Irresponsible or prudent?
WASHINGTON: Labour say he's being irresponsible. The Tories that he's showing the courage to be prudent.
Either way George Osborne must have known he was risking huge controversy by warning of a possible "collapse of sterling" whilst the prime minister is abroad at the Global Economic Summit.
The shadow chancellor's thinking is this. A British fiscal stimulus package will be too small to make any real difference if it's affordable, or unaffordable if it's big enough to make a difference.
Why? Because unlike China or Australia we do not have budget surpluses to spend and unlike Germany our budget deficit is not at a level where it's safe to borrow more. Osborne points to warnings by the Head of the European Central Bank amongst others that only those countries with fiscal room for manoeuvre should go for a stimulus.
What's more he has heard from former chancellors Howe, Lawson, Lamont and Clarke and the former Permanent Secretary of the Treasury, Lord Burns about how they tried in vain to stimulate the economy in the recession of the early 1990s.
What, though, of the backing of the governor of the Bank of England? Osborne points to the two caveats that Mervyn King added - that any stimulus be temporary and be accompanied by government setting out a clear path back to prudent levels of borrowing.
What the shadow chancellor was warning of today was the reaction of the markets if they lose faith in the British government's financial responsibility.
What's his evidence? He points to the 25% drop in the pound against the dollar and the fact that markets are demanding double the risk premium for British government debt as they are now for German government debt.
Politically, Team Brown believe the Tories have made a huge mistake and claim he's talking the economy down as the prime minister's trying to boost it.
In policy terms some are more candid, admitting that they are dealing with a balance of risks and arguing that the risk of doing nothing in the face of a serious recession is greater than the risk of being punished by the markets.
UPDATE: Speaking in the House of Lords earlier this month (3 November 2008) Lord Burns warned of Sterling problems, though in a rather less graphic way than George Osborne.
He said: "Each of the three serious downturns that I have observed at close quarters --1974-75, 1980-81 and 1991-92 -- have had two striking characteristics: namely, the emergence of a budget deficit that increased to a point where the restoration of structural balance was a long and painful process; and at some point a depreciation of Sterling that moved from just about being welcome to becoming very painful. Let us hope that we are not forced to repeat those experiences."
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Osborne is telling it how it is. Unlike Brown, who is prepared to say or do anything to save his own neck.
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I think you have to be something of a financial expert to have any understanding of any of this. I would happily go along with what those with actual experience (the majority that is) have to say. The trouble is these are very unusual circumstances. I don't believe we have that much room for manoevre due to our particular circumstances and we have to be very careful not to burden future generations with massive debts laid down today.
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Brown is now accusing Osborne of playing party politics, but it seems to me that in so doing, he is using the same wheeze he tried against Cameron in the Commons on Wednesday. That backfired too.
Osborne is pointing out what everybody can see. He hasn't pushed the pound down to where it is, Brown's policies have done that because the markets can see the terrible state we are currently in.
You have to ask yourself who is more desperate; the Tories who are well ahead in the polls, or Brown, who is trailing badly and even looked likely to be replaced as Labour leader until a few weeks ago.
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Since I have a go when I think you are being niave, I have to be honest when I think you have it right.
You do here.
The media have missed this so far.
They clearly overestimated Brown's love in with other leaders. In fact some are clearly going to be sceptical of his so called status bearing in mind their budgets are in better shape than than ours.
His bigging up of himself for domestic comsumption has consequences elsewhere.
The current conference is exposing weaknesses in the position of Brown. What if he needs a big package for himself but has to do it unilaterally?
People will see through the 'best placed' stuff and the 'world leader' stuff.
He has raised expectations to high in a number of respects and this is now becoming clear.
Some papers have reported there has been a delay in Darling's statement because of a dispute as to the size and risks of borrowing between the Treasury and Brown.
Osborne has concerns about how that panned out.
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Brown attacks the messenger, he has nothing to say about the message...
George is clearly right in what he says, and right to say it. He also clearly has the support of the other repected financial bods in the conservative party - should stop some of the nonsence being spoken about him being in a weak position.
Talking of his position - what is the latest on Mandleson - have you asked him about the news that he did discuss eu tariffs with Oleg?
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Nick
You are actualy analysing this rather than regurgitating Labour spin (or Conservative spin. Or Lib Dem spin).
Well done. Keep it up.
Facts is : sterling has fallen 25% against the US $ in 3 months.. Thanks King and Brown.
Osborne warns: and Labour attempt to blame him for weakening sterling.!
If Darling loses to Brown , we are going to pay a high price... tax rises...to pay.
And I suspect no fincial stimulus will work: people are scared.. And scared people do not spend..
And house prices have still another 40% odd to fall...
Not the background for economic recovery before 2010 - just in time for tax rises to screw us all...
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Osborne is right. A collapse in our currency would be FAR worse than a recession. Forget the bailouts, stimuli and borrowing and PROTECT the pound. We need 20% interest rates.
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I consider George Osborne's comments to be damaging to the UK and find it hard to understand why he made them at this point. Why remark on the obvious in an uneccessary way unless to score political points?
And what is to be gained by further damaging confidence in the UK in the process?
One of the causes of the lowering of the value of the pound is historic. Because we have stayed out of the Euro zone, other members of the EU, such as the Republic of Ireland, have been attracting a lot of the investment which could have been won by the UK.
Are we likely to elect a party with a potential chancellor who jeopardises confidence in the UK for political point scoring? Can't he come up with something constructive to see us through this recession? We might listen and have a bit more respect for him if he did!
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The depth of the borrowings have yet to be truly revealed - how much debt has already been passed down to future generations by the disasterous PFI spending on schools and hospitals ?
Brown and Darling are clinging to the belief they can hang onto power by a tax giveaway and a snap election ~ sadly that may be true, especially with the backing they receive from the media.
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Osborne is completely right - we have a mountain of debt and the value of the pound is already declining dramatically. This can only get worse if the goverment does borrow more to cut taxes. Personally I think anything Brown does will be small and aimed at those people who will be paying more due to the 10p tax debacle
The earlier point is correct - all Brown can do is attack the messanger - no attack on the message
By the way - well done Nick - a good piece with good analysis
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Incredible post from newtactic - he recommends not talking about the budget deficit because that only makes it worse !
Are you Tony Blair in disguise ?
His first defense was always to deny everything, and look how successful that was.
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Osborne may well be correct, but his political judgement is seriously flawed. He has put his foot firmly in it again, it would be different if he came up with some alternatives.
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Does anybody really think that the currency market is hanging on the words of George Osborne ??
Get real. The pound had fallen to a six year low against the dollar and an all time low against the Euro all before Osborne uttered a word.
Come to think of it, does anybody really think the currency market has been hanging on the words of Gordon "We have the best placed economy" Brown ? The problem is that market don't believe Brown's view and probably don't think he believes it himself. Hence the more he has talked things up, the lower the pound has sunk.
The performance of the pound is driven by the market's view of current state and prospects of our economy.
The views of such as Lord Burns, the EU, IMF and other detached experts are much more likely to be influential.
Why Osborne came out with this stuff, only he will know. It won't make a bit of difference either way but it will allow Labour to play the irresponsible behaviour card.
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I believe that Osborne is simply trying to score a political point.
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Oh dear - it's not happy reading. Gordon Brown is behaving like a clumsy carpenter with a wobbly table, chopping and hacking at each leg in turn and not realising that the more he fiddles and pretends he can save the situation, the more ridiculous the whole thing looks.
I would have thought it obvious that if many of the population have borrowed beyond their means, and the government has spent beyond its means, that the last action of sane man would be to throw more money he hasn't got at attempts to make people spend more of what they haven't got either....
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Why is Labour upset by Osborne? Only a short while ago we had Alistair Darling going very public saying that things were the worst in the financial sector for 60 years etc etc. Then we had Robert Peston being feed every gloom and doom story about the uk`s banks; but I don`t remember Labour complaining about his rectoric of failures within the banking sector. In actual fact I think they encouraged his "gloom and doom" reporting for their own politicial ends. I think we saw the real Gordon Brown at PMQs about Baby P saga and saw how leaden he really is a leader. As the days pass his world economy tosh - How we as a country are better placed to ride this credit crunch out etc etc is being seen for what it is. A cover story. Labour caused many of our current problems in the first place and by remaining in power they are now THE problem. They only know one way to govern and that is to spend more than the country earns with no thought about getting value for money. Being prudent. Don`t make me laugh. GB could not be prudent if he tried. The next idea. Give more to those on benefits. All I can say elections are not won by the opposition; but lost by the party in the power. Stick to that plan of giveways to the unemployable Gordon and you will lose big time. No wonder GB has been out of the UK so much lately. TB did the same as people could no longer stomach him. Gordon is totally out of his depth and we are totally incapable of doing anything about it until this Govt runs out of time and has to go to the country - whatever will be left by that time heaven knows. Getting back to George Osborne. There is no doubt he is totally right in what he says; but because of the yacht saga I think now he lacks personal credibilty. The Conservative Party needs to bit the bullet and off load him for a big hitter such as William Haig or someone of his ilke. David Cameron needs to get it sorted and quick. Labour needs to be tackled head on about the dire state of the counrty`s finances without the subliminal reminders of Mandy and George`s summer holiday.
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This isn't a one-party state- the opposition is there to oppose when it feels it ought to and should be able to express its opposition at all times. That is for the good of the country. The PM should get on with prime ministering if he is up to it instead of trying to stifle dissent. Suggesting that the oppo is 'playing party politics' is itself an example of party politics.
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How is it possible to talk down an economy that is already in the gutter thanks to 11 years of Gordon Brown's stewardship?
And while I am at it, why do BBC headlines lead on Labour's response rather than Conservatives original comments?
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Totally agree with George Osbornes statement. It is high time Gordon Brown's spending plan was challenged. As he [GB] is constantly these are difficult times and the public should be warned about what GB is planning to do and its potential long term effect.
"What, though, of the backing of the Governor of the Bank of England? Osborne points to the two caveats that Mervyn King added - that any stimulus be temporary and be accompanied by government setting out a clear path back to prudent levels of borrowing"
Problem with GB is that his stimulus period could run for up to 2 years and right now we are now seeing a clear plan. Just borrow to make the electorate more comfortable.
The Conservatives must challenge GB & Darling because right now their plans look very dangerous indeed, given the current debt levels and trade deficit.
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A number of people have been warning of a possible run on Sterling for some time, and it's quite sad that it's taken Osborne opening his mouth for it to receive any publicity.
Sterling has been on a downward trend against all other developed currencies, which is an indicator of just how little faith investors have in near-future of the UK economy compared to other nations.
Heavy borrowing, falling interest rates and the fact we are not - despite Labour spin - best placed to weather the global recession are all having a downward pressure on the pound.
Labour seriously need to stop spinning, pull Brown out his Norma Desmond impersonation and start doing what they were voted in for - running the country.
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The idea that one man (never mind one not in power) can "talk down" the currency is laughable and shows a lack of economic understanding. The British economy is in trouble and global markets and international investors know it. The fall against the dollar and the euro is evidence of the problems we face relative to the US and EU, it's not because the Shadow Chancellor has opened his mouth and talked sterling down!
Surely we can't expect the Conservatives or Lib Dems to keep quiet if they think Labour are damaging the economy, just because it's a crisis - no matter how international Brown wants to say it is, this crisis is at least as much Labour's fault as it is anyone elses.
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Am i missing something here? dont we want a weak exchange rate? inflation is not going to be a problem for the foreseeable future, but like the period after devaluation in the aftermath of ERN, a weak currency would help to get the economy moving again by boosting the export sector and encourage consumers to buy more home grown rather than imported goods...
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Perhaps we should listen more to the views of economics nobel prize winner Paul Krugman, and BoE governor Mervyn King, than history and politics graduate Osbourne, regardless of how well funded his office is...
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We are spending far more on imports than we are receiving on exports. The Govt has a large and growing deficit on expenditure which has vastly increased Govt borrowings. Falling interest rates will also reduce our already historically low savings rates.
All these deficits need to be funded and I'm not sure how it can be achieved without raising interest rates, rising inflation and a background of a falling exchange rate. We are in BIG trouble, thanks to the economic mismanagement of this incompetant Govt over the last 11 years.
On the other hand, it is clear that the dollar is over valued and is increasing in value, not because of the strength of the US economy but because of huge demand for dollars to settle outstanding contracts arising from the unravelling credit crunch. When this pressure unwinds, I would expect to see the dollar fall in value.
As to the Eurozone, they are heading into recession led by their biggest economy, Germany. The strength of the Euro is particularly damaging to German exports and this will drag the Eurozone into a deeper recession. It will be particulalry damaging for Italy and the weaker economies of the Eurozone.
Bad as our position is, I'm glad that we aren't members of the Eurozone as I believe that if we were trapped in the Eurozone with their overvalued currency and with no control over monetary poicy, our position would be far worse and the recession we would suffer would be far longer and much deeper as a result.
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Secret Love @ 11. I'm not Tony Blair in disguise. I share nothing with him, not his politics or even his gender! I've just been aware the pound has been falling in value for some months. It has meant people from abroad have been having cheap holidays here for a long time and we have had expensive holidays abroad (if we can afford them). It has meant that imports are more expensive, but our exports are cheaper for other countries.
I will re-iterate what I said in my "incredible" post. I can't understand why George Osborne should be remarking on the obvious in this way. I find it disappointing for a potential chancellor to be coming up with negative comments rather than constructive ones. Is that so incredible? We need opposition parties who can offer something positive if we are to consider electing them. Is that so incredible?
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Come on Nick
Mr Brown has been talking down the pound at every oportunity. Even this weekend he's telling everyone who will listen that their is plenty more cuts in interest rates to come.
Stop being so neive, Mr Brown is'nt.
He knows that the rate cut can't stop the contraction whilst Banks and hence businesses are forced to deleverage.
So why is he pushing it? He must want the pound to fall.
May be he thinks if we all have more pounds in our pockets we'll vote Labour even if they are worth less.
Oh sillyu me Labour tried that before. The pound in your pocket.....
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George is in a blue funk. His best strategy is to keep his head down. But the funk calls forth action. So, talk rubbish - even if does damage - rather than do nothing.
This is a real test for David Cameron - he needs to hand out a Tory ASBO to George or he too will go down in history as a Bullingdon stalwart. Now is the time for David to break with the silly bits of his past. Sack George now.
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Sterling gets kicked around by the City. (That is why they do not want the Euro, incidentally.)
I recall trying to do export business when sterling was 2.40 to the US Dollar - It was almost impossible to compete. (This was under Mrs Thatcher) I also recall some very low valuations 1.3 or 4 - lovely to export goods, but unfortunately all our manufacturing capacity has been slaughtered by the 2.40 earlier! ( I also recall being told of 4 or 5 US dollars to the pound by my father.)
What business needs is certainty of raw material cost and export price. (That is why we should be in the Euro as 60 percent of our export business is done in Europe.)
However the City needs volatility; ups and downs and uncertainty benefit traders in the City.
So, George Osborne, is acting like a good Tory and magnifying uncertainty so that the City (we suppose to be his friends) can make money. Or he is just being ignorant or just plain mischievous.
Just keep announcing policies George - you have next to no chance of implementing any of them.
I go back to my point about interest rates (that nobody seems to want to react to!) Interest rates may have been lowered by 1.5 percent and the treat of further reduction has been made, but Barclays is paying 14 percent for it new capital - the spread between small savers and big investors is astronomic and can not last. The whole market is unstable.
The Banks will not follow the Bank of England down as they need to attract money - The Bank of England will have, in the end, to follow the Banks and put up rates to a sensible level (6 or 7 percent) sometime sooner rather than later. The present spread in the market is unsustainable and the Bank of England has lost.
We are getting the worst of all Worlds, a situation that is not unusual for the UK, The perception that interest rates will be lowered too far depressing sterling and an actuality for big investors of ever higher interest rates to discount the effect of the lowering in sterling. This will force domestic rates up and is a highly unstable situation which the City will make money out of (just as intended, Mr Osborne) and for which the people will pay.
A lot of this can be put at the door of Mervyn King. I still do not understand why lower interest rate will not re-inflate the property bubble. Perhaps that is the intention, so that equity release can start again and this can boost the GDP. This is a really daft idea Mr King! (about the daftest anyone can possible have in present circumstances.)
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The idea that one man's words can damage the currency is ludicrous.
And so is the "oh it's good for exports" fallacy. What do we export anyway? We don't manufacture anything.
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Here's something interesting.
Gordon Brown and his friends are trying to present him as the economic saviour of the world, the man to whom other world leaders are turning in their hour of need.
Yet I've been reading the fascinating article in today's Washington Post about the G20 meeting. Fascinating not because of what is in the article, but because of what isn't. As one might expect, the countries in attendance and their world leaders are mentioned in the piece, but there is one very notable exception: Gordon Brown. The article runs to 2 pages, yet the man who claims to be running the show and leading by example isn't mentioned once when practically everyone else is.
Perhaps the G20 meeting isn't the Gordon Brown show after all. Perhaps other leaders are not so keen to take advice from a man who is dealing with a much bigger debt burden than any comparable economy. Maybe the narrative in this country's media is a little out-of-touch with reality and is due a correction - rather like the economy, some might say.
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@25 - Apologies for my error over your gender.
With Labour's policy of stealing ideas and claiming the credit of course Osbourne isn't going to proffer suggestions to resolve 11 years of mismanagement - the best solution would be for the government to resign - and possibly the only chance we have.
Staying out of the Euro-zone has protected our economy, not the obverse. Ireland attracted money by getting EU money (from us) and spending it sensibly on improving infrastructure and offering low rates and startup bonuses to companies to come aboard. They're also going to be amongst the hardest hit as American companies shed jobs this side of the water rather than at home.
We'll lose out in this country as labour intensive work is moved to cheap labour pools in the emerging countries of central Europe and the Far East.
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All hail the mighty leader and his glorious trips to the ends of the earth to save us from this Osborne man.
What nonsense.
The economy is an absolute mess, the pound has lost a quarter of its value in 3 months, and all before Osborne even said a word. Maybe the real culprits - those in Nos. 10 and 11 - should get their heads out of the sand and aknowledge their mistakes before it's too late.
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As long as Nu-Lab are in power
They'll do nothing else but devour
All the money we earn
(Brown it's not yours to burn)
We've no choice but to kick out this shower.
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newtactic says "I can't understand why George Osborne should be remarking"
I would suggest its called politics. George thinks what Gordon is proposing is wrong and that if correctly briefed others will also see it is wrong. If so he "George" will gain political strength.
As to the facts.
If Gordon is merely using spin to cover his massive structural overspending then the sooner we all demand he stops the better for all.
If Gordon can persuade the rich countries to inject Fiscal stimulus great he's a giant on the world stage.
If Gordon is going to spend our last available credit on daft useless waste just before we face a decade of paying for it then at best we should demand he be forced to sign up to an IVA or Debt management plan, failing that an election
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Brown calling for more interest rate cuts has done more damage than Osborne has today.
Brown hiding the massive debts of PFI, Network Rail and Northern Rock has done more damage to Sterling than Osborne did today.
Brown wanting to borrow more will do more damage to Sterling than Osborne did today.
The City has spoken, we are still on the downward slide of this recession and Sterling has lost 25% already.
This is Brown fault, no one else's - Brown's.
When Darling was very vocal on our economic chances when Brown was practically booted out, that did far more damage.
And Peston's "scoops" did more damage too.
Osborne makes a very good point.
A Keynesian splurge is not the answer, Labour touted that and then dropped it.
So much for Krugman.
Now a Monetary splurge by borrowing money to cut taxes will not work.
What is needed is to slash government spending, trim out the fat, close the quangos and cut taxes.
The city will recognise that, Sterling can be allowed to find a proper level and borrowing does not increase.
Better still, the tax cuts are likely to be far more permanent than 'temporary' - in other words, higher later to pay for them.
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Osbourne is very wrong. He is running down the country. It is high time Her Majesty's Opposition stood square behind the Government, regardless of party sniping. Take the example of Obama's election when every US politician, regardless of party, stood up and backed him to the hilt. Sometimes we just need to think of country before party. Osbourne has put his foot in it again and should be sacked
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Brown's a bloodsucking parasite
Who cares nothing for the public's plight,
And he'll take any chance
For personal advance;
Nu-Labour's reign is a blight.
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With the pound already dropping like a brick down a well,and the stock market crushed there is only Gordon Brown saying things are all rosy in the garden and like Baldrick he has a cunning plan....
Well the cunning plan is ????........ because everything done up to press is going to make things far worse before they get better....
And as for Osborne playing party politics its his job,and he would be attacked for saying nothing........its all Labour have left is personal attacks,everything else is phoney !!!
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It's not Osborne who's being irresponsible it's Brown and Darling with their ever more desperate "re-arranging the deckchairs on the Titanic". Brown is once again showing his financial naivety,something those us who could see past his self-proclaimed brilliance over the last decade are only too aware of.
Other countries can afford to spend their way out of recession,can afford tax cuts and rebates because they did what Brown seems incapable of getting his head round and put money away in the good times in case of bad times.A former Chancellor shouldn't need to be reminded that if you borrow money you have to pay it back,if you're in debt you can't borrow your way out of it and when you're in a hole it's time to lay the spade aside,not hire a JCB.
Brown's brief metamorphosis from Village Idiot to "maybe there's a brain in there somewhere" is over and we're back to hideous gaffes like his disgraceful blusterings at this weeks PMQs,ill-thought -out knee-jerk policies and speeches full of half truths that the media rip to shreds within minutes.At some point someone is going to have to address our ever-escalating national debt,something else Brown seems incapable of telling the whole truth about,even now he's handing out taxpayer's cash to the useless and feckless,this time it's money for fat people to lose weight while pensioners have to watch every penny they spend feeding themselves.
Brown has been a total disaster,a total failure as a PM who's reaping what he sowed as a total failure of a Chancellor,only him,those on Planet Nulab and Nick Robinson don't seem to realise this.
Typical of Brown was his much-publicised trip to meet "the oil-producing countries". Take a trip to Aberdeen Gordon,take a ride in a helicopter and marvel at all those metal things in the sea,what might they be? Maybe he meant "the oil-producing countries whose dim-witted leaders didn't squander all the oil money".
And no I'm not a Tory,just another disgusted and disillusioned ex-Labour supporter.
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Nick, I dare you in the interests of political balance to post a link to the recent piece in the FT by Willem Buiter (ex-MPC) who illustrates exactly why the UK is facing a significant risk of a collapse in the pound, amongst other things. In fact he compares London to Reykjavik-On-Thames.
George Osborne is only echoing the comments made by former MPC members.
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36 said:
"It is high time Her Majesty's Opposition stood square behind the Government."
They are called the Opposition for a reason; when the government does something stupid, or makes decisions that are bad for the country, the opposition are supposed to call them out on it. Sorry we don't live in Soviet Russia.
"Take the example of Obama's election when every US politician, regardless of party, stood up and backed him to the hilt."
Except, you know, his opponents...
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Can anyone explain why on the Today programme Osborne's comments are given prominence, but when the item is actually discussed the BBC do not wheel out learned economists to help us understand better what may well be the truth but a beeboid correspondent who sets about character assassination of Osborne telling us about RON, that he has not got many "friends" in the Tory party and it's wrong of him to whistle blow.
The money market would already seemed to have judged the situation with the "independent" Bank of England being strong armed into reducing the interest rate, which had been a major prop in holding sterling's value up.
Shoot the messenger in fact, particularly if he is Tory and even more so if it is George Osbourne.
BBC bias on show again? I think so.
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Young George Osborne just doesn't seem to be able to stop putting his foot in it. Whether to borrow to boost the economy is a matter for serious debate. Personally, I feel the timing is wrong, as to do so it needs something to grip on, and there is just too much uncertainty in the global economy at present.
Which brings us onto one of the knowns, that the market will respond to sentiment and confidence. So to use such language as "a proper sterling collapse" in public like this in Mr Osborne's position is either reckless or deliberate.
He just seems completely out of his depth, as shown by the lack of anything constructive from him in recent weeks in the crucial period, and that slightly lost expression we have got used to now replacing the smug look of old. But now it also appears our Gideon is more interested in his and his party's position than that of the country. He has clearly put the former before the latter in using language such as this.
So a serious test lies ahead now for Mr Cameron as well. As the shadow chancellor hesitates then fumbles, and shows successive failures in judgement - does Mr Cameron have the courage to replace his Bullingdon friend?
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In reply to post 36... what a load of rubbish.
The most relevant American parallel would be what happened when Bush proposed a $700 bn bailout.
Did the Democrats meekly accept it rather than disagree? No, they voted it down, and the package was only accepted at the second attempt.
Brown criticises Conservatives for having no policies, he criticises them for having policies. He doesn't believe in borrowing, he does believe in borrowing. He increases tax on the low paid, he wants to reduce tax on the low paid.
He is a hypocrite who wants to distract attention from his own failures.
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It is unfortunate that we have a priminster of such mediocre abilities.
This economic crisis could have been prevented, with three simple rules.
1.Banks could lend more than 70% of the value of a house. 2. Not lend more than 3 times joint income. 3. Any institution giving a credit facility, ie loan or credit card had to be sure that total loan repayments (including theirs) did not exceed 40% net income.
If Gordon had done that 10 years ago, how many people would be struggling with debt today. Very few.
But then he would not have had all that lovely tax money that he squandered.
Gordon now has no more money than the council tenant borrowing from a loan shark to pay bills now due.
This fool still does not understand that when you borrow today, you will spend less tomorrow. Well Gordon. Tomorrow is here.
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Look at it from Good-time Georges point of view. He's just returned from his holidays and has told everybody that he has been doing Caroline Spelman's job because she has been working at home. The 1922 Committee think he is rubbish at his job and his best mate David Cameron has taken over the economic brief using all of the knowledge he gained from Lord Lamont. The Sunday papers are going to give him a hard time so he needs to make an impact. Last time he briefed Journalists about what he had been told in confidential briefings so he's got nothing to lose. Sod the economy he's got to look after his career. Any other questions?
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This is all the golem Brown's fault - he was overtaken by his desire to be prime minister that he lost sight of his job as chancellor. He fuelled the most irresponsible practices of the banks (and copied their "off balence sheet" accounting with PFI) and bowed before the almighty "masters of the universe".
All these redundancies going around and the one who really deserves his P45 is the golem at No 10. But eventually he'll be kicked out to some non-executive directorships and the like while those devastated and destroyed by his policies will struggle on.
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It's not just George Osborne saying this - listen to Willem Buiter (professor of European Political Economy at the London School of Economics) on the Today programme on Friday. The interview with him starts about 4 minutes in to the following replay:
http://news.bbc.co.uk/today/hi/today/newsid_7728000/7728875.stm
Enough to put you off your cornflakes!
