BBC BLOGS - Peston's Picks
IN ASSOCIATION WITH
« Previous | Main | Next »

Taxpayer support for big companies

Post categories:

Robert Peston | 18:50 UK time, Thursday, 15 January 2009

What would you think about lending a few bob to a giant FTSE-100 company?

And when I say "you", I mean all of us, as taxpayers.

Because the next phase in the government's attempt to stem the contraction of credit - that pernicious trend that's driven us into recession - will probably be to put a "sovereign wrap" around bonds and tradable paper issued by big companies.

treasury_sign203.jpgIt's the unfinished business of the Treasury and the Business Department, likely to be unveiled later this month, following the £11bn package of guarantees for bank loans to smaller businesses unveiled yesterday.

Broadly, taxpayers would be guaranteeing loans made to companies by pension funds, mutual funds, insurers and other financial institutions.

And the idea would be to funnel the cash in these funds to the biggest 350 or so British companies.

One reason for doing this is that we're about to see a big bulge in the maturing of loans to companies. As I pointed out in the post "2009 is payback year", for European companies in aggregate there's a trillion dollars of bonds that have to be repaid or rolled over during the coming 12 months.

And although the corporate bond markets have recovered a bit in the past few weeks (the putative "green shoots" which Shrita Vadera now wishes she hadn't pointed out), we as taxpayers are probably going to have to lease our creditworthiness to companies, in order to persuade big investors to back those companies in sufficient size and at the right price.

Which means that the £600bn of loans, guarantees and capital provided to date by British taxpayers directly to our banks would be augmented by substantial guarantees from us for borrowing by giant businesses.

In this instance, we'd be following where that recent convert to the alleged benefits of massive state intervention, George Bush's America, has been leading. In the US, there's already colossal support from taxpayers for corporate borrowing from investors in the form of commercial paper - with the US central bank, the Federal Reserve, buying the stuff and acting as de facto market maker.

As I noted in "The New Capitalism", the social, cultural, political and economic implications of the growing dependence of the private sector on the state and on taxpayers will be profound.

If you knew that you were lending to the vendor of your knickers, or the provider of your broadband service, would that change your attitude to them?

As swathes of the private sector receive vital financial support from taxpayers, the balance of power between citizen and big business will change. But for better, or for worse?

Comments

Page 1 of 3

  • Comment number 1.

    Robert,

    But can't public companies raise capital by issuing bonds and shares on the market? Isn't that what being a public company is all about?

    Is it perhaps that the FTSE quoted companies know that they can get less expensive capital from the Taxpayer?

    But I forget money is worthless! So nobody will lend you any for the nothing that the Bank of England says you should offer to pay/recieve.

    If companies want money they should offer a suitable risk premium and they will probably get it (e.g. Barclays paying 14% last month).

    But has the market so deteriorated since last month that even offering to pay say 20 percent plus will not raise any capital? My guess is not. But also my feeling is also that the big companies think that they can raise capital less expensively from the government (i.e. from us the taxpayer!)

    The Bank of England needs to raise interest rates (back to 5 percent) now to get the market going again. It is all down to the MPC not comprehending what they have done in destroying the public faith in money. Get the rates up now - this will restore faith in money and also get the economy going again because savers who vastly outnumber borrowers (7 times?) will (may) start spending again. Until the Bank get this though its head the economy will continue nosediving!

  • Comment number 2.

    Now don't you think at some point either parliament should have a say in this, or perhaps the people.

    This kind of commitment -to large commercial businesses who have 'experienced' and mostly well-rewarded management and boards of directors- is a different kettle of fish to keeping the banks (who hold our savings) afloat.

  • Comment number 3.

    Rather humbling for the execs to realise they are in the same boat as those left to struggle on welfare and minimum wage - dependent on the government for social/market welfare!

    The captains of market forces expect help in the storm while they were unwilling to help those in a different world struggling in a different storm.

    Approach the fate due with dignity. Live by the sword, die by the sword.

    They should have the decency to admit, just for once, that they are not and have not been up to the job.

    P45s all round should be demanded for those how have been shown to be what they are - entirely incompetent.

    They'll be fine. After six months of looking for work, the governement will help them to walk straight into a job in a nearby check-out station.

  • Comment number 4.

    Does this mean the proposed Lloyds TSB 13% subordinated bond will be backed by the taxpayer too?

  • Comment number 5.

    To use an analogy: this will be like pumping concrete into the foundations of a shaky building when the problem is that the bricks are being held together by defective cement. The building will still fall down.

  • Comment number 6.

    Just who decides how British a company is?

    Will many of them conveniently be big employers in marginal seats?

    Maybe Jaguar Land Rover a wholly owned subsidiary of an Indian company that isn't listed on the Footsie? It conveniently has large number of employees in both Erdington in Birmingham and Solihull both of which are key seats for the conservatives to win if they are to be win the next election.

  • Comment number 7.

    If it means that those companies (blue chip companies one hopes) are able to roll over debts it’s a great idea.

    It would bring back market confidence in certain corporate debt products/markets.

    What is still astonishing is that after the Junk Bond fiasco of the 80s 90s we have ended up with even more junk!

    The ratings agency would then be the Government (worrying?)



    I for one would be quite happy as long as it brought back real risk knowledge lead lending.

    I still believe we need a simple but flexible system for all this lending to give the tax payer (lender) and tax payer (payer) protection and a way or tuning all the future lending.


    Lending Linked DIRECTLY to TAX Paid would be a great way.

    TAX LINKED RATIO ie you paid 100k tax over the last 3 years so the BOE or Treasury multiple for all your lending would be a multiple of the TAX paid.

    The SAME FOR CORPORATE BORROWERS.


    The beauty of this system would be the multiple could be adjusted weekly daily even.

    And it would tweak rather than
    Thump a la interest rate change.

  • Comment number 8.

    Better or worse indeed. my children have a wall chart of the top five off shore tax shelters. I think you should put them on the news train Robert.

  • Comment number 9.

    At this point we have to conclude that one of three things is happening.
    1.) Capitalism has failed.
    2.) Our implementation of the capitalist model has failed.
    3.) Capitalism works and this is just a normal correction in the workings of capitalist models.

    If it is 1. then mass sackings of boards and executives should be the price of failure and replaced by government appointed management teams.

    If it is 2. then the authorities need sacking, including the government organisations that allowed a failed implementation of the capitalist model to be built. That means regulators and politicians.

    If it is 3. then what is the problem. If you accept booms without batting an eyelid then you must accept downturns or slumps with the same commitment to your beliefs.

    Personally I see government and regulation being rejected (a change of government and the pressure to resolve the regulatory regime is likely) and the new government will need to prove to the public that it is getting value for its money. Shareholders should be sidelined because their value has been depleted by the management of the invested companies. If the U.K tax payer is now required to provide support for businesses then they should take a fair stake.

    As for pension funds, well it has been plainly clear for over a decade that the fees on pension funds are too high and the returns to fund holders too low. My own private pension is worth less than has been paid in, this is after 10 years of solid investment, suspended the last 3 years due to migration, and yet my mattress was a better investment vehicle (for me not for my provider) since 1995. With profits, don't make me laugh.

  • Comment number 10.

    Supporting the c FTSE350 companies is likely to have the same emotional support from the companies who supply them as the tax payer supporting bankers who got us into this mess.

    Obviously this, like any one measure in isolation will not solvethe credit crisis but will have a positive impact in this respect which will flow down to ancillary and local companies.

