UK Spending Review
- Osborne's statement is still hours away, but we already know the government plans to slash the welfare state as part of its 80 billion pound cut in public spending. This could "seal the fate of both the economy and the coalition", says Reuters' Senior Economics Correspondent Sumeet Desai. uk.reuters.com
- Elsewhere, Treasury minister Danny Alexander inadvertently gave away an advance taste of the upcoming Spending Review. He was snapped while reading the document as he was being driven away from a Treasury building last night. The photograh showed a reference to al forecast of 490,000 public sector job losses by 2014/15. uk.reuters.com
- The BBC is also facing a spending squeeze -- the licence fee will be frozen at £145.50 for six years in an effort to restrain spending by the broadcaster. uk.reuters.com
- The National Institute for Economic and Social Research has said the government may succeed in pushing through only half its planned public spending cuts and will be forced to raise taxes. Reuters' Christina Fincher has the full story - uk.reuters.com
Reuters asks analysts who's to blame for Britain's mess, the previous government or the global economic situation. Hayley Platt reports.
- Labour leader Ed Miliband just came bounding out of his house and gave this comment to the BBC: "I fear what the government is going to do today is take an irresponsible gamble with our economy."
- The Office for National Statistics has just revealed a record high for public borrowing in the month of September, just hours before George Osborne's statement on public spending. uk.reuters.com
- Osborne could push the retirement age up above the average life expectancy #csr10comment by markhillary via twitter 10/20/2010 8:55:57 AM
- The government will cut the science budget by 9 percent in real terms over the next four years, a government source told Reuters late on Tuesday. uk.reuters.com
- Guest commentator Mark Kobayashi-Hillary has just written this post for us on the Spending Review. He writes: "Most of the media and commentator attention today will rightly be on the public sector. When the Chancellor announces the cuts we all expect, the axe is going to fall on public services and the only real question is where and how hard it falls. But spare a thought for the private sector too." blogs.reuters.com
Britain's Finance Minister George Osborne and Chief Secretary to the Treasury Danny Alexander (L) leave Downing Street after a cabinet meeting in London October 20, 2010. REUTERS/Toby Melville
Britain's Finance Minister George Osborne (3rd R) speaks during a cabinet meeting at 10 Downing Street in central London October 20, 2010. REUTERS/Leon Neal/POOL
- What will the Spending Review mean for key government departments? The Daily Telegraph has this guide: www.telegraph.co.uk
- And here is a nice Q&A on the Spending Review from The Guardian, so you can get swotting ahead of the Chancellor's statement. www.guardian.co.uk
- #GBP looking vulnerable ahead of #spendingreviewby World_First via twitter 10/20/2010 9:51:05 AM
- Simon Heffer, writing the the Telegraph, says that today's cuts may sound like a lot, but they don't go far enough. "We should have reservations about what we have been told is proposed," he writes. www.telegraph.co.uk
- Morning everyone... I am now logged in here and should stick around through commenting on the announcements today...
- My colleague Peter Apps, political risk correspondent, has written this commentary on today's spending review -- blogs.reuters.com Peter broke his neck while on assignment in Sri Lanka four years ago, and here he writes about how he fears his "health, lifestyle and liberty could be a casualty of the 'age of austerity'."
- Deputy Prime Minister Nick Clegg has written an open letter to fellow Liberal Democrats, asking them to accept the tough decisions the coalition has had to make in producing the spending review. "We are not taking the decisions today because they are easy or because we want to see a smaller state, we are taking them because they are right. We have a hard road to recovery ahead, but we are determined to ensure it is a road that leads to fairness too," he says. www.libdems.org.uk
- Douglas Alexander MP, Shadow Work and Pensions Secretary, has given this response to Chief Secretary to the Treasury, Danny Alexander, holding documents showing nearly half a million jobs would be lost under the coalition's plans:
"The Tories and the Liberal Democrats still seem to think unemployment is a price worth paying. They are planning to put people out of work far faster than the private sector can create jobs for them to go to.
“The risk is that this will make reducing the deficit even more painful, as more and more money is spent on higher unemployment bills." - Alan Johnson, shadow chancellor: "their policy is slash and burn, but ours is sure and steady..."
- #GBP still wilting as we get closer to Osborne's announcement #csr10 #spendingreviewby World_First via twitter 10/20/2010 10:37:57 AM
- Here's a neat Reuters graphic showing the current state of the UK economy, including government spending, public borrowing and UK GDP. r.reuters.com
- Hi - we'll be looking at how the CSR impacts on small businesses. How, for example, will the shops and restaurants in Kinross be feeling this morning?
- A big welcome to our live coverage to Jonathan Elliot, managing director of Make It Cheaper, which represents the interests of small businesses. We'll bring you some reaction from the small business community throughout the day.
- Welcome also Jeremy Cook from World_First, who will provide reaction from an FX perspective. More industry experts will be joining us throughout the day.
- Stephen Matthew, a Senior Director at a firm of solicitors in Bournemouth, just send us these comments via email: "the public sector is far too big and needs to be trimmed down as we in the private sector were forced to do 2 to 3 years ago.
