Punish the prudent savers to bail out people who’ve lived above their means. Total moral bankruptcy…

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Bluemoon, what do you mean spend the lot and go on benefits. bet your the type who dont like people who are on benefits. Im on benefits and so are over 3 million other people, its not our fault were not working. you could lose your job tomorrow and find your on benefits and find out how hard it is. the goverment are lowering intrest to make it easier for people with low income and mortgages and loans

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The monthly interest on my account with (no, I had better not name the bank but it begins with a B) was £48 in October, £34 in November and £8 in December. Fortunately, I have two fixed interest rate deposits with other banks which are up in May and they still pay a reasonable return otherwise, as a pensioner I would now have to be digging into my capital in order to survive.
Then this idiot Brown has the audacity to tell us that the bank of England is the sole controller of interest rates, it is not subject to government influence or interference and the Governor is the sole arbiter of the “bank rate”.
Like the last and the one before that, this latest interest rate drop has his dirty little fingers all over it and the Governor of the Bank has merely obeyed the orders of Brown and Darling for political purposes.
Pensioners have been well and truly forgotten and the government sponsored immorality get’s worse when one sees that mortgage payers are “on a pig’s back” with increased money in their pockets by the hundred and pensioners are “under the pig”, getting crucified by their essential monthly income disappearing before their eyes.
Come on Cameron, let’s have some of that free of tax interest that you talked of and the increased tax free allowance because this idiot now is just about screwing everything up. Workhouses will be coming back for the elederly the way things are going.

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i entirely agree with mr j, people on benefits and i am one, albeit an old age pensioner, suffer just as much with low interest rates and meagre savings sometimes have to be used for unexpected replacements of equipment.

many more people through no fault of their own will be on benefits through illness, worry and unemployment. at least the government is trying to do something for the unemployed, unlike the tories when they were in power, they sat on their hands and to judge by their actions in opposition they would suffer from painful hands if they were ever fortunate enough to be elected back in.

hopefully they will be in opposition for years to come. hopefully this recession will not last too long and some unemployed will find jobs and some of our long term sick will hopefully recover. finally to call the prime minister clueless is pathetic

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Hi devon, at your old rant again, the archytypal Labourite, I can tell em a mile off and my initial suspicions are proved correct in your first line. Grateful for any little crumb thrown your way. Had your £60 yet. That will pay two months rises in my monthly gas and electricity direct debit, so I am not grateful by a long chalk.

As for unemployment, well, let’s look now, set to rise to 3 million by the coming mid year, others out of jobs by the day, what about Nissan etc etc etc etc etc.

It is pathetic to say the recession won’t last to long, Brown said it will be well on the mend by late 2009 – WE WILL WAIT AND SEE SHALL WE.

It is finally catching on that Brown was entirely responsible for this disaster, if he hadn’t allowed the banks to run riot we wouldn’t be were we are, neither should he have allowed them to cosy up to American financial institutions so closely.

And I thought that you were that rarity, an intellectual Labourite.

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mr j > Now, I am confused. You seem to have swung right round in what you say. In comment 3, you say that it’s great that the government have reduced interest rates (although of course, they’re always keen to tell us that the Bank of England is independent and not influenced or controlled by the government) to help people with low incomes and mortgages, and then in comment 6 you tell us that it’s not great because they haven’t thought about people not on benefits who are having to live off their savings and won’t get so much interest every year.

You then suggest that Gordon Brown steps down because he’s clueless – at least you’ve got that right! (You also forgot to mention that no-one ever elected him to be PM.).

Well, either low interest rates are great for people with mortgages or bad for those living on savings. What argument are you actually making – low interest rates are great or bad?

If you’re genuinely disabled – (and devon salopian, we all know that the caring Labour government you talk about is trying to really help them by getting everyone off the incapacity benefit and onto the lower paying job seekers benefit) – then I have no problem with you receiving benefits, (or tax-payers’ money as I prefer to call it, to remind people where it’s coming from).

