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Posted by: Bofem Oct 26 2010, 10:34 AM

Good to see the double dippers wrong again. Talking down our chances of recovery seems to be the Left's new thing.

Monday's Independent - "UK on brink of double dip recession" and today "UK growth figures better than expected". Spot on eh?

Good to see the 'real economy': construction and manufacturing leading the way for a change.

It may be a blip (who knows? certainly not the Independent or me), but good news is worth discussing too.

Posted by: blackdog Oct 26 2010, 10:43 AM

Too early to tell - the figures were better than expected (0.8% growth as opposed to 0.4%) but still worse than last month (1.2%). If the trend continues down at this rate we will be in recession by Christmas - hopefully they will stabilise.

Posted by: TallDarkAndHandsome Oct 26 2010, 12:12 PM

I agree. Labour appear desperate to talk the economy down in the hope that everyone will get worried, not spend any money and take the Country into recession. I really dislike the way Labour are playing their cards with regard to this as far as I can see they have offered no alternative that would keep the IMF happy and consolidate the Country's credit rating. If our credit rating go's up the spout, the interest we get charged on our huge national debt will increase and we will be caught in a downward economic spiral that we cannot get out of. It was on their watch that the brown stuff hit the fan...

Posted by: Bloggo Oct 26 2010, 12:35 PM

It is a great pity that in times like these when we all need to make sacrifices and perhaps do that bit extra that the political parties can't put aside their differences and do and say what is good for the country not what is good for their party.

Posted by: Ozzy Oct 26 2010, 12:42 PM

A tad rich of the Blues to continually blame the Labour party for the economic crisis for at least another couple of years, yet they appear ready to take credit for its recovery despite them not actually doing much. I wonder how much of the recovery is actually down to the money pumped in by Brown and Darling to keep it going? I sincerely doubt Cameron can take credit for the recovery just yet.

It's still early days and as 'blackdog' suggests they do not appear as strong as last month.

Post christmas/New Year figures will be the key ones.

Posted by: Jayjay Oct 26 2010, 12:54 PM

Really hope it is not a double dip, but think too break out the bubbly yet. The government cuts have, generally, not come into force yet and we still have the duty rise on petrol and increase in VAT to come. I think we can survive these if the gamble pays off and the private sector come up with loads of jobs.

Posted by: Richard Garvie Oct 26 2010, 05:57 PM

It's going to be Q2 next year when we see a true reflection of the budget cuts / VAT rise. Fingers crossed that we don't go into recession, I don't think anyone wants that.

Posted by: Iommi Oct 26 2010, 06:27 PM

I wonder what the ideal is, perhaps the best option is to have small short cycles of boom and bust as it were. It seems to me that perpetual grow is not realistic.

Posted by: Richard Garvie Oct 26 2010, 08:48 PM

Well, at least we haven't had the mass unemployment and reposetions so far. If Osborne and his big gamble works, then we'll be ok. If it doesn't, it will set us back years. I just don't understand why we'd take the risk as a country when the country is still bucking the trend. When the measures from the budget and CSR kick in, we'll have a clearer picture.The thing is, a lot of what was in the budget comes in next April so it's going to be a staggered change from now until then. June next year will be the real test according to the news tonight.

What I don't get is the ideaology of the Tories, when tonight we have a Tory MP saying child trust funds should be replaced by a piggy bank in each childs bed room!!!

Posted by: dannyboy Oct 26 2010, 11:22 PM

Any fule know that when it comes to economics what you do to today won't have effect for 12 months.

Posted by: Richard Garvie Oct 28 2010, 09:29 AM

What made me chuckle was watching Justine Greening MP on telly claiming how the Tories had saved our credit rating and that all of these cuts were neccessary. We're still on Alistair Darlings plan right now, and although I don't think that went far enough, it seems to be working. Once these cuts start to bite and the VAT and NI increase is in place, that's when the real judgement will be made.

Posted by: dannyboy Oct 28 2010, 09:36 AM

The last govt bailed out the banks to the tune of £185bn. I wonder if we'll ever see the interest on that loan?

Posted by: Iommi Oct 28 2010, 09:52 AM

All we need now then, is a shadow CSR?

Posted by: Richard Garvie Oct 28 2010, 09:56 AM

The Government took equity, so when we get our money back it will be at a decent profit. Obviously Murdoch and co won't want to explain that, but it was a very astute decision that will benefit us when we get the money back. This is why when you consider all the facts and what our deficit will be when we get all of this outlay back, it makes you realise that we are going to be much stronger than most. Whilst some companies dished out money left right and centre, at least in the UK we have some big payback coming our way and the terms were extremely strict (the Government put in directors to run those companies that were bailed out etc.).

