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Both Redwood and Fallon make persuasive arguments. At the moment we do seem to be punishing the thrifty in order to reward the feckless,however these seem to be desperate times.I know nothing is achieved by panicking but at the moment it seems difficult not to!

"Tory cuts" was so successfully put into the political lexicon by New Labour that the leadership are, understandably, afraid to go down this route - remember that in 2005 we didn't propose cuts, merely a slowing of the rate of spending increase, and it was portrayed, by Labour AND the unions, as swingeing cuts in public spending

Perhaps the political landscape has changed to the point where proposing cuts is acceptable - but it would still be a gamble to make the case

I particularly like JR's remark about the bank bail out.

Equally I echo the sentiment that interest rate cuts have gone too far. Base rate is not the problem but the rate over base that is being charged in combination with a scarcity of funds in many cases.

No matter what the sense of it the reduction will still go ahead.

These unprecedented falls in rates are the one thing that Brown can claim credit for that is popular with the mortgage paying public.

If you are a saver dependent on an income and not locked in at a higher rate then it is a nightmare.

I have already moved half of my Savings out of the traditional banking sector.

Its then just a matter of time before the IMF forces HMG to raise them to Icelandic rates.

This is a slow motion road crash.

This PM doesn't register the importance of saving, and therefore doesn't appreciate 'savers'. In the same way that he only regards 'pensions' as an area that he should have free range of, apart of course from the state sector pensions!!

It would not surprise me if his itchy fingers didn't long to find some way to relieve the savers even more directly of their savings, other than taxing it!

When I say that Brown doesn't understand the importance of saving, I mean that he really does give the impression of being unaware of the wider concept of 'saving for a rainy day'.

@Patsy Sergeant - just wait if he isn't already doing it soon what's left of private pensions scheme will be used up by the government. ( By Stealth if they can manage it - by forcing them to lend and take the loses of the unsound risks being forced upon them ).

TAMING the SCIENCE of ECONOMICS & capturing my vote


If, as John Redwood states, interest rates are in need of adjustment I have to ask "prove it". As it happens I agree but it is my 'gut reaction' - not scientific or subject to new and vital better ways of productive thinking like CPS.

The other CPS (Centre for Policy Studies)no doubt applies a fair degree of evaluation and analytical judgement. Using CREATIVE PROBLEM SOLVING methods, we could produce fully worked SMART statements which could be set in terms of policy and direction. If we know why and what we are doing we can properly monitor what we then do.

Simply then - we need to know where we think we are going, why and what we believe we will make happen and how we are going to do it.

Even the science of economics can be tamed, by thinking better and before opening our public mouths (Einstein's A=x+y+z). These things take time. Its time for C P Solving (unless, of course, the Conservatives are already using such methods). If John Redwood can prove his ascertions concerning interest rates then I and others will fully support him with my vote.

Absolutely agree.

The way savers have been treated is a national disgrace.

Then again, Labour is a national disgrace.

Gordon Brown seems to be quietly pursing a low Pound strategy, devaluing it at every opportunity he gets. He may be right, the export and migration benefits could well outweigh the inflationary risk.

Iain Martin pointing his finger at the public is a bit rich.

The public would love to save, if the government didn't steal all their money to waste on the states own pointless, wasteful pet projects they might be able to afford to.

As for credit/loans/debt -- as every 'graduate' now starts adult life with a government enforced debt of around £15,000 what is their attitude towards credit supposed to be?


For 'Cuts' the word should be 'Transfers' or 'Migration'.

Transferring/migrating responsibilities back from the state to individuals, meanwhile transferring less money from the citizen to the state, and letting the citizen decide what to continue to fund (if anything) directly from that retained wealth. Maybe with tax breaks or an element of matched funding for services provided in this way.

Savers may be interested by the rates you can get from "community lending" via Zopa, etc. It's capitalism in action, my friends.

John Redwood is right: the idea that the ones who've behaved in precisely the opposite way to the irresponsibility that caused all of this mess should be the ones to pick up the tab by having to suffer historically low interest rates on the money they've wisely saved is mind-bogglingly unjust.

