Tag Archive | "boom and bust"

Punch and Judy Politics

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Punch and Judy Politics


Prime Ministers Questions was yet another example of the Punch and Judy style of politics that is so prevalent today. It is reminiscent of two schoolboys arguing over who’s dad is bigger or stronger, yet, these grown-up children in Parliament are the very people we are supposed to rely on to represent our interests. We are slowly becoming a laughing stock as our politicians consistently fail to represent our interests, whilst many are guilty of taking the public for a ride in terms of their expense claims. Even the Ayatollah Khamenei believes that he is entitled to sit in judgement of the people of this country based on his views of our political leaders.

Yesterday, Brown and Cameron swapped blows regarding the level of capital spending in the UK over the coming years. Brown is quite clearly guilty of a deliberate attempt to mislead the public. It is self-evident that capital spending is being reduced, even if this is as a consequence of this government bringing forward capital projects from future years, which inflates the current spend, but has the effect of reducing the amount available in future years. Some would argue that this is quite a reckless policy, especially given Brown will almost certainly not be in power when someone else has to deal with the fact that there is nothing in the kitty. Mind you, that has become a fairly common trait with Labour government, their spend, spend, spend policy invariably leaves a Conservative government to clean up the mess.

Meanwhile, whilst Cameron has Brown on the ropes, he lacks the courage to state the bloody obvious and that is, we have no choice but to reduce public spending. Tax receipts are down, public sector spending is out of control, the economy is contracting and more and more people are becoming an economic liability, rather than an asset as a consequence of increasing unemployment. I would have more respect for David Cameron if he was to demonstrate that he has the courage and moral rectitude to come clean with the public. Instead of highlighting Brown’s lies ( after all we all know that he is a stranger to the truth), Cameron ought to be outlining why there is a need to reduce public spending and how they intend to do it if elected. Instead, he is allowing Brown to dictate what the “10% Tory cuts” amount to, using the classic New Labour trick of emotional blackmail, less for pensioners, less for the NHS, less for the Police etc.

Apart from the fact that most people already understand that we are in for a tough few years, Cameron also has the OECD stating that the Treasury figures for the UK economy are at best optimistic, but more likely completely wrong. He has the rating agency Standard & Poor making veiled threats to reduce the UK Plc credit rating unless the government gets it’s house in order and puts in place a concrete plan to reduce public debt. And, now, he even had the governor of the Bank of England stating that “scale of the deficit is truly extraordinary” and usggesting that the government should be more ambitious with their debt reduction plans. In other words, Cameron has some very powerful people or organisations supporting the notion that our economic situation is dire and we need to reign in public spending, yet he still lacks the courage to take the bull by the horns. It is this lack of backbone, even when the odds are in his favour, that leads me to doubt Cameron’s ability to offer the strong leadership this country needs to get itself out of the mess created my New Labour’s social engineering project.

Apart from public spending cuts, there is also a need to look at whether we are getting value for money from our public services. For example, in spite of the fact that we have record numbers of police officers, the number of front line bobbies (I have excluded PCSO’s) is but a tiny fraction of the 156,000 officers that are employed. Crime is rising not falling and police openly admit that they consider their job to be the investigation of crime, rather than the prevention.

The NHS has received a massive increase in spending. To fund this all UK workers were surcharged an extra 1% on their entire earnings and employers were charged an extra 1% of their wage bills. This added £billions every year. This burden on employers and employees will increase by a further 0.5% shortly. Yet, in spite of the enormous amounts raised to invest in the NHS, new build was financed using PFI, a hugely expensive way of funding new hospitals, and much of the money went into higher wages, not improved services. Now that the NHS have identified that there may be a real term reduction in the NHS budget, we are threatened with ward closures and increased waiting lists. In other words, the NHS are holding us to ransom, instead of investing the money wisely, they simply spent it. There is a subtle difference in my terminology, but a huge difference in practice.

Take the money being wasted on spy databases. £billions have been committed to IT infrastructure projects, most of which have not been thought through, many have contracts that amount to a blank cheque in terms of costly overruns and to be frank, most are simply not needed. This is not a wise investment of our taxes at a time when the country can least afford a spendthrift policy. It is also worth noting that many of these contracts do not benefit UK companies.

The list goes on and on. That notwithstanding, it is so bloody obvious to most people what we need to do, that to tell us different is patently insulting. Unfortunately, our politician’s still believe that we are not grown up enough to be able to handle the truth, so instead they either lie to us, or avoid being candid. My message to politicians of all parties is to stop treating us like idiots. They must tell us how they see the situation in unambiguous terms, what they believe needs to be done and how long they expect the pain to last. They must tell us how they will ensure that we get value for money and what they will do to ensure that tax increases are only be considered after all other areas have been exploited. If the people of this country and its politicians are not to be looked on by other countries as a bit of a basket case, then we need a man (and a party) with a plan.

Posted in Conservatives, General, Lib Dems | Comments (3)

Budget 2009: New Labour have lost the plot

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Budget 2009: New Labour have lost the plot


New Labour has brought this country to the brink of bankruptcy and yet, even now, when everyone else can see it, they remain in denial. How on earth can any pollster find people that are daft enough to believe that Darling and Brown are best placed to get us out of this mess? Never have I felt such utter despair. Up and down the country, people are having to tighten their belts and reign in their spending, only then can they hope to get themselves out of debt or survive a period of reduced income. Ask anyone and they will tell you this is simply commonsense, anyone that is, other than a ‘New Labour’ MP or the recipients of New Labours redistribution of taxpayers money. New Labour believe that they have discovered the secret to dealing with reduced income and spiralling debt, just borrow more! If that were not enough, they elect to lie to themselves and their masters, by suggesting that things will get better by the end of this year and by 2011, we will be in the money again as a consequence of a boom, the like not seen since the ‘dotcom era’.

Our government tells us that the economy will shrink by 3.5% this year, whereas the International Monetary Fund suggests that it will be 4.1% and the the Centre for Economic and Business Research, 4.5%. Even taking account of the Governments hugely optimistic and unlikely forecast, they will have to borrow £175bn this year. In my view, the governments forecast is a lie and I believe they know it is, but rather than give it to us straight, they would sooner treat us like idiots. If the governments figures are wrong and most economists believe they are, then borrowing will be even higher, something our government, your government, doesn’t want you to know until it is too late to do anything about it. Even when it was announced that the economy shrank by 1.9% in the first three months of this year, the government still insisted that their figures were accurate, in other words, we (the government) are right and everyone else is wrong. Early estimates suggest that if the IMF figures are more accurate that those of the Government, then borrowing will increase by around £30bn per year, no wonder this Government doesn’t want us to know the truth.

Next year, the government is forecasting growth of 1.25%, yet in spite of this, they still need to borrow another £173bn. Once again, others, such as the IMF, suggest that the growth figures are vastly optimistic, suggesting instead a contraction of 0.3%. In spite of this, the government then tell us to expect a dotcom like boom in 2011, with a forecast growth figure of 3.5%. Utter fantasy, but even with this spectacular figure, the government will still need to borrow £140bn. Followed by £118bn in 2012 and £97bn in 2013. In other words, even taking this governments completely unrealistic contraction and growth figures, we still need to borrow more than £700bn over the next 5 years. Even to a Cabinet simpleton, this has to indicate that we, as a country, are living well beyond our means. It is also worth noting, that even before the property slump and the recession, we were still borrowing well in excess of our income, with further fancy footwork taking place to move other government debt, such as the Private Finance Initiative (PFI) off the government balance sheet. So, no matter what Gordon Brown will have us believe, we were heading for a fall even without the recession. If he denies this then he is either a fool or a liar..perhaps both! We must not be surprised that this government is lead by liars either, after all, it was they who made a manifesto commitment not to raise the higher rate of income tax and they who promised a referendum on the European Constitution and then denied us the right by falsely claiming that the renamed treaty was not the same. Two manifesto promises, two out and out lies, why should the electorate ever trust any party again over manifesto promises?

