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PM: 'We'll cut with Germany, France and the US'

Robert Peston | 17:20 UK time, Monday, 14 September 2009

I have just interviewed the prime minister. Which is often challenging, because of his famous habit of ignoring his interlocutors' questions and saying what he intended to say all along.

And, I'm afraid to say, he didn't choose today to engage precisely and directly with my lines of enquiry.

That said, he did say two or three interesting things, about the unfinished business of reforming the banks, about when it would be right to take further action to cut public-sector debt, and about whether households should save more and borrow less.

Here are some extracts.

Peston: We've talked about the scale of this bailout. As I say, more than $2,000 of support provided by every person on the planet for the banks. What do you say to all those millions of British people who are genuinely seething when they see bankers receiving bonuses of hundreds of thousands of pounds, millions of pounds?

PM: Well, I'm appalled that some institutions are already wanting to return to the old ways - that some of our financial institutions are taking action which, in my view, is not only wrong but counter-productive in continuing - indeed, extending - the bonus culture of the past.

Now I will want an agreement - because we're talking about banks in other countries as well as banks in Europe - I will want an agreement at the G20, not just that we will have words about this, but each authority will take action. We are discussing and examining how we can have a limit on the percentage of bonuses in profits or in revenues. I think the companies themselves have now got to look at the practices that they are employing.

We have taken very, very strong action in the banks that we have some control over. It's now for the world community to come together, so that one country isn't isolated when it takes action on matters like bonuses. But, as for the current behaviour of some of the institutions, that's why I want the G20 to take action against what I think is appalling, unacceptable. And for the future of the banks - because people have got to trust them - it's unproductive...

Peston: It turned out that our banking system here in the UK was one of the two weakest in the world. The other banking system that was in as much difficulty was the American banking system. Do you have no personal regret about failing to spot that?

PM: No, I've been very clear. We should all have been supervising more. In fact, you know, you ask the question: Is the lesson of the last 12 years that we should have supervised more (which is my view) or supervised less (which is the view of our opponents)?

The choice for me is very clear. We have got to ensure for the general public of our country that they can feel that when they go to a bank, that bank can be trusted. They've got to feel that when they put money in a financial institution, that money is safe and secure. And they've got to know that the bankers or financiers that they're dealing with are taking reasonable risk but not reckless risk.

Now that is what we are putting in to all the rules and regulations that will govern the banking system for the future. So, yes, we have learned the lessons. Now I want to make sure that the lessons are learned in every part of the world, because banks are so interdependent with each other, because they're so interlinked and entangled. What can happen - as we found in the American banking system - can directly reverberate right round the world, including in Britain...

Peston: One of the contributors to a significant increase in public-sector borrowing has been the cost of this bailout we've been talking about. Your own chancellor has said that the level, the rate at which public sector debt has been increasing, is not sustainable over the medium- to long-term. When will the economy be strong enough for you to feel it's the right moment to raise taxes or cut public spending to get that debt level down?

PM: Well the first thing to recognise is if we withdrew the measures that we are taking at the moment, which are underpinning the road to recovery for the economy, it would be very dangerous. This... recovery is not automatic. This is a fragile economic situation...

Peston: As and when you perceive that the economy is strong enough to cope with the kind of decisions that you'll need to make to get those debt levels down, do you know in your own mind yet which spending programmes in your view can be sacrificed?

PM: I think we're pretty clear. That there is a deficit reduction plan we've already announced. That means we're raising the top rate of tax, as everybody knows, of income tax; we're removing a lot of the previous tax reliefs that have been generous, but...

Peston: It's not enough though, is it?

PM: ...you cannot justify in a period of difficulty. We're raising national insurance by half a percent. These things are being done so that we can pay for our public services, while at the same time making sure that the economy continues to reduce the deficit. I think you'll end up with a situation where the debt levels in all major countries are roughly the same - Germany, France, America and Britain - and I think you'll get an agreement amongst all these countries about the right timing for us to take the further action that is, that is necessary...

Peston: Do you think people need to change their borrowing habits?

PM: I think... I think I would put it another way. I think the banks have got to be more responsible in the way they approach people. I think the banks have got to make sure that they don't get into a position where they're using instruments that put the institutions at risk. And I think customers themselves obviously will want to be prudent in the way that they deal with their own finances...

Peston: I mean, on a personal level, when you were chancellor did you worry about the way in which particularly household sector indebtedness was increasing - individuals were borrowing more and more and more?

PM: Well, I've never been someone who myself has been interested in running up personal debts or borrowing huge amounts of money. But at the same time, I think you've got to recognise that when people buy a house, for example - and that's where a huge amount of the borrowing occurs - they're doing so on the basis that they can pay back that money over 15 or 20 years, they're getting a valuable asset.

Gordon Brown

So there you have it: the prime minister doesn't like borrowing personally, but understands why others do; he'll wait for Germany, France and the US to cut their deficits before taking further steps to reduce the British national debt; and reforming the banking system is seriously unfinished business.

Comments

Page 1 of 2

  • Comment number 1.

    He doesn't really understand finance. He'll listen to the same fools who did not predict this mess (started in America).

    He will do what he can to get re-elected. The tories are useless too. We are a lost generation heading into a lost decade of misery because we are not evolved enough as a species to build a decent society.

  • Comment number 2.

    can anybody remember who was chancellor for most of the last 12 years when more regulation was needed, the guy seemed happy to take the tax revenue and milk the image of the astute business friendly leader rather than stand up to the banks.
    In terms of personal indebtness most economist were scarred stiff over the unsubstainable increases in borrowing.

    yes, most of us have no sympathy with the banks at all but come on Gordon, it seems like you are taking an opportunist approach to say the least

  • Comment number 3.

    Mad Mad Mad

  • Comment number 4.

    So he'll do nothing for a while and watch what others are up to, not having the stomach to do what's necessary and slash the public sector.

    What a shock!

    I think we Brits are going to have to wait until we get a new government if we want anything actually done here. Roll on next June, by then these people have to have been shown the door.

  • Comment number 5.

    Idiot!

  • Comment number 6.

    Anyone else smell that ?

  • Comment number 7.

    We are now very much in a surreal world. Each party is in complete denial over the, frankly, terminal mess that we are in. It is a 're-arranging the deck chairs on the Titanic' moment. Alas, circumstances will force all all their hands.

    The unions are getting restless as well they might, but they are also in denial. The fact is that the only thing that will maintain the world economy in any way would be a continuation of the self-same phoney money mechanisms that got us here in the first place. Oh, and that also fails to account for the current debt crisis we all face, which, taking America alone, would take over 400 years to repay, but assumes that Americans will save 5% of their income and ALL their savings are used solely for this purpose! Not very likely.

    QE and its many derivatives, such as 'cash for clunkers', is merely fueling the flames. Indeed, it is not so much a temporary quick fix, but is actually just accelerating the collapse.

    It is all very well expecting governments to simply maintain spending UNTIL things recover, but that is assuming (falsely) that things will recover, but this is a myth, because there is nothing to maintain it.

    The unions are right we face civil unrest, but that is the inevitable consequence of the folly of creating unsustainable lifestyles we cannot afford based on spending tomorrow's money today. Unfortunately, nothing can hold back the tides of time.

  • Comment number 8.

    What?

    Gordon Brown doesn't answer a straight question with a straight answer?

    Surely not?

  • Comment number 9.

    If Gordon Brown is "appalled that some institutions are already wanting to return to the old ways", he might do well to direct his antipathy towards an institution doing just that - the Labour Party. Because the way the Trades Unions are attempting to influence Labour government policy at the moment is a real "return to the old ways". [Unsuitable/Broken URL removed by Moderator]Caledonian Comment

  • Comment number 10.

