It’s a funny old world or is it?

Just when you think you’ve seen it all something else happens. A government with a Prime Minister who made his reputation pursuing Miss Prudence starts throwing money around like a lottery winner, the Governor of the Bank of England declares that nationalising the banks is an option and RBS/Nat West announce that they are going to start doing business again.

Let’s get the last point out of the way straight away. Well done RBS/Nat West, let’s hope that the others follow their example sooner rather than later. Unless and until all banks return to doing sensible business any hope of recovery is nothing more than a pipedream. I don’t mean returning to the target driven recent past where lending at any cost appears to have been the norm but a return to what many of us of a certain age would have regarded as “good business”. Sensible lending where all concerned understood the risks and where clients knew where they stood.

As for the Governors aside that nationalising the banks was “an option” something clearly needs to be done to get the them “out of neutral” but, as things stand at the moment, it would be difficult to say who would be worse, our under fire bankers or our government.

As for the measures announced this week by the Chancellor let me say that I, like everyone else in the country, really, really hope they work. Do I think they will? Well that’s another story. Actually I am far from convinced and certainly question some of the measures announced. Reducing VAT 2.5% might have some marginal impact but given the level of discounting one already sees on the High Street and elsewhere I really can’t see it having much effect.

What concerns me greatly is the thought that as the economy is recovering businesses will be hit again by increases in National Insurance. I know the so called “giveaways” need to be financed but raising NI thresholds is a measure which will ricochet around the system like a stray bullet. Adding costs to employing individuals will add to wage pressures and make businesses even more reluctant to take on new people.

Ultimately, of course, its always business that pays and I acknowledge some good things in the Chancellor’s statement. Reversing the decision to charge empty premises tax for which we have been campaigning for some time, is welcome and the increase in funding for the Small Firms Loan Guarantee Scheme (as long as the banks get behind it) will have some impact.

Overall though the statement brought out my curmudgeonly side (not usually far from the surface anyway) and I am inclined to view it in the same light as most budgets in recent memory. A mixture of “smoke and mirrors” and we’ll all pay for it in due course. If it does the trick though, along with everyone else I will be delighted.