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The rising taxpayer burden

Robert Peston | 09:35 UK time, Tuesday, 11 November 2008

For me, the most interesting story of the past 24 hours is that VW, the stressed German carmaker, is trying to raise €2.8bn (£2.2bn) from the European Central Bank.

It plans to raise cash from the ECB in exchange for €2.8bn of securities backed by car loans.

In effect, the ECB - and ultimately taxpayers in the eurozone - would be financing purchases of automobiles.

Crikey, is all that comes to mind.

What next?

M&S logoPerhaps Marks & Spencer will be able to dump its unsold jumpers and knickers on the Bank of England, in exchange for a bit of useful short-term credit (the contraction in retail sales for October reported today by the British Retail Consortium is the first fall that the trade body has ever reported that wasn't caused by special factors, such as the timing of public holidays).

Or perhaps the Bank of England will allow Taylor Wimpey - which reported pretty dire results again today - to swap its unsold houses and land for some Treasury bills via a re-worked special liquidity scheme.

If only the Bank of England and taxpayers would refinance Taylor Wimpey's £1.9bn of net debt, the battered housebuilder wouldn't have to make veiled threats to its banks and bondholders that administration under insolvency procedures is an option, if the lenders don't agree to make the terms of their loans less onerous.

I don't expect the Bank to become so liberal in the provision of loans and liquidity, but I am not being wholly flippant - since a great deal of the dire economic straits we find ourselves in stems from the contraction of credit from normal commercial sources.

And, because of that, expectations are rising by the day about what we as taxpayers can provide in incremental loans to limit the pain.

As you'll recall, around the world taxpayers have provided a staggering £5,000bn of support for ailing banks. And I haven't included in that the astonishing funding provided by the US authorities, the US Treasury and the Federal Reserve, to AIG, Fannie Mae and Freddie Mac.

There's literally no point in sharing with you the losses announced yesterday by AIG, the radioactive insurer, and Fannie Mae, the mortgage provider. Those losses run to so many billions of dollars that they defy comprehension.

In a way, therefore, I see the UK's "whose-tax-cuts-will-be-biggest?" competition between the political parties as a bit of a sideshow.

Doling out a few extra pounds to most of us would probably be no bad thing, if we were to spend it (hoarding it would do the economy little immediate good - but there is quite a risk that we would hoard it).

But it's a bit like a blood transfusion for an ailing patient. It'll provide a bit of extra energy, but it doesn't deal with the underlying cause of the disease - which in this case is a global contraction of lending.

Comments

Page 1 of 4

  • Comment number 1.

    The transfer of risk from banks and corporations to the taxpayer means that the next leg of the debt crisis will hit governments, who will have trouble financing their huge budget deficits and refinancing existing loans. Current bailouts may cause the biggest crash of all - state insolvency.

  • Comment number 2.

    Securitising every kind of assets however nebulous they were was a major factor in the credit crunch.Is 2.8 bn.their total car loan book or just the toxic ones?Hope Trichet kicks it into touch!

  • Comment number 3.

    I thought the taxpayer lending to banks was supposed to enable banks to then lend to the widereconomy? If the taxpayer is supporting the wiser economy too, then there isn't really an economy, outside state controlled funding?

    I don't want to be in the position of paying for my shopping twice, through tax and my spending!?

    We have reached a point where, whatever the pain, the weakest in any industry must be allowed to fail.

    And yes, tax cuts are a sideshow. Giving us less back than the effective rate of inflation and encouraging us to spend more is ridiculous! We would be worse off -

  • Comment number 4.

    Dear Robert

    This Government and the countries politicians, had better start getting this crisis sorted, it is already in a spiral down wards, and it is going to be worse than the great depression of 1929,
    This is going to end in Tears,

  • Comment number 5.

    Robert, you know full well that the Government will pump and buy anything it needs to to prevent any major corporation going bust.

    Too big to fail? It would be like one of those fireworks that expolses in all directions if even one of the corporations fold.

    Only problem is we are getting very close to a corporation that they will have no choice other than to let go

    Implotion Day

  • Comment number 6.

    Yes, Robert, the announcements to come (over the next 12 - 36 months perhaps?) from a whole range of players are going to make a very long list indeed.

    The numbers coming out of AIG are truly shocking, with a second 'tranche' of losses just having been admitted. However, that is how bad news normally comes out - in stages, as the executives in charge cannot bear to admit how awful it is, and feel they need the cover of others announcing similar bad news, before they can tell the whole story. What guesses for the number of further instalments from AIG? And the cumulative total, before it is finished?......

    In respect of central banks starting to support companies directly.... I imagine this is the point where the market will really punish a government..... if it starts trying to channel direct support to companies.... in terms of the cost of its debt.

  • Comment number 7.

    What you're commenting here and previous blog RP on is the wind-down of all the Western economies and the shift of wealth and influence to China.

    The longer Brown kids himself he can fix anything now the worse it's gonna be. At this rate we'll all end up living in state housing on state handouts. It's going to be like Stalinist Russia.

    Panic bailout of banks. Panic reduction of interest rates. Sudden realisation that the 'real economy' is going down the plughole and - panic again - all running round like the White Rabbit in Alice in Wonderland. Tax cuts, more borrowing etc.

    None of this will work, the forces arraigned against them are too powerful now.


    GC

  • Comment number 8.

    Easy folks,

    It's just a ploy to suck more hedge funds into a trap :o)

    Didn't I read in the last 2 weeks how VW said they were bucking the trend and selling more cars than ever? Was that true, and if it was, were they toxic sales?

    The trouble with roller coaster rides is that they are too fast - you don't have time to savour the moments, come to terms with one twist before you are into the next. Hmmm, can't seem to find the emergency stop button on this one. Hey ho!

  • Comment number 9.

    The Spanish tax payer will be happy with Santander when they start repatriating their record profits, helped by the juicy bits from Bradford and Bingley and Alliance and Leicester.

    Got on the cheap from us and our Pension Funds !

    Of course they have just had to go cap in hand to their SHareholders........

    And then the European Central Bank.......

    So which Gov't will admit to be at the Printing presses first ?

    Inflation over ten percent likely to go much higher.

    Standards of living on a long term decline...

    And Pension Funds being read the last rites...

    It is humbling to think how many people have died so that we can live like this.

  • Comment number 10.

    Is it time to buy Santander shares yet ?

    Or will they fall further ?

  • Comment number 11.

    Politicians are the Master animals of avoiding pain, particularly political pain where they are forced to take the blame.

    Brown only has the goal of re-election in time, to give him the legitimacy of being an elected Prime Minister.

    Policies of fiscal control, prudent borrowing, long term macro economic planning, have all been thrown to the wind.

