This is Money Blog

How I caught out Tesco on a two-for-one sham

Gotcha Tesco. I have caught Tesco plugging a two-for-one offer that is a sham.

Everyone knows supermarket pricing is a dark art, but it is notoriously difficult to prove. Two-for-one offers, bottles of wine reduced from a price rarely seen, comparison price wars – they always seem iffy but can you really be sure?

Well, I have caught Tesco in the act.

Here’s how it works. I always buy butter - as I cannot stand the spreadable plastic that is margarine - and it’s always Anchor butter.

In my local Tesco, they sold Anchor butter for 88p. I am not sure why this has permeated my brain so well, when I couldn’t tell you exactly how much most other things are, but it has.

Maybe, it’s because I always buy the same thing, same size, same place, a couple of times a week, or maybe it was the whacking great big price comparison sticker next to it for a few months.
Regardless, I know it costs 88p.

It came as a surprise therefore to see a sticker go up next to the Anchor butter the other day purporting to be offering customers a good deal:

'Anchor butter, £1.22, two for £1.80'

What a load of tosh. The normal price is 88p. Either Tesco is conning its customers, or it has just whacked up the price of butter by 48%, which I find highly unlikely.

I phoned Tesco’s press office to ask them about this and offer them the chance to put their side of the story. Almost a week later they haven’t responded. It’s a fairly trivial matter – and I am sure taking over America and then the world is more important.

But this little trick doesn’t say very good things about Tesco to me.

Oh, and it doesn’t really give me much faith in Tesco’s claim that inflation in its stores was running at just 0.8% when it called for a bank rate cut this week.

Not on Anchor butter, Tesco – that either has an inflation rate of 48%, or you are conning your customers.

- Simon Lambert, This is Money

Useful links:

>> Supermarketwatch - an eye on the supermarkets
>> Tesco accused of sham 'half price' veg
>> Aldi beats supermarket giants on taste

This is Money's most popular: November 2007

Readers, understandably, had a one-track mind in November: the global credit crunch that has already savaged Northern Rock and is now setting its sights on the property market. The list below represents the most popular stories, columns, round-ups, blogs and polls over the month.

And thank you for visiting This is Money during November. It was another record month with around 889,000 readers looking at 8.33m pages, up slightly on October's record month and a 45% increase on a year ago.

1. Is there going to be a house price crash?
2. Guide: Ten steps to reclaim unfair bank charges
3. Get £20,000 a year tax free in retirement
4. Guide: Bank charge letter templates
5. Blog: The house price crash-ometer row
6. Benefit of buying a home tumbles by 75%
7. 'We've lost thousands with Inside Track'
8. Round-up: Interest rates news, advice and predictions
9. Bank signals rates to drop next year
10. Guide/round-up: How to pick the best Isa
11. Buy-to-let faces meltdown threat
12. Where next for Northern Rock shares?
13. Round-up: Are you owed an orphan assets windfall?
14. Property market to grind to a halt in 2008
15. Barclays shares suspended after plunge
16. The buy-to-let timebomb
17. 50 ways to save money
18. Poll: Will house prices fall in the next 12 months?
19. Exclusive: Pensions windfalls for thousands of mums
20. House prices fall fastest for 12 years
21. British banks to reveal credit crunch hit
22. Half the country to see house prices fall
23. Guide: Reclaim your PPI premiums
24. £500 mortgage shock as fixed rates expire
25. Logjam may force down property prices
26. 10m Britons falling into black hole of debt
27. Guide: How to make your child richer (child trust funds)
28. Buy-to-let has become a rich man's game
29. Time to buy Northern Rock shares?
30. Northern Rock dives on 10p-a-share offer
31. Our '£2.71' flight really cost £324
32. Fixed-rate bonds offer best rates for years
33. Inflation jump rules out Christmas rate cut
34. How you can profit from rising oil prices
35. Secret Post Office hit list revealed online
36. Britons in France have healthcare axed
37. Plans made to nationalise Northern Rock
38. Best paid jobs revealed
39. Round-up: What next for Northern Rock?
40. Are National Savings still a good bet
41. HSBC faces huge subprime crisis hit
42. Poll: What will happen to the FTSE 100 in 2008?
43. Market report: FTSE plunges 150 points
44. Land Registry helping crooks 'steal' homes
45. Make money from the internet
46. Credit crisis 'could cripple UK economy'
47. World economy heading for 'perfect storm'
48. Mortgage lenders in credit crisis panic
49. Oil: running out for good this time
50. Our story, by the Dragons' Den millionaires

As ever, I'm always delighted to get feedback, good or bad. So please email with your thoughts on what you want from This is Money - editor@thisismoney.co.uk

- Andrew Oxlade, Editor, This is Money

Do estate agents really think Christmas is in October?

Unlike some I take no great pleasure in the rumblings going on in Britain's property market.

Yes, I think homes are overpriced, mortgage lenders have stoked the fires irresponsibly, and the government named inflation as its number one economic target then failed to do anything about spiralling prices in one of life's essentials - a roof over your head.

But I don't actively want a house price crash - it would devastate anyone who has bought over the past few years while leaving the asset rich older generation untouched.
I also don't feel any particular antipathy to buy-to-let and think that done properly it is a useful way to invest that gives people a degree of control they fail to get from the finance industry.
Furthermore, I think owning your own home is a good thing.

However, I do wish those with a vested interest in property would stop making the kind of foolish claims that even the lately departed England boss Steve McLaren would baulk at making while grinning through with his nice shiny teeth.

