Archive for October 20, 2010

George Osborne is attempting to re-write recent economic history.

1. He wants us to believe that the UK is uniquely indebted. This is quite frankly deceitful as explained in my recent blog posts.

2. He wants people to forget that it was the banking sector that caused the world economic crisis and instead seeks to suggest that it was the ‘undeserving poor’ whose extravagant benefits payments sent us into a downward spiral of government debt.

3. He wants us to think that the failure of bank regulation was a peculiarly left-wing phenomenon i.e. Labour were uniquely at fault. The truth is that Thatcher began the process of de-regulation of the financial services sector and the right-wing administration of George W Bush took the same approach in the United States as that taken by Gordon Brown in the UK. It was assumed by the political establishment on both sides of the Atlantic that Financial Services was a ‘Golden Goose’ to be allowed maximum freedom. Right and Left were both seduced by the alchemists of the City.

Let’s remember that alchemy is illusory. Many believe that the smoke and mirrors of financial services can still be a foundation of a strong economy. The gold of the city turned out to be to a great extent Fools Gold. The sooner we wake up to the fact the better.

The scale of the banking bailout is so huge that it puts every other economic mistake of the post war era in the shade.

We simply must develop alternative industries to take the place of financial services. This will require boldness and substantial investment on the part of government. During the General Election the Lib Dems highlighted green technologies as essential to our economic revival, but we have heard precious little since.

I am left wondering where the Coalition thinks the growth and new jobs are going to come from. What is their plan other than savaging the State?

George Osborne told Parliament today that benefit payments to the poor and disadvantaged are to be savagely cut back. Osborne just announced an ADDITIONAL £7 Billion of cuts in benefits, making £18 Billion in all since the Coalition came to power. But the banks will fare somewhat better! No surprise there – Tories always protect their own, but it is shameful that the Lib Dem leadership are going along with this and I speak as a Lib Dem Parliamentary candidate in 2010.

Banks will face some unspecified ‘levy’ which Osborne claims will raise more than Labour’s tax on bonuses last year (£5 Billion). Well I won’t be holding my breath as we all know how clever these bankers are at protecting their money and squandering ours.

The details of the bank levy are due to be announced later this week. Even if the bank levy DOES raise more than £5 Billion per year and I repeat that we don’t have any details yet, this is a paltry sum considering the magnitude of the bank bailout (over £1 TRILLION – that’s £1,000 Billion) and the catastrophic damage to the Western economies that the banks have caused.

So the Tory Toffs (and their new found Lib Dem allies) are going to squeeze the poor whilst protecting the bankers. Same old Tories. Shame on Nick Clegg for going along with it.