    Do the other countries havethe same level of unofficial borrowing as the UK - ie the PFI contracts and the unfunded public sector pensions.

    Gordon keeps telling us the UK's borrowing is no more than other countries - but you need to add on roughly £1,000bn for the PFI contracts and the unfunded public sector pensions to the official borrowing figures.

  • Comment number 11.

    Brown says this
    "while at the same time making sure that the economy continues to reduce the deficit."

    BUT even in what Brown alleged were the good times - debt went up.
    He has no plan that can assure us that as the economy embarks on some sort of fragile return to growth, that we will generate income to cover even his new spending ambitions, never mind pay back his previous borrowings.

    Did it cross your mind to pick Mr Brown up on this Mr Peston?? And ask yourself this Mr Peston - How can it be when we have had all these years of superposed 'growth' that we have managed to year on year increase our debt. You have the figures, go work it out, do the sums. Just what happened to all that 'growth'.

    The other hoot is this -
    Peston: Do you think people need to change their borrowing habits?
    PM: I think... I think I would put it another way. I think the banks have got to be more responsible in the way they approach people.

    Clearly Brown will be incapable of dealing straight with the people. Borrowing - its the banks fault, not the people.

  • Comment number 12.

    Interesting, do you think the government (any government) really knows how to get out of this?

    We really are staring into the abyss here and I just dont think they now how to stop us from falling in.

    Any suggestions?

  • Comment number 13.

    So he's not a persion to run up persional debts...

    But hes proud of his record of running up goverment and hence Tax Payers Debts!

  • Comment number 14.

    ..." Well, I've never been someone who myself has been interested in running up personal debts or borrowing huge amounts of money..."
    This from the man who has run up the biggest debts in the history of this country.... how did you stop yourself from laughing when he uttered those words? Why don't all journalist just get together and refuse to interview the PM or any member of the government until they promise to actually answer questions posed... Mandelson on the Today programme is a prime example of a minister talking a lot but saying nothing..!

  • Comment number 15.

    "more than $2,000 of support provided by every person on the planet for the banks. What do you say to all those millions of British people who are genuinely seething when they see bankers receiving bonuses of hundreds of thousands of pounds, millions of pounds?"

    For every loss there is a gain. Some people, in additional to bankers, must have done extremely well out of our $2,000 per person FORCED extortions.

  • Comment number 16.

    I see he's still taking the view that it all started in America, and that despite the fact he's presided over the banking system for 12 years and has been heard - on record - praising light regulation, he's all for tight regulation.

    Sick of the lies, the lack of responsibility, the inane squirming, refusal to answer questions and all round cowardly and irrational behaviour. Hopefully he'll slink off before the next election, and maybe Labour can at least create some sort of opposition to the Tories Blair2.0.

  • Comment number 17.

    PM: No, I've been very clear. We should all have been supervising more. In fact, you know, you ask the question: Is the lesson of the last 12 years that we should have supervised more (which is my view) or supervised less (which is the view of our opponents)?

    Is this really the same person who swanned around (in a lounge suit) at swanky City banquests and BOASTED that he was running - and did run - a "light-touch regulatory system".

    If his view over the last 12 years was that he should have supervised more, then HE was in the perfect place to ensure it happened.

    Did he? Not likely. Too much tax-take to be milked.

    The man is deceitful and trying to rewrite the history of his Chancellorship!

  • Comment number 18.

    Its a bit late to be worrying about the level of household borrowing now anyway, the time to put a stop to that and runaway house prices was in 2002. Unfortunately the bubble was allowed to run out of control and divide society down the middle despite many people repeatedly warning over several years of the dangers.

    I believe there are no plans to restrict mortgage lending and prevent another runaway house price boom, which is already being hyped up. Looks like we've already learned nothing.

  • Comment number 19.

    Macavity always avoids the debate and the questions Robert. See the Sky News Leader's debate initiative!

    You journalist's should boycott the monthly PM's press meeting and interviews with this man because really what is the point of having a honest discussion with the man if he isn't prepared to enter into the same spirit?

    You are wasting your time boys (and girls!)

    This man is an intellectual pygmy!

  • Comment number 20.

    Brown won't answer a direct question eh?
    What happened to the commitment he made a couple of months ago about being more open and honest with the country? Another promise not delivered. Well done Gordon, well done.

  • Comment number 21.

    Let's be honest election night is what we are all waiting for!

    Can you imagine the look on his face when the Conservative get a 100+ majority?

    He will wonder why?

    Why? Because Gordon, you are not straight with the British public and are not to be trusted with the UK economy for one more minute!

    Historians will conclude that your free-spending and mega debt policies are the root cause of this country's economic malaise for the next 20 years!

    You are going to lose so heavily Labour will not even come close to be electable until well into the 2020's!

  • Comment number 22.

    "PM: No, I've been very clear. We should all have been supervising more. In fact, you know, you ask the question: Is the lesson of the last 12 years that we should have supervised more (which is my view) or supervised less (which is the view of our opponents)?"

    The brass neck of this guy is unbelievable !!
    [Bobby Pinstripe..] So Mr Fox, I see your supervision of the hen-house has led to a bit of a disaster !
    [Mr Fox] Ah, yes, Mr Pinstripe but as you can see I am in favour of more regulation, not that I need myself, oh no, and I have learned my lesson so I shall certainly be in favour of greater supervision of my stewardship of the hen-house. After all, having been so closely involved with the last hen-house disaster, surely I am the 'best man', sorry 'fox' for the job...

  • Comment number 23.

    At 5:55pm on 14 Sep 2009, BpbbyBasbo wrote:
    He doesn't really understand finance. He'll listen to the same fools who did not predict this mess (started in America).

    I agree, he doesn't understand finance outside of a limited perspective. Few people holding public office even understand economics in a rounded way, but that is to be expected. The (global) social pressures in the next few decades may allow the emergence of a politics - and an economics - that is just different enough to enable our flawed social arrangements to adjust and survive. If the adjustment involves greater anarchy I shall be pleased; if it doesn't then it is hard to see what it might consist of.

  • Comment number 24.

    How can we have a PM who appears to be so naive about the financial business world!? He says he is appalled that some bankers do not appear to have learned their lesson and will continue to pay out bonuses. Why doesn't he realise that these people are not "bankers"......they are nothing less than criminal shysters who should be behind bars.

    These "investment banks" are anything but! They are nothing more than gigantic corporate Ponzi schemes on the grandest scale.......much of the time it is not even their own money they are dealing with. The fancy buzz word is "leverage".......what this means is that they have borrowed up to the hilt! They then indulge in what is no more than a "pass the parcel" exercise in sub prime lending, taking themselves a percentage cut each time. The whole business is criminal and if Bernie Madoff can go down for 150 years, then a lot of other people should be sharing his fate.

  • Comment number 25.

    President Obama in his speech on the US economy today challenged the assembled Wall Street leaders. He said:

    "So I want everybody here to hear my words: We will not go back to the days of reckless behavior and unchecked excess that was at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses. Those on Wall Street cannot resume taking risks without regard for consequences, and expect that next time, American taxpayers will be there to break their fall.
    And that's why we need strong rules of the road to guard against the kind of systemic risks that we've seen. And we have a responsibility to write and enforce these rules to protect consumers of financial products, to protect taxpayers, and to protect our economy as a whole."

    Yes, President Obama, would you please follow-up on these good thoughts with decisive action? Given the recklessness and anti-social behaviour of Wall Street and the City of London, please make the rules twice as strict as originally planned, because the financial elite-weasels will be able to evade half of the new regulations anyway, with the help of thousands of irresponsible lawyers and accountants.

