Britannia Radio

Brown falls back continually on his 'comforter'  averring that the 
Tories would 'do nothing' when he makes use of their suggestions and 
after a fashion tries to use them !   He must know it's untrue and 
that people have worked that one out for themselves!

This posting is largely to do with the fall-out from the IMF's 
devastating report yesterday.
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THE TIMES    29.1.09
Tories taunt Gordon Brown over 'the true cost of Labour failures'

Francis Elliott, Deputy Political Editor

It has been a constant refrain, an accompaniment to every storm 
warning of economic trouble ahead: "Britain is better placed to ride 
out the global downturn than the rest of the world." But Gordon 
Brown's claim was blown away yesterday when the International 
Monetary Fund marked Britain down to suffer a worse recession than 
any other developed nation.

"This is the day when the British people were confronted with the 
true cost of Gordon Brown's failures," George Osborne, the Shadow 
Chancellor, said.

Earlier David Cameron, expecting the IMF's devastating prediction, 
tried to force Mr Brown to recant another mantra: that he had 
abolished boom and bust. In preparing for Prime Minister's Questions 
the Tory leader and his Shadow Chancellor knew that Mr Brown faced a 
day of reckoning. They had in front of them a second report, from the 
Institute for Fiscal Studies (IFS), predicting that public sector 
debt would not return to pre-crisis levels for more than 20 years.

Mr Cameron also had a transcript of Mr Brown's appearance before the 
Treasury Select Committee from 2002 at hand when he rose to the 
dispatch box. The Tory leader confronted Mr Brown with his own 
definition of a "bust" as being when the economy had shrunk by more 
than 1.5 per cent. "Will he finally admit even on his definition, 
that something every economist, every business, every family in the 
country knows to be true: he did not abolish boom and bust?"

He may not have had a direct answer but the question gathered force 
when, about 2.30pm, the details of the IMF report predicting that 
Britain's economy would shrink by 2.8 per cent became public. This 
was in stark contrast to Alistair Darling's forecast in November of a 
contraction between and 0.75 per cent and 1.25 per cent.

Mr Osborne said that it might be a bad day for Mr Brown but it was an 
even worse day for the country. "Gordon Brown cannot answer the 
simplest question of all: if Britain is well prepared, as he claims, 
why are we facing the worst recession in the world? Let us hope these 
forecasts are wrong but, if they are not, Britain is set to endure 
the worst downturn of any major country and the worst year for the 
economy since 1948."

Vince Cable, the Liberal Democrat economics spokesman, said: "This 
report exposes Gordon Brown's lie that Britain is well placed to deal 
with the recession. Huge levels of personal debt and overreliance on 
the financial sector has made this country vulnerable."

Downing Street insisted that the Prime Minister remained confident 
that the right action was being taken. Countries such as Japan and 
Italy were forecast to suffer deeper and longer recessions than Britain.

Mr Brown's spokesman added: "Obviously those countries that are going 
to be hit particularly hard will be countries with large financial 
sectors but the question is what do you do about that? The Prime 
Minister is absolutely confident . . . that the Government's plan for 
stability and recovery . . . is the right approach, the right plan, 
and it is in line with the approach of every other major economy."

Earlier Mr Brown accused Mr Cameron of being alone in wanting to do 
nothing to resolve the crisis and said that the IFS had concluded 
that his approach was working. "Can I just quote from the IFS Green 
Budget . . . 'our central forecast is that the UK will avoid deep and 
prolonged recession thanks to the enormous monetary and substantial 
fiscal stimulus already agreed'," he said. "If we had taken your 
advice and done nothing it would have been a deeper recession."
========================
TELEGRAPH   29.1.09
1. FACTS MAKE FICTION OF BROWN'S DEBT BOAST
What ever happened to Prudence? Remember her?

By Richard Fletcher

In the 1990s she was the trusty companion of our then Chancellor, 
Gordon Brown, who could barely utter a sentence without mentioning 
her name.

Prudence was, of course, abandoned by Brown almost the moment he 
stepped over the threshold of Number 11. Nevertheless she still 
warranted 12 mentions in the 2000 budget. By 2002 that had halved and 
the poor girl was mentioned just twice in 2003.

It would be difficult - even for Gordon Brown - to mention Prudence 
today.
The Institute for Fiscal Studies on Wednesday laid bare the dire 
state of the national finances.

Katie, my 18-month old daughter, will be graduating from university 
by the time our national debt returns to pre-recession levels, 
according to the gloomy forecasts from IFS. Like the Treasury Select 
Committee the IFS appears to have little faith in the government's 
forecasts.

The report's language was as diplomatic as the select committee, 
which warned in a separate report yesterday that the risk to the 
Treasury's forecasts was on the "downside".

