David Cameron makes emergency statement to Conference

Highlights, not verbatim:

11.06: We are seeing a difficult end to the decade of debt.

11.07: Tomorrow in my speech I will set out what we must do in order to put the economy right.

11.08: People are understandably angry at the bankers who paid themselves too much and are now turning to the taxpayer for help.  but today is not a day for reckoning - that will come. Today is a day for reassurance and safety and protection.

11.09: The Conservative Party is not captive to big business.  We must not use this crisis to bury the free enterprise system but to reform it.  We believe in free enterprise and we understand it.  But these discussions are for another day.  Today is a day for protecting the financial system.

11.12: Britain may need to marshall public support for our financial system in the same way the USA has begun to do.  The political wrangling that has taken place in America must not happen here.  The Conservative Party is willing to work with our political opponents to do what is necessary for financial stability.

11.12: We will drop objections to who triggers the Bank of England process to rescue failing banks in order to ensure swift passage of the legislation.

On GMTV earlier today Mr Cameron described the US House of Representatives' rejection of the bailout as "very worrying".

[George Osborne is travelling to London today for talks with Alistair Darling].

Noon: PDF of full statement.

Comments

[Rightwingery]

Pretty much all the poor guy can do. Gordon Brown, who has created this crisis (or at least contributed towards our lack of an ability to mitigate it), is the only one profiting from what is happening.

DC should be bolder in his criticism of the system but MUST look statesmanlike in how he approaches the ramifications of what is happening.

Tomorrow's speech is extremely important

[Adam]

I listened to the speech and got the impression that Cameron has only now realised that events are overtaking him vey quickly and that he has actually been looking like a novice when responding to the financial crisis - which of course is playing into Brown's hands very nicely. A few days ago both he and Osborne were saying that governments shouldn't intervene in the banking crisis - now they are urging the US politicians to approve the bail out plan and are prepared to support any measures put forward by Brown which is a full u-turn. Better late than never!

[Dominic]

It appears to me that DC is trying to be to accommodating with Labour and to be too conciliatory with these incompetent wretches that have been to blame for our financial demise It will not wash with the general public.
Please get some steel and go for the jugular at every opportunity on interviews as the media led by the BBC want to keep Gordon and his scurvy chums in office.
On ITV this morning Phiona Phillips let Yvette Cooper state that Labour inherited a bad economy unopposed and sitting on the same couch other mornings is Drapers Wife.
When are the Conservatives going to be more aggressive with the media in general and stop these cretins guiding the interview with the aim of putting the Conservative down?

[Dominic]

It appears to me that DC is trying to be to accommodating with Labour and to be too conciliatory with these incompetent wretches that have been to blame for our financial demise will not wash with the general public.
Please get some steel and go for the jugular at every opportunity on interviews as the media led by the BBC wont to keep Gordon and his scurvy chums in office.
On ITV this morning Phiona Phillips let Yvette Cooper state that Labour inherited a bad economy unopposed and sitting on the same couch other mornings is Drapers Wife.
When are the Conservatives going to be more aggressive with the media in general and stop these cretins guiding the interview with the aim of putting the Conservative down?

[Common Sense]

"Adam" - you are Derek Draper and I claim my £5.

[Paul D]

All pretty much as expected

He did a far better job of bipartisanship than Mrs Balls' offering on the fivelive breakfast show

[Dorian Englandism]

Looking on the upside of global economic meltdown (and if anyone feels a conspiracy theory coming on):

China

Not too useful being the workshop of the world in no one wants to buy your increasingly expensive mass production. Predict large scale unemployment, shattered expectations and a cycle of violent social unrest and state clampdown. And no 21st century superpower.

Global Warming.

Or not. Why continue to shoot ourselves in the economic kneecaps if the icecaps are going to be 'saved' by economic downturn and severely decreased consumption and hence production?

Cameron is right to offer cross-party cooperation in the face of the strategic implications of this potential global depression.

[Adam]

Common sense needs lots of it!!

[Edward]

""Adam" - you are Derek Draper and I claim my £5."

Damn - beaten to it!

