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Giant borrowing payback looms

Nick Robinson | 20:05 UK time, Friday, 21 November 2008

The government is preparing to admit that a huge and unplanned-for rise in government borrowing will have to be paid back in the years to come. The chancellor is expected to announce spending rises and tax cuts to boost the economy in his pre-Budget report on Monday but he'll also make clear how the money he spends will have to be paid back.

Next week, the chancellor has to tell the country how far we've gone into the red. He's preparing to reveal that we'll soon be borrowing over £100bn - that's 11 noughts at the end.

A collapse in the tax the government receives from house sales and from the City of London means we're heading for an annual overdraft worth one twelfth of the country's annual income - a figure that will raise a few eyebrows. It's not been seen since Denis Healey was Chancellor - back in the 1970s - the last time Labour was in power.

I'm told that Alistair Darling wants people who watch his speech to clearly understand how he'll reduce the nation's overdraft without having to read the small print.

The last time a chancellor had to give advance warning of tax rises was under the Tories in 1993. Norman Lamont announced plans to put VAT on gas and electricity bills one year and double it a year later. It caused Labour outrage. Gordon Brown was sitting on the front bench that day.

Today Mr Brown faces opposition taunts that he's planning a tax bombshell. He insists that however high borrowing is already, it's got to go even higher, telling Jeremy Vine on BBC Radio 2 that "You have got to act now so that we avoid a worse problem.

"My father used to say 'a stitch in time saves nine' and I think that's an important message."

The prime minister was also asked the question he's always fudged - whether he regretted his promise to end boom and bust.

"Of course politicians make mistakes, and I've got to be honest that we've made mistakes."

It's Alistair Darling who has the job of undoing some of those mistakes - on Monday he has to be honest about the long term pain we face while promising enough short term gains to stop the country sliding into a slump.

The Treasury's talking about a package of measures that will be "decisive". That means a stimulus - paid for by extra borrowing - of more than 1% of national income GDP - over £15bn to be spent on:

Cancelling planned tax rises - on cars, small business and income tax allowances

Temporary tax cuts - targeted at those most likely to spend the money - the lower paid

And increased spending - on projects that can be started quickly.

It's often said that chancellors' speeches are forgotten a few days after they're delivered. This one looks like proving to be an exception.

Comments

Page 1 of 4

  • Comment number 1.

    Sounds like the lower paid will get the benefits and after the next election the middle earners will get the bill.

    I will go get my wallet.

  • Comment number 2.

    There comes a time when complete honesty and no spin is the best political policy. The nation now undertands that we are heading for tough times. Gordon Brown's policies may have been partly to blame, but there are many others who can share responsibility either by their actions or their silence.

    Everyone knows we have had a really good party. Lots of people have done very well out of the past 11 years. It was like a booze fuelled party - even people who didn't like what was going on protested and then joined in. Now we have got a hangover.

    If you want to recover from a hangover tell the truth about how bad it was and get on with a hoped for remedy however unpleasant. People will accept that.

  • Comment number 3.

    A dose of 'honesty' from a politician cannot do any harm plus a little homily thrown in for good measure.

    I've got one too, from my mother which seems appropriate for these times:

    "When poverty comes through the door, love flies out the window".

  • Comment number 4.

    Well, I suppose it's verging on getting close to honesty, which is a minor miracle for a Labour chancellor. But dear God, is a 'sorry' all we get for a decade of blistering incompetence? If I'd run up debts owed to a bank over a decade, would I just say 'oops' and then ask for MORE?

    Election, please. Now.

  • Comment number 5.

    "WE'VE MADE MISTAKES" is hardly apology enough for the hundreds of thousands - millions - who are going to suffer by losing their jobs, self-respect and even their homes. How Brown can even be considered the right person do lead us out of this mess is beyond me. It was Brown who encouraged the massive debt people have taken on, stupidly, and allowed the banks and building societies to drown them in it. Let's have an election now and, hopefully, get rid of him.

  • Comment number 6.

    I did not hear the Vine piece with Brown but I do not suppose that Mr. Brown elaborated on precisely what those mistakes were.

    I would guess that the biggest 'mistake' was to allow 'easy credit' on properties.

    It would have been so simple, via the FSA, to mandate that mortgages could not be more than say four times earnings, which on its own would have kept house price inflation under control.

    Unfortunately, that would have unmasked other problems, like what else do we as a country do that adds genuine value.

    So the charade was allowed to continue but these politicians (sans Blair of course) now have to try and sort out the situation that they were partly responsible for causing in the first place.

    Some sort of rough justice.

  • Comment number 7.

    self interested, media hogging clowns unfit to govern let alone run for a bus.

    over borrow then expect joe public to pay for their unforgivable tactics, there plan to leave the bill for the next government to endure and be criticised over is working well.

    i can only assume there wage bill will not be reduced, NO it will go up as per normal for this greedy bunch of ganets hanging around westminster these days.

    if this country were a company and government management they would be fired and held fully responsable even leading to criminal charges.

    as mp's they think they are immune to the after affects of there actions and sadly they seem to be but in reality they are not and they should be charged with criminal negligence and treason, but will they NO they are above the law and they act like it as we can see with their handeling of the ecconomy.

    pushing us into europe via the back door with out a refferendum or even telling us, treasonous behaviour at least.

    so mp darling saying sorry is an empty gesture and designed to make them look good to the media, too little too late.

  • Comment number 8.

    "Of course politicians make mistakes, and I've got to be honest that we've made mistakes."

    He still can not bring himself to say "I made mistakes".

  • Comment number 9.

    The (present) Government has to stop spending money WE have not got.
    Most people (except the rich) are struggling to keep going.
    Labour must scrap the elaborate spending plans NOW.
    People do need help, not id cards, not more fines, Not more rules and regulations.
    Back to basics Labour, do the necessary, no more pet projects.

  • Comment number 10.

    Cluck Cluck Cluck Cluck CluckCluck Cluck Cluck Cluck CluckCluck Cluck Cluck Cluck CluckCluck Cluck Cluck Cluck CluckCluck Cluck Cluck Cluck CluckCluck Cluck Cluck Cluck CluckCluck Cluck CluckCluck Cluck Cluck Cluck Cluck CluckCluckCluck Cluck Cluck Cluck CluckCluck Cluck Cluck Cluck Cluck...............................

    Do I hear the sound of chickens coming home to roost. Even Nick cannot manage to put a positive spin on what is truly disastrous for every taxpayer.
    So much for no more boom and bust, so much for Britain being best placed to weather the storm. The voters will know what to do when the time comes..Labour are a disgrace in terms of economic management and pretty much everything else.

  • Comment number 11.

    It is however difficult to disagree with the short term fiscal boost. Despite its future cost to the tax payer without it, the downturn will be longer and more painfull to the UK economy. However the current Prime minister is the one to blame for having to increase National Debt to levels a "prudent" chancellor would do anything to avoid.

  • Comment number 12.

    Interesting that you compare our economic woes now with the last time Labour was in power.

    The budget deficit may get to 8.3% you say?

    The last time Labour took us to 7% of GDP the IMF had to bail us out.

    Interesting that co-incidentally 1976 also saw a 25% fall in the pound vs the dollar.

    And even Jim Callaghan said "We used to think that you could just spend your way out of a recession...I tell you, in all candor, that that option no longer exists."

    So, the IMF checklist is there:-

    1) Debt gdp heading to >7%? Check

    2) A 25% run on the pound vs the dollar? Check

    3) Rampant public spending? Check

    4) Signs that the market is turning away from buying UK government bonds? Check - this weeks' Gilt auction was only 1.6x covered

    It was December 1976 the IMF loan was finally agreed.

    I wonder what Santa will bring the UK this December?

  • Comment number 13.

