Friday, 19 November 2010

Cat Out Of Bag

Lord Young did us all a favour by telling a bald truth about the current economic situation in his recent comments to the Daily Telegraph, where he claimed:

 "For the vast majority of people in the country today they have never had it so good ever since this recession – this so-called recession – started, because anybody, most people with a mortgage who were paying a lot of money each month, suddenly started paying very little each month. That could make three, four, five, six hundred pounds a month difference, free of tax. That is why the retail sales have kept very good all the way through."
This revealing revamp of Harold Macmillan's famous boast of 1957 infuriated David Cameron because it punches a hole right through his stealth strategy. The brutal truth that Young let out of the bag is that this is now indeed two nations: those who have jobs and own their homes, versus those who rent, are in low paid jobs or are not employed. This glaring inequality is not, as so many on the Left persist in believing, merely the legacy of that "Thatcherism" for which Lord Young was once a spokesman, but more so of New Labour's "intense relaxation" about income inequality.

We're not a nation split exactly in half - perhaps 66% live in Lord Young's "never so good" part while 33% languish outside it. But although Young's statement may be true of the current situation, with historically low interest rates, that doesn't mean we've reached a sustainable prosperity, any more than we had under Gordon Brown's credit boom. Take a look at the statistics for home ownership throughout Europe and the picture is blood-curdling. The countries with higher ownership than the UK are Italy, Portugal, Ireland, Spain, Hungary and Romania, all countries in desperate straits and hardly models we'd wish to copy. The countries with lower ownership include Germany, Holland, Sweden and France, all of which are in far better shape than us in almost every way. So just how good do we have it?

Young has indeed let the predatory cat out of the bag - he also admitted that Osborne lied about the severity of the deficit to protect the pound. Under a disguise of social liberalism this is a goverment of economic predation, intent on rolling back state expenditure to further the interests of the 66% at the expense of the 33%. From a utilitarian point of view - and that's the vote winning point of view nowadays - that might be seen as a rational course, but I doubt the 33% will see it that way. There may be a lot more fire extinguishers thrown from a lot more roofs before this is over. 


  1. I suppose it was merely a matter of time before this essentially tory government revealed its true divisive colours, but I was surprised that it's happened so soon, and despite Cameron's faux indignation they're now nailed firmly to the mast. But then in a cabinet stuffed full of millionaire career politicos (a fact which the well-cushioned media establishment curiously avoids alluding to), doubtless we'll get more of the same in the coming years.
    My own political disillusion now increasingly inclines me towards those with the fire extinguishers, but I fear that our innate national reticence will limit their numbers, unless or until the jobless figures rise above 15-20%. But then again, as Lord Young also revealingly pointed out, "the loss of 100,000 jobs (in the public sector) is no big deal", so we can assume that there'll be no tears shed in Downing Street when that happens.

  2. Oops, it looks as if he just resigned. I don't think that means Job Seekers Allowance though...

  3. I pretty much agree with everything you have said.

    I'm not sure about the 66% bit though, my guess is that it will be much lower as wealth and debt are opposites. In my experience there are a lot of people who are only making ends meet because of low interest rates. The grubby secret of the middle classes has been the number of households who have been in receipt of Working Family Tax Credits. It came as a shock to me in recent years as somebody who isn't a parent (and at my age isn't likely to become one) the number of people I know who have quite substantial homes and a couple of cars yet WFTC and Child Benefit has kept the wolf from the door.

    That is now ending and what happens when the masses in the middle run out of room to manoeuvre because of job losses, pay freezes and loss of benefits.

    The property price bubble and house porn fetish has fuelled the lie that home ownership and the debt to achieve it is a sign of a free society.

    Never mind 'Arbeit macht frei'.

    'Debt macht sie ein sklave zu kapitalgesellschaften'. Debt makes you a slave to corporations.

    What happens next is anybodies guess. It will be interesting to see just how angry people become.

  4. I take your point about that 66% figure - that's about the percentage who own houses, but a mortgaged house is only capital while interest rates are low, a temporary phenomenon. I suppose negative equity is a sort of poverty.


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