What I don't get is why the Tories, Libs and some of the media lambast Labour for bailing out the banks. Are they suggesting the banks shouls have been allowed to go bust and all of us lose our savings? What is crucial is that any party would have had to bail them out to protect our savings, homes, businesses etc. The interesting thing would be to see what the Tories would have done different, but they don't want to talk about that!!!

Posted by: Richard Garvie Oct 28 2010, 10:01 AM

There is one. My personal view is that Darling wasn't far off, but what he wasn't big enough to tackle was the bigger issues of welfare reform. This was one of the biggest mistakes that Labour didn't tackle or talk about. There does need to be change, and Miliband has said he will support change providing it is well thought out and "fair". What is clear is that a lot of the changes proposed by the coalition are not fair or well thought out. For instance, the child benefit decision was rushed out at the Tory party conference and the Libs knew nothing about it!!!

We were promised new politics, and Ed is prepared to be part of that. But from watching PMQ's yesterday suggests that it's the same old Tories, ducking and diving and doing as they please.

Posted by: dannyboy Oct 28 2010, 10:07 AM

Would these be the same banks that will be paying out bonuses of £7bn to themselves this year?

The banks should have been allowed to go bust. If you think that allowing the banks to go bust would have lost us our savings (what are they?) then you must also think anyone with a mortgage would have had that written off too.

You don't bail out a business, which required bailing out due to appalling errors of financial judgement & then let things carry on as normal.

Posted by: Richard Garvie Oct 28 2010, 10:13 AM

The bonus situation is disgusting. I don't understand why the Government didn't follow through with the Labour proposal to tax the banks £20bn. I'm sure that the bonus pots were capped by Labour last year, I wouldn't have paid them any bonus but I know a limit was put in place by Darling.

Posted by: Bloggo Oct 28 2010, 10:19 AM

This financial self indulgent greed by the banks was ignored or perhaps even encouraged during the last 13 years of Labour government. There was no cap applied by labour. Tell me what the limit was that Darling imposed?

Posted by: Iommi Oct 28 2010, 11:01 AM

Where?

Posted by: Jayjay Oct 28 2010, 01:08 PM

Darling put a 50 percent tax rate on bonuses they pay their staff above 25,000 at the end of 2009 to prevent the traditional bank hogfest of Xmas bonuses.

Posted by: Bloggo Oct 28 2010, 01:59 PM

Yes, but that is not a cap as Mr Garvie would have us believe. They can still walk away with a million, tax paid.

Posted by: Jayjay Oct 28 2010, 03:13 PM

Yes that is true. The tax rate was an short term measure until the situation could be debated and lasted until April of this year. I think, under EU rules, it is illegal to block the bonuses and the only alternative is order a high level of taxation.

Posted by: Richard Garvie Oct 28 2010, 03:25 PM

Hold on, weren't the Tories telling Labour to regulate the banks less up until 2008? Why did they suddenly change their tune?

I believe Labour should have done more on the banks, but to think any other party would have done any less than bail out the bank they are kidding themselves. The Government bought equity in the banks and kept them going. We will now make a decent profit. The fact is that the Coalition are doing nothing to penalise the banks, they've done less than what Labour did. So even though I'm new to Labour, I will defend their record against what we have seen so far from the Tories. All the Tories have done is hurt the lower and middle income families.

Posted by: blackdog Oct 28 2010, 09:44 PM

You haven't got much idea about bankruptcy have you? No mortgages would be written off - they would be assets to be shared out among the creditors - which would include the savers whose money went down the drain.

Posted by: dannyboy Oct 28 2010, 11:27 PM

I was being sarcastic to Mr G.

Of course your creditors are your assets.

Posted by: Bloggo Oct 29 2010, 07:50 AM

Were they, where is your evidence for this statement And while your are at it please supply the evidence for your statement that Darling imposed a cap on bankers bonuses.

No, what the labour government did was to allow the banks to run the country into the buffers and now ordinary people are picking up the tab.

The Tories have been in power a few months. Labour had 13 years and left us nearly bankrupt. I don't see much to be proud of.
Although you have not been in the labour party for long you clearly have developed the loathsome skill that typified it, Spin.
I wish that ALL of you politicians would put the country first and not your petty party politics.

Posted by: Iommi Oct 29 2010, 08:44 AM

I don't see any evidence that things would have been any different if the Tories had been in power for the last 5 years.

