Please Sir it Wasn’t Me Sir – A Decade of Dept! (From Business in Dorset)

Please Sir it Wasn’t Me Sir – A Decade of Dept!

10:35am Monday 29th September 2008

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Prosperity based on borrowing is how, over the last decade, this Government have fuelled the economy. This Government and the Country has been on a borrowing binge on the back of property prices and the belief that somehow the property boom would go on and on.

Freeing the financial Institutions by affectively de regulating them, fuelling ever rising property prices could never be a recipe for long term sustainable growth but that is exactly what this Government did – as did the American’s.

What was unleashed was a rampage of greed, on an unprecedented scale. Motivated money managers, made bonuses on transaction volumes not long term profitability - bonuses were paid out on an unimaginable scale! Bonuses that were not related to the stability and sustainability of the transactions secured against assets, with sustainable value and built in margins - security in the traditional way.

It has taken a massive credit crunch, a housing price collapse and finally massive instability in the banking industry for Gordon Brown and George Bush to wake up to the fact that regulation is needed and “the irresponsibility must end”

Make no mistake though, long term damage has been done and many including this Government are in serious financial trouble with no reserves for these hard times, whatever you want to call them. With an estimated fall in property values of 50% as a result of this dramatic drop in confidence, the affect is likely to also include an estimated rise in unemployment to over 2 million - remember the bigger the boom the bigger the bust and real fear is setting in!

The social consequences of financial disaster on this scale were known in 1997 and this Government rejected calls for regulation to ensure the stability of the banking industry - because of its social importance. And back in July 2003, when the housing boom looked like faltering, the Monitory Policy Committee also inexplicably voted in a rate cut to 3.5% to keep the housing market going - prior to an election.

Please sir, it wasn’t me sir, it was those Americans who got us into trouble, just will not wash.

Chris Slocock

Past President Dorset Business

Vice Chairman South West Chambers of Commerce

BCC Business representative South West

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