Britannia Radio

The Sun picks up two gloomy forecasts from government ministers.  In 
fact they are not quite as gloomy as most

Then the FT gets hold of Nick Clegg, the LibDem's leader and 
persuades him to parrot the FT line about the pound and the euro.  If 
he'd consulted his own finance specialist and spokesman, Vince Cable, 
he'd learn that far from 'anchoring' the pound it could finally 
strangle Britain altogether.  About the only thing that has been 
going our way has bee n the effective devaluation of the pound.  
Spain hasn't got that opportunity - because of being i n the euro.  
Ireland suffered catastrophe for the same reasons and Greece is being 
crucified by membership.  But, Heigh-Ho!  It gets him a mention in 
the press when his party is suffering a massive 'squeeze' in the 
opinion polls.    Then his whole political stance in the addendum to 
the interview shows a detewmined lack of any sense of reality!

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   21.1.09

Banking crisis to last 10yrs

By GRAEME WILSON, Deputy Political Edit

BRITAIN'S banking crisis could last as long as a DECADE, a minister 
has warned.

The bleak message came as the Government admitted there is no 
prospect of an upturn in the jobs market.   Treasury minister Lord 
Myners said controversial plans to insure billions of pounds of 
"toxic" or bad debts held by the banks could last years.

Asked about the length of the taxpayer-backed insurance schemes, he 
declared: "We are probably talking about a policy duration of no 
fewer than five years and probably no longer than eight or nine years."

Gordon Brown admitted on Monday he does not know how much toxic debt 
taxpayers will have to insure.

But experts fear the unprecedented proposals could leave the taxpayer 
liable for more than £200billion of bad debts.

Consequences
Respected Lib Dem Treasury spokesman Vince Cable said: "The taxpayer 
will face the consequences of this bailout and its huge risks for a 
decade.  "This will be a massive shock to those who thought the folly 
of the bankers would be quickly sorted."

The Prime Minister's official spokesman last night tried to play down 
Lord Myners' comments.   He said the PM had promised these would be 
"temporary" measures but added: "I'm not going to put a timescale on 
this."

Employment minister Tony McNulty added to the gloom by admitting the 
jobs outlook is increasingly bleak.    Asked about the prospects for 
millions of workers, Mr McNulty told the BBC: "In terms of the jobs 
market do I see any hope for an upturn over the next few months? I 
have to be as candid as I can and say, no I don't.   Things will get 
worse before they get better in the employment field."

The Tories said people would be shocked by Lord Myners' comments.
Shadow Treasury chief secretary Philip Hammond said: "Taxpayers have 
a right to know the scale of the commitment the Government is making 
on their behalf. Most people do not regard a nine-year commitment as 
'temporary'. So who is telling the truth - Lord Myners or the Prime 
Minister's spokesman?"

Experts forecast job figures out today will show unemployment has 
climbed above two million for the first time since 1997.  [up to 
November only it's 1,92 million -cs]

Around 1,000 jobs were cut by UK firms yesterday - with clothing 
company Burberry axing 290 staff while food firm Vion said 470 jobs 
would go at plants in Suffolk, Yorkshire and Scotland.
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    21.1.09
Euro could 'anchor' economy, says Clegg
By Alex Barker and George Parker

Britain must prepare to ditch the pound and join the euro in order to 
salvage the public finances and prevent the "permanent decline" of 
the City, Nick Clegg, Liberal Democrat leader, said on Tuesday.

Predicting that debate over the euro could soon return with a 
vengeance, Mr Clegg argued that joining a "major reserve currency" 
would protect Britain from its "extremely dangerous" exposure to 
volatile global capital flows.

In an interview with the Financial Times, he said public opinion 
could "turn on its head" and swing against the pound as the "sheer 
brutality" of the crisis prompted the public to yearn for the 
stability offered by the eurozone.
"In that context of people just longing for clearer rules, for 
reliability, for stability, for certainty, you might just find that 
becoming part of the reserve currency on our doorstep might become 
part of the recipe . . . by which we put the British economy back 
together on a more sustainable footing."

