Mark Field, Conservative MP for Cities of London and Westminster, provides our latest political column.
THE Government's Autumn Statement was, for three reasons, met with supreme indifference by the large corporations and banks of my constituency.
First, a recognition that any government in these acutely difficult times has virtually no room for manoeuvre.
Secondly, despite all the continued fire and brimstone of the exchanges between the Government and opposition, there is in fact vanishingly little to choose between their approaches to economic management.
Indeed all the talk of ‘austerity’ and ‘savage cuts’ provides the Coalition Government with the alibi to the markets that they have a deficit reduction plan that is being vigorously stuck to (not borne out by the economic facts) while the Labour Party can take comfort in playing their familiar ‘heartless Tories’ card in drumming up support from swing voters, without having any plausible alternative.
Finally there is now near universal acceptance that the coalition’s strategy is to keep interest rates at near zero (as they have been for the past forty-five months) and hope that something turns up. I suspect Chancellor George Osborne’s tactical handling of the UK economy owes rather more than he might willingly admit to the Mr Micawber principle. After all, waiting for something to turn up is not always the ill advised course of action.
The accretion of time often does alleviate, and sometimes even solves, what seems an intractably difficult situation.
The sobering truth, however, is that these ultra low interest rates mean that the UK economic patient remains in a government-induced coma and these historic low returns provide no incentive for prospective investors to take the plunge again in large-scale UK projects.