    It would be nice however if the quid quo pro for this was that the FTSE 350 companies must pay suppliers within a reasonable time 30 days and not dominate them to supply on unfair margins.

    However i suspect protecting only the FTSE350 companies will do the opposite

  • Comment number 11.

    John_from_Hendon

    If rates were now to go back to 5% as you suggest then we’d be faced with a 1000% increase in insolvencies.

    And financial disaster on a scale that would make money truly wothless!

    The idea is to make the money work our in the real world not sleeping in the BANK.

    1% 5% who cares if it buys half the goods the youre in trouble at the moment it looks like soon you’ll be able to buy twice the goods.

  • Comment number 12.

    John_from_Hendon

    If rates were now to go back to 5% as you suggest then we’d be faced with a 1000% increase in insolvencies.

    And financial disaster on a scale that would make money truly worthless!

    The idea is to make the money work out in the real world not sleeping in the BANK.

    1% 5% who cares if it buys half the goods the youre in trouble at the moment it looks like soon you’ll be able to buy twice the goods.

  • Comment number 13.

    Robert

    I'm no expert on this as you will see. Just let me indulge a moment.

    So, we're going to gold-plate corporate bonds to gilts - either to enable the roll over or repayment of existing quoted corporate liabilities[?], - as opposed to underwriting debt raised for new corporate investment? So, the idea is that the taxpayer underwrites existing commercial paper by the issue of new Government backed corporate bonds...effectively we stand the liability for huge sums of corporate debt if they lose the ability to pay the coupon and repay on maturity without incentivising any new investment?

    Whilst I can see some juicy trades on corporate gilts and the funds breathing easy, what's the aim? Sorry to be boring but who's doing the due diligence on the corporate balance sheets and how much will be charged for taxpayer services, and how much debt could be underwritten?

    Tell me, whilst we are busily providing bridging loans to the banks and the big boys to stop them falling over why isnt anyone doing any real thinking on tackling a mortgage debt-induced demand slump and asset deflation crisis.

    I hope the UK taxpayer remains good for the money in the eyes of the markets!



  • Comment number 14.

    Surely there must be some irony in watching former soviet block countries struggle in the free market as our government takes an increasing stake in private companies and banks, marxism anyone??

  • Comment number 15.

    we are hemorrhaging money and blood in the same way as the defunct banks and companies are and we still losing the battle unfortunately

  • Comment number 16.

    Funny I always though that if there was a shortage of something then the price went up.

    Or if you sold something to somebody who was desperate you held the advantage.

    So who is desperate here, because somebody is - FTSE businesses for cash or HMG Treasury for debt. Or is the situation saying that HMG is desperate for FTSE businesses to not downsize, in which case the whole mechanism has broken down because the FTSE businesses can ask and get.

    Sorry but this sounds derranged.

    This is the same problem as funding the banks, setting a contract boundary, putting criteria in place to protect taxpayer money and at the same time being surprised when the banks go their own way and do not do what HMG wants outside the contract. In what way can HMG make this sort of instruction to a business. It will do what it wants. So just what is the objective. Or are we suddenly to develop a trust for large businesses probably in trouble.

    So we appear to have captilalism on the way up, half baked socialism on the way down and capitalism as soon as any uplift comes about. Or is that not the way it is drifting.

  • Comment number 17.

    Long lunch at a yacht party Robert?

    "If you knew that you were lending to the vendor of your knickers, or the provider of your broadband service, would that change your attitude to them?"

    It most certainly would

    I would be able to demand much better quality of service and be treated with respect, because it would be my tax money that would be propping them up.

    Surely by now though the banks are going to soak up some of these bonds because their regulation requires them to have the AAA stuff for safety

    I do wonder, however, who is going to tell them just what is rated as what

  • Comment number 18.

    What is going on here?

    The government is floating an idea through Peston for:
    1 preliminary discussion or
    2 inside treachery or
    3 Peston is guessing or
    4 the country really is on the verge of bankruptcy.

    My ultra-right-wing-fascist-BNP (thank you stevenpalmer) opinion is that someone is using the BBC for their own ends.

  • Comment number 19.

    Robert you love the BIG numbers.

    What was the total amount of sterling in circulation in the global economy 12 months ago and what is it now?

    Where is this information to be found?


    DO YOU KNOW?


    Should we all KNOW?


    Will WE all know how much of this debt we are exposed to?



    SIMPLE information but hard to find.

    THE Financial BLURRRRRRRRRRRRRR

  • Comment number 20.

    The little man will end up paying.

    Small and Medium and now Big companies are to be helped out.

    If they go pear shaped then the government backed loans will be forgiven.

    The little man will not be able to get government backed loans. Nor will he be forgiven.

    The irony is that it is masses of little men that are keeping the SMB companies going.

  • Comment number 21.

    Don't know what to make of it all...

    The interventions by the State in the market might be necessary and intrinsically good (cerinly well-intentioned), but there is a history of the original objectives and reasons for Government initiatives and actions being lost somewhat in the mists of time and there is a very real risk that at a later date the Chancellor or the PM will say that what they said in 2008 and 2009 didn't quite mean what we thought it meant at the time (or what they meant at the time).

    It is doubtful whether the taxpayer will actually see the Northern Rock and the other bailout money repaid. And it is likely that the true cost to the taxpayer of buying shares in banks such as HBOS/Lloyds and RBS will never be realised if and when that stock is sold in the market.

    The Government will argue that the deals, though potentially hugely loss-making for the tax payer, were vital to the interests of the State and, therefore, worth it. In fact, the Government will be prepared to write down virtually any amount of money if in so doing they can ensure the continued viability of the financial system and avoid runs on banks etc. This is not necessarily wrong - but the Government should not assume that we don't notice when they shift the goalposts.

  • Comment number 22.

    12 the1beard

    Yes message understood, but havent you answered your own statement. The issue is demand.

    Consumer demand, by individuals.

    It is not apparent to me that providing cash to big businesses that apparently get hold of cash anyway is the solution.

    It does not matter what businesses do ultimately the customer always pays, and individual customer confidence has been destroyed by big businesses and HMG.

    They will just walk on by until it suits them. Just how many items do you need to live, you can just put most on hold. QED.

    It would appear to me to be difficult to 'intervene' and not send the message that something is needing propping up. If you can explain to me how that solves the confidence problem I would be interested.

    I am afraid I believe many businesses are fighting downsizing when it would appear inevitable.

    I also have to say I believe HMG or HMG agency policy should be released properly, not with all this sliding of announcements out via the backdoor to journalists.

  • Comment number 23.

    This is the money printing /quantitative easing exercise! By the time it happens the bank will be able to print without informing the general public, but at some point we won't be able to find the hole in the public finances.

  • Comment number 24.

    So - is this to be an indiscriminate 'wrapping in the flag', or are the government going to be picking winners again ?

    Whichever: in different ways the moral hazard will be quite grotesque, not to mention the potential for all manner of scams - and (on the scale envisaged) with no practical ability to monitor it all. The Treasury, BoE, FSA, HMRC - and the CPS - will all be completely swamped.

  • Comment number 25.

    Call me old fashioned if you like but this is getting out of hand.

    How many bankers or highly paid captains of the FTSE350 are going to pay for their mistakes ?

    Answer; None of them.

    We the great unwashed have had enough.

    This is totally fubar.

  • Comment number 26.

