one on the deficit, focus on the deficit from the fiscal year 2000 till 2007, in those seven years the Treasury got almost £3tr in net tax, NI receipts, a truly mouth watering sum, never ever has the inflow of cash into the Treasury coffers been as high as that, in the last 2007 FY alone, before the disaster struck, the intake stood at over half a trillion (check, the URL is below).

and what did the now sulking man do? He borrowed on top of it nearly another £200bn.

if he just spent what he got in the massive tax receipts (no borrowing), we would have a current deficit running not at the annual £150bn but around £60bn, bad, but manageable and without the pain the country is going through now.

that, my blogging friend, is unarguable, it’s a fact.

http://www.guardian.co.uk/news/datablog/2010/apr/25/tax-receipts-1963

oldtimer

There is no doubt that the present financial crisis occurred on Labour`s watch. The problem is that the coalition government, finding itself in a hole, just keeps on digging. This manifests itself in spending commitments that are wholly unjustifiable in the UK`s fianncial predicament. Obvious examples include the increases in the aid budget, the Climate Change Act/Carbon Plan, open ended military adventures and failure to curtail commitments to the EU, to name but four. The present political leadership of all the main parties share responsibility for this. The daily petty squabbles of these politicians are contemptible to behold.

Simon Stephenson.

Richard : 8.49pm

Yes, I'll go along with a lot of what you've written. Financialisation has been shown to contain far more demons than was first envisaged. I think this is down largely to an unwillingness of Mr Average to accept that every human has the capability of pursuing self-interest through doing wrong - I just don't think that more than a few people realised that minimally regulated financial development would have the effect of giving a carte blanche to the plundering of all the wealth created outside the financial sector.

I'm sorry, but if Mr Brown made the decision to increase public spending without the intention to raise the revenue to pay for it, then this was an act of gross irresponsibility. I personally don't think this is what happened. I think Brown intended to move us from 35% public sector to 45-50% public sector by creating a structure tha was so difficult to unravel and reverse that there was no practicable option other than to raise the tax level to fund the budget deficit. With never a mention of this intention to the electorate, of course, of whom fewer than 10% would have been in favour. It may yet prove to be impossible to prevent him from succeeding in this ambition, in which case he deserves to suffer the same fate as one of his countrymen, William Wallace.

"Virtually everyone" did not agree that public services needed "investment" after "eighteen years of Tory underfunding". Virtually everone in your close circle, perhaps, but not generalised over the country.

Blame media demonisation if you like, but if Labour were intent on massively increasing the scope of the public sector they were duty-bound to ensure that this was sustainably funded. They didn't do this.

This present crisis is only Thatcher's and Lawson's legacy in so much as succeeding governments failed to tackle the distortion of financialisation. The Major, Blair and Brown governments each had the opportunity to take measures to tackle this, and each of them failed to do so. In fact, Brown's policies under New Labour were to exacerbate the malignancy of financialisation, as he glorified, championed and de-regulated the sector he saw as little more than a tax-cow.

I agree that both our political traditions have made some pretty poor decisions over the last 30 (50?) years, but the deficit/debt crisis that we are in now is nothing to do with past Conservative governments. The mess that Labour created cannot be attributed to any inheritance they were left. Neither Thatcher, nor Lawson, nor Lamont, nor Major, nor Clarke told them that they couldn't fund increased spending with tax increases. This was a decision Labour took all on its own, and in so far as the present crisis is due to unfunded public sector commitments, the responsibility for this is all Labour's.

Baron

apologies, the penultimate paragraph of my last posting @ 9.45 should read:

if he just spent what he got in the massive tax receipts, and saved the amount he borrowed (some 6% of tax receipts in each of the seven years), we would have a current deficit running not at the annual £150bn but around £6obn, bad, but manageable without the pain the country is going through now.

daniel maris

Baron -

Your sums don't sound right.If he was borrowing £200B at say 5% per annum, that would be £10B on the deficit. I think you are confusing deficit with debt aren't you? HOw does that end up as £90B added to the deficit?

david

George Osborne will come up with a big vote winner, unsurprisingly, one year before the election. Big drop in income tax (for low and high earners) or some such. The economy will be firmly out of the mud by then so we'll all feel a bit better, and know where to place our Xs. It doesn't take a genius to work this out, nor to understand that there's got to be an austere few years leading up to this.

