Gordon’s G20 Plan

Gordon is going to Washington with a few key spin objectives:

  • To present himself as the respected elder statesman of international finance – never mind Sarko’s pretensions.

  • To frame Britain’s problems in an international context. Sterling’s collapse is to be spun as nothing to do with Brown’s bubble.
  • To frame any domestic tax cut U-turn as a co-ordinated international action. This will give him cover for abandoning everything he has told us is important for all his front-bench political life.

Why Gordon thinks it imperative to be portrayed as some kind of respected international finance genius eludes Guido. It won’t save anyone’s job, not even his own.

There is obviously an international angle to the credit crunch, but there are also domestic disasters which happened on his watch.. Sterling’s collapse is not random. Who for instance decided to exclude house prices from the Bank of England’s inflation target which meant we had a ridiculously loose monetary policy?

If the G20 endorses a policy of tax cuts – if – Gordon will have political covering fire to return to Westminster to cut taxes and bugger the deficit. The Pre-Budget Report on Monday week will be his chance to unveil an epic tax-cutting stimulus package U-turn. The Osborne-Letwin* designed response as it stands will be “we shouldn’t be here, you shouldn’t do that”. Preaching fiscal sobriety to the fiscally hungover after the party has finished and the house is already wrecked.

The Tories have boxed themselves into holding to a Brown orthodoxy on tax cuts to which he himself no longer adheres. Time to think outside of the box…

*Letwin’s aversion to tax cuts might have something to do with the 2001 election campaign fiasco when as a junior finance spokesman, he was forced into hiding after disclosing that the Tories had longer-term plans for £20 billion of tax cuts.

Gavyn Davies Advocates Mugabenomics

Some of the more excitable co-conspirators have been warning in the comments on this blog for that Britain is heading the way of Zimbabwe. Guido has until now discounted them as being over the top (yes the comments here do occasionally go ever so over the top).The government’s economic policies do sometimes seem to be a form of voodoo economics involving uncounted debt, faked statistics and ever changing “rules”. Gavyn Davies, a former Goldman Sachs managing director and MPC wise man is close to the Brownies – his wife Sue Nye was Gordon’s diary secretary and is now the Director of Government Relations in Downing Street. So when he advocates, as he does this morning, turning on the printing presses at the Bank of England and just printing more money to solve our woes, you can believe this is being discussed in Downing Street.

Are we now at the dead end of the New Labour era and Mugabenomics is a serious policy option? This is madness.

Gordon Brown Worst PM of All Time for Pension Funds

Alan Layng, a co-conspirator, sent Guido this neat piece of research* :-

I took UK stock market performance since 1902 assuming reinvested income and adjusting down for cost of living to give real terms equity market growth for each of the last 106 years.

I matched this up to the dates of each of the twenty prime ministers who have run this country since 1902 (interpolating to the right dates as required). This gave me a proxy for how much the equity markets had risen (or not) under their stewardship.

From there, it is a small hop to a comparable figure – compound annual growth rates – and, hey presto, we can compare the financial performance of each of prime ministers, and also of the parties, to see if one party has a better long term track record.

It makes interesting reading.

It sure does. It doesn’t even take into account his plundering of pension funds during his Chancellorship. He robbed pensioners by taxing pension funds and he robs children by running up the national debt…

*Historic data taken from 2008 Barclays Equity Gilt study.

+++ BBC Pre-Budget Report Monday November 24 +++

Tax Credit for Breakfast

Dave’s newly announced policy is another welcome help for small businesses, it is not a business subsidy so much as a tax credit, a temporary (only for the duration of the recession) £2,500 tax credit for new created jobs. It will however be restricted to companies that are thinking of expanding, not those thinking of making redundancies. Therein is an example of the trouble with this type of Brown-style micro-tinkering, it is complicated, has loads of qualifications and caveats, requiring small businesses to call their accountant to understand.

This policy idea is, Cameron admitted, more of a think-tank style Pre-Budget Report submission. The Tories like to boast that their policy ideas get nicked by Brown and they get to implement policy by proxy. Gordon has already rejected this one.

So no income tax cut for breakfast, but the Tories were dishing out bacon sarnies as a consolation prize.

