Road Privatisation - The Road To Hell

David Cameron has, quite rightly, observed that Britain's roads are in a mess.

Hi solution?

Privatisation of motorways and A roads, whereby companies would lease roads and receive a portion of the annual vehicle licence fee to maintain and upgrade the network. Firms would be allowed to charge tolls and, theoretically, use the revenues received to build more roads.

An "interesting" idea

However, given the shambles of the privatised rail network, airports, and water companies, I am somewhat "baffled" at Cameron's belief that this will actually work.

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The Greek Tragedy - An Inspector Calls

The ongoing Greek tragedy continues apace, with "debt inspectors" from the EU and IMF visiting Athens to take a close and hard nosed look at the finances and reform measures of the financially embattled country.

Their visit, by coincidence or design, comes during a general strike which has paralysed Greece's roads, trains and airports.

The Greeks, despite their public pronouncements, are looking for a renegotiation of the bailout terms and probably an extra lump of funding. Their trump card will be that, if they do not receive some extra help, they will leave the Euro.

Therefore the EU and IMF, despite their pronouncements that any extra help (if offered) would come with extra conditions, will be forced to stare into the abyss of a collapse in the Euro experiment.

The questions is, just as in any game of poker, who will blink first?

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A Spoonful of Sugar

The appointment of Sir Alan (soon to be Lord) Sugar as the government's "business champion" has received much media attention.

Sugar plans to lead a roadshow of bankers around the country, in an effort to get them lending to small and medium-sized enterprises.

All very well, but given that the government which actually owns some of the banks has not managed to persuade them to increase lending, why should a road show (televised perhaps?) make any difference?

This is more of a publicity stunt by our ever more desperate Prime Minister, rather than a serious business initiative.

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Rearranging The Deckchairs on The Titanic

Alistair Darling delivered his pre budget report yesterday, which in theory was designed to ease the pain of the recession.

However, at best it can only be described as tinkering with palliatives in the short term with painful costs in the medium/long term.

A cut in VAT from 17.5% to 15% will have little effect on demand, as stores etc are already offering 20% discounts; indeed it is considered likely to cause more administrative hassle than it is worth. Darling needed to cut VAT by more than this, were it to have any significant effect; regrettably the EU has placed a lower limit on VAT of 15%.

Darling made a number of predictions about growth, or rather "shrinkage", he estimated that it would be at worst - 1.25% next year and forecast that the economy would recover in 2010, with growth of 1.5% to 2.0%.

Given the Treasury's wildly inaccurate growth forecasts in the past, quite why anyone would believe these now is beyond me.

Darling offered a number of fiscal stimuli, mainly related to bringing forward government spending on roads etc and putting off planned tax rises until later.

None of these will "stimulate" the economy much, and given the fact that everyone has had due notice that taxes will rise (eg national insurance) they will not loosen their purse strings.

All in all these palliatives will have little real positive effect, and most likely will be more trouble than they are worth as Darling has added more complexity to an already complex tax system.

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