Gavin Maclure's Musings

My take on politics locally, nationally and internationally


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The Olympics won’t save you Dave

I’m an Olympics widower. I don’t really like sport (unless it is very exciting like Judd Trump smacking balls into pockets at the UK Championships last year as if he was playing down his local pub) and most Olympic sports are frankly boring.

Do hysterical spectators and people screaming “come on” at the telly realise these athletes do nothing else other than train all day? They have never had a real job or a life for that matter. We’d have a lot more world-class athletes if we didn’t have to work for a living too. Unfortunately, most people have to go to work to eat and have a roof over their head to pay for the taxes dished out in grants to these demigods the masses cheer on.

That’s not to say I am disappointed we bagged the Olympics Games. It is a geopolitical event extraordinaire. We had one billion eyes watching our Opening Ceremony on Friday evening and we were able to remind the rest of the world how much we have done for them: industrial revolution, saved their countries twice (thrice if you count the Cold War), export the best music in the world etc etc. And then of course the sheer brilliance of our engineering and technical skills shone through in the Opening Ceremony production itself.

But one thing the Olympics won’t do is save Dave and George’s skin. London, away from the Olympic venues, resembles a ghost town. Most workers have packed up for 17 days with reports hotels in the capital are having to slash room costs as it seems tourists have deserted the city along with the businessmen and women. And this isn’t even taking into account the skiving that is probably going on amongst the athlete-worshipping working population.

At this rate, we could be heading for a fourth quarter of negative growth within the current double-dip recession. This is terrible and is being caused by a) having a Coalition Government and b) poor and weak leadership: the two are not necessarily mutually exclusive.

There are many things George Osborne could do to kick-start the economy and reduce the debt, such as:

1. Bring the top rate of tax back to 40p: The Chancellor idiotically only moved it back to 45p at the budget in March thereby missing the chance to take one political hit – he blamed the Yellow Peril (yawn!)); this tax change would demonstrate the UK is open for business and encourage entrepreneurs to open new businesses and create more employment.
2. Cut public spending. We were promised by both Labour and Conservatives at the General Election in 2010 a bonfire of cuts, a holocaust of cuts, but instead the Government has barely scratched the surface with borrowing in this financial year targeted to be £120bn – more than Gordon Brown was borrowing in 2009/10. Bear in mind this is a worst case scenario (hence “targeted”) and actual borrowing is likely to be higher! In particular, local government spending should be cut further and why is NHS spending ring-fenced when it spends £17 on a pizza base (not even with topping)!
3. Use the savings made from the public sector to lower taxes for ordinary workers. Top of the list should be VAT – back down to 17.5% to kick-start the crippled retail sector. 
4. Reform planning laws to reverse rules which favour nimbys and instead make it easier for new housing to be built and dare I say a new airport to be built in the South East. This would help the other sector which is dying on its feet: Construction.

There’s four ideas. But it would require strong political leadership of the Thatcherite variety and when I look at the smarmy faces of old-moneyed David Cameron and George Osborne I really don’t think they would know how to act in Thatcherite manner if they tried.

The genius of Margaret Thatcher is she knew what it was like to strive and so knew what was needed to help the strivers in Britain and in turn wind the economy back up after the disastrous years of Labour in the 1970s. Dave and George can’t even imagine what it would be like. The sooner they are replaced the better (thankfully, if one goes, the other will follow!).


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Credit Easing

The word ‘Easing’ is the operative word in my headline post. It looks as if it is related to Quantitative ‘Easing’. That’s because it is. Both are about creating money out of nothing. IOUs, printing money, bonds, whatever you want to call it. It will only end up (and has already) in inflation – but then, may be inflation is the only mechanism the Government has got to reduce the national debt.

This would certainly do the trick for them except it would push us consumers further into the economic gutter. Employers are certainly not going to increase your wages to keep up with inflation and food and fuel prices aren’t going to come down any time soon.

Whichever way you look at it, with the weak decisions being made by politicians in the Eurozone and by George Osborne back in the UK we are in a full scale Japan-style 1990s recession. Unofficially, we are not in recession as the economy has its mouth above water, just! This is because growth is at 0.2% or thereabout. But for all intents and purposes we are in a recession.

I can’t help thinking if we had some real Tories in the Conservative Party high command and we were relieved of the Yellow Peril things might be slightly different.

Guido Fawkes sums it up well:

When the government starts lending money to companies that no one else wants to lend to, you can be sure of one thing, they are going to lose a lot of taxpayers’ money. Billions.