Getting credit to refuel the economy

Of course there is evidence that all options are still on the table.....

Labour thrashing around like a headless chicken announcing an endless stream of policies, most of which are detrimental or stolen from the tories!

Crash Gordon must resign for his neolithic incompetence, boundless arrogance and inability to answer any direct question that is put to him.

Mr Robinson,

Can you twist the Chancellors arm and ring Gordon Browns neck for a 12 month stamp duty holiday. I am a solicitor dealing with clients in the property market who cant neither sell or Buy. Why cant the govenment do something so simple to stimulate the property market.

As matters stand at the moment the revenue from stamp duty must be virtually non existant. They have nothing to loose and alot to gain by doing this.

Alan in Mill Hill

Brown won't say that he still believes in the predictions outlined in the PBR for this recession to end after the next two quarters. Damning in his silence of one of the most extroardinary pieces of fiction that's been seen in this country. Even Dan Brown's books are not as pie in the sky as Labour's economic predictions.

And a new soundbite today. Labour - 'The achieve nothing party'. Sums them up.

Call an election soon Brown...or you won't have much of a party left come 2010.

no one yet knows what will make the difference.

So is every one a novice now?

ps. Mandleson - oleg - tarriffs - house - the list grows, when are you going to ask?

In claiming that the Labour £20 billion loan guarantee is radically different from the Tory proposal of a £50 billion loan guarantee, the government is clutching at straws.

It must be clear to everyone that the Tory idea, first mentioned months ago, is now seen by Labour as, in principle, a worthwhile policy to follow.

It seems incongruous for Labour ministers to claim that the Tory idea was 'unfunded', considering the vast amount of debt to which they are committing this country. Surely the question of 'funded' or 'unfunded' has now gone out of the window?

Panic buying Petrol or stockpiling Cash & Credit will be worse.
Buy a Bicycle with accessories paid by cash for 250 pounds.

Blimey, it seems Nick does read the comments after all! Or at least some of them.

Don't suppose you took the opportunity to ask Mandleson about his time on a yacht at all did you? Or about how he funded his latest villa?

Of couse the real problem is that Brown wanted to save the economy in the same way he would save a drowing man - by taking his foot off his head.

However he has only just realised that his victim (the private sector) weren't just gasping for air, they were unconcious and floating face down.

Its too little too late, and Labour are entirely to blame.

Noone will have confidence in the UK economy while we have these oafs running it -- a new government is need.

The government has no idea how to solve the central economic problem which is that banks are heavily discounting the value of credit because of their new found risk aversion which is hampering the real economy's recovery from household's reducing consumption and asset prices unwinding (net wealth diminishing). Even now the Prime Minister and his band of arch-socialists are banging the keynesian drum believing this to be a simple demand problem which we can spend our way out of. They have made things immeasurably worse by increasing debt to such high levels that they had to announce specifically what taxes they will increase in order to calm the markets' fears. This coupled with expectations of deflation and banks' reluctance to lend has put us in a situation which mildly resembles Japan's liquidity trap of the 1990's.

All the government can come up with is half-baked reformulations of Conservative policies that would have been implemented months if not years ago under a Conservative government. And they still have the sheer nerve to claim the Tories are a do-nothing Party. They have absolutely no idea what to do unless the Conservatives hold their hands like a toddler. The sooner they are removed from office the better.

Recently I heard on a news programme that the Government is charging the banks 12% interest on the money supplied for re-capitalisation. Surely this is one of the main reasons banks are reluctant to use this money for lending to businesses, etc. What business can lend money at maybe 6% when it is paying 12% for the cash in the first place. This rate needs to be re-negotiated ASAP or the whole system will just grind to a halt.

Nick

You could have gone into a bit more detail about exactly how Mandleson was planning to help businesses.

He must have something to hide if you didn't even try.

And thus, by easy stages, we return to the government 'picking the winners'

Peter Mandelson would no doubt thoroughly enjoy the task. But governments just aren't equipped.

Nick,

at PMQs Brown announced that almost 25,000 companies had been helped by allowing them to delay paying the taxes due. How much has this cost the taxpayer because somebody has to pay. How will the government ensure that we get this.

What worries me is that eventually these taxes must be paid. I hope that the banks are not going to have to pick-up the bill for these people evading their obligations. Taxes are only due on profits, or on taxes deducted from employees, I hope that a serious problem is not going to result in contributions deducted at source not being paid over.TAG.

The business loans could well keep a struggling business afloat by easing the strain on its working capital and cash flows. But if the product or service is not being purchased by consumers, then the loan is simply postponing the inevitable.

As the populace is aware that tax rises are equally inevitable in the future, the prorities are seen as paying off current outstanding debt and or save for the proverbial rainy day. What would make a difference is increase disposable income i.e. income tax cuts as proposed by the Germans and Obama's fiscal stimulus.

Real pressure needs to be exerted on the utility companies to lower tariffs on gas and electricity. Natural Gas price was always derived as a factor of the oil price. It was outrageous when the oil price fell from its peak of USD 147 a barrel, that the parasite utilities broke the link and left UK consumers paying through the nose - and the government wonders why people are not spending! The utilities first promised tariff cuts in the New Year, then spring and now its Autumn 2009 (maybe).

Regarding the part nationalised banks has the B of E actually handed over the dosh yet? No one seems to know.

The ban on short selling ends this Friday. Four of the five worst losers on the stock market today are banks (2 private, 2 part nat). Barclays has lost 20 percent value over two days and announced 4200 redundancies worldwide also over two days.

Is it wise to end the ban just now? After Lloyds was fined USD 350 m by the Americans, Barclays is also being investigated for the same offence. Disclosures of this nature will only add to further turmoil in the markets.

