Thoughts on 'Trillion Pound Horror Story'

I am horrified what the last government did to our economy - all with a great big smile 😀 too! :eek::eek::eek:. They spent our money profligately with no thought for the future - as I said in another thread, I wouldn't trust them with my housekeeping money, let alone anything else! They sold off our assets (notably gold) at a cut-down price and plundered our pension funds and wasted it all on living it up!

How to sort this out??? I don't know. I didn't see the programme - should have done had I known it was on, I don't watch much TV. Sounds like it was interesting - what was their advice on how to deal with the mess we are in? As you say borrowing more doesn't help, and printing money only fuels inflation. Our manufacturing base has all but gone and really needs a boost, but difficult when 3rd world economies produce what we used to make at a far lower cost. Our taxation is strangling things - not least of which is fuel tax. Not a good scenario.

New thinking is needed - and a change of mindset of not just the polititians, manufacturers, but of we the people! Not easy when we have all been featherbedded.

hi Caroline
It seems all doom and gloom at the moment. But HongKong back in 50's was but a shanty town. If they can turn it around so can anyone else but biggest hitch here will be gormless, inexperienced people without experience of so much as running a corner shop are managing our exchequer! and they are happily borrowing away!

Second problem will be their massive ego to put their hands up to admit they got it wrong and need to clean up from scratch. That is if they do finally twig that they got it wrong...

Third they are so used to fleecing the people, I doubt they can bring themselves to lower taxes. Drastically cut down on taxes seems the only way out of financial stagnation. That is what HongKong did on the advice of a scotsman! So did China and Eastern European countries. Those economies are all doing better than when they had heavy tax policies.
There is something to be said about the consciousness of masses... public can become lexadeisical so their right to take hold of their own destiny slips away through their fingers.
But stll feel it is extremely complex, but not impossible if everyone believed in their own role in shaping the collective destiny of their country, society and world they live in.

I dont think any of our political leaders, from any party, have the will to turn this country around.

Im afraid we have created three 'monsters', our welfare state, the NHS and huge public sector. Year after year we hear politicians tell us that they have to be streamlined, and year after year it never happens. For the past 20 years each government has come in and got rid of huge amounts of quangos, only to replace them with even more quangos.

This country seems to be filled with a huge amount of experts that can tell us where the country is going wrong, as was highlighted in the programme, but the governments never listen, why is that? Too much to lose? You never see a poor ex-politician do you!

Didn't watch it (couldn't bear too, as saw the previews, and knew it would just leave me feeling angry - may be contempt prior to investigation, but there you go!)

While, we can let people get away with 122billion in tax evasion annually,and while Vodafone can be let off a £6bn tax bill we don't actually need to lower taxation to encourage innovation and creativity. When people pay less tax, they keep more for themselves! It doesn't necessarily equate to their reinvesting this in their start ups, so they grow and benefit us all! Private enterprise is not intended as a social good, it's intended to make profit at whatever cost.

And while bankers are still getting huge bonuses, and banks not repaying any of the billions they were paid by the taxpayer, I don't want to watch anything that further demonises and blames the public sector, and suggests that 'freeing the liberterarian and entrepreunerial spirit will cure all ills. It won't - it certainly didn't in an unregulated banking and financial services sector. There was huge opportunity for any of these people to use the vast amounts of money they were not only paid, but received in bonuses (& you can bet, they used some of that to pay accountants, to find more ways to evade tax), to set up 100 new companies a year each. Did they do that? No, becuase that's not our culture does with excess.

There is money in this country, as there is in all western economies, it's just that there's very little will to ensure its fair distribution, and I'm really sick of hearing about how it's all about the profligacy, wastefulness and inefficiency of the public sector. It's a misrepresentation, if not a lie. I have worked in the public and charitable sector all my life, and I, and my colleagues work extremely hard, so just becuase journalists can trot our an example of some ridiculous job in the public sector, that means the whole sector can be discredited. Wait until the cuts bite, and see where the most vulnerable and least able in our society are left. I wonder if any of this will seem reasonable then?

And talking of the heavy price ordinary people pay for innovative approaches such as "China and Eastern European countries . Those economies are all doing better than when they had heavy tax policies."

Really? Better in what way? In terms of people's welfare? Haven't you heard that many large scale corps in China are now asking new employees to sign contracts that say they will seek help before they consider committing suicide? This was introduced after a spate of suicides at one company, which had seen around 6 suicides in one week. This was because of the monotonous nature of the work, how long employees had to work without a break, lack of social opportunity, and the fact employees had to live where they work, so no reprieve. The suicide rate also rose exponentially in the transition from a rural to industrialised and corporatised economy.

