Gordon Clown .Com

The Times has revealed today that Labour party workers in Leeds are deliberately attempting to rig postal votes by collecting them from voters and selectively posting only the Labour votes.  A Times undercover reporter posing as a Labour volunteer recorded this conversation:

Keith Wakefield, the leader of the Labour group on Leeds city council, drives two students and an undercover reporter to Gipton and Harehills.

Wakefield: So our job, I believe, will be to make sure they have either done it [their postal vote] or we help them…Now the reason why it’s really, really important on this one: the average postal votes for a ward in [the] city is 800 to 1,000, there’s 4,000 postal votes [in Gipton and Harehills]… So it’s make or break…as you know, more people vote through postal than not. If we can get back those votes for Labour we can win this. So it’s really, really important that we chase the votes. I have never known as many postal votes in any election in 20 years.

Student 2: Do you know why it’s so many?

Wakefield: Yes. We can speak amongst friends. It’s very much an Asian, half Asian, half white working-class ward. And er, both, all the parties use the Muslim connections, which probably some people would frown at, and families to get everyone on postal.

Student 1: That’s exactly what we’ve done in our ward.

Wakefield: Oh right yes. So while there is paranoia in the country about the use of Asian voting systems…as we all know, they have a brilliant network; they pass it on; they all want to use the postal.

Wakefield, students and undercover reporter arrive in the car park at the Fairway pub in Gipton and meet Graham Hyde, a Labour councillor. Hyde briefs the group on what to do.

Hyde: Simply, what I want you to do is you knock on the door, say you are from the Labour party…‘Have you received your postal votes?… These are all Labour people. ‘Have you returned it?’ If they give it to you in your hand, you collect it and put it in the postbox…If they haven’t, you say: ‘Have you got your postal vote?’

Wakefield: You’ve got to do it for them.

Hyde: The thing is we want to know who has returned them. And if you are knocking on the door and they have a postal vote and they haven’t done it, ‘Would you like to do it? We’ll put it in the post?’ You have to do it very careful…because they [the opposition or the authorities] are watching everyone.

Wakefield: I know, I know.

Hyde: All these here are postal votes.

Wakefield: All we are doing is chasing the postal… Do you have to seal it [the postal ballot] before posting?

Hyde: Yeah, seal it all up… We also want to check they are voting Labour as well. Yeah? If they are voting Liberal Dem, then don’t offer to put the postal vote in. We’ve found 10 so far out of all those we’ve done in Gipton.

Student 3: ‘Yes, I’ll post that for you!’ [laughs]

Hyde: Yes that’s it, and then it ends up in the toilet [laughs]. I know…Put the postal vote form out of sight, or if you are passing a postbox throw it in it. Don’t get caught with any on you. We are not supposed to collect them.

Student 4: Yes, it’s illegal to collect.

Hyde: Yeah.

Reporter: Is it? Why?

Student 4: It’s illegal to collect, isn’t it?

Hyde: Yes it is, but we’ve done 25% already, so…

As we draw closer to the local elections, a group of prominent economists have today put forward their argument for higher interest rates in an open letter to the Bank of England in which they state that inflation risks could surge out of control if the Bank does not raise rates soon and quickly.

Tim Congdon, Gordon Pepper and others have said that broad money (known as M4, and currently rising at 12.8% per annum) points to much higher inflation next year.  Congdon told the Telegraph:

“Inflation is back and it’s going to get to 4pc by the middle of the next year, even though I expect the CPI to fall back a little over coming months first.

“You can’t get away with money supply growth of 12pc or 13pc like this. It’s not as bad as earlier cycles, but it is nevertheless bad and it’s going to end the usual way. Rates will have to go to 6pc to 6.5pc, and may have to reach 7.5pc,”

Mervyn King is also concerned about M4, in opposition to other MPC members such as David Blanchflower who believe monetarism is dead and buried.

Mervyn King told the Commons Treasury Select Committee last month that he was watching the money supply closely. “I’m more concerned with monetary aggregates than some of my colleagues. To ignore it as a potential influence could lead into tricky territory.

“My concern about the money numbers is whether they are telling us something about the inflation numbers not in two years but in maybe three to five years,” he said.

