Will Labour pay a political price for NR nationalisation?
January 14th, 2008
Was action delayed because of the planned November election?
With the government having lined up a veteran City executive, Ron Sandler, to run a nationalised Northern Rock there’s been a big downward move on the stock market on the NR share price. The expectation is that if the government steps in then equity investors will suffer.
But what is the political price of such a move which has been advocated by the Lib Dem treasury spokesman, Vince Cable, for several months?
A lot depends on how much this is going to cost the tax-payer and, no doubt, the plan is to bring some stability to the institution and then try to sell it off.
But could the government be accused of not taking proper action in September because of fears that such a move could have damaged the build-up to the planned November 1st general election?
And will we hear opposition politicians like Cable and Osborne argue that that it could all have been sorted at a much lower cost then if the right decisions had been taken?
The danger for Brown and Darling, surely, is if the argument develops that the taxpayer is being left to foot the bill for the costs of deferring proper action beyond the planned general election date.
It might all go well for ministers but one of the reasons why I moved from a being Labour buyer to a Tory buyer on the commons seats spread markets at the weekend was my view that NR could caused further undermine Labour’s poll ratings.
Mike Smithson
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(From Previous Thread)
282- Which of course he isnt, so I guess the “Golden Rule” will have to be changed again.
Was it the election or was it that they didn’t want Brown’s first big action to be a nationalisation with all the ‘old’ Labour overtones?
They will simply look foolish, especially after all Vince Cable’s warnings. But looking foolish comes naturally to them.
How does this square with EU rules about state aid or are we doing a France and ignoring it.
‘But could the government be accused of not taking proper action in September because of fears that such a move could have damaged the build-up to the planned November 1st general election?’
Unequivocally yes. Policy towards NR has been driven by short-term political considerations from the outset. Basically throwing public money at it in ever increasing dollops in the hope that firstly, Labour could win a snap election, and then after the election was abandoned that somehow a white knight would ride to the rescue and buy the wretched bank.
From the outset it was obvious that NR would need very deep restructuring (aka job cuts) at the very least in order to survive in some form. The government baulked at this due to NR’s importance (in various ways) in the NE and tried has tried to fudge the issue ever since. Nationalisation or administration became inevitable weeks ago, but the government has simply refused to face reality.
4 - What are the penalties for breaching those rules? If it is a fine then that will severely damage Labour’s electoral chances.
I have seen this argument put forward before, that action on Northern Rock was deferred because of the prospect of an early General Election. Probably read it here, I can’t exactly recall. If this view becomes common currency then it will be dynamite for Brown and Darling.
Yes, this is going to look bad for Labour – and not a lot better for the Conservatives. It’s not just that the final solution is less than ideal from an ideological perspective, it’s that it looks like they have had to be dragged kicking and screaming to take the only possible course of action. Their management of the crisis looks (and, indeed, it was) weak.
From a commercial perspective, once a lender has lent a significant sum to a borrower, then they can influence some sort of control over the borrower. HMG should have put their man in charge ages ago, regardless of whether the process was called “nationalisation” or not.
Perhaps the Lib Dems might benefit. They showed the only sensible and practical course of action to take, but I doubt if the electorate is too worried about that sort of thing.
6 Well if they break the rules, they may as well then drape themselves in the flag and refuse to pay the fines. “Putting British investors first” etc etc. Could end up being a positive…
6 - I’m not sure the rules apply in the same way if the entity has been formally nationalised.
But in any case, if they’ve picked Sandler to run it, I don’t see it being run for a while then returned to private ownership - he’s a problem solver, not a manager, from temperament. I think he’ll aim to do an Equitas and put an effective structure in place to allow NR’s run off and dismemberment, with the goal of minimising losses on the existing book of assets.
The man from “Banker” magazine says they’ll do a deal to avoid the N word (on the radio 30 minutes ago)
Tend to agree
Vis-a-vis the Tory position, I doubt they’ll take any damage at all, and only minor if they do. Don’t forget a certain G. Brown wanted us to go into the ERM earlier than we did, and yet he never stops banging on about Black Wednesday.
11 But John W, it doesn’t really matter what they call it, does it? The Company is no longer independent - it has a new owner in the shape of Her Majesty’s Government. It is controlled, if not 100% owned, by the nation.
8. Labour will suffer because a) they will look incompetent for having mismanaged the situation over so many months b) ‘nationalisation’ will send a shiver down the spine of the long-memoried and c)because eventually there will indeed be a jobs armageddon in the NE.
As for the Conservatives, all they have to do is watch the slow motion train crash play out. They will benefit by default whatever they say or don’t say.
O/T-where they are having an election is Spain, 9 March.
“Will Labour pay a political price for NR nationalisation?”
Not immediately, but, yes, ultimately.
The damage to Labour probably won’t be as “bad” as the Conservatives like, but neither will it be as “good” as Labour hope. It will simply add to the narrative of a government of questionable competence which has lost its way.
The truth is, Labour did have *some* grounds for diminshed responsibility when this crisis *first* arose - although they were indirectly responsible for the climate in which it occurred (no other country has had a problem with a bank run) by creating a split regulatory framework (FSA/BoE) and for not intervening earlier, when they could - but that has been eroded by this dragging on and on and on, with no end in sight, which has racked up billions of extra public liability.
Finally, it doesn’t matter “who” said “what” and “when”. This is
politics. Labour can be accused of delaying decisive action due to the planned election in November. The Conservatives weren’t the ones in charge. Labour were.
Consequently, Labour will carry the can.
12. “Vis-a-vis the Tory position, I doubt they’ll take any damage at all, and only minor if they do.”
And who started the de-mutualisation of building societies into banks?
Nevada poll: three-way Dem split, McCain narrowly ahead
http://www.rgj.com/blogs/inside-nevada-politics/2008/01/new-poll-democratic-race-in-nevada-dead.html
It will depend on how the Media view this. Will the Mail/Sun/Times/BBC/ITV see this as a failure by Brown, adding to the national debt?
