In an interview with the Financial Times he describes himself as a “relative optimist”, a position that reflects what businesses have been telling him.
"The companies I talk to can see that growth is slowly and steadily building," he says. What’s more, Mr Cridland is backing the government’s strategy for recovery and growth, saying: "The coalition has done well for business so far."
Those are comments likely to be music to the ears of David Cameron and George Osborne but the CBI chief doesn’t stop there.
He throws down something of a challenge, saying the time has come to step up the pace even more and adding: "I believe we have 24 months to deliver a strategy which achieves above-trend growth to maintain the living standards of the British citizen."
A key date in the diary of Mr Cridland – and a fair number of British citizens and businesses – will be 23 March, when Mr Osborne presents the 2011 Budget, which the CBI chief says needs to set out a strong growth strategy as a twin priority to reducing the national deficit.
Mr Cridland’s comments suggest that he is likely to be a critical friend to the coalition: supportive where he feels it appropriate, ready to speak out when he thinks they’re going wrong. His reaction to the government’s Budget and growth strategy should make for interesting listening and reading.
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( 3 / 609 )The head of UK Financial Investments (UKFI) – the body tasked with looking after the government’s holdings in various troubled banks – presented the government with an interesting dilemma when he told MPs that breaking up the largest institutions would be likely to reduce the value of the stakes held by the taxpayer.
Robin Budenberg told the Treasury Select Committee that any attempt to divide retail and investment banking would have a negative impact on the share prices of Lloyds Banking Group and Royal Bank of Scotland – in which the government currently holds stakes worth £67billion.
The coalition’s Independent Commission on Banking (ICB), which is currently investigating the structure of the banks, suggested this week that it may call for the government to break up some of the largest institutions – meaning no moves to sell the taxpayer’s stakes are likely until the position is confirmed, which is likely to be in September.
Mr Budenberg admitted there would have to be a ‘trade-off’ between the government’s aims of maximising competition in the banking sector and achieving the biggest return possible for taxpayers on the sale of their stakes. If the ICB does indeed call for a break-up of the likes of Lloyds and RBS, this will be a difficult balance to strike.
Of course, Mr Budenberg’s comments only represent his own views and there may be others who consider the banks could be worth just as their constituent parts. This will not be an easy decision to make when the time comes, but whatever happens, it is in everyone’s interests that the banks concerned continue to recover in the meantime, maximising their value for a break-up or eventual sale.
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( 3 / 918 )The number of jobs to be axed at local councils over the coming months is steadily mounting as public sector cuts start to take their toll in the bid to drive down the national deficit.
Since the start of the year, Hampshire County Council has announced that 1,200 jobs are to go. Norfolk County Council is to shed 1,000 jobs and Manchester City Council 2,000. Portsmouth City Council has said it will cut its workforce by 400.
Today, we have reports that Liverpool City Council is to slash around 1,500 jobs from its payroll over the next two years as it seeks to make £141 million of savings between now and 2013, with £91 million in cost-cutting required in 2011-12.
Interestingly, the news comes in the same week that Liverpool opened what is being dubbed an “embassy” in London to help woo investors.
With Liverpool identified by independent research group Centre for Cities as one of the UK cities likely to be hardest hit by public sector cuts – in 2008, around a third of jobs there were in the public sector – it’s a bold step designed to put Liverpool firmly in the shop window.
As Liverpool City Council leader Cllr Joe Anderson says: "Private sector investment is going to be vital to repair the damage caused by the cuts imposed on us.”
Sited, rather appropriately, close to Liverpool Street, the embassy is a joint scheme by the council, public sector groups and 30 Liverpool businesses and is funded by the businesses.
Initially it will be open for three months, but if the success of the Liverpool pavilion at the 2010 World Expo in Shanghai is anything to go by – it attracted 770,000 visitors – it may well be extended.
Those Liverpool council job cuts are a real blow to the local economy. But Liverpool is clearly fighting back and that can only be admired. Perhaps there’s a lesson to be learned elsewhere in the UK.
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( 3 / 813 )Appealing against a late filing penalty on VAT or other tax might be a smart move, given that more than half of such challenges so far have proved successful, according to recent statistics.
HM Revenue & Customs’ (HMRC) Internal Review Procedure, brought in on April 1 2009, has provided an easier method of querying tax appeal decisions and a growing number of firms are using the procedure.
According to HMRC’s own site, ‘the new review process will help provide a more consistent approach to the way we seek to resolve disputes with those who disagree with appealable tax decisions made by HMRC. Reviews … will be done by a trained review officer, who has not previously been involved with that decision, who will be able to offer a balanced and objective view.’
But is this ‘balanced and objective view’, which meant that almost sixty per cent of decisions were overturned between the inception of the Review and September last year, a good thing or a bad one?
If such a high percentage is overturned at Appeal, might it not mean that the penalties were issued wrongly in the first place? There has even been speculation that HMRC might be under pressure to issue as many fines as possible, or is, in common parlance, ‘trying it on’.
However, HMRC refutes this suggestion, saying that surcharges for late returns, which form the majority of penalty notices, are issued automatically and would generally be withdrawn or reduced if there was a good reason for their late filing.
A spokesman said that “the internal review process is there because we are listening to our customers”.
The statistics could also be viewed as a measure of the fairness of the review procedure. Whatever your point of view, it would appear that merely accepting a penalty is no longer the only option.
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( 2.9 / 857 )The experts were predicting a slowdown in the rate of growth during the last quarter of 2010 but few had foreseen the alarming figures released today which showed a contraction of 0.5 per cent.
This contrasted with growth of 0.7 per cent in the previous quarter and a healthy 1.1 per cent the quarter before that.
Immediately, the claims and counter-claims began, with opponents of the government’s austerity programme arguing that, by cutting public spending too quickly and too deeply, they had blown the economy off course.
However, chancellor George Osborne resisted calls to change policy, claiming that the measures taken so far had restored Britain’s international credibility and, without December’s poor weather, the figures would have been healthier.
Nonetheless, the government is likely to be disappointed by the latest numbers, which show the economy still has some way to go before it returns to normality. An early rise in interest rates may have also become less likely, despite inflation continuing to remain above target.
Of course, the figures may yet be revised upwards and the relatively mild weather so far in 2011 may help to reverse some of the losses. Nonetheless, today’s news has shown once again the delicate balancing act government has to perform in keeping the economy on track.
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