Nov 02 2009
UK PLC – steady as she borrows
The CEO of UK PLC sends the following update to shareholders:
Dear Shareholder,
I am writing to reassure you. Rumours that our Finance Director wishes us to cut spending and to start to rein in borrowing are today untrue. Following a most successful meeting I have the assurance from him that he is firmly committed to our widely admired strategy of spending, borrowing and printing more. How could we do otherwise, given the disappointing turnover figures we have produced for the last four quarters?
Some of my critics have even dared to suggest that the quicker recoveries being experienced by our US, German, French and and Chinese competitors should lead us to question the very foundations of all that we have bought and borrowed together in recent years. How wrong they are. I can confirm that the only way out of this temporary set back is to redouble our efforts to spend and borrow more.
You will see in roads and streets near you our most successful policy of committing ourselves to shovel ready projects to change kerbs, narrow streets, replace barriers, strengthen edges and carry out all sort of needless work to restrict traffic flows on a temporary and permanent basis. You will be pleased to know every penny of this is borrowed, and much of this work can be done again to an even more annoying plan in the years ahead. You can spend your time in the traffic jams it has caused working out all the interest you will have to help us pay on all that money. We would much prefer you to go by train, where the public subsidy is so much higher.
We are pressing ahead with new quangos, and have added extra jobs to our big make work schemes in the public sector. We are currently reviewing the 2010-11 budgets, as I think they are too low. We do not want to take the pedal off the floor at this late stage in our current business plan period.
Which brings me to our competitors, Conco. I am pleased to remind you they have made a collosal mistake, arguing that they should take over our business and run it on more orthodox financial lines, cutting back on spending. I have decided the obvious response to this act of folly is to double our bet. So I will be planning further increases in spending and borrowing as soon as possible, forcing Conco to admit they cannot cut out all that we have so carefully put in.
Our motto is and ever shall be – “Never have so many been employed and so well paid as today in our glorious company”. We will expand our workforce more, put their pay up, increase the pensions, and take over as much as possible to boost the spend and our influence. I have never felt more confident in how right we are. I am at the height of my powers as your CEO, and intend to build this company up to record levels of turnover and debt.
My critics still do not get it. If you owe the bank £1 billion, you have a problem. If you owe them £1 trillion they have a problem. Now we have our own printing presses and money creating banks, how can we fail? It’s all so liberating. A few years ago I was told I needed to marry Prudence and keep away from taking over banks. How things have changed!
Yours in generous salaries
CEO
24 Responses to “UK PLC – steady as she borrows”
John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College...
Dear CEO,
It’s always good to hear from you – perhaps you should indulge in some more advertising so that we don’t miss you in between your infrequent letters.
We have all noticed the results of your Grand Plan. There are a seemingly unlimited number of things to keep us amused and our collective blood pressure raised. The details of the Finance Directors plans are obviously nothing to do with either reading other peoples literature, or rolling dice. I’m sure he knows that when it comes to implementation, timing is everything.
There is so much going on, that few of us have noticed the extra funding required for air travel, or having a telephone line. How clever of you to both invent the charge, and schedule the rise in rate before it has even been implemented, thus blunting the criticisms of those who complain later having failed to notice the well-hidden clause in the annual report. Your plans are very comprehensive, and it’s clearly not just a question of raising more money. Why would it be, when you can simply print some more?
Regarding proposed votes in the future of our organisation; many of us suspect that it doesn’t matter very much who leads this (formerly) noble giant. There are two reasons – one is that all CEOs appear to be the same, telling us what they think we want to hear until elected, and then doing exactly what they want with no reference to former promises. The other reason is that most of the shares are held by a massive corporation over which we have no influence. Whenever they say jump, you ask how high – it doesn’t matter what we want, as we are but toothless fleas on the back of this overwhelming power.
Your reminder as to whose problem it is when large sums of money are owed is very timely. I’m curious as to how whenever the problems occur, and whoever caused them, it’s always me who ends up paying for it! It’s hard enough to stay afloat in this allegedly changing climate, along with the animated dog, without having millstones added to ones necklace on such a regular basis.