My favourite recent one comes from the National Association of Estate Agents and contains some interesting thinking.

The NAEA figures for October revealed that the number of potential buyers has dwindled rapidly and spun it thus:

'The number of house buyers on estate agents’ books was at its lowest for the past four years, with agents reporting an average of 282 buyers registered (in October) in comparison to the 326 recorded in September 2007.  Interestingly, the second lowest figure recorded was in December 2005 with an average of 302 buyers reported, indicating that the market is experiencing the type of slowdown often experienced in the festive period.'

Can you see what they did there? Slowdown, lowest number of buyers for four years, compare to second lowest number, must be a festive period slowdown.

Skips the crucial point - Christmas is in December, not October.

We are not stupid.

- Simon Lambert, This is Money

Useful links:

Analysis: Will there be a house price crash?

Mortgages and property news, tips and advice

You made your bed, now lie in it - credit crunch banks

Banks wanted it, the property industry wanted it, and some hard-pressed homeowners could have done with it, but the Bank of England opted not to cut interest rates this month.

And we should all say a very big thank you for that.

That anyone thinks the Bank of England should follow America’s lead and cut interest rates amazes me.

The reason cited for cutting rates is the ‘credit crunch’ – apparently this completely unheralded global phenomenon needs the Bank of England to save us from impending disaster.
Hmmm.

Isn’t the credit crunch a result of banks being reluctant to lend to each other, while refusing to divulge how much toxic waste they took on from the US subprime greedfest?

So, perhaps instead of urging the Bank of England to ditch inflation commitments and hack away at the Bank Rate, banks could just front up and start lending to each other.

It’s funny isn’t it how when banks are making a stinkload of money any suggestion of intervention is met with a curt response of ‘leave us professionals to run our business.’

But, the moment it turns out the professionals were mug punters and things start to go wrong, the pleas for help arrive.

I think the phrase is ‘You made your bed, now lie in it.’

Of course, the problem is the credit crunch is going to hit consumers when banks pass on their costs, but slashing rates at a point where the cost of basic necessities such as fuel, food and housing is far outstripping official CPI inflation would be foolish.

From some of the comments coming out from the financial industry you’d also think that either the worst of the credit crunch storm is blowing out, or a couple of rate cuts would help end the crisis.

Sadly, I don’t think that’s going to happen. Cheap money and uber complex financial instruments have delivered massive gains over the past five years, but those complex deals don’t look so clever now and that money looks like it was too cheap.

Perhaps rates of 5% or less are too low and lead to prices of everything from homes to businesses rising too high.

If the major world economies - especially the western ones - walk away from this with the mere collateral damage they are suffering at the moment they should count themselves lucky.

Unfortunately, I suspect US mortgage bank closures and the Northern Rock crash will be seen as a warning of the storm to come rather than the damage left in its wake.

People have used cheap money to pay too much for a lot of businesses and assets and when higher rates bite they may not be able to refinance those deals, or manage their repayments.

A sign some very astute people think prices are going to fall rather than rise came this week with Qatar ditching its £10.6bn Sainsbury’s takeover. The credit crisis was cited as the reason for this, and while the Qatari Investment Authority-backed Delta Two fund would have had to borrow heavily to fund the deal – reports suggest as much as £6bn – those pondering this should go deeper.

Qatar’s funding may be relatively small compared to other sovereign wealth funds, but if it really wanted Sainsbury’s it could have bought it. The realisation that with cash tight even an asset such as Sainsbury’s wasn’t going to have its inflated price sustained would make many much less clever men walk away. Draw your own conclusions from Qatar’s decision to step aside.

A year ago, the counter bidders would have hit immediately. Now, they are curiously absent. In a year’s time maybe Sainsbury’s would only cost you £8bn.

Doesn’t look promising for all those highly leveraged buyouts of recent years.

- Simon Lambert, This is Money

Useful links:

Will there be a house price crash?

British banks to reveal credit crunch hit

Global downturn fears over dollar slide

The house price crash-ometer that has lenders worried

I was more than a little surprised this week to receive a letter from the body that represents nearly every British mortgage lender.

The Council of Mortgage Lenders, I guess rattled by the delicate state of house prices following several years of bullish and sometimes irresponsible lending by some, wrote of its concerns about our house price calculator and its wish that we remove it from the site. 

We at This is Money pride ourselves in producing what we think is a balanced and informative site. Our news and features are backed up with tools and calculators to either help our readers make the right money choices or merely just for fun.

As I mentioned in our newsletter two weeks ago, we have a whole series of new house price calculators coming out. Here are two we released this week...

> Home valuation calculator
> Home equity calculator

Anyway, it's the view of the readers that's most important, so I thought you should make the call and have your say on our calculators. So here is the email from the CML and my response below. Have your say in the comments box below...

Dear Andrew

It’s very, very rare for us to complain about any of the tools and gizmos that appear on editorial sites, but the “house price crash calculator” currently appearing on thisismoney is a notable exception.

This tool seems specifically designed to cause maximum alarm, and in our view is an extremely ill-considered tool for your website that should be removed immediately.

Although we note that you list “house price optimists” among your personal dislikes, I can assure you our objection isn’t because we want to paint a falsely rosy view of market prospects, just a realistic one.  Encouraging people to consider that there is any prospect whatsoever of house prices reaching their 1992 levels is, frankly, irresponsible.  Your calculator takes no account of general inflation and is deeply, deeply misleading.  Even the most pessimistic house price forecasters are nowhere near this vicinity – and it does your readers no service at all to imply that this is any way a realistic scenario. I have alerted the Nationwide to the way in which their data is being used.

