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"We recommended a 'Time to man up' speech to Mr Cameron in March. That speech still needs to be given."

You'd have thought that Samuel Coates would have got round to writing it by now ;-)

May also want to mention Brown's use of the CPI to measure inflation. Had he stuck to RPIX, interest rates wouldn't have gone down so much and we might not be in this mess.

At last some clear thinking from the Tory Right, the Sage of Wokingham speaks:-

From John Redwoods Website Oct the 6th

Governments should look after taxpayers. Taxpayers cannot afford to nationalise the banks. If governments assume too many new risks by taking on the assets of the banks or buying them up, it merely shifts the problems from the private sector to the public sector. It does not solve it. The problem will then become how do governments pay all the bills? How can they finance themselves in a non inflatonary way? How high do taxes have to go? A banking crisis does not suspend the laws of public finance. Buying bank shares is just like hiring teachers or buying more paperclips for a government office - only less popular with the taxpayer.

October the eight

At last the authorities have woken up to the scale of the problems in the money and banking markets. Any sensible person this morning wishes the government’s plan well and hopes it will succeed. Let me begin with some supportive points.

Spot the difference

Click on

www.johnredwoods diary.com for more

Can't diagree with any of this.However any politician would be a fool to start making grandiose speeches before he or she had a considered strategy.With the markets still in absolute turmoil it is very difficult to plan a strategy any time in advance.

We need to stand solidly behind capitalism, which Labour will now be emboldened to destroy. Thye bankers screwed up, but to punish them as may well happen will cause more problems than it solves. The City was the jewel in the British crown and the Conservatives have to defend it. Whats the point of major regulating now? No banker will ever do this again. The moral hazard is so extreme that such actions cannot happen.

Noone will complain at Osborne-Cameron if they rip up their super-cautious economic policies of the last two years.

These different times demand different policies.

Tim's recommendations above all seem a good place to start.

CCHQ Please note: China has just gone one step further and developed a pro-growth strategy of not just cutting rates like the rest of the world, but also introducing tax cuts (a suspension of withholding tax).

Now than Paulson is also considering buying into banks, Brown will clearly get a boost by doing this first; the 'dithering' attacks will clearly fail.

It is time to look beyond the current crisis and for the Tories to develop a clear pro-growth strategy.

This resigned 'taxes will have to go up' crap must stop. The major challenge is now econocentric, and the Tory narrative must develop clearly to reflect this.

The largest hole is Osbourne's area. IHT tax relief was one masterstroke last year. But it was only one and it was last year. Since then very little of substance has come out on financial matters from Osbourne. Just a co-operative cost suppression idea on council tax. Is he fully focused on his brief or are the other strategy matters or outside interests distracting him? We need a full time shadow chancellor not the part time one we seem to have. Replacing Hammond with a better presenter would also help. We are fortunate that the polls are still with us but now is the time for Osbourne to sort himself out and focus on the economy.

Labour, no more than the Tories, want to "destroy" capitalism. Repeating this nonsense just undermines any valid point.

Labour didn't take full advantage of the 10 years of growth. They had pressure to do something with the public services, including needed infrastructure projects. They spend all our money on that, much of it unwisely. Most of it was money none of us had.

We are all culprits in this crisis. The millions of buy-to-let landlords indulged their greed, like the bankers. Everyone was cashing in on the dud money leveraged out of property inflation.

The Tories are in the same position as Labour. Cameron doesn't have much to say, because nobody has "the answer" to this, so why look a fool by saying anything.

He's doing the right thing for now.

Peter Oborne's approach is depressingly similar to the majority of the traditionally right leaning dead-tree press - he may adhere to the Right, but he's come to it from a Leftist dogma, hence his comment:

"how to defend a failed economic system"

The economic system hasn't failed. It just IS. Its like saying the world failed when the Tsunami hit South East Asia. The conservative/Conservative approach to the economy is inherently correct, its only the left's dire economic theories in praxis that can fail - as they have. Comments like this simply blow wind up the left's ar*e.

Maybe one of the richer readers of this blog could fork out for a copy of Eamon Butler's The Best Book on the Market for Oborne??? If he manages to get through it, he could even progress on to something by Laffer, or even Friedman.

I particularly agree on the point about Welfare and Education Reform. Rigorously researched & argued social policy, intelligently funded for the long-term,is key to this country's long-term regeneration and prosperity.

Half the Northern Rock debt has already been repaid - £26bn - and the natural instinct of this government, if not Labour MPs as a whole is to support capitalism, tempered by human rights, over socialism. They are social democrats. They will get government money out of banks as soon as is practicable, ideally at a profit. The City has made a load of money for Britain, but we have been massively over-reliant on it - we need a more mixed economy and restraints on financial instruments so complex that it prevents banks knowing how much they are worth. We need to make a bit less from the city in boom times and lose less during busts - effectively the city was a giant leveraged hedge fund which bet the wrong way.

Personally, I don't think they are being hard enough on bankers who have made errors, and I agree with Cameron's Damascean conversion to Trotskyism when he talks about slashing bankers' bonuses. Heads must roll at failing banks who need government money.

Simon Heffer needs to be reminded that the most important result of the socialist government after the war was the NHS - one of the most loved institutions in Britain, so perhaps he should choose his analogies more carefully.

I'm glad to see that CH is sticking by proper ultra-liberal Tory ideology while the Tory leadership adopt their spinning weathervane approach. No doubt they'll come crawling back to you when things have settled down.

"so why look a fool by saying anything."

Because you want to win the general election and your poll lead is going to evaporate during this crisis.

Couldn't agree more, hence my blog post this morning on Cameron's bizarre performances over recent weeks.