Richard

Baron,

That massive increase in 2007/8 (yes, it is staggering) was primarily to pay for the bailout of the banks, wasn't it? Are you arguing, as some neoliberals do, that RBS and the others should have been allowed to go under, with all the consequences for ordinary high street savers (who still thought of it as nice old National Westminster - I'm one of them)and for the economy? If so, you should come out and say so. The Tories did not argue for tighter regulation or for the separation of high street and speculative activities at any point in the lead-up to the collapse.

Simon Stephenson,

I can't dispute the severity with which you castigate Brown and New Labour. As a supporter of social democratic politics I feel very bitter about the wasted opportunity of 1997-2007. If John Smith hadn't died when he did... (wishful thoughts).

But I can't agree that Conservative governments bear no responsibility. They set up an experiment in which manufacturing industries were allowed to disappear and the financial sector became so structurally important, and they allowed public services to deteriorate to a point at which increased funding became a political imperative. Remember the leaky school roofs? Remember the 2001 election in which the biggest challenges to Blair were an angry NHS patient and an independent campaigner against a hospital closure in Wyre Forest? It wasn't just my circle, whatever you think that is, that demanded restoration. Opinion polls show an enormous increase in satisfaction with the NHS in the New Labour years. The Tories deregulated the City, and always denounced any suggestion of increased regulation. RBS and the other collapses are a direct consequence of those 1980s policies, which New Labour did nothing to reverse but did not invent.

Middle Class Loser

We must have plenty have money. The man who cares, the king of smug sanctimony, the fake emoter, Andrew Mitchell has announced another £38M (stolen from my pension) to be given away to another African country. By his rhetorical logic I should send every penny I earn, via DFID of course, to someone somewhere in African or Asia.

Why don't Ministers send their salaries first? By the way, MPs pensions and pay - taking the same hits as everyone else? Thought not, apart from a hasty, meaningless soundbite of intent from Cameron just before the strike last week. Osborne and Cameron hate the middle class, especially those in the public sector.

Fergus Pickering

The NHS was much better VALUE in 19997 than it is now. It wasn't as good but it was much, much cheaper.And education was at the very least no worse than now. And much cheaper. The Tories ALWAYS give you better value for money. I think Brown actually BELIEVES a lot of the crap he spouts, including that one about all public spending being investment. In otherwords I believe that Brown is not so much a knave as a born bloody fool. Whatever Cameron is, at least he's not that I do think our leaders ought to be bright. Labour haven't had a really bright spark since Harold Wilson, though at least Sunny Jim wasn't a fool. Mandelson wasn't, and isn't, a fool either. He would have made a better PM that either Blair or Brown. In my opinion. Cameron is better of course because he isn't a socialist. I've no idea what a Tory is, so I don't know whether he's one of those.

Roy

The typical politician in his wood paneled office would not be too concerned about the wood worm slowly munching through the attractive grain. It would be worth a bet that even they are immigrants.

Mike Stanley

I am not sure whether the the exchange over settle and arrive makes much difference in practice. I worked in immigration for many years and saw on so many occasions that to arrive was to settle despite attempts to stop this. That's why we have such a big operation in Calais - stopping arrival.

Baron

daniel marries @ 10.35:

the borrowings each year are the deficit each year, the £200bn is the cumulative amount of borrowing between 2002-2007 (it’s just over £190bn, I was using round figures), of course when added to the borrowings from previous years, the running total of the national debt, it also is a part of the debt.

the cost of the borrowing, your ‘say 5% per annum’ is important, it has no part in my argument, the deficit is what the government has to borrow each year to balance the books i.e. it’s the shortfall between its tax receipts and its expenditure; the debt is the cumulative amount of the annual deficits, the totality of bonds, gilts issued by the government that haven’t matured yet, on which the government pays the fixed interest (coupon), whether the interest is paid each year from taxes or from the borrowing is immaterial, it’s part of the government annual expenditure.

the simple argument, I’ve still managed to mess up though, is that Brown had more than enough to play with from taxation, he shouldn’t have borrowed anything between 2002-2007, instead, he should have saved roughly 6% from the tax receipts each year, if he did, our borrowings after the near meltdown would not have been running at £150bn each year, but around £60bn.

Richard @ 12.21:

yes, you right, a large chunk of the borrowings is to bail out the banks, and if I were to argue anything on the expected Vickers proposal to separate retail from the rest, it is that it will reduce the availability of credit, will make it also more expensive; the great unwashed in their blissful ignorance dislike the banks, hence will welcome the separation, what nobody tells them is that it will cost them more on mortgages, loans and stuff, they will be harder to get, too.

Simon Stephenson.

