While there are probably only a few people in the world who do not believe that Green issues are very high on the political agenda, can anybody explain why Green issues always seem to go hand in hand with increased costs / taxes for the masses? Are the politicians using Green issues as a cover to increase out taxes, or are they justified?

The Green issues seem to be mentioned in the newspapers every single day, and it always seems to equal an increase in payments for the average tax payer.  Surely we should be looking at diverting investment from existing, non-eco friendly materials, products , etc towards the new generation of environmentally friendly industries? It seems that politicians like to hit the tax payers with ever increasing charges under the banner of “Green issues” to increase the overall tax intake, because you can be guaranteed that once the charges are introduced they will go up and up and up.

The sensible approach to Green issues would surely be to either offer incentives to the manufacturers / service providers or fine them for non co-operation.  By introducing new taxes into the current tax system surely the authorities are just putting off the inevitable – the changes which are required in industry? 

There is a growing backlash among tax payers who are furious at the proposed introduction of yet further tax charges and reductions in services, all under the Green banner.  While there were rumours of a general election later this year, that now seems unlikely, but it will be interesting to see how much the politicians respond to voter opinion in their fight for votes.

Despite all of the back slapping and hand shakes about how they have changed the NHS, the UK authorities are under severe pressure to improve the return on investment.  A report out this week has been very critical of the funding arrangements for the NHS and their ultimate use. So what next?

As every tax payer in the UK will be aware, the budget for the NHS seems to grow and grow (if we believe government figures) yet the services seem to be getting worse in many areas.  A recent government sponsored report was released to calls of “we told you so” from many in the industry who have been very critical of changes and movements within the NHS.

There has been a massive increase in management, red tape and an introduction of the competitive internal market within the NHS, over the last few years.  These changes have not assisted with the level of care on the front line, and caused much anger and unease with many workers.  We are also experiencing an increased level of industrial action from the main unions, who are fighting for the future of the NHS.

So what does this mean in the long term?

It now seems inevitable that at some stage, the tax payer will not be able to depend upon the NHS in its current form.  We have for some time seen more and more services farmed out to the private sector, where charges are introduced to what have been free services.  We have also seen a massive growth in the area of private healthcare, and this is sure to continue and grow in the years to come.

Unfortunately, the NHS is not a bottomless pit and at some stage there will need to be a major restructuring of the original format.  Times have changed and costs have spiralled over recent times, reaching levels that have denied many people the treatment which they have “paid for”. 

Private healthcare is the way forward for many who are looking to protect themselves and their loved ones in the future.

After the calm, we are set for another storm as the US initiated credit crunch claims its first UK victim, with the fall of Victoria Mortgages, a UK based sub prime mortgage lender.  Despite having a mortgage book of some £500 million the main banks have withdrawn credit lines and the company has been forced to into administration.  Is this the start of a new phase of economic turbulence?

The longer the UK financial sector appeared to have missed the US credit crunch problems, the more easier a number of investor were breathing.  However, a little after a month after the US market hit problems we are seeing the repercussions on the UK market and Victoria Mortgages will not be the last to suffer. While the company was still viable, the major credit providing banks (Barclays Capital and UBS) withdrew their funding because of concerns about the market overall.  So how will the stock market react?

The stock market reaction as yet has been fairly muted, although it is struggling to make any real headway forward.  Many investors are sitting on the sidelines waiting for the next big sell-off, which many analysts are expecting over the next few weeks.  What will cause this next round of sell offs?

The next round of sell offs could be a mixture of small players being forced into administration (a constant drip feed of negative news to the market) or the collapse (or major deterioration in the health) of one of the majors mortgage lenders.  The next few months are going to be very difficult for worldwide stock markets, and there will be many investors afraid to dip their toe into the water just yet. 

There are difficult times ahead, with mortgage rates set to rise due to the increased cost of inter bank borrowing – all at a time when base rates are high, the economy is slowing and the property market looks on the verge of a possible turning point.  Caution will be the watch word for some time to come.

As the whole financial sector of the UK takes a more cautious approach to funding issues, the personal loans market is set to become another victim of the ongoing financial turmoil.  We have seen signs from the large banks that due to higher funding costs, they will be looking to increase their loan rates over the short term, and only lend to higher quality customers.  So where does this leave those with credit problems?

The loans sector is set to be even more polarised than normal, with much of the funding to the sub prime area of the market as good as stopped over the last couple of weeks.  There are reports of banks cutting down on the number of loans they are processing, and being a little more choosey about who they deal with.  This has major repercussions for some of the more needy of society who may be struggling as we approach the Christmas period.  So what will happen next?

Unfortunately, the current situation will open the door for the money lenders to step into the breech, with their sky high interest rates and tough repayment terms.  Unless there is a major turnaround in the short term, we may be about to see another wave of UK bankruptcies and  other financial troubles, to add to the woes which are already building up on the economy.

