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We are paying the price for having an unbalanced economy. For being too dependent on services, too dependent on credit-led domestic demand. The decline of our export sectors under Labour is an absolute disgrace, all because Brown and the MPC wanted a high-interest rate economy to support financial services.

Gordon Brown's attempt to measure the health of the economy purely in terms of cash-flow has hidden the ugly truth from the public. Namely that the British economy is now a one-trick pony, a nation that no longer produces, no longer exports and cannot even feed its own people. Little wonder Brown bemoans the world economy, he has made us totally dependent on it.

I think Clarke is right and I'll be a lot happier when Cameron says so. The fear of being accused of 'talking down the economy' appears to have frightened our front bench to such an extent that 'tinkering' measures are all they dare come up with.

A world recession will lead to high unemployment. But 3.62 million as a direct result of goverment policies, when other economies weren't having the same problems? You have short memories.

Is this using labours own figures that hide a lot of them?

I mean, we've got to be careful not to be hubristic or gloating. Thatchers reforms were hard medicine and necessary, but many people remember "Labour isn't working" as being rather ironic.

As unemployment mounts all of Brown's bounce will fade away. I feel very sorry for the families who are going to suffer.

I am one of the 1.82 million. I have been looking for work for 6 months. Willing to take a 50% cut in salary, 2 1/2 hours commute each way etc. Nothing yet.

I spoke to a someone at Reeds yesterday - she told me that the employment situation was 'dire'.

So forget about 'talking down the economy' the crisis is now. We need to be be kicking hell out of the government for creating a lot of this mess as well as coming up with radical alternative policies.

Torymory, I think there is a fair argument now for saying that the minimum wage needs to be more flexible. The recent sensible decision by workers at JCB to take a pay cut in order to keep their jobs shows that wages need to be less rigid. Surely someone would rather work for a Pound less per hour than have to live on the pittance paid by JSA? I believe the party leadership should make the case for employers to lower the starting rate, after all these are exceptional circumstances and all barriers to employment need to be removed.

Of couse what we actually need is for the citizens of this country to have enough money in their pocket to be able to buy British made goods.

Unfortunately this will mean cutting government spending, cutting taxes and cutting red tape, none of which are ever going to be on Brown's list of things to do.

The recent action by JCB workers to take a pay cut to secure their jobs is welcome news. Perhaps our MPs, who only a few months ago were boasting that their last pay rise was "only" 2 per cent, could follow that example.
2 per cent of their basic £60,000 is still £1,200. Most of us would be grateful for half that amount.

British people, especially oldies like me, don`t mind hardship provided it is shared. Will our MPs, who tell us they feel the pain, set an example? Don`t bet on it.

Posted by: Tony Makara | November 12, 2008 at 10:26

Torymory, I think there is a fair argument now for saying that the minimum wage needs to be more flexible. The recent sensible decision by workers at JCB to take a pay cut in order to keep their jobs shows that wages need to be less rigid. Surely someone would rather work for a Pound less per hour than have to live on the pittance paid by JSA? I believe the party leadership should make the case for employers to lower the starting rate, after all these are exceptional circumstances and all barriers to employment need to be removed.

It's a minumum wage for reason. It's the minimum you can reasonably get by on.

The problem with your idea is that's it's simply a subsidy for employers who pay poor wages - for example the fast food industry. The government ensures that people have a minimum amount to live on through tax credits and allowances, and so the tax payer will be paying for it. Unless, that is, you are advocating cuts in benefits for the poorest families in society as well.

We have to be careful not to talk down the economy but that does not mean that we have to accept any of Gordon Brown's figures without challenge.

Unemployment has reached 1.82M but does not, I believe, include NEETs; why not, if by definition many of these are able to work but are not doing so?

What should the accurate figure be?

We have already seen the damage caused to the domestic economy by Gordon Brown's switch of inflation index that led to the BoE controlling an unrealistically low level of inflation.

No minimum wage as such. Just surcharge an employer with the cost of income support that a fulltime employee is eligible for.

"It's a minumum wage for reason. It's the minimum you can reasonably get by on."

Resident Leftie, I always thought that the minimum you can get by on was the rate paid by JSA?

