Questions, questions, questions

Pentland

Totally agree Fraser - where is the scutiny of this bail out ?

Also - have I just had a sense of humour bypass or did anyone else think it was inappropriate of Brown to crack that 'joke' last night about another bank failing when his speech was interrupted ?

John Page

But US Congressmen reported they were besieged by callers and e-mailers. Do any of your Commons contacts report anything remotely similar?

Andrew Forbes

c) This govt has an appalling track record for negotiation and writing terms of contracts, which often turn out to be massively poor value for the tax payer
e) it's remarkable how much praise is being lavished on the govt by bankers who are usually much harsher critics. But then, if I'd been lobbed half a trillion by someone, I might have a few kind words to say about them too.
g) yes, it's a worry.
i) why do we owe a penny to victims of Icelandic banks. If you deliberately put money into a bank not governed by the Bank of England, then you do so knowing that the BoE is not guaranteeing your money. If there's a queue for tax payer generosity, surely you are at the back of it. I thought we were guaranteeing deposits in BoE governed banks, not guaranteeing deposits of British citizens everywhere. If this is the case, I'm moving all my money to a spectacular rate of interest in Nigeria.

Faceless Bureaucrat

And where exactly IS Cameron when all these questions need to be asked?...

TrevorsDen

The BBC has so many economic correspondents and 'editors' that its hard to know who is who, but one of them last night was wondering why the Abbey and Nationwide were included and pointed out that the actual pledge was to between them improve some ratio or other by 1% which could mean either hoovering up £25 billion taxpayers money or reducing some risk or other to increase the ratio.

I am not sure the exact truth about what is going on is being told.

Guido points out that anti terror legislation was used to freeze £4 billion of Icelandic assets so presumably (if legal) this can be used to cover losses here.

Brown is apparently going on tour (probably in front of a carefully selected labour audience) to tell us what a genius he is at only reducing the country to modest penury in stead of absolute poverty. I hope someone gets a chance to ask him just how thick does he think we are?

maas101

David Cameron / George Osborne should be asking these questions. We have a multi party representative democracy for a reason. Whilst unity in time of crisis is laudable they need to position themselves on the side of the taxpayer, rather than sitting on the sidelines which is currently the case.

Frank P

My friend furriskey, beloved of the blogosphere before he withdrew to engage in more profitabale pursuits sent me this today, which encapsulates the wisdom of our Great Leader and his piebald puppet:

>BANKS TO LEND YOU YOUR OWN MONEY

THE government is to invest £50bn of your money in British banks so they can lend it back to you with interest.

The historic move is being hailed as a lifeline for the financial system as long as nobody asks too many questions.

Julian Cook, chief economist at Corbett and Barker, said: 'The
government will give your money to the banks so the banks can start lending you that money, probably at around 7% APR.

'Thanks to all the interest you're paying on your own money, the banks will make billions of pounds again and normality will be restored.

'After a few years of this the government will cash in the bank shares it bought with your money and use the profits to build a huge f*cking dome somewhere.'

He added: 'In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot.'

Chancellor Alistair Darling said the decision had been taken in tandem
with the banking industry, adding: 'They used a lot of dirty words I'd
never heard before and one of them had an angry looking dog.'

Meanwhile, Emma Bradford, a sales manager from Bath, said: 'Why doesn't the government just give my money to me so I can buy stuff
from businesses who will then make a profit and put it in a bank?'

But Mr Darling insisted: 'Shut the f--k up!'

Paul B

Peston is Darlings puppet- he in not to be trusted-see Guido.

Fraser, is it possible DC and the team have held their fire because the situation is so dangerous. If so, I do believe he should indicate he is holding his fire, for the sake of greater good of the country , otherwise hes in danger of being marginalized. I was upset that he didn`t attack at PMQs, that he acquiesced,the only reason I can think for that is the above. Maybe he did not want to pour petrol onto an already raging fire, equally true though is that a large explosion can extinguish a fire.

Brown & Darlings plans do indeed leave far to many unanswered questions. It (the plan/bailout call it what you want) may well be the least worse option (although it contains far to many of Browns usual smoke & mirrors, how can the man be trusted after all his deceits) however the British people some require answers to the questions you pose above. "We will do whatever its takes (with other peoples money) is just not good enough.

