web analytics

OVER THE CLIFF…

By ATWadmin On December 7th, 2008 at 10:57 am

First the banks, now the car industry.

The UK Society of Motor Manufacturers and Traders (SMMT) yesterday revealed that new car sales to private individuals slumped by 45 per cent in November, compared with the same month last year – the steepest fall since June 1980. The rate of decline has steadily accelerated over the past seven months. In November no carmaker recorded an increase in sales on the year before; those in the SUV and luxury end of the market tended to come off worst.

This will lead to severe car industry retraction, companies will go bankrupt, there will be many job losses. All very sad but also all very predictable. As market demand conditions change, it is natural that supply conditions also shift and all the current talk of bail-outs will do nothing to stop this. The most efficient car manufacturers will survive, the inefficient are going to become extinct. Whilst this is traumatic for those involved, I don’t believe it can be avoided, nor should it be. Ultimately, as a believer in the free market, I want to see it prevail. On the plus side, Aston Martin sales are way down so I look forward to some good bargains in the next few years! Let’s drive, baby.

AUTO BAIL OUT TIME?

By ATWadmin On December 6th, 2008 at 8:37 am

It’s not JUST in the States where the plight of the car industry is a major issue, it’s the same here in the UK and things are only going to get worse.

Vauxhall – (GM’S UK trading arm) has held secret talks with Downing Street to seek financial guarantees that could save thousands of jobs in Britain as the carmaker’s American parent teeters on the brink of collapse. The Times has learnt that the vehicle manufacturer, which employs around 5,000 workers at plants in Merseyside and Luton, approached Lord Mandelson, the Business Secretary, last week along with other carmakers, to urge the Government to give guarantees offering financial comfort to its car-part suppliers and dealerships. The move marks the first time that a company outside the banking sector has approached the Government for financial help since the credit crisis erupted 18 months ago. Follow-up meetings with Lord Mandelson’s officials are believed to have involved representatives from other car manufacturers with UK plants, including Ford and Honda, which are anxious not to be put at a competitive disadvantage.

So, what to do? Does the Government bail out Vauxhall Motors in order to save these jobs? If so, how about helping out Ford, perhaps also Honda? And then there are all those more commercially successful car companies who will suddenly find themselves competing with government-backed competition. Will they start to flag and so then qualify for State aid? And where is all this cash aid going to come from, exactly?

There is a simple truth here. If commerical companies cannot make a profit then they should be let die. New business will rise from the ashes, phoenix-like, assuming there is actual consumer demand for the goods/services produced in the first instance.  I say NO BAIL OUT for the automobile manufacturers. Doing something can be often worse than doing nothing and let nature take its’ course.

COMMERCE UNCOMMERCIAL?

By ATWadmin On December 5th, 2008 at 12:14 pm

More totalitarian threats.

“Gordon Brown issued a stark warning to banks today, demanding that lenders must pass on yesterday’s full 1 per cent interest rate cut to their customers. The Bank of England yesterday cut the interest rate to 2 per cent — the lowest level since 1951 — following a surprise 1.5 per cent reduction in November. The Prime Minister said this morning: “I think banks should really pass on the interest rate cut. We are talking to the banks. “Remember last time there was a cut, we had to speak to them before it was passed on and we will be speaking to them again.”

Now listen, I am no fan of the banks. As a business-man, they cost me money and I would continually seek to see their costs reduce. But I hate the idea of private enterprise being bullied by government and THAT is why I do not support Brown’s strong arm tactics.  Brown is messing about with commercial practises as if he knows better. He doesn’t. This man could not run a whelk stall and yet he dares to tell British banks how they should run themselves.

First they came for the banks……

CHILD CATCHER ECONOMICS..

By ATWadmin On November 30th, 2008 at 12:18 pm

I always find Jenny McCartney an interesting read and once again she proves well worth your attention….

As you walk down any British high street this month, you will hear their sibilant voices whispering in your ear. They will be saying “Go on, you deserve it” or “Isn’t it really time you upgraded to a superior model?” or “Why not get another one in the same colour?” They are the voices of Messrs Brown and Darling, and you may very well choose to ignore them. The Prime Minister and his Chancellor are desperate for Britons to carry on spending like it’s 1999, even as the thunder-clouds of unemployment and repossession mass over our bowed heads. Their logic appears to be that if we all try our hardest to pretend that a recession isn’t here, it might just give up and go away. The trouble is, of course, that if it doesn’t – and surely even Brown and Darling can’t honestly believe that it will – then the brave, patriotic folks who are out doughtily splashing their endangered cash around this Christmas are going to end up in an even worse fix than everyone else.”

