PM promises to “clean up” : does this extend to government finance?

The PM’s belated intervention into the financial crisis is curious.

He tells us he intends to clean up markets. Who exactly was regulating and presiding over dirty markets over the last 11 years? In what way do they need cleaning? Why wasn’t it done before?

From past interventions we know the PM thinks there needs to be more transparency. He should start by cleaning up the government’s act in this respect. The government is currently refusing to give us sensible forecasts of its 2008-9 borrowing requirement, failing to update its revenue forecasts or its spending forecasts, and failing to give us a revised growth forecast.

The government seems to be condemning off balance sheet borrowing on a large scale, yet that is exactly what they have been doing. Does this mean an end to PFI/PPP off balance sheet borrowing? Does it mean we can look forward to seeing all the current off balance sheet finance consolidated any time soon? Do they now regret lumbering the taxpayer with the huge liabilities of Northern Rock, when acting as its bank manager would have more than halved the amount at risk? Will they respond to my estimate of £1500 billion of total liabilities for the public sector, including the unfunded pension liabilities?

The PM went on to say “we don’t want these problems recurring in the future” and told us he would be discussing what to do with other Regulators and governments around the world. What we need to know is how he is going to help us get out of the present crisis. It’s no good saying it is global, when an important part of it was made in the UK under the eye of Brown’s Regulators.

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24 Comments

  1. tim holden
    Posted September 18, 2008 at 4:13 pm | Permalink

    Our current financial misfortunes are surely part of his “his long term plan” for the economy. This is the captain of a ship who has navigated us onto the shoals, now feebly throwing out the lifevests, saying:”There you are, I told you that you need me.”

  2. mikestallard
    Posted September 18, 2008 at 4:40 pm | Permalink

    I have just had the terrible experience of coming home on the top deck of a country bus from Ely to Wisbech, Cambs.
    Here is a chance for you to use brackets and say “words missing”.
    We found out, to my wife’s horror who was screwing who; the children were openly smoking in the street right outside the school where they were waiting for the bus; they pushed and shoved; they climbed all over the seats; they screamed at the top of their voices using words( swear words left out – this is a family site!); their uniforms were in various states of disarray.
    Not very nice and it is a Comprehensive School phenomenon too.
    And who, prithee, has regulated all this but the government?
    I look forward to a similar shambles over the Banking system which must be the only part of the British economy (well, almost) which has performed well over the last 50 years.
    And I think that the inflation figures and the unemployment figures issued by this government are themselves quite enough to show that you cannot trust them an inch.

  3. adam
    Posted September 18, 2008 at 5:46 pm | Permalink

    why does Gordon still think he is in charge of anything.

  4. Acorn
    Posted September 18, 2008 at 6:02 pm | Permalink

    John, whilst basically agreeing with you and understanding that you are obliged to be somewhat parochial, as an opposition MP; the “two gaffers” are not alone. The media in general has demonstrated that it also does not understand how the global financial system works.

    There are some fund managers who are very angry with the BBC for suggesting what price the HBOS deal will be done at – Peston yesterday – they may have a case for market distortion. As a finance correspondent, Peston knows the rules that apply when reporting on such market events.

    Those who study the long term market charts will know that history tells us that we are now in the first year of a five to seven year clearing operation. The BoE will have no option but to print money to stuff the holes in the dam, as they appear. As you say, one of the biggest holes will be in the Treasury.

    The “socialised economy” that is the public sector and its beneficiaries, cannot expect the “non-socialised economy”, the private sector, to take all the pain. Brown has to cut £100 billion out of public spending in the next two to three years. That will require the repeal of numerous Acts of Parliament that represent poor value for money. That amount will include £25 billion in public sector wages; in round numbers, that means about one million public sector jobs.

    Most of the poor value added jobs, are in the above median salary points in the public sector. The “five-a-day outreach-community-support-officer”, yields much less value added than the guys who hang off the back of a bin lorry as it comes down your street. Basically, any public sector job that deals with immediate concrete factors stays, the rest must go.