The media matter more than the facts. Brown has already blown his reputation as “Mr truthful” with the media. If he blows his reputation as “Mr steady economy” with the key media channels then he is a busted flush. Notable that Murdoch’s “man in the UK” Irwin Stelzer has started to put some clear blue water between himself and Brown.
Up until now Brown has had the easy ride from such economic lefties as the BBC’s Evan Davis (soon off to Today) and Stephanie Flanders with their “if this, maybe that” approach to analysing Brown’s debt mountain. Along with the lovein with Dacre at the Mail and the jockocrat Gordon Pascoe-Brown at the Sun, no wonder Brown has felt unchallenged.
But if that changes…..
The real price to be paid for Northern Crock is by all of us with the damage to the reputation of the City to manage these matters. We have to face up to the reality that London is diminished due to this mess and the fact that it could not supervise a multi billion pound bank properly. Nor could it find a financial solution within the private sector. I suspect that was due to dithering by the Govt but will the media see it that way?
But to put a figure on the financial impact of all this is impossible. We will all be a little poorer in future years.
The public are results merchants: they will be unforgiving of failure. Nationalisation in the circumstances envisaged is serious failure.
For myself, I don’t believe that electoral considerations have played any part in the handling of Northern Rock, but if there was substantial evidence of such behaviour (as opposed to circumstantial evidence), it wouldn’t just be damaging, it would be Government-destroying.
I doubt the original NR situation was Labour fault but
1. Its all gone tits up on there watch. basically after about 4/5 years in power anything that goes wrong on your watch is your fault what ever the underlying actual facts.
2. The delay, and the fact Vince cable has been saying “nationalise” for months will make them look weak. I don’t know if the charge will stick that they delayed becasue of the election but i dio see this being damaging for them. It feeds into the january/I have no money/ god look at my latest fuel bill feeling magnified by house price stagnation.
A few interesting polls -
Nevada Caucus (Research)
DEM
Obama 32, Clinton 30, Edwards 27 (Edwards makes a comeback?)
GOP
McCain 22, Giuliani 18, Huckabee 16, Romney 15, Thompson 11, Paul 6
Florida (Quinnipiac - who?)
McCain 22, Giuliani 20, Huckabee 19, Romney 19, Thompson 7, Paul 5
Florida (Rasmussen)
McCain 19, Giuliani 18, Huckabee 17, Romney 18, Thompson 11, Paul 5
Michigan (Reuters/CSpan/Zogby)
Romney 24, McCain 27, Huckabee 15, Paul 8, Giuliani 6, Thompson 5
Michigan (Mitchell Research)
Romney 29, McCain 27, Huckabee 12, Paul 7, Giuliani 7, Thompson 4
No South Carolina polls since Thursday (strangely).
Tight as a gnat’s whatsit, as they say…..
GOP race. McCain now odds on with William Hill for the nomination at 4/5. Guiliani out to 4/1.
17, “And who started the de-mutualisation of building societies into banks?”
Oh I see. This has nothing to do with the tri-partite system set up (rather more recently) by Comrade Brown, or the impending election-that-wasn’t that could’ve prevented earlier action.
Why didn’t I think of this? After ten years of a Labour government, the first run on a British bank for over a century is obviously the Tories’ fault! I feel such a fool…
CR 16 I believe I have seen you saying this sort of thing before (but I suppose it doesn’t matter). Are you trying to make the point that no-one takes the slightest notice of what any politician says, only what they do? And, by implication, presumably, if you are not having an influence or control of events, ie in opposition, you are not listened to, or remembered, or what, precisely?
UK Paul. I’ve left a message for you on the last thread to spare the non film buffs the trouble of scrolling!
23-Quinnipiac is one of the major pollers in the US despite the somewhat frightening name.
http://en.wikipedia.org/wiki/Quinnipiac_University
25. De-mutualisation is a silly red herring. Most UK banks have managed not to run out of funding and beg the BoE for gigantic loans, even those which have unwisely dabbled in subprime and related products.
NR’s problems originated in a reckless growth strategy that the regulators should have picked up on long befoe they did. Since these problems emerged, there has been a catalogue of government mismanagement.
Alan J on 282 previous thread regarding GDP growth, deficits and meeting the meeting the Golden Rule.
Gordon Brown on Marr’s programme on 6th said ” We’ve just finished one economic cycle where we’ve met the golden rule. Well that will be assessed in the Budget of course. We’re starting a new economic cycle.”
So Puppet Chancellor Darling will presumably not go against His Masters Voice and in next Budget will announce the Golden Rule has been met for last economic cycle and now we are entering a new one!
Not sure but I thought a cycle was measured from peak to peak of growth around the long term trend so if we are entering a new cycle does that mean Gordon says we are now coming off the peak and going into lower growth/recession?
St John. “If this view becomes common currency then it will be dynamite for Brown and Darling”
You are starting to sound like a Tory! It’s an ever present danger of spending too much time on this site. I have to stop myself using this kind of hyperbole after a flick through the thread so I know the problem.
The truth is that nothing is ever ‘dynamite’ because apart from anoraks no-one is sufficiently interested. In 1995 John Major resigned as leader of the Tory Party for some reason long forgotten but even that wasn’t ‘dynamite’. The Tories lost in ‘97 because voters lost a fortune in the wave of repossessions and memories of Thatch. Nothing else.
Northern Rock retains the ability to do Labour considerable damage, more through the drip feed of negative stories than anything else. Most of the arguments are too arcane or complex to be readily understood by the electorate - I don’t believe either the Tories or the LDs will convince the public that the tripartite regulatory system is fundamentally at fault or that it would have been in the interests of the UK to let the bank go to the wall (I think the Tories in particular would be vulnerable to the charge that they are reckless and uncaring if they indicate they would have let Northern Rock crash and risked a run on other banks).
I’m afraid it goes back to narrative - the longer this drags on, the more often it makes the papers and the 6 o’clock news, the more people are reminded of this government’s propensity to be associated with failure, and the harder it is for GB to free himself to talk about “the vision thing”.
