Todays official figures show levels of unemployment last enjoyed under Margaret Thatcher’s Tory Government of the Eighties.

Youth unemployment is at its highest level for 19 years.
Womens unemployment is at its highest level for over 23 years.
The public sector is traditionally a large employer of both these groups.
The Governments argument that the private sector creating new jobs will prop up the public sector has proven to be widely inaccurate.
David Miliband pointed out that for every two jobs lost in the public sector only one was being created in the private sector.

The result is that the economy is in a downward spiral and the public sector job cuts are fuelling the maelstrom.
Maybe our public schools are failing as well, because it is obvious that neither David Cameron or the Chancellor bloke, whose name Insurance Blog can’t remember, have even the basic skills in macro economics!

When there was a global depression in the USA in the late 1920′s, FD Rooseveldt’s ‘New Deal’ of public works and public sector employment, brought America out of the downward spiral and introduced infrastructure which gave the post war US a massive competitive advantage.
President Obama has finally realised that cuts don’t work and has announced a massive Federal investment in public works. Alex Salmond, Leader of the Scottish Parliament today said that unemployment was down in Scotland during the last three months due to a large public building program.

David Cameron is carrying on making people and public sector workers unemployed.

If you work in the Public Sector there is still time to get unemployment insurance and income protection however you must hurry.

Income Protection Insurance is available to eveyone in full time employment. As long as you have not been informed by your employer that your job is at risk, you can still take out an income protection policy.

Act quickly and you can protect your mortgage, rent and other regular payments such as council tax, utilities bills, finance agreements and even gym memberships and satellite/cable tv bills. With low monthly payments you have a choice of cover between accident, sickness and unemployment, accident and sickness or unemployment only, with 12 or 18 month benefit options.

Related posts:

1. Public Sector Employees Facing Redundancy Should Consider Unemployment Insurance
2. UK Unemployment hits record heights
3. Unemployment to hit North of UK First warns Specialist Insurer

Listening to these patronising Chief Constables talking about how they were going to go after these criminals  ‘after the event’ made Insurance blog feel sick.

Countless stories appeared on the TV news of how business people saw the Police stand by and watch doing nothing to prevent their livelyhoods being trashed by mindless kids.

From recent dealings with the Police I am disgsuted that their attitude to everything is that Insurance is there to pick up the bill for their professional negligence.

Well it isn’t!

Insurance Blog urges all UK Insurance companies to refuse to pay for riot damage where the Police stood around idly and watched a bunch of kids run riot.

Under UK Law if the Police are not able to deal with a situation the risk becomes Fundamental and is the responsibility of inept UK coalition Government, and not covered by any insurance policy. The taxpayer will then be footed with the bill for damage that could have been mitigated.

Insurance Blog predicted that the minority conservative Government would cause riots on the streets of Britain and we were right. If the cuts continue there is a lot worse to come!

Don’t rely on the Police saving your home and property and if the trouble gets any worse, they just stand around filming, and I’d read that fineprint of that policy very carefully!

Related posts:

1. New Year Recession Fears
2. UK Unemployment hits record heights
3. UK Government CON DEM The FSA Insurance Regulator

The guys over at the tradesman insurance quotes comparison site tradesman-insurance.com sent us it!

Watch!

Insurance Blog – keeping up the crusade against rip off banks that we are all paying for now in higher taxes and soon to be higher interest rates!

Someone should tell Cameron that he could get rid of the so called deficit if he sold the Banks that this Country owns!
However it suits his political purposes to line the pockets of his banking prep school chummies with Government money is the form of treasury bonds………

Related posts:

1. New Year Recession Fears
2. UK Unemployment hits record heights
3. UK Government CON DEM The FSA Insurance Regulator

If you haven’t taken out unemployment insurance yet, there may still be a little time, although given latest figures you will have to move as fast as the postman with the redundancy notices, as UK Unemployment hit record heights.

Here’s the facts of the state of Britains Economy

The employment rate for those aged from 16 to 64 for the three months to November 2010 was 70.4 per cent, down 0.3 on the quarter.