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Has Gordon found a newcatch phrase.Last week he acussed David Cameron of playing party politics over baby P.This weekend hes at it again with Osborne. Prudence has got a lot to anwser for and the sooner the Conservatives start to attack him the better.
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I am not a financial expert so I can not comment on which way is correct to lead the way out of the current economic mess.
What bothers me greatly is the lack of sensible debate that I believe is needed.
Every time someone raises an alternative or disagrees with Brown, or one of his Ministers, they are met with a torrent of ridicule or told they are not helping the country. This occurs regardless of the subject in question.
In my opinion, the current Labour government are becoming more intolerant of debate than any political party I can remember.
This does not bode well for our democracy.
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I'm beginning to think Gordon Brown is a genius. He has done more damage to the economy of England than any Scot since William Wallace.
Could one man be so self-serving that he would destroy his country to further his own ambitions ? Or does he have a different agenda ?
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i think it is obvious that this governments reasons for there method of dealing with the problem of the ecconomy is to ruin the pound and thus force us into the euro without any refferendum or debate.
this is the legacy of the blair policy of crippling this country reducing it to a also ran in european terms, these neu labour traitors dont care they will probably recieve a nice bonus from there european bosses.
osborne may have spoken true but sadly little to late and with no sign of a general election there is nothing we can do but accept what this traitorous government are doing.
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A slightly selective post there in number 30, as another Washington Post article today on the actual output of the meeting includes reference and such quotes as, "Brown has taken a lead in pushing for a global coordination of county-by-country economic aid plans." Reference to the New York Times critique of Brown on 13th October may also make you pause and reflect. (Or not, of course, if taking the soft route of let's blame Brown for everything is just easier).
Don't get me wrong - Brown has made mistakes, and it is to a large extent Darling that has been something of a surprise in recent months and has a lot to take credit for. But compared to the paucity of ideas coming from the opposition, there seems little doubt we would be a lot worse off right now with the Tweedledee and Tweedledum combination of Cameron and Osborne. All Mr Osborne has done today is underline that with yet another lapse in judgement in the language he has used. Hopefully the markets do not take him seriously enough for this to do real damage come Monday morning.
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Osborne is absolutely right, the markets are very politically independent and they will punish very severely ( as they have always done in the past ) any imprudent management of the economy. The markets have already shown what they think of Bust Gordon and the pound has already been devalued following Brown mismanagement of the economy
Anybody daring to express a critical opinion of the the great leader is branded as a traitor , sounds more and more like Stalin than Mr Bean.
Perhaps Crash Gordon is getting a bit nervous and scared that he is about to be found out .
Perhaps he is not the great world leader he thinks he is and that other countries are not prepared to take lessons from the man who is responsible for wrecking his own country economy
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Anybody out there old enough to remember Wilson H and "the pound in your pocket"?
If this does not work and Brown has to go to the IMF, the terms are going to be very onerous indeed.
Be afraid. Be very afraid.
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Batson_D_Belfry no one can be that deaf dumb and blind even a bat.
Darling and Brown have already said UK is facing its worst Financial meltdown in sixty years.
Osborne has merely said if brown borrows with no clear plan to tax us to pay it back the market will punish us.
If you read what the Bank of England said it is exactly the same.
Osborne's point is standard text book and true. He cannot impact the market by saying it as the markets already know. Thats why they are dumping pounds.
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How much of this current disaster was fuelled by Gordon's decision to take house prices out of the RPI ?
It allowed house prices to escalate without his precious inflation figures being affected and so everyone felt secure because they had the security of their own home.
This then meant that house prices reached such ludicrous values that the housing market was under threat. So Gordon allows the FSA to relax the rules on how much you can borrow - or the need to prove you can pay it back. House prices carry on upwards and Gordon can carry on boasting about how he's ended boom and bust.
Well he's ended it now ~ with bankruptcy !
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Someone had to say something. Brown was starting to believe his own spin.
The man has crashed the economy and we have to keep a very watchful eye on everything he does until he has been removed.
Brown's actions are calculated to save his job. We have to question if any plans are actually in the best interests of the UK as well.
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Stay silent and be supportive in that way draws Labour attacks of "no solution from the Tories". Have the temerity to criticise and a receive a broadside from the PM for being irresponsible. It is unwise of Mr Brown to go anywhere near the word "irresponsible" while talking about the finances of the UK. He has let debt (both public and private) rip for the past decade and we are all now about to start paying the price. Some of those reading this blog will lose their jobs, more will see their budgets tighten, we will ALL pay even more in our taxes. My only hope rests in an election in which the following sadly may be proved to be true: Britain votes in a Labour Government with an empty head and votes it out with an empty wallet.
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Mr Robinson is in danger of declaring his colours.
I'm not declaring mine just yet cos I'm a Scot and that would raise hackles in deepest Englandshire.
Anyway I think we should try our best to pull to-gether for a wee while.
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Well said George Osborne
It is about time someone had the courage to tell it the way it is- overseas investors and indeed speculators know exactly what is going on and they do not like what they see.
Funding the government is current done by around 75 percent of overseas investors -last week we saw several other gilt issues in the market and there is so much more to be funded
Investors are unlikely to do it unless long term interest rates are higher and if course the more money you raise the more the country has to earn each year to pay the interest let alone the capital
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Two things spring to mind.
1)
A Darling, then the head of the BOE, then Brown have all stated that we are in a bad way and all 3 sets of comments caused large drops in the value of the pound.
2)
The 1st of December will mark the end of a lot of small businesses, my because the Vat and Duty free import limit will change from £19 to £105. That means that ANY thing from perfume thru DVD's to small electronic devices will be imported instead of being brought from the high street and small retailes.
All I can say is in the difficult time Thanks a Lot Gorden this tax change could be the christmas death nail in a lot of UK businesses.
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Osborne is telling it as it is. A fool like me could and did work it out a while ago. There will be a run on the pound and interest rates need to rise not fall, spending has to be reined in, not increased. It will be painful, I realise, but the alternative is mass unemployment and a longer recession.
Take your pick.
It would also be interesting to know if Gordon Brown honestly believes he can win the next general election. If he doesn't then the policy he is following is perfect - diabolic for the country, perfect for the new opposition.
I wonder ....
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And I thought that it was Gordon Brown who's been talking down Sterling for the last 2 months.
No doubt if it goes down the plughole sometime in the next couple of months this lousy government will say it's all Osborne's fault. True to form Brown never admits his own mistakes; like the last 10 years of debt funded boom.
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The real issue is not what Osborne, Cameron, or anyone else thinks.
This crisis is Flash Gordon's greatest pride and joy. He has spent years and years waiting for his big chance to same the entire planet single handed. If someone else has any ideas about how to do it, he gets really annoyed. And if someone else has some sensible, practical ideas that might actually work, he gets REALLY REALLY annoyed.
The kindest thing to do would be just sedate GB and wake him up when it's all over - 2015 should be about right.
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Nick
Mr Osborne is doing your job highlighting the shocking decline in our currency something you and the other BBC Labour puppets should be doing.
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The pound was already collapsing before Osborne's statement.He is merely telling the truth unlike Brown who will blame everyone else but himself and his party.No amount of Mandy/Cambell spin will convince us otherwise.
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Nick, raising a vaild point of concern, which Osborne did, is very different from scare-mongering. Cant the PM see whats in front of him or has he completely lost the plot now?
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This attack on Osbourne is bullying no more no less..
If you assume he is a truthful person and really believes what he says and really unless there is proof to the contrary then he must be taken at face value.
This is indeed a very worrying alarm and one we should all be taking seriously..
If he thought this and kept quiet for fear of being accussed of scaremongering then he would really be irresponsible.. Also if this is what he believes then he should say so as Brown will be very quick to say it was unforseen by the tories too and leave himself blameless.
Shame then Osbourne is being shot down for what is likely to be true.
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I've just realised what George Osborne is up to: if he can't stop bankers being paid their obscene bonuses, then he'll do what he can to see that the money isn't worth anything. He must have been to the Gerald Ratner school of Say What You Think. Best keep him in in a sound proof room, preferably with Mervyn King.
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Brown has not balanced a budget since 2002 and has increased debt by over £200bn, even before Northern Rock and the bail outs started, never mind the £100+bn of PFI and £1trillion of public sector pension liabilities.
He is an economic incompetent and that he is now playing the man, not the ball, shows how devoid of ideas he is.
Shame the BBC allowed itself to be spun.
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On his BBC report Nick Robinson said that The Labour Party were delighted by what they perceived to be a mistake on George Osborne's part. It gives them the opportunity to make some political capital out of his intervention as well as absolving themselves of blame if their policies backfire. A sweet double whammy as they say. They're not in the least bit concerned about any ramifications. The run on sterling has nothing to do with The Opposition and everything to do with the policies of The Government.
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Anyone else notice the Institutional bias on the BBC website
http://news.bbc.co.uk/1/hi/uk_politics/7731163.stm
Since when did Osborne "attack" the government policy?
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Osborne's right. He's just pointing out the risks we run. Brown's strategy is to make any questioning of his policy somehow disloyal. It's not. The truth is, far from being the best placed in Europe to weather this self-inflicted crisis, we are in the worst condition to do so and that's because under McPrudence we squandered our strong fiscal position and allowed the City to rip.
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Osborne is right to state what is obvious to anyone with a basic grasp of economics - unfortunately this is something Brown is lacking in. To accuse him of trying to talk the market down is rather ridiculous, as the £ has managed to fall over 25% with Gordon doing all the talking up until now.
When Gordon and his BoE poodles cut IRs further, and the £ drops to 1$, who's he going to blame then?
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Of course Brown's actions will lead to a run on the pound, but then a desperate man will do anything to attempt to save his rapidly disintegrating reputation.
The fact of the matter is that the pound has already devalued relative to other currencies - it is 25% down against the Dollar, 40% down against the Yen, 30% down against the Hong Kong Dollar, 14% down against the Euro and so forth.
Unfortunately, it is now becoming abundantly clear that the whole world has indulged itself in bogus lending above and beyond the capacity of us all to repay the amount of debt.
Closer to home, it beggars belief that no one could see that we were creating an unsustainable economic mirage. It is all very well for Osborne and the Tories to now talk the talk now, but they, and the Lib Dems, were part of a foolhardy political consensus that has brought us to our knees.
For years, we hid the real rate of inflation and masked the widening chasm between earnings,which have been falling in real terms, and the ever increasing costs of living, with a range of credit mechanisms. The luck had to run out sooner or later.
I really can't see any way of this mess - and, if they are honest, neither can our political and economic masters. Dire times indeed.
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I notice Secret Love @ 57 may be missing the point about the housing market.
The house prices in the UK went up because it was easy to get a mortgage and demand for houses in some parts of the country exceeded available housing stock, although this was not the case all over the country.
Add to this that figures from various sources quoted asking prices rather than actual selling prices. This meant house price averages were exaggerated as well as being inflated by demand.
Because speculations were made by some UK companies on "sub prime" or "shack" properties, speculators and investors sold and bought shares in properties which were not worth much and were occupied by mortgagees who could not meet their commitments. This created a huge property black hole and, when exposed, resulted in a near moritorium on mortgage lending.
Housebuyers were unable to get mortgages and this reversed the situation. Because demand fell, so did the prices... to a more realistic level.
Given the above, I would have thought taking house prices out of the RPI was quite a sensible move. I would be delighted if Secret Love would explain to me how it could have caused house price inflation and the current economic slow down.
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If Osborne was predicting a Sterling collapse at a time when everything seemed OK and the currency was stable, this might have seemed irresponsible. In fact, he is warning us about continuing down a disastrous policy road.
The reality is that Sterling is ALREADY crashing against other currencies. Just look at what this tells us. International markets think that the UK outlook is worse than that of the Eurozone countries (despite the acknowledged onset of recession there), and worse even than that of the US (where, on top of other economic problems, the hugely important auto industry is in very deep trouble).
Brown's mantra of borrowing our way out of trouble needs to be challenged, because it is excessive borrowing that has got us into this mess in the first place. Osborne is right to warn about the risks that are being taken.
Even presupposing that HMG is able to borrow tens of billions more - which, given the state of the forex markets, seems doubtful - the cost of this borrowing, and the broader economic implications, are scary.
I know that I may be derided as a doom-monger for saying this, but I believe that the forex markets may be accurate lead-indicators for a full-blown UK economic collapse. The risk of economic catastrophe is now being priced into Sterling. My best guess is that this could happen as early as the first quarter of 2009. Just this time, I really hope that I am wrong.
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Brown is obviously the monster behind our financial disaster - but like Mandleson, is beyond any censure.
So maybe a better target for our ire is darling -- we know brown is mad, but it is darling would get more credit as 'the man who save the UK from mad brown' than 'the mad who stood next to brown'...
Talking of Mandleson - any progress on that story Nick?
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#36 Bradgate5 wrote:
"Osbourne is very wrong. He is running down the country. It is high time Her Majesty's Opposition stood square behind the Government, regardless of party sniping. Take the example of Obama's election when every US politician, regardless of party, stood up and backed him to the hilt. Sometimes we just need to think of country before party. Osbourne has put his foot in it again and should be sacked"
If a drunk pulls you into the gutter, when you're just quietly trying to get on with your life, there is a tendency to suggest that maybe the drunk could change his ways.
Brown has taxed without genuine reflection (or understanding). I've posted before that you can't expect a politician to hold Ministerial office ONLY if they have qualifications and experience within a given sphere.
Brown was an historian. Not an economist. That should be no disqualification. As long as you take a sensible view, politicians should be able to handle difficult briefs.
Best Chancellor I recall was Ken Clarke. A barrister. But using quite a lot of common sense.
Brown has been extraordinarily political, rather than common-sensical, through his life in Government.
That's why the 10p tax-band was scrapped... it was a good idea, which he introduced, then chose to jettison.
But he now says that help should be directed towards the poorer? Hello... Who set that policy and refused to change it, when all parties said it was a dumb move?
That's why he hit the amount of money "allowed" to go into private pension funds. No doubt his "economic advisors" convinced him that companies would pay out more dividends, so there would be some compensation. Nonsense. Companies pay dividends when they can and it helps them.
Some may wonder why the MG rump was allowed to be bought by a bunch of folk who sucked out what they could, then folded the company. (Not sure what happened to a report I was sure was due to examine how Stephen Byers was allowed to make that decision, with the Blair/Brown combine in control. Still don't really know why a sudden injection of government cash was permitted, to avoid MG slashing jobs just before an election.)
I don't much like Osborne. Seems a clever operator. But you could say that about Mandelson. But to say he's talking down sterling is pretty crass.
The currency is plummeting. That's a fact. It needs a degree of protection.
But, at least - being outside the Euro-zone - the BoE is able to adjust interest rates to attempt to influence domestic affairs.
I guess that obstructing our rapid entry into the Euro is the one achievement for which I applaud Brown.
Just means that local politicians have to be a bit smarter when they take our money, decide what to spend it on and then create an environment which makes people spend with caution and save for the inevitable, post-work life.
The guy hasn't ticked too many boxes.
Goodness help us if Brown is the acclaimed leader of the global financial world...
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The 'experts' are the people who have caused this situation in the first place, why should one believe any self avowed 'expert' at all.
I bet I could hazard a guess at what to do, having no knowledge of economics and by random chance might just get it right.
So is it Gordon or is it George, umm ?
eni meany miney moe catch a tiger by the toe if it bites or if it snarls what ever you do let it go.
My well considered and totally unbiased opinion is that George is right or maybe..........oh dear !???
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This is desperation from George Osborne. Forget the convention of not talking down the pound amidst an economic crisis. From his interview with Times, it seems that Osborne has commited a far serious misjudgement. In mature democracies, sensible politicians never take the peoples' vote for granted. Osborne is suggesting that Brown is conducting a "scorched earth" policy because Labour cannot win the next election but the Tories will. This is an insult to the British public.
Oh please, is anybody there at Central Office-please get rid of this goon before he becomes a bigger embarassment to his party and this country.
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Every time Brown opens his mouth to say that we are in 'Unprecedented Crisis' he makes the situation worse. Maybe he should stop doing that before critiquing the words of others.
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Osborne has a point, and he may well be right. However given the Tories love of free markets is a lot stronger than Labour I fail to see how it would have been any different if they had been in power? Indeed they favoured even less regulation of the banking sector than Labour so the situation may have been far worse.
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Blimey Nick, it seems that just parroting what Labour tells you is a bit transparent for most on here.
Why not do a report on the frequency with which Gordon responds to ANY criticism as "playing politics"? Or don't you ever worry that you just might be a pawn in a somewhat Orwellian game of thought control?
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The UK's economy is built on growth from a FRB system. The whole trickle down effect to matchstick seller depends entirely on the financial elite asking for a light.
They have all stopped smoking.
So, the UK is in a very tenuous situation. How does the UK's peers fair? We a technically bankrupt. Like Iceland, the only thing that prevents us having to go cap in hand to the IMF is our 53% secured debt within consumer borrowing.
The housing assets have been protecting our credit rating, but as they deteriorate further the pressure on Stirling is relentless.
Joining the Euro and fixing the exchange rate is seen as a better option than returning to the IMF.
The Tories, like anyone else who can see the cogs turning before the mouth moves know that the Euro option is likely and could happen before they could be elected. The situation so dire it could be rushed through before without consultation.
Hence Osbournes statement.
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The moment the shadow chancellor uttered his remarks, the follow-through was automatic. The BBC criticised Osborne, as though shooting the messenger would revive the pound's fortunes. As lots of other comments have pointed out, the pound is falling regardless of what the opposition says. You can't 'talk down' a health economy or a sound pound. We've got neither and it's the opposition's job to speak its mind. Osborne's a patriot for telling the truth. Brown is a pathetic scoundrel for suggesting that he is a traitor to the nation's interests.
Voters are mightily cheesed off with the institutional bias of the media. Who cares about some arcane etiquette that says that politicians shouldn't discuss the value of our currency?
The next big news will be a tax bribe from Brown, the real Chancellor. It will be irresponsible and, what's worse, ineffective. But the moment the opposition points this out, they'll be slated for telling the truth. Brown's stranglehold on the media is appalling. 'Mugabe' Brown. If he loses the next election, will he barricade himself inside Number Ten and refuse to leave?
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The Pound today is worth 1.12 Euro on the tourist rate. Why should anybody lend money to this country if out currency becomes worthless.
As we have little in the way of manufacturing, our main export for the last few years has been finance, based on our financial skills and the Pound.
Hold on, the Pound is now worth less, so who is going to "import" our currency and our marvelous financial skills, as Mr Brown believes. No one I know.
We are starting, as a country, to look quite broke and remember it is usually those who are broke that the banks refuse to lend to. So why would anyone bail this country out. Well, if you are a loanshark maybe, just look at the price Barclays have "paid" for their "freedom". Oh joy, isn't the next year going to be fun.
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@30 Retro Gamer
You are right. In G20 meeting, no one has taken much notice of Gordon Brown.
The link can be easily found in Washinton's Post.
Despite the efforts of Nick Robinson, Guardian and Independent reporters and the Labour Party who were workin hard to build Gordon Brown as the Saviour of the World, as an awesome economic wizard (Krugman as Nick reports) and a serious experienced man and no novice, alas the G20 ignored him. He was
reduced to talking with Nick and uardian reporters but one of my American friends, who is a reporter says America is not interested in 'yesterday' man like Brown.
Hence Brown shakes hands with Hank Paulson and Bush 'yesterday men' like him.
This reminds me of another Brown visit when Pope Benedict was in America. No one took notice of Brown, the morning show channels gave him a very brief exposure and he was walking in Pennsylvania Avenue forlorn like a shipwrecked man.
But arch egoist and deluded brown will come and boast that G20 followed his advice and BBC will say that he was mobbed in America for his words of economic wisdom!!
Osborne is stating the obvious. The Pound has become monopoly money in Brown's Britain. So much about this Iron Chancellor's economic policies. Wait until, our energy costs go up, manufacturing not benefit as it will go to China or India, engineers who are mostly immigrants as our universities shut engineering courses
will leave with fallin Pound. Brown will never admit mistakes as Stalin did not. Charles Clarke is vindicated.
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@30 Retro Gamer
You are right. In G20 meeting, no one has taken much notice of Gordon Brown.
Despite the efforts of Nick Robinson, Guardian and Independent reporters and the Labour Party who were workin hard to build Gordon Brown as the Saviour of the World, as an awesome economic wizard (Krugman as Nick reports) and a serious experienced man and no novice, alas the G20 ignored him. He was
reduced to talking with Nick and uardian reporters but one of my American friends, who is a reporter says America is not interested in 'yesterday' man like Brown.
Hence Brown shakes hands with Hank Paulson and Bush 'yesterday men' like him.
This reminds me of another Brown visit when Pope Benedict was in America. No one took notice of Brown, the morning show channels gave him a very brief exposure and he was walking in Pennsylvania Avenue forlorn like a shipwrecked man.
But arch egoist and deluded brown will come and boast that G20 followed his advice and BBC will say that he was mobbed in America for his words of economic wisdom!!
Osborne is stating the obvious. The Pound has become monopoly money in Brown's Britain. So much about this Iron Chancellor's economic policies. Wait until, our energy costs go up, manufacturing not benefit as it will go to China or India, engineers who are mostly immigrants as our universities shut engineering courses
will leave with fallin Pound. Brown will never admit mistakes as Stalin did not. Charles Clarke is vindicated.
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I don't know if saying there'll be a crash (or run) is a wise move - slightly alarmist
But little george does seem to have it spot on - we are in no position to borrow more and Brown is simply too cowardly to accept that - 'more borrowing to fix borrowing' does not sound very clever to me, remember Brown said we were the 'best placed' to deal with the crisis a few weeks ago, now we're the worst in the G7? How does he get away with it?
At least Osbourne seems to be making the right noises, but I'm still not going to trust such a young know-nothing as chancellor simply because he's spotted the obvious and he's probably gone a bit too far with a reckless statement
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You are right. In G20 meeting, no one has taken much notice of Gordon Brown.
Despite the efforts of Nick Robinson, Guardian and Independent reporters and the Labour Party who were workin hard to build Gordon Brown as the Saviour of the World, as an awesome economic wizard (Krugman as Nick reports) and a serious experienced man and no novice, alas the G20 ignored him. He was
reduced to talking with Nick and uardian reporters but one of my American friends, who is a reporter says America is not interested in 'yesterday' man like Brown.
Hence Brown shakes hands with Hank Paulson and Bush 'yesterday men' like him.
This reminds me of another Brown visit when Pope Benedict was in America. No one took notice of Brown, the morning show channels gave him a very brief exposure and he was walking in Pennsylvania Avenue forlorn like a shipwrecked man.
But arch egoist and deluded brown will come and boast that G20 followed his advice and BBC will say that he was mobbed in America for his words of economic wisdom!!
Osborne is stating the obvious. The Pound has become monopoly money in Brown's Britain. So much about this Iron Chancellor's economic policies. Wait until, our energy costs go up, manufacturing not benefit as it will go to China or India, engineers who are mostly immigrants as our universities shut engineering courses
will leave with fallin Pound. Brown will never admit mistakes as Stalin did not. Charles Clarke is vindicated
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I love how this article is biased according to the comments - against both sides!!
some people would call that 'balance'...
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Isn't then George Osbourne making the case for the UK to be in the Euro. Too late to do anything about it now for a few years, but every reason for us being in it is now coming around.
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What George and Nick Robinson might think is prudent, is in effect thoroughly subversive of the jittery economy and it completely mis-reads the situation to say that a serving Prime Minister is saving his own neck. He is saving Yours, and everyone else's!
Gordon Brown is not so arrogant as Margaret Thatcher in her insistence there is no other way. But he does Know what undermines confidence in Britain, and George Osbourne is not so bright if he thinks he can play politics with everybody's futures for his own kudos and advantage by doing just that! Back-seat driving is one thing. Throwing spanner after spanner into the works is Another.
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Dear Dear me
Sterling has fallen 30/40% before George Osbourne opened his mouth.
Irresponsible?
The only irresponsible people involved are you Nick and the BBC
Wake up, smell the coffee and tell it how it is.
Sorry forgot.
You are the BBC and just do propaganda
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More evidence, as many Torries fear, that George Osborne is an idiot.
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I would believe political commentators more if they had poibnted out the fall of sterling over the past 3 months. 25% against the US dollar.
A 10% fall againstt the Euro in the past 3 weeks.
The fact that they do not shows how clueless they are and how dependent on political spin from the Government - as evidenced by this affair.
And how absolutely useless most political journalists are: they cannot be bothered to do basic research before writing an article.
After all, if Osborne is talking about a sterling meltdown, step 1 is to look and see what is actually happening.
As Nick Robinsion and the BBC initially today in its news nraodcasts have obviously done no research, their comments there can only be one conclusion:
their comments are as valuable.. as their research. i.e worth nothing...
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I congratulate you on a great piece of journalism. I did not spot an iota of bias this time.
Has anybody else noticed how Brown is now claiming that any criticism of him is a criticism of this country? He keeps on saying that now is not the time for partisan politics. Please God bring an election soon so that we can be rid of him and his government. I don't care if it is a Tory or a Lib Dem government, just somebody else asap.
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We need a tradtitional thatherite response...........................SOUND MONEY!
That means living within our means..............................
NO MORE BORROWING!!!!!
If Crash Gordon hasn't got the guts to get the Gov't to tighten it's belt like that rest of us then it would be better to tax the rich MORE temporarily rather than risk the currency!
Do we really need a currency crisis right now?
All this talk about Keynesism is deadly! Bring back monetarism and Friedman/Thatherite solution...............increase the money supply!!!!!!!!!!!! How? By getting "real" interest rates down to put money in peoples pockets.
We've got another 3% to cut and nothing should be done, like over borrowing that would result in the pound declining any further resulting in Icelandic levels of interest rates.........18%!!!!!!!!!!!!!!
This is Brown's last spin of the dice.................borrow and spend to create a feel-good factor with the political "cover" of an International agreement from Washington.................Let's hope those leaders see right through his cunning and dish his hopes............
None of this would be needed if the Gov't like like the Austrailians had followed a tax and spend policy resulting in a "surplus".
Now Brown is prepared to gamble the future of the country and his political skin on one last desparate throw of the dice knowing that this gigantic gamble will have to be paid for after the next general election in cash and millions of job losses before the election.
Somebody has to stop him. Let's hope that the market on Monday sending a spine shivering shock to the heart of 10 Downing Street to stop this spending slurge and if that happens George Osbourne will have done a marvellous job.
Perhaps then, the "age of responsibility" will return!
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Nick,
it really does not matter what George Bush says, he is a no more President.
As for Gordon Brown I wonder how the other world leaders don't just laugh at his gall. Exactly who voted for Gordon Brown as Prime Minister. Show me the voting papers where it says Gordon Brown or AN Other and a cross against Gordon Brown.
