U.K. Chancellor of the Exchequer George Osborne is of course a svelte young product of Oxford University. And yet, for all that, tomorrow he’s going to look a lot like a fat lady singing.

 

For on Wednesday we’ll finally see his comprehensive spending review, the bonfire of the State his government was elected to set alight. The public sector will be asked to make the ultimate sacrifice for Queen and credit rating by shrinking itself, probably by more than 80 billion pounds, with the aim of completely eliminating the U.K.’s horrible structural deficit.

 

Politically and socially this is going to be a watershed in U.K. life unseen since the Thatcher years, but what will the markets make of it? Well, they should be pleased–after all they asked for it.

 

Before the general election back in May swept the spendthrift Labour administration from power, it was getting tough to find anyone financially literate with a good word for the U.K. Jim Rogers said we were ‘finished.’ Pimco said British debt was sitting on a bed of nitroglycerine. The ratings agencies were restive and the U.K.’s long stint at the triple-A top table seemed to be coming to an end.

 

This sort of talk has died away since, but there’s a sense it’s only done so while investors waited for Osborne’s scythe to fall.

 

So assuming the markets are convinced he’s actually hacking hard enough at State spending, what happens then?

 

Well, if the Bank of England decides on more quantitative easing to offset the loss of public sector vigor, then the pound should weaken; good news for manufacturers everywhere. Gilts would of course find support from the same thing; nothing lifts the spirits like a backstop buyer with deep pockets.

 

Most U.K.-listed blue-chip stocks are famously indifferent to their home nation’s economy, which most of them long ago outgrew. Their head offices may be in London, but their revenue is generated all over the world.

 

There has been some of the usual muttering about punitive tax regimes making it better to domicile business elsewhere, but we heard a lot of the same talk back when business supposedly wanted the U.K. to join the euro. It didn’t, and nobody moved.

 

Of course, further down the scale, more U.K.-focused stocks may fret at the threat to growth presented by a shrinking state, although it remains to be seen whether or not the private sector can fill the employment gap.

 

One hopeful historical point is that it did last time. According to ING Bank, some 900,000 public sector workers were laid off in the 1990s, more than seems likely this time. The private sector, however, created over 2 million jobs by way of compensation. That sort of job creation seems less likely this time, but equity markets will just have to wait and see.

 

There could also be some benefit for the U.K. in cutting public spending first and hardest. Osborne and Co. may well feel this isn’t a game you have to be objectively good at, just better than your neighbors. A look at this week’s French strikes, over far less draconian fiscal measures than those planned in the U.K., will underline that point nicely.

 

 

http://blogs.wsj.com/source/2010/10/19/overgrown-uk-state-braced-for-osbornes-scythe/

 

So it's time. Who will suffer? Are you worried? I'm not 100% sure on the governments plans that quickest is best but I have no qualms over their position. It needs to be done and a slash on public services is needed. Just one look at the country's deficit is enough for me. It's shocking.

today no national security, tomorrow no jobs!

Any more cuts and the country will bleed to death!:dozey:

today no national security, tomorrow no jobs!

 

Any more cuts and the country will bleed to death!:dozey:

 

LOLOLOLOL people are losing their income hahahaha!!!

 

U.K. Chancellor of the Exchequer George Osborne is of course a svelte young product of Oxford University. And yet, for all that, tomorrow he’s going to look a lot like a fat lady singing.

 

What the hell?

Whichever way it's looked a tthe cuts arn't going to be pleasant, but the fact is we need to pay back some debt, I hope that they will be for the most part fair but you're not going to be able to please everyone and there's going to be quite a few out of pocket and pissed off people, although here's an idea, why don't we pull our troops out of a pointless un winnable war (look how well it worked out for the Soviets in the 70s how is it going to be different for the US and UK today) and although some people think it might be a bit unfair to say so, lets axe Forigen Aid for now and get our own house in order, plus giving billions to other Countries only for thier corrupt governments to pocket the cash seems pointless,maybe they should make me Chancellor:laugh3:.

The British should be cooperative.

 

They should continue paying their taxes, like good little citizens.

 

They should accept cuts in services, because it is the right thing to do.

 

They should work harder, for the state, because it is good for them - breaking your back builds ethic.

 

Accept that you are servants to the political class. Do not make this difficult.

 

Spending Review: Key points and analysis

 

• £81bn cut from public spending over four years
  
• 19% average departmental cuts - less than the 25% expected
  
• £7bn extra welfare cuts, including changes to incapacity, housing benefit and tax credits
  
• £3.5bn increase in public sector pension employee contributions
  
• Rise in state pension age brought forward
  
• 7% cut for local councils from April next year
  
• Permanent bank levy
  
• Rail fares to rise 3% above inflation from 2012
  

 

Chancellor George Osborne has unveiled the biggest UK spending cuts since World War II, with welfare, councils and police budgets all hit.

