www.stonehenge-druids.org
(Blog by Frank)
International visitors to this sight may be less interested, but British visitors will all be deeply familiar with the economic crises as it effects our people today. We are all fearful for our jobs and it is on the news daily that the recession (or is it now a depression?) will be long and deep. We have put billions into the banking sector to ensure that they survive, yet they are not lending ordinary people money as they should, and interest rates on some credit cards have actually gone up!
The Bank of England currently lends money to Banks at 1%
We borrow on credit card at 20% plus.
Clearly, we all need to get out of debt. Dept makes us slaves in good times and victims in bad times, but how to pay back loans quickly when the interest we are being charged is almost extortion?
I have written to the Bank of England, and to my MP today, to ask that the Bank of England be allowed to lend directly to individuals and businesses, allowing all of us to replace our current debts with loans we can afford to repay. This would also put more confidence back into our lives and allow us to become free once more.
To Michael Mates MP
Dear Michael,
Most families, individuals and businesses in England are to some extent in debt or reliant upon flexible credit facilities. Clearly, many are over extended, and with High street banks now reluctant to lend we are struggling to keep afloat.
You have injected reserves and borrowed against future revenue to secure the survival of the Banking sector, but this has not yet had an impact upon ordinary people or small businesses. I know that other measures are being discussed such as a government secured loan scheme.
I am of the opinion however that most people are struggling with Debt because of the very high interest rates being charged against existing loans. If these loans could be replaced by direct lending from The Bank of England, these loans could not only be afforded but repaid very quickly, thus aiding the recovery of the economy greatly.
As an example, anyone in debt to a credit card may be paying upwards of 20% Apr. By borrowing directly from the Bank of England interest could be dropped to say 3% (allowing for administration costs), and the debt repaid over two years as opposed to ten years plus.
Please can you tell me if such a service might be possible, and if currently you are not allowed to do this, which ministers or government officials we would need to persuade as to its necessity and advantage to the nation?
Yours faithfully
If you share my view that this is a good idea and you would rather see future financial assistance go directly to the people rather than via the greedy and untrustworthy banking sector please feel free to write to your MP.
A list of MP’s and an e-mail form can be found at: http://www.parliament.uk/directories/hciolists/alcm.cfm
I’m no expert on banking but as a Druid I do feel angry that the Banks have let us down so badly. As I understand it they lent money to people KNOWING that they could never afford to repay it, and received enormous bonuses for ‘making the sale’. These people made so much money that they bought expensive sports cars and second homes, pushing up the price of houses so that buying a house for ordinary folk became a 25 year task involving two people working full time borrowing up to five times their annual income.
Of course these same people, if they can afford to have children, cannot afford to spend time with them. As a result we have kids running the streets quite literally and in all manner of ways suffering from absence of good parenting.
Greed is clearly no basis on which to run a nation.
If TRUTH and HONOUR, the core principles of Druidry, had been applied by a bank over the last 10 years imagine what would be their position now:
They would not have lent money to people who could not afford it, so they would not be facing financial disaster now and asking the nation to bail them out. They would have never charged stupidly high interest rates, so their customers would feel some loyalty to them, and they themselves would not be in trouble.
Such a bank would now be in a position to buy out its competitors and take on their customers. They would be the most successful bank. Instead, greedy people have practically spent all the money in the world, bringing hardship to millions, and yet they still have their jobs and their sports cars and get upset if they don’t get bonuses!
This all makes it very hard to feel any sympathy.
Why do we have to have dozens of independent banks?
Why shouldn’t the state have an interest in them?
Perhaps we should consider if they deserve some direct state competition.
Why do we not have a National ‘peoples bank of England’, run like the old building societies for the people, and with outlets in every post office?
Out of this global mess we have to look to the future and how we can make lives for our people that are not blighted by financial hardship and lack of opportunity, and for that reason maybe we should be looking very closely at these institutions that we call banks. We should be seeking to put the ‘honour’ back into this service.