    Its not difficult to disagree with at all. Japan tried it from 1990 onwards and it didnt help them. Lets look at it from an individuals point of view. Youve maxed out on your credit cards, your mortgaged up to the hilt, and someone advises you that the best course of action is to take out another credit card and borrow on that. It might save a bit of pain now, but it'll be nothing to the pain when you cannot get another credit card and you have to pay it all back.
    You have to pay back some of the debt to get yourself back in a reasonable state. Borrowing more (eg to have a happy Chrismas) will just make the new year even worse. The answer is STOP BORROWING. STOP SPENDING unless its absolutely necessary. Its painful, but it will be better in the end.

  • Comment number 14.

    We all know what caused the crunch. Read Danial Hannan in the Telegraph.

    Easy credit fuelled by low interest rates. It was a political decision. Now the politicians who broke the world expect us to trust in them to fix it.

    Thanks but no thanks. Labour out.

  • Comment number 15.

    Oh No he wants to tinker with the details, making things even more over complex - he is obviously in the job creation business for accountants and sundry financial advisers.

    As I wrote on the Peston blog - do simple things. If he does complex things he is bound to create unforeseen consequences, particularly in the middle of the year.

    (https://www.bbc.co.uk/blogs/thereporters/robertpeston/2008/11/taxes_to_fall_and_then_rise.html

    This tendency to micro manage tax has created an impossibly complex tax system, that nobody actually understands and that is full of unforeseen loopholes.

    Send out a cheque to everyone as a Christmas box. - I'd start with a monkey.

    (A monkey = 500 quid in Estuary - Georgie Porgy Osborne please note. - maybe G.O. and A.D. would prefer an Archer = 2000 quid!!!!, or a bag of sand = 1000 quid to bury his head in.)

  • Comment number 16.

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

  • Comment number 17.

    Did anyone ask exactly who we are borrowing this money from? If there IS anyone left in the world with true capital to invest, surely they can't be idiotic enough to lend it to Gordon Brown!

  • Comment number 18.

    Is this the BBCs new function for the government:-

    The prime minister was also asked the question he's always fudged - whether he regretted his promise to end boom and bust.

    "Of course politicians make mistakes, and I've got to be honest that we've made mistakes."


    To give them a platform to pretend that they have admitted/apologised so in a week or so say "that is in the past, it was all cleared up (blah) (blah)".

    Peston glossed over the governments admission that they misled the public and their own back benchers over the purpose of the money in the 'bank bail out'; now you gloss over browns 'almost' admission of culpability in breaking the most significant claim he made of his political career.

    I, for one, am not impressed...

    Get brown to admit and confess properly - an/or get mandleson to explain his contact with Oleg regarding eu tariffs.

  • Comment number 19.

    12 Chris Bowie

    Absolutely correct.


    Which is why it is unforgivable that the media have been giving Brown such a soft ride and allowing him to spin (lie) the country into preparing to splurge more money to cover up the problems he caused as Chancellor.


    It is a rare thing that a lone man has destroyed a country largely on his own.


    Maybe Gordon can unleash the power-house that is Sarah Brown to beg at the IMF for salvation for us?



  • Comment number 20.

    Oh dear -


    I've been referred for pointing out that Gordon has also been telling lies about "we are uniquely placed to weather the recession" (on top of the boom and bust lies).


    Gordon is spending billions to cover up his dire track record as Chancellor and calling it a "fiscal stimulus"


  • Comment number 21.

    Not a single politician, not one commentator (including you) or presenter and certainly not a single 'expert' in the news has correctly identified the two interlinked problems the world is facing today:

    1. The little financial difficulty: True, it started with sub-prime mortgages, BUT it is far deeper than that. After all the total of sub-prime mortgages is reported as being some $1.5 trillion, whereas Governments have so far pump close to $10 trillion into the banks. If the problem was just sub-prime mortgages, or 'banks not lending to each other', this $10 trillion cash injection would have solved in one go.

    No, the problem is 'derivatives'. These dents and bets are worth some $500 trillion. Compare that to the GDP of the whole planet of just $50 trillion and you get some idea why this fantastic burden of debt can NEVER be repaid.

    The only solutions are
    a) hyperinflation to degrade the whole of that debt (following Zimbabwe)or
    b) legal cancellation of all derivative contracts (!!) or
    c) collapse of the whole financial system incl just about all banks, and starting all over again.
    We need to choose one and go for it. The future is bleak whatever Gordon does, but pumping borrowed money into the economy in the utterly vain hope of recovery is just about the worst possible strategy.

    2. The little problem of Energy and Growth.
    Next year the world production of crude oil will, for the first time in history, decline for geological, not political or economic, reasons. Peak Gas will follow some 10 years later.

    2008 is the end of the Era of Growth (as growth is predicated on the availability of cheap energy) and the start of the Era of Decline.

    No matter what investment is made in oil or gas fields, the total production from 2009 onwards will decline every single year by perhaps 4%, thus our energy sources will halve every 20 years or so. This has already happened in 60 oil producing countries around the world, incl USA (1972) and UK(1999) and now, in 2009, global production will begin to decline.

    The 1930s depression was bad enough, but this decline will be on a massively larger scale. To start with, it will be at least 40 years long. 40 years will take us to about 25% of current energy usage, which is what we can expect from all renewable sources combined. So at that stage, provided Governments have been wise enough to have invested massively in renewable energy, renewables may be able to take over from fossil fuels and perhaps stabilise the world economy.

    So, the budget should
    a) embrace the Green New Deal (£50 billion per year invested in renewables)
    b) forget about tax cuts or other increases in current spending
    c) choose a strategy for the self inflicted financial crisis - and follow through

  • Comment number 22.

    Well done the BBC - I'm watching some "detailed" explanation of the level of debt and borrowing at the moment on TV (Newsnight??).

    Debt is being portrayed as (until recently) lower than every other country and an "independent" expert was found who also backed up the BBC / Labour claim that debt has been at about 38% - until the banking crisis turned up.


    The BBC did let on that the poor will get the tax credit and middle earners will be paying for the credit. The left wing think that is "ok" - which is probably why it got past the post Jonathan Ross / Russell Brand editorial commitee.







  • Comment number 23.

    Sick Sick Sick!!

    Sick at Brown showboating on the world stage after the mess he caused by spending not saving in the good times.

    Sick that with all this overspending and borrowing when I have not run up massive debts I will still have to pay.

    Sick that Labour have brought us back to the 1970's (and I am old enough to remember that - the whole family sitting round a parafin stove in one room to keep warm. Doing my homework by candlelight because of the power cuts. Walking past piles of rubbish in the streets because of strikes. Wondering if we would go to school next week as they were running out of coal for heating and might send us home. Reading how the IMF had to bail us out, though I was too young to understand. Not seeing my father for weeks on end because he left before I got up and didn't get in til I was in bed because he had to work so hard to keep the company he worked for from bankruptcy)

    I knew it would be bad when Bliar got in in '97. I now know Brown is even worse!

    Not even in my worst nightmares did I imagine HOW bad it could get!!!

    They have mortgaged our future. Now they are going to tell how much for.

    As I said, Sick!!!

  • Comment number 24.

    It would be amusing to see all the Tories coming on here saying "Labour out!" - if it wasn't so pathetic.

    We are in the mess we are in because a supposedly left wing Labour government behaved like an extremist free market right wing government. Ditching regulations, loosening credit, kow-towing completely to the financial sector - the whole shooting match.

    Now apparently the solution is to get in a Tory government which is, one assumes, more right wing than the disastrous right wing government it is going to replace.

    Actually, it is worse than that. The intellectual titans in the Tory Party apparently think that the best policies at the height of the worst crisis capitalism has faced for seventy years are to pretend that there isn't a crisis at all, and worry about taxes going up in a few years time. This is delusionality and denial of a high order indeed.

    The economy is in danger of completely collapsing for a decade. Extreme measures are required because we are in an extremely bad situation. The extreme capitalist experiment has been an utter catastrophe. If governments had not stepped in to nationalise most of the financial sector, capitalism would ACTUALLY have collapsed (it still might). Left wing measures have just rescued capitalism (maybe).

    But you must be all be right. Capitalism has just proved no more successful than communism. Bring back the Tories!

  • Comment number 25.

