Are savers the first to feel the impact?
December 5th, 2008
Will Gord get the blame as incomes are slashed?
What a difference a day makes? Yesterday morning’s main article featured the front pages from mostly the right wing press which were full of plaudits for Brown’s mortgage rescue plan. Today there’s a new side of the economy featured that threatens to undermine the living standards of millions and millions of voters. For it has taken another drastic cut in interest rates for the media finally to pick up something that I’ve been raising here for months - the position of savers in the recession.
For with interest rates plummeting to almost zero the millions and millions who have built up nest eggs for their retirement are going to find that it produces next to nothing in income. On top of that are the millions of people who are coming to the end of their working lives who’ll discover that their retirement pension pots, which sounded so large, will produce only a pittance in annuity terms.
This will have many consequences. Many in their early 60s who had been looking forward to retirement might have to postpone it and remain within the labour market thus reducing the opportunities for others down the line. We are going to see more pensioner poverty and more demands on the state as people are not able to fend for themselves in the same way.
People still in work who have elderly parents alive might find more demands being made on them.
The political question is who will get the blame and when will this start to happen? It’s hard to see the government escaping unscathed because these age groups have much more political clout than others for the very simple reason that they are much more likely to vote.
What I find amazing is that you hear so little from politicians of all parties about the potential plight of these critical voting groups. The political impact is only just starting as savers receive the notifications from their banks and building societies that rates and their incomes are being slashed.
The government’s two great innovations for pensioners, free bus travel nationwide and the winter fuel allowance look derisory when set against a collapse in your monthly income. I think that this will hurt Labour very badly though it might take a few months for this to be picked up by the polls.
Mike Smithson
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Might be first. Thankyou insomnia!
If Cameron doesn’t run with this, he’s mad. The Tories have been talking about Brown messing up pensions for years, they will no doubt see this as a two pronged attack on retirement.
I locked in most of my savings at 6-8% gross over the last 5m months (including the magnificent Halifax 12%). Unfortunately the lockins all expire after about a year. I imagine many others will have done the same.
Gordon’s will, I think, achieve the full blame from the retired&voting classes around 2009q3 when 6% becomes 0.1% (AER).
Serves him right.
Surely the tories already have this demographic in the bag.
Anyone who has taken responsibility for their future provision is a tough nut for Labour to crack, especially after Gordon’s private pension raid.
In response to 472 from previous thread- There have already been serious doubts publically expressed by Liberal MP’s, including Frank Valeriote, Jim Karygiannis, Scott Simms, and Keith Martin. Dion himself has left the door open to prop up the Conservatives. The Tories are also apparently polling at their highest in 20 years, sitting at 46% in a new Ipsos-Reid poll:
http://www.leaderpost.com/Political+power+struggle+scaring+Canadians+Poll/1032813/story.html
All of this points to a major miscalculation by Harper’s opponents and it seems highly unlikely that they’ll be able to sustain momentum and pull this off at a time when Canadians will be expecting them to be talking about economic issues rather than political intrigue between now and the time parliament reconvenes in six weeks or so.
I don´think the Tories “have this demographic in the bag” at all. Shallow thinking there, Diogenes.
I could be tempted to think that Labour are on the point of losing this demographic. But if this group of people starts looking for an alternative, they might easily turn to the Liberal Democrats, the SNP, Plaid etc etc and not necesarily to the Conservatives.
After all, the Conservatives are not traditionally identified with looking after those in need, are they?
6. A bit harsh to call that “thinking” “shallow” when the Tories do in fact scoop up more of the older vote than Labour - It’s the same in many countries with the more conservative party and older people going together.
I think he’s right in that they already have a fair amount of the vote and if they improved much would hit a ceiling soon beyond which they aren’t going to improve much more.
5. Thankyou for the names - if true, that’s four out of the 70-plus-strong Liberal caucus. Looks like the sceptics have got some work to do.
The statement by Dion about propping up the Tories isn’t especially meaningful - if you look at it in the context in which it was said, it was essentially a restatement of the position he’s been setting out for several days. He remains fully committed to the coalition, as apparently does every single one of the Liberal leadership contenders. Who knows, that might change if the pressure builds over the coming weeks - but, unlike you, I seem to have misplaced my crystal ball.
By the way, call me cynical, but does that crystal ball of yours ever prophesy anything other than humiliation, doom and despair for the left? I know you manfully accepted Obama was winning, but even that is apparently a mere staging-post towards the great Republican resurgence of 2010/2012.
Just pick one country. Say it’s looking good for the left in, say, Sweden - without any of the usual caveats. Go on, I dare you.
ТС: ++
8- Feeble challenge from one who reliably sings the praises of the fortunes of the left around the globe time after time. I very accurately predicted not only Obama’s triumph to within one point of the actual result (and did so months before the election) but also got within one seat of the final tally in the Senate (perhaps exactly right if Coleman ends up winning) and was within a few seats of the correct result in the House. Boy, how can I go on predicting so many conservative victories?
You’re the one who’s soiling his pants at the prospect of conservatives winning something somewhere. If I turn out to be wrong about what’s happening in Canada, so be it. But don’t crap your trousers just because I unfortunately can’t join you in predicting doom and gloom for conservatives in every instance in every country on the planet.
Oh, and I also predicted Chambliss would win the Georgia Senate runoff. There’s my confounded crystal ball at it again!
You’re still getting 2%… Over here we _dream_ about getting 2%… That said…
Mike: “What I find amazing is that you hear so little from politicians of all parties about the potential plight of these critical voting groups”
Very true. Interest rates are one of those things where the media coverage has historically been wierdly one-sided, in favour of borrowers rather than savers. Looking at the online editions of the UK papers, it looks like the Mail’s the main one that’s really bucking that trend this time - although they mention the effect on savers, the others are mainly complaining about the banks not passing the cut on. Although it changed a bit in the last few years, there always seemed to be a similar bias with house prices: Up was good, down was bad, unlike the prices of everything else - and even though for every happy seller, there must have been an equal-and-opposite miserable buyer.
Can anyone think of a good reason for this, or is it just a matter of journalists and opinion formers tending move in circles where most people own their own houses but still have mortgages to pay off?
Pensioners have been very quietly shafted another way.
Until a few years ago, tax paying pensioners received the standard personal allowance plus an “age allowance” for those over 65.
In 2005/2006, for example, it was £4895 + £2195 = £7090
This was then amalgamated into a single figure and announced as the “personal allowance for people aged 65-74″
Now, any changes in the basic “personal allowance” will NOT be applied to pensioners unless this “personal allowance for people aged 65-74″ is specifically amended at the same time.
This is why the infamous promise from Brown in the HoC “that every person in the country who is an income tax payer at the basic rate will receive £120″ did NOT apply to old age pensioners.
In the current tax year (2008/2009), the “personal allowance” was originally set at £5435 and “personal allowance for people aged 65-74″ £9030 - an “age allowance” of £3595.
In the next tax year (2009/2010), the “personal allowance” will be £6475 and “personal allowance for people aged 65-74″ £9490 - an “age allowance” of £3015.
So pensioners with even small occupational pensions will be paying 20% tax on an extra £580 - £116.
That’s where the spurious “bonus” of £50, announced in the PBR, is coming from.
Stealth tax? You bet!
Great spot by stjohn yesterday of Ladbrokes’ 33-1 against May 2009 GE, which they’ve now reined in somewhat to 16-1!
9. “Feeble challenge from one who reliably sings the praises of the fortunes of the left around the globe time after time.”
I beg pardon? I’m openly left-of-centre but above all else I’m a Scottish nationalist, so my partisan posts here have tended to be pro-SNP and anti-Labour (so in your terms I’m anti-socialist but pro-commie). I’ve had the odd go at the Tories but nowhere near as often as Labour. Apart from a brief reference to Germany and Ireland yesterday, I think the only other countries I’ve mentioned here have been the US and Canada, and if you look back to what I said on the previous thread I think I was fairly even-handed about the Canadian situation (well, at least until you turned up with your Nostradamus-like certainties). Like others, I’ve mainly been interested in the crisis because the Canadian constitution is essentially the same as our own, and it’s fascinating to see how all the creative ambiguities play out in practice, not just in theory.
“I very accurately predicted not only Obama’s triumph to within one point of the actual result (and did so months before the election) but also got within one seat of the final tally in the Senate”
You seem to have missed this, but if you re-read my post above you’ll notice I fully conceded that you predicted Obama’s triumph. My point was that you always made those predictions in the context that any win for the left would inevitably lead to ultimate disaster later on. Sometimes that got extremely convoluted - ie. you predicted that the Democrats would win 58 or 59 Senate seats, but then immediately triumphantly declared that this was in fact appalling news for them, because Americans loathe one-party rule, and would inevitably overturn it at the earliest opportunity!
“You’re the one who’s soiling his pants…don’t crap your trousers”
I suppose this is a culture clash again, but I personally find that language quite distasteful. And I say that as someone who’s been on the sharp end of SeanT’s tongue a number of times.
Canada
The coalition will fall apart before Harper’s government does 2/1
The vote of no-confidence will be held, but fail 10/1
The vote of no-confidence will pass, but there will be a general election and the Tories will win an overall majority 10/1
The coalition will get into government but it will be all over by Christmas 5/1
The coalition will get into government but collapse before 2010 5/1
The coalition will survive to 2010 but lose the next election 5/1
The colaition will call an immediate general election, and win a huge landslide majority with crowds of enthusiastic voters singing and dancing in the streets all night long 100/1
12. Those odds are still too long, aren’t they? If there’s an election next year, there are only really three likely months - May, June or October.
14. “The coalition will get into government but it will be all over by Christmas 5/1″
You’d be wasting your money on that one. It’s now not possible for the coalition to get into power until after Christmas!
10. “Interest rates are one of those things where the media coverage has historically been wierdly one-sided, in favour of borrowers rather than savers”
And do you suppose the average journalist is a borrower or a saver?! Nothing like impartial reporting!
Seriously though, I tend to agree with Diogenes at [4]. The reason is that it’s not the 60+ agre-group that’s key here but the 60+ or perhaps 55+ with substantial savings. There’s a good hard-core Labour vote in the older age-groups (probably much better in terms of depth than the younger groups) but I’d be surprised if they’re affected all that much directly by falling / very low interest rates. They will, however, be affected by cuts to those goodies introduced over the last few years, if the budget deficit becomes unsustainable.
For all those prudent councils with money in the bank, lower interest rates will mean substantially higher council tax
11. Very good point. I hadn’t realised that. The Tories should point it out Sharpish.
13- Get over yourself. I find your Victorian sense of propriety less than compelling given that this kerfluffle all began with your personal decision to have a go at me as a partisan hack with little credibility.
You tried to minimize my track record here of predicting victories for the left by conceding only that I predicted an Obama victory (and thereby suggesting that I otherwise only predict conservative triumphs); I then called you on it by pointing out I also predicted big Democratic victories in the House and Senate. Since I’ve been posting at PB, I’ve predicted almost nothing but victories for the left. So what does it take to have credibility as far as you’re concerned? Should I predict the left will win everything everywhere in perpetuity?
My track record of making predictions here is pretty good. I’ve established that track record overwhelmingly by making predictions against my own partisan interests. If that’s not enough to make you happy, tough crap (oops, sorry for being so hurtful again!).
The GOP will do much better from here on than they have done in the past two election cycles. The Canadian Tories also look to be on the upswing. If all that sends you into howling fits of rage, that’s your problem.
15 In terms of “likely” months, yes, you’re right. But as “possible” months I think you would need to include February (33-1) and March (25-1) in the event of an early “Back Me or Sack Me” snap GE and Sept (20-1) in terms of its sheer value.
May is seen as being less likely in view of the Euro polls in June, but something has to give as the locals are scheduled for May and can only be moved by legislation.
wow - can’t link from phone, but devestating article for the Speaker in the Daily Mail. Includes Clegg saying he will not cooperate with the Speakers gerrymandered enquiry, and will not let LibDem MPs sit on it.
Clegg is turning into a bit of a hero over this.
8- By the way, it’s also comical to see your derision of the idea of having a “crystal ball.” This site is called Political Betting and political betting, after all, entirely depends on having one’s own crystal ball with which to predict what will happen in politics before it actually does happen and becomes moot from a betting perspective. If you have nothing but contempt for the concept of having a “crystal ball,” I would suggest you’ve entirely missed what this site is about.
20. Partisan hack? Well, to be fair you spread the hate around widely. The American Democrats can do little right, the Canadian Liberals can do little right, the British Labour Party can do little right…I do detect a recurring theme, though.
I don’t particularly have a Victorian sense of propriety - I’ve listened to SeanT call me and others “twats”, “retards”, etc, etc, and it barely even registers half the time. It’s maybe a personal thing, but I honestly had a strong instinctive reaction against your scatological choice of imagery, and I’m quite happy to stand by that.
When I saw that headline, “Mother of all liars”, I honestly expected to see Brown’s picture alongside.
Stupid me.
23. Come off it. There’s a difference between on the one hand assessing that there’s a 70% chance of something happening, and then tracking down a value bet on the basis of that, and on the other hand saying that you already know with virtual certainty the outcome of the Canadian crisis. This is a situation that’s almost unique in history, that still has several weeks to run, nobody knows whether the telling decision will be made by the voters, the Governor-General, the Liberal leader, the Tory caucus, the Liberal caucus, the NDP caucus, etc, etc. There are just SO many variables that no-one in their right mind would predict the outcome at this stage, and yet you came on the previous thread and declared -
“Based on news reports today from several sources, it looks like the proposed coalition deal is already falling apart by virtue of the unwillingness of several Liberal MP’s to go along. The prorogation tactic seems to have served nicely to give MP’s a chance to twist in the wind as they face constituents wondering how they can govern side by side with the separatists. It doesn’t look like they feel it is worth all this merely to sideline Harper.”
If there was the slightest point to it on a British blog, that would look for all the world like a ‘partisan hack’ trying to establish an artificial narrative.
