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http://www.guardian.co.uk/politics/2011/oct/03/george-osborne-credit-easing-plan

A scheme to avert a second credit crunch through a multibillion pound credit-easing programme for small firms, funded by the Treasury, has been unveiled by the chancellor, George Osborne.

The credit will be provided by the Treasury through an arm's-length operation direct to companies, with the Bank of England acting as the Treasury's agent. Under the scheme, the Treasury will buy small firms' corporate bonds, providing cash direct to struggling firms unable to gain funds from the banks.

The initiative is separate from the quantitative easing by the Bank of England which is, in effect, the printing of money. Ministers also see the credit easing as a medium-term way of developing a US-style credit market for small and medium sized firms that does not depend on banks.

The proposal – an admission that the banks are still not lending properly – was presented as a sign that the Treasury is responding to events in a way that does not involve abandoning deficit reduction.

Osborne has also announced that anyone applying to make a claim at an employment tribunal will have to pay a fee of between £100 and £150. A full-scale hearing will cost £1,000, and any claim for more than £30,000 in compensation will cost more.

The money will be recoverable if the claim is won, but Treasury officials believe the costs will deter vexatious claims.

The chancellor also confirmed that Britain will abandon its leadership role in climate change when he said it would not go further than other EU countries in its commitment to cut its carbon emissions.

"We're not going to save the planet by putting our country out of business," he said.

Osborne's overall tone was to provide reassurance and some optimism for the future, insisting that "together we will ride out the storm".

He told delegates at the Conservative conference in Manchester: "I don't want anyone to underestimate the gravity of the situation facing the world economy. But I also don't want anyone to think that the situation is hopeless, that there is nothing we can do.

"Our economic problems were not visited on this country by some cruel act of God or blind force of nature. They were created by the mistakes of human beings, and the endeavour of human beings can put them right."

Treasury officials also hailed the way in which Standard and Poor's credit ratings agency had confirmed Britain's AAA credit rating in the middle of the speech, insisting they had no influence over the content or timing of the announcement.

Osborne also rebuffed those in the cabinet who have been proposing a £5bn to £10bn fiscal stimulus, pointing out that that kind of stimulus would be dwarfed if it led to higher interest rates.

Labour claimed the resort to credit easing was a sign that Project Merlin was not working and said that deal with the banks had been designed to ease the flow of credit to small firms.

Osborne admitted in his speech: "Because the banks are damaged, they won't lend at the current low rates. It's like putting your foot on the accelerator but, because the transmission mechanism is not working properly, the car wheels won't respond."

The Treasury officials said the credit rating plan stemmed from an approach to the economy first laid out by Osborne in a 2007 speech, and was similar to the national loan guarantee scheme he had proposed in the UK.

The Treasury credit would not add to the deficit because the Treasury is buying assets, and therefore does not represent spending money that will not be recovered.

Osborne made a bold pitch for the aspirational centre, using the booing of Tony Blair's name at the Labour conference as a sign Labour was no longer in touch with the centre ground.

So, we the taxpayer get to lend real money to businesses turned down for loans by banks?

I thought the entire point of allowing banks to extend credit, rather than the government just issuing new money, was that banks would allocate the money efficiently?

It does beg the question as to why banks need to exist.

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http://www.guardian.co.uk/politics/2011/oct/03/george-osborne-credit-easing-plan

So, we the taxpayer get to lend real money to businesses turned down for loans by banks?

I thought the entire point of allowing banks to extend credit, rather than the government just issuing new money, was that banks would allocate the money efficiently?

It does beg the question as to why banks need to exist.

I thought we already owned some banks, so we already lend.

So now we're proposing to lend via the government because the government owned banks aren't prepared / allowed to lend?

Sounds like a plan to me - where do I sign up?

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Deep joy. We are now in competition with bankrupt of englansd slush funded companies. Companies that can and probably will go back to the bankrupt of england for more money again and again now matter how bad they are and the bankrupt of england will keep funding them and keep them going so that it makes them looko like astue bankers who know who to back - well all they have to do is print more money.

The net result is likely many other companies without such lines will go to the wall competing (or trying to compete) against these central bankster sluch funded entities.

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I thought the entire point of allowing banks to extend credit, rather than the government just issuing new money, was that banks would allocate the money efficiently?

BWHAHAHAHAHAHAHAHAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA!!!!!!!!!!!!!!!!!!!!!!!

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So, we the taxpayer get to lend real money to businesses turned down for loans by banks?

I thought the entire point of allowing banks to extend credit, rather than the government just issuing new money, was that banks would allocate the money efficiently?

It does beg the question as to why banks need to exist.

It begs the question as to why they require back up security when lending to businesses that need to expand and grow, but at other times lend vast sums to others at a higher risk on all but a wing, a prayer, a good name and a promise. :unsure:

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Thank goodness it sounds like a scheme that's impossible to abuse.

It's not as if owners and directors will use the credit lines underwritten and guaranteed by the government (taxpayer) to go to bonus heaven. We already know how thorough government is in looking after taxpayers money and keeping bailout money away from the bankrupt bankers wage and bonus pots.