    Oh dear - a PM referring to 'we' when saying 'made mistakes'. The last PM to refer to themselves as 'we', the way the Queen uses the royal 'we' meaning I, was Thatcher, near the end of tenure at Number 10.

  • Comment number 26.

    Santa Darling is giving you a present, he's picked your pocket to pay for it , guess what, taking it after Christmas, o' by the way you have to pay the return cost as well.

    As an old boss of mine told me "son you can make a mistake, we all can but make the same mistake again then there's the door" £100,000,000, 000. that's a lot of mistakes that are all the same.

    To blame it all on America compounds the mistakes.

    I've had enough going to close my eyes and dream that I could dance as well as John Sargent......Goodnight

  • Comment number 27.

    This is just the end of the beginning. All that is left now are the tears.

    We are going to have mass unemployment in the spring - topping 3 million if it has not already as the stats are crooked - we have been in recession for 3 months at least but had 0% growth shown - er...really?? - and we are now seeing the end game for Brown - which is going to be complete and utter destruction of the economy.

    I hope that when the tories get in they make it illegal to harm the economy to such a degree, and retrospectively prosecute Brown and Darling and their cronies

  • Comment number 28.

    8 - peterfergie

    course he won't, he never will!

    Although the actual inclusion of the word "mistake" is quite impressive, in reality, all Brown's said there is what everybody on the face of the planet knows: he was talking absolute rubbish when he said he'd abolished boom and bust. He's not given us any more detail than that.

  • Comment number 29.

    Darling is not a high charisma politician. But I have been increasingly impressed by the way he has calmly analysed and thought out some of the problems he has picked up. Not that long ago he was chastised for calling this the worst position we have seen for 60 years - and while I am still not sure why he referred to 1948 in particular, his viewpoint looks less exaggerated than it once did. And he has in his own quiet way come up with answers and solutions, and in general seems to be threading his way more than competently through troubled waters.

    The knee jerk response is just to go "ya, boo" and witter on about Brown, Labour and ignore the way this country has built its economy over the last 30 years. As the facts are that are debt to income ratios now are actually better than average. Our problem is that our economy based on housing and financial services is not well placed to ride a global storm, and the result of this will be that future debt to income measure will soon become badly skewed, and we will be dependent on the performance of other nations to eventually see this out. Both major parties have responsibility for the shape of this economy, as it has taken far more than 10 years to get to where it is, and set off down the route to lead us here in the 1980's. It will take more than 10 years to get it back.

    But I will await Darling's announcement with interest, as so far he has in his considered way come up with answers and decisions, and has seemed to be sincere and honest. The only other person in the House who has come up with more and been ahead of the situation has been Vince Cable.

    But if your interests are cheap party politics, rather than who is best to sort this - then of course, look to the Dave and George show - so aptly displayed in a Times cartoon this week with the Mickey and Minnie Mouse ears on for their latest non-announcement that really did once again nothing for the country.

  • Comment number 30.

    Let us say that as a result of "stimulus" I have an extra £300 in my pocket. As a result, I decide to replace my TV (as far as I am aware this is pretty much what Brown and Darling would like me to do). So

    The TV is made in Korea (by Koreans, of course)

    It was transported here on a Singaporean owned and crewed ship

    It was delivered to the shop by a Polish company

    The shop itself is ultimately German-owned

    The shop assistant is Czech and sends all his spare money to his family in Prague

    Even the electricity it uses is generated from Russian gas sold into the UK by a French middle-man

    [Frankly, even if the TV blows up, the water to put out the resulting fire is delivered by a French-owned company].

    So, my question is, how does this "stimulus" help the British economy?

  • Comment number 31.

    I assume those wittering on here about prosecuting "Brown and his cronies" will be fully in favour of them sharing the eventual police cells with the entire US Republican Administration and the senior officers of all the world's financial institutions?

    Brown is actually now rescuing financial capitalism by completely reversing the right wing nonsense that somehow destroyed his brain for a decade. We are heading for a complete (downwards) re-evaluation of the role of free markets, particularly in the financial sector, and a complete (upwards) re-evaluation of the vital role of governments in the economy.

    Or did I just miss something? I thought I just saw the private banking sector being completely rescued by governments. And now we are about to see the same thing happen in the US to the private automotive sector (there will be more of this worldwide to come).

    As in the 1930s, laissez faire capitalism has failed, and is being rescued by left wing government led interventionism. Brown was indeed wrong to follow a far right US administration in such idiotic right wing policies for so long. But please help me see how this is now a recommendation for a right wing government in the UK? Is it that Tories are somehow supposed to be better at running heavily state managed mixed economies than socialists? Because that's what we are going to be doing for the forseeable future.

  • Comment number 32.

    I have an idea for a revenue neutral way to ease our economic woes.
    With all the redundancies around isn't it time our 'political industry' took its share of the pain?
    At the moment it seems our MEP's cost over £100 million, the UK parliament £161 million the Scottish parliament £63million. On the basis that these figures are typical if we think of the other institutions like regional assemblies etc then the annual cost to the tax payer might exceed several £billion.
    If we made 25% of our politicians redundant across the 'piece' we could achieve annual and incrimental cost savings (pension liabilitieis, travel expenses etc).
    These savings could be shared amonst our 11.5 million pensioners who would either pay their fuel and food bills, spend it on their children/grandchildren or spend it in our shops, cafes and garden centres where many of our lowest paid people work.
    This is an absolute win win, our politicians could truthfully say they share our pain. Some of our pensioners would not die from cold or malnutrition this winter.
    It has no extra admin cost as the systems are all in place. It would help to keep the lowest paid in work and boost demand. With 80% of every pound spent ending up back in the Treasury even the government could be a winner!
    Maybe not enough to stave off recession but it sure would cheer all us taxpayers up who foot the bill for this wasteful and stupid government.

  • Comment number 33.

    jrperry you don't get it! The situation we are in is SO calamitous, that we now need a massive coordinated global fiscal stimulus. Some economies will then no doubt do better than others, depending on their fundamental competitiveness.

    If the French, Koreans, Poles etc. have more money as a result of our stimulus, than hopefully they will use some of that to buy British goods. And they in turn need to stimulate their economies (like the Chinese are doing) to enable them to buy more goods from the rest of the world (including us). In any case, many of the services you talk about are actually provided IN the UK.

    The alternative is that we all simply go down the plughole together, with nobody buying anything from anyone.

    I assume that's current Tory policy. We will all be destitute and unemployed in a few years' time, having destroyed most of what remains of our industrial base - but, hey, at least the middle classes won't pay any more taxes! (Mainly because they will be out of work.)

    We are waiting now for a global Roosevelt to rescue capitalism again. It may not be Gordon Brown (it hopefully might be Barack Obama). The idea that it might be David Cameron is as laughable as that it might have been John McCain. You are the idiots who got us into this mess.

  • Comment number 34.

    As all industry sectors are facing redundancies isn't it time our 'political industry' did the same.
    How about 25% of all politicians across the 'piece'. That's HoC, HoL Mep'S, Scottish parliament, Welsh assembly,Metropolitian councils, elected Mayors, unelected quangos like regional assemblies.
    The 100's of millions we save could be shared amongst our 11.5 million pensioners.
    They are the most likely group to spend either to keep warm/eat, shopping where many of our lowest paid work or helping children/grandchilgren.
    It would have the added bonus of being revenue neutral and rerquire no extra admin expense as systems are in place.
    It might not be enough to stave off recession but it would make hard pressed tax payers feel better who have to foot the bill for the wasteful and stupid political elite.

  • Comment number 35.

    Dear All,

    I am 44yrs, divorced and earn about 22k per year. My children are looked after by my ex-wife (I pay child maint) and I pay rent for my house.

    I do not expect anything from AD next week except my tax will increase and my bills will become bigger.

    I hope I will be proved wrong, but I ain't holding my breath!

  • Comment number 36.

    Nick,

    "My father used to say 'a stitch in time saves nine' and I think that's an important message." says Gordon the Great.

