January 2013 in Economics

Image by HM Treasury on Flickr

Now, before I start, I must admit that I am no expert in the field of economics. There are few words and statistics that I understand. But, the relationship between economic policy and return on that policy, in the way of contraction or growth, is not a difficult analysis to undertake. Hence, the recent news items regarding the nation’s return to contraction, the closure of Jessops, the cut of jobs by Honda and the contraction in the construction industry, all within the space of the week, signify a massive problem in our fiscal system.

In an earlier post, I predicted that the return to growth in the third quarter of 2012 was merely the result of the temporary Olympics and Jubilee celebrations (otherwise known as “artificially strong growth”) and this is exactly what has been confirmed by the National Institute of Economic and Social Research (NIESR), noting that without the Olympics the economy would have flat-lined. However, the final quarter of 2012 included the Christmas period – a period of increased and frivolous spending – so it comes as a surprise that we see this contraction so quickly. In another post, I predicted that 2013 would see the UK re-enter a recession. Now this  has not yet happened, (obviously due to the first quarter only having recently begun) but with such a quick contraction and the dent made in the employment figures this week, we can only expect to see this or a dramatic turn of events in the coming months.

Yet, based on just these major newsworthy statistics on job losses, we can already see 2170 people starting their new year without a job, entering an environment where intake of new employees is minimal and those without a job are being punished by the coalition’s blaming policies. Before long, we can see these people losing money on the benefits they did not necessarily used to have to rely on, and then being called scroungers of the state due to their reliance on and complaints about the reformed benefits system via this so-called revolutionary universal tax credit. Ironically, the Government wish to be the helping hand up, but these people will only remember having to take a forceful step down.

But much more ludicrously is the fact that this very week, despite these detrimental austerity measures, despite these massive job losses, despite the number of people’s lives they have ruined, our beloved MPs want a 32% raise in their wage packet. It comes as no surprise, that those who demanded the highest raise were from the already particularly well-off members of the Conservative party. Perhaps more surprisingly is that this raise was demanded by members of parties across the board and not just those of the three main parties.

It is disgusting and awful that those who are coercing the saving of money, reduction of budgets and removal of benefits are those also pleading for more money in their pockets. Because, after all, MPs should be exempt from the rules that they place on the rest of society.

Prime Minister’s Questions – 9th January

Image by Victoria Kettlewell

Happy New Year wishes from the “nasty party” and the “little red pests” as the first Prime Minister’s Questions greeted us this week. The re-launch of the coalition appears to have reinvigorated Clegg as, sat on the front bench, his usual solemn-looking face was replaced with laughing and increased gestures. Miliband attacked the coalition for its lateness in publishing the audit, before proclaiming it would only highlight the Government’s broken promises on the NHS, sexual inequality and the tagline “we are all in this together”. Cameron failed to rebut the claims, only making different points about the policy areas, then stating that the five million pounds that goes to the Labour party does not guarantee any returns. One Member of Parliament asked of the Government’s intention to repeal the fox hunting ban to which Cameron ignored the question instead stating that the “only little red pests he pursues are in this house”. A referendum may seem impending after it was stated that the Government would seek public consent for any EU settlement that is reached. A backbench and, obviously, critical Conservative MP asked the PM whether he was politically closer to Lord Tebitt or Clegg and received the response that Cameron is, and always will be, closer to the Conservatives than any other. Strangely, the resignation of Conservative peers and the Northern Ireland violence didn’t get a look-in.

Prime Minister’s Questions – 5th December

Image by Victoria Kettlewell

This week, MPs began Prime Minister’s Question Time by congratulating William on the success of his natural bodily functions, reminding us of the unforgettable, that William and Kate are expecting a baby. Eventually we moved onto the more important topics (one that actually affects our daily lives) of the implementation of the Leveson recommendations, where the PM and the Government were criticised for their apparent and backstabbing refusal to implement statutory requirements for an independent regulation system – a system that would seem intuitive to have to most people. Instead, Cameron says he has trust in the editors that they can establish that themselves and, by that, he means, he doesn’t want to interfere with his close friends and sponsors, only waste our money on an inquiry he won’t adhere to, whilst cutting services that we need, like the NHS. Obviously not enough money was spent on maths in their day, because neither Miliband nor Cameron seemed to agree on any statistics, both quoting different sets form the IMF and the OBR, and telling those opposite them they were constantly wrong. Cameron accused Labour of cutting the NHS and said the Tories were increasing the budget; Miliband accused the Tories of cutting the NHS and said Labour increased the budget. Somebody is right, but only the IMF knows that. PMQs seem to just set the precedent for the later Autumn statement, that outlined that the deficit has been reduced by 25% by deciding not to dish out any money any more.

 

Also posted on Redbrick