Tuesday, October 14, 2008

Now the banks are bailed out, what about the people?

The Liberal Democrats today called for Government action to shift from bailing out banks towards helping people struggling as a result of the financial crisis.

Liberal Democrat Leader Nick Clegg and Liberal Democrat Shadow Chancellor Vince Cable set out proposals to assist families by avoiding repossessions, tackling the social housing backlog and lowering bills through competitive energy prices.

Nick Clegg said:

"Families are facing a difficult winter. Rising mortgage bills, the fear of unemployment and high heating costs mean that the shockwaves of the financial crisis are felt in households across Britain.

"When the banks were in trouble, they got rescued. Millions of families who are about to find themselves in trouble must be helped too."


Aberavon and Neath Liberal Democrats said...

The Liberal Democrats’ plan to help families:

1. Tax cuts
The Liberal Democrats will cut taxes for people on low and middle incomes. This will be funded by ending upper rate tax relief on pensions, clamping down on tax avoidance, increasing green taxation and trimming overall central public spending. These proposals would not increase
public debt and are not affected by the economic downturn. In fact, this tax cut is now more urgent.

2. Interest rate cuts
Despite a 0.5% cut the UK still has higher rates that the EU (4.5% compared to 3.75%) and dramatically higher rates than the US (1.5%).

The Liberal Democrats pioneered the idea of an independent Bank of England and remain supportive. However, the current situation is fundamentally different from any situation envisaged, and must be treated as a special exception.

With inter-bank lending rates remaining stubbornly high and unemployment set to increase it is clear that we are going to need considerable further interest rate cuts.

3. Repossessions and social housing
The number of home repossessions is rising sharply, and the number of people in serious mortgage arrears more sharply still. Rapid action must be taken to ensure that banks only ever repossess as a last resort by:

· Introducing regulated Mortgage Rescue Schemes to allow families struggling with repayments to sell all or part of the equity in their house and rent it back from a housing association or private firm

· Introducing guidelines for the courts to ensure that they only ever allow repossessions as a last resort. Before a bank can apply to repossess a house, we will require free independent financial advice
to be offered and the bank to prove that all other avenues other than repossession have been fully explored, including renegotiating the terms of the mortgage and offering the chance to enter into a shared equity agreement

· Protecting vulnerable homeowners against rogue doorstep companies by regulating the private ‘sale and leaseback' market as a
financial service through the Financial Services Agency

For those who do lose their homes and for the millions already on social housing waiting lists, councils and housing associations should be allowed to borrow against their assets to buy up unsold properties and land from building companies in order to replenish the social housing
stock where appropriate.

4. Utility Bills
After months of soaring fuel prices millions of people face a winter unable to heat their houses properly. As wholesale fuel prices fall, utility companies must reflect this in lowering their bills. The Liberal Democrats have argued that the £9bn subsidy the energy companies received
from the European Emissions Trading Scheme should lead to real benefits for customers paying their bills this winter.

Price structures must be changed through Ofgem so that people no longer have to pay the highest price for the first tranche of gas or electricity they use. Instead, essential energy would be the cheapest.

5. Network of financial advice centres
Large and growing numbers of people are unable to cope with personal debt from credit cards to mortgages.

The Liberal Democrats will create a trusted, nationwide generic
financial advice service offering face to face advice, supported by a
telephone and web-based service. It would be part-funded through a levy on financial sector companies.

The Citizens Advice Bureau would be used as the basis for these services offering funding for training and employing staff as well as expanding the network. This would all people to have access to impartial information and advice regarding extreme debt cases; issues around benefit and tax credits; ‘health checks’ of a general kind; pension advice particularly in relation to Personal Accounts; and repossessions.

Anonymous said...

I see that the Bevan Foundation Blog (the Social Justice Think Tank for Wales) hasn't bothered commenting on the Financial Situation that the Banks, Building Societies, Local Authorities, Police Authorities et al find themselves in; in addition to the financial hardship it's caused the people of the UK and more specifically the People of Wales.

Their last posting was "Time to move on from ITV" 9th Oct.

Good Ol' fashioned socialism at its best!

G. Lewis
Bridgend Lib Dems