economic situation is dire

[Gringo]

UK inflation hits 17-month high

UK inflation accelerated again in April to hit its highest rate in 17 months, official figures show.

On the Consumer Prices Index (CPI) measure, inflation hit 3.7% - well above the target of 2% and the highest rate since November 2008.

On the Retail Prices Index (RPI) measure, which includes housing costs, inflation was up to 5.3%

This is what happens under a tory govt.

[snowychap]

UK inflation hits 17-month high

This is what happens under a tory govt.

He he.

Dear George/Gids,

You don't know me but I have the feeling I'm going to be writing to you quite a lot in the future.

Prices are up, baby, which is good for your debt problem and bad for the public.

Don't worry, I'll keep forecasting that it will get back to 2% soon and, hopefully, the public will continue to believe me and not investigate how crap I am at forecasting inflation. Please can I have more to do, please?

How's your new house?

Hugs,

Til next month,

Merv.

[snowychap]

Vince Cable plans new attempt to privatise Royal Mail

The government is preparing for another potentially explosive confrontation with the postal unions by attempting to privatise Royal Mail, the Guardian has learned.

Vince Cable, the business secretary, is determined to press ahead with a restructuring of the group, which could embroil the government in a dispute with the Communication Workers Union.

Cable has asked Ed Davey, his fellow Liberal Democrat and junior minister at the business department, to prepare the plan in detail. It is understood that the plan will be unveiled by David Cameron and Nick Clegg tomorrow as part of the full coalition agreement.

Royal Mail is expected to post a fall in annual profits as a result of last year's strikes.

Cable believes that while Royal Mail remains in state ownership it cannot compete in a liberalised postal market. Ministers are also anxious about Royal Mail's pension deficit, expected to be formally revalued at £10bn next month.

Cable is mindful that Labour's attempts to privatise the postal operator, led by his predecessor Lord Mandelson, failed last summer following a backbench revolt by more than 120 Labour MPs and a campaign by the CWU.

Unions and other campaigners argue that Royal Mail, as a provider of an essential public service, should remain in state ownership. The Lib Dem election manifesto said they would sell 49% of Royal Mail to free up funds for investment in the business. Employees would own half of the remainder in a trust and the government would keep the rest.

It is thought the Lib Dems believe that such an employee trust would help smooth the way for the privatisation, although the CWU is likely to oppose this. The Conservatives had advocated a straightforward sell-off of Royal Mail.

Work has begun to find common ground between the two approaches and the details will emerge over the next few months. The company made an operating profit of £184m in the first six months of the year, up slightly on the previous year. But the industrial dispute over Royal Mail's modernisation which led to national walkouts last autumn, dented profits in the second half.

...more stuff on link

Sorry but I thought the Mail (as all public sector things) was costing the taxpayer a fucketbul of cash - wasn't that what they've been telling us for a while?

Get your assets here. Assets for sale. Two furry pand...

[johnvillan]

[JulieB]

Indy headline rather brings home what I've been banging on about for months.

Despite the fact that UK taxes it's citizens to a huge degree our deficit is still higher than one of the most crooked

economies in the Western world - Greece!! (Even the Russians are shocked at what goes on over there!)

It's not just UK debts though.....this is a global problem!

[leviramsey]

New York Times"]

Across Western Europe, the “lifestyle superpower,” the assumptions and gains of a lifetime are suddenly in doubt. The deficit crisis that threatens the euro has also undermined the sustainability of the European standard of social welfare, built by left-leaning governments since the end of World War II.

Europeans have boasted about their social model, with its generous vacations and early retirements, its national health care systems and extensive welfare benefits, contrasting it with the comparative harshness of American capitalism.

Europeans have benefited from low military spending, protected by NATO and the American nuclear umbrella. They have also translated higher taxes into a cradle-to-grave safety net. “The Europe that protects” is a slogan of the European Union.

