What Portugal means for the UK

normanc

Lay off the Commons subsidised bar before writing up articles. This is complete nonsense. What has happened to the rate we pay for our borrowing since last May, when markets still had hope that the government would tackle the deficit? And they'll continue in that direction.

Chancellor announced increased spending of:
2011-12 increase of £10.6 billion
2012-13 increase of £9.2 billion
2013-14 increase of £8.1 billion
2014-15 increase of £6.1 billion
(source johnredwood.com)

Borrowing for this Parliament will be somewhere near 500bn by the time we have a giveaway budget or two in 2014/15 (ironically the years when the actual cuts are planned to start). Optimistically there are cuts of around 0.6% planned but I doubt we'll acheive even that paltry level. Taxation planned to rise by a staggering 170bn or so over this Parliament (that's where the real deficit reduction is coming from) a lot of this based on optimstic growth figures.

I'd stake my mortgage that we'll still be borrowing 50bn+ come 2015 and interest rates on our borrowing increasing over course of this Parliament.

You can make the case that it'd be worse under labour (and I'd agree) but to suggest this government is leaving anything but a complete fical nightmare for future generations to sort out is fatuous.

Boudicca

Just think how much more we could reduce our deficit by, and put towards paying off our debt, if we weren't subsidising the Eurozone PIIGS or paying £48million a day into the EU.

Are we supposed to be grateful to the Coalition? I can't for the life of me see why.

Norman Dee

and it's only just starting Boudica, Europe forced Ireland and Greece to take the bailouts, they are now forcing Portugal, and again we will contribute. Next it's Spain then Italy, wait till that particular merde hits the fan, the first three combined will be less than Spain, and Italy more again.

Simon Stephenson.

Here's a trio of posers for you Mr Hancock.

Do you think that the 8% Portuguese rate is in any way influenced by that country having a far worse external debt position than, say, the UKs? And could it in any way also be possible that the rate is pushed up by the fact that Portugal is in the Eurozone, and therefore less easily able to rectify its economic imbalances than countries outside the Eurozone - countries like, say, the UK? Moreover, could it be possible that the 8% reflects a genuine fear that a distinctly possible resolution of the Euro crisis will involve partial write-offs of the debts of the troubled Southern European nations - write-offs that for AAA rated countries like, say, the UK, clearly aren't on the bond market's radar screen?

If you agree that these three factors may at least partially explain the divergence between the UKs 3.5% and Portugal's 8%, can you then explain why you have suggested that we too should expect 8% interest rates if we fail to follow exactly the deficit-reduction path set out by the current government?

What do you think the readers of this blog are? Halfwits?

Ken Bishop

Two simple ways to save lots of money: (1) stop invading other people's countries, (2) stop bombing other people's countries.

Rhoda Klapp

" A clear plan is being followed here "

And would it involve a good deal of nocturnal whistling?

Verity

What Portugal means for the UK?

It gives George Osborne someone to cuddle?

In2minds

I wonder if Ken Clarke is still keen to join the euro, and should we be told if he is?

denis cooper

Mr Hancock is one of the 310 MPs who voted yesterday for Cameron to support a treaty change which other EU countries desperately want, but without demanding any significant quid pro quo for our national benefit and especially to protect our long term national interests.

http://www.publications.parliament.uk/pa/cm201011/cmhansrd/cm110323/debtext/110323-0004.htm

"23 Mar 2011 : Column 1063

Deferred Division

Section 6 of the european union (amendment) act 2008

That this House takes note of draft European Council decision EUCO 33/10 (to amend Article 136 of the Treaty on the Functioning of the European Union with regard to a stability mechanism for Member States whose currency is the euro) and, in accordance with section 6 of the European Union (Amendment) Act 2008, approves Her Majesty's Government's intention to support the adoption of draft European Council decision EUCO 33/10.

The House divided: Ayes 310, Noes 29.
Division No. 236]

AYES

Adams, Nigel ...

