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The Credit Cruncher was conceived to help you to keep up to date with credit crunch and recession developments, it provides some helpful credit crunch advice and it addresses personal debt. The Credit Cruncher also seeks to explain how the credit crunch started and shed some light on the worldwide recession. Recently, we have begun to look at how BREXIT will affect the UK economy. Please feel free to leave comments where relevant.

12 May 2010

A Con-Lib Alliance is is then...probably


With fine details yet to be thrashed out, a Conservative - Liberal Coalition is undoubtedly going to be the UK's next government. Gordon Brown resigned (again) yesterday after saying he would resign in September anyway. I must say I feel a little sorry for Gordon as I feel that his resignation yesterday was his own decision, the one the day before was I am sure foisted on him as a last-ditch attempt at attracting the Liberals. No doubt a scheme dreamt up by arch-idiots Mandy and Campbell.. Only a few days ago, Campbell was trying to claim that Gordon had the 'perfect right to be Prime Minister'. Only the great unelected (Such as Mandy & Campbell) could believe a man twice unlected could legitimately hold the right to an elected position. At least that should be the last we see of them in the corridors of power for a while (unless you include the House of Lords of course).
I have long believed that the House of Lords holds a valuable place in UK politics, and that's probably because I don't have the great faith in 'Democracy' that the majority seem to have. However, since they put Mandy in there (what to do with a man you have sacked, reinstated and sacked again?... make him a Lord!!), I am that much more in favour of it's abolition.

So what does the future hold for the UK? Presuming that the EEC survives the growing economic volcano, it will be a period of cuts and protest, Cameron has acknowledged this right at the start. The real trouble starts if we are plunged into a second recession in the EEC bankruptcy fallout. If Greece and other teetering nations cannot be bailed out, there is no knowing what will happen. Looking at this purely politically, the labour party did not lose as many seats as they might have, and the liberals did not gain as many seats as they might have, so the door is still open for a reversal of fortunes if the coalition does not deliver what the electorate want. Economically, we are in for a tough time and that could also unsettle the electorate especially when the government clashes with the unions as it will inevitably do. The unions would do well to bear in mind that we are in the midst of hard times. The attitude of 'Unite' over the British Airways dispute is not likley to draw much sympathy. True, some privileges have been withdrawn, but in the light of dwindling revenue in the travel industry particularly, further pressure by the unions is unwelcome and unwarranted. Public service unions are going to clash with the goverment over cuts in services, but at the end of the day, we have to get the national debt back on to a manageable footing before we build up public services again. This next two or three-year period is not the time to cry over losing your increments and priveleges if you have managed to retain your job. Pay will be down, revenues will be down, employees that can't accept that, and still feel that their pay must be comparable with someone else's, run the risk of comparing someone else's pay with their dole money...
There is still a very real danger that this coalition may prove unsustainable when real pressure is applied, we wait to see what will happen.

9 May 2010

A new direction?

UK General Election 2010
As new power axis begins to emerge, this election has delivered a hung parliament necessitating an unholy alliance to bring in measures that will require a strong and resolute governorship.
There are a number of observations we can make at this point, namely that this hung parliament does not look good for a time during which some unpopular policies will have to be endured in order to rectify the financial crisis. The financial crisis that we now face is a massive national debt, and a global economy facing uncertainty following the problems in Greece and the possible effects on the Euro - some commentators are even predicting a new recession following on immediately after the one we have just left behind us. Let's state for the record - anything can happen in a free economy - another recession is not as unlikely as it might seem, and this time...who will bail us out?
Domestically, we are hamstrung without strong Government. To be quite frank, right now my advice to David Cameron would be to make it look like you were trying to make a fist of it...then step back and let a Lib-Lab alliance actually take the parliamentary reins. A totally unsustainable government would then have a disastrous six months after which you could come back with a massive majority. I am very much bearing in mind the warning issued by the governor of the Bank of England that the next party to come to power will be so unpopular as to be unelectable for a generation.
This would be a costly and risky strategy, and I am banking that no politician can resist power even when it is likely to be hamstrung and short-lived.
There is no real danger of a Lib-Lab alliance however, I am personally of the opinion that the two losers of an election have NOT earned the right to rule. Like it or not, the fate of the country currently rests with the Conservatives having won the election without managing to 'win' a majority of seats. I use the term 'won the election' very deliberately - there is no doubt in my mind that the Tories have won, at least in the sense that they got the most votes and surely no-one else thinks there is another party that has won?
We will no doubt see a Tory/Lid Dem alliance take the reins, and maybe the labour party should prepare themselves to return to power when this alliance falls on it's face? I don't know how this can possibly work, however economically all three leading parties recognise there is a hard road ahead and spending must be reined in. In fact, when you think of it further belt-tightening domestically, coupled with the threat of national bankruptcy in European countries sounds like a certain recipe for a second recession close on the heels of the one we are just recovering from.
The period that is to come was always going to be hard.. a weak government (as a hung parliament surely is) will not have the backbone to administer the unpalatable medicine, and could well end up just offering a placebo.

Related posts:
Economic Fix?
Slow Recovery
End of Recession