Prime Minister's Questions (sort of)

Above: the portcullis badge is a symbol pf Parliament.

I’m really busy at the moment doing some pricing comparisons for a client. It’s a tedious project, but may mean the client can knock out at least one of their five competitors. Obviously pricing policy will become more and more important as the economy contracts.

Although I am working flat out I took all my papers up to the Board Room at lunchtime to watch Prime Minister’s Questions. Even so, I wasn’t able to pay much attention, as a deadline was looming (deadlines always “loom” – they never pace themselves out in an orderly and unthreatening fashion). Terry was away today, so no-one else was in the room.

I can’t really remember much about PMQs except David Cameron and Gordon Brown clashing over economic policy. Gordon Brown wants “fiscal expansion to stimulate growth” whereas David Cameron wants government spending controlled (the Labour benches apparently made scissor motions with their hands and yelled “cuts” – we didn’t see this but it was explained to us). Gordon Brown ignored two questions about why Sterling is falling against other currencies (the questions were no doubt provocative, but I would have liked to hear a proper explanation).

Talking to various “money” people I know, the recession will go on to 2013 as that is the time it will take for all the bad debts to work through the system. There is no point in tax cuts as most people will spend the extra on Chinese goods and the money will go straight out of the country. There will be no recovery in the economy until consumer confidence (the “feel good factor”) returns.

Consumer confidence is notoriously difficult to predict. It might be stimulated by a big boost of cash through tax cuts (but surely not funded through borrowing?). Probably the safest way to restore confidence is to encourage people to pay off their debts, for the government to pay off the national debt, and for house prices to stop falling (which is likely to be when they reach the accepted norm of three times average salary).

But I’m not an economist.