Posted by: Bloggo Oct 29 2010, 09:15 AM

Well, who knows? As you would not see any evidence since they were not in power.

Posted by: dannyboy Oct 29 2010, 09:25 AM

Of course not.

Politics is now a farce where two sets of self agrandising, trumped up self centred busy bodies get on the band waggon to feather their own nests whilst at the same time ensuring the corporate gravy train steams on full speed ahead. Keep the population occupied with trival, but sensational non-events ( banning hunting with hounds, dangerous dogs, 24hr drinking etc etc ), never answer a question directly, be ready to to support what you were first against and stuff your pockets & ego to the max.

Posted by: Iommi Oct 29 2010, 09:29 AM

I think you would see evidence. The Tories gave no notice for the impending bank crisis.

Posted by: Bloggo Oct 29 2010, 09:32 AM

Well I would not have put it quite like that but I would agree that today's politicians of any colour don't seem to represent me and perhaps they never have. Afterall do individuals really matter to them?

Posted by: TallDarkAndHandsome Oct 29 2010, 09:49 AM

I'm just waiting for Mr Garvie to start blaming Thatcher!

Posted by: Jayjay Oct 29 2010, 10:20 AM

It's 'not fair' for housing benefit claimants to live in tax payer funded properties that many who work for a living could only 'dream of' [Oct 27 2010]. Hmm, well my dream is maybe a central london pad with a nice black door and maybe my own police officer outside, or I could have a country house in Buckinghamshire where I could play croquet on the back lawn. Of course I wouldn't pay a penny for this, even though I earn a very good living and am a millionaire, the tax payer can pick up the cost - after all we are all in this together.

Posted by: Iommi Oct 29 2010, 11:13 AM

I don't really see your point here. One is not working and on benefits, the other is the PM of our country.

Posted by: Bloggo Oct 29 2010, 11:24 AM

That is true however if the Government in power did not know either or chose to not share the information that they had then it is unlikely that the Tories could have done anything to head off the oncoming crisis.

Posted by: Bloggo Oct 29 2010, 11:27 AM

I think what is being pointed to is that both some benefit claimers and those that govern us have the opportunity to live in better properties than those that actually pay tax to make it happen.

Posted by: Jayjay Oct 29 2010, 12:05 PM

You can be working and on housing benefits you know and a great many familes are. For example 40 hours working on minimum wage would not cover your rent in Newbury, let alone London. With the rents capped working families will also be made homeless.

If the tax payer pays for your house, by default you are receiving a housing benefit. Downing Street, Chequers etc., and MP's second homes are paid for by us, the tax payer, even though many of these people are millionaire's. Housing benefit will be capped, so many areas of London and the south west will come above this capped figure, even though the claimants may be working. The only housing benefit wthat will not be capped is the housing of MP's.

If the governments gamble does not pay off and the private sector does not come up with new jobs, many people who are already unemployed and the newly redundant will have 12 months to get a non existant job that pays well above the minimum wage to avoid the situation of capping. Unemployment benefit is calculated at the minimum amount to live on to purchase food, fuel and essential goods, the rate for over 25's is £65.45 a week. If you are still unemployed after the 12 month period, housing benefit will be tied to 30% of market rate in the area. On an income of £65 a week you could not make up the shortfall.

Housing benefit claimants between 25-35 who live on their own will have their rents capped at £250 a month for a single bedroom property. I am not aware of anywhere in Newbury where you can a one bedroom flat for £250 a month.

It will also impact on people made redundant who have mortgages, mortgage interest support now capped at 3.63%.

Posted by: Ozzy Oct 29 2010, 12:07 PM

The banks are set to pay £2.5 billion in tax a year by 2012 under the new levy suggested by Cameron and co.

I think the levy replaces the Labour one-off bonus tax which raised over £2 billion, so it's not all that different.

How they intend to apply a UK Tax law to an overseas bank will be interesting and more to the point the proposed cut in corporation tax means they might actually come out with more cash.

But of course George and his merry men think this is all 'fair'. The richest 1,000 people in Britain have £336 billion and they are getting richer all the time—their wealth rose by £77 ­billion last year.

The problem here is that the governments (past and present) are somewhat scared of the banks and to make matters worse the banks themselves know they are holding all the cards.

The government doesn't want to upset them in case they take their ball away and go and play with someone else.

They're not scared of the ones who suffer though. What's the worst they will do - rattle a comment or two off on a local forum?

Posted by: blackdog Oct 29 2010, 12:58 PM

Why not? Surely it was her government that deregulated banking, which eventually lead to the current crisis. Subsequent PMs/Chancellors of both hues failed to recognise the problem and hence must share the blame.

