kick starting UK ecomony

10:53am Thursday 9th August 2012 in Blogs By Darren Hayday

Not many of us would remember the 1930’s depression and living in the South East of England sometimes we don’t see the bigger picture and just how bad things are out there.
Many of us by now have started to feel the changes and sacrifices that we’ve had to make in order to bolt down and get through this.
Looking back to pre-bank woes, credit crunches, depression, and recession – I can just about remember the good times, the better times.
Banks got greedy, politicians turned a blind eye and credit was far too easy to obtain – living today on tomorrow’s money.
Of course Labour were racking up the bills and spending like crazy to keep themselves in power and I guess that I can see the sense in the Conservatives/Lib dem coalition having a main focus of reducing down the debt, etc
But this all started in 2008 and now its 2012 – that’s 4 years that we’ve had to go through this and we are still here at 0% growth in the UK.
I fully understand that the world economy is in the same position as there isn’t much investment/wonga flying around. However.. it’s about time that something was done otherwise we are never going through this. Some say that it’s going to be another 5 or 8 more years of depression.
Here’s what I think that the current Government should be doing:
• Instead of directing the Lottery money into Arts/Good funds/Sport, etc – for the short term – direct it into a scheme to help ownership of first time buyers.
• Set up part ownership schemes so that first time buyers can get a leg onto the ladder.
• Make the banks that are owned by the taxpayers – give mortgages to everyone (i.e. relax the tight constraints of not giving money to hardly anyone!)
• Change the Stamp Duty limits – make them much higher. My house and those around me in my street will never sell our house for a penny over £250k because of this very silly band.
• Relax new building laws, have more sites to build homes on.
• If we get the housing market moving then this would at least kick start the economy.
Look at what help that the car industry got and they are selling new cars.
The housing sector has been shafted and forgotten and affects most of us.
Another area would be for all companies to get ‘marketing grants’ to pay to find new clients.
Surely David Cameron and co have some kind of brain cell rolling around somewhere?

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Comments (8)

11:56pm Thu 9 Aug 12

gpn01 says...

"Make the banks that are owned by the taxpayers – give mortgages to everyone (i.e. relax the tight constraints of not giving money to hardly anyone!) ". They tried that in the USA. Known as Freddie Mac and Fannie May. Led to what was became well known as "sub-prime"....ring any bells what happened next?

There's some simple things that a government 'could' do.....but wouldn't because it wouldn't be popular. The obvious one is to look at what generates economic growth. Simply, it's putting money in to something that results in more money coming out. That leads to prosperity....which everyone likes.

For the UK, money in = revenue from taxation, money out = government expenditure. So, you can stimulate growth in several ways. Firstly, decrease taxation....that leads to more disposable income that Joe Public may then choose to spend on goods & services...which increases demand, which leads to higher employment, etc. Secondly increase the return on expenditure. Simplest way is to spend money on stuff that has a financial payback....e.g. goods, services, jobs, infrastructure and stop spending money on stuff that doesn't. There's a significant line item in government expenditure known as Foreign Aid and it's around £12Bn p.a. Imagine if this was invested in the UK (or used to decrease tax bills). Imagine, you could give 12,000 people £1m each to spend on whatever they want. Or give 12 million people £1,000.

You could stop vanity projects, e.g. London Olympics has cost £9.3Bn so far (and you can bet it'll rise). Imagine, the government could have given away £1m to 9,000 businesses....imagin
e what that could have done to the companies who were able to invest £1m, for free, in plants and machinery!

If the government stopped going to war, it would save money....Afghanistan operations are costing £4.5Bn p.a. The odd one with that though is that, as much as people may not like the idea, warfare provides jobs for weapons manufacturers.

