It's the first working day of the New Year and already there is some gloomy economic news to impart. I fear that it rather sets the scene for 2009.
There are two sets of figures relating to the housing market which have been released this morning:
- House prices fell by 16.2% during 2008 - the biggest drop for a calendar year on record, according to the Halifax.
- Bank of England data shows that the number of mortgages approved for house purchase dropped to an all-time low during November.
Shadow chancellor George Osborne has reacted by saying that this is proof that the Government's policies to deal with the recession are not working:
"First we discovered that there were fewer shoppers in December despite the VAT cut, now we discover house prices are falling sharply and mortgage approvals at a record low despite the stamp duty holiday introduced three months ago.
"The new year shows that Gordon Brown’s policies are not working and the recession is getting worse not better. That is because an economic recovery depends on confidence in the future, and people do not have that confidence while we have a Labour Government in power bankrupting the country."
Jonathan Isaby
Gloomy news indeed! Now what are WE going to do about it?
Posted by: Sally Roberts | January 02, 2009 at 12:17
I fear that there is worse to come, with strong rumours of massive job cuts at Microsoft in a week or two - http://richardwillisuk.wordpress.com/2009/01/02/new-year-gloom-at-microsoft/
Posted by: Richard Willis | January 02, 2009 at 12:24
Are falling house prices bad? Given that, are falling mortgage approvals bad?
Posted by: Mike A | January 02, 2009 at 12:33
Your title is 'George Osborne reacts to the gloomy economic news.' I personally would have more confidence in his suitability to be Shadow Chancellor if he had PReacted to it.
We do not have any concrete evidence whether he and the rest of the shadow cabinet have the slightest clue what to do other than to meekly follow behind the government actions - or rather lack of actions. At this stage of the electoral game the opposition should be setting the agenda not following events. It is not a good strategy to merely wait for Brown's inevitable failure and then hope to reap an undeserved reward. Bold policies need to be announced - intelligence needs to be shown. Both are lacking at the momoent I'm afraid.
Posted by: JS | January 02, 2009 at 12:42
Better
But he needs to have a different attack in the press every few days.
Posted by: Opinicus | January 02, 2009 at 13:11
Yet more proof that Gideon Osborne does not have a single idea as to how we might best tackle the recession.
Thinking about numbers hurts his brain.
Get rid of him and put John Redwood in his place.
Posted by: John Coles | January 02, 2009 at 13:16
Absolutely Sally! People I meet are getting increasingly fed up with hearing our criticism of the government but not offering an alternative.
Posted by: Malcolm Dunn | January 02, 2009 at 13:31
People rack up credit on the basis that "tomorrow never comes" - perhaps 2009 is the year of tomorrow.
Posted by: Tom FD | January 02, 2009 at 13:41
"Absolutely Sally! People I meet are getting increasingly fed up with hearing our criticism of the government but not offering an alternative."
Posted by: Malcolm Dunn | January 02, 2009 at 13:31
That's the problem right now. It's not that Osborne and Co don't have any policies it's just that the rarely say them and never project them as a package. Osborne should take oportunities like this to also, note also, push some of his policies. Even voters think kicking Brown is too easy.
Posted by: David Sergeant | January 02, 2009 at 13:59
The important thing is to keep people in work. The Conservatives have said that the best way to do this is to have national loan insurance scheme for businesses small and large. So far, the government has ignored this idea. GO has proposed this as well as other ideas.Conservatives who say that GO has no suggestions should keep up!
Posted by: Perdix | January 02, 2009 at 14:01
"It's not that Osborne and Co don't have any policies it's just that the rarely say them and never project them as a package."
I think this is right, David Sergeant and I hope the Leadership are reading this right now! I remain my optimistic self and believe that we need to watch this space and news items will appear over the next few days and weeks which will cheer us.
Posted by: Sally Roberts | January 02, 2009 at 14:17
With todays figures it shows the Caroline Flint leaked document was way too optimistic saying 5-10% price drops anaually at best. And 2.2% fall in the last month!
The Halifax boss reckons prices will fall another 15%, though to be honest he might as well pick a number out of a hat for all the good its worth...
Posted by: James Maskell | January 02, 2009 at 14:47
Oh dear!
I do hope we're not going to have yet another boringly long and tedious year of shouting what is wrong, and not making a constructive sentence to shout what we will do to put it right and that "for the country's sake" we NEED a General Election !
