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…

Another Firm Flees UK Tax Burden

When the odd non-domiciled Labour Party donor threatens to leave the country because of Brown and Darling’s taxes it is unfortunate. When a FTSE 100 corporate giant announces it is to re-register its head office outside the UK for tax reasons it is a disaster for UK plc.

According to London’s City A.M. business paper, the £5 billion Shire Pharmaceuticals is going tore-domicile to Ireland. The company will re-register in Jersey and re-domicile in low tax Ireland, joining a growing number of firms who have relocated away from Britain for tax reasons. Insurance brokers Hiscox and Amlin went to Bermuda. Technology groups Electronic Arts and Yahoo! are off to Switzerland. The truth is the UK’s excessive tax burden is driving high value and high tech businesses out of the country.

The TaxPayers’ Alliance’s Matthew Elliott puts it succintly “This disastrous news confirms that Britain’s competitiveness has suffered a series of blows from misguided tax hikes.” Gordon is destroying the ability of the UK to compete globally.

UPDATE : Shire officially confirms story to the London Stock Exchange.

UPDATE II :
Don’t know how the Guardian will be reporting this, but they have re-located their property arm to the Caymans to avoid tax.

Pound Plunging Means Europhiles Rejoice

This chart makes europhiles moist with excitement…A lot of eurosceptics have a nightmare scenario in which the plunging pound reaches parity with euro. At this point, they believe, swapping pounds for euros would be easier for the political class to sell to fundamentally eurosceptical British voters. It is no big deal the europhiles will claim, “prices will remain unchanged”.
The pound has now plunged to an all-time low against the euro, it bought €1.50 last year and now buys €1.25. At this rate of decline sterling could easily hit parity before the next general election. So a by-product of UK inflation getting out of control, growth faltering and house prices slumping could be joining the European Monetary Union and anchoring our economy to the Bundesbank. You have been warned…

Talking of warnings, only on Saturday Gordon was pontificating that the IMF needed to become “an early warning system”, well yesterday the IMF warned UK house prices could fall 10% this year. Got that Gordon?

The Chancellor’s Unfunded Spending Hikes

Back in 2005 Gordon boasted in his budget of “economic growth for the 50th consecutive quarter” in 2006. The next year he did not subsequently boast of 54 consecutive after Guido pointed out that he was taking credit for the five years of growth under the Tories following White Wednesday in 1992.

The point of Guido giving this background is to highlight that during all this long unbroken period of economic growth, Gordon failed to pay down the government debt – a truly prudent Chancellor would have done it at some strong point in the economic cycle. He did however forecast the budget surplus this year to be of some £9 billion, in fact the budget will probably be in deficit £9 billion. As Michael Fallon points out, despite many predictions to the contrary, the budget has never been in surplus* under this government. Gordon’s imprudence over the last 5 years alone has led to £69 billion in unplanned and unfunded spending hikes. The public sector has been bloated by a governing Labour party beholden to public sector unions for funding.

Who pays for this unfunded spending? Middle class taxpayers of course. The interest on the government’s ballooning debts consumes an ever increasing share of tax revenues. The nationalisation of Northern Rock further smashed the golden rule by £110 billion. We are now heading for G.F.T.** in a weakened fiscal position compared to other major economies. Alastair’s response? The word from the Treasury is that they plan to fiddle the statistics so that the golden rule will magically become unbroken. An illusion that will fool no-one.

Remember this when the new Chancellor talks about budgetary control or prudence in his budget speech. Treat any promises of future surpluses as a bad joke. Any “Green” tax hikes should be seen as what they really are, an excuse to tax the middle classes even more. The truth is Labour’s out of control unfunded over-spending hikes have added to Britain’s economic woes.

The budget should:

  • Focus on a growth-package to boost real incomes based on reducing the tax burden for those on low and middle incomes.
  • A boost for small businesses with reductions in corporation tax to Irish levels (12.5%).
  • A civil service recruitment freeze. We don’t need any more bureaucrats.

Instead we will probably get higher consumer taxes to pay for higher government spending.

*As pointed out in the comments, this is apart from the extraordinary 2001 windfall from the 3G bandwith auction bonanza. A one time bonus never to be repeated.