8
‘Perhaps the Lib Dems might benefit. They showed the only sensible and practical course of action to take, but I doubt if the electorate is too worried about that sort of thing.’
What’s sensible about propping up a dying company by
nationalising it and putting billions of taxpayers money at risk?
The most sensible and practical course of action was propossed by Mervyn King and blocked for political reasons by the government.
Why should NR be treated any differently from any other failed company?
As for the opposition parties, this will be largely neutral. The Tories might become less distrusted with the economy than Labour, but GB will keep reminding people about Black Wednesday and negative equity so they will not exactly capitalise. They will score points around the edges by forcing hapless ministers to spin and get caught out, and they will make a bit of capital out of the risks attached to the £20bn potentially unsecured loan. However, I don’t expect the Tory leadership to focus relentlessly or ruthlessly on this because the detail just won’t resonate with the public. This is one of those stories that runs along at its own pace without the opposition having much chance to influence it.
For the LDs I think the effect will be almost unnoticeable. However well the excellent Vince Cable plays their hand, the simple truth is that people just don’t look to the LDs for a steer on how to handle the economy. ID cards should be much more fruitful for them.
I must add that when I heard yesterday that NR was likely to be nationalized my first thought was what a clever politician Vince Cable was. He not only predicted it but recommended it as the only realistic alternative. I also couldn’t help but compare his foresight with Osborne/ Cameron’s lack of it when they dismissed Cable’s idea out of hand. As an involved party I could understand why Brown/Darling had to be circumspect.
Well done Roger! So the scores on the board of this debacle are:
Brown/Darling - understandably circumspect
Cameron/Osborne - lacked foresight
In your daily life, are you habitually mistaken for Solomon?
26. Tim13. Yes and no.
(1) Governments get far more publicity than opposition parties. Ergo, their successes (and failures) have a much bigger impact on the public mood.
(2) People will remember what *has* happened, not would *could* have happened if X, Y or Z had been differently. That sort of policy minutia simply doesn’t register.
(3) People will blame *whoever* is in charge for what happens. Whether this was their fault or not. What might have happened is all hypothetical to them. Whoever is in charge carries the can.
(4) Opposition parties only have influence where they can gain the media narrative. By definition, they can’t “do” anything, therefore what they “say” has to be pretty stellar in order to make it newsworthy enough to be reported. It is even harder for them and their “story” to stay in the news, because it is always going to be intrinsically less newsworthy than what is directly relevant to everyday peoples lives - ie. what the government is doing.
This is why governments lose elections, rather than oppositions winning them. Because a cock-up by the guy in charge will always be more newsworthy, relevant and have greater impact than some fine words from a well-regarded opposition.
I hope this answers your question.
Seven months in and 15 to 27 months left before the next GE campaign, what renewal has Brown done in the Labour party?
It has no General Secretary and the recruitment is rumoured to be delayed until March. The Party Chief Harman has 2 other jobs and no recruitment drive is underway. Party debts are so high that at least one journalist has speculated about bankruptcy. Unlikely but does mean they have little cash to re-build with.
Are Labour more ready for a GE than when Brown took over? It looks not. So 7 months thrown away and at this rate of progress Labour will hardly be ready next year.
Even LabourHome has started to run articles critical of the Party’s Leadership.
24. Poor odds.
PtP from last thread, I did a bit through the spreads but most via electronic paper gold as an alternative investment to putting some cash in the bank.
I also have a couple of sovereign rings…at least I think they are gold…….
I am inclined to agree with your view Mike and reckon the Libdems will benefit.
Vince Cable has already started
Excellent interview on CH 4 news. Cable rubbishes Darling’s procrastination, demolishes “shareholder” rescue assumption, nukes vested interests trying to make an exploititive killing. Brilliant stuff. This is sure to be repeated on CH 4 site if you missed it.
I think that nationalisation whilst a bit embarassing isnt going to look in any way as bad as when the taxpayer bill starts to total up.
If the government can keep this under a certain amount and no one can point to something like an increased PSBR then they’ll get away with it.
If not, it will do damage.
I wrote earlier that the LDs should get an uplift from the media focus on Hain/Osborne.
Brogan’s blog thinks Hain has until Weds.
“Welsh Questions is on Wednesday, before PMQs.”
So this must be why Labour MPs are running around with the Osborne stuff.
http://broganblog.dailymail.co.uk/2008/01/hain-can-stay-s.html
16 Casino royale.”Labour have some grounds for diminished responsibility”.Great stuff.The men in white coats could be calling at No. 10 any day now - not before time.
24. the value has gone out of that price and indeed to a large extent on the SC & MI races.
Romney looked at decent odds for MI yesterday but has tightened too much now to a point where the hope of a bet/lay is a bit too risky.
Still no one other than Betfair have an SC market which is a pity. Should be Huckabee’s win.
44 Yokel
From the latest polls you’d think Guiliani is pretty much a dead man walking. He’s even struggling in Florida.
Mitt’s hanging in, but he has to win and win big in MI. Hard to see it.
That leaves Our Man and The Preacher. OM’s price is starting to look good, even at 2.38, although never underestimate the power of a preacher man.
Your gold point is noted with respect. You little shrewdie!
“The Tories lost in ‘97 because voters lost a fortune in the wave of repossessions and memories of Thatch. Nothing else.”
The voters still elected Thtcher three times and the Tories had four consecutive terms.That is why they lost in ‘97. There was no in hell they were going to win a fifth term.
On the topic of the Democratic primaries, how come the Clinton JFK/LBJ comment has blown up so much now - I thought the original comment was at least a week ago?
brown is the proverbial “dead man walking”! i honestly feel that the next general election could see NL go into meltdown. i am positioned accordingly in the markets!
