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The 2013 Budget has created more perspiration than aspiration for those who keep on paying the Nations bills. It’s about time the Coalition Government started growing balls on their own Bench, rather than gifting their Opposition the opportunity to do it for them

March 22, 2013 Leave a comment

This week’s Budget has been received differently by us all and in a manner which illustrates all too clearly how shallow Policy making has now become when imbalance and impact are considered.

Talk of support for working mothers with young families, tax free loans for first time home buyers and even a 1p drop in duty on a pint of beer have done little to disguise the fact that there are so-called  ‘winners’ and then real losers at every turn. The Chancellor has done little to give any credence to his ‘Budget for an aspiration Nation’, other than the complexity of the words he used to speak this statement.

As a culture which now thrives on the use of labels and stereotypes, we have happily painted ourselves into a set of social pigeon holes where many of us hide from the realities which we share with many others. Successive Governments have formed policies on this basis which has left very few of us with any immunity from the pros and cons of a Taxation and Benefits system where the only thing universal is its level of unfairness and the disparity that now fails us all through its application.

Getting to grips with economic problems which are continuing to grow at an alarming rate will not be achieved by tinkering around the edges. Nor will we as a Nation be insulated against the gathering storm of explosive financial issues within the European project, such as those in Cyprus, unless Government begins to consider all Policies in terms of how they will impact upon all others and not just in the isolationist manner that they have continued to do so up until now.

A truly balanced and fair approach to formulating Government Policy now seems to be the most alien of concepts to our Politicians, particularly when party politics has been the long accepted means by which to target benefits to those whom are considered to be your bread-and-butter support.

But until the time that Politicians accept the principle of fairness in a meaningful way as a guide to Policy making, and particularly where Taxation and Benefits are concerned, nothing for anyone else outside the Westminster Village is going to change.

Government will soon have no option but to use systems such as a Flat Tax and wholesale simplification of the Taxation System if they genuinely want to treat everyone fairly whilst encouraging growth, prosperity and ambition in a way which balances the books.

Benefits must be targeted and restricted for the use of those who genuinely need them using common sense as a guideline, rather than the culture of tick-boxes which allows so may to play the System within a politically correct and fearful age.

Above all, Politicians must now accept that Policies created on the basis of improving rights in the workplace have now gone so far beyond their point of good, that they have made some of the very jobs they were created to improve unaffordable to the employers who at one time provided them.

Whether Westminster likes this as a truth or not, each and every Government Policy in existence today interchanges with almost every other, through the impact it has upon the lives of us all. Policy implementation may have its benefits to some, but this has for far too long been at the unacceptable cost to the many. This has to change.

Until Bankers and those within in the City regain some sense of what is right and wrong, Government must intervene so that the many in the world outside do not continue to suffer because of the profit hungry few left within

March 21, 2013 Leave a comment

images (52)The Banking Sector has become an object of hate for many. The accepted perception is that it equates to a world of greed; that it represents all of the bad things that we associate with money in its worst form and that the Sector is immune from the impact of its own actions; a fact demonstrated only too well when private Banks are bailed out with Public Money and bankers get bonuses even when the businesses under their control are failing.

Recent headlines and the role of bankers in the financial crisis and Libor scandal demonstrate a clear need for real and meaningful reform, even before the impact from the domino-effect of unethical practices is considered upon our lives elsewhere.

With Finance and the role that Banks play being so important within our lives, bankers can no longer consider banking services to be ‘products’, as it has never been a ‘product’ that they are providing.

Services are themselves measured by the direct and indirect impact of customer ‘experience’ and the physical risk to all others, and the Banks must now begin considering this in the same way that any other service industry is by its nature required to do so.

There is nothing truer than the phrase ‘money talks’. But the Banks and Financial Sector have failed to take a long view of their actions and now Government must legislate to provide a Regulatory Framework which allows profitability, but does not do so without consideration of unnecessary impacts and the unacknowledged consequences for businesses and individuals within the wider economy.

