Cut the risks of Euroland


           Whilst we were meeting in Manchester to debate the economy, world markets took another beating. There was alarm about delays to getting the Greek deficit under control. There were fears that the next tranche of money to Greece would not be made available. There were worries about a Belgian bank.

          There were different worries in the USA about banks and airlines. The inter bank markets remain frozen. Fear stalks the financial world.

         UK policy towards Euroland should not be based on some idea that we have a duty to help bail it out, or that is in our interest to spend our money on trying to shield them from the consequences of their ill gotten scheme. Instead our policy should be motivated by two main concerns. The first is everything this government does should be to to curb the UK deficit. We do not have money to spare for a single currency in search of a sovereign, with wayward members who borrow too much. The second is to limit the UK’s risk to the likely losses and dangers now emanating from the continent.

          To cut our risks the Uk should

1. Rule out a tax on UK financial institutions to help pay for Euro mistakes, whatever the attempted legal base, argument and what others might want to do

2. Get rid of all at risk Euro area sovereign bonds held by government owned banks and olther direct holdings using public money. The ECB is buying them so let them increase their collection.

3. Manage Euroland banking risk cautiously. UK taxpayers cannot afford losses through our government owned parts of the banking system in banks that get into difficulties, or through banking bond haircuts 

4.Refuse any more money into Euro bail out schemes, whatever the legal base or route

5.Urge the IMF to regard financing members of the Euro zone as a Euro area matter, not as suitable candidates for IMF money

              The Chancellor rightly says you cannot cure a debt crisis by borrowing more. This should underpin UK policy towards the Euro area. The UK is going to have to live with a slow growth Euroland at best, and something worse if they do not soon come up with a serious fix of their problems. The UK needs to turn its goods exporters eastwards, to emerging economies with money to spend.

          I am glad the Chancellor recognised yesterday a bank lending and credit problem in the UK private sector. I will comment another day on the options, and why fixing the private sector banks is preferable to a state bank.

                   Yesterday I spoke at the Adam Smith meeting on a growth strategy, on the Euro and the UK economy at the book launch, and on controlling public spending at the CPS meeting, so I was not able to moderate posts. As always short posts that do not make contentious and personal allegations get posted quicker.  Avoiding references to unknown websites also helps.


  1. lifelogic
    October 4, 2011

    I agree fully with all and particularly number 2 & quickly.

    I am delighted that Amanda Knox and Raffaele Sollecito had not already been executed before they were finally aquited and released yesterday. At least the EU
    has got one thing (capital punishment) right for once – abolition being a pre-condition for entry into the Union.

    Not of course that you have to be a member to take this sensible line.

    1. lifelogic
      October 4, 2011

      Perhaps a small point. You can sometimes help a debt problem by borrowing more if you can borrow more cheaply than the current debts and pay them of or if you have something sensible to do the money that produces a solid good return.

      The trouble is the government nearly always invest in loss making ventures like lending to the PIGS.

      At the moment countless small businesses that are starved of cash and could afford to borrow and produce a return well above government borrowing costs.

      1. lifelogic
        October 4, 2011

        Perhaps a small quibble – you can help a debt problem by borrowing more if you can borrow more cheaply than the current debts and pay of the expensive ones or if you have something sensible to do with the cash that produces a solid good return and get people back to work and off benefits.

        The problem is how to get this money direct to the many good businesses with good investment on hold, without the government pocketing it, and wasting it on HS2, green nonsense, the green bank or similar.

        I would suggest in the short term extend the HMRC payment help arrangements and stop RBS and other state owned banks from pushing good customers away. By sorting out their UK lending sections in some way or other.

        In the long term more competition in banking and other finance for small business. Also perhaps allow the Enterprise Investment Scheme to issue some guarantees on returns to investors.

        It might also make sense to borrow and use the money to buy out of the some PFI schemes – if the other parties are in need of the money as they may well be.

        Reply: You don’t solve a problem of borrowing too much by borrowing more – refinancing at a cheaper rate does help if you can do it

        1. lifelogic
          October 4, 2011

          To Reply – You can if you borrow at 3% PA and invest it in the right way to produce 10-40% PA. The problem is governments never do invest wisely. But if some could be lend to sound private businesses at circa 10% with security why not they need it and have uses for it.

          Also it can create jobs, tax revenue, and decrease benefits.

          1. lojolondon
            October 4, 2011

            Yes, but I don’t have to tell you that governments are the worst place to invest your money, they are totally non-competitive, politically correctness takes precedence over service to the client, and there is no accountability. A good example is housing – 800,000 properties are standing empty in the UK now. What private investor would allow a situation like that?? I guess that is why the ‘right to buy’ is being pushed, and a very good thing it is too!

          2. David Price
            October 4, 2011

            If 10% return on a secured loan is seen as reasonable by sound SMEs why not try a different approach?

            Instead of HMG lending the money directly or trying to push it through the banks. Why not establish some sort of bond platform or credit union for the general public to lend directly to the SMEs. If people start lending to and benefiting from local industry and businesses perhaps they will buy more local goods and less blasted imports.

            Perhaps the answer to effective competition in banking is not to create yet more banks…

          3. lifelogic
            October 4, 2011

            There is certainly a problem I have seen it all over the place. The the banks are restricting lending severely and picking and choosing. Property development funding is almost unobtainable and very expensive when it can be obtained. Many are paying 10%APR and even worse on smaller sums. If they just got some sensible lending action from the state owned banks (that was not in the direction of pulling money back) it would be good a start.

            I agree the government do tend to waste it. But if some save method of actually getting it through to sound businesses were found it would be good for all. Growth, jobs, reduced benefits, tax and interest profits for the state or banks (unlike the Irish/Greek loans made).

            I also agree that regulation, energy, taxation, employment laws and the rest all need urgent attention for good growth too. Progress has been pathetic so far.

            Companies I know of have property charged to banks worth over £2.5M are borrowing under £1M and cannot borrow even another £100K at any price from the existing lenders. Other lenders have similar restrictions and do not want to go much above 50% LTV so no worth moving the debt and thus developments are put on hold and builders out of work.

          4. lifelogic
            October 4, 2011

            David Price

            Indeed secured lending by individuals directly would be good for both but most people would not want to do it. The “Enterprise Investment Scheme” is good with 30% tax relief too but you cannot guarantee an exit to the investor which very negative and it has too many restrictions.

            Relaxation of the EIS rules would be good too – perhaps to include property or development for a year or two until the banks are sorted out and some minimum guaranteed exit.

          5. zorro
            October 4, 2011

            The banks are not investing in property because they are scared of the potential fallout if there are big drops in prices. They are also hoarding cash to try and convince the authorities that they are solvent and comply with Basle III regulations.

            This tells you something about the true state of the banks.


