How would you stimulate the uk economy?

Radiantsoul

1. Liberalise planning laws - have a presumption in favour of development - especially for power and transport.
2. Gradually erode the greenbelt. I would Compulsory Purchase blocks of land(around London in particular), auction them off to developers and use the proceeds to enhance infrastructure, etc.
3. Revise the tax system with more of a logical, simplier approach. I would move towards taxes on wealth, carbon, consumption and sin taxes. I favour the use of charging orders to secure government debts.
3. Speed up or cancel the High Speed Rail. I cannot understand why it is going to take longer to build a railway in the 21st century than the 19th.
4. Accept more immigration is inevitable and work towards delivering the housing and infrastructure required
5. Radically reform pensions - we need to drive up domestic savings and pensions are the best route to do this, but currently there is significant political risk in pensions.

HAMISH_MCTAVISH

vivatifosi wrote: »

I think availability of cash is still an issue, especially for small businesses.

It's still a huge issue.

One of the things that really frustrates me is when we see representatives of the banks on TV claiming that they would love to lend more money but the demand just isn't there. In the case of SME's that's an outright lie.

There is plenty of demand, from established, profitable, well run businesses who would like to expand and create more jobs. But they simply cannot access the funds to do so.

And even when banks do offer lending to small businesses, it's often on terms so onerous as to be laughable.

I've seen banks offer business loans at credit card rates. I've seen banks ask for all 4 directors of a limited company to put up their house as security against a 100K loan, despite the fact the value of assets of the business exceeded that loan amount by a factor of 5 and it had no other borrowing . And I've even seen a bank offer to lend a company 100K at a pretty decent rate..... But only if the company or it's directors would put 100K on deposit in the bank at a much lower rate and allow the banks to hold it as security against the loan!

You sometimes really do have to wonder if the employees of retail banks were dropped on their head when they were children, because it's pretty clear that most of those working in business lending are certifiable idiots who haven't the faintest idea of how businesses operate in the real world or how to tell a good risk from a bad one.

As a result, expansion is slowed, job creation is slowed, competition within the economy is reduced, and economic growth is delayed.

The PLC I work for carries hundreds of millions of pounds in debt at relatively decent rates, and primarily uses those facilities to re-invest in the capital assets of the business. Driving up margins and increasing market share, but creating very few new jobs in the process.

If that bank's money were invested in small businesses instead, the job creation and expansion of the wider economy would be absolutely massive by comparison. It really is time the politicians grab the bull by the horns on this issue, and cajole the banks into actually performing the services they exist to do.

I fully buy the argument that they were too big to fail, and represented a systemic risk to the economy if allowed to do so.

But now that they have been bailed out with our money, it's time more people understand the systemic risk that they pose if they continue to operate dysfunctionally by refusing to lend to individuals and small businesses that are the real engine of growth for our economy.

Joe_Bloggs

Vince Cable has been in the news winging as usual. I then came across the German State controlled bank KfW. Was this the kind of banking entity than lends to SME etc. that VC wants ?
J_B.

Pennywise

dori2o wrote: »

Reduce the rate of corporation tax. (to pay for the NMW increase)

Agree, but any reduction should also apply to unincorporated businesses, i.e. sole traders and partnerships who pay income tax not corporation tax. When the idiot Gordon reduced corporation tax, there was a stampede of sole traders etc converting into companies, which caused Gordon to have to increase corporation tax again!

dori2o wrote: »

Abolish NI

Agree, I've been saying this for years. Increasing employer's national insurance was a stupid thing to do at a time when we need businesses to employ more - how is increasing their costs of employment going to do that?

In actual fact, if you scrapped Ees and Ers NIC, and increased both income tax and corporation tax to 25% there's probably be a manageable difference in revenues, but it would really be a kick for businesses to employ more people as there'd be no NIC on the wages and the tax relief on the wages would be increased.

It's time that NIC (i.e. a tax on workers) was scrapped - we need more jobs and we need more workers. Taxing work at higher levels than other unearned income such as pensions and investment income is ridiculous.

SecondLegDownIsTheBigOne

We introduce a national minimum house price with a built in annual inflation +10% escalator. We abolish lending restrictions and make it illegal to deny a mortgage to anyone with a pulse for whatever amount they choose. We should probably consider the potential of the post-mortem mortgage market. We abolish tenants' rights and make it mandatory to spit after using the words tenant or renter. We make it illegal to accuse someone earning over 30K a year of benefit fraud, including those earning over 30K a year because of benefit fraud. We abolish all rules governing MPs expenses and double their salaries. Then we borrow $h1tloads of money and use it to buy houses from each other until we're all filthy rich.

Oh, and we make Krusty Allslop the queen. (This is just a joke, please internet police, don't smash my door down at 4am in the morning, I do not advocate treason.)

DominicJ_2

Rochdale_Pioneers wrote: »

Great. Lets mandate the banks to start lending again. All sides agree that the lack of credit for SMEs is throttling the economy. We own several banks. It should be far simpler a task than when we didn't own several banks!

So, we are in a mess because northern rock lent money to bad debtors
To get out of trouble, we should make Lloyds do the same...

There is no quick fix
Cut Tax, cut spending, with time, the economy will return

SecondLegDownIsTheBigOne

The BOE should also publish banknotes as downloadable .pdf

SecondLegDownIsTheBigOne

Abolish the base rate.

Oh, they've done that one already.

Rochdale_Pioneers

DominicJ wrote: »

So, we are in a mess because northern rock lent money to bad debtors
To get out of trouble, we should make Lloyds do the same...

There is no quick fix
Cut Tax, cut spending, with time, the economy will return

1. Have you checked Northern Rock's default rate? Its very low
2. Noone is suggesting that banks be forced to loan money to "bad debtors". Just that they should loan some money to someone instead of their current "computer says no" approach

Generali

Rochdale_Pioneers wrote: »

1. Have you checked Northern Rock's default rate? Its very low
2. Noone is suggesting that banks be forced to loan money to "bad debtors". Just that they should loan some money to someone instead of their current "computer says no" approach

The Government is unlikely to default (hence the AAA credit rating).

As a result, banks will lend money to the Government rather than to individuals or companies.

The computer says no because the computer is looking to maximise profit for minimum risk. The computer is 100% correct.