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Britain finally emerges from double dip recession

Olympic effect lifts the UK economy to growth of 1%, after three quarters of economic contraction.

 
Britain finally emerges from double dip recession

The British economy finally accelerated out of a lingering double-dip recession in the third quarter of the year, when GDP grew by a surprisingly strong 1% helped by Olympic ticket sales.

The growth follows three consecutive quarters of economic contraction as the economy has been hit by the slowdown in the eurozone as well as reduced spending by companies and cash-strapped consumers.

A third-quarter expansion was expected – economists on average forecast growth of 0.6% – after the boost provided by the Olympic Games and as part of a statistical rebound from a second-quarter reading that included the additional bank holiday for the queen’s jubilee. 

As well as ticket sales, the Office for National Statistics (ONS) said the 'Olympic effects' that helped produce the fastest quarterly growth for five years boosted employment, accommodation, transport and retail.

Output from the production and service industries grew in the quarter, but construction sector output decreased by 2.5% 

GDP and its main components (source: ONS)

The pound, which was already higher ahead of the news, leapt to $1.6106. The FTSE 100 added to its gains, up nearly 0.6% on the day to 5,835

Today’s figure is, however, the first of three readings from the ONS, each of which are apt to change as they take an increasing amount of data into account. Economists warned that the UK economy's underlying weakness remains. 'Business survey data suggest that the economy's underlying quarterly growth trend over the past two quarters has been more like 0.1-0.3%,' commented Chris Williamson of data company Markit.

Alan Clarke warned that the figure could get revised lower, but he added: 'There is a very good chance that UK GDP growth for 2012 might find itself on the right side of zero. It is a close call, but we suspect that the UK avoided a contraction for the year as a whole.'

More stimulus?

The figure provides ammunition for Britain’s coalition government, which has come under increasing pressure from the International Monetary Fund to reduce its austerity plans in order to let the economy grow. 'There is still much to do, but these GDP figures show we are on the right track, and our economy is healing,' commented prime minister David Cameron, by way of Twitter.

It will also raise questions about the Bank of England’s next move, with expectations still high that the Bank’s monetary policy committee will provide more stimulus when it meets on Threadneedle Street in two weeks. That is when the £375 billion quantitative easing programme will have been exhausted.

Bank governor Mervyn King cautioned on Tuesday night that the bond-buying scheme – which has been widely criticised for its lack of effect on the ‘real economy’ – has its limits, and that Brits should be ‘patient’ in the face of a slow global economic adjustment. King has said that the economy will zig-zag in and out of growth this year.

Cameron breach

Cameron (pictured) has been accused of leaking the news that Britain is out of a recession by telling the House of Commons yesterday ‘the good news will keep on coming’.

Labour said the comment was a 'clear reference' to the official GDP figure. Cameron is one of a handful of people given access to market-sensitive information such as GDP figures ahead of their publication.

A spokesperson for the ONS this morning declined to comment on whether Cameron had breached the rules.

74 comments so far. Why not have your say?

Alan Anderson

Oct 25, 2012 at 12:24

Sorry, how many billions were spent on the Olympics(is it okay to use that word now?)in order to scrape a 1% blip? What have they got lined up for the next quarter - HS2?

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Tony Peterson

Oct 25, 2012 at 12:30

And lurking amongst all that promised "good news" is the bald fact that food, worldwide, is going to be in very short supply next year, with all that that means for inflationary shocks up the road.

What will happen when all that newly printed money starts chasing ever dwindling piles of grain.

I suppose if the bread is getting more expensive at least circuses, like ringmaster Cameron's one, might get cheaper.

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Trevor T

Oct 25, 2012 at 13:07

We hear how the extra day's holiday in Q2 dragged down the GDP that quarter. If this is really so, does it not mean that were the entire country to work for one weekend it would give a corresponding boost to the GDP?

If so, sounds like a simple and relatively painless medecine for helping the economy to get back on track...

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Steven McCann

Oct 25, 2012 at 13:16

@Alan Anderson.

Probably their bonuses for getting to the positive side of zero.

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Calvin Allen

Oct 25, 2012 at 13:17

TT - if you look at the amount of unpaid overtime that workers are putting in, we're already working far more than an additional weekend for free every quarter...

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Alan Anderson

Oct 25, 2012 at 13:18

Trevor T, many people are working Part Time but the unemployment statistics count a 3 day week the same as a 5 day week. Down at the coalface there just isn't enough work. An extra Bank Holiday just means extra cost for the employer who is contracted to pay his staff for the Royals to monarch around.

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Clive B

Oct 25, 2012 at 14:17

Calvin Allen

I can't remember the last time (mid 1990s ?) I had a job that even allowed for paying overtime and I'm just a grunt worker, not a manager. Personally, I'd rather accept working a bit more than my contracted hours (though it impacts my effective hourly rate) than have no job at all. You could say "ah, but you're doing somebody out of a job, if you & others didn't work longer hours, they'd have to employ more people", but the simple truth is - they wouldn't.

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J Thomas

Oct 25, 2012 at 15:13

What I find very odd is no one from the ONS ever mentions we had an extra day this year in Q1 for the 2012 leap year. Surely this more than cancels out the extra public holiday.

Not everyone had an extra holiday, yet everyone to my knowledge had an extra day called February 29th.

Strange.

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Alan Anderson

Oct 25, 2012 at 15:36

J Thomas, I nominate you for the Governor's job, Bank of England. I think your attention to detail will pull us out of this ex-recession.

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Geoff Downs

Oct 25, 2012 at 15:37

None of the causes of the double dip recession have been solved, have they?

