The Budget of England

The total government spending in England for 2012 has been budgeted at 703.4 billion pounds.  Like the United States, the government sets its budget before any funds are raised or spent.  Traditionally, the “mini budget” is presented to the House of Commons on a Wednesday in March the year prior to its execution.

The Chancellor of the Exchequer is the person primarily responsible for the creation of, adherence to, and execution of the Bank of England’s Budget.  The Chancellor currently is George Osbourne, and his role is similar to that of the Secretary of the Treasury in the United States.

Also like the United States, England’s Budget is the primary presentation of its Fiscal policy.  Government spending has increased significantly since the 2007-08 recession in part to attempt to boost income, investments, and overall growth of the economy.  The government has also taken on the task of funding universal healthcare.  The accounting for this government benefit, surprisingly, is taking in less than 20% of the government budget.  Defense spending (extremely un-like the United States) accounts for less than 7% of the federal budget.

I find it interesting that many of the main spending categories are used by the Bank of England seem fairly balanced to “job public” me.  I’m sure that portions of this presentation are cleverly compiled before publication to avoid political backlash that may be associated with it.

Word Count: 230

Works Cited:

http://en.wikipedia.org/wiki/Chancellor_of_the_Exchequer

http://www.ukpublicspending.co.uk/

http://www.usgovernmentspending.com/us_budget_pie_chart

The Bank of England

Similar to how the Fed is the central bank of the United States, the Bank of England is the central bank of the United Kingdom.  The goals of the Bank of England, however, differ from those of the United States.  It aims to keep inflation low, maintain trust in issued bank notes, and to promote stability in both the markets and the economy of the United Kingdom.

In a previous post, I’ve discussed the tools that the Bank of England utilizes to keep inflation as close as possible  to 2%.   The reason this low inflation rate is desirable to the Bank of England is because it protects the value of money that would otherwise be eroded by inflation.  I believe the 2% rate is not high enough, however, for the economy of England to grow.

The low inflation rate is likely because the Bank of England believes that stability is more important then a sustainable and low rate of growth in the economy.  They utilize regulation and policies to maintain a stable market.  They assess weak spots of the economy and attempt to reduce the impact of them in order to make sure the problems of one financial institution do not affect the economy as a whole.

Control over the United Kingdom’s money supply.  Ensuring that the money supply maintains its value and trust, different methods are used by the Bank.  Bank notes are only valuable because of the trust that they can be used to pay for goods and services.  Each note issued by the bank has raised printing, watermarks, metallic threads, and holograms to make sure the notes are legitimate.

Word Count: 272

Works Cited: http://www.bankofengland.co.uk/about/pdfs/whatthebankdoes1.pdf

Week 6: Who to Hire?

There is an interesting trend occurring in the English job market as firms are more often hiring workers who are NOT British.  This week, Iain Duncan, the Secretary of Work and Pensions, announced that measures were being taken to help promote businesses to hire European Union workers over non-European Union workers.  There have recently been cuts in Government spending, which is leaving the majority of open jobs to be filled in the private sector of England’s economy.

The private sector’s main argument against government regulation of their hiring practices is that the EU workers available for employment are not as qualified or hard working as some non-EU workers.  Firms’ general opinions are that migrants have a better work ethic as well as better training for the available jobs.

The government, however, argues that by not filling British jobs with British workers does not allow them to develop critical skills necessary for future economic growth.  The Secretary of Work and Pensions also points out that while not all EU workers are qualified to fill all positions, many positions are entry level and should be filled by British citizens.

As of recently, the government has placed a cap on the number of non-EU workers that private businesses are allowed to hire.  It is the government’s hope that the number of jobs filled will be met by British workers first, but also maintaining the liberty of private business decisions.  It should be noted that England does have laws to prevent discrimination of laborers based on their nationality, so there is a fine line to balance.

Word Count: 262

References:

http://www.bbc.co.uk/news/uk-politics-13984512