Brown's double hit

TrevorsDen

Even as we speak Brown is publicly pretending that things are fine. That a return to growth will ease, solve the crisis.

Total fantasy as you have said before. But really everyone should be ramming this fact down Brown's and Labour's throats .... Even in the 'good' years, even when we had growth between 2001 and 2008 brown added to the debt. He continually ran up deficits and did NOT pay down debt.

So how does he expect us to believe that a return to some stingy growth will solve our problems? If we could not pay beck debt in good times how can we reduce the massive debt we have now?

The BoE themselves give the lie to Browns claims - our structural deficit is 10% of GDP. Do expect the ;likes of Paxman Robinson and Marr to challenge the PM on this/ or the Lobby ??

Hmm... I am not one of the fools the PM takes us all for.

john miller

Oh, more Tory doom and gloom. Read Johann Hari's excellent piece http://www.independent.co.uk/opinion/commentators/johann-hari/johann-hari-britains-not-bust-so-dont-use-it-as-an-excuse-to-impose-cuts-1799217.html.

Everythings fine, nothing to see here, move along now and give a few more billion to Bono to spend in Africa.

By the way-and this may be relevant-Johann is also the art critic for BBC2...

paracelsus

So, with the exception of a few news outlets and publications, why is this not being shouted from the rooftops?

Brown, to some extent, still gets a free ride when he trots out his figures and ludicrous claims. Why are the Tories, Lib Dems and MSM not pushing this information with more conviction and certainty?

We need to tell the public in no uncertain terms about the damage Brown has done to this country. We need to confront him head on. Some people are still clueless on this matter, and that is not good for any of us.

Chris Morriss

Of course it is true that mortgage rates are much higher than you would expect given the base rate, but what about those of us who don't have a mortgage but have a reasonable amount of savings? We are not doing very well either.
This real issue is why the base rate is being kept at these ludicrously low levels.
Conventional wisdom has it that the base rate sould be slightly above the real inflation rate, which would give us a realistic base rate of around 4%. I see nothing in the current recession that provides any reason that this should not be the case. History is likely to show that the tidal wave of printed money flooding the country, together with the foolishly low base rate, will have minimal effect on the speed at which the country emerges from the recession.

THX1138

Thanks to the boom times brought to us by TB I paid off my mortgages.

John Moss

Two factors are pushing the spreads.

First, those with trackers are causing lenders to lose money on their loans. They need around a 1.5-2% margin to make money, so if they are tracking at anything less than +2.5% they are out of pocket and have ot get it back from new business at higher spreads to base, because wholesale money is 3-4%.

The second is the fear of default by Government owned banks who are reliant on Government borrowing, which in turn is reliant on QE. That is what is pushing the rate up that the banks get their money, so spreads from the artificially low BoE rate are greater.

All this presages the demise of "base rate" as a meaningful measure. Hurray say all of us who think monetary competition might actually be a good thing and the market a better regulator than either the Government, FSA or BoE!

Moraymint

"The costs of [Brown's] arrogance, misjudgments and rank incompetence will be with us for years, perhaps decades, to come".

I've been one of those sad little citizens who foresaw this conclusion about Brown's (in)competence for many, many years. During those same years I have often felt heartily sick knowing that the prat in Number 11 and, latterly in Number 10, was stoking up the mother-of-all socio-economic disasters ... that I and my children would be paying for, for a decade or two or more. And all along, we've been paying him to get on with it.

Brown must never be allowed to survive this. It is an absolute travesty that one of our own (supposedly) can wreak such havoc on the nation ... before going on to lucrative appointments and speaking engagements, book deals, a seat in the Lords etc etc.

In the same way that Brown has as good as destroyed the nation, so too should he be destroyed by public anger. He must be made to disappear without trace and written in to history as the architect of one of the greatest socio-economic catastrophes ever visited on the people of this nation.

We're going struggle very hard indeed to recover from Gordon Brown and, do you know what ... that really pisses me off.

Hysteria

what Moraymint said - with bells on.....

my worry is that outside a fairly small band of economic or political nerds the true scale of the problem is not that visible......

Does the man on the Clapham omnibus realise what has happened - and the consequences?