The government has decided that anyone earning over £113,000 per year must lose all of their personal allowances, which will cost them around £50 per week and anyone earning over £150,000 per annum, will face a tax rate of 50% on all earnings above the threshold. This governments justification is that these people have gained most during the boom years and should, therefore, pay more now. The truth is somewhat different. Over the past 11 years, the people that have benefited most from the boom, in relative terms, is the lower paid, funded in no small part by those on middle and higher incomes. This was as a direct consequence of the governments programme to redistribute wealth. The government has also said that those that earn more must pay more. But they already do. Someone on £113,000 per year pays, in cash terms, seven times the tax that an individual earning £25,000 per year does.

It is also worth noting that anyone lucky enough to earn over £100k per year has not been gifted it, they have earnt it through promotion, success, hardwork and/or entrepreneurial risk taking. No employer would pay someone over £100k per year if they weren’t worth it. It is also worth remembering that these people are resident here, which means that they spend the majority of their money in the UK, therefore, they will be contributing substantially to the economy in the form of other indirect taxes as well as helping to create employment through the purchase of goods and services. The money that the government takes from these people won’t be handed straight over to the poor as they imply, instead, it will be used to plug a huge gap in government finances…which has become something of a bottomless pit. I would sooner have the taxpayer keep more of their money which, if they spend on goods and services, will be the best natural stimulus this country could possible have. If the government could not fleece the taxpayer so easily, they would be forced, as the rest of us are, to ensure that available funds are spent wisely and are only used on what is necessary, rather than desirable.

The bottom line is, that the only way we are going to get ourselves out of this mess is if we reduce our spending, this is basic economics and most 8 years olds could tell you that. Increasing taxes reduces the amount of money in the economy and it is this that will prolong the recession. The government is asking us all to believe that it can spend our money better and more wisely than we can, is there anyone out there, other than those that do not contribute, that would agree with this statement? For those that believe this government has its priorities in the right place, then they should consider the following; According to the government, the increase in tax announced for higher earners is worth up to £7bn per annum, although other experts believe the actual figure is much, much lower, but taken at face value, this tax increase pales into insignificance when set against government spending on databases. The government intends to spend, in spite of the recession, some £105bn of our money over the next 5 years on databases and other largescale IT projects, that is equivalent to over £20bn per year, or half the defence budget. These databases are designed to allow the government to drive a coach and horses through our civil liberties, monitor our every move and spy on our every deed. How can that be a priority at anytime, let alone during a recession, the databases are far from an essential spend?

The government has failed to grasp the nettle of public sector pension schemes which now costs us £2.7bn every year and rising. Even though the government has hammered private sector pension schemes with a tax take amounting to more that £100bn over the past 10 years, they have done nothing to deal with the public sector pensions, where the gross liability has been estimated to top £800bn. This abdication of their duty is simply breathtaking. For those that are not aware and, in the interest of putting things into perspective, 20p in every £ of our council tax goes directly towards funding local government pensions (source: Taxpayers’ Alliance). With public sector pay now above the levels of those in equivalent jobs in the private sector and better job security, little wonder that questions are being asked. Some MP’s have been whining in recent days that they should not be expected to vote for less money in relation to their lavish expense allowances. Why not, the rest of us have not been given a choice?

Alistair Darling noted in his budget speech that there will be £15bn of “efficiency savings”. Note, these are not cuts, but efficiency savings. What I don’t understand is why they have only noted them now, any well run business would have an ongoing programme of efficiency measures designed to save money. If they are genuinely efficiency savings, then the government must hold its head in shame, because that is the equivalent of admitting that this government has presided over a massive programme of excess and/or waste. But lets call a spade a spade, it is not just efficiency savings that are needed, but cuts, real cuts. The Conservatives lack the courage to outline what they would cut, which leaves them open to any charge the Labour government wants to send their way, such as cuts in health and education. They (the Conservatives) should have the courage of their convictions and tell us what they will be, we know they are necessary, but scrapping the ID Cards system, whilst wholly sensible, does not cut the mustard. By contrast, the LibDems have highlighted some 8 or 9 areas they would cut. We all know that the LibDems won’t get enough support to form a government, but based on the fact that they are willing to put their stake in the ground and then fight their corner, they are demonstrating considerably more moral courage and conviction than their Conservative counterparts.

Because I don’t want to be accused of highlighting the problems, but not putting forward any solutions, the following would be my first port of call in terms of saving money. And, for the record, I would not be looking to increase direct taxation, since as I have already argued, the best stimulus this country could get, is the natural one provided by people spending their own money in the way they so choose.

  1. Scrap all database/unnecessary IT projects, including, but not necessarily limited to; the Communication Database, ContactPoint, the Travel Database, the NHS Database and the ID Card Scheme. Saving £105bn over the next 5 years. It is worth noting that over-runs on this Governments 8 largest projects total a staggering £18.6bn (source: Times & Computer Weekly). That’s right, this is just the over-runs, not the total cost!
  2. Scrap the ‘Tax Credit’ system and return to a simplified tax and benefits system that does not see people pay a higher rate of tax simply so they can fill a form in a claim it back as a tax credit. The same objective can be achieved by using personal allowances and a simple tax system. Minimum savings of £4bn per annum as a result of less fraudulent claims and errors (currently £2bn per annum), plus savings in process and administration.
  3. Can local council’s publicity machines, saving £430m per annum.
  4. Cancel the Child Trust Fund (Baby Bonds) programme, saving £470m per annum.
  5. Reduce International Development Aid budget by half. At this time, we can ill-afford to offer £billions in aid to other countries. Saving of £2.5bn per annum.
  6. Close down the Regional Development Agencies that have delivered little, if anything, for businesses in the UK. Annual saving of £2.1bn
  7. Reduce funding to the Scottish Assembly, the current ‘Barnett Formula’ is outdated and the amount paid allows people in Scotland to benefit from services that those in England cannot, such as free prescriptions and free care for the elderly. This is neither fair, nor equitable. The budget should be trimmed by at least 10% saving £2.6bn per annum.
  8. Withdraw automatic right to ‘sick pay’ for public sector workers. Savings £1.7bn
  9. Reduce the number of consultants used by various government departments by half. Saving £1.5bn per annum. Use the balance to recruit the skills that are necessary rather than pay inflated costs to outside companies.
  10. Reverse the increased cost of Quangos in the UK, which has risen by £41bn to £123bn. Saving £40bn per annum.
  11. Close tax loopholes which cost the UK Exchequer £8.5bn from High New Worth Individuals, £3bn from large companies and a further £7bn as a result of tax evasion and other activities. Total: £18.5bn

There are, of course, many other areas where our money is squandered, my particular suggestions would save approximately £70bn. Any halfway competent government, or government in waiting, could come up with a set of plans that could easily trim 5%-10% off government expenditure without necessary affecting front-line services. This could lead to savings of up to £60bn per annum. In fact, the European Central Bank found that if the UK’s public spending was as efficient as say, the USA or Japan, we could realise a saving of 16% without any cuts in front-line services, that is a whopping saving of £93bn per year. Throughout government there is duplication, waste, excess and abuse, this area should be tackled well before cuts in essential services are considered and this is what the opposition parties should be focusing on.

