The Economy

[furnessvale]

What is your point? Gtr. Manchester Metrolink is paid for using loans, and that's not nationalised.

Taking out loans to build new infrastructure is one thing.

Taking out loans to transfer ownership for political reasons without a single extra mile of railway (or road for that matter) being available to the country seems counterproductive.

 

[Jonny]

What is your point? Gtr. Manchester Metrolink is paid for using loans, and that's not nationalised.

It is technically owned by the local authorities who own Transport for Greater Manchester so it is pseudo-nationalised. It may be operated by a private company, but only on a service contract.

 

[Dentonian]

Taking out loans to build new infrastructure is one thing.

Taking out loans to transfer ownership for political reasons without a single extra mile of railway (or road for that matter) being available to the country seems counterproductive.

It depends on who ends up paying the loan back.

 

[Dentonian]

It is technically owned by the local authorities who own Transport for Greater Manchester so it is pseudo-nationalised. It may be operated by a private company, but only on a service contract.

Natonalised thrice removed. LAs & TFGM are financed by Greater Manchester's Council tax-payers, not national Income taxpayers. And Metrolink loan repayment is a legally enforcable part of the TFGM budget, so takes priority over most of its other priorities.

 

[radamfi]

LAs & TFGM are financed by Greater Manchester's Council tax-payers

Despite massive cuts in government funding, councils still get most of their income direct from central government.

https://www.gov.uk/government/uploa...932/RA_Budget_2016-17_Statistical_Release.pdf

shows that central government funds 57.4% of local government expenditure for 2016-17, compared to 75.9% six years earlier.

 

[Dentonian]

Despite massive cuts in government funding, councils still get most of their income direct from central government.

https://www.gov.uk/government/uploa...932/RA_Budget_2016-17_Statistical_Release.pdf

shows that central government funds 57.4% of local government expenditure for 2016-17, compared to 75.9% six years earlier.

Notwithstanding local variances, it means Council taxpayers are having to find 42.6% instead of 25.1% - so it will soon be double! Irrelevant of where the funding is coming from, the total budget is not even rising with inflation, and only parts of it are discretionary. There are three main types of expenditure for TFGM:

1. Legally Compulsory (eg. Metrolink debt repayment & ENCTS payments)
2. Discretionary, but deemed politically necessary (eg. Rail/Metrolink Concessionary fares support and School bus subsidies)
3. Discretionary and budgeted for real terms cuts (eg. Staff costs and socially necessary mainstream bus services)

 

[radamfi]

Notwithstanding local variances, it means Council taxpayers are having to find 42.6% instead of 25.1%

It's not quite as bad as that as councils now retain a proportion of the business rates, whereas they were previously collected by central government and then doled out to the councils afterwards (so counted as central government funding).

 

[Dave1987]

So it turns out that the “record low unemployment” in the economy is a complete smoke screen for what is actually happening. The economy is creating insecure poorly paid work which is why wages are pathetic and people are statistically poorer than they were in 2008. The “gig” economy is expanding and the “casualisation” of work is becoming more and more prevalent. So maybe we should all treat these unemployed figures with a huge pinch of salt as the number of people in secure full time work is nowhere near what the percent of people “in work” the DWP parade around.

 

[najaB]

The “gig” economy is expanding and the “casualisation” of work is becoming more and more prevalent.

Isn't that an inevitable consequence of moving to a service-based rather than industrial economy though?

 

[Bromley boy]

Isn't that an inevitable consequence of moving to a service-based rather than industrial economy though?

We’ve moved from an industrial to service based economy over the last few decades. The gig economy has only really become a thing in the last few years

 

[EM2]

We’ve moved from an industrial to service based economy over the last few decades. The gig economy has only really become a thing in the last few years

Yes, the same few years that the unemployment rate has been falling. Strange that we have so many more people 'in work' but the benefits bill relating to benefits paid to those in work is steadily rising.

 

[Bletchleyite]

We’ve moved from an industrial to service based economy over the last few decades. The gig economy has only really become a thing in the last few years

I'm not sure the gig economy (or at least US style "hire and fire at will") would be all that much of a bad thing were the state safety net to be expanded in some way (such as UBI and similar concepts).

 

[Bromley boy]

Yes, the same few years that the unemployment rate has been falling. Strange that we have so many more people 'in work' but the benefits bill relating to benefits paid to those in work is steadily rising.

