New LibDem revoke article 50 policy seems like a self-inflicted wound

It must have seemed like a good idea at the time but it seems to me that the new LibDem policy of revoking Article 50 is a self-inflicted wound.

From this point on, every interviewer will raise this when they talk to a senior LibDem.

The spokesperson will have to explain that the revoke policy only kicks in if the LibDems are in government. They will be forced to go on to point out that they have no chance of winning a general election. This will remind voters that by voting LibDem they are voting for the party whose realistic best hope is to come third.

The next question the interviewer will ask is whether the revoke policy would be a red line in the event that the LibDems are negotiating to be part of a coalition government.

The LibDem will then point out that they won't go into coalition with Corbyn or Johnson so the next question will be about whether that would apply if the Labour or Tory leader changed. Then we're back to the red line question.

If nothing else it will eat up the LibDem spokesperson's air time.

Arch Remainers will vote for the LibDems anyway. I really can't see how the revocation of Article 50 will help the LibDems woo many Labour or Tory Remainers. It's a step too far. Seems like student politics to me.

A vanilla Norway option would suit Boris just fine

The Telegraph are reporting tonight that Boris is considering plans for a regulatory border in the Irish Sea. Maybe this will end up being the deal he comes up with.

It's also reported that he's tearing up the restrictions on foreign students; letting them stay for two years after graduation.

Boris is also in favour of an amnesty for illegal migrants.

Any fair minded person would conclude that Boris's main concern in wanting to leave the EU was not  to end freedom of movement.

I think a vanilla Norway option would suit him just fine. In other words, leave the EU and join the EEA. Yes, the UK would be in the single market and freedom of movement would remain. On the plus side, the UK would be out of the customs union, out of the CAP and out of the CFP. It would also go a long way to solving the Irish backstop issue.

Personally, I think he could sell it to the public, especially if he combined it with making the benefits system more difficult for EU citizens to access. He could take steps without breaking any single market rules. One idea I came up with is to give all children National Insurance credits starting on their first day of secondary school. By the time they got to 18 they would have over 5 years of contributions. You'd then make the benefits system contingent on having 5 years worth of NI contributions or credits.

Whether it's even possible to join the EEA is the question. The UK never did give notice to leave it. Depending who you believe, that's because it wasn't necessary or someone in May's government thought they'd keep that door slightly ajar.

That general election could be a long time coming

Until recently, media commentators have been assuming that the next general election will be on Thursday 21 November or, perhaps, in early December.

That assumption is based on Corbyn stating that there will be an election after 31 October; once the EU departure date has been extended again.

On parliament's return from prorogation there will be a Johnson Queen's Speech which looks very likely to be voted down. There will then likely be a confidence vote in Johnson's government which is very likely to succeed.

Following a vote of no confidence which only requires a simple majority to pass, the FTPA (Fixed Term Parliament Act) then allows 14 days for an alternative government to be formed that can command the support of the House. If no such government can be formed, a general election follows.

Whether a new government can be formed is where it gets interesting. The third biggest party in parliament is the SNP with 35 seats. They're not concerned about a general election because, with the recent resignation of the popular Ruth Davidson, they think they'll do very well. On the other hand, Labour may be able to convince them to support a Corbyn administration with the promise of a Scottish independence referendum or the cancellation of Trident. It's not impossible to envisage them voting for a Corbyn government.

Next are the Lib Dems, currently with 17 seats but growing weekly it seems. They too are polling well and don't fear a general election. Swinson said that she wouldn't support a Corbyn led government. On the face of it, that seems unambiguous but circumstances change. The promise of a second referendum might persuade them. If all they needed to do was abstain on a Corbyn Queen's Speech this would suit them even better. They could argue that this didn't constitute active support. However, the numbers are so tight that it's doubtful that abstaining would be sufficient.

What I believe is very unlikely is that Corbyn would allow another Labour MP to be prime minister. Swinson touted the idea of Ken Clarke being caretaker PM. I suppose that's possible but I really don't see Corbyn going for that idea. It really is for the leader of the official opposition to try to form a government.

Any new government needs 320 votes for a majority. Labour (247), the SNP (35), the Lib Dems (17), Plaid (4) and the single Green total 304. That is tantalisingly close.

