Gary's News and views

Gary Streeter MP for South West Devon

Gary writes a weekly article which appears in the Plympton Plymstock and Ivybridge News in South West Devon. The articles are published here.


Thursday, 10 December 2009

This is not over. The news of 1700 job losses at Corus in Tyneside last week sent shock waves rippling through the British economy. Many small businesses are hanging on by their finger tips. Over one million Brits agreed to a pay freeze or cut in wages last year. Confidence remains low. The banks are still behaving badly, clawing back wherever they can. Public spending cuts – whoever wins the next election - are bound to take their toll on the economy, as the new government tries to attack the massive debt mountain.
For all of these reasons we cannot assume that we are set fair to recover even if the figures for the current quarter show that we are technically out of recession. There remain, sadly, a number of pent up problems in our financial system that could turn around and devour us. Some predict a double dip, others the gentle floating free from the rocks. In truth, nobody knows. There are as many scenarios as there are economists. We will just have to wait and see.
The banks must start lending again – not irresponsibly for that triggered the problem - but sensibly without wanting belt, braces body and soul in return. The government have poured in billions on our behalf to rescue them and the Bank of England have printed £200 billion and handed it over to banks to help them lend again. It is not working. I understand the strong feeling towards bankers and their excessive bonuses, but it would help us more if we could solve the lending logjam rather than take our revenge.
There is positive news. There has been so much capacity stripped out of some industries that they are starting to recruit again to cope with demand. The car scrappage scheme has been a success – such that there is now a waiting list for new cars and the price of second hand cars has risen. Value for Money businesses have enjoyed great success. Those on tracker mortgages still in work have found that disposable income has gone up not down, although this will not last forever.
But if ever there was an age of insecurity, surely this is it. Banking system shaken, Parliament shaken, climate change fears reverberating in the background.
As we approach Christmas 2009 perhaps has there ever been a better time to seek our hope, not in politicians or experts or material things but in more timeless truths.

posted by Gary @ 10:08