Whatever spin the BBC has put on government policy (and I agree they have been simply a mouthpiece for New Labour) … find me one edition of Question Time prior to the 2005 election where Labour ministers boasted about their years of economic growth – and a conservative member of the panel warned that the growth was based on debt and that it would all end in tears.

You’ll have no trouble finding an episode of Question Time where a Labour minister boasted about their successive quarters of economic growth – they did it, unchallenged, every week. But you’ll struggle to find an episode where anyone questioned the fact that it was all based on an unsustainable debt/asset bubble.

But, that is all history. Where is the opposition NOW to current government policy? We have the BOE buying up government debt with the very real risk that interest rates will have to rise and they’ll (sorry, WE’ll) take a thumping loss as the gilts have to be dumped into the market.

We have banks bailed out with billions of our money. Debts being taken on by this government on my as yet unborn grandchildren’s behalf.

We should have let the first bank fail. Protected the deposits – and let them go to the wall. Then, if necessary, bypassed the remaining banks to make sure business can access the credit it needs.

But, the conservatives are still paying lip-service to the house price boom of the last decade. They are still terrified to explain that it was built on unsustainable debt growth – and that the party is over. That anyone who bought at the top of the bubble is going to be in negative equity for 10 or 20 years.

As such, apart from a bit of bleating about the government not lending to business, there seems to be general agreement that there is no alternative to what we are doing now.

If we carry on as we are, we’ll have 10 million unemployed within a few years and gangs roaming the streets.

There is a fundamental reluctance to face facts. What on earth are 60 million people on this small island supposed to do to make a living? Selling houses to each other and financing our lifestyles on the profits doesn’t seem to be working anymore.

Reply: if you look at Hansard you will see Conservatives provided strong criticisms of everything economic from the pensions taxes through the sale of gold to the overreliance on debt, the wasteful spending and the stealth taxes

They probably do not pay Council tax at £2,000 per year on their home, suffer huge Business Rates on their premises or pay exortionate rates for heat, light, and power.

I will not even bother with Rules, Regulations, Tax, Employment Laws, pay rates and the cost of the Benefits Structure.

You need less to live well in some other Countries, here you need more for that same standard of living.

We have some benefits like National Health Service etc that others do not, but in most cases it is a question of choice as to where you want to live, and how you want to live your life.

Our problem for the future is are we going to be more or less competitive in 10 years time.

I could not count the number of times I heard Labour politicians on ‘Question Time’ boast about ’10 years of consecutive growth’ and ’48 quarters of consecutive growth’ … over and over again … like a scratched record. I kept waiting and hoping for the conservative representative on the panel to point out that the growth was based on a growth in debt, that it was unsustainable – that we had a debt and asset bubble … but no, not a word – never a word – they always just sat there looking uncomfortable. Why did they never quote Gordon Brown’s words … ‘I will not put at risk the sustainability of the recovery by allowing house prices to get out of control’. But he did, and you said nothing. But, of course, how could you? After what you allowed to happen in the late 80s.

Reply: On the contrary, we were vocal about it. We set it out in the Commons very clearly, but the BBC was never very interested in reporting it or inviting us on to discusss it because it was not part of the Labour spin.

Therefore house prices must fall a lot more unless we return to the old requirements for borrowing.

I was struck by Peter Hain (not literally!) two weeks ago on Question Time asking, rhetorically, “Would you rather we’d let the banks go bust?” (I’ve paraphrased).

Instinctively I think if you’ve mis-represented your bank, made mistakes, called the markets wrong, and you’ve done it enough, then you ARE bust, no matter what you, me or any one says about it. Shuld we have let them go under? Would it have mattered that much?

At the time I imagine the justification was that without bail-outs there would be no lending at all, leading to an ever-more severe ‘credit crunch’ and severe recession. Which sounds sort of familiar. I’d be very interested in your view.

Thanks,

Bernard

Reply: I think that would have been extreme. What I favoured was forcing them to admit the errors, take the losses and sort themselves out more quickly, with the authorities acting as a mean lender of last resort to prevent system failure but not buying shares are feather bedding their excessive costs. Lend little, lend short, lend against security: don’t lend lots, gurantee lots and buy shares. Now we are the owner, be a very tough owner, and make them sort it out quickly.

Exactly, you would think the government would know that as employment falls the tax take will fall with it, that is an absolute certanty.

Yet here they are ramping up their spending …