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Alistair Darling: We Were Two Hours From The Cashpoints Running Dry

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http://www.independent.co.uk/news/people/profiles/alistair-darling-we-were-two-hours-from-the-cashpoints-running-dry-2245350.html

The former Chancellor tells Andrew Grice how close we came to financial chaos – and why Osborne could push us back to the brink

People were were only two hours away from being unable to withdraw money from British banks during the financial crisis, the former Chancellor Alistair Darling will reveal in a new book.

In the first insider's account of the crisis, Mr Darling will disclose how the near-collapse of the Royal Bank of Scotland in October 2008 would have spread quickly to other UK banks if the Government had not rushed out a £50bn emergency rescue package.

"We were at the stage where in a very short period of time, one of the world's biggest banks would have to shut the door and switch off the electricity," he told The Independent in an interview ahead of next week's Budget. "It would not have stopped there, because you can just imagine people going from bank to bank."

His "first hand account" of the crisis will be published by Atlantic Books in September. "It is really harrowing. You just write it down. You don't need to spice it up."

In the interview, Mr Darling:

* Claimed Meryvn King, the Bank of England Governor, is uncomfortable about being used by Tory ministers to defend their cuts strategy

* Warned that George Osborne could "crash the economy" by cutting too far, too fast;

* Claimed the Treasury has secret economic Plan B;

* Warned Labour that must spell out a positive vision to regain power

Mr Darling, who stood down from the Shadow Cabinet last October, has completed about a third of his 100,000-word book. Asked whether he would detail his strained relationship with his long-time ally Gordon Brown when he succeeded him at the Treasury, he said: "Most Chancellors and Prime Ministers fall out from time to time. What I want to do is to give a credible account of what happened. I have never been interested in the gratuitous kiss and tell stuff."

Asked whether Mr Brown was a good prime minister, he said: "As Chancellor he achieved a great deal... I think he is entitled to be judged in the round on all of the things he did rather than just over a short period."

The "Darling plan" to halve the public deficit over four years has entered the political lexicon. Mr Darling is convinced that the Coalition is cutting too far, too fast and could choke off the fragile recovery.

"The big question is where is the growth going to come from?" he said. "What I am worried about is that these people will end up crashing the economy."

Despite Mr Osborne's denials, he is convinced that the Treasury has a Plan B. "You have got to have a plan for growth. That is absent at the moment," he said. "There is a Plan B there and he [Mr Osborne] will be looking for cover and ways of introducing bits of it without people noticing too much."

The former Chancellor expressed concern that Mr King had been drawn into party politics by endorsing Mr Osborne's Plan A. He said: "The Governor has to accept that he cannot put himself in a position where people can say, 'He is on our side.' Tories are saying that. That is something I know he is very mindful of because no Governor wants to be put in that position. The authority of the Bank of England should be formidable. Part of that authority stems from the fact that it should be fearlessly independent, not on one side nor the other but doing its job.

"I think Cameron quite deliberately set out to exaggerate the problems because he wanted cover for what he would have done anyway. He has got the added bonus of the Liberal Democrats being willing to front up what he is doing – rather like the court fools."

He backed Ed Balls, the shadow Chancellor, who suggested the cuts should be implemented more slowly at the start of the four-year period than Mr Darling envisaged because the outlook was now so gloomy. Mr Darling has known Labour's "two Eds" since the early 1990s when they worked as aides to Mr Brown.

"Becoming Leader of the Opposition just after you have lost an election is pretty tough...after any defeat, especially after a long period in office, it takes time to recover.

"I know Ed [Miliband] understands what needs to be done. I am confident that he will be able to develop a vision and mission people will take to.

"The key for us is that it is not enough to say this Government is not doing well and say it is damaging important things in this country. We have to show we have a vision of what Britain can be that is better."

The economy, as ever, will be crucial. "If we don't establish in the public mind we are more competent than the Tories, then we won't make any headway," he said.

