Week 49 2013

Tendring Topics………on Line

‘The signal fires of warning, they blaze, but none regard, And    so, through night to morning, the earth runs ruin-ward!’

          These lines, in a poem by A.E.Housman (1856 – 1936) seem strangely prophetic today. In recent months we have seen bush fires burning beyond control in an even-hotter-than-usual Australian summer; unseasonal snow storms in South Dakota burying, and killing, thousands of cattle in deep drifts; hurricanes devastating huge swathes of America’s mid-west in a month usually reckoned to be hurricane-free, and the most powerful cyclone ever recorded killing tens of thousands of men, women and children and rendering hundreds of thousands homeless in the Philippines. Even in the equable British Isles, normally free of the extreme weather conditions experienced in other less favoured parts of the world, we have had hurricane strength winds uprooting trees, damaging buildings and causing loss of life.

            These weather conditions came hot on the heels of the most serious and urgent warning yet from the world’s leading scientists that planet Earth is facing catastrophic climate change largely as a result of humankind’s own selfish activities.  There is urgent need to reduce and ultimately end the production of energy by the use of fossil fuels.  Their burning is one of principal sources of the greenhouse gases in the earth’s atmosphere that are producing these disastrous weather phenomena.

            It wouldn’t be true to say that ‘none regard’ the warning signs of the ruin that the world is facing.  Some people take it very seriously indeed and even top politicians like to go through the motions of taking it seriously when they think there may be a few votes in it.   Remember David Cameron’s slogan at the time of the last General Election – ‘If you want green then vote blue!’ or words to that effect.  The government even took some steps in the right direction – encouraging the development of wind farms, subsidising the insulation of homes and the installation of new energy-saving boilers.  I took advantage of the scheme to have my roof space thoroughly insulated – and have felt the benefit of it.  To finance these schemes they took a relatively small portion of the profits of the energy companies.

            But, of course, energy companies – like all private firms – do not exist for the benefit of their customers but for that of their shareholders. They mustn’t be allowed to suffer.  ‘Healthy competition’ is supposed to be one of the great benefits of the free market economy.  It keeps prices down – so they say.  Strangely enough, despite free competition and the Prime Minister’s urging that we should all ‘shop around for the best tariff’ all the energy suppliers raise them by about the same amount within a period of months.  Now they are claiming that the high prices are largely the result of those ‘green taxes’ and the Prime Minister is talking about ‘rolling them back’, abandoning the grants and limiting the development of wind-farms and other sources of green energy.

            Blog readers are, I am sure, in no doubt about where I stand on this issue.  I believe very strongly that catastrophic climatic change is taking place, and that its progress is accelerating largely as a consequence of human activity.  A first responsibility of every government in the world should be to attempt to slow down and reverse that process.  You don’t have to believe me.  I am a very old man with – some may think – failing faculties and too vivid an imagination!   Below is an extract from an email received from a regular correspondent, a successful business man, who is even angrier than I am.  So he should be.  He is over thirty years younger than me.   Thanks to my age I am unlikely to experience the worst results of the folly and short-sightedness of the governments of the world (politicians rarely manage to see beyond the next election!) but he may  have to endure years of it!

This government just continues to get worse and worse. They are now considering dropping their Green commitment in order to reduce energy bills. I see Australia has voted in a right wing government and already announced plans to do just that. Every time I hear of an environmental disaster in the USA or Australia - and there have been plenty - I feel it serves them right and that actually many more are needed for them to wake up and respond accordingly.  But despite the hardships to some, as long as the good times roll on for the many, they just don't care.   That actually is the problem with democracy, decisions reflect the selfishness of the majority.

