+In the 1990s there was a wave of building society demutualisations, often led by carpetbagger members who wanted a quick route to some cash. The concept of mutual ownership for them was simply an opportunistic deal, not a committed ideal. Most remaining building societies took steps to stop the carpetbaggers and the wave of sell-offs dried up. Now, a new approach is happening, with the Nationwide Building Society making an offer (which has been accepted) to buy Virgin Money in a deal worth £2.9 billion. That’s £2.9 billion Nationwide’s members won’t be seeing. Ironically Nationwide is not seeking its members’ approval for this deal, but Virgin Money’s shareholders will be asked to vote on it—and no doubt will vote yes when they see how much money they will get for their shares. And no doubt the directors all round will get fat bonuses and/or pay-offs when the deal goes through. I’ve always been suspicious of building society directors, and have always voted against their generous remunerations. In the coming years (but not just yet) ‘efficiency savings’ will follow as surely as night follows day, and many employees will be looking for new jobs.
+It has been reported that the blogger and former UK diplomat Craig Murray is to stand in the general election for the Workers (sic) Party in Blackburn, although he hasn’t said so himself on his blog. If it’s true then it seems surprising, since he is an arch campaigner for Scottish independence. I would have thought he would stand for the Alba Party in Scotland. What am I missing? No doubt we’ll find out soon enough (n.b. this snippet has nothing to do with the Third Way). +It seems real Labour policies are on hold in a bid to provide ‘reassurance,’ as against the fears that were thrown up by that bearded chap in 2019. What is not clear is whether this reassurance approach is intended for voters, or merely the markets. Why do I ask these silly questions? Maybe it’s because I am not reassured (surprise, surprise). I’ve been reading Rachel Reeves’ recent ‘Mais’ speech. Contrast these two sections: The first: ‘The so-called ‘mini budget’ – with its programme of unfunded tax cuts, amidst a concerted attempt to undermine our independent economic institutions – dramatically changed the fiscal circumstances in which we must operate. In October 2021, the Bank of England base rate was 0.1 percent. In little over two years, that has risen to 5.25 percent. In October 2021, the OBR forecast that net debt interest would cost £29 billion this year. They now expect that cost to be £82 billion. These changed circumstances explain the decision that Keir Starmer, the Shadow Cabinet and myself recently reached over the scale of government spending attached to Labour’s Green Prosperity Plan, to strike the necessary balance between the imperatives of the energy transition and the real economic constraints we face.’ Then the second: ‘We know too – as the Office for Budget Responsibility has argued – that the future costs of failure to address the climate crisis will far outweigh the cost of action today.’ Well, not just the OBR, actually. Going back to the noughties we had Nick Stern’s report on the economics of climate change (I was calling for such a report before Gordon Brown latched onto the idea) which made the point forcefully. But Reeves is a typical creature of her professional milieu, prone to delaying the future (so to speak) whilst blinded by the present. But it’s handy to blame Truss for everything. Nick Stern demonstrated that climate change spending now was economically affordable in economists’ terms. But as President Harry S Truman reportedly said ‘Give me a one-handed economist.’ +Rachel Reeves' 'Securonomics' is I've just realised the new name for the Third Way. +Part three in this exciting series of blogs will appear to tomorrow after I've had the chance to consider the Labour List webinar on 'Bidenomics' I watched today. Heady stuff!
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