Newold labour pains

Deciding on a new leader for the Funny Party's taking a bit of time, isn't it? Surely they can't be happy with Barking Harriet, even if she is only a "temp"…

STW Red Pets not rising to the fly today. 😕

Well, it's a bit crass even by your demanding standards. 🙂

found it!

Didn't they set out the timetable for this when Gordon the Great stepped aside? Announcement due at autumn conference IIRC. Poor trolling sir!

They have rules about leadership elections and within these rules have decided to take some time to make the right decisions.

There is no hurry – It will take a year for the condems to implode.

My vote is for ………………………

yeah whats the rush

itll be a good few months before the condem budget plunges the country into a 90sjapan like recession

WTF is it with Labour supporters who think that Gordon Brown was Gods gift to the UK economy. Unfortunately, I don't think the Cons will do a better job but they couldn't do worse!

WTF is it with some people that they think that the worldwide economic recession that started in america, affected all countries, many worse than ours, was due solely to Gordons fault?
I assume that this simple explantion is for simple folk ❓

Could you explain to me how reigning in budgets, reducing demand, redundnacies and increasing taxes helps the recovery along?

I think you will find that in fact they can do much worse than labour

Shakey – 'cos it was the truth?

Only history will give us a reliable indication but the fact that his policies were not to blame for the recession but instead mitigated it is widely accepted worldwide. After all most countries followed his lead in "quantitative easing"

Remeber there is a huge bias towards the tories in the press. its the big lie technique

You will see when we are pushed into a deep long lasting and really damaging slump buy the present showers idiotic policies.

mark my words – back into recession in a few months – another million at least on the dole.

I believe the Conservatives got us out of the last mess that Labour created. Oh and I suppose that you agree with constant borrowing at Labour's intended rate which eventually needs to be paid back before the countries we borrow from decide we are a bigger risk than they thought ❓

How old are you shakey – do you remember the dreadful damage done in the 80s to the fabric of this country? Wound that will never heal.

The waste of the north sea oil money on paying people to do nothing? The deregulation of the banks which was one of the causes of the recent recession?

double digit interest rates? deep and prolonged recession. Twice the unemployment we have now?

Old enough to know better probably!

Just want to know why you think that the last Labour government had nothing to do with the recession we are in now and why it was the previous Tory governments fault.

shakey the torries ended the last recession by……..

selling off our utilities, train companies…. now the most expensive in europe
bringing the nhs to its knees….. a large chunk of greedy labours spending has been in rebuilding this
coming up with the idea of pension holidays ……cheers lawson thats worked out great
selling off all the council houses…..launching our insane property boom
turning us into a financial services economy…… so now our economy is utterly dependant on the global casino that is the stock market
oh and what really did it was north sea oil……and it was wilson who got the yanks to come and look for it in earnest we didnt have the knowhow

granted nulabour failed utterly to address many of these issues (apart from the nhs), instead choosing to embrace them further

to believe that the torries have some kind of financial magical wand is very naive

to believe that the tories have some kind of financial magical wand is very naive

I said that I didn't think the Conservatives would do any better although I am not holding my breath for the impending financial meltdown!

Also, the continued borrowing was not sustainable!

The deregulation of the banks which was one of the causes of the recent recession?

"And I will be honest with you, Many who advised me , including not a few newspapers, favoured a regulatory crackdown… I believe that we were right not to go down that road"

Comrade Brown – Mansion House speech June 2006.

No one is arguing that spending more than you get is a good idea FOR EVER. I am just saying that this response is the worst idea and the greater of two evils. Less money in the economy means less demand to buy things which means less people needed to make things which means unemployment which means less money in the economy and the cycle contniues. Only the govt can spend money/sustain demand in the current climate private finance is not waiting to ride in and rescue us from this pickle whatever Dave and Gideon say/belief. Most other countries are not doing this time will let us know whether D & G were right and everyone else wrong. I see little reason to suggest we will not have a sustained period of recession as a result of this . Even the police are going to loose staff and 25 % cuts to public sector will have a huge effect on this country and unemployment

The deregulation of the banks which was one of the causes of the recent recession?