          6. lifelogic
            October 4, 2011

            May I recommend James Delingpole’s excellent blog today “Let’s commit suicide more slowly,’ suggests Osborne” and (one I have not checked out-ed)


        2. Ralph Musgrave
          October 4, 2011

          Lifelogic, Where is the evidence for the currently popular fad, namely that lack of access to credit is the main problem facing employers? According to this survey, the latter problem is of equal importance to two other problems: “competition” and “costs of production” and way behind “finding customers” – i.e. lack of demand.

          Moreover, banks lend when they see a firm with a full and profitable order book. I.e. increase demand, and the alleged lending problem takes care of itself.

          As for the US (for what that’s worth) surveys indicate that lack of access to credit is a total irrelevance. See:

          1. (Page 18)

          2. (Page 4)

          3. (Page 26)

          1. lifelogic
            October 4, 2011

            Is is, I think the main factor for many businesses, but I agree all the usual regulations, tax, high energy, big government, planning, all need to be addressed to get good growth.

            All would get the growth ball rolling faster and faster but Cameron prefers the no retirement, equality, EU, laws and temporary workers directive and all the other kicks in the teeth to business.

          2. zorro
            October 4, 2011

            The no retirement rule is the kick in the teeth in my line of work. The fact that one may be stuck with 80 year old…ahem….less effective workers gives me sleepless nights.


      2. Disaffected
        October 4, 2011

        Is the credit easing an announcement a signal that Operation Merlin has failed and that banks have not kept to their part of the bargain to lend to small businesses?

        I though t the deal was to let them keep obscene bonuses and in return they would increase lending to SMEs. If this is not the case are bonuses to stop or to be heavily taxed?? Is this another U turn for the Tories?

    2. lifelogic
      October 4, 2011

      The European arrest warrant on the other hand is an appalling law. Do the so called “Liberal” Democrats or the Tories not have anything to say or do on this outrageous law.

    3. Horatio McSherry
      October 4, 2011

      lifelogic, I’m afraid you’re slightly off about capital punishment being outlawed by the European Union. In the Charter of Fundamental European Rights it does have a clause that says, “No one shall be condemned to the death penalty, or execution.”

      However, in Article 2 of the European Charter of Human Rights – which the CFER explicitly states that it is a mirror of – it states that:

      “Deprevation of life shall not be regarded as inflicted in contravention of this article . . . in action lawfully taken for the purpose of quelling a riot or insurrection .”


      “A State may make provision in its law for the death penalty in respect of acts
      committed in time of war or of imminent threat of war…”

      I realise it’s not exactly the same as the point you were making about the Knox and Sollecito case, but the death penalty has certainly not been abolished. In fact it COULD have been used last month to quell the London riots.

      1. lifelogic
        October 4, 2011

        Thanks – so there is hardly anything at all positive I can find in the EU.

        Though it does seem to be listed as one of the criteria for entry to the EU. The European Court of Human Rights would no doubt stop it anyway on the grounds of “right to a family life” or oppression of some minority group or other, or clearly not “gender neutral” (as nearly all murders are by men) or something else.

    4. Single Acts
      October 4, 2011

      It is extremely unlikely they would have been executed ahead of any appeal as you well know.

      1. lifelogic
        October 4, 2011

        No but the Guilford Four and the Birmingham Six and too many other might well have been. Also you never know it had already been 4 years – perhaps they would have been tempted to rush the court through earlier to save money or something.

        Looking at the reports of the Italian police I hope they do not come with an European arrest warrant for me (due to some muck up or other) after my next visit. That would certainly close my businesses down even if it only took them a month or two to sort out.

        1. Single Acts
          October 5, 2011

          It is exceptionally unlikely the Italian authorities would have rushed the execution of an American female.

          Evidential standards have improved by a quantumn since the 1970’s with the discovery of DNA profiling and ever present video surveillance.

          What is clear however is that released murderers who have gone on to murder again have accounted for more than 100 people since the UK abolished capital punishment and I believe many more have been killed by street thugs knowing they would face about 14 years if caught rather than righful justice.

          The state is far, far, far from perfect but if it comes down to a numbers game, capital punishment saves lives.

          1. lifelogic
            October 5, 2011

            If the alternative is Life imprisonment and were actually enforced it is unlikely to save lives. Clearly if they keep releasing dangerous people on to the streets they may kill again.

            It might save some money only.

          2. lifelogic
            October 6, 2011

            DNA can often be a problem for justice as it is often presented as incontrovertible evidence when it can be contaminated or planted. Rather like the great “shaken baby experts” claiming they could usually diagnose this, without any reasonable doubt and distinguish from any other fall. Or the “experts” who claimed silly probabilities that two cot deaths would occur in the same family without bothering to allow for the fact that the children were genetically similar so the dice were loaded.

            Or the ” munchausen by proxy cases” – rather dangerous some of these paid experts once they get a few letter after their names and get on a role.

            Just look at the “global warming priests”.

    5. Disaffected
      October 4, 2011

      Not sure this case is a good example of justice or that they were innocent of the crime. They were found guilty first time round before the legal people found a way to alter this. The evidence was found unreliable, I’m not sure this proves their innocence.

      1. A different Simon
        October 4, 2011

        It’s an example of European Justice – they got the best (lawyers-ed) money could buy .

        If Knox had been fat/less-photogenic/black/poor nobody would have given a toss about her and she’d still be in prison .

        (personal allegation left out-ed)

        1. lifelogic
          October 4, 2011

          I tend to agree alas. What also is so worrying is childish nature and base, theatrical, emotion of the courts and juries and the large financial incentives around (often not for justice). The more horrific the crime, the more they seem need a culprit, any culprit, regardless of logic and evidence.

          People are allowed in court to concentrate on the horrific nature of the crime endless detail when the real issue is – did this person do it or not?

          1. A different Simon
            October 4, 2011

            Not sure I have any confidence that Al Megrahi was anything more than the patsy for Libya the UK and US .

            I’m sure the diplomatic pressures on the court must have been huge in both cases .

            It remains to be seen whether Knox appears on chat shows and gives interviews to celeb magazines .

            For sure Meredith Kercher won’t .

            Somehow , I don’t think we’ve heard the last about Foxy Knoxy .

          2. lifelogic
            October 4, 2011

            I agree on “Al Megrahi” there did not seem to be any real evidence. Another case of “this was very, very, horrific mass murder” so someone must be found guilty regardless and they would not have brought him to trial if they did not know he was guilty would they Doris?

          3. A different Simon
            October 5, 2011

            Another example , Millie Dowler ,

            Rather than try and find the culprit just pin it on the step-Father .

            There are measures which can be taken to get a conviction ; hand cuff the defendent , surround them with about 6 very burly policemen , have armed police outside , Juror’s conclude the defendent really must be very dangerous .