[passing leftie]

Government debt as a percentage of GDP INCLUDING PFI:

1996 51.3%
1997 49.8%
1998 46.7%
1999 43.7%
2000 41.0%
2001 37.7%
2002 37.5%
2003 38.7%
2004 40.4%
2005 42.1%
2006 43.1%
2007 43.8%

Source: Eurostat

Now debt this year will be higher, as you would expect with nationalised banks on the books, but it hasn't nearly reached the levels it did under the Tories and is low in comparison to other developed nations.

[Freddie Fencepost]

We are all SOCIALISTS now!

Capitalism has run aground!

Altogether now...

The people's flag is deepest red,
It shrouded oft our martyr'd dead
And ere their limbs grew stiff and cold,
Their hearts' blood dyed its ev'ry fold.
Then raise the scarlet standard high,
Within its shade we'll live and die,
Though cowards flinch and traitors sneer,
We'll keep the red flag flying here

[Joe James B]

Passing leftie, I think the PSBR, in percentage terms, could actually be the largest ever recorded at the time of the next General Election.
Public finances can deteriorate very fast.

[Mark Hudson]

Joe James B, fair point. I think the really disappointing fact is that if you look even back to 1970, the % has been depressingly high under governments of all colours.

[Cleethorpes Rock]

The years up to 2000 were run according to Ken Clarke's Conservative spending plans. The amount of debt then dropped for 2 years, but has been on the increase ever since. I dread to think what it will be next year.

Gordon Brown certainly does have experience of running an economy, but then Harold Shipman had experience of running a Doctor's surgery.

[Rod Sellers]

Why on earth is Parliament not being recalled ? MP's are being increasingly sidelined.

[passing leftie]

Posted by: Joe James B | September 30, 2008 at 12:52

Passing leftie, I think the PSBR, in percentage terms, could actually be the largest ever recorded at the time of the next General Election.
Public finances can deteriorate very fast.

That's possible; but an international comparison at that point will be vert important, don't you think? What excuse did the Tories have for 51%+ in 1996?

As for private debt, the Tories introduced PFI and have opposed every attempt to introduce tighter regulation. Labour has been too timid in this regard, but Cameron once again flip-flops and shows his lack of conviction.

Cameron is right that it was the response to the crash in 1929 which caused the Depression. Increasing government spending on infrastructure projects, and decreasing interest rates is the right thing to do in an economic downturn - the opposite of what the Tories propose.

[passing leftie]

crap, close italics

[Rightwingery]

The difference being, of course, that under the Conservatives debt was falling and falling fast. Under Labour it is, umm, rising and rising fast!

[Gezmond007]

Dither ! Dither ! Dither ! Cameron and Osbourne have been like a rabbit caught in the headlights of a car.

For two weeks they said nothing , did nothing , scared to upset all their friends in the city who have been bankrolling them for the last three years and causing all the problems with their short selling , causing banks to collapse.

They are both being found out , now they know they have no where to go , Cameron now talks about working together and doing things in the national interest. What utter crap !

Novices the pair of them , all spin and no substance ! Who,s dithering now Dave !

[GB£.com]

"People are understandably angry at the bankers who paid themselves too much and are now turning to the taxpayer for help."

People should be more angry at the politicians who pay themselves too much, living constantly off the taxpayer, then don't have the experience or foggiest idea how to run UK plc.

[Gary Elsby stoke]

" We will work with our Political opponents" (Dave).

Hang on a minute here, who exactly is employed by the British public to sort out this Capitalist free market mess, and who is on the dole of politics?

Gideon (George) and Dave (Dave) have about as much influence on this subject as Boris Johnson has in running London.

Sweet FA, to be exact!. Get used to it.

Isn't it Michael Gove's turn to be leader?

Gary

[Rightwingery]

GB£.com - That is perhaps the most ludicrous statement I have ever heard, and not surprising coming from such a populist as yourself.

Ask yourself this: how many Tory MPs do you think took substantial pay CUTS to represent their constituents in parliament? Do you honestly think, with the exception of a few bad eggs, Conservative MPs run for public office, sacrifice a huge chunk of what could have otherwise been a far more profitable private career, for financial gain?