Oh well, never mind. always a bit of collateral damage when trying a new approach. As China is over-populated, even if the old suicides gives the corps a bit of reputation management to do, at least there's an ongoing supply of ordinary joe's to fill the dead people's shoes. So that's all sorted then. Economy's booming 😀

And Eastern Europe? Smashing economy, and a great record on human rights too! That's why on the streets of London are filled with homeless, rootless Eastern European and Russian men, with numerous health problems including alcoholism. No doubt they migrated because the plethora of opportunities they were finding at home were just too much to consider, and they simply got overwhelmed! Far better to come here, and drink yourself to death, or as winter's coming, you never know, it might be quick, and you could freeze to death! All because you couldn't quite decide from all those plumb opportunities open to you in the Ukraine!!!!

What kind of world do you people want to live in? And it's Edmund Burke who said "evil flourishes when good men do nothing." I wonder what side we'd all out ourselves on?

El

I didn't watch the documentary but I'm aware of the story.
What strikes me as strange about the current mess is the attitude that individuals and society have towards borrowing and debt.
In my parents generation it was almost a sin to borrow money except in extreme circumstances. People would immediately make arrangements to pay back borrowed money, and one would constantly hear them and their peers talk about having a sleepless night because they had borrowed something.
Nowadays we're happy to live on borrowed money and not worry about it and the same culture permeates the government. Borrow and the future generations can suffer.
Surely our attitudes to borrowing should change first if we're going to sort this mess out?

The Government right now has half of a good economic policy, but having half of a good policy could be like having half a baby- ie worse than not having one at all!

They want to get people back to work- or not even "back" to work in many cases as many thousands have never worked in their lives. This is a good policy- most people I meet are disgusted that so many choose not to work- and the workinglass/lower middle class who pay most of the taxes are especially angry.

However- at the same time as forcing maybe a million people into work, they are cutting half a million public sector jobs, plus another half millon private sector jobs that had depended on Government contracts. THey are therefore expecting the private sector to come up with about two million new jobs. This could be a problem, for the following reasons.

(1) The banks are not lending enough money to businesses to expand and take on new workers.

(2) When they do take on workers, they would rather give the jobs to East Europeans who have skills and motivation, rather than to a Brit who's never worked in his life and can hardly read.

(3) Most businesses, even if they did have money to expand, could increase production quite a bit without taking on new staff. They might for instance invest the money in machinery.

(4) Of private sector jobs created in recent years, 90% are in the South East, where most people can't afford to live. The new jobs created in other areas are government jobs, which are being cut.

The answers to the above problems are

(a) Compel the banks to lend money to viable businesses so they can expand. The government has put so much money into the banks recently that they more or less own them anyway- they should go the whole hog and officially take control of the banks, as they are too important to be left in the hands of peole who are motivated only by short term profit.

(b) In return for the investment, the Govt should order the bigger companies to take on more staff, especially from the long term unemployed. The govt could guarantee to pay the cost of re-advertising the post and training someone else, if the new worker turns out to be hopelessly unsuitable.

(c) Companies must be prevented from taking on foreign workers. This could mean having to leave the EU, which would be no bad thing anyway.

(d) Govt must make every effort to rebuild our manufacturing industry, which 100 years ago was world-renowned. Germany and Japan still have strong industry, but the Brit economy now depends on conjuring, ie the banking "industry". This decline in manufacturing was a calculated policy of the Thatcher govt, which NuLab did little to reapir.

(e) For this to work, we need investment in infrastructure, and above all massive improvement in our education system.

Several of these policies would require increased govt spending, and one would require possibly being kicjed out of the EU. For these reasons, none of the main parties would dare attempt them.

I'm really sick of hearing about how it's all about the profligacy, wastefulness and inefficiency of the public sector. It's a misrepresentation, if not a lie. I have worked in the public and charitable sector all my life, and I, and my colleagues work extremely hard, so just becuase journalists can trot our an example of some ridiculous job in the public sector, that means the whole sector can be discredited.

I don't think anyone sensible is saying that all public sector workers laze around all day drinking tea. The fundamental problem is that the public sector does not create wealth - it spends it.

It's like us: we all want to live in a nice home, have decent clothes, good food, enjoy our leisure time and take relaxing holidays. However, what is possible depends on our income. We tailor our lifestyle according to our income - and if we don't, we can end up going bankrupt and getting our home repossessed.

The UK under the last government did exactly that: vastly increased the public sector and turned a blind eye to problems in the financial sector because it was bringing in loads of money. When the problems came home to roost, the sector collpased - crunch!

