Piss Off, George

George Osborne 0482am

“Well, this is how it works. I steal all your money, then I help you borrow some more.”


If you’re raising your eyebrows at that headline, I assure you it is a quotation from a well-known movie starring Dudley Moore and Julie Andrews no less.

Anyway, this time it refers to George Osborne and not George Webber.

Small businesses are finding it hard to get loans from banks, or at any rate to get loans at reasonable interest rates. That is possibly not unconnected with the £150 billion of extra borrowing that the government is grabbing out of the economy this year.

But no mind. George has an idea. “Credit easing,” he calls it.

The government will apparently underwrite “up to” £20 billion of loans to small businesses. Or alternatively, they will underwrite borrowings by the banks, allowing them to borrow more cheaply. The BBC report has these contradictory explanations in different paragraphs of its report.

But does it really matter? Who cares whether the government is meddling in manufacturing industry or financial services?

What counts is the subsidy, is to be seen to be “doing something” and above all, to increase the power of the civil servants who will no doubt be employed to administer the daft new scheme.

A Treasury Source described the scheme as a “game changer”, says the BBC. Indeed it is. It will provide well-paid jobs for hundreds of civil servants in public administration. It will remove the spectre of redundancy from hundreds of innocent paper-pushers.

The BBC paints a picture of a typical happy recipient of one of the new loans:

It would mean that a firm currently taking out a £5m loan at a typical interest rate of 5% would instead be able to borrow at 4%, saving £50,000 a year in interest payments.

Hmmm. £50,000. Might cover a proportion of the additional costs that this government have already imposed on that firm, I suppose.

Of course, if the government could balance its own budget, there would be £150 billion available for lending to businesses that is currently being snaffled by the State.

But what am I thinking? The government has hardly ever lived within its means in my lifetime. Why would those numpties start now, short of a Damascene Conversion that would make St Paul look like the model of consistency?

Meanwhile, the elephant in the room is being ignored. The fact that Mr Osborne’s government has so far delivered a real terms increase in public spending. The fact that the quangoes are rumbling on unhindered while private sector companies struggle. The fact that Mr Osborne and his friends prefer to raise taxes than to cut spending.

And the fact that the main reason that businesses cannot borrow the money they need, is that the government is borrowing so much itself, and indeed forcing the banks to lend to it in preference to business.

Mr Osborne, like the rest of the public sector, is part of the problem.

In short, go away Mr Osborne and all the rest of you politicians and bureaucrats, and let the rest of us get on with earning some money.

Or if you prefer, “Piss off, George”.

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