The legacy of Cameron and Osborne

[unbeliever 10]

Both Labour and Tory have cause severe house price inflation, but the Tories didnt mean to do it, so that makes it ok. I have not heard that excuse since I was at Junior school. haha

 

What?!?

 

House price inflation is caused by a failure to build enough houses or alternatively to keep demand down. Both main parties are guilty of this.

 

Labour's mistake was mis-regulating the mortgage market such that it became a threat to the whole baking sector and by extension the whole economy.

It's less of a threat to the wider economy now, because the banks are not allowed to lend to people who cannot afford the mortgages and a reasonable deposit (minimum 10%) is required to absorb potential fluctuations in house prices.

[El Cid 214]

It's less of a threat to the wider economy now, because the banks are not allowed to lend to people who cannot afford the mortgages and a reasonable deposit (minimum 10%) is required to absorb potential fluctuations in house prices.

 

House prices are way too high, you cannot blame Labour because the rise has continued under the Tories.

 

The ratio of house prices to income used to be 3x, now it is more like 5x income.

[unbeliever 10]

House prices are way too high, you cannot blame Labour because the rise has continued under the Tories.

 

The ratio of house prices to income used to be 3x, now it is more like 5x income.

 

No. I don't. I've been quite clear about that.

What I do blame them for is widespread mortgage lending to people who could not afford to keep up the payments combined with zero or less than zero deposits so that defaults crippled the banks.

I hope that's clear now.

[Jim Graham 10]

What?!?

 

House price inflation is caused by a failure to build enough houses or alternatively to keep demand down. Both main parties are guilty of this.

 

Labour's mistake was mis-regulating the mortgage market such that it became a threat to the whole baking sector and by extension the whole economy.

It's less of a threat to the wider economy now, because the banks are not allowed to lend to people who cannot afford the mortgages and a reasonable deposit (minimum 10%) is required to absorb potential fluctuations in house prices.

 

The whole baking sector? Surely Mary Berry is to blame for that.

 

But, seriously, it wasn't so much that banks lent to people who couldn't afford to pay it back - it was that they lent out £60bn more than they had in deposits. That is hugely more than is legal in the US. So every time they made another mortgage or loan they had to borrow that money from somewhere else at a lower interest rate. And it was Gordon Brown who relaxed the rules to allow banks to be so overextended.

 

If they had lent to people who couldn't pay it back we would have seen wholesale repossessions and a price crash. We didn't really get that this time.

 

What really did for the banks was that they had created a sort of money merry-go-round of borrowing from each other to keep afloat. But as soon as the first bank defaulted they all lost confidence in each other and the merry-go-round stopped overnight. Then the interest rates to borrow from each other went through the roof, and so they couldn't make any more cheap loans. So nobody borrowed, and then the whole banking sector stopped. And some banks were left with no cash and had to be bailed out.

 

Gordon Brown fuelled investment in property (to boost GDP) by reducing CGT to below rates of say investing in industry, and that caused the rush to property. Then he compounded the problem by relaxing banking rules to unleash an almost unlimited flow of funds to pour into property. The rules have since been tightened up but probably not enough.

 

---------- Post added 19-07-2016 at 13:55 ----------

 

House prices are way too high, you cannot blame Labour because the rise has continued under the Tories.

 

The ratio of house prices to income used to be 3x, now it is more like 5x income.

 

Of course we can blame Labour, they allowed the population to rise so rapidly and failed to build any houses. They built plenty of schools and hospitals on ruinously expensive PFI deals, but no council houses for the poorest. They were left to borrow from banks. And, it's an interesting fact that the Tories built more council houses in 1996 than Labour did in their 13 years in charge.

[Mister M 1,609]

As others have said leaving the EU will be what defines his premiership. He delivered on that promise.

I think it's probably fair to judge those who hold the high offices of state to be remembered by the promises that they made....Such as the deficit (which was promised to be wiped out by 2015, I seem to recall); the promise not to increase VAT (which went up within months of taking office); Greenest government ever promised; immigration to be massively reduced; and a compassionate conservatism. On this last point, I think the measure of how compassionate a Govt is, is how it treats the poorest. What is scandalous is that many thousands of disabled people have died within 3 months of them being told by a panel that they were fit for work (including cancer victims for heaven's sake).

[El Cid 214]

 

Of course we can blame Labour, they allowed the population to rise so rapidly and failed to build any houses.

 

Are you blind to what is happening now, under the Conservatives?

[Jim Graham 10]

Are you blind to what is happening now, under the Conservatives?

 

No. But you said we can't blame Labour. Oh yes we can. At least the Tories have attempted to stop the tide. They closed down Labour's bogus colleges importing students who never went to school, or home. They have all but sealed off the Channel Tunnel to illegal immigrants, and clamped down on benefits for immigrants.

 

But the numbers keep rising because Europe is going down the tubes and the UK is the most successful European economy at the moment. London is now the 6th largest French city. That is how many French have been coming here. They are deserting Hollande's Socialist nirvana by the boatload, and the events of Nice last week won't help stop them.

 

As long as we are in the EU there are 350 million with a right to live here, and plenty are taking up that right.

[I1L2T3 10]

So let's deconstruct that rant shall we?

 

Record Debt - Wrong. As a % of GDP debt was much higher in the mid 19th century and again around WWII

 

So the only thing worse than Cameron and Osborne debt-wise in the last 200 years has been a world war. I knew it was bad but anyway check the data:

 

http://blogs.warwick.ac.uk/markharrison/entry/the_history_of_1/

 

 

A deficit they never brought under control - True, but you have done nothing but squeal about the cuts that have been made, and any other party would kept the deficit twice as high and piled up debt further.

