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Wednesday, 13 October 2010

A cold, hard winter coming for the unemployed etc !!


If you were looking for indicators of the direction the economy is taking, it's safe to say that you won't get much joy from yesterday's unemployment statistics.

They are, without exception, poor and discouraging, especially since it's clear that the draconian cutbacks long heralded by this coalition government have yet to take their definitive shape and there's a lot more hurt to come for working people yet.

Things may be bad already but, as Unison general secretary Dave Prentis warned, "this is the false calm before the storm. Next week the Chancellor will lay the groundwork for adding 750,000 public-sector workers to the dole queues. The knock-on effects to the private sector will be huge."

There are other indicators as well and we're seeing them emerge already. If you remember, the Halifax Building Society handed out 200 free shares to each of 7.6 million society members when it floated on the stock market in 1997.

At the time of the handout, the shares were worth £1,465. They are now valued at around £38. So much for the share-owning democracy, then.

The demutualisation exercise helped no-one except the dealers who took their slice of the action when the shares were sold on, as many of them were.

To add to the feelings of impending disaster, insolvency practitioner Begbies Traynor warned yesterday that 50,299 companies had fallen into financial trouble in the third quarter of the year.

And the number of firms with either significant or critical financial woes stood at 123,361 in the three months to the end of September.

The company warned that the planned cutbacks in public-sector expenditure were set to rattle the private sector to a huge degree.

It observed that "even if the wider UK avoids a double-dip recession, public sector-dependent industries face higher levels of financial distress."

Which makes the statement by Employment Minister Chris Grayling ring fairly hollow.

"We are pressing ahead with radically overhauling the welfare system, with reassessments of those on incapacity benefits in Burnley and Aberdeen beginning this week," he said, claiming that this would somehow help the economy. Quite how wasn't made clear.

It can hardly be of help to the economy to ram people back into a jobs market which already is several million jobs short of the number needed to satisfy the unemployed figures - especially since, as Mr Prentis pointed out, there are another 750,000 public-sector jobs at risk.

And that's in addition to the 500,000 jobs in the private sector that accountants PwC forecast will be lost as a result of the public-sector cutbacks.

Those aren't trade union figures, remember. These are management estimates. They make grim reading.

Other warning signs are also emerging, although they are being desperately dressed up to appear less significant than they really are.

High street bank HSBC warned yesterday that three out of 10 people have less than £249 set aside to see them through any emergency and a third of these have no savings at all. And that's no surprise, since people are feeling the pinch already.

Birmingham Midshires, a division of Bank of Scotland, gave its own warning yesterday.

It said that Britons withdrew more than twice as much from their deposit accounts as they managed to save during the past quarter.

It was the second quarter running that consumers took more than twice as much out of their savings accounts as they paid in.

The pain is starting to appear and we haven't even been hit by the full impact of the government's spending review yet. It's going to be a long, cold and bitter winter and there's no wrapping up against it. It's time to fight back and it's time to organise. And it's a fight we have to win.
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