Banking bureaucracy is suffocating


Reports I am getting from business and individuals in my constituency and from the wider country tell me that banks are reluctant to lend, require huge amounts of paperwork, and impose very high charges if they do decide they will provide some finance. Recent figures show there is still a lending problem in our economy. A new generation of potential homeowners cannot get mortgages, and many businesses struggle for loans to help them grow.

Anti Money laundering is  an absurd paperchase. Most banks still seem to think that having an authenticated copy of your passport and a utility bill will mean the money they are receiving is not laundered. It is completely ridiculous. Money launderers have passports and homes with utility bills. If they do not, they would happily forge or steal the necessary documents, as one more offence would not make a great deal of difference to their criminal record  should they get caught. The whole thing has become like the sale of indulgences against sin, with the victim having to pay for a lawyer to countersign the documents to prove who he or she  is, even though the Bank should know exactly who  he or she  is.

The Money Laundering Regulations 2007 do indeed ask the business to “verify the customers identity on the basis of documents, data or information obtained from a reliable and independent source”. Many businsses do this to death, requiring expensive signed copies of documents from people they know well. It also requires business to “obtain information on the purpose and intended nature of the business relationship”, which few seem to bother about and which does  not lead to all sorts of standardised box tickings,.

Banks used to regard property as a good asset for security. Now they seem to dislike property, saying they have too many loans against it already. If they do go ahead, the new system of property transfer has been made cumbersome and much more expensive, with endless enquiries concerning energy efficiency, appliances in the property, past conformity with planning and Building Regulations, Stamp Duty rules and the rest.

Anyone seeking to gain permission for property improvement or alteration now faces a much longer and more expensive process than a few years ago. Bat, newt and other surveys can delay works by more than a year.

It is no wonder it is difficult getting growth back again in our economy. There is so much regulation that is either of dubious value, or over the top in the way it is implemented, that it is easier just to say when faced with the idea of a new project “I cannot be bothered”. So many public bodies, and some advisers in the private sector, now see any glimmer of enterprise as an opportunity to demand more fees and charges before allowing people to go ahead.


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  1. Mark W
    Posted May 7, 2013 at 5:30 am | Permalink

    This is all so true. Myself and colleagues have overcome the annoyance of bank lending for short term cash flow periods for capital investment by just providing the finance ourselves from savings. The bank is generally falling over itself to lend but the requirements and endless box ticking is a nuisance.

    Last time I moved house the estate agent, who I have known for years, had to have proof of ID from me.

    But far worse than these is the illusion of safety provided by the CRB. The amount of people I know of business and voluntary organisations that are frustratingly held up with staff obtaining this utterly pointless document is sad. Lets face it I’m sure that any of the names in entertainment from Jimmy Saville onwards would all have passed and recieved a CRB. To any thinking person that makes this document worse than useless. It is cumbersome, expense and worst of all misleading. Scrap it.

    It is these things that make me conclude that the FSA over regulated banks leading up to the boom. And over regulated the wrong, thoughtless box ticking way.

    • Jerry
      Posted May 7, 2013 at 8:44 am | Permalink

      @Mark W: “But far worse than these is the illusion of safety provided by the CRB.

      Indeed, like all knee-jerk legislation, the CRB check is one of the most useless, worse than the Tories “Dangerous Dogs Act” of 1991. As you say Mark, someone like Savile would have passed a CRB and quite possibly did.

      People need to be educated about spotting the signs, of either possible or actual abuse, not brain-washed and thus think that they can ‘forget’ about these risks because the CRB computer database says the person is “safe”, in sort the CRB checks can actually make children and vulnerable adults less safe because otherwise weary people start taking their eyes off the ball.

      • Anthem
        Posted May 7, 2013 at 9:12 am | Permalink

        Not sure how this got onto CRB but it’s worth a comment.

        The CRB is not useless if you remember why it exists i.e. to shift responsibility in this ever-litigious society that we live in today.

        If you, as government, take it upon yourself to be responsible for most of the health care in the country which, by its very nature, means day-to-day contact with “vulnerable people” then you want to make sure that you can leave with a clean pair of hands if ever the messy stuff hits the fan.

        If you’ve checked the criminal record of every one of your employees prior to giving them a job then you can quite justly absolve yourself of any liability if one of them turns out to be an axe-wielding maniac, a paedophile or a member of the Green party.

        • Jerry
          Posted May 7, 2013 at 5:57 pm | Permalink

          @Anthem: “The CRB is not useless if you remember why it exists i.e. to shift responsibility in this ever-litigious society that we live in today.

          Totally correct, and that is what makes it bad law!

          All the CRB check does is pass the buck, away from the front line to the CRB database and those who staff it, this law was always more about (the then Labour government) being seen to do something rather than actually detect wrong doing. Yes it stops the likes of (some well known offenders-ed) but so would have a working police PNC check [1] but a pervert or abuser who has not been discovered is very unlikely to be on either the CRB or PNC databases, thus they will get clearance to put kids and others at risk – even their otherwise innocent fellow front-line care staff.

          (words left out-ed)

          • Jerry
            Posted May 8, 2013 at 6:33 am | Permalink

            @re censorship: Oh right John, so now we can not mention historic and proven case law, perhaps you should also remove all mention of Mr Savile (perhaps we should refer to him just as “A very well know, dead, DJ from Yorkshire” from now on…) or is that name OK because he is dead? Would someone serving life for two child murders actually litigate, just because someone dared to mention their name and their crimes.

            On the chance that this was more a problem of time, I think I would have preferred my comment to have been ‘parked’ until you had time (to check basic historical facts) rather than much of the comment to be decimated

            I doubt much of this -yes- reactionary rant will see the light of day once I press Send, but at least our host can read and reflect even if others can’t.

        • Mark W
          Posted May 7, 2013 at 6:18 pm | Permalink

          The CRB is a hinderence to business. Your points are good

      • Mark W
        Posted May 7, 2013 at 9:56 am | Permalink

        Totally correct Jerry.

        These useless bits of paper do provide this safety illusion and allow people to have an excuse to switch off. I have always thought the CRB was brought in to silence the critics in the Soham murders and to make the political class look like they were doing something. Anyone who dared to critise would be hit with questions like, “so you don’t want to check if peados are working with kids?”

        When the Jeremy Kyle class are sneering in your face it’s difficult to make a case against questions of this nature. I have no doubt that anyone who dared to say bank regulation was too much in the run up to crisis would have some upstart with a socialist handbook sneering like a thoughtless idiot. Box ticking is a failure by nature as it can’t be specifically detailed although is unecessarily cumbersome.

        Spotting signs of any abuse of any kind in any industry is a skill that is developed over time, although I’ve had a total newby, in their teens at the time, highlight something that needed investigating. (not sexual abuse or anthing like it I hasten to add).

        Box ticking can encourage a kind of laziness over this approach and a resentment at the form filling.

        Reply This government has cut the numbers who need to go through a CRB check. When I debated this with Labour on its introduction I asked the simple question, what proportion of sex abusers are first time offenders? The answer given was one half, so it shows the CRB check is far from perfect to keep our children safe.

        • Mark W
          Posted May 7, 2013 at 6:08 pm | Permalink

          In fairness I should have mentioned that JR. This government has trimmed it and started a move towards a national scheme as opposed to county by county.

      • Disaffected
        Posted May 7, 2013 at 2:39 pm | Permalink

        JR has previously blogged about how the FSA is presenting the EU directives from a straight jacket. Once more, therein lies the problem the EU. The UK should not be wasting money in legal action trying to prevent the next phase of the EU taxing the UK through our banks to help shore up the ruinous Euro. The UK has done too much already through loans to Ireland, depositors in Cyprus and helping through the IMF, despite assurances we would not by Cameron. Germany has been the major benefactor from the Euro now it is time for them to pay up- not the UK- Germany. Now even Clegg should understand the benefits of leaving the EU and the Euro.

        I hope journalists will be scrutinising what Clegg really stands for: His view on the British culture per Wikipedia quote, he wanted the UK in the Euro and tried through scaremongering to achieve his aim, pro EU despite posters and placards for a referendum before the last election, tuition fees- why do EU student still get free tuition fees in the UK when UK students are indebted for life, why can’t UK students be afforded the same as he promised before the last election, wind farms (including asking him about (perosnal allegation removed-ed)), his view on faith schools discrimination in his manifesto and what he chose to do in contrast for his son, clean up parliament promise and right to recall- then we have him and his party pretending they knew nothing about all the recent crimes, investigations and wrong doings. After all, Ed Davey called for such scrutiny of policies. Let us see what the Lib Dems actually stand for- that is for more than 3 minutes before they change their mind.

      • margaret brandreth-j
        Posted May 7, 2013 at 6:49 pm | Permalink

        Agreed , the CRB check is useless beaurocracy. At one time I had 13 in my possession , had to pay for 4 and didn’t even get any work from those agencies.

        • Deborah
          Posted May 8, 2013 at 7:05 am | Permalink

          As commented above, the CRB check is not useless, it is positively dangerous. When the regs came in the majority of parents stopped paying attention to who was looking after their children.

    • uanime5
      Posted May 7, 2013 at 1:47 pm | Permalink

      The advantage of the CRB check is that it prevents people lying about their criminal convictions. It also protects people from repeat offenders.

      • Mark
        Posted May 7, 2013 at 4:37 pm | Permalink

        Provided they don’t adopt a different identity of course…

      • Tad Davison
        Posted May 7, 2013 at 4:49 pm | Permalink

        There’s a sure-fire way to stop recidivism (re-offending) but the lefties and the liberals would fight tooth and nail to stop us using it. Only by getting out of the EU can we hope to change it for the better, and give criminals the just desserts everyone else is calling for, but are denied. CRB checks might then fall into disuse, and save us all a lot of inconvenience, but I wouldn’t expect a leftie to understand simple logic like that.

        • Bazman
          Posted May 7, 2013 at 5:51 pm | Permalink

          Is this supposed to mean bring back hanging or some other punishment for drug offences?

          • Electro-Kevin
            Posted May 8, 2013 at 8:21 am | Permalink

            Bazman – CRB checks, airport scanners, bank checks, CCTV surveilance… proposed I.D. cards…

            Imposed inefficiently on the many so as not to offend the few.

            “Is this supposed to mean bring back hanging for drugs offences…”

            There you go again. Tarring those who disagree with you as extremist.

        • Jerry
          Posted May 7, 2013 at 6:21 pm | Permalink

          @Tad Davison: Sorry but that is nothing but the usual, unhelpful, string ’em up style comment so typical of those who are straying to far to the right – even such a regime does work what about those (of which there has been many) who are later found to have been innocent.

          In any case no criminal, least of all sex offenders, commit their crimes thinking that they will get caught…

      • Mark W
        Posted May 7, 2013 at 6:15 pm | Permalink

        Uni. The CRB does not protect against repeat offenders. It offers a flimsy protection exclusively against those caught at least once. At present there is no guarantee that a repeat offender will ever be caught.