Furthermore, did not our previous great leader the wonderful Tony Blair say that he was going to serve a full term if elected. Can anybody trust Gordon Brown, is he democratically elected. His decision not to hold an election looks more bizarre every day. Spring election folks, spring election, no doubt about it.
Ask him the question Nick, will you be holding a spring election and if by chance the labour party were still to have a majority in parliament would you serve a full term Gordon? Somehow I think he would say that there is a crisis. On that basis how can Osborne be accused of talking the economy down, Gordon is there not a crisis and what happens, we are all depressed because you keep telling us that there is a crisis.
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Nick - I think Mr Osborne is having his Private Fraser "We're Doomed" moment. What value he is adding I have no idea - does he?
If he doesn't like floating exchange rates then its time he committed the Partie Du Conservatiore to the Euro. Then again maybe the Icelandic Krona is more to the Little Englander Party's taste?
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Oh, poor commenters, (not political commentators) did you not realize that the the pound was as overvalued as our property prices?
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Who cares if George Osborne is right or wrong, one thing is clear its time to sell your hard earned Pounds and buy the euro or US Dollar.
The writing is on the wall.
Its not to late to buy US$, I can see the Pound and dollar on 1-1 parity.
Who needs idiotic financial experts and politicians, every man or woman for himself !!!!!!!!!!!!
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Nick,
maybe somebody might point out to Brown that they will start taking his economic advice when he states the obvious, we have lost in Iraq and will soon retreat, and that we have lost in Afghanistan and will soon retreat. For as long as he remains delusional over the wars nobody can trust a word he says.
Sorry, should not have said the above, I am talking the country down!
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Osborne was quite within his rights to say this- it's an important decision (to use fiscal policy to reduce the size of a recession, at the cost of increasing borrowing) and one that should be debated.
The Conservative response to being accused of 'playing politics' is amusing though - saying it is the job of the opposition to oppose doesn't suggest they have a lot of confidence in Gideon (it's not anyway - it's the job of the opposition and all in Parliament to scrutinise the Government and only oppose things if the decision made is the wrong one)
Anyway, if Sterling continues to depreciate, it won't be a Sterling crisis in the usual sense of the word - we won't, for example, spend billions of pounds in propping up the currency as we did in previous crises. Exports will flourish, tourists will find the UK cheaper to come to, imports and foreign holidays will be more expensive.
Didn't here much credit given to the Government by Osborne for the 'Sterling miracle' when it was over-valued over the past few years either. For example, the Economist Big Mac Index (comparing the price of a Big Mac from McDonalds in dollar terms across the world - a bit of fun, but still indicative of trends), suggested that in July 2008 Sterling was 28% over-valued against the Dollar, so the current decline is only gravitating to what the fair value of sterling actually is.
One more thing - I don't understand how Nick R can buy the Conservative line that Germany, with a far bigger debt than us, are more able to borrow.
For example, if I earn £30,000 per year and my friend earns £25,000 per year and I owe the bank £10,000 (up from £5,000 3 years ago) and my friend owes the bank £15,000 (down from £20,000 3 years ago), who would be in a better position to borrow more, me or my friend? would my friend be better placed to borrow.
I suggest talking to someone with a little more economic literacy than Osborne and Cameron to see whether that view holds water (try talking to Stephanie Flanders or Evan Davies)
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Apoloies about my multiple postings. It was not intentional. Somethin went wrong after I hit the return.
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Apologies about my multiple postings. It was not intentional. Somethin went wrong after I hit the return. Now my G key seems giving problems
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The true question should replace the word 'prudent' with the similar looking (but not meaning) 'prurient'.
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re Sterling Decline
Against the dollar, Sterling's year-long high was 2.00147 dollars per pound. The rate is now 1.486 dollars per pound - a decrease of 0.51547 dollars per pound.
This is a decrease of 26% from the peak (not 30-40%, and about the same as the Economists simple index I quoted above believed that the pound was over-valued by against the dollar in July of this year)
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@8 - newtactic
"One of the causes of the lowering of the value of the pound is historic. Because we have stayed out of the Euro zone, other members of the EU, such as the Republic of Ireland, have been attracting a lot of the investment which could have been won by the UK."
you have seen the light!
you have hit the nail right on the head - this is how the labour party bring in what they want to do!
although the exact opposite of your statement is true.
when blair came to office in 1997, the UK had more outside investment than most of the EU nations.
other european countries did not like what we had, companies from around the world came here to make and sell their goods throughout europe (bringing in hundreds of thousands of jobs) as they based their companies in the UK.
what caused the early 90s recession, was buying ourselves out of the ERM mechanism, which tied the pound to the euro, and restricted the government's ability to control interest rates and inflation.
the final straw came when europe would not reduce interest rates to help our economy when we were suffering from a rise in inflation, which was weakening sterling as confidence drained from the UK economy.
the interest rates went so high back then, as the conservative government used money out of the UK economy, instead of borrowing hundreds of billions of pounds, as we have done today.
it was deemed essential to do, as it returned control of our economy back to the UK government, ie, the people elected by us!
who do you suppose was calling for us to stay in the ERM and risk hundreds of thousands of jobs, because they wanted to get rid of the pound and join the euro?
one gordon brown (then shadow chancellor)
gordon brown came into office in 1997, making statements that control of inflation by interest rates would be placed under "the independant bank of england" - and the FSA would safeguard us all from the banks overstretching.
as we now know, for reasons labour refuse to answer, the FSA did nothing as banks overstretched to breaking point with their borrowing in pursuit of profits, to the point where interest rates set by the bank of england, are now mostly ignored and the libor rate of lending is more relevant, even though no one has control over it.
with no control over the UK economy, and no real answers to fighting off "global problems" i can see labour calling for us to join the euro, to "protect us all from global financial problems!"
with one liners like "we will be stronger together" and "we cant afford to be in this position again"
since 1997 labour would have lost a referendum to abandon the pound and join the euro, in the last 12 months, they now have an argument to put to the british people to do what they have wanted for more than a decade!
what price would i get for an election, with the promise of a referendum on joining the euro?
how did labour last bypass a referendum they promised?
what better time to acheive their own plans to join the euro, than scaring the british public - pointing to a huge "global" recession and borrowing defecit?
its not just on the economy they try to impose what they want via the back door, just look at how they have broken up local services since they lost the north east referendum vote (by more than 90%) for regional assemblies - but that argument is for another day!
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People like Gordon Brown, like Steve Jobs and yours truly, tend to have massive egos. We're also the world's natural charismatic socipaths and come with a buiilt in Reality Distortion Field +10.
Gordon's hypnotised all the world leaders into believing he's savior of the world and they just can't stop lining up to buy the "Brown Plan". He's talked them into holding themselves by the nuts.
What does Nick know about politics? A few persuasive words in this blog and he's swallowed the deal hook line and sinker. He doesn't just want to talk up Labour. He NEEDS to talk up Labour.
Or, maybe, it's just the right thing to do. Then again, I would say that because I CAN'T HELP MYSELF. Aaah. Aaah. Mustn't... turn... reality... distortion... field... on... blog...
Aw, c'mon. Lighten will'ya. *Doh*
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Nick Robinson appears to find it very difficult to give Gordon Brown credit.
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Excellent analysis Nick. Osbourne is only saying what we are all thinking and for Brown to deny it and attack him just goes to show how out of touch he is with the rest of the country.
I really hope the BBC can remain impartial in this matter and point out that Osbourne is right. Confidence in the UK economy is at an all-time low, people don't want to invest in the UK economy, hell, I don't want to put any money in the UK economy.
Can't wait until I move to Australia, at least they have a decent export industry...
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Well, my old greeko boating friend Georgio is at it again. How embarrassing. He keeps telling it how it is and with Nick's specific and factual reporting, Gordy just can't escape this niggling issue over how he's ruined the £pound in the past few months. Even Robert Peston noticed and discussed it in his broadcast on 27 October - way before Georgio brought it so explicitly out into the open.
I just loved the embarrassing moment for Georgio when he presented me with the Best newcomer Award the other night. We're great friends now and planning another boating trip together where we can visit all the aluminium smelting works in the Baltic region. Now I'm not the EU Trade Commissioner, and responsible for tariffs, I can see who I want and when I want!
I've had a terrible weekend so far. Gordy keeps ringing me from Washington and asking how he can improve his image. Have you noticed how his lower jaw drops down in a jagged sort of way? It seems to happen after he's been talking for a while and pauses for breath. The jaw-break (as we call it in Cabinet) is the result of terrible jibes against him. People reckon he's a dour-faced Scot. How awlful? Does he really look that miserable?. Still, once he saves the world from financial disaster he's going to have his jaw-break rectified by operation. Unfortunately, the effect may result in the jaw moving upwards and tilting the head back in a strange sort of way.
Gordy told me he is really pleased with the way he handled Nick and the other reporters during his No.10 chat this week. He reckons he's done a wonderful job answering reporters questions by not answering their questions! He told me the secret is to tell another story totally unrelated to the question asked and hey presto - it works. He thought he did a great job on Nick by totally ignoring Nick's question on the economy and then swiftly moving on to another reporter from Channel 5 just as Nick tried to butt in with a follow-up "...but you haven't answered my question..." approach. Gordy just loves doing that and playing tricks with Nick. It's his own little game and is now so good at evading specific questions and issues he's going to try it out on Barack soon.
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#103
After 10 years of this charlatan in charge, it certainly is. The market's wise to him now though, and sterling is headed for oblivion.
I made £15k in a fortnight because I needed Canadian dollars and bought at $2.01 - it was so bleedin' obviously overvalued I couldn't believe my luck.
I am waiting for a small bounce, as is inevitable, and I'm going to make a packet betting against sterling. I advise anyone else to join in, you'll need the money soon as will we all.
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- - -what's more he has heard from former chancellors Howe, Lawson, Lamont and Clarke and the former Permanent Secretary of the Treasury, Lord Burns about how they tried in vain to stimulate the economy in the recession of the early 1990s. Thanks for reminding us Nick.
See, this is the problem with the Tories. They are not capable of distinguishing between a recession manufactured by themselves and a GLOBAL FINANCIAL problem that is pulling down ALL economies around the world, and is being compared to the depression of the 30s.
The Tories are trying very hard to make us forget that this financial problem is GLOBAL, and one can see in the way they are coming up with stupid and idiotic proposals as if they are capable or have any idea as to how they can stimulate an economy.
So all Tory chancellors failed eh! Well, at least we have not killed Sterling, because some novice came up with the idea to keep Sterling within the ERM, when he knew that no one was believing what the Tories were saying about the economy in 1992!
Cameron, senior advisor to Lamont, ha ha. Now that's funny!
Time up for CamBorne marriage!
Bye! Bye!
Good night Nick.
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Another thought.
It would be a disaster for the Conservatives if we only had a mild recession. After all we've been told. Another reason to oppose a fiscal stimulus.
Of course that's not to suggest that Cameron/Osborne have been spending the last year talking us into a recession, or be willing to make the recession deeper than needs be for political advantage. Oh no. They would never go that low
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I would imagine the current economic conditions require a shift to the left, to put more money in the hands of people that will spend it, similar to what happened in the great depression in the US. Devaluing of the pound to make British goods and services cheaper than other countries should also help, as it seems the main danger is unemployment.
Therefore Osborne seems a bit deplorable to me, rather than admitting theres a time when left wing policies are the best thing, he's flailing about unable to admit now is not the conservative's time and his ideology doesn't fit with the current circumstances, and instead tries to put up a smokescreen by attacking the government's attempts to help a difficult situation.
Those are my thoughts on the matter anyway.
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Great comment as always, balhamu.
The biggest issue I have is the use of the word "debate". I tend to think "debate" just pushes people into a winners and losers game. "Discussion" or thesis, and a better sense of responsibility or maturity strikes me as generating better outcomes. In spite of what some less mature vested interests say, I tend to think this is the Prime Minister's preferred style.
Can't remember the person offhand but the parliamentary doobery into whatever suggested that a better consensus in politics wouldn't emerge until after the next election. I tend to agree and place some of the blame on Osborne and Cameron as their lust for power games any sense of political maturity. They're just trying too hard, as Osborne's currency gaffe and Cameron's Baby P manipulation suggests.
With Stirling and house prices returning to some sort of normality, I think, this is a real opportunity if people want to seize it. Getting products to market and customer service are a massive weakness in the British economy but if the price of added value goods and tourism is more favourable then more enlightened business may use that to drive change.
Nick's already commented on the positive aspects of the City declining in power, and for those folks who say British universities will empty of foreign engineering students there's two points: British students got woo'd by the soft option while countries in Asia knew the value of engineering and pretty much own the market. I can't think of one single product in my house that the fantasy economy of UK PLC has produced.
A rise in the quality of leadership, communication skills, the rational engineering mind, and a more polite service culture won't emerge overnight. It's going to take a while to turn the ship around as folks rediscover an interest in these things, education gears up, and business changes policy and practice to get with the new programme. But, there's plenty of books, websites, and courses people can check out to give themselves a head start.
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Post 118 Balhamu
It's not "words" (George's) that bring about recessions.........it's "actions" (Gordon's)
Ends of sermon.
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Someone says:- We need a tradtitional thatherite response...........................SOUND MONEY!
That means living within our means..............................
Ha ha ha ha ha ha ha ha!
Why did I bother to read this, ha ha ha ha ha.
Sound money - Ha ha ha ha ha ha ha ha ha.
This person must have had more then a couple of drinks before writing this.
By the way, I thought I voted for Thatcher 1n 1987, not thather!
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Gordon, please stop running scared of the british electorate. Please call an election before you saddle us with a decade of debt repayment and a weak economy. On a separate note, the BBC are meant to be impartial and not some media wing of the Labour party. I can't wait for Labour to go and the BBC to be cut down to size
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The cheek of Labour amazes me!
So it's ok for Alistair Darling earlier in the year to warn that the ecomony was facing the worst financial crisis in sixty years (as if this did not spook the markets) but not for George Osborne to warn on the implications for sterling of unlimited borrowing!
Also for the past few elections Labour went on and on about the Conservatives "unfunded" tax cuts and their multi billion financial black hole in their figures! Now which party is proposing to cut taxes by reckless borrowing - this seems like a multi black hole policy!
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118:
Why would it be a disaster for The Conservatives if we only had a mild recession? Surely it's in all our interests for the present financial intervention to work. The economy in case you hadn't noticed is not the only reason people are fed up with Gordon Brown and his Government. I'm not going to catalogue the reasons now but anyone with a memory could reel off a whole host of failed policies.
From my own point of view I simply can't stomach the man and never will. His coveting of the top job and the methods he used to oust his boss left me with a particularly bad taste in my mouth which will linger for as long as he is a public figure.
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Post 122 Onlywayup.
Yes I might have had a couple of drinks out out of my Jobseekers Allowance this week as well as a price reduced piazza but what I've said will be proved true!
Watch the currency markets on Monday morning.....by lunchtime you'll know what the markets think of Crash Gordon's "get another credit card" policies...........except this time it won't be 0% interest................... we'll pay for his irresponsibility for the next decade..................
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People .. Stop this !!
Disagreeing with the great leader is not tolerated in the Peoples Republic of Brownland,
He is incapable of being wrong and must be respected at all times.
Oh great one excuse them , they are not worthy.
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The coverage from sky news on what George Osborne said,is a disgrace to inpartial broadcasting,all day they have been one sided reporting from sky news to put down osborne and praise they god brown,not even questioning if it's true what osborne said.This country is becoming a one party state media,come on you people out there ,COMPLAIN,the more complaints they get,the more they know were on to them.
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Yesterday at work I tried to place a seven figure sum on overnight deposit - the interest rate offered? 0.29%!! This was from one of our big 4 banks. What is going on? Do the banks now no longer wish to receive deposits because they no longer wish to lend?
Also, it is not suppose to be up to the Prime Minster to cut interest rates - that's (was)
the Bank of Englands' job! It would not surprise me if interest rates in 2010 climb just as fast as they have fallen.
Perhaps the best result at the next election would be for a hung parliment to force all our political parties to work together to sort out this financial mess!
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The BBC is quick to critisise the Tories all the time. Its Brown you should be asking, its his fault not the Tories. Osbourne is saying what we all think.
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In 2005 Gordon Brown, whilst Chancellor, reassessed the start of the economic cycle. He bought it forward. In doing so he was able to add in about £9 billion of surpluses from those 2 years, so ensuring he could delay any nasty tax increases until after he became Prime Minister.
At the time many commentators spoke of how it would mean nasty decisions would need to be made in 2007 about tax increases or spending cuts.
Brown put off the much needed spending cut backs or tax increases until after he was sure that he would be the next PM.
He put his personal ambition before the needs of the country.
In 2006 Brown knew time was running out. The UK economy could turn sour at any time, damaging his chances of becoming PM. Browns henchmen forced Blair to announce finally that he would step down. Brown finally knew he would soon be able to take on the mantle in 2007.
Brown wanted to go for a quick election in 2007, so that the tax increases could come later. Many predicted that it would be the only window of opportunity before the economy went sour and those tax increases or spending cuts would have to take place. As events turned out the polls started to turn against him. He bottled it.
The global recession has hit the UK at the worst possible moment. The UK is not well positioned. Browns fiddling with the start date of the electoral cycle so that he could avoid tax increases has meant that they are even more urgent now. But the recession means it is the worse time to impose them.
Brown now uses the global recession as a shield to hide his ambitions behind. He will once again put off the tax increases that are needed, instead doing the opposite - a massive tax give away.
He does it for his own electoral advantage, but tries to claim it is for the good of the country.
It is for short term good, not long term good.
Why is the short term more important than the longer term for anyone other than Gordon Brown?
He hopes to gain an extra 5 years from his largesse. His vanity will not allow him to be the PM that never won an election.
Whilst the UK will suffer over the 5 years that follow an election it does not matter to Brown as he does not desire to face a further election. He will have achieved his dream of being PM, and will have legitimised it in his eyes by winning an election.
He knows his largesse will cause a run on the pound, but that can be lessoned if he can persuade other countries to do the same.
If he fails to persuade the other countries he has already prepared his excuses - the remedy will have most effect if other countries follow suit he has told us. So if Brown acts alone and it does not work it is the fault of other countries. If there is a run on the pound it is the fault of Osborne.
If he loses the next election, well the Tories will have to suffer the economic legacy he has left them so why should he care?
He is a calculating politician that puts his own vanity and personal interests first.
Osborne is right to highlight Browns damaging actions.
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Osborne is right.
If the BBC and its reporters were doing their job, we'd have heard the same from them too.
The real 'irresponsibility' is pretending that the elephant in the room isn't there.
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Post 131. egrid1
Spot on mate!
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If George Osborne genuinely believes what he says to be true; as a member of the opposition, not only does he have the right to express his view, but I see it as his moral obligation to do so. He is warning us that Government policy could lead to long term economic catastrophe.
If, however, he does not believe this, but is trying to stitch up Brown, then he will do short term damage to an economy that is on the edge of collapse anyway.
If that's the case, won't publishing debates and blogs on this theme only serve to undermine confidence, which as we all know is crucial to economic recovery.
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#121 NorthernThatcherite
It's not "words" (George's) that bring about recessions.........it's "actions" (Gordon's)
Ends of sermon.
Words are important.
To quote from Keynes in 'The General Theory' (which was penned in response to the experience of the Great Depression in the 1930s):
"Even apart from the instability due to speculation, there is the instability due to the characteristic of human nature that a large proportion of our positive activities depend on spontaneous optimism rather than mathematical expectations, whether moral or hedonistic or economic. Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as the result of animal spirits - a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities."
Words matter to the real economy if they affect people's optimism for the future - or Keynes' "animal spirits". People's opinions of how other people will behave in the future determine whether they invest or spend money.
The BBC have been telling us for a long time that we are likely to enter recession(over a year, including the not-so-subliminal message that 'the downturn' arrow graphic associated for all their economic content gives) . So have the rest of the media. So have the Conservative Party.
It works (to the detriment of the economy) the other way too. What Alan Greenspan (of the US Federal Reserve) called 'irrational exuberance', and what sustained the bubble in asset prices we saw over the past few years. People in the City (or investing as a buy-to-let landlord in housing) believed that asset prices were over-valued, but the 'bigger fool' theory led them to believe that they would keep rising (and the media connived in that attitude).
So, I don't think your sermon has more than a portion of truth (of course actions matter too - but borrowing as % GDP is the same as it was in 1997), but then I don't sign up to your religion. Especially not as its central tenet - "The market knows best, regulation should be ultra-low" appears to have been exploded by recent events. It just feels as dated now as micro-managing the economy felt in 1979.
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131. An EXCELLENT post!
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#125 sicilian
Come on.
The Conservative "strategy" on the economy is entirely based on the "truth" that Brown has made disasterous decisions that mean we will be hit a lot harder by global financial events than the rest of the world.
Are you saying that it would not be a bad thing for that "truth" if the UK does better than other countries?
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#131 egrid1
You are right that when the economic cycle was brought forward, commentators did see that as benefiting Labour in helping them meet their Golden Rule. I can understand the suspicion that it was for political matter
However, in the end it didn't matter. The Golden Rule would have been met (but only just) anyway, regardless of when the economic cycle was drawn
The IFS cover this at length in their 2008 Green Budget
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Rather than argue amongst ourselves why not just read this page from the BBC news site. It pretty much sums up the state we are in and nails Browns we are much better positioned lies. http://news.bbc.co.uk/1/hi/business/7727399.stm
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128. tykejohnno wrote:
The coverage from sky news on what George Osborne said,is a disgrace to inpartial broadcasting,all day they have been one sided reporting from sky news to put down osborne and praise they god brown,not even questioning if it's true what osborne said.This country is becoming a one party state media,come on you people out there ,COMPLAIN,the more complaints they get,the more they know were on to them.
---
Why would sky be impartial? There is no requirement for a broadcaster or media outlet to be impartial, unless it is state owned/ has a mandate to that effect (ie. the BBC) - sky is owned by Murdoch and is notoriously right wing, I can't say I've watched it lately so I can't deny they've been pro-Brown, but seems a bit odd
by the by the Sky news advert is hilarious, it shows Brown talking to them before the Beeb - seems slightly sarcastic..
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The worst thing about Brown trying to fix-up his application for a new credit card, isn't just the fact that it is more debt that will have to be repaid, it is that he is not borrowing to put things right he is borrowing so he can chase his losses.
Chasing losses is a downward spiral... the decent can only be arrested by a serious change of policy - either by brown, or by the governemnt that follows him.
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Good post from 131 - don't go away.
I still think Osborne is a loaf short of a picnic but I do rile at the suggestion that the opposition should be quiet in the current circumstances.
Perhaps we should have a one party state?
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#139 don
So Steling as fallen 26% against the dollar, so is no longer over-valued (see the Economist article I posted above).
How does this prove we're doing worse? It was reported this week (though quietly, as it's rather inconvenient for the Conservatives) that the Euro zone (and Germany) are officially in recession, having seen 2 quarters of decline. Not many signs we are 'doing worse' yet. Keep talking things down and embedding pessimism in consumers and businesses, and you may get your wish.
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Nick
It is about time you looked at what the public think, check out the polls and you will see that the vast majority of people agree with what Osborne is saying. The fact is most people can see we are in a mess with our currency and this Tax cut will put is an even bigger mess a couple of years down the line.
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140 Tarquin
An attempt at irony - yes?
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Post 135 Balhamu
Of course "sentiment" matters but what matters is sentiment based on "truth"!
Alan Greenspan may have through his words created the illusion of an economic paradise as you have suggested............and in the same way Crash Gordon did the same in the country by going on and on and on about abolishing boom and bust thus creating a false sense of security.
So my assertion is that not only did Brown follow the wrong policies but he also promoted them in an arrogant Stalinist manner giving everyone the impression he knew what he was doing.
It really was a classic con-trick of immense proportions which the electorate has now finally seen through......watch the opinion polls turn nasty for Brown over the next few months
Osbourne is only telling the truth about the economy and it's about time tghe Conservatives stopped cow-towing to Brown and started ripping the guy apart politically. Cameron's anger at PMQ's this week needs to be shown over and over again.
We need an angry debate in this country about what has gone wrong and who is to blame because within 600 days we'll all have to decide what comes next.
So I say the the Opposition..............speak out for all of us who have lost our jobs and businesses because of Brown's proligifacy.
There's nothing left in the cupbaord mate for a rainy day...........
It's time to live within our means ....again!
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That's another seriously great post. Man, you're giving me an inferiority complex.
People follow leaders and, as you suggest, perception shapes reality. This is why politicians, managers, and other people who want to influence try to emulate "authority" and "popularity" - the big imposing building, "everyone's doing it", etcetera. But, is it reality?
I remember thinking that Greenspan was selling the sizzle not the sausage, and people who like to use examples of American tax and economic success as stepping stones for their own agenda forget two things: American tax is lower but they pay for the extras privately. Plus, the EU economy is fitter and paid for growth the American's boasted about. According to people who know more about this that I do, EU fundamentals are better and the quality of life, or bang for buck, is higher.
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The collapse of sterling has already started; it started a few weeks ago when the international money markets saw that our chancellor didn't give a hoot about our level of government or private debt.
Osborne's point was that it's fine to help boost growth by tax cuts or even by public spending, but that to do so you need to cut public spending somewhere along the line where it doesn't interfere with front-line services and where it doesn't adversely effect jobs too much.
Brown's ideology means that he will never cut public spending in any areas and any kind of reform is out of the question for him too, and it's that twisted ideology which has made the money markets nervous.
When you're about to go bankrupt, you don't borrow more money, you rejig your finances instead by first admitting that your original approach must have been wrong (by definition if you're going bankrupt then you must have been doing something wrong), and then by changing your approach to fit a situation which won't leave you so exposed again in the future, and that's what Brown doesn't understand and that's why nobody in the market is willing to buy/use pounds.
It's very simple; Brown is still carrying on with irresponsible debt levels (private and public) and has learnt nothing about what caused this mess in the first place. This is what Osborne's trying to get at, and this is why sterling is now worthless.
The Americans have at least admitted that they've done things wrong and are learning by their mistakes, whereas we're just compounding our mistakes because our leader won't admit that he ever did anything wrong.
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Just how desperate is George Osborne? Shouting that the pound is due to collapse, at a time when it is falling rapidly, is much the same as rushing around a crowded cinema yelling fire. His supporters on the right love it, as most of the comments on this blog show. He may even be right in his analysis, though the evidence of is that UK economy is still relatively strong even if its financial industry is in meltdown, but in the context of political accountability his actions are even so totally irresponsible. We all know the pound is collapsing, so there is no need for his yelling this at the top of his voice, and it merely demonstrates that he has no solution to this. Indeed, he is too obviously subjugating the national interest, which currently is for stability, to the needs of the Tories, who have no viable policies to address the recession and have even lost credibility with their own supporters, and in particular to his own needs, to rescue a career which is rapidly going down the pan. I suspect he may have just pulled the lever to totally flush himself away. I certainly hope so, for any putative chancellor who rushes around crying ‘we’re doomed’ does not deserve our support.