Anyway, there's a few alternative ideas!
"Make the banks that are owned by the taxpayers – give mortgages to everyone (i.e. relax the tight constraints of not giving money to hardly anyone!) ". They tried that in the USA. Known as Freddie Mac and Fannie May. Led to what was became well known as "sub-prime"....ring any bells what happened next? There's some simple things that a government 'could' do.....but wouldn't because it wouldn't be popular. The obvious one is to look at what generates economic growth. Simply, it's putting money in to something that results in more money coming out. That leads to prosperity....which everyone likes. For the UK, money in = revenue from taxation, money out = government expenditure. So, you can stimulate growth in several ways. Firstly, decrease taxation....that leads to more disposable income that Joe Public may then choose to spend on goods & services...which increases demand, which leads to higher employment, etc. Secondly increase the return on expenditure. Simplest way is to spend money on stuff that has a financial payback....e.g. goods, services, jobs, infrastructure and stop spending money on stuff that doesn't. There's a significant line item in government expenditure known as Foreign Aid and it's around £12Bn p.a. Imagine if this was invested in the UK (or used to decrease tax bills). Imagine, you could give 12,000 people £1m each to spend on whatever they want. Or give 12 million people £1,000. You could stop vanity projects, e.g. London Olympics has cost £9.3Bn so far (and you can bet it'll rise). Imagine, the government could have given away £1m to 9,000 businesses....imagin e what that could have done to the companies who were able to invest £1m, for free, in plants and machinery! If the government stopped going to war, it would save money....Afghanistan operations are costing £4.5Bn p.a. The odd one with that though is that, as much as people may not like the idea, warfare provides jobs for weapons manufacturers. Anyway, there's a few alternative ideas! gpn01

3:38pm Fri 10 Aug 12

Darren Hayday says...

gpn01 wrote:
"Make the banks that are owned by the taxpayers – give mortgages to everyone (i.e. relax the tight constraints of not giving money to hardly anyone!) ". They tried that in the USA. Known as Freddie Mac and Fannie May. Led to what was became well known as "sub-prime"....ring any bells what happened next?

There's some simple things that a government 'could' do.....but wouldn't because it wouldn't be popular. The obvious one is to look at what generates economic growth. Simply, it's putting money in to something that results in more money coming out. That leads to prosperity....which everyone likes.

For the UK, money in = revenue from taxation, money out = government expenditure. So, you can stimulate growth in several ways. Firstly, decrease taxation....that leads to more disposable income that Joe Public may then choose to spend on goods & services...which increases demand, which leads to higher employment, etc. Secondly increase the return on expenditure. Simplest way is to spend money on stuff that has a financial payback....e.g. goods, services, jobs, infrastructure and stop spending money on stuff that doesn't. There's a significant line item in government expenditure known as Foreign Aid and it's around £12Bn p.a. Imagine if this was invested in the UK (or used to decrease tax bills). Imagine, you could give 12,000 people £1m each to spend on whatever they want. Or give 12 million people £1,000.

You could stop vanity projects, e.g. London Olympics has cost £9.3Bn so far (and you can bet it'll rise). Imagine, the government could have given away £1m to 9,000 businesses....imagin

e what that could have done to the companies who were able to invest £1m, for free, in plants and machinery!

If the government stopped going to war, it would save money....Afghanistan operations are costing £4.5Bn p.a. The odd one with that though is that, as much as people may not like the idea, warfare provides jobs for weapons manufacturers.

Anyway, there's a few alternative ideas!
You should be advising our not so good Chancellor!

Also to address the point about the bank’s lending to all - I didn’t mean all and sundry (i.e. being that was as you stated completely correct - which started this whole mess in giving mortgages to people that had no chance to pay them back i.e. in the US, etc)

But - I mean to working people that can afford from their monthly budgets to apply for a mortgage that at the moment are getting turned down because the banks are being tight as ducks backsides..

As an example - if I today were to apply for a mortgage, I would not be able to arrange one for my own home - as I could do a number of years ago.. I would fall short by around £50k!

I feel extremely sorry for young people of today that are just not financially able to get enough deposit together for their first mortgage/property.

You are entirely right - more must be done - not just concentrating on lowering the deficit - that would just mean more stagnation and a longer recession/depression
. We would be looking to come out of recession in about another 8 more years time!!

