Syntagma Digital
Editor, John Evans

Saturday Ramble: Britain’s looming debt disaster

Decline In the mid 1970s, under a Labour Government, Britain effectively went bust. Prime Minister James Callaghan had the humiliating task of asking the International Monetary Fund to bail out the UK. That was the nadir of Britain’s post-war history.

Callaghan memorably told the 1976 Labour Party Conference, where he was roundly jeered by trade union leaders: “We used to think you could spend your way out of recession and increase employment by boosting government spending… I tell you that option no longer exists. And so far as it ever did exist, it only worked on each occasion… by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step.”

But what of now? Since those dismal days, our national debt has ballooned to twelve times more than the 1970s figures. Another Labour administration, under Gordon Brown and Ed Balls has made the British plight very much worse.

According to Moneyweek(.com)Magazine, in an apocalyptic article titled The End of Britain, the present situation is almost impossible to solve: “when you add in all of Britain’s ‘unfunded obligations’ — promises the Government has made on things like public sector pensions — our debts swell to 900% of our economy.” And, they say, no country has ever escaped from a debt that big without total collapse.

Moreover, “There is nothing the government can do to solve the debt crisis. Better people than David Cameron and George Osborne have tried to get out of similar crises in the past – and failed. As you have seen, the hole we have dug for ourselves is simply too big to ever fill back in.”

The magazine is predicting a catastrophic collapse of the British economy not too far into the future. Will it be as bad as that? In the Moneyweek scenario:

In 1933, President Roosevelt signed executive order 6102, forbidding the man on the street to hold any significant amount of gold. In the midst of the Great Depression, the government basically made it illegal for anyone but them to hoard the precious yellow metal. Refusal to comply with these demands was met with a five-year prison sentence. That’s essentially how the US filled Fort Knox – by seizing other people’s gold.

Just last year in Hungary, facing a debt crisis similar to our own, the government nationalised all pensions. In effect, they confiscated people’s savings. Can you imagine waking up one day and being told that the income for the last 30 years of your life hangs on a government promise?

In Greece right now, benefits have been cut to the bone, salaries and pensions have been slashed up to 40% and the retirement age has been hiked to generate more income from the population – the very victims of the crisis.

The past is another country. We think we have escaped its cataclysmic episodes, but look at how the European Union has devastated Southern Europe with its profoundly ill-conceived euro currency and, even now, refuses to admit it is dead in the water. Vanity knows no bounds in Brussels.

At the limit, most people are inadequate in the scenario the global finance industry has created. They have constructed a world machine so complicated that no one person can ever understand or control it. The result is that the engine of this behemoth is now running out of control, with no individual politician or parliament able to seize back the initiative.

And the agonising position is that Britain’s debt Himalaya is much worse than even that of Greece, Spain, Portugal and Italy — the much derided PIGS.

As the article puts it, “… things won’t be this way for long. Because the simple fact is: When interest rates rise – and they WILL rise – Britain will face the greatest crisis in generations.”

Alarmist? Perhaps, but even so I suspect we are all in for a bumpy ride.

John Evans

… who is the author of The Eternal Quest for Immortality: Is it staring you in the face? Available from Amazon and all good booksellers.

Coming up: Mystology: A different way of looking at the world. Also a website, mystology.com.

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Political Commentary: Budget realism is thin on the ground

Political chaos The noises coming out of the Treasury on next week’s Budget do not not bode well. Steady as she goes; let nature do the heavy lifting; don’t rock the boat, just about sums it up.

The Chancellor seems to have deserted the field of battle. For his first three years at Number 11, he has tinkered and trimmed while the national debt has continued its inexorable rise skyward.

More than half of public-sector activity is ring-fenced, while what’s left bears the brunt of “cuts”. The natives, including senior Cabinet ministers, are either loudly protesting or plotting revolution.

With just two years to go until the General Election, George Osborne can’t do very much now without admitting his grand strategy has failed to deliver results within the timescale required.

