George Osborne is The Most Dangerous Chancellor Britain has Ever Known:
By Gracie Samuels @GracieSamuels
George Osborne is the most dangerous chancellor Britain has ever had. He tells us the economy is on the mend, but on the mend from what? On the mend from his austerity policy which he deliberately inflicted on the economy slamming it into reverse at a time when it was already gently recovering from the worse global financial crisis for over 80 years?
Osborne chose to take this country down a blind alley in 2010, telling people if we didn’t go where he wanted to lead us we would end up like “basket case Greece”! The only basket cases here was George Osborne and David Cameron – liars too! Thanks to Gordon Brown and Alistair Darling, who managed to retain the country’s triple A credit status throughout the financial crisis, the UK was in an exceptionally strong position to borrow cheaply. The average maturity of the UK’s debt was 14 years not 14 weeks, so Osborne’s cynical lies about the comparison of the UK to Greece were risible and politically motivated. The UK was never anywhere near Greece, it was like comparing olives to a stone!
Osborne knew what he was doing, and he cynically exploited peoples fears at that time for his own political aims. Trying to fool people into thinking that this country’s fiscal position was out of control by inferring that the previous Labour government had borrowed too much and overspent was not only deceitful, it was dangerous and purely political spin, untruths deliberately out out by Osborne’s mates in the right wing press. In fact the national debt was lower in 2008 before the crisis hit than when Labour took office and the economy over from the Tories in 1997 and when Osborne took over the economy in 2010, borrowing was actually falling.
He took a reckless gamble with our economy and despite what he says now about a moving from ‘recession into recovery’, he lost that gamble and he is now furiously trying to cover his tracks. The US who took the baton from Gordon Brown and continued with Brown’s plan, has a strong recovery in place, although they know that they will face some tough decisions in the future they will be better placed to withstand the shock.
The UK is in a dire position, because Osborne took the wrongs decisions and despite this so-called “recovery” that this dangerous chancellor say is in place, the UK is in such a weak position that the slightest headwind will derail us! The only reason that exports and manufacturing has picked up slightly is that the Eurozone has settled a little and Europe (who also took the wrong road) is slightly recovered. It only needs another slight judder in the world and in Europe before we find ourselves back to square one and because of George Osborne’s dangerous meddling in the housing market and his foot on the pump helping to over inflate the credit bubble, the true number of unemployed, high inflation and because of Osborne losing us our triple A credit rating, the country is teetering on the brink of another financial recession.
It all comes down to supply and demand and the brutal truth is that demand for British goods worldwide and within Europe despite a tiny blip is nowhere near enough and even that is in danger in another slight downturn. Despite what China tells the rest of the world, they cannot sell to us if no one is buying and the only reason they say their economy continues to grow is because they make cheap goods to export (we cannot complete) and even then China has massive Chinese ghost towns, newly built shopping malls and apartments that no one rents, yet still the building is continuing, and still China’s gargantuan credit bubble is inflating and it is not if it goes pop, it’s when – what then? India’s economy is already slowing as attracting new investment will be tougher as the US prepares to rein in its stimulus. if the US slows slightly and India the great consumer continues to slow, this is going to affect the British economy. George Osborne knows this, so why is he still insisting on dangerously meddling with our housing market and allowing the credit bubble to over inflate again?
What happens if the UK starts bombing Syria and completely destabilises the Middle East disrupting fuel supplies and causing problems with Russia and China? We depend on trading with China to export many of our high end goods, we buy a lot of our gas from Russia (thanks to Thatcher). This country is in danger from this reckless politically motivated Tory chancellor.
For all those people who believe the hype that we have some kind of sudden economic revival and recovery underway, ask yourselves this one question; if Osborne was not now dangerously meddling with the housing market, underwriting deposits and mortgages for people who cannot afford them, and for buy-to-let landlords and blatantly using taxpayers money to do it, where would the economy be this very day? Would the minor upturn in manufacturing and the construction industry have produced the small 0.7% upward movement of GDP? It is a sobering thought because of course the answer to this is they wouldn’t, in reality we would have been lucky to get any upward revision at all.
In fact if Osborne had not meddled with the housing market then construction most likely would not have moved. George Osborne’s dodgy economic recovery is based on the service sector and the housing market but can this country and our rising population really be sustained on low paid service sector jobs alone and a rapidly over inflating housing bubble? Short answer to that is of course – no! It is simply unsustainable! The reality is that our growth is still a full 2% LESS than where it was in 2010 when Labour handed growth of 2.7% over to George Osborne. The harsh reality is that Osborne;s austerity measures strangled our growth and put the country back into recession, we would have had a treble dip, if it were not for Labour winning and organising the Olympic Games. (One again Labour save the government, even though they are no longer in office!)
Since when has the housing market rising at its fastest rate for SEVEN years been considered a good thing especially in an economy that needs to re-balance its house prices and bring them down to affordable levels? Rising house prices is seriously bad news. Each time house prices rise homes are being put further and further out of the reach of first time buyers and the whole housing market’s success depends upon first time buyers, so if the the first rung on the housing ladder is broke, how can we continue? By taking out a government underwritten loan for a deposit under the Help to Buy and Funding for Lending schemes and trying to step over the first rung?
The majority of mortgages are now being granted to buy-to-let investors! They were granted their highest number of loans since 2008 in the second quarter of this year as lower rates driven by cheap money from Osborne’s Funding for Lending scheme were snapped up by landlords.
- By the end of June, buy-to-let mortgages accounted for 13.3% of total lending in the UK, this was up from 13.1% in the preceding quarter and 12.9% a year earlier and it means that currently more than one in eight mortgages granted is now for buy-to-let!
