YouGov – Labour boosted by economic crisis
The Phi5000 figures on Friday suggested we might be about to see a jump in Labour’s support through their handling of the current economic crisis and indeed we have. A new YouGov poll in the Sunday Times has topline voting intention figures, with changes from YouGov’s last poll, of CON 43%(-2), LAB 33%(+2), LDEM 14%(-1).
The poll was conducted between the 9th and 10th October so, while the Populus poll in the middle of week would have caught part of the recent economic troubles, this is the first poll to taken after the government’s rescue plan. While the change from YouGov’s last poll isn’t that dramatic, looking at the wider trend it is a significant improvement for the government when you consider that from May to September YouGov were consistently showing Tory leads in the region of 20 points.
Asked who they would most trust to handle the present crisis Gordon Brown and Alistair Darling are ahead of Cameron and Osborne by 33% to 27% and the rescue plan is supported by 59% of respondents, with 32% opposed.
However, it is not all good news…53% of people thought that the goverment were too slow in acting and while 29% think Brown is handling things well, 37% think he is handling things badly. Asked which team they think will improve their standard of living, people also continue to favour Cameron and Osborne over Brown and Darling by 34% to 25% (why the difference? Perhaps people are taking a longer view – they trust the experienced hand to deal with a crisis, but think Cameron would do better over time. Alternatively, perhaps they are including non-economic issues when they think about standard of living).
People are, unsurprisingly, very pessimistic about the economy. On the rescue plan 67% of people expect that taxpayers will end up losing at least some of the money spent proping up banks (including 39% who expect them to loose “a lot”). 90% of people think the economy is in bad shape, 75% of people expect house prices to fall next year (4% expect them to rise), 86% of people expect a recession in the next few years (including 20% who expect a 1930s style depression).
Turning to other questions, there has been a lot of speculation about how the current crisis will affect attitudes towards free-markets. YouGov gave people a list of three statements and asked people which they most agreed with. 20% thought that “whatever the short term problems [...] the free market system with its risks and rewards, is the best way to increase prosperity” and that it would be a mistake to curb freedoms. 12% thought that the free market system was fundementally flawed, leaving a majority (54%) saying that free markets had both advantages and disadvantages and the time had come to introduce some tougher rules and regulations. Sadly we can’t really say this shows a decrease in support for free markets, since there are no comparable questions from before the present difficulties to compare it to.
Finally YouGov asked some questions about the return of Peter Mandleson… and people don’t seem overjoyed to see him back. 41% thought it was a bad appointment, compared to 17% who thought it was a good thing. 41% said they distrusted Mandleson, compared to 6% who trust him. 50% agreed with the statement that “leopards don’t change their spots, so his return to government will end in tears”. We’ll see I guess. 33% of respondents to the poll did not expect him to last in government until the next election.
Filed under: Economy, Voting Intention, YouGov
A Labour boost for the reasons I’ve stated.
It’s being perceived, at the moment at least, as something we’ve been struck by. The truth is it’s a mixture of the two, and I think that is the majority view really.
Awful figures for the Lib Dems – 12%?
Having been out canvassing today, I have to say the change is startling. Six weeks ago, even many people were still saying they would vote Labour had a negative impression of the PM.
Now, many of those who wont even vote Labour, think he is doing a good job.
I believe Labour’s revival is nowhere near to where it will get to on its current trajectory, although events are changing so quick you have to recognise that trajectory could change course again.
Still beggars cant be boozers, and for the time being at least, it’s game on!
“Game On” – I don’t think so ! This POLL is reflective of a very worried UK population seeing Brown on the TV and clutching at straws hoping that he can get us out of the mess we are in – it won’t last when they see their £50+ billion disappearing as the 0.5% interest rate reduction has been swallowed up.
Watch this space !
The polls are interesting for everyone at the moment – I can forsee Labour reaching 36% in the not too distant future and the Tories on around 39%. If the Libs polled 17% then Labour would still have around 45 MP’s more than the Tories in a hung Parliament.
It would only take a bad publicity story about Cameron, maybe from a previous era, to knock a couple more points off the tory level of support and then they are in trouble.
Watch out for a snap election – Thatcher style!!!
With mortgage rates for existing mortgage holders set to tumble over the next year and base rates at around 3% people won’t want to be faced with Osborne’s viewpoint that mortgages are too cheap – they might just rather settle for the devil they know and re-elect Brown!
A friend from the Tory party pointed out that anything less than 38% for the Tories in an election would give Labour a majority! It’s not over ’till the fat lady sings!!!:)
Its panic stations at the moment. One way or another it won’t last.
A recession will bite.
‘It could have been worse’ doesn’t have the same ring as ‘Things can only get better’.
The 20 point leads weren’t real. That level of negative coverage couldn’t last.
This level of so called ‘positive’ coverage for the Govt and no coverage for anyone else can’t last either.
The true state – minus the strange circumsatnces both before and now – is probably somewhere in the middle.
Once things have settled down I expect the Tories to still be in the lead and then build on it as the tough times bite.
Personally I don’t buy all this rubbish that this is something that has just happened to us.
The Americans were more reckless in lending – it seems they lent to people without any credit checks atall in some cases.
But the effect in Britain is actually more severe because of bottlenecks in the system which soon become inflationary.
It looks like a banking culture which has grown up in several countries but all have been part of it.
The Tories killed central inflation in the early 1990s. Labour did the right thing to lock that in with Bank Independence, but the machinary was inadequate beyond the core central inflation figure.
Easy to say after the event I supppose – but the signs have been there.
I agree with Sally C. Labour will remain higher than before the recent crisis though, and the General Election result will be fairly close in seats at least, as I always thought.
Could you please ask Mike “the oracle” Richardson to explain why he writes POLL and so on in ALL CAPS the whole time? It looks very very strange.
Apologies for that. I thought it was an email form! Left out my real name too. I shouldn’t post this late at night. Sorry Mike if my comment sounded brusque; I’m just curious, not annoyed!
well i know its late and im going sleep soon but, to me it seams like the govenment has had some good press over the last few weeks and this is having an impact on the polling figures, this is for two reasons gordon brown looks like he’s trying and people like that and number two all the main parties agree with the govenment that somthing needs to be done and this in turn puts the govenment in a good light for now, and richard yes i think their could be a snap poll unless we forget that the king of losing it bottle that is will have to call an election dose he have the bottle to do so???? i would say no.
Polls taken in the middle of a major crisis don’t really tell us much except how people feel at the moment they were taken. Given that the situation is so fluid and changeable, voters’ responses will be too. I’m not sure how Brown can capitalise on this small boost in the long-run. If the recession is as bad as predicted, in another 18 months people will be mightily hacked off with the govt, because that’s what happens. Even if it turns out to be not quite that bad, Brown can’t remain in crisis mode permanently and the novelty would soon wear off for the public even if he did.
Stuart Gregory – if Brown was to call a snap election in the middle of this economic meltdown, the public would rightly think him insane.
Weighted Moving Average 43:31:16. I very much doubt whether Labour will get any lasting political credit – they helped light the fire and then want praise to helping put it out, while Gordon is transparently having fun spending £200bn of other people’s money.
As I suspected the gap is narrowing because the Government and GB are getting all the coverage at the moment and the financial crisis is masking all the reasons why the Government were so unpopular previously. In addition the Opposition have been sidelined at the moment.
Will it last? Hard to say. But if labour stabilise at less than 10 points behind we may have a general Election in 2009 yet.
NBeale Most people out there know that NuLab helped stoke the fire (of deregulation etc) – it was the Thatcherite Tories who lit it along with their Reaganomic cronies, and before that the asset strippers of the 70s – Goldsmith and his ilk. Listening to George Osborne trying to defend this charge 2 or 3 times on TV now, he just gets very indignant, but of course has no proper answer! Overall, it will weaken the Tory position, until and unless they can actually lay claim to a new political and economic model (we need one to prepare to resist global warming and adapt to peak oil etc anyway.)
