Sovereign debt, politics and unemployment

Sunday, January 17th, 2010 - politics, sunday thoughts


Sovereign debt, politics and unemployment

London

As we build up to the 2010 UK general election in what now seems will be May or June, our politicians are already practising their hustings delivery. I am sure by the time we get to the ballot box in early summer, all will be fed up to the back teeth, and will just want to vote – so tick any box to relieve the pain.

This could result in a surprise outcome, with many in the media predicting a hung parliament. I prefer a more positive slant on this scenario, where by it might mean that the Monster Raving Loony Party could hold a balance of power.

Am I serious? Well yes, because if we keep on going as we are, the conclusion must be that the current crop of politicians can’t be trusted to run the country: so why not the Monster Raving Loony party?

First, a bit of background. Personally as a business person, and working in the field of employment, it is people I am more centric to than ideology. I admire 99.9% of politicians for standing up and doing something for their community and their country, but as a business person I am not held by one “church” of thought. Its why personally, business people should stay out of representative politics, as we choose the right solution over the best in house solution. Hence from my view point, an ultimate philosophy Labour strategy would be uneconomically sustainable; while an ultimate Conservative strategy would be socially immoral. It is hence why if I had to make a call now on which way to vote, I would go Conservative: David Cameron is a true believer in the NHS thanks to experiences with his son Ivan, much as though I don’t know yet if Cameron or his team are trust worthy enough to run our country?

Sovereign debt

The problem presently in the UK is that we need to address the sovereign debt issue, and fast. While we rack up debt, in the short term our competitors grow away from us – particularly based in the East – making us poorer in the long term. In the short term, it means that growth is capped, and that means reduce spending and a reduction of spending on social programs and infrastructure.

There is not a lot we can do about the growth of various Eastern nations growing ahead of us – India and China between them at 2billion in population, represent over 30% globally of human kind – but we need to keep a chip in the game. Language won’t be enough, or historical ties.

But its the short term problem that worries me: the working man, the mother, the children, the pensioners. So great are we racking up debt, that all and any payments from the state to these people could cease. George Osbourne suggested this week that he would cut state benefits to all households earning over £50,000pa, to which he was met with derision by Labour. Get real: with income of £50,000 per annum, child benefit of £20/week is one hours household earnings.

Politics

As Liam Halligan points out in the Telegraph this weekend, the failed coup de ta in Labour has probably changed the whole scope of the 2010 electoral platform:

  • Hoon/Hewitt stage their poor coup
  • This gives Alastair Darling the gumption to faceout Gordon Brown, and stop him out spending the Tories
  • This results in Darling and Mandelson forward positioning a strategy around cutting the debt/who do you trust most
  • The Tories need to react

Halligan also points out that the debate presently is pretty shallow. Even Osbournes cuts of £7billion coming into effect in two years time won’t cut a debt mountain that will be added to by £200billion in 2010, and another £200billion in 2011, and another £200billion in 2012. Most economists agree with this £800billion nightmare scenario, adding in the 2009 debt. The conclusion is that the cuts need to be more drastic.

Is this a bleak and austere prospective? Under reading Halligan, I agree with him that presently so far out from the actual time when you and I will be stood in the ballot box, most of the politicians are too scared to mention the A word, and are only presently talking about the C word. I think it is why Brown in his post-coup debate with Darling won the date of the election debate: put the budget on in April, chuck a few “We’ll spend on this” balls out to the voters, let them go to the ballot box in May or June in the positive towards Labour frame of mind, and then cut like crazy on June 7th! Darling may not agree with Brown, but both are politicians who love being in Downing Street, and that strategy means they might be there in June for five more years.

2010 Unemployment

This website and blog is about jobs, and I stated in the New Years predictions entry that unemployment would be higher at the end of 2010 than the begining, though Government cuts. What do I mean by that?