Indeed.

What’s the saying about statistics!? “Lies, damn lies...” etc.

 

[Mag_seven]

At times like this Trade Unions are needed more than ever. People should think about that whenever workers have the temerity to strike to resist joining the race to the bottom.

 

[najaB]

We’ve moved from an industrial to service based economy over the last few decades. The gig economy has only really become a thing in the last few years

Consequences don't necessarily manifest immediately.

 

[ainsworth74]

I'm not sure the gig economy (or at least US style "hire and fire at will") would be all that much of a bad thing were the state safety net to be expanded in some way (such as UBI and similar concepts).

I think that's perhaps a crucial consideration. Having a gig economy, along with zero hours contracts etc, wouldn't necessarily be a terrible thing if we had the safety net to support it. Instead the safety net is being dismantled at breakneck pace all whilst our political masters stuff their fingers in their ears and shout "RECORD LEVELS OF EMPLOYMENT" repeatedly as if that actually means that most people are in full time, secure, well paid employment rather than the a lot of the increase being from insecure, poorly paid and part-time work. The sort of work that doesn't even have the benefit of relieving poverty!

 

[AndrewE]

I think that's perhaps a crucial consideration. Having a gig economy, along with zero hours contracts etc, wouldn't necessarily be a terrible thing if we had the safety net to support it. Instead the safety net is being dismantled at breakneck pace all whilst our political masters stuff their fingers in their ears and shout "RECORD LEVELS OF EMPLOYMENT" repeatedly as if that actually means that most people are in full time, secure, well paid employment rather than the a lot of the increase being from insecure, poorly paid and part-time work. The sort of work that doesn't even have the benefit of relieving poverty!

And also who has enough income to pay the taxes needed to supply the benefits which subsidise the employers in this gig economy then?

 

[Dave1987]

As the ‘gig’ economy and the casualisation of work takes hold and people’s living standards decrease they will have less money and less time to spend with family and spend money in the wider economy so less income for the Government from taxes. I find it fascinating how all decisions have consequences in the long term.

 

[ainsworth74]

And also who has enough income to pay the taxes needed to supply the benefits which subsidise the employers in this gig economy then?

Bit of a question isn't it?

Personally (and moving away from the gig economy for a moment) I do struggle with the concept that we have companies making substantial profits at the same time as their staff are reliant on state benefits. To pick, firstly, a US example you have Walmart making close to $10bn in profit (over $20bn pre-tax) and yet more than a small number of their employees are on food stamps (which, of course, they often spend in Walmart). The big boogeyman man of late in the UK, Sports Direct, is similar (though on a much smaller scale). £231m in profits and yet many staff are minimum wage (and lets not pretend the new "Living" wage is an actual Living wage that's yet another bit of political spin*) and indeed paid less than minimum wage in some circumstances (and after they were caught out wow did they drag their feet to put it right). Again, at the same time as they're making substantial profits, their staff will be relying on Tax Credits, Housing Benefit, etc to allow them to live. There will be countless examples of large businesses that make significant profits whilst their staff are on low pay and only survive due to receiving state benefits. Surely there's something wrong with that picture?!?

* Current minimum wage (known as the "living" wage) for someone aged over-25 is £7.83ph. The actually wage needed for someone to live on is £8.75ph outside of London and £10.20ph within London as per the Living Wage Foundation.

 

[Barn]

There will be countless examples of large businesses that make significant profits whilst their staff are on low pay and only survive due to receiving state benefits. Surely there's something wrong with that picture?!?

Indeed. Benefits like tax credits which top-up earnings for employees should really be seen as subsidies to employers: allowing them to pay staff less than would otherwise be demanded as a living wage. Perhaps there are economic justifications for that, but we should be transparent about exactly what these benefits are. Obviously, now that they have been introduced, any reduction in tax credits will be spun as an attack on the poor rather than as a reduction in corporate welfare, as the Conservatives found to their cost.

 

[Dave1987]

Interesting statistics on the news today. Life expectancy in the UK has dropped. Wonder if the hours people are expected to work and the degradation of conditions has had an effect on that?

 

[Barn]

Interesting statistics on the news today. Life expectancy in the UK has dropped. Wonder if the hours people are expected to work and the degradation of conditions has had an effect on that?

