Cleaning up

1) Will voters blame Labour for the events happening on their watch or can they be convinced that only a party of the left will "clean up" the City?

2) Will economic fear lead voters to rate experience above newness and change? And, crucially:

3) Will the fallout of this crisis have ended before the next election or will we still being feeling it?


1) Of course they'll blame the man who was in charge of the finances for 10 years and who did nothing. If Brown can still try and bash the Cameron for the ERM I think you'll find that everyone else can blame Brown for this mess

2) No, they'll go for newness and change as they'll see what Brown's experience got us into.

3) No and yes (if you believe TAG) Yes and No in my humble opinion.

Browns stewardship has partially been at fault in leading us to this situation, the public are tired of labour, labour are out of ideas and are riven by dissent, an economic upturn didnt save the tories in 1997 and an upturn by 2010 will not save this government because they have been seen to be fallible, incompetant, rudderless and gutless.

In my humble opinion of course

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

Gordon Brown's job is to safeguard the interests of this country. On his own he is useless but I suspect we have all the best brains and experience on full alert during this critical time.
All he has to do is appear and try to talk sense.
No man is big enough or clever enough to sort this one out.
It has definately reached a point where we are stuck with him regardless so we have to hope those behind the scenes who are working on this know what they are doing.

I am really taken aback by some of your recent posts. Brown's future will be determined by MP's forming a judgement on whether he can win the next election. There is no long term about it. The election is only 18mths away. The public's mind is made up.

The reason that Brown has not been dumped up to now is the lack of an alternative with a plausible narrative and a strategy that works. It is nothing to do the economic turbulence of this week.

Thatcher was overthrown in the lead up to a war. There is only one thing stopping the Labour party, the willingness to do so.

So Gord intervened and saved the world did he? I'm sure the merger was entirely his idea, that he chaired all discussions, wrote up the merger agreement and all before breakfast when he started to draw up plans to retrospectively clean up the financial system. I'd like to see what HBOS and Lloyds have to say in private about this shameless opportunism? Silence the price of no investigation by the Competition Commission?

"Lehman brothers is a great company today that can both look backwards with pride and look forwards with hope. And in wishing Lehman Brothers the success it deserves for its future, let me thank you for the privilege of being here and formally declare this new building open."

Gordon Brown, opening Lehman Brothers' new Europen HQ in Canary Wharf, 5th April 2004.

Nick,

You say "In the short term, at least, Wall Street may well have saved Gordon".

At what price?

Brown's political career is not worth tuppence, let alone Billions of pounds and possibly tens of thousands of jobs lost.

The truth is that whatever 'happened' - and whomever is (or is not) to blame - it has happened on Brown' watch. (And let's not forget his 'abolition' of boom and bust of which he has boasted endlessly. Funny: I've not heard him repeat that one in recent days....)

He is a Jonah and he should go. (

Brown promises to clean up the financial system!

So complete meltdown and total annihilation guaranteed then.

11 years ago in 2008 I remember Nick Robinson blogging on the plan to belatedly clean up financial services – I wonder if some of the new words we use today could have been applied to that situation back then - for instance a 'Brownrun'?


Today Gordon is still PM and Nick has been doing a piece on all the new words that have made it into the Oxford English Dictionary during 2020:


Blogwonk - a diehard fanatic with fixated political ideas who seeks to censor all blog comments that oppose their view of the political landscape by referring comments to moderators.

Brownrun - a group of people that set off in a direction to find that the leader has no idea where they are heading, resulting in group wide terror and the soiling of underwear.

Taxstorm - a governmental policy to aggressively maximise tax revenues through a complex array of direct, indirect and stealth taxes, levies and penalties whilst at the same time appearing benevolent and caring through provision of tax credits which are purposefully hard to find, understand or claim.

Lagging - The use of gimmicks to divert peoples attention from a major predictable problem that you haven’t prepared for such as a financial boom and bust. Derivation of the term Blagging.

Plotocracy - government of the people by a rabble of individuals who mistrust each other and seek to continually change leader by destabilising the current leader, whilst following certain practices more associated with an autocracy i.e. the avoidance of elections.

Skewering - the art of blurring statistics, in circumstances where data has been collected over a long period, by manipulating all future measures to look favourable without the need of actually delivering any positive and discernable change in reality.

Topload - A policy of radical reform of a service through increasing the number of workers deployed, where the number of new roles such as managers, consultants, administrators and office workers should out number the increase in the quantity of and financial investment in frontline roles such as nurses, doctors, police, teachers and soldiers by a ratio of about 70 to 30.




Which goes some way to decoding this text message I received the other day:


"This plotocratic government have unleashed an 11 year taxstorm on us and have been skewering to cover up their toploading. Now they've been caught lagging us and the blogwonk next to me still hasn't noticed that we are all on the brownrun from hell. P.S. Fancy a pint?"

This is comment 10 and stiil all the previous ones are awaiting moderation at 2.13 pm!

The only issue at the next election will be the scale of Labour's huge election defeat.

Hold on, Nick. After 11 years of inaction and apathy from government in the face of the rise of hedge funds, wholesale debt on bank balance sheets, concerted shorting in equities markets, more and more evidence of collusive practices and banking industry concentration now - NOW - Mr Brown declares it is time to 'clean up the City' ?

This is arrogance gone mad. For 10 of those 11 years the man was even Chancellor for heaven's sake!

Talk about arrriving late at the party. He's barely out of the car...

A small but particularly dense group of blogwonks from the past has caused a black hole to form, creating a portal in the space time continuum. Words from the blogosphere from 2020 are leaching onto the 2008 blog.... (and to think the people of the day were worried about CERN):



Diresale - the sale of a valuable stable asset at the bottom of the market during the good times, that is normally reserved to underpin loans that provide liquidity and stability during bad times as a mechanism to prevent, for instance, the firesale of large organisations such as banks.



Zpptttttpppp.... oh beardy blogwonks of the past.... will you ever learn?...... Zptpptptpppzz.... SPACE TIME PORTAL CLOSED

The Government allowed this deal to go ahead as long as Lloyds and HBOS kept lending levels high. Surely that is just madness? And even if they manage to keep the money moving why has the Government so readily allowed for competition laws to be so casually swept aside? Llyods have been trying to buy HBOS for years and now Brown has given them exactly what they wanted (for a lot cheaper than they would have otherwise gotten it had he followed Americas example and stopped short-selling) just to give him a few soundbites for his speech next week. "He [Brown] told the BBC: "I think we've got to look at where there has been irresponsible behaviour and I've said for some time that we need reforms in the system." Well you were Chancellor for 10 years you dithering idiot; why didnt you do something about it then?

We will regret this in years down the line, and if the Labour party had any guts left it would be crying foul just as loudly now as it would had a Conservative Government done this. Althought maybe years down the line we will see the irony that had the BoE been giving money away as though it were candy when Northern Rock were in trouble we wouldnt be in this situation of allowing foul practice now.

What on Earth is the point of John Prescott going on to the radio and lecturing about... Oh hold on! What on Earth is the point of John Prescott?

Nick, you ask interesting questions..

Will voters blame Labour for the events happening on their watch or can they be convinced that only a party of the left will "clean up" the City?

Not for the events themselves...but certainly for the inability to set aside in good times for the rainy day.

Will economic fear lead voters to rate experience above newness and change?

I think the majority of voters had long since decided enough was enough before this crisis hit. Lets face it, it's been one disaster after another. There's no appetite to cut more slack.

Will the fallout of this crisis have ended before the next election or will we still being feeling it?

A long spell in the political wilderness awaits!

Those are all relevant factors I'm sure, but in my view the way the 'media' report/invent the news will be at least equally important.