Fergus Pickering

Yes, the New Labour method is out of the same stable as the US approach to winning the war in Europe in 1944/45 - attack the enemy everywhere, and keep pumping in resource until he is overwhelmed. The criticism of this approach is that there are different qualities of victory, and that the really smart approach is to ensure that your victories are as far from being pyrrhic as it is possible to get. But to adopt the really smart approach, you need to be really smart to start with, and I think you are right that New Labour has largely been under the control of intellects from the plodding faction.

You may be interested to read an article by Frank Furedi, dealing with education policy under Labour, written just before last year's election:-

http://www.spiked-online.com/index.php/site/article/8309/

GDT

Baron,
perhaps restricting credit to the masses is the first step to restoring financial sanity?
If we can get the 'Everyday Joe' to live within his means, perhaps he may then ask, "why isn't my Government doing the same?

Scary Biscuits

@Daniel Maris 9.15 pm, if you need to cut staff you either do it by (1) natural wastage (wait for them to die, retire or move) or (2) you fire them. You say that Osborne has chosen option 2 and that is because he is an idiot with no experience.

First Osborne hasn't chosen 2. The cuts to the government payroll are nothing like 20% and there are very few compulsory redundancies. Second it is only in the state sector that option 2 could ever even be considered. If you run a private company and you find you're massively over-staffed, can't wait for natural wastage - you'll be out of business long before then. It seems that Osborne isn't the only person without 'real world' experience, Mr Maris.

Percy

@david

Wow, it's that easy is it.

Richard

Baron,

You still haven't said whether you think the banks should have been bailed out or allowed to go under. If the latter, what do you think the consequences would have been? If the former, what was the alternative to that massive hike in borrowing?

Fergus Pickering,

Whether the NHS in 1997 can be seen as better value for money than the NHS now depends on what one values. What else, more valuable, should the money be spent on?There was widespread anger at the time, and the wide acceptance that funding increases were overdue was an important factor in Blair's huge victories in 1997 and 2001. My regret is that Labour did not attempt at that time to argue for Income Tax increases to pay for the increased funding. They should have attempted to shift public assumptions away from the tax-cutting agenda the Tories had entrenched. Instead, they did too much by stealth - too intimidated by the years of defeat and denigration, I guess.

Why Labour now doesn't point out that the crisis is Thatcher and Lawson's legacy as well as Blair and Brown's, I don't know - well, I do: it's because they would have to admit that a central part of the New Labour strategy was disastrously wrong, and that Labour in its years of strength remained in thrall to Tory assumptions. I hope they'll get there. If the coalition goes on goading them so unfairly they just might.

There is a moral problem about the policies being pursued now. People on ordinary incomes are being asked to accept serious long-term damage to their living standards, while the very wealthy are making no similar contribution. If the Tory position is that this is unfair but unavoidable, they should come out and say so. It might be right to expect 'Joe Public' to live a bit more within his needs, but the context is that all the years of growth produced huge increases in wealth at the top and nothing much for the middle and low income groups. This situation was masked by the use of credit. That's why Joe was living beyond his means. If people are going to accept these cuts now, they will need, in my view, an account of how that disparity is going to change, and how the wealthy are going to make a proportionate contribution. Otherwise, it's just a rip-off.

Augustus

"There is a real danger that Osborne does not fully appreciate the danger of inflation, or the misery it inflicts."

Or even how those who keep their jobs respond to the 'feel bad recovery factor',
i.e. when price rises exceed their pay rises, if any? Which, btw, is not inflation
(despite what the media constantly scream at us). Inflation is when those price rises
start showing through to pay rises not funded by productivity gains. What we are currently seeing is a change in the relative price of goods, which is something quite different. That is not to say that it doesn't impact, of course, on everyone's cost of living.

Fergus Pickering

Richard, value for money 'depends on what one values'. No it bloody doesn't. Value for money depends on what you get for your money. In 1997 for x money we got y benefit. Now, for 3x money we get only 2y benefit. Or are you suggesting that we really get 4y benefit. Tell us what it is, this extra benefit that no-one (except you) has managed to quantify. But I expect you are happier spouting pious, meaningless platitudinous claptrap. That's what you socialists do, isn't it?

BenM

Er, what recovery?

On qarterly figures the economy is currently behind where it was in September 2011.

Fraser Nelson's obsession with inflation when unemployment remains the greatest risk we all face is quite, quite mad.

