A Dark Cloud Gathers

The news that personal insolvencies are up 28% is not a good sign that we are emerging from recession. While the rate of unemployment slowed last month, it still actually rose.

Many people talk about upturns and green shoots of recovery, but at the business coalface, some businesses are only now trimming their cloth after trying to grin and bear the recession. BA have just increased the number of layoffs planned and many of the High Street banks are culling serious numbers in staff despite making very high paper profits.

But perhaps the worst news is that as we exit the recession, hopefully in the next quarter, some of the Government initiatives are due to expire. At the consumer end, VAT is set to return to 17.5%, and there are rumours even of a hike. Meanwhile, for those businesses who have taken up the HMRC's offer to defer their corporation tax payments, pretty soon the calls will come to get those tax bills paid.

Far worse for businesses, much more than not making profits even, is the starvation of cash. It is, indeed, king - the fuel of any business. No bank will lend just to pay tax bills - it's money straight down a drain in their eyes and it is an act of desperation to ask for it. Many small businesses, in particular, will be fearing a call from the HMRC in the early new year. HMRC are notoriously rigorous about their follow up and not very forgiving. Now that the temporary arrangements are over, they will apply all pressure to get payments in. In fact, the tax coffers are so strained at the moment, that the Government is experiencing sharp shortfalls in revenue and this is a contributory factor.

Some suggest that as we come out of recession, there will be a new wave of company insolvencies as the demand comes to settle their tax bills. It may mean a re-invigoration of the rate of growth in unemployment - possibly around election time.

It needs an initiative right now.

Putting Profit To Good Use

I make no apology for harping on about bank bonus culture. Every single one of us has paid a dear price to subsidise the banks who are once again declaring big profits and we should scream at the top of our voices that these gamblers, without a hint of contrition, who seem to think the world owes them millions for the work they think they do, should not get paid such large sums until we have been paid back.

Here's a thought. It was announced today that personal insolvencies rose to over 33,000 in the last quarter only - the highest quarterly amount since records began and an alarming 9% up on last quarter and a positively frightening 27% on the same period last year. As insolvencies tend to lag the curve of the recession, it is thought that we are now only seeing the tip of the iceberg.

Meanwhile, Barclays Investment Bank's 23,000 employees could earn around £100,000 to £200,000 per person thanks to the inevitable market recovery. Try denying them that bonus and firstly they would scream blue murder and secondly their managers fear they will leave the company and so lose top talent.

This is the top talent who managed to clock up £584bn of toxic debt and still expect bonuses.

Just imagine if Barclays were to pay back some of the debt they have clocked up and imagine if we used that to help out the people who have sunk below the line in terms of actual worth thanks to the actions of a greedy few who believe we should kneel at their feet.

It really sticks in my throat that banks, their executives, employees and shareholders can even consider paying such obscene sums when some have had to sell everything and then bankrupt themselves in a bid to survive.

But that's modern society. Can't live with the banks, can't live without them. Pint of beer for anyone with a good suggestion on how to beat the bonuses out of the system and still make these people turn up for work, if indeed we need them at all.