According to an excellent page about the Girobank at Wikipedia the Giro Bank was,”Established by the General Post Office, it was bought by Alliance & Leicester Group, which was subsequently acquired by the Spanish banking group Banco Santander.”

“The organisation chalked up notable firsts. It was the first bank designed with computerised operations in mind; the first bank in Europe to adopt OCR (optical character recognition) technology;[1] the first UK bank to offer free accounts to individuals; and the first bank in Europe to offer telephone banking, beating the much trumpeted First Direct service by several years. It is widely credited for shaking up the UK banking market, forcing competitors to innovate and respond to the needs of the mass market.”

A shame such a good business was sold off then. We had a widely available and successful bank operating at post offices around the country back in the 1960’s which was able to provide banking facilities for ordinary people in convenient locations and by post. If it had continued it might have benefitted the Post Office enough that we could have avoided the policy that caused several thousand post offices having to close. It would seem that it’s success was to prove it’s downfall and our elected scoundrels decided to sell it off in 1989.

We are well aware that we cannot trust any government with our assets. We saw the sell off of British Gas, British Airways, British Rail, Girobank and just about anything else that might have made a profit and benefited us all back in the 1980’s. We saw our unelected Prime Minister selling off our gold reserves some years ago and he certainly never asked me or any other voter if he should. Interestingly this bold move was at a point when the gold market was at something of a low and that same gold would be worth four times as much now and if we were consulted and considered selling it something we should do now it would be worth four times as much now. Apparently it would now be worth an extra 6 or 7 BILLION pounds. I remember the good old days when talking of Millions was pretty hard to grasp. Now we talk about a few billion here and a few billion there as though it is mere pocket money.

Our leader likes to suggest he is a man with his finger on the pulse in financial matters. Hmmm. I have seen some bad financial decisions in my time, and made quite a few myself, but that was a huge financial error that cost every man woman and child in the country £100 each.

Why is it that no government seems able to see that something that makes a profit would benefit the public for year after year, instead of one simple windfall benefit from selling off our assets. The other question is, of course, if they are our assets shouldn’t we be consulted about a possible sale of any of them?

One of the current targets for a potential sale is the Post Office and the reason given is that it is a loss making drain on resources. So why would anyone want to buy it? If some company would decide to buy the Post Office it would surely be done on the basis that they would be able to make a profit in the future.

Why is it that any government would consider themselves incapable of successfully running a business like the Post Office yet they maintain they are capable of running the country? Clearly the intention of selling the Post Office is proof enough that they are incapable of successfully running the coutry. This is not a party issue as the Tories are as eager to admit they are just as incapable of successfully running the Post Office and the country as Labour.

The other suggested sale has been the Dartford Crossing. How anyone could consider selling such a rip-off goldmine like the Dartford crossing is astonishing. It is money for nothing. It was always supposed to become a free crossing once the first tunnel was paid for from the cost of the tolls. It never did become free. They decided to open a second tunnel and delayed the free use because of the cost. Next they added a bridge which again delayed the free use and last year charges were increased. You only have to see the queues of traffic, caused by the toll booths, to see how much money is being made. Astonishing amounts of money being collected from motorists even though we were promised it would be free eventually and this ignores the cost to the country of the people wasting time in queues that are entirely caused by the toll booths.

Incidentally, there was a No10 online petition about the Dartford Crossing asking that the toll booths be removed to ease traffic congestion. The reply from the Prime Ministers office to that petition argued that it was necessary to have the toll booths to smooth traffic flow so there is no need for toll charges at all. Perhaps we can expect to see toll booths for pedestrians in Oxford Street at Xmas time to ease the flow of people during busy periods! It also contained lies about the number of lanes available to traffic, saying that there were fewer lanes available than elsewhere on the M25. (The crossing has 4 lanes heading North and Six lanes heading South) The M25 has mostly 3 lanes which is less than there are at the Dartford Crossing. Presumably they already had plans to sell off the crossing and a profitable company is likely to sell for more money. Incidentally, is it a mere coincidence that there was a 50% increase in the cost of using the tunnel/bridge a year or so ago? 50%? These people expect us to vote for them when they deceive and lie to us?

Anyway, I seem to have rather got off the point there. The idea of a post office based bank is a good one and is something to be applauded. Such a shame it has taken 13 years of government for them to decide to do this and the chances are that either a) Labour are not re-elected so it goes no further or, b) they are re-elected and then conveniently forget all about it.

There is also talk about encouraging children to save at the Post Office. More deja vu there. It used to be that children were encouraged to save and the post office savings account was the first place to start bing able to put a few pennies into a savings account. These days it seems that nobody wants small savers because there is not enough profit in them. Even the Governments own Premium Bonds require you to purchase a minimum of £100 worth.(It’s actually National Savings, did they sell that off too?)