The 32 Independent MPs outnumber the Lib Dems. These are mostly Tories who have had the whip withdrawn. This group could be key.

Most of these Independent MPs would not support a Corbyn government that was trying to implement the full list of Labour's policies. On the other hand, they would not support a Johnson government either. In this respect they fall into the same camp as the Lib Dems but many are not keen on the idea of a general election because they fear losing their seats. Some of this group might be persuaded to abstain in order to allow for a Corbyn government.

Therefore it seems perfectly conceivable that we could have a Corbyn led government. It would be unable to implement many of its policies and it would be inherently unstable. However, if it concentrated on Brexit-related matters it could probably survive long enough for a second referendum to be held. Such a referendum would undoubtedly lead to the UK remaining in the EU because it would pit a "Brexit in name only" deal against Remain.

Already some Labour MPs are talking about precisely this scenario; a second referendum followed by an election in Spring 2020.

This puts even more pressure on Boris Johnson to conclude Brexit by 31 October.

Another Brexit extension looks likely

I'm struck by the number of comment pieces pointing out the difficulty that the opposition parties and pro-Remain Tory MPs will have in winning a vote of no confidence against Boris and installing a new government.

I agree with this.Winning a no confidence vote looks far from impossible but coming up with an alternative prime minister who can win a vote of confidence is quite another thing. The reasoning is pretty well rehearsed; Corbyn thinks he should be the alternative prime minister but he doesn't have the numbers.

The alternative for the Remainers is to seize control of the order paper and pass legislation forcing Boris to ask the EU for another extension to the Brexit date.

This is what the commentators seem to skirt over.

However, to me this looks a perfectly likely scenario. It has already been done once, back on 4 April, when the bill passed by 1 vote and the EU Withdrawal Act 2019 subsequently became law.

Since then, the arithmetic in the Commons has got worse for the government so why shouldn't Yvette Cooper and her friends pull off the same trick again?  The Speaker will obviously assist again in getting it done. There don't seem to be any impediments.

Obviously it would be a huge humiliation for Boris to be forced to ask the EU for an extension and it would be a major boost for the Brexit Party.

The question is though, what can Boris do to avoid it? Proroguing parliament would be a last resort. How about just ignoring any new Act?

The provisions of the previous Act were never tested because Theresa May decided she wanted an extension. As such, it's unclear if the Act managed to achieve its objectives.

However, presumably a future Bill has already been drafted, ready for the return of parliament in September. This Bill will, one imagines, be drafted much more carefully and Boris would find himself in contempt of court should he ignore it.

The other option is that parliament simply revokes Article 50. While this sounds simple in theory, I imagine many MPs would hesitate to vote for something that blatantly cancels the referendum result. Revoking Article 50 might, however, be incorporated into a new Bill forcing the government to ask for an extension. It could be made the consequence of the government refusing to ask for such an extension. I can imagine a lot of Remainer MPs voting for that.

Boris doesn't necessarily need a pact with the Brexit party

Following the Brecon and Radnorshire by-election there's a lot of comment about how Boris Johnson needs to have a pact with the Brexit party.

However, he's said that there's no chance of this and I expect the reason is that he and his strategists realise that it probably won't be necessary.

The opinion polls have changed markedly from the last election where the Tories and Labour got over 84% of the vote between them.

Under Theresa May we saw the birth of the Brexit party and the resurgence of the Lib Dems.

The Brexit party largely took votes from the Tories and the Lib Dems from Labour. Some polls were showing the four largest parties each polling in the region of 20% - 25%.

Since then, we've had a Boris bounce and as a result, Electoral Calculus shows the following vote share and seats. The Tories end up 15 seats short of a majority:

Party	Percentage	Seats
Conservative	29.7	311
Labour	25.4	224
Lib Dem	18.2	43
Brexit	14.6	0
Green	5.1	1
UKIP	0.8	0

However, because of the vagaries of First Past the Post, the Tories only need to rise a couple of percentage points for them to end up with a majority of 12. Note I've increased the share of both the  Brexit party and the Lib Dems compared with the figures above:

Party	Percentage	Seats
Conservative	32	331
Labour	25	210
Lib Dem	20	46
Brexit	17	7
Green	5	1
UKIP	1	0

If Boris could take just 3% extra from the Brexit party, he ends up with a majority of 82 and the Brexit party are wiped out in terms of seats:

Party	Percentage	Seats
Conservative	35	366
Labour	25	187
Lib Dem	20	41
Brexit	14	0
Green	5	1
UKIP	1	0

I imagine the strategy is, therefore, to do enough to take a few points from the Brexit party in order to reach that magic 35% figure and hope that the Lib Dems and Labour continue to split the broadly Remain vote such that Labour stay on 25%.

