The Great Debate UK

“Always a borrower, never a lender be”


-Laurence Copeland is professor of finance at Cardiff University Business School. The opinions expressed are his own and do not constitute investment advice. -

The first chapter of the Eurozone crisis story has ended as expected, with the Germans (and Dutch and Austrians) left to foot the bill, repeating the pattern we have seen in the last couple of years, at the micro and macro level: savers bailing out borrowers, the solvent rescuing the insolvent, the responsible minority rescuing the feckless majority from the consequences of their irresponsibility. No wonder banks don’t want to lend and firms don’t want to invest.

Apart from the injustice, the really damaging aspect is the message it sends out loud and clear about the way modern Western democracies operate. The younger generation will be noting the lesson — even if David Willetts, the Minister for Universities, is not — that those who work and save must bear the burden of carrying those who do neither, because nowadays the welfare state operates at all levels: personal, national, global.

The choice is, as they say, a no-brainer.  Shakespeare’s Polonius needs updating: “Always a borrower, never a lender be”.

The devil will be in the Budget detail


fay– Fay Goddard is chief executive of The Personal Finance Society. Any opinions expressed are her own. —

Though it’s a cliche to say that a budget is eagerly awaited you can be forgiven for saying so this time around. This year all eyes and ears will be focused on the Chancellor’s economic figures and forecasts. The big question is how will he balance the books – cut public spending or raise taxes? In the run up to an election cuts are ideal but needs must. What will it mean for personal finances?