Yours swimming furiously
Mick Anderson
I am plesed to note that our competitor and minority shareholder, Conco, has apparently dropped its call for an extraordinary general meeting on the topic of the merger with our European fellow traders. In future, UK PLC will be a division of the conglomerate, Gallic-Bosch Industries. As regional supervisor, I welcome the capitulation of Conco’s CEO and Board.
I think you could do a great service to the Conservative cause by circulating a simple cribsheet to Conservative MPs, esp. front benchers who get invited onto the TV and radio, with an answer to Brown’s line that: ‘the Conservatives proposed the wrong policies throughout the crisis from Northern Rock onwards. Cutting public expenditure in a recession will make the recession worse. All other countries are following the same policy as the UK Government, only the British Conservative Party says government expenditure should be cut’. The argument is nonsense for an indebted country like the UK where there is a real question over long term confidence – but unfortunately many Conservative MPs & even shadow ministers don’t seem to be able to argue back coherently as you are able to do. Of course most BBC interviewers are on the government side on this which makes life tough for Conservatives in the media, but the point is a very important one – we have to win the argument to win the election.
Topic du jour: the whole climate change ‘debate’ where major banks establish ‘centers of excellence for climate control’ in order to feast on fat fees they hope to make from a rigged market for carbon trading. The citizen is powerless in the face of a situation where the obvious solution – cutting world population – is never mentioned. As we know for fact that the world has experienced numerous ice ages and the arctic once enjoyed a tropical climate the only answer the political class seems to have is more spending on subsidies for alternative energy and another gift of resources to third world countries whose only expertise is in providing luxurious lifestyles for their corrupt government officials.
Brown has decided that he wants another stimulus package in a hopeless last-ditch attempt to bribe the electorate before next June. So the MPC will oblige accordingly this week by extending the QE insanity by another £25 billion, or maybe £50 billion, who knows? This will be used to buy government debt and so fuel Brown’s next gigantic waste of money. Now what was that about an ‘independent’ Monetary Policy Committee?
Ah Yes.
And remember that we are coming up to March soon, so every penny has to be spent by then, to use up all of the Grants, Budgets etc. otherwise horror of horrors, there may be a surplus and hence a reduction for the next year.
No point in having money in the Bank, it has to be spent.
So resurfacing footpaths, laying down coloured tarmac, erecting a few more signs, painting a few more lines, both white and yellow (must not be predudiced) raising car park charges, road tolls, installing more traffic lights, pedestrian crossings, building more islands or refuges, putting in more speed humps, forming more bus lanes, erecting more Cctv cameras and the like all helps to spend the dosh, and ensure that Council tax will continue to rise.
We must not of course forget to make sure that the Pension contributions of all Public sector employees are also kept in the black.
But we will delay by Public Enquiry some new roads, by passes, bridges, and car parks, and limit the amount of road maintainance that we complete.
And this is only Local Government, just think what happens on a National scale.
Think they call it cookoo land.
John,
I do enjoy these letters but you need to focus on explaining the Conservative strategy for recovery. Today’s Telegraph carries a story that Fathom Consulting is lambasting your policies for reducing public spending. More and more financial commentators are demanding even more money printing. These opinions need to be challenged but no one seems to be doing that job. I feel that since the conference your party has decided to keep its head down. That just isn’t good enough.
I see the EU is forcing the new state banks to be broken up, causing another 40bn to be spent on the banks. I wonder if the EU will also force the UK to stop printing money to pay for it all as well!? The rest of Europe is not printing money but are out of recession!
JR, With apologies for an off topic remark, I would be most interested to hear your analysis of the current Afghan situation following the abandonment of democracy in that country
You have done wonders CEO. You have engineered our national debt to around 170% of our GDP and will no doubt hit 200% within the next year or two. You have constructed a structural fiscal deficit of around 14% of GDP; amazing, I never thought it was possible. But, as the time is nearing for you to step down, we should be thinking of your legacy.
