Saturday 7 December 2013

Saturday, December 07, 2013 Posted by Jake 7 comments Labels: , , , , , , ,
Posted by Jake on Saturday, December 07, 2013 with 7 comments | Labels: , , , , , , ,

A train is dangerous if you run into its path or you refuse to get out of its way. Otherwise trains are perfectly useful and amiable. Rather like our amiable chancellor, George Osborne, into whose path the country placed itself when fleeing from the previous Labour government. George Osborne whose boyish smile eloquently smirks “How come they haven’t found me out yet?”

A graph from the Office of Budget Responsibility (OBR), a body created by the government in 2010 to provide independent economic forecasts, shines a light into a dark corner of Osborne’s mind. This graph shows Osborne’s current economic strategy will bring government consumption to the smallest share of GDP since before 1948. 

Office of Budget Responsibility "Economic and Fiscal Outlook December 2013"

“Government Consumption” includes money spent buying goods and services. It does not include transfers of money from one group of people (taken in taxes) to another (e.g. paid in benefits and pensions). Government Consumption includes paying for public services such as health, education, transport, justice, defence and the like.

Money is raised from a population in two ways:

a)      Take money away from people (in the form of income tax; VAT; & other taxes)

b)      Don’t give money to people in the first place (low pay lowers costs and boosts profits)

The income of 90% of Britons has stagnated for decades, through Labour and Tory governments alike. Plenty of money has been taken from the 90% in withheld pay.
Paris School of Economics
The vast contribution to the nation’s finances by the under-paid is hardly ever mentioned. Paying nurses, cleaners, shop assistants and social workers what they are actually worth in cash would cost businesses and government a fortune. Government consumption pays the 90% of Britons in kind by providing education, health, justice etc. It is the cheaper alternative to paying them enough to buy their health and education privately.

These cuts have nothing to do with 'benefits' - which are not part of "Government Consumption" spending. Osborne’s radical cuts are about taking away from ordinary Britons the public services they themselves already pay for by accepting poor wages and conditions. And it is not just the public services that are snatched away. These cuts also take away public sector jobs as numbers in the police, army, hospitals etc are reduced. And take away private sector jobs as the government cuts back on investing in infrastructure.

With Government Consumption falling to pre-1948 levels the Tory led government is simply keeping the national balloon afloat by throwing people out of the basket. A basket these same falling people paid for.

8/12/13 Update: One of our readers has postulated the graph showing Government Consumption above is a 'lie'. We agree that it seems unbelievable. However the graph is a straight cut&paste from a government sponsored report. Click >>here<< and go to page 75 of the report (page 80 of the Adobe document). While we too hope it never happens, it shows what the coalition government intends.

A prime minister once said: "I see only one road, however difficult it may be and whatever further consideration it may require as one progresses from step to step, and that is the policy of separate areas."

That prime minister was Dr. Hendrik Verwoerd speaking in 1961 as he introduced apartheid in South Africa. Cuts to public services will increasingly mean if you can't afford to buy your own education, medical care, legal representation then you can't have it. Britain is in danger of heading for economic apartheid.


  1. The comparison with apartheid is so interesting. I was wondering if I was exaggerating when I thought there was a kind of apartheid happening in UK between rich and poor. Perhaps I wasn't.

  2. This website would be much better if it steered away from the emotive analogies and lazy use of metaphor. You destroy your own arguments by sounding like the worst kind of hyperventilating lefty ... ie one for whom reasons and facts don't mean too much ... and it's a great pity as good points are being made otherwise.

    1. The presentation works for me. But I admit I am weird. proof here

  3. It's even worse than that!

    Taxes for revenue are obsolete.

    MMT Modern Monetary Theory/Sovereignty; currency issuing governments can create money by keyboard strokes, an extra zero at negligible cost increases the amount tenfold, the difference is "revenue", also known as Seigniorage.

  4. Shows exactly what is now underway under LNP Abbott & Gang in Australia! Thanks for heads-up!

  5. National Audit Office comment on cuts to Army:

    "In its report to Parliament, the spending watchdog warns that transition to the new Army structure comes with significant risks which, if they materialized, could significantly affect the Army’s ability to achieve its objectives and value for money.

    Under Army 2020, by December 2018 the number of trained regular soldiers in the Army needs to be reduced by around 20,000 (down from 102,000); and, by the end of 2018-19, the number of trained reserve soldiers needs to be increased by at least 11,000 (up from around 19,000). The Department considers that this reduction in size of the Army will help the Army achieve savings of £10.6 billion over 10 years to 2021-22. The resulting Army would consist of 82,500 regulars and 30,000 trained reserves. However, the Department did not test whether it was feasible to recruit and train the required number of reserves by 2018-19.

    There has not been a significant growth in the overall trained strength of the Army reserve in the last two years. At April 2012, the trained strength was 19,410. In April 2014 it was 19,400. In 2013-14, a total of 3,020 soldiers entered the Army Reserve.Reserve recruitment targets increase substantially over the next five years. For example, in 2016-17, the Army will need to recruit 9,270 reserves, including 8,000 new recruits. A significant change in performance is therefore required, particularly for new reserves, if the Army 2020 structure is to be staffed in time.

    The Army is ahead of target in its planned reduction of the Regular Army to 82,500 soldiers. (As at April 2014, its trained strength was 87,180). However, recruitment of new regular soldiers was behind schedule in 2013-14. The Army recruited 6,366 regular soldiers against a target of 9,715 (a shortfall of 34 per cent).

    The Army’s recruitment contract with Capita has been subject to a number of difficulties that have affected recruitment performance, including the MOD’s failure to provide ICT infrastructure critical to the success of the project.This means poor recruitment performance cannot be distinguished from the impact of ICT failings."

  6. It appears Osborne is following labour spending plans, assuming that spending will go back to 1996 levels ( which themselves were at 1970 levels ). Unfortunately the population will be 10% higher causing increased demand and shortages of services. This is were the tory idea of 'choice' comes in, you can choose to pay or choose not to pay and go without.


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