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Be wary of the overuse of regulation. A touch of regulation to avoid the worst excesses can so easily become a straightjacket for growth.

Not bad though. One of his better efforts.

Everyone needs to help sort out the mess, but Brown cannot be allowed to preside over the rebuilding of the economy - having presided over its failure he has shown that he does not know how to build stable growth. That is a job for a new Government.

Better stuff.


We have found the Invisible Man... Osborne has writte some desperate article.

Why has he not been on our screens explaining the Conservative view!

Vince Cable has become omnipresent.

Fire Osborne along with all those idiots running the banking industry.

I fear we just lost the election...thks Osborne.

We are all socialists now!!!!!

Brown hails blitz spirit as way ahead

By Jean Eaglesham, Chief Political Correspondent

Published: October 12 2008 22:59 | Last updated: October 12 2008 22:59

'Gordon Brown evoked the spirit of the blitz to claim global leadership for Britain in the financial crisis on Sunday, in remarks that underlined his transformation from political write-off to respected statesman.'

Posted by: Dorian Delores | October 10, 2008 at 16:31

'I fear that Graeme is right. Gordon Brown has gone all Churchillian on us and cometh the hour cometh the man-like. Expect a cigar and flicking the V about.

It's the blitz all over again except with spivs fleeing the East End as the houses collapse around them.'

You read it here first. Again.

And not just "presided over" the biggest economic disaster of our lifetime - he was personally instrumental in its creation, down to the very last nut and bolt. He is indeed no more worthy of praise for the rescue than an arsonist would be for turning up with a bucketful to try to extinguish his own deeds.

This sounds good.I hope is article is well read and many more of a similar ilk are published in the press. It does seem to me that Cable is given far more airtime than Osborne in the broadcast media,if that assumption is correct I wonder why that is? Is it the decision of the Conservative Party or the broadcasters? Answers to this would be gratefully recieved from any of the anonymous CCHQ staffers who read this blog!
Tim, bit of a misleading headline of this thread if I may say so! Osborne's piece hardly praises the Americans!

Well done George Osborne! When I heard Brown speaking a little while ago I was worried - he sounded quite responsible and in control of the situation but what we have got to hammer home to people is that WHO was in charge of the financial situation of this country over the last ten years? Why yes, GORDON BROWN!
Conservatives have got to support constructively - yes - but also point this out ad nauseam...!!

Sorry Malcolm. I hadn't intended to imply that George Osborne thought Bush had done a good job. Perhaps I should have chosen a "Brown's Britain behaved EVEN less responsibly than Bush's America, says George Osborne" headline.

"Gordon Brown has gone all Churchillian on us and cometh the hour cometh the man-like. Expect a cigar and flicking the V about."

Don't forget the Spinmeisters are back....This is NO coincidence!!!

We have got to ramp our Dark Arts Department up a gear....

At last Mr Invisible has shown his face. Perhaps he's had some briefing from grown ups who actually understand economics. It is a good article apart from: 'Conservative plans to freeze council tax, abandon the new car tax, keep businesses facing bankruptcy afloat and help low income families with heating bills could all be put in place in the coming months.' Those measures were measures for benign times. They are totally inadequate to avert or mitigate the impending bust.

Freddie, your posts are tedious and add nothing of any value.

*but in Britain, Gordon Brown racked up the biggest budget deficit in the western world*

Is it so easy to forget the USA?

.....and on the BBC today this is the death of Thatherism and its also all the fault of those people in America.
Sorry...I thought the Labour party had been in power for the last 12 years yet they still manage to blame everything on Thatcher the USA and Iceland and the BBC promotes every word of it. Why are our major banks failing and no one elses appears to be. No one asks the question of Nu Labour.

The opposition should be out there hammering these guys into the ground pointing out its Labours fault/ I don't buy the solidarity stuff Labour spout it then are sticking the knife in everyway they can. Let them do this and we are lost you have to fight as dirty as the other guy or loose.
Every black hole in public finances that they have created to date over the last 12 years will now dissapear into this financial cock up. They will blame shortage of money and cuts on Thatcher, the Banks the US the man in the moon and the BBC will promote it. The Nu Labour deceivers are now sitting pretty also blaming it on everyone else. Everyone asks whu GNB can be happy well No wonder Brown is smiling.
Meanwhile are banking system is decimated, gold is sold and we are in hock to the government for thousands. A socialist dream come true and Polly twaddles goal as is Micjhael Foots is finally achieved.

I absolutely totally despair while these labour propogander lies are promoted by the BBC without any balance. The lord of darkness and Campbell certainly are back in the roost. Spin spin and more spin.

What is our game plan here? I blowed if I know what its is and expect the polls to reverse very quickly now...

"we will not let you forget it."

It would have done the Conservative cause more good if the Shadow Treasury team had made it their mission to warn about the dangers rather than being smart after the event.

The Conservative leadership should have completely distanced themselves from the government during this crisis and should have heaped the blame for the debt-culture onto the government, who by example, have been the biggest debtors of all. Conservative support now allows the government to portray itself as having done the right thing, when in reality they have slapped a monumental bill on the taxpayer and completely ended any scope for taxcuts in the immediate future.

This crash is the fruit of Thatcherism and Reaganomics, the final death knell of "the market knows best." Thirty years of derugulation (Big Bang anyone?), and this is the final result, as all the displaced risk, credit derivatives juggled in the air by the banks come tumbling down, and there aren't enough hands to catch them. Labour has its share of blame for not regulating firmly enough, but the reason that Spain and others have done better is because they adopted a more left-wing European approach.