Who have the Tories put forward for QT tonight, we need a heavy hitter, a big beast. We need Clarke fronting up-cometh the hour , cometh the man. The man despite his tunnel vision over Europe, is the only person who is truly capable to forensically dissect this plan, and get some answers for us- he has the gravitas and the respect of most thinking people in the the country.

Dalesman

I couldn't agree more. Our £400 billion is much more than the US's $700 billion (per taxpayer), but our scheme has gone through on the say-so of GB and AD.

No Commons debate, no nothing. There is definitely something wrong with our system.

John Miller

Fellow Coffee Housers please enlighten me.

If all the nasty cack emanated from America and everyting was OK over here (this from the G Brown version of events), why have they drummed up only £350 billion, compared to our £280 billion, when their GDP is far larger than ours?

Their old fahioned balance of payments makes ours look like a drug crazed credit card junkie, so at least that helps them. In addition, don't they have rather more than 20 million taxpayers to help pay for this?

Best answer will receive a glass eye...

Mike, Brighton

Well exactly.
I watched Labour MPs waving their order papers in joy and though.
Where is the scrutiny here? The goverment has cobbled together a £400 billion deal in less time than it takes me to choose a TV.
Why is no parliamentarian asking awkward questions?
Why is the media not asking these questions?

I'm frankly very very angry that my money is being used with so little questioning.

Do we live in a democracy?

strapworld

Mr Nelson, spot on. WHY on God's earth didn't Cameron take these questions to PMQ's. By letting Brown off the hook and appearing to support him fully, he has virtually ruined his chances of raising these issue's "But" Mr Brown will respond " Last week you fully supported me, it just shows that the country could not trust a novice in such matters"!!

I believe Ken Clarke who knocked Cable for six should be brought back as shadow chancellor immediately. Boy George is not up to this fight. The Tories need all the big hitters, fighters they can have on the front bench now.

Yesterday i was in a hospital waiting room and I can tell you the conversations told me that Brown and the Bankers were being blamed equally. We lower orders! are disgusted that our taxation monies has been used this way and without Parliament debating it!

oldtimer

Another question, one I`ve previously posted on the Brogan blog:
"So is Robert Peston`s role in all this one as agent provocateur or as useful idiot. And who is using him - Brown Central or City Insider? I think we should be told."

And a supplementary question: if Peston is the wrecking ball, who was in the cab pulling the levers?

I am pleased to see that Michael Howard has now taken this up with the FSA and in the HoC.

Adam

Why aren't the Tories asking these questions? It beggars belief that the Party of which I am a member isn't raising any concerns except about bonuses. I feel embarassed that the Party of business looks completely out of its depth in this crisis. For all their faults at least Brown/Darling did something.

The Banker

What's John Redwood doing at the moment? This case looks like it needs some applied vulcanology.

Re Cameron/Osborne: they are deploying the same policy as for Northern Rock, i.e. say nothing, wait for the Govmt to do something, wait to see how it develops, then criticise Govmt. I think that's called Leadership.

Ian C

Yesterday euphoria at some needed belated action. Today the reality begins to dawn.......... Welcome!

Will Rees

What happens after the moneys gone and the banks need recapitalising again?

Nicholas

"Who have the Tories put forward for QT tonight, we need a heavy hitter, a big beast."

The Tories seem to have withdrawn from play on both QT and the DP, with only ex-big beasts turning up - which encourages Labour to hark to the past, always wittering on about the Trotskyite mythology of the bad old days of Thatcher and Major. Labour, being cowardly curs, of course put up their wimmin more often than not. Although on DP today is was the big girl's blouse, McNutter, rather than one of the porcine sisterhood.

The BBC seem to have gone into the "attack the Tories" default mode required by their New Labour puppeteers, with both Dimble and Neil going for interruption, hectoring and aggressive challenging of any Tories on the programmes. Amand cannot her conceal her dislike of Tories and her bias always shows blatantly when she starts questioning one, her voice rising to an indignant Trotsky squeal and her leading questions containing the requisite New Labour soundbites. Yesterday she was bleating about Brown's "Falklands Moment" as if saying that enough times would cement it into the audience perception.

Really, the BBC have gone beyond parody with all this.

Huw Thornton

Interesting questions, Fraser, but I think that the UK comes better off in the comparison with the US - it was time for decision rather than discussion.