    Correct me if I am wrong but wasn't Gordon Brown described as the best chancellor ever in the history of the world, well at least the history of the UK, by Tony Blair before he saw this coming and jumped ship. And although there is Darling as chancellor it is clear Brown wants to be in charge of policy. And it was Browns brilliant policy that help create this lot. And wasnt it only about 6 months ago that the BoE committe had only one lonely voice saying major problem ahead, everybody else, supposed best minds available saying oh no not the case, he is just out of step. So opinion not right then, But now suddenly opinion right now. On what basis exactly, quantity of money shifted, or what.

  • Comment number 27.

    I've just been on a 3 day business trip to Germany and it was alarming...

    1) For those of you who use Manchester Airport you will know you that you have to drive around for ages to find a space in the Long Stay car park T1/T3. It was empty! I found a spot near the entrance.

    2) There was no queue at check-in and it took two minutes to go through security.

    3) My plane was so empty that we were distributed around the plane to balance out the weight. It was about 20% full.

    4) On arrival in Leipzig (Halle), Germany I found a queue of taxis waiting for customers. Normally you queue!

    5) The hotel I normally use was dead! Last night there were 3 people in the bar and 4 tables occupied for dinner. This is a four star hotel, second best in Halle, normally you have to search for a table.

    6) On the return journey this morning all the package holiday shops at Leipzig airport were closed, bar one. I've never seen that before.

    7) The plane back was only about 10% full and there was only one person in business class (not me).

    On picking up my emails this evening our company has banned all meetings greater than 15 people (teleconferencing is suggested as the alternative), financial reporting is now weekly instead of monthly, all cancelled orders must be immediately notified to Global HQ and our Annual Global Service Conference has been cancelled (this is unheard of).

    We are a cash rich manufacturer and a service provider to the global energy sector and the large industrial sector employing over 120,000 people world-wide.

    Very worrying times indeed!

  • Comment number 28.

    18 sosraboc

    Thought you were a renegade banking type who had failed to take brainwashing programme.

  • Comment number 29.

    I agree totally with #25 Poulticehead

    When will heads start to roll...when do the prosecutions start?

  • Comment number 30.

    monetize the debt..... monetize it all

    screw the small businesses though... and the medium businesses

    after all who would buy their debt when ftse100 issuesd debt is gilt edged !!!

    this is insane.. another insane idea designed to anhialate lending to small/medium companies....

    and what about equity... is the government going to guarentee that with my money ? how far down the capital structure will they go...

    wait a go improve the credit rating of us all though CDS spreads 200+ here we come...

    the mind boggles at the insanity

  • Comment number 31.

    Will our so called "Elected MP's " ever get a vote on anything or is Rambo Brown, Judge, Jury and Executioner.

    Didnt we once have a democracy in Britain !

    More good money after bad and the gravy train rolls on and on and on, except for the poor taxpayer who picks up every bill




  • Comment number 32.

    the black market is set for massive expansion cash is king

  • Comment number 33.

    NOTES FOR FORM 3 HISTORY SYLLABUS
    ST. CUCKOOLAND PRIMARY
    MICHAELMAS TERM 2020:

    First the king and his barons ran trade

    Then the king retired and merchants ran trade

    Then traders got so rich they paid for welfare providers

    Then welfare providers got so rich they bought out the merchants

    Then the people all went to heaven

  • Comment number 34.


    This is just what Lehman's et al were doing for sub prime mortgages on a bigger scale. Take something that is quite probably rubbish 'bless it' and sell it on as AAA.

    Was the 10Billion in guarantees for SMEs today just a token so there is less resistance for what they really want to do which is to hand the big guys a few 100Billion tomorrow and and another bail out for the banks.

  • Comment number 35.

    For worse.

    First, who guarantees the taxpayer guarantee of that debt? What if the taxpayer (us - including those very companies) fails to deliver the goods? There are numerous plausible ways, through reduced spending, earnings, or increased demands on the state (ie losing jobs and then claiming benefits). Then we have a sovereign, not a private sector default. The problem with removing the boundary between the private and public sector is that insolvency becomes free to cross it. How do you ante up from there?

    The issue of exactly what tax receipts are actually available to back the government's guarantees will become all too clear next year, as Ireland is already discovering. Remember - taxable income is finite. This is a crucial area of weakness in the government's handling of this crisis. What income is available and what leverage is acceptable is what defines the quantity of public credit available for market intervention. Where is the study? Where are the journalists' questions? Is necessity being considered to the exclusion of resources?

    Second, what part of the budget will see spending cuts to make way for interest payments on all that extra public debt when the unfunded liability crystallises and demands funding?

    Third, what portion of those bonds has currency risk? Is there a hint of a positive feedback loop here?

    Fourth, what entitlement do companies feel they have to the public's money which they have not earned in the marketplace? Companies do not fail simply because they could not roll their debt. They fail because the revenue and profits were not there to justify rolling it or buying the whole thing, and that happens when people choose not to give them their custom. Who is the government to reverse consumer choice? What message will successful competitors receive when they see their best efforts made void?

    Fifth:

    "If you knew that you were lending to the vendor of your knickers, or the provider of your broadband service, would that change your attitude to them?"

    Yes. Do not give them the same money twice.

    Any company that takes public money is a company I believe the public will be happy to boycott in favour of its competitors. Brown thinks the public will not get to vote on his policies for another year, but the public votes with its wallet every day.

  • Comment number 36.

    "...a "sovereign wrap" around bonds and tradable paper issued by big companies."

    That reminds me of monoline AAA wrap. We all know how that turned out. Insufficient income to pay claims.

  • Comment number 37.

    28
    Yep, wanna join the Che quera sera?

  • Comment number 38.

    They have discovered the 'UK taxpayers credit card'' and like a couple of WAGs in a jewelry shop...they know how to use it.

    ''What about this one labelled FTSE100 companies..looks expensive.. can we afford that as well?''

    ''Shhhh we are nearly maxed out of the real stuff so dont tell anyone but we can buy that with money we just printed to keep up with minimum payments''

    ''What about the markets, wont they be worried we dont actually make anything of substance anymore and are not self sufficient in anything so it will be difficult to pay it back with anything real, is there an international market for the services of 2,500,000 red tape driven elf n safety killjoys or paper backed by nothing but thin air''?

    '' Dont worry about it we are all in this together..repeat after me GLOOOOBAL, one goes down, we all go down they would not dare, WE ARE TOO BIG TO FAIL.. use it''

    ''Oh mandy your so clever''

    '' Just keep practising , repeat after me when you see a camera or a journalist say ...Gloooobal.........do nothing party.....hard working families''

    Jericoa













  • Comment number 39.

    27 wakeupbritain

    What you may be seeing is a slump. What you are describing as a new work regime could presumably have been introduced before this but there was not the imperative. Not the desire or need. Seen it before, and that sort of transition.

    So what it really says is that there is a new mentality on the control of resource, whether time or money or travelling to meetings. Amongst big companies who were or are still okay for cash. And what is going to happen if ok or not after this slump. Do you think they will say ok go back to the way things were. No they will say stay tight.

    So there will be a drop in the sort of previously acceptable behaviour and the associated businesses living off it will have to accept there is going to be less business.

    So as usual there are two or more things going on. Drop in activity initiates change of behaviour, irreversable change. So even if it all goes back to the previous level there still will be a drop. New solutions will be found to do the business. Scrapping travel will be green.