        I have employed two (and still do one) people who have spent over a year in prison. One up front the other kept it private. There crimes were punished and spent. From someone who was lecturing about prison conditions only last week I’m rather shocked you’d then want to place a bar to their future lives.

        A youthful Delboy is not a peado and this CRB nonsense puts barriers in the way of people who have changed their lives.

      • Edward2
        Posted May 7, 2013 at 8:44 pm | Permalink

        Unfortunately Uni, 50% of offenders are first time offenders, which makes the CRB check a complete waste of time for those.
        Worse than that it makes for a complacent feeling of false safety.
        And its not yet fully joined up nationwide, so if you apply for a job in Sussex you cannot use your existing check from Lancashire which results in people having to get multiple checks done and long delays before they can start work in a new job.

    • margaret brandreth-j
      Posted May 7, 2013 at 7:43 pm | Permalink

      apologies , I clicked before realising I had my bureau’s and beau’s mixed up.

  2. Kevin R. Lohse
    Posted May 7, 2013 at 5:31 am | Permalink

    There is one over-riding reason for this stultifying, sclerotic state of affairs – government intervention preventing market forces from working. We have Gordon Brown to thank for the situation, and Cameron’s preference for agreeable company over talent and competence for it’s continuation. Quite how the government expects banks to lend freely while insisting on banks increasing their capital base is beyond my sketchy knowledge of financial matters to comprehend.

    • lifelogic
      Posted May 7, 2013 at 8:13 am | Permalink

      Indeed it is a government created, capital requirements problem (and lack of confidence in government/the economy) at heart, both at UK and EU levels as usual.

    • Mark W
      Posted May 7, 2013 at 11:24 am | Permalink

      I’ve never understood the instructions to banks:

      1) Lend more money to business (Technically a risk of some degree)!
      2) Raise your capital base!

      Well, which?

      • zorro
        Posted May 7, 2013 at 6:25 pm | Permalink

        Incompetence or planned? If planned, for what purpose and whose benefit?


  3. lifelogic
    Posted May 7, 2013 at 5:37 am | Permalink

    Indeed it is exactly as you say.

    Bank also take so long to make decisions that the deals are often lost before the loan finally comes through. Even borrowing £1M against a property worth £3M at sensible rates can be difficult if you a self employed and your income varies. Banks are just looking for reasons not to lend.

    Stamp duty and CGT are also far too high, for the benefit of the economy, they discourages activity and transactions.

    If they won’t lend easily and cheaply to wealthy people, who have a good track record and plenty of security what chance have the others got? It will be a slow recovery. They need to change the capital and other rules to encourage them to lend to business. It should have been done by Cameron in 2010.

    Every time I have to dig out another certified copy passport and utility bill less than 3 months old it stops me and others doing productive work and drives me mad.

  4. Julian
    Posted May 7, 2013 at 5:42 am | Permalink

    I started a company a couple of months ago. I spent ten minutes on the Companies House web site and and hour later I received all the details of my incorporated company by email.

    Setting up a bank account was a different matter. I called a call centre who took all my details and arranged an interview at a branch three weeks later. Apart from providing the identification you mention, the rest of the interview consisted of me resisting attempts to sell me additional services. It then took a couple more weeks to set up the account, with not a few packages of information, chequebook, online sign in verification etc. in the post.

    • alan jutson
      Posted May 7, 2013 at 8:16 am | Permalink


      Best of luck with your venture.

      But just wait until you have to register for VAT.
      or have to come to terms with the Inland Revenue taxation system.

      I can only suggest you get a good local Accountant to advise you on some of the above.

      • Ted Greenhalgh
        Posted May 7, 2013 at 4:28 pm | Permalink

        Completing VAT returns is straight forward provided that one keeps accurate accounts. The problem with VAT is the level at which it is applied which must stifle demand the last thing I would have thought we needed.

        • alan jutson
          Posted May 7, 2013 at 5:15 pm | Permalink


          Not quite so simple. different rates for different products, some services are exempt, some are not if you run a bisiness that involves all of the above it is rather more complicated.

          Having run a business for 20 odd years which was Vat registered.
          In every quarter I got a circular to say something had changed, that new rates apply this, new rates for that.

          Not quite as easy as you suggest, even if you do keep good clean accounts.

  5. Nina Andreeva
    Posted May 7, 2013 at 5:59 am | Permalink

    Perhaps a “mortgage famine” is a good thing? Is it actually a prudent thing to buy a house with a mortgage in the North where property values,if they are not actually declining are static? My other half is currently looking for a new job, however one of the put offs of leaving Bristol (houses up 3.8% over a year according Zoopla) and returning back to the North East is the collapse in housing prices there. So apart from their rip off “arrangement fees” and variable rates that are way out of line with base rate. The banks, apart from picking up a load new future bad loans, are actually protecting their customers for once in stopping them from going underwater with a house that will soon develop negative equity.

    • zorro
      Posted May 7, 2013 at 6:24 pm | Permalink

      Probably better to rent out the property in Bristol and rent a (cheaper) property in Newcastle until the overall picture becomes clearer?


  6. Nina Andreeva
    Posted May 7, 2013 at 6:11 am | Permalink

    I would have also thought a bigger obstacle to buying a house is not getting a loan but having to pay stamp duty. Its nice to know that the price of a small car is effectively being paid to tide over a welfare lifer for the next month

    • lifelogic
      Posted May 7, 2013 at 8:15 am | Permalink

      Stamp duty and CGT level are a huge deterrent, they are far too high – better to invest in other ways in other countries probably.

    • Electro-Kevin
      Posted May 7, 2013 at 8:57 am | Permalink

      Yes. An extortionate amount of tax on the FULL amount for a bog standard home. In Greater London £8k for a lousy flat.

      • lifelogic
        Posted May 7, 2013 at 10:05 am | Permalink

        Indeed moving from a small four bed house to another, even in outer London might, cost you £100K of dead money in stamp duty, agents fee, legals, land reg fees ……. far cheaper to build an extension perhaps.

    • Mark W
      Posted May 7, 2013 at 11:40 am | Permalink

      It’s funny how you don’t realise the obvious until its pointed our. Kelvin Mackenzie illustrated on the Daily politics last week why stamp duty is essentially a London and southern only tax. He’s got a point with high property prices.

      • lifelogic
        Posted May 7, 2013 at 8:27 pm | Permalink

        Indeed it is mainly yet another misguided subsidy from London to the North, Wales and the like.

    • Bazman
      Posted May 7, 2013 at 5:56 pm | Permalink

      As millionaires have been give a 40 k tax cut they can afford it.

      • Mark W
        Posted May 7, 2013 at 10:34 pm | Permalink

        Nonsense. You’re confusing millionaire with £1m income (taxed at £80k a year higher than under labour after the bust and soon to be just £40k higher).

        If you stopped looking at that socialist handbook you’d pay better attention to reality….

      • lifelogic
        Posted May 8, 2013 at 5:07 am | Permalink

        A millionaire is someone with wealth of £1M+ they have not been given a £40K tax cut. Indeed they may not even have much taxable income just a Picasso or a small house in London.

        People with £1M PA of income may have been and rightly so.

        • Bazman
          Posted May 8, 2013 at 5:09 pm | Permalink

          Quite rightly so that at the other end of the scale they have been made worse off to pay for it? How do you square that one off?

          • lifelogic
            Posted May 8, 2013 at 9:16 pm | Permalink

            Nonsense, the poor are not paying for it. High tax rates raise less money and harm the economy and the poor especially. The poor are worse off with high rates for the rich, it drives them, industry and jobs away.

          • Edward2
            Posted May 8, 2013 at 10:02 pm | Permalink

            The top 1% pay nearly 30% of all income tax and capital gains tax.
            The idea of reductions in headline rates was to increase overall revenues.
            You should support this move Baz, as it means the rich paying even more rather than less.
            And remember the rate was lower under the labour who only put it up in the last month of their 13 years of misrule as a hurdle for any incoming administration.

          • Bazman
            Posted May 9, 2013 at 5:39 pm | Permalink

            Maybe you could explain why the Scandinavian countries with high tax rates enjoy such high living standards?

      • Electro-Kevin
        Posted May 8, 2013 at 8:36 am | Permalink

        Bazman – Stamp duty at the full rate applies to ordinary workers on ordinary wages on the FULL amount for houses over 250k- not just over the stamp duty threshold.

        It is a rip off.

        My friend is paying 40% tax on his wages – is expected to pay £8k on the modest semi he is eyeing and yet has just been told by his bank that he does not earn enough to qualify for a mortgage on it. He is on nearly double the regional wage – an area of high unemployment (not London and nor within range of it.) Yet is forced to live far from his workplace unless he wishes to live in a small flat.

        Certainly not a millionaire.

        • Electro-Kevin
          Posted May 8, 2013 at 8:38 am | Permalink

          Correction – Not the full rate but a higher rate.

          £8k plus the percentage based estate agent’s charges are a real disincentive.

        • Bazman
          Posted May 8, 2013 at 5:14 pm | Permalink

          In most cases it is part of they cost of the house and as multi millionaires pay less tax as a percentage than the rest of us it is a just tax that they can easily pay or not move house if they do not want to pay. Could also move to a cheaper property. Are we superposed to be sympathetic to their flight when many are being tightened up for having an extra room in a council house? Ram it.

  7. Andyvan
    Posted May 7, 2013 at 6:43 am | Permalink

    I once tried to open a business account with HSBC. They wanted my private id and copies of the business utility bills and tenancy agreement. Because the unit I have spreads over several street numbers the bills have different street numbers on them although it is all one unit. The council tax says 31-35, the water bill 33-35 and so on. They refused to open the account because I had multiple addresses that could be used for money laundering. Some little oik behind their counter told me that HSBC were extremely careful that no possible criminality could take place. This was the same week that HSBC were in the dock in America for big time money laundering and so the irony was stunning. After considering 1. hurting the oik badly or 2. complaining to some slightly less impotent flunkey I chose to laugh in his face and take my business elsewhere. Give idiots some forms and a way to enforce stupid rules poorly and you get the Britain of today. A rain sodden, over taxed, regulation strangled, politically correct dump policed by retarded jobsworths that are utterly incapable of thinking for themselves.

    • lifelogic
      Posted May 7, 2013 at 8:18 am | Permalink

      “Give idiots some forms and a way to enforce stupid rules poorly and you get the Britain of today. A rain sodden, over taxed, regulation strangled, politically correct dump policed by retarded jobsworths that are utterly incapable of thinking for themselves.”


      Indeed backdoor taxes, licence fees, fines, pointless forms, pointless bureaucrats and inconvenience is what the government and EU provide in abundance.

      • Mark W
        Posted May 7, 2013 at 11:43 am | Permalink

        Sad but true.

        And they say banks were under regulated. Nonsense. They were over regulated the wrong way and Osborne should have the guts to stand by his claim to this effect and educate people on why.