    Society is taling now in Billions and Trillions here and there, as this financial and economic tsunami grinds relentlessy on.

    Western standards of living reached their peak in 2008 and will now deteriorate, year on your for the majority within these so called democracies. Politicians do not have either the courage or the language to bring these truths to the Public Domain. We all know that the debt party is well and truly over and life will not be the same again. However, this truth is the 5 ton elephant standing in the corner, we see it, but so long as it does not roar or trumpet, we can ingore it for a bit longer

    Maybe until after Christmas when Obamo takes the reigns in the USA?

  • Comment number 12.

    RE My #3

    "Wiser economy" - if only! I meant wider, obviously!

    I'm quite proud of "widereconomy" though, I might copywrite that!

    Have you ever noticed how everyone's grammar is worse in the first few posts as we all scramble to be first on the board... lol!

  • Comment number 13.

    I think the wait is almost over.

  • Comment number 14.

    So now we know Gordon Brown is going to cut taxes. He has been in charge since 1997 and every year he has found a new way to tax us more than the year before and now he is going to do an about face and start cutting. Wow!

    David C and Cleggy are up for it as well, whatever next.

    The trouble is they will not do it properly. Gordon will give it away to everyone who might vote for him and it will just get wasted.

    David C will give it to companies and business. Cuts in corporation tax are no good if you are loosing shed loads of money.Mind you it might stop some of them relocating.

    Cleggy will take from the rich and give to the poor. The snag is the rich will leave.

    Of course tax cuts are necessary but they have to have an objective.It is no good cutting taxes if all it does is send everyone off to Bluewater for a spend up.

    We need to do two things.

    1)Encourage saving.

    2)Invest in usefull and revenue producing projects.

    The first can be achieved by producing, easy to invest, tax free,inflation beating savings products for the man in the street.Do not lock him in past his visual horizon. Give the option of withdrawal any time after a year. Let the public help produce the loans that we need to survive.

    The second should be directed at the most obvious target there is, fossil energy replacement.Give EVERYONE the incentive to invest in renewable technology to allow us to replace as much fossil fuel as possible.

    This will mean that the uptake will be quick, tax breaks for solar panels,feed in tarrifs for heat and power,easy to access capital grants for infrastructure.Currently you need a degree in accounting to fill in the forms. HMG do not really want you to have the money, they just want to be able to say it is there.

    Do this and you will create a crusade that everyone can get behind and be part of.Give money to large corporations and you will just be giving a present to overseas shareholders and cause resentment at home.

    Manufacturing for these products will be encouraged,fossil fuel imports will be reduced and tax benefits will feed into the economy.

    You will make the environmentalists happy, the individuals happy,the bankers happy and you will reduce your dependence on dubious overseas institutions. What more do you want!

    Remember that a billion grains of sand make a sand dune.Blow on it gently and you can move mountains.

  • Comment number 15.

    We should have let the banks go to the wall.

    No bank = no one to pay the mortgage back to = no debt

    That would have saved the country Billions which we could have used to get the poor bankers into some real work at starbucks

  • Comment number 16.

    It is all about trust. With no trust there is no business. The government(s) and the banks have destroyed trust and it will not come back quickly. Big ticket items with their big commitments will not sell well. There is a limit to what taxpayer money can be made available and therefore where it should go.

  • Comment number 17.

    It's time the government set up a new co-op bank to lend our money back to us at sensible rates and terms and in competition with existing banks. The money would get back into circulation and do some good rather than being used to repair bankrupt bank's balance sheets.

  • Comment number 18.

    "...The underlying cause of the disease - which in this case is a global contraction of lending". I'm afraid I have to disagree with that. The underlying causes are the huge growth in the gap between rich and poor and the offshoring of most of our real wealth creation to the Far East. These in turn have lead to the excessive debts that has built up in this country and others.

    The lowest 40% of the UK population is apparently earning less that they are spending, and thus getting more and more in debt. It's easy to accuse them of being profligate, but real disposable incomes for most are actually lower in real terms than they were decades ago. In the US the situation is even worse with real absolute incomes lower than in the Seventies.

    The answer is not to get the banks lending again as before. The answer is to immediately reverse the long-term transfer of wealth and income from poor to rich that started under Thatcher and has continued under the current government.

    The problem is to transfer money from the rich (who just save it and cause asset bubbles) to those on low/middle incomes who are much more likely to spend it and keep the economy afloat. Lending at interest fixes up the problem short-term but makes it worse long term as debts build up. Permanent transfer of wealth and income is the only way to fix it long-term.

  • Comment number 19.

    Deadly precedent, where do you stop with the provision of cheaper credit to companies struggling with debt restructuring. I'm sure that 1000s of small businesses would give their right arm for access to reasonable credit right now.
    This cannot be allowed to happen, Rover needed a fraction of this to keep it afloat. If VW need this bailout then if they cannot be allowed to go into administration for reasons of national interest then the German governement needs to make the decision on whether they want to part or fully nationalise the company.
    The ECB should look at this and review it's monetary policy, 0.5% cut in this climate looks quite a bit of an undershoot of monetary loosening. The ECB are definately behind the curve on this one, just as we were way behind the curve on the US and their very agressive monetary policy. They got the cuts in early and just look at the performance of their currency. We dithered and procrastinated and took a long summer holiday, ignored all the warning indicators and are now panicking and making the decisions that should have been taken at least a year ago.
    Lets hope that the eventual slash of the ECB rate that will inevitiably happen will give the required boost to the pound, hopefully just in time for our summer hols for those who will be able to afford a holiday next year!
    As an aside, to help the UK economy we should all be looking to buy British made or grown products. For example there is no need for anyone in the UK to not buy a British manufactured car. Here are some of your choices with UK manufactured cars, Mini, Land Rover, Nissan, Toyota, Honda, Rolls Royce, Ford, Bentley, Vaxhaul, Aston Martin, TVR, Lotus, Morgan, Bristol, MG Roadster, Ford, Jaguar. You would need to check to see which models are made in the UK, but most needs should be covered by UK supply. Coupled with a low value pound could manufacturing eventually pull us out of recession, now there's a thought.

  • Comment number 20.

    I think a lot of the doom-mongers on this blog could do their bit for the economy by getting out more!

    Go see a movie -

    I've heard Oliver Stone's "W." is very good - Two birds, one stone (sorry, no pun intended).

    Get out there and spend in the cinema. It will cheer you up and stimulate our ailing economy!

    Also, I have a couple of items available on ebay, so feel free to bid -

  • Comment number 21.

    the more they scramble and scrabble to stop the inexorable slide downwards, the more the crucial facts are hidden!

