Thursday, 27 October 2011

More Nonsense From The Tories

In these difficult times, the Government has been looking at ways to free up business and boost economic growth so commissioned businessman Adrian Beecroft to look into ways to achieve this.
His report to the Government has been leaked and his big idea is that if it were easier for businesses to fire employees, they would be more willing to hire so all rights to claim unfair dismissal should be removed, citing current employment protection laws and the inability for business to just be able to sack their staff hampering their ability to recover from the worst economic downturn since the 1930s.
His other conclusions suggest scrapping parental leave, scaling back flexitime working and reducing maternity pay to lift the burden on business.
Earlier this year Mr Beecroft recommended a delay in pensions reform, told No 10 that the NHS cuts should go even further and slash research support for medical charities.
So who was is Adrian Beecroft who wants to be able to sack anyone he doesn't like and wants the NHS slashed to the bone?
It should not be a surprise that he is a multi-millionaire businessman who has donated almost a million pounds to the Conservative Party over the last few years which immediately raises the question of cash for Government influence but if we dig a bit deeper we find something more interesting than a major donor being placed into a influential position by the Government.
Adrian Beecroft interests include, an online company offering payday loans at huge rates of interest. A recent probe by the consumer watchdog Which? condemned the 4,394 per cent annual interest rate it charged.
Obviously, a business that lends money to those finding themselves short would only benefit from a constant round of employee hiring and firing but the real controversy is with his call to cut back further on the NHS.
Although he is no longer employed by them, Mr Beecroft retains interest in a firm named Apax where he worked as the senior investments officer. The company owns or manages healthcare companies such as General Healthcare which stand to benefit from the increased use of the private sector inside the NHS.
The Government can justify any move, no matter how absurd, as necessary for the economic recovery but to get their friends who are blatantly only in position because they donated large amounts of money to the Government and are using their influential position to further their own business interests is yet another reminder of why the Conservative Party should be removed before they do real damage.


Nog said...

Lending someone $10.00 on Monday in exchange for $10.76 on the following Monday (7.6% weekly interest rate) is about a 4500% (annual) interest rate. On the other hand, lending someone $1,000 for $1,002 a week later would be a 10% annual interest rate. How long should someone spend looking into a potential borrower to make sure that the borrower is a real person, can repay the loan, etc?

Now, let's think about this for a second, how about with a $1000 one week loan. The UK minimum wage is about $9.75 dollars. Further, let's assume that there's no inflation and that the only cost to the lender was paying a single minimum wage employee to review the loan (meaning for instance, 100% of the loans are paid on time). Finally, let's assume for a moment that any interest rate above 10% is "usurous" (which would mean that the maximum you could charge for lending $1000 for a week would be $1002).

Even in this perfect scenario, a lender can't break even if their employee spends more than 12 minutes on the loan.

Any objection to 7.6% weekly interest rates (a.k.a. 4500% annual interest rates) isn't supported by the math.


Lucy said...

You will have to argue that one out with Which? nog, i'm more concerned with how donating large amounts of money can gain you influence with the Government and how the man pushing for NHS cuts is exactly the man who will benefit from them.