"And I will be honest with you, Many who advised me , including not a few newspapers, favoured a regulatory crackdown… I believe that we were right not to go down that road"

**** me!! How many times do we have to cover this??????

Now then lest get it straight. The deregulation of the banks was called the Big Bang and happened during Thatchers presidency…. The re-regulation including the introdcution of the FSA was down to GB. He has admitted that with hindsight he should have done more in that respect, but was persuaded that to do so would export the Financial Industry to less regulatory states. That is why his success at persuading the G20 governments to act in one accord currently is so significant to the long term prospects of this country.

Now then you are entitled to think he's a cock, but try and get your facts straight will yer?? Incidentally while you are at it, try asking yer tory boy mates what they would have done other than bailing the banks out to stem the international crisis??

Also try asking yourself why no one is moaning about hospital waiting lists any more. Remember one mans 25% cuts is another mans child being taught to eat Turkey Twizzlers and we wouldn't want to go there again now would we?

one mans 25% cuts is another mans child being taught to eat Turkey Twizzlers

"I wish I had said that!"

"You will, Oscar, you will…"

🙂

If you want people to straighten out their facts, it would probably make sense to have a look at yours first. “Big Bang” abolished the distinct between jobbers (market makers) and stockbrokers (who only acted as agents) on the Stock Exchange and also removed the restrictions on ownership of them. Its primary consequence was to massively increase competition and thus decrease the cost of trading in shares. Were the equity markets responsible for the credit crunch – no, that would be the debt markets. So Big Bang is a complete irrelevance, as the activities that brought about the credit crunch would likely have been able to be carried out by banks before it as they were debt market activities (some of them did not exist so it is impossible to be certain). At the same time, the Tories introduced a regulatory framework to regulate the new entrants to the equity market as well as other areas under the Securities and Investment Board. The SIB was essentially transferred into the FSA in 2000. Banks at the time were regulated by the Bank of England. Therefore it is also wrong to say that the formation of the FSA reintroduced regulation, it just centralised it under one roof.

The three primary criticisms of Brown and his involvement in the creation of the present financial mess are:

(1) He continually broke his own golden rule to balance the budget over the economic cycle, the deficit was getting wider and wider when it should have been running a surplus. Hence we have very high national debt and considerably more than most European countries. As a result, it is not a no brainer to continue spend because it would risk a debt crisis.
(2) He transferred regulation away from the Bank of England to the FSA. The advantage of the Bank of England being a regulator is that through their wholesale market activities, they are aware of the markets conditions. If they had known the financial position of the banks as well (through regulation), they would arguably have been in a better position to identify the risks being run and therefore ensured they were reduced.
(3) Finally, he adopted a fiscal stance that made debt a far more attractive form of finance to equity because he abolished the tax credit thus exacerbating the UK high debt levels (and also causing significant funding losses to pension funds).

1. The surplus was rerosded by the need to invest in public services ruines by the previous Tory govt – notice a patern? You cannot really want to argue the NHS and public services these days are better than under the last Tory Govt can you? As only the Tories proposed this at election and bot Lab and LIbs opposed budget cuts this year it is not true to call it a no brainer and perhaps driven by ideology that wants a smaller state ?
2.As you accept it is arguable so you accept it is a weak hypothetical argument.
3. The economics is beyond my A level from the 80's 😳

Comrade Brown – Mansion House speech June 2006.

That's what I love. Right-wing tory boy still ignoring the fact that it was Browns continuation of Tory policy that worsened the situation. Comrade indeed. 😉

So Big Bang is a complete irrelevance

Not at all. It was merely the beginning of what would become the widespread de-regulation of the financial sector. Every journey begins with a single step.

Junkyard – 1. But he didn't say that he was publicly preaching prudence but not practising it, that is what I find so reprehensible. Darling was much sounder in this respect.
2. I could have gone on to say how politicised the FSA became to such an extent it concentrated most of it efforts on box ticking money laundering regulation to support the anti terror effort. It really is a completely useless organisation which does not understand its own rules. In my experience regulation was much more effective before it was created.

El bent – If you read my post closely, you will note that the Tories introduced a new framework this actually introduced regulation to previously unregulated areas such as the Eurobond market so it is not right to say it was only deregulation. The deregulation of Big Bang was really just the abolition of a cartel.

"Hence we have very high national debt and considerably more than most European countries."

