Reading advices from such illustrious company, the question in my mind is how we, as a nation, got to this point? Without understanding this, it seems improbable to derive a solution. Maxing out the nations credit card over the last 50 years would indicate a level of social irresponsibility on the part of successive governments and their illustious advisers. People getting used to less, starting with the non-wealth creating public sector, is inevitable and shame on those who would invite social unrest by delaying implementation thereof.

Mike Cobley - I understand this, indeed I thought that was implicit in my first sentence. Gideon is certainly fooling no-one with his TINA-inspired "all in this together" claptrap. Secondary to that, I was also trying to point of the popular fallacy that Mr Punchable Face is some sort of political genius.

@Daniel

"the rich get richer while us poor people suffer as we must. "

You summarise the reality of what the last government and Ed Balls did.

Luddite is right.

Increase Uni places by 100,000?????

Oh for the love of God...!!

Have you tried getting a graduate job recently? Try adding another 100,000 to the pool.

Let's just put everyone in Uni, who cares it will help the unemployment figures and sod where the money comes from it's not like 100,000 more places will have any impact on budgets.

He should
1. End fractional Reserve banking.
2. The MPC will create the money supply.This will be new money not debt.
3. Government will spend the new money into the economy.

The result will be.
1. Overall debt will be reduced.
2. The government will direct where money goes in the economy not the banks.

For more information see the Positive Money web site.

@mike cobley

The "visceral hatred" going around is the Labour project's envious hatred of "grubby" UK Industry borne out by their oppressive policies and approach to UK makers over a long period. Disagree? Where are all the examples and substantial policies that rebut this?

Judging by the last Labour conference, we would be entitled to think UK manufacturing was irrelevant ... and Labour if got another chance they would finish off the project they started.

Why does Labour have it in so much for UK Industry?

deal with the high cost of living that forces people on low wages to rely on benefits to supplement their incomes, george.

cut energy costs, preferably by renationalisation, but if not by proper regulation.

bring back rent controls, with would give people more money to spend, and for those reliant on housing benefit, reduce government costs.

and then force companies with high profits to pay reasonable wages, as otherwise tax credits are just a subsidy for employers.

its only buy reducing the cost of living that you will create demand, people can't afford to live, its a ridiculous situation, how the labour party allowed this situation to occur i do not know.

over reliance on supply side economics was probably the problem, more glamorous i suppose, as they got to hang out with rich bankers and imagine they were part of some global elite.

thats my advice george, no point in economic stimuli designed to stimulate demand if all of peoples incomes is going to pay for the things that can't live without.

and that quantitative easing is a bonkers idea as it will make the situation worse. so sacking mervyn king would be a good idea, and abolishing the mpc, too, george.

Arturo - the Coalition's main aim is, as it has been all along, to uproot and erase the final vestiges of the social democracy created by postwar Labour. There is an unstated, near-visceral hatred of the NHS and the welfare state behind the policies of this government. They wont stop until all the options of ordinary people (and the disadvantaged and the sick and the jobless) start to closely resemble those that were available before 1939.

@ Indu Pendent - "The "visceral hatred" going around is the Labour project's envious hatred of "grubby" UK Industry borne out by their oppressive policies and approach to UK makers over a long period. Disagree?"

Wow, brilliant bit of misdirection, there matey. Turning an attack on the Coalition into an attack on Nu Labour, no doubt thinking that I`ll rev up and get defending. Er, no. The Blair/Brown regime was one long exercise in slavish toadying towards the City and its associated financial and enabling sectors. True, Blairetc didnt really have much time for actual industries that made things, except for the arms industry of course. They did have oodles of time and moolah for anything that could be PFI'd out into the market, regardless of any real risk and consequences for real people working real jobs and trying to lead real lives. Ah, screw that - here, have a big juicy contract that binds the government to provide a revenue stream for the next 25-30 years.

You're quite right to point out the callous disregard for the industry of making things as evinced by this and previous governments. And we know why there no investment for such industries - the returns are low and slow compared to high frequency trading and other exotic financial procedures. Thats the core betrayal, the way the financial system has been handed over to a mob of amoral traders and hucksters. Fixing it will require nerves of steel.

Don't worry everyone, Osbourne only has a Plan A: the rich get richer while us poor people suffer as we must.

Plan A is working fine.

National investment bank and printing money for the public - sounds good to me. I'm moving house soon; the money would just about cover my deposit. Thanks

With so many viable alternatives available, one wonders exactly what Gideon's motivation is...

If it is to gain a second term no matter what his policies cost the UK, this supposed political strategist may prove self-defeating.

My plan will be to let the banks fail, I preferred the time we got paid in cash and the banks didn't rule!!

@Christopher Pissarides

I agree that cutting VAT would give a short term stimulus but the economy would adjust to it. I strongly disagree about it having a long term benefit.

VAT is charged on imports and not exports so cutting VAT will make imports cheaper and cause the import/export deficit to get worse.

In the UK we have a major problem - the high proportion of incremental disposable income that is spent on imports. This kill the stimulus put into the hands of consumers which is paid over quickly to China. High VAT improves the multiplier (by recycling stimulus through tax collection) and allowing the stimulus to circulate for longer.

The price inflation from higher VAT, given the subdued employment market and wage rates, also makes labor relatively cheaper compared to other reseouces. Thus, as the exchange rate adjusts, high VAT improves the relative competitiveness of UK labor. We are actually seeing this happen.

Cutting national insurance for the lower paid is a great idea. It makes people cheaper to employ so should help create private sector jobs which would stimulate the economy in addition to putting money immediately in peoples pockets (albiet most of the NI given back to people will leak overseas quickly).

There's no plan B just the politics of madness.

Daniel real wages for many actually fell under our wonderful previous Labour government.

We need to reallocate govt spending from admin style jobs to growth enhancing infrastructure spend. We should lower labour taxes by increasing the tax free threshold to help the lower income ranges the most, we could introduce a land tax but at the same time reduce corporation tax and income taxes, this would resources from unproductive areas like land to productive labour and capital.

Jonathan Portes is clearly mad. He wants to allow more immigrant workers into the country when the country has failed to create enough jobs for the existing populaion -hence rising unemployment.