Letters: Perspectives on banking reform


Save our savings from the City's adrenaline junkies

With the Vickers report recommending ring-fencing of deposits, the race to water down these common-sense reforms will soon commence in earnest.

Already we have heard the self-anointed experts cautioning the Government not to throw out the baby with the bathwater, even as spoiled bankers continue to chuck the toys out of the pram.

Of course it is simple to reel off 99 reasons why the Vickers recommendation could not be done. But future generations will curse impotent governments and cowed public for lacking the nerve to follow up on the all-important one reason why it should be done, and done now. And that reason is simple: to separate the savings of orphans and widows from the casino tables of the City's adrenaline junkies.

This reason was valid in 1933 when recession-ravaged Americans enacted the Glass-Steagall Act, and remains valid today. What the Vickers detractors are saying is that because his idea is complicated to imagine, inconvenient and too difficult to implement, it is better to keep the current system. And brace ourselves for the next crisis, they might as well add.

Sitting proudly at the apex of the food chain, dinosaurs were once too big to fail.

Blessing Museki, London E14

German road to prosperity

Financial prosperity in the UK and to a lesser extent the US has ceased to depend on a robust labour force because most work can be done cheaper and often better abroad. The Anglo-Americans are now focusing on banking and finance, believing that restoring these areas of economic activity are the key to creating jobs – eventually.

However, as the EU starts to divide into Grossdeutchland and the rest, the more balanced economies of the German-speaking world are providing a clear alternative. They mute our finance-driven capitalism by protecting established companies, especially small companies, and provide capital for growth when banks refuse to lend it.

Their factories deal more humanely with automation, counteract employment outsourcing and in particular, make specific efforts to train young people for inclusion in starter jobs.

Dr John Cameron, St Andrews, Fife

A chance to woo customers

It is hard for banks to compete with each other because their services are so similar. However, the move to ring-fencing introduces a real competitive factor. The bank that completes this adaptation first will surely have everybody moving their accounts to it.

Eric V Evans, Dorchester

Iron curtain and ring fence

It took Helmut Kohl one year to reunite East with West Germany, following collapse of the Berlin Wall. It will take all of seven years for Barclays and a few other high street banks to demerge, later refloat, their other halves!

Godfrey H Holmes, Chesterfield, Derbyshire

If people won't spend, tax cuts do no good

To reduce public debt, the Coalition Government has cut expenditure and increased VAT, presumably to raise revenue. In the process, thousands of public sector employees have joined the ranks of the unemployed, who have little to spend on goods that cost more to buy. In return, private enterprise has been expected to step in to create jobs, stimulate growth and end the recession.

The problem is that with millions out of work and many more fearing the same fate, one can hardly expect the private sector to brave deficient consumer confidence and anaemic demand to go on the anticipated investment spree. I am at a loss to understand the economic argument behind such proposals as cutting top income tax rates and pumping out money to revive the British economy. Without restoring consumer confidence and boosting demand, no amount of income tax cut can entice the rich to invest.

Indeed, a temporary regimen of steeply progressive income tax, giving low- and middle-income consumers the means and confidence to spend, alongside measures to persuade credit-shy banks to help private investors, seems more likely to encourage investment and bring in revenue.

Hamid Elyassi, London E14

I have observed the debates on the world's financial and economic crisis with alarm and disbelief. It seems as though policy-makers are still in a pre-Keynesian era.

So far, creating money, or quantitative easing, has had little impact on demand and hence growth, which is not surprising since the "western" world appears to be in a liquidity trap. Instead it has pushed asset prices, and government bond prices in particular, well above long term sustainable levels. The inevitable collapse will have serious consequences.

UK policy seems partly designed to inflate away the problem. Five per cent yearly inflation over five years would reduce the current level of government debt to national income by over 20 per cent. To this extent policy is aimed at destroying ordinary people's savings in order to get the Government out of its predicament.

There is, however, a solution . Money should be "printed" in relatively small amounts, initially something like £20bn and then decreasing, to support projects such as road maintenance, social housing and school building. Growth would be generated, taxes increased and confidence boosted. If governments get too enthusiastic then central bankers should do what they are paid to do and take measures to control inflation rather than, as in the UK, sitting on their hands and letting the real value of people's savings be decimated.

