The Last Ditch by Tom Paine

FT.com / Columnists / Luke Johnson – Why I have signed up to political change.

Business in Britain has played along with Labour. It has had little choice as more and more of the economy came under state control. Many businesses developed a strategy of "liberating" as much money as they could from the Treasury by selling the Simple Shopper (© Wat Tyler) goods and services. But the love affair (if such an abusive relationship can be characterised as such) is over.

Luke Johnson's piece in the FT yesterday is damning:

It is hard to comprehend how
much damage Labour has done to our economic prospects … The
most damning statistic is the following: the state’s percentage of
gross domestic product in Britain has risen from about 38 per cent in
1997 to perhaps 52 per cent today. Funding this vast amount of public
largesse means the UK borrows 25 per cent of all its state spending.
Clearly the country is living beyond its means.

We bloggers have been saying so for a while, Luke. We have also been saying this;

This expenditure is significantly funded by foreign buyers of UK
government bonds. They can see that this deficit is unsustainable.
Sterling’s weakness on foreign exchanges in the past 24 months testifies
to international concerns about our economic prospects. If investors
are not convinced that serious austerity measures are in train, then
they will demand a higher coupon on any British debt they buy. And the
one thing Britain cannot afford is higher interest rates.

The UK
has huge amounts of debt: household, corporate and government – much of
it floating. Only ultra-low interest rates are keeping the economy
alive. If base rates were to rise from the current 0.5 per cent to still
modest levels of 4 per cent, then consumer spending would plummet and
thousands more companies go bust. Unemployment would soar and tax
receipts would drop sharply. We would enter a severe, second recession,
and living standards as a whole would fall.

Finally, we have also been saying this (and have been called wingnuts for our trouble):

Labour is an
entirely fraudulent organisation that pretends to believe in business,
then buries it in bureaucracy and tax. Five more years of Gordon Brown
would leave Britain an economic wasteland.

If it hasn't already, dear chap. So business has caught up with the blogosphere. About time too.