I don't think life expectancy has dropped but rather the rate at which life expectancy is increasing has dropped.

 

[AndrewE]

I don't think life expectancy has dropped but rather the rate at which life expectancy is increasing has dropped.

Correct, but only just! The BBC news item https://www.bbc.co.uk/news/health-45096074 says

The ONS's analysis found the slowdown in life-expectancy improvement in the UK was most pronounced in women, dropping by 90% from 12.9 weeks per year from 2006 to 2011 to 1.2 weeks from 2011 to 2012 - the biggest reduction in all of the countries it analysed.

For men, this was down 76% from 17.3 to 4.2 weeks.

 

[Barn]

Correct, but only just! The BBC news item https://www.bbc.co.uk/news/health-45096074 says

It's a fascinating data set, but I suspect that the superficial conclusion about governmental changes since 2010 is unlikely to be a major contributor.

I wouldn't be surprised if it is to do with the transition to an almost exclusively service based economy some 20-30 years ago and the dying off of the last generation with significant numbers who worked in jobs like mining and heavy industry. My granddad and lots of his colleagues at his work died of asbestos exposure. Once that generation has passed, and most people who are elderly will have spent their careers in safer jobs, there will be a plateauing of life expectancy.

 

[underbank]

It's a fascinating data set, but I suspect that the superficial conclusion about governmental changes since 2010 is unlikely to be a major contributor.

I wouldn't be surprised if it is to do with the transition to an almost exclusively service based economy some 20-30 years ago and the dying off of the last generation with significant numbers who worked in jobs like mining and heavy industry. My granddad and lots of his colleagues at his work died of asbestos exposure. Once that generation has passed, and most people who are elderly will have spent their careers in safer jobs, there will be a plateauing of life expectancy.

Then a reduction due to obesity which must be the biggest health problem of population at the moment, no doubt partially caused by "safer jobs" such as sitting on your bum all day at a desk instead of manual work.

 

[Barn]

Then a reduction due to obesity which must be the biggest health problem of population at the moment, no doubt partially caused by "safer jobs" such as sitting on your bum all day at a desk instead of manual work.

Quite - obesity rises will be counteracting smoking decreases. We've also had a new generation of youngsters brought up breathing diesel fumes.

 

[Dave1987]

Quite - obesity rises will be counteracting smoking decreases. We've also had a new generation of youngsters brought up breathing diesel fumes.

Sleeping patterns based on shifts people are expected to work will have a huge bearing on people’s health. Also as people with rubbish pensions start to retire the burden on the state will only increase which will be detrimental to the economy. There is definitely a pensions ticking time bomb on the way.

 

[yorksrob]

Sleeping patterns based on shifts people are expected to work will have a huge bearing on people’s health. Also as people with rubbish pensions start to retire the burden on the state will only increase which will be detrimental to the economy. There is definitely a pensions ticking time bomb on the way.

Yes, hopefully the forthcoming increase in automation can be channelled to ensure that a greater number of elderly residents can maintain a decent lifestyle, rather than going to enrich a few technology owners at the expense of the rest of the working population.

I know, I know, very unlikely.

 

[NSEFAN]

Yes, hopefully the forthcoming increase in automation can be channelled to ensure that a greater number of elderly residents can maintain a decent lifestyle, rather than going to enrich a few technology owners at the expense of the rest of the working population.

I know, I know, very unlikely.

That's definitely how it should go. We should be finding ways to cope with our ageing population that don't involve just producing more humans to make up for it.

 

[ainsworth74]

There is definitely a pensions ticking time bomb on the way.

The time bomb I've been idly wondering about (and I don't think anyone is really talking about) is the student loan debt that's building up and will never, ever, be repaid. Post-2012 loans are around an average of £50,000 (my pre-2012 loan was about half that for comparison) and repayments are only taken once you're earning above £25,000 (pre-tax) and then the repayment is 9% of your earnings above that level. So if you're earning £40,000 (which is well above the average salary) you'll repay £112 per month. So that £50,000 loan will take around about 37 years to pay off. Considering post-2012 loans are written off thirty years after they first became liable to be repaid this feels like a small problem. Especially when you consider there are not an inconsiderable number of graduates who are earning less (often much less) than £40,000...