    Could this be Gordons 'I used to go to watch Jackie Milburn when I was on the terraces moment' I don't know about anybody else but Gordon's quote is something my mother might have said, but my father, wow maybe we know why Gordon is the way he is. He's pulling the old son of the Manse bit again isn't he, who is advising the man.

    If this is Gordon being sorry then you know where I'm going on this, the war in Afghanistan, the war and occupation of Iraq, get them out, bring them home, stop the killing, and accept that you were wrong, that you have blood on your hands Gordon.

    As for me, tell you what my father might have said 'Don't mess with me son, just don't mess with me, now go and do as your mother tells you'. Only the mess word might be a bit higher on the not to be used scale.

    This is all getting beyond parody, please put us out of our misery. As Darling might say, we are all so 'pissed off' with you Gordon.

    You have so messed up, now you think by fessing up that makes it alright does it, do you really think so, well make my day punk, do you feel lucky, do you feel lucky? Lock and load!


  • Comment number 37.

    Nick,

    when will anybody say to Gordon you are not the chancellor any more, you are the Prime Minister. Let Darling do his job, you do yours, when Alistair gets it right stop trying to take the praise, just imagine that you were still chancellor and Blair was still Prime Minister. If you did something right and Blair had said that it was him, what would you have said, come on remember what a sulky boy you were Gordon, or have you no memory.

    This is what is annoying about Gordon, he's wants to be ackowledged as being our saviour, well he isn't. Mind you I do know somebody who keeps saying I told you so, I know who reads these comments etc... oh that's right it's me, I'm becoming an Aspidistra, and I pick my nose aaagh, they've got me. Is this how it all ends?

  • Comment number 38.

    #22

    jonathan_cook
    ......blogging whilst watching Newsnight.

    You sad, sad person - you really should get out more.

    Bill

  • Comment number 39.

    The Tories are going to do nothing?

    Actually they are trying to slow down the juggernaught, before it rolls over the cliff, by applying a brake.

    With Labour it is full steam ahead - and let's press the accelerator on monday.

  • Comment number 40.

    NICK - It appears that one Council has shown Flash Gordon the way he should have ran the economy over the last decade.

    The Treasurer for that Council stated:

    Over recent years we have taken difficult decisions which have allowed us to put money in the bank for a rainy day and it's certainly raining now.

    How refreshing, stashing money away for a rainy day. They have estimated that their rainy day reserve should weather them through 3 - 4 years downturn without cutting vital services.

    By the way that Council is NuLabour controlled. It is little wonder that Flash Gordon has not hailed this as a guiding light, there again he cant he would only spotlight the shoddy way he has run the economy during his spell in Downing Street!

    The Council in question is Glasgow. Pity the Numpties at the top of the NuLabour party did not follow their thrifty actions.

    NICK – Will you point this out next time you have a heart to heart with your mate Flash!
  • Comment number 41.

    Novoludo.... "New Game" - interesting!

    Actually, I think you are the one who doesn't get it.

    We have two things in hand. The first is a world banking crisis. As much as can be done about that, at least with injections of money, has been done already.

    Then we have a rather more local recession, which has been predicted for a little while now, was accelerated by the banking crisis, but would have happened anyway, a direct consequence of UK government economic policy over ten years or so.

    We have a Prime Minister who is trying to spin a story that the recession is part of the world crisis. It isn't - in its severest sense, it's local. That's why every economist worth his salt is showing its impact as going to be far greater here than anywhere else.

    We also have Prime Minister who for the saving of his reputation, and maybe his job too, is bigging up the local crisis and trying to portray himself as a man of action, with a series of moves that we will still be paying for in twenty years time.

    So back to my point from my message 30. The most damaged economy is our own. We have no real money to fix it with and no need or obligation to follow your argument and fix anyone else's economy - for a start, we need the fix more than practically anyone else does. Why are we doing something, "fiscal stimulus", on a scale far grander tha we can afford, in the name of fixing problems with our economy, when the real effect will be to leak almost 100% of the ultimate benefit out of the country - I repeat, to other countries that don't need our money as much as we do!

  • Comment number 42.

    I listened to the Jeremy Vine interview and was shocked by what I heard. It seemed as if those who phoned in had been hand-picked to make sure Brown was seen in a positive light. It was almost a party political broadcast.

    What happened to those who had a concern? He said he'd personally intervene to help them!

    How lucky they were, but what about the tens of thousands of people in this country who couldn't get on the phone? - Their future has been wrecked by this government's financial policies, some of those people have been prudent and made sure they didn't go overdrawn or borrow too much.

    We're one of those families, and believe me we're hard working, but we're probably the wrong sort of "hard working".

    We've made sure we didn't go into debt. We did this by NOT taking foreign holidays, by NOT buying new cars, by NOT buying expensive household items. NOT buying designer clothes for our children and by NOT overborrowing.

    We really were the mugs weren't we, because yet again we're the the ones who will be hammered by higher prices, higher taxes and will get no support from central government that says they'll bail out those who were careless.

    It simple isn't fair and it isn't reasonable either.

  • Comment number 43.

    Well as John Major once said - If it aint hurting - It aint working. Here we go again!

    Nick, I am not as sure about the small print as you are! From experience alone, I would not trust these Numpties an inch.

    One consolation is that Teflon Tony is edging ever so closer to the driving seat. My one wish is that the four architects of the NuLabour Project are all huddled together in the driving seat when the NuLabour train crashes. Yep Flash, Mandy, Ali and Teflon Tony. It will almost be worth the pain.

  • Comment number 44.

    I was alway told not to throw good money after bad. This seems to be the governments proposed solution to the financial crisis that their mismangement has brought upon us.

    Actually it seems more like using gasoline to put out a fire.

  • Comment number 45.

    #31 novoludo

    Or did I just miss something?

    Yep…..The last 11 years!

  • Comment number 46.

    Well jr - what are you proposing? That we starve our way out of recession? What on earth does "we can't afford it" mean in our current condition? The patient will be well and truly dead if we don't try something to keep it alive.

    It is a truly wondrous thing to watch conservatives blaming Labour for the collapse of capitalism, and then to claim that the way out of the crisis is the 1930s minus Keynes and Roosevelt. Truly wondrous!

    What you are missing is that those of us on the Left fully agree with you that Brown and Blair messed things up utterly (on the economy just as in Iraq). But by following your polices, not ours. You should be down on your knees thanking us for rescuing you from your follies. And agreeing that the world has had quite enough lunatic right wing governments for a couple of decades.

  • Comment number 47.

    And by the way jr, I really wish it were true that we had a little matter of a world banking crisis that we had already done what can be done for it. Your complacency must be very comforting to you. (Citibank is on the point of collapse and you think we should sit idly by being good capitalists. Good idea!)

    We are in the early stages of a fully fledged global economic slump, the worst for decades, which started in the financial sector as a result of the absurd laissez faire policies followed there (by our right wing Labour government too of course). But the real economy is now being savaged too. Major companies in the automotive, mining, and shipping sectors, to name just a few, are under severe pressure (I know, I work with many of them). They too cannot possibly survive in anything like their current form unless there is a major global stimulus. And indeed probably unless governments take a direct hand in some of them, as the US are about to do in their automotive sector.

    You may be right that the UK economy is in worse shape than most. I agree. With the US it followed the most nutty extreme laissez faire policies. How do people like you explain that the stronger economies now are such as France, Spain and the Scandinavians - precisely the ones that didn't follow the more absurd anglo-american excesses?

    I know it suits your political prejudices to claim that our plight in the UK is mainly the fault of local Labour policies rather than the more comprehensive and interlinked failures of a certain extreme form of global caplitalism. But even you must see that this is manifest nonsense. This is a global system on the point of systemic collapse, and you know it.

  • Comment number 48.

    46

    "What you are missing is that those of us on the Left fully agree with you that Brown and Blair messed things up utterly (on the economy just as in Iraq). But by following your polices, not ours".

    Why didn't you follow your own "polices" (sic)

  • Comment number 49.