In looking at government spending, it has ballooned under Labour. Now in part, that’s not a bad thing, as 12years under the Conservatives they had cut to the point where as a country we were bleeding, and had old schools and hospitals which would have been pretty familiar structures to the WW2 military personnel who saw their children born in them, as they themselves were being treated for the ailments of age. However, the speed at which the change investment occurred resulted in greatly excess costs. The Public Finance Initiative is an excellent example of good spin and poor economic value: a Scottish airport redeveloped in 18months, that having paid the costs in three years will still be being paid for 20years later, giving the developer a 2000% percent return on his money! Personally always focusing on the NHS, its the doubling in the number of managers that worries me, while nurses are up by only 30%. Senior management pay in the NHS has quadrupled, on the back of a strategy to acquire “world class” talent.

In the past, the Daily Mail has lead the media into pointing out daft Government jobs and excess spending. I am pretty sure the press will run at this issue again in 2010. They may not find the easy targets of the past, but they are still there. But here’s what I have found, and why government cuts don’t worry me if approached in the right way:

  • I went over to the Civil Service jobs website, and tapped in “manager” as my search phrase
  • Back came some 76 results in the UK
  • One job is titled “Strategy Manager – Inclusion” The advert states that “The post holder will ensure draft strategies, standards, guidance and activities are developed that reflect the YJB’s approach to end-to-end youth justice. This will require collaboration with key colleagues within the directorate, the YJB and external stakeholders”
  • One job is titled Strategy Manager – Prevention Portfolio & Reducing Reoffending Strategy” The advert states that “The post holder will ensure draft strategies, standards, guidance and activities are developed that reflect the YJB’s approach to end-to-end youth justice. This will require collaboration with key colleagues within the directorate, the YJB and external stakeholders”

Personally, I can’t see a difference in the two Job Descriptions, so if I was advising a job seeker who saw either of the adverts, I suggest that they apply for both. What really gets me though, is why either job is needed in the first place, which is what would be asked in the commercial world where costs come first.

In my basic search on the Civil Service jobs website, I also found a job for a painter and decorator of prisions in the West Midlands. The advert states the job will “play an active part in the planed maintenance schedule for the establishment. As well as supporting any reactive maintenance requirements.” Unfortunately, its only open to existing Civil Servants – like the other two posts. All three look like internal promotion positions, something which is not occurring too regularly in the commercial world, but seems rife in that of the Civil Service.

Here’s how a different scenario could work, and why I am not worried by government cuts:

  • It is a well know fact, that crime is related to jobs. People mostly offend in the first place because they are unemployed, or reoffend because they can’t gain employment
  • Give the painters and decorators job to Prince’s Trust, the most efficient organisation at turning around kids excluded by our less than efficient at turning out those who can read and write than under the Conservatives, and the most efficient at turning around reoffenders
  • The Prince’s Trust take a young person off of the dole cues, and put them alongside an unemployed 50something experienced painter and decorator. With a combined £2000+ grant, they could buy a van and all the materials required to set up in business
  • HM Prisons Service agree a contract with the West Midlands latest new small business, and get two people for the price of one!
  • The outcome: no need for £100,000pa government spend, which by the time it hit the sovereign debt pile would be £400,000. Three civil servants don’t get a promotion, but are still paid at a lower level; the civil service doesn’t expand, so at least the debt pile is not accelerated. One new enterprise created, two people taken off of the dole cue, and two new jobs that pay tax to reduce the sovereign debt.

Do you want your sovereign debt racked up by a government that advertises internal promotion jobs, and blocks reducing the dole cue? I have still not made up my mind to who vote for, but the reasons for who to exclude could eventually decide, not win, my vote.

You see, if we keep going as we are, I was serious about the Monster Raving Loony party!

Good Luck!

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2 Responses to “Sovereign debt, politics and unemployment”

  1. Retha Ambrosio Says:

    Great blog! I really enjoyed reading your posts.i’ve also bookmarked your feed to stay in touch with your news.

  2. Barbara Says:

    Context of this post only serve to reinforce my circumstances for paying close attention to every word you say.

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