Crackdown On Irresponsible Lenders Say Lib Dems

The Liberal Democrat Treasury spokesman, Vince Cable, will push for a crackdown on irresponsible lenders this week as he launches a plan to tackle consumers' trillion-pound debt mountain.

Whilst Gordon Brown puts the finishing touches to his Budget, Cable will confront him to challenge the powerful banking sector or risk jeopardising economic stability.

'The government must improve banking regulation so that debt levels do not spiral out of control and consumers are clear on how much they have borrowed,' Cable said. 'Much of this problem has been caused by the government's complacency.'

The trillion pounds' worth of debt that consumers have generated through mortgages and credit cards are worth as much as an entire year's gross domestic product (GDP).

If lending is not brought under control, The Lib Dems believe that further rises in interest rates, or an external shock such as a further oil price spike, could result in a sharp slowdown as nervous borrowers opt to pay down some of their debts. With his 'action plan' being launched on Wednesday, Cable will also call for better financial education.

Barclays also fell victim to Cable’s onslaught as he accused them of failing to deliver value for money last week. With Barclays announcing record profits of £4.6 billion, Cable pointed out that their 'reward savers' accounts pays an interest rate 1.5 per cent lower than the Bank of England base rate. He urged the Office of Fair Trading to take a tougher approach to regulating banks.

Tesco Employs The Polish Workforce

Tesco, Britain's largest commercial employer, is bringing workers from Poland to work in its stores and drive lorries because it cannot fill vacancies.

The retailer, which holds an eighth of this country’s over all expenditure, confirmed that it had launched a trial at the start of the month with 70 staff shipped over from its stores in Poland.

A spokesman for the supermarket chain said 'We are not the only business to suffer from skills shortages. Unemployment is so low now that in some areas we are having difficulty filling vacancies - so we decided to carry out this trial.’

On union concerns about using foreign workers in British stores he added: 'It is not a huge number when you consider we employ about 250,000 people. We won't make any decisions until we see how this goes.'

Some Polish workers are driving delivery lorries to Tesco's stores across the UK, others are working at distribution centres and some are on the shop floor itself.

The national officer for retail union Usdaw, Pauline Foulkes, said 'a clear case' has been presented to Tesco that they should 'always seek to fill vacancies from the local workforce' and 'should only recruit from Poland as an absolutely last resort'.

Tesco created 16,000 jobs last year, partly as a result of its expansion of convenience-size stores. Usdaw and Tesco emphasised that the Polish workers who are working here are employed on the same terms and conditions as their UK employees.

Loan Rates Favour The Homebuyer In The Mortgage Market

Mortgage deals are looking attractive following a quiet period at the end of last year. But advisers are warning borrowers to watch out for hefty fees, which may make the deals less competitive.

Borrowers who switch out an expensive variable rate mortgage, typically 6.75 per cent, will almost always be quids in by picking up one of the bargain fixed-rate or discounted offers flooding the market, so long as they are not tied in to their lender’s loan by a hefty early redemption penalty.

Simon Tyler of London broker Chase de Vere Mortgage Management says: ‘The expected price war has started in earnest and both fixed and discounted deals have been cut by many lenders. This time last year the base rate was 0.75 percentage points lower at 4 per cent, yet fixed-rate mortgages were priced at about the same level as they are today, which shows what good value they are relative to the base rate and how hungry lenders are for business.’

Ray Boulger of London broker Charcol says discounted variable and tracker rates are unlikely to get any better than they are now in terms of the margin between the interest rate and base rates, but he predicts fixed rates will get even cheaper. He says: ‘If you are thinking about a tracker or a discounted variable rate, there is no point waiting.’

Childcare Rates Soar

The cost of most types of childcare underwent a rapid growth spurt last year, rising by an inflation-busting 5 per cent for nurseries and childminders.

The survey, by childcare charity the Daycare Trust, found that parents using nurseries in London and the south east suffered the worst rises. The weekly cost of a nursery for a child under two in central London rose by 17 per cent to £197 a week. In Scotland and Wales, parents pay about £120 a week.

Parents in the West Midlands pay the lowest nursery bills at just £114 a week and parents in the north west pay the lowest childminder costs at £106 a week. The most expensive region for childminders is the south east, at £157 a week.

The good news for families employing nannies is that pay rates have stabilised and are even falling in some areas. In London, a live-in nanny’s wages fell 5 per cent from £308 to £292 a week, according to the latest figures from payroll service Nannytax.

Employing a nanny in central London is still painfully expensive, however. A daily nanny earns £27,000 a year in the city, on top of which parents must pay £2,850 in employer’s National Insurance. This means one working parent must earn a gross salary of £41,755 just to meet the nanny’s wages.