In fact, rather than rubbing his hands with glee, Cameron must hope the recession ends soon (which it almost certainly won’t) so that Brown can once more be put on the back foot; on the many other subjects where he is out of his depth . In the meantime Cameron faces his biggest decision yet. Either he must get rid of his irresponsible, ineffective and panicky shadow chancellor, who now regularly shows disastrously poor judgement, or against all the odds of just a few weeks ago face losing the next election.
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At least someone is being honest about the situation we are in.
Brown is doing what Labour do best, blame everyone else for the problems they have caused. And they are trying to do what they always do by throwing money at a problem instead of doing the difficult but sensible thing.
Nick, I am glad that this is a more politically neutral report, I agree with some of the other comments about how the media is much more supportive of Labour. Unfortunately with a UN elected Prime Minister, NO referendum on Europe and bias reporting it's starting to sound more like dictatorship rather than a democracy.
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It was quite deliberately stated, and then explained for public consumption. Sterling is the variable (in an already confusing equation) which the general public has been ignoring.
Flash complained today that other countries were only thinking in terms of their own interests and that this would have to change. Code for 'Oh my God, this lot ain't paying a blind bit of notice".
Hence Sterling is still a 'sell'. If you're holidaying in Europe next year, change it all now. We're on the one-for-one devalued express. Mervyn's printer will be churning it out like a home-made sausage machine in the new Year, buying Flash's gilt-edged junk-bonds.
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131:
Good post!!
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Mr. Osborne's comments will not affect Sterlings predicament. The actions of the government and its repeated liquidity injections already caused the Pound to collapse. Smart money obviously smellt trouble ahead.
The PMs solution to the crisis is proposing more irresponsible policies. This means more taxes and more inflation down the road.
He intends to create more wealth out of thin air or deficit spending. The Sterlings health will only be made worse with government actions and their intefering with free markets. Unfortunately, with all the obligations the government has and the bailouts I see they're determined to print their way out of trouble, which will of course fail. Mr. Osborne is doing what a Shaddow Chancellor should do...
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Nick
Interesing that in your report from the g20 you indicate that britian already has
'high borrowing'
Brown has said precisely the opposite - are you calling him a liar?
Can we look forward to you asking this to his face?
ps...
Shame the BBC head lines are 'osborne under fire for...' rather than 'britain heading for...' -- you guys at the BBC are so obseesed with the 'story about the story', you are failing to report what 'the story' actually is...
pps...
Whats mandleson upto -- any progress on getting answers regarding his contacts with oleg (and who knows who else?!?!) -- he doesn't have something on you too does he?
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It's really amusing to hear people beating up Brown et al for being stupid, economically illiterate, evil, etc. and then proposing absolutely insane economic policies (like 20% interest rates in the depths of a recession) as if they were gospel truth.
I think that Brown did OK as Chancellor in favourable economic circumstances (that presumably makes me a biased BBC NuLieBore commie for most people here). I think we're suffering more than we would have had we been in the Euro, which would have reduced the up-down-up-down on exchange rates for exporters and given our banking system (which because of the City is big compared to our GDP) a bit more stability.
But we didn't and here we are, sitting with the scones and jam, wrapped in the Union Jack and enjoying a good, honest BRITISH currency crisis (none of your international reserve currency muck, thank you very much).
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143. I thought these comments were rather damming, obviously your blinkers fail to allow you to do likewise.
'Worst recession'
Sterling's problems are linked to the wider economic picture.
The UK is expected to have the worst recession of all the G7 rich nations and this means investors think UK assets will perform poorly.
"Like everywhere, the UK economy is slowing down," says Daragh Maher, senior currency strategist at French investment firm Calyon.
Sterling has been like an elastic band that had been stretched too far and when it gave, it was vicious
Daragh Maher, Calyon
"But the perception is that we have over-borrowed more than other countries, so the payback will be greater."
Falling interest rates put further pressure on sterling.
Last week, the Bank of England delivered a shock one-and-a-half percentage point cut in UK interest rates to 3%, the lowest level since 1955.
Economists expect rates to fall further.
It means that investors get a lower yield on pound deposits and sterling-denominated debt, making them less attractive.
This could pose a problem for the government, as it is expected to issue debt to pay for the banking bail-out.
Falling fast
It is unusual for a currency to fall so far, so fast.
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145 Fredalo
I don't know anymore
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In July 2008, the Economist magazine (not noted for its Labour-friendly views) was suggesting that the Pound was 25% over-valued.
Since then, the Pound has fallen in value by approximately 25%. So is no longer over-valued, and about the right value.
Where's the problem? Over-valued Sterling is good for consumers - imports and foreign holidays are cheaper. It is bad for businesses- exports and domestic holidays are more expensive.
Trying to draw similarities with previous "Sterling Crises" is misleading.
In the past, the UK attempted to manage its exchange rates (by pegging the exchange rate to other currencies through Bretton Woods and then the ERM). Downward pressure on Sterling meant we had to pump money into the pockets of currency traders and have crippling high interest rates to convince them to hold our currency (see e.g. 1992).
Having a flexible exchange rate means this is not the case. We let the market decide the exchange rate and do not intevene. It's not a crisis! It remains to be seen if Sterling depreciates further against other currencies, in which case Government policy of not caring about the value of Sterling may have to alter.
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For those asking about exports, ie "we don't export anything anymore so what does it matter", that's a reasonable question; but the answer is that it's not just manufacturing that gets exported, it's services too.
For example, I work in the i.t. industry and we have clients from the uk, mainland europe, asia, and north america.
Previously americans were a bit reticent because the pound was relatively high, but now they're falling over backwards to find decent uk i.t. companies because their services are now so cheap for them.
So for us it's actually good news that the pound is so cheap because we're effectively exporters, and for our uk clients it makes no difference because they pay in pounds anyway.
From my side it's very good for us.
This illustrates the weird situation whereby some aspects of economic collapse actually help some people financially.
It's very noticeable how, when you deal with different countries in your business, you get a feel for how things are going in each country.
From what I can work out from our clients'/customers' approaches at the moment, the uk is pretty much dead, the usa is actually doing ok but a bit worried, canada and australia don't seem to have noticed anything going wrong and are doing fine, mainland western europe is just as stagnant as it ever was. At least that's the "feel" that I get at the moment.
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Who said this in 1992 as Shadow C of E?
Our case is still that the weak currency which arises from a weak economy can be dealt with only by measures taken here in Britain to deal with the fundamental weakness of that economy.
http://hansard.millbanksystems.com/commons/1992/sep/24/economic-policy#S6CV0212P0-00590
Stop putting Gordon's lies out!
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Whether Mr. Osborne is right or not, he is practicing very bad politics. Spreading panicky statements like these can have disastrous consequences, and undermining the authority of his leader is, well, I have no words for it! Politicians are supposed to be responsible adults who can address each other in public in a dignified, constructive way. If Mr. Osborne wants to be a maverick, that's fine but not while holding such a high office. And let's not forget that this gaffe comes in the wake of the ridiculous saga of the Greek yacht. I am afraid Mr. Osborne is proving himself to be wholly unsuitable to hold such a high position.
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There may have been issues with Stirling but, like in the battlefield, you don't need someone start to panic and pull the whole show down. It just distracts people and upsets them for no good whatsoever. If Osborne had mouthed off like this in a real war someone would've shot him.
I know it's all grandstanding and show but when the US President makes on of those occasionally important speeches, everyone stands should to shoulder with them. I'm naturally sceptical and refuse to be suckered but that's something about the Americans I do admire.
Some things require a clear head and people to put their churning stomachs aside and focus on what needs to be done. This can take a measure of effort and self-sacrifice, and looking beyond mere short-term gain to the longer term. It requires men and women of calibre to do what is necessary not swagger and cry.
Pte. Thomas Cole: Why is it us? Why us?
Colour Sergeant Bourne: Because we're here, lad. Nobody else. Just us.
Zulu (1964)
Sometimes, it takes a measure of bravery and wisdom to do nothing, to say nothing, to be still.
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You say, "Politically, Team Brown believe the Tories have made a huge mistake and claim he (Osborne) is talking the economy down as the Prime Minister's trying to boost it."
But who is calling whom here?
It's all just a glorious confidence trick. After all that fiver in your pocket is just a piece of paper.
Is what Osborne has done any worse than the PM and the Governor of the Bank of England independently warning, days ago, that we are heading into recession - in advance of it actual occurring? Weren't their comments scaremongering too, bound to knock confidence and bound to drive the economy down faster than it was already going on its own? Isn't Osborne just reinforcing the serious point as to how it appears to be working out as a consequence? There were plenty of warnings from the international community long before any of this happened, and so-called Globalisation is just a wonderful cover-up. You can't be one of the five big economies in the world and a G8 member without taking some of the rap. Let's play fair.
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161.
Some interesting Gordon Brown quotes on the currency in Hansard about currency when he was shadow chancellour: § Mr. Brown The difference between the parties has become clear during the debate. The Chancellor cannot even tell us—nor could the Prime Minister—whether they support floating or managed exchange rates. Our policy is for managed exchange rates. What are the policies of the Government? What has happened to zero inflation? What has happened to the boast that Britain was a miracle country, envied by Germany? What has happened to the boast that we would get inflation in Britain below German levels and keep it there? What has happened to the boast mentioned by my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) this afternoon —that we would have a currency superior to that of Germany?http://hansard.millbanksystems.com/commons/1992/sep/24/economic-policy#S6CV0212P0-00590
A bit further down: All those monetary targets—the right hon. Gentleman is nodding his head. If he is targeting the exchange rate as a means of deciding interest rates, how does he assess it? Is he now shadowing the deutschmark again? How? If he says that he has an exchange rate target, he must explain what he is doing. That is another question that he will have to answer if the House is to be satisfied. Further down again: Our case is still that the weak currency which arises from a weak economy can be dealt with only by measures taken here in Britain to deal with the fundamental weakness of that economy. Fourthly, the Government have devalued the currency —something they said they would never do—and, even afterwards, interest rates are 9 per cent. It is a humiliation 95 made likely by the weakness of the currency which is itself the product of the weakness of the economy and that is the product of the weakness of this Government.http://hansard.millbanksystems.com/commons/1992/sep/24/economic-policy#S6CV0212P0-00590
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To all the deluded out there, do you really think there is going to be an election in 2010 ?
Just bear in mind that things are going to get a lot lot worse in 18 months time....
GB "...considering the current state of the UK economy (world events, nothing to do with me blah blah...) I hereby declare a State of Emergency...."
"...Now is not the time for elections, we must maintain solidarity..."
You find this disturbing ? Well so do I, but just remember we are still awaiting a referendum on the European Constitution........
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So it sounds as though CEH is recommending in post 163 that Darling should have been shot by his own side back in the summer when he started mouthing off about how serious the economic situation was?
Or is it only one political party that is not allowed to accurately describe the state we are in?
As for his comments that Americans standing shoulder to shoulder... as I pointed out earlier, their initial rescue plan was voted down by the Democrats. But then we already know that CEH lives in a fantasy world.
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If Robert 'market mover' Peston had said this it would be gospel.
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Hmmm..
From where I'm sitting, sterling has already collapsed. Isn't that what Brown wanted? Thus our exports (???) should be cheaper. Hang on while I try to remember what we export...
Actually, Osborne's job is to challenge the government's decisions. For Brown (who decimated pension funds and whose poor financial mangement has led us to the sorry pass we are in) to accuse the Opposition of lack of patriotism is at best a lame duck excuse.
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re: 165 Oldboy9
It's potentially possible, and it's in his ideological makeup to ban elections, but I think it's a risk which Brown wouldn't take because he'd be afraid of the backlash (he'd be physically turfed out of number 10 by a mob) - a more likely scenario is that Brown will announce absolutely eye-wateringly large tax cuts paid for 100% by borrowing, increase public spending massively paid for 100% by borrowing, tell the banks to lend as much as they can at really cheap interest rates, and then call an early election.
The electorate will see the cash in their pockets and the temporary calm before the storm, but they won't see the approaching storm, and Brown would be likely to win.
I don't like that idea/situation because it means that as a country we'd be bankrupted, but I think it's a distinct possibility. The pre-budget report will be interesting to watch on this front.
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The markets do not lie, why has the pound been in freefall the last 3 months? 10 years of Browns economic policies have come back to haunt him.
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"post 131"
A good analysis of last 2 years of Browns political career.
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Why don’t we stop complaining and start to debate some alternatives to solve the problems our leaders and greedy manipulators have put us in and quite obviously haven’t a clue as to how to rectify
For any of us who have been in the adult world for more than 27 years that’s three recessions I’ve done five now you soon learn that if interest rates go down the money leaves the economy too and the pound is devalued this may not be a bad thing as we can sell more product abroad and increase American tourists!
The thing That is the real problem is when our leaders think that if they say x it is x. The new labour lot had sunk into this delusion by 2000 examples no more boom and bust, education education education, free at the point of delivery, full employment etc all sadly to delude the electorate into thinking things are better than they are but ultimately fooling the creators of the words even more.
To believe one own propaganda is foolish.
Free markets mean ups and downs it is a see saw unless you ban the speculators the hedgers and the manipulators if you want a flat economy you can’t have growth then you won’t get bust, if you want boom you have to manage bust as well.
Problem is before 1990 you could offset one nations economy against another and have winners and losers. Today with instant global communication it is all for one and one for all. no winners no losers or all winners all losers it is time for a re -think problem is everything we do in life is adversarial not co operational and we need cooperation now on every front.
If you offer interest for money then if you take it away expect the money to go too.
Why do those who have gained power think because I say it is it is?
Why do people ignore a very basic rule of nature? Like for every action there is an equal and opposite reaction.
Will our elected leaders and even our none elected leaders please get real and do something worth while? Yes we can cure this whole mess with cooperation
Strangely and what seems to escape everyone, the cure is not by the big gestures in small areas like throwing billions at a handful of greedy out of control, megalomaniac, certifiable bankers but by making small fair and incisive gestures and moves to regain the confidence of the individuals in the street.
It is refinements, sophistication, complexities and red tape or pink string that has generated the mess we are all in it is simplicity, openness, common appeal and touch that will rectify it.
Yet I might as well whistle down the wind for all anyone will listen or join in
Why? Because everybody believes it need their very clever complex solution to fix a problem created by stupid greed and naivety all that will do is gum up the works even further this just needs some basic well thought trough simple cooperation.
Co operation is the willing agreement of all those who agree to the plan providing they make up 50 percent and the forcible compliance of those who don’t agree such as the banks.
There is of course the idea that we could have just one currency and one central bank for the entire world and one interest rate or would that make us all hunter gatherers?
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Nick,
while you and the PM are in Washington sorting out the Global Economic Climate I took the time to sit and watch BBC2 from 9pm for over three hours.
The programme basically listed the names of over 300 service personnel who have died in Iraq and Afghanistan since George Bush and Tony Blair made the decision to fight Global Terror, wars funded by our own former chancellor and now Prime Minister Gordon Brown.
Now then, what I want is for the three gentlemen to be filmed whilst they sit and watch the programme and listen to the testimony of the mothers of the dead. Because Gordon tells us that he cares about children and all the dead are the children of mothers, and Gordon tells us that he cares. He really cares.
The killing has to stop. End the killing, because the blood of all the dead is on the hands of the people who give the orders, on both sides of the conflict.
Yes we have lost many brave and honourable people, but so has the enemy, their dead have mothers, they have honour they care for their country, just as we do, there must be an end, now, whilst we have a new President in waiting, exactly what is the point.
Forget the economy, save lives, in DR Congo, in Dafur, in Zimbabwe, in all the countries where we are killing and maiming, because we are right aren't we, we have God on our side.
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Nick,
is there any way we can put a spell checker on your site, or be able to correct the spelling mistakes which invariably get made as we vent our anger.
A perfect example is that there is no 'U' in Osborne, whose real name by the way is Gideon and not George, and that there is no 'F' in Gordon Brown, who is a nose picking Aspidistra.
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@Oldboy - you are like the people in America who whinged for four years that Bush would also find a way of stealing an extra term or two or whatever.
Now proved wrong by events.
Claiming your opponents are the enemy of democracy is a sure-fire way to declare yourself one too.
Given the Conservatives now only have an average of an 8% lead I think it is high time they stopped acting as if they had already won the election and started trying to win it, otherwise Labour will be back sorting out their own mess. Osborne's comments about the pound were fair enough, (although I have a lot of money in euro savings from my Irish job anyway, so parity please if possible!!!) but his "scorched earth" comments betrayed a fundamental attitude of hubris which suggests to me that the Tories will continue to assume the election is won and therefore lose by default. They have even brought Oliver Letwin back now, who probably lost the last election for Michael Howard by trying to find elusive "waste" which never exists and is always generated by government.
Cameron seriously lacks judgement if Osborne was not bawled out for his comments on scorched earth. I don't expect much, but I don't want a fourth term of Labour, so personally if I were Lord Kalms I'd be calling for Cameron's resignation rather than Osborne's.
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165:
Gordon's going to cancel the next election and declare a state of emergency, is he? About three months ago paranoid Democrats were saying the same about George Bush.
Remember how that worked out?
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If I was George Osborne I would wait for the Government's much vaunted "Autumn Statement." In my opinion, and to coin a frequently used Government phrase, "that is the right thing to do."
According to Wikipedia:
"Autumn (also known as fall in North American English) is one of the four temperate seasons. Autumn marks the transition from summer into winter, usually in late September (northern hemisphere)"
Roll on the 24th November 2008, the beginning of the New Autumn.
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hack-round, I've said 99.9% of what you commented on ages ago, but you're wrong just to pounce on Labour. That's just ignoring what they've done right and other peoples mistakes. Plus, you can't step out of the world and pretend it's everyone else's fault. But, apart from that it was a good comment.
TAG, wassup? Did my quote from Zulu set you of again, or something? You do realise that leaping towards the gate and barking like a rabid dog is exactly the same habit pattern you're railing against. Chill out, dude. You'll end up having a nervous breakdown or set fire to yourself.
Bummer. I'm yapping about Zen again...
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can anyone answer this question.
If the Scottish people vote for independence in 2010 does that mean Gordon Brown can,t be our prime minister as Scotland will not be part of the union.
I hope its yes
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Nick,
must say that I personally quite like it when people catch up with my postings on your Blog. Was it not Mr Griffin who referred to the labour Scorched Earth policy some time ago.
Also, there is no point in accusing Gordon over 'no more boom and bust' what he did say was that there will never be a return to 'Tory boom and bust'. He didn't say that there would never be a labour 'boom and bust' he was just anticipating that labour would never lose control over the commons.
Now then whatever happened to cash for honours or loans to political parties, ummm!
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#175
I wonder exactly where is bin Laden!
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I've already explained why Osborne and Cameron are duds, and why Labour are likely to win the election, and why an economic renaissance is around the corner.
The Tory bubble ended up backfiring, and all the black propaganda the Tories focused on throwing at Labour has a nasty side-effect: you end up becoming the enemy you imagine if you don't watch your step.
Cameron's demanding attitude, dithering, flip-flopping, and Osborne's foot-in-mouth, Flash Harry behaviour, and policy on the hoof accusations are coming back to haunt them. We're so deep into "I told you so" territory it's not funny. And, yes, I did say so in this blog more than once.
Labour had issues. I'll agree to that but the Tories aren't fit for government. They don't have a policy clue or sense of empathy in spite of their grandstanding, policy blizzards, and big tent pretensions. The best thing they could do is shut up, stop digging a hole, and fix themselves, preferably, in opposition.
Some folks may laugh but I've found the teachings of the masters of Doaism, Buddhism, and strategy is right. It's battle tested across time and in many different places and situations. I learned the hard way so, perhaps, see the value more easily. Chucking out 6000 years worth of good advice seems a bit dumb.
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CEH
Chill out, chill out, I'll chill out when the one trick pony known as Gordon Brown the nose picking Aspidistra gets British soldiers doing what they signed up to do, that is to protect Queen and country, and not to go on wars of aggression in Iraq and commit war crimes and kill women and children, even if not directly but by training the Iraq soldiers and police to do it by proxy and for our soldiers to be banged up in the airport because they retreated there after being defeated in central Basra.
Just to remind you what set me off was the BBC2 programme which started at about 9 and listed the names of every one of the British forces personnel who died in Iraq and Afghanistan. Maybe the Beeb ought to do the same for the local Iraqies and Afghanistanies who have also died since the start of the war, there are not enough hours in the day for, what do you think CEH?
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balhamu would say this better than me but the Reagan-Thatcher outcome was everything that could be sold off was, and the cupboard was stripped bare by tax giveaways. The right wing generally run the public system down and make it near financially impossible to rebuild it. That's a scorched earth policy.
Clinton faced the same problem Blair did when they got into power, and it took until now just to bring things back up to scratch. Labour have already switched from rebuilding to improving quality of delivery. It's tight but about the right place in the curve to do it. The same issues of quality products and service face business so, I would argue, that's where the focus should be.
One man's scorched earth is another man's field ready for planting. I guess, it depends whether you're a gloom and doom merchant carrying a grudge, or looking forward and leaving the past where it belongs. If you want to cling to failure that's one choice. But, another choice is just to let go and allow success to spring from the ground of its own accord. It's a no-brainer for me.
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Nick
The Sub-Prime Minister is taking a huge gamble with the economy - that the bills for an unfunded borrowing binge don't fall due before the election.
However, the BBC is also taking a huge gamble with it's license fee - that pro-Labour reporting will be rewarded after a Labour election victory, since the BBC will certainly be punished for breaking the charter if the Conservatives win.
Be afraid ... be very afraid ..,. for your jobs, you Labour poodles!
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#82 palinni
it seems that Osborne has commited a far serious misjudgement. In mature democracies, sensible politicians never take the peoples' vote for granted. Osborne is suggesting that Brown is conducting a "scorched earth" policy because Labour cannot win the next election but the Tories will. This is an insult to the British public.
Nob. Would you rather he stfu?
The sorts like you who are the curse of the rest of us!
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#83. alexanderjbateman
Hear hear. It matters not anymore. Open his trap or close it. Who cares. Who actually listens to his rhetoric? Seriously. I go out of my way to see it for comedy. He can't say that same old line again can he!? I have gone from an individaul who gives the benefit of the doubt to others who might be unaware of the reality, but stuff like this!? I think you know what i'm saying....Some don't want to be told.
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peterskitchen. Good points made. As hard hitting as they may be, it cuts aside all the 5p here and cut 10% there.
#89. brightfastflipper wrote:
@30 Retro Gamer
You are right. In G20 meeting, no one has taken much notice of Gordon Brown.
The link can be easily found in Washinton's Post.
LOL. Where's Carlin when you need him!
About your post brightfast . Brown won't have to admit anything and he knows it. Sadly the majority won't see this blog and WILL accept what they see on the beeb.
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Brown offering twisted logic for his mishandling of the economy is typical. He has not reached firm concensus in Washington for cut taxes globally, only a draft plan, which may or may not be implemented.It has been a 'talking shop' but makes him look good for domestic consumption.
He is trying to blame Osborne for a threat to our currency. Again, a smoke screen, to distract from his own abysmal failings. The Pound has been in serious decline for the past 4 months and thus oil prices will rise. Brown is trying to head this unpopular consequence 'off at the pass' by blaming Osborne. The electorate can see Brown's duplicity.
Brown has virtually emptied the Treasury and now needs to borrow to fund this dodgy tax cut. Britain is in the worst possible condition to weather this financial tsunami.
Osborne has shown financial rectitude ahead of Brown's false beneficence. It is Osborn's job to challange the Government and he is exposing Brown's fiscal mistakes. Why else are Brown and Darling trying to undermine him; because he speaks the truth.
Convention, or no convention, our currency is weak due to massive Government overspending. To borrow more will exacerbate the situation. They can't blame Osborne for their utter failures.
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How can Osborne's comments damage a currency that is already in freefall. The exchange rate is the only figure that Brown can't fiddle, it is set by the market and represents the world's view on the state of our economy, it is to use an analogy the "UK share price" and it is going down because everyone (other than Brown) can see the mess we are in. It has nothing to do with being in or out of the Euro, Ireland attracts massive inward investment because of it's low tax regime not because it is in the Euro. 20-30 years ago the resultant increase in exports would have improved our balance of payments deficit but as we don't have a large manufacturing base then this won't happen.
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George Osbourne was right to speak out....you only have to have a mild interest in the BBC business site to realise that the pound is taking a pounding.......The grand summit meeting this weekend is just more hot wind from 'dead men walking' Bush and Brown-nose.......the British public know the finances of the country are in crisis and 20 muppets sitting round a table at taxpayers expense ain't going to help!!
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"Kill the messenger". This slogan could have been invented for Brown's Nu Labour, for everything from the tragedy of poor Baby P right down to the latest financial revelations. Alas, Brown does not have to fret, if the coming recession, or even current recession produces even more unemployed, Brown is home and dry. More people on benefits, an even greater captive audience, many too afraid to rock the boat and lose the little they have. The only hope is that the electorate will be brave, stand up and refuse to be bullied anymore by Nu Labour.
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Whereas Brown is accusing Osborne of playing politics with Sterling, the opposite is the truth.
Osborne is simply stating the obvious. He is being truthfull which is always a problem in politics.
The UK Sterling sector has relied on financial services as its driver for over 30 years. That sector is now in freefall globally.
We have little or no manufacturing; agriculture has been bound by red tape and stifled;technology transfer is too long term for short term financiers and we have borrowed over 60% of our worth to get out of a mess created by financial sector greed.
60% of GDP is from government funds directly or indirectly and that will get higher as unemployment soars. My guess 4 to 5 million in 2010.
There is no point in investing in Sterling when you look at that scenario.
Like Wilson, will Brown come out with a crass phrase like "devaluation will not make any difference to the pound in your pocket" next year. (I am showing my age)
My bet is 85 pence per Euro by March.
We may as well get into the Euro or better still the Dollar?
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It's a bit rich to accuse Osbourne of running down the pound, it's clearly Mervyn King's policy to do so.
Compare the clumsy rhetoric of King (and Darling) compared to European Central Bank President Jean-Claude Trichet, I wish someone would. I've never seen such an important event such as the state of sterling so under-reported since sterling started to fall against the Euro in August last year.
In days gone by you'd be stood outside of number 11 reporting it as the main news story, for some reason it's been underplayed.
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#5 your jumping on every thread in true troll style to moan about Mandy is starting to feel just a little homophobic.
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I have it on good authority that several Labour Party activists are watching this thread very closely.
Some have even posted but they are less than conspicuous so you can spot them a mile away.
I wonder why they are so interested?
Could it be Georgie boy has hit the nail on the head???
