Peter Hoskin

It’s the fundamentals, stupid

It's the fundamentals, stupid
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Nestled among all the coverage of Brown's meeting with Obama, and of Harman's denunciation of Fred Goodwin, is this story in the FT:

"The government’s flagship £10bn business lending guarantee scheme, due to come into force on Monday, is weeks behind schedule.

The delay will fuel business and union concerns about the pace of government measures to combat the recession.

The £10bn scheme was the centrepiece of a package of measures, branded “real help for business”, unveiled by business secretary Lord Mandelson on January 14. The scheme is designed to support up to £20bn of existing short-term bank lending to medium-sized companies, freeing up capital for new corporate loans.

“The first £1bn tranche of the scheme should be operational by 1 March, supporting around £2bn of loans,” the department for business said in January. But the department has now told the FT it is unable to give a date for when this first tranche is likely to come into effect." As Brown travels to America, it's a reminder of how he has to fix the fundmentals if he's to have any chance of saving his premiership.  Brown's autumn bounce came on the back of the same kind of "save the world" rhetoric that he's using now, but the shine soon wore off as people realised that Government policy wasn't doing much, if anything, to improve the health of the economy.  The longer this situation pertains - the longer the "action" stays on the shelf - the less likely that photo-ops with Obama will trigger anything more than another short-lived improvement in Brown's position.