Scary Biscuits

Richard, answering on behalf of Baron, I think the banks should have been allowed to go under. I don't think the scare stories painted by the bank management would have happened. There's a well established route for companies that get into trouble: administration. For some reason their management convinced the government that it shouldn't apply to them. However, if the banks had gone into administration, the clearing system and functional side of banking would have continued and a government guarantee of this side only would have been much cheaper. Bond holders - the ones who effectively gambled on a bailout - would have been wiped out and deservedly so. All the directors would have lost their jobs and new management would be in place. The banks would have been out of administration by now with new owners and healthy balance sheets. Lending to small businesses would have resumed and interest rates could have risen to more normal levels, keeping inflation down without suffocating growth.

As it is, the zombie banks stagger on requiring more money printing, negative real interest rates and endless bailouts -Greece (effectively another bank bailout) being the most recent but nobody believes it will be the last.

HJ

Richard: "But I can't agree that Conservative governments bear no responsibility. They set up an experiment in which manufacturing industries were allowed to disappear and the financial sector became so structurally important"

This simply isn't true. If you care to look at the figures, from 1979 to 1997, manufacturing output grew by around 20%. After 2000, manufacturing output (which had been growing strongly) stagnated, before falling sharply in the recession. Overall, under the Labour government of 1997 to 2101, manufacturing output declined by 10% - unlike any other G8 country (albeit reliable Italian figures are hard to come by).

It was the recent Labour government that diverted resources from the parts of the economy where productivity was growing strongly (i.e. principally the private sector) towards those where it wasn't (i.e. principally the public sector) and it stoked a credit boom and relied on taxes on banking profits to keep the economy and its programmes going. It couldn't last.

So you're wrong to say that the Tories were responsible for creating an unbalanced economy - the economic figures were very strong when they left power (way before the banking boom) and we even had trade figures in balance. The change happened AFTER the Conservatives left power.

Percy

Well Osbourne could have always asked Sir Merv for some valuable advise but sadly Sir Merv can't seem to be bothered going to the office for long spells at the moment and prefers watching sport.

Still why not, Sir Merv never saw the crash coming and is hardly likely to be the one with any good ideas to get us out of the mess we're in.

Richard

Fergus Pickering,

I'll ignore the abusive stuff - it's often a sign that someone is rattled by an argument.

You are the one claiming to be able to quantify the benefit, with your x and y, 3x and 2y - purely arbitrary quantities. I am talking about the value - and it may be life or death value - of shorter waiting times, more frequent tests, additional staff and so on. How do you put your x and y measurements on that?

Scary Biscuits

Richard, however distasteful you find it you nevertheless have to try to quantify benefits: within a nationalised health system it is the only rational way of deciding where to spend money and where not. You're trying to make an emotive argument but in a world with limited money you've got to draw the line somewhere. It's a sad fact that human life doesn't have infinite value and that every pound you take away from a taxpayer to save or improve somebody else's life diminishes the life of the taxpayer. Paradoxically, the millions trapped in poverty with low life expentancy might lead longer, healthier lives in less was spent on the NHS - if lower tax rates could enable them to get jobs.

Just because Conservatives are more likely to make the rational argument, it doesn't make them evil. In fact they may be more caring than somebody who wants more spending on the NHS. The debate of the NHS increasingly resembles one of medaeival religion, e.g. where Machiavelli or Newton were criticised for using their heads and thinking about things logically without prejudice.

HJ

Richard -

Many of the things that you (or I) might find desirable do not produce any financial return (such as care for terminally ill old people). This is not to say that we shouldn't have, or fund, such care.

However, it is a problem if the government directs too great a proportion of our resources to such areas. This is because, to do this, resources must be directed away from other areas which would produce a financial return. You might think it heartless of me to say that 'financial return' is more important than care, but if we ignore financial return, we neglect economic growth - and where do you think that the wealth to fund such care is generated from?

The problem in recent years is that government has consumed an increasing proportion of our wealth, for very little return (even on the government's own figures, public sector productivity has fallen, whereas that of the private sector has grown substantially). You might say that in the area of care, productivity is hard to measure and hard to improve. True, but that simply means that if we direct too great a proportion of resources to it, then we will be poorer through lower growth. If we are poorer through lower growth, where is the money going to come from to fund such care? So, paradoxically, diverting too much money to desirable, but non-productive (economically speaking) activities will actually result in those areas being worse funded in the longer term.

The problem, of course, is that a judgement on how to allocate resources is always poorly performed by government as it simply cannot know or reflect individual preferences. This is why many of us favour much smaller government.

Richard

Sorry - I think the post I've just sent may appear three times; something went wrong.