Mr King’s comments were a veiled criticism of the doveish faction on the MPC, many of them political appointees picked by Chancellor Gordon Brown. Insiders at the Bank are said to be particularly scathing about the choice of David Blanchflower, best known for his academic opus Money, Sex and Happiness, an area of research viewed as frivolous by monetarists.

It remains to be seen whether the CPI measure will fall back to target later this year as the MPC has forecast, but they will be looking further ahead than that in making their rate decisions, and if the opinions of these economists are anything to go by, rates could have to go quite a bit higher than Gordon wants.  They are already paying the price for failing to raise rates quick enough in 2006, and now rates will have to go higher for longer.  With the “low inflation” pillar of his potemkin economy crumbling and about ready to collapse, how long will Gordon last in number ten?

Peter Spencer of the Ernst and Young ITEM Club economic think-tank has characterised the UK consumer as being addicted to credit, according to the latest ITEM club report.  The report says that while the outlook for growth remains reasonably good, most of that growth is likely to be based on borrowing, as consumers follow Gordon’s lead and steal from their future to pay for current consumption.  That has created a country that is complacent about risk, and an economy that is skating on thin ice.

“Many people are following the Chancellor’s lead and are borrowing to finance consumption.”

“Both as individuals and as a country we have borrowed a huge amount to support this growth,” Mr Spencer said.

“The bottom line is that we are all living beyond our means. In the short term, Mr Brown has resorted to borrowing for consumption. If the Chancellor is forced to borrow so much when the economy’s so sweet, what will happen when it turns sour?”

The report highlights the fact that the current account deficit has ballooned, despite a healthy economy and robust tax revenues. Government borrowing is higher than forecast, with overall public sector net borrowing now expected to be £34bn in 2007 to 2008, up from the £31bn projected in the pre-Budget report.

Mr Spencer said: “The UK’s current deficit has reached 3.5pc of GDP which suggests that as a country we are close to the edge. Ultimately, we are all skating - not to say wobbling - on thin ice. There’s a danger that we are slithering into complacency.”

“The current benign macroeconomic environment has made both individuals and corporates overly relaxed about risk, inflating asset values and transactions and boosting borrowing and spending,” it reads.

“Homeowners have been under pressure from rising tax and utility bills but all the indications are that they have kept spending as if it was going out of fashion. The saving ratio [the proportion of income people save] has fallen back to just 3.7pc meaning that many households are borrowing to finance current spending.

“Lenders have relaxed their criteria and we have been gearing up accordingly.

“The US sub-prime market, which now threatens to contaminate the rest of the mortgage market, provides a clear warning of what can happen when lending criteria become too lax.”

Growth in the UK economy was driven by the business and financial services sector. The report said the strength of the business sector was reflected in industrial confidence, mergers and acquisitions, fixed investment and employment.

“It also underpins the high value of the stock market and low level of corporate yield spreads, lowering the cost of capital and providing further impetus to M&A and business investment.”

However, the ITEM Club expresses grave concerns over long-term risks to the economy: “A major threat is building up in financial market gearing, asset valuations and overconfidence.

” These markets can turn on a sixpence. The relentless upward march of prices leaves them prone to relatively minor shocks, as we saw in February. Moreover, the burgeoning current account deficit leaves the UK prone to currency weakness.

“The problem is that if asset prices do not stabilise this will leave the UK, with its heavy dependence upon financial markets, vulnerable to a crash.”

The Independent lays into Brown today, saying that he is a nasty piece of work for the way he has treated those people who’ve been unfortunate enough to see their pensions go belly-up.  But to expect anything different from the Iron Chancellor is clearly misguided, as he has shown his true colours only too well in recent times.  Public dissatisfaction with Brown is bad, but with the move nextdoor and more and more past mistakes coming to light, it’s likely to get far worse.

Gordon Brown is a pretty nasty piece of work. Over the past three years, he has done everything in his power to prevent the Government having to provide financial help to the 125,000 people who lost their occupational pensions when their companies went bust. And every concession that has finally been made, every penny that has eventually been paid, has come only after a lengthy battle.

