Brown broke Britain

It's time for blame to be given where it's due. I'm fed up with hearing the spin that "Gordon's done a great job for Britain." Gordon Brown has messed up almost everything he's touched.

On the credit side, he freed the Bank of England in May 1997 to set interest rates. Sadly, quite soon after, in June 1998, he screwed up banking supervision, and that is the root cause of the current financial crisis. The Bank was, at the time, a world-renowned centre of excellence for banking supervision. Famously, a 'raised eyebrow' was all that was needed when supervisors wanted a change made. This was replaced by a rules-based supervisory regime under the Financial Services Authority which had power to penalise and set rules, but lacked the reputation and clout that had enabled the Bank to keep a tight rein. Whenever there's a published set of rules, clever people will find ways to push the envelope - which is what's happened in spades in the sub-prime loans scandal and Credit Default Swaps debacle.

He's also messed up the UK pension system. Our defined benefits system was the best in the world before he and his mate Ed Balls got their dirty fingers into it. They axed the dividend tax credit in 1997. Very few private sector organisations can now afford to offer defined benefits pensions - thanks largely to Brown's pension grab which in March 2007 was already estimated to have taken more than £100 billion out of private sector pensions (Daily Telegraph article).

Finally, he's saddled us with unaffordable obligations that won't go away. Public sector spending has been a diarrhea of give-aways to anyone whose acquiescence needed to be bought, much of it funded by present or future borrowing. Rather than work out a cost-benefit analysis for new initiatives, money has been sprayed into wild ideas that have been more to do with popularity or grabbing headlines than solving the needs of the country. Many Government IT projects have been a complete shambles. Pay settlements have been much more generous than those available to most private sector workers. MPs and many other public sector have defined-benefit pensions, on massively generous terms, that they will go on collecting for the next forty or fifty years.

We'll be paying for Brown for two generations. Brown did a great job for Brown.

Barclaycard on the ball... and then not

Barclaycard contacted me on Saturday morning (7th) to ask if I'd just done a transaction for £1,000 with a mortgage provider on my business credit card. No! Then did you do £2,000 with an energy utility on Friday? No! What about all the other transactions? One other was fraudulent, a Pay As You Go phone top-up - I don't have a PAYG phone. Top marks for picking up the untypical transactions, two of which weren't what I would consider as suitable items for a business account.

The disclaimer form arrived today - and included a number to which it could be faxed after completion. And guess what - no answer (multiple times), number busy, no answer. Less than top marks for that.

Banking oblivion

So, as expected, the Monetary Policy Committee of the Bank of England has reduced base rates to 1%. I no longer think the Bank is independent - it's been cowed by the criticism of its role in the Northern Rock debacle.

This will further drive retail savers away from the commercial banks; building societies have less political pressure to reduce saver and borrower rates because they're not seen as 'guilty'. It also reduces the cost of government borrowing, at least where it has a captive depositor base, such as some National Savings products, and reserve deposits at the Bank of England.

So it's not inconceivable that this is part of a fiendish game plan by HM Government. Why? So that it can nationalise all of the banks, which will soon have little liquidity except that supplied from government schemes.