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Mandelson: Tax and spend will end fear over economy
Joe Murphy, Political Editor17 Nov 2008
BRITAIN's economy is gripped by "fear" which can be overcome by next week's tax-and-spend giveaway, Lord Mandelson said today.
The Business Secretary confirmed that the pre-Budget report will be dominated by a "much-needed stimulus" designed to ease the recession.
Lord Mandelson said: "The next thing we have to do is defeat fear. Fear among consumers that's depressing demand, fear amongst banks that is inhibiting them from spending, fear amongst small and medium-sized enterprises that banks are just about to cut off their credit lines. A stimulus will counter those fears."
The pre-Budget report is expected to include instant tax cuts worth hundreds of pounds for the poorest households to put money in people's pockets for Christmas.
Billions of pounds worth of capital spending programmes are also likely to be accelerated to boost construction industries, and money underspent by Whitehall departments reallocated.
Lord Mandelson's comments echoed the US President Franklin D Roosevelt's inaugural speech that urged: "The only thing we have to fear is fear itself."
The Business Secretary added: The Government's job is to make the recession as short and as painless as possible."
Chancellor Alistair Darling is resisting pressure from Gordon Brown over the giveaway in next week's mini-budget, sources have confirmed to the Standard.
Although the pair agree on the need for a stimulus, he is demanding a lower overall figure to keep borrowing down.
The political ground for a spree was paved at the weekend when the G20 group of world leaders agreed on the need to boost global economies.
It was strengthened further when the head of the IMF, Dominique Strauss-Kahn, suggested each country's package should be worth around two per cent of GDP - in the UK around £30 billion. Government sources quickly indicated it was likely to be closer to £15 billion.
The Tories accused the Prime Minister of trying to "max out the credit card" by spending at the expense of future generations.
Shadow chancellor George Osborne said "unfunded" tax cuts, not matched by cuts in spending, were a "con".
Reader views (38)
Every Labour government has left office with the economy in tatters ; Ramsay MacDonald in 1932 , Clement Attlee in 1952 , Harold Wilson in 1970 , James Callaghan in 1979 and this one in May /June 2010 . It has taken Blair/Brown 11 years to destroy our economy because Margaret Thatcher's structural reforms and the benefits of being outside the Exchange Rate Mechanism after October 1992 left the UK with a thriving economy and an Exchequer full of cash . Since that time Blair/Brown have wasted this economic legacy on a series of failed policies , at great expense to the taxpayer . The total folly of Brown's taxation and destruction of private pension funds , excessive tax on small businesses and multi- nationals , the unnecessary expansion of an expensive and unproductive public sector payroll and pension liability , the wild excesses of the welfare state and the legal aid sytem are now plain for all to see .
- Marcus J. Tyson, London, 18/11/2008 11:26
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our unsavoury friend Val from the Costas is obviously unable to hoist into an obviously bigoted mind that since 1997 Chancellor Brown initiated a big expansion of PFI (that stands for Private Finance Initiative), a means by which this poor excuse for a government keeps a large slice of it's borrowing off-book. The sum of money has now reached staggering proportions, and, as in the way off-book borrowing has brought about the recent destruction of a number of banks, so it will see the destruction of this lousy government.
- Bingham Macnamara, lymington, uk, 18/11/2008 09:04
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"Debt was at 48% of GDP, again under the Tories. It is now just over 40%, excluding the amount of money used to bail out the banks, something the Tories voted against."
Val,
Labour did bring the debt down in their first two years BY STICKING TO TORY SPENDING PLANS. It was only when sensible economics left the room that the debt started building up again. Debt is now 43% of GDP excluding the Bank Bailouts, PFI debts which have ballooned over the last ten years AND the unfunded public sector pension pot whose liability has expanded even further as Labour fill Briatin with Diversity advisors and "5 a day" coordinators instead of Police and Social Workers.
Even Tony Blairs economic advisor till 2003 said Mandelson is talking "drivel" & the Gordon Browns chancellorship was "a shambles". He even went on to say that Keynes wouldn't have borrowed if the level of governement debt had been this high.
And did Osbourne create a run on the pound over the weekend. NO. But every time Brown talks about fiscal stimulae, it goes crashing down and down. Petrol would be 15p a litre cheaper if he was managing the pound.
New Labour = Same old failure
- M Spanner, Ilford, 18/11/2008 09:01
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Mandelson appeared on BBC's Five Live Breakfast 'sofa' yesterday morning to peddle propoganda lies of Crash Brown and Mendacious McLabour.
