This isn't new (mostly) so why the big surprise?

I'm not that old you know.

Just twenty years ago I was 21. At 21 I was doing OK but most of the folk around me weren't and they didn't really know why. They had just carried on doing what they had always done and relying on unions etc to look after them and, suddenly, they found themselves out of work with few, if any transferable skills. The unions had let them down and the government weren't prepared to step in to protect them. For some that left school 30 or even 50 years earlier it was devastating. Their savings, their pensions, to some extent their lives were all gone and they were powerless to do anything about it. When you saw them queue for money (us Brits like a queue) they looked a bit in shock about it all.

Others of course adapted. There was a living to made out of doing nothing. It was a full time job. Claiming rent for addresses you had never lived at, proving to a doctor that you were psychologically unfit to work, claiming clothing allowances for fictitious interviews and making sure that you didn't get caught as you snuck out the back door into a van to work on the roads without the benefit spies catching you. Much of the new infrastructure in the UK in the late 80s and early 90s came from a 'grey' workforce that couldn't be found on any electoral register but, strangely, could always be found in the welfare queue. (Sorry about the doom and gloom build up but I've been watching a TV program about the looming recession).


People were actually shocked by the fact that, for the first time, the government didn't support them when they went on strike and that businesses would actually cease trading in the UK if that's what it took to get their way. Once upon a time a business would not consider alienating a UK market but that had changed. Timex could make watches cheaper elsewhere and the British workforce wouldn't tow the line. It was cheaper to buy coal in bulk from Australia and ship it across the world to the UK than pay the UK work force to mine it on site. The answer from the government? 'Get on your bike'. Yep go and find work elsewhere because there was no help coming your way.

Horrible times for a boy just out of school. Of course I survived because I didn't know any better. I was young, prepared to work hard for little money and totally driven. I couldn't understand why people were so surprised that businesses closed when unions crippled them with unreasonable demands. I was part of a new 'do or die' generation. So many people got on the bandwagon quickly. Even the ones that disapproved were saving to buy up housing stock from the councils and taking up shares in telephones and trains whilst criticising the government for selling off these very industries. If you could just forget the recession for a moment there were riches to be gained. Quickly.

Twenty years down the line and it looks set to happen again in a big way. This time it was the banks that crumbled rather than nationalised industry. It wasn't the unions holding them to ransom but their own highest achievers and their bonus systems. The banks had made horrendous financial investments and now realised that there was no return. A significant percentage of the population live in properties that they will never own as they have interest only mortgages and no wherewithal to pay when they come to an end. Credit cards had offered credit limits that far exceeded bank loans but were now smarting as more people than ever before went bankrupt and paid back nothing. The one thing that had been stable throughout history was now in danger of collapse. Money itself.


International governments acted quickly to shore up the banks but did nothing to protect the very people who were paying for this bailout, us, from what would happen. Challenged by government to repay their bailout loans the banks turned on the very people who bailed them out. Their customers. To use actual figures as an example. The Bank of Scotland (I joined before I left school) increased their mortgage rate to 7% when the actual interest rate was 0.5%. It's risen again since. They increased overdraft charges (despite a whole separate scandal over unjust charges) from roughly £11 per year to £1 per day. Credit card interest rates rose from 19% just three years ago to 29%. I applied to turn one credit card into a loan and was offered a rate of 27%. I have another loan with that same bank taken two years ago at 9%.

Yep. I'm in every bit as much in shock as the folk of my age were back in the eighties when the unions failed them. Back then the only people who could really help you if the worst happened was your bank. If you dig deep into my finances, between mortgage, loans and credit cards I'm sure that I pay more money in interest than I do in anything else. It's disgusting.

Will the government protect me or take steps to ease this burden? Nope. The government are increasing taxes. Fuel duty which will impact every consumable is due to rise and a thing we have in the UK called VAT will increase the price of every product by 1.5%. Lets not kid ourselves. The mortgage rate is low at the moment but it must go up soon.

For some (cash rich or credit free) there's money to be made and good luck to them. For the rest of us the crunch is returning big time. For what it's worth I don't believe any government sets out to be unpopular or leave folk behind. If they make harsh policies it's because harsh times demand it. Back then though..When the unions failed the work force.. there was an expectation that the government might sort things out. They didn't. As I watch the banks rob me blind. I wonder why the government doesn't do something about it. They won't.

Someone asked me what I do with the money I no longer spend on smoking? I pay my bank interest.

I promise something more uplifting later this week.

T