November 2011 Archives
The Autumn Statement had 2 announcements I was anxious to see the details of: the credit easing programme; and the 'huge' new National Infrastructure Programme, apparently using pension funds - right up my street!
Unfortunately the statement came and went with next to no detail. I downloaded all of the official background documents and scoured them for detail: they led nowhere.
It leads me to quote the Bard and suggest that these plans were "Full of sound and fury: signifying nothing."
There's nothing there. Just bland statements of generalities.
"The Government is launching a package of interventions worth up to £21 billion to ease the flow of credit to businesses that do not have ready access to capital markets, with scope to increase the scale of this package in future if necessary."
"This will allow banks to offer lower cost lending to smaller businesses, subject to state aid approval." (Note that last caveat - Europe must approve!)
And that's it, really.
It strikes me that this is about guaranteeing banks, not businesses. We already provided £955billion of guarantees in 2009 to the UK banking system. If we slide into recession those guarantees might actually start to be called upon and our deficit will increase as a result.
Walking through the international arrivals hall I wonder if I have finally found an airport in China that doesn't feel like they just unwrapped it from the cellophane a few hours ago. Which isn't for a moment to suggest its anything but clean, bright and easy to use - just not as pristine as some of those I passed through recently. And then as I as get to domestic departures I find (inevitably) that there is an extension to the facility underway. Just chalk up yet another tick in the box for China's investment in infrastructure.
Yet again I find an instance of the iron law of brand placement that insists that banks are the ideal businesses to have their names plastered over the exterior of the jet bridges that connect a plane to the terminal. Here its Private Bank CBC, yesterday in Amsterdam it was Radobank, time and time again on my travels its HSBC - what is the logic ?
As the world once again convenes (this time in Durban, South Africa) trying to forge a collective route to tackle climate change, the expectations of a global agreement are markedly less than they have been in the past.
The Chancellor, George Osborne, has spent much of the last 18 months telling us that he will get rid of the structural deficit by the end of this Parliament. Economically this strategy was supposed to boost confidence in the 'markets'. Politically, the idea was that a bit of pain now would clear the way for tax cuts ahead of a general election. Jam tomorrow, is seemed.
But as I've been banging on about for ages, the excessive rush into austerity at a time of international uncertainty heightened risks for the UK economy and the resulting slow/no growth means that the government is unlikely to meet its own targets. So much for a confidence boost.
This will be confirmed by the Office for Budget Responsibility (OBR) tomorrow which will give a (yet) more downbeat fiscal outlook, and will come on the same day as the Chancellor's Autumn Statement. It is likely to say that the structural deficit won't now disappear until 2016/17, due to worse-than-expected growth.
A few people (fellow blogger Beverley Nielson included) have asked me to explain what the structural deficit means and why it's important, so just to get you thinking ahead of tomorrow's big day, here's a quick run through for Bev's dad in particular...
I've not blogged on guitars yet in the context of climate change, but I'm going to have a go now.
Sunny Durban is the destination this week for the latest meeting of the Conference of the Parties (COP17) to the United Nations Framework Convention on Climate Change (UNFCCC), when all things climate change related will be discussed. Expectations have been carefully set at rock bottom.
I, for one, am old enough to recall the real meaning of the word "friend" and know that having any more than six real friends is a right pain.
In welcoming Will Hutton, Chairman of the Big Innovation Centre, who was joined by no less than five of his colleagues for the event, Vic Cocker, Deputy Chairman of Birmingham City University emphasised the need for new solutions to tackle the growth challenge.
Will Hutton stressed that the UK was facing the worst recession since the 19th century - worse than the 1930s.
The knowledge economy had driven the recoveries of the '80s and '90s and it would drive this one too. SMEs in the knowledge economy had been drivers of job creation and one key challenge was providing the means to help them to grow faster and scale up. The answer was in the Innovation eco-system.
"Traditional sources of growth have dried up. With the West Midlands' over-dependency on the public sector there is a need to boot strap up and act fast," he said.
Now then, I don't want to cause any offence by unintended blasphemy, so if you are of a sensitive nature with regard to cavalier use of Holy Scripture you had probably better look away now. You see, there's a bit in the Bible ( Ecclesiasties 11.1 for those who prefer to be properly chaptered and versed) that runs 'Cast your bread upon the waters for after many days you will find it again'. Well, its wrong - you won't.
Another week, another survey portending gloom for Britain's construction industry.
This time it's the Construction Products Association (CPA) forecasting that growth will not return until 2014, which marks the worst decline in 30 years. Next year, the CPA expects construction output to fall by 3.6 per cent, compared to its previous estimate of 2.8 per cent.
Jobs. We need more of them. It's an issue that keeps the government up at night. Various reports have it that the government is considering options for making employment laws friendlier to employers. Fewer restrictions will make it easier for businesses to justify taking on new staff.