Posted in Conservatives, General, Labour, Lib Dems | Comments (4)

Gordon Brown, the G20 is over, time to go

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Gordon Brown, the G20 is over, time to go


Gordon Brown has received a great deal of praise from world leaders at the G20, one assumes, because he managed to get so many leaders together in one place to discuss the global economy. But talks of a breakthrough or global deal are a bit strong, lets face it, all we have been given is a set of guiding principles. Nothing is binding and, as we all know, when the dust settles, things are rarely as they at first appeared. For example, tax havens will be named and shamed, but that won’t stop them doing what they have been doing for years, threatened sanctions are unlikely to have any real impact, even if they are implemented, which is a very big IF!

Everyone has agreed that banking and financial market regulation has to be tightened, but this is meaningless, because no-one will agree that there can, or should be a world regulator. Therefore, all we will see is each country implementing their own regulation, presumably based on the guiding principles agreed by the leaders. But rest assured, someone will be a little more flexible, so that they can attract the ‘banking and financial services business’ to their shores, stealing it away from London. The primary reason that London was the banking and financial services centre of the world, was Gordon Brown’s own “light touch regulation“, now it is likely that we will toughen regulation so much, that we will lose most of this trade. Some will argue that this is okay given the circumstances, but, truth be told, banking will continue, just somewhere else and we will have to find something to take the place of the 20% of GDP that we will lose if London is no longer the banking and financial services centre of the world. Has anyone any idea what we have in our armoury to deal with this massive reduction in trade, tax receipts and jobs? Thought not? Talk about throwing the baby out with the bath water.

Sarkozy may be a little petulant, but he is not stupid, he wants more regulation, because he seeks a level playing field so that Paris can take over where London left off. Gordon Brown’s light touch regulation was a failed policy and we shall all pay the price, however, if we now over-regulate for political expediency, we shall lose future, better regulated business to other countries such as France and Germany. Surely it is possible to regulate without killing off this significant contributor to our massive balance of trade deficit? A failure to get the balance right will cost us all and that is another good reason why Gordon Brown has to go and go now.

It was Gordon Brown that coined the phrase light touch regulation and he even had the temerity to lecture other European leaders on the same subject. Now, this same man is telling everyone that there must be much tighter regulation of the banks and financial markets. Talk about turning on a sixpence! Under Gordon Brown’s light touch regulation, it was possible for the financial markets to introduce new financial products with such complexity, that few people understood them, or the associated risks. Everyone knew of these instruments, but no-one, not even the regulator, asked any (or enough) questions. This, together with an overheating housing market and increased personal indebtedness is what caused the crisis. Our ability to manage this crisis in the UK has been exacerbated by the fact that UK Plc is massively in debt, not necessarily based on the Government figures, but when taking account of all the off-balance sheet debts that ought to have been included such as PFI, pension liabilities etc

Of course, Gordon Brown cannot be held responsible for the world economic problems, but he can and must be held culpable for the problems that have become evident here in the UK on his watch. It was ultimately his job as Chancellor to ensure that the financial markets were kept in check, Government borrowing was accurately reported and kept under control and that the availability of credit be actively managed, both secured and unsecured. The fact that our economy and housing market was overheating was known to Brown, he received plenty of warnings, he chose to do nothing. He was in denial, but he could no longer pretend everything was okay when the world banking crisis forced government intervention here in the UK. Let’s not kid ourselves, whether or not the world banking crisis happened, this country would have gone into recession. It was Gordon Brown’s job as Chancellor to ensure that boom and bust was at an end, he failed and in a spectacular way.

History will prove that Gordon Brown was a poor Chancellor and that he missed or chose to ignore every sign that our economy was running into trouble. It is only the world crisis that has diverted attention from his full culpability. What we must not do however, is allow this inept former Chancellor to continue making financial decisions that will affect each and everyone of us. His past judgements have been seriously and catastrophically flawed and by his own admission, we are now in “uncharted territory“, therefore how can any of us have any confidence in this man? Gordon Brown has been universally praised for his decision to make the Bank of England independent. However, the tripartite system that was introduced as a direct consequence was not clearly thought out given it has spectacularly failed, with The Treasury, Bank of England and the FSA blaming each other for the mess we are in. Therefore, I would argue that the jury is still out on whether or not Gordon Brown’s stated objectives were achieved when he gave the Bank of England independence, whilst stripping them of other fundamental responsibilities. Take this ‘achievement’ away and what other positive legacies has Gordon Brown given us…none that I can see? But there are literally hundreds of failures, I won’t name them all because it would take too long, but a short list would include a decimation of the private sector pension schemes through the removal of tax breaks, whilst allowing public sector pensions to get out of control with an unfunded liability of around £900bn; The introduction of a overly complicated ‘Tax Credit’ scheme which still ‘loses’ £2bn every year through errors and fraud; A massive public sector debt, much of which has been hidden from sight through fancy footwork and an insistence that certain debts remain off-balance sheet; a huge increase in environmental and other stealth taxes which are then funneled into non-related pet projects rather than being used for the purpose stated at the outset; and, a massive increase in direct and indirect taxation.

The mainstream press are going on about an expected “bounce” in the popularity of Gordon Brown. That may be true, but then we deserve what we get, because this is a man who is primarily responsible for getting us into the mess we are in. No world leader, naive enough to praise Gordon Brown, should be permitted to sway public opinion from the harsh reality of Brown’s policy failures, rank incompetence and inability to heed warnings. Time to go Gordon Brown, maybe the public will then look upon your efforts at the G20 as an act of contrition and be more forgiving when we look at your legacy.

Posted in General, Labour, World | Comments (3)

Gordon Brown needs to Get a Grip on MP’s Expenses

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Gordon Brown needs to Get a Grip on MP’s Expenses


Hazel Blears has suggested that Labour MP’s should “get a grip” in relation to gossip about those seeking to take on the top job when Gordon Brown steps down. Like that is going to happy any time soon!

However, in my view it is Gordon Brown that must get a grip, of MP’s expenses. At a time when everyone is tightening their belts to ride the storm that for the most part has been created by this government, its policies and Gordon Brown’s mis-management, many MP’s are filling their pockets with tax free expenses. These expenses are funded by the hard pressed taxpayers of this country. I am not suggesting that MP’s are not following the letter of the rules, but they are quite clearly not following the spirit and that in my view this is an abuse. To make matters worse, people right at the centre of government are also abusing a set of rules that were introduced to assist MP’s in their out of pocket expenses, not enrich their lifestyles.

Take Jacqui Smith for example. She claims that the decision to call her sisters home her main residence is within the current interpretation of the rules and that may even be the case. But this woman is the Home Secretary, surely someone that sits at the top of the food chain in terms of law and order should act strictly within the rules, not simply in the spirit of them? She, with her fellow cabinet ministers, must set good examples, not simply sit with their noses in the trough. Members of Parliament are in the unique and privileged position of bring able to claim expenses quite freely that those in the private sector could only dream of.