In fact, Bluemoon’s comment 2 was not criticising those people on benefit, it was merely saying that due to the governments largesse with tax-payers’ money, the best strategy now is to NOT save for the future and NOT to find a job but to spend it all and go on benefits asap. And he’s still correct – unfortunately.

Again, devon salopian, in comment 7, if you think that the government is trying to do something for the unemployed, then you’re evidently listening to too much Polly Toynbee and reading too many Guardian reports.

I’m unemployed, (yes, really), and I can’t say that the government are doing anything for me. In fact, because I saved and skimped when I was working, I don’t get any help, so yes, best course of action for me is now to follow Bluemoon’s advice and spend my savings and then the Government will start to throw tax-payers’ money at me – until it either runs out or no-one will lend the UK any more money and we need to go to the IMF again for a bail-out.

When the Tories were in power, they didn’t sit on their hands and do nothing for the unemployed – they created an economic environment where business could thrive with state subsidy, thus creating jobs for people.

Problem is, too many people don’t necessarily want work and in the current environment, they’re better off not working because the government will hose them down with tax-payers’ money in an attempt to get re-elected.

Labour has thrown the legacy away, with even Tony Blair stating clearly in a recent interview that he regarded the (previously) booming economy as “luck”, not a result of GB’s “fiscal skills”.

The current bust is the inevitability of a free-spending Labour government and the enlargement of state control over individuals and their lives.

Y Mab, this is not the first time you’ve mentioned vouchers and I think it’s a wholly sensible idea – anything that will ensure that the “poor people on benefits” can’t spend tax-payers’ money on fags, booze, mobile phones and plasma screens would get my vote.

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Thanks for the vote of confidence Rodney.
I think the voucher system for food and energy for those on benefits would work wonders.
Already we have tokens which can be put into electic meters at home.
Apply this to vouchers for food at the 3 big supermarkets and that is the welfare system sorted.

Its rather annoying (when giros were handed out at the Post office) to watch the unemployed recieved Giro money and then head off down to the local pub/betting shop etc – I watched this happen for many a year.

Yes people should have benefits if they are unemployed etc but these benefits should be used sorely for the means to live ie vouchers for energy and food.

Devon Salopian – when the going gets tough I think you will find that it is those who recieve everything and do nothing to deserve it who are first in the firing not the weakest

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By the way, devon salopian, forgot to ask > why do you always refer to benefits claimants as the “weak in society”. All the ones I see hanging around the centre or waiting outside the court in Telford, swearing, spitting, drinking, intimidating and generally being a nuisance around my neighbourhood are far from weak. The genuinely weak ones, we want to help, but by lumping all yobbery into the “poor weak people” section of society, you do your argument no good.

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this is a spendid debate and there are too many points to deal with
yes i am sympathetic to the labour party, up till i was 35 i was a staunch supporter of the tories but as a lifelong trade unionist combined with the effect on the country by maggie. eg miners, steel workers, throwing the mentally ill onto the streets and adding to the homeless in our society i gradually learned the error of my political ways. if i thought the liberals had a chance i would vote for them as their spokesmen talk more sense than labour and the tories put together
i consider the long term sick as the weak in society, i agree with the government plans to get people into work providing they are not bullying the genuine sick.
regarding the government helping the unemployed i am referring to the efforts being made to keep them in their own homes rather than have them repossessed.
i thought it was common knowledge about tories being to blame for high utility prices. they sold off our state industries so that they all became owned by the french, and we are held to ransome as the contents beneath the sea run out.
please do not run away with the idea that i agree with every thing the government has done or os doing. i considered blair to be a showman who took us into 2 unnecessary wars and behind the scenes is doing his best to blow up the middle east.
finally i cannot see how gordon brown can be held responsible for a recession home grown in the usa aided and abetted by greed amongst our bankers. as a matter of interest larry elliot chief economics editor of the guardian has been predicting this recession for 15 years at least. i am not a guardian reader but how right he was, and thank goodness we have a prime minister who will pull this country out of the slough and mire he did not lead us into.

