Coalition Spread Blame
Vince cable had a go at the unions,
when he was invited to speak at their conference, threatening
that strikes which could impact on the growth of the economy will
result in tighter legislation. Now he has turned on the banks, he
is threatening to take "further action with tax on banks"
if they do not increase lending to small and medium-sized enterprises.
The coalition have realised they don’t have the experience or
the expertise to manage the economy, and are picking on whoever they
can to try and lay the blame for this next quarters dismal growth
Vince Cable is complaining the banks aren’t
lending the amount they agreed to lend to SMEs [Small and Medium size
Enterprises]. Under the Project Merlin agreement, the UK's biggest
banks are committed to lending £76bn in 2011 to SMEs. This equates
to £19bn a quarter, in the first quarter only £16.8bn
was lent. The banks retaliated saying the agreement was for a yearly
total, not a quarterly total. Only Lloyds met the target for the quarter.
The banks are now required by the government to hold
extra reserves, which restrict lending to some extent, and the banks
are cherry picking the best investments for their business loans.
Taking these two factors in to account, along with the fact that many
SMEs feel the economy is still too weak to risk a Start Up Business,
or even borrow to expand an existing business.
2011 will be the third year in a row where workers
pay has been stagnant or reduced. Bad news for the workers, bad news
for the government because of the reduced tax take, but good news
for foreign companies wanting to expand and profit from a cheap workforce.
BMW is to invest £500m in its UK plants, helping
to protect more than 5,000 jobs. The new mini Coupe is to be launched
in 2011 and the Mini Roadster in 2012, both cars being produced in
Oxford. The Oxford plant has produced more than 2 million Minis since
2001 – with 75% being exported. In addition Nissan are investing
£192m to safeguard 6,000 jobs by building its next generation
Qashqai here. Neither of these two investments are expected to actually
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