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George Osbourne is saying it as it is and as he should as a minister of the opposition. Of course the government would cry "FOUL". We should also watch for the ambitious Ken Clark and his cronies to look for the job by any means. He has in his lifetime helped to bring the party to its knees with his support (along with those creeps Heseltine, Patton and the insufferable welsh apology for a heavy weight politician Howe) for replacing a leader without having a creditable alternative in place. He has since been rejected by the conservative party more times than one can count, yet he and his friends believe in his destiny within the party. He along with the others named should head off into the sunset. Just like those lovable but "OLD" cowboys.
Signed "A Welshman"
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I credit the unemployed with more intelligence than to vote for Gordon Brown because they will be afraid of losing their benefits. The loss of their long term jobs should concentrate their minds more fully. If I'm wrong then I bow to your cynicism. Just read this concern but can't find who posted it for the moment. It's a worrying thought but I don't think it will arise.
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Nick,
get back quickly. Saw the Douglas Alexander interview on the Andrew Marr show this Sunday morning and he was asked about a spring general election.
We are getting on with the job, that is what the British people expect etc...
So, the MPs are taking an extended Christmas holiday, surely that shows how much Brown wants parliament and cares for the electorate.
Goes back to my earlier point about WWI, soon after the Greatest War starts the MPs go on holiday, they did on August 10th 1914, because they couldn't miss the Grouse Shooting season. So, a spring election is what we will get, before the proverbial really hits the fan.
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I think there is a very good reason to play Osborne as the story not his message.
Because the message is absolutely spot-on. Only Labour can argue the 'don't talk the economy down.'
What the hell was Darling doing last summer?
http://news.bbc.co.uk/1/hi/business/7589739.stm
"The chancellor has insisted it is his duty to be straight with the public, after telling a newspaper the UK faces its worst economic crisis in 60 years."
And.. get this...
"This coming 12 months will be the most difficult 12 months the Labour party has had in a generation, quite frankly."
The Labour Party? Thanks Darling, what about the 250,000 unemployed already?
Party before people, doesn't that sum up the Labour Party.
Last week at PMQ demonstrated that all too well.
No-one is arguing here that more borrowing puts Sterling under pressure. We know that all too well from history.
No, play Osborne, because Brown got everything he wanted from G20; didn't he?
Actually no he didn't, there is not a single mention of international tax-cuts or fiscal stimulus in their statement.
Declaration of World Leaders at G20.
http://www.whitehouse.gov/news/releases/2008/11/20081115-1.html
It is a declaration to reform financial regulatory practices (particularly risk-management and debt rating) and to improve liquidity.
In fact, to look at BASEL2 and strengthen it in places.
There is nothing in it about a combination of monetary and fiscal policy to 'go for growth'.
If Nick had bothered to report Tory economic policy rather than the man some time ago. He would have noticed that the Tories were arguing that aspects of BASEL2 were not working and they should be suspended as they were distorting the market.
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I object to the way the BBC is covering this Labour spin.
The pound first weakened when Darling (the Labour Chancellor in case the BBC have forgotten this too) stated that Britain was facing the worst economic crisis for 60 years some months ago.
So it is extremely rich that the BBC are making a big thing of the Labour spin against Osbourne.
Sorry for shouting:
BBC YOU DO NOT NEED TO FOLLOW THE NEWS AGENDA FROM DOWNING STREET.
It is possible to report on the stories that are actually important not the ones no 10 tell you are important. Labour may threaten your privileged access to information or even spin about the licence fee but in the end they need the BBC to get their message across and may be journalists should remember why they got in to the profession and accept that occasionally means personal sacrifice.
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Interesting to read in today's papers that there is tension between Gordo and the Treasury as to how much to give away.
No wonder they are so keen to blame Osborne, a smoke screen for their own divisions.
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I do not understand why Osbourne wants to talk the pound down. People will lose their jobs because of the loss of trade.
Osbourne needs to engage brain before speaking.
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Just a short note for denzil 69@ 111 re; Pounds versus Euros, It's only money... a tool to buy food etc. Does it really matter what we call it?
And for all those who think we don't manufacture and export anymore, I suggest you get out and about a bit to discover how many British products are and advertised and sold abroad.
However, our manufacturing base has declined in the past 50 years and this inevitably puts us in a weaker position in global economic downturns. I never subscribed to the view that services can altogether replace manufacturing in a healthy economy.
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The Sterling crisis is well under way,due to the New Labour policy of economic management.
Whilst i have no political leaning (i loath them all).
I am tired of Browns pathetic snipes at the Conservatives,Georges point is 100% valid.
Above all the other misery Messrs Brown Darling & Mandleson are party too,they and they alone have caused the £ to devalue.
Interest rates at current levels are no good to anybody least of all the banks,Money must have a cost then 'people' might value IT.
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Osbourne is as irresponsible as Robert Peston and the BBC!
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Nick,
may I suggest that you follow the Andrew Marr method when you next ask a question of Gordon Brown.
Gideon Osborne was hardly able to get a word in before the next question, or supplemantary came in, to paraphrase so you will be against the tax cuts will you?
It is this type of questioning where the interviewer actually makes their own comment and then turns it into a question, do you agree with me that if the pound falls on Monday that you are going to be held to be resopnsible and that you have broken the convention on politicians all pulling together. However, it was interesting that Marr had John Reid on before the Osborne interview and that Reid went along with this is the time to pull together etc.
What is interesting is that the Andrew Marr interview with Osborne was actually pre-recorded. So, Marr had known what was said by Osborne, and I would speculate that Reid also knew what Osborne had said, so Reid comes over as being all concilliatory, and we really must all pull together. In fact quite the conservative if you consider that it is all about keeping labour in government.
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RE POST 201
I had 24 posts removed last week as i do not WORSHIP OUR GOVERNMENT.
STATE CENSORSHIP THE NEW BURMA???
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It is quite correct for the Shadow Chancellor to point out the dangers in Labour’s reckless gamble with the public finances. Gordon Brown loves to imply that anyone who does not agree with his policies is either irresponsible or misinformed. Yet Gordon Brown’s public utterances are a mass of internal contradictions which are unfortunately never considered by the BBC.
Here is an example of Gordon Brown saying the right thing:
“When we are tested by exchange rate pressures, oil price movements and the American slow-down, we strengthen, not relax, monetary and fiscal disciplines … In future, any party that is serious about political office will need not only to have an inflation target and fiscal rules, but to set and follow clear, tough, monetary and fiscal objectives and disciplines if it is to convince the people that it is doing everything to avoid the old, familiar boom and boost.”
(Gordon Brown, House of Commons 25 June 2001).
Please measure Gordon’s current (absence of) economic policy against this.
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Classic Brown talking about G20.
"These are real policies affecting real people"
Yes Mr Brown - you do like your analysis so - but WTF were the actual policies...
Don't tell us what you think about the policies just tell us what they are!!!
Browns speeches and announcements all now seem to be entirely content free. Much like mandlesons accountability - btw: any update on that Nick?
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We will have an election in the Spring next year (before the full impact of the Depression hits. It will be pulled together with a referendum on joining the EMS.
In this new world order, we need to understand GREAT Britain disappeared quite soon after WW11 and we are in the second division in the world hierarchy and only protected in that position by support from Washington.
The diminishing calibre of our politicians is a direct result of the diminishing leadership of Britain in the World. A top team attracts the top managers. George or Alistair, David or George are just bit players that would find it hard to hear themselves heard in a council chamber
We are at the point where Britains influence in world affairs has no impact and no creditability and with lack of great leadership our ability to transform Europe and lead within Europe disappears as well
Where are our future great leaders ? Are we to become a faceless annexe of Europe or a leader of Europe?
Alas, Sterling maybe showing us the way
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Nick,
a very good point made today because with one hand Darling tells us that Osborne is talking down the pound, ok I can see where he is coming from, this is the man who told us that we were 'pissed off' with labour just to remind readers.
So, at the same time all the commentators are telling us that nobody saw the bank crash coming. Well I would speculate that they did in fact see it all coming, as I have said I did, and I am not an academic so nobody pays any attention to me. But my point is that the people in power who did see it coming were probably told not to say anything because they culd be accused of bring ing the party to an end.
So, when do we tell the truth as we see it without being accused of talking down the country. When do soldiers tell us how awful the situation is in Afghanistan, when do the generals tell us that we cannot win, one did and he loses out on promotion. Meanwhile the one who went along with the invasion of Iraq now writes books and works for a company supplying mercenaries, sorry private contractors to the country our soldiers died for.
Whistleblowers are persecuted and silenced by court injunctions, and the press is silenced by judges who seem to favour the moneyed elite. We learnt a lot about the press and the BBC when Harry went to Afghanistan, shame on you, I no longer trust the media, as if I ever did.
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So, according to Nu Labour/BBC, the present economic crisis (ongoing) represents a 'Failure of Thatcherism' even though she's been out of office for almost 20 years and the sterling crisis (ongoing) is all George Osborne's fault.
I see.
Osborne and the Conservatives only fault in all this was that they weren't banging on more five years ago about the insanity of letting property prices rip and artificially rigging interest rates. Sure, they'd have had the Nu-Labour drones giving it their 'talking down the economy' moonshine but now, today, they'd be able to sit back and point to their record of warning about the impending Labour recession.
To be fair to the Tories and Michael Howard in particular I do remember him giving a post-budget speech about the borrow and squander chancellor so the Tories need to dig that up on Hansard and tout it more widely.
If I'm honest the thing that worries me the most is that both Tory and Labour politicians were working from the viewpoint that the voters didn't want to hear the truth. This suited Labour because they could peddle their moonshine and bask in the glow of all that borrowed cash. And it didn't suit the Tories to highlight the economic insanity at large in the land because they perceived (rightly or wrongly) that the electorate wouldn't thank them for pointing out the folly of their own irrational exuberance.
I can see how it wouldn't have garnered a lot of floating voters if the Tories had pointed out that no, borrowing six times your salary, remortgaging your house and squandering the proceeds wasn't the epitome of financial brilliance. And they simply couldn't land a glove on Brown with his ministry for misinformation and bogus numbers flooding the BBC with rigged statistics and always a handy 25- year-old comparitor to deflect criticism.
You know the sort...Yeah, we might have doubled national debt but so did Thatcher....Borrow more..
Yeah, unemployment is two million but it was three million under Thatcher...Borrow more...
Which is why we are where we are. The country with the highest levels of personal debt in the known universe. Massive structural deficits of 3% of GDP going into a recession. Borrowing predicted to be 110bn (7%) for the year 2008/09 and that's with only three quarters of contraction in that year. Imagine what it will look like in 2009/2010. And that's without any additional 'fiscal stimulus'. In 2009/201 it'll be closer to 150bn without any additional 'stimulus'.
I must admit I'm torn. Part of me wants Gordon Brown out this second.
But the other part of me wants the voters and Brown's/NuLabour's apologists to have no 'bad' 25-year-old numbers to go back to ever again. I want Nu Labour to be tied to the worst numbers in history which are now in the pipeline. The numbers they are uniquely responsible for. The numbers that, thanks to their naked incompetence, will be coming along for the next two years - minimum. It's a nailed on certainty.
If Labour call a spring election there is still time to tie a whole new low of unemployment and deficit figures to the Tory party. I wonder is Gordon prepared to take one for the team or will he persevere in his insane delusion that the UK economy will all come 'good' in mid 2010.
If I were Gordon Brown I'd call an election tomorrow. Sure, I'd lose, but not by as much as I'll lose in 2010. Plus there's no technical recession yet so in five years time I'd blame the Tories for the recession. Or my faithful Labour figure-riggers would. Twenty years from now Labour figure-riggers could quote the coming dire numbers - albeit nailed on by a decade of Labour incompetence - and blame them on the Tories. After all, that's what they do today.
And a forgetful, younger electorate, might actually believe them.
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A 25% drop in sterling had already occurred before Osborne's comments. He's right to warn of the likelihood of more should Brown have his way.
As for Brown, he's just trying to string things out long enough for a quick Spring 2009 general election with Mandelson pulling the strings.
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Osbourne may not be my political choice but for Brown to claim that he is acting irresponsibly is the height of hypocrisy.
I am utterly sick and tired of Brown and Darling telling us they are doing the "right" things. We all need to remember and to be constantly reminded that it was this Govt that have got us into this confounded mess in the first place.
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Nick -- time for a new analysis & blog.
Perhaps a summary of the performance of the Pound this year -- flagged with major statements from Brown and Darling. Then we would all see that you are playing to #10's spin rather than fact. Ken Clarke now supports George Osborne's stance but I don't see that appearing as a headline.
Read very carefully :
#200, 201, 202, 205, 206, 209.
All very clear and to the point.
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Nick,
I think that no questions should be asked of any of the labour politicians. You see they are getting on with the job, and therefore any time spent in the studios is a distraction from that most important job. As for having to go the commons, then surely they don't have time for that. They are working 24/7 to save the masses.
So, I am afraid you must stop questioning because if they told us the truth then we would be afraid, but if you don't ask questions then they don't have to be economical with the truth. For example, fancy asking a really stupid question of Gordon Brown, do you regret funding the war in Iraq when so many have died, including the sons and daughters of so many mothers. Or maybe when exactly will we get the result of the Bloody Sunday inquiry, before or after the next election, which will be held in the spring! As for an inquiry into the Iraq war, and what our soldiers did, or were ordered to do.
The PM says that the troops will get all the equipment they need. Well when will they get that, yes just as they are completing the withdrawal and no doubt all the equipment will be handed over the Iraq/Afghans because we won't need it will we! What a waste of lives.
When will Gordon Brown sit down with all the relatives of the dead, who died in foreign countries for our safety, and our national security, and explain what the point was. The BBC are to be congratulated for their very long and moving programme on listing all the dead in Afghanistan and Iraq. What did happen to the contractors who were captured in Iraq, I wonder where they are now?
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Because of Osbornes lack of understanding/policies all he can do is state the bleeding obvious.
Its time Osborne and Cameron stepped down as they are clearly out of their depth and let some one else take over the Tory party or suffer another defeat at the election.
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To pick the moment Brown is meeting with the G20 to consider a global approach to financial stimulus to make this comment shows how inexperienced and Naieve Osborne is. His prediction of sterling falling if the UK attempts to stimulate its economy is null and void if as planned countries co-ordinate activity. His chums that speculate on currencies will have nowhere to go! This demonstrates that Tories have learned nothing from the last two recessions that they presided over. Again they would sit back do nothing and ignore the misery caused by rising unemployment.
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Quote from Abraham Lincoln
"You may fool all the people some of the time, you can even fool some of the people all of the time, but you cannot fool all of the people all the time."
Brown and Darling clearly believe that they can fool all of the people all the time.
Do they really think we have not noticed that the pound has lost 25% of it's value in the last few months?
Do they really think they can blame George Osbourne for warning that further massive borrowing by Labour will cause even more investors to bail out of the pound?
Gordon is swanning around the world trying to look statesmanlike and trying to convince us that all is under control.
While we, the ordinary poor suckers, are facing financial meltdown.
Our shares are worthless, our pensions plundered by Gordon, prices are rising along with inflation, our jobs are the most insecure they have been for decades and our only real asset, our homes are falling in value like a stone.
Does he really think that pontificating at useless conferences in America, where no real agreement on tax cuts has been reached, will fool us into believing he is doing a good job?
Gordon is the updated version of the Emperors New Clothes; no-one dare tell him that he is a complete failure.
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As the Bank Rate has been reduced by 37.5% I'm not surprised that the pound's value has fallen. It's just the working of "the Market" as investors seek more return on their capital.
The fall is not helped by politicians talking of "a run on the pound" and commentators predicting that Britain will suffer a deeper recession than "any other country".
Assuming that anyine can afford to take holidays, it will make Britain a cheaper country to visit and our exports cheaper.
However, don't expect lower prices for fuel and energy!
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Does anyone else get the feeling that the Tory press co-ordinators are hugely disorganised and slow in reacting?
As soon as the Mervyn King statement was released they should have been flooding the airwaves with their interpretation of what he actually meant and they should be doing the same now before the full details of the G20 summit are released.
The fact is that by remaining reticent they have given Gordon Brown the opportunity to claim he has wide scale support when he clearly hasn't. The Mervyn King statement was firm in emphasising that a fiscal stimulus is only appropriate if there is an explicit plan to reverse it. At the moment Brown is simply saying that we can borrow as much as we need for as long as we need.
Similarly from what has been reported so far of the G20 summit other leaders have used the same cautious language when talking about a fiscal stimulus, saying that they are only appropriate if they can be sustainably funded.
I also noticed that the only poll so far to have asked about the nature of a fiscal stimulus recorded that 75% of people agreed that tax cuts should be funded through less government spending and not through borrowing, only 17% disagreed. Interesting.
Note: On the question of Osborne's comments on the pound I really don't know what all the controversy is about (well actually I do, it's the usual Labour briefings being swallowed verbatim by most of the media). The pound has lost over 1/4 of its value in the last few weeks alone. If this continues it is as a result of economic fundamentals not because of what George Osborne, who isn't even in governemnt, has said.
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184 Charles_E_Hardwidge
Let's not forget that Labour continued to sell off national assets once it got into office.
You will remember the QinetiQ sell off where the government were severely criticised by the National Audit Office for "short changing" the taxpayers and that the buying companies made a 20,000% return on their investment.
Unfortunately for us, the Labour party is "institutionally inept with finance" both business and economic.
Institutionally inept
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I don't think he actually was talking it down, he was suggesting there was a danger. In fact he is wrong, there already has been a run on the pound in as much as it has dropped by 25% in the last 6 months.
Gordon is going to leave this country on its knees - that is a fact. The worse economic disaster for several generations and he has spent everything, and is spending more to try to buy support - plus starting large primary school investments as well.
It is time the Tories really start to crank up the heat on the government. This is not fair - Labour's favourite word - to the people of this country, and to the generations to come who will be paying for Broon's ineptitude.
I cannot see how anybody can even suggest they will be voting Labour at the next General Election, and if Labour get back in there will be a mass exodus of talent to other countries, who are better placed to weather the depression - and I will be one of them!
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Osborne may be right but he seems to get the presentation wrong. Sterling has slumped, everybody knows it. But currencies are moving around, and not just because of the inherent value of the currency, some of it is due to financial sector flux. It is a simple choice between looking after the overseas investor or looking after the UK voter, the majority of who simply do not want high interest rates at the moment. I cannot imagine anybody wanting Lamont style interest rates again, and high interest rates are the usual prop for a weak currency. The big weakness in Osbornes arguement is that unless there is a run on sterling nobody cares less, and if it is a choice of helping the overseas investor or helping the UK voter it is obvious which the UK voter is going to side with. A political strategy based on a financial policy which can be seen to seek to help a nebulous foreign investor immediately and which can only possibly help the UK voter under some circumstances is a very weak one. The Conservatives have got to up their game considerably if they want to make a viable alternative to Brown. It is about connecting with the voter and Osborne just has not done it to date.
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Brown's economic leadership of the world revealed as a timeline compared to other countries actions and a critique of Nick's journalsim:
All hail the global leader
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In my opinion it would be wrong if Osborne were to lose his job for simply "telling it how it is".
He is right to speak out and challenge the government on their current plan to spend (our money) to help alleviate a more severe recession! - let's be clear - we are already in recession now.
Previous governments have also failed to use this strategy to stimulate growth during recession, so why is this one going to succeed?
No, the Tories have a very good point - made very eloquently by John Major in his article last week in the Times I thought - and they must stick to it!
It is the job of oppositions to properly challenge those in power over their actions -the government are behaving desperately if they seriously believe that a "run" on the pound is the fault of George Osborne!
If anything, what this highlights is the weakness in our economy and economic mismanagement by the current occupants and also the Bank of England.
The Bank should have cut interest rates MUCH SOONER - with sterling now falling at an alarming rate, that will be more difficult! That's why they're so worried ! BUT, they should have thought of this before shouldn't they? Again, the Govt and Bank are TOO SLOW and reacting to events rather than acting in advance. That's not Osborne's fault - that's a failing government!
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Osborne has a point as does Lord Burns.
It is disingenuous for Brown to accuse Osborne of talking down sterling as it has already dropped 25% against the yen and the uS dollar thanks to what the government is doing.
What is actually going on is that Mr Brown and the rest of his coterie are talking up the recent conference, are in denial of the mess the economy was in before the crisis struck and haven't got a clue as to how to navigate a way out of the crisis.
We badly need new ideas; not the same old gruel served up time and again by Brown.
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Oh dearie, dearie me! What a pickle we are in.
I have just seen Osborne speaking with Andrew Marr and he made his point.
Let us look at our recent economic history as my Lord Burns has so rightly done and one is left with a notable set of question marks about what Mr. Brown is about.
Sterling has dropped 25% against all major currencies in the last four months. This is already affecting prices at the most basic level in that energy prices are not falling as fast as they should be. So much for the deflationary argument?
If this continues or even fails to abate we could find ourselves dealing with both inflation and a deep recession far worse than anything seen in the Seventies. Such a set of cirucmstances will lead to an economic collapse similar to those experienced in South America fifty years ago.
It is quite valid for Osborne to raise these issues. It is quite incorrect for Brown to try and smear his comments. There has been only one persion who has talked down the pound so far and that has been Mr. Brown.
The reality is that despite what the government is saying the recent summit has only produced a set of headings about broad principles. What these comprise is open to interpretation. For example, there was an agreement to avoid protectionism yet the Chinese government is reintroducing tax exemptions for exporters and the EU bringing some anti-dumping duties in on some imports from China. So we have to redefine these principles with some consideration.
I fear that New Labour remains subject to the Lord of Spin. This is not helpful when the people of this country badly need the truth.
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One of the points agreed at the summit in Washington was...
improvements to financial market transparency and ensuring complete and accurate disclosure by firms of their financial conditions
If GB is so keen to promote this then why
were house prices removed from inflation calculations?
are the government so keen to use PFI as a way of getting debt 'off the books'
do the government refuse to take into account PFI, B & B., Northern Rock and bank bailout amounts when calculating national debt?
It seems to me with out Gordon it's very much a case of do as I say and not as I do.
It seems a fairly well documented argument that the UK is not as well placed to offer fiscal stimulii as other nations who have kept a tighter grip on their nations finances before the run up to the crisis. This makes a complete mockery of the months ( it feels like years ) of GB's touting ' the UK is uniquely placed to weather this crisis '.
GB's performance at PMQ's last week was simply abysmal, I hope that in the coming weeks DC can take the PM to task on his phoney facts and show that he has to take the responsibility for this.
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I think it is important to look to the reactions of world leaders at this G20 summit to have an idea about how far UK Sterling will slide.
Gordon Brown is aiming to create a tax-cutting consensus in the world's largest industrial players and hence create fiscal stimulus programmes around the world.
If he succeeds, this will decrease the perceived pressure on UK Sterling because budget deficits across the world will be increasing, and not merely the UK Government's one.
However, I feel it is also important for Brown to set in place a plan to decrease the budget deficit in future years. When the Labour Government arrived in office (in 1997, I feel old now) the markets reacted well the clear budget proposals set out by the administration for the following 5 years. Brown could recapture this, easing fears about the British Pound but providing the necessary short term liquidity to the markets.
One thing is certain: the fiscal stimulus is definitely required.
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Hat tip to Guido, but when exactly did Brown start leading the world on this?
The U.S. fiscal stimulus plan worth $150 billion went into play in February with bi-partisan support.
The Chinese stimulus package is a $586 billion public works acceleration plan announced last week.
The German Cabinet approved a stimulus package weeks ago, as did the French.
Australia's second stimulus package was announced last month - though they have the advantage of a massive budget surplus after a decade of Conservative economic policies.
Spain's fiscal stimulus package was announced in April.
Conservative run Canada also has for years run a budget surplus and remains determined to balance the budget and cut taxes.
Japan has been doing fiscal stimulus for two decades.
Britain can't announce one, because we have no spare borrowing capacity because Brown hasn't balanced a budget since 2002. Net borrowing since then is £235bn, excluding Northern Rock and everything since. Probably more like £400bn now, and that doesn't include PFI (£110bn) and public sector pensions (£1 trillion).
When are you going to challenge him on this Nick?
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Osborne is desperately trying to save his political skin. It is obvious that he is not up to the job and the calls for his scalp from his own party prove this.
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When will Brown learn that the Buck stops at his door.
CRISIS WHAT CRISIS?
Lets all blame the Conservatives as a SMOKE SCREEN .THE BEEB WILL GO ALONG WITH THAT HOOK LINE SINKER.
YES I AM VERY ANGRY.
Our economy is heading for a depression.
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There is a line in the G20 statement that Brown will no doubt try and either bury or deflect:
1. The root cause of the crisis:
Policy-makers, regulators and supervisors, in some advanced countries, did not adequately appreciate and address the risks building up in financial markets, keep pace with financial innovation, or take into account the systemic ramifications of domestic regulatory actions
"some advanced countries" - now let me guess.....?!
G20 Statement
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Will a fiscal stimulus revive the value of my pension funds which Brown stole money from in the 90s?
Will a fiscal stimulus lead to a rebalancing of the economy with reduced emphasis on financial services and increased emphasis on manufacturing?
What measures will Brown put in place to ensure that house prices don't take off again?
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Post 230
Yes you are 100% correct.
Browns behaviour in PMQs was disgusting.
He simply must go.
He quite clearly has no idea of responsibility other than clinging to his salary/job.
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I am just fed up with this Labour spin. Why cant they just answer the question "Why has Stirling been falling constantly if what Labour tells us about the economy is true?" As we all know it has dropped over 30% in value. All before Mr Osborne said anything. Stirling rates reflect what the market thinks of your economy. Mr Osborne may be the bearer of bad news but sometimes the truth hurts. I have read a number of reports recently from finacial experts each of them Blame Mr Brown for his in-action as chancellor in recognising that there was a problem with the way finacial instiutions were operating and for not putting anything by. Yes there is a global problem but by borrowing to the extent proposed and adding it to the bank bail out, how can we afford it. Taxpayers will regret it in 2-3 years time when the bill comes in regardles of who wins the election. The truth is that Mr Brown has failed as chancellor and is failing as Prime Minister. There appears not to be a single government department that doesnt have one problem or another and this is on top of the present crisis. He constantly uses the word leadership in his speeches in a vane attempt to convince us that he has any real leadership qualities
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Most people seem to have a problem understanding borrowing to stimulate unjam the economy versus borrowing for mere consumption, and the idea that this will help stop the downward spiral and bring forward a more profitable time where the borrowing could be paid off with zero adjustment in taxes.
I would agree, the government hasn't always explained things as well as they could, the opposition are too caught up in opposition to make a good job of it, and the media can just float along the surface and important things get buried in the clutter.
Poor governance from parliament, a feral media, and how's your father society isn't coping too well with the modern world and performance on many levels is below new economies in this globalised world. It's a perfect storm of mediocrity: ghetto Britain, broken Britain, basket case Britain.
