Sadly this is an example of why the sobriquet Osbrowne is deserved. Creating new off balance-sheet liabilities to pump up a ludicrously inflated housing market is pure Gordon Brown.
Would you like to bet on whether central government current expenditure (as measured by the ONS) is higher in real terms in the fiscal year 2012-3 than 2011-12?
Doesnt that rely at least in part on the dubious accounting Osborne engaged in to massage the figures? Accounting which, in itself, probably misallocated resources. Yes, wasting money just to pretend a fiscal target has been met. How very Brownite!
The Central Government Current Expenditure account is quite clean, Neil.
And even an arch opponent of the Coalition government would have to accept that George and, in particular, Danny have got a very impressive control of discretionary departmental expenditure.
There is a good chance that this fiscal year's expenditure will even be lower than last in nominal terms, but that will rely on the March figures being as good as January's and February's.
The "dubious accounting" accusation, if it applies at all, is relevant to the net borrowing stats, where the actual figures are very much better than those being reported in the media:
For the period April 2012 to February 2013, the public sector net borrowing, excluding the temporary effects of financial interventions (PSNB ex), was £66.9 billion, which was £37.3 billion lower than in the same period of the previous year, when PSNB ex was £104.2 billion.
For the impact on public sector net borrowing (PSNB ex) of events such as the transfer of the historic liabilities and some of the assets of the Royal Mail Pension Plan and the transfer of cash from the Bank of England Asset Purchase Facility (APF) see the “Key measures” section in this bulletin.
In 2011/12 the public sector net borrowing, excluding the temporary effects of the financial interventions (PSNB ex), was £120.9 billion, which was £20.0 billion lower than in 2010/11, when PSNB ex was £140.9 billion. The £20.0 billion drop in PSNB ex between 2010/11 and 2011/12 is composed of a £9.8 billion reduction in net investment and £10.2 billion reduction in the current budget deficit.
It is odd that George is not getting credit for cash savings from non-recurring sources. I accept that the ongoing figures should be transparently stated. However, It is overall borrowing costs which are critical and the extraordinary measures, which will increasingly include the proceeds of assets sales, reduce borrowing cost as much as cuts to ongoiing expenses. Which is why all companies with cash problems start by selling their head office and profitable but not core business subsidiaries.
The 5% cut in the top rate will kick in very soon, but Labour are going down in the polls.
Coincidence? Probably
Only probably Nigel?
*chortle*
That labour set an elephant trap was obvious. So the master strategy was to blunder into it while shouting "we're all in this together". The result was a roughly 10% labour lead that shown no sign of disappearing even with this current poll.
If you want to seriously tackle the incompetence problem then you aren't going to do it by ignoring Osbrowne and pretending he's not the problem. Sooner or later Cammie is going to seal the tories fate. If he puts chum before party and keeps Osbrowne where he is then you not only have his AAA master strategies dragging you down (like cutting the tax for the richest during austerity or spreading rumours about a Theresa May leadership challenge) you're also not going to have anyone credible hammering labour on their past record.
It's Cameron's choice and right now the tories have no other big moves they can make to stop the rot and start to turn it all around. The obvious idiocy of trying to outkip the kippers is just yet more proof that Osbrowne's many master strategies are simply incompetence.
Incredible lying and smearing from everyone's favourite Mayoralty flop
Siobhan Benita (@SiobhanBenita) 25/03/2013 23:13 #newsnight true Farage on show this evening blaming people who eat "ethnic food" and let their children "mix and mingle" . I kid you not.
Avery, I cannot tell you how disappointed I am to see you applauding this jiggery-pokery. Standards have dropped since you returned north of the river.
Neil, if only "jiggery-pokery" had been properly defined by the UNStats agency and its Eurostat equivalent.
You can't blame George for being ahead of the global powers and trends.
Can I make a request, as this is supposedly an adult political discussion forum can we please avoid the use of pathetic and childish nicknames when mentioning Politicians. You only have to go to any cybernat site to see how much the over use of these insults lowers the tone of the debate. And before the usual suspects on my bingo card jump down my throat, I didn't like it on here when it was Blair/Brown, Campbell or whoever who was being addressed in this manner and said so. Its just puerile.
