Monday, 24 October 2011

Lets face it, George Osborne hasn't got a clue

Normally I steer clear of national politics on this blog. Once in a while, it all gets too much and I have to say something. It's just that sometimes, it becomes so abundantly clear that the government has not got a clue about the real economy that something has to be said. Last week the Government and the Bank of England decided to commit another £75,000,000,000 to quantitative easing. This is being sold as "pumping money into the economy". It is nothing of the sort. If the government really wanted to pump money into the economy, they would simply cut fuel duty. Everything we do in the UK would be positively affected by this. It would be cheaper for people to get to and from work. It would be cheaper for companies to move their goods around the country, allowing a reduction in prices, which would stimulate sales. It would mean that every household in the country would have more money in their hard pressed budget to spend on goods, or paying their debts or paying the hidden taxes, those of us in Barnet are being clobbered with, or simply pay their winter fuel bills and keep warm.

You may be shocked that someone who supports a green agenda would suggest such a move? Surely high fuel taxes protect the environment? When times are good this argument can be made, but unless we take drastic action, we'll have a double dip recession and many ordinary families will be forced into poverty.

If all of the money being wasted on quantitative easing was spent on a simple cut in fuel duty, every part of the economy would be improved. At the moment this cash is simply going into bank coffers. As the vast majority of us keep our money in banks and spend it via various electronic methods (cards, net payments, ATM withdrawals), the banks would still get their hands on the vast majority of the cash, but we would be in control of how it was dished out, not them.

Sadly the Chancellor of the Exchequer, George Osborne has never had a real job in the real world (to quote Councillor Brian Coleman). He's only ever worked in a series of political non jobs. As such he doesn't seem to understand that transportation is what makes the economy work. If freight companies profits improve, they can reinvest in new fleets, which are leaner and greener, using modern technology. This country needs to completely overhaul it's energy policies, but this can only happen with a healthy economy. With the idiotic policies of Osborne, chucking good money after bad, this will never happen.

I would personally like to see a Royal Commission set up to ensure that over the next 15-20 years Great Britain becomes the most energy efficient, eco friendly and clean country on the planet. I would like to see us lead the way in clean energy technology, effective mass transport systems and energy efficient homes. None of this will happen with an economy in stagflation, which is where Osbornes policies will take us. We've spent a small fortune on the Libyan war. When Libyan oil comes back on line, there will be a drop in the world oil price. Will we see it at the pumps? No chance, because the stealthy Tories see it as a good source of revenue. It is beyond their wit to see that they could kickstart the economy and then pay for all manner of environmental initiatives out of the proceeds of economic growth.  By my maths £75 billion of quantitative easing is worth approx £2,500 per household in this country. Why is it beyond the wit of a Tory Chancellor to let us decide how that cash is spent, rather than the banks and bankers. I would guess that a fuel tax cut that put £500 in every families pocket would create infinitely more wealth than this bonkers scheme and would generate far more economic activity, at a fifth of the cost to the taxpayer.

Is there any chance that George Osborne will actually wake up to the fact he's driving the economy over a precipice? Is there any chance that he'll realise that he's chucking good money after bad with his policies? No chance. It is a well documented fact that certain Tory ministers are partial to this blog. Is there any chance that they could possibly have a word with dopey George and get him to actually do something sensible for the economy for a change?


baarnett said...

This quantitative easing will apparently add 1% or so to inflation. And one newspaper this morning described it as a Robin Hood tax in reverse - it raises equity prices, and leaks abroad, but the inflationary effects are felt proportionately more by the poor.

(Of course, the Barnet Cabinet position is that the poor are always with us, and are the victim of their own misfortune. So that's not a problem.)

No government would welcome cutting taxes by £75-billion. It has things to pay for, and would have to borrow instead.

But it could create £75-billion of credit, that one or more new state-owned investment banks could offer to businesses. (We could call one "RBS", another "Lloyds" [although they are not, at least so far, 100% state-owned].)

However, business needs convincing that there is demand for extra goods and services. Would you want to built an extra recording studio in this climate? (Oh, okay. Three recording studios, then?)

Rog T said...

Barnett, actually we're building six. You've got ti have faith !