If the Conservatives can't offer anything different from an over-regulated and over-taxed economy, then we might as well pack up our bags and go home.

A sixth ...

Britain will withdraw from the EU so that a Conservative government can actually fix the economy, WITHOUT grovelling to the Commission for permission first!!

"IHT tax relief was one masterstroke last year."

It was a one off masterstroke may be, but strategically it didn't do anything for Conservative economic policy, for as you rightly say that's all we got, when the Conservatives should have been signalling up their concerns about the debt fuelled economy Brown had constructed. Osborne is in fact, more or less, admitting this himself when he says 'now is not the time to lay blame', too right its not, it was two or more years ago, trouble was he wasn't doing his job, with the result that the Conservatives are economically all over the place when the country is looking for leadership, the only hope of laying any blame on Gordon Brown's door is to later trawl through history when the Conservatives should be mapping out a future for our country.

Has it occurred to anyone that it is now left to China to defend capitalism. Before I am accused of heresy, please pause to think what the Chinese have acieved since the death of Mao.
It is a kind of state sponsored capitalism that has been adopted by the other successful Asian tigers like Singapore, Taiwan and to a certain extent Japan since the end of the second world war. Even the success of Germany is by an large a state sponsored capitalism.

I would say Capitalism is alive and kicking - but the total laissez faire system has had its weaknesses exposed by the failure of the regulators.

In the Presidential debate the other night, one of the first things Obama said he would do to help the American middle class through the economic crisis was to cut taxes. And this is from the left-wing candidate! Here in Britain both sides of the House of Commons are united in calling for expensive state intervention, and no-one on the Conservative front bench has spoken up for a small-government, low-tax approach - which is surely as revelant now as at any time.

I really do not see a traumatised and ideologically-confused Tory party out there. We have a very clear message to give to the public at the next election- it was Gordon who got us in this mess. Through massive borrowing, mortgaging the country to the hilt and making credit flow as easily as the rain in Ireland it has been this Government who have left us in perhaps the worst position in the western world. The Party, who are clearly not the greatest believers in state intervention, know that right now this is the only course. What else would you do? Let all the banks collapse?! How exactly would that work?! While I recognise that the Government are using yet more borrowed money to save the banks, I dont think we dare contemplate what could have happened had we not got involved. Also, at this present moment, who in their right mind would be advocating substantial tax cuts?? Bear in mind your audience when you say this...the audience is not economists who agree that tax cuts could work, nor politicos who immerse themselves in free market economics, rather it is a fairly nervy public who would rather the economy is calmed than do anything- tax rises or tax cuts- which is seen as drastic. In 2005 we had a fairly substantial programme of savings that were costed and independently approved. However, in order to explain their reasoning, we had to explain in great detail how they could be funded. Quite simply, that puts people off! So, if it put people off then, what on earth would it do now!

If anyone watching PMqs was disappointed with DC's performance, they might have also noted Labour MPs behaving like schoolkids (as pointed out by Tom Bradby, thanks ITN for objective reporting)and seeming to think they were off the hook.

" but the total laissez faire system has had its weaknesses exposed by the failure of the regulators. "

No, what has been exposed is a failure of Government policy, unfortunately the Conservatives are so feeble at making any sort of economic argument the blame is being levelled at where the problem emerges (banking) rather than where it originates (No11), with the result that markets are getting the blame, when the rules for that market was being set by the Government.

Spend less
Borrow less
Tax less
Balance the budget

David @ 10:10 "Also, at this present moment, who in their right mind would be advocating substantial tax cuts??"

Um, someone who wants to end the exodus of wealth generators from the UK (WPP etc)?

The case for cutting *business* taxes now is overwhelming. It will encourage investment and generate jobs and could then present a balanced argument of the need to focus keep the country is work.

Imagine this from Cameron or Osborne's replacement:
"We'd love to reduce tax bills for everyone now, but we recognise that for the longterm stability of the economy and jobs, we urgently need to support employers in these turbulent times to protect existing jobs and to encourage new businesses to set up in the UK to generate new jobs, and thus we will embark on a radical pro-growth strategy of reducing business taxation."

"of the need to focus keep the country is work.

s/b of the need to focus on keeping the country in work.

"Labour spent too much and too wastefully during the good years" - advancing this argument is the Central Lie of the hopeless Tory response, such as there has been, thus far. For, no they didn't. Certainly they spent in a way we didn't like (or shouldn't have liked - sadly Osborne and Cameron explicitly signed up to agreeing with exactly their spending plans), but in no sense was their expenditure unsustainable. Nor in any shape whatsoever, unfortunately, has public spending (let alone taxing) contributed to the current crisis in its present form. This crisis stems not from public malfeasance but from private miscalculation, be it from private individuals who signed up for debt they couldn't cope with, or, here in Britain, credit supplying private institutions which lent incontinently. And it is now their private mistakes which are being publicly solved. Some of retain enough affection for our old time religion to wonder if this is really the right thing to do. That Osborne and Cameron neither know nor care suprises very few of us.

David Cameron had offer an olive branch so as to facilitate smooth passage of Brown's / Darling's 'bail out' Bill for the sake of the country. Unfortunately,all he received in return for his Statesman like manner was to be utterly scorned at PMQs. Brown is a quick opportunist and took advantage by trying to humiliate DC. Never again should any quarter be give to dithering Brown and his shambolic Government. Still in denial,it was partly Brown's fault this crisis arose when he removed the 'regulatory powers' of the Bank of England to intervene when banks employed questionable financial instruments.

It is now high time for DC to remove the velvet gloves and knock this discredited 'clunking fist' out.