    6. Bob
      October 4, 2011

      The anti capital punishment constituency usually make this argument whenever a conviction is quashed on appeal. Having the option of capital punishment doesn’t mean it would be compulsory. In reality, if reinstated I think it would be used rarely, especially in view of the softness of our judiciary towards violent crime in general. There seems to be a gulf in sentencing between wilful endangerment and minor misdemeanours. We have people in jail for TV licence fee evasion and murderers and rapists walking among us like ticking time bombs.

    7. Francesca
      October 4, 2011

      What does a comment about Knox have to do with Redwood’s article about EU economics?

      1. forthurst
        October 4, 2011

        I can only assume JR has decided to compete directly with the DM by tolerating this thread.

        Reply: Not my aim, but I try not to censor too much. I will not writing on this topic myself.

        1. lifelogic
          October 4, 2011

          Far better than the D/M and free too. Perhaps I should restrict myself a bit more to the topic at issue but with the BBC, the “Tory” contrived “conference” and the news and radio 4 one just feels annoyed by almost every bit of nonsense you hear about 50 a day.

          Anyway I need to do a bit more work – given that the banks and the government are all trying to put me out of business.

    8. lifelogic
      October 4, 2011

      Micheal Gove, listening to his speech, seems to be a good & solid (boiled perhaps) egg. Though the competition so far, at the conference, is rather limited. even if he does seem to have a bit of a hang up on spelling (perhaps he feels he had to learn it so every one else must) but grammar is rather more important. Do many teachers know enough grammar in order to be able teach it nowadays – I rather suspect not.

      Anyway surely – a rose by any other spelling would smell as sweet.

  2. Robert K
    October 4, 2011

    Yes to all five of your points. Good that you are taking a high profile role at your party conference – with luck the message will strike home with the Government.

    1. Robert Christopher
      October 4, 2011

      I agree!

      These are good positive points that JR MP has made and need to be discussed in the media by other politicians and by other parties, including UKIP. There appears to be a government policy of inaction, punctuated by EU directives which gradually move the centre ground to complete incompetence.

      (I don’t think hope, on its own, has much hope, even though we may live in hope!)

  3. matthu
    October 4, 2011

    In an attempt to counter the argument put forward that only a minority of voters want an Eu In/Out referendum, I offer only the question that Roger Helmer MEP posed to David Cameron when they met:

    “Prime Minister, you have been reported as saying that you did not want an EU In/Out referendum, because you believe that British membership of the EU is in Britain’s interests.Maybe my EastMidlands region is not typical, but I’d say that 90% of Conservatives in my region would disagree with you, and 80%would disagree strongly. Shouldn’t we listen to our members?”

    1. norman
      October 4, 2011

      David Cameron is being disingenuous (hold the front page!) when he says that.

      What he says may technically be true but it’s a distortion of the fact that a majority of people feel that the current relationship with the EU needs to be modified, hardly the same things as saying that almost everyone is happy with things the way the are, which is what he implies.

  4. Sue
    October 4, 2011

    Of course if we weren’t bound by so many stupid rules and red tape issued by the EU, our economy would grow much quicker.

    Unfortunately, that would spoil the Masterplan and gravy train for our treacherous government. You know the one I mean, the Non-Conservatives who don’t believe in democracy!

    1. Oldrightie
      October 4, 2011

      Sue, we have, you and I, been making this point for years. Better off in every respect out. A majority of real Tories feel the same. Time they voted with their feet!

      1. Tim
        October 4, 2011

        I agree. The Tories aren’t listening to their electorate and will not allow a referendum on the monstrous undemacratic hugely expensive and bureacratic EU. Therefore if a vote for the Tories means more of the same it is time for a true conservative party that will stand up for England.

        1. Mike Stallard
          October 4, 2011

          I follow Dan Hannan every day after reading this excellent blog. For him, a thousand hits is nothing.
          Notice, today, how this thread has almost 60 posts.
          The bloggists like you and me are always interested in radical remarks about the ghastly EU.

  5. Electro-Kevin
    October 4, 2011

    Thank heavens you’re being heard, Mr Redwood.

    Whether your advice is heeded is another matter. I suspect that we have a PM with Federalist inclinations (his deputy definitely so.)

  6. Mick Anderson
    October 4, 2011

    The suggestion is that Mr Osborne should lead by example in not funding the Euro further. Good idea, but I’d be more confident if he started by showing more care with UK spending.

    Also, I’m not sure about this collecting up of small business loans and funding them as a package. It all looks exactly the same financial method as the bundling of sub-prime mortages to re-sell them as AAA investments, and we all know how well that went!

  7. Mike Stallard
    October 4, 2011

    I think this is a really good, constructive post. If only we could actually be what we are – like Japan and China or Singapore and Malaysia – an offshore island which is not really part of the mainland.
    OK so here is a constructive remark without mentioning any obscure website: I do hope that in every single utterance you, our honourable host, are doing your damndest to say in private what you so boldly and truly say in this thread! I’ll bet the pressure when the back slapping begins in Brussels etc is so intense that it will be all too easy to give in and start bailing out the hopeless Greek problem.

  8. Ralph Musgrave
    October 4, 2011

    JR says “everything this government does should be to curb the UK deficit”. Just to be pedantic, the part of the deficit designed to bring stimulus should be whatever it needs to be. That is, making it an objective to reduce this part of the deficit does not make sense.

    In contrast, the STRUCTURAL deficit is pointless, and I agree, should be reduced. And that can be done far more easily than is commonly supposed: just raise taxes (or cut public spending) and make up for the deflationary effect of that with some extra QE. The effect of the latter would NOT, repeat NOT be to raise the money supply to above where it would have been had government never indulged in excessive structural borrowing, and funded itself from tax instead. Reason is that when government borrows as a substitute for tax, it has to raise interest rates (i.e. rein in money from the private sector) at the same time. Reversing the process involves doing the opposite: feeding that money back into the private sector.

  9. A different Simon
    October 4, 2011

    “Manage Euroland banking risk cautiously. UK taxpayers cannot afford losses through our government owned parts of the banking system in banks that get into difficulties, or through banking bond haircuts ”

    Horse , stable door ?

    Why wasn’t this done a year ago or 3 years ago ?

    Why hasn’t the Govt also tried to ban other activities which allow people to benefit from another crash itself (as opposed to a subsequent recovery) including :-
    – short selling ?
    – writing and buying of synthetic CD swaps by the state owned banks which is still going on ?

    1. javelin
      October 4, 2011

      I think there is a real urgency now the ECB is trying to turn the European Financial Stability Facility (EFSF) into a bank in order to “leverage” 2Trillion out of 500Billion.

      The problem is the new bank will be underwritten by whom?

      The tax payer – perhaps. But it simply kicks the can down the road.

      Can the new ECB pet bank default? In which case they are defaulting on 2Trillion now rather than the 500billion.