Look !
I'm as true blue as the bluest true blue, but I WANT my party to tell the country and this lousy government that my party WANTS AN ELECTION because it WANTS to implement the commonsense, workable, and meaningful policies which this damn government won't because it's got no idea !!
George Osborne will you please tell this country what you would do and please tell it that you'd do precisely the opposite of Labour because Labour couldn't run a tap to make a cup of tea without having a committee meeting, several researchers, a team of advisers, and twenty five tick boxers to make sure it was healthy, not dangerous, wasn't harming kids, isn't illegal, no one will complain about it who could possibly vote Labour, and has nothing to do with the do nothing Tories because they'd have drank the flaming thing by the time Labour had checked the hot tap from the cold and found a kettle !!
Seriously, if we go another full long year with criticism only, then I doubt I'll last to drink that Tory cuppa ! Purleeeeeez !!
Posted by: rugfish | January 02, 2009 at 14:52
I'm going to end up getting myself banned for repetition here, as every other contributor will this year if someone doesn't do something of what the grass roots want to hear, and SHOUT for an ELECTION !
But here goes again with my copy and paste, which I can almost guarantee will not be listened to and will end up with me having to re-register on account I'm going to be banned !
________________________________________
Yesterday, I wrote a piece about David Cameron's New Year Message, which basically said that I felt it lacked a few ingredients if it was intended for the purpose to rally support and to give confidence. That the party was able to offer hope of a new era in economic thinking, a way out of the mess Brown's government has put the country into, and a spark of imagination which could lead the Conservative Party and the country to victory over Labour at the next general election.
As usual, and like many other people I guess, I slept on it, deliberated over it, re-read his message a few times, and looked to see whether I was wrong. Had I missed something I thought?
Well coming at it again, I think everyone can feel that the economic misery which we should ALL be feeling, is being staved off to a large extent by large injections of taxpayers cash to get Joe Public spending again. That's the plan now, but as we all know, this isn't working otherwise if it was, we wouldn't have 115 businesses going to the wall each day according to a BBC report last night, and we wouldn't have a wrecked car industry or mortgage sales declining to minus £5.7 billion. Instead, we'd have 'confidence', sales and higher rather than lower employment.
So thinking about David Cameron's New Year Message, I got to wondering about why he alluded to the essential truth, that "People are looking to us for hope in these dark days and we must be ready to offer it. Why he says we need, "responsible government and responsible business with an emphasis on lower taxes, less state interference and sustainable growth", and why he says, "Tories must be ready for an election "at any time", yet still doesn't offer an actual plan of action for the future he's telling us to look forward to and which he confesses he is ready to offer?
Q - He doesn't want to give away his plans because Gordon Brown will nick them and he feels credit will be lost for what amounts to Tory policies being taken and used by a Labour government?
A - This would be a fair enough strategy I'd say, if he wasn't fallling behind in the polls, we weren't about to enter the biggest recession on record, the government of the day wasn't placing the entire economy at risk, jobs, businessess, homes, future pensions and the value of our currency had not all plummetted like stones. I'd agree with him further if him leaving out the missing ingredient of how to his speech, if there was no foreseeable chance of gaining support for and in a general election.
However since all these things ARE the case, then I have to wonder whether there was an actual purpose to his speech other than look at me, I'm here if you need me, I think the government has been in power too long, I can't really offer anything different, but I hope you don't forget to vote for me at election time because "I promise to be responsible"? - So is that it then or is there more?
You see the reason I ask, is because you are the one who said "The Conservatives - "must offer" - a "positive vision of change" - "to help people through - the "dark days". So I'm naturally asking "How", but I'm hearing no answers and I know I'm not alone.
Many Tories are actually starting to make up their own policy lists, or more accurately, their wish lists. Me too. I've taken recently to write big lists of the changes I'd like to see, take it upon myself like others to make copius notes of what will deliver confidence back to the economy, to jobs, businesses and to housing, and I've also jumped on the bandwagon of challenging my leader whereas previously I lay idle in the anticipation he'd deliver the plans I need to see in order to inspire me and the country. Sadly, I have to say it is lacking the ingredient here of a plan.
Plainly, what has been said so far isn't good enough to make the population or I, jump through political hoops with excitement and anticipation of the next election and it is making me start to question the strategy ( if it is a strategy ), to say "nothing".