I disagree that we are in a worse position than America - we are a highly populated island with just enough housing stock - America house more stock than it knows what to do with.

We will need EU-wide regulation to deal with EU-wide banks, and unified action by the EU nation states only possible through the EU.

So, look forward to the rise of centre left, the discourse of regulation, and a safer more cautious market environment.

"A week in politics is a very long time"

I agree with the chap above who notes.

"I fear we just lost the election...thks Osborne.

We are all socialists now!!!!!"

This crisis has been manipulated by a far subtler politician to his advantage, and you have to admire the man , because he (it appears) has succeeded in exporting this revolution to almost all of the G8.
I know that this party is changing but supporting these nationalizations is not the kind of change that most would have expected. So instead of the bears cleaning up after the crash it appears that the tax-payers will be buying in low to prosper later. Frankly we underestimated Brown as did the nation. This is a very clever man. I would go as far as saying that this could be Brown’s Falklands war. As long as he wins this battle or is perceived to have won this battle his popularity is very likely to soar. I have to admit to being impressed by his lateral thinking and he brave approach to a crisis that I suspect would have swamped a less experienced man.

Anyone can come out with this stuff after the event.

What I would like to see is CCHQ releasing a speech from Osborne from 2005-2007 to show that he actually both understood and warned the government about the impending housing-led crisis before it all crapped out.

It is embarrassing that Vince Cable and not Osborne is topping this list:

When was Osborne clearly warning the government that a crisis was brewing, and that house prices were too high and that mortgage lending criteria was reckless?

It may exist. If it does get it out there *now*, to show the Tories have vision. If not, hang your head in shame Mr Osborne for being trumped by the LibDems.

Oh! he's alive is he?

Better tell him that Vince Cable is now the Shadow Chancellor, well the media obviously thinks he is.

Too little and far too late! George Osborne could and should have seen this coming at least three years ago when it was obvious, from both the increase in personal debt and the ever widening balance of payment deficit, that the UK was living beyond its means and that a correction was inevitable. In fact, Boy George was waffling on about “Sharing the proceeds of growth” even as late as last month.

George Osborne is not up to the job. He should go.

“Well done George Osborne!”

Sally, I cannot escape the feeing that if the Devil Incarnate were to be Tory Leader and Beelzebub Shadow Chancellor you would be there at the touchline cheering on your team! I commend your loyalty, I truly do.

In fact both Cameron and Osborne are perfectly decent chaps, I am sure, but neither has any experience of work, of achievement, of adversity or of leadership outside the Tory party and their shortcomings have become quite obvious in the last couple of weeks.

david1: If you look at the Liberal Democrat poll rating it would seem that Mr Cable's media marathons are doing his party no good. We should judge the Conservative frontbench on making long-term economic decisions not on how many times they appear in the media.

GB£.com, its a pity the webcameron forums have been deleted because in the forums myself and others were warning about the dangers of the debt mountain over and over. If only senior politicians had been prepared to heed the warning of the ordinary voters, instead of believing and assuming that the market was going to correct itself. So many of us saw this crash coming.

An excellent and perceptive post by Very Angry of UK @ 0950. It hasn`t taken the Mandelson/Campbell spin team more than a moment to whirl into action, with an undiscriminating BBC in close support. The sins of omission in reporting responsibility for the present situation are typical of the way in which formerly, Blair`s gross blunders were presented as credit-worthy victories. This pair of rogues are now doing the same service for Brown. How simple we will all look if without question, we believe what they are telling us once again.
The Conservative Party needs, as a high priority, a properly coordinated operation that will not just respond to Labour`s spin machine. We now have ample justification to start holding the government to account for getting Britain into the present situation by neglect, incompetence and stupidity.
We could start by pointing out that if Brown was so politically adept and responsible, he wouldn`t need to be putting right conditions that his actions as Chancellor and then Prime Minister, have allowed to happen in the first place.

"This crash is the fruit of Thatcherism and Reaganomics"

Please remind us, and yourself, Resident Leftie, which party has been in power for past 11 years and during which period house prices took off on an unsustainable boom, personal debt spiralled our of control, the balance of payments moved sharply into deficit and the money supply roared out of control.

I am no friend of the inept Tory Leadership (see above) but their sins have been sins of omission whereas your lot have been responsible for sins of commission.

Anyway, when the present government is faced with the necessity need to drastically curtail back public expenditure, sack a large number of public employees and reduce to pay of others, curtail benefits, cut foreign aid etc. etc. the Labour Party will split and Gordon Brown will metamorphose into Ramsay MacDonald whilst Alistair Darling will be reborn as Philip Snowdon.

We are indeed moving backwards into the 1930s. Your friends over at Labour Home are concerned about the rise of the BNP.


I fear they may be correct.

"The government must be a "rock of stability" for British people during the credit crisis, Prime Minister Gordon Brown has said. " - BBC headline

Yep - we'll all be absolutely stony-broke.

We should not lose sight of Greg Hands' article yesterday on the Swedish solution to a similar problem in the 1990s, the more so as Brown is - for obvious reasons - trying to give the impression that only he in the world has the answer to all our problems:

"I have seen politicians in many countries for some weeks now struggling to find a solution to their banking crises, so it was with some interest that I saw Carl Bildt's article in the International Herald Tribune on 28th September describing what Sweden had done 16 years before. Three days later, the Guardian ran a piece on the Swedish model, and soon it was the talk of Westminster. By Wednesday, 18 US economists were backing such a plan, and, sure enough, on the same day it become UK Government policy, as announced by Gordon Brown and Alistair Darling in their morning press conference".

Indeed, if Brown referred to what happened in Sweden, it might actually inspire confidence in world markets that such a solution can work.