When you have vast swathes of the population thinking we have "free health care", or that "the government creates jobs" we are going to struggle to make a change.

Sadly too, the change we need to invoke will trigger the social problems Mr Moraymint predicts.

Dave did a good job last week - but he is a recent convert from "sharing the proceeds of growth" thinking (aka statism) - I am still not sure he has had a Damascene conversion compared to simply jumping on the bandwagon.

As this is the only wagon that will remove the socialist this at least is to be welcome - but doe he really "get it" ? And does the public??

Norman Dee

Moraymint, nail on the head, absolutely right. We live in a world where politicians can just keep 1 step ahead of the disaster and know they will never have to pay for it. Just look at the recent examples, Kinnock makes an absolute bollocks of everything he touches, and he and his card carrying wife get years of anything between 350k to 500k a year between them, and retire on massive pensions. Blair and his waste of space disappear of into the sunset, and live off the fat of (the land wouldn't be enough) the world at 10 million a year. there appears to be no justice at all in politics

An Accountant

My inkling is that you have to go back to the evil troika of Crosland, Crossman and Williams. All Blair et al have done is carry out their programme of destroying middle England. Brown's just the fall guy, the Gollum who was so desperate for the Ring.

You have to feel sorry as his precious destroys him.

mark

I think people are understanding that they are getting hurt by all of this.

We've just seen the Conservative Party call for a period of national austerity to fix the debt problems and move 19% ahead in the polls.

A milder version of what now afflicts the UK happened in Canada and Australia in the early 1990s. The electorate at large realised that Government finance problems equalled a lower quality of life for themselves.

As a result, no political party a generation on can get taken seriously without explaining credibly how they will balance the books.

What we are seeing is the UK sober up and start paying attention to what's gone wrong.

This is going to fundamentally change the nature of UK politics for years to come.

Denis Cooper

"... someone Scottish thought he would personally rewite the bank regulation system and proceeded to make an almighty mess of it."

Please, Fraser, don't stir up Scottophobia; leave that to Boris Johnson and Simon Heffer and the more fervid English nationalists.

Remember that the Conservative Party has always been the party of the Union, and - hallelujah! - it has now been clarified that (at least officially, for the time being) that Union is the British Union, not the European Union.

Indeed, having gone through a phase of being just "the Conservative Party", apparently it will now go back to being "the Conservative and Unionist Party", and although that's really just because of the Ulster Unionists I still look forward to seeing it there in print in next year's Whitaker's Almanack.

OK, so when Cheryl Gillan chaired the conference session entitled "The Union" on Thursday morning, there was nobody on the platform to speak for or about England, or say what the Conservative and Unionist Party planned to do for England - 60% of the Union landmass, 85% of the Union population, producing 90% of the Union's wealth - and the audience was rather small because English people weren't invited, even if they weren't actually refused entry.

But, hey - we're The Secret People, and mostly we don't mind being taken for granted and totally ignored, and mostly we're used to it.

Still, you should take care not to arouse English nationalism - remember this from January 2000:

http://news.bbc.co.uk/1/hi/uk/596703.stm

"English nationalism 'threat to UK' "

"Cross-party politicians have warned of growing English nationalism following devolution, airing their views in a BBC programme."

"Mr Straw will describe the English as "potentially very aggressive, very violent" "

"Mr Hague will say: "English nationalism is the most dangerous of all forms of nationalism that can arise within the United Kingdom, because England is five-sixths of the population of the UK."

And we wouldn't want any of that, would we?

patricia

An Economist now are we?

Where were your bosom buddies Cameron and Ozzy in the run up to the credit crunch?

Thatcher's policies started this, and here you are running around trying to pin the blame wherever it suits you.

If it hadn't been for Brown you'd be dressing at oxfam and drinking vimto.

Stick to propandising and rabble rousing leave the money stuff to your offshore paymaters.

Irene

I hate to say it but I almost wish we were downgraded whilst Brown is still in office to make him and his Government face facts.

Moraymint

It seems to me that the financial crisis (unsolved, but instead punted a short time in to the future) has become, or is becoming an economic crisis (we're being propped up by even more government borrowing and the printing of money) which will become, in due course, a social crisis (jobless or soon-to-be jobless people on the streets).

