Why does everyone blame labour for the financial mess?

[beorhthelm]

Hindsight is wonderful though, what's your excuse for not spending 5% less?

that we didnt have it? much of the spending was borrowed money. the cycle was fudged and the self-created golden rules broken to allow more borrowing than should have been, under the illusion of the economic miracle that wasn't.

 

[brunswick]

the financial mess is planned....as they ALL have been throughout history.

the world bank and the IMF grow in power....research the founders of these two!

the election is a front, its not real, the real power lies with the banking dynasties and always has done.

mainstream media is part of the gang.....you are asleep if you are pointing fingers to politicial puppet parties - that is what they want you to do.


queue massive flamers as this is too much for small minds to grasp. stay in the herd, it feels safe.

greece is just a test bed, you wait till spain, ireland, and the UK are next.

 

[withdeanwombat]

I blame Thatcher

Is ,of course,the CORRECT answer.

 

[wellquickwoody]

the financial mess is planned....as they ALL have been throughout history.

the world bank and the IMF grow in power....research the founders of these two!

the election is a front, its not real, the real power lies with the banking dynasties and always has done.

mainstream media is part of the gang.....you are asleep if you are pointing fingers to politicial puppet parties - that is what they want you to do.


queue massive flamers as this is too much for small minds to grasp. stay in the herd, it feels safe.

greece is just a test bed, you wait till spain, ireland, and the UK are next.

And the award for the best Private Fraser impression goes to Brunswick.

We are all doomed!

 

[Guy Fawkes]

One thing that bugs me is when people blame Labour for the financial. Where the banks not responsible for this?

Labour we in charge during a long period of economic growth (it could be argued as a result of Tory policies before their election defeat in 97) yet failed to save incase of recession and more importantly, as we have an aging population so our welfare costs will be higher in the future for pensions etc.

They had a windfall from the sale of 3G licenses, Gordon Brown, when Chancellor, sold our gold reserves at rock bottom prices and yet throughout this Governments time the national debt has grown. They have continually spend more than the treasury income by borrowing without regard for a) how sustainable it is or b) its long term implications - Their only concern is spin and headline grabbing, trying to show themselves in a good light by providing a level of public services the country can't afford long term or how much burdeon it adds to the national debt.

They failed to control the rocketing house prices in this country, they could have introduced fees / taxes etc to push up the cost of buiying, slowing the market or put up stamp duty. Mortgages used to be based on 3.5 times the persons wage, but they failed to act when banks started to go beyond this, they failed to intervene and we have a situation where lent upto 10 times annual wage or even gave 100% mortgages. Seriously overstretching the buyer and meaning its unlikely that they whole amount would be paid back during the lifetime of the borrower. This damages the banks futures and that is why we have seen a lot of the banks in financial difficulties and being bailed out.

The other consequences of this problem are that it makes it almost impossible for lower wage earners to buy, and that any decline in house prices are going to leave a lot of people with negative equity so you could see the Governments policies influenced by this in future (less new house building as extra supply could lower prices even though there is a shortage of affordable housing)

However the Labour Government failed to act to slow the rate of increasing house prices as this was a major part of what was driving this countries economy. As prices increased, people were using the extra equity generated as collateral to borrow against, meaning that people were spending the extra equity without worrying about whether house prices could fall again and putting themselves further into debt.

They failed to intervene in the expanding buy to let market, despite a housing shortage in the country, they did nothing to try to control this market and you now have a high cost of renting meanning that non house owners are struggling financially to make ends meet, yet politicians are still only concerned with appealing to home owners in their policies / speeches. In a lot of cases the person renting is now really just paying someone elses mortgage repayments, there are people out there who have brought all the properties in a single street to rent out again and all this does is push prices up and makes it more expensive to live - For example - cheapest prices i have seen recently for renting - 1 bedroom flat = £550 per month, 2 bedroom flat = £650 per month and yet i hear house owners complaining about how they are struggling to pay their mortgage of £300 per month

They failed to act to try to curb overborrowing by individuals, allowing bad debt to build up in this country because they failed to take an interest in dealing with or even legislate against it when it became obvious there was a problem brewing in this country, especially when companies were offering 0% cards for x months, before someone would move to another card with the same deal, meaning people borrowed more than they could afford thnking these deals would continue forever and they would be able to carry on but the banks were not making any money from them but it was costing the banks money to set up and run each agreement - it was never sustainable.