And confidence is the vital ingredient that will start to get us all back on track!

For all of the good things about the current front bench you have to admit that they are as green as grass. Brown is now running rings around them and Mr Cable is talking sense at a time when George Osborne is caught playing catch up. The best advice I would give Cameron right now is watch how a real leader acts under pressure and learn because your time may yet come. This government has enacted a real revolution, and it appears that MR Cameron and Osborne have not yet twigged

While some of Osborne's comments ring very true (especially that Brown should have built up a surplus in the good times) I am yet to see any Conservative politician say what they would have done differently over the last ten years to have prevented this crisis. They haven't because they would have done either exactly the same or have been for even further deregulation and we would be in an even worse position. And now they don't have any new ideas and just meekly back the Brown/ Darling rescue package.

Criticism is fine for opposition, but if you truly want to be the next Government its about time the Tories got some ideas of their own

None of this is anything to do with Thatcherism although clearly the left are desperate to pretend it is so they can hide their failures under a smokescreen.

This country is suffering a Debt Crisis which has made the global situation worse and made us ill equipped to cope with the recession that is coimg. This crisis - massive UK Govt debt under Brown who has behaved irresponsibly; massive personal debt which Brown encouraged; massive bank liabilities as compared with our GDP; massive mismanagement - Brown failed to regulate for 11 years and let our productive and manufacturing sector be squuezed out; massive failure to act by Brown even when the warning signs were there over a year ago.

Anyone who thinks they can distort all this into a tirade for re-born and re-warmed socialism is letting down the very working people who can only aspire to having the things they want for their families through a modern capitalist mixed economy. Can you imagine a country in which civil servants run things...oops yes we can as bureaucracy has got worse under Labour! But more seriously do you really think modern efficient cars, medicine, electronics etc were going to be at the reach of ordinary people under socialism. Nope. Best think on before the super-spin merchants in Labour rubbish our economy even further selling a story about it all being the fault of capitalism in order to hide their mismanagement. Will they ask Russia to inject cash as did Iceland? Folks there is much at stake here and dark forces must not be allowed to circle so Labour can hide the truth.

Osborne is absolutely right here. We need to hammer home who was in charge while all this was brewing. Individual banks make decisions about risk based on the assumption that the system is basically sound. Yes, they were greedy and they took outrageous rewards while the state effectively picked up the risk but the more important stuff happens higher up. Only the people at the very top of the whole financial system - the central bankers and the heads of government/finance of each country - can make sure that the systems are well designed. That was Gordon Brown's job for ten years. He didn't do it. Forget any criticism of opposition politicians being wise after the fact. Let's ask why the people who actually were in charge - Gordon Brown, Eddie George, Mervyn King - were not wise before the fact, when they were supposed to be making sure that the financial system was sound. That horrible smirking man Brown cannot now claim to be saving the system when he must take a very large part of the blame for letting the system get out of hand in the first place. And we, as a party, must make sure that people understand that the blame lies not primarily with the monkeys (bankers) but with the organ grinder (Brown).

I agree Tony.

I am more than willing to be corrected as it would really help to hammer this fraud of a government, but apart from the lamentable tory tosser campaign, I do not recall Osborne even mentioning, let alone banging on about the impending house price crisis and the reckless lending multiples that formed the very root of this crisis before it all kicked off in mid 2007.

For me, that makes Osborne unfit to be chancellor unless it can be shown that he was overruled from speaking out from above, and the consequences of that would be even worse for the Tories.

Talking of Dark Arts, Baron Von Mandelson (of Foie Gras and Art Le Pool) is now in the Lords and trousering £1,000,000 from the EU for resigning. As a gesture of solidarity with the British taxpayer he will shortly announce that he will, personally, underwrite the Icelandic liability of a well known charity.


All good stuff
He has obviously been lurking on ConHome.

But why the Standard? We are already more ahead in London than elsewhere in the country- preaching to the converted. CCHQ must start to care about places beyond the drawing rooms of Notting Hill and Cannonsbury, where their friends don't live.

PS One article in the one paper does not entitle him to retire his divan and nibble ortolans. He needs to saturate the media.

Ed. can ConHome set up a shadow cabinet watch/index and report sitings of shadow cabinet ministers in the media? It shouldn't be all that arduous for your office.

Don't allow the Mad History Professor to get away with invoking The Blitz spirit. Eleven years of irresponsible financial regulation has led to a disaster of Dunkirk style proportions and Brown has played the part of Chamberlain, not Churchill. Unlike Chamberlain who had the courage to resign, Brown stumbles on, telling us that more of the same, low interest rates and easy credit, is the way to cure a financial breakdown caused by low interest rates and easy credit. Less than a year ago, our Dear Leader was applauding the City at the annual Mansion House bean-feast for the marvellous job they were doing thanks to Brown's light touch on the economy. Now his house of cards is on fire, UK assets, £1.5 trillion. Total UK annual income, £0.6 trillion. Total UK Bank indebtedness, £5 trillion. A few 10' s of millions in bonuses are inconsequential in the scheme of things. He is the first to point at the mote in the eye of the City. The beam in his eye goes unremarked. The debt figures have been increasing for years. Not a word from the Treasury, the BoE or the FSA. Nothing by our self proclaimed Financial Genius to cool things down a bit. You do the sums and ask how Browns' "financial genius" got us into this mess.

Ross Warren,

Mr Brown is certainly winning the media battle at the moment; he is doing things as oppositions can't and only governments can in a crisis, and the opposition is (wisely in my view) largely keeping their heads down.

