There is yet more evidence today that Theresa May called an election just before the economy really begins to settle down for tough times. As the Observer notes this morning:
The number of individuals applying for insolvency jumped to the highest level in almost three years in the first three months of 2017, in a further sign of the mounting financial pressure facing UK households.
Personal insolvencies in England and Wales totalled 24,531 between January and March, up 6.7% on the previous quarter and 15.7% higher than the same period a year earlier.
Thus trend can only get worse. As I have noted in the last couple of weeks, pay increases are now falling behind inflation and there are signs that the availability of consumer credit is falling. Increasingly ends will not meet and people will be facing bankruptcy. Brexit will impose a very high human cost.
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I think you’re mistaken that this is a portent of doom. The increase is down to a rise in IVAs, and over the last year or two it has become easier to get one with the bottom offer now being as low as £60/month and quite a few ahem ‘factory practitioners’ appearing in this sector. In addition some companies providing informal debt management plans have been pulling out and when their clients are reassessed and being transferred from the informal sector onto an IVA.
What colour gloss is your favourite?
The data is a sum of three elements : IVAs , Debt Relief Orders and Bankruptcy orders. The last two of these are broadly flat. The rate of company liquidations recorded separately are also broadly flat. The figures do not show those on Debt Management Plans. So the rise in the headline number being down to an increase in IVAs is not in doubt.
So why should IVAs have been rising when the others have not?
There’s some information here
https://www.fca.org.uk/news/news-stories/helping-consumers-debt-management-plans
which shows people coming off Debt Management Plans. They have likely been switching to another option i.e. an IVA.
I’d believe your spin if it was true company arrangements were flat: they’re not. They’re increasing but not by as much (4.5%)
And does it matter? Insolvency is rising and that has a real human cost
That was my point
I have to concede on company insolvencies – the underlying numbers have increased in the last year by around 5% give or take.
What’s interesting is that company incorporations have been increasing dramatically at around 5-6% a year give or take:
https://www.gov.uk/government/publications/incorporated-companies-in-the-uk-january-to-march-2017/incorporated-companies-in-the-uk-january-to-march-2017
You’d expect those increased numbers to feed into the company insolvency numbers at some point.
I still worry that the credit issue will be ‘solved’ somehow just like the mortgage backed securities issue was solved when all the best mortgages were used up – by stupidity.
And as I’ve said elsewhere, the Tories will blame the BREXIT economy on EU ‘intransigence’ and the State thus enabling them to justify demolishing it even further. That to me is totally in tune with their idiotology.
If May becomes a liability I am sure the plan will be to parachute Osbourne in mid term to calm the markets. After all, all that time spent on the speech circuit must have bolstered his fantastic reputation.
The most I am wishing for after June 8th is a reduced majority to be honest and that somehow the Tories get it wrong. This is based on the notion that people expected an election in 2020 and were just as surprised to see a GE being called this June so maybe (just maybe) they may be less resigned to seeing the Tories in to 2020 and may wish to see them out now?
A long shot I know Richard especially given how when people are asked how they will vote on TV you hear them say ‘strong and stable’ in their answer.
Are you looking for property yet in Eire?
I’m here for the long term.
Soft term may be something else….
Please to hear that Richard – very pleased.
Ceratainly the Tories will use Brexit for their Shock Doctrine policies. Naomi Klein’s book which I read in 3 days after I finished my masters degree has been a huge influence on my political views. Many policies can be viewed through the prism of her book.
The thing that worries me most is blame.
The ‘Hard Brexit’ is already happening, all around us, and we’re trying far too hard not to notice.
It can only get worse: and I want to be elsewhere when some out-group is targeted in the mass media for blame.
Labour need to keep the focus On the Tory policies and they should be pointing out that leaving the EU gives us GREATER fiscal flexibility and by not using this the Tories are TWICE culpable (once for not doing it under Maastricht and twice for not doing once we’re out of Maastricht). The resources are there to create housing, social care jobs, infrastructure spending, green energy and 100’s of thousands of jobs can be created. I agree with Nile that the ‘hard brexit’ has been happening anyway and is happening now in terms of Government fiscal attitude.