Scary Biscuits,

Your view that the banks should have been allowed to go under means that your only disagreement with the Brown government about this crisis is that you think the bailout was wrong. If you are right that the transition would have been smooth, with no loss of savings for ordinary customers, no run on the other banks and no flight of investment - no systemic collapse, in other words - then the big hike in borrowing was unnecessary. There would have been no crisis. Borrowing levels would have remained higher than you would like, perhaps, but not outside the normal historical range revealed by Baron's graph. So, for you, we aren't arguing about public expenditure generally, just about the wisdom of the bailout. It would be interesting to see a leading politician take this line.

Richard

Basically, I was admitting that you had corrected me, partially. According to the FT, anyway, manufacturing as a share of output declined under Thatcher and then declined much more sharply under New Labour (up to the crunch):

I wasn't attempting to defend New Labour's record in relation to this, but rather to argue that New Labour continued, and even accelerated, policies begun by the Tories. The same is true of the deregulation of the financial sector. Lawson's 'big bang' was a crucial moment of culture-shift, which New Labour did nothing to change. That policy of deregulation is clearly implicated in the present crisis, and it was in the first instance a Tory policy.

Is anyone willing to comment on the moral problem posed by the current policy of making people on ordinary incomes bear the burden while the wealthiest make no proportionate sacrifice? Is it a case of 'unfair but unavoidable'?

Baron

Richard, on bank bankruptcy, I am in Scary Biscuit’s boat, in the capitalistic system no physical person, legal entity should be protected from going bust, this is one of the fundamental tenets of capitalism, you remove it permanently, the system’s breaks down irrevocably, guaranteeing the banks immunity from failure is reminiscent of socialism, and as Winston pointed out ‘the inherent vice of capitalism is the unequal sharing of the blessings. The inherent blessing of socialism is the equal sharing of misery’. The last thing we want is the equality in misery, right?

still, it may well have been the politicos got scarred having seen what the collapse of Lehmans did, decided to go for the other option, bailed the banking boys, having done so, they should have then told the banks, ‘look, you have five years to re-structure your balance sheet, come 2015, you’re on your own, you misbehave, go wild, things turn nasty, you go bust, no more bailouts’.

simultaneously, bank depositors should have been told, ‘listen, come 2015, the taxpayer will guarantee not a penny of your money deposited with banks, you go, get advise, but if you put all your savings into a bank, the bank goes belly up, tough titty, no help from the taxpayer’.

sounds barbaric, uncaring or whatever to you, does it? Perhaps it does, but one cannot get the smooth of capitalism without the rough, life’s fugging tough, there ain’t such a things as free lunch, there shouldn't be free guarantee of one’s cash either.

Baron

and another thing, Richard, HJ, Fergus and Scary Digestable also right insisting one quantifies things, demanding to get the best return on the cash the Government is spending on our behalf, it’s our cash to start with, they merely facilitate its use, the option I prefer, not only when it comes to my care when I get decrepit, on many other services, too, a tax rate across the board of about a third of what we pay now, and everyone arranging for one’s needs oneself, it shouldn’t be left to some ‘we-know-best’ apparatchiks to look after us, if we allow the State to do it for us, we, not the State, are the losers.

Thomas Jefferson got it spot on: “A government big enough to give you everything you want, is strong enough to take everything you have”.

By the look of things, we’re getting close to the final outcome of what his wisdom suggests is likely to happen if we keep on shouting ‘the Government should do this and this and this….

Dimoto

P.S.
"As Sir Mervyn King put it, the average Briton is suffering the most sustained attack on living standards in 80 years".

A MervynKingism.
Attack ? What attack ? Who is attacking ?
The damage was done years ago Mervyn ... or do you mean YOUR attack by overseeing high inflation ?
Ridiculous choice of words.

daniel maris

Baron -

1. You certainly have not explained your financial calculations at all. I suggest you restate the point you were trying to make again clearly point by point, because I don't find your "clarifications" convincing either.

2. Life is tough? For whom? Bankers? Children with trusts to watch over them? People who inherit mortgage-free properties? Do me a favour. Life is tough for some people, unspeakable for others, and a doddle for a small minority.

daniel maris

Ben M. makes a good point. No evidence yet of a recovery. Especially if we factor in the additional 250,000 people who, through mass immigration, we have to let share in our GDP (disproportionately so since they all need housing).