Paul B -
I think what you say is right about DC holding fire. It would have looked terrible if he seemed to have doubts about the need for an urgent decision. But a new position on all this is needed. Fast.

Michael Taylor

The combination of a Labour government which cares not a jot for legality (as those 'terrorist' Icelanders are finding out), and a State Broadcaster that is energetically complicit in aiding and abetting this behaviour, means that. . . no, we no longer live in a democracy as we have known it.

The poison has sunk deep into the bloodstream now, and it will take brave and determined action to clean it out. Sadly, there's no evidence that the Conservatives aren't just another variety of the toxin.

Democracy? In this country?

Allison

Pentland
October 9th, 2008 11:17am

I quite agree about Browns bank joke, I was also sickend by the sight of him sniggering during PMQ

Augustus

This banking collapse and rise in uncertainty is likely to be very damaging to the world's economy. The lack of credit will strangle firms' ability to make investments, hire workers and start R&D projects. The current backlash against capitalism could also lead to politicians swinging towards the left and away from free markets. This happened after the recession of 1974/5, and could happen again now. All this makes for a perfect storm. A huge surge in uncertainty, generating a rapid slow-down in activity. A collapse of banking preventing many of the few remaining firms and consumers who want to invest from doing so, and a shift in the political landscape locking in damage through protectionism and anti-competitive policies.

In fact the only upside to all this is that this massive slowdown in economic activity will rapidly cut the growth rates of CO2 emissions, as pollution is tightly linked to economic activity levels. A few years of negative growth would lead to reductions in pollution levels not seen since the 1970s.
It seems ironic that the greed of Wall Street may have inadvertently achieved what millions of scientists, politicians and activists have failed to achieve - a slowdown in global warming.

Tiberius

I was astonished that even Brown could show such apparent euphoria at such a time.

He was like a general who has just lost all his men, but laughs all the way through the interview because his vanity is satisfied by being the centre of attention.

He has no shame and is utterly contemptible.

C Powell

Andrew Forbes: the BoE does not guarantee deposits it in UK banks, the FSCS does and the FSCS did for Icesave under EU law in exactly the same way as for all other UK banks. This was explicitly stated in Icesave's T&Cs which were approved by the FSA which regulates all banks in the UK - including Icsave's UK branches. As it turns out what was stated was wrong and, again, the FSA did not do its job. That might be one reason why the UK government has an obligation: 2 other reasons (1) a government as unpopular as this one is not going to upset 300,00 potential voters; and (2) if British depositors lost money I suspect there would have been the mother of all bank runs on every other bank.

There does seem to be an unpleasant desire to have a go at Icesave savers which did not manifest itself against Northern Rock savers or Bradford & Bingley savers. Icesave savers are getting no more than those savers got, will lose any interest they might have earned and will not have access to their money for ages. They're not getting some sort of windfall. And yet there's a desire to punish them rather than those really responsible for the mess we're in. Curious and unpleasant.

Huw Thornton

Maybe, Tiberius, but it shows he has now become confident in a way which is wholly different from the last year.

In the short term, he has every reason to be. At PMQs he held all the cards.

In the longer term, his problems will return - recessions are times when real dilemmas emerge. The least said by DC and team now, the fewer hostages to fortune when normal political conditions re-emerge.

Hysteria

@ Frank P - the article you quote is the editorial from yesterdays Daily Mash - which publication is guaranteed to raise a laugh in times of stress - they have a merciless go at anyone and everyone - www.thedailymash.co.uk/

Chris Paul

£16,000 Fraser or £1,600?

Daniel1979

The Conservatives should have asked the questions and risked some unpopularity. It will now haunt them that when the banks teetered on the brink that they had NOTHING to contribute. Their function is to ask questions and seek answers, (in Parliament) they have failed to do this, again.

John Redwood seems to me to be the only Conservative MP with any clout that has been accurate with his analysis and predictions. Hopefully some one a CPHQ has been keeping track of what he has to say. They will need him in the near future.

A few posters have mentioned QT, I agree that the Conservatives should avoid sending people like Hesseltine & Clarke on there, it is an immediate reminder of when the Conservatives were split, these guys are not popular amongst sections of Conservative support either.

