Austerity measures

As Charlton fans, we are all very well aware of the financial predicament our club finds itself in and the fact that we have some unpleasant medicine to take in the coming few years if we are to recover and once again become a force in our division. In terms of the quality of our squad for 10-11, it will be poorer than 09-10 but probably better still than 11-12. We will retain a number of better quality and more experienced players who are contracted this season, who we will need to move on in twelve months time. They may be just the difference between an average season this coming year and a poorer one following  as the rebuilding (hopefully) continues.


The situation at the Valley, of course, now closely resembles that of UK plc. Years of worsening personal finance and cultural change focusing on the cost of everything (something that really struck me when travelling in Australia). This won't come as much of a surprise to people living in Stoke-on-Trent or much of the Midlands who have always, in my opinion, had an overly developed sense of price. The coalition government will announce it's first budget this week and we are already being softened up for a walloping. 


The primary vehicle for the first tax payload looks like being VAT. A tax that discriminates against the poorer people in society. Proportionately, we all pay the same increase of course, but VAT doesn't take into account earnings or relative wealth. It's a softer option, of course, than a rise in income tax and they will be holding onto that card I suspect for subsequent budgets. The argument goes that it's a tax on consumption and ultimately a choice, but because of the near blanket applicability of VAT, it's no such thing. At least the influence of the Lib-Dems may at least force a concession on raising income tax thresholds for the lowest earners, something the Labour Party will surely cringe over if it comes to pass.


Austerity is a word the older of us will immediately associate with the War (even if we were born twenty years after it). Expect to see a return then of the "Dunkirk Spirit" and home-spun remedies such as "grow your own" as we attempt to cut the deficit and avoid becoming a Third World economy. "Grin and bear it" and "keep calm and carry on" will be slogans we may well see resurrected by a nostalgic coalition government looking for crumbs of comfort from the past. 


The trouble right now is that setting the course to recovery, once something that governments could do with some degree of confidence, looks far less assured in a world post the global financial crisis. Huge sovereign debts that may prove to have been just as corruptly managed as the sub-prime mortgage loans look like being the next iceberg for the world's recovering financial institutions. "Our" banks are into the governments of Greece, Spain, Italy and Portugal for £100bn. If one of these defaults on it's loans, and Greece is looking more likely rather than less likely, the rest will come under increased pressure and every one of us will feel the squeeze further. 


What appetite will there be for another round of bank bailouts following their sickening collective behaviour after the last one? A two-and-half percentage point rise in VAT could be the least of our worries. Rant over, for now.