I can’t say I speak out in a political tone very often, because by and large I think that it’s almost impossible for politics and truth/sensibility to coexist. A number of people have criticised me for my very anti-Labour stance, but few cared to notice that it’s more an ‘anti-politics’ stance than anything else. Of course, in it’s truest sense, political reasoning and rationale is a vital aspect of any civilisation – but, as with many words, the definition has slipped further and futher from it’s origins. With all of that being said, I have a strong interest in economic interactions and activities – most of this stems from my love of human geography as a broad subject, and globalisation as a concept.
As it stands right now, the UK is on the verge of a recession – even if our Prime Minister is so very keen to put on that annoyingly fake face, and tell the world that “we’ve kept inflation at a lower rate than the rest of Europe.” Of course, this governmental face has been responsible for covering up a whole wealth of economic blunders over the years – most noticeably when Mr. Brown was the chancellor – but, what can you expect from the same people who’ve prioritised war in a distant country, over family values at home. I’m pretty sure Sam will hang me, the next time he sees me, for those last couple of sentences – but I stand by it all.
So, what is this recession, and what does it mean for the UK and the world? Well, simply put, a recession is a quarter-on-quarter drop in a country’s GDP (Gross Domestic Product) – but there are wide-ranging definitions for the term. Much of the problem we face now is not due to the slowdown in world markets, but due to the defecit spending that’s been accruing over the past 7 or 8 years within Government. As a country, the UK is now in a huge amounts of debt (£539bn as of May ’08 [National Statistics] – over 45% of GDP), which is predicted to rise even further by next year (to £581bn). This, coupled with individuals being in debt to the of £1.3 trillion (103.5% of UK GDP), doesn’t bode well for our island nation.
For years now, the Labour Government have been claiming to have cut unemployment, improved the economy and created a more ‘safe’ Britain, financially. All of these claims were true at the time, but the far-reaching effects of the underlying economic measures are now rearing their ugly heads. The UK has been investing money it doesn’t have into the economy – and any monkey could tell you that national debt inevitably leads to economic recession, once the country’s spending has caught up with it (kind of like your credit card bill at the end of the month). This government has even gone so far as to invest public money into private business, with no hope of return on investment for the taxpayer. With economic principles like that, recession was a foregone conclusion.
With raw materials soaring in prices on the world and local markets, UK businesses are being forced to shed huge numbers of jobs. A large UK building contractor, Persimmons, announced this week that it had already cut 2,000 jobs – and that more, similar, cuts were on the way. Huge high-street retail chains are reporting downward trends in their profits for the last financial quarter, and some believe the UK is now more likely to slip into recession than ever. With mortgage approvals down nearly 30%, and with the Bank of England set to put up interest rates and inflation, the economic future of the UK certainly doesn’t look bright. And, as the pound continues to devalue against the Euro, it now looks more likely than ever that the UK will quietly slip itself into the EU – but that’s a story for another day.
If you’re a staunch Labour supporter, I’d seriously consider re-evaluating your stance in light of the evidence around about now – this government could well end up as infamous as the Thatcher administration.
A last I found the site which redirected about a thousand spam comments to my blog.
The Tories and popular press would have you believe that the rate of borrowing has gone up in the last 10 years not true. Borrowing is actually lower than under the tories. Tax is also lower than under the Tories. Their recessions was due to incompetance. This one is due to greedy credit banks and globalization.
Having bad crops the las 2 years stocks are low and there actually isn’t enough stock to meet demand. This small depletion causes devastating spiral of price because some countries have to go without.
Will it be Britain? no because we can afford it compared with most countries in Africa say. But we do have to pay the higher premium for it.
Second the fertilizer used on crops is relied upon oil prices due to the manufacturing of it. Therefore when fuel prices go up food goes up.
We do have a strong economy, record high employment and longest rate of low inflation.
Needless to say you were too young to remember interest rates of 15% under the tories. If you did, you certainly wouldn’t be comparing this to that.
Stop listening to the doom and gloom of the popular tory press and look at the facts. This is going to be a tough time for everyone and is a global problem. Blaming our government for it is naive and silly.
As I’ve said before, Sam, no need to get nasty. And, if I’m too young to remember 15% interest rates then so, too, are you – so I fail to see what that has to do with it.
As for “The Tories and popular press would have you believe the rate of borrowing has gone up”, you’ll notice I quoted the National Statistics office figures, an office which was, if I recall correctly, developed significantly by the Labour government. The figures published with the National Statistics Office are government-approved figures, not “popular press”.
Additionally, if you’ll notice, I do mention that lots of what the Labour government had claimed was “true at the time” – but that some of the farther-reaching effects of those decisions were not fully thought through (or, dare I say it, deliberately not thought through… but that’s just speculation).
I do, however, find it amusing that you put previous recessions, under a Tory government, down to incompetence, but claim that the Labour government has no fault in our current downward spiral.
Sorry if it sounded nasty, certainly wasn’t meant to be.
15% interests rates was the fault of Tory government beacuse they controlled it. Hence we made the Bank of England independent and we have been much more stable for it.
Under their recession they started with higher unemployment. That was certainly their fault and with lower unemployment we are better placed.
We have more jobs available in our economy than other before. So when big businesses are making people redundant due to this credit crunch there are jobs to go into.
To help people in this time we have postponed 2% inflationary increase on fuel duty for 12 months and likely to go on further (Saving people over £100bn on fuel)
We have increased fuel payments to pensioners and going to extend an energy scheme to the poorest in society and we will announce further such things in september.
Please give me some examples of the Labour policies that have made this credit crunch happen.
Sorry took me a while to find the figures but here they are
UK’s debt figures as a % of GDP:
1996 51.3%
1997 49.8%
1998 46.7%
1999 43.7%
2000 41.0%
2001 37.7%
2002 37.5%
2003 38.7%
2004 40.4%
2005 42.1%
2006 43.1%
2007 43.8%
Again better than the tories