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J Thomas

Oct 25, 2012 at 16:34

Alan,

Thank you for your kind nomination for Governor of The Bank of England.

However I fear that the fact I run my own business and I am self employed would rule me out of the equation right away.

The vacancy is closed to all except apparachics who would blend in perfectly with the Chinese ruling party.

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David Harvey

Oct 25, 2012 at 16:40

It would be nice to just accept this as good news but how reliable is this GDP figure anyway? Was the Olympics boost just another form of printing money anyway?

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James B. Johnson

Oct 25, 2012 at 17:43

This is a first.

For once I agree with each and everyone of your bloggers.

Just wait until the bad weather kicks in in Q4.

Out of recession? Marginally (possibly).

Why is Cameron urging everyone to rejoice?

Probably to divert attention from his (allegedly) salacious e-mails, which, of course, are not relevant to the relationship between press and politicians!!

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Ted Thornton

Oct 25, 2012 at 18:04

How is GDP meaured? Is it GBP or is inflation taken into account?

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Chris B (Slough UK)

Oct 25, 2012 at 19:48

Did this GDP figure factor in the £24+ Biilion pounds that the Olympics cost?

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Alan Anderson

Oct 25, 2012 at 20:11

Chris B, no, of course not, because this £24+ billion pounds was part of the debt 'we inherited from Labour'. How many times do I have to repeat this, Chris?

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David Harvey

Oct 25, 2012 at 21:11

I thought this GDP thing was what they used after the war to measure progress. These seem to be different times with different needs. Is GDP still as helpful as they are making out? I am thinking that if it isn't it might raise higher hopes than are warranted and cause wrong decisions.

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Chris B (Slough UK)

Oct 25, 2012 at 22:22

Alan, apparently Labours contribution was around £800 Billion of debt when they left. The debt had reached 1 Trillion last January apparently. 64% of GDP, so we were sailing extremely close to the wind back then. The Mastricht treaty set the maximum allowable level of GDP to 60%.

Sadly with unfunded liabilities the figure goes up to £3.6 trn or 244% of GDP.

I saw another figure which was put at £5.5 Trillion. Well if these figures are any where near right, one thing is for sure, we are all screwed! Oh yeh + £24 Billion from the lympics.

As Cameron pointed out, you can't borrow your self out of debt. He forgot to say "but you can make a hell of a lot of dodgey money (and screw your people at the same time)",

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Alan Anderson

Oct 25, 2012 at 22:58

Chris, many thanks for the figures! The £24+ billion filled in the blank in my original comment. It sounds like with debt at these levels we don't need to spend another £ billion(you probably know the amount)on the Trident upgrade. Who would want to attack us. G'night.

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Tony Peterson

Oct 26, 2012 at 08:12

Money, for governments, is not the same beast as money seems to be for individual citizens. Many posters here have primitive notions of money as if it was a finite collection of tokens which stored wealth, and which could be saved or loaned or borrowed.

Money in the modern world is an accounting fiction which lubricates the interchange of goods and services between citizens. All these rants about deficits are pure humbug. The overall welfare of citizens is what matters, not the state of the books.

Over my lifetime money has lost 99% of its purchasing power. Yet over that same period, excluding war, the overall welfare of citizens has never been higher.

It is obscene for our present government to hammer the poor, the disabled, the chronically ill, the elderly, savers, students, children, so that purchasing power can be transferred to the wealthy in bucketloads, and all with the excuse that the previous government left them with a deficit. Jimmy Savile was the merest of beginners when it comes to abusing the helpless.

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DirtyHarry

Oct 26, 2012 at 09:09

Lies, Damn lies and statistics!

Does anyone know if the olympics have been paid for or has it been set up as a giant PFI to be paid off by our would- be future athletes?

There is one truth that all of us will continue to get poorer as our elected representatives continue to give our money away to keep themselves in power.

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keith smith

Oct 26, 2012 at 09:23

does this mean we will be geting a sustantial amount of intrest on our dwindling saveings ?whos kidding who lies and more lies

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David Harvey

Oct 26, 2012 at 09:52

Tony Peterson.

I have been trying to say the same thing on here but it seldom gets a hearing as people afraid to loose out themselves go into "Brown did to us " mode. Many ignore the fact that Thatcher destroyed the industrial base that we would have been using now to get us out of this.

The Thatcherite money from money brigade sent a chain letter into the future for us and now it's gone bad. It's so easy to just bludgeon poorer classes than to admit how desperately we need to get away from money from money alchemy and start to produce goods. We are an inventive nation and with the right incentives can still come up with the goods.

If we could get away from the Thatcher style training courses and start proper apprenticeships again to produce real trades people. It's the pathetic training we have given here since her day that has produced all the people we have to rely on these days who seem to do little more than bodge ups for anything we want done.

I voted for Thatcher but I wouldn't vote for Cameron. But we need to admit what she left us with as well as what Brown left us with in order to rebuild a skilled world class nation again.

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Tony Peterson

Oct 26, 2012 at 10:09

David Harvey

Wonderfully analysed. I could not agree more.

Or as some great paraphraser put it - amidst all of Thatcher's silly deeds none beats giving away the meccano set while keeping the monopoly one.

Thanks for you contribution. (By the way, I didn't vote for either).

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DirtyHarry

Oct 26, 2012 at 10:25

Thatcher did to the british industrial base what bomber command did to the German industrial base. However the main target for Thatcher was the incidious over empowerment of and blackmail by the trade unions in the 1970's which had brought successive short lived Tory and Labour administrations to an end by not swaying to the flexibility needed by international trade issues evident at the time. Bloated and innefficient nationalised industries were sold off quite rightly to become entities that had to stand up without constant state aid.

