The Governor of the Bank of England announces that we are in
recession which hardly comes as a surprise to most of us! But the
result is to send the pound down 3% to $1.64. So anything priced in
dollars will cost that much more!
The media however, gave much more coverage to the fact that George
Osborne hadn't received a donation from Russia's then richest man
(and denied soliciting one) than was given to the previous day's
story that Britain is borrowing more than at any time since the 193
xxxxxxxxxx cs
===========================
POLITICS HOME 21.10.08 at 23.00
Newsnight, BBC2
Clarke: "The real economy is now about to be hit"
Ken Clarke, Former Chancellor
Mr Clarke expressed fears that it is now that the "real economy is
now going to be hit" following the Bank of England Chief's earlier
speech.
"My own view is it's going to be quite bad, there is going to be a
freefall in consumer demand. I think the last few weeks actually the
level of consumer demand has dropped quite, quite remarkably. The
problem is the availability of credit," he said.
He expressed how he would not reduce interest rates: "The cuts we
have had so far have made little difference - I would be cautious."
He added: "The big problem is the big fiscal deficit, have we solved
the bank crisis?"
===========================
TELEGRAPH 22.10.08
It’s back to the future with Lord Mortgage in charge
Gordon Brown promised “long-term success”, writes Jeff Randall, a
decade on all he has delivered is a wry joke.
By Jeff Randall
He was confident and full of promises: “The Budget will lay down the
foundations for long-term British industrial and economic success.”
His message was unequivocal: Labour would foster an enterprise culture.
Ten years on, the landscape is different. Many pledges have come and
gone, along with those who made them. The Department of Trade and
Industry, which became the Department for Productivity, Energy and
Industry in 2005, reverted to being the DTI after only a week, but
was then split two years later into the Department for Business,
Enterprise and Regulatory Reform and the Department for Innovation,
Universities and Skills. One can only assume the rebranding took
place after a long liquid lunch.
For its sins, business has been lumbered by Labour with some of the
most useless characters ever to enter Cabinet. Stephen Byers, the
genius behind the Railtrack fiasco, and Patricia Hewitt, whose
handling of Rover’s demise set new standards for incompetence, left
high office unlamented. As for Margaret Hodge, I once chaired the
British Chambers of Commerce’s annual conference, normally a sedate
affair, at which she was hissed off the stage.
In a decade of confusion, companies have been blitzed with changes to
taxation, pensions, insurance and health-and-safety regulations.
There have been training initiatives, investment incentives,
diversity guidelines, minimum-wage legislation, new rules on ageism,
sexism, racism and the employment of foreigners. Having been told by
a string of Labour worthies that unbridled immigration is good for
the economy, we now know that it is not, and the new man in charge,
Phil Woolas, is back-pedalling furiously.
Where did all this activity get us? Did it deliver the “long-term
success” that the then Chancellor was boldly predicting 10 years ago?
For a while, at least, business did appear to prosper. The corporate
sector seemed happy to overlook stealth taxes and a burst of state
expansion, as long as the tills were ringing. Increased red tape was
a nuisance, but complaints were muted. Many in business were
delighted with Gordon’s easy-money magic.
All that ended when the credit crunch arrived. Since autumn 2007,
corporate Britain has been in retreat. No sooner had shoppers been
yanked off the pay-later drug than many companies started suffering
terrible withdrawal symptoms: falling demand, cash-flow shortages and
bulging inventories. According to the BCC, “the UK is now in a
worsening recession”.
Manufacturing, the revival of which failed to materialise in Brown’s
Britain, is on a dispiriting streak. Orders for UK-made goods are
shrinking at their fastest rate since 1999, according to the CBI. The
main driver is weak domestic demand, but exports are also suffering
despite a softening pound.
So much for industry, what about services? The biggest by far is the
financial sector, where conditions could hardly be more traumatic.
When Mr Brown set out his vision to me all those years ago, I don’t
recall anything about a plan to nationalise banks. This, surely, was
not what he meant by long-term success. Or, perhaps, it was. Keir
Hardie would certainly have approved.
He would have been less thrilled, however, by Mr Brown’s record on
unemployment. In November 1998, according to the Office for National
Statistics, it stood at 1.8m. Today, it’s 1.79m – and rising.
“British jobs for British workers” was an empty slogan designed to
deflect mounting criticism over the Government’s irresponsible
immigration policy. The prospects for native-born job seekers are
worse today than when Labour came in. The so-called New Deal for
young unemployed people has been exposed by Labour MP Frank Field as
a monumentally expensive failure.
Which brings us back to businesses, especially small firms. There are
4m-plus private enterprises in Britain, including one-man bands,
accounting for about one-third of UK plc’s total turnover and
employing more than 20m people.
They form the economy’s backbone. Most never appear on the media’s
radar, but if the rate at which they are going bust accelerated
further, the jobless figures would turn very ugly. The portents, I’m
afraid, are not good.
A combination of higher taxes, a squeeze from lenders and a collapse
in consumer confidence is grinding down decent businesses. The
Government has vowed to speed up its own payment of small firms’
bills, and rightly so. In a recession, cash hoarding by powerful
customers, public and private, can ruin small suppliers. In the grand
scheme, however, the measure is tiny.
After all that has gone on, not least a series of chaotic tax changes
and panicky reversals, for this Government to peddle its pro-
enterprise credentials will strike many as a joke. But it does, I
suppose, demonstrate that the prime minister has a wry sense of
humour. Who else, other than a comedian, would have re-hired Peter
Mandelson to become Business Secretary? I can’t wait for Lord
Mortgage’s advice on how to borrow money cheaply.
recession which hardly comes as a surprise to most of us! But the
result is to send the pound down 3% to $1.64. So anything priced in
dollars will cost that much more!