So we have a huge public sector and less money coming in than before - like someone who's lost their job and is now only earning half of what they used to. Obviously such a person has to re-assess their lifestyle: cut out the fancy holidays, reduce their outgoings, make-do-and-mend, while trying to earn more money.

That's where the UK is right now. We cannot afford the size of public sector we have - even if it's working efficiently and effectively. So we need to downsize while encouraging the wealth creators to flourish.

The money isn't there. The UK's interest payments only on the national debt were £21 billion in the first half of this year. The bankers estimated bonuses (and I have no love for bankers) for this year are £7 billion. That wouldn't keep the UK going for 5 minutes.

So if you think we can afford the size of public sector we have, please let us know where the money is!

A few random thoughts on this...

Several people have mentioned that we don't manufacture anything in the UK any more, which is a common myth. Britain is actually the sixth largest (fifth, according to some figures) manufacturing country in the world. We don't make anything? Nonsense.

We should pay less tax? Well, you get what you pay for. People living in areas with lower council tax look at neighbouring areas and wonder why their services are better. Simple - they pay more for them. Countries with lower tax take give less back. Fine if you are wealthy and can afford to pay for everything yourself. Not so good for everyone else. Take a look at life in Second World countries. Not a lot of tax. Not a lot of public services either.

The national debt? We have always had a national debt, and it shouldn't be confused with household debt. Countries all borrow. Sure, borrowing has been high recently, but it has helped the country to recover strongly from the recession - just look at all the figures rising sharply in the second quarter of this year. Unfortunately, they are now all dipping, thanks to this new government. And look at what is happening in Ireland. We are now following similar policies, ie trying to cut debt fast. But as someone in Ireland put it: when you are in a hole, you don't keep digging. That is what our government is now doing. We need to get out of the hole - and that means spending.

The big "public sector"? Funny thing is, you never hear anyone say they want fewer police, fewer doctors, fewer soldiers, fewer teachers, fewer nurses, less protection for vulnerable children, reduced services or shorter hours for accessing them. But you do hear a lot of talk about non-jobs. Welll, teaching is a non-job to someone with no children. Most jobs are important to someone, and in many cases they are life-savers. People used to moan about social workers... funny how they changed their minds and demanded more after the Peter Connelly case.

There are many myths about this country and its economy. But by several different measures, Britain is the sixth richest economy in the world. We are not bankrupt (and any minister who suggests we are anywhere near bankruptcy should be sacked). We are massively rich. We can afford our debt - especially if the economy continues to grow, which is looking less and less likely at the moment, under this government. And we can afford to look after our citizens. Don't fall for any propaganda that tells you otherwise. Do the "money men" want us to benefit from the nation's wealth? What do YOU think? Of course they don't. They want all the wealth for themselves. And we're meekly nodding our heads, and saying: Don't mind us, just rip us off!

Nick - Agree with some of what you say.

Of course we don't want fewer nurses etc - just the same as I don't want to stop taking holidays or eat spam instead of steak. But If I ain't got the money then I ain't got a choice.

We all want our cake!

No, of course we are not bankrupt or anywhere near it in terms of our real national wealth. However, the global financial markets effectively determine the fate of countries. If they think you're doing badly then they lower your credit rating, hammer your currency, etc. So goverments have to pander to market perception.

This isn't a matter of actual national wealth but of perceived economic strength.

There are several posters in this thread, who use the word 'we' when expressing their ideas - as in "we all want our cake"

Personally I don't. I have no objection to paying a reasonable amount of tax - yes, even a little more than I do now- for well run, accessible, and quality services we all can use. Naive and silly I know, but it really is that simple. What's missing is the will.

Richard - I clearly pointed out where the money is available. Through addressing massive tax evasion, which is potentially a huge source of revenue. Another route to raising revenue is to to bring back the lobby to introdcue an international tax on banking transacations (not George Osborne's one, a real one, with teeth). That way every time we hear about bankers leaving the UK in droves should we ever dare to do such a thing, they actually won't have any havens to bolt off to.

If we don't seek to address this, then what is our economy based on? An old boys network, that sanactions greed? Are 'we' all OK with that? And I don't agree with your analysis on the deficit (& actually found your 'economics made simple' approach just a touch patronising) I understand the principles of surplus and deficit, what I'm objecting to is the current approach to addressing it.

The point of the public sector is not wealth creation. But that is why we pay taxes. More people paying the tax they actually owe would do a great deal to help. And, as Nick suggested, we do have the money.......