    Roll_On_2010: do you seriously think that Brown and Blair caused the collapse of global capitalism by following left of centre economic policies which now need to be rectified by a conservative government?

    I agree: the right wing Blair/Brown government has mainly been a disaster. That's why I don't want an even more right wing Cameron/Osbourne government.

    Unfortunately I think it is quite possible that, as in the 1930s, this capitalist collapse will usher in neofascist regimes in a number of countries. But I am exceedingly hopeful of course that, following the election of Obama in the US, we will this time weather out the storm by moving to sane and realistic left of centre social democratic governments instead. Fortunately Gordon Brown is now at last returning to his political roots and abandoning the Blairite Thatcherism which got us all into this mess.

  • Comment number 50.

    #23 qwertyWalrus

    Sick Sick Sick!!

    Sick that Labour have brought us back to the 1970's (and I am old enough to remember that - the whole family sitting round a parafin stove in one room to keep warm. Doing my homework by candlelight because of the power cuts. Walking past piles of rubbish in the streets because of strikes. Wondering if we would go to school next week as they were running out of coal for heating and might send us home.


    Naw, you don’t mean the Winter of discontent and the preceding recession that put Thatcher in power. The NuLabour apologists on here have airbrushed those events from history.

    At least the Tories will not have a big election spend come 2010. With the predicted 3 Mill unemployed they just need to dig out the Poster they used in 1979.
  • Comment number 51.

    Novoludo

    To be brief - it's way past my bedtime.

    I don't think we should be doing generalised fiscal stimulus because it is inefficient, too blunt a weapon, too little of the total amount of money that will be spent will stay in our own economy.

    I think the government should hold off, keep what is left of the available taxpayers' money in hand, but watch the economy very carefully and intervene in a fire-fighting fashion where genuine problems become clear. It's a hard-nosed approach, it effectively acknowledges that there are some businesses in this country that we only need in the context of employing people, but which are fundamentally unproductive (just look at the number of supermarkets we have, for example - far far more thanwe really need). It also would be unpopular, and I can imagine some thin and shrill voices on the radio opposing the policy. But it uses the pounds far more wisely, and in particular doesn't leak 90% of the money overseas.

    I know you were exaggerating to make a point, so I will too, but in terms of feeding people, 100bn of fiscal stimulus only buys the same as 5bn of food stamps.

    And who said I was a Tory? (But I am worried that behind all that is open and apparent, Brown is experimenting with buying an election victory.)

  • Comment number 52.

    48 idealisticynic: Why didn't we follow our 'own' left of centre of policies? Beats me!

    If we and some other countries had, we wouldn't now have a meltdown in the middle east and a meltdown in the global economy - both calamities fully supported by conservatives in the UK, and originated by conservatives in the US.

    So hopefully we will now learn from our terrible mistakes. That most people are now doing so is why Obama just got elected, and Cameron / Osbourne are slipping in the polls.

  • Comment number 53.

    #23 qwertyWalrus

    Sick Sick Sick!!

    Sick that Labour have brought us back to the 1970's (and I am old enough to remember that - the whole family sitting round a parafin stove in one room to keep warm. Doing my homework by candlelight because of the power cuts. Walking past piles of rubbish in the streets because of strikes. Wondering if we would go to school next week as they were running out of coal for heating and might send us home.


    Naw, you don’t mean the Winter of discontent and the preceding recession that put Thatcher in power. The NuLabour apologists on here have airbrushed those events from history.

    At least the Tories will not have a big election spend come 2010. With the predicted 3 Mill unemployed they just need to dig out the Poster they used in 1979.
  • Comment number 54.

    jr - fair enough. There is a very reasonable debate to be had about how far governments should be rescuing the system by broad scale stimulus, and how much by targeted intervention. If we are all social democrats now, then I would be happy to debate precisely which social democratic tools we should use.

    At least then we can all agree that right of centre parties are going to be intellectually bankrupt for at least a couple of decades (as indeed they were from about 1930 to the late 1970s), since their policies caused this catastrophe.

    Indeed Brown (who obviously I have little time for) is trying to spin a story - "it's not my fault gov, it's the global recession" - for political advantage. From my position, it IS his fault - because he is one of the arch ideologues who has created the global recession. Not primarily because he is caused a parochial UK recession. His crimes are much more heinous. But he does seem to be seeing the light a bit now. (Thank God a true Tory like Blair was not in charge when this all hit. We would have been really stuffed.)

    Cameron is going back to the old Tory playbook of trying to win the next election by scaring the middle classes about taxes. This is utterly cynical and irresponsible, since obviously tax levels in 2-3 years time are hardly are most pressing problem right now.

    Worrying about taking on debt now because of future taxes is like worrying about taking life-saving medication in fear of the later side-effects.

  • Comment number 55.

    Nick, you’re the expert, I think.

    At what point next year would you say we be able to see if this jolly has worked! When will we know when the Brown stuff has hit the fan?

    49# novoludo
    Roll_On_2010: do you seriously think that Brown and Blair caused the collapse of global capitalism by following left of centre economic policies which now need to be rectified by a conservative government?


    I don’t love the Tories, just hate NuLabour worse. Been an active member of the Labour movement since my mid teens, I am now 60. Walked away from NuLabour in 2003, when they invaded Iraq.

    Blair, Brown, Mandy and Ali flushed my 40 years of belief down the toilet with the NuLabour project. As far as I am concerned the Labour party died with John Smith.

    Does it matter who is in power, they are all the same. Greedy beggars.
  • Comment number 56.

    49# novoludo
    Roll_On_2010: do you seriously think that Brown and Blair caused the collapse of global capitalism by following left of centre economic policies which now need to be rectified by a conservative government?


    Left of centre - you are jesting …aren’t you.
  • Comment number 57.

    Roll-On: Well, I can agree with you there about NuLabour! But don't lose the faith!

    What we can see clearly now is that NuLabour was really just 'Thatcherism with a human face' - except as you say in Iraq, where it was Thatcherism with a Bushite face.

    The capitalist crisis has changed everything. People will never again believe all the free market tosh forced down our throats for three decades. They will never again believe that the captains of banks and industry can be trusted. They are revolted by the excesses and inequalities of the years of right wing dominance. And they will see that they had to turn to left of centre governments and policies (state intervention, bluntly) when extreme capitalism failed again.

    The shape of the new left of centre political consensus is of course not yet clear. But it is not Thatcherite NuLabour. And it is certainly not anything coming out of utterly bankrupt institutions such as the US Republicans and the UK Conservatives. They are toast. Obama really is now our main hope. Although I fear that he will be captured by the capitalist ideologues too.

  • Comment number 58.

    49# novoludo

    By the way, one of the first people Teflon Tony invited to 10 Downing Street, after the 1997 election, was Thatcher.

    Rather prophetic that Thatcher once said - Tony wont let us down.

  • Comment number 59.

    I all this extra borrowing and spending only gives a minor blip to the economy and we then slip back deeper, is there a blan B, borrow more?

  • Comment number 60.

    Yawn.

    Last time Labour was out for 18 years.


    1997 onwards.


    DEBT DEBT DEBT WASTE WASTE WASTE.


    BORROW BORROW BORROW.


    30 years out would suit me or longer. .

  • Comment number 61.

    A few labour supporters in the blog here.

    Some quite funny comments too.
    Let's get one thing straight, Nu Labour is responsible for allowing the market to explode the way it did.

    House prices outstripping income, people having to take greater risk in borrowing to get onto the housing ladder.
    Massive PFI plans and borrowing to fund government projects, forcing taxes to record levels.
    Record numbers claiming benefit, massive cost of an illegal war in Iraq.

    Destroying the pensions industry, selling off the UK's gold which is where we should be investing money now.
    Even taxing the low paid by aboloishing the 10p band.
    Now, from all that, I can't see a liberal or conservative politician anywhere.

    This problem lies firmly wiith Blair/Brown.
    They were in the hot seats for 10 years and they allowed the economy to expand too quickly, similar to a business that grows to quickly, it will fail.

    So to all you Labour supporters out there, the same old line, blame the tories won't wash anymore.

