Buy now, pay later
Well, the Stock Market likes what Alistair Darling had to say this afternoon - so far.
So might small and medium-sized businesses.
The reckoning is that there's £7bn of support coming their way, out of this £20bn fiscal package.
There's a new loan fund, loan guarantee extensions, delays in tax bills for those in cash flow trouble, and more flexibility in writing off losses against tax.
But note how little of this package is in new spending.
It's very heavily loaded towards tax cuts, and the change in the UK Government's spending plan is almost entirely to bring spending forward from 2010-11 to next year.
The Scottish Government had already planned something similar for housing.
That means very little to boost Holyrood spending plans - just a few million pounds might come north to help with home insulation.
That isn't much of an answer to Alex Salmond's claim that the Scottish Government should get nearly £1bn in grant for extra spending to help the economy.
On the contrary, there is a squeeze on the public sector, with more efficiency expected particularly when the bills have to be paid in future years.
The argument is that government has to share some of the pain.
And in the Scottish public sector, that could mean the current 2% per year efficiency requirement could be pushed up to 3%, when it is already causing squeals of pain from councils and health boards.
Hullo, I'm Douglas Fraser, and I'm business and economy editor at ³ÉÈË¿ìÊÖ Scotland. Welcome to my blog, where you can read my take on money matters, viewed from a Scottish perspective.
Comment number 1.
At 24th Nov 2008, kaybraes wrote:Don't think the rise in the stock market had anything to do with the non event in Westminster , it had more to do with the rise in the Dow Jones after the US government did a bail out on the world's biggest bank. The stock exchange sees Brown and Darling as a liability to their profits, and only their demise will instill any confidence in the British financial system. The election sweetener he gave out today will have no effect whatsoever on the coming recession apart from raising the amount of borrowed cash the taxpayer will have to find after the election to pay off the debt. Probably there will be another giveaway in April , just before the election, when the already mentioned tax rises are forgotten; which Brown hopes will save him from having to get a residence in Malawi .
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Comment number 2.
At 24th Nov 2008, DougtheDug wrote:#1 kaybrayes
The German DAX also rose today in parallel with the FTSE and I don't think the German's care what Alasdair Darling says.
The rise in the FTSE has been reported on the ³ÉÈË¿ìÊÖ news as a consequence of the PBR but it's a response to the Dow Jones and the US bail out as you point out - as is the rise in the DAX.
It's an example of lax and parochial economic reporting from the ³ÉÈË¿ìÊÖ.
An interesting consequence of Alistair Darling's increase in fuel duty to make up for the 2.5% decrease in VAT is to increase costs for companies which reclaim the VAT on fuel. VAT can be reclaimed but fuel duty can't so he's just bumped up the cost of fuel by 2.5% for those businesses.
I don't think Alistair will be getting a Christmas card from the hauliers.
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Comment number 3.
At 25th Nov 2008, oldnat wrote:kaybraes & DougtheDug
Over on Blether with Brian, brigadierjohn was complaining that "the media are being blamed".
He is, of course, right - but that's because our media are so UK-centric in a global problem.
Clearly Douglas Fraser hasn't improved since his Herald days.
Once upon a time, we were dependent on the UK media for our information. The journos don't seem to have realised that we now have the whole net to inform our thinking. We don't need their narrow perspective.
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Comment number 4.
At 25th Nov 2008, Euromac wrote:The ³ÉÈË¿ìÊÖ line seems to be that it was Darling that did; even to the extent that it was credited so on the 7:00 am news headlines on the Today programme.
This is despite their own expert, Justin Urquhart- Stewart saying, only 30 minutes earlier, that it was nothing to do with Westminster.
All hands to the pumps at the Beeb, methinks
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Comment number 5.
At 25th Nov 2008, Wee-Scamp wrote:Certainly wasn't the PBR... It was more influenced by the Obama's announcement on his action re the US economy..
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Comment number 6.
At 28th Dec 2008, dennisjunior1 wrote:That is not a good thing...that is how, we are in the current financial downturn right now.
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