**Global Financial Turbulence in the vernacular of the Treasury.

Unfunded Tax Cuts v Unfunded Spending Commitments

Yvette Cooper is spinning to all and sundry that the Tories have made £10 billion in unfunded tax reduction promises without “balancing” tax increases. She is briefing that reducing corporation tax to 27% will reduce taxes by £1.75 billion, £3.2 billion will stay in people’s pockets after the introduction of a transferable tax allowance, £3 billion will not be taxed from those getting working tax credit, £2 billion from the abolition of IHT for all but millionaires and £400 million lost to the Treasury and kept by first-time buyers after raising the stamp duty threshold.
Never mind that reducing corporation tax to 27% will still leave the rate 15% above high growth Ireland’s rate and that the extra billions in people’s pockets will be spent in the economy productively and have positive dynamic effects. Osborne has not balanced his budget plans is her central charge.

Guido wants to know about the Labour government’s unfunded spending commitments:These are the figures from the ONS, in 2003 Gordon made unfunded spending commitments of £36 billion, in 2004 £41 billion, in 2005 £38 billion, in 2006 £34 billion. This was during a time of strong economic performance when Gordon should have been paying down the national debt with budget surpluses. His prolific spending meant that he failed to balance the budget.

Last year he smashed the golden rule with £110 billion to be added to the PSBR after the nationalisation of Northern Rock plus the usual annual unfunded overspend of some £40 billion. To which we can add the off balance sheet fiddles like £725 billion of public sector pensions unfunded, not forgetting the £110 billion in payments due to companies in the next three decades under PFI and £18 billion of debt held by Network Rail and the figure is nearer £1.4 trillion, which is well over 100% of GDP. So the amount of unfunded spending commitments has now reached £1.4 trillion. Yvette Cooper is accusing George Osborne of proposing unfunded tax reductions which are small change in comparison.

The Myth of UK Economic Strength

With a week to go before the budget it is worth reflecting on where we are economically. Exactly ten years ago the FTSE 100 stood at 5,782. Last night the stock market closed at 5,767. Investors have seen the stock market and the value of their pensions decline during the ten years of New Labour’s economic management under Gordon Brown. A lower stock market after ten years of Labour government is an incredible indictment.

By comparison the Dow was at 8,569 on March 6, 1998 and last night it closed at 12,213. Up 42% over the same period.

Remember that next time Gordon or Alastair claim that “Britain is stronger placed to weather the coming global financial turbulence”. Complete fantasy.

UPDATE 09.05 :

Given some are suggesting it is currency related, broadening the comparison:

The Great British Economic Miracle: The Land of George Bush’s Tax Cuts: Workshy Cheese Eating Surrender Monkeys: Merkel’s
Tax Cutting Social Market Economy:
Chinese “Communists” with 16% Income Tax:
FTSE 100 on 6 March 1998:
5782
Dow Jones on 6 March 1998:
8569
CAC 40 on 6 March 1998:
3875
DAX on 6 March 1998:
5097
Hang Seng on 6 March 1998:
11519
FTSE 100 on 5 March 2008:
5767
Dow Jones on 5 March 2008:
12213
CAC 40 on 5 March 2008:
4676
DAX on 5 March 2008:
6545
Hang Seng on 5 March 2008:
23120
Growth: -0.26% Growth: +42.53% Growth: +20.67% Growth: 28.41% Growth: 100.71%

Hat-tip : Free Britannia and table courtesy of Spokey in the comments

EXCLUSIVE : The Numbers Are InThe Myth of the “Quality Loan Book”

Alistair Darling and Gordon Brown chant the same mantra, the government’s investment is backed by the assets of the bank, “a high quality loan book”, which they claim has been verified by the FSA – as if the FSA employs surveyors and has the competence to take a view. Anecdotaly this untruth was unraveling, Anatole Kaletsky said this week that it was a delusion to believe that “Northern Rock had a “sound book of assets” when it was the country’s biggest lender of mortgages worth more than the houses on which they are secured.” Guido now has the hard numbers to prove it:These figures were compiled yesterday and are taken from analysis of the Courts Service, Possession Claims Online Database. Guido has obtained the list of 690 individual Northern Rock Possession Claims, averaging some 40 every working day. Of all mortgage lenders Northern Rock has the absolute highest rate of possession claims. Hardly evidence of a sound loan book…

UPDATE : As of midnight last night Northern Rock has withdrawn from offering 125% mortgages.

UPDATE :
In the comments a co-conspirator has made an effort to normalise the results by market share using market leader HBOS against Northern Rock:

HBOS has 20.4% of the market, with 520 reposessions in Feb = 25 repos per 1% of market

Northern Rock has 7.2% of the market, with 690 reposessions in Feb = 95 repos per 1% of the market.

In short, Northern Rock repossesses almost 4 houses to every one repossesed by HBOS, when market share is factored into the equation.