    One useful thing the EU has done is forcing the UK government to put the Northern Rock support on the government’s debt book. Perhaps they may force the government’s unfunded pension debt to be put on the debt book as well; PPP is small change compared to that.

    Life is going to be tough for the next five years at least; and, then the lights will go out! I am not that sure I would want to form the next UK government.

  5. Eddie Allen
    Posted September 18, 2008 at 6:13 pm | Permalink

    I just know Brown’s “clean up” won’t be the same as the Oxford dictionary meaning. His clean up is more likely to mean let’s cover-up mistakes before the Tories get here and make sure Labour looks clean. I can almost hear the shredders going !

  6. Stuart Fairney
    Posted September 18, 2008 at 6:55 pm | Permalink

    It clearly does not extend to obeying their own laws. Tuesday the FSA says HBOS is fine, today (the witless) Darling says “We’ve known about their problem for weeks”

    JR Perhaps you can help me, was the FSA simply not telling the truth and breaking the law they are supposed to enforce or is it now government policy to have regulators deceive the market when it suits them?

    If the government fails to follow the law then we are moving to rule by arbitrary decree are we not?

    Reply: I am glad the FSA does not make statements telling us some companies are in difficulties!

    • Stuart Fairney
      Posted September 19, 2008 at 8:38 am | Permalink

      Quite, I was simply concerned that the FSA and the Chancellor seem to be making opposite statements within 48 hours. As they can't both be right, one of them must either be wrong or not telling the truth. I understood making false statements to the market to be a crime. I'm entirely happy to believe the Chancellor doesn't know what he is talking about (indeed claims to the contrary seems nonsensical) but we really do need to find out what the FSA was up to and on whose orders were they acting?

  7. Stuart Fairney
    Posted September 18, 2008 at 7:00 pm | Permalink

    I now read that short-selling has been banned !!!!

    Atlas seems to be shrugging

  8. Chuck Unsworth
    Posted September 18, 2008 at 7:41 pm | Permalink

    Astounding tunnel vision, duplicity and double-think from Brown. You are absolutely right to highlight his gross logical and moral inconsistencies.

    Let’s see where he gets to on this. Presumably one law for HMG and one for everyone else.

  9. Matthew Reynolds
    Posted September 18, 2008 at 8:02 pm | Permalink

    What most people want is an end to PC insanity ! We need commonsense in the form of lower taxes ! The EU , liberal judges , QUANGO’s , the unfairness of devolution on England , people who stand up to thugs being persecuted , immigrants getting it on a plate while pensioners who have paid tax & NI all their lives struggle to get by , Labour MP’s who oppose school vouchers while sending their kids to private school , married parents being persecuted under the tax system , loads of people in hospital walking around with bits of paper while NICE stops cancer sufferers living longer , green taxes designed to raise money rather than help the environment while the infrastructure crumbles despite record government spending .

    Do the political classes finally understand just how sick & tired most decent folk in England are ? Will the Tories in office let us down like Labour ?

  10. StevenL
    Posted September 18, 2008 at 8:33 pm | Permalink

    I see he’s gone and banned shorting financials. I think this is a tad hypocritical myself. If what I read was true the RBS and HBOS rights issues were by and large dumped on the underwriters who shorted RBS and HBOS stock to hedge against their potential losses. In other words these two banks had to resort to shorting their own stock through an intermediary to stay afloat.

    Given the way the banks kicked their punters when they were down with penalty charges, you can’t blame the punters for wanting to get their own back either.

  11. Bazman
    Posted September 18, 2008 at 9:17 pm | Permalink

    Comprehensive school children openly smoking and swearing in the street with their uniforms in disarray in Cambrideshire. Inflation high. Banking in disarray Unemployment rising. Government finished. What is John Redwood MP doing about it?
    It’s a very threat to the foundations of society. “Cough. Splutter!”
    I blame it on the Parents, or at least the teachers.

    • mikestallard
      Posted September 19, 2008 at 7:31 am | Permalink

      Then, my friend, I do not think you fully understand the problems of running and teaching in a government run school.
      It does not happen in the local Grammar School which is not government run – yet.

