14 May 2010, 8:34pm
reflections:
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  • UK Con-Dem coalition, who’d have thought it

    Well, we finally found out what we had voted for, though not many had expected a Con-Dem pact. Uneasy bedfellows I would have thought, though so far they seem to have been busy clipping off the extremes of each other’s wilder policies.

    The Tories have had to give up their cherished inheritance tax threshold raising, while the Lib Dems have had their IMO nuttier policies on defence and energy moderated. They’ve got a massive increase in capital gains tax past the Tories.  Buy-to-letters are spitting bricks. I’m not sure whether this was specifically targeted to take out BTL landlords, since business owners can usually find ways of getting rewarded that aren’t capital gains. It is a hit on people who have bought shares outside of ISAs and the like, and indeed may trash one of my employee sharesave schemes. I’ll live, though – this isn’t too much of a hit on me.

    For me personally the one Lib Dem policy that scares the hell out of me is their wish to abolish 40% tax relief on pension contributions, which could seriously bugger up my plans, as I am going for a contributions sprint at the end of my working life. If they get that through I will seriously look at switching to part-time working, as I can use my time more effectively building up my business and writing, rather than using nearly half of it to bail out financial institutions.

    However, on the upside, their proposal to increase the tax threshold to £10,000 will make my pension more valuable as I won’t be losing much of it to tax. A VAT increase may well take a lot of that back again though 🙁

    So like the Economist, and Monevator I find myself pleasantly surprised. I am still not sure whether the Tories and the Dems can stay in bed together, though they do all right on many local councils.

    There are some other nice wrinkles. FFS, why should I pay for middle class people’s sprogs via the Child Trust Funds and Child Tax Credits?

    I just love the moniker this unlikely marriage has acquired – Con-Dem, let’s hope it isn’t what it sounds like!

    30 Apr 2010, 12:49pm
    economy:
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  • whither manufacturing, and whatever happened to leadership?

    There’s an election going on, and what strikes me most is that, quite frankly, all three leaders strike me as weeds.

    In Britain, we’ve spent all our money, and then some. We have got fat and lazy on a decade of easy money. We need leaders who have the cojones to upset people, and stand by what they say and do. Brown’s cock-up wasn’t so much slagging off that woman in private, it was the craven apology that made him look weak to me. I don’t want nice, I want effective. We need to learn to save before spending, on both a personal and collective level. Cameron came over as somewhat more competent on the telly last night, but it was hardly barnstorming.

    Some of the proposals seem downright harebrained. Everybody seems to have discovered a love for manufacturing industry. Guys, wake up and smell the coffee. Last time Britain did any serious manufacturing was in the 1970s before Thatcher, ably abetted by the trade unions, destroyed it. Or perhaps it was the unions, ably abetted by Thatcher. Either way, the result was the same.

    That was over forty years ago. A generation and a half has grown up since then, and wisely targeted their learning away from science and technology on the grounds that it was harder to pass in these subjects and there was limited chance to apply the skills in the workplace. I have been working in this field and I’ve seen swathes of British engineering firms go bust, including some I never thought would go. Plessey, Ferranti, GEC, Marconi, where are they now? Unlike previous generations, today’s graduates had to take significant financial risks to go to university, so who can blame them for avoiding tough STEM subjects. As this University World News article says

    Countries around the world are trying to prevent a continuing decline in interest among students in science, technology, engineering and mathematics or STEM – the so-called key vulnerable subjects. Professor John Holman, director of STEM subjects at the UK National Science Learning Centre, said Britain was not alone among advanced economies that had experienced shortages of graduates in these areas. While other EU countries, Japan, the US and Scandinavia were also suffering, the picture was different in developing nations.

    We are hosed. Exactly who is going to staff these engineering and manufacturing companies? Are the few able young scientists and engineers going to have to call the ageing greybeards away from retirement to swell the ranks, or will science and engineering be put on the list of special skills that the UK border control will accept? And even if they are, will we offer enough money to attract enough people in without hamstringing the companies with labour costs.

    In case we and our politicians hadn’t noticed, in the intervening four decades, the Iron Curtain has fallen, two generations of hard-working Chinese have joined the global workforce ready to work for a damn sight less than the National Minimum Wage, capital controls have been removed and all sorts of other things have happened. We are never going to manufacture as much as we used to relative to the rest of the world, because other people will do it cheaper in other countries.

    It’s payback time. Living standards are going to fall for most people in the UK. More of us are going to have to get used to doing crap jobs again. We may not like the City slickers and Masters of the Universe but the money they sucked into our economy paid for us to decide that we were happy to look the other way while other people picked our vegetables for less than minimum wage with some of us on the dole. Now most of us are going to have to pay a bit more for our veg and have them picked by Brits, hopefully on the NMW at least. All sorts of other things that used to be beneath us are going to have to be done by Brits again, because we just aren’t as rich as we thought we were before 2007.

    We haven’t got enough money to decide that certain jobs are beneath us – we either get to do them or they don’t get done. Labour did a good job of fixing much of our infrastructure which was run down and knackered after years of Tory cost-cutting, and hopefully they built it well enough that it can last at least another term of neglect.  I am old enough to remember what the Economist meant when they  reminded me of what Britain was like before 1997

    voters have forgotten what Britain’s “public realm” looked like before 1997, even as their expectations for it have become more demanding and consumerist. The once-crumbling physical infrastructure of schools, job centres and hospitals, […] has been thoroughly renovated.

    The paint will be peeling again and the hinges will squeak after the election, regardless of who wins. Well, perhaps with our newfound passion for engineering then somebody will oil the squeaky hinges. I feel a bad moon rising and this track seems to fit…

     
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