      Presumably this all about the EU having more NEGATIVE power to lord over the Euro countries. With the threat of a 2 trillion default they can force the citizens of Germany to do what ever they want. The ends will justify the means to these people.

      Recent research papers have shown those who believe ends justify the means are more likely to have sociopathic or psychopathic personalitites. Do we really want these trait in our leaders?

      1. A different Simon
        October 4, 2011

        Thanks for you reply Javelin .

        Have enjoyed your recent insights where you have hilighted that the West in general , particularly certain countries , have a tendency to haemorrhage capital .

        You talked about “those who believe ends justify the means” .

        This is the dominant trait accross our disconnected political class .

        I have also observed that in many statists/socialists this manifests itself as a lack of open-mindedness bordering on hostility towards alternative points of view .

        I just can’t understand how anyone can believe anything good can come out of an organisation founded on lies and deceipt .

        1. zorro
          October 4, 2011

          Founded on lies and deceit…and continues to operate in the same way. It brazenly ignores treaties and commitments, hides its true agenda from the electorate, and does not tolerate dissent (ref Marta who refused to authorise their accounts). It is a fundamentally elitist organisation which holds the views of the populace in contempt.

          It is clear that there will be continual Euro printing and devaluation of their currency, but the political elite will have achieved their aim.


  10. Andrew
    October 4, 2011

    If the British government are seen to be selling European bonds, wouldn’t that preicipitate a run?

    State banks picking winners in order to provide cheaper credit.
    State ministers picking winners for variable tax rates. Spot the difference.

    One man’s Osborne is another man’s Milliband. The Islington Consensus continues to win out every time whether the rosette is red, blue or yellow.

  11. Greg
    October 4, 2011

    Excellent post, all your points are good and should be implemented immediately along with measures to pull back from the EU and eliminate the burden of regulation we’ve incurred by membership of the club.

    Of course a much simpler way is to simply leave and repeal all EU legislation by a single act of parliament. That would save us hundreds of billions of pounds and free us of the crushing weight of the EU parasite.

    Trouble is Dave and George won’t do any of these things. They are as pro EU as their Lib Dem pals and prefer to rattle along with the Euro train wreck until it finally comes off the rails and smashes head on into the oncoming reality express.

  12. colin
    October 4, 2011

    I read today that some MEP has said that the EU are planning to tax financial institutions in a way that the UK could not veto—by doing it as a VAT

    1. Denis Cooper
      October 4, 2011

      To save me time perhaps JR will permit me to simply reproduce my latest comment on the Telegraph articles about that suggestion – there are now two of them in different sections, both with the same text which has been modified overnight.

      It’s inconsistent for the article to say:

      “Under European rules, new taxes have to be agreed unanimously by all members but VAT can become law with a simple majority.”

      but still also say that a FTT presented as VAT:

      “could be imposed without being ratified by a vote”.

      I repeat more or less what I said yesterday, that if Tory MEP Kay Swinburne really believes that “European rules” would permit the Commission to impose this without any need to gain the agreement of the member state governments, or alternatively that their agreement would be needed but it could be a majority vote rather than unanimity, then she should be able to cite chapter and verse on those “rules”.

      The most basic “rule” that I find is Article 113 of the Treaty on the Functioning of the European Union, on page 94 here:

      “Article 113

      (ex Article 93 TEC)

      The Council shall, acting unanimously in accordance with a special legislative procedure and after consulting the European Parliament and the Economic and Social Committee, adopt provisions for the harmonisation of legislation concerning turnover taxes, excise duties and other forms of indirect taxation to the extent that such harmonisation is necessary to ensure the establishment and the functioning of the internal market and to avoid distortion of competition.”

      Which, as the then Article 93 TEC, was the legal base cited by the Commission in this 2007 proposal for a new Directive “amending Directive 2006/112/EC on the common system of value added tax, as regards the treatment of insurance and financial services”:

      So, as I said before, EU lawyers are clever and devious and unscrupulous, but unless they’ve found some very fine print indeed I’d say that trying to circumvent votes and vetoes by treating a FTT as a form of VAT would be like jumping out of the frying pan into the fire.

      Or, as Mats Persson of Open Europe is now quoted as saying::

      “Trying to get around the veto in this way is unlikely to work”.

      It really is necessary to go back to Kay Swinburne MEP and ask her for the full legal details, chapter and verse, to support her claim that it could work, if indeed she has made that claim.

      I have to say that over the years I’ve learned not to assume that Tory MEPs are invariably reliable sources of information about the EU, to put it mildly.

      1. davidb
        October 4, 2011

        But input VAT is reclaimable for businesses, and isn’t charged at the point of sale between businesses in other member states which are VAT registered. Foreigners – outside the EU – don’t pay it on goods ( and I assume services ) imported from EU states.

        The people who would end up paying it would just be the domestic EU citizens. And we are paying for the banksters already. A red herring that one I suspect.

  13. Gary
    October 4, 2011

    The coming default deluge will sweep us all away, and the niceties about in or out of europe will be moot. They cannot control the greek brushfires, wait until Portugal,Spain, Italy and the rest get engulfed. Geithener frantically running around Europe, is signalling that the USA is also on the European hook. The US banks are exposed to the CDS and other toxic derivatives of EU countries that they have sold. The FT reported :

    ” about three fourths of the exposure(of US banks to Europe) is not direct foreign claims, it is gross notional derivatives and unfunded commitments that significantly inflate the exposure”

    This is a banking crisis transferred to sovereigns. Even the BIS said :

    “The scope and magnitude of the bank rescue packages also meant that significant risks had been transferred onto government balance sheets. This was particularly apparent in the market for CDS referencing sovereigns involved either in large individual bank rescues or in broad-based support packages for the financial sector, including the United States. While such CDS were thinly traded prior to the announced rescue packages, spreads widened suddenly on increased demand for credit protection, while corresponding financial sector spreads tightened.”

    When you fight debt with debt, there is no way out.

    1. Mike Stallard
      October 4, 2011

      People have been talking like this on this blog certainly for months past.
      So how is it possible?
      As the EU/Germans enter Greece and get more and more bossy and preposterous, the streets of Athens will fill up with rioters who will get more and more insistent. The German/EU people will get more loud and more insistent too as will the “elected” Greek government. People like M Sarkozy will begin to tut tut.
      The rioting will get worse as the economic crunch bites deeper and deeper into Greece.
      That is when the Greek Military will intervene and the Colonels will take over again.
      They will demand freedom because that is what Generals do. Freedom, of course, for them! They will perhaps even come to leave the EU altogether.
      So what can anyone do? The Europeans will not fight another world war. They will have to admit that they have lost Greece.
      And after that?……………….

  14. waramess
    October 4, 2011

    Everything you say runs contrary to the policies and the instincts of this pro EU government.

    Cameron is not a passing phase he is yet another left wing Conservative PM who does no more than continue with the debilitating policies of past governments.