- It compares to just 9.4 per cent in the second quarter of 2007, fewer than one in ten, immediately prior to the credit crunch and start of the financial crisis.
- Historic CML data shows the startling rise in the size of the buy-to-let sector during the credit boom. In 1999 there were just 73,200 buy-to-let mortgages outstanding, accounting for a tiny 0.7 per cent of total home loans.
- The sector has grown in every year since and last year there were 1,445,300 buy-to-let loans outstanding, accounting for 12.8 per cent of total mortgages.
What happens when the Bank of England puts up interest rates and buy-to-let landlord who has several properties, how will they find the considerable extra income to pay for more expensive mortgages? Put the rents up? How will tenants who are already struggling pay increased rents? The government are now capping housing benefit for the low waged as well as those that exist on benefits, many are on part-time work the majority have no real way of increasing their incomes so this will almost certainly lead to mass homelessness as landlords evict tenants who cannot pay. Landlords could even default have their properties repossessed. The problems being made and stored up for the future here are as immense as they are frightening.
Figures from the Council of Mortgage Lenders showed 40,000 buy-to-let mortgages worth £5.1 billion were issued between April and July – the highest number, and value of loans since the third quarter of 2008.
Why should the taxpayer, the squeezed middle, the disabled, the unemployed and those unfortunate enough to be forced to live on benefits see their standard of living deliberately driven down by this government as well as be forced to fund private sector landlords business opportunities? People are not only being forced to subsidise private landlords businesses through their taxes, stealth taxes and cuts to benefits like child tax credits etc, but those that are forced to rent their home from these private landlords are paying through nose to rent back a property they are already indirectly being forced to subsidise. It is absolute madness! Further, how long can this insanity last before the whole situation implodes?
Just as Margaret Thatcher created the mass housing shortage we see today which is underpinning the huge problems we have in our economy by selling off council houses under her “Right to Buy” scheme, so George Osborne is creating catastrophic problems for the future with his own insane housing schemes.
Mark Carney at the Bank of England has tried to steady the market by saying they will not raise interest rates until unemployment has fallen to 7% and below, but it has left itself leeway to raise rates if inflation rises. It’s precariously balanced to say the very least. The annual rate of inflation fell marginally from 2.9% to 2.8% in June to July, but the only reason it fell was because of cheap airfares and summer recreation, this offset the rise in fuel and diesel. How many real people benefited from cheap airfares? Many couldn’t even afford take one holiday this year (unlike the PM who took four!) and dearer fuel would have made this even harder and squeezed living standards still further! Inflation still remains well above the 2% target rate! While inflation remains this high people’s living standards will continue to be squeezed. Inflation actually rose the month before, what happens if it rises again? How long will it be before the Governor of the BoE is forced to raise interest rates?
Mr Carney has said that unemployment must fall to 7% before he will raise interest rates, but anyone with half a brain cell knows that the government are fiddling the unemployment figures and the real number of unemployed is over 4 million. Even by the government’s fiddled standards unemployment is still higher now than it was in May 2010!
The government are falsifying the figures and bringing them artificially low by over use of zero hour contracts; government workfare schemes; low paid part-time work, self employed and public sector workers being reclassified as private sector workers. At the current rate in which this government are fiddling the unemployment stats Carney’s figure if 7% will son be reached, much faster than most envisage too! So if Carney raises interest rates on the back of fiddled statistics this is going to have a devastating effect in the British economy! How will the true number of people unemployed live? What will happen to the British economy then?
If we carry on like this we are heading for a catastrophic crash and all because George Osborne is trying to buck the housing market by over inflating the housing bubble and the credit bubble in the hope that people will overlook his abysmal mismanagement of the economy and vote for them again. In effect what Osborne is doing is using public money to buy votes for the Tory party.Where is this country heading under this Conservative-led coalition? As far as I can see there isn’t even a medium term plan let alone a long term plan. All I see under this supposed economic recovery is more problems being created and older problems being swept under the carpet.Nowhere in his plans does the Tory chancellor have anything new, all he has done is dust down Margaret Thatcher’s failed monetarist policies give them a new name and reimpose them on our already fragile economy and is now helping us tip towards economic Armageddon.
Assuming our young people can get a decent job paying a decent wage (which is highly debatable) where in this government’s plans for the future generations of this country are the policies that will enable our grandchildren to be able to buy their own houses? If they cannot do this, where is the provisions being laid right now that will ensure they stand a chance of living in decent accommodation and paying a decent fair rent? Where is the thousands of social housing homes being built that this country desperately needs? Where are the plans for the future of this country?
We know now, in fact we have known for some time that we just cannot carry on with the same MO, the same capitalist system, the same people running the same banks, now taking the same huge bonuses as they were before the crash, yet this government and particularly Osborne and Cameron have no answers. They are too afraid of upsetting their party funders the bankers, shadow bankers and big business to do the things that need to be done.
Ed Miliband is the only party leader who has the gumption to stand up and point out to where we went wrong and where we are going wrong again, to point to the bankers and big business to tell them we have to change as a country. He is the only one who seems to understand, if we do not change now, then we are heading for the worst kind of disaster yet again.
Only this time our young will face a lifetime of austerity, but with no state education and no NHS and a private police service and this is thanks to the Tories who are privatising everything and selling everything off, just like Thatcher did and look how much we are now forced to pay for rail fares, gas, electricity and water. How will people manage on poor standards of living and low wages?
Unless we want our children to work in cafes, bars, McDonalds Tescos and pay through the nose for everything in a country where the rich get richer and the poor are getting poorer, we had better listen to Ed Miliband, at least give our future generations a decent chance.
Carrying on with George Osborne as chancellor fills me with dread, what he is doing to this country is criminally insane!