By the time this year’s Budget came round last month, the political pressure had become so intense that Brown finally conceded to enhance the grossly inadequate Financial Assistance Scheme (which he set up in 2004 to stave off another backbench revolt). However, his new and more generous package still fell short on just a few details.

For a start, one of the biggest problems with the FAS is that those who qualify aren’t getting the money quickly enough - some died before they saw a penny. As a result, the campaigners had proposed that an emergency fund be set up to help those most in need. Getting rid of archaic rules that force bust pension-funds to buy annuities for their members was another suggestion that would help the remaining cash in distressed pension schemes be released immediately.

And finally, while the new FAS will cap benefits at £26,000 a year, well above the £12,000 cap originally put in place, there is still no inflation protection - ensuring that pensioners’ incomes will be reduced in real terms every year.

The combined cost of sorting out these final niggles would be negligible. However, when the opposition parties laid down an amendment to the Pensions Bill this week, which would have dealt with all these issues in one fell swoop, the Government whipped its members to vote it down. Although several Labour MPs rebelled, the Government still narrowly won the vote - a political victory for Brown, but yet another blow for those who lost their pensions.

It’s sad that this issue has got caught up in Brown’s campaign to become the next Prime Minister, and disappointing that he didn’t realise he could have done the right thing and emerged looking compassionate rather than mean-spirited. Who knows; the public may even have started to believe in the cuddly image the Chancellor has been trying to cultivate by pretending that he listens to the Arctic Monkeys.

Although the Government began trying to fight off its responsibility to the 125,000 victims of this scandal by saying that it was not its job to underwrite private sector pensions, the precedent of this case is no longer very important. With the Pension Protection Fund in place, people who lose their pensions in future will have a lifeboat waiting to rescue them - funded by private, not public, money.

The real message that the Government’s stubborn stance has sent out is that, while it might be willing to send money to the other side of the world if there’s a natural disaster, it’s not prepared to put its hand in its pocket for its own citizens when their life savings have been washed away through no fault of their own.

This week’s defeated amendment still has life. It must be voted on in the Lords, and if it is upheld there, the Government will face yet another Commons vote. In the meantime, however, thousands of people struggle on without the pensions they are owed.

This is Brown’s chance to show that he has an ounce of compassion in him.

Hardly likely.

Over recent weeks we have seen a growing realisation amongst journalists and newspaper editors that Brown’s economic miracle is not all that he has promised, and that he is likely to leave a trail of destruction in his wake as his desperate gambles with the British economy begin to unravel over the coming few years.  The group was joined today by Larry Elliot in the Guardian who believes that Brown’s single achievement and selling point for his stay as Prime Minister, the economy, is not the “inflation proof show-stopper” that has been claimed.

Britain has become a giant offshore hedge fund in which the viability of the balance of payments depends on the City’s ability to gamble more successfully than its counterparts in Frankfurt, Tokyo and New York, and where an excess of cheap money has allowed consumers to feed their spending habit, either directly through their credit cards or by using their homes as cash machines. The result is an economy in which the financial sector is the main source of growth, and which is even more heavily skewed towards the south-east of England than when Labour came to power. The gap between rich and poor is growing too.

In his budget speech last month, Brown boasted that inflation since 1997 had averaged 1.5% during his stewardship of the economy, half the level of the previous decade. This week’s figures showed it running at 3.1%, and that’s using the yardstick for assessing the cost of living - the consumer prices index - that is most favourable to the government. Until 2003, Brown used the retail prices index excluding mortgage interest payments, and on that basis inflation is running at 3.9%. Indeed, had the chancellor stuck to his old measure, King would have had to use his fountain pen in three of the past four months.

Using the all-items RPI, still the preferred benchmark for pay negotiations, prices are 4.8% higher than they were 12 months ago. That has left the City convinced that interest rates will be raised by the Bank of England next month and that further increases may be necessary later in the year.

Brown would say that, even if interest rates were to rise to 6%, that would still leave them where they were when Labour came to power. The problem is, though, that Britain is now so heavily in debt that even quite small increases in borrowing costs could hurt. They will certainly affect political sentiment, not least because it’s a good bet that quite a few voters would themselves secretly admit that spending more than you are earning - be it at a personal or a national level - is unsustainable.