The whole tenor of recent reporting has been that Brown is in some way responsible for the global financial turmoil, as if his policies could somehow have brought about either the downfall of major US institutions, or insulated the UK from the consequences. For example, on the BBC News Channel this morning Alistar Darling was being interviewed by a female presenter whose name I do not know. He was obviously, and quite rightly, completely taken aback when she asked him why, if this was a global problem, UK banks were being disproportionately affected - so isn't the government (sorry, 'this government') to blame? The mind boggled.

I have come to expect this sort of silliness from certain contributors to this blog, but if the same mindset has started to infect the BBC newsroom then Brown is certainly doomed.

I am not personally much enamoured of Brown, and his general performance over the past year has not been good, but a global problem needs an international response. In that context, there is no question in my mind but that Brown is the current UK politician with the experience and international standing best placed to help to achieve the result the world needs.

The obvious question here is, that if Gordon Brown has only just realised that the banks have been lending irresponsibly, then what on earth has he been doing for the last 11 years?

This is exactly the proof that all you labour voters out there were asking for when you ask "what's he done wrong?" - he's admitted it; he's openly admitted that he didn't understand, monitor, or regulate any of the financial systems during his 10 year stint as chancellor or during his 1 year stint as PM.

If that's not a case of reckless negligence and a good enough reason to physically eject him out of power, then I don't know what is.

Wall Street hasn't saved Brown rather the knowledge that Labour are well and truly doomed at the next election. This means that existing MPs believe that whoever takes over will suffer a quick exit after a General Election.

That being the case, any potential candidates for the main job will keep their powder dry and then take over when Brown's given the boot.

Many posters have said, the MP's are looking at 2ish more years of salary against almost certain unemployment andd are voting wallet.

Of course, I could be wrong. Our MPs could be bound by principle and do what's right for the country.....

Oh, what AM I saying?!?!?!?!

My guess is that the voting public will see fat bankers and speculators feeding their pension portfolio's to the brim before declaring themsrlves bankrupt.

Tories and this ilk go hand in hand.

Socialism to the rescue, as is the norm, when 20th Century lessons are once again enacted.

If it wasn't for a Labour Party of Government, what would we have as an alternative to decency, the friend of the fat banker and speculator?

Cameron has gone AWOL. Good!

Gary

'Clean up the city?' It's a little late for that methinks. Surely all this can't have come as a surprise. Too much time mismanaging whelk stalls I guess.

so the door is being shut. but the horse has bolted.

question nick - if we still had our gold reserves, could the government have provided loans to hbos and negated the merger (and now probable job losses as duplication of roles between banks are removed)???

You also predicted the same thing a few days back, just before a whole load of MP's rebelled including a minister. In fact Nick, your usually wrong.

So Brown can cut the red tape when he wants Nick.
As for cleaning up the city, all the bankers (the supposed to be) prudent people making sure our money was as safe as houses, oop's scrap that, steady as a rock? no, no forget it.
They had a job to do and failed, they played fast and loose with the money and had to be rescued.
Brown cleaning up the city, putting banker's right on how to manage money!
is there something wrong with that picture or is it just me?

How about a posting looking at what Gordon has proposed by way of actual policy/action to clean up the banking sector?

How about a posting looking at why Gordon failed to see the problems in the banking sector that have clearly been there for a good number of years?

How about a posting looking at the failure of Gordon to create a workable regulation system for financial institutions?

How about anything that doesn't suggest again that Gordon is safe?

Bring us some detailed analysis as to what has lead us to this position. Go on - I dare you.

This comment is awaiting moderation. Explain.

Don't be silly the man is responsible for hiding away 110BN pounds of PFIspending as 'capital' which will, in fact, end up being paid for by our children.

He presided over the biggest ever expansion in government spending and persuaded all the banks to run with him.

He chose to overlook the biggest housing bubble in history and the biggest unsecured credit expansion in history.

Rescuing HBOS and Lloyds won;t alter the fact that many secured 130% mortgages against their proeprties now falling in value.

It doesn't alter the fact that bank balance sheets are shrinking and mortgage debt is simply not available anymore.

No more eating the house, no more soending money we haven't earned and no more voting newlabour. Goodbye Gordon Brown.

Would this be the same party of the left who have done all in their power to stop the clear up of MPs expenses?When he can clear up his own ministers running rings around the expenses commitees I might have some faith in the hot air that he is spouting now.

I've been taking a break as I don't agree with Nick's analysis or the mood of comments. It's complicated but I generally think Britain is a mess. From its economic fundamentals to the more everyday leadership and communication skills, I don't think Britain has what it takes. It's odd that a former merchant navy man and former alcoholic are setting the pace by creating an organisation that focuses on and promotes these very qualities in the interests of promoting a fourth and unprecedented Labour government at the next election.

I'm a bit puzzled at the collapse of HSBO and takeover by LLoyds TSB. It looks like more of the same irrationality and fear that both Dave Rogers and Timothy Garton Ash discuss. The banking system conspired against Northern Rock and the media helped kick them over the edge, and the unapologetic but shamed bankers got their pound of flesh. Better regulation and more settled markets can help but the fundamental issue is people. Unless people's monkey brain is directly challenged then abuse will continue.

I've been a prominent campaigner against Phorm's Webwise system, a technology that sits between the user and the internet, snoops their traffic, and sells their data to the highest bidder. The regulator has taken strong steps to get with reality but they still don't get that the law says that people must not be signed up to it by default, and that full and informed consent must be given before any customers data is snooped. And that's before we consider that website owners intellectual property is being stolen by Phorm. Again, the problem isn't law. The problem is people.

Nick

BBC reported Wednesday morning

FSA stated that HBOS was:

"a well-capitalised bank that continues to fund its business in a satisfactory way"

BBC reported this morning

"Alistair Darling added that without the deal the outlook was "very bleak indeed...We were onto their (HBOS's) problem for several weeks. It didn't just suddenly happen,"

There seems to be a contradiction.

These are two parties to the tri-partite arrangement that Gordon Brown set up when he was Chancellor to oversee the financial systems in this country.

That same tri-partite group is the one that firstly allowed Northern Rock to follow a reckless business model and then could not reach agreement on what was best for Northern Rock.

Why is it suggested that Gordon Brown, who managed to come up with such a dysfunctional tri-partite group, is best placed to see us through this mess, or that he is the right man to bring in policies to "clean up the financial system"?

Moving forward, having waived through a merger to allow a single banking group to have market shares in current accounts, savings and mortgages of 30%, what happens in a year or two, when another group wishes to merge to compete with Lloyds, and that group will also have post merger market share of 30%+. Has the Government set out the stall for the country to have just 3 dominant players in mortgages, current accounts and savings in a few years, that between them will control 90%+ of the market?

Brown is finished, the New Labour experiment is completely discredited and the next election will be a disastrous defeat for Labour.

No wonder nobody wants the top job at the moment.

Like me, I suspect most people simply want Brown gone.

Like a football team that keeps losing. "We need to do something, I know, lets sack the manager!"

The government could offer me the Moon on a stick, but I'd simply respond "hasn't he gone yet?".

Gordon had his hands on the purse strings when things were going well, but didn't prepare for hard times (convinced as he was that he was an economic genius, instead of just being in the right place at the right time).

He was in charge when bad things started to happen.

"We need to do something... I know let's sack the manager!"

As an aside I also found out that the talk of 70 MPs needed to force a leadership contest is slightly misleading. It's 20% of MPs.

I think it's important, as I have some doubts that Labour will return 70 MPs next time unless there is a change at the top. I had visions of Brown being "President for Life".

re: 19 GaryElsby

So you're saying that all this is the tories' fault then?