Time to ask some of the lesser known shadow cabinet to stand up and get involved. I don't think I have ever seen George Osbourne land a decent blow in a debate, let alone show up failed Labour economic policy - the needs to be addressed.

Austin Barry

The smug pomposity and awful smirk of the preposterous Brown are reminiscent of Mussolini. Il Duce of course ended his political career upside down on meathooks in the Piazzale Loreto being stoned by the mob. It would be entirely inappropriate if such an end awaited the Great Helmsman in, say, Trafalgar Square, but I do sense that the electorate, emerging from its credit-induced torpor into a world of negative net worth, will became somewhat more agitated than previously.

Hereford

I would add another point:

What process would be used to ensure that, if there was an upturn and consequently a profit made on the texpayers' investment in the banks, then what mechanism would the Government use to ensure that all taxpayers receive a dividend, equated to their level of contribution i.e. their tax contributions for the period during which they hold a share in the relevant bank or banks?

Just a thought, but probably not one at the forefront of Gordon's mind. He will be hoping to swell the contents of the exchequer :o)

Andrew Forbes

C Powell, thanks for enlightening me, but less happy about being considered unpleasant.

I am perfectly happy to guarantee any money that my govt has guaranteed; or if your reason no (2) is correct, the consequences of not guaranteeing them would be disastrous. Reason (1), though would be a blatant political abuse of our money.

I was merely trying to establish the principles on which our money is being used, since the opposition has done such a poor job of finding out for us.

Susan Hill

But when do I ever get a say in what the government does with my money once I`ve handed it over via HMIR ?

Frank P

hysteria

Thank you so much for that link - furriskey didn't h/t it -bastard! Wait until I next contact him.

Don't know how I've missed the Daily Mash - it's brilliant satire. Still wiping away the tears of sheer joy after reading half a dozen of their skits. Have even sent away for their forthcoming book, too.
Looking forward to receiving it as much as I looked forward every week to Tommy and ITMA in WW2 and I recommend the blog for anyone who is taking life too seriously at the moment.

Frank P

Susan Hill

'But when do I ever get a say in what the government does with my money once I`ve handed it over via HMIR ?'

About every four years at election time, but in principle you're right, as the next lot of extortionists will not listen either.

Frank P

Susan Hill

'But when do I ever get a say in what the government does with my money once I`ve handed it over via HMIR ?'

About every four years at election time, but in principle you're right, as the next lot of extortionists will not listen either.

C Powell

Andrew Forbes: my remark was a general one directed at some of the columns there have been in newspapers on this and NOT at you personally so my apologies.

I agree that point (1) is a political one but it is the reason why, now, savers would be well advised not to save with a foreign bank precisely because governments will, in the end, look out only for their own people, as the Icelandic government has so helpfully (sic) demonstrated.

I would also add that the assets within ICESAVE in the UK will, I believe, be used to finance the compensation so the net cost to the UK taxpayer may not be as great as thought. I would hope so anyway.

Also agree that the Tories have been feeble on this. There's been more intelligent comment by Coffee Housers than I've heard from any of the Tories over the last few days. Not a good sign....

Keith

I just wish Cameron would get off his arse and ask some awkward questions. McBroon is gloating while Dave and Gideon are squirming.
Get up and fight for God's sake

mac

A very interesting and thoughtful thread which deserves to be scrutinised by the Tory party wonks. Thankfully, DES appears to be having a day off, although I see that Chris Paul isn't.

I thought Cameron indicated clearly enough that, notwithstanding House-wide support for the bail-out, a wider political reckoning was still to come. Brown's utter smugness and the shrill cackling of his side of the House at PMQ were hubristic. Shades of Kinnock and chums in 1992?

I think that shameless spinning (ok, make that bare-faced lying) might see Labour squeeze home on 6 Nov, but in the longer term so many chickens must come home to roost - including the underlying realities of this week's 'triumph' - that Mandelson and Campbell aided by the slanted reporting by the BBC won't be able to explain them away to enough disgruntled voters.

Incidentally, despite its failings I have been a supporter of a licence-funded state broadcaster, but I am now clear that this bloated, lefty-riddled, organisation, cushioned by an excess of public money, has so embraced the role of government's propagandist that it should be dismantled.

