Austerity and living standards
 

In the margins of yesterday's budget we heard yet again wailing and bleating from various politicians that living standards for ordinary people have fallen. Well of course they bloody well have! The country has been living way beyond its means for years and how else are the books to be balanced unless everyone takes a cut in real income, however painful it is.

Just as at home we all have to balance our own budgets, so too has the country as a whole, and even now after four years of trying to reign in government expenditure the present coalition are still over-spending and having to borrow about £100 billion per year just to keep the country going. This is not something gifted by some fairy godmother - it has to be repaid. And on present forecasts it's still going to be another two or three years before the government can hope to balance its annual income/expenditure books. And past debts amount to some £1.4 trillion (about £20,000 for every man woman and child in the country) which also has to be repaid.

So everyone has had to take a cut in income of, at a guess, 5-10%. And it hurts those at the lower end of the pay scale most, because they have least financial room for manoeuvre. But while I can't quote figures, I doubt that a significant hike in the higher rate of tax would make that much difference to the Chancellor's income - and it could arguably damage the economy (I speak as someone who once paid 83% on the top slice of a not very large income).

Meanwhile sadly, real incomes must remain depressed until we are once again living within our means, however painful it is, and it's no good complaining endlessly about it. It's our debt and we must now repay it ...

Tony.

I would argue with you but then we will go around in circles over and over and we will waste both our time.

Isnt that what a debate forum is all about?

On topic, I find that a lot of people seem to have the view of 'I want everything that I think I deserve now,regardless of whether or not I have the money to get it.' All of the borrowing people do is out of control, there is a reason that payday loans companies do so well, the act of saving and waiting to buy things seems to be lost.

We are going to have to repay at some point, as a country we cant keep living on the magical imaginary money that we actually don't have. I think its unfair that those are the lower end of the pay scale are hit hardest, thats the unfortunate reality of the situation.

There seems to be an attitude of people not be able to cope with tightening their belts, missing out on luxuries for a while. I think the living standards thing is a good sound bite for politicians to wheel out because its an attention grabber.

I agree with you but look at the Kiev thread, it went on for pages with people not taking on the others point. If I want that I will stand next to my door and argue with it. Would probably be more productive to be honest.

Anyway I will wait for Irene or someone to comment. They will say it much more eloquently than I could.

I have no problems with paying my way, everyone has to. I do not believe that things should just be handed out to people. I do, however, believe that in a society we have to work for the society. I dislike this government's war on vulnerable people. Throughout their term I have heard none stop about "benefit thieves" sucking all the money out of the governments pockets. I believe benefit fraud should be tackled, but the way it has been made out to be huge problem erks me. Benefit fraud accounts for 2% of the annual fraud in the UK. That's a lot when you put it into monetary value, some £1.2 million. However, it is the second lowest type of fraud in the UK, with tax fraud costing the UK economy a whopping £14 billion. And yet our government is throwing about tax breaks to everyone, and condemning everyone unlucky enough to be on benefits.

On the same note, Ian Duncan Smith's shiny new "universal credit" has already cost the tax payer £40 million by December 2013. It was reported that it would cost a further £91 million to rectify this failing system. A system that hasn't even been fully rolled out yet. The system needs updating, that much is certain from anyone's standpoint. I actually thought that the framework of universal credit was a lot simpler and easier to navigate than the current system, which has just been added to endlessly making it a swamp of paperwork and bureaucracy. I do NOT understand why this system has become some sort of black hole of money. Just like Labour seem to throw money into the welfare system in hopes it'll get better, so too has this government thrown money into their newer, "better" system with just as much success.

(I could equally go on about parliamentary expenses. Which, in 2013, cost tax payers nearly £100 million. This is up from £89 million in 2012. Seems everyone needs to tighten their belts but our MPs. And don't get me started on handing out bonuses to executives and bosses who's business ventures have ended up LOSING their company money.)