Social unrest is a virtual certainty during the next parliament. The politicians are desperately trying to keep a lid on things. All of the political parties' recent conference pronouncements demonstrated barely the faintest understanding of the scale of Brown's disastrous legacy, still less how to rein in state spending (now out of all control) to the tune of tens of billions of pounds per year. I haven't heard a single proposition from any politician that has anything to do with turning around our economy.

The problem is that Cameron is economically illiterate (as Hysteria says, remember "sharing the proceeds of growth", ie economic growth is some magical event that just happens, and endless growth in state spending is, per se, a 'good thing' ... Que?) and yet, it's the economy (stupid) that now needs some heavy duty attention. Cameron doesn't do numbers - which is about as helpful to the nation as if Churchill didn't do warfighting.

There's going to be trouble on the streets for as long as we have a bunch of politicos in office who wouldn't know simultaneous state cost-cutting and wealth creation if it carpet-bombed them.

TGF UKIP

The call for most Coffee Housers seems to be "let this be shouted from the rooftops to the general population.

Now unfortunately, it's not the slightest use relying on the Tories to do this. Dave as we all know just doesn't/can't do figures and detail and nobody outside the village takes the slighest notice of Boy George.

It's, therefore, going to be down to you Fraser to use your bullypulpit in the Screws to carry the message and can I suggest a suitable date.

It will be Sunday 25th October with congratulations being passed to Gordon for passing the £100bn mark within six months. To explain: The Budget was on 22nd April when the Coffee House National Debt Counter started ticking at £609bn (and £24k per household) and on or about Thursday 22nd October it should hit £709bn.

Although it should be you leading the Tory Party, Fraser, and not the Blue Labour wanker who is in situ, you can at least demonstrate his inadequacies by making his points for him

Sally Forth

Took John Miller's advice and read Johann Hari's article.Easy to see why he's the arts correspondent and not the economics one. Debt is only treated in a cumulative way. There is no distinction between annual borrowing and cumulative borrowing. The only time annual borrowing is referred to is when he fails to get Cameron's point that after a very long period of continual growth (remember the annual budgetary boast?)we shouldn't have had a deficit at all. No consideration of the knock-on effects of where to find the extra debt interest or the possibility that lenders might tire of lending.
I suspect that we're in for a re-run of the 70's 'The national debt doesn't matter' argument from the left. If the Tories do win I hope there's something in the rumour that they plan to publish a dossier of economic blunders, pinning as much as they can on Brown before the cuts start. If we can't try the guy for economic mismanagement in a court then he'll just have to be tried in the court of public opinion as his deputy Harriet would say.

john miller

Really patricia, if I see another socialist blaming Thatcher I think I'll scream.

Don't you realise its's the ultimate condemnation by you of your own party to say "Thatcher started it"?

Either your lot were too stupid to notice, or they were too lazy to change it, or they agreed with it. Which option do you think flatters them the most?

gareth

Sorry Fraser - the fact that no one I or any of the other bloggers will meet to discuss this sort of stuff in the real world will have a clue about what's happened in the economy makes reading articles like these actually a double-hit in themselves.
First there is this mind boggling article then the stunning sound of silence in the rest of the media - it is very Orwellian.

Why? Take Rod Liddle - the popular man of trendy popularity - warning the people who fought ALONE the Waffen SS 70 years ago to watch out!! against who - the Waffen SS!! Alive and well in leafy England!!!!!! - and you employ him - as if this is journalism.

Any Colour but Brown

Again, this week, the Grauniad has claimed that Osborne has a 3bn deficit in his pension plans.
Well, let's take this in context. Labour borrowed 16bn in August alone - that's more than 5 times the size of "Osborne's deficit" (assuming it to be true, of course). Labour will borrow something like 175bn in 2009 - that is nearly 60 times the size of the "Osborne deficit". A similar amount is planned for 2010 - another 60 times the "Osborne deficit".
Britain, currently, has a debt of over 3,000bn - 1000 times the "Osborne deficit".
The interest on Britain's loans is over 35bn a year - 12 times the "Osborne deficit"

Put into context, the "Osborne deficit" is not really worth mentioning

Nicholas

patricia: "Thatcher's policies started this, and here you are running around trying to pin the blame wherever it suits you."