 

[beorhthelm]

queue massive flamers as this is too much for small minds to grasp.

thats rich. ive challanged and asked for explainations of your conspriacy rantings several times in the past few weeks, and you never reply - because you have no answers to the most basic questions, like what is in it for the IMF, and when did it change from Big Oil to The Banks being behind everything.

 

[Southover Street Seagull]

Well in his own words to the great and good in the City less than 4 years ago.

"To meet the challenge of global markets we created a single unified FSA.

In 2003, just at the time of a previous Mansion House speech, the Worldcom accounting scandal broke. And I will be honest with you, many who advised me including not a few newspapers, favoured a regulatory crackdown.

I believe that we were right not to go down that road which in the United States led to Sarbannes-Oxley, and we were right to build upon our light touch system through the leadership of Sir Callum McCarthy - fair, proportionate, predictable and increasingly risk based. I know Sir Callum is committed to reducing regulatory administrative burdens and the National Audit Office will now look at the efficiency and value for money of our system.

Let me say I see no case for a European single regulator and will continue to reject such a proposal, just as we will resist the new and unnecessary proposals to harmonisation corporate taxation in Europe.

It was to recognise risk, reward effort and encourage innovation that we cut the long term rate of capital gains tax for business assets from 40p to 10p and cut by 3 per cent and 4 per cent the rate of mainstream and small business corporation tax. And I will continue to look not only at the competitiveness of our tax system but I have also asked HMRC to ensure the administration of the tax system - its consistency, openness and responsiveness - is founded on strengthened consultation with you and a better dialogue."

So, GB introduced the FSA and ignored advice to tighten regulation and favoured a light touch regulatory system. He reduced taxes for the financial services sector and was evidently quite happy with their bonus culture.

So what do you think he was not responsible for again?

If you read that quote without knowing who it came from would think it was a Tory making the speech wouldn't you?!

 

[cunning fergus]

The global recession

Never said he was.

He has massively contributed to the shit state we are in though, which only a bigot could deny. For example whilst he was Chancellor he:

Sold approx 60% of our gold reserves at $275 an ounce which was close to a 20-year low. Currently prices are now 300% better at $1200 an ounce...........would be nice to have that in the bank rather than having invested in a drifting euro. This sell off was against the advice of the IMF.

Raped private pension funds with the dividend tax, which has generated well in excess of 100bn in new tax revenue since the tax was introduced. This was against the advice of Treasury officials and the DTI not least because they advised that it would impact most on the lower paid workers.

Gorged on PFI arrangments for providing public facilities and services so that today public bodies are paying a total of £170 billion to contractors in more than 800 PFI schemes up to 2031-2032. Like the costs of Public Pensions these costs are not on the national balance sheet at the moment.

His addiction to spending has meant that despite record tax receipts upto 2008 this country's finances are now ruined. The IFS confirmed in a briefing note that out of all industrialised nations only Iceland and Ireland had borrowed more than the UK in surviving the credit crisis.

Had we had (a) a more robust regulatory system and (b) reduced our debt in the good times we would be MUCH MUCH better off now.

He was responsible FACT.

 

[dougdeep]

He did sell all of the gold...

Most.

 

[drew]

He did sell all of the gold...

Hardly caused a world recession though.

Who's idea was it not to regulate the banks, was it labour who just let them off and do there own thing?

The Tories were for even more deregulation. So it wouldn't have made any difference.

As for the pensions, the tories allowed contribution holidays for companies which cost the funds billions. Had they continued paying, the same way the employees had to continue, they wouldn't have been in so much trouble and there might be a few more final salary schemes around. The downturn in the markets hit pensions far more than the tax on dividends.

 

[webbyson]

Correct me if i am wrong (and i probably am) did the Labour goverment pay off the final payment of a massive loan to the IMF when GB was chancellor and was it not the Tories who borrowed the money in the first place?

 

[beorhthelm]

...was it not the Tories who borrowed the money in the first place?

i think it was Labour in 1976 that went to the IMF.

