The Public Has Spoken

The latest survey commission by gocompare.com has revealed the Top 15 tips UK consumers would recommend to save money in 2015. It would appear that the seemingly endless self-publicity campaign that is ‘Martin Lewis’ is having success in changing people’s habits.

 

The results:

Rank	Top 15 Money Saving Tactics For 2015	%
1	Use vouchers, coupons, money off apps to get discounts	48
2	Use loyalty and cashback schemes	43
3	Shop around for cheaper car insurance	31
4	Shop around for cheaper home insurance	30
5	Turn the thermostat down to reduce heating bills	30
6	Cut down on takeaways and ready meals	28
7	Switch energy provider for a cheaper tariff	27
8	Switch to a cheaper supermarket	26
9	Cut out takeaway coffee/coffee shop treats	26
10	Draw up a budget and stick to it	26
11	Reduce the amount spent on holidays	19
12	Review or cancel satellite/cable TV subscription	17
13	Leave car at home and walk or use public transport	15
14	Review or cancel mobile phone contract	13
15	Transfer all credit card debt to a 0% card	8

 

Perhaps most worryingly……the analysis revealed that many are continuing to experience a ‘cost of living crisis’ with 15% admitting to being seriously worried about their finances and 8% saying that they have to rely on credit cards to make ends meet.

 

The survey also concluded:

 

34% of those surveyed said that they needed to reduce their outgoings in 2015.

 

17% tend to run out of money before the end of the month.

 

13% expect to have a credit card debt for most of 2015.

 

All very worrying……let’s hope the next Government budget is more about ‘budget’ and less about ‘vote winning’.

 

We shall see.  

Royal Fail

I voiced my anger at the privatisation of Royal Mail last year. The opening share price that was obtained for the company was well below market value and to date, nobody has been made accountable.

 

There have been clear winners from the lower price though. For example……

 

George Osborne’s best man (Peter Davies) heads up a hedge fund which has secured profits in excess of £30 million from the privatisation of Royal Mail in under six months. He sits on the management committee of Lansdowne Partners, which snapped up shares at the offer price of just 330p. They are now trading at around 500p……some 50% higher.

 

The Government has been slammed by the National Audit Office for an under-priced sale which saw City firms walk off with two-thirds of the public asset while 40,000 ordinary individual investors were excluded. If the city and certain ‘friends’ are the winners, then taxpayers are the losers.

 

This is the actual quote from business minister Michael Fallon in April 2014:

 

“I can state categorically that we have no intention of selling off Royal Mail cheaply. We will sell shares in Royal Mail at a fair commercial price that represents value for money for the tax payer.”

Well here’s the thing…….when the share price increases by 50% in the first 6 months, achieving a fair commercial price has not been achieved.

 

The result of all of this is that there could have been more coffers in the public purse. This would either lead to better public services or a reduction in tax.

 

Perhaps more concerning is that to date, nobody has been held responsible for this mess.

 

Another one for taxpayers to take on the chin.  

 

 

Tory Election Campaign (AKA The Autumn Statement)

So there you have it……the Autumn Statement gave us pretty much what we were expecting – something for all voters to be happy with!

For homeowners……(and 80% of voters are)

A new approach to stamp duty that will make 98% of all property sales cheaper.

For the over 55’s……(a huge voting block – 75% will vote)

ISA limits to increase again in April and as well re-confirmation of revolutionary changes to pensions.

For Bank Bashers……(apparently 95% of voters distrust them)

Closure of a tax loop hole that will hit corporate profits.

For Middle England……

An increase to the 40% tax limit meaning higher rate tax payers will be £224.00 per year better off.

For Families……

Flight duty scrapped for young children (under 12).

For Students……

Loans will be made available for post-graduates.

All in all, it was a crowd pleasing election sweetener where everyone got a little bit. What is more impressive, is that this was a neutral give away in that it didn’t cost a penny as it was funded from savings / taxes elsewhere.

Just don’t mention Government borrowings or the deficit……it was quickly thrown away.

Just another 6 months of this political strutting to go……thankfully!

General Election White Elephant

Christmas will be here and gone before you know it and all eyes will turn to the General Election in the first half of 2015.

It’s interesting that all the political opponents are happy to create small arguments to gain small political points, yet the biggest issue of all is likely to remain unearthed……Public Borrowing.

You see, Public Borrowing is such a negative subject and there is little to be gained by mentioning as part of election campaigns. Let’s put it simply……there are only two things you can do with the public debt: (1) Increase It or (2) Reduce It through public service / austerity cuts. Either way, you can’t win as a political party. So what’s the alternative……simply don’t mention it!

Watch how little airtime this subject gets……it will frighten you.