... Hancock, Matthew ... "

Commentator

normanc, entirely accurate. The Coalition is just New Labour reflagged.

Chris lancashire

Would all the anti-EU fanatics castigating Osborne just stop and think - really think - about the only realistic alternative government. If anyone is struggling the picture at the top is a clue. Now think hard what they would be doing now - bottowing lots more, spending it on useless make-work schemes and digging this country even deeper in to its debt pit with even less hope of ever getting out.

I'm not keen on a lot of the EU but for heaven's sake stop and think about the feasible alternatives.

Scotty

Its obvious that the deficit must be controlled - we may not be constrained by being in the euro, but we still have an enormous debt to pay off and those supporting that debt will need to know they will be repaid - if the new labour or the old labour gang were in power we would end up with increased debt, because spending our taxes is all that labour of any age can do.
Just think what situation we would be in if balls was making decisions - he would be stealth taxing us to total bankruptcy.

TrevorsDen

Mr Lancashire - its part of your charm that you can suppose a reality where these anti EU fanatics can actually think.
I like probably you can do without the EU, but we live in the real world.

We have better interest rates because we are getting our economy under control. Portugal is in a mess because its MPs have umpteen times voted NOT to get their economy under control.

I think we can ignore the reliability of people who say cuts are only going to start in 2014/15.
My local authority is certainly not working on that premise.

TomTom

Another Bank Bale Out disguised as rescuing a sovereign state. It is time Deutsche Bank took a full haircut and lost its shirt. We are not going to impoverish citizens to fund bank profits and to rescue them from stupid decisions. Britain did not join the Euro and did not borrow on the basis of a German Fairy Godmother honouring our gambling debts. Time for the Banks to see their Bonuses wiped out and not just their Shareholders

denis cooper

Trevorsden -

So as a thinking person, do you believe that it is our national interest for our government to sign us up to a "Save the Euro" campaign?

I remember when Hague was more interested in "Save the Pound".

Under present treaty arrangements the two are incompatible in the long term, because THE EUROZONE CAN ONLY GROW.

There should be a treaty mechanism for a country which has joined the euro to make an orderly withdrawal, but there isn't.

There should NOT be a treaty obligation on all EU countries to eventually join the euro, but apart from the UK and Denmark there is that legal obligation and it is automatically imposed on all new member states.

Cameron had it in his power to insist on those two treaty changes to cut the eurozone down to size and limit the long term threat it would pose to our national interests, and to demand other concessions such as an end to the EU Parliament sitting in more than one place and permanent exemption from the WTD, as the quid pro quo for the treaty change wanted by Germany and France in particular.

Instead he is prepared to give them whatever they want and demand nothing in return, and Matthew Hancock and 309 other MPs, including all the Tory MPs bar about 20, have just voted in favour of that policy of appeasement.

MaxSceptic

EU Referendum Now!

michael

Its not what 'Portugal means to the UK'.
Rather what the UK means to Portugal.

-Our cash to maintain their over extended state, ie no tuition fees in their public universities.

RCE

The argument that it would be worse under Labour is one of the stupidest I've ever heard. The fact that there are even bigger criminals around doesn't mean the lesser ones get off the hook!

Ian Walker

MaxSceptic: make sure you vote in favour of AV in May, then the next election becomes a de facto referendum on EU membership.

Rhoda Klapp

Would Mr Hancock like to tell us why he voted as he did, and what his take on the EU is?

Or is this merely a pulpit, not a discussion?

Chris lancashire

RCE: Not stupid, realistic.

stabledoor

It's all very well going on about Portugal, but what about the proposed closure of the municiapl tip in Newmarket eh? or are you above that sort of thing? and why did you vote for that EU proposal?

john miller

This article would be vastly improved by eliminating the text but retaining the headline and the picture.

The 2EdsWorseThanOne would be re-lected in perpetuity in sunnier climes.