Today, incredibly, on the same programme Derek Scott, Blair's former 'financial adviser', came on to dis much of Mandelson's shpeel as being completely untrue, before going on to say that brown had screwed up Britain's domestic finances over his decade as Chancellor.
Trouble is, the Labour friendly UK and Murdoch media won't tell us the truth.
It's really only the political popularity polls in Murdoch's Times over the past fortnight that have dubiously 'slashed' the Tories lead!
- Dave, cumbria, 18/11/2008 08:47
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If you give me someone else's money preferably someone like Roman I will be more than happy to spend it, easy said when its not your money. But if you ask me to put future generations into mind boggling debt due to an incompetent bunch of imbeciles forget it.
- Den, London, 18/11/2008 08:34
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Lets see what the Great British public has to say about this....Get out onto the streets and test our democracy...that's what I say. Don't let GB be like GBW...handing the incumbent and us even more problems than when they were in office! In the US, its done and dusted but not so...yet...in the UK! Stop this idiocy NOW before we have s*#t to spen on S*^t!
- Demensky, Leicester, 18/11/2008 02:51
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Why anyone should think that any politicians have the answer to the current problems defies me. The problems arose without any of them spotting the trouble ahead. The government had over spent and had not saved up for a rainy day and now it is to spray money on its core supporters in the name of rescuing the economy. In truth all the Government want to do is to be re-elected!
- William, London, 17/11/2008 19:56
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Manglemouth can get the ball rolling by selling up and buying himself a one way ticket out of the country. Not important where he goes as long as he does. The guy is a weasel. Take his latest offering. 'BRITAIN's economy is gripped by "fear" which can be overcome by next week's tax-and-spend giveaway.' This parasite is paid hundreds of thousands of pounds a year and all he can let slide out of his smirky slippery squid slit of a mouth is that! He has to go! He should never have come.
- Jim, Auckland, New Zealand., 17/11/2008 19:47
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Some things to remember as Brown, Darling and Mandy conspire to buy off the next election with an inflationary dose of wild spending funded by printing more money (and therefore devaluing sterling exactly as Mr Osborne has said):
1) Inflation is the tax you didn't vote for
2) Brown has cooked the books on the Government deficit by ignoring Northern Rock,PFI and public-sector pension liabilities.
3) Government spending could easily be cut - just tell every department they have (say) 2.5% less next year, just like any private sector organisation would have to do. May be a salary cut for MPs would show the rest of us the way?
PS. Has Mandy discussed his tax and spend views with his yacht-owning friend first?
- David H, Aylesbury, Engalnd, 17/11/2008 18:59
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Re:Val Daniels, Mijas Costa. Spain
Gordon Brown said that the economic position he inherited from the Conservatives in 1997 was “fantastically good” according to Tom Bower, Gordon Brown’s biographer.
What have we now, gold reserves? Errr, well no, they were sold at a modest price.
Billions of pounds of assets from the Telecoms 3G licensing? Err, well no.
The list of boom & bust Brown's economic blunders is endless.
FYI, UK personal debt is 170% of GDP and public debt when PFI, future public sector pensions, bank bail-outs etc, are added also reaches to about 170% of GDP. Your hero is in fact the most incompetent boom & bust PM and former Chancellor in the G7 group of countries. If boom & bust Brown tries hard enough he will probably finish bottom in the G20 table as well.
Possibly Val you have been sitting in the sun for far too long to have a good view of Labour who are probably the most incompetent Government in British history?
- Joe, London, UK, 17/11/2008 18:23
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The current economic model is fundamentally wrong and the USofA, the UK, Germany, China, etc. have to realise this. A world of finite resources cannot depend on ever increasing growth. Also countries like the UK cannot solely survive on the service industry - we cannot just sell each other coffee and sandwiches! The most ridiculous thing I read recently was how many jobs had been created by outsourcing. Whether bin men, carers, etc. work for the council or a private contractor no extra jobs are created!
- Michael, London, 17/11/2008 18:17
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Val from Mijas: don't believe everything you read on the internet, especially if it is a government website. Go back to enjoying the view of the Costa.
- Nobby Clark, Perth, Scotland, 17/11/2008 17:49
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If ever the country needed help from the media to say enough is enough, it is now.
Tax and spend got us into this mess and to repeat the dose is a temporary remedy which will rebound and cause acute pain for years to come.
Stimulus means borrowing and will create a further short-term surge in spending, but it is not the answer.