But all over Europe governments with big budgets, falling tax revenues and aging populations are experiencing rising deficits, with more bad news ahead.

With low growth, low birthrates and longer life expectancies, Europe can no longer afford its comfortable lifestyle, at least not without a period of austerity and significant changes. The countries are trying to reassure investors by cutting salaries, raising legal retirement ages, increasing work hours and reducing health benefits and pensions.

“We’re now in rescue mode,” said Carl Bildt, Sweden’s foreign minister. “But we need to transition to the reform mode very soon. The ‘reform deficit’ is the real problem,” he said, pointing to the need for structural change.

The reaction so far to government efforts to cut spending has been pessimism and anger, with an understanding that the current system is unsustainable.

In Athens, Aris Iordanidis, 25, an economics graduate working in a bookstore, resents paying high taxes to finance Greece’s bloated state sector and its employees. “They sit there for years drinking coffee and chatting on the telephone and then retire at 50 with nice fat pensions,” he said. “As for us, the way things are going we’ll have to work until we’re 70.”

In Rome, Aldo Cimaglia is 52 and teaches photography, and he is deeply pessimistic about his pension. “It’s going to go belly-up because no one will be around to fill the pension coffers,” he said. “It’s not just me; this country has no future.”

Changes have now become urgent. Europe’s population is aging quickly as birthrates decline. Unemployment has risen as traditional industries have shifted to Asia. And the region lacks competitiveness in world markets.

According to the European Commission, by 2050 the percentage of Europeans older than 65 will nearly double. In the 1950s there were seven workers for every retiree in advanced economies. By 2050, the ratio in the European Union will drop to 1.3 to 1.

“The easy days are over for countries like Greece, Portugal and Spain, but for us, too,” said Laurent Cohen-Tanugi, a French lawyer who did a study of Europe in the global economy for the French government. “A lot of Europeans would not like the issue cast in these terms, but that is the storm we’re facing. We can no longer afford the old social model, and there is a real need for structural reform.”

In Paris, Malka Braniste, 88, lives on the pension of her deceased husband. “I’m worried for the next generations,” she said at lunch with her daughter-in-law, Dominique Alcan, 49. “People who don’t put money aside won’t get anything.”

Ms. Alcan expects to have to work longer as a traveling saleswoman. “But I’m afraid I’ll never reach the same level of comfort,” she said. “I won’t be able to do my job at 63; being a saleswoman requires a lot of energy.”

Gustave Brun d’Arre, 18, is still in high school. “The only thing we’re told is that we will have to pay for the others,” he said, sipping a beer at a cafe. The waiter interrupted, discussing plans to alter the French pension system. “It will be a mess,” the waiter said. “We’ll have to work harder and longer in our jobs.”

Figures show the severity of the problem. Gross public social expenditures in the European Union increased from 16 percent of gross domestic product in 1980 to 21 percent in 2005, compared with 15.9 percent in the United States. In France, the figure now is 31 percent, the highest in Europe, with state pensions making up more than 44 percent of the total and health care, 30 percent.

The challenge is particularly daunting in France, which has done less to reduce the state’s obligations than some of its neighbors. In Sweden and Switzerland, 7 of 10 people work past 50. In France, only half do. The legal retirement age in France is 60, while Germany recently raised it to 67 for those born after 1963.

With the retirement of the baby boomers, the number of pensioners will rise 47 percent in France between now and 2050, while the number under 60 will remain stagnant. The French call it “du baby boom au papy boom,” and the costs, if unchanged, are unsustainable. The French state pension system today is running a deficit of 11 billion euros, or about $13.8 billion; by 2050, it will be 103 billion euros, or $129.5 billion, about 2.6 percent of projected economic output.

President Nicolas Sarkozy has vowed to pass major pension reform this year. There have been two contentious overhauls, in 2003 and 2008; the government, afraid to lower pensions, wants to increase taxes on high salaries and increase the years of work.

