Blog 2023 Malcolm Blair-Robinson

THREE PAGE TURNERS FOR HOLIDAY READING!

AMAZON UK       AMAZON US

Readers of this blog know that I am far from happy with the complete failure to rebalance the economy away from asset inflation and towards wealth creation through production. I am also very unhappy about the excessive reward structure of executive pay in what has become a low wage economy. Most of all I resent the towering hypocrisy of the Tories in forever asserting that somehow the private sector is ‘paying for’ the profligacy of the benefits culture. If you want to be part of a functioning civilised state, there is a price to be paid. It is paid by everybody and it should not be begrudged. The state is not an enemy but a friend. If you disagree there are lots of failed states you can set off to and be happy in mayhem.

There is something increasingly unpleasant and divisive about this talk about fair to those in need and fair to those ‘who pay’. With the shift form direct to indirect taxation everybody pays. The NHS accounts for two thirds of all income tax and the balance is used up in debt interest. As for the private sector, to follow Macmillan, it has never had it so good.

There are two benefits which feed directly into the private sector; one allows wages to be lower than they should be and the other allows rents and therefore property values to be much higher than the market would ordinarily bear. Tax credits subsidise wages and let employers get away with the minimum and housing benefit pushes up rents to private landlords. The first costs £30 billion per year and the second costs £24billion a year. If both were abolished tomorrow the value of houses would literally collapse and unemployment would soar. But by keeping them going it is inevitable that asset inflation continues to be fed for the benefit of capital and wages are subsidised for the benefit of profit. The people who really suffer are those at the bottom of the increasingly tacky pile.

So much for the wonder economy which grows faster than all the other developed economies. So does the debt mountain it  carries. This now stands at $ 9.5 trillion, which is £160,000 dollars for every living person in the UK including infants. It is more than 4 times GDP (Greece is 1.74) and more than any other country in the world bar the US (1.06). I bet Osborne does not mention that next week.