 

The pension age will rise sooner than expected, some incapacity benefits will be time limited and other money clawed back through changes to tax credits and housing benefit.

 

A new bank levy will also be brought in - with full details due on Thursday. Mr Osborne said the four year cuts were guided by fairness, reform and growth.

 

But shadow chancellor Alan Johnson, for Labour, called the review a "reckless gamble with people's livelihoods" which risked "stifling the fragile recovery" - a message echoed by the SNP, despite smaller than expected cuts in Scotland.

 

Mr Osborne ended his hour-long Commons statement by claiming the 19% average cuts to departmental budgets were less severe than expected. This is thanks to an extra £7bn in savings from the welfare budget and a £3.5bn increase in public sector employee pension contributions.

 

http://www.bbc.co.uk/news/uk-politics-11579979

I don't understand. Possibly due to my own ignorance.

 

We are cutting jobs, we are trying to get more people in employment who are currently claiming benefits and we are raising the retirement age.

 

To me that doesn't add up.

I don't understand. Possibly due to my own ignorance.

 

We are cutting jobs, we are trying to get more people in employment who are currently claiming benefits and we are raising the retirement age.

 

To me that doesn't add up.

 

I'm thinking exactly the same either way there will be even more unemployed people claiming for benefits which means that they're losing just as much how about they cut their own wages down a few million ?

Sometimes I wish we were as passionate as the French.

We have this kind of 'It'll be riiiiite' attitude round here

I don't understand. Possibly due to my own ignorance.

 

We are cutting jobs, we are trying to get more people in employment who are currently claiming benefits and we are raising the retirement age.

 

To me that doesn't add up.

 

Economics is a rather complex thing to explain to the layperson but I will attempt to elucidate it here.

 

Try to forget about "money" for a second. Keep in mind that money is only a symbol for value. Value is entirely subjective.

 

So what is valuable for you, might not be valuable for me. Etc.

 

Now consider the way an economy works - via trade. Employers trade with their employees, and shops trade with their customers. They are trading value.

 

The key difference between a government and a business is that a government obtains its money not by offering value, but by taxing (theft).

 

Normally the way a business works is this:

 

1. Business offers you a good/service.

2. You analyze the offer, look at the business's reputation, and consider if the offer is worth it to you.

3. If it's worth it for you, you make the trade with the business.

 

Government doesn't work this way. Government works like this:

 

1. Government steals a % of your paycheck (with the threat of jail if you don't comply).

2. Via an opaque voting mechanism (which doesn't take into account each individuals' relative value judgments and concerns), government agents attempt to determine how to best maintain their power/wealth without angering a majority of the voters.

3. The policy is implemented while leaving an "exit strategy" so if it is a failure, there's a way to blame it on an enemy who is out-of-power.

 

So by paring the size of government, you free up capital (value) to be allocated voluntarily by individuals as they see fit. This creates more-accurate price signals, which increases the likelihood businesses will be making and doing the things people want. All of this increases the quality of life for everyone, but particularly those who don't work for the government.

 

The economy is only a signal-system. It is a far more accurate signal-system than the voting-stealing system is, at least when it comes to determining the best way to allocate resources.

 

Police to lose '10,000 officers by 2013'

 

At least 10,190 uniformed police officer posts are set to disappear by the end of next year in England and Wales, Labour Party research suggests. Shadow home secretary Yvette Cooper said "cutting so fast and deep" was "irresponsible" and "crazy".

 

The coalition's Spending Review set police budget cuts at 20% by 2014-15.

 

Policing minister Nick Herbert did not confirm or deny the figures but said it was the effectiveness of officers not their total numbers that counted. The Police Federation, which represents police officers, said numbers were on track to fall back to the level of the 1970s.

 

Chairman Paul McKeever said: "We're going to be back below 215 officers per 100,000. We're 257 at the moment, and I'm one of the very few police officers old enough to remember what it was like back in the 1970s. "We really were in meltdown then, it was very bad news indeed. We've improved enormously over the last 30 years, through increased funding and the resources we've had, and we're going to lose an awful lot of that."

 

Shadow home office minister Vernon Coaker told the BBC budget cuts were already having an impact on the front line. "David Cameron said that if any minister came to him with proposals which hit front-line services then he would send them away," he said. "And clearly what we're seeing in respect to the police, we're seeing cuts in police officer numbers which are already impacting on neighbourhood policing teams, already impacting on specialist units."

 

BBC political correspondent Laura Kuenssberg said Home Secretary Theresa May had always insisted that the cut in police budgets of 4% this financial year and 5% next year, should not have to mean a cut in the number of police officers.

