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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)

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