    This is why HMG startegy, whilst not disclosed to any extent, probably is weak. It will be focusing on the restoration of the previous. A resurrectionist movement. It was a major mistake to make the decision not to invest public money into new technology such as the internet next generation infrastructure to support new working methods. Unlike the US where Obama has made it central to his recovery plan.

    I am afraid it is inevitable that the economy shrinks, even if the cash availability suddenly returned to 2007 levels, a government wish I am sure, new behaviour would still demand a smaller economy.

    That is why this desire to go around propping up is next to impossible to assess for implementation purposes. The landscape is changing, any assessment is likely to be wrong.

    If you wanted to be unkind you would say they probably do not have the capability to make any such assessment so it will definately be wrong.

    This is without then looking at individual behaviour changes ie at a domestic level.

    So it really is best to think in terms of a drop in demand and a smaller economy, smaller tax income to HMG and the associated implications on the public sector and finances.

    If you see what I mean.

  • Comment number 40.

    My father's modest investment income has gone up in the past 3 months. Turns out he invested in bonds in funds that lend money to corporates. They now pay more interest so he gets a better return - currently 6-7%

    Now, if we taxpayers get the same kind of return on loans to companies instead of the paltry returns on offer on the high street, then it seems like good business to me.

  • Comment number 41.

    It's a worry

    All this extra regulation,power and control being handed to government.

    The government is really the Civil Service of course. The politicians are just the front men.

    Then Lord Digby Jones tells us that there are far too many of them,they are practically moribund, a significant proportion of them should be sacked, but the word is not in the Civil Service dictionary.

    It's a worry

    (They get nice pensions though)

  • Comment number 42.

    27 and 35

    Scariest posts for a long time,

    I think we are looking up the fundamental orifice and if we are not quick we may not get out of the way of the output in time.

    Brownian motion I believe it is called.

  • Comment number 43.

    To answer Bob's question there are a fair few FTSE 100 companies which I personally wouldn't mind lending a few quid to.

    Unfortunately I very much doubt it would be these that will be on offer.

  • Comment number 44.

    #35 So true and so obvious. For anyone with savings one of the most rational things to do is convert to gold.

    Maybe gold will fall - but not as fast as the currency. Maybe there is some risk, but a lot less than rushing out to buy more tat that you easily do without.

  • Comment number 45.

    35 werringtonsilent

    .... "If you knew that you were lending to the vendor of your knickers, or the provider of your broadband service, would that change your attitude to them?"

    Yes. Do not give them the same money twice....

    lol

    Or - dont do it you'll get your knickers in a twist.

    Or - Have they been caught with their knickers down.

    Or - dont look at me I go commando.

    The possibilities are endless, just like finding people to loan money too. Err isnt that how this started.

  • Comment number 46.

    '......"sovereign wrap" around bonds and tradable paper issued by big companies.........'


    if you didn't know any better, you would say that sounds awfully like an, .. er.. sub-prime collateralised debt obligation.

    Our Government is going to buy up a whole load of crap and worthless paper, and that's going to get us out of the problem?

    Well cut off mah legs and call me Shorty!

  • Comment number 47.

    So why Robert did it take you until 6:50 pm to post this ?

    Perhaps becuse if you'd posted this at 6:50am there would now be about 1000 post all rageing against this incompetant government who are in league with the bankers and big business ?

    Instead you slip it out so no one gets time to reply - complain.

    And where exactly did I sign up to this ? Where did I agree for my money to be used to bail out failed businesses ?

    Where did I sign on the dotted line to make this legal ?

    Can some one please state what legal recourse I have to STOP my money being taken from me and used in this way - against my will ?

    Molotov cocktail anyone ?
    I'll have mine with an olive in please.
    Shaken to the foundations - cause the disempowered masses are goinging to start stirring...

  • Comment number 48.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 49.

    So Boots Tescos and so on are suggested for getting a bailout? What about big construction companies and BP etc?

    Yesterday we're told that they enforce late invoice payment with a discount to boot because they want to ease their cashflow, without a whit of concern for the farmers and other small suppliers.

    And now we're expected to swallow bailing them out as meekly as lambs to the slaughter?

    IF THEY HAVE CASHFLOW PROBLEM, THEY DON'T DESERVE A BAILOUT.

    Give the money to the suppliers as a subsidy to offset the financial bullying of these giants. Then offset the cost of these small supplier subsidies by fining any giant plc paying their bills later than 30 days and/or imposing a settlement discount.

    They play dirty and are guilty of the same arrogance and greed of the banks.

    Level the playing field now and stuff them!

    Then fund any new start up business which fit into a local economy infrastructure. Even bring back local post offices.

    Money well spent I'd say.

  • Comment number 50.

    Robert,

    This is all good stuff, but I'd like you to post details, or at least links to details, of the "real" features of these bailouts. Right now I'm just getting numbers like £12bn thrown at me. No-one can comprehend that amount, it's just a number. We need more details about how it will work! All the little stuff, even if it's just an aside in your blog of "if you're really interested look here!"

  • Comment number 51.

    32. metallicinglewood

    'the black market is set for massive expansion cash is king'

    That is a worry for them, further drop in income to treasury. Have to cut back on the MPs expenses accounts, that would save. Every little helps.

    There is a barter capability a LETS scheme. Local groups can get together and tax free trade services, they accrue credit 'tokens' they can trade within their group. They usually fail because of the limitations of services on offer. It would be interesting if one was set up big time, it may then work effectively. One town has already floated its own currency. Bit of a gimmick but intended to keep money in the town traders.

  • Comment number 52.

    The sky is falling on my head and I am NOT Chicken Licken.

    Buy a manky cabbage because it's been re-covered? Hell, no.
    Have we learnt nothing from the demise of the masters of the universe?
    To (mis)quote Gordon, I'm all for apprenticeships but this is no time for recycling.

  • Comment number 53.

    Robert:
    Thanks for this...

    I feel sure that the time is drawing near when we as tax-payers must consider standing up and calling 'No more...'

    Are our Captains of Industry really no more than mere Donkeys, leading our once great nation down the path to ruin? What are they playing at? Has this crisis not been looming for some little time now? What have they been doing... Reviewing Executive Pay?

    If the suggestion is that, having seen my share portfolio - nest-egged for the past 25 years in 'safe' Bank shares... more than decimated - I should accept that my pension, and all my savings be handed over to The Great Gordo for one last 'hurrah' at the roulette wheel; then I say no - now.

    We have over-indulged. We tacitly permitted our once staid Bankers to lay waste to Prudence. She can no longer stand our ravishing.

    It's pay back time - however uncomfortable...

    If we are lead to provide support, then it must be conditional. The risk profile of these companies must be considerably more fragile than those of our Nationalised Banks where a Risk Premium of 12% has been negotiated. If these businesses are worth saving then they must be prepared to be 'squeezed' until every last pip squeeks.... Full apologies for failure a prerequisite. Resignations. No pay-offs. No bonuses for 5 years... No reward for failure...



  • Comment number 54.

    #11&#12. the1beard wrote:

    "If rates were now to go back to 5% as you suggest then we?d be faced with a 1000% increase in insolvencies."

    Look, if companies can only survive if the can get access to free money the are no longer in business. Interest rates will go up - that is the natural order of things, that is if money can recover any value.

    The longer we try to keep money as a worthless commodity the longer the problem will continue. What is the point of an economy that can only run on worthless money? Is it really an economy any more? Is it an economy that is worth running?