Given that around 80% of our legislation comes from Europe how much can we actually do whilst shackled to them?

tim/Ken Stevens: DC's conference speech had a lot of home truths in it about how difficult it would be for an incoming Con govt.

More or less regulation is not the point

The point is regulation that prevents grotesque over borrowing and the trading of toxic securities

Yeah, for Dave would never have sought to play politics during this time of 'national emergency'. You know, like the way he did right at the start, by pointlessly pretending he would "help" Brown avoid any US parliamentary-style rebuffs (the minor matter of Brown's firmly whipped Commons majority notwithstanding). Gosh, that certainly wasn't opportunistic, disingenuous spin mouthed purely in the hope of filching fleeting approval in the evening TV news. Still, at least Dave isn't such a louse that he would lie in his Leader's speech to Conference about how an old woman died. Oh wait.

'Manning up' means abandoning the neoliberal snake oil that has fraudulently passed itself off as conservatism and returning to true conservative values

Cornerstoners are you listening? this is your chance to lead!

"but in no sense was their expenditure unsustainable."

You are joking aren't you?

Not unsustainble that the state has increased its share of our economy from 37% to 43% during a period of growth?

Not unsustainable that they haven't been able to balance their dugets during a period of growth.... Five years ago, Brown borrowing over 2002/3 to 2007/8 would be £47 billion,he actuallyborrowed £165 billion.

Not unsustaible that we are going into a recession with the largest budget deficit in the Western world?

Since when has Simon Heffer said anything of any relevance anyway?

Has government spending caused the crisis Iain, or has private spending and lending? What's about to make the crisis a lot worse is the government foisting upon all of us collective fiscal responsibility for the private errors of others. Quite why private debts are now being nationalised to the approval of plainly a majority of Tories is completely beyond me. Redwood's apostasy being especially disappointing.

"Has government spending caused the crisis Iain, or has private spending and lending?"

It was Brown who trashed pensions and savings leaving property speculation the only investment. It was Brown who fiddled the inflation figures leaving interest rates too low for far too long. It was Labour who added millions of people to a housing market that was already in short supply further inflating the housing market. It was Brown who threw more debt fuel on the fire with Government spending and borrowing.

The banks are to blame for finding ways to sell our debt on the international money markets to keep Brown's debt fuelled economy inflated for the time it was.

Promise a referendum on continued EU membership.

DC was far too concerned to look 'Responsible' and as a result just appeared weak. He had one very good point when he asked for full responsibility for the financial situation to be returned the BOE and then let this be brushed aside too easily.

Oh please, when private individual A encounters, via by the Blessed Mystery of the Market, private individual B, where A wishes to buyeth a House and B wishes to selleth, you can cheerfully baffle upon about distorting factors like planning-regulated supply &c, but at the end of the day, those factors fully and mysteriously provided for, the price is determined between A & B, with a goodly amount of help from the Holy Ghost, hereafter the private mortgage suppliers. Blaming Gordon really won't wash. Where we could start blaming Gordon is over his much-cheered on desire to make private mistakes public problems. Personally, you borrowed too much, you lent too much, your problem. But that would appear to be rather too Old Testament for most at the moment.

Labour have been increasing spending above and beyond the overall GDP growth founded on the debt fuelled boom. We are now in recession and government has had to make these interventions in the banking industry. This will in all likelihood push borrowing over 50% of GDP. Businesses know that when you borrow money you have to invest it very carefully. There is a small chance that Labour will do this but on their past form I'm not very hopeful.
One of the real dangers of a nationalized banking system is that businesses will get the feeling that they are borrowing back the money they have given the government in taxes.
Businesses have responsibilities to their employees and to the country as a whole; they will start to feel these are being subsumed by their responsiblity for paying the state's ever increasing bills and the state's ever increasing debt.

ACT: we have one of the worst fiscal deficits in the OECD and after "boom years". The fiscal deficit may not have contributed to the problem as much as private greed but it's certainly reduced our freedom to take the measures that would help us get out of these difficulties.

The ultimate hypocrisy is Labour politicians blaming the banks for creating the unsustainable economic boom, based on private and government debt that they have spent the past ten years claiming the credit for!

In 1995, under the advice of Messrs Blair and Brown, the Labour Party got rid of the dangerous phrases in Clause IV of its constitution in order to make itself electable.

However, with the current crisis, Gordon Brown has effectively achieved its objectives. Did he in fact see this crisis coming a long way off in the 1990s? Did he therefore let this crisis happen?

Will Gordon Brown go down as the greatest socialist in the history of the Labour Party?

Do we now look forward to decades of a Soviet-style command economy with the inevitable consequences that that entails?

We also, as a country, had one of the best boom decades, outperforming most other OECD countries, by some distance, for the vast majority of Labour's time in office since 1997. And it cannot be repeated often enough that Cameron and Osborne's solution to Labour's alleged sins was to agree lock, stock and barrel to continue with their (presumably wicked) economic plans. So there really is little use in pretending that Labour are uniquely monstrous, whilst we're entirely virtuous. Unless of course the sole point of contemporary Conservative political rhetoric is to make one feel better about oneself for uttering it, regardless of its tenuous connexion to reality. And yes, since I appear to be the only person left who believes in C19th economics, I may as well employ C19th spellings. But the fundamental point remains - either we believe in private responsibility or we don't. Perfectly reasonably, the Left doesn't. It's a great shame however that a clear majority of 'Cameron's Conservatives' feel likewise.

Disappointing list of five. Three of them are negative; don't increase taxes, don't over-regulate, don't restrict trade.

Britain needs a positive pro-growth agenda.

