Tuesday, 25 November 2008

"Tinkerbell" it's broken and you can't fix it!

Now I know that our Chancellor is tying himself in knots trying to stave off the effects of the economic downturn, and yesterday's "tinker par excellence" of an across the board VAT reduction is, in his opinion, the salve to soothe the wounds of the broken economy - you will be surpried to hear that I have my doubts:

First of all the VAT reduction amounts to very little for the average household, figures of savings of between £3 and £10 per week are probably in the right range, and of course that saving is based on the very unlikely assumption that the cut is actually passed on to the consumer.

Having read the speech in full I am reminded of Private James Frazer in Dad's Army "we're doomed, doomed I tell you!". A comprehensive trawl through probably the most turgid pronouncement by a Chancellor of the Exchequer since Gordon Brown delivered his last budget leaves me wondering why Scottish chancellors persist in the belief that by behaving like a 1950's stereotype of a bank manager we will be convinced that they are competent? (Dad's Army again) [ref: Take a look at the decimation of the Scottish Flagship financial sector for further clarification on this point]

Alistair uses the word business or businesses 46 times in his proclamation.
Q. What is the extent of his assistance and commitment on offer to the SME business sector (in which 60% of us are employed)?

A. Support late payment of taxes, loan money to, reduce payments on empty commercial premises and protect overdrafts for unprofitable and unviable businesses.

It strikes me that an empty commercial property is not exactly an indicator that a business is in rude health. So it appears that he intends to 'do for' the SME sector what he did for the Banking sector: help prop up debt ridden unprofitable businesses, and allow them to erode the profitable, succesful and well run businesses through unfair competition.

Labour propped up failed financial institutions after they indulged in irresponsible lending at insane levels and now they encourage this within SME businesses - that's inspired...

I obviously occupy a different trans-dimensional space from Westminster; In my dimension cars are cheaper than ever, food prices have dropped considerably, almost every high street shop has a significant sale on (I cannot remember ever seeing so many "20% off sales") and petrol is at 2005 prices; not withstanding the correction we see in the, widely accepted as unsustainable hyper-inflated, housing market - things are actually not too bad.

Cue the defining act of breathtaking insanity that defines the NuLab inability to do anything "financial" correctly - they increase excise duty on fuel.

Before any of us get used to it, I guess...

This Labour "no more boom or bust" government reminds me of my friends partner who decided to service the gearbox on his functioning motorbike; 3 years on the bike remains off the road and he is still "tinkering", his progress looking more and more like mechanical entropy as he sits scratching his head amongst the chaos that was once a perfect gearbox.

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