The British Try To Climb Out of the Ditch

The British Try To Climb Out of the Ditch

Mona Charen
Oct. 8, 2010

Three and a half weeks from now, Americans will decide whether to pull the emergency brake on a train that is headed to bankruptcy. Across the pond in Great Britain, which got aboard that train following World War II, the sparks are flying as the Conservative/Liberal Democrat coalition government attempts a very tardy, and accordingly much more painful, reversal.

The nation that built the most far-flung empire in the history of the world -- not primarily through conquest but through trade and colonization -- is now convulsed by protests as the coalition government imposes austerity. "Tory scum!" shouted protesters outside the Conservative Party congress in Birmingham last week. Half a dozen nearly naked, portly, middle-aged pensioners unfurled a banner (held strategically at waist level) proclaiming "Stripped Of Our Pensions." They were part of a massive rally (7,000 strong) of teachers, health care workers, and other public-sector employees who swore to "fight back" against the cuts proposed by the Cameron/Clegg government. Even the queen has been told to accept reductions to her generous yearly stipend -- though her response has thus far been more temperate.

When a society has become as socialized as Great Britain, it becomes difficult to say where the public sector leaves off and the private sector begins. Take the arts. We squabble about public funding for the National Endowment for the Arts and the National Endowment for the Humanities. And certainly, there is a good libertarian case to be made that these are not the proper province of government at all, and certainly not of the federal government. But in any case, government subventions amount to only about 10 percent of total arts funding in the U.S.

In the UK, on the other hand, government contributes 50 percent. So when the Cameron/Clegg government announced that it may cut subsidies to the arts by as much as 25 percent, the howls were piercing. Alistair Spalding, artistic director of the Sadler's Wells dance theater in London, sorrowfully complained to the Washington Post that if forced to seek private donations, he might not be able to stage such groundbreaking work as last year's interpretative dance "in which the pope sexually abuses an altar boy..."

Socialists dislike programs for the poor. They prefer that everyone receive welfare because they calculate, so far correctly, that it's much harder for governments to cut subsidies to everyone than to the poor. That's why, in the U.S., liberals go rigid at the idea of cutting Social Security benefits to the affluent. In Britain, Labour is incensed at the proposal by the coalition government to reduce the annual child subsidy that all Britons, regardless of income, receive. "No more open-ended chequebook," Chancellor of the Exchequer George Osborne explained. "No family should get more from living on benefits than the average family gets from going out to work."

This is the "same old Tories," a Labour leader complained, "hitting hardest at those who can least afford it." What? The government is proposing to cut benefits principally for the better off. Cuts to programs for the poor will be slight.

The British government, deeply in debt, is scrambling to avoid the fate of Greece, whose unsustainable obligations brought it to the brink of default until it was rescued by the European Union. Though full details of the budget will not be published until Oct. 20, leaks in the British press have suggested that the VAT tax will increase from 17.5 to 20 percent, that banks will be assessed added taxes, and that military spending will be reduced by 10 to 20 percent. Though Prime Minister David Cameron sought to quiet fears that drastic cuts in the military budget would compromise Britain's commitment to Afghanistan, he was less than convincing.

Though the coalition government has shied from suggesting cuts to the Great White Elephant, the National Health Service, it has proposed to restructure the program. Britain spends more on the NHS than on any other line item -- more than on pensions, social security, education, defense, transport, public safety, or interest on the debt. Under the previous Labour government, spending on the NHS tripled in just 12 years. It's the great black hole in the center of Britain's debt vortex. And yet the quality of care and efficiency of delivery are dismal compared with other European countries, and far inferior to the United States.

Or at least to the pre-Obamacare United States. The pain Britain is enduring should be instructive. They are trying to climb out of a ditch. If we grab that emergency brake now, we may avoid falling in.

I anxiously await Matt's input on this article. He is there, on the ground.

TexasBlue wrote:The nation that built the most far-flung empire in the history of the world -- not primarily through conquest but through trade and colonization -- is now convulsed by protests as the coalition government imposes austerity. "Tory scum!" shouted protesters outside the Conservative Party congress in Birmingham last week. Half a dozen nearly naked, portly, middle-aged pensioners unfurled a banner (held strategically at waist level) proclaiming "Stripped Of Our Pensions." They were part of a massive rally (7,000 strong) of teachers, health care workers, and other public-sector employees who swore to "fight back" against the cuts proposed by the Cameron/Clegg government. Even the queen has been told to accept reductions to her generous yearly stipend -- though her response has thus far been more temperate.

