Here is some news that has attracted surprisingly little comment. George Osborne was right to sound the alarm about UK public finances in 2010. Sort of. According to an International Monetary Fund report, the UK government’s net worth – the value of its assets compared with its liabilities – is minus £2trn. Only Portugal, among the 31 countries for which the report gives figures, is deeper in the red. The countries with better balance sheets include not only France, Germany, Norway, the US, Japan and Australia but also El Salvador, Uganda, Albania, Russia and Kazakhstan. If the British government were a bank facing a stress test, it would surely fail.
Its position was greatly worsened when it took on the liabilities of leading banks during the financial crisis. But the weakness of its balance sheet goes back to the Tories’ privatisations of state-owned assets in the 1980s and early 1990s. Meanwhile, Norway used the proceeds of North Sea oil and gas to set up its sovereign wealth fund, which now owns 1.3 per cent of global stocks and shares. Of the countries in the IMF report, Norway’s net worth, up 169 per cent since the financial crisis, is easily highest.
Osborne said Labour failed to fix the roof while the sun was shining. Thanks to the North Sea, the sun shone when Margaret Thatcher was in power. While social democratic Norway built a storm-resistant roof capable of withstanding anything the economic weather could throw at it, Tory Britain frittered the money away on crazed free market experiments. Jeremy Corbyn’s Labour is accused of planning an equally crazed experiment in nationalisation. But when you look at the national balance sheet, the acquisition of more revenue-producing state assets – reservoirs and power stations, for example – looks like an excellent and even a necessary idea.
Ring twice
The government’s newly published “loneliness strategy” promises that postal workers will call on “lonely old people” and “ask… questions to assess individual need”. Perhaps ministers haven’t heard that the privatised Royal Mail received a million customer complaints last year, many of them about parcels that the company claimed to have delivered but hadn’t.
If, as I approach my 74th birthday, I am offered this service, I shall say that I would prefer earlier and more reliable deliveries. And would the delivery people please remove their headphones so that, when I chase them, shouting that they have delivered me something intended for a house 500 yards up the road (or even 500 miles away), they can hear me?
Baguette out
According to Schopenhauer, “to feel envy is human” whereas “to savour Schadenfreude is devilish”. But sometimes I cannot resist it. For no good reason, except that he is a Brexiteer, owner of several restaurant and café chains, and a right-wing know-all, I have long disliked Luke Johnson. So here goes.
9 July 2013: Johnson instructs Financial Times readers in his weekly column: “A cash-flow projection is a much more important document than a profit and loss statement… a company can make paper losses for years and still survive if it has sufficient cash. It is amazing how financial journalists, fund managers, analysts, bankers and company directors can still focus on the wrong numbers in the accounts.”
15 May 2018: Johnson’s Patisserie Valerie announces that it has “a strong balance sheet position, with net cash of £28.8m”.
14 October 2018: After Patisserie Valerie announces a net cash deficit of £20m, bringing it close to bankruptcy, Johnson explains: “All was not as… reported in the management accounts… as far as the cash position was concerned.”
Car alarm
The former Brexit minister David Davis, writing in the Sunday Times, detects “panic” in Germany over the prospect of the UK leaving without a deal. Firms such as BMW will demand that Brussels accede to British demands lest they lose “about a third of their car sales”. Over the past two years, Brexiteers have repeatedly given similar assurances that German car manufacturers would fight our corner. In fact, 17.6 per cent of German car exports come to the UK. But 53.9 per cent of the UK’s car exports go to the EU. The only panic is from Britain’s car manufacturers.
People’s princesses
With never-ending austerity and Brexit going badly, the government needs something to distract the populace. How convenient, then, that this year has seen two royal weddings, even if the second was underwhelming, and a royal birth. How convenient also that yet another royal birth is due next spring when the country may face the full horror of a hard Brexit. According to some reports, a remarriage of Andrew and Fergie is also on the cards, possibly as an emergency backstop if lorry jams to the Kent ports reach back to the M25.
Since 2010, the royals have done the Tories proud, with marriages, babies and 90th birthdays galore as well as a diamond jubilee. During Labour’s 13 years in office, they delivered three deaths, including that of Princess Diana, the unpopular marriage of Prince Charles to Camilla Parker Bowles and, apart from the Queen’s golden jubilee, little else. Just coincidence, or what?
Wine whine
Scene: an upmarket Italian restaurant in London. The waiter brings a bottle of wine to my table and pours it into glasses. I point out that my glass is chipped. He removes the glass and pours its contents down the sink. He brings me a new glass, which is empty. After five minutes, I realise that a refill isn’t coming. It takes another five minutes to convince the waiter there’s something wrong. I wonder how many customers, battling with language barriers and native British reserve, would have given up.
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This article appears in the 17 Oct 2018 issue of the New Statesman, Europe’s civil war