Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do. There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

Friday 2 December 2011

George Osborne : villain or hero ?



Recently, British Chancellor of Exchequers, George Osborne announced many measures to pull the British economy out of depression. Among others, these measures included :

Ø Starting 2013,  1 % cap on Public Sector pay for 2 years, once the current two-year pay freeze ends

Ø Plans to raise the state pension age from 66 to 67 would be brought forward by 8 years to 2026

Ø 1 billion pound scheme to subsidize work placements for the young unemployed


Despite these measures, unemployment is expected to rise from 8.2 % this year to 8.7 % next year
Job losses in public sector would nearly double to 710,000 , compared to earlier estimate of 400,000

Questions to be debated :

Ø If British Govt can impose a pay freeze for 4 years in Public sector, should British private sector follow suit ?

Ø To keep wage-costs under control, should employers be allowed to hire temporary / contractual staff on a fixed salary for , say , 2 years ?

Ø Will that encourage employers to hire more people ?

Ø Can inflation be better controlled thru a pay freeze ( less money in people’s pockets ), rather than thru hikes in interest rates ?

Ø Since salaries / wages are a major input-cost, can such freeze hold the production costs constant ?

Ø Will pay freeze lead to a “ low cost “ economy , making British products much more competitive internationally ?

Ø If this “experiment “ is successful, can it possibly lay the foundation of a National Wage Policy which pegs maximum annual wage-increase percentages  to 90 % of the rise in the Consumer Price Index of the preceding year, for both, the private and the public sector employees ? Can such mechanism , set in motion , a “ Virtuous Circle “ ?

Ø Can such a policy automatically control inflation without haphazard / half-cooked external interventions by Central Banks ?

Only history will decide whether George Osborne was a villain or a hero !

With regards

hemen  parekh

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