What can I say? Let go.
Folks still don't seem to understand the power and influence the CBI and Tories have, and that their rigid views or support for "entrepreneurs" like buy to let landlords acts as a brake on change.
The British don't do leadership or communication. This helps explain poor industry and over-consumption. This cultural problem doesn't just affect leaders, or business and society, but individuals including, people reading this blog.
Some folks get arrogance versus confidence, and communication versus being chummy all mixed up. But, they're not the same thing. Zen Buddhism teaches that mind can't analyse mind, so people have difficulty being aware of this.
I agree, they're not great. But, they're products of the system just as much as some mouths in here are products of the internet. Taking in too much crap and not being in contact with the world around you can make things worse. This is why a longer Christmas holiday for MP's could be a good thing if they spend it chilling out and getting more face time with constituents.
It's that let go thing again...
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The media attack on Osborne seems relentless and well-orchestrated which is somewhat strange given the fact the guy is just doing his job and voicing reasonable concerns.
There seems to be a tad too much internal politicking going on and that loses sight of the real issues facing the real economy.
The dogged determination of Brown to recklessly borrow his way out of recession, leaving a legacy of debt, should be a gift to the voice of financial sense and sensibility regardless of party politics or political infighting.
Maybe the country isn't ready for a Captain Sensible and is happy with Brown's Flash Gordon.
http://theorangepartyblog.blogspot.com/2008/11/are-we-ready-for-captain-sensible.html
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I wasn't a big fan of QinetiQ being sold off (and can't stand the dumb branding) but the problem with Britain remains that industry had its leadership and critical mass issues, and the City was hostile to anything other than short-term high-return finance.
Surveys suggest that a lot of young folks are regreting taking soft degrees, and as the finance and marketing bubble declines it's likely that there will be a rise in demand for hard degrees. Plus, a more cowed City will have to play a larger role in industrial and start-up investment.
Where is the next Sony? Where is the net Apple? Where is the next Siemens? The creators of those could just be starting their degree or working on industry creating prototypes as we discuss this issue. That's something to think about. I wouldn't lay money on it. This is Britain so leadership and entry to markets is squashed before it gets out of the started gate. But, you never know.
Good job Mandelson's back, eh?
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J K Galbraith once said, one of the greatest pieces of economic wisdom is to know what you do not know. On that basis I suggest that most of the previous comments are redundant.
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#221 notjustanother
As the Bank Rate has been reduced by 37.5% I'm not surprised that the pound's value has fallen. It's just the working of "the Market" as investors seek more return on their capital.
That's a good point.
Many of the people commenting on this blog (and those making economic policy for the Conservatives) don't really understand economics.
Clamouring for interest rates to be slashed, and then being surprised that sterling falls in value when they are. It's a predictable response for the market - the return on holding sterling-denominated assets has fallen, so holding e.g. dollar-denominated assets become more attractive, and so relatively more expensive.
So there's a choice:
High interest rates to sustain an over-valued pound. It will cause a needlessly big recession and massive unemployment, but it's always been "a price worth paying" to keep access to cheap foreign holidays and luxury goods to those unaffected by recession (e.g. the bankers who are enjoying the fruits of the bail-out).
Or lower interest rates, a recession that is less deep at the cost of imports and foreign holidays being ~25% more expensive because the pound is no longer over-valued.
Osborne obviously prefers the former.
Everyone on this blog whinging about a falling pound, you have no credibility unless you are clamouring for interest rate rises as we enter recession
Yet more "moon on a stick" opinion from the right-wingers on here
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Mr Osbourne's problems stem from the fact that he has not yet managed to understand the underlying causes of the financial crisis, and is therefore still constrained in the strait jacket of the "conventional wisdom". Mr Brown, unfortunately very belatedly, and Mr Darling seem to be beginning to break free.
As many writers have said, notably Malthus, that competitive capitalism will generate extremes of wealth and poverty. Eventually there will be economic stagnation because the poor will no longer be able to buy the goods the rich need to sell them. In recent decades,a temporary solution to this problem has been to give the poor plenty of cheap credit, but this failed when the lenders belatedly began to worry about whether they would get their money back.
There has to be a way in which money is recycled from rich to poor. If this is not done in a relatively civilised way by, for example, progressive taxation, the system will find its own, possibly more brutal way, for example, collapse of the banking system or the currency or revolution or war.
This analysis applies domestically and internationally.
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This comment was removed because the moderators found it broke the House Rules.
#243
Again I have to say that the only way to prevent something absolutely terrible happening in the next year or two is to raise interest rates, to raise taxes, and to let asset values fall.
Not very pleasant for a year or two but to do otherwise will make the situation even worse. Just let it go, short term pain, long term gain. By protecting the world from the implications of what has been happening since, believe me, the 1987 crash is to live in an alternative universe. Stay in the real world. Let the crash happen and then rebuild from a lower base.
Gordon Brown will go for a spring election of that there can be no doubt, he will cut and run, leaving his scorched earth, where strangely enough what did the Aborigines do they used fire to rebuild, it cleans out the dross and scrub, and gets rid of the weeds, and soon enough the land recovers. A scorched earth policy is actually a good thing, if you are an Aborigine.
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Sorry, but this Osbourne character is a half-wit. Sterling would have fallen against the dollar, euro, and Yen anyway regardless of Brown's tax cut and spend, and the BoE's interest rate cut.
What is Osbourne proposing? Some gimmick tax cuts on employer contributions and subsidizing council tax! Does anyone seriously think that would work? As he's now opposed to Brown's spending does he think we should have left the banking system to collapse? With a potential general election in spring Cameroon better dump this fool - he's a liability.
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Zen Buddhism suggests that clinging to certainty and desire can be a bad thing. Obsessing and getting caught up in enthusiasms tends to end badly. So, folks can benefit from learning to let go.
The "strong" appeals to some but trying to buck the market or stand rigid in the face of a hurricane usually ends in tears. This is where the "weak", or more modest, flexible, and content is counter-intuitively better placed to withstand the storm.
People can misunderstand and be unhappy with change but they usually adjust, and the ignorant and amateurs tend to jump to conclusions or overreact. But, there's lots of useful lessons in this situation if people keep an open and flexible mind.
Bad leadership in finance created a swathe of wannabes in the sub-prime market, and the bright and shiny creation got stung by its own tail. This is classic "constructive disaster" of capitalism, which is merely a perspective on the underlying market or reality.
There's nothing anyone can really do but how we deal with it is important which is why, I think, the more constructive and consensual approach of Gordon Brown compares better with the demanding and insensitivity of George Osborne.
As Thatcher was an icon for earlier times, Gordon Brown is an icon for modern times. I note, in an essay by Clive James, that Hollywood is exploring the idea of the "rational action hero". I take that as another indicator that Brown is leading necessary change.
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CEH
Most people seem to have a problem understanding borrowing to stimulate unjam the economy versus borrowing for mere
So your prediction for labour winning the next election -- do you think people will vote labour because people are stupid, or because they are clever?
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#244
Sorry but what happens is that something new comes along, whther we need it or not is a different matter. In the meantime it is bought by the rich, there is limited supply and high price. Once the goods have been bought by the rich then production is increased, the quality reduced, the price reduces until the poorer can afford the good, on the basis that the rich have it so to keep up then the poor want it, whether they need or not. A problem of advertising, and conspicuous consumption.
So, the good then reduces in price until such time as it is no longer worth while producing it. So, production is stopped. In the meantime the rich do not like owning a good which is being sold to the poor so they go on to the next big thing. So the poor also realise that they now own something which they never really needed so they take it down the recycling plant where , well you get my drift. In a hundred years time the good appears on the antique road show where it is sold for £500,000 or Empty your Attack where it is sold for a fiver.
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This is a very, very good comment. The hyper-competitive environment tends to generate extremes and a collapse of shared capital. This is why parliament, the media, and failed states have such issues. But, simplicity, developing the centre, and "investing in loss" can help build a better alternative.
I agree with a lot of that. Labour were a leadership mess until recently, and the Tories remain tainted with cruelty. But, while Labour seem to have developed some clue the Tories still haven't had their "Clause 4 moment" and are clinging to a failed model for reasons of mere vanity.
People can make claims or express sentiments but reality is always there and never goes away. You can't fight it, change it, or wish it away. Heck, it's not as if better, faster, and smarter people haven't tried and failed. This is why it's important to drop delusion and pretence, or ego, and let reality into the frame.
It's interesting that since hammering it in this blog that "reality" has risen up the agenda and surveys are showing that this is where the voter's minds are at. This is why I say the party that will "win" the next election is the first party to "lose" the election. By liberating themselves from "winning" politicians "get real" and strike political gold.
There is no spoon, etcetera.
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A post above quoted one A Lincoln
In regards to fooling some of the people if not all of the people some of the time or indeed all of the time, our weakness in the World and its leadership is the result of a political system that has fooled itself into believing the democratic will of the people is founded on the notion that first past the post is going to produce a Red Rum or Dessert Orchid.
We have a convoluted system of monarchy, peer hood, establishment and commoner together with annexed MEP's in a Europe we are either half in or half out of trying to reinforce to the nation that we have not only control of the democratic freedoms that were re-enforced across the western world, but leadership in a world that heralds democracy and capitalism together as the panacea of the free world.
Yet whether through apathy or concern the majority of the people do not consent to the political party that we are told are democratically elected to represent the people.
We have a system where a leader of the nation is sanctioned by only the electorate of his constituency.
Is it no wonder our nation is seen in the same light as a Londoner may see that quaint little village in Cornwall, pretty, historic and atmospheric?
We need a system where our 'leaders' are chosen from the pool of the nation, not the club or society - they need to given a ticket to lead from the people as a whole not a proportion of their constituents.
As we converge toward the European village without statesman at the helm to influence the new world order, ask yourself after watching Gordon, Alistair and Osbourne squabble about Stirling devaluation, has any of them actually come up with a plan to enable us to get out of this mess we are in? And as David remains quiet on the subject in order to see how the land lies by Tuesday or Wednesday, is it not time we elected a President rather than fools?
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Nick,
I am already looking forward to Wednesdays PMQs, unless Gordon gets a cold or has to go to a meeting somewhere because he is the new leader of the free world.
I hope that the Speaker continues with his improvement and tells the PM to actually answer the questions which are asked of him. It is not appropriate for the PM to keep referring to what the Tories may or may not do. It is not appropriate for planted questions from labour MPs referring to Tory policy. None of this guff about do you think that the country must pull together in this crisis and do you think that the Shadow Chancellor was right to talk the economy down, what with sterling having fallen/risen/stayed the same since Osbornes announcement.
Furthermore, David Cameron is absolutely right when he says that the PM never answers the question.
For example, I would ask, if the pound was valued at about 2 dollars to the pound in July and now it is 1.45 dollars to the pound was that fall precipitated by the announcement from George Osborne on Friday or was it the result of Alistair Darling and his 'Pissed Off' reference. You can't make it up, that is unless the standard of education in this country has been appallingly worse over the last sixty years rather than only the last ten. We are just so doomed.
Finally, can the PM not read out the names of the dead, when did this convention actually start, imagine Lloyd George at the beginning of the Somme, only another 15,000 names to go. It will be over by christmas, bit like not having to fire any bullets!
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22
We have to make them first
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Of course it's right to point out that our currency is in freefall. It was before George Osbourne opened his mouth and will continue to be. All the international bodies commenting on economies have already made their judgement on us.What is worrying is that the PM seems to believe his own publicity.
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178 Charles_E_Hardwridge reference support for my 172
Thank you and likewise I have been writing and talking about the content mainly un heard for some twenty years now I even wrote a book back in 1999 but got caught fighting my own dot com rescue war, so I never got it to publication maybe its time to get it out and bring it up to date.
You were a little touchy over the political colour of my comment I thought as I did not mention any party or any name in my post and some of my comments given to be taken for where the cap fits… were directed at industry, other commercial leaders and civil servants as well.
In fact I believe in Pareto analysis that there is twenty percent good in the worst and twenty percent bad in the best though the reds have been in the driving seat for the last eleven years and have to take the flack for where we are to date in the six recessions since the last war Its about three each to incompetence and nil nil in lessons learned.
Problem is though much as we would like to blame our politicians we also have to blame ourselves we vote them in and then don’t tell them what as a civilized community we expect of them so arguably we are as much to blame as any politician, civil servant, banker or other sector leaders and whether or not we feel responsible we cannot claim any immunity from the consequences of their actions if we did not tell them what we expected we can’t complain at what they deliver to us it is only when they don’t deliver or deliver what we did not ask for that we can justifiably complain.
there was a time people used to serve the community now most serve themselves and no one can call anyone to account because everyone is also busy trying to stick their paw in the honey pot.
The trouble now is the honey pot is empty and slowly people will realize it is. Once they have licked the remains of what stuck to them a different mood will arise and that is a situation for a different type of leadership and strategy.
The natives may become restless. This could lead us down a road to a place none of us would like to go
We have to get it right now irrespective of the colour of the rosette
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More evidence that we are (not) the "best placed to weather this storm";
http://news.bbc.co.uk/1/hi/business/7720614.stm
This is how the World Order changes; in the end you can't fight capital. They have it and we don't, so we have now to stand by while they buy up the World and all we can do is worry where the next fix of debt is coming from to fight off the cold turkey of reality.
Oh, and if you throw in that our PM is politically inept and goes around making a fool of the country - by using anti-terror legislation on a peaceful country, for instance - that only makes it worse.
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In years to come, schoolchildren studying recent history will look back on what this government has done/said and how the BBC have reported it, and they'll be completely unable to understand how it all happened and how labour/bbc got away with it all without riots happening.
They'll be asking questions like "why did people vote them in 3 times in a row when each time they got in all they did was borrow more money than they could afford and destroy the economy and then blame other people for it?"
And they'll also be asking things like "why did anyone believe all that stuff that the bbc said when it was so obviously untrue or totally skewed/biased?"
But the most important one will be "why did people let Gordon Brown stay in charge of the country when he'd personally destroyed everything? Why didn't people riot? The man destroyed their country and then he just grinned smugly pretending he was the messiah - why did people just sit back and accept that?"
The BBC and labour have a lot to answer for.
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Dearest Nick,
Since the start of this year, I have been planning a trip to America what with the exchange rate over two dollars to the pound.
Now, eleven months later and with the pound in free fall, I will think about going to Bognor instead.
Georgia boy only mentioned the possibility last week of a run on the pound.
If down by 25 percent is not a run, what is?
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258
With no Statesman with leadership credentials, who is not to say they will be elected a fourth time?
A system that elect and indeed re-elect on the basis of sound byte snippets of PMQ's and pretty handshakes in front of the worlds media instead of deeds and the commitment to change can surely continue to voted back in on the ticket provided by the apathy party.
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23 Moderate
Maybe just maybe, the government should have listen to Nobel Peace winner Anan, UN weapons inspector Blix and David Kelly.
Not to mention 1 million UK protestors against a war in Iraq in 2003
Still there you go.
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#246 TAG
Yes - because that's the only way to engineer a deep and long recession, ensure mass employment and prove the Conservatives right.
It would be a disaster if that was not to happen - Brown may get elected!
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"Most people seem to have a problem understanding borrowing to stimulate unjam the economy versus borrowing for mere consumption, and the idea that this will help stop the downward spiral and bring forward a more profitable time where the borrowing could be paid off with zero adjustment in taxes."
It's interesting how centuries of economic wisdom, so readily given lip-service to during times of prosperity, are ditched without a moments thought when the spectre of recession rears its ugly head.
It's at times like this you suddenly realise that through all our pompous illusions of having learned from previous generation's mistakes we still opt to bury our heads in the familiar sand rather than venture over the new horizon.
Welcome to another decade of boom and bust.
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#259 tobytrip
If down by 25 percent is not a run, what is?
The pound has been approximately 25% over-valued at 2 dollars to the pound
(see e.g. the Economist magazine's analysis).
We have had higher real interest rates than our other countries for a while, which has helped sustain this over-valued exchange rate (higher return on assets denominated in sterling that denominated in dollars).
Interest rates have fallen now to about the same level as elsewhere, meaning an over-valued exchange rate can no longer be sustained. The 25% over-valuation has disappeared.
In the long-run, the exchange rate has to gravitate to "purchasing power parity", where 1 pound wil buy you the same amount of goods regardless of whether you are spending in York or New York, London or Berlin, Skegness or Milan. You've enjoyed a period where your money goes far further abroad. Our exporting industry have enjoyed it a lot less.
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Imv, Mr Osbourne's lack of judgement is simply one of timing; of shooting the gun.
When the predicted gloom and doom comes to pass, our country will succumb to election fever, this time as virulent as the 'credit crunch' which has swept the globe.
Then, such comments will be common place (along with converse arguments) and the world will watch on the sidelines as we destroy each other in the name of democracy.
Never mind the financial crisis. Our election will not come at a worse time.
Then the Osbournes and the Browns of this world will be brought to account and their ledgers balanced - or otherwise. Well, imv.
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Nick
Can I please ask if you look at the replies on here. A yes or no would be appreciated.
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#251
I think that in some strange way this Blog is actually coming up with some way in which Cameron and the Tories, with Osborne can actually 'win' the next election when it is held in the spring.
'It's interesting that since hammering it in this blog that "reality" has risen up the agenda and surveys are showing that this is where the voter's minds are at. This is why I say the party that will "win" the next election is the first party to "lose" the election. By liberating themselves from "winning" politicians "get real" and strike political gold'.
The problem will be that Cameron is going to have to change quite a lot, or alternatively stop being something which he isn't. I like to think that I have been in 'the real world' for some time, but friendless for obvious reasons, they always shoot the messenger.
I would point out that Pareto has been mentioned in earlier despatches, may I suggest that two other elitist theoriticians should also be looked up, namely Mosca and Michels. May I humbly suggest that we are soon going to be faced with some choices, either a Marxist regime not communist, an Anarchist regime Proudhon, or alternatively a fascist regime like Mussolini's Italy in the late twenties.
We are soon to have a very disillusioned military, where there will be proof that their 'mates' died for nothing, where the politicians, like in Northern Ireland will talk to the enemy and reach agreements and settlements, just like after WWI.
Victory at the next election will be for the party, or individuals, who organise themselves the best, just as Obama managed to organise his key workers in America. That is the key, get them on the streets, working in little cells and influencing people. Consider how the Bolsheviks were victorious in Russia after the chaos of the Great War, they had been planning the take-over for years.
It is not capitalism which is coming to an end it is Participatory Representative Democracy which is coming to an end, we do indeed live in interesting times. If the government was serious about the long term nationalisation of the banks then they would have memebers selected by the government on the board, not operating through an arms length Holding Company. Maybe it ought to be called the Big Brother Holding Company?
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Anyone that watched those boys last night before going to fight in a fools war will not look at Blair in any other way than that of a taker of young life using kids from the estates to act out their video games in real life. Where pushing the green button does not give you another three lives.
That his his and Bushes legacy to the people that stayed at home to elect him.
What will Browns legacy be? A false leader needs to impart a decision to lay down in history. Euro? Bankruptcy? or continued sacrifice of the innocent?
We have spent the surpluses on the NHS, FRB. The new hospitals and schools are but shells containing the the same weaknesses of the class system and the economy is now shot.
As Empire fades in history, does London and Britain evolve like Rome within Italy?
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Neither, what he said was the truth. In a way its better that the pound fell as it will help us manufacture more in UK as imports become expensive, this will improve employment.
Also it will help to attract more tourist and make people in UK to have their holiday in the country, this will also better for employment.
GDP might be the same or less due to this but employment will increase and the jobs in investment banking will go; net results will be better living stands for most.
Government borrowing more is not a big problem as due to fall in rates what it pays out also falls.
It might be time to cut VAT to 10% and cut tax on manufactures. It would be also time to increase or impose tax on import from countries that refuse to float their currency. Also their is no point in keeping non doms in this country unless they bring employment to UK.
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#264 No, our interest rates are still higher than those we usually compare to. they have to be, because the only think persuading anybody to buy our currency is the prospect of higher returns. The minute we drop to 1 or 2% you'll see a better comparison.
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How about honest, Nick.
We are not that stupid that we believe Brown when he says we are well placed to weather the storm.
Global meltdown it may be, if Brown did not overspend and over tax over regulate the working population and try keeping a curb on the banks and the money market, as he keeps telling us he is so qualified for then the pound would not be sinking and we would not be filled with contempt for him.
Trying to sell us down the river to the EU does not impress either.
The mess needs to be sorted, but not by labour.
I'll vote UKIP, they have won my respect and the establishment want rid of them.
That alone would be enough to make me vote for them.
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Perhaps if G Osborne would state the borrowing level in the same terms as the chancellor perhaps we could have a debate on the merits of his arguments. The borrowing today is less than that in 1997 under the Tories, as a percentage of our GDP. We have also paid off the National Debt, a legacy of WWII. He is trying to deflect from the fact that he tried to break the law by suggesting a procedure to obtain £50,000 from a Foreigner. The same 'crime' Wendy Alexander was hounded out of office for, even after she had paid back the money, £950, and reported the 'offence' to the relevant authorities.
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#268
I must add Brown to that list. He paid for it, he funds it, he has the same blood on his hands and he could have stopped it the minute he took over. That is the problem and it will be the problem when Obama takes over, the wars must end only they won't.
The problem in this country is that 'Stop the War' have backed Obama, what will they be able to do or say now. Obama will expand the war in Afghanistan and the Iraq government have just backed the American proposals well should the allies not have waited until the new President was installed.
By the way I think that there is another problem coming to the BBC after the Five Live programme this morning concerning Obama. The 'joke' about him at the pearly gates was totally inappropriate, I will not repeat it here but it was not ood enough, who do I complain to?
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Some of you contributors seem to think the value of the pound has dropped because of a fall in intrest rates. Perhaps they can explain why it continued to fall against other currencies whose interest rates were lower than ours. When the eurozone was some 1%plus lower than the UK the pound still continued to fall just as it contiues to fall against the dollar. As for Mr King saying we should borrow such huge sums perhaps he should tell the taxpayer how that debt will be repaid in the future and what options government will have to recoup the cost of such spending. Just how much of an increase can we expect in taxation either direct or indirect to pay for this. He forgets that the level set for things such as pension credit is relatively low and those of us on fixed incomes who pay tax have other bills to meet as well. I for one can ill afford more stealth taxes things are hard enough as they are. With an ever increasing elderly population he needs to come into the real world. Not all of us have the luxury of pensions that will run in hundreds of thousands of pounds per year as certain finacial executives will receive. There was no meat on the bones of the economic statement, none of us appears to know just what these other countries are going to do. As has been shown in the past agreements on such things as climate change most of what is agrred is Political spin to appease the masses. Very appropriate for this Government which has given nothing more than 11 years of spin trying to convince people that the reality of life is not what you think it is. Just like the EU their achievements have been few and far between but they live in an illusion of thinking that they are more important than they really are. Trade and Oil talks were an example. I have just lost faith in their ability to tell the truth on issues which is why they never answer a question. It's pointless asking a question which has a negative truth as the politicians will always try and turn it around to a positive spin that in no resembles the truth or the reality. Look at Afganistan any one would think that out troops had no problems with the best equipment in the world and the taliban were the ones with the all the problems.
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272:
The difference being that he didn't break the law whereas Wendy Alexander most definitely did!
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The saddest thing about all of this is that a vast number of people according to the polls have fallen hook, line and sinker for the P.M. ,The Chancellor and anyone you can name on The Front Bench's version of why we are unique in our present dire financial position. If George Osborne can't take them to task for their failures then he should be replaced by someone who can.
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I'm so glad I celebrated my 60th in New York last August as opposed to next.
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Ken Clarke has openly endorsed George Osborne.
No more to be said.
I heard Ken Clarke saying the same things several weeks ago on Newsnight.
So what are Labour waffling on about.
Of course the public need to know the truth.
And everything George Osborne says is the truth.
At least we now know he is listening to the most experienced and senior Tory politicians so rest assured we are in safe hands.
Unfortunately I can't say the same about Brown 'cos he listens to nobody but himself.
The spin put on it by Labour sounded nothing like the true reality of the meeting I saw reported from America.
Didn't Bush say that every country would have to sort out their own problems in their own way?
Hasn't anyone told Brown that yet?
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If George Osborne had said nothing about sterling there would not have a been such a severe run on the pound, Yeah. Right! It's a red herring propagated by a group of people who couldn't arrange a drinking session in a wine bar!
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Brown could not stop the false wars no more than Blair could. The idea that 'our' elected (lets say head of party's) can make worldly decisions is alarming. The decision was taken and they had no alternative other than to sell the project. Complicity is a weakness in leaders that history reprimands.
The current head of party falsely leading the party is also complicit in his inability to prevent the outcome of the new world order. We are now sidelined to curtail to the new order ..............until a Statesman is thrust upon us to re-evaluate our sanity within the world
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#278 virtualsilverlady
Ken Clarke has openly endorsed George Osborne.
No more to be said.
I was shocked about that as well. I would expect Ken Clarke, who has been a life-long Labour supporter, to back Darling and Brown's judgement. It proves Osbourne is right, if he can convince a dyed-in-the-wool socialist like Clarke of his case.
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re 243 balhamu
Agree. Don't fancy high interest rates at present - too damaging. If imports go up thats just tough and well overdue. Lamonts big 90's currency prop did a lot of damage.
Not sure about Browns big borrowing plans but doubt they are going to be that big in reality, he is already stuttering on it. Doubt Brown can get the world to dance his tune on others domestic policy so dont know why he is bothering, looks more like spin than anything else.
The big problem is the sheer lack of scope in things that can apparently be done to sort the mess. I dont know about the cupboard being bare, the brains seem to be vacant also.
As the main sales fall is in big ticket items and houses I have yet to see anything which could give a marked uplift in those areas so whats new. It all seems like getting an aromatherapist in when what is needed is surgery. Political credibilty all around is likely to fall. Oh dear.
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281:
Conversely you wouldn't expect the architects in part of our present financial dire straits to endorse what George Osborne said. Ken Clarke is a man of some experience and integrity. Try to read exactly what he said before slagging him off in this kind of off hand fashion!
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There have been leaks today that the government will be using their £ 15 billion unfunded temporary tax cuts to the tax credit system.
Great.
So only those people with children will benefit. Never mind those couples without children or single people or any elderly person still working.
Why is this government so obessed with this one group?
I know, lets make the tax credit system even more complex so that the Government can employ more public sector workers!
Why not just increase the starting rate for paying tax and national insurance so that EVERY TAX PAYER benefits!
I just don't get it? I wonder which groups will suffer once the tax reductions are reversed into large tax increases post a (improbable) Labour election victory?
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Nick,
so Gordon wants concerted action to save the economy of thew world. We live by exporting, the pound is devalued, making our exports cheaper and the imprts from other countries more expensive. So, when the leaders of the world's economy go home they will say
'excuse me Britain but you are being duplicitous you want us to buy your exports but you want our exports to you to be more expensive, so the money you give through tax credits will be spent on your goods in your country, exactly how is that going to help our economy, especially since your comment about British jobs for British people, or was that not what you said?'