Brian Pizzala, Tunbridge Wells, Kent

The 50p tax rate debate is a red herring. It serves a political purpose as a distraction from successive governments' failure to tackle the much more significant issue of tax evasion and avoidance. The Government's own figures suggest a tax gap of £69bn a year. Other reputable calculations estimate it is at least double that figure.

Half a million companies in this country pay no tax . There are 2.7 million companies in Britain but only 1.9 million tax forms are sent out each year and only 1.2million are returned. From my own experience I would suggest that at least some of this is due to basic inefficiency on the part of HMRC, but the majority is due to that thriving British industry of tax avoidance. It keeps many accountants employed and British tax havens make an even greater contribution to tax avoidance in the global economy.

If the Government would concentrate on measures to prevent big companies and rich individuals avoiding tax our deficit could be greatly reduced. Maybe then we could actually spend money which is morally owed to the British public on maintaining good-quality public services such as the NHS and education.

Sandra Walmsley, Weeting, Norfolk

Of course the 50p tax rate should be abolished. And replaced with one of 60p. Or 80p. Or more.

Susan Alexander, Frampton Cotterell, South Gloucestershire

Risky revolution in policing

MPs' decision to drop collegial oversight of policing in favour of solo US-style elected police commissioners heralds a risky revolution in British policing.

While the Government has rejected peers' amendments to create a more broadly based model of policing oversight, I believe that their most significant concession – to move the first police commissioners' poll to November from May – has managed to make a bad bill worse. As the Electoral Commission has said: "There are almost half as many daylight hours on 15 November compared with early May and there is also the increased likelihood of inclement weather ... Such conditions could discourage some electors from participating and limit campaign by candidates."

Elections in November will also cost £25m more than polls combined with local elections in May.

Public trust and confidence are at the root of successful policing and have been growing over recent years while the police have been overseen by elected local councillors and selected skilled "independent" members of the community.

However, if a police commissioner is elected on a low turnout of perhaps a half, a third or even less of the electorate next November, are we confident that these reforms will have filled the alleged "democratic deficit" in policing which some claim?

In the event of low turnout will an elected extremist, or a commissioner hampered by a minuscule mandate, really build public trust and confidence? The public and the police deserve better.

Baroness Harris of Richmond, House of Lords

Your correspondent (14 September) rightly points out the dangers of allowing freemasonry in our police forces. This danger, of course, extends to the judiciary and other public services.

In the ordinary way if a defendant is known to a witness, or judge, this will disbar the judge from presiding over the case and will affect the value of the witness evidence. The whole problem with freemasonry is its secrecy. If it were an open organisation like the Rotarians or religious faiths, members' impartiality would be open to public scrutiny.

Legislation should make membership of any secret society illegal, or at the very least illegal for those in all branches of the Civil Service, since otherwise their impartiality when dealing with members of the general public must always be suspect.

Peter Parkins, Lancaster

Hospitals' extra earnings

It is indeed likely, as your health editor asserted, that there will be some fierce debate in the House of Lords over the proposals in the Health and Social Care Bill to remove the cap on Foundation Trusts' private earnings ("Royal Marsden seeks wealthy patients as budget cuts bite", 9 September). But much of the debate is based on misunderstandings.

NHS Foundation Trusts (FTs) reported (2010-1011) that an average of 0.91 per cent of their income came from non-NHS sources. Of the 136 FTs reporting, 32 recorded no private income at all; more than three quarters (109) reported non-NHS income at under 1 per cent; and 19 reported non-NHS income of less than £100. The Royal Marsden is an exception. Only one other FT reported non-NHS income over 10 per cent.

This income covers all non-NHS activities such as a joint venture with a social enterprise to provide home nursing care for multiple sclerosis patients, or couples paying for fertility treatment after they have exhausted their NHS entitlement.

The Foundation Trust Network supports the ending of this cap and is confident that it will not change the nature of foundation trusts, which stand at the heart of the NHS. We also welcome the proposal that FTs should demonstrate that their non-NHS activity will benefit NHS patients.

Sue Slipman, Chief executive, Foundation Trust Network, London SW1

Persecuted for being different

We agree completely with Maria Miller, the Minister for Disabled People, when she says "no one should have to suffer bullying because of a disability" (Comment, 12 September).

Changing Faces hears far too often from people with facial and other disfigurements that they have to endure abuse, ostracism and sometimes physical violence – as in the case of Chantelle Richardson, who was punched in the face for looking different and told to "take your mask off", a rare occasion where the assailant was brought to justice.

