Kate Thick: Amid all the debt, let's give some people the credit they deserve

Journal columnist Kate Thick wades through the trillions we collectively owe and decides her own finances aren't worth worrying too much about

Owen Humphreys/PA Wire

I despair at myself sometimes.

Gloom descended last Friday when the bank statement plonked through the mailbox so I rushed off to deposit my weekly earning.

The friendly staff at the bank in Morpeth politely glossed over my inability to correctly total the proffered cheques and cash. That done, I headed down the street to buy The Economist. Why, you might ask, do I assiduously read a publication for the fiscally literate? Great journalism is my answer and I learn a lot, the bits I can understand anyway. The young lady at checkout directed me to a talking machine where I scan the magazine and shove money into a slot.

Many lower-paid jobs are being swept on to the labour scrapheap because of automation. A report last year claimed that computers and robots are set to replace more than a third of UK jobs in the next 20 years. The young lady in the shop was rightly unmoved by this piece of fairly useless information.

Anyway, the latest edition of The Economist listed the fines European and American banks have paid out over the last five years due to misdemeanours such as payment-protection insurance (PPI), tax evasion, and currency and interest rate manipulation. The PPI debacle alone will have cost banks a staggering $43bn by the end of 2016. Why do I feel smug?

The other thing that The Economist told me is that global debt has risen by $57 trillion since 2007. My overdraft is less than peanuts. More smugness. The UK is in the middle of the global indebtedness league. We have a flickering economic recovery saddled with mind-boggling debt. Apparently, the key to bringing down a high debt ratio is rapid economic growth, but public-sector austerity in developed economies is proving to be a fly in the ointment, as is stagnant or shrinking workforces. So we had better unplug the robots.

Any discrepancy between income and expenditure makes me toss and turn, so how does our Chancellor sleep at night? At least be honest about it and who is paying for its consequences. Maybe all the world’s computers could simultaneously hit the delete button or it could be converted into a credit for implementing the UN sustainable development goals?

The Institute for Fiscal Studies predicts Britain’s political parties will face heavy pressure to raise taxes to balance the budget after May’s election, and it says that the Coalition’s fiscal plans for the next Parliament imply the largest dose of austerity anywhere in the developed world. Labour and the Liberal Democrats have laid out fiscal targets which, they claim, would enable them to impose considerably less.

The IFS noted that we have seen the longest and deepest period of consecutive cuts to public service spending per head since the Second World War. The Centre for Welfare Reform calculates that people with disabilities have been hit nine times harder than the rest of the population by austerity; those with severe disabilities 19 times harder. Doubt they sleep well.

I wonder what The Economist will have to say about Ed Miliband’s pronouncement that a Labour government would demand UK tax havens be put on an international blacklist unless they end their system of secrecy. A coordinated international effort to revise tax rules has so far been snail-like. G20 leaders committed last year to a new standard that requires multinationals to give national governments detailed information about their tax affairs, but not until 2017.

Oxfam has been calling for a world tax summit in 2015, for a discussion between all countries, rich and poor, and for a permanent body to set and arbitrate fairer international tax rules. Rather extraordinary it is a charity that has to do this.

My final stop in Morpeth was a supplier of independent living equipment to the NHS and the public. I was looking for shoes for a woman I am treating who suffered a stroke several years ago.

The gentleman there explained the options and handed a pair to me. “Let her try them”, he said. Do you want a deposit or my phone number I enquired. “No”, he replied and, on seeing my surprise, he smiled and added, “It’s how we work here”. I know pure gold when I see it. A wee debt I can cope with.


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