Is Britain so broke, it can’t afford radical change?

A new future for the UK is unlikely – thanks to a dissolute past.

Before the New Year ends – and in response to the many requests for me to stop moaning or provide a positive alternative to our current way of life – today and tomorrow I’ll have a two-stage final shot* at summarising what I think would be a far better approach to government, politics, economics and social problems in Britain.

In this first part (if only for the sympathy vote) I will try to show that the fiscal, economic and financial superstructure weighing down on those who even try to construct such a thing is horrendous.

Let me demonstrate this via a personal experience of recent history.

Around the middle of 2004, under the blog banner Not Born Yesterday, I began to bash on (about how the overheated property market, the ridiculous value of the bank-to-bank selling sector, the dependence of individuals on credit, and the lending policies of UK banks) were as mad as any soci0-economic situation could get.

This led me to researching what proportion of the UK economy consisted of developing or selling and distributing financial services. The amount of obfuscation and obviously nonsensical data I was offered firmed up my feeling that Gordon Brown’s ‘end of bust’ policies were based on a chimera. The final statistic given to me by the Department of Business was 7.3%, an estimate out by a factor of at least 8.

I then began trying to calculate the size of Britain’s manufacturing sector. The least exaggerated figure given me by ‘government’ was three times the size of the reality. In turn, this led to an attempt at calculating what banks actually lent money on, and who to. And during that exhausting period, I stumbled over the derivatives sector.

When a very senior banking chum had finished explaining this activity to me, I toddled off (dazed and alarmed) to find out what percentage of their time banks spent swapping these worthless bits of paper. Not only did it seem to be the main thing they did, the sector was worth – allegedly – fifteen times the entire GDP of the global economy.

So in short, I went in a complete circle from bank-to-bank business at one end, and derivatives at the other – which are, on the whole, largely interchangeable terms.

On the way, I had discovered the crazy imbalance of the British economy, the entirely complicit role of the political Establishment in that….plus the obvious strangulation of the small business sector in favour of tasty globalist megamergers.

Thirty years ago when Margaret Thatcher won the 1979 General Election, Britain had almost run out of socio-economic options – thanks to socialist spending and trade union activist greed. Thatcher then destroyed the idea of communal values, but put Britain’s finances back on a reasonably sound footing. Last May, when David Cameron’s incompetence forced him into Coalition government, Britain had almost run out of socio-economic options – thanks to socialist spending and banking sector ativistic greed.

Seven months later, our options have narrowed still further, because the costs of our EU membership and debt servicing have easily outstripped all the cuts made, the banks are behaving as badly as ever….and the ability of our weakened private sector to help us out of the spiral is something of a fantasy.

So we are in a bit of a hole, and thus root-and-branch change (while necessary) is rendered a hundred times more difficult.

But there’s more: thanks to the EU – and the  globalisation of business and banking – we have nowhere near enough control over our destiny.

Britain’s problems are multi-layered, and almost none of them are mutually exclusive. In business terms, there is a global economy affecting an EU performance, exacerbated by a long-term decline in UK manufacturing skills. Similar considerations apply politically. Socially, there is a familial breakdown alongside community apathy compounded by a Labour Opposition either in denial about it – or secretly in favour of it.

Second, not only has power shifted away from the individual and the police towards the State, crime and banking systems, our culture now perceives many unethical acts as perfectly allowable in the pursuance of profit. This in turn is made more vivid by the Bourse system, its short-termist, greedy shareholders….and the increasing blackmailing of governments by banks.

Third, we have the disappearance of religion’s moral force, while the increasing dominance of the media is helping to dictate what we should say and think. More and more, this is being codified into the legal system – hardly surprising given the ridiculous preponderance of lawyers in senior political and governmental forms. Media content is dictated by Free market capitalism, a process about to swamp even the BBC. Put all those factors together, and any wannabe revolutionary is going to have to blow up a lot of buildings.

Fourth, the education system is being tailored towards an unthinking acceptance of what is – rather than contrarian or creative thought about what could be. In this sense (and via overt pc) it is becoming increasingly politicised. And worst of all, its standards are being diluted by brainless equality-think.

So the ‘what is to be done?’ question is not conducive to answers like ‘instead of heading north, we should be heading south’. It requires the initial acceptance of one of two options: manage it to minimise inconvenience, or perform the most radical Year Zero operation since the Khmer Rouge in Cambodia.

The first option clearly isn’t working, but ‘forced’ Year Zero always ends in disaster. However, since 2006 I have been very consistently saying that  econo-fiscal disaster and change (China’s rise and debt’s growth, to be specific) could provide the catalyst for a socio-political metamorphosis.

I was wrong about 2008, and I accept that: I didn’t believe that even the asylum’s inmates would simply roll up the problem for another day. But they did. Not only that, they increased the insolvency of Europe and the US to such a degree, only turning the mileometer back to nought is ever going to solve the problem.