Some recent polls are already showing the Tories on 35%. Boris just needs to firm up that figure and hope that Labour and the Lib Dems continue to split their 45%. The Brexit party can keep their 14% with no need for any pact.

Ironically, the Brecon and Radnorshire by-election probably served to make some Brexit party voters think twice about voting for them in a general election for fear of handing the result to a Remain party.

Don't kid yourself, May's deal will get through

Ever since Theresa May came up with her permanent backstop, standstill EU Withdrawal Agreement, I've been wondering what on earth her game plan was.

What on earth was she thinking?

Surely, I thought, she must know that her proposal would never make it through parliament. For one thing, the DLP would never agree to it. Labour was committed to voting against it. The Tory Brexiteers were obviously dead against it and even Tory Remainers like Jo Johnson thought it was capitulation.

I've come up with a few theories and I think I've settled on one.

Misjudgement

My first theory was that she may have genuinely thought it was a reasonable deal and simply misjudged just how negative the reaction would be. Perhaps, I thought, the Maybot's code was on a read only chip and couldn't be reprogrammed.

For one thing, she clearly stopped listening to anyone much except Olly Robins quite some time ago. Add to this that she has always viewed Brexit through the eyes of a Remainer. This means that from day one it has been about damage limitation, not opportunity.

Influenced by her experience as Home Secretary and lack of imagination, she decided long ago that the Leave vote was all about reducing EU migration.

True to form, ever since the draft was published, she has continually tried to sell it to the masses on the basis of taking back control of our borders.

What the Heck

My second theory was that perhaps she'd decided that these Carthaginian terms were the best she could manage, time was running out and that she'd simply thought "What the heck" and gone for it anyway, knowing the chances of success were close to zero.

I tried, honestly

The more I thought about it, this shoulder shrugging nihilist approach didn't fit her personality and this evolved quickly into my third theory. Yes, she decided to go for it knowing it stood little chance of success but this was part of a necessary show.

The audience for this theatre was Barnier and the other leaders. She had to be seen to try her hardest and fail or she would get no concessions from the EU.

What concession was she looking for? That's pretty obvious I think. At a bare minimum there needs to be a get-out clause to the backstop. Who in their right mind signs a treaty with no means of escape? Even EU membership has Article 50 for heaven's sake.

What if no further concessions were forthcoming? That got me thinking back to what she apparently said to her back benchers after the disastrous general election. "I got us into this mess. I'll get us out of it".

Perhaps, I thought, if the EU wouldn't budge she'd sacrifice her leadership and let someone else have a go. A new PM would concentrate minds in Brussels, despite their bluster.

Through it goes

Then it dawned on me. All my previous theories were wrong because I had started from a false premise. May has game planned this thing. She knew the deal wouldn't get through the Commons as things stood but she also knew she would succeed with the help of, primarily, Labour MPs.

Ted Heath did the same thing in 1971 when he got the vote through for us to join the EEC. There's a fascinating Radio 4 programme about it by Ben Wright.

May's deal keeps us in the Customs Union, probably indefinitely. Only the European Court of Justice can let us out and they have no reason to do so. 

What is official Labour policy? Yup, indefinite membership of a customs union. Of course, Keir Starmer will say, he wants a customs union, one in which we get some kind of say, but everyone knows that this is wishful thinking.

Labour is therefore on the back foot, reduced to arguing about whether "customs union" should be preceded by the indefinite or definite article. Hardly worth dying in a ditch for.

Back in 1971, Heath, despite stating initially that there would be a three-line whip, allowed his MPs a free vote. This emboldened Labour MPs to rebel and it got through.

This time around the journey may be a little different but I suspect the destination will be the same. Perhaps on the first attempt both the Tories and Labour will be whipped and the government will lose.

