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Queen's Speech is mixed bag

Ed Bowsher
by Lovemoney Staff Ed Bowsher on 18 November 2009  |  Comments 1 comment

Today's Queen's Speech is a mixed bag. Tougher regulations on credit cards are welcome but don't go far enough. The so-called Fiscal Responsibility Bill is a waste of MPs' time.

Today's Queen's Speech is a mixed bag. I'll run through the main financial points....... 

Credit cards 

I'm all in favour of banning unsolicited credit card cheques. I'm sure these cheques have helped to push some people into debt disaster. So today's plan to ban them is welcome. 

But the government could have done much more on credit cards. I suspect that minimum monthly repayments of 2 or 3% have been just as damaging, so I'd like to see legislation insisting that monthly repayments must be at least 5% of the outstanding debt. 

And why can't ministers crack on and ban negative payment hierarchy? It's monstrous that credit card repayments are normally put towards the cheapest debt first. This should change. 

Fiscal responsibility 

The government plans to introduce a 'Fiscal Responsibility Bill' in which it pledges to halve the government's deficit over the next four years. Obviously the government's debt is unsustainably high and will have to be cut. 

But I really don't see how this bill will help. If the government of the day in 2013 wants to increase the deficit, it can do so. It can just stick a clause in that year's Finance Bill which overturns the legislation that was proposed today. 

The proposed bill is just PR flim-flam and a waste of MPs' and ministers' time. 

Money guidance scheme 

I like the proposed national money guidance service. Widespread financial ignorance is one of the main reasons the financial services industry is able to rip so many people off. Improved financial education should help to level the playing field between the consumer and the big banks. 

Tougher regulation for energy 

The speech included some sound proposals for toughening energy regulation. 

At the moment, the energy industry voluntarily provides rebates to some of the most vulnerable members of society. Going forward, the industry will be legally obliged to provide these rebates and they'll have to cough up more money as well. That's welcome. 

It will become 'absolutely clear' that the energy regulator, Ofgem, will be expected to take carbon emissions and the security of energy supply when it makes its decisions. There will be new incentives to drive 'carbon capture' schemes by energy suppliers. (This is where carbon emitted by power stations is stored and not put into the atmosphere.) This is also welcome. 

And best of all, Ofgem will have increased powers to fight against market exploitation by the industry.

Could have been worse 

Today's speech could have been a lot worse. At least there are some things I agree with. Going forward, I'll be watching how many bills are actually passed before Gordon Brown is forced to call an election in the spring.

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Comments (1)

  • Mike10613
    Love rating 414
    Mike10613 said

    Only one good thing came out of the Queen's speech. You can now safely put a bet on Labour losing the general election. Their policies are a politically correct disaster. They are attempting to rescue the economy by creating more bubbles using quantitative easing. But the money they are supplying to the banks  isn't getting to the consumer. The VAT reduction will soon run out; not that it did any good anyway. The Bank of England and the MPC are clueless. It seems nothing will happen to regulate the energy and banking sectors as they should be and introduce competition. People with savings are getting ripped off by low interest rates because the government is printing money and so the banks aren't making an effort to encourage saving. Many people with credit cards are getting ripped off. My rate was just over 8% and it doubled overnight to around 16%. Another bank I have no history with because I recently opened a fixed rate bond account offered me a card with zero interest on purchases for 1 year; hardly surprising. They will give me a credit limit far lower than the money I have on deposit and try to charge me 4 times as much interest when the 12 months is up! When my savings bond is up they will transfer the money into a rip off low interest instant access account and I'll have the trouble of moving the money yet again.

    The prospect of a Conservative government introducing spending cuts and trying to cut some ties with the EU doesn't inspire me with confidence.

    The Liberal democrats could have a chance but listening to one of their MP's in a parliamentary select committee questioning a DWP minister left me thinking that they couldn't oppose anything. He seemed incapable of asking a straight question, perhaps afraid to offend in case they do have to work with Labour in a hung parliament? Maybe, though, it is just they are both on the same expenses gravy train and don't want to upset the cosy status quo. 

    I listened to the tired old spin about looking at what the sick and disabled can do and not what they can't do so they have an excuse to cut the benefits of the most vulnerable in our society and the minister went unchallenged by Conservative. Liberal democrats and all the other parties. The Labour party have a few months left now to rescue their election hopes and they throw petrol on the fire. No doubt Mandy is still telling them that "spin" works! We have heard it all before and we have sky high council tax bills, no competition in the energy markets with energy companies headed for obscene profits again; which of course will get all the executives big bonuses; again.

    Meanwhile, employment and stress related illness rises and Jobcentreplus and the DWP pile more stress on to the most vulnerable with more changes to the benefit system. Of course they put advertisements on television virtually accusing all job seekers of sitting in the pub drinking or watching day time television and having no will to get a job. JSA is of course a fortune and with all the benefit fraud on top they are sitting pretty and must be stopped. Report you neighbour if you see him going out early in the morning he may be working and claiming benefits. Better still, report you MP when he opens his mouth he may not be working and claiming a salary and expenses. When will we still advertisements on television telling us MP's face big fines for fraudulent expenses claims? When will top bankers have their expenses and bonuses examined properly by independent auditors? 

    Report on 20 November 2009  |  Love thisLove  0 loves

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