Nick,

When you met with Peter Mandelson this morning did you also ask him about his mysterious ability to buy houses beyond his known financial means? Yesterday, The Evening Standard posed some very awkward and potentially serious questions of our buisness secretary. As the BBC's political correspondant did you follow up on this line of questioning? Or as in the Deripaska affair did you give him a bye? Remember Mr. M still hasn't given a full account of his relationship with Mr. Deripaska (unlike Mr. Osborne). Now you hounded the shadow chancellor to the gates of hell on this subject and still refer to it on occassion. Why the disparity in the line of questioning?

you will not get a labour or tory politician anywhere near pushing any bank around nor will they demand anything from them. as has been witnessed over the past months they are more than happy to hand out tax payers money to stop them going bust, just don't expect them to have any strings attached.
I for one am well hacked off to find that my taxes are paying people flaming bonuses despite being the ones who have summarily failed and wrecked the banking system in this country
the banks are running rings round the politicians
Q. where do politicians that loose their seat end up ???
A. that will be the same institutions that are getting all our tax money with no strings!!!

Well, it is nice for Nick to try to have a conversation, but why do I feel I'm being told "there, there"

and as for

"...everything is still on the table and no one yet knows what will make the difference"

If those people in the Treasury don't know what to do why don't they just admit it and get someone in who does?

Why do I get the feeling that there is no detail to these plans?

Have you asked the banks what they understand by this policy? Maybe then we might come nearer to understanding implementation dates.

Credit may be the petrol that gets the car from A to B, however many businesses have the equivalent of very large expensive cars and can't afford the petrol.

Nick,

I'm mildly encouraged that you are not only reviewing comments on your blog but even responding to them. Engaging in discussion with us seems to me a good recipe for reducing the number of comments from a select few that constantly shout at one another rather than consider and respond to the content of your posts. More feedback from you, sir, please!

Irwin Stelzer remarked that credit was becoming easier in the US because of the trillion dollar action by government and its agencies. He remarked that the UK government's financial action was nothing like as proportionate and that much more needed to be done.

This sounds very much like agreeing that the £20 billion loan guarantee scheme is woefully inadequate and much more assistance needed to be provided. That suggests the Tory £50 billion proposal makes more sense.

My advice to GB, and to many of those who comment here, is less posturing and more positive action!

At 1:30pm on 14 Jan 2009, djlazarus wrote:

Blimey, it seems Nick does read the comments after all! Or at least some of them.

Don't suppose you took the opportunity to ask Mandleson about his time on a yacht at all did you? Or about how he funded his latest villa?

I've seen no mention of his villa at all on the BBC. And considering his actions 10 years ago this is puzzling. Just because he is not directly elected, it doesn't make the man unaccountable. If he's had his fingers in the trough again, he must go...and he can take Gordon with him!

Mandy is now being questioned about the sums for his 2.4 million pound bank mortgage not adding up with is income.

Yet he is the one handing out Taxpayers money to the banks

Surely this is a conflict of interests?

He should not be dealing with giving money to the banks until the questions about his income and mortgage payments have been answered.

What a busy busy lot this government are

Thinking up a policy a day is an easy way of bluffing your way through when you haven't a clue what you're doing.

After all the man in the street is so thick he hasn't a clue anyway so believes everything he hears.

If you tell them often enough they'll believe it. Brainwashing it's called

Well we may have believed it eleven years ago when everyone had had enough of the tories but fortunately most of us have now had enough of labour.

Most of us are clear headed and see through every pathetic bit of spin that comes out.

Even more so when all the old time spinners are back in the labour fold.

The real lesson is that you should never try to turn the clock back. There are always nasty gremlins ready to jump back out of the cupboard.

Well what did we expect

WE ARE IN A RECESSION

Whilst Flash Gordon is already saving everbody else, the Prince of Darkness is only recycling a few other ideas ............

I seem to remeber it was difficult to get a credit card, overdraft or praise be even a mortgage after Black Monday.

Dont worry next week we will be supporting Insurance Companies or Travel Companies orsomeone else....under some new scheme that involves more civil servants judging cases against guidlines and handing out a bit of cash.

Nick what we need from Gordon is a little Disney magic. I mean, when you think about it he's already living in the magic kingdom. The unreal but strangely beguiling world where dreams can come true. I think, and I'm sure that when all the stuff is released under the billion year rule for releasing sensitive government documents, Good old Gordon will be shown to be a shining example of prudence, good sense, and unimpeachable honesty. So Gordon keep waving that magic wand of economic prudence. You and all your pudding headed friends all all we have right now.

Government appears to be attempting to resuscitate the entire economy in one go, but by using insufficient resources to do so. Perhaps this is a tacit acceptance on their part that they do not have the firepower required at their disposal, but all the more reason, therefore to target policy more effectively.

A number of people are calling for the housing market to be targetted and I think there is a danger of this being misconstrued as a desire to see the market pushed back towards unsustainable heights, which would be a mistake. However, bearing in mind that a healthy (but not overheated) housing market can sustain employment across a wide variety of sectors, including, but not restricted to, construction, professional services, retail and other services, there is a reasonable argument to be made that the government would get more bang for their buck if expenditure was directed towards this sector.

Creating a national mortgage bank out of NR, B&B and RBS could allow funds to be directed towards first time buyers. There could be a cap on loans to prevent rampant price inflation, but a new flow of buyers at the bottom will feed through to the rest of the market. Previous suggestions regarding a temporary scrapping of Stamp Duty would also be helpful.

Since most UK housebuilders are UK companies, mostly using UK manufactured materials, there is no discernable impact on the balance of payments (i.e. most of the stimulus stays in the UK and gets recycled), so there is an added multiplier effect.

I am not advocating ignoring the rest of the economy, I am simply trying to identify where the most impact can be had from limited government resources. There is a mass of capacity in the housebuilding industry at present and well targeted intervention could, I believe, produce significant results quite quickly. People are looking for a reason to feel more confident and a few months statistics showing increasing housing starts, sales and new mortagages might, just might, help restore some confidence.

Nick you say "Intriguingly when I asked Peter Mandelson this morning whether he could rule out nationalising the banks he didn't do so."

Quite! And at PMQs today Comrade Brown made several references to the government 'buying shares' in private companies

Be afraid. Be very afraid.....