    More swirling smoke and mirrors puntuated by a cry of despair in the fog.

    Just force the transparency-declare all the nasty details. Everything will crash to the bottom, then we can see what we're truly dealing with and maybe, just maybe a coherent recovery plan can be produced and implemented.

    World wide crash is not over - all this waffle does is hide the facts. Debt addiction at all levels has to stop!

    I had a phone call from a young relative who wanted me to lend them £800 to go on holiday! I said no, and was speechless at their cheek! It's just typical of the ethos which has caused all this!

  • Comment number 22.

    #11

    In the UK we have never elected our PM, so in this respect Brown is as elected as any former PM.

  • Comment number 23.

    Firstly, I have to take exception to the falling standards of the BBC !!

    "scope for "significant cost savings" from ***combing*** the branches and back offices of the two organisations."

    This snippet came from a BBC news article and shows a serious lack of care in the proofreading.

    Should that not be *combining* rather than *combing* ?? Relying on spellcheckers is not the best way to check grammar and context.

  • Comment number 24.

    It's an old fashioned morality tale.

    Don't lend things (money/credit/finance) which don't exist in the tangible world.

    Admit your mistake/stupidity/evil* when caught out.

    Start again.

    Try to do better next time.


    * delete as appropriate

  • Comment number 25.

    My real worry is that this is all about ensuring the banks and other financial institutions return to a pre-crunch situation as fast as possible. There is no talk coming through from this Govt about rebalancing the economy.

    In fact the anti-protectionist chatter is very obviously aimed at ensuring our borders remain open to imports to ensure the whole credit/retail thing takes off again and the only beneficiaries of that are the banks and their buddies.

  • Comment number 26.

    #12 Then there is also the uncontrollable twitches of the fingers on keyboard before the caffeine hits the right spots !!

    What we need now is *instant* instant coffee !!

  • Comment number 27.

    Robert, every time I read your blog I can't help thinking of Rory Bremner's impersonation on Silly Money (7PM on Sunday, Channel 4), I start laughing, and I can't take you seriously any more.

  • Comment number 28.

    Sasha

    New Labour brought in new legislation to recover the proceeds of crime,talk about being hoist by your own petard?

    YES WE CAN HAVE CHANGE!

    YES WE WILL!

    Mr Brown

    Ive given our warehouse staff a 500 pound winter fuel payment paid in two parts tax paid.

    So what will you do?

  • Comment number 29.

    #19 If you can afford a Rolls Royce, Bentley or a Bristol, you are not exactly short a few bob, now, are you ?? Are you, by any chance, a banker, then ??

    My nice 4 year old mid-range Honda is still quite serviceable, thank you !!

  • Comment number 30.

    I have a small business, if it fails it is down to me to sort it out .
    If my business closes no one will bail me out, I will still have to pay my overdraft ect.
    I can not understand why if when the banks fail they are bailed out, a bank that is run well will still be there when the rest are gone.
    If anyone should have been bailed out it should have been the savers in the banks.
    There are too many banks now, some will still have to go if they are not doing business.
    My local bank staff are worried about their jobs because there are so few people comming through their doors, they are doing so little business of any sort.
    The banks are sitting on the money and refuse to part with it.
    They want to hoard the money, and are stiffling any future growth in the economy.

  • Comment number 31.

    So the Europe and the States have been bailing out trillions to some institutions UNDER THE COUNTER over the last year and now doing the same with corporations OTC . This is on top of the 'authorised' bailout in the States and Europe to (the same?) institutions and corps
    .
    They cry transparency, but claim privacy to "prevent runs" on institutuions. Runs on what? there deposits or their share price, or both?

    They cannot afford a major car producer to fall because of lack of credit.

    We need to know what institutions have been bailed out privately and to what tune, ALL OF THEM? I thought the Enron saga changed the rules about reporting methods?

    When will these capitalist bigots admit that their model is crumbling and by what ever method they hide it, the world is having to re-nationalise again.

    It would be so much cheaper to allow them to go bust and nationalise the peices rather than this 'creative' way of making sure the bankers are paid off as much as they can first

    Its daylight robbery and it looks like we are just going to sit there and let it happen

  • Comment number 32.

    #27

    That rather says more about you than it does RP!

  • Comment number 33.

    "a great deal of the dire economic straits we find ourselves in stems from the contraction of credit from normal commercial sources."

    Yes, but you never seem to address the question of whether or not the contraction of credit, and the downturn in economic activity that it brings about, is a necessary retrenchment from what had become unsustainable.

    Your every article seems to be written from the premise that the pre-crunch situation was the summit of human development from which continued upward progess would have been assured if only a few "baddies" hadn't got things wrong. And that therefore when we've dealt with the baddies, and the results of their mistakes, everything will be OK again.

    What if you're wrong? What if the "baddies" did nothing other than what any other rational human would have done in their position? What if the responsibility for our predicament is not that a few people have behaved abnormally, but that we have refused to appreciate that normal behaviour is self-interested, not pro-social?

    Could it be that pre-crunch was in fact a position from which no progress can be made without radical re-structure and a sea-change in understanding?

  • Comment number 34.

    #15, actually no bank = no deposits. Someone could buy the assets and you still have to pay.

  • Comment number 35.

    Revival of credit unions is essential. In the past CU loans were made to its membership. This promoted saving and prevented property loss. The membership through delegated responsibility approved advances. However this will be a sharp lesson for the generation brought up on instant gratification. The CU system will eliminate the buyer with no assets. A hard lesson to learn. But it was a movement that ran successfully before the de-mutualisation asset strippers bore sway leading to much of the present chaos.

  • Comment number 36.

    Regarding VWs utter cheek,

    After the ECB stop laughing, surely they'll refer VW to that new chimera hedge fund called Porsche.

    Or are VW trying to unload crappy debt for a war chest to fend off a Porsche takeover?

    Can't see that flying either.

  • Comment number 37.

    The reason all "Parties" need to cut tax is because Brown has taxed the UK into oblivion.
    Just wait until his REAL borrowing is revield ? The stamp duty and VAT he collected from inflated house prices paid for by individual borrowing.
    Wait until his "Advance" tax to individuals now becomes a rebate.
    Catastrophic unemployment will take further billions out of his purse.

    He hasn`t just Bust Britain he has nuked us.

    Call me Dave wants to pay a couple of grand to get companies to take on staff ? Its CUSTOMERS companies need. Has the guy ANY life experience.

    STOP the waste BIG TIME and NOW. Even today we read another mad cap scheme to spend 35m (MILLION) on getting kids to walk ? What planet are these people from ?
    Probably the same that wants ID cards and NHS data bases.

    BROWN and his puppet MP's have to go.

  • Comment number 38.

