Tag Archives: banks

Economic crisis: problems and remedies

There’s an economic crisis underway. Several policy motions at Lib Dem Autumn Conference make reference to economic problems. The government’s current industrial strategy (‘Plan for Growth’) runs to 112 pages and reads more like an argument against reform rather than for it; perhaps fearful of being accused by the tabloids of ‘talking down Brexit Britain’ .

UK economic problems are deep-rooted; some even hundreds of years old. Political parties of course share the blame but that’s only a small part of the story. Perceptions of problems and remedies have changed over the many decades, independent of political oscillations. But we will need clarity and deep thinking beyond political partisanship to extricate ourselves.

The symptoms are all around us. Disposable income is collapsing as mortgage payments, rents, energy, food prices, and now taxes, are all rising. Credit card debt is accelerating. Investment is in serious decline; since 2019 British businesses have invested less, as a percentage of GDP, than any other major economy. The Bank of England forecasts that business investment will further fall by around 2 per cent in 2024. By most measures GDP performance is the worst in the G7. UK debt sustainability is worsening. Debt service is set to exceed total NHS spending within three years. Tax revenues are just a third of GDP, and only half the population pay income tax.

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Act now to prevent the death of cash

I recently returned from Scandinavia, where I busked my way around for a few weeks. I spend a lot of my time travelling in this way – often around half the year. This time, I’d planned my trip around various Bruce Springsteen gigs that were occurring in the area – a tactic that had worked wonderfully well in other countries.

Scandinavia, though, is now one of the toughest busking destinations in the world. I’ve made easily more money in Peru and Bolivia than I did in Norway. The reason is nothing to do with a lack of generosity (I was last there in 2016 and did very well indeed), but the almost total elimination of cash from their societies.

The UK is not far behind. A recent report suggests that the number of cash transactions amounted to 10% of all payments in 2022, down from 27% in 2019. This is still higher than the 4% in Sweden and Norway, but the downwards trend should give us pause for thought.

Few would suggest that these figures indicate a need to restrict card/contactless payments. To do so would be to inconvenience people for no obvious benefit. But it is vital that politicians act to protect cash before it is too late. In the example of Norway, the law stating that it is illegal to refuse cash as a payment method has been widely flouted, and only very recently have lawmakers stepped in to strengthen it. But this has been done too late. We should act now before we get to a similar point.

It is understandable that many will wonder why this is necessary, or claim that the death of cash is simply an inevitable indicator of progress, and I am aware that as a professional street musician, I have ulterior motives for championing its survival that may not be thought to be particularly important. However, the destruction of busking as a form of work is not the only effect that a cashless society would cause (at this point I should say that I’m aware buskers, including myself, can and do accept contactless payments, but these do not go anywhere close to replacing the amounts earned through cash, for reasons that would take another entire article, so please do take my word for it!).

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Ordinary families are paying more so banks’ owners can pay less

It is budget setting time for councils across the country.

Local councils of all types have to decide what rate of Council Tax to set and budget how they will spend their revenue and capital over the coming year.

Everyone in local government knows how tough things are. Local services are under resourced, struggling and sometimes failing. At the same time, ordinary families face a huge cost of living crisis from rising bills that many in Westminster do not seem to understand.

In Kent County Council, where I lead the Liberal Democrat group, the ruling-Conservatives are raising Council Tax by 3% and cutting services by £28 million.  Inflation, such as rising energy bills and increasing need to help a growing but ageing population take their toll and leave gaps in the budget.

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16 October 2019 – today’s press release

MP launches “Save Our Rural Banks” Campaign

Jane Dodds MP has launched a new campaign aimed at protecting existing rural banking services and restoring banking services to communities across Brecon & Radnorshire.

Over the past few years, many communities across Brecon and Radnorshire have seen bank branches in their towns close. Recent announcements by Barclays also reveal plans to reduce banking services available through the Post Office.

At present towns like Knighton, Crickhowell and Hay-on-Wye both do not have any bank branches in the towns, while towns like Ystradgynlais are reliant upon a single branch.

Jane Dodds, Liberal Democrat MP for Brecon and Radnorshire, …

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8 October 2019 – today’s press releases

  • Davey: Brexit would mortgage our children’s future
  • Jane Dodds Calls for Pledge to Maintain Last-in-Town Banks
  • Blame for the Brexit mess sits with the Tory Govt

Davey: Brexit would mortgage our children’s future

Following reports from the IFS that a no-deal Brexit will push UK debt to the highest levels since the 1960s, Lib Dem Shadow Chancellor Ed Davey said:

This new analysis is a body blow to Boris Johnson’s election spending plans – as it shows the cost of Brexit is much higher than thought.

Brexit would mortgage our children’s future, plunging Britain into the red and threatening years of new austerity.

There is simply no

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Opinion: How to balance the UK economy

A-Co-operative-bank-sign-007I was a bit flummoxed after being taken to task on Lib Dem Voice last week for being anti-business. What had I done? I had been criticising payday loan companies for hoovering up money away from local companies.

There are two underlying problems here, confusions which muddy the political debate on business.

The first is the misleading idea that somehow all business is always on the same side.  Organisations like the CBI claim to speak for business while actually promoting the interests of the biggest.  It isn’t the way the world is.

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Opinion: How the government can spend billions on stimulus without borrowing a penny more

In his defence of his dexterously lethargic approach to managing the economy, George Osborne portrays his detractors as Icarus-like figures forgoing prudence to pursue fantastical growth amidst the sunny uplands forever just beyond the next horizon.

The Chancellor would contrast himself as a wise head trying to counsel Icarus towards caution, as Daedulus did in the Greek myth.

But if Icarus was wrought low by over-reaching himself and flying too close to the sun, Daedulus’s demise came when he couldn’t escape from a labyrinth of his own creation. Osborne is risking this outcome.

I described the Chancellor’s economic management as dexterously lethargic above …

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Sharon Bowles MEP writes: New EU rules make a more secure, sustainable and transparent banking system

Yesterday the European Parliament passed a historic package of financial legislation following almost two years of negotiations. The most widely publicised aspect of these new rules is the cap on bankers’ bonuses, introduced in an amendment by the European Parliament and supported by Lib Dem MEPs. As well as the moral justifications, there are many good rational reasons for the cap. Significantly, it will realign the bonus to salary ratio to more reasonable proportions, thus reducing the kinds of excessively risky behaviour which contributed towards the financial crisis. It is important for banks to show restraint and take a more …

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Opinion: Radical action need to remedy the economy’s woes

While the Chancellor’s direction of travel in relation to tackling Britain’s economic challenges is improving, his current approach will leave Britain feeling like Sisyphus, labouring hard to push a rock up a hill but never quite feeling secure that it won’t come crashing back down, destroying the hard work already undertaken.

But just as Sisyphus continued to focus on the mechanics of getting the rock up the hill, rather than indulge in any broader experiment to escape his predicament, Osborne toils at the seams of Britain’s economic malaise.

The Chancellor happily wallows in the Bank of England’s myth that giant infusions of credit from Quantitative Easing and the ‘Funding for Lending’ schemes, are any sort of remedy to Britain’s economic woes.

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Vince v Osborne – the battle for RBS’s future

The future of the Royal Bank of Scotland is back in the headlines today.

The Financial Times reports that ministers are discussing buying the remaining shares in RBS, bringing it fully under state control. This would allow them to force it to lend more to viable small and medium-sized businesses  without having to worry about other shareholders challenging such a direction in the courts.

The Guardian reports that Liberal Democrat   Vince Cable is the driving force behind this plan. He believes that it’s the only way to get money to businesses.

What we do know, and Vince Cable confirmed when taking …

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