UK Prime Minister Andy Burnham: calming the markets....?

 

The Guardian, the London newspaper talks about Prime Minister Andy Burnham trying to calm bond market, as more and more investors are getting rid of bonds of public debt. It must be said that it is not just Britain that might be losing its capacity to borrow billions of US Dollars (althougn bonds might be valued in Pounds) to paid a public debt that amounts to trillions US Dollars.

Any budget must be based on reliable data, but nowadays data has a habit of changing even before any budget is formulated. So by the time the Chancellor of the Exchequer John Healey (former Secretary for Defense) rises in the House of Commons to deliver the so called Autumn Budget all numbers in it might be totally outdated. Without the capacity to borrow more then taxing more and budget cuts could be the only way left to adjust public expenditure. Both options are deeply unpopular because they both go for one word: Austerity.

For a Labour Prime Minister having to start by imposing new taxes and cutting budgets because there is no money to go around is not what was promised during the first short campaign for an election that never happened. When the amount of monies available is significantly reduced, the impact of increasing defense expenditure makes cuts in other areas of the public administration even more painful. As Paul Samuelson, the American Economist stated, it is butter or cannons. You cannot have them both in equal measure. Something has to go. Will it be welfare payments? Whatever the previous Prime Minister did that was considered to be done against Labour values will be nothing compared with the limitations the new Prime Minister will have to impose.

Suddenly, recent electoral successes in Makerfield and Manchester will feel like a pyhrric victory. The joy and celebratons might turn into a funeral. More taxes will certainly means less buying power in the pockets of already suffering taxpayers. Budget cuts will mean more unemployment. But in actual fact both measures can accelerate the rise of unemployment. If you raise taxes, you cut private investment and consumption. Taxes will be higher but the amount of monies collected will be reduced due to less economic activity. Keir Starmer´s exit from Parliament will help him distance himself from then nightmare that is coming and Andy Burnham´s time as Prime Minister could be cut short.

Right after Andy Burnham was appointed, there were rumours that he would go to the country, that he intended to have his own Parliamentary majority, even by losing many of the seats that Labour managed to win in 2024. Going to the country, having a General Election preceded by a whole bunch of bad news does not look, sound and feel like a good idea. Labour MPs that did not want Keir Starmer as Leader and Prime Minister made the choice to remain under Keir Starmer not to risk losing their seats.

When Andy Burnham threw his hat on the right they could have rocket the boat and go for internal elections in the Labour Party. Instead, they chose to have Andy Burnham appointed without any contest. The idea was pure and simple. No contest to challenge Andy Burnham would show the Labour Party as something that the Labour Party is not: a united Party. When the new budget is presented in the House of Commons, factional rivalries will reappear. 

Having a majority in Parliament might look like a blessing, but having too many MPs might be inconvenient. A majority that cannot be controlled becomes a liability.

At a distance, Labour MPs that are no longer Cabinet Members could have been disappointed, hurt because they were no longer at the forefront of the Labour government. Now, many of them like Rachel Reeves might be congratulating themselves because they do not have to face the mess the new government will have to deal with. She was being forced to calculate and recalculate budgets before they were even presented in Parliament. Now the man who complained and even resigned as Secretary for Defense because he was not getting enough money for defense will have to face reality. Now, it is John Healey´s time to face the music.

Sue Gray did not last long as Chief of Staff under Keir Starmer. She said that she felt that she was being spied on, that her private conversations were being recorded and leaked to the mass media. Has the political environment inside the Labour government changed overnight? As pressure mounts, one can expect that internal tensions will rise. As the expression goes "keep your friends close, but keep your enemies closer". 

 

  

Conservatives talk about cutting benefits for children and young unemployed

With Ed Miliband talking about making Britain 'more like France' and David Cameron talking about cutting benefits for children and unemployed youths, both present and future look grim for millions of people.

France is being destroyed by unemployment and a rising tide of terrorist attacks and Britain call sub-employment that does not pay for pensions nor allows people to have decent living standards 'employment'.

The so-called buoyant economy is nothing of the sort. You don't even need to scratch the surface to see that millions of so-called jobs are a recipe for disaster.

Politicians have even stopped talking about the 'pensions gap' because the gap has become a gigantic hole when more and more people don't save for pensions because they simply don't have enough to pay for their daily expenses.

The mass media focus public attention on what is happening in Greece and this is a well-planned premeditated approach not to see what is happening in Britain.

Labour allowed in more than 10 million people and both Conservatives and Labour promoted flood immigration for different reasons. For the Conservative Party, flood immigration was the recipe to lower salaries and for Labour it was a means to get more Labour voters.

In the end, Conservative greed and Labour's stupidity have created an unsolvable problem and with every passing day things are getting worse. Firstly, people could not afford to pay for mortgages. Now, people cannot even afford to rent.

Working on 'zero hour contracts' or on commission, with unstable and badly paid pseudo jobs, the young are going to lose that last bit of help they had left.

A typical family gets about 20 Pound a week for the first child and about 13 Pound a week for a second child. Given prices in the economy and given what people get as income, it is less than peanuts.

When the Conservative Party talks about 'saving', you know that the most vulnerable are going to suffer and the worst bit of all is that there is not going to be any savings at all. The monies taken away from those in need are going to be squandered somewhere else.