    Insolvency is the markets way of recycling the value of a business at it proper value. Doing what we are attempting to do:
    1. will not work,
    2. is not a medium term solution
    and
    3 delays fixing the problem which prolongs the depression.

    Whilst I do not agree that insolvencies will rise by ten time as you assert - even if it did then the economy could start to recover - propping up the living dead cripples the economy and that is all that will happen if good money chases the bad.

    I repeat money need to be valuable to run a stable functioning economy. It has to cost to use it and it need to be beneficial to own it.

    The dear oold Bank of England is destroying the whole concept of money - what it is doing is undoing 315 years of more rational economic management. It is a disgrace, nay an economically unsound and insane disgrace.

  • Comment number 55.

    And aren't Tescos a bank as well? If they need a bailout out...? Need I say anymore!

    If GB thinks this is a good idea he can't possibly have a finger on the pulse of our nation!

    Does he want to drive us all to become revolting? Or is he so struck with the USA and being the saviour of the world that he's forgotten something really, really important-

    We don't have a Federal Reserve!

    Oh 'Woops! Apocalypse!'-missed that one, didn't you dear?

    Never mind, I'm sure you have another 'absolutely fabulous' ready to 'leak' tomorrow!

    Instead of Raiders Of The Lost Ark, we'll be watching Raiders Of Her Majesty's Coffers (as in the Bank of England). Bet poor ole Mervyn has put a double night shift on to keep the printing up with the daily initiatives being announced!
    I can just see him getting a midnight text saying 'you're not going to believe this, but we'll need ANOTHER 600 bn tomorrow. Shall I order double coffee and energy drinks in the morning?'!!!

    If all this madness wasn't so serious, I'd be having hysterics! It would surely win a British comedy award!

    (ps -dear moderators, this isn't defamatory,as you claimed one of my posts a few days ago was, merely a regurgitation of what's been said by others. So I would be pleased if you didn't pull this one!)

  • Comment number 56.

    37 sosraboc

    No not at present - busy in darkest wales for mo. Somewhere sunny later in due course if endless wet dont stop and elsewhere not desertification. Who knows might be costa here yet.

  • Comment number 57.

    This is really a no brainer.

    the debts racked up by FTSE-100 companies are their responsibility not the taxpayers.

    1 We have no way of knowing which of these companies is likely to survive the global downturn. We are therefore exposing the taxpayer to even further risk that cannot be quantified.

    2 Most of these organisations have already denuded the British economy by moving supply and manufacturing to Asian countries thereby reducing our ability to protect ourselves from the coming onslaught.

    3 How do we define which of these companies are actually British?

    4 What assurances do we get in return? e.g. continued levels of employment, R&D spend, etc. etc.

    There is also the unanswerable question - why should we support corporate executives to continue in their roles when they have put those organisations in jeapordy?

    The City will find the finance for those firms who they believe are worthy of the risk - at a cost.

  • Comment number 58.

    further to #54

    The Japanese economy shows us what happens when a zero interest rate policy is pursued. But for the rest of the World buying Japanese goods virtually no growth would have taken in Japan for a decade - indeed much of the growth has been achieved by outsourcing manufacture to low wage rate economies.

    Unfortunately the whole world is contracting and no country that lives by exports has much hope of an export led recover any time soon as the Germans' and finding.

    The UK is particularly vulnerable and in a desperate situation as it has virtually no manufacturing capacity and relied on financial services as it engine of growth, but the is precisely the area that is predicted to shrink the most rapidly. Add this to hugely overvalues assets scattered through the economy (e.g houses, but not exclusively) We can be expected to enter a crippling and devastating depression.

    Further this depression can only be recovered from if the old overvalued asset, be that FTSE business of houses are very rapidly depreciated to reflect their true worth. It is no solution of any kind to prop up the living dead. The longer we do so the longer and deeper the depression will be.

    Safeguard people - provide soup kitchens and shelters for the dispossessed homeless, but do not on any account interfere with the market's self regulatory system of bankruptcy.

    If a business can only survive on free money it is not a business and must go bust.

  • Comment number 59.

    44 armagediontimes

    So there you go. You have declared your school of thought. Old school. The type that rarely get in trouble, occassionally some do, but that can happen to anybody. Not a Brown bubble type methinks. So you say I'll walk on by. Sit tight. Sound judgement, well in my opinion. But not what HMG wants you to do. So it is simple. What circumstances encourage you to spend. Not a lot at present at the risk of putting words in your mouth. So the bubble brains are bust. Old School quiet. Business must hibernate or downsize, has to downsize anyway. Economic growth when Old School says so, they rule, or housing market recovers. Not 2009 it would seem. HMG missed the boat. Not quick enough. Problem is housing forcast to fall 2009 so it will, simple as that. If Old School spend 2010 too late for Brown at GE.

  • Comment number 60.

    It's time to leave the country.

    It's the only way to opt-out as far as I can tell.

  • Comment number 61.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 62.

    Over recent years we have been administered countless doses of anti terror sedative...now the critical, paralysing dose of financial meltdown is being fed introveniously.. we lie immobile in a force-fed state of self percieved helplessness....

    Does anyone else out there feel that this 'global economic disaster' is just another chapter in a ultra-high-level move to this supposed New World Order, recently coined by our illustrious Premier Comrade Brown himself? The new global monetary system will inevitably rise in time to ensure 'financial stability for us all'

    From George Orwells Animal Farm
    "All animals are equal, but some are more equal than others"...
    ..in his book 1984, Britain is no more than Airstrip 1 for State Europa...
    Of course....the new runway for Heathrow, it all makes sense now!

  • Comment number 63.

    As WillPegg quotes just meaningless words and figures. The devil is in the detail. These are interesting times indeed.
    All of these quoted "companies" who have been mentioned will require various degrees of actions. Many will require downsizing, many will require loan support some will be unsalvageable some will require nothing. The wise comments so far are speculation only. The results of the proposals will only become clear as the plans are put into practice and the results will be totally dependant on the assessments and plans of the executives of the companies and whoever conducts the due diligence.
    As taxpayers we are all going to be clobbered either way.
    The best bet is to put up the shutters and support your local producers in the hope that if they still have a few quid they will spend/invest it your way.

  • Comment number 64.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 65.

    This move is overdue-a problem arises if the government then nationalises the banks- there will be even less confidence in the government/UK economy with these guarantees becoming ineffective, and the government will be into printing money as no one will want to buy its bonds.

    The government also needs to reduce capital ratios and buy asset backed securities.

  • Comment number 66.

    And Im free, free fallin
    Yeah Im free, free fallin
    Free fallin, now Im free fallin, now im
    Free fallin, now Im free fallin, now im

  • Comment number 67.

    # 42

    You think thats scary, I have got a meeting with my Director tomorrow, I have got 8 staff and enough solid order book for about 3 of them starting next week yet a potential order book for about 15 people.

    How do we guage in the current climate what potential work will come good or not? How long can we wait to take a more informed view when the whole nation is waiting for something? What exactly? Noboddy seems to know! A kind of economic psychological paralysis is growing in momentum.

    My team are good, well balanced hard working highley skilled people who work for each other in a very effective team with a very good reputation in a real industry. I think they are all great individuals selected very carefully and a credit to what this nation can produce.

    After the meeting with the Director I will be meeting them. They are young dynamic and have sensible mortgages secured on a solid career in an area which has had a skill shortage for as long as i can remember because it requires both solid analytical skills and intuitive skills to do well.