The oncoming recession will surely reverse this “comeback” though won’t it?
One thing that no pollsters have seem to have asked is whether there is any support for a wartime style National Government to ride through the crisis.
Things may not be that bad yet, but it may be an idea that gains support. I know that there are a lot of people, of all political persuasions, who’d prefer to see Vince Cable in cabinet to Darling.
What definitely doesn’t go down well is the kind of kindergarten insult-trading currently going on in the US Election. It looks totally pathetic.
[...] The latest YouGov poll shows Labour has sustained its conference bounce and is once again able to hold its own above 30% in the polls. Labour closing the gap [...]
I sincerely doubt Brown will call an eletion until he is ahead, good idea though t might be to cut and run if and when Labour trailed by a small margin.
The longer this goes on the more people will suspect that Brown is deliberately worsening the crisis for his own ends. Until Labour actually start winning local council seats and the Glenrothes by-e;lection they are still in trouble.
My response to this and the forecast of a skinny Tory majority is that Cameron has only got himself to blame. He has endorsed almost uncritically Brown’s plans so – not surprisingly -at the moment some of the voters forget who was the prime cause of the near-collapse and feel that they ought to back the author of the rescue plans – after all, Cameron does!
I’ve been saying – to considerable flak from Tories – that Cameron is wet. It now seems that he hasn’t grasped what the crisis is about and is economically floundering. If – as seems more than possible – Labour wins a fourth term it will be the fault of Cameron and his juvenile advisers.
They should get out there and pin the blame squarely where it belongs. Every endorsement of a government policy should carry a Tory Health Warning that ‘It was Brown that caused it’
That’s nonsense. Even most hardened Tories wouldn’t think that……would they?
Wolf’s conclusions though are probably correct. This is a mini-recovery not at this stage a sea-change one. Clearly whether it is sustained depends on whether Gordon Brown’s remedies work. If they do start to work, then Labour’s recovery could continue. I very much doubt whether there is any likelihood of a 2009 election unlike some of your correspondents.
Richard,
I do not recall Thatcher having called a ’snap’ election – 1983 and 1987 hardly fall into that catergory! The last snap election that comes to mind was the February 1974 election called by Ted Heath.
It also does not follow that a Tory rating below 38% implies a Labour Majority- this would also depend on the Labour share of the vote. If the Tories received 37% whilst Labour got 35% the likely outcome would be a hung Parliament rather than a Labour majority!
sorry the “that’s nonsense” referred to wolf, not Christina Speight.
Christina, how I wish that the Tories could generally go ‘on the attack’ and point out how, as I see it, society has been almost irreparably altered for the worse by Labour.
However I disagree that this would be a good idea. I think that we live now in an ‘unpolitisised’ country, in which there are very few people who even understand the basic arguments to any great degree, preferring to switch over to a reality or show-biz program at the merest whiff of any substance on TV.
In a world where most undecideds actually MEAN IT when they say “they’re all the same aren’t they!” it’s best to remain uncombative and ‘nice’. Blair understood this and played only to the lowest common denominator, lots of fake ‘emotion’ and populist announcements of little substance, all the while slowly growing ‘the state’ and undermining ‘the family’.
The silver lining is that as things have finally begun to go off the rails it is slowly opening peoples eyes. The Conservatives, when in power, may be able to be a lot more honest with people.
Sorry to spoil the party for the Labourites, but Brown didn’t even call an election when they were supposedly in the lead in 2007, so what are the chances now?
Ivan,
It is worth pointing out that many people saw little that was honest about the last Conservative govt. As for ’society’ Thatcher told us there was no such thing!Beyond that she tried to raise selfishness to be a virtue – and the extent to which she succeeded – and had her values accepted by new Labour -has laid the foundations for many of the problems we face today.
Actually this is what she said :-
“I think we’ve been through a period where too many people have been given to understand that if they have a problem, it’s the government’s job to cope with it. ‘I have a problem, I’ll get a grant.’ ‘I’m homeless, the government must house me.’ They’re casting their problem on society. And, you know, there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first. It’s our duty to look after ourselves and then, also to look after our neighbour. People have got the entitlements too much in mind, without the obligations. There’s no such thing as entitlement, unless someone has first met an obligation.”
Yep, I’d call that the kind of honesty I’m talking about.
Colin, set in its correct context, Mrs. Thatcher’s comment means the opposite of what her detractors claim.
I think that if Brown did call a snap election, if say, the poll gap narrowed to a few per cent, it would fall apart for him in a general election. Firstly, it would be an obviously cynical move, and would lead people to suspect that really bad news was on its way, and secondly, the more that people see of Cameron on television, the more they’re inclined to vote Conservative.
Was it Harriet Harman who said a few weeks ago that the British public would not forgive a government in the midst of a leadership contest during an economic crisis. How would they respond to a government calling an election at a time like this? Anyone who thinks that there is even a chance of the govt. calling a snap election within the next six months is way off the mark.
And Cameron attacking Brown and his economic policy? I don’t think people would be able to forgive the Tories for what would be seen as a political attack at a time like this.
Considering the fact that this crisis could go on for some time I don’t think that we will be having an election for a while, and then who knows how Brown will be perceived.
I think it is quite important to realise though that polls at the moment can be seen as quite meaningless. The Tories are getting no press at all and Brown is the top news story everyday.
This will change though. Eventually it won’t sell papers to have “FTSE drops 3%” on page one everyday. It’ll get pushed further and further back eventually.
BTW Just to those of you who have said before that the Tories have no economic plan. Erm, around conference time they released a 23 page document detailing how they would tackle the crisis. The fact that it isn’t a 10 second soundbite means that the BBC and other media aren’t interested.
PS To those of you talking about the Tories needing 37% etc.
The Conservatives need about a 9% lead over Labour to even form a majority. This is due to due to irregularities in constituency sizes and also the fact that Tory constituencies generally have a higher turnout that Labour ones.
Yes Sean-that’s why her detractors never quote the context.
I agree with the above on a snap Poll-Brown would not gain by it.
At the moment he looks & sounds statesman like. The UK Banking Plan seems to be getting approval in EU & USA & he is getting deserved plaudits for that.
Cameron on Boulton this morning could do little but continue the theme of cross party support which he has set in train for his Party.
He was picking away at details-Annuities age 75 Rule/Bankruptcy Laws/Shares in Banks details/ Bankers Bonuses etc. etc.
This all looks a bit “backroom” whilst GB struts Centre Stage but we will come back to the UK Economy ( as opposed to UK Banks), and the range of Domestic issues when things settle down.Then DC can start to ask how we got into this mess.
…….or The Plan wont work & there wont be a UK Economy, and Politics will be the last thing anyone is interested in.
But he is doing the job he has to do-supporting the Plan & making sure the details result in help for ordinary people
“Sorry to spoil the party for the Labourites” maybe you are reading posts on here that I cannot see but considering at least 95% of the posters on here are Conservative and the only post on this thread that possibly comes from as you say “Labourite” is hardly partying, your post seems strange.
I fear if the lead actually reduces any further some peoples post will become more hysterical.
Tony, you’re absolutely right. I think only 2 of us here, in this section of comment, are clear Labour supporters, and I hardly think Toby was crowing by saying there is an improvement in perceptions of the Party on the doorstep today; it’s simply in line with some of the recent polls. Nor am I exactly claiming victory! All I have said is that Labour is rather reinvigorated & a sense of purpose has returned, and that we’re at least back in the game, as it were. I don’t doubt that the Tories are still winning. Some of the Tory contributions are rather hysterical, and I don’t know why some of them are seriously thinking that there might be a snap election. There isn’t a cat in hell’s chance of that. Some sobriety from some of the Tories here would be welcome – though some others are always considered in their writings & I wouldn’t want to tar all of you with the same brush.
Some quotes from John Redwood :-
“Regulation of banks and other financial institutions has expanded greatly in recent years. This is a failure of regulation as well as a failure of banking. It is not that we had too little regulation – we had the wrong type of regulation regulating the wrong things, allied to weak regulation of what matters, capital and liquidity.”
