Tying them down young

What is it about the governments attitude in this country to just handing over our cash to anyone who just asks for it? Well anyone in certain target groups anyway, if the likes of you or I asked for money we’d probably not get very far unlike ‘Stabby McChav’ and his brood who know how to play the system far far better than those charged with running it.

What we have is another Cameron ‘great idea’ where our cash is to be handed over to young people in the form of ‘startup loans’

BBC.

An £82m loan scheme for young people wanting to create a business is being launched by PM David Cameron.
People aged between 18 and 24 can apply for funds, expected to typically be about £2,500, from StartUp Loans.
Mr Cameron said he hopes the initiative could lead to 30,000 more start-ups and give a boost to economic growth.
The loans must be repaid within five years, and interest will be charged at the level of the Retail Prices Index plus 3%.
Mr Cameron said he wanted young people to have the confidence and support to turn “that spark of an idea into the next global brand”.
It comes as an enterprise review says the UK would have 900,000 more businesses if it had the same rate of entrepreneurship as the US.
The review, by former Conservative minister Lord Young of Graffham, said that “many don’t realise the opportunities that enterprise offers”.

Do I have a problem with government wanting to encourage new businesses? No, what I do have a problem with is the government using taxpayers cash as for loans, that’s really the job of banks who probably have a sounder grasp of risk than the government or even members of the ‘Dragons den’ who are being asked to run it. Statistically seven out of ten businesses survive at least two years and 51 percent survive at least five years and those often than not run by adults with a sound grasp of the risks involved financed by banks. So you’ll forgive me my belief that the chances of getting value for money out of the scheme are pretty low. Worse, like the student loans many of the candidates will be saddled with already this scheme will add to their misery, even if they can make a success of it, they’ll still be struggling with debt anyway and the government are not helping.

What the government should be doing is creating an environment where it’s easy to start up a business with low taxation and few regulations (red tape) Of course we’d have to leave the EU to do that, so it’s a non starter.

So what do they do? They’re going to offer young people taxpayer cash to set up businesses in a recession, young people who are possibly already up to their ears in debt anyway.

For the life of me I cannot see this working, I hope I’m wrong, but I’m rarely wrong on anything the government spends our money on…

Sadly.

10 comments for “Tying them down young

  1. May 28, 2012 at 7:23 am

    “What the government should be doing is creating an environment where it’s easy to start up a business with low taxation and few regulations (red tape)”

    Already done. UK regularly scores in world top five for easiest places to start a business, e.g. the World Bank’s survey among many others.

    • May 28, 2012 at 4:12 pm

      Just because it’s easier, doesn’t make it easy.

    • Lord T
      May 28, 2012 at 6:13 pm

      In the top 5 for easiest is not the same thing as low tax, which isn’t involved in a startup anyway and few regulations, which kick in mainly after the company is started and interfer with everything after the startup.

  2. Greg Tingey
    May 28, 2012 at 8:15 am

    The amount loaned, according to interview on “Today” erm, today was THE SAME AMOUNT The Prince’s trust makes available.
    And, it is for younger people, whom the Greedy, stupid banks won’t lend to.
    Now, do you want the economy to revive, or do you want to just whinge and moan?
    If the latter, please moan about the amount of money being handed over to the aforementioned banks?

    • May 28, 2012 at 4:17 pm

      Ever heard of grants? Say rather than loans?
      The economy wont revive due to this measure, the idiot government whom you praise for ‘lending’ young people taxpayers money would do far better to cut the cost of the state to the taxpayer so allowing more investment and an enterprise culture. The young have far too many debts laden upon them owing to the ridiculous requirement of the state to try and get 50% of them into universities already with debased exam results.
      This measure will simply not work in enough cases to justify the expense.

  3. Single Acts of Tyranny
    May 28, 2012 at 9:40 am

    Interesting that the interest rate is wholly divorced from base rates and is instead RPI plus 3%.

    A tacit admission methinks.

  4. Single Acts of Tyranny
    May 28, 2012 at 9:40 am

    Interesting that the interest rate is wholly divorced from base rates and is instead RPI plus 3%.

    A tacit admission methinks.

  5. Tatty
    May 28, 2012 at 1:13 pm

    There are plenty of 18-24 year olds round ‘ere involved in some sort of business or another but I don’t think a measly 2 and a half grand that they have to pay back is going to tempt them into doing something legit instead 😉

  6. Humph
    May 28, 2012 at 5:18 pm

    Totally agree with QM. You can’t ‘generate’ entrepreneurship just by bunging a fairly paltry amount of wedge at people who have very little or no experience of anything outside of a PS3 or Xbox.

    I have worked for a few entrepreneurs in my time, James Dyson included, and these are not people who were handed ANYTHING on a plate. In fact, it is precisely because they had to struggle so much that they were so successful.

    The principle is great but the execution is total pants.

    This is just yet more interference from a supposedly free market supporting political party which is doomed not only to failure – we’ve just started the second phase of (potentially) the worst ever recessionary period the world has known for fuck’s sake – but it is also just pissing your and my money up the wall. Yet again.

    It may be a relatively small sum but you might as well just use it for the Westminster celebrations on 5th November. Or how about giving it to someone who has any clue about how to start and run successful businesses and let them manage the whole thing?

    They clearly are deranged and insane. Come back in 3 years and show me one of these ‘young people’ who has set up and still runs the next great look-at-me bullshit internet pastime, and I’ll eat some very humble pie. But I’ll also show you 100 people who have started a worthwhile business which employs normal non-geeks, started by a bank or family loan with the entrepreneur in question living on roadkill for the first 2 years.

    I’m seriously finding it hard to accept that the UK is the 4th best place to run a business as well. Better than the US? Give me a break. If it was that easy then why haven’t people already done it and why does the Cameroid have to chuck £82m at some spotty youths in some blind hope that this will magically create 30,000 new businesses??

    This follows the Portas high street nonsense and is essentially exactly the same – gimmicky, doomed from the start and a total waste of the money that I’m working 60 hours a week to give to these imbeciles.

  7. May 28, 2012 at 8:02 pm

    So you’ll forgive me my belief that the chances of getting value for money out of the scheme are pretty low.

    Govt touch – govt destroy. Never fails.

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