WHAT sort of recession did you have?
In the view of David Cameron’s erstwhile enterprise guru Lord Young of Graffham (a view seconded by BBC dragon Theo Paphitis), the chances are you had a good recession.
Lord Young claimed that many in Britain had enjoyed the benefits of low mortgage payments in the past two years, and implying we weren’t finding things as tough as some might like to think.
Lord Young went on to say that the anticipated 480,000 public sector job cuts would hardly be noticed in the context of overall employment market conditions in the UK.
His remarks were deemed insensitive, so he had to quit his government job. Thing is, unlike others about to lose their jobs, Lord Young won’t be heading to his local JobCentre Plus to claim jobseekers allowance.
That’s because he has had plenty of other jobs and roles to cling on to.
This is a man who has over the years held top directorships at Cable & Wireless and investment bank Salomon Brothers, as well as senior posts in government. He has held directorships or trusteeships at universities, opera houses and charities. When he is not supping at the Carlton Club he can probably be found at his, I would wager mortgage free, Bloomsbury home.
Both Lord Young and Mr Paphitis need to understand that those unfortunates among us burdened by the need to pay a mortgage every month will see things a bit differently. Fear will be a part of our psyche for a few years yet.
While the bank rate is at an all-time low of 0.5%, the real rate of interest paid on mortgages is 3 to 4% higher. So monthly repayments are not, in fact, as cheap as Lord Young might imagine.
Nor does rising unemployment concern just those who lose their jobs. Lots of people have spent many months suffering anxiety as they worry that their one and only job will be next to go – and that they won’t be able to rush off and have a word with a well connected chap who can find them a new stipend.
Other news from the real world this pair of cosseted buffoons should know is that any imagined savings from lower mortgage payments have been more than offset by pay freezes or below inflation pay increases imposed by financially challenged employers.
Perhaps it’s all for the best that Lord Young ceases to be the government’s small business guru. As well as individuals, many small businesses have had a turbulent recession, too. It,s a difficult constituency to serve if you’re not in touch with reality.
I’M NO expert in international finance. For me, there are many mysteries to the workings of these markets.
One such mystery is the reasoning behind the continued anxieties afflicting the share prices of banks, particularly those in Britain and Ireland.
Surely the eurozone’s pledge to bolster the balance sheets of Allied Irish Bank and Anglo Irish Bank should have been enough to cause their already low share prices to start rising again.
And surely the same rescue package also implies the British banks that they owe money to are also protected against the worst.
Perhaps it will take the international markets, and the traders that populate them, a little while yet to come to their senses, but on the face of it what we see now is a classic case of markets behaving irrationally.
While the international markets worry that Spain and Portugal might also need bail-outs, the fact is that Britain’s banks are not too exposed to institutions in the Iberian Peninsula.
