Is today’s move going to help or hinder Labour?
October 13th, 2008
Now the battle moves on to who will get the blame?
On what the BBC business editor, Robert Peston, is calling “Momentous Monday” the FTSE 100 has moved up more than 100 points as the City digests the news that RBS is now 60% owned by the government with a 40% share being held in the newly merging Lloyds and HBOS.
As part of the deal the chief executives and chairmen of both RBS and HBOS are resigning and Peston has described it as “an abosolute humiliation” for the Scottish-based Banks.
Meanwhile the Tories have moved on from their silent supportive phase and shadow chancellor, George Osborne, has accused Brown of presiding over “the biggest economic disaster of our lifetime”. Writing in the Evening Standard, he said it was a mistake to present the government’s bail-out package as a “triumph” - rather it was a “a necessary but desperate last ditch attempt to prevent catastrophe”.
The blame game is going to dominate the politics of the next few months and could determine whether Brown’s Labour has any chance at all of stopping a Tory majority government at the next election.
What’s going to be picked over in detail are the banking regulation changes that Brown introduced shortly after Labour came to power in 1997 and whether they were partly responsible.
This is not going to be a view that’s universally shared on PB but in terms of the rhetoric he is able to develop and his ability to frame the debate I would rate Osborne way ahead of Brown every day of the week.
Mike Smithson
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The media (BBC-Mail) narrative is “Brown in charge” - will need events and opinion polls to put in reverse.
I think the danger is that once the crisis abates there is no need for the crisis manager.
Sorry to repost from the last thread, but it’s relevant to this one. Of course it’s not going to help Labour, all the Tories have to do is keep reminding us of what Brown said only 18 months ago
Some snippets
After 10 years of sustained growth, Britain’s growth will continue into its 59th quarter—the forecast end of the cycle—and then into its 60th, 61st and 62nd quarter and beyond
Here in Britain, inflation on the same index has never gone beyond 3 per cent. While on that index it was 4.7 per cent. in the United States, it has fallen from 3 to 2.8 per cent. in Britain, and will fall further this year to 2 per cent.
Our forecast, which is also the consensus of independent forecasters, agrees that looking ahead to 2008 and 2009 inflation will also be on target. Since 1997, inflation has averaged 1.5 per cent.; it is half that of the previous decade. After examining the historical records, it is Britain’s best inflation performance for a century. By holding firm to our commitment to maintain discipline in public sector pay, we will not only secure our 2 per cent. inflation target but create the conditions for maintaining the low interest and mortgage rates that since 1997 have been half the 11 per cent. average of the previous 20 years. We will not return to the old boom and bust.
Under this Government, with stability in this as in every Budget the foundation of all we do, we have sustained growth year on year.
Debt is actually 44 per cent. of national income in America, 50 per cent. in the euro area and 92 per cent. in Japan, but in Britain, we expect debt from 2007-08 to 2012 to be 38 per cent., 38.5 per cent., 38.8 per cent., 38.8 per cent. and 38.6 per cent. in successive years
I could go on, these were all taken from the first 5 minutes worth. There’s so much more. If you want a hollow laugh, it’s all here
The crisis will soon give way to the recession. Then we’ll see how well Brown is percieved.
I repeat what I said at the end of the last thread:
“I certainly expect the polls to be neck and neck shortly if the crisis continues, GB looks statesmanlike and decisive (I’m still coming to terms with this…), the media continue to give him a fair wind (it’s sickening to see him go from being portrayed as Mr Bean to Churchill in a few short weeks), and the Tories continue to be either invisible, irrelevant or naive - or all three.
As a Tory supporter, albeit one beginning to have doubts, this is turning into a bad dream.”
That’s not me being “the most pessimistic Tory supporter” as claimed in the last thread, I’m just reflecting how the media narrative has shifted. They’ve got bored of bashing Brown, now they sense that he can (amazingly) emerge from this smelling of roses. The “no time for a novice” comment seems to have been particularly well-timed too.
re 5 Bob as the Indy mentions today what happened to Churchill in 1945? The voters remembered which party had gone them into the mess in the first place whatever the resolve of the person who got them out of it.
‘an absolute humiliation for the Scottish based banks’..
Er, when they were exclusively Scottish based, operating within Scottish borders to canny Scottish customers, thinks trundled along just ‘fine and dandy’..
It was only when they got involved with the celebrity w@nkfe$t of ‘personality banking’ in the City of London [clue - it is in ENGLAND..] that the wheels fell off the wagon..
As the recession bites and unemployment etc rise why would the people suddenly think they need Brown? So far the media narrative has been unswervingly in his favour, but as that changes (Osbourne’s article is a good start) and people are reminded that the reason the government is potless and can’t help is because Brown spent all the cash, they’ll turn on him big time.
5. “No time for a novice” will come back and haunt him when
a) Obama wins
b) Brown meets Obama for first time (if that ever happens while he’s PM)
Mike is clearly learning. Yet another thread title to which no one can answer ‘No’
Personally i think the answer is very clearly ‘hinder’.
Fantastic cartoon by the way.
5. Personally I wouldn’t mind a spring 2009 election because I’m highly confident that even if Labour had a lead going into the election that lead would quickly be eroded during the campaign as Brown and Cameron are put on center show every day.
At last Osborne breaks cover.
He is of course correct that the FSA and Brown must take massive responsibility for this.
It’s like Brown has trashed our house, and turned up the next morning with a bin bag and a hoover he’s bought with our money, and wants credit for helping to clear up the mess.
