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What does a move away from a laissez faire economy mean?
Image © Vince Cable Anna Gowthorpe - PA Wire
Business secretary Vince Cable will today call for an end to the government's "laissez faire" attitude towards industry.
Simply put, he feels the government is too hands off and needs to get actively involved in boosting business, rather than leaving it solely up to the private sector.
To be clear, he is not proposing meddling in every industry, but rather to offer help to areas that are in need of assistance. Here's what he will say in a speech later on today at Imperial College, in which he'll outline his long term business strategy:
"We do feel that, although it's not the job of the government to direct industries, it's got to be private sector led.
"But there is a role for government in supporting long term investment in research, in using procurement in a more strategic way, in supporting skills. Government has a role.
"Pure laissez faire is not the right way of doing things, very few countries would dream of approaching their industry in that way."
A state-backed bank to fuel growth
A key pillar of Cable's plan for increased involvement will be a state-backed 'business bank'.
As you may have noticed from various headlines in recent years, banking is in something of a parlous state and banks simply aren't lending enough to businesses.
Cable plans to use taxpayer funds to help make up this lending shortfall - but don't expect to see a government-branded bank cropping up on your high street. Rather, the funding will be made available through smaller, newcomer banks and similar institutions.
Cable will say: "In the UK, such a bank could operate through alternative providers such as the new challenger banks like Handelsbanken, The Co-Op and Aldermore and non-bank lenders boosting their lending capacity as well as corralling existing provision such as co-investment and guarantees to support business expansion."
Many years off
It's an interesting idea, but it's worth stressing that it could take years to get any such 'bank' in place - indeed, Cable has admitted details of how it will work are still being discussed.
So it's certainly not going to be of use to companies desperately in need of funding.
In summary, Cable believes the private sector is falling short in various aspects and it's up to the government to step in and do a better job.
What do you think of the idea? Should the government get more involved- using your taxes in the process? Share your thoughts in the comments section below.
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Of COURSE the Government should help British Industry. Industry provides: income for the nation, jobs, and national pride. Not having Industry means: additional spending for the nation, unemployment, and social unrest.
Retail and Banking (the so called "Service Sector") can never replace Agriculture, Mining and/or Industry and never could, it was always a crazy dream of a small bunch of insane Capitalistopians. Mind you the crazed Communists on the other side who seemed to think everybody was entitled to 50 fag breaks an hour were (are?) equally deluded and harmful.
We don't have enough good farmland to be an agricultural nation any more, or enough raw materials to concentrate on mining - so industry is the only option. We don't have a cheap labour force either (despite an apparent secret agenda by some to create one, it'd never work due to the cost of living in the UK), so we really do need to concentrate on the ONLY real option we've got - high tech manufacturing.
It's not exactly Rocket Science... sorry, actually, yes it is, shame we lost ANY capability for THAT decades ago along with all the scientists and engineers who got sick of working for minimum wage and fighting for dead end jobs, and either emigrated, or switched to banking and retail so they could feed their families (myself included).
Cable is a total waste of space, ideas that are second hand at best and far too late. Should have looked at how Japan approaches business - long term, not the approach favoured by the US - short term month end approach which has got UK companies into the state they are in now.
Far too pally with Labour and the unions who seem to think that it is fine to cripple industry and bleed the country dry, look at how the country was after each Labour government - bankrupt and on its knees, they never change.
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