I favour no political party. I just simply wish that the FACTS were set to us simply, not hidden behind propaganda and exaggeration. The actual state of affairs our country is in is very difficult to find and evaluate because every statistic, every finding, is skewed to prove some kind of political point. Austerity may seem to be working, in our government's eyes, but as far as I can see since 1974 there has been a grand total of 8 whole years where our country managed to balance the books. That's not very promising. No one seems to know what to do to balance our books, and I fear the country I am leaving to my children AND the hands of the government's I am leaving it in.

Well thats rude for no reason. I dont understand why you would bother to post if thats your view!

Thank you Griddle, I only posted because the forum is News and Debate and I thought the subject was worth debating (without getting into some sort of vulgar argument).

I'm not qualified to say whether there is more irresponsible spending by individuals in this day and age. I've personally always made it a point of honour to somehow keep my own finances in the black, however difficult it has been - and it often has! But I'm quite clear that the previous government was grossly irresponsible in running up the debts that it did. Of course more hospitals, schools etc, etc are desirable. But if you can't afford them you can't bloody well have them in my book. Spend within your means, and don't try to bribe the electorate by giving them a whole lot of stuff which of course they'd like but can't be afforded without running up yet more debt.

If I were Chancellor I'd be tempted to say to the Health and Education Ministers "sorry, chaps we can't go on like this. You've each got to find 10 schools/ hospitals which are not producing value for money - and close them!" What an outcry there would be, but is it really any different from the sort of housekeeping which we all have to do at home when we're badly overspending?

A last point. I notice whenever a discussion of this sort comes up that those moaning loudest always seem to assert that someone else should pay to square the books - the wealthy, the large homeowners (who've already paid their fair share of tax), businesses generating wealth and so on ad infinitum. They themselves should somehow escape if things are to be "fair". Absolute rubbish! We've all of us "benefitted" from excessive government spending and we're all in this together when it comes to bailing ourselves out. Of course care must be taken of those who are really struggling, but we have a generous welfare system (which we can't really afford). And there is in my view no possible reason for us not to get a grip and, however much it hurts in the short term, start to live within our means ...

Tony.

Yeah I am feeling rude and angry. I'm sick to death of seeing friends and people I know getting ****ed over again and again and again while people pass it off as necessary and yet the toffs and millionaires all carry on with their rich lives more than likely not giving a toss about the working/poorer class. People are killing themselves over not having enough money. How can that be justified by anyone?

Good that you've replied, Enthused. But your response does seem to indicate strong feelings about how unfair the present system is, in your view. It also poses quite a number of questions:

1. What is a toff, since you've chosen to use the term? Is it merely someone who went to a private school and might speak with an "educated" accent? If so, is that some sort of crime? Why should someone who fits that description be automatically regarded as some sort of enemy? Or do you assume that they, by their very nature, are bent upon grinding down the poorest in our society as a matter of principle? If so, what an unfair and unjustified bias! It is used far too often, in today's world, as a derogatory term. On what possible basis?

2. Is it a crime to be a millionaire (if you've worked your way by your own efforts and initiative and paid your taxes)? Or are they also determined to claw their way upward by grinding down the poor? It might be worth remembering that this sort of individual generates huge numbers of jobs and pays massive amounts of tax (to help subsidise the extravagances of government and support the less well off).

3. If society is so unfair, shouldn't everyones wealth therefore be totalled up and then divided equally among every member of society. This would certainly cut the millionaires down to size, and also the parents of those toffs who might have saved and struggled to send their children to the school which they felt was best for them. And the wasters who had never contributed anything to society would be just as "well-off" as everyone else. Gosh, wouldn't that be fair! (Though I suspect that many of those working their socks off on the oil rigs out of Aberdeen just might disagree).

Bottom line: in times of austerity everybody feels hard done by. But it's not everybody else's fault. It's our fault - we let the government run riot with our extravagances and it now has to be paid for by us. Not just by the toffs and millionaires, but by us all - and we need to face up to it and stop moaning ...

Tony.

Oh Tony, surely you can't expect that from the British public :tongue2:

I understand that these questions aren't directed at me, but I would like to join the debate. It also seems to me that Enthused is perhaps rather upset with this discussion.

