The banker precedent
James Forsyth 1:26pm
By rescuing the banks, Brown has illustrated that—in extremis—the government can find the money to do things. As Andrew Rawnsley argues in The Observer this is going to be a problem for Brown in the coming months:
Politically, if not policy-wise, Brown is in currently the easy part of the financial crisis. He is the leader trying to guide the country through the storm. But like the bankers, there is a reckoning to come for the Prime Minister.“ballooning government debt points to a severe squeeze on services. Whitehall is already anticipating the bloodiest spending negotiations for a generation. Mr Brown has guaranteed spending only on health and education, which implies serious pain everywhere else.Politically difficult in any circumstances, the boggling billions directed to the banks makes this even harder to sell to the voters. Every time a cut falls, the cry will go up: you could find £500bn for the banks, but you can't find £10m for my cherished public service.
Even if voters do credit him with firefighting the financial inferno, they may also regard Gordon Brown as one of the people responsible for lighting the blaze. There's an interesting debate to be had about when the Age of Irresponsibility began. Was it in 1997 (the Tory version) when Gordon Brown moved into the Treasury and redesigned the regulatory structure? Was it in 1986 (the left's version) when Cecil Parkinson's bonfire of controls unleashed the 'Big Bang'? Does culpability lie with both? Voters are likely to leave that argument to academics and blame the man who has been running the economy for more than a decade.”
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TrevorsDen
October 12th, 2008 2:09pm Report this commentBrown will let spending rip and try to lose it off balance sheet or within the general financial bale out - and to hell with the deferred taxation or the effect on the pound. It may well be the pound in fact which sees him off.
Meantime ...
The merits of 'big bang' in 1986 can be discussed along with the number of angels that can force themselves onto a pin head.
The government - this government - however has been unequivocally in charge since 1997. It has not repealed big bang, it has drastically changed regulation to a light touch 'risk based' model. It did so in 2005.
The 'Better Regulation Action Plan' should be hung round Browns neck as a noose that terminates his premiership.
http://62.164.176.164/press_5005.htm
How many times do we need to repeat his words before the nation wakes up?
"We will look to apply on a wider basis the principle of risk based regulation to financial services legislation and the work of the FSA. "
"The FSA, which we set up in 1997 as a world leading example of how to regulate financial services ... has already done valuable work on adopting a risk based approach and I welcome the thinking it is doing about how it can further reduce the burden of financial regulation."
Every single one of those words is a nail in Browns coffin of credibility.
Why did the Titanic ship of state hit the economic iceberg?
BECAUSE THE CAPTAIN WAS ASLEEP AT THE WHEEL.
Augustus
October 12th, 2008 2:44pm Report this commentSince the credit crisis first reared its ugly head over a year ago, Brown has been a passive confused figure. And now in the present debacle we've been treated to a textbook lesson in how not to handle a crisis. First European leaders promised to stand together, then we find Germany joining other states in criticising Ireland for its go-it-alone approach, only to promise to guarantee all private savings the next day. Within hours it was every country for itself. naturally, all this confusion helped to spook the stockmarkets. Finally, Britain's rescue package was rushed out after days of calamitous falls in bank shares. All in all, a poor Prime Minister; a bad economist who refused to economize when times were good; and a government without a handle on the present chaos in the markets. Under seige to recessionary forces to which they will be increasingly exposed, Brown and his cohorts will come to a messy end.
Water
October 12th, 2008 3:00pm Report this commentRawsley makes a good point regarding Thatcher’s old disposition, relished by Brown though? I wouldn't say for or against.
Susan Hill
October 12th, 2008 3:15pm Report this commentThere`s plenty of fat to cut. He could bring Gerry Robinson in to cut a swathe through bloated and not only unproductive but obstructive NHS management The Arts Council could go in its entirety - public subsidy for the arts is a luxury we can no longer afford. He could get rid of the ridiculous new climate change office before it`s even opened. Councils could be ordered to cut spending within their own offices, most quangos could go... he could begin by going down the Guardian public sector appointments sections with a red pencil.
And in education, I can think of, but will not name, one university which has been throwing money around on self-aggrandisement rather than on teaching and research, and which learn some lessons in belt-tightening.
dearieme
October 12th, 2008 4:30pm Report this commentIf it squeezes him into bringing the troops back from Iraq and Afghanistan, that should both save lives and treasure, and give him the troops in Britain that he might find he needs.
EyeSee
October 12th, 2008 9:05pm Report this commentNow I know there has been a global problem with the banking sector, but then as with political correctness the left has been running things from behind the scenes for a while. So let me get this right, a socialist government has found itself 'accidently' nationalising banks, something it has long desired to achieve. I mean it was an accident that Peston has, several times found himself beholden of information that, when he passes it on causes bank shares to plummet. Making the banks vunerable to government intervention. I suppose you could class Peston as a useful idiot?
Travis Bickle
October 12th, 2008 9:12pm Report this commentSo let me get this right. It's an AMERICAN problem that cause the banks to fail in Iceland so it is clearly a GLOBAL problem (emphasis provided by the awful smug Cooper on Marr show). But mysteriously it is also the fault of the nasty Toreez in 1986, and nothing whatsover to do with our government of a mere 11 years.
Some inconsistency from the Labour spin machine here methinks
Seasurfer1
October 12th, 2008 9:28pm Report this commentGet ready for the RBS- Requistioned Bank of Socialism within the next few days.
cuffleyburgers
October 13th, 2008 10:52am Report this commentBrown doesn't need to cut anything. He has a golden opportunity to raise taxes still further, and there's nothing he likes better than that.
He can now burst through the 50% of gdp barrier into true socialism. Then it's only a question of 42 days, id cards, and the soviet union has magically been created on albion's sceptred isle.
Who will save us now?
Deafening silence from the Tories. Shame.
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