What is the Government doing to improve the current financial situation?

What resources are available for local people to protect themselves from losing out?

Please see below for some information I have put together to help answer these crucial questions. Reading Borough Council's webpage on 'beating the crunch' is also useful. In addition, if you are specifically concerned about the impact of the credit crunch on mortgages and/or household bills, please consult my separate webpages on help for homeowners and help with household bills.

What is the Labour Government doing to tackle the credit crunch?

Most countries are now wrestling with what has been described as the 'credit crunch'. It started in the USA when the housing market crashed. Banks stopped lending to each other. Some banks in the USA went bust. Other countries have also had severe problems. Here in the UK, we took the right action with Northern Rock, HBOS and Bradford and Bingley. None collapsed. All deposits are safe. No-one lost any savings.

Now the government is bringing in new banking laws to strengthen regulation, end the speculative 'short selling' and to deal with the unjustified city bonuses. It has also increased the government guarantee on savings. A number of other countries have followed Britain's lead, adopting policies similar to our's in order to deal with the immediate crisis in a decisive and effective manner.

The government has also made additional funding available to all British banks in return for a public share holding. This should help restore stability to the financial system, while protecting taxpayers. Banks cannot access this money without first of all sorting out their lending policies and putting an end to big bonus payments.

The world economy is slowing down as a result of the turbulence. The government's response has been to raise borrowing to support public services and give families a tax break. It is possible for the government to do this, because it cut the public debt in better times. This approach has also enabled the Bank of England to cut interest rates. The government is committed, where possible, to maintaining services right now when people need them most- rather than cutting them.

Specifically, the Government has increased household incomes for next year, by giving every basic rate taxpayer £145 extra, giving every pensioner £60 in January, and increasing child benefit to £20 per week three months early (in January). It is also providing more loans and deferred tax payments for small businesses, £1.3 billion extra help for job centres to get people back to work, and a three month moratorium on repossessions for homeowners who get into arrears. In addition, VAT has been cut temporarily by 2.5% to boost the economy. Finally, £2.5billion of capital projects have been brought forward, covering housing repairs and insulation, school extensions, GP refurbishments and transport improvements to provide jobs right now when the economy is under pressure.

In contrast, the Conservatives have opposed the saving of Northern Rock, wanted Bradford and Bingley to go bust, and now say they would slash borrowing- which would only make the downturn even more severe. Only a year ago one of their policy documents argued for an end to the regulation of mortgages.

What is Labour doing in Reading about the credit crunch?

Reading and District Labour Party is keen to do all it can to protect local families and businesses from the worst of the credit crunch.

The Labour leader of the Council, Jo Lovelock, has called a meeting of all local organisations engaged in this area to monitor the effects of the economic turmoil and devise possible joint actions. These include charities, agencies, carers, local business groups, and Reading Borough Council itself.

The project has the backing of the Evening Post.

I fully support this project and have offered Jo Lovelock any help I can give to help ensure its success. During the recession of the 1980s, many people felt they were 'on their own', and left to be buffeted about by a rising tide of unemployment and economic stagnation. 

I believe it is essential that no-one in Reading, Woodley or Caversham feels they are 'on their own' in the current crisis. By acting together hopefully we can provide support for those who need it, and maintain Reading's position as one of the towns historically best able to weather financial downturns.

Sources of free advice on financial matters

Protection of savings

The Financial Services Authority has increased the compensation limit on deposits with banks, building societies and credit unions that fail from £35,000 up to a total of £50,000 for each customer's claim. For more information on this, please click on this link to the FSA's website.

The FSA website also includes advice for customers of Kaupthing Edge; Icesave/Landsbanki; Heritable Bank; and Bradford and Bingley; and information about some of the other banks in difficulties (click here).

General financial advice

Reading's Citizens Advice Bureau is able to advise on financial, legal and other problems. Please call them on 0845 071 6379 to arrange an appointment (the Bureau does not operate an 'open door' policy), or to discuss issues over the phone. This number is available on all weekdays except Wednesdays from 10am-4pm (on Wednesdays the service is available in the afternoon, from 1-4pm). Please see Reading CAB's website for further details.

For details of services available at Woodley Citizen's Advice Bureau, please click here or drop in to their office at Headley Road (next to the library) on Monday or Wednesday, between 9.30am and 3.30pm.

You can also contact Reading's own Community Welfare Rights Unit for advice: call their Helpline on 0118 955 1070 (open Monday and Wednesday 9.30am-12.30pm and Thursday 1.30pm- 6.00pm); make an appointment to see a specialist on Monday, Wednesday or Thursday (all day); or turn up for their Tuesday morning drop in (no appointment needed- for new benefit clients only) at 101 Oxford Road. Their website can be accessed here.

The FSA's 'Money Made Clear' pages (click here) offer a wealth of helpful information on succesful budgeting.

The National Debtline offers a free helpline, open from 9am to 9pm on weekdays and 9.30-1pm on Saturdays (outside those hours you can leave a message on their voicemail). The Debtline's number is 0808 808 4000.

The Consumer Credit Counselling Service is a charity which offers free access to fully trained debt counsellors. They can advise on a range of issues including mortgage, council tax and utilities arrears. You can call the Service for free on 0800 138 1111, between 8am and 8pm on weekdays.