    Personally I support “none of the above” and I am surprised the right if the party continue to do so. They would have no less impact as members of the Labour Party.

    Now surely is the time for a new party who would garner support instantly from an anti EU stance and its right wing policies would sit more easily with the majority of the electorate.

    An opportunity to save this economy rather than influence the leadership of a rather sad and failing left wing Conservative administration

  15. alan jutson
    October 4, 2011

    John your suggestions seem very sensible, and should have perhaps been taken or prepared for, some time ago. I only hope the government has made such preperations

    We now need to look after ourselves first, as this is what others have done in the EU club for decades.

    Reading between the lines (perhaps correctly perhaps not) it looks as though you really do believe that Europe is now getting very, very close to a possible financial collapse, with all the fall out spreading far an wide, thus your insurance scheme of action should mitigate or at least limit some of the immediate damage.

  16. Horatio McSherry
    October 4, 2011

    Another excellent post John; I epecially like #2.

    As for #1, that’s the one that really worries me. I don’t want to believe that a British Chancellor would do that, but I’m not totally 100% that George Osbourne (or a successor for that matter) wouldn’t do it.

    I agree with the phrase “whatever the attempted legal base”, not merely for the fact that in bailing out countries the EU have absolutely, openly, and unabashedly broken their own laws to prop their failed ideology up.

    1. Martyn
      October 4, 2011

      I fear that you may have mistaken the EU interpretation of their Laws.
      EU Laws must be taken to mean whatever the Commission says they mean and not neccessarily how they are read by the common herd i.e. us.
      Alternatively, of course, the Commission simply ignores their Law in their relentless drive towards establishing a left-wing federalist state. And who can stop them? The UK cannot on its own affect the outcome and, as others say elsewhere, Cameron will soon have no other option than to throw in the towel and our money with it.
      Oh for a Churchillian character to lead our benighted nation out of this mess. To my mind the EU appears to be an economic and propaganda war machine whose aim is to destroy nation states rather than being a united family of nations. If I am allowed to make such a statement on John’s admirable site?

      1. uanime5
        October 4, 2011

        EU laws mean whatever the ECJ says they mean. For the purpose of the legislature is to make laws and the purpose of the judiciary is to apply these laws.

  17. javelin
    October 4, 2011

    The problem with the Eurozone is that it is no longer competitive. Capital flows out of the Eurozone and from one area of the Eurozone to the other are at the root of this crisis.

    The subprime crisis in the US forced banks in the EU to stop supporting the uneconomic policies. Banks were forced back nito reality. Private capital flowed out of the public (and private) sector to rebuild the bank capital after they had lent too much of it out.

    The true picture is begining to emerge. This is not just a problem of over spending it is problem of under competitiveness. Wages need to fall. Standard of living needs to fall. People need to work harder. People need to compete with the East more. Rights and entitlements need to be reduced. We need more profits to maintain our GDPs.

    There will be an endless recession if the Eurozone fails to compete. Falling GDP will be the “new” normal – falling will become a static trend and accepted as reality.

    It is clear the Labour Party first freeloaded off the efforts of the Thatcher and Major Governments, once the economy became socialised and stopped being competitive and making profits they simply borrowed their way into power.

    The PIIGS debts and Government spending are NOT the cause of the crisis they are a symptom of it. The cause is under competitiveness.

    1. A different Simon
      October 4, 2011

      Let’s not forget the rise of China was due to exactly to what you have been describing recently ; movement of capital .

      They were too smart to compete head to head with Western companies and instead persuaded them to move production over to China .

      At the moment it appears that the politicians are trying to protect the investment Western companies have made in China and India by deliberately ensuring Western countries remain uncompetitive .

      Whilst we appear to have gone too far with rights and entitlement , we will never be able to compete with countries that refuse to recognise :-
      – human rights
      – the environment
      – a sense of responsibility for their own disadvantaged citizens

      Would things work better if China and India concentrated on producing and selling into their own domestic market and we did the same ?

      1. uanime5
        October 4, 2011

        If only it was possible to put a tariff on things made outside of the EU.

      2. Tedgo
        October 4, 2011

        I read today that the American Senate is working on legislation to introduce protectionist measures (tariffs) when countries like China keep their currencies artificially low.

        1. A different Simon
          October 5, 2011

          It’s got to be in the long term interests of everyone to co-operate rather than just compete .

          In the case of the UK I think it boils down to education and I’m not talking schools :-
          – failure of consumers to appreciate the importance of money circulating in our economy and trying to buy home produced items and consumables to make this happen
          – company board members slavishly following the latest fads and fashions for offshoring and outsourcing even in areas where it is totally innappropriate .
          – cost being the first , second and third criteria in any decision . No room for quality .
          – voting for the same parties who betray them every time

  18. sm
    October 4, 2011

    I will comment another day on the options, and why fixing the private sector banks is preferable to a state bank.

    State control of the central bank infrastructure may be no bad thing. It can be paid for by the banks as a group. Fear of bankruptcy should not translate as undue leverage on decisions. Plug and Play banking why not?

    What we have is far from Capitalism but a subsidised sanctioned sector.

  19. Brian Tomkinson
    October 4, 2011

    This government seems to be becoming more like Brown’s Labour government by the day. Planning and actually spending more and more, increasing the debt by 50% over a parliament (it took Brown 10 years to increase the amount of debt by so much, by Cameron’s own admission in the Commons) printing more money and allowing inflation to rise inexorably …It is all so depressing. There is no hope that they will do anything about our membership of the EU – they will capitulate using the argument that the economic importance of the EU is so much in the national interest that there is nothing they can do.

  20. lojolondon
    October 4, 2011

    John, This is why I read your posts – for the common sense that gives me hope.

    I am afraid that the Chancellor will be tempted/forced/bribed/cajoled into giving UK taxpayers money to this bad charity. If he agrees with your points above then I am sure we are going to ride the storm better than any Euro country and the USA (who are shortly going down the tubes with that crazy QE – “last resort of a desperate government”.

  21. Disaffected
    October 4, 2011

    Pompous Cameron now wants to tell us what we think. He is currently saying that British people do not want an in out referendum. It begs the question why he promised one in opposition. Was this again speaking to become popular with no intention of acting on his words. A cast iron nothing of a person. How dare he dismiss the public’s views in such an arrogant way presuming he knows best in contrast to overwhelming public opinion. We are adults and can think for ourselves.

    Reply: He never promised an in/out, he promised a vote on unratified and Lisbon, and backed an amendment in the Commons to that effect.

  22. Caterpillar
    October 4, 2011

    1,3,4,5 all seem reasonable. Agree with 2, but with the question of what would they be replaced by, and since I don’t know how much is held, what exchange rate effects there would be?

    On – “I am glad the Chancellor recognised yesterday a bank lending and credit problem in the UK private sector. I will comment another day on the options, and why fixing the private sector banks is preferable to a state bank.”

