The credit crunch continues

We are still experiencing a crunch in credit - when will it end?

The financial crisis, which began in 2007, is often described as the "credit crunch". The evidence, however, is that the crunch in credit only really began in 2009 and shows no sign of abating.

For many the financial crisis became real when queues of depositors were filmed outside Northern Rock on 14th September 2007. However, Bank of England credit data reveals that the credit crunch really began in the middle of 2009 and in a very dramatic fashion. It was then that many sectors of the British economy witnessed such a dramatic fall in credit that nearly three years on credit levels remain significantly below their peak.

Credit in many sectors fell off a cliff edge in the second quarter of 2009 after years of continual growth. The sectors in the table above all witnessed dramatic falls in credit in the middle of 2009, although real estate saw a more pronounced fall about a year later.

What is even more worrying is the fact that, in many sectors, credit levels have continued to fall.

The data in table 2 begins where that of table 1 finished and gives bimonthly credit figures from March 2011 to March 2012. Credit in these four key sectors has continued to fall. Of most concern are the falls in credit to manufacturing and financial intermediation firms. The manufacturing sector produces the majority of Britain’s goods exports and firms in this sector rely on credit to invest in capital. Furthermore, trade credit helps firms reach foreign markets. The fall in credit to firms involved in financial intermediation is both a symptom and a cause of the problem and is evidence of the weaknesses that continue to plague the British banking system.

The final table indicates the severity of the credit crunch. Interestingly the crunch that began in the middle of 2009 was of a similar magnitude to the contraction in credit since the end of 2010. The data suggests that, far from the crunch relaxing, it continues and with previous falls the problem is compounded.

The picture is not the same for all sectors; lending to individuals secured on the value of property or similar asset has returned to, and in fact risen beyond, pre-crisis levels. The hotels and restaurants sector did not witness a significant fall in credit during the crisis. Nevertheless credit constraints continue to affect many important sectors of the British economy and there is little indication that this situation will change any time soon. Given this, it is hard to argue that the worst is behind us.

What time is it? Time to make it easier to get credit. Photograph: Getty Images

Selling Circuits Short: Improving the prospects of the British electronics industry by Stephen L. Clarke and Georgia Plank was released yesterday by Civitas. It is available on PDF and Amazon Kindle

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No, Jeremy Corbyn did not refuse to condemn the IRA. Please stop saying he did

Guys, seriously.

Okay, I’ll bite. Someone’s gotta say it, so really might as well be me:

No, Jeremy Corbyn did not, this weekend, refuse to condemn the IRA. And no, his choice of words was not just “and all other forms of racism” all over again.

Can’t wait to read my mentions after this one.

Let’s take the two contentions there in order. The claim that Corbyn refused to condem the IRA relates to his appearance on Sky’s Sophy Ridge on Sunday programme yesterday. (For those who haven’t had the pleasure, it’s a weekly political programme, hosted by Sophy Ridge and broadcast on a Sunday. Don’t say I never teach you anything.)

Here’s how Sky’s website reported that interview:

 

The first paragraph of that story reads:

Labour leader Jeremy Corbyn has been criticised after he refused five times to directly condemn the IRA in an interview with Sky News.

The funny thing is, though, that the third paragraph of that story is this:

He said: “I condemn all the bombing by both the loyalists and the IRA.”

Apparently Jeremy Corbyn has been so widely criticised for refusing to condemn the IRA that people didn’t notice the bit where he specifically said that he condemned the IRA.

Hasn’t he done this before, though? Corbyn’s inability to say he that opposed anti-semitism without appending “and all other forms of racism” was widely – and, to my mind, rightly – criticised. These were weasel words, people argued: an attempt to deflect from a narrow subject where the hard left has often been in the wrong, to a broader one where it wasn’t.

Well, that pissed me off too: an inability to say simply “I oppose anti-semitism” made it look like he did not really think anti-semitism was that big a problem, an impression not relieved by, well, take your pick.

But no, to my mind, this....

“I condemn all the bombing by both the loyalists and the IRA.”

...is, despite its obvious structural similarities, not the same thing.

That’s because the “all other forms of racism thing” is an attempt to distract by bringing in something un-related. It implies that you can’t possibly be soft on anti-semitism if you were tough on Islamophobia or apartheid, and experience shows that simply isn’t true.

But loyalist bombing were not unrelated to IRA ones: they’re very related indeed. There really were atrocities committed on both sides of the Troubles, and while the fatalities were not numerically balanced, neither were they orders of magnitude apart.

As a result, specifically condemning both sides as Corbyn did seems like an entirely reasonable position to take. Far creepier, indeed, is to minimise one set of atrocities to score political points about something else entirely.

The point I’m making here isn’t really about Corbyn at all. Historically, his position on Northern Ireland has been pro-Republican, rather than pro-peace, and I’d be lying if I said I was entirely comfortable with that.

No, the point I’m making is about the media, and its bias against Labour. Whatever he may have said in the past, whatever may be written on his heart, yesterday morning Jeremy Corbyn condemned IRA bombings. This was the correct thing to do. His words were nonetheless reported as “Jeremy Corbyn refuses to condemn IRA”.

I mean, I don’t generally hold with blaming the mainstream media for politicians’ failures, but it’s a bit rum isn’t it?

Jonn Elledge edits the New Statesman's sister site CityMetric, and writes for the NS about subjects including politics, history and Daniel Hannan. You can find him on Twitter or Facebook.

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