Man_on_Richmond_Bridge

Right Fraser so let's go through this from the top:

1) Previously on Fraser you got us up to speed on our hidden mortgage
http://www.spectator.co.uk/coffeehouse/2182576/your-secret-67300-second-mortgage.thtml

2) Now you tell us we're another 16k GBP in the golden brown stuff - totalling 84k GBP approx

3) Regarding the bailout

Paulson v Brown

US - Paulson bailout $700bn

UK - Brown bailout £400bn * 2 = $800bn approx

Now here's the thing.

The UK economy is only 20% in size compared to the US economy.

As Jack Cafferty would say here's my question to you:

1) Is Paulson's number too low?
2) Is Brown's number too high?
3) Or are the banks in the UK completely off the deep end with more to come?

Pick one of the above because it's getting ugly out there and as someone recently quoted

"I'm fucked, Your fucked, We're all FUCKED!!!"

Andrew Forbes

The Tories should beware of their truce being more than a little one sided. Labour’s spin team is newly reinvigorated, and they’re off to a fine start. In the absence of any flak, they’ve been able to reinstate Gordon’s reputation as a calm man in a crisis, and even give Darling a little gravitas. They need to study hard how New Labour took them to pieces in 1992, and do it back. Maybe they’re right, and now isn’t the time to loose off the big guns, but they’ve been holding them back on so many occasions of late, that we’re beginning to worry that there aren’t indeed any big guns.

And on the side, they’ve managed to portray Boris’ sacking of Ian Blair as politicising the police, which is something they should never have been allowed to get away with. If the Tories loose too many more of these skirmishes, they’ll look like they’re losing the war.

That's why, mac, I think it's the Tories that are looking like Kinnock of 1992, not Labour.

Hysteria

Frank P - glad you liked it - I don't know who is writing their stuff but some of it is simply hysterical..........in a good way!

Not like my name which is more from the "oh my god, we are all doomed" camp !! LOL

on a more serious note

@ C Powell - "more intelligent comment by Coffee Housers than I've heard from any of the Tories over the last few days"

Agree completely

John

The reason there is no debate about the UK Govt. spending £400Bn of our money is that it was decided in Brussels:

http://www.eureferendum.blogspot.com/

mac

Andrew F: There's clearly a policy of playing this long at the moment, which may or not be wise given the unprincipled dark arts practised by Mandelson and Campbell. Your concern is understandable: I simply hope that you too pessimistic because the empty vessel leadership you postulate is too depressing to contemplate!
(Completely agree about Blair's resignation. His appointment and tenure as a New Labour fellow traveller was blatant politicisation. I don't live in London, but surely plenty of Londoners know this, don't they?)

Nick Kaplan

“I’m wary of Peston’s “Armageddon avoided” verdict.”

I’m wary of anything Peston has to say given that when his father was economic advisor to our last Labour government (in the 60’s and 70’s) we ended up with the largest budget deficit in history and the huge embarrassment of devaluing the pound.

seb

Has anyone else seen the Prime Minister being interviewed on the evening news? Here's a verbatim quote: 'I am the guardian of the public's money.' The faintest shadow of a smile was evident on Brown's face as he uttered these words, but I think it was a symptom of complete insanity rather than contempt for the British public. Tomorrow, Mr. Darling will no doubt be telling us he is Jesus Christ Almighty.

Fraser Nelson

Chris, contra your blog it is £16,000 - I was referring to the Daily Mail splash which preumably divides £400bn by the number of taxpayers. You can argue about the exact result - SuperKing in The Sun says £20,000 - but it is in that region.

Andrew Forbes

Man_on_Richmond_Bridge:

I rather fear it's 3). Remember everyone boasting that London had overtaken New York as the financial centre of the world. All sorts of reasons were given, like its geographical proximity to oil money and the like, but perhaps it was because London was doing even more of what Wall St was doing that made money then and has got us into trouble now.

Hysteria

Seb - glad I had not seen that as I woudl probably have done some damage to my TV. Bloody nerve of the man!

The "public's" money is OUR money and WE are the ones who should be guardians of it.!!

VoiceofDoom

When politicians of all parties and the media all start agreeing with one another and promising to cooperate, sensible folk reach for their tin hats and head for the bunker. We are supposed to live in a parliamentary democracy, and that means an adversarial approach to establishing an approximation of the truth. This in turn means that Her Majesty's opposition must scrutinise and question the policies of the Executive. That is what they are paid to do. The Tories are very good at finding reasons for inactivity, and they never seem to understand that the Labour Party is not comprised of gentlemen - they are for the most part bar-room brawling guttersnipes. I should know, I come from a long-established Labour supporting family.