The fact that your glorious leader who's been in charge of the money for 11 years didn't understand the banking system isn't a problem, the only problem is that greedy people like money?

Your party is *so* extinct in 2010.

Thousands of jobs could be lost in the wake of Lloyds TSB's £12.2bn takeover of Halifax Bank of Scotland (HBOS).

While Lloyds dismissed claims that up to 40,000 jobs faced the axe as "ridiculous", it refused to rule out compulsory redundancies.


But dont worry Tractor production is up (in Italy)

And to comment on Nicks peice.
Isnt it nice that Gordon has helped out his banking buddies by allowing a merger that they know would not ordinarily be allowed under competion rules because it creates unfair competion.
In the long run everyone who uses a bank will suffer because of this merger and it wouldnt surprise me to see legal challenges from some of the other big players in the banking market in the UK over this.

Not only that, as he has seen fit to flout the rules on this where else is he going to flout the rules, on calling an election perhaps, lets face it he has a by-election outstanding in Glenrothes, how long can he legally not call it?

The spectacular and dismal failure of the government across a whole raft of policies has little to do with the global economic meltdown. While it would be quite wrong to place the blame at Gordon Brown's door, it would be a travesty if he were allowed to use it to deflect attention from his manifest failings as Prime Minister.

Gordon Brown is the perfect person to clean up the city.

In 18 months he'll be unemployed and with his history of failure the only job he could get would be as a road-sweeper.

Gordon Brown and Alistair Darling in response to Northern Rock crisis introduced, emergency covert legislation to prevent a failing bank from going bust. They said, it was necessary, as they didn’t have the legal powers and authority to stop the crisis. Well, they would have to say that, wouldn’t they? – to avoid Brown having to face a charge of negligence, inter alia. BUT THERE ALWAYS HAS BEEN LEGISLATION TO PREVENT SUCH OCCURRENCE IN THE FIRST PLACE. Now Brown is telling us that he is going to clean up the city, at least he admits it was dirty most foul.

...begs the question who made the mess that Brown is "clearing up". I'd suggest the previous chancellor could be culpable...

Have all the BBC moderators been 'let go' due to the economic crises?

They can't all be at lunch.

Maybe they don't like the way the public treat Brown...

O thank goodness for a knight in shining armour. Luckily Mr Brown came along with these financial measures to save us all. Now we should throw out the useless prat who was running the financial regulatory for the last 10 years!

Who would think that a mere Prime Minister with AB-SO-LU-TE-LY no power at the moment and is on an all time low in the polls, could actually think of a clever little plan like this.

Sort out "the City", mr Brown, as you should have done AGES ago, when you were responsible for the countries finance...

So, here is a man who was chancellor for 10 years and now he declares he will take action to clean up the city...too little too late mate !

16. jimbrant

Of course Brown isnt responsible for the meltdown, just as he wasn’t responsible for the boom.

Trouble is when you claim responsibility for positive, the people just howl when you try to distance yourself from the negative. Tis the price you pay.

Brown has been a very mediocre PM, he was a dire chancellor and that is really why he deserves our scorn.

Nick

When will you get it.

Brown is only safe because the rest of them aren't completely insane.

No one of any standing is going to want to be leader when they get anhilated at the next election.

No one of any standing is going to want to get off the Expenses gravy train early.

The vast majority of those that survive the next election will be in a better position with Gordon in the wilderness and not able to back stab as he did to Blair.

The option for the survivors will be to become the hero and revive the party or to jump ship to the next closest lifeboat to them, probably the LibDems.
I can see Blairites donning their lifejackets now and preparing to jump to the Orange right wing party. Clegg is pulling alongside as we speak.

Yawn....

Come on Nick, if he lasts until Spring it won't be because of some incredible financial spring clean. It'll be because the Labour party hasn't got the 'cojones' to stick the knife in. He had 11 years as Chancellor to 'spring clean' the financial system, yet he did nothing except spend any surplus we might have had on ID cards, NHS computer networks and a whole host of needless schemes.

Now, behind in the polls, he will grind out a lonely path to 2010, where he will be defeated in the biggest landslide in British post war electoral history as rising unemployment, rising inflation and rising union power close the curtains on a Labour government, just as the last Labour government ended.

My god, the Labour party conference is going to be fun to watch. It would be comedy, if they weren't currently running the country.

If Brown was a proper Labour politician he would NEVER have trusted the City (aka The real Tory Party) and would have done something about their outrageous bonuses and greedy braying as soon as he became Chancellor eleven years ago.
Instead, despite repeated warnings from his core supporters, he let them reign unchecked as they rode roughshod over most ordinary people's sensibilities.
Only now does he shut the stable door - long after the horse has bolted, taking most of the hay with it...

Since whole tiers of the banking system will have disappeared and no-one will be too sure how what is left will work, I don't that cleaning-up the banking system will be that easy. I suspect that the focus will be on making sure that recent events won't happen again (unlikely in any case) rather than legislating for the next crisis.

Compare and contrast these events with the glacial progress of the Japanese banking bust that took 12 years to resolve. This time, events are unfolding with lightning speed and as such the bottom could well be reached very soon (however deep the bottom may be). Already the prices of oil and other commodities are falling much faster than they increased and this will work through into lower retail prices before too long, allowing interest rates to fall. If the Government can avoid the risk of deflation (which I think will become a serious risk). Things could look very different by the next election.

I think that GB in too deeply mired to win next time round, but it is entirely plausible that Labour will avoid the wipe-out that current polls would indicate.

For Cleaning up the financial system

Read closing the door after the horse has bolted

But surely it was Gordon who set up the current regulatory system. Having mucked it up once, why should anyone believe he'll do a better job this time. The man is incompetent and should resign immediately.

Nick, stop repeating Govt spin:

So the prime minister is promising to clean up the financial system. He is calling for global action. He intervened directly, to facilitate the Lloyds takeover of HBOS.

We now know Lloyds were the proactive party with HBOS. The Govt merely reacted to events.

If he is promising to sort matters, why does he not act? All words no action. Or to be precise jumping on someone elses success.

Yes Brown will carry the can,I don't think the toadying BBC will be able to save him
His hollow boasting about what he did for the country,abolishing boom and bust etc etc has proven to be just that.
I heard the other day on radio four a commentator bemoaning the fact that inflation was 5-6% whilst hepfully mentioning that in 1991 it was 14-17%without telling us what relationship that rate had with the rest of Europe at the time.Pathetic partisanship ,me thinks

Re. the unpredictability of the future - the meltdown of the global banking system *has been predicted, and with a rather down-to-earth rational explanation of exactly *why - but was only ever highlighted in the more radical left-wing press - check your Socialist Workers of a decade or so ago if you don't believe it.

Any fule kno you're going to come a cropper if you sell folk a mortgage that is 10x their income, and it doesn't matter if you parcel that up and sell it on to someone else, hidden among other rubbish...some day the music will stop and you'll be holding the parcel.

But now the pundits and the players pretend it's like some natural disaster that fell from the sky, rather than the direct result of the all-devouring greed and dishonesty of the super-capitalists.

I have come to expect this sort of silliness from certain contributors to this blog, but if the same mindset has started to infect the BBC newsroom then Brown is certainly doomed.

The same asset stripping and emotionalism that's infected big business, media, and society gripped the British military. This resulted in the embarassing shambles of the Iranian border incident. The military took a step back to take a look at themselves, and after a damning internal report have got on with sharpening their act. I think, we'll all agree, this was both necessary and timely. The remaining question is what folks afflicted with similar mediocrity are going to do. Are they going to keep making excuses and blaming someone else, or are they going to get over themselves?