    It's time for a change of Government.


  • Comment number 62.

    I feel slightly sympathetic with Darling. Whoever took over from Brown was going to face a mess in the National Accounts.

    But remember the old children's favorite?

    Mr Darling was always trying to discourage his children from flying off with Peter Pan to Never-Never Land.

    This Mr Darling is suggesting that Never-Never Land is the only place to go - at least for a few years.

    Peter Pan Brown seemed to believe that borrowing was fine, as the debt would never grow up - at least not in his political lifetime...

    That's why HE allowed a weak, overstretched organisation (FSA, which he created) to avoid getting a grip on financial institutions. And, if the banks were allowed to get away with murder, that provided a smokescreen for the profligacy of his Treasury antics.

  • Comment number 63.

    Alexandercurzon: Seems like you have completely misunderstood wht has just happened.

    Free market capitalism is currently collapsing on a global scale. Its financial sector has had to be comprehensively rescued by governments. The real economy is now in an an utterly precarious state, with major automotive companies and others faced by potential bankruptcy if governments don't intervene there too. Small businesses across the western world are going to the wall on a mass scale on a daily basis.

    In short: this is not some little parochial event in the UK that we can conveniently blame Gordon Brown for! And the right wing parties that I assume you support are the ones who created this catastrophe (including the right wing Blair government that slavishly followed the US Republican line in all free market things). Your political and economic philosophy has utterly failed, and you are the ones who are facing the political wilderness.

  • Comment number 64.

    There have been many comments about "right wing policies" having failed - whether a Tory or Labour administration has been in power.

    "Policy" per se does nothing.

    It's the manner in which it is followed and executed that matters.

    Brown unravelled the ragulatory framework surroundng financial institutions - and submitted the FSA as the replacement.

    The FSA was supposed to oversee the capital held by banks. They obviously accepted the pretend money (derivatives invented on Wall Street - but also here - based on doubtful income from sub-prime loans).

    If they didn't understand the real "value" of this junk, they could have refused to recognise it as real "capital".

    That would have put an enormous brake on the sale / purchase of junk. The US banks would have had a huge problem - but they may also have slowed down their "creativity" and focused on real banking...

    That's the beef about Brown.

    Crazy "loan-to-income" and "loan-to-asset-value" ratios gave an enormous push to the escalation in house prices. That could have been controlled, reducing the huge level of debts.

    That's the beef about Brown.

    The UK has been a trading nation for a thousand years. Therefore always impacted by fluctuations in global economies.

    But the local debt levels are entirely down to the way in which "policy" is executed within this nation.

    The massive growth in economic activity in China, India, etc, has been down to "right wing policies" applied within different social environments.

    It ain't what you say - it's what you do. And it ain't what you do - it's the way that you do it...

  • Comment number 65.


    #63

    Why can't we blame Gordon Brown?

    As Chancellor and now as Premier he has failed to enforce regulatory compliance.

    He has failed to ensure that the FSA remained true to its statutory objectives.

    He has presided over a consumer-led boom. Anyone with any knowledge of history knows that bust follows boom, but in spite of that we had current account deficits as he spent more than he received in tax and asset sales, ie he assumed that the boom would never end.

    The current crisis points to a failure of each political party in each of the jurisdictions affected by the financial crisis. All leaders enjoyed the love and adoration that the boom showered on them.

    The Iron Chancellor. The Best Chancellor Ever. Etc Etc

    If there was a failure of regulation, it must have been a political failure, as regulators failed to either understand or have the political backing to address the problems being stored up and then unleashed.

    In the UK, Gordon's to blame. A free market is fine as long as there is regulatory compliance (I am actually a mixed-economy person). Light touch regulation is fine (such as the comply-or-explain approach and Code of Corporate Governance and the FSA's Principles) - as long as there is strong enforcement.

    As an aside, another aspect of regulatory control in the UK is senior management responsibility. All directors and officers in regulated entities need to be fit and proper to retain their Approved Person's status with the FSA. Despite the crisis, I haven't heard of any enforcement action against those who made the decisions that led to the crisis in our banks. Is that Bush and Thatcher's fault too?

    The Romans built our roads. Are they responsible for road deaths?

  • Comment number 66.

    Vote Labour - bankrupting the country since 1975.

    All that pain in the 1980s to build the semblance of a hard working, productive economy undoing decades of 'graceful decline'.

    It took 11 years for a man with class angst and a chip on his shoulder to destroy it.

    Explain how a fiscal stimulus works when those that have real income to shop, spend, etc, etc, know they are getting NONE of the benefit but all of the pain?

    Mark my words, this will not work.

    It will only retrench those that have the means and delay their spending further.

    What I'd like to know is why only the Tories are holding them to account?

    1976 and the IMF loan was the culmination of truly awful socialist policies.

    The sense of humiliation and the outrage were palpable.

    Never again, it was vowed, in '79 Labour were voted out for a generation.

    Well, despite all the promises, all the assurances and probably all their efforts - they have done it again.

    Labour CANNOT be trusted with the economy, they just cannot help themselves.

    There is no compassion in spending so much money that you end up putting millions out of work.

    We are about to surpass Sunny Jim's government with a current account deficit & record borrowing.

    The public sector had better feel some of the pain too as we can see precious little for our taxes, time to reform them properly.

    Personally, I'm beyond angry, I feel shame that this great country can elect a pack of shysters, spin merchants and half-baked incompetents as the very best of us.

    Aided and abetted by trade unions that have contributed to square root of nothing to the reform and modernisation that our public services need.

    A political force unscrutinised by its friends in public broadcasting, a force that plays the opposition personalities whilst stealing their policies.

    Fooled by easy money, have this, pay later.

    Oh, how we are paying now.

    They say first among equals.

    Yeah, if you say so.

  • Comment number 67.

    And following this rescue package, with associated short term gains for all , the Government will take the lead in opinion polls and call a general election. It's SO obvious! June?

  • Comment number 68.

    Of course we should blame Gordon Brown! The interesting questions though are: what should we blame him FOR, and what are the implications in terms of what policies and governments we need now?

    What we should blame the Blair/Brown regime for is continuing the insane low regulation, high laissez faire, extreme capitalism inaugurated by Thatcher and Reagan in the late 1970s.

    I agree with all the criticisms put on here about the failure of the FSA, proper compliance etc. etc.. Of course. We gave all that up in the ideological belief that markets were essentially self-regulating and that governments should leave them to do their own thing.

    So yes indeed - we absolutely should fundamentally run our economies differently from the way they have been run for the last thirty years. It's resulted in catastrophe. (Those who have any doubts about the global nature and extent of the catastrophe just pick up the Financial Times any day of the week and see the screaming headlines.)

    Let us indeed blame Brown. But why on earth would we suppose that the solution would be to elect the very same free market ideologues that got us into this mess in the first place? The US electorate has just seen the light and elected the left of centre Obama to make a clean break with the catastrophic economic policies of the last thirty years. We need to do the same. The tragedy is that New Labour was basically a continuation in economic terms of Thatcherism, and even the LibDems under Clegg finally and farcically drank the neoliberal kool aid.

    We better hope Obama and his team can lead us all out of the wilderness in the same way that Reagan lead us into to it. Otherways we are really in trouble.

  • Comment number 69.

    Government has stared to do the right thing now, hope there are tax cuts to increase the manufacturing base and it will spend on building the infrastructure.

    I do agree it mess the country in the past due to increased expense on benefits and uncontrolled immigration as well as destroying the manufacturing base.

    I will always support borrowing to spend on building the country but not to pay benefits.

  • Comment number 70.

    where is the money coming from?...the printing press....

    what happens when it does not work.........borrow (print) more money.

    result?........hyperinflation.


    borrowing money is what caused this mess.....low interest rates will not work....japan had 0% for years and the US has low rates!who exactly does a rate cut helps...not the 50% of people on fixed rate mortgages, not the millions of savers, not the small businessman as the banks refuse to pass on the cut.

    just how does a rate cut "stimulate" the economy? just how do tax cuts stimulate an economy....most people are in deep debt so the money will go to reducing debt not buying more gadgets (how many flat screen televisions does a family need?)

    savers have suffered too long from below real inflation returns, put the rates up and savers will start to spend the interest....now that will stimulate the economy and stabilise house prices at sensible levels...


