Town comes to term with credit crisis

IPSWICH was today bracing itself for the effects of a government announcement to secure the country's banks with £50 billion of taxpayer's money.

Key political figures and businesses had mixed views over the move to provide extra help to the high street banks with some believing that the amount will not be enough to insure comfort and others dubbing it a “critical step.”

Chancellor Alistair Darling announced the part-nationalisation plan today which is designed to reassure savers and kickstart the markets again.

Liz Harsant, leader of Ipswich Borough Council, said: “I have got concerns about this. Every man and woman in the whole of country will have to pay £1,000 a year, which is terribly concerning. I just hope that this works.

“Businesses are struggling in Ipswich, especially estate agents and legal firms that specialise in conveyance. I worked in one of those firms when there was a recession last time and I know how dramatic it can be. It is a nightmare.

“We are relying on the markets. I will just be keeping my fingers crossed. If we go into a deep recession, I just don't know what will happen.”

Ipswich MP Chris Mole said: “It is a pretty significant step in trying to reassure the financial markets in order to minimise the impact of the problems there have been with banks lending and borrowing from each other. If this hadn't been done, we would very quickly face borrowing problems.

“This is a critical step. I'm hoping this is the news Ipswich businesses have been waiting to hear-that banks will have more liquidity so they can invest in new equipment and developments to take their businesses forward.”

Graeme Kalbraier, managing director of Call Connection said: “I think businesses in general are going to find it tough if they are not already. It applies to every sector.

“Fifty billion pounds sounds like a lot of money but it will be nothing like enough and the government will continue to prop up ailing banks-and so it should.

“It will not give businesses the confidence to invest-that will take a lot more money, time and stabilisation. The stock market's reaction to the government is a drop of seven per cent. That tells you the stock market does not think this is enough.”

Paul Clement, executive director of Ipswich Central, said: “My view of it is that it is not the rescue plan it is being unveiled as. It is a step in the right direction but a lot more needs to be done.

“The problem is about a lack of confidence in banks and consumers; one sum of money doesn't change that.

“Somehow the government needs to convince banks that it is safe to lend to one another. There needs to be a solution that encourages confidence across boarders.

“Businesses in Ipswich are worried because it is all so uncertain.”

Mike Sorhaindo, Tower Ramparts centre manager, said: “I think the retail market is still going to be a bit nervy. There will probably be still a certain amount of caution following the news. It may well give the average shopper some comfort in their savings.

“We do not expect to see lots of people flooding in today as a result. It has be a tough year for retail in general and will continue to be so. I do not think we will be seeing any upsurge in trading but it will give shoppers some comfort. It will give a bit of stability for the markets.”

How will this announcement effect your business? Write to Your Letters, Evening Star, 30 Lower Brook Street, Ipswich, IP4 1AN, or e-mail eveningstarletters@eveningstar.co.uk