After a marathon 22 years on Labour's front bench, Mr Darling is enjoying the freedom of the backbenches. But, he said: "I miss being in government because you can do things."

And the 57-year-old MP for Edinburgh South West does not rule out a return to the front line.

"I am still young, " he said. "I will be required to work for some considerable time yet under plans to delay state pension age. Many politicians enter their prime in their sixties."

In quotes: Darling on...

... the banking crisis of 2008

"We were at the stage where – in a very short period of time – one of the world's biggest banks would have to shut the door and switch off the electricity. It would not have stopped there, because you can just imagine people going from bank to bank."

... David Cameron and George Osborne

"What I am worried about is that these people will end up crashing the economy... My guess is that the Treasury is working on a plan for growth despite what [George] Osborne has been saying for several months. There is a Plan B there and he will be looking for cover and ways of introducing bits of it without people noticing too much."

... the Coalition's cuts

"The Tories are doing things they could only have dreamt of in opposition. If they had a majority of 10 or 20 they would not have been able to do half of this...The Lib Dems are completely lashed to the mast."

... Labour

"It is not enough to say this Government is not doing well and say it is damaging important things in this country. We have to show we have a vision of what Britain can be that is better. If we don't establish in the public mind we are more competent [on the economy] than the Tories, then we won't make any headway."

... Mervyn King

"The Governor [of the Bank of England] has to accept that he cannot put himself in a position where people can say 'he is on our side.' Tories are saying that. That is something I know he is very mindful of because no Governor wants to be put in that position."

... his future

"I am still young... I will be required to work for a considerable time under plans to delay the pension age... Many politicians enter their prime in their sixties.

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He could have closed RBS, given creditors a haircut, turning debt into equity. Then they could have replayed again, solvent. No need for drama or taxpayers money.

Darling seems to have learned little. Let's hope he doesn't get to see the full majesty of a sovereign default caused by an excess of expenditure over revenue for far too long.

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I like the audacity of this line...

Asked whether Mr Brown was a good prime minister, he said: "As Chancellor he achieved a great deal... I think he is entitled to be judged in the round on all of the things he did rather than just over a short period."

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What is labour's plan for growth or are they referring to growth of the debt? In the round (whatever that means) it seems like their idea is to withhold cuts until their out of office and then let someone else deal with it, political pass the parcel.

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"I miss being in government because you can do things."

Yeah right.

Doing things like...

...how close we came to financial chaos...

People were were only two hours away from being unable to withdraw money from British banks..

...how the near-collapse of the Royal Bank of Scotland in October 2008 would have spread quickly to other UK banks...

"We were at the stage where in a very short period of time, one of the world's biggest banks would have to shut the door and switch off the electricity,"

It would not have stopped there, because you can just imagine people going from bank to bank."

"What I am worried about is that these people will end up crashing the economy."

"If we don't establish in the public mind we are more competent than the Tories, ..

:lol::lol::lol::lol:

The other lot are "doing things" now. It would be far better if the whole lot of them stopped their "doing things".

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Yeah right.

Doing things like...

:lol::lol::lol::lol:

The other lot are "doing things" now. It would be far better if the whole lot of them stopped their "doing things".

But they didn't do anything, they ignored all the warnings and let it happen.

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But would this have effected the cashpoints of HSBC, Barclays, Lloyds (before HBOS)?

I still think RBS should have been left to go bust.

If one bank went down, the destruction of confidence would have taken down the others in no time. This is a problem of fractional reserve banking with negative reserves.

But it could pretty easily been split up with the branch networks of Natwest and RBS nationalised and then re-privatised (or mutualised) as standard deposit-and-loan operations; the investment banking division then being wound down.

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.......yes...a great deal of waste, debt and deficit.... :rolleyes:

Give him credit! He encouraged the Banks to take more risks in that Mansion House speech, he robbed our pension funds and he sold off our gold cheap. He set the stage to make paupers of us all.