 

They missed all their own targets on deficit reduction. You can't point to things that didn't happen, only the facts.

 

A needless house price boom - Not really a surprise when the country enjoys the company of an extra 300,000 a year due to uncontrolled and uncontrollable immigration. But this house price boom has not been artificially created to boost growth figures, which is what Brown did.

 

Almost 60% of immigration in 2015 was controlled immigration, i.e. non-EU. so a failure is there around providing resources for the people invited in.

 

But having said that there is no doubt that house prices were deliberately stoked by Osborne, helped by the BofE.

 

Interest rates are low, banks have been pressured not to foreclose, buy to let is still poorly regulated, we've had funding for lending, help to buy etc... etc... etc...

 

The housing market is heavily rigged

 

Three years of economic stagnation - Just not true. The economy is growing and will soon overtake Germany, but not in this part of the world where nobody wants to invest.

 

Check the GDP growth chart for 2011-2014. It's absolutely true. Things have been better since but it's debt-fuelled growth.

 

http://www.tradingeconomics.com/united-kingdom/gdp-growth-annual

 

Butchered public services - Hang on, you said earlier the deficit hadn't been cut enough. Sort yourself out. What do you want?

 

There is the paradox. Rising debt and butchered services. Somehow they managed it.

 

Record household debt - What people choose to borrow is hardly the government's responsibility is it?

 

No on an individual level but at a macro level yes the government has a huge responsibility. See earlier housing discussion.

 

 

Surging use of food banks - Well they would be wouldn't they? I'm pretty sure if banks were giving out free money their use would surge too. And most of the people surveyed using food banks were because their benefits payments hadn't arrived. Yes, that's the government's fault.

 

Facts are facts. It is happening.

 

The rise of zero hours contracts - Yes, they are, but there have always been casual labourers, and many people like it that way.

 

Not as many as now. For millions of workers their conditions of employment have never been worse

 

Reduced infrastructure spend - I refer my Rt Hon Friend to the answer I gave for Butchered Public Services.

 

Osborne cut infrastructure spending year on year for the first few years after 2010. Don't beleive me then look it up.

 

A manufacturing recesssion - An absolute lie. Manufacturing has never been more valuable to this country than it is today. British manufacturing expanded at the fastest pace in five months in June up to the EU referendum.

 

Sorry Jim, it's you who is lying:

 

http://www.telegraph.co.uk/business/2016/06/05/british-manufacturing-to-remain-stuck-in-recession/

 

perperual near zero interest rates - Like every other country in the world, and how is that a bad thing unless you're a saver, which the poorest are unlikely to be.

 

For a multitude of reasons it is bad. It is not the sign of a healthy economy. Read up on why it is bad.

 

Brexit - A democratically arrived at position for the government to implement.

 

That they didn't want

 

 

etc, etc, etc - Well, if the etceteras are as pitifully represented as a bad legacy as those above I don't think we'll have much to worry about.

 

The points you make above have been lifted straight from the pages of the Morning Star, and are a tedious and ill-informed class war cry. Compared to what went before Cameron has done a decent job with the bombed out economy, and chronic social problems he inherited. But, unsurprisingly, you missed his real failures, which were to build enough homes and to tackle corporate greed. Thankfully there will never be another Labour government to take us to the brink of ruin again, so let's hope the current PM can move things on and sort things out.

 

History won't be judging those two anything like as harshly as the two who went before.

 

Have a nice day

 

I don't read the Morning Star. Yes we can have another thread about the Blair/Brown legacy if you like - I'll be just as scathing of them.

[Ted Heath 10]

To all readers, re the above. For the truth in this debate follow Jim Graham. Those who oppose him are seeking to defend the indefensible. Labour has failed, hopefully the party will die and be replaced by a centrist pro EU party with serious policies challenging and positively opposing the government.

 

That will leave a left wing idealistic, impractical set of loonies who would rather see the country fail than succeed and consign your children and grandchildren to poverty.

[newcomer01 10]

That will leave a left wing idealistic, impractical set of loonies who would rather see the country fail than succeed and consign your children and grandchildren to poverty.

 

Like so many forumers,why make what you see as a pertinent point to describe your opinion only to let yourself down by name calling.I refer to,impractical set of loonies .Really ,how does that comment enhance your opinion.

 

But while I am here, Please just explain to me what would these so called loonies attain from the country failing and children /grandchildren being consigned to poverty?

[Beauchiefs 10]

House prices are way too high, you cannot blame Labour because the rise has continued under the Tories.

 

The ratio of house prices to income used to be 3x, now it is more like 5x income.

 

House prices are too high as a result of low interest rates, everyone is a property investor now because of low interest rates. The boom will eventually end in tears.

[Jim Graham 10]

It's always difficult to argue with someone who has such confused views of events as some below. There are those who moan about public sector job cuts and lack of infrastructure investment AND at the same time bemoan the deficit not being cut AND the debt rising. This shows an abject understanding of fiscal policy. It is an infantile understanding of how government works. But a lot of MPs also suffer from that problem, mainly on the opposition benches.

 

So here's the thing: the debt rises until the deficit becomes zero. If you want the deficit to be zero the government has to cut the amount it spends. If you don't want more government spending cuts the deficit cannot be zero. If the deficit cannot be zero, the debt will keep rising. And if you think the deficit can be zero by taxing bankers you should urgently seek medical treatment for a serious mental condition.

 

But, the fact that all the austerity we have had has resulted in only a halving of the deficit and a huge increase in the debt really just puts in perspective how much Labour were borrowing between 2007 and 2010. It demonstrates the scale of their utter recklessness, and just how badly they endangered the state through greed and incompetence.