Well, it is the first I have heard of these protests tbh but they don't surprise me. The problem is that during 13 years of New Labour, the public sector has gone from relatively poor pay with a good pension with pay that - when the recession hit - became inappropriate along with overly generous pensions.

These people should not be blaming the coalition. They need to put the blame at the feet of the previous government who first lauded them with gold and then brought the economy to a grinding halt. Cuts need to be made. 99% of people here accept that. The private sector has been reforming pension schemes and giving low pay increases for the best part of 7 years now, I don't know what makes them think they ought to be protected from such cuts.

TexasBlue wrote:When a society has become as socialized as Great Britain, it becomes difficult to say where the public sector leaves off and the private sector begins. Take the arts. We squabble about public funding for the National Endowment for the Arts and the National Endowment for the Humanities. And certainly, there is a good libertarian case to be made that these are not the proper province of government at all, and certainly not of the federal government. But in any case, government subventions amount to only about 10 percent of total arts funding in the U.S.

In the UK, on the other hand, government contributes 50 percent.

I doubt that it is that high. Speaking of course as a heritage professional, I know that English Heritage (the QUANGO responsible for taking care of our historic properties) doesn't receive much money from central government. I don't remember the exact figures but most of their money comes from entrance fees, membership and merchandise. There has always been a plan to cut funding even more. As for museums, we discussed on another thread how the previous Labour government made entrance fees free and allowed them to set up as charities. This increased both revenue and visitor numbers while cutting funding from central government. Of course, I'm only coming at it from the heritage and museums sector but on that, I do not accept that 50% of funding came/comes from central government.

Besides which, the National Lottery gives a lot of money to the arts. That is private sector funding of a body regulated by the government. An independent panel decides how the money is spent and of course, it is funded by people who play the lottery.

TexasBlue wrote:Socialists dislike programs for the poor. They prefer that everyone receive welfare because they calculate, so far correctly, that it's much harder for governments to cut subsidies to everyone than to the poor.

Well that is rubbish. One of the major complaints against the last Labour government was that they made the poorest in society dependent on benefits. Certainly not everybody was entitled to all benefits but in some cases they were giving out some benefits to those that didn't need them. But it was the smaller benefits such as winter fuel subsidy for the over 65s, council tax relief for the over 65s. Their argument was that it would be more expensive to means-test than it was to give it out to everybody who fitted that criteria. There was no wholesale dishing out of cash to everybody.

TexasBlue wrote:That's why, in the U.S., liberals go rigid at the idea of cutting Social Security benefits to the affluent. In Britain, Labour is incensed at the proposal by the coalition government to reduce the annual child subsidy that all Britons, regardless of income, receive. "No more open-ended chequebook," Chancellor of the Exchequer George Osborne explained. "No family should get more from living on benefits than the average family gets from going out to work."

There has been "Family Allowance" as it used to be called since the 1960s and yes, everybody gets it. What they are doing is taking it away from those who earn more than a certain amount. I think it is very sensible, and the threshold is high enough. I hate when the media do this. When they first came into government, they were talking about reforming disability benefits and of course the media wheeled out a succession of blind, deaf paraplegics to wail about how they couldn't survive without it as though in the end, nobody would be allowed to get it. What they are trying to do is to make sure that those who really need it get it while those who have been signed off work with a bad back and have had no check up since being signed off, are not milking the system.

TexasBlue wrote:This is the "same old Tories," a Labour leader complained, "hitting hardest at those who can least afford it." What? The government is proposing to cut benefits principally for the better off. Cuts to programs for the poor will be slight.

Well, Labour are flexing their muscles with a new leader. It is just rhetoric.

TexasBlue wrote:The British government, deeply in debt, is scrambling to avoid the fate of Greece, whose unsustainable obligations brought it to the brink of default until it was rescued by the European Union.

That is a bit far fetched. We never came close to problems in Greece and better placed for recovery. This is just nonsense.

TexasBlue wrote:Though full details of the budget will not be published until Oct. 20, leaks in the British press have suggested that the VAT tax will increase from 17.5 to 20 percent,

lol, what? "leaks"?! This was announced in the emergency budget. What is to remain to be announced is how far those increases will go and how long it might last.

TexasBlue wrote:that banks will be assessed added taxes,

Of course. They were bailed out by taxpayers money after their recklessness. Now the payback, with interest thank you. And if they can already start to afford champagne parties then they can afford to pay us back.

TexasBlue wrote:and that military spending will be reduced by 10 to 20 percent. Though Prime Minister David Cameron sought to quiet fears that drastic cuts in the military budget would compromise Britain's commitment to Afghanistan, he was less than convincing.

