Tag Archives: balance of payments

Economy slowing as growth is revised down: So what?

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The BBC is reporting that the UK economy has grown by 2.6 per cent in the last year – less than the 3 per cent originally thought. In the third quarter of 2014 the increase was 0.6 per cent.

“So what?” you’re probably asking. “Isn’t 2.6 per cent enough?” Well, it’s certainly much better than the limbo days of 2011-13 when the economy was in and out of the red and Ed Balls’ claim that it had “flatlined” was literally true.

The lower growth has been attributed to smaller government and business investment than had previously been expected, and higher imports.

There’s nothing to be done about the increase in the balance of payments deficit (that’s the difference between import costs and export takings) to 27 billion – especially if both government and business investment is down; it seems that Britain simply has nothing to sell.

So much for the “nation of shopkeepers” as Napoleon Bonaparte (among others) famously described us!

Perhaps George Osborne has restricted government investment in order to meet his (revised-revised – and probably revised again) deficit reduction target for 2014-15. If so, he’s even more of a short-sighted fool than we all thought because this will cause greater harm in the long run.

And there’s also the impending crash when the property bubble created by Osborne’s artificially-engineered housing boom pops. Help to Buy and Funding for Lending stimulated the economy when the private sector ignored Gideon’s call for help, but won’t go on forever.

But what does all this mean for the average person on the street?

Not much, it turns out.

All this talk of economic improvement may sound good – indeed, it is intended to do so. But it hasn’t translated into any improvement in living standards. They’ve been plummeting ever since the Conservative-led Coalition government took office.

Tories are bad for the nation’s living standards. So are Liberal Democrats.

Household incomes have dropped by a massive £1,600 every year – a huge amount for the poorest to bear and a considerable inconvenience for those of middle incomes as well.

Pay rises have been non-existent or below the level, even of CPI inflation – which doesn’t take into account all the costs that households must bear. That’s why the Tories and Liberal Democrats switched to using it as their main indicator back in 2010.

Where are all the new full-time jobs?

The only people to benefit from any economic upturn have been the corporate bosses and the Conservative Party (thanks to donations from the corporate bosses).

This means that, instead of asking, “So what? Isn’t 2.6 per cent enough?” you would be better-advised to ask:

“So what? When do I get my share?”

The answer is: “Under the Conservatives and Liberal Democrats?

“Never.”

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Here’s why Cameron won’t criticise Israel: nearly £8bn a year in arms sales

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It’s a business matter – the business of bloodshed.

Despite the high-profile resignation of Baroness Warsi, despite growing unrest among his own backbenchers, despite public criticism over his government’s failure to support a UN inquiry into possible human rights breaches in Gaza and the Occupied Palestinian Territory, David Cameron remains resolute in his refusal to speak up against the Israeli government’s use of overwhelmingly superior firepower against Palestinian civilians who have been caught in the crossfire between Israel and Hamas terrorists.

His uncharacteristic silence has made him a laughing-stock in some quarters. The blogger Tom Pride, for example, took great pleasure in pointing out useful things that Cameron hasn’t been saying: “In a dramatic turnaround, Mr Cameron shocked political pundits after he blasted the Israeli Army for massacring civilians in Gaza by not quite saying something not very nice about it.

“And in a devastating speech which he was very nearly on the point of giving today, Cameron bordered on almost telling Israeli premier Benjamin Natanjahu to stop his naughty behaviour at once or face being told to shake hands and make up with the Palestinians.

“Mr Cameron also blasted the Israelis by getting pretty close to claiming there were “reasonable grounds” to believe that innocent civilians in Gaza – including children – had been targeted as a form of collective punishment,  which he almost pointed out was not very nice and was even actually rather quite naughty if you think about it.”

The reason for his reticence? The Israelis are using British weapons, bought under contracts that are worth almost £8 billion every year. Cameron doesn’t want to put that kind of income at risk!

The latest development is that the Liberal Democrats have called for the government to suspend the export licences under which these weapons are shipped to Israel. It seems the intention is to put out a clear message that Britain will not tolerate its weapons being used against innocents (and we can debate the possible levels of hypocrisy in that later).

Downing Street has stated that the licences are already under review, with no new licences issued since the Israeli government opened up hostilities last month.

“Suspending export licences is not a decision we take lightly and it is right that we examine the facts fully. This is the approach being taken by the vast majority of countries,” the spokesman said, according to the BBC.

It seems more likely that nothing will be done and the government is hoping this affair will blow itself out before it can affect the balance of import/export payments.

Cameron has been attacked by many – including commenters on this blog – for the apparent failure of his moral compass where money is concerned, and there is evidence that criticising his policy is a bad career move for fellow Conservative Party members.

It seems only people outside the government are allowed to speak their mind. Look at Dominic Grieve, the former Attorney General who was ousted, possibly for criticising plans to limit Legal Aid to those who least deserve it. According to the BBC, he has been heard questioning whether Israel’s actions had been “reasonable, necessary and proportionate”.

Outside the Westminster bubble, high-profile names have been far less reserved about expressing an opinion. Remember when Roger Waters (formerly of Pink Floyd) compared the modern Israeli state with Nazi Germany last year? He was branded as an antisemite at the time.

But take a look at his words now, about Israeli treatment of the Palestinian people on the Gaza Strip: “The parallels with what went on in the 1930s in Geermany are so crushingly obvious… The Holocaust was brutal and disgusting beyond our imagination. We must never forget it. We must always remain vigilant. We must never stand by silent and indifferent to the sufferings of others, whatever their race, colour, ethnic background or religion. All human beings deserve the right to live equally under the law.

“I have nothing against Jews or Israelis, and I am not antisemitic. I deplore the policies of the Israeli government in the occupied territories and Gaza. They are immoral, inhuman and illegal. I will continue my non-violent protests as long as the government of Israel continues with these policies.”

When did we last have a Prime Minister with such principles?

Not since 2010, for sure.

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