    You can find many more facts and arguments for the grave need to rein in and strictly regulate the financial industry here:
    http://globalinsights.wordpress.com/

  • Comment number 26.

    PM: 'We'll cut with Germany, France and the US'

    ...and only recently his government urged the Europeans not to stop spending. He will continue to spend our future, in a bid to have some good-looking short-term improvements in economic figures to change public opinion before the elections.

  • Comment number 27.

    Peston:
    Is it true you spent £26 million on banking advice from banker about the banking crisi caused by.....errr bankers?

    PM:
    Don't be proposterous - of course not.

    Writingsonthewall:
    What's this then Gordon?
    http://uk.reuters.com/article/businessNews/idUKTRE58D1N920090914

    Peston:
    So many scandals....so little time....

  • Comment number 28.

    Robert, thank you for these blogs.

    I'm no economist, but there are a whole load of issues that no one seems willing to tackle, most noticably our own personal greed (yours, mine and the banks) that has lead us to this place, it's not just the bankers fault, it is ours too. We need to take responsibility for the problems.
    We have borrowed and borrowed and fed the banking beast to the point that it is now so huge there seems to be no way out.
    We're not happy with sustainable living, or business, we're not happy with enough, we've got to have more, more, more and instead of wait, we borrow.
    Bottom line is we've got the kind of banking we wanted (supported by the government) it's meant that we can get the credit we want so we can get the stuff we want so we can build the kind of selfish, materialistic world we want, now it's gone belly up we blame the banks.
    The fact that the banks have got the government over a barrel just makes the issue worse, it is the banks that are in control and that should never have happened. Now the two are so interlinked you've got to wonder usless there is a complete and total reformation of both these systems are we ever gonna see a way out of this?
    And of course all the while the economy needs debt to sustain itself we're heading for more trouble and instead of addressing it with courage the government seems happy to use any methods nessasary to keep feeding the monster.
    The solution must be that we stop borrowing, re pay debts and start to model a different way...but that might mean down sizing, driving a slower or older car, eating in rather than eating out...i'm sure the picture is clear, starting at grass roots things can change cause they're not gonna change from the top.

    There was a wise man who once said, the love of money is the root of all evil, looks like he was right.

  • Comment number 29.

    I think this interview has cleared it all up.

    When Gordon was chancellor he talked of prudence, but he was talking about his PERSONAL pudence and not that of the nation or the households.

    I suspect he is a model to us all....unfortunately no-one was following him!

  • Comment number 30.

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

  • Comment number 31.

    They guy was chancellor for 12 years - he created this mess.

    When are we going to have a serious journalist who can cut through this ridiculous charisma/integrity bypass and challenge him on the facts - he needs to feel the heat of his decisions because the rest of the country is...

    Whatever number is quoted as the country's debt (even by the sycophantic journalists) can be doubled, trebled or perhaps quadrupled for the stuff hidden by Gordon's devious accounting - public sector pensions and PFI finance.

    For UK PLC read Enron 2...

  • Comment number 32.

    I'm absolutely delighted Gordon Brown stepped into No 10 without being elected. His blind arrogance, greed for power and lack of integrity is guaranteed to keep the labour party and its lunatic ideas out of power for 25 years + if we are lucky. I just wish it was ten years ago he got in and there was enough time for the country to be re-constructed well before I retire. Its going to take 15-20 year to fix the mess they have created

  • Comment number 33.

    Here again, Robert Peston like every other journalist tip toes around the key issue:
    Brits and Americans have dragged the world into recession with their house-price mania. The stupidity of the asset price bubble using soaring house prices as a cash dispenser for 'free' money, which loads vast debt on to young, first time borrowers.
    You can smell the pent up demand reflected in the media- people can't wait to get back on the gravy train, except people are thinking-'this time its going to be me'.
    What did the prime minister say:
    "I think you've got to recognise that when people buy a house, for example - and that's where a huge amount of the borrowing occurs - they're doing so on the basis that they can pay back that money over 15 or 20 years, they're getting a valuable asset".

    No, they are NOT if house prices crash dumbo,as they surely must- wealth cannot be created from thin air. Polly Toynbee is one of the few who has tried to point this out- whats the matter with Peston and the rest.

  • Comment number 34.

    What I see is the politicians falling over themselves to bail out borrowers , from lowest ever interest rates to trying to get lending going at 2007 levels, to measures to 'help' people buy still grossly overpriced houses.

    It's time to stop teaching our children to be prudent with money because that doesn't get you anywhere anymore such is the lunacy of our debt ridden economy. The lesson I've learned is borrow borrow and then borrow some more and you will be looked after.

  • Comment number 35.

    No Politician in office at present is going to say to the British Pubilc, stop lending, pay down your debt and live off less than 80% of your take home pay from last year. Meanwhile, your Pension will be halved and you are likely to lose your job soon. If you do not lose yours, then your wife will.

    The next 12 months will be the time for Unions to flex their muscles and the rest of us to take the hind most. Western European standards of living will fall over the next decade as Asia rises.

  • Comment number 36.

    33. That is just what Gordo is doing - creating wealth out of thin air. Printing money. You and I will pay for decades.

  • Comment number 37.

    Well, Gordo here's a few things you COULD DO whilst waiting around for the rest of the World!

    1) Take the UK/England out of the European Union - - it's a cesspit of stultifying, negativity without an entrepreneurial-free will streak anywhere in its wretched Directives - - make no apologies, offer no deals, cancel all contributions, sack all Commission representatives and with the stroke of a pen (in an instant make redundant all GB MEPs) set the UK/England FREE AGAIN.
    2) Ensure the UK/England remains OUTSIDE the EURO - - a more cancerous fiscal-control has never been devised.
    3) Instruct your CHANCELLOR of the EXCHEQUER that any b'tard banker-investment wizzard who is PAID more than 1 million p.a. during the next 3 financial years is TAXED 75% on their income.

  • Comment number 38.

    You have to worry when someone in a position of power is so deluded that they completely refute any suggestion that they hold any personal responsibility for the serious and multiple errors which have led to such a mess, or that they believe the public will fall for the denial line.

    Either way, is this the kind of person you want leading you?

  • Comment number 39.

    Robert,

    It's true that the structure of bonuses create dangerous incentives to maximise short-term profitability at the expense of increasing corporate and systemic risk.

    However, the bigger issue is the excess profitability of the financial sector due to a failure of a competitive market to operate. These excess returns are made at the expense of productive industry and the pension funds/private investors. In a mature industry such as this, if competitive forces were working efficiently, fee structures would erode to return economic rents to close to average.

    Methinks it is high time for an anti-trust investigation. Perhaps you could lead the media charge in getting this instigated?

  • Comment number 40.

    For the PM to say the bonus culture returning is appalling and then add various woolly things that might be done as if he is powerless to really do much,does not inspire much confidence. He is the PM,the buck stops with him. If he really wanted to, he could stop this nonsense easily and simply with huge taxes on bonuses.As for all the talent then flooding abroad,maybe our neighbours might be well advised to do something similar to stop a culture of gambling and greed in the banking industry.

  • Comment number 41.

    I think Our Gord is quite entertaining in a 'Doncha buy a used car from this guy' sorta way. He genuinely seems puzzled that these thieves he euphemistically calls institutions have given the bird to his chancellor and carried on paying themselves with our money.. However, Alistair is okay now, he can be left off the hook as Gords new best friend Peter is the new leader of all.
    Mr Peston... This extends to others in your position, why do you persist in pussy footing around the questions that should be asked? More importantly, pressed home until you get the answer pertaining to the question; not the usual 'Clearly I said' or 'It is clear' rubbish.

