Listening to the Chancellor tonight on Channel 4 I wondered which economy he was talking about. It couldn’t have been the UK one which the Labour government has done so much to damage.
He told us they had “made the right judgement calls”. Does that include the decision to tax pension funds, or to sell gold at a low price, or to allow a huge build up of debt and credit, or to encourage banks to overexpand by failing to regulate cash and capital, or driving banks into grave difficulties by suddenly shifting to ultra tight money, or expanding public borrowing way beyond an affordable amount or to putting loads of borrowing off balance sheet in the public sector, or to waste so much public money or to fight two wars in the Middle east or to set up so much extra bureaucracy and quangocracy?
He did not seem to grasp the difference between debt and the deficit. The deficit is too large and that is the amount by which the debt is growing. He said he had a choice on how much of the savings in spending he had recently found he could use “to pay down debt”. He is years away from paying down debt. All his forecasts assume colossal increases in debt for years to come.
He conceded that he did not want a death tax to pay for elderly care after all, having spent weeks defending that option.
He said size did not matter on banks, seemingly unaware of the dangers created at RBS and Lloyds by the mega mergers the government allowed or encouraged.
He claimed Northern Rock had enough capital in 2007, apparently unaware that the Banking regulator in the last two years has required all banks to raise much more capital, implying they allowed Northern Rock to trade with too little.
Mr Darling’s positions either revealed a worrying ignorance of banking and the public accounts, or were constrained by the need to do as Mr Brown wishes. No wonder we are in such a mess.
March 29, 2010
Darling is regularly allowed, as he was tonight to state "we will halve borrowing". I fail to understand how interviewers let this happen. Anybody looking at the figures can see he means he will halve the rate of increase in borrowing which is a completely different proposition. His statement is a straightforward lie.
March 30, 2010
I found it frustrating that the Shadow Chancellor let Darling get away with it. Does George Osbourne assume that the average voter understands the difference between the deficit and the national debt? They don’t.
March 29, 2010
I thought that George did very well in the TV debate, but my ranking (GO > AD > VC) seems to be exactly opposite to the rankings expressed on twitter.
If my impression is correct, the Tories have a huge job to dispel mistrust, explain what what the economic problems really are, and why their solutions are best for the UK.
March 30, 2010
I tried to watch this debate from my own understanding and from the way many people I know would watch it. That is, people who take only a passing interest in politics and the economy. I have to say, that for such people, Vince Cable came over the best. I also think the Conservatives new poster campaign is well aimed at these people.
March 29, 2010
The way Darling came across you'd be forgiven for thinking they hadn't actually been in power for the last 13 years! Hey, news flash, where we are and the dire financial state is *your* record. Ok, so maybe the bank crisis was a surprise but it was Brown who boasted to the world he didn't need to prepare for a downturn because he'd somehow abolished them.
March 30, 2010
Given that Harriet Harman alone has been upbraided by the Office for National Statistics twice this year, I wonder if we are seeing an institutionalised contempt for facts?
We want pragmatism – if it walks like a duck, quacks like a duck and swims like a duck then it's safe to assume it's a duck until further information demands a reassessment – but we get ideology: if we say its a duck then its a duck, never mind what you think it is.
March 30, 2010
I agree that bank size matters. But what is your prescription to overcome the "too big to fail" connundrum? Are you a "glass- steagalist"?
Also, is it possible to make a reasonable estimate of the size of the borrowing off balance sheet in the public sector that you refer to?
Reply: I am a more clearing banks man, who would create extra banks out of the RBS portfolio, and sell off overseas banks. PFI/PPP and companies (excluding banks) add around £300 billion more to the public debt.
March 30, 2010
http://burningourmoney.blogspot.com/search/label/…
This blog gives a good example of a PPP situation,
in other words watch your money flowing down the urinal !!
March 30, 2010
Darling said twice: "There isn't a penny in the bank."
So he admits Labour have bankrupted the country. He's the one who can see the books, so he should know.
I think you need to unplait the Cable.
March 30, 2010
J.R. ,
I agree with most of what you say but George Osborne had the chance to it and didn't .
Why didn't G.O. say more about the greater number of jobs allocation of money to the private sector would create over allocating it to the public sector ?