45. Ah, Monsieur Punter has now taken to commenting on the race!!
Not so sure McCain is inevitable. Remember the delegate count. If Giuliani wins in NY, CA and FL (and they’re all “winner takes all”) thats ~ 400 delegates. He makes life much, much harder for McCain. Recent polls show Giuliani only 1/2% behing McCain:
http://www.realclearpolitics.com/epolls/2008/president/fl/florida_republican_primary-260.html
McCain loses Michigan and South Carolina. McCain loses momentum that keeps Giuliani in the race. Or Romneys votes could transfer to Giuliani etc. etc.
Far too early to call this. McCain has an edge, but certainly not value at the moment. Even on betfair.
42 The Neath CLP is also meeting on Wednesday.
50 OK.
Flockers @ 34: as you say, when people have looked to a political party for financial and economic guidance, the Lib Dems have been somewhere down the list in the past. But perhaps that is changing. Vince now has a much higher profile, it appears that his judgment was spot on over Northern Rock, and he has also received credit for warning about personal debt levels for years. I can see the Lib Dems being taken seriously on the economy if this continues, whereas sorry Mike but George Osborne still seems a whining little oik when I see him.
Rasmussen poll on South Carolina
McCain 28%,
Huckabee 19%
Romney 17%
Thompson 16%.
Giuliani 5%
Paul 5%
50 TBH If Caerphilly CLP stood by Badger Ron first time round I don’t see what Hain has to worry about
53 Rasmussen have Obama up by 5% in the Democratic primary
53. Wow! A dynamite poll for McCain.
When “privatisation” was a dirty word, the word “denationalisation” was used.
Will the government spin that NR has been “deprivatised”?
55 Doesn’t matter if Obama gets SC. The pivotal state that is shaping up where neither Obama no HC enjoy either home turf advantage (Illinois or New York_) or demographic advantage eg higher numbers of College graduates or African Americans v HC’s more Blue Collar support is California. That state is now vital
56 StJohn
Yes. McCain’s numbers haven’t moved much but Thompson is up at the expense of Huckabee, which helps McCain. The details on Rasmussen’s website suggest though that around 40% of the voters say they might still change their mind !
BTW I haven’t posted much on the US races but have been following with interest.
Dem: Obama is exciting, full of potential, a real change, brings no baggage and seems to have charisma and stature in bucketloads. Which must make being about to lose to someone as average as Hillary Clinton such a painful place to be. Sadly, I think it’ll be president Clinton come November.
Rep: Don’t know why, but I’ve a hunch that Huckabee will surprise everyone to come through. Solid base, reaches out to people well, even though many of his views are little change from the establishment at the moment. He seems to be polling well everywhere, and has decent momentum from the first results. I think Rudy doesn’t look like he wants it enough, Romney looks like he wants it too much. McCain is seriously impressive, but for some bizarre, bizarre reason that I don’t really understand myself, I think that Huckabee could edge him.
Hillary to have Huckabee for breakfast in the autumn though.
56,59. Paul M, I was partly rebelling against Roger chastising me for dynamite hyperbole upthread.
60 I don’t think HC is cut and dried. She can get the nomination sure but this is no cakewalk if Obama can get SC. Even with the nomination if the GOP picks McCain it will be knife edge all the way. It may well be President Clinton but only a 50/50 shot I’d say given she faces fights in both the nomination and the General unless the GOP commits hari kiri and nominates Huckabee naturally enough
Casino 37
Sorry been a bit busy since you sent your full and considered reply - I will reply properly before the end of the evening. Thanks.
49 Casino
I don’t think the Republican primary in California is winner take all. Its by congressional district, so effectively 53 seperate mini-primaries.
155 previous thread - re: Exeter University. Not really much evidence of Thatcherites when I was there (97-01). We had a Free Tibet room - is that left wing or right wing - but I think they got rid of it in the last few years so as not to offend the Chinese. On the whole Exeter students are pretty apathetic now. When the tuition fees protests started they layed on buses to take people to Plymouth and I think only about 30 went from the entire uni. The only big protest i remember was when they planned to cut back on cleaning student rooms for those in Uni accommodation. I went along and we protested for about 20 mins until someone realised that
a) all the windows were shut so they couldn’t hear us
b) we were in the wrong place anyway…
53/55 I just cant see that somehow. Just too big a lead though I woudl accept he is leading. I wonder of SC feels it owes him after that 2000 campaign there.
As for the Dems there, Obama should win ok.
Nevada is more interesting, I’m not wholly convinced he’s a shoo in there, despite the Union backing but yet again not much is being priced up other than Betfair. I am estimating that Richardson’s absence is going to do more for Clinton there than Obama. Clinton supporting unions are putting a huge effort in there. The only worry on calling for Clinton is the vagaries of the caucus process itself.
45. Yep the Huckster is still a rival alright and he’s bcome a bigger part of my portfolio. It was only recently that I brought Guiliani into my protfolio at 3’s and the eejit appears to be gearing up late for the race in a pair of flippers.
My money appears to have gone to pot so I am going to let the straight bets run and accept the loss whilst hoping for a revival.
I am most disappointed by my spread bet on him after thinking he was worth holding. Fortunately I didnt close out of McCain before the evidence started to emerge post NH that he had a bit of voodoo on his side in the polls so he stays but Guiliaini has followed Hillary as a close out after I went for a small sell stake on her.
I think I briefly mentioned gold as a possible idea on here way back in September. I’m not a big fan of stocks and commodities stuff as a betting medium since they are just a bit too volatile thanks to the madness of market traders, who a bit like punters on these primaries, seem to go nuts over very little.
What will the Government do with a nationalised Northern Rock? At one extreme, it could be just business as usual with the company being run exactly as it has been (except for the financing stream) retaining the same number of branches, staff etc. At the other, Sanders could act purely as an administrator and organise a swift but orderly run down of the company until it is just a shell to liquidate. The act of nationalisation in itself will do little to solve the basic problems. It is only when the business plan becomes clear and the corrective actions are being implemented that a judgement can be made.
Back to the subject of the thread - if Northern Rock cannot be off loaded quickly two thoughts:
- how many homes will Gordon Brown’s new state bank repossess?
- how many staff will they lay off?
can see the stories now.