    He has no understanding whatsoever how people live or indeed supposed to exist. His predecessor came along and promised the known world, and weren't we sold a clunker? Taken into a falsely motivated war we cannot possibly afford in money or soldiers, we're propping up a banking system that has no idea about 'customers' only commodities to reap from. All the time the politicians (with notable exceptions;Vince Cable) saying 'Nothing to do with us' or 'We didn't see it coming'.. No? I saw it coming five years ago Mr Brown, but was laughed at for being alarmist.

  • Comment number 42.

    I must confess, I become increasingly confused with every interview Gordo gives.
    Is he for a closely controlled bonus culture ('I am appalled') or an economic environment where banking mistakes must be paid for by the taxpayer ('To go the way of our opponents would be very dangerous') or something in between...where mistakes are controlled but those in the system can make as much as they want - as per the situation in China?

    Brown also insists he was warning of the bust long before anyone else, and yet the record shows that it was he who said he had 'abolished' bust.

    And Lord Meddlesome - who has brought his own peculiar brand of uncertain certainty to British car manfacturing,while insisting that Gordon is the man for the job - was he not the man who told friends a mere six years ago that Gordon Brown was psychologically flawed?

    Shurely shome inconshistenshy?

    Shurely shome anshers at www.notbornyesterday.org

  • Comment number 43.

    I cannot understand what people are complaining about here. Yes, we know Brown doesn't answer direct questions. Yes, we know he always takes the credit when things go right and disappear when they go wrong. But, why are we wingeing about Government spending now and the level of indebtedness?

    Have we not learnt from previous recessions and depressions that cutting expenditure leads to a greater downward spiral. It would appear that to most commentators here that Keynes had never existed. The Nobel Laureate, Paul Krugman also is in favour of Keynesian techniques to get us out of this mess. It is only by boosting aggregate demand can we get the global economy out of its current doldrums.

    To talk of reigning back expenditure now is to consign between half a million to a million more people to the dole queues for another five years. Do we really want that? Do we want the social tensions and the mad-cap Right-Wingers on the street stirring things up? Because, that is exactly what will happen if we do stop the spending and start reining back public expenditure now.

    I think Mandelson has it right. This is where the line between the parties is being drawn. The Conservative wants to cut-back expenditure now. Labour want to wait until there are signs of recovery. My own view, for what it is worth, is that whilst we have a triple A rating and we can still borrow without paying out punitive rates, we should continue the current economic policies to protect jobs.

    Economies have had debts going back to the Napoleonic Wars. As long as there are investors willing to finance the boosts to aggregate demand, then it is fine to continue borrowing to protect employment. For all those doom and gloom merchants who wish to cut back expenditure, if we cannot get the global economy working effectively, then all bets are off.

    Yes Blogpolice #36, the whole finance system is "creating wealth out of thin air". That is what banks do! You put £10 in and they can lend up to £100 out. This is called Fractional Reserve Banking. If you do not understand how this works then a good explanation can be found in Niall Ferguson's "The Ascent of Money, a financial history of the world". As for paying for decades, we still pay interest on Government Bonds issued several decades ago. Money is debt and whilst you can finance it, you can continue to operate the current policy. When the economy recovers, that is the time to look at cutting public expenditure and repaying debt!

  • Comment number 44.

    Am I not right in thinking that the majority shareholder in RBS (G Brown esq) has approved an £10M pay packet for the chief executive Mr Hester for a single year's work, most of it in bonuses? How on earth does this accord with being "appalled"? Does he not know what is done in his name?

  • Comment number 45.

    #32 simmerit wrote:
    "I'm absolutely delighted Gordon Brown stepped into No 10 without being elected. His blind arrogance, greed for power and lack of integrity is guaranteed to keep the labour party and its lunatic ideas out of power for 25 years + if we are lucky."

    What I find amazing is the Tory (and others) push to win the next election. It's surely one that NO ONE wants to win - and Brown should be made to stay until everything's cleared up.

    Would Osborne do any better if given the chance? I doubt it. He's nice and shiny, recently out of uni but...pragmatic skills in a situation very much in flux? Nope.

  • Comment number 46.

    On Nick Robinsons blog on the 9th Sep 2009 I suggested cuts of around 36bn UKPounds that would be relatively easy to make.

    Here's another one, Trident...but for some reason the officials in charge seem to think that Trident is a good idea and always manage to convince the 'man' in charge that this is so, just what do they tell him ?

    Given that the advice must be so compelling that discontinuing Trident is not an option then we must tell the Americans that we will upgrade but what with the economic crisis, we can't do it just yet. Get them to maintain it for a bit longer at no cost to us on the basis that we will look favourably on them when the upturn takes place. If they start to get a bit shirty then we should point out that there are competing (and cheaper) systems available from both Russia and China.

    Iraq - remove the British presence from Iraq as we no longer need their oil due to the dodgy deal that has been set up with Libya.

    Afghanistan - sorry but we do need the uranium, as we went to war against the Taliban and won (to the victor the spoils), Helmand province should become a part of the UK and subject to UK law, I want to see proper policemen (ok Afghanis wearing UK police force uniform), minimum wage, social security, in fact all the rights,responsibilities and benefits of being a part of the UK.

    The Banks - They were all broke, the UK Government bailed out NR, Lloyds, HBOS etc stabilising the market, this also saved the UK arms of Barclays and HSBC, had the UKG not acted they would have gone down as well. Sequestrate all of their UK assets and when the current shareholders squeal, tell them that the value of shares can go down as well as up.

    For years the people of this country have been paying forward, now it is payback time.


  • Comment number 47.

    Just watching it on the news

    What does it add to the greater debate? Or do you think he was "erring" on the side of caution?

    Why did you allow him to make these statements without any balance, or counter view?

  • Comment number 48.







    "I will not allow house prices to get out of control and put at risk the sustainability of the future."
    Gordon Brown, Chancellor of the Exchequer November 1997

  • Comment number 49.

    I have just interviewed the prime minister. Which is often challenging, because of his famous habit of ignoring his interlocutors' questions and saying what he intended to say all along.

    And, I'm afraid to say, he didn't choose today to engage precisely and directly with my lines of enquiry.

    >>>>>>>>>>>>>>>>>>>

    Robert
    You must have 'the patience of a Saint'!

  • Comment number 50.

    Surely, the banks run the country --- Gord just doesn't like to admit he is a financial eunuch

  • Comment number 51.

    Incoherent babble.

  • Comment number 52.

    What a complete waste of time.
    It's almost like Brown despises the British people for questioning his choice of policy. I suppose this is how it is with an un-elected PM.

    Is there some law that can make the PM actually answer questions asked by his people? European court where are you?

    Brown, you are NOT some International Statesman, get some backbone, stick your neck out and admit your mistakes. What have you got to lose, we all hate you anyway.

  • Comment number 53.

    Well I am a bit bored of the parrots. Look at the last 12 months and Brown and co have done a good job. Banking crisis one tick, Car scrappage two ticks, swine flu three ticks. What is interesting is that no one in the media wants to say anything positive about Brown and co. The banking crisis did start in America. It is the fault of bankers. Why does everyone just want to knock the government. Alistair Darling seems to me like a pretty good sage who tells us the truth. Cameron has it pretty easy, he looks good. But on the few issues where he has had to make a decision and not just wag the finger, I don't feel he has amazed. He has an ex tabloid news manager and a shadow chancellor who didn't as I understand look very good when his MP expenses claims were looked at. He turned on others in his party and not George Osborne. It was the Tories who big banged the City with lighter regulation. Labour under Blair followed their lead. If the Tories had still been in charge the same thing would have happened and no doubt a few ministers or ex Tory ministers would have been on the board of a few of these banks. I know it goes against the grain but if you start out thinking everything the government does must be wrong you are not adopting a very level approach to matters. If they get it right, lets acknowledge it and see if the opposition would have got it more right. If they wouldn't lets keep an accurate score. Otherwise WE will get it wrong.