But not higher than Germany, Portugal, France, Belgium, Greece, and Italy.

"it is not a no brainer to continue spend because it would risk a debt crisis."

Spending does not necessarily mean debt. And debt does not necessarily mean crisis. Owing several times your annual salary for the house you live in, does not automatically constitute a crises, although loosing your job probably would.

The US certainly has no problem with continuing the economic stimulus measures, and has strongly argued against Britain and Germany withdrawing theirs prematurely. Despite the fact that it will push up US debt to above that of Britain's :

"Lower tax revenues and higher federal spending to fight the recession will boost the federal debt to 62% of the nation's total overall economic output by the end of the year, the highest percentage since just after World War II, the Congressional Budget Office predicted Wednesday.

In a report released Wednesday morning about the long-term budget outlook, CBO also predicted that the debt would reach 87% of the U.S. gross domestic product by 2020 if tax cuts enacted during George W. Bush's presidency are extended."

http://www.marketwatch.com/story/us-debt-to-reach-62-of-gdp-by-year-end-cbo-2010-06-30-105100?reflink=MW_news_stmp

EL – Re levels of debt I stand corrected, the issue still stands because we have a higher financing requirement because we do have the highest deficit (other than Greece). If the Bank withdraws your mortgage, you have a problem as well (admittedly they generally can't). This is one saving grace of our government debt programme as we tend to have longer maturities than our European counterparts.

The risk of a debt crisis is not necessarily who has the best figures, it is who the market perceives are having the least sustainable finances. This is take into account technical factors as well as just the raw public finance data. Hence the fact that the US dollar is the world's reserve currency provides it with a very large central bank investor base, it is therefore easier for it to finance high debt levels. Japan which has been downgraded is largely internally financed so the downgrade has limited cost. We have neither of these advantages and are at present perceived as having a weak position when compared to France and Germany. Of course, a full blown Euro crisis may change everything all over again.

Of course you could increase taxes, but this generally has an impact on economic growth so may not raise enough and therefore lead to no improvement in the finances.

you could increase taxes, but this generally has an impact on economic growth

I'm glad you said that. Increasing the level of taxation during a period of negative or very little growth, therefore doesn't sound like a wise option at all. So why then, has Cameron bumped up the level of VAT to 20% ? I'm sure we can both agree Brown would never have done that.

And btw it wasn't just New Labour who were opposed to VAT increases, just about everyone else was, including the leader of the LibDems :

"Our plans do not require a rise in VAT. The Tory plans do." Nick Clegg 8th April 2010

Of course we now know that Nick Clegg was offered a deal after the general election which simply required him to ditch his strongly held beliefs – so he now argues strongly in favour of 20% VAT.

But if you were going to maintain spending levels you would have to raise taxes a lot more (and the VAT increase pays partially for the increase in personal allowances which was a tax reduction favoured by the LibDems). No idea what Brown would have done, he did not have the courtesy to let anyone know, but they did not rule out an increase in VAT when pressed.

Yes I think most people agree that raising taxes would eventually be necessary (except maybe the tax-cutting Tories ?!!) and there needs to be a long term goal of dealing with deficit. But firstly right now isn't the time to take away economic stimulus measures – the economy really isn't that healthy. And secondly taxation isn't the only way for the government to claw money back. Although it might be if you have, in the words of a former Tory PM, "sold off the family silver". But that could be resolved. BTW, the clue in what Brown would do with VAT during a period of poor economic performance lies in what he did do when in power during a recession – he preferred to cut VAT rather than increase it, only putting it back to it's pre-recession level after the economy had shown some tiny signs of growth (not something I approve of though – VAT was way too high at 15% imo) which suggests that his views on VAT in relation to a sluggish economy are pretty clear.

Oh and I suppose that you agree with constant borrowing at Labour's intended rate which eventually needs to be paid back before the countries we borrow from decide we are a bigger risk than they thought

Can someone turn this into an intelligible sentence for me? Ta.

You have to remember Cameron is a PR man – you're being spun and more learned people than I are suggesting the cuts are 90% naked ideology.

The debt is not as big as he makes out (not to say it isn't big, just not as big as he keeps saying).

That left wing rag the Wall Street Post is questioning why he is making the level of cuts he is.

Deficit as a percentage of GDP will always go up as GDP goes down in a recession.