In the good old days, a business with a really decent and profitable idea could issue shares in return for cash from investors.

The said company could then pay its key suppliers in advance for the necessary raw materials. The company would perform the value add, sell its products, get paid by its customers and bank the profit.

Eventually, if the product idea was indeed sound, the company would have enough cash to pay its investors a dividend, and even negotiate 30 days terms with its suppliers.

I wish the British economy had been built on slow and steady growth, rather than tryng to "lever" its way to fast profit by borrowing "cheap" money from foreign banks.....

Now all the asset bubbles have burst, there are no investors left with any cash to lend.

#10 Tries_to_be_fair

You have identified Brown 'business genius', the same shared by all the loony left.

question 1) How to raise more tax?
labour answer) Put up top rate tax
flaw) It tax rates are too high they will be avoided, or moved off shore

question 2) How do you make money out of lending?
labour answer) Charge massive interest rates
flaw) If the interest is too high, noone will borrow from you.

question 3) How do you improve public services?
labour answer) Spend more on them
flaw) You cant be sure it will be spent wisely

etc...

These oafs have never had to deal with the real world. "Joined up" government and joined up thinking are good ideas - a shame labout never got the hang of them.

Labour have said some of the right things, but they have always failed to deliver.

Labour should stick to outlining what they are going to do and drop this "Do nothing party" label for the Tories. It was always going to backfire because the Tories are not in power so cannot therefore do anything and Labour has not the faintest clue how to solve the current problems (who does?).

While they are at it Labour should:
1. Drop this continual utterance of "global".
2. Admit some responsibility for the mess we are in. Afterall they have been at the helm for over 10 years.
3. Stop banging on about governments from history. I thought these are unprecedented times.
4. Show the GB public a plan of what they are going to do. This continual drip-drip of announcements (or leaks!) leads one to think they do not have a plan but would rather keep digging.

Oh, and 5. Call an election. We should all have a say whether we want to risk bankrupting the country or not!

The government missed its best opportunity to nationalise banks, when it bailed them out. If it had let them go into administration, then if no private buyers came forward, they could have bought the retail parts as going concerns from the administrator, without the investment arms which had failed so badly, and refinanced them as necessary. It would probably have been possible to sell them back into private ownership, once the crisis had passed.

Now that the government is a major shareholder it has to keep them going to protect its own investment. If it were to nationalise them it would have to compensate private shareholders on the basis of todays value of the banks, which was enhanced by what now appears to be the over generous terms of the bailouts.

While they have some private shareholders, the managements of the banks are obliged to act in a way which keeps shareholder value as high as possible, and therefore they are bound to take advantage of the state of the credit market to charge as high rates of interest as they can.

If the government were to use the banks that it completely owns to offer
loans that undercut those offered by the commercial banks it would be breaking EU rules.

The only option remaining seems to be to stuff the mouths of the banks with even more gold to get them to implement the deal the government thought it already had, for them to resume lending freely.

Meanwhile a serious sterling crisis seems to be brewing up. Gordon Brown may yet regret that he blocked entry into the Eurozone back in 1997.

Using credit to refuel the failing economy, is a bit like throwing petrol on a spent-out barbecue ....

Nick,

RE: PMQ's

The PM refused to stand by his chancellor's growth forceasts because they were dependant upon the level of "international co-operation". Or so we are told...

BUT

According to the New Labour narrative (repeated by the PM today) the whole world is already copying his financial stimulus plan....

SO

If the world is already following Gordon, how can he possibly complain about levels of "international co-operation" at a later date?

Downing Street can't have it both ways. Perhaps you might like to ask him or the Dark Lord about this apparent contradiction!

13 TA griffin TAG

This concerns me too.

The idea of VAT being deferred for six months as outlined by the Tories made sense as it gave highly stocked businesses time to convert stock to cash before Christmas and helped crucial cash flow.

Taxes and other contributions being deferred can affect employees who are made redundant and delay final wage and redundancy payments if the company goes bust and if these haven't been paid.

Another dangerous situation in the making by yet another ill thought out policy by this government.

Nick, not sure what will refuel the economy but I am fairly certain that precious little of what Gordon Brown has recently introduced will improve things.
Paying employers £2500 to take on long term unemployed is hardly likely to create any new jobs, but I expect that Morrisons, and any other firms looking to expand, will be very happy to take Gordon's hand outs.
Similarly his reduction in VAT is about as likely to increase spending as were King Canute's attempts to stem the incoming tide.
Most people in the UK are looking very carefully at their spending habits and trying to curtail anything which is unneccessary. I think the Govt. should be doing the same, because it looks as though they are going to need an awfully large amount to fund the next few years unemployment benefit.

Newlabour

Spendalot. Achieve nothing.

Worse than useless.

Call an election.

Is'nt this the question you should have asked Gordon Brown two months ago or are you waiting for for Cameron to be elected and then grill him?

No 35, yes, an election would be good, even if all it achieved was to wipe the smug smile off the Golem's face. The worse it gets the broader his smile becomes.
But would an election wipe the smile off his face, or do secret protocols to the bank bail out assure him of a nice, cosy non-executive directorship when he leaves Downing Street? It would be far better to have him make the humiliating and degrading trip to the Job Centre.

Oh dear, Nick.

Another interview with Mandelson (were you summoned to appear?) and still no questions about:

* The yacht
* Deripaska and the Aluminium Tariffs
* His new house (isn't it nice to see some people aren't too badly affected by the credit crunch)

Perhaps you could also ask him what remit he thinks he has from the British voter, having twice been disgraced into resignation, and now parachuted into the Lords....

The man has proven that he is unfit for government, and now we cannot dislodge him until he dies.

Nick why no blog on,

The Royal Mail

Mandelson - how did he afford that house.

Mandelson - how can he get away with leaking information before it is announced in parliament.

Damian Green - What is happening and why is it taking so long.

Labour leadership - who is really leading the government Brown or Mandelson.

