Thursday, January 17, 2008

Brown refuses to answer repossesion question.

I have a moment to comment on yesterdays Prime Ministers Question Time. Gordon Brown showed a remarkable skill in not answering both of Nick Clegg’s questions on House repossessions.

Nick opened by asking what comfort the Prime Minister could offer the 45,000 British families who now face the prospect of losing their homes this year?

Gordon Brown replied that he is determined to have low interest rates and that to have low interest rates we have to have low inflation; and to have low inflation we have to have a decent economic policy.

This does not answer the question. Low interest rates have got nothing to do with home repossessions increasing by 50 per cent, with one repossession every 12 minutes.

Nick then pushed the Prime Minister on the issue, pointing out that he allowed, on his watch, grossly irresponsible lending practices by banks to destabilise the housing market.
Brown responds with another non-answer reminding Nick Clegg that there are 1.5 million more homeowners under Labour.

The real issue is that the banks have been allowed to lend increasing amounts against income, over longer terms and often more than a family can afford.

This increase in the supply of money, coupled with the shortage of housing has driven up house prices such that it now excludes a significant proportion of people from the housing market. In South Warwickshire (a prosperous area) 73% of all couples are excluded. For example some friends of mine, late 20’s professional couple (one a Doctor) cannot afford to buy a house in Warwick.

My house on the other hand has doubled in value since I bought it. Am I significantly better off? I don’t feel it, I still have the same payments to make, same disposable income. If I move the increase in house prices are all relative. When I die my estate (scrap of damp lawn) falls over the Inheritance Tax threshold. The only way I make anything on the increase in house prices is if I sold up and lived in a tent on Newbold Comyn.

The only people making any money on this are the banks, with no restraints from the government have been encouraging us to borrow more and more money for the past decade and now the money has run out.

Consumer spending on our collective credit card has fuelled Gordon Browns Economic Miracle. Sooner or later we were going to hit our credit limit. We now face, what we all face when our spending gets out of control and lets face it we have all been there. A collective tightening of the belts and this is going to hit the retail and services sector first.

The slide in the pound will make imports more expensive, yet exports, which have suffered in recent years, become viable again. Perhaps our Manufacturing will pick up to take up the slack in the labour market, lets hope so.

One thing is for sure; the years of economic stability are over. Some British families are going to find themselves in economic difficulty.

The 45,000 British families who now face the prospect of losing their homes this year should be insulted that Gordon Brown refused to ask the question that Nick Clegg asked on their behalf.

Interesting points to note:-

  • The new Housing Act is going through the committee stage in the House of Commons. I look forward to reading it and will comment when it has been published.

  • An interesting post by Paul Holmes MP on council housing that is worth a read. Paul was until recently our shadow-housing minister. I had the opportunity to discuss some of this issues with Paul at a conference a couple of months ago, worth a read as Paul puts the situation quite clearly.

Alan Beddow is also the Liberal Democrat Housing Spokesperson for the West Midlands

Saturday, January 12, 2008

One quarter of the income tax I paid this year went to bail out Northern Rock... I want to know when we are going to get our money back

It's been my first full week back at work this week and the first that I have felt fully back to normal after a bout of flue over Christmas. So many people I have spoken to say they have felt wiped out for a couple of weeks by it.

My day job this week has been focused on managing some changes to emails that gets sent out to tell my clients customers that their bills are ready to view on line. All quite simple you would have thought! Not so, my client keeps changing his mind at the last moment and as this is part of a huge commercial system it has to be carefully tested and planned in with dozens of other changes happening at the same time.

Another project involves transfer of personal information and you will be glad to know that it will all be encrpted and secure before transfer. Just as well after I have been quoted in the media this week as saying the government needs to adopt the same best practices followed by the IT industry. None of this is difficult, it just needs a degree of respect for the data concerned, something I feel has been lacking by our government departments.

I was disappointed this week that Gordon Brown has announced a whole set of Nuclear Power Stations to be built. I notice that these will be built at current sites and these are all based in areas of low population. That must say something.

Now the arguments for Nuclear Power include, low carbon footprint, less reliance on foreign power and that in 60 years the industry must have moved on and be more safe and efficient.

All valid arguments, though my two concerns are that it is massively expensive, surely we could spend the same money on the Severn Barrage we have been talking about for the past 30 years, or invest in kick starting a new British Industry in state of the art renewable energy.

The other issue is that the cost of cleaning up radioactive waste currently held in Britain stands at £56billion, that's almost the same as we have put into Northern Rock.

Incidentally Gordon Brown may have no choice but consider Vince Cables calls to nationalise Northern Rock. The British Tax payer has poured £57 Billion into the bank and I for one want to know when I am going to get my money back. To put this into context, I worked out the other day that this is about £2000 each, 1/4 of the income tax paid by the average tax payer last year!