        • lifelogic
          Posted May 7, 2013 at 8:28 pm | Permalink

          Exactly. Now the government is fighting yesterday’s battle.

          • Deborah
            Posted May 8, 2013 at 7:24 am | Permalink

            Exactly. The banks have entirely lost the plot on regulation.
            Niall Ferguson’s 2013 Reith lectures tackled this very subject last year – well worth listening to:

            Incidentally, I tried to open a simple ISA savings account yesterday and it took me hours! Barclays spend a fortune advertising their products to attract new customers and then drive them all away with bureaucracy and overselling. What a waste of time and money.

      • Bazman
        Posted May 8, 2013 at 5:17 pm | Permalink

        Just wait until you get your German/Swiss Britain. You think there will be no silly regulations. Ever lived in Germany? What is not allowed is forbidden. Another fantasy like your employment law nonsense that you cannot in any way substantiate. Do you just ‘feel’ it is right in a right wing fantasy BBC PPE way?

        • Edward2
          Posted May 9, 2013 at 7:51 am | Permalink

          Go and check out the standards of living, levels of unemployment, standards of health care, standards of education, crime levels and rates of welfare payments in Germany and Switzerland before you get all worried about copying them Baz.

          • Bazman
            Posted May 9, 2013 at 5:36 pm | Permalink

            Is it because of a lack of regulation and law? No it is not. The regulations and rules in Germany are stupendous.

    • Bob
      Posted May 7, 2013 at 12:04 pm | Permalink

      ” Give idiots some forms and a way to enforce stupid rules poorly and you get the Britain of today. A rain sodden, over taxed, regulation strangled, politically correct dump policed by retarded jobsworths that are utterly incapable of thinking for themselves.”

      Very eloquently put Andy – entirely agree.

  8. Nick
    Posted May 7, 2013 at 7:04 am | Permalink

    So lets see.

    Governments force banks to behave in a certain way.

    Governments force the banks they own to behave in a certain way.

    It goes wrong.

    Hmmm, yet another example of why MPs are the problem no the solution.

    You passed the laws.

    You are responsible.

    • Andyvan
      Posted May 7, 2013 at 8:14 am | Permalink

      Fair point, any business with any degree of government intervention is doomed to inefficiency, decline and probable death. Sadly the only institution that won’t die of regulation is government itself.

    • Acorn
      Posted May 7, 2013 at 9:48 am | Permalink

      Too true Nick. Since the coalition took over, they have launched circa 12,000 statutory instruments. In the last three years of the Labour government, it managed circa 8,000 S.I.s. All, no doubt making our lives easier and sweeter while correcting previous legislative cock-ups that Westminster is becoming famous for. Sadly, the coalition is only managing to produce a third more primary legislation than Labour so far.

      • Acorn
        Posted May 7, 2013 at 6:11 pm | Permalink

        BTW1. Please can we have a general election now, I am totally pissed-off with this current lot of self servers. JR wants to blog about and blame, anything, but his party neo-liberal austerity programme that is killing our economy. Cameron still thinks we rule the world bestriding his Somalia summit; what the f***? What planet is he on?

        BTW2. There comes a point in any administration, near its end, when its party lobby fodder have to make a decision. Do they go for re-election; or, do they go for cash in the bank and a sweet little directorship; courtesy of a well healed lobby firm, when an election redundancy looms. I think we are reaching that point.

        BTW3. Have you seen how the Welsh Assembly does its voting; all electronic at their desks, takes about ten seconds with an instant graphic display of the result. How refreshing, compared with the antique procedures of Westminster; a parliament that is well past its sell-by date.

        (persona untrue attack on JR removed -ed)

        • Mark W
          Posted May 7, 2013 at 10:42 pm | Permalink

          It seems to me JR that you left a fair amount of abuse directed at yourself.

          As to the traditions of Westminster. Having walked thru one of the division lobbies and understand how not all MPs are in the chamber when the division bell rings I can’t see any advantage to the electronic system. Sometimes traditions and the taking part in them are more important than can be contemplated. To scrap it would mean not knowing what is lost until it is too late.

          There’s something more than pressing a button by walking round the sides of the chamber and being an Aye to the right or No to the left.

          Reply Voting in person is good for two main reasons. It ensures MPs have to be in or around the chamber for the vote, and gives MPs an opportunity to lobby Ministers/Shadow Ministers in person with no civil servants/minders present.

          • Mark W
            Posted May 8, 2013 at 11:17 am | Permalink

            I did find the layout fascinating and did imagine that the queuing for the counting would provide time for a bit of off the record chatter. I think the other little benefits like high ranking members of government and oppostion front bench being equal when in the lobbies is useful too.

            That is why I always feel it is best to be cautious when the urge to scrap tradition is put forward on the grounds that it is notionally outdated.

    • Tad Davison
      Posted May 7, 2013 at 4:55 pm | Permalink

      Nick said: ‘Hmmm, yet another example of why MPs are the problem no the solution.’

      Sir Paul Beresford said much the same thing in the Commons not so long ago. You’re both right!


  9. davidb
    Posted May 7, 2013 at 7:07 am | Permalink

    Re money laundering. Its not just banks. I have a simple bit of legal work to get done. I understand I could do it myself, but don’t have the time or the desire to learn a new trick. Its going to cost £120 for the lawyer bit. I received a 9 page document to sign and a request that I put in a personal appearance at their offices with documents per your list. I am now considering just doing the damned thing myself, as I don’t have time to spend 3 hours going to Bethlehem.

    Are the money laundering regulations, like the airport security nightmare really not just a vastly over the top response to what for the vast majority of the public is something they will never encounter in their lives?

    • Deborah
      Posted May 8, 2013 at 7:35 am | Permalink


      But by suffocating us it keeps us in our place.

  10. Jerry
    Posted May 7, 2013 at 7:08 am | Permalink

    For once John, I totally agree with your every word, although I would point out that it was the Conservatives who promised a “Bonfire of Red Tape” at the last election – perhaps this is another example of how UKIP have managed to do more harm than good, I have no doubt that, except for the lack of a working majority (caused by the split in the vote on the right), there would have been such a Bonfire lit in June 2010 and it would still be burning today…

    • lifelogic
      Posted May 7, 2013 at 8:20 am | Permalink

      “Bonfire of Red Tape”

      Yes sure. We got the gender insurance nonsense, the new PAYE rules, endless more drivel and red tape from Cameron and the EU every day.

      • Jerry
        Posted May 7, 2013 at 10:16 am | Permalink

        @Lifelogic: (personal issues left out-ed) otherwise I really do understand why you are so hostile to women being assessed for insurance on (statistical) risk rather than some sort of irrelevant gender based marketing – as someone who has spent more time than I really would care to remember dragging crashed cars off the highways or out of ditches etc. I can assure you that women are just as likely to have anything from minor accidents to serious crashes as any male of the same statistical group.

        As for other “nonsense”, indeed, but some of that has been brought about by the Tories own right wing agenda -for example real time PAYE data submissions etc, whilst other new or revised regulations have come about due to the fact of being in a coalition, and as I said we have the split in the vote on the right wing to blame for that.

        • lifelogic
          Posted May 7, 2013 at 8:35 pm | Permalink

          “I can assure you that women are just as likely to have anything from minor accidents to serious crashes as any male of the same statistical group.

          Well you can assure me but according to the statistics you are just massively wrong – and anyway how can men and woman be in the same statistical group? Do they have the same jobs, the same driving pattern, the same number of children in the back, do they do the same shopping trips, do the same shift work, drive the same size/power cars ………? Open your eyes next time you go out.

          • Jerry
            Posted May 8, 2013 at 6:44 am | Permalink

            @Lifelogic: to you work in motor claims?….

        • lifelogic
          Posted May 7, 2013 at 8:41 pm | Permalink

          Anyway, if that were the case no law would be needed as the insurance companies would charge the same anyway and the risks would be the same.

          • Jerry
            Posted May 8, 2013 at 6:49 am | Permalink

            @Lifelogic: Unless of course one sector of their business was subsidising the marketing of another…

    • JimF
      Posted May 7, 2013 at 9:01 am | Permalink

      I rather doubt it. Had it -and other things -been that important to Cameron he could have gone to the Country again. But you also need the cojones.

      • Jerry
        Posted May 7, 2013 at 10:26 am | Permalink

        @JimF: Had Cameron chosen to go to the country again, either by design or via a lost vote of confidence (by either a Tory or Labour minority government) there was no certainty that the Tories (or UKIP) would have done any better, it is quite possible that it would have sent either Brown back into No. 10.

        Back in 1974 Wilson accepted that he was taking a risk in calling the (second) Oct election, needless elections are not always welcomed by the electorate.

        • Mark
          Posted May 7, 2013 at 4:45 pm | Permalink

          Alternatively, Cameron could have campaigned for a majority government in the first place – which he was well placed to do – rather than the coalition he publicly sought in his Observer article of September 2009.

          • zorro
            Posted May 7, 2013 at 6:07 pm | Permalink

            Indeed, his preferred strategy had been clear for some time by then, hence his lack of disappointment at not winning a good majority.


          • Jerry
            Posted May 7, 2013 at 7:03 pm | Permalink

            @Mark: I seem to recall Cameron, like all the other Tory party, campaigning for a Tory majority, not a coalition government. Nor was it wrong for Cameron to set out what his position would be in any given set of circumstances, doing so more likely enhanced his position with everyone bar a few on the right (and those in UKIP of course, but nothing short of falling on his sword would please them).

        • zorro
          Posted May 7, 2013 at 6:10 pm | Permalink

          I think that he had the best chance that he would ever have had of winning a second election bearing in mind Brown’s previous conduct in government. I cannot thin k of a better set of circumstances for a Tory government to win a majority after the inconpetence of the Labour administration. Cameron fluffed it.


          • lifelogic
            Posted May 8, 2013 at 5:11 am | Permalink

            He just threw it away with Clegg’s equal TV billing and his EU ratting, big state, fake green, soft socialist, “equality”, over regulation drivel.

          • Jerry
            Posted May 8, 2013 at 6:57 am | Permalink

            @Zorro: No, UKIP fluffed it, by splitting the vote on the right, a second election within a month or even six would likely have just enlarged those splits, whilst the rest of the population would have just seen a Tory party that couldn’t even compromise for the good of the country when asked by the electors – thus Labour (with Gordon Brown as leader or not) would have been elected whilst the LibDems may well have come a very good third if not second…

          • zorro
            Posted May 8, 2013 at 5:58 pm | Permalink

            @Jerry – I certainly didn’t feel that at the time. People were livid at Labour overall and Cameron could have won if he’d been bold. But as for the Lib Dems coming second?….and Labour winning?…..A complete flight of fantasy. What % did Labour poll?….Below 30%!


          • Jerry
            Posted May 8, 2013 at 8:53 pm | Permalink

            @Zorro: The point I was trying to make was that the electorate may well have become even more livid with a Tory party and leadership who, in the lead up to the election, kept telling them that the economy was in a dire mess etc. but when push came to shove they were not prepared to act in the best interests of the country.

