Politics

Read about the latest UK political news, views and analysis.

Friday

Peter Hoskin

The FTSE takes a hammering

At close of play, the FTSE was down a hefty 8.85 percent – putting it below the 4000 mark, and sealing what has been the worst week for the index since 1987.  No.s 10 and 11 will be praying furiously for a change in the tide.  As I wrote earlier, the longer this market slump goes on, the more their bailout package will appear to be one colossal waste of public moolah.  Problem is, investors are panicking over the prospect of a global recession – and there’s very little Brown and Darling can do to change that.

The Skimmer

Who does Brown think he is?

Is our Great Leader getting delusions of grandeur? He told the BBC earlier today that “We’ve had some success in getting the price of oil down …” So not only is Gordon Brown “leading the world” in bank bailouts and moving markets as he does so (mainly downwards, sadly), but now he (who even uses the royal “we”) thinks he controls the price of oil.   It is, of course, an absurd conceit. G Brown no more controls oil prices than he does the movement of the planets. Oil prices have tumbled (to as low as $80 today) because the markets (and now the IMF) think we’re heading for a

Peter Hoskin

Darling’s gamble

Alistair Darling’s refusal to guarantee the savings of those councils and other bodies which have money tied up in Icelandic banks could have some particularly nasty side effects.  Writes the Times: “…The Times learnt that some town halls were considering withdrawing all their cash from private institutions and putting it into more secure Government bonds. If dozens of councils follow suit this could lead to a damaging run on the banks, local government experts cautioned. Westminster and Kensington and Chelsea, two top London councils, said that they were looking at this option. Tony Travers, of the London School of Economics, said: ‘Local authorities hold tens of billions of pounds in

Peter Hoskin

Brown’s get-out plan

Is this the sound of Brown changing his story?  Seems to me he’s deploying a slightly different version of his “I’m trying to get other world leaders to follow my lead” theme.  Here’s what he said in a BBC interview earlier, explaining why the fruits of his financial labours will only start showing up in the medium term: “What we need now – as I said this morning – is other countries to do similar things [to our bailout package], because this is a global financial system.” It’s a subtle but significant shift.  The implication being that if other countries don’t do “whatever it takes”, then our bailout may not have the

Peter Hoskin

The early signs aren’t promising for Brown

It’s down, down, down for the markets – and how.  The Dow Jones closed down by 7.33 percent; Nasdaq down 5.47 percent; and the Nikkei down 9.62 percent.  Whilst the DAX is currently down by 9.25 percent, and our very own FTSE has plummeted by 7.34 percent. What’s more, three-month LIBOR rates – the rates at which banks tend to lend to each other – aren’t showing much sign of downwards momentum after the series of coordinated interest-rate cuts by central banks. Of course, it’s early days as far as the bailout package is concerned, but these latest indicators do suggest that the banks, the brokers and the analysts have their eyes

Thursday

Fraser Nelson Fraser Nelson

Is Brown’s plan to rescue the world’s financial system really his?

Not content with saving us poor souls in Britain, our Dear Leader now wants to save the world – and says so in tomorrow’s Times. He is demanding that other dithering countries copy his bold plan. It’s become the major theme of Saving Private Gordon – that the rest of the world will be inspired by the Dear Leader and show their love for him by adopting a similar bank recapitalisation scheme. Brown has mentioned the international element of this so often that I have started to smell a large, whiskered rat and I’d like to run a theory past CoffeeHousers. Gerard Baker tells us that the G7 had been

Peter Hoskin

Why Brown is so happy

There is something unnerving about seeing Gordon Brown smile so much on television. Yesterday he saddled the British public with more debt than any peacetime Prime Minister – taking a massive gamble with money the public haven’t even earned yet. What’s he got to smile about? Well he believes that he has finally moulded the crisis into a party political weapon and whacked David Cameron with it. There is now plenty of polling evidence that the crisis is playing into his hands. Just three weeks ago, the Tories had a 17 point lead on economic competence (YouGov/Telegraph). After more news cycles dominated by the financial crisis this had narrowed to

Peter Hoskin

Clegg adopts the right level of cooperation

The most impressive moment in yesterday’s PMQ’s came courtesy of an unlikely source – Nick Clegg.  The Lib Dem leader generally toed the “we’ll cooperate with the Government” line, but he also stirred in a punchy addendum: that some of the money Brown’s splashing around might be better spent on reducing the tax burden for low-income earners. I happen to agree with him, but – whatever your views on that front – there’s little denying that Clegg’s found a message which enables the Lib Dems to operate in a spirit of cooperation whilst also saying something a little bit different and eye-catching.  After all, post-10p tax, there’s scant chance that Brown will dismiss Clegg’s concerns with a “Shut up, you’re meant to be working with us” response –

Fraser Nelson Fraser Nelson

Questions, questions, questions

Ben Brogan in today’s Daily Mail goes on precisely the right theme: translating these squillions into the real money – £16,000 per punter. The “that’s our money” anger picked up in the vox-pops around the country from members of the public has no echo in Parliament. This worries me – there’s something like £400 billion at stake here, and more scrutiny is required. It’s times like this I wish we had an American system, with a directly-elected prime minister, appointed Cabinet and separate legislature with its own mandate. America had plenty voices speaking up for its deeply suspicious taxpayers. In Britain, we don’t. I’m not saying I’m against the bailout.

Wednesday

Fraser Nelson Fraser Nelson

A Swedish-inspired plan

Sweden really does rule. What Mervyn King and Gordon Brown have agreed today is, essentially, the Swedish 1992 bank bailout plan, (NYT write-up here). It was authored by the same conservative government which introduced the voucher school model that the Tories are proposing to replicate. While the UK bailout is comparable to the Paulson plan in the US (adjusting for the size of the respective economies) in terms of scale, it is a far better plan. And this is where Gordon Brown does deserve some credit. Instead of buying toxic waste, as Paulson proposes, the UK taxpayer is injecting capital and taking preference shares. This means that if the economy

Peter Hoskin

Will the Government follow the IMF?