Please reconsider this unhelpful and misleading tool, which cannot possibly be regarded as reasonable.

Sue Anderson
Head of member and external relations
Council of Mortgage Lenders

And my response...

         Dear Sue,

Thanks for the email.
I was surprised by the content of it and some of the accusations it contained. Let me address some of the points you raise.

I can assure you that This is Money is not in the practice of desiging tools specifically to 'cause maximum alarm'.
This is Money targets themes of interest to its readers and users, and produces tools that put them in the picture.

The house price crash calculator is aimed at allowing readers to experiment with theoretical scenarios on property prices using information that Nationwide has put in the public domain. To suggest that readers will believe house prices will return to 1992 levels because it is an option on a calculator underestimates our readers.

And in terms of it being a realistic scenario, I'm sure you're aware of the various examples of prolonged slumps in property in developed countries in modern history - the sustained slumps in Japan (more than a decade) and Hong Kong (more than seven years) spring to mind.

The reason the calculator goes back to 1992 was that it was the nascent stage of the most recent UK house price boom to give them the maximum amount of information on this theme.

You should also know that the calculator is the latest in a long series of tools we are producing for the site - others include a house price boom calculator (a reverse of the existing calculator, that allows people to see how much their property value has risen). Others will be appearing on the site soon.

You mention the remark in the dislikes in my blog biog. As you can probably see, these likes and dislikes are a bit of light-hearted fun.
I can assure you that my No.1 prority is producing a balanced and respected website. The views I or any other member of the team holds in no way sways reporting or presentation of news and comment is always clearly ring-fenced.

That's maybe why This is Money has become a key destination online for property market news - readers seem to like the breadth and balance of our analysis. You may have missed the extremely incisive and well balanced commentary last week from our property correspondent, who, incidentally, predicts house prices will keep on rising (also - please note the reader comments praising Simon for such a 'balanced' article)...

Is there going to be a house price crash?

I'm surprised to see the CML so jittery about confidence in the market and very surprised by this attempt to bring the mortgage industry's influence to bear on an independent, editorial website.

Rather than censoring our output, our preferred approach is to publish as much information as possible and allow readers to make their own call - including their views on our approach to content production - via "Reader Comments" on the site and via the blogosphere. It's for those reasons the calculator will remain on the site.

Kind regards,

Andrew

Editor
www.thisismoney.co.uk

Amazon: 'We're not just for Christmas'

Amazon founder and chief Jeff Bezos is sending out a message to the company's customers, and indeed anyone who goes to its homepage today: like goodwill to men, driving sober and puppies, it's not just for Christmas.

His open letter trumpets the virtues of Amazon's new 'Prime' membership programme. The idea, he avers, is simple: 'for a flat annual membership fee, you get free unlimited One-Day delivery on millions of eligible items'. The fee? Fifty quid a year. Well, £49, but let's add on the interest.

'If you're inclined to do the maths [yes, Jeff, I am],' continues Mr Bezos, 'that's less than the cost of 6 Express Deliveries (£8.99 each), making it a great value [sic].' If you're daft enough to use Express delivery six times a year, it just might be Jeff.

Apart from the irony that the world's biggest online bookseller really should be able to afford a decent ad-copy proofreader, there's a few things that don't add up.

Express 'One-Day' delivery is emphatically not great value at £8.99 a pop. Not in a country where first-class post should arrive in one day. But then, the only reason Amazon ever got away with charging for its 'first-class delivery', having initially sold itself on free delivery, was that it made the latter so excruciatingly slow, by waiting days and days to dispatch orders, that everyone got fed up with it.

So who knows, perhaps now it will do the same to 'first-class delivery', which is already frequently delayed by slow dispatch, in order to encourage its loyal customers on to Express delivery.

But what would really irritate me if I was gullible or wealthy enough to sign up for Amazon Prime is what appears to be reduced stocking levels. I seem to remember a few years ago there were few items that were not in stock and available immediately (and I have some obscure musical and literary inclinations).

I just scrapped an order for a handful of not-that-obscure CDs, because two of them 'will not ship for 1 to 3 weeks' and one is not available at all. This is really poor, as it's the new album by Robert Plant and Alison Krauss - a major release. I'd feel a bit cheated out of my fifty quid, personally speaking.

It appears to me that each of the virtues upon which Amazon promoted itself as a newcomer many years ago (low prices, free delivery and quick availability), has been gradually dispensed with. Then again, if the state of High Street CD retailing is anything to go by (RIP Fopp), the format is doomed - even if some people want to buy them, no one wants to sell them.

Downloads it is then!

- Adrian Lowery, News editor, This is Money

A water meter cut my bills by 35%

I felt ethically obliged to have a water meter installed just over a year ago. We had endured another dry summer, resevoirs were parched and the south-east's hosepipe ban looked permanent.

I also thought I might save a few quid... and I have.

I've had my first full-year bill. It was £220, a dramatic reduction on the approximate £330 a year I was previously paying with Sutton and East Surrey Water board.

Admittedly, it was a wet summer so my thirsty tomoatoes largely looked after themselves but it's still remarkable given it's a home with a family of three (and now four with a new addition in the past few months).

