Darling refuses to rule out Crosby £50bn option
My colleague Gavin Esler interviewed Alistair Darling today. You can see the whole thing on the ´óÏó´«Ã½ iPlayer: it ranges across the OECD prediction of recession and his "worst for 60 years" statement. But for policy wonks the most interesting passage is where he repeatedly refuses to rule out the Crosby-proposed option of underwriting the UK mortgage market with government bonds. In fact he seems to steer us towards the fact, as in Crosby, that there's only half of the mortgage market currently fundable through savings - and if those good old wierd and wonderful collateralised debt vehicles don't come back - and they're not coming back - we need something to put in their place.
Bank governor Mervyn King said this month the proposal was "dangerous". For the government to go for it would provoke a clash with the bank and would certainly involve some rewriting of the fiscal framework - if not the rules themselves then the definition of what is borrowing.
Let's be clear why they are even considering this: if the source of mortgage finance is halved forever, then the dream of universal home ownership is over, and so is the boom based on equity withdrawal.
Comment number 1.
At 3rd Sep 2008, leftieoddbod wrote:they really have thought this one through, you save for yonks and deprive yourself of life's essentials all to get a deposit then because of these proposals you could end up living next door to a family that haven't saved a bean but the local authority have a duty to house them...right next door to you. Nice one, Alistair.
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Comment number 2.
At 3rd Sep 2008, bookhimdano wrote:yes. which means uk housing like the premier league is ripe for take over by those who do have massive surpluses. The uk will effectively become a wealth fund colony.
those who do long term economic cycles say this is just the end of a cycle that started in 1930s which is not a nice place to be. Cycles are not good or bad they just are. Like the seasons. So we deal with it by being aware of it and make them work for us.
so what changed in 1930's? The New Deal. So in economic cycle theory now is the time for mass participation projects.
There is a project that can generate hundreds of thousands of jobs, create billions in income and lower energy costs. It's called a two way grid. The uk is one of the few countries not to have one.
the question i would have asked AD is given where the gas price is now [significantly lower] why are prices going up? is the mis information on gas to prepare the public for nuclear?
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Comment number 3.
At 3rd Sep 2008, instowwaster wrote:I was very disappointed that Gavin Esler did not push Darling harder on the worst for "60 years" claim. If this is in fact true, why has he and the PM been telling such porkies to the nation for the last 6 months.
I get the feeling at times that our ´óÏó´«Ã½ news hounds are far to cosy with the Labour failures and do not want to strain their tea and cake meetings.
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Comment number 4.
At 3rd Sep 2008, barriesingleton wrote:POINT OF ORDER (#3)
You have to strain tea separately from cakes.
I'll get me coat.
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Comment number 5.
At 4th Sep 2008, U11711256 wrote:Post #3
On the contrary....I thought Gavin Esler's performance was exceptional. He gave Darling a real good grilling that even Paxo would have been proud of! Esler pushed him to the limit. Not only was Darling squirming in his seat, his mouth also quivered at certain points during the interview. I don't think he quite expected Esler be so aggressive and to be so clued up on the subjects discussed.
It now seems to be 'gloves off' time for reporters pursuing this government over their economic record. They can smell the scent of blood in the air!
Well done Gavin and Paul.....don't let them off the hook.....for even a second.
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