Moral Corruption

The European Commission has fined eight banks (including RBS) a total of £1.4 billion to the European Commission for forming illegal cartels to rig Libor and Euribor interest rates.

 

Are we really surprised by such illegality in the Bank Sector? No.

 

Do we expect further issues to come out of the woodwork in the future? Yes.

 

But here are the two key words in all of this mess…… ‘including’ and ‘RBS’.

 

We own RBS as tax payers. The fines are in addition to the previous £391 million RBS paid for other Libor ‘indiscretions’.  

 

We also owned RBS when the illegal rigging was taking place.

 

Is it just me or has this all been brushed under the carpet with the rest of the Banking Sector scandal? Well it shouldn’t. No other Government department / company would get away with this without a public inquiry and those responsible hung out to dry.

 

Why make allowances for something that is illegal and morally corrupt?

 

I just don’t get it. 

Old Argument

Having dissected the 123 Page Autumn Statement (welcome to my world), there was some clear and hard hitting words on the State Pension.

 

George Osborne announced in his speech plans for the pension age to "keep track with life expectancy"……or as I like to call it…...a £500 billion saving for the Government by ensuring we get the State Pension later in life.

 

It means people now in their forties will not get the state pension until they are 68, while those in their thirties will have to wait until they are 69. And don’t expect this to be the last time there will be increases.

 

You will see from my comments back in July, this will be a reoccurring problem unless the timebomb is addressed properly and not half-heartedly. 

 

http://stevesmithlive.blogspot.co.uk/2013/07/pension-time-bomb.html

 

So the question is……if we take the responsibility to save for retirement personally / privately to create additional income to the State Pension, how can we do so when the goalposts on age keep moving?

 

It is the longest running oxymoron coming out of Westminster……encourage us to save for old age whilst pulling the rug from beneath our feet.

 

The law of averages tells me that after decades of failure on this subject, sooner or later a Government has to get this right.

 

I live in hope.

 

Tunnel Vision

The Story……

 

The Government has unveiled its infrastructure spending plan for the next two decades, describing it as "a blueprint for Britain". About £375bn of investment in energy, transport, communications and water projects is planned.

 

At a time of austerity, the big question is……how will this be funded?

 

 

The Intrigue……

 

The National Infrastructure Plan (NIP) includes Private Sector investment as well as the Government selling some of its assets, including…….the Government selling off its 40% stake in the Eurostar rail service.

 

 

The Concern……

 

Eurostar has doubled its profit this year and has a massive expansion plan through additional European destinations. It’s pretty fair to state that the value of the shareholding will increase dramatically over the next 2 – 3 years in line with increasing turnover and profit.

 

So why sell now? Why sell an increasingly valuable asset to fund a project in 10 – 15 years (and beyond)?

 

Here is the key problem……you have people working for non-profit making organisations (AKA Politicians) making business investment decisions in a profit making environment. 2 + 2 = 3.

 

Have we not learnt anything from the farcical undervalued sale of Royal Mail?

Autumn Statement

Following the fallout from Thursday’s Autumn Statement, I’ll give you 2 options to ‘catch up’.

 

 

Firstly, the full report can be found here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/263942/35062_Autumn_Statement_2013.pdf

 

Secondly, invest 3 minutes to read below.

 

I’m happy with either – just make sure you know what you need to know!

 

Key Points:

 

State Pension age to increase for many (yet again).

 

UK economy to grow by 1.4% this year (double the 0.6% predicted in March) with 2.4% growth next year instead of 1.8% (luck more than judgement)

 

An extra £1 billion of cuts from the budgets of Government departments for each of the next three years (less money = poorer services).

 

Car tax discs to be scrapped and replaced by electronic vehicle excise duty system (massive investment for very little reward).

 

2014's planned 2p-a-litre fuel tax rise scrapped (political headline – why not reduce some of the taxes already levied?).

 

Borrowing falls more than forecast and employment forecasts are revised up.

 

Pensioners living abroad will have to prove they are alive (the angle was a crackdown on fraud but this was actually due to the volume of costly errors).

 

A major crackdown on tax-evasion and avoidance to recoup £9bn over five years (if the return on the investment is that good – why wait 5 years?).

 

Employer National Insurance contributions for under-21s earning less than £42,285 scrapped from April 2015 (political headline – cheap giveaway as very few under-21’s earn enough to pay National Insurance).

 

Tax breaks to encourage "fracking" for gas (political headline to suggest we are looking for alternatives).

 

A cap on total government welfare spending will start in 2015 (why wait?).

 

An extra £150m to update and build kitchens and dining rooms in English primary schools (nice headline but the reality is that works out at only £8,000 per school).

 

A move towards subsidising offshore wind farms instead of onshore wind farms (see fracking).

 

Plans for £375bn of investment in energy, transport, communications, and water projects

 

Selling off the government's 40% stake in the Eurostar rail service (farcical on many levels).

 

In summary, little to cheer and much to consider.

 

Has it ever been otherwise?