Making Northern Rock disappear

TomTom

It's all fine but can he sell Gilts ? £110,000,000,000 this year and how much will he need to raise for Lloyds-HBOS ? £420,000,000,000 or so to roll-over their funding.

Just who is going to lend this kind of money to a country with risk of default ?

Junk Bonds seem to be creeping up the scale from Building Societies to Money Centre Banks to Sovereign States.

I simply do not see how Brown can outsource PFI projects to banks then expect to fund banks through the Treasury and a huge PSFD and still find willing lenders to take a punt on Sterling not collapsing.

So it does not matter what kind of a hall of mirrors Brown constructs, the need to find funding may elude him as it eluded Andy Hornby

oldtimer

I am beginning to wonder how high the debt burden has to become before the IMF has to fly to the rescue. It would help us all, Fraser, if you could dig out how high it was last time (nearest £billion and % GDP will do) in the far off days of Callaghan and Healey. Then, of course, there was no Northern Rock or other off balance sheet debt to trouble the ONS.

MartinW

And so the deceit and sleight-of-hand continues. A sly and deceitful Chancellor, and a worse (sub)-Prime Minister.

Dave is Pants

Purely out of interest - since you keep up to speed with commercial news vastly more than most political hacks do - would you care to tell us: how much of its bail-out has NR *already* repaid?

C Powell

Well, the Tories simply need to say what the national debt figure WITH Northern Rock is and with all the other spending Darling is now proposing. Plus they need to say how much this is per every person in the UK. AND emphasise the point that trying to hide a debt - as Brown is doing - does not make it go away. It merely stores up more trouble for the future, just as Brown's behaviour as Chancellor for 10 years has stored up the trouble we are now facing.

Pete, Scotland

Fraser, who should I be angry with?

Brown for pulling this trick and getting away with it, or whoever should be holding him to account and failing?

Whoever they are?

Ted

Fraser, it'll be well over 40% by next Autumn however he plays it. The pint though is that we entered the 91/92 recession with zero current account deficit and it took until 97/8 for the peak of National Debt/GDP to be reached. So the point to be hammered home is we aren't "well positioned" - concentrate on current account deficit 1990/91 compared to 08/09, move the ground from his preferred and fixed measure the the one that matters in terms of future National Debt.

Tiberius

When I read that first sentence of your second paragraph, Fraser, I laughed out loud, thinking I'd passed into a parallel Python world (perhaps I have, who knows.)

Do him a favour, Fraser, and blog that if we leave out all the Education and Healthcare spend, because, like road repairs, he can reclassify them as Capital, he could then report a Surplus called the National Debt excluding Schools'n'Hospitals Investment(called HN51, formerly WTF). No doubt Peston would report it with all the irony of a true Arsenal supporter, and Wark would tell Osborne it was all Major's fault for opting out of the Social Chapter at Maastricht.

It's hard to know whether they're tears of joy or despair that roll down my cheeks.

Chuck Unsworth

""When I use a word," Humpty Dumpty said, in rather a scornful tone, "it means just what I choose it to mean—neither more nor less."
"The question is, " said Alice, "whether you can make words mean so many different things."
"The question is," said Humpty Dumpty. "which is to be master—that's all.""

Welcome to the Looking Glass world of Humpty Brown....

Chuck Unsworth

@ Dave is Pants.

Who knows? Do you believe anything emanating from the Government?

Possibly you do.

Glenlivet Guy

What are Cameron and Osborne doing.Please, please make the level of debt the Questions for PMQ's on Wednesday.Explain that this year's day to day costs of running the NHS i.e.£90billion is being borrowed for our kids and grandchildren to repay through an estimated just one year PSBR of £90billion.Explain cost of Channel Tunnel biggest ever project undertaken in UK, was £10 billion.Then folk actually understand.We are borrowing on current account in one year...nine channel tunnels!(I accept inflation would have made that figure much larger in current terms but it gets the point home). If Labour stay in power where will it end.Only thing to bring forward is building some power stations to get our electricity prices down to those in France.

mitch

It wont save him,seems the only person he is deluding is himself.

