Readers' letters from Thursday 29 Oct 2009

The business of banking

THE reason the government has had to pour billions of taxpayers’ money in to prop up the banks is that previous governments handed the banks full control of all our internal money transfer systems. As a result if any major bank failed, the country’s economy would grind to a halt.Older readers will remember that prior to 1960 all employees were entitled to payment for work done in ‘coin of the realm.’ Most employees got a pay packet every Friday from which they could pay any bills for the previous week and set aside money for the following week’s domestic outgoings. The advantage of this system was that if the worse came to the worse, no one was ever more than a few days away from their next pay packet. Governments by their nature don’t like those they govern to have the freedom to make their own economic arrangements. Payment in cash meant they might be able to escape some of the increasing tax burden imposed on them. Hence, under the pretext that there were too many payroll robberies, parliament passed the Payment Of Wages By Cheque Act. This enabled employers to insist on employees opening bank accounts and put people at the mercy of the banks. All employees, not just the professional and managerial classes, now had to budget for a month rather than a week, and incurred hefty penalties if they became overdrawn.The banks now had access to a vast pool of cash. This cost them nothing but could be lent at exorbitant rates, much of it to support dodgy overseas financial transactions (such as trading in loan instruments based on sub prime mortgages). This was very profitable for the banks and so they preferred it to less profitable lending to UK businesses. Very profitable that is, until these dodgy loans went sour.Banks began a series of takeovers and mergers in the Seventies and Eighties. Smaller banks were swallowed up. The big banks all have what are known as ‘counterparty positions’ with each other – they all owe so much money to each other that if one failed it would bring the rest down.No one who had actually run a business would dream of putting all their eggs in one basket in this way. In any business you have to have a fallback plan so that if one supplier goes bust there are others to turn to.But politicians do not think like business men. That is why we are now in the mess we are in. This will only change when ordinary voters insist on their parliamentary candidates having the necessary business experience to look after taxpayers’ money as well as they appear to be able to look after their own.

Chris Davies, Salford

All down to luck

I CAN assure B.J.W. (Postbag, October 20) that, by their very nature as lotteries, all National Lottery draws, are entirely random. Contrary to his assertion, any numbers from 1 to 49 may be drawn in the Lotto draw – irrespective of whether you play your regular numbers or play by Lucky Dip.The National Lottery is operated in accordance with various strict requirements and is subject to the scrutiny of an independent regulator, the National Lottery Commission (NLC). The operator of The National Lottery, Camelot, has extensive security procedures in place to ensure the randomness of its games.All National Lottery draws take place in the presence of an independent auditor and are filmed to ensure that the correct procedures are followed.We conduct regular tests on all draw machines and ball sets and send this data to independent statisticians at Hertfordshire University for analysis to ensure the draws are random. The results of this analysis are shared with the Commission which also conducts research to check for elements of non-randomness.

Dianne Thompson CBE, Chief Executive, Camelot Group plc

Blitz on booze

IN response to D Walsh’s letter, entitled ‘Why are shops still selling booze and cigs to children’, I would like to reassure the public that Manchester city council’s trading standards officers take complaints of underage sales very seriously and always investigate. Our officers visit the premises, telling the owners we have received allegations, advising them of their legal obligations and warning them we may revisit to check they are not making underage sales. We regularly carry out test purchases of alcohol and cigarettes using young volunteers. If a shop sells alcohol to our volunteer and it is the first time they have done this, they may be issued with a fixed penalty notice by the police. We revisit premises where underage sales have been made and we find most shops don’t repeat the offence. If businesses continue to sell to underage youths, we may prosecute them, or in the case of alcohol sales, apply for a review of the licence. We encourage the public to report suspicions that shops may be selling to children by contacting trading_standards@manchester.gov.uk or by phoning 0161 234 1555.

Coun Richard Cowell, Manchester city council

Socialist dinosaurs

DO Catherine Murray and Tom McGovern, the ‘socialist dinosaurs’, live on the same planet as the rest of us? The two Tory bashers, with their blinkered ideologies, fail to mention the current state of Britain due to Labour policies – lies about weapons of mass destruction in Iraq, out of control immigration, crisis in our universities, the Lisbon Treaty and the scandal of our banking system, not to mention the breakdown in law and order with no-go areas in some of our cities and the lack of a police presence on our streets.

Fair play, Sale

Folly to appoint Blair

IT would be very foolish to consider Tony Blair for president of Europe. I remember the Paris Nato Summit of 1997 when he proclaimed his vision for the future – ‘Mine is the first generation able to consider the possibility that we may live our lives without going to war or sending our children to war. That is a prize beyond value’. He then took our country to war five times in six years. Blair’s legacy of dead isn’t over, it has yet to be counted. His wars, particularly that in Afghanistan, will be fought for many years to come, we can’t just walk away, and retain our honour. Blair made a promise to the Afghan people in October 2001 – ‘To the Afghan people we make this commitment. We will not walk away, as the outside world has done so many times before’. Blair made this promise on behalf of every man, woman and child in this country, because as elected leader he could. We should be very careful which box we cross at the next election.

John Stackhouse, Worsley

Blair's bloody legacy

IF Radovan Karadzic had chosen a different career more than 7,000 Muslims in the former Yugoslavia would probably still be alive. If Tony Blair had chosen a different career, more than 100,000 Iraqis would probably be alive. After Mogadishu, Baghdad is now considered the most dangerous capital in the world.

Brian Christley, Abergele