We need a Government with balls (and I don’t mean Ed either!)
I don’t think that the current political party system is serving us a voters/tax payers – they are only ever going to look out for themselves and big business.
To them, it’s a merry-go-round till the next lot get back in – or have to share the ride with someone else (i.e. coalition) – they honestly don’t care (the party big wigs) and are only looking for their knighthoods/peerages or board Directorships/Consul
tancy roles after their tour of duty in Westminster.
[quote][p][bold]gpn01[/bold] wrote: "Make the banks that are owned by the taxpayers – give mortgages to everyone (i.e. relax the tight constraints of not giving money to hardly anyone!) ". They tried that in the USA. Known as Freddie Mac and Fannie May. Led to what was became well known as "sub-prime"....ring any bells what happened next? There's some simple things that a government 'could' do.....but wouldn't because it wouldn't be popular. The obvious one is to look at what generates economic growth. Simply, it's putting money in to something that results in more money coming out. That leads to prosperity....which everyone likes. For the UK, money in = revenue from taxation, money out = government expenditure. So, you can stimulate growth in several ways. Firstly, decrease taxation....that leads to more disposable income that Joe Public may then choose to spend on goods & services...which increases demand, which leads to higher employment, etc. Secondly increase the return on expenditure. Simplest way is to spend money on stuff that has a financial payback....e.g. goods, services, jobs, infrastructure and stop spending money on stuff that doesn't. There's a significant line item in government expenditure known as Foreign Aid and it's around £12Bn p.a. Imagine if this was invested in the UK (or used to decrease tax bills). Imagine, you could give 12,000 people £1m each to spend on whatever they want. Or give 12 million people £1,000. You could stop vanity projects, e.g. London Olympics has cost £9.3Bn so far (and you can bet it'll rise). Imagine, the government could have given away £1m to 9,000 businesses....imagin e what that could have done to the companies who were able to invest £1m, for free, in plants and machinery! If the government stopped going to war, it would save money....Afghanistan operations are costing £4.5Bn p.a. The odd one with that though is that, as much as people may not like the idea, warfare provides jobs for weapons manufacturers. Anyway, there's a few alternative ideas![/p][/quote]You should be advising our not so good Chancellor! Also to address the point about the bank’s lending to all - I didn’t mean all and sundry (i.e. being that was as you stated completely correct - which started this whole mess in giving mortgages to people that had no chance to pay them back i.e. in the US, etc) But - I mean to working people that can afford from their monthly budgets to apply for a mortgage that at the moment are getting turned down because the banks are being tight as ducks backsides.. As an example - if I today were to apply for a mortgage, I would not be able to arrange one for my own home - as I could do a number of years ago.. I would fall short by around £50k! I feel extremely sorry for young people of today that are just not financially able to get enough deposit together for their first mortgage/property. You are entirely right - more must be done - not just concentrating on lowering the deficit - that would just mean more stagnation and a longer recession/depression . We would be looking to come out of recession in about another 8 more years time!! We need a Government with balls (and I don’t mean Ed either!) I don’t think that the current political party system is serving us a voters/tax payers – they are only ever going to look out for themselves and big business. To them, it’s a merry-go-round till the next lot get back in – or have to share the ride with someone else (i.e. coalition) – they honestly don’t care (the party big wigs) and are only looking for their knighthoods/peerages or board Directorships/Consul tancy roles after their tour of duty in Westminster. Darren Hayday

5:46pm Fri 10 Aug 12

gpn01 says...

A simpler solution to the problem of people not being able to get onto the housing ladder is to change to the European model where many people don't own their property anyway. It's very much a British thing that you need to own your own property and it could be because it was always seen as a safe form of investing. The reality is that it's not and house prices go down as well as up. What's need is a societal change that provides rental accomodation at much, much lower cost than that compared to outright purchase. That would lead to much greater workforce mobility too, whcih could lead to lower unemployment, that helps the economy and on we go....
A simpler solution to the problem of people not being able to get onto the housing ladder is to change to the European model where many people don't own their property anyway. It's very much a British thing that you need to own your own property and it could be because it was always seen as a safe form of investing. The reality is that it's not and house prices go down as well as up. What's need is a societal change that provides rental accomodation at much, much lower cost than that compared to outright purchase. That would lead to much greater workforce mobility too, whcih could lead to lower unemployment, that helps the economy and on we go.... gpn01

7:17pm Fri 10 Aug 12

Darren Hayday says...

