History lessons

Jason Ford
News editor

Today marks the anniversary of two events whose after-effects will continue to reverberate around the world for many years to come.

It is officially the third anniversary of ’start of credit crunch’: the moment when, in 2007, short-term credit markets froze after BNP Paribas suspended three investment funds worth €2bn, citing problems in the North American sub-prime mortgage sector.

The European Central Bank added €94.8bn of funds to money markets as interbank lending froze but in the months that followed banks in Europe and the US reported billions in losses which forced some – including Northern Rock and Lloyds – to seek state assistance.

Last week, The Engineer ran a report on how small businesses are still struggling to obtain credit despite encouraging financial results from some of the major banks.

Lloyds Banking Group, for example, recorded £1.6bn profit for the first half of the year and HSBC, which survived the financial crisis without government support, posted a £7bn gain.

In our report, Phil McCabe, a spokesman for Forum of Private Business, told The Engineer: ‘I think it particularly galling when you put the profit these banks are posting next to the kinds of sums of money our members are seeking.’

Those of you not favourably disposed toward the Square Mile may wish to skip this paragraph, given that The Sunday Telegraph ran a report yesterday that said financial sector bonuses paid in 2009/2010 stood at £10bn compared to £8bn in 2008/2009.

But it’s also the aniversary of an event that puts the economic woes of the past three years into some perspective. 65 years ago today the US dropped a second nuclear bomb on Japan. The ’Fat Man’ bomb was dropped over Nagasaki, three days after the bombing of Hiroshima. Those events resulted in the Japanese surrender at the end of World War II on August 15. The plutonium-based weapon killed around 74,000 and injured as many.

The nuclear deterrent was very much on The Engineer’s agenda last week when we reported on the spat developing between the Treasury and the Ministry of Defence about funding for the Trident programme.

Defence secretary Dr Liam Fox said the £20bn programme should be funded by the Treasury because continuous at-sea defence is a matter of national security. Chancellor George Osborne said funding for Trident should be covered entirely by Ministry of Defence’s budget allowances.

The debate about having a nuclear capability in a post Cold War world rumbles on and your thoughts on the subject are most welcome.

However, getting to the stage of having a deterrent – namely the build and test – has left many former service personnel seeking compensation from the government for injuries sustained during tests in the 1950s in Australia, Malden Island and near Christmas Island.

A report in today’s Metro says that over 1,000 nuclear test veterans are trying to secure £20m in compensation and are urging the government to provide the funds ‘before any more of them die’.

From nuclear weapons to renewable energy and news that the Local Government Association (LGA) has released estimates showing that council-owned wind turbines and solar panels on town halls, council homes, leisure centres and other council buildings across Britain could produce anything up to £100m a year.

LGA believes new rules allowing town halls to sell green energy could create a ’multi-million pound business helping protect frontline services and keep council tax low’.

Click here to read how the coalition government plans to reverse the 1976 Local Government Act which prevents councils from selling electricity.