Monetarism got us into this mess, Keynesianism (is that the right word?) has just about got us out of it through the wonderfully named 'quantitive easing' - the monetarists are now back in power. Thatcher had billions worth of state assets to sell in order to kick start the economy, there's not much left for Cameron to sell off. I wonder where we go next?

Posted by: TallDarkAndHandsome Oct 29 2010, 01:25 PM

If we are going to blame Thatcher I'll go further back...
I blame Clement Atlee myself. He started the Financial juggernaut and benefits system that is the Welfare state and was elected over one of the greatest leaders this Country has ever know, Mr Winston Churchill. Let's see a few people not being able to afford SKY TV / Playstations / HD Telly / Family holiday's if they are not working...

Posted by: Richard Garvie Oct 29 2010, 07:52 PM

At the end of the day, when the Tories budget measures have been implemented and we are still seeing the groiwth we have now, maybe I'll be able to sleep a lot easier. But as somebody who risks losing their business because of some of these decisions, I feel I'm more than entitled to speak out at the fact they have been rushed and ill thought out. I've said all along that I'm happy to support reform, but it needs to be viable and it can't be the typical Tory ideaology that is slash the public service whatever the cost.

Posted by: Bofem Oct 30 2010, 07:48 AM

So which is it - ill-thought out or typical Tory ideaology? (sic)

For the record, I'm only 50% happy with what's happening. I'm all for rolling back state interference, but I want my taxes back so I can buy the public services I want myself.

This last bit doesn't seem possible while we've got a £155bn overdraft left to us by Labour.

Posted by: Ozzy Nov 1 2010, 11:48 AM

This all comes down to a similar point someone made earlier. Politics has become a farce. 2 parties playing tit for tat.

Are Labour to blame for the deficit? The economy worldwide failed and as result they had to pump money in. Had the Tories been in power at the same time we would still have seen a deficit - no matter how big/small. Labour had to act. I suspect the Tories would have poured money in too given the choice.

Now the Tories are in power and they have to make cut backs to pay the deficit back. Would Labour have made cut backs if they were in power? Yes. Maybe not quite so harshly but they would have made cuts.

In short, whoever is in power is going to have to make difficult decisions. Whether it be to pump money in to keep the country afloat or make huge cuts to pay it back.

In 10 years time more mistakes will have been made by whichever party and someone else will get a go.

Posted by: Bloggo Nov 1 2010, 11:58 AM

Sadly I believe you are spot-on. Wouldn't it be great if these well educated, intelligent politicians on both sides could work together when the country is in real financial trouble rather than try and score points off each other at every opportunity.

Posted by: Iommi Nov 1 2010, 11:58 AM

Even if you ignore the bank bail-out, Labour were spending more than they were taking in tax. This meant they had to borrow. As our ability to balance the books gets worse, the cost of borrowing that money goes up.

Posted by: Ozzy Nov 1 2010, 12:51 PM

Ah but you're doing the exact same thing now. Tit bits.

It swings in roundabouts. Even if they were borrowing more despite the bank bail-out, Darling and Brown's bank plan itself did work so that sort of balances the positive and negative. You could go through all the decisions like that.

Take Iraq as an example. Wind back to 2003 and put Cameron in charge. Put the same evidence on the table. Would the Tories have made the same decision? Probably. I don't think they would have not backed the US. I don't think they would have not wanted to have claim to some of that oil.

Difficult decisions come along and people in power make those decisions. Rightly or wrongly those decisions are taken on the best evidence made available and those in power take the decisions to the best of their ability at the time.

Labour got a few wrong and a few right. I'm sure the Tories will do the same.

If in 10 years time you can't find something to heavily criticise the Conservatives on then i'll be amazed.

Posted by: Iommi Nov 1 2010, 01:51 PM

Exact same what? What I said is true. Labour had created a system that they couldn't pay for, without borrowing. That in itself is short-termism and just as mean as what the ConDems are doing now, in my view.


But this thread is about the economy. You can't blame people for the state of the economy if they were not in charge. You can speculate, but it happened on Labour's watch.


So would I and I agree, but this thread is about the economy, not those things you list.

Posted by: Ozzy Nov 1 2010, 03:51 PM

Sorry I thought we were talking about ifs and buts.

I assumed the general idea of a conversation was to expand it...

Posted by: Iommi Nov 1 2010, 06:34 PM

You seemed to be challenging my opinion with an argument already established, albeit off-topic: so were you expanding the discussion or refuting to my point?