I do not share your pessimism (or do i detect optimism?!) that this will turn out to be Mr Brown's Falklands moment. This is not a two month campaign ending in successful routing of the enemy but the start of a long slow grind of recession. As has been said by Mr Brown himself, this is not the beginning of the end but perhaps the end of the beginning.

Once the immediate crisis is over (providing of course that the bailout actually works) serious questions will be asked by the media and public as to how we ever got into this situation in the first place where we have seen four high street banks nationalised (NR, HBOS, RBS and Lloyds) to a greater or lesser extent, one broken up (B&B) and another (Alliance and Leicester) taken over.

The government is doing a good job of blaming America at the moment but will that be a defensible position if the UK suffering a more prolonged recession than either the US or our EU partners? We shall wait and see.

The fundamentals of recent polls are still very bad for Mr Brown (-30 odd rating for how he is doing as PM; still 10 pts behind after ten days of blanket coverage; more people thinking he is handling the crisis badly than those thinking he is handling it well). The opposition needs to sit tight and hold its nerve (something Cameron is very good at) while the immediate crisis passes. It can only get serious coverage at the moment by making mistakes. Once the storm has passed Labour will realise it is still in deep trouble.

Iain and particularly you Chad (GB£),Osborne did try to make the nation wake up to over borrowing. Don't you remember the 'tosser' campaign? It may not have been very well excecuted but it did show that the Conservative frontbench were aware of the problem.

Jonathan: It's probably in the Evening Standard because it had the latest deadline. If it had been in a morning newspaper it would have had to be submitted early yesterday evening. The Standard probably gave George Osborne valuable extra hours to see what the Chancellor was doing.

I'll give thought to your other suggestions. Thanks.

Nail the lies! Brown claims that this is a Global crisis that started in America. The banking crisis actually started right here with Northern Rock and its totally irresponsible acceptance of dodgy debts.

This was a result of a decade-long general jamboree in our banks who found that regulation in practice did not exist and they had no rules to act on. Banks who tried to get guidance from Gordon Brown’s creation the FSA complained that it was impossible!

After Northern Rock, Brown went into complete shut-down mode and for nearly a year did absolutely nothing, while the approaching hurricane gathered force. Consequently he was completely unprepared for the events of the last month.

Meanwhile in country after country, governments did act in time. Listed by Osborne - and Kavanagh - are some of the most prominent prudent ones - Spain, Canada, Australia, Sweden. It is Brown’s Britain that is worst prepared (per IMF).

Osborne finally gets round to saying the right things in a regional paper. (It’s a pity he was so ineffectual on TV yesterday). Cameron lurks out of sight giving general support to Brown for his measures now but forgetting the vital need to pin the responsibility for allowing the crisis to happen on our unelected prime minister, Gordon Brown. This is no time to play patsy. A myth is being created. Instead of an incompetent chancellor dropping us into terrible chaos and desperately cooking up solution after solution, a picture is being painted of a resolute defender of our nation.

There’s a letter I read today which quotes a report on an officer which seems very relevant to Brown - “This officer is very good at getting himself out of situations he should never have got into in the first place” .

This is Brown’s crisis - he created it and he along with a bank director or two should pay the price, not strut the stage pretending to be a statesman.

Let us hope that Cameron is listening to the growing chorus of disapproval of his silence and support for the architect of our troubles.

On a wider point, there seems to be a general consensus view here that the present crisis has Gordon Brown’s fingerprints all over it and that the Tory Leadership have fallen down on the job.

But what of the directors of our major banks (HSBC aside)? Have they not shown themselves to be negligent, incompetent, greedy and just plain stupid?

We seem to have a crisis of leadership in the UK just now and I think we should be reflecting on why this is and what we might do about identifying our next generation of leaders, political, commercial and in the public service.

"This crash is the fruit of Thatcherism and Reaganomics"

Please remind us, and yourself, Resident Leftie, which party has been in power for past 11 years and during which period house prices took off on an unsustainable boom, personal debt spiralled our of control, the balance of payments moved sharply into deficit and the money supply roared out of control.

Labour's love affair with the City has been their biggest failing, so yes, I'd agree that the government has not been left wing enough. It's time to move the balance of power back from uncontrolled mega-banks and corporations to nation states and their citizens.

I'm not sure the tone of this is right - it looks like petty point scoring cobbled together after the event, when what we need is a clearer and bolder line about what we would do.

(My other post in the YouGov thread).

But he has made some good suggestions and points - and that is good news.

Oh and Resident leftie,
Margaret Thatcher (before the late 80s) believed in CONTROL OF THE MONEY SUPPLY.
Your government failed to put the appropriate machinary in place for the bank, and M3 has gone out of control.
We have asset inflation and debt built on sand.

Andrew Spencer "I do not share your pessimism (or do i detect optimism?!)"

Thanyou for taking the time to read me.

My feelings are mixed to be honest. I have never been comfortable with any of the major parties. I consider myself to be a cross-bencher in that respect. Like most here, what I really want is a strong nation, in which we can all prosper. I believe that one thing that is truly missing from our current leadership is the Crown. Of course the Windsor’s as a whole (although not including Elizabeth herself) have rather soiled the reputation of this important institution. In the past at times of great stress we always turned to the Crown as an expression of our national unity. Call me old fashioned if you will but I remain a royalist believing that there is great merit in having a head of state that is born to rule rather than a politician (however well intentioned) who wants the power. At the moment I believe that Gordon Brown is showing real backbone. Lets hope in all of our interests that he is successful in stabilizing our Banking Sector.

"Don't you remember the 'tosser' campaign?"

