Jeremy Warner: Forget mortgage borrowers, what about savers?

Outlook: Even if bank rate falls to zero, the mortgage holder would still have to pay at least 1.5 per cent.

One of my colleagues has a tracker mortgage with Alliance & Leicester, taken out at the height of the mortgage boom, which fixes his interest rate at 0.31 per cent below bank rate and has no "collar" or "floor" to prevent the rate falling to zero if that's where bank rate ends up. With interest rates now falling like a stone – the Bank of England is expected to cut them again next week – he's laughing all the way to the pub. Since the summer, he's become several hundred pounds a month better off.

Contrary to the generally held view, comparatively few mainstream mortgage lenders have formally announced "collars" on their tracker products, making the furore over the supposed failure of mortgage providers to pass on interest rate cuts look like a lot of fuss about nothing. One lender which does have a collar on legacy tracker mortgages and says it now intends to start applying it is Nationwide. Yet its reasons for doing so strike me as entirely sound. Nationwide is not a usurious, profit-driven bank, but a mutually owned building society as much beholden to its depositors as its mortgage holders.

In the dash to help overstretched borrowers by cutting interest rates, savers have become a forgotten constituency. Look at the underlying statistics and you find they belie the image of Britain as a nation of debt-laden free spenders. In fact, the thrifty still outnumber the profligate by a considerable multiple.

These people are being hit hard by the constant round of interest rate cuts. The way things are going, they will soon be forced to pay for the privilege of depositing their money with a bank. In any case, Nationwide is doing entirely the right thing in seeking limited protection for their interests by saying it won't reduce mortgage rates below 2 per cent.

The lower the mortgage rate goes, the lower the savings rate has to go too. The mirror image of the colleague who finds himself hundreds of pounds a month better off is the responsible saver, who finds himself hundreds of pounds a month worse off.

One of the reasons borrowers think they are being "ripped off" by banks and building societies reluctant to pass on interest rate cuts is that it is now impossible to get new tracker mortgages at or below base rate. Such deals were very much a top-of-the-market, boom-time phenomenon. As these deals come to an end, householders find themselves forced to accept deals that track by 1.5 per cent or more above bank rate. In such circumstances, the "collar" becomes irrelevant. Even if bank rate falls to zero, the mortgage holder would still have to pay at least 1.5 per cent.

Ministers who berate banks for failing to lend at base rate speak with forked tongue. Does the Government really want banks to pay their depositors nothing at all? Even if ministers did perversely think this a good idea, it wouldn't in practice be possible, as banks and building societies cannot lend unless they can borrow, and in these markets, borrowing is expensive.

To remain operational, banks and building societies have to maintain a margin between lending and borrowing rate. There would be no better way to finish off a banking system which is already on its knees than to make it unprofitable. Yet that's the implication of the Government's mixed-up message. Rightly in most respects, nobody has got any sympathy for bankers now, but you cannot reasonably ask banks at one and the same time to lend more, cut their lending rates, raise their deposit rates, deleverage, get their balance sheets back into shape, and while they are about it, cure the world of all known diseases. The world doesn't work that way.