Tax Cuts are the New Black

Cable and Clegg are already calling for ’em, Brown and Darling are dumping dogma to talk about helping Britain through the recession with tax cuts, Osborne and Cameron are going to announce their tax relief plan tomorrow. Tax cuts are the new black.

Meanwhile over in Wapping, Danny Finkelstein said yesterday that Guido iseccentric in campaigning for populist tax cuts. Perhaps we have differing definitions of “eccentric”, Guido’s is: unusual or unconventional, a person who has an unusual, peculiar, or odd personality, set of beliefs, or behavior pattern. Now Guido may have been a bit ahead of the curve in advocating a tax cut based package for growth and saying it would be popular. The Fink however believes tax cuts are vote losers – yet the political leaderships of all the parties are now advocating them – why Danny? Who now really holds the eccentric view? Danny has many qualities, but his sense of timing for the political zeitgeist is not one of them. When it comes to political fashion he is what economists would describe as a “lagging indicator” .

Danny says the Tories will be “destroyed” if they advocate tax cuts, that is ridiculous, on the contrary they will be damaged if they do not. It seems to Guido that the Tories have finally realised that Fink is wrong, the old position is not right for now, the voters have moved on. One wonders if Osborne would have reached this point faster without the siren voice of his old friend. Now Nick Clegg, not the Tories, will be able to claim with some justice to have set the agenda.

[Guido also hears that the Speccie will this week be reporting Nigel Lawson claiming that he was misquoted on taxes – he is in favour of an immediate tax cut, so long as it is responsible.]

European Commission Forecasts UK Economy to Fare Worst

Despite Gordon’s claims to the contrary, nobody seems to believe him that Britain is “best placed to weather the global financial turbulence”, not the currency markets, not foreign investors and nor now the European Commission.

The FT reports that the Commission is forecasting EU growth will slow from 1.4% cent this year to just 0.2% in 2009, while the eurozone economy would expand by 1.2% this year and only 0.1% in 2009. Among the EU’s largest economies, the UK would be the worst performer next year, when its economy would contract by 1% the Commission forecast.

Spin that Gordon…

Taxpayers Want Politicians to Share the Pain

The Fink had a go at punk tax cuttersyesterday despite always claiming that he is in favour of lower taxes (in the long term) – it is just that those pesky voters don’t believe politicians who promise them – so don’t promise tax cuts – is his argument. Well a new poll from ComRes suggests he is wrong and that if a credible politician made a credible promise, it would be popular. It found that:

  • 67% of people now think we are paying the price for government overspending.
  • 59% of people agree tax cuts would be a better response to the downturn than increased public spending. Only 18% disagree.
  • 68% supported an immediate and substantial cut in interest rates.
  • 67% agreed that Gordon Brown should take a 10% pay cut.
That last point is interesting, the Irish political class has taken a pay cut, why shouldn’t our rulers* follow suit? Share our pain, consider it pay for performance.

Incidentally, the ever energetic campaigner Susie Squire from the Taxpayers’ Alliance has uploaded her Ask the PM question for Gordon to answer next week:

*With the extended Christmas holiday this year, MPs will work fewer days this year than ever since universal suffrage began. Not as if we have any issues requiring politicial attention is it?

Renegade Economist Called the Bust in 2005

Guido started writing boom to bust pieces in September 2007, Fred Harrison, the Renegade Economist, made his prescient call on the property market in 2005. His 2005 book has just been re-printed, Boom Bust: House Prices, Banking and the Depression of 2010.

[…] Read the rest

+ READ MORE +

Competition :You Do a PMQ and Win Tickets to Frost/Nixon Movie Preview

This could be a lot of fun. Get your webcam out and ask Gordon your question about the economy and upload it to the YouTube Downing Street channel before the close of tomorrow. Then we all go back and vote on which questions Gordon has to answer next week.[…] Read the rest

+ READ MORE +

Pound Collapse Shows Britain Not “Best Placed”

You can’t buck the market someone once said, perhaps that is why every time Gordon and Alistair tell us that “Britain is best placed to weather the global crisis” the pound falls another notch. As you can see from these charts the pound is down 25% against the dollar and the yen in the last three months and over 10% against the euro this year.[…] Read the rest