    RE VW

    Ive always wanted a car company,considered Rover but it was too HOT TO HANDLE.

    This one could be good though?

    We could make the armoured vehicles to protect our lads that Messrs Brown & gang have been so slow to get....

    CASH UP FRONT THOUGH CREDIT NO GOOD!

  • Comment number 39.

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

  • Comment number 40.

    All of the world's taxpayers are now propping up the world economy. Therefore, we need to take a stand.
    As an accountancy trainee in the mid 70s, the tax lecturer said that only 2 "people" pay tax, you and the rest of the world. This means that if the rest of the world doesn't pay its fair share you pay too much. Sounds familiar doesn't it.
    So - all tax havens must immediately be forced out of business; that means no more Lichtenstein trusts, no more incorporated in the Cayman Islands etc. All the fiscal authorities must get together and share information.
    If you want a British passport you pay tax on your worldwide income. The penalties for tax evasion (that's theft in normal speak) must be draconian.
    I don't object to paying my fair share but so should everybody else, individuals, trusts, companies etc

  • Comment number 41.

    I went to see a bank a few weeks ago about depositing 15 million.

    They thought they had the right to interview me,what CHEEK.

    I was there to eyeball them,lesson not learnt YET.

  • Comment number 42.

    31

    Well, the small shareholders, the pension funds, the insurance policies have all been taken to the cleaners.

    The biggest bank heist in history.

    Just have to wonder where the profits ended up (from shortselling, with drawing bonds, etc).

    Follow the money, find out who benefits and you'll probably find the criminals or their friends......

    And, of course the Tax payer has lost out, and with Inflation growing, every depositor, will also find their wealth extracted abroad.....

  • Comment number 43.

    Falling exchange rates will make whats left of the deposit wealth worthless.

    Years ago I heard someone talk about the futility of wealth, I laughed at the time, can't quite place the persons name.

    He would probably be laughing his head off now.

  • Comment number 44.

    14 - er, actually no we don't want to encourage saving - we want to encourage spending.

    Tax cuts for the wealthy tend to make them either save more - ie not consume - or invest in that delightful little bijou flat in Antibes or some new US built superyacht moored in Dubai.

    The less well off will spend it - which is the point. And if they spend it - as per the list of automobiles built in the UK provided by poster 19 - then all the better.

    Pace poster 18, tax cuts and fillips for the wealthy have produced nothing but trickle-up: driving house prices etc up. I've said before that - given the multiplier effect - its better for the economy if 10 families can each afford a family car like a Toyota Avensis (built in Burnaston, I believe) than one Master of the Universe takes home a top of the range Beemer.

    Oh and poster 17, there is a co-op bank with boringly safe banking practices and policies: it's the Co-operative Bank.

  • Comment number 45.

    Her's a thought for the day.

    A relative, concerned about the fall in his house value and the bad news he had on value of an investment bond asked me where all the money had gone to.

    The best reply I could give was that it has gone back to where the increases in value came from during the past ten years.

  • Comment number 46.

    To the poster who said i didnt understand economics.

    I wish you good day.

  • Comment number 47.

    Robert...What I find amusing most of all about the current recession is the fact that not one of the highly paid bankers, chief executives, politicians of any persuasion put any cash reserves aside for the proverbial rainy day. And now they go bleating to the state to bail them out. Funny how none of these guys like state intervention or regulation until they need bailing out by that same state.

    The second most notable feature of the current malaise affecting the global system is the fact that not one of the above highly paid, supposedly highly intelligent people saw even a glimmer of the current crisis coming, yet we are supposed to believe that these geniuses who did not spot what was going wrong are the very people we should trust to repair it !

    My dear old mum taught me to live within my means, never borrow more than I could pay back and put a few quid aside for the inevitable rainy days that come along. Of course my mum was not classed as highly intelligent by those in power, nor ever well paid by those same people but she managed to raise a family of three on a low income and teach us all sound business sense at the same time. All three of us have successful businesses that have not borrowed more than we can pay back, live within our means and have put aside cash for the rainy day. Of course my mums no Gordon Brown, be she did I suggest, offer better advice to her kids than any amount of the gentlemen above did to their shareholders.

  • Comment number 48.

    Re post 40

    I pay tax where i make the money so thats China,Czech Republic,Poland & the UK.


    Sorry but not prepared to pay double bubble!

  • Comment number 49.

    @34

    But who would buy the so called assets?
    For a start no institution has the funds to do so, add to that the fact that they all think that everyone elses asset is toxic

    If the local engineering firm goes bust cos the local council is late paying their debt do you think that the council eventually pays up to thin air, to a company that no longer exists?

    If you look at what happened to B and B the "assets" were taken into government control. the government could have chosen at that point to write that debt off and it will cost them significantly less to do it this way rather than bail out the banks giving them cash that they are sitting on.

    The correct model to recover the economy is to let the banks go to the wall, have the tax payer buy the debt and write off the UK liability of that debt and reclaim the foriegn element of the debt.

  • Comment number 50.

    Hmmm, so there is likely to be some sort of tax cut in the near future is there? Well gosh darn it, I think I'll go out and buy a new house, a new car and a flat screen tv to celebrate.

    What are the politicians drinking these days? Joe Public (or Plumber if you prefer) is scared stiff. He is not going to rush out and buy a bunch of expensive stuff on the high street just because Crash Gordon tells him it's good for the economy. No, Joe P is going to save every penny he can at the moment, (if he can find a bank that looks stable enough to hold it), and that means no holidays, no new cars, no electrical goods and no moving house - and a bigger recession ahead.

    And looking at it from another angle, tax revenues have GOT to be dropping, and fast - so cutting more taxes is going to leave government finances in even more trouble, and they'll have to borrow more and more and more....

    ...but hang on, wasn't it reckless borrowing and lending that got us into this problem in the first place?

    Oh, and ask yourself this - if you had shares in a previously profitable company and the chief executive drove it virtually into bankruptcy and racked up huge debts and losses, wouldn't you as a shareholder want him unceremoniously sacked?

    Well, as a citizen of Great Britain, you are a shareholder in this country, and Crash Gordon is the chief exec busily blaming everyone else in sight for his own shortcomings as Chancellor and PM.

  • Comment number 51.

    #22 Boilerplated wrote:
    "In the UK we have never elected our PM, so in this respect Brown is as elected as any former PM."

    Sorry, but we DO elect our PM in this country because we vote for a particular party!

    The confusion often arises because of the way the political system is supposed to work. In theory we vote for a local MP who then represents their constituents in the Common. However, if you genuinely believe that this is what actually happens, then I have some bank shares I can sell you! ;-)

    What actually, happens is the PM uses the party whips to tell the MPs how to vote. Therefore, it is the PM that calls the shots and makes all the decisions. MPs will ignore their constituents and do what the party whips tell them.