I would rather "do nothing" and achieve little, than do everything at great expense to the taxpayer and savers and achieve little.

I see Barclays are doing a "reverse Gordon Brown".

Gordon Brown - n: an attempt to publicly announce the same news on separate occasions to give the appearance of multiple instances of similar news.

Antonym -

Reverse Gordon Brown - n: an attempt to publicly announce similar news on separate occasions to give the appearance of a single instance of news.

Nick, there's a small grammatical error in your piece:

"Intriguingly when I asked Peter Mandelson this morning whether he could rule out nationalising the banks "

should read

"Intriguingly when Peter Mandelson allowed me to ask him this morning whether he could rule out nationalising the banks "

Because there is no other reason why you continue to pussyfoot around him, and not ask the pertinent questions about receiving hospitality on Deripaska's yacht and a subsequent change in aluminium tariffs.

WHY WON'T YOU ASK THE QUESTION?

What are you afraid of?

Nick

At PMQs brown said we were going to be buying shares in IT companies.

This is the first I have heard of it (not that I claim to be particularly well informed).

Who are the beneficiaris of this to be?

Which IT companies are in trouble?

Why is it important for us to bail them out?

So all this broohaha and we find out the earliest it will be become operational is March.

Still no actual explicit guarantees from the banks yet

Anyone doing some questioning?

Nick,

I thought that Andrew Neil made a very telling contribution before you came onto the set for PMQs.

Can anybody tell me who is actually directly accountable to the electorate over this whole financial disaster. Gordon is not an elected PM, Lord Mandelson is not elected, Lord Myners is not elected, baroness ? is not elected, neither is the new Lord Davies. Is anybody in this government responsible for the economy elected. I deliberately ignore Darling because he is just a puppet. TAG.

#43

I bet they are the very IT companies that are doing work for the NHS and ID cards. TAG.

Nick,

At PMQs Brown said we were going to be buying shares in IT companies... "The White Heat of technology" anyone...?

When will Labour learn.....?

Interesting post Nick
It is hard ,as a businessman, to know if the credit is being turned down for the reason that the business case has not been made well enough, or if the bank does not have the cash to lend....both excuses give the bank an opt-out.
What is not often commented on is how the screws get turned.
Much lower than market residential valuations were the policy of some of the banks, thereby pushing down loan -to- true valuation criteria.
In my case the the bank demanded that additional collateral properties were used as security for the bigger loan, these were then not free to use as a back-up as they were sellable before and each would generate a year's interest.These collateral properties would have funded the construction work.
The next thing was that many development loans now have been made to be self-funding BEFORE the development is completed.This ban on rolling up interest makes the development less likely to happen.
The other thing is the abandonment midproject of development before a client has been found to let the building.
There has been utterly bad faith mid project by the banks, hastening the demise of the lenders. And abandonment by a bank midproject guarantees that the project will fail.
What is needed is NOT a return to lower property values, as these will completely discourage the return of the construction industry.
We need news management,so thank God Mandy is back.... we need a return to 100% ltv, starter discounts and a raising of stamp duty threshold to 1 million pounds.We probably need new start-up banks, new building societies, and new ideas about capital gains tax, inheritance tax, pre-payment of cgt, cgt exemption windows and sliding scales.We need 100% guarantees on all bank deposits with no limit.
Gordon Brown knows this, and some of them are Tory favourites, but if we are going to get out of this mess Labour have to pinch and convert ANY good ideas and get us all moving . And boy will he be slagged for this ,but if he says it with a smile and a wink he would be halfway there.

The economy shoud not be refuelled by credit but defuelled by less of it. This is the real story that the government stays very quiet about while it uses the banks as smokescreen to hide the economic truth.

The UK economic situation as of 2006 was unsustainable and this is the crucial thing to understand why the UK will suffer a contraction of at least 8%. In 2006, UK consumers were spending more than their disposable income, while companies were gearing up and Brown ran a budget deficit. That represents disequilibrium, whether banks increase their lending or not. Now consumers will start saving say 10% of their income, shaving the same % of consumption and 6% of GDP (consumption accounts for 60% of GDP). In addition, an extra 1 million will become unemployed, which represents 4% of those employed in the private sector, explaining why I expect another 2% of GDP contraction giving me the 8%.

This contraction should run its course and more bank lending should not be encouraged. Levels of lending in 2008 were higher than in 2007, as another page of this BBC site points out, so the government should not try to hide behind banks. Neither, with all respect and sympathy, should businessmen. Mr Robinson interviewed Mr Wagner who supplies services to retailers. Retailers are in trouble and it is therefore no surprise Mr Wagner struggles to get a loan. Even in case banks were very healthy, at this stage in an economic cycle it is entirely logic for banks to lend less and for companies to borrow less as unemployment increases and house prices decline. Financing working capital seems to be all the rage. But what will happen when a company is still stocking 2008 prducts in 2010 while the competitor on the high street is just about to reveal the new 2011 line-up?

43. At 3:15pm on 14 Jan 2009, the-real-truth wrote:
Nick

At PMQs brown said we were going to be buying shares in IT companies.

This is the first I have heard of it (not that I claim to be particularly well informed).

Who are the beneficiaris of this to be?

Which IT companies are in trouble?

Why is it important for us to bail them out?

XXXXXXXXXXXXXXXXXXXXXXXXXXX

May be this is the target of the Quantative Easing /Printing that they are about to start.
Thats why helicopter Ben was here.

I 've been banging on about the stupid July showing growth PBR figures on here for a while. Its good to see they are now being put on the spot about it the longer the recession is the higher the debt levels will climb. 1Tril 2 Trill pounds where will it end?

Well said TAG

no-one is elected in this administration.

(her) name is Baroness Vadera.

she's the one who spent ahlf the weekend on the phone trying to save Woolworths.

What a total waste of taxpayers money. (for it is we who pay her salary)

Call an election.

#32 ngodinhdiem

Very good post, exposing another self-contradiction in Gordon's thinking, and well worth readers tracking back to. Shame the paid political analysts didn't notice it.

