National Debt - The New Sub-Prime?

If sub-prime mortgages in the US really did cause the Credit Crunch then perhaps National Debt will be the cause of the next Crunch.

Newsnight featured a piece on it last night and the subsequent discussion saw Will Hudson of Workgroup defending Government policy saying there was a clear pathway to cutting £100bn off the budget deficit. He seems to know a lot more than others, possibly the Government itself as today Peter Mandelson, fresh from giving us an extra Bank Holiday to celebrate the Queen's reign (how appropriate but which Queen?) is moving to allay market fears that Britain really knows what they are doing about cutting the deficit.

One thing is clear, it is no longer simply a matter of economics. There is plenty of techno-speak on what it's all about but it boils down to politics and the stomach of the British people to fund the deficit. The politics is all about the approach to tackling the deficit - current Government thinking is no better than to continue spending and hope for growth, making a few cuts and raising taxes after the election so as not to spook people. Conservatives seem to be lost in a parallel universe where they seem to have the same recipe but different ingredients. The Lib Dems - yes, well they always seem to be a bit lost on such matters.

What it boils down to is this - there are going to have to be drastic spending cuts and these will need to be deeper and more harsh the longer we leave it and we will be paying considerably more tax in the future. The people of Iceland just voted with great drama about how they feel on paying for the mistakes of their banks in allowing deposits from foreigners to burn elsewhere, there could be a time when the British voter wakes up and smells the whiff of bull enough to know that we are being fleeced for huge economic hubris.

The point being, should we slither down this pathway then Britain will almost certainly look like, if not become, a bad debt risk in the eyes of the markets. There is a view, expressed last night, that the Government may even flirt with being a bad risk before galvanising to do something about it all - like being put on a watchlist as many other nations are now. The reality is that many nations, some richer than others, are now showing warning signs that their ability to service their national debt is worsening. Britain is not yet one of those nations but as the Quantitative Easing is due to exhaust soon, our National Debt will become the focus of the open markets and at that point we will get the first clear indication of how others see our true economic condition.

I think we are in for a rude surprise.

Breach of National Security

Labour MP, Sir Stuart Bell, is on the warpath. In the wake of revelations that Jaqui Smith's husband claimed for viewing two porn films, Sir Stuart asserts that all 650 MPs' expense receipts have been put 'up for sale' and are valued at several hundreds of thousands of pounds as the interest of nosy voters rise amid the recent revelations.

In an interview on BBC's Newsnight, Sir Stuart, who sits on the Speakers Commons Estimates Committee, showed bold determination to keep facts of MPs' expenses away from public viewing. 'All of the receipts of 650-odd MPs', redacted or un-redacted, are for sale for around £300,000, so I am told,' he said. 'The price is going up because of the public interest.'

Bold Response

In a fit of pique over the fact that Jaqui Smith has claimed over £100,000 of allowances for a second home which happens to be her main family home, the fact that she pays her husband to watch films as part of her retinue and that the same 'working' husband watched porn films at that, PM Gordon Brown has boldly suggested that MPs' allowances for second homes should be scrapped.

It is alleged that an audible gasp and massive of slapping of a forehead was heard in London, followed by a prolonged sigh sounding like 'D'oh!'. The noise is believed to have come from Tony Blair's mansion somewhere near Sloane Square and nowhere near the Middle East.

It will be a move pretty unpopular with most MPs, particularly the army of Labour MPs who avidly claim expenses on second homes while having their first home less than 14 miles from Westminster. Sadly, for those whose constituencies are beyond a radius the length of London to Watford Gap are going to be seriously out of pocket. But it is envisaged they could make up the difference in allowance by pretending to cycle their bicycles each day but actually take first class on the train.

I am sure that has never been done before.

National Security At Risk

When asked who was selling the information, Sir Stuart was at the edge of his seat with excitement. 'We have a pretty good of not the person, but the source, and that is the subject of a House of Commons Investigation,' said Sir Stuart. 'It's probably a breach of the Official Secrets Act, it may be theft, but we will get to the bottom of it. In the public interest by the way.'

My sources tell me that the Justice Minister may step in and use special powers to stop details of MPs' expenses reaching the public eyes as National Security may be breached. The fact the public would actually want to know such details of what sort of freebies MPs are snorting in the trough for are full reason that we might divulge which fine wines an MP might have had while watching 'Debbie does Dallas' when they should have been casting a vote on the 42 day Detention Bill.

It is also believed that the details of MPs' favourite hotels and swimming pools may be known risking their travel schedules when visiting Brazil and sampling their local 'playful and colourful' back street culture.

Rising Cost of Politicians

The cost of the second home allowance as a bill to the public rose 6% last year, while it has been found by some committee that MPs should get a pay rise of 2.3% this year - Brown has vetoed any of his ministers getting a rise in a fit of rage at the embarrassing revelations and the fact they will get it all back in increases in spending on expenses anyway.

Of course, nobody would want to know why on the PM's recent trip to save the world that he and his team having called in to address some of the largest economies of the world that they then chose to go and see Brazil and Chile on the way back. Perhaps there were some good 'restaurants and clubs' there that Peter Mandelson knew or some special offers on Scotch Whisky at their duty frees.

MPs' Expenses are the thin edge of the wedge. Jaqui Smith is being supported by the PM even though she claimed £116,000 by designating a room in her sister's house as her primary residence so that she could claim her family home many miles away was her second home. Employment Minister Tony McNulty shows particular disdain in claiming that his second home is his parents' house just 11 miles from his apartment in Westminster.

Perhaps he should be thankful he is still in employment let alone the minister for it.

Personally, I think it would be £300,000 of bail out money very well spent if the entire 650 MPs' expense receipts came into the public domain so that we could see just what the hell we are getting for our money and how it is being abused. As for national security, that is a comment worthy of Jack Straw or Alistair Campbell. It's laughable - perhaps MPs have been downloading plagiarised documents off the web and paying via PayPal in order to convince us all that we should be fighting wars and bailing out banks.

Then we should open the lid on Assembly Members, Local Councillors, Civil Servants and the vast array of other Public Department workers who have the life of Riley, guaranteed pensions and some of the least required jobs in Britain.

I am sure we would save a great deal of money.