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MP expenses/what does the credit crunch
mean for us? |
Hi all - Here's the promised second email with everything that isn't about housing development! Before I start, a couple of you have pointed out that I didn't address the Gurkha issue properly. I said it was hypocritical of a party who'd opposed giving Gurkhas more rights to complain that we weren't backdating them before 1997. That, some of you said, was all very well, but it didn't actually address the issue, did it? That's right, and I apologise - I *do* think we should go further and backdate the right of Gurkhas who have fought for Britain to settle here, not just back to 1997 but earlier, and I've contacted the Gurkha campaign to say so. Thank you for pulling me up on this. I'd like to comment on the world credit crunch below, and offer a view on how it might affect us. But first a few… 1. Local events My general policy on these is to advertise anything that I'm told about that might be of general interest and isn't actively hostile - so I've advertised a Conservative event on housing development, CND events criticising Government policy, and events that I'm involved in myself, as well as numerous non-political things, but I'm not selfless enough to advertise a campaign meeting to help evict me as MP. I don't vet according to my personal interest, though (e.g. I don't think I'll be at the rock&bike fest). FRIDAY APRIL 4, 730pm: "HOW DOES EUROPEAN POLITICS WORK?" The Gate Inn, Main Street, Awsworth- quiz your Euro-MP. Glenis Wilmott, Labour MEP for the East Midlands, will be speaking and answering questions about the EU, how the European parliament works, and anything else you'd like to discuss. There's an entrance fee of £5 for this, and it's organised by Broxtowe Northwest Labour, but anyone who's happy to have a friendly discussion (and doesn't mind paying the fiver!) is welcome. I'd originally intended to be there but have been asked to talk to a British Legion branch about treatment of service personnel during and after conflicts, and feel I ought to do that instead. WEDNESDAY APRIL 9, 7pm: "THE CREDIT SYSTEM IN CRISIS - WHAT CAN WE DO?" The controversial ecological economist Brian Davey is the speaker, and he quotes John Maynard Keynes: "Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation. When the capital development of a country becomes a by- product of the activities of a casino, the job is likely to be ill-done." This one is free: it's part of the series of deliberately controversial debates on "The issues of our time" organised by Beeston North Labour Party - previous ones have been on Iraq, asylum and failings of democracy in the Labour Party. I'll be there and will hope to comment from my viewpoint as a former Treasury Select Committee member - and see below. SUNDAY APRIL 20, 1230: Next eat'n'debate: "DOES BRITISH SCIENCE HAVE A FUTURE?" Professor Martyn Poliakoff of Nottingham University, one of Britain's most distinguished chemists (he was awarded the CBE in January for his work), will talk about the position of British science. There have been huge investments in science research in recent years, but are they well-directed, and would your children be advised to take up science as a career? This is another of my fund-raising series, and will have the format that has worked well in the previous events - for £20 (£10 unwaged, £5 for children) you get a delicious meal and as much debate as you'd like. It's likely to be in Beeston - I'll confirm the location next time. To ensure we have a seat reserved for you, please let me know if you hope to come. See http://tinyurl. com/2jn35b for more about Martyn. TUESDAY APRIL 22, 730pm, STANDING IN LINE presented by the Theatre Olympia at Chilwell School. This is a very personal story of the Great War by Lester Simpson, whose great uncle, Albert Scrimshaw, was born in Nottinghamshire in 1885 and killed in the battle of Passendale in 1917. Internationally acclaimed singer and songwriter, Lester Simpson tells the story of his great uncle's war using songs, readings and images. The play is suitable for families, including children aged 12 and over. Tickets are available now from Michael Schillinger at Chilwell School on 9252698 or email office@chilwell. notts.sch. uk Ticket prices are: Adults: £6.50, Students & concessions: £4.50, Family ticket: (2 adults + 2) £20 SATURDAY MAY 10th 2008 ROCK AND BIKE FEST Fun-raising event for disabled bikers, organised by former LibDem councillor Tom. Rear of seven Oaks PH Stanton. Acts: Touch2Much tribute to AC/DC, Toxic Federation, winners of Chaos Battle of Bands 2007 beating of 6000+ other acts across UK at then an average age of 14 plus a Motorhead tribute. Bike show in Afternoon, presentations at 5-5.30pm, bands at night. Entrance £5, further details 07983410209. 