>The New Government of the United Kingdom
>It’s official; Gordon Brown has resigned. Labour, after 13 years in government, is now the opposition, and led by Harriet Harman.
The new government features David Cameron as the youngest PM ever, and Nick Clegg as the Deputy PM. In addition 4 other Cabinet posts, and up to 15 other Ministerial posts accross Whitehall will go to the Lib Dems.
The markets rallied in response to a decision being made at last, with the FTSE up 27 points. But much is still unclear. So I’d like to invite anyone to post up whatever they’ve heard, and obviously feel free to express your views. As Cameron spoke before going into No.10 for the first time there were huge crowds chanting “Tory Scum, Tory Scum” over and over. So this election has clearly gotten people fired up.
Battison's Blog 
>A couple of good links I just found: http://news.bbc.co.uk/2/hi/uk_news/politics/election_2010/8676675.stmhttp://news.bbc.co.uk/2/hi/uk_news/politics/election_2010/8675705.stmObama was the first person to call Cameron as PM and re-iterated his belief in the special relationship. The second link says who's in Cabinet. I think the main point worthy of note is that George Osborne made Chancellor and Vince Cable had to settle with business/banking Minister. However it's still a huge step and I expect Cable will be pushing for a separation of retail and investment banking first and foremost.As for what policy commitments have been made though I've not heard too much so I'm all ears for what others have heard. Oh, one thing I did hear was a Lib Dem failure to get a referendum on PR. Instead they've had to settle with a referendum on the Additional Vote, which is widely believed to be a cop out and little real reform. Certainly not the big "change" that Cameron promised.
>Sorry, meant to say the second link is speculation about who's in Cabinet. We still don't know for sure.
>Just to pick up on one point,"The new government features David Cameron as the youngest PM ever,"He is the youngest since Robert Jenkinson in 1812 (http://en.wikipedia.org/wiki/Robert_Jenkinson,_2nd_Earl_of_Liverpool)But He is not the youngest by a long shot. (http://en.wikipedia.org/wiki/Records_of_Prime_Ministers_of_the_United_Kingdom#Age_at_appointment)With William Pitt the Younger at the age of 24 years, 6 months and 21 days.About 18 years younger than Cameron.I am quite exited for this coalition, although I do have reservations about the conservatives. Hopefully the most extreme measures will be watered down by the lib dems.
>Oh yeah of course. Sorry I forgot about Pitt. It was one of those moments where you just write whatever comes into your head because you're so excited (yes I know I'm sad). Though I didn't even know about Jenkinson. He was 42. So yes Cameron's one year older.I'm completely with you on your reservations about the Conservatives. Though despite Cameron's promises of 'big change' I think the Conservatives will at the end of the day be the conservative force. In fact it has already begun. It's the Conservatives who watered down the Lib Dem call for a referendum on the Single Transferable Vote. Instead we're going to have one on the Alternative Vote. Really listening to the people right?
>Yes, I did quite like the idea of the single transferable vote, I wonder how much of lib dems vote labour would have got.But then you have to remember that the lib dems came 3rd and to even get a vote on the alternative vote(which is still better than the system we have in place atm) is a great step forward. I don't mind these policy's been watered down, as long as some of the conservatives policy's are watered down as well. To be fair, I think that no change at the moment would be better than drastic change.
>"To be fair, I think that no change at the moment would be better than drastic change". You're the first person I've heard say that. Why? Do you think the markets would be uneasy with radical change?
>And we have the policies:http://www.libdems.org.uk/latest_news_detail.aspx?title=Conservative_Liberal_Democrat_coalition_agreements&pPK=2697bcdc-7483-47a7-a517-7778979458ff
>I think, From my experience with a few emerging businesses, and their contacts, that things are going in the right direction at the moment. Companies are doing better and slightly more jobs seem to be appearing.The policys in place at the moment seem to be working, and if they change too much they might have an adverse affect to the economy, we can worry about paying off this debt when we are more stable, and not when we are just starting to get back on track.
>Is this Gordon Brown disguised as Tom? Lol.I think you're right that the global recovery has begun. However growth actually shrunk back from 0.4% to 0.2% as we entered 2010. And there are a lot of problems still to address.The logic you use is basically "If it ain't broken don't fix it". But can't we make things better? How broken do things need to be before we start reform?Wouldn't you welcome tax exemptions on new businesses in their first two years? Or investment in infrastructure so that you spend less time on the road? Or in the technological infrastructure so that more people have access to the internet, and you never lose mobile phone reception or Wifi access wherever you go? How about reducing class sizes to 20 pupils so that your future employees are better educated? There are many improvements to be made, and most of them will not have an adverse affect on the economy.
