Wednesday, September 03, 2008

Brown Slips On His Own Banana Skin

Wasn't this week going to mark the unveiling of some masterful economic recovery plan? Apparently not. That has to wait until the pre-budget report next month. Meanwhile, as  the country slips deeper and deeper into recession, according to the OECD, the banana skins are littering the floor.

As the nation held it breath, what did we get yesterday? A wriggling Darling, trying to justify his weekend comments and hold onto his job, pictures of Brown in someone's new kitchen and Blears somewhere in the background. 

Apparently Brown and Blears made a sharp exit after the kitchen photocall, leaving behind more banana skins.

What we did get, a housing 'rescue plan', was a little bit of  this and a little bit of that. And all a little bit too little, too late. And another banana skin.

"We have listened," said both Blears and Brown, but not apparently to the financial experts. The only people they listened to were the big struggling housebuilding firms, who must be rubbing their hands with glee

Sure, there's a bit of stamp duty relief - which will mean nothing to an awful lot of homeowners. Help if you run into trouble with mortgage payments - a bit late on that one. Some buy-back arrangement with councils - which means you'll never own the house outright. 

And "free" 30% loans for first time buyers of new homes in England - and a "fee" at the end of it. 

Stamp duty alone will cost £600m. The help for housebuilders £300m. Altogether a package of measures costing around £1 billion. 

Brown is living on borrowed time. Where's that money going to come from? More borrowing? There was £2.7 billion borrowed for the tax relief fiasco and before that billions borrowed for Northern Rock. The government really cannot keep borrowing itself out of trouble.

Any relief for those trying to get onto the property ladder is welcome. But the housing slump is not the problem. The problem is deep-rooted in the economy.

The real problem is the level of interest rates, the sudden lack of mortgages, rising unemployment, rising food and fuel bills and rising inflation. People struggling to pay their bills in the government created 'debt-culture'.  

Oh yes, and economic confidence, which keeps getting knocked back by all the in-fighting and puerile comments by ministers in the media. 

If Brown was a banana - he would slip on his own skin.

No comments: