Cherries picked out of Connaught's basket

Good news and maybe bad news on the jobs front with regard to the Connaught administration. Part of the business has been cherry picked by building firm Morgan Sindell. They have taken on the best contracts. Can't blame them for that. But those cherries deemed not fit for sale are in limbo. Around 1900 employees in the social housing maintenance business may be out of work. As for the sub-contractors, life is still lived on Rocky Road.

This may be a sign of things to come. Cutting public spending means cutting jobs. The Coalition is keen to see the private sector take up the new job creation. But many who work in the private sector are feeling demoralised and in fear of jobs. Companies are recruiting but not on the scale that is required. However, constant talk of cuts just makes us all draw in our horns like a snail in distress. When Margaret Thatcher was about to make cuts, the likes of Arthur Scargill made them sound like viscious knife attacks. Somehow Britain got out of the doldrums. But nobody really appreciated that it was mostly financed with easy money as opposed to hard worked for income.

New Labour pandered to the bankers who were devising schemes and plans to sell to customers eager to let their heads go to jelly. I was one who let my brain get temporarily fazed. Now we have as a nation collosal debt problems caused by computerised money being shown up to be worthless.

Robert Peston came on the BBC News last night to talk about it yet again. He mentioned Northern Rock and its woes. These he put down to loans going bad and inferred that some lending had been a might too risky. True enough. But he never mentioned that Northern Rock's cupboard was almost bare. When depositors queued up to take their money out they had no clue (most of them I would think) that the bank could never pay them all. Because their money was not in the bank. It had been used up and transmogrified into a notional set of numbers on a computer. No wonder the powers-that-be panicked. The cat was getting out of the bag and would be scratching around causing mayhem by morning.

The Coalition is right to try to stop the rot, but not by a one-sided approach. We need a proper debate on how the banking system finances business. Currently it is all based on debt with the debts paying interest. It is also a system where fees, commissions and bonuses are centre stage.

When a company goes bust the general economy can take that. But when whole industries are in turmoil it can't. I get a sense that Britain just doesn't have enough real money to go round so that everyone can survive. The cherry pickers may soon be scrapping around at the base of the tree that used to grow Britain's money supply.