From 2011 onwards, the West has another two choices: allow China to take over our finances (a process already under way) or blag China into writing off the debt. The first would represent an obvious geopolitical surrender, and is therefore not recommended. And there are two chances of the second option coming to pass.

So in other words, we are going to get a lot poorer, and a lot more impatient with a bunch of soundbiters who have nothing to offer beyond balm, spin, tears and debt.

Before technology and desperation force the Elite to shut it, therefore, this is the last window of change we are going to get. I will be writing about what needs to be done tomorrow.

* I have actually been through this exercise many times before, as the search engine will testify.

21 thoughts on “Is Britain so broke, it can’t afford radical change?

  1. Couldn’t agree more, we need a rebalanced economy as well as a revitalised and responsible society. How do we get there without a revolution (which would frighten the wits out of everyone who has been breast fed by the present structure), start at the bottom with a common goal and change the way things are done.

    • “How do we get there without a revolution”

      You can’t and you won’t. The only question that remains is what sort of revolution will it be; bloody or bloodless? My money is on the former and the amount of gore will depend on how long it is delayed – longer means more.

  2. You are not a moaner, at least, not without good reason, this country is in one hell of a mess, but so is the rest of the world, and the problem is CORRUPTION. You know that, everybody knows it, it’s not lack of money or land or anything else, it is corruption.

    When you have a National Media, partly paid for by getting the citizens in this country into a Half Nelson and frogmarching them to the bank and threatening them with jail unless they hand over £145.50 to their propaganda brainwashing club, that wont tell the simple plain unadulterated news, as their Code of Conduct stresses that they are supposed to, it is pretty hard to see exactly what is going on, fortunatly we have, as we have always had, and always will have the Grape Vine, which no Corporate Corporation can own or tame, as it is a Multi Headed Hydra, of billions of individuals who all have their own personal stories to tell, stories that this British Brainwashing Club will not touch with a bargepole. Stories of almost unbelievable waste, greed, incompetence and deeply ingrained corruption. Stories of ordinary individuals who have not done anyone a bit of harm who have been relentlessly pursued for years on end in secret courts, always in secret, costing the taxpayers of this country £100,000 ior more. Secret courts in every town all over the UK, all busily squeezing taxpayers money out of the system, so that all these secret torturers can afford big houses and foreign holidays ect ect ect.

    So you see, Britain is not broke at all. How can a country consider itself to be broke when it can afford to fund nationwide corruption on a massive scale? How can a country call itself broke when it can afford to pay M15 agents to snoop and spy on ordinary people to see if they are putting their bins out on the correct day?Only very rich countries can afford that level of corruption and snooping. So all in all, theres not much to worry about as far as this country being broke is concerned. Is there?

  3. Well, the first thing David Cameron and co ought to do is to clean up the BBC propaganda web of lies and spin. I do feel sorry for Cameron, and any other Prime Minister, because its been blatently obvious to all us peasants that Prime Ministers are not actually in control of the country, and that Parliament is now just an elaborate show of pomp and mock debate, to con the people into believing that they live in a democracy. I’m not quite sure what you call the system that we are living under in the UK, but it certainly can not be called a democracy, as in a proper democracy the people vote to elect someone to represent their interests, and when we have the country being run by shadowy figures that no-one ever voted for then I think it is time to think of a new way to describe the British Government system that is a bit more accurate. How about the British Unelected Landgrabbing Leadership Shadowy Hushhush Interwoven Team System?

  4. The notion that our several governments would show us the raw and stringy facts about our instant economic and financial situations runs counter to history. They are the elites and know how to run governments properly and how to tax and discipline their citizens. To question their wise leadership is an affront to their image and person.

    rycK

  5. The situation we appear to be in reminds me of the stage in a game of monopoly when one player has started to dominate, making the game dull for the remaining no hopers. Most small retailers have been put out of business by Tesco etc, other small company’s hidebound by red tape and employment legislation making starting a new enterprise very risky. New ideas are copied instantly, meaning that the only businesses making money are either very hard to spot niches or those requiring huge investment.
    What is required is the willingness of those with all the red hotels to let those of us who have skills, experience and knowledge but who don’t have the resources to take significant risks, back in the game.

  6. Britain has been trained into a socialist way of thinking where most people now have no idea what self reliance really means anymore. It is hard to change that way of thinking and get people to be more entrepreneurial. I moved to Canada 20 years ago and this country is full of small business owners with many of us manufacturing innovative products which we sell worldwide. The attitude here is that “yes!, we can do that” It seems the British have replaced that with pessimism and an expectation that Nanny Government will hold their hand and make it all better for them. If you guys want to get out of this hole you are in you need to start making products that you can sell to the world. Britain used to do this but you have let it all die and that is why you are in this predicament.