Then maybe you should ask what salary you would like to see politicians on. Is it the UK average of about £25k? Maybe less... perhaps you think they should be on the minimum wage?

Come on, let's hear it, or are you just making ridiculous statements to provoke others to think you are stupid?

[sjm]

Gezmond: in what way would Dave's city friends differ from Brown and Blair's city friends?

Or is that if very rich people support Labour, it's fine, but if they support the Conservatives it's wicked and evil?

[PGTips]

That communist b*st*rd Brown got and the crooked bankers got us into this mess so why does Mr Cameron feel compelled to help out.

Leave Brown and the bankers stew in their own mess. If we believe in a freemarket forces - leave the banks go down. This bailing out of the banks has set a dangerous precedent.

If Brown needs help - give him help on condition that he calls a General Election before Christmas 2008.

Cameron should realise - we want Labour thrown out not propped up and kept in power with bi-partisan support.

[Freddie Fencepost]

Was it not Dennis Skinner who said he would only take a working mans wage...perhaps all politicians should be on the average wage i.e. 24k. Then they would understand a few realities about life in Britain.

If they want more they will have to raise incomes for the masses and not just for a few toffs!

[Rightwingery]

Freddie Fencepost - So you would like Dennis Skinner to run the country?

[CCHQ trolls are here]

""Adam" - you are Derek Draper and I claim my £5."

Who are these people? CCHQ employees?

Stop attacking Tory activists' free speech, and debate the issues not the disagreement.

[GB£.com]

Rightwingery,

The right level of salary for any role (and particularly one funded by the taxpayer) is a level that still results in a healthy number of people applying for the role.

I'm sure if we dropped *all* perks and dropped the salary to 40k, hundreds of politicos would still be climbing over each other to become a ppc.

So in short, politicians are still vastly overpaid. The 'taking a cut from a previous role' line is a complete red herring. Traders etc leave banking all the time to take up 'more worthwhile' roles like teaching. That doesn't mean that teachers should earn 250k to match the bankers previous salary, does it?

[Freddie Fencepost]

Rightwingery:

Possibly not Dennis Skinner as PM but Tony Benn would be perfect.

Everything he has said about capitalism has been proved to be correct

Tony Benn, the best Prime Minister we never had... mores the pity!

[Rightwingery]

But GB£.com we have already established that you don't like the 'politicos' who will be clambering to become MPs.

Are you honestly saying that you would prefer some recent graduate with working experience limited to being a press officer for an MEP, or researcher in the Commons to be running the country at the expense of a former NHS consultant or ex commodities trader, just to satisfy your blind hatred for successful people?

[Rightwingery]

Freddie - As much as I actually rather like and admire Tony Benn, how long do you think it would have taken for the country to have gone bankrupt if Tony Benn, or anyone of his ideological ilk, had been PM?

And why are all you Labour astroturfers on here today? Haven't you got work to do?

[GB£.com]

No rightwingery,

Exactly like the ex-trader who later moves to teaching (taking a huge salary drop as the ambition is to give something back), I'd like to see people who have lived and worked in the real world to later move into politics.

We would then have politicians with real experience, not those who have spent their whole life in the political bubble detached from the real world.

[Terry]

Passing leftie, Would that the level of debt in this downturn peaks at only 51.8% of GDP? As spending explodes and growth becomes negative the percent will rise rapidly. Brown summed it up well in the 2004 budget: "...based on low levels of public debt, fiscal policy can and must take account of the economic cycle – supporting monetary policy by allowing borrowing to rise when the economy grows below trend and reducing borrowing when the economy is above trend...." However, this is just what he did not do. During the fat years from 2003 spending rose rapidly, just when the level of debt should have been reduced. That is one of the serious charges against Brown.

[Rightwingery]

GB£.com - Ah so it's younger people you have the problem with. You don't think anyone who hasn't spent a career behind a desk should become a PPC and represent their communities?

I think the vast vast majority of the public want hard working, effective and enthusiastic MPs working for them, whatever their age, sex, colour, religion etc. If we have to pay MPs to get the quality then why shouldn't they have a decent salary? After all an CX of even a smalling district council gets more.

