It was business questions today and the main focus was on the current battle of words between business groups and the government. But there was also an interesting moment when Vince Cable played down the potential benefits of credit easing.
“Nobody ever argued that the credit easing scheme would solve the problem of small business lending. We argued that it would cheapen the cost, and that will happen. All the major banks are now engaged in arranging packages to enable those lower costs to be passed through. I think the hon. Gentleman will be pleasantly surprised by the take-up within a few months.”
Is the government in danger of handing over its reputation for being pro-business to Labour?
William Hague’s message in yesterday’s Sunday Telegraph that businesses should “work harder” to promote growth was certainly bold.
At a time when the economy is stagnating and the government’s strategy is increasingly being questioned, turning round and blaming the sector of the economy you’re relying on to turn that round seems like a reckless strategy.
Before we get on to why it’s not a good idea to blame business for not supporting growth, let’s mention why Hague has a point:
- The govt is implementing the cuts programme many business groups have supported, and is sticking to it.
- Corporation tax is low and getting lower – on its way down to 20 per cent.
- Embassies around the world are pushing UK trade as their top priority, and the prime minister has taken huge business delegations on state visits with him on several occasions.