Cheers…
8. Very possibly by the end of the week.
I just heard Robert Skidelsky on the radio pronouncing that it’s the end of the conservative era that started in the 70’s and we are back to Keynes now. It is very easy for anyone on the left to accept this but the problem for Osborne is that he is - a conservative. Once he admits that Thatcher was wrong about economics then I’ll accept that he’s a reformed man, but I don’t think we’ll hear that somehow.
2. It is a bit early to talk about the crisis “abating” - although the initial reaction to the measures seems to be OK, they can only be said to have worked once the banks start lending to businesses and households again. I think international action will be needed and in this respect we need to hold our breath for another week or so at least.
the narrative is necessarily like this at the moment because the alternative is disunity , chaos and disaster in the markets. the media has to talk the plan up and the country appear united and have to show the PM being decisive, to avoid a public panic. But once the bail out has seemed to have averted total meltdown (but people then realise we’ve been saddled with huge public debt for years), the recriminations will start with a vengence and Gordon and Chums will be wiped out.
7- Those evil Englishmen in London, forcing you clever Scots to be reckless with your money!
5 Didn’t say the most, just one of the most
I can see possibility of neck and neck but don’t agree its a certainty and point is that this crisis will not continue unless the plan fails. A crisis is a short term thing, its benefited Brown as he’s been able to dominate and set the agenda but when its just boring, bad news the press attention will switch. Glenrothes is important to that - the media love in will lead to expectation of a Labour hold, an SNP one will make them doubt that Brown2.0 is any more a winner than he was before.
It seems that there is always a new thread after I comment. Just in response to MTF and PTP on the last thread; I don’t want a Stalinist solution to the crisis, but we must save the banks not the bankers. If Cameron means what he says about ‘responsibility’ will he want failed bankers to pay the price?
Or does Cameron want one set of rules for the poor and another for the wealthy?
14. Few people ‘on the left’ have ever understood much about Keynes.
3: Some good ones!
I still think the obituary for New Labour will have to quote Brown’s first budget speech in 1997
“I will not let house prices get out of control”
As I believe the kids say:
EPIC FAIL
Latest Diageo/Hotline tracker :
McCain 42% .. Obama 48%
Note - Yesterday - M-43/O-49
http://www.nationaljournal.com/hotline/dailytracker/
5 - if all this continued as it was for another couple of weeks then it might have an effect.
For that to happen, the following must remain :
1: Brown’s idea doesn’t backfire
2: Tories remain quieter than trappist monks
3: Media narrative remains favourable
4: Public don’t become sick/weary of blatant (and subtle) ramping of Brown
5: “Events”
Of these, only 1 and 5 have yet to come to fruition. Today’s ES has answered 2, and we’ll see more of that to come. Starting to think that 3 is starting to ease off a bit now, if Kavanagh in the Sun today is anything to go by
Then there’s 4.
18. It seems that there is always a new thread after I comment.
Frank - I think we have all had this feeling but i doubt if the polls would back you!!
On your other point GB/Lab govt are responsible for the regulatory framework since 1997. they are the ones who need to be held to account for this situation.
22.
http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article4926538.ece
Mistakes are often made by oppositions nervous that the government is dominating a big story. The only way the Conservatives can barge in is by saying something stupid.
A senior Tory says, “We are making no attempt to grab the front page of the newspapers.” The voters, he hopes, will remember Cameron’s judgment and character when it is all over.
14
The idea that this disaster has anything to do with either Thatcherism or Conservative economics is laughable. Or it would be if the situation were not so serious.
This nwhole disaster in the UK has come about as a result of LABOUR and BROWN and their complete inability to understand the first thing about either economics or the city. They have taken ideological decisions which have had a catastrophic effect on everything from pensions to city regulation to the vast budget deficit and have then stood around looking bewildered when their ideological initiatives failed to make the world turn in the other direction.
They are morons and have no one to blame but themselves - and people like you who continue to claim this somehow has something to do with a person who fell from power almost 2 decades ago.
What is Brown getting such praise for? The government have done okay, they’ve not panicked and rushed in, but that’s about it. The US had to have a big domestic debate, Europe is hampered by a single currency, but luckily in Britain everyone has tried to be united. I’m no economist, but that’s how it looks to me.
Thatcher was transformed by the Falklands, but she was relatively new at the time and the ‘green shoots of recovery’ were starting to show. Neither is true of Brown. Labour seat spread looks high at the moment.
Crosstabs for the Battleground tracker :
http://www.tarrance.com/files/Public-tables-10.9.pdf
Even the Council of Mortgage Lenders thinks Gordo’s plan to restart the pyramid scheme is too risky !
The CML doubts whether, in the current market where house prices have been falling and demand has reduced, it would be either prudent or desirable for the volume of lending to home-owners to equate to 2007 levels.
http://www.cml.org.uk/cml/media/press/1928
14. The crisis isnt over until interbank reopens. Assuming it does - If you think that banks are going to lend to individuals and businesses anytime soon, fuggedaboutit. The first thing banks will do when they get new capital is to call in loans from anyone with some cash and looking shaky. They can see the recession coming and they are going to rush for the exit, government money or no government money. Look forward to some really ugly stories about the “evil” banks. Brown and Darling will mouth platitudes and demand action, but there is little that can be done.
17. Perhaps it is instructive to compare the economic position and Labour’s Polling figures when they could not stop Willie Rennie winning in Fife to now. Even if they do close to level pegging why are they more likely to hold in Fife again now.
21 Hotline poll: McCain was 41 yesterday, not 43, thus this is a net gain of 2 points for McCain.
Love the way that the Tories are so bitter that Brown is actually getting some good press.