The number of people in employment aged 16 and over fell by 69,000 on the quarter to reach 29.09 million.

The last time there were larger quarterly falls in the employment level and rate was in the three months to August 2009.

The number of people working full-time fell by 37,000 on the quarter to reach 21.16 million and the number of people working part-time fell by 32,000 to reach 7.93 million.

Part Time Working at all time high!

The number of employees and self-employed people who were working part-time because they could not find a full-time job increased by 26,000 on the quarter to reach 1.16 million, the highest figure since comparable records began in 1992.

The unemployment rate for the three months to November 2010 was 7.9 per cent, up 0.2 on the quarter.

The total number of unemployed people increased by 49,000 over the quarter to reach 2.50 million.

Male unemployment increased by 43,000 on the quarter to reach 1.48 million and female unemployment increased by 6,000 on the quarter to reach 1.02 million.

Youth Unemployment at record levels!

The unemployment rate for those aged from 16 to 24 increased by 1.0 on the quarter to reach 20.3 per cent, the highest figure since comparable records began in 1992.

The number of unemployed 16 to 24 year olds increased by 32,000 on the quarter to reach 951,000, the highest figure since comparable records began in 1992.

Redundancies on steady increase.
There were 157,000 redundancies in the three months to November 2010, up 14,000 on the quarter.

The number of people claiming Jobseeker’s Allowance (the claimant count) fell by 4,100 between November and December 2010 to reach 1.46 million, although the number of people claiming for up to six months increased by 7,200 to reach 960,300.

The total number of male claimants fell by 6,600 on the month to reach 1.02 million but the number of female claimants increased by 2,500 to reach 439,300.

The inactivity rate for those aged from 16 to 64 for the three months to November 2010 was 23.4 per cent, up 0.2 on the quarter.

The number of economically inactive people aged from 16 to 64 increased by 89,000 over the quarter to reach 9.37 million.

Early Retirement at Record levels !

The number of people who were economically inactive because they had taken retirement before reaching the age of sixty-five increased by 39,000 on the quarter to reach 1.56 million, the highest figure since comparable records began in 1993.

Wages Stay the Same!
The earnings annual growth rate for total pay (including bonuses) was 2.1 per cent for the three months to November 2010, unchanged from the three months to October.

The earnings annual growth rate for regular pay (excluding bonuses) was 2.3 per cent for the three months to November 2010, unchanged from the three months to October.

The Oulook.

Very Bleak!  The current situation is comparable to the early Thatcher years and the axe has yet to fall on 600,000 public sector workers. The knock on effects to the high street of this contraction in money flow will damage small to medium sized businesses as demand inevitably drops. Further unemployment within the already contracted private sector is inevitable as orders dry up and the unemployemt queues will increase.

All sectors of the economy will suffer from this so called ‘double dip recession’ particularly high end products and high street businesses will suffer. Insurance will not have an easy time either! Already we are seeing once profitable sectors like shop insurance virtually disappear as a viable large market as the number of shops rapidly decreases. When was the last time you saw a high street travel agents or hardware store? The pattern is being repeated across all sectors of the UK Commercial Insurance market.

Coupled with this we are under immense inflationary pressures from energy prices and global food markets which inevitable, although foolishly, will lead to the Bank of England be foreced to politically raise Interest rates. After all, there are no more weapons in the economic arsenal.

Darwinian ConDemNation.

The future is blue and orange and civil commotion – If you are not a merchant banker, are you fit enough to survive?

Related posts:

1. New Year Recession Fears
2. Unemployment to hit North of UK First warns Specialist Insurer
3. Bank of England is Steady at the Helm with Sensible Interest Rate

If all the Economic pundits are to be believed, you would think that the economy was rosy! No chance of a the dreaded double dip recession now ……..

Hmm, what about the 600,000 job losses in the public sector that still have to be made this spring and will have to be paid for out of a shrinking GDP, rising wage demands from the private sector, fuels costs going through the roof and VAT at it’s highest ever 20%!