Laughable. Risible. But typical. It's always someone else's fault with you lefties. After 12 years of government by New Labour and 12 years of Brown as Chancellor and PM it's still Thatcher's fault.

I sometimes wonder if you people realise that you are a parody of yourselves. If, when you read Animal Farm or 1984 (if you ever do - you certainly reference it when it comes to your political strategies) whether there is the slightest glimmer of self-recognition or shame?

The deeply unpleasant and self-denying aspects of socialism, its propensity never to admit error, its aversion to truth and transparency, its tendency to demonise and blame others, to stubbornly persist with policies of demonstrable failure and to impose, coerce and bully rather than persuade, completely undermine it.

2trueblue

The whole world did not (want) see it coming, so hardly fair to say Cameron was talking about the 'proceeds of growth'. A month before Northern Rock collapsed one of the big banks were advising the punter to buy their shares!

This government are great at deflecting blame and not taking responsibility for anything. Look at the peerges granted within the banking etc areas that the government were cosy with.
Even now Brown is trying to tell us that it is all great? Debt does not disappear into the ether, we are stuck with it and the reason the B of E has halted Q E for the present is the damage it would do to print more money right now.
Paople have forgotten that this government have enjoyed such a large majority which has enabled them to push through parliment exactly what they wanted. This has enabled them to deny democracy to us during their time. They leave us now with the biggest debt and have saddled us with the stricture of the EU by denying us our promised vote.
A party that enables those who govern to line their own pockets whilst levying stealth taxes on the 'ordinary working man' fills me with disgust. Brown was in charge of the purse and does not do straight forward accounting, the devil is always in the detail. Thank you for pointing out the detail.

patricia

Hey Nicholas.

In your conveniently prejudiced little world, where everything is black or white, left or right, good or bad,

try this.

At least we re not Zionists.

Nicholas

"In your conveniently prejudiced little world, where everything is black or white, left or right, good or bad"

Ha ha! Actually I am a firm believer in shades of grey and pragmatism except where it comes to the Left - which I have learned through many decades of experience is pure, unmitigated evil.

Pleading that at least you are not Zionists (whatever that means, but it seems to speak volumes of prejudice), is akin to the Nazis pleading that at least they were kind to animals. You people really do have a blind spot to the irony of your position. You accuse others of bigotry, racism and prejudice but display it more than other ideology - and legislate for it too.

As I stated before. Laughable. Risible.

Nicholas

And another thing - directed at all lefty Thatcher haters. Thatcher was PM for 11 years. New Labour have been in power for 12 years. Are you really suggesting that Thatcher left a legacy so impregnable that the best efforts of Blair and Brown could not change it? I thought Blair won the election on his promise of change? What happened? Either the premise of Thatcher being to blame is incredible or the New Labour years have been staggeringly incompetent and ineffective or, as is actually the case, both.

If Thatcher or someone like her had still been in power Britain's deficit would not be so enormous. She knew a bit about housekeeping and balancing the books that one.

Tiberius

It may have come from the conference hall rather than the rooftops, TGF, but Osborne gave warning to the bankers about their dubious practices should they continue when he is in a position to do something about them.

This interest rate gap was being mooted by some commentators a few months ago as discounting a rise in inflation, particularly when QE was rather novel. It was in the commercial environment that the real reason was first known which is, as Fraser says, that the banks are fleecing customers as they recover past losses. So tracker mortgage holders should ask the advice of a good IFA before they try to second-guess a rise in inflation, otherwise they could cost themselves a small fortune.

For savers and other mortgage holders, the fact is the banks are shafting them. Indeed if you're a taxpayer, with savings, a fixed or variable rate mortgage, and who enjoys foreign travel, Brown's actually shafting you four ways.

emil

Nicholas

be fair mate, Brown had bigger fish to fry (not easy selling gold at rock bottom prices, whilst stealing our pensions), and in fact seem to be rather happy with the system that Maggie, and her successors, had left him. Rightly so because it took him over a decade to completely screw it up, which is around 9 years longer than Labour chancellors usually need.

