DEM not gonna CON dis NATION: Rolling UK politics in the short-lived Cleggeron era

Surely Cameron won't be suggesting doing anything to intervene in the smooth running of a free market economy?

"cut taxes and hope for the best" has been the only plank in the Republican platform since 1979 and it hasn't done them much harm

Not sure what worked by-and-large for the Republicans in the most powerful nation in the world between 79 and 08 has much bearing on what'll work for the coalition in Britain in the toughest economic conditions in decades.

Cameron's speech on growth is an interesting turning point, up to now they've done virtually nothing other than talk about deficits and cuts

Difference is that they're actually doing more than talk about cuts whereas talking about growth is all they seem prepared to do

do you mean '"cut taxes and hope for the best" isn't going to work' with the electorate, or with the economy?

i sure hope not Matt

they haven't talked about cutting taxes iirc

they're raising vat

Well they're only talking about cutting business taxes, which much of the electorate isn't really interested in. Whether it works for the economy IS whether it works with the electorate. You can't have the latter without the former.

Good Will Hutton column from yesterday which seems a pretty good outline of the issues here, even if he is essentially saying the same thing he always says.

they're raising vat

Unfortunately they haven't managed to work out yet how to target these rises at people on benefits/ public sector sectors workers/ poor people in general

well, it is a regressive tax so it does, kind of

More than kind of!

True

Let's ask Mumsnet what they think

I am kind of shocked by how the ConDems aren't launching tax cuts across the board - is it that they've tied its own hands by putting forward this analogy of government spending as being like family finances? Unreliable old Goofus Labour went out and spent himself silly (we're told) (in actuality he was shaking out the piggy bank to fund uncle Fred's gambling habit) and now rock-solid Gallant has to put things right. The problem now is that the Con Dems actually have to be seen to deliver on this analogy when every economist will be telling them that taxes should stay low and government spending should stay high.

i think their plan is that when the economy is cooking again in 4-5 years time they will cut taxes as a pre-election gambit

of course, they've already cut corporation tax

'ha!' – that woman in 'the fast show'

of course, they've already cut corporation tax

Yeah - apparently one of the few tax cuts unlikely to actually lead to growth as companies will just sit on the extra cash

Yeah - apparently one of the few tax cuts unlikely to actually lead to growth as companies will just sit on the extra cash

Is this actually true?

was gonna say

I'm not remotely surprised they haven't cut other taxes by the way, widespread tax cuts wouldn't help with deficit reduction and wouldn't look good politically either, unless they only cut at the bottom, which wouldn't happen.

like nrq says, there may be tax cuts later in the parliament for political reasons, but i don't get the impression the conservatives are that bothered about the current level of taxation on ideological grounds, even if conditions were less "urgent"

I think the long-term view is cut the deficit and slim down the state significantly in the process, when things are rolling again that money can be used to fund tax cuts. Mostly for the rich obv.

y

no (well not only that), i think they will raise the threshold for income tax. someone clever told me why this benefitted middle-income tax-payers more than the actual poor but idk. all of these things are relative though, particularly to the cost of housing, which will continue to rise so long as there's undue speculation there and no push for social housing, radical change in the structure of the economy etc. need to get off the 'cheap' credit tit, if nothing else.

i don't know if it's true that most companies will sit on their extra cash from corporation tax cuts but I have read that this happens quite a bit, especially during downturns. i.e. that money will get used to service debts or get sent offshore rather than enter the real economy.

Matt that's my point - because the coalition have made deficit reduction their ultimate raison d'etre and because they've used this faulty analogy for it, tax cuts (which are usually perennially popular) aren't really open to them (even if it's what Keynes would prescribe (in tandem w/ more deficits)). Basically I'm just all like auuugh why u push cyclical policies, u mad

Yeah - apparently one of the few tax cuts unlikely to actually lead to growth as companies will just sit on the extra cash

Is this actually true?

― Matt DC, Monday, 25 October 2010 06:22 (48 minutes ago) Bookmark Suggest Ban Permalink

Who'd invest the extra money in a country that just about wipe out the disposable incomes from a million consumers and making the rest feel nervous. Much better returns to be had overseas.

Not universally so, of course, Nissan must be rubbing its hands with glee at how depressed wages round Sunderland are going to be. The returns on its government bung are going to be great.

That said 1 million extra civil service/service industry unemployed is not really a good basis for an export led recovery.