It's some anecdotal evidence to back my previous estimates that households of three people or fewer should be able to save with a water meter. If you're interested in more advice see these articles...

- Can a water meter cut costs?
- 10 ways to cut water bills (and try an official water meter calculator)

- Blog: The great water meter rush (September 2006)
- Blog: A £110 cheque for having a water meter fitted (December 2006)

- Andrew Oxlade, Editor, This is Money

Most popular money news and advice: October 2007

Fears surrounding the credit crisis helped us to a record month in October with house price stories the clear winners in the top 50 reports. This is Money readers looked at 8.3 million pages in October, up 44% on a year ago.

The other big themes were the inheritance tax threshold increase to £600,000 (7) and the CGT change (6) in the Pre-Budget Report, while reclaiming bank charges - which is currently on hold - remains a big issue for many.

There were some notable risers - reclaiming PPI or payment protection insurance, an issue TiM has campaigned on for the past 18 months, and also the disaster in waiting surrounding sale-and-rent-back, another area in which This is Money led the way.

Here are the top 50 news stories, guides and features on This is Money in October 2007...

1. House prices set to fall by thousands
2. Ten steps to reclaim unfair bank charges
3. Shock report shows steep house price fall
4. Bank charge letter templates
5. UK house-price bubble about to burst - IMF
6. Second home and buy-to-let tax gift
7. IHT threshold doubled to £600,000
8. Britain on brink of credit crunch slump
9. Are house prices falling or rising?
10. Fixed-rate borrowers in for a big shock
11. The Postcode Breaker: Home insurance
12. Does anyone live in buy-to-let flats?
13. Interest rates: News, analysis, advice
14. Time to buy Northern Rock shares?
15. Northern Rock crisis: How it will affect you
16. Property vulnerable, warns Bank guru
17. Reclaim your PPI premiums
18. Pre-Budget Report: How it will affect you
19. 50 ways to save money...
20. How to pick the best Isa
21. Premium Bonds winning numbers
22. Flaw at heart of fraud-proof chip and Pin
23. Newspaper share tips: Northern Rock
24. Buy-to-let lending soars despite warnings
25. The buy-to-let timebomb
26. The most consistent savings accounts
27. House prices fall for first time in two years
28. What to do with savings after the storm
29. Fixed-rate bonds offer best rates for years
30. Top funds 20 years on from Black Monday
31. Ten steps to reclaim credit card charges
32. Sale-and-rent-back a disaster in waiting
33. UK house prices fall 0.6%
34. Best paid jobs revealed
35. Can the UK avoid a house price crash?
36. How to make your child richer
37. How to cut the taxman out of your will
38. Lenders pulling mortgages at last minute
39. Inheritance tax: Beware new trust trap
40. How thieves bypass bank card Pins
41. 1m using plastic to pay their mortgage
42. Pre-Budget 2007 - the winners and losers
43. Your pension at risk if you change jobs
44. Facebook users warned on ID fraud threat
45. Savers Q&A: Northern Rock
46. Cheapest foreign currency rates
47. Pre-Budget Report: Main points at a glance
48. The best investment I have ever made
49. What are the best broadband deals
50. Eight steps to fix all your finances

FIND OUT MORE ABOUT THIS IS MONEY

>> Most popular news and features in September
>> Most popular news and features in July
>> Most popular news and features in June
>> Most popular news and features in May
>> Most popular news and features in April
>> Most popular news and features in March

>> Most popular news and features in 2006
>> Most popular blog posts in 2006

- Andrew Oxlade, Editor, This is Money

P.S. If there are other issues you would like us to investigate, please email me at editor@thisismoney.co.uk

Ski posters - alternative investing I can (almost) afford

Sadly, I’ve not been able to afford one, but in recent years one of the most affordable but quietly successful forms of stylish art has been vintage ski posters.

The distinctive prints produced during the golden days of travel have become hugely popular and some have delivered returns of 1000% over the past ten years.

For those hoping to buy, the big event of the year has traditionally been Christies’ annual ski poster sale, but now poster afficionado and London lawyer Russell Johnston has set up the first online gallery exclusively selling vintage ski posters online.

Russell contacted me about his East Street Gallery after reading one of my previous posts about the Christies’ sale. And his website www.originalskiposters.com is worth visiting for a look at the posters on offer.

The historic posters originally produced for the walls of travel agents and station platforms can now fetch thousands of pounds, although many can still be purchased for £500 or less.

Now if I was going to buy an alternative investment, I think this is where I’d start.

Alternative investing is one of those things that sounds great in theory but rarely delivers the goods in practice. Who wouldn’t want to indulge a passion for wine, art, classic cars or racing while seeing their wealth grow (hopefully)?

Unfortunately, for the common man alternative investing rarely means being able to enjoy your indulgence and taking the plunge is a bit daunting.

For a start there’s a reason why alternative investments are alternative – they’re expensive.

• Want to invest in art – what’s good and at that price do you dare put it on the wall?
• Fancy investing in wine – forget drinking it.
• Classic cars – no point owning one if you don’t drive it, but then come the maintenance costs.
• Racehorses – an investment that needs feeding and housing; are your kids not enough?

And this is where the problem lies. If you’re going to get involved in an alternative investment you need to be able to enjoy it, and that’s hard if you aren’t seriously wealthy.

If you aren’t going to enjoy it, but want to be a bit different, just put your money in a fund that invests in something like pork. (Pigs are a good tip, believe it or not China has a shortage.)