What to do about the George Osborne problem?

As a supporter of David Cameron, I have to say that his performance in PMQs yesterday was dire. As has been remarked elsewhere, he needs to realise- and quickly- that he is up against the most partisan, tribal PM of all time, and is therefore wasting his time with this consensual approach.

We need to start kicking some Labour arse over this "Labour recession" [why no mention of this phrase?]. Can you imagine if the boot was on the other foot? Campbell, Brown and Mandleson would be recreating images of Tories sending kids up chimneys. Why are we so hopelessly passive at repudiating this "worldwide downturn" guff ?

One big learning point from this whole episode. George Osborne is not ready, not by a long way. His performance on the Today programme yesterday confirmed this. Reciting a trite mantra about being 'willing to cooperate with the Govt" is just vacuous guff- Labour has a majority of 60. Voters and commentators have seen through it. A certain gaucheness has been exposed in the Cameron/Osborne/Gove clique this last couple of weeks.

This is a bad failure of both strategy, and personnel, on our part, and an urgent change needs to be made.

Posted by: Conand | October 09, 2008 at 11:21
We are now in recession and government has had to make these interventions in the banking industry. This will in all likelihood push borrowing over 50% of GDP.

It will probably reach the 51% it did under the Tories in 1996!

Posted by: Tim Montgomerie | October 09, 2008 at 11:21
ACT: we have one of the worst fiscal deficits in the OECD and after "boom years". The fiscal deficit may not have contributed to the problem as much as private greed but it's certainly reduced our freedom to take the measures that would help us get out of these difficulties.

Well, no we haven't - not according to Eurostat. We have Northern Rock on the books, but they've already repaid half of the loan, and then it will be off the books. Ask Mr Lilico for clarification.

I fear that Cameron's approach, which sounded statesman like last week, appears very weak today. To give full support to Brown was a great mistake.

To recover he must show guts. Bring kenneth Clark back unto the front bench as shadow chancellor. Boy George has shown he is just not up to it. The freeze on council tax wheeze means absolutely nothing with today's news of billions of council's money frozen in the Icelandic Bank.

Kenneth Clark should be just the start. He needs fighters. people who will give this government a kicking. Cameron is letting them off the hook. He has to show leadership. TODAY.

"But the fundamental point remains - either we believe in private responsibility or we don't."

The person who has got themselves into hock up to the eye balls is very much to blame for their situation, just as Gordon Brown is responsible for getting our country into debt upto the eyeballs.

Of course it was Brown's side kick Balls who expoused endogenous growth theory....which argues that economic growth is generated from within a system as a direct result of internal processes.... shame he didn't take note of the massive trade deficit we were building up with China which now has all the money and the growth!

Surely the biggest fiscal deficit is in Cameron's economic 'plan'?

#1 Jack up taxes.
#2 Er, that's it.

If the Conservatives were not 10-15% in the polls the Leadership would be copping a lot more criticism over their performance of late.

Brown and Darling are not the only ones who've been dithering. Sadly it only gives that gimp Cable more airtime as the media seeks alternative views, however self contradictory and idiotic they may be.

Our careerist professional political class has collectively lost its grip on what is happening, has happened and why it happened or what will happen next.

We're not all automatically doomed and there is still a chance of a soft landing for the real economy if we can address the key fault lines in the economy. It's only instinct, but my gut tells me that our political leaders are still behind the curve and have not really grasped the core problems here, let alone do they possess solutions.

Tim, what do YOU have to say about the behaviour of the bankers?

Yes, the government has been irresponsible and spent too much, but what about the bankers.

How can we say nothing about them - and their relation to the political establishment - and still look credible?

Are you really suggesting that they should face no additional curbs - leaving them free to repeat the pyrimid selling of dodgy debt.

We need some MORAL leadership on this issue - and I had hoped it might come from this site.

"Over-regulation will kill our chances of recovery"
I would add to this that bad regulation will destroy the City, which is a source of much of our GDP, but good regulation can give London a competitive advantage.

The cause of much of the bank failures has been an accumulation of poor decisions (over-valuation of repackaged sub-prime debt, over-dependence on wholesale funding, over-use of credit derivatives). It is not surprising that they should all come to a head at the same time because there is a high degree of interconnectedness.

Every bank and every trader will have an eye on their own profitability and will not alter their behaviour because of the overall market position. A good regulator on the other hand will spot the overall weaknesses in the market and regulate accordingly. It wouldn't have been too much of an imposition to tell Northern Rock to raise more money through deposits, to tell AIG that their ctredit swap book looked a little explosive or to question whether the credit committees at Fortis or Dexia really understood the ecoonomy of Alabama or whether they were just relying on the word of S&P when they bought their debt packages. Unfortunately our regulators did none of the above, and then again neither did many of the investment analysts until it was too late.

Either that or forget about deposit protection. Letting the market do its worst and expecting the tax payer pick up the bill when it all goes wrong is never a good idea.

"Can you imagine if the boot was on the other foot?"

Yes they would be using it to kick the living daylights out of the Conservative party, they would be fixing it in everybodies mind why the blame lay with the Conservative Government, and they would repeating the same lines time and time again to be sure it was fixed in peoples mind.


Which begs the question- why aren't we doing the same ? We have been collectively hopeless. Cameron, Osborne, Hammond, everyone. Hopeless.

To win- we have to attack. So lets start hearing about this "Labour recession".

resident leftie@11:42

Tim is correct. We have one of the worst fiscal deficits in the OECD - our structural deficit is particularly bad. My arguments related to our level of government debt to GDP, not to our fiscal deficit.