I doubt if Labour ministers know what a contradiction is though. Their beady eyes wouldn't get past the first three letters were they to look it up in a dictionary.

So now we know that Gordon decided to gamble 12 billion before he knew what other world leaders would do.

Somehow this reminds me of the billions he lost on selling off the UK's gold reserves, and telling the markets in advance. Can we have someone who looks after British interests in power, please?

When we are in a world recession and businesses are going to the wall, a lot of companies are putting workers onto a 4 day week so they do not need to have redundancies, why do people want the BBC to ask the secretary of state about a yacht, aluminium and a villa? Actually I would rather find out about how my business will survive to the summer if I get into difficulties -so keep up the good work Nick.

Whilst I am sure that the professional party bloggers are entertained by making what quite frankly are points of little interest to those of us actually running a business -It is much better to actually discuss the options. In truth I doubt if any party has all the answers because things are changing on a daily basis. If the government has to increase the £20 billion loan scheme because its not big enough so what? To me that would just show its working frankly. Quite often in business you start with a budget for a programme that has to be increased because something appears that needs sorting, often you also come in under budget -not an unsual occurrence.

Also I don't really care who's idea it is as long as it works.

Credit where credit is due Nick, no pun intended, a non-partisan piece from you, and you mention comments from bloggers as well, so well done!

Could you please ask Mr Mandelson though, if the Loan Guarantee Scheme is a good idea now, why it wasn't a good idea 2 months ago when suggested by the Tories?

Thank you.

#34 towny44

" .... I am fairly certain that precious little of what Gordon Brown has recently introduced will improve things."

It's beginning to look that way.

" Paying employers ?2500 to take on long term unemployed is hardly likely to create any new jobs, but I expect that Morrisons, and any other firms looking to expand, will be very happy to take Gordon's hand outs."

I haven't seen the specific detail, but it does look more likely to be off help in "low-training" jobs than others.

GBP2500 may be useful for some employers and tasks, but probably hardly dents the cost of recruitment and training for others.


"Similarly his reduction in VAT is about as likely to increase spending as were King Canute's attempts to stem the incoming tide."

We often forget that when Canute told the tide to stop coming in, he was actually showing his followers that, despite his powers as a king, he could not control nature. In fact, he was pointing out the power of the tides.

In effect, his surrounding lords thought he was all-powerful and he sought to show his limitations. Wish Brown had a similar mindset!

I understand that the government plans to inject support for floating windmill rigs, to gain poor-efficiency, high-cost wind power. How much are they pouring into wave and tide power? And how much for bio-mass gas? (The latter can't even feed into the "national gas grid", so is converted into electricity - thus adding production cost and wasting efficiency - for onward sale. Seems a bit daft!)

"Most people in the UK are looking very carefully at their spending habits and trying to curtail anything which is unneccessary. I think the Govt. should be doing the same, because it looks as though they are going to need an awfully large amount to fund the next few years unemployment benefit."

Sad thing is that THEY don't fund anything... Taxpayers do! There has never been any personal liability attached to central government. You can take whatever tax you want, until the peasants revolt. You can spray it over whichever pet projects you choose. Then walk away, with a guaranteed pension - often into well-paid consultancies or directorships - leaving future generations to mop up after you.

It's interesting that many local councils are starting to react to reduced income levels by considering reduced staff numbers. That's what businesses have to do, if they have squeezed other areas of cost-efficiency. Of course, councils have centrally imposed "caps", so at some point they just have to react.

It's about time central government started living within their budgets. Had they done so since 2001, the mess we are in would at least have been more financially affordable.

Ok, I don't get it .
How will giving the business that are struggling now help, If they are not selling and people are not buying how will they pay back loans as well as keep up with their overheads?
This Bust has no end in sight, are they going to spend more money on business that are going to go bankrupt when they can not repay the loans?
Is it all just more smoke and mirrors from Labour?
The talk of an election has all the trade marks of a Party wanting to look good and stave off the worst until after the election.
The country is in the hands of a self serving, manic, fool with Lord Mandelson, (God help us) for a side kick.
Why the Unions are giving money to this crew is beyond reasoning.

#368 regmitchell

What can I say? - Maybe it's no surprise, and understandable after hundreds of years of a nation being effectively disenfranchised, patronised, belittled etc. etc.!

After all, a lot of you lot are very arrogant on the back of being 'British and superior'. (Does the rest of the world really think that now? Or have successive British governments spent it all believing they could regain it, after Churchill's humiliating blank from the top table after WWII? - ouch!)

;->

Best not get into it, except that bluelaw is heartfelt and honest and not to be mistaken for hateful and malicious (like some unionists?)

:-)

For all of the Jonahs on this blog.
You all think that reigning back, turning off the taps is the answer to the noughties splurge.
You blame the splurge, but it was a heck of a lot better than the drought we are in.
In individual cases it makes sense to save, but as a herd, we are like lemmings voluntarily killing our hitherto strong economy .
I think the green movement, planning conservation, congestion charging, banning school trips outside holidays,putting up the cost of flights, allowing cheap holiday companies to fold, whining about CO2, MAKING US OBSESS ABOUT OUR RUBBISH, has got a lot to answer for.
All this depressing pseudoscientific garbage about the unsustainability of economic progress has made us tax ourselves into depression. Funny how only the rich countries can afford to save the planet is it not!
OK maybe it was all a bit materialist blingy the past 10 years , but this drabness and gloom is infectious.
We do not need any more bad news.
Martin Lewis was right after all.

#57 - oopsie, wrong blog!
Carry on!
;-)

#43 the-real-truth wrote:

"At PMQs brown said we were going to be buying shares in IT companies.

This is the first I have heard of it (not that I claim to be particularly well informed)."

I thought he actually said high-tech companies.

I hope that means UK based businesses, doing real things.

Many IT organisations supplying government have foreign ownership.

Given governments' track-record in managing what should have been hi- or even lower-tech platforms for growth, I had a shiver of fear.

