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Is there any wonder some of our young don’t want to work.


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Some more plans from George:

 

http://www.independent.co.uk/news/uk/politics/osbornes-latest-plan-ask-britains-savers-for-money-7818038.html

 

Basically he wants our pensions and savings. He wants to borrow for this ;)

 

Fair play to him for not going down the PFI route......yet

 

I thought that’s what national savings were for, if they want more money they should offer higher interest rates and people will move their money away from banks.:)

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Some more plans from George:

 

http://www.independent.co.uk/news/uk/politics/osbornes-latest-plan-ask-britains-savers-for-money-7818038.html

 

Basically he wants our pensions and savings. He wants to borrow for this ;)

 

Fair play to him for not going down the PFI route......yet

 

Tax free government bonds for savers that are in addition to the ISAs, assuming they offer a competitive rate I'd use them.

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I thought that’s what national savings were for, if they want more money they should offer higher interest rates and people will move their money away from banks.:)

 

You'd think so wouldn't you. NS&I isn't offering many products now and nothing inflation linked.

 

I'm wondering if these growth bonds will have longer terms than usual NS&I products. If they were inflation linked I'd seriously consider them.

 

The point about the banks is interesting. The banks don't like NS&I at times like these and they lobby the government quite hard about the products on offer. They know what will happen if NS&I put some really attractive products on offer. Tough one for the government because some banks are state owned and it wouldn't make sense to damage them. On the other hand the Treasury has a huge pool of potential money it just can't get at without damaging the banks.

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Not really, but it achieves the same effect.

 

They aren't proposing infrastructure projects on the same scale as I1L2T3 though, so presumably he'd need to make additional arrangements to borrow much more...

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Not really, but it achieves the same effect.

 

They aren't proposing infrastructure projects on the same scale as I1L2T3 though, so presumably he'd need to make additional arrangements to borrow much more...

 

Yes it is borrowing. National debt most definitiely includes the NS&I liabilities.

 

I do take the point about scale and you're right NS&I doesn't really scale up to what we need.

 

We need on board:

1. Individuals. The crux of Osbornes plan. They need to be offered something attractive with an element of index linking. These bonds can't be too long dated though or else people will be put off. Whether NS&I would offer these I don't know.

2. Domestic institutional investors. Banks, pension funds, companies etc... They need to be attracted by offering something better than the current (all but locked-in) very low gilt yields and these are the investors that need to be brought on board with serious sums invested with long dates. The more investment from domestic sources the better. In November 2011 Osborne was talking about sourcing £48bn in this way.

3. International institutions and individuals. A necessary evil but the less borrowing from this source the better.

 

In essence I don't disagree with what Osborne is planning. I think the scale is perhaps too small. And although it isn't exactly broadcast news he clearly sees the need for infrastructure-fuelled growth. It's just a shame that the austerity media agenda is getting in the way. Either that or he's saving up for a blitz of announcements.

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