Stimulate the UK Economy

[Aron Stevenson]

I'm on a fixed rate mortgage so the rate cuts have been of no benefit at all to me. I'm sure I'm not alone on this one.....

Instead of investing/gambling more tax payers money with banks and car manufacturers, why not give tax relief to people with mortgages and people who buy cars.

People will have an incentive to buy and it just might get the money flowing.

What say you?

[matt.chatterley]

I'm also on fixed rate (two mortgages) - so hasn't helped me either. On the other hand, when the interest rates go flying upwards faster than Elton John's proverbial Rocket Man, we'll both be OK.

I definitely agree that GB (he's called something else in my presence) and his cronies should be focussing more on stimulating public spending than on tinkering with other bits of the economy. It has a distinctly "Uh. OK. This machine has gone 'ping' - we don't know why or how to fix it, so we'll take it apart, fiddle with stuff and put it back together again.." feel.

For example:

1. Stopping sensationalism in the media from "talking" us deeper into recession. Denial is futile - a little bit of optimism is valuable.

2. Cutting taxes on businesses (even if only small ones) - a dip in the rate of corporation tax (instead of faffing about with VAT even) could help companies retain a higher proportion of their profits - letting them plough back (possibly by keeping on staff who might otherwise have to go)

3. Force credit companies to lower their rates in line with interest rate cuts (if the latter MUST be made). It's great having a rate of 0.5. But if GitCard still charge 27.5% APR, then little Jonny who has £10k on his GitCard is still pretty much stuffed. If the financial institutions were bound to pass on cuts, people would be repaying a higher proportion of capital - reducing overall debt.


That'll do for now. I'm ranting 'cos it's early.

[Paul Simister]

I will join this habit of declaring our self interest first.

I don't have a mortgage but I am a saver/investor and this is hurting in terms of wealth and income. Fortunately I work but I feel very sorry for independent pensioners who has seen their fortunes crash.

The government allowed a huge asset bubble to build up based on borrowed easy money and it seems counter-intuitive to be encouraging more of the activities that got us into this mess.

But there is little choice because of the multiplier effect where spending creates extra spending or not spending creates hardship and a deeper depression.

I looked at the savings ratio early last year and it increases during tough times. It is natural to start thinking that you need a bit of reserve cash because you don't know how bad things will be.

There are huge adjustments to come since some of the pension projections are frightening.

I read that when national insurance and the state pension was started there were five workers to every pension. In the not too far distant future, the projections say that will be down to just two people - and one of those will be employed by the state.

Where do we go from here?

I would like to see much more emphasis on entrepreneurship - lower corporation tax, lower employers national insurance (tax on creating jobs) and I am old enough to remember the 100% capital allowances which gave immediate tax relief on investments in capital expenditure.

I would also like to see action on cutting red tape or at least lifting any thresholds to exempt the small businesses. I understand some protection is needed but impose it on the defaulters, not everyone.

[Majjie]

Please would you all sign the petitions at Get Britain Building

The catastrophic decline in new building of homes, and in people moving house, affects a whole host of employees and tradespeople as well as all sorts of industries - including kitchens!

The campaign is asking, amongst other things, for a reduction of VAT to 5%, for all building miantenance and repair work, encouragement for the building of social housing; a timetable for government investment in schools and hospitals, encouragment of responsible lending and a graduated stamp duty.

[JGOffshore]

I have a mortgage at 0.99% above base rate. It is getting silly. I'm now paying £1000 a month less than I was a year ago (it is a big mortgage) but who is that helping? I suppose I have £1,000 a month more to spend but I'm not doing that as being self employed I need to save up for a rainy day.

The idea that printing money is going to help may not be such a good one. It is more complcated that Mr Brown seems to think and could go very wrong.

Have a look at this:

What Is Quantitative Easing? (Printing Money) | Link4Business

[Pimlico]

I'm doing what the Government wants me to:

8 New Affordable Homes for Westminster Renting Flats in London

[Aron Stevenson]

Thanks very much for all your comments, I do enjoy learning other points of view, especially on a subject as complex as this.

Best wishes,

[Aron Stevenson]

Dave Hough - former Financial Controller at CO-OP Financial Services has some interesting comments on Bank Nationalisation - "The only other way out I see in the current climate is for governements to directly paydown x % of outstanding mortgage advances, eg make direct capital repayments to the mortgageholders account."

Full article can be found here

Best wishes,