It is estimated that Ms Smith has been able to claim as much as £116,000 tax free as a result of this interpretation of the rules. If an ordinary member of the public were to be asked how they would determine someone’s principle place of residence, they are likely to state that it would be where the rest of their family reside, where the kids go to school, where all the household accounts are held, where your banks and credit card statements go to etc. So why is it, that MP’s are given so much latitude? Simply this, that instead of MP’s expenses being a method of reimbursing out of pocket expenses, it has become a ‘perk’ of the job and that is completely and utterly unacceptable. The Jacqui Smith debacle follows, of course, directly on the heels of the uproar over Ed Balls and Yvette Cooper’s interpretation of the rules that allowed them to elect which property was their primary residence (subsequently upheld by the watchdog). The bottom line is MP’s cannot and should not be trusted to vote on and determine their own allowances or expenses.

MP’s expenses must be further simplified, instead of a second home allowance, they should be provided with a ‘fixed’ overnight allowance. That is to say, if they elect to stay in a hotel then the maximum allowance is, for example, £120 with a receipt, if they stay ‘with a friend’ etc., then this would be reduced to £50 per night, for which no receipt would be required. All other second-home allowances must cease, they are an unnecessary expense. In terms of travel expenses, MP’s should follow similar rules to most private companies, flights under 4 hours, they must travel economy class, using the cheapest possible airline. Another very generous allowance is vehicle mileage, instead of MP’s maximising the benefits of this perk, the reimbursement should be limited to what the cost of a standard fare train ticket would cost for the same journey. In other words, if it costs £100 for a return ticket from Nottingham to London and the mileage allowance for using a car pays £260, the MP can only claim £100.

Unless or until members of parliament start to live and operate to the same standards that everyone else does, the public will continue to view  them with mistrust and scepticism. That is not in the interest of our democracy, nor is it in the longer term interests of our MP’s. Gordon Brown needs to stop protecting his cabinet colleagues and instead, start to ensure that they operate to the same rules and standard as ordinary members of the public. Because, in my view at least, there is little difference between failed bankers of publicly owned banks paying themselves bonuses out of public coffers and MP’s who have failed to protect the interests of the electorate claiming massive expense allowances, especially.  In all of these cases, the final bill is paid for by hard-pressed taxpayers. Gordon Brown needs to understand, that at a time, for example, when he is going to fail to meet his reduction in child poverty targets, his MP’s are filling their own pockets with the same money. How does he expect the general public to view such duplicity?

Posted in Farcical Regulations, General, Labour | Comments (0)

Mortgage Help, another case of say something, do nothing

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Mortgage Help, another case of say something, do nothing


Anyone that was struggling to pay their mortgages would probably have been heartened in December last year when Gordon Brown said that the government were to introduce a new scheme to help them. Gordon Brown’s announcement even managed to upstage the Queens Speech. To be fair, Gordon Brown did say that the Homeowner Mortgage Support Scheme would be available early in the new year, but a recent government update suggests that it will only be up and running in April. Surely this has got to be one of the cruelest things this government could do to people facing repossession? Does this man, Gordon Brown or New Labour have no sense of decency? In December, the government claimed that 8 mortgage lenders had signed up to the scheme, if true, why the subsequent delay, doesn’t this government understand the urgency of the situation for real people in trouble?

For a government that loves statistics, I wonder if they will have anyone calculate how many families will have lost their homes during the intervening period between the announcement and implementation of the new scheme? I very much doubt it somehow. People could have been forgiven for believing that the government, following the annoucement, had something ready for imminent launch. What was the rush for Gordon Brown, was he just chasing the headlines? It smacks of a cheap and wilful swipe at real people, in crisis…something that appears to have become the norm for New Labour.

To make matters worse, Cabinet Office minister Liam Byrne said the governments approach compared favourably to the Conservative Party’s “do nothing” approach. Is this guy on the same planet? Firstly the public are sick and tired of hearing government ministers and Labour MP’s constantly justifying their own failings by claiming that the Conservatives Party policy was to do nothing as if this was an acceptable excuse. Secondly, the Labour government appears to be incapable of understanding precisely how much they raise expectations when they make policy announcements and the level of disappointment felt by people when they find out that the reality doesn’t match up to the rhetoric.

Whilst I am not a great believer in government intervention, I do believe that if they make a commitment or promise, then they must deliver on it in timely manner and in accordance with the original announcement. That said, this government has rarely, if ever, lived up to any of its promises, it is time for a change and I suspect, the people that they are now disappointing, will be the very people that ensure they get it. I cannot wait for an election so that we can get rid of this incompetent, self-serving, spin loving, pathetic party and get on with repairing the damage they have cause and once again, get to the stage where we can call it Great Britain again. I suspect that it will take a long time to get things right, but at least we would have the comfort of knowing that a promise made, is one that they will do their damnedest to deliver.

Posted in General, Labour | Comments (1)

Gordon Brown continues to fail the British people

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Gordon Brown continues to fail the British people


How on earth do we stop this mad man that is Gordon Brown. Not only was he the architect of the financial system and regulation that lead us into this disastrous mess, but he is also the man that believes, he is more qualified than anyone else, to get us out of it. This deluded man is convinced that he bears no responsibility for what happened, even though everyone else knows differently. This vain man even seeks to lecture the leaders of other countries on what they must do to overcome the economic meltdown that is happening around our ears. This inept little man constantly tells the people of this country that the problems that have beset the United Kingdom are a direct result of economic and commercial mis-management in other countries, such as the United States. This incompetent man has the temerity to inform us that we are best placed to “weather the financial storm“. Yet he knows that this is not true and, that notwithstanding, no other economic expert agrees with his assessment. No doubt this could explain why it is that Gordon Brown has never told us why we are in a better position.

Gordon Brown, the unelected the prime minister of this country is a fool. He was a very poor Chancellor, arguably one of worst in our history. He has built on that well earned description by becoming one of the poorest, most incompetent prime ministers in recent times and there are plenty of former PM’s that could have been considered for that award. Any good leader would not assume that only he has all the answers and yet, Mr Brown constantly spouts on about the fact that he has the solutions and is best qualified to lead us out of this deep recession. A good leader would surround himself with knowledgeable people, not loyal soldiers, yes men and women, or business people seeking a knighthood or peerage for their ‘services’. Any good leader would know that a top team would always challenge the status quo, keep them on their toes, ensure that they don’t start to believe their own publicity, question, cajole and nudge. Any good leader would not be cowed by strong people around them, but instead, seek their counsel, listen, question and heed. But, Gordon Brown has clearly demonstrated that he is NOT a good leader.

Let’s consider a few other things;

Gordon Brown, as Chancellor, was the architect of the tripartite arrangement formed between the Treasury, the FSA and the Bank of England. Yet it was the failure and inadequacies of this system which allowed interest rates to be reduced so low that a housing boom was inevitable. Each party failed to respond to the experts that had argued the housing bubble was unsustainable and there was likely to be a crash. It was the failure of this system that allowed banks to grow at a rapid rate utilising funds raised on the money markets rather than the more traditional route of saver deposits. It was the failure of this system that allowed banks to package new mortgage backed securities that were then traded, but so complicated; few people understood them or the associated risks. It was the failure of this system that permitted banks to create a culture driven by greed, short-term profits and rewarded with massive bonuses. It was this system, which was set up to control, regulate and manage the City and the economy that ultimately failed on all fronts. The architect of this tripartite arrangement was Gordon Brown and he is ultimately responsible, instead, each party points the finger at another in the triangle. Not one party has had the humility or honesty to admit any form of responsibility.