The economy since then has been allowed to continue to be out of balance and the welfare bill has been allowed to balloon - mostly because of treaties made with other indebted members of the EU allowing immigration to push more and more of our population into welfare.

We are inventive but for many years we have enabled many of our global competitors to become inventive. Recent history shows that we give away our innovations for others to make money from. That is where the change must come.

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Geoff Downs

Oct 26, 2012 at 10:35

The manufacturing base in the UK was in decline long before Thatcher.

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Geoff Downs

Oct 26, 2012 at 10:50

I would be genuinely interested in how Margaret Thatcher destroyed the manufacturing base of the UK. Any answers in plain English please.

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DirtyHarry

Oct 26, 2012 at 11:10

Geoff,

During the Thatcher years the economy was re-based against manufacturing industries and those that may have chosen to be engineers turned to other professions being championed at the time most of which produced nothing. With no new blood an industry will eventually decline and disappear. Many of the new and burgeoning professions rely on a government paymaster and eventually if not paid out of taxes will be paid from extra borrowing.

We have over the past 30 years reduced creation of physical products and truned to churning money in a great big state sponsored Ponzi scheme.

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Geoff Downs

Oct 26, 2012 at 11:25

I am not disputing our manufacturing base has declined and maybe what you say as been a factor.

The main issue though in my mind is this. Our manufacturing base declined as we faced global competition for products and services. In a highly competitive world our manufacturing industries were unable to compete. One classic example of this would be the car industry, but there are many others.

The chances of a politician being able to influence these market forces is almost nil.

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David Harvey

Oct 26, 2012 at 11:42

It wasn't just the lame duck policy that did it. It was a dumbing down of trades people with silly 3 month training courses. While Germany continued to support the university or apprenticeship system ( and still do ) and believed in re-training and updating rather than dumping and paying 4 million people to be out of work to loose any pride or dignity they had. Thatcher's union fighting steam roller through out not just a baby with the bath water but most of the family as well.

Her utter contempt for the working man and more over the trades people began the march to the members of society who we now feel are wastrels, they are her grand children so to speak. The result of dumping proud people and skills along with their dignity.

She seemed to think that we could go on being the alchemist's of investment for ever and didn't need those troublesome tradesmen and nasty workers. I bet there's some people looking at the filled in coal mines now and thinking maybe Scargill was right.

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DirtyHarry

Oct 26, 2012 at 11:55

David

At some point in the future we may be grateful that we have some coal left and have not spent billions extracting it and selling at low prices to compete with countries that can ship it thousands of miles at less than UK cost price.

P.S agree with the first bit

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Geoff Downs

Oct 26, 2012 at 12:29

David,

I,m sorry but that is a huge simplification of the problems the UK faced, around the 1970's. Remember the sick man of europe phrase.

To compare us with the Germans does not help. They are a different people with a widely differing culture.

One example of a declining UK industry has been pottery. We still have world famous names in that industry, Due to global competition though that industry employs a fraction of the people it used to.

It all to easy to blame others, especially Governments of the day. Sometimes people also have to look at themselves.

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David Harvey

Oct 26, 2012 at 13:08

DirtyHarry but that's my point. Sadly the mines were filled with concrete to prevent them re-opening.

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David Harvey

Oct 26, 2012 at 13:14

I was an apprentice engineer in the 70's and remember the power cuts and the problems. In many ways I see Thatcher in the same way as Brown they both seemed to me to have the same mental drivers for power.

I cannot see how pottery compares to to the size of what we lost.

I don't think it's over simplified at all, just a let complex way of seeing how the mess we are in is not the fault of one person as we do when we are faced with a remark that offends our politics.

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Geoff Downs

Oct 26, 2012 at 13:24

Rather than just telling us we should have trained more engineers, perhaps you could give us an idea of how we could get our manufacturing industry growing again.

If you can produce realistic ideas then everyone would welcome that.

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David Harvey

Oct 26, 2012 at 14:35

Well, I'll try.

We give away an amount close to the Greek national debt every year in tax dodges. Maybe some of the companies that benefit could pay for a lot of scholarships for the subjects we need for our future for promising people.

To begin with we need to reward the companies that are producing original goods and employing people. We need to encourage the environment that would help people develop ideas here and not be driven abroad. Protection for designers and innovators.

The fact is we had engineers that needed upgrading we decided to dump them. I believe we need a system that gives people clear paths, either into an apprenticeship or university. I don't mean one of the 6 month apprenticeship but real 4 year on the job plus college.

At present we reward companies who use us for assemblers and have driven down the value of the human being to attract it. Maybe companies who produce new ideas and products and produce them here should be the ones with the greater incentive.

I hate to hear that austerity is the only way it's so negative. The opportunities for developing new ideas has never been better. We have a new world needing new solutions, new technologies and we have the talent to meet them. Global warming needs new technologies. Make sure we are the first with the technologies, stop driving us toward being a nation of store keepers and cheap labour for foreign manufacturers. The need and the demand is there. Look at 4g, we look like a lot of idiots, we should have had this off the ground years ago. But now even more so to enable the follow on technologies.

We are always so sluggish to get any things off the ground! why?

There has to be a better way than this.

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an elder one

Oct 26, 2012 at 14:56

It's all about decline and fall of an over-sophisticated culture (much like the Roman of an earlier era); we have - all of us - become complacent and used to an easy-going life in which our every whim must be satisfied. That of course needs money and the culture has become of such nature as to get hold of it at all costs and the devil take the hindmost. So methods have been invented to make it out of - more or less - fresh air and those with the wit in the finance domain have prospered (to the detriment of the rest) such that nowadays single minded, aspiring lads and lasses see it as their way to riches, rather than getting their hands dirty making things, which also involves getting to know and learn the nature of the physical universe and its challenging laws.

