the snap general election thread

antrobus

Herzlos wrote: »

Yeah I can't get my head around how Labour can be responsible for sub-prime lending by US banks, or how the Tories could have done anything better when it crashed.

Labour was responsible for sub-prime lending by UK banks. Oddly enough, Northern Rock Plc didn't have a US operation.

Well, for one thing what the Coalition government (2010-15) did better was sort out bank regulation. Labour's big mistake was to take bank regulation away from the BoE and give it to the FSA. For a number of reasons that was a stupid idea.

HAMISH_MCTAVISH

antrobus wrote: »

Labour was responsible for sub-prime lending by UK banks.

Maybe.

But sub-prime lending by UK banks on UK loan books didn't on the whole cause the UK banking crisis.

Oddly enough, Northern Rock Plc didn't have a US operation..

And oddly enough, it also wasn't brought down by defaults on it's loan book.

Chrysalis

cannot remember which election thread this was mentioned but an additional comment on inflation and wage rises.

Increasing people's wages obviously (when in a private company) will increase the price of their goods to a degree, but remember wages are just one part of many costs. So e.g. increasing wages of workers by 2% is not a 2% increase to production costs, so would translate to a much lower affect on price of goods.

An example I have is in my first job, I made a mistake once on the factory floor in terms of decision making and had a senior manager approach me to tell me my decision was costing them £57000 an hour in wasted materials used. I can confidently say the amount paid to staff in that factory would only be a fraction of that figure per hour. (also there was many other costs than just those specific materials I was wasting)

30 technicians at £12 hour £360 per hour.
80 operatives at £5 hour £400 per hour.
Plus 2 factory floor managers, and approx 30 people in office, which was a mixture of admin staff and managers.

hallmark

hallmark wrote: »

It does make me laugh though, how Brown & every Labour supporter credit Brown & Labour with the state of the UK economy during the Boom years but rush to say "ooh it was the global recession, not us" for the Bust. Pitiful.

And then:

steampowered wrote: »

Sigh. I guess that answers my question. It seems you are just trolling rather than attempting to have a serious discussion.

masterwilde wrote: »

Its well known that the banks are responsible for the recession.

Herzlos wrote: »

Yeah I can't get my head around how Labour can be responsible for sub-prime lending by US banks

As predicted
:rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:

Chrysalis

Well regarding the banking crisis in late 2000s I would think it would be very wishful thinking to think that the USA banking crisis would not affect the UK, given we are primarily a financial and retail economy. Retailers which rely on access to credit and of course banks.
The labour party at the time chose to follow thatcher's mindset in terms of banking regulation and letting the banks thrive, a tory government would probably have not took a different path.

The only difference would have been the levels of public spending and taxation, which would have primarily affected the affect on the social system rather than the economy itself. The conservatives did back Labour's plans on how to react to the banking crisis. A tory government would have meant less of a deficit following the crash and as such less cuts to services, on the flip side however the services would likely have already been under funded in the first place.

hallmark

Chrysalis wrote: »

A tory government would have meant less of a deficit following the crash and as such less cuts to services, on the flip side however the services would likely have already been under funded in the first place.

Not underfunded, funded as much as the UK could afford to fund them.

You cannot base your funding on what's possible in boom years then shrug your shoulders when the bust happens & blame somebody else, which is what Labour did.

The UK can either have Tory levels of funding, or can have a few years of Labour overspending followed by far more years of far more savage cuts to pay for it. The only alternative would be massive income tax rises across the board & even that probably wouldn't pay for Labour levels of spending because of knock-on effects. It would be the only remotely honest way to suggest trying to fund them though.

antrobus

HAMISH_MCTAVISH wrote: »

Maybe.

But sub-prime lending by UK banks on UK loan books didn't on the whole cause the UK banking crisis.

And oddly enough, it also wasn't brought down by defaults on it's loan book.

Have a look at the scale of 'impairement losses' recognised by Northern Rock Plc post nationalisation and you might well reach a different conclusion.

Or take a look at RBS. Or HBOS. The two big bad Scottish banks that were really the problem. Bad lending is what got 'em.

Herzlos

antrobus wrote: »

Labour was responsible for sub-prime lending by UK banks. Oddly enough, Northern Rock Plc didn't have a US operation.

It did cave into pressure to relax regulations around banking, for which it should be held to account for, but that in itself wasn't responsible for what happened.

Then there was largely no option about bailing out (I think they should have taken much larger stakes in the bailed out banks though, and insisted they paid out no bonuses over some smallish cap until repaid). Letting one bank fail is fair enough, but letting that many do so?

Incidentally, the Tories are all about reducing regulations everywhere, so I'm not convinced they wouldn't/won't do worse.

antrobus

Chrysalis wrote: »

...:jThe labour party at the time chose to follow thatcher's mindset in terms of banking regulation and letting the banks thrive, a tory government would probably have not took a different path....

No, they did not. Labour created their very own mindset in terms of banking regulation. They created the FSA, aka the Fundamentally Supine Authority according to Private Eye.

At least we now have a PRA that is actually trying to regulate. We have stress tests, and the BoE goes around telling banks that they need more capital.

Chrysalis

hallmark wrote: »

Not underfunded, funded as much as the UK could afford to fund them.

You cannot base your funding on what's possible in boom years then shrug your shoulders when the bust happens & blame somebody else, which is what Labour did.

The UK can either have Tory levels of funding, or can have a few years of Labour overspending followed by far more years of far more savage cuts to pay for it. The only alternative would be massive income tax rises across the board & even that probably wouldn't pay for Labour levels of spending because of knock-on effects. It would be the only remotely honest way to suggest trying to fund them though.

Whats required to fund something is nothing to do with affordability.

Please explain how raising corporation tax to 2% below what it was in 2010 is obscene levels of tax?

The tories are basically just throwing money down a drain with all their tax giveaways for the rich. Tax cuts = spending, its amazing many dont recognise that.

In affect you are trying to claim the UK cannot afford to properly fund its health service, cannot afford to build infrastructure, cannot afford to house its people, cannot afford to feed its people (food banks) and cannot afford to care for its vulnerable, what a sad state of affairs.

But it can afford to become a tax haven. ok

Normally you adjust spending based on circumstances, nothing unusual in that, with the tories tho its just cuts regardless of whats happening.

No respect at all for your post because again you not explaining anything just basic phrases like "blame somebody else like labour did" even into a reply to a post which explained "exactly" why the crash would have happened under tories. Its just covering your ears saying "I cant hear you".

Right now income tax and corporation tax are at record low levels for reference.