Remember Wilson's government with its focus on "the white-hot heat of technology"... Then the abandonment of the best fighter aircraft in the world. The decision that satellites would just be a fad (so scrapping rocket development). The decision to nationalise BL and make it a workers' co-operative... Later decisions to abandon nuclear power...

There is a huge engineering potential in the UK. It's why so many Formula One teams have development facilities here.

Lord help us if this lot get their hands on genuinely innovative organisations.

Sorry about my previous post.

Just realised he must have been trying to refer to high-speed, high-quality bank-note printing technology.

johnharris66

The word 'contradiction' probably doesn't even feature in a Labour Minister's dictionary. 'Democracy' is missing too.

In fact now I come to think about it, there are probably quite a lot of missing words.

onward-ho

If you think this is bad you'd better brace yourself! There will be plenty more bad news to come.

The 'blame' should be shared between this government and the 'herd' of idiots that voted them in, in the first place. Nobody has taxed us into depression except the government. The sooner people realise that - the better!

What a totally pathetic performance by Gordon Brown at PMQs.

If ever there was a man desperate to retain power at all costs it is this sack of hubris.

Where is Mark Anthony when we need him?

For that is the fate that awaits this modern day Caesar.

He gets blustier and blousier every time he gets up; boasting when the economy is sionking is about as low as you can go.

Call an election

Mandleson also said this morning that there will be certain firms which the country will have to help (bail) out because they are vital to our economy.

Does anyone know which firms he is talking about? Nick?......and why they should be given preferential treatment?

While you're there, Nick - Mandleson, Deripaska, yacht...ring any bells?

No 51 wrote: "she's the one who spent ahlf the weekend on the phone trying to save Woolworths.

What a total waste of taxpayers money. (for it is we who pay her salary)

----- ----- ----- -----

And her telephone bill as well.

Nick, something is puzzling me. When asked a direct question today about whether he still believed that the UK economy would come out of recession by Q3 this year, the Prime Minister said that depended on the actions of all the world's economies, or words to that effect.

I have reproduced here the actual PBR speech made by Mr Darling back in November 2008.

I am unable to find where he says an economic upturn is dependant on other countries' actions.

In fact he is clear that it will be as a result of his PBR package

"But then, because of decisions taken in this Pre-Budget Report, I expect it to start to recover."

===

"Mr Speaker, I now turn to the detail of the economic forecast.

These forecast are made against a background of sharply deteriorating conditions across the world.

The IMF is forecasting a year-long fall in output next year across all advanced economies, the first time this will have happened since 1945.

And the UK is no exception.

Mr Speaker, UK GDP contracted by 0.5 per cent in the three months to September.

And growth this year is forecast to be ¾ per cent, which reflects a further fall in output in the fourth quarter of this year.

The IMF is forecasting that the US, Germany, Japan, France, Italy – as well as the UK – will all contract next year as a result of weak consumer spending and business investment.

I, too, am forecasting that output will continue to fall in the UK, for the first two quarters of next year.

But then, because of decisions taken in this Pre-Budget Report, I expect it to start to recover.

GDP growth for 2009 is forecast to be between –¾ per cent and –1 ¼ per cent."

===

Perhaps you would ask Mr Mandelson, Mr Brown or Mr Darling if you manage to spot him, if the PBR statement was correct or Mr Brown's statement today, because clearly they can't both be correct.

Thank you.

Nick,

I'm assuming you see it as part of your role to get to the truth?

Could you therefore nail the lies that:

1. The Conservatives are a 'do nothing party' - proven by the fact that Labour have just stolen the Loan Guarantee policy and are trying to spin it as their own, and

2. The Tories will cut public spending. No they won't - they will simply not increase it at the same ludicrous rate as labour. not the same thing. And finally,

3. That PMQ's is any use to anybody anywhere at all. How pointless is it if the PM won't answer a single question from those elected to hold him and his govt to account, and the Speaker simply ignores his duty to force the PM to answer said questions.

Perhaps PMQ's should become PMPQ's - Prime Ministers Public Questions - and tickets sold for the members of the public to go along and do the questioning once a week. BBC ratings would go through the roof!

A fairly balanced topic from the BBC (very rare), but still no mention of the fact that it was a tory policy in the first place, and also one which brown/labour previously said was mad ,and which brown still claims all the credit for.

Will it help? In the very short term for some businesses, probably yes. In the medium term no because there's zero confidence while labour are in charge.

A trillion pounds in public debt and Brown's answer to everything is "borrow more; another few billion won't hurt...ok, another few billion today.." - with that attitude confidence will remain at zero and it'll all just get worse.

With Brown also point-blank refusing that any mistakes have been made in the last 12 years under labour, that means they're physically unable to fix anything; if they won't admit what's broken then how can they fix it?

We're finished; the only way out is a change in government; at least then we'll be able to correct the underlying fundamentals; Cameron was right; a clean slate is needed; confidence can only return when the people who bankrupted the country are kicked out of power.

i listened to some shady character called oiny mcnulty on the world at one.......is this man really a cabinet minister? His defence of the charge of stealing tory ideas consisted of "not the same...the tory ideas were unfunded"...........unfunded!!! this is the government that has more liabilities than the rest of the world put together......just who is funding the public sector pensions, the PFI contracts, the propping up of the banks...etc etc, i cant belive the BBC let these government clowns get away with such rubbish....for the sake of the UK cant the journalists start holding this rotten government to account?


Even before the start of short selling on Friday i notice that RBS share price is down 20% today.......how much is the UK taxpayer liable for?

By the way, Nick, Brown doesn't have to own a bank in order to influence it; the tax payer holds a major stake in these banks and is underwriting the confidence in them; if Brown had any understanding of the real world he'd simply threaten to withdraw the tax payers' funds (ie sell their shares) if the banks misbehaved.

ie Brown can simply say to the banks: "We gave you tons of cash because you were running things negligently and you were going under. You've still got all our money. Pull your finger out and start lending to viable businesses or we'll take that money away and leave you to sink or swim on your own".