NigelC

Why not have a new measure HF37W which is "The national debt excluding everything that does make the answer 37%"

Chocolate ration are up

Herbert Thornton

All Brown need do is print enough money and the debt will shrink, in relation to the economy, as if by magic.

Surely what we should be asking is - how much will a loaf of bread cost in a few years' time?

TrevorsDen

Pete Scotland ...

The electorate will hold Brown to account.

Brown has a majority in parliament, and as we now see he makes the rules up to suits himself, with his parliamentary majority dutifully voting for it.

If you are trying to imply it should be the opposition - well they are pointing out Browns deceit. Are you listening are you complaining to the BBC if they let Brown get away with it?

Maybe the BBC would wake up if the licence fee were cut as a way to help hard pressed families.

But never mind browns propaganda. Can Brown fund his deficit? what will happen to Stirling what will happen to interest rates.

In this game of musical chairs something has to give when the music stops.

Richard Holloway

Cameron has to destroy Brown at PMQs on this. Anything less than abject humiliation for the PM will be a failure.

TGF UKIP

C Powell, Glenlivet Guy and Pete, Scotland are, of course, entirely right and the Coffee House as a whole is like a pair of cracked records.

The chorus on one is whining non stop about Gordon's repeated lying and the chorus on the other whining about the Tories inability to do anything about it.

But back to figures Fraser and I refer to your post of 24th September - "In May 1997 UK net debt was £351 bn or 43.2%. In August 2008 it was £632 bn or 43.3%." Why don't your precious mates simply stick to the figures of 351 and 632 and if they really do want to look statistical fancy pants say 14k per household against 25k per household today. People understand straightforward figures. Indeed, most don't have a clue what GDP is.

The other figure the Tories need to hang on to is forecast debt( before all this splurge) for five years time of 844bn or 34k perhousehold.

Your mates need to get simple and populist, Fraser, and they really do need to remember that pre-97 Brown & Co had no hesitation in continually referring to not just "Tory sleaze" but "Tory sleaze and lies."

It's long past the time for you to put a rocket up Dave's arse, Fraser.

TGF UKIP

PS Fraser, perhaps you should suggest to Dave that the next time he's on Marr, he should suggest Jug Ears ask his mate Gordon if the real target is to leave real public debt at above a trillion for a Tory government to walk into. Certainly with PFI and Network Rail it's heading that way.

Pete, Scotland

A bit off topic but I feel it fits in here somewhere.

Just watched Sky's Geoff Randall's much hyped interview with Lord Levine.

What did I learn?

He agrees with Darling that things are really bad!

If you have the right people with the wrong structure things can work!

If you have the wrong people with the right structure things can still work! Or something like that.

And things are going to be bad for a while yet!

I would probably get a sharper insight into the economy from a market stallholder.

Silent Hunter

There's something very strange happening here!

The worse the economy gets.....the better the Labour recovery is in the polls.

Am I missing something here?....or are the polls being 'corrected' by some faceless government department?

Who the hell are the pollsters asking, for God's sake?

Dolly Drapers Rapid Rebuttal Squad of New Labour Wonkers?

Hysteria

@Pete - yep - you probably woudl - and isn't that the point..??

Fraser Nelson

oldtimer, im afraid due to the hidden debt (PFI etc) no true comparison is possible. But the ONS Public Sector Net Debt (RUTO) was defo higher under Major. 53% in Mar76, 26.2% in Mar92 (lowest it got, Ted) but peaking at 43.6% in Sep96.

Tiberius, this idea of "reclassifying"/concealing debt is Brown all over. He took the "creative accounting" dodges made famous by Terry Smith in mid-90s and incorporated them into gvt.

Glenlivet, I think Cameron should wait until Brown uses the 37% figure then give him both barrels. But Brown is sleekit, as we say in the Highlands, he's more likely to use it in answer to a Labour backbencher than to the Tories. So he wont give DC the chance. Also it remains to be seen if Brown will use his HF6W in the Pre-Budget Report.