I don't think it has anything to do with having a private education, nor an "educated" accent. I would like to think that I am well educated and have a quite attractive accent, though I would not describe myself as a "toff". I believe the term "toff" is used more to imply those who seem to have no understanding of the "everyday lives", people who have not had to live in the "real world" for lack of a better term.
For example: David Cameron recently announced the increase to the lower tax bracket to £10,500. However, in doing so he made quite an insulting and misjudged comment that with the extra money people in the lowest wage bracket could "help a dad afford those trainers for his son or help a mum celebrate her daughter's birthday with a meal out."
It is aggravating to those in low paid jobs to hear someone speak about things they are so out of touch with. Many people are struggling to afford rising rents, electricity and gas prices, food prices. However much he refuses to believe it, wages are not increasing at the same rate as inflation and people are feeling the squeeze. It is, therefore, out of touch to believe that people struggling to afford basic needs would spend their money so frivolously.

It is not a crime to be a millionaire. No one has ever said that as far as I am aware. It is important that we encourage rich tax payers to stay as they provide a huge boost to our economy. It is also not a crime to be poor. For every society there are social classes, some higher, some low. Each pays for society what they can afford, millionaires can pay a substantially larger amount than the poor. However, being in such financial security also allows such people the ability to use the system to their benefit. Every millionaire has an accountant working hard to make sure that their money stays in their pockets. As we all know, tax EVASION is illegal, tax AVOIDANCE isn't. And many rich people take advantage of this. Someone earning £10,000 a year doesn't have the same ability. Millionaires may pay higher tax rates but they are also given opportunities to avoid these as well.

I think this is an unfair statement to make in a debate and doesn't really aid to anything. You're basically talking Communism here, which is in no way what anyone has suggested. I also have an issue with the term "wasters" who "never contribute anything to society". This is just as derogatory as the term "toff" which you found so unappealing earlier. You are making a huge bias about a social group you probably have very little experience of.
Imagine you grow up in the poorest area of Glasgow, you're parent's never even owned a cooker, you're dyslexic so your school never really bothered with your education. You leave with little to no education and so no one will hire you, and you don't have any experience anyway. You're surrounded by alcoholism and drug abuse, it's something you've grown up with your whole life. You're on benefits because what else can you do? Your parents chucked you out as soon as you turned 16 and have been living in a hostel, waiting for social housing because very few private places accept housing benefit and even if they did you've no way of getting the deposit. And then someone you don't know, someone who owns a nice house in a nice area. Someone who has a family who loves them and supports them turns around and calls you a "waster" who "never contributes anything to society." Is that entirely fair? People are not born "wasters" they are MADE by a combination of environmental and social factors. No baby is born looking up to the world thinking "I'm going to do nothing with my life." It is unfair to judge those struggling just as it is unfair to judge those who have worked hard and made something of themselves. Working hard doesn't always get you anywhere further than the next street. If it did we'd all be millionaires.

But you are right. EVERYONE feels hard done by. Not just the poor, working class. There has been equal amounts of moaning from high earners and millionaires. The lower class are not the only one's moaning, but perhaps the only ones you are listening to and judging.

^ she has said it far better than I would have and for that I thank you.

Shenanigans, I'm tempted to agree with some of what you say, but I definitely don't agree with all of it! But thanks for your contribution.

You claimed in your first post that the coalition was waging war on vulnerable people. That is an outrageous statement and if I were a Tory or LibDem politician (which I'm definitely not) with poor people in my constituency, for whom I was genuinely doing my best, I'd be doubly outraged. As I've already said, the austerity measures which have been introduced (out of necessity, note) inevitably hit poorer people harder since they have little or no room for manoeuvre. But how else are the books to be balanced unless wide-ranging stringency is introduced? To say that "we'll only hit the toffs and millionaires" might satisfy those on the extreme Left but it sure as hell won't reduce the deficit by very much - and it certainly wouldn't get us back on track economically inside at least 20 years. We all have a role to play, however painful it is.