However, if you like the mountains then ski posters represent an affordable art investment that can be enjoyed and indulged as a hobby.

Russell’s collection was begun by his father Robert, who was a skier in the British Army during the Second World War and built up the bulk of it as he travelled Europe between 1944 and 1955. Russell himself was bitten by the bug in the 1990s and the first poster he bought in 1996 is now worth £1,600.

His favourites are those by Martin Peikert, who exclusively produced Swiss posters and Russell harbours an ambition to perhaps one day write the first biography of. Like me, he also likes the stylised industrial look of some of the French posters glorifying cable cars and railways.

Russell says: ‘On a ten-year view the kind of poster you could buy then for about £500 is now worth £5,000 to £8,000. Prices now, as with many things, are at an all time high so those rises may not continue, if you want a poster you should buy it because you love it and if it goes up in price that’s brilliant.’

And there’s the key. If you like the images you could just buy a reproduction for a fraction of the cost, but buy a real poster and it may go up in price.

However, don’t forget prices can go down as well as up, and what people call ‘alternative investing’ during the good times tends to just be labelled a hobby when the money disappears.

- Simon Lambert, This is Money

Useful links:

www.originalskiposters.com

The latest investing news and advice

Special report: Alternative investing

Soaring food prices can be your cash crop

Reclaiming PPI: Another successful claim

The best bit of the job here at This is Money is when we're able to help individuals by wading in against banks or other companies on their behalf. Or when people have simply helped through our "How to..." guides.

So I was chuffed today to receive an email from a lovely lady in Battersea, London...

"Just to say thanks – I love your website. I’ve claimed back £3400 from your charges and PPI campaigns, and on a salary of £27000, that’s significant. I also use your calculators daily! Please keep up the good work."

We have compiled more of these so you can read how we helped This is Money readers.

And don't forget, you should also use consumer power to reclaim your money. We have been reminding people as part of our campaign for the past 18 months that there are 20m payment protection insurance policies in the UK and that many of these PPI policies, attached to credit cards and loans, may have been mis-sold.

You can reclaim the money right now: Reclaim PPI

And see the full campaign here: PPI - beat the protection racket

If you want to tell us your PPI story, email us at editor@thisismoney.co.uk

- Andrew Oxlade, Editor, This is Money

Ken Livingstone - how to not ask what people want

Sadly, it seems even self-styled men of the people like Ken Livingstone fall someway short of actually asking the public what they want nowadays.

The public consultation on the emissions related congestion charging scheme that Mayor of London Ken Livingstone wants to use to impose a £25 daily congestion charge finishes on Friday October 19th.

However, despite Ken's alleged belief in delivering people's wishes, the actual process of asking if Londoners want this to happen is abysmal.

Visitors looking at either the Mayor of London's website, or the Transport for London website would not realise that they were about to lose the opportunity to comment on one of the biggest changes to life in the capital.

Nothing on the front page of either website tells you about this, and if you eventually dig out the public consultation, it falls a long way short of managing to ask the simple question - do you want this?

How the modern world works, part 297 - public consultation

Foolishly, you might imagine that a public consultation would involve a simple 'yes/no', what do you want question. But of course not.

No, instead you get a bizarre multiple choice questionnaire asking what you have done to help the environment over the past year, and then a pair of woolly questions about whether charging people with larger engine cars £25 a day to use them would be an incentive to use a lower C02 emitting car?

And that's it. A brief quiz about your bin and a, ‘Durr, of course ripping people off for driving a bigger car is an incentive not to drive one’ answer.

TFL and the Mayor of London will then use your answers to assess their own proposals - which they have already said they want to implement.

This is sadly what public consultation means nowadays. Don’t ask the public - they might say no. Instead, introduce a procedure that makes mock elections under tinpot regimes look a model of democracy.

It's unfortunate this, as hidden deep in Ken's plan is a germ of an idea. We do need to reduce emissions and as someone who cycles through London everyday I can see the benefit better air would bring.
But this plan will simply be one of the final steps in making Central London a rich man's playground.

The £25 per day charge - with no residents discount - for cars with engines over 3 litres, or that are in the highest emissions bracket, will hammer families who own people carriers, estate cars, or larger saloons and small businessmen.
Meanwhile, £6,000ish a year will only be a minor inconvenience to the Bentley brigade, that is slowly chasing the last ordinary families out of Central London.

Diversity is essential to a city's make-up, but those last remaining inhabitants of central London not on six figure salaries are being squeezed from their homes. If you're a wealthy Londoner paying the charge or buying a new less polluting car is no problem, for others - who often do only around 2,000 miles per year - this is deeply unfair.

There is also no exemption for classic cars, which are again rarely driven and also due to their extended lifespan much greener than buying a brand new Prius

It's a shame really. What we needed was a proper debate about how to deal with this, or even a genuine chance to answer yes or no. But as with the problems with bendy buses, Oyster cards, 'green' taxi filters that make them pollute more, and many other issues, it doesn't seem that the people get a say.

Don't worry you might think, I don't drive in London/live anywhere near it. But when something like this can be forced through without meaningful consultation in London, any other council anywhere can easily do the same.

And it's only a matter of time before they do.

- Simon Lambert, This is Money

Useful links:

How to get elected London Mayor - 30 minutes free parking

Congestion charge expands - money saving for the rich

Cut taxes for the super-rich and give us all a break

Credit card crunch the Spitting Image of 1990s

If anyone needed reminding - and sadly an awful lot of people seem to - when you need to use your credit card to survive the month you're in trouble.

