Britain's empty coffers

Britain's public finances are a mess - but it's not too late to get back on top of things with a bit of bold action, says John Stepek.

Fancy a job as a witch? No? How about a job as a witch that pays £50,000 a year? That's what's on offer at Wookey Hole in Somerset. Apparently the applicant must be able to cackle and cannot be allergic to cats.

As you've perhaps gathered by now, this job follows (I assume) in the same mould as the recent 'greatest job in the world' campaign when the Queensland tourist board managed to get itself wall-to-wall global press coverage by advertising for a caretaker for a tropical island. It seems that tourist attractions have hit upon the perfect advertising wheeze for the recession offer a quirky job at an above-average wage.

Plenty of people are looking for jobs anyway; the free publicity makes up for the cost of hiring the candidate; and if you're smart, like the Queenslanders, you make sure it's a temporary contract so you can do it all again in a couple of years.

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Any other company that follows suit can probably expect a wide range of applicants. Unemployment in Britain just keeps rising, and unless you're at the top of the tree, the chances of getting another job particularly in banking are slim, as one recruitment agency executive put it this week.

And this in particular is what makes us sceptical of all the talk of recovery out there. As we've said repeatedly, the British economy has been propped up in recent years by spending, which was in turn based in part on rising house prices, which were in turn lifted by cheap credit. Take away the cheap credit, and the dominoes tumble down.

Headlines this week talked of a "surprise fall in house prices" last month, after Halifax said prices dropped 0.5% in June. But surprising to whom? Haven't these people been watching the news? The number of mortgage products available has dropped to an all-time low, according to, from nearly 30,000 at the peak of the market to less than 3,000 now. And almost one in four borrowers believe they can't get a mortgage, according to the National Association of Estate Agents.

The other factor behind our apparently buoyant economy was government spending. Since Labour came to power in 1997, more than 750,000 people have been added to the public-sector payroll. Much of the money we've pumped into the public sector has gone straight into other people's pockets as this week's news that chief constables are lapping up five-figure bonuses amply shows.

With the coffers empty, both Labour and the Tories know this can't go on. With a bit of honesty, and action to cut both spending and taxes, it's not too late to tackle the situation it's just a matter of whether either party has the guts to tell us straight. I'll not hold my breath.

John Stepek

John is the executive editor of MoneyWeek and writes our daily investment email, Money Morning. John graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news. John joined MoneyWeek in 2005.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.