“Meanwhile the UK is having one of its idiotic arguments about whether we need more or less regulation, as if this were the issue. I know of no serious commentator on money, credit and the economy who thinks the authorities should wash their hands of responsibility for controlling total money and credit in the system. The issue is not whether to do it, but how to do it. Clearly the method chosen in the last ten years, the so called independent Bank of England, did not work. Credit was not properly controlled on the way up, and is now imploding dangerously.Large amounts of new mortgage regulation did not regulate the main things that matter – how much credit is lent in total, and how much to each individual in relation to the home value and income.”
He is largely correct.
The overall money supply does need to be controlled – although not so rigidly it outweighs the benefits and is too interventionist.
The banks need to stand on their own feet soon – current policies should be a temporary measure.
There should be more emphasis on providing emergency credit to businesses, (and also urgently reducing their tax and red tape).
I’d like to see more done for pensioners – perhaps a higher level of guarantee than £50k, but also much more freedom so they aren’t so tied to annuities in poorly performing stocks.
But after all that – the chips really have to fall where they need to fall. If banks still can’t survive, they need to be left to fail. New reconfigurations will emerge, and it is necessary.
You can also put your money in a Building Society instead of a bank. But one has to be careful about issuing financial advice as party policy (not that I’m remotely qualified), because all of us want the guarantees to stabilise the banks.
M3 has gone through the roof because it wasn’t part of the Bank’s remit.
I’m glad that Colin posted the “no such thing as society” quote from Thatch.
As her reputation sinks below that of Anthony Eden thanks to the banking crisis which her policies are DIRECTLY responsible for, that quote shows just how callous and out of touch Thatcher became.
Whatever Sean Fear may think – in context or out of it – that quote is a damning indictment of a woman, her Party and supporters that were, and remain, vastly removed from the real world.
BenM – The banking crisis has been caused by excessive borrowing – mainly growth of M3, and the markets have lost confidence in the bank’s ability to recoup this money.
Margaret Thatcher actually believed in living within your means and targeted the money supply between 1979 and 1982.
Although it was too lax from 1987.
Basic economics.
I doubt Labour can win an outright parliamentary majority in 2010 (or earlier) since they only got 36% of the vote in 2005. Who honestly thinks they will poll better than 2005? Labour already have a lot of marginals that can fall quite easily and relieve them of their majority.
However, if the Tories really do need to get 40+ % of the vote just to pass the threshold of overall control then they can hardly be confident about their current poll ratings and their inability to consolidate them.
They are hoping that this is 1997, when it might be 1992 in reverse.
The way things are going, anything could happen.
As I mentioned in an earlier post – I think the parties’ performance in the polls since the conference season has had a very strong link with the publicity that they have been able to receive, over which (in the short term at least) none of them have much control over.
Gordon Brown has had a lot of publicity since his speech in late September whereas the Opposition parties have been greatly overshadowed – resulting in the denting of the Conservative lead – although Tory support has held up reasonably well. The LibDems seem to have lost out the most, their conference boost amounting to nothing more than a flash in the pan.
It will be interesting to see how long this situation will last, whether Labour can consolidate their boost or if the impending recession will take them back to square one again by the end of the year.
A good many of the preceeding 39 blogs seem to be from either windy Tories or straw clutching Labourites. Only the Lib Dems seem to have gone AWOL. So what do the latest Populus and YouGov polls tell us?
1 That some voters have rallied round the government of the day- if only in their responses to opinion pollsters- because a) they are scared by the financial maelstorm and b)Gordon Brown is perceived by most commentators observers to have for once handled things in a capable manner.
The rescue plan is a good one and it is churlish not to concede that point.The track record of the government in all this will come back into focus soon emough as will the looming recession.
2 However a glance at the recent local by election results suggest that the voters on the ground are still as disenchanted with Labour as they were three months ago.That is why I still think they will lose the Glenrothes by election.
3 Despite being out of the public eye the level of support for the Tories in the polls has hardly shifted throughout the last month.Unless it does so any talk of a meaningful Labour revival leading to an election victory is just plain old moonshine.
4 Based on Anthony’s swingometer the Tories would on the basis of these polls win an election held now with a majority of between 50 and 124 seats. Recent polls in the marginals suggest this is might be an underestimate and further I am of the view -which no doubt will be challenged -that the more the Lib Dems decline the more likely it is that the alleged electoral bias against the Tories will continue to evaporate.
5 However to me the key question at the moment is whether Labour can hang onto the Lib Dem deserters once this crisis has passed. Could Labour supporters please tell me why they think they can do so. And in turn please Mark Senior come out of your shell and tell us why you think the Lib Dems will regain their lost support.
Nick
The word ‘council’ is missing after ‘local’ in 2 above. Sorry.
The FTSE will go below 3,000 next year.
When the economic fall out really filters through to the man in the man in the street, Gordon Brown will be back in the spotlight having to answer some very difficult questions, and people will once again realise that its time for a change
I think the Tories will win the next GE whenever it is by a big margin.
I wiil be very supprised if this is not the case.
I have to laugh at some of the comments above. The polls are showing continued volatility so anyone who makes a definitive statement is exposing their own attempts to influence opinion in their favour – no comment at this time will provide an accurate analysis of movements more than one week ahead.
On a related note JJB’s comment that the financial crisis was ’caused’ by any one thing is slightly ridiculous. Events are the consequence of a combination of factors – this crisis can trace its origins back to the collapse of the Bretton Woods agreements 37 years ago and the shopping list of individiual decisions which have occurred in the meantime.
Perhaps the more interesting question would be to ask how long this period of volatility will last.
I think the polls will remain volatile until into february or march and so no conclusions about the long-term shifts in opinion will be able to be drawn until then. The Glenrothes by-election is the next significant date on the calendar, so I’ll stop wasting time by attempting to analyse interim results.
‘Chances are that this is the moment when future historians will say that the tide turned decisively against almost-anything-goes, laisser-faire financial capitalism (what I described yesterday as an important strand of Thatcherism) – which has been the prevailing ideology for almost 30 years’
Nick Robinson’s view for those tories who believe it’s solely Labour’s fault. I’m now doing something I dislike on this site but–but as I’ve been bored by the ideology of so many here–let me enjoy the moment when socialism has rescued ’slash and burn’ nasty party conservatism from the logical end of its policies. Business has no morality- as many economists observe-as it’s sole aim is profit. Let’s not forget, for example that the Nazi concentration camps were designed to make a profit.
So, we now have nationalised banking. If we took a poll of nationalising water, rail, electricity and gas I think we would find a vast majority of the populace supporting it.
Thomas,
Glenrothes will only be significant if Labour retain the seat. Any other result can be dismissed as usual “mid-term blues”. One factor which will not have gone unnoticed north of the border is that many employees of RBS and HBOS commute across the Forth from Fife. How will they feel about the effect of today’s “nationalization” ?
Far more important in terms of medium term impact will be he PBR later that month – date still tba. That is when Darling will have to come clean on the following:
- growth projection for 08 and 09
- public spending projections (including increased welfare benefits
- tax receipts – and resulting current budget deficit
- publcic sector debt figures
Also, since the Bank rescue has been structured as a government underwriting of a rights issue, the actual cost to the government will not be known for some time. It is theoretically possible that sufficient investors take up their rights to leave the Government holding a minority stake.
Sorry, got cut off in mid-stream,
At the PBR, Darling will not only have to reveal the extent of the problems with the public finances, he is going to have to come up with some realistic answers for dealing with them.
We can forget the “golden rule” or adjusting the “economic cycle”. The cupboard is bare and the public finances are bleeding.
At that point, and assuming the Bank rescue plan has got liquidity moving in the market, the media narrative will no longer be firm action to resolve a crisis, but how are we as a country going to pay for our bloated public sector and the mountain of debt Brown piled up.
I don’t think Brown will cut and run, but I also think that this boost in Labour fortunes will prove temporary, with more hideous news to follow in March.