Elodie - The principles of a national economy are not hugely different to those of our personal household finances. I'm sorry if it sounds patronising to say that, but some people do appear to lose sight of the fact that public services are the UK's 'outgoings' and have to be paid for from our earnings (exports, financial services, etc).

I totally agree with you that massive tax evasion is unacceptable and that we are riddled with a toxic old-boys scratch-my-back culture.

The last Labour government did as much as the Tories ever did to keep that sector happy and based in the UK. Ever wonder why? Not just old-boyism, just the cold reality that we are in effect hostages to them.

The financial sector is what keeps the UK afloat. If we introduce policies that over-tax them, then they may just pull up shop and head to Frankfurt - and the UK really would go bankrupt.

However, the global financial markets effectively determine the fate of countries. If they think you're doing badly then they lower your credit rating, hammer your currency, etc. So goverments have to pander to market perception.

This isn't a matter of actual national wealth but of perceived economic strength.

Funny how we let the money men get us into a deep hole, then let them dictate the way they think we should get out of it. Especially when they seem so financially unsophisticated that they can't measure actual wealth, but only have a perception of wealth!

Funny how we let the money men get us into a deep hole, then let them dictate the way they think we should get out of it. Especially when they seem so financially unsophisticated that they can't measure actual wealth, but only have a perception of wealth!

Totally agree, Nick. It's a completely crazy system. But the perception of traders is of performance and possibilities. A shift of a fraction of one percent upwards makes them billions, downwards and they lose billions. How we would feel if moving our hand a fraction of an inch in the wrong direction would kill our client? It takes an exceptional person to handle that level of stress.

Somehow we've got this mad system. Not at all sure how we can get out of it!

My thoughts.

They have to stop wasting valuable resources and transfer things to the private sector.

NHS, it costs a fortune to train NHS staff, once they have completed their training they can sit on their hands and do nothing, move country to get better wages or go into private practise with big incentives from us to do so, whereas in the private sector we have to pay for our own training.

I think there should be a system where people who are trained in the NHS at our expense, need to either put in the equivalent time in full time employment within the NHS before they move into private or move abroad. If they choose to sit on their hands, move abroad or go into private practise within the alloted time, they should be forced to pay for the expensive training they have received at our expense, out of their own pockets.

Hospitals, IMO every NHS hospital should have a private wing attached to it, the doctors who choose to go private after they have done the full time work to offset their training, could then choose to move into the private wing, they have to pay the NHS hospital for the use of the facilities etc. which comes out of the pockets of people who choose to make use of the private facility, this allows them to become partly self funding and helps to keep the NHS hospital afloat and afford better equipment etc.

Hospital administrators, need to be given the freedom to search for the cheapest source of the drugs and equipment they use, at the moment they are forced to purchase drugs and equipment from specified sources which forces them to pay extortionate prices.

Public transport, this should be abolished and all the infrastructure sold to the private sector who knows how to run a business effectively and economically and if they go bust then someone else can step in to do the job.

Education, we need to encourage more private or joint run education establishments, bring back the grammar schools and only help to pay for adult education for promising individuals who win scholarships, which are part funded from us, the university and from the business sector like they used to be.

Scholarships were won on the individual's potential to utilise the further education they receive in the real world.

Education is run like hospitals, schools have to purchase books and equipment from set sources at higher prices than they could get if they were given the freedom to search round for a cheaper supplier.

Public sector pay, this needs to be capped in line with the average private sector pay, top individuals could be capped at say £60,000 pa. We can't afford our own pension plans, so why should we pay extortionate pension plans for the private sector?

Taxes, we pay around 80p in the pound to the government in taxes when we take into account all of the stealth taxers which are levied, this does not give anyone the incentive or the resources to invest heavily in business which will generate wealth, there have been some successes over the years, where local governments have encouraged businesses by creating Enterprise zones.

When a business sets up in an Enterprise zone, they get special tax breaks to help them offset the setup costs, which gives them the much needed incentive to invest and create wealth and jobs.

Employment, if everyone who was capable of working, had a job which generated wealth, then we could get rid of all the stealth taxes and have a basic tax level which people could afford to pay and would be happy to pay, which would leave them enough wealth and incentive to invest into whatever they chose to invest their hard earned cash in.

Banks, the government is holding down interest rates with the banks to stop itself from going bankrupt, this is not actually helping investors but it is very good for the banks. 😉

The answer to sorting out the banks lies in our own hands, if everyone withdrew their savings from the banks, they it would not be very long before they were giving us sensible incentives to put our money back in.

There are lots of other things which could be done, but IMO that would point us in the direction of sustainable recovery.