On topic - yes, very fair. And just look at the rate of turnout in electionsamong the older who may depend on savings. Remember the older you get the more likely you are to vote (and vote Tory).
Labour would need to find a few rabbits to pull out of hats.
The other complication it that there will be a wider disparity between the different forms of inflation next year - won’t RPI go negative?
24- I’ll leave the noble scatalogical realm to you and will say no more of it. I will concede you’re entirely correct, though, in stating that the American Democrats, Canadian Liberals and British Labour can do little right.
You are making a classical error, however, which is often made here and elsewhere, in failing to distinguish between partisanship (in which I freely admit I’m of the American right and a Republican) and predictive matters, in which I have a strong tendency to accurately pick the winner regardless of whether said winner is the one I would have preferred. In lumping my predictions in with my Republicanism, you’re adopting a position that you can’t defend based on my track record here at PB.
Jesus Brown did it to pension funds with the change in advance corporation tax rules. And He’ll do it again when interest rates on savings go Japanese. One could think of it as a double rape of the elderly [and others]. To be fair to Him, the cheapo credit economic policies of most of the world’s “leaders” over the past generation have all tended to lead in this direction. Gordon Brown. A regular guy and a regular moron.
27. For the third time, the point I’m making is that on every occasion you’ve predicted a victory for the left, you’ve added to it the rider that the victory in question would ultimately lead to some sort of catastrophe for the left. So, since you asked what you need to do to establish credibility in my eyes, I’d simply say, keep making the correct predictions - but minus the absurd riders.
By the way, I’m off now, so I won’t be able to respond for several hours (to general relief, I’m sure!).
25- I’m glad you concede there would be no point in trying to establish an artificial narrative here on PB on a matter of Canadian politics, so that possibility can be effectively excluded. That leaves only your unhappiness about my conclusion. I will be happy to revisit this matter with you when events have played out and I have been shown to be either correct or incorrect. Until then, we have only a difference of opinion. Why it is that you worked yourself up into such a lather over the matter as to come after my entire credibility (which I’ve built here over quite a long time for all to see) and accuse me of “hate” is something I’m sure known only to you. Cheers and best wishes.
Of course lower interest rates could be bad for both savers and borrowers. The savers part is obvious - lower interest rates mean less money being earned as interest on savings.
The borrowers part depends on the type of loan / overdraft they have. Speaking only on my personal experiance but my bank (natwest) overdraft is set at base rate plus a percentage. However there is also a bit of small print that says that the minimum it can go to is 4% (or something similar)
It might be a good idea for the government to not only put pressure on banks to pass on interest rate cuts, but also put pressure on them to remove small print like I’ve just mentioned above.
Yep, I’m glad I’m not trying to buy an annuity right now…
Part of the reason may be that although lenders have to write to you to tell you that your direct debit is being changed, none of them write to their savers telling them that the return on their investment is falling.
Quentin Letts at his very best:
He filleted Ms Smith and threw her tail to the cat
http://www.dailymail.co.uk/news/article-1092099/QUENTIN-LETTS-He-filleted-Ms-Smith-threw-tail-cat.html
I don’t think anyone will find a difference on interest rate policy between the three parties will they?
“Instead, he said “radical monetary action” was required.
Telling the Bank of England to cut rates futher, Mr Osborne also proposed that the Government should directly intervene in the banking system to make banks lend more freely.
“What I would do is radical monetary action. There is further to go on interest rates,” Mr Osborne told BBC Radio Four’s Today Programme. ”
from 25th November 2008
By the way, savings rates of 4% are available and inflation will be half that in five or sixth months time.
Get ready for “quantitive easing” next folks !
“All the policy instruments that are available, fiscal stimulus, cuts in rates that have been tried and don’t work,” Vince Cable, the Liberal Democrat lawmaker who speaks on finance matters, said in a Dec. 2 speech in London. What will follow “is called quantitative easing, which in the language of the man in the street is printing money. That’s being discussed in the U.S. and will be tried here,” he said.
The Bank of England have now cut interest rates from 5% to 2% in exactly one year.
A Home Counties chav with a £500,000 tracker mortgage is now £15,000 a year better off.
A pensioner couple with modest life savings of £25,000 will be £750 a year worse off.
Robbing the poor to buy the rich. The Sheriff of Nottingham is alive and well.
Mike - whilst I agree on the impact on savers, as an IFA I can report annuity rates actually have improved during the last year of the credit crunch and have reversed some of their long term decline in returns offered.
Sustained low interest rates would no doubt threaten this but currently people buying annuities are getting some of the best rates we’ve seen for quite some years.
Incidentally, anyone buying an annuity please do make sure you shop around and use the ‘open market option’ to see who offers you the best rate and don’t just go with the insurance company your pension is with - far too many people go this least hassle route and therefore miss out on potentially thousands of pounds of income in their retirement years… that is another pension scandal but I’ll leave that for another time…
Just adding to that last post, those who are nearing retirement and who haven’t been reducing their equity holdings in their pension pots and haven’t been moving to cash / fixed interest as they approached retirement could indeed be facing a pittance of a pension - that however isn’t the annuity rates doing that, it’s the slumping stockmarkets…
How did we get into this mess? Oh, I remember now, it was lending too much money to too many people far too cheaply. We won’t do that again, will we?
Great post Mike, but it’s not just pensioners or those approaching that age (imagine Dennis Skinner heckling you to declare an interest at this point) I’m in the position of trying to save up for a property in the next few years, house prices coming down obv. helps, but my savings are all of a sudden not doing much, and also having to buy expensive Euros to see my other half in Germany. Not much support for Brown’s policies here, and I doubt I’m the only one in this position.
re 38. I don’t think the term CHAV can apply to someone with a £500,000 tracker mortgage.
38 Its worse than that the BoE has cut rates from 4.5% to 2% in less than 5 weeks, an indictment on the utter failure of the MPC and BoE and a huge hit in very little time on savers.
It would help if the Government understood the impact - Gordon Brown yesterday talked of low interest rates being matched by low inflation so savers wouldn’t lose out, not recognising the difference between those putting money aside and those depending on savings for income. For the latter it means income has more than halved unless they were able to delay this by fixed income investments.
@43:
You’d be surprised.
Tories also explicitly want lower interest rates though…
@44:
In what way does this represent a failure of the MPC?
The Bank is clearly concerned about the serious possibility of a deflationary spiral starting in the UK. Viewed in those terms, aggressively discounting the overnight repo rate is but one of the things they should be doing.
If that doesn’t work, trying to ease the money supply by direct intervention in the open market becomes necessary.
11. Very good point. Think we’ll bang out a press release with that.
To respond to the question why the media don’t normally focus on savers rather than borrowers and there isn’t much public pressure on the subject (constituents have almost never mentioned it to me): there’s two reasons. One is that it’s the real interest rate that counts, and if you get 2% interest with 1% inflation you are not worse off than if you get 5% interest with 5% inflation (especially if you pay tax on the interest). People with savings income have a very definite interest in a low-inflation economy - in fact even deflation would be OK as far as direct effects go.
The other factor is that although there are many more savers than borrowers, it’s probably true to say that the majority of savings provide a modest top-up income rather than being the main source, while the majority of borrowers have a big mortgage relative to income. If you’ve got a £100,000 mortgage left to pay off (I’d guess this is typical), a drop of a quarter in your interest payments is great news, whereas if you’ve got £20,000 in savings (probably more than most), the same drop is not as significant. There are of course exceptions for whom it’s crucial, but not huge numbers.
38 Yes, the developments over the last two days seem to boil down to people in arrears with £400,000 mortgages being bailed out by poverty-stricken pensioners.
44 The failure was in holding interest rates too low for too long, then raising them quickly and holding them at high rates for too long, based on forecasts and assumptions that seem to have underplayed riks and been plain wrong.
With 0% GDP growth in first quarter, a fall in second quarter why did it take them until beginning of third quarter to address the recession?
44: the idea that savings income has halved even if inflation drops is simply mistaken - I had this debate with a poster the other week. I agree it can feel like that, but even leaving taxes aside, with 5% interest and 5% inflation, if you’re spending the 5% you are actually raiding your savings to the tune of 5%. With 2% interest and 1% inflation, if you take 5% anyway you’ll be raiding your saving by 4%.
That does, of course, require that inflation actually does head down rapidly, but there seems general agreement that this is happening in the very near future, to the point that economists have started to worry about it (because of the difficulties in paying negative interest if inlfation goes below 0).
39 - I’m glad someone has pointed out that annuity rates are doing pretty well at the moment in spite of all this. Personally, I doubt that this recession is going to be too hard on savers for the simple reason that the huge and growing amount of government bonds out there are going to need someone to subscribe to them. They won’t achieve that if they only offer 0.25% or whatever…
51 - the 0% growth was in Q2, with 0.5% decline in Q3. I think Q1 was +0.3%, BICBW.
49 Nick P - there is a difference between protecting the value of capital and the value of savings incomes. 5% on £20,000 produces £1,000 income, 2% on £20,000 produces £400 - a drop of 60%. Has the cost of living dropped 60%?
@51:
Had interests been held higher, sooner, we may already have been facing a crippling deflationary scenario. I suspect that the MPC would decide, on balance, that it has made the right decision.
56 Martin, I think we are agreeing to a point. Its not MPC are wrong to have cut rates but their failure was to keep rates too high too long. They should have been cut some time back not waiting till a month ago.
54 I was thinking in financial years not calendar ones.
@57:
Oh, I see what you mean. Yes, I would probably agree that the bank were tardy in their response to the crisis. I suspect they were concerned about outside political pressure if they cut too much, too fast.
Out of interest, does anyone have any idea what proportion of people depend directly on interest payment income? Thinking about why the media take less notice of the downside of low interest rates than the upside, I wonder whether borrowers tend to pay the interest directly to the bank, whereas savers mostly tend to get their interest indirectly via pension funds and things, which can ride out a few lean years without immediately affecting the saver. In which case low interest rates might be a big net political winner - as long as they don’t last so long that everybody’s pension funds start going bust. Anyone know if I’m on the right track?
49 Utilitarian nonsense, Nick.
Proportionality should come into play here as Ted has stated
Big impact on some of the least able to cope with it. It won’t hurt you to admit it - Labour might actually earn a little respect if they stop wittering on about ‘doing everything we can’ and start admitting they have muffed it up and addressing the tax burden rather then obfuscating the figures to produce rotting Coney corpses from flat caps.
As ever the people who overstretch themselves are being assisted. Those of us actually try to live within a budget, keep our debts to a minimum and put some money away for the future are punished.
How is this mentality going to convince people to be more frugal in the future? We’ll just see the same irresponsibility all over again.
A very astute point!
It is curious that the general approach to the economy always seems to assume:
1) higher house prices are always better (despite it being bad for first time buyers and for creating a bubble destined to burst)
2) low interest rates are good (despite shafting savers)
3) more public spending = better (even though that’s why we’re overtaxed and hugely indebted)
It’s like those muppet weather forecasters who get excited by hot weather. I hate hot weather, it’s impossible to sleep at night and stifling during the day.
OT: Formula One.
Honda may well be out. Pretty surprised, reports reckoned their next car was a decent job. Plus they’ve got experienced, good drivers and Ross Brawn, the man who worked alongside Schumacher during the glory days.
I hope they don’t go to the wall. But if they do, there’s top level talent to be snapped up (and Toros Rosso has yet to confirm any drivers, I think). However, it would lose us hundreds, maybe a thousand, jobs.
No chavs with £500k mortgages in the Home Counties.
Last time I as on an executive housing estate in Surrey the chav flag was everywhere.
http://media.urbandictionary.com/image/large/burberry-7578.jpg
49 - Nick P
I have to say you and your party’s arrogance becomes tiring after a while. I’m 25 and the cut in interest rates has cost me quite a bit of money. Your government has just spent zillions on ‘topping up our income’ with spun tax reductions that don’t really exist, now you claim the money savers make in ‘topping up our income’ is not really important? A bit of a contradiction.
A well connected friend of the family tells me Labour plan to call a spring election to perform a bit of damage limitation…..please, please call that election!
Shocking……’get em out!’
O/T. On the SPOTY. There has been a big move towards Adlington over the last 24 hours or so. Both Hamiton and Hoy on the drift despite my confident assertion that Hoy would shorten! Hamilton now odds against with Betfair.
Anyone know why this has happened?
So the obvious answer is at the next GE for the Tories to campaign, promising to dramatically increase interest rates, may I suggest 15%!
With Brent Crude down to $43.00 dollars per barrel, (not the $200.00 forecast) even the con-artists who now run our energy utilities cannot avoid dropping energy prices substantially. A sharp drop in energy costs and petrol prices, will have some effect on how people feel: even grumpy old men and women.
67
Poor liquidity and impatience from the layers.
The hype of Hamilton’s title victory has calmed and people are beginning to remember our champion swimmer.
Seeing as there has been no voting yet there is no secret info one could use.
66 - Red Jester.
You do realise that Osborne advocated the same cuts?
70 - Tim
When did he do that?
Rumour has it Osborne won’t be staying in his job for an overly long time.
I am associated with various charities / clubs / good causes etc where we have modest reserves in the bank. These have been getting around 2½ to 3% interest, not good but a combination of inertia and convenience has meant that we have just kept the savings there.
Even before we yesterday’s cut, the interest had fallen to ½%. Now actively searching out alternative homes for our reserves. And we are finding some with attractive offers.
Result, high street banks are losing deposits with a resultant reduction in lending capability. I am now turning attention to other long term savings.
60 I’d estimate it would be a very small but growing proportion of the population as the baby boomers reach retirement and beyond.
70 - Tim
Found it, Osborne’s response to the PBR.
34.”
Dominic Grieve
Donnish: Shadow Home Secretary Dominic Grieve responds to a statement by Home Secretary Jacqui Smith
Less than 24 hours after the Speaker announced a committee of elders to investigate the coppers barging into Parliament, the Government has bent the thing out of shape. The elders will no longer be chosen simply by the Speaker.