However you look at the current situation the immediate future does not look too bright!

Amongst all the coalition division and noise about quangos, cuts, student fees, interest rates and inflation, the UK Government has this week raised Insurance premium tax to 6%. With the cost of Insurance already at record highs as companies try to build up lost claims reserves, maybe they thought we’d not notice more indirect taxation!

The future doesn’t look too orange for Corporal Clegg and his Liberal lackies either who are currently enjoying their lowest popularity level for 30 years.

Meanwhile David Cameron is making noises about the housing sector while failing to enforce the necessary lending from the banks that would inject some momentum into a recovery, he has spoken out about plans to clamp down even further on mortgages in the name of responsible lending.

Tory Housing minister Grant Shapps has said that under the new  FSA’s Mortgage Market Review (MMR) proposals, he himself would have failed to get a mortgage.

Now Cameron has said that lenders have already gone too far in preventing ‘good risk’ buyers from getting mortgages.

The Prime Minister warned that the housing market was ‘stuck’ and would not improve until banks and building societies got back to ‘respectable’ lending.  Cameron said the reaction to the crash had now gone too far.

He said: “The pendulum has now swung too far the other way. If you are a single person, you are earning a decent salary, you go to the bank or building society, you are actually quite a good risk, they won’t give you 80% of the value, they won’t give you four times your salary.

“So we are working with them to try and say, of course we don’t want to see the unsustainable boom of the past, but we’ve got to get proper lending, respectable lending, going again.”

Cameron made it clear that he did not want to see a return to 120% mortgages and loans based on seven or eight times earnings.

He said: “We don’t want another housing boom where prices rise out of people’s reach, but the housing market is a key part of the economy. You need a housing market where people are able to sell and people are able to buy.”

Yeah and one where banks lend money! It wasn’t irresponsible lending to UK homeowners that caused the current recession, if this was the case then repossessions would not be at the levels they are! Moreover bad banking and buying toxic debt from the USA were the root cause. With the same people in control, these banks must be forced to lend to both homeowners and businesses alike if we are to see any real recovery in the housing and employment markets in the UK in 2011.

Related posts:

1. The effect of the Budget upon the UK Insurance market
2. Insurance Companies must be held to account for the Recession
3. UK Government CON DEM The FSA Insurance Regulator

The CPI fell by 0.2 per cent between June and July this year compared with no change over the same period a year ago. These 1-month changes are both within the normal range for a June to July period; since 1996, the monthly movement between these two months has varied between a fall of 0.8 per cent and an increase of 0.1 per cent.

Some myopic Internet financial analysts who have been arguing for a base rate increase for over a year are still crying foul……

“Inflation is a stealthy enemy for savers and when rates are low, it quietly erodes the spending power of a hard earned nest egg. Savers may have had a short respite from a marginal fall in inflation, but savings rates have hit a plateau and may be there for a while.

“The average one year fixed bond rate has fallen from 3.07% in January to only 2.54% today and the average five year fixed bond rate has fallen from 4.56% to 4.08% for the same period.

“The average instant access savings rate is still at rock bottom at a rate of only 0.74%. The only trigger for any improvement in savings rates may be a surprise increase in the Base rate by the Bank of England, but this is most likely not to happen soon.”

Stated a recent industry commentator,  who Insurance Blog thinks is living in cloud cuckoo land and who obviously has been sitting on his dwindling nest egg of savings, and foolishly thinks he will survive a double dip recession caused by an increase in Interest Rates!

However the Bank of England sensibly have other ideas, and quite rightly given the downward curve of inflationary pressures have decided to leave things as they are!

The Bank of England’s Monetary Policy Committee voted two weeks ago to maintain the official Bank Rate paid on commercial bank reserves at 0.5% and their decision now looks justified with inflation self balancing. The recent inflation has been artificial with rises in the RPI in areas such as fuel and power and food, although where there are alternative suppliers the markets have had to adjust to the temptation of putting prices up to pay for their past mistakes, and the UK Insurance Market is a typical example of this.