So, yes. This is a very positive step in the right direction. We should all be encouraged to save for the future and if that means your child wants to deposit just £1.00 then they should be able and encouraged to do so. The Post Office would also, apparently, be able to offer 90% mortgages so you may in the future be, visiting your local Post Office and asking,  “Can I have ten first class stamps and a £250,000 mortgage please.”

My worry is that if it takes place and proves to be successful greed will overcome commonsense and it will be sold off. Actually, it just occured to me that this will make the Post Office much easier to privatise with a successful banking operation. The cynic in me wonders if that was the sole purpose of this idea and any benefits to customers are mere coincidence. I wish I were able to have more confidence in the honesty of politicians but it is hard to have any when all they do is spin the truth, mislead the electorate and attempt to damage their opposite numbers. Let us hope that a Post Office Bank has a long and successful future that benefits the taxpayer forever.

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RBS are claiming it is their legal duty to act in the best interests of their shareholders and failing to pay out all these bonus payments might cause some of their staff to leave for better paid jobs. Vince Cable, the Liberal Democrat treasury spokesman was typically on the button when he said we should call their bluff.

It’s a shame the government didn’t let RBS go bust and simply buy the remnants for a penny. New contracts could have been put in place and all these bankers who expect to get million pound bonuses should have been grateful to keep a job at a minimum wage.

If the bank staff want to go then good, clear off. We will be better off without you. There are plenty of more than capable people who would be happy to do as good, if not better, a job at half the salary these people are on and not expect to get bonuses for doing the job they are paid for.

Let’s be honest. If we had dragged anyone off the street to run the banks over recent years they could not have done a worse job than these so called, masters of the universe.

The bonus culture in banking was a very significant cause, if not the main reason, the bankers nearly bankrupted the country. They still don’t get it. They still do not understand that they are lucky to have any job let alone a well paid one. They appear to think they are better than everyone else and should be given massive amounts of money because they are so superior. They are not.

You can argue that top rated footballers merit their massive rewards because they are the exception. They have skills that others could never match. There may be some bankers who have talents that are very rare but the majority of their work could be done by any number of bright people. The laws of supply and demand, the very laws of the market that these investment bankers rely on to make all their money, suggest that these people are seriously overvaluing themselves so they should resign and see what life is really like in the real world.

The Cruel And Heartless World Of Debt Collections

The second article I would draw your attention to was in the Independent and it was all about the debt industry, an industry only slightly removed from these same bankers who expect to get millions of pounds a year for doing a job.

The debt industry is booming as other industries and ordinary people struggle with the financial mess we find ourselves in. Most of the banks spent the last ten years trying to encourage everyone to take on more debt and now people are struggling those bankers, who earned so many bonuses for getting us into debt, are now crying because people are struggling to repay the money owed.

We all have a responsibility to repay our debts. We may well want to do everything we can to repay those debts but there are limits to anyones ability to do so and the people who encouraged us to use our credit cards, take out additional loans and remortgage our homes have a responsibility too.

Some would argue that what the banks did was akin to a publican encouraging an alcoholic to have a drink. It is not so far from the truth. The banks were eager to suggest we should visit them for a financial advice meeting and many people did. Many of those people were then treated to a sales pitch and ended up walking out of the bank having taken on a credit card they didn’t want or a loan they felt they hadn’t needed all thanks to the pressure selling of banks and bonuses paid to sales staff for signing customers up for loans and credit cards.

The banks behaved in a totally irresponsible way towards their customers and, as it turns out, to their shareholders and to the taxpayers. We all have to pay the price of their stupidity and greed and yet they still expect to receive million pound bonuses. They should be thankful they are not hanging from lamp posts after their treasonous behaviour. Fortunately we live in a moderate and fair society but they are taking advantage of our fairness and show no sign of losing their greedy self interested approach to life.

So we are now in a situation where there are many thousands, perhaps millions, of people who are seriously struggling with debts.  The banks did the selling but we took on the loans and the credit cards and having enjoyed a spending spree lasting perhaps ten years we now have to find a way to pay our debts.

If you have the extra money to pay back the debts there is no problem. Pay them off and move on having, hopefully, learned some financial lessons. But, what about all the others who want to pay their debts but simply can’t afford to repay them at the present time.

The whole debt industry depends on making people who cannot afford to repay what they owe pay even more than the debt they already have. Banks, credit card companies, telephone companies and all types of other businesses sell on outstanding debts to debt collecting companies for pennies in the pound.

How can it be in the best interests of  shareholders to sell a debt of perhaps £100 to another company for £30 when the customer wants to repay the full amount of the debt but needs time to spread the cost?

