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Vince Cable: Warns That 'severe Economic Storms' Are On The Way

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http://www.independent.co.uk/news/uk/home-news/vince-cable-former-business-secretary-warns-that-severe-economic-storms-are-on-the-way-a6734006.html

Sir Vince Cable, the former Business Secretary and the only senior politician who sounded the alarm about the fragility of the UK economy in advance of the 2007-9 financial crisis, has warned of another looming ”reality check” for Britain.

Writing exclusively for The Independent Sir Vince, who dramatically lost his Twickenham parliamentary seat at the May general election, argues that the UK’s economic recovery is “precarious and unbalanced” and that a reckoning is coming.

Dismissing the “cheery self-confidence” of George Osborne and other ministers Sir Vince points to the UK’s still-elevated levels of household debt, double-digit house-price inflation and the growing risk of a financial earthquake emanating from China as reasons for serious concern.

Sir Vince’s concerns echo those of Lord Turner, the former chairman of the Financial Services Authority (FSA), who now also argues that the UK’s recovery is “dangerously unbalanced” due to excessive levels of household debt.

Sir Vince’s fears on house prices also find support from a recent report by analysts at the Swiss bank UBS, who last month put London at the top of their global real-estate “bubble index”.

The UK’s household debt to income is currently equivalent to around 145 per cent. But the Office for Budget Responsibility, the Treasury’s official forecaster, is projecting the ratio will shoot back up to the 170 per cent it reached on the eve of the financial crisis over the next five years. “Debt matters since it can have a depressive effect on the willingness to invest and on the willingness of consumers to spend,” explains Sir Vince.

The next crisis is only a matter of time.

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“Debt matters since it can have a depressive effect on the willingness to invest and on the willingness of consumers to spend,” explains Sir Vince.

Says the knight who helped the coalition government get the Help to Buy stuff introduced along with all the other stuff to get more and more people into massive debt.

They can't keep away from the wreckage they create all around them can they. Even Brown was on about keeping his extravagant tax credits just a couple of days ago.

Edited by billybong

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Even Brown was on about keeping his extravagant tax credits just a couple of days ago.

They may have distorted the (already grotesquely distorted) jobs market but at least most of the tax credits bumped up the disposable income of hard working strivers and then onwards to the real economy of pubs, restaurants, garages and other parts of the real economy.

Where does all the money from not collecting inheritance tax, corporation tax and paying out subsidies to rich people like IDS go?

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They may have distorted the (already grotesquely distorted) jobs market but at least most of the tax credits bumped up the disposable income of hard working strivers and then onwards to the real economy of pubs, restaurants, garages and other parts of the real economy.

Where does all the money from not collecting inheritance tax, corporation tax and paying out subsidies to rich people like IDS go?

It's the extravagant tax credits that are the problem, emphasis on the word extravagant - way beyond a supplement to help poor working people (a small smoothing adjustment returning money usually taken by income tax - and maybe a little bit more) which is how the iodea of tax credits was originally justified.

The IDS etc subsidies/benefits/scrounging issues etc are separate but important issues.

Edited by billybong

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Sir Vince’s fears on house prices also find support from a recent report by analysts at the Swiss bank UBS, who last month put London at the top of their global real-estate “bubble index”.[

Note that it took a Swiss bank to report the UK's top of the league house price bubble before Carney noticed a bubble.

What a waste of money.

Edited by billybong

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They may have distorted the (already grotesquely distorted) jobs market but at least most of the tax credits bumped up the disposable income of hard working strivers and then onwards to the real economy of pubs, restaurants, garages and other parts of the real economy.

No it did not. It bumped up the disposable income of the sub-section of hard working strivers who happen to have children, and is therefore monstrously unfair.

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Why am I reminded of an arsonist who returns to the scene of his crime to watch and revel in the unfolding chaos.

..ditto for the Brown Clown who attacks the firemen trying to put out the fire.... :rolleyes:

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and being a senior member of the coalition he effectively helped to implement the policies that he criticised. Mind you he got a knighthood and some would say for his cooperation.

People in his constituency clearly weren't impressed though.

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No it did not. It bumped up the disposable income of the sub-section of hard working strivers who happen to have children, and is therefore monstrously unfair.

Hardly unfair to stave off child poverty.

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