>“The logic you use is basically "If it ain't broken don't fix it". But can't we make things better? How broken do things need to be before we start reform?”I know things are broken, or have been for the past few years, but in the last year or so we have started fixing it. I don’t want that fixing process to be stopped by the conservative by making huge cuts to public services, and people losing their jobs over it.Eg: They want to cut the number of teaching assistants in the classroom, which might meen Joanne or a few of her colleagues going out of work. “Wouldn't you welcome tax exemptions on new businesses in their first two years?”I would welcome this, but they are taking away one of the main reasons for the recovery, which is the vat cut last year. it went back up at the start of this year to 17.5% and has stifled the recovery a bit, but we can just about cope with that. that is shown in the figures you quoted. but the Tories are going to increase it to 20% (http://news.bbc.co.uk/1/hi/business/10112936.stm) now and that will not help things at all. “Or investment in infrastructure so that you spend less time on the road?” I’m Sure the last government were doing this anyway, they were increasing the size of the a1 going past your old house, which will be nice, I cant see much changing with increased spending though. It would have to be a major increase that we cant afford.“Or in the technological infrastructure so that more people have access to the internet,and you never lose mobile phone reception or Wifi access wherever you go?” All the parties are doing this anyway, just in different forms. And I would rather this kind of thing be in the open market, and not pushed through by the government, or BT.“How about reducing class sizes to 20 pupils so that your future employees are better educated?”This Is in the lib dem manifesto, not the conservative one, which is one of the reasons that I voted for them, and why I am pleased it is a coalition rather than a conservative government.I am hoping that the worst of the conservative suggestions will not be able to get through because libdem and labour will oppose them, because the conservatives do not have a majority.
>About the Public pay cuts, yes the Conservatives will make huge cuts, and they most probably will affect education. This is a weakness for Cameron. He has a fondness for the NHS and has guaranteed real increases i.e. beyond inflation, every year. Yet he is going to fund this through bigger cuts elsewhere, and from his own lips we heard that he doesn't know where the cuts can be made. He says he is going to secure "front line education services", but this is nothing if not typical of Cameron. It's exactly the same as his "Big Society" idea i.e. no-one knows what the hell he means and it leaves him open to do whatever he wants. There's no such thing as second-line education services. Teaching Assistants, school accountants, techniciens, cleaners etc are also essential to education and cutting those jobs will impact upon what he chooses to term "front-line".However he is not wrong to say that cuts need to be made. The budget deficit stands at 11.6% of GDP. Government spending now accounts for over half the economy, rising to 70% in Northern Ireland. So the issue is where to make cuts, and when to make them, but not whether to make them. I realise that you're saying we risk cutting expenditure too soon. This was a mistake realised in the 1930s when several countries tried to cut expenditure too soon and tipped their economies back into recession.Basically what I'm saying is that cuts are not necessarily a bad idea. The international markets are losing confidence in the UK market and we are racking up more and more debt every day. However I'm also agreeing with you. We cannot afford to let the Conservatives hurt education, which is fundamental for our future. And cutting Teaching Assistant jobs would be doing exactly that. So some cuts should be made now if they can be found, but a guarantee of £6bn without knowing where it's going to come from was a bad idea. Most of the cuts should come in the future.Next VAT. I completely disagree there. The VAT cut saved the average family about £200, and less to me and you, who can't afford to spend as much as the average family (although admittedly a greater share of our incomes). Yet it lost the Government billions that could now be used to help such public services as education.All three parties are in agreement that some additional taxation is necessary. I haven't looked at the figures in enough detail to argue that. But what was clear was that when the Conservatives argued against the increase in NI tax they had no choice but to raise the money from VAT instead. So it's either NI or VAT, and I actually agree that if it has to be one it should be VAT. National Insurance is not so much a 'tax on jobs'. But it does drive a tax wedge between employer and employee, and increase administration. Any tax that increases administration like this is likely to alter what people do i.e. how many people they hire. Yet VAT is unlikely to alter what people buy. So although it may be less fair it is the right temporary decision for the economy.I realise I chose examples of change that were already being talked about. I did it deliberately to show that some change is widely supported and necessary.In fact I would go further and launch radical reform, changing the structure of the House of Commons and Lords, reforming the Pensions system, legalising Euthanasia, acting to eliminate homelessness etc. These are all big changes that would help our economy.