Britain (pre ConDem alliance) was forecast to have the highest growth of any G20 country save Canada next year – I think that was the IMF. Let's see if it does post cuts.

Another 1.3 million people on the employment scrap heap will lead to benfits costs going up significantly and the social unrest that will follow will see insurance premiums rise both on property insurance and mortgage premium insurance.

I remember the 1980s well. It was a very dark time. One reason I've always regarded employment as a way of paying the bills, not as a "follow your dreams" vocation. I've chosen a career where I can make decent money, I stand out as very employable and hopefully it's pretty stable (hope I'm not eating my words on this next week). The concept of fun and fulfilling work never came into it – provision of beer and mountain bike parts did. Strangely I do actually enjoy my job, but that was never why I chose it.

My advice? Be prepared to be really single minded about knowing when and where the next pay check is coming from. That was the story of the 1980s.

Oh and Labour would also have cut and raised taxes – the only question is the degree of those actions.

The Government has laid out a strategy to cut the structural deficit over a five year term, this involves tax increases to make up between 20 -25% and cuts in spending of 80%-75%. They are also cutting straight away because they argue that we would risk a debt crisis otherwise. From what little the Labour party has said it would appear that they would have cut later, slightly less and would have had a higher ratio of tax rises to spending cuts. How they would have achieved this, they choose not to say. This is one of the privileges of opposition. The actual differences are not that great. Both are perfectly respectable positions depending upon what you regard as the greatest risks to economy, I am highly unlikely to persuade you to change your view and vice versa.

Now dealing with a few specific points:

(1) The Government has actually taken “spin” out of economic forecasting because they have set up an independent forecasting unit.
(2) The IMF report actually forecast greater growth for the US and equivalent growth for Japan. Their forecasts were lower than those of the previous Government – take from that what you want.
(3) 90% of newspaper columnists are paid to sell newspapers.
(4) EU law requires that the standard rate of VAT must be 15% or more so it can’t be reduced below that under existing law.

The main reason that I posted was that I do get annoyed by the assertion that the economic crisis and its consequent effects were completely outside the control of previous government and they had no role. I think this is disingenuous for the reasons stated in earlier posts.

If you want people to straighten out their facts, it would probably make sense to have a look at yours first.

Mefty, I think it would be fair to say that I don't need to respond to that as subsequent posts have done so admirably. For what its worth, the Big Bang originally was a reference to taking stockbroking away from physical trading floors and onto electronic screens. However, subsequently it became the catch all phrase for Thatchers De-regulation of the finacial institutions, which was supposed to lead to "loadsamoney" for all of us.

I have nothing to say on the rights and wrongs of that, other than to say that to accuse Brown of doing it is what is actually disingenuous, he clearly did not. Whether he may have done if in power is another question, which does not alter that fact that it wasn't him. He did try to reregulate, rather inadequately, but he did not de-regulate the banking system in any meaningful way by comparision with Thatchers lot.

Hopefully history will teach us which was right and which was wrong in their approach, but sadly it didn't teach us sufficiently well the last time!

im pretty sure that 25% of the governments money saving come from a rise in manufacturing and exports over the next 3 years

which is ambitious to the point of stupid?

oh kimbers you faithless lefty zealot.
Come on we are all in this together do you really not believe that 1.3 million provate sector jobs will appear to offset the loss of 600,000 public sector workers….do you really find that hard to believe 😉

bb – I have never regarded it as a catch all phrase for financial deregulation and I have never known anyone used it that way. My description above was accurate but you are right to say that it allowed screen based trading as well through SEAQ, albeit there continued to be some floor trading after Big Bang for a few years. The big "deregulation" under the Thatcher government was the abolition of exchange controls which happened years before Big Bang. The other changes were more complex as there was some deregulation and some regulation as I have pointed out earlier.

Having worked in the City throughout the period in question, I do not recognise that there was any re-regulation under the Labour government, as I said earlier. There was transfer of all regulatory functions to one body, the FSA, and there was a change in emphasis in regulation to a more codified system. My experience as someone who was paid to understand the system was that it was easier to find ways round the rules after the creation of the FSA than before so I think its creation weakened the quality of regulation. I also think the removal of regulation of banks from the Bank of England lost the regulatory system important market information. So in conclusion, I think the changes that Labour made to the system weakened it and contributed to the financial position that some banks were allowed to get into. I don't believe it is the only thing to blame by any means, but I do believe it was a contributory factor.