In the past, periods of excess have been followed by king-sized hangovers, and we may be in for some pain this time as well. Brown is reluctant to talk down the pound, which would be one way of boosting exports, and a different mix of monetary and fiscal policy - higher taxes to dampen down consumption, offset by lower interest rates and a lower pound - is a political non-starter at the present juncture, given the scale of the increase that would be needed.

New Labour is ideologically opposed to more innovative ideas, such as a two-tier system of interest rates that would discriminate between money borrowed for investment and that used for speculation. Nor has it done more than dabble with the idea that there needs to be radical reform of land and property taxation in the UK to keep the housing market in check. Having been blamed, unfairly, for single-handedly destroying pensions, Brown is hardly likely to lay himself open to the charge that he wants to do the same to property.

A decade ago, a more activist industrial strategy - perhaps giving support to Britain’s fledgling biotech and environmental industry, as provided by competitor countries for their high-growth sectors - might have helped rebalance the economy, but it’s a bit late now.

Instead, Brown’s arrival in power will coincide with an economic slowdown of one sort or another. Either the chancellor will be successful in his attempt to put the squeeze on pay, in which case below-inflation wage deals will lead to falling real incomes, or deals will be struck at about the current RPI inflation rate, in which case the Bank will have kittens at the prospect of a wage-price spiral and keep on raising interest rates until higher unemployment drives the message home. A good way to overturn a 15-point opinion poll deficit? I wouldn’t bank on it.

It’s reported in the newspapers today that Gordon has said he intends to serve seven years as PM, three in this term before a general election in 2010, followed by another four years assuming he wins.  However, with public opinion firmly against him and an unfolding economic disaster waiting to happen, it’s far more likely that Gordon will struggle to survive his first 3 years, let alone achieve any more.  Gordon was effectively given a get-out-of-jail-free card today by David Miliband, who has announced he does not intend to stand against Brown in the competition for the Labour leadership likely to take place in a few months time.  Of course it matters little what happens to Gordon now, the damage has already been done.

Mr Miliband said that he was “not a candidate” in the race for Labour leader. He would still be under 50 in seven years’ time.

Under the plan being discussed, Mr Brown would serve for one full Parliament if he wins the next election.

“Gordon is planning to do three years (to the next election) and four years and then step down,” an ally said.

“That is seven years. You only have to look at Thatcher and Blair, who did 10 years.”

Gordon was dealt the final insult by Tony Blair today, who failed to show up to the Commons to vote for Gordon in the no-confidence motion.  One has to wonder that if Blair had been compelled to vote, which way he might actually have voted.

The Daily Express has the pick of the bad news stories for Gordon today, with its frontpage headline suggesting that inflation could lead to base rate rises up to 6%, and consequently larger mortgage bills for homedebtors.  They also include a rather telling comment about Gordon’s handwriting, based on the signature in his letter to Mervyn King.

CRIPPLING rises in mortgage bills were forecast as “certain” last night after a shock leap in inflation.

Economists tipped the base rate to rocket over the 6 per cent mark, leading to eye-watering hikes in repayments for millions of home owners.

And the mortgage misery spelled humiliation for Chancellor Gordon Brown as the Bank of England took the unprecedented step of formally warning him that prices are running out of control.

Households now face punishing interest rate rises on top of spiralling costs for fuel and consumer goods as well as the biggest tax burden in history.

A quarter-point jump to 5.5 per cent will see payments on a £100,000 mortgage rise from £722.80 to £738.99.

But if interest rates peak at six per cent as predicted by some economists, the monthly payment will soar to £771.82 – an increase of almost £50 a month. Owners paying off a £200,000 home loan – the average price of a three-bedroom semi – will have to find an extra £1,176 a year.

At the same time there is the prospect of a summer of discontent, with huge pay de­mands by unions expected to keep wages in line with rising prices. Eco­nomist Phil Shaw, of international banking group Investec Securities, said: “The inflation figures make an interest rate rise a certainty, along with the possibility of another rate rise
bey­ond that.”

Figures due to be released today from the Office of National Statis­tics showed that inflation hit 3.1 per cent last month, way above the Treas­ury’s 2 per cent target.

