Paul Short considers the Conservative and Liberal Democrat Coalition

We may perhaps think of the Conservatives and the Lib Dems as unlikely bedfellows.

We might just reflect that one of the most famous Conservatives of all also served as a Liberal MP.

Winston Churchill (as he then was) had been elected to Parliament as the Conservative member for Oldham in 1900.  He subsequently found himself in disagreement with his party on two main issues, free Trade and also social reform (perhaps that strikes a chord today).  Accordingly he crossed the floor to the Liberals and then won Manchester North West, standing as a Liberal, in 1906.  He then served in the Liberal Government, holding several senior cabinet positions, including Home Secretary.  After the ups and downs of the First World War and its immediate aftermath, he lost his seat in 1922.  He returned to Parliament a couple of years later and then rejoined the Conservative party in 1925.

Let us hope that life is more straight forward for David Cameron and Nick Clegg.

Our “War on Debt” begins

It’s been a frustrating few days while we’ve sat and waited to hear the outcome of talks with the Liberal Democrats and Conservatives regarding forming our new Government. The truth is it’s not something that we are used to. British elections are an almighty dust up on the hustings with a winner once the dust settles the morning after.

This time it looked likely it would be hung due to the mass of seats that the Liberal Democrats might win but it was not to be and the Conservative party got closer to the line than many might have thought. As usual with politics there has been smoke and mirrors about secret meetings and potential deals and after another long day of wait David Cameron has emerged the leader.

The delay was frustrating many with suggestions that the Liberals were touting themselves around to such an extent that if we voted again come Thursday there would probably be a clear winner one way or the other. However, having been the bridesmaid for nearly a Century it seems that this Andy Warhol moment has been used to choose the correct bedfellow. Only time will tell if this is correct.

It’s too soon to tell quite what Cameron’s cabinet will look like but his maiden speech suggested a proper coalition between Conservatives and Liberal Democrats suggesting that important posts may pass to Liberal Democrat MP’s probably Nick Clegg and Vince Cable.

Last time we saw a coalition the Lib-Lab pact failed to prosper.  We have to hope that this has more success. A previous coalition under Winston Churchill comprised his War Cabinet and whilst our troops continue the fight against terror in Afghanistan this Cabinet may well set their domestic campaign as a War against Debt. By the weekend the Government Ledgers will most certainly be open to the two other Parties and the real truth about our financial standing open to scrutiny rather than supposition and rumour.

As we all realise things don’t appear to be good in our balance sheet and much pain may be required to put it back onto an even keel. A joint effort may therefore be more acceptable than one party acting and being criticised by its opponents. We have to hope so for whatever your political persuasion and however you voted no one would wish to see the situation in Greece being replicated upon our streets.

At the end of it all we have our youngest leader since 1812 and as in 1997 a Cabinet Room lacking in experience. For me the election has been interesting because of the interest of my Children who whilst still too young to vote have been interested in the whole process like it were a series of The Apprentice.

Whether we have an outright winner or a hung Parliament as usual with Great Britain protocol takes over with resignation words and trips to Buckingham Palace for both outgoing and incoming Prime Minister. Electoral reform may be necessary but please let’s not lose all of what we have for it sets us apart from the rest of the World and that’s what makes us special.

Uncle Audley looks at Small Business help suggestions

I got a call from Uncle Audley last night. “Do me a favour,” he asked, “look up the word defer for me would you?” Not wanting to upset my favourite relative I took the book from its shelf.  The Chambers Concise Dictionary 2004 edition priced at £17.99 from all good book shops. “Why that word?” I asked. “

 

“Because that is what David Cameron asked the Government to do, in his Observer article of October 19 2008, when considering VAT payments for SME’s,” came the reply.

 

“His actual quote was, “And today we are calling on the government to allow small and medium-sized enterprises to defer their VAT bills for up to six months. That means a typical small business with 50 employees, revenues of £5m and an annual net VAT bill of £350,000, doesn’t have to find £90,000 to pay the taxman when the bank has just taken away its overdraft.” What does he mean? Does the £90,000 disappear never to return or does it stack up to be paid later if the business can? I’m not altogether sure – perhaps the devil is in the detail.”

 

“Chambers Concise suggests that defer means “to put off something or leave it to a later time” or “to yield to their wishes” I told him.

 

“Typical we’ll have to wait to find out. The Daily Mail are trying to get in on the act suggesting their wonderful 8 point plan to help save our small businesses with their Charter which includes some good points but some ill thought out ones too. Wherever we look there is lots of suggestions but they all point to one solution; a return to where we were. Is that not why we are in difficulty?”

 

Good point I thought and as I opened my mouth to tell him so I was forced to listen once more.

 

“Surely the problem here is a lack of saving and a long period of spend spend, spend coming home to roost. In my day boy you had to wait for what you wanted. None of this slap the plastic down. Nowadays we get more than we need before we consider whether we need it in the first place. Thatcher privatised everything and had nothing to show for that money now Gordon has himself in the same place. Maybe the Australians are giving handouts to help but is this the answer? Surely those who take it seriously and self help should be rewarded not those who have no intention of doing so. Maybe I’m too old for all of this but in my day it never worked like this. It was called cutting your cloth accordingly. Nowadays there is not much cloth worn let alone Waide and Pollard from which to buy a vest or two!

 

Savings, my boy, are the answer. Without them we’ve got nothing but too many have been allowed to get themselves in a muddle and it is this problem that needs sorting out. Not popular with small business though as to save we cannot spend at all to build them up and that will mean the mother of all recessions. To avoid this careful management is needed but this means telling people what they have to hear not what you think they want to hear. Reassurement does not work when hard lessons need learning. That is why the Bank bail out is difficult to implement. It seems the Government’s plan includes lending in areas deemed folly and the reason for the problems, so how can this provide a solution? What we need is a return to sense and this means property price falling further to allow new borrowers into the market. That will mean negative equity. Unfortunate but there you have it.

 

We’ve also got to put right some of the nonsense we have created. The 10p shenanigans should all be reversed to reduce corporation tax on small business – but that is for the long term as payments dates are later. The 10p back in would put right last years wrongs and put money in pockets but let us not forget the amount of money and paper that has been wasted printing and sending out all those tax coding notices before the year, after the budget, after P11d’s and then again for the extra allowances. No one seems to bring up this level of waste – but it is there and very real.”

 

“Uncle, you sound depressed” I said, having got a word in at last, “is there anything more certain than a recession in your mind?”

 

“Only Spurs to get relegated” he added with a laugh and he was gone. Oh dear I thought, how do I break the news to Nick in the morning…..