The committee will have to have a Labour majority. Nice one, lads! And before it has even been set up, the committee has been adjourned. The events under investigation are sub judice, see?”
PfP, why am I not surprised, this has Brown’s sticky mitts all over it!
Starkey was the guest on This Week last night, and if anyone missed it, I recommend they watch on the net. When I look at what is going on right now, words fail me, this Labour government are a disgrace.
If know anything about Gordon Brown the politician, then you should be unsurprised at the way Parliament, and now the Opposition are being treated.
Of course, this is why there won’t be an early GE!
http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/12/05/do0505.xml
GB will hang on to the last, for the obvious reason.
Anyone got that Mail link re. Clegg boycott of Speaker’s enquiry, please? Can’t find it.
77. It’s in this article
http://www.dailymail.co.uk/news/article-1091612/Go-Mr-Speaker-Calls-quit-grow-Yard-contradictshis-statement-Commons.html
We all know who this government favours:
- the profligate
- the improvident
- the super-rich
and who this government hates:
- the thrifty
- the hard-working
- the middle classes.
As the government has spent money like a drunken sailor itself, why should anybody in their right mind expect it to reward thrift in others? And as government is by far the country’s biggest borrower, why should it want to pay higher interest rates? I’m no fan, but their behaviour is logical and consistent.
Everyone is making mistakes -
NickP is wrong to assert 2% is OK when inflation is 1%. Not because he’s wrong on this point, BUT BECAUSE INFLATION is 4%. Stop BSing NickP.
BUT, NickP is right about 1% real is better than 0% real. Why? You can’t just look at the “income”, you need to compare the real purchasing power of your money. Assume that you had £20,000 and you need to spend £1,000 a year. Assume interest rates are 5% and inflation is 5%, then your savings hit 0 in year 23. Interest rates at 2% and inflation at 1% means your savings hit zero in year 24. Incidentally if you have inflation of 4% in year 1 and 2% thereafter, the situation we are in at the moment, your run out of money in year 22.
57. Ted - I agree the Bank was behind the curve earlier this year. It’s hard to believe some MPC members were actually calling for higher rates in June and July - this is a terrible indictment of their appointment.
But even if they had started to ease policy earlier, I think it’s extremely likely that the end point for rates would have been the same, i.e. very low.
On the politics - it seems to me voters living off substantial savings interest are largely Tories. Swing voters will tend to benefit from this. I doubt there is much capital to be gained for the Tories from bemoaning the fate of savers - they should instead be focusing on why rates have fallen so far, i.e. the dire situation in the real economy and the massive fiscal clear up cost this will result in (which means sharply higher taxes for the same swing voters).
67 SPoTY (stjohn) — The influential tipping service Isiris tipped Adlington yesterday (iirc from a Betfair forum thread yesterday).
71 - The point about interest rate cuts is not that they aren’t necessary, but that the Govt should stop trying to trumpet them as something to take credit for. They are plunging out of necessity not because of fantastic economic management.
67 Understandable contrarian betting against STJOHN perhaps? Hoy to finish in top three looks a shoo-in though at 0.35-1 on Betfair.
On topic, there was a good article in the Time today about this point:
But here’s the thing: I’ve spent ten years saving for a deposit on a flat. Every year I’ve earned more than the year before. But every year the flat spun further out of my reach, as Labour presided over one of the most destructive asset bubbles in history. Being more prudent than it now transpires anyone in the Government has ever been, I didn’t falsify my earnings to get a mortgage that I couldn’t service on an overpriced, peanut-sized property I couldn’t afford. I just kept paying the rent, hoping that the inevitable crash would hurry up.
And now I’m supposed to watch my taxes being used to bail out people who were stupid or greedy enough to assume that the “WARNING: Your home is at risk of repossession if you do not keep up repayments on it” didn’t apply to them. Turns out that they were absolutely right. Which is unfortunate, because for hundreds of thousands of people in their twenties and early thirties who want to stop haemorrhaging thousands of pounds a year in rent, buying a repossessed property at auction was pretty much our only hope. But at least we’ll be able to guarantee someone else’s second m0rtgage.
Every time Gordon Brown declares how important it is for hard-working families to keep their homes, I slightly want to scream. It must be awful to be kicked out of your repossessed home. It’s also awful being booted out of a rented flat with four weeks’ notice.
http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article5288722.ece
@76:
I still wonder if there’s any clue to Gordon’s thinking in what was an anemic and abnormally-short Queen’s Speech.
48 Woody 662 do you work for CCHQ?.
Problem with interest rates is that if it all works inflation will kick in and rates will have to rise again. If it does not unemployment will be in mayhem territory, state benefits enormous and more borrowing will be required, from where you may ask, as the sources by then may be exhausted. Then you get into the potential danger of civil unrest or extreeme politics. We need to be very, very careful.
A Question, Cons are largest party after next election but without a majority. They follow their existing statements and reduce borrowing, causing a massive tightening of “hard working families”, incomes,(I do love that phrase, what is “hard working”),all the opposition parties combine and defeat the Cons on a vote of no confidence.
In other words the Canadian type scenario. What should happen?
What’s more this constant attack by the Govt on the Banks for not passing on rate cuts seems extremely counterproductive and is totally political.
It’s as if they’ve decided, on rather dubious evidence, that the key to escaping this recession is getting the house market moving again, and believe that low mortage rates will automatically achieve this.
Mortgage rates are getting so low, that i can’t believe further cuts are going to materially impact on people’s ability to pay them - and spare a though for those poor buggers on fixed rate deals!
85
There is of course also this.
http://www.timesonline.co.uk/tol/money/property_and_mortgages/article5289754.ece
One vote for Labour perhaps?
86. The cut and run option is certainly very much on the table. Labour know all these measures will fail and that unemployment and repossessions are set to soar.
It’s just a question of whether they think they can get a result by going earlier. Losing by a bit less, earlier, seems fairly pointless.
71. He did advise that cuts were needed, the point is that he isnt responsible for the reason why they are. That blame and be stumped directly at the door of one Mr G Broon.
Interest income and the retired.
The top quintile of retirees has total income of £25,962 of which investment income is £6,572 and pensions is £17,859. All pensioners have income of £8,999 and £1,788 of investment income.
In total the pensioners on average receive £8,550 of benefits and thus gross income of £17,548. (top quintile gross income 34,726)
I’d guess that for the average retired household the loss is about half of their investment income or 5%ish of their gross income. For the top quintile the loss is about 9%ish of their gross income. This excludes any capital losses of course.
Ouch. There are 6.5 million retired households. There are 18.3 million non-retired households. For them investment income is puny. All figures taken from Economic and Labour Market Review Vol.2. No.7 Jul 2008. The Effects of Taxes and Benefits on household income 2006/07. Francis Jones. ONS.
86, anaemic* surely?
His thinking is that he doesn’t need to bother telling the Chancellor or the Queen what he thinks for he is Super Gordon, the Second Moses, Saviour of the Economy!
Government by headline doesn’t bloody work.
I maintain the election will be in 2010.
Post-Christmas we’ll have big job losses, and there’s no sign of a turn around as yet. Indeed, things seem to be getting worse more rapidly.
Asked if Brown’s best for the economy, a substantial (misguided) number will say Yes. Asked if they want Brown to be in power for another 4-5 years a small minority will say Yes. Labour’s vote will consist of:
1) the terminally thick
2) authoritarians
3) diehard Labour voters
4) those who live in constituencies with excellent individual Labour MPs
5) diehard anti-Tory voters
Pensioners are the biggest demographic in terms of turnout and they’ll not be after Brown again, who shafted their pensions and now their savings get bugger all interest.
The Middle Class will, I think, largely go for Cameron.
Got to say, not read the Clegg article yet but although he’s a plank for interviews and so-so at PMQs I’m quite impressed by his stance on this issue. I don’t think he’s playing it as party politics at all, and is actually being moral and decent about it (as is Cameron and as are some Labour backbenchers). This will help Clegg, and should help him hoover up Labour voters who don’t want to go Tory.
85 Does it not occur to her that all these thousands of renters looking to buy repossessed flats will keep the prices up?
92. “That blame can be dumped directly” that should say
91: “It’s just a question of whether they think they can get a result by going earlier.”
That kinda depends on how you define “result” though. How about rather than as a win, a minority Conservative government having to deal with a monster recession, 3 million unemployed, and 1 trillion debt. Labour might calculate a 2nd general election would happen pretty soon, and they’d be back in just as things were improving.
94
Martin’s spelling is one of the joys of the site, well it is to me anyway.
Savers are losers on Matthew Wright Channel 5 now with Ed Vaizey MP.
Nice try Nick P, but inflation has only just come below 5%!
Osborne was also saying that interest rate cuts should be combined with a tougher fiscal stance, so as to retain confidence in the pound and put us in a better position to capitalise on any recovery.
Whereas the govt are just firing off bullets randomly in all directions. God knows what happens if the recession is still raging in a couple of years.
We need policy makers to think through their plans properly, put them in place for the medium term AND STICK TO THEM (not declare one week after making the PBR that “it’s not going to work”). No piling upon stimulus after stimulus in reaction to every short term piece of bad news. (most economic stimuli take time to feed into the system - you’ve got to give them time to work). If we’re not careful, the continuation of current short termism will see us still be feeling the effects of rate cuts as the economy begins to turn!
@98:
Oi! Martin Day and I are different people. You can tell, because we have different names.
95. How will they? Demand for propery in the economic sense is at an all time low. There are simply too many people with huge leveraged long positions on property which will slowly but relentlessly unwind, no matter how much ‘pent-up demand’ there is.
97 - that’s probably what Labour will be banking on (no pun intended).
The big problem with that of course is “events, dear boy”. This particular approach may just work if a May 2009 election is solely about the economy (though I get a gut feeling after Xmas the mood in the country will drop sharply).
But if something else crops up which is an achilles heel, as in a spate of crime like stabbings, as we’ve seen in the past doesn’t reflect well on the government
The last thing that Brown will need is to call an election on January 15th 2009 and then find by January 20th 2009 that he’s suddenly 15 points behind in the polls
102
Sorry!
CPS has dropped any charges against Peter Hain.
@105:
What, even the Common Law charge of “possessing an unnatural orangeness”?
What do debts look like?
Roughly 40% of households have NO DEBT. (Probably a big chunk of the retired in this). 31% of homeowners have no debt, 51% of renters have no debts.
Of those with debts:
Secured debt (think mortgages) was £63,484, unsecured debt was £4,860.
Depressingly, of the renters (who tend to be poorer), those who have debts have mainly unsecured debt - eg non-mortgage. The poor are being absolutely shafted - because while mortgage interest rates may be coming down, I am willing to bet that unsecured lending rates remain stratospheric in comparison.
http://www.insolvency.gov.uk/insolvencyprofessionandlegislation/research/personaldocs/BritishHouseholdIndebtednessandFinancialStress.pdf
So 14 million households with debts, 10 million without. Say 7 million with investment income making a big portion of gross income.
Jeff Randall has a great article about the rise of political lying
http://www.telegraph.co.uk/finance/comment/jeffrandall/3551530/Telling-the-truth-is-lambasted-in-politically-correct-Britain.html
1)Ministers who either routinely lie or make unsustainable promises – Tony Blair (Iraq), Lord Mandelson (mortgage) and Gordon Brown (tax) – invariably keep their jobs and go on to better things.
2) Sterling is in the toilet because Britain’s finances have been flushed away by a profligate administration whose Budget is in tatters
One more point in favour of NickP.
If you have investment income of £10,000 (eg capital of £200,000), the tax on this is higher than if you have £4,000 and thus lower interest rates even if matched by inflation are still better.
Savers are losers on Matthew Wright Channel 5 now with Ed Vaizey MP.
I think you meant “viewers”
P.S. The Express photo of Sarah Brown on the cover isn’t her best.
I suppose there is an argument that after letting credit get out of hand the BOE is now protecting the profligate borrowers at the expense of the thrifty savers.
But from a party political point of view there are no losers. Osborne has been asking for interest rates to as low as 1% and low interest rates have been a virility symbol for all parties.
Ken.
Was the annual increase in state pensions 5% in November, with inflation plummeting to 0%-1% by next April, won’t that have a benefit for pensioners?
111 - Low and stable interest rates, i think you mean Roger.
@111:
That’s not something I get. In general, low interest rates are symptomatic of a stagnating economy. Why would that be a desirable symbol?
You just to have love it.
Interest Rates are either too high or too low.
The pound is either dangerously high or dangerously low.
There is always something to complain about.
80/93 Didn’t express myself well in my critique of NickC’s statement.
The point I was trying to get through is about perception and emotional engagement with peoples problems, saying “well inflation is going to fall below interest rates so the value of your savings is protected” doesn’t address the near term problems which is about cash.
Pensioners who just over a month ago were getting x% income from savings now face getting less than half x. Its true that over the long term if they get a real return then their savings last longer but people are loathe to spend capital (a nest egg for illness or the unexpected), the savings income is what they look at.
The Government has increased heating alowances, it’s brought forward payments but as you point out inflation is still at 4% (and pensioner cost of living inflation rate probably double that), Mirthios at 11 points out a squeeze on tax allowances for the 65-74 year olds. So there has been a huge fall in savings income to be set against high cost of living, though partly offset by state aid.
87. Thatcher fan. “48 Woody 662 do you work for CCHQ?”
I’m sure not! That would make him an astroturfer and he’s far too nice to be one of those.
115. Don’t worry Jonathon - concentrate on government borrowing - it has been hign, it is very high and will remain very very high for decades. A nice stable reminder of Nulab “management” of the economy.
As a potential first time buyer from now until sometime in 2017 no doubt I’d like to see a scheme similar to the ISA one but solely for the use of saving a deposit for a house which would allow you to deposit a larger amount that an ISA does now. In a world were 15-20% deposits are going to be needed again and banks need savers it could be a winner all round.
115, how about rapidly increasing unemployment and imminent recession coupled with a run on the pound and a trillion pounds of debt?
