Dr Eamonn Butler

UK Chancellor of the Exchequer George Osborne has been warned by the International Monetary Fund that he risks further damaging the economy unless he slows the pace of austerity and faces up to Britain's 'growth challenge.

Business Secretary Vince Cable wants to establish a state business bank to lend to small and medium-sized enterprises. This idea will do business no good, will mess up the finance market, and saddle taxpayers with yet more cost.

There are three reasons why businesses are not borrowing. First, having found themselves overstretched when the crisis hit, they are now doing the right thing and – unlike Mr Cable's government – reducing their debt. The existence of a state business bank is not going to change that.

The new Chief Whip of Britain's Conservative Party, and former Police Minister, Andrew Mitchell MP, had something of an altercation the other day with the police at the gates of Downing Street. The Chief Whip, of course, has an official home in Downing Street, so he probably knows the cops there pretty well. There he was on his bike, trying to leave, but the police wouldn't open the main gate for him.

Headline inflation in the UK has fallen to 2.5% (from a peak of 5.2% a year ago), so there is great rejoicing. The monetary hawks (such as Liam Halligan) have been proved wrong, we are told – all the Quantitative Easing didn't actually fuel inflation. Meanwhile, the Governor of the Bank of England, Mervyn King, is relieved that he doesn't have to keep writing to the Chancellor, as the law requires when the inflation target is widely missed.

The monetary authorities are at it again – trying to defy reality. In Europe, the ECB has thought up a new wheeze, called Outright Monetary Transactions, by which they can buy up the debts of bankrupt eurozone countries without (they hope) causing too much grumbling among the Germans who will ultimately pay for it. In the US, the Fed has just announced a new quantitative easing (QE3) plan to buy up mortgage debts in order to keep long-term interest rates down and make homeowners happy – well, as happy as they could be after a 20%-30% slide in the value of their properties.

More e-petitions will get written responses form the government, the Commons leader Andrew Lansley has announced. Any petition signed by more than 10,000 people, he says, will have a government response published alongside it. Well fine, for all the difference that is going to make.

Britain's business secretary Vince Cable wants an industrial policy. He is wrong.

Core to his proposals are a new state-sponsored business bank. "There are areas where the banking sector just isn't working for large chunks of the economy," he says. "Small business lending has actually contracted." So he wants a new bank, with as much money behind it as he can squeeze out of a hard-pressed Chancellor, George Osborne, to step into the breach.

Interesting proposal from a group called British Future, saying that we should build on the Olympic feelgood factor, and widen the Olympic legacy by having more minority/disabled sport on TV, a single national school sports day, and suchlike.

It's like that moment when the clocks go back, and suddenly the evenings are dark. After a glorious summer of sports and jubilees, suddenly the annual Trades Union Congress meeting is upon us and gloom spreads around.

Austerity isn't working seems to be the slogan this year. Apparently we need more government spending to boost the economy by hiring a lot more public-sector workers and raising their pay. They will then go out and build things, supply essential services, encourage business by buying stuff, and help the government by paying more taxes.

The Deputy Prime Minister Nick Clegg says we need a wealth tax. No we don’t. A wealth tax is immoral and counterproductive.

Right now, Mr Clegg and his government should be focusing on creating wealth, not shuffling it around. We need a growth agenda of lower taxes and less red tape in order to get businesses expanding and employing people. A wealth tax, like any other kind of tax, simply shifts potentially productive resources from the private sector to the government. And governments are not usually thought of as being ‘productive’ or  as ‘wealth creators’, are they?