But the message was the same: the government's growth forecasts are 
optimistic. The Chancellor and Prime Minister may believe that we are 
nearing the end of the recession, but nobody else does. What would 
Prudence say if she was still around?

The result, of course, will be that our national debt looks set to 
spiral even higher under Brown. The IFS expects it to peak at 60pc of 
national income.
One of Brown's proudest boasts as chancellor was that he reduced the 
level of indebtedness. The facts say otherwise.
============AND   ------->
2. Britain risks gilts strike, OECD warns
Britain risks a funding revolt on the global bond markets unless it 
manages to restore financial confidence in short order.

By Ambrose Evans-Pritchard in Davos

"The markets are going to set the limit to all this borrowing, and 
I'm afraid they're not going to wait a long time," said Angel Gurria, 
the OECD's secretary-general.

"Yes, the UK is right to do whatever it takes to stabilise the 
banking system now, but there needs to be a clear exit strategy when 
you are dealing with numbers that big," he told the Daily Telegraph. 
"There has to be a credible policy in place so that people can see 
that this fiscal stimulus money will be paid back after the crisis," 
he said.

Mr Gurria said German chancellor Angela Merkel had set the standard 
by calling for a balanced budget amendment to maintain credibility 
after Berlin's latest ?50bn stimulus package.

Britain's budget deficit is approaching 10pc of GDP, the highest of 
any major economy and far above the historic danger threshold. The 
rating agencies expect the UK's national debt to jump from under 
around 45pc of GDP to nearer 70pc by 2011 - a rise typically 
associated with war-time spending.

Mr Gurria praised the British government for tackling the crisis head 
on. "At least this is being ventilated very openly, by ministers 
first and foremost."
The US also needs to fund a huge deficit but has the advantage of 
controlling the world's reserve currency, and its bank liabilities 
are almost entirely in US dollars.

"They can always face the music by printing more dollars. But there 
is no doubt that the US government is going to take a large share of 
private savings, and that will `crowd out' the bond markets. They 
will have to pay more to borrow," he said.

Mr Gurria said there is no danger yet that the huge infusions of 
liquidity by governments will fuel inflation.
"The liquidity is not going anywhere. It is being parked back at the 
central banks in overnight deposits, at a loss. The fundamental 
market for interbank lending has stopped," he said.

===========================
ECONOMIC 'Shorts'   28.1.09

TELEGRAPH
=BP sees crash in oil demand, OPEC behind curve
The recession is likely cause a deeper slump in demand for oil this 
year than recognized so far by OPEC, says BP's chief executive Tony 
Hayward.
29 Jan 2009
=One £1 coin in 40 is a fake
Counterfeit £1 coins are circulating in the economy in their highest 
numbers since the coin was introduced to the UK.

TIMES
= AstraZeneca to cut more jobs despite profit rise
Drugmaker expects to make a further 6,000 redundant in next four 
years although it raises dividend on a 12% profit boost
=Annual house prices plunge 16.6 per cent
Nationwide says buyer inquiries are growing, but stagnant rates of 
mortgage approvals are hurting the housing market
=Opec pledges to push oil back above $50
Head of the oil-producing cartel says it is not worth bothering to 
export oil for less, and hints at more production cuts


FINANCIAL TIMES
=Peer under pressure after bill killed
An attempt to tighten rules governing the promotion of unhealthy 
children's food was brought down in the House of Lords after 
"vociferous" opposition from a peer who speaks for the advertising 
industry -
=Ministers warned on spending freeze
Some of Labour's key ambitions to transform society look to be 
increasingly unattainable because of planned spending freezes, the 
Institute for Fiscal Studies said
=UK tax change raises fears for port jobs
Government tax increases have aggravated the effects of recession in 
some of the UK's poorest areas, throwing hundreds of people out of 
work, campaigners say

BBC ONLINE
=
WALL STREET JOURNAL

STANDARD
=CABINET minister Jack Straw faced questions today over a donation 
from a Saudi-backed firm.
The Electoral Commission was urged to investigate whether the £2,000 
gift to his 2005 general election campaign was lawful.

GUARDIAN
=Lord Truscott stands down as energy company adviser
Lord Truscott, the former Labour minister at the centre of 
allegations about "cash for amendments", has resigned from a 
multinational energy company that hired him as a consultant.