Um Malcolm,
If you actually read what Tony and I said, we directly mentioned that campaign (my comment at 10:38) so of course we remember it, but were discussing mortgage lending multiples and overblown house prices.

Please would you refer us to the Osborne speech that addressed this, as this was the root of the whole crisis, and as per my link, something that many, many people were warning about with the exception of the government and the opposition.

There was a huge failing on the critical issue by Brown and the Tories. That is why neither has any credibility to speak on solutions imho as both ignored the coming storm.

And I guess that is why Vince Cable is present in the media right now.

"Margaret Thatcher (before the late 80s) believed in CONTROL OF THE MONEY SUPPLY.
Your government failed to put the appropriate machinary in place for the bank, and M3 has gone out of control.
We have asset inflation and debt built on sand."

She may well have believed in Money supply control, but it was quickly abandoned For Reaganomics. I have yet to be convinced by anyone that there was any real difference between Reaganomics and the economics of Kaynes other than the source of the borrowed money. In the long run we have been building up massive public and private debt instead of simple state borrowing. As for the current cure to our ills, it appears we have little choice but to borrow (print more money) and try to inflate our selves out of negative equity over the medium term. Of course there is an alternative, we could allow the market to take its course and except that some banks will collapse and unemployment will rise to record levels.
We could in addition apply real control of the money supply. This would likely result in a deep slump. However in the long term we would emerge a far stronger economy.
In this day and age is there any leader willing to take such a strong approach to what is a massive problem ?

It was abandoned certainly by 1983, probably 82 because it was severe.
I'm not suggesting it should be applied as a fine art as that would be very interventionist aswell - but it has to be a guideline.

Ross Warren

You won't find much opposition to the monarchy on a Tory website despite, as you say, the activities of the younger Windsors.

I agree that we must hope that this stabilises the banking system but once that is done the question will then be, why were British banks so badly affected. Obviously, a large chunk of the answer lies in the errors of banks themselves (and it would be nice to see a few more falling on their swords) but it is also down in part to a failure of the regulatory system Mr Brown established.

More problems for the Prime Minister will come from the state of the public finances as we enter a recession. Public deficit peaked at 46% of GDP during the last recession. We are currently at 43% at the start of a recession. We are badly prepared to face this and there will be a reckoning for that.

I agree that Mr Brown is taking action, and it is probably the best plan on the table, but the opinion polls show that despite a small but significant shift in Labour's favour, the fundamentals are still bad for Labour and the PM.

What's the difference between George Osbourne and a rabbit in the headlights? Not much it seems. This crisis has mesmerised the Conservative leadership and left them baffled at what to say or do.

Going on gut instinct, I think that people are going to become angrier and angrier as time goes by about the way this crisis was allowed to happen and then how it was dealt with as events carry on unfolding.

What could we be doing to make a meaningful contribution?

Well firstly, we should be thinking about some form of independent expert enquiry into how regulation failed and what new regulation and restructuring of the banking sector should take place. No panic measures but steps that will stand the test of time and provide a firm bedrock for international faith in British banking.

We also need to look closely at the whole credit industry. It seems we are entering an age of diminished personal responsibility where we are all 'victims' and none of us bear much personal responsibility for our financial affairs. But if banks cannot lend to us responsibly, whose fault is that? A Conservative Government should look closely at personal borrowing from the point of view of the consumer and the lender. With personal debt levels as high as they are, how can Osbourne continue to ignore this? Its time for new regulations on personal debt which is as much a blight on society as single parenthood, crime or drugs.

It's all fine and well bleating on about social responsibility but the onset of a recession changes everything. The state does have a role, but this massive invasion into the private sector needs challenging if not in the short term, then certainly in the medium and long term.

We need a new political narrative and it needs to make sense to the man in the street who is crying out for some common sense and LEADERSHIP.

If its not forthcoming then watch that poll lead shrink and get ready for a General Election when our marginal seats may be at risk from both Labour and Lib Dems, not the other way round.

Can anyone, anywhere find a speech from Osborne prior to mid 2007 warning about the impending house price bubble?

All I can find is Tory proposals to make it worse by proposing plans to get even more people 'on the ladder'?

Osborne can only learn from this - I don't think all this negativity is going to get us anywhere (even though I have been very negative on here)..

I just think William Hague would have done the Vince Cable role for us....Osborne has been shoulder charged out of the picture by Cable.....who has been by far the most informative voice about this crisis...

This is a step in the right direction by Osborne but he needs to keep raising his game....and snare Mr Broon

What has the FSA been doing since 1998? I attended both the ABI and the FT fringe in Birmingham and asked both panels, comprising the CBI, FSA, BBA, City of London, and the FT whether they could confirm that the size of the credit derivatives market was approx. USD70,000 bn? I asked if it would be more honest for the media to refer to this crisis as a credit derivative crisis not a sub prime crisis. I also asked if they could comment on the fact that the dangers of these financial instruments have been known since 1998 when the hedge fund, LTCM had to be bailed out. I suggested that Alan Greenspan is the author of the scale of our current crisis. He should have let LTCM go to the wall. The credit derivatives market was in its nascency then. There were considerably fewer hedge funds in existence. He did not, because he was too scared of the systemic risk and contagion which would have ensued. The Emperor has had no clothes since 1998. Lionel Barber of the FT publicly told me at that fringe that I was talking rubbish. I repeat "What has the FSA been doing since 1998?"

