On the subject of the economy in general, the Liberal Democrats admit that there will need to be tough choices and hard cuts to reduce the deficit which they state is running at £167 billion. A not inconsiderable figure. The Conservatives believe that all the money can be recouped through efficiency savings, a notion which is pooh-poohed by the other parties.
coNservatives
Moving on to the next contender and the Conservatives stated: “Our goal is simple: to make Britain the easiest and best place in the world to set up and grow a business.” The Conservatives too were targeting the red tape mountain and also favoured a ‘one in, one out’ policy on new legislation. Interestingly, the Conservatives were also proposing to make Britain “Europe’s leading hi-tech exporter, with the help of Sir James Dyson’s taskforce,” which is an odd one – but I look forward to the outcome.
On the issue of regulation, the party
was proposing to abolishing the current tripartite scheme; firstly by dismantling the FSA monolith and replacing it with the Consumer Protection Agency, which will be created from the merging of some parts of the old FSA combined with the OFT; and a beefed up Bank of England. The regulatory issues being addressed here are the larger ones of financial stability and the role of the Bank of England; actual FSA policy is not the main issue. In the past months, for example, the Conservatives have broadly supported the Retail Distribution
Review and other FSA regulation-in- waiting and for brokers the devil will be in the detail. At the moment proposed changes, although comprehensively thought out, are still at a high level. The Conservatives were also
proposing to reduce taxes on enterprise (cutting some Corporation Tax rates and making small business rate relief automatic) and their plan to overturn the Chancellor’s rise in National Insurance contributions as soon as they assume power has been well publicised, and indeed debated between the main parties on the ‘Ask the Chancellors’ televised debate at the end of March. The question is really whether they are being realistic about their way of tackling the budget deficit. Without additional tax revenues, many are extremely sceptical that efficiency savings alone will have any real impact on the black hole in the public finances.
Labour
And so finally to the current incumbents. Perhaps unsurprisingly they focussed on the successes they have had in keeping people in work and in their homes during the recession - or at least more people in work and in homes than would be the case if they hadn’t intervened, apparently. According to their policy “Securing Economic Recovery”, they too will focus their efforts on the business community. “Making sure that businesses will be able to access the credit they need will be crucial to the recovery. The best way to do this is to boost competition between the banks which is why we have made sure that
the restructuring of Lloyds and RBS, which will see 900 branches change hands, will bring new entrants into the market.”
Certainly brokers have been looking
for more lenders in the commercial sector since the loss of some very high profile names, and Labour claims that “at least five new banks have already either established themselves as business lenders or are in the final stages of setting up”.
The thing that strikes me as I read all of these plans, policy overviews, and draft manifestos, is how much of it appears to be fiddling around the edges. The budget deficit is a big issue (at the 2009 year end both the Government’s gross debt and net borrowing at 6.7% and 68.1% of GDP respectively are defined as ‘excessive’ under the terms of the Maastricht Treaty) – and there are no radical suggestions or even sincere attempts to really tackle the problem. Cuts will need to be made – but no- one (perhaps with the exception of the Liberal Democrats) has actually been brave enough to ‘fess up. Although there are some headline grabbers (the Conservative’s restructure of the regulatory regime, for example) little strikes me as making much of an impact. It’s more like rearranging deckchairs on the Titanic; but, as it now appears that the ship isn’t going to sink anyway, when eventually (and inevitably) the recession lifts I am sure that whichever party is in power at the time will be able to claim the credit for it by their own brand of sound management. n
short term property finance no up-front fees flexible terms
fast processing and offer production small developments and refurbs considered
unusual security a speciality longer term loans available on agricultural land
mortgage introducer MAY 2010 43
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