[GB£.com]

Rightwingery,

A salary of 40k is still significantly over the national average salary and would put off no-one but the greedy.

[Saltmaker]

A salary of 40k is still significantly over the national average salary and would put off no-one but the greedy.

Rubbish. Based upon sensible mortgate lending of 3.5 x income, £40k allows you to borrow £140K. Even allowing for a 20% deposit, are you suggesting that those who aspire to own a house or flat valued above £170,000 are greedy?

[passing leftie]

Posted by: Terry | September 30, 2008 at 15:15
Passing leftie, Would that the level of debt in this downturn peaks at only 51.8% of GDP?

In a world economic crisis, we will have to compare our borrowing with that of other countries. It may well rise to those heights and more, but we won't be alone.

It's extraordinary the way the Tories are blaming Brown for a world banking crisis based on poor lending decisions by greedy US banks. So far, Brown's done a good job in a difficult situation, and Cameron and Osborne just look flimsy and opportunistic, throwing their hands up in the air and offering not solutions.

[Paul D]

[I]Cameron and Osborne just look flimsy and opportunistic, throwing their hands up in the air and offering not solutions[/I]

Sounds a bit like Blair and Brown in the 90s

[GB£.com]

Oh dear, the wannable greasy pole-climbing politicos will try any means to line their own nest at the taxpayers expense.

40k is 68% higher than the national median salary (apr 2007 457 quid a week).

So if 40k was the salary of an MP, it would be 68% over the national median and it would have no shortage of applicants.

You're going to have a hard time explaining to the taxpayer why we should pay more as for the 'hardworking' it will be a payrise, and for the ex-stars of other industries, salary will not be the attraction.

So I am guessing, that those angry at such a proposal must be those slimey careerist wanabees in the middle-earning bracket who want power and riches.

We would all benefit without you thanks.

[Norm Brainer]

£40k isn't an aspirational wage by any means and so you wouldn't look to be staying in politics for very long if that's all you were paid.
So the only people that would accept it if they are smart enough to be an MP are those that are powercrazed wannbe dictators, or those wanting to use it as a step to fame.

[Saltmaker]

GB£, £40K doesn't even put you in the top 10%. If you want talent, you gotta pay for it.

So I am guessing, that those angry at such a proposal must be those slimey careerist wanabees in the middle-earning bracket who want power and riches.

And I am guessing that you are skint.

[GB£.com]

"£40k isn't an aspirational wage by any means and so you wouldn't look to be staying in politics for very long if that's all you were paid.

Why would it put off someone who currently earns less than that?

Why would it put off someone who is not doing it for the money?

"isn't an aspirational wage "
Good. If you are doing it for money, you are not doing it for the right reasons.

"If you want talent, you gotta pay for it."
LoL. Why would a higher salary increase applications from people who aren't doing it for the money?

As I said, 40k would only put off the greedy.

"And I am guessing that you are skint.
LoL.

[Rightwingery]

Saltmaker - You are absolutely right. Where in London would an MP be able to live with a mortgage budget of £170k? More to the point, £40k is about £2,200 per month after tax. Renting a room in London costs an average of £1k pcm. It would be a bedsit for GB£.com's new generation of cheap MPs!

I'm sure GB£.com would be happy for our elected representatives to live in squalour to satisfy his class (inverted)snobbery

[GB£.com]

"Where in London would an MP be able to live with a mortgage budget of £170k?"

Simple. Accomodation would be provided for them, paid and *owned* by the state.

Seeing as taxpayers pay for the accomodation, it is only right that they should benefit from any capital appreciation, porky.

[Terry]

Oh dear, Passing Leftie, comparison with other countries shows just what a mess Brown has created. The EU average government debt as a percent of GDP has inproved at 3 percentage points since 2004, just as our deteriorated.

Indeed, this contrast with the rest of the EU is the reason for the warning from the Commission in January 2006. The Guardian reported:

“The European commission will next week raise the chancellor's hackles by setting the Treasury a deadline of just 15 months to bring the government's budget deficit under control in a fresh row over Britain's deteriorating public finances.”