Paul
Jack – polls consistently showed support for re-nationalising the railways prior to this! (I can’t recall any polling on nationalisation of utilities).
thomas
Exactly whose comments are you laughing at thomas?
Nick
“If we took a poll of nationalising water, rail, electricity and gas I think we would find a vast majority of the populace supporting it”
If you asked people to replace the capitalist system that’s seen both you and I and 99% of people in the western world benefit beyond their wildest dreams over the last 50 years or so (with the occasional hiccup) with a form of socialism/communism that would have us back to living in hovels like residents of some tin-pot eastern bloc hell hole in the 80’s they would answer NO!
Please! This ‘Thatcher caused it’, capitalism is dead nonsense is for immature students and idiots. It’s the only system we have that works. Socialism has proven itself in ALL cases to be flawed and in many places dictatorial. Please!
…one too many uses of the word please, appologies.
It does boil down to excessive lending which was outside the Bank’s remit – but of course there are many other sub reasons, working outwards and downwards from that.
But I wouldn’t want to over complicate it for Thomas.
JJB, you just keep on back-sliding, don’t worry about the rest of us.
Looking at Paul H-J’s point, and other news, I think Alistair Darling will have to introduce an emergency budget.
(It looks like he gets it more than Brown).
The worry is local authority spending aswell – as a lot of it is fixed, and business rate receipts are likely to fall next year (even though they are recycled via central Government).
Yes – there is a boost in Labour’s popularity in the POLLS at the expense of the Liberals – that’s not enough to win an election – let’s see what happens in the November by-election for a truer picture.
Once the stock market collapses again in a few days time and we watch tax payers money disappear into the Bank’s bottomless pit – Mr.Brown will have some explaining about where he got the money from – mmm !
Paul H-J – what hideous news are you expecting in March?
I can foresee interest rates @ 3.5%, and inflation returning to target as the cost-push inflation works its way out of the system. (Curing inflation is the first step to sustainable recovery)
The Govt haven’t actually spent money that was otherwise earmarked for paying wages, and is increasing debt – that clearly does not require an “emergency budget”
Increased unemployment by March, for sure, but that might well be seen by many as “a price worth paying” (!)
once it becomes clear that carter and clinton legislated to make it law that us banks had to lend to sub prime the wheels will come off the democtats.also that blair and brown made banks do the same(well done to barclays for not being bullied)
labours days are numbered.
Looking at Geoffrey Robinson’s smug performance on Newsnight last night (just as he boasted how he helped design the extra tax on pensions in 1997), it’s pretty clear they were so determined to suck up to the banks they took their eye off the ball.
I think it is a lending culture that got out of control, and has exposed different faults in the regulators across different countries.
But to be fair, if anyone can find me a quote from Osborne warning that the housing market was over-valued, and that M3 lending was out of control, before this September, I think I’d be willing to pay them a bet.
They’d be advised to put in Clarke, Fallon, Hague, or possibly Davis.
[...] week I said that reports of his demise are exaggerated. Well the latest poll has put him on 10% – just one point away from the magic single figures. OK, so reports of his [...]
It’s going to be very interesting to see how Labour “manage” our investments in RBS & HBOS/Lloyds.
There are quite divergent messages appearing on the “new” lending criteria as between GB & FSA
Is it economically prudent ( as opposed to politically expedient) to encourage house buying when prices are still falling?
Is it the intention to slow/halt the fall in house prices by means of Government imposed mortgage policies-the State now owns 45% of the UK mortgage market.
How much can Government actually insist on detailed interference with day to day policy?
Looking at the list of non-banking related assets owned by RBS one wonders whether the Taxpayer’s representatives will insist on these being divested?
These are going to be strange hybrid organisations-partly privately owned-partly publicly managed.
The politician’s eternal temptation to utilise their power for political gain will be no less for ministers who are able to influence significant parts of UK Banking policy.
“Is it economically prudent ( as opposed to politically expedient) to encourage house buying when prices are still falling?”
Yes it is.
To put it another way, it is imprudent, politically and economically to encourage house purchase based on a financial gamble (ie, by asking yourself “is the market going up or down?”)
Affordability and need should be the drivers, and people’s choices can be further iinformed by location, etc.
JJB,
I really can’t see any Conservative wanting to talk voluntarily about M3 because it has been rising steadily since sterling left the ERM. This is no coincidence.
M3 was the effectively the method by which we reinflated ourselves out of the recession of the eraly 90’s, but while the Conservatives started this policy it was continued and expanded upon by Labour.
Looking at it this way I think it is perfectly fair to put the blame for the current crisis on the shoulders of both Labour and Conservative politicians. It is also fair to be angry that none of them were upfront about it even if they weren’t intentionally deceptive.
Both Labour and Conservative alike chose political expediency over economic sense and therefore this period of poll volatility could be seen as the shakeout when the public finally awakens to the short-termism and lies successive governments have told us.
However I doubt this is likely at this time for the simple reason that the third parties (LDs, SNP, PC, Greens and others) haven’t been able to combine their narratives to attack the consensual duopoly and seem more intent on continual infighting on less relevant territory. Meanwhile the national media is too intertwined in the political establishment and habitually reports only government/opposition positions to the detriment of a fuller and more detailed debate, so the chances of a positive alternative rising in popularity to challenge the corrupt establishment remains slim.
I look forward to the discussion of the fallout over this crisis starting to touch upon our pensions as how this subject is reported will determine who the public blames most.
“the chances of a positive alternative rising in popularity to challenge the corrupt establishment remains slim.”
Yes, and that’s been the case since the end of the LibDem SDP Alliance.
I don’t believe the bankers themselves will escape “we were only following the orders of the Govt” simply won’t wash – here or in the States.
“it is imprudent, politically and economically to encourage house purchase based on a financial gamble ”
Indeed it is-the very point I was making in my rhetorical question.
As it was in 1999 when Northern Rock rolled out their 125% Mortgage-and when HBOS followed suit.
Both of these Banks were “regulated” by FSA-they both survive today because the Taxpayer is funding them.
“none of them were upfront about it even if they weren’t intentionally deceptive.”
There were lots actually thomas-warnings about debt levels in this country have been available from all quarters for years.
Ed Balls deserves mention for his-sadly transitory- concerns:-
Oct
2003:-
“..only the size of the recent surge in house prices has prevented household finances from tumbling into deficit as they did after the late 1980s’ property crash. UK policymakers have to be continually vigilant about balance sheet risks,” he told an audience of financiers, investors and economists. Despite the resilience of the financial sector in this downturn, we have to be vigilant to potential financial sector vulnerabilities.”
He said the Treasury was holding monthly meetings with the Financial Services Authority and the Bank of England to provide an “early warning system to deal with potential systemic threats”.
His warnings echoed remarks made earlier that week by Mervyn King, the Bank’s governor, who warned of a “risk that there could be a sharp correction to the level of consumer spending… exacerbated by the continued strength of the housing market”.
Colin,
I didn’t criticise the lack of warnings about the consequences of governmental policy, rather I was criticising the lack of debate which went on prior to forming the policy that was enacted by the very same people who later warned against the consequences of their actions.
This is why election manifestos are as important as the result of the election itself – parties only gain a clear mandate for their policy platform, they don’t get carte blanche on policy (or to change leader in mid-term unnecessarily).
So let’s pull out any election manifesto and hold them to account.
Both Mike the so-called Oracle & JJB have opined that the stock market is going to collapse again some time (please Mike try to write the word “poll(s)” without using capitals, it’s very odd!). Being a left-wing Socialist & therefore opponent of capitalism I don’t pretend to understand these things, so could we please have some analysis as to why you think that?
The economy was near the bottom of a recession when we were forced out of the ERM in September 1992 (although figures afterwards showed it had started growing very slowly in June).
Interest rates could fall to a level necessary for the new policy of inflation targeting. (Although the RPI was still about 4% in summer 1992, it would have headed for probably about 1% before long – within a year, if hypothetically we had managed to stay in the ERM and/or kept interest rates high).