    Now that my friend is scary.


    Jericoa








  • Comment number 68.

    The rating agency and bond insurer experience of last year has already showed that if the underlying credit quality is say BB, an AAA wrap does not do much to change the price at which it trades and therefore the yield and borrowing cost. It might influence the trajectory at most.

    Investors perform their due diligence and if the fundamentals say 20% yield, that is probably the bid. If someone is stupid enough to wrap it with higher credit quality, they may just say "mmm... free yield." Look what happened to US agency debt. Instead of sending yields lower, the immediate effect was to send Treasury yields higher, towards where agency paper was trading. The bond bubble has since undone that, but the risk is clear. The government would not be lending its credit rating, it would be diluting it. That is unavoidable as soon as anyone backs someone else's debt.

    The government will have received lots of sophisticated advice on this, if they are actively considering it. I do not see the upside. Would they care to explain?

  • Comment number 69.

    what have I done now?!

    One post referred and another totally disappeared!

    What a shame-they were so funny-and on topic too!

    Obviously I'm not even allowed to share the opinions of others and have fun at the same time!

    I'm hardly a revolutionary, nor a threat to national security!

    Big businesses should be able to sort themselves out-is there such a thing as a loan-a-holic?

  • Comment number 70.

    Robert
    I have seen you speak in person recently, and have read your blogs.

    I think you are blagging, but i suggest you make the most of it because there is something else going on here that you haven't spotted yet.

    All the best.
    rgds
    ronan

  • Comment number 71.

    Post #27 most worthy of everyone's attention.

    What I don't see discussed by Mr. Peston, or many others is the simple concept of Moral Hazard.

    With that much money, and that much power, vested in that few hands, the temptation to corruption becomes nearly overwhelming.

    We cannot simply trust that all people are well-intentioned in both business and government.

    Additionally, there comes a point at which the citizenry becomes literally 'de-moralized', concluding that their lives and work are being consumed in a 'fixed-game', in which the honest and prudent are certain to lose.

    At that point, the Hazard becomes more than Moral, it becomes Social, and the veneer of civility begins to wear terribly thin.

    I do not advocate that--in fact I pray daily that we are all spared that outcome.

  • Comment number 72.

    "And when I say "you", I mean all of us, as taxpayers."

    Up to a point Lord Copper: tax receipts are falling. So this money will not really be "lent" by you and I. Money is created and destroyed by sleight of hand. Regard money as what it really is, not a commodity but an entitlemet to consume goods and services. The question then becomes where does the bulk of this entitlement to consume lie; is it being used, and, if so, for what?

    The government's plan is to enable creation money that will be spent now. If this is used to invest in the productive capacity of the economy, fair enough. If it is used to fuel unnecessary imports, then not so good. But is this "new" spending power really being used to bolster the powerful and parasitic against the productive?

    It seems to me that the free market is dead. What is emerging at the moment is a sort of corporate state capitalism without the Nazi party - or perhaps a new industrial feudalism: patronage dispensed in return for fealty. It appears that under the new order, rewards are going to the new corporate state elite and their friends. These will be exempt from what used to be called "the discipline of the market", whereas others will be allowed to be destroyed by the economic storm. There seems to be no plan to cater for society's needs, only a plan by some to keep hold of their ill-gotten gains.

  • Comment number 73.

    Government is stepping in because of market failure. Business needs access to credit and the whole point is that the market is failing to provide it. Unless we want to see an increase of unemployment to 30% the government has to be willing to play some role in ensuring that lending continues, either by providing support for the banks so that they can continue to lend or as now by direct lending.

    Europe now appears to be in a worse mess than either the UK or the US having cut interest rates to 2% today. I suspect that governments will continue to have to make loans and stimulate the economy through fiscal measures and even lower interest rates over the next year. The alternative is much, much worse - massive and sustained unemployment and lower economic activity.



  • Comment number 74.

    This is ridiculous.

    This is where the government is starting to go badly wrong.

    These big companies have been borrowing money over the last 5 years or so not to invest in new products and services for their customers, but for just one reason alone..... to return money to their shareholders, financially engineer so called better returns for them, and ultimately pay their executives better bonuses.

    We need a kind of Chapter 11 here in the UK so that a company that is basically bust can reform in an orderly manner (the pre pack deals that have started happening are a step in this direction) so that new managements who can manage the assets better can take over.


  • Comment number 75.

    ha ha, we guarantee FTSE listed international organisations. They then close even more of their UK subsidiaries (cost saving of course) and use their new found capital overseas!

    What a away to run a country!!!!!!!!!!!!!

  • Comment number 76.

    One final thought. I wouldn't lend to the vendor of my knickers. I might well lend to their manufacturer though: there are too many vendors who grow fat on the backs of the manufacturers.

    Fair trade was thought of as a way to help the third world. We need a new fair trade standard to protect our home manufacturers/producers from the middlemen.

  • Comment number 77.

    #54 & #58:

    Agreed, if free money is a prerequisite to survival than what is at hand is a classic "fair weather" business that has no prospects in a recession, let alone a depression. Recycling is a great analogy, bankruptcy really does give someone else a chance to pick up equipment and staff which they could never afford otherwise and have a shot at doing something more productive with them than the original owner could.

    Unfortunately the government is quite happy to let the wheels of the economy spin in the mud and not take us anywhere, rather than ask the passengers to get their hands dirty and risk unpopularity. But when the fuel in the tank runs out, the wheels will stop.

  • Comment number 78.

    #69 Tigerjayj "I'm hardly a revolutionary, nor a threat to national security!"

    I don't know - you do think for yourself! I have an old T shirt with a silhouette of the Rodin sculpture and the slogan "I think, therefore I'm dangerous". Perhaps we blogsters should commission a bulk supply?

    Good night all!
    ;-)

  • Comment number 79.

    #73 stevenpalmer wrote:

    "Government is stepping in because of market failure. Business needs access to credit and the whole point is that the market is failing to provide it. Unless we want to see an increase of unemployment to 30%..."

    The market is working. Its conclusions about the number of businesses that are insolvent are unwelcome.

    The market is failing to provide credit to businesses that are already insolvent or have no reasonable expectation of surviving the necessary deleveraging - as it should.

    A depression is baked in, we only get to choose whether the currency survives. The present course says no.

  • Comment number 80.

    Another Angle

    Gordon Brown is a flawed man

    Last Year he has been humiliated and crucified in Parliament by Cameron and the Conservatives

    He hates the English too

    This Voodoo economics and crazy Billions of guarrantees by Taxpayers is simply his REVENGE

    Gordon is going out with a Bang!!!!

  • Comment number 81.

    #73 stevenpalmer.

    There is a limit to support. A full blown guarantee given to FTSE listed firms goes well beyond an acceptable level of risk for the whole state.

    We are at the beginning of a long depression (more like a slump). If we are to use our national resources then we have to cherry pick those organisations that we are going to support. I'm sure you will find that the same will happen in both the Euro countries and the US.

    Unemployemnt may well reach 30% levels. If we have used our resources in a vain attempt to prop-up firms then we realloy will be a basket case.

  • Comment number 82.

    Well one thing is for certain - the UK economy is totally ruined.

    Instead of doing the decent thing Brown is determined to take us down with him. The taxpayer cannot possibly take on all these liabilities.

    Labour call the Tories the do-nothing party. But sometimes it really is better to just let nature takes it's course, rather than try to keep the show on the road and in the process make the currency worthless and the public bankrupt.

