The recession isn’t ending

The government would have us believe the recession is ending, but we don’t see much evidence of it. At this time of year, when many businesses should be shipping more goods than usual, trade and industrial packaging suppliers expect to enjoy their busiest quarter. As a result, the packaging industry is a good barometer of a large cross section of businesses in general. Our direct contacts within the packaging industry inform us that they, their suppliers and competitors are in decline, with many going out of business altogether.

Banks are still paying big bonuses but either not lending, or lending at inflated rates; 6.5% is common, when the base rate is 0.5% currently. SMEs (Small and Medium-sized Enterprises), including what’s left of Britain’s manufacturing and engineering industries are going to the wall due to poor cash flow and an inability to borrow.

So why won’t the present government bring pressure to bear on the banks currently in public ownership? If they were to give business a much needed helping hand, but fail to win next year’s general election, the incoming government might well take the credit. How much does this sort of reasoning feature in the actions of a weak, outgoing government? If it does happen, or ever has happened, it could lead to a highly undesirable form of ’scorched earth policy’. The problem is, how do we prevent such a thing?

Also see “Let the RBS directors resign“.

Is Great Britain plc heading for bankruptcy?

The government tells us we are coming out of recession, but our experience suggests that may not be true:

The packaging industry, a good barometer of trade in general, appears to be struggling. Our packaging industry insider informs us that companies are either going bankrupt, or reporting unseasonably low sales for what should be their busiest period. The main problems seem to be:

• Reduction in orders
• Slow payment for goods supplied
• Reduced profits due to squeezed margins
• Rising utility costs and business rates

It might be easier to weather the storm with the aid of short term financing, but the banks either won’t lend, or will only do so at highly inflated rates.

The government must exercise some control over the banks WE own and force them to lend at sensible rates.

Oil prices are low, but forecourt fuel prices are rising. This has a huge effect on business and our government must address the issue.