    I shall look forward to the discussion. Of the Chancellor’s discussion on “credit easing” I wonder why more (anything) wasn’t made on the the gilt bias in QE1, and whether the credit easing will be a rebalancing of QE1 (as discussed by others in previous postings). If it is not this I would be worried, as we know the BoE has admitted that the ZIRP-inflation policy has taken approximately $50bn from savers, whilst borrowers have effectively gained $50bn – to me this still looks like looting/redistribution. Given the credit difficulties and restrictions on savers we have been seeing a gradual shift to corporate bonds for the small saver – the market mechanism is responding to match savers and borrowers needs, if the Chancellor’s “credit easing” is not a rebalancing of QE1 then the effect may well be to again rip-off savers.

    (I only managed to listen to part of the PM’s interview on R4 ‘Today’ this morning, I had to just turn it off. There seems to be a continuing inconsistency between that which is said, and that which is done.)

  23. Ralph Corderoy
    October 4, 2011

    Must posts be moderated in order? If not, perhaps you can find a trusted helper to moderate and approve the non-contentious ones, leaving you to mop up as time allows.

  24. outsider
    October 4, 2011

    The rest of Europe is going Britain’s way. Inflation was the word totally missing from Chancellor Osborne’s speech yesterday. We are now likely to get more of it, not just at home but from the eurozone,

    If Greece et al are not to devalue, the only viable alternative is for the rest of the eurozone to inflate to make the uncompetitive countries competitive again. This seems the inevitable message, if not the explicit purpose, of the £2,000 billion? bailout fund.

    But inflation is not the answer for growth. Inflation is now a bar to growth. Mr Osborne, Like Sir Mervyn and the insidious Mr Posen, states by omission that inflation does not matter. Tell that to anyone shopping for groceries. Inflation is cutting demand as surely as a 10% nominal wage cut, so it is hardly surprising that business is not inclined to invest. Yes, millions of families are enjoying low mortgage payments to compensate but they know that this cannot last so it may help their wallets but not their confidence, which is already dented by fear of unemployment.

    Annual inflation should fall back in January/February as the VAT rise falls out of the calculation but there is a head of steam from producer prices, food and imported goods. Euroland now seems determined to keep this pot boiling, just to keep Greece in the euro project.

    1. Caterpillar
      October 4, 2011

      ousider: You are correct he missing “inflation” word says it all about the Government’s acceptance of bad policy.

      I think the VAT fall out will only to drop the inflation rate by ~1%. So even that is very unlikely to drop inflation back down to target, or below target to symmetrically compensate for the over target years.

      As the BoE seems to play it, inflation is the answer to achieve nominal growth, but has of course damaged the real recovery. It is frightening to think that as early as January 2010 there were some expectations for a tightening, over two and a half years of damage, two governments and nothing done about the MPC/BoE policy.

  25. Winston Smith
    October 4, 2011

    John, what is your view on Osborne’s anouncement to bundle up small business debt, underwritten by the taxpayer? Have we learnt nothing from the sub-prime disaster? Justine Greening appeared to know very little about it, when questioned. Did some just make it up last minute and put it in his speech to play to the lazy media? If Ed Balls had proposed this initiative, there would be howls of derision.

    Reply: i wish to see more of the details before commenting. I have made my opposition to a new state bank clear enough.

    1. outsider
      October 4, 2011

      Dear Winston Smith:

      As a previous fan of Justine Greening in a government of mediocrities I was depressed to see her hopeless performance exposed by Brillo. The only excuse I can think of is that she was briefed to say it would not raise borrowing or create a new risk for taxpayers and did not have her heart in it.

      As a City commentator said this morning, risky business needs more risk capital not debt and the country does not need another morally hazarded sub-prime debt debacle.

      The scheme sounds like yet another desperate last-ditch attempt by the Posen, Bernanke, Bean school to prove that their obsolete economic theory works.

    2. zorro
      October 4, 2011

      I was quite frankly amazed by this announcement. Is this a Conservative chancellor or a communist one. Why doesn’t the chancellor take over the ownership of the small businesses and take any profit too?

      The government never picks winners…


  26. Steve Howe
    October 4, 2011

    Dishonest politics has given us dishonest money and the current EU is no exception, but given that only racists, cave-dwellers and history deniers would argue that we have nothing to gain or learn from mutual arrangements with our Continental cousins, I would be interested to see some honest and positive ideas on what we could do together in Europe.
    One of the weaknesses of the Eurosceptics (I am one) is that they seem to be defined by a negativity that goes beyond their analysis of the Euro and the corrupt Euroland institutions. There seems to be a disdain for ‘any kind of Europe’, which I do not share and regard as dishonest.
    Is there any blueprint for an honest Europe, because there may be a growing audience for some new thinking?

    1. outsider
      October 4, 2011

      Dear Mr Howe,
      Like you, I would prefer a reformed EU to leaving but every evidence indicates that this is not possible – the latest being sneaky attempts to impose FTT and to nullify the UK’s European Union Bill (Act?). As Mr Redwood suggests, we should still attempt reform in co-operation with like-minded member states with a specific programme (blueprint) over an extended period before concluding, as I suspect, that the only choice is in or out. You will understand that many others have already reached this conclusion and can see no point in delay.

    2. forthurst
      October 4, 2011

      You have simply failed to grasp that the EUSSR is a French racket. The French are a vainglorious bunch who ever since Bismarck have been trying to control the Germans, their betters. They have now successfully bound them into the EUSSR, abetted by a monstrous calumny; the French run the EUSSR from Brussels and the Germans pay as do the rest of us to a lesser extent.

      History teaches us, if anything, that our historical meddling in European affairs has cost them and us dearly; in particular, it has enabled Marxism to thrive and drive much of the political thrust of the EUSSR.

      I note from the DT that the French are trying to abolish GMT in the same way as they wish to run the Greenwich Meridian through Paris; as I said: the French are a vainglorious bunch.

      If you want a blueprint for a new honest Europe, I suggest you don’t invite the French to the negotiations and probably not the rest of Club Med either.

  27. Damien
    October 4, 2011

    According to the Telegraph Algirda Sementa the european tax commissioner has begun work to present the proposed Financial Transaction Tax (FTT) as VAT instead. As VAT is levied by majority voting this would neutralise the risk from the UK exercising its veto on the FTT.

    The announced £50 credit line raised as many questions as it proposes to answer. The government spokesman on Newsnight says that the banks will process the payments to business who apply and the packaging of smaller groups of loans into bonds. The bondholders will have the guarantee of the BOE and Treasury should the loans go bad. Doesn’t this create some sort of moral hazard where banks get paid commission/bonuses to lend taxpayers money with no loss to themselves should the loans go bad, and ditto for the bondholders? Is this just another example of the government using taxpayers money to pick winners? Surely if there is £50 billion to guarantee investments those investments could be better directed to developing a national energy plan and backing it.

