Bank of England Chief Economist :1,350,000 Borrowers Face Negative Equity

Charles Bean is the Bank of England’s Chief Economist, he gave an under-reported speech last week that shook up the Gilts market. It should shake up everyone. According to Mr Bean the Bank’s research has found that 5% of mortgagors have less than 20% equity in their home. That is equivalent to 1,350,000 homeowners.

Along with many other reputable forecasters Professor David Miles, chief UK economist at blue chip investment banking powerhouse Morgan Stanley, is predicting that by the end of 2009 house prices will have dropped 20%.

In pockets of London prices have already fallen 20% from their highs. If that trend goes nationwide Britain is looking likely to have more than million homes in negative equity before the next election. This is based on the Bank of England’s own somewhat conservative numbers…

If Gordon Loses the Vote, Gordon Has To Go

As Cameron signals that he will probably line up his troops behind Frank Field’s amendment could we be looking at a no confidence vote? Effectively yes. Gordon introduced the 10p rate, Gordon abolished the 10p rate, Gordon complicated the tax and benefits system with his endless tinkering at social engineering. This mess is 100% Brown stuff.

The paper pundits are intoning gravely. Jackie Ashley says Gordon could be gone this week, Kavanagh says kick Ken out next week and get rid of the unelected PM. If only…

Despite Alistair’s grandstanding calls on the banks to buck the markets and drop their lending rates, even Northern Rock, controlled by the Treasury has upped lending rates. Meantime the socialist dreams of Gordon Brown the student are being realised with the back door nationalisation of the banks. Another £50 billion is to be pick-pocketed from the taxpayers to prop up banks. Guido does not know what the exact terms of the bail-out are, but in principle is opposed. Why are taxpayers expected to take risks which properly should be borne by shareholders?

Why should the banks listen to Gordon when his own government ministers don’t listen? Many junior members of the government are expected to rebel on the 10p rate, 42 days and even ID cards. We have a shambles of a government by the shambolic, with support slipping away. Bring on the General Election…

Rich & Mark’s Monday Morning View

Lower Taxes for the Lower Paid

Watching Darling spluttering explanations for abolishing the 10p rate this morning it is clear that the Brownies can’t see that their preference for taxing with one hand and then paying benefits back with the other hand, is a wasteful bureaucratic merry-go-round that doesn’t work – except on paper.

Darling says “tax is complicated”. Who complicated it? Simplify it by raising thresholds dramatically. Why should people on earnings of less than £10,000 pay any tax? They only have to fill out endless forms to get it back in welfare payments. Crazy. Raising the threshold on the low paid will incentivise people to come off benefits and work. It will reduce the cost of collection which is disproportionately higher on low incomes.

The Tories are too timid, the mood of the public has changed. New Labour has always referred to “unfunded tax cuts” and demanded to know how many hospitals and schools would correspondingly be cut. The Tories should be pointing to Labour’s “unfunded spending commitments” which have given Britain the highest budget deficit in the Western world. We can’t afford Labour’s reckless spending commitments – they are literally mortgaging our children’s taxes to pay for current spending. It is the economics of the “never, never”.

Labour PPC : "Gordon is Giving Me Nightmares"

John Wiseman, Labour PPC for Westmorland and Lonsdale has, writing on LabourHome, candidly admitted that he seems “to be in the middle of a nightmare at present… Everyone seems depressed where I am standing for parliament. Gordon has decided to take money away from his core vote, PPS’s are threatening to resign!! When are we going to wake up!!! There is hundreds of councillors who are going to lose their seats if Gordon doesn’t listen. I am asking please Gordon for the last time wake up and smell the coffee…”
He blames it squarely on the abolition of the 10p tax rate…

Book of the Year

The ConservativeHomies have voted The Triumph of the Political Class their best book for 2007/08. Guido thinks they have made a good choice – the book is spot on. Peter Oborne anatomises a cross-party, parasitical ruling class. The class is personified in the next generation of most likely leaders of the major political parties; Clegg, Miliband and Cameron.

With views that are essentially interchangeably metropolitan liberal, all that differentiates them besides the colour of their rosettes is a bit of proportional representation, some income redistribution and a little Euro-scepticism. They are crowded ideologically onto that marginal – voter – friendly, focus-grouped, centre – ground. All went to Oxbridge, all had politico-media-wonkish mini-careers before climbing the political greasy pole.

If you have not read it already, Guido can’t recommend it enough…

Brown at Close Quarters

Fascinating and sympathetic Guardian piece by Tom Clark about what it was like to deal with Brown and the Brownies at close quarters for four years. It confirms a lot of what we have already surmised about the core method of policy development through dithering.

Tom Clark was a SpAd at the DWP and the old DTI hired from the Institute for Fiscal Studies. He clearly admires Brown whilst recognising his faults. Faults that make him unsuitable to be PM. Well worth a read.

+++ Labour MP Arrested +++

Rob Marris, MP for Wolverhampton South West, has been arrested on charges of criminal damage. More from local paper.

Friday Caption Contest (Seeking Something Edition)

[…]

+ READ MORE +

+++ Cable : Clegg’s Position "Unassailable" +++

Vince has just recorded an interview for GMTV, telling Jackie Ashley that the LibDems were not doing well enough. She asked if Clegg’s position was “unassailable”? The ballroom dancing Ming assassin said Clegg was “completely unassailable”.

Be afraid

[…]

+ READ MORE +

Mother of the House Dead

Gwyneth Dunwoody, couldn’t stand her politics, loved her attitude. She was, as all the obituaries say, a New Labour defying parliamentary. She was also a patriotic and principled Euros-ceptic. You don’t see many of them in New Labour.
Mike Smithson

[…]

+ READ MORE +

Setting the Story Straight on Hain’s “Surreal” Conspiracy Theory

Some readers have been asking about the Western Mail story about fake emails where Peter Hain dons the cloak of victimhood and complains of a dirty tricks vendetta against him involving Guido. The story has now hit the news wires.

[…]

+ READ MORE +



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