UK debt, financial restraints are a joke

Will Parliament feel the credit crunch?
Will Parliament feel the credit crunch?

The coalition government of the UK, announced its first budget on 22nd June 2010.

As was expected it generally included cuts. The coalition were adamant that these cuts would be fair and across the board. No more one law for the rich and one for the poor.

Of course, in reality, this was far from the truth. However, they seemed to have masked matters well and played a cunning hand. People on the whole seem to have accepted that a tightening of our belts was inevitable and must be endured.

This meant that the 24th June news reports, regarding massive bonuses for Network Rail chiefs, came as a slap in the face to those ordinary people, like me, who struggle to survive.

They also proved embarrassing for the Government.

Ian Coucher is to receive 641,349 as a golden hand shake whilst other workers are to have their measly pay and pensions attacked
Ian Coucher is to receive 641,349 as a golden hand shake whilst other workers are to have their measly pay and pensions attacked
Phillip Hammond transport Secretary
Phillip Hammond transport Secretary

The railways in the UK, when I was young, belonged to the country. Having been nationalised British Rail was heavily subsidised by the Government, so in effect it was owned by the people.

Some years ago, during one of the Conservative party governments, Margaret Thatcher's I think, the railway system was broken up. Private enterprise was encouraged and ordinary people were encouraged to invest in companies and become shareholders. For a time it was a golden age and people were making a killing left right and centre.

Inevitably the glory days of rail came and went and, these days, the UK rail system has plenty of problems. Do not get me wrong though. British Rail also had many problems.What makes it difficult these days though is that different companies own and run different parts of the UK railways. This has led to uneven pricing and services.

Network Rail still receives some tax payers money via government subsidises. Even if they did not though, the Coalition Government have been at pains trying to insist that top salaries, particularly in the public sector, will be held back. No more massive salaries and bonuses was the claim. In the private sector the government does not always have the power to stop such payments but with the company receiving government and taxpayers money surely it should, in the case of Network Rail.

Here are the details of what was announced:

  • The Chief Executive of Network Rail, Iain Coucher, will get bonuses of more than £640,000.
  • Other Network Rail directors are to get extra payments which all run into six-figure sums
  • All in all the railway bosses will receive a total of more than £2 million in bonus payments.

It is only a short while ago that the Transport Secretary, Phillip Hammond asked that the Network Rail chiefs remembered how generous their ordinary pay was. With such levels of annual salary, massive bonus payments are not necessary and, in the current economic climate, are almost an insult to other public sector workers.

One company executive, Rick Haythornthwaite, is not taking any bonuses. He has said though that Network Rail only rewards success. Big deal. With such generous salaries should they receive any extra financial reward at all? Surely being a success is simply doing their jobs?

When you consider that public sector workers, who earn more than £21,000 a year, will have their pay frozen for two years, and those that earn less than £21,000 a year will receive a flat £250 for each of the years, it is not hard to realise that something is wrong.

It would seem that Robin Hood and his Merry Men are alive and well and still working from the Houses of Parliament, London, England.

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Comments 23 comments

jaskar profile image

jaskar 5 years ago from England

they keep feeding the voters crap and they keep voting for them. excelent. combined with FPTP we wont be seeing and end to this soft right BS economics for a while. orothodox economics doesnt work. and your hub outlines a perfect example of how.

last time i heard the word keynes from a politician was from the green party.

good article. well researched. enjoyed reading it.


ethel smith profile image

ethel smith 6 years ago from Kingston-Upon-Hull Author

I haven't received the email. I am in the same position as your girlfriend but earn even less.

Trouble is that those deciding on the cuts will no doubt be managers who will feather their own nests.

Thanks for the visit and wish your girlfriend luck from me. We are all going to need it in the NHS


rjbeech12 profile image

rjbeech12 6 years ago

My girlfriend is a medical sec for a doctor in the UK, she makes around £18500 so her pay hasn't been frozen but for the amount of work she does its a joke that her pay has virtually been capped.

Some good news though, yesterday the UK heath secretary actually emailed every NHS staff member in UK hospitals to tell them that the number of managers would be reduced which is great as they don't need half as many managers as there are currently.


ethel smith profile image

ethel smith 6 years ago from Kingston-Upon-Hull Author

It is so frustrating Mick as so many voters just fall for the same old garbage from politicians.


MickS profile image

MickS 6 years ago from March, Cambridgeshire, England

excellent bit of work, Ethel.

The deceit by the government will carry on.

Someone up there mentioned the banks, we paid them, 50 billion was it to get the house market moving, the banks carried on starving the market and paid themselve massive bonuses with the money?


ethel smith profile image

ethel smith 6 years ago from Kingston-Upon-Hull Author

It better be a Noah's Ark I guess habee lol. Thanks for the visit


habee profile image

habee 6 years ago from Georgia

I think we're all in the same boat, Eth. I hope it's a really BIG ship!


ethel smith profile image

ethel smith 6 years ago from Kingston-Upon-Hull Author

One thing is for sure it will be the poorest worst. Our government is starting on benefits now. No doubt those that are artful will still prosper and those in need suffer


sheila b. profile image

sheila b. 6 years ago

And now let's see what else they think up at the G20.


ethel smith profile image

ethel smith 6 years ago from Kingston-Upon-Hull Author

I definitely agree with that. The railways have been ruined


Property-Invest profile image

Property-Invest 6 years ago from London

It's so sad. The UK infrastructure is creaking at the seems I use the trains and tubes everyday. It should not be run for profit, but profits reinvested. All essential services should be run that way!


ethel smith profile image

ethel smith 6 years ago from Kingston-Upon-Hull Author

Thanks GB and humagia.

