Britannia Radio

While we await the re-opening of global markets tomorrow the 'battle-
lines' are being drawn up.  It would be unacceptable to readers to 
print them all here - it has taken me long enough to read them!  So I 
give Osborne and Brown 's comments priority as they (Where's Darling 
hiding ?) are the chief protagonists

I add excerpts from other commentators.

It seems that Brown is stuck in a groove recommending the policies 
that have already failed while some glimmer of intelligent thinking 
lies elsewhere.

xxxxxxxxxx cs
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SUNDAY TELEGRAPH   4.1.09
Second bank bailout plans condemned
A second bailout of the banks has been condemned as "the worst 
possible option" as reports suggest the Government is planning more 
intervention.

By Melissa Kite, Deputy Political Editor

Gordon Brown was reported to be preparing to pump billions more 
pounds into the banking system amid mounting evidence that his £37 
billion part-nationalisation has failed to get credit flowing to home-
owners and businesses.

As banks continue to restrict lending, Alistair Darling, the 
Chancellor, has been considering a range of options including cash 
injections and offering banks state guarantees to raise money privately.

Millions of savers face the prospect of zero per cent accounts within 
days as the Bank of England prepares to cut interest rates to the 
lowest level in its 315-year history. Borrowing costs could fall from 
two per cent to as low as one per cent this week in a bid to 
stimulate lending. However, the big lenders remain stubborn, with 
Nationwide refusing to pass on interest rate cuts to customers with 
tracker mortgages.

The number of new home loans plunged to a record low in November with 
only 27,000 mortgages approved by banks and building societies. Small 
businesses are also suffering from the lending drought and there are 
growing fears that the car industry could be permanently damaged.

However, any further bid to restart lending by injecting more cash 
into the banks looked likely to land the Government in controversy.

Vince Cable, the Liberal Democrat treasury spokesman, signalled that 
his party would oppose the plans. He said: "We cannot have a 
situation where the taxpayer makes open ended financial commitments 
to the banking system when the banks then wilfully put their own 
short-term self interests ahead of the national economy.

"The banks are currently on strike, refusing to lend, and the 
Government is going to have to play the role of the strikebreaker as 
earlier governments did with disruptive strikes in the past. We 
cannot be held to ransom by senior bank managers.
"At present the Government is both confused and weak in its approach 
to the banks. It has got to set a very clear sense of direction since 
it is now the principle shareholder in much of the banking system, 
and then insist that the priority is maintained for keeping the 
British economy going through continued lending to sound businesses."

John Redwood, chair of the Tories' economic competitiveness 
commission, said the taxpayer could not afford to own more bank 
shares, and should not be expected to take more risk.
"The banks may lose a lot more money before this crisis is resolved," 
he said. "They are currently in a vicious circle. They cannot afford 
to lend more, so they are forced to undermine the companies they do 
lend to, as these companies are starved of additional working capital 
by the banks, and face less and less revenue from customers who 
cannot get access to new loans or do not seek new loans as they fear 
for their jobs.
"It is possible RBS (Royal Bank of Scotland) has already lost the £20 
billion the taxpayer was made to put in recently. When you go to the 
aid of a bank with a £2 trillion balance sheet you need a very long 
pocket. The last lot of share subscriptions did not lead to more 
lending to the corporate sector - just to lending it back to the 
Government. This is the worst possible option. It is so dangerous 
that the Government must rule it out."

Another option said to be on the table is a proposal to buy up toxic 
assets and putting them in a so-called "bad bank" which would attempt 
to dispose of the bad debts. In a mirror of an idea first aired in 
the United States, the Treasury would take bad loans off the hands of 
banks, swapping them for government bonds.
A senior Treasury source said: "The Chancellor is considering all the 
options. He wants to do whatever he can to help the economy."

The Shadow Chancellor George Osborne said a second bank bailout would 
be an admission of failure.
"If the Government has to revisit bank recapitalisation then it will 
be a stunning admission that their whole approach to the recession 
isn't working," he said.
"They said their banking policy would restart lending and it hasn't 
and they said their VAT give-away would stimulate the economy but 
ever since, things have gone from bad to worse.
"We urgently need the National Loan Guarantee scheme that the 
Conservatives have been proposing for months. That is the best way of 
protecting jobs and keeping business afloat. Gordon Brown's recession 
policies are becoming an expensive failure."

Firms are to be paid by the Government to take on more employees than 
they need under radical plans being unveiled by Gordon Brown this week.

The Prime Minister will detail a package of measures aimed at beating 
the recession, centring on action to boost jobs.

He will announce that millions of pounds of public money is to be 
spent paying employers to take on extra apprentices which they do not 
need as part of an "overtraining" plan.

Mr Brown will pledge to focus the scheme on companies involved in 
"smart industries", such as those producing green technology [There's 
money to pour down the drain, it seems. - cs]  and digitial 
communications equipment.

