Assetz® News - Taking control

Taking control

6th October 2008 |

Although the government recently showed its willingness to intervene in matters concerning the property industry by adding the nationalisation of Bradford and Bingley to Northern Rock, it has been in a position of some helplessness regarding many of the events and movements that are determining the course of the financial crisis.

Chief among these, of course, was the US government's bid to tackle the root cause of the international liquidity problem - the losses in the American banking sector. Having rebuffed the initial attempt to push through the $700 billion (£399 billion) rescue package, Congress passed a revised version on Friday by 263 votes to 171.

While the action now being taken across the Atlantic may help start the recovery, others have urged further steps to be taken here. One such step could concern one move that has an obvious interest for property buyers; the Bank of England base rate.

At the weekend, Liberal Democrat Treasury spokesman Vince Cable argued that Mr Darling should invoke his power to temporarily curb the independence of the Bank of England. Urging action that would "clear the road" for a large cut in interest rates, he said Mr Darling should suspend the two per cent inflation target for now and tell the monetary policy committee (MPC) to priorities the economy with a big cut.

Mr Darling, however, was having none of it, saying of the MPC task: "That remit was designed to deal with difficult times as well as the good times."

But if the government is not looking to apply a firm hand in matters concerning the property sector through its relationship with the central bank, one move in the prime minister's post-conference reshuffle may indicate the opposite. Caroline Flint has been moved on from the post and made the minister for Europe. In her place comes Margaret Beckett.

Ms Beckett has some heavyweight credentials. A junior minister in the Callaghan government in the 1970s, she became deputy leader under John Smith after the Labour defeat of 1992 and was briefly party leader when Mr Smith suffered a fatal heart attack two years later. Although she lost the leadership and deputy leadership contest to Tony Blair and John Prescott respectively, she held several senior posts in government after 1997, including becoming the first ever female foreign secretary in 2006.

The presence of such a prominent figure in the housing portfolio may suggest that Gordon Brown is keen to achieve more in this policy area. Such a move has not escaped the notice of Gideon Amos, the Town and Country Planning Association chief executive. Welcoming the appointment, he remarked on Ms Beckett's "vast experience in the cabinet".

Mr Amos added that he believed Caroline Flint had done important work in areas such as eco towns and growth points, adding: "These remain vital initiatives for her successor." It may well be that in seeking to ensure these initiatives succeed, Gordon Brown has provided a statement of intent with this appointment.