Perversely, this crisis stems from regulation and lack of regulation simultaneously. BIS weighting requirements resulted in the invention of Frankenstein in the form of CDS, in order to circumvent the capital allocations required by the BIS regulation. That is why the Western Governments need to be extremely careful about what they do next. The Law of unintended consequences has got us here in the first place. I believe regulation of the CDS market in 1998 could have prevented this crisis or at leastthe scale of our current woes. Why did the FSA not try and regulate the credit derivatives market? Gordon Brown's economic success has been illusory. We have been living on air since 1998. When Governments try and buck the market they create an even greater monster. What would New Labour's last 10 years have been like had Gordon Brown clamped down on this largely unregulated market? New Labour cannot claim ignorance. They would certainly not have received circa GBP9bn in tax revenues per annum. I think it was politically expedient for them to ignore the elephant in the room. I also think it is risible to blame all UK Inc.'s woes on America. If Gordon Brown felt he should take the credit on the up he can not be blameless on the way down. It will not wash.

On a final note, I am furious that Fred the Shed swans off into the sunset with a pension of GBP587,000 p.a.. There has to be a link between the Bank he managed to "blow up" and his personal earnings. Maybe his pension should be paid in RBS shares? What about an Enron style inquiry? What about some criminal prosecutions? What about the Big Accountants role in this affair? What happens to the Directors of a small company when they post "make believe" results? Yes....they sometimes end up in Jail.

Well lets get on there andd complain to the BBC about blaiming it on Thatcherism.

This is a good article by Osborne and as people have said we need a lot more of it. Ok you have done the all we are in it together stuff now lets lay blame. The blame lies with Borwn and the last 12 years of this government. There is the regulator in place that should have acted instead it had no teeth and was diluted by EU legalslation, Brown allowed this and he raked up Government spending to unprecedented levels whilst at the same time trying to falsely claim he was being prudent.

It is rubbish to claim that we are all Socilaists now and its the death of Thatcherism. What has been adopted is a temporary measure and we must make sure it is only ever a temporary measure.

The danger is that the Shadow Cabinet has up to this article stayed much too silent, the measures adopted may just work who's face has been on TV to explain it Brown, where have we been whilst he has no where!

If these measures work we are in danger of allowing Brown to be seen as the man who saved Britain. So unless the Shadow Cabinet wants to pull their collective fingers out now and start pinning the blame on Brown we will all be condemned to another 5 years of this Government.

"It's time for new regulations on personal debt which is as much a blight on society as single parenthood, crime or drugs."

Yes debt is every bit as evil. Until sometime during the premiership of the late and unlamented Harold Wilson, youths under the age of 21 were no liable for their debts (other than essentials) so, of course, banks and stores would not allow them any credit. Of course, there are many older people who get into debt too but this law did protect the young from ruining themselves before their lives had hardly begun.

Is it time to restore the age of majority to 21? This would help with the other blights you mention too.

anyone here seen Cameron? we voters are looking for an opposition leader.
Any idea George ?, anyone ?
.... or do the people have to organise their own opposition.

Cameron has just made another bland appearance on Sky, but not definite enough to get Sky to put it on their website.

David Cameron, Conservative leader - Sky News

Mr Cameron said that the £37bn bank funding package was necessary, but not a cause for celebration, and added that it was needed in part as a consequence of "a decade of too much borrowing".

“Today isn’t a day for celebration or triumph. This is necessary but painful. It needs to be done, but it’s expensive - in some ways it’s paying the bills for the last 10 years of excessive debt.

“It needs to be done, it has our support, but it’s painful and difficult and not a day for triumph.

“We’re saving the banking system not for it’s own sake but for to save the wider economy, that’s why it’s necessary.

“In the end there was no option but to do it, the consequence of allowing banks to collapse would be much too serious. And would have terrible knock on for the rest of the economy.  Not to act would be worse than to act.

“We support what’s been done but let’s be absolutely clear about how we got to this point. We’ve had a decade where we have too much debt, too much borrowing, too much leverage. That went on too long - there was no-one to call time on it.

“The government has borrowed too much as well and set a bad example. It’s the day that the bills came in for a decade of too much borrowing.”

One of the problems with this site's spoon-feedings is the mouthfuls it tends to miss. Like this quote from Squeaker's article, mysteriously unquoted above: "Finally, in the long term, we all have to learn some profound lessons about the way free markets work. Laissez faire is dead". Well if it's a choice between Brown and that, thank God for Gordon.

It's good to see Osborne's wholehearted support for the Brown Plan, and the upturning of his own ideology - "Laissez faire is dead."

He could have said "Thatcherism is dead" - in that context, that's what his phrase means. I've got to agree with him. The taint of Thatcherism marked New Labour, and I think we are finally over that.

The actual policy proposals he makes are risibly pathetic. Bring on a giant of the right, a decent advesary, and squash this pipsqueak.

The conservatives are in a right mess because they have consistently copied Labour's grotesque spending plans - and now as the folly of Brownian economics comes home to roost - they have nowehere to go but to try and score a few cheap points.

More inadequacies from Osborne.

If only £37bn has been used of the £50bn facility can the balance be given to taxpayers?

"This crash is the fruit of Thatcherism and Reaganomics, the final death knell of "the market knows best.""

I wasn't aware a central bank (a non-market institution) holding interest rates too low was a result of the free market.

Good to see Osborne has some balls at last.

Posted by: RichardJ | October 13, 2008 at 14:11
I wasn't aware a central bank (a non-market institution) holding interest rates too low was a result of the free market

I seem to remember that it was Tory chancellors setting the rate through political expediency under Thatcher - not "the market".

Come on, you lot are being way too harsh on Cameron and Osborne!

You forget that they are not in a position to solve this crisis because they are not in Government. We're going to take a big hit whatever way you look at it.

