“I know what we should do,” one of them probably said. “Let’s get them to make populist comments every couple of days, showing how they identify with hard-pressed consumers by calling for reforms on any issue under the sun. It is a tactic that works well for Opposition parties, so perhaps some of it will rub off on Gordon and Alistair.”
As I recall, it is a tactic that also worked rather well for good old Maggie Thatcher in her day as Prime Minister, managing to make her fellow Cabinet colleagues seem totally spineless, unlike her, of course.
Having seen how ministers behave at close range over many years, I have no doubt that this is all a deliberate tactic designed to make Gordon and Alistair appear to be decisive and in control.
It helps, too, that Gordon is seen for now as someone you trust more to deal with an economic crisis than David Cameron. Also, no matter how boring Alistair sounds, at least he does not look like he just stopped wearing short trousers, as his Tory counterpart George Osborne does.
So it is that in the last few weeks, Gordon and Alistair have told petrol companies to cut their prices at the pumps while electricity and gas suppliers have been warned to reflect recent falls in the price of oil in their customers’ fuel bills.
Only last week, Gordon weighed in to the debate about credit card companies and the fact that their annual interest charges have not come down, despite the cut in the base rate. He is threatening to call them into Downing Street and read them the riot act unless they mend their ways.
It is all getting too bizarre. You half expect Gordon to intervene on behalf of Laura White, the surprise evictee on The X Factor, or make a statement on the fact that veteran journalist John Sergeant’s appalling dancing nevertheless edged out M People singer Heather Small on Strictly Come Dancing.
The problem for me is that it is all starting to get rather silly. As everyone knows, credit card charges have never borne any relation to the base rate. They reflect their issuers’ assessment of the risk involved in offering someone credit, plus the fact that more than 60 per cent of all debt is paid off inside the credit-free period, thereby incurring no charges at all.
In the majority of the remaining cases, any amount owed is paid off inside three to six months.
Besides, I am not sure that telling off the card issuers makes sense. Credit card interest rates rose from an average of 16 per cent APR a year ago to 17 per cent APR today, so in the grand scheme of things we are talking about extra interest of 66p a month on a rolling £1,000 card debt. At other times, this new urge to intervene comes over as totally pointless, such as when Gordon recently warned member nations of the Opec oil cartel not to cut daily production in a bid to keep prices high – as if they were ever going to listen to what Uncle Gordon had to say on the matter.
In fairness, this tactic can work. After the base rate cut announcement by the Bank of England last week, Alistair’s arm-twisting succeeded in forcing some banks to cut their standard variable mortgage rates by the full 1.5 percentage points.
Given that one million borrowers are estimated to be on standard variable rates and so many more are expected to come off fixed rates in the next six to 12 months as their deals come to an end, this is a welcome development. Even there, what has also happened is that all lenders have withdrawn existing tracker rates and, where new ones are offered, have widened the margin between the Bank of England base rate and the rate they charge. Moreover, many trackers have collars that prevent borrowers benefiting by more than 0.25 percentage points from any future cut.
In any case, headlines about HBOS, Abbey, Nationwide and Lloyds TSB cutting their SVRs mask the fact that, at the time of writing, Alliance & Leicester, Bradford & Bingley, Britannia, Yorkshire and Bristol & West are among more than 70 lenders who have so far refused to do so.
Frankly, I am starting to get very slightly bored with it all. Is there someone who can call a halt to all this fake interventionism, stop pretending to be our saviours and tell them simply to get on with the job in hand?
Nic Cicutti can be contacted at firstname.lastname@example.org