Allowing some increase in credit, largely for mortgages was ok at this depressed stage, but the figures got bigger and bigger.
The economic recovery from 1992 was soundly balanced for a good few years, with exports rising above the rate of GDP, and the occasional balance of payments surplus in 1994.
Manufactured imports have also kept our inflation very low, disguising some of the bottlenecks elsewhere.
Being a party of government means you have to take difficult decisions, rather than just commentary.
imprudent…to encourage house purchase based on a financial gamble ”
“Indeed it is-the very point I was making in my rhetorical question.”
just to clear up – your rhetorical question implied it was not prudent to encourage house buying when prices are still falling
Whereas, it is perfectly prudent to do encourage house buying when prices are still falling, but not BECAUSE they are falling. The direction of house prices should have no bearing whatsoever. Otherwise you encourage gambling.
Is it prudent to buy a falling asset to-day? I don’t know, I don’t gamble that it might rise to-morrow or in 5 years. It’s prudent not to be tied into that gambling world-view.
“the occasional balance of payments surplus”
There’s a phrase from the dim & distant past. I can remember when the BoP figure was headline news-a popular measure of “paying our way in the world”
By 1997 it has returned to a surplus of £4bn.
A decade later it was a deficit of £47 bn.
You never hear it mentioned now-bit old fashioned in these times of sophisticated finance I expect.
Very true, Colin, no more so than in football club finances. Annual profit of £20million means you can service a debt of £300m, therefore go out and spend £300m. Never used to be that way, and perhaps it won’t be for much longer.
The question is, who would you trust to change the system, the old boys of Eton and their inhetrited wealth, or the rather compromised Brown-ites, who are coming out of a marriage of convenience with free-market traders and appear to have learnt their lesson?
JJB,
“Interest rates could fall to a level necessary for the new policy of inflation targeting.”
Except they didn’t fall freely, they were pushed lower by the government in order to stimulate investment-led growth. That control over monetary policy was still held by the government meant there was an incentive to keep them artificially low for too long.
And when the Labour came to power BoE independence was fudged by the twin terrors of control over MPC appointments and inflation target-setting, which had the effect of removing responsibility from the politicians by removing their accountability while allowing them to retain indirect control.
Depoliticising policy may be a good idea if it were actually to happen, but we’ve yet to experience it because politicians are loathe to refuse credit where it can be grabbed even if the lack of transparency causes the harmful instability we’re now seeing.
The managerial tendency of certain politicians belies their lack of foresight and inability to control direction. It’s my feeling that the ‘managers’ (whichever party they are in) will suffer in the polls in the medium-term, so we’ll have to wait and see which party the public adjudges to be more ‘managerial’ and less ‘directorial’.
“That control over monetary policy was still held by the government meant there was an incentive to keep them artificially low for too long. ”
Not so, actually.
Ken Clarke put them up in 1994 when the economy grew by 4 points, although this was recovering from the hole of 1992.
And the then government hit it’s inflation targets.
I was in favour of Bank Independence – and proper indepdendence, and in that sense, Thomas is correct.
Is Brown going to call a snap election?
Evening standard
link
Or perhaps next year?
Telegraph
link
The biggest political casualty of the financial crisis may turn out to be not simply the chances of the Scots voting for independence but even the mere idea of a referendum anytime soon. The nationalist party has tellingly gone deathly quiet on the issue and in addition Alex Salmond’s credibility has been badly shaken by his inane comments about ’spivs and speculators’ and his blind devotion to the senior managers who everyone else knows are the real culprits for the humiliating state the Scottish Banking sector is now in.
With independence hopefully off the political agenda for a generation perhaps all and sundry can just focus on making devolution work. After all it has only being going for 10 years so why not give it a decent chance.
“The question is, who would you trust to change the system, the old boys of Eton and their inhetrited wealth, or the rather compromised Brown-ites, who are coming out of a marriage of convenience with free-market traders and appear to have learnt their lesson?”
Oh dear john-why does it always come back to class prejudice.
I was tempted to try & apply logic by asking what the relevance of Eton, or inherited wealth is to macro-economic policy formulation…but I just know we have been here before & there is no point.
We both know who we would each trust.
The Big Question on this website is who the British Public will trust when they are asked.
“That control over monetary policy was still held by the government meant there was an incentive to keep them artificially low for too long. ”
Not so, actually.”
Well, just just because one Chancellor resisted the temptation doesn’t mean Thomas is wrong to say there was an incentive for governments to misbehave.
Though I think the actual risk was that governments would align the economic cycle with their electoral prospects, a temptation to engineer nice big booms just about the time they’d need to go to the country…
Indeed – hence why I’ve been supporting the independence of the Bank, aswell as a wider remit.
It could be that the Tories were doomed after September 1992 anyway, so they might aswell get it right.
John TT,
The school matters less than the university discipline. Personally, I would prefer someone with a degree in Economics than a lecturer in Politics.
The hideous news to come in March is what steps Darling will/won’t take to try and bring the public finances under control. Either he has to announce some serious spending cuts, or hefty tax increases, or some combination of the two. Simply increasing borrowing is not really an option.
On the snap election rumour, who knows.
The economy is going to get worse so it makes sense.
But the polls are still quite poor – just not as bad as they were, so I guess he won’t.
But as Anthony King indicates, he really has to go for it or kill it dead.
Has anyone seen the Irish budget? It’s what we used to call an austerity budget back in the old days, spending cuts and tax rises. I feel something quite like that is coming our way in the next couple of years, and it’s not going to be popular.
About Gordon Brown and his “triumph” of being the first to do what couldn’t be avoided, it seemed quite like the Harold Wilson and the devaluation of the pound 40 years ago. He called a snap election, and we know what happened.
Nick,
Independence isn’t off the agenda at all let alone a referendum. We are still on target for 2011 and intend to stay on target.
As to the Spiv’s comment Alex hasn’t withdrawn it nor should he.
Short selling of lent stock may have only have been 3 or 4% of trades, but when the water tops the dam, most of it still stays behind it but the damage has still done.
The short sellers didn’t cause the damage themselves but by visibly betting against the weakest banks with borrowed stocks they sent a signal to sell to everyone else.
They created an impression that they knew what would happen and that became a self fulfilling profacy from which they did well.
In normal circumstances hedging is fine; you borrow stock equivelent to what you want to hold in the long term so that by selling the borrowed stock and buying it back at a lower price you can offset the loss you make on the long term stock you own.
What happens in a crisis, as with Stirling in the ERM, is that sentiment can make it a one way bet and that is when hedging stops being about long term offsetting and becomes just short term money making with no thought for the long term consequences.
As to the Scotland being to small that’s the Brown line, No bank has yet failed in Ireland although they are looking at mergers, the US has lost seventeen and the Uk has effectively nationalised at least three.
Norway has just put £35bn in to it’s banks and people have been warning about Icelands policy of sucking in money chasing a good return and using it to fund leveraged aquisitions abroad has been criticised for at least five years.
I think Brown has had a boost there is no doubt about that and if inflation does drop back to 2% next year then Brown may well try to go in late 2009 as “The man who saved the world and beat inflation”.
However, if we get 2 million unemployed and house prices are still falling or static an election would still be a huge risk.
Peter.
Peter
I don’t want to sound like Mike R but my predictions next year are:
Inflation back to 1%
Low interest rates 3.5%
But
2.5M unemployed
A recession for a least 3 quarters
House prices still falling
Government borrowing out of control
If I were GB I wouln’t want to fight an election based on the last 4.
Peter
I don’t want to sound like Mike R but my predictions next year are:
Inflation back to 1%
Low interest rates 3.5%
But
2.5M unemployed
A recession for a least 3 quarters
House prices still falling
Government borrowing out of control
If I were GB I wouldn’t want to fight an election based on the last 4.
“Oh dear john-why does it always come back to class prejudice.
