Category Archives: economy

Vote Muppet!

So today was the big reveal of the Labour Party manifesto – well, if you ignore the leaked one last it was anyway…

Now let’s forget all the rash promises in the manifesto and concentrate on the meat of the matter : How are they going to pay for it all? Well, of course, we know the answer to that one. They’re not going to pay for it. You’re going to pay for it.

Those of you who read this blog regularly may remember that I’m a retired Chartered Accountant, so I understand creative accounting but I have to say that Fantasy Corbynomics exceeds any notion I may have had about accounting even in my most creative moments.

Here’s a simple example. You go out and spend £20,000 buying a new car. How much has this cost you and how much cash did you use? Well according to Labour, it’s cost you nothing because the value of the asset you now own means that it’s cost neutral. So how much cash did you get through? Well, none because Labour tell you this is capital expenditure and was funded by borrowing so it doesn’t come out of your revenue budget.

These are the arguments they use for their nationalisation and infrastructure spending plans. They say that renationalising loads of stuff is cost neutral because you still have the assets and that the cash used was raised by borrowing by issuing gilts so they’ve not used any cash either.

This is, of course, patent nonsense. If you buy a new car, it’s true you still have the car but it’s also true you ain’t got the money any more because you spent it. The fact that you borrowed the money to buy it still means that eventually you’ll have to pay it back so you can’t ignore the outflow.

Labour says that apart from it’s ridiculous tax and spend plans, it will borrow £250 billion. Let that sink in for a moment : that’s £250,000,000,000 or a quarter of a trillion pounds.

Let’s assume they raise that money at an optimistic 1.5%. The interest on that borrowing alone would cost £3.75 billion per annum. Where’s that going to come from? Well, out of your taxes or rolled into the borrowing.

The simple fact is that Labour’s plans simply aren’t feasible. They cost too much and there’s no money to pay for it. It’s a fantasy and if they try to do it then they’ll bankrupt this country.

And at the end of the day, they know it – but they’ll never admit it…

The consequences of Brexit

You have to hand it to the EU – preferably with the shitty end of a rather long stick. They really haven’t got a bloody clue, have they?

This week saw a remarkable set of own goals by the Fourth Reich. Whilst the leaders of Italy, France and der Fatherland were meeting to discuss what the bloody hell to do now that Britain has voted to kick them into touch, our friend Herr Juncker – who they are trying desperately to make the scapegoat for our decision – decided to make a statement saying that all borders would be done away with and that the EU needed to make a stand against nationalism! I bet the Dutch loved that one…

Meanwhile, to quote Harold MacMillan, Britain has never had it so good.

The Confederation of British Industry said its retail sales volume index rose to +9 – its highest since February and a massive increase from -14 in July. Employment hit a record high of 74.5% and the UK’s net wealth hit £8.8trillion.

The latest house prices data showed the industry defying warnings of a housing market crash after Brexit, with shares rising in housebuilding firms. There’s been a jump in reservations by buyers of new homes over the past two months despite some surveys suggesting the so-called Brexit vote could cool the housing market.

In fact, the country that seems to have been hit hardest by the Brexit vote is, ironically, not Britain but Germany. The German economy is slowing markedly and Merkel is trying to shrug it all off as just a summer slump. Confidence indicators in Germany are at their lowest level since 2014. While the FTSE goes up, the German DAX is dropping. In fact, all the indicatorS prove just how much we were being ripped off for by the Reich and why so many prominent German industrialistS desperately Wanted us to remain in Europe.

And with the refugee crisis and Jihadi attacks on the increase, Merkel is reeling under the pressure of her open door policy. The last thing she wanted to hear with an election looming is Herr Junckers views on abolishing borders.

No, all in all Britain is doing alright thank you very much and the Germans are bricking it. Personally, I’m loving it!

Altogether now :

Two world wars and one world cup
Brexit! Brexit!

The cost of Freedom…

A lot of bullshit has been talked over the last week or so about the costs of Brexit in terms of collapsing stock markets and the falling value of the pound, so I thought I’d dig into it a little.

I started with my own pocket. I don’t have a pension because I worked for myself before I retired so my pension comes from investments that I made over the years in PEPs and ISAs, and unit trusts that I invested in. There’s also a pot of money I made when I downsized and moved to a cheaper area of the UK. I think that makes me a pretty good arbiter of whether I’m better or worse off after Thursday’s vote.