    Therefore, when you vote for a local MP, all you are effectively voting for it the party leader that will tell them what to do, which is effectively voting for the PM.

    (Furthermore, my MP, Claire Ward, said that she could not sign an Early Day Motion because she is herself a party whip - it is like we only get half an MP here in Watford!)

  • Comment number 52.

    #29

    Was your Honda British made, do you know or do you care?

    If people want change and want to address the fundamental problems of our economic woes they need to change the way they operate as well. People should lead government not government leading people.

    Because of the downturn I am having to sell one of my Bentleys at the moment, we are all having to make some sacrifices.

  • Comment number 53.

    Sat here in my little office worried to hell if I will have a job next month.

    Been reading, watching and learning still I cannot get an angle on what’s going on I doubt I am the only one.

    Even brown is showing signs its not going the way he wanted

    Flash Gordon save the worlds economy headlines a month back - so why are we needing a second stimulus (excluding interest rate cuts) is it really flash Gordon or is it Duck Dodgers.

    Second stimulus, a third, a forth and a fifth how much more can Gordon brown borrow on our behalf?

    Un funded tax cuts is it me or is this strategy a kin to hitting the big red button marked panic.

    Before you think I standing up for the Tories their strategy looks the same just in a different guise.

    All I can see is a dept that we will all have to pay back in the coming years and it will hurt a lot, if Gordon and Cameron continues down this path and ppl slavishly follow them.

    Spain’s looking mighty comfortable, nice sun nice banks, nice wo eerrr well you get my drift nice place to hord my money, tax cuts wont make me spend with such a uncertain and potentially expensive future ahead.

  • Comment number 54.

    #33, amen.

    The point is that the banks overlent and we have a wildly overvalued bubble in property.

    The country NEEDS to have a period of retrenchment, banks need to repair their balance sheet and people need to realise there are consequences to reckless borrowing.

    Oh and bankers weren't such "baddies" when they were lending to people and when Brown's "economic miracle" was p*ssing away billions on various pet projects or when they were contributing over a quarter of corporation tax returns.

  • Comment number 55.

    #49, lots of people would buy their assets. It is a question of price.

    There are plenty of funds with large war chests.

    B&B had particular bad selection of assets. Buy to let was always a scam. Witness the whinner they had here that was earning 20k a year and bought 5 properties for the price of 4 - apparently he thought this was a 25%(!!) discount - and got screwed. But even then at some price point somebody will buy, especially if the government underwrites you.

  • Comment number 56.

    What is amazing to the common person is to find out that ALL the large companies have been wallowing with large amounts of debt (used to finance! the business) and all they have done during the good years is to service i.e. pay the intereston the debt - not repay the loans, and issue dividends.

    Well now the banks want their money back - and the companies find they haven't the liquidity to do so.

    Expect substantial bankruptcies and fire-sales in the coming months. In a capitalist world let those profligates go to the wall and the prudent survive.

  • Comment number 57.

    Did anyone else see the Panorama programme 'Can't pay, won't pay' on BBC1 at 8:30 last night?

    It detailed how the banks will utilise any means to make people repay their loans. They will even instruct debt collection litigation agencies to force home sales to recover even unsecured loans/debts.

    One woman who became unemployed, through no fault of her own, was nearly forced to sell her home over repayments for a 1400 quid settee. Another guy who had been sectioned under the mental health act (and is currently in hospital) was being pursued for repayment on a 12000 quid debt through his daughter.

    The programme might as well have been a bank/government sponsored propaganda scare movie. In essence, it just summarised what will happen if you don't pay your debts to banks. How pathetic of the BBC to be party to such a blatent act of scaremongering that even Goebbels would have been proud to have produced.

    Nearly all programmes to date that have attempted to explain the causes and blame for the economic catastrophe have been tucked away at obscure times on BBC 2 (and they have not been very good either).....however, the BBC saw fit to put this programme on a prime time slot on BBC 1.

    I predict there will be civil unrest in the year ahead if this kind of pariah activity is not reigned in by the banks, especially after all that has happened following the bank bailouts and their greedy actions that are now bringing the economy to its knees.

    We continue to have to lick their backsides it would seem.

  • Comment number 58.

    #44, no we want to encourage savings. We want people to not be geared that whenever there is a slight foot on the brakes the economy collapses.

    Not to have people depending on insolvent pensions or moving from credit card to credit card.

  • Comment number 59.

    Is it just me, or is this verging on madness?

    Your story sends a message - to me, anyway. The powers that be" (presumably an unhealthy mix of politicians, bankers, regulators and CEOs) are running away with this. They're panicking. Animals that panic are generally out of control.

    This whole situation is beginning to look like a system going into positive feedback, with each reckless decision feeding the next one and making the problem much bigger and much worse, and so on. Bit like compound interest really.

    The end result of all this will not be just economic disorder (we're well on the way to that, if it's not arrived already), but social disorder too as the impact of countries, banks, businesses and, eventually, citizens running out of cash blows up in our faces.

    Can somebody tell me where this ends please?

  • Comment number 60.

    have these companies ever heard of sales.
    reduce the purchase price to consumers.
    reducing output could also save money but to try and get ecb loans in this way is an insult to the system.
    rampent capitolism in times of ecconomic downturn is foolish at least bonkers to be sure.

    may be there is something in this communism after all.

    but what the world needs is a good mix of both but thats a mad idea.

    but i do wonder if i collect all the buttons around the house i could get a loan from the old lady of thread needle street.

  • Comment number 61.

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

  • Comment number 62.

    You could say that the reduction in bank lending is a manifestation of UK Ltd beng overvalued. There therefore has to be a significant pairing back in property prices and retail spending to create a downsized economy which the banks then can address in a balanced way. Government spending - through borrowing (especially on the back of reduced revenues) is just going to make the situation worse. Particularly inflation will not fall as far and as fast as the authorities wish - and inflation could even worsen if Sterling continues to fall. The UK will just have to get used to a 5% or even 10% reduction in the standard of living. Not so bad as living standards have risen about 25% since Labour came in in 1997.

  • Comment number 63.

    Re post 48

    So you've never heard of double taxation agreements. I doubt that very much.

  • Comment number 64.

    This has all the signs of a gradually unfolding Greek tragedy. It seems that whatever Governments do, there will be those short-sighted folk who will continue to enrich themselves by manipulating the markets, and banks who will not see that failure to pass on the funds they have collected from Governments will create longer term difficulties which may be insuperable. Businesses will fail and unemployment will grow commensurately. The trouble is that "The devil finds work for idle hands", which is to say that the structures needed to maintain civilisation may very well collapse under pressure from indisciplined behaviour. This will certainly not benefit those in the business of self enrichment, who will be caught up in the ensuing anarchy the same as everyone else. There are enough archaeological sites around the world to show that civilisations really do collapse.