After all why should bankers and politicians be the only ones to milk the system, the only ones to milk the taxpayer.

For sure some time down the line the taxpayer is going to be hearing government spokespeople saying something along the lines of "It's not governments role to interfere in the allocation of credit line money within private business and we don't have an opinion on why it's all being spent on director bonuses - look at how successful the scheme has been with exponential growth in formation of new businesses".

It's the "fire up" economy :o

Edited by billybong

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Deep joy. We are now in competition with bankrupt of englansd slush funded companies. Companies that can and probably will go back to the bankrupt of england for more money again and again now matter how bad they are and the bankrupt of england will keep funding them and keep them going so that it makes them looko like astue bankers who know who to back - well all they have to do is print more money.

The net result is likely many other companies without such lines will go to the wall competing (or trying to compete) against these central bankster sluch funded entities.

+1.

It would be more sensible to award grants to companies for taking on a certain number of employees for a set period of time (with clawbacks if promises are broken). That would help Britain get back to work.

Businesses need customers, not loans. The more staff a business has, the better chance it has of finding new customers.

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When / if these businesses go bust, the government should get it's money back first.

You know this won't happen and there will be directors paying themselves a good amount of money whilst the business sinks below the waves. Never mind it's tax payers money just keep the cherade going until we retire in 5 years time.

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Some of you may know my brother has invented a swimming pool insulation system that if retro fitted to all existing pools and fitted to new pools worldwide will effectively wipe out the UK's CO2 footprint!

Becuase his business is classed as construction banks wont lend to him to expand his business despite this innovation, its a computer say no situ. :)

He's got patents, the building regs changed for this year and another change in 2013 and is saving sheds loads of money for his customers by redcucing their energy consumption so ticks a number of boxes but just cant get the funding he needs to expand.

Coupled with the US no1 leader aggressively trying to put him out of business with patent litigation infringments and some of the UK trade spreading inaccuracies who are tied this company as he is a credible competitor and they cant compete with his innovation, its any wonder anything half decent gets done in this country.

I think its a good move for the Govt to lend to the very types of businesses who tend to employ the most people in this country and pay the most tax unlike the richest company tax dodgers.

I would think that the swimming pool market is well down at the moment, so probably not a good time to be looking for funding.

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When / if these businesses go bust, the government should get it's money back first.

You know this won't happen and there will be directors paying themselves a good amount of money whilst the business sinks below the waves. Never mind it's tax payers money just keep the cherade going until we retire in 5 years time.

I fear you could be right.....4 out of 5 small businesses fail in the first 3 years....what would stop a director using the borrowed money to pay themselves an income...fail then start over again? :unsure:

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The Sunday Times spread gave him the equivalent of £10m per year of enquiries in the first week. Not bad for a one man band but obviously dont know what the enquiry to sales conversion rate will be over the year and there will be a drop off in enquiries over time due to falling out of peoples thoughts but I know from experience I've had companies contact me from a fax mailshot that I had sent out 3yrs before hand so I would imagine there will be gradual drip feed of work coming in from those that want it but are planning for the future.

One such leisure centre with pool et al has a quarterly elec bill of over £250k, they dont care how long they have to be shut down for while the insulation goes in, and reports coming in from existing users is the energy savings are better than the theoretical calcs so people are heating things like professional diving pools for £3 a week! Unheard of levels of energy efficiency in that arena. :)

why would they care though, all these pools without this new system can just get some easycreds when they can't pay the bills anymore.

and the government will be more than happy to print it for them. ;)

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Some of you may know my brother has invented a swimming pool insulation system that if retro fitted to all existing pools and fitted to new pools worldwide will effectively wipe out the UK's CO2 footprint!

Becuase his business is classed as construction banks wont lend to him to expand his business despite this innovation, its a computer say no situ. :)

He's got patents, the building regs changed for this year and another change in 2013 and is saving sheds loads of money for his customers by redcucing their energy consumption so ticks a number of boxes but just cant get the funding he needs to expand.

Coupled with the US no1 leader aggressively trying to put him out of business with patent litigation infringments and some of the UK trade spreading inaccuracies who are tied this company as he is a credible competitor and they cant compete with his innovation, its any wonder anything half decent gets done in this country.

I think its a good move for the Govt to lend to the very types of businesses who tend to employ the most people in this country and pay the most tax unlike the richest company tax dodgers.

There is a whole world of funding out there. If no one forwards money, then there must be a good reason for it.

Why not try Dragon's Den? Or just keep on plowing the profits back into the business? A bit slower perhaps, but there is no reason it wont work if the business is good.

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I fear you could be right.....4 out of 5 small businesses fail in the first 3 years....what would stop a director using the borrowed money to pay themselves an income...fail then start over again? :unsure:

This goes to the heart of the problem with the government's proposal. The scheme will be ripped to death by fraudsters. A lot of the reason that banks wont lend is for very good reasons, but they cannot normally tell anyone that the real reason is that the borrower isnt trustworthy.