117 Woody 662 does not work for CCHQ. They couldn’t afford him.
101. Totally agree. We are facing the worst economic crisis in living memory for most and it it seems that every decision being taken is based on the short termist view as to what will play out well with the electorate.
The situation is way too damned serious for this to be allowed to happen. I doubt that the economy can withstand 18 months of vote grabbing headline seeking measures.
The timing of the recession and the relative closeness of the next GE has created the perfect storm. No Government is likely to make the economic decisions that this country needs it to be making at this time if it has one eye on the next GE.
Fraser nelson, in The Spectator, thought a January election was on the cards before all the bad stuff got really bad. I think they’ll hang on to their Limos and Ministerial salaries for as long as possible, while they work out what jobs to do after the Labour wipe out in June 2010 (anyone know the last possible date for a GE?).
Auberon waugh always used to say that Savers out numbererd borrowers, and that cuts in interest rates were a disaster for the Government of the day, but he was a bit on the eccentric side!
113. Tim. No. That’s catch up. Prices already went up by that much this year - so pensioners face a deficit this year, and catch up a bit next year. Lower inflation in future years means the deficit wont be AS BAD, but, it’s not a boost to the standard of living - except in the narrow sense of year-on-year the deficit isnt as bad. (ignoring the impact of the deficit on savings income).
111 I tend to agree with Roger on this. The conventional wisdom is that low interest rates are a Good Thing. And for most people - though certainly not all, as Mike points out - that’s probably on balance true.
However, we haven’t seen interest rates as low as this in the UK for over half a century. If they fall any further, they’ll be lower than at any time since the foundation of the Bank of England in 1694. Normal political rules may not apply in such a situation - it may all start to look dangerously out of control.
The other problem is that we have already reached the point where falls in interest rates no longer have much impact.
116 Hello, I think you were actually referring to NickP as I haven’t been here for the last few days so I haven’t made any statements.
I think the truth is that there are far fewer people who live on their savings than there are borrowers, and people with subastantial savings tend to be elderly and firm Tory voters. So there is little political mileage in bemoaning cuts in savings rates. Many more floating voters are to be found at the mortgage end of the market.
117 & 121. I’d like to let them know they could afford me if they are looking in.
121 and others TY I just wondered as he mentioned banging out a press release..
126. I have a comment in moderation that explains the relative debt levels - I suspect it’s being held up by the hyperlink. Anyway, debtors just outnumber savers. (Significant debtors outnumber significant savers).
re 108. You must be joking Ken. To have an after tax investment income of £10,000 a year you now need a capital sum of in excess of £500,000. Three months ago the sum required was less than £250,000.
Our currency falling at an alarming rate, savers being punished in the tough times - I also think the government would be lucky to escape unscathed.
If Labour had saved in the good times (like Germany did) they could be slashing taxes instead of leaving the economic recovery to the Bank of England - and the only option they have to stimulate the economy is to punish savers and those who are frugal.
http://www.lettersfromatory.com
129 - wonder how many debtors are also those who rely on savings to help pay their way?
131. Mike S. The technical point stands. Higher nominal rates will expose you to greater taxation. I am sure it doesnt apply to many people, but it is technically correct.
The whole economic situation seems madness at the moment. I have a all in one mortgage so effectively just have a current account with an overdraft limit of £60k. The bank doesn’t care what I do provided I pay them back on my 65th birthday so at the moment I can borrow money at 3.5% by effectively increasing my overdraft to up to £60k (there’s £35k left on the mortgage) and invest it elsewhere at higher rates.
On the Canadian situation the Canadiain Hansard is difficult to follow but I imagine that they passed the Queen’s speech on the 28th November as that’s when the debates on it ended. There will be another Queen’s speech on the 26th January.
124 - I thought inflation was well below 5% for most of the year and only in the month when pensions are set did it touch 5%.
http://www.tradingeconomics.com/Economics/Inflation-CPI.aspx?symbol=GBP
126 Sorry I did mean Nick P.
Ken provides the figures at post 93.
As far as I can tell the main advantage in low interest rates is to help business survive. But if they can’t actually get the loans if won’t help.
On an individual level you are in danger of mortgage holders using the extra to save or pay off their debts whilst those living on their savings probably need it and would spend it.
On Green. Smith’s conduct was appalling yesterday. She wrongly stated the offence for which Green had been arrested and refused to withdraw even in the face of his arrest warrant.
The woman is a disgrace. The only ray of comfort is that [if the Mail can be believed] her cabinet colleagues are not happy either].
She wouldn’t have been able to get away with such conduct in a any court in the land including a magistrates court.
134 Yes, but that means that in the year up to that point, prices rose by over 5%. You don’t calculate the annual inflation figure by averaging all the monthly annual inflation figures, y’know?
135 - But the only month that matters is the one in which pensions are set as the figure then is the only one that reflects the change in prices compared with 12 months previously.
The “average” inflation over the year is meaningless - all that matters is the price level twelve months ago compared with now.
138 - Great minds think alike. And so do we.
When consumer spending is under pressure, it makes sense to discourage saving, at least in the short term, until the economy has strengthened a tad. The paradox of thrift.
136. Average inflation might have been a tad lower, but in the scheme of things, take it from me - this isnt a boost -
Inflation for the retired is substantially higher than CPI. A far higher proportion of their income is spent on fuel and food, the two items that have been seeing massive rises.
In previous years, it is likely that inflation might have been lower on the setting date than the average for the year - this is all minor stuff that comes out in the wash.
Any shortfall must be made up using other income or drawing down capital. Loss of capital then leads to lower income.
O/T The Libdems will boycott the Speaker’s committee
http://www.libdemvoice.org/lib-dems-to-boycott-speakers-committee-6757.html
134 138
Inflation figures are rather contentious anyway; real world inflation as opposed to government figures.
144 - Overall inflation is probably a shade lower than recorded in the figures.
My mother passed away last year and I have received a sum of money. As I have also lost my job this year I need to look after that sum, in case I need it! It’s not a good idea to put it into property at the moment - and anyway it’s not that large a sum - so some form of savings is the only way. And interest rates are tumbling. So all round I seem to be losing out.
OT: for anyone following the bizarre twists and turns in Canada, where the minority Conservatives have suspended Parliament because they were about to lose a confidence vote:
“The Harper dictatorship”
http://www.youtube.com/watch?v=xe-DFZA6pR0
Very funny…
123. There was never any chance of a Jan election and Nelson knew it - I often think he writes things for dramatic effect.
I realise that, but clumsily I was trying to make the point that the next years increas was set at the peak of last years inflation,so with Pension increases set at 5% for the following year and inflation heading to zero,pensioners will be doing better proportionately than anyone whose pay is rising at a rate of less than 5% next year (most people I’d suggest)
Mine isn’t.
128. No as Peter rightly points out, I couldn’t afford to work for CCHQ. However, our local Labour MP stated what a great bonus the £50 was. Always good to have a counter.
Well I expect interst rates to go to near zero, oil sub $30 and economic growth round the world to rverse for 2 years at least.
At the end of all that anyone with cash will be well placed: as the Government will be unable to afford the Welfare State # as it currenly exists, taxpayers will revolt at higher taxes and a few more UK companies will have redomiciled abroad tp reduce their UK tax bills.
House prices will be about 35% lower, and when inflation restarts in earnest due to the government printing money, careful investments will do well.
Meanwhile the key thing to do is avoid losing money.
# The Government might make a levy on savings and pension funds if things get that bad: if it is Labour.
143 Labour are desperately trying to fix this. Maybe the Tories should up the ante.
If the enquiry into the Speaker’s conduct is to be put off indefinitely, the Tories should call for him to voluntarily step down from the chair while he is investigated, in lieu of a suspension which is probably not possible.
If he is not minded to do so, the Tories should say that, regrettably, they no longer have confidence in his ability to carry out his job.
Gordon has now publicly allied himself to the Speaker, so it now makes sense for the Tories to use the Speaker as a proxy to get at Labour.
All Governments throw it away at the top of the business cycle (because they want to bribe the electorate). Barber and Lawson blew it on tax cuts, and Brown blew it on spending. At the top of the business cycle we need to be paying back debt.
Fantastic essay by Sam Brittan on how to run an economy soundly in today’s FT, but it will be ignored by politicians.
143 Sorry to bang on about this but why don’t the Liberal Democrats and the Conservatives refer the matter to the Committee on Standards and Privileges, the established body for considering such matters?
Simon Carr in the Independent makes the point that Martin has been so weakened that he has become a creature of the Executive rather than a strong independent voice. Its entirely nonsense that he should allow the Executive to set up the Committee through a government led motion, that the Leader of the House should lay out the rules. This as Harriet herself pointed out is a HoC matter not a Government one.
The Conservatives should also say it’s rubbish and refuse to take part showing the proposal up as a completely partisan and Executive led one.
Peter Hain wants to do a Mandy and return.
http://blogs.news.sky.com/boultonandco
137. Yes - the object of policy now is overwhelmingly damage limitation. Lower rates mean better cash flow for households and businesses and hopefully a less severe contraction of spending and employment.
But that’s as far as it goes - government spin about ‘kickstarting’ spending or the housing market is pure hot air. The wheels of recession, once set in motion, cannot be reversed.
Looking ahead, it seems quite likely that CPI inflation will drop to zero or even negative in 2009-2010, and RPI inflation will be deeply negative for a large part of next year. This opens up the possibility of pensioners and workers facing a cut in their nominal income/wages - I wonder how they will react?
With net savings over inflation rates of 2-3% next year,increased annuities, a 5% pension rise and tumbling prices forecast, particularly on fuel,perhaps the title of the post should have been.
Is any group better placed than pensioners to see out the recession?
129 “Anyway, debtors just outnumber savers. (Significant debtors outnumber significant savers).”
Your post on this still doesn’t seem to have come through but I guess that the key word here is “significant” - I guess there are more savings accounts than mortagae/loan accounts, but most savings accounts contain only small deposits whilst mortgage/loan balances are much bigger.
149 He does seem to say things for effect.
Although I think he also has a tendency to be a bit temperamental.
He’d be at home on here.
157: Jesus, they’re all at it now. It’s like “Night of the Living Dead” with all these zombies wanting back into the Government. Do they really think the public wants to go back to the Blair era??
150 - No, that isn’t really right Tim. If year on year inflation is high in a given month compared with the months either side, it is likely it was relatively low in the same month of the previous year and will be relatively low in the same month of the following year. So if your pay is RPI or CPI linked and happens to be set in a month which records the highest figures that year, it is because you lost out in past years or will lose out in future years.
162. Don’t underestimate the high opinion of themselves these people have.
158
What you are asking for is the impossible, a perfectly balanced economy, no government in history has ever provided that.
As someone who had a telephone number mortgage in 92, I don’t remember too many people saying, ‘15% interest rates Oh goody for savers’
162 His perma-tan might be a bit tasteless in the current economic climate.
156 Ted - This looks like another Labour own-goal. Harriet Harman could easily have defused the row by proposing to the Speaker that the committee of 7 should comprise 3 Lab, 3 Con, 1 LibDem, all to be experienced back-benchers respected throughout the House. By allowing it to become a partisan matter, they have ensured (yet again) that the Green affair will reverberate longer than it needed to. Bad politics.
167. Labour has slid into 100% partisan short-termism under Brown.
154, disagree. As stated on This Week (excellent discussion bewtixt Starkey, Abbot and Portillo by the way) this would mean Labour would choose the next Speaker who would be not be a Tory and would probably be just as bad.
However, the panel is indeed a sticht-up, and kudos to Clegg for not playing ball.
167 It’s allowed Clegg some publicity in his own right and put some distance between the LD’s and Labour. No reason for him to let it go?
Chris Huhne gets a good right up from Letts today. Strange times.
161.
Quite – and Merry Christmas to you for that!
169 True. Martin hanging on looking like a discredited Labour stooge should be plan A.
170. The Lib Dems have an opportunity here to cement support among the pacifist/’civil liberties’ types they attracted in 2005. Quite right to exploit it given their recent dire poll ratings.
PETER HAIN IZ TEH HERO HE FOUGHT TEH RASCISMS IN SUF AFRIKA!!!
(Sorry, couldn’t resist.)
171 Collective insult - not personal Bobajob.
171. Well I’d wish you a Merry Christmas anyway Sally, but you’ll appreciate the sentiment, I’m sure.
In other news, why was Gabble so keen to defend the name of Shannon Matthew’s mum? Because she’s a Labour voter?
165 High interest rates and careful saving through the 80s and early 90s allowed my parents to finance my path through higher education and a relocation to the south east for my first job. For all the doom and gloom that my generation spout, it will be worse for those coming behind us.
159. How can you assert that savings rates will be 2-3% over inflation. I dont know what inflation will be next year - how can you? I dont know what interest rates will be next year - how can you? FFS. DONT YOU GET the 5% rise only compensates for last year’s inflation. It’s a delayed rise so pensioners do badly this year. Pensioners faced substantially higher inflation anyway. Pensioners as usual will face a difficult time in the recession - all poorer and more marginal groups always do.
Why dont you stop posting about things you dont understand. AND STOP making stuff up.
I love this cartoon [but it's cruel so don't look tyson if you are out there].
http://www.independent.co.uk/opinion/
175. Oh I know I know – I was not being sarky… I think I am as guilty of amplifying the slightest twitch in the narrative at as any other pb-er at times. But that’s why we are bloggers and not supposedly serious commentators like the sensationalist Mr F. Nelson.
180. Ouch! Saucer of milk for Table 180! x
Is Clegg sanctioning all this media time for Cable and Huhne. He’s starting to look like an irrelevance. I don’t know how the media tart stats stack up but he’s looking like number 3 in the party at the moment.
O/T Update on Who knew? poll
http://dailyreferendum.blogspot.com/2008/12/vote-result-damian-greens-arrest-who.html
Another one started - Which Minister?