I've already commented that I don't buy into the general approach the dominant powers in business, the media, and society are taking. It just doesn't work and, I think, a lot of the noise is a combination of opportunism and greed. The world is changing and the folks who won under the old way don't want to let go. Well, they had their turn at the wheel and there's a chance another Labour government can finish what needs to be finished. Folks can roll with it or stick their heads in the sand and bottle out, but my mind is set. Gordon Brown isn't perfect but he's the only show in town as far as I'm concerned.

Behind the crud and sloganised emotionalism, there's two great stories promoting innovation and giving a shit and, I'm sure, most folks will agree this is a better path to follow than arguing and posturing. Forget law and gossip they're only a reality if you believe it. Perception is reality, so if you change your perception you change reality. The goals and sentiments you express, and the outcomes that leads to can be different but only if you think and feel different. Indeed, the great strategist Miyamoto Musashi comments on getting the boat to port versus patching the holes. Well, do you want the real deal, or a feelgood bandaid?

Nick

You start your second paragraph:-

"Thus, his economic strategy and his political strategy have become aligned."

That sentence makes no sense. What economic strategy? what political strategy? and how does what you say in the first paragraph demonstrate that they are aligned?

This appears to be a phrase plucked out of the air and used at random... Completely disconnected from what preceeds it...

Can you expand, so I may better understand what you are trying to say? At the moment it reads as if written by a post John Prescot.

If I google the phrase will I find where it originally comes from?

Well it's an interesting point of view, Wall Street saves Brown, Gordon certainly now has the chance to take back some control of the reigns of what seemed to be a runnaway horse. Unfortunately like his dithering this time last year about calling an election I think he'll be found wanting. There may be a brief respite as the Labour party hold back to see which way he goes, his undynamic nature probably means nowhere, ultimately his cautioun and indecision will be his undoing. In the short term then probably this crisis will help Brown through the conference season and probably into the spring. Brown will percieve he has regained some measure of control whether he actually has or not.

A ringing endorsement for Gordon from John Prescott....

His position must now by unassailable.

'unpredictability in the future?'

Are you blind? We are all doomed.

Out of touch with the voters, as always.

So far as the average labour supporter is concerned (assuming that sub-species of homo ignorans hasn't finally gone extinct) "regulating the city" has nothing to do with the price of fish.

Or with the price of chips, booze, fags, petrol, houses, etc, etc...

Only "new" Labour could decide to demonstrate its progressive, forward looking image by dragging Prescott, Campbell, Mrs Kinnock, and some other has-been out of retirement.

Dont panic Mr Brown, here come the cavalry

https://www.newstatesman.com/uk-politics/2008/09/labour-party-term-campaign







Now you really know its over.

Nick

Any truth in the rumours that Gordo is very pally with the Chairman of Lloyds and indeed tried to pursuade them to rescue Northern Rock? It would be interesting to have a bit of investigative journalism as to how close that relationship is/and whether there is any truth in the rumours that there is a link to Labour fundraising? I am sure it wouldn't happen on Gordon-straight-kinda-guy-Brown's watch would it? I am sure not!!!

If I promise to finally do that uni assignment that was due in 7 years ago, can I be Prime Minister?

£185 Bn increase in net debt between Q2 1997 and Q4 2007. Probably add another £40bn to that for 2008

Yeah, Brown really is the man for the job.

Nick, why don't you and Paul Mason and Evan Davies ever challenge the Labour line that we are "uniquely well placed to weather the storm because of our stewardship of the economy over the last 11 years" by throwing these truly awful debt figures at them? They would be even worse without the 3G sale!

Germany spent the last 6 years eliminating debt, the US has a significanlty lower debt level so can act when there are problems, Brown has to tear up - his - rule book to get him out of a mess. Yet you never mention this - why not?

So Gordon is going to clean up the City. Two questions

How long will that take?

How long has Brown got?

Today's poll shows Conservatives at 52%, Labour 24%, LibDemsl 12%.

Will Labour MPs put their jobs or the Country first? With most of them self-serving gutless specimens I suggest that they will put themselves first and the Country second.

That means that Brown will not be around to do anything. In the time he has he will be hard pressed to form a commission to make recommendations, then be gone.

A 28% lead in a General Election would be a total humiliation. And I haven't met anyone who says that Brown or a Labour government has a chance, nor will they vote for them.

The major thing that needs to be done to prevent unstable markets is to curb short selling.

The response of our financial genius ex chancellor current PM Gordon Brown is:

"But there are no signs Mr Brown will follow the lead of the US financial regulators and curb "short-selling" - the practice which allows speculators to profit from falling share prices, which critics say fuels financial instability. "


Right man for the job, I dont think so!


As soon as the current crisis is over HBOS/LloydsTSB needs to be broken up again The only other alternative would be to allow the other backs to form 2 or three major institutions themselves and that is unthinkable!

Nick:

I don't think you get it. This isn't a small economic problem that Gordon can fix, and neither is it a bolt from the blue that has hit an otherwise rosy economic outlook.

Let's be clear on what the problems are:

1. The UK has understated inflation (and consequently overstated GDP growth) for years, telling the public that we're getting richer when the public knows all to well that we aren't

2. We've allowed our trade balance to become dependent on the financial services sector which is now being battered, and will leave a huge hole in our trade and fiscal balances

3. Our utilities are foreign-owned

4. We do not export very much in terms of physical goods

5. We've depleted our oil and gas reserves, and are now importers of both

6. We've no idea how to replace our power stations before the lights go out

7. Our public sector finances are shot

8. We have a cripplingly expensive bureaucracy and public sector

9. Our economy depends on consumer debt hitherto 'secured' against artificially-inflated house prices which are now crashing back to earth

10. Our government has up to now been run by idiots

11. We've been rumbled by the forex markets (just take a look at the trade-weighted Sterling index over the last year)

How, exactly, is GB going to sort out that lot?

An Australian hotel offering free drinks to women who took off their underwear is to be investigated by alcohol regulators, authorities say.

The Saint Hotel in Melbourne said women who hung their underwear above the bar on No Undie Sundie would receive A$50 ($39; £22) of drinks vouchers.


I'm off to Aus before they close this place down

Robin Lustig's blog is reactively moderated and he does not seem to be overloaded with abusive posts. Given the evident crisis in the moderation arrangements, perhaps we should be given credit for being adults on other blogs as well?

#32 getrid of gordon (duh!)

You ask me if this financial banking crisis is al the Tories fault?

Well it ain't exactly Karl Marx's fault is it?

Bankers are Tories, speculators are Tories and they all have fat salaries and pensions to swill in!

They have yachts in St. Tropez and holiday homes in the Med.

What makes them stand out from their customers is that their customers have none of the above and have to contend with their house and home being confiscated by (those in the med on yachts).

Comprende?

Cameron's system is the Capitalist system and this is the only TRUE policy that George Osborne will offer this Country in 2010.

Please Observe the Socialist movement coming to the rescue of the innocent poor, once again.

A policy that is guaranteed.

2010 is too dodgy to allow the carpet bagging Tories to dominate.

Gary

What is particularly gratifying is that the newlabour apologists have turned to the oldest trick in the book and the last resort of failing governments - blame the media.

The fourth estate has its job to do and is justified in raising questions of performance, delivery and strategy with respect to all political parties.

In all three repects newlabour fail miserably.