A drastic cut in Government waste and the disbanding of the quango state should be the first priority, but it wont happen because it is Labours client state and its electoral defence.
Profligacy brought us here and it looks as if it will keep us here unless the media support the people to stop this economic madness.
- Jon Dee, N Warks UK, 17/11/2008 16:54
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I never thought that I could loathe and despise a British government so much as I do for the present lot.
- Anglo, Sussex UK, 17/11/2008 16:53
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This monkey along with Crash Gordon fall back to ideology to make decisions rather then common sense, when you are in a hole its best to stop digging, just like when you are heavily in debt then its best to stop borrowing.
All this goon has done since being called back to the cabinet is manipulate the media with stories to titillate them about Tory social happenings. The sad thing is while Sterling is burning the media have swallowed his crud.
- Gareth, Tonbridge/UK, 17/11/2008 16:45
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Surely whatever either party says it really comes down to credibility of who you believe-we, who have had an education do actually have minds of our own and are able to assess the truth.
- Harvey Lawrence, London UK, 17/11/2008 16:38
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If anyone has sabotaged the economy it is Labour.
It is Labour and its army of non-productive public sector layabouts, unemployment benefit scroungers that refuse to work, phony invalidity benefit claimants who are perfectly capable of doing some kind of job, and unmarried mothers who are better off than hard-working families, that has sabotaged the economy.
- Paul, Lincoln UK, 17/11/2008 16:34
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Mandy is so right. Osborne is being totally irresponsible with his latest remarks.
- Keith Price, Luton, England, 17/11/2008 16:34
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Beware the desperate politician.
- Tim, London, UK, 17/11/2008 16:32
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It is quite obviously not the solution, but the last-ditch, lazy option of a discredited government that tells the electorate to carry on spending, and does so itself in the hope of buying votes.
- Delphine, Oxford, 17/11/2008 15:55
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If Mandy Mandelson is labours solution to the problem we are all doomed. We could do a lot worse than to listen Vince Cable who really has been the one true ray of hope, wow did I never think I would say that
- Simon, Cornwall, 17/11/2008 15:51
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I'm unsurprised how thick a political skin Saint Gordon the Righteous and his acolyte Mandy have developed and how they manage to scrub from their memory the lead part they have played in this sorry saga. Had these financial collapses not occurred they would have been more that content to have let the credit party go on and on and they would have basked in the glory of unbridled capitalisim much as Saint Margaret (late of Assisi) had done in her time. It matters not a great deal to receive some piddling tax concession from Saint Gordon's table at this time when most people's domestic budgets have been knocked for six by this very person dispensing aid and who is the main perpetrator of the current financial hardship. Had he the guts to put the brake on credit three years ago and insisted that the FSA jump all over the money dealing spivs then we may have landed in the mud rather than have hit the cliffs. What a pair of hypocrytes and what traitors to the socialist cause. Another vote lost.
- John, Leighton Buzzard, Beds, 17/11/2008 15:13
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Lest ye believe lest we fail.This is a time to pull together for the nation not to pull it down like Osborne,
The truth is the Tories do not have a clue how to plull us out of this problem having put us into it histricaly so many times before remember 1992?
- Denis Regan, Harbin,China, 17/11/2008 15:03
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People complained that when Gordon Brown took over from Tony Blair there was no election. Now Lord Mandy has taken over from Brown and Alistair Darling with the same trick. But then as an ex-EU Commissioner he will have learned to do without democracy. In fact while working for the EU Mandy did mumble something about the "post democratic era", so be warned.
- Stevew, WMids, 17/11/2008 14:56
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I despair when I listen to the cretins running this country. They haven't a clue have they? God help us.
- Roger Slade, Winchester, Hampshire, England, 17/11/2008 14:43
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The £250 "gift" is hardly enough to cover the recent massive increases in electricity and gas, let alone restart the economy. Who is Crash Gordon trying to fool?
- John Smith, London, UK, 17/11/2008 14:19
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I have heard of rats being the first to leave the sinking ship, but Mandy, must be the first one to ever jump on board on.
- Peter Thurgood, London, UK, 17/11/2008 13:56
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So, let me get this straight; we are supposed to trust not just the idiots in charge who got us into this mess in the first place (remind me, who was chancellor for the last decade…), but we are also supposed to trust a man who has been fired twice for not being completely honest and who, I am totally convinced, views the electorate as a means to power, rather than the reason for power. The amazing thing is, some people will STILL vote Labour whenever they get a chance. Open your minds, people, the Labour experiment has failed to an extent beyond anything we could have imagined in 1997.