Jenny is quite right. The Brown plan is insane and yet it is being positioned as the only solution to the woes that afflict our economy. When in a borrowing led recession, you stop borrowing.  Unless, that is you forget why the child catcher in Chitty Chitty Bang Bang was so generous with the sweeties…

THE GREAT BRITISH PENSION SCANDAL.

By ATWadmin On November 28th, 2008 at 7:52 am

The maths are simple. Those of us in the private wealth-generating sector will have to work longer and retire later, with the most meagre pension provision in order that those in the public-sector can continue to retire early and enjoy gilt-edged pensions. In essence there is a chasm between that which State workers can anticipate in their old age and that which the rest of us can. Now comes the welcome news that the Conservatives may do something about this iniquity.

“Public sector workers currently enjoy bigger pensions than those in the private sector, where most final salary schemes have been closed to new entrants because they are too expensive. Instead, new workers join less generous money purchase (also known as defined contribution) schemes that are linked to stock market performance.

According to the Pensions Policy Institute, the cost of public pensions will rise by 40 per cent over the next 20 years. It says the average public sector pension is worth 21 per cent of salary, while a typical money purchase scheme in the private sector is worth only about 7 per cent.

Mr Cameron attacked this “apartheid” when answering questions from businessmen in Manchester this week. He accused the Government of being “remarkably feeble” on the issue. But although he mentioned state pensions, he did not go into his party’s plans – and yesterday the Tories sought to play down his remarks, aware they might alienate public sector employees. A Tory spokesman said everyone acknowledged pensions are a “pressing issue”.

Time to take the axe to the fatcats in the public sector who are feeding off those in the private sector. The State worker ants have had it too good for too long and the prospect of change here is most welcome – time they paid their own way.

Mr Brown, You’ve Got a Fiscal Slaughter

By ATWadmin On November 26th, 2008 at 8:29 pm

Remember the ‘halcyon’ days back in May 1997? Champagne corks were popping in the news studios of the BBC; rapacious upper class socialists talked of working class heroism as they sipped their Veuve Clicquot in the bars surrounding Hampstead Heath; and armies of politically correct apostles stood awe-struck, confident that their place in the sun was now guaranteed.

For the rest of the British population, we were assured the politics of the seventies were long gone. Blair, the creator of the new ‘centre’ground’ movement, stood on the doorstep on 10 Downing Street proclaiming the demise of Old Labour. From thereafter Labour would be a business-friendly party; the party of wealth creation; the party of fair taxation and, most importantly of all, a party shorn of class envy.

Those of us in the know were fully aware that New Labour was just an election-winning edifice, to be incrementally disposed of as the longevity of the party in government became more established.  It never was the party of the middle classes.  In fact, it bled them dry whilst encouraging them to live off a seemingly never-ending spiral of credit, thus giving the illusion of prosperity.  Once that spiral DID actually come to an end the appalling reality of the economic stewardship of socialism would hit the general population.  Yes, the banks lived beyond their means, but only because the general population were willing customers, also living beyond their means as their financial assets were gradually stripped away to fund a bloated and bloating public sector.

When individuals live beyond their safety net of sustainability, they should curtail the excesses of credit living.  So should a responsible government.  But this shambles of an administration is not interested in anything that suggests fiscal rectitude and restraint.  Convinced of its own invincibility – and encouraged to feel just so by a lap-dog media anxious to proclaim its leader as the all-singing, all-dancing financial Messiah – they have finally cast aside the last remnants of the Blair project.  They are now exactly what they were under Wilson and Callaghan: pathetic, conceited plebs infused with class envy.

This government cares nothing for the United Kingdom.  It is not interested in its welfare.  Had it been so, it would not have imbued our society with tsunamis of immigrants over the past decade.  It is only concerned with itself and the survivability of its leader.  In its own view, it can endure perfectly well without the wealth-creating middle and upper classes, which is why it is due to fleece them with tax increases when the illusory munificence comes to a close.  It has instead decided to rely on its traditional support bases – public sector wastrels, and batallions of Rab C. Nesbitts who dwell in hyperdermic syringe, anthrax-spore sink estates – to win a fourth term.  What’s more, now that the Americans have been foolish enough to elect the little Black Berkshire (that’s Hussein to you and me) to Pennsylvania Avenue, Brown will have a willing comrade with a comparably stupid economic plan.

Perhaps the only chink of light in the lesson of Hussein’s election win is the fact that harsh economic times tend to result in a change of government.  Let’s hope for the sake of our country that this is also the case here.

