View from Westminster - May 3, 2012 (From Kidderminster Shuttle)
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View from Westminster - May 3, 2012
3:30pm Wednesday 2nd May 2012 in MP's View - Mark Garnier
THERE was a lot of news coming out last week, but the one that affects us all the most is the economic figures.
Britain has now officially fallen back into recession – a so-called “double dip recession”. But the truth is we have only, at best, seen just the most tentative signs of any recovery since 2008 when the economy tipped into recession at the end of the asset-fuelled credit bubble that was brought about by the banking crises. The fact is, we have barely seen any sustained growth since then.
The blame for the long-term stagnation is attributed to “deleveraging of the consumer,” and business uncertainty due to the Euro crises. But what does that mean in practical terms?
The British consumer – you and I – is hugely in debt. We have more debt here than the rest of Europe combined. This is the money you and I owe on our mortgages, our credit cards, our HP agreements and all the rest of it. It stands at a whopping £1.46 trillion and it was built up prior to the crash in 2007-08.
This was when we were all getting letters congratulating us on being ‘pre-approved’ for a £10,000 loan, and banks were happily lending us over 100 per cent of the value of our property, all reinforced by the message that the government had brought an end to boom and bust. That was, as we all now know to our cost, complete and utter nonsense.
So to understand what is happening to the economy, we simply need to look at our own circumstances. As we open our post and read our bank, credit card or mortgage statements, do we feel inclined to blow a few more quid on a new TV?
No, we feel nervous about the future and are more inclined to repay where we can. And if we don’t buy stuff in the high street, then the economy stumbles along at the bottom.
Governments can help. Governments can invest into the economy to stimulate growth. But they can only do that if, at the height of the boom, they reduced expenditure to put money aside for the inevitable recession. But if you are convinced that your government has re-written the laws of economics and has ended boom and bust, then the government will behave differently and continue to spend more than it earns in taxes. And it is because of that reason that there is no money to invest into the economy by the government.
Government finances are in tatters and the downward spiral is not helping. But if the government starts spending more, it runs the very real risk of interest rates rising.
If that happens, imagine what it would mean to you and me when we open our statements in the future. Instead of paying three or four per cent on a loan, we will be paying six or 10 per cent. The cost of borrowing will double. That will happen to the most indebted consumer in the world and if that happens, it will be a disaster.
CONTACT YOUR MP
Email: mark.garnier.mp@ parliament.uk.
Telephone: 020 7219 7198 or 01562 746771.
Write: 9a Lower Mill Street, Kiddermin-ster, DY11 6UU, or House of Commons, Westminster, London SW1A 0AA.
Comments(10)
Stephen Brown
says...
11:06pm Wed 2 May 12
The private sector, especially construction is/was dependant upon the public sector for projects to keep things ticking along. Couple that with public sector job losses in both 'backoffice' and 'frontline' (YES frontline - which is happening - just ask all the councils ex homecare staff now out of work - the greatest impact hits the low paid and women) and rising unemployment and it does not take a genius to work out that demand slumps, money is lost to the national and local economy so no demand, tax income is lost to the Treasury and so the Govt has to borrow more just to standstill.
Yet it's all our fault because according to Mark we all took up those enticing loan offers from a finance sector that wasn't properly regulated to feed a lifestyle created by consumerism and to stave off the effects of rising inflation and stagnating pay levels for the majority of us. All to buy imported goods because our manufacturing and jobs have all been shipped overseas so we can carry on buying 'cheap' (I use that guardely given the social cost) goods which is all we can afford with our stagnating wages. Then, it seems we were all buying overpriced houses again fuelled by the same finance houses aided by successive Govt policy dating back to the 80's that did not re-invest in housing stock causing a private property boom (good for the banks again) because of a lack of affordable homes.
So then, just what is the Tory solution?
Oh yea, the promise of more of the same solutions that lead to crisis, yet more cuts, tax concessions for the rich, no real improvement in banking regulation 'cus that upsets Mark and his chums, attacks on low paid workers and worker rights.
And he seems only to be worried about interest rates, yes it's a threat but I think there are a lot of other equally important things to worry about and with the current agenda from this Govt can anyone really see things getting better unless there is a change of policy direction?
We need to invest our way out of this in renewables, green energy, affordable houses, public transport and other infrastucture projects that help local communities. It may mean borrowing but we used this solution after the war and in any case we seem to be borrowing anyway at the moment just to fund rising unemployment.
The penny is starting to drop with people all around Europe that austerity does not work. It's only a matter of time before people here suss that out too. Especially if all we have to look forward too is another 4 years of recession.
The Clock's ticking on Mark and his chums.
Gobby Robby
says...
9:11am Thu 3 May 12
stour67
says...
9:33am Thu 3 May 12
Mary79
says...
11:29am Thu 3 May 12
As it is, we will all have to pay that back and more anyway, and get nothing for it.
I am fed up of this cut cut cut negative agenda the tories are playing. It just makes things worse practically and emotionally and that reinforces the downward spiral.
But in their millionaires club they don't see any of it, it's just a news programme to them when they switch on their HD soundsurround 50 inch telly.
HowardM
says...
1:16pm Thu 3 May 12
Jerome K
says...
3:43pm Thu 3 May 12
neilhar
says...
5:37pm Thu 3 May 12
If we ever get a bankers apology from Mark, I shall dance butt naked eating my hat on the high st. He was a hedge fund manager and in reality 100% to blame for this mess in the first place
Jon D
says...
5:51pm Thu 3 May 12
As regards an apology from Mark for his part in the recession, or his profession's part, if he does apologise AND the Euro collapses, then there are going to be some unsightly scenes in the High Street pretty soon (with regard to the bet he kindly accepted by default with me on here some time ago) :-)
neilhar
says...
8:39pm Thu 3 May 12
Jon D says...
6:05pm Wed 2 May 12
"we have only, at best, seen just the most tentative signs of any recovery since 2008" - another complete lie from Garnier, unless he is just thick. The five quarters from Q3 2009 to Q3 2010 showed output rise 3.1%. The next 5 quarters, under the Tories, output fell by 0.1%. This shows that by abandoning Labour policies Mark & his govt destroyed growth. To make it even clearer USA carried on with the same policy as Labour & they have seen growth continue & is now 0.8 % above its pre crisis peake while UK is 4.3% below.
The recession is Mark's government's fault with it's incompetent economic policy. What's worse is that Garnier knows this but he hasn't got the b*lls to admit he's wrong. Instead he's trying to pin the blame on someone else, twisting the truth so much he barely knows were one lie starts & another finishes. He's like a spoilt little boy who didn't get his way, too indulged to gain any moral fibre. A coward perpetually living in the self serving world of the 8 year old, trying to blame everyone else but himself. Not a man. Most deinitely not a man.