Some names there that haven’t been mentioned here
http://dailyreferendum.blogspot.com/2008/12/vote-damian-greens-arrest-who-knew-part.html
182, it’s fair enough. The answer to almost everything is National Security.
ID cards.
90/42 days detention.
BAE investigation shelved.
Leak investigation and arresting Green.
183. No 3 - has he been promoted ?
I quite like Peter Hain. He is one of the better communicators in the Labour PLP. He can come over as a bit arrogant and tetchy at times though. Last time I saw him on the telly, the orange tan had faded quite a lot.
176 Yes I do.
And to you too.
187. Has his mother been retired as his secretary yet?
159. How can you assert that savings rates will be 2-3% over inflation. I dont know what inflation will be next year - how can you?
Its my prediction.
Whats yours?
Fancy a bet?
170 I thought Huhne was very good on Newsnight the other day. I haven’t really kept up with LD politicos, but now I wonder why they didn’t pick Huhne as leader, if only because he actually comes over with some gravitas. He also has a fairly natural conversational style rather than the robotic regurgitation of position statements you seem to get from politicians of all parties these days.
Why did it take the Tories a week to come up with “this shouldn’t be a criminal matter, it should be a civil matter between Galley and his employer”. On PB this point was made almost immediately, but the first time I heard a Tory politician articulate it was Alan Duncan on QT last night. No one seems fleet of foot any more.
169 Maybe, but this is a matter for the House, not the Government. The Tories & LDs really need to do something to prevent the government from kicking the enquiry into the long grass. Maybe the LDs and the Tories should be speaking to all their moles in the CS and have a “mass leak” in the Sundays. Sort of civil disobedience, political style.
191, because of the postal strike.
Also, ’twas Lansley not Duncan on QT. Fair play to Lansley, he managed not to make a single real gaffe. I’d still tranquilise and keep him in cryogenic suspension for the next 18 months though.
[10] - “Interest rates are one of those things where the media coverage has historically been wierdly one-sided, in favour of borrowers rather than savers.”
Isn’t borrowing an essential lubricant of the capitalist economy? I always imagined it was a good thing to have interest rates as low as you could, without letting inflation get out of hand.
The differential impact they have in the short-term on savers vs borrowers is insignificant to the effect interest rates have on the economy more generally. If interest rates are too high, it stifles business investment and slows growth. Or at least that’s how I always understood the economic orthodoxy.
As a side issue, borrowers vs savers is a generational contest, and giving the kicking that people under ~35 are generally getting from the baby boomer generation [university costs, house prices, pensions, etc], it wouldn’t surprise me if my generation were done over by our parents yet again with higher interest rates to help fund their relatively comfortable retirement, whilst we get saddled with fewer jobs and more expensive mortgages.
PA Reports: (regret this is the last Friday I can post this bulletin)
Liberal Democrats held off a Tory challenge in a close-fought double council by-election at north east London’s Waltham Forest Borough.
They narrowly defended two seats at Hale End and Highams Park ward with only a tiny swing since the 2006 main polls.
Elsewhere, Tories held four safe seats but with big switches to Lib Dems in two cases.
A quarter of the electorate made it to the booths at Bingley, Bradford, which was hard-hit by snow.
Analysis of the five results suggests a projected nationwide 13.2% Tory lead.
But all of the wards contested already had low Labour vote shares and at Braintree District, Essex, Conservatives clearly benefited most from the absence of independents in the Three Colnes contest.
A calculation based on four seats fought both times by all three major parties - excluding the Braintree result - gives a line-up of: C 38.3%, Lab 29.8%, Lib Dem 24.9%.
RESULTS:
Bradford City - Bingley: C 1949, Lab 689, Lib Dem 332, Green 175, Democratic Nationalists 61, Ukip 49. (May 2008 - C 3529, Lab 940, Lib Dem 648, Green 487). C hold. Swing 3.7% C to Lab.
Braintree District - Three Colnes: C 647, Lab 121, Green 72. (May 2007 - Two seats C 752, 686, Ind 532, 487, Lab 148, 146). C hold. Swing 10.5% Lab to C.
Colchester Borough - Birch and Winstree: C 745, Lib Dem 423, Lab 83, Green 32. (May 2007 - C 1164, Lib Dem 313, Lab 100, Green 83). C hold. Swing 13% C to Lib Dem.
Rugby Borough - Avon and Swift: C 361, Lib Dem 153, Lab 84, Green 37. (May 2008 - C 609, Lab 142, Lib Dem 134). C hold. Swing 10.4% C to Lib Dem.
Waltham Forest London Borough - Hale End and Highams Park: Two seats Lib Dem 1298, 1295, C 1223, 1155, Lab 264, 241, Green 142. (May 2006 - Three seats Lib Dem 1617, 1462, 1453, C 1434, 1363, 1346, Lab 437, 404, Green 363, Lab 327). Lib Dem hold two seats. Swing 0.1% C to Lib Dem.
191 We now know all this was done to unearth the Treasury mole and the police have been called in to get him/her aswell- but they obviously haven’t found him.
I think we would know!
179 I think those that rely mostly on the state pension and don’t have debts have probably been through the worst, unlike the most significant victims of the recession who will be those that lose their jobs and those who bought houses in the past few years. I’m not sure that I agree that the most marginal groups suffer the most - people who have nothing have nothing to lose.
Interesting to see on last night’s QT that the Tories’ NI wing the UUP praising a weaker pound and saying how it has pushed up retail sales and will lead to a major spike in light engineering exports orders in coming weeks. Good honest Bobajobomics comes into play.
However, they also made the (very good) point that we could not have pushed down the currency were we in the Euro. Not so good for the Europhiles among us.
On balance, it seems waiting for the Euro entry was a good move. But one day…
191 Problem is that affable, chatty Lib Dems become rigid and pompous when made leader. Not sure if it’s reversible.
187 - I personally dislike him but I’d put him down as the best Northern Ireland Secretary since Labour was elected and he was making a very good fist of Work and Pensions while he was there too (especially decision to extend the financial assistance scheme). If Mandy can make three comebacks Hain definitely deserves another go.
153 ‘# The Government might make a levy on savings and pension funds if things get that bad: if it is Labour.’
So, yet again those who are sensible enough to save, may be required to bail out those who were profligate during the good times. I’m beginning to wish I’d blown all my money on flash cars and holidays, or maybe a large brood of chavvy ‘kiddies’.
I’m also running out of unpleasant things to wish upon Brown and his cohorts.
188. Thanks – loved the cartoon BTW but catty as all hell! Only a woman could post it, might look a tad unchivalrous for us men to do so!
192 Indeed, I did read some posts on that, I am surprised that in the circumstances they neither extended the deadline nor took postcodes as proof of posting. Or indeed, in the 21st century, why anyone relies on 19th century communications for something as important as a leadership election. Even having a polling station in your local Lib Dem office would be an improvement.
As an HR person who did recruitment back in the steam days, and also sometimes attempted to communicate with staff by writing to them at home, I used to reckon that up to 1% of post went missing. And if people were unlucky to be served by the West London MLO in Paddington, much more than that.
I’m also obviously not up on second-rank Tory politicos either! Everyone seems to be a bit of a clone these days (as well as pre-programmed).
Just watching that auction property programme on BBC which really encaptulates why the banks got in such a mess. A bloke bought a garage in Tunbridge Wells for 66k to build a house which had no chance of planning with the bank backing him. Do we really want to be lending at 2007 levels again?
184. b. Where do you find these obscure websites? Does anyone in the world -apart from Mrs Green perhaps-care what Mr Green from Gosport thinks?
Roger, tyson, if you’re out there reading this –
YOU OUGHT TO BE ASHAMED OF YOURSELVES FOR YOUR DESPERATE, MISANTHROPIC AND PATHETIC ARGUMENTS IN FAVOUR OF A UNIVERSAL DNA DATABASE LAST NIGHT!
At last someone’s finally looking at it from the savers’ point of view. Those of us who are young, working and trying to save up enough to put a deposit down on a house are doubly screwed: by banks for falling interest rates on our savings and by the government for using our taxes to prop up banks, homeowners and the stupid house prices that got us into this mess in the first place.
Glad I caught you, Roger — have you asked your Dutch friends if they’d be happy with the Hague holding their DNA on file?
183: This is nonsense - the LDs are not a one-man-band. Getting exposure for their other front-bench heavies has long been a goal for them. Under Kennedy people used to say there was no one else (until Iraq put Ming to the front). Now there are other people are saying Clegg is being crowded out. This is clearly just partisan sniping.
A good leader lets his generals do the fighting, then comes in as the statesman to claim victory.
179. ‘Why dont you stop posting about things you dont understand. AND STOP making stuff up’
Save your breath Ken, mate, ignore the troll.
180, Sally: Oh, you are cruel! Cruel, but funny…
190. So you think that real interest rates on savings will be 2-3%? So that means you think that real interest rates in the economy will be massively higher than they have previously been? In the middle of the recession? So you think the BoE base rate will average 2-3% more than CPI over 2009? £20 says it doesnt.
180 - love the “Enlarge” link underneath as well
208 I agree, i would love to see parties with more collegiate leadership. I find this cult of “the leader” to be frankly undemocratic.
208. But under Kennedy the Lib Dems got their highest vote share for decades and people knew who he was. Clegg has a limited time until the next election to make an impact on those who vote solely based on leaders, and is failing to do so. Makes no odds to me, the fewer votes they get the better.
To Tim and others,
Current facts: real interest rate today -2.2%
Next year predictions BOE says: inflation will fall below -2% and interest rates could go to 0%. Thus at best -2% real interest rate in FY09.
For ANYONE who has substantial cash £ deposits this is clearly bad news. The Govt wants it this way, it wants us to invest in gilts and other instruments of its choice that generate at least some real return.
It hugely favours borrowers, because despite deflation and the real increase in the cost of equity, the low interest payments more than offset the difference on the premium.
Also, the £ is only going to weaken in these conditions, so if you have any liquidity you will sensibly move it abroad. There will therefore be more capital flight.
This is a terrible position to be in; it will take years to get out of at best.
To say The Tories have the same ideas as Labour is just rubbish. Everyone is trying to suggest steering away from the hurtle towards the cliff edge. The issue is who started us on that journey.
Get out of cash, get into debt at the current cheap levels if you can and buy assets that are at long-term lows. It is the only way to get through the next 2 -3 years.
211.I think you’ll be able to get 4% on savings and inflation will have fallen to between 1 an 2% by next summer.
205. Horse. My take on it was that either everyone should be on the DNA database or no-one. It seemed unfair to keep just those who were convicted. A life sentence if you like. Tysons argument was different. Sort of ‘those without sin..let them cast the first stone…’
Great article in the FT on why the banks wont lend (may have already been posted)
http://ftalphaville.ft.com/blog/2008/12/05/50060/why-banks-wont-lend/
“It doesn’t matter how much Hank Paulson gives us,” said an influential senior official at a big bank that received money from the government, “no one is going to lend a nickel until the economy turns.””The official added: “Who are we going to lend money to?” before repeating an old saw about banking: “Only people who don’t need it.”
Before dismissing this statement, please let it wash about the mental taste buds a moment. It is not original, I heard it from an American, but the more I do think about it the more it seems true:
The last six months has seen the biggest ever redistribution of wealth from the poorer to the better off parts of society.
Poor bankers are rescued, poor shareholders are bailed out, those on bigger mortgages benefit most from rate cuts and Brown Bailouts while vulnerable savers suffer, average working people suffer more from NI increases than fat cats where half percent more is neither here nor there, 10p rate losers are still losing out at the margins, working stiffs will be paying for the government support of the well off for a generation or more …….
Will those traditional Labour voters stick as this becomes apparent.
196. Ever heard of debt NickC? If you have nothing, you can go into negative territory. Not to mention a decline in living standards. A fatuous statement applied to economic circumstances - “those who have nothing, have nothing to lose”. Without a doubt those who become unemployed and stay there are worst off, but the poor pensioners and other marginal groups are right down there in terms of pain from a recession.
The most marginal suffer because the part-time work (and the shadow economy work) they do dries up. The little extra help they get from family and friends dries up. The welfare funds are more stretched, the people who are there to help them have to help others. This isnt rocket science. There is no stretch in their budgets. OK if we get deflation, maybe there will be some help there. It’s why I believe that in the name of equity we should be offering higher tax allowances to the working poor.
216 …and what will next year’s Council Tax rises be on average?
(Reminder: CT is a large part of most pensioners’ outgo, is not included in normal inflation indices and has doubled over the last 10 years.)
OK
So I think that the tories have fallen into a trap here.
http://news.bbc.co.uk/1/hi/uk_politics/7766272.stm
See, I think the milage that they will get here will be next to zero.
BUT
by using this line of attack they have effectively blocked bringing back that old fat man, Ken Clarke.
I mean if the tories go on the offensive over the euro then can they honestly bring back KC as the shadow chancellor.
so in a shot Labour have stopped the tories playing a joke they never knew they had. You don’t believe me when I say that KC coming back would be massive. Look what mandelson did to shift the agenda.
And by the looks of this I think he has got another one up here!
216. Not the point. Some savings products will offer higher rates, but it will require locking up savings. Poor pensioners cannot afford not to have access to their savings instantly as this is also their reserve for a rainy day. Average interest on savings with instant access will be at the base rate or lower.
204. Surely the point is that Mr Green of Gosport is asking others for their opinion. Isn’t that the point of any poll? And the opinion so far (small sample, admittedly) is that Jack Straw raises the most suspicions.
As for obscure websites - love ‘em. They’re often entertaining (even when wrong) and surfing through them is the modern-day equivalent of idling in a pavement cafe and people-watching while relaxing with an espresso.
Joke should be joker, sorry
221 Adam - Yes, I think the political effect of big Council Tax rises is going to be significant when everyone thinks prices are dropping, and are having to tighten their own belts. Expect lots of stories about fat-cat Council staff and their gold-plated pensions. (I’m not saying these stories are necessarily fair, in general, but that isn’t the point).