Politicians have been complicit in this by enabling excessive wants to be satisfied by financial credit to satisfy their own vested interest, viz to rule over us; not necessarily without compassion and patronage, but like all human behavioural facits its difficult to separate the notional good from the bad.

As a nation we need to get back - for more - to find enjoyment in making and doing things, rather than just gawping at television and playing with electronic virtuality and find satisfaction in personal achievement, like the recent olympians for instance.

The matter of national culture is rather more complicated than that of course and we might be on the mend. Among other things from our past we have always in these islands regarded ourselves as inventive and prided only to show others how it should be done but not to get too involved in making the things to trade (regarded as a little bit vulgar, I gathered whist training to become an engineer). But now the world has well and truly caught us up and we have real competition on our hands.

I only wish our politicos, teachers and other guiding lights could decide on an agreed hymn sheet to sing from.

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an elder one

Oct 26, 2012 at 15:02

sorry, facets not facits!

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Tony Peterson

Oct 26, 2012 at 15:14

One hymn our present government wants us to sing contains that immortal line:

"God bless the squire and his relations and keep us in our proper stations".

Don't sing hymns anymore myself!

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an elder one

Oct 26, 2012 at 15:19

In the days when I trained circa late forties early fifties we had two year courses at technical schools for those who did not make it to grammar school, colleges of technology, four year apprenticeships incorporating parttime day release for college studies and so on. In all the facilities covered a wide range of student ability, to learn therein the means to make a living in a range of industry. It seems much of it has now disappeared.

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Geoff Downs

Oct 26, 2012 at 15:25

David,

Firstly I am not qualified to make any judgement on how our education system should be run to help our manufacturing goals, so you could well be right.

It is also true that Government might be able through various schemes to help promote new ideas and products, as you suggest.

Clearly we were once a major manufacturing economy and now other countries especially in emerging markets have taken over that role. Both the US and ourselves are now consumer driven economies with a reducing manufacturing base.

The elder one touches on some of the problems in his remarks. The only lesson I can learn from the emerging markets growth is they are able to produce a wide range of products at competitive prices. They can do this due to much lower wage costs, less prescriptive regulation and States that are not massively in debt.

Overall though these solutions to our manufacturing malaise has to, in my opinion, come from the private sector and not the State.

I hear on these websites a lot about low paid jobs. Surely companies starting up and attempting to create new products and gain access to new markets have to be competitive.

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Geoff Downs

Oct 26, 2012 at 15:27

Tony,

Why do you have to keep talking about rich and poor. We have a problem in our economy which is not about the old class wars.

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David Harvey

Oct 26, 2012 at 18:59

An elder one, Many true words.

Geoff

Yes of course the private sector needs to do as you say but with the support of the government and with a clear plan. We still need a public sector to do all the care stuff they do a better job by far than they get credit for. Without a reasonable wage we are back to austerity and a country to poor to pay tax, buy goods or pay for education. There is a balance that we need to find. Like they say, you can only walk so far into the woods and then you are walking out again. Right now from my perspective we have gone too far and we are on our way out.

Touching on another issue we need to stop importing poverty. We tell ourselves that the people coming here will do the jobs we won't. Well that's true but even they are out of work now or pay no tax and enjoy our services having contributed not one penny. Then in a few years the sick relatives come and do the same. Maybe we should have listened to De Gaulle and stayed with the commonwealth.

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an elder one

Oct 26, 2012 at 19:04

No Geoff, it's nothing to do with the old class distinction (the squire and his relations) taxes put paid to that ages ago, I think the problem today is that we have created a new top class of the increasingly over-paid in all branches of industry, provoking the employee class to try and maintain parity thus increasing labour costs.

To compete with the likes of China and India and the other up and coming nations we are going to have to accept generally either a lower standard of living in future or try to get/keep ahead in all forms of technological product until those nations reach a comparable standard of living with our own in the so-called west; a very tall order, impossible the way we are.

There are other devices - not to mention the failing EU - to resort to one supposes, such as tariffs and/or beggaring our currency to fit, which we are already doing it seems, but then we have established a contract for fair global trade at loggerheads with that.

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Rightcharlie1

Oct 27, 2012 at 09:41

Out of recession my *rse!! When VAT comes down to 12.5% or less, fuel duty becomes less than 50% of the cost, executives stop paying themselves huge sums and offer instead 5% pay rises to all non board members and a 10% Christmas bonus, and top civil servants get real and take deserved 20% cuts and reduced pensions, then just maybe, maybe it could be the beginning of the end, until then, the song remains the same...political b*llsh*t!!!

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Steven McCann

Oct 27, 2012 at 10:30

Volume is what people are after because that's where the big money is. Once they've got the money and power they crave, and when that becomes boring then greed comes into the equation. It's been like that for far too long and it's the greed and "what's in it for me?" culture that needs to be addressed. To start off with regulation needs to be effective to take on the corporate bullies head on. I'd be interested also to know what the ratio of the public sector is to the private sector and where the growth is coming from.

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Geoff Downs

Oct 27, 2012 at 11:49

an elder one,

I agree with your second paragraph completely.

I have no problem with successful leaders in industry being very well paid. In my view what pressures labour costs is inflation, which we are not going to see any time soon.

To compete with the emerging market countries we have to create the right atmosphere for business. People starting up new business ventures must be encouraged to do so, without all the prescriptive regulation that is currently pushed on to them by Government.