As the Bank of England stated this week, the current problems are the result of lending to sub prime customers over the last 10 years, and it is now that this over stretching is set to hit home.  Quite rightly the Bank of England have stated that they will assist in the markets where absolutely necessary, but there is a natural requirement for the over capacity in the system to feed through.  This will have a major impact on some areas of the UK finance sector, but it will cut away much of the “fat” around the edges.

Market forces got us here, and market forces will bring us back down to earth, but it will be a bumpy ride!

As we leave summer behind in the UK, many are now looking towards Christmas, wondering how they will be able to cope, how they will be able to pay for the children’s presents.  Christmas is a very difficult time of the year for many, when emotional blackmail can actually see the majority of us spend more than we had bargained for.  What are the pitfalls to watch out for?

Do not over spend!

While it may seem obvious, this is the major downfall of many people who are already sitting poised with their credit cards to hand and their eye on the next big gift for their loved ones. This is also the time of the year when your credit card will melt, racking up masses of debt which many people will find difficult to pay off in the new year.  This is the time of you when you need to stay focused and keep to your budget – no matter how hard that may be!

The credit card culture in the UK has never been more alive, and with the opportunity to purchase more and more gifts online, this Christmas seems set to be a bumper one for the retail sector.  Historically, even in times of doom and gloom, people have always found money for the Christmas period, and while it may take until next year to pay off that debt, few will be sitting back on their hands.

How can you ensure that you do not fall into the debt trap?

While it is easy to advise staying within your budget, how many of us will actually do that? How difficult is it not to buy that extra little gift for a loved one, what really is the price of that little smile on their faces as they open their gifts on Christmas day.  Unfortunately to many people, Christmas is a very traumatic time, and these are the people who need to ensure they spend within their limits.

Calculate what you can realistically expect to spend, and if you know that you are going to over spend, then why not look at a loan rather than very expensive credit card debt.  A loan is more structured and provided that you arrange a payment plan that you can afford, you will be able to reduce your debt in a controlled manner.  These minimum payment rules on credit cards can often cause major problems!  

While we have all heard about the sub-prime crisis in the US and the problems in the credit market, many are asking how and why a problem with the US economy should effect other areas of the world such as the UK.  While it is a very valid point, there are a number of reasons why it actually happens.

In brief, while the US economy is the largest and most powerful of the economies around the world, in effect there is only really one economy – the worldwide economy.  Individual areas such as the US, China, UK, etc have an impact on the worldwide economy to varying degrees, but such is the integration of multi-national companies, the ease with which you can purchase goods and invest overseas,  that basically all economies are connected in some way.

A drop off in the Chinese economy would impact upon demand for US goods and US services, which would then impact on the US economy where companies may have to cut costs, thereby impacting on the property market as more people find it difficult to find full time employment.  These are the types of connections which are now common place.

The financial sector is one of the purest forms of a worldwide market, with for example mortgages secured in the US probably sold on throughout the world as parts of more complicated financial instruments.  This has been one of the reasons why the credit crunch in the US has actually overlapped into areas such as the UK, etc, where many UK institutions have taken on exposure to the US mortgage market – with potentially billions of pounds at stake!

As worldwide economies become more and more entwined, the chance of knock on effects becomes even greater – something which we are seeing more and more of.   

While the internet has been beneficial in so many areas of life, it has opened us all up to the scammers, the fraudsters and the con artists.  Quite simply, we are listing a summary of the 3 latest scams on the internet, so that you do not fall victim to them.  Be very careful!

The 3 latest scams include :-

The “foreign language course” scam

The is scam which has arisen in the US and has up until now been targeted at the Hispanic community.  Customers are encouraged to sign up to a “free” language course, but when they actually sign up they will soon be subjected to massive handling charges and shipping fees.  They will receive statements and invoices for goods which they never received, or even ordered, and threatening letters demanding payment.  The US authorities currently have a number of names which they are investigating.

The Florida Lottery scam has returned – version 2

While there have been hundreds of lottery scams around for years, we have recently seen the release of an “updated” scam involving the Florida Lottery.  Victims are sent a cheque in the post, with the forged signature of secretary of the Lottery (the person who would actually sign the real cheques) stating that they have won a sweep stake.  All they need to do is bank the cheque, and send a cheque to the scammers to cover government taxes, duty ,etc

The victim then sends off the cheque and banks the “winning” cheque, only to see that it is rejected after a few days because the signature is a fake.  By the time this has happened, the fraudsters has cashed the victims cheque and is not contactable.

The “relative in trouble” scam

This scam has appeared many times in the Far East and is set to hit the western world at some stage very soon.  The fraudsters have been targeting old ladies with children of working age, often by checking the victims details online, locally, etc. 