Post referendum 2014, how do you think the Scottish vote will split in National election 2015 if:
1 Yes has won in 2014 2 No has won in 2014
It's not going to go to the lib dems or the tories, that's for damn sure. The coalition has made certain of that.
The SLAB SNP split is far harder to gauge simply because there is no way of knowing how the scottish public will react to either scenario in a westminster election. It's an unprecedented situation.
Of the few things we have to try and speculate is that the SLAB/SNP voting intentions for the next scottish parliament election are still pointing to an SNP win in the latest polling. Interestingly the lib dems would be all but wiped out with the greens taking their place as the third party in scotland. The problem is that you simply cannot draw a straight line from the scottish parliament to the westminster elections. Even if you could there's no way of knowing how independence or no independence will affect westminster VI.
The short answer is I honestly don't know how the SNP/labour split will shake out in either case and anyone who makes any certain pronouncements that they do is talking out of their arse.
We can do so for the tories and lib dems only because both are very unlikely to be affected either way what with the coalition being the primary focus and their 'selling point' during a westminster election.
Can I make a request, as this is supposedly an adult political discussion forum can we please avoid the use of pathetic and childish nicknames when mentioning Politicians.
Can I make a request for everyone not to laugh when PB tories mention Red Ed, Redward, Crap Ed, or whatever and partisan hypocrites pointedly fail to complain about that. ;D
Can I make a request, as this is supposedly an adult political discussion forum can we please avoid the use of pathetic and childish nicknames when mentioning Politicians.
Can I make a request for everyone not to laugh when PB tories mention Red Ed, Redward, Crap Ed, or whatever and partisan hypocrites pointedly fail to complain about that. ;D
Why do you Cybernats, LibDums, Kippers and RedWardBots use these pathetic and childish nicknames all the time on a grown up politics site?
Wee Cochs never fails to amuse with his bumptious stupidity. He's the lesson that there are far more nutty commentators than even the PB tories favourite Blairite cuckoo, Dan Hodges. Which is no easy task.
Sadly this is an example of why the sobriquet Osbrowne is deserved. Creating new off balance-sheet liabilities to pump up a ludicrously inflated housing market is pure Gordon Brown.
The mortgage guarantee schemes are politically clever and economically justifiable.
One of the most interesting and original moves by a Chancellor in decades.
The schemes should stimulate both general economic confidence and specific construction and associated economic output. Spend from additional household lending will not just pass through to an inflationary consumption boom.
There are risks but the limited period and scope of the stimulus together with the ability of the Bank of England MPC to control overheating through money supply and interest rates mean these risks should be manageable.
Eliminating the deficit and rebalancing the economy is a ten year task. I would far prefer to see Osborne see the task through to a successful conclusion than have his hard work undone by an incoming Labour government.
So if the mortgage schemes buy a second term at the cost of induced feel-good and a manageable mini-boom, this is a price worth paying.
House price inflation and over-valued property assets are a secondary problem. Fix the deficit and get public sector debt down to an acceptable proportion of GDP and then tackling property valuation and household debt can be moved up the list of economic priorities.
"Scottish voters choose independence in 2014 and then vote again in elections in a country they have decided to leave?"
It would be distinctly odd if they didn't vote in elections in a country that they are still part of. Scottish MPs would of course only serve at Westminster for a year or so until independence takes effect.
The key word being decided, not in actuality left yet.
As James points out there is a contingency for just such an option. How that affects the westminster vote is frankly anyone's guess since negotiations will be crucial.
The mortgage guarantee schemes are politically clever and economically justifiable.
One of the most interesting and original moves by a Chancellor in decades.
The schemes should stimulate both general economic confidence and specific construction and associated economic output. Spend from additional household lending will not just pass through to an inflationary consumption boom.
i don't know why I'm reminded of a certain former Iraqi information minister. Still, you do it with such finesse, who can complain.
Is there a case for proposing that the actual strategy is: 1) re-stoke housing with unsustainable lending and dodgy accounting
2) retire to the country.
3) watch as the housing bubble implodes on Labour's watch
"The shadow Chancellor told a meeting of Labour’s ruling body, the National Executive Committee, that commentators were now agreeing with the party’s strategy to continue splurging.
His remarks - highlighted by Labour activist Dan Hodges - are in stark contrast to recent polls, showing a majority still blames the Labour government for racking up Britain’s debt to record levels.