Only one priority should be on his desk for Wednesday week: increase demand in the economy, while not adding to the deficit. How can that best be achieved?

The Budget should be aimed relentlessly at releasing significant funds into the hands of those who will spend it, while simultaneously balancing up by reducing public expenditure. In other words, a neutral, but expansionary Budget.

What the economy urgently needs now are tax reductions for the “Thrivers”, people with mid-to-high incomes up to £70,000. They can be almost guaranteed to spend it. This group has been hammered by the Coalition since it came to power, yet they are the only demographic with the weight of spending power to relaunch the economy.

The “Strivers”, just below the Thrivers, are not quite in the same league and lack the firepower of those who have made it, but a little nudge to them would bring dividends economically as well as electorally.

Politically, both Labour and the Lib Dems will howl like banshees at the “unfairness” of it all. It’s even possible the Libs will refuse to support the measures in Parliament, although it’s hard to see how they could remain in the coalition under such circumstances.

This really should have been done three years ago. Labour’s vicious tirade against “the rich” (meaning the hard-pressed upper-middle class) has made it difficult to push easy spending power into the economy. Same old socialists!

Given that the Budget has become a political statement these days, mainly to avoid Labour taunts of “Same old Tories,” some real grit will be required to make the case. So far the Cameroons have chickened out of this.

Overall, that is the only medicine that stands a chance of delivering results before the election. Osborne’s planned rearrangement of the deckchairs is an admission of defeat.

In the absence of such measures, we can write off this Parliament economically. Whether the Government’s radical social measures already enacted will be mature enough to make a difference is also debatable. They will cost money and do little for demand.

Confirming what I wrote in my last column here, Barking lurchers: an ICM poll for The Guardian finds that by a majority of 67% to 25%, voters agree “the Conservatives would be more appealing if they took a tougher line with Europe”. That applies even more to immigration and support for traditional families.

Cameron and Osborne should try climbing aboard this victory train before it’s too late. Nothing else matters right now.

John Evans

… who is the author of The Eternal Quest for Immortality: Is it staring you in the face? Available from Amazon and all good booksellers.

Coming up: Mystology: A different way of looking at the world. Also a website, mystology.com.

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Political Commentary: Barking lurchers

Lurchers

It is ever the case that political insults are mostly aimed at the Right. The Left has a long tradition of smearing anyone with views that differ from their own.

This week’s prime example is the phrase: “lurching to the Right”, which was unthinkingly parroted by David Cameron. Stealing the Left’s clothes is a dangerous game for a Conservative leader.

Naturally, nobody “lurches to the Left”. It hasn’t yet been added to public discourse, for it is a general rule that the Right are less nasty than the Left.

So why did the Tories permit themselves to be dubbed “the nasty party” by one of their own, which encouraged them to adopt a persistent policy of proving they are not. Thus the Conservatives found themselves endlessly fighting on Labour’s ground, claiming to be “more compassionate than thou”. As a result they lost the meaning of conservatism and even their self-image is now at risk.

One of David Cameron’s greatest weaknesses is that he is not reflective. He doesn’t analyse the essence of words and phrases and tends to go with the flow, even those created by Left-wing reactionaries. One can’t “lurch to the Left” because that phrase has not entered the lexicon and would be swiftly trashed by the guardians of Labour’s soundbite soul.

Whatever you think of Margaret Thatcher, nobody denies that she grabbed and controlled the agenda. She even corrected Neil Kinnock’s pronunciation of “Boris” — as in Boris Yeltsin. The Left were constantly on the back foot and reduced to playing catch-up, as the Tories are now despite being in power.

Notice how often Cameron has to make a big intervention to prove himself as a credible prime minister, and how often it burns brightly for an instant before falling apart under analysis. He rarely holds the initiative for long before attempting to justify himself as a caring person who will never “lurch” onto demonised ground — even if it has consistently won his party elections over more than 200 years.