Obviously I had unrealistic expectations of what was going to transpire tonight . Such an anticlimax from all participants except the teacher in the audience who stated that the country could not afford public sector pensions .
In an ideal world of course death duties and sky high inheritence tax wouldn't be neccessary . Most people accept that marriage is a proven institution but recognising it in the tax system is social engineering and for once I agree with Harriet Harman – it is "not the politicians job to do so" .
However , why does the Conservative party choose such easily riduculed policies with which to differentiate itself ? You end up doing the Labour Parties job for them , attrocious politics .
G.O. made a very good point in his summing up that it would be a very long time before the electorate got another chance to decide whether they wanted more of the same or a change .
March 30, 2010
John Redwood
Excellent and fair comments on the debate. It is always instructive and a pleasure to listen to you debating in the house via the Parliament Channel and to read your political commentaries.
Mr Redwood can you ask the Tory front bench to define defict and debt whenever they comment on these two figures.
Many of the electorate either consider them to mean the same or are unable to define either.
I suggest that every time either is mentioned its definition should be included. e.g. "The deficit by the end of this year, which is the total amount the government will borrow this year, will be £X billion, which will increase the national debt [that is the total amount of money that this Nation owes] from £Y billion to £Z billion."
March 30, 2010
1. George Osbourne should have kept pointing out that Alastair Darling BELIEVES in big government and that, as such, he does NOT want to reduce taxes.
The country is ready for the message that the GOVERNMENT IS TOO BIG. The Tories should focus more on this.
2. Channel 4 News spent about TEN MINUTES attacking Osbourne just PRIOR to the TV debate. Its reporting was totally biased.
March 30, 2010
The poor Darling is in an unenviable position – he can hardly stand up and say he is doing his best but that he has been left with a poisoned chalice by the previous Chancellor.
If the Conservatives do form the next government, after spending a couple of months digging through the books in minute detail, it would be nice to have a Khruschev style expose in an emergency budget where all the financial horrors of the last 13 years are laid bare and the consequences if tough action isn't taken immediately.
March 30, 2010
Another reason why George isn't suited to the position of chancellor. Darling should pay been picked up on this gross deception (borrowing slightly less is not 'paying down debt') but Osborne is again found wanting.
Darling's admission that there isn't a penny in the bank is an astonishing thing for the current chancellor to say. Why is more not being made of this? How can you trust a party on the economy and public finances when their own chancellor openly admits they've got no money left?
March 30, 2010
I agree Darling gave a very shaky performance last night, trying the Labour trick of raising other issues to direct questions, regrettably it works in and demeans the Commons. George Osborne did well and VC was his usual avuncular, academic, amusing self who would be odds on to replace Darling in a Lablib pact.
March 30, 2010
I despaired when George Osborne said the Conservatives were big believers in the tax credit system .
The terminology is deliberately designed to make recipients feel they are getting help from the state , destroy self-respect and foster dependency .
Why can't any of the parties simplify the current tax/benefits system with proper elegant solutions rather than adding another kludge every few years ?
Nice to here there is a concensus on reforming public sector pensions but disappointing to hear people talking about accrual rates and retirement ages instead of moving to defined contributions like everyone else gets .
At least George mentioned setting up a body to provide a proper estimate of the cost of public pensions . He should have gone on to insist they become fully funded .
March 30, 2010
Osborne does come across as being lightweight, unfortunately impressions matter. The announcement a couple of hours before this "debate" that the Conservatives would roll back 1% on National Insurance contributions was perhaps badly timed. It could be that some genius in Conservative Central Office thought they would catch the others off balance but in fact Osborne seemed ill-prepared to explain this proposal; the remarks by Darling were foreseeable but Osborne obviously had not rehearsed responses. Is it that the Conservatives fail to see that the country is fed up with spin, fed up with gimmicks, fed up with insubstantial soundbites; we've had thirteen years of it, for goodness sake! It's some gravitas, some seriousness, some wisdom we need, some maturity, some honesty, frankly not "Dave in jeans and a polo shirt", the neighbour washing his car out front on a Sunday morning isn't going to put things right (or know how to!), where are the Conservative heavyweights we can believe in?
March 30, 2010
I think that Darling understands the difference between debt and deficit only too well.
He is relying on the fact that most voters don't, and is pursuing a deliberate policy of confusing the issue to ensure that the penny does not drop in the electorate's mind before the election.