    I’m looking at Brent crude still above $100 a barrel. As we discussed we have had sustained high oil prices and as usual this has mostly been followed by a recession. We need a credible National Energy Plan now.

    1. Denis Cooper
      October 4, 2011

      Obviously I’m not going to repeat my earlier comment, but I will add that I’ve now become very wary of the Telegraph as a source of accurate information about the EU.

      Between them the Telegraph journalist Louise Armitstead and the Tory MEP Kay Swinburne have set this hare running, and on past experience it will now run in anti-EU circles for weeks, or months, or even years.

      Eventually those who repeat it at n’th hand will get tired of being slapped down and ridiculed by the paid and unpaid pro-EU propagandists patrolling the internet, they will stop repeating it, they will become more cautious about what they take at face value in the future, they will start to doubt other criticisms of the EU which actually have some foundation, and finally after enough cyber-humiliation they will quietly withdraw from the fray, the constant propaganda war which is being waged.

      Unless it’s true, in which case Kay Swinburne should now provide Louise Armitstead with chapter and verse to prove that it’s true, which she should be able to do if she actually believes it.

      Meanwhile, either unnoticed or deliberately ignored by the mass media, the radical EU treaty change already agreed on March 25th:

      will edge closer to the Parliamentary approval through an Act which is necessary for its final ratification by the UK, and in my view that really could provide a legal route for the eurozone governments to agree to the imposition of a Financial Transaction Tax just for the eurozone states without the UK government having any say in the matter.

      1. Damien
        October 4, 2011


        Thanks for providing the link to the EU legislation. I had a quick glance through it and my reading of it (see para 6) is that it is a limited amendment and could not be used for the introduction of FTT or any other new EU tax.

        Also I agree that people should make up their own minds about what we read in the newspapers or online which is why I referenced my comments to the Telegraph piece online this morning. My take on the story was that it was the EU Tax Commissioner who was looking at FTT/VAT and that the MEP was only flagging it up for everybody’s attention.

      2. David Price
        October 5, 2011

        Denis, Can you clarify your last paragrapgh – the document talks about a stability mechanism for the member states which have the Euro as their currency. Do you take the term “eurozone” to refer to that set. If so what enables them to unilaterally expand that to cover non-eurozone members, eg the UK?

  28. Steve S
    October 4, 2011

    When it comes to protecting the UK against adverse Euro risks, there is no greater risk than this threat of a financial transactions tax. That this is now being formulated as a VAT measure is a symbol of how much of the UK’s authority in economic matters has been given away, and how bold the Eurocrats have become. A tax being imposed on a country when the democratic will of the people as expressed by its representatives in Parliament is opposed to it, and indeed the imposition of a tax which will undermine our future prospects of economy, should be the lit match to the blue touch paper for an in/out referendum. If it doesn’t, we will be well on the way on the road to ruin, finally put in our perceieved place as an outpost of Euroland.

  29. Denis Cooper
    October 4, 2011

    JR writes:

    “Instead our policy should be motivated by two main concerns.”

    “The first is everything this government does should be to to curb the UK deficit.”

    “The second is to limit the UK’s risk to the likely losses and dangers now emanating from the continent.”

    I’d certainly agree with those two, but I’d add a third very serious long term concern which actually has been indirectly touched on by Cameron, Osborne and even Clegg – to prevent a eurozone “caucus” dominated by France and Germany being able to impose its pre-agreed policies and measures on the remaining non-euro EU member states such as the UK.


    “Mr Osborne admitted that the Government was fighting to keep its vetoes over economic policy to prevent a “caucus” of 17 eurozone countries having a monopoly of power via its inbuilt majority in an EU of 27 nations.”


    “The European Union could break up if the planned closer political and financial integration of eurozone countries leads to Britain being excluded from key decisions on issues such as trade, Nick Clegg, the deputy prime minister, will warn tomorrow.”

    “We cannot accept arrangements that would privilege the eurozone as a decision-making body over the European council.”

    If alarm bells are just beginning to ring on that when the eurozone “caucus” comprises 17 out of 27 EU member states, their din would be deafening when 8 other EU member states had fulfilled their present treaty obligation to join the euro, making it 25 out of 27, and maybe also the Danish politicians had persuaded the Danes to relinquish their treaty “opt-out”, or had found a way to get Denmark into the euro without a referendum, when it would be 26 out of 27.

    And when Croatia and other new EU member states had also joined the euro as required by the terms of their accession to the EU – just finalised, in the case of Croatia, with the approval of Hague – when out of N EU member states it would be (N -1) in the eurozone “caucus” and just the UK remaining as the only EU member state which still hadn’t adopted the euro, N being a number approaching 40.

    There’s no need for a crystal ball to foresee that eventually, sooner or later, we would have a UK government of one party or another which decided that it was “not in our national interests” for the UK to “stay out in the cold”, as it’s put, and which used its Commons majority to bounce us into the euro, irrespective of what it may have said or not said during the general election and if necessary without a referendum.

  30. Rebecca Hanson
    October 4, 2011

    Whilst you meeting in Manchester please could you also discuss

    Is no-one else bothered about this:
    Is this government just going to leave Tony Blair to fail to handle this alone then use the resulting bloodbath to attack the labour party?



    1. Rebecca Hanson
      October 4, 2011

      Just to say I really appreciate this post going live. I won’t in any way attempt to dominate this blog with this topic – just to draw attention to it in this small space here.

      I’ve been discussing it over in a US discussion forum where we’ve struggled to prevent the discussion being censored, but all of a sudden the situation looks a lot more sinister because there seems to be a serious risk that there will be a bloodbath no matter what the outcome of the UN vote and no matter what the peace negotiators do. The settlers on the West Bank are being armed and violence is escalating.

      There is some really good information available from Russia today – on YouTube and on their Website. I’m really worried that this issue is not being covered in the UK press – clearly the US press is systematically misrepresenting it as usual. We need credible research and information and we need it fast.

      (unchecked sites removed – please summarise what you want to say for the rest of us-ed)
      I may be wrong – I hope with all my heart I am – but if I am right then we need to focus the political and media spotlight of the world on this situation.

      Sorry again for butting in here – I didn’t intend to be posting this today but I am so very worried.

      reply: I have not posted on this as I know too little about it, and the Uk will have little influence on the outcome.

      1. Rebecca Hanson
        October 4, 2011

        John I’d really appreciate it if you could look at some of the references here or encourage someone you trust to. It strikes me that the most likely way of avoiding (trouble-ed) and its consequences is to ensure the UK press has a clear focus on this issue.

        The whole English speaking world needs a source they can trust and the Israelis need to see that they are being watched through lenses other than the AIPAC controlled ones.