To answer the original question, isn’t it too early to tell how this is going to play in the long run?
My guess is, if ‘Flash’ Gordon ’saves everyyyy…one one of us’ (as per the Queen song) then he will certainly reap some political benefit, regardless of whether he gets the blame from other quarters. The big stick that Labour will use against Cameron is that whenever there has been a crisis (i.e. the floods, economic meltdown) he’s ‘disappeared’ - and that has may hurt him in the long run too.
The cartoon sums up the public mood so far as I have encountered it far better than most newspaper articles. The primary emotion I have met has been complete disgust for the sums being offered to bankers. Even normally calm friends have got very agitated about this. The best reaction that Gordon Brown is getting among them was “there wasn’t much else that he could do”. The worst is not fit for publication on a family blogsite.
28. It’s quite simply a fantasy to believe lending could be restored to that level. The government is again showing itself to be either mendacious, clueless, or both.
19. ooh, what a devastating remark, I am impressed. I guess we’ll hear his name coming up a lot in political debates over the next few weeks and it will interesting to judge whether Osborne or Darling, for example, know their Keynes better.
23rd January 2008. Almost 9 months ago. The last time Brown had a lead over the Conservatives. And yet Roger et al are wetting themselves becuase Gordon hasn’t been publicly flogged (yet) this month for messing something up. Wehn you have a lead in the polls, come back and ramp it up then, not when you are still double digits behind.
I am surprised (but not too much) that the press haven’t made more of (1) the deal Gordon brokered between Lloyds TSB and HBoS going pearshaped and (2) the offer to save the world made over the weekend only being taken up by the very weakest banks who have no choice but to grab all they can, whatever the cost. After saving the weakest of all (Northern Rock) with taxpayers money, we are now rescuing the next weakest (RBS, Bank Of Scotland) at the taxpayers expense. Meanwhile well run banks such as Barclays and HSBC just snub the offer, they know it is a bad offer and will not play ball.
How long before Brown forces his will on them as well. Everything Gordon Brown has ever done backfires on him; he is wasting more and more of our money and it needs to stop now.
20. An end to boom and bust.
As the kids say
“muppet!”
20.
This is quite appropriate:
http://icanhascheezburger.files.wordpress.com/2007/11/funny-pictures-bird-cat-cage.jpg
Glenrothes by-election - best prices
Bookmakers:
SNP 1/3 (Ladbrokes, Paddy Power and Sporting Bet)
Lab 10/3 (Coral)
Con 100/1 (Coral, Ladbrokes and Sporting Bet)
LD 100/1 (Coral and Ladbrokes)
Betfair:
SNP 1.33
Lab 3.5
Any other party 50
Corals held firm this morning with their bold 100/30 on Labour, and it was Sporting Bet who were forced to give way, shortening their SNP price to 1/3 from 2/5. Interesting arb!
Drudge has had today’s Rasmussen numbers up since early this morning - 50-45, a net gain of 1 point for McCain. We’ll soon see.
If the Dow can climb back towards 9500, McCain will climb too.
Hope springs eternal!
29 Ken - ‘Look forward to some really ugly stories about the “evil” banks.’
Quite so. And when the government owns those banks, who is going to get the blame?
So should we be expecting a “blind” Gordon Brown to be soon opting for a reluctant retirement?
http://www.telegraph.co.uk/news/newstopics/politics/labour/3178318/Gordon-Browns-eyesight-is-causing-concern-among-aides.html
“result of Labour and Brown”… “Brown has trashed the house”… “failure of regulation” … yawn.
As far as I’m aware, there is no shred of consensus, even with the benefit of hindsight, as to what Brown did or did not do to banking crisis. Unless someone can point to some particular decisions that Brown made, he may well survive this crisis with his reputation strengthened. (Sorry to challenge so many deeply held world views…)
People on the street know that banks around the world failing, and not unreasonably conclude that this is an international problem, and not one caused by a specifically British failure.
Blaming Thatcherism for the current economic woes is like blaming the owner of a car for the chaos caused when his vehicle is stolen by a ten year old joyrider with no idea of how to drive safely.
43. spinning like a top there
42. We had a whole blog thread devoted to that yesterday.
40. Those Ras numbers now confirmed
7 It’s a long time since they were exclusively Scottish-based. B o S have long had a reputation as the mortgage lender you go to when you can’t get credit from anyone else. One of my clients was leant 10 times his earnings by them. Halifax would have been doing fine had they never bought them.
14. Why should Osborne admit something that isn’t true. What sort of standard of living do you think we’d have now if economic policy had remained unchanged since the Seventies?
Latest Rasmussen tracker :
McCain 45% .. Obama 50%
Note - Yesterday - M-45/O-51
http://www.rasmussenreports.com/public_content/politics/election_20082/2008_presidential_election/daily_presidential_tracking_poll
34. Or just desperate to try and get the ‘feelgood’ factor back as near as damnit. And at any expense, so little change there. Without it, they’re sunk and they know it.
43
Yes of course.
It was the Americans who made Northern Rock do 125% LTV “together” mortgages
It was the Americans who made B&B get into Buy-to-let so deep
It was the Americans who forced our banks to lend 6x salary
It was the americans who said it was OK for them to ask for no deposit
It was the Americans who split off the FSA from the BoE
It was the Americans who ran a budget deificit in the UK year after year
It was the Americans who made Britons run up more credit card debt than the rest of Europe put together
It was the Americans in charge of our economy for 11 years
Really, to say Brown escapes blame rather begs the question what HAS he been doing for 11 years? Blair had no clue about economics and didn’t get involved much, Brown was in charge. This has happened on his watch, the UK situation is down to him.