If anyone has any comments on this or other ideas I would be very interested in reading them and maybe posting them up here.
Update 9th Feb 2009
I have received a reply from the Bank of England:
“Hello, thank you for your e-mail and the ideas you put forward. However, the bank of England is the central bank of the UK and I am afraid that we do not lend directly to businesses or members of the public, that is the role of the commercial banks.
In addition, we simply do not have the facilities to act as a commercial bank, for example, we do not have a branch network. We act as banker to the government and the commercial banks. Our powers are set out in legislation and so it would require changes in the law for the Bank of England to act as you suggest.
Thank you once again for writing to the Bank.”
Well, it is nice to get a reply, and it is true that I’m no financial expert so my idea might yet be crazy or wide of the mark, but then who are the ‘experts’ in whom we can trust in these times? The branch network problem is easily solved if Post Offices were to facilitate the loans and repayments on behalf of the Bank of England.
The legislation part could be handled also, it just takes a vote in the house.
One of the reasons why I still believe that this plan could work is that it does not increase our national debt, we will be borrowing as one nation (at a low rate) what we already owe at a high rate as borrowed individually. The only losers would be the credit card companies and loan sharks. How sad for them.
Update 11th Feb 2009
I have received advice from My MP’s office suggesting that I contact the head of banking services at the BoE...I will do that and let you know what happens. My next letter, today, was sent to the treasury.
Dear Sirs,
I have an idea which I have posed to both my MP (Michael Mates) and the Bank of England, which I believe would have an active and immediate effect on the economy if applied. I do not know who to approach with this idea, and not being an economic expert, I would like to know if others who are consider that it might be worth consideration. I hope that you may be able to help.
In summary, my idea is that British people are both unwilling and unable to spend to re-inflate the economy simply because we are saddled with too much expensive debt. 35 Billion pounds of future revenue has been pumped into the commercial banks to keep them afloat, yet the effect has been small on consumer confidence for the reason already stated.
I believe that if people with debts currently, taken out at high rates of interest, were to be able to replace these debts at very low rates of interest, not only would they have money to spend but the opportunity to repay the debts much sooner. In such circumstances the economy would recover quickly.
I propose that the Bank of England make loans available via Post Office outlets directly to the people. The nation would in effect be no more in debt than before, but by borrowing collectively rather than as individuals, would see a great improvement in personal circumstances. We would have replaced expensive debt with affordable debt.
The Bank of England advise me that this is beyond their current terms of reference, which would require a political lead and legislative change in order to make this service possible.
Please can you advise me if this idea may have some merits, and if so how I may bring it to the attention of those with the power to take an initiative and make this happen.
Yours faithfully
Frank
Hopefully these people will be experts who are qualified to feed back if the idea has any merit or not, rather than just passing me on to someone else. Open Government is a funny thing, everyone can get a response, but it may not actually listen to you or tell you anything. We shall see.
Update 16th Feb
(Source Yahoo news)
The CBI announced today that its “joblessness forecast upwards to a peak of just over three million in 2010.
Average earnings growth is expected to drop in the first three quarters of this year to a low of 1.1 per cent, as people become increasingly prepared to accept pay freezes and cuts. Wages are only predicted to return to the current level of growth - 2.5 per cent - in the last quarter of 2010.
Businesses, which have been battered by the credit crunch and an increasingly savage recession, have already made painful cutbacks on staff and costs.
The CBI said it anticipates firms will scale back investment throughout the forecast period, with a 9.2 per cent drop in 2009 and a 1.7 per cent fall in 2010.
Consumers worried about losing their jobs are forecast to slash spending as they try and build up their savings.
As a result household spending is predicted to fall 2.7 per cent in 2009, remaining in negative territory in 2010 with a 1.2 contraction.”
The treasury still have not replied to my letter but I remain convinced that people with credit card debts in particular need direct assistance to get lower interest rate loans and that this would benefit the economy.