That is why his premiership is now falling apart, along with the efforts of his prime strategist, George Osborne. Obsessive self-consciousness kills political careers dead.

Ultimately, a mind with a First from Oxford should be capable of spotting the weaknesses of a false narrative that more closely describes the Left itself. Cameron is attempting to outflank Labour on the Left as his hero Tony Blair did to the Tories on the Right.

The fatal flaw in that course is that, all things being equal, the British electorate responds more easily to a Rightish analysis than they do to the Left. We are a conservative country. It doesn’t take much to make it Conservative.

The Cameron stance has comprehensively failed. By trying to be Blair in reverse, he has lost credibility and the power of initiative in the eyes of voters.

Being centre-right in the old sense is all we ask of him.

John Evans

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DIARY: Leveson lament, River ramblings, Poppycock Watch: Autumn Statement, Mark Carney, Profundity of the Week

Monster

What are we to make of the much-anticipated Leveson Report on the behaviour of the Press? The more one examines it, the more holes it reveals.

At first glance, two points stood out for me. The main one was the unexpected intrusion of “statutory underpinning”, a phrase meant to reassure, but had the opposite effect. Shades of Moscow and Beijing and dark forebodings of rampings up to come.

The other was the dropping in of that most tiresome of quangos, Ofcom. Apart from anything else its head is appointed by government, so represents, for the first time, an official interference in the workings of a Press that has been free for more than 300 years.

Shami Chakrabarti, a Leveson committee member and head of Liberty — a quango-esque outfit — seemed more than a little confused, backtracked on Marr, then appeared to do a backflip on the Today programme.

As a specialist lawyer in the field, if she can’t make sense of it, how are the rest of us meant to? There are far too many loopholes in Leveson for my liking.

It was interesting to see Fraser Nelson, editor of The Spectator, a cultural magazine that never dies, take a stand against the whole package. Could he ultimately be jailed for his rebellion? Unlikely, I would think, given the hardening of attitudes in Fleet Street.

Ed Miliband and Nick Clegg made fools of themselves, jousting for attention and significance. An inadequate showing.

While the Prime Minister was right to reject the statutory angle, he should probably revisit his apparent support for Ofcom involvement. The status quo seems the safest option.

* * * * *

This morning was one of those frequent days here on the Devon-Cornwall peninsula when the seasons go haywire.

Rough northerlies switch to the west and the breeze comes in off the Azores like an angel’s kiss — as the Poet put it. Along the river, shrubs often bloom erratically right up until January, while local people lunch outside at riverside cafes even in February.

Thus it was this morning. Springlike and bracing, the waterbirds making the most of the break from drear winter with its occasional reminders of the Northlands.

On the river — now thankfully back to sedate normality after last week’s flood surge — our lone black swan has returned from his summer break. Incredibly, he has brought a mate with him (see my picture).

Black Swan
Black Swan’s mate

Last spring, he was rather isolated from the white swan colony and often seemed agitated. Now he has a faithful companion whom I’ve named Tonto — even though she’s a girl.

Unusually, beneath her black wing feathers there are some that are snow white. Clearly she’s something of a cross which, instead of producing a greyer colouring, has given her a chequered appearance, especially when preening.

The question now is will they produce cygnets in the spring? That really will draw in the crowds with their cameras and bags of ghastly white bread as offerings to the inhabitants of the waterside.

River cafes are the order of the day here.

* * * * *

Poppycock Watch
I suppose I should say something about this week’s major event: Exeter Chiefs’ victory over Wasps in the Rugby Premiership Wednesday’s Autumn Statement.

George Osborne is the Lone Ranger these days. Even Tonto has deserted him for a berth on the River Exe [an oblique reference to Nassim Nicholas Taleb’s book Black Swan]. However, all is not irretrievably lost.