  • Comment number 71.

    Nick,

    there is serious news breaking on the Today programme this morning about the death of a British, note British, citizen being killed as a result of a Drone attack by Americans in Pakistan.

    Excuse me but there is no war against Pakistan, they are a free and democratic sovereign nation state. So, what ever happened to the rule of law. At least the President of Iraq went through a trial before the Americans handed him over to the Iraqis to be executed. Now we have the obscenity of a remotely controlled Drone, Reaper or Predator, dropping bombs and killing a British citizen. So, Brown what do you think of this, and before you answer remember the killing of Mr de Menezes by British armed with guns firing dum-dum bullets.

    This is unacceptable but how complicit are we in this, have we given America permission to go around killing British citizens on the basis that it is part of the war on terror. Remember that Rumsfeld signed a classified order in the spring 2004 at the direction of President Bush. This order gave authority for American Special Forces (and I think British as well) to conduct operations in countries not at war with the United States.

    Now, whilst he is sorting out the economy and planning for an election then this is the sort of thing our Prime Minister ought to be asked questions about. There is a stain on Britain which is beginning to smell. If you want another example remember Harry in Afghanistan with his computer screen showing the attack on some freedom fighters.

    I suppose that Brown may well explain away the death of a British citizen on the basis that 'a sttch in time saves nine' another way of saying that the ends justifies the means.

  • Comment number 72.

    #68.

    It's clear that you cannot remember the 1970s and the socialist policies that bankrupted the country and left the dead unburied.

    Useless public services more eager to strike than work.

    Left-wing governments do not get it right. Capitalism is not a modern invention, it has existed for over 500 years, the Anglo-Saxon trading model, over 1300 years.

    In short, capitalism works.

    Socialism, 50 years. Even then, minds like Orwell struggled to define it.

    Socialism... mmmm... that doesn't work.

    The most successful economies in the world are low tax, small government, light regulation.

    That's regulation that works, not the kind of regulation Brown created.

    Brown is no capitalist, he's a former TV man and academic. He's never ran a business or part of one and neither has he employed people and it shows.

    Blaming Thatcher and Reagan, both of whom left office almost 20 years doesn't wash.

    Brown and Blair did this, they tinkered and messed with things they didn't understand. They inherited an economy in excellent shape and they had the benefit of a once in a lifetime economic virtuous circle.

    They not only blew the money and more, they wrecked the economy.

    We are all paying the price for it.

    Well, the client state isn't, they are showered with more of Labour's largesse.

    If you are moderately successful and aspire and strive, have a reasonable job, have a mortgage and run a car - you are Labour's cannon fodder. These are the people that will pay for it.

    These tax breaks are a bribe. End. Of.

  • Comment number 73.

    Brown says: "Of course politicians make mistakes, and I've got to be honest that we've made mistakes."

    (Possibly the first time he's ever said anything I can totally agree with).

    To make a mistake is human.

    To make the same mistake twice is foolish.

    To repeat and compound these mistakes over 11 years is utter stupidity - or worse.

    Let's hope that the British electorate don't repeat the mistake of believing this shambles of a government ever again.

  • Comment number 74.

    Confronted with the "collapse of capitalism" would any of the main political parties act differently? An attempt to protect the lowest paid in this current sharp economic downturn is the least a government can do. It strikes me as being unhelpful to take a party political line over this as understanding of the crisis and news of ways in which countries are affected changes daily.
    I like PaulS comments above @ 21. A nice bit of radical thinking. The only problem is, when there are gaping holes in things, when you close them up or close them down, whichever terminology you prefer, the hole will appear again elsewhere.
    The message is, for those who have worked productively all our lives, is, that what we have already done is not enough and we need to put our noses back to the grindstone and work even harder!
    It's the story of my life.

  • Comment number 75.

    Has anyone stopped to think that the tax rises needed to pay for this latest exercise may well have to be paid for by ourselves under the leadership of a Conservative Government. It gives David Cameron and George Osborne (if he is still in place) absolutely no room to put their own solutions into place without major surgery on spending and that won't be popular with the voters. Keep Brown and Darling in place I say so that they can clean up their own mess and fail spectacularly. Right now the two of them appear to be in a no lose situation. When the stuff hits the fan they'll be history for many years to come.

  • Comment number 76.

    If the Gov't had followed Ken Clarke's tax ands spending plans from 1997 onwards beyond the first two prudent years what would be the outcome now nearly 12 years later?

    I am not an economist but the answer is a a massive SURPLUS thus no need for borrowing! Just mega tax cuts...all funded!

    Why has no commentator or journalist done this comparison? Is it because it would be a stark and complelling reason for a Conservative Government...yet again?

    Anyway if the Gov't is going to borrow for the population to start spending I have an easy answer that will allow Darling to make a 5 minute speech.

    He's going to borrow £15B which would give EVERY voter in this country £500. So why not send out a £500 Gov't bond (voucher) that can only be redeemed in the UK on anything...houses, cars, clothes, even food and energy bills and any stage over the next 6 months.

    And tell everyone it is their patriotic duty to spend it!

    No doubt Crash Gordon will try to micro manage his national credit card funded giveaways at Labour core vote. His polisy will be totally political in a desperate attempt to shore up his vote and his faces being the PM with the shortest term in the last 50 years and facing the biggest defeat.

    Anyway, Darling will present Brown's final economic act on this country's road to bankrupcy on Monday afternoon..........

    no doubt it will be this country's longest suicide note in history...........

  • Comment number 77.

    In the past when ministers made mistakes they resigned.
    At the present time all Gordon Brown has fessed up to is a mistake in announcing "no return to boom and bust". He has always had a reputation for not accepting responsibility for anything.

    His arrogance over the last 20 years both as Shadow Chancellor and the Chancellor has destroyed any economic prospects for this country.

    The man is a disgrace, he should so the honourable thing and resign from parliament without a pension. He won't of course, but just doing what he has always done, blame someone else.

  • Comment number 78.

    NovoLudo POST 63

    Misunderstood?? HA HA

    This mess is as bad as the seeds that set the Crisis in Germany in the 20's/30's.

    The financial Crisis is down to the Government,the FSA,the MPC & B OF E.

    LACK OF FISCAL PRUDENCE .


  • Comment number 79.

    Novoludo POST63

    You assume incorrectly

    I am NOT right wing

    I loath all our current Political Parties

    Including the BNP.

    Regarding BLAME

    ONCE AGAIN

    Downing St ,The FSA,The MPC,& The B of E.

    THAT IS WHERE THE BUCK STOPS.

  • Comment number 80.

    Nick,

    we are all on the road to serfdom. I know that some people are saying let labour win the next election so that they will then be exposed as the chancers which they are. They have no policy they have no philosophy other than to stay in power, they want to be the leaders only they aren't. Labour must not win the next election, if they do then abandon hope, seriously!

    The only solution to this 'downturn' is to let it go, let asset values collapse, let them go until they find a new lower level, they will, trust me.

    It is only in the recent past that we have actually repaid the final tranches of the debt accumulated from America in WWII. Now we want to et into even more debt, but now with some very unpleasant people, you know who I mean. Well I don't want to be in debt to these people, why, because my father used to give me good advice and this one is more appropriate than a stitch in time, it's 'he who pays the piper calls the tune', think about it, China a dn Saudi Arabia, you seriously could not make it up.

  • Comment number 81.

    So Gordon's dad used to tell him 'a stitch in time saves nine'. The essence of the saying is that an early repair avoids a bigger repair later.

    But it is the borrowing and spending that has caused the damage, so increasing this is just increasing the damage. There is no sense in which more debt will repair the underlying problem, so it's clear Gordon didn't understand what his dad was telling him.

    So expect a big repair bill in the future, possibly so big it will never be paid.

