Friday, November 12, 2010

‘Shameless Britain’ In Debt Contagion

Another piece I did for Newsnet Scotland: Alex Porter

Britain is a "shameless" place where one-third of people talk casually about their debt without embarrassment according to a new survey.

The survey called ‘Shameless Britain’ was compiled by the financial comparison website (1) also contains an alarming finding that 18 per cent of respondents find no shame at all in bankruptcy. With official figures due out regarding insolvencies the survey is another worrying indicator of the direction in which Britain is going.

There are question marks over many economic indicators such as GDP which is skewed by quantative easing (money printing) by the Bank of England and money borrowing by the government. The extra money finds its way into the system and then seems like GDP but is in actual fact debt. Figures such as rates of insolvency then help to give a clearer picture of Britain’s true economic condition.

Ann Robinson, Director of Consumer Policy at, says: "Some may see it as a sign of shamelessness, but for many Brits it's a case of desperate times calling for desperate measures."

In the last quarter to June this year there were 35,000 insolvencies in the UK. The coalition government’s austerity strategy is bound to increase these numbers dramatically as they cut just under 500,000 public sector workers, £7 billion in benefits and one-fifth from all government departments. The impact of austerity will cause an increase in unemployment claims as public jobs go and employment in the private sector as well owing to the consequent drop in high street spending.

In Scotland, where there the national accounts show a surplus, there are growing calls for economic independence to shelter the Scottish economy from volatility and uncertainty caused by an austerity programme aimed at fixing a problem it doesn’t have.

With the Holyrood elections looming the Labour Party in Scotland will be aiming to deflect attention away from the causes of Britain’s economic crisis. Polls show most people blame their last government for the parlous state of Britain’s finances. With the economic problems deepening, the SNP will ask the Scottish electorate not to trust Labour to solve a crisis that Labour themselves caused.

Another ‘Shameless Britain’ figure which will cause alarm is that a full 38 per cent of Britons say that there is no shame using a pawn brokers. Unless policy makers start to come up with real solutions to the crisis they may be living on borrowed time.



cynicalHighlander said...

Jim Corr on Bay FM.

joan mcalpine said...

Hi James just wanted to say hello and how much I enjoy your blog. Shamefully, I have just come across it. That's one of the downsides of having so many good pro-independence bloggers - it's difficult to get round them all....will certainly be reading Scotland Unspun regularly now.
I mentioned your name in the Political Innovation Camp in Edinburgh today in response to a point by Peter Geoghegan an Irish journalist living in Scotland who wondered where all our blogging economists were. He said in Ireland many economists had gone on line to respond to the thirst for knowledge about the crisis. They offered an alternative voice to the London media's commentary on the Irish crisis, which has been unhelpful.
Best wishes

David Farrer said...

Agreed Joan. We need more economics blogging here in ( and about) Scotland. Note the quote at the top of Scotland Unspun from Ludwig Von Mises. Mises was one of the most prominent members of the Austrian School of Economics. They are the folk who correctly forecasted the recent and continuing financial crisis just as they did before the Great Crash. If you have a few years to spare (!) the answers are here.

Alex Porter said...

Hi Joan,
I went on to Peter's blog and posted. I think he's half right with what he's doing and I explained why I think that.

The reason economists are bloggin in Ireland is because the madness of austerity is well advanced there. It will all kick off here too once the austerity kicks in.

Thanks for adding me to your blog list. Not kind to bankers, indeed!

I read up on the crisis myself over the last couple of years and then suddenly found I knew more than even commentators. I was talking about how stimulus was going to fail and that 'recovery' and 'green-shoots' were simply wishful thinking. I knew way back when that austerity would come and that would be a disaster.

I really think people are not prepared for what's about to hit. I think the SNP are playing a game that's over and if they realised that they could play a far more prodictive game!

Anyway, It's all been a shock for me to be thought of as some kind of economic commentator yet here I am..

It's interesting that I'm getting attention from such mainstream observers so I guess it's time to take the whole thing more seriously.

Please feel free to comment on anything or get in touch!