As somebody on benefits I expect another round of being turned into a spitoon for the country’s ailments. I try talking to people about how wrong this is but it’s like a scene out of a zombie movie. The 30% doing ok (so far) will carry the day. let’s hoist the ‘I’m-alright Union Jack.’ for another serotonin reuptake inhibitor effect.
When you say Brexit will have a human cost, I’d be interested in your views on what Varoufakis has had to say in a recent book about dealing with the EU and the hardship it has put on the Greek people.
Does the EU really give a monkeys about the wellbeing of people? He would say ‘no’.
I’m no particular fan of Varoufakis but his account is alarming.
I think we have to separate the EU and the European Central Bank
Interesting notion but how would you propose to conduct the surgery? The EU and its institutions are bound together by the connective tissue of treaty and regulation.
If you have the solution, then various forms of Brexit: hard, soft, deferred, illusory all become thinkable.
You may find they are
That’s utterly absurd Richard and a case of indulging in bizarre abstraction, as well as admitting that the EU is basically schizoid as if a liberal well-meaning part of it is disconnected from its monetary operations.
If that were so we would here people like Junker, Schulz, Tusk, Mogherini offering a critique of the operations of the ECB and encouraging reform of it. I’ve never come across this from any of them but please correct me if I’m wrong. We don’t think of the Central Bank of any other country as being separate from any other part of Government except in an artificial sense which belies the actual operations it carries out with the treasury.
This sounds like another dodgy attempt to keep a myth going: that exists an EU that is different from the one that exists, and is not really monetarist and austerian.
Another sentimental fantasy that needs to be ditched: This is a type of belief in Platonic forms so that you can assert that the EU is not really the EU but an EU that inhabits the clouds and heavenly world of ‘ideal forms’ and has nothing to do with anything happening in the EU.
With respect Simon, they are detached and are set up in exactly that way
It may be a farce that could be reversed
But it’s real whilst it lasts
And it’s lasting
How? The ECB is an institution of the EU, just like the Commission, Parliament etc.
Not quite
It has to be seen as having a mind of its own, rather like the Bank of England does
Is it under any control bar that of bankers? I think that a question worth asking
Yet Varoufakis is reported in the papers this weekend as advising May not to negotiate with the EU. He didn’t see a distinction. He has real experience.
And in any case, even if the ECB is distinct from the EU, are you saying that it is the ECB which are the heartless so-and-sos, and the EU is somehow different. Really?
Yes I can make that distinction to some degree
Only to some degree
But I think it possible
If I recall correctly, Richard, you have said that the Bank of England doesn’t really have a mind of its own and so can’t be disassociated from government. Are you also saying that the ECB does have a mind of its own so can be disassociated from government.
This is jolly good as what to the untrained eye might seem contradictory and opportunistic arguments both support your cause. Just in case anyone asks, how has the ECB managed what the BofE cannot?
There is nothing contradictory at all in what I have said
I made clear both have the pretence of independence ad that game is played to good effect
And both could be brought under control
And neither is right now
The only person peddling untruths is you
You may find they are
Well, that’s a tantalising reply but it doesn’t get me closer to your alluring contention that the EU and the ECB can be separated.
The EU Court of Auditors can be said to “have a mind of its own” since it hasn’t signed off on the Commission’s accounts for a quarter of a century but it has no life outside the EU and I should have thought that the same holds for the ECB.
Or is there a mechanism available somewhere?
My view is that the best way to deal with the ECB is to get rid of the Euro. All members should renounce it. It was a step too far.
Once it has gone, the ECB’s power base is gone too and then it can advise on other matters.
But as I’ve said elsewhere, if the membership of the EU is too compliant because it ideologically aligned, things will stay as they are.
There has to be a will to challenge the ECB like there has to the will for British progressive parties to work together to stop the Tories debasing the country.
Gt rid of the Euro? Back to the Lira (10,000lire for an ice cream; several tens of million for a motor car?)and the Franc and Deutschmark – and drachma. The mind boggles at the unutterable complexity of the process of re-creating chaos. Each country decides to have its own currency? Bedlam. The Euro may have its problems, but the alternative – each for his/her own.