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No Rishi: You and Your Party created this unmanageable National Debt. It’s time for YOU to own it and live up to the responsibility you coveted before more lives and businesses are needlessly destroyed on a whim

June 22, 2021 1 comment

If you believe that the Johnson Government has handled the COVID pandemic in the best way it was possible for anyone to do so, please Please PLEASE think again.

No, I’m not laying out a stall to argue the merits or the wrongs of Lockdowns, social distancing, vaccinations for everyone or zero-COVID as an impractically myopic cause. All of the questions that exist covering the unnecessary whys will continue to grow in number and the answers will most likely be provided as the consequences unravel around us all over time.

With talk and media attention now refocusing and pointing towards tax rises and the public policy changes that might begin to tackle the phenomenal National Debt created by the Johnson Government, it is becoming increasingly important for people to know and understand that even if lockdowns, social distancing and population-wide vaccination were the only way to tackle COVID, the people who have been unable to work and the businesses that closed or had significant loss in turnover, could have been supported in a much simpler, more intelligent and more considered approach. One that would have been equitable and fair to everyone, but above all would not have created either the level of National Debt or the otherwise unimaginable situation where workers furloughed on ‘free money’ understandably have no desire to return to doing the work the Johnson Government has been paying them not to do.

At a time of national crisis, we have a right to expect that the people we elect to make decisions and act on our behalf will do so in the best interests of everyone – not just themselves.

People who have attained and actively coveted the level of responsibly that not only Ministers but all MPs have, should either possess the experience or understanding to reach high level decisions, or know how to bring all of the right people and different interests together so that all of the pertinent information is made available to them and solutions can quickly and efficiently be put together that will be beneficial to all whilst working in the best interests of everyone.

What we got when the Johnson Government response to the COVID pandemic kicked off in March 2020, was a ‘pic n mix’ or ‘pin the tail on the donkey’ approach. We have a Prime Minister and Chancellor who were simply not up to the task and were driven not only by their own self-interest and fear, but also that of the civil servants and advisors surrounding them. The net result was that with both eyes on legacies and the result of the next election, our so-called leaders simply picked up and ran with the most obvious solutions that worked for them, rather than first working the consequences for everyone else through.

They then backed this travesty of absent leadership with a dangerous narrative that even now they refuse to step back from. One that has destroyed lives and livelihoods without any reason at every step along the way.

In response to the financial and economic issues created directly by the lockdowns they chose to impose; the Government should have imposed a parallel and universal shutdown of the monetary or economic system. One where people and businesses that suddenly found that they were unable to service bills and expenditure through no fault of their own, would have no obligation to make debt payments or meet service charges for anything non-essential that they were not using for as long as needed – with Government stepping in to underwrite the cost and provision of services that are essential for life.

The only need for direct financial subsidy for ANYONE either without or with a reduced income would then have been the weekly cost for an individual and their dependents to be fed and for their basic needs to be met. A figure substantially less than the free cash payments that have now been made and already add up to £60 Billion in Furlough payments alone.

Those key workers able to continue working on the frontline to provide products and services that are essential and are for the benefit of all would have had the de factobonus of a payment holiday on all of the big living costs such as rent, car payments or mortgages. This would have been a very fair and equitable way to reward those continuing to work throughout the pandemic without favour and give them a proportionate and timely thank you for all they have done.

The impact and consequences of the choices that the Johnson Government made, are already far-reaching indeed. It just doesn’t appear to be that way as lack of meaningful media coverage means the real-life disasters that are already unfolding don’t sell news and will not see the light of day.

The impact and scope of the problems that eighteen months of lockdowns have caused at individual, community and social levels, came about through a complete lack of consideration for the consequences of the financial measures that the Chancellor imposed upon UK businesses. Such measures and the decision-making processes that underpinned them could only have come about as either the result of a mixture of stupidity and complete ignorance or by deliberate, malignant design. Neither demonstrate an acceptable way for a democratic UK Government to perform and raise many questions about the quality and suitability of the politicians we have.

To say or believe that nobody else could have done a better job or have done anything differently simply isn’t true.