The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion. The Committee’s latest inflation and output projections will appear in the Inflation Report to published on Wednesday 11 August.

The minutes of the Bank’s meeting will be published at 9.30am tomorrow on Wednesday 18 August.

Related posts:

1. Alliance and Leicester slash fixed rate mortgages!
2. Green Shoots in the UK Economy and Markets?
3. Recession Latest – House Prices Rise?

On the face of it Insurance escapes fairly lightly with Insurance Premium Tax (IPT) raised for the first time in over ten years to 6% from 5%. 

 IPT is chargeable  on every insurance policy sold within the UK,  although Insurance is currently VAT exempt. 

This rise will harden the market with slightly raised premiums,  however it is suggested by many in the City that the percentage increase will mostly go un-noticed by the majority of the insurance buying public.  A spokesperson for specialist car insurance company Car Insurance TV said that ‘this increase in IPT will add just a few pounds to the cost of an average car insurance policy, however levels of competition will often see this absorbed by the Insurance Companies trying to win your business’.

A major impact upon the supply of Insurance and adding further inflationary pressures, will be the raise in the basic level of VAT from 17.5% to 20%.

 The rise in VAT will add additional costs to the supply of insurance. Most distributors of Insurance such as Insurance Brokers are UK VAT exempt and therefore unlike VAT registered businesses, cannot claim back their VAT expenditure against their VAT income.

This will mean that all the additional costs of running the business such as bought in services like marketing and IT support, are likely to be passed onto the consumer in higher premiums.

Another major problem and potentially the biggest ticking timebomb for the UK Insurance market, will be the inevitable lack of demand for financial services products , as unemployment rises and demand falls, with cuts to public sector jobs and welfare across the board. This will naturally lead to further rationalisation of the market with the expected loss of up to 60,000 financial services jobs…. in addition to the thousands destined to go from the FSA!

Insurance Blog is of the opinion that  if the ill thought out measures announced in the recent UK budget and due to be delivered this Winter, don’t lead us into a double dip recession… then nothing will!

Related posts:

1. UK Government CON DEM The FSA Insurance Regulator
2. UK Housing Market Home Insurance Mini Boom
3. Insurance Companies must be held to account for the Recession

In a speech to those lovable Bankers and Merchants (Merchant Bankers having a Ruby to you and me Cockneys!) at the annual Lord Mayor of London’s dinner at the Mansion House last night,  Champagne swaffing hatchet man George Osborne announced that the FSA will cease to exist in it’s current form by 2012.

Osborne said,

“What we are proposing is a new system of regulation that learns the lessons of the greatest banking crisis in our lifetime. I can confirm that the Government will abolish the tripartite regime, and the Financial Services Authority will cease to exist in its current form.

“We will create a new prudential regulator, which will operate as a subsidiary of the Bank of England. It will carry out the prudential regulation of financial firms, including banks, investment banks, building societies and insurance companies.”

The news will probably be met with cries of  “hurrah” from Insurance Brokers up and down the Country, who have for five years been complaining about the unfair business practices demanded by the bureaucrats and exorbitant costs of Fees.

Without doubt, The UK Insurance market has shrunk since the FSA came to power due partly to to restrictions and barriers to entry to the market, imposed by the FSA.

What prudential authority is created to replace it remains to be seen. ……

It’s all a little deja vu and while we resent paying our FSA fees as much as the next person involved in UK Insurance, one cannot but think, haven’t we been here before? and before…….

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1. New look Insurance blog for a New Look Parliament
2. UK Insurance Regulation Is Changing The Face Of The Market
3. Insurance Companies buy more UK Government Debt

In a week that’s seen inflation, mortgage lending, and economic growth indicators higher than expectations, it’s almost possible to believe that we are coming out of recession… until you look around and speak to people the length and breadth of the country……

So what does the future hold for insurance under the new administration?

In a month where the UK Insurance regulator, the Financial Services Authority (‘the FSA’) have continued to show the results of its enforcement action through a series of arrests and bans for regulatory failings such as insider dealing, the FSA have given further insight into their ‘new’ intensive supervision culture and how it will be applied in practice in a series of press releases.