Reverting to "toffs", I accept that your definition may well be valid but there is no doubt in my mind that the term is very often used in today's world in a derogatory sense - as in Enthused's use of it in her post! I've been accused of being one myself, merely because I speak as many former army officers do, but what utter nonsense, since the way I speak in no way reflects my sympathies for example for the plight of the poor or my loathing for tax evaders - or my views on many other things.

Enthused's post implied that there is something wrong or disgusting about millionaires and perhaps that, along with toffs, they are somehow the cause of the poverty of people she knows. Well, of course they can ride the financial storms better than most - I suspect they wouldn't be millionaires in the first place if they couldn't. But it's not their fault that the country is in the economic mess it is and since their ability to create jobs is part of the way out of that mess, don't for Gawd's sake knock'em unfairly. You in your own post refer to tax avoidance as though that's some sort of a sin, exploited by the wealthy. Sorry, but in my book it's not. If you, through your own initiative and effort, have built up a business which you sell when you retire, leaving you capital of say £800K and you've bought a house years ago which now has a market value of £700K, and your great-aunt Fanny died and left you another £300K, if you were so foolish as to now die those who you leave behind would at today's rate of inheritance tax have to pay the Exchequer 40% of £1.42 million, even though you had paid all your taxes along the way. Almost anyone owning a house in the London area may find it valued for probate at more than the £380K inheritance tax allowance and that, together with their other savings, means that their family, or whoever, would be liable for 40% on the total value of their estate beyond the allowance. So anyone who doesn't minimise what goes to the Exchequer rather than to their inheritors, is either very generous or very foolish (depending on your point of view!)

Your post suggests that I used the term wasters to describe the poor in general. I did no such thing. I merely said that if all wealth were redistributed evenly across the whole population then the wasters would rejoice - not, repeat not, that all the poor were wasters. But be clear, there are wasters out there. I've seen them in Northern Ireland where there were families (happily a minority) who'd never done a stroke for generations and were content to live on benefits - and I dare say we have our share of them in most parts of UK. But in no way do I blame the poor for being poor - except for the wasters! And to put things into perspective, we should acknowledge that despite the current economic stringency, and unfortunate though that is for those living on the margins, we are still one of the richest countries in the world. More people own their houses than ever before, more people run cars, take holidays abroad, buy the latest computers/TVs/mobile phones and so on than ever before. I know that's little consolation to those at the bottom end of the pile - but it's verging on the criminal to accuse the coalition of actually waging war on them.

Finally, I'm judging no-one (who the hell am I to do so). But I do strongly believe that we have to get out of the mess we're in by ourselves, and that inevitably means sacrifices from all of us.

Tony.

PS. Effer, along with millions of us moaners here in UK, I'm currently moaning that NZ seems to have beaten England in the T20 match in Bangladesh on the basis of the Duckworth/Lewis formula, just because rain stopped play in a match which England would undoubtedly have won had the full game been played ... It's not fair!!!

PPS. I'm not at all clear just what proportion of the UK's debt will be inherited by Scotland if they vote for independence - but I can see trouble ahead!

There are two methods of calculating Scotland's share of the national debt, but both of these coincidentally give almost the same number, so it's broadly irrelevant. One of the methods is by population.

I agree with much of what Shennanigans says about the government's war on vulnerable people; it is the people who are most vulnerable, as are many members of this site, who will struggle the most. These things are never fair; closing hospitals and schools when the rich can opt out of the system, and closing SureStart Centres, which have done so much to provide support at a crucial age.

The previous government did rake up a lot of debt. I don't agree is was irresponsible; indeed it kept us out of a triple dip recession, and was beneficial for the socio-economic growth. Areas that had heavy investment include 'Building Schools for the Future' and 'New Deal' (housing) both of which have had enourmous impact at completely turning around huge areas of my borough, with schools that were once the worst in the UK now some of the best inside a decade, and estates that were the cheapest place in Europe to by heroin, completely regenerated.

