Julian Knight: Skewing Bank's Funding for Lending will not help business
Saturday 16 March 2013
David Cameron has poured cold water on calls to slash business taxes. That's a great shame as a cut in business taxes in this week's Budget could provide a huge fillip to the economy right now.
Think about it – what is better, a pound in the pocket of a small business person ready to invest and employ or splashed on Government bureaucracy?
Of course, we are borrowing far too much but all that would be needed to give a proper boost to small business (rather than the endless politician talk about a "bonfire of red tape") is to re-allocate resources from elsewhere – overseas aid for instance.
Instead, though, it seems the answer being offered is to try to skew the Bank of England's Funding for Lending scheme away from mortgages to business.
This would be economically counterproductive because banks turning off the lending taps in the mortgage market would mean higher rates and further consumer retrenchment and in turn lower growth. If the Government wants to help business it should use the tax system not the banking sector.
Let's cut the cost of childcare
I do wonder how parents cope, as £11,000 a year is the cost of an average childcare place according to the latest research. When you take into account that this is often comes from salaries that have already had tax and national insurance taken out, the working parent needs to be earning close to £15,000 a year before they can even cover childcare costs.
Swiss parents are the only European parents to have higher costs, which is a real barrier to British women's careers and damages family spending power. We have endless parliamentary investigations but why not conduct one into an issue that really matters to British families and learn lessons from other countries on providing lower cost childcare.
Pension plan will pay off
Pensions Minister Steve Webb has come under fire from the likes of Labour shadow Gregg McClymont and former Saga chief Ros Altmann over his plans for a single-tier state pension. They will see some women born between 1952 and 1953 lose cash relative to men. This is unfortunate, but even the most perfect pension reform will create a few losers. Overall, though, the single-tier state pension is an excellent idea. Let's get on with it.
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