AndrewJB wrote:Byrne's note was following in the tradition of Reggie Maudling, who left a similar note to Callaghan when he took over the Exchequer in '64.
Britain was exposed to the financial crash due to lack of regulation around financial services, and for that we blame Thatcher (for deregulating), and the Major, Blair, and Brown governments for not reversing the more dangerous elements of this deregulation. During their time in opposition, the Tories called for more deregulation, and until the financial crisis hit, Osborne promised to match Labour's spending.
While in government, Labour could and should have taken a more interventionalist approach. At a time when all the certainties about economics were under question, Labour could have used QE to invest in the economy in a more proactive way, by funding infrastructure, and greening the economy. They could have turned the nationalised banks into investment engines for British business. And they could have overhauled banking regulations, taxation, and repatriated some British money from abroad.
The the Tories took power their reason for austerity was to bring the deficit down to zero by 2015. Not only did they fail to do this, and in doing so pretty much treble our national debt, but their policies have tipped a lot of people into miserable lives, and effectively transferred a lot of wealth from the poorest in the country to the richest.
Hi Andrew, I'd not heard that before about Reggie Maudling. What did his note say? Were there any other occasions when an outgoing treasury minister chose to leave a "joke" note for the next guy? June 1970, Wilson to Heath? 1974, Heath to Wilson? 1979 Callaghan to Thatcher? 1997 Major to Blair? Of course, I've referenced the PMs - I can't remember who were the Chancellors or other treasury ministers. What jolly japes!
Hmm, I wouldn't blame Thatcher for the absence of financial regulation. The "big bang" in 1986, I think, was a much needed breaking up of the old monopolies - and the most ingrained "old boys" system. It allowed much needed restructuring of the city of London and was the foundation of the building of London as the "world financial centre" competing successfully with New York in many things. Even more important, it drew in many of the foreign banks and today continues as the foundation of London's diversity.
Brown made a mistake in replacing the Bank of England supervision of the banks to the FSA. That led to the BoE being on the side lines when the banks started to develop their Retail Mortgage Backed Securities (RMBS). Yes, the UK was involved in Asset Backed Securities (ABS), just like the US. Everyone - well, everyone who was being listened to - thought it was great that lending risk was being distributed and shared among many many participants, that the risk was spread so widely that it just wouldn't matter if anyone defaulted. Governments "loved" rmbs because it appeared to show that even people who didn't have much money could buy their own house. I'm sure you've seen "The Big Short." I'm sure you know that 2007/08 the financial crisis broke when all the financial sector realised that this clever idea was fatally flawed. Remember, September 2007, Northern Rock was effectively bust - before that it had been lending 125% mortgages, one hundred and twentyfive per cent, and there was little to no scrutiny of your ability to pay back the mortgage. NR's abs/rmbs programme was called "Granite" - granite, the northern rock! Now that was a great joke.
Brown's "sticky fingers" were all over the banks rmbs programmes. If he'd taken a more prudent view (do you remember "prudence," poor girl?) he'd have realised it was very thin ice, fake promises and got the regulators to put a stop to it before we went over the cliff edge. But, politicians feel great when everyone is borrowing, buying houses and maxing their credit cards - it gives the appearance that their management of the economy is a success.
Yes, I agree, Osborne promised to match the Labour govt's spending - what opposition party has ever said "we will spend less...." Surely, no one has to put something on the side of a bus before we ask "is that true?" However, I don't remember the Tory's campaigning in the 2010 to spend the same - the country, and the world, was much too deep in all the bad stuff for anyone to want to say that then.
I'll leave it at that. I have experience of the "National Enterprise Board" - it tried to set up the DeLorean Motor Company in NI. Back to the Future, here we come!