I have said several times in these forums that the only way we can afford better wages is through productivity, and to achieve that we need to restructure the economy away from services, which by their nature, cannot pay for better wages out of productivity, do not export and often employ part-time at low rates of pay.

This is the very reason why so many people have had to have their wages topped up by the state through the minimum wage and tax-credits. People have also had to resort to credit to achieve a decent standard of living, think of all those mums at the supermarket paying for their shopping via their credit cards.

So in the long run we can see that we have to move the economy away from services. In the short-term we have to ensure that employers don't go under and that may mean people having to take a dip in wages. I don't want to see that, nontheless I think its better than people losing their jobs and their homes. Perhaps an acceptable solution might be to allow employers to lower the rate of minimum wage by 20% for a six month period, and then assess the situation from thereon? One thing is certain, people will lose jobs if they become too expensive to employ.

"Resident Leftie, I always thought that the minimum you can get by on was the rate paid by JSA?"

Clearly Unemployment has not been a factor in your life. JSA is comically low. This is why so many of the long term unemployed were moved from JSA to sick benefits because of “depression” and other health problems malnutrition as an example. In some places Doctors have moved vast numbers of unemployed people on the flimsiest of excuses to benefit from the better payments offered to the sick. This is the main reason our welfare state has become so screwed up. This is bad for a number of reasons, the most obvious being that many reasonable well people have been sidelined as sick whilst the truly sick have seen the real value of their benefits fall due to the pressure on the treasury. It is a shameful truth that Britain has some of the lowest benefit rates in the western world. It is also the reason why so many people on JSA etc engage in fraud. Of course JSA is only part of the picture and is only a part of the total cost to the tax payer of the Unemployed. Welfare reform is one of the most pressing problems that an incoming administration will face. The temptation will be to blame the unemployed and the sick but the truth is far more complex and has its roots in our low pay for “low skill” culture which effectively exploits the stupid and those who are unable to fund their own further education. I have met poeple who have prefered life in prison to the endless poverty of longterm unemployment. At least inside you know you will be fed.

Tony Makara

Although I agree with the thrust of your argument I must point out that minimum wage is also a poverty rate. Flexability by all means but that should not allow employers to exploit their low skilled workforce.

The Bishop Swine, I agree that those on benefits are well below the poverty line. I was merely pointing out that JSA is the rate the Labour government states is enough to get by on.

I have called many times in these forums for a community wage to replace JSA after a given time with public works programmes built into the benefits system to provide waged work when the market cannot produce enough jobs. I am opposed to Labour and Conservative plans for workfare, which I feel is a punitive measure aimed at exploiting the jobless for free labour. We must always support the idea that a fair day's work is worth a fair day's pay.

My great worry over the minimum wage is that it will lead to job losses and long periods of unemployment for those who lose their job. For this reason I believe employers should be allowed more flexibility over the setting of the minimum wage.


Tony Makara,

There is plenty of room for wage restraint, starting at the top without attacking people on the lowest incomes. Let's see some FTSE CEOs and bankers leading the way first, shall we?

We do not want to compete with other economies on the basis of wage restraint - we can't possibly win that war. It was Thatcher who destroyed the manufacturing base in this country, instead of following the German mixed economy, high productivity model, and I'm afraid Labour hasn't done much to improve things. That needs to change.

I'd also like to point out that economic activity has declined since Labout came into power, not increased, although that will change this year.

Resident Leftie, each business has to be able to set its own rate for wages and I would certainly hope that good wages were paid, but business can only pay what it can afford, and in recessionary times everyone needs to cut back. I certainly agree with your point about a mixed economy as we need the safety-value of exports to ensure that we don't over supply the domestic market or suffer from restricted domestic consumer demand. Germany has suffered high unemployment like ourselves but that has been a lingering legacy of reunifcation rather than economic.

I must say I was surprised that Gordon Brown bought into the money-lender economy considering his many comments attacking arbitrage and speculation while in opposition. He has certainly done nothing for traditional sectors like manufacturing and agriculture. An elderly relative of mine, and a lifetime Labour supporter,is heartbroken that the last eleven years of Labour has led to what she describes as a bankers banquet.

