Tuesday, February 24, 2009

There be Fairies

I’m steadily losing count of the jobs that have been lost in the UK economy over the last week; Vodafone announced the loss of five hundred today. The CBI reports: ‘Retail jobs are being lost at record levels’, and elsewhere, the two Scottish banks that bear a greater part of the blame for the ‘fiscally prudent’ mess we are in look to be needing even more money, with Royal Bank of Scotland apparently needing a further injection of £500 billion of taxpayers' money to indemnify it against the risk of yet more undiscovered toxic debt.

So this morning, in a Licensing Committee meeting, I was somewhat taken aback to discover that the leader of Thanet’s Labour opposition, Cllr. Nicholson, shares Thanet (South) Labour MP, Steven Ladyman’s opinion that the recession is a myth.

The committee had been debating the matter of street trading in Thanet; principally involving vehicle sales and I pointed out, drawing the analogy with Del ‘Boy’ Trotter that in a recession, we might reasonably expect an increase in unlicensed street trading.

In reply, Cllr Nicholson described talk of a recession as “Complete tosh” and either a “Conservative invention” or “Something that the Conservatives should be familiar with.” (It’s not transparently clear which of these it was from the minutes of the meeting.)

A number of councillors exchanged suitable looks of surprise and in my next statement on the subject I properly deferred to” Cllr Nicholson’s legendary grasp of financial and economic matters.”

So there you have it, the recession is “Tosh”, Nicholson says it, Ladyman believes it and of course there are fairies living in the bottom of my garden. It’s only a pity that the Gazette’s ‘Smudger’ wasn’t around to record such an informed and profound comment on our ailing and failing economy.

Cllr Nicholson, obviously enjoys the same forensic grasp of prudent financial reality as Alastair Darling and Gordon Brown!


Anonymous said...

Of course Labour wouldn't want to admit that there is a recession on. Let's just put our heads in the Margate sands and think everything is okay. But on the plus-side the port and airport seem to be picking up again, at least there is an upside in this RECESSION!

Michael Child said...

Simon having just read on Bignews that KCC are handing out £100,000 in bonuses to their top 7 officers it would seem that it’s not just Labour with their heads in the sand on this one.

DrMoores said...

Correct me if I'm wrong but wasn't this for the previous financial year?

I for one couldn't morally support the notion of any similar KCC bonuses being applied in the present financial year in the prevailing economic circumstances.

As for the size of public sector salaries, we can thank The Guardian and the present Government for the unusual genorosity that has been shown to public servants over the last decade. I clearly missed my vocation!

Michael Child said...

No idea Simon KCC and TDC appear to be two of the most reticent councils to divulge financial information. I am afraid the internet means their culture of secrecy and control is rebounding on them.

Tony Beachcomber said...

Simon, This weekend thanks to the internet I have been reasearching UK gold policy from the Governments withdrawal from the Gold standard in 1931, the Bretton Woods agreement and the US suspension of the "pseudo gold standard" in 1971 right up to the present incluiding the Gold sales announcement by the Government in 1999.I have also read the National Audit Office report on the gold sales.
I was prompted by the Conservative party and Conservative party supporting press that "Gordon Brown had sold our Gold reserves".
On 7th May 1999 the Government announced that it was to sell 415 of the 715 tonnes of gold it held in reserve valued at $6.5 bn. There are 32,150 troy ounces (31.1gms or 20dwt) to the metric tonne which sold at a average of $275 a troy ounce. The policy was to "restructure the reserve holding" From the sale of the Gold the money went into foreign currency reserves $40%, Euro 40% and Yen 20 %. The Government retained 300 tonnes of gold in reserves.
In 1999 the Government entered into the Central Bank Gold Agreement. This agreement with other central banks limited the collective sales of central banks to 400 tonnes per year for five years. At the same time agreeing "Gold will remain an important element of global monetary reserves". This does not include the global mining output of 2,500 tonnes per year.
In 2004 when the 1999 to 2004 agreement expired the Government did not sign up to the agreement as it has no intention of selling any gold from the reserves. Those central banks that did agree , agreed to collectively sell 500 tonnes per year and that agreement expires on 26th September 2009.

The real point of all this, just highlights how sloppy Conservative politics are getting, designed to misinform than inform.Everything the Government does can be scrutinised like the freedom of information act something not around in Margaret Thatcher's day. Unfortunatley at lot the things the Conservatives say which is not a policy statement and as there are not many of them they are not held to account. The unfortunate thing is people do actually believe it like "Gordon Brown sold off all our gold".
It does comes across that the doom and gloom statements and misinformation is lead Conservative policy as they do not appear to have answers .

DrMoores said...

Thank you for this very interesting piece of research Tony which I will certainly pass aoround for comment.

I wonder if anyone has any rather than all of the answers at present but the Government appears to have littleleftto inspire confidence in the people.

Call me Infidel said...

So Labour "only" sold 415 tons with gold at around £275 an ounce. I make that 58% and they put the money into paper. I feel so much better now. Remind though, what is the current value of gold? Oh and that Freedom of Information Act. That would be the one where Jack (man of) Straw has used a clause within the Act to block the release of cabinet minutes in the run up to the war in Iraq. Oh yes that's real freedom of information for you.

Tony Beachcomber said...

The value of gold in dollars has been averaging $960 a ounce this week or £662, I haven't got the calculation for Euro's.
Gold is not money and it is a working assett. At the time of the auctions in 1999 the forecast for Gold was low and remained low into 2004 with the IMF sales and the Central Bank Gold Agreement. The purpose of gold in reserves is to support the pound and but unfortunately gold does not earn interest the same way hard currency did at the time.
In the US the American gold reserves are still audited at $42 an ounce, the official price it was when America left the Gold Standard. The price of gold as we know it is the value on the open market at the price people are willing to pay for it. Since 1999 the central banks have been off loading gold at a rate of 500 tonnes per annum and the IMF is poised to off load 400 tonnes.