Tuesday, June 17, 2008

Column, May 6, 2008

IT’S the economy stupid.
This was a catchphrase coined by Bill Clinton’s campaign team in his successful bid to beat George Bush Snr to the presidency.
Bush had a lot going for him, the Cold War was over and he had just beaten the Iraqis in Gulf War I, but back home there was a recession and Clinton made much ground reminding people of that.
So when Labour comes to sift through the ashes of last week’s political bonfire they might like to dwell on those four words.
Naturally, I don’t expect Labour stalwarts to pay me any heed, after all, I’m regularly accused of being a raving Nat or some sort of Tory fellow traveller. But as the son of a steelworker brought up in Deeside when they shut down Shotton I’ll leave you to guess where my political allegiances lie and if labour choose to ignore the likes of me then on their own heads be it, because they are ignoring the sort of people who put them in power in 1997.
It’s really quite simple. Firstly look at what’s going up. Food prices, fuel prices and the cost of your mortgage. It must come as something of a relief for some people to get turned down for a mortgage nowadays, because they know full well that even if they had got the mortgage they would be able to afford to heat the place or stock the larder.
Have any of those rises been accompanied by an equivalent, or even close, rise in average wages? No they have not.
And in the midst of all this carnage being wrought upon people’s finances, what did the Government go and do? Abolish the 10p tax rate.
Of course, note everyone lost out in that move. I count myself among the big winners. It turned out that all the income tax that was handed back to me by the new 20p tax rate was then snaffled back in National Insurance. All bar £1 a month that is. I’m a whole £12 better off – I’m going to spend, spend, spend.
But a large group of people who Labour might regard as their voters are going to be worse off and though we’ve had climbdowns and U-turns and promises of help from Ministers, when you look at the detail it’s clear there are going to be plenty of people who will not get a penny in compensation and for them it’s tough luck. Tough luck for the Labour candidate they might otherwise have voted for as well.
Secondly, look at the behaviour of the banks in all of this. The Bank of England has made cut after cut to its base rate and have those cuts been passed on to the poor homeowners? Not a one.
And yet whenever the Bank of England base rate has risen in recent years did the mortgage lenders ever baulk at passing on the rise to us – not once.
I know that interest rates have to go some way before they hit the crippling levels that they didn in the late ‘80s and early ‘90s when they were in double digits. But back then the banks were not lending people five times their income and 110% mortgages which is what they have had to do now to chase a housing market inflated by themselves because of the amounts of cash they were dumping into it.
And yet the banks neatly absolve themselves of any responsibility for the mess created by the housing market bubble – they didn’t force us to borrow the money did they? Well no, but they fuelled that meant people needed to ask for such huge mortgages and they lent out huge multiples of people’s salaries.
Yet know they are being allowed to sit there, failing to pass on rate cuts, refusing to lend and raking in the cash to protect themselves against the recession that is coming and which they helped to create. If they did this sort of thing in wartime it would be called profiteering and the bank chief execs would be doing a spell in Pentonville to atone.
Instead we have the giant economic brain of Gordon Brown claiming that last week’s cataclysm at the polls was somehow because of a failure to get Labour’s message across.
Does he really think that had he been able to explain more clearly Labour’s ‘message’ a family facing bankruptcy and repossession would have said, “Ah, now it’s all clear” and meekly trotted to the polls to pub their cross next to New Labour.
If he does then he isn’t the giant intellect some claim him to be.
Do you think Marie Antoinette, on her way to the guillotine said: “Zut alors, if only I had been able to explain to the unwashed mob what a nice alternative cake is to bread, then all of this nastiness would have been avoided.”
Brown need to forget about everything except the economy – schools, prisons, foreign policy, and Labour’s blessed ‘message’ – all that he can leave to ministers he has appointed to deal with it. He should focus entirely on getting through the next year or so without all of us ending up sleeping beneath the railway arches in cardboard boxes.
Do that and he just might find enough people well-disposed enough to him to turn up and vote for him at the next election.

THE above message applies to most of North Wales, save Gwynedd, where it should read “It’s the schools stupid.”
Because if there was ever a stupid policy suggestion it was closing the small schools of Gwynedd. The very thing that might encourage people to move there or for people living there to stay was the quality of education in the small primaries across the county.
To have closed them would have been a betrayal of Wales’s heritage as a country where education really mattered.
Now the election of councillors for Llais Gwynedd and the end of Plaid’s overall control ought to have consigned such barmy policies to the waste bin and hopefully another route will be found to achieve the savings they need.

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