Wokingham Times

The latest figures show that the recession is biting badly. Unemployment has surged in recent months. There are all too many young people out of work. It is especially difficult for school and College leavers to find a first paid job.

In Wokingham we are helped by the get up and go attitude of so many people, and by the high level of skills and good motivation. Our unemployment as a result does not reach the alarming levels of some other places in the UK. However, we should all be worried by the rise, and seek to do what we can to make it easier for people to find employment.

I look forward to progress with the plans for Wokingham Town Centre redevelopment, and have been briefed recently by Councillors on where they have got to with the project. They need to create a more vibrant shopping and service centre in Wokingham. It requires three things. It does require some property redevelopment, to provide extra and more modern space. It will require successful marketing of the town once we have the outlines of the new space to fill. It will require improvements to traffic flow and car parking. Wokingham as a centre needs to attract the car trade. People will want to come to a revitalised centre to shop, to eat or to drink a cup of coffee and meet friends, but they will expect to be able to drive in and park easily and close to the centre.

In the meantime we still need changes to national policy to give the economy more chance of a decent recovery. The public sector has to do more for less, to place less of a strain on the public finances. The current levels of public borrowing are unsustainable. We have to pay interest on all of that debt and then in due course we will be expected to repay it. The banking regulators have to get better at their jobs. They were too lax 2003-7, and have been too tough ever since. There will only be more money for business to borrow or for mortgages for first time buyers, when the regulators accept that the banks have enough capital and can take a bit more risk again.

At the moment we see a bizarre money go round. The Bank of England prints money which goes into the banks, which they in turn are required by the regulatory demands to lend back to the government. It’s a way of getting the deficit financed for a bit, but it’s not leading to more lending to individuals and companies by the commercial banks. They are in effect being stopped from lending more by the new tighter rules.

I have talked to local small businesses and to local bankers. The situation is still difficult for some businesses. Bankers are all too keen to base their lending on the security of someone’s house, rather than on the prospects for the business. This model means retrenchment in lending during periods of falling house prices, often the times when business needs most help with its working capital.

We should have seen the worst by now. The second half of the year should look better compared to the collapse in output we saw in recent quarters. The problem is that the longer term recovery will be held back by the need of many to cut their debt, and by the still weak position of the banks.

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  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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