Hat-tip : HousePriceCrash.co.uk via LabRat

Granite’s Lawyers Boast of “Socialist Model”

Angela Clist is the mega-bucks partner at City lawyers Allen & Overy who advised Barclays and Merrill Lynch on the establishment of Northern Rock’s £20 billion mortgage-backed note programme, “Granite Master Issuer plc”.

In a tombstone note to clients she boasts that

The Granite Master Issuer plc securitisation restructured the existing Granite RMBS master trust, with cashflows being changed from a “capitalist” to a “socialist” model to simplify the addition of new tranches of debt from a single issuing vehicle.

How prophetic of her…

Hat-tip : BOF2BS gets sent a well deserved T-shirt for this tip.

Government to Make Darren Minnikins Homeless

In Bishop Auckland right now the “People’s Bank” is attempting to make Darren Minnikin homeless.

Claim 8PA12900:
Northern Rock plc versus Mr Darren Minnikin

Congratulations Mr Minnikin. You are the first victim of socialist economics today…

Whose Home Will Brown & Darling Repossess First?

Right now, across the land, stringers for tabloids are looking for the first tragic but photogenic family to have their home repossessed by “the people’s bank”, Northern Rock. They will be the poster family for this whole incompetent mess.

As Goldman Sachs walk away laughing after offering counsel that will have earnt them a fee not unadjacent to £10 million for advice that Vince Cable offered for free, Tom Scholar,* Gordon Brown’s former private secretary, joined the board of the people’s bank yesterday from the Treasury. He will be not just the eyes and ears of Darling and Brown but the one who casts their vote. So much for an “arms length” relationship…

Home repossessions are already up 94% since Labour ran this poster during the 2005 general election campaign. Now the government won’t just get the blame for rising home repossessions, it will actually be repossessing homes. The state will then of course be obliged to re-house them. Welcome back to the world of socialist economics…

*The girls in the typing pool at Northern Rock should be aware that he follows in the tradition of former CEO Adam Applegarth’s hands-on management style.

The Mail on Sunday’s frontpage reports that the Ed Balls has come up with a plan to plug Brown’s black hole in unfunded public spending. Issue Sharia Law compliant “sukuks” designed to allow the government’s Debt Management Office to raise money from the Saudis:

Britain is to become the first Western nation to issue bonds approved by Muslim clerics in line with Sharia law, which bans conventional loans involving interest payments as ‘sinful’.

The scheme would mark one of the most significant economic advances of Sharia law in the non-Muslim world.

It will lead to the ownership of Government buildings and other assets currently belonging to British taxpayers being switched wholesale to wealthy Middle-Eastern businessmen and banks.

Such is the parlous state of the public finances that the Treasury can no longer rely on the centuries old method of financing government debt, demand for Gilt edged securities. No Western nation has ever relied on Sharia financing and the U.S. Treasury bans banks from engaging in the practise because of potential links to Middle Eastern terror financing. Ed Balls first came up with the Sharia sukuk strategy when he was Gordon Brown’s Treasury SpAd and final consultation on the plan closes this Thursday. Alistair Darling is expected to give full approval for H.M. Sharia Treasury issues before the March budget…

Repossessions Surge :Remember this 2005 Labour Party Poster?

Repossessions are up 94% since Labour ran this election advert…

Mervyn King : “We Are F**ked”

Yesterday Mervyn King said the Bank of England’s predictions for growth in yesterday’s inflation report were “not inconsistent” with two quarters of zero or negative growth – the economist’s technical definition of a recession. For a central banker, that is strong language.

Meanwhile on planet Brown the Chancellor, Alistair Darling, claimed yesterday that “the fundamentals of the British economy are strong because of what we have done over the last 10 years. They will remain strong…. because of the robustness of our economy, I am confident that we can return to growth and we can keep inflation down to target.”
In reality inflation is now higher than in 1997 when Gordon took over, the ballooning budget deficit is 2.8% – the largest in Western Europe and nearly triple the pan-EU deficit average of 1.1%. Real incomes are now falling…

The Citizens Advice Bureau has just released a report which says “The number of county court actions for mortgage and secured loans has also risen steeply over the last few years. Between 2004 and 2006, the number of mortgage possession claims has increased by nearly 70% and the number of possession orders actually made by 94%. The number of possession actions in 2006 is now similar to that seen at the beginning of the mortgage repossession crisis in 1990.” Somebody should dig out that old Labour Party general election poster which blamed house repossessions on Hague and Portillo, changing the pictures to Brown and Darling. So much for an end to boom and bust…

UK Government Bails Out Less Indebted Liberia

Guido gets Treasury press releases, yesterday one caught his eye:

UK helps Liberia take big step towards debt clearance
The UK today assisted Liberia in taking a big step towards poverty reduction by helping it clear the arrears on debt it owes….

