I was truly amazed at Chancellor George Osborne’s decision to postpone the 3p a litre fuel increase due at the start of next month.
While welcome for all motorists, it just does not make economic sense.Politicians always try to bury bad news, and this was a classic case of being able to get away with an increase in tax, without causing a riot.
The continuous fall in Brent Crude meant the price at the pumps has been drifting down, albeit, far too slowly. So the increase would not have seemed too bad in a falling market.
With the taxman seeing reduced revenues due to the recession and the country’s debt mountain still rising, to perform yet another U-turn, stopping money flowing into the Treasury just seems plain daft.
Perhaps Osborne had advance knowledge that the latest bad news concerning various banks’ fiddles was about to break, and the postponement of the fuel surcharge would, in some way, deflect inevitable criticism.
It is common knowledge that many Tory MPs are becoming restless about the level of tax being levied on ordinary families, plus growing resentment concerning the cost and interference by the EEC in relation to British businesses. The word “referendum” is being heard more often. This can only increase friction between the Lib-Dems and the Tories.
The Libor fiasco does nothing to improve the reputation of Banks in general, which is sad, for their part in any recovery is essential.
Government has to get a grip and, if necessary, construct laws that will hopefully ensure that nothing like it will ever happen again.
Meanwhile, the money set aside by Government to help industry at the sharp end is not getting through.
Banks are still insisting that loans will only be made after examination of business plans which indicate zero risk. Even then, stiff rates of interest are applied, coupled with very costly arrangement fees.
Perhaps another U-turn would be for Government to withdraw these funds from the banks and set up a special department that would consider applications direct. Assistance would then get to the small businesses crying out for support.
Looking back, I cannot remember a time when the institutions, Government, banks etc, were held in such low public esteem. Integrity is lacking, its place being taken by greed.
* Russell Luckock is chairman of pressings firm A E Harris