Yet Gordon Brown’s incompetence is every where, for example; In spite of experts advising him of the risks, it was Gordon Brown that raided private sector pension funds. Perhaps in the belief that private sector pensions were the preserve of the rich, rather than millions of ordinary hard-working people. In doing so, he has raised around £175bn in tax revenues. But, at what cost? Roughly two thirds of (private sector) final salary pension schemes have been closed to new members, large company pension schemes have ended up with massive deficits. Pension schemes have collapsed and, of course, those within the private sector that have not been protected by employers pumping more money in will receive much smaller pensions. Meanwhile, Gordon Brown has done nothing about the public sector final salary pension schemes, the majority of which are not funded through an annuity, but out of future tax revenues. The latest estimates put the public sector pension liabilities at a staggering £1,071bn, that is correct, BILLION. As a consequence on the government’s inaction, the ‘average’ pension enjoyed by someone in the public sector is nearly 15 times higher than that of the private sector. Another blinder from the iron chancellor that was supposed to be Gordon Brown.

Here are a few other things that Gordon Brown either presided over, or influenced as part of the government machine;

  1. Introduced more stealth taxes than any other chancellor in history, equivalent to an extra 10p in the Pound on the basic rate of tax (source: Grant Thornton).
  2. Solld the UK’s gold reserves at the bottom of the market ignoring expert advice not to.
  3. Introduced ‘green taxes’ in the full and certain knowledge that any revenues gained were not destined to be invested in green initiatives. Yet another successful stealth tax to add to the collection. If you are starting to feel a little duped, then read on, I haven’t finished with Mr Brown yet!
  4. Successfully achieved the goal of becoming prime minister without going through the inconvenience of being elected by the people. This in spite of the fact that New Labour gained their substantial commons majority with 57% of the voters supporting another party. So much for the benefits of our First Past The Post electoral system.
  5. Was party to the sell out of the UK’s sovereignty to an unaccountable foreign ‘parliament’, in spite of a manifesto promise to allow the public to decide through a referendum.
  6. Destroyed the union and in the process, ensured that his countrymen received more money per head than those in England and Wales.
  7. Missed virtually every financial growth target announced in each successive budget without so much as a murmur from the press.
  8. Successfully managed to dupe the press into believing that he was an iron chancellor driven by prudence, when in fact he was a spendthrift.
  9. As the architect and driver of the revised PFI initiative originally proposed by the conservatives, saddled the country with a bill of £170bn which must be paid by 2032. Without having to include the figure as part of the public sector balance sheet.
  10. Managed to keep the £780bn public pensions deficit off the books, even though this is equivalent to over £30,000 per household and must be paid out of future tax receipts. Estimates of this deficit have now been increased to over £1trillion.
  11. Managed, without any consideration of the irony, to lecture people on their level of borrowings, whilst building up nearly £500bn of debt on the governments own ‘credit card’. If other recent liabilities are taken into account, this figure would rise substantially over £1trillion.
  12. Introduced and supported a complicated tax credit programme that has managed to lose £2bn every year through fraud and errors.
  13. Left the taxpayer saddled with £1.7bn of Metronet’s debt having been the person that pushed through the Private Public Partnership initiative for the London Underground.
  14. Managed to convince the public that local authorities were responsible for the doubling of council tax. Meanwhile he was actually placing responsibility for all additional services firmly with the local councils.
  15. Managed a real blinder, by camouflaging the inflation rate by changing the measurement from RPI to CPI.
  16. Underwritten £17bn of debt for Network Rail, without having to include it on the public balance sheet.
  17. Survived the embarrassment of claiming in March 2006 that 31,000 government employees had been trimmed off the payroll, whilst the Office for National Statistics claimed one month later, that the headcount had actually increased by 62,000 a difference of 93,000!
  18. Managed to introduce such a complex set of rules and regulations, designed to extract maximum tax take that the annual Finance Act (summary of tax changes in the budget) has increased from 300 pages or so in the 1980’s to over 10,000.
  19. At a time when businesses are struggling and people are having to tighten their belts, presided over a government that boasts some 78 acres of empty space in office buildings and grace and favour homes.
  20. Managed to push another 3.5m people into the higher income tax bracket, using a favoured trick of ‘fiscal drag’, where the tax threshold is raised more slowly than earnings are rising, so that workers end up paying a higher proportion of their income in tax.
  21. Twice shifted the timing of the ‘economic cycle’ in order that the so called “golden rule” would not be missed, resulting in a brazen massaging of the figures.
  22. Ensured that there are now twice as many tax collectors as there are nurses, demonstrating firmly where the government’s priorities lie.
  23. Masterfully convinced people that they are “better off under Labour” even though each family now pays more than £5,000 in extra tax, compared to 1997.

Then let’s take a look at how he has ‘fixed’ things, telling us how at least he was “doing something” as opposed to the Conservatives, who are, according to the supreme leader Mr Brown, the “do nothing party“.

He invested £billions of our money into the Royal Bank of Scotland, who are now expected to report a loss of £28bn. What level of due diligence was exercised before our money was invested into a bank with such massive liabilities? Now, we have a similar story with HBOS, here, losses have been reported at £11bn, same thing, did the government complete any due diligence prior to investing our money? I am not so worried about Lloyds TSB, they must answer to their shareholders, government and Gordon Brown must answer to the taxpayers.

Yet still more £billions of OUR money has been invested into the banking system by Gordon Brown, with the specific aim of easing lending to consumers and business as well as freeing up inter-bank lending. But this has come to nothing. Not satisfied with spending this money, yet more £billions has been pledged or spent on a bank ‘insurance scheme’ and, as is the nature of insurance, we can never truly know the extent of that commitment, other than the fact that with Gordon Brown’s track record, we know it will exceed all expectations. Over £1trillion has been spent or committed, for nothing, we have not been able to see ANY tangible benefit, in terms of what Mr Brown TOLD us we could expect.

In other words, he told us that our money was going to be used to achieve a specific objective or goal and nothing has happened. This time however, Gordon Brown has outdone himself, because nowhere in history, has a single politician spent so much money for so little, or more accurately, no return. Yet he is still there, grinning like a Cheshire cat and snarling at anyone who would dare question his actions. Anyone with an ounce of commonsense, for example, would have known that a 2.5% reduction in VAT would have little or no effect, set against a backdrop of high street retailers discounting up to 50% off the ticket price. But this arrogant little man went ahead, and as a consequence, he has wasted another £12.5bn or our money.

In the last week, much has been said about the fact that many of our most senior bankers have no relevant, professional qualifications. But ask yourself this, what qualifications has Gordon Brown got, (or did he have) that would qualify him to determine our economic future? None, zilch. He would normally be considered to have been qualified by experience, but just look above and you will see what his ‘experience’ leads to. The appointment of an inexperienced politician to the position of Chancellor of what was the 5th largest economy in the world, is akin to asking an engineering apprentice to act as Finance Director of BP.

But we are in a democracy; surely we don’t have to put up with this?

