Shale gas is a good idea – but it is too soon to count on it to save us December 6, 2012 THE government’s gas strategy document, published alongside the Autumn Statement this week, rightly said that gas should play “a major role in our electricity mix” for decades to come. George Osborne was also right to focus on how to make private investment in new gas-fired power stations work without subsidies. But uncertainty is still a [...]
Black Swan author challenges the belief that pressure is bad for the economy December 6, 2012 BANKS should be more like cats than washing machines. So suggests Nassim Taleb, ex-trader and controversial author of The Black Swan, who has a new book out in time for Christmas. What he means is that living things – cats, economists, bankers – display a property that even our best-designed machinery lacks: a quality that [...]
America’s bullying on foreign tax will penalise UK firms December 6, 2012 NEXT week, the Treasury will publish draft legislation detailing how Britain’s financial sector will be forced to implement a punitive piece of US tax legislation. Although hailed this week by George Osborne as a weapon in the fight against tax avoidance, the Foreign Account Tax Compliance Act (Fatca) has severe implications for hundreds of British firms. [...]
Was the Bank of England’s Monetary Policy Committee right to reject further stimulus? December 6, 2012 YES David Kern The Monetary Policy Committee’s (MPC) decision to keep quantitative easing (QE) at £375bn was the correct one. Opinion has shifted in recent months against adding to QE. But the MPC remains divided on the subject, and an increase cannot be ruled out if the economy weakens further in early 2013. Such a [...]
Rapid responses December 6, 2012 Bank liabilities [Re: A case of lies, damn lies and our rocketing national debt, Wednesday] I’m always amazed how easily many swallow the idea that government debt and other commitments from “financial interventions” can be safely separated. By doing so, we hide the fact that the true debt figure increased from roughly £500bn to over [...]
A business as usual Statement puts Osborne at the mercy of calamities December 5, 2012 IN MAJOR fiscal consolidations, what gets done in the first two years is what gets done – unless or until there is another crisis. More than two years into the coalition’s deficit reduction programme, George Osborne now finds himself unable to change his strategy through additional tax rises or spending cuts. He spent those first [...]
The chancellor has a plan for growth – despite disappointment for banks December 5, 2012 HE HAS been criticised for taking too long to find the button marked “growth”, but yesterday George Osborne finally pushed it. Hard. With other business groups, the banks had been writing “Dear chancellor” letters, demanding measures to help small and medium-sized enterprises (SMEs), and this year’s Autumn Statement was his answer. This isn’t pure altruism [...]
Osborne revealed small measures to rebuild confidence December 5, 2012 THE background to George Osborne’s Autumn Statement was not encouraging. Growth has been very weak this year, and it comes in the aftermath of 2011’s inflation squeeze on consumers and reflects the ongoing euro crisis. The Office for Budget Responsibility has marked down its growth forecasts significantly. Taking this year together with the next three, [...]
Is the government right to delay its target of eliminating the structural deficit to 2017/18? December 5, 2012 YES Angus Campbell The chancellor has no option other than to push out the deadline to hit his fiscal deficit targets, as there simply isn’t enough growth in the economy. In the past few weeks, growth forecasts have been slashed. If he had stuck to his original dates, it would have meant austerity on a [...]
Rapid responses December 5, 2012 Debt calculations [Re: A case of lies, damn lies and our rocketing national debt, yesterday] It’s unsurprising that so few know the difference between the deficit and debt. The really shocking story is the way the government calculates its liabilities. The very first lesson in any accounting course is reflecting reality, and using accounts to give [...]