Labour dithering cost one million jobs claims BoE Chief

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By Martin Kelly
 
Governor of the Bank of England, Sir Mervyn King has claimed that a lack of action by the last Labour government in the early days of the banking crisis could have cost up to one million people their jobs.
 
The accusation was contained in comments Mr King made in a lecture broadcast last night in which the bank chief said he warned Gordon Brown in early 2008 that action was needed in order to prevent a crisis.

According to Mr King, the former Labour PM and his advisors failed to heed his warnings which he claimed, could have prevented the recession that hit the UK in 2009.

Brown and his Ministers dithered until October of 2008, but by then said Mr King it was “too late to prevent the financial crisis from spilling over into the world economy”

In the lecture last night, the Bank governor described the internal wranglings that took place over the Labour Government’s response to the banking crisis.

He said: “In August 2007 came the moment when financial markets began to realise that the emperor had no clothes.

“From the start of the crisis, central banks provided emergency loans but these amounted to little more than holding a sheet in front of the emperor to conceal the nakedness of the banks. They didn’t solve the underlying problem – banks needed not loans but injections of shareholders’ capital in order to be able to absorb losses from the risky investments they had made.

“From the beginning of 2008, we at the Bank of England began to argue that UK banks needed extra capital – a lot of extra capital, possibly £100 billion or more. It wasn’t a popular message.”

Sir Mervyn said the “bold action” to largely nationalise RBS and Lloyds Banking Group took another nine months.

“That bold action in October 2008 could have happened sooner,” he said. “Bailing out the banks came too late to prevent the financial crisis from spilling over into the world economy. The realisation of the true state of the banking system led to a collapse of confidence around the world and a deep global recession. Over 25 million jobs disappeared worldwide. And unemployment in Britain rose by over a million.”

Mr King’s comments were seized on by Labour’s political opponents who claim it destroys the party’s claims that the they had acted swiftly when the crisis emerged.

Commenting on the claims, SNP’s Westminster Treasury Spokesperson Stewart Hosie MP said.

“This is an extraordinary intervention from the independent chief of the Bank of England.

“It blows apart Labour claims of swift action to avert the banking crisis.  They had been warned nine months earlier that a capital injection was needed – yet they sat on their hands and did nothing.

“Rather than ‘bold action’ on the banks, it was ‘no action’ until the UK economy was on the edge of a precipice.

“This slow response is nothing short of economic negligence from Labour, and they have to answer to each and every person who has lost their job as a result.

“All three of the London based parties have played their part in this continued economic crisis.

“Labour inertia first led us into recession, and Tory ineptitude, aided and abetted by their lib-dem partners, has taken us back there.

“It’s time economic powers were in the hands of a decisive Scottish Government who would take action to create jobs and grow the economy out of the mess they have got us into.”

Sir Mervyn admitted he himself should have did more to draw attention to banking practices that ultimately led to several British banks having to be bailed out.

In the lecture he claimed that a lack of regulation allowed banks to take unacceptable risks and that changes introduced by former PM Gordon Brown left the BoE powerless to act.

It also emerged that the bank chief urged the current UK coalition to introduce new laws in order to prevent the disaster happening again.

Mervyn King’s comments come at an inconvenient time for the Labour party who are fighting local elections throughout the UK and face stiff competition from the SNP in Scotland.

They also follow economic figures which show the UK has plunged into a second recession under the stewardship of the Conservative/Lib Dem coalition.

52 COMMENTS

  1. The very last thing Gordon Brown was, he was no visionary. He wanted the Premiership to satisfy his ego. He was a demogogue and a bully, elevated way past his station in life, without any real life experience. Backed up by a lawyer called Darling, neither of them had any experience for the jobs they were occupying.
    Come the crisis, they vascillated and dithered as this article identifies.
    The greatest crime of the millenium was the socialisation of the bank debt and the maintenance of the culture that nearly brought the UK down.
    Brown was simply a disgrace bordering on the criminal, Darling, little better.
    Never had any time for them and still don’t.

  2. The very last thing Gordon Brown was, he was no visionary. He wanted the Premiership to satisfy his ego. He was a demogogue and a bully, elevated way past his station in life, without any real life experience. Backed up by a lawyer called Darling, neither of them had any experience for the jobs they were occupying.
    Come the crisis, they vascillated and dithered as this article identifies.
    The greatest crime of the millenium was the socialisation of the bank debt and the maintenance of the culture that nearly brought the UK down.
    Brown was simply a disgrace bordering on the criminal, Darling, little better.
    Never had any time for them and still don’t.

