15 Most Recent Stories From Liberal Democrats : The Economy News Feed

Thu 7th Aug 2008:

Government must protect families facing homelessness - Cable.

Commenting on new Halifax figures which show that house prices are now falling at their fastest rate since 1992, Liberal Democrat Shadow Chancellor, Vince Cable said: "The collapse in house prices is concrete evidence of the strain British families are under. "People are now feeling the painful effects of a triple whammy of massive debts, high fuel costs and rising food prices. "With falling house prices and rising mortgage costs there is a real danger that many people could find themselves in negative equity and under serious threat of repossession. "It is critical that families facing homelessness and unaffordable debts are protected. The Government must ensure repossession is only ever an extreme last resort. "If action is not taken now the housing market may well suffer the same massive crash that we saw under the last Tory Government."

Home auction sale price has plunged by one fifth - Oakeshott.

The average price of homes sold at auction has fallen by almost one fifth since 2007, the Liberal Democrats warned today. Calculations by Liberal Democrat Treasury Spokesperson, Lord (Matthew) Oakeshott found that the average price of residential properties sold at auction in the second quarter of 2008 was down 18.7% from the same quarter of 2007. This is an average fall of £32,000 (from £170,757 to £138,857). Commenting, Lord Oakeshott said: "Auctions are the real deal with real buyers who have to exchange contracts and pay their deposit when the hammer falls. The published house price indices are well behind the market drop. "Deferring or suspending stamp duty with house prices in free fall would be like throwing a bucket of water at the Great Fire of London and risks sucking vulnerable first time buyers into negative equity. "Stamp duty needs serious long-term reform, not a quick fix to save Gordon Brown’s skin."

Wed 6th Aug 2008:

Fresh food inflation more bad news for struggling families - Cable.

Commenting on a new survey from the British Retail Consortium which shows that fresh food inflation has hit double figures, Liberal Democrat Shadow Chancellor, Vince Cable said: "This is more bad news for families who are already struggling to make ends meet. "Soaring food and fuel prices are already having a major impact on growth and this new makes it all the more likely that we are heading for a recession. "Gordon Brown allowed the British economy to get hopelessly out of control and we are no in fit state to weather the storm of higher food and fuel prices. "What Britain needs is real leadership to pull the economy through this downturn."

Tue 5th Aug 2008:

Suspending stamp duty will worsen budget deficit - Cable.

Commenting on reports that the Government may temporarily suspend Stamp Duty, Liberal Democrat Shadow Chancellor, Vince Cable said: "The Government shouldn’t be trying to bribe people into buying houses in a falling market. "With the economy grinding to a halt, we are already likely to see a shortfall in taxation. Suspending stamp duty, even on a temporary basis, will only make this situation worse. "The falls we are seeing in the housing market are painful, but necessary, if homes are to become affordable once more for those not on the property ladder. "Ministers allowed house prices to get hopelessly out of control. They must not now artificially prop up the market for political expediency. "The stamp duty is system is deeply unfair, as the slab structure creates massive distortions in the market, but this needs to be dealt with in a methodical way, not through panic decisions."

Economy on the brink of recession - Cable.

Commenting on today’s ONS announcement that the British economy may grow by only 0.1% in the second quarter, Liberal Democrat Shadow Chancellor, Vince Cable said: "The British economy is now teetering on the brink of recession. "As people tighten their belts in the face of high food, fuel and debt costs, it is inevitable that growth will fall. "We are now facing the consequences of an economy which has been driven on the back of an unsustainable level of debt for several years. "As the credit binge ends, we are now feeling the hangover. "After years of ignoring the instabilities in the economy, Gordon Brown must act now to stop a slowdown becoming a recession."

Darling misled Parliament on Northern Rock loan - Cable.

Commenting on the announcement that the Government is converting £3.4bn of its loan to Northern Rock into ordinary shares, Liberal Democrat Shadow Chancellor, Vince Cable said: "Alistair Darling assured Parliament that taxpayer loans to Northern Rock would be fully secured on mortgage assets. This is clearly not true. "£3.4bn of the Government’s loan to Northern Rock is now being converted into ordinary shares, which rank right at the bottom for repayment. Continuing losses at the bank put this money at great risk. "Other banks have taken the cream of Northern Rock’s mortgages, leaving the rest to curdle. "The scale of the problems at the bank underlines the extreme negligence and irresponsibility of Northern Rock’s previous management, and highlights the scale of the failure of regulation by the FSA. "The Government should now go after the former directors who have managed to shift the bank’s losses on to the taxpayer. Ministers must also go after the auditors who failed to spot glaring problems and mounting bad debt. "The Chancellor and the Government were totally irresponsible for failing to heed my warnings from last October that the bank should be stopped from giving out 125% ‘together mortgages’. These shocking figures show Northern Rock has £6.3bn in unsecured loans. It was clear even then that they could never be repaid in a falling housing market."

Reckless lending has led to Northern Rock losses- Cable.

Commenting on the news that Northern Rock will tomorrow be announcing losses of half a billion pounds since nationalisation, Liberal Democrat Shadow Chancellor Vince Cable said: "These figures confirm the suspicion, held by many of us, that the Government and the regulators were badly deceived by Northern Rock’s former managers when they agreed to bail it out on the basis that it was a good bank with a good loan portfolio. "Some of us suspected at the time, and it is now clear, that reckless lending by the managers, in some cases to well in excess of the value of the property, was going to lead to large numbers of borrowers being unable to sustain their mortgage payments in difficult times. "I am encountering cases of people being repossessed as a result of deeply foolish loans and the bank and the taxpayer who now own Northern Rock are having to absorb the resulting losses. The one redeeming feature of the current situation is that when markets recover, the Government will be able to retrieve some value from the sale of the bank which would not have been the case had they underwritten the losses of a privately run bank, as was their original plan."