  • Comment number 54.

    When the Prime Minister begins to announce cuts they had better be in the right place. Currently, each person in this Country has loaned in excess of £40,000 to the Banking System. If that were a mortgage loan secured against a house and the homeowner did not repay, the bank would repossess. Which is usual behaviour in a capitalist economy.

    So, the cuts must be in the right place. No cuts in any of the Public Services that I have paid for. No cuts in the pension I have contributed to. No cuts in the Health Service I own and pay taxes for. The cuts need to be in the right place. That right place is the bottom line of every single financial services business in the country.

    Financial Services and the systematic failure to treat the economy with the utmost care that public trust requires created the situation. Now, indebted to the public purse to the tune of billions, the Banks should listen to us, their creditors. Instead of announcing shareholder dividends they can pay the deficit in public service budgets. The forecast Budgets have been on show for some time. Indeed budgets are a matter of public record.

    The bottom line is where the cuts need to be made. Not least to finance the outrageous levels of unemployment created by the failure of Banks to support real economy liquidity. The announced profits of those who "avoided rescue packages" are little more than a guide to where the cuts can be most effectively made. In the bloated money circulation, laundering and pyramid scheming of the inefficient banking sector that has failed to provide the right products at the right time.

    It is time for the Very Private Sector of Banking to face up to the inefficiences that have led to their structural failures. Cuts to make them more efficient and return the temporarily relocated liquidity to the real economy should be undertaken to prevent cuts from being made in the wrong parts of the economy. The Workers at Rover are likely to agree that they were the victims of inappropriately located cuts.

    The challenge for Brown is not to get through the next election but to actually instill the Discipline of Thatcher onto the Banks. In the same way Thatcher instilled the Discipline of the Banks onto the Public Sector. The truth is, there is nothing to cut from the public purse: it was all relocated to the private purse.

  • Comment number 55.

    Wouldn't it be quite easy to limit eligibilty for future national bank bailout/insurance schemes to banks who have paid less than x% of prior years' turnover in bonuses? If banks want to continue the practice they'd presumably have to find a private insurance system to cover their exposure. If they couldn't find a scheme, they'd risk losing all their customers or be forced to move abroad to a country prepared to take the risk onto its own balance sheet. Not many of those around any more, surely? Call their bluff I say.

  • Comment number 56.

    Yes, Robert.

    When the Prime Minister of our country says "I think we're pretty clear" I think we are pretty clear!

    We know it makes much better sense if one assumes he means exactly the reverse of what he is saying.

  • Comment number 57.

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

  • Comment number 58.

    Gorodn "Nero" Brown - fiddling while the city burned

  • Comment number 59.

    #19 NorthernThatcherite

    Why single out the PM. Every politician plays exactly the same game. That is one of our biggest democratic problems. And why do they do it - because the great British public refuse to seriously consider and debate, preparing to allow the media, in particular the red tops, whip up unconstructive hysterics.

    When we grow up, they just might.

    It has been clear to many for some time, that our democracy is in trouble. We, as a society are held to ransom by a very small group of exceptionally rich people. Their riches give them power over us, our lives and our governments. They must be held to account. And they, the banks must pay us back in full, in cash. I consider the debt we we have taken to be a mere loan to these banks. Not one of us should be out of pocket over the longeterm.

    All of our governments, on a global basis must act. The first step is to break up the banks. I'd consider limiting the size of any corporation. Further failures are inevitable, and we can not afford to bail out companies who can create such devastation on a global basis.

    All of us, need to find a way of creating a more equal, balanced society. Vast limitations on bonuses across the globe will help to change our expectations. The banks should not have been allowed to create such a mess. And we, here in the west have no right to allow such devastation that results in much poorer countries.

    We are always being told the bankers will leave. Fine. Near global solidarity will do the trick. Where will they go, Somalia?

    I realise I dream...

  • Comment number 60.

    Just watched a programme on Thatcher and Scotland and thought how relevant it was to the countries present situation. There was Ravenscraig Steel Works, productive and efficient but in Scotland where the Conservatives very nearly got "nil point" in elections. Ravenscraig supplied steel to car factories, shipyards and other industries including the blossoming off-shore oil exploration industry. As part of the Conservative union bashing of the 80s and 90s the car industry was polarised to the midlands, shipbuilding in Scotland dessimated thus cutting off the need for Ravenscraig, so it was eventually closed with considerable unemployment. History, you might say, but the relevant point in the programme was what replaced the steel works - housing estates, retail parks and leisure facilities. The blogs have been intimating that the country's economy is in meltdown because of our over reliance on housing bubble, retail without manufacture - just the legacy that Conservative government bequeathed to 21st century Britain.

    Gordon Brown for all of his personality faults is serious in his belief, as with Rooservelt in the 30s that the general worker in the country should be protected from the excesses of the greedy when recessions occur. His notion of grand projects to get people back into work, retain skills that, as Thatcher's legacy has demonstrated can so easily be lost. To expect the runaway profligacy of coporate greed to be expunged overnight is naive, that so much outcry has ensued from the wider knowledge of what has been happening in the bastions of power is merely a starting point. As the greed continues unabated, with boards telling shareholders (who in theory are their employers) that they will note the shareholders' instructions but take them as guidance (to be ignored) and then continue with the money grab.

    While the dust settles and the media outrage continues (with even celebrities admitting to being overpaid) let a reasoned approach prevail, to start if directors can ignore the instructions of their shareholders then legislation needs to be introduced to provide them with the power to remove boards/individuals they feel do not have the best interests of the company at heart. Likewise some retionship between price of goods and costs/profit margins needs to be established. If the deregulation of prices and salaries that the Conservative government thought such a good thing has led to the explosion of greed that now prevails in boardrooms, at managerial level, within the civil service and local government then restraint needs to be reintroduced. We have become a country where the social implications of our actions have become of low regard, where in sport individuals can see nothing wrong in agitation of crowds, unsporting activities or rigging matches for ulterior motives. Rules are their to be broken, skirted or ignored - little account is paid to the resultant effects on other individuals - it is a Thatcherite "me society".

    The Labour Party with all of its weaknesses, its conservatism with a small "c" is prefferable to the country under a Conservative government that will dessimate social structure beyond recognition. A world of gated communities of the excessive "haves" increasingly isolated from but oppressively controlling the "have nots". Lest we forget that the Conservative Party are of the very people who are partaking of the excesses, that these corporate individuals are displaying with relish their greed in the belief that the country will put in place the government that established their wealth. Thatcher turned the country into a nation of retail parks and money dealers, the choice was there to modernise industry (as in France and Germany) to invest in manufacturing but that meant utilising traditional skill bases. Instead we got the de-skilling of every activity, a fragmentation into self-interest; League Tables in all social activities; Health Trusts for swathes of the NHS (to the extent that hospitals have to rent the beds they use from a seperate Trust - sorry we cannot cure you the Bed Trust has sent yours to a competitor); Market Forces in social activities where cost accountability out-weighs the social function. Do we really want to return to that kind of government? Yes we have got ourselves into a mess, no we cannot blame just the government or the regulators (including the Bank of England that missed so many of the collapses in financial insitutions Equitable Life to name but one), we fell for materialism and excessive credit. The greed merchants took advantage of all that lay before them, entreprenuers, they offered means to extend credit where it did not exist (if you are paying too much to one company switch to another - oops you are now paying them too much).

