Friday, 11 February 2011

Financial 'crackdown' starts

Balancing budgets is the thought on everyone's minds, but it's not all about cuts, cuts, cuts!

A new policy paper called Growing Revenues and Cost Recovery was presented to Reading Borough Council outlining potential increases to revenue, more efficient cost recoveries and better procurement plans.

Cllr Daisy Benson provide some official comment,
 "This is not something any of us might want to consider but we need to find new ways to pay for services which does not involve increasing Council Tax and to go some way toward filling the hole in the Council's budget after years of  mismanagement of our local and national public finances."
HM Courts Service is running a month-long 'blitz' on fine dodgers across the region during February.

Operation 'Crackdown' will see greater coordination between Police and bailiffs to ensure financial rules are enforced more strictly than before.

And HM Revenues & Customs are celebrating a rare successful prosecution against a gang involved in an global VAT fraud conspiracy which spanned eight nations and could have raked in £300m. One man from Farnham Royal was jailed for his role alongside two West Midlands men and six others jailed in December.

HMRC's Gary Lampon commented,
"We all end up paying extra taxes to compensate for the money these criminals steal and with the economic challenges being faced by everyone our focus remains relentless in bringing these conspirators to justice and to reclaim their criminal profits."
Business fraud has rocketed in recent years and may account for over £30bn/year - four times previous estimates. With new markets opening up new opportunities for criminals scams are created - a potential £5bn 'carousel fraud' involving European carbon-trading permits recently resulted in charges against seven men - so authorities must be ever-vigilant.

Local blogger Eve Anna was recently a victim of credit card fraud and she expresses her frustration this caused.

Elsewhere in the news Berkshire credit union Community Savings and Loans has announced expansion plans to counter debt-dependency and the risks posed by the credit culture. The not-for-profit company plans to add new shops in Newbury and Bracknell in addition to those already found in Reading, Maidenhead, Slough and Wokingham.

The company is offering a new fixed-rate 16% APR loan deal targetted at customers who want to reduce credit card debt - provided they cut up their credit cards at the same time!

Berkshire CSL CEO, David Screen, said this would provide help to people who want to avoid loan sharks, and offered a warning to always check the small-print on all credit arrangements, "0% deals... on the internet are designed to trap people into debt that is often later charged at 35% or more."

Meanwhile a new All-Party Parliamentary Group (APPG) on Financial Education for Young People was launched last week with the assistance of two local MPs, Newbury's Richard Benyon and NW Hant's Sir George Young.

Mr Benyon described his long-standing desire for greater 'economic literacy' to help ward off debt-related problems in society. In a veiled dig at the national curriculum he said simple terms like 'APR' should be commonly understood by schoolchildren as this would help with budget-planning later on.

Martin Lewis of MoneySavingExpert.com offered this powerful statement in support:
"It's a national disgrace that in the 20 years since student loans launched we've educated our youth into debt, but never about debt. Now as tuition fees are getting bigger and some will pay commercial rates of interest for them, we simply can't let students take this debt out unless they know how it works."
Opposition politicians, however, decry rising prices and taxes and are attempting to pin blame squarely on the junior partner in the coalition government. Former Reading Mayor, Labour's Cllr Chris Maskell, argues,
"Lib Dems politicians [sic] alone are responsible for what is happening in our country today. They alone handed our country over to the Tories. They alone stand accountable."
Strangely he then undermines his own criticisms to bemoan a lack of gratitude for providing the bail-out - which begs the question, who was responsible for ensuring things didn't go wrong in the first place?

But as the debate rages about how blame for our economic problems should be shared out others are considering potential longer-term policy shifts to prevent a repetition of the boom-and-bust cycle.

Wokingham's Robin Smith is holding a talk on the strategy for economic reform at the School of Economic Science's Henry George Foundation on Friday 11th February at 2.30pm.

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