Bill Carmichael: Britain is booming because we shunned the euro

GOOD news on the economy comes so thick and fast these days that it hardly makes the headlines.
Bill Carmichael says Britain is booming because the country did not join the euro.Bill Carmichael says Britain is booming because the country did not join the euro.
Bill Carmichael says Britain is booming because the country did not join the euro.

GOOD news on the economy comes so thick and fast these days that it hardly makes the headlines.

So you may have missed a set of remarkable statistics released this week that show the UK is going through something of a jobs creation boom.

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According to official figures, unemployment between August and October fell by 110,000 and stands at 5.2 per cent - the lowest figure for 10 years.

A total of 31.3 million people are now in work – 74 per cent of the working age population, the highest figure since 1971. We are rapidly approaching an era of full employment.

Thank heavens we didn’t listen to those pro-EU fanatics – Michael Heseltine, Peter Mandelson, Ken Clarke and Nick Clegg – who said we should join the euro.

The comparable figures for Eurozone countries are utterly dismal – 10 per cent unemployment in France, 12 per cent in Italy and more than 22 per cent in Greece and Spain. Youth unemployment is far higher.

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The life chances of an entire generation have been sacrificed on the altar of European integration.

The latest figures also vindicate the much much-maligned benefit reforms, which have clearly had a positive impact on both individuals and the country as a whole.

There was a great deal of irresponsible shroud waving when Iain Duncan Smith introduced changes such as the £26,000 a year benefit cap. We were warned that destitute people would end up starving in the gutter and chopping up their grannies for firewood.

Boris Johnson even claimed that the reforms would result in the ethnic cleaning of large parts of London.

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None of this hysterical soothsaying proved even remotely true, of course. Instead when benefits were squeezed hundreds of thousands of claimants did the rational thing – they went out and found a job.

And that is a good thing for the poor. The only reliable way out of poverty is through work. Encouraging entire generations of people spend their lives in poverty and squalor on benefits is one of the most wicked and damaging things the “compassionate” left has ever done.

But it is not all good news on the economy, because there is an enormous cloud on the horizon that can be summed up in one word – debt.

Conventional Keynesian economics has it that the government borrows heavily when we are in recession in order to stimulate the economy, and then pays it back when times are better.

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That hasn’t happened. Sure enough we ran up huge debts after the crash of 2008 but now, even with money flooding the Treasury from increased employment, instead of paying it back we are still borrowing at the rate of about £70bn a year.

Chancellor George Osborne missed his targets to eliminate the deficit in the last government and now says we won’t break even until 2019-20 when total debt will be around £1.6 trillion.

So far from “mending the roof while the sun is shining” as the Government promised, we are instead throwing a wild party and putting a few more cases of champagne on the credit card.

But don’t worry – your grandchildren will pay for it all!

The question has to be asked – if we can’t shake off our addiction to debt and live within our means when the economy is booming, when can we?

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Some people argue government debt doesn’t matter – we can always print more money when we run out. Labour’s entire economic policy – such as it is – depends on the existence of this magic money tree.

But debt comes with a very real cost - £43bn worth of interest payments every year in the UK’s case. This is more than we spend on the entire education budget and amounts to about £2,000 a year in taxes for every household.

And we have only got away with this for so long because interest rates have been at historically low levels making borrowing exceptionally cheap. Once interest rates start to rise – and they will – we could find ourselves in deep trouble.

In fact another headline you might have missed this week is the US Federal Reserve announced a 0.25 per cent increase in interest rates – the first rise since 2006. The Bank of England is expected to follow suit in the spring.

The era of cheap money is coming to an end and our massive debts will weigh ever more heavily on us.

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