I was tempted to try & apply logic by asking what the relevance of Eton, or inherited wealth is to macro-economic policy formulation”
logic not your strong point, Colin – the framing was to do with public perception – the question was not for you or me, but for the general populus (like the polls). In the minds of the public, who seems more trustworthy (and how will the media polarise the two candidates)
Nothing “class prejudiced” about that.
“logic not your strong point, Colin – the framing was to do with public perception – the question was not for you or me, but for the general populus ”
It was the “framing” which introduced the Private Education & source of wealth element-but of course only in respect of the Conservatives.
You described Labour as “compromised”-you didn’t mention their education or wealth.
The “framing” deliberately highlighted the social background-Class-of one of the protagonists.
But as I said-you have done it before -so no big deal.
“No bank has yet failed in Ireland”
Peter this is the sort of disingenuous statement which does SNP’s support of it’s increasingly shaky case for independence no good at all.
If you had read the saga of the Irish Government’s decision to guarantee 100% of deposits in Irish Banks you would know that Anglo-Irish Bank was on the point of failure within two days.That is why the Irish told Brown & Brussels they had “no time “to consult.
The Irish Deposits guarantee is twice the value of the Irish Economy.As has been said the Irish Budget is drastic.
Their Banks invested heavily in commercial property-a market which is now in a state of glut.
Their Banks’ shares are trading on multiples of 1.5
The Irish Banking system is in a very precarious state.
Given this situation,along with the near bankruptcy of Iceland & the US Fed assistance to Norway, it is reasonable to ask how an independent Scotland-with no Central Bank-would have supported RBS & HBOS.
“As to the Scotland being to small that’s the Brown line,” isn’t a very impressive defence of the financial case for Independence which is under such sustained criticism in the Press at present.
The “framing” deliberately highlighted the social background-Class-of one of the protagonists.
Of course it did – that’s what the papers will do.
The compromise of Brown’s position was that he had to cosy up to the City in order to fulfil his aim to invest more in Public Services and (slowly and by stealth) to re-distribute wealth.
Of course it’s tied up with background, education, “networking” etc. It’s daft to say that’s off-limits.
I’m often extremely fulsome in expressing admiration for what a public school education can do – I enjoyed one myself, and was convinced from the day I left that complete privatisation of education provision (free of course and places allocated equitably) was the best way forward.
Of course I trust Brown more than the old Bullingdonite , but I’m not sure the electorate will.
Colin – wasn’t Ireland held up by Osbourne recently as a much stronger economy than ours, and that we should have been doing more of the things they were doing?
Colin,
More than one Uk bank was on the point of failure before Browns package, and as others have pointed out we will have to wait and see what Darlings Autumn pre budget statement is like before we can see if this is going to be as tight for us as it is for Ireland.
Yesterdays Guardian showed that the UK government is now a stake holder in banks with liabilities valued at over twice UK GDP and that the current £37bn may well rise to over £75bn with another rise in Liabilities.
We may get fairly close to Ireland three times GDP by the end of it. As for Iceland they have been reckless for years and are suffering the consequences, but that is about government policy and regulation not Independence.
The argument being made by Brown is that some small Independent states have made mistakes so don’t be a small independent state. The problem with that argument is that big states have made big mistakes particularly the US and it seems to be all right for them.
Since the recovery in the markets with the announcement of the UK and then EU rescue packages, there has been a renewed slide on the markets as they come to terms with the recession that we now face. It will be a few years before we can really tell who’s come out worst from this and who made the best decisions.
Brown and Darling are getting plaudits for this weeks announcements, but we shouldn’t forget that Darlings muddled announcement the day before saw nearly 10% knocked off the stock-market.
What we don’t know yet is how much brown will actually have to borrow, who will he actually borrow from and how much it will cost.
With most of the West’s major governments looking to borrow Billion’s what rate of interest will they need to offer to get it and who has that kind of money to invest in a huge raft of government bond issues being simultaneously launched by so many countries.
How are we going to fund the debt payments with a slowing economy rising unemployment and falling tax receipts?
This is a global mess and we are all effected by it Independent or not, big or small. The relative exposure to the crisis is about the size of the financial sector in relation to the whole economy not the size of the economy. Iceland is in terrible trouble because it allowed it’s banking sector to get out of all proportion to the wider economy. Britain is in deeper than France or Germany for the same reason.
Oddly enough I haven’t heard much in the press about those two other small European countries with large financial sectors, Switzerland and Luxembourg, maybe they should both beg to become parts of Germany.
Peter.
john-yes in 2006 I think.He came back from a visit there & highlighted their Education system, R&D effort & Tax levels.
Apart from the global inflationary factors ,commentary on the Irish recession focusses on two home grown weaknesses:-
Over reliance on Foreign Companies operating in Eire.
A massive & out of control construction boom.
It is the latter which has caused the immediate damage-a huge oversupply of housing & commercial property-funded by Irish Banks who got hit by the credit crunch.
No doubt Osborne had this in mind, along with the UK house price bubble when he proposed a role for BoE in monitoring debt levels & asset bubbles.
He pursued it again yesterday in the debate on the Banking Reform Bill-but didn’t get much joy out of Darling.
Thanks Peter-fortunately for you, you don’t have to persuade me about the virtues of Independence-it’s for your fellow Scots.
I am very interested in your eighth para.
Your question “who has that kind of money” is very apposite. The answer can only be Sovereign Wealth Funds.
Barclays only escaped Brown’s clutches by saying they could raise new capital independently-& had already arranged some. It is £1bn believed to be from a SWF.
The Global economic centre of gravity has been shifting East for some time.The factor you highlight will further entrench this trend.
But even China is not immune to manufacturing cost pressures; and Oil based SWFs will contract with a global downturn…..interesting.
No doubt Flash Gordon will have the answer.
These figures are not big changes given the enormity of what is happening in the economy.
It is clear what many of us have felt for some time. There are few politicians, regardless of party, who have the ability and experience to deal with the sort of crisis we are now seeing. Probably at Westminster Gordon Brown, Vince Cable and William Hague. And that’s it. Also possibly Alex Salmond (who after all worked in a Scottish bank), but the Nationalists have been conspicuously quiet during the financial crisis, at least in the media that has reached England.
Brown has great ability, nobody has ever doubted that, and is now amongst the most experienced world leaders (save Bush!!??). However, over the eighteen months it is clear that there has got to be a great overhaul and updating of political systems, both of Westminster as a legislature and of individual parties. The leadership and organisational skills to do this will not be the same as crisis management.
Brown would now appear unassailable as party leader until the next election. Both other parties may need to reconsider, perhaps next Autumn – I have already mentioned the obvious replacements.
Pollsters ask electors the obvious questions, and get answers. But electors have much more pressing financial worries at the moment. They’ll probably get round to reviewing their political positions when there are elections next Spring, I trust on separate days for County Council and European elections. (The election administrators should remember that until 1979, when Callaghan was forced to hold a General Election on the same day as a local election, it was illegal to hold national and local elections on the same day, for very good reasons.)
Brown is now unlucky that the only impending by-election is in Glenrothes. The SNP will presumably claim that North sea Oil would have kept an independent Scotland clear of the crisis. If the Tories were the main challenger, they would be put seriously on the spot trying to put forward a distinctive approach to the economic crisis. For instance, a month ago we were dicussing the vulnerability of Ashfield if Geoff Hoon had been appointed to a European job, but I doubt if such an ex-mining consitutency would now vote for a Tory party with its image of historical connections to the bankers.
I’ve been particularly concerned that we heard divergent reccommendations from different sectors of the economy as to how it should be handled, each bearing in mind the consequences only on their particualr sector.
The high street wants sharp rate cuts to reinflate demand from home-owning/buying consumers while the city variously want stable, rising or at least less vigorous cuts so as not to damage savings incentives.
So the politics must be to calculate what the greatest risk to the greatest number of potential voters – will it be inflation, depression or unemployment? will it be a gradual and long-lasting detoxification or a sudden collapse and radical surgery?
Brown’s swift and positive reaction to respond to the international dimension of the crisis by coordinating a concerted answer seems to have averted either of those tumultuous situations in exchange for a reduction in market freedom.