In my opinion, the people who complain most about government spending, are always the people who could easily afford to pay a little more tax without any hardship. People who have no idea what it is like to struggle on minimum wage, with is grossly inadequate especially in London, especially for families.

In regards to closing schools or hospitals - what a shocking idea. Things like this cost lives. I currently live in an area of London where hospitals seem to be closing left right and center. This means at night, if I am ill, it will require two night buses and a long walk to get to A&E, which is disgraceful in such an urban area, surrounded by huge shopping centers and huge stadia. People are dying, people have already died, as a result of these closures. I don't think I could ever justify losing lives for the sake of saving some money.

Well talaiporia, I'm afraid I cannot accept for a moment that the coalition is waging war on vulnerable people, as I've already said in response to shenanigan's post - and I still maintain that that is a disgraceful accusation. The government is simply trying to balance the books after years of overspending by the previous bunch. If you don't believe that the books should be balanced at all then we must assume that you are happy to see increasing debt mounting up to be paid for by our children and grandchildren. But be aware that as the debt mounts up, fewer and fewer nations/organisations will be willing to lend to us at all, and those loans that can be arranged will cost more and more in interest, thus increasing our debts even further - a vicious spiral.

But if you do accept that the books should be balanced, please tell us how this is to be done without reigning in spending. You quote all the wonderful things done by the previous government in your part of London and I don't deny that these must have made a difference to many peoples' lives - very good, but at what expense? Actually, a good chunk of the £1.4 trillion which we now owe and which has somehow yet to be repaid.

You say that those who complain about government spending are the better off. Well, it might be argued that one of the reasons they are better off is because they've learned to control their own spending, matching income and expenditure, and they understand most clearly that the country must somehow do the same, however difficult it is.

Of course it would be sad and drastic for any schools or hospitals to be closed but my point is that if there are some which are not value for money then serious consideration should be given to closing them and thus saving a little on the enormous sums spent on health and education (both of course of great importance, but which must still be subject to financial priorities if the country is not to go bust). You mention access to your A&E. For the record, here in Suffolk, quite close to a main road, I cannot rely on an ambulance reaching here in much less than an hour - and then taking a further hour to get me to the nearest A&E. And I pay well over £2K in council tax. But if the council can't afford it, I can't have it. And the same applies to many of the services throughout the UK. Lots of desirable things out there, but if we can't afford them we can't have them.

Finally, relating to "waging war on the vulnerable", I do not for a moment believe that there is some sort of mafia consisting of the wealthy, toffs, millionaires et al who are out to grind the faces of the poor into the dirt. Some of the comments so far on this thread have suggested more than a whiff of the doctrine of envy. I personally feel genuinely sorry for those who are currently struggling financially, but despite the recession and current austerity, I doubt there has ever been a time when so little real poverty has existed in this country. And if you don't think we are still relatively well off, take a long hard look at much of Africa and many other parts of the world.

Meanwhile, let's grit our teeth and start trying to live within our means ...

Tony.

Far from balancing the books, the current government have put us more in debt (at the last general election the figure was around £1 trillion), as well has having significant impacts for the economy, spending much of the last five years teetering dangerously close to a triple dip recessions. For all the flaws of increased government spending, it is good in times of crisis, in times of recession; and it is the reason we didn't experience the same issues America did.

Indeed, we came out of the recession second only to Canada in terms of developed nations. Yes, the previous government raked up a lot of debt, but it wasn't done purposelessly or carelessly; it was done to keep the country financially stable and avoid losing our AAA rating, which would have had terrible implications for the country. Countries have debts; all the developed countries do, and increasing the spending isn't always a bad thing in the same way it would be for families or individuals as it stimulates the economy.

Hospitals and schools don't make money; they're not designed to, they're not businesses. The investment is aimed at the wider economy; providing bright, young, educated individuals who are fit to work, and can contribute to our economy. Investment in schools and healthcare leads to a stronger economy; we need only compare ourselves to the Scandinavian countries on one hand, and America on the other to see the difference it makes.

