Browsing "Commentary / Editorial"
Savers may have rescued the economy (for now), but they received precious little thanks in return from the chancellor today.
Delivering his Autumn Statement, George Osborne revelled in a positive growth forecast – the first to have been revised upwards during his tenure – insisting that he was right to hold his nerve and that his economic plan was working.
The underlying problem is, however, that a sizeable proportion of this economic growth has come not from businesses but from consumer spending.
Put simply, more people are taking on debt and dipping into their savings – either because they’ve chosen to or because they have no other choice in order to make ends meet.
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Lloyds’ latest advertising campaign really does leave something to be desired. Behold – a woman reclines euphorically across a wheelbarrow, declaring how she’s ‘learnt to love her bank statements’.
Forgive me for pointing it out, but who in their right mind ‘loves’ their bank statements – other than the rich, of course? (In which case, many thanks, Lloyds, for the reminder.)
I’m reminded of Alan Partridge’s complaint about the inane smiles of catalogue models. “Where do they get these men from?” he barbs. “Who smiles at a Black and Decker Workmate, for goodness sake?”
The irony is, of course, that with the majority of banks now promoting paperless statements to cut costs, it is only when customers go into the red that they can expect to receive a paper statement of charges. How many of us associate love with bank charges?
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In this social media driven age, does the absence of a company profile on Twitter or Facebook now trigger alarm bells where it didn’t before?
I’m not a fan of social media, even as I admit how necessary it’s become. But it’s now reached a point, I think, where businesses in certain sectors without a social profile are effectively admitting they’ve got something to hide.
Not long ago, I was bemoaning the regulatory mess that presides over the advertising of financial products. If you missed the story, it related to the banning of an advert for payday lender Cash Lady featuring the frequently bankrupt Kerry Katona.
The Advertising Standards Authority (ASA) quashed a television advert that lured customers into applying for high-cost loans – over three months after it was launched. The Office of Fair Trading, which regulates the payday lending sector, could only be consulted on one of the four issues raised about it.
Well, the ASA has been in action again recently, concerning a rather shocking assertion by one of these parasite claim firms that public sector workers should aim to cash in a lump of their pensions with ‘ZERO’ impact, regardless of their age.
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At last, there are signs that conditions for businesses are finally improving.
The economy is growing, albeit cagily. The housing market is alive again. And the new Business Bank, though it’s not lending to SMEs directly, should spur competition in the market for business lending and boost confidence that lenders are still open for business.
To date, the Government’s measures to boost the economy have delivered their most noticeable impact in the residential mortgage market, where fixed-rate deals are currently available from as little as 1.84%.
In some cases, though, the new measures have also improved conditions in the market for commercial finance.
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- Highest fares in Europe, with cramped conditions and old carriages.
- Biggest rail companies pay out 90% of operating profits to shareholders.
- Private companies neglecting investment in railways.
- Easily manipulated franchising system, at huge cost to taxpayers.
- Public rail bosses rewarded despite failing to meet modest punctuality targets.
- Return to public railways at no extra cost, new report suggests.
Just as we were thinking about how far private interests had separated from public advantage, a damning new study into the UK’s railways has revealed how privatisation has led to rip-off fares and a gross underinvestment in services.
The report by the Centre for Research on Socio-Cultural Change (CRESC) at the University of Manchester said that since the privatisation of the railways, train companies have relied heavily on the taxpayer to run services while farming off almost all of their profits to shareholders.
Those which received the largest state subsidies between 2007 and 2011 farmed out 90% of their half-billion pound profits to shareholders, the report said, while the public has been left to pick up the bill for the majority of new rail investments, such as the tilting Pendolino trains.
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Many of the issues of yesteryear are still just as prevalent today. Some, one suspects, are timeless. Greed will almost always divide and conquer. And if a functioning economy relies upon everyone co-operating in the public interest, we can pretty much forget about it.
Amid the tumult of the mid-seventeenth century, judges and politicians for the Crown argued that the gentry should surrender their lands to the public good because if state order broke down, their private fortunes would almost inevitably be lost anyway.
It was in everyone’s best interests to provide the state with whatever it needed, they were suggesting, because a functioning civil society was the only basis upon wealth could be built and sustained.
Roll forward 360-or-so years, and you wouldn’t think the situation had changed a great deal. As a nation, conditions are set up for growth – yet it remains shallow. We’re severely lacking in confidence – confidence in banks, confidence in the financial system, and confidence in the housing market.
Widespread co-operation to repair some of this confidence would improve conditions immeasurably. Unfortunately, the opportunistic factions too blinded by greed are determined to make this an almighty struggle.
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