It shows the enormous confidence and egotism of the individuals at the heart of the system for them to be able to succeed so quickly, but unless they (and that means specifically Brown himself) are also able to explain their reasoning about what steps and how long it will take to reduce their control there will be a movement to accrue ever more powers at the centre, which can cause greater instability in periods of transition – ie Brown’s desire for cautious growth and stability will rebound and exacerbate current volatility.
So Brown must move quickly to negate the growth of his institutional power in the public eye otherwise his poll rating and popularity will weaken as the political risks become apparent.
Brown has created a window of opportunity for himself to change the poll momentum and win the next general election, but he should be warned that this window will only last until the inauguration of the next US President.
OK Peter so exactly how if Scotland had been independent at the time the so called spivs and speculators on the London stock exchange turned on HBOS would Scotland have stopped them?
Do you seriously suggest that HBOS could have been saved by anyone other than Lloyds tsb?
Why can’t the SNP admit that the people at the top in both RBS and HBOS took unacceptable risks and are mainly to blame for the current situation at their banks?
Do you really not understand why a large country like the UK or even a rich minnow like Switzerland has a decided advantage over a smaller less well off country in a situation like this?
The fantasy world in which the SNP live has recently been exposed as never before and could not have been better underlined by the suggestion made in the middle of this crisis from one of your MSP’s that the bones of Mary Queen of Scots should be moved to Edinburgh. Actually the poor woman disliked England and Scotland much of a piece. She only ever wanted to live in France!
There’s no way Gordon Brown will call a snap election while the Conservatives are still ahead – he did not do so between June and October last year when his own party was in the lead.
Nick-you are certainly correct with regard to RBS.
Goodwin was described as a “megalomaniac” in The City .
His desire to empire build knew no bounds.The ABN Amro deal after so many that went before , followed by the need to shed RBS’ plethora of hotels & god knows what , to pay for it demonstrated that he wasn’t even a clever megalomaniac.
After saying RBS needed no funds , he should have been sacked when the £12bn June Rights Issue appeared.
The rest is now another history of banking hubris.
Alex Salmond with his RBS connections and his faith in it’s role in an independent Scotland must be chastened.
“Abuin yer feet” applies to politicians as well as bankers.
“But as Anthony King indicates, he really has to go for it or kill it dead.” – Joe Broughton
I don’t think that’s actually right. No-one on the radio or TV, in the newspapers or in general everyday life is talking about the possibility of a snap election. I think such talk is confined to a few Conservatives on this site. I would reiterate that there is at present absolutely no chance of such a thing, which the Prime Minister were he even to consider it would know would be regarded in the country at large as most unseemly given the circumstances.
My view of how it would be seen is the same as Barnaby’s… but given that JJB is quoting what Tony King wrote about it in the Telegraph, it clearly has been suggested somewhere other than in my comments section!
I notice one of the interesting side effects of this financial crisis is that it has suddenly become the perfect cover under which Labour is dropping all of its more unpopular policies (as seen in the Anti-Terrorism Bill when several amendments weren’t moved).
It looks like Labour has lurched into taking a pragmatic appoach to government and is now seeking to do nothing which offends or alienates any valuable supporters whatsoever. Is this the Mandelson effect working so soon?
If it is true that the Conservative lead was due more to Labour’s unpopularity than a real desire to get Cameron and Osborne into Downing Street then huge segments of tory support are there for the taking.
It must be a worry for the Conservatives that their front bench went missing just as this crisis opened up an opportunity to land a knockout blow, as this shows they lack a killer instinct and the ruthlessness traditional so admired by right-wingers. Worse still is their continued absenteeism from debate and their inability to put up any preemptive defense to the inevitable counterattack. Instead they are meekly agreeing with everything which goes against their instinctual beliefs – such as increasing the attacks on ‘greedy’ bankers!
While we can jibe that Cameron looks like a man without a plan, it is clear that whatever strategy he did have hasn’t survived the commencement of battle. Now we’ll start to see whether they are able to keep up with those twinkle-toed LibDems.
Mike The ‘POLL’ Oracle,
“Once the stock market collapses again in a few days time…”
Good call! More investment advice please, I need it at the moment!
I guess it must be the public’s admiration for those ‘twinkle toed’ Lib Dems that has led to them having such a high rating in th polls then thomas….
Au contraire Nick, I’d say that their twinkle-toedness has been what has staved off the collapse, splits and subsumation into the other parties which has been predicted by their opponents for so long.
The LibDems are dinosaurs, but they’re constantly evolving dinosaurs, so unlike the real dinosaurs they’re a long way from becoming extinct.
Vince Cable is a particularly spritely reptile who looks like he actually experienced the original Wall Street Crash at close quarters, so it shouldn’t be any wonder that he has answers to the current crisis.
I mean, if respected impartial experts employed by the nation are happy to broadcast their respect for a politician without fear of criticism, why should any of us hold back?
Anyway, as a commenter here you should be aware of the standard criticisms of polls.
Ecomomists aren’t usually businessmen or women,
I trained as one, and they can often talk the talk.
Where it becomes very difficult is knowing how to quantify knock on effects, and knowing what to disregard. Economists are often insulated somewhat as they are employed by large companies [as opposed to experiencing the sweat of setting one up].
We are certainly seeing a closer contest between Tories and Labour but I suspect the downturn will be the reality check, although they probably will just about stabilise the banks.
A fascinating discussion on the Daily Politics today:-
The sainted Vince Cable was taken to task by Andrew Neil for making inconsistent & conflicting statements about policy re BoE-VC also apologised for incorrectly accusing the Tories of saying something they didn’t say.
A “Banker”-asked to explain why, after the tsunami of liquidity pumped in by Central Banks, and the Share Purchase initiatives, the Inter-Bank lending market wasn’t unblocking-said it may take a few MONTHS until “confidence” returns!
This whole “Gordon saves the World” circus appears to be upsetting a number of parties who claim to have urged Recapitalisation by States, before GB trotted it out.
There are cracks appearing in the Treasuries strictures on Dividend payments in the Banks they invest in ,which have major implications for Pension Funds.
There are many commentaries on the neccesity for LLoyds to be forced into a merger with HBOS, given that the latter is being supported anyway.
And the whole excercise reduces customer banking choice in UK , and could severely reduce UK’s position as an international banking force.
Cameron was right to support the principal, but astutely warned GB against “triumphalism” in the period of bi-partisan support.Predictably GB has been unable to resist it.
We shall see how things pan out when normal political criticism is resumed.But the sight of the old guard from FSA admitting that they missed the signs at NR, and the housing bubble, and apologising for not acting sooner, will be grist to Cameron’s mill when he reminds the public who was in charge whilst this mess was boiling up.
There is a case to be made against any Government which uses their current time in Office reversing the mistakes of their previous times in Office.
I hope we shall soon here that case being made .
I’m not surprised it will take time for confidence to return after the double-dealing and sub-prime “pass the parcel bomb”
I heard Lamont on the radio the other evening expressing doubts over Brown’s Bail-Out. When asked for his own idea , he said something along the lines of “Well i think it might have been better if we had done what the US banks did”
That little word “might” brought it all back! The blinking into the headlights, the singing in the bath.
“if we prevaricate, we’ll better be able to say it was wrong later”. Hardly the stuff of leadership.
Haven’t posted for quite some time, so here goes.
I think the credit crunch has made UK politics much more interesting and much less predictable. Some of the Tory panic on these posts is frankly overdone, but there is more for them to worry about. I’m never sure how such arguments play with the mass of voters, but ’small government’ at times like these when only governments can act has cut across the right of centre arguments, while the whole issue of what a new government could do is now obscured by poor economic news.
On the upside, Brown was in charge, but the genesis of the crisis was the Big Bang in 1986 and sweeping deregulation of the city and an objective view must be that all parties and most countries share some blame – it just depends where it sticks. It was odd seeing Robert Peston describe this as the death of a major part of Thatcherism on the BBC evening news.