            Had Cameron not entered into coalition with the LibDems then the most likely outcome would have been a n all party government of national emergency – I’m not sure that the public would have settled for anything else, any party or leader that rocked that boat would have been punished.

      • zorro
        Posted May 7, 2013 at 6:11 pm | Permalink

        …which he clearly lacks when someone stands up to him.


    • Mark W
      Posted May 7, 2013 at 11:46 am | Permalink


      Do you think a majority Tory government would have had a bonfire of quangos and red tape? I’m asking honestly not trying to be clever. I really don’t know what to think on this one.

      • zorro
        Posted May 7, 2013 at 6:06 pm | Permalink

        I doubt that it would have happened with Cameron in charge.


      • Jerry
        Posted May 7, 2013 at 7:31 pm | Permalink

        @Mark W: A Tory government, given a clear working majority, would have been free to do as they please -and I really am not trying to dodge your question- but of course there will always be the “would/did they though” question, if UKIP were to be elected in similar circumstances will they do what they say they will in their manifesto?…

        It is interesting to read the documents found at The Margaret Thatcher Foundation for the day, and days, immediately following her becoming PM in 1979, her (civil service briefing) papers show an economic situation far worse than either the Tories thought or Labour had admitted, this limited what her government could do immediately and for some time there after – although it didn’t deflect her in the same way as Cameron has been due to not having that working majority.

        • Mark W
          Posted May 8, 2013 at 11:27 am | Permalink


          Thank you. I’ve never quite had the measure of Cameron. I quite liked George Osborne although have reservations, but against the ties of Coalition it is hard to make fair judgement.

          I would fear a Lib Lab coalition or small majority Lab far more than a massive Lab majority as they would be in thrall to their nutters.

          UKIP are the big story of this parliament and their direction of travel is only moving forward…. or is it.

          I welcome the chanegs of national debate brought about by UKIP but last Thursday could prove to be their biggest undoing. At present Boston will most likely give UKIP thier first MP.

          But… the wheels may fall off UKIP if their councillors prove to be inept, unruley, factional or plain incompetent. They are riding very high in national regard but it could go so horribly wrong for them. Thursday may yet turn out to be the beginning of the end for them. I’m a UKIP fan but also a realist. I wish the Tory party would put fire in its belly once more. They’d be unwise to ditch Cameron now and if UKIP prove competent I don’t think Farage would hold too hard to his sabre rattling about Cameron.

      • lifelogic
        Posted May 7, 2013 at 8:38 pm | Permalink

        Not under Cameron the great pro EU Libdem leader, but he would at least have been under more back bench pressure.

  11. zorro
    Posted May 7, 2013 at 7:13 am | Permalink

    John, this is you at your best, slaying the dragon of petty fogging, useless over-regulation and assorted guff…….My ruling is mainly ‘I can’t be bothered’……. I recently had experience of petty bureaucracy by a bank which claims to believe in ‘Helpful Banking’ when they treated me with what appeared to be suspicion (regarding a family matter) or perhaps it was dazed, zombie like look of the individual employed by that (zombie) bank. I have complained and will take it further. However, I went to another bank, and they were very understanding, established my identity happily and were very helpful. They used common sense in their dealings with me as opposed to rude, bureaucratic box ticking. The first bank will rue their treatment of me as it will involve significant withdrawals from accounts, and it is the only thing that they understand.

    On a more general point, particularly with regards to the money laundering, the bank’s actions are usually always defensive and designed to do the minimum to stop the authorities investigating their potential complicity. As you say, surprisingly enough money launderers have identity documents too!


    • alan jutson
      Posted May 7, 2013 at 8:04 am | Permalink


      I guarantee no one will notice you withdrawing your business from the Bank concerned.
      I have done the same in the past with significant sums, and they simply do not notice, or are not bothered.

      The only way to get a chance of a response is to write to the CEO advising them what you intend to do, and why.

      Banks no longer value loyal customers, they would rather spend ever larger sums of money on advertising for new ones.
      They all seem happy with the merry go round of churning customers by offering one year incentive deals, far too difficult to try and keep the customers they have with decent interest rates and a good service.

      • zorro
        Posted May 7, 2013 at 2:31 pm | Permalink

        I do intend to write to the CEO personally.


        • lifelogic
          Posted May 7, 2013 at 8:39 pm | Permalink

          Do not expect any sensible reply.

    • Andyvan
      Posted May 7, 2013 at 8:16 am | Permalink

      Banks don’t really care if you withdraw your money as they’ll get it back by way of bailouts from tax theft. A no lose situation for them.

    • lifelogic
      Posted May 7, 2013 at 8:25 am | Permalink

      Avoid the two big, government owned, banks they are both useless, slow and very expensive – in my personal experience. “Helpful banking” sure, where on earth is the advertising standard authority on this?

      • zorro
        Posted May 7, 2013 at 2:29 pm | Permalink

        I was actually assisting my father with his affairs. I also have an account with the institution but keep my money away from the two leviathan behemoths…..


  12. Ralph Musgrave
    Posted May 7, 2013 at 7:17 am | Permalink

    Bat regulations should be abolished. In as far as bats rely on artificial man-made structures, they are not native to the UK. You might as well abolish concrete floor joists on the grounds that that means less wood for woodworms to eat.

    • lifelogic
      Posted May 7, 2013 at 8:27 am | Permalink

      Indeed bats, newt issues and the likes are brought into every planning issue, usually for no reason, by planning objectors as a matter of course. Forcing absurd surveys and reports, delays and costs onto people applying for planning.

      • alan jutson
        Posted May 7, 2013 at 9:36 am | Permalink


        Do not forget soil tests, to look for contamination in the earth.


        Flood risks, with the 1 in 100 years, 1 in 200 years projections, even if the house is on top of a big hill !


        Expensive Energy ratings calculations, because they think it is too complicated to look in the loft, or view a past utilities bill.

        • lifelogic
          Posted May 7, 2013 at 8:42 pm | Permalink

          Indeed all bonkers.

  13. woodsy42
    Posted May 7, 2013 at 7:21 am | Permalink

    Money laundering regs were nothing to do with money laundering – as you say any serious criminal would laugh at them.
    I always assumed – and I still believe I am correct – that they were created as a deliberately intrusive and annoying ritual designed to nudge acceptance of (the then planned) national ID cards, so it could be demonstrated how ID cards would make life simpler.
    I believe that he fact that the sale of alcohol ‘think 21’ scheme appeared at around the same time lends support to my cynicism.

    • alan jutson
      Posted May 7, 2013 at 9:43 am | Permalink


      I thought they were introduced for Inland Revenue purposes (under Brown), as the Banks, as I understand it, now have to inform the Revenue whenever a new account is opened.

      Problem is with 1 year bonus incentives on interest rates, anyone who takes advantage of such is opening, closing and switching accounts so often, that they actually look like a crook by just trying to get the best rates.

      All an expensive, time consuming, and pointless waste of time for everyone.
      If only the Banks looked after loyal customers !!!!

    • lifelogic
      Posted May 7, 2013 at 1:55 pm | Permalink

      That perhaps make some sense.

  14. Gary
    Posted May 7, 2013 at 7:40 am | Permalink

    Pushing on a string. Just more evidence that attempts to engineer growth by money lending into a debt saturated economy is futile. We need to clean out the debt bubble and kill off the zombie businesses , including the banks, before we can grow again. On current evidence , there is no stomach for restructuring and we have learned nothing from Japan(almost 25 years of economic malaise and counting). On this path we may not see growth in our lifetime.

  15. alan jutson
    Posted May 7, 2013 at 7:47 am | Permalink

    An excellent post, which outlines just a few of the problems we face as both individuals and as business owners.

    The bad news is, this obstruction is still growing:

    Want to replace a single window or door yourself (and/or want to use a local tradesman), and not use a registered window replacement company, that will mean a Building Regulation submission, a fee, a wait for approval, then a visit to inspect the work before a final completion certificate is issued.
    All for a bloody door replacement.

    Then we had the NON JOINED UP THINKING of last year, with the suggestion that anybody would be able to build shanty town type extensions without permission, which thank goodness is now being revised.
    But still no one seems to want to do anything about the growing shanty town type shed/garage buildings which are occupied by families (probably because the Council would then be responsible for housing these people).

    We seem to move from over regulation/control, to none, to more, with commonsense thrown out of the window (which you cannot replace without permission).

    Why should Banks lend anyone money, when they are told they have lent badly in the past and need to scale back risk.
    Why should the Banks lend money when they are told to increase their reserves.
    Why should the Banks pay out reasonable rates of interest to depositors, when the bank rate is decided by Government (a totally independent BOE I think not)
    Why should the Banks worry about depositors, when they can get cheap money from the Government.

    If you are a business and have an overdraft facility (which is payable on Demand) then why is it a surprise that such businesses are hoarding cash to keep within the business, simply because of that payable on demand risk that could put them out of business at a stroke.
    Has the government ever thought that Companies are now paying off their own debt/borrowings, because they wish to be in control of their own affairs and not be at the mercy of a Bank, which may at any minute call in all of the loans originally agreed in good faith.

    John when you look at the real detail, we are in a hell of a mess, add to all of that taxation on everything you do and purchase, and the fact that we all seem to have less disposable income to spend, is it any wonder we are growing at all !

    To run any business the risk has to be worth the reward, otherwise why bother.
    For most businesses now, and certainly for a huge amount of small business owners, the risk is no longer worth the hastle.
    Given that small businesses employ more people than large organisations, the writing is on the wall unless things change, and change soon.

    The simple answer is that government has to stop getting involved in too many things, has to drastically reduce its costs, and must allow people to keep more of their own money to spend as they choose.

    • Andy
      Posted May 7, 2013 at 8:41 am | Permalink

      I was sat next to a High Court Judge not so long ago at dinner and he was livid at the way a Local Council had behaved over some replacement windows. The building was listed and he had been advised by the Listed Building Officer that the existing windows could be repaired – they were as rotten as hell ! Eventually they allowed him to replace the rotten windows but it too a fight. I said to him I was so glad he had had all these problems ! As I remarked ‘Now you know what we have to put up with !’

      Another Judge was telling me how exasperated he became everything was ‘I can’t tell you that: Data Protection’ He now says ‘I happen to have a copy of the Data Protection Act on my desk, could you tell me which Clause you are referring to ? They never can. Money Laundering is exactly the same. Some of them should read the act.

    • Electro-Kevin
      Posted May 7, 2013 at 8:52 am | Permalink

      Parts of London are full of ‘shanty’ type extensions and garage extensions. The authorities don’t seem to mind at all.

    • Anthem
      Posted May 7, 2013 at 12:05 pm | Permalink

      Couldn’t agree more. As I have often said, the best thing government can do to help business is just get out of the way. Remove the obstacles, remove the red tape, the bureaucracy etc.