I feel it isn't appropriate any longer, in the face of mass unemployment, massive government debt, incorrect taxes, a wasteful VAT cut and over-spending and spin by government, to just keep sitting back and waiting for my leader to acknowledge the "actual" changes which are needed to put it all right.
This is my plan.
I can see nothing wrong with it.
I cannot see Brown could copy it without reversing his own policies and making himself look a bigger dickhead than he looks now.
So why wait to deliver a rousing speech and a plan, when you can :-
Cut income tax back to 10% for the low paid.
Cancel the VAT cut.
Reverse the 20% tax back to 22%.
Remove stamp duty from the buyer and place a higher tax of 5% on the seller, and cancel HIPS.
Make a distinction between BTL's and Residential Mortgages and ensure prudent lending rules are followed.
Merge banks which have soaked taxpayers money or tell them to raise their own capital otherwise they'll be nationalised.
Cancel the governments spending plans beyond 2010 and write your own and include British built nuclear power stations and coke stations in those plans.
Tell the people you will not allow our veto and our rebate to be given away in Europe and you will restore an independent and sovereign parliament as the Red Lines Blair agreed have already washed away before the ink is dry.
Tell the public that "some extra borrowing" is unavoidable as Brown has committed the country to many plans which cannot be changed until he's out of government, and tell them you have a plan to repay it over a sensible period which will avoid as much damage as possible for families, taxes and our economy which you want to see regain its strength quickly.
Then ask the people to look at what you are offering and to make their mind up whether it is change, whether it will deliver responsible growth in a socially responsible country, and whether your way is more prudent and fair than the despicable way Brown has led this country without asking a soul in it.
If you don't get public support then I'll eat my hat, but if you don't ( and it's fairly unlikely you won't with such a plan ), then so what ? You will be able to stand at the ballot box after an election and keep your plans to yourself just as you are doing now so what is there to lose when a new era HAS to be ushered in ?
There's everything to gain and nothing to lose by trying, is what I'm saying, but are you listening ?
Posted by: rugfish | January 02, 2009 at 15:03
Houses were over-valued, artificially with credit that grew unchecked for about a decade.
We have a lop sided economy built too much on consumption and housing, not enough saving and investing in high technology.
It's good news that house prices are falling - it'll make the country a more cost effective base to operate out of and give younger people a chance.
I agree the consequences of falls are painful for those already committed to buying on the old prices, and even more disastrously, pension funds which were invested in property, now paying out pitiful amounts to those who aren't so well placed to just go and earn extra cash.
All this shows we must rebuild the economy in a different way this time to avoid these mistakes, lowering taxes and regulations on small businesses so they can come in and do more.
There must be less waste on high wages in the public sector.
There will still be many successes in 2009, and I hope for all our benefits, the downturn isn't too severe, but some of it is an essential correction.
Posted by: Joe James B | January 02, 2009 at 15:10
If it's an "essential correction", then it is the people being "corrected" for mistakes made by government. Why should householders be "corrected" by losing tens and hundreds of thousands of pounds in their home equity, tens of thousands on their pensions made worse by the jobs they and their sons and daughters lose when this government is taking the insane actions it is taking in order to COVER UP its mistakes, WITHOUT asking the people whether they agree with it.
If it is your opinion a natural correction must occur, then I do not share it. Am I to be denied any choice in the matter for want of asking to let me decide in an election or for my party failing to ask for it and if so why ?
Posted by: rugfish | January 02, 2009 at 15:22
Perdix @ 14.01 states 'The Conservatives have said that the best way to do this is to have national loan insurance scheme for businesses small and large. So far, the government has ignored this idea. GO has proposed this as well as other ideas.Conservatives who say that GO has no suggestions should keep up!'
Perdix is wrong to insult other Conservatives who post on these columns. If even politically interested people cannot 'keep up' to use his words what chance is there of the vast majority of the electorate knowing what the Conservative's alternative economic proposals are !! This is a total PR failure which reflects on GO, 'Camerloon' and his Central Office team, Untill a few weeks ago there was no alternative policy, the policy was the same as McStalin's. Then DC & GO announced they were not going to follow the Five Year plan and the Conservatives would develop alternative economic policies. They have developed these policies so incompetently that even Party supporters are struggling to know what the policies are. What chance the elector at the ballot box ? The Party's much vaunted (and very expensive) new PR team does not appear to be working. If a Conservative activist on the doorstep does not know what the alternative policies are to explain them to a confused elector then to quote Pte Fraser 'We are doomed !'