On paper, I’m about £6,000 worse off on my portfolio since last Wednesday night, but interestingly I’m about where I was the same time the previous week. In fact I was worse off on paper when dear old Gordon gave us the financial crisis. So in terms of share values, Brexit has cost me bugger. In any case it’s a paper loss. If I don’t sell the shares, then I’ve still got them and not the cash. Having held them for donkey’s years, I’m not about to cash in just yet.

Of course the big holiday I’m taking next year in South Africa just got more expensive because the pound has dropped a bit. Except that the Rand has jumped about quite a bit too, so if we’re trying to guess whether Brexit has cost me more on that one, it’s still anybody’s guess.

And if you look at the pound against the Euro, it’s down to around 1.23 today. However, I found an old exchange receipt from a previous holiday in the back of the drawer and, guess what? 1.24 to the pound! No big drop – more like big deal!

The worse thing that happened to me was when interest rates plummeted. When I retired 7% was easily achievable on 1 year fixed term. Today it’s around 1.6% so my income dropped accordingly. Even after Brexit I should still be able to get something around that so I’m not panicking.

All in all, I think UKIP summed it all up nicely. “It was a very British apocolypse – it was all over by teatime!”

Emergency budget next week then, Gideon?…

Project Punish…

If you're hoping that red spot is from a laser sight, then you're going to be disappointed!

If you’re hoping that red spot is from a laser sight, then you’re going to be disappointed!

Having moved from Project Fear to Project Panic, within the course of 24 hours they’ve moved on again – this time to Project Punish!

Having completely and utterly lost the plot, Osborne yesterday announced that if we have the audacity to defy him and Vote Leave on the 23rd, he’ll introduce an emergency budget to punish us all for not doing what we’re told. Here’s his plan :

  • add 2p to basic income tax and 3p to the higher rate
  • increase duty on fuel, fags and booze by 5%
  • raise inheritance tax by 5p
  • cuts to the police, the NHS, pensions and defence

Staggeringly, whilst cutting public spending in important home grown areas, he’s proposing to leave the foreign aid budget untouched!

The Britain Stronger in Europe campaign said this would mean ‘a £2.5 billion-a-year cut to the health service, a £1.2 billion cut to defence and a £1.15 billion cut to education. Pensions spending could be cut by £2 billion a year.’ Spending in other areas, including the Home Office and policing, transport and local government, could take a 5 per cent cut, saving £5.8 billion.

So why exactly is all this ‘necessary’ because if we vote Leave on the 23rd, fuck all is going to happen overnight. Where’s the ’emergency, George?

According to Osborne, ‘Quitting the EU would hit investment, hurt families and harm the British economy.’ What he actually means is “Do what I tell you or I will hit investment, hurt families and harm the British economy”

Senior Tory MP Steve Baker said: ‘I am shocked that the Chancellor is threatening to break so many key manifesto pledges on which all Conservative MPs were elected. The In campaign are panicking – but no one will believe these hysterical prophecies of doom any more.’ His colleague Michael Fabricant added: ‘These fear tactics are desperate and despicable.’

Ex-Cabinet minister Liam Fox said: ‘A punishment budget would be rejected by both sides of the House of Commons. It would damage the Chancellor’s credibility and would be putting his own position in jeopardy. I think the British public would react adversely to such a threat based on the Chancellor being afraid they will vote the wrong way in his opinion.’

Labour MP John Mann said: ‘This is more scare tactics from the Remain side. If we vote to Leave and take control of our money we will have more to spend on the priorities that matter to us.’

And ironically, Osborne is announcing all this today alongside Alastair Darling who he is presenting as a former Chancellor and credible economic expert. He seems to have forgotten that it’s not so long ago that he was rubbishing his predecessor for fucking up the UK economy and leaving the country in a Godawful financial mess that Genius George had to inherit!

Ignoring the fact that all this is ‘absolute cobblers’ to quote James Dyson, it’s totally unnecessary and it would never get through the House of Commons so here’s my message to George Osborne and the other purveyors of Projects Fear, Panic and Punish –

Just fuck off and stop using your bullshit to bully and control us. Win or lose, you’re finished politically and you’ve only got yourselves to blame…

( and if you’re wondering about that red spot, it was while he was visiting a Hindu temple yesterday – presumably praying for a miracle to make him sound credible )

So which is it then, Dave?