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quite right captain chaos, some people think it all started in the bank vaults beneath 10 downing street!

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Capt Chaos > What’s the point of low interest rates if there’s no money being lent? Borrowing £0 at 1% or £0 at 10%, still leaves you with nothing.

It takes time for the effects of rates to filter through, so pushing them down at every Bank of England monthly review is pointless – wait for the last drops to work through before applying more cuts. It could take up to 6 months.

*IF* money was available at these low rates for businesses, (and NOT for individuals, I’m not sure that we should be encouraging more personal debt), then maybe lower rates would have a certain use, but as the condition of the government bailing out the banks was that the banks repay the government at 12% for any of the finance accepted by them, why would the government expect that banks getting money at that rate would lend it out again? The banks simply want to recapitalise and get rid of the government bail-out money, so they’re unlikely to borrow at 12% and then lend out at 1 or 2% – it doesn’t make sense. They’ll hoard it until their share prices recover.

In my opinion, the bail-out was ill-conceived. In any industry, if a business has it tough, then there will ALWAYS be a point when a competitor or investor steps in and buys it up, feeling that the prospect is worth it.

In the crisis, Santander did exactly that with Alliance and Leicester, Cater Allen and Abbey, while Barclays found its own finance from Middle Eastern interests, so I’m not sure why everyone was panicking about RBS, Lloyds TSB and the rest. If the government had simply confirmed that SAVERS would be protected 100% and then kept their hands off, then eventually, all those who have swallowed the bail-out but are not lending would have been taken over or gone bust. If they had gone bust, then after a short while, someone else would have stepped into the vacuum, created a new bank and started again with previous experienced employees. No bad thing in my view – a complete fresh look to banking.

I stress again, savers should always be protected, but I do find it funny that all the old Marxists and Socialists are now wringing their hands about how to protect banks (i.e. investors – or rich, greedy capaitalists, as you normally call them)!

Lower interest rates have several adverse effects:

1) They make the return on investment less attractive to outside investors, so Sterling drops like a stone. In the Post Office, you get LESS than 1 Euro for every Pound now. Shameful.

2) They make the return on ordinary peoples’ accounts less attractive – your savings get you nothing.

3) They accentuate the problem of debt because whereas the return is lower, any loans locked in at previous rates have to be repaid from less money coming in.

Yes, lower interest rates could be great for a recovery IF they were passed on or money was actually lent, but we’re in the middle of a capitalisation crisis at the moment, and nobody sitting on money is really going to want to lend it out, especially if they see deflation and general prce drops approaching, so by saving it for a while, they can start buying their competitors’ assets when the inevitable bankruptcies come along.

Bottler Clown and Badger Darling can rant all they want and say that they’ll “encourage” lower rates to be passed on and lending to be eased, but unless they enforce draconian legislation which would eventually kill banks anyway, they have absolutely no power to control the actions of the banks.

My two predictions:

1) They’ll start taxing savings to make people spend rather then be prudent. I don’t mean interest on savings, I mean the savings themselves. You’ll wake up one day and find that they’ve swiped a percentage of them overnight, just like the Italian government did in the late 80′s.

2) They’ll start printing money to buy up long-term debt and assets, (private as well as state-owned).

This latter option, (previously seen in 20′s Germany and currently being used to great effect in Zimbabwe), will be sustainable in the short-term, but will quickly put us into a cycle of inflation with recession if they cannot subsequently sell them off quickly, exactly as we saw under the Labour government which, following emergency intervention by the International Monetary Fund, was mercifully kicked out in 1979, allowing the Tories to come in and sort the mess out properly – a situation which lasted until Clown got his hands on the tiller after Tony saw which way the wind was blowing and jumped ship.