Oh and exactly how are you Gordon Brown going to end the dictatorship of oil, or did you not say that either.
As for oil, the price in pounds sterling has not come down because of the changes to the exchange rate. Mind you we will have to raise interest rates but you will not do it until the crash in the pound has been engineered because you will want sterling to have fallen so as to to then engineer a rise in sterling, by raising ineterest rates,so that foreign investors are compensated for the fall in the price of Gilts by a rise in sterling. Prices in Gilts must fall as interest rates rise, work it out.
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What intrigues me is that:
a fall in the value of the £, of such rapidity and degree, attracted almost no headlines from the BBC.
the original comment by George Osborne attracted almost no headlines from the BBC
the critical government response fills the BBC airwaves.
balance not bias please.
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Economist magazine suggests that Purchasing Power Parity exchange rate with the dollar is 1.50 dollars per pound
So, it was, as I keep saying, 25% over-valued.
It is no longer over-valued.
Why is this a crisis?
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Osbourne is right. I predict the government will have to increase interest rates in the next week to a level significantly above where they were before the recent cuts. If the government doesn't raise interest rates then they will face two choices: see the pound collapse or try to join the Euro. I doubt the europeans will allow us to join the Euro because of the impact the 'sick man of europe' would have on their own economies.
The BoE is charged with keeping inflation around 2%. If inflation is defined as how much our money can buy then the Pound buys 25% less today than it did back in July. To put it another way, inflation has increased by 25% in just the last 4 months. This increase in inflation may not be evident yet but it will be soon because all our energy, raw materials, manufactured goods and most of our food is imported. Oh, and of course, don't forget the effect on the cost of foreign travel.
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#287
I guess you're saying that the pound has been overvalued for ages then? Bit strange that!
Actually, the issue isn't the value against the dollar, it's against the basket that's the issue. The dollar will soon collapse anyway under the weight of their own problems which are as bad as ours.
The fact that we're sinking fast against the Euro (which is a zone in recession, by the way) tells the tale.
I think you'll find it increasingly hard to justify the statistics coming out over the next few years. For a start you could explain why everything is great when you lose £4bn a MONTH on total trade (inc invisibles).
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Irresponsible or prudent? It simply does not matter as holding Govt to account for this, and other, economic points is required. We need more of this, more often from Osborne.
Maybe at the point when reporting of opposition attacks is more established, we'll see some real analysis on the underlying story from the media rather than the noise surrounding it.
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Nick,
surely I am not as thick as some people think I am.
Rather than give money to the poor through tax credits, which enables employers to keep their costs down, why not give people money through the tax allowance system.
At the moment we are allowed to receive our pay and pensions without paying tax on a sum of money. Raise that to GBP12,000, therefore we should receive GBP12,000 without paying tax.
At the same time raise the tax rate for higher rate taxpayers, to 60%. But at the same time again raise the point at which the higher rate kicks in to GBP100,000.
My final suggestion, abolish the separation of Income Tax and National Insurance. That is why you can bring in the 60% rate.
Imagine how much administration money can be saved by this merger of Income Tax and National. Furthermore, take a serious look at all tax allowances, abolish them. If you make a profit you pay tax on it. Then, if anybody is found cheating the system bring in severe penalties, you have to ask why people were putting their money in overseas tax havens.
Just a few suggestions but hey let's just saddle our children and grandchildren with debt. I am beginning to take a very strong dislike to socialists! But that does not make me a liberal or conservative. In fact I am one of the unrepresented.
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#243.
All very good, but please explain this:
The Fed has a base rate of 1%
The UK base rate is currently 3.5%.
Add to that, the "credit crunch" has exposed more US FI's than UK ones.
So why has Sterling depreciated 25% against the dollar.
Surely on your premise investors should be flocking to the pound shouldn't they?
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#243.
And to add.. want to know why further Sterling falls are bad?
Well, US dollar priced assets held by banks etc, etc... are suddenly worth a lot less.
So bank's etc, put up their prices to cover the shortfall.
So that's the price of mortgage, insurance etc... all rise.
Not great.
And as 70%+ of our economy is in services.. really not great at all.
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#289 bogbrush
So you don't trust the Economist magazine or the OECD then, and believe that 2 dollars per pound was the right long-term rate? Why do you believe that?
The trade deficit you point to is also partly symptomatic of over-valuation of the exchange rate. As the exchange rate has been 25% over-valued, imports have been 25% too cheap and exports 25% too expensive (compared to the long-run), so naturally you would expect a deficit.
The other part of the trade deficit is of course the deliberate destruction of our industry during the 1980.
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I was just watching the news - and was genuinely surprised.
There was no subtle deformation or re-positioning of what George Osborne said on the Andrew Marr show this morning.
I was surprised.
The news report totally and utterly reported Osborne at face value.
Then I realised I was watching Channel 4 news and not the BBC.
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...and the alleged destruction of our industry in the 1980s that you point to BalhamU was the result of catastrophic labour management in the 70s...? Please, please can we go back further so that you can, as always, divert any discussion away from the main point.
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Good one, that.
My general view is that Ken Clarke has been mouthing off and backslapping his own chums since they wheeled him in to comment on economics. More importantly, the content of his comment is a policy free zone or endorsing failed policies. So, with great respect to Ken's well earned or not reputation, he's a bluffer.
John Major was brought out to write a column in the media the other day. He gave a well crafted but breathtakingly revisionist and selective view of current issues that were easily shot down as propoganda. For a man who likes to exploit his reputation as a former Prime Minister and "man of the people" he can be quite abusive.
I'd rather not be so blunt but the Tory mentality tends towards being "dumb and chummy". Their ethos and the type of people they attract can lose rational thought and kindness when their ambition takes over. I hear, some Tories calling for David "underpants on head" Davies to replace Osborne. What in God's teeth does that man know? Oh, he has "grey hair". Jeez.
For a party aspiring to power the Tories are beginning to take on the hint of chaos and madness that reminds me of the dying days of John Major's government. You know, the "don't bind my hands" job where Michael Howard could be seen looking grizzled and a bit wired up at speeches. The fact that Osborne's developed political Torrette's and Cameron's blowing gaskets should give people a hint they're not quite there.
I won't comment on the Tories or yourself, but Zen is about putting a stake through the heart of the ego. People have ideas and feelings. They try to change this or influence that. Usually, we bungle the job.
So, more people (see first paragraph) rush in to save the world. They have their thoughts and feelings, solutions and motivations. But, you can't fix everything and can cause problems elsewhere.
Third time around, another mob look aghast at what the previous two left behind. (I think, you're getting the point by now.) This is why Zen is about inner calm, self-discovery, and merely being. It's the one thing people can allow to change without gumming up everything else.
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#284 balhamu
No, I actually state the dollar rate is meaningless as the dollar is absurdly overvalued right now. That will crash soon as they break what's left of their bank.
The issue of balance of trade has little to do with an overvalued currency and everything to do with the erosion of British competitiveness in the long term through a number of things including a hopeless and worsening education system and successive governments falling for the nonsense of the "knowledge economy". That, and the enthusiasm for cheap imports in an economy trying to have the best of both Worlds - massive monetary expansion and low inflation.
A currency can't remain overvalued for decades, that is a contradiction as the value is found over any decent period of time. If you want to argue that then you have to explain what keeps a currency "overvalued" in the long term. If it was rates then since rates are still high in Britain it still would be supported wouldn't it?
Perhaps it's simply that the myth of the thriving British economy and the prudent government fooled most of the people most of the time. It's been rumbled now though, hasn't it?
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A stone is debt free but not exactly a hive of economic activity. Thatcher almost knocked us back to the stone age the first time around. Can't say I'm really happy about the Tories taking another run at that.
The fiscal stimulus is like, say, having an immovable wagon full of goods. A man nearby may have a tub of grease but no customers. So, you go into "debt" on the understanding that you'll pay him back on the return journey from market. It's that or having all your goods rot on the wagon. You'd be "debt free" but have nothing.
This is a different form of debt than merely running a tab on some ale, waking up the next day with a hangover, and having to work the rest of the week to pay the landlord off.
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re PETER MANDELSON
If my postings relating to this individual are so defamatory.
I suggest the BBC give his lawyers my details.
I have no problem dealing with him in Court.
I am getting rather tired of being constantly censored
Its a fact he lied to obtain a mortgage,mentioning it is not defamatory.
Re Sterling Crisis Osborne is 100% correct.
As a result we are increasing our wholesale costs/prices by 40% next year.
INFLATION? I SEE NO INFLATION.
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294 balhamu
294 balhamu
Well I dont trust the Economist mag or the OECD, have you ever met an economist who puts his own money at risk - and I certainly do not trust politicans. I know a director of a bank and the self justifying pontificating drivel talked is beyond belief. It is obvious Chinese imports, which are the principal problem here, and which have also caused problems in India of all places - which is not a European country with the associated Health and Safety issues and social support costs - are far too 'cheap' and based on gross exploitation and if anything slows the avalanche of rubbish it is welcome. A drop in sterling has to be welcomed - it is the best thing to protectionism but flexible. A break from the fantasy culture of the last 5 years where many consumers seemed to be intoxicated and think they where on a filmset.
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I see on the news tonight that borrowing has now gone up to the level it was when the Conservatives left office.
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CEH,
Good grief,
Debt is debt.
If is raised by government it is paid for by government.
Using money that comes from the taxpayers or businesses.
That's money that could be used for investment in a business and create jobs.
Money that could be used to pay the bills, improve a home, have a holiday, buy a nice car.
It is not government's money by default.
The idea that debt creates growth, is an utter fallacy.
DEBT DESTROYS WEALTH IN THE LONG TERM.
Look at house prices in the UK, are they real, are they sustainable?
NO,BECAUSE THEY HAVE BEEN FUELLED BY CREDIT (I.E. DEBT)
There are many countries around the world that are already engaged in fiscal stimulus. Brown is not the first to suggest it.
And there is a massive difference in those countries.. most have ran up a substantial government surplus. A war chest to fight any downturn.
No borrowing.. just tax cuts.
Brown did not do this and he was warned enough times.
And one more thing CEH...
Every single Labour government has left office with more people out of work than when they were first elected.
It's always left to the Tories to clean up the mess.
Perhaps that's why the tough decisions get made on the Tories watch and this time will be no different.
Now Zen that!
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272. gmgsteel:
Perhaps if G Osborne would state the borrowing level in the same terms as the chancellor perhaps we could have a debate on the merits of his arguments. The borrowing today is less than that in 1997 under the Tories, as a percentage of our GDP.
---
You honestly believe after all that spending and investment Brown loves to spout on about that debt is actually lower?
It's simply been moved into PFI, come out of pension funds, and doesn't include all the money sunk into the bailout - it's a bit like not including the money you owe on your credit card as debt - it's estimated at about 2.2 trillion
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#302 Beech
Assuming that's right, is it:
a) A disaster (so the 'golden legacy' that Labour was left in 1997 was actually a toxic legacy)
b) Not a disaster (in which case how can Brown be criticised for raising debt too high)
Difficult one. Happens with logically inconsistent arguments.
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Nick,
could somebody explain why it is that when I type in a pound sign £ it is shown on my screen as a pound sign. But when it appears in your comments it comes out as a square box. I am going to try the dollar $ and see how that comes out. My keybpard does not have the Euro but I wonder what that would come out as. That is why I quote GBP.
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The G20 meeting was humiliating for Brown. Unable to get any agreement on his dubious ideas, he was sidelined by other leaders and ignored by the US media. Sarkozy and Merkel received plenty of coverage in the US, but Brown was seldom mentioned, if at all. Remember, this summit was to discuss the economic crisis, so Brown is clearly not the world leader he pretends to be.
Back to the UK, and where does he go from here? Does he follow the Tory lead by cutting spending to cut taxes, or does he press ahead with more borrowing? I suspect he will quietly drop his plans and copy the Tories who now seem to be making progress. Apparently, 75% think tax cuts should be paid for by spending cuts and not extra borrowing, a pretty big thumbs-down for Brown's current plans.
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Consider this scenario. George Osborne fears he will lose his post in a re-shuffle. What can he do to stop this?
He embarks on a publicity campaign voicing scathing criticisms of Brown. Although this angers David Cameron. it then makes it very difficult to remove Osborne as it would indicate there is serious discord at the top.
Osborne, by his devious strategy, thus achieves his objective of remaining as Shadow Chancellor.
Blossom 241
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303 phaeton flan flinger
This time its a mess created by a culture developed over 18 years of Conservative government. They cleaned up the real industry mess replacing it with a few people in London playing with money. Thats in the south the place where the votes count. The Tories 'Always' clean up the mess? You mean 30 years ago they cleaned up the mess? I agree but that was an awfully long time ago. 18years to allegedly clean it up and create a new mess in its place. A little bit rubbish weren't they?
Good choice of name. I think Throwing custard pies are all the Conservative opposition are good for.
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#298 bogbrush
Ok. If the dollar is less important, then Sterlings "slump" seems like less of a slump.
1 year ago (November 2007), 1 pound bought 1.41079 Euros.
On November 14th 2008, 1 pound bought 1.16723 Euros, down 0.24356, or 17% of its November 2007 value.
Sterling Euro Exchange Rate
Besides, your view of exchange rates are simplisitic. In the long-term, exchange rates should tend towards the Purchasing Power Parity rate that would equalise price levels across economies. In the short-term they are affected by speculation of currency traders, and can be significantly over-valued for long periods of time (like the pound in recent years).
I don't understand why it is a crisis if the pound is no longer over-valued.
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#304 tarquin
Who estimates the national debt at 2.2 trillion dollars? Source please.
I don't think even the Tory propaganda machine or their mouthpieces (the CPI) estimate it as that high in their estimate that includes as much as it can as debt (e.g. public sector pensions) and biases the numbers up as much as possible with the assumptions made.
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You an still be prudent and bankrupt.
You just look more the fool at the time
In fact, to replenish after a time of overspending maybe more fortunate than wasting reserves built during prosperity.
A calculating Prime Minister?
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Now Zen that? Someone isn't paying attention. I suggest you back up a few comments and read through things again.
It's nice to be right about something and socialise but "winning" is a bit of a stressed out arms race that leads nowhere. Hence, the finance crisis and the People's Republic of Robinstan crashing in tatters.
balhamu's comments are interesting: one sees waves of no-name wannabes crash and burn and a handful of blowhards strike it rich in here, but this is so much static.
Find something you enjoy and stick at it. Success and shared capital will tend to accumulate on its own. If you're not happy it all seems rather pointless.
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311:
A new study claims that public debt is a massive £1.3 trillion, equivalent to £53,000 for every household in the UK.
• UK's burdensome tax regime pushing businesses abroad
• Four families in ten could be sucked into the death-duty trap
The figure is higher than Britain's Gross Domestic Product - meaning the nation's wealth would be outstripped by its debt.
The report for the respected Centre for Policy Studies think tank says the official Treasury figure of £487 billion wrongly excludes the cost of public sector pensions liabilities, the hidden costs of Labour's flagship Private Finance Initiative contracts and debts incurred by Network Rail.
When these are taken into account the total is £1,340 billion, which is 103.5 per cent of GDP.
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I'll leave someone else to argue the numbers. But, what would a study estimating how cost savings and earnings from new markets show? Put another way, that 1.3 trillion number on its own doesn't mean a thing. It's just a number someone aimed for to get a headline and sell their services. Gartner pulls stuff like that all the time.
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#314 sicilian29
This is the "respected CPS" (sorry, I mistyped it as CPI in previous post) set up by Margaret Thatcher to try and convince others of her world view, and the in-house Conservative Party think-tank.
I don't really respect that as an impartial view.
Can we have a comparable figure for 1997, and an explanation of why things have changed? No - didn't think so.
The assumptions of CPS are:
1. There were no public sector pensions liabilities until Labour took over in 1997
2. The accounting changes that have pushed public sector pensions liabilities up are somehow due to Labour's behaviour rather than other factors
3. PFI didn't exist until 1987
4. The bodged privatisation of British Rail had nothing to do with the Government having to take it back into public ownership
No credibility whatsoever.
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#299 Charles_E_Hardwinge
I also feel unrepresented.
MODERATORS I HAVE CHECKED THIS WITH THE ELECTORAL COMMISION AND NOTHING I WILL SAY IS ILLEGAL OR UNETHICAL.
One of the things you can do is to organise a campaign of spoilt ballot papers, I looked into this for the last council elections when I was too late to be a candiate.
I wanted to do a "None of the Above" (which incidentally is the one name you cannot register under). Eventually I decided that a leaflet campaign would be better. Unfortunately I wimped out.
For all of you who think there will be an election in the spring start to plan now, if enough people can be encouraged to participate then it may stop the politicians saying that the population are uninterested in politics.
The simple message I would like to send is that we DEMAND an alternative.
My belief is that the only way we will solve our problems, both the short tgerms fininacial ones and the long term ecological and demographic ones is to have cross party consensus policies which are carried out be whoever is running the country.
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I'm worried about the fall of Stirling, William Wallace fought in vain.
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im amazed at some of the posts on here, you would think osborne was in power?
- "he shouldnt be speaking out like this/at this time" - yes he should, its his job to warn us if brown decides to mess up more than he has done already (if its possible)
- "osborne is desperate pointing to sterling being a problem" - not as desperate as a chancellor whos changed every single financial policy hes ever had and refuses to answer for anything that hes done, which has damaged the UK economy so badly, that our banking system was within 2 weeks of complete meltdown?
and now this chancellor is PM, hes going around the world to any summit that will have him calling for changes, which had he applied when in his previous position of chancellor, might have stopped the mess we are now in!
* the bank of england can release statements and rare speeches, that state the economy is in dire straits
* banks can come out with statements about house prices falling, new mortgages falling
* alistair darling can release statements about the worst UK economic climate since the war
* repossessions are rocketing
* unemployment is growing at a rate not seen for decades
* gordon brown states that the UK will "probably" be in recession in the next quarter
* the IMF revises its recession forcast for the UK, saying the UK economy will shrink by an 1.5% more, than it first thought
* personal debt levels are the highest they have ever been in history
there are many more i could list...
and the BBC and bloggers state that george osborne, shadow chancellor (hes not the one thats in office!) is causing the UK financial problems because he dares to mention the problems for sterling?
labour complain when he says nothing then complain when he warns of a possible danger, what are they afraid of?
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311 balhamu - see 314
I was watching Rory Bremner at the time who was illustrating the point, I didn't check his sources
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307 retro gamer
And what planet was it you said you were from?
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That's all right then. Everything's hunky dory and we are all panicking for nothing. Would that that were a true reflection of the reality! Damned statistics eh!
Even without The World Global Crisis I reckon that we would have been in deep trouble sooner rather than later.
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I wonder whether the hedge funds who finance Osborne's office are long or short in sterling? He may be absolutely honest, but Caesar's wife must be above suspicion. We cannot have any of these people funding any political party:
Also, the post af attorney general or shadow must be held by a lawyer. It's high time that there was a requirement for the chancellor or his shadow to be qualified in some numerate discpline: - at least A level maths? This would have excluded both Osbo and Gordon Brown wouldn't it?
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#317
I organised a 'none of the above' in Exeter and about 60 voters per ward did just that, so there is a hard core who can be built on.
Would it not be brilliant to have a victory for 'none of the above'.
If you are at all interested then look up Vilfredo Pareto, Gaetano Mosca and Robert Michels you might find them interesting!
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317: Iwanttoscream
I feel your pain, but as Labour election co-ordinator douglas alexander says:
"I am trying to work with other colleagues in cabinet to take Britain fairly through the downturn - I think that is what the British people would expect of us and that is the entire focus of our work."
OhI expect it Douglas...I wouldn't be surprised at all if Brown clings to power just for the sake of it
incidentally, they referred to an election in spring (april-may) as an 'early' election - by that logic both the past two elections have been early, not conventional at all...
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#320 tarquin
Thatcher set up the CPS to convince a sceptical public (and 'wets' in the Conservative party) of the virtues of her religion and the word of the prophets Friedman and Hayek.
The CPS is now used by the Conservative Party as their in-house thinktank and has a large policy formulation role (though I think Policy Exchange were taking over this, until the 'regeneration is pointless - everyone should move to the south' paper forced Cameron to distance himself from it).
They choose their assumptions to maximise the debt, and, as I said, pretend that there were no public pensions liabilities in 1997, and that the increase in public pensions liabilities have been due to failures of the Labour Party (rather than changing acturarial assumptions unrelated to what Labour have done).
You're not seriously suggesting this as impartial are you? Really?
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Nick,
with regard to my earlier comment about £ is it that the BBC doesn't like the £ sign because it might upset somebody. Bit like metrication, I can see us in the Euro soon.
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That's been my assessment for some time if Britain didn't fix its broken fundamentals. There's a role for government, business and media, and people. But, you have want to do something about it.
People don't like change. Putting the dampers on the Thatcher legacy was near impossible but the collapse of Reagan-Thatcher economics can help. It's an ideal opportunity to reassess and reform, and drive in a better direction.
My strategic view remains that Labour are best placed to govern, the Tories are unfit for government, and the Liberals are inoffensively useless. 'None of the above' sounds fine in theory but comes with a bunch of issues of its own.
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Sorry post 303 since a Venetian merchant book keeper created double entry bookkeeping in 1452.
To a bank a loan shark and to a national state or government debt has always been an asset.
reflect on that and you will se where the problems start.
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You are quite right in that none of the above comes with issues of its own.
The trouble is that the alternatives to the three main political parties are becoming more attractive to certain groups as each day passes.
None of the above may well let in these minority groups, we are after all suffering from the famous 'Tyranny of the Majority'.
I know let's make everybody happy shall we. What is the name for it, ah yes Utilitarianism, but don't forget the 'Harm Principle'.
As for Pareto was not one his theorys' based on the assumption that we should not make somebody better off at the expense of making somebody worse off.
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Like all politicians, George Osborne was trying to score points off the Labour party and really doesn't care whether there is a run on Sterling as long as he can promote the Tory need to seek out publicity. If he, and the Tory party, put as much effort into working with the Governement as he does in crticising it then perhaps we might see the current financial crisis being properly managed.
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Well it would seem that Sterling opened up today against the dollar.
So Osborne is talking down the market, is he?
I had the misfortune to hear an interview with Mandy this morning on R4 Today.
A dolly of an interview.
There were 31 words in the 3,000 word G20 declaration regarding fiscal stimulus. 16 words of those are prepositions, only 5 are verbs.
Not really a lot to go on, is it as justification for borrowing a whole load more money to then cut taxes?
There was no mention of Brown in the Washington Post or NY Times write up about G20 either. Mr. Sarkozy got a mention though.
So Brown made absolutely no impact whatsoever.
Oh no, no.. according to Mandy, he led the way.
When are we going to get proper reporting? The BBC seems to me that the Opposition is held to account for everything it says, yet the Government is not?
That is not journalism, it is more akin to propaganda.
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Listened to Lord mandelson on the Today programme this morning. Such a silver tongue.
Osborne was wrong because of the undermining of confidence in the market. On the question of did not see it (the recession) coming well Brown and Darling were telling us from the beginning of the year.
You could almost believe him, saying it with such confidence and authority.
Nick, haven't we missed him, I mean the World Trade Talks which failed, but hey we can talk for a few years more.
Can I give a quote from a biography of Hannah Arendt:-
'She raised the question of whether evil is radical or simply a function of banality—the tendency of ordinary people to obey orders and conform to mass opinion without critically thinking about the results of their action or inaction'.
Would anybody agree that we are in a period of serious banality.
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Nick,
Explain please. The G2O communique - http://online.wsj.com/article/SB122677642316131071.html - makes NO mention of Brown or his plans at all.
Why is this not being reported by the BBC?
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The real story that came out of the G20 is that the rest of the world is not going to continue underwriting the structural deficits in both government debt and international trade.
The effects is that the "wealth" and standard of living of western countries is under threat, we are going to have to learn to live within our means.
Times have changed economic power is moving east assisted by the bureaucracy and extra costs put upon western companies by their rapacious governments that only know how to spend.
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333 T A Griffin
I couldn't agree more. LM was rewriting history as fast as he could. "The government saw this happening at the beginning of the year" So what was the forecast in Darlings budget?
Quote from the BBC Budget report
The British economy will continue to grow. "This Budget is about equipping Britain for the times ahead...about building a fairer society," Mr Darling said.
• Britain is more resilient and more prepared to deal with global shocks.
• The UK's GDP per head has gone from the lowest in the G7 in the 1990s to second highest now.
• The British economy will this year grow from between 1.75% and 2.25%, down from 3% last year.
• "There will be no return to the inflation rates of the early 1990s," Mr Darling said.
• To provide certainty, the chancellor said he is writing to the governor of the Bank of England to keep a 2% target on inflation.
• Borrowing next year will rise to £43bn, some 2.9% of national income. It will fall to 1.3% by 2012/13.
• By 2011, investment will have increased by 500%, trebling as a share of national income.
• Public spending in the coming three years will grow by 2.2% a year.
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334 jeremyP
Excellent link, could I draw Nick's attention to the following quote from the Official Statement, not referred to by anyone in the Government Press Office (AKA the BBC)
“Root Causes of the Current Crisis
3. During a period of strong global growth, growing capital flows, and prolonged stability earlier this decade, market participants sought higher yields without an adequate appreciation of the risks and failed to exercise proper due diligence. At the same time, weak underwriting standards, unsound risk management practices, increasingly complex and opaque financial products, and consequent excessive leverage combined to create vulnerabilities in the system. Policy-makers, regulators and supervisors, in some advanced countries, did not adequately appreciate and address the risks building up in financial markets, keep pace with financial innovation, or take into account the systemic ramifications of domestic regulatory actions.
4. Major underlying factors to the current situation were, among others, inconsistent and insufficiently coordinated macroeconomic policies, inadequate structural reforms, which led to unsustainable global macroeconomic outcomes. These developments, together, contributed to excesses and ultimately resulted in severe market disruption.”
Hardly a ringing endorsement of the British Government whatever "Lord Meddlesome" says on the Today Programme.
When will the BBC indulge in proper journalism rather than reading out Government press releases?
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Now Brown's put the Japanese economy into recession - is there no country that will be untouched by the failings of this man
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Labour fans aren't going to like it but the Leader article in The Times today backs Osborne on a number of counts and gives Gordon a rap across the knuckles.
The Prime Minister is wrong to stifle legitimate debate on concerns about the economy and social care in the name of protecting the national interest
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Mr Mandelsons lies will be corroborated by the BBC, as will Darlings, Browns and Blairs.
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Maybe the market likes honesty concerning our economy - rather than Brown's obfuscation to save his career:
Well done George
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Meanwhile, and it's still early, the pound is actually up against the dollar and the Euro this morning.
