Guest blog by Charles Wilson FICM, Managing Director of Lovetts plc - 'Setting Clear Expectations'

Driving to work yesterday after the Easter holiday yesterday, I was listening to the Today programme on Radio 4. The meaning of the new Archbishop of Canterbury’s first Easter message was being debated. In his address, Justin Welby appealed to everyone to adopt realistic expectations for what institutions, or individuals, could achieve. In the end, all humans are fallible, he said. (I suspect even the new Pope might agree, who knows!)

Afterwards, commentators differed in their views. Was he sensibly advising us to manage our own expectations, including our expectations of him? Or was he abrogating, as one suggested, his own responsibility to give us a clear lead from the outset?

If you read the text of his sermon in full, it is pretty clear. He was urging us to be realistic in what we can all achieve, in these terms “Complexity and humanity are ignored, and we end up unreasonably disappointed with every institution, group and policy, from politicians to NHS, education to environment”.

In a time of economic uncertainty, and business difficulty, it is easy to think that others should, or even that we ourselves can, deliver a solution that is “perfect”. Whether you are a Prime Minister, a credit professional, or a business manager, in the end you always have to rely on others. You have to delegate a lot of things. You have to choose what NOT to do. You have to trust others, knowing they may fail.

Some business leaders never take holidays. I commend Philip King for doing so and hope he enjoyed his decorating over Easter. He is not abrogating his responsibilities to the Credit Industry, he’s not given up on us, or on Government, he’s just having a well-earned break!

In fact, it is only as we ‘let go’ of trying to achieve perfection, and subject our plans to human fallibility by sharing them with others, that our world enlarges through them.

As a lawyer, I could tell you all about the Jackson reforms of the legal profession, effective this week. Like the increase of the Small Claims’ limit to £10,000. But any search engine will give you more than enough to read on that.

Most important of all is that we set realistic expectations of what can be achieved by credit departments or third parties on their behalf. As lawyers recovering debt, we try our utmost, but keep realistic. If we don’t, we’re set to disappoint. Despite Government cutbacks, changes and reforms in the Court Service, we must nevertheless all keep trying to influence and effect change for the better. As Justin Welby said, “Setting people or institutions up to heights where they cannot but fail is mere cruelty”. I agree.

Extracts from Archbishop Justin’s sermon by kind permission of Lambeth Palace – see www.archbishopofcanterbury.org

Weekly blog by Philip King, CEO of the ICM - 'Confidence or availability'

The Government Funding for Lending programme has been launched this week. Under the scheme, the Bank of England will lend money at below-market rates to banks who, in return, will have to increase their lending to businesses and households; progress will be monitored and, if they fail to deliver, the interest rate will increase. There have been some interesting comments and opinions expressed including those who say it's just another in a long line of schemes such as the National Loan Guarantee Scheme that this one will, over time, replace to encourage the banks to lend more.

The initiative is creative and good but I have to say I'm with Jonathan Portes, Director of the National Institute of Economic and Social Research, who said on yesterday's Radio 4 Today Programme that making more money available at competitive interest rates is not going to fundamentally address the underlying lack of confidence in the economy. He observed that the scheme will allow businesses who want to borrow to do so more cheaply but it won't encourage the banks to lend more since they will still carry the credit risk. In other words, it will reduce the price of lending rather than increase the volume. What is needed is a boost in confidence to encourage businesses to invest and households to spend more.

Mark Hoban, Financial Secretary to the Treasury, countered that the availability of loans at a lower cost will encourage the bringing forward of projects and spending, and encourage investment that would otherwise not have happened, or at least not happened yet.

We'll see over the coming months but I don't sense any increase in confidence in the many businesses and business owners I speak to. I don't know the answer I'm afraid but it's the level of confidence we need to stimulate; when that happens, the demand problem will take care of itself.

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