It’s risible to hide behind “global factors”. Yes it’s global, but that doesn’t mean it’s nobody’s fault.
43 - Start with Browns raid on the pension funds in 1997? and work your way back from there.
Unions tell Brown they wont tolerate repossessions from nationalised banks:
Here’s Unite joint general secretary Derek Simpson a few moments ago:
“The measures announced today must be bound to undertakings by the banks of no job losses, no repossessions and an end to the bonus culture.”
http://blogs.telegraph.co.uk/christopher_hope/blog/2008/10/13/unions_tell_brown_state_owned_banks_must_not_repossess_homes_if_mortgages_are_in_arrears
I wonder if Obama’s lead is a bit more fragile than people think.
As I see it, assuming Obama wins Iowa and New Mexico, Obama basically needs to win one of 6 States where he is currently leading in the polls - Ohio, Florida, Colorado, Nevada, North Carolina and Virginia (Nevada only would give him a tie).
Per RCP, his lead in all of these 6 States is 4% or less, except Virginia where he leads by 6.3%. I would have thought a small swing back to McCain + Polling error + Shy McCain supporters could easily overturn leads up to 4%. That would just leave Virginia where a slightly bigger swing would be needed.
46- I guess I’ll have to revisit the weekend commentary from the blog that never sleeps.
51
Exactly. It was that act more than any other that destroyed many people’s faiths in the pension system and resuoted in them turning to property as a safer basis for a retirement fund. A significant portion of the Buy to Let market has been driven by this very fact.
Add to thaat the complete hash that Brown made of his first big decision - to give independence to the BoE without properly setting out the framework for regulation between the Treasury, FSA and BoE and you have all the makings of the disaster we see today.
52. What! They’d go bankrupt within weeks if that went ahead.
52. As I said, it’s fantasy land. Labour’s problems are only just beginning. Soon they will be assailed from all sides with absurd demands for soft loans, subsidies, write-offs and protection, just like in the 1970s. It’s going to be fun, fun, fun.
52 - The wheels are falling off already - the Bruvvers are angry!
52 Such demands are a problem for a government-owned bank, but, if they were accepted, they’d rapidly drive it into bankruptcy.
58 - and you can imagine the Sun/Mail ignoring that I don’t think
As to whether the bank deal helps or hinders Labour the answer has to be “wait and see”. Whatever happens I cannot see any advantage for Labour in ditching Brown. If the deal succeeds it could indeed turn their fortunes around (to at least bring them towards hung parliament territory which is probably the best they can hope for) and Brown will become their greatest asset as a genuine world player. Why in those circumstances swap him for a lesser figure (ie all the cabinet alternatives bar Mandelson who is too creepy for the general public to accept despite his abilities) just ahead of a general election? If the deal fails then Labour is done for anyway regardless of who’s at the top.
52 - I’d say that’s actually good news for Gordon Brown. It gives him a clear opportunity to set a demarcation line to his left.
Mike - congrats on the cartoons by Marf, most entertaining.
NOW I understand the Brown comment
“let me thank for their hard work and, on occasion, forthright advice the civil servants — should I say the comrades? — with whom I have worked on Budgets present and past.”
21 March 2007 - 11th Budget speech.
62 - didn’t Labour recently require financial help from the unions?
This could be a case of being careful what you wish for, because you might just get it
I think Derek Simpson and his chums need to wake up and smell the coffee.
It’s 2008 and they’re just an annoying, irrelevant bunch of numpties - he needs to realise this.
52. I can see a better chance of an end to the bonus culture (not) than of the other two. Given that HSBC and others have refused the government shilling, any attempt by the other banks to prop up the economy, people’s houses is going to lead to large losses. They wont do it. Nor will the goverment force them to, not unless they want to end up with valueless shares and a stuffed economy.
Reply to 328 in last thread.
Gwynfa…We are also paying for the folly, where do you get the idea that only people in England are paying, its my tax money going down the drain as well and its due to all MP’s ,of which 90% are English, you seem to believe that all UK’s problems are caused by Scottish people, get a life. If Scotland had been on its own it would not have had to follow the direction of London government, financial regulation , B of E, etc. The whole crux of the matter is that it is a UK issue caused by a UK ( London ) government, who knows what structure would have been in place had Scotland been independent only guarantee is that it could not have been any worse.
Is Brown clinically insane?
http://news.bbc.co.uk/1/hi/uk_politics/7667284.stm
What a load of drivel. I thought we’d heard the last of the phrase “pent-up demand” about 6 months ago as the last of the housing bulls finally realised it was utter rubbish.
Under what possible circumstances can we return to a situation where there will be house price rises? People would need to borrow 5-6x salary again, which will not happen.
Does he just not understand economics at all? I mean, even the real basics?!
62. It’s a disaster for Brown. His bounce in the polls is mainly because the left wing waverers have returned. These kinds of demands are insane and utterly impossible, but the left thinks these are reasonable now that the govt has put money in. They are going to be livid when he doesnt deliver anything of the sort.
67. Exactly - but if they don’t do something like that, many people will ask ‘what was the point of the government’s action and all that taxpayers’ money?’
This is why Osborne was clever in recent interviews to say that the real test of the bailout was whether it would save the economy, not the banks. He knew full well it couldn’t be expected to.
Runnymede PLEASE - your commwent at 45 “43 Spinning like a top” is quite the most brainless reponse as ever. Why bother typing it.
