Following in the PM’s footsteps

Perhaps I’m suffering from Pre-General Election Stress Disorder Syndrome (PGESDS) or it may be symptomatic of the fact that politicians make poor role models but last night I had a nightmare in which Peter Mandelson overhears Gordon Brown on the telephone.

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“Hello, is that Ocean Finance”, says the PM, “I’m wondering if you could tide me over with a loan until May 6?”

Lord Mandelson is gob smacked. “Gosh Gordon, you can’t do that”, he says. “People will think you’re spending your afternoons watching telly, and that you didn’t check out the FSA’s comparative table’s website for the best rates.

“Why don’t you do what I did a while back”? he suggests. “I borrowed a bit from Geoffrey Whatsit and got the rest from the Britannia Building Society. It worked a treat – well at least for a while – and you’re not talking long term here, are you?.”

Gordon attempts a friendly smile but somehow or another he only manages an eerie grin. “Thanks Mandy”, he says, casting an eye some five miles east of Lord Mandelson’s left shoulder, “I appreciate the advice but these days it’s the government that bails out the banks and not the other way round”.

“Gosh yes”, says Mandy who likes to think of himself as a Renaissance man, though not of course a Machiavelli, “Lloyds Banking Group is hardly the Medici but that’s the price of progress I guess.”

The dream ends with Mandelson casting a glance at the PM’s laptop. “By the way Gordon”, he asks, “what’s that you’re working on”?

“Oh”, says the PM without a hint of irony. “It’s a speech about the economy being in a safe pair of hands”.

Of course the PM isn’t a typical Ocean Finance customer – he just borrows and spends the taxpayers’ money allegedly in the interests of the state, the downside being that if things go wrong, he might have to resign (unlikely) or not be re-elected (chance would be a fine thing).

He certainly wouldn’t lose his home and indeed, if he is anything like his predecessor, once out of office he can make millions, though Tony Blair “as a cab for hire” may already have grabbed all the best fares, leaving Brown with the poor pickings.

At least with Messrs Byers, Hoon and Hewitt so discredited, he won’t have to scrabble for the crumbs at the bottom end of the influencing those in power market but as role models go they’re all worse than footballers.

True most of them haven’t played away from home like John Prescott but generally speaking it’s anything for a quick buck and with a spend now pay later mentality, is it any wonder that new research from unbiased.co.uk shows that we Brits are no longer trying to repair our credit but instead are borrowing 62p for every pound that we save.

Expressed another way in 2009 we borrowed £28.2bn worth of non-mortgage debt.  That’s a stark contrast to the £39.3 bn which was repaid during 2008.  The recession hasn’t exactly kick-started a savings culture. In fact new savings levels almost halved during 2009, with only £71.6bn saved, compared with a massive £113.4bn in 2008.

Those figures are in part explained by the low interest rate regime. It’s not just that people aren’t saving because rates are so low. The inflow of funds is also influenced by savers letting their interest accrue and with so little earned, they’re not adding much to the mortgage pot.

Thus saving for a deposit is that much harder, mortgages are that much more difficult to obtain and home ownership is in decline.