66 Yokel
Don’t know if you’ve latched onto it yet, but Dave Nevison’s book ‘A Bloody Good Winner’ is also a bloody good read. DN used to be a trader. He doesn’t go into it much, but there are one or two little gems in there would appeal to you! Nutters is a polite word for some of them.
57 No other way. Nasty denationalisation become sweet privatisation
59. Fred still fascinates, proibably because of the money he’s made me before he even declared. The feeling that he is going to exchange strongly with Huckabee in SC seems to have come about though I resisted the temptation just a few days ago to back him in SC.
Unfortunately for Fred money is reportedly an issue as I think he’s an interesting ‘alternative’ candidate for the Romney & Huckabee voters of both faltered just as McCain had that position a while back before he became the main man
71 Yes I think it could only take one win (but it must be soon!) to ignite Thompson’s campaign much as NH did for McCain
Northern Rock will severely dent Brown’s only asset, his perceived safe hands wih the economy. Once thats gone, what exactly does he have going for him? He’s seen as a control freak, spin obsessed, bottler when it comes to big decisions, and fairly unlikeable when it comes to public speaking. I’m confused as to what he can possibly do to come back if this cripples his economic credibility. If he does try and harp on about black wednesday again, Cameron can easily sidestep it by showing Brown to be living in the past rather than trying to sort out the here and now.
68 - Brown could spin the repossessions as adding to the stock of council housing.
69. Didnt even know he did that book. I think he’s a believer in the idea of the multiple plays in a single horse race, something that I’m a bit reluctant with but would actually suit me well because I’d rather take a small overall win than go for glory profits such is my aversion to loss.
How much did Black Wednesday hurt Labour? Brown was Shadow Chancellor and supported it all the way - including the decision to pull out of the ERM?
As others have said - what you DID matters not what you did or didn’t say.
There is a piece in Jane Griffiths’ Blog which says that the Labour Party in Stockton North has de-selected Frank Cook MP in favour of Alex Cunningham, a PR person. Anyone know anything about it?
http://janestheones.blogspot.com/
50 Billion pound to save a bank worth 300 million pounds.
More than an annual NHS rise, it must hurt the UK Economy.
The question is, do the British people have the ability to prevent a second collapse, for the likes of Barclays or Alliance & Leicester?
Nationalisation may prove something of a negative…letting it go belly up would have been a disaster. Looks like Vince C has played a blinder. But he took a risk. It’s not clear to me that Treasury should have by-passed possibility of private sector sale without even allowing bids. Or could have…would shareholders have been able to sue if the price was forced down before testing the market?
Whatever happened to saviour Branson and his Northern Rock rescue bid? Was he all hat and no cattle?
78. Is it going to cost 50 billion?
75 His approach wouldn’t do for you, or me, or indeed for many people, Yokel. He shoots from the hip, to put it conservatively, and with a machine gun. He piles up the multiples to go for the real big winnings, not to minimise losses.
I think it works for him because he is such a formidable form expert that he can spot value everywhere. His multiples are therefore multiplying the value. Don’t try it at home though.
But do read the book.
http://www.politico.com/news/stories/0108/7880.html
New California Poll
Dems - Clinton 47% Obama 31% Edwars 10%
GOP - McCain 20% Romney 16% Guiliani 14% Huckabee 13% Paul 8% Thompson 6%
Although pretty small sample sizes.
http://www.politico.com/news/stories/0108/7880.html
80. Mark
The problem with Branson’s bid was that it wasnt all it appeared though not necessarily with any more overall negatives than the other bids floating around it wasnt exactly outstanding either on first pass.
The problem was that there was a political push behind his bid because Branson was a friendly front for public consumption. This reached the point where the Virgin led bid was too rapidly seen as preferred and exclusively started to get money out of NR to help it put its bid together. Under pressure Olivant got this exclsuivity taken away as well as getting access to some of the funding sources that previously werent open to it but open to Virgin.
82. Ah right, tells you how much I know….
79,
Actually, I think that for Cable, it’s now a no-loss proposition. If nationalisation does end up making things better, he can say “I told you so” and look extremely wise.
If it makes the disaster worse, he can just point to the months of delay and state that it would have worked if they hadn’t shilly-shallied around and acted decisively according to his advice. It’s difficult to see him coming out of this without his reputation safe. Conversely, it’s hard to see Brown/Darling salvaging much of theirs - if it fails, it’s their fault. If it succeeds, they cop a hit for not doing it far more timely.
68 good point - a State bank means ‘Brown repossesses hard working family’s home’ will be a headline Gordon will have to get used to. The bank will be in competition with NS&I etc etc etc - there is no upside for Labour in this and despite the puffery on here not much upside for the LDs either - company gets in trouble let’s nationalise it is hardly an Orange book solution to a problem.
beyond deposit protection up to £100K the bank should have been left to sink or swim. The mortgage book would have found it’s level and been sold off, retail depositors would have been protected and shareholders/bondholders would have got their fingers burned - which is as it should be.
84 Yokel, thanks for that. I assumed it must have been something like that but hadn’t seen any reports.
Surely Brown and Darling are most exposed when the Governor gives his warts and all expose of what really went on behind the scenes that prevented him from doing the £30 billion line of credit deal with Lloyds. How many billions will that political interference with the “independent” Old Lady prove to have cost? That is going to be laid firmly at the door of those two - and may well dwarf any Black day of the week which has gone before…
And what if the Northern Rock mortgage holders group together and stop paying their mortgages on the not unreasonable grounds that - politically - the Govt. can’t do much about it?
Brown supporting the ERM didn’t stop Labour benefitting from Black Wednesday.
Likewise the Common Wealth Party didn’t benefit in the 1945 from supporting an NHS long before Labour and winning by-elections on that ticket. Labour only fully adopted the policy shortly before the election.
The LibDems were second in the popular vote to Labour in Scotland in 2005 but it was the SNP the voters turned to in 2007 because they were the largest opposition party in the Scottish Parliament.