 

[DerbyGull]

Gordon Brown was in charge when it happened, therefore he has ultimate responsibility. Rather like your boss is responsibe for the mistakes you make at work etc

How about Blair knew the bubble was about to burst and left smiling at just the right time. Gordy is left to pick up the pieces and take all the blame which is ultimately Tony's doing. Poor Bloke people need to get off his case. Nearly every western country has gone through the same. Which party is in charge is irrelevant. Incidentally 2 of the banks that the tories wanted to go to the wall, rbs and lloyds, are almost in profit. LLoyds which was £25billion minus last year, a few months ago said the deficit was £5billion and by the end of the year will be in profit. So i have every conficence in Labour over Conservative.

 

[Bry Nylon]

Brown loves to bang on about the global recesssion, but his biographer Anthony Seldon makes some salient points:

After 2001 Brown boasted that the business cycle had been tamed and declared an end to "boom and bust." Spending on Public Services rose by 54% - the biggest increase in any OECD country - but failed to deliver any commensurate improvements or value for money and left Britain dangerously exposed when the recession came. Labour bequeathes a budget deficit of 12% of GDP, far higher than the equivilant figure in the recession of the 1990s or the 1970s.

The suspicion remains that Brown pressed the accelerator primarily as way of gaining popularity in his quest to oust Blair, and then to win over the electorate.

 

[beorhthelm]

Poor Bloke people need to get off his case.

really? ah, never mind, kiss it better and have another go?

his policies, his regulation, his "end to boom and bust", his economic rules he then broke. His failure.

one might even say there wouldnt have been a recession had he acted to core Labour principles, really he is a traitor to the whole Labour movement but still people on the left defend him.

 

[webbyson]

i think it was Labour in 1976 that went to the IMF.

Yes you could be correct.........but the next Tory regime did not repay the debt.......The labour administration did........Mmmm history to repeat itself?

 

[glasfryn]

It will make a change when and if the tories do get to run the country with all this debt as its normally the other way round.

 

[DerbyGull]

really? ah, never mind, kiss it better and have another go?

his policies, his regulation, his "end to boom and bust", his economic rules he then broke. His failure.

one might even say there wouldnt have been a recession had he acted to core Labour principles, really he is a traitor to the whole Labour movement but still people on the left defend him.

.

 

[Southover Street Seagull]

Hardly caused a world recession though.



The Tories were for even more deregulation. So it wouldn't have made any difference.

As for the pensions, the tories allowed contribution holidays for companies which cost the funds billions. Had they continued paying, the same way the employees had to continue, they wouldn't have been in so much trouble and there might be a few more final salary schemes around. The downturn in the markets hit pensions far more than the tax on dividends.

The company I work for (Royal Mail) took a pension holiday from 1990 to 2003, and this money was used to buy government bonds. Information I have seen this money would be now worth around £1.3 billion, and with our pension fund looking to be £10 billion in deficit when it is announced, it would be nice for the government to give this money back to the pension fund.
I'm not holding my breath though!

 

[KZNSeagull]

How about Blair knew the bubble was about to burst and left smiling at just the right time. Gordy is left to pick up the pieces and take all the blame which is ultimately Tony's doing. Poor Bloke people need to get off his case. Nearly every western country has gone through the same. Which party is in charge is irrelevant. Incidentally 2 of the banks that the tories wanted to go to the wall, rbs and lloyds, are almost in profit. LLoyds which was £25billion minus last year, a few months ago said the deficit was £5billion and by the end of the year will be in profit. So i have every conficence in Labour over Conservative.

I dont think that it was any coincidence that Blair left when he did. But was 'Gordy' not Chancellor then under TB? Was it not his job to point out the possible consequences of Labours spending and borrowing plans?

Which party is in charge is very relevant - it is their policies that make things better or worse. What the opposition say in any given situation is not relevant as they know that what they say will not be implemented. They are there to question the governments actions based upon what they have been told - whether they would have done what they say if they were the ones in government is another thing entirely.

But my original statement and what other people have echoed is that GB was in the hotseat when things went tits up. He has to take responsibility as that is part of his job. If he is not prepared to take that responsibility, he should not have been in that job.