HJ

Richard: Basically, I was admitting that you had corrected me, partially. According to the FT, anyway, manufacturing as a share of output declined under Thatcher and then declined much more sharply under New Labour (up to the crunch):

I wasn't attempting to defend New Labour's record in relation to this, but rather to argue that New Labour continued, and even accelerated, policies begun by the Tories."

That is nonsense. Manufacturing as a share of the economy has declined in ALL major advanced economies - including Germany. So it was nothing to do with Tory/Thatcher policies.

However, it was still growing in absolute terms under the Tories and continued to do so until Brown's spending spree started around 2001, after which it stagnated and then fell. The figures are starkly clear about this.

daniel maris

Scary Biscuits -

You seem unable to appreciate fine distinctions. If you look at my post I say Osborne effectively chose the option of telling the whole of the staff their jobs are under threat. That had an immediate cooling effect on the economy. As for the likely reduction in the government payroll I never said there was going to be an immedaite reduciton of 20% in the payroll but something like that will be seen in any many parts of the public sector over the next 4 years.

However turnover the civil service is pretty high - you could I believe have achieved something like a 20 % reduction through natural wastage. After all, retirement must account for something like 4% a year.

Simon Stephenson.

daniel maris : 7.03pm

No, of course there's no recovery yet. We've not only the late-00s recession to restructure out of, but also the recession that should have taken place in the early 00s, which the deployment of Brownomics kicked into the future, at an astronomical cost to the people living in that future - i.e. now and the next few years.

You really have to accept that all the good times we could have been having in the first half of the 10s are having to be cashed in, because we had far more good times in the 00s than we could pay for out of our income at the time.

daniel maris

Simon Stephenson -

You appear to be looking at economics as a lesson in morality, which is the one thing it is not!

As far as I can see most of the long-industrialised countries have gone through v. similar narratives over the last few years. But countries like Germany are pulling out of the recession much more effectively than is the case in Osborne's patch.

This Wikipedia list by the way shows that the UK's public debt is actually far less than that of Germany, France, Italy and Belgium as a percentage of GDP.

http://en.wikipedia.org/wiki/List_of_sovereign_states_by_public_debt

daniel maris

Baron -

Well I suppose Thomas Jefferson wouldn't have wanted big government interfering with his slave plantation (though he wasn't beyond interfering with the slaves).

I don't think people expect government to do everything for them, but I think people expect in a country with perhaps £22,000 per capita income to have some opportunities in life.

As someone above pointed out there is a feeling abroad that the pain is not being shared out and that people at the top end are getting off very lightly. There is no excuse for the bonus culture. At least Patten is doing something about the absurdly high salaries at the BBC - there must be 10,000 people in the country who could operate such an organisation just as competently as Mark Whatisname. But we need to tackle the asburdly high salaries of bankers and others as well.

Richard

HJ,

The chart in this article shows a steady decline in manufacturing as a share of output from 1980 through to the present, and a corresponding increase in the share taken by the financial sector.

http://www.bbc.co.uk/news/10557724

Yes, other developed countries also had declines in manufacturing, but most did not build up the financial sector to the same extent as Britain. That, many commentators say, is the reason why Britain was especially vulnerable to the crisis in that sector, and presumably it is why the bailout was thought to be necessary. These trends were in place before New Labour came to power. I am not suggesting that the Conservative tradition is wholly responsible either; merely that it is unfair and facile to place all the blame on the Blair-Brown government. Would you deny that deregulation of the banks was an important factor, and that this was a policy with much more of its origin in Tory thinking than Labour? And what do you say about the unfairness of the distribution of the pain now?

Simon Stephenson.

daniel maris : 10.00pm

Remember Brown coming over all superior with continental Europe during the early 00s, when Europe was going into mild recession, while Brownomics had kicked the same recession into the future as far as the UK was concerned? Well, this is the reason why we are having more difficulty recovering - because we have the misallocations of 15 years to work out of our economy, whereas the likes of Germany have already dealt with the first 10 of these.

One of the principal stumbling-blocks to recovery is private indebtedness, and the current effect of what was one of the keys to Brownomics - the loading of the high-consumers with more and more debt. Not only did this inflate activity way above sustainable levels, it also pushed high-consumer debt levels beyond that which could be maintained when the bubble burst. So there's a double downward whammy - not only are high-consumers unable to increase debt levels every year, which would make things comparable with the pre-crunch situation, they are actually having to decrease debt levels from a peak that is unsustainable.

Brown was either a villain or a chump - I'll leave you to decide which.

daniel maris

Simon Stephenson -

I don't want to let Brown off the hook. He is particularly to be held responsible in my view for bolstering welfare dependency.