    It is easy for the media to play popularity games, then claim that those they built-up have feet of clay. Maybe we should ask why the media did not indicate the weaknesses when making their eulogies, the media has lost the balance of coverage for the populist immediacy - the spin and sound bight. Poor old Gordon, we get what the media provide. Never forget Nixon's six o'clock shadow and Kennedy's blonde adonis in the Presidential TV debates. Nobody was indicating the flaws in Kennedy's political activities, or personal peccadilloes, while maybe more should have been made of Nixon's gifted dog in the 50s so the Americans would not have had to suffer his electorial peccadilloes of the 70s.

    We all need to look closer to home for our woes, a nation is built of its people, not engineered by the media or popularist politicians. Our apathy at elections (both national and local); our delegation of responsibilty to authority/organisations; our willingness to follow wherever we are led; the cult of non-discript personality with vacuous opinions. Statement without precedent; unquestionning of vested interest; the politics of lobbying; the power of money whether real or fictitious. The darkness is approaching and we have little time to find the light again - we all need to remember what happened to the majority of the country between 1980-90, get the photos out, read the back editions. Ordinary as the Labour government is it is far safer than that which lurks behing the Boy David and his mellow frontage. We will deserve what we get, but remember the millions that will suffer for a very long time if we make the wrong choice.

  • Comment number 61.

    I see the despicable ZanuLab shills are trying to "even up" the roasting of El Gordo the Destroyer on this blog LOL

    Forget it creeps,the tsunami of financial bad news has`nt even arrived yet!
    How many people in this country would pay good money to see El Gordo swinging from a crane?

    P.S The other faces of the banker`s communistic political coalition are up the same proverbial creek ideologically.Their world view will kill us all.

    Enjoy!

  • Comment number 62.

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

  • Comment number 63.

    The problem with the banking system in this country and in the world is that there isn't enough competition.

    Competition improves service and brings down costs for the consumer.

    There are so few banks here now that it's a monopoly virtually and if a bank fails it has to be bailed out by the taxpayer because it is too big to fail.

    If there were 40 banks operating in this country rather than about 6 then I would be happy to see any fo them fail without the taxpayer picking up the bill. They would therefore continually face their moral hazard and therefore be prudent with their policies including bank bonuses just like in the 1970's!

    More competition please! The size of any bank should be limited by law!

    40 banks in the UK would be much better for the future of the country than 6 monopoly banks..........oh and this applies to supermarkets as well as any other sector of the economy that gets too uncompetitive........including the biggest bloated money wasting entity.........the state!!!!!!!!!1

  • Comment number 64.

    In # 11 mynameistrevor said: "Clearly Brown will be incapable of dealing straight with the people. Borrowing - its the banks fault, not the people." Well Trevor that is precisely the position the S African government took and passed a bill through Parliament that put the onus on the lender. So if a lender, be it a bank or worse still a shop, overextended a borrower then it was the lenders loss. You can't believe how responsible all lenders became. The result is the S African banking system and other credit systems are strong and healthy.

  • Comment number 65.

    It really is so pitiful to see the leader of our country squirm and decieve us.He was in charge at the time of the finances when he allowed the country and government to go on a low interest rate credit binge the like that has never been seen before.He tried to cast himself as some
    Cromwellian protector of finances when he really just allowed us as a country to get furter into debt.It's now the day of reckoning and he cannot face what will be written on his political epitaph.
    It's sad for politics but a tragedy for this once great country.
    As a friend witnessed from a talk with Vince Cable,off the record he said we as a country was now totally bankrupt(allegedly).
    Great thanks Gordon,thanks Tony ,thanks New Labour you have a legacy to be proud of .

  • Comment number 66.

    "Well, I've never been someone who myself has been interested in running up personal debts or borrowing huge amounts of money. But at the same time, I think you've got to recognise that when people buy a house, for example - and that's where a huge amount of the borrowing occurs - they're doing so on the basis that they can pay back that money over 15 or 20 years, they're getting a valuable asset."

    Unbelieveable.

    This is the man who has borrowed vast sums of money against out future productivity (and we've had no say in the matter).

    People on interest only mortgages won't be paying thier debt off after 15 - 20 years.

    And how many people ever take a 15-20 year mortgage out (as thier first mortgage)?

    Why do banks need to offer 25 year + mortgages?

    And wasn't one of the problems that people were buying 'investements' ("assets") rather than 'homes'?

    He talks rubbish and doesn't answer any questions.

    Why is he running this country and why does the media bother to give him air time?

  • Comment number 67.

    Why would we expect anything less from this interview than " nothing to do with me guv I'm just trying to sort it out"
    Many of us fell for the Tony Blair "New Dawn" back in 97. Would we have gone for the Gordon Brown "nirvana is just around the corner" had we been given the opportunity to vote. I some how doubt it.
    We have unelected people of questionable qualities in positions of extreme power and every man jack of them in denial that any of them had anything to do with the current disasterous mess we ,our children and our childrens children are being left to clear up and pay for . This is politics,its a game to them, power & greed(and boy we have seen plenty of that). Who ever wins the next election means that many will have gone but the ones who have a safe seat and you do not get to a position of power without a safe seat, will still be there vying for the limelight,collecting their pay and allowances and and for the most part not competant enough to be running much more than a small corner shop let alone a Country.
    If they ran a large company in a similar manner they would have broken every rule in the book in respect of their fiducary duties and would have been disqualified from being a director for an eternity.

  • Comment number 68.

    #60 What an excellent summary. I am no admirer of GB but I believe that when we have a different perspective his record will not look quite as bad as his current critics would have it. Thatcher on the other hand did indeed 'sell the family silver' not merely by selling the country's infrastucture for a pittance to her wealthy friends but indeed by crippling our manufacturing base for political reasons. Thatcher sowed the wind that turned into the storm we are entering.

  • Comment number 69.

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

  • Comment number 70.

    Reading #28, thismadnesshastostop said: "We have borrowed and borrowed and fed the banking beast to the point that it is now so huge there seems to be no way out.
    We're not happy with sustainable living, or business, we're not happy with enough, we've got to have more, more, more and instead of wait, we borrow."
    For some reason or other this conjured up the idea that money is rather like a dangerous drug. No matter how hard you try you just can't control the craving for it. You rush off to your local street corner pusher, the bank, for a fix and even endure all sorts of indignities (work) in an attempt to get it, and if that doesn't help you resort to theft.
    If this is even partly true maybe money should be scheduled and controlled like any dangerous substance. Shouldn't government look at the Acts already in place for guidance in its regulation.

  • Comment number 71.

    Peston

    I find it extraordinary that you complain about the PM not answering your questions when a) you make Garth Crooks look like Paxman with your rambling series of half baked thoughts masquerading as questions and b) you do exactly the same to Evan Davis every morning on Today.

  • Comment number 72.

    This is a spoof interview.....isn't it?
    Oh God please tell me he isn't really this dim.

  • Comment number 73.

    How much more is he going to spend while there is no lessons learnt from the Lehman? Bankers appetite swing back to the actions and regulatory bodies are going to be the same again.

    If they call themselves 'Labour' party, I would imagine they are more hardliners to the rich bankers than the Conservative. Right?

  • Comment number 74.

    Plain fact is that a Labour government was in charge when all the economic mess was boiling up, and Gordon Brown was its Chancellor of the Exchequer.
    What did it, and he, do at the time to rein in the excesses?
    He had the power, remember.
    The asnwer is: Nothing.

