If small and medium sized businesses are expected to expand, grow, and aid in economic recovery efforts by using more contract workers, they’ll need more money.
At least that’s what the Trade Union Congress says, which recently raised its voice in protest of the relatively low £300 million in funds the government is investing in the new business bank’s first tranche as announced by Vince Cable. TUC representative, Frances O’Grady, did acknowledge that the business bank is a step in the right direction in regards to beginning to turn around the flagging UK economy, but by no means should it be considered ‘a silver bullet,’ especially with investment amounts being what they are.
Ms O’Grady made the suggestion that the business bank should be permitted to raise an increased amount in investment funds by playing the capital markets, much as any other investment bank is permitted to do so. The British Cambers of Commerce echoed the TUC representative, remarking that there need to be other avenues explored for increasing the impact the business bank can have on improving economic conditions.
This is all well and good, especially since small and medium sized businesses rely heavily on using freelancers and contractors in order to complete projects in a timely and cost-effective manner, but it sounds to me like the TUC and the BCC want the business bank to play with fire. Does no one remember the massive bank failures of just a few years ago, not just here at home but across the globe, all because investment banks leveraged themselves so deeply that there was no way they could crawl out of he hole they had dug for themselves without the help of the taxpayer?
It’s still going on right now, you know. Just look at the absolute mess that’s happening in Cyprus at the moment – Cypriots were actually denied access to their bank accounts for over a week in order to stave off a bank run because of investment banking mis-management. You must be mad to consider relying on investment banking to build capital right now – if you ask me, both the British Chambers of Commerce and the Trade Union Congress need their heads examined, and quickly!
So the business bank is under-funded right now – what isn’t? There’s only so much money to go around right now, and while I want the economy to recover as quickly as possible – with the help of contractors working for SMEs – I’d rather economic recovery happen slowly and safely instead of quickly and recklessly, don’t you?