As others have said, when the air of crisis passes and we get stuck into the recession, that should be easier for the Tories to exploit, but the point here will be down to ‘blame’. Labour’s plight will be eased by the fact that this will be a full on recession throughout the western world, and the recent crisis has probably helped to fix this idea into many people’s minds. ‘It all started with US sub prime…’ is something we will hear constantly from Labour – will it stick for the next 2 years? This is a trick the Tories themselves pulled off in the 80’s successfully, but they were helped by mistrusted opposition. It is going to be much harder for Labour to work this line successfully.
The Scottish element will be key also – has the SNP ideal for small northern countries been trashed in the minds of voters? The next polls north of the border will be fascinating.
Most off all, it will depend on how Brown performs from here. Up to this crisis he has been frankly awful. If the government has really been re energised things might be close, but I still would be quietly confident if I was a Tory.
Do we know when the next polls are due?
Is Lamont a leader of anything now?
Sir Christopher Meyer ( again on The Daily Politics) made what I thought was the most honest statement about this crisis.
He said that whilst it is clearly true that Regulation & oversight needs improving-as it always is being-the notion that the current system did not provide warning signs of debt levels & asset bubbles is clearly wrong.
The warning signs were available but politicians in a number of countries-including UK chose to ignore them.
If one allies that to the failure of Regulators to spot the risk which was building up in debt based traded instruments, you have the causes of the crisis.
Meyer said that you take for granted human greed & excess-and look to governments & regulators to control it’s effects-that regulation may be “light touch”-but it has to be effective.
Vince Cable agreed with this statement.
I watched Bernanke on Bloomberg the other evening admitting that asset bubbles should be on central bankers’ agenda-and they weren’t.
These truths are ones that GB is trying hard to avoid.
Cameron & Cable need to put them before the public at some point soon.
Following Peter Cairns, Nick Keene and Colin, if Scottish politicians and voters try to build a Scottish dimension out of the banking crisis they may not like the psephological consequences at all.
Forgive me if I am wrong, but aren’t the two largest “British” banks that had to be rescued HBOS, including the former Bank of Scotland, and RBS, i.e. Royal Bank of Scotland? Both historically had their headquarters in central Edinburgh, George Square if I remember rightly, even if they have subsequently moved to Halifax or the Southern outskirts of Edinburgh. And I don’t know the exact constituency boundaries in the Scottish capital, but isn’t Alastair Darling, Chancellor of the Exchequer, MP for Edinburgh Central?
And, as has been pointed out, doesn’t Alex Salmond, who seems to have been keeping notably quiet over the crisis at any rate in relation to the London media, have RBS connections as an ex-employee?
Few people in England at the moment seem to see the national aspects of the international financial crisis as anything other than British, but the Barnett formula in respect to Scottish local government has started to cause English resentment. If the solution to the banking crisis gets to be seen as a Scottish Prime Minister and a Scottish Chancellor of the Exchequer bailing out Scotitsh based banks with tens of billions of pounds. mostly raised on the basis of English wealth and tax revenue, this will leave the Barnett formula at the starting post as a source of political discontent. It may well not be the Scots but the English breaking up the Union. I know we shouldn’t express opinions here, as opposed to pointing out psephological matters, but even as somebody who has in the past voted nationalist I hope for all our sakes we don’t have such a political meltdown on top of the economic one.
If Scotland had been independent now, the Edinburgh banks would have left their country nearly as bankrupt as Iceland.
If Scotland becomes independent in the future, English voters may well demand that Scotland alone takes on the Government guarantees to Edinburgh based banks, particularly as they were made by ministers from Scottish constituencies.
It is far too early to tell what psephological effects the current banking and finance crises will have. People have more urgent things on their minds than how they will vote in 2010. But, as has been pointed out in various Westminster based media, it may well be bad news for the SNP.
Just watched Panorama on the Credit Crisis etc.
Some interesting snippets:-
Public Sector workers recognising that their jobs will be vulnerable :-In the YouGov Poll of 10/10 the biggest “sectional” slippages in Con vote & Con/Lab gap from their 8/5 Poll( a peak for Cons & low for Lab) were “North” & “18-34s”.So will areas with high public sector employment of young families now see a vote for Labour as the best way of keeping their jobs?
People saying they will now save more to provide a cushion-even keeping money under the bed:-That will excacerbate the downturn.
The FSA staff portrayed as ill qualified to carry out the supervisory jobs they were landed with.
Some lovely GB quotes:-
circa 2004/2005:-
Congratulating The City on it’s “Dynamism in developing modern instruments of finance”
In the House saying “In any other decade a housing bubble would have led to bust”
then 2008-”The Age of Irresponsibility is over”
Priceless.
Frederic Stansfield – you should try the october populus poll thread.
“Meyer said that you take for granted human greed & excess-and look to governments ”
He was quite right – the idea that you should have trust in individuals to behave altrruistically is dead.
Thankfully, Cameron’s former colleague Lamont is nowhere near the levers of power now, though he’s still wheeled out over the parapet to give a “view”.
How this recession is handled will be I hope very different from the early nineties approach, which seemed to be that nothing should be done to help businesses through, nothing should be done that might disturb the precious free market and its brutal effects.
Letting credit go out of control is actually outside the universe of the free market, because it’s money that doesn’t exist of course.
Of course, an unchecked free market can have this effect, as it goes on effectively printing money itself.
In the early 80s, of course, the then government tried to control the stock of money, as we’ve discussed.
But again, one shouldn’t do it too rigidly.
I’m not quite sure what John’s criticism of Norman Lamont is, although I don’t agree with him on everything.
He didn’t create the bubble in 1987-89 as he wasn’t senior enough.
The government was still repaying debt and had a small PSBR under late Thatcher/Major/Lamont in 1990-91 – about the equivalent point to where we are now in 2008 – with the finances in a much worse mess already.
Major did order the Treasury boost spending quite a bit in 1991, partly for the NHS.
The ERM was a flawed mechanism being used for political union but it did force us to drive inflation down properly for once – in Britain – and we were kicked out at the right time.
We should have got out before the Black Wednesday itself, which was hugely humiliating, although Lamont says he wanted to get out quickly in the morning.
Afterwards, Lamont and Major put in place a sensible policy of inflation targeting which has served us well until now, effectively locked in by Labour with the Bank, but housing inflation should have been part of the remit.
Although I did read a very funny article by
Giles Brandreth where he said he visited Lamont in the Treasury one day at the end of 1992 and stood by the window admiring the view saying …
“I just can’t believe it. I’m an MP. I’m standing here in
the Treasury. And you’re Chancellor of the Exchequer.”
Lamont looked daggers.
JJB
Very clear analysis, thanks (though giving the BofE a remit on house price inflation controls would face enormous geographical problems)
I think all sites like this (non-partisan, tolerant, humorous etc) can be enlivened by a Lamont anecdote. My point about him was simply that he was regarded as a frightened rabbit in the financial crisis of the ERM fiasco.
There is no great “free-market” solution being offered to counter the almost socialistic proposals of Brown. Lamont said “we might have better followed the US” – the operative word being “might” , reminiscent of, well, “erm…”
Labour is to raise funds through debt. This money must come from China, India and the Arab counries with oil. These countries, through our outsourcing, investing and purchasing products from them, have more of our currency than we have. Thus, they will be able to afford to purchase our debt which we can then reinvest to boost our economies. Eventually, when these debts are called in, we will default, and they will end up owning us. The next recession, due when t the debts are called, will make this one look very mild. Of course the government could raise taxes to pay the debts, but that wouldnt matter to Labour, they wont be in government and it is a poison pill for whoever is.
continuing some of the points about Lamont in the recession of 1990-92….
Lamont says he realised he would be moved the day before, in May 1993.
He went so some event – I think Portillo’s birthday at a Spanish place where lots of politicians were attending, and it struck him that Major, Richard Ryder (chief whip), Norman Fowler (chairman) hadn’t turned up, and was suspicious.