Business grants

So Alistair Darling gave £4bn to small businesses that are in financial difficulty in his budget last week. Sounds good for small businesses, doesn't it? But wait.

1. Whose money is it that he is giving away? Some of it is small business's money, I think, and a lot of the rest comes from the average tax payer. So the Chancellor is taking taxes from the businesses that are doing well and giving it to those that are doing badly, so that in many cases, they can waste the money all over again.

Surely its the banks' job to monitor their customers to see where a loan will tide them over a bad patch, its not the Government's job. If the bank gets it wrong, the bank loses the money and the bank manager may get the sack. We need to drive the banks back into their proper role of earning their profits by paying a fair rate of interest to savers, and then lending it to worthwhile investments, not by taking the soft option of taking low interest handouts, called quantitative easing, from the government and chancing it on geared investments, asset gambles, and financial instruments.

Wouldn't it be better for businesses that are doing badly and who can't persuade their banks to lend them money, to go bust so that their assets can be re-distributed to people who know what they are doing? Won't the country's assets be better employed if we do that? Won't savers get a fair rate of interest for their money? Won't banks be supporting entrepreneurs who know what they are doing and themselves competing for worthwhile business?

2. What is the Chancellor doing giving money away that he hasn't got?

3. We tried to start a business making renewable power and wood pellets from poor quality wood, in the North of Scotland. But someone else had got a grant first and built their plant already, so we were not eligible for a grant. We could not compete with another company that had received a large grant, so our scheme has had to be shelved. Wouldn't it have been better competition if neither of us had got a grant, and wouldn't it have saved the tax payer a lot of money?

4. Suppose Jock has worked hard all his life building up his little business in say rustic furniture manufacture. Jock didn't take many holidays, he often went to work on Saturdays and Sundays to complete orders for Monday delivery. When Jock had the flu, he still turned in to make sure that his customers were happy. In the evenings he worked on designs for new furniture. He hoped to leave a thriving business to his son Hamish, who had started to work in the company. Under Lib Dem (and Labour and Tory) policy, his right hand man Jimmy, could leave him, set up in competition with him and get a grant from the government to get him started. Jock never got a grant in his life. How is Jock going to feel when his best customers start going to Jimmy who is driving around in a new Discovery? Jock will feel like murdering someone, and I don't blame him.

Governments should do well the things that they need to do, and keep out of things that they don't understand, like business. Let government concentrate on maintaining law and order in the land, the defence of the realm, the appropriate delegation of government to the closest practical point to the people, eliminating monopolies to ensure fair competition, relations with foreign powers including the maintenance of embassies abroad, the provision of a transport network, and ensuring that the most vulnerable are safeguarded.

You won't hear this message from those parties who employ varying degrees of socialism - The Conservatives, Lib Dem and Labour. They all think that they know what is best for us, despite all the recent evidence to the contrary.


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