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Brown told he has lost markets' confidence
Paul Waugh and Pippa Crerar21 Jan 2009
GORDON BROWN faced claims today that the public and the markets had "lost confidence" in Labour as bank shares dived and the public finances plunged further into the red.
With shares in Barclays and Lloyds taking a hammering, the Bank of England's new deputy governor refused to rule out wholesale nationalisation of the banks.
When asked about the prospect, Paul Tucker told MPs the "precise instruments" for countering the financial crisis were less important than the need to unblock credit.
The Prime Minister echoed Mr Tucker's stance, claiming that kick-starting lending was the top priority, "whatever the status of the banks".
But David Cameron was scathing, declaring that the nation was "facing dark days indeed" with soaring unemployment, a six-year low in new mortgages and £15billion more borrowing last month. With sterling down another cent against the dollar, the Tory leader said this week's fresh bank rescue package had gone down badly with voters and the Stock Exchange.
He said "market and public reaction to the latest set of government initiatives suggests there is no real confidence that government policies are working".
He added: "The British people are losing confidence in the Prime Minister and...without confidence we won't get a recovery."
Sterling today hit fresh seven-year lows against the dollar, Barclays shares fell 21per cent and Lloyds Banking Group, created by the merger of HBOS and Lloyds TSB, fell 14 per cent.
The falls fuelled expectations in the City that the Government will have to wholly nationalise Royal Bank of Scotland and the Lloyds megabank. Taxpayers are due to take a 70 per cent stake in RBS and have just under half of Lloyds.
Liberal Democrat leader Nick Clegg called for the "temporary nationalisation of our weakest banks without further delay". John McFall, a senior confidant of Mr Brown and chairman of the Treasury select committee, said RBS and Lloyds had to be taken into public ownership to get lending going for business. "Let's get it over with -nationalise the pair of them," he said.
Mr Tucker admitted the Treasury's latest rescue package was "not absolutely guaranteed to succeed", saying it needed similar moves by other countries.
He also issued a warning on debt, saying: "It is vital that at each stage the Government makes credible commitments to get public finances back on a sustainable footing."
Reader views (19)
"A weak pound shows a weak economy and a weak government" - Gordon Brown as shadow chanceller
- Anne, London, 22/01/2009 09:34
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I am the same as Stuart, as soon as Blair got in I said this country was doomed. Unfortunately I was right. My phrase at the time was "would you buy a used car from this man. No".
Also Val, If you think the labour government are so great, and also calling the Conservatives unpatriotic, why are you living in Spain?
- E Sullivan, London, 22/01/2009 09:08
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Agreed this is a global situation, but the exceptionally severe impact on the UK is most definitely the responsibility of this government, and, in particular, the ex-chancellor / present unelected prime minister. Other countries are not suffering like the UK. The boom over in recent years was on the back of spiralling debt. Anyone with a couple of brain cells could see that this was not sustainable, and yet the out of touch Crash Gords and the rest of crones set the example and actively encouraged such recklessness. The storm will be a long severe one and the UK is in the worst possible position to weather it. You reap what you sow Gordon!
- Extremely Worried, UK, 22/01/2009 08:19
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It seems to me, and to many others to whom I speak, that the Tories have their own agenda here.
Val Daniels, Mijas Costa, Spain
Speaking to yourself again Val? But, please keep it up. Your posts are hilarious. Same with Keith Price.
- Sarit, Hong Kong, 22/01/2009 06:17
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Lost markets' confidence? This ridiculous man & his band of self-serving jesters never had the intelligent public's confidence. They are on a frenzied & doomed spending spree of the public's money without apparent effective oversight nor backstop. Brown's desparate, random ploys to gain popularity are now being reflected by numerous financial hemorrhages which are driving the UK to its knees. Stop the "State" Interventions and the largesse with the public's money now! You are not the saviours, you are the perpetrators!
- Aj Britt, Brussels, Belgium, 21/01/2009 21:39
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I have lost confidence in Crash Brown a decade or so ago.
- Tom, St. Albans, 21/01/2009 17:17
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@ - Val Daniels, Mijas Costa, Spain
It is becoming a very lonely world out there for you now isnt it????
LABOUR OUT WITH IMMEDIATE EFFECT
- Mr P, Hounslow London, 21/01/2009 17:17
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Not only the bankers but the Electorate-He really is thick skinned to shun so much anti Public Opinion of him and his Party.
