Margareta Pagano: Is confidence being damaged by the BBC?
Sunday 13 March 2011
Every morning last week, the BBC led news programmes on television and radio with stories of more government cuts.
Each day had another depressing item about councils closing departments, police being taken off the streets and state pensions being slashed – enough to make you want to cry. Indeed, if you'd landed from Mars and only listened to the Beeb, you'd think we're heading back to a feudal society with the entire state being wiped away.
It's not just the bias in the way the BBC reports the cuts that is so awful but the hectoring, if not patronising, tone of the presenters. The Government hasn't been clever about presenting its case but, even so, David Cameron was right to ask the BBC to describe cuts as savings, and Labour's complaints are as pathetic as they are pedantic.
Whether the BBC is trying to get back at the coalition I don't know, but it beggars belief that the BBC is not grown-up enough for a proper debate. The great danger is that the drip-drip newspeak being pumped out is undermining consumer confidence even further. While the public is not easily taken in by the BBC's bias, there's no doubt that confidence is so fragile that BBC-inspired misery could drive us into an even gloomier bunker mentality. That's not good, as recovery will only come when the public feel confident again and – the acid test – brave enough to start their own companies.
The irony is that, hidden away in the gloom last week, were many reasons to be cheerful because the business side of the economy is getting healthier. Corporate liquidity is at its highest for years, and new investment by companies in their staff and stock is up 10 per cent year on year. Simon Ward, an economist at Henderson Global Investors, points out that vacancies are rising again, with the Monster Index showing posts across all industries. Manufacturing showed another increase in output – a 1 per cent rise month on month – and all surveys show that industry is booming, with strong order-books.
Add that to excellent figures on exports, and there are good signs of a rebalancing of the economy towards manufacturing and away from consumption. Ward expects the growth figures for the first quarter of the year to be flattish, mainly because of the VAT rise, but that they will show a pick-up during March. But it's in the second quarter that Ward forecasts growth will start to come through, and that GDP could be up by as much as 1 per cent. He also says the Chancellor will have more money to play with in the Budget than forecast, after the latest numbers from the Institute for Fiscal Studies which suggest public-sector borrowing will come in at £139bn in 2010-11, compared with the Office of Budget Responsibility's forecast of £148.5bn.
This is a good platform for George Osborne as he puts the finishing touches to next week's Budget. It's a big moment for him. No wonder the Treasury is said to be so nervous about how the media will receive it. Osborne has worn his hair-shirt to perfection, but now he needs to prove he can do growth even better. So far, the signs are not good; gimmicks such as enterprise zones are misconceived unless carefully directed to areas where public-sector cuts will bite deep, to help create new jobs. Much better if Osborne can show the UK is one big enterprise zone – a cut in National Insurance contributions for employees would do the trick.
And even our whinging old Auntie couldn't put a negative spin on that.
The £32bn high-speed trains from London to Manchester should be cancelled
I'm crazy about trains, any trains, but especially those sleek TGV Alstom monsters on the Channel Tunnel link or the Class 71 silver-bullets flying out of Oslo airport to the city, and it would be heavenly if all the trains criss-crossing the UK could be as cutting-edge.
So it's with the heaviest of hearts that I find myself agreeing with the business leaders who called on the Government last week to drop plans for the £32bn high-speed rail link from London to Manchester. HS2 is the new 250mph train project, first proposed by Labour's Lord Adonis, running from London to Birmingham and, eventually, to Manchester and Leeds. Fans claim it's as ground-breaking as the railways of the 19th century, bringing hundreds of new jobs and speeding up journey times.
But that's not what the 21 top businessmen and economists think, and they have the research. Led by Lord Wolfson, Next boss and the Government's competition adviser, they claim it's an expensive white elephant and a vanity project which will cost every family at least £1,000 – and which is bound to over-run on costs.
They're right; this is too much money to spend on one part of the country where the trains, compared with many other parts, such as the over-crowded South-east, are already good. The new line would cut the London to Birmingham time by 20 minutes only – work out the expense per minute – and the trains wouldn't even run into New Street station. Far, far better to spend even a fraction of the £32bn on updating track and stock on the West Coast Line and spread it across the rail infrastructure – say, on the Cambridge to Liverpool Street line (my own commute), which takes longer today than it did 20 years ago – as do so many other journeys.
Here's a question for all pro-link MPs and lobbyists: If it's really so hot, will they take a leaf out of the Victorians' book and invest £1,000 of their own money – and ask their constituents to do the same – in a new London to Birmingham bond to pay for this scheme?
Arrogant banker: Sir Fred's super-injunction backfires
In the oddest way, Sir Fred Goodwin may well have done us all a favour with his foolish decision to go to the courts for a secret super-injunction to prevent publication of information about him, even to the point of identifying the ex-RBS banker as a banker.
Super-injunctions – which ban any mention that a court order even exists – are rare and often the preserve of footballers hiding from girlfriend scandals. That Sir Fred took the injunction route, rather than suing the newspaper that was threatening to publish his details, has created even more damage. Now the world suspects there's a scandal after the leak to John Hemming MP, who revealed the super-injunction's existence under parliamentary privilege.
Once again, Sir Fred has shown the sort of arrogance which was the hallmark of his RBS reign. But he has also shown how privacy laws are another privilege of the rich which have no place in a democracy.
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