Once the debt has been sold on the debt collections company will demand the full outstanding debt from the original customer and will almost certainly add on additional charges and costs making the situation even more difficult for the customer to resolve.

Problems with one debt lead to difficulties with another and before long the situation is spiralling out of control and it then becomes a fight between different debt collection companies to get their money before anyone else does and before the customer goes bankrupt.

How can this scenario be good for anyone? It doesn’t help anyone except the debt collection agency who manage to successfully collect money for nothing. It isn’t money they were owed for goods or services they provided and it isn’t money they earned. They are the vultures circling the dying man in the desert.

The whole financial industry has become overgrown and sickly. It needs serious pruning right back to it’s roots and then careful training and guidance so it takes shape that is beneficial to society,  to customers and to shareholders. It needs to show some appreciation for the taxpayers who have, unwillingly, become the host this parasitic industry required to enable them to survive.

In the meantime it would be in everyone’s interests if there was more support for individuals who are struggling with debt. Whatever the reasons behind the debt, it helps no-one, except the debt collection agencies, for them to be thrown out of their homes and become dependent on the state for housing and goodness knows what else. What they need is support in a way that allows them time to pay and a way of renegotiating ther debt burden.

Most people who are struggling with their debts do want to repay them in full. Honesty isn’t the problem here. The problem is the practical one of finding a way to pay and when the collections company adds an additional charge of maybe £200 on top of an outstanding debt and then demanding immediate payment, it is not going to help someone, who is already struggling to feed their family, pay their bills.

The financial industry would make more profit from helping struggling customers by renegotiating debts rather then selling debts on to debt collection agensices for pennies in the pound. It makes no sense, it is bad for shareholders.

If the  government can bail out banks with billions of pounds because they were selfish, greedy and stupid, how come the struggling taxpayer is offered no support, no help and no assistance when that could be done for a few million pounds and save the country hundreds of millions in benefits and support in the future?

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It should be obvious to any normal person that if someone has had difficulty in any one month they need even more money the following month to get back on track. Most people have a regular and fairly stable income and most of us would have regular expenses that we balance with our income.

The majority of people do everything they can to avoid these debt problems but the reaction of banks to this difficult situation for their customer is invariably to reduce their available cash by imposing charges which are then taken from the account without any opportunity for the account holder to manage the situation and avoid further financial difficulties.

The situation is then that, invariably, the customer has even less money available the following month to cover their expenses, to pay bills and make a payment to catch up for the previous missed payment. It is hard to see how the banks could see this as helping their customer overcome their difficulties.

This slippery slope is one many of us will have experienced with the result that as each month goes by more and more charges are applied and it gets ever harder to balance the budget and get the account back in credit.

With every additional charge it becomes more and more difficult and it can feel like you will never get straight again.You pump whatever money you can find into the account to get straight but charges just swallow it all up and still you owe more. It doesn’t take too many months like this to find yourself in a financial hole that feels like you can never climb out of.

We all live a fine line between comfortably affording our lifestyle and financial disaster. For many people, it wouldn’t take much to push them over the edge and the Bank’s way of  ‘helping’ their customers who hit a difficult patch seems to be just about the worst possible help you could have. The phrase that comes to mind is, ‘”With friends like that, who needs enemies”.

Everything may seem rosy today but none of us know what is around the corner. Financial circumstances can change and it doesn’t always have to be a big change to have a large impact on your financial situation. If you do not have significant savings to give you a comfort zone and your expenses are broadly in-line with your income, you could be at risk of financial problems if anything changes.

Many of us buy a lottery ticket with the hope that maybe this time we might be lucky and gain from a big win. The reality is that it is far more likely that something will happen which leads you towards financial disaster than it is that you will be one of the big winners on the lottery.

We need to prepare for the worst and by doing so we may avoid it ever happening. Take some simple steps to get your monthly budget in reasonable shape.

1. Build up a readily available cash reserve for any financial emergencies.
2. Avoid using credit cards for long term debt.
3. Make sure there is always enough money in your account to cover any payments and if there is not then at least cancel the direct debits which will lead to charges if the payment fails to clear. Find another way to make the payments.
4. Carry out an analysis of your financial situation which looks at income and expenditure to see just how well off you really are.
5. Prepare a budget that covers all your outgoings and expenses and has at least a little surplus in reserve. If your budget doesn’t balance do what you can to reduce your spending and get your budget back under control.

Remember that you need the money far more than your bank does but if you lose control they will take advantage of your situation and rip you off left, right and centre. They do not care about you. All you are is a cash cow to them and they will make your financial situation far worse. They will increase your financial riskiness and you will find your interest rates on debts rising as the financial industry does everything they can to, apparently,  try to bankrupt you.

Don’t let it happen to you.