  3. Just noticed your @newsnetscotland twitter account no longer exists you might want to check that out.

    Was trying to send you a DM of the following which if true is a huge story

    You might want to check this out
    Graham Scott – Ward 10 – East Kilbride East
    Labour bent as ‘f***’
    http://twitpic.com/9gt9e6
    http://www.southlanarkshire.gov.uk/press/article/518/make_your_vote_count_today
    [b]
    [Online Editor – An administrative glitch had led to some problems with the twitter account. We are currently trying to resolve this.][/b]

    • Well I guess we cannot expect anything else, they just go lower and lower.
      Ref Merv King, again labour gets it in the neck, no more than they deserve.
      Gordon Brown in the s**** again. He really did do a lot of harm, he should depart these shores and never be seen or heard of again.

    • Well I guess we cannot expect anything else, they just go lower and lower.
      Ref Merv King, again labour gets it in the neck, no more than they deserve.
      Gordon Brown in the s**** again. He really did do a lot of harm, he should depart these shores and never be seen or heard of again.

  4. Just noticed your @newsnetscotland twitter account no longer exists you might want to check that out.

    Was trying to send you a DM of the following which if true is a huge story

    You might want to check this out
    Graham Scott – Ward 10 – East Kilbride East
    Labour bent as ‘f***’
    http://twitpic.com/9gt9e6
    http://www.southlanarkshire.gov.uk/press/article/518/make_your_vote_count_today
    [b]
    [Online Editor – An administrative glitch had led to some problems with the twitter account. We are currently trying to resolve this.][/b]

  5. This story is not true there is no way that Gordon Brown should be blamed for what happened it was all Alex Salmond’s fault just go and ask Lamont she will tell you the SNP has brought it all own with the help of Murdoch.
    ONLY JOKING.

  6. This story is not true there is no way that Gordon Brown should be blamed for what happened it was all Alex Salmond’s fault just go and ask Lamont she will tell you the SNP has brought it all own with the help of Murdoch.
    ONLY JOKING.

  7. I hope there will be an inquiry into this. Uk level, Scottish Parliament, Local Authorities, Commuity Councils.

    Did I get that right Johann?

  8. I hope there will be an inquiry into this. Uk level, Scottish Parliament, Local Authorities, Commuity Councils.

    Did I get that right Johann?

  9. Darling has said as much as well; Gordon’s dithering made a bad situation worse.

    Yet we are surprised? Given Brown has been dithering over the low level radium problems at Dalgety Bay for 20+ years.

  10. Darling has said as much as well; Gordon’s dithering made a bad situation worse.

    Yet we are surprised? Given Brown has been dithering over the low level radium problems at Dalgety Bay for 20+ years.

  11. The stories about Labour getting up at 5.30 am on polling day is just to ensure they sleep through the results programme.

  12. The stories about Labour getting up at 5.30 am on polling day is just to ensure they sleep through the results programme.

  13. The problem is that Joanne Lamont will no doubt try and blame AS and the BBc will report it.

    Any early poll indications yet?

    • Deathly silence on the polling front.

      I’ve seen no sign in UK poll subsets of the SNP doing anything other than really well. The last proper (random sample rather than online survey of registered users as per yougov) Scotland polls were in Jan/Feb and had the SNP on ~50% for Holyrood.

      As I’ve noted elsewhere, there was a yougov scotland-wide on the 24th (I took part) yet not seen hide nor hair of it.

      I’m taking the silence as good news as if Labour were riding high we’d know about it – they would not be able to contain themselves.

    • Deathly silence on the polling front.

      I’ve seen no sign in UK poll subsets of the SNP doing anything other than really well. The last proper (random sample rather than online survey of registered users as per yougov) Scotland polls were in Jan/Feb and had the SNP on ~50% for Holyrood.

      As I’ve noted elsewhere, there was a yougov scotland-wide on the 24th (I took part) yet not seen hide nor hair of it.

      I’m taking the silence as good news as if Labour were riding high we’d know about it – they would not be able to contain themselves.

  14. The problem is that Joanne Lamont will no doubt try and blame AS and the BBc will report it.

    Any early poll indications yet?

  15. Not totally O/T but I believe Mr Salmond was to address a meeting of business leaders – the Institute of Directors or saome such – does anyone know what he said and how he was received?

    Been out of the country so may have missed any reports about it.

    • [url]http://www.youtube.com/watch?v=TGM2ZRM6s2Q[/url]

      The reason you missed reports about it, is because the MSM didn’t report it.

