Brown's wayward sense of priorities
Peter Hoskin 9:03am
What is it with Gordon Brown and alarm calls? He spent years ignoring the IMF's warnings about the state of the UK public finances. And now, thanks to a National Audit Office report, we learn that he ignored warnings about the preparedness of the Treasury to deal with a banking collapse. Here's the relevant passage from that report, with the key part underlined:
The result? An unprepared Treasury, that was "severely stretched" when Northern Rock collapsed, and decided to continue 125 percent mortgages (backed up by taxpayers' cash) in all the confusion. One of the major lessons coming out of this crisis is less that there needs to be a new series of early warning systems - as Brown calls for - but more that greater attention be paid to existing alarm calls; however brightly the sun may be shining.31. The Treasury had been aware of potential shortcomings in the arrangements for dealing with a financial institution in difficulty prior to the crisis at Northern Rock. From 2004 the Tripartite Authorities had undertaken exercises to test their response to a range of scenarios. These exercises had identified the need for further work on how the resolution of an insolvent firm with systemic repercussions would be handled and by whom. As a result, scoping work was done to identify the key issues the UK would face in winding up a financial institution, the practical processes available and therefore the gaps and options to fill them. Prior to 2007, work on improving the existing arrangements was not, however, judged by the Treasury to be a priority in a benign economic environment, compared with other financial crisis response planning. The Treasury started a project in early 2007 to produce a consultation document by Autumn 2007 on how the Tripartite Authorities would deal with a bank in difficulty. Following consultation, new legislation was put before Parliament in December 2008 and received royal assent in February 2009.



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Sally Chatterjee
March 20th, 2009 9:13am Report this commentNo one likes a Cassandra. When the party is raging, few like to be told it'll end in tears.
But there does seem to be something special about Gordon Brown, he went out of his way to bully critics and to crush any view that didn't support his vision of never-ending economic growth. Too much power was given to one man.
Chris lancashire
March 20th, 2009 9:25am Report this commentWhen you are the architect of 10 years of uninterrupted growth there is no necessity to prepare for anything else than further growth.
Pure arrogance.
Publius
March 20th, 2009 9:27am Report this commentExactly. The warnings were there, loud and clear. It is just that they were ignored for reasons of political convenience. Just as the current warnings are being ignored for the same reason.
richardj
March 20th, 2009 9:32am Report this commentSo which Minister or Ministers are resigning over the childish and totally incompetent handling of Northern Rock after it was in Government control? No pensions or salary in lieu? What a joke!
Harvey
March 20th, 2009 9:44am Report this commentIf he had any dignity left he would resign. I think a very large proportion of the population are still not aware of the trouble this country is actually in. It is a national scandal that NR could carry on selling 125% mortgages when it went belly up.
C Powell
March 20th, 2009 10:00am Report this commentNone so deaf as those that don't want to hear.
Tiberius
March 20th, 2009 10:11am Report this commentWhen the Queen invited Tony Blair to the Palace, little did she know she was handing over the keys of the family estate to a bunch of spotty juveniles, who have no more idea of how to do grown-up things than plankton food.
Faux Cul
March 20th, 2009 10:12am Report this commentMaybe the enemy is not just Brown and certainly The Treasury?
The Civil Service will be there long after Brown and Darling and Hoon have gone.
Perhaps they are the real enemy?
john miller
March 20th, 2009 10:13am Report this commentWell, he probably plays a mean pinball...
strapworld
March 20th, 2009 10:14am Report this commentMirror, Mirror on the wall WHO is the greatest Chancellor/Prime Minister of them all?
Brown proves the theory that politics is all done by mirrors!
Mike, Brighton
March 20th, 2009 10:16am Report this commentGordon Brown is truly a naked emperor and the crowd are both laughing and throwing things at him
drakes drum
March 20th, 2009 10:16am Report this commentThe conservatives should consider an advertisement which looks like a Bank Statement / Credit Card account showing spend and debt.
Perhaps, that way, most people will then get the message just how bad things are.
True Bred Pomponian
March 20th, 2009 10:22am Report this commentFor once, the buck really does seem to stop with the Minister rather than a civil servant.
bergen
March 20th, 2009 10:24am Report this commentI'm not sure whether one part of the criticism is justified.There is a time lag between making mortgage offers and completing them, usually in the order of 6 to 8 weeks,If a borrower had exchanged contracts on the strength of a Northern Rock mortgage offer then that offer should be fulfilled.The making of new offers,on the other hand ,should certainly have ceased immediately.
Wight Tory
March 20th, 2009 10:35am Report this commentI'm beginning to wonder how he'll take to leaving No.10.
He'll not be removed from within, I'm sure. I've heard the rumour about his failing eye-sight as a get out clause and don't buy that one either. So when the time comes he'll stand in the street saying he did his best etc etc, but with Brown there's ALWAYS the last word and it will be the electorate have made a mistake and the public will rue this day. He doesn't IMO do graceful, it will be I think, a damning insight to what we've heard. I'm confident that he won't leave under the style as Tony Blair, like him or not, he commanded respect, Brown doesn't come close.
Jim
March 20th, 2009 10:39am Report this commentIt's beyond incompetence. Has anybody done a psychological profile of the man? He seems more and more to be like George W. Bush, in that he enjoys destroying things.