Tony - if it is a bankers' banquet as she claims why penalise the lowest-paid workers? Why not impose a supertax on £100,000+ salaries?

You can't have it both ways. Either you agree with the "bankers' banquet" and want to cut the minimum wage (as I suspect you do, and there is no harm in that, you always make good points in arguments), or you would therefore support the minimum wage and some form of high taxation band to curb some of the excess.

I'm not much in favour of supertax, but having been on the minimum wage at various points over the last few years, it certainly made me more productive in bad, boring jobs (shelving books in a school library as a temporary assistant while they were looking for extra staff) where otherwise I wouldn't have stayed.

The Tories IMHO should get back to the people who elected them from 1979-1992 and rediscover what made them so popular against the odds. Last election I was delivering stuff for the party to council estates - we need to talk to them more, not to people who understand all this financial mumbo-jumbo. I think we might be losing people like that because we don't give them solid policies and tinker around the edges. Either we do, or we become an elite ghetto run by business for business.

We have to find solutions to Labour's bankers' banquet which puts more money in the pockets of those who work, rather than penalising the bankers, but our priority should be the people who will vote us into power.

Louise, ultimately the answer lies in complete reform of the taxation system. Why those on a low income are forced to pay tax at all is the strangest paradox. As I've stated many times, I want to see good wages, however wages should be flexible because in diificult times higher wages will cost jobs. I believe everyone is taxed too much, both rich and poor. We have to let business make profits otherwise business can't expand and create more jobs. After all jobs are only created two ways, privately or by the state. The problem with the minimum wage is that if it is not flexible, so there is no room for manoeuvre in difficult economic times. Those who support the minimum wage should at least consider making it flexible for six months or a year to preserve jobs that might otherwise be lost to this recession. No-one likes to take a pay cut, but being unemployed, with little prospect of finding new work, represents a total collapse in personal finances, something far worse than a 20% reduction in wages.

Tony - in theory, yes. In terms of practical policies - no, unless you want to go down to a landslide defeat, which in our case would mean losing seats overall.

"No minimum wage as such. Just surcharge an employer with the cost of income support that a fulltime employee is eligible for."

Part of me wants to agree with this statement, as the reality of low wages is higher taxation for the rest of us in the round.
However would it be fair to just hit those who have badly paid full-time jobs? It seems that it would be fair to hit those who employ people part time with the true cost of their incompetence and expect them to pick up the costs to the state of under employment.
However Business would never swallow such a scheme and would point out that higher wages can only come from higher productivity. No doubt if your scheme came into force many companies would pack up their bags and move abroad. Sadly the market dictates wages and conditions not governments and the market just loves to exploit the weak, the stupid and the hapless. I think the only possible way of improving the lot of the low paid is education and that is were we should be spending monies and encouraging employers to do far more.

Yesterday I was in a room with about 8 people from diverse backgrounds who are in full time employment and 2 volunteered that they expect to lose their jobs this week. Unemployment is here and its hitting hard. There is no possibility that Conservatives should take any satisfaction from the rapidly emerging dreadul mess. Apart from anything we are as likely as anyone to feel the sharp end of it!
I have been shocked by the speed with which so many businesses have folded; clearly they have been on the edge for quite some time.

Did we all see the little incident in EastEnders where (perhaps not the best example of British labour) was told to accept his £15 cash in hand and shut up as there was a queue of Albanians round the back?
Minimum wage was brought in, I think mainly for Security and Hotel Work, where people were doing 70+ hours a week on £2 ph.
It is interesting in the US to see some of the arguments about cash-in-hand and immigrant labour lowering, not only wages but working conditions.
I would advise any red-in-tooth and claw pay them tuppence merchant to go to the Pearl River Delta in China and see what this actually means. Then I defy you to introduce it here without having outright anarchy.

Unemployment under maggie was substantially the disappearance of worthless jobs being exposed as such.

Following her actions we had a leaner, fitter national employment situation.

Don't expect me to cry over other fake jobs disappearing (massively in the public sector) - however it is massively damaging that marginal private sector jobs are going before clearly worthless public sector (including quango) jobs are still secure.

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