222 The background rumour has been that Lord Mandelson is the driving force behind Euro discussions.
On Radio 4 yesterday Lord Madelson denied that he had spoken about the Euro with Barroso for some years and said that while he thought the long term objective should be the Euro it wasn’t today. Mr Barroso said ministers had told him that they wished they were in the Euro.
Shortly Mr Brown, Mr Sarkozy and Mr Barroso will meet, excluding Mrs Merkel, to discuss the proposed EU stimulus. Mr Brown has been talking a lot to those two.
Wonder why people assume it was Lord Mandelson?
219 But you are leaving out the massive losses which have hit the wealthier elements in society due to the collapse in asset values. And these have already happened - the NI increases are in the future. Property owners have suffered losses of at least 25% with more to come. I suspect that by the end of the recession the distribution of income will be more equal than it was at the start - if only because the outrageous bonuses that banks have paid in recent years will be gone.
197, are you nuts? Surrendering monetary policy to Frankfurt is a mad idea.
222, fallen into a trap by consistently saying they’d never join the euro? Balls. It’s just consistent policy based on principle. The notion this is a masterstroke from Mandelson is utter nonsense.
http://www.politicshome.com/
On the effect of the PBR.
Seems to have done Labour some good.
But not enough to say it’s the last big roll of the die.
11 & 19 - Your facts are correct but your analysis is not. The people affected are no worse off as a reasult - it is just that other people, primarily lower earners, are better off.
191 ‘LD politicos’ did vote for Huhne overall, armchair members voted for Clegg overall, and there are just enough more of them.
226 Councils will have a tough year. They are tied in to salary rises and pension fund costs while at the same time Government grant and other income streams are being squeezed. On top of that they have to find their 2% ‘efficiency savings’. Many will be charging near to the 5% limit just at the point that inflation is bottoming out.
222 Cobblers. There has never been any chance of KC coming back as shadow chancellor. Maybe some other role (he says he was offered Shadow Leader of the House by DC but turned it down), chancellor would risk reopening all the old Euro splits in the party.
Quite rightly, Brown will ultimately get the blame for the poor savings rates.
1) Brown gives independence to BoE
2) Brown messes up economy
3) Brown starts to intervene in rate setting - “extraordinary times call for extraordinary measures” and all that
4) Rates tumble
This is another step away from where we should be: people with their own reserves of cash, living within their means. Disincentivising saving, incentivising borrowing and risking a run on the pound are all disastrous, hence why the cuts to 3% and then 2% were absolutely crazy.
I’m also surprised that no politician expresses any sympathy for savers. One report today says savers outnumber debtors by 7 to 1 and yet the government and the BBC constantly tell us the lie that we’re all groaning under the weight of unsustainable debts. The government goes to extraordinary lengths to champion, encourage and reward debtors and gets mad as hell when banks are reluctant adopt the same stance.
227. That’s hardly a secret, surely? Mandelson is just continuing to work for his real bosses. Brown is a cipher.
222 229. The Coffee House agrees with Morris
http://www.spectator.co.uk/coffeehouse/3066646/the-tories-must-remember-mandelson-is-mortal.thtml
223 - Ken, we agree then that those with savings will be able to get 2-3% more than inflation.
Those who live off their savings are more likely to be Tories anyway.
Hopefully most of the people adversely affected by low interest rates aren’t so self-centred that that they won’t see that low rates are good for the economy, good for most people, and if they have children, likely good for their own children.
228. Wealth distribution might be slightly more equal, but pain in recessions is not about whether my house has gone from being worth £1.5 million to £750K, but whether I can no longer afford anything more than beans on toast for every meal. For the rich, the losses are greater in monetary terms, for the poor, it’s the difference between a decent meal and beans on toast. I know which one I’d prefer to be. Remember the vast majority of people are not going to have bought their house in the last three years and for most, they were trading up. I will admit you are right about the absolute monetary loss - but I was talking about pain from recessions - which I still say is worse for the poor and marginal.
[116] - Jonathan c. 2008:
“You just to have love it.
Interest Rates are either too high or too low.
The pound is either dangerously high or dangerously low.
There is always something to complain about.”
Jonathan c. 10,000 BC:
“You just to have love it.
The deer is either too raw or too burnt.
The cave is either too smelly or too cold.
There is always something to complain about.”
Complaining provides motivation for progress. Why else would people bother?
235. I compared Mandelson to Maradonna the other day. Amazing footballer, prepared to cheat to win, had his ups and downs, contraversial, looks like he has died then comes back to the big stage etc.
so if you were playing against Maradonna what would you do. Tories need a Vinny Jones to get a Yellow card and throw a reducer in on the man maybe
Wealth distribution might be more equal, but what’s the use if we’re all poorer?
Mandelson is on record as being in favour of joining the Euro. I can’t see why having been a European Commissioner would make him *less* likely.
In the short term, I can imagine Gordon seeing the Euro as a solution to a significant number of his economic problems. And we know Gordon is nothing less than short termist.
It’s only his crippling fear of Murdoch that will prevent it.
174
Don’t do that!
It might encourage them.
savers do not have a divine right to interest on their savings.
there is nowhere profitable to invest it right now, hence low interest rates.
savers should be thankful that (a) they have some money (b) at least inflation is not going to be too much of a problem eating away at the capital.
’so if you were playing against Maradonna [Mandelson] what would you do’
Kick him off the pitch a la 1970s Leeds or provoke him into getting sent off….but certainly don’t give him any space to play.
229. Well of course Eurosceptics such as your good self would see me as mad for supporting Euro entry. I used to be a sceptic, but have changed my view. I think that if we were in the Euro, we would dominate it – and therefore would benefit from a interest rate set to favour London and Paris. London would become the undisputed capital of the Eurozone too – no other city is as big or as important and London and its new railway really put its at the heart of Europe. I sense a bigger enthusiasm here too since the coming of the railway.
The pound cannot last for ever – the Dollar and the Euro need to create big blocs to compete with the emerging economies of the East – so when the time’s right we should go in. That’s not now, but when the economy picks up it could be. It’s inevitable eventually anyway, in my view.
But we could debate this endlessly. Europhiles and Eurosceptics rarely budge, but viva la difference, as they say in France
‘Wealth distribution might be more equal, but what’s the use if we’re all poorer?’
Well that’s never been a concern for socialists - for them, distribution is everything, national wealth is irrelevant. Flat-earth economics is their religion.
232.
Well he will definately not come back after this.
And what I would like to know from the tories is; how much do you actually want to win.
I mean come on the labour party accepted Mandelson back. This was the guy who worked on Gordon Brown’s Leadership campaign only to be pasisng info to Blair. And it was Brown that wanted him back.
At least Labour are showing they want to win. If your saying he couldn’t come back becuase of the euro stuff generally, then you don’t want to win enough.
244. Leeds-style tactics don’t work anyone – you end up getting sent off yourself: a la Ozzie on the yacht.
245. I think that if we were in the Euro, we would dominate it
Correct - our crippling debt levels would ensure it fell against the dollar…
Ken who suffers most. The one who can no longer afford caviar and champagne and has to do with ham and Cava, or the one who can no longer afford a Sunday joint and has to eat spam and is on the dole?
These crises are not only statistics and economics they are human tragedies, and I know who will come out of it best, who can hire advisers to save their money, who have enormous pension pots as they walk away from their failed banks, and on the other side we know who will have less disposable income because their savings produce little interest and to have some fun they have to dig into their capital.
236. NO. The very rich who have no need for liquidity might (I still cant predict inflation or interest rates with any certainty) be able to achieve 2-3%. PENSIONERS* will not. So you are wrong. As usual. Want to take my bet? Remember this is about pensioners not savers in general and not a rich subset of savers.
* Ther average pensioner will have savings of £25,000, with a big skew towards the richest quintile. The median pensioner will have something like £10-15,000. They cannot afford to have this put into a fixed interest account. It represents their rainy day money as well. This will be placed in a high interest instant access account which will pay the base rate or less.
246. What a load of utter nonsense. You might disagree with socialism’s methods, and think them misguided, but the idea that socialist don’t *want* to improve total wealth as well as slice up the pie more fairly is garbage.
Ken or anyone. On best deals for savers.
Are NSandI Government Index Linked Savings Certificates a good idea for people looking for a better return on their savings and who are able to lock up the money for a few years? These are tax free and track the RPI plus a small percentage. What is the RPI likely to be over the next few years compared to the BOE Base Rate?
Erratum:
244. Leeds-style tactics don’t work anymore – you end up getting sent off yourself: a la Ozzie on the yacht.
Very OT, but there’s an interesting case before the US supreme court today on Obama’s citizenship which in (the very very unlikely) event it gets taken forward could prove hugely contentious…
http://www.washingtontimes.com/news/2008/dec/04/supreme-court-hear-obama-citizenship-suit/
Reading between the lines, it looks like the case is nothing to do with where Obama was born or his birth certificate, but simply on whether his dual US-British citizenship at birth due to his father’s British/Kenyan citizenship disqualifies him under the “natural born citizen” clause in the US constitution.
235, Morris Dancer wishes to announce he is not on the Spectator payroll. He is, however, open to offers should they wish to enquire about employing him
245, dominate it?
Yeah. Because France and Germany have bigger economies than us. And what’s the benefit of ceding monetary policy to a bank that has to try and make it right for a dozen countries when we can have one to suit us?
The pound can last forever. We’re not having a single European nation, so we shouldn’t have a single currency.
Shed a tear for poor Peter Hain…
And when, to my horror, I discovered the problem, I went straight to the commission, and also told the media. There was no exposure by tabloid or political opponents. It was me who outed me, triggering a chain of events that led to the extraordinary and unprecedented decision by the commission to pass the buck to the police, leaving me little choice but to leave the cabinet and clear my name.
http://www.guardian.co.uk/commentisfree/2008/dec/05/peterhain-partyfunding
253. RPI< CPI. RPI includes housing related costs. Bank targets CPI. Although they will undershoot.
256.- Yeah. Because France and Germany have bigger economies than us.
France?
Really?
257, do tears of laughter count?
Shocking that the CPS decided not to take it any further even though the ‘alleged’ breach in the law appears clear. Still, I suppose the red rosette is the real life equivalent of a Get Out Of Jail Free card.
@253
NSI good value for now. Nothing can be prediceted beyond next year at all.
If or WHEN Brown starts the printing presses inflation could shoot to levels we have not seen in living memory. interest rates will then shoot too.
The effect at earliest would be seen by mid-2009, but more likely Q3.
“The UK recession will be “one of the worse around the world” and will be deeper than that seen in the early 1990s ”
http://www.ftadviser.com/FTAdviser/Regulation/News/article/20081205/c35b0c72-c2ac-11dd-bbc9-00144f2af8e8/UK-recession-will-be-worst-in-the-world.jsp
249. As our total debt measured against GDP is lower than France or Germany, I’m not sure that is correct contention. But anyway I said when the time is right. Not now. But this is pointless area to discuss really as Europhiles and our sceptic colleagues never agree and just recycle their own arguments ad infinitum.
FWIW, I think the monetary policy argument expounded by Morris is the most powerful argument against the Euro - but sadly the debate often gets bogged down in narrow nationalist stuff about “saving the Pound” that is largely irrelevant in a globalised economy.
Saving ratio (percentage of household income)in 1997 10.4% and after 11 reckless years is now 0.4%.
259, I believe so. Open to correction.
260. Reassuring to see that as government ministers continue to tell us, ‘no-one is above the law’.
263, a globalised economy doesn’t mean ceding the levers of the economy to foreigners.
237 I think that for those who exist on benefits (including the state pension) there will be little notcieable effect - benefits will continue to be paid and their real value might even increase in a period of deflation - depends if they are cut, which would be politically difficult. For those at the very top there will also be little noticeable effect - their wealth might have a few less zeros on it but they will still be very wealthy.
For those in between the effects will be variable - some people will do well and others will do very badly. Most people in a secure job who have not bought a house in the past 5 years, and who do not need to move house, will gain from falling prices. Their house value will drop but that is only on paper - it will not affect their day-to-day finances and even if values halve they will still not be in negative equity.
Those who will do badly are primarily those who lose their jobs, and they will suffer twice over if they have also bought a house recently. These people could lose everything. But they will be a relatively small minority.
238 Complaining wastes energy that could be harnessed to improve your position. >)
269 - France GDP has been lower than the UK for at least the last thirty years I think you’ll find.
263. The whole point about the Euro is that we would become one economy anyway – the point I made was that London would dominate it and become the undisputed capital of the Eurozone. And interest rates would be set for the benefit of London and Paris. London is a pretty pro-Euro sort of place, perhaps because people here know we’d boss it if we went in.
272 - “benefits will continue to be paid and their real value might even increase in a period of deflation - depends if they are cut, which would be politically difficult.”
The government is committed to increasing BSP by a minimum of 2.5% regardless of RPI so this could be quite a little bonus for pensioners in the next few years.
271. Our friend doesn’t even understand the meaning of the terms he is using - they are just empty slogans thrown around to try to make himself look informed.
275. I should add that I am not a wildly passionate Europhile, It’s just that, on balance, I see more arguments for than against. I was, up until fairly recently, mildly sceptical.
260, 257. Amazing. Nice twist on “operational independence of Police”
Peter Hain: “…my fundamental conclusion is also that the police should never have been brought into politics… the police have better things to do than hunt down politicians in a media frenzy … for breaches of rules that can be enforced more sensibly. And those MPs who have been too ready to call for police involvement need to understand that any momentary political advantage they might so achieve over opponents actually undermines politics itself.“
277. No I don’t understand the term globalised economy? Give over Runnymede. I don’t mind debating you but you are just rude fairly often on here which makes adult debate all but impossible with you. You are only ever polite to those with whom you agree, or that is my impression.
Ken @255.
You’re trying to change the nature of the bet.
I was talking about savers, rather than just savers who need instant access.
By the way.
A free bus pass with a saving of £250 annual saving is a bigger benefit to poor pensioners with savings of less than £10k than they will lose by a reduction in interest received due to recent interest rate policy.