"If we had continued to spend we would be bankrupt by now and we would have no business and no jobs. I don’t think I would ring fence anything. There is over staffing and over spending in all areas and cost cutting measures can be achieved in all sorts of ways without simply cutting staff although it is inevitable that there will have to be job losses.
My fear is that it will tip us back into recession but as a Director a property based law firm I think it’s the fear of the cuts announcement rather than the cuts themselves that make people hesitant and overly cautious. I suspect their impact won’t be immediately over dramatic as it’s a long term plan.If everybody took a 10% pay cut in the public sector then combined with other cost saving measures their impact might not be too severe. I expect the press/media will blow it out of all proportion though
One thing I would definitely axe is free bus passes and winter fuel allowance for the over 60s across the board. You get them if you’re worth a £100M. How ridiculous is that?" - Some more pre-Spending Review comments from the small business community. Debbie Wanless, who runs an independent bookshop in Yarmouth, says: “My fears are that the perception of the cuts will be more damaging than whatever is proposed. Already I have customers talking about how tough things are going to be and how they are expecting independent retailers to be grateful for any custom to the extent that they ask for discounts and on occasion treat us like a bootsale! (Or try too).
Whilst I think that cuts are necessary I am not convinced that they are all going to be in the right places. As a society we have got too used having perks, for example winter fuel allowance and free bus passes. Why these are given out at the age of 60 is beyond me, should it not be at retirement? I do think benefits should be scaled back but also Government wastes too much on admin etc.
Most people accept that cuts are needed but the Government needs to be seen as being fair and getting its own house in order regarding cuts and not cutting services, jobs etc exclusively.
Again, as a retailer, the new push to get everyone online is damaging as online sales take away sales from the high street at a time when the spending is needed. Whilst online sales are still important, if shops fold and stand empty ultimately areas will become more deprived.
Small businesses need better support from banks & government agencies.” - Osborne's Spending Review statement is around 30 mins away. Before then, we have prime minister's questions...
- We're hearing that Osborne's speech may last for 90 minutes to two hours, so you might want to grab some lunch now.
- The Public Sector can certainly learn a lot about cost cutting from private companies. Less than 1% of the utility price enquiries received by Make It Cheaper each year are from Local Councils. This despite that fact that Public Sector premises are metered and billed by the utility companies in a very similar way to businesses. Even the type of civic building most active in switching energy supplier – sheltered housing – is four times less likely to switch than say a privately-run hotel.
- Not surprisingly, the chamber is packed.
- Ed Miliband asks the PM why Ken Clarke said he did not rule out a double dip recession, when Cameron had previously said this was not going to happen. Cameron replies by saying Clarke was talking about the European Economy, not the UK.
- PMQs today is the usual 'yah-boo' approach to politics, but the opening exchange between the PM and Opposition leader was gloves-off, both attempting to ridicule the other over their interpretation of what Ken Clarke said... looks like the tone has been set for the afternoon...
- Morning everyone, we'll be listening intently from a small business / investor perspective. The size of the public sector needs to be cut back without question but hopefully the Coalition has thought carefully about creating the right conditions for the private sector to take up the slack in terms of job creation as this is really key.
- Afternoon Ed Croft from Stockopedia!
- My focus today is on the wider eco-system of suppliers to government and how the private sector intersects with the public - take a look at my blog post from earlier today... blogs.reuters.com
- Reader might 'just' be interested in this blog post I wrote today on how the Treasury faced a mutiny by Twitter users who didn't like the official hashtag! www.computerweekly.com
- Great blog, Mark. On a related note, the Government recently issued a very interesting Green Paper on "Financing a Private Sector Recovery", which no doubt received a huge number of submissions. The deadline for that was Sept 20th so I am assuming some of that work could be feeding into today: www.bis.gov.uk
- Miliband picks up on remarks made by Climate Secretary Chris Huhne on how the coalition may change direction if economic conditions change. Cameron says the world economy is in a "dangerous" place, and the government's plans will take Britain out of the danger zone. Miliband's plans are irresponsible, he adds.
- KPMG suggests small businesses need ‘swift and aggressive action to reduce overheads’ in response to whatever the Comprehensive Spending Review is about to throw at them. What this calls for next is a Comprehensive ‘Savings’ Review… ie help from the Government to show SMEs exactly how they can cut costs and lessen the blow without compromising the products and services they offer.
- Ok, mins before the speech GBPUSD is settled at 1.5720 and GBPEUR at 1.1398. The yield on UK 10 year debt is 2.989% #csr10 #spendingreviewby World_First via twitter 10/20/2010 11:23:03 AM
- I think it's fair to say that David Cameron didn't really answer Ed Miliband's question about changing direction if it becomes clear the government's economic strategy isn't working.
- If the market is not happy we will see GBP fall and yields on debt rise; like we saw after today's BOE minutes #csr10 #spendingreviewby World_First via twitter 10/20/2010 11:24:12 AM
- Thanks Ed... will wait and see what happens today - there were many submissions to government recently on the forthcoming immigration caps too
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