- St, London, 17/11/2008 13:23
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#Phil Jones, London
Get your facts right. The Labour Government spent the first 3 years after 1997 repaying the massive debt left by the John Major Government. Billions of pounds were lost as a result of the failed ERM policy, when Norman Lamont insisted on shadowing the DM, following advice given by his then adviser, David Cameron. The pound was at its lowest ever level 13 years ago, again under the Tories. Debt was at 48% of GDP, again under the Tories. It is now just over 40%, excluding the amount of money used to bail out the banks, something the Tories voted against. It will reduce further in the medium term when the banks repay the money lent by the taxpayer. We have some way to go before we reach the levels of debt left by the Conservative party. You may not be aware that Anthony Barber, the Conservative Chancellor, apologised to James Callaghan because the economy was in such a mess when the Tories were defeated in the 70s. They were useless then and they are just as useless now, you only have to listen to George Osborne to see that. It's all on the internet. Read it and then wake up and smell the coffee.
- Val Daniels, Mijas Costa. Spain, 17/11/2008 12:49
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It's not a 'give-away' it's a 'give back' - if they hadn't looted it off the electorate for insane redistribution projects in the first place (£12m on a newly-launched campaign teaching people how to take out a loan, for example!) they wouldn't need to give it back. The idiocy of Labour governments is that they think they know how to spend your money better than you do, whilst busily lining their own back pockets (Mandy's payout for leaving Europe alone, for instance).
- Roz, Chamonix, France, 17/11/2008 12:37
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Oh oh and where is the money going to come from?! The UK has no reserves left after 10years of Crash Gordon...
- Steveo, London NW1, 17/11/2008 12:02
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£15bn across approx 60 million people = roughly £250 a head.
True, but Labour only needs to spend it on Labour voters.
- Roger, London, 17/11/2008 11:45
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All this means is a huge giveaway to gain popularity for an early election in 2009. I cannot see Alistair getting his way with Gordon when Mandy is the real power behind the throne and wants these giveaways as much as GB. Mandy wants these give aways to go to those on benefits, who occupy much of Labour`s heartland because he knows full well these people will support Labour at the polls. "Keep them sweet and they will vote for us" seems to be his message at the moment. Unfortunately a lot of this country`s debt has been hidden from view and is not to referred to by GB when he says this country is best placed to ride out the current creidt crunch or recession as it should rightly be called. Our debt in 2009 is going to be massive and how on earth we (not those on benefits) are going to be able to pay it back is beyond me. The Tories are right in that any give aways have got to be funded; but they are not getting their message across because of Labour`s influence on the big hitters (reporters) on BBC Sky etc. Objective reporting to the masses seems to be a thing of the past at the moment.
- Brian Gare, Gorleston Norfolk, 17/11/2008 11:28
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If a doctor had been struck off twice for neglignece you wouldn't reinstate him to the medical profession -Mandleson is a proven liar and we have no faith in his opinion and certainly not when it comes to matters about our money. Vince Cable, Kenneth Clarke you trust and believe - Our country is being bankrupted by political opportunists with no integrity and no loyalty - Can someone do something about it please!
- Paulgoddard, New York, 17/11/2008 11:15
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Brown and Mandelson are in their glory. Socialists at heart, they now have an excuse to spend, spend, spend!! The middle-income earners won't see any of the massive giveaway -- but they'll be the ones, along with their children, picking up the bill for the next few decades. One can only hope that the IMF won't have to be called in -- as Mrs Thatcher was forced to do on taking over from Labour's Callaghan in 1979. What a mess Labour left then, and what a mess they will be leaving in 18 months or so. That assumes that George Soros and other circling financial vultures haven't brought the pound to its knees as a viable currency by that time.
- Phil Jones, London UK, 17/11/2008 10:48
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£15bn across approx 60 million people = roughly £250 a head.
It's not going to change people's lives, is it?
- Dave, Bath, UK, 17/11/2008 10:42
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How will my fear of spending be defeated by promising to tax me more in the future? I agree with George Osbourne they are just doing exactly what individuals have been doing, overextending themselves. I know how to spend my money better than any government so just cut my taxes and then I'll be able to spend!
- Mark, London, 17/11/2008 10:23
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City spokesman and the CBI appear to agree with Osbourne.
Would you really trust or believe anything Mandy said?
- R. King, Hants, 17/11/2008 09:55
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