It has become achingly obvious that the government has precious few levers to pull in its desperation to jump start the economy.
The supposedly independent Bank of England has reduced interest rates to an absurdly low level, yet it bears little relation at all to the real cost of borrowing money to invest in a business.
In nationalising the banks the government has priced its own debt at such high levels that it is unable to pass on the low rates.
In the days when two or three times profit seemed to be an acceptable level of leverage, many companies were keen to take the offer of capital injections to bolster their balance sheets. Yet they now find themselves on some kind of “at-risk” register. If that business is in retail, then business owners are stranded like a punter at a vandalised cashpoint machine with an “out of order” message flashing at them.
One of the levers that business minister Peter Mandelson has been able to pull has been the regional development agencies (RDAs). He sees a new industrial revolution, forged in the regional universities and among hard-grafting entrepreneurs, as the way out of this mess. A new regional venture fund is on its way in Yorkshire. The best means to coordinate this local support is through the agencies.
Despite what our steel city siren Steve McKevitt has to say on this issue, Yorkshire Forward is rightly lauded for having its heart and mind in the right place.
Blissfully, Business Link also appears to have got its act together to be an outward-looking organisation tuned in to what business wants and needs.
So when our reporting sleuth Julie Hayes met Conservative shadow minister Eric Pickles in the new year, it was no surprise that he resolutely refused to speak about the role of RDAs. The public sector has long been the dog to kick – with good reason – but word is that the Tories are rethinking their approach and policy towards the RDAs on the strength of the good work done in the north of England.
There is no doubt at all that this is going to be an incredibly tough year. That’s why we’re committed to giving you practical guidance, solid regional intelligence and a forum for debate on the issues that can guide us all through this mess.
Happy New Year.
Michael Taylor, acting editor
Also in: January 2009
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Without health you are nothing
A business health check in 2009 will pay dividends this year more than ever, says Peter Baber. And there are plenty of people to help you do it.
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Master of waves
Being located in Scarborough hasn’t dented Pindar Group’s progress – in fact the company has learned many lessons in business thanks to its base near the sea, as Peter Baber finds out from chairman Andrew Pindar.