Also, I agree with others that our debt to GDP levels were allowed to rise much too high by Brown, when they could have been down as low as 25% and should probably have gone to 30%. In that sense, we certainly did fail to mend the roof whilst the sun was shining.

I've never tried to defend Brown on this point. I have only urged that "didn't mend the roof whilst the sun was shining" is not equivalent to "left the cupboard bare". And I urged that it was economically and politically damaging for us to argue this because we should be chasing the government to engage in a major borrowing-funded response to the financial and recessional crisis. I consider myself clearly vindicated by events in that regard - even though, clearly, the form of government-borrowing-funded intervention taken is not that I favoured (though it was that I feared and argued against).

I consider Osborne and Cameron badly politically damaged by these recent events and their mishandling of them. Indeed, it seems to me that the next General Election may even be back on as a realistic race.

" what do YOU have to say about the behaviour of the bankers? "

What about the bankers?

What is it they have done that's so wrong?

The crisis that's affecting our banking industry isn't bad debts, its about the over reliance on international money markets to fund our debt. That is the credit crunch problem we have. The reason we are over reliant on the international money markets is due to the collapse in personal savings and over consumption, which is the result of Government policy.

Now you can say that the Bankers neglected good banking practice by relying on the money markets rather than internal savings, but the architect of this debt fuelled boom was Gordon Brown.

I don't in any way defend the bonuses Kirk.

I don't agree with you Andrew that the next Election result is back in the balance.

Brown's best day was yesterday.

The recession will soon bite and Brown will struggle to connect with people losing their jobs and homes.

The Conservative critique that Labour left us badly prepared for a global downturn will work because it is correct.

It's true our safety-first economic policy has been inadequate but I do not believe that UK politics has fundamentally changed although we may lose a little ground in the short-term.


I didn't go so far as to say that the next GE is in the balance. We are still well ahead and favourites to win. But when, previously, it had seem inconceivable that Brown could recover, it no longer is. If his package prevents the mass nationalisation of the banks, he will be presented as a hero; the saviour of capitalism; the man who made the tough calls at the critical moment. And with recession continuing, Labour will try to make the economy their strong suit - that in tough times people should stick with the proven deliverer. That argument worked for us in 1992, and its power should not be underestimated for 2010. Perhaps, later, people will blame Labour for creating the recession - as in 1997 they blamed us for the negative equity etc. of the early 1990s. But that may not mean power until 2015.

I think we're still favourites - it isn't "in the balance" - but we aren't dead certs any more.

My two lasting impressions from a Conservative Party perspective, after the financial crisis-

1. Too many of our Parliamentary Party still don't want it badly enough. Like Tim, I have met a few of them and seen them in action. Unforgivably- some are in the Shadow Cabinet.

2. We have gabbled, dithered and floundered in response. Fairly or not, the role of Shadow Chancellor requires gravitas. Even in their dark days, Labour had Shore, Hattersley, and John Smith in this role. We have George Osborne. Not even the most fervent Cameron-ite could claim that G.O has performed with any credibility over the last few weeks. Not a shred, I'm afraid.

Agreed Andrew. Thanks.

Imagine the interviewer to Osborne:

"The US are now considering adopting the bold bank plan introduced by the government. In these turbulent times where decisive action by our government is now being adopted in America, what part of your modern history degree equips you to do a better job?"

It is one thing for Cameron to say that ideas trump experience, but we seem to have neither in Osborne.

Tim Montgomerie: "I don't in any way defend the bonuses Kirk."

Great - but this isn't really about the bonuses. If the top execs had built up their businesses on a sound business model then the bonuses would have been well deserved. But the business model was anything but sound. It was hugely, obviously irresponsible - indeed morally fraudulent if not legally so.

Why don't you comment on this?

"Which begs the question- why aren't we doing the same ? "

Don't ask me for I am at a loss to know why, as you can see by the time I've spent asking the same question here on this messageboard.

Posted by: Andrew Lilico | October 09, 2008 at 12:10

I consider Osborne and Cameron badly politically damaged by these recent events and their mishandling of them. Indeed, it seems to me that the next General Election may even be back on as a realistic race.

Here, unfortunately for me, I disgree with you. The general public don't take as much notice of this stuff as political nerds, and when they see the effects of a world financial crisis, they will blame Gordon Brown. Political betting has 3/1 against Labout winning.

Unless Osborne and Cameron are seen spitting at the Queen or strangling puppies, they are pretty much a shoo-in. By 2010 we might be seeing a recovery. I certainly hope so, because Cameron and Osborne are fairweather politician who don't look like they can cope in a crisis. Let's hope they aren't incompetent managers, too.

I wonder in my most recent post whether any politicians, on either side of the Atlantic, are making any real attempts to cure the underlying causes of the "credit crunch", a great part of which is public policy on spending and borrowing.

Why do opposition politicians tie their hands by acquiescing to the government of the day?

"May also want to mention Brown's use of the CPI to measure inflation. Had he stuck to RPIX, interest rates wouldn't have gone down so much and we might not be in this mess".

Posted by: RichardJ | October 09, 2008 at 09:13

That is an important point - but additionally why was it not seized on and attacked by the opposition at the time?