 

But after Labour collated figures from all 42 police authorities in England and Wales - except the British Transport Police - the party claims that hope cannot be realised. Of the 42 analysed by Labour, two-thirds had made recent announcements on police numbers whilst a third had not yet declared how the budget cuts set out in the Spending Review would affect them.

 

For forces included in that third, Labour used police figures from May to September last year. The government has always insisted that front-line jobs can be protected, despite the savings they want. Mr Herbert said forces can and must make savings in their back and middle offices.

 

"By sharing services, outsourcing and procuring equipment together, they can work more efficiently and prioritise the front line, so that the service to the public is maintained and improved," he said. "Despite officer numbers reaching record levels, only 11% are visible and available to the public, not least because of Labour's red tape. It's not the total size of the police workforce that counts - it's how effectively officers are deployed."

 

http://www.bbc.co.uk/news/uk-politics-12375310

Surprise Surprise from Labour, forgetting that it was them whom caused the mess.

 

NHS to lose 50,000 jobs, trade unions say

 

More than 50,000 NHS jobs will be lost because of government spending cuts, a new anti-cuts campaign group says.

 

Trades Union Congress-backed False Economy said its study showed that NHS trusts were planning to cut 53,000 staff over the next five years - more than double previous union estimates. It used replies to freedom of information requests to produce its picture of cuts across the UK. But the government has accused the unions of "scaremongering".

 

A Department of Health spokesman said: "We promised to reduce NHS bureaucracy and plough this money straight back into patient care, and that is exactly what we are delivering. "Since last May, there are almost 2,500 more doctors, more nurses and more midwives - and 2,000 fewer managers."

 

However, shadow health secretary John Healey said the figures called into question the Tories' handling of the health service.

 

http://www.bbc.co.uk/news/uk-england-london-12548153

The unions would love to hold this country again, they must be destroyed.

UK 'to end direct aid to 16 countries'

 

India is one of the biggest recipients of UK development aid

 

UK 'to end direct aid to 16 countries'

 

The UK is to stop direct aid to 16 countries, including Russia, China and Iraq, papers seen by the BBC suggest.

 

A draft copy of the government's review of its overseas aid budget - due to be published this week - also reveals aid to India will be frozen. But overall, the international development budget will rise by a third in this Parliament as a new approach focuses on value for money, it says.

 

The report states that aid spending is good for Britain's economy and safety. The draft document outlines plans for greater transparency and accountability, with an emphasis on funding programmes that deliver greater results and which, specifically, help girls and women.

 

Resources will be focused on the 27 countries that account for three-quarters of the world's maternal mortality and malaria deaths, such as Ghana and Afghanistan.

 

By 2014, 30% of UK aid is expected to go to war-torn and unstable countries.

he report confirms that direct aid to countries including Iraq and Kosovo will stop, whilst aid to India will be frozen.

 

India is currently one of the biggest recipients of UK development aid, and there have been media campaigns in the UK suggesting an economy growing at nearly 10% a year simply does not need British assistance.

 

But others point out that nearly half a billion people in India are still desperately poor, and efforts to reduce global poverty will not progress without significant aid.

 

Earlier this weekend, it emerged that the UK is threatening to switch funding away from the UN Food and Agriculture Organization - which focuses on longer term projects, such as providing seeds and tools for agriculture - unless its performance improves.

 

Instead, more funding could go to the World Food Programme, which deals with emergency food aid around the globe.

 

As a major aid donor, any cut or change in UK funding of UN programmes is likely to have a big impact.

 

http://www.bbc.co.uk/news/uk-12589626

 

Bank of England base rate held at 0.5%

 

The Bank of England today announced it is holding the base rate at its 0.5% historic low for the 24th consecutive month.

 

Most economists predicted there would be no hike this month though some considered there was an outside chance. Many expect a small rise later this year.

 

However, minutes of the Bank's Monetary Policy Committee's (MPC) monthly meeting in February showed the number of policymakers who voted in favour of a hike increased again. Spencer Dale joined fellow monetary policy committee members Andrew Sentance and Martin Weale in voting to lift the base rate from its historic low of 0.5%.

 

Minutes of March's meeting will be out later this month. The Confederation of British Industry predicted at the end of 2010 that high inflation will force the Bank to raise interest rates gradually in the spring.

 

However, increasing interest rates could lead to more repossessions if mortgage become unaffordable. Research out yesterday showed 90% of borrowers are on a variable rate mortgage so will pay more if the base rate rises.

 

The low interest rate environment has meant millions of mortgage holders have often enjoyed rock-bottom monthly costs over recent years. On the flip side, savers have seen the returns on their nest eggs slashed over the past two years.