DC should listen to how Obama and the Democrats campaign on it "we have knowingly saddled our children with an intolerable debt, that's not just an economic failure but a moral failur." Great stuff.

Dave Is Pants, NR is a big black hole so its tough to see what's happened. And this is worrying - it deserves its own parliamentary committee to scrutinise it.

Fraser Nelson

TGF, you perhaps overestimate my proximity to Dave's arse. And the public's interest it statistics wars. The phrase "per cent of GDP" sends about 95% of the population reaching for their remote.

And if I was advising him, he wouldnt have made his speech last Friday which I said was all blame-dishing and no ideas. I was wrong: the media had an appetite for blame-dishing and his speech was a success.

hadrian

Of course you would get a sharper insight from a market stallholder, Pete. That's the real economy and the real market, mate!
As for UK being trundled ignominiously once again to the IMF, that is hardly beyond the bounds of probability given this government's unutterable recklessness. 'Spend one's way out of recession'..er, sprnd WHAT, exactly, as it's all pretty well gone and dissipated? Mind you, I fear it won't be the IMF that'll be coming our rescue- possibly more some outfit like MFI!
And there's an SNP rejoinder that sans the Union North Britain would go bankrupt. We're all heading down that tube anyway, thanks to Comrade Broon and his repulsive cronies.

Miranda

I may be being naieve, but isn't our GDP going down at the moment and into a recession. Where as in 1997 it was coming out of a recession and going up. Any fool can compare two points in time without context.

Which adds weight to Ted's point.

I despair with 'everyone', letting him get away with this. But I doubt it will work. We're heading for Zimbarbwe territory. This isn't just bad economically, we are heading towards a collapse of democracy as well.

wrinkled weasel

Is it still the case that most PFI debt is not added to the budget deficit figures? I guess that is so.

anthony a

To be honest I don't think people really care about percentages and GDP etc etc.

Even people I know who who don't follow the news that closely have realised that Gordon just says what he can get away with and not what is necessarily the whole picture.

Most memorably - the one about noone being worse off by the 10p tax issue - people remember that he denied it was a problem until the last possible second and then had to back down (borrowing money to solve the problem.)

People will remember that Gordon has form - his budgets looked good on day one but when people see the effect in their pay packets they remember who to blame.

Ian C

Fraser

In the end what matters is total debt - gov't - on/off balance sheet where poss. - AND Household. The latter in particular and the total as well should be expressed as % of average income per capita. Then 90/91, 97/98 and 2008/9 compared, or at least the latter two. Can you do that? I think you will find that we are rather more heavily geared in total today - which is why it is going to be worse in the UK than USA or continental Europe.

Pentlands

Fraser - can you get a seat at Brown's monthly press conferences and confront him with this ? Why do you think most journalists let him off with all this and never go on the attack ?

Billions are at issue here thanks to Brown yet the BBC is more interested in whether or not Osborne solicited £50K.

Give me strength..........

TGF UKIP

Fraser, I think you misunderstood me. I completely agree on the public's lack of interest (or understanding) in statistics wars and that %ages of GDP etc pass straight over their heads. That's why I was suggesting Dave stick straight to your bare figures - 351 in May 97 and 628 in August 2008.

The public do understand that and even more so when expressed on a per household basis.

Keep a rocket handy just in case, though!

hadrian

As Miranda says, this is potentially leading us into Zimbabwe territory and once Joe public gets even a whiff of this you can bet your bottom (worthless?) dollar they'll sit up and listen to the warnings about Broon's massaging of the figures.

Sam LPUK

Come on guys, if you are going to talk about the national debt then at least get in the right ballpark. The TaxPayer Alliance did a report a couple of months ago showing that national debt is close to £2 trillion. However it excluded the biggie (technical reason) - unfunded state pensions - which could add on over £5 trillion!
According to TGF UKIP's figures above this makes over £280,000 per household. And this it before Brown's bonkers bailout.

KRB981

Very scary - http://www.johnredwoodsdiary.com/2008/10/21/government-in-debt-now-at-18-trillion/