Vince Cable may have called it right but that’s only the talk of the political village. It has little to no impact with the general public who will look at this as a massive Labour failure and seek the best alternative to remove them.
That would be the Conservatives with the LibDems being seen as unable to beat Labour.
nrock will be nationalised and cost the tax payer 5-8bn. thats almost 1bn per north east labour mp. pathetic.
I can already see cameron’s tv bulletin line for pmqs if NR is nationalised. something along the lines of:
“blair’s defining moment was the ‘abolishment’ of clause 4, yours has been its re-introduction. your vision is the vision of the 1970s labour party. your no longer the future, but the past. New PM, same old labour”
91 Surely the earliest Northern Rock would be nationalised would be 12:31pm Wednesday?
88. The certainly have been moans about Virgin’s apparently privelaged position from other bidders. Olivant went in later than others and grasped this issue publically espcially over access to potential funding sources and got some response.
I think the government & BoE had little choice but to provude support at the start but increasingly it has become blank cheque material due to political imperatives which is really what the issue is.
The whole nationalisation story has been well timed because of some groups of shareholders looking to protect their corner. The government is waving a big stick which it may have no choice but to use anyway so shareholders may conclude they have little to lose as they’ll lose it anyway.
I do however think the possible impact might be over estimated. Its not nationalisation in itself but the big fat number that could appear under taxpayer liabilities. Robert Peston who is a great help to illiterates like me sets out one dimension of the issue.
http://www.bbc.co.uk/blogs/thereporters/robertpeston/
89.
“Clive the Merry Weatherman”
sounds like Michale Fish, Hurrican ‘no probs’ forecaster and wishful thinker.
89.
“Clive the Merry Weatherman”
Sounds like Michael Fish, Hurricane ‘no probs’ forecaster and wishful thinker. Politics of utter desperation.
ITN say tonight that Brown is dithering over the decision to nationalise and was advised months ago that nationalisation was the best solution.
Also that Darling is frustrated by Brown keeping asking for different solutions to be investigated.
If this becomes the media line Brown will be severely damaged.
Electoral Commission considering calling in the police to look at Hain’s case
http://news.bbc.co.uk/1/hi/uk_politics/7188461.stm
The NR politically appears to be just a minor inconvenience to Brown and he wants it sorted out. The best solution to people like Brown and Cable who don’t understand economics is to spend as much money as possible and expand government operations by nationalising it. The National Debt will grow a tidy UKL 50 billion, but the embarrassment will out of the headlines, which is all Brown cares about, as he wants all media backing him while he slides the EU Constitution through Parliament.
Spare a thought for a moment for what is happening as a result of this.
LIBOR or the interbank rates are rising rapidly, as banks no longer lend cheaply to each other, as fear of bank failures is now real. Financial share prices are plummeting as shareholders see that holding bank shares is now decidedly risky. If money is tight for banks, it won’t be long before it’s tight for everyone else.
There are many other financial organisations like the NR 100% dependent on interbank lending, which is starting to dry up amongst all the uncertainty, created by Brown and Darling allowing the NR to spiral out of control as they have done.
If it does, and there are a whole series of NRs potentially in the pipeline, Gordon Brown will soon need not UKL 50 billion, but UKL 1000 billion to guarantee the debts of the entire British banking system. - which he can raise, of course, but the British government will be the most heavily indebted in the world - and will only pay back its debts after two generations have lived and died.
The aftermath of Gordon Brown will still be being paid for in 2060. This will make the PFI and the unfunded public sector pensions liabilities into chicken feed. Brown’s economic illiteracy, starting with his selling off of Britain’s gold reserves for one third of their current value in 2002, in the coming economic storm, is going to bankrupt Britain.
The Pound is falling day after day on the FOREX markets. Government debt is ballooning. Consumers are tightening. The golden years are now very much the Brown years. He will be politically destroyed in Britain, but will collect his place in the Hall of Fame in Brussels, alongside Saint Tony.
Brown backlash!
http://therightstudent.blogspot.com/2008/01/gordon-brown-banned-from-pubs-in.html
Totally off thread, but the BBC has been reporting that the ship in troubled in the English Channel was off Portland Bill, Dorset whilst ITN / Sky say it is off Start Point, Devon. The Salcombe and Torbay lifeboats attended wich is rather a long way from Portland Bill!! How can the BBC be trusted when they get basic facts wrong?
What a fecking joke Newsnight is these days
LOL! Newsnight trying to ride to Hain’s rescue by coming up with some bizzare allegations relating to David Cameron and three helicopter flights he took in 2005. Desperate stuff from Labour, really, to try and divert attention from Hain.
98 - ‘The best solution to people like Brown and Cable who don’t understand economics is to spend as much money as possible and expand government operations by nationalising it.’
That would be the Vince Cable who was Shell’s former Chief economist?
98 - You may not agree with his solution but i’m sure we would all be interested in your own qualifications which entitle you to describe Vincent Cable as somebody who “doesn’t understand economics”. Doesn’t say much for Shell’s recruitment policies.
If I were Ed Vaizey I’d feel a bit short changed with Newsnight. He only got to answer one question about some dud accusation concerning David Cameron’s helicopter flights. The Hain apologist (an MP apparently though I’ve neither heard of nor seen him before) was allowed to ramble inanely for several minutes.
The spinning clock was the MP for Wrexham.
I dont believe NR will not cost the Treasury much if anything in the long run. It is already effectively nationalised as shareholders will not get any dividends until the BoE is paid off. In order to do this NR will have to shrink its asset base by about £60-70bn. This will take maybe 4 to 5 years. The simple way to do it is to offer high interest rates to all customers as they come off their special starter deals and offer no new starter deals. A few customers will be unable to find new mortgages but the rest will leave. Unless the economy goes into big recession the risks are quite low.
The big issue with NR is that the rest of the banking system is going to have to find the money to fund all the people remortgaging. This will soak the available credit in the market from other borrowers. The Government is caught between the option of letting the credit squeeze work its way through the system causing many years of slow pain or reflating the economy by printing money.
