I’m happily back from a whistle stop tour of Sri Lanka and enjoying the fact that most people in the UK are not living in tin shacks or rough on the streets (it really is an eye opener every time you see such living conditions).
A wonderful time was had though, meeting many fantastic people and managing to see that most elusive of things; an England one day victory, a rare bird indeed.
What’s been happening?
I was fascinated to read the autumn statement from Chancellor Osborne and a few things seem fairly evident from it.
- The debt to GDP numbers are still bad and much higher than were forecast. This seems to be a factor of cutting taxes on lower incomes (a little from a lot is actually a lot), the slow growth in wages and the lower than expected corporate tax take.
- The measures introduced to benefit people taking their pensions are transformatory and will be hugely popular with middle England. Indeed apart from abolishing Inheritance Tax it’s hard to think of a measure which would garner a more positive response.
- The mansion tax (tiered stamp duty) only really affects the properties sold over £937,500. Costs for lower priced properties are reduced and so we now have a properly graduated property sales tax which strikes me as quite reasonable. The silliness of having to price a property at £499,999 is no longer, and prices won’t hit artificial ceilings and stall out.
The measures are obviously highly political with a general election due next year and we can deduce from them that …
The Conservatives don’t fear the rich not voting for them; they may not like being rinsed on housing tax but this won’t make them vote for the other lot.
The battleground is Middle England; those that save, have low debts and so have not enjoyed the last five years of low interest rates.
UKIP is likely to take Conservative votes but probably fewer than those they will accrue from Labour who will go nowhere near any of their policies, and those policies on Europe and immigration are resonating (no question about that).
The strong chance of an OUT vote in the Conservative promised referendum on Europe in 2017 should keep the more Euro Sceptic in their party less fractious (one needs to say more Euro sceptic now as we are all to some extent sceptical because it plainly doesn’t work very well).
The big question is whether all the negatives of Europe start to look less bad when the economic side effects of leaving become more understood. It’s similar in essence to the Scottish referendum, the closer the time to vote the more pragmatic became the anti-English view. Something along the lines of, we certainly don’t like them but we won’t like the results of leaving more.
Labour are going to get hammered in Scotland by the SNP who may, along with UKIP, (if the election is tight) become Kingmakers.
The irony of the LIB DEMS is that they have vigorously for decades campaigned for proportional representation (virtually ensuring coalition government). The proverb “be careful what you wish for because you just might get it” therefore seems apt.
They will do horribly badly in the general election on the back of their perceived ‘Poodle politics’ and the moral of the story may be just that; don’t ever make accommodation with the Conservatives if you don’t know the ways of the dark side, for they are strong.
Oil continues to get hammered and no one knows exactly why.
China has had a great run as they embrace stimulus.
Russia is getting hit by the perfect storm of low commodity prices, falling currency and biting sanctions. Vladimir is possibly now wondering if he has fairly comprehensively dropped the ball; trying to understand Russia is virtually impossible but he really does appear to have disappeared up an alley with nowhere to go but backwards.
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