There is an article in the Guardian to the effect that companies must stop hoarding cash and start investing if Britain is to fulfil its vision.
There is a basic misunderstanding here. The intention of the Conservatives in the government coalition is not to enable Britain to prosper but to enable their cronies to prosper.
By putting the squeeze on those without capital, some people go to the wall while others become desperate and accept bad deals – and the cronies gather the rich pickings.
We in Britain are living in the second version of the Enclosure Acts that kicked people off commonly own land in earlier centuries.
Starting in the 1970s, a whole generation of working people who were living in local authority housing were offered the right to buy their rented properties at discounted prices to reflect the rents they had paid over the years.
Money In The House
That created a pseudo middle class. I say that because the defining difference between the working class and the middle class is that the middle class have money in the bank – a cushion against next week’s bills.
Suddenly, the pseudo middle class had capital – it was just that it was locked up in the value of their properties. So to unlock it, they borrowed.
At first they could not borrow from the banks or Building Societies because the rules of these institutions forbad lending unless it was for home improvements. So there was a flurry of borrowing for kitchen extensions, and new rooms in the loft – anything that would allow people to borrow.
And all the time they could tell themselves that they were investing in their own properties that were rising in value.
Then the lenders loosened their rules, and the credit card companies loosened their rules too – after all, if things went bad there was value locked up in the borrower’s property.
And if things got really tight and the credit card was mounting – sell the house and buy a better one. Borrow a bit more on the mortgage and pay off the credit card and start the whole cycle again.
All of which worked until properties priced themselves out of the market. Suddenly, a generation later the youngsters could not afford to buy a house. Prices were too high.
No More Social Housing
Meanwhile, the local authorities had been told not only to sell their housing stock to the sitting tenants but to also sell their remaining stock to housing associations and to stop building housing.
Now the conservatives want to change the security of tenure rules for tenants. Instead of knowing that you had a house for life – as was the case with local authority housing – tenants will only have security for five years. After that, their landlord can kick them out.
Who can raise a family with that hanging over their heads?
So the whole thing has played out over the last forty years to create a new serf class out of the tenants who in 1970 thought they had struck gold.
Some have had to sell their houses – and the private landlords have snapped them up to rent out to those same people or the next generation.
It couldn’t have worked out better for the Conservatives if they had planned it right from the start.