>Govt spending as a percentage of GDP is about 40%, which is a fairly median level since the 60's. Prior to WW2 it was about 20%.Is increased spending something that cannot be avoided ?Of the money spent at tehbeginning of the 20th century only 10% went on social programs (educations, health, etc) but this now accounts for 60%.Is the UK better off for this ? The stats on literacy and lifespan etc say yes, so should the UK seek to maintain these achievements, or should it continue to spend more in order to pursue further improvements ?Should the era of education as the new religion be reigned in and money be spent on bonding communities ?As for VAT, this is a direct taxation that affects lower income people more than higher income folks, but never the less i think it is the lesser of two evils, especially in the era of over-consumption. In fact, whacking it up to 50% may solve a few problems in this regard.
>"Govt spending as a percentage of GDP is about 40%"You know it's really weird this subject. You'd think everyone would be able to agree on such a factual matter. Yet as Sean points out people cite different figures. I've never seen anyone cite anything as low as 40% though. It tends to be between 45 and 52%. The Economist says it's at over 50%. The Government says it's at 45.1%. I think the confusion stems from the fact that there are many different figures, and of course it varies between regions so perhaps there may be different ways of calculating averages. For example the UK public sector debt stands at 59.9% of national GDP as measured at Feb 18th 2010 (£848.5bn). And then there's the annual government borrowing, which stands at around £178bn or 12.6% of GDP.But nonetheless there have been huge increases under New Labour in the region of at least 5-10%, especially since Brown began as PM. Conservative spending was less than 40%. Of course a lot of this comes from Brown's Keynesian belief that government needs to spend when the markets are weak to partially fill the 'output gap' between what is possible and what is actually produced.This is getting to be a big state or small state debate. So in that case I'll sign on with that particular Keynesian belief and support the Govt bailing out of the banks and economic stimulus. However with the wavering market confidence, and start of worried statements by the IMF I also support the Conservative desire to look to cut 'waste'. Where I disagree is in the approach all parties have taken to promise to ringfence certain areas, or achieve certain fixed percentage cuts. If spending really is above 50% I definitely think it should be brought down. I know how much success Scandinavian countries have with big taxes but Britain is not the same and public spending should stay below 50%.Woah on the 50% VAT Sean! I'll just assume you're joking. You know this is the first time I think we agree for quite a while (on VAT versus NI tax I mean).
>Definitely didn't mean that 40% spending figure as accurate. Just trying to highlight the increased level of govt spending in the second half of the 20th centruy compared to the first half.I used the following PDF as the source, page 22http://www.parliament.uk/documents/commons/lib/research/rp99/rp99-111.pdfSpeaking of debt levels, i couldn't believe that the EU is warning Estonia that it must remain vigilant against inflation wheh it switches over to the Euro currency next yearhttp://uk.finance.yahoo.com/news/eu-recommends-estonia-eurozone-entry-on-jan-12011-afp-c3154b2868d8.htmlThe EU bloc debt average is above it's own guidelines, 84% vs 60% and it's telling Estonia with 9% debt, that it needs to be vigilant. What jokers!Yeah, we rarely agree on much Rob, but I'm sure if we start in too deep on VAT we'll find an issue to fall out on!Legalised Prostitution and VAT, strange bedfellows.But looking at that chart on the PDF file, what do you think is an ideal level of govt spending ?
>"The EU bloc debt average is above it's own guidelines, 84% vs 60% and it's telling Estonia with 9% debt, that it needs to be vigilant. What jokers!" I agree again. What's wrong with the world? Though of course they still have to say it anyway to be honest. The whole of the EU needs to sort out its debt, and irrelevent of who's the best or worst that means everyone must know that the EU will demand severe focus on debts in the next decade."what do you think is an ideal level of govt spending?" Christ. That's an impossible question! Basically, it should depend on several key criteria. I can think of these:. Temporary economic necessities . Economic capabilities i.e. if we're talking about somewhere like Somalia where tax collection is next to impossible and you can't even get to half the country then clearly spending has to remain low because the money simply isn't there.. Democratic Mandate. Culture of the country i.e. what the country is used to and to what degree the people are willing to trade equality off against liberty (see the newest debate). Long term visions/goals i.e. if you want to create a free National Health Service in a country where that doesn't exist then you're going to have to increase spending.Based on the application of these criteria within the UK then I would say that the 40% figure was about right as a long term goal. Yet by the time spending is no longer being cut to tackle debt and is instead being re-aligned to the desired level, circumstances could have changed a great deal and this 40% goal may no longer be realistic. So I think you've got to be flexible.That's a really good document by the way. I tried to find a more recent one but it looks as though that was just a special report for the end of the century.