- Harvey Lawrence, london, 21/01/2009 17:00
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Keith Price - You're a bit off target. Who spent all those surpluses in the "boom times"? Who turned a blind eye to excessive borrowing personally & corporately? Who claimed he had ended boom & bust? There is a lot that could have been done to pre-empt the mayhem or at least mitigate the worst effects. The man is a liability.
- An Unhappy Tax Payer, London UK, 21/01/2009 16:48
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Gordon Brown does not have a mandate from the people to be Prime Minister. It would show courage on his part to seek that mandate by calling an election. Otherwise, the people will continue to have little faith in his actions and words.
- Doug Watt, london e14, 21/01/2009 16:26
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"lost confidence" - only now he has been told this ?it was lost long ago.. time to go..
- Joanna, london england, 21/01/2009 16:23
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Glad that "the markets" have finally come to the same conclusion as the rest of us!
- Nobby Clark, Perth, Scotland, 21/01/2009 16:19
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Gordon Brown has lost the confidence of the market and the public - Brown's removal would make a good first step in restoring confidence.
Nationalising the banks, however, is stupid. We should not expose the tax payer to taking on the extended risks of the banks - which they probably don't have a total handle on.
John Redwood's blog has continuously given a view on how we can repair and support our financial system without nationalising the banks. Go and have a look journalists. and sing Redwood's views from the rooftops. Someone has to stop Brown crippling the country.
- Jonathan Cook, Winchfield, 21/01/2009 16:17
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Brown has presided over the credit boom, the banking wreckless years - he failed to for see or prepare the country for an economic down turn and of course has no idea what to do now we are in a mess expect to waste tax payers money on short term plans that don't work - The Uk economy is ruined - As with Japan in the 90's, bailing out the banks only prolonged the decade of depression - In South Korea, Sweden etc - Letting the banks go bust and staring again was the only and quickest solution - Not only will we have a long depression, we will also have massive debts that will burden us for years on top of the already over taxed and over regulated Brown years - For Brown to blame everything on America is a joke - It was he who praised and copied Alan Greenspan and made him a Sir, it was he who deregulated the banks - Brown is neither competent, honest,elected or insipiring no wonder everyone has lost confidence in Britain - We count the days until Britain gets the change it is crying out for, the opportunity, through the inspiring leadership of Barack Obama, to pull together and start a fresh. Brown is no Obama.
- Peter Lewis, New York, 21/01/2009 16:06
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Is there noone in Mr Browns inner circle who can tell him that the markets and the public have no faith or confidence in him or his Government.The man is living on another planet.He travels the country to listen to the people and yet he still seems to be completely ignorant of what most people are thinking. Suggest he reads comments to these articles where 95% or more of the correspondents are begging him to resign and call a General Election fearfulof what further damage he will do to the Country.
- Ian Glen., Durham. England., 21/01/2009 15:53
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The fall in a company's shares has nothing to do with who the PM is. How could it? The worldwide credit crunch and economic downturn is wholly to blame for the stock market slide in recent weeks
- Keith Price, Luton, England, 21/01/2009 15:52
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David Cameron's grandstanding at PMQs today, claiming a loss of confidence in the Prime Minister was pathetic. The reason bank shares have taken a dive is because of their irresponsible lending and their tardiness in disclosing the true level of their toxic debt. Gordon Brown's attempt to encourage lending is not a sign of the policies not working as the Tories would have us believe, it is a further attempt to get credit moving again. Instead of sitting on the sidelines, criticising every move the government makes, why don't the Tories say or do something constructive, instead of talking down the economy every day. As for the assertion that the government has 'adopted' Tory policies, are these the same policies leaked to Damian Green and then 'owned' by the Tories because they are bereft of ideas of their own? It seems to me, and to many others to whom I speak, that the Tories have their own agenda here. They will do and say anything to get into government, even if the country goes to hell in a handcart to achieve this. What an unpatriotic shower the Conservatives are.
- Val Daniels, Mijas Costa, Spain, 21/01/2009 15:43
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I lost confidence in errggh 1997 when the Great British public thought that a Grinning Cheshire Cat would make a great PM.
- Stuart, london, 21/01/2009 15:28
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Clearly the markets have lost faith in his and his team's ability to address the problems which were to a large extent of his making, by his inaction years ago which he connived at because he was raking in huge amounts of tax he wanted to fritter away.
- Hugh, Middx, 21/01/2009 15:24
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