But the unions are unhappy, and the Socialist Party opposes raising the retirement age. Polls show that while most French see a pension overhaul as necessary, up to 60 percent say working past 60 is not the answer.

Jean-François Copé, the parliamentary leader for Mr. Sarkozy’s center-right party, says that change is painful, but necessary. “The point is to preserve our model and keep it,” he said. “We need to get rid of bad habits. The Germans did it, and we can do the same.”

More broadly, many across Europe say the Continent will have to adapt to fiscal and demographic change, because social peace depends on it. “Europe won’t work without that,” said Joschka Fischer, the former German foreign minister, referring to the state’s protective role. “In Europe we have nationalism and racism in a politicized manner, and those parties would have exploited grievances if not for our welfare state,” he said. “It’s a matter of national security, of our democracy.”

France will ultimately have to follow Sweden and Germany in raising the pension age, he argues. “This will have to be harmonized, Europeanized, or it won’t work — you can’t have a pension at 67 here and 55 in Greece,” Mr. Fischer said.

The problems are even more acute in the “new democracies” of the euro zone — Greece, Portugal and Spain — that embraced European democratic ideals and that Europe embraced for political reasons in the postwar era, perhaps before their economies were ready. They have built lavish state systems on the back of the euro, but now must change.

Under threat of default, Greece has frozen pensions for three years and drafted a bill to raise the legal retirement age to 65. Greece froze public-sector pay and trimmed benefits for state employees, including a bonus two months of salary. Portugal has cut 5 percent from the salaries of senior public employees and politicians and increased taxes, while canceling big projects; Spain is cutting civil service salaries by 5 percent and freezing pay in 2011 while also chopping public projects.

But all three need to do more to bolster their competitiveness and growth, mostly by changing deeply inflexible employment rules, which can make it prohibitively expensive to hire or fire staff members, keeping unemployment high.

Jean-Claude Meunier is 68, a retired French Navy official and headhunter, who plays bridge to “train my memory and avoid Alzheimer’s.” His main worry is pension. “For years, our political leaders acted with very little courage,” he said. “Pensions represent the failure of the leaders and the failure of the system.”

In Athens, Mr. Iordanidis, the graduate who makes 800 euros a month in a bookstore, said he saw one possible upside. “It could be a chance to overhaul the whole rancid system,” he said, “and create a state that actually works.”

[snowychap]

Despite the fact that UK taxes it's citizens to a huge degree

I'd say we were, at worst, average for OECD countries.

[wiganvillain]

Despite the fact that UK taxes it's citizens to a huge degree

I'd say we were, at worst, average for OECD countries.

We're probably low to average on direct taxes Snowy, it the indirect stuff where we lead the world

[JulieB]

We're probably low to average on direct taxes Snowy, it the indirect stuff where we lead the world

Indeed.... It's how much tax each of us pay out of every pound we earn in whatever form we pay it.

[Risso]

My top rate of income tax has just gone up from 18% to 20% :evil:

[jonno_2004]

My top rate of income tax has just gone up from 18% to 20% :evil:

Wouldn't you say that was a necessary evil given the state of the economy at present?

[wiganvillain]

My top rate of income tax has just gone up from 18% to 20% :evil:

Typical bleeding Accountant.

Pays half of his equivalent UK rate and moans :winkold:

Dire straights on IOM then Risso, 1 pint less a week

[snowychap]

We're probably low to average on direct taxes Snowy, it the indirect stuff where we lead the world

Indeed.... It's how much tax each of us pay out of every pound we earn in whatever form we pay it.

How are you measuring that?

The tax burden comparisons wouldn't support that (yes we are a lot higher than somewhere like the US but in comparison to other EU members we're still on the low to average side).

[JulieB]

How are you measuring that?

I was reading an Ernst & Young report in an email a while ago. Don't forget it's including ALL taxes fuel tax, tax on fags and booze, VAT, PAYE, NHI, IHT. Taxes on Pensions the whole remit. Top rate of income tax is now 50%.