This is an argument I'm surprised hasn't gained more traction. Whenever the concerns of savers are raised in news interviews with members of the MPC, their faces seem to assume a look of confused apathy, as though the idea that the responsible ones might have a problem with what's being done to them just doesn't compute, but surely someone has to make a stand. Haven't there been any moves to set up a vocal pressure group on behalf of savers? I should certainly join in a cause like that.

Is there any real proof that low interest rates work in times like these? Except for the few who have uncollared tracker mortgages it is hard to find anyone who benefits.
Savers certainly lose, lose incentive and are forced to replace interest income by drawing down their capital - usually irreplaceable capital.
Certainly there appears to be little bank lending to businesses at these low rates or even close. We know that building societies are starved of savings and so cannot lend out to new mortgages.
We know that zero interest rates did nothing for Japan 17 years ago.
So, I ask again, what compelling proof is there that historically low interest rates will have any nett beneficial effect?

It’s nice to know that there are still some good thinking analytical people in the Tory Party but it’s a pity that they seem to be excluded from positions of influence.

Low interest rates caused this mess, they are not going to solve it. Be radical, put an end to the BoE's control over interest rates.

I am one of the Conservative thrifty that planned and saved for my future and at the age of 66 have seen my retirement income reduce by over 50% so that I must deplete my capital. For what? To bale out the irresponsible, and the feckless and keep a roof over the heads of irresponsible borrowers.
Beware the grey vote Mr Browne, it will really matter to you soon and you Mr Cameron. I haven't heard much from you on the subject.

The Cameroons won't cut spending -- they'll raise taxes.

John's right as usual, these interest rate cuts are murdering small savers like us. I am a patriotic sort, and I am willing to take a little pain in the best interest of the nation as a whole. Saying that, there is no evidence that cutting the rate again so soon is necessary. The Bank of England should keep some powder dry, just in case things get even worse.(A real possibility I think.) Interest rate cuts are a slow and unreliable way of boosting the economy. It's going to be a while before our historically low rates have their desired effects. The impact on our currency of a further decrease would also be negative.
If they do go ahead with a further cut today, I believe it will because they know that there is even worse news in the pipeline. Brown telling "slip" yesterday and a cut today would confirm to me that we are moving from recession to depression.

Interest rates are so low I see no point in a further cut because it makes little difference.
If Cameron is going to either cut spending or raise taxes I wish he had the courage to tell us where those cuts or increases will fall. At the moment because of a lack of courage to do that the party`s whole economic policy just doesn`t add up.

"If Cameron is going to either cut spending or raise taxes I wish he had the courage to tell us where those cuts or increases will fall"

According to Digby Jones the civil service could be run with half as many.

Sounds like a plan to me.

Alan [email protected] . He'll have to do both, as would any other government.
Jack which bits of our policy don't add up? What really doesn't add up are the borrowing figures which will soon as bad as they were during World War 2. But then you're not really interested in that are you?

The Bank of England's remit is wrong and the Governor should resign in protest.

The last few months' interest rate cuts have been the monetary policy equivalent of sticking a firebucket on your head and running around in circles screaming. I intend to use the interest-rate-cut-not-as-bad-as-some-feared bounce to get out of this currency as soon as possible. Anyone want to take bets how many zeros the next Conservative Government will have to lop off our banknotes?

David_at_Home @ 10.27:

"It’s nice to know that there are still some good thinking analytical people in the Tory Party but it’s a pity that they seem to be excluded from positions of influence.

We Davids generally agree but this is perhaps another example, Tim, of our frustration that it doesn't really matter what we say here on ConHome because neither CCHQ nor our MPs are going to heed us.

I accept that George Osborne has been much more credible recently but it is a crying shame that we already have people who could add real clout to our economic message but that they are confined to blogs and seminars when we need them driving the opposition to Brown and replacing his message with a better one that won't drive the country into so much increased debt.