    Like it or not we are heading back to a subsistence economy, so better get used to it. Anyone with any sense is putting their money into gold and thinking about how they can grow enough food to survive.

    I just wish I had a chance to show Labour what I think of them via the ballot box.

  • Comment number 83.

    Do "we the people" get shares in companies that are given loans from our hard earned monies?

    Do "we the people" get any return of any sort on these support measures?

    No. Didn't think so.

    Instead of bailing out companies with our money the government want to be looking at why merchant bankers are raking it and call in the taxes that have been unpaid by the rich in this country that haven't taken measures to put their finances off-shore.

  • Comment number 84.

    Aha Sasha!

    That must be it then!

    There have been an inordinate amount of posts referred and removed in the last couple of days...I'm seriously thinking it's because the referred posts are way too close to the truth of the situation, and we wouldn't want to inform or scare anyone, now would we?!

    Should I expect a loud knock on the door in the middle of the night?!

    Regarding the 'knocker' comment, Robert, I would probably ask if they were made in England!

    Where money should me spent. As a previous poster suggested-give these corporate and retail behemoths the money and they are going to spend it ion another global economy and not the homeland.

    A question for anyone:

    Global economy
    Global credit crunch
    Global recession
    Global depression
    Global debt in the trillions

    If no country can service their debt, and there was global default on global loans, what would be the outcome?

    Of every country had to write of the debt of another, all the debt would be gone, the credit rating agencies wouldn't be needed and we could all start from a clean sheet.

    What a nice dream!

    No doubt I'll wake up soon!

    Night night.

  • Comment number 85.

    The West moves east and the East moves West. Former staunch communicsts and KGB agents turn capitalist billionaire. Tory suggesting state-ownership. Invest banks goes carpet beggar for $billions or tax-payer handouts ...

    At the rate we are going, in a few years, the former communist countries will become semi-capitalist with market economics while the Europe/UK/US will anything but capitalistic. It would be ironic and unthinkable only 6 month ago, but now probable.

    No, capitalism has not failed per se. It's biggest mistake is to trust those who are followers and worshippers of G.O.D.
    (Gold. Oil. Dollars) to whom all *isms are only means to an end.

  • Comment number 86.

    It all comes down to there being two ways to enter a depression - with a solvent government and a viable currency, and without.

    Or, sailing into a storm with bulkhead doors shut, or open.

  • Comment number 87.

    # 85

    Sorry all.

    On this stupid darned phone with it's weird predictive text so previous post seems a little odd.

    Night!

  • Comment number 88.

    An analogy for these times is the pictures you see of houses near the crumbling coastline of the UK.

    It must be heart breaking for those who have lost houses as the coast has fallen into the sea, and very painful for those who have had to leave as the foundations are no longer safe.

    The cost of fighting against the inevitable would be massive. Although technically it would be possible to pile drive some sort of new foundations, there would be risk of making the problem worse, and anyway, it will not stop the sea continuing its course of action.

    Anyone not emotionally attached would say the sensible course of action is to rebuild in a new location.

    Applying to the financial crisis...Unfortunately it seems impossible for modern politicians of all parties to state the obvious course of actions. We have built the last 5 years on debt that will take a generation to repay; we are entering the next 30 years where oil will become increasingly short (as we have past peak oil), and so the very foundation of modern prosperity will become eroded.

    So PLEASE Mr Brown, open your eyes to see that we need to lay new foundations for a prosperity built on a simpler life, where we use technology to do more without needing to physically move by car/plane, where we have rich lives based on relationships not materialism.

    Only when you have a vision for the future can you wisely invest in things that get you there.



  • Comment number 89.

    #79

    The man from Stoke has hit the nail on the head!

    Do we really want to transfer the insolvency of companies to the insolvency of the UK.

    That is where we are heading if we carry on down this route!!!

  • Comment number 90.

    Look at all the posts here....they are all so negative and downbeat.
    People are very angry and hurt and in shock.
    There is of course understandable concern about this necessary corporate lending but there is also evidence of a major problem in economic and self-confidence.
    One possible explanation for such pessimism is that I think a lot of the people posting here ,and people in Britain as a whole, have sustained big losses, many of them now seeming irrecoverable.These losses have occurred in their pensions ,shares or share options, investment funds, endowments, savings funds or savings interest,or else they may be disadvantaged by having a now high fixed rate in their mortgages, or their bonuses have fallen.
    There is a profound sense of loss.
    In effect ,there is a bereavement reaction and with it come various patterns....anger, blame,despair, depression, denial, displacement ,guilt, acceptance, and hopefully recovery .
    Those losses were people's pensions and nest eggs, their future plans, their ability to pass on moneys for their children's education, weddings, holidays and the little extras that remove life's drudgery.
    These are the people who had denied themselves things in order to have a better future.
    Most of us believed in the ever-rising property market , but at the moment it looks like it was too good to be true.
    And so the anger and disappointment is real and someone has to be blamed for it. And for these people the government are the ones to blame though in reality the government has no control over the price of shares or property nor is it the cause of the global financial sector downturn and its devastating aftermath.
    Government can tinker about with a few percent of GDP here and there but really it has limited power.
    What it can do is to inform and to lead , to mitigate and to plan.
    These victims feel that the people who caused this problem, the bankers and corporate splurgers, are getting off with what they have done.
    Their anger and hurt is real and Gordon Brown has to make it plain that he understands people's pain, and why they are angry, and to think long and hard about how people, not just companies ,might be helped to recover from these losses.
    Labour has traditionally always helped those who have never had assets, who have made no provision for their futures, out of a genuine humane impulse.
    But those who sacrificed themselves for their futures feel hurt that they are unprotected and their efforts were in vain, and that there is no support for them. And these people are a huge percentage of the population.
    Words of cheer, news of greenshoots will not restore their fortunes, and so whenever the government try to convey how hard they are trying it does not placate those who have lost so much.
    If Labour are to be re-elected,which is looking like a longshot, Gordon Brown needs to convince these people who have lost in the crunch that Labour are on their side and will help them to recover.
    The Tories are the natural party for these people, who switched to Labour in the last 3 elections.. And Cameron has been adept at seizing the opportunity this presented.
    Labour have to think outside the box about how to win middle-Britain back.
    Now Gordon brought Mandy back, and though he is the one every one loves to hate, he is a super -strategist and is doing really well batting for Britain.But he is not a leader.And we cannot go through another leader change in the Labour Party.
    An election now ,or another change of leader would not help Labour.
    No , we need ........

    The Return of The Jedi!

    Desperate measures are called for....and that means Tony Blair.....not as leader, but as a crisis manager and spokesperson to help Brown, a Blair newly chastened and insightful about Iraq and Afghanistan and Gaza ....he could say all the things that need to be said that Gordon cannot say. Tony is a natural middle-Englander ,and it is interesting that the anti-Scottish backlash is now a major force against Gordon Brown.
    Gordon could be seen to eat humble-pie and Tony could speak up for Middle Britain (which now means 80% of Britain)... and sweep in some changes which might include.....