Some not very good posts to put it mildly on this thread.
London Tory 'we have to attack'etc. We can attack only if we have an alternative strategy. We don't and neither does anyone else. To try to undermine the government during a time of national emergency is the height of irresponsibility. I and I eexpect millions of others would not forgive Cameron if he'd done that. Cameron was not dire yesterday he was responsible and dignified.
ACT. Yes it's true the credit crunch and the banking crisis are the fault of private individuals but to leave well alone as you appear to suggest is total madness. You appear to imagine that if the banks fail only their shareholders and employees will be hurt. That's complete rubbish.If there is widespread failures the whole economy will seize up. No one with any knowledge of the subject not even that well known socialist John Redwood would argue differently.
Brown may not be responsible for the irresponsible lending but he sure as hell is responsible for the catastrophic failure of the regulators who have performed abysmally on his watch. We may not want more regulation but we do need regulation that actually works.
The massive public borrowing that has occured during Brown's tenure will also mean it will take Britain much longer to recover from the effects of this crisis.
Typical of our leftie friend to try and extract every ounce of political capital out of this situation. He or she is no better than our PM FOR for failing to realise that there are times when the national interest is not served by an adherence to narrow part politics.

Bad, bad Gordon, how dare he let autonomous free-standing capitalist entities like banks lend money! And even worse Gordon for letting wretched, unworthy private individuals presume to borrow money! He knows better than them, he should have stopped them! Thank God he is now using public money to fix their private mistakes. The very idea that they should be left to deal with the consequences of their own actions is repellent to modern Conservative thought, as enunciated by Dave, and squeaked by Gidders, and cheered on by so many here.

Why should be listen to the commentators having a go at DC's performance at PMQs? They are the ones who have been critical of most of his tactics and the whole need for change within the party.
They didn't see what he was doing then and they don't now.
Their previous shortcomings do not seem to have given them them pause for thought.

We can't undermine a plan that is going to go though with or without us which depends in large part, on confidence.
Cameron had no choice yesterday. Brown won against a bloke who decided not to put up a fight.
It won't continue.
And judging from some news coverage, it won't necessarily have done them much good anyway. Lst time they cheered like that was over 10p.

Some rabid right wingers just want to fire off ammunition all the time.
There is no sense of approriateness measure or timimg. Thank goodness they are not in charge of the party.

At this stage, the polls [which is all some reaction to] suggest that this 'landscape changing' event has not altered one thing: that the coutry wants a Tory Government and that they think the Tories are the ones who can turn the country around economically.

"To try to undermine the government during a time of national emergency is the height of irresponsibility."

That didn't stop Brown publicly slapping down Cameron yesterday.

"Yes, the government has been irresponsible and spent too much, but what about the bankers."

Bankers respond to the central interest rate set by the BoE, which gets its powers from the government. If interest rates are artificially low then the banks can hardly be blamed if they make investments that look artificially profitable.

"Are you really suggesting that they should face no additional curbs - leaving them free to repeat the pyrimid selling of dodgy debt."

What needs curbing is the power of the BoE to set interest rates. We need radical reform of the financial system, not in the form of regulation but of the establishment of properly sound money.

"Why should be listen to the commentators having a go at DC's performance at PMQs? They are the ones who have been critical of most of his tactics and the whole need for change within the party."

Where is your proof? I for one have been generally pro-Cameron until now. Are you trolling? Your talk of "rabid right-wingers" suggests that you are trying to get a rise out of people.

Ah yes, the madness that let the Bank of England determine interest rates. Far, far better that Gordon himself as Chancellor should instead have been doing that this last decade. No wonder so many are calling for him to get that power now after all. It's one thing for Labour to finally get round to implementing their 1983 manifesto, it's quite something else that so many 'Tories' are so madly enthusiastic for it.

Well, I can't disagree with SallyC that the Conservative Party is no longer right wing! However, it is not impossible for HM' Loyal Opposition to present a thoughtful strategic response to any crisis. What has been amazing is the lethargy, vacuity and seeimg ineptitude that has characterised the Conservative Front Bench response to these economic events. For God's sake, Lamont and Clarke have made more impact, which I find genuinely astonishing.

It was a very difficult PMQ's yesterday, but Dave was certainly outflanked. I think, from a political perspective, the Conservatives need to be very cautious. If Brown handles this crisis well, or just manages to appear broadly to have helped to steady the UK plc then I think that he will certainly recover some lost ground. People ultimately care ablout the economy and their pockets, not a load of crap on the environment or social justice.

If Dave and Gideon do not take a step back and react more thoughtfully, they'll face a far harder time moving into No.s 10 and 11 Downing Street than they had believed.

Not trying to get a rise out of anyone - though it seems I succeeded anyway.

I am a life long Tory voter who didn't join the party until after DC became leader.
I joined then because I could see the way forward and was heartily sick of those who couldn't.
Some [though I accept not all] of DC's critics are the same people who would love to see it all go wrong just to prove themselves right. They use any excuse to jump on his back.
There is another group who 'sing cos he is wining'.
I haven't much time for either.

The fact is I and others [like Malcolm Dunn] take a more reasoned and measured approach. We can see beyond the next news bulletin or poll.
To critisise them for not 'having a go' at a time of national emergency when people are desperate for confidence - about something they cannot alter, without access to the advise of the Bank of England etc. seems 'rabid' to me.

The very fact that a performance at PMQs is being poured over with such intensity demonstares a failure to see the bigger picture.

If that's trolling - so be it.

Yes Iain at 13.28, you're right. But we're better than them. Brown will get his just desserts one day.

No banker will ever do this again.

James, that's what people always say. But they will do it again when a new generation comes in and think they know better than the "old fogies who were not half as clever as we are".

Over-regulation isn't the answer, but regulation REFORM is needed. Bankers shouldn't be lynched, but they shouldn't just be given a slap on the wrist and a stern talking to either.

Mark Hudson

'Well, I can't disagree with SallyC that the Conservative Party is no longer right wing!'

A silly comment. Not right wing enough for you perhaps.

'Dave and Gideon etc...'
An immature dig, normally confined the more purile left winger bloggers.