To call Gordon Brown a man of international standing (that's you jimbrandt) is to invite the simplest of retorts:

He couldn't be bothered to turn up to sign the Lisbon treaty.
He immediately upset the Americans by distancing himself from them a year ago.
He has spent fifteen months blaming them for what is in fact a self inflicted wound - an unchecked credit expansion, public and private.
He aligned himself with Alan Greenspan - responsible for the credit expansion in the US.
He managed to back Barack Obama publicly before the US election had been held.
He failed to turn up to the opening ceremony of the Olympic games when every other leader was there.

Now he wants us to believe he's a man of international standing? Does he really believe he'd be welcome in the US after spending fifteen months blaming them for our own troubles?

He went to China and failed to secure a single order for British industry despite a plane full of representatives from British industry.

The man is a walking disaster zine and you should not be disappointed with his performance you should sack him.

As for #19 "socialism to the rescue as is the norm" has it occured to you what is happening all over the planet? Socialism is being kicked out all over Europe - Germany, France, Sweden, Italy, Denmark, Sweden ahve all booted out failed socialist regimes who spent too much during the good times and had no policies to extract them from the mess. In the US it has taken only the faintest glimmer of life in the Republican campaign for Obama to stumble and show there is no substance behind his one word policy of 'Change'.

The reality is for all newlabour posters that people vote in right wing governments during periods of economic instability so unless Gorodn Brown can pull several rabbits out of a dozen hats in eighteen months and take his hands out of the till, a tory adminsitration is an inevitability.

Blaming anyone but themselves for this mess is just adding to the weight of public opinion that Gordon Brown has been economical with the truth during his eleven years at the helm.

John Prescott is so agressive - on Today this morning he reminded me why i wanted Blair to go and I had forgotton what a rude and ignorant man he is.

I am well and truely an ex labour voter

#26 Robin - I see you are still peddling your lies about the level of debt.

As I've note in previous postings, the £110 billion value of PFI schemes are not all capital expenditure i.e. debt.

The independent IFS note in their 2008 Green Book that 30% of the value of schools PFIs and 50% of the value of hospitals PFIs are not debt, but payment for future current spend (i.e. caretakers, cleaning staff etc).

On a very conservative assumption (as schools and hospital PFIs make up the vast bulk of all PFIs), at least 20% of the value of PFIs is not debt. This gives an estimate that PFI debt is a maximum of 80%*£110 billion=£88 billion.

On your assumptions, the debt would be massive, as we should include the present value of all projected total government expenditure in future years as debt. I think most economists and accountants would find such an assumption as completely ridiculous.

I appreciate that this requires some basic mathmatical knowledge to work out, that it is apparent from previous postings that you do not have (were you schooled under this Government or something?).

Your (implied) points on the desirability of transparency are valid though - the Government does not meet its 40% net debt rule and this should be made a lot clearer to enable people to hold them account properly. PFI does (in theory) shift risk to the private sector, but it should be accounted for properly.

Your points on bubbles are valid, though I don't see any other politicians suggesting intervention here or the UK population demanding such a thing (e.g. the imposition of capital gains tax on housing may help avoid bubbles; can't see that as a political winner). Isn't the Conservative solution to offer greater tax breaks to housing which will further distort economic activity (e.g. abolish stamp duty).

RE 130% mortgages - the exception rather than the rule I'm sure. If you looked at the loan:value ratios on most of the mortgage books of banks then it would require quite a catastrophic combination of plummeting house values (down 30-40%), high interest rates (increasing mortgage repayments) and high unemployment (stopping income coming in) to cause a massive problem for the economy.

ps how do you put hyperlinks in posts (those who have?)

No 32
Don't think he was that categorical. However see mine of yesterday. This mess won't go away before the next election. Come 2010 and inflation, interest rates and unemployment will still be high. Public loathing of bankers, financiers, hedge funds and the rest of the demons will still be strong. Will the punters vote for a party which for over a century has championed the rights of landowners, industrial moguls and, more recently, big business and laissez-faire capitalism.
Possibly they will, but with less enthusiasm once Cameron has been examined. Those feeling the pinch will not readily identify with a man of privileged background and independent means who clearly will never have to share the punters' pain, however many hugs he gives and however many cups of tea he drinks. To they guys in the pub (of all political persuasions) Cameron is as remote as a martian. A battered and contrite Brown who has been seen to at least stay afloat through the storm may yet have his fans.
Or is Davis waiting in the undergrowth? His departure to fight the good fight of civil liberties always seemed to me a bit bogus.

THis whole financial crisis has come about due to US banks making huge loans to people who couldn't pay it back.

No amount of unilateral banking reofrm on the part of teh UK would have prevented US banks failing and therefore UK banks who rely on the US giants for their credit.

There is an interantional banking board who deal with this, it should have been this board that did something about the financial markets.

Aren't you forgetting that Gordon Brown was the man who:
i) decimated the best pension industry in the world by removing tax credits in 1997
ii) sold off the nations gold when it was at its lowest level.
iii) poured billions into the NHS and succeeded in making it worse
iv) poured billions into education and made it worse
v) introduce over 60 stealth taxes
vi) saw council tax increase way beyond the rate of inflation
vii) adjusted the way inflation is calculated to make it seem lower than it really is.
viii) can't ever answer a straight question
ix) has been noticable by his absence over the current crisis.
x) will (shortly) retire on a state funded, gold plated pension that he has contributed so little to.
xi) has been responsible for creating a bigger divide between England and Scotland. ( he is hated South of the border and even more so in the North who now want home rule)
xii) appointed a part time defence secretary
xii) has become the most unpopular PM ever.
xiii) has lost control of immigration
xiv) has demoralised the police force
xv) has lost the confidence of the armed services.
xvi) has lost the confidence of his own party
xvii) has done nothing to stop many major companies being taken over by foreigners
xviii) has ignored the power supply (electricity and gas) to the extent that there is now a very real possibility of major power cuts in a few years time.


and this list is just for starters. The man will go down in history as being the worst ever Chancellor/PM who managed to sell Britain on the cheap, drag it towards being a third world country and ensure that unless drastic measures are taken NOW the native British will be in a minority and the immigrants (both legal and illegal) will be the majority.
This is NOT the UK I want to live in.

Gordon Brown is one the leading advocates of deregulation. He even set up commissions to report on deregulating the markets, and did indeed act on those reports.

Gordon Brown says he will now clean up the mess, a mess that he was primarily responsible for. Who believes him? After 11 years of inaction to curb the markets, nobody!

It does not matter who is the PM, or whether it is the Labour or Conservatives who are in government, as should we have needed any further evidence, the country is not run by the politicians, but the relatively small band of powerful individuals who decide the fate of the person on the street by the size of the profits, which can be made.

It is incredible when millions of people will be made unemployed, lose their house etc, these so called `masters of the universe', and their Friedmanian like minded cohorts, appear on TV and tell us we should be thankful that a `healthy correction' of the values of companies and the housing market is taking place.

Before anyone states the obvious fact, I am not an economics expert, but neither am I stupid.

#19

"Socialism to the rescue."

You have got to be kidding ! The Iron Law of British politics is:

"Labour governments always end in economic disaster."

Haven't you noticed ? The electorate certainly has !

I can't believe Brown and Darling taking the credit for LLoyds saving (eating) HBOS. I suspect it was signed and sealed before they even knew about it. As for cleaning up the city and curbing speculators, the Labour party, which is on the verge of insolvency, will have to rely rather heavily on donations from these very people if they want to take part in the next general election; so no way will the grandees of the party (with the good of the country at heart) let the Downing street comedians do anything to upset the city. Now we have a rallying call from the gross John Prescott calling for unity in the Labour party whatever the cost to the country, probably he wants to wring every last penny out of Westminster before he is forced to retire.

That sentence makes no sense. What economic strategy? what political strategy? and how does what you say in the first paragraph demonstrate that they are aligned?