SKY NEWS
=House prices fell by 1.3% in January, according to figures from 
Nationwide.
The average price of a typical house is £150,501, down 16.6% on the 
same time last year, according to the building society.
It is the 15th consecutive month that prices have dropped, with 
January seeing £2,500 in value shaved off the average home
=London Underground has announced it is cutting 1,000 jobs this year.
London Underground employs about 20,000 staff in all
But Transport for London said no Tube drivers or front-line staff 
would be affected and the losses would mainly come from non-
operational areas including finance and administration
=========================
POLITICS HOME    28/29.1 09
COMMENTS
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Sky News at 15:17
Cable: Bailing out particular industries "dangerous"

Vince Cable, Liberal Democrat Treasury spokesman

Mr Cable said that the government proposals to offer help to the car 
industry were based on a "dangerous" concept.

"I'm opposed to the whole principle of general bail out of particular 
industry," he said.

"This whole concept of picking winners with some industries good and 
some industries bad is very dangerous. how do you make that 
distinction?" he added. " If we bail out the car industry why not 
caravan makers in Hull?

He said instead the government should be concentrating credit 
functioning properly again.

"The problems are very deep there a very, very serious problems in 
the banking system. The banks are simply not lending," he said.

15:25 BBC News

Shortly afterwards, Mr Cable accused the government of being 
complacent about during the economic boom prior to the recession.

"It was very artificial and as a result although all countries are 
caught up in this world recession the British problem is going to be 
much more difficult," he said.

"The government has been complacent for some years about the build up 
to this crisis and the Tories didn't spot the problem either."

He also said that now the economy was in recession, the government 
were not being realistic about the its severity.

"Ever since this recession has broken they've been trying to make us 
feel optimistic by underestimating the scale of the problem," he said.

He added: "A certain amount of realism is required and the government 
is not being realistic
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BBC News at 16:05
Timms: Economy forecasts are "extremely volatile"

Stephen Timms, Financial Secretary to the Treasury

Following the release of figures by the IMF, Mr Timms said that by 
the IMF providing information on the whole world's growth shows how 
this is a global economic situation.

"What we've been underlining is the fact that UK debt is low compared 
to other advanced countries and we are able to borrow.

"This morning's figures predicted a much smaller contraction. All of 
this is extremely volatile, what we're focusing on is supporting the 
economy through this very difficult time.

"What the IMF is saying is that the UK economy will grow next year, 
the precise point at which growth will resume is not clear right now.

"The right focus I think is the one we are applying which is to 
support the economy through what I think will be a difficult few 
months."
=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-
BBC News at 17:21
Clarke: Government is burning money on failed schemes

Ken Clarke, Shadow Business Secretary

Mr Clarke said the "only answer" to get the economy going again is 
for the government to concentrate on getting the markets moving with 
properly constructed guarantees.

"Less than twelve months ago the line for Ministers was to deny we 
were facing a downturn at all - I had hoped today's exchanges in PMQs 
and the results from reports would bring an air of reality.

"We have dreadful public finances as Gordon accumulated debt at a 
time when our economy was growing.

"I think the reality means the government is burning more money on 
schemes not working to get lending moving again. They've finally told 
Mandelson he can't get the car bailout.

"We have to get banks in the position for them to allow ordinary 
lending again, what is left of what they haven't blown should be 
concentrated on that."

17:39 Sky News

Speaking shortly afterwards Mr Clarke said that the government must 
concentrate "what little bit of firepower we've got left" on getting 
credit moving in the economy.

  "You've really got to get it right this time which is concentrating 
on helping the person who could afford mortgages and raise a deposit, 
the person that could afford the hire purchase, the business that 
could afford to invest," he said.

He said public finances meant there was a limit to what the 
government could do and urged the Prime Minister not to pledge more 
money for a car industry bail out.

"We do have to try and get him to stop pumping more money into the 
economy," he said.

He added: "There's a limit to what you can do for a vital industry 
for the industrial midlands and elsewhere".

19.10 Channel 4 News

Mr Clarke reiterated his criticism of the Labour Government's 
handling of the economic crisis following the news released by the 
IMF the UK economy will shrink by 2.8% this year.

In response to the UK economy shrinking more than the Eurozone and US 
economies, he said: "We had the worst housing bubble of anyone in 
Britain... Gordon Brown, as Chancellor of the Exchequer allowed the 
debt situation to get out of control in the good years, now we have 
no firepower to deal with our situation now.

"Britain is the one who can't afford fiscal stimulus. Britain can 
look at it, but it can't afford it," he said.

On whether the Conservatives were proposing a 'do-nothing' policy, he 
said: "We've already seen billions of pounds of money burnt away in 
trying to get our credit working.

"We advocated bank recapitalisation before the Government came round 
to it, we advocated a loan guarantee scheme before the Government 
came round to it.

"But now we have toxic debts... we have to let the banks make a 
commercial judgement only to lend to those businesses who can afford 
it, and provide mortgages to families who can afford it," he said.