Somebody has taken the time to type a considered entry that just happens to be not yours and they get the most brain dead response. At least 43 had something to say rather than just your “4 legs good two legs bad” chant
57 agreed.
everyone will now be out with the begging bowl (with good reason if you think about it)
also there will be tales of woe about “Gordon Brown’s bank is repossessing me, he was supposed to be helping us”.
69. It won’t happen. The market is still tanking, no-one I know wants to buy until it’s dropped even more than now.
Are things unravelling - LLoydsTSB shares dropped below 150p down about 20% on the day.
52
No repossessions means - by definition - no secured lending. So no mortgages.
What utter morons.
69. Well what did you think he’d say “House prices are stuffed. We’re alll dooommmed”. (In a suitably Scottish accent). It’s a bit unfair to blame him for saying something positive, even it is twaddle.
errrr the Bruvvers weren’t calling for no reposessions when NR was nationalised. It strikes me this is spin of the Campbell design, so Gordo can look good.
52. Yes, I used to be a member of Unifi, which merged with Amicus, then Unite IIRC(Not sure- haven’t been a member for 2 years and as I have been out of work i am a lapsed member: yo can be 6 months in areas or something like that!). To some extent the unions have a hold over Labour with reference to this nationalisation - my view is it is a political fix as well as an economic one.
Indeed, Brown may well have forced all other european leaders into this through the “Beggar thy Neighbour” mentality that the Irish set off with the guarentee on all deposits. This Financial mess has been one mistake after another.
The present British economic problems did not start in the US, they started here in the UK with Brown’s failure to regulate the corporate strategies of the Financial sector. Northern Rock was the first bank run to be precipatated into crisis in this country due to the incomptent corporate plans that Brown’s Financial Legislation enabled. Brown has placed this country for a hard landing and he failed to mitigate the crisis over the last year.
Brown should be shot for what’s happened to this country under his watch, Brown has facilitated failure.
53 There are clearly a number of scenarios whereby McCain COULD win. In the current economic climate it is certainly possile that something further could happen that would have a dramatic impact.
But it is not likely.
Your list of factors (polling error/shy McCainites etc) would have to go McCain’s way in ALL the of battleground states for him to win.
That is possible but unlikely.
78. Really? What’s he going to do to look good - say ‘I am standing up to the unions and defending the rights of banks to foreclose’? I really can’t see that.
55 - It forced the pension funds themselves to seek additional riskier investments to make up the shortfalls. It also reduced their ability to invest in UK companies, which is why so many ended up in the hands of foreign investors.
A few questions:
1) What price are the Government paying for its Ordinary Shares in RBS and Lloyds? Is it today’s market price? If so, price at what time?
2) It’s been announced all bonuses paid by RBS and Lloyds must be in shares, not cash. Is there a time limit on how long these shares must be held? If so, what is it? If not, the requirement appears meaningless, other than that it will dilute shareholders.
3) What are the implications for retention / recruitment of top staff by RBS and Lloyds? Will all decent people just leave?
70 Ken - right. Short term gain for GB, that will dissipate once the pain starts hitting (and the response to that pain from the Unions).
Pent up housing demand (see upthread) - Of course this exists. All the current crisis has done is put it into abeyance briefly. The stuctural pressures remain the same - shortage of land in the popular places, desire of middle classes to trade up to more space than their parents were happy with, unwillingness of young couples to live with their parents. The release of BTL’s back onto the market may meet some of this demand but only in the short term.
Happy 83rd birthday Baroness Thatcher. A lovely little co-incidence in the midst of all this ’stuff’ going on!
Can someone please explain what the hell the management of Lloyds TSB have done to their bank? Was the idea that they were very well run in the years leading up to this crisis a total myth?
This is not going to be a view that’s universally shared on PB but in terms of the rhetoric he is able to develop and his ability to frame the debate I would rate Osborne way ahead of Brown every day of the week.
I reckon some in Labour - particulary in the general membership/commentariat - grossly underestimate Osborne’s potential. He may have a bit to learn on the media interview front (unless it’s all fake rubbishness), but Cameron didn’t put him in charge of last year’s non-election campaign because he’s good with the crayons.
86 The Irony is delish
84 - “3) What are the implications for retention / recruitment of top staff by RBS and Lloyds? Will all decent people just leave?”
According to a family member who works reasonably high up in RBS, a lot of people will be happy to take voluntary redundancy anyway.
Tbe day-to-day running will probably remain unchanged
86 - first time the name of Thatcher has come up without the words “It’s the fault of”
Was it correct that Brown said that the Banks are to pay NO dividends until Preference shares are fully redeemed? I think that might explain the Lloyds price drop!
88. he does appear clueless in interviews, and has been AWOL during the current crisis, so widespread “underestimation” is not really surprising
RBS turned me down for their Coutts Graduate Scheme last month, apparently my mathematical prowess wasn’t up to their standard. A bless perhaps.
Did you ever, as kids, stand beside a cold swimming pool, daring each other to be the first to jump in?
Did you then all agree to jump in together, on the count of three?
And did you then all shout ‘ONE, TWO, THREE, JUMP!!!”?
And did you then find that you were the ONLY one in the freezing cold water?
And do you remember what a right banker you felt?
Gordon Brown does.
“The whole crux of the matter is that it is a UK issue caused by a UK ( London ) government, who knows what structure would have been in place had Scotland been independent only guarantee is that it could not have been any worse.”
Actually, it might. An independent Scotland might now be in the same position as Iceland.
Ken, you plainly are very knowledgeable about banking. Would it not be preferable to boost bankers’ basic salaries, while cutting back on the bonuses, and therefore reduce the incentive to gamble with the bank’s money?