I seem to remember a previous Conservative leader who set out her policies clearly before a General Election, who showed the reasoning/research behind the policies, argued the case for those policies and had media coverage for those policies. That was a Leader called 'Thatcher' !! Of course some idiot will probably come on stating that the media will not give 'fair coverage' to any Conservative alternative proposals. There are two answers to that. Firstly the media were just as unfriendly to Maggie pre 1979, in fact they weren't much friendlier after 79 (Murdoch group newspapers are exempted from this remark). Secondly even if the media will not cover Conservative policies we have a situation here where even Party members are in the dark about GO's alternative economic proposals. That tells me the Party's internal lines of communication have completely failed.
Posted by: ivantheyidfrombradford | January 02, 2009 at 15:26
May I suggest that if you have a Conservative MP, you ensure you communicate with him/her and say you expect Team Cameron to start The Big Hitting now.
I've made the point to my MP, and I'm sure his Association Executive will do the same in the next couple of weeks. Our MPs then have a mandate from Party supporters to report back to the Shadow Front Bench.
I think it's possible that DC was delaying his reshuffle until Mrs Spelman was sorted out, but given the incredible delay, I think he should take action now, to give the new team time to settle in - in 12 months, we will be gearing up for an election and the time will flash past.
(I'm putting my money on a 2010 election)
Posted by: sjm | January 02, 2009 at 17:26
Perdix;GO's policies may be good but most are unaware of them.He needs to raise his game somehow.
Posted by: michael mcgough | January 02, 2009 at 18:46
If the Conservative Party was a rugby team, GO would be its stand-off half. In this respect he is more of a Danny Cipriani than a Jonny Wilkinson. During this economic crisis he has done the equivalent of kicking the ball into the oppositions hands, when he had a huge overlap in the polls with which to score a try and put the game beyond Labour's reach.
Like Danny Cipriani, GO is a talented player but seems to lack the mustard to play on a national team. I know that if Cameron dropped him he could cause great damage by throwing his toys around. But he needs to take a good hard look at himself and possibly pay a visit to the political equivalent of seeing a sports psychologist.
Posted by: Sandy Lovatt | January 05, 2009 at 13:36
First working day for the likes of Osborne perhaps but for most of us (self employed)it is the 5th.
Richard said:
" fear that there is worse to come, with strong rumors of massive job cuts at Microsoft in a week or two - http://richardwillisuk.wordpress.com/2009/01/02/new-year-gloom-at-microsoft/"
Like so many of the companies that are in trouble MS has nobody to blame but themselves. Vista was/is a massive rip off as was XP an OS that was forced on the public rather than (like win9x) one they wanted to install because it represented value for money and massive improvements. MS's bullying attitude has started to undermine their market share. Given then choice many people are buying new computers and are installing LINUX. If MS want to get through this recession they will have to stop acting like a spoilt brat of a corporation and rediscover the concept of value for money. They will also have to offer something new when they ask us to re-buy their product. MS's greed is coming back to bite them. Frankly I am delighted.
Posted by: Graham Spade | January 05, 2009 at 18:26
Micheal said:
"Perdix;GO's policies may be good but most are unaware of them.He needs to raise his game somehow."
He has policies ? Frankly all I hear from GO is more of the same old na-na-da-na-na politics, which has brought the contempt of the average man on all politicians. I think the British public deep down know that Labour has taken a massive risk with all of our futures. However they need something real from GO to believe in the Torys. As it is the longer he goes without a clear plan the more people will assume that he is hiding something from them. It will be easier for Labour to win the next election if the people believe that voting Tory=massive cuts, and a return to the bad old days of Jam for the rich and nothing for the poor. I am starting to doubt we can win this election. Dave is doing quite a good job, and is outlining some (a few) really decent policies. George on the other hand seems distracted even half asleep, as if he is on auto-pilot. Hague is usually pretty effective if uncharismatic, and where is the rest of the front bench team. Sorry I forgot, they have more important things to do, than worry about something as minor as the future of our nation. To put it bluntly Dave has to weld an axe sooner rather than later, and those with “outside” interests should be high on his list of has-beens.
Posted by: the bishop Swine | January 05, 2009 at 18:43