Many were aware, right from the beginning that the choices being made by Government were flawed, based entirely on the wrong motivation and ideas, and that there were alternative ways to handle all of the problems that Covid created, rather than the approach that Johnson and Sunak have taken, facilitated by a Parliament full of MPs who should have understood what was going on and intervened much earlier on.

The size and magnitude of the problem the Johnson Government has created is so big and so far reaching that the consequences have not even hit many of us yet.

Without us being aware, much is already changing economically behind the scenes and the inevitable ‘new normal’ is yet to come. It will not look like anything we have seen in living memory before.

Some are already suggesting that financial burden of the Johnson Government’s handling of COVID will be placed in the hands of future generations, many of whom have yet to be born.

But the debt that is still being ratcheted up is so big that when the impact and consequences of what these unwitting totalitarians have done have been fully manifested, it will become painfully apparent that the economic system as we know it is done.

The way of doing things economically, financially and with money as we have been – whether consciously or not – can no longer go on and will cease to exist.

The UK might have been better positioned to weather the coming storm and deal with the fallout from what will be the significant financial and economic crisis that the Johnson Government has wilfully engineered, had it not been the case that governments around the World have acted in very similar ways.

The behaviour of our supposedly skilled worldwide leadership has given credence to the very strange and dangerous philosophy inappropriately named the Great Reset by the World Economic Forum – a wholly quixotic and dangerously impractical set of proposals that will only become prescient if people continue to behave and respond like the whole thing is a done deal.

Trying to explain the unexplainable to so many frustrated, bewildered and disenfranchised people who are now looking for answers – as less and less of what the Johnson Government does appears to make sense, leaves many vulnerable to the influence of conspiracies. The idea that there is some great plan at work to enslave society and put us all under the yoke of some Orwellian regime only becomes the dystopian nightmare we fear if we make that idea real.  

In truth, many of the things that Ministers are publicly saying and doing are fuelling this myth. Yet the truth is far more mundane.

Politics in the UK has become the preserve of the ambitious and of those seeking glory who have no care nor consideration for anyone but themselves.

Politicians have become self-styled wordsmiths and the manipulators of truth. They have reached far into the dark art of behavioural science to terrify and control normal people, whilst telling us that they are our saviours and that they and only they are the ones to get things done.

Real people, in an increasing number – if not already a majority – are now in the position where they cannot afford the lives that they already have.

Burdening us all with an horrific level of National Debt that we simply do not possess the means to service without further sacrifices that we cannot afford demonstrates a level of detachment from real life and day-to-day reality on the part of the political classes that is at best breath-taking and at worst borderline criminal to say the least.

The UK was already heading for massive financial problems before the COVID pandemic arrived. Modern Monetary Theory (MMT) and Neoliberal Policy has been the cause of much of the financial inequality that already exists across society.

Such theories are treated like they are a saviour by Rishi Sunak and his Advisors. Yet the impact of a philosophy or set of ideas that suggest the markets will look after everything if they are allowed to function on their own with minimal regulation would be a wholly inappropriate and misguided approach to managing the affairs of a country in peacetime. It is certainly not the way to lead us through any kind of national crisis and certainly not for fighting any kind of war – as tackling the Covid pandemic has been likened to by those seeking to big up their leadership credentials and prowess.

The real reset, reboot, redrawing or revaluation of everything that has become necessary is not one that self-serving, self-absorbed politicians and ambitious would-be leaders who have no respect for others can control. Even if for a period of time it looks and feels like they can.

The financial system that we have and the ideas that underpin it are completely broken. The Johnson Government’s mishandling of the financial response to the COVID pandemic has speeded up its destruction. Their actions are now shedding light onto just how poor and damaging the consequences for everyone are from a system that champions and promotes financial interests and profit above all else.

Money has no intrinsic value. It is a unit of exchange, nothing more. It is certainly not a thing, nor the ‘god’ that its use as a reference point for the value of everything suggests that it has now become.

If money were real, governments would not be able to print it or produce it in the quantities that they have done over the last 18 months – seemingly without consequence. Yet we are seeing money appear out of thin air.