On a different note, and just out of interest; Is the Bank of England being paid interest on the gilts it has purchased, or has it waived it's right to interest payments?
Are interest payments showing up on the B0E's accounts?
March 30, 2010
My main reaction was that George Osborn was out of his depth, and were I to make a choice based on this single programme, I'd adopt the view "Better the Devil that you know …."
March 30, 2010
I didn't hear Darling mention the name "Gordon Brown" once; and GO let it go. I thought GO sounded petulant at times and let Darling get away with half-truths and misleading statements of "fact".
But:
I cringed when GO said he supported tax credits (giving back what should never have been taken in the first place);
I cringed when GO said "for the many, not the few" (cliche of the worst type);
I cringed when GO said, more than once, "hard-working families" (who isn't?).
At best, the debate was a draw.
The team has a lot of wok to do and you need to get the big guns out to ram home the message (more JR please). Again…and again…and again…
March 30, 2010
I agree. Darling & Cable ran rings round George Osborn.
Vince Cable came out top in an Independant survey of viewers afterwards. It seems a bit of honesty is appreciated by the public.
Reply: not in the debate I saw! Mr Cable was easily the least convincing of the 3, and full of himself at the same time.
March 30, 2010
Mr Darling, whatever his weaknesses elsewhere, demolished the Conservative proposal to reverse the rise in NICs by using "extra" savings on public contracts. Even if we allow that such "extra" cuts are real, the proposal delays cuts in the deficit, at a cost of at least £200m a year in additional debt interest, indefinitely. So there is no reason for those most concerned about the deficit to vote Conservative rather than Lib/Lab. YES. it is right to curb the tax on jobs, especially lower paid jobs, but that is only reponsible if it is replaced by alternative taxes. One populist alternative would be to double the employers NICs on pay above 4 times the national average (which, however irksome, would not affect total employment). The Conservative central team evidently lacked the courage to replace the extra NICs with a less damaging tax. Ignoring the pot and kettle argument, Mr Darling and Mr Cable were right to call this irresponsible.
Reply: Not so – the spending cuts kick in in Year one, the tax cut in Year 2. A Conservative government will find more than £6 billion of waste to eliminate to help bring down the deficit. Darling failed to answer why had cut Stamp Duty
March 30, 2010
We know Darling cut Stamp Duty to try to prop up Brown's housing bubble by suckering first time buyers who don't know better. That's why he has also been busy getting the Post Office into the dodgy high LTV first time buyer mortgage business, and requiring Lloyds and RBS to indulge in more questionable mortgage lending that they would otherwise avoid.
March 30, 2010
I think this debate served to reinforce my long-held belief that there is no major difference between David Cameron's Conservatives, and Labour.
I cannot go on watching Tories continually missing golden opportunities to bury Labour in their own filth and lies, as Mr Redwood so clearly and easily articulates in this article (and so often in others), and not come to the conclusion that the reason they don't is because they don't want to – they simply, and
fundamentally don't disagree with Labour.
My mind is already made up that, as a conservative (small 'c'), if I bother to vote at all, I shall be voting Labour for the first time. Let them sort their own mess out! I'd give them a year or so before being ousted by Cameron's replacement. Assuming – and hoping – it was someone of Mr Redwood's calibre!
March 31, 2010
Labour won’t sort out their own mess, they will bankrupt the country. They will finish us off. We now hear that in the event of a hung parliament, Whitehall has drawn up contingency plans that would give Gordon Brown extra time to form a viable administration if there is no clear winner at the general election. Under the proposals, parliament may not reconvene for nearly three weeks to allow the prime minister to form a working government with the minority parties. I think Mr Brown will do whatever it takes to cling to power and that includes changing the rules for his benefit.
March 31, 2010
If / When George wants to Borrow £100 Billion can you put in a word from me, tell him I'll lend the country £100 Billion and all I will charge him is the Interest at 5%.
That's right, tell him forget Gilts, just give me the nod and I'll run off £100 Billion for him, all they have to pay back is £5 Billion.
March 31, 2010
There are very few polticians – and almost none on the Labour side – who have any clue what they are talking about on these issues. They are reading from briefs and are incapable of coherent argument. Their solution is to avoid debate with anyone who does know what they are talking about