Mon 4th Aug 2008:

Credit crunch and rising fuel costs pushing companies to the wall - Cable.

Commenting on the rise in company insolvencies announced today, Liberal Democrat Shadow Chancellor, Vince Cable said: "The effects of the credit crunch and soaring fuel costs are clearly pushing many British businesses to the wall. "This dramatic increase demonstrates the severity of Britain’s debt crisis. "We are now paying the price for an economy which Gordon Brown has allowed to get hopelessly out of control."

Thu 31st Jul 2008:

House price crash threatens millions with negative equity - Cable.

Commenting on today’s Nationwide figures showing that house prices have dropped by 8.1% in the last year, Liberal Democrat Shadow Chancellor, Vince Cable said: "As house prices continue to tumble, more and more families are now facing negative equity. "This correction in house prices is happening because the Government allowed the market to get hopelessly out of control. "The fast rate at which house prices are falling is entirely unprecedented, leading to fears that the housing market could seriously over-correct. "Millions of families are facing a perfect storm of soaring food and fuel prices and spiralling debts. Ministers must take action to ensure that we do not see thousands of families thrown out of their houses, as happened during the Tory recession of the 1990s."

Tue 29th Jul 2008:

Taxpayers' money must not be used to re-inflate house prices - Cable.

Commenting on the publication of Sir James Crosby’s report on the British mortgage market published today, Liberal Democrat Shadow Chancellor, Vince Cable said: "Sir James’ caution towards Government intervention in the housing market is welcome. "It is critical that siren voices in the City don’t seduce ministers into using taxpayers’ money to underwrite new bank lending and re-inflate unsustainable house prices. "It is inevitable that pain will continue to be felt in the mortgage market for some time to come, but the answer is not to put more public money at risk which would only profit the banks. "The Government should concentrate on helping families in danger of repossession. Ministers must allow councils to replenish their housing stock to meet rising demand."

Homeowners sit tight as prices plunge - Cable.

Commenting on today’s announcement that mortgage approvals have fallen by 69% in the last 12 months, Liberal Democrat Shadow Chancellor, Vince Cable said: "For the millions of families struggling with rising bills and massive debts, moving house is something they simply can’t afford to do. "As house prices continue to plunge it is inevitable that only those absolutely desperate will sell their houses while the majority of home owners sit tight. "The reality is that housing in the UK has been massively overvalued for several years. The current price falls are necessary if housing is ever to be affordable again for those not yet on the property ladder. "However, it is crucial the Government acts to ensure that those struggling to meet rising mortgage costs do not find themselves out on the street. "Ministers must act to deal with the rising numbers on council house waiting lists. It is high time councils were allowed to buy up empty new homes to meet this inevitably rising demand."

Thu 24th Jul 2008:

Spiralling food and fuel costs hitting people's pockets - Cable.

Commenting on today’s ONS figures showing that retail sales volumes fell 3.9% between May and June, the largest decrease since records began in 1986, Liberal Democrat Shadow Chancellor, Vince Cable said: "This is yet further evidence that the massive personal debt and spiralling food and fuel prices are now hitting people’s pockets."People and businesses are now paying the price for an economy which Gordon Brown allowed to get dangerously out of control. "The real danger now is that with consumer spending drying up there will be serious job loses in the retail sector. "This dramatic slowdown in consumer spending may yet bring relief to the Bank of England, which has been hamstrung in cutting interest rates as inflation stayed persistently high."

Mon 21st Jul 2008:

Government must set clear priorities for spending - Cable.

Responding to Alistair Darling's admission that the public will not tolerate higher taxes to pay for public services, Liberal Democrat Shadow Chancellor, Vince Cable said: “People have reached a limit in their willingness to pay tax, and subsequently public spending must be restrained. “But ministers must not simply lop off the easiest bits of their spending commitments. Instead, the Government needs to be very clear in setting its priorities for spending.  “This should include taking an axe to public sector bureaucracy, in particular the highly paid managers who occupy lucrative positions in quango land.”

Fri 18th Jul 2008:

Assessment of fiscal policy must be made by independent body - Cable.

Commenting on reports that the Treasury is to rewrite its fiscal rules, Liberal Democrat Shadow Chancellor, Vince Cable said: “The fiscal rules have no credibility when the Government keeps fiddling or changing them. “This step underlines what I and my colleagues have said for years, the assessment of fiscal policy must be made by an independent body in the same way interest rates are determined. “It’s completely lacking credibility for the Treasury to be marking its own exam papers and setting its own questions. What we need is an Ofsted for the economy.”

Assessment of fiscal policy must be made by independent body - Cable.

Commenting on reports that the Treasury is to rewrite its fiscal rules, Liberal Democrat Shadow Chancellor, Vince Cable said: “The fiscal rules have no credibility when the Government keeps fiddling or changing them. “This step underlines what I and my colleagues have said for years, the assessment of fiscal policy must be made by an independent body in the same way interest rates are determined. “It’s completely lacking credibility for the Treasury to be marking its own exam papers and setting its own questions. What we need is an Ofsted for the economy.”

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