He can't claim he wasn't warned.

[Rightwingery]

"Simple. Accomodation would be provided for them, paid and *owned* by the state."

GB£.com - I think you are just making this up as you go along.

[GB£.com]

Rightwingery,

LoL. Just remind me why an MP should bank the profit on a house paid 100% by the taxpayer?

Oh yes, greed. Oink! Oink!

Fortunately, the times they are a changin'.

[a-tracy]

Passing Leftie do you also blog as Labour Matters? I only ask because a similar point to yours above was made on Burning Our Money http://burningourmoney.blogspot.com/ under 'Scorched Earth' and HJ gave an interesting response here: responsehttp://www.haloscan.com/comments/
mikedenham/285169530741319814/

What's your respone to his comment as Labour Matters didn't respond.

[passing leftie]

Posted by: Terry | September 30, 2008 at 17:11
Oh dear, Passing Leftie, comparison with other countries shows just what a mess Brown has created. The EU average government debt as a percent of GDP has inproved at 3 percentage points since 2004, just as our deteriorated.

You mean the European average of 60.4%, compared with ours of 44%? Hmmm.

[Rightwingery]

GB£.com - By your rather amusing logic those who clean the streets, work on the roads, empty your bins and teach your children should be exempt from purchasing a home.

[Rightwingery]

passing leftie - Another wonderful reason why we should never join the Single Currency.

I love reading socialists now openly gloating at the Thatcher-ised economy we have. The only difference between a Conservative economy coming to the end of a Conservative government and the Labour equivalent is that the Tory economy has debt shrinking whereas under Labour it is rising.

[GB£.com]

Rightwingery,

LoL. This is painful. I am only discussing second homes, the ones for MP's with constituencies outside London.

If you are whining about not being able to afford a big house in London as your first home on a 40K salary, then welcome to the real world that affects most inhabitants of London.

So remind me why an MP should get more than a teacher who also lives in London?

My whole point on this thread has been that we have public servants like Cameron bashing banking salaries in the private sector but as soon as someone in the private sector dares suggest that MP's themselves are overpaid, you all get very touchy!

How is a banker supposed to pay his mortgage on his 5million pound house if his pay is capped? 'Get a smaller house' you will say.

All I am saying is, 'the same back at you'.

[Norm Brainer]

So remind me why an MP should get more than a teacher who also lives in London?

Because MPs are more important and there's less of them etc.
If you think they should be paid the same then why not just go the whole hog and be a communist?

I would agree on something being done about the 2nd home thing though- seems odd that we pay their mortgage and they get to keep the house.

[Oscar Miller]

You can always tell a Draper troll - just look for the keyword 'novice' in their post which has now replaced any reference to 'toffs'. The novice trolls have obviously all been given a special Draper training course. Bless.

[Rightwingery]

GB£.com - I'm enjoying this. You are a wonderful caricature of the class envy the left portray.

I'll answer your question. MP's are lawmakers. Teachers are not.

Why should teachers get more than street sweepers, or hospital nurses, or any other public sector worker - hell, whilst we are on this particular line why not make everyone in the whole country earn the same?

[Malcolm Dunn]

No idea what this little spat has to do with the subject of this thread. I thought Cameron's speech set the right tone and he was also right to put country over party. Having said that there is little idea about a definite course of action to take amongst anybody. There may be flaws in the Paulson plan but I've yet to hear from anyone with a credible alternative.

[Passing Leftie]

Posted by: a-tracy | September 30, 2008 at 17:48
I only ask because a similar point to yours above was made on Burning Our Money http://burningourmoney.blogspot.com/ under 'Scorched Earth' and HJ gave an interesting response here: responsehttp://www.haloscan.com/comments/
mikedenham/285169530741319814/

No I do not, but his original post on Labourhome put me onto Eurostat.

[Laurence Olivier]

The most shocking thing about Mr. Cameron's speech was his lack of connection to his text. He was clearly just reading it (unlike last year's tour de force), most obviously in the section where he explained how the markets work. The man is just not ready to be prime minister in these troubled times.

At least if you were to ask Gordon Brown to explain some basic economic concepts he could do so without having to have it written down for him.