'If Dave and Gideon do not take a step back and react more thoughtfully,'

Can I suggest you take some of your own advise.


1. True.

2. Purely factual.

3. You might care to take some lessons in punctuation, grammar and spelling.

Agree with both Malcolm and SallyC's contributions to this thread. Yet again we have the hysterical rantings and anti Osborne Lobby out in force, got a problem here, bash Osborne rather than the man sitting in No10 right now!

There was a distinct strategic change by the Conservative leadership during their conference as this present economic crisis began to gain momentum. It was yet another example of how politically astute Osborne and Cameron are, and showed instinctive timing and leadership, which is a very difficult feat for an opposition at time like this.

There were stark differences in the approach of the Labour party under Brown, and the Conservatives lead by Cameron yesterday in the HoC's. The Conservatives *got* the seriousness of the situation and responded correctly rather than going for cheap political gain, which IMHO would have been totally inappropriate during yesterday's turmoil.
The Labour party on the other hand, thought that crowing about some good old punch and judy politics was appropriate, I found it as staggering as those on here that get worked up about yesterday's bout in the HoC's when we have got a very grim 2009 to get through.

Cameron gave Brown a platform to big up that economic *rescue* package, whether you agree or not, its the only product on offer right now. Brown returned that favour with his usual ill grace.

I could not give a toss what the Tories might do differently right now! They are not in power, do not have access to the data that our present government do, and are certainly not in a position to thrash out a global plan with other leaders of the G7.

Bottom line, Brown and Darling had to get their heads out of the sand and they had to stop dithering! I think that Cameron and Osborne realised that a long time before Brown and Darling did, and they got them into the drivers seat and started the bl**dy engine for them during the Tory conference. That is good politics and leadership, not worrying about petty day to day point scoring.

And that is what has concerned me most about the behaviour of this government, they were planning and implementing a cynical political reshuffle last weekend after the rebellion was already dying, but, while this crisis lurched onwards and downwards.
This Labour crew being in charge over the next 18 months terrifies me, I would rather have some bi-partisan involvement with a loss of political momentum if it stops even some of their usual incompetence!

I agree with Sally that the attention paid to just one PMQ is ludicrous. Cameron can't be expected to win every time. If people are genuinely concerned, I would say they currently have little to worry about and should be glad that they're so far ahead in the polls.

Otherwise, I think they want him to fail because they don't like the fact he isn't pandering to their own views.

@ Malcoln Dunn

Not a very credible or worldly response from you, if I may say so.

Re: Yesterday's PMQs. Nick Brown had Labour heckers planted around the chamber, who then performed on cue. Why ? To make Cameron look poor on TV in the eyes of voters [which he did]. There was no thought from Labour about poor taste etc, because these guys are tribal politicians. When will Tories like you realise- and you have had 11 years to wake up- that we have got to start playing the man, and not the ball.

To beat Labour, we are going to have to beat Brown, Mandleson and Campbell at political strategy, a game at which they have excelled since 1994. The Malcolm Dunn brand of political complacency would premumably put the combined might of Caroline Spelman and Oliver Letwin up against this lot.

Please Malcolm [ and others]- get real !

Voters care less about our strategy, than the Tory politicians we have who are imparting it, and by any reckoning ours have been dire. I do wonder if George Osborne actually realises that Labour has a majority of over 60 when he comes out with this trash.

Move him, and quick !

I agree with Malcolm Dunn @ 13.13 (we often seem to agree with each other but I assure everyone I am not him!)

It was right for Cameron to support yesterday's measures because the measures were right. There will be plenty of time to pin the recession on the Government when we get there. In early September when Tim did a summary of August for those who had been away, I posted here that the certainty of the forthcoming recession was a key August development. It's amazing to think that back in July there were still quite a lot of people saying there wouldn't be one.

I do not think the right is traumatised but certainly anyone on the right the least bit thoughtful might want to stop and think a bit before sounding off with fundamental conclusions about what has happened over the last few weeks and days.

One myth that must not be allowed unchallenged is this nonsense press expression that the banks have been nationalised. They have not; and those saying they have are putting the politics before the finance and economics. It's a good joke of Tuesday night about implementation of the 1983 Labour Manifesto having been turned into supposedly serious analysis by Thursday morning.

That is not to say that much has not changed. It has:

1. These events are unpredictable and could have unpredictable political results, as well as economic. So Andrew Lilico and Tim are right about the next election.

2. "The economy, stupid". Much a I like and admire Oliver Letwin, the idea that economic issues have been superceded by social ones is, ahem, superceded.

1. Enough said.

2. It might be factual to say someone has a boil on their face. It doesn't meke it polite, relevant or mature.

3. If you take some on the political strategy and manners.

Hello Chris. Fancy seeing you here?

"Yet again we have the hysterical rantings and anti Osborne Lobby out in force, got a problem here, bash Osborne rather than the man sitting in No10 right now!"

No we are 'bashing' Osborne for his failure to 'bash' Brown, I and many others are putting up issues over which Brown should be 'bashed' but are exasperated at the ineptness and failure of the Shadow Treasury team to do their job!

"Hello Chris. Fancy seeing you here?"

You are a bad influence...Could not resist taking a peek to see how you got on, also just wanted to add a bit of back up for you and Malcolm on this thread.

London Tory.

'Re: Yesterday's PMQs. Nick Brown had Labour heckers planted around the chamber, who then performed on cue. Why ? To make Cameron look poor on TV in the eyes of voters [which he did].'

Its your opinion that it worked. Others disagre including Bradby.