How naive we are as a people, we have been told we are in a democracy and we believed them. What type of democracy allows the coronation of a new prime minister, without any reference to the electorate? What type of democracy allows a party that received just 43% of the vote to have such a massive parliamentary majority? What type of democracy provides the PM with so much power, that he can spend or commit £1trillion without even referring the matter to a commons vote? What type of democracy allows its prime minister to continue damaging the country, its economy and its prospects without any way for the people to put a stop to it? What type of democracy allows a government to renege on a manifesto promise, without any form of recourse from the electorate?

What type of democracy allows a government to force through intrusive and overbearing legislation designed to spy on its own citizens, monitor their travel arrangements, emails, telephone calls, vehicle movements, medical records and share that information with another 780 government and private agencies? What type of democracy allows its government to shatter long held rights to privacy and liberty virtually unchallenged, to the detriment of the people? What type of democracy provides its people with no opportunity to impeach its leader if that person is considered to be acting against the interests of the majority? IT IS NOT A DEMOCRACY, it is an authoritarian dictatorship that serves the government of the time and not the people. We all need to catch a wake up, our whole parliamentary system needs a radical overhaul and members of parliament need to be reminded that they are supposed to serve the people, not themselves. If ever there was a case for the people of this country to have the power to push an eject button, this is it.

We, the people of this country need a way of bringing down a government or removing any minister that fails to act in our best interests, lies, or bullshits, not at a time that suits them, but when it suits us. Better still, we need to be ruled by people like us, not the self-serving, inward looking, expense grabbing, ego driven, twats that are currently lording it over us all. This description is not, of course, limited to the Labour Party, there are many people within other parties that simply do not give a toss about the electorate, other than once every 5 years or so when they would rely on our votes.

Posted in Big Brother, Civil Liberties, Conservatives, General, Labour, Lib Dems, World | Comments (23)

Government shirks responsibility for RBS bonuses

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Government shirks responsibility for RBS bonuses


Despite all the political grandstanding surrounding the proposed bonuses to be paid to RBS staff, there is little that can be done about it and the government knows it. Don’t get me wrong, I am completely against the payment of bonuses to staff when the very fact that they still have a job is down entirely to the intervention of the government with taxpayers funds.

However, the fact remains that the vast majority of the staff will have some form of contractual entitlement to a bonus; the senior bankers know this and so do government ministers. For example, it is estimated that some £500m is due to be paid to ABN Amro staff and this was a pre-condition of the original sale of the business to RBS. If senior managers don’t honour their employment contracts, then they could very quickly find themselves in breech of contract and you can rest assured that there will be a massive queue of lawyers offering to take up their cases.

Gordon Brown is reported to be “very angry“, well, bully for him,  what difference will his temper tantrum make? None! Treasury minister Yvette Cooper said any contractual or legal obligations on banks to pay bonuses at a time when they were making huge losses must be “challenged“. Yeah right Yvette, you know that there is little or nothing that can be done about it, which is why you squirmed so much when John Snow put some eminently reasonable to you on Channel 4 News last night. Alistair Darling is quoted as saying “I have spoken to the chief executive of RBS, and made it quite clear, and he agrees, that no-one associated with these huge losses should be allowed to walk away with large cash bonuses.” Quite right Mr Darling, but this is a legal issue, not a place for political rhetoric.

Even David Cameron demonstrates how out of touch he is by stating “As the principal shareholder, you are able to say what is and what is not acceptable.” True Mr Cameron and that is precisely the point, but you cannot do it retrospectively, if you had any business experience you would know that, unless of course, you are simply taking us all for fools.

The truth is this government rushed into “saving the banks from collapse” and in doing so, they left any commonsense back in the office. So keen were they to be seen as the saviors of the banking world, they did not complete any form of due diligence. I know that ministers and civil servants can often be accused of rank incompetence, but this goes off the scale. No experienced businessman and I mean not one, would blindly invest into a business, however urgent the need, without completing a full review of the business. As one contributor stated on one of my recent posts on the RBS fiasco;

Due Diligence is only half of the required formula for meeting the requirements under “Standard of Care” or “Due Care”. Due care is the second half of the diligence formula and equally as important. For without it, the standard of care can not be measured.

Performing Due Diligence identifies where investment risks or exposures lie, due care is exercising the requirements discovered under due diligence to protect or mitigate exposure from those risks.

Not only has the PM missed the first but importantly government has neither the resources, skills, or initiative to deal with the second which is what ultimately leads to failures.

In the normal course of events, due diligence would have uncovered that there were, amongst other things, contractual liabilities to pay bonuses; this would have included an estimate as to the likely cost. Had the government and its advisors acted with a reasonable level of care, arguably, this whole situation would have been avoided. Government could, for example, have included conditions which required staff to sign a waiver in relation to their bonuses. Alternatively, they could have been made redundant and re-employed on new contracts, the business after all was likely to collapse. Those that were expecting large bonuses, but had been party to significant losses, could have been warned that if they attempted to exercise there ‘bonus guarantees’ they could expect to be dismissed with immediate affect and could face a claim if they had acted recklessly or without a reasonable level of care.

I am not an employment lawyer, but I am convinced that there were (‘were‘ being the operative word), any number of imaginative ways in which government ministers could have avoided this massive kick in the teeth to hard pressed taxpayers if they had acted with foresight and were in receipt of legal advice. Instead, once again, the rank incompetence of government ministers has cost UK taxpayers £billions.

There have been justified cries for the bankers to pay back their bonuses and even suggestions, quite rightly in my opinion, that traders should be sued for bonuses paid on what have subsequently turned out to be ‘questionable or toxic’ investments. These are perfectly justifiable initiatives, but what about the government ministers, surely they are equally culpable? Leaving aside the issue of regulation and so on (pre-bust), government ministers ordered a massive injection of taxpayer cash into banks without fully understanding the liabilities and obligations therein. At best, it demonstrates incompetence of the highest order and at worst, that they do not appear, based on the evidence currently available, to have demonstrated a reasonable standard of care.

This current political grandstanding and rhetoric is nothing more than a smokescreen designed to divert attention from the incompetent management of the whole banking crisis by members of this government. New Labour ministers have proven themselves to be incapable of humility, unable to accept any form of personal responsibility and aggressive towards anyone who would question their intent. That is arrogance in its most basic and crude form, the people of this country must not let them get away with it, government ministers must be held to account and accept moral and legal responsibility for their actions. Anything less would be an outrage to the people that will have to pay the price over the coming decades.

Posted in Conservatives, General, Labour, Lib Dems, World | Comments (4)

Gordon Brown’s PMQ Depression comments

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Gordon Brown’s PMQ Depression comments


At prime minister’s question time, Gordon Brown told MPs: “We should agree as a world on a monetary and fiscal stimulus that will take the world out of r…, depression.” David Cameron did not immediately pick up on the use of this word, but when challenged later by George Osborne, the PM’s spokesperson said that it was a slip of the tongue.

Perhaps so, but it must have been on his mind, otherwise he would not have used such emotive terminology. Particularly given he had just finished lecturing Cameron on talking the economy down. It is however, precisely this sort of ‘slip’ that must give the people of this country cause for concern over Brown’s capacity and ability to see us through this downturn coming, as it does, hot on the heels of his ‘saving the world’ comment. When Gordon Brown makes errors like this, I cannot help but be reminded of Vince Cable’s comments referring to Brown as “Mr Bean”. Gordon Brown seems to go from one crisis to another in the spectre of a battering ram, rather than a well practiced, experienced politician. In my opinion, even his outbursts at PMQ’s are reminiscent of a spoilt child having a temper tantrum.

