Mayhem in the U.K.!

Unless you’ve been busy playing Call of Duty in your mother’s basement for the past couple of days, you would know that several major areas in London and a few areas outside of it have been plagued by looters and troublemakers.

The riots in London started with the death of Mark Duggan, a Tottenham local who was shot by the London police. The details are sketchy as to why or how he was killed, but the end result was that those who sympathized with Duggan and those who had issues with the government took to the streets.

What started out as a peaceful protest turned violent quickly. In just a few hours, hundreds of people were seen raiding the stores for flat screen TVs and alcohol, setting cars and buildings on fire, and even violently attacking civilians.

Peace!

Unfortunately, amidst all this turmoil, the lack of police power and the government’s inability to control the situation has been evident and appropriately criticized. After all, the riots are a threat not only to public safety, but also to the U.K. economy.

For one, it threatens the U.K.’s appeal as an attractive investment hub. Among the many countries in Europe, investors prefer the U.K. economy because of its solid AAA credit rating and a relatively strong real estate industry. Whether the riots take a toll on the U.K.’s appeal is yet to be seen, but I’m certain it isn’t doing it any good.

Consumer spending in the country is also taking a hit. Word on the street (literally) is that shops are closing early, citizens are afraid to venture outside of their homes, and tourists are thinking twice about going to the country. This will certainly weigh on economic growth especially since consumer sentiment and retail sales are already weak to begin with.

No doubt, good government money will be spent to clean up the mess when this all finally blows over. And I wouldn’t be surprised to see insurance premiums rise because of all this mayhem. But that isn’t even the worst of the U.K.’s problems.

The government will have to seriously reconsider its austerity measures, particularly cuts in the police budget, if it wants to contain the ongoing riots and prevent similar scenarios in the future. As a matter of fact, there have already been calls for U.K Prime Minister David Cameron to eliminate the 20% reduction to the police budget he plans to make by 2015.

Yes, it’s true that the planned cutback in the police budget of 1.9 billion GBP is but a fraction of the government’s overall austerity program of 111 billion GBP. But you have to understand that the budget is already stretched as it is. If the government doesn’t push through with cutting the police budget by the said amount, it’ll have to find some other way to make up the difference.

Aye, but here’s the rub: if the government decides NOT to make any cutbacks in the police budget, it will seriously put to question its credibility and dedication to controlling the U.K.’s ballooning debt. And we all know too well that the government already receiving enough flak as it is about its inability to make a dent in its budget deficit. Talk about being stuck between a rock and a hard place!

It’s clear to see that the end to the riots can’t come soon enough. With the global economy on the verge of double-dipping, and the local economy already facing so many problems as it is, the last thing the U.K. needs is something like this to tip it over the edge.

  • Harry Pilgrim

    I think you are overstating the effects of the looting. Neither work nor shopping nor any part of the infrastructure of the economy have been affected in any noticeable way. If retail sales weaken, blame it on job market fears. I have noticed the pubs and shops have been relatively quiet the last couple of months. It takes more than naughty children to disrupt a country’s reputation for propriety. It takes naughty MPs, of which we have plenty, for that!