MSE News: Savings rates have barely risen TWO WEEKS after base rate rise - MSE data reveals

ValiantSon

18cc wrote: »

OK if it helps you get closure: NS&I are keeping very quiet AND they are not saying anything

So your comment is still completely pointless. We'd already established that.

ValiantSon

Alexland wrote: »

No but they are both ultimately controlled by government so it's not unreasonable for the taxpayer to judge the lack of consistently in their operational decisions.

Alex

I completely disagree. The MPC is independent of government, although the Bank of England is owned by the crown and the MPC works to the government mandated target inflation rate. The MPC sets rates to try and meet the target inflation rate, but they do this independent of government. NS&I are a retail savings bank that is owned by the crown, but is a non-ministerial government department: it is outside of ministerial control. NS&I is also completely separate from the Bank of England. It is, therefore, unreasonable to talk of a lack of consistency. NS&I's primary function is to attract deposits to help meet the public sector borrowing requirement. The functions of the MPC and NS&I are completely different, and NS&I operate within a market framework, so will make market based decisions to meet the overall objectives of attracting satisfactory levels of deposits.

Your analysis is, I'm afraid, flawed as it tries to reduce all government activity to one function, yet government is multi-faceted ad complex.

Alexland

ValiantSon wrote: »

Your analysis is, I'm afraid, flawed as it tries to reduce all government activity to one function, yet government is multi-faceted ad complex.

Indeed and that's exactly what's wrong with it and causing the lack of consistency.

Alex

ValiantSon

Alexland wrote: »

Indeed and that's exactly what's wrong with it and causing the lack of consistency.

Alex

?

You are arguing that government should be different from what it is, but that is nonsensical. Government is what it is, and could not be the reductivist model that you advance, as society is too complex to allow for that.

It isn't "wrong" that NS&I and the MPC have different functions, and there is no inherent reason why NS&I should slavishly follow the BoE base rate, as in so doing they could move themselves away from the market, and increase the expense to the exchequer, thus defeating the objective of meeting some of the demands of the public sector borrowing requirement.

I'm afraid that your analysis doesn't make sense.

Alexland

ValiantSon wrote: »

Government is what it is, and could not be the reductivist model that you advance, as society is too complex to allow for that.

It's a political point so there is no right or wrong answer but I believe there is a better and more democratic way of running what is a relatively small country for the greater prosperity of the people.

We have been sleepwalking into accepting being ruled by unelected quangos who fail to deliver for which our politicians can then hide from responsibility. I want a government that has both the will and the leavers to do what is necessary and put some stick about.

Alex

2010

Media reports have already stated that nothing will happen until at least the 1st Sept. (if at all)

Some institutions have indicated that they will not even meet to discuss it until 23rd Aug.

This article is about three weeks too early.
But even then do not expect most institutions to play fair.

The BoE rate has been held artificially low for over ten years and government policy is to keep people borrowing cheap money in a fools economy.
And that is why people are paying £300k for a house that is really only worth about £150k.

Cheap money equals high property prices.
The builders are rubbing their hands because whatever crackpot idea the government comes up with regarding housing, the builders raise their prices by the same amount of the crackpot idea.

Why should the builders lose profit because the government interfere in the financing of property with their "help to buy", stamp duty cuts, cheap money for the banks to use, etc.

Thrugelmir

18cc wrote: »

NS&I are keeping very quiet....

They've no requirement to attract deposits.

ValiantSon

Alexland wrote: »

It's a political point so there is no right or wrong answer but I believe there is a better and more democratic way of running what is a relatively small country for the greater prosperity of the people.

We have been sleepwalking into accepting being ruled by unelected quangos who fail to deliver for which our politicians can then hide from responsibility. I want a government that has both the will and the leavers to do what is necessary and put some stick about.

Alex

Whatever your view on the role and function of government within society, it doesn't get away from two salient facts:

1) The system you desire is not the system we have, so negative commentary on the failure of NS&I to follow the BoE base rate is moot.

2) Modern society is complex (and your view that the UK is a, "relatively small country" is highly debatable) and government has to reflect that. While you could try and roll back the state, you would find it incredibly difficult to achieve, without replacing existing institutions with new ones, unless you advocate a complete reversal of the role of the state as established in the twentieth century. The net result of this would be the heralding of a new dark age where people were left with no protection from the might of corporations. I for one shudder at that potential future, although I am by no means a supporter of the current set-up of modern government.

Alexland

ValiantSon wrote: »

The net result of this would be the heralding of a new dark age where people were left with no protection from the might of corporations. I for one shudder at that potential future, although I am by no means a supporter of the current set-up of modern government.

I really don't think the government taking a bit more control and accountability for coordinating the work they have previously handed over to these quangos is going to cause the new dark age. Regardless of what gets agreed on Brexit we live in an increasingly globalised world and there needs to be a national debate about where and how this country should be focusing our resources to get the best outcome for our people.

Alex

ValiantSon

Alexland wrote: »

I really don't think the government taking a bit more control and accountability for coordinating the work they have previously handed over to these quangos is going to cause the new dark age. Regardless of what gets agreed on Brexit we live in an increasingly globalised world and there needs to be a national debate about where and how this country should be focusing our resources to get the best outcome for our people.

Alex

To be fair, you have quoted me selectively. What I actually said, was that the [wholesale] rolling back of the state would herald a new dark age. Regulatory bodies are far from perfect, but they offer some protection, and the welfare state (despite the ravages of the Thatcherite and post-Thatcherite political consesus, which has dominated our politics for 40 years) has provided unheralded protection for the ordinary citizens within our country (I would have died at birth without the NHS, and relative level of wealth - while not in the least down to my own hard work - is partly, and fundamentally, dependent on the role of the state in the post war era, which benefitted my parents' generation (born in the mid to late 1940s, and mine (and my partner's) own generation X). Should quangos be more accountable? Yes. Should they be answerable to the short-termism of the electoral cycle? No, because in that exists the means of manipulation, and the seeds of destruction.

What you have added in your latest post radically changes the impression created in earlier ones, which was for a reductivist and small state agenda on the same lines as Ayn Rand, and her neo-con disciples. What you are now talking about is actually a greater role for the state. I'm not advocating either alternative, but rather pointing out that in the current situation it is a moot point to criticise NS&I for not passing on BoE base rate rises, and secondly that the state is by need multi-faceted and complex. I am no advocate of globalisation, and those who know me would be staggered at the suggestion. I'm all for a debate on democratic reform: I don't believe that we currently live in a democracy, and neither do I believe that our laws and institutions serve the interests of all within our society, but we can't rail against piecemeal issues, but rather we have to seize the bull by the horns and advocate for a new politics. Until that day (and at 40 - and cogniscent of political development over the last couple of millennia - I am not confident I will be witness to it) it serves only to muddy the waters to conflate the actions of two non-ministerial arms of government who have differing objectives.