We get on these websites many people with caring attitudes, who wish for our Government to provide everything for our people. What they never tell you is how it can all be paid for.

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an elder one

Oct 27, 2012 at 13:14

Geoff,

I agree success should be well rewarded, no question! but as others have observed I think, there comes a point where it becomes overplayed and overpaid, sorry to be vague, it's gut feeling, but just where that point lies is a bit beyond me and debatable. Could not a better share of the spoils put some pep into the marketplace?

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James B. Johnson

Oct 27, 2012 at 15:05

Geoff

You say that it's not about class war.

You should tell Cameron that.

When elected he said that cuts must be made but that the vulnerable would be protected. Since then he has attacked the vulnerable and ONLY the vulnerable.This is UNDENIABLE.

With regard to Hilda Thatcher, she believed that we didn't need manufacturing industry and is on record as saying so.

How on earth did she get two first class honours degrees?. The woman was an idiot.

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Geoff Downs

Oct 27, 2012 at 15:17

James B,

Firstly I think you are giving powers to Mrs Thatcher that she never had. How could one one person destroy UK manufacturing, by uttering the words you attribute to her.

Secondly you would have to explain what you mean by vulnerable and then give the precise details of where they have been attacked.

I hope you will respond because it's important we see what the reality is.

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john_r

Oct 27, 2012 at 16:32

Oh dear more fiction writers. Another dose of ''Let's rewrite history and blame Thatcher ''.

Well David Harvey I too remember the 70s and the power cuts you refer to, only my own memory says that was about 7 years before Thatcher came to power.

But I do remember other things of the 1970's starting with the union power growing under a social contract with the Labour government.

I remember the run down of apprenticeships after allegations of ''cheap sources of labour '' by the unions.

I remember strike after strike with companies being crippled or held to ransom.

I remember the rest of the world knowing us as '' the sick man of Europe''.

I remember we had what appeared to be the worlds worst phone service.

I remember my boss talking customers in America which required me to book an overseas call with the GPO several hours before he needed it.

I remember we had the most expensive gas and electricity in Europe.

I remember how we couldn't compete on energy intensive projects with the rest of the world.

I remember the government went to the IMF for what was then the biggest ever bailout in the world as it dawned on Labour that industry had collapsed and we were near bankruptcy.

I remember the IMF insisting Labour abandon its social contract with the unions as a condition of getting loans.

I remember the unions retaliating leading to ''the winter of discontent''.

I remember thousand of housewives protesting that their husbands were on strike against their own wishes.

I remember the British electorate voting Labour out in 1979.

And then I remember Thatcher .... who against all odds managed to put Britain back on the world stage. No I'm not saying I agree with everything she did but I do object to people making up history.

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snoekie

Oct 27, 2012 at 18:01

Dirty Harry, it wasn't Thatcher, but the unions thatare largely responsible for the destruction of our manufacturing base by their luddite practices, blackmail and frequent petty strikes, almost on a whim. Remember Red Robbo, Scargill, the print strikes and the strikes of that firm in Willesden, the frequent rail and tube strikes, to mention but very few.

Thatcher came too late too impose timely common sense.

David, with respect wrong, govts only set a framework. By the time Thatcher came to power the damage done was beyond redemption, in short the unions got their people to strike themselves out of jobs, by repeated pointless strikes.

An elder one, well put. Also note that minimum wages laws, and the current welfare system mean that the jobs are priced out and it is easier to claim money for doing nothing rather than pulling your own weight. And the list goes on, employment laws making it difficult/hellish expensive to get rid of journey people, and the maternity leave system merely drains a lot of money from employers a quite an alarming rate, almost as if the bosses are responsible for the pregnancies, paying for temporary staff, getting back some one who is likely within a short space of time to disappear again whilst she pups, again, repeating the drain.

Please folks, please remember, in the old days there was nowt for nowt, and I am not advocating penalising the infirm, merely those who will not bestir themselves and breed to earn more money. Charity begins at home and we should not be paying a foreign organisation massive to add to our woes with their restrictive practices and oppressive labour regulations and requirements.

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David Harvey

Oct 27, 2012 at 18:02

As I said John, I did vote for her but the legacy of her lame duck policies remain. Her own party became unhappy with her in the end and although Labour was voted out by the electorate it was her own party that began to turn on her. They were different times and it was possible then to make good money from investment. I wonder if there are some in the present government who wish she had tackled the problems she faced then in a different way, leaving not only a good balance in the books but also something to face the future with, i.e. now. I do feel in some ways she put us to sea in a sieve. Thatcher without a doubt worked hard but her yuppies with their portfolios and filofaxes have essentially fished the investment sea dry or polluted it. Until we can stop fishing it and start re-stocking it, it will get worse as this is a worldwide problem.

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Geoff Downs

Oct 27, 2012 at 19:14

David,

" the legacy of her lame duck policies remain"

You are either not reading what John wrote or don't understand what he said.

The massive decline of much of our industrial base was taking place many years before Thatcher came to power. The ultimate demise of some of these companies and industries was a legacy of these years and not of the Thatcher years.

Do you seriously think any Government could continue bailing out these companies.

Your arguments about Thatcher are not only simplistic, they are plain wrong.

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David Harvey

Oct 27, 2012 at 21:10

There are many that agree that NorthSea Oil Revenue saved Thatcher from the effects of her governments policies. It wasn't about bailing them out, it was about upgrading machinery and skills to match competitors in return for worker agreements.

I remember even as a young man who had grown up in a rough area my embarrassment at what unions were doing it was a disgrace for sure. But you don't crush the people that you want to be the future of a nation. There must have been 5 million out of work in days when single bread winners were common. The baby was thrown out with the bath water for sure.

