January 8, 2009
Interest rates have been cut to 1.5% by the Bank of England, the lowest rates have been for 300 hundred years and an indication of the dire position of the UK economy.
Previous rate cuts haven’t been passed in full onto mortgage customers by Banks and they are unlikely to pass this cut on either. And neither have rate cuts encouraged Banks to lend confidently to individuals and businesses. The bigger concern with the rate cut is that savers who have been prudent will see their interest earnings reduce further which doesn’t encourage people to save and manage their finances sensibly. For this reason, David Cameron’s announcements on tax relief for savers a few days ago is very welcome.
December 15, 2008
John Varley, head of Barclays Bank responding to the economic slump has said that banks should apologise and show some humility for their role in the downturn and also pointed the finger at the role of ‘governments’ without specifically mentioning the Labour Government. He said:
‘I think if you look at the players who were involved in what’s happened to the world, I think there are quite a lot of players. They would include central banks, they would include governments — but they would certainly include the banks.’
Gordon Brown blames everyone except himself and will never apologise for his role in the recession – he’s simply too smug and too proud. But at least the head of one bank is belatedly recognising that his industry has to shoulder some of the blame for the mess the country’s finances are in which is a welcome first step.
This morning David Cameron has raised the issue of accountability of those who are at fault. He said:
Doctors who behave irresponsibly get struck off. Bankers who behave irresponsibly should face professional consequences. And, for sure, if anyone is found to have behaved criminally they must be prosecuted…Are the government seriously saying that nothing untoward could have happened over here? How can anyone believe that in the worst financial crisis of our lifetime no proper and thorough investigation needs to happen?…If we’re going to build a strong and fair society, individuals must carry the consequences of their own actions – regardless of who they are, where they come from, and what their background is.’
The Government won’t carry out an investigation into the financial turmoil as is being demanded. If it did, there would be several criticisms of Government economic policy of the last 12 years; and when Gordon Brown believes he is saving the world, criticism at home would be the last thing he would need.
November 18, 2008
David Cameron has announced that the Conservative Party will not match Labour’s spending plans for 2010/11 for the simple and obvious reason that the country will be unable to afford increased spending.
This is to avoid huge increases in taxes later due to Gordon Brown’s crazy borrowing and will also allow the Conservatives the opportunity to either reduce government debt or cut taxes or both.
This announcement is hugely significant. It gives the Tories several options in tackling the downturn in the economy without having to borrow more. Prudent and responsible!
November 17, 2008
‘Isn’t it the case that Labour’s borrowing bombshell will soon become a tax bombshell? And let’s be clear about what that means. Borrowing £30 billion now will mean an income tax bill for the average earner of nearly £1,500 later.Everyone knows the prime minister is planning a Christmas tax giveaway, but tax cuts should be for life, not just for Christmas. We need real tax cuts not tax cons.’
(David Cameron in the commons responding to Gordon Brown)
Whether Gordon Brown calls it a ‘fiscal stimulus’ or simply ‘additional borrowing’ the taxpayer will have to pay it back with interest in due course. But our PM doesn’t care as long as it gives him a chance of winning the next election.