Which Premier League manager will get fired first

Friday, 22 October 2010

The Big Freeze

Lots of things are frozen at this time of year generally pipes, boilers, schoolchildren and office workers as boilers spring into life for the first time in 6 months and promptly break down again. We always seem surprised when this happens and are never prepared. Take last year's winter for example the country ground to a standstill as it actually had the audacity to snow on more than 2 consecutive days while other countries like Switzerland, Austria, Germany, Norway, Russia, Canada and the USA managed just fine with far higher levels of snow. This unpreparedness is once again evident as George Osborne unveiled his Big Freeze of public spending.

For months we have been told that there will be cuts in the public sector as a result of the recession and spending review as the state hadn't really cut any staff during the last couple of years the way the private sector has so clearly something has to be slimmed down.

The problem is figuring out if the cuts will lead to a Weightwatchers type reduction or a Slim-Fast lose as much as you can very quickly diet. Many of the changes are good in principle but not really targeted in the right way with the Child Benefit cut being one of the main ones. In principle cutting Child Benefit for higher earners is a good one but linking it to the rate of tax paid rather than household income was not giving a scenario where a single income family on £47000 per annum would lose the benefit whilst a dual income family on £80000 per annum would keep it. William Hague claimed the former were a minority whereas most would say it represents about 25% of the Conservative Party's core voters with some of the cuts potentially proving to be political suicide.

So where are the cuts good or bad? Reducing prison costs is a positive step as long as it doesn't lead to people who should be in custody (those with previous convictions for violent or sexual crimes or on trial for murder or flight risks being excluded), reducing the amount of quangos again not a bad idea as long as it actually saves money but counter that with reductions in government building programmes and decommissioning Ark Royal while talking of increasing overseas aid and it is not easily apparent where the true savings will be made as those made redundant will likely claim some kind of benefits (paid for by the state) and tax receipts will decline as a result. A 20% levy on the EuroMillions and Lotto winners every week would go a long way to increasing tax receipts as would stopping some of the tax avoidance used by LTD company contractors who are in effect disguised employees and umbrella companies.

The truth is there are no easy answers as to what cuts are good and which are bad as someone suffers regardless of how it is done. Some companies that work to get jobseekers into work sound like they are providing a positive service yet the cost to the taxpayer that they are charged by them is quite high and that work would be better done by the JobCentre anyway. It seems overall that the plan is to force government departments to spend their budgets wisely and ensure that projects are funded on merit rather than influence.

Hopefully in 5 years we won't be saying that The more that it hurts the less that it works