A billion here, a billion there; it soon adds up to real money

If anyone thought my back of an envelope calculations on November 20, 2010 Dream on; it's to late to wake up now, the nightmare is about to start were a bit over the top they should take a look at this article published in The Irish Times on May 7, 2011, written by Morgan Kelly the highly respected professor of economics at University College Dublin.

Kelly calculates that Ireland's debts will exceed €250 billion by 2014, equivalent to more than €120,000 per worker; or 160 per cent of gross national product.  He goes on to say -

"Economists have a rule of thumb that once its national debt exceeds its national income, a small economy is in danger of default (large economies, like Japan, can go considerably higher). Ireland is so far into the red zone that marginal changes in the bailout terms can make no difference: we are going to be in the Hudson."

As I said at the time - "Simply put, the Irish cannot repay that size of loan."
So far the UK have saved £6 Billion through government spending cuts and thrown £12 Billion at propping up the Euro currency.  There's more to come...
Best Wishes
Will

Good Money after Bad

Having participated in the EU bail out of  Ireland - the UK's share was nearly £8 billion - the madness continues and the we are now about to contribute some £4.4 billion towards the EU bail out of Portugal. 

We will not see this money again, any more than we will see the Irish bail out monies.  Portugal's debts are growing faster than its GDP; until that process is reversed there will be no prospect of debt repayment.  If, and its a big if, debt repayment ever happens the IMF will be first in line for repayment.  Prudence (remember her) suggests that we are not going to get this money back, ever. 

By a strange coincidence the total bailout money spent so far - there is more to come; Spain, Italy and Belgium are all candidates for bailouts - in propping up the Euro is exactly twice the £6.2 billion savings made by cuts in government budgets.

Forget the March for the Alternative, how about a March for no Bailouts
Best Wishes
Will

Cleaning up Politics

If memory serves me correctly, during the General Election last May David Cameron campaigned to cleanup politics.  He was largely but not exclusively referring to the MPs expenses scandal.  I wonder therefore how it is that in the Finance Bill published on 29th March 2011 there is a specific clause that excludes Members of Parliament from legislation regarding tax avoidance by means of disguised remuneration.  Hidden deep in the small pring of this 390 page Bill is sub clause 554E (8) which reads:

"Chapter 2 does not apply by reason of a relevant step taken by the Independent Parliamentary Standards Authority in relation to a member of the House of Commons."

There has been some comment on the inclusion of this strange clause in the Finance Bill, mainly from fringe internet blogs; the only comment I have found in the mass media is this item from Ian Cowie of the Daily Telegraph.  To the best of my knowledge neither the BBC, ITV or Sky have reported on this matter.  In my opinion this indicates that the health of our democracy leaves much to be desired.  However even if there are only a few of us asking the question it still needs to be asked.

Why do MPs need to be exempt from a law designed to prevent tax avoidance?
Best Wishes
Will

What do we want... When do we want it...

So go the words of every activists favourite chant. 

Ed Miliband in an over the top speech to the "March for the Alternative" suggested the marchers were following in the foot steps of Emily Pankhurst, Martin Luther King and Nelson Mandela.  But what did they want?  Votes for women; civil rights for blacks; and end to apartheid?  "No Cuts" seemed to be the answer on most placards.  What cost were they prepared to pay to get what they wanted?  Economic oblivion Greek style, perhaps they would prefer an Irish financial armageddon or just a plain ordinary Portuguese fiscal black hole.

March for the Alternative!  What Alternative?
Best Wishes
Will

In the Dock

Today former Labour MP for Bury North David Chaytor has pleaded guilty to three charges relating to his expenses claims.

1. Chaytor had claimed almost £13,000 for renting a flat in London which he owned – he faked a tenancy agreement claiming he was paying £1,175 a month rent.
2. He also claimed over £5,000 for renting a home in his Bury constituency, which was owned by his mother. He admitted he had not paid his mother, who had moved into a nursing home. House of Commons rules prohibit renting property from a family member.
3. Chaytor was also charged with falsely claiming almost £2,000 for IT services. He had provided two invoices for professional services from an IT consultant when in fact the services had not been provided or charged for.

Chaytor was given unconditional bail and will be sentenced on January 7th.  His barrister James Sturman QC told the judge,

"There is no loss to the public purse. Any sums claimed have been, or will be, repaid."

Chaytor originally denied the charges but change his plea, having failed in a court bid to argue that expenses cases should be heard by Parliament, not the courts.  In sentencing I hope the judge will not simply take into account Chaytors guilty plea but will consider the protracted and expensive way he has fought to avoid this charge also the case of Andrew Gibson who I blogged on some weeks ago.

On January 7th 2011 it won't just be David Chaytor in the dock.
Best Wishes
Will

Chancellor Osborne and his worthless piece of paper

After Labour had lost the last election but before the coalition took office the then Chancellor Alistair Darling signed the UK up to participation in the EU bail-out mechanism.  It is costing us six billion pounds just for the Irish bailout.  We all know that Portugal, Spain even Belgium and Italy are all possible candidates for bailouts. Asked whether the UK will have to participate in these future bailouts George Osborne is short of straight answers, he blames Alistair Darling for our current involvement in bailing out euro countries and emphasizes that he has blocked our permanent participation in this bail-out mechanism from 2013. He is unable or unwilling to say whether the UK will be helping in future bailouts before the 2013 deadline.

Treasury officials insisted that the UK had been tied into the fund by the previous Chancellor Alistair Darling in the final hours of the last Labour Government. Treasury sources also confirmed that the deal agreed by George Osborne in Brussels on Sunday night will mean that Britain would be freed from any obligation to financial rescue measures for euro countries after 2013.

We should be in no doubt the 2013 deadline isn’t worth the paper it is written on. The question is whether we will be bailing out Portugal, Spain, Belgium and Italy in 2010 or 2011. To be quite candid I will be surprised if the euro still exists in it's current form in 2012 never mind 2013.

I sometimes think that signing worthless pieces of paper must be a trait for British politicians.
Best Wishes
Will

Dream on... Mary Honeyball takes it quite literally



Mary Honeyball


Labour MEP and author of one of the UK's top twenty left wing political blogs (currently rated at 14th) Mary Honeyball writes that the economic crisis is beginning to make her feel that the UK should be in the eurozone.  Unbelievable and without a trace of irony these are her exact words.

"The crisis of the euro has shown in very graphic terms that the UK is in Europe and cannot ignore what happens in other EU member states when it comes to their economies. Britain has ended up paying out a very considerable sum of money. I doubt if it would have been any more if Britain had been a fully signed up member of the euro zone.

The last Labour government, it is true, refused to take Britain into the Euro. I have always been in favour of joining the single currency and, I must say, am once again beginning to feel vindicated that my point of view is the best one for our country."

I know its a terrible cliché but you just couldn't make it up.
Best Wishes
Will