That would be an idea but the other side to the coin is that owning ones property means that children/grand-child
ren get a share of your inheritance (what's left of it after the Government get their high tax amount from your estate) - which in turn helps them with their own step onto the housing ladder.

Yes the days maybe over (for now) where it was looked at as an investment - but now more for a place to call your own and live in.

But I don’t see a problem for those that want to climb up the ladder and have a more comfortable life.

With renting it of course means that all of your money goes to the land-lord rather than into your own nest egg.

I still think that the problem lies with the banks not lending and also in the Government for not making them do it. If you ask me - this and previous Chancellors have always been too close to the City/Banking. The banking world knows how to 'use them'... for their own means.

I met a very successful hedge fund manager not too long ago and he's a billionaire - not a very nice person and I can only imagine the things that he gets away with - just because of the tax that he pays to the Government....
That would be an idea but the other side to the coin is that owning ones property means that children/grand-child ren get a share of your inheritance (what's left of it after the Government get their high tax amount from your estate) - which in turn helps them with their own step onto the housing ladder. Yes the days maybe over (for now) where it was looked at as an investment - but now more for a place to call your own and live in. But I don’t see a problem for those that want to climb up the ladder and have a more comfortable life. With renting it of course means that all of your money goes to the land-lord rather than into your own nest egg. I still think that the problem lies with the banks not lending and also in the Government for not making them do it. If you ask me - this and previous Chancellors have always been too close to the City/Banking. The banking world knows how to 'use them'... for their own means. I met a very successful hedge fund manager not too long ago and he's a billionaire - not a very nice person and I can only imagine the things that he gets away with - just because of the tax that he pays to the Government.... Darren Hayday

11:12pm Fri 10 Aug 12

gpn01 says...

Banks are caught between a rock & a hard place as far as mortgages go. One of the problems with the "banking crisis" was that too much money was loaned to people who were too high risk. EVERYONE involved in this was complicit - the banks who offered morgages at fives (or more) times annual salary (and didn't look closely at people's expenditure), the brokers who enccouraged "self assessment" mortgages and the people themselves who put themselves into debt way beyond their ability to repay it. Everyone in that chain was motivated by greed - whether it was for the commission, the interest or the chance to have a property that would go up in value.



The banks assessed this to be ok though because the mortgages were secured against property...and that never goes down in value does it? In much the same way that the public discovered that big banks can fail, the banks suddenly found that much of their loan book was secured against property that hadn't held its value. As a result the banks were told that they were taking too many risks and that they should stop beign so reckless. So now we're back to a situation where they're assessing that someone is too high a risk....and they're being criticized for taking a more prudent approach!
Banks are caught between a rock & a hard place as far as mortgages go. One of the problems with the "banking crisis" was that too much money was loaned to people who were too high risk. EVERYONE involved in this was complicit - the banks who offered morgages at fives (or more) times annual salary (and didn't look closely at people's expenditure), the brokers who enccouraged "self assessment" mortgages and the people themselves who put themselves into debt way beyond their ability to repay it. Everyone in that chain was motivated by greed - whether it was for the commission, the interest or the chance to have a property that would go up in value. The banks assessed this to be ok though because the mortgages were secured against property...and that never goes down in value does it? In much the same way that the public discovered that big banks can fail, the banks suddenly found that much of their loan book was secured against property that hadn't held its value. As a result the banks were told that they were taking too many risks and that they should stop beign so reckless. So now we're back to a situation where they're assessing that someone is too high a risk....and they're being criticized for taking a more prudent approach! gpn01

11:10am Mon 13 Aug 12

Darren Hayday says...

I agree entirely - however we are still left in the current situation whereby we are all stuck in a rut and 'hoping' that things will get better - even if that would be in a years, 3yrs or 8yrs time...