Living an hour or more away from an A&E costs lives. You mention the figures; so how much is a human life worth? What sort of figure would we place on right to live? Should we deny free healthcare to over 50s, or to those whose illness is self inflicted (such as self harm, obesity or smoking)? Where do we draw the line?

The arguments in this thread are incredibly simplistic, and demonstrate a lack of understanding of economics, and of management of recessions; both governments have, in my opinion, broadly made the right choices. A recession needs a period of high government spending, followed by a period of austerity (once the risk is over). Yes, I feel the current government have made cuts a little too early, but both governments have fundamentally made the right choices at the right time; and would have made almost identical choices had their roles been reversed. We have one of the strongest economies in the world, and it isn't politically driven.

Your lack of empathy for poor people struggling is really quite sad. You say we should just grit our teeth and live within our means but do you know what it's like having to decide to buy electric or food because you can't afford both? Going without a meal so your children can eat? I highly doubt you have ever been in that position and good for you but it doesn't change the fact this is a real issue for thousands of families. And what about the Red Cross opening food banks for the first time since WW2? I don't think a lot of people have a means to live within.

The benefits system needs to change. It is a fact that we cannot sustain it, but I think people take a very narrow view on what the benefits system is. There are more to benefits than housing benefit, JSA and incapacity/ESA. Yet these are the benefits being tackled even though, in the grand scheme of things, they are not the benefits our country spends the most on. As I said in my first post, benefit fraud is a tiny amount compared to tax fraud, yet it is being portrayed as a huge defecit to society.

I would like to see changes to our system. I do not believe that cuts to it, on a whole, encourage people to work. For example, there have been huge cuts to the housing benefits system by handing it into local council hands. A pretty sneaky way of cutting without the implications of those cuts being put onto the governments doors. It has been well reported that the vast majority of housing benefit payments are made to working families, not families of beneit claimants. Research has also proved that the current focus on sanctions to "encourage" work, does not work. The fear of sanctions pushes people to take lower paid jobs, less stable contractual hours, rather than waiting and finding more suitable work. Sanctions have been proven to exasperate unemployment, as people go in and out of unsuitable employment. I do not see the point in punishing someone for not visiting the job center website x times a week. If they are looking for work actively that should be enough. Yet the jobcenter now had targets to sanction jobseekers. It is an environment of "blame and shame" rather than support. Ultimately, it will not help our economy.

I have, and always will have, an issue with tax credits. People seem to glide over this benefit, as it is a benefit, because it has the word "tax" in it. Though it is regulated by the tax office rather than the DWP it is still part of our benefits system. I think this benefit in itself is proof that our country does not have it's priorities straight. Work should pay, yet we are subsidizing our pay with "tax credits" which is basically benefits. Until work does not need such a backbone of benefit support our county will always have a bloated welfare system. People speak about benefits trapping you, and it's very true. You may find work, but your low wage will still be subsidized by benefits, you will still need housing benefit to afford your rent. Even in work, you are still trapped within the benefit system.

Our government needs to focus more on the issues causing our massive benefit system rather than simply cutting it or throwing money further into it. Neither option fixes the underlying problems.

The problems are in private landlords charging excessively for rental properties, knowing that housing benefit will pay for their greed. The problem is with out education system which focuses it's resources on those who will get good grades, and therefore improve their league table scores, rather than making sure everyone who leaves school can read and write. I have seen this first hand. I am a good student, I learn quickly, and I was given a lot of help and support throughout school. I left with good grades. My school knew I would, that's why they helped me. I was good for their scores too. A friend of mine was not good at school, he had dyslexia and struggled a lot. He was placed in "general studies" rather than a science class. They did very little learning in the class. He was offered a reader and scribe for his exams, but as he explained, what's the point in getting help for an exam when he hasn't understood the whole year's work?

Long term unemployment, youth unemployment, they are not CAUSED by the benefit system, they are SUSTAINED by it. We have deeper rooted problems that the benefit system plasters over. Changing the plaster doesn't stop the original infection. Putting a cheap bandage on, or a very expensive one, doesn't alter the cause. Until we focus on the real issues nothing will change.