TGF UKIP

11.36 pm Thursday 8th October, Fraser Nelson post headlined "Gove's 'free schools' will be able to profit."

P7 News of the World today, Fraser Nelson writes:"From my conversations last week, I'm confident Cameron will let the new schools make a profit."

P6 News of the World today, Michael Gove writes: "I don't think that we should introduce a system where profit-making firms can be put in charge of the nation's schools. We want the money that is raised from taxpayers for education to be used in the classroom and not end up going to private shareholders."

Well I did comment in response to your Thursday post that I was sceptical, Fraser, and so should you have been.

Don't forget that "profit" is a dirty word for the Clique unless, of course, it's being made by them or their mates.

Lily

The BBC have singularly failed to hold this Government to account- allowing one minister and party hack after another to parrot the party line about Brown being the greatest Chancellor ever and leading the way out of this crisis, with very little informed challenge. For months Newsnight in particular, has given the Tories a much harder time, rather than go after those responsible. Ben Bradshaw's hissy fit was revealing as well as amusing. Now the writing is on the wall , perhaps belatedly the broadcsting landscape is changing, I and millions of non- aligned listeners deserve and want some unbiased and even handed reporting and analysis

Tiberius

I wish to confirm TGF UKIP's "Grayling: The Sequel", having read the NOTW online after fighting past all the ads about how to improve my sex life, and seeing how shocking the sex antics of our celebs are, and no doubt Fraser will come back with a riposte (about the schools, of course) in due course.

My time as a primary school governor has convinced me that schools have to allowed to run independently if our education system is to improve. To be honest, if I were a bursar/shareholder of an independent school, I would want any profits/surpluses ploughed back into the school. The £5k per pupil would in almost all cases require being topped up by fundraising activities, so any sharholder wanting a dividend is going to have to wait until pupil numbers swell to achieve significant economies of scale. One might consider dividends at that rather distant future point.

The Annexe of our school, which provides pre and after school classes, is a limited company under LEA supervision, and it has to be non-profit making. But it's pricing structure does bring a "profit", which the LEA takes, but re-routes into the school. What Gove's plan achieves is the cutting out of the red tape of dealing with the LEA, and lunacies such as extra funding streams being dependent on numbers of children receiving free school meals (schools in affluent suburbs receive less funding per capita as a result), and the teaching salary budget being dependent on class sizes or school roll and national pay scales. This is before we even get to discipline, which would allow heads to exclude without the prospect of being undermined on appeal.

So while we can have our fun in watching the Tories suffer in dealing with the political angles of this issue, none of us should forget why education has rightly been put at the top of the Tories' agenda.

BP100

In our concern for those mortgage payers who may not be benefitting fully from the lower rates we should not overlook those (many of them elderly pensioners) who are reliant on the interest on their savings. Surely it is they who are being made the real victims of this scandal.

diarmidwp

What is this nonsense? Is the government responsible for the banks buying-up bundles of rubbishy mortgage securities? Where did they mandate that exactly? The low bank rate is not some freak of nature, as Nelson appears to think - it is a response to the consequence of the previous recklessness of the banks. This recklessness has had other consequences that now mean the banks are using a larger interest-rate spread to maximise their profits. If Nelson thinks that banks should *not* be maximising profits, he has a point, but only the Greens and the Socialist Labour Party would probably support him in this. So if he is suggesting we should vote for either of these parties, I think he should come right out and say so.

Nicholas

emil: "and in fact seem to be rather happy with the system that Maggie, and her successors, had left him."

Er, Bank of England - tripartite regulatory system?

Tom

Hi, Fraser - or someone else - could you work out what the value of the gold brown sold back in the 90s would be worth today given that its price is at a now record high - >$1,000/ounce.

michael

Another £17500000000...for being nice?

Fair enough.

Sunil Prasannan

O/T Do you think Gordon was involved?

http://www.savonlinnafestivals.com/en_index.htm

facebok

Whatever you say, but I do not agree with your point of view about this issue