Darling, Brown and Mandy: step up or step back

Recent events have turned the spotlight on the government’s anaemic response to UK businesses' troubles.

Barack Obama says: “Yes we can!”; Gordon Brown says: “Let’s form a committee to discuss whether we can or not and then at a later date make a decision which will underpin ongoing discussions”.

Obama’s economic pledges may be a tad unrealistic: he’s facing a gigantic budget deficit approaching half a trillion dollars and drooping economic growth, yet he wants to cut income tax for 95 per cent of Americans and abolish capital gains tax.

But he’s making the right noises. And what an impact his words have made. In contrast, the UK government’s response to the crisis has been tentative and mediocre, leaving British business confidence flat as a pancake.

The Bank of England did its bit. Today’s websites and TV news and tomorrow’s newspapers will be knee-deep in hyperbole about its decision to lop a massive 1.5 per cent off the cost of borrowing.

And famous entrepreneurs are making an effort too. Sir Alan Sugar, Sir Philip Green and Sir Richard Branson (to name only a few) have made cameo appearances in the press to rouse business and consumer sentiment.

But today’s big government splash, that a new Regional Economic Council has had its inaugural meeting, will not raise eyebrows, let alone confidence. Ditto everything the government has done so far to improve life for recession-stricken businesses.

By far the stand-out measure was Gordon Brown’s leadership of the process that bailed out the high-street banks and his ensuing insistence that they lend to small businesses at a reasonable rate of interest.

Firstly, like, big wow. Secondly, there’s no real evidence that banks are toeing the line; in fact some are still putting up mortgage rates for homebuyers.

What we need is something dramatic, if only temporary, that will grab headlines and create a buzz. It’s happening in the US, where the downturn originated and where the economy is probably in a worse state than in Europe, so why not here?

How about repealing the one per cent increase in national insurance that took place a few years back, or going with the Tories VAT holiday idea? Ministers should stop announcing lots of small measures and introduce one really big one.

We don’t need grants to train staff or another committee that “listens” to our concerns. We need a Big Idea. Something that will show us that’s it’s not as bad as we think it is, and maybe, just maybe, trigger the beginning of the recovery that we all so desperately need.

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By Dan Matthews  on   Nov 06,2008

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Keywords

Gordon Brown    recession    Obama    VAT    NICs    Branson    Philip Green   

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