Surely the Lloyds shareholders will reject the deal? There’s absolutely nothing in it for them any more!
91. He’s been hiding in the small town newspaper called the Evening Standard
http://www.thisislondon.co.uk/standard/article-23571855-details/The+job+needs+doing++-++but+this+bail-out+is+no+triumph/article.do
Same paper - Gilligan “salutes” Brown for congratulating himself on saving the planet
http://www.thisislondon.co.uk/standard/article-23571857-details/False+dawn+breaks+over+Gordon%27s+%27Falklands%27/article.do
If Scotland goes independent which bank will we sell them to act as their central bank?
88 That has long been Mike Smithson’s view, who described Osborne to me as the “Conservative Party’s Karl Rove.”
94 - Presumably that’s what the banks will do to try and retain staff.
97.. Gideons Standard article is very very desparate, I recommend everyone reads it…
On the question of whether todays moves will help or hinder Labour help definitely. Think back to what the tories most effective lines were against labour.
They were Brown was dithering and indecisive, even incompetent, the party was divided and tired and all the new ideas were coming from the Tories.
None of those lines seem particulalry credible when the government is taking lots of new, innovative action, Brown is leading a united party and leading it deciselvy and even emerging on the world stage with some aplomb. (A UK PM addressing the Eurozone countries on what to do on the economy, that’s quite something).
While Brown is acting, the Tories are reduced to saying they’d support whatever the government does, it’s a much weaker position for them.
All that said, this is fluid and the fundamental of an economic downturn are usually bad for governments. Reading Osborne’s article today he seems to set out a revised attack line that this is Brown’s fault for not regulating enough, that we need more help for families and to be tougher on the Banks.
These might be effective arguments, but watching Cameron at HBOS today was instructive. He looked poorly briefed, reduced to repeating a soundbite. He wasn’t able to articulate the osborne lines effectively, perhaps because as soon as he tried to do it, the response was “but isn’t this the end of everything you believe in?”
this is the crux of the Tory problem, and one which Osbrone’s tactically clever lines don’t adress. The new policies aren’t Tory policies. They’re not tory values. They Tories are forced to support them because they can’t think of anything better. So why should the country turn to them?
100. Osbourne’s line is that he didn’t regulate his own spending enough.
100 Banking has always been a heavily-regulated industry. Given that, it’s reasonable to ask why the regulation proved so ineffectual.
87
I was under the impression that LLoyds were indeed ina pretty good position - until thhey agreed to the HBOPS deal and it is as a result of that that they now need the extra capitalisation from the government.
I am offshore at the moment but when I get back I am closing down all my Lloyds bank accounts and moving both my business and personal accounts elsewhere.
100 - I doubt the argument that Brown “didn’t regulate enough” is a killer line.
It is worth mentioning the total failure of the regulatory system he put in place, but frankly most people won’t understand it.
Far more potent is the line that he failed to plan for the downturn because of the hubris about “no more boom and bust”.
Banks staying private are up
Banks to be run by Brown are down
http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/shares/3/498/0/default.stm
96 - the awful news in that is ITV bringing back Minder with Shane Richie and Lex Shrapnel! Aaaagh.
Its probably me, but Osbourne just has to open his mouth and I feel like becoming a rampant leftie - which I’m not. He provokes a real irritation.
At least Cameron invites me in - and I choose to reject the invitation, but at least I have been invited. Osbourne’s manner is the least engaging of any of the top people. Not good in today’s impression-based politics.
100. Brown has hardly been decisive, this really is Plan Z and we don’t even know if it will work. Add to that the fact that bailing out the banks appears to be broadly unpopular in the country as a whole.
103 - well yes that is the assumption. But the fact that they are continuing to press ahead, and have taken funds themselves for the govt suggests something not quite right.
I mean this HBOS deal has absolutely screwed their shareholders to high heaven. The whole thing’s a complete mystery.
BTW am i correct in my understanding in 90 that RBS and Lloyds have been effectively banned from paying dividends for several years?
Ken - won’t HSBC etc not need to give such big bonuses in order to attract the best now. They just need to be a bit better than the zero offered by RBS HBOS etc
107. being consistently outshone by Vince Cable hasn’t helped him either
108. Pretty much. Brown has wedded himself to this plan and taken all the credit before we’ve seen any results. Even if it succeeds all it will do is take the edge off the recession, not stop one. We will still see rising unemployment etc etc but with no plan to stop it. The tories will be able to make a great deal out of the ‘no more boom and bust’ phrase that Brown used for years.
51, I don’t think the Americans made Britons run up more credit card than the whole of Europe put together. However I don’t recall Gordon Brown telling Britons to run up credit card debt either!
Are you honestly going to tell me that Brown should have legislated to control the income multiples offered by banks? Are you seriously going to tell me that the percentage deposit accepted should be regulated by the state? Or whether banks should allow investment in buy-to-let? I must have missed that part of the Conservative manifesto…
Can you honestly tell me with a straight face that had the government sought to control these things there wouldn’t have been squeals of outrage both from the Conservative Party, the media and across the business world?
In any case, unlike the situation in the US, this crisis is not caused by people being unable to afford their mortgage repayments. Banks have not lost money from the UK housing market, so even these sorts of policies had been pursued, against all conventional wisdom, it’s still not clear that it would have made much difference.
I see the bbc propaganda machine is on overdrive today. Hailing the great Brown (well Swedish plan) and how it is causing the market to rally.