Not so, however, when it is put to the Commons again. Corbyn or May or both will allow a free vote and May will have got her way. 

Turns out she can count after all.

Of course, in the days between the first and second attempt to get it through the Commons, the markets will dive, project fear will be ratcheted up to levels as yet unseen and this will give Labour MPs and Tory Remainer rebels the excuse they need to vote the deal through "in the national interest". 

The SNP could even join in the "country before party" humbug. The Lib Dems will fold like a pack of cards.

May then jumps or is pushed and any MP who was against the deal initially can happily blame her. 

She will have repaid the debt she owed the party for the disaster of the last election. She'll trot along to the Lords and from time to time she'll be invited onto the Today programme to pontificate.

She'll probably be replaced by a "unity" candidate; another Remainer in other words. Amber Rudd and Sajid Javid are the obvious front runners. Dominic Raab could be another option if the Brexiteers need someone who will wring their hands about how terrible the deal is.

All very depressing for a Brexiteer like myself.

The only realistic way out is if the Tories get rid of May before the vote goes through. I just don't see that the will is there though.

What I'm surprised by is how few commentators are saying the same as me. On the other hand, it doesn't make much of an ongoing story, does it?
@felixrandal

Woody Allen's best one liners

The Telegraph published 30 of Woody Allen's best one liners today, his 80th birthday.

I like these:

'There's an old joke . . . two elderly women are at a Catskill mountain resort, and one of 'em says "Boy, the food at this place is really terrible." The other one says, "Yeah, I know; and such small portions." Well, that's essentially how I feel about life.'

'Life is divided into the horrible and the miserable. That's the two categories. The horrible are like, I don't know, terminal cases, you know, and blind people, crippled. I don't know how they get through life. It's amazing to me. And the miserable is everyone else. So you should be thankful that you're miserable, because that's very lucky, to be miserable.'

'My one regret in life is that I am not someone else.'

Probably my favourite:
'I’m very proud of my gold pocket watch. My grandfather, on his deathbed, sold me this watch.'

Paying back the debt

OK, let's tell it how it is with us.
My wife and I both work full time. Our combined net income is about £4k pm. We have 2 primary school aged kids (state school) and employ a Polish au pair for £75 pw. This is inexpensive childcare let alone for a child minder, cleaner, clothes washer and ironer. We've no family nearby. In fact I have little family left, my father having died 10 years ago aged 60 and darling sister having passed away earlier this year at the ripe old age of 39. My mother and stepfather live in Australia. My wife's aged mother is 130 miles away. So, hired help is essential if we are both to work full time.
We earn too much for tax credits. My wife's a teacher and contributes 15% to her final salary pension plan in order to try to make up for the years she was working abroad and a stay at home mum. I contribute nothing to my employer's group personal pension; can't afford to. Our rent is £1k pm and 3.5 years ago that represented a 3.5% gross yield for the landlord. There has been no rent increase since then.
So, accommodation is about 25% of net income. We thought we'd be able to save each month but the reality has been that we are struggling to make ends meet. We have two modest cars with a combined value of about £4k. We both work very close to home and therefore spend on petrol is tiny. Yes, we go out for a meal once every week or two and pay for a few activities for our kids but we've been overdrawn the last couple of months and are again now.
So here we are. Within a few weeks we'll know more or less which school my eldest will be going to (11+ exam results) and it will be crunch time. We decided to stay renting until we knew about the secondary school situation.
Buying something suitable (has to be 4 beds) will cost us £400k, no doubt about it. That doesn't get a palace, far from it. The kind of house I feel I deserve (yes, I know this is arrogant, but that's what I feel) would be nearer £500k.
I have cashed in my inheritance and, combined with equity from our sale 3.5 years ago, it gives us a deposit of over 200k. It seems there are still mortgages available at 5% for 10 years. This works out at around £1,200 pm or 30% of net income. Being middle aged we can't expect big pay rises (far from it - mortgage protection insurance would be essential for me at least) and we know from experience with a £1k pm accommodation cost that we will struggle with this. Furthermore, we'll have no savings and the prospect of helping our kids through college etc.
Looking around me, my work colleagues don't exactly seem to be finding it easy either. One's wife has gone back to work part-time at a supermarket rather earlier than I'm sure she wanted to do with a 12 month old baby. The other is taking on a weekend job as a security guard. A friend who works in sales and has in the past always appeared to be doing just fine thank you seemed rather less blase about money the last time we met.
My wife wonders how everyone is managing to survive. The only response I can think of is that they didn't sell their houses 3.5 years ago! It's not a flippant comment. They will have low mortgages and equity to release. Most will be in their first house, having had a flat previously. I hope they are happy where they are though because moving up the chain will be horribly difficult.
Compare this to those in their mid-50s. Two people on decent incomes were able to move up the ladder far more easily it seems to me. At similar stages in their lives their children seem to me to be living in much more inferior accommodation.
To cut a rambling post short, I just can't see how these house prices can be sustained. Sure, there's still plenty of credit available but I can see a situation where people are trapped not by negative equity but by excessive debt. If the economy hiccups and/or confidence takes a dive then surely it all falls down.
On a personal note, it makes me wonder what the point is of us both working so hard only to constantly struggle to get by. If the Australian house market keels over soon I'll be very tempted to head out there (we already have the passports) where we can buy outright and then struggle like hell to find work in order to pay for the remaining living costs.