Larry Elliott a few days ago said that under Osborne's plans, the economy will need to make a radical and fundamental shift, relying not on consumer spending and public spending but

on higher investment and a better export performance. Osborne's plans stand or fall on whether this structural shift takes place, because without rising capital spending by the private sector and an improvement in the UK trade balance, growth is going to be lower and the deficit higher than the Treasury expects.

Malcolm Sawyer, economics professor at Leeds University, is just one of those who questions the validity of the government's assumptions. Take investment, which has been savaged during the recession. Treasury plans include an assumption that investment (including public sector investment, which is to be squeezed in the spending review) will rise by 44% between 2010 and 2015. The investment rate in the economy will thus rise to 19.3% of GDP, not only far higher than the 16.8% average during the past decade but the highest it has been for at least 25 years.

Similarly, exports are forecast to grow twice as fast as imports, and growth in each year would be higher than the 4% average from 1999-2008. Imports will have to rise more slowly each year than the 4.9% average between 1999-2008 for the chancellor's sums to add up.

Now, there are reasons for imagining that this desirable rebalancing could take place. Corporate profits are high and company balance sheets look strong, so there is scope for investment to rise. Similarly, the hefty fall in the value of the pound not only makes it easier for UK firms to sell abroad, it also makes them more competitive in the domestic market, because imports become dearer.

On the other hand, companies are only going to boost investment to the extent envisaged by the chancellor if they think demand for their goods and services will be strong. And there is no guarantee that it will be, because consumer spending – by far the biggest component of growth – is going to remain weak for a whole variety of reasons; low wage settlements, falling house prices, rising unemployment, rising fuel bills and, of course, public spending cuts.

Similarly, the outlook for exports looks challenging. While it is true that the fall in the value of the pound will be a bonus for UK exporters, they will not be helped by the tendency of virtually every country in the world to be tightening fiscal policy at the same time.

Dad's ex boss is big wig in city council of English city where the council is the biggest employer. They're going to get rid of 2000 people. Population about 250k.

That sounds waffly familiar.

i hear that the plans to catalogue all our internet usage are back on

https://www.youtube.com/watch?v=tkqKbBVC09M

I thought he was a disgusting hypocrite Conservative. Maybe I learned that fact from one of Marcello's lists of Tory celebrities.

he's a v. vocal labour supporter iirc. been in election broadcasts i think. maybe that's what marcello meant by tory.

Reminds me of that scene from V for Vendetta.

I thought he was a disgusting hypocrite Conservative. Maybe I learned that fact from one of Marcello's lists of Tory celebrities.

Marcello's lists of Tory celebrities were generally Marcello's lists of celebrities he disliked.

maybe that's what marcello meant lol because labour are like the tories

I don't think so. I did ask him about Tom O'Connor back whenever, and he said there was no ev.

O'Grady came out with some right wing bollocks on his show before now, can't remember what exactly.

Course that wd potentially put him somewhere in the hard Left of Old Nu Labour

tbf marcello was some kind of Toryfinder General, just glad he couldn't search us for extra teats etc

Marcello loved the phrase Thatcherkid because it meant he could label anyone younger than him a closet Tory. He also loved calling people racists at the drop of a hat. In short, he was not a reliable source.

Dunno, I tend to use Thatcherbaby to describe the kind of person younger than me who has zero empathy for people in difficult circumstances and opines about everyone else being some kind of scrounger, as if they'd never received any benefits from their own citizenship. You know, begrudging people their £60 weekly dole like they're subsidising chav millionaires when that's the cost of a bad meal for a young family at Giraffe, or the price of their weekend wrap of coke.

http://www.bbc.co.uk/news/uk-politics-11627021

he's vewy vewy cwoss

"Cleansing" is a dick word to use and pretty atrocious politics.

probably less atrocious than people being forced out of their homes tbf

good politics then

Since 'cleansing' in itself is a sanitised term for 'genocide'...

Why is it always Clegg fielding these "it's unfair" accusations. I know he's a soft target but I can't help but feel they'd be a bit more effective targeting Cameron and Osbourne. It's like the very presence of the LibDems, who nobody likes, lets the Tories off the hook.

"it is perfectly reasonable for the government to say that it won't hand out more in housing benefit than people who go out to work, pay their taxes, play by the rules"

'play by the rules' more atrocious than 'cleansing'

ffs it is a tacit admission that *everyone* on benefits is a scrounging cheat