I can't speak for Nick, but having a similar personality type to the Prime Minister, I can give my interpretation: Gordon Brown thinks order and harmony is a big deal. I mean, a really, really big deal. But, he can throw the rulebook out of the window in pursuit of those aims. If you don't get that, it's the difference between a mere technician and a master, a scribbler and an artist, a blowhard and a general.

You can plot most folks on a matrix of rational versus relationship based, and forward thinking versus stick in the mud. Now, each have their strengths and weakness, depending on position and circumstance. You've also got folks who are the real deal and deliver, and those who talk things up and fake it. I'd make some snippy partisan comment, here, but it's really something I'd rather leave folks to reflect on in their own time.

My general view of Labour is they're tearing themselves apart over personal ambition and greed. Meanwhile, the CBI and their Tory pals are having an untested easy ride, but Labour is beginning to resolve its issues and the hard right putsch is beginning to lose steam. John Prescott's initiative is absolutely right because he's both doing something else and going somewhere else instead of fueling dumb. And if both Labour and Britain want to succeed that's exactly what needs to happen. As Tony Blair said and Robert X. Cringely argue, leadership is key.

Read it. It's important.

Doesn't Gordy know his own policies? In June the FSA ruled that companies must disclose short positions in rights issues. This is yet another knee-jerk reaction which amounts to a tweak of the status quo rather than a policy initiative.

A State Funeral for Baroness Thatcher was the subject of much recent discussion.

How about a state burial for Prudence Brown's reputation?

#65 - Pot_Kettle

I didn't know they wore underwear.

Back in the late seventies, the urgent need was to tackle and reform the trade unions. Labour couldn't do it because they were too close to the unions, too associated with them. They were part of the problem and so couldn't bring forth the solution.

So, we turned to Margaret Thatcher and the Conservatives, the party of free enterprise. And they did it. Yes, they sure did. Say what you like about Maggie but she sorted those unions out good and prosper and that, together with a healthy dose of deregulation, dynamised our economy.

Now here we are, 20 years later, and the situation is rather different. It's kind of the opposite in a sense. The need now is to tackle and reform "free enterprise" and in particular the ultra laissez faire capitalist financial services sector (that's almost a quarter of the UK economy we're talking, so it's not trivial). It's pretty much universally agreed that government regulation and intervention is now a GOOD THING.

So which party will be chosen to drive through this project? Applying the same logic which served us so well back in 1979, the answer seems clear. It has to be Labour.

But it can't be Gordon Brown, because his credibility is shot to pieces - "no more boom and bust" he said and we now have one of the biggest busts ever, following one of the biggest booms! - he can't escape from that, I'm afraid. He's politically DEAD.

What's going to happen, therefore, is that GB is going to (be told to) stand down fairly soon. Before the end of this year, for sure. He'll be replaced by the very underrated Harriet Harman and there won't be a GE because of the severity of the economic crisis. The party will rally round H and she will perform well as PM. Her qualities of calm intelligence and unflappability will win around a large section of the public (although by no means all, obviously, there'll still be plenty of "Harperson" jibes flying around in certain circles, you know the circles, I mean).

But she'll do well for the country, Hazza will, and a lot of people will see that. At the same time, the public's perception of David Cameron and George Osbourne will slowly but surely move closer to the reality. Yes, they will become viewed by many many people as being empty and opportunistic clowns.

The election will finally be called in the spring of 2010 and it will be close. The popular vote will split almost equally between Labour and Con, with the LibDems a distant and disappointing (for them) third. In terms of seats, Labour will hold just enough to form a government (H remaining as PM) with an overall majority of 15 seats.

Like all the best stories, this one has a happy ending. On the day after the election (the very morning after, in fact) Clegg, Miliband, Cameron and Osbourne are all sacked.

The best thing Brown can do for the country is join Lord Lucan.

Gordon Brown has announced a spring clean has he? What this merger shows is something totally different, morelike a total mess if we're honest.

Yes, HBOS had to be saved from collapse but what a chaotic way to do it. It is clear that Brown has decided to make economic policy up on the fly, pledge to re-write competition laws, grease the palms of corporate friends, possibly break EU Law, allow a major bank now to have a monopoly over the UK market and probably lead to several thousand being made redundant in the next few months.

Perhaps, Mr Brown, owing to the seriousness of the consequences of your actions, consulting Parliament (or the nation) about what you intended to do would have been welcomed. I take it this is supposed to be part of a Government that is listening and taking the concerns of the electorate seriously?

When the dust settles and the redundancies happen, Lloyds-Halifax becomes dominant in the UK and the whole move is either challenged in court (by way of judicial review) or in the European Court of Justice (you can't re-write EC Competition Law so easily) then the real consequences will be seen.

Unfortuantely, the way this whole merger was carried out made it look more like the PM was some third-world despot who offered to make one of his friends a generous offer at the expense of the state.

At the moment only the bosses of Lloyds TSB seem to be estatic - well why wouldn't they? The PM has given them HBOS on the cheap - what a wonderful way for a LABOUR Government to show it cares about the many rather than the few.

GaryElsby @67 wrote:

"Please Observe the Socialist movement coming to the rescue of the innocent poor, once again."


Is that the socialists of the Union of Soviet Socialist Republics?

or

The National Socialist Workers Party of Germany?

or perhaps the Socialism practiced in Pol Pot's Democratic Kampuchea?

Maybe it is the 'soft', fluffy type of Socialism we had in the Britain of Wilson and Callaghan Governments, 1974-1979. Power cuts and three day weeks anyone?

Many posters seem to think that when Cameron et al rides to the country's rescue in 2010 he will put in place regulation that will be able to prevent such a financial crisis emerging again and restrict the excesses of the banking system.

I will leave aside whether any realistic system (one that maintains our openness to capital flows in and out of the country) would have been able to prevent contagion from the credit crunch that originated in the USA.

The Conservatives pronouncements on regulation continually urge the 'cutting of red tape'. The private sector still knows best in their view and the state should keep its nose out or risk stifling creativity and innovation.

Cameron himself has said he sees the best approach as asking business to be socially responsible rather than regulating (e.g. to prevent junk food adverts, to get business to be more environmentally friendly etc).

I do not say that they would urge the state to become more involved in preventing the (efficient) private sector from lending money to who it wants to or in restricting renumeration policies that they choose to implement for their staff. It goes completely against their core principles that the market operates best without the dead hand of the state.

More regulation of this type, if Labour had brought it in, would have been very unpopular (or at least that was the perception that Labour had), and would definitely have been resisted by those on the opposition benches.

To say otherwise is just wishful thinking.

65 pot kettle

Have you seen Australian women? Don't bother!!!

TwoS**gs says "Brown was the man with the economic experience and the international status to see us through".

That is a joke right - i mean he was rolling (pun intended) around the floor laughing when he said that?

Economic experience - ie riding the good times, putting nothing away, borrow spend, borrow and spend more and more heading towards a new record deficit, tripping up at every opportunity that required some economic savvy.

International status - ie - embarrassingly turning up late at the Lisbon treaty, going awol during the georgia / Russia campaign, and soon to be issued proceedings against by the EC for the aforementioned borrowing.

No, sorry, the joke is he's PM. And an ex-chancellor! I'd laugh as well, but these idiots are destroying our country. Get rid NOW

The moderators are on strike!

re: 67 GaryElsby

yep, that's right; the financial collapse which happened on Brown's watch following his 11 year stint as chancellor/PM is all the tories' fault, and has absolutely nothing to do with the fact that Brown wasn't monitoring/regulating the system properly.