IVA companies take a hammering

At the start of this month I looked into buying shares in one or more of the companies dealing with personal insolvency and IVAs - Debt Free Direct and the like.

I'm glad I dithered. Their shares have taken a hammering recently:

Accuma, ACG, up 21% in the last year, down 12% in the last 2 days.
Cleardebt, CLEA, down 10% in the last year, down 17% in the last 2 days.
Debt Free Direct, DFD, up 182% in the last year, down 13% in the last 2 days.
Debt Matters, DEBT, up 172% in the last year, down 12% in the last 2 days.
Debts.co.uk, DETS, down 4% in the last year, down 11% in the last 2 days.

No real accounting for it. An article in the Indie says there's a two track market developing where corporate debt management stocks are outperforming personal debt.

It goes on to point out that Debt Matters was forced into issuing a statement saying it didn't know of any reason for the share price falls.

Could it be the market thinks the Great British Consumer might not get so badly burnt by debt after all, or is this just an example of how a bubble that formed in the share prices of these companies is bursting?

M4 Corridor an IVA Hotspot

So according to an article in the FT today, the credit rating agency Experian, the M4 corridor is a "major hotspot" for IVAs (Individual Voluntary Arrangements).

The thing is, it seems, the really poor have nothing to lose by going bankrupt so it's those to whom going bankrupt represents a significant social stigma who opt for the IVA route.

I live in the M4 corridor and I can't say it surprises me. I really can't see how a lot of people are managing to make ends meet while at the same time keeping up appearances.

I can think of a few reasons why the M4 corridor should be a hot spot. For a start, the area has plenty of decent jobs (especially in areas like IT and telecoms) and therefore attracts people both from other parts of the country and from overseas. People moving into an area from outside won't have local family support networks and therefore their cost of living is going to be higher. Of course, this area has high house prices, which adds to the burden. Finally, the IT and telecoms industries tend to be boom/bust so I can forsee a situation whereby the major bread winner loses their job.

Seems to me there's a credit crunch on its way.

What a difference 9 months makes

Back in January, I posted on how well Tony Blair had performed in the Commons. What a difference 9 months makes! This week he was well and truly trounced by David Cameron at Prime Minister's Questions. Still, Blair has dug a hole for himself by refusing to endorse Brown now after having done just that earlier in the year. Quite how he could hope to get away with this U-turn is beyond me.

As someone mentioned on the radio the other day though, it must be deeply galling to have pumped so much into the NHS over the last 9 years, only to have the Tories come out ahead of Labour in recent polls which seek to measure which party is trusted more with the health service.

As for Cameron, I don't have much time for the guy. As I heard that entertaining political duo Abbot and Portillo say on This Week last week, the shadow cabinet has something like 13 old Etonians in it, including Cameron himself. Furthermore, apparently, there are even more Etonians and their ilk working for Cameron as political advisors etc. Diane and Michael pointed out that an affable, self-deprecating manner was what distinguished the old Etonians from their peers and how, in meeting an old Etonian for the first time, it was easy to get sucked in by all this charm. This is what seems to be happening to the British public right now.