The Tories tried to make political capital out of the International Monetary Fund’s latest growth forecasts in today’s PMQs.  You can see them on page 2 of this pdf.  What’s so significant about them?  Well, they’re pretty gloomy for starters – they put the UK’s economic growth at only 1.0 percent for 2008, and -0.1 percent for 2009.  And they’re also the most signficant growth predictions made since the financial crisis really blew up a few weeks ago, meaning they’re more likely than most to account for just how bad things are.  Indeed, the 2008 figure is down by 0.8 percent on the forecast made in the IMF’s last World

Fraser Nelson Fraser Nelson

Bailout blues

Three thoughts on the bailout… 1) Should the Lloyds-HBOS deal still go ahead? Originally, Brown agreed to waive the competition concerns because HBOS might collapse on its own – but after today’s deal, there’s no danger of that. The bailout gets HBOS out of the very particular pickle it was in. As Robert Peston notes, Lloyds is suddenly looking like getting a rare chance to hoover up a third of the market, based on an promise made for reasons that are no longer valid. So this “get out of competition commission free” card which Brown gave his friend Victor Blank may be worth quite a fair bit. Hence shares of

Fraser Nelson Fraser Nelson

PMQs report: Brown gets away with it

It’s unfair to say Brown “won” PMQs because Cameron decided not to play. There was a distinct air of national crisis to PMQs which, of course, helps Gordon Brown. Few amongst us would be so bold as to think the taxpayer will see this £50 billion again, but David Cameron was not going to point this out. His problem through all of this is an inability to say what he’d do differently. The rating of leaders rises during wartime, fear heightens collectivist instincts so this all benefits Brown. His mission is to talk up this idea of an economic war – but at the moment he doesn’t need much help.

Peter Hoskin

Live blog: PMQs

1157, Peter Hoskin: Welcome to Coffee House’s live blog of the first PMQs of this Parliamentary session (you can watch it here).  Expect a lot of back-and-forth about the £50 billion bailout, all in a spirit of aggressive cooperation.  And stay tuned for Fraser’s detailed report later. 1204, PH: Here we go… 1204, PH: Brown confirms that interest rates have been cut by 0.5 percent.  That could be the most significant thing to come out of this PMQs. 1206, PH: First question from Robert Goodwill – “Does the PM agree with the IMF that the economy will contract next year?” Brown’s response: the usual “Every across the world is facing this…”

Peter Hoskin

The £50 billion bailout: Brown’s statement

You can watch Brown’s statement on the bailout here.  It’s full of the usual reminders about “global problems” which “started in America”, and platitudes about “fresh and innovative intervention” and “long-term challenges”.  But, to be honest, this is an arena in which Brown thrives.  His dour bank manager shtick lends itself to talk about liquidity, assets and guarantees.  The question now is whether voters and companies are convinced by it. MARKET UPDATE: The FTSE is down 4.51 percent at 10:35.

Peter Hoskin

Will the rescue plan work?

What to make of Brown and Darling’s £50 billion rescue plan for the banks? As with so much during this financial crisis, there’s a distinct air of uncertainty around it. There are potential upsides: it should help restore some degree of confidence in the banking system, help banks lend to each other, and stabilise the markets. But there are potential downsides as well, including: 1) Debt. The £50billion will be funded by increased national borrowing. And there could be more on top of that if HMT ever has to act on its promise to underwrite loans between the banks. As Fraser’s pointed out, the deficit is already daunting enough. This latest could

Fraser Nelson Fraser Nelson

Amid the financial turmoil, Peter versus George is the key battle

The Taverna Agni is one of the more expensive restaurants in Corfu, but one would scarcely expect Peter Mandelson and George Osborne to slum it. As is normal for members of London’s political elite, they found themselves in the same exotic location one August weekend. So they went to chew the kleftiko together and laugh about Gordon Brown. We know that Mr Mandelson ‘dripped pure poison’ about the Prime Minister because the fact was leaked to the press within hours — but no one ran the story. Who, after all, cared about a long-retired spin-doctor named Peter? Scroll forward six weeks and that conversation is front-page news. When Mr Mandelson

Tuesday

Alex Massie Alex Massie

The Problem With Non-Americans

At Culture11 there’s some advice for the candidates before tonight’s “debate.” It’s unlikely much of it will be taken. At her own blog Kerry Howley adds this: I’ll just add that there is a massive gap between Obama’s actual rhetoric and the conservative portrayal of him as some sort of naive, starry-eyed internationalist. There is no globalist in this election, naive or otherwise. There is the candidate who insists that foreigners are bloodthirsty killers, and the one who keeps reminding you that foreigners will shutter your factories, poison your children, and destroy your domestic motorcycle industry. Yes, yes, I realize that we aren’t supposed to listen when the Obama campaign

Peter Hoskin

Meetings as theatre

Hold the front pages.  Brown’s just called a “crisis meeting” with Alistair Darling, Mervyn King and Adair Turner, the head of the Financial Services Authority – three people he should be (and is?) in round-the-clock contact with anyway.  Of course, our PM’s been milking this financial crisis for every drop of its theatrical worth all along – few in Westminster think his economic council (which met yesterday, by the way) will actually do anything substantive.  But this latest move deserves its own run in the West End.  Instead, it will most likely get a run in tomorrow’s papers.  If so, mission accomplished for Brown and his cadre of spinners.