    1Making London and the major cities and suburbs enterprise zones with tax windows for five years for developers and new businesses.
    2Possibly reintroducing MIRAS to get the property market on its feet..
    3As a newly retired person Tony could head a new Greypower initiative by the government.
    4Help with tax for the retired who want or need to work
    5 or who employ carers.
    6 Taxbreaks for employers taking on older workers.
    7Looking at university fees and taxbreaks for parents of students.
    8Imaginative schemes to allow advance payment of inheritance tax and cgt in order to reduce future tax liability.This would bring money into the coffers of the government without any interest.....borrowing against the future but a different government's worry.
    9Taxbreaks for grandchildren's education and even schoolfees.....it saves a state- funded schoolplace.
    10A hard look at how incentives to work are being lost by high taxes, limitation on working hours, and high childcare costs....
    11could there be taxbreaks on childcare 12and domestic help
    13 and second jobs?
    14A lot of childcare is done unpaid by grandparents, if this was tax-deductible it might help.
    15partial amnesties for "black economy" workers to get back into the system.
    16 A more public drive to enforce tax payment by black economy workers.
    17And borrow or steal anything useful the Tories and Libdems have come up with....remember these are desperate measures! And admitting it would be a surprise tactic too.
    18Could there be transferable taxbreaks within families on big losses in pensions,savings accounts, and share values to give some value to the losses people have sustained?

    If some drastic action is not taken by the government to bring middle-Britain back on board it is game-over for Gordon.
    Now I actually believe that the economy is going to turn soon, that not everyone has lost, that Labour are trying hard, but it is going to take more than cash to companies to change public sentiment.
    Remember, Gordon , it is real people who have real votes who matter.
    You are big enough to do it Gordon, and Tony, you are dying to get back on stage.
    And you had both better act quick or you are both history!

  • Comment number 91.

    #88

    I couldn't agree more!

    Shaky pyramids built on sand.

    Come on leaders, give an honest appraisal of how bad things are, what the short term future holds and then a vision of the future and what we need to do.

    I for one will be glad to see the back of materialism and welcome local communities.

    Think local, not global.

  • Comment number 92.

    #90, you're right, with loss comes realisation. I think many people feel they have been conned, cheated because they believed in a system that now appears false, fundamentally flawed, that was doomed to failure all the way along. We have run out of resources to continue fuelling the pyramid sell.

    A change of government won't cure this. We need to re-evaluate our beliefs, our values, our own lives and communities, our personal contribution, or responsibility to each other and those yet to come. This is serious stuff. This is the stuff that brings down Empires, ends eras etc.

    Our whole system of government, leadership, democracy, representation, law, trade, recompense, duty, individual responsibility are all now in question. And rightly so...

    The Industrial Revolution has come to and end; wealth and prosperity only made possible by exploiting oil that has past it's peak.

    We have to fundamentally challenge the last 130 years of "progress". This will not happen until we get to the "acceptance" phase of the change cycle. That acceptance will be "My name is ..... and I'm a materialist, hooked on retail therapy and keeping up with the Jones's". Politicians will be the last people to get there! To do so will be to admit failure and relinquish their power. In their anger/denial phases they will only make matters worse, which is what we are seeing now (and worse to come, I wouldn't rule out war).

    The most worrying thing for me is the US, it's evident to me that they are no longer an economic superpower. They will struggle to comprehend this, even dare contemplate it.

    So... Hats off to the first world leader to say "this isn't working, we need a new way to live!"

  • Comment number 93.

    Under this New Labour Govt everything seems the wrong way around, Public services (Fuel,Water) put up their prices to pay for new equipment, they no longer use their stockholders for funds, I suppose us taking on Company debts is just more of the same.
    Socialist Govts are all the same, remember the USSR? The people pay for everything and own nothing....
    I suppose they could sell eveything off to non-domestic owners and then take everything back into public ownership for a song??
    But do we have anything left to sell???

  • Comment number 94.

    re #90

    "though in reality the government has no control over the price of shares or property nor is it the cause of the global financial sector downturn and its devastating aftermath.
    Government can tinker about with a few percent of GDP here and there but really it has limited power"

    "Desperate measures are called for....and that means Tony Blair.....not as leader, but as a crisis manager and spokesperson to help Brown"

    So what is the point. If Government is so powerless and not responsible, how is bringing Tony Blair back, in a "Mandelson-esque" stunt, going to do anything?

    I mean really. By your own logic.

    You suggest that Gordon Brown and Government has no "real power". So what is the point of having a Government, Bank of England, regulators etc if they are so powerless?

    You go on to contradict yourself at the end - "If some drastic action is not taken by the government" and you suggest loads of things that Government should do to sort things out, so it's not so powerless after all.

    You cannot excuse the current administration for the mess that has occurred on their watch; that's the point of leaders. They have all the power, but when it all goes belly up, they take the wrap for it. This is the reason we are a Democracy (supposedly), so that the leaders who have the ultimate power in this country take the hit when the people see things going wrong. This is because the system recognises that the people rule and we are now taking the hit for re-electing Labour, again.

    The markets are not and should not be an autonomous entity that dictates national policy, that is what we have Government for.

    People are upset with the Government and Gordon Brown in particular, because he was arrogant enough to take all the plaudits for the boom (recall "no more boom and bust") and has thus far distanced himself from ANY responsibility for where the boom lead and the situation we are all now in.

  • Comment number 95.

    Robert,

    What's the point of all these taxpayer guarantees when there are no customers?

    Is there really a lack of credit for "viable" businesses? I think not!

    As I see it, yes there is a lack of credit - a lack of credit for the majority of firms in the UK which are now "unviable" due to the depth of this recession

    Can one really blame the banks for not lending when there are no customers? We the taxpayers are just prolonging the inevitable or virtually nationalising British Industry.

  • Comment number 96.

    This is ridiculous

    Which banks lent the money in the first place? RBS? HBOS? Some other bank?

    If its RBS or HBOS isn't this just a mechanism for letting these tax payer supported banks continue to prop up businesses that borrowed too much money to make overvalued acquisitions that couldn't pay for the debt through revenue?

    Let the businesses go into administration. If they are viable or parts are there will be interest just as there has been interest in Wedgewood and Whittards etc. If there ain't interest why should the great british taxpayer prop these outfits up. The money would be better saved.

  • Comment number 97.

    btw

    just look at some of the companies in the ftse 100

    Shell, BP, HSBC, GSK, Astrazeneca, Antofagasta, Unilever, SABMiller, Rio Tinto, Invensys, Kazahkmys, Imperial Tobacco, Centrica, Cable and Wireless, Standard Life, Tate and Lyle, Serco, Capita, Tesco, Vodafone, Whitbread, TUI, Standard Life, Barclays

    Is anyone in the FTSE 100 asking for this?

    Who? Why?

    Who is their current lender?

  • Comment number 98.

    I say nay!

  • Comment number 99.

    What is going on? Gordy is faffing and failing! Why aren't the British Press holding the big man in charge responsible? If anyone had no excuses right now it is the past Chancellor of the Exchequer and current Prime Minister (oops, same chap surprise, surprise)....honestly, it's time to be truthful and Flash has nowhere to hide if only our journalists would do us the service of pointing this out.

  • Comment number 100.

    Living in the US, priorities remain about positive action, improvements (and inaugeration day). But the lack of negative press in a similar situation to the UK has a calming effect. Are the 'UK has gone to the dogs' reports helping? Maybe now is a time for support and positive reporting. Each day I compare British and US headlines online. The UK headlines have been so incredibly depressing, the US focus on other news. Neither country is in great shape economically as we know.....but I think we should stop talking ourselves down - it really isn't helping!

 

Page 1 of 3

BBC iD

Sign in

BBC navigation

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.