The arrogant dismissal of scientific evidence by Ministers who know very little about anything is breathtaking. You will see on the BBC News web site that less than a quarter of the marine conservation areas proposed by the Government's own scientists have been agreed by ministers who said that the "scientific evidence just doesn't stack up" - presumably words fed to them by the fishing lobby. They have the same attitude with recommendations to tax fizzy drinks and use the money to subsidise school meals, to introduce a minimum price for alcohol and removing cigarette displays in shops. In each case the scientific advice given to the Government has been cautious and considered, and made by experts who have no financial investment in their recommendations, but the Government prefers to believe "industry representatives" who are following in the path of the smoking lobby, and have a massive financial investment in stopping any change.

A Nation in Debt!

National economic recovery is on the way. Politicians are cautiously optimistic.  Unemployment has dropped to 7.6 percent and the Governor of the Bank of England has said that he will consider raising interest rates if and when this figure falls to 7 percent.   This, I heard a financial expert declare on tv, would be bad news for ‘home owners’.

I am a home owner and I can assert unequivocally that that is nonsense.  My mortgage was long ago paid off and the deeds of my bungalow are in the strong room of my solicitor, not in that of the Building Society that long ago had lent my wife and I the money to buy our home.  I now have money invested in that building society.  Year by year, as inflation has increased and interest rates remained frozen, that money has steadily lost its value.  I and other ‘savers’ have been helping to fund the loans of the home buyers encouraged by the government to ‘get their feet on the property ladder’  If interest rates go up there is a chance that those savings will hold their value – perhaps even increase it.  For debt-free home owners and savers like me an increased interest rate would be very good  news indeed.

For home buyers (I think it is a cruel deception, encouraging a false sense of security, to refer to them as ‘home owners’) the situation is very different.   Interest repayment rates are at an all-time low but, to discourage irresponsible debts, banks and building societies have been insisting on deposits of as much as 25 percent of the purchase price before making a mortgage loan.  The government is giving would-be home buyers a further loan (of our money!) to bring that deposit down to as little as five percent.

The result is that working couples are buying houses with borrowed money that needs the combined wages of both partners to service the repayments.  The loss or reduction of income of either partner, or an increase in the interest rates resulting in higher repayments, could spell disaster.  David Cameron has painted a glowing picture of the pride and satisfaction of the house-buyer holding, for the first time, the key of his own home!   He omitted to mention that it wouldn’t actually be ‘his own’ until he has made that final mortgage payment.  Nor did he dwell on the shame, disappointment and despair that house-buyer will feel if, due to circumstances beyond his control, he is unable to keep up his mortgage payments and is made homeless.

You think it couldn’t happen?   That same ‘expert’ who said that an increase in interest rates would be bad news for home owners, went on to say that an increase of just one percent in the interest rate would result in 30,000 families, who had imagined they owned their homes, becoming homeless.  A report of the Centre for Social Justice says that nearly four million British families do not have enough savings to cover their rent or mortgage for more than a month, and that 26,000 UK households have been rendered homeless in the past five years as a result of rent or mortgage arrears, more than 5,000 of them during the past twelve months.

Mortgage debt is by no means the only debt burden that many of we Brits are bearing.   The Centre for Social Justice says that ‘average household debt, now stands at £54,000’, nearly twice the level of that same average just ten years ago.  That £54,000 is ‘the average debt’.   Since there must be quite a few who like me have no debts whatsoever there must be a very great number of households who owe considerable more than that!   The Centre’s report says that poor people are bearing the brunt of a ‘perfect storm’ of rising living costs, falling real wages, low savings and expensive credit. Households with total incomes in the lowest ten percent of the population have average debts greater than four times their annual income, with average debt repayments amounting to nearly half their gross monthly income. I think it likely that this Christmas – thanks to credit cards, store cards and payday loans – that burden of individual debt, already at an all-time high, will increase dramatically!

 The UK’s economic recovery is surely an empty triumph if it results in our country becoming a land of debtors.  Wasn’t it the late Lady Thatcher who famously claimed that there was ‘no such thing as society’ and declared that it was individuals and families who really matter?  How strange that Lady Thatcher’s political heirs should have managed, so it seems, to set the country (Society?) on the path to economic recovery - but at the cost of getting millions of individuals and families into unmanageable debt!