It doesn't take a genius, just someone who understands how the world works and someone who isn't overawed by people who work in the city.

Instead he decides to pump more tax payers' money into the banks, rather than simply telling the banks to do their job.

Banks are not charities, and it's not fair for Brown to donate all our hard-earned money to the banks without holding them to account for it.

I presume that all our hard working regulators and Whitehall have "bunked off" for the day. Otherwise they may have noticed that the FTSE 100 index is tanking quite spectacularly. It could well be that in light of the short selling ban being lifted on Friday that some traders have jumped the gun in anticipation of this rash move.

We are told that all transactions will be monitored for a 6 month period. Why am I NOT reassured.

On the day at 16:15

RBS down 20 pct
Barclays down 16 pct

Over 2 days barclays is down 25 pct.

Again we can expect reactive policies not proactive ones. Can we expect the new Business Secretary Lord Davies to intervene? more nationalisation anyone?

Business minister Baroness Vadera's comment that she could see "a few green shoots" of recovery have been attacked by the Tories as "insensitive".

https://news.bbc.co.uk/1/hi/uk_politics/7828549.stm

Call an election you bunch of incompetants

I understand why politically all parties are announcing policies (almost on a daily basis)and claiming each idea as their own.

I also understand why all of them want to appear to be busy working on our behalf.

What I don't understand is the economics

Are the politicians trying to shore everything up so that we come out the other side at status quo and can carry on as before?

If so then they are all potty.

We are in this mess because we borrowed with fictitious wealth creation as the security. "The value of your house can go up as well as up!"

Governments, banks, individuals got suckered in.

Businesses grew and new ones were created to service disposable incomes enhanced by ever increasing debt levels.

Governments spent seeing no end to the constant growth in tax revenues (end of boom and bust).

The bankers couldn't trouser the bonuses quick enough.

Its not sustainable, however much money we throw at the problem, it is still a problem unless we return to genuine wealth creation as the underpinning of the economy.

We therefore have to lose the excess capacity in all sectors of the economy built to service fictitious levels of wealth.

Alternatively, we could say to hell with it, let's borrow as long as someone will lend to us and let our children and their children pick up the bill.

#65

"Mandleson also said this morning that there will be certain firms which the country will have to help (bail) out because they are vital to our economy."

As I see it, any firm vital to the economy will survive no matter what.

It's only the firms we PRETEND are vital but aren't that may not survive. But how do you help them - prop them up so they produce more of what they can't sell?

#53 "When we are in a world recession and businesses are going to the wall, a lot of companies are putting workers onto a 4 day week so they do not need to have redundancies, why do people want the BBC to ask the secretary of state about a yacht, aluminium and a villa?"

Because the future of our country is in the hands of an unelectable, twice-disgraced politician, whose appointment to the House of Lords is a slap in the face to those of us who believe in democracy.

Nobody would vote Mandelson into power.

* Geoffrey Robinson, investigated by Mandelson's department in 1998, offers him an interest-free loan of almost £400k. Anybody wonder why he might have done that?

* Mandelson phones up colleagues to discuss Srichand Hinduja getting a passport. Hinduja contributing to Millenium Dome. A slight conflict of interest?

* Mandelson wined and dined by aluminium magnate Deripaska on yacht, with Rothschild. Mandelson subsequently lowers aluminium tariffs. Osbourne tries to mention this, Rothschild called in to smear him.

AND NONE OF THIS BOTHERS YOU?

No wonder we've had the infliction of eleven years of Labour mismanagement if this is the level of intelligence of some voters.

If it smells like sh t, it probably is

Let's start by having ELECTED politicans in charge.

No Mandelson...
No Amos...(check out the story from an ex-UK ambassador's book, very suspect)
No Vadera...

No more "appointments" please.

I'd rather have a Duke in the Lords, than one of Gordon's cronies.

And I'd rather have none of them in charge.

If our elected politicians are so incompetent that we have to get people into the lords to help the country out, perhaps those who are being passed over should have the common courtesy of standing down from their parliamentary seat.

Its all ok we don't have anything to worry about with this slump.

Labour Business minister Baroness Vadera

" can see green shoots of recovery"

All this talk of recession is just Tories talking down the eckonomy.

It’s like we are all on an airliner and the cockpit has just been taken over by a raving loony.
What else can we do but scream?

73. At 4:36pm on 14 Jan 2009, Pot_Kettle wrote:
Business minister Baroness Vadera's comment that she could see "a few green shoots" of recovery have been attacked by the Tories as "insensitive".

===

It must be some strange polarising effect caused by looking at the world through rose-tinted spectacles!

portcullisgate

It?s like we are all on an airliner and the cockpit has just been taken over by a raving loony.

...........................................................


Where's Derek?

76 -corruption of all kinds bother me.

However, I think you missed the point of my original post. It was simply to say that I for one am pleased that Nick sticks to the policy rather than wasting his time asking points that no politician of any party will answer.

Like I said orginally -it entertains the professional party bloggers to keep bringing it up

80. At 5:29pm on 14 Jan 2009, shellingout wrote:
portcullisgate

It?s like we are all on an airliner and the cockpit has just been taken over by a raving loony.

...........................................................


Where's Derek?

===

He is on an important business meeting with toffy22 and fellow colleagues in Europeland talking about business, and sh*t.

Toffy22 recruited him yesterday!

===

163. At 7:23pm on 13 Jan 2009, toffy22 wrote:
Hi Derek,

How would you like to come and work for me, I could do with someone with your skills especially in these difficult times.

P.S. I wont be doing much of this, I dont know how you put up with it.

Good luck (my offer stamds)



219. At 05:45am on 14 Jan 2009, toffy22 wrote:

Morning, early rise today i've a flight to catch.
Business meeting in Europe. Talking too fellow colleagues about business, many of them referring to the "grey area" in business at this time is a lack of cofidence
many pointing the finger of blame at the mix message that the conservatives are sending out. Many also saying that Europe is far more collective in their response to this sad situation.