    • You’re right. When I spent a decade in the US in the 1980′s, it took me a full year to get the idea that the State was going to help me out of my head. I found the US reliance on self, friends and family quite a strange one to start with, but as I got used to it, it made a lot more sense. Coming back was a nasty shock, and even in the 1990′s, the UK was a strange, semi-socialist country. Now of course it is much further along that line and if we did ever decide to change (anathema to so many) it would take 40 years to allow all those millions of sad dependants to move onto the pension system. They’re no good for anything else.
      ‘Can do’ is not available in the UK. At best it is ‘might be able to, got to check the rules’. Oh, dear, those bureaucrats have really ‘gotten ahold of us’.

    • Quite so. And that’s just the beginning of our problems. After 13yrs of socialist govt, our educational system has become a brainwashing programme, stuffed full of ‘progressive’ Lefty distortions of subject matter and overflowing with political correctness. Our State apparatus is stuffed full of quangos run by people with socialist mindsets. Industry is weighed down by huge costs of regulatory compliance. Public services have had countless additional £billions poured into them but still don’t deliver because the last thing on their mind is ‘public service’ and no sane political party dares to criticise them for fear of being accused by the socialists of secret privatisation plans etc. Gordon Brown believed that borrowing/spending would lead us to the la-la promised land he dreamed of. The problems in need of sorting out go on…and on.

  7. It’s indeed difficult to know what are the steps required to resolve our current predicaments. So many factors combine and overlap that there are multiple dependencies, and many emanate from or have impacts on international issues. But for me there is one clear area where we have total freedom, if we have sufficient courage to exercise our independence – the ability to simplify the tax system without impacting our tax revenues.

    Rather than talk about Year Zero approaches, it is enough as a first step to to conduct root and branch reform of the taxation system. Leave aside for the moment how money is spent (NHS, education, military, other departments & programs, benefits), let’s just focus on how money is raised.

    It is nonsensical that we have such complexity of of personal and corporate taxation, with so many multiple allowances and exclusions that it makes everyone’s heads spin, even the professionals and especially HMRC who have to administer it.

    My recipe : abolish all revenue-raising taxation (personal income tax, corporation tax, VAT, inheritance tax, stamp duty, employee and employer NIC (the biggest con of all) etc etc). Instead have one single tax based on a business’ sales, which is both non-reclaimable and not off-set against anything. No “if’s” or “but’s”. Pure simplicity. The mechanism for declaration and collection is already there in the infrastructure of the VAT system, but without the complexity of underlying administration (have you seen VAT legislation in full?) and with vastly reduced enforcement.

    For sure there would be a number of consequential changes – on the good side, there would be the ability to allow most of the commercial world’s accountants to deliver a more gainful and productive financial contribution to running a business, and the ability to redeploy more than half of HMRC employees into similarly more helpful and wealth-producing activities, in support of business or in other areas (all other ministries and departments are seriously under-reduced).

    On the more difficult side, all businesses would require registration (no minimum thresholds) but why would that not be the case anyway? And with vastly reduced administration, there would be no disincentive to doing so. Oh, other than the black economy, but that’s always been there, always will, and it will be no more difficult (possibly easier) to control than currently.

    What it will mean is that businesses (small, large or gigantic) who pay little to no corporation tax will now have to contribute in a meaningful way. While the rest of us have an easier life, more energy to concentrate on growth and service instead of avoidance, senseless compliance and silly (i.e. not productive) bureaucracy.

    Yes, someone will have to calculate the appropriate sales tax percentage, but that’s not difficult, merely detailed. And if it is too high or low, then the rate adjusts the following year. Transparency, simplicity, efficiency.

    Once this brave step has been taken, other bold steps will be easier. The current taxation system is a cancer in our society which sets a tone that damages us all. It directly creates a culture of avoidance and ‘cheating’ (sorry, efforts to legitimately minimise tax) which then ripples through every action and attitude in our government and our business lives. Who knows, with such a fundamental culture of transparency, would we have reached the stupidity of the parliamentary expenses scandal?

    There are many other changes required, and many more complex. But making this one will make all the others far more achievable.

    • I think what you’re proposing is a flat tax for everybody, levied at the point of sale instead of earnings. Nice idea but there’s one major problem with it: no socialist government would ever agree to it, and if it were already in place when they got iinto power, they’d abolish it forthwith. Period. How else can socialist govts create a client state where wealth creators are punished in favour of wealth consumers?

      • Yes, I am proposing a flat tax levied at point of sale, but it’s levied on business, not on individuals.

        I do agree that a traditional socialist government might have a problem with that, but given that the higher paid always spend more – without fail – than lower paid people, then if you wish to think of it in terms of “fat cats should pay more” or simply “those with more should contribute more”, then that is exactly what my proposal delivers. And it delivers it far more reliably and directly and simply than any current form of “redistributive” taxation system.

