Parliament's more bust than any bank

You, me and anyone else reading this blog invested almost £16,000 in top British banks yesterday. 

You didn't know?  Me neither, until I read the newspapers.

Perhaps it doesn't feel like you've just spent £16,000.  That's because you've not yet actually paid for it.  No, you'll be doing that for years to come through higher taxes.  And your kids'll probably still be paying for it when they're your age, too.

In order to prop up some basket case banks, the government yesterday injected £50 billion of public money into them.  That's on top of the £200 billion that the government has issued to banks in additional liquidity over the past year. 

Has it solved the problem?  Nope.  And the plummeting markets said as much.  Throwing good money after bad rarely ever does.  No alchemist in the world can turn debt into gold by shifting it from the private ledger to the public sector.

Whatever the rights and wrongs of the government's response, what is appalling is the way that this has all been done by executive fiat.

At no point during this financial meltdown, at no stage before he's handed over massive cheques to the banks, has Alistair Darling been subject to Parliamentary scrutiny.  Indeed, there's been no real debate or vote.

Our supine, spineless House of Commons has failed hopelessly.  It's as credible in this crisis as an Icelandic fund manager.  

In the United States, democratically elected Congressmen debated Hank Paulson's plan.  They threw out the first version, and got brakes and triggers inserted into the second.  Because of that, if the Paulson plan turns out to be as hopeless as some suspect, US taxpayers won't be lumbered with the full $700 billion bill.

Had our only elected legislature the verve to hold government to account, I'd be demanding to know how much taxes in the UK will need to rise to fund this bank bailout.  I ask why banks with healthy balance sheets, like HSBC, are being dragged down by the feckless lenders.  I'd want assurances about what might happen if (when?) the markets take a punt against HM Treasury.

As an elected MP, I can do none of those things.  After three months recess, the Commons has scarcely touched on any of these issues.

It's not just Bradford & Bingley that's busted.  

Posted on 9 October 2008 by Douglas Carswell

Comments

I agree with what you have said but your comments beg the questions of why our party leadership has done almost nothing except agree with government and responded to this crisis as though it has no backbone? What was stopping Cameron and Osborne from asking relevant questions in Parliament even if they supported the Brown/Darling's actions?

Posted on 9 October 2008 13:58 by Adam

Brilliant piece. The voice of the people.

Posted on 9 October 2008 15:05 by John E. Strafford

WE REPRODUCE (FROM TODAY'S CONSERVATIVE HOME) AND RECOMMEND THE COMMENTS BELOW FROM RYAN ROBSON OF SOVEREIGN EQUITY. WE HAVE SAID FOR YEARS THAT SMALL BUSINESS AND HOUSEHOLD KNOW BETTER HOW TO ORGANISE THEIR BUDGETING AND SPENDING THAN GOVERNMENT. NOW IS THE TIME TO LEARN MR BROWN!
" The Government has put the nation in hock to fund policies which have not mended our broken society and have left us in an enfeebled position to help struggling consumers and businesses in a global financial maelstrom.

Whatever measures it announces over the next few days, ministers must answer the central question of how are we going to pay for these rescues. It was the failure to be open and honest which led US voters to view the Paulson plan as a blank cheque for bankers.

There are only two ways in which bail-outs can be funded - higher taxes and lower spending. An economic downturn lowers tax receipts and exerts savage pressures on public spending.The Government needs to send out the clear message that it is going to cut its cloth to meet its reduced means.

This will be a severe shock to the body politic of Labour because it has been on a spending high for a decade. Cold turkey economics could kill the Labour Party but unless the Government acts now then the national finances could be jeopardised for a generation.

Both David Cameron and George Osbourne recognised this stark situation in speeches at the Tory Party conference.

It takes political courage to say the unpalatable and Conservatives are fearful of being labeled as service cutters. Yet the public will respond positively to this message because it mirrors the tough decisions they are having to take in their lives.

Every household and every business is looking at ways to reduce unnecessary spending. The holiday abroad, the new employee were this year's quandries. Next year selling your house or laying off staff could be questions of survival.

Conservatives should lead the way by explaining how Labour's bloated bureaucracy has failed to deliver social justice and weakened the economic security on which all our lives depend.

Moreover, we need to show how we will manage the nation's finances in a downturn by doing what every housewife and small business knows makes sense - plan for the worst and hope to be pleasantly surprised".

October 10, 2008 at 07:19 in Ryan Robson | Permalink

Posted on 10 October 2008 11:46 by THE ESSEX BOYS

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