Alistair Darling went on to boast about how great this was for Liberia, which he described as a “HIPC”, a Heavily Indebted Poor Country. The 3 million inhabitants of Liberia have a government debt of $4.5 billion dollars, some £2.3 billion pounds or £767 per head.

Yesterday the ONS added £52 billion to the PSBR for Northern Rock taking the government’s admitted debts to 42% of GDP, busting Gordon’s already fiddled 40% golden rule. Gordon claims government debts stand at £536 billion, add in his off balance sheet fiddles like £725 billion of public sector pensions, £110 billion in payments due to companies in the next three decades under PFI and £18 billion of debt held by Network Rail and the figure is nearer £1.4 trillion, which is well over 100% of GDP. Now add on the private debts of credit card maxed-out Britons and the total debt is something like £2.7 trillion. Over £100,000 per household in Britain.

Which makes it seem very odd that Alistair Darling is bailing out the heavily indebted poor Liberians who have a tiny fraction of the debts that Labour has run up for Britons.

Northern Rocky

Stolen from : Channel 4 News

UPDATE 30 January 2008 : Seems that the humorous “Stolen from” reference has set someone off – for the record, Channel 4 News have given written permission for the occasional use of artwork on condition that they get a back-link.

The Coming Economic Downturn

Just flicking through this morning’s Pink ‘Un must be grim reading for Darling and Brown:

UK home affordability hits 15-year low

Decline in UK confidence hits hiring

UK producer price inflation hits 16-year high

The authoritative investment bank Morgan Stanley is now predicting a U.S. recession next year. Given that the British economy is debt-bloated and during the feast years Gordon just splurged on more spending rather than putting something aside for a famine, the U.K. economy is heading for a very hard-landing next year. The Tories will be very glad that Gordon didn’t call that election. Happy Christmas…

No Boom. Just Bust.

The latest insolvency figures are out. Gordon has certainly put an end to the boom, just not so sure about the bust. Is it a prudent moment to put £30 billion of public money into Northern Rock’s mortgage risk as property prices turn down?

Today’s Bank of England interest rate cut is a vote of no confidence in the economy…

Northern Rock Contagion, the Wheels are Coming Off

Buy-to-let lender Paragon Group, slumped 36% yesterday, plummeting for a second day, making the stock down 68% in the past month. Sub-prime fall out is spreading…


FACTS :

Every week 2,000 people go bust, triple the rate during 1991 recession.

Home affordability is at a historic low.

Brown’s supposedly successful stewardship of the economy was based on debt and mirrors.

The wheels are coming off the economy, Alan Greenspan himself, recently appointed by Gordon Brown as his economic adviser, says “Britain is more exposed than the United States.”

Northern Rock CEO Sold Millions in Shares Before Collapse

Adam Applegarth did pretty well out of Northern Rock shares in the year before it collapsed. He has trousered many millions over the years, allowing him to enjoy an Aston Martin with a Ferrari for his missus parked in the driveway of his mansion. His confidence in his bank’s business model long term is demonstrated by his selling of £1.5 m of shares in two days. (25 Jan 2006 sold 52,253 at 957p for £500,061.21 and the next day he sold another 111,426 at 957p for £1,066,346.82).

His faith in the business was shown by his purchase last April of just 262 shares worth a little under £3,000. Not a lot of faith in the business from the boss was there?

Enron’s crooks were massive financial supporters of the Republican party. Northern Rock gave half-a-million to Labour’s favourite think-tank, the IPPR. It also employed Gordon’s personal pollster, Deborah Mattinson, as an adviser. Of all the pollsters to seek advice from, why her? Why give money to that think-tank? Nowadays it is very rare for publicly quoted companies to make politically partisan donations.

Gordon’s Favourite Banker Resigns

Adam Applegarth, chief executive of Northern Rock has finally resigned as has non-executive director, Derek Wanless (pictured), Gordon Brown’s favoured and most trusted banker.

It turns out that the chief-exec sold over £2.6m of shares at peak prices while still urging thousands of employees and investors to buy shares when the company was facing trouble.

[…] Read the rest

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Alan Sugar on Jeremy Corbyn:

“It’s clear you alluded to students refunds to get votes from young impressionable people. You are a cheat and should resign.”

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