Dear Alistair Darling,
So nice to hear that you’ve realised you are Chancellor of the Exchequer and have actually spoken about something financial this morning. I was beginning to wonder if no-one had told you about your appointment. Unluckily for you, the job you have inherited from Gordon Brown has led you into the lion’s den.
The reports this morning about the enormous consumer slowdown, falling house prices and your pathetic calls for banks to be more responsible are all pointing in the same direction - downwards. Our economy is resting on top of a very steep hill, and with one small push could be sent into recession and there is nothing you can do about it. The interest rate rises were reasonable enough and were probably needed, but the irresponsible bank lending that Gordon Brown has used to support the economy for so long by allowing consumers to borrow borrow borrow is surely about to end. When it does end and the British public suddenly decide to be more cautious, the economy will be sent into a downward spiral that will take house prices and consumer spending down with it.
It really frustrates me that people think Gordon Brown was an effective Chancellor, when he increased government spending so much that this country is now £5oo billion in the red and he was more than happy to allow consumers to borrow even when they had already accumulated substantial debts to make sure that the economy kept growing. Unfortunately I think it will be you who picks up the tab for this terrible mismanagement. Worse still for the Labour Party, the prospect of an Autumn or Spring election will evaporate overnight if the economy snaps.
I’m looking forward to watch you try and squirm your way out of this one, Darling.
With genuine sympathy (not),
A.Tory
6 responses so far ↓
Tom // September 13, 2007 at 12:42 pm
You forget there are people who don’t know how to live without massive debt. A whole generation has been brought up on the Never Never.
Letters From A Tory // September 13, 2007 at 12:57 pm
I couldn’t agree more.
To get the country out of this situation will be a long and very very painful process, but will probably require a combination of government intervention on bank lending rules - whereby the responsibility for poor lending will be split between consumer and ban - plus a drive to educate the next generation of borrowers on the risks.
The government is already thinking of bringing in lessons on the subject at school, which is not a crazy idea by any means.
nick // September 13, 2007 at 2:44 pm
Lessons on debt in schools that already struggle to educate children in the basics of reading and writing, let alone sciences, languages, or even meaningful geography and history?
The house-price bubble has been bad enough, but the turbocharging of it with consumer debt to keep the moneygoround fueled, and the service industry operating will come home to roost. The best we can expect is several years of stagnation of housing prices - the worst, a wholesale and significant devaluation of the housing stock.
Letters From A Tory // September 13, 2007 at 2:46 pm
Ok, fair enough. I think it would be delivered as part of GCSE Citizenship, although that doesn’t exactly set my world on fire in terms of a rigorous qualification as the pupils don’t even take an exam.
My worry is that when one thing snaps, probably house prices, that everything else will follow. Anything that affects consumer confidence could tip the balance right now, and I’m not feeling too optimistic about how things will be 12 months down the line.
Malcolm McLean // September 14, 2007 at 10:23 am
It’s all very well being morlaistic over debt. But how are you expected to get an education and somewhere to live without borrowing vast sums of money?
Letters From A Tory // September 14, 2007 at 10:25 am
Borrowing money is not the issue here - banks letting people borrow money who are already £10-20,000 in debt and maxed out on god knows how many credit cards is the problem.
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