      Stop making it harder for people who merely want to be self-sufficient and run their own business – any new startup business owner will know that it’s hard enough without all the political hassle.

      As for windows and doors… the loan we took out a couple of weeks ago was taken in order to get a few home improvements done and the windows and doors were one of them.

      I was not even aware of the new rules and regs beforehand but I did notice that the chap who quoted us was “Fensa” registered but I didn’t even know what that meant.

      The chap did the windows for my next door neighbour and those of a lady further down the street and both were delighted with his service.

      That meant more to me than any fancy logo on his business card and was the crucial factor in my decision to give him the business.

      Thanks government, but again, you’re not needed.

    • lifelogic
      Posted May 7, 2013 at 1:57 pm | Permalink


  16. Anthem
    Posted May 7, 2013 at 7:52 am | Permalink

    Sounds like there’s a gap in the market here for someone with the wherewithal to exploit it…

    My own experience with a recent bank loan (last month) was entirely the opposite though. We have a mortgage with Halifax and our bank account is with them.

    We applied for a £15k loan with them online and literally within seconds the money was in our account.

    It was actually scary how quickly the whole transaction went through.

    Compare this to two years ago when we bought our property and had to stump up a 15% deposit – that brought home to me how difficult it must be for newcomers to the housing market to get a foot on the ladder.

    It does seem that the banks have gone from one extreme to the other, though. A few years ago, they would give you a 100% mortgage at 6x annual income and the only ID you’d need was your Beano Club Membership Card.

  17. Peter Richmond
    Posted May 7, 2013 at 8:07 am | Permalink

    My wife recently wanted to open a self select ISA under a scheme operated by one our big high street banks. Over the phone, she was told a signed passport photo was required and that the local high street branch of the bank would countersign it. However the branch refused since my wife’s current account was not with this particular bank. So off we went to her own high street branch who see her frequently. They refused to countersign the photo since the self-select account was with a different bank. We then went to the Police who it said on the bank web site would also sign such documents. However they said they no longer do this kind of thing. In the end we resorted to our neighbour who is a local doctor in spite of being told locally that this category no longer admissable. All this took a couple of days energy and effort but it resolved the matter with the self-select ISA provider. As you say, this is complete nonsense that we can all do without.

    I hear today Lord Lawson has declared his intention to vote to come out of the EU should we have a referendum on the matter. No doubt in pursuit of the balanced opinion the BBC followed up the news item with an interview with Nick Clegg who said how much more prosperous and safer we are inside the EU. I well recall Irish politicians putting out this kind of unsupported opinion before their referenda over their a few years ago. Being in the Euro will bring us prosperity, they said. It’s time Nick Clegg got some new spectacles. What evidence I can see supports the views of Lord Lawson and if the opportunity comes, I too shall join him in the ‘we want out’ lobby.

    • forthurst
      Posted May 7, 2013 at 12:06 pm | Permalink

      Lord Lawson, is not the only disastrous Europhile ex-Chancellor to have belatedly seen the light when out of government, he having wreaked enormous damage on the British economy with his Deutschmark shadowing; Oskar Lafontaine, who was Germany’s leftwing finance minister during the introduction the Euro thereby causing a multi-country trainwreck has now said the Euro should be abandoned.

    • sjb
      Posted May 7, 2013 at 2:51 pm | Permalink

      You did not say what evidence you have seen but did you take into account GDP per capita of Ireland with, say, the UK

  18. Chris S
    Posted May 7, 2013 at 8:30 am | Permalink

    As a recently retired Independent Financial Adviser, I can confirm the lunacy of the enormous paperchase that is the result of the money laundering regulations.

    In principle, if money laundering is robust where cash enters the banking system, it makes it unnecessary for almost all subsequent transactions.

    House purchase is the perfect example of where the system has gone completely over the top :

    When the hapless buyer agrees to purchase a property he has to have his identity verified at every stage of the process :

    The Estate Agent
    The Solicitor
    The IFA who arranges the mortgage
    The Bank that lends the money.

    All these have to undertake ML verification and store the evidence of having done so.

    These days house purchase hardly ever involves any cash : The deposit is a bank transfer or a cheque and the estate agent and solicitor are paid out of the proceeds of the transaction. The IFA is paid by the lender and/or a fee usually paid by bank transfer or cheque. In 22 years of practice I was never paid in cash.

    So why is money laundering required at any stage of the transaction ?
    It is enormously wasteful of both time and expense and all to no purpose whatsoever. Of course lenders needs to understand the status of the borrower but they have the the credit checking system to accomplish this.

    On the subject of the housing market, the British system is far more efficient and hugely cheaper than in Europe, ( In France and Italy the cost of moving is usually at least 10% of the purchase price ) However it’s still far too expensive.

    The way to get the market moving is to simplify the whole process and take out cost. Many solicitors still send letters rather than email and the whole process is overcomplicated and costly.

    Then we have the whole subject of stamp duty. Everybody except the Government and Inland Revenue agrees that the banding system makes no sense, holding down prices below the upper limits of the band and distorting the market.

    Why hasn’t it been changed to a straight percentage of the purchase price ?

    Reply MY suggestion to the governemnt has been to say the Money Laundering requirements only apply if the money in the transaction does not come from a regulated UK, EU or US bank. IN all cases where the money does come froma reputable bank people can rely on the money having already been through Money Laundering tests.

    • forthurst
      Posted May 7, 2013 at 12:42 pm | Permalink

      “Reply MY suggestion to the governemnt has been to say the Money Laundering requirements only apply if the money in the transaction does not come from a regulated UK, EU or US bank.”

      …or on the otherhand, to be consistent, the UK Border Agency could set up shop at all train stations etc. That would have the added benefit of increasing direct and indiret employment, substantially.

    • Chris S
      Posted May 7, 2013 at 10:47 pm | Permalink

      John, your suggestion is perfectly sensible and would save millions in time and money.

      In fact it’s just far too sensible to ever be accepted.

      What’s your view on stamp duty reform ?

      Reply The first change I would like them to make is to bring in each higher rate they have set only for the amount over the threshold. Stamp Duty is too high and is restricting movement.

  19. Brian Tomkinson
    Posted May 7, 2013 at 8:32 am | Permalink

    I quote from the executive summary of the Treasury document entitled: ‘Implementing the Third Money Laundering Directive:
    Draft Money Laundering Regulations 2007’:
    “The Third Money Laundering Directive was adopted in October 2005 under the UK’s Presidency of the European Union. It represents Europe’s ongoing commitment to tackle the international problem of money laundering and terrorist financing by implementing the global standards produced by the Financial Action Task Force (FATF) in 2003. The UK Government has to implement the Directive into UK law by December 2007. ”
    There we have it, this came from the EU under a period of UK presidency. Why don’t you come out as clearly as Nigel Lawson and publicly state that the UK should leave the EU and stop this re-negotiation pretence?

    • stred
      Posted May 7, 2013 at 2:36 pm | Permalink

      The EU directive, with British functionaires in the driving seat, seems to have been taking effect in strange ways. I deposited a large amount in a French bank account 4 years ago because my partner and I had agreed to buy a house in France for retirement. She also opened an account in the same branch. The staff in this bank were friendly and helpful. Over the 4 years, they transferred money from my account to pay for expenses and between our accounts, with instructions being given by email and confirmed by them phoning my mobile. In the end the new property and other taxes made the house purchase a non starter.

      I opened a UK bank Euro account and emailed a request to transfer most of the money but keep some for existing expenses. Unfortunately, they were now unable to do so without proof of identity and that the British account was really mine. The French staff tried to phone the British bank to confirm that my details were correct. The British refused because they could not disclose details over the phone. In the end, after nearly 3 months of trying ,I had to visit the investment branch of the French bank in London to verify my identity.

      A month later, the French bank wrote to both of us telling us that we would have to close the accounts, as head office no longer wished to offer accounts to foreigners who were not living in France and using the accounts and the branch frequently. Perhaps they thought we were dodgy or ‘pas trop Catholic’, as they say. The tone of the letter was officious and we were warned of the legal consequences of not closing in time.

      We phoned the branch manager- my partner is a fluent French speaker. He advised us to open an account with their subsidiary, a private bank with a branch in London. I phoned and it turned out to be the same people who I had met to confirm my identity. And he would not be interested in me as a customer. I wasn’t rich enough. The bank was for seriously rich French people. So, as my partner had no account to tranfer her Euros to, she emailed and phoned our French branch asking them to close the account, as ordered by their letter, and put the money into my British euro account. Pas Possible! She had to post a registered letter with the request and ID. The money has still not arrived and if we don’t close soon we face the wrath of french justice.

      • Mark
        Posted May 7, 2013 at 4:58 pm | Permalink

        This is the French imposing capital controls and confiscation à la Chypre by the back door. It reminds me of the time when they required all imported VCRs to be customs cleared through a small office in Poitiers.

    • Denis Cooper
      Posted May 7, 2013 at 3:25 pm | Permalink

      Yes, it’s another one of those bloody irritating nuisances in everyday life for which we may thank our EU membership.

      Note that I say “our EU membership”, not more baldly “the EU”; because for all I know the UK goverment may have supported the Directive when it was proposed, or may even have had a hand in proposing it.

      It’s not easy to find that out, but it’s very easy to find that once the Directive has come into force it is legally binding, a part of EU law, and our Parliament has agreed that it will always pass any domestic law required to implement it.

  20. Electro-Kevin
    Posted May 7, 2013 at 8:49 am | Permalink

    The banks know that property is over valued and that there is inherent risk in lending without large deposits.

    And why are deposits so large ?

    Because house prices are so high – especially compared to wages.

    Middle class people can’t afford to breed because it needs two full-time workers to be able to buy a house. A stay-at-home mother has become a luxury most working people cannot afford. So we read of reverse Darwinism happening in Britain.

    Our housing fetish is what helped cause the credit boom/crisis and we dare not allow a full correction in prices now – instead the Govt proposes a Help to Buy scheme to perpetuate it rather than a fall in prices to align with real earnings.

    • Electro-Kevin
      Posted May 7, 2013 at 9:03 am | Permalink

      Of fraud. I wondered how the people (I undertook a transaction with-ed) could afford to do it.

      When I was pursued by bailiffs (words left out ed) some years later I worked out how.

      The area had been considered to be so safe up until that point that bank documents had been sent with minimal security. (The Ombudsman found in my favour – no investigation was carried out because the bank considered a £10k fraud not to be worth it.)

      • Electro-Kevin
        Posted May 7, 2013 at 11:14 am | Permalink

        Let’s put it this way.

        The British people can no longer be automatically trusted not to defraud. Be it on loans, car insurance/accidents, credit cards – whatever.

        I’m not at all surprised the banks are cautious.

        • Electro-Kevin
          Posted May 7, 2013 at 11:23 am | Permalink

          Fraud is so rife, in fact, that much of it is no longer in the police’s remit as it was taking up too much of their time. I was astonished to find that a £10k fraud (with suspects) was of no interest to the police – nor the bank itself.