[independent-minded tory]

OK, Laurence Oliver is obviously from the other side. But Jack, London, needs to take the pro-tory arguments from critical posters more seriously.

Plus, the comrades stuff is a little bit outdated, don't you think? I mean, it's funny in Private Eye, but they're well educated and have a sense of humour.

[independent-minded tory]

and they can write as well...

[dickie the sheetie]

Passing Leftie, I like to see a good argument backed up with verifiable statistics, but yours falls down over the choice of start date. Comparing 1996 (the fag-end of a recession) with 2007 (the last year of an 11 year economic boom) doesn't really work for me. More instructive would be to compare public debt now with the position at the start of the last recession in 1990. The figure you are looking for (according to HM Treasury) is 26.2%. That excludes PFI, but as far as I can remember, there wasn't a lot of that about in 1990.

Now you are quite right to argue that public borrowing should increase in a recession - the alternative being the wholesale destruction of essential public services. That is exactly what the Major govt did, with the result that debt as a % of GDP increased by 17% over a six year period.

Now, bearing in mind that Gordon Brown has used the money from the last 11 year boom to increase the size and scope (and therefore running costs) of the state, has locked the Govt into 20 year PFI fixed cost maintenance contracts for large chunks of key infrastructure (so no scope for cost savings in a downturn) and has still managed to increase borrowing every year since 2002, even as the boom was roaring away - given all this, where do you expect the public sector debt to be in 2013? I can't see this govt cutting back on Gordon's pet projects, firing lots of public sector workers, or doing anything else to reduce the borrowing requirement. It isn't in their nature. Yet the Treasury seems to think around 46-47% net debt in 2013 including PFI, Northern Wreck etc. Looking at the precedent from the early 1990s, I reckon you could safely add another 20% to that forecast. Tell me why I'm wrong.

P.S. In view of recent events, the answer 'there is no recession, the economy will grow strongly from 2009 onwards' is no longer convincing, even if it remains the official Govt position.

[James Maskell]

Camerons speech sadly does seem a little catching up. There isnt much he can do right now apart from pray that the financial problems might lessen a touch so the Conservatives can get a word in edgeways (the Conference specials are becoming News Specials on the credit crunch) whilst sounding reassuring. They do need to spend more time thinking about their economic policy. Basic questions are hitting the mark and a well constructed plan would resist such questions.

The Conference is pretty much a write off now. Why are the audiences for the major Cabinet members so low as well? Anyone else notice the tiny audiences for Gove and Grieves speeches? Astonishing!

[passing leftie]

Posted by: Rightwingery | September 30, 2008 at 18:07

passing leftie - Another wonderful reason why we should never join the Single Currency.

I love reading socialists now openly gloating at the Thatcher-ised economy we have. The only difference between a Conservative economy coming to the end of a Conservative government and the Labour equivalent is that the Tory economy has debt shrinking whereas under Labour it is rising

I am not gloating about it. I think the reason that Germany is doing better than us is because they adapted rather than destroyed their manufacturing base in the 80s - they didn't have Thatcher. Wouldn't it be good if we had invested in clean coal technology rather than destroyed our coal industry? I'm actually demonstrating that the Tory critique of Gordon Brown as a profligate spender is wrong - in the last year of Major's goverment the government debt was way higher than anything under Labour since then.

[a-tracy]

Passing Leftie did you read this: http://www.spectator.co.uk/coffeehouse/2180696/indebted-%20britain.thtml Just a couple of points from the article:
"it is the combination of government and household debt that has left Britain in such a perilous state. Brown gets away with it because there is no metric that puts the two together. No warning light to flash red."

I'm no economist like several on this site but these articles are compelling.

Why do you think Labour in the past decade when the Economy was "Booming" didn't invest in clean coal technology surely the coal is still there?

[a-tracy]

woops this was the other quote in the article from the Times “This parlous financial position is a direct political legacy. A government of genuine prudence might have put money in the bank at the top of the cycle to pay for the bills at the bottom. But it would then have been unable to argue that Conservative plans to cut taxes would require cuts in public services.”