The Great Debate UK
By Ian Campbell
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
The UK government wants austerity to pave the way for bold modernisation of Britain. In reality its cuts don’t reverse the previous explosion in government spending and there isn’t much money for its big infrastructure dreams.
This week’s Comprehensive Spending Review was mostly about cuts to the so-called resource budgets of most government departments though leaving health and education aside. Here austerity is unquestionable, including 10 percent reductions for the Justice, Environment and Communities departments and the Treasury itself. The Office for Budget Responsibility says another 144,000 public jobs will go, after well over half a million gone already. With a near-freeze on public sector pay, the civil service resource budget will be 2 percent lower in 2015-16 than in the current fiscal year.
The problem is the less controllable elements of government spending: pensions, social security and interest bills. So-called Annually Managed Expenditure is still rising. The government projects that it will climb by 18 percent from the current 2013-14 fiscal year to 395 billion pounds in 2017-18. And so in total, the austere government’s spending is projected to rise to 765 billion pounds in 2017-18, 6.3 percent higher than this year.
from The Great Debate:
When the Guardian and the Washington Post revealed details about the National Security Agency collecting phone data from telecommunications companies and U.S. government programs pulling in emails and photographs from internet businesses, suddenly “George Orwell” was leading the news.
from The Great Debate:
Nothing was trivial about the moment: Sheikh Hamad bin Khalifa al-Thani gave up his post as emir of Qatar to his son at the pinnacle of his influence, in an act as rare and surprising as his ascending to power through a bloodless coup against his own father in 1995.
from The Great Debate:
In the week in which America opened the door for negotiations with the Taliban, three bloody massacres of school children -- shot down simply because they wanted to go to school -- raise grave questions about what kind of peace the Taliban offer.
Within days of the initiative for talks, the Taliban shot to death nine foreign tourists encamped on the peak of Nanga Parbat in northern Pakistan, saying the murders were in retaliation for a drone attack that killed one of their leaders. But what kind of justification can possibly be offered for the firebombing of a college bus carrying forty girls from their Quetta campus in Pakistan? Fourteen defenseless girls died in the bombing; eight more people died when the terrorists ambushed the hospital.
–Darren Williams is European Economist at AllianceBernstein. The opinions expressed are his own.–
On July 1, former Bank of Canada Governor Mark Carney will replace Sir Mervyn King as Governor of the Bank of England. For many observers, this will herald a new dawn in the conduct of British monetary policy. The process, however, will be more evolutionary than revolutionary.
from David Rohde:
Alper, a 26-year-old Turkish corporate lawyer, has benefited enormously from Prime Minister Recep Tayyip Erdogan’s rule. He is one of millions of young Turks who rode the country’s economic boom to a lifestyle his grandparents could scarcely imagine.
from Nicholas Wapshott:
There is nothing more likely to spark anger than an unfair tax regime. The American Revolution was founded on it. So the discovery that some of the largest and most successful companies in the world -- among them Google, Apple, Amazon and Starbucks -- have legally minimized the tax they pay, sometimes to as low as zero, in many nations in which they earn the lion’s share of their revenue is causing considerable irritation.
The result was evident at the G8 meeting in Northern Ireland, where Britain’s conservative government, chairing the conference of the world’s richest nations, put making corporation tax fairer at the top of its agenda, after the civil war in Syria. David Cameron, who like most conservatives believes in low taxes, is in a bind.
from Jack Shafer:
One measure of our culture's disdain for whistle-blowers like Edward Snowden can be culled from the pages of a thesaurus. Beyond "source" and "leaker," few neutral antonyms exist to describe people who divulge alleged wrongdoing by the government or other organizations to the press, while negative synonyms abound—spy, double-agent, rat, snitch, informer, fink, double-crosser, canary, stoolie, squealer, turncoat, betrayer, traitor and so on.
We bristle at the scent of whistle-blowers for atavistic reasons: They've violated the norms that bind the group together and must be scorned and punished, and their only allies are like-minded individuals who've deserted the pack—or joined opposing packs—and portions of the press, which occupies a floating niche somewhere between the individual and the group that allows it to thrive on such principled perfidy.
“Don’t cry for me, RBS” could certainly be the lament being sung by Stephen Hester, outgoing CEO of bailed out Royal Bank of Scotland, after the shock announcement that he will have left the bank by the end of this year. CEOs of banks come and go; however, the government stake in RBS makes this CEO particularly important.
There are two things that make Hester’s departure fascinating: firstly, the fact that the RBS board along with the Treasury have concentrated on how a new leader is needed to privatise the bank. Secondly, the fact that Hester doesn’t seem to want to go.
During an interview with BBC Radio 4 less than 24 hours after the announcement was made, Hester admitted that he wanted to take the bank through its privatisation process “for me that would have been the end of the journey.” However, that was not meant to be, and he said he “understood” that “new blood” at RBS was a good thing.
from Anatole Kaletsky:
It’s cynical, manipulative and hypocritical – and it looks like it is going to work. How often do you hear a sentence like this, to describe a government initiative or economic policy? Not often enough.
The media and a surprisingly high proportion of business leaders, financiers and economic analysts seem to believe that policies which are dishonest, intellectually inconsistent or obviously self-interested in their motivation are ipso facto doomed to fail or to damage the public interest. But this is manifestly untrue. The effectiveness of public policies and their ultimate desirability is in practice judged not by their motivations, but by their results.