  • Comment number 75.

    I would have liked you to have pressed the PM more about ignoring the warning sign about the increase in personal sector debt. During a period when household debt levels doubled (as % disposable income) Gordon Brown was boasting about having abolished "boom and bust". Yet sky-high house prices and rampant borrowing were clearly indicating that a bust was just around the corner. Gordon Brown blames bankers for not having reponded to these signals but surely he, as Chancellor of the Exchequer, was negligent above all others.

  • Comment number 76.

    21. At 7:47pm on 14 Sep 2009, BankruptBritainRIP wrote:

    "Let's be honest election night is what we are all waiting for!

    Can you imagine the look on his face when the Conservative get a 100+ majority?"

    ...and can you imagine the look on the Tories faces when they start slashing public services and the whole country goes back to the 3 day week through strike action?

    I don't think jumping from the Crocodile's mouth into the Lion's is anything to be joyous about.

  • Comment number 77.

    #60honestgeraldinho

    Enjoyed your points.

    Not sure I can agree that Mr Brown is any good at what you call protecting the workers in a recession.

    The rules for social payments for the unemployed were set up to protect taxpayers from skirkers.

    Most of the current crop of unemployed are desparate to get a job, but when 1500 people turn up for 20 supermarket shelf stacker jobs you know you've got a deep set problem. The current rules are devisive and penalise the honest and the saver (savers are bad because they don't spend. But surely they are good cos we save money in handouts... round and round and round goes the worm).

    Some of the worst employers when it comes to recruitment are the government ones, many requiring years of experience in the sector for minor roles. More advanced roles require certifications that are not required for the same job in industry, and these cost over £1000 to obtain. If you are living on savings because your partner works over 25 hours at minimum wage you can't find that sort of money - of course you can borrow it from a bank (the same guys who put you in this mess in the first place).

    How about all unemployed being retrained from FS bonuses....

    Surely by now these rules would have been revised to recognise that these masses of unemployed are there for the long term? Such a lack of recognition compounds the arrogance of the man.


    Why do we tax people on minimum wage? Why do we tax jobseekers allowance?
    Why do we give away VAT reductions and car scappage scheme money to those who got money already?

    Come the election who to vote for. The devil or the deep blue sea?


  • Comment number 78.

    Never mind the failings of the Government, what about the failings of our journalists?

    I listened to Mandelson avoid every question about cuts with Nick Robinson yesterday, we have Gordon dodging questions here and not once have I seen a Government minister cornered - in a way that Joanna Lumley demostrated perfectly with Phil Woolas.

    It's bad enough we're surrounded by crooked bankers, incompetent Government, blind Economists and (morally) corrupt politicans - but now we have placid journalists who are afraid to pressure the real questions.

    Never mind how much and where the cuts are coming - lets ask 'How big do they need to be'

    That will show the difference between parites.

    Labour say - big enough to solve the problem but without causing civil unrest and mass strikes.
    Tories say - big enough to please the ratings agencies

    If you actually get some numbers off them you can see their plan failing as we near the election as our debt baloons beyond the parties forecasts.

    I think you will then see that both parties are kidding themselves about the situation..

  • Comment number 79.

    I always get this feeling that Gordon Brown hasn't been here at all during the past twelve and a half years - he was sent up to the Moon by Tony Blair in 1997 in one of von Braun's rockets and a replicant has been sitting in Number eleven and now number ten ever since. How else could you explain the robot-like approach to every question that is posed? Or the total denial of any responsibility for boom and bust? raiding pensions? the 10p tax rate? the cut in VAT? the petrol fiasco? the lost records? the abandonment of prudence and savings? the banking crisis? the treatment of our armed forces and their equipment? the lack of supervision over everything? the huge mountains of debt?

    When Gordon Brown does eventually get back (Lord Snooty is said to be considering mounting a rescue mission in a von Braun Mark II) he will be amazed at all the damage his substitute robot has caused.

  • Comment number 80.

    Robert, it is a good thing you are on a salary as otherwise you would have wasted your valuable time.

    Mr. Brown has built his career by humming the tunes of others, now that the music has stopped he appears as a man bereft of a song.

    Sad, really: reminds me of that story of the emperor and his non-existent clothes.

  • Comment number 81.

    The unions sound as though they want to put the last nail in Gorden's coffin by re-running the Winter of Discontent with strikes against any cuts in public services. Stock up on candles and blankets now.
    We could help save our future by cutting the public sector budgets by 10% across the board. The bloated public sector could well cope with a 10% cut in budgets without any loss of service by being more frugal and less wasteful with "our money". Even the NHS could cope with a 10% cut as their budget has risen by 300% in the past 12 years.
    The waste of this governement is monumental. Helicopters that can't fly, IT projects consigned to the dustbin as they can't be made to work, Regional Development Agencies that just produce a glossy annual report and nothing else, Pathfinder projects that knock down perfectly good houses to replace them with grotty new houses, expensive publicity campaigns to tell us the blindly obvious. The list goes on and on, and on, and on....

  • Comment number 82.

    Can the moderators explain why they have blocked my comments as I have not used any bad language but merely questioned the quality of both participants in the interview.

  • Comment number 83.

    There are many options:

    1: devalue the pound (increase industrial competitiveness and reduce luxury imports.

    2: allow Wage inflation via normal cost of living pay rises

    3: make any city bonuses only payable in Shares of the relevant Bank (not saleable until the employee leaves the service of that bank)

    But, why is it bankers are still writing their own Ticket Pay wise ?

    Having accomplished the destruction of Pension Fund Investments on a huge scale, why on Earth are these people still acting with such Cavalier attitudes towards other peoples money ?

    How is it they are eligible for a bonus when they are just shuffling electronic pieces of paper between themselves (in a rigged Poker game)?

    Perhaps this is an example of one Class extracting wealth from another class (working and middle) pure and simple.

    Makes one ashamed to be British.

  • Comment number 84.

    i think there is a clear way in which to cut the bonus system paid direct into bankers pockets and that is; The banks have been extensively bailed out by our money and are now at a serious level of borrowing to us (for a change) from the point of recovery all profits that the bailed out banks make should go straight back into the kitty to pay us back! and believe me the banks, if not already, will soon be, again, generating massive profits. So if Banker Joe blogs is due a £1 or a £100,000 bonus for so called 'risk taking' then this should be off-set against the huge bail out loan. This can all be reconcyled to ensure it happens, just like any other business and ensure that no money is sneaked through to Mr Blogs. I personally will be infuriated if I learn, in the not to distant future, that those banks with bail-out borrowing announce huge profit. All profit should be paid back immediately to reduce their loan, from us and ensure we all are not hit by the expected tax rises etc.

  • Comment number 85.

    The housing market is a big cause of the structural problems of the British economy. Too many people believe they can make money by buying a house, and so it has sucked in too many resources (money, and some of the construction industry), which would have been better devoted to some real wealth creation. Can no economist find a way to break this culture e.g. capital gains tax on housing, plus a value tax on housing?

    Wanting a bigger house ought to be a lot more expensive than it is now. I'd be in favour of a 100% tax on any gain from now on, but I'm no economist (people would probably start buying shares in Damien Hirst 'art' instead).

    I've been a mug all my life, trying to get a good education and work in a 'useful' industry (electronics), trying to save for a pension, resisting my wife's efforts to go into debt to get a bigger house - and all for nothing, just ended up supporting a shower of wasters.

    I encourage my children to emigrate.

  • Comment number 86.