Stuart M at 11.59:

"According to Digby Jones the civil service could be run with half as many".

According to the paper the other day, the most recently quoted cost for all our quangos (which Brown in opposition was going to make a bonfire of) reached £43Bn.

It occurs to me that maybe this whole 'cutting interest rates' policy, is geared NOT to prevent further recession, but it is solely to help mortgage holders! The reasoning being - by some spinner - that Labour have got their 'benefit' client state, and if they woo the mortgage holders (some of who are the irresponsible ones who have taken out mortgages they cannot afford to repay), then they will achieve another client market (so the spinners will reason), ready to vote Labour at the next GE.

It may sound far-fetched, but the GE seems to dominate the thinking of the spinners, 24/7. Well I suppose they have to earn their nice salaries.

So it is 1% and I think we can start talking in terms of economic depression not recession. This is very bad news indeed for those of us who do not indulge in credit and prefer to save up for those little luxuries.
In real terms our savings will no longer keep pace with inflation. Yet another slap in the face for those of us who budget sensible and avoid debt like the curse it is.

The rate cut is wrong.

They should have admitted that rates are currently irrelevant for their purposes.

And they should have put rates UP.

Cutting rates currently had as much impact on the economy as the VAT rate cut. But whereas the VAT cut robbed the taxpayers, the interest rate cuts rob savers.

With interest rates approaching zero, I invite all those who, like me, have saved prudently throughout their working lives and are now living on a pension to join me in this magnificent piece of bloody-mindedness.

(i) Withdraw all savings and let the building societies rely on the wholesale market.

(ii) Re-mortgage the house.

(iii) Drive a carbon-unfriendly vehicle, such as my old Land Rover Defender, to France and blow the lot; buying the most expensive wines, brandies and anything else that will keep for a few years. This will provide a fiscal stimulus to the French economy.

(iv) Cancel all insurance policies, including car insurance. Why shouldn’t my Land Rover join the million-odd un-taxed and un-insured vehicles on the road?

(v) With no savings, make sure that all Council Tax rebates and all other benefits are claimed. Use these to buy more brandy.

(vi) Spend the remainder of your life in a state of permanent inebriation. Good red wine should ensure at least five years at the taxpayer’s expense; besides, you are now entitled to free care.

(vii) Arrange for a demolition expert to wire your remortgaged house with explosives. Over your final bottle of Chateau Petrus, recall Zabriskie Point (which you saw as a young man) and then activate the detonator.

(viii) Be buried on the parish, with the inscription “Labour Governments always end like this”.

My wife (who is 61)and I (nearing 71) have listened to our so called peers',read the newspapers',watched the news and despaired as we have seen our savings tumble about our ears as the weeks pass by.
When will someone have the guts to stand up and demand an election in order for us oldies to vent our spleen and be heard before this unelected incompetent upstart of a PM and his equally incompetent henchmen drag us all down.
We need an election now,before it is too late although this government will undoubtedly pass the buck before they jump ship and then make for the hills taking their precious pensions with them !.

There are six times as many savers as there are borrowers. Never mind the quantum, just thibk of those two categories as individual voters. Goodbye, Mr Brown.

Mr Anslow you are a star performer. You are thinking along the very lines I am contemplating myself. At least withdraw the money from savings and do something useful with it like buying gold, silver, platinum bars for constant value. Stock up with plenty of dry pasta, tinned goods and wine, in case of domestic collapse. Lay in plenty of fags and drugs to use as currency in the UK banana republic. I say banana republic but Gordon has no bananas and even the daily change in the issue of stamps are of poorer quality than in most banana republics.

If we put our minds to it we oldies should be able to wreck complete damage to the shoddy structure that this cretin has completely buggered up.

The problem for you Mr Anslow is that like me you a not a young, black, muslim, homosexual, transvestite, single mother with a disability and a drug habit; so you don't count at all in the Zanulabor party structure, any more than a white farmer does in the other racist/socialist paradise in Africa.

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