LONDON, Jan 20 (KUNA) — Fear of redundancy has spread to almost half of full-time workers in the UK, a poll showed Tuesday after the British Government’s latest multi-billion pounds economic rescue package was met by plunging bank share prices.
Despite slightly increased optimism about the UK’s prospects, the “Ipsos Mori” survey found 49 percent were now worried the recession would force them out of their jobs over the next year.
And British Prime Minister Gordon Brown appeared to be the target for blame, with his personal popularity plunging and the main opposition Conservatives gaining 10 points on Labour in just a month to lead by 14 points.
Brown yesterday launched another desperate attempt to shore up the economy, gambling potentially hundreds of billions of pounds in an attempt to kick-start lending. He and Britains Chancellor of the Exchequer (Finance Secretary) Alistair Darling announced a fresh raft of measures designed to restore confidence in the banking sector and unblock the flow of credit.
They included taxpayer-backed insurance against expected “toxic” debts, powers for the Bank of England (Britains Central Bank) to buy up to 50 billion pounds of “high-quality” assets from banks and other financial institutions to improve liquidity and increasing the Government’s stake in Royal Bank of Scotland (RBS) to nearly 70 percent from 58 percent.
Shares in RBS collapsed after it admitted it faced a 28 billion pounds loss, the biggest in British corporate history, because of estimated bad debts and write-downs on the value of past acquisitions.
The Prime Minister voiced anger at the losses, which he blamed on “clearly wrong” investments, amid speculation the bank, whose shares closed down 67 percent, may require a full-scale nationalisation.
Lloyds Banking Group suffered a 34 percent fall and Barclays and HSBC finished off 10 percent and six percent respectively, and London’s Financial Times Index of the top 100 company shares on the London Stock Market slumped more than two percent at one stage as the market gave a poor reception to the rescue plan.
Brown was forced to insist there would be no “blank cheque” for the banks under plans to insure them against potential losses from “toxic” assets.
But he was unable to specify how many more billions the taxpayer would be asked to underwrite, saying the scale of the guarantees was yet to be negotiated with individual banks.
It is thought the exposure of UK banks to toxic assets runs into hundreds of billions of pounds.
For his part, Conservative Shadow Chancellor of the Exchequer George Osborne said the latest package was “the clearest possible admission that the first bail-out of the banks has failed and now they have no option but to attempt a second bail-out, a bail-out whose size we still don’t know, whose details remain a mystery and whose ultimate cost to the people of Britain will only be known when this government has long gone.” But British ministers insisted that the measures would improve lending facilities as any further support for the banks would be tied to legally-binding commitments to increase the availability of credit.
The latest “Ipsos Mori” poll found the Conservative Party gained five points since last December among those certain to vote, putting them on 44 percent, 14 points ahead of Labour which dropped five to 30 percent.
His Treasury team, now joined by former Chancellor of the Exchequer Ken Clarke as Shadow Business Secretary, also enjoyed a slight lead (30 percent to 29 percent) when it came to who had the best policies for the economy.
Meanwhile, Brown, who unveiled another multi-billion package aimed at kick-starting recovery today, saw his personal rating slump further with just a third happy with him and 59 percent dissatisfied.
The 26-point gap between the two scores is nearly three times the size it was last November.