A lady interviewed on Today this morning made the point that we’re in this terrible economic position because lending was too high, ditto borrowing, and saving too low. And the Government’s solution to getting us out of this mess? High borrowing and lending and low saving.
I’d like to see an economic policy based on the position the UK should be in when the upturn starts, and how you get from today’s position to there. To encourage the ‘green shoots of recovery’, I guess at the start of the upturn one needs low interest rates to encourage investment, a currency devalued from recent highs to encourage exports, a fiscal stimulus, low rates of saving, and normal lending to businesses to get consistent cash flows.
The Government seems to be trying to do all these things now, when at least some of them may not have much effect (e.g. low interest rates and the fiscal stimulus) or are actively counter-productive (discouraging saving). The risk is that the recovery will be small or non-existent because interest rates have to rise so that the Government can sell a mountain of so-called gilt-edged securities, the currency and savings strengthen in response to this, there’s no money for a fiscal stimulus.
In summary, the Government appears to be doing everything at once, when a phased way of dealing with the situation is called for. While there’s no pain-free way out of this recession/credit crunch, we seem to be getting the worst of all worlds at the moment.
274, really? I’m certain the papers stated France was ahead of us during a brief dip in the exchange rate months ago. Now the pound is really sliding, they may well be ahead of us.
274, besides which, even if France isn’t ahead of us, it doesn’t change the fact that ceding monetary policy to Frankfurt isn’t in our interests.
278. you and 90% of the population i reckon. not that you would believe it from ‘debate’ here.
204. Did my post hit a nerve? Maybe this little blogger should be silenced like Damian Green?
259 Caveman
Very interesting. Now who, if anybody, is offering decent odd on Biden being the next US President?
263, Bobajob, “FWIW, I think the monetary policy argument expounded by Morris is the most powerful argument against the Euro - but sadly the debate often gets bogged down in narrow nationalist stuff about “saving the Pound” that is largely irrelevant in a globalised economy.”
I totally agree. Another fairly pointless one that’s occasionally dredged up is the “easier to change money for holidays” argument.
The entire point of my current opposition is that our economy is not and has never been in synch with the average of that of the EU. The exchange rate has gyrated significantly since the Euro’s inception - therefore trying to leash our economy to that of the Eurozone would put major stresses on it that would no longer be released by exchange rate variation or interest rate differentials (which are linked to some degree, I know). Even if our needs had been weighted higher than those of anyone else in the Eurozone, the interest rates would have been lower during the boom years and now be higher as the bust is biting - which doesn’t seem to be an advantage …
And of course, every argument in favour of UK monetary union with the Eurozone is far, far stronger for Canadian monetary union with the USA - so why don’t Canada bite the bullet and adopt the US dollar? They wouldn’t even have to change the name of their currency …
(Actually, many of the arguments for UK monetary union with the Euro are not much different from ones that could be made for UK monetary union with the US dollar, come to think of it
)
@285:
That’s fine then, because when the issue is put to a referendum, the ‘yes’ camp will win easily then.
285, hahaha. 90% in favour yet your lot bottled a manifesto promised referendum. Keep dreaming. I suppose Gordon has 90% approval too, does he?
284. we would still obviously have power, just a different kind of power within a larger entity.
280 BJ, that’s just how rudeness works, I’m afraid. People just aren’t rude to people they agree with. And it’s a web forum where people tend to be, er, direct. Don’t take it personally.
274 Tim - do discover Google, its a fount of information.
Wikipedia pages showing GDP nominal and GDP PPP (you can check sources from the pages)
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)
On a nominal basis the decline in value of Sterling against the Euro will have put UK below France and might be that its below Italy by end next year.
PPP - will be interesting to see how that changes as France and UK basically the same, differential inflation/deflation might change positions up or down (France above on World Bank list below on other two).
@287:
That’s the essential point. France and Germany have, for all intents and purposes, one economy that has been fully convergent across several economic cycles. From their perspective, a single currency makes a great deal of sense.
However, our exposure is such that our economy is not, and never has been, convergent with France and Germany.
Our one attempt to make it so, as we all know, ended spectacularly on White Wednesday was forced out of the ERM and the Tories learned a harsh lesson about trusting grand European schemes.
285, 288. I wish you were right Ed, but as Martin suggest, I actually think there is little chance of a referendum getting a yes at the moment.
290, ooh, I’m so convinced.
Right now we have 100% power.
Under your cunning plan the power would lie with some chaps in Frankfurt making decisions for a dozen countries with different economies.
A different sort of power? Pah. That’s like saying Andorra has a different sort of army to us.
@Bobajob:
Phil C is right, by the way. Don’t be so precious. We’re all big girls here, we don’t need to tread on eggshells around each other. If Runnymede thinks you’re being a twat, I’d excpect him to say so. And Vice Versa.
[245] - “The pound cannot last for ever…It’s inevitable eventually anyway, in my view.”
Nothing is inevitable. Read recently about the introduction of small denomination bronze coinage by a Byzantine Emperor ~early 6th century or thereabouts. Historian reckoned it was one of a number of changes that helped the Byzantine economy. Different Byzantine Emperors were less savvy. Choices matter [plagues matter more though].
Now, it may be that you are right, that joining the Euro would be good for the British economy - that doesn’t make it inevitable. History is littered with the wrong choices being made, and the Eurosceptics look capable of keeping us out.
On the other hand, it could be that staying out of an inflexible currency union with divergent economies is the better choice - that still leaves it as a choice that we can get right or wrong.
I’m just not sure which way round it is.
275 Surely a distinction can be drawn between being pro-EU and “pro-EU in the way it is currently run”. It is perfectly possible to be pro-EU but against Lisbon, the Euro, and increasing centralised control. We are supposed to live in democracies where we are entitled to have opinions about the way we are governed, to express those opinions and, through the democratic process, have a mechanism for trying to get them put in place.
By the way, did Clegg ever give a reason for why the LDs voted against a Lisbon treaty, when I thought that was party policy?
291. There are plenty of people on here – include yourself – with whom I disagree on most political issues yet are able to debate me politely. My personal experience with Runnymede is that he is not one of those people.
288, 289. i meant 90% either don’t care or change their mind regularly, actually. that is borne out by opinion polls, by the way - europe is regularly listed as being an important issue for 2 or 3% only
196. One not on the PA report
Chester Conservatives have gained both available seats in the Huntington parish by-election. James Scargill and Paul Sheen won almost 60% of the vote in a Parish that was the Lib Dems safest only last year. The by-election followed the resignation of two Liberal Democrat Parish Councillors.
Paul Sheen (Con) 287
James Scargill (Con) 281
Labour 107
Labour 105
Lib Dem 101
Lib Dem 73
UKIP 16
Turnout was 33% and the swing from Lib Dem to Tory was calculated as 24
300, if so many were persuadable I don’t see why you didn’t convince them during the course of a referendum campaign.
Unless of course Brown’s a lying coward and nobody wants this bloody treaty except for EU-phile lefties.
@298:
That’s the position I find myself in: in favour of the ideals that underpin the European Union, but deeply unhappy at the current implementation.
What I remain uncertain about is whether or not it’s possible to change the EU into something workable from what we’ve got at the moment.
296. He wasn’t saying I was being a twat. He was saying that I did not understand the term “globalised economy”. He insults people’s intelligence. He rarely produces any evidence for his barbs – he just says them. I just don’t like the way he goes on on here. I think he probably is a twat, if that’s what you want me to say, there I have said it. Not sure it does much good though.
295. we have 100% power over ourselves only though, and relatively little financial influence on other europeans - who are competitors, importers, and exporters for the UK economy, remember.
292 - when was the last year that French GDP on any measure was bigger than the UK.
We can both use google, you seem to be able to predict what the GDP of France and the UK will be this year.
Do tell.
303. No - the problem would be that your definition of ‘workable’ would for most European politicians be their definition of ‘unworkable’.
BBC states Osborne to attack Labour euro-fanatics:
http://news.bbc.co.uk/1/hi/uk_politics/7766272.stm
243. “savers do not have a divine right to interest on their savings. ”
So we put them all in a sock under mattress. Then where will borrowers be?
305, so you’d trade control of our own monetary policy for puny influence over other countries?
It’s a bonkers proposal.
@304:
Hey, if he’s being fallacious, point it out. All I’m saying is, it’s not worth getting all shirty over a bit of rough and tumble, not here.
308. Good move - start the thought process of “Labour = Euro fanatics”
308 - I think we’ll leave Ken Clarke to slap the boy Gideon around.
No need for anyone else to get involved.
287. speaking of the canadian dollar
many people arguing about us joining the euro would still be arguing if the proposal was simply to change the name of the pound to a different “the euro”.
From the Speccie:
http://www.spectator.co.uk/coffeehouse/3066916/a-return-for-david-davis-looks-increasingly-likely.thtml
303 I would like the next Conservative government to act as “official opposition” in the EU and argue for greater democratic control of the EU and for more prospect of changing the way it is run by the electorate. And not pay over any more taxpayers money until the accounts have been passed, that’s just basic due diligence.
One of the things I actually support in the Lisbon treaty is having an EU president, however I think the post should be directly elected. Then people can stand who have differing views and we get to chose. The neo-liberals would no doubt lose: but at least we’d get a voice in the political process and our opinions aired.
313, didn’t Labour bank on Tory infighting over the Lisbon vote? It worked so well that time too.
302. i’m sure that’s true. if only one side were allowed to campaign the result would be 90-10.
304 Yes - runnymede resorts to insults within a few posts if you don’t agree with his point of view. OK if you are a Tory and just want more support for your view but not much fun if you want to debate issues. Best to avoid IMO.
286. Ptp, Biden as Pres - that’s truly scary! I’m sure someone will know what happens in these cases. I read somwhere that Nancy Pelosi as Head of Congress would also be in the mix in these situations as well.
The Washington Times have updated their report, with a law professor suggesting that the SC is very unlikely to take the case.
http://www.washingtontimes.com/news/2008/dec/05/court-to-weigh-question-about-obama-citizenship/
Delving a bit further the case appears to be relying on an interpretation of what “natural born” means based on a short term exemption that the drafters of the constitution also inserted allowing “non natural born” citizens to be president if they were simply “citizens” at the time the constitution was adopted.
e.g. The drafters declared themselves not eligible to be President as “natural born Citizens” because they knew were British citizens at birth, hence the short term exemption for “citizens” which does not apply anymore. Obama’s dual citizenship at birth could be argued from an “originalist” standpoint as problematic, but I’m sure there’s plenty of legal ways round the issue and any opinion confirming his eligiblity would be useful at undermining “truthers”.
FWIW this case was also being brought against McCain as he had his own problems on this issue.
Bobajob ” The whole point about the Euro is that we would become one economy anyway ..”
Not true. There is one currency and one set of budgetary rules but not one economy. Germany is eating the others alive, the southern countries are still nowhere near the north and are hurting more and more in the current circumstances, Germany does not believe in massive injections of cash, nor really does Holland, and the new entrants to the east are still benefiting from EU cash injections for ‘cohesion’.
The pressure on the cohesion of the Eurozone is growing and the ’stimulus’ package that the Commission is keen on is meant to hold off EU and zone fractures as long as possible.
308. Aaaaaaargh!!!!
I see tim the sectarian bigot is back.
317. ‘Tory euro splits’ are the next line down on the crib sheet after ‘tory sleaze’.
@307:
Well, there’s a possibility that’s true, but I’m not quite ready to believe that yet.
A lot of how the EU evolves over the next two treaty cycles or so depends a lot on whether Lisbon ever gets ratified. I’m largely inclined to believe it won’t now.
Faced with a hostile Conservative government in 2010, the EU may be forced, for the first time in its existence, to properly consider its democratic deficit, its lack of flexibility, its top-heavy subsidiarity, and its overreaching scope.
322, nappy for Bobajob please.
325, sadly I think Lisbon will go through.
306 UK forecast for 2008 is an increase of 0.75%, France 0.9%, so France catches up a bit. Those minor changes are however completely overshadowed by the changes in relative values of Sterling and Euro.
2009 forecasts from UK Treasury are for GDP to decline by -0.75% to -1.5%, France is expected to be 0.0%. - so France grows again compared to UK.
Its easy if you try.
319. Fair enough – glad I’m not the only one. I’ll drop it now. FWIW, I think Martin’s general point that there’s no point getting shirty is probably a sound one. So Happy Christmas Runny Honey, water under the bridge.
310. we are always likely to have financial influence equal to the size of our own economy.
whether as a completely separate entity, as a cog in the euro-machine, or just following europe and/or america as we have been for a long time and are now.
pretending that we would either
(a) surrender all power to frankfurt on joining the euro
(b) push the europeans around and gain control over the whole eurozone
both nonsense.
326. And make it a large one!
329, why surrender any power? I prefer that this country should be its own master, not the servant of the EU. Monetary policy must remain our own.
tim at 306 “292 - when was the last year that French GDP on any measure was bigger than the UK.”
Apparently 2007 looking at Purchasing Power Parity (according to the World Bank).
France was 7th with $2,061,884M and we were 8th with $2,046,780M (figures published September 2008).
However, the IMF disagreed, with UK 6th on $2,137,421M and France 8th on $2,046,899M. (Russia between us in 7th, figures published April 2008).
315 jsfl - Quite likely, I think. But there is a slight problem in that Cameron won’t want to be seen to be demoting Dominic Grieve, who has done a good job in many ways, even though his presentational style is too lawyerly.
331. you are missing the point by talking about surrender of power. the questions to ask really are where do we want to exert our influence, and who do we want to be influenced by?
at the moment we are relatively influenced by the US more than europe, but we don’t have much power in that “special relationship”
“269 - France GDP has been lower than the UK for at least the last thirty years I think you’ll find.
by tim December 5th, 2008 at 11:48 am”
What total laughable ill-informed bollocks. The total economic output of the UK only overtook French GDP in the 90s. And due to the slump in sterling the UK’s economy has now sunk back below the size of France’s once again (unless you judge it by PPP, in which case we are roughly equal).
