Let us reflect on three matters, and understand why economic chaos abounds. Few comments will be necessary, because the message is self-evident.
(1) General Motors has a car factory in Ellesmere Port. That factory is in danger of closure for reasons unrelated to what we would consider economic necessity. The G.M. board has reported losses for 2010/11 of $562m. (£533m) on their European subsidaries Vauxhall and Opel. Closures are to be made and it appears that they will be to Britain's detriment. The Ellesmere Port plant employs 2100 but makes 187,000 vehicles per year. G.M's German plant at Bochum employes 3100, workers, and has a capacity for 160,000. Bochum has a union agreement which expires in 2014. The Daily telegraph reports that should GM close plants based on efficiency, and where the company sells the vehicles, Ellesmere Port should survive. 'But with powerful German trade unions, it may not turn out that way'. It appears that Bochum will survive and Ellesmere Port will close. I wonder what incentives are being offered to GM by the German government?
(2) The Welfare debate continues; and the wiseacre on this forum blame scroungers, immigrants, and the freckless for the necessity to 'cut cost' and bringing some economic reality into the lives of the multitude. I have argued for some years, and also on this forum that the (1) minimum wage, (2) welfare payments and (3) the basic State retirement pensions should be linked and aligned one with another. However, the government sees things differently. They say that 'certain welfare payments' must remain high, because of the cost of accommodation in big cities, particularly in London. Claiments are paid £500 to £1000, plus, per week in housing benefits, and property companies would be in serious difficulties if those rent levels were significantly reduced. So, it appears the the distortion between welfare payments and earned wages, has to continue in deference to the interests of landlords. Those considerations shouldn't form part of the debate. What should the unemployed receive, relative to those on a minimum wage, or in receipt of a retirement pensions, having paid national insurance contributions continuously for forty-four years. What special consideration do we make for property companies? None.
The reality of what the government is doing, in relation to Welfare Reform, is having a serious effect elswhere. There can be little doubt that NHS reforms are being made more severe than justified in order to go 'quietly' on welfare reforms. It is important to separate the two problems in our mind to discern factors which impinge one on another. The NHS 'cuts' are being made at a scale which allow any economies made to subsidise those welfare reforms which the government are loath to make.
(3) The government is boasting that the size of the Civil Service is smaller now than at any time since World War 2. If you see dancing in your street, it will be that which your neighbours are celebrating. Before you get too excited, understand the slight flaw in the claim. Because the publicly funded Civil Service has contracted, that has only been made possible by expanding a publicly funded private sector, and that is presenting very special problems. What a shame the reduction in the Civil Service should be overshadowed by police raids on offices of a 'private' employment service which has received countless millions of taxpayers money, and provided the owner with a personal fortune estimated a £70 million according to the Sunday press. I suspect that should the cost of private advisers, analysts, and a host of other services be removed from public cost, savings of a substantial amount could be made.