(fellow bloggers, just humour poor old gary while they send for the men in white coats)

It seems to me that most of the BBC's political and financial editors and correspondants fall into the "Brown knows best" faction .
Or perhaps that should be "brown nose best"
surely after one disaster after another Brown deserves to be given a hard time,made to face the facts of his recent and not so recent mismanagement of first the economy then the country.
I expect to see most of the BBC's staffers awarded the OBN on Browns resignation honours list,which for me,can't come soon enough

#71 - balhamu

Visit HERE where our fiend Ed Inglehart has explained it all for you.

Bolt - Horse - Door?

or should the government just move to protect all depositors and then just let Moral Hazard operate - lets the weak and foolish fail.

I think Labour MPs are now reaping the reward of the Moral Hazard of not having a proper competition for the leadership - more fool them.

Nick some things are completely certain.For example the fact that labour were 20 points behind the tories in most of the polls before this economic crisis,they are 20points behind the tories now,and will continuie to be 20points behind the tories when the economic crisis is over,if it ever does.

Why are the moderator soooooo slow?

74 fensorient:

Brilliant post.

The only bit of the track record that I would add to your list is the cheap sell-off of the nuclear technology company Westinghouse Electric (well, we were never going to need to build new nukes, were we?)

Adding your post to my list of the current economic problems (64) puts Gordon Clown's track record and prospects into context.

The sooner this idiot PM and his bunch of PC buffoons goes, the better. Though I do hope he remains leader until the election, to ensure the maximum destruction of the Labour Party!

74. fensorient

The really sad thing is that Blair is just as culpable and his involvement has been completely forgotten.

Theres no justice

"Labour governments always end in economic disaster."

I read that as saying that big business stupidity and Tory greed haven't been stamped on hard enough, which is why another Labour government is necessary to stop the swinging pendulum stone dead. Folks moan about the boom and bust economy but who's making the choices? You say you want better but when the moment comes you all chicken out and run to the hills.

There's been a lot of really good initiatives from the government on things like The New Deal, fair wages, and knocking low into shape. Most or all of this has been opposed or actively undermined by big business and their Tory pals every inch of the way. The government can try and set a lead and create a wealth generating environment but if the retreads and wannabes keep getting in the way Britain will never get over its deepseated problems.

Looking at the raw social and economic strategies, it's very, very clear how Britain has its wires crossed. By not developing sound products and laying staff off at a mere sneeze, both big business and their Tory pals are running an advert for the hardline Thatcherism they want to bring back, and look what happened last time. It ain't gonna have a different ending this time, so why drink the Kool-Aid? If you wanna stop being losers just, er, stop being losers. Easy, innit?

HAVE YOUR MORTGAGE WRITTEN OFF, AND INSIST THAT YOUR BANK OR BUILDING SOCIETY, PASS ON TO YOU, THE CUT IN INTEREST RATE BENEFIT RELIEF, INCLUDING BACK DATED BENEFIT, FROM THE BANK OF ENGLAND, TO YOU, AND IF YOU LIVE IN THE USA FROM THE FED TO YOU.

AND WHY NOT?

After all, Bankers were gambling with mortgage-backed-securities using them as collateral in unregulated volatile markets and they lost them causing a crisis – the effects for you as a homeowner and taxpayer are devastating.

At no time did homeowners and taxpayers give authority to any bank, building society, institution or any government to create, or gamble with instruments used as collateral putting their homes at risk. At no time did your lender in principle and in law have the authority of the regulators, or authority of law.

Why should you pay for the greed and ruthless behaviour, most foul, of the super-rich bankers, who caused the credit crunch and contributed to it? – Not only is it the biggest modern-day bank robbery but the biggest robbery of the economy leaving it vandalised. It was all avoidable. It didn’t have to happen.

At no time has the taxpayer been responsible for the conduct and dealings of private investors or for loses incurred by private transactions of banks, mortgage lenders or any financial institution.

Many homeowners struggle for years to get on – and stay on – the property ladder. Why should they pay for bank loses by way of: Increased interest rates; negative equity; repossessions - made homeless with predatory bailiffs plundering their property?

Why should they pay with: financial hardship; not able to put food on the table; mental stress; and devastating effects of it all for the rest of their lives and their children s lives - whilst the bankers are having a party?

The unscrupulous bankers who caused the credit crunch left the banks which employed them with debts to the tune of nine hundred billion pounds, the effects of which banks have stopped lending to customers and to each other. This has caused a liquidity problem resulting in the drop in house prices and increased interest rates, the effect of which is a dramatic increase in negative equity and repossessions. The effects upon the economy are so enormous - many companies are cutting back production. It is affecting all kind of industries. Many people are losing their jobs. Everyone in some way or another is affected. Why! All because of bankers greed and gambling.

Why should the super-rich bankers get away with their staggering profits, big bonuses, and asset stripping, scot-free, at the expense of homeowners losing their home, the enormous costs to the taxpayer, and the damage they have caused to our economy leaving it vandalized?

When Northern Rock failed, the Bank of England, the Financial Services Authority, and the Treasury, started to pass the liability parcel, which ended up on the lap, of Homeowners and the Taxpayer. The media, to some extent, exposed, in simple terms, how and why the bank had failed and what had been going on. It soon became apparent that other banks had similar problems that were ubiquitous through out the whole banking system. However, the cause to justify their conduct, in principle and of law is “Unintelligible”.

The Bank of England, (BOE) used Taxpayers money, loaned at a penalty interest rate, to replenish the losses of the banks and mortgage lenders. The (BOE) also cut interest rates to stimulate the economy – but the Banks refuse to pass on this benefit relief to their mortgagor-customers. Instead, they use the benefit to offset and reduce the penalty interest rate – all at the expense of the taxpayer and benefit relief meant for homeowners.

BASIS OF ECONOMY

Britain has always been a homeowner-based economy - not like the economies of France and Germany, where the majority of people live in rented accommodation. Homeownership made Britain one of the wealthiest and stable economies in the world.

Scarcity of building land, difficulty in getting planning permission and the time it takes to build substantial property using bricks and mortar and with every increasing costs, it all adds up to a very valuable asset that increases in value. Because of this, the majority of people want to get on the property ladder. These assets are the foundation of the British economy and credit ratings upon which stability depends. These assets were so valuable, that other loan sharks wanted to get in on the act - adverts started to appeared on national television encouraging homeowners’ to free up equity from their home and to - Spend! Spend! Spend! The banks’ were promoting credit cards – shopping on the high street was a wash with cash.

But the bankers were gambling with mortgage-backed securities (MBSs), many in the form of CLOs and other similar products. The number of these products being sold on, increased dramatically generating hundreds of billions of pounds - But at whose risk and expense?



Financial markets are driven by fear - But the bankers were not in fear, it was not their property that would be repossessed, they were using their homeowner-mortgagor-customer s assets to raise collateral which they squandered on subprime wooden houses in America that, if not properly maintained depreciate rapidly. They were even handing out mortgages on mobile homes which dropped in value the moment they were driven out of the car showroom. But the bankers didn t care, the more of this stuff they sold on, the bigger their profits and bonuses, so who wanted to stop the party?

Exposure to subprime property was enormous - in hundreds of billions of pounds. But when banks started to fail the effect upon the economy was so devastating – it exposed the driving force behind Brown s booming economy.

To feed the greed and gambling of the bankers the economy was heavily reliant on the momentum of ever-increasing property prices.

Northern Rock had been such an embarrassment for the Government, that it couldn’t afford any further revelations of failing banks and the full extent of their liability be known.