          The only people interested was the debt agency that had bought the debt.

    • uanime5
      Posted May 7, 2013 at 2:02 pm | Permalink

      Working class people can also get help if they work in low paid jobs in high cost areas.

      By stay-at-home mother are you referring to women who are married to rich men who can afford to support her while she’s not working, mother who don’t work because childcare costs make it unaffordable, or unemployed single mothers?

      • Bob
        Posted May 7, 2013 at 5:21 pm | Permalink

        “stay-at-home mother”

        I’m surprised at you using such sexist language in these egalitarian times!

      • Deborah
        Posted May 8, 2013 at 8:48 am | Permalink

        I think by “stay at home mother” Electro-Kevin means women who prefer to look after their own children rather than farm them out to some stranger who has been CRB checked.

        Lots of women whose husbands are not rich do still choose to stay at home with their children because they believe it is better for the family. They scrimp and save and make sacrifices – forgoing those “essential” foreign holidays and fancy cars – so that they can spend time with their own children, get to know them and instil some values. The major difficulty in making ends meet is usually the mortgage, because housing costs are so ridiculously high.

        In the 70s and 80s, when housing costs were more reasonable in relation to wage levels, most mothers stayed at home to care for their own children. We worried about latchkey kids and felt sorry for women in the Soviet Union who were forced to leave their children in care whilst they went to work for the Motherland. Now well-paid female journalists and politicians talk earnestly about a woman’s need for a “career” whilst in real life the majority of UK mothers are obliged to dump their children in childcare whilst they spend the day in some grotty job in a factory or office to pay the mortgage. Wayward teenagers are commonplace. Is this really progress?

        If I look after my neighbour’s children five days a week, and she looks after mine, we are deemed to be nannies with a valid career. If we look after our own children, full-time with total commitment , why is that looked down upon as a lesser role?

        Take the mote from your eye, uanime5.

      • Electro-Kevin
        Posted May 8, 2013 at 8:53 am | Permalink

        Uanime5 – The situation is all very confusing but I think the low birth rate speaks for itself.

        Houses built for milkmen are now owned by city bankers. I speak to Bazman (earlier) of a friend who can only afford a small family home within range of his workplace with a dual (matching) income – despite him paying 40% tax in an area of low wages.

        That means – for him – putting off children. And when they do go for it staying at home simply isn’t an option for her whether she wants to or not.

        Why are we so keen on childcare by other people ? Why is this considered to be a good thing ? Do most mothers REALLY want it ?

        • Electro-Kevin
          Posted May 8, 2013 at 8:56 am | Permalink

          Low birth rate among ‘middle’ classes.

          (Not ‘middle class’ at all in reality – that classification being a bit of a con in order to make people feel like people are richer than they are… bankers satisfied with houses built for milkmen.)

        • Deborah
          Posted May 8, 2013 at 3:42 pm | Permalink

          “Why are we so keen on childcare by other people ? Why is this considered to be a good thing ? Do most mothers REALLY want it ?”

          There has been plenty of work done on this but it is not well publicised because it doesn’t show the desired picture. In reality:

          About 15% of women want to be earth-mothers/home-makers and always stay at home.
          About 15% of women want to organise childcare to maximise their career potential.
          The rest – the vast majority – want to mix and match. Generally this means staying at home while the children are very young and only taking part -time work until the children are much older.

      • Lindsay McDougall
        Posted May 9, 2013 at 12:29 am | Permalink

        Working class people can also get jobs in rich areas if they live in poorer areas within easy reach of the rich areas. That’s why London works so well.

    • Lindsay McDougall
      Posted May 8, 2013 at 5:39 pm | Permalink

      “……………..we dare not allow a full correction in [house] prices now ………..” Why ever not? It’s what’s needed to get the young into the market.

      That’s the problem with the UK – inflated house prices, old money, old codgers and ‘old women’.

  21. JimF
    Posted May 7, 2013 at 8:55 am | Permalink

    Yes, you hit the nail on the head.
    From councils spawning bat surveys, to less violent crime putting more police on roads to monitor us, to banks and their paperwork, to employment legislation requiring real time information to the nearest letter, trying to actually do anything today compared with 30 years ago is fraught with obstacles. I think you also have your answer in a nutshell as to why we have good employment figures but lousy productivity.
    A bonfire of the bureaucrats was never more necessary.

  22. MickC
    Posted May 7, 2013 at 8:57 am | Permalink

    When Labour won the 1997 election, Patricia Hewitt said that they would make the UK the world leader in regulation. That was a promise that was kept-many a time over.

    As you say, the mass of regulation is mainly effective only to prevent honest people doing what they should be allowed to-not to prevent the abuses intnded to be stopped. A prime example is the banking catastrophe; despite all the regulation very few of the perpetrators have been held to account, and then only because the media got involved. In fact, most of the offences could have been dealt with under existing criminal and tort law-but the government is more than happy to allow these people to go free.

    It is often said that the UK produces nothing. That is wrong; the UK produces the most expensive commodity in the world-administration.Shame that nobody wants to buy it-and it is foisted on a captive market.

  23. miami.mode
    Posted May 7, 2013 at 9:13 am | Permalink

    Anti money laundering regulations always remind me of Christopher Fildes writing in the Daily Telegraph wondering how many times Coutts asked the Queen to pop in with her latest gas bill.

  24. Kenneth
    Posted May 7, 2013 at 9:43 am | Permalink

    Excellent post.

    We are tied up in red tape. Fraud laws cannot be properly enforced (at a reasonable cost) due to the complexity of regulations on one hand and the weight of evidence and witness co-operation that is required. Some fraud is being perpetrated from abroad or from those with bases abroad that they can quickly flee to, if necessary. This adds to the cost and complexity.

    As the authorities have effectively given up on fraud enforcement, the onus is increasingly put on legitimate business to carry out expensive pre-emptive checks.

    The end result: the guilty are presumed innocent and the innocent are presumed guilty and commerce and life in general is stifled.

    For what it’s worth, the answers are perhaps to:

    1. Simplify regulations. This will require us leaving the eu
    2. Tighten up on immigration and have a bond system so that a deposit is paid for all immigrants. This will also require us leaving the eu.

    In short, leaving the eu is the best answer in my view.

  25. lojolondon
    Posted May 7, 2013 at 10:49 am | Permalink

    The problem here is that the EU has no real interest in regulating money laundering. After all, it is only now, that Cypress has collapsed that we find out it is a hotbed of mafia / KGB money laundering. So the ‘money laundering laws are merely created to be noticed through nuisance factor, and to “cover someones’ arse” and show that they are doing something about the problem, not, on any account, to stop the gravy train!

  26. MichaelL
    Posted May 7, 2013 at 11:12 am | Permalink

    ” new generation of potential homeowners cannot get mortgages”

    … isn’t this because we have a false market in housing? Its propped up by QE and ‘Help to Buy’ … had there been a free market and a proper clearout, then people would be buying/selling at levels set by the market and the volumes would be much higher.

    We’ve got George Osborne to thank for keeping the pressure up on QE – only have to look at his guidance and who he selected for the BofE governor.

  27. English Pensioner
    Posted May 7, 2013 at 11:25 am | Permalink

    Banks are all procedure without any thought as to the logic behind it. My bank rang me at home a few weeks back and asked me to confirm my name which I did.
    They then asked for my date of birth and my mother’s maiden name and other security information which I refused to give.
    The voice said “But I need that”.
    “Why” was my response.
    “So that I can be sure that I’m talking to you”
    “But you rang me, how do I know you are the bank, who am I speaking to?
    “We’re not allowed to give you personal information”
    “well I’m not talking to someone who won’t tell me who they are or where they are phoning from, goodbye”

    In the end they sent me a letter. And the vital information which had to give me personally and mustn’t be told to anyone else? I’d forgotten to sign the back of my ISA transfer form, would I drop into the branch and sign it !

    • Mark
      Posted May 7, 2013 at 5:03 pm | Permalink

      I have had a similar conversation – almost word for word.

  28. Andy Baxter
    Posted May 7, 2013 at 11:43 am | Permalink

    Regulation OR “More Government is the answer”

    A good analysis Mr. Redwood and hard to critique such observations, but you don’t offer even a single or any meaningful solutions, not even headers to discuss and promote.
    Government always thinks the answer to any and all of society’s problems is MORE regulation.

    WHY do we need more regulation? Is the pertinent question to ask after analysing a problem and I want to propose a radical solution to most of society’s problems?
    Less regulation.

    Its radical I know and would mean less government jobs-worths employed to enforce it all, it would save squillion’s of tax payers’ money that could be given back for people to decide what they want to spend it on instead of ‘government’ which thinks it knows better than me how to spend MY money!

    I will use a simple example regarding Traffic and road users where this would work:
    We are forever being educated, told what not to and what to, and regulated regarding traffic. My wife a Mexican national recently learned to drive in the UK passing her practical test last week (she holds a full Mexican driving licence and believe me, if you can drive in Mexico City and its suburbs without a collision and I have, you can drive anywhere)

    They have hardly any traffic signs of meaning, mostly direction ones telling you which way to get to wherever and few speed restrictions ones but that’s it! Drivers despite the volume are surprisingly courteous and an unwritten sort of code of behaviour has evolved that works very well.

    The Mexican government recently tried to introduce more regulation to curb pollution by restricting certain cars on certain days of the week depending on the registration number but drivers just sold their good new cars that had low emissions and bought two older ones with different registration numbers to circumvent the problem leading to even more pollution from older engines over the more modern better emission ones!

    See more regulation doesn’t solve the problem it just creates a bigger problem!

    I digressed slightly but my wife’s most common complaint about driving here in the UK is the plethora of signs both on poles, walls on the ground in fact everywhere telling her to do this, and don’t do that that she became quite emotional and overwhelmed at one point; becoming totally confused with the information overload her mind went totally blank one day as she was driving and I had to step in to bring her back into the room so to speak as her mind as she put it ‘rebooted’.

    Now look at this experiment the Dutch did a few years ago:

    Over a two year period by simply removing all the traffic signs and centrally controlled regulation that supports such they dropped the accident rate from an average of 8 per year to just 1, yes just 1 accident per year.

    Why? Simples really, drivers and pedestrians were allowed to exercise initiative and responsibility for their own actions without the need to be regulated and improved safety was the net result.

    The same experiment could be applied to any walk of life by reducing where appropriate, or removing altogether regulation to control behaviour and instead giving responsibility back to individuals to manage their own ‘space’. Not everyone will be responsible but we have enough existing statute and law to punish transgressors who behave thus anyway, why do we need more specific regulation that just creates more problems of monitoring and enforcement?

    Fly tipping is another example: I remember when the council for the council tax I pay would come and collect things like old mattresses, timber etc from my front door, but not anymore, they use ‘fees and other charges’ to top up the council tax and its no secret now that councils generate as much and more income from such fees and penalties such as traffic and parking as they do council tax.