I had much more time for Cameron's predecessor, Michael Howard. He was a superb parliamentary performer and I think it's fair to say you knew where you were with him. As an ex-grammar school boy from less than affluent roots, I'm sure he doesn't have much time for the crowd who now dominate the Tory front bench.

Of course, Howard like the much derided Ming Campbell, had the great disadvantage of being an intellectual and the great British public has always hated intellectuals.

Why Felix Randal?

You know, I forgot to mention why this site is called Felix Randal. It's named after a poem written by one of my favourite poets, Gerard Manley Hopkins. Here it is:

FELIX RANDAL the farrier, O he is dead then? my duty all ended,
Who have watched his mould of man, big-boned and hardy-handsome
Pining, pining, till time when reason rambled in it and some
Fatal four disorders, fleshed there, all contended?

Sickness broke him. Impatient he cursed at first, but mended
Being anointed and all; though a heavenlier heart began some
Months earlier, since I had our sweet reprieve and ransom
Tendered to him. Ah well, God rest him all road ever he offended!

This seeing the sick endears them to us, us too it endears.
My tongue had taught thee comfort, touch had quenched thy tears,
Thy tears that touched my heart, child, Felix, poor Felix Randal;

How far from then forethought of, all thy more boisterous years,
When thou at the random grim forge, powerful amidst peers,
Didst fettle for the great grey drayhorse his bright and battering sandal!

I love that last line. It encapsulates Hopkins' style; all that alliteration and the sheer exhuberance shown in using "fettle" as a verb which must have been a pretty rare use of it even then.

Binsey Poplars is probably my favourite poem by Gerard Manley Hopkins. This is just superb. The line After-comers cannot guess the beauty been is one of those which pops into my head quite often. I suppose it's one of those oft thought but ne'er so well expressed type of phrases. Anyhow, here's the poem:

MY aspens dear, whose airy cages quelled,
Quelled or quenched in leaves the leaping sun,
All felled, felled, are all felled;
Of a fresh and following folded rank
Not spared, not one
That dandled a sandalled
Shadow that swam or sank
On meadow and river and wind-wandering weed-winding bank.

O if we but knew what we do
When we delve or hew—
Hack and rack the growing green!
Since country is so tender
To touch, her being só slender,
That, like this sleek and seeing ball
But a prick will make no eye at all,
Where we, even where we mean
To mend her we end her,
When we hew or delve:
After-comers cannot guess the beauty been.
Ten or twelve, only ten or twelve
Strokes of havoc únselve
The sweet especial scene,
Rural scene, a rural scene,
Sweet especial rural scene.

Why I think house prices will crash

I'm a bear when it comes to house prices. I was convinced back in 2003 that they were ripe for a correction, having risen enormously since around 1996, which happened to be when I bought.

So, my wife and I made a very brave (follhardy?) decision. In May 03 we sold our house, shoved the equity into a savings account and have been renting ever since. I'll come clean and say that I regret that decision now because house prices have continued their upward trajectory, all be it at a slower pace.

If I'd invested in a stock market tracker instead of opting for the savings account, I would have doubled my money. I certainly would have no regrets if I'd had the bottle to do that! The other plus side is that we have a bigger house in a better area on which the landlord makes all of 3.5% gross yield and we've been able to save the interest on our savings.

Now, of course, we've reached the stage where we want to buy back into the market but I for one am nervous about buying in at the top of one of the biggest asset price bubbles in history.

So why do I think that it still might all end in tears?

I don't think that interest rates are going to shoot up to 8% or 10% anytime soon. I believe the historical average is about 5% and that's where we're almost certainly going to be in a month's time. I believe that what will precipitate the fall will be the ever-increasing indebtedness that many people have got into and an end to the easy lending that has got us into this position.

A recent blog in the Grauniad blog by Ann Pettifor put some flesh on the bones of this. She quotes research done by Elizabeth Warren of Harvard University that shows that fully 75% of middle class America's family income is earmarked for recurrent monthly expenses; today's family has no margin for error....Their basic situation is far riskier than that of their parents a generation earlier. That phrase about the lack of margin for error echoed many articles I've read recently about the finances of many families.