      Seems that Boris Johnson might have got a bit upset, though, at Salmond coming to steal his jobs…

      • Thanks for the link. I was hoping it might have been reported on NNS, even if it was just a link to the speech, because I was pretty sure it would receive scant attention anywhere else.

      • Thanks for the link. I was hoping it might have been reported on NNS, even if it was just a link to the speech, because I was pretty sure it would receive scant attention anywhere else.

    • [url]http://www.youtube.com/watch?v=TGM2ZRM6s2Q[/url]

      The reason you missed reports about it, is because the MSM didn’t report it.

      Seems that Boris Johnson might have got a bit upset, though, at Salmond coming to steal his jobs…

  16. Not totally O/T but I believe Mr Salmond was to address a meeting of business leaders – the Institute of Directors or saome such – does anyone know what he said and how he was received?

    Been out of the country so may have missed any reports about it.

  17. Well this will stuff the ‘you lot still owe us for bailing out [b]NatWest[/b]-RBS’ argument…

    http://www.bbc.co.uk/news/business-17944066

    [b]RBS repays £163bn emergency loans[/b]

    [i]Royal Bank of Scotland is to say that as of next week, it will have repaid all the £163bn of emergency loans it received from UK and US taxpayers, BBC business editor Robert Peston says.[/i]

    • I suppose this £164 million is the same sort of funny money the Bank of England spew out.

      Who the hell are they kidding.

      Like the song says “There’s something queer going on here”

    • I suppose this £164 million is the same sort of funny money the Bank of England spew out.

      Who the hell are they kidding.

      Like the song says “There’s something queer going on here”

    • Probably quantitative easing in action, print money as taxpayer’s debt, hand it to the banks, who hand it back to the UK treasury. Voilà! RBS owes tax payers nothing. Taxpayers have just increased their debt by 164 billion. and we still own the bank, no change there. Paid for with debt.

      Scotland’s share is 100 Billion so far, but I dread to think what it will be in 2014, when we stop writing blank cheques to Westminster ..

      There must come a point when we say .. debt created in the last frenzied years of this out of control Westminster government does not belong to Scotland.

    • Probably quantitative easing in action, print money as taxpayer’s debt, hand it to the banks, who hand it back to the UK treasury. Voilà! RBS owes tax payers nothing. Taxpayers have just increased their debt by 164 billion. and we still own the bank, no change there. Paid for with debt.

      Scotland’s share is 100 Billion so far, but I dread to think what it will be in 2014, when we stop writing blank cheques to Westminster ..

      There must come a point when we say .. debt created in the last frenzied years of this out of control Westminster government does not belong to Scotland.

  18. Well this will stuff the ‘you lot still owe us for bailing out [b]NatWest[/b]-RBS’ argument…

    http://www.bbc.co.uk/news/business-17944066

    [b]RBS repays £163bn emergency loans[/b]

    [i]Royal Bank of Scotland is to say that as of next week, it will have repaid all the £163bn of emergency loans it received from UK and US taxpayers, BBC business editor Robert Peston says.[/i]

  19. Greetings fellow Independence-istas! Been offline for several days fighting with a p**y pc, it is true that you dont miss something till it has gone.
    Have I missed much?? 🙂

    • No Peter, you haven’t missed much, the unionists are still blabbing on about Murdoch and the ‘cosy’ relationship..Thats about it really.

    • No Peter, you haven’t missed much, the unionists are still blabbing on about Murdoch and the ‘cosy’ relationship..Thats about it really.

  20. Greetings fellow Independence-istas! Been offline for several days fighting with a p**y pc, it is true that you dont miss something till it has gone.
    Have I missed much?? 🙂

  21. Well voted SNP 1 and 2. Gave the Greens my 3rd vote.

    A Lib Dem candidate and Labour still outside handing out leaflets. NO SNP.

    Turnout was 21% on my particular section of the ward of around 1000 people. Very poor.

    Its about time people realised not all politicians are the same. Even if you hate everyone, vote for the person you hate the least. Hopefully come Independence it will reenergise peoples interest.

    For me politics is very interesting because of the referendum but also extremely stressfull because just what is at stake. I yearn for the day I can look at the individual policies of each candidate and party and vore accordingly, instead I’m forced to vote for the only party that has Scotlands interest first. (not that I ‘m reluctant it would just be great to have variety).

    • SNP then Indy (with SNP sympathies from a look into him) for me. No green candidate in my ward otherwise they’d have got a 2 from me with indy 3.

