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You can’t help but feel that we are in the eye of the economic storm. After a tumultuous week on the markets a fortnight ago, which saw the Chancellor unveil a £400bn rescue bid for the banks, there has been an eerie silence as the world holds its breath.

Meanwhile, the political parties have been setting out their visions of how to solve the crisis. Labour, supported by Unite, advocates a Keynesian model of investment in infrastructure to boost the economy through public-sector spending; the Tories on the other hand, favour cutting taxes and even enabling small companies to delay payment of taxes in order to free up cash-flow.

Both arguments prompt the question: how will government be able to afford to deliver on its promises? Billions of pounds of public money are to be tied up in the banks, leaving little room for manoeuvre, let alone cutting taxes or boosting public spending.

However, more worryingly, it is also hard to see how printing companies will benefit from either strategy.
Printers have already vented their frustration at the difficulty of winning public sector contracts (see p10), while a delay in tax repayments will only increase the level of debt faced by companies that take up the government offer. Certainly, any efforts that can reign in the upcoming recession would be welcomed by the industry, but we are currently facing a far more immediate and urgent challenge.

Tax breaks and government spending will not directly or immediately alter banks’ lending policies and this must be the focus of government policy. Without liquidity in the debt markets and the availability of capital to printers, normality cannot return to the industry.

The recent bold statements of policies by both parties are beginning to look like a smoke screen to divert from the real issue facing UK business. This remains the credit crunch and not the recession. Until the credit crunch is resolved, we cannot begin to evaluate or tackle the problems posed by the recession. The government must take action now to provide finance to small businesses before it is too late.