When people finally got back to work the country was far behind and has got further behind year after year. And still we have no real leadership no real vision. We are at sea in a sieve.

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Geoff Downs

Oct 27, 2012 at 22:14

The vast majority of politicians have tried to win power, and stay in power, by pandering to public opinion.

Now the economic problems are so severe they have to take hard decisions, which none of them really want to do. My guess is they will buckle at the first sign of trouble.

Whatever you think of Margaret Thatcher, she did what she believed in, and in the end stayed true to her principals.

It was the men in her cabinet, putting their own jobs first, who buckled.

What we can say is that the electorate never voted her out and ever since we have had Governments taking decisions on issues that they think will make them popular. Of course the electorate see this and Governments become impotent for fear of becoming unpopular and therefore unelectable.

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James B. Johnson

Oct 27, 2012 at 22:32

Geoff Downs

O.K. Here goes.

State Pension cut in several ways...reduction from R.P.I. to C.P.I. (about O.6%)..

reduction of £25 in fuel allowance....freezing of personal allowance (only applies to pensioners). Threats to bus passes and T.V. licenses. Don't give me any crap about millionaires not needing bus passes. I know a couple and they would't be seen dead on a bus!!!

Abolition of E.M.A. for teenagers.

Reduction of child allowances.

Forcing unemployed to work for nothing to keep their paltry benefit (Could you live on £35 a week?)

Cutting pensions of Public Sector workers.

Freezing pay of Public Sector workers for two years followed by a two year pay freeze.

Yes, public sector workers are vulnerable because they are an easy target.

Job losses in all sectors of Public Service.

What have pensioners, children, the unemployed and Public Sector workers done too deserve special punishment ??

The pain should have fallen on the better off and those who deserve punishment such as the bankers and tax avoiders (individual and corporate).

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James B. Johnson

Oct 27, 2012 at 22:34

Sorry about several spelling and grammatical errors. I am very angry.

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Geoff Downs

Oct 27, 2012 at 22:54

JamesB,

I don't care how angry you feel. You said in your previous comments, the Government is attacking the vulnerable.

Firstly IF there are to be significant public sector job losses, why would you expect the public sector to be different than the private sector in difficult times?

Public Sector pensions are significantly better than private sector ones.

I don't see Public Sector workers as the vulnerable in society.

Pensioners are a mixed bag, but they are hurt most by interest rates on their savings.

Regarding the fit to work unemployed, I would welcome any policy that tries to get them employed.

There is no question that some members of society are genuinely vulnerable. Lets make sure that is where the help goes.

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James B. Johnson

Oct 28, 2012 at 00:41

Geoff

You are talking the usual rubbish about public sector pay and pensions. It is not the fault of the public sector that final salary schemes are being phased out in private industry. It is the fault of greedy companies that prioritise shareholders over employees. Final salary schemes have been perfectly affordable for 80 years and have gone through worse economic times than these. Furthermore, there is no credible evidence that the average private sector worker is paid less than the public sector worker for similar work, in fact, in London private sector workers are paid considerably more.

Are private sector workers being DELIBERATELY TARGETED BY GOVERNMENT? No. But public sector workers are being targeted.Why ?Because they are sitting ducks. They are always the first to be attacked.

Pensioners are a mixed bag but they are all uniquely vulnerable to a predatory government.

How are you going to get the 'fit to work unemployed' into work when there are 2.6 million unemployed? Are you suggesting that they should undertake useless tasks by compulsion? That would be a cross between labour camps and the workhouse. I'm afraid that your views belong in the 19th century not the 21st.

I am right to be angry and I am not alone. Millions of public sector workers and pensioners will correct these injustices through the ballot box and they will be joined by millions of other fair minded citizens.

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john_r

Oct 28, 2012 at 01:39

At least James B seems to have a genuine interest and strong feelings about current events and hasn't tried to change history or blame Thatcher for it all (so far anyway). Strangely in contrast, others, perhaps with failing memories are disheartened that North sea oil helped Thatcher survive rather than being thankful that North sea oil helped us all to survive. Sorry but I can't find any logic in that mindset.

James I can understand and actually share your frustration and anger at the mess we are in although personally my anger is directed at the government who allowed this to happen rather than the current goverment who are trying to fix the consequences.

I see our country as bankrupt. We are surviving only because the coalition is doing the right thing and the international market seems to agree and continues to lend to us on a very big scale at 2% interest. We are in survival mode borrowing £3billion every week. Spain pays 6% or more to borrow money and Greece can't find anyone to lend it money and will exit the euro. If we (Britain) don't have a good plan we can quickly become like Greece.

By the way we now have over £1000 Billion pounds debt.

When Labour was voted out the debt was increasing by around £150 Billion a year. This is clearly Labours deficit and is their shameful legacy.

(the deficit was close to zero when they came to power). They have tried very hard to suggest it wasn't their fault and to pin the blame on bankers but thats another argument. Not even the Tories know how to pay back our huge debt but what they have targeted for the first five years is to reduce the amount that our debt rises every year gradually to zero. When they get to this target then our total debt will finally peak (probably at close to £1.5Trillion ) but at least it won't be rising any more. So how are the coalition going to save this £150 Billion/ year I ask myself. Well it seems to me if you personally have any spare cash whether you are a spiiff or a pensioner then watch out - your country needs it !

The top 1% earners already pay over 25% of the total tax take. and by the way over 50% of our population take more from the tax system than they pay in. And as for public sector pensions anything over the private sector entitlement becomes fair game to me. Labour ducked this issue for 15 years and look what a disaster they have stored up.