Gordon Brown and Alistair Darling in their panic responded to the crisis by introducing, what they called – emergency covert legislation to prevent a failing bank from going bust. BUT THERE ALWAYS HAS BEEN LEGISLATION TO PREVENT SUCH OCCURRENCE IN THE FIRST PLACE. So what was the real purpose behind Brown and Darling s covert legislation?

Brown and Darling, in their panic declared, that protective legislation was needed, because they didn’t have the legal powers and authority to stop the crisis from happening. Well, they would have to say that, wouldn’t they? – to avoid Brown having to face a charge of negligence, inter alia. By their own admission, their statement infers negligence – in that the vault door had been left wide open, and of course, guess what! - the unscrupulous bankers had bolted with hundreds of billions of pounds, leaving behind a staggering financial mess the effects of which upon the stability of our economy are cataclysmic. Well, plausible as it may seem, Brown’s excuse, that there was no legal authority - is utter nonsense.

The fact that Gordon Brown and Alistair Darling, by their own admission, that their emergency legislation is covert, shows the purpose of their intent, to keep secret the truth, of the extent and severity of liability to be placed upon homeowners and the taxpayer.

Homeowners and the taxpayer, through no fault of their own, are now liable for hundreds of billions of pounds.

Why involve the taxpayer? No matter how desirable Brown and Darling s legislation to nationalize Northern Rock may be, they have set a dangerous precedent, which is in fact, unlawful, and whilst this unlawful situation continues, it is another form of stealth tax, wilfully calculated – most foul. If they think by making it a temporary measure will somehow give validity to it, they are wrong.

There is no authority by which Gordon Brown and Alistair Darling or any Government, can initiate such legislation - the effect of which, transfers the risk-liability from the private investor unto the taxpayer and homeowner-mortgagor that ultimately ousts the authority of the Court in the UK, and the same checks and balances apply in the USA. Any attempt to oust the authority of the Court, and in such a manner, is contempt and a criminal offence. One would think that Darling being a lawyer would know that to initiate such legislation is not only unlawful, but is an abuse of the law and process, inter alia. But regardless of long established fundamental principles of Law, they pushed their legislation through parliament. As for the rest of our politicians when it comes to matters of law, they are just lead like sheep. For instance have you noticed, In principle and in law all legislation must make proper provision otherwise it is not worth the paper it is written on. But this Government has been eroding provision clauses to avoid having to pay out compensation.
When Mr Brown and Mr Darling Nationalised Northern Rock the ultimate provision in their covert legislation is that Homeowner s and the Taxpayer pick up the tab.

LEGAL AUTHORITY TO HAVE THE PERPETRATORS OF THE CREDIT CRUNCH BROUGHT TO JUSTICE AND TO CLAW BACK THEIR ILL-GOTTEN GAINS.

In relation to the credit crunch - all the rhetoric we have heard from the Chief Executives of: the Financial Services Authority (FSA), the Treasury (HMT), the Chief Executive of the British Bankers Association before the House of Commons and from the speeches’ of Alistair Darling and Mervyn King, the Governor of the Bank of England (BOE) at the Manson House, is all geared to: Who is to pay for this mess after the event, how to prevent a reoccurrence of the behaviour that caused the credit crunch.

But this crisis was foreseen, the FSA, HMT and BOE (the Tripartite Authorities) did have “Notice.” Had the Tripartite Authorities exercised the existing safeguards or all the measures they are now proposing before the event, the banks wouldn’t now be calculating their lose exposure to the markets in the USA.

CHANGE OF THE SYSTEM

Up until 1997, the Bank of England controlled the Banking system. It was common knowledge that prior to 1997, mortgages were protected from such abuse, under existing safeguards of regulations and the law, and that mortgages, in particular, were sacrosanct.

Mortgages were only to be used for the purchase of property; loans for all other purchases had to be through a bank loan or hire purchase, which were short term and had a higher rate of interest, there was a separation of deposit banking and mortgage lending. The lending banks and building societies were strictly regulated.

However, Mr Brown decided that he didn’t like that anymore. So he introduced a system were we had, the Financial Services Authority, the Treasury, and the Bank of England, (the Tripartite Authorities) carving up the job amongst them. Just one big problem – when there was a crisis, apparently nobody knew who was in charge. The effect of all this – the system unregulated.

EXISTING LEGISLATION SAFEGUARDS

Before the Memorandum of Understanding in 1997, it was common knowledge, that there always has been legal authority and inherent safeguard powers available to prevent such unfettered conduct, most foul. But what did they not understand? In principle and in law, such conduct is contrary to: The competition rules; the fundamental rules of law and maxims; the law of equity; natural justice; the sprit of the law; and the Articles of EU Law; inter alia. There most certainly was, and there still is, proven and long established legal authority.

Indeed, in principle and in law, and on equitable grounds, it always has been, and still is, impossible to initiate such legislation or to over-turn the existing safeguards. But regardless of the law the PM pushed his legislation through parliament.

NEGLIGENCE, FAILED IN DUTY OF CARE

But was Brown negligent when he was Chancellor of Exchequer? - was he negligent on the grounds, that he failed in his duty of care, to put in place proper legislation and regulation safeguards, and failed to use existing long established inherent legal power and authority, that he failed to detect the discrepancies at a time when this could have been done? - or did he know what he was doing?

Did he know that re-packaged mortgages in the form of Collateral Loan Obligation (CLO's) and other similar products were being traded outside regulation authority and the effects that this could have on the stability of the economy? Surely, he ought to have known when Chancellor at the helm?

The bankers knew the enormous value of these secure assets, and that they would be the driving force behind a powerful booming economy. They knew they would make a fortune if they could trade them on the US financial markets in the same way as US government-sponsored-enterprises, or GSEs. However, the bankers knew they couldn’t be traded unless they were taken out of their protective regulation. So how did they get their hands on them?

Well, first, you must know what you are doing, and know how to have them deregulated. By changing the banking system in 1997, banks were able to trade CLOs and other stealth products through institutions, but an institution is not called a bank, and therefore operated outside strict bank regulations. This was the key to the unscrupulous bankers making a fortune. The question one should keep in mind is, was it Mr Brown's idea, or the Bankers' idea, or both? Who persuaded who?

The government now faces an £8bn tax revenue shortfall. The government is considering relaxing its own fiscal rules on how much it can borrow in order to counter the effects of the economic slowdown. So who has the money to go guarantor for them? And who are they making liable to pay it back?

Is it amazing, that the biggest modern-day bank robbery to the tune of nine hundred billion pounds and its effects on the stability of the economy has taken place on Gordon Brown s watch? But why have Gordon Brown, Alistair Darling and the so-called (the Tripartite Authorities) taken no action against the perpetrators of this enormous crime?

What is needed is a public inquiry to look into the way the perpetrators of this enormous crime have breached the law. How they plotted a course to by-pass the protective security alarm system of the law. How, they spun a complex web to protect themselves from prosecution and the processes that assisted them in the execution of this crime. But in the corridors of power and corruption - public inquiries can also turn out to be a white wash. The FBI in the USA is in the process of bringing criminal proceedings against bankers in the USA but nothing has been done to prosecute the bankers in Britain who knew what was going on.
The one fundamental ingredient that is missing to prevent such unscrupulous and unfettered behaviour most foul is a DETERRENT. When banks are entrusted with other peoples money and assets. Surely, transparency, accountability, preventative legislation properly regulated and a forensic authority with power to prosecute, to claw back ill-gotten gains, seize personal assets, jail sentences and enforcement of heavy finds big enough to be a Deterrent, is the operational recipe needed to be proper and acceptable?
Brown after ten years as Chancellor and head of the treasury has the cheek to say that he will clean up the city. It would be laughable if it weren t so serious.