Notice


I now write on law and regulation facing the pensions sector for Professional Pensions and this portfolio will no longer be updated. Please read all my new articles on the Professional Pensions website.

January 11th, 2013

Now, before I start, I must admit that I am no expert in the field of economics. There are few words and statistics that I understand.

But, the relationship between economic policy and return on that policy, in the way of contraction or growth, is not a difficult analysis to undertake. Hence, the recent news items regarding the nation’s return to contraction, the closure of Jessops, the cut of jobs by Honda and the contraction in the construction industry, all within the space of the week, signify a massive problem in our fiscal system.

In an earlier post, I predicted that the return to growth in the third quarter of 2012 was merely the result of the temporary Olympics and Jubilee celebrations (otherwise known as “artificially strong growth”) and this is exactly what has been confirmed by the National Institute of Economic and Social Research (NIESR), noting that without the Olympics the economy would have flat-lined.

However, the final quarter of 2012 included the Christmas period – a period of increased and frivolous spending – so it comes as a surprise that we see this contraction so quickly. In another post, I predicted that 2013 would see the UK re-enter a recession. Now this has not yet happened, (obviously due to the first quarter only having recently begun) but with such a quick contraction and the dent made in the employment figures this week, we can only expect to see this or a dramatic turn of events in the coming months.

Yet, based on just these major newsworthy statistics on job losses, we can already see 2170 people starting their new year without a job, entering an environment where intake of new employees is minimal and those without a job are being punished by the coalition’s blaming policies. Before long, we can see these people losing money on the benefits they did not necessarily used to have to rely on, and then being called scroungers of the state due to their reliance on and complaints about the reformed benefits system via this so-called revolutionary universal tax credit. Ironically, the Government wish to be the helping hand up, but these people will only remember having to take a forceful step down.

But much more ludicrously is the fact that this very week, despite these detrimental austerity measures, despite these massive job losses, despite the number of people’s lives they have ruined, our beloved MPs want a 32% raise in their wage packet. It comes as no surprise, that those who demanded the highest raise were from the already particularly well-off members of the Conservative party. Perhaps more surprisingly is that this raise was demanded by members of parties across the board and not just those of the three main parties.

It is disgusting and awful that those who are coercing the saving of money, reduction of budgets and removal of benefits are those also pleading for more money in their pockets. Because, after all, MPs should be exempt from the rules that they place on the rest of society.