  • Comment number 65.

    Several posters have commented on the lack of ability on people high up to see what was coming.

    Maybe some of them did.

    Maybe some of them saw this crisis on its way and viewed it as an opportunity to settle scores with there rivals, and make a few bucks on the way.

    Of course, it could all be a planned redistribution of wealth from the middleclasses to a new aristocratic class, (probably based abroad).

    This might sound quite absurd, except the impact of this crisis is nearly entirely being felt by the Middleclasses.

    Pension Funds wiped out, small shareholders wiped out, Householders equity wiped out.

    Find out who benefits, and you might find the culprits (if any).

    Of course, the bigger the crisis, the more radical the solutions can be.

    Very unpopular legislation that would never get public support under ordinary circumstances, can in a National emergency, be introduced quite easily.

    I wonder what the powers that be see as the Next Step in their New Management Strategy !

    Or should it be New World Management Strategy..............



  • Comment number 66.

    RE post 57.

    I didnt see the program was listening to the one about the 2.65million on incapacity benefit.....

    You are right Debt Collection is very nasty.

    Anyone subject to the type of behaviour you describe MUST complain to the Police and insist they take action.

    The problem is that the poorest members of our Society are least able to deal with this type of harassment & bully boy tactics.

    As we have a PM who brags about his FISTS theres no surprise re the thug stuff

  • Comment number 67.

    Re post 63

    If you are honest & pay you will be surprised how much trouble HMG cause re tax.
    Our lot would try and get three times their due,whilst many other pay NOWT.

  • Comment number 68.

    The current round of political "solutions" all smack of a class politic, and media, that is divorced from reality. Rational people understand that the massive borrowing already in place, and the bolt on borrowing being proposed, must all be paid back, and will be paid back in tax rises and probably big interest hikes in the future. Where is the long term thinking? Who can blame anyone thinking of investing in a house for wondering how they will manage when the temporary sticking plasters fall off.

    I run a small company, trying to keep afloat, and to keep our team intact, in a storm not of our making. And no, we are not greedy, grasping despots looking for any opportunity to rip off our employees - all we want is a stable and secure future that rewards all of us for the hard work we put in. All my staff are more than capable of understanding how their finances work, and of making rational and quality decisions about their futures. It is obvious that we all have a better grasp of reality than most of our elected representatives.

    What do we want? We want the people in power to end a system of control that takes all decision making out of the hands of the people who know best - us! We want the politicans to un-hitch our country from remote decisions made either in unelected quangos or in Brussels - and return acountable democracy to our own parliament. We want empowerment and accountability to return to local democracy, and to the individual - where we know we can make a difference - instead of waiting for an unknown and unelected entity to impose their own politically motivated and rotten agenda.

    Once that is in place - and the huge, suffocating, bureaucratic mammoth is dismantled - then we can have our money back where it belongs - where it can do most good - in our own homes and communities. Then - we may all be better off - and not just in monetary terms. All it needs is less political games, more political will.

  • Comment number 69.

    Hi 44

    Of course we want people to spend but not on booze and fags. We want to spend on something that will give a positive return in the future.

    Those that cannot do this should be given a good incentive to save, and this money can then be lent to those who can spend on the desired projects.

    Simple really

  • Comment number 70.

    What on earth is wrong with some people? Seriously, we need to get out more and enjoy ourselves. Why all the doom and gloom? The dramas of the last few months have only gone to prove that nobody can truly predict what is going to happen next. I really can't help but become irritated by Peston's constant attempts to destablise people's confidence when there are possible glimmers of optimism beginning to filter through the system. And then we have pathetic comments like this from people brainwashed by Peston's rubbish:

    "This Government and the countries politicians, had better start getting this crisis sorted, it is already in a spiral down wards, and it is going to be worse than the great depression of 1929,
    This is going to end in Tears, "

    I just don't understand on what basis people are making these predictions. Haven't we learned that most people's predictions have been quickly dashed by reality? Peston was pretty adamant last Thursday that the banks would not pass on the full 1.5% BOE interest rate cut (his estimate between 0.5 and 1%). Within 24 hours he had been proved wrong just like he has been on nearly every other prediction he has made.

    Is it not time we just allowed the global economy to run its own natural course? Why predict such things as continued falls in house prices? In such cases, predictions can lead to negativity which in turn provide a catalyst to morph them into reality. Do we really wish to talk ourselves into a depression if it could otherwise be avoided?

    Honestly, get out more. Play some sport. Learn a musical instrument. Enjoy your life and stop wallowing in your own pessimissm. All this doom and gloom can only make things worse. Is that what you want?

    Some people seem to be getting high on the possibility of a depression. For God's sake, get a life.

  • Comment number 71.

    #51

    Sorry but you are wrong, in the UK we elect a local MP to represent us in Parliament, we don't even (technically) vote for a party - nothing more and noting less. No PM appearers on the ballot paper so how can anyone vote for the PM?!

    Even the Leaders of the political parties are elected (or not) as ordinary members of Parliament, who leads a political party is a party matter.

  • Comment number 72.

    RE POST 68

    Wearyworld

    You make many valid points.

    Regretfully most of the gang are into megalomania & other anti social activities. .

  • Comment number 73.

    #41

    Was Harry Enfield's Loadsamoney character based on you? It just seems barely a day goes by without you trying to wow us with stories of how much money you have on deposit, how many people you employ, etc.

    It's quite sad really.

  • Comment number 74.

    Robert and all
    Let me ask you an important stretegic question. What does Britain have to offer to the world economy now?

    People are used to live a good comfortable life and earn high salaries relative to many countries in the world. Many skills and industries (a lot of manufacturing, automobiles, engineering, etc) have deminished or partly lost. Financial and housing sectors were booming and paying a lot of taxes to the Goverment in the last years. These sectors now are in deep troubles. What will pull us out of the recession into prosperity?? What do we have to offer / sell to the world?? In 10-20 years would UK be still in G8 leading world economies??

  • Comment number 75.

    Many here talk about transparency and 'getting things out into the open' (e.g. #24)

    How about all the bloggers divulge their real identity and allegiances ;-)


    PS. You first is not an acceptable answer!

  • Comment number 76.

    Pointless offereing tax breaks without ensuring the lost revenue to government is actually injected into the economy.

    Personally a tax break would not get me spending any more than I currently do.