The extent of this is unknown. I currently work for a military contractor and the powers that be don't seem too concerned.

TexasBlue wrote:Though the coalition government has shied from suggesting cuts to the Great White Elephant, the National Health Service, it has proposed to restructure the program.

*YAWN* Yeah, yeah, we know. Orwellian healthcare, death panels, virtual communism... yada, yada, yada.

It works but in the last few years too much money has been spent in the wrong places. And that is all that is wrong with it.

TexasBlue wrote:Britain spends more on the NHS than on any other line item -- more than on pensions, social security, education, defense, transport, public safety, or interest on the debt. Under the previous Labour government, spending on the NHS tripled in just 12 years. It's the great black hole in the center of Britain's debt vortex. And yet the quality of care and efficiency of delivery are dismal compared with other European countries, and far inferior to the United States.

lol, what?

http://www.photius.com/rankings/healthranks.html

We are at 18, you are at 37.

The_Amber_Spyglass wrote:

TexasBlue wrote:The nation that built the most far-flung empire in the history of the world -- not primarily through conquest but through trade and colonization -- is now convulsed by protests as the coalition government imposes austerity. "Tory scum!" shouted protesters outside the Conservative Party congress in Birmingham last week. Half a dozen nearly naked, portly, middle-aged pensioners unfurled a banner (held strategically at waist level) proclaiming "Stripped Of Our Pensions." They were part of a massive rally (7,000 strong) of teachers, health care workers, and other public-sector employees who swore to "fight back" against the cuts proposed by the Cameron/Clegg government. Even the queen has been told to accept reductions to her generous yearly stipend -- though her response has thus far been more temperate.

Well, it is the first I have heard of these protests tbh but they don't surprise me. The problem is that during 13 years of New Labour, the public sector has gone from relatively poor pay with a good pension with pay that - when the recession hit - became inappropriate along with overly generous pensions.

http://shirazsocialist.wordpress.com/2010/10/04/a-good-anti-tory-protest-in-brum/

Don't you just love articles written by Americans that aren't living in the UK?

No. This is another reason I hate opinion pieces.

The reason i posted it was to get the UK side of it. So far, i'm 0 for 2 on this.

TexasBlue wrote:The British government, deeply in debt, is scrambling to avoid the fate of Greece

Actually the coalition is barely doing anything about it. The total amount of government spending is being pushed back to (almost) 2008 levels. Hardly an "age of austerity" now isn't it? Not that it really matters so much, the comparison between our and the Greek's debt makes little sense given - we can afford to pay off our debt, they can't.

Best to pay that debt off then, right?

TexasBlue wrote:Best to pay that debt off then, right?

Even if we continued with Brown level spending, it won't be anywhere near as bad as the situation in Greece. London alone creates far more wealth then the whole nation of Greece. The "austerity" rhetoric coming out of the LibDem-Conservative media announcements are mostly hot-air. The real story lies in how they choose to alter the way front-line services work for taxpayers, not how much they are funded or how they are funded.

Yeah - like getting rid of PCTs (I work for one of those damnit *grumble*) which some are regarding as privatisation by the back door. There has been some attempt to present the white paper as a money saving initiative - getting rid of all the unnecessary pen pushers - which seems very strange to me, as those pen pushers will now simply be paid for *by* doctors directly, instead of through the PCTs.

In fact, instead of having a state funded body, the doctors - who may well end up taking on more administrative work themselves (not sure whether that's what most people envisaged what the LibCons started throwing around the phrase 'putting power in the hands of GPs) - will most likely end up subletting to private organisations. Not sure how any of this is supposed to be an improvement. Especially when in addition to GPs reorganising themselves and taking on private companies to deal with their administrative needs, there will also have to BE new NHS local authorities to take over from the PCTs those services which groups of GPs simply could not organise for themselves.

So yeah - that's one of the ways in which these supposed deficit cutting measures appear on closer inspection to have a few sneaky similarities with privatisation.

I'm not going to start wailing about the return of Thatcher just yet. But with regards to the 'deficit being much worse than we thought' excuse - it's beginning to wear a little bit thin.

But it's always best to pay off debt.... even in gov't.

TexasBlue wrote:But it's always best to pay off debt.... even in gov't.

As a principal maybe, but functionally it's not really all that important. The worst thing the debt has done to the economy so far is devalue our credit rating to AAB, which isn't that bad in itself and could have corrected itself as soon as the recession eases off slightly.