I work in manufacturing (yes some of us still exist). The exchange rate changes have already caused mass chaos with much more to come. In our sector many large multinationals are desperately trying to increase their UK supplier base to hedge against a drop in the £. The trouble is that the UK manufacturing base has shrunk so fast that the few of us left are looking like headless chickens as we try and respond to a myriad of demands.
The reality is that NR is red herring. If GB cant reorientate the economy and get it working on making stuff rather than buying stuff quick, you can kiss goodbye to your Spanish holidays and new Audis for a long time.
100 It’s in trouble in Lyme Bay, BBC would assume no-one would know where Start Point is so would use the known name from the bay, Portland - the Portland Helicopter was probably called out so some excuse. Then if it’s east of Start Point it would be south or south south west of Portland - so both could be true, ITV & BBC.
But perhaps like Newsnight they rely on Labour Research department for their “facts” ….
The cost to the government, of nationalising NR probably won’t be in terms of financial, but political. Effectively, it’ll be the signal that it sends, that will do Labour tremednous harm. It will cemente, possibly forever, that here is a government not in control of events and adrift. Brown’s own personal economic credibility will be severely damaged. It will cement the view that most people have had since Brown bottled the election. If in due course, it comes to light that Brown is dithering over this decision, the damage will be even worse.
Off topic, and apologies if its already been covered but just noticed the following article at the Times Online
“Tories admit to more party funding blunders”
http://tinyurl.com/34qdz3
How the beeb can pretend to be unbiased after Newsnight tonight is beyond me
Why else would they get the office trainee to compare 2 different registers of what MP’s do.
Look at Cameron. Anything on list one not on list 2 must be a scandel, at least on par with Hain
What are they on? Do they take editorial guidance direct from brown’s bunker? It ceratinly looks that way
110 Obvious really that if party offices are the issue it will apply to all of the shadow cabinet offices. Surely though its only a blunder if the decision comes down on side of dual reporting?
Hop Sen last night queried how this fitted with Short Money - assume from reading the rules on use of Short Money that it is only to support the Opposition in Parliamentary affairs, assume for party political activities party funds should be used?
As has been pointed out politics is not fair. Just as Labour will be damaged by NR (although not irreperably because it doesn’t affect people in their everyday lives), the tories will be damaged by these funding ’scandals’. They will reinforce the perception that all politicians are as bad as each other, tempering the damage that Labour has suffered from the Abrahams and Hain sagas.
Funding issues seem to damage individuals not parties, I think it’s the attackability of a name. As such, Hain is in a real mess because he has become the story.
Personally I hope that he sticks it out only to fall foul of the law later, cash for honours built up and hasn’t yet been lanced so the greater the boil the bigger the mess when it finally bursts.
113 There’s too much of the Football Manager (thinking of Arsene & Co) in today’s political leadership “I didn’t see that/wasn’t watching” when someone on your side fouls but lots of fuss and noise when someone on the other side clips, without intent, one of your players. If the other side actually commits a foul…golly what a racket.
Still its fun for us supporters to join in from the stands
103 and 104 - The clue is in the mention of “Brussels”. Unfortunately Tapestry’s politics are adrift in a storm, togetner with all the other UKIPpies - whether anyone may rescue them like the poor sailors were last night off the Devon coast?
115: fair comment, Ted. Also the ‘rogue poll assessment’ that Mike’s described (polls are rogue if they show your side doing badly) extends to media coverage. Media coverage is always bad for someone (that’s the British media) - if it’s bad for our side then it’s disgraceful bias, if it’s bad for the others it shows how they’re doomed.
I missed Newsnight (sounds as if I shouldn’t have!) but in my turn thought Channel 4’s news was pretty unprofessional (which I suppose is subconscious code for “I didn’t like what they said”) - really soft interview with Cable on the lines of “what can you tell us, great expert person?”, and a casual comment to the effect that “The Treasury wouldn’t have come a million miles from us tonight” rather than letting a refusal to comment carry whatever weight viewers might have wanted to give it, without editorial comment.
108. Graphic on BBC 24 showed ship due south of Portland Bill, highlighting the county of Dorset. Ship actually some 60 miles away off the Devon coast. I now realise factual accuracy is no longer necessary in their news programmes.
so Newsnight now on about Cameron’s funding again…
I know the Tories have done nothing illegal, but can’t we have transparency? Who the feck funds the Midlands Industrial Council?
And as for the LDs - does the Joseph Rowntree Trust receive donations, or is it fully endowed by the dead chocolate tycoon?
Latest US polls show further McCain progress and also a lead over Clinton (but not yet over Obama). Clinton, Obama and surprisingly Edwards neck and neck in Nevada.
119 I thought all the names were in the public domain. Some kerfuffle a few weeks back when a David Grove (didn’t he buy Albion Press Metals and other West Midlands engineering companies several years back) was identified as a financial donor but I believe he was a new member. If I am wrong I am sure I will soon be put right,but I do try and separate accurate facts from opinion.
117 I’d like our leaders to be less “blind” - leave it to us spectators to be over partisan that’s what drives living politics - but perhaps its too late. What was rugby ( openly rough but accepting of the refs decision) has become football (staged falls, blatant cheating to gain advantage, arguing with refs). But perhaps it was ever thus - politics in the past wasn’t really any cleaner, hypocrisy any less it’s just the media didn’t report it.
Looking at the US blogs it’s sad that, for example, whereas during and after Iowa we had a glimpse of a post-racial US, now race is an issue, to a great extent because of “friends” of Hilary and in the responses of “friends” of Obama. That fragile advance being trampled as both sides fight it out. The Clintons will lose the reputation Bill got as an honorary member of the black community. This and the next generation of African Americans will associate Clinton as that white woman who used race against the black candidate. Many white Americans won’t see the candidate of hope & change but the black man. Depressing.
121 - perhaps the names are in the public domain. I had just got - possibly incorrectly - the impression that they were not. If they are generally accessible - then fine, it’s transparent - and I am happy to admit I am wrong.
