Mr Brown’s Family
Mr Brown was the head of his family, and ran the family business UK PLC, which had been in the family for many hundreds of years. It was an unspectacular business, but nonetheless a steady one that provided a good standard of living for him and his family. Most importantly it was a business with a healthy amount of assets, and a manageable amount of debt, and as such was well poised to see Mr Brown and family through many years ahead on a steady keel.
However Mr Brown had bigger plans, and set about revolutionising the UK PLC store credit card policy to make it far less stringent. This meant that many more customers were allowed store cards and with far greater credit limits. Over time the checks on potential customers became less and less rigorous until customers were allowed to take a store credit card without any certification of income.
The effect of this change in store policy was immense as the company’s profits went through the roof, and with ever decreasing regulation on customers, the rise in year on year profits continued to astound Mr Brown’s family. The surplus cash that the company now churned out was used to plough into improving the standard of life for Mr Brown’s family and for some of his own personal aims (that none of his family shared).
One such personal aim was to provide the family with ID cards which he assured them was all for their own safety, and although none of them wanted this, he pushed his plan forward spending huge sums of money. With the system all but finished he relented and scrapped the idea altogether.
He also spent an inordinate amount of money on an incredibly complex diary as he was concerned that his family sometimes missed doctor’s appointments, however once the diary was implemented it seemed that this continued to happen with the exactly the same regularity.
Mr Brown’s plans for a higher standard of living for his family, involved employing many more people in the company than it could either afford, or required. This left his family needing to do less and less as the work was shared between many more employees.
Over time the standard of living his family boasted started to attract attention, and his ability to seemingly generate endless amounts of spare cash started to raise his profile as a business brain. At the height of his powers Mr Brown proclaimed that there would never be a time of hardship again for his family, the prosperity he’d brought was here to stay forever. The family were satisfied that they had sufficient disposable income and a vastly reduced workload, and as such everyone seemed happy.
During this time Mr Brown also increased the company’s borrowings to further fund his spending spree, but in ingenious move he decided to start selling off its assets and used the funds to pay some of this down. This came at an unfortunate time however, as Mr Brown through a mixture of gross personal negligence and an incredible lack of foresight, managed to sell the company’s assets at an all-time record low price.
Then one day the company’s auditors called to say that they were very concerned with the increasing levels of bad debt in the company’s store card scheme, and that immediate action was needed to mitigate the situation.
Once again Mr Brown’s ingenious mature rose to the fore and he announced that his family would now raise debt personally, which could then be lent to UK PLC, thus alleviating the immediate financial pressure on the company.
This plan was heralded by many as a masterstroke, however shortly afterwards questions began to be asked as to how Mr Brown’s family would be able to service the debt they had raised. In light of this the interest rates the family were paying were hiked in line with the increased risk that they wouldn’t be able to pay off their debts (particularly in light of the fact that UK PLC was now significantly less profitable).
The family had a crisis meeting, and a decision was made to replace Mr Brown as the head of UK PLC which he was extremely unhappy about, and even stooped to calling some of the family bigots for disagreeing with how he had run UK PLC.
After some prevaricating it was decided by the family that the new head of UK PLC was to be Mr Cameron. His idea was to try and reduce the outgoings of UK PLC, put up prices and increase the regulation of new store card customers to try and balance the books. As part of his restructuring the family would earn less, and UK PLC would have to reduce its staff levels to make it sustainable. These were unpopular moves, but much needed to bring the company back onto a sound financial footing.
In spite of the clear need for a restructuring, some of the family who were close to Mr Brown (particularly his son in law Mr Balls) continued to claim that the only way to resolve the situation was to take on more debt.
As time went on UK PLC started to look far safer financially and the punitive interest rates the banks were charging started to drop, however for the next two generations Mr Brown’s relatives were forced to live a much more frugal life as they attempted to pay off the debt mountain he left them with.
In reality, all Mr Brown did, was spend his children and grandchildren’s money, and left them with nothing to show for it.
John Moffat – September 2011