 

 

SPEND NOW, PAY LATER!

By ATWadmin On November 25th, 2008 at 7:37 am

Well, what do you think of the pre-budget report as Labour plans to run up £1 trillion in debt?

Labour attacks middle Britain, screws the successful, and ensures that any incoming Conservative government is riddled with profound debt. The  best thing that Conservatives could do is lose the next election so forcing Brown to pick up the devastation that this budget will create! As for the temporary VAT  decrease, the admin costs of this to small business will be extraordinary and I suspect that whilst they will have to reflect the new rates I doubt it will be passed on to shoppers.

TAX CUTS TODAY, TAX RISES TOMORROW

By ATWadmin On November 23rd, 2008 at 12:13 pm

Leaking more than the Titanic after it hit that iceberg, the Government has been flagging up like crazy the tax cuts it will announce in tomorrow’s pre-Budget speech by Alistair Darling. The centre-piece of the tax changes will be the reduction in VAT from 17.5% to 15%. However this reduction is temporary and it will go back up to 17.5%.  Also, corporation tax for small to medium sized business will not go UP in April as had been planned. There are a few other bits and pieces and in essence this is Gordon Brown’s master-plan to save  us from the economic crisis he has helped bring about in the first instance.

I’m not impressed and I agree with both the Lib-Dems and the Conservatives when they say that any tax cuts MUST be permanent. However that is not Brown’s plan – he sees these as all short term in scope and they will have to be balanced by future tax hikes.  This is because he will not countenance any reduction in the funding of the State sector. I expect the media to spin these tax-cuts as manna from heaven from our wise and benevolent dear leader when in fact they are laced with delayed poison.

LESSONS IN THE BLEEDING OBVIOUS…

By ATWadmin On November 21st, 2008 at 7:21 pm

Understatement of the day,

“Alistair Darling may be forced to set out details of future taxes rises to pay for a short-term boost to the economy, the BBC understands. The chancellor is expected to announce a package of tax cuts and public spending funded by borrowing in his pre-Budget report on Monday. But he will have to put taxes up in 2011 or 2012 to pay for it, BBC Business Editor Robert Peston has said.”

Oh really? And just how high will those taxes have to soar to try and pay back the massive debts he will rack up? Oh – hang on, suppose the Conservatives come to power in 2010, why that means THEY will be forced to raise taxes to pay back Darling’s fiscal bingeing. And I guess that might make them unpopular and open to Labour attack mid-term. And then again that wouldse the stage for a Labour return to power in 2015 on the basis that they would bring the Conservatives taxes down! Politicians are a conniving class, and Darling is setting up a future conservative administration.  

LIBERAL FOLLY…

By ATWadmin On November 19th, 2008 at 9:35 am

The totalitarian statist instincts of the Liberal-Democrat Party are on dispaly today in the news that its Leader, Nick Clegg, has demanded that the government must take more radical steps “to encourage” banks to lend to small and medium-sized businesses. 

Clegg claims there is a danger that solvent businesses could be deprived of investment and put at risk. He says the government should also lend directly to companies through the Post Office, local authorities or even by creating an entirely new State bank. The chancellor has said that £4bn will be available to help small firms. The government has made its multi-billion pound bailout of three of the UK’s largest banks conditional of them restoring the availability of funds available to small businesses to 2007 levels.

Let’s sort this out, shall we?

Firstly it is the decision of a BANK, not a politician, who it lends to and on what conditions. Part of the financial disaster has been poor lending practises by the banks and yet, amazingly, those banks bailed out  by government have been told that they must lend at 2007 levels even IF 2007 levels were economically unfeasible! You see the problem? Clegg and all the other leftists out there want to dictate to British banks what they should do and even though I do appreciate that small and medium sized business does not help, politicians meddling in this way is not the solution.

If you REALLY want to help SME’s here is my FOUR point plan. I am available (for a modest fee) to act as temporary Chancellor of the Exchequer.

1. Cut Corporation rate for SME’s. This is due to go up next April! The increase must be cancelled and a cut introduced. If you want business to survive, and invest, you must allow it to retain more profit. 

2. Cut income tax for all people. More cash in the pocket leads to enhanced disposable income and that is good for the economy as a whole.

3. Reduce the mountain of bureaucracy that burdens business here in the UK.

4. Reduce VAT and reduce the government duty on fuel.

All of this will directly help business, boost the economy, and restore confidence.

Bullying banks to repeat the mistakes of the past might get liberals like Clegg salivating but it will leave the rest of us feeling high and dry.