    However, offer me a tax break of a couple of percent in the form of vouchers which have to be spent within 60 days of issue and I could see that being more successful.

    It its a use it or lose it style of tax break I could see lots of people re-embracing consumerism (within limits)

  • Comment number 77.

    # 68 wearyworld

    On the button! Hear, hear!!

    Our political class and their systems are now so far out of kilter with the workings of ordinary people, their businesses and communities that one wonders how long it will be before the whole rotten edifice collapses?

    With each passing year I become more frustrated at the arrogance, incompetence and deceit exhibited by our politicians who seem to enter politics for what they can get, rather than what they can and should be doing for their electorates.

    The system has been corrupted by the so-called professionalisation of politics and we're all the worse for it.

  • Comment number 78.

    It is obvious that the monetary system is broken. Instead of bailing out the bankers who were reckless with taxpayers money a revolution in how we manage the worlds economy is required. We can no longer afford a system that rewards greed and creates ultra rich oligarchs that use people as disposable assets and despots who hide their money in Swiss banks while people starve. This system has led to industrial jobs being transported around the world to countries with lots of cheap, pliable labor leaving the deserted countries unable to pay their way.
    How the next British Government can repair the damage, let alone jump start the economy is hard to see given that the chickens have come home to roost with China's capacity for growth outstripping the rest of the worlds ability to pay for goods. The one good thing about this crisis is that it leaves room for change, a single world currency with 1 unit in the USA being the same as 1 unit in China, as one unit in Africa.
    We have to create work that will allow each country to be self sufficient in employment while sharing the planets raw materials; and increasing use of natural renewable sources of energy to try and end the stop go energy of oil production.
    Have we a political party brave enough?

  • Comment number 79.

    VitaliG post 74

    BANANA REPUBLIC,without the BANANAS springs to mind,guess we will still have politicians that are BANANAS though.

    All a bit sad.

  • Comment number 80.

    Is it then a question of which industries are next in the queue to be (re)nationalised? The financial sector first (tick), now flagship industries, major brands, national carriers?

    There are precedents in Europe now. Can one imagine Gordon Brown re-gaining grassroots affection by thinking the politically unthinkable? If he needed to?

  • Comment number 81.

    15% VAT asp....job done!

  • Comment number 82.

    Last Friday afternoon after landing at Birmingham Airport I drove down to Bristol. I was shattered at finding so little traffic on the M5, a main artery for Britain. There were so few trucks. Few trucks means few goods moved, means few good being bought and sold. THIS to me is THE bad sign to have. The rest is just windbags hot air or the writings of poets of finance.

  • Comment number 83.

    Re post 73 sjpepper

    Whats sad is the state UK PLC is in,i am as frustrated as hell.

    So many of the things we all need to have trust in are broken.

    No i am no Mr Enfield,Ive worked my guts out to make a decent life ,if you dont like it i apologise.

    I want to see prosperity all round not the MISERY which is about to be unleashed re unemployment,people getting chucked out of their houses etc etc

  • Comment number 84.

    Wearyworld on 68 try reading Freedom or Equality on Type Pad

    http://johns-blog.typepad.com/johns_weblog/page/2/



  • Comment number 85.

    It seems that we - meaning government as well as individuals - still haven't learned the core lesson of the credit crunch - you cannot go on forever spending more than your income, and borrowing the difference on the assumption that the debt will never have to be repaid.

    Applying this thought to government implies that tax cuts should not be funded out of increased borrowing. Those who describe this policy as 'Keynesian' are profoundly mistaken, as Keynes believed in neutrality through the cycle - accumulating surpluses in the good times and using the accumulated savings to pump-prime the economy during downturns.

    We've been running a fiscal deficit at all stages of the economic cycle - that is to say, living beyond our means. Irresponsible government, in a nutshell.

    Higher borrowing is inevitable in the near term, but government needs to reassure markets by showing how the debt will be repaid if/when the economy recovers. There needs to be plans to increase taxes, and/or cut government spending, should the economy recover.

    Likewise, we should be committed to raising interest rates at the first sight of return of the asset pricing bubble. The BoE's mandate should be extended to include raising rates to choke off house price surges in the future.

    I fear that these lessons are just too inconvenient. The government's call for banks to lend 'at 2007 levels' shows a complete divorce from reality. If we get out of this mess, we should make sure that the costly lessons of irresponsibility do not need to be re-learned yet again in the future.

  • Comment number 86.

    #62 EdmundHusserl

    "You could say that the reduction in bank lending is a manifestation of UK Ltd beng overvalued. There therefore has to be a significant pairing back in property prices and retail spending to create a downsized economy which the banks then can address in a balanced way. Government spending - through borrowing (especially on the back of reduced revenues) is just going to make the situation worse. Particularly inflation will not fall as far and as fast as the authorities wish - and inflation could even worsen if Sterling continues to fall. The UK will just have to get used to a 5% or even 10% reduction in the standard of living. Not so bad as living standards have risen about 25% since Labour came in in 1997."

    Yes. I'm not sure abouit the 5% or 10% - it may have to be more than this - but the central point is valid; our standard of living is above the level sustainable by the economic value of what we produce. Whatever the wishful thinking of the mainstream, as reflected in the outpourings of politicians and media, there is NO short-term way of increasing the economic value of our output, and so we are left with the alternative of:-

    1. Continuing to borrow to fund the excess of consumption over output - IF we can find anyone who is prepared to lend to us.

    or

    2. Paring back our consumption until it is more in line with the economic value of our output.

    Longer term, of course, we can make strides to accelerate the rate of growth of output value. But I fear that the culture change required will be dramatic and brutal. Economic value is not created by gambling on outcomes, shuffling bits of paper round a desk, or buying property in the belief that "the government" will always ensure that it goes up in price year-on-year.

    There was a good article by Phil Mullan in Spiked, on Monday last week.

    http://www.spiked-online.com/index.php?/site/article/5884/

  • Comment number 87.

    #70

    Peston does seem to err on the side of doom and gloom, if one was cynical one may suggest the reason for this is that he does not own a house and therefore has a self interest in undermining the economy to further reduce house prices to enable him to get on the ladder. I am not that cynical and would therefore not suggest such skulduggery.

  • Comment number 88.

    @75

    I am the rt hon Tony Benn Labour

    I right tory biased posts though as I like to demonstrate my intelect

  • Comment number 89.

    #78 - You have seriously got the wrong end of the stick.

    A world currency is the last thing that is needed. Why don´t you take a look at Ecuador in 2000 when they abolished the sucre and replaced it with the US$? Poverty levels doubled virtually overnight and immediate massive emigration, and you want to bring that experience to the rest of the world?

  • Comment number 90.