Labour NEC member Johanna Baxter, who took minutes of the meeting, reported: ‘Ed [Balls] took questions on the need for greater clarity re the party’s position on public spending, reversal of the millionaire’s tax cut and the bedroom tax, performance related pay and quantitative easing.
‘He made the point that we’ve changed the terms of the debate - commentators are now asking him whether our proposals will be enough rather than questioning their fundamental premise.’
Mr Balls also warned that he would not make commitments he could not keep in government - suggesting that firm Labour pledges on the economy are some way off. The minutes also revealed that any substantial Labour policies are still 18 months away.
Jon Cruddas, Mr Miliband’s policy co-ordinator, reported that he was ‘six months into the two year Shadow Cabinet policy review process’.
Several sub-committees were examining broad policy areas such as the economy, society and politics."
SIX MONTHS into a two year policy review?!! What the hell has the Labour party being doing for the last three years in Opposition? Cameron launched his policy reviews far earlier than this when he was in Opposition, this is fast becoming a repeat of the Ed Miliband Labour manifesto fiasco before the last GE. So the two Ed's expect to get away with simple opposing everything that the Government is doing for the next two years without offering up any 'official' alternative. Then they hope to unleash a blizzard of policies in a rush just months before the GE? Good luck with that.
The mortgage guarantee schemes are politically clever and economically justifiable.
One of the most interesting and original moves by a Chancellor in decades.
The schemes should stimulate both general economic confidence and specific construction and associated economic output. Spend from additional household lending will not just pass through to an inflationary consumption boom.
i don't know why I'm reminded of a certain former Iraqi information minister. Still, you do it with such finesse, who can complain.
Is there a case for proposing that the actual strategy is: 1) re-stoke housing with unsustainable lending and dodgy accounting
2) retire to the country.
3) watch as the housing bubble implodes on Labour's watch
4) come up smiling in 2020?
I genuinely don't think this is a cynical timebomb strategy predicated on a belief that the Tories will lose the 2015 General Election.
Osborne is confronted with his major export market collapsing; a downturn in the global economy; financial markets waiting to penalise additional borrowing; an inevitably slow domestic economy rebalancing process starting from a relatively small export base; and welfare expenditure which is seen by the electorate as an entitlement rather than the payback of a successful economy.
He needs to do something radical and imaginative to unblock the current stagnation. If he had been elected to a ten year term, he could just continue on the path he has been following. He doesn't have this luxury. The political deadlines are upon him.
This means he needs to take risks. Given the various stimulus alternatives being promoted in the media and by 'Keynesian' economists, the mortgage schemes appear to be the least costly option. Sovereign borrowing costs are unlikely to shoot up, central government expenditure will continue to fall as a proportion of GDP and the export more to BRICS than EU and public to private sector rebalancing can continue.
Of course, increasing household debt and underwriting property valuations isn't ideal, but as a temporary emergency measure, in the political and economic conditions prevailing, it is a risk worth taking, with a hefty political upside.
At least the Mail's Paul Dacre has a willing servant on here. Dacre didn't even have to set up secret meetings to win the scottish tory surger over, like he did with Cammie.
Of course, increasing household debt and underwriting property valuations isn't ideal, but as an temporary emergency measure it is a risk worth taking.
That's like saying that when a boat springs a leak, breaking up the hull in an attempt to fashion a new propeller is a risk worth taking. It's madness because household debt and high living costs are fundamental to the economic stagnation we face.
Of course, increasing household debt and underwriting property valuations isn't ideal, but as an temporary emergency measure it is a risk worth taking.
That's like saying that when a boat springs a leak, breaking up the hull in an attempt to fashion a new propeller is a risk worth taking. It's madness because household debt and high living costs are fundamental to the economic stagnation we face.
Running the economy is not really like riding the waves in a wooden dinghy with single outboard motor and tiller.
It is much more like captaining an ocean going liner where the bridge is full of myriads of dials and switches and screens full of data. Tweak this slightly, compensate by switching that off, check progress on Screen B, rethink, adjust etc.
£130 billion of mortgage guarantees is about 3% of total lending on residential property, so it is not a massive shift of velocity or direction. A nudge maybe rather than a tweak. The liner is unlikely to capsize or hit an iceberg. The worst that might happen is a couple of hours are added to the journey.