The problem is…. The majority party in the unholy alliance squatting in Whitehall has got it in big time for the FSA and nobody in Parliament is really listening to the success stories coming out of Canary Wharf. In fact it’s even part of the Conservative Manifesto to replace it….
Hmm….. probably due to intensive Insurance Brokers Lobbying!

Now that Cameron and Osborne are in power though the question is….Replace it with What? Remember GISC and all the other predecessors.

The reality of the task and the size of the behemoth would take an eternity to dismantle and can only really be chunked away at. Which is precisely what the Tories intend to do with the FSA.
Little by little they will disarm it and shift the jobs to civil servants and away from the ex-insurance company employees, who all landed soft jobs there at it’s creation.
This will help to placate Corporal Clegg whose Party is firmly against the destruction of the FSA.

They’ve already started, by the way!
The Financial Reform Bill outlined in the Queen’s speeech opening of Parliament this week indicates in line with the recent treasury counterpart in the USA, announced that all macro economic regulation functions will be handed over to the Bank of England.
Hidden deep down inside the depths of the Con Dem Nation agreement, Insurance Blogger has found that the alliance have agreed to transfer the part of the FSA that deals with Fraud and Serious Financial crime, to a specialist new team comprised of elements of the Police Serious Fraud Office and the Office of Fair Trading.

So don’t worry Taxpayers, the 6 billion pounds of cuts necessary to keep us afloat can probably be made at the FSA and keep our frontline services intact. Hopefully they’ll slash the registrastion fees as well and allow the British People a more diverse Insurance Market and some real competition!

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1. UK Insurance Regulation Is Changing The Face Of The Market
2. Scottish Parliament to rescue Banks?
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So what are the choices?
Hmm – A pompous inexperienced public school prat of the Harry Enfield mold with zero social conscience or a one eyed Scot with questionable religious motives whose already been given the chance to ‘change’ things and failed miserably in some quarters!

Yep, I can hear you all shouting that there are other choices, but my yellow friends you are kidding yourselves. I want you to all return to your constituencies and prepare not to govern!

This is a straight Two horse race like it or not – although it may, like the pathetic Lib/Lab pact of the Seventies not decide the outcome at the first hurdle.
In fact with all these Tory created Strikes and Industrial actions leading up to the election I keep getting flashbacks that I’m in 1979…. God help us all….

So today unpolitical but always controversial Insurance Blogger, nails his colours firmly to the mast and asks you the British people…..

NOT TO VOTE FOR CHANGE !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Why?

Because in case you haven’t noticed the UK Economy is on the brink of slipping back into recession.

The Interest Rates need to be kept as close to zero for at least another five years if the Japanese Economy recovery experience of the Nineties is to be followed.

A Conservative Government would naturally interfere with Interest Rates and the Bank of England monetary policies.
The Conservative party simply cannot be trusted not to inflate the rates to protect their own and their core voters savings!
Look what happened to the UK the last time they were allowed to Govern!
Lest we forget that quickly?

SELLING ENGLAND BY THE POUND

The Bank of England who along with the major European Insurance Companies, are currently doing a mighty fine job of managing UK Debt.

Insurance Companies can’t buy enough UK Government debt in the shape of gilts!

The last offering of UK debt this month was 3 times oversubscribed as the Insurance Illuminati rushed to defend Britain!

It looks like the UK Government are managing the debt pretty soundly!

Truth is, where else do you put your money? Greece? The Euro??

So if Insurance Companies (who BTW own everything including the banks) have faith in the Status Quo – - then So do I!

A vote for Cuckoo Cameron would be utter Madness. Cuckoo BTW because he hasn’t got any policies of his own!

Answers, objections and biased opinions in the comment box below please!

X

Related posts:

1. UK Budget – If thats Radical I’m Obama’s Change
2. Insurance Companies buy more UK Government Debt
3. Euro On The Point Of Collapse – Victim Of A Trojan Horse?