Everything will have to be revalued, but not just in financial terms. It must be for the benefit of everyone and certainly not the same old few.

There is an ethical or moral deficit present within the whole of government and the financial system that itself needs to be completely and comprehensively reset. We can no longer continue on a pathway where those in power at any level within politics or business make decisions and act not because they have questioned whether it is right or wrong to do so, but simply because they can, and it serves their purpose to do so.

Indeed it is ironic that the actions of many businesses to now push up prices post lockdown to ‘make up for what they have lost’ – not because they should, but because they can – could easily prove to become the inflationary catalyst that will bring the whole house of cards down.

The decisions that must be taken to achieve the change that will address the massive societal and systemic imbalances on our behalf will be the responsibility of the Government, the Ministers, the MPs or whoever leads and runs this Country when that time comes.

However, it would be better for us all if the decisions were taken now and before any more damage is done. That way, many of the additional problems that normal people are going to needlessly face can be prevented before they even begin.

This would certainly require Rishi Sunak to choose to own his decisions now, rather than offload them or project them onto a public suffering with crippling financial fatigue.

As this class of politicians is responsible for creating many of the problems that we face, it is only fair to expect them to step up and fulfil the requirements of the responsibility that comes with the jobs they wanted, before inaction and ineptitude causes more damage than our society can sustain.

Explaining the Deficit: Let’s call it the Overspend instead…

December 22, 2014 Leave a comment

Red-HerringYou are probably feeling quite fed up with politics, politicians and all the talk of May 2015. If not, the chances are you may be one of those planning to run in the General Election.

Wherever you look, the Parties are sounding off in what they are calling the ‘long campaign’ which runs from now until April, and the Deficit is something we are already hearing a lot about.

But when a Westminster politician starts talking about Deficit reduction, or making statements that indicate they ‘plan’ to reduce the Deficit to zero by the year XYZ, you may be one of the many people left wondering what they are actually talking about and what it really means.

You might not be sure what the Deficit is. You may not understand the difference between the Deficit and the National Debt. But whatever question you may have, don’t worry. Even MP’s have struggled to explain the difference when they have been asked to do so.

Giving new names to existing products, services or methods of working isn’t a new idea. In fact, it’s not just Westminster politicians who use new names to sell their ideas and many of the new products you buy will just be a re-hash of an old idea using new words to describe something differently; just so it sounds like something better.

Selling is one thing. Misleading us another. The term Deficit is perhaps one of the biggest red herrings that Westminster has created, and especially so when they use it to draw attention away from the spiraling National Debt.

So what is the Deficit?

Perhaps the easiest way to picture the Deficit is to think about the Government as a person. A person who earns money and then spends that money on house-keeping and all the things that it might need.

Where we might run a home, the Government’s house is the whole of the UK.

Where we might spend our money on food, the mortgage or rent, clothes, transport, paying back loans and maybe going out, the Government’s housekeeping bill is public services such as the NHS, the Police, Armed Forces, Education, Transport and Local Government.

Whereas we would do a ‘job’ to earn a salary or perhaps an hourly rate of pay, the Government ‘earns’ its money through Income Tax (PAYE), National Insurance, VAT and all the other types of Taxation which we all pay.

Whilst most of us can only earn what our employer agrees to pay us, every year, the Government sets itself a Budget for all the money it will spend on public services. The Budget should ideally not be more that what the Government has ‘earned’ or will ‘earn’ from Taxes during the year that the money will be spent.

When a Government decides that it wants to spend more in a Budget for a year than it will ‘earn’, it has two choices. The Government can raise Taxes so that it has more income than it did before, or it can borrow on top of what it has earned and ‘overspend’ – even though we are normally told that they are spending within Budget.

The difference, value or balance between what the Government ‘earns’ and what it has planned or does actually spend in its Budget, is what Westminster politicians call the Deficit.

Each Budget Deficit – or the Deficit for that year, is what we would call a loan*.

The Government pays interest on that loan*, and this interest – and the money which has to be paid back each year is then added to the housekeeping bill for the term or lifetime of the loan.