 

Base rate dropped to 0.5% in March 2009. Ray Boulger, from mortgage broker John Charcol, says: "It is abundantly clear from the recent speeches and other comments from several MPC members that there is more disagreement among its members than ever before.

 

"However, with the recently revised GDP figures for 2010 being even worse than the initial estimates, the MPC members who have been calling for a rate increase need to give even more consideration to how much impact such a move would have on an economy that is at best stagnating."

 

(MSE)

I wouldn't be surprised if the rate is more than 3% by the end of the year

UK interest rates remain at 0.5%

 

http://www.bbc.co.uk/news/business-13293991

Quarter of households predicted to turn off heating

 

Rising fuel bills may force a quarter of homes to turn off their heating at some point next winter, a price comparison site claims.

 

Uswitch says that last winter, an estimated 20% of people it surveyed had regularly turned off their heating. And it predicts that with fuel tariffs expected to rise, the number will be higher this year. The Bank of England said this week that gas prices could rise by 15% later this year, and electricity by 10%.

 

Uswitch said that a survey of almost 1,600 of its customers carried out in January had indicated that 20% of them had turned their heating off regularly in order to save money last winter.

 

The firm's spokesman Ann Robinson, the former chairman of Energywatch, says: "This time it's going to be a minimum of 25%."

 

If the Bank of England's predictions are true, she calculates that the average British household will have to find an extra £148 over the next year. "Many people are really going to struggle to pay their bills," she says. "We have to pray for a mild winter."

 

http://www.bbc.co.uk/news/business-13394095

Speaking of public finances, Northern Rail should be ashamed that this went all the way...

 

 

Commuter finally cleared over 50p train fare fraud after 11-month legal battle costing thousands

 

A commuter has been dragged through the courts three times in a case costing thousands of pounds – in a dispute over 50p.

 

The 11-month legal wrangle finally ended with magistrates finding Conrad Astley not guilty of fraud.

 

He was prosecuted by Northern Rail after they claimed he intentionally did not pay enough when travelling into Manchester. Legal experts estimate it would have cost the company, which was represented by a barrister, at least £2,000 to bring the case.

 

Mr Astley had travelled to Piccadilly from Newton for Hyde station. Unable to buy a fare on the train, he was sold a £4.70 return ticket at Piccadilly to travel back to Flowery Field station - less than a mile away from Newton for Hyde - for later that day.

 

Mr Astley says he was immediately pulled to one side by rail officials and told he had committed travel fraud because he had not travelled in from Flowery Field. He had travelled from the further Newton for Hyde and should have paid £5.20. Mr Astley says he immediately offered to pay an on-the-spot fine.

 

He also wrote to the firm, admitting he had made an ‘honest mistake’ and again offering to pay a fine.

 

But Northern Rail rejected the offer and pressed ahead with legal action.

 

He received a letter from the firm’s prosecutions unit which warned he faced a maximum £1,000 fine or three-month prison sentence. Six months later he received a summons to court.

 

Mr Astley, from Hyde, said: "I tried a number of times to settle this in a sensible way and held my hands up that I’d made an honest mistake. I assumed the price to that cluster of stations was the same.

 

"They seemed adamant that quibbling over 50p, which doesn’t get you much more than a packet of chewing gum these days, was worthy of a public funded court’s time."

 

Mr Astley appeared before magistrates three times in total.

 

The case was adjourned once. He then entered a not guilty plea and appeared again for trial where he was cleared.

 

Pete Myers, from Northern Rail, said a ticket monitoring system was in place at Flowery Field station on the day. It meant everyone boarding the train at that station was given a voucher which they would have to produce when buying a ticket at Piccadilly to prove where they had travelled from.

 

He added: "On arrival at Manchester Piccadilly, Mr Astley bought a ticket from Flowery Field, but could not produce a voucher. He had travelled from a further station."

 

http://menmedia.co.uk/manchestereveningnews/news/s/1422007_commuter-finally-cleared-over-50p-train-fare-fraud-after-11-month-legal-battle-costing-thousands

*Remembers a few years back when South West Trains introduced "Permit to Travel" machines on the unmanned stations so you could prove which station you got on from. It was great because as long as you paid the minimum of 10p and weren't travelling up towards Basingstoke which had barriers you could get away with only paying 10p, legally (if the guard wasn't walking up and down checking tickets) :P

 

Shame they have a ticket buying machine now at my local station :(

But I thought socialism means free things for everyone? What's going on here?

 

Don't you have enough rich people to tax?

Sadly due to the way the rail contracts got sorted the train companies get paid twice, firstly from the passenger paying the most expensive fares per mile in Europe and secondary from the government for running the system.

 

Bring back the railways under public ownership, at least the money won't be lost out of the system to shareholders