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I don’t think people object to the principle of bonuses as a reward for exceptional work but many of these huge bonuses seem to be paid out just for turning up at work and doing the job these people are paid to do.

It is often argued that large bonuses are essential to retain the highly qualified staff these companies need. We are told they are the best people in the world and they need to be rewarded to keep them working in the UK. To which I say, if they are the best people in the world how come we suffered so badly from the financial crisis? It seems they were just following the herd and investing in what everyone else was investing in and they all got burned and took us all down with them for their foolishness.

Are bonuses essential?

Let me tell you a story of success and how bonuses are not always what drives people to great achievements. For those not familiar with Formula1 motor racing let me tell you about Jenson Button.

Jenson has been racing karts and cars for twenty years. In his early career he was  racing on a shoestring budget largely supplied by his father and a few helpful sponsors. He achieved success regardless and was eventually offered a drive for the Williams F1 team where he demonstrated his skill in his first year coming 8th in the world championship.

He moved to a different team but had little success driving a car that wasn’t good enough but he had occasional flashes of brilliance but invariably the car was letting him down and denying him the chance to shine.

Next year he moved to another team where he has stayed ever since. The team was taken over by Honda who put a lot of money into the team over several years but the team struggled to provide a car good enough to win and after a few years Honda decided that because of the recession and the huge costs involved in motor racing they would pull out of F1. The team was put up for sale but no buyers could be found and the team looked like it was finished. Jenson Button could so easily have retired from the sport after ten years of struggle.

When the new year dawned there seemed little prospect of the team surviving. The team principle by now was Ross Brawn, a man with a remarkable success record for building strong teams and achieving success and he was determined to find a way to help the team survive.

Through the winter the team struggled to find the huge amounts of money needed to run a formula one team and eventually they succeeded and the team to be known as BrawnGP appeared out of the ashes of the old team. The new team needed to be run on a shoestring budget compared to previous years and they had to they laid off over two hundred staff and do anything they could to reduce costs.

Contract details are obviously confidentialbut it is rumoured that Jenson Button took a 50% pay cut to help reduce costs and stay with the team for the 2009 season. He could very likely have got a drive for another team and earned a lot more money but he wanted to achieve success for the team that he had worked so hard with for several years.

Now, Jenson Button is Formula1 World Champion. He wasn’t driven by getting big fat bonuses, he was driven by a hunger for success for himself and his team.

This is what commitment means and it isn’t earned by bonus payments. Would Jenson Button wish he had driven for another team and got a million pound bonus for every race he won this year? I don’t think so. In his travels around the globe for the race meetings this year he has paid his own fares and has apparently flown Easyjet more than once.

This is not a story of someone living the rich, flamboyant lifestyle of the rich and famous. This is a story of determination, ability and hard work. It has all paid off for him and he is a worthy champion and a credit to British sport.

So do we need to pay big bonuses to bankers and financiers to achieve success? No, we need to motivate them to want to do well for themselves and for the company they work for. Give people the opportunity to achieve success and be proud of themselves. Bonuses make people more interested in the money than they are in any loyalty to their company.

Congratulations Jenson Button, World Champion and an example to us all.

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* Unpaid item fee reduced to £5 from £38 (maximum £50 per month, reduced from £114 per day)
* Paid referral fee reduced to £15 from £30 (maximum £90 per month)
* Guaranteed card payment fee reduced to £15 from £35 (maximum £90 per month, reduced from £105 per day)
* Maintenance charge reduced to £20 from £28
* Unarranged borrowing rate of interest reduced to 19.24% EAR

Announcing the moves, the new CEO of the UK Retail Bank, Brian Hartzer, said: “This is good news for customers, not least because the fees for unarranged borrowing have been an area of ongoing concern for them. As we look ahead there are many issues to consider, but we thought it was time to move this particular customer concern forward by cutting our charges.”

This is a positive move and it is interesting for several reasons.  Firstly, the banks have been arguing throughout the last few years that the penalty charges they make are fair and represent the true cost of the additional work involved with dealing with them. So, we must assume from this that RBS has somehow found a way to reduce their costs significantly in relation to these items. If that is the case then the banks shareholders should be very concerned that the Bank has previously been so inefficient that it cost so much for a computer to print a letter.

An alternative view is that the bank expects to lose the case currently under appeal to the Law Lords, now known as the supreme court. It has always seemed that these charges were unfair and the banks were profiting from them and it would be a huge disappointment to millions of citizens if somehow the ruling were to say that the OFT could not rule on the fairness of bank charges. We must await the result of the Law Lords decision expected in the autumn but in the meantime this must be seen as a positive step and a recognition by RBS that their charges were too expensive and in most people’s opinion, regardless of the legal opinion, unfair.

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