Britannia Radio

A round-up of economic news at the end of the day  follows.  Just 
before midnight the follwing article appeared.  I give the 
iontroduction only because the scheme is complicated and I want to 
read it properly and digest it!!   It says:- - - -
"Taxpayers' money will be lent directly by the Government to 
struggling businesses
Taxpayers' money will be lent directly by the Government to 
struggling businesses under a radical new plan to help them through 
the recession, The Daily Telegraph can disclose
Any struggling firm requesting a bank loan will able to apply for 
"match funding" from the Government, under a deal which effectively 
sees the Government acting as a bank itself - - - - - - -."

C
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TELEGRAPH   18.12.08
Virtuous savers and pensioners have suffered most under Labour
Savers and pensioners are the forgotten victims of Labour's recession.

By George Osborne

Over the past year, someone with £10,000 of savings in an easy access 
high street account has seen their income fall from £50 a month to 
less than £25. Having planned for their retirement and put money 
aside for a rainy day, pensioners and savers are seeing their living 
standards fall. Those who weren't caught up in Gordon Brown's Age of 
Irresponsibility are being made to pay the price for it.

Of course, cuts in interest rates by the Bank of England are 
absolutely necessary to try to restimulate the economy. That is why 
we called for them. But the unavoidable collateral damage on savers 
is devastating and it's simply not good enough for the Government to 
walk on by.

With the US Federal Reserve having reduced its interest rate to zero 
per cent, we may well see further rate cuts here. This would make 
life even more difficult for savers.

In circumstances like these, the Government should be there to help. 
But instead, Gordon Brown has made things worse.

First, he has systematically undermined Britain's savings culture 
over 10 years. In 1997, he made the calamitous decision to abolish 
tax relief on dividends paid to pension funds.

According to a report by a fellow of the Institute of Actuaries, this 
tax raid has slashed the value of private sector pensions by £175 
billion. The number of members of private sector pension schemes has 
fallen from 6.1 million in 1995 to 3.6 million last year, while the 
savings ratio has more than halved.

Second, there are things Gordon Brown could be doing now to protect 
savers from further losses. He could suspend the requirement to 
annuitise accrued pensions at the age of 75. Labour's refusal to do 
so means that anyone turning 75 in the near future will receive a 
terrible deal when they are forced to buy an annuity, consigning them 
to a lower income for the rest of their life. This simply isn't fair.

It's also unfair that Gordon Brown still hasn't dealt with the 
Equitable Life scandal. The Parliamentary Ombudsman found the 
Government at fault, and the Prime Minister promised that he would 
respond by Christmas - but is now refusing to take action. That's a 
disgrace, and won't restore confidence in our savings and pensions 
system. Third, with Labour's national debt forecast to double to a 
trillion pounds over the next five years, higher tax rises are 
inevitable.

While the Prime Minister may have forgotten about savers, the 
Conservatives have not. We would suspend the annuity rule. We would 
accept the Ombudsman's report on Equitable Life. We would increase 
the threshold for inheritance tax, so that the vast majority of 
responsible families who save for their children will be exempt from 
estate duty. And we would avoid adding recklessly to the national 
debt and constrain the growth of government spending.

However, we also want to help savers on more modest incomes, and take 
steps to encourage saving and reward financial responsibility. We are 
looking at the tax system to see what can be done. Our general 
election manifesto will include policies to help savers and 
pensioners, as part of our plan to deliver economic change for Britain.
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George Osborne is the shadow chancellor
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POLITICS HOME    18.12 08
COMMENTS
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Sky News at 17:32
Brown "racking up debts for our children" says Cameron

David Cameron, Leader of the Opposition

Mr Cameron said he shared the Archbishop of Canterbury's concerns 
about the level of government borrowing, accusing the government of 
"racking up debts for our children".

"Figures out today show that we are the most indebted country in the 
developed world

"What the Prime minister is doing is adding to that by borrowing 
another £12bn pounds," he said.

He added: "It's going to rack up debts for our children as the 
Archbishop says but it's also undermining confidence as people know 
tax rises are coming and coming soon unless we stop him."
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BBC News at 17:25
Osborne: National loan guarantee scheme needed for Jaguar

George Osborne, Shadow Chancellor

Mr Osborne said that he recognised the importance of Jaguar Land 
Rover to the economy and called on the government to introduce a 
national loan guarantee scheme to support the company.

He said: "I think Jaguar Land Rover are an important company, not 
just because of the many thousands of people they employ but because 
of the many thousands they employ in the supply chain".

He added: "If you had a national loan guarantee of the kind that the 
Conservatives have now been calling for for several weeks, then large 
companies like Jaguar Land Rover, and smaller firms as well, would be 
be able to apply to that scheme."

Mr Osborne went on to warn that the economy would "continue to 
deteriorate" unless the government got credit flowing again and 
added: "I fear in the new year we are going to have an armageddon of 
job losses".

17:35 Sky News

Speaking shortly afterwards, Mr Osborne said that he favoured a broad 
economic strategy, rather than individual state aid for companies 
such as Jaguar Land Rover.

"I think you need to have a broad strategy that helps a lot of firms, 
that can include individual firms like Jaguar Land Rover," he said.

He added: "I don't think we want a return to the blank cheques of the 
1970s and the whole approach of Labour government trying pick winners."

Asked about the Archbishop of Canterbury's criticisms of Gordon 
Brown's spending plans, he replied: "I think he makes a very 
important moral point which is about the fiscal stimulus, that if you 
are storing up debts for future generations that is quite a big thing 
to ask them to pay off.

"I dont think it's a moral thing to do, I don't think its's a fair 
thing to do and that's why the Conservative party stood against that 
temporary cut in VAT."