And when you need to use your credit card to meet the mortgage repayments you're in serious trouble.

But according to research from housing charity Shelter that is the reality for around 1m people in Britain.

Credit cards are Satan's panacea. And in the wrong hands they are the ultimate con.

Unfortunately, the idea that you can play the credit card system, even make money from it, entered the national consciousness about five years ago. And suddenly having a wallet full of plastic became acceptable.

From the comments on This is Money a lot of the blame is being laid at the doors (No. 10 and No. 11) of Gordon Brown. But lest we forget - and for those of us with short memories - here's a clip from Spitting Image from the last time we were in this mess, when easy credit came into its own and led to a near decade of recession and repossessions.

My credit card rules are quite simple

You should never need more than one credit card.

And you should pay off the entire balance every month.

Remember: credit card companies aren't stupid. They are, however, after your money and are extremely adept at getting hold of it. They are not your friend. And are not to be played with.

If you are in trouble or think you might be in trouble get in touch with your local Citizens Advice office now.

Richard Browning - This is Money

The credit crunch chronicles

Negative equity: it's back, it's instant and we're heading for a property

The Northern Rock loan for 80 year olds with a job

Northern Rock and the Picture of Modern Britain

Listen now: 'We're heading for a property slump'

Why people deserve an inheritance tax break

‘We’ve got it - inheritance tax.’ Were those the words uttered by a crack team of Conservative policy monkeys, after finally coming up with something to draw the battle lines over?

It’s incredible how long it took them to latch on to the ill-feeling that’s been building up over what many consider a deeply unfair tax.

It's even more incredible that the Chancellor Alistair Darling thinks shuffling some figures to make it look like he has raised the inheritance tax allowance when it just stops people having to become tenants in common solves any problems or will fool anyone.

The problem is any debate on the issue inevitably manages to get stuck straight back in the old political divisions - Tory vs Labour, Haves vs Have-nots, North vs South and so on.

But strangely when discussions take place there often appears to be a reversal of which side you would typically expect to have the notion that soaring house prices benefit people.

It’s the anti-raising inheritance tax lobby that seems to believe sky-high house prices are benefiting property owners.

The suggestion is owners of family homes that have become worth far more than the inheritance tax threshold should count themselves lucky, and not mind being heavily taxed if they try and pass it on.

‘But we have paid for our homes out of taxed income, so this is double taxation’, say the pro-inheritance tax reform posse.
‘Yes, but you didn’t earn that huge increase, you just sat back and watched the value of your home soar and now want to perpetuate injustice by handing that wealth to your offspring’, counters the eat the rich crew.

And this is where the false notion of high house prices benefiting people comes in.

The owners of an average family home in South East England bought in the early 1980s for £100,000 and now worth £800,000, didn’t directly work for that rise in value, but they are in many ways entitled to it.
Living in an area where house prices are absurdly inflated is not all fun and games:

• Your house may be worth lots but so is any other house in your home area, so there’s no benefit unless you up sticks and leave friends and family far behind.
• Your children and their friends find it almost impossible to purchase a property in their own home town.
• Your home area loses its diversity, as moving there becomes possible only for very high-earners, and pubs, shops and amenities shut as developers move in on every available spot.
• Your children will face an even bigger mountain of debt, if having managed to climb on to the property ladder they have children of their own and need to buy a family home.

This is not meant to be a 'woe of the wealthy' sob story - but these are legitimate concerns that need discussing rather than being brushed under the class war carpet.
It’s true that the Conservative proposals do play straight to the stereotypical Tory South, but then the current government has ignored those voters’ concerns over house prices for a decade.

In many South East areas a small family house now costs at least £300,000. According to Halifax’s historic house price calculator that would have cost £100,000 in 1997.

If a buyer had purchased that home in 1997 they would have needed to find £10,000 for a 10% deposit, and at an average interest rate of 7% over 25 years would pay £101,000 in interest to their mortgage lender.
A buyer purchasing it today would need to find £30,000 for a 10% deposit, owe a hell of a lot more, and at an average interest rate of 7% over 25 years would pay £302,500 in interest to their mortgage lender.

Clearly there is a problem here. But despite making controlling inflation a top economic target over the past decade, the Government has completely failed to tackle rampant price rises relating to the basic necessity of a roof over your head.

Meanwhile, it has sat back and seen its income from inheritance tax post healthy gains, as a tax originally designed for the very rich drags in more and more ordinary families. (And Stamp Duty revenues have been pretty healthy too.)

The real winners of sky-high house prices are mortgage lenders and the taxman. And those hoping to score political points on this should remember the Conservatives kicked off the whole problem a long time before the current government made it worse.

So yes, perhaps in the ‘day at the coalface’ sense the owners of homes being hit by inheritance tax didn’t ‘earn it’.

But they have paid their dues and earned more right to that money than a Government which has presided over the shambles the UK housing market is in today, or any future governments that don’t come up with any meaningful plans for sorting the mess out.

- Simon Lambert, This is Money

Useful links:

Help and advice for first-time buyers

Mortgages and property news, tips and advice

Could there be a 'fourth way'?

Tony Blair's 'Third Way' turned out to be suspiciously close to Margaret Thatcher's blend of expanding freedoms to business and markets while restricting those of the individual. In this, both hues of Government fixed their agendas with a lot of help from our so-called 'special relationship' with the United States. In my blog last week I argued that the Northern Rock episode exposes the fallibility of blind belief in free markets.

