Jan 23 2009
The bagel has arrived
In “The West Wing”, deputy Chief of Staff Josh Lyman let it be known that no-one was to use the word “recession” in the White House. It was referred to in one episode as “the bagel”. Today’s news confirms that Britain is the midst of a serious bagel.
Many in the media are wondering whether this Is this the week that the Government finally lost control of the economic situation. I don’t think that this is a question really worth asking, because the truth is that despite Mr. Brown’s oft-repeated claims about his measures that will save the economy , the die was cast before last summer. The shrinkage of by 1.5% in the last quarter of 2008 puts us officially into a recession that will last for most, if not all, of the year ahead. In Swindon, Tyco, which has been a major employer occupying several sites in the town, has today announced 223 redundancies and a closure of its Cheney Manor site, leaving only Dorcan left. Bad news about Swindon jobs seems to be coming with a worrying frequency at the moment. The closure of the Woolworths depot in Dorcan put 500 out of work. Honda employees who choose to stay on will have half pay for April and May. The age of economic calm has well and truly ended.
What the Government should be doing is concentrating its firepower on key areas; namely to assist the flow of credit to large and small companies so that business can continue, which is done via loan guarantees and targeted support for the banking sector. Public expenditure should be pared back where necessary – in short, the Government should be seen to be behaving calmly and responsibly in the midst of crisis. Instead, we have the headless chicken approach, which seems to be undermining confidence in the markets. The Prime Minister told us this morning that every weapon in the armoury is being used to deal with the recession. The trouble with this approach is that he makes his position sound all the more desparate. Vince Cable characterised this week’s latest bank bail out as like the Government trying to revive a corpse. The image that enters my head is of a cornered Mr. Brown, hurling everything including the kitchen sink into the fray. Most of these assaults seem to be ill-aimed and ill-timed, unfortunately.
The pound’s downward spiral is good for exports, no doubt, but brings with it a host of other questions about the inherent value of the British economy. Its nearly 33 years since the Heathrow Turnaround, but are we heading for a repeat performance in 2009?
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