Kimbers – you may be sure but you are wrong, 25% of the growth forecast comes from a growth of exports over imports (i.e a reduction in the current account deficit) – not the savings. You need to read the Red Book paragraph c.18 onwards on the treasury website for chapter and verse.

bb – I have never regarded it as a catch all phrase for financial deregulation and I have never known anyone used it that way.

In which case you need to get out more frankly!

Its not a big issue, but heres a few random examples of its use in that way in the national press for you.

The Guardian
The Times
The mirror[/url]
The Telegraph

Like I said Thatchers lot de-regulated. Brown re-regulated ineffectively with hindsight.

From your linked Guardian article

What was interesting was the number of authoritative players last night who argued that virtually all of what had taken place would have happened anyway and that Big Bang, a phrase coined by a journalist, Kenneth Fleet, was really a bit of a sideshow.

That is exactly the point I was trying to make i.e. Big Bang was a red herring and the development of the City would have happened anyway and was not caused by changes in the regulatory framework. Although the abolition of exchange controls was critical.

"From what little the Labour party has said it would appear that they would have cut later"

New Labour were very clear in what they said concerning spending cuts. From the Labour Party manifesto 2010 :

Labour believes we must not put the recovery at risk by reckless cuts to public spending this year……….We will not cut spending this year, but instead support the economy to ensure recovery is established……….. We are sticking to our spending plans this year so that support for families and businesses remains as we secure the recovery. But from 2011-12, as growth takes hold, spending will be tighter.

And btw, that position was shared by most other parties which contested the general election, including the nationalist parties and the Liberal Democrats. From the Liberal Democrat manifesto 2010 :

We must ensure the timing is right. If spending is cut too soon, it would undermine the much-needed recovery and cost jobs. We will base the timing of cuts on an objective assessment of economic conditions, not political dogma. Our working assumption is that the economy will be in a stable enough condition to bear cuts from the beginning of 2011–12.

It was only a minority of the electorate who voted for a political party committed to immediate cuts……….but they got immediate cuts anyway.

I agree though with your comment that "the actual differences are not that great". All three main parties are neo-liberal Thatcherite parties who despite everything which has happened, are committed to non-intervention and the "market always knows best" bollox. For that reason all three believe in governments spending cuts – sooner or later. I don't.

.

"The Government has actually taken “spin” out of economic forecasting because they have set up an independent forecasting unit."

Well there's certainly plenty of government spin as far as the economy is concerned. And very successful it is too. Improbably as it might seem, many people actually believe that the Tories genuinely care about the health of the economy – that they are motivated by powerful patriotic and altruistic feelings. Obviously they are not – their only motivation is to make large amounts of money and remain rich.

As an example few people would argue that two indispensable characteristics of a healthy economy are, full employment, or at least very low unemployment, and high wages. And yet it is hard to imagine two things more guaranteed to terrify the Tories, than full employment/very low unemployment and high wages.

The Tories aim for high unemployment, although of course they don't admit it, well apart from that famous occasion when Norman Lamont let the cat out of the bag, and low wages. They quite frankly couldn't give a monkeys about the state of the economy, as long as wages are low and unemployment/profits are high.

Being a Tory MP isn't one of the "Caring Professions" you know.

.

"The main reason that I posted was that I do get annoyed ………"

Really ? 😀

Mefty, to quote myself…..

Whether he may have done if in power is another question, which does not alter that fact that it wasn't him

and to quote you….

the development of the City would have happened anyway and was not caused by changes in the regulatory framework. Although the abolition of exchange controls was critical.

Either changes in regulation didn't cause anything or they did. This quote simply displays how flawed and contra-DICK-TORY your argument is. (Sorry cheap shot, but couldn't resist it 🙂 .

My only point through all of this is that GB did not deregulate the banks, that was substansively done by the preceding Tory governments. How about you just accept that the truth is, regardless of how you duck and dive around it, still the truth?

I have to go as I'm off somewhere for a few days, so don't consider a lack of response on my part as acquiesence with your arguments…it won't be.