If any half-wit spend more than 2 secs, they can see the 3 biggest losers on the market today are the banks that have taken the government cash. That sounds like lots of confidence. The banks that are up are those that have gone and secured private money. The rest of the rise is clearly a correction for over selling in the panic that was last week. When the market rallys back past 6000 is when we can say the plan has restored the confidence and been a success.
BBC news just had an expert from Citibank explaining all this in no uncertain terms and that a recession is coming. Following the interview it was quickly back to the Grand Gordan plan leading the world and rallying all the markets. Propaganda at its worse.
100 - “They were Brown was dithering and indecisive, even incompetent, the party was divided and tired and all the new ideas were coming from the Tories.
“None of those lines seem particulalry credible when the government is taking lots of new, innovative action,”
Old fashioned political positioning? Blair was great at that - whenever Major dithered, he was pulled up on dithering. And when he did make a firm decision, it was because he was forced into that choice from his own actions.
IMO Brown isn’t liked well enough to gain political capital out of this for long.
107 - Osbourne needs a few grey hairs
107 - I feel exactly the same way, John. I like Cameron, I like Hague, I like Maude, I even quite like Fox. There is something about Osborne that irrationally raises my hackles.
I don’t mind utterly unlikeable, if it is a part of ’so stunningly talented and worthy of my respect that likeability is unimportant’.
If he really is that talented, he’s hiding it well. Quietly competant, but not much more is my impression.
The answer to the question is neither. Labour were going to get massacred at the next election before the banking crisis and they will still get massacred after it.
The only difference is that now Gordon Brown can enjoy the fruits of his destruction of the economy himself.
Here’s to the building of more pointless school buildings to replace perfectly good ones over the next 18 months…
101, I think he argues both..
“Our regulators could and should have spotted the risky bets many of the banks were taking and stopped them. That’s what some bank regulators around the world did, such as in Spain, but not here in Britain. ”
and “in Britain, Gordon Brown racked up the biggest budget deficit in the western world.”
102. Oh, Osborne’s lines are tactically correct. but there’s just this weird gap between what they say should have happened and what the Tory party has stood for for the last decade. maybe it’s just me and I just missed the Tories campaigning for tighter regulations on the capital markets and on mortgage lending….
PS, since I’m obv a biassed source, you can see Cameron here
http://news.bbc.co.uk/1/hi/uk_politics/7667207.stm
I think it’s interesting to see the differnce between him and Brown here.
http://news.bbc.co.uk/1/hi/business/7666875.stm
Cameron’s “no time for triumph” soundbite just seems a bit adrift in this context. I mean, does Gordon Brown look like he’s doing a jig in this clip?
116. It’s stuff like this that will come out. When times were good the people weren’t interested in what the government lavished funds on. As they begin to have to count the pennies they’ll want to know why the government aren’t doing the same.
There’s a disconnect between peoples impression of the action being taken - that Brown is somehow preventing a recession and all will return to be as it was in 2007, rather than the reality of ensuring sure that the cashpoint/chip & pin machines still work this time next week.
I know betsman and gamblers everywhere hate anecdotal evidence but we were canvassing on Saturday in one of Torbays patchwork of very Labour areas - red brick terraced housing with many retired proud working class types.
They absolutely do blame Gordon Brown for the mess; and by and large they ‘get it’ so far as the crisis is concerned. One man said ‘I have lived within my means and saved all my life, if I can do it why can’t the Government?’
They think we will all pay more tax in future not to build new schools or train nurses but to pay interest on the billions borrowed by Brown to bail out Scottish bankers. And they don’t approve.
I do believe the polls, and I do think the gap has closed, but I don’t think this is for any reason other than Cameron has been squeezed off the news, just like last summer.
When he is back, so will the 20% gap return.
117. Hmm thats like saying Alan Hansen should be sacked from Match of the Day because he agreed with the England team that Steve McClaren picked.
118 - Indeed. And how can anyone support replacing a perfectly decent Victorian school house, which has probably performed its role for 150 years, with an ugly prefab box, just for a soundbite in the House of Commons?
Labour MPs need some serious answers. Answers they just don’t have. Even our own MP for Broxtowe asked, when pointed to Gove’s education plans, what he was planning to do about this insane building programme. That suggests he supports it.
Utterly utterly bonkers.
103 - The other thing about Lloyds is that they don’t seem to be kicking up much of a fuss about being regularly grouped with RBS and HBOS as part of the banking system which has been behaving irresponsibly and needs to clean up its act.
You would think if they had been doing so well, and had agreed to do the Govt a favour by buying HBOS, that they might be a bit more vocal.
111
‘being constantly outshone by Vince Cable’
But Vince Cable’s nightly appearances on the TV haven’t helped the Lib Dems,their poll ratings are going backwards and are currently at 15%.
PS. As for Gordon “taking too much credit”.. can i point you in the direction of the new Nobel prize winner for Economics?
This is from his article in the New York Times..
” Has Gordon Brown, the British prime minister, saved the world financial system?
OK, the question is premature — we still don’t know the exact shape of the planned financial rescues in Europe or for that matter the United States, let alone whether they’ll really work.
What we do know, however, is that Mr. Brown and Alistair Darling, the chancellor of the Exchequer (equivalent to our Treasury secretary), have defined the character of the worldwide rescue effort, with other wealthy nations playing catch-up…
… the Brown government has shown itself willing to think clearly about the financial crisis, and act quickly on its conclusions. And this combination of clarity and decisiveness hasn’t been matched by any other Western government, least of all our own.”
http://www.nytimes.com/2008/10/13/opinion/13krugman.html?_r=1&ref=opinion&oref=slogin
122 - “…support replacing a perfectly decent Victorian school house, which has probably performed its role for 150 years, with an ugly prefab box…”
You can criticise the BSF plan all you want, on probably solid grounds, but you don’t do your case any good by spouting nonsense like this.
