This email was sent to Money Box subscribers on 31 October 2008

Dear listener (as usual my wittering is unasterisked, programme items are asterisked),

“I don’t know much about finance”, said comedian Jo Brand to the guests at the Association of British Insurers Financial Media Awards on Thursday night, “so I’m in good company.” Oh how we laughed. But did she mean because it was an insurance industry do? Or because the ballroom at the Riverbank Plaza hotel on the Albert Embankment was filled mainly with financial journalists? We shall never know. But Jo was very funny. Even if she did have to read collateralised debt obligations off a piece of paper! As indeed was Michael Portillo, ex-Tory Cabinet Minister and MP and now a political pundit, who hosted it.

I was there because – blush, blush – Money Box once more won the award as Financial Programme or Broadcaster of the Year. Soon – I hope – you will be able to admire a picture on our website of me and senior producer Lesley McAlpine collecting the award. Declan Curry (now of BBC2’s Working Lunch) and I were the two unsuccessful shortlisted broadcasters, pipped to the glass trophy by the programme itself. Which makes it the third time in four years Money Box has won.

“What is the subtle difference between you and Money Box?” one insurance industry luminary asked me. “A talented and dedicated team of people” I replied. Ahhh. Or maybe yuk!

So on with this week.

*** It’s hard not to do something on house prices now the Nationwide survey shows that they have been falling for 12 consecutive months. A year ago the average Nationwide price (I say that because there are at least six different house price indexes all giving different amounts) was £186,044. Now it is £158,872. A fall of £27,172 or 14.6%. But have they dropped far enough for young hopefuls to buy their first home? And will falling interest rates help them borrow the money to do so? We will discuss.

*** Few government agencies have had such a bad press over more than a decade as the Child Support Agency. Since 1993 it has had the job of assessing and collecting maintenance payments, initially from every absent parent, then just from those on means-tested benefits. Now it is to be renamed, there will be no compulsion to use it, and its two failing computer systems are to be replaced – by a third computer system. The chief executive tells us why this time it will be different.

*** “With profits” is one of those comforting but meaningless phrases beloved of the financial services industry. “With profits” bonds, endowments, and pensions are supposed to smooth the returns that a stock market investment would produce. In good times some of the returns are held back so they can be paid out in bad times. It’s like a cable car ride across the peaks and valleys of the FTSE mountain (a phrase I confess to stealing). But recently three insurers have said the volatility of the stock market is such that they need to penalise people who leave with profits funds early and do not wait for things to improve. They will have had smoothing up but not down. Not an argument that impresses many listeners.

*** In three weeks or so the way we buy financial products may change forever. The Financial Services Authority will publish its Retail Distribution Review on 25 November. Rumours are that it will be radical and take a firm line on commission – which many now see as creating a conflict of interest between the financial adviser and the customer. We shall see. But as a taster we will be running a debate between supporters and opponents of commission.

*** And that’s about it. We may just squeeze in a mention of the appallingly complex rules for getting your paper tax return in on time. Although the deadline is today, 31 October, a House of Lords ruling some years ago means that the Revenue has to accept them without a fine if they are delivered by hand and in the post box when staff arrive for work on Tuesday 4 November. But if you post the form it had to arrive at HMRC today, Friday. If we don’t squeeze this item in you can read a sort of explanation of the impenetrable rules here www.hmrc.gov.uk/sa/sa-penalties.htm

Money Box is broadcast on Saturday at noon, repeated Sunday at nine. You can listen to all the items on any programme through our website. And all Money Box programmes are available on a podcast you can download. But podcasts are only on the website for seven days. So it is better to subscribe and never miss an episode. And if you want to read what was said we publish a transcript which is available forever on our website.

Best wishes,

 

Paul

PS Don’t forget the programme taster on BBC Breakfast between quarter to nine and nine o’clock. If you miss it, you can watch it on the web until Wednesday after which it will be replaced by Samantha Washington’s midweek money headlines.

 


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