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When are politicians going to learn? NO AMOUNT of QE, funds, stimulus, freebies, bailouts, bail-ins, loans or small business pick-me-ups are going to make the SLIGHTEST difference to what is happening. The government, on our behalf, is pouring money down the WRONG funnel.

Bailing out or recaptalising banks results in the cash pouring in at the TOP of the funnel and it never reaches where it should - the bottom. Instead it is is filtered off and just carries on enriching the banks who do not deserve to be enriched. Similary, shoving wads of cash into "enterprise" schemes or token small business stimulation packages STILL won't alter anything.

The people who would stimulate "growth" (whatever that means) are you and me, the TAXPAYER. Right now the goverment, and the banks, are stealing your money in order to pay bucket loads of dosh into the coffers of the very people who LEAST deserve it and those who are LEAST able to recover the economy.

What is needed is a cessation to enormous stealth tax rises and the impoverishment of those who had nothing whatever to do with the meltdown. Instead tax payers cash is being used to prop up historically LOW mortgages of many who stupidly bought into the bubble and who couldn't pay their monthly outgoings without historically low interest rates, and who would be repossessed if their mortgages were at proper levels.

Meanwhile, those who cannot afford to buy are faced with still ludicrous prices, and they are not protected at all. It is those people who could re-charge the economy, except they have no cash left to spend owing to being fleeced left right and centre. In order to promote growth you have to stop taking away cash from ordinary people. At the moment total tax exceeds 50% as a proportion of wages for those who can LEAST afford it. Meanwhile the disposable income of those already favoured with high salaries and agreeable pensions and perks are taking very small hits compared with the former.

The well-off, the bankers and those with very decent salaries still have a very nice level of disposable income. In stark contrast, for example, the people who work at your average supermarket, and even those who are at the front line of banks whose policy makers and bosses NEVER have to meet their irate customers, are earning a pittance. Some supermarket check out employees are doing THREE jobs, and looking after children.

We are being treated like acquiescent children by the government, who have persuaded milions that it's THEIR fault if the economy goes down the drain. It's not. It is the continuing fantasy that we can quantitively ease our way out of a depression that is the infantile notion the entire media and compliant electorate are buying.

Edited by VacantPossession

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Plowing it back into the business is whats going on, but finding good staff is hard as well, yet to find any sales staff who earn their keep!.

Not interested in handing over the company to "investors". Loans no problem anything else not interested in becuase they want a slice of the company and becuase its yet to recognise its true potential investors expect a disproportionate slice of the cake at this stage.

What happens when the energy saving grants from the government you get for insulating swimming pools dry up?

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What happens when the energy saving grants from the government you get for insulating swimming pools dry up?

Well if the product is good, then it will pay for itself without government funding. I hope for the sake of the taxpayer this is right.

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As a tax payer, i'm not sure i like the idea of the treasury buying corporate bonds, from small firms that the Banks think are too risky to lend to.

Aw, come on Pichard TC! As a taxpayer you know you don't count at all, at all. You need to be a large construction company, supermarket or bank to have an opinion that counts. Or get organised with the other cats.

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Some of you may know my brother has invented a swimming pool insulation system that if retro fitted to all existing pools and fitted to new pools worldwide will effectively wipe out the UK's CO2 footprint!

Becuase his business is classed as construction banks wont lend to him to expand his business despite this innovation, its a computer say no situ. :)

He's got patents, the building regs changed for this year and another change in 2013 and is saving sheds loads of money for his customers by redcucing their energy consumption so ticks a number of boxes but just cant get the funding he needs to expand.

Coupled with the US no1 leader aggressively trying to put him out of business with patent litigation infringments and some of the UK trade spreading inaccuracies who are tied this company as he is a credible competitor and they cant compete with his innovation, its any wonder anything half decent gets done in this country.

I think its a good move for the Govt to lend to the very types of businesses who tend to employ the most people in this country and pay the most tax unlike the richest company tax dodgers.

Without going into specifics....how does this work then? How do you stop water from cooling down.

Just interested!

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http://www.guardian.co.uk/politics/2011/oct/03/george-osborne-credit-easing-plan

So, we the taxpayer get to lend real money to businesses turned down for loans by banks?

I thought the entire point of allowing banks to extend credit, rather than the government just issuing new money, was that banks would allocate the money efficiently?

It does beg the question as to why banks need to exist.

It's not real money. It's more of that easing stuff...Printyourownloan, backed by the Bank of England and paid for eventually by very angry taxpayers. Why anyone thinks there could be a workable mechanism for SME's to issue bonds to market is beyond me. It smacks of yet another derivative with no proper risk assessment kind of 'investment'. No doubt stupid pension funds will lap it all up as they see the stock market failing them and Treasuries paying measly sums or worse actually falling in principal value. A 'secondary market' will follow and lots of bankers will create massive waves of bonuses out of thin air..well taxpayers money.

Beginning to wonder if this Coalition has any idea what the economics of the world is about.

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  • 336 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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      • up 5%



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