With this in mind, I have set our local primary school the task of designing some new bank notes. To keep with the global standards for such items, that is the 1,2,5 sequence, I have asked them to concentrate on 1000; 2000 and 5000 pound notes. I think you will agree that there is little point in designing smaller denominations for the next decade.
Naturally, your face and the face of our chief finance officer will feature largely on the front. On the reverse there will be a scene of several citizens representing the sectors of our economy, with there trousers down, undergoing Colonic manipulation with a body temperature appendage.
A fitting legacy I feel sure you will agree. Every time we enter a food shop, with these new bank notes, we will be reminded of your outstanding achievements.
Dear CEO,
You forgot to mention your highly successful rebranding policy. Under Sunny Jim Callaghan public expenditure rose to 46% of GDP, but that was Old Labour. Under New Labour, public expenditure will rise to 48% of GDP in two years time. You should explain that the ‘New’ stands for new expenditure.
Yous faithfully,
McScrooge
“Think about it. What happens to growth if people, governments and companies start spending less? Does it go up or down? In these circumstances, of much lower demand, why would any company choose to invest?
“Personally, I assumed neo-classical economics was dead and buried after the last two years. It appears I was wrong, we have a Tory Shadow Chancellor talking about the public sector ‘crowding out investment’, about the virtues of ‘thrift’ and the need for ‘export-led growth’. It’s as if we’d collectively stepped into a time machine and returned to the early 1930s.
“Again let’s be clear. These polices were been tried in the 1930s – they caused a depression. They are currently being tried in Ireland – they are causing depression-like falls in GDP: massive unemployment, higher budget deficits and deflation.”
In other words, let the State grow and grow instead of the economy which earns us money!
This is copied and pasted from the economics page of Labour List. So your CEO really is peddling the party line.
Thanks indeed for setting us straight, as always a wonderfully marvellous and eddy-frying insight into the real world of Government Financing “The argument is nonsense for an indebted country like the UK but unfortunately many Conservative MPs & even shadow ministers don’t” If ! That .Aeolian harp will be my tool of choice today. Setting Forth a good contra-buffoon is always worth the effort and tuning this hart my Brothers will herald good things. “Which brings me to our competitors, Conco. I am pleased to remind you they have made a colossal mistake, arguing that they should take over our business and run it on more orthodox financial lines, cutting back on spending.” Indeed a mistake of Epic proportions, although they tried as they might they mightily failed. Here’s grit for his eye,,,said I anD (–) . Such mistake were resulted from a wrong ambition. Little boys use Tonka toys but little girls are sweeter. “Why would it be, when you can simply print some more? “ Talk about economic cycles, always amused this poor fool. On On to the Election, will we patronise this Great Country until it sees straight, you bet your duckcats we will. I have just one word to add Inflation!!
Heinz Geyer: ” the obvious solution – cutting world population – is never mentioned. ”
Clearly, in terms of population control the citizen is not powerless, in fact in the West we have taken the issue into our own hands. Since the ‘67 abortion act, something in the region of 10million infants have been put to death. (United Kingdom Do ‘Health’ figures avaliable on line).
New Labour’s response has been to import more population to compensate.
The figures for Europe must be dramitically higher.
By the way, in terms of cutting world population, are you volunteering?
On Global Warming: I agree with you, it is a scam, sadly the leader of the Tory party has bought into the scam.