There is also room for house prices to recover some of their losses since 2008 without a return to 20% annual house price inflation.
Soft hand on the controls, George, and we may just get to port on time and in tack.
The potential of the mortgage market to help turn the economy was demonstrated today by UK Asset Resolutions. This is the holding company set up by the Treasury to manage the combined mortgage assets of Northern Rock and Bradford and Bingley.
Because none of UKAR, NRAM and B&B take deposits, they are not regulated by FSA as a deposit taking bank and therefore do not need to match the capital adequacy requirements of a full retail bank.
Earlier this year the mortgage books were moved in the National Accounts to the Central Government sector, somewhat hiding their impact on government finances.
Nonetheless, their contribution to the Treasury was announced today:
The UK government has been repaid four billion pounds by UK Asset Resolutions (UKAR), the bank that was established to wind-down the closed mortgage books held by Northern Rock and Bradford & Bingley following their bailout during the financial crisis.
The sum marked a 40% increase compared to that paid by UKAR the previous year, with the rise due to an increase in the company's underlying profit before tax.
Currently, the group, which was established by HM Treasury in 2010, still owes £43.4bn.
This looks like a nice bonus for George and Danny in the last month of the fiscal year.
Handy little business this public sector mortgage lending.
And thst is why test cricket is one of the finest things man has ever devised. No other sport can produce such sustained, gut-wrenching tension.
England have an awful lot of thinking to do. The players and management need to be very honest with themselves. By and large, performances over the last 18 months have been nowhere near good enough.
Comments
Post referendum 2014, how do you think the Scottish vote will split in National election 2015 if:
1 Yes has won in 2014
2 No has won in 2014
And even an arch opponent of the Coalition government would have to accept that George and, in particular, Danny have got a very impressive control of discretionary departmental expenditure.
There is a good chance that this fiscal year's expenditure will even be lower than last in nominal terms, but that will rely on the March figures being as good as January's and February's.
The "dubious accounting" accusation, if it applies at all, is relevant to the net borrowing stats, where the actual figures are very much better than those being reported in the media:
For the period April 2012 to February 2013, the public sector net borrowing, excluding the temporary effects of financial interventions (PSNB ex), was £66.9 billion, which was £37.3 billion lower than in the same period of the previous year, when PSNB ex was £104.2 billion.
For the impact on public sector net borrowing (PSNB ex) of events such as the transfer of the historic liabilities and some of the assets of the Royal Mail Pension Plan and the transfer of cash from the Bank of England Asset Purchase Facility (APF) see the “Key measures” section in this bulletin.
In 2011/12 the public sector net borrowing, excluding the temporary effects of the financial interventions (PSNB ex), was £120.9 billion, which was £20.0 billion lower than in 2010/11, when PSNB ex was £140.9 billion. The £20.0 billion drop in PSNB ex between 2010/11 and 2011/12 is composed of a £9.8 billion reduction in net investment and £10.2 billion reduction in the current budget deficit.
It is odd that George is not getting credit for cash savings from non-recurring sources. I accept that the ongoing figures should be transparently stated. However, It is overall borrowing costs which are critical and the extraordinary measures, which will increasingly include the proceeds of assets sales, reduce borrowing cost as much as cuts to ongoiing expenses. Which is why all companies with cash problems start by selling their head office and profitable but not core business subsidiaries.
*chortle*
That labour set an elephant trap was obvious. So the master strategy was to blunder into it while shouting "we're all in this together". The result was a roughly 10% labour lead that shown no sign of disappearing even with this current poll.
If you want to seriously tackle the incompetence problem then you aren't going to do it by ignoring Osbrowne and pretending he's not the problem. Sooner or later Cammie is going to seal the tories fate. If he puts chum before party and keeps Osbrowne where he is then you not only have his AAA master strategies dragging you down (like cutting the tax for the richest during austerity or spreading rumours about a Theresa May leadership challenge) you're also not going to have anyone credible hammering labour on their past record.
It's Cameron's choice and right now the tories have no other big moves they can make to stop the rot and start to turn it all around. The obvious idiocy of trying to outkip the kippers is just yet more proof that Osbrowne's many master strategies are simply incompetence.