    So if the council won’t come and collect and then expect people to pay for something they’ve already paid for in their minds, then is it no wonder more people just fly tip, with the extra cost of clean up more than the cost of just picking it up in the first place less the fee they wanted to charge anyway! And governments answers; more regulation to try to control fly tipping instead (and all the extra cost associated with such) instead of looking at the reason for the problem in the first place!

    Less Regulation.

    It’s radical, because it promotes the individual over the collective. The collective’s interests at the expense of the individual has been given too much free reign for too long. We all have been subsumed to the collective one size, shoehorn, homogenised, size fits all for far too long, enforced by petty jobs-worths endowed with a divine right sense of entitlement to order us all about armed with reams of regulations, and their numbers will grow and their regulations will grow.

    and the problem just gets bigger and more costly.

    I’ll finish with a question.

    What happened to the ‘bonfire of the quangoes?’ I’m not exactly feeling the heat methinks!

    Reply I hjave made many proposals over the years to cut regulation. If you want to be reminded you could start with the chapters on deregulaiton in the Economic Competitiveness POlicy Review, available as a download on this site.

  29. Christopher White
    Posted May 7, 2013 at 12:20 pm | Permalink

    don’t like to praise GO but consensus is that FLS has lowered rates for mortgages and now upturn in activity. He has now tweeked it to cover SMEs. Saw report that despite difficulties with banks SMEs have improved cash position by billions – ? the firms that provide money in exchange for invoices, etc. SME tweek makes some of these eligible as well as banks.

    • Mark
      Posted May 7, 2013 at 5:08 pm | Permalink

      I don’t think there is that much of a concensus.

      Andrew Brigden, a senior economist with the group said: ‘Help to Buy is a reckless scheme that uses public money to incentivise the banks to lend precisely to those individuals who would not and should not be offered credit.

      ‘Had we been asked to design a policy that would guarantee maximum damage to the UK’s long-term growth prospects and its fragile credit rating, this would be it.’

      The report says the Help to Buy scheme could ‘reignite the housing market bubble’. If it burst, plummeting property values would be ‘inevitable’, they warned.

    • PT
      Posted May 7, 2013 at 7:15 pm | Permalink

      Actually, SME assistance you speak of has actually been categorised to cover buy-to-let properties investors/speculators. A great deal of this state backed cheap lending will be directed towards landlords, rent seekers and multiple property owners.

      • Deborah
        Posted May 8, 2013 at 8:57 am | Permalink

        “A great deal of this state backed cheap lending will be directed towards landlords, rent seekers and multiple property owners”

        ….renting at exhorbitant rates to a captive market of students, paying with government issued maintenance loans financed by the taxpayer.

      • Mark
        Posted May 8, 2013 at 12:02 pm | Permalink

        The effect of this is likely to be still worse, as landlords are subsidised by housing benefit top ups to rent. They will be competing with other buyers for the same homes, encouraging gazumping.

    • PT
      Posted May 7, 2013 at 7:16 pm | Permalink

      Actually, the SME assistance you speak of has been categorised to cover buy-to-let mortgages. A great deal of this state backed cheap lending will be directed towards landlords, rent seekers and multiple property owners.

  30. Pleb
    Posted May 7, 2013 at 12:21 pm | Permalink

    Well John you may complain about our use of UKIP to send a message but it has certainly worked. The three parties are really shook up by UKIPs success. Excellent. I will continue to vote for the new Conservatives(UKIP). I want my country back.
    Youve got about 13 months before the next election fight will begin. Some of you will be looking back over your shoulders.

  31. Stuart
    Posted May 7, 2013 at 12:28 pm | Permalink

    Never mind money laundering, or bureaucracy, how come the much maligned ‘Wonga’ promise in their adverts to deposit money in my account in 15 minutes…

    Now compare and contrast that with cashing a cheque…

    No contest…

    Given that we now live in a digital world, why does it take our high street banks so long to clear payments?

    That is something you should be looking at as well…

    • APL
      Posted May 7, 2013 at 8:12 pm | Permalink

      Stuart: “Now compare and contrast that with cashing a cheque…”

      Banks prefer people to use electronic payments.

      Cashing a cheque still follows the old clearing process, which involves moving bits of paper about the country.

      Stuart: “why does it take our high street banks so long to clear payments?”

      It doesn’t if you use the electronic processes in preference to paper (cheque) transfers. ‘Faster payments’ usually arrive in the beneficiary bank account within half an hour.

      • Mark
        Posted May 8, 2013 at 1:38 pm | Permalink

        There is little reason not to have devised an electronic mechanism for clearing cheques by now. Having worked in London interbank dollar clearing many years ago (back office stuff, checking the microfiche for matching vouchers that had gone astray), I proposed back then to modernise the system.

        • stred
          Posted May 8, 2013 at 8:42 pm | Permalink

          It takes 2 months and a large fee to clear a cheque from one EU country to another now.

  32. Robert Eve
    Posted May 7, 2013 at 1:24 pm | Permalink

    John – your posts are always worth a read, but this is certainly your best for quite a while.

  33. uanime5
    Posted May 7, 2013 at 2:03 pm | Permalink

    Recent figures show there is still a lending problem in our economy.

    RBS is also having problems finding enough people who want to borrow money.

    The whole thing has become like the sale of indulgences against sin, with the victim having to pay for a lawyer to countersign the documents to prove who he or she is, even though the Bank should know exactly who he or she is.

    How would you recommend changing the law? What forms of identification should banks be requiring in order to prevent money laundering?

    Reply You start by not needing any such additional check for all money paid through a regulated UK, EU or US bank

  34. David Langley
    Posted May 7, 2013 at 2:20 pm | Permalink

    When the total amount of laws and regulations become so burdensome that one is tempted to operate outside of them, that is obviously wrong. How though can we be expected to agree with the old dictum “ignorance of the law is no excuse”? People are daily expected to live in fear, fear of breaking laws and regulations. The government employs people to invent new laws and new regulations to torment us all. Government is obviously frightened of us and everything. The attraction to government to belong to a supranational being that takes away the responsibility of issuing these laws and regulations is an attempt to offload some or all of this responsibility. Hence the slavish attitude by Cameron to the EU, he likes the offloading of the burden of having to discipline us, and can be seen as fighting red tape and officialdom when in reality is adding daily to our fear. The promises to set us free from this pernicious fear is a lie but will be forever masked by earnest posturing and rhetoric that sounds good but is worth less than a BBC soundbite.

  35. Mike Wilson
    Posted May 7, 2013 at 3:34 pm | Permalink

    ‘A new generation of potential homeowners cannot get mortgages ….’

    I am sorry Mr. Redwood, that cannot go unchallenged.

    What you should have written was; ‘A new generation of potential homeowners have been priced out of the housing market by successive Conservative and Labour governments allowing the banks to lend indiscriminately into the housing market – forcing house prices up to ludicrous levels.’

    A bank holiday, yesterday morning I watched the dreadful Homes Under the Hammer. An elderly, baby boomer couple seemed to have nearly half a million pounds at their disposal – so they bought a tiny 3 bed, Victorian semi in Hampton (near Kempton Park racecourse, at the end of the M3). They paid £440k for it. Spent £45k on it. It was valued at £600k!! when they had finished. Well over ONE HUNDRED THOUSAND POUNDS PROFIT for simply buying a property, paying builders to do it up and selling it. They, it seemed, ‘worked very hard’ instructing the builder and choosing the kitchen and bathrooms etc.

    It was described as a lovely, family home. This was no palace. A small, 3 bed semi detached property. HOW MUCH MONEY would someone have to earn, a young couple with young children, to afford a property like that? £150k a year I would have thought – and that is at 300 year low interest rates.

    Following the de-regulation of mortgage credit by the Tories in the 1980s (house price boom and bust, thank you for that) and Gordon Brown’s insane credit boom – THE NEXT GENERATION ARE COMPLETELY PRICED OUT OF THE HOUSING MARKET.

    When are politicians going to wake up, admit their failings and do something about it? Your party’s insane policy is to use public money to ensnare even more gullible young people into a housing market which, as sure as night follows day, must, one day, return to a sane level of affordability in relation to salary.

    As it is, for some young person on the average 25k salary, a 3 bed semi detached Victorian cottage in Hampton might just as well be a country mansion for all the chance they have of ever owning one.

    • Anthem
      Posted May 7, 2013 at 6:51 pm | Permalink

      Here in Manchester you can get a decent 3 bed semi for £80k. I believe there’s one not too far from me for £60k. Elderly woman owned it so might need a bit spending on it.

      People aren’t necessarily priced out although it is tough. They perhaps just have to lower their expectations or increase their income.


      When are politicians going to wake up, admit their failings and do something about it?

      Doesn’t apply so much in this case. People over-committing with their borrowing, believing that house prices would go up and up and up forever are just as much to blame for the current predicament as they have now locked themselves in a negative equity case.

      Much of the complaint in this comment section is about over-regulation.

      By saying “What are the government going to do about it?” you’re asking for yet more.

      No thanks.

      • Mike Wilson
        Posted May 8, 2013 at 7:36 am | Permalink

        Whilst agreeing in general with the principle of ‘no thanks’ to government regulation – one of the few areas where we do actually need regulation is banking.

        Left to their own devices (legally able to create money out of thin air and lend it), banks will soon enslave everyone in massive levels of debt. Look at how many people now have unrepayable mortgages.

      • lifelogic
        Posted May 8, 2013 at 9:28 pm | Permalink

        “Here in Manchester you can get a decent 3 bed semi for £80k” – so why do we have to pay all those second rate BBC lefties in Salford up to £450K PA plus pensions?

    • alan jutson
      Posted May 8, 2013 at 8:46 am | Permalink


      Agree the latest Government initiative to maintain high house prices seems daft, but then countless Mums and Dads who have given their children tens of thousands for a house deposit has had the same effect over the years.

      The Homes under the Hammer programme you outline does not tell the full story.
      Many who purchase property in this manner, make next to nothing at all when all expenses are taken into account.
      Doing up a property is usually very much more expensive than the original calculation, as most people do not cost in their own or in some cases families time spent on the project, and if they choose not to live in it, but sell it, then there is 40% tax to pay on the so called profit after all other expenses and interest.
      If it was such a cast iron way of making money, many more would do it. !

      Having said that, if people wish to speculate/risk their money on any sort of project whats the problem, after all its the end user who pays, as in so many other purchases, and that is simply down to choice.

      The real problem is the amount of stamp duty and other costs which are all part of the house purchase system, which limits the flexibility of any house move for people.

      £25,000 tax, plus agents fees to sell your original, plus solicitors fees just to purchase a £500,000 house, then add 20% Vat on any improvements, carpets, furniture, decoration, you wish to make.
      Thus in real terms you need £50,000 just to move if you live anywhere in or near to London, and that is before the valuation difference is included.

      I would agree yougsters have a difficult time getting on the ladder, but what is even worse is to encourage them to get into debt for more than they can really afford in order to do so.
      The old building society mantra of saving for a couple of years, and having a sensible multiple on earnings of years past seemed sensible to me.