#661 #51
Although no fan of Labour, I would have to argue that had it proved possible to save Woolies, it would have been a weekend extremely well spent - tell that to the 30,000 jobless.

What I am now waiting for is the result of the Government loan guarantees.

As I assume they will be charging the banks a premium for the guarantee, I assume the banks will merely pass on the fee by adding a few points onto the loan.

Thus the scheme will, in practice, be funded by the medium size businesses and the Government get another stealth tax in.

Nick,

when you had a chat with Mandelson earlier was there any mention of dodgy loans or aluminium tariffs?

#80:

Let sleeping dogs lie!

A very productive meeting, more orders secured.Great no redundancies and all the talk is how great GB is here in Dusseldorf.

Aint it good to be British and liked.

The dangers of shaking hands with Jonah Brown cannot be overestimated. Keith Dye was proud to welcome Brown on a visit to his offices, it was the pinnacle of his 24 year news career:

Gordon Brown Visits Media Wales
WalesOnline - 9 January, 2009
After arriving under a heavy police escort just before 3pm, Mr Brown was given a tour of our multimedia newsroom by Media Wales' managing director Keith Dye ...

Trinity Mirror Redundancies
Press Gazette - 13 January 2009
Keith Dye, managing director of Media Wales has been made redundant and leaves today, following 24 years at the group. Media Wales’ finance director...

86. At 7:56pm on 14 Jan 2009, toffy22 wrote:
A very productive meeting, more orders secured.Great no redundancies and all the talk is how great GB is here in Dusseldorf.

===

Good for you. I would like to buy some of your product. Please let me have your company name, telephone number and website address.

You can ask Mandelson about Bank nationalisation, a big subject, but not about his time on THAT YACHT. Why can you not ask this?

Are you afraid of His Lordship? Is his reputation too frightening for you to broach this subject? After all, you raised it regarding Osborne.

Is it because the Government hold the purse strings and by default your salary? If so you are not the brave journalist as you portray yourself. Why not give just one answer to this canker that is dominating this Blog?

#86:

What's it like up there in cloud cuckoo land?

#86:

If The Baroness was scoffed at for her unintentional gafe re green shoots just imagine what people would do to your wildly exaggerated claims.

that's 'gaffe'.

Brown's performance at PMQs proved he hasn't a clue where to go from here. Mandleson's interview on Newsnight also proved beyond doubt he too hasn't a clue where to go next from here. They are both operating blindly in the dark. A truely dreadful situation. Never in the history of any Government has such ignorance been exhibited in one day.

Neither apologised for their mistakes and omissions, but kept blaming world conditions. For heavens sake, Brown is supposed to have been running the economy for the past 12 years.
He keeps looking for excuses to mitigate his dysfunctional approach.

Confidence is completely shot in this Government. Mandleson couldn't even articulate properly and implement the Tory idea of a credit loan guarantee scheme. Cameron and Osborne have been pleading with Brown to do so for months. In the meantime, thousands upon thousands are losing their jobs, losing their businesses, losing their pensions, losing their savings and losing their patience.

The electorate are truely angry and resentful at the incompetence displayed by this Government and demand an early election.

Let the electorate decide on Brown's so called economic competence.

UPDATE: My man at Venda has just been on to point out that although they couldn't get loans from the banks they were able to get money to expand by issuing shares instead. This is because they're a thriving business. It's an option that's not open to many weaker businesses

I presume that your contacts would say it will take time for their measures to work their way through to the marketplace, Nick?

This comment was removed because the moderators found it broke the house rules. Explain.

Anyone know what is the latest Brown can call an election?

Nick,

some people are complaining that the BBC is only carryig the bad news, loss of jobs at JCB, some banks etc... and yet no praise for some of the major supermarkets who seriously want to expand their staff.

Surely, just like the miners when they were losing their jobs in droves the government could force all the former bankers and engineers to work for the supermarkets. I mean they are so well qualified, rather than stack their money they could stack our shelves.

Furthermore, all the unemployed could go and work for some of the suppliers to Primark who seem to employ people but at wage rates below the minimum wage and also pay them cash. I know this because earlier on in the week the BBC covered the story, but now it has gone quiet. Why no government investigation, what do all these officials we pay actually do.

T.A. Griffin(TAG) 97

Actually one of the bits of good news from this recession is that ex bankers are now becoming teachers and engineers are becoming tutors .

This will certainly please me as it will definitely pull education up, maths particularly, as you will know is ignored a lot at the moment in education.

Susan-Croft,

actually there is going to be a serious problem when the ex-bankers start becoming teachers.

The problem I see is that the tolerance levels of bankers is actually not very good. I don't know how any serious banker will cope. When I retired from banking I assisted in health and education, one as a memeber of my local CHC and another as a school governor.

As a school governor with a financial back-ground I naturally became involved in the finances of the school. The problem was that it was part of a local reorganisation and was more or less told to follow the PFI route to fund its rebuild. This I seriously could not agree with, and accordingly as the chair was in favour and more or less did a back me or sack me, I was left with no alternative than to resign.

As for the CHC (Community Health Council), well that was abolished by a certain government, so I joined my local PCT as a member for their Clinical Governance, as a lay member. Well that was more than interesting because what seems like a lifetime after I left it, having done two years, I am still not seeing the changes which were obvious.

Finally, may I say that I would not always agree with Digby-Jones but his contribution to a select committee should be read and acted upon, with some urgency.

It really is not a good idea to get ex-bankers involved in teaching, they will go mental.

68Middleenglanddim
"Nick,

I'm assuming you see it as part of your role to get to the truth?

Could you therefore nail the lies that:

1. The Conservatives are a 'do nothing party' - proven by the fact that Labour have just stolen the Loan Guarantee policy and are trying to spin it as their own......"



Correction....that should read...."The Conservatives are a Promise- Everything, Do Nothing, Sit Back and Watch'em Suffer Party "