Nicola Smith at the TUC noted a report in the Times yesterday (I usually ignore the Times - it's not worth the payment, unlike the FT) which referred to survey findings by the Institute of Chartered Accountants in England and Wales. These reported:
20 per cent of employers they surveyed reported that spending cuts have already affected their turnover and 45 per cent believe that turnover will face negative impacts from cuts over the next 12 months. As a result of these fears 47 per cent of those reporting turnover reductions have already reduced staff.
Apparently the Chief Executive of the ICAEW, Michael Izza, said:
What has been forgotten, though, is the extent to which the private sector is a supplier to the public sector. Whether it is services, materials or equipment firms of all sizes and from all sectors have had work either directly or indirectly from Government organisations…These relationships are either under threat or have already been terminated.
What has been forgotten? Is the man a fool? Did he genuinely think there was some mighty Venn diagram with the state sector in one circle and the private sector and the two never overlapped? What sort of fantasy did he live in?
Some of us have, of course, been aware of this for some time. It's a shame the micro-economically obsessed (as most accountants are) didn't open their eyes a little earlier when demanding the destruction of the state sector on which their well being depends, as they're now discovering.
If they want they can join me on 26 March at the mass rally in London against the cuts.
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I’m surprised they haven’t realised that in a fiat system all money comes from the government. They are the pump primer for the flow of money around the system.
The banks are too inefficient to recycle money completely within a period, so the government, as currency issuer, has to top the pot back up if we don’t want things to shrink.
The only question then is whether the build up of inefficiency in the form of stocks of financial assets can be left, or whether it needs to be taxed out of existence somehow to stop things bubbling over or clogging up.
I think there is a mistake in the title…
“The ICAEW wakes up …”
Surely some mistake here?
Some private sector suppliers to the public sector are likely to benefit from the cuts. Last night Channel Four’s Dispatches programme highlighted the ‘fat cats’ in Serco, Capita and Group 4 who enjoy huge salaries basically generated by public money from outsourced services. The only way these companies make real profit is by reducing the salaries and wages of their staff and attacking other employment conditions. But of course the top management are not affected. I sincerely hope that these companies are paying their corporation tax. I doubt that small to medium sized companies will benefit from the mega contracts likely to be awarded by the Coalition as they strip away the welfare state.
@Teresa, saw it too, shows just what a load of rubbish the Big Society claim is. Taxpayers money that went to charities and voluntary groups will now go to the likes of Group4 and Serco, run by men who, guess what, get fat great bonuses. What a surprise.
No surprise also that the chief executives get paid more in a month (not including their bonuses) than many of their employees get in a year.