      Very High lending multiples caused high house prices in my view.
      The Government have climbed on the bandwagon to gain tax revenue.

  36. Denis Cooper
    Posted May 7, 2013 at 3:50 pm | Permalink


    “Lord Lawson: Nick Clegg talking ‘poppycock’ about the EU”

    Quelle surprise!

  37. Peter
    Posted May 7, 2013 at 4:13 pm | Permalink

    Very much agree with most of this John. When I got a mortgage last year the pointless red tape was absolutely mind numbing. The coalition could have freed up business and individuals by just cutting a lot of this altogether. But they missed their chance.

    You are right too about a lot of the bogus “conservation” laws that we are burdened with too. Why should householders have to play host to bats and newts they don’t want? Whose property is it anyway?

    Only thing I would question is whether more credit now would help the economy as you hope. I suspect if bubble activities were allowed to wind down first, lending would pick up again as it became clearer which individuals and businesses were solvent and, where applicable, had viable business plans.

    • lifelogic
      Posted May 7, 2013 at 8:47 pm | Permalink

      More credit for the well run and productive sector would hugely help the recovery. As would firing far more of the unproductive sector.

  38. Richard1
    Posted May 7, 2013 at 5:33 pm | Permalink

    According to what I have seen and heard, banks have no interest in lending, especially against property in the form of traditional mortgages. Also they have no interest in new deposits, even of quite large amounts. I suppose they wouldn’t have when the cost of funds in the ‘market’ is artificially low and they are under pressure to reduce balance sheets and target artificial measures of capital adequacy. It is difficult to exaggerate how messed up the banking sector now is by QE and related policies.

    I also read that the number of bankruptcies is running at 1/3 the level of the beginning of the last recovery in 1993. Zombie companies are being kept alive by zombie banks, just like in Japan. Only radical supply side measures, tax cuts, an end to QE and other subsidies can bring recovery.

  39. Jon
    Posted May 7, 2013 at 6:42 pm | Permalink

    Money Laundering regulations have cost many billions over the years. It would have been better had they just asked the financial companies to give a fraction of that to the police to fund a ML department than spend this amount on it.

    Over the last 20 years the authorities have worked to make independent financial advice beyond the reach of the low, average and moderate earner. Something they used to have access to. I see that to try and counter this massive deficit they brought in the Money Advice Service which is unregulated. The boss of MAS has made it clear that they will pursue a policy of giving unregulated advice upto the limit of the law. So now we have a situation where by advice to the 90% of the population will be unregulated because the regulated advice is too expensive now.

    The daft mess was warned of long ago. They need to admit just like an alcoholic that they have a problem with too much regulation and its perverted the whole set up. It hasn’t achieved what they wanted.

  40. John
    Posted May 7, 2013 at 7:11 pm | Permalink

    I very much am having this problem. I am trying to purchase a flat from a motivated seller using a first-time mortgage. The deposit is not the smallest the lender will offer, I am borrowing well under my limit, and have been in work consistently for nearly 20 years. The lender jumped at the chance to get me signed up last October but ever since then, they and the conveyancer have been stalling at every step of the way.

    Their determination to create and exaggerate reasons for delaying the process is just ridiculous. It does seem consistent with the idea of getting signatures on loan agreements to serve demands to “keep lending”, whilst also keeping their capital back to help repair their reserve balances.

    I now expect the sale to fall through any minute now as the seller pulls out. I will face a battle with the lender to recover all the fees I have paid them and the conveyancer to date (will probably need to sue), and to pull out of all other dealings with the lender, and I’ll have to move house, since I am presently renting the flat.

    It’s a nightmare. Even my home-owning friends have stopped being smug about it and are now saying “wtf?”.

  41. David George
    Posted May 7, 2013 at 7:51 pm | Permalink

    7th May.

    Dear John Redwood,

    I agree!

    Friends have just told us of their problems concerning a worthwhile improvement at Dungeness, which is being held up by the local conservation officer and others wanting not only that existing bird boxes on a property should be maintained but that they should be sited on North facing walls, no matter what the birds think.

    The bureaucracy and Conservative Government increasing red tape in this country is stifling all innovation, growth and improvement.

    There is no hope for this country if the Conservative party does not change radically or possibly its leader! OR we all vote UKIP —- which I did at the recent election here in Reigate where our MP appears to be sleeping !! or sleep walking into losing his seat.

    Having high lighted this problem, will you let us know what you, as an MP are going to do about it? Then we have something to support.


    David George

  42. Jon
    Posted May 7, 2013 at 9:50 pm | Permalink

    Somewhere several weeks ago I read that they had upped the difficulty to get an advice diploma by a third. Knowledge was never much of a problem relatively, a rogue never bothered about what was right 30 years ago and won’t now. It just makes it more difficult and more expensive to the majority.

    Its all a bit stupid. Previously when you were a minister we had a savings and investment economy the envy of most of the world. Part of that was down to cross subsidy from the wealthy to the poor when it came to the cost of advice which was freely available to all. Charges for it were paid upfront by the institutions and taken back in small amounts over decades. The authorities disliked the cross subsidy and they disliked the ability to factorise, to spread the cost over many years. They favoured the way the law and accounting industry did it, pay upfront in cash but only if you can afford it.

    The result is as we are heading into the aged population era savings are perhaps a third of what they would have been projected to be back then. The majority of the population only have access to unregulated advice because of the cost of regulated advice. The investment that another trillion or two thats been lost would have funded the FTSE requirement for loans and allowed the SME’s what they need now, loans from the banks. Loans that they are giving to the large CAPs.

    I don’t have the measure of the intricate complexities of all economic factors but the authorities have messed up year on year here. Regulators end up leading the industry yet they take no account of the wider effect of their actions or how it affects the economy. They are not the people to lead an industry, their remit is too narrow and insular. I saw that a bureaucrat from the EU is considering banning trade with Bangladesh. They are too small minded.

  43. ikh
    Posted May 8, 2013 at 2:27 am | Permalink


    I agree completely that there is far too much bureaucracy. Sadly, the Tory
    party promised to dramatically cut it. They have not.

    I also agree that the banks are using bureaucracy, deliberately, to make
    borrowing more difficult. Yes, they are reluctant to lend.

    The reason they are reluctant lend is that their balance sheets are shot full
    of holes. This has been made worse by the changes in regulations by the
    Government and as a result of Basel III.

    The key issue is ABS’s ( Asset backed Securities ). Prior to the meltdown in
    Autumn 2008, ABS’s were on bank balance sheets as cash. However, they were
    only ever traded OTC ( Over The Counter ) and nobody had checked if they
    could be independently valued. When the crunch came, the banks realised that they could not be valued, and that caused the inter-bank lending crisis.

    Since then, changes in regulation, far from making things better, have made things worse. In particular, the new rules covering counter party risk much more difficult to trade because now, a buyer has to monitor and measure the quantity of debt on an ABS against the original asset owner. I.e. the bank that originally owned as asset prior to it being securitised.

    The ABS market at 2008 prices was worth more than 60 Trillion dollars. 50% of this was traded in London. That is a big hole in bank balance sheets. They are still there as assets but are totally illiquid.

    The Govt can not do anything to make the old ABS contracts tradable. What they need to do is approve a standard contract for, say, securitising Mortgages. So that they can be traded on an exchange or trading platform. Thus allowing new MBS’s ( Mortgage Backed Securities ) to be independently valued. The Govt would also need to exempt these new contracts from the counter party risk regulations and make them exempt from stamp duty ( other wise stamp duty would effectively be a “Tobin Tax” ).

    This would make it profitable for the banks to lend a lot more on mortgages and at the same time would help repair their balance sheets by increasing the ratio of liquid assets to illiquid.

    This would do away with the need for Q.E. and would grow the money supply, particularly for mortgages. Once a new and healthy market in MBS’s has been established, this would encourage the banks to re-package their legacy ABS’s into tradeable instruments. Probably without any need for further Govt intervention.

    The Treasury would be able to control the market and prevent another bubble occurring by monitoring the money supply M4 and if overheating was looking likely, they could increase the reserve requirement for the asset class that was over heating. This is something that the Chinese Govt use to good effect.

    This, I believe, would lead to a sustainable recovery in time for the 2015
    election, if done promptly. If you do not fix the banks balance sheets, then I
    do not believe we will see anything other than a weak recovery any time soon.
    Like the next ten years.


    • Mike Wilson
      Posted May 8, 2013 at 10:55 am | Permalink

      Why on earth do we need a market in securitising mortgages?

      What on earth is wrong with a lender taking deposits, lending money to borrowers by way of mortgages, collecting the interest, paying interest to depositors and making a profit?

      Why do mortgages have to be parcelled up and sold and re-sold. It is a racket designed to allow banks to lend the same money over and over again.

      The FACT is – the housing market, by any measure you care to use, is MASSIVELY over-valued and, therefore, by definition, all Asset Backed Securities are intrinsically worth a lot less than was paid for them.

    • Mark
      Posted May 8, 2013 at 12:59 pm | Permalink

      It’s hard to see how devices designed to increase bank gearing are going to help. Instead, there needs to be a plan on reducing the house price/income multiple, and an effort to reduce the numbers of high risk mortgages on banks’ books by encouraging early repayment.

      It is unfortunate that although we have had 5 years of low interest rates, which would have allowed mortgage payments to have covered repayments while being no more onerous than they were before interest rates collapsed, that nothing has been done to promote this. At just 3% per year (about half the reduction in base rate), previously issued loans would be lower by 15% by now, reducing risks for banks.

      It might have been still better to have pursued a policy of positive real interest rates that provide an incentive to pay back loans, and not to bid up house prices. That was what happened in the 1990s to defuse the bubble.

      The Bank of England is quite clear: banks are over-valuing mortgage assets, and over-indulging in forbearance. Fresh mortgage lending needs to be on a much more prudent basis. Lower house prices would provide that. Osborne’s schemes for 95% mortgages and lending to BTL landlords via Funding for Lending are the antithesis of the right medicine. They simply create the next banking crisis.

  44. Lindsay McDougall
    Posted May 8, 2013 at 4:40 pm | Permalink

    Banks? Don’t regulate them. Don’t bail them out. Do put RBS and Lloyds back in the private sector. Do encourage new entrants by letting banks be profitable. And do back them in dealing with extortionate demands in the American courts relating to LIBOR rate fixing. The total amount of the various LIBOR related suits in the US exceeds the total revenue of the British banks in the States.

    And for encore, do tell the EU and the IMF to take a running jump.

  45. John Eustace
    Posted May 9, 2013 at 4:53 pm | Permalink

    I agree with all of that but even if it is improved I’m not sure I would ever again trust a bank enough to give them the ability to shut me down by calling in their loan arbitrarily.

    Loss of trust is very corrosive and will take a very long time to fix. Until then I will be financing things purely from retained profits.

  • About John Redwood

    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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