Cameron and Osborne inherited a growing economy, partly because of what Labour had "thrown at the problem".
If that growth had continued Cameron and Osborne's borrowing binge might not have been so bad. And we might have retained our AAA rating.
Siobhan Benita (@SiobhanBenita)
25/03/2013 23:13
#newsnight true Farage on show this evening blaming people who eat "ethnic food" and let their children "mix and mingle" . I kid you not.
You can't blame George for being ahead of the global powers and trends.
So much for most of them opening tomorrow.
I feel this won't put a stop to conspiracy theories.
As there's no such thing as the Scottish Civil Service (alas), it seems unlikely.
And is your request directed to anyone in particular?
The SLAB SNP split is far harder to gauge simply because there is no way of knowing how the scottish public will react to either scenario in a westminster election. It's an unprecedented situation.
Of the few things we have to try and speculate is that the SLAB/SNP voting intentions for the next scottish parliament election are still pointing to an SNP win in the latest polling. Interestingly the lib dems would be all but wiped out with the greens taking their place as the third party in scotland. The problem is that you simply cannot draw a straight line from the scottish parliament to the westminster elections. Even if you could there's no way of knowing how independence or no independence will affect westminster VI.
The short answer is I honestly don't know how the SNP/labour split will shake out in either case and anyone who makes any certain pronouncements that they do is talking out of their arse.
We can do so for the tories and lib dems only because both are very unlikely to be affected either way what with the coalition being the primary focus and their 'selling point' during a westminster election.
Wee Cochs never fails to amuse with his bumptious stupidity. He's the lesson that there are far more nutty commentators than even the PB tories favourite Blairite cuckoo, Dan Hodges.
Which is no easy task.
One of the most interesting and original moves by a Chancellor in decades.
The schemes should stimulate both general economic confidence and specific construction and associated economic output. Spend from additional household lending will not just pass through to an inflationary consumption boom.
There are risks but the limited period and scope of the stimulus together with the ability of the Bank of England MPC to control overheating through money supply and interest rates mean these risks should be manageable.
Eliminating the deficit and rebalancing the economy is a ten year task. I would far prefer to see Osborne see the task through to a successful conclusion than have his hard work undone by an incoming Labour government.
So if the mortgage schemes buy a second term at the cost of induced feel-good and a manageable mini-boom, this is a price worth paying.
House price inflation and over-valued property assets are a secondary problem. Fix the deficit and get public sector debt down to an acceptable proportion of GDP and then tackling property valuation and household debt can be moved up the list of economic priorities.
' Even if you could there's no way of knowing how independence or no independence will affect westminster VI'.
Scottish voters choose independence in 2014 and then vote again in elections in a country they have decided to leave?
It would be distinctly odd if they didn't vote in elections in a country that they are still part of. Scottish MPs would of course only serve at Westminster for a year or so until independence takes effect.
Irony aside, to be fair it's Cameron who most clearly blundered into that by calling UKIP supporters fruitcakes, loonies and closet racists.
No doubt such "pathetic and childish" namecalling was slammed at the time by the resident scottish tory surger.
Or not.
The key word being decided, not in actuality left yet.
As James points out there is a contingency for just such an option. How that affects the westminster vote is frankly anyone's guess since negotiations will be crucial.
Is there a case for proposing that the actual strategy is:
1) re-stoke housing with unsustainable lending and dodgy accounting
2) retire to the country.
3) watch as the housing bubble implodes on Labour's watch
4) come up smiling in 2020?
https://twitter.com/George_Osborne/status/315537546828447744/photo/1
Max Hastings in the Daily Mail - One of the nastiest and most immoral political acts in modern times
Daily Mail - Germany's 'wise men' predict economic powerhouse of Europe will grind to a halt this year
Daily Mail - France has lost ONE MILLION jobs because of repressive tax regime as 60,000 of the country's rich now live abroad, report claims
And finally at the end of this group of articles we have this little gem.
Daily Mail - I've won the argument to spend more claims Balls - despite poll showing just 22% believe Labour have the right ideas
"The shadow Chancellor told a meeting of Labour’s ruling body, the National Executive Committee, that commentators were now agreeing with the party’s strategy to continue splurging.