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I like the audacity of this line...

i see it completely the other way.

as PM he received a hospital pass, more or less taking the flack for the credit crunch, which had nothing to do with any decisions he took as PM, & being rated on his [extreme lack of] charisma in front of a tv camera. he was probably judged unfairly.

only in his role as chancellor did he really get the time & tools to properly fvck something up [i.e. rebalancing our economy towards property speculation] - a chance that he took, it must be said, with applomb.

Edited by the flying pig

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But would this have effected the cashpoints of HSBC, Barclays, Lloyds (before HBOS)?

I still think RBS should have been left to go bust.

Maybe.

But if the whole pool hadn't been poisoned by refusing to let Northern Rock go bust, who's to say what would've happened? Might RBS (though not HBOS) actually have survived?

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Something to consider is 90% of the population has no savings. I believe there would have been a 100% wipe out of deposits in the nation without the bailouts. But if you are an average person with no savings and an average job this would have been a great event. It would have brought all the super rich down to earth, down to your same level. The reset button on the video game.

Instead the bailout did happen, and the richest people got to keep 100% of their money. But the fundamental flaws in the system that led to the breakdown were not resolved.

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Too soon to do a book, darling, you still have to lie. And in time to come it will be plain for all to see what a liar he is, what an idiotic thing to have done.

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If I come across Darling's book in a book shop, I'm going to put it in the fantasy section.

Darling is still in the game and has every motive to deceive and gloss over nulabs faults. As he says himself he's only 57 - a lab win in 2014 could see him as a prime ministerial candidate.

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Something to consider is 90% of the population has no savings. I believe there would have been a 100% wipe out of deposits in the nation without the bailouts. But if you are an average person with no savings and an average job this would have been a great event. It would have brought all the super rich down to earth, down to your same level. The reset button on the video game.

Instead the bailout did happen, and the richest people got to keep 100% of their money. But the fundamental flaws in the system that led to the breakdown were not resolved.

It would have been as about bad as it is, but also fixed some of the core problems if the banks were allowed to fail.

Assets sold off by the liquidator, people learning they need to find a low risk bank with secure financing, house prices collapsing, rich losing their money

to the poor.

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Guest spp

But would this have effected the cashpoints of HSBC, Barclays, Lloyds (before HBOS)?

I still think RBS should have been left to go bust.

But how would 300 to$$er$ get their million £ pay packets if that happened?

http://www.google.com/hostednews/ukpress/article/ALeqM5jezGvCWAGSks6qx-m-1wroD_cfLg?docId=N0455341300013447098A

Analysts estimate the total pay bill for RBS's senior executives and bankers will be around £350 million.

The money will be shared between senior staff, as well as an estimated 300 people who have been classed as so-called code workers - those who take material risks for the bank on a regular basis.

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we were 2 hours away from abolishing the world from the slavery but we managed to retain it.

Debt slavery and fractional reserve banking would have been exposed for what it really is....a fraud!

Fraud on a gigantic scale!

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You pay £20 for your shopping, then get the same £20 as cashback. Sorted!

I go to the post office to pay my rent, I withdrew the money from the post office cash machine and walk into the post office. I then pay it in at the counter. They then put the money in the machine. And I go back next week to withdrew it and pay it in again.

Might aswell have a token that requires a fixed amount of work.

Instead of rents rising above RPI continuously, and RPI rising faster than wages.

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Something to consider is 90% of the population has no savings. I believe there would have been a 100% wipe out of deposits in the nation without the bailouts. But if you are an average person with no savings and an average job this would have been a great event. It would have brought all the super rich down to earth, down to your same level. The reset button on the video game.

Instead the bailout did happen, and the richest people got to keep 100% of their money. But the fundamental flaws in the system that led to the breakdown were not resolved.

The bailout was an all out effort to preserve the debt based wealth of the top ten percent- using the cunning strategy of piling on more debt. What could possible go wrong?

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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      • up 5%



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