The Liberals have done their selves few favours teaming up with the Tories. In effect they will have lost potential voters in the next election.You make interesting and relevant points, thanks for dropping by.


GarnetBird profile image

GarnetBird 6 years ago from Northern California

How SAD--when I lived in the UK I adored the trains.Very professional Hub!


humagaia profile image

humagaia 6 years ago from United Kingdom

Ethel, it needed to be said and you said it.

However, to my mind it is not the financial constraints or the big bonuses that are the worst issues. Has anyone in the UK considered the outright lie that the coalition announced about the budget?

What lie you ask?

That the measures were UNAVOIDABLE!

This is blatantly not true.

The measures that have been implemented will ensure that each and every one of us in the UK will be in this mess for the next 10 to 15 years. Yes that long.

The measures implemented are those that Japan implemented in the mid-1990's and they were catastrophic to their economy. Our Government has ensured that we will be in the same situation.

To say that they implemented these strategies because of our debt position and that the markets and banking system required this to be the case is pure unadulterated claptrap. Our debt is not on the same basis as Greece, Spain, Portugal etc. Quantity-wise perhaps but quality-wise not. We are AAA rated and extremely unlikely ever to be otherwise. We pay our debt and we can pay our debts. Those are the qualities that differentiate our debt from that of the other European countries. If we were in so much of a hole debt-wise why are the Gilt interest rates so low? If we had a problem the Government would have to raise the return on investment considerably.

It is time to stand and ask these nincompoops what their back-up strategy is. I personally cannot see how relying on the private sector to export us out of this mess can work within a five-year period when that export base does not even exist yet. With the pound becoming stronger against the Dollar and Euro exporting will become more difficult. What is more what do we have to export?

The sooner the Lib Dems dump these imbecilic Tories and thereby cause another General Election the better.

And as for making me work another year before being able to retire................ The French feel sorry for us. They are protesting about their Government trying to put their retirement age up to 62!!!!


ethel smith profile image

ethel smith 6 years ago from Kingston-Upon-Hull Author

Thanks to you all for visiting. Those in the UK-yes I think we are in for a winter of discontent, big style. I know that these bonuses for network rail are not the only ones but the timing of their announcement, just after the budget, means that they were insensitive to say the least.

To those in the USA good luck with your financial worries.


Sandyspider profile image

Sandyspider 6 years ago from Wisconsin, USA

Very informative. It seems like the financial restraints is messed up in the UK as well as the US.


katiem2 profile image

katiem2 6 years ago from I'm outta here

This issue of financial restraints is a very troubling fact or facts that are running a muck all over the world. God Bless of Each and Everyone! Peace :)


Hello, hello, profile image

Hello, hello, 6 years ago from London, UK

It is not only the railway who gets bonuses. The best is the banks which those high racky ran into the ground, got bailed out with tax money and got millions of bonuses. The Houses of Parliament ordered now luxury sofas each costing £4,600 and I think they were three or four thousand ordered. I am sure the previous hadn't had the springs hanging out. On a whole I think the vote was fiddled. The closing of the voting station which were all in the Midland and North where the Labour supporters are, was purposely done so. Noway they could have come back, normally, after waht they done the last time. Another thing will bite badly the working people is the VAT 20% because the shops will make a meal of it. Watch out the real thing is still to come in the autumn.


prasetio30 profile image

prasetio30 6 years ago from malang-indonesia

I learn much from this hub. Very informative. Good work, my dear. Thank you very much.


Shinkicker profile image

Shinkicker 6 years ago from Scotland

It'll be interesting to see how ordinary British folk react when these measures begin to bite.

We've been forced to bail out the banks who caused the mess and in return we're told we'll have to suffer.

The Poll Tax led to major public unrest and demos.

I think this will too.


barryrutherford profile image

barryrutherford 6 years ago from Queensland Australia

Ethel Thanks for posting this hub Like you I remeber me travelling through Yorkshire during the length of My childhood in England by train the 1960's until 1975. In Those days a railway worker was entiled to be proud to work for the railway.

You can imagine my shock when I returned in 2000 to discover what a mess they had become !


ethel smith profile image

ethel smith 6 years ago from Kingston-Upon-Hull Author

Trouble is already looking but we British are not as politically active these days as the French etc. We might be though if such antics become the norm


billyaustindillon profile image

billyaustindillon 6 years ago

This is asking for trouble if ever I have seen it - massive austerity and then these bonuses - thanks for the report Ethel. For austerity measures to work and be accepted they have to be fair across the board. If not you get all the protests and riots - just to do, France, Italy, Greece and Romania - not good.

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