27 April 2004

Neither a borrower . . . .

A dark secret hung over my marriage many years ago. Grandfather was never to find out that we were contemplating a mortgage. Young people, he argued, should save as much as possible, and only when they had the money 'gathered' (a nice old-fashioned idea) should they buy a house of their own.

Mortgages were scarce – 100 percent mortgages unknown – and we had to take out an endowment policy as part of the deal. This provided a measure of moral compensation. We were saving as well as borrowing you see and that might soften Grandfather's opinion were he ever to find out.

How different it is today. Astronomical mortgages are a universal necessity and bear little relation to earnings. Credit – on any luxury your heart may desire – is instant.

Make a few phone calls and it's possible to raise £50,000 – and get a DVD thrown in. There would of course be the small matter of paying about £85,000 back over the next 20 years.

By a curious piece of economic reasoning high street spending is the very stuff of a buoyant economy – even though it may be fuelled by massive ask-no-questions credit.

And still we are egged on to borrow more and more by adverts which show how sad debt-ridden families can have all their troubles dissolved into one big sum on the dubious promise that repayments will reduce. And there could even be a substantial cash-back for that 'dream holiday' thereby increasing the very debt that was making everybody so miserable in the first place.

The Citizen's Advice Bureaux have accumulated evidence that these so-called consolidated loans can often increase your interest. The average person has personal debts of around £3,500 and a quarter of the nation is struggling to keep up with repayments.

If the basic rate should increase, say, from 4 to 5 per cent the cost of borrowing would actually increase by 25 per cent.

Twelve per cent of people with credit and store cards repay only the minimum or less each month – which means they are paying exorbitant rates of interest simply to tread water. Credit card and unsecured personal loan debt totals £150 billion, with the Consumer Credit Counselling Service reporting that its client’s average personal debt is £24,000. Debt collectors are trying to retrieve over £5 billion.

Perhaps Grandfather had a point after all.

13 April 2004

Smoking doom and gloom

The anti-smoking lobby seems to be on a roll.

There is an argument of course that individuals should have the freedom of choice. If smoking is both harmful and addictive, so be it. Risk is something we live with. But we wouldn't apply that argument to a whole range of other harmful drugs, all of them illegal, but some of which are actually less addictive than nicotine.

The unique problem with smoking is that it pollutes the immediate surroundings where those who have to breathe in the carcinogenic pollutant have no escape. So-called 'smoke free areas' in restaurants and pubs do not really work – no table separation, or no air purifying technology, is actually effective. Where there is smoking there is the stink that goes with it. The Republic of Ireland not only acknowledged the problem but also grasped it and then took action.

Watch this space. Will it produce health gains? Can it be effectively policed?

Initial indications are that resistance is negligible. As to health gains, evidence published in the wake of the Republic's action by the British Medical Association (BMA) and others is illuminating. The most significant perhaps is that a six-month ban in the US town of Helena (population 68,000) on smoking in public places led to a 40% fall in heart attack cases. The study was carried out between June and November 2002. The ban was then overturned in December 2002!

In New Zealand, researchers found that adults, who have never smoked but who live with smokers, have a 15% higher risk of death within three years than those living in a smoke-free household. The estimate is based on mortality figures using census data.

The American BMC academic journal has published findings on the effect of second-hand smoke on the healing of wounds. Exposure to smoke not only influences the speed at which cells heal but also increases levels of scarring.

The BMA believes that second-hand smoke kills at least 1,000 people in the UK every year.

'Yet despite their promises to protect workers from tobacco smoke,' said BMC expert Dr Vivian Nathanson, 'the UK government continues to rely on failed voluntary measures that have the support of the tobacco industry.'

She calls for 'courage and leadership' by introducing legislation for smoke-free public places.

'If Ireland can do it,' she said, 'why not us?'

A good question.

06 April 2004

Confession

I was number four in a long queue of cars stuck behind a slow moving vehicle of gargantuan proportions. When at last there was a decent bit of straight road the first car dashed for freedom, then the second, then the third. Now it was my turn, but oncoming traffic was on the horizon, so a bit of extra welly was needed to complete the manoeuvre.

Unfortunately a posse of PSNI was hidden behind some trees and in the fullness of time I received the dreaded letter.

It observed that on camera evidence I had exceeded the speed limit by a figure I am too ashamed to disclose and that I would be justly punished.

The options were to pay £60 and accept three penalty points or throw myself on the mercy of the court. A speech from the dock held little attraction so I decided on option one.

Many weeks passed and there was no sign of the return of my licence. Had it been lost? If so, might I be held in contempt? I rang the court as a sensible precaution.

The young lady who took the call was non-judgemental, even sympathetic. If I needed my licence back sooner she would try to process my case earlier. She explained there was a twelve-week backlog.

Wait a minute, I thought afterwards. If processing a cheque and endorsing a licence takes only a minute, and a whole team of hard-working processors has a twelve-week backlog, the amount of money coming in must be astronomical. And it surely is. But where does it go? What does it buy? Yes, you've guessed it. There will be more and more speed traps.

But I have to say the thing works. I am not a bitter man. I am a much-changed man – patient, forgiving, calm, deeply contrite. I cannot risk being nabbed a second time. My driving has improved immeasurably. I now obey both the spirit and the letter of every single boring motoring law.

Speed is indeed a killer and the almost daily pictures of mangled steel bring the message home. Or at least they should, but in fact they don't, and if fines and penalty points are required to change a whole speeding culture, then so be it.

(Post script. For sale. Two-litre sports saloon. Many extras. One careful owner.)