The Lib Dem leader's attempt to put the euro back on the Westminster 
agenda is likely to be seen as a nuisance by nominally pro-European 
ministers and as a red rag to eurosceptic Conservatives. Polls still 
show the public staunchly against joining the single currency, in 
spite of the recent plunge of the pound.

Mr Clegg's enthusiasm for the euro could cause problems for the Lib 
Dems as they prepare for the European elections in June. While the 
party is the biggest cheerleader for the European Union in the 
Commons, there are internal divisions over how loudly to express 
their passion for the European project.

Mr Clegg says he is not pushing for immediate entry and admits that 
the past housing bubble might have been even worse had Britain been 
tied to eurozone interest rates.  [!!!]

But he says the "page has been turned" in economic policymaking, 
highlighting the need for an "anchor" against the "incredibly 
vulnerable exposure to international financial markets". Refusing to 
discuss the euro is a "failure of political leadership", he says.

Turning to the public finances, he argues that preparing for currency 
union could also provide a vital path to fiscal sustainability.
"The strict rules attached to the euro could emerge as one of the 
best ways to persuade the markets that we will put Humpty Dumpty back 
together again, put the public finances in order".

"The euro is no magic wand, the eurozone is not immune, but it is 
irresponsible not to appreciate the new vulnerabilities to the 
British economy, which are huge, which are immense," he says.
"People will be asking themselves questions about the footloose, 
fancy-free world of City banking, but also whether it is right for 
the UK to be in quite such an overexposed environment where the 
currency is bobbing up and down violently."

In a scathing attack on leading figures in the City, Mr Clegg slammed 
the "shameful elevation of greed and corporate overreach", with chief 
executives hypnotised by the "vain belief that size matters".
"It makes you livid, it beggars belief that the one industry that is 
supposed to count your money in and out cannot say how much money it 
has lost."

Mr Clegg, whose father was a banker, on Tuesday told a breakfast of 
City luminaries that the debate over the euro would be essential in 
shaping the future of Britain's financial sector.

"Limitless boom years in the City will never come back," he warns. 
"The City will have to be reregulated, work at a more measured pace 
and seek protections for its vulnerability to the flows of capital."

He accuses governments since the 1980s of being "abject in their 
obsequious desire to do what the City needed".

Pandering to these vested interest, he says, created a flawed 
economic strategy that "made the rest of the British economy wholly 
subservient to the gravity-defying, golden-egg laying potential of 
the City"
+++++++++++++++++++++++++++++++++
Hints at deals in a future hung parliament:

Nick Clegg declared himself "hungry for power", hinting that he would 
be prepared to strike unpalatable deals in a hung parliament to 
implement Liberal Democrat policies.
Mr Clegg has struggled to win public recognition since becoming Lib 
Dem leader in December 2007, but party strategists think he will gain 
a higher profile as the next election approaches.
The latest opinion polls suggest the Conservatives would win with an 
outright majority, but public opinion is febrile. Mr Clegg hopes that 
the Lib Dems, currently with 63 MPs, will influence the next government.
Any deal with a larger party would focus on implementing core Lib Dem 
policies, which Mr Clegg said he would identify over the next months. 
These could include cutting taxes for low and middle-income families, 
ambitious green policies, better childcare, further education reform, 
opposition to identity cards, and internationalist policies.
"I'm hungry for power," he said. "I would be delighted to have the 
opportunity under almost any circumstances to make sure those 
policies and changes occur in Britain."
His comment could be taken by Lib Dem activists to mean he is 
countenancing a working arrangement with a minority Tory government, 
although an outright coalition is unlikely.
The Lib Dems and Tories could conceivably work together on tax 
cutting, the environment, education reform and scrapping ID cards. 
But Europe would be a huge point of difference.
Mr Clegg's first year in office was littered with gaffes, but he says 
he is learning lessons. "My skin is considerably thicker and that's 
probably a good thing," he said.
George Parker