Lessons for the professor

Professor David Miles believes that mortgage lenders should play fairer with borrowers and that homebuyers should be more sensible. That, in a nutshell, is the conclusion of the professor's report into why more of us do not have long-term, fixed-rate mortgages.

There are some innovations to be welcomed, such as the "what if" document, which would spell out the impact of interest rate rises on monthly repayments. The professor also wants consumers to be able to buy insurance to cover repayment hikes if interest rates rise above a set level - with any payouts untaxed.

But some of the other suggestions portray a level of ignorance among home buyers that is hard to credit. Homebuyers and investors have undoubtedly been hoodwinked by shiny-suited salesmen pushing complex pension and endowment policies. But when it comes to straightforward mortgage borrowing they are definitely a little more savvy.

Prof Miles says homebuyers should look beyond initial low repayments to the deal on offer at the end of the term, and wants an end to existing borrowers subsidising newcomers.

But many first-time buyers factor in an expected rise in income as their job experience grows. And once in they are not tied in when the term expires. When short-term fixed rates come to an end, most borrowers do not wait around to be exploited on an uncompetitive rate. As the Halifax pointed out yesterday, only 10% of its customers are now on the standard variable rate.

Forcing lenders to charge the same to all customers would inevitably mean an increase in the average rate paid, and a decline in the number of first-time buyers who can therefore afford to buy, and are essential to a healthy market.

Prof Miles's mission was to discover why UK homebuyers shunned long-term fixed loans common in other countries, such as the US. However, American mortgage rates are higher than in the UK, even though the base rate is substantially lower - and the US is moving towards the British system. Gordon Brown commissioned this report because, if the UK joins the euro, changes in eurozone interest rates would have a bigger impact on households here than on the continent because of our shorter-term home loans. As the likelihood of the UK joining the euro has receded, so has the need for many of Prof Miles's proposals.

Psion fit for takeover


After the defeat yesterday of rebel shareholders who wanted Psion to keep its 31% stake in mobile phone software venture Symbian, the UK technology firm is an obvious takeover candidate.

Its major shareholder, Phoenix Asset Management Partners, has made it pretty plain in voting its 13.5% stake against the motion that it is dissatisfied. Many smaller shareholders are also disgruntled with chairman David Potter's capitulation in the face of Nokia's refusal to countenance a flotation of Symbian.

Regardless of whether or not the other Symbian shareholders - SonyEricsson, Samsung, Panasonic, Ericsson and Siemens - now muscle in on Nokia's takeover, Psion will not be involved.

The remaining Psion operating company, Teklogix, has so far failed to generate the excitement among investors that Symbian did. Psion bought the company, which provides mobile solutions to industrial customers, in 2000 for £240m and it was immediately hit by the slowdown in corporate spending on IT. It has clawed its way back and looks poised for growth. Teklogix, however, is a long way away from what everyone once hoped Psion would become. After its failure in the personal electronic organiser market - where the company was dogged by technical problems - Psion's foundation of Symbian gave a glimmer of hope that Britain would have a major force in the consumer electronics field.

With yesterday's vote that dream has been snuffed out. The time may now be right for a vulture to carry off the carcass.

Bush move backfires


Six months ago, in a blaze of publicity, George Bush announced plans to create a US manufacturing czar. But what many regarded as a sop to blue-collar workers in swing states ahead of the presidential elections has backfired in spectacular fashion. The administration's choice for the job, Anthony Raimondo, withdrew his nomination late on Thursday night. His decision came a day after Mr Bush's presumed White House rival, John Kerry, pointed out that Mr Raimondo's own company had just axed 17% of its workforce and opened a plant in China.

The administration's concerns about the attitudes of voters in states such as Pennsylvania, Ohio and Indiana are well founded. Since Mr Bush took office, the US economy has lost 2.3m jobs, with the losses felt most acutely in manufacturing. During his tenure the sector has watched 3m jobs vanish.

The blame is repeatedly laid at the door of outsourcing jobs to countries such as China or India. It's arguable that Mr Kerry would be able to do anything to prevent what many see as an inexorable slide to cheaper markets. But it won't stop him using the loss of jobs as ammunition or from having some fun at the hapless president's expense.

As his spokeswoman said: "This administration is so out of touch I'm surprised that it didn't just outsource this job to Halliburton in a no-bid contract."