But here are the simple facts that you need to know:

 

- This financial year's borrowing target is £95.5 billion.

 

- With 6 months of the year left, the Government have already borrowed £64.1 billion

 

- £64.1 billion is an increase of £3.7billion from the same period last year.

So, it looks very unlikely the Government will hit its target. In fact, despite years of austerity, public borrowing is increasing and it will rise further.

A recent report has warned that more than £3 billion of taxpayer money was required to deal with massive structural issues with the House of Parliament building or it could be left an unusable ruin.

Given the above, perhaps it already is.

 

 

RubBiSh

I love this……in an ironic, scratching head, you couldn’t script it kind of way.

 

The story……

 

RBS (you remember them right……you own 80% of them!) were called to Government to answer questions to the Treasury Committee over claims that the bank deliberately killed off very viable firms by requesting immediate repayment of loans as well as making money out of small and medium sized businesses that were in financial distress.

 

Senior RBS directors gave evidence to the committee to confirm that this was not the case. Story over then……or is it?

 

There is a twist in the tale as good as any Agatha Christie……it has since transpired that the evidence given was factually incorrect, manipulated to support RBS and made a mockery of the investigation.

 

And RBS’s response to this? “An honest mistake had been made”.  

 

Given the track record of the banking sector over the last 10 years, the word ‘honest’ is comical.

 

It seems that the banks have not learnt one lesson to me. These so called 'errors' won't be stamped out until a few very senior bankers are imprisoned for considerable lengths of time. Then and only then will the greed of banks be curtailed and a culture of transparency and honesty be instilled.

 

Just a thought.

Economic Clouds

It’s fair to state that life in the economic-pension-investment-politics fast lane might not be rock n roll for some……but there is never a dull moment.

 

I have spent quite some time over the last few weeks with economists listening to their opinions on where global economies are positioned and what future direction is likely (see……it’s rock n roll really). And when I have trolled through my pages of notes, it is a fair conclusion that the UK economy has held up pretty well when compared to recession threatened areas like Japan and the Euro Zone.

 

Why?

 

We are a consumer driven economy, where 2/3rds of our GDP is based on consumers spending. If we spend, the economy looks good. If we don’t, then we head for recession pretty quickly. The key to spending is low interest rates (more money in our pockets)……and the base rate has been at its lowest ever level in the UK for over 5 years now. Why do you think the Bank of England has delayed putting up interest rates for so long!

 

But there is only so far consumer spending can take us……and sooner or later we will be affected by the ‘global’ slowdown. Japan, as the third largest buyer of goods and services in the world, going into recession does not bring positive connotations to the UK. Add to this the Euro Zone ……barely keeping out of recession and they are the buyers of 40% of everything we make in the UK. It’s concerning.

 

It is not all doom and gloom though. The Japanese government has made a commitment to the tune of $3 trillion to inject into the economy. The Euro Zone is also poised to take similar Quantitative Easing measures……if only Germany would stop blocking such action.

 

So as you can see, it’s never dull. I’ll let you decide if its rock n roll though!

 

 

£1.7 Billion Worth of Spin

I am sick with disgust at the idiots at Westminster who think we are even bigger idiots than them.

 

Let’s start at the beginning…….

 

The European Union budget is partly financed on the basis of the gross national income figures of its members. The more income a country makes, the more it must pay into the budget. The EU commission calculated that Britain had actually performed better than it had originally reported and as a consequence was presented with a demand for £1.7 billion to be paid on 1 December 2014.

 

Ever keen to jump on some political goodwill and very conscious that UKIP’s anti-Euro policies are gaining momentum, David Cameron parked his floppy side parting and roared to the world whilst thumping his chest…..“the UK will not be paying this amount on 1 December 2014 or be held to ransom by Europe”. And off to Europe he went to defend our corner.

 

The result?

 

A reduction in the amount to £850 million and a delay in the date that it must be paid (towards the end of 2015).

 

David Cameron and George Osborne proclaimed to anyone who would listen that the UK had been defended and we fought our corner for the people.

 

All good then I hear you cry……unfortunately not.

 

1.     The reduction was not negotiated – we have simply used a credit we are entitled to in 2016 and have brought it forward.

 

2.     The date was negotiated to ensure that this money did not have to be found until after the General Election.

 

That’s hardly putting your balls on the line for the UK is it Mr Cameron? However, from all the spin you would have thought he had been to war and saved our land. For me, this is typical UK politics……lots of publicity to mask the real issue. And here it is:

 

In 2008 we paid £2.7 billion to the European Union budget. In 2013, this figure was £11.3 billion.

 

Which leaves me thinking……what exactly are the benefits of being in the EU and what do we get for our £11.3 billion?

 

It’s a frightening thought.