Britain at the Crossroads

While waiting for the politicians in the Westminster Village to decide who the next UK Prime Minister should be, readers of the Cobden Centre might want to leaf through the report recently released by Dr Tim Morgan, the Global Head of Research at Tullett Prebon, one of the largest Inter-Dealer Brokers in the world, who buy and sell enormous quantities of bonds in the international markets.

The ‘Strategy Insights’ report, released on the 29th of April, makes for extraordinary reading.

To tempt you into reading the report, you might want to check out the related press release first. Here’s a sample quote:

In his paper ‘Britain at the crossroads’ Dr Tim Morgan, head of research at Tullett Prebon, explains why the true indebtedness of the British state is well in excess of £2 trillion, vastly higher than the £760bn narrow definition of national debt. “Unless resolute action is taken”, the report says, “we cannot rule out the possibility of a ‘perfect storm’ for the UK economy”, comprising “higher interest rates, rising unemployment, falling property prices, an even weaker currency, rising inflation (caused in part by higher import costs), and escalating public debt”.

As a result of the rise of the quangocracy, Britain’s government is now more wasteful than those of Ethiopia or Albania, and the regulatory burden is greater in the UK than in Nigeria or China. “It is possible”, Dr Morgan warns, “to envisage a future in which the British population is subjected to ever-increasing taxation and charging to sustain an administrative superstructure which is increasingly coercive as well as unaffordably costly”.

If most of Britain’s political leaders are to be believed, drastic cuts in public spending would reverse the country’s anaemic economic recovery and inflict irreparable damage to essential public services. “Bunkum”, Tim argues, pointing out that a £100bn cut in public spending would still leave government expenditure higher in real terms than it was in 2006, when public services were hardly starved of cash.

Rather, Tim advocates requiring the state to live within the implications of a maximum revenue share of 35% of national income, and a maximum deficit of 3%. Only through such an approach can both fiscal stability and economic competitiveness be restored.

This report is not for the faint of heart.