Hysteria

@ VoD "When politicians of all parties and the media all start agreeing with one another and promising to cooperate, sensible folk reach for their tin hats and head for the bunker."

Excellent post - the kindest interpretation of the Tory approach right now is they are playing a clever political long game.

I think they should stop, desist and cease this approach immediately and get on the attack - assuming of course they have the intellectual capacity to go on the offensive.

William Hague - where are you??

TGF UKIP

Anyone care to remember the "longest suicide note in history" AKA the Labour Manifesto of 1983 which had right at the top of its list, of Labour priorities, to the general amusement of the nation, the nationalisation of the banks.

Well, so it now seems to be coming to pass in 2008, ensuring Gordon a treasured place in the bosom of his party for now and for its history. But why?

I am reading repeatedly that the banks' problem was a shortage of confidence not of capital and therefore,by implication, raising the question of providing extra shareholding capital damaged confidence even more. (And here let us not forget that the first time this idea of government provided share capital raised its head in public was by Boy George on Marr on Sunday am)

RBS, though, was spectacularly sunk by the Peston leak on Tuesday morning resulting in its share price and market cap falling by 39% which leads to two questions:

1) Downing Street are spinning via Brogan (see Guido at order-order.com today) that the leak that "banks were asking for taxpayers capital" to Peston was via Osborne following his briefing by Mervyn King on Friday. If this is false then Osborne and Cameron need to swiftly deny it and lend their explicit support to Michael Howard's letter to the FSA demanding an enquiry into Peston's role. If Brogan's story is true I would expect Howard to demand Osborne's long overdue sacking.

2) I must raise again, Fraser, your's and your colleagues spectacular silence on Peston's involvement not just this week but two weeks ago as well on another market moving story when he broke the Lloyds/HBOS takeover "arranged" by his mate Gordon. Given the omnipresence on BBC political programmes of Messrs Neil, d'Ancona and Nelson, you must realize your seeming reluctance to go near the Peston issue must inevitably arouse some cynicism.

So far as the present politics are concerned the Tories are going to be on the backfoot for some time in no small part to their utter folly in supporting Browns spending and borrowing splurge and their complete absence of authority on economic matters.

Even you, Fraser, must be coming to accept that your second best mate, Osborne, is no longer sustainable in his role. Even some your fellow arch Cameronians above seem to recognize this.

As for their suggestion, though, that Ken Clarke should step into Boy George's shoes all I would say is that they appear to have forgotten what a huge ego and a disruptive politician Clarke is. Just ask the BBC if they would like Clarke and the answer would be that they would love him, so reliable is he when it comes to rubbishing any conservative or even mildly eurosceptic idea or policy emanating from the Tory Party.

Redwood, entirely admirable though he is, simply carries too much baggage and has still not managed the transition to the television age.

The genuinely big beast who does have the public personna and the political weight and economic nous to turn it round for the Tories is David Davis.

Personally, though, I hope he leaves Dave to stew in his own juice.

Man_on_Richmond_Bridge

Andrew Forbes
October 9th, 2008 5:59pm

Totally agree with your post.
I think that we'll soon be seeing others tripped up by this mess - I see last night that a Japanese Life Insurance company has filed for bankruptcy.

We're going to find out soon that Black Holes were created and exist in London and not in Geneva (CERN).

Fraser you read these posts so I have a suggestion.
This bailout is a total fraud on the UK taxpayer. Please start digging asap to expose this as no one in the House of Commons could even bother to get off their arse and say - "Hold on a minute are we really sure that this is the only sensible option to follow".

Andrew Forbes

It is something of a joke that the only scrutiny of this (which was nobbled in advance) was PMQ's, which lasts 1/2-hour.

WW ll veteran

Quite a lengthy list of comment among the turmoil but could someone please explain by what means can we return to the integrity we don't practice any more? That would be worth a bottle of bubbly.

John of Enfield

...we must NEVER give up challenging this man. GB is a totally toxic self centred politician. You must keep asking the fundamental questions. We must also get the BBC out of the way (Peston & Newsnight).