Where we are
There’s daggers in men’s smiles, the near in blood
So, next week’s Comprehensive (not) Spending (anything) Review. Is it going to be as bad as we think it will be?
Anthony Hilton at last month’s BMF Members Day said he thought, on balance, the answer will be no. That’s because a) the government wants to fill us all with dread and Private Fraser-like doom and gloom before we see the actual results so that we then go ‘oh that wasn’t as bad as we all thought it would be’ and b) the government will bottle it. Apparently governments always do.
Travis Perkins’ CEO Geoff Cooper says he thinks it might actually prove a bit of boost to retail markets. He’s probably got a point. He told the Telegraph that it would allow people to ‘come to terms’ with the cuts, that basically there has been so much uncertainty surrounding what is or is not going to be cut that people have put off spending. Once we know, he says, everyone can get on and make their minds up whether or not to buy that big ticket item.
I suppose the argument is that once we know exactly how little money everyone will have, then we can get on and make purchasing decisions.
One thing we do know, though, is that VAT is going up to 20% on January 1. So, it stands to reason that we might see a bit of a spending surge in the run-up to that. Anyone who decides they simply cannot do without a new bathroom, shower, kitchen, is likely to try and get it bought before the hike. Possibly. I know I’m not going anywhere near the post-Christmas High Street, that’s for sure.
Hilton may be right and the rhetoric will prove to be worse than the reality. Although not if the announce-freeze-then-remove technique of the Child Benefit cut is anything to go buy.
We still have the black hole in our finances though and that still needs to be filled. It would be nice to think that it might be filled by a fair distribution of the cuts, but we all know that it’s the middle that gets squeezed the worst. The thing is, the damage won’t be over and done with on Wednesday. Whatever is cut will take a fair while to come through and the real damage will be the knock-on effects to confidence and, eventually, to jobs.
But, watching the heart-warming coverage emergence of the trapped Chilean miners this morning makes me think that, whatever happens in the CSR on Wednesday, it’s only money. In the bigger picture, other things are more important.