      Personally, we have our referendum. So long as Lab/Lib/Con take hits I’m happy for e.g. the Greens, independents to do well. While I vote SNP at national level, I am a fan of PR and consensus politics.

      • Vive La Difference but at least let’s get to the point where it’s OUR decision!!!!
        OR Are we not up to it?????

      • Vive La Difference but at least let’s get to the point where it’s OUR decision!!!!
        OR Are we not up to it?????

    • SNP then Indy (with SNP sympathies from a look into him) for me. No green candidate in my ward otherwise they’d have got a 2 from me with indy 3.

      Personally, we have our referendum. So long as Lab/Lib/Con take hits I’m happy for e.g. the Greens, independents to do well. While I vote SNP at national level, I am a fan of PR and consensus politics.

    • Macdoc, if you feel there’s a shortfall of SNP activists in your district, could you not volunteer to do a stint yourself? There’s a limit to how much time ordinary people can get off work to attend to polling stations and so on. I myself was unable to do anything but pick up the A-boards at close of poll, due to pressure of work.

    • Macdoc, if you feel there’s a shortfall of SNP activists in your district, could you not volunteer to do a stint yourself? There’s a limit to how much time ordinary people can get off work to attend to polling stations and so on. I myself was unable to do anything but pick up the A-boards at close of poll, due to pressure of work.

  22. Well voted SNP 1 and 2. Gave the Greens my 3rd vote.

    A Lib Dem candidate and Labour still outside handing out leaflets. NO SNP.

    Turnout was 21% on my particular section of the ward of around 1000 people. Very poor.

    Its about time people realised not all politicians are the same. Even if you hate everyone, vote for the person you hate the least. Hopefully come Independence it will reenergise peoples interest.

    For me politics is very interesting because of the referendum but also extremely stressfull because just what is at stake. I yearn for the day I can look at the individual policies of each candidate and party and vore accordingly, instead I’m forced to vote for the only party that has Scotlands interest first. (not that I ‘m reluctant it would just be great to have variety).

  23. Council elections of real significance – probably the most important in a long time in judging the mood of a nation – and BBC Scotland have a Rangers story as the headline.

    While I sympathise with genuine rangers fans (not the group who wave jacks and shout abuse but those who really love football as a game) but seeing that headline says it all about the BBC.

    Fitba, murder, silly story, mair fitba, mair murder, survery says 1 in 10 people like marmite…

    The last week or so of Rupert, smear, Rupert, smear, no elections on – move along/nothing to see here/low turnout, back tae fitba…was..what can I say really? A sad state of affairs.

  24. Council elections of real significance – probably the most important in a long time in judging the mood of a nation – and BBC Scotland have a Rangers story as the headline.

    While I sympathise with genuine rangers fans (not the group who wave jacks and shout abuse but those who really love football as a game) but seeing that headline says it all about the BBC.

    Fitba, murder, silly story, mair fitba, mair murder, survery says 1 in 10 people like marmite…

    The last week or so of Rupert, smear, Rupert, smear, no elections on – move along/nothing to see here/low turnout, back tae fitba…was..what can I say really? A sad state of affairs.

  25. ss
    To the beeb Rangers epitomize the union. Mindless flag waving etc.Simples. Rangers fubarred Union fubarred and Beeb totally fubarred. What’s not to like?

  26. ss
    To the beeb Rangers epitomize the union. Mindless flag waving etc.Simples. Rangers fubarred Union fubarred and Beeb totally fubarred. What’s not to like?

  27. Gordon Brown was a TV journalist before he got into politics. He had no economic training whatsoever but his career taught him the value of spin. But he wasn’t very good at it though many who don’t know himstill imagine he was quite a nice guy.

  28. Gordon Brown was a TV journalist before he got into politics. He had no economic training whatsoever but his career taught him the value of spin. But he wasn’t very good at it though many who don’t know himstill imagine he was quite a nice guy.

  29. Brown didn’t squander 30 years of oil revenues single-handed.

    Hell mend the lot of them.

    ETA: That sounds awfully lenient on Brown. That was not the intended impression. For once I agree completely with Upspake (first comment).

  30. Brown didn’t squander 30 years of oil revenues single-handed.

    Hell mend the lot of them.

    ETA: That sounds awfully lenient on Brown. That was not the intended impression. For once I agree completely with Upspake (first comment).

  31. Soixante-neuf,
    You are right, Upsakes comment (# 1) is spot on and has portrayed Gordon Brown to exactly what the fool is.

  32. Soixante-neuf,
    You are right, Upsakes comment (# 1) is spot on and has portrayed Gordon Brown to exactly what the fool is.

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