Little wonder then, that Gordon Brown has had problems, by his own admission, in getting Obama and the Indian Prime Minister to take his calls. Could this be because they are sick and tired of him lecturing them on economic fixes, when Gordon Brown and Labour Party policies have actually lead to the UK being in the worst position of any developed country to recover from this recession? From an outside observers perspective, I see Gordon Brown as a man of conviction, however, this appears to be offset by a man incapable of humilty, one that is unwilling to answer direct questions and a man who looks as if he will explode if anyone challenges him, so long as there are no members of the public or cameras present. Little wonder then that he appears to have surrounded himself with weak, self-obsessed people. Classic signs of a schoolyard bully.

In my view, Gordon Brown has few, if any redeeming features. I have never considered him to be a good chancellor, even when most of the newspapers, desperate for a scoop, kept pandering to him and what were the New Labour spin doctors. I also thought he would make an appalling prime minister, but in that respect, he has outdone himself, because I cannot find any adjective that could accurately describe his term…other than, perhaps, Mr Bean without the comedy. Time to go Gordon, do us all a favour!

In the meantime, David Cameron should prepare for office. By that I do not mean he must send all his friends details of his new address, I mean he needs to get some quality, experienced, heavyweight people behind him, ‘real’ people, not toffs or Oxbridge cast-off’s. Otherwise he will never shrug off the label ‘lightweight’ nor will he ever convince the people of this country that he knows what he is talking about. As I have said before, I believe that New Labour will lose the election, it will not be Cameron winning it, therefore, once in office Cameron must ensure that his key advisers and the people around him are ‘real’ people, because otherwise a man who has not experienced a recession, belt-tightening or poverty will find that whilst he may hold the office, he cannot claim to lead the people.

Which means that Cameron will just end up talking at us and continuing to use new phraseology that only he and his Conservative cronies fully understand.  Cameron has a real prospect of becoming PM, but I so hope he has the ability to understand that people will be voting New Labour out, his chance will come as a consequence of Labour’s failure, not his engaging personality, depth, sincerity or policies. It doesn’t really matter how he gets in, so long as Cameron listens, surrounds himself with people that will engage and challenge him, rather than blindly follow him. It is a strong leader, not a weak one, that is confident enough to surround himself with strong people and that is the BEST way to get rid of the lightweight tag.

Posted in Conservatives, General, Labour | Comments (6)

Politicians need a history lesson from 1929

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Politicians need a history lesson from 1929


Though I am no expert on the stock market crash of 1929 or the Great Depression that followed, what a pity that senior bankers and politicians did not study this subject and learn some of the lessons. There are so many parallels that it is uncanny and implies that people who should know better never learn their lessons.

In the run up to the Great Depression, ordinary people were allowed to purchase shares, whereas in the past it had been an exclusive club. In doing so, they increased demand and share prices started their relentless rise. This started to encourage more and more people to buy shares and, you’ve guessed it, the prices started to rise even further. The inexorable rise in share prices encouraged people to start to borrow in order that they could take advantage of the wealth creation that the stock market appeared to provide. The vast majority of these ordinary people had absolutely no idea how the stock market worked, it just looked like a one way bet. Brokers extended credit to share purchasers, in what became know as ‘margins’ whereby the purchaser could buy for example, $60,000 worth of shares, with just $6,000 of cash, the rest was borrowed.

The people of America felt rich, lifestyles improved after the austerity of the first world war and few people raised any doubts, those that did, such as President Hoover, tended to keep it to themselves, rather than be see as the Cassandra. Millions of people were encouraged to invest in the new gold rush that was the New York Stock Exchange, with little or no knowledge of the risks and inevitably with a ringing in their ears that you have to be ‘in it, to win it’. Banks and brokers stoked the money fever by extending loans secured on the shares. Inevitably the bubble burst, some were smart enough or lucky enough to get out before the crash, but they were few and far between. The vast majority of people lost all of their savings. There followed
the Great Depression, which lead to mass unemployment and affected virtually every corner of the world and it lasted 10 years. Some would argue that it also encouraged fascism and communism, if true, then it could well have been a precursor to the second world war.

If we exchange shares for houses, the parallels are uncanny. Many people have jumped on the housing bandwagon for fear of being left behind and a concern that if they were not a property owner, then they were nothing. In fact, there is some irony with that last statement because, as we all know, if you went to a bank and were a home owner, even if you owed £300k on your house, you were more likely to be able to secure another loan, than if you had no such liabilities because you rented. Somehow, owning a home had become the primary goal of a good proportion of the people of this country, actively encouraged by the banks. Loan to Value (LTV) ratios increased from around 75% to, in some cases, 125%. This implied that the banks felt that their investment was safe, because house prices would continue to rise, which meant that in a relatively short period of time, their risk would be covered by the rise in house prices.

If the banks felt that way, why would the buyers not? The ratios were also increased, allowing people to buy a house with multiples or 5 or 6 times their earnings, where previously this had typically been 2.5 times joint, or 3 times a single income. If that were not enough, many of the banks introduced ‘buy to let’ schemes, which allowed people with little or no money to build up a property portfolio in no time and of course, lead to an even greater demand for properties, leading to a further increase in house prices. So, everyone was making money, homeowners, the banks, mortgage companies, estate agents and of course, your friend and mine Gordon Brown, in the form of the Treasury.

After the 1929 stock market crash, Hoover introduced the Securities & Exchange commision to regulate US markets, this had the desired affect. However, over the past 20 years or so, the rules and regulations have been relaxed, seen as no longer necessary and much of what we witness in the United States today can be attributed to the easing of those regulations. Similarly, the much vaunted deregulation of the City was also a pre-cursor to the problems we all face today. Light regulation and a hand-off approach by government and the regulators has allowed the banks to enter very high risk transactions which many people struggle to understand. Yet, in doing so, they have clearly bet everything on it, presumably because they also though they couldn’t lose. Now, clearly all of us must take personal responsibility for our respective levels of borrowings, but easy money is difficult to refuse especially when it is being rammed down your throat on a daily basis, in the newspapers, on TV, in the shops and via direct mail campaigns.

However, when people hold senior positions, in banks, commerce and government, we could all be forgiven for believing that they are well read, experienced, shrewd and knowledgeable. In fact, we tend to take it for granted, how else would they have secured senior positions with such huge responsibilities? As chancellor, Gordon Brown in particular and the Labour government in general have let us down, their collective naivety lulled us all into a sense of false security, with Gordon Brown using the oft repeated mantra that his government policies would lead to an end of “Tory boom and bust”.

We can be forgiven for believing that a man in such a position would be best placed to know whether that was true or not, but instead, we have all come to realise, that politicians do not earn their position because of their knowledge, but instead, where they sit in the party. In other words, they learn on the job. Imagine placing a 10 year old in charge of a London bus if you will! Similarly, bankers have created new financial products, which are so complicated, that few, if any, could actually understand the risks associated with bundling mortgage securities. At best their actions could be described as reckless, but a far better description maybe of a desperate gambler playing for high stakes.

The regulators appear to have either been overwhelmed at the scale of these new securities or, more likely, unable to understand the complexities. As a consequence, those that were entrusted with our financial security, government ministers, regulators and banks, have seriously let the people of this country down, as well as shareholders, many of whom are you and I with pension funds invested in the stock market.