His remarks - highlighted by Labour activist Dan Hodges - are in stark contrast to recent polls, showing a majority still blames the Labour government for racking up Britain’s debt to record levels.
Labour NEC member Johanna Baxter, who took minutes of the meeting, reported: ‘Ed [Balls] took questions on the need for greater clarity re the party’s position on public spending, reversal of the millionaire’s tax cut and the bedroom tax, performance related pay and quantitative easing.
‘He made the point that we’ve changed the terms of the debate - commentators are now asking him whether our proposals will be enough rather than questioning their fundamental premise.’
Mr Balls also warned that he would not make commitments he could not keep in government - suggesting that firm Labour pledges on the economy are some way off.
The minutes also revealed that any substantial Labour policies are still 18 months away.
Jon Cruddas, Mr Miliband’s policy co-ordinator, reported that he was ‘six months into the two year Shadow Cabinet policy review process’.
Several sub-committees were examining broad policy areas such as the economy, society and politics."
SIX MONTHS into a two year policy review?!! What the hell has the Labour party being doing for the last three years in Opposition? Cameron launched his policy reviews far earlier than this when he was in Opposition, this is fast becoming a repeat of the Ed Miliband Labour manifesto fiasco before the last GE. So the two Ed's expect to get away with simple opposing everything that the Government is doing for the next two years without offering up any 'official' alternative. Then they hope to unleash a blizzard of policies in a rush just months before the GE? Good luck with that.
Osborne is confronted with his major export market collapsing; a downturn in the global economy; financial markets waiting to penalise additional borrowing; an inevitably slow domestic economy rebalancing process starting from a relatively small export base; and welfare expenditure which is seen by the electorate as an entitlement rather than the payback of a successful economy.
He needs to do something radical and imaginative to unblock the current stagnation. If he had been elected to a ten year term, he could just continue on the path he has been following. He doesn't have this luxury. The political deadlines are upon him.
This means he needs to take risks. Given the various stimulus alternatives being promoted in the media and by 'Keynesian' economists, the mortgage schemes appear to be the least costly option. Sovereign borrowing costs are unlikely to shoot up, central government expenditure will continue to fall as a proportion of GDP and the export more to BRICS than EU and public to private sector rebalancing can continue.
Of course, increasing household debt and underwriting property valuations isn't ideal, but as a temporary emergency measure, in the political and economic conditions prevailing, it is a risk worth taking, with a hefty political upside.
as you (almost) say though, it does look like a last roll of the dice...
It is much more like captaining an ocean going liner where the bridge is full of myriads of dials and switches and screens full of data. Tweak this slightly, compensate by switching that off, check progress on Screen B, rethink, adjust etc.
£130 billion of mortgage guarantees is about 3% of total lending on residential property, so it is not a massive shift of velocity or direction. A nudge maybe rather than a tweak. The liner is unlikely to capsize or hit an iceberg. The worst that might happen is a couple of hours are added to the journey.
There is also room for house prices to recover some of their losses since 2008 without a return to 20% annual house price inflation.
Soft hand on the controls, George, and we may just get to port on time and in tack.
Because none of UKAR, NRAM and B&B take deposits, they are not regulated by FSA as a deposit taking bank and therefore do not need to match the capital adequacy requirements of a full retail bank.
Earlier this year the mortgage books were moved in the National Accounts to the Central Government sector, somewhat hiding their impact on government finances.
Nonetheless, their contribution to the Treasury was announced today:
The UK government has been repaid four billion pounds by UK Asset Resolutions (UKAR), the bank that was established to wind-down the closed mortgage books held by Northern Rock and Bradford & Bingley following their bailout during the financial crisis.
The sum marked a 40% increase compared to that paid by UKAR the previous year, with the rise due to an increase in the company's underlying profit before tax.
Currently, the group, which was established by HM Treasury in 2010, still owes £43.4bn.
This looks like a nice bonus for George and Danny in the last month of the fiscal year.
Handy little business this public sector mortgage lending.
Playing for a draw with 35 overs still to survive without losing all 10 wickets.
Bell not out 73 off 266 balls.
237 for 7 just before tea.
England's last chance of a draw looks to be gone.
England have an awful lot of thinking to do. The players and management need to be very honest with themselves. By and large, performances over the last 18 months have been nowhere near good enough.