Gordon Brown warned on banking collapse in 1997

Gordon Brown was warned that the changes to the banking system he was bringing in, in particular removing the role of bank regulator from the Bank of England and putting it into the hands of the FSA would lead to a systemic banking failure.

When discussing the bill that passed the changes to the banking system the Conservative Shadow Chancellor, Peter Lilley said:

With the removal of banking control to the Financial Services Authority--the "super-SIB"--it is difficult to see how and whether the Bank remains, as it surely must, responsible for ensuring the liquidity of the banking system and preventing systemic collapse.

And further:

We have no objection to the objective of trying to bring greater simplicity and one-stop shopping to the business of financial regulation, but we fear that the Government may, almost casually, have bitten off more than they can chew. The process of setting up the FSA may cause regulators to take their eye off the ball, while spivs and crooks have a field day. We shall observe closely what is going on in the development of the proposed legislation.

You can read the whole section of the debate here (several pages), the quotes were drawn from here.

Now that Gordon Brown has admitted some liability for the banking collapse it is interesting to see Labour spinners, and indeed Gordon Brown lying about how the banks were run before his disastrous changes. They allege that the banks were self regulated before Labour came into power. This is, of course wrong. Barclay's did not regulate Barclay's, nor did Lloyd's regulate Lloyd's, the Bank of England supervised them all, keeping a close eye on balance sheets and risk which as we know is a movable feast. Previously they had taken failing banks over and had them restructured in a weekend.

You can read more articles on the Bank of England here.

I would seriously recommend reading the whole debate. Robert Chote gets quoted quite a lot!

Banking regulation

I was quite interested in the reports of the Mansion house speeches by Mervin King, the Governor of the Bank of England, and Alistair Darling the alleged Chancellor of the Exchequer.

The bottom line appears to be this:

Alistair says that his predecessor is not the bringer of doom, and there is nothing wrong with the current regime, though obviously the Bank of England has to take responsibility to make the system stable.

Mervin says that's all well and good, but if you want us to make the system stable, is there any chance we could have the powers back that the bringer of doom took away from us when he created the ridiculous tri partite system back in 1997.

Needless to say Alistair is in a difficult position, because his boss is Gordon Brown, the bringer of doom.

The BBC has this as a report and this from Robert Peston.

Gordon Brown proposes electoral reform!

To be fair it was in Labour's manifesto in 1997 (because Labour thought they could only just squeak in, and may even need the Liberal Democrats) and their 2001 manifesto (Well there was foot and mouth, the fuel protests and maybe they had forgotten to take it out).

But now we here that Gordon Brown, who could have forced it a long time ago is all in favour! And no, he has not looked at the polls!

Well it is such a transparent effort to rig the voting system it will never fly in the court of public opinion. Even Labour supporting unions are scratching their heads.

There is not enough time to get something through in this parliament. If there is a referendum on it (or even the possibility), then up will pop the Lisbon treaty referendum question.

This will achieve nothing for Brown other than make it look like he is trying to fix an election. That will drive Labour even lower in the polls.

The BBC has this.

Sign the petition to get Gordon Brown to resign!

There is a petition on the Number 10 website asking Gordon Brown to resign here.

I urge you to sign it. Currently it has 4,611 signatures. Lets see if we can get that up to a million.

Iain Dale alerted me to it with this and Guido has this.

Labour just don´t get the banking crisis

It is fascinating to note how Labour just do not get the banking crisis.

This is all exemplified by an interview with John Redwood and Derek Draper, on the Nolan show. You can download the MP3 here, or read a partial transcript here, thanks to the University of Manchester Conservative Future, via Iain Dale´s Daily Dozen.

You see, in Draper world, and from having talked to real world New Labour supporters, New Labour world, this is a combination of American bankers, and greedy bankers here, and if there was any fault here, it was not enough regulation but Labour would have regulated more than any one else as everyone else wanted more regulation.

Well I have news for people who live in Draper world or indeed New Labour world, and it is this.

It does not matter how much regulation you have, if you are regulating the wrong things, with the wrong people who don´t know what they are looking at.

There is no sensible way that a regulator could decide what sort of mortgages a bank should offer to an individual. There is every way that a regulator could supervise a banks balance sheet and its spread of risk verses it capital and cash.

It is true that the Conservative party does want less regulation, in the sense of less looking at each individual deal. What we do want is to get a tighter control of the bigger picture. That is the way it used to be done, before Gordon Brown, and it is the way it will be done after him.

Gordon Brown to ban 100% mortgages!

According to various papers, including the Sunday Telegraph, Gordon Brown is to ban 100% mortgages.