        We all know that fat cats pay very little tax – they know the tricks and the side-steps. It’s one of the reasons they are fat cats. The lower paid will always live more modestly, through taste and culture as well as through financial limitations, while the higher paid will always spend more liberally, through taste/culture and because they can.

        My proposal will deliver far more redistribution and effective contribution than any socialist government can dream of. They just need to be brave, open-minded and transparent. It’s more likely they won’t bring it in because THEY (the fat socialist two-faced cats) will pay more.

  8. We often get the response of ” produce more products and sell abroad” 
     I believe we have to move on from this cycle – we will never produce products cheaper than India or China. The answer should be more ‘blue sky’
     Firstly, our population is to large. We must take drastic action - 
    [Laws] Stop all immigration.
    [Laws] Taxes must be paid by all British nationals. If they prefer avoiding taxes and live abroad – remove their British passports, no exceptions, a passport should not be for life.
    [Farmers] Produce more of our own food and encourage consumers to eat British food.
     [Engineers] Start a new power company that produces electricity power, we should be selling power to the world. 
    [Engineers] Use the advantages of our weather to start new water companies that provide water to the world.   
     [Universities] Make our education and research facilities the best in the world.
     Make Britain the tourist centre of the world – Improve the airports, railways etc.
     There is so much that can be done – with just a bit of good governance.
      
       

    • Nohj, You are wrong about India and China being the be all and end all of manufacturing. I was trained in the UK and moved to Canada in 1991. I developed a patented design for an automotive product and I make it right here in Canada. I compete against Taiwan and Chinese products all the time and I wipe the floor with them through superior quality, better performance and my prices are actually not much more than for the Asian products. 90% of my products go to export eith to thr US or around the world. Your theory on penalising tax avoiders is also worng. The thing to do is lower taxes for high earners so that they prefer to pay tax in the UK instead of where they have taken their money. Bottom line is that you are better to have rich people living in England spending their money there and creating jobs than driving them away so they spend their money elsewhere. Still, you guys will never get past this “tax the rich” bullshit because you have been indoctrinated to believe there is a division between rich and poor that you can’t cross.

      • lane!
        My man!
        Another one!

        I’ll repeat your remark it feels so good

        “Bottom line is that you are better to have rich people living in England spending their money there and creating jobs than driving them away so they spend their money elsewhere. Still, you guys will never get past this “tax the rich” bullshit because you have been indoctrinated to believe there is a division between rich and poor that you can’t cross.”

        I’m glad to say that more and more people are coming around to this way of thinking. I check out a good few lib/progressive/socialist blogs BTW and the obsession with milking the rich is ready for a super critical breakdown.

        Flat rate tax is the way forward not just economically but from a liberty viewpoint as well.

      • Lane,
        I’m afraid that you have misunderstood the Tenor of my comments. Having never voted for our socialist friends I’m certainly not a “soke the rich” supporter. For the forseable future, however, the seriously rich must pay their share. The pay of our top earners has become obsene. 
         Your comments regarding manufacturing I take on board. But having spent my recent years in India and Germany as a financial analyst in the auto  industry (an oem), I take your comments with a pinch of salt. In the last ten years we have closed plants in England (2) and several in Europe, (2 in Germany alone). Plants in both India and China are improving all the time. Incidently, I have recently retired from this stressful area of employment – I’ve seen to many good people thrown on the scrap heap.
         As regards to your own company I wish you well. 
             

      • To Nohj and Lane: wealth is irrelevant. The super-rich should be taxed in the short term as a penitence for screwing up the country.
        Senior bankers are a suitable subject for Trial by Fire – as indeed are bombers, yobs, folks with 17 kids, senior Mandarins, and other members of the criminal classes.

  9. Excellent comments. All accurately sum up the present state of Britain and the British.
    Very little of the ‘entrepenarial spirit’ existed prior to 1997. Now its extinct thanks to the mindnumbing,state controlling socialists who have all but destroyed what was left of old England. To be fair to them(the socialists) the British all but deserve everything they’ve got. Their inbuilt ability to ‘deny’the truth for the sake of a quiet life and to ‘hope’ for the best has done for them. ‘Freedom’ is an alien concept of which they know and understand little. In fact they wouldnt know what to do with it if handed to them on a plate. They have become so dependant on’nanny state’ now they would fear freedom because they are so illequiped to handle it let alone make good use of it!Only a total economic breakdown will allow for any meaningful change to our predicament but while we can keep on borrowing its not going to happen

    • Rogerandout
      The human species is the only one conscious of the certainty of death, but denies it approximately 99.7% of the time. If we can deny that, we can deny anything.

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