Where we differ from the minister is on her ideas of what the most effective change mechanisms might be. As well as hoping that disabled people seek public office via the Access to Elected Office scheme, we ask the minister to work with her Department of Health colleagues in recognising that the prevention of disability hate crime is a public health issue.

Harassment and hate crime cause great distress, aggravate mental health issues and even, as in the tragic case of Fiona Pilkington, lead to suicide. In its NHS Outcomes Framework, the Government has already recognised that quality of life for people with long-term conditions must be improved. We urge the Government to charge the soon-to-be-established Health and Wellbeing Boards to take active and strategic action to eradicate disability hate crime in conjunction with local police.

James Partridge, Chief Executive , Changing Faces, London WC1

Foggy ideas about Britain

Ignorance of modern-day Britain, as described in recent letters, is just as widespread on the Continent as in the United States.

I worked in Germany in the 1980s, and the Germans love old films about murder and crime in smog-ridden London. On a flight from Frankfurt to London, a German woman confided in me that she was visiting London for the very first time and asked me earnestly: "But with all that smog, will I actually be able to see anything?"

Caroline St Leger-Davey, Winchester

I was speaking to a young American businessman – a salesman for prestigious British cars – in Stratford upon Avon in the early 1990s. He asked if I had visited the USA. When told I had, and driven while there, he asked if I had had a problem with driving on the "wrong" side of the road.

I explained that I often drove in Europe, and so was familiar with driving on the right.

"Oh," he said, "they drive on the same side as us in Europe? So how does that work when you go there: do you have a special area where you have to pull over and change sides?"

When I explained that we just drove off the ferry and started driving on the right he was amazed.

"Ferry? You mean you have to cross water to get to Europe?"

I got out my atlas to show him, and he was astounded. "So England is an island, right?"

Richard Charnley, Leamington Spa, Warwickshire

The healthy way to fry fish

Ellen Purton (letters, 14 September) claims that deep-fried fish and chips would have been a better illustration of "bad" trans fats than a burger made from beef.

Well, not if the traditional fish supper were fried in good old wholesome beef dripping, as it often used to be before chippies were pressured by clueless health-fascists into using hydrogenated vegetable oils.

Sean Cordell, Manchester

Ellen Purton has whisked her fats. Trans fats are hydrogenated vegetable oils, so do not occur naturally in beef. It is saturated fat in meat and dairy food that is a risk factor for arterial disease.

Natural vegetable oil is composed largely of mono- and poly-unsaturated fats, which have been shown to protect the arteries. So vegetables fried in oil – an integral part of Mediterranean cuisine – are not a problem.

Dr Peter Smith, Halifax, West Yorkshire

In fact the bun in a burger, being carbohydrate, is as damaging as the chips - though the danger of the cooked potatoes is at least modified somewhat by the addition of fat.

The fat and meat are probably the least harmful constituents of the burger - unless it also contains vegetables and pickles, that is!

Sara Neill, Tunbridge Wells, Kent

Why no protest over Magnitsky?

I was puzzled to read to the end of Mary Dejevsky's comment on David Cameron's visit to Moscow and see no mention of Sergei Magnitsky (9 September). He was detained and put to death while acting as the lawyer for William Browder, a US-born British citizen.

Magnitsky was investigating a huge tax fraud involving corrupt officials trying to pressurise Browder's Russian operation. Although a respected lawyer, Magnitsky was arrested and so harshly treated in prison he died in the time-honoured fashion of Stalin's Gulag. Sixty Russian officials have been named in connection with the death of this lawyer working for a London-based firm. The US has imposed a travel ban and asset freeze on them and the Dutch and European Parliaments have voted for similar measures.

There is a private members' bill urging similar action by Britain but so far the FCO has refused to stand with US and EU allies on this case.

Denis MacShane MP (Rotherham, lab), House of Commons

Perilous life

I smoke; I also ride a bicycle, sometimes in heavy traffic; both are life choices. In the event of my being knocked off my bike by someone in a car, I wonder whether or not A Davies (letter, 13 September) feels I should pay for my own health care? If not, why not?

Sue Turner, Nottingham

Shed removals

Half a million pounds to move Roald Dahl's shed? I'll shift anybody's shed for five grand.

Trevor Roberts, Bramford, Suffolk

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