There are of course a number of observations you could make.

Firstly its too late in many ways. The horse has not so much as just bolted but to quote David Cameron, has in fact gone on to win the 3:30 at Utoxiter.

It gets worse though. Gordon Brown is saying he knows more about banking. Clearly he doesn't.

The banks have for now at least already stopped lending 100% loan to value mortgages.

The really big problem though is that Gordon has in one stroke ensured that first time buyers will for quite some time, be barred from the housing market. This is of course exactly the reverse of what needs to happen.

The real problem has not been 100% mortgages, it has been the multiplier applied to them and self certification of earnings, as in a complete lack of due diligence on behalf of the banks.

What is even more ironic is that Gordon Brown is talking about prudent lending. Presumably prudent borrowing also. This idiot borrowed well up to the so called golden rule 40% and so had to ditch it at the first sign of trouble.

We hear Labour ministers saying they have "paid off Tory debts". Well that is true, but also obscures the bigger truth. Before the 1991 recession the Conservative government had debts of 20% of GDP. After it it was over 40%. It is true that following Ken Clarke's future budgets Labour paid a bit of that off, but it started this recession with a massive budget deficit and debt rapidly approaching 40% (excluding Northern Rock and public sector pension liabilities).

Whistle blowers revenge on Gordon Brown

You will no doubt have heard the controversy over Paul Moore's allegations which caused Sir James Crosby to resign as vice chairman of the FSA. This stems from Paul Moore being sacked for the heinous crime of pointing out, in his capacity as a risk manager that the bank was being driven to the wall.

Well, in today's Independent on Sunday he fires off both barrels at Gordon Brown, blaming him for our banking collapse. He will, according to the article, send a dossier of further documents to the Treasury select committee which he says shows the regulatory failure.

The interesting thing in all this is that it was Gordon Brown who changed a regulatory regime that had worked for a very long time for one that has failed at its first test. What is more, he was told at the time that the system he was implementing would lead to failure.

Before anyone carps on about more or less regulation, let me say that the USA has a very large regulatory regime. It did not work either. The fact that lots of boxes have been ticked does not mean everything is tickety boo.

I wonder what the select committee will make of the evidence they will see next week. John McFall, Gordon Brown's lapdog on the committee and also its chairman is unlikely to be a happy bunny.

Economy to be worst in 100 years!

It is not a pleasing thought, but that is apparently Ed Balls' view of the economy.

So much for an end to boom and bust, or indeed how well placed we are to deal with it.

The BBC has this.

German finance minister shoots Gordon Brown's fox!

For a long while Gordon Brown has been able to get away with the lie that everyone else is planning some huge "fiscal stimulus" and everyone the whole world over agrees apart from the Conservative party.

Well Germany's Social Democrat Finance minister, Peer Steinbrück has truly burst his bubble in this interview with Newsweek.

Here is a key quote:

The speed at which proposals are put together under pressure that don't even pass an economic test is breathtaking and depressing. Our British friends are now cutting their value-added tax. We have no idea how much of that stores will pass on to customers. Are you really going to buy a DVD player because it now costs £39.10 instead of £39.90? All this will do is raise Britain's debt to a level that will take a whole generation to work off. The same people who would never touch deficit spending are now tossing around billions. The switch from decades of supply-side politics all the way to a crass Keynesianism is breathtaking.

Ouch. It appears that not everyone agrees that Gordon Brown has saved the World!

Flash Gordon Brown claims to have saved the world!

The Crown blog has this fantastic clip of Flash Gordon Brown claiming that he saved the world at Prime ministers questions today!



Very amusing.

Gordon Brown declared Bankrupt!

You will not have read this in any of the national news papers but Gordon Brown has been declared bankrupt.

Personally I feel sorry for him. I don't know what is worse. Being declared bankrupt or having as a namesake the most unpopular Prime minister in history.

Curiously though it was in the High Court which is an odd place to make a window cleaner bankrupt. I wish him luck, he is going to need it.

Gas bills taxed at 75%!

Just in case you were wondering why left wing Labour MP's were calling for a windfall tax on oil and gas companies, consider this:

We now import 40% of our gas, which is why it costs so much, but crucially when British gas draws it off the North sea it pays 75% over in tax to Gordon Brown. This explains two things:

1. Why gas bills are so high.

2. Why
no one can be bothered to bring new capacity on in the North sea. After all it is hardly worth looking if you can't make any money out of it.

In fact this government, egged on by very ignorant left wing MP's and unions, has taxed the North Sea oilfields to the point where no matter what is down there it is hardly worth a look.