The rise in the Consumer Prices Index – which does not include home loans – was up from 2.8 per cent in February.

The news sent shockwaves through global money markets, with the pound briefly passing over the two-dollar mark.

In exceeding the target by a full percentage point, the inflation rise reached the level where Bank of England Governor Mervyn King is obliged to provide the Chancellor with a written explanation.

It was the first time Mr Brown has faced such a letter. In it, Mr King warned that the Bank will almost certainly hike interest rates next month from 5.25 per cent.

He said: “The Monetary Policy Committee remains determined to set interest rates at the level required to bring inflation back to the two per cent target.” This was likely to have that effect on inflation “within a matter of months”.

He blamed an “unexpectedly sharp increase in energy prices” which had offset a fall in petrol prices, and he highlighted rises in food prices caused by global weather conditions hitting production.

Firms were also raising prices of consumer goods in response to “robust” spending by shoppers. “Furniture and furnishings rose by almost 10 per cent in March, a record rise,” his letter said.

Both the Chancellor and Tony Blair tried to shrug off the inflation nightmare yesterday. In his reply to Mr King, Mr Brown wrote: “Inflationary pressures have been a feature of the major industrial countries in recent times.”

Effectively backing further interest rate rises, he added: “I agree that the Monetary Policy Committee’s approach is appropriate to the Government’s monetary policy objectives, namely to maintain price stability.” Meanwhile, Mr Blair told his monthly Downing Street press conference: “There’s tremendous pressure on families all the time. I think it’s a feature of today’s world that people are stretched.” And he risked ridicule by claiming that Mr Brown was “the best Chancellor since the Second World War”.

Shadow Chancellor George Osborne said: “Gordon Brown’s reputation for economic competence is unravelling before our eyes.” Lib Dem Treasury spokesman Vince Cable said interest rate rises “will cause misery for thousands of people in severe debt who have borrowed up to the hilt to secure a mortgage. Debt servicing problems will only get worse.”

Howard Archer, economist at Global Insight, said: “This is a thoroughly nasty set of data that essentially guarantees that the Bank of England will raise interest rates.”

Graeme Leach, chief economist at the Institute of Directors, said: “The case for a further quarter-point rise cannot be in doubt. It looks like a done deal.” Louise Cuming, head of mortgages at moneysupermarket.com, said the increase had taken the City by surprise.

It threatened those trying to get on the property ladder. “If we don’t get new buyers into the market, the market will stagnate,” she added.

Tony Woodley, general secretary of the Transport and General Workers Union, said: “Employers had better get used to the idea that our pay claims this year are aimed at winning workplace victories on pay so that workers can afford to meet their rising living costs.”

Mr Brown’s reply to the Bank of England interested handwriting experts. Erik Rees, of the British Institute of Graphologists, said: “This is the handwriting of a man whose statements you have to check and check again. The fact the word sincerely is virtually illegible is very apt.”

Mervyn King was forced to write a letter to Gordon today after the Chav Price Index hit 3.1%, the highest level since the measure began in 97.  The RPI, a more true measure of inflation, rose to 4.8%.  Last time RPI was at these levels, interest rates were 7-8%, yet the Bank of England seems content that rates around 5% are enough to control inflation.  Evan Davis hit the nail on the head today when he asserted that the China deflator may not be having such an influence as before.  The Bank predicts CPI will fall back to target by the end of the year, but they have been incorrect with predictions in the past.  If this prediction were to prove incorrect, the timing could not be worse.  The letter, incidentally, was barely worth the 10-year wait, and was largely along the lines of “please don’t sack me”.
Meanwhile Gordon will soon face a vote of no confidence in parliament over the pensions fiasco, the Tories using an opposition day to table the necessary motion.  This being parliament, Gordon is unlikely to lose the vote, but another vote - the local elections taking place in the first week of May - could prove far more damaging for Gordon.

It’s being reported in the press today that Gordon is to face questions in parliament after telling a news conference at the IMF that selling off Gold reserves in 1999 for a cut price was the “right thing to do”, despite the fact that Gold has nearly trebled in price since then.  The Times is reporting that this single decision alone by Brown, taken against the advice of his more experienced colleagues at the Bank of England, has cost the country £2bn.  To put that in perspective, Black Wednesday - when the Major government attempted to protect sterling within the ERM - cost £3.3bn, and was seen as a massive and catastrophic event at the time.

