Sunday, 11 March 2012

Divergence, can we live ...

... with it, particularly when our neighbours are getting better results for the same tax dollars !

Today in the Sunday Times reporter James Charles writes of a £1 billion boost for housebuilding that seeps across Offa's Dyke ...
DAVID CAMERON is to use £ 1 billion of taxpayers’ money to guarantee thousands of risky mortgages in an effort to kick- start a housing market recovery and boost the construction of new homes. Under a government scheme to be launched tomorrow, banks will be encouraged to offer mortgages to borrowers with only a 5% deposit, provided they use the money to buy new-build flats and houses worth up to £500,000.
The housing minister, Grant Shapps, has said that up to 100,000 first-time buyers and home movers will be helped by the Newbuy scheme over the next three years.
However, loans on new homes are notoriously risky, and banks hate lending more than 75% of the value — so the government has had to underwrite the risk to persuade them to take part.  It means up to £1 billion of taxpayers’ money will be used to protect banks against losses if buyers default on their loans.  The scheme is a calculated bet that increasing demand for homes will provide a quick economic boost.
This is Westminster working for Wales.

Then we have Osborne bringing down corporation tax to 20%
GEORGE OSBORNE is to signal more cuts in corporation tax in the budget, setting out a plan to reduce it to 20%, significantly lower than other large western economies. Treasury sources say the chancellor is determined to give priority to business in his speech on March 21, despite political pressure to use it to announce populist tax changes

Osborne has already cut corporation tax. It was 28% when he took power, is now 25%, and will shrink to 23% over this parliament. He is expected to set a new target of 20% for later years.  America has a basic rate of 35%, and France 33.3%. In Germany it is 15% but additional social taxes mean an effective rate of more than 30%. Ireland, which lures multinationals with low taxes, takes 12.5%.
Other business-friendly measures from Osborne will include details of infrastructure and credit-easing plans outlined in the autumn statement. Treasury officials have been working on the credit-easing plan — a government guarantee that will both make available and cut the cost of loans to small and medium-sized firms — and have reached agreements with most of the banks. The scheme is said to be ready to proceed from budget day.
This is Westminster working for Wales.

Now what about business confidence ?
GKN is in advanced talks for an ambitious £800m deal to buy Sweden’s biggest aerospace company.  The FTSE 100 engineering group is set to swoop on Volvo’s aircraft business, which makes engines and components for the world’s largest aerospace and defence manufacturers.  If GKN clinches the deal, it would represent one of the biggest acquisitions by a British manufacturing company since the banking crisis.
.... The move to snap up the Volvo division is a sign of the confidence running through Britain’s manufacturing sector. It could also mark the start of a deal spree in the industrial sector, likely to be led by American giants such as GE, Dover and Honeywell, that have built up huge war chests during the economic slowdown.  GKN employs 40,000 people in more than 30 countries. It is a supplier of aircraft components to both Airbus and Boeing and makes parts for most of the big carmakers.  The company raced into pole position for the Volvo business after MTU Aero Engines, Germany’s leading engine maker, dropped out of the auction. Other bidders included the buyout groups Carlyle and Nordic Capital.
Volvo put its aero engine business up f or sale in November. The division makes the RM12 engine for Saab’s Gripen fighter jets, used by the Swedish military, as well as supplying engine components to the three main jet engine manufacturers — Rolls-royce, GE and Pratt & Whitney.  GKN’S aerospace division is its biggest after Automotive, the car parts unit. It recorded sales of £1.5 billion in 2011.  The group l ast month reported a 15% increase in fullyear pre-tax profits to £417m, on sales up 13% to £6.1 billion. On Friday GKN’S shares closed at 212.5p, valuing the company at £3.3 billion.
And the Welsh Assembly First Minister, he should be remembering that GKN was spawned in 1759 when the Dowlais ironworks opened, he should be asking the question "... how many new jobs will GKN bring to Wales", it would be high value employment ............, the problem is we haven't been growing skills, instead we wasted a decade or more building an impoverished people (nation building) rather than fitting them for the future !

For how much longer can we continue to place our trust in those without vision ...........

More good news from Westminster ..........
A GROUP of City financiers has announced plans for a chain of more than 2,000 schools, 10% of the state system, with profits shared among staff in the style of the John Lewis retail chain.  Clarendon Academies, which would be the largest school group in the country, has been given approval by the education department to work with schools and is in talks with three of them.
The schools would be expected to generate a surplus, with half going to teachers in the form of benefits such as additional pension contributions, and help with housing costs. The rest would go to a central charity to fund building projects at the schools. Investors, who include unnamed wealthy individuals, would receive a fixed return on money lent to the venture.Clarendon plans to combine the traditional academic curriculum of independent schools with the centralised administration of former local education authorities (LEA), with efficiencies generating a surplus from government funding. The best state sector anti-truancy policies could, for example, be combined with a private-school approach to sport.
Clarendon has been set up by Nigel Brassard, an investment banker, and Edwin Richards, a private equity investor, and its educational programme devised by Martin Stephen, former high master of St Paul’s, the £18,825-a-year boys’ school in London, and Philip Limbert, executive head of Invicta, a girls’ grammar school in Maidstone, Kent, and Valley Park, a nearby comprehensive.Stephen said: “We are trying to broker a compromise between the ethic of the independent schools, which is very traditional, and the clout of the old LEA.”  Running state schools for profit is controversial and opposed by the Liberal Democrats. A contract won by the Swedish company IES to run a free school in Suffolk is one of the few examples.
... unfortunately the schools will not be crossing the Dyke, apparently there is a red and green line drawn in the political sands of Wales.

... and more good news for tenants of Social Housing ...
A massive £75,000 discount is proposed ............. another red and green line in the sand, England only I'm afraid.

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