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Storm clouds a-gathering

City announces jobs freeze as grim times kick in. But the pawn industry should do well, reckons Larry Neild

Published on June 8th 2010.


Storm clouds a-gathering

IT'S time to batten down the hatches as the financial storm heads towards the Mersey, and every other part of the country for that matter.

Will Cameron and Clegg, the Batman and Robin of modern politics, opt for an increase in VAT to raise cash?

Prime Minister David Cameron chose Milton Keynes (why?) to announce every man woman and child in the Coalition-dom will feel the impact of cuts for decades.

Meanwhile the Labour group now running Liverpool has issued its own storm warning and pulled down the sails by initiating an immediate recruitment freeze, promising further tough measures.

The city turns over around 800 vacancies a year, from its 10,000-strong workforce. Now, any requests from officials to fill a vacancy would have to be signed off by a cabinet member after deputy leader Paul Brant described the city's finances as “grim reading”.

It’s dawned on us we’ve been spending money we haven’t got. If we spend a pound and a shilling and our income is just a pound it spells misery. I’m sure somebody else once said that.

Here’s an interesting thought to throw into the mix about GDP, that’s our Gross Domestic Product – the amount of money generated by the activities of each and every one of us.

In 2002, the slice of the GDP consumed by HM Government debt was around 22 per cent, now it is more than 60 percent and growing. That’s lower than many other leading countries, the USA and Japan for example.

During World War II we borrowed and borrowed and borrowed from the Yanks to bankroll Churchill’s powerful war machine. The percentage of GDP as debt as a result of our war effort rose to a staggering 180 percent. But do you know what – we survived and we are

still here, no soup kitchens on every corner (at least not yet!). We finally cleared of the war debt in 2005.

Back in Liverpool, Labour will be eager to ensure the financial clampdown will not impact on front-line services or education. But the city council is at the mercy of the national government and in the emergency budget on June 22 expect to hear about massive reductions in the money sent to local authorities.

We pay council tax and at one time Liverpool had the highest tax in the land. But the reality is almost four fifths of what the council spends comes from Whitehall as Rate Support Grants.

Those war debts were partly paid for by purchase tax, a tax of around 25 per cent on so-called luxury goods, not essential to human existence.

Goods and items of furniture considered luxuries at that time would be the equivalent of what we today consider essentials – things like dishwashers, dvd recorders, gazebos, conservatories, home exercise equipment.

Will Cameron and Clegg, the Batman and Robin of modern politics, opt for an increase in VAT to raise cash?

If they shelve or abandon key projects – new schools, new hospitals, a new Runcorn bridge – it will essentially put on hold our economic development, send unemployment soaring and cause misery for years to come.

Solution – empty the piggy banks and invest in pawnbroking businesses. They will reap the rewards of what is about to be unleashed on all of us.

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7 comments so far, continue the conversation, write a comment.

Pawn of the devilJune 7th 2010.

Beware thinking that this will pass quickly.

SnakeJune 7th 2010.

It seems jail might be a better option for a lot of us. No redundancy, no worrying about a mortgage. A comfy bed with a tv and an exercise yard, regular job training and education. Where do I sign?

Taxing timeJune 7th 2010.

It was as blue as the summer sky (or is it the blue of the Tories) we'd all have to take the punishment. It's payback time folks, and it is going to ve very, very painful. I can see the crowds gathering at Cash Convertors to flog everything. Bring on euthanasia so some of us can opt out.

Bart in LiverpoolJune 7th 2010.

Yes Homer, you are completely right. WTF can we do? There does need to be a biteback when, not if, those twats start putting the mortgage thumbscrews on. U start it, I'll be the secretary

Land AhoyJune 7th 2010.

Emigrate! that's the solution. Bring back those ten quid one-way tickets to Oz so we can get the hell out of this stoney-broke Thiefdom of ours. Cameron is paving the way for terrible cuts by attempting to cushion the blow with an early warning. Adandon ship, I reckon.

AnonymousJune 7th 2010.

It's not good but anyone thinking that they can just carry on the same as ever is going to be in for a huge shock. There are some very bitter times coming up because we have never faced such a level of debt. Brown led us into this.

HomerJune 7th 2010.

There will be people who lose their jobs and as a consequence, the incompetent thieving banks will want to steal their homes from them. perhaps we should start building an anti-repossesion alliance and physically prevent the thieves getting their hands on our homes. After all, it will be the fault of the bankers in the first place. Mortgage amnesty for those affected by cuts, blockades of homes, we have already seen it on a mass scale in the US. Any ideas?

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