The coalition have already raised the basic tax allowance significantly to ensure that the disadvantaged and the lowest earners have a high safety net. But for anyone else look out your money is really needed.

In Thatchers era she had the sale of underperforming nationalised industries to help pay off the big debt. This time we have nothing to sell. Even our gold reserves have been given away as the chancellor of the time believed boom and bust had gone forever.

So James, take your time but please be prepared to tell us how you would pay off the deficit. (remember you need to save £150 Billion every year).

By the way if you want our richest 1% to pay it down it will cost them an extra £600,000K a year in tax per family - even I can understand why they would be inclined to leave this country as so many have done before. And don't say good riddance as that leaves the rest of us with a much bigger problem.

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Steven McCann

Oct 28, 2012 at 07:46

To James B Johnson

You stated that " Millions of public sector workers and pensioners will correct these injustices through the ballot box and they will be joined by millions of other fair minded citizens."

To vote for whom? Labour who left us the debt legacy? The Tories? Definitely not the Lib Dems in their present guise? That leaves us UKIP and who else? Unless a new party appears from nowhere then it'll be ping-pong over the same table-tennis table of UK politics.

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Geoff Downs

Oct 28, 2012 at 08:52

JamesB,

The prority must be to ensure our economy doesn't collapse. In many ways the old arguments between left and right are useless because no group as the solutions.

The crisis facing us, and Europe and the US, is a real threat to our whole way of life. Unlike John r. I don't think this Government as a handle on the debt yet.

Any country whose debt levels are higher than the growth in the economy is unstable. The problem with our politicians is opposite to what you say and in effect they are afraid to tackle many of the underlying problems because of the fear of a public backlash.

Maybe the answer is Communism, Socialism or some other way yet to be invented.

For me though it has to be a market economy, which we certainly don't have in the UK.

We have to encourage business, not create a raft of regulation to stifle it and make it uncompetative.

We need to welcome profit and success and not see it in negative ways.

Hardest of all , people should try and take responsibility for their own actions.

The easy credit and debt society is now in deep trouble. There need to be new ideas to get us out of this mess. Alas there is going to be pain along the way, and that is inevitable.

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an elder one

Oct 28, 2012 at 12:26

Warped studies of political history will get us nowwhere; it will only distract us from the problem to be solved. Namely how are we to balance our economy in the new order of a global marketplace. It's taken us a long time to dig ourselves into this hole and will likely take as long to get out. It seems to me that we carry too much top hamper of an over-wrought benefits and civil service industry that needs to be made more efficient and into something that we can afford.

How to achieve it!

We cannot for instance rely on London so much,and its financial services industry which probably derives much of its success from geography, and admittedly some very successful engineering companies becoming increasingly efficient and weeding out human labour in the process. Much more has to done to create new industry out of creative minds engendered by appropriate education and a less fettered industrial environment among other things; and a recognition by all and sundry of the mess we are in and how far we fall short as as global market competitor in order to instil a resolve to apply due diligence on the matter.

As an aside, I think much of our decline as a manufacturing nation started immediately after WW2 when unlike Germany with its broad devastation British manufacturing facilities were largely undamaged and companies had to make do as little cash was forthcoming for investment; whereas Germany received all manner of help from the USA and ourselves to pick itself up. Though of course there has ever been an arrogant culture here that one need/ must not be seen to sweat in competition. A wholly unrealistic attitude in todays world with the burgeoning competition from the East and SW of the globe.

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an elder one

Oct 28, 2012 at 18:17

We should bear in mind that the distribution of intrinsic human intelligence across the globe is arguably uniform, it's the various national cultures existing on it that create the differences in relative economic performances between nations. For example why do so many from eastern europe come here to work - if what one reads is true - and are happy with their experience in comparison with some of our own.

Cultures across the globe are changing (in even the middle-east), so we should not expect to sit in the cultural status quo in Britain if we wish it to maintain a wealthy existence.

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Alan Anderson

Oct 28, 2012 at 19:07

Elder one. Eastern Europeans and others come here because they are overpopulated and can earn more here;are provided with unlimited child benefit(also for children left in the care of relatives back home);they are provided with housing where necessary;they get working tax credit;their children are found places in the UK education system;they get free health care. That's why they are relatively happy. And don't believe the hogwash about British not wanting to do the jobs. Also, before the Diversity Police are set on me, I would and have done the same in their position.

Given similar economic/political conditions, most people would prefer not to have to move out of their country and culture - that's obviously why you will find cultures grouping together;speaking their native language;opening up their own shops and even newspapers. Migration is just about money for most people.

The key to the future of the world economic system is to begin to stabilize global population. It may be all very well for some bloke in Rome, who is never supposed to have a family of his own, to wish large families on his followers(for example)but resources are not infinite and some people cannot forever pretend that they are.

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Geoff Downs

Oct 28, 2012 at 19:17

Alan,

If the British will do the jobs, why have we so much unemployment?

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Alan Anderson

Oct 28, 2012 at 19:33

Hi Geoff. Do you mean if the British will do the jobs, why do we have so many unfilled vacancies? I have absolutely no idea about the level of unfilled vacancies.

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Geoff Downs

Oct 28, 2012 at 19:45

Alan,

I understand there are around 465,000 vacancies, and around 2.5 million UK unemployed.

It begs the question why people from other countries come here if jobs are so difficult to get.

I don't really get it.

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Alan Anderson

Oct 28, 2012 at 20:40

Geoff. Thanks. I would guess that many of those vacancies are part-time and if they were all added together and divided by 40 hours a week, there would be far fewer full-time jobs. Many of those jobs would leave you in arrears with the rent or being unable to meet travel-to-work costs, both of which are rising every year. UK unemployed will also include migrants who are entitled to claim benefit.