'There was no thought from Labour about poor taste etc, because these guys are tribal politicians'

Quite right. Doesn't mean it was either the correct response or that it will pay dividends. All polling shows that aggression against others parties - if the anger is not shared by the public is counter productive.
You might not be the only voter who can spot poor taste.

'To beat Labour, we are going to have to beat Brown, Mandleson and Campbell at political strategy,'

I agree. They are following one. You might not agree with it. I do. We will have to wait and see who is right.

'Please Malcolm [and others]- get real !'
Malcolm is one of the most thoughtful posters on this site.

I'd like to add Londoner to that list.
I good post sir [I am assuming your a man!].

Yeah, ChrisD, "The Conservatives *got* the seriousness of the situation and responded correctly rather than going for cheap political gain, which IMHO would have been totally inappropriate during yesterday's turmoil" - thank God Dave didn't crack any cheap shots about bankers and their bonuses, eh?

Is Labourhome too infantile for you?

@ Sally

You claim that our Treasury team is following a strategy. Could you please enlighten the rest of us as to what it is? I have heard Messrs Osborne and Hammond on many occasions over the last week, and aside from offering full support to a Government that has a majority of over 60, I have heard nothing.

John Humphry's asked G.O on the Today programme yesterday whether he supported an early cut in interest rates [which duly happened], G.O floundered AGAIN, and spluttered that a Shadow Chancellor should not second guess the central bank etc. It is just not good enough.

Finally, can we just nail one tired old canard on the head here ?. You can be both a supporter and admirer of Cameron- I voted for him in 2005, whilst at the same time say that his response to the financial crisis, and that of Osborne, has been woeful to date.

ACT, it was a graceless bit of punch and judy when Brown throw that one across the despatch box at Cameron yesterday, a further day has not improved its vintage.

Dave's point about banking bonuses was as fatuous as the rest of them. How exactly does he think he is going to control them? And is he talking about the executives of banks or those who are traders and investment bankers with highly leveraged total compensation packages?

Bizarrely, given everything that's going on, it's a beautiful day here in Canary Wharf.

What vital point the Tories could make is that the current bail-out (coordinated govt funds+BOE rate cuts) would not have been possible if we had been members of the Euro where there is a perhaps fatal disconnect (ECB can't offer bail-outs and national govts can't cut rates).

That said, I am assuming that Cameron has not quietly dropped his pledge to keep our GB£.

Dear goodness, is it impossible, physically impossible - their fingers perhaps being unable to type out anything heretical - for the true-believers here to accept that Dave doesn't get everything right? People like ChrisD there, who when they have cited to them Dave's fatuous, illogical, dishonest, faux-populist, opportunistic sideswipe at bankers see this as evidence of Brown's partisanship? Or SallyC, who affects to think that anyone critical of Dave right now must be a Labour troll, even when, er, what I'm at any rate disagreeing with him about is his tame acquiescence in Labour's part-nationalisation of the commanding heights of the economy? Believe me, I can understand exactly why Cameron no longer stands behind the principle of personal responsibility, I'm just confused why the rest of you are so determined to join him there. After all, most of you don't have the long track record of things Dave doesn't and won't take personal responsibility for.

"Ah yes, the madness that let the Bank of England determine interest rates. Far, far better that Gordon himself as Chancellor should instead have been doing that this last decade."

Where did I say that? Please give me the quote where I said Gordon Brown should set interest rates.

I want them set by the market i.e. getting rid of the central institution, be it the government or the B of E, that manipulates interest rates.

SallyC: thank you (and I am a man!)

"the country wants a Tory Government and that they think the Tories are the ones who can turn the country around economically."

Alas I think that this is not yet the case. More a question of it doesn't want this Labour government, with Tories being the only viable alternative. Too much scope for being knocked back by random political vicissitudes in the run up to next GE!

I accept the points made variously re being supportive in current national turmoil, keeping ammo dry pro tem, etc, but at some stage before too long the party is going to have to present positive, differentiated reasons to vote for them rather than just against the other lot. Otherwise risk not getting a sizeable majority needed to display firm government.

One hopes that Cameron and co. have a plan. They are really letting the party and the country down by not providing a coherent opposition at the moment. If we manage to snatch defeat from the jaws of victory and lose this election I will never forgive him.

And thank you from me too Sally! London Tory, not sure how many people you think actually watch PMQ's but I really doubt that it's many. Cameron looked OK on TV in the news bulletins which most people will see. I am not averse to playing the man at all as several commentators on this board would attest, however I think the national interest comes far above party politics and in the absence of an alternative strategy Osborne has done what he had to do.I do not see what we have to gain by kicking our own side.I've listened to Clarke and read Redwood, are they proposing anything different to Osborne? Not that I'm aware of.
I hope and pray that Brown's strategy works not because of any benefit that may accrue to Brown but because if it doesn't millions of my countrymen will suffer.

Anyone reading here and trying to come to a conclusion must be incredulous. Has it occurred to anyone that Cameron at PMQs was giving Brown rope to hang himself? The public won't bother but, from now on, the Tories can bash Labour as the crisis unfolds because of Brown yesterday.

The anti-Osborne comments are hilarious, I thought Simon Heffer did it so well, on Tuesday he went out of his way to congratulate Osborne on his speech on Monday, to-day he is saying he is becoming useless! One contributor above, unbelievingly in the same post, blasts Cameron and Osborne for not saying something he might like and then, you know who I mean, says Cameron and Osborne need to take a step back to think things through before saying anything. One unfortunate propensity Right wing people have is to emulate Corporal Jones, it’s not very edifying with the exception of those who also point out the extent that Brown &Co are responsible for most of this mess and worry that the point has not been made loudly enough.

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