On the eve of Alistair Darling's Pre-Budget Report, I'd like to state my belief that we must stop looking across the Atlantic for our economic and social inspiration. We've been doing that for 30 years and we've got Kentucky Fried Chicken, 50 Cent and a transport system that's the laughing stock of the developed world. I think we've learned all we can from that direction.

It's about time we started to try and learn more from our social democratic neighbours on the Continent. OK, I admit it, I'm an unrepentant Europhile – not in the sense of a strong European Union. Au contraire, I'm all in favour of localism: I think more policy should be determined at a level closer to where people live. And while many of its inefficiencies and extravagances are doubtless exaggerated in certain sections of the media, the EU nevertheless tends to the opposite direction: where laws are made at a great distance from citizens and uniformities are imposed across nations.

This latter prospect is one that depresses me, although it is globalisation and tourism, not the EU, that are the major protagonists behind it. I returned last week from a massively enjoyable and fascinating 16-day rail trip around the continent, taking several sleeper trains between some of its greatest cities. This diverse collection of societies and cultures within such a small area on our doorstep: we take it for granted at our peril.

In the middle of the trip I read this news piece about fears for the survival of Paris neighbourhoods expressed by the deputy mayor Lyne Cohen-Solal: 'All the cities all over Europe are starting to look the same. London, Berlin, they're going to have the same streets with the same shops,' he said. 'If we don't intervene ... we are going to have only textile shops and fast food. We don't want this kind of future for our city. Culture is a very important thing to create integration [and] a higher quality of life.'

He's spot on. Soon, Europe's monuments and treasures will be reduced to totems of expired national identities, dotted around a homogenous morass of cultural and aesthetic mediocrity. (You might surmise from this that I don't rate shopping very highly in the pursuit of happiness. And you'd be right.)

Just as unfettering markets doesn't seem to stop them working inefficiently and heading in catastrophic directions, zealous lawmaking and regulation in the social arena rarely meets its objectives (take 'the war on drugs'). I believe there are arenas in which socio-economic intervention is justified and could be effective: supporting traditional local industries, proper town-planning and regeneration programmes, and transport policy, both local and national. But these are the very areas that have been abandoned by successive governments to the selfish vagaries of private enterprise and the market.

Which brings me to the trains. My experience of rail travel and urban transport across the continent was that it was superior to and cheaper than ours – by far. Even in those nations supposedly blighted so badly by decades of communism. Polish trains might be a bit shabbier and slower than Virgin's much-touted Pendolinos – but they are affordable to everyone, not overcrowded and their vestibules don't smell of excrement.

I don't pretend to know much about the transport policy of each nation on the continent or have detailed ideas on how we can learn from them. That is the job we pay politicians and civil servants for: to study complex problems and come up with solutions that are of most benefit to the widest possible section of society.

The free market is just one of the more effective means civilisation has found to organise business so that it provides for society's needs. That's all – it's a means, not an end in itself. That's why, when it has manifestly failed to provided a decent solution (as in the case of our rail network), it should be shown no clemency and no respect.

- Adrian Lowery, News editor, This is Money

Search engine shenanigans

Do you own your own name and reputation?

The new world of internet advertising has this week raised this question for me.

Our sharp-eyed development editor Richard Browning spotted on Google what appeared to be myself and several colleagues on Financial Mail posing as experts for the 'Property Network Club'.

Search 'Andrew Oxlade' on Google and you get the usual This is Money stuff in the centre, but on the sponsored links on the right, bought by anyone who wants them, you get this...(although it's been removed now)

You get the same if you search 'Lisa Buckingham' (Financial Mail Editor), 'Jeff Prestridge' (Financial Mail Personal Finance Editor) or 'Richard Browning' (This is Money).

I can assure you I have no connections with any property investment network, company or club. And I suggest you treat all offers of property riches with a healthy dose of cynicism. Read our property expert Simon Lambert's appraisal of property investment seminars (strangely they haven't 'bought' Simon's name yet).

I spoke to Vamish Patel who runs the Property Networking Club who insists he has stuck to the Google rules and merely 'bought a search term' that happens to be my name. 'There's been no attempt to make people misconstrue anything,' he says. He also says the 'financial phrases' are picked for him by a marketing company in India. 'It's just like buying a search term like Richard Branson.'

Now now, Mr Patel, flattering me with billionaire comparisons won't wash - and especially once he told me how little I'm worth...

Mr Patel said: 'Seventy people have searched "Andrew Oxlade" in the past year and six people have clicked through on the advert, and no-one has signed up. I pay 10p per click so that's cost me 60p.'

So with revenue generation of 60p a year, I won't give up the day job.

- Andrew Oxlade, Editor, thisismoney.co.uk

Useful link

> How to make money from the internet

Tax the dead and not the living

Am I the only man on the planet sick to death of the sanctimonious rubbish being talked about inheritance tax?

Shadow chancellor George Osborne promises that a future Conservative government would raise the threshold to £1m because families should 'not be punished for working hard and saving hard'.

Garbage. The vast majority of estates being drawn into the IHT net are there purely and simply because property prices have risen. Hard work and 'saving hard' have nothing to do with it.

In fact, these mythical hard-working families much loved by Labour and the Tories are saving less than they ever did. Debt has ballooned to beyond £1,000 billion. As a nation we are living on money we haven't yet earned and the closest thing to hard work in many people's daily lives is figuring out how to juggle their credit card bills.

