More than just snow hurting small biz

No to 'stabiliser', yes to duty freeze, double yes to duty cut

The idea of a 'fuel stabiliser' concerns me; they proposed this the last time fuel prices were where they are now (mid 2008) and then went very quiet when prices dropped back down again. I can only presume that such a 'stabiliser' would lock us in to £1.30/l diesel if oil prices go down, yet if they go up then of course there will be 'no choice' but to increase prices.

Also, if the government was to 'stabilise' the price by making duty inversely proportional to oil prices or wholesale fuel prices; then I imagine that OilCos might be tempted to massage those prices a little higher, knowing that the government will take the hit as pump prices are locked.

As a small business type with a small fleet of vans (and a lorry for good measure) I think a good start would be to stop putting the bastard duty up; never mind stabilisers. Our particular industry is still very tender after a brief spurt of recovery last year, we really dont need one of our main costs (and our customers' too) being hiked. I know the govt needs the cash at the moment, but I would draw their attention to an old saying about geese and golden eggs.

And the next crucifiction will be carried out by the BofE MPC

Seems that an increasing number of these people are losing their marbles (2 at the latest count).

They appear to think that they can reduce global inflation by further sucking money from the British poor to give to the rich by imposing higher interest rates.

The inflation we see in the UK is based on global oil and food prices rising, clearly we consume so much of both compared to say the Chinese, Indian, American or other European citizens that, according to these people, global demand and inflation is down to just those in the UK with a mortgage or credit card!

So, the answer is clearly to take more money from those with mortgages, credit cards or other debts and give it to the rich ponces that already have more money than they know what to do with (5 million pound bonus anyone?)

Now the other half of the inflation equation - supply - is completely ignored by these two. When demand increases and supply increase price doesn't change. But to increase supply you have to invest in more plant, more machinery, more people to increase business. BUT if you increase interest rates, or even if you just threaten you might, business can no longer afford to invest in increasing production - especially smaller business. So raising interest rates stops investment, stops the increase in supply, inevitably plant, designs, machinery and people wear out and supply will ultimately drop (as it has in England - try buying a British car these days to see how far our supply capability has fallen).... ultimately then raising UK interest rates has the following effects:

a) No appreciable change in global demand, so no slowing down in global inflation in commodotie products

b) An appreciable cut in investment by British industry leading to a slow down in manufacturing, exports, employment and the destruction of yet more of our potential future, reducing supply and boosting inflation.

c) An appreciable captial movement from those who can't afford to live without borrowing to those already rolling in it.

I expect the BofE interest rates to shift up appreciably during the next few months and the recession in the UK to deepen hugely, unemployment to climb from its present (ONS figures) 30%, tax rates to rise to pay for the benefits required for the newly unemployed, further public service cuts, further unemployment, further price rises as the Chinese continue to make use of the fact that our manufacturing is shutting down totally............

In short further disaster.

Of course, even the threat of this is probably enough to start the problem - if you were a business would you borrow now when you think the debt will get far more expensive in the near future?

Pity we can't have some 'leaders' who can think beyond their next expenses fiddle or golf game.