There is a very large self-employed category which is not covered by the official statistics. There are also people working 'off the books'. I came across a group of Ukrainians the other week. When did Ukraine join the EU?!

On the other side there are landlords illegally converting disused shops into rental accomodation.

In the major urban areas like London, it's not difficult to find work if you are prepared to work long hours for less money especially if you are motivated by the fact that it's a lot grimmer back home. Many businesses are now run by migrants who have settled here. Many migrants will come here knowing there is a job waiting for them.

If you are a business, an organization or even just an individual and you can get migrants to come and lower the cost of the existing workforce(who may aspire to mortgages etc)and the Taxpayer will pick up all the disassociated costs such as health, schooling, housing, social benefits and perhaps the cost of keeping an existing citizen out of work, well bargain, eh?

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David Harvey

Oct 28, 2012 at 21:06

We have lots of people brought into my local area to do farming jobs and seasonal work. When they are at work it's part time and they claim for housing and all the benefits, then they are off for a season and do the same. We have a big company here that is responsible for bringing in thousands of Portuguese people apparently he rents accommodations to them at a price they can't afford on the pay he gives them and so you and I are paying his mortgage, and for his staff off season. We have an entire section of town, a ghetto where English is not spoken. Shop signs are all in other languages. I often wonder if it could be calculated how much the tax payer pays to have this "cheap labour". We did have lots of Polish people but I am told they all went home when things got bad. It seems true. I visit ageing and sick relatives of the immigrants who have just walked in, unable to work they take disability help and accommodations.

I don't think on the whole we are benefiting from the flow of these people into the UK although I don't doubt that those that can do and want to do indeed work hard. After they have been here a while they soon change. They learn that they get more on benefit than at work. It's not the one person that initially comes it's there sick mums and dads et a few years later.

Don't we need people to earn enough to pay taxes? if the working population can't and the rich aren't made to where will it come from?

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DirtyHarry

Oct 29, 2012 at 09:45

Theres a lot of interesting points of view here but we have a situation where Tony Blair and Gordon Brown had a great big 'Vote us back in' party in the early 2000's and spent all of our money and our childrens money on the booze and canape's. They could have cooled the economy and reduced the deficit at the same time arounf 04-06 - but they didn't and it is we taxpaying citizens and our children who remain here who will end up paying.

The fair means to reach the position of zero deficit and who pays for it is an iteresting one as it is likely that much of the profit that was made in those Labour unduced bubble years has already been lost overseas.

We have the uncomfortable truth of an expensive property market which remains expensive just to protect the banks from the avalanche of bad loans that occur if the interest rates when to higher more market facing levels. So at the moment we are still in an economy being propped up with funny money and those losing and being taxed in this process is everyone with assets held and valued in £'s.

Some think that real austerity can be avoided by taking on extra debt to 'kickstart' the economy. Our successive governments have been appalling at converting debt into raised GDP and if the Uk was a Plc the shareholders would be selling off their holdings in a panic.

Austerity is a fact, is overdue and is needed to protect future generations who wish to remain citizens of this country.

It has been mentioned that Public sector is an easy target to the cuts. In fact as a workfiorce it is a very difficult and expensive target as much of the workforce reduction costs a lot of money - much more than the equivalent people in the private sector. Severence packages are many times more than legally required as they have been negotiated under threat of union action so often to make a person redundant you effectively continue to pay for them for a year or more. It also precipitates 'early retirement' which again extracts money from underfunded pension schemes which need addditional taxpayer support - So to reduce the public payroll is expensive and they are not an easy target but the fundamental issue with the UK is that there are too many people who's positions are entirely funded from taxpayers contributions that has to change.

Without immigration control we may as well have welfare officers posted at Dover to hand bundles of cash to foreigners to turn round. Whilst many unemployed have been in that position for years and have become unemployable we now have a much higher level of short term unemployed who are very employable but their opportunities are being undermined by cheap foreign labour and this process can eventually turn our employable citizens into welfare dependants.

Society has become polarised by employment opportunity and we have now become a society of employed and unemployed households. Go back only 40 -50 years and most households would have had at least one fully employed person who earned enough not to need any state support (other than possibly a low rent council house). We don't have twice as many jobs now relative to our population so those who don't go out to work are not homemakers, wives or mothers any more but welfare claimants - I'm not anti equality - just stating an economic fact.

Our welfare state has exanded to the extent where there are numerous examples of where wealthy individuals can claim welfare based payments back off the state and other examples of where wealthy individuals make money out of the poor management of the welfare state. I believe these issues need tackling and the fact that they were not tackled when the economy was bouncing along is another nail in the coffin of Labours reputation for mis-management of the country. Issues that I believe are now being dealt with and on which our economic prosperity relies.

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an elder one

Oct 29, 2012 at 12:27

It's a funny old thing, but we all seem to agree in various ways that we in Britain - and with EU ordinancies - have instituted a charitable culture that has replaced individual responsibility for one bound to the State, for all the world (it appears) to take advantage of. That culture provides the majority with financial options to use as they think fit; it is in human nature to take what's on offer by least laborious means when presented as scarcely questioned entitlements.

Yet many will still not be satisfied. It's time to pull the plug!

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David Harvey

Oct 29, 2012 at 19:52

Yes you are right elder one. We can often find common ground with those with 180 degree opposing view which is nice. I like to think it gives strength to the free thinking think tank idea. If someone has a good idea it doesn't matter what party he is with.

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