So much for the knee-jerk 'talking down the economy' reflex from the Labour apologists. I'm surprised they don't knock their teeth out - their shrill complaints are so predictable.
As for poor Darling with his kicked puppy look bemoaning the fact that the Tories had broken the code of Omerta he thought he'd tied them into a few weeks ago. Shame. As I suspected at the time - just a ruse to try and tie everybody to Labour's economic catastrophe and spread the blame.
And look at the hay Labour made while the Tories were doing their bit and supporting the government- or at least not distracting them by pointing out their culpability. While the Tories suspend hostilities Gordon Brown emerges as self-proclaimed saviour of the universe and the whole economic catastrophe gets flown back in time and dumped in Lady Thatcher's lap. Labour's economic catastrophe is transformed into a failure of Thatcherism. All faithfully reported as fact by the BBC.
Wow.
Maybe all the market is looking for is some hint that anybody in government (or, in the case of Osborne, aspiring to government) has the first clue what is going on.
C'mon Brown, fess up. The truth will set you free.
Lovely catch there from #336 on the latest transmission from Lord Haw Haw. Brown and Darling knew we were entering recession at the beginning of the year. Oh yeah - nailed brilliantly by the lie that is their bit of comedy moonshine - the 2008 budget.
They really are clueless.
But we must be ever vigilant. Brown and Mandelson's Goebbels-like unfamiliarity with the truth and control of the BBC means that there are still many people who believe that this government are in no way responsible for this economic disaster and will still vote Labour.
It is a crushing indictment of the education system that anybody could even entertain voting Labour after the diabolical catastrophe they've visited on the economy. Unless it was some weird S&M thing they've got going on.
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I watched with interest the photocall at the G20. GB was stood on the back row and looking a bit lost. At the end George Bush turned and escorted Angela Merkel off the stage, whilst Gordon looked on expectantly. He shuffled his way into the pack of other 'leaders' to leave the stage, hardly acknowledging his chinese counterpart.
So - we got a good deal at that meeting then!
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CBI forecast close to 3 million unemployed in 2010
The scale of the countries problems become more apparent when you add the massive increase in people "on the sick" under Labour.
Plus - given the huge increase in government jobs under Labour - what proportion of these people are a millstone around the UK economies neck?
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NuLabor strategy is obvious. Pick on George to deflect away from the Mandelson intrigue and Brown's 12 year destruction of pensions, savings, etc, etc... the list is endless and the BBC is plaing its part in that deflection strategy. A Communist State Broadcaster doings it job!!!
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338 Balhamu
Shame for Japan.
At least their recession has signs of not being as severe as ours.
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Osborne is both right and wrong,he is also a hypocrite!
He is right to say the pound is weak against other currencies,that is a blinding fact.He is wrong to highlight it in the way he has (a) because opposition ministers simply dont as a rule do such things and (b) it is very politically nieve for him to do so and (c) it merely highlights the total lack of dirdction the Tories have on the global financial crisis.
Osborne is also a crass hypocrite-having rounded on the Chancellor a few months ago for saying the forthcoming crisis could be the worst for 60 years,saying Darling was talking Britain down,he now makes a far more specific and damaging allegation about the pound.
The key issue here though in my opinion is to do with the growing perception that Osborne is a dead duck,following weak performance over 12 months and the Deripaska affair,and that Cameron is increasingly looking like a political novice out of his depth lacking vision and coherence.
I dont support all Brown and Darling are doing,I certainly dont absolve them of blame for this crisis,in my opinion they have to take some responsibility for it,but so do Major and Thatcher for the deep rooted de-regulation and opening up of markets and procedures that are the long term reason that much was allowed to happen that should not have been alowed to happen.
Where Brown and Darling win politically though,and that is evident in opinion polls,and by just listening to the public on this matter,is that having found themselves in this mess they are leading us,and indded the world in terms of trying to find and develop progressive and positive solutions to the crisis.I suspect 99% of the public have'nt a clue if its right or wrong to do it the way they advocate but what they see is someone on our behalf trying to resolve matter and if along the way they get help with fuel bills,help with petrol,£50 a month extra in their pay,safeguards against reposession etc- then they will support it.
All Cameron and Osborne seem to come up with is a mish mash of confusion,tax cuts one day,no tax cuts the mnext,support one day,vitriolic attack the next-its looking and feeling very very desperate and juvenile-and the longer the deeper the crisis,paradoxically,the better for Brown and Darling to play on this accusation that the Tories are led by novices.
Cameron must take the decisive step,he must sack Osborne,he must bring in a big hitter,he has only 3 options but 3 decent options,Clarke,Davis or Hague-the likes of Letwin are frankly a joke-if Cameron does this he shows leadership and he shows he is serious,the longer he does'nt the longer the odds on his reaching No 10 become.
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#343
Yep. Spotted that too. Gordon Brown relegated to the back row. His role in single-handedly saving the world from global economic meltdown somehow overlooked by the world leaders.
Listening to the BBC you'd think he'd be standing front and centre and everybody would be fighting to stand next to him.
Those silly world leaders. If only they knew what we 'know' eh?
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Is that really the best you can do-using the position of Brown in a photo to determine the success or otherwise of a conference?
By all accounts,from media outlets friendly to Brown,neutral to Brown and downright hostile to Brown,he played a major part in discussions and was one of the main contributers.
If you are going to base the success on such puerile matters how do you respond to the fact that it appears that the next meeting will be held in London? - hardly the sign that the Prime Minister of the UK is irrelevant!
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I dont support all Brown and Darling are doing,I certainly dont absolve them of blame for this crisis,
What? Haven't you been paying any attention to the BBC. This is emphatically not Gordon's fault. It is a failure of Thatcherism.
in my opinion they have to take some responsibility for it,but so do Major and Thatcher for the deep rooted de-regulation and opening up of markets and procedures that are the long term reason that much was allowed to happen
That's more like it. Not Gordon Brown's fault at all. Thatcher and Major's fault.
Nice one BBC. Another viewer educated in the correct way to interprete the UK's financial catastrophe. Not the fault of this government that's been in power for over a decade. All caused by a ripple in the space-time continuum.
It's Doctor Who's recession. It's the Red Dwarf recession. It's Margaret Thatcher's recession. Certainly not Gordon Brown's.
Wow. The power of propoganda in action.
Repeat after me...War is Peace; Freedom is Slavery; Ignorance is Strength.
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re 343 - Dare I suggest Bush escorting a lady off a stage indicates some kind of old-fashioned good manners?
Had he turned and escorted Brown off the rabid right wing fantasists on blogs like this would accuse him of either being up Bush's backside or being gay - or both!...
Please lets try and be serious about a very serious issue.I know the Tories are struggling on this whilst the Government and indeed the Lib Dems make constructive argument but there really is no need to besmirch anything that does'nt come directly out of Camerons mouth or his mouth piece the Daily Mail/Evening Standard.
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Suggest no-one bothers with this BBC, Peston and Robinson NuLabor biased rubbish nor their lets try to re-invent the Brown Clown bias and go and read the proper story on the state of the economy from a true expert:
http://blogs.ft.com/maverecon/2008/11/could-the-uk-face-a-sterling-crisis-or-are-we-in-one-already/#more-363
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350- I suggest you come out of the dark room you are in - not all Labour does is wrong,not all the Tories do is right - some of us have balanced views,Brown has to take some responsibility for the worldwide crisis,but he is NOT solely to blame,Thatcher and Major have to take some responsibilty for the worldwide crisis as facets of it were born in their era-I did not totally blame them-your infantile comments simply prove the total lack of policy and cohesion in right wing thinking on this matter and the more you throw stupid comment at anyone trying to be objective on one hand and positive on the other simply illustrates a bullying nature and a lack of sensible debate on the matter.
Looking at ongoing threads the Tory angle to everything is cynisism and derogation-hardly the recepie for a progressive and positive Government in waiting - and I would suggest the majority of British people are beginning to see this.
Your hatred of the BBC also masks the fact that Sky often report exactly the same as BBC,ITN even despite their ownership - yet are totally ignored.
Either say something balance or just comment "refer to my earleir postings" as we are all getting sick of this pathetic negative Tory led spin.
I was once a Tory voter,in the days of McLeod and Heath,when I had an excellent Tory MP by the name of Fergus Montgomery,oh how I an others yearn that the Tory Party could return to the values and intellegence of men like that rather than the sordid yuppie haven it has become.
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Nick, the bias of the BBC reaches new heights. The G20 communique DID NOT support Gordy's plea for international fiscal stimuli so why do you report it thus? I'm no apologist for Cameron but the bias of the BBC in recent months has been quite staggering. The savviest political commentator in the UK is the political editor of the SUN who said last night that the much greater scandal of the summer was Mandy and Deripaska not Osborne. Let's face it, the Shadow Chancellor in the UK is a total irrelevance outside of the Westminster bubble. You should get out of your bubble and start reporting honestly instead of regurgitating the spin and lies of Mandy, Gordy and Ally. So let's start with an honest tally of the real level of debt in the UK including PFI, Network Rail, the Banks and public sector pensions. No wonder sterling has fallen like a brick! If the BBC cannot give an honest representation of the facts it's time for you and your fellow hacks to look for new jobs. It's time to pull the plug on the licence fee. That's the first quango that needs to be axed!
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#347 Jonathan
Just pointing out that this uniquely British crisis - caused entirely by Irresponsibility Brown and Government borrowing that is too high - is starting to infect other countries too (indeed, Japan seems to have been infected by it before we saw the worse symptoms, and have fallen harder so far).
This dreadful man has a lot to answer to. It seems he has caused a global recession.
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and the more you throw stupid comment at anyone trying to be objective on one hand
You're not doing a very good job of pretending to be objective though are you. Your nod to Gordon Brown's culpability was just a poor camouflage for repeating the Mandelson/Brown falsehood that this is a time-warp recession. An artefact of quantum wave theory that has travelled twenty years through time and space to manifest itself as a Tory recession.
and positive on the other simply illustrates a bullying nature and a lack of sensible debate on the matter.
You started it all with this silly 'Failure of Thatcherism' headline. If Labour and the BBC are simply going to invent the news and the facts then they can't spit the dummy out if the rest of us mock them mercilessly for it.
Shame if you don't like it but you can't expect people to be lied to on this scale and just sit through it.
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This is what was actually said about a fiscal stimlus
QUESTIONER: What countries do you think should have it?
MR. STRAUSS-KAHN: As I've just told you, I'm not going to make an announcement in place of the countries, but I want to answer your question candidly. Everywhere where it's possible. Everywhere were you have some room concerning debt sustainability. Everywhere where inflation is low enough not to risk having some kind of return of inflation, this effort has to be made.
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Andy,
1. It is the job of opposition to highlight poor government policy, Osborne is doing his job.
Ken Clarke, a politician since '79 said there is no 'agreement' not to talk the economy down.
If I remember right, every Labour Chancellor from '79 to '90 said for all the privatised industries that they would re-nationalise them in a bid to impact their floatation.
2. Darling's astonishing statement on the economy led to Osborne saying he'd "let the cat out of the bag".
http://news.bbc.co.uk/1/hi/business/7589739.stm
Osborne had been highlighted how badly placed we were for months before this admission.
An admission actually made to distance Darling from Brown at his weakest.
Osborne didn't accuse him of running down the economy, more of trying to save his own neck.
3. Thatcher and Major's deregulation caused this crisis?
Please, do keep up at the back.
Brown reformed the BoE and created the FSA in 1997.
http://archive.treasury.gov.uk/press/1997/p49_97.html
I draw your attention to paragraph 18.
The FSA didn't do it's job. As for early warning, how many warnings count from the IMF and OECD?
Brown has had many, many warnings as far back as 2004. He ignored them all.
4. Brown and Darling are listening to the public?
Really? So they push through VED and fuel duty only to back down at the 11th hour?
What about the 10p tax fiasco? Faced with a massive rebellion, they back down.
Faced with monumental borrowing, a public unhappy with the level of debts, they keep borrowing?
Faced with falling levels of disposable income and negative savings rates, what do Brown and Darling do.
Tax us more!
5. Cameron sacking Osborne. Why? The biggest thorn in Labour's side is a Shadow Chancellor that gets right under Brown & Darling's nose so much he has to bring back Mandelson.
A man that Brown utterly despises?
Please... try it elsewhere, they might, just might believe you.
6. Conflicting Tory tax plans.
What is conflicting about:
Increasing IHT thresholds.
Cutting corporation taxes for all businesses.
Freezing council tax.
Deferred VAT for small business.
7. A non-partisan approach to the crisis?
Really? So Cameron offers his support, the next minute Brown (ably assisted by the BBC) blames Thatcher for it and everyone on the Tory side except himself.
The bank re-capitalisation plan was recommended by the Tories early in the crisis based on the Swedish banking recovery of the early 90's and modernised by Standard Chartered money men.
Lady Vadera tipped off Brown using former contacts at Standard Chartered and suddenly it's Brown's plan, Brown saving the banks and the world.
No discussion, no credit where credit is due.
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I think the point to remember about this current economic global downturn is that all of us are likely to be affected in some way, whatever party politics we subscribe to.
The pound is now at a more realistic exchange rate with the dollar than a few months ago. One reason for the strength of the dollar is... according to something I heard on the radio... that it was taken as the marker currency after the 1944 summit... and therefore in the current climate more investors are going for the dollar.
Since the entire population in the UK depend on the pound for our day to day transactions, I would have thought it encumbant on all those in power, government and all opposition parties to do and say all they can to support confidence in it and the UK as a place to invest.
The only alternative, in my view, is to support changing our currency to the euro.
It is, in my view, insane to knock our currency at present, where the perceptions of the economic climate change daily and responses to it from the two of the main political parties seem to be equally changeable.
If the Conservatives really wanted to win votes they would surely have the sense to discuss ways for the UK to come through the "crisis". But, like many of the bloggers here, their main aim seems to be to discredit Gordon Brown.
Even if the present Government took Conservative advice and ideas, surely it would be perceived that this particular opposition party was likely to be the one to back in a future election.
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This dreadful man has a lot to answer to. It seems he has caused a global recession.
Say it ain't so.
Next you'll be telling me that when the global economy was going great guns and countries all over the world were in a growth phase (some of them even getting their fiscal situation under control) he was claiming sole credit for the UK's economy 'growing'.
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356
so the wholescale privatisation of UK utilities was a great success was it - has it not let UK Governemt powerless to act on behalf of the customer and/or to impact in terms of price control?
the Tory right to buy scheme-great 100% success or flawed somewhat in that it took away huge tranches of UK housing stock at a time when first time buyer demand was stifled by a lack of investment at the time due to monetarist policies in the development of the housing infrastructure.
deregulation under Thatcher and the opening up of London as a major market has all been positive and rosy,I dont think so?
So you are saying anyone who tries to bring even a modicum of balance to any debate,against your assertion that everything Tory is good,everything not Tory is bad , is either deluded or some kind of BBC/Mandy conspirator.
I have factually voted Tory in over 40% of the times I have voted,I am not alone in being a Midlander who is quickly turning against a novice yuppie Southern based elite currently destroying the Tory Party as a credible opposition - and I have to say by its supporters in some areas who bring nothing but contempt on it by having the political nievity to see nothing through anything but rabid right wing blue sunglasses - The Tory Party will NEVER WIN AN ELECTION on such a negative cynical and depressive ticket
WISE UP!
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ONCE AGAIN NO SURPRISE TO BE CENSORED.
The responsibilty for Sterlings plight rests in Downing Street.
George Osborne merely told the truth.
TRUTH SEEMS TO BE A SIN?
Mandleson has no credibility for all the obvious reasons.
Why the BBC pander to him is beyond me other than some bizarre polictical correctness policy.
Perhaps the BBC could enlighten us all?
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Yes, our predicament is Browns Fault
If he hadn't spent a decade destroying the greater part of the wealth that the private sector were creating, then there would be plenty of spare for us to 'live of the fat of the land' during any recession.
However, because he has reduced many of us to living hand-to-mouth, difficult times are ahead and yes, this is browns fault.
p.s. My new business is a doing 'not without my consent' tatoos.... whos first?
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358
1- I have heard Clarke on several occasions recently publically congratulate Brown for certain aspects of his handling of the crisis
2- Osborne claiming he did'nt know there was a convention that opposition politicians did'nt talk the economy day is frankly deceitful when he had asccused Darling of precisely the same thisng less than 3 months ago!
3- I was referring to the "Big Bang" of deregulation circa 1987 - far more substantive piece of legislature than anything Blair or Brown did!
4- It is a fact that Tax Revenue as a proportion of average earnings are still LOWER than that inherited in 1997
5- I'm sorry,you cant have a political juvenile in a senior position just because he gets under the nose of the Prime Minister - by that basis Dennis Skinner would have held every Office of State over the past 3 decades GOD FORBID!
6 Tory thinking is muddled,there is no doubt even voiced by its own Backbenchers that it is piecemeal,reactionary and muddled
7 As a former resident of Sweden,I dont think the Tory Party can claim any credit for fiscal or indeed Social Policies founded under Palme and continued under left and centre thinking parties for the past 2 decades,I think you will find the Lib Dems and Labour fiscal thinking has always been closer to Scandinavian thinking than the Tories - I doubt anyone has any "new ideas"
However,my utmost repect for at least joining in some constructive and interesting debate,rather than as some do,simply attack and ridicule because someone dares to say anything other than defame and attack the BBC and Labour -
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Nick,
I know that this may seem a bizarre link but surely everybody else can see the link between Strictly Come Dancing and politics.
Why are people voting for John Sargent when he is the most incompetent dancer the world has ever seen?
Why do people not like Craig when he is the only true realist on the judges panel.
Why do people not see through the obvious manipulation by John and his partner of the voting public.
Why do the voters not see through the obvious attraction of keeping such a glamourous woman as John's partner on the show.
As for Bruce Forsyth, is he not becoming the publics favourite joke bungler, why do the public find him funny, when he isn't, his timing is awful and he sometimes gets the words wrong. He is also a terrible flirt.
What I think would be interesting if we replace the contestants and judges with the politicians, even Mandelson seems to be waiting for the call!
Finally, if the voting public are anything like those voting for John Sargent, and these people have votes in the spring general election the abandon hope, I mean, these are the same people. Gosh what an appalling thought.
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#361
so the wholescale privatisation of UK utilities was a great success was it
Yes.
- has it not let UK Governemt powerless to act on behalf of the customer and/or to impact in terms of price control?
If that's what you think then take it up with this Labour government. They've been in power for over a decade.
deregulation under Thatcher and the opening up of London as a major market has all been positive and rosy,I dont think so?
It was working fine in 1997. If this Labour government didn't like it they could have introduced regulation and legislation. Nobody could stop them - they had a massive majority. If memory serves it was this Labour government that actually removed what regulation and oversight there was. Regulation and oversight that had prevented a bank-run for over 100 years.
I can see why the Labour apologists would like to keep the debate in the past. It reminds them of their halcyon days when they were the government-in-waiting post 1992. Thing is chaps, you remember that John Major and his bunch of talentless, arrogant incompetents that we were all so desperate to get rid of? That's you that is.
You remember how sick we all were of having Labour's utter incompetence from the 1970's thrown back in our face every time anybody piped up about the economy? That's you that is.
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#361
The privatisation of the utilities was coupled with consumer safeguards, as you would expect with the privatisation of monopolies.
The Government is powerless to act because it chooses to be so.
Deregulation of financial services was accompanied by the strengthening of specialist regulatory bodies. They were dismantled by New Labour and the super-regulator, the FSA was created. Control over Banking supervision was moved by the Government from the Bank of England to the FSA.
The reason why the balance sheets of financial services businesses were loaded with toxic assets was because either the FSA didn't understand what the banks were doing or didn't want to intervene. In other words, did the FSA ignore its own rule book?
The Government could have used its enforcement powers (of which there are plenty) to minimise the effects of the current crisis. It has done nothing of the sort.
In fact, a big thing was made by the FSA back in 2001 of senior management responsibility in firms which are regulated, although nothing has been heard of it in relation to the current crisis.
It's interesting to note you're another one of these people who claim to be an ex Tory voter. Such an assertion adds nothing to the arguments; in point of fact, I always think it makes the writer look a little insincere.
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Surely people can see what is happening...
Since September, LABOUR have re-united and now they firmly believe they can win the next election.
They even had John Reid giving an interview; for the first time in over a year (Andrew Marr - Sunday) in which he also praised GB...
This is a concerted effort to win over the population ahead of a May election...
Their planned tax cuts will be aimed at the lower earners - to buy their votes.
But their plan won't work..
I work closely with the building industry. This has been decimated...
I have colleagues who work in medium sized manufacturing – redundancies are being made every day…
I have friends who work as Estate Agents – or rather did…
My son works for the motor industry – their sales are down 80%...
So, GB is offering Tax cuts – which will really be amendments to the tax credit system –
THIS JUST WON’T WORK…
Tax cuts are no good if you HAVEN’T GOT A JOB...
It was both the Financial Services Industry and the House Building Sector that drove the economy over the past decade.
It is these that need a major stimulation but that is not going to happen quickly – or at all…
I urge DC and Co to DO NOTHING - SAY NOTHING – OFFER NOTHING…
Let GB and his gang do it’s worse.
Let them plan for a May election.
Their core voters will not vote for them if they have been unemployed for 6 months or more.
The sooner it is done – the sooner it will be over.
(Yes, I know I am shouting – but I am angry)
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#364.
I think you hit the nail on the head in your own answer.
You don't like Osborne because he is younger than you.
That's no credible basis for your assertion he should go.
You can stick to your assertions if you like, I'll stick to the facts, which are at odds with your assertions.
Facts I have provided plenty of evidence are contrary to your own 'views'.
Of course, you are perfectly entitled to hold your views; that doesn't automatically make you right.
Also you assert yourself as
"I am not alone in being a Midlander who is quickly turning against a novice yuppie Southern based elite currently destroying the Tory Party as a credible opposition."
If you bandy insults based on no more than an accident of birth, how do you expect to be taken seriously?
Lastly, also as a refuge Midlander myself, memories of the Secretary of State for Industry leaving MG Rover high and dry and prematurely announcing its insolvency. I can't wait for this incompetent government to be booted out as they are no friend of business.
Still, they did manage to finish what they started in the 1970s.
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#360 Mr U
So you don't agree with the proposition that Brown has caused a global recession?
That's a start.
I think the truth is that there was much consensus in macroeconomic policy 1997-2008, except the Conservatives would have liked:
* Far more deregulation in financial services and other industries
* Slightly lower tax and spending(maybe 2-3% GDP lower), funded by cutting welfare programmes (e.g. Sure Start was a waste of money)
* Shift in the tax burden towards the lower paid, making the tax system a bit less progressive
* Far less investment in the public services (should have paid back the national debt instead)
* No minimum wage (though they may have changed their mind on that now)
* (with hindsight) Interest rates used to prick asset bubbles rather than manage the real economy
The Conservatives also think this crisis should have been handled differently:
* Bribe the private sector to take Northern Rock off our hands (by giving them a vast subsidised loan to do so)
* Interest rates used to manage the exchange rate at 2 dollars per pound, rather than to target inflation and combat recession (why have we had a cut in interest rates now when we should be protecting the exchange rate?)
* Cut borrowing and government spending as we enter recession, reduce stamp duty to prop up shares, reduce tax on the well-off (who will save a tax decrease) rather than the poor (who will spend a tax decrease)
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Little Georgie Osbourne must be flattered - an opposition politician with enough international political clout to cause a run on sterling by an ill-placed word!!
Anyone would think that The PM and Chancellor were looking for a scape goat if and when the pigeons come home to roost because of their policies!
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#351
Brown looked for acknowledgement from Bush. He didn't get any. Now this could be more to do with the other damage Brown has done to our relations with the US, but if he is stating himself as the master of this economic package then he would have been in escorted magnanimously, along with Merkel. I think you are seeing chivalry in Bush that doesn't exist.
Secondly a lot of the other world media don't see it as Brown rescuing the world at all. See Nick's other blog about the Wall Street Journal, plus some French minister suggested Brown was playing politics to cast himself in a stronger role than he is.
Why would it be suggest Brown is gay for being acknowledged off the stage, or even having a better position on it? You need to grow up a little methinks.
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For those interested, a long and detailed but fascinating article in the FT today about the possibility of a sterling and other crises. See link below, by Willem Buiter, ex MPC member.
Basically, whatever GB believes, Britain cannot simply borrow for ever and ever without at some point paying the borrowings back. The government borrows from the international money markets/investors: just as happened to the banks, if the UK state comes to be regarded as unable to repay its debts, the moneymarkets/int'l investors will simply refuse to lend, buy UK government debt.
This would be a major, major crisis: the government could potentially simply run out of cash to pay its bills. Result would be massive recession, very high taxes to restore the government's finances and huge public spending cuts. Although an IMF loan would no doubt provide some temporary relief, it would take at least a decade to recover. Remember 1976?
Given that many economic experts believe this scenario is possible if Brown over-borrows - and sterling's recent plummet shows that the markets are already flashing red warning lights of concern - it is surely correct for the Opposition to provide at least a warning and force some public debate. Branding that as party political is pathetic.
Too much debt got the UK into the mess we're in today; the government making the problem worse by borrowing yet more scares the hell out of me.
And remember, our national debt as calculated/spun by the government excludes any of the banking liabilities recently taken on, public pension liabilities, not to mention PFI. The 'true' picture of the UK's public finances is far worse than the government's claims: the markets have rumbled this which is why sterling has fallen so dramatically recently.
http://blogs.ft.com/maverecon/2008/11/could-the-uk-face-a-sterling-crisis-or-are-we-in-one-already/
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#369
I particularly liked this one....
except the Conservatives would have liked:
.....
* Shift in the tax burden towards the lower paid, making the tax system a bit less progressive
10p tax debacle anybody?
Your assertions of what the Tories would and wouldn't have done are pure conjecture. Whereas Labour's borrow and squander recession is a fact.
Although, thanks to the power of the BBC and the tale-weaving skills of Hans Christian Mandelson it appears to have become a Tory recession, a failure of Thatcherism no less. Astonishing media narrative that one. Isn't it though.
I suppose if one is a Labour apologist then any liberty with the truth is acceptable but I have to hope from the bottom of my heart that the UK electorate are not so stupid as to fall for this recession being all Thatcher's fault. I have to hope that the Labour blitzkrieg of synchronous double-think that is evident on here is not widespread in the land. Although I have no illusions about the power of the BBC to spread such propoganda effectively and the damage is done to a certain extent.
The day when the BBC had only to report the facts - 'The government has stepped in to prop up the banks - finally' they instead ran a full-on party political broadcast for Gordon Brown. Turns out that the bank's failure wasn't a direct result of Gordon Brown's incompetent economic regulation or his failed tri-partite system