But given that Britain is shrinking fast while France is still maintaining some growth, albeit sluggish, (judging by the latest figures) then British GDP, even judged by PPP, will very likely be smaller than France’s by the end of next year.
Total crap from Tim Nasty-and-Dim. What a surprise.
334, our monetary policy is entirely our own. Your way would see us give it away to a foreign power.
@331:
MD, I think you’re right for as long as the British economy remains divergent from the Eurozone. In the case of the French and German economies, they had been convergent over several economic cycles, and therefore having two currencies and two monetary policies was an unnecessary bureaucratic overhead that made it harder than necessary to react to external shocks.
We’re all considering another possibility here: that the Eurozone members won’t want us anyway. They’re already having to work hard to maintain Italy after it was allowed to join despite not being ready, would they really want to take on the largest unconverged EU economy outside the zone?
Martin - “When the issue is a put to a referendum” - *bitter, hollow laugh*
O/T 1: http://uk.news.yahoo.com/18/20081205/tpl-do-not-disturb-eggs-mp-reveals-oddes-5b839a9.html
Apparently new laws introduced since 1997 include a law making it illegal to disturb eggs after being instructed not to, and a law making it illegal to impersonate a barrister.
O/T 2: Mike - any chance of a piece on the Manchester congestion charge referendum? Surely the biggest bit of local politics around between last May and next May.
315,333 - are there any Cabinet posts other than Shadow Great Offices that Davis could be put into?
And on the Ken Clarke front - how about Shadow Home Sec (if Grieve were moved into something like Justice)? No European issues and definitely not overly lawyerly or toffy.
339 Andy - Trouble is, there are more egos than there are top positions.
@Andy Cooke
Move Grieve to Shadow Justice Sec and make Davis Shadow Home Sec again.
Hague to Shadow Chancellor. Clarke Shadow Foreign Sec?
341, Osborne should stay where he is.
342 MD - And will.
No, Osborne should be Party Chairman, in charge of strategy. Ozzie is a master political strategist, and I think he can do most damage as party chairman.
340 F*ck the egos. It’s the talent that matters, and that’s at a premium on the Tory benches. Davis and Clarke are both talented politicians. They should be used.
Clarke set aside the euro issue in his Daily Mail interview. As he said, going in now would be legally impossible, and of course any referendum would be lost for the foreseeable future anyway.
Personally, I doubt any of us will live to see Britain in the euro. I remember having an argument with a German friend in about 1999. He was chortling as he told me British membership was “inevitable”, and that by about 2002 we would be in the euro, with our tales between our legs.
Marxism, I believe, was also meant to be “inevitable”.
333. I agree Grieve has done a good job all in all and certainly whatever changes are made it must not be seen as criticism of Grieve. However, Davis is a recognised ‘big beast’ both in the party and the country. Cameron needs him back.
342 I think Osborne should stay. Maybe Clarke should handle Business, but he’d need a good deputy in the Lords. Grieve to Justice I think would be a good match for his skills, DD could go back to HO, and yes I think Hague needs to go to a position with much more public prominence than FS.
339 The wonderful Tamzin Lightwater has a great passage on David Davis
“Doreen just rang in a terrible state. Wanted to know if there’s anything we can do to help DD. He’s up at dawn every day, dressed and waiting by the door with a packed lunch and a sensory deprivation survival kit. ‘But they never come. Why don’t they ever come?’ I told her we were stretched to capacity with Molegate but would do what we could. In my view we have a duty of care to any former shadow home secretary who’s breaking obscure by-laws in a desperate attempt to get himself arrested. Wonder if it might be an idea to hire a kissogram. We could ask for someone dressed as a policeman to go to the house at 5 a.m and ask him a few questions. So long as he didn’t do a strip it could work. Can’t do any harm.”
344 maybe, but I think moving him would be trumpeted as a victory by the Govt.
@Ted:
*chortle*
344. Correct - Ozzie should be moved as he is a pretty ineffective Scote, but could be very useful to the Tories in the sort of role Martin suggests. Clarke as Shafos is an interesting option too.
Tim at 281. No we are talking about pensioners - and the savings rates they can get. Not just a tiny sliver of rich people - your original moronic comments about net savings rates is made in the context of pensioners. It’s you who is trying to change the nature of the bet. I see that you are once again displaying your ignorance about economics when talking about GDP and France. Why do you keep making things up?
The important point is, as SeanT said, Davis and Clarke should both be in high-profile cabinet posts. Dave needs to reshuffle them in and soon. Also, would be a good chance to promote a few of his young high-flying wimmin too, as a way to counter his imagined ‘toff problem’.
re 338. Cookie - there’s a Manchester C-charge thread almost ready to go - maybe by 1pm
you’re correct Sean.
I apologise its around a dozen years rather than thirty.
But thanks for your GDP forecasts..
345 I quite like the idea of having “tales between our legs” Sean. I bet the ares between your legs has a few stories to tell, some unpublishable.
Fascinating - What strategy has Osborne been following as Shadow Chancellor - he seems to have been very successful at portraying the Conservatives as a tax raising party who would do nothing to help businesses or the people.
351 Shafos? Health & Foreign Office?
I’ve always felt there are far to many government departments & cabinet ministers, but that would surely be merger too far.
352 - I said pensioner.
you said pensioners who need “instant” access.
Two different groups.
Typos are brilliant. ares=areas, but the idea of having a Greek warrior god between your legs is even better.
357, yeah, if you ignore the council tax freeze policy, underwriting lending to business and giving incentives to hire more staff.
Funny how the Tories have no policies if you refuse to acknowledge their announcements.
@357:
The PBR backfired on the government horribly because of Ozzie’s strategy. That’s the kind of thing he’s good at. As Party Chairman, he’d be able to do that all the time.
353. I’d keep Ozzie at Shadow Chancellor though. He’s been much more impressive of late, he was good on Question Time, and he dazzled at the PBR. And moving him would be seen a “triumph” for Mandy.
But if they keep him there they have to dilute his poshness with a lot more ordinary people - bringing Davis, of course, and some more women of all ages, as you say. Whatever happened to Julie Kirkbride, she seemed quite good? Even cute.
They need to do this soon. The video of the Shadow Cabinet meeting was painfully embarrassing, as it revealed the ineffably awkward, unrelievedly posh white maleness of the Cabinet. It looked like Harold Macmillan’s Cabinet, FFS.
Grieve has been quietly unimpressive during Greengate. I’d demote him to Justice.
358. I was trying to launch another PB.com acronym – SHAdow FOreign Secretary.
I prefer acronyms to initialisms as a rule, find them more elegant somehow because you can say them!
Shafos has a nice ring to it, like Potus and Scote…
345, 353 - I’m not disagreeing (except in relation to Osborne), but it’s hard to see quite how the jigsaw fits together. Hague probably doesn’t want a high-flak job. DD should be in, and has probably served his time now for his bizarre antics, but would only take one of the top jobs. Ken Clarke is a superb politician, but detested by a significant proportion of the party, and also would only want a top job. My guess is we’ll end up with DD back in the shadow cabinet as Shadow Home Sec, but I’m not so sure about Clarke. More’s the pity, in my view.
You want Julie Kirkbride back after her “non disclosure of funding” issues?
re 357. Why is it that the two MPs I most rate on the Tory and Labour front benches are so derided by many in the PB community. The two? Osborne and Harman. Don’t underestimate either of them.
@Bobajob
‘Shafos’ and ‘Scote’ sound vaguely demonic.
367, Harman is because she’s an anti-male, anti-white bigot.
366. No, I just wondered what happened to her. You imply there has been some scandal - which might explain why she has disappeared of the radar.
Shame. She was quite pretty and likeable.
@367:
I’m not deriding him at all, I think the man has enormous talents but that Dave is not using them to their fullest. I think Osborne is wasted as Scote.
341. If I remember Hague is only interested in the Foreign Brief. I cannot see him being moved. Davis will only come back as Shadow Home Sec I suspect given his stand on civil liberties. Certainly Dominic Grieve could move to Justice. Nick Herbert has not been particularly visible there.
I could also accept Ken Clarke as Shadow Business Secretary. Interesting to see him up against Mandelson. Osborne to stay simply because I don’t think he is that bad and it would be politically damaging in the run up to change of all people the Shadow Chancellor.
Clarke could come back in as Shadow Chancellor but even that would be politically risky and Brown would no doubt stir it up further by dividing Clarke and Cameron over the Lisbon issue. Either Ken would have to swallow his words or the old divides in the party would return at its summit. I can’t see Clarke swallowing his words. Clarke at Business ok - Clarke as Shadow Chancellor is a potential political disaster in the making.
363. I agree about Q/T Sean but remember that he was up against the utterly woeful Douglas Alexander.
Now don’t get me started on that useless pip squeak. Douglas “Sending Out A Message” Alexander, he of the repellent methodist politics is an embarrassment to the Government and represents all that is wrong with the Labour party of today.
364. Scote is a bit close to Scrote, though isn’t it? I’m sure you don’t mean to damage the image of the Shadow Chancellor…. but still.
359. Tim. Pensioners as a whole need instant access. It’s why your original statement is wrong. Just in case you are having difficulty - I have found for you the OECD in figures data that shows France was marginally bigger than the UK in 1999. 1326.9 to 1324.4. Your ability to count hasnt improved has it? - 9 years is less than 30 years. (Trust me on this). No doubt you can hold your own amongst the innumerate and no doubt very ill informed Labour friends you have. But here, you are the very bottom of the pile.
http://browse.oecdbookshop.org/oecd/pdfs/browseit/0100071E.PDF
Why is Hague only interested in the Foreign Office?
373, that helpled but Osborne’s performance was good in its own right.
372, seems a shade unfair on Alan Duncan though. Decent media performer and has actually been in business.
Can’t see an alternative though.
Anyway, doubt Clarke would take a post other than one of the big four.
368. They do a tad - these political acronyms seem to lend themselves to a certain dark glamour.
Try Heace, Cosec and Defes from the Government benches! Mwa mwa ha ha !
I must apologise to Roger for going Banana’s at him last night! It was wrong of me to cite his privileged background and private education against him in his comments. I should not blame him either for seeking to avoid UK taxation where ever possible either or turning a blind eye to Gordon Brown’s previous comment.
The thing I think I should apologise most for is the language and calling him stupid. It was wrong of me to do this, even though I think Roger is well intentioned but universally misguided.
I will blame it on the special Brew!
372. Agreed. Clarke as SCROTE, sorry, SCOTE, would be a step too far. Of course Darling and Brown would open up the euro wound almost immediately, and Clarke is way too arrogant to renounce his views. A Tory own goal.
But KC would be good opposite Mandelson. As long as Clarke sticks to his Daily Mail formula: “there’s no point in talking about the euro now, it’s legally impossible for us to join” he’d be fine.
As I said on a previous thread, I suspect Clarke must yearn for one more turn at the crease. Like any fine old cricketer. It’s quite possible he would accept a “lesser” job.
374. A mere coincidence I assure you Sean.
378 When DCSF was created it was renamed by some of its staff the Department of Curtains & Soft Furnishings.
I think the sonner David Davis gets his old job back the better. He’ll make an extremely good Home Sec and its true that he brings a bit of “working class” balance to the shadow cabinet.
re 379 Just to say that I’ve been in touch with Roger and have booked him as our special tipster for the 2009 Oscars. Those who have followed him in the past will know that this should be highly profitable.
Coffee House not optimistic
http://www.spectator.co.uk/coffeehouse/3067191/taking-a-pounding.thtml
new thread: “Is it worth 2/5 on a Manchester C-Charge NO?
Thanks Ken.
But next time we’re discussing pensioners it would help if you point out that you were talking about a sub group of Pensioners who benefit more from a free bus pass than they lose from a 2.5% cut in base rate.
If you’d like a little bet that savers will be able to get 4% while inflation is 1-2% next summer, I’ll happily accomodate you.
365 If Peter Mandelson can be transformed into someone Labour is pleased to have back so can Ken Clarke, most Tories don’t detest him, they are infuriated by his obstinacy on the EU but otherwise respect him.
The important thing is to get good communicators and heavyweights into the economic departments,
Ken as BERR shadow would be good, he would be the attack dog on Mandelson (though needing a strong deputy in the HoL), Alan Duncan would be IMHO a good Chairman to replace Spellman, his strong business connections and knowledge supporting the economic emphasis. Grieve to Justice and Nick Herbert to Work & Pensions or Chief Secretary to Treasury, losing one of Philip Hammond or Chris Grayling.
367 - Mike you will note that it tends (noted SeanT) to be lefties who want rid of Osborne for Clarke - Obviously a disaster in waiting for the tories with his pro european stance. And mostly those to the right don’t like harman. Personally I think Osborne has done a good job - made a bit of an error on the yacht, but showed his ability to pummel the opposition after the PBR.
Harman is vile, comes up with ludicrous PC nonsense legislation, but understands her backing within the party. She seems better than Brown (faint praise I know) and is elected to her post so is untouchable in the way that Prescott was.
Tim - please stop posting rubbish. If you know nothing about GDP just don’t cut and paste the press release into your post. Lying is only natural for a lefty when the facts dont fit.
I note up thread that it is said the tories would do nothing. I cannot quite this line is still being spouted because
- Cameron in response to a dim witted labour back bencher rattled off 5 things the tories would do
- why is doing something that is expensive and ineffectual better than doing nothing. Would you do the same in your personal life? The car industry needs a boost and my car is not new - I will therefore buy a car I cant afford - ludicrous.
- labour have a track record of throwing money at problems with dubious returns.
bobajob “I prefer acronyms to initialisms as a rule..”
Mmnn, very Nulabour, that. ASBO anyone. ACPO, COBRA, COCKUP.
352 - he is a Zanu labour cheerleader making things up goes with the territory.
NOTE: IGNORE THIS POST, I’M TESTING!
Huge Job Losses Could Be Signal That Worst Is Over