So the next time you look at your gas, or indeed electricity bill, and lament the VAT on it, please remember the hidden 75% tax.

The figure of 75% jumped out at me as I was listening to an interview with the MD of British Gas who pointed that out.

Waste Not want not, oh, and pass the caviar!

Gordon Brown came up with a priceless comment at the G8 yesterday, along the lines of waste not want not.

If we threw away less food then we would buy less and so prices would not be quite so high, so we would save twice!

Fair enough, however this message was delivered at a summit costing something like $280 million (yes you read that right) and involved an 8 course lunch followed by a 10 course dinner.

You can't blame Gordon Brown for that, but you do have to wonder which 42 carat plonker thought up the idea of having such a lavish summit to discuss poverty and high food prices!

The Sun has this on "waste not want not", and this in its Sun says, whilst the BBC has this on the G8.

Gotcha! Bribes on the 42 day vote!

Gordon Brown has tried to insist that the government did not buy the 42 day vote. The problem is that no one believes him at all, not even a little bit.

David Cameron skewered him at prime ministers questions today after getting confirmation no bribes were offered. He read out extracts of a letter to Keith Vaz from Geoff Hoon saying he hoped that there would be an appropriate reward for his support which the Telegraph had been given.

The problem for Gordon Brown is this: No one believes a word he says anymore.

The Telegraph has this, Guido has this and the BBC has this.

Housing and oil gloom

Not only has oil reached yet another record high, at over $143 a barrel but the crisis in the housing market looks set to get deeper as mortgage lending sets a new record low.

So no more boom and bust then Gordon?

The BBC has this on the housing market and this on oil.

Gordon Brown bottles it again!

It seems Gordon Brown has bottled it again refusing to put up a candidate in the Haltemprice and Howden by election against David Davis. It seems Rupert Murdoch has bottled it as well.

So he does not want to defend this governments erosion of liberties?

Fantastic.

Bottler.

The BBC has this.

Quentin Letts rips into Gordon Brown!

At Gordon Brown's press conference this morning Quentin Letts ripped into the prime minister!



Just look at the smirk on Gordon Brown's face!

Hat tip to the Crown Blog.

Guido also has this.

Could Labour debt bankrupt Gordon Brown?

The Guardian has an interesting article today on the continuing financial woes of the Labour party and how it may well go bust next month. (Also see this discussion on Politicalbetting)

It goes on to point out that if it does so then members of the NEC would be liable for the debts, including the following MP's.

* Janet Anderson MP (Div. V - PLP/ELP)
* Gordon Brown MP (Leader)
* Angela Eagle MP (Government)
* Harriet Harman MP (Deputy Leader)
* Pat McFadden MP (Government)
* Dawn Primarolo MP (Government)
* Dennis Skinner MP (Div. V - PLP/EPLP)
* Keith Vaz MP (Black Socialist Society)

(Hat tip to Timothy's helpful post here on PoliticalBetting)

My understanding is that if you are an undischarged bankrupt you can't be an MP. So there could be some interesting by elections.

The other interesting point is that the GMB have indemnified their two members on the NEC. Depending on how they have done this, it could leave the GMB liable for all Labour's debt, if the indemnity is to cover all loses. If however the indemnity allows for its members to go bankrupt but then the GMB will, as their "friend" buy out their interest in their assets (such as houses and pensions) then obviously that will not be a problem.

The big question is, however, will Labour go bust?

No. I can't see it happening. No matter how much noise the creditors make something will turn up or some deal will be negotiated. What is clear though is that Labour is in no shape to fight any elections.

Prime Minister Canute orders back tide of oil price increases!

According to this article in the BBC, Prime Minister Canute (AKA Gordon Brown) has ordained that oil prices must go down.

As Guido noted, having formerly noted that oil prices had already dropped from $135 per barrel to $126, prices rose on Gordon Brown's request.

Oops.

Another week, another rebellion?

This weeks rebellion on the Labour benches is over car tax, specifically the way in which tax increases for higher emitting vehicles will now be backdated to 2001.

According to this article in the Telegraph the change affects 18 million drivers, whilst the Daily Mail has this.

This seems to be causing some angst on the Labour benches, and not because a green tax is being raised, but because it is being done retrospectively.

There are a number of issues with the tax as proposed of course, like how it seems to hit quite a lot of what people think of as "family cars" and also the fact that it is more likely that a 7 year old family car is likely to be owned by someone on lower income than a new one.

I would pose the question "what will next weeks revolt be about?" but we still have the 42 days thing coming up.

Has a Prime minister ever looked so weak and inept?