At the moment, Cameron and Osborne are in a "damned if you do, damned if you don't" situation.

If they attack Brown, as most of you suggest, then how do they attack him?

If they opposed the bailout for opposition's sake, they would be accused of opportunism, especially when Osborne proposed recapitilisation before Darling and that virtually every economist backs this policy with no-one suggesting anything else that will work.

But they backed the bailout; now they're accused of being incompetent and having no backbone.

Nobody at this stage wants to hear ranting and raving and how unfair everything is; they want to know how the banking system can be saved.

Osborne is doing the best he can, by providing support but also at the same time criticizing Brown for his smugness and treating this like a triumph.

Remember "Events, dear boy, events" and how we respond to them is what matters - Cameron's reversal of fortune came last year when he held his nerve at the conference. Fortune might be helping Brown now, but don't forget one thing: he lacks bottle. All he is doing now is following and implementing advice from the opposition and economists and treating it as his idea all along. Nothing new there.

I will let Brown speak on his reforms in 1997...

20th May 1997. Chancellors statement to the House of Commons on the Bank of England.

This is what he said about Labour's reform of financial regulatory practices in 1997.

"It has long been apparent that the regulatory structure introduced by the Financial Services Act 1986 (FSA) is not delivering the standard of supervision and investor protection that the industry and the public have a right to expect. The current two tier system splits responsibility between the Securities and Investments Board (SIB) and the Self Regulatory Organisations(SROs), together with the Recognised Professional Bodies This division is inefficient, confusing for investors and lacks accountability and a clear allocation of responsibilities. Reform is long overdue to simplify the delivery of financial service regulation, and this was a key commitment in our Business Manifesto. At the same time, it is important to preserve the beneficial aspects of the current Act, including practitioner involvement and differential levels of regulation for wholesale and retail business.

I can announce today that work is to start immediately on the legislation needed to simplify and reform the regulatory system at an early opportunity. I am announcing our intentions in advance to give the SIB and the self-regulating bodies the opportunity to work on the detailed implementation of our proposals, to ensure the smoothest possible transition to the new regime. I am confident that the simpler system we are proposing will reduce compliance costs, and increase public confidence in the regulatory regime.....

....These reforms are founded on sound economic principles. This is a long-term policy for long-term prosperity. It provides the building blocks for a new economic strategy for monetary and financial stability aimed at enhancing longer term growth and prosperity. I am confident that their success will be reflected in a stronger and more robust economy for the long term."

This is what Peter Lilley Shadow Chancellor said in 1997. Hansard 11/11/1997 para.732

"The Bill will hive off debt management to a new quango under the Treasury. We know that funding policy is an intrinsic part of monetary policy, and the Bill will leave the Bank as a one-club golfer without even a putter left in the bag. How will the Treasury, the Bank and the new board co-operate to handle monetary policy? If they need to get together, why is it necessary to separate them in the first place?

With the removal of banking control to the Financial Services Authority--the "super-SIB"--it is difficult to see how and whether the Bank remains, as it surely must, responsible for ensuring the liquidity of the banking system and preventing systemic collapse.

What happens if the needs of the banking system conflict with those of the inflationary target? That has happened in the past in the United States, and it could conceivably be happening in Japan. I understand that there is a suggestion that a committee is to be established to work between the Bank, the FSA and the Treasury to try to cope with that sort of problem. If that is necessary, why is it necessary to hive off powers in the first place? "

That quote chills me to the bone, that is exactly what is happening. There is your smoking gun, Brown is a sitting duck - now use it!

And did we get that Committee between the FSA, BoE and Government.

No, we've just had Brown & Darling dithering.

Now can someone tell me if we are so well placed to ride the economic storm, why has our regulation failed where as in Spain, Sweden and Canada it hasn't?

Incidentally, Brown's much vaunted rescue plan - vaunted by the Tories about a month ago and actually the Swedish plan used ten years ago to rescue their banks from a similar fate.

"Sally, I cannot escape the feeing that if the Devil Incarnate were to be Tory Leader and Beelzebub Shadow Chancellor you would be there at the touchline cheering on your team! I commend your loyalty, I truly do. "

Don't be silly, David - Lord Mandelson hasn't crossed the floor and joined the Shadow Cabinet... or have I missed something important whilst I've been out????!!!!

hy is the BBC allowed to blab lies about Thatcher causing the crisis when it's as clear as the nose on a donkey's face that BROWN's removal of the Bank of England's regulatory controls and replacement with a bureaucratic nightmare is precisely what led to it ???

Will someone find Eddie George and hoist him up to BBC News studio's to explain about the argument he had with Gordon Brown over this please and show who is to blame for a country riddled with debt !!

Never mind banging on about not letting him forget it, it's the country who needs to know so IT isn't misled by Labour and their lies.

Rugfish @ 15.55 - 'Why is the BBC allowed to blab lies about Thatcher causing the crisis when it's as clear as the nose on a donkey's face that BROWN's removal of the Bank of England's regulatory controls and replacement with a bureaucratic nightmare is precisely what led to it???'

Because they are allowed to i.e. the BBC shows the likes of Blears and Harperson telling lies (and I have NOT qualified that statement, because their lies can be proved as such!), for the simple reason that they know quite well that they can get away with it, after all they are in the business of pleasing the government!

Sally, regarding your comment @ 09.45 about spinmeiesters, I blogged yesterday quoting from a small piece by Peter Oborne, in Saturday's Mail about the gigantic size of Brown's new team. One could speculate that the size of a PM's team reflected the size of said PM's ego, or conversely the size of said PM's inferiority complex!!!