However I don't think his performance is markedly worse than we saw in the Thatcher and Major years. I agree with Richard that there has been a long term trend to develop financial services in this country and I don't think it's as good for us as people make out. It sucks in a lot of people from abroad which creates infrastructure pressure in London and the south east and it made us especially vulnerable in the recent recession, since the crisis was centred on banking.

I do maintain that Osborne frightened everyone witless in the Autumn and that hampered the recovery. I certainly predicted the slow down in the economy whereas most commentators here were saying the economy would be on the up.

I think we need a structural shift back to manufacturing and forwards to energy independence, increased recycling and reuse (makes huge economic sense in a country with sparse raw materials), and more emphasis on science and technology.

HJ

Richard -

You are entirely missing the point - only under Labour did manufacturing output stagnate and decline. It grew under the Tories. So Labour did not continue a trend started by the Tories - they caused a change in direction.

Given that half our exports (still) are of manufactured goods, you see why we have a huge trade gap. There is/was no problem in the financial sector expanding. The problem is/was the decline of manufacturing as it reveals what happened to our international competitiveness (as manufacturing is more subject to international competition than any other sector).

Yes, I do deny that supposed deregulation of banks was an important factor in recent problems. We didn't see much deregulation - we saw new, larger (the FSA employs thousands) and incompetent regulation in recent years. The underlying problem, of course, was a credit boom, which covered up the lack of real underlying growth,

HJ

Richard:

"Yes, other developed countries also had declines in manufacturing, but most did not build up the financial sector to the same extent as Britain."

Which other countries had declines in manufacturing? As far as I'm aware, no other G8 country (the possible exception being Italy where reliable figures are hard to obtain) had any decline in manufacturing output since 1997. Manufacturing output grew in other countries.

Also, if you look at our financial sector, it is not that much bigger as a proportion of GDP than, for example, Germany's. Most of any country's financial sector is domestic. We just have a bigger international financial sector, which amounts to about 2-3% more of GDP than countries like Germany. This is a good thing.

Richard

HJ,

I think it's clear now that you are talking about output and I am talking about share of output. Perhaps the way I worded the point initially was the source of confusion; if so, sorry for that.

Were the Tories calling for tougher regulation and a separation of high street and investment banking before the crisis? Were they calling for cuts in public spending?

One of the most serious political and moral problems of this extent of reliance on the financial sector is that it creates this class of the untouchable super-wealthy. Living standards for middle and lower income earners have not improved much over the 'good' years, and the gap between these groups and the super-wealthy have widened further and further. This is one of the reasons for the private indebtedness you depolore - the attempts of these middle and lower groups to mask their own stagnation. One doesn't have to buy the whole 'Spirit Level' argument to see the problems this brings. Now we have a crunch, and it is plain that the super-wealthy are not being expected to pay in the same proportion as others much less able to afford it. Whether or not you think this is a moral problem - you're silent on that - it will be a serious political problem that won't go away. It's not as bad as Greece, but the anger is essentially for the same reason. Why can't City salaries and bonuses be brought into line with normal remuneration? Because it would drive those industries away, is the answer we always get. Perhaps so - but if we were not so dependent on that sector, we would not be so much the prisoner of that argument.

This is primarily the culture that Thatcher made. The 80s was the decade when concerns with social justice and equality were downgraded in favour of neoliberal free-market arguments, and no reversal of that shift took place under New Labour. Mandelson's comment about the government being intensely relaxed about people getting filthy rich was an effort to prove the government's neoliberal credentials.

Simon Stephenson.

Richard : 11.17am

I think you are probably right that income/wealth distribution has widened considerably, and that financialisation has been one of the avenues which has facilitated this social change. But we have just had thirteen years of a Labour government, for heaven's sake! Thirteen years in power for a party nominally constituted to support the poor and downtrodden - and what has happened? Nothing helpful has happened, that's what. In fact, most of what's happened has been distinctly un-helpful to the poor and downtrodden, with nothing more striking than prohibiting the State education system from providing the means for partial upward social mobility - because this is "unfair" to those who don't achieve its requirements for entry.

If you are to excuse Labour 1997-2010 by blaming their predecessors, you must establish that the causes of our malaise are the result of earlier incompetences which Labour, in their thirteen years, had no possibility of rectifying. The subject is could/should Labour have done better, but it appears that you are so uncertain of your ability to defend Labour in this respect that you have to resort to the diversion of attempting to change the question to "was Labour any worse than its predecessors?" There's no purpose in having this discussion unless it is linked into an honest appraisal of exactly how bad the relevant governments were - and if the starting point for you is that the Tories must have been at least as bad as Labour then there's no possibility of getting anywhere worthwhile.