I still think that most people don't realise that we are on course for economic collapse. It will be this year, probably before summer. There will be no pension payments, no benefits, no salaries for public sector workers.
Paul B
March 20th, 2009 11:02am Report this commentBrown doesn`t have a wayward sense of priority. His priority is and always has been, his own survival and elevation. To the exclusion of all else. He is totally focused and ruthless in that ambition. Once you fully understand that, then all his decisions make perfect sense. He has tunnel vision, on his terms, he is highly successful and brilliant. He believes his own propaganda, that his his strength and his fatal flaw/ weakness. He is an incredibly vein but insecure man. When the warnings are produced that do not co-incide with his vision and belief on whatever the situation is, he simply ignores them.
When dealing with Brown, logic and evidence serve no purpose. You have to attack his vanity, mock him, belittle him, he will then overheat and self destruct. We have seen it at times in PMQs.DC`s job is to shake Brown, ridicule him, loosen the stopper to the point the pressure within Brown explodes and forces the stopper out. I believe it will happen, it will be explosive moment when the country will see what a flawed flawed man we have had leading us as PM and for too many years in virtual control via the office of Chancellor.
gapster
March 20th, 2009 11:02am Report this commentI couldn't disagree more with Jim's comparison.
George W. Bush is a man of high principle and was a really outstanding President in facing down International Terrorism and
taking the hard decisions required during his eight years at the helm.
In cotrast, Brown is deeply psychologically flawed and unable to understand his responsibility for the mess he has led the country into.The sooner he goes the better.
John Page
March 20th, 2009 11:18am Report this commentThe 125% episode tells us that in a crisis regulators need people with hands on experience of what happens in retail banks, who know what to look for on a product/risk level and can go in fast. Maybe recently retired people whom Nigel Lawson's retired banking CEOs might know. Maybe people coming up to retirement who know they won't get a significant promotion where they are (similar to what happened when Midland had its Crocker upset and the BoE put a Barclays man in).
But this is absolutely not Treasury territory - an area for no nonsense practitioners.
Wily Trout
March 20th, 2009 11:34am Report this commentThis probably sounds over the top but I remember in the 60s and 70s much being written that Marxists intended to destroy capitalism using its own weaknesses. Well, they've done it, haven't they? How many of the current govt were Marxists in their youth - perhaps unlike most students they have never grown out of it. Maybe Brown isn't stark raving mad, just very patient?
Lanec Grundy
March 20th, 2009 12:00pm Report this commentBrown says he wants a system to give ‘early warnings’ about looming economic catastrophes. It is high time Cameron gave him an unequivocal early warning about the economic catastrophe heading this way thanks to Brown’s borrowing binge…
“You’re always talking about ‘early warnings’ and how ‘no-one foresaw the economic crisis coming.’ You were warned by the IMF and others on a number of occasions, but you chose to ignore those warnings thinking no-one would notice. We will not let you get away with that again. We’re giving you an early warning now, on the record, that you are borrowing too much money and this will harm the British economy and reduce the living standards of the British people by saddling them with a debt that will take years, if not decades to pay off.”
Come election time, both Gordon Brown and the British people must be left in no doubt that they have been warned, repeatedly and on the record, about the consequences of Labour’s borrow and spend debt mountain.
seb
March 20th, 2009 1:33pm Report this commentTiberius
I'm putting your comment in a collection of the more amusing put-downs of New Labour mong-ism. Well done.
Wight Tory
You're right. Once winkled out of the Bunker, Kirkcaldy's Leading Autist will of course stand in the street and say he did his best. Inevitably, he'll spend the rest of his life engaging in what he's best at, writing unreadable obscurantist pamphlets on the theme of his own perfection and wisdom and how others ballsed it up for him.
golfwidow
March 20th, 2009 2:18pm Report this commentdrakes drum - they must be spoilt for choice when it comes to poster themes. My suggestion is something based on a P45. No prizes for guessing whose name should be on it.
Tony White
March 20th, 2009 2:37pm Report this commentFor 'Wily Trout'; Look up Ed Ball's CV, particularly his student period. He later studied economics at LSE, he was Gordon's advisor during his Treasury period ! His wife is still at the Treasury.- Questioning Expat
jon dee
March 20th, 2009 3:10pm Report this commentEx Prime Minister Blair struts the world after his weakness and cowardice allowed Brown a despotic control of the nations finances.
DavidK
March 20th, 2009 4:49pm Report this commentThe house price statistics started to show the decline from November 2007 so from then on it was not just complacent but criminally irresponsible to offer high loan-to-value-mortgages, encouraging instant negative equity. And when such borrowers get repossessed it will be the taxpayer - again - who will bear the cost.
loki,asgard
March 22nd, 2009 9:41am Report this commentIt's well known how the police always go for the easy target - the tax-paying classes. But on G20 Day the Met's finest will be in Docklands, earning their pay battling the shock troops of international socialism as they rage against the Leaders of international socialism. Perhaps that will be the day when Central London fills with the dignified protest of the silent majority, sick of the dishonesty and incompetence of Brown and the marionettes, crying out for a government that can be trusted and respected.
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