+ READ MORE +

Tail-End of a Labour Government, Pound Collapses

Government borrowing is at record levels, unemployment is heading towards two million, car workers are on a 3-day week, public sector workers are threatening strikes, nationalisation is back, Deripaska-owned Leyland is even in back the news and we are entering a recession.[…] Read the rest

+ READ MORE +

Credit Crunch : Irish Politicians Lead with Pay Cuts

Hopefully this is another Irish example that will be followed here. The Irish President Mary McAleese has announced that she will be taking a 10% pay cut in light of the current budgetary troubles. The finance Minister Brian Lenihan says he and his ministerial colleagues will also take a 10% wage cut.
[…] Read the rest

+ READ MORE +

Tory Script Includes Dramatic Pause

According to ConservativeHome the Tories have decided that the narrative and the popular perception of Gordon “saving the banking system” is too hard to overcome currently. As head of government Gordon is the financial pilot in the cockpit waving to admirers as he performs acrobatic and risky financial stunts above the heads of the public – who can only hope he doesn’t come crashing down on their heads.
[…] Read the rest

+ READ MORE +

Where’s Our Bail-Out? The Bankers Got Theirs…

Now Brown is bailing out the bankers with the taxpayers money the question Guido wants to answered is: Where is our bail-out?

Billions in future tax payments are being risked to bankers. They are supposed to pay back the debt to the Treasury when things pick up.

[…] Read the rest

+ READ MORE +

Flash Mob Rumour

Don’t know much about this, but keep getting tipped off from different directions. Doesn’t sound like the usual rent-a-crowd of Trots. A disorganised flash mob, no speeches, just show up on the steps of the Bank of England…


UPDATE 17.50 :
From the comments, going around the City:

To all staff in the London Office

We have been informed by the City of London Police that a protest against financial institutions in the City will be taking place from about 3.00 pm till 6.00pm tomorrow.[…] Read the rest

+ READ MORE +



Tip offs: 0709 284 0531
team@Order-order.com

Quote of the Day

Tory MP Stewart Jackson on Bob Geldof:

“Now loudmouth multimillionaire soapdodger Bob Geldof is supporting the LibDem campaign in Richmond Park. Haven’t the voters suffered enough?”

Guidogram: Sign up

Subscribe to the most succinct 7 days a week daily email read by thousands of Westminster insiders.

Facebook

Brexit Book War – Latest Brexit Book War – Latest
Public Heath England Gets Booze Sums Wrong Public Heath England Gets Booze Sums Wrong
Civil Servants Forced to Admit We’re Leaving EU Civil Servants Forced to Admit We’re Leaving EU
Sarah Olney Walks Out of Interview Sarah Olney Walks Out of Interview
DfID Slams Baroness Scotland DfID Slams Baroness Scotland
Ken Aide Says Staff Celebrated 9/11 Ken Aide Says Staff Celebrated 9/11
Highest Ever Immigration Highest Ever Immigration
Mortgage Approvals at 7-Month High Mortgage Approvals at 7-Month High
Whitehall’s Brexit Blooper Whitehall’s Brexit Blooper
Amy Lame Ends Naughty Property Deal Amy Lame Ends Naughty Property Deal
WATCH: Bob Geldof Embarrasses Libdems WATCH: Bob Geldof Embarrasses Libdems
Was Guardian Spoofed by Alt Right Hoax? Was Guardian Spoofed by Alt Right Hoax?
Khan Breaks Fourth Promise Khan Breaks Fourth Promise
Bone Tables Article 50 Bill Bone Tables Article 50 Bill
Corbyn’s Commons Cock-Up Corbyn’s Commons Cock-Up
WATCH: Tom Watson Singing Israeli Celebration WATCH: Tom Watson Singing Israeli Celebration
Hugo Speaks Out Hugo Speaks Out
Baroness Scotland’s Anti Corruption Lecture Baroness Scotland’s Anti Corruption Lecture
BBC Interupts Snooker to Remember Castro BBC Interupts Snooker to Remember Castro
Leadsom Brexit Plans 25 Years Ahead Leadsom Brexit Plans 25 Years Ahead