Tuesday, 15 December 2009

Will Dave Grasp the Treasury nettle?

The news today that the Automotive Assistance Programme (AAP) the £2.3bn government scheme set up in January to provide funding for UK carmakers, has yet to help a single firm will come as no surprise to anyone in the business community.

AAP, not to be confused with car scrappage, was designed to give a short term boost to manufacturers to retain skilled jobs whilst we wait for any upturn. I have no doubt that many will point the finger at the Government over this, blaming incompetent Ministers for putting too much red tape in the way of much needed support for manufacturers and the automotive supply chain. Cameron will, no doubt, make hay at PMQs.

However, I suspect a larger issue is at work here, which Dave himself will have to grasp, if and when he comes to power.

The Treasury loves to raise and hates to spend money. Its favourite word is ‘No’. Those with long enough memories will remember how a perfectly good idea by the Department of Social Security nearly 20 years ago, namely getting absentee fathers to at least pay a small contribution to the upkeep of their children, morphed into the Child Support Act and a massive Treasury-inspired exercise in cutting the social security bill. Of course it didn’t work.

Have Whitehall mandarins deliberately placed too many hurdles in the way of firms accessing the money? More likely is that, in their mania to ensure value and accountability, they have placed too many hurdles in the way of firms accessing the money.

Whatever, it amounts to pretty much the same thing. No money has been spent on saving precious skilled jobs which will be needed if and when we come out of this.

If as Dave is now saying (he’s flip-flopped so many times on this I’m losing track) he intends to continue, at least in the short term, efforts to boost the economy, he is going to have to get his plans past the Treasury mandarins who say “Yes Prime Minister” to your face but then do nothing behind your back.


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