Capt Chaos: Now that the initial panic is over, this isn’t as widespread as you think; it’s prevalent in countries which encouraged high consumer debt and where the banks took on a lot of toxic loans, (idiot bankers at work). If you look with open eyes, you’ll see countries there has been little effect. Almost all of Africa, Middle East, a large part of Asia, Australia and New Zealand to a large extent and South America to a lesser degree. In short, places where more sensible policies were enacted, places where individuals have more control over their finances, and places where, for one reason or another, governments were not hosing the population down with bonkers benefits, profligate and uncontrolled public spending and policies that encouraged spending to excess, such as making bankruptcy easier and less long-lasting.

Devon Salopian: Yes, you’re correct, this is a splendid debate and one that has left me breathless. And no, I don’t think for one moment that you were 100% behind every Labour policy.

I understand that you support the government trying to keep people in their houses, but what you seem to have missed is that for those people who are having a hard time, when a government says “we’ll pay the interest for two years and after that if you’re still not OK, we’ll pay off the whole debt”, that simply encourages them to NOT find a way out of the problem. In fact, I’m thinking of buying several houses myself and letting the government buy them back off me after they’ve paid two years of interest payments for me. Cheaper than using my own money!

Also, the bankers WERE very greedy, but the aiding and abetting came largely from Bottler Clown, who was Chancellor since 1979 and took away all the regulation that was needed to put checks on banks. He’s been in power for 11 yeas, so for him to say that from the beginning, he was always trying to get the World to agree to his ideas on tighter banking regulation is just another of his many fantasies. 11 years with no result and then super-fast regulation when the proverbial hits the fan? Dear me, pull the other one, Gordon.

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There is no doubt that there is no easy solution to this crisis as we in the West have developed a spend now pay later culture unlike or parents that saved and then paid often in full, the problem now is that our suppliers have all geared up to supply our ever demanding needs! and its going to be very painful to see this reduce.

Because I am still working full time with a son at Uni and paying a mortgage and a car loan the lower interest rates suit me but I am very aware they are not good for the retired like Stuart.

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Peter, your ploy of repeating rubbish often enough in the hope that some naive people will accept it as the truth won’t really catch on.
I credit the populace with more intelligence than that.
I think I said before, you would personally appear to want the red flag flying over Westminster, your comment above more than bears that out.

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“At least the current Government is trying to keep people in jobs”.

Pull the other one Peter, he is offering employers £2,500 if they will employ someone who has been out of work 6 months. The money is “borrowed” and the likelihood is that as one is employed, 4 more are thrown out of work. Furthermore, employers are getting rid of staff not taking on more and £2,500 is not going to induce them to when shortly after taking them on – they will have to get rid of them again. This is grandstanding and “posing” by Brown, the same as the cut in VAT – we will wait and see and the betting is?
For about the, I don’t know, 10th time, Brown has lost more of our manufacturing base than what Maggie ever did. Go to Stoke on Trent and tell them that it was Maggie who closed the potteries down, go down the road and tell JCB that her policies crashed their firm, come a bit further south and tell the Jaguar employees that their troubles were caused by Maggie then go to the North East, the Labour heartland and tell all the heavy industry up there that Maggie caused their firms to close. Then tell all the firms the length and breadth of the land that the reason that they are being laid off is because their firms can’t borrow money to pay them. It’s going to be 3 million unemployed by mid year Peter, It’s Gordon Crown and Darling at the helm not Maggie just in case you forgot.
Brown/Bliar caused the crisis by removing all the regulations remember, Maggie was swanning around writing her memoirs, she was nowhere near the books. Bliar told Clown to take all the checks and balances away. He did, and we ended up like this.
I don’t say that you are an extremist Peter, I just say that your wishes with regard to the economy and society can only be fulfilled by you going to Pyongyang in North Korea and bowing and scaping to Kim Jong Ill. The only snag is, in the distinct probability that you wouldn’t like it, they don’t let you change your mind and come back even if there will be a Tory Government in power.

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