However, what it absolutely displays is the determination that THIS prime minister has to REMAIN in power and that he thinks that the more people - particularly spinners like Campbell and Mandelson - that he gathers around him, the more likely he is to defeat David Cameron.

George Osborne's article is good, but I would like to see more, and I really do think that some articles, somewhere, need to be couched in even more simple and straightforward language, so as to inform less knowledgeable members of public.

People forget very quickly, and undoubtedly the sticky group attached to the PM, will be banking on that.

If the standard of living continues to decline that will make it easier to remind people of why that has happened. Also, if unemployment rises, as well as the cost of food, and this causes unrest amongst the very newest immigrants - and I don't mean the Poles, I mean in-comers who are not working, then people will also connect up the reason for their problems!

Jules at 15:27. The party should be hammering Brown non-stop for creating the crisis in the first place. (I don't go as far as one correspondent who thinks he did it to be seen as a hero solving it! )

At the moment Labour spinners are running rings round the Tory lot! I know they've got an easy job today but the Tory response is pathetic.

Support the measures but rub all the salt one can find in the wound for 10 years incompetence. Though I must admit that the crazy promise to match expenditure maintained for so long has made difficulties in that approach. But Brown must carry the albatross of total incompetence to the polls

"One could speculate that the size of a PM's team reflected the size of said PM's ego, or conversely the size of said PM's inferiority complex!!!"

Good point, Patsy - the two are not entirely unrelated!

A good starting point for PMQ's would be to ask Gordon to explain his oft repeated mantra that "Britain is uniquely placed to weather the financial storm"

Of course, there is a 99% chance that he will use some fancy footwork to dodge answering and there is probably a 100% chance that we'll hear another old chestnut, "I won't be told...etc,etc". I don't think we'll hear an awful lot about, "No more boom or bust" as that little gem has more than likely been erased from the USB stick that's plugged into his brain. More likely we'll start to hear repeats of "Our Saviour....my idea......10 years of, 10 years of, 10 years of, 10 years of....

"Give him a kick for Christ's sake Alastair"

Given that four bankers were fired to-day because of their involvement in the decade of irresponsibility would it be reasonable to request that the person mostly responsible resigns?

Let us not forget Brown has been responsible for our economy for the past eleven years.He keeps harping back to Margaret Thatcher and the fact this is a 'global crisis'. In other words, "This is none of my making and not my fault". The man is in denial, he is in a mental fog and now tries to portray himself as a Churchillian character that has saved the World from economic disaster. What utter nonsence, he is a failed Chancellor/PM who without Parliamentary consultation used billions of taxpayers money as a bail out from a situation he was instrumental in creating.By severly restricted the Bank of England's regulatory authority to police financial malpractice, he has let develop an abuse of financial instruments that has broken confidence in our Banks.Who could ever trust a man who refuses an all important promised referendum on 'Lisbon' and smashed the private and company pension funds in 1997 against the best actuarial advice?

Brown is only fooling himself if he thinks he can portray himself as a financial wizard.He has saddled our country with the biggest debt in history because of his mismanagement.This fact alone will be remembered by the electorate at the next election.

I'm going to bury any party political point scoring ( on this post only )of Gordon Brown's handling of the crisis here and I'm not going to drone on ad nauseam about where it emanated.

Today, Gordon Brown visited a specially convened summit in Brussels to discuss plans to counter the financial crisis, to restore proper confidence in the markets, and to put in place an oversight, which is desparately needed for our global monetary and fiscal systems.

He has apparently scored a number of well earned hits on the world stage where none todate have seemed to manage so well as this one man wonder of financial stability.

There, I've said it.

Regardless of what many might believe of his staunch belief that the public are not deserving of a general election or a vote on the Lisbon Treaty, I believe he has managed to stem the flow of others critique and has put in place instead some well deserved praise for his bail out plan, which has on all accounts given an earlier remedy to matters where none seemed too apparent only a few days previously.

This global meeting of leaders he's called, I believe none of his audience have his financial experience or his ability to bull something like this through in the face of vehement opposition and adverse public opinion so I say let him bask himself and Britain in glory and soak up as much well deserved praise that he's able to on this day, 15th October 2008.

I lift my glass to Gordon Brown who has on all accounts managed single handedly to auger change to the Bretton Woods agreement, gain likely unanimous agreement from 27 European ministers, gift British thinking and diplomacy to Europe and to America and probably forge stronger understanding and appreciation. He has cradled world financial institutions in his arms like an old faithful father figure, and has probably implanted a lot of personal kudos upon himself whilst simultaneously heightening his own political esteem in the face of certain political failure.

Well done to Gordon Brown for this achievement which will without doubt make him a place in history for his actions which are undoubtedly a bigger achievement in world economies than any who went before him.

Who knows, I might even see the back of Milton Freidmans monetary policies and the replacement of those with a goog Brown Economic Theory, or a good BET as I will call it in future.

I'll move on to a more a more critical note once the celebrations have died down a bit and also when he's managed to get himself back here safely to the United Kingdom where no doubt he'll get around to telling us all about his Euro medallions to throw us off the track of his previous meddlings.

I just hope he's done the trick and that his praise won't be extended for longer than he deserves.

(AP) Volatility battered Wall Street again Wednesday after a disappointing retail sales report reminded investors that the country is either in a recession or moving toward one. The Dow Jones industrials dropped nearly 400 points, giving back a chunk of their huge 936-point advance from Monday, and all of the major indexes were down at least 3 percent.


The FTSE 100 closed down - 7.16% too, ending on 4,079

Did I speak too soon and was my pat on Brown's back unfounded ?

I guess we'll all have to wait and see.

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