Monday 12 January 2009

In a massive hole

This morning Gordon Brown was giving a speech promising help for the unemployed. Employers, he said, would be given £2,500 for every person they trained who had been out of work for six months. Other measures such as 'extensive' job interview training were also announced.

I think that Gordon is missing the point. He can offer employers any incentive he likes to employ people, but if the jobs aren't there then they simply can't . I mean, what is £2,500 - a salary for four to six weeks?

More and more retailers are going under every day. Only this weekend I went to The Pier's website to find that they (amongst so many others) have gone into administration.

It isn't just retail either. Where I'm sitting (in construction) things are just as grim. The phone hardly rings and nearly every job I work on has now gone on 'hiatus' for an unspecified (and possibly indefinite) period.

The Government's repeated attempts to 'kick start' the economy by repeatedly lowering interest rates seems to have little effect - 3.5% since last October. Banks still aren't lending money - to each other, to business or to personal customers. Already at a record low everyone is wondering how much lower they can go... will they get to 0% - will that help at all? I saw a great quote in the letters page of a newspaper the other night; attributed to Albert Einstein "The definition of insanity is continuing to do the same thing over and over, and then expecting different results". Kind of sums up the Government right now.

All that is happening is that some (not by any means all) mortgage lenders pass on some of the cuts, and most people put the savings aside for a rainy day... after all, who knows if they'll still have a job in a few months from now. Add to that that the self same lenders are equally fast to pass on the full cuts to their savers - meaning that all the 'high interest' accounts now count for very little. In addition although house prices are dropping now isn't the time to try and get on the ladder as some banks/lenders now require a 40%+ deposit.

All these incentives (rate cuts, VAT cuts, money hand outs) will have to be paid for eventually. The good times won't seem so good when we're all taxed to the eyeballs.

The first rule of holes (I was always told) is don't dig deeper. Will someone please take away Gordon's shovel?