Trinity Mirror shares at all time low..
http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/shares/3/23377/twelve_month.stm
McGuire for the Telegraph ?
104. The regulation Brown put in place was aimed at protecting the consumer from being ripped off - that is the sales process end. Unusually for a Socialist it did not try and protect the consumer from themselves!
Like all centrally planned things, what Brown (Labour) failed to take into account was the light-touch corporate regulation that failed to monitor/ensure corporate stability. Another interesting dynamic is the Basal Aggrements (Given the international dimension) and the failure to regulate product development/access.
In essence this is a case of regulatory failure & gross mismanagement of the Financial System.
126 - Explain? My own primary school was Victorian and my secondary school was built in the early 1970s, both of which are now being knocked down for absolutely no good reason.
127 - after working for their London regional newsrooms, good.
Interesting Cameron is in Halifax today!
http://www.halifaxcourier.co.uk/news/David-Cameron-in-Halifax-to.4586261.jp
127 - Well when you seem determined to sack your staff and take ten years to realise the internet exists it hardly suggests a company you should invest in.
Caveat - I work for the opposition.
Marcus’s anecdote is very interesting but it isn’t the government that has failed to live within its means so much as the banks throwing good money after bad and thereby contributing to the credit crunch. That message may yet find its way onto the doorsteps.
There’s a piece in today’s NY Times by Paul Krugman who only today won the Nobel Prize for economics. In it he praises Gordon Brown and Alisdair Darling to the skies, effectively calling them the only clear-sighted and decisive policy makers in the G7.
Apologies if this point has already been made but when the meeja eventually get around to profiling bankers who made particularly risky investments (lots of toxic subprime) it may be that some of them are associated with a political party. That could affect the narrative quite a bit.
Because Labour have nearly bankrupted the country again. Regulator asleep on the job, BOE’s hands tied.
We are about to enter a terrible recession that no-one can stop, with millions about to become unemployed.
I’m sure Mr “An End to Boom and Bust” will not survive it.
Or perhaps it’s now… An End to Boom and Bust (Except If It’s Due To A Global Problem Which Started in America And Was Nothing to Do With Me).
Face it - the recession is the end of Brown and the New Labour Government.
Their whole raison d’etre was to avoid the mistakes of the past and to permanently sort out our finances as a country, get the economy into a balanced state, while at the same time making long term investments in essential services and infrastrucure and get stable growth.
11 years later as a nation we are drowning in a sea of debt, have collapsing house and share prices, pension schemes have been robbed blind, and taxes increased and spent, spent twice.
I really , really fear for the future now, mostly because of the barmy decisions that have been taken by Labour over the last few years.
I think the next few years could even see a brain drain, and a devaluation, as in the 1970’s.
Brown’s “order” to banks to reinflate the bubble as a condition of the bail out is sheer madness, but just shows you how delusional Labour have become. If they do return for once last pump up of the balloon, our final collapse will be into Zimbabwe style poverty and war. Be warned.
129 - They’re not being replaced by “prefab boxes”
“What we do know, however, is that Mr. Brown and Alistair Darling, the chancellor of the Exchequer (equivalent to our Treasury secretary), have defined the character of the worldwide rescue effort, with other wealthy nations playing catch-up…”
They have also shown that their solution will encourage more of the crazy lending practices. T&C’s of this bail-out include a promise by the banks who are receiving this money to return to the lending approaches of 2007 (a record year if I remember correctly). We are in this mess, because of too many people borrowing too much in the first place, and now in the face of this mess the recover package forces the banks to continue this practice as if nothing had happened in 2008.
might i also wish Baroness Thatcher many happy returns for today. a very fine lady.
134 - OK even if you substitute ‘prefab boxes’ with glorious architecture the likes of which we have rarely (ever) seen in the public sector you still don’t excuse the waste of taxpayers money.
Mike L@54: That’s a pretty good summary of how McCain could still win. The other big thing that could help him is differential turnout if the Obama turnout machine fails to live up to expectations, since he has older and more historically dependable voters.
But McCain needs to turn this around fast:
“Experts such as Paul Gronke of the Early Voting Information Center predict nearly a third of the electorate will vote early this year, up from 15% in 2000 and 20% in 2004.”
http://firstread.msnbc.msn.com/archive/2008/09/22/1431785.aspx
I couldn’t find any good numbers about what kind of spread that will have over time - whether most people who vote early/absentee will do so in the last week or whether they’ll tend to vote as soon as their states let them - but turning the thing around on election day probably isn’t going to be good enough for McCain, unless he not only closes the gap but also builds up a decent lead.
117. Interesting post from Nick Robinson’s blog about why 10 years of the Tories might have been different.
Let’s be clear that Gordon Brown created the current banking regulatory environment in the face of Conservative Opposition warnings that it would not be able to deal with a systemic failure. For example, (one example of many):
Quote: With the removal of banking control to the Financial Services Authority it is difficult to see how and whether the Bank remains, as it surely must, responsible for ensuring the liquidity of the banking system and preventing systemic collapse.
The process of setting up the FSA may cause regulators to take their eye off the ball, while spivs and crooks have a field day. End Quote.
(Peter Lilley, November 1997)
Osborne getting tied up in knots today
139. Great post !
136 The quality of many Victorian buildings is excellent. My own secondary school building was about 150 years old, and very solidly constructed.
The end of the Union
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Buried away in the new Banking Bill is a small clause which remo