The victim will receive a phone call from a “police officer” advising them that there son / daughter has been caught committing a criminal offence and the police are looking to prosecute (normally an offence of a sexual nature).  While the relative will hear what sounds like a sobbing person in the background (supposedly their son, daughter, etc) they will be passed on to a lawyer who suggests that a one off payment could prevent further action by the police.

This scam has caught out many people, with money being passed over to the “lawyer” within a short space of time.  Many people have only realised that it was a scam when their son / daughter returned home with no knowledge of the “offence”!

There are many more frauds and scams coming online on a regular basis, and we will be posting more details in due course.

Over the last few months (if not years!) there has been much talk about the European Union (EU), what it does for the UK and whether we could possibly leave and retain our business competitiveness.  These are all very difficult questions to answer, and depending upon who you talk to you will get a large variations of answers. So who is right?

While the UK is constantly battling to retain various decisions making rights, control over our economy and various other areas of society, the truth is that we have already given away much of our independence.  We have seen a raft of strange regulation changes introduced into the UK over the last 10 years, and while not made public knowledge, many of these were as a result of rulings by the EU parliament.  It may be a little unfair to say that all of their decisions are strange, although the press do seem to concentrate on the more obscure moves.

Would the UK economy survive outside of the EU?

The UK is one of the most competitive countries in the world, with a vast import and export industry shipping to all parts of the globe.  While being part of the EU has brought much business and opened up new markets, there is a downside in the billions of pounds in subsidies we pay every year to balance the EU books.  There is also the situation whereby certain markets, such as agriculture, are heavily subsidised by the EU, creating what is in effect a false market which prices often artificially high.

To leave the EU would be a massive decisions for the UK authorities because the EU market is vast and growing every year.  As Europe continues to become closer and closer, with speculation of  a Federal Europe in time, it may be better to be inside that Union rather than outside – where taxes and other restrictions may limit “outside” participation, much like the situation in the US.

While the UK would save billions of pounds a year in payments to the EU budget, the long term implications are a little harder to read.  On balance it may be better to be part of the European Marketing going forward, than to try and push back in at a future date.

While the credit card industry has spent billions of pounds developing and introducing Chip and Pin technology, why have Mastercard now decided to introduce the so called PayPass technology into the UK, for transactions under £10?

The PayPass system operates in a similar way to the Oyster system which is used on the London Underground, whereby the consumer simply passes their card across a reader and the funds are taken from their account – no Pin number, all automatic.  While the system has the potential to have a major impact on reducing queues in a number of retail outlets, there is also the potential for fraud.  

The operators of the system admit that while the system is only available for individual purchases up to £10 in value, there will be no security checks at all until the £50 level has been reached in quick fire accumulated purchases – at this point the user will need to input their PIN number.  While the £10 limit does offer some limitations for fraudulent activity, the £50 security barrier is a little higher than many feel comfortable with.

The system itself is used in 19 other countries across the world, and the technology currently has a client base in the region of 16 million.  Many are now questioning why the industry spent so much money developing Chip and Pin in the UK, only to revert to PayPass for smaller purchases? 

Initial research has shown that it may take some time for the UK consumer to actually accept the system – a consumer who over the last 10 years has been constantly reminded of the need for security!

You will often hear economists mentioning the power of inflation, what it can do and how it actually effects everyday life, but what does it really mean for you?

The inflation figure which you will see quoted on TV and in the financial press is produced by comparing the change in the cost of “a basket of everyday goods”  over a certain period.  The goods which are included in the “basket” are items such as mortgages, televisions, food, drink and general grocery items – basically goods which reflect everyday life, and the popularity of the item.  This “basket” will actually change over time, as some items become less popular and other items are introduced.

The end result is the inflation figure, which gives the average price increase of the “basket” over the period in question – normally twelve months.  If inflation is running at high levels, then it means that the economy may be running out of control and you would normally see the Bank of England intervene in the UK.  The UK government are currently looking to keep inflation in the 2.5% to 3% range which they believe is manageable.

What problems might inflation cause?

If inflation gets out of control as the economy grows at a pace which is probably unsustainable over the longer term, this can result in the so called “boom and bust” scenario.  In effect, as prices rise, there is pressure to increase wages, which then increases costs for business, requiring further price rises – in effect a vicious circle on increases.  At some stage the consumer will not be able to afford the items, as the rise in their income will probably be less that the rise in prices. 

This would then impact upon the profitability of industry in general, which may well push them towards saving costs, with redundancies the probable outcome.  As the number of unemployed increases, then we see spending reduce yet further, putting more pressure on not only industry, but the housing market.  Debts may spiral out of control, we may see an increase in house repossessions and a general collapse in the economy.

During the boom phase of the cycle, we may well see the Bank of England increase interest rates to cool down the situation.  This is a short term pain, long term gain scenario, which is required to bring the economy back under control.  In summary, a little bit of inflation is good, but rampaging inflation can ruin an economy for many years and have devastating effects on the population.