2. MP salaries and allowances (again!) ------------ --------- --------- --------- --------- --- I'm exasperated to see yet more stuff about MPs demanding more money, buying kitchens, etc. Just in case you were wondering: • My total expenditure on buying either London property or things to put in the property on expenses since 1997 is zero. I rent a furnished flat. Whenever I cease to be an MP, I'll give it up, having made no money out of it. I've never heard of the John Lewis list before, and wouldn't touch it with a bargepole. • I am strongly opposed to replacing the London allowance with a large rise in MPs' salary. My recommendation to the review board is that Parliament should pay necessary expenses directly, and MPs should simply get their salary, tied to changes in average personal income. If people are doing well, it's fair we should do well too. If people are having a tougher year, we should have a tougher year. • I published my expenses last year here http://groups. yahoo.com/ group/BroxtoweIn fo/message/ 409 To be specific about the London allowance, I pay £1646/month in rent for a 1-bed flatlet (I know that's a crazy rent, but that's Central London), and the rest of the allowance goes on the extra council tax, utilities and food. If anyone would like any more details, please just ask. The flat is in Great Peter Street, SW1 - I do agree with the view that MPs shouldn't need to give the exact house number, as it'd be an invitation to terrorists, and this is the main point currently in dispute with the Information Commissioner, who feels we should disclose this too. 3. The credit crunch Westminster and the media sometimes have an air of unreality, and it seems to me remarkable how little we're debating the implications of the world credit crunch. I was in Prime Ministers' questions this week, and it was all about Harman's protective jacket and Hague's baseball cap. Honestly, who cares? But it does seem to me that the credit crunch is a serious issue and we should be debating it much more. It's a difficult and complex subject, and I think that's why both politicians and the media retreat to the safe ground of trivia, but I'll try to summarise my understanding of the position; • Lending of all kinds depends on trust - you won't lend me money for a house or a factory or anything else if you think I might default on it. • Where trust is plentiful, the markets can operate extremely efficiently (though not always fairly). Any spare cash that anyone puts into savings is steered smoothly to the companies and individuals most eager to use it to invest in their future. • What has gone wrong is that the collapse of risky mortgage deals in the huge American market has knocked a gaping hole in the business model of a number of large financial institutions. Northern Rock was completely dependent on this market, others have been partially dependent on it, and nobody is really sure who is in this and how deep. • Consequently, all lenders are being much more cautious about whom they lend to. Savings that would previously have been swiftly deployed into productive investment are now being held back until a rock-solid borrower comes along. • The effect of this is that businesses wanting to invest will find it more difficult and more expensive, and anyone with a shaky credit record risks having the credit card interest raised and applications for mortgages refused. Some of this isn't necessarily a bad thing. It's generally thought that lenders had become too relaxed, to the point that people were being lured into taking on more than they could afford. But it's clearly going to slow down the economy of every major country unless effective counter-measures are taken. What are the Government and Bank of England doing about it? • The Northern Rock rescue was designed to prevent lender panic - if people lending to banks had felt they had to rush to withdraw their money, it would have made the situation much worse. Note that the guarantee to depositors has in fact cost nothing, since it stopped the panic and the bank has not collapsed. • Like other central banks, the Bank of England is "injecting liqiuidity", which means making more money available to borrow. In particular, Northern Rock has a credit line, secured on their assets, and the risk there is that the assets (mostly mortgages) will decline in value. The upside of adding liquidity is that if more money is available, banks dubious about lending can come out of their shells and ease back into more normal practice. But it's a tricky operation, since if too much money is injected, you get inflation. • The Financial Services Authority is stepping up investigation to banks that depend heavily on this type of market, to try to ensure other "monocultures" like northern rock getting caught. • Interest rates are coming down here as internationally, and people and companies with good credit records will I think find it easier to borrow soon. Frankly it's a tight corner and it needs delicate management - I wouldn't advise taking on big risks at the moment. It's actually nothing to do with the issues that have been debated about Government spending - that can be good or bad, but it's not the problem here. The problem is how to restore international confidence without rekindling inflation. I hope this is a useful summary, but I'd be grateful if you'd let me know if you think so - I'm conscious that I'm duplicating the role of the media in explaining. It is genuinely intended to be non-partisan - any British government would have exactly the same issues, as do all the other major powers. If you'd like me to give factual summaries like this from time to time, I'll be glad to. Best wishes Nick UPDATE |