    More regulation is NOT the answer, because it's a way to avoid taking responsibility for criminal negligence - when mountains of paperwork and forms are delivered somewhere, then it's very easy to lose the signal in amidst the noise in there. I'd practically guarantee that's what happened with this fiasco in the first place - layers of obfuscation and 'paperwork' were layered on top of an idea, to the point where the people making decisions couldn't any more, because the level of understanding needed was too extreme.
    Banking is NOT a complicated process, and never has been. The only real complexity is in analyzing risks, and that's a commercial decision - should I lend this person money, and how likely am I to see it back. That's all it boils down to and all it has ever boiled down to - banking (and finance in general) is professional gambling on a large scale. Everything else is window dressing at best, and deceit at worst.
    Adding regulation to that doesn't change the nature of the business. Nor does it mean that the 'regulations' will trap the problem - what they will do though, was to let people weasel by say 'I was following the regs when I did this insane thing' - which is exactly what has happened.

    The reason we have this whole mess though, isn't because of that. It's because banks have become 'too big to fail'. Well, so be it. Surely that's the very definition of 'a monopoly'?

    We've become - as a society - utterly dependant on our banks, which would seem to suggest that we're _all_ involved in their 'large scale gambling'. Maybe we should stop over extending ourselves, and playing 'chase the credit risk', and instead just stop and think for a minute about what we're actually doing.

  • Comment number 87.

    Does this mean the summer is over, then, and we can look forward to Brown etc. being cross-examined, for what it is worth, in the 'Hice'.

    (Remember Mandy doesn't stand in the Commons so can say what he wants with impunity)

    3 months at least away from scrutiny for Brown, and that was all he could rehearse. Get the gloves off Bobby. About time it all got real.

    The BBC doesn't need to run scared any more.

    Why weren't the questions -
    How are we going to pay for all this,
    and why should the public bear the burden,
    and why on earth do you think you should be trusted with the job?

    Regards,

  • Comment number 88.

    Robert, first my personal congratulations for resisting the temptation not to get up and try to throttle him. The sheer brass neck of the man.

    He now says that we should have supervised more! Just who was it that set up the rules and chose the regulators, gave them guidance and steer? Yes the one and only Gordon Brown.

    There is one very simple way to stop bank recklessness and that is to split up the banks.

    If you want to have a government backed guarantee of deposits you take in then you must limit yourself to deposit taking, running current accounts both for personal and commercial customers and you may not loan more than GBP 5 million to any one customer be it via a mortgage to a personal customer or a commercial loan.

    If you want to get involved in old style merchant banking, CDS's trading on your own account and whatever well basically you are on your own. Its your shareholders money and when it is gone it is gone. If you trade with a reckless bank and they go under well tough. That will soon sort out the rogues.

    Perhaps we should have our own version of the Glass Steagall Act perhaps called the Cable Field Act?

  • Comment number 89.

    Referred again?! How very odd! Can't think of anything I said to cause any kind of offence-just explained why I found our esteemed PM's words hilarious and said how dapper Robert looked on Paxman's show last night!

    How sad that one can't have a sense of humour and pay someone a compliment. No swearing, no vitriolic outburst, no call for an election.

    What did I say this wrong this time?!

  • Comment number 90.

    Robert,

    Could you not have just asked him if he thought that 3 simple words are at the heart of all the banking mess? "Fractional Reserve Banking". Now as the banks are stocking up on cash, FRB is moving away from a 10% reserve on average to much higher figures. If these higher figures had been enforced all along then we would not need to prop up the banks. Greed viz a vis FRB gave the banks huge profits by simply creating debt. Why do you think gold is over $1000 an ounce? Most people can't get their heads around banking and money so here's a good link to understand it:

    http://en.wikipedia.org/wiki/Fractional-reserve_banking

    Should be taught in every school classroom (and possibly every bank boardroom...)

  • Comment number 91.

    MOST CERTAINLY A NERO MOMENT ALL THE BANKERS AND LEADERS OF THE WORLD FIDDLING AWAY AS THEY ALWAYS ARE UNTIL THE WORLD GOES UP IN FLAMES AND CRUMBLES AND ALL LIFE ENDS THE SOLUTION TO THE PROBLEM

  • Comment number 92.

    Am I a bit dim? I don't get it. Why should we suffer cuts in our public spending? Why don't the banks pay back what they owe us? Is it wrong to assume that we have the right to stop them from wasting millions on salaries and bonuses and force them instead to to pay us back?

  • Comment number 93.

    Gordon Brown sux deeply. You need to find a PM like Winston Churchill. Then this country will get better.

  • Comment number 94.

    Whilst not having seen your full interview, the inane responses you have been given clearly show Mr Brown not only hasn't a ckue but never had a clue and his 'reputation' for prudence was one of the best contrived spins ever.
    Its clear to see he will vacillate until he is booted out them walk into a cushy consultancy with no doubt a bank, hedge fund or venture capital company and leave the real decisions for his replacement.
    They may say Osborne abd Cameron are inexperienced but that heavens if they are, because if this is what experience delivers we need fresh thinking almost more than clear oxygen to get rid of the stench of the rotting carcase that is Labour!!!

  • Comment number 95.

    Comment 92 HENBEV17; Your right!! see my own comment 84 mokdalimey.

  • Comment number 96.

    How about the British Media do all the taxpayers a great favour and preface all speeches, interviews and sound-bites from the PM, Mandelson, Darling et al with a prominent notice: "These words do not address the questions posed and all answers and claims should be treated with extreme caution".

    Better still; refuse to give air-time to these evasive politicians unless they pay for their blatently partisan, party political propaganda which should carry a logo, "This is an advertisment on behalf of the Labour Party".

    Just to show no political bias ALL political parties should be treated in the same way. Don't answer questions - get no free, air-time or column inches.

  • Comment number 97.

    Moderators, please put my comment @57 back-no reason for it to still be on referral. I'm sure this is an accidental oversight and easily rectified.

    Thanks in advance

    Tiger

  • Comment number 98.

    I suppose putting some of them, (the crooks in suits), in jail for criminal irresponsibility would be too much to ask.

  • Comment number 99.

    To me the question on personal debt shows how out of touch Westminster is with the rest of us. It isn't rocket science.

    (at the time) Average UK house nearly £200,000, average UK salary just under £24,000 = trouble.

    Therefore the average person cannot afford the average house or are borrowing beyond their means to buy.

    The way to stop this is to pass regulation that doesn't allow people to borrow more than 4 times their income to buy a house and that total amount of debt a person can have is regulated so that monthly repayments are not more than 50 - 55% of total monthly take home pay.

    People must prove their income when applying for credit.

    You pass this regulation and everything else is sorted because the market can only increase in line with peoples earnings. You also regulate inflation that way.

  • Comment number 100.

    It's the scam of all times. What the banks designed was a simple scheme to funnel taxpayers money into their own pockets.

    The ingredients to make this stunt work:
    - irresponsible lending to people without financial means
    - selling on credit swaps with grossly incorrect valuations
    - cooking the books, based on owned credit swaps
    - presenting profits to please owners and payout big bonusses
    - up the interbank lending, to address the shortage of operational cash
    - keep the scam going until "point of no return" was reached
    - expecting governments to induce new cash when truth came out

    The plan worked perfectly. In fact, bonusses will continue to come rolling as nothing has happened.

    If there is a lesson to be learned, it is for the governments to let capitalism work as per design. Survival of the fittest. God knows we need new banks with a much improved set of ethical values. Will this government medling promote this within the exsting banking sector. Not in a million years. Therefore new scams will come, and nothing much will change. Because greed is stronger. So sad as we just had a chance to get this right....

 

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