You might be interested in a slideshow that cnbc.com have put together – The World’s Biggest Debtor Nations. You can find it about half way down their homepage today. The figures – which I am assuming are correct – are pretty horrifying for the UK. The USA is number 20 on the list with gross external debt of $13.5 trillion or 94%of GDP, we are number 3 with $9 trillion of gross external debt or 408% of GDP. The ultimate basket case is Ireland at number 1 with figures that are truly scary. It’s easy to see why governments around the world are colluding to keep interest rates at historically low levels.
must say I saw Dave Camerons speach on the NHS today, sounds to me like he is giving way too much power to GPs and way too little power to patients
until patients can change provider at any point of the treatment cycle, and the money genuinely follows their decision, then I am afraid the NHS will continue to be terrible
many of the problems of the NHS are caused by useless GPs and patients need real spending power to force change in GPs too, force them to open when patients want, and so many other things that GPs in this country get away with that just dont happen in countries where patients have more buying power in the relationship
I do hope that I am correct in hoping the Tories are saving their firepower for a GE campaign. We all know this Government is on a “bogof” campaign for sales of Sterling, but Mr and Mrs Person-in-the-street aren’t being told why that’s not such a great idea. Hey, if Tesco’s can do it with biscuits, why can’t our nice Labour government do the same thing with five-pound notes?
There really needs to be a lot more straight talking by the Tories, and some markers laid down, in the form of principles which will be stuck to. A one-off major news conference with Cameron/Osborne/Hague/Clarke as a minimum would prove that you guys meant it. If these ideas are copied by Labour (a la Bank Sales) you need to say “we thought of that first, they disagreed then copied it”. And when it all goes pear-shaped with inflation, it is no good being there saying “we kind of didn’t agree with all that money printing at the time”. There really isn’t an issue with the Tories calling for halting QE, lower property prices for our children, and “save the Pound” for all of us. Or is there? The timidity is worrying…..
John
Why are you worried by “Qe”?
Roger is not worried, sez its GOOD for you!
http://www.telegraph.co.uk/finance/comment/rogerbootle/6480825/More-quantitative-easing-is-on-the-way—and-thats-a-good-thing.html
Mike
………….and just when things where going so well:-
http://www.telegraph.co.uk/news/newstopics/politics/6488240/David-Cameron-to-tell-voters-no-vote-on-Lisbon-Treaty.html
The CEO sends out the following message:
The Tories look likely to win power in May 2010. If you work in the public sector fear for your jobs, fear for your kids’ future and fear for life in old age.
Dear CEO
Whilst it is clear that your policies are absolutely right, I think we need a more compelling marketing strategy for them.
We need new terms for “Taxes”, “Spending” and “Borrowing”, to make them more relevant to today’s consumers of government.
We should rename them “Family Surplus Payments”, “Credits to the Economy” and “Future Deficit Opportunities” respectively.
This would follow up the great success of the strategy of calling financing government spending by printing money “Quantitative Easing”.
Spinningly yours
Reply: Brilliant! At last a reply that understands the genius of our strategy. I will ask our personnel department if we could fit you into our organisation – you could go far.
Heinz Geyer: re climate change and the fact that nobody ever mentions population control. Think about the opposition of two highly entrenched and powerful institutions of organised religion to any form of family planning. Then you will have your answer.
Still, this subject is a little off topic. Following today’s news about £30 bn (or more) of extra taxpayer funding of the partially state owned banks, we may find that this blog returns to the subject of banks tomorrow.
@no one
Tim Worstall is at pains to point out on his Nov 1st blog that Gp’s are not to be admired as an example of public sector efficiency as William Hutton suggested recently in the Observer because they are contracted out,always have been,and operate as private businesses.So if there is anything wrong with GP’s (and dentists!), it cannot be because they are too public sector.
“Hammersmith and Fulham Council delivers a 3% Council Tax cut for 4th year running.”
If you haven’t seen today’s Conservative Home the link below is well worth following:
http://conservativehome.blogs.com/centreright/2009/11/hammersmith-fulham-and-the-emperors-new-clothes.html
The methods adopted by H&F Council are a template for the next conservative government and reflect the same principles that JR and his contributors have been advocating for so long.
They embody the same nitty gritty attention to detail that many small business owners regard as second nature. (But what would Labour know about that you ask?)
Whenever Brown or his trained parrots squawk that Tory cuts will hamper recovery from the recession they should be put in their place by quoting H&F’s policy and tactics …
“It’s about cutting waste not the economy stupid!”