Our panicking PM is bankrupting Britain

HOW extraordinary that the Johnson Government, while in serious money trouble, chooses to spend billions on a vaccine against a disease which in many cases has no symptoms at all.

Yet this peculiar decision is a mere ripple on the surface of a much deeper problem. Britain in 2020 has many economic difficulties, but good credit. The lenders and investors of the world believe the UK is run by responsible people and will repay its debts.

But my astute colleague Dan Atkinson recently discovered that the Treasury and the Bank of England are creating money out of nothing on a huge scale. It is like the old fairy tale of Rumpelstiltskin, who could spin gold out of straw – but at a terrible price.

Put at its simplest, more than £150billion of Britain’s Himalaya-sized national debt has effectively been paid off – at no cost – using money created by, and passed between, the Treasury and the Bank of England. The bonds involved are supposed to be sold to real investors, who profit from generous interest payments, and then are meant to be bought back from them. But in this case, the Government invested in itself, forgave itself the interest, and then paid itself back.

I wonder what would happen to any private business which behaved like this. It is clever, but it is playing with fire, and it will come back in many ways to bite us. Major inflation is a possible result.

I just mention these known facts to let you know how bad things are, and how close we are to copying countries such as Argentina, once rich, now poor, which traded for years on their reputations, and lived as they had been used to live, long after they could not pay their bills. Until it went wrong. The elite don’t and won’t suffer much. It will be the rest of us who do that. Amid all the self-congratulation about the supposed ‘success’ of Rishi Sunak’s furlough plan to pay people while preventing them from working, more and more of us are finding out what this really means.

Existing jobs vanish. Future jobs never arrive. Jolly Mr Sunak can postpone unemployment but he can’t prevent it. Even before Johnson put his thumb back on the national windpipe in his latest shutdown, unemployment – especially among the young – was on the way up. A record 314,000 people lost their jobs in the three months to September. An ‘unprecedented’ quarterly increase in redundancies helped push up the UK jobless rate to 4.8 per cent

Young people have been worst hit of all by the Johnson-Hancock Panic Plan. They tend to work in the sectors most affected, such as hospitality, retailing and leisure. This is why the official jobless rate for the under-25s now stands at 14.6per cent, more than one in eight. This is real, and hard. And nobody is safe from one side or other of it. Waiting round the corner are rising prices, heavy local and national tax increases, and worsening public services.

I suspect Mr Sunak is working hard to think of ways of raiding your savings, including your pension and the value of your home. Many are already experiencing a far poorer NHS, with private GP services starting to boom. School and university education are in crisis.

This is where panic takes you. I continue to advise against it, before it gets any worse.