The notion millions of us will invest an inheritance in a pension fund or to cover future long-term care bills is laughable. We want to sell off gran's old home so we can live like lottery winners for as long as it lasts.

The only thing that might stop us is having to help their kids buy a place of their own. These will cost far more than at present because if Mr Osborne gets his way the hidden price control created by the stamp duty threshold will have been removed for first-time buyers.

One way or another, governments have to raise taxes to give us the services we need. As far as I'm concerned I'd rather the dead paid taxes that would otherwise be imposed on the living.

- Simon Moon, This is Money

• Tory pledge to raise IHT limit to £1m
• How to cut the taxman out of your will
• New crackdown on inheritance tax

Northern Rock shows up the market ideologues

I find it rather churlish and hypocritical to blame either Mervyn King or the Government for what has occurred at Northern Rock. The fault lies squarely with Northern Rock, and more broadly with a free and liberalised international money market: it is an instance of what economists call market failure.

As Chancellor, Gordon Brown spent ten years bending over backwards to please business leaders and the money markets with assurances of non-intervention in their affairs.

Business, banks and investors can't have it both ways: they can't on the one hand argue for markets that are as unfettered as possible in order (notionally) to maximise efficiency, profits and shareholder returns. And then on the other complain that government or central banks or regulators do not jump in to rescue them when that market (or those firms) are shown to be not up to the job.

The job, in this case, of making sure constituent firms lend and borrow sensibly and look after people’s savings.

I sauntered off on a rail tour of continental Europe for a couple of weeks on 13 September and the next day it all went off. Which I only realised a week or so later when I picked up an English paper in Vienna.

In it I read this piece by Martin Kettle, which broadly argues that the intervention by the Government to guarantee savers' deposits presents an opportunity to create a consensus for firmer social-democratic style regulation of and intervention in markets.

I agree only in part. 'Intervention' and 'regulation' must not be confused. Surely, intervention is what you do when regulation doesn't work?

So far the intervention on behalf of Northern Rock gives the message – as Mervyn King argued - that banks (and their shareholders) can go on taking irresponsible risks and will be baled out with taxpayers' cash when things go wrong.

I am all for the Government stepping in to guarantee savings deposits: but only if the lesson is learned that the market is far from perfect and requires regulation to prevent crises – rather than ad hoc interventions once the horse has bolted.

- Adrian Lowery, News editor, This is Money

>> NORTHERN ROCK: Latest news and advice

Most popular money news and advice - September 2007

This is Money aims to bring you the best City, consumer and personal finance news and advice. We fight for your consumer rights and aim to fix your financial problems. We also show you how to make money and pay out less. It's news you can use - find out more at thisismoney.co.uk/makemoney

So don't miss the top stories from September. Unsurprisingly, Northern Rock and the impact on savings, mortgages and house prices was top of readers' concerns. Nearly 860,000 people came to the site, up 50% on a year ago, to take advantage of the latest info. Make sure you're one of them in October.

1. Time to buy Northern Rock shares?
2. Savers' Q&A: The Northern Rock fallout
3. My buy-to-let dream cost me everything
4. The banker predicting house prices to halve
5. Housing market 'is heading for a fall'
6. Ten steps to reclaim bank charges
7. Can the UK avoid a house price crash?
8. Northern Rock: How the crisis affects you
9. Where should I put my savings?
10. Reclaiming bank charges: Letter templates
11. The Postcode Breaker: Home insurance
12. More banks told to prove they are safe
13. Current account that pays 10%
14. How to get a windfall
15. Fixed-rate bonds offer best rates for years
16. House prices fall for first time in two years
17. Northern Rock crisis sparks banking panic
18. 50 ways to save money
19. Newspaper share tips: Northern Rock
20. How to pick an Isa
21. Financial Mail special report: Will property boom or slump?
22. Will Northern Rock chaos hit mortgages?
23. The savings accounts you can rely on
24. Northern Rock savers shut out of accounts
25. Warning of a 1990s-style property crash
26. New crackdown on inheritance tax
27. Mortgages hiked despite base rate freeze
28. Time to invest in bank shares?
29. Property price gap getting bigger than ever
30. Rock warning sparks fear of banking chaos
31. Northern's dilemma will rock markets
32. The buy-to-let millionaires
33. Investment Extra: Northern Rock shares
34. The cheapest way to buy shares
35. Mortgage rates soar as credit crunch bites
36. Interest rates: News, analysis, advice
37. £1m prize for 'first time' Premium Bond
38. Mortgage rates to fall after Bank U-turn
39. Northern Rock customers: Don't panic!
40. Eight steps to fix all your finances

- Andrew Oxlade, Editor, This is Money

British Gas joins the conmen in our hall of shame

The country's greatest financial sleuth, Tony Hetherington (right), writes for the Financial Mail on Sunday and This is Money. His weekly column is a hall of shame that should be on everyone's 'must-read' list.

>>Check the archive

This week he shines his spotlight on serial conman Simon Hill, aka Simon Johansson, whose decade of deception has finally led to justice - not for him but for one of the men he worked for, Richard Dompier, who has just been jailed for ten years in the USA. Britain is criminally behind-the-times when it comes to dealing with its white-collar crooks.

Simon Hill is not a household name. But it is a name worth remembering as are so many of the names in Hetherington's files.

One thing I find particularly alarming about the exposure of scams and rip-offs is just how often our supposedly trusted household names