Statement by UK PLC CEO on his visit to the US

It is a pleasure to visit our US partner company at a time of unparalleled expansion and success. Our joint formula of “putting the losses back into business” is working well. On both sides of the Atlantic governments are able to report big leaps forward in trading losses from a growing range of talented loss making businesses in which governments have shares. Our joint formula of “never knowingly undersubsidised” is proving especially popular in our financial subsidiaries.

I would like to bring both our US and UK audience up to date with our recent good results. I belong to the school of thought that you never knowingly understate a good loss, and should use every opportunity to remind the audience of success. Following the announcement of £24 billion of losses at RBS we were able to make an additional £26 billion of capital available to them. This means they have needed £46 billion ($65bn)of new capital from us in just three months.

We have now officially reported the £1.4 billion loss for our Northern Rock subsidiary last year. This may seem quite small, but they did achieve it on a reducing book of assets that is now under £40 billion of directly controlled mortgages, so the loss rate is good. The second half loss was, I am pleased to say, well up on the first half. We were able to put another £3 billion into this satisfactorily loss making venture.

I appreciate the UK PLC portfolio does not include such stars as Freddie and Fannie. They truly have become global favourites, a licence to lose money. Nor have we yet found such a gem in our insurance sector as AIG, which has pioneered a wonderful loss making niche in the world financial system. I hope nonetheless our American friends will recognise the huge improvements in our capacity to lose money and waste capital, shaking off the puritan days of Margaret Thatcher when profits stalked the nationalised sector and privatisation was all the rage to limit risks and costs to taxpayers.

Our model depends on ever greater borrowing. Both US Inc and UK PLC are aiming for new and exacting records this year and next. We have both expanded our normal borrowing requirements to new peaks, and can add many billions to those figures through our commitment to loss making businesses. I think adding the capability to print the money needed should markets become reluctant to lend is the icing on a very exciting cake.

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5 Comments

  1. Posted March 4, 2009 at 7:25 am | Permalink

    Is “mis-applying” the new “mis-remembered”?

    Does not having enough time to familiarise oneself with rules excuse the breach?

    Is an unintended breach of the rules (for personal financial gain) acceptable?

    Let’s try it with something as trivial as a traffic offence “I am sorry officer I mis-applied the accelerator thinking it was the brake, I had limited time to familiarise myself with the speed limit in this location and my speed was unintentional, and even though I have been doing this for a period of years, I do not expect any criminal prosecution to follow”

    No, that wouldn’t work for a traffic cop. Next time I am speeding and stopped by the local constabulary, could I get the case heard not in magistrates court, but by a parliamentary standards commissioner?

  2. Pete Chown
    Posted March 4, 2009 at 9:58 am | Permalink

    It’s easy to see £24bn as “a number” or “not real money” because these enormous losses have been talked about so much recently. I think it’s important to keep in mind what it means: about a £400 bill for every man, woman and child in the UK.

    This will be collected through taxes, of course, so if you have worked hard and been successful you will be paying a great deal more.

  3. mike stallard
    Posted March 5, 2009 at 4:28 am | Permalink

    On Labour List, the Tories are till the “do nothing” party. Mr Cameron is not happy, they say, talking about the economy.
    The main economic discussions seem to be about the Post Offices and the bonus paid to bankers.
    When Islamic Terrorism was all the rage, the government made a pretty good fist of panicking people into legislation which has been used, among other things, to deport people to other countries without much reason, to break into people’s houses without much of a warrant and to shoot an innocent man in a tube train.
    The 45 minute flammery was used to cause an adventure in Iran which proved to be an unmitigated disaster.
    Now we have the global recession.
    While at the gymn I was watching Jeremy Kyle. Some man had got a girl pregnant because of the global recession “Hard Times, yer know.”
    I wonder when he is going to get a position as a government advisor?,

    • alan jutson
      Posted March 5, 2009 at 8:36 am | Permalink

      He has probably tried a number of positions already !!!!!!.
      But no doubt will end up a Benefits expert.

  4. Posted March 31, 2009 at 10:11 am | Permalink

    Can anyone tell me just WHAT the UK PLC is, please?????

    Reply: All those things in the UK run and underwritten by the government.

2 Trackbacks

  • […] Redwood has his speech-writing hat, and makes very good reading (he’s also written a letter from the CEO of UK plc to its US investors which is good fun). My favourite […]

  • […] John Redwood MP on his blog the other day which gives a fair summation of the state of the nation: Statement by UK PLC CEO on his visit to the US.  I provide a small taste of the caustic analysis to come from Redwood’s pen… […]

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

    Promoted by David Edmonds on behalf of John Redwood both of 30 Rose Street Wokingham RG40 1XU

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