Leaving aside the pre-election promises about not raising tuition fees (I can see the need for changes with the country’s finances in their current state), there are several issues at stake here.

The first is the ruling out of a graduate tax by members of both parties in the Coalition. Yet, when one run’s the figures of this new idea, one can see that in essence, for all but the richest or most highly paid graduates, that is what this proposal amounts to.

Even using the £6,000 value, and adding on £4,000 to cover living costs (a reasonably conservative estimate), the average graduate on a four year course (of which there are many), will have accrued £40,000 in debts.

At a “market interest rate” limited to RPI (notice that even though RPI has been replaced by CPI for most measures, it has been retained here since it is generally higher) + 3%, (say 5% once bank rates return to a more reasonable amount), then this amounts to £2,000 of interest in the first year. The government says it is being more generous by only taking payments once earnings reach over £21k, but this means that even someone earning £41,000 (the upper limit for the interest rate cap), will only be paying back £1,800. This will not even cover the interest, let alone repay the capital, and what graduate earns more than this in their first few years in work? Those earning a more average £25,000 will not even be making a small dent in their loan balance.

Once earning over £41k, the interest rate sets to the RPI + 3% measure, whatever the base-rate, ie about 6-8% based on recent trends. So even on a salary of £60,000 (an annual repayment of £3,510), will only just be paying back more than the interest. Repaying the capital within the 30 year cut-off period will thus be impossible for just about any students.

In fact, using a 6% interest rate, then for each of the thirty years, the graduate would need to earn over £53,000 in order to just repay the capital after the thirty years. Including wage inflation (eg at 2.5%), then a starting salary of £40,500 would be sufficient.

So, therefore, the likelihood is that virtually all graduates will end up paying this 9% of their earnings over £21,000 for the full maximum 30 year period. Which, to me, sounds more like a graduate tax than a repayment of a loan. This is made even more clear, by the implication that there will be sizeable penlties for those who wish to pay off the loans early, which also seems very unfair.

There is another reason why actually a real graduate tax is preferable to this system, especially since this system is a graduate tax in all but name; Being saddled with £40-50k of debt will make it all but impossible for any graduates to ever get a mortgage on a house. Having to pay more tax, however, would not cause this problem.

Finally, the apparent motive for this is to reduce government spending, but this method will not mean that the government actually saves any money – after all, they will still have to pay the money upfront to fund the courses. This scheme only saves the government more money in the long run. Not in the here and now when it is actually needed.

So, students are again bearing the brunt of the excesses of the previous generation, and will do so for a full thirty years in the form of increased effective tax rates, and inability to get a mortgage, while the government doesn’t actually save any upfront spending. Perhaps it’s time that students and parents wrote to their MPs, to Ministers and to the media to express their disatisfaction.

Yes, this is a terrible environmental disaster, and will have awful repercussions for those living all around the Gulf Coast, and on the wildlife, and on the families of those killed. I think we are all agreed there.

Yes, BP have to take on the responsibility for these events as the controlling party in the drilling operation, but let us not forget that the rig itself was owned by Transocean (a US company), and that the part that failed was the direct responsibility of Halliburton (a company with close links to Dick Cheney), and these companies are rarely mentioned.

Yes, it is right to compensate those who have been affected by the spill, but the US administration blaming BP for the results of decisions that the adminstration has made since the spill is unfair, and I doubt that it is legally justifiable.

Since BP must bear the responsibility, it is right that their shareholders take their stake of the pain, and they (and I’m one of them) have done so in that the market value of the company has dropped by about 45%. I think, though, that it is time to face some of the facts:

1. BP made profits of USD8bn in the first quarter of this year.
2. Oil prices have remained above $70 per barrel all year (except for momentary fleeting glimpses of the upper 60s), and therefore BP can continue to expect to be profit generating.
3. Even if the clean-up effort (<2bn so far) goes on all year, BP have the cash reserves and income to pay for this, including compensation payments to all interested parties.
4. The dividend amounts to approx $1.5bn per quarter, and if BP has the cash to pay it, then no government should be able to prevent it – shareholders have taken a huge amount of pain, why punish them needlessly to make a point?

I think, though, that my main issue with the Obama administration is that they don’t really seem to be doing anything to try to prevent the flow of oil (and of course they can’t). All they want to do is to punish BP, and make BP throw money at the US administration (to pay for their unemployment etc), rather than concentrating on using their expertise to stop the flow of oil and to ensure that as little damage as possible is done. BP’s punishment will be that they lose a year’s worth of funding for capital investments and growth (in terms of the cash not being available for investment), and the huge loss of reputation world-wide. Obama can’t use BP’s issues to either distract from or pay for the USA’s other problems.

The fuel tax delay is welcome, although fuel prices are now back to the level they were at nearly two years ago when oil was $147 per barrel, compared with around $80 new. Even factoring in the steep depreciation of sterling, this equates to £75 then, versus approximately £55 now, so we’re still being hit hard. And it’s not just the private motorist, all goods and food need delivering somewhere, and all prices will begin to rise because of this tax.

The only good news (if it can be called that) was the drop in the deficit from that forecast, but it is still staggering, and a more concrete plan for its reduction is needed very soon. Hopefully the General election will not result in a hung parliament, and the new (probably) Conservative government can get a plan into action to restore faith in the markets and in sterling (preferably in time for my holiday!).

The usual increases in alcohol and fuel duty will make a small difference, but squeeze margins in our already struggling pubs and restaurants, and affect those who rely on their cars for work – nurses etc.

So, all in all, no give at all, and only a small amount of take, and the mountain of government and personal debt continues to rise. Time for a rethink? Or an election? Both and soon.

Call me a cynic, but the current idea of some local councils stepping in to save local post-offices seems like a particularly good ruse on behalf on National Government; they avoid the expense of running these offices (which provide an essential service to many people), and then when the local authorities have to increase council tax to pay for them, it is they that look bad, and not the National Government. I may have a rant about council tax another time, but as someone who currently lives in a country which doesn’t have any equivalent to it, I don’t feel I should be commenting at this point!