A few days ago, some research by KDB really caught my eye. It shows that household disposable wealth in the UK has fallen significantly (outside of London) during the first half of the year. In the South-East, for example, it fell 14% and in Scotland it collapsed by 26%.

The Torygraph used this research as the basis for an article which points out that While house prices rose by 5pc from mid 2005 to mid 2006, this was dwarfed by a 15pc rise in mortgage advances ... Home equity extraction is now running at a staggering rate of £50bn a year... equivalent to 4pc of GDP, and all has to be repaid. The KDB findings are ominous, suggesting that household finances are even more stretched than previously thought.

This research confirms that here in the UK we're having to MEW ever deeper into what equity remains in our houses. I'm sure that many families' income is largely eaten up by essentials, just like in the USA.

Meanwhile, more and more people are defaulting on their unsecured loans which has led to the banks tightening their criteria for unsecured lending and having to continually raise their provision for bad debt. The debt spiral has also led to a whole bunch of companies like Debt Free Direct springing up in order to help those who are up to their eyeballs in debt "manage" it by the use of IVRs (Individual Voluntary Arrangements) and bankruptcy. The response has been an outcry from the banks and threats that they will tighten criteria further so as not to get caught out again. Whether these are just idle threats remains to be seen.

This is why I've come to the conclusion that it won't take an interest rate hike to say 8% to precipitate the credit crunch and a consequent house price crash. The fall in disposable wealth shows that many people must be accumulating debt even at current interest rates, ie, they are either carrying on spending or simply can't eat into their debt mountain. Compounding interest even at the current level could well be forcing equity withdrawal and unsecured borrowing.

This ever-increasing indebtedness must surely be what triggers the eventual correction.

A simple pleasure

A couple of pints on a Friday lunchtime is one simple pleasure that really cheers me up. You really can't beat it. That's because it's the end of the working week and your time is limited so you have to squeeze in as much enjoyment as possible. Of course, it also helps that a couple of pints on an empty stomach at the end of the morning has much more of an impact than those same two pints at 8pm.

So too, the conversation at the pub tends to be forward looking on a Friday lunchtime; the weekend is a few hours away and suddenly numerous options for a happier future exist.

That's escapism, eh?

Tony Blair on Good Form

Tony Blair was on good form yesterday, I must say. Sir Menzies Campbell managed to ask a particularly daft question for someone in his position as acting leader of the Liberal Democrats. He questioned the Prime Minister about the high number of temporary headteachers in schools. That was a gift for someone with Blair's consumate skill as a parliamentary performer. Yes it was difficult, he quipped, to find permanent leaders for organisations, especially "failing ones".

Simon Hughes was next. Tomorrow he's likely to announce that he'll be running for the Lib Dem leadership. He asked a question about the NHS but Blair pounced on his apparent agreement with Labour policy. "If", he replied, "he is going to start backing our reforms I am going to start backing him rather than the other one". Blair was referring to Mark Oaten, the other already-declared contender. He then asked out loud "Where's the other one?" - a real case of Blair wanting to take on all-comers.

At one point he posed the question of how many other Lib Dem careers he could "sacrifice" in the same day!

I'm pretty sick of Blair but there's no doubt about it, he's a superb public speaker; the best I've seen. On Tuesday, he was on News Night defending his anti-social behaviour policies in front of an audience drawn from people who live on an estate in Swindon. He was calm and persuasive. I really can't think of another world leader who would agree to defending his policies in this kind of forum or who could pull it off, but Blair seems to revel in it.

I thought his speech at the last Labour party conference was stunning too. He has a good sense of humour and can be self-deprecating; that takes real confidence.As I say, I'm tired of his policies but as a political performer he has no equal.

The only thing that really irritates me, apart from the pregnant pauses, is his use of the glottal stop as a means of trying to appeal to the "man in the street". This doesn't give him the common touch, it is simply condescending to his audience.

Why did I start a blog?

I contribute to various discussion boards anyway so why start a blog of my own? I believe it's egotistical to start a blog and this has put me off starting one till now.

In the end, I suppose I've admitted to myself that yes, this is egotistical but what the heck! Nobody is being forced to read this after all.

I think this blog will contain, in the most part, diary type entries containing my opinions. I could though end up using it as an aide memoir. Who knows?