All he need do is steer clear of taxing regional delicacies, mentioning rail fares and anything ending in “gate”, praising Ed Balls, announcing an imminent leadership challenge against David Cameron, commiserating with Paul Tucker, and declaring undying devotion for Brussels.

We wait with bated breath.

Now about Exeter Chiefs …

* * * * *

When I first heard a report that Mark Carney was to become the next Governor of the Bank of England, I misheard it as Martha Kearney, presenter of the BBC’s The World at One. I spent a puzzled hour wondering why.

Anyway, a lot of people seem to like the cut of his Canadian jib, and he certainly appears to be perfectly qualified for the post. As the current holder of Canada’s equivalent berth, plus 10 years experience in the City, including the ubiquitous Goldman Sachs, he out-sparkled a dowdy lineup of hopefuls.

The City of London is crying out for a New-World man — with the exception of Bob Diamond, of course — to breathe new dynamism into its ancient institutions. To say that the Square Mile has gone from “hero to zero” is to ignore the seriousness of the situation.

Wall Street is fighting tigerishly to regain top spot among financial centres, and while the City still has dominance in foreign exchange, including a new franchise for China’s currency, the renmimbi, it continues to take on the aspect of a ricketty house of cards.

The list of frauds allegedly prosecuted there would not be believed if they appeared in a Jeffery Archer thriller.

Let’s hope that Martha Mark Carney can steady the ship. London needs a Nelson not a Drake now. A game of bowls simply will not do.

* * * * *

Profundity of the Week
“Are you aware that you are time-travelling every moment of your life? What happens if you stop?” Unknown

John Evans

… who is the author of The Eternal Quest for Immortality: Is it staring you in the face? Available from Amazon and all good booksellers.

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Saturday Ramble: Crumbs, what a pasting for Cornwall

Cornish Pasty

George Osborne and Danny Alexander obviously don’t know much about the West Country.

I doubt they consulted Cornish MPs, George Eustice (Conservative) or Andrew George (Lib Dem) on the delicate subject of the pasty tax. The latter is calling for a rethink, while the influential Eustice writes on his blog:

“There has been a lot of controversy over the proposed reforms of the VAT regime for hot takeaway food and there is a great deal of concern over the impact this might have on Cornish pasties. It is another of those issues where all MPs in Cornwall, regardless of party, must work together to try to get common sense to prevail and to prevent any damage being done to this vital Cornish industry. There is a consultation underway and we have to ensure that Cornwall’s voice is heard.”

For those of us who live on the Peninsula, food is an important local issue. Devon and Cornwall are largely rural counties, with little industry, and only tourism and food production to pay the bills. Quality food is a hot topic in these parts.

Last summer there was an almighty kerfuffle, conducted with much good humour, over which county made the better cream teas. One version puts the cream over the jam, while the other has the jam over the cream. I can’t for the life of me remember which was which, although, for the record, I prefer the cream atop.

Devon won the verdict after a hard-fought contest. This life or death struggle, by the way, was shown live on television. Never underestimate the South West in the Grub Stakes.

The other day, feeling peckish in mid-afternoon, I descended from my office and stuck a Ginster’s pasty in the oven. In ten minutes, I reflected, it will be worth 20% more than when it went in.

That is a very large markup. Had I discovered the Next Big Thing? No, it will all go to the Treasury to pay off Gordon Brown’s debts.

Unfair? You bet. But I doubt Osborne had any idea how his tax would be received in Cornwall, which lives on holidaymakers and pasties. Tragic, but true.

So let us rally all the pasty fans of Great Britain to the fightback. Helpfully, Her Majesty’s Revenue and Customs is conducting a survey of public attitudes on the topic, inviting views before May 4.

If you wish to comment, just email: david.roberts4@hmrc.gsi.gov.uk.

Let’s see how responsive this Government really is.

John Evans

who is the author of The Eternal Quest for Immortality: Is it staring you in the face? Available from Amazon and all good booksellers.

Mystics in the Modern World is coming soon.

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