Insiders involved in the decision have broken ranks after an 18-month battle in which the Treasury has blocked attempts by The Sunday Times to make public the official advice received by Brown before he sold the gold.

They have revealed that Bank of England officials had serious misgivings over the chancellor’s determination to sell 400 tons of bullion in a series of auctions between 1999 and 2002, when the price was at a 20-year low. Since then the price has almost trebled, meaning the decision cost the taxpayer an estimated £2 billion.

The Bank of England, which has managed Britain’s gold reserves for more than 300 years, was never asked for its advice on whether Britain should sell the gold. A senior Bank of England executive said the timing of the sale was “not debated”.

At a secret meeting with senior gold traders, Bank of England officials were warned that the proposed auctions would achieve the worst price for taxpayers. The officials are understood to have agreed with the analysis but said they were powerless to influence the Treasury.

Warnings over the risks of losing money from the gold sell-off are understood to be set out in internal correspondence sent by Bank of England officials to the Treasury in 1999.

Last night the Bank of England sought to distance itself from the decision to sell off the gold. In an unusual intervention, it said: “In regard to the gold sales, the Bank acted solely as agent and the decisions were taken by HM Treasury.”

Its statement casts doubt over previous assurances given by Treasury ministers and Tony Blair to parliament that the decision to sell the gold reserves was made on the “technical advice of the Bank of England”.

A senior investment bank director, present at a meeting held by the Bank of England in May 1999 to discuss the sell-off, said: “We were told this was a Brown thing and that the Bank had no say over what was going on. The officials were unhappy.”

The gold sell-off is seen in the City as Labour’s equivalent of “Black Wednesday”, when John Major’s government lost £3.3 billion in a day in its failed attempt to prop up the pound.

Parliamentary questions will take place on Tuesday.

With the local election campaign kicking off, Guido Fawkes has been doing a daily update showing whereabouts Gordon has been off campaigning, and what he’s been up to. At least it keeps him out of Westminster dreaming up new ways to rob us of our hard earned. Here’s the round-up so far:

Day 1, April 3: Gordon was mumbling at a press conference about having only “30 days to save devolution”. He left behind a typed crib sheet with phrases such as “Tony Blair has always agreed with me in the difficult decisions I have had to take and I have always agreed with him.” He also left his handwritten notes behind which amused all graphologists.

Day 2, April 4: Gordon was in Edinburgh launching a Fabian pamphlet with Douglas Alexander making the case against freedom for Scotland.

Day 3, April 5: Today Gordon was off to Gleneagles, promising to “give every child in the world a better chance - freed from poverty and liberated by education.”

A few months ago UNICEF reported that British children were the unhappiest in the Western world. Youth unemployment is higher now than it was in 1997. 15% of British school-leavers are functionally illiterate. Bit early to be claiming “mission accomplished” at home?

Day 4, April 6: Speaking at a joint press conference with Jack McConnell, the Scottish First Minister, Mr Brown accused the SNP of ducking questions.

Speaks from back of a bus to (ironically) anti-democratic communists condemning anti-democratic racists about “Hope not Hate”. Video here.

According to the Guardian “Our cheery chancellor of the exchequer’s bold makeover as a hip, contempo dude has, it seems, a wee way to go yet. Appearing with Celebrity Big Brother runner-up Jermaine Jackson on the Mirror’s anti-racism bus in Glasgow, the Broon, who foolishly spent the early 1970s battling with a doctoral thesis on the Scottish Labour party (1918 to 1929) rather than jiving on down with the Jackson 5, first needed an advance Treasury briefing on who exactly Jermaine was. He then, since no one had thought it necessary to tell him that Jermaine was a man not a woman, boarded the bus, strode up to JJ’s wife, shook her hand, and told her how very much he enjoyed her work. And to think he’s our next PM.”

He was also a speaker at the annual lunch of the Newspaper Press Fund in Glasgow.

Day 8, April 10: Gordon Brown was at Mossmorran in Fife praising ExxonMobil and Shell’s contribution to the economy.