  12. no one
    Posted September 18, 2008 at 11:15 pm | Permalink

    PM and Chancellor apparently been scheming with Lloyds to make sure many of the old Bank of Scotland head office staff in Scotland are safe, after all they are Scottish MPs, nothing but nothing said about all the old Halifax head office staff still in Halifax

    Yet again domination from Scotland affects the English people in so many ways, expect the people of Halifax to suffer big time

    Sad so sad

    C Diff is up and the BBC goes with the story MRSA is down? Who is kidding who?

  13. Adrian Peirson
    Posted September 19, 2008 at 1:29 am | Permalink

    I blame it on the Frankfurt School.

    It was Govt that Prohibited Parents and Teachers from disciplining children, promoted 24 hr drinking, relaxed the drug laws, helped destroy the Traditional family ( 100,000 fathers per year make application to the courts to get their Ex’s to honour contact arrangements, It doesn;t suprise me that some get angry )
    Undermined the Traditional Family centred Christian basis of our Society.
    do you think any of this is accidental, it’s all delibertae policy to undermine society.

    If crime gets out of hand, then we will need a Police state that you see being built up around us right now.

    This is all deliberate.

    t’s called Frankfurt Subversion.

    • adam
      Posted September 19, 2008 at 3:46 pm | Permalink

      the socialist government has deliberately pushed crime levels up, for whatever reason. Probably some anti Tory toff/middle class Fabian social engineering scheme.

      High crime levels may be used to justify a police state but is hardly a requirement for one.
      There is hardly any terrorism yet that is used to justify vast oppression of the people and the gov. plays crime down at every opportunity

      Crime is already out of hand in some areas.

  14. Dirty Euro
    Posted September 19, 2008 at 12:37 pm | Permalink

    Why do you not give credit when it is due. Who saved the bank not the tories. :

    • mikestallard
      Posted September 20, 2008 at 8:03 pm | Permalink

      This is a fascinating comment.
      Northern Rock is a Northern Rock. This means that the people in the North are the ones who benefit most, I should have thought.
      HBOS is an acronym for the Halifax/Bank of Scotland. Now it is allowed to expand and not go under, I should have thought that the people who benefited were the people of Halifax and environs and also the Scots?
      It does not escape my Fenland mind that all these areas are part of the "Labour Heartland".

    • Chuck Unsworth
      Posted September 21, 2008 at 11:14 am | Permalink

      What with? Whose money is it, exactly? And who was given any choice in how their money is spent?

      • Chuck Unsworth
        Posted September 21, 2008 at 11:16 am | Permalink

        Apologies Mike, my comments were directed to/at DES. Slight hangover, I suspect.

        • mikestallard
          Posted September 21, 2008 at 6:48 pm | Permalink

          Sorry – Good-oh!

  15. Adrian Peirson
    Posted September 20, 2008 at 3:27 am | Permalink

    Govt Borrowing, mmmmm

    why exactly does Govt Borrow money, why not simply Print it (with due Prudence of course)

    That way, we the Taxpayer would not need to Pay neither the loan back or the interest associated with Gilts.

    It seems to me that by Printing Gilts rather than Issuing sound money, we the Public are actually ensalved to the Global Banks ( who buy up the Gilts )

    Is Parliament simply a Front, a Facade, and is our Real Govt, the International Banks.
    After all, Ultimately it is they who we pay our taxes to.

    Why does the Crown / Treasury not Print Money instead of Gilts thus ensalving us to the global Banks.

  16. Nick
    Posted September 21, 2008 at 9:13 pm | Permalink

    So, I take it that the Tories are going to put the debts on the books?

    Is this the case John, or is it another one of the opposition bits of baloney?

    Nick

    Reply: I want them to and I think they well do so

  17. How to Get Six Pack Fast
    Posted April 15, 2009 at 4:35 pm | Permalink

    After reading through the article, I feel that I need more information on the topic. Can you share some more resources please?

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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