When the outstanding balance of the loan* and interest for the year isn’t paid off, it becomes the National Debt and every unpaid Deficit or overspend for each year is added to this.

Surplus

Another term you may hear used by Westminster politicians in the coming months as one of their ‘aims’ is ‘Budget surplus’ or just ‘surplus’.

A surplus in this sense would be the sum of money left over if the Government did not use all of the money it ‘earned’ from Taxes in a year and then had some left over.

Reaching a surplus would be the only point that the Government could then begin reducing the National Debt.

The Conservative Chancellor, George Osborne is suggesting that this will be achieved by 2020 if the Conservative Party are elected with the majority of seats in Parliament in May. Being in Government with a majority and not as part of a Coalition as they have been since 2010, will allow them to make even more cuts to public services than they have so far and this is how the Conservatives plan to reach a point where they have a surplus.

Whether you support the plans that any of the Political Parties have or not, the fact is that this Coalition Government and the Labour Government before it have both had an annual Deficit or have overspent each and every year for a long time.

We wouldn’t be able or allowed to spend money like this ourselves unless we had savings to fall back on, and neither would the Westminster politicians if they were dealing with their own finances.

 

* The way that the Government ‘borrows’ money is not normally the same as going to a bank and asking for a loan. To borrow money or ‘raise funds’, the Government usually sells bonds, which banks, other financial organizations and sometimes even other Countries buy on the basis that they will get the value of the bond returned to them at the end of the lifetime of the bond – probably 3 or 4 years, and that they will receive a fee or fixed amount of interest on top of that for the period too.

When a bond comes to the end of its lifetime and the Government is unable to pay off the balance or value of that bond and its interest because there is not a Budget surplus, the Government then sells more bonds to cover the cost of doing so.

 Image: Source unknown

 

Council Spending Cuts: Savings must be the objective, not simply the means to reducing Local Authority expenditure and without providing the tools to affect real reforming change, it’s beginning to look like Eric Pickles is wielding a lot of stick without even a hint of any carrot…

December 18, 2013 Leave a comment

Local government conference

I don’t envy the position that any Government Minister has in respect of either the Deficit – which the Government are all too happy to talk about; or the escalating mountain of Debt – which they are apparently not.

Cuts in public spending are and have been inevitable since way before the last General Election. But it always seems to be the same ‘soft’ targets that get picked, rather than the controversial policy areas that make most MP’s go green, even if they are just asked to talk about them. Therefore, the announcement of a 2.9% cut in the Local Government settlement in 2014-15 is surely one of the most obvious cases of ‘passing the buck’ that there ever could be.

As both a sitting Councillor and past Local Authority Officer, I have no doubt that considerable opportunities to make savings continue to exist within most Council administrative, executive and operational functions. However, I also realise that making such savings is far from a straightforward exercise and particularly so when some areas of service provision simply cannot be cut, or in some cases will even require greater funding in the future.

Whilst cutting spending to reduce the National Deficit and hopefully at some point, start tackling the National Debt is a sensible aim, it should arguably be used as the objective rather than the means itself, and the failure of Central Government to support Local Authorities by providing the machinery of reform – whilst restricting the tax-raising ability that Councils have, is doing little more than necessitating the removal of structural security from within.

Councils are after all left with little choice but to consider and engage in the sharing of services not only between departments, but also within other Authorities as well. Whilst local politicians can already speculate about a hidden agenda moving us all towards Unitary status, there is no question that any service shared, or even Officers being given cross-disciplinary responsibility is just another step away from the end user, in the level of quality of the service being delivered if nothing else.

That’s hardly Localism now is it Mr Cameron?

The reality of the situation is that the savings that will be required to sort out the mess that the UK actually is in may well necessitate a restructure of the way that all Local Government operates.

But we are not at that point yet and it would be far better that we be able to instigate the real processes of change right now in the hope of retaining as much in terms of local services delivered locally for local people, rather than waiting for a point where financial collapse makes even these possibilities we have right now unviable, simply because a Westminster Government decided that it would be easiest inflicting budget cuts on others in the wild hope that somebody else would be responsible enough to bring about change.

Image thanks to http://www.guardian.com 

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