The media however, gave much more coverage to the fact that George
Osborne hadn't received a donation from Russia's then richest man
(and denied soliciting one) than was given to the previous day's
story that Britain is borrowing more than at any time since the 193
xxxxxxxxxx cs
===========================
POLITICS HOME 21.10.08 at 23.00
Newsnight, BBC2
Clarke: "The real economy is now about to be hit"
Ken Clarke, Former Chancellor
Mr Clarke expressed fears that it is now that the "real economy is
now going to be hit" following the Bank of England Chief's earlier
speech.
"My own view is it's going to be quite bad, there is going to be a
freefall in consumer demand. I think the last few weeks actually the
level of consumer demand has dropped quite, quite remarkably. The
problem is the availability of credit," he said.
He expressed how he would not reduce interest rates: "The cuts we
have had so far have made little difference - I would be cautious."
He added: "The big problem is the big fiscal deficit, have we solved
the bank crisis?"
===========================
TELEGRAPH 22.10.08
It’s back to the future with Lord Mortgage in charge
Gordon Brown promised “long-term success”, writes Jeff Randall, a
decade on all he has delivered is a wry joke.
By Jeff Randall
He was confident and full of promises: “The Budget will lay down the
foundations for long-term British industrial and economic success.”
His message was unequivocal: Labour would foster an enterprise culture.
Ten years on, the landscape is different. Many pledges have come and
gone, along with those who made them. The Department of Trade and
Industry, which became the Department for Productivity, Energy and
Industry in 2005, reverted to being the DTI after only a week, but
was then split two years later into the Department for Business,
Enterprise and Regulatory Reform and the Department for Innovation,
Universities and Skills. One can only assume the rebranding took
place after a long liquid lunch.
For its sins, business has been lumbered by Labour with some of the
most useless characters ever to enter Cabinet. Stephen Byers, the
genius behind the Railtrack fiasco, and Patricia Hewitt, whose
handling of Rover’s demise set new standards for incompetence, left
high office unlamented. As for Margaret Hodge, I once chaired the
British Chambers of Commerce’s annual conference, normally a sedate
affair, at which she was hissed off the stage.
In a decade of confusion, companies have been blitzed with changes to
taxation, pensions, insurance and health-and-safety regulations.
There have been training initiatives, investment incentives,
diversity guidelines, minimum-wage legislation, new rules on ageism,
sexism, racism and the employment of foreigners. Having been told by
a string of Labour worthies that unbridled immigration is good for
the economy, we now know that it is not, and the new man in charge,
Phil Woolas, is back-pedalling furiously.
Where did all this activity get us? Did it deliver the “long-term
success” that the then Chancellor was boldly predicting 10 years ago?
For a while, at least, business did appear to prosper. The corporate
sector seemed happy to overlook stealth taxes and a burst of state
expansion, as long as the tills were ringing. Increased red tape was
a nuisance, but complaints were muted. Many in business were
delighted with Gordon’s easy-money magic.
All that ended when the credit crunch arrived. Since autumn 2007,
corporate Britain has been in retreat. No sooner had shoppers been
yanked off the pay-later drug than many companies started suffering
terrible withdrawal symptoms: falling demand, cash-flow shortages and
bulging inventories. According to the BCC, “the UK is now in a
worsening recession”.
Manufacturing, the revival of which failed to materialise in Brown’s
Britain, is on a dispiriting streak. Orders for UK-made goods are
shrinking at their fastest rate since 1999, according to the CBI. The
main driver is weak domestic demand, but exports are also suffering
despite a softening pound.
So much for industry, what about services? The biggest by far is the
financial sector, where conditions could hardly be more traumatic.
When Mr Brown set out his vision to me all those years ago, I don’t
recall anything about a plan to nationalise banks. This, surely, was
not what he meant by long-term success. Or, perhaps, it was. Keir
Hardie would certainly have approved.
He would have been less thrilled, however, by Mr Brown’s record on
unemployment. In November 1998, according to the Office for National
Statistics, it stood at 1.8m. Today, it’s 1.79m – and rising.
“British jobs for British workers” was an empty slogan designed to
deflect mounting criticism over the Government’s irresponsible
immigration policy. The prospects for native-born job seekers are
worse today than when Labour came in. The so-called New Deal for
young unemployed people has been exposed by Labour MP Frank Field as
a monumentally expensive failure.
Which brings us back to businesses, especially small firms. There are
4m-plus private enterprises in Britain, including one-man bands,
accounting for about one-third of UK plc’s total turnover and
employing more than 20m people.
They form the economy’s backbone. Most never appear on the media’s
radar, but if the rate at which they are going bust accelerated
further, the jobless figures would turn very ugly. The portents, I’m
afraid, are not good.
A combination of higher taxes, a squeeze from lenders and a collapse
in consumer confidence is grinding down decent businesses. The
Government has vowed to speed up its own payment of small firms’
bills, and rightly so. In a recession, cash hoarding by powerful
customers, public and private, can ruin small suppliers. In the grand
scheme, however, the measure is tiny.
After all that has gone on, not least a series of chaotic tax changes
and panicky reversals, for this Government to peddle its pro-
enterprise credentials will strike many as a joke. But it does, I
suppose, demonstrate that the prime minister has a wry sense of
humour. Who else, other than a comedian, would have re-hired Peter
Mandelson to become Business Secretary? I can’t wait for Lord
Mortgage’s advice on how to borrow money cheaply.
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