    #74 newtactic:

    It seems from the latest retail figures that people are continuing to spend quite freely even without a stimulus. Now that there is much less stigma attached to defaulting, this may be the approach that many will take, so we are looking at a collapse of the social structure more than a "collapse of capitalism".

  • Comment number 82.

    Novoludo I take it you dont have a NAME?

    Perhaps you would like to work for me then you could deal with the nearly 20 Million pounds worth of bad debt we have had YTD .

    You could perhaps explain to my Chinese workers that its possible that we might have to reduce the workforce in 2010.

    You could also go into various Bankrupt customers and take our stock back.

    ###########################

    I feel you Misunderstand whats going on?

  • Comment number 83.

    Nick,

    may I suggest that Gordon go to his local library and get out a couple of films which may help him on his journey, 'Tunes of Glory' and 'Fame is the Spur' go on Gordon you may learn something useful.

    Oh, but not as useful as reading my comments on Nicks Glorious Blog.

  • Comment number 84.

    If only Gordon's dad had also told him "look after your pennies and the pounds will look after themselves".



    It would also be nice if Gordon's dad had told him "that you can't shut a door after the horse has bolted".


    Afterall the time for a "stitch in time to save nine" was a long time ago.


    Gordon is about to "throw good money after bad".


  • Comment number 85.

    DEBT REPAYMENT

    We only repaid the last payment for the Second World War a few years ago.

    Guess GORDYS legacy may take LONGER.

    ##########################

    "NO MORE BOOM & BUST" HA HA


    REAL SICK JOKE,WHATEVER.

  • Comment number 86.

    60 alexandrecurzon

    Last time Labour was out for 18 years.

    And you really thought that the people were doing well at that time do you. maybe you were chum but millions of others weren't,at least we have had ten years out of eleven of damn good living now we have to pay a little back thats Ok, but lets not let the Tories take us back to the wilderness that was the eighties and nineties

  • Comment number 87.

    POST 86

    18 years etc

    What we need is proportional

    representation.


    Regretfully the Bill this time will take

    decades to pay.

  • Comment number 88.

    A translation of Brown's boring ramble
    Is "the only way out is to gamble",
    He wants us to forget
    That we're drowning in debt,
    (That's tough even for Alistair Campbell)

  • Comment number 89.

    Brown's performance on Jeremy Vine show was truly sickening. The "public" who did get through had clearly been hand picked (was Mandy on the telephone's?). I was too late to phone , say I was 100% Labour...then get on the phone and ask him is he going to decrease quango budgets by 50%....this would immediately save £30billion and then he can really give tax cuts. All our private companies are cutting budgets but NOT ONE WORD for this government do do ANYTHING with their bloated budgets. The Guardian pages are STILL full of the typical non jobs. Cameron it is time for you to go for Brown....

  • Comment number 90.

    23 qwertywalrus

    #Not seeing my father for weeks on end because he left before I got up and didn't get in til I was in bed because he had to work so hard to keep the company he worked for from bankruptcy)

    With all the hours he was working how do you equate that with

    #the whole family sitting round a parafin stove in one room to keep warm,

    I lived through those times and if you say that you had that experiencs then you must have been under the control of Hatton a left wing extremist that Kinnock through out on his ear as soon as he was made leader of the Labour party.

    It wouldn't have mattered how many hours your father had put in, in the eighties thats if he was lucky enough to be employed, the company he worked for would almost certainly have gone to the wall.
    On top of that you had interest rates of 15% and inflation running at it highest level ever, compare that with now if you like or compare it with the last eleven years. but then you wont, it's a waste of time talking to you tories, with your blind hate!.



  • Comment number 91.

    Here's a useful suggestion from a British Colony on income tax; the Falkland Islands:
    Income Tax
    For individuals, the first £12,000 of income is tax free the next £12,000 charged at 20% and any amount thereafter charged at 25%. The complex system of individual deductions and allowances previously in place has been removed.
    I also understand that the first £12,00 is transferable between husband and wife.

    That would slim down the cost of revenue collection in the UK and get people off "welfare breeding" and back into work.

  • Comment number 92.

    It's incredibly arrogant to say you know that the government's measures are or aren't going to work, in unpredictable times like these.
    Sorry if I'm oversimplifying here but it seems like the choice is between a shorter but more painful recession (conservative), or a longer, less painful recession (labour). Maybe older, upper middle class daily mail readers have the luxury of deciding which recession they'd prefer, but there are plenty of hard working people and small businesses who don't. They need help now.
    Everyone on here who blames new labour and says the answer is conservative should remember this is the most conservative labour govt in history and all they did was carry on most of the economic policies in place since 1979. At least govt investment & the introduction of the minimum wage has made this easier for some people. What we need is a govt that treats capitalism as a system, not a religion.

  • Comment number 93.

    Post 92. Bedjockey.

    You say.........

    Everyone on here who blames new labour and says the answer is conservative should remember this is the most conservative labour govt in history and all they did was carry on most of the economic policies in place since 1979.

    That is simply not true!

    The point is that is Labour HAD followed those policies of SOUND MONEY and genuine balance budgets over the cycle then we would have a MASSIVE surplus by now...12 years later.

    It's the fact the Brown did NOT carry on with Ken Clarke's prudent fiscal policies and went on an 11 year debt fuelled spending binge which has got us into this mess.

    Everyone in the country will finally realise that if we had had 12 years of Conservative Gov't there would be something in the cupboard right now to help us out most definately.

    Bedjockey you have missed the point. Think again.........

  • Comment number 94.

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

  • Comment number 95.

    Brown and Darling have given up all pretence of sanity; they are in a hole and are still digging.

    He is going to borrow £100bn from us to give us tax cuts, money which doesn't really exist at all. He's obviously learnt new tricks about buying debt from his banker friends.

    The show goes on, nothing has changed.

    Parliament down the tubes, property down the tubes, banking down the tubes, insurance down the tubes, manufacturing down the tubes, retailing down the tubes; not a lot left is there?

    Get rid of the whole lot of them now, before it is too late and we go down the tubes.

  • Comment number 96.

    Ah Nooooo! #10 has stolen my clucks.

    I'll try another:- Keynes must be turning in his grave at the misinterpretation of his recession beating economic strategy.

    That feels better.

  • Comment number 97.


    the 70s vs the 80s and early 90s arguement

    extreme Socialism has failed and now extreme capitalism seems to have failed. So possibly Niether are the answer. Sorry to be boring but the answer is probably somewhere inbetween, A mixed economy. Its 2008 and people are refering back to pre 1978. Thats 30 years. A bit like being in 1980 and refering back to 1950! This Labour government is nothing like the 1970s and has learned the lesson of 18 years out of power. But maybe it has swung too far to the right and needs to pull back a bit. Conservatives have no answers. They just want power and they hope to win it with PR and punch and judy politics they think its their turn but have nothing to offer.

  • Comment number 98.

    Mr Brown is the only politician who can save the world from an awful recession. He should be made a Life emperor with A Campbell and P Mendelson assisting him to make sure the probity and honesty of the state are upheld at all times . Is that better Mr regulator ?

  • Comment number 99.

    Mr Nick, do you agree with your BBC colleague Mr Peston who clearly blames Mr Greenspan for the World problem but Mr Brown for the more severe impact in the UK, saying Mr Brown doted on Mr Greenspan and was his devoted follower, etc. etc almost slave-like.

    Also, now you have revealed the pre-budget, thankfully saving the rest of us from having to sit through the Darling drone, could you please round it off by revealing exactly what the tax rises will be, who will they hit and at what level, and when, they will start?

    Or is that a truth too far?

    Or is it in the small print that we do not need to read?

  • Comment number 100.

    No wonder Gordon the Golem wants to restructure the IMF. He wants it to be his streetwalker for when Britain has to go cap in hand to the IMF in a few years time.
    But isn't it a shame that Gordon the Golem didn't think about his father's "stitch in time" attitude somewhat earlier, such as when he was stoking the over-heating economy?

 

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