Nick Forsyth asks "What is Going On?"

I really am struggling at the moment to understand just what the heck is going on.  Last week our Prime Minister trotted out to the United States to tell the American bankers that they were causing him some grief by not lending to British institutions so that they could lend to those wanting mortgages. Thankfully the Pope’s visit kept it an undercover visit.

This week we see a collapse by the Prime Minister and Chancellor as Labour back benchers pile on the pressure to unwrap Mr Brown’s last budget measure in 2007 in removing the 10p lower rate of income tax. And all at the same time that they negotiate with the Bank of England to offer help with money to the UK Banking community so that we are not forced to spend our lunchtime queuing in the rain to withdraw our hard earned money the system causing financial catastrophe.

Frankly I am not impressed and if you have read previous pieces you will know by now that I had little faith in Mr Brown as Chancellor and was not keen for him to elevate himself to Prime Minister. I accept that he cannot be held responsible for all of the World’s events but he took all the accolades whilst knowing as Chancellor that lenders around the Globe were increasing multiples to ridiculous levels to fuel the property market growth that now hovers at the peak before potentially plunging over the other side of the wave.

What I am annoyed about are the ways in which these debacles will be settled. The Cabinet wish us to believe that the Bank of England help will stimulate the mortgage market and help first time buyers. I don’t think that this will happen and if you read the articles on this topic the money provided is not for that purpose. This means we are having the wool pulled over our eyes.

The 10p argument now has compensation in the form of extra “winter fuel” payment to women between the age of 60 and 64. What does the removal of a tax banding and winter fuel have in common? Answer Nothing, but it offers the chance of a convenient fix. If the winter fuel payment is wrong and needs changing then that is something that should be done for all winter fuel recipients not just those ladies between 60 and 64. It is a nonsense!

Then we have potential amendments to the minimum wage for those low paid workers who have lost out with the removal of the lower rate of income tax. Who picks up the tab for this? Business. As if it could be anyone else! And the largest part of this group – the limited companies that have had their tax rate increased from 19p to 22p in the pound so that the main rate of corporation tax could decrease to 28p from 30p in the pound.

As with anything New Labour business picks up the tab and at the worst possible time. The well publicised increase in food and fuel prices means that wage demands will increase throughout the summer and if the economy does not pick up its confidence the profitability might not be present from which to meet existing demands let alone further costs from Government.

Those same businesses who will face keenly priced bank borrowings this summer as the Big 4 try to rebuild their shareholders confidence once they have admitted their losses on poor lending.

The suggestion is that it might not be as much of a problem as I fear it might be as Frank Field has withdrawn his opposition and having won the day Gordon can now stitch him up by not delivering what he thought he was going to get. Having studied him at close quarters as Chancellor I can well believe that!

We have to accept that the majority of our politicians have little knowledge of the workplace and certainly no knowledge of running a business. They appear to think it is easy to recover additional costs from customers. Try telling that to a business that uses a large amount of fuel. If the situation was reversed and we had delivered the messages that have been told to us this last week Sir Alan would have only two words for us – “You’re Fired” and it would not be “with regret”!

In my frustration I have put forward a petition to the Number 10 web site asking for the proposed minimum wage increase to be struck out. Let's hope it gets approved and some support to let Government know that business cannot continually considered a cash cow by this or any other Government.  

The Petition has been approved and can be accessed by clicking on this link:

Join in the Petition

Date:23 April 2008