    We are now getting to see the full measure as to how much of the economic growth over the past five or so years was real growth and how much was just leveraged debt.

    Sadly, a lot was just leveraged debt.

    I find it a tad strange that having seen HMG bail out the banks, that the banks seem unprepared to bail out the rest of the economy. Perhaps we should have let the banks fail, because if they had so would have everything else. Now it would seem the banks are prepared to let everything else go whilst they remain as safe as, um, not-houses.

    The financial sector needs to wake up to the reality that it needs to serve its customer base. This means providing finance.

    The time is fast approaching when the economy finally hits the deck, allowing us then to get on with the slump.

    Continued poor performance from the political and financial class might cause us peasants to kick the door in and start replacing certain personalities with people who know what needs to be done. This is too big for the careerist and the opportunist, it is time for real folk from the real economy to be allowed to step up to the plate.

  • Comment number 91.

    mr peston

    the underlying cause of the disease is not a contraction in lending which is another symptom. it is a collapse of asset values meaning nobody will lend to anybody as the assets used as collateral are worthless.

    it is an isolvency issue not a liquidity issue.

    the media and politicians refuse to accept this.interest rate cuts and tax cuts will make little difference.

    we have to remove the toxic, worthless 'assets' (liabilities more like) before they pollute our currencies.

  • Comment number 92.

    #71 Boilerplated:

    "Sorry but you are wrong, in the UK we elect a local MP to represent us in Parliament, we don't even (technically) vote for a party - nothing more and noting less. No PM appearers on the ballot paper so how can anyone vote for the PM?!"

    The key to your argument is "technically". Personally, I do not care what is supposed to happen in theory. What I care about is what happens in practise.

    1) Your local MP does not represent you in parliament - they vote at the party whips tell them, and who controls the whips.

    2) The party name does appear on the ballot. (I would bet money that if the party name did not appear, most voters would not know which parties the candidates stood for.) By voting for a candidate, you vote for a party (unless you vote for an independent) which is effectively voting for a the leader of the party because of point 1.

    The party whip system is basically a perversion of democracy. It allows some one like Brown to barge in and control the Commons without a single member of the public endorsing it at the ballot box. In a lot of cases you local MP may as well be just a glove puppet!

  • Comment number 93.

    I know some areas where debt-collectors daren't go now, none dares set foot anywhere in the Estates around one South Welsh town, not least because a decent number of twenty-year-olds are either on their way to Afghanistan or have recently returned from Afghanistan, and are getting themselves organised in a way that has everything to doo with grass-roots politics and nothing whatsoever to do with political parties. That puts a somewhat different complexion on Armistice Day, I feel.
    The cops won't act either, not least because they've been repeatedly discredited themselves, particularly after a rather nasty headline-making murder case they were up to their necks in a few years back. Day-to-day credit comes from a local credit union, and the banks are closing fast - where there were once four and a Post Office, there's now just one and the PO's about to close.
    Sociologically, these are the roots of rebellion, not unlike the roots of the original Labour Party. Us and them, alienation from politics, a twenty shillings-ought-and-sixpence price increase, result not merely misery but resentment at the system. They're not concerned with debates such as these, all they see is the outcome, in Maslowian terms. They know they're sitting on coal, but nobody will let them cut it for themselves. I give it about a year before they start cutting anyway.
    Multiply this by a thousand, whether in Oldham, Peckham, or Jesmond, and the next election may become rather immaterial in the frameworks we're discussing here.

  • Comment number 94.

    You've heard they're simplifying the Tax return?
    How much do you earn? Send it.

  • Comment number 95.

    #73, of course he isn't.... Loadsamoney was fictional character talking about non-existent money he had made. Completely different ;-)

  • Comment number 96.

    #70 -

    I don't appreciate that 'jolly good talking to', no ho, not one bit.

    You're not Hazel 'smiling' Blears are you?

    GC

  • Comment number 97.

    #69 What´s wrong with spending on "booze and fags"?

    There´s a lot of direct employment in booze and fags factories, more employment in the retail, advertising and PR sectors, and indirect employment in the health service. With specific regard to booze there is even more indirect employment in the police, bouncers, street cleaning, taxi driving and lots of jobs in repairing damage to all kinds of things destroyed by wanton vandalism.

    Booze also leads to family breakups which provides jobs for solicitors, courts, and child welfare services. Family breakup increases the demand for housing which in turn increases the demand for furniture, light and heat.

    As poster #70 implores - get a life, get out on the beer and think of all those jobs you are helping to create. Mine´s a large one...

    You should do this quickly because if you wait until you are a pensioner you may find that you have insufficient money to stand your round. Even if retirement is some way off you still need to act quickly as the British Govt. are planning to run out of electricity in the next few years and drinking in the dark may not be so much fun.




  • Comment number 98.

    The global economic crisis has presented Gordon Brown with the opportunity to achieve his ideological principals for the state to control peoples lives. Slowly slowly there are government takeovers of institutions followed by regulatory services all effectively leading to one thing. State Control.
    The taxpayers are used as means to achieve this objective.
    It defies belief that such a prudent ex chancellor and now Prime Minister has followed the herd of countries who allowed their economies to be ruined.
    I suppose the theory now goes the taxpayers are the ones who suffer from this crisis so it is the taxpayers who should help to resolve the problem so that normality can be retrieved.
    Off course there would be no admission of liability for the present crisis by the governing head of the taxpayers the Prime Minister. State control through the back door.

  • Comment number 99.

    Big surprise.

    The taxpayer bailout of the banking system will inspire more chav corporate scum, and hoodie bankers to come out with their begging bowls, to bludge off the state.

    Why can't these lazy rich idiots work for a living instead of poncing off the rest of us all the time?

    They're only going to blow the money on pinstriped track suits, Gucci trainers, yachts and second homes in tax havens, whilst binge drinking on champagne, cocaine and cigars.

    The corporate welfare state. Don't you just love it?

  • Comment number 100.

    Post 95. Loadsmoney may have been fictional but he was an amalgamation of real people at that time.

    Harry Enfield, Paul Whitehouse & Charlie Higson lived in Hackney and saw at first hand, as did I living in Bow the dual behemoths of Yuppie excess and labouring lolly in the late 1980's. I remember 2 day drinking sessions after Nigel Lawson reduced the top rate of income tax from 60% to 40%.

    With a property boom in the late 80's builders, plasterers and many others working in the construction industry made an absolute fortune during the week and spent much of it on Friday and Saturday nights. Builders and plasterers made a huge amount as developers tried to turn round flat and house conversions as quickly as they could.

    Who do you think bought all the Ford XR3is and Sierra Cosworths sold at the time?

    Loadsamoney was based on a large number of very similar people who did exist.

 

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