        If we get the government working together with Tony Blair on ensuring there is close scrutiny we could achieve that – the novelty of that happening would create interest for a start. I think William Hague might be able to pull that off.

        I strongly suspect that ensuring clear international scrutiny is the most positive card we can bring to the table here and that laying UK press coverage alongside the US mass media will expose key issues clearly in a way which could tip US opinion. I’m not sure that’s enough but I think it matters hugely because Israel cares about US opinion.

        The conversation I’m involved in over on TED will be read by many and opinions are changing – all the usual stuff is being thrown at me and for the impartial readers it will clearly not be sticking. (etc-ed)I know the propsects for today’s undergraduates are bad. But they vastly better than those of undergraduates entering university 100 years ago.

        Reply: As I have explained I am no expert on this issue, and am extremely busy with the banking and EU crisis myself. I do not have the time to research and write about this, and do not wish to turn this site into one trying to deal with the extremely complex relationships between Israel and her neighbours.

        1. Rebecca Hanson
          October 5, 2011

          Okay – I appreciate you letting me communicate my fears in this small corner. Good luck with your work.

  31. Bill
    October 4, 2011

    Talking to a German this morning I learn that there is an impact on the German electorate of the continued funding of Greek debt. Their electoral system is throwing up smaller parties who oppose Merkel’s euro bail-outs.

    As ever, our own media is failing to give us the full picture.

  32. British National
    October 4, 2011

    Virgin ( Richard Branson) want to bring in another UK Private Bank soon. What is the government view of allowing him to come in, possibly with Chinese Backing ?

  33. javelin
    October 4, 2011

    Interesting reseach from Morgan Stanley showing % of domestic revenues from within the country for large corporates.

    Greece 85%
    Portugal 65%
    Italy 55%
    Spain 45%
    UK, German, France 40%
    Ireland 5%

    So what this means is that Ireland would have benefited HUGELY from being able to devalue – with a whopping 95% of demand generated abroad. Which are some quite useful numbers. A note of caution that there are not many large corporates in Greece, but it does put a question mark over the idea that cheap holidays will dig Greece out of its hole, and that perhaps fiscal stimulus will work in Greece and might explain why Ireland has not had such a down turn in GDP as Greece given the fiscal tightening.

  34. John
    October 4, 2011

    They still won’t admit it…..

    The Treasury can issue as much money as it wishes, FREE OF INTEREST OR OBLIGATION TO REPAY THE PRINCIPAL.

    They already do, about 7% of the total in circulation… it used to be much more – over 25%

    This business of borrowing money is a LIE – to keep the masses in debt to the elite who control the private banking section

    1. zorro
      October 4, 2011

      To give you an example of how debt free money would have helped the US (but not of course the owners of the Federal Reserve)……

      If the U.S. government had issued debt-free money instead of relying on the Fed since 1913, the U.S. government would likely not be spending one penny on interest payments.

      However, in 2010, the U.S. government spent over 413 billion dollars on interest on the national debt in 2010…..or more correctly the US taxpayer had to stump up this cash for the beneficiaries (wealthy international bankers). By 2019, that figure will be in the region of 900 billion dollars…….case closed.


  35. Public Servant
    October 4, 2011

    Interesting policy announcement today concerning withdrawal of benefits to claimants refusing a job within a 90 minute commute. I have no problem in principle with the idea but my own commute is within 90 min and costs £400 for a monthly ticket. How much would a minimum wage earner be left with after such travel costs?

    1. alan jutson
      October 5, 2011

      Public Servant.

      Its another possile policy that has been dreampt up by someone who has never been out of work in their lives.

      My Daughter who was made redundant a coulpe of years ago, did a succession of temporary jobs before eventually finding another permanent job. She travels for an hour and 15 mins each way which involves walk, train, train, walk, it costs her 20% of her salary, so not much left after mortgage payments and other living expenes, and this is for a salary well above the minimum wage.

      The real disgrace is that those on the minimum wage pay income tax and national insurance. Those on benefits pay nothing, its all tax free.

  36. zorro
    October 4, 2011

    ‘UK policy towards Euroland should not be based on some idea that we have a duty to help bail it out, or that is in our interest to spend our money on trying to shield them from the consequences of their ill gotten scheme.’

    I agree wholeheartedly with these sentiments and the tactical strategies that you propose to limit our liability seems feasible.

    The issue of the deficit is also common ground (even with the government)….

    However, I wish that Mr Cameron could see this as clearly in the national interest. Unfortunately, in government so far, with his support for a dear energy policy and extra support to the IMF to covertly try and bailout the Eurozone, I cannot see how this will be put into practice. It seems clear that Mr Cameron will only countenance supporting the Euro interests seemingly with no real reference to how it might affect the UK’s position. Unless you detect any movement there…..I assume that you are not assisting Mr Cameron with his speech for tomorrow.


  37. Electro-Kevin
    October 4, 2011

    By the way, Mr Redwood. Could you please mention to Mr Cameron that YES, people are discussing the EU in living rooms up and down the land. Whenever the news comes on with some Human Rights issue or a newspaper is read.

    1. Electro-Kevin
      October 4, 2011

      Why wasn’t Mr Clarke fully briefed and ready with an answer when asked about the now famous illegal immigrant and pet cat case ? One would have thought he’d have known all about it even if it is tabloid hyperbole (which I don’t happen to think it is)

      1. Electro-Kevin
        October 4, 2011

        I’ve seen more news reports. It appears that Mr Clarke WAS fully briefed. My apologies to him.

        1. Electro-Kevin
          October 5, 2011

          I should add that the claim for the right to stay was made under the Human Rights Act on the basis that the applicant had a girlfriend AND a cat (as proof that this was a settled relationship)

          This does not make the situation any less ridiculous than the Home Secretary stated on the podium in my view.

          The prisons are full and respect for the law has been entirely diminished through this and many other cases.

  38. zorro
    October 4, 2011

    …and so it starts DEXIA is in serious trouble and Italy has been marked down in its credit rating….The next two weeks will be very rocky for some.


  39. Martin
    October 4, 2011

    The markets are in a very negative mood at present. Anything negative is being amplified. Take the airline business in the USA. As far as I can see no real news was issued about an airline but suddenly its share price tanked.

    So therefore I’d suggest that any negative actions and jestures would actually make things even worse.

    I’m also amazed at finacial folks wanting action. Anyone who has dealt with finacial folks/banks will know how slow they can be over things! How long does it take the banks to clear a £20 cheque?

  40. Lista Email
    October 5, 2011

    Excellent post. Now make it happen.

  41. Martin
    October 5, 2011

    Who are “The UK needs to turn its goods exporters “?

    Nissan, Toyota, Honda, BMW etc !

    Reply: BAe, pharmaceutical companies etc

    1. Electro-Kevin
      October 5, 2011

      We need to sort out what the Big Six are charging BAe, pharmaceuticals etc in energy prices.

Comments are closed.