Ministers are hoping that the trained extra apprentices will then get 
jobs in other firms who do need them when Britain comes out of 
recession.  [This is daft.  First train unwanted apprentices and then 
let them sit around waiting for the economy to pick up one day. -cs]

The Prime Minister will say he wants to plan for better times and 
that as Britain comes through the downturn it must focus on products 
and services it can sell to the world.

He will move to bolster Government action on the economy by 
announcing plans for an employment summit and a regional tour, during 
which he will speak to  ['speak to" not "listen to" -cs] hundreds of 
members of the public about the economy in their area.   [photo-ops 
giving the impression of activity! -cs]
=======================

BBC ONLINE   4.1.08
PM defends handling of downturn
  [Excerpts only]
Prime Minister Gordon Brown has defended the way he has handled the 
economic downturn.
During an interview on the BBC's Andrew Marr Show, Mr Brown said the 
new year would be "challenging and difficult".  --------
Ruling out any further bank bail-outs, he said any solution needed 
global co-operation. He also said he was not thinking about calling 
an election. --------
The prime minister also gave more details about a programme to create 
100,000 jobs as part of a new initiative to curb rising 
unemployment   --------Some 30,000 jobs are to be created in school 
repairs, in an attempt to help private construction firms who have 
suffered in the economic downturn. ------

"We are going to make sure that through this downturn, people will be 
protected "  ["Protected ? Except the elderly and thrifty who are 
having their incomes cut to ribbons while their savings vanish in 
smoke.  Even their final nest-egg - their homes - are losing value 
and cannot be used to pay for nursing home care in their final years 
- cs]
====================
OTHER COMMENTS 4.1.09
=-=-=-=-=-=-=-=-=-=-=-=
===Former Tory cabinet minister Michael Portillo remained unconvinced 
by the proposals.
He told BBC Radio 5 Live: "Some things he's bringing forward but 
other things he's putting back.
"For example, two aircraft carriers have been put back a couple of 
years and people will know that they're very labour-intensive.
"And also of course, if these things are being brought forward that 
means either that taxes have to be higher or borrowing has to be 
higher, and both of those are bad for economic confidence and they 
destroy jobs elsewhere.
=-=-=-=-=-=-=-=-=-=-=-=
==="As Shadow Chancellor, George Osborne has been a tough critic of 
Government policy rather than an analytical advocate of a policy for 
his own party... The Conservatives need to adopt a clear and sound 
financial policy. Such a policy would include the objectives of 
reducing Government expenditure, reducing tax, reducing debt, helping 
the banking system to reduce leverage and rebalancing the reserves 
with a larger component of gold." - William Rees-Mogg in the Mail on 
Sunday
=-=-=-=-=-=-=-=-=-=-=-=
===Dominic Grieve breaks ranks to warn against Labour's 45p tax band 
for higher earners
"I can't predict where we're going to be when we get into office, and 
we're going to have to live with some of the consequences of what the 
Government does. But raising taxes on higher earners, does seem to 
me, from the historical evidence, damaging in the medium-to-long term 
in terms of the amount you then get out of the economy because it is 
higher earners who are usually the most economically active and 
producing more economic activity which is ultimately for the 
betterment of everybody else." - The Shadow Home Secretary quoted in 
The Sunday Telegraph
[BUT nb.  The Observer says "Two-thirds of Britons want rich to face 
punitive rates of taxation" ]
=-=-=-=-=-=-=-=-=-=-=-=
==="Does it help Brown for his most senior colleague [Peter 
Mandelson] to highlight how much the government has devalued our 
currency by suggesting that we should abandon it because it is so 
weak?" - Michael Portillo in The Sunday Times
=-=-=-=-=-=-=-=-=-=-=-=
==="Sterling's plunge close to parity with the euro has added more 
than £3bn to the amount the Government must pay to Brussels over the 
next three years." - Independent on Sunday
=-=-=-=-=-=-=-=-=-=-=-=
Chris Grayling: Brown's economic solution is not working   (via 
Politics Home)
Mr Grayling criticised Gordon Brown's New Deal-style jobs plan and 
said that it would fail to improve current economic difficulties. 
"Things that the government said it would do to tackle these 
difficulties just are not working," he said. He added: "all the 
things that Gordon Brown promised us aren't happening."

He said that the government needed to adopt a loan guarantee scheme 
to get credit flowing again. "What we need to do, what we've 
proposed, is that the government needs to guarantee some of the loans 
that go to small businesses, £50bn of loans," he said.

Mr Grayling argued that public works programmes would not generate 
sustainable employment and proposed alternative measures. He said: 
"We've also proposed an employment programme that would provide £3bn 
in subsidies to employers if they take on people who have been 
unemployed for six months."
Chris Grayling, Shadow Work and Pensions Secretary
BBC News at 1226