Something needs to give to get the economy going again.
We are not seeing any ‘bald’ or forthright plans – we are just seeing a government that is doing hardly nothing other than bleating on about how much of the deficit must be paid back.
I agree entirely - however we are still left in the current situation whereby we are all stuck in a rut and 'hoping' that things will get better - even if that would be in a years, 3yrs or 8yrs time... Something needs to give to get the economy going again. We are not seeing any ‘bald’ or forthright plans – we are just seeing a government that is doing hardly nothing other than bleating on about how much of the deficit must be paid back. Darren Hayday

11:38pm Tue 14 Aug 12

gpn01 says...

Problem is that bold plans may win a few votes but lose many more. So one radical suggestion would be to increase the term of office from five years to ten. That means that each Government would benefit (or suffer) from the consequences of its own strategy. The current timescales means that a Government doesn't last long enough to see if its strategy has worked or not.
Problem is that bold plans may win a few votes but lose many more. So one radical suggestion would be to increase the term of office from five years to ten. That means that each Government would benefit (or suffer) from the consequences of its own strategy. The current timescales means that a Government doesn't last long enough to see if its strategy has worked or not. gpn01

9:36am Wed 15 Aug 12

Darren Hayday says...

I don’t agree with that... This would be like bringing in a Dictator and I can guarantee that once in the PM at the time will try to extend the term further - I know how power works and what it does to people - it’s the same all over the world.

To be honest - perhaps we shouldn’t have politicians running the Country - perhaps we should have technocrats instead (i.e. Italy) - but with a form of overview from the voters.

Most politicians are in it for what they can get out of it and the good ones are normally left on the back benches for holding onto their principles and not selling out their souls.

In this Country and the same around the world one, two or max x3 political parties all have the best chance of being in power - we are perhaps the nearest to a democracy - but it’s still a monopoly/cartel ran system that makes sure that MP's mostly aren’t elected unless they are from a political party especially one of the top x3 in the UK.

Once there was a time when the Tories were for the rich and the Labour party for the poor - we have a kind of right/left wing system but its very centralised and very similar to the rotten borough system whereby you either live in a Conservative or Labour voting town or if you are really lucky from a marginal seat!

I would very much like to stand as a parliamentary candidate for Wycombe - however I may as well just burn the deposit money for what it’s worth as whoever is chosen from the Tory party (ice Steve Baker) will get voted in again... unless there are big changes in the political voting system and I know that the big parties want things to stay as they are for as long as they can get away with it.. Even if it means that there are only a handful of members left in the main parties.

In the English civil war and afterwards - it wasn’t the people who won, it was the parliamentarians and then after the Royalists when the King was restored to the throne.

Also the signing of the magna carta was giving power to the Barons away from the King - us the voters - do not hold the real power to make any changes - it’s very diluted..and very controlled by the political elite.
I don’t agree with that... This would be like bringing in a Dictator and I can guarantee that once in the PM at the time will try to extend the term further - I know how power works and what it does to people - it’s the same all over the world. To be honest - perhaps we shouldn’t have politicians running the Country - perhaps we should have technocrats instead (i.e. Italy) - but with a form of overview from the voters. Most politicians are in it for what they can get out of it and the good ones are normally left on the back benches for holding onto their principles and not selling out their souls. In this Country and the same around the world one, two or max x3 political parties all have the best chance of being in power - we are perhaps the nearest to a democracy - but it’s still a monopoly/cartel ran system that makes sure that MP's mostly aren’t elected unless they are from a political party especially one of the top x3 in the UK. Once there was a time when the Tories were for the rich and the Labour party for the poor - we have a kind of right/left wing system but its very centralised and very similar to the rotten borough system whereby you either live in a Conservative or Labour voting town or if you are really lucky from a marginal seat! I would very much like to stand as a parliamentary candidate for Wycombe - however I may as well just burn the deposit money for what it’s worth as whoever is chosen from the Tory party (ice Steve Baker) will get voted in again... unless there are big changes in the political voting system and I know that the big parties want things to stay as they are for as long as they can get away with it.. Even if it means that there are only a handful of members left in the main parties. In the English civil war and afterwards - it wasn’t the people who won, it was the parliamentarians and then after the Royalists when the King was restored to the throne. Also the signing of the magna carta was giving power to the Barons away from the King - us the voters - do not hold the real power to make any changes - it’s very diluted..and very controlled by the political elite. Darren Hayday

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