[snowychap]

Don't forget it's including ALL taxes fuel tax, tax on fags and booze, VAT, PAYE, NHI, IHT. Taxes on Pensions the whole remit.

Which is the tax burden.

There was an Ernst and Young report which showed that the tax burden was due (in 06/07) to be the highest it has been in this country (about 37%) and it has probably increased since (The Adam Smith Institute have it estimated at around 40% for this year). In '07 we were about average for the OECD, I would suggest that hasn't changed much (as we've gone up so, I would expect, have others). I'm not sure whether there are any OECD figures and comparisons for '09.

[snowychap]

http://www.youtube.com/watch?v=qOP2V_np2c0's a nice little animation thingy. It's an accompaniment to a speech about the recent capitalist crises.

[Xann]

http://www.youtube.com/watch?v=qOP2V_np2c0's a nice little animation thingy. It's an accompaniment to a speech about the recent capitalist crises.

Been looking at similar stuff.

[CVByrne]

http://www.youtube.com/watch?v=qOP2V_np2c0's a nice little animation thingy. It's an accompaniment to a speech about the recent capitalist crises.

It's pretty interesting. Few things I agree with,

1) Home Ownership, the state fuelled push to get people to buy homes, giving tax breaks to developers, interest relief to first time buyers etc.. I've never bought into the idea I must own a home and have had to defend my reluctance to buy a home many times during the years before the bust. Buying a first home is one of the most important things a person is going to undertake in their lives and people were doing it whimsically, fuelled by some banks 100% mortgages.

The belief that if you didn't buy now you'd have to pay 10% more next year or 21% if you waited 2 years. The words property ladder. I remember explaining that no housing boom with price inflation of the scale we had in Ireland will have a "soft landing" no, it is always a bubble. I'm happy that I managed to convince a friend not to buy a home a few years ago with his now ex girlfriend.

2) Debt, people indebting themselves. People who live permanently on credit, who keep buying things even if they are in debt. People who feel the need to spend, on clothes or the newest gadgets etc.. But I have had the same PC since 2002 and it keeps breaking and rather than buy I new one I keep repairing it, so I'm not someone who spends money on things. I have no debt and have never had a loan. But certainly this over consumerism has been and still is a problem. But it's the cycle that is required, if people stop spending on things we don't need we'll enter recession again and jobs will go in the retail sector.

Though I am certainly no Marxist, I do believe Capitalism is the best option of the many we've had in history. But I'd have plenty of social aspects, like free medical care & free education including 3rd level with no private aspects of either permitted. There is nothing more disgusting than profiting from the ill health of others and there should be no financial boundaries on any child attend any level of education.

Armed with these two rights people have as level a playing field as possible when finding work.

[snowychap]

You seem to be blaming people for the faults inherent in the system and for how their economic and political masters direct them.

But it's the cycle that is required, if people stop spending on things we don't need we'll enter recession again ...

Why is it the 'cycle that is required'?

Should we not find a better way to measure the health of a nation's economy (and a world economy at that) than GDP?

[CVByrne]

You seem to be blaming people for the faults inherent in the system and for how their economic and political masters direct them.

Not exactly, it's a weakness in character that people were so willing to buy homes with out being fully able to meet their obligations if things went bad. People need on some level to accept the consequences of their actions. Yes government is to blame for the propaganda and drive to get people into home ownership but in the end it is still the choice of each person to do so.

Why is it the 'cycle that is required'?

Should we not find a better way to measure the health of a nation's economy (and a world economy at that) than GDP?

B because to break the cycle and find a better way would require the front loading of more economic pain. To dismantle consumerism would result in millions of lost jobs. Similarly if war was ended how many millions would be out of work.

I'm a pragmatist, it's all well and good talking of change, indeed it's noble. But without the will of the western world it can never be achieved. The flawed system with a new layer of band aids is what will continue.