What is particularly galling is the fact that no-one wants to accept responsibility. On top of that, the same people that got us into this mess are, for the most part, still in the same positions. Asking us to believe that they have all the answers. Even though, had they studied their subject matter better and read up on the stock market crash of 1929 and the Great depression, many of the problems we are facing today could have been anticipated and perhaps even avoided. Governments around the world want us to believe that their solutions will work, but how do they really know, what confidence can we have in their solutions? They are spending £trillions on propping up banks, business and economies, but all of this money is borrowed, have they learnt nothing?

The rest of us are having to tighten our belts, but our governments are spending our money in what appears to be a last throw of the dice. They are all frightened of another depression, aren’t we all, but sometimes it is necessary for a period of reflection, instead, governments around the world appear to be thrashing around, panicking in a last throw of the dice. We all find ourselves asking where will it all end, not when?

We must all learn lessons from this. But one fundamental lesson is that no member of parliament should be allowed to take up a position unless they have prior experience. For example, no current cabinet minister has ever run their own business, so what do they know of the problems being faced by business people? When was the last time that an experienced person was placed in charge of the second largest employer in the world, the National Health Service? Take a look at Miliband, he is wet behind the ears, lacks depth and credibility, he may be ‘smooth’ but he does not look like someone that is well read. In fact, he even managed to offend the Indian government on his last visit, are these the sort of people we want to be representing us on the world stage? What of Jacqui Smith, she finds it difficult to string a sentence together has allowed the police and other agencies to trample all over our civil liberties and lacks any obvious gravitas? Little wonder that we are in a mess.

In my view, government ministers and bankers must be called to account because they have demonstrated what appears to be a reckless disregard for the interests, respectively of the people of this country and the interests of their shareholders.

It is a time for change and this must include a look at how or on what basis members of parliament are given key cabinet posts. In no other business or industry I know of do people with little or no experience get elevated to such senior positions based on nothing other than a handshake. Never again should the people of this country be lead by donkeys. We will come out the other side, most likely in spite of this government intervention rather than because of them, but when we do, the people’s voice must be heard. We must demand change.

Posted in Featured, General, Labour, World | Comments (13)

Open letter to Gordon ‘Blank Cheque’ Brown

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Open letter to Gordon ‘Blank Cheque’ Brown


During yesterday’s press conference to announce the latest banking bailout you demonstrated your true colours. When asked by a reporter if you were offering the banks a “blank cheque”, you turned on him saying that he needs to be careful about what he was accusing you of. I don’t know about the reporter, but I felt your response was menacing, bordering on threatening. Just who the hell do you think you are? Whilst you may surround yourself with yes men and women, the public of this country have to rely on reporters and the odd MP to ask searching questions.

The bottom line is you have offered a blank cheque. Please feel free to threaten me, because I will not be intimidated with your schoolyard bully antics, which can serve only to demonstrate that you are a weak or a vain man. Lets look at the accusation that you are issuing a blank cheque. You have refused to put a number on the cost of the banking insurance scheme, which implies that you don’t know the cost. This smacks of a blank cheque, furthermore, if you are not even prepared to put an upper limit on the exposure, this is another clear indication that you are providing the banks with a blank cheque. So blank cheque it is, if it look like a dog, barks like a dog etc, etc…

The truth is, when the original banking bailout was conceived, insufficient thought was given to it, instead a huge amount of taxpayers money was thrown at the problem and it has had little or no affect. Banks are not lending to each other and the high street banks have not significantly increased their lending to consumers or businesses. All the £37bn has achieved is, that it has allowed ailing banks to shore up their balance sheets. In other words, it was a complete and utter failure. In addition, the advisers that your government appointed, clearly failed to identify the extent of the questionable or ‘toxic’ debt within the banks that you invested our money in. That is hardly the sign of a competent government or leader.

What I find most galling is your abject failure to admit any responsibility for something that happened on your watch, principally as Chancellor and subsequently as Prime Minister. What you need Mr Brown, is more people around you that tell you how it is, not people that continually blow hot air up your backside. If you surround yourself by people that keep telling you, at least to your face, that you are brilliant, then there is an inherent risk that you start to believe them. Well let me put you straight Mr Brown. In my view, you were the most inept Chancellor in history, you knew that the entire economy was being driven by cheap and plentiful credit, in part because of historically low interest rates and more specifically because of the boom in house prices, allowing people to release and spend their equity. Some would call it fools gold. But, the bottom line is, many, many warnings were being given by economists and the like that the bubble would burst. You ignored them and we are now paying the price.

Granted Mr Brown, the housing crisis started in the United States, but as you well know, if we ourselves had not had an unsustainable housing boom, we would not have been so badly affected as we were. Remember, you were the one that promised and end to ‘boom and bust’, how hollow those words are now. Remember also, that you have claimed all of the credit for the so called boom years, but did you put anything aside for a rainy day, no you did not. Instead, you went on a massive spending and borrowing spree. For example, in spite of the fact that you increased employers and employees national insurance contributions by 1%, ostensibly to allow further investment into the national health service, you then used PFI to finance the building of hospitals, regardless of cost to the taxpayer. For example, to build a new hospital would normally cost around £60m, using PFI, the cost over 30 years in £300m. Little wonder that PFI contracts were traded on the open market with £millions being made on each trade.

Each time I hear you say that you are acting in the best interests of the public it makes me cringe. In my view, if you were as honest and sincere as you would have us believe, you would step aside and let this country decide who they want to lead us out of this enormous mess. You have made massive mistakes and ignored many warning signs, instead of taking appropriate, if unpopular decisions at a time that they would have made a difference, you ignored them in favour of the Labour Party’s populist approach. Don’t you dare try and tell us you didn’t see the warning signs, it was your bloody job, some of the people of this country placed a great deal of trust in you and you let us all down. You may be angry with the banks for embarrassing you, but trust me Mr Brown, we are very, very angry with you.

The last banking bailout may have prevented the banks from collapsing, but, for all intents and purposes, it failed on every other measure. Moreover, the recent report that your advisers failed to identify a potential £2,5bn write-off of a debt until recently is shameful. This should have been evident before you spent our money investing in a bank that is expected to report losses of up to £28bn. What happened to due diligence and warranties? Your current plans appear piecemeal and with respect Mr Brown, the whole thing smacks of a desperate man placing the last of his money on a horse in the vain hope that he can win big. Shit or bust as my father used to say! But, of course, it is not your money, it is ours and most of us, thank god, are not high stakes gamblers. If you cannot tell us how much it is going to cost, how can you claim that your response is measured? If the previous bailout failed, how can you convince us that this one will not follow suit?

The fact is Mr Brown, you lack credibility, if you fail to achieve your objectives, you simply move the goal posts, when asked a difficult but relevant question, you bluster, ignore them, or once again, refer to what the Conservatives have done in the past, ignoring the fact that we have heard it all before and they haven’t been in power for 12 years! Your party is a spent force and if I may be so bold Mr Brown, I was perhaps one of the few people that never believed you had the ability or nous to be a good chancellor, oh how I wish I had been wrong.

Your reputation for prudence Mr Brown is in tatters, your credibility as a prime minister has been in question almost from the outset and your ability to lead us out of this mess is simply too far fetched to imagine. So please do the decent thing and step aside. Let the people of this country decide who is best to lead us out of this financial mess. We deserve no less!

Posted in General, Labour | Comments (2)

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