Over at the Yorkshire Post, Lib Dem deputy leader and shadow chancellor Vince Cable marks the first anniversary of the nationalisation of Northern Rock with his account of ‘one of the most tumultuous years in the history of the financial sector and the British economy.’ Here’s an excerpt:
Eighteen months into the credit crunch and six months into a recession, the Conservatives and the Labour Party are still rehearsing the same arguments. The Conservatives have one message: “It’s all your fault, Gordon.” The Government, on the other hand, endlessly repeats its claim: “It’s nothing to do with us; it is a global problem.” …
As we enter the run up to the General Election, I believe that the parties will be judged not on political point scoring or pie in the sky promises, but on an honest assessment of where we are, where we want to get to and the tough choices that will need to made.
You can read the article in full by clicking here.
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2 Comments
Actually the best bit in the Yorkshire Post article is right at the end:
‘He was born in York.’
Well, he must be right then!
The problem is that in recent years for anyone to say “I want it to be harder to get a mortgage” would be for that person to be condemned as cruel, as wishing people not to have the freedom of being a home-owner.
“Economic liberals” would most certainly condemn such a person, holding him to be some cruel socialist who probably delighted in people being shepherded into council housing, loved the idea of pushing them around and telling them where to live.
But even social democrats would probably think that making it a little easier for people to get mortgages, not asking for quite so much deposit, allowing a bit higher multiple of wages, is “helping them onto the housing ladder”.
It is easy to be wise after the event. I accept Vince was wise before, but many of us who wished to question the assumptions behind the house price boom were sat on and shut up because it was thought those were things no-one could say, unless they were the worst kind of old-fashioned socialist.
Even now, anyone who calls themselves an “economic liberal” must surely say “if the bank wishes to lend and the house-buyer wishes to borrow, who is Vince Cable to step in and say the deal should not be allowed?”.
The reality is that many measures “to make it easier to by housing” actually serve just to push house prices up. It is hard to get the general public to see this, because they don’t understand free markets and so suppose house prices have some value set regardless of circumstances. Look at how difficult it was to get the message across about the uselessness of mortgage tax relief, for example.
Now is the time to think through the measures need to stop the boom-and-bust happening again, but do we have the courage to stick to them once the cycle gets rolling upwards again?