Richard

'But we have just had thirteen years of a Labour government, for heaven's sake!'

Yes, I know. That's the pity of it, for people like me. They changed so little, and in some ways pushed the neoliberal thinking further, like Clinton in the US. New Labour did some important things to help the poorest - Sure Start, for example, and the general increase in funding for health and education. But they did nothing to challenge the neoliberal assumptions, and at times tried to outflank the Right on the tax-cutting agenda, or at least seem to. A whole generation of Labour leaders was so intimidated by the eighteen years of defeat and press demonisation that they internalised many of the values that were so triumphant in the 80s. Labour was like Macbeth's Scotland - almost afraid to know itself. They really came to believe that there was no alternative. People who are defeated and intimidated into internalising the values of those who defeated them often become more zealous in pursuit of those values than the original victors were.

And now, having prospered from positive triangulation, they suffer from negative triangulation, unable to renounce neoliberalism because of their history of complicity with it. Until they break through that barrier somehow, we will be stuck with the strange historical irony of a catastrophic consequence of Thatcherite ideology having brought a Tory government to power.

Am I being superficial, and understating what New Labour achieved, or the difficulties they faced? I'd like someone to step up and make their defence, though this probably isn't the place to look for that.

daniel maris

Well this has been quite a fascinating thread.

It will be very interesting to see how things develop in the next year. If we don't see an upturn but Germany and other comparable countries continue to do well, then the terms of the debate will change dramatically.

My views are:

1. The recovery is being hobbled by mass immigration because each new immmigrant requires a huge infrastucture investment (mostly housing). This is going to express itself before long in a housing crisis of unparalleled proportions.

2.So much demand has been taken out of the system by government policies and inflation that the recovery will stall. This may not become apparent for a year or two because I think redundancy payments are slightly disguising the effects at the moment. BUt I've been surprised at how bad the retail recession has been - so it may be worse than I thought.

3. The really big question for me is whether a new economic model, based around green energy, maximised recycling, increased agriculture, and a renewed emphasis on manufacturing, science and technology might be on offer. I think it is, especially if tied in with growth in co-operatives and employee ownership on the John Lewis model.

One other thing: I think we should put in some trip wires to stop a repeat performance at some future date. We should have some statutory limits on public indebtedness, and some statutory measures to stop immoral "eat the future" PFI projects.

HJ

Richard:

"Yes, I know. That's the pity of it, for people like me. They changed so little, and in some ways pushed the neoliberal thinking further, like Clinton in the US. New Labour did some important things to help the poorest - Sure Start, for example, and the general increase in funding for health and education."

How can you classify increasing the size of the state to 50% of GDP as 'neoliberal'?

You should read the only large scale assessment of 'Sure Start' by the CEM at Durham University:

"Early years’ initiatives, such as Sure Start, are failing the poor, eight-year study shows:
Early years initiatives for pre-school children are not delivering improvements in language and numeracy development, according to leading education experts. Experts, conducting one of the largest surveys to date of the development of 117,000 children starting primary school in England over eight years, found that despite a raft of early years' initiatives, such as ‘Sure Start', basic levels of development in early reading, vocabulary and maths have remained largely unchanged. Researchers from the Centre for Evaluation and Monitoring (CEM) at Durham University who conducted the study say the findings highlight the need for a review of early years' initiatives and whether they are reaching those children most in need, particularly children from disadvantaged backgrounds."

The recent OECD report says that educational standards haven't improved at all in the UK in the last decade (the improvement in apparent results being all down to grade inflation according to the OECD).

NHS productivity has declined, according to government figures.

So the money has been largely wasted.

Richard

Why do I call them neoliberal? Increasing wealth gap, City free-for-all, full or partial privatization of public services, perception of education as purely for the sake of business and employment, refusal to repeal anti-union laws, low corporation tax, failure to renationalize railways, failure to act on global warming, failure to argue for higher taxes to support services, failure to reduce class sizes in schools, support of economic globalization through free trade agreements, subservience to US foreign policy...

On the points you mention - I'm no expert on this, but a quick trawl shows that evaluative studies of Sure Start differ about its effectiveness, and I'm sure we could have a long debate about what 'productivity' in the NHS can mean.

But we're on the third page now, and everyone else has probably gone home. Just out of curiosity - is there anything at all for which you are willing to give them credit? All of the above, I suppose.