THE BLOG

Woman Gives Birth - World Found to Still Be Turning

25/07/2013 11:40 BST | Updated 23/09/2013 10:12 BST
AP

It would be churlish (and probably illegal) not to offer hearty congratulations to the Royal Couple. Childbirth is a difficult and stressful experience (I speak from the father's perspective - Apparently my wife had a rough time too). Having to do it in full public view and then face the world's media straight after has got to be awful. The news is even jostling for front page position in Brazil, which has a visiting Pope and revisiting rioters to deal with.

What with Murray winning Wimbledon and weather forecasters muttering about 1977, the country appears in exultant mood. But against that backdrop, the economy seems to be sluggish, if not downright stagnant.

The Chancellor has stopped blaming Labour for absolutely everything, and instead has started to blame lack of growth. No growth equals a lower tax take, higher social security payments, and increasingly desperate stimulus measures.

Fortunately, the government announced plans on Thursday to boost two sectors of the economy: Property theft and loan sharking.

I am hoping that I have enough time to get a payday loan licence before next January when the banks start to publish lending rates by postcode. I shall immediately open shops in each of the ones where there is no lending and offer extortionate loans on easy terms to vulnerable people who the banks currently refuse to touch. Thanks to Danny Alexander, I need perform no costly market research as to the places the banks have written off. Instead, the government has done my job for me.

At the same time, and to properly hedge my bets, I intend to block all the major arterial routes into the area of high lending (thus creditworthy and rich), and "tax" people on the way in. While Dick Turpin ultimately came off quite badly for pursuing a similar strategy, capital punishment finally disappeared in 1998, so the consequences of failure have diminished somewhat. Hopefully the completely legal and ruthless exploitation of the poor will come off instead.

The "Postcode lending" initiative is another example of style over substance. All of the attempts to "shame" banks into lending more to SME's have failed miserably, and last week's announcement that lending has fallen should be no surprise.

What small businesses need is investment, which is not always the same as lending. We need an intermediate level of access to funds that allows businesses to grow without saddling the business with debt, or the directors with nightmarish personal obligations.

Some attempts have been made to stimulate money coming into SME's. In the technology sector "G-Cloud" is designed to divert some government expenditure on IT to smaller companies and away from the large systems integrators. These sorts of initiatives are far better than standard commercial lending as what most business people want is more business, not more debt.

But not every company produces goods that government wants to buy. And not every company can wait for the "trickle down" of money coming into the economy such that people have the money to buy their goods.

That is where a National Investment Bank comes into play. Not government sponsored venture capital, but not government funded debt either. It needs to be an institution that can take more risk than a commercial bank, but which is not looking for the returns that venture capitalists need.

Without doubt, it would fall foul of EU State Aid rules, but if we are to kick-start the economy, who gives a monkey's. Personally, I'm very happy for the Germans to have one as well (if they don't have one already - I tried to Google it, but O-Level German only gets you as far as "Bank") , so long as neither of us tells the French...

I'm hoping that they'll back my plan to start a factory making crowbars and swag bags...