A couple of further thoughts on the US scene after looking at Betfair:
1. The Republicans are *very* generously priced at 2.74 as “winning party”, given that not only McCain but even Huckabee is close in the possible matchups, despite all the focus having been on the Democrats. I would have thought a sharp correction will kick in once a GOP candidate becomes clear.
2. Despite my personal preference for Hillary, the polls seem to me at best even for her and possibly leaning slightly to Obama in the immediate primaries in NV and SC (leaving aside the pseudo-primary in Michigan). So as Obama is currently odds against, he could well shift in the coming week.
123: SBS - the MIC donors were hidden for a long time, but are now known as (I think) a result of PPERA compliance.
119/121 The membership of the Council was made public but agree with SBS, lets be transparent.
Final word before I (as PtP) says go to see uncle. The Guardian leader tomorrow is damning but fair in its summary (maybe my partisanship).
Hain should go, Gordon should decide for him if he doesn’t (that’s his job as PM, to make the hard, difficult, choices). Conservatives should have volunteered donation info to Commons.
Summation of Guardian view
“Conservatives “Awash with corporate cash, and donors whose tax status is unclear, the opposition is in a poor position to preach. But Labour MPs hoping that the shadow chancellor’s red face will excuse Mr Hain’s sins overlook the differences between the two cases.”
“In the former the Conservative party declared the donation to the Electoral Commission on time and its chief whip went on to ask the parliamentary authorities about what was required of MPs. In the latter Mr Hain did not declare the money for months, was harried into doing so, is still unclear about what happened, and anyway seems to think that there is nothing wrong about breaking the rules.”
“On the facts as they stand, he cannot not outlast its (Electoral Commission) verdict. Mr Brown is a moral man and he surely cannot really think otherwise.”
http://www.guardian.co.uk/commentisfree/story/0,,2240825,00.html
120 - what polls are these figures from?
122 - the longer this goes on, the more I can’t see the Dems fully uniting behind one or other of the main contenders. It probably runs deeper than even the race thing - more generational politics. Obama’s run on a more moderate tone while Hillary’s win in NH was politics as we’ve gotten used to. Power shifts are always painful for parties, especially when you’ve got somebody like Clinton involved.
127 Agree on the generational thing - hearing many African-American (do dislike that term, I’m a white African and proud of it) politicians of the Civil Rights generation they also find it hard to accept Obama. I’ve seen references to him as “a half-white” from people of no different skin tone. As a baby-boomer myselfd I can see its hard to accept it’s time to move over but lets leave the 20th century conflicts behind us.
I questioned on 67 (almost 2 hours before Newsnight)what the government would do with a nationalised Northern Rock. Answer has there been none. Indeed Paxman seemed incredulous that it was a sensible question when the Conservative spokesman also raised it. Just shows to me that the BBC is careless with not only its facts (see 100 and 118) but also its analyses of major issues.
The Big Picture: Tories move back into the Hung Parliament Zone….
http://www.titanictown.plus.com/bigpic.jpg
Left-hand scale: Tory and Lab Seats (blue/red lines)
Right-hand scale: LD seats (yellow columns)
Methodology. 6-poll rolling averages since May 2005; central probabilistic forecasts; average LD incumbency; SNP up 15%; no regional swings.
…..The Tories crested to a forecast 15-seat majority in the second week of December 2007 with 330 seats, but since then the rolling poll average shows them down about 20 seats, Labour up roughly the same, LibDems up a couple of seats in the high 30’s……
This brief 1-week period was the only occasion in the past 15 years the rolling average forecast a narrow Tory majority, and it didn’t last long….
130. FWIW the “average” forecast since the last election is:
Con 254
Lab 310
LD 48
Nats 17 (based on +15% poll assumption)
Oth 3
NI 13 (SF abstain)
One might roughly equate this statistic with football-match “possession” statistics…. Food for thought?
131. Another stat to chunder over…
Since 2005…
62% of the time a Hung Parliament has been forecast…
36% of the time a Labour majority….
2% of the time a Tory majority…….
132. Another interesting stat…
72.6% of the time Labour was forecast to be ahead of the Tories in seats….
My Conclusion? Tory supporters are a tad over-optimistic…
btw, included in the 62% HP is the 16% of the total time the LibDems were forecast as Kingmakers… a longshot, admittedly…
Rod - You should take your polling data from December 6th 2005 when the Tories got their new leader. To use the May-December 2005 polls simply distorts the picture and you know it. All parties that have just lost elections see collapses in their polling numbers.
77. Frank Cook was deselected for a number of factors including his age and absences from the constituency visiting his oriental partner. He has been replaced by Alex Cunningham, Cook’s long-time local nemesis who has tried to deselect him on a number of occasions.
Among those that ran in the deselection included Oprah singer Susannah Clarke, Unison President and NEC member Norma Stephenson and former minister and Brownite minister Barbara Roche. Cunningham’s website can be found here http://www.stockton-north.com.
135. That should read ‘Brownite loyalist’ not ‘Brownite Minister’.
135. What’s an “Oprah singer”?
137. What you get when you right posts early morning! Opera.
134. Mike, it’s a six-poll rolling average going right back to May 2005. It therefore includes the period in which Cammo became leader, and I can’t see how such a small rolling average can “distort” anything. It’s rolling seat forecast based on rolling polls…
Perhaps it’s my fault and I should have put an x-axis scale on it… Does this make it clearer? http://www.titanictown.plus.com/bigpic.jpg
The Gov. has not been able to sell NR as a going concern, not without sweeteners. So nationalisation can only be a prelude to selling off the assets and attempting to pay of secured creditors. Surely a professional Administrator would do a better job of realising best value than Civil Servants under political management? But, here I smell a rat, is the Tax-Payer’s loan secured or do we rank with the unsecured, and as a consequence the Gov. is nationalising only in order to cover up their failings? Darling has never come clean and stated what if anything do we have from NR to secure our loans, he seems to be purposefully vague.