It is tempting to feel sorry for the banks. The government wants them to lend more to small businesses. The banks reply that too few businesses who want a loan meet their requirements to ensure that they can and will meet the repayments.
But why are businesses so unable to persuade banks that they can and will repay? There too many, and disputed, answers to this question. But one could point to reduced demand for consumption; which in turn relates to the earlier credit crunch caused by the same banks.
Finally the banks may be being too cautious in ther lending policies. These policies are normally confidential business secrets.So we cannot know if this is true. Perhaps there is a fear that once one bank. Lehmans Brothers, was allowed to fail, other banks may suffer the same fate. Thus banks become risk averse; just when the opposite is required!
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Call Centres or Dark Satanic Mills?
Apart from British consumers getting very frustrated with long queuing times, there are other important issues here.
One issue is employment in call centres in India and Africa that would not have existed before the need to export the cost of employment in Britain to much lower paid economies. Obviously this also created job losses in Britain. But the increase in jobs in India and elsewhere was much greater. Further, a large part of this increase was in feminised labour. This was important as it helped female university graduates get employment in what was considered a safe environment.
The problem now for these workers is get unionised, and get higher wages. This will take some years. Eventually though the cost advantage to British employers will decrease. There is already some few examples of companies boasting that you will talk to someone in Britain. The consequence of this for Indian workers is too far in the future to guess. But if India does catch up with the British economy there will be more, and different, employment in India.
Perhaps the fundamental issue here is one skill formation in Further, and Higher, education. Put crudely, skills above the level of reading management scripts and in the correct management order to callers, must become available in Britain to larger numbers of post 16 year old students. To match this employers will have to see the need for higher skills, with new products and services coming from scientific and technological discoveries; particularly in the biological sciences.
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