Here are a few thoughts:

RBS (Royal Bank of Scotland)

In response to the Banking Collapse, the Government at the time provided money to a number of the well-known Banks to prevent their closure, primarily because of the risk to the money that we all have invested in them.

One of the Banks which was ‘bailed out’ was RBS and this Bank is now effectively ‘public owned’.

Recent talk in the media suggests that the Government is now looking to sell off the Bank. However, with a significant need for a Bank which is not profit, but rather service-led, and can therefore take a more altruistic approach to lending and the provision of the banking services that it provides, Government should now take the opportunity it has to provide a ‘peoples bank’.

By doing so, they can provide the options for everyone that other Banks and Financiers are not prepared to provide such as ‘payday loans’ and higher risk start-up lending without unreasonable levels of interest or surety being required.

This will surely help the economy to progress forward by providing lending and support to small business in a way that other Government-backed schemes simply fail to provide.

A publicly-owned, people-centric bank would provide a cornerstone to people, to business and to Public Services alike when run only with the end-user and sustainability in mind. This is what Britain needs.

Credit Rating Agencies

In a recent blog, I talked about the unrealistic level of influence that Credit Rating Agencies now have upon us all.

Ironically, the UK had its Triple A Rating downgraded soon afterwards and Politicians really must now consider the influence that 3rd parties have in dictating the levels of interest that people pay to borrow from lenders, or indeed if they will be considered ‘credit worthy’ in the first place.

Government lending aside, nobody would sensibly deny that different levels of lending risk exist depending upon the financial history of an individual or business.

But it is often poorly managed lending which contributes to higher risks in the first place and improved regulation must therefore be used to restrict this process.

Through the Bank of England, the Government currently defers the setting of the base interest rate in a way which reflects needs in the wider market. All lending should reflect this rate; be realistic; be proportional and Government should drive Regulation to support this.

Pension Fund Management

Pension Funds are significant Shareholders of well known PLC’s across the Globe.

In the UK, their influence is felt by many of us each and every day through the profits we provide to Companies such as the big Supermarkets and Utility Companies, which is reflected in what few would disagree is a continual and disproportionate rise in the Cost of Living.

Businesses are of course created and managed for profit. But it is not normal for profit to be guaranteed within any business, and neither should the circumstances exist where any business can manipulate a market in order that it can be so.

It is therefore essential that Government Legislate to limit the influence of Pension Funds (owners) on the Management of Businesses which provide essential goods and/or services.

Prices of such goods and services should reflect their true value and not a level of profit that businesses of smaller size and with less influence through market share would not be able to reasonably sustain.

Futures

Buying, selling or speculating on products which do not exist would sound like madness to anyone but those who are actually doing it.

Gambling in its most basic form, futures offer a guaranteed level of income for producers, and the promise of significant profits for those who are prepared to invest in what is little more than thin air over a period of time.

However, they also extend the number of links in each ‘virtual’ supply chain along with the number of businesses or agents looking for a profit. Basic prices for commodities and food are inflated way beyond their true market value as a result and the end-using customer suffers most.

Government must legislate against the misuse of Futures in goods which are essential to daily life such as crops which have not even yet been grown, or energy which has yet even to be created.

Doing so will remove speculation of this type, which always has an adverse affect upon the end users who inevitably pay the most. It will also protect producers and the markets from unforeseen circumstances that nobody can control.

***

As with many other industries, the Finance and Banking Sector has simply lost its way. Growing distance from the customer leaves decision makers without any true master other than profit, and this situation can only get worse if it is left unchecked.

Bankers must ultimately be left to make their own decisions. But until they regain ethics; a sense of what is right and wrong and the responsibility not to abuse their position, Government must lead by example and intervene where necessary so that the many in the world outside Banking do not continue to suffer because of the profit hungry few within.

image thanks to http://www.thisismoney.co.uk

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