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This is not a good time to run a retail business – the effect of the Coalition’s benefit cuts will trickle up and bite our rich retailers and industrialists hard.
According to the BBC website, business activity was hit hard by last month’s exceptionally cold weather, with the number of people visiting shops down by more than five per cent.
For one person, this will have been an extremely pleasant piece of news, because for once he won’t have to explain himself.
That person is, of course, Gideon George Osborne.
For one month, he hasn’t been in the unenviable position of having to root around in the political undergrowth for a reason the economy has tanked – that isn’t related to his own hopelessly inadequate economic policies.
For one month only!
He will not have an excuse when the figures come in for April, worse than for March, as sane economic forecasters should expect.
Instinct says he will tell us the funeral of Margaret Thatcher will have something to do with it. He used the wedding of the Duke and Duchess of Cambridge as a shield – what goes for ‘matches’ must surely apply also to ‘dispatches’.
The real reason will be the effect of the huge benefit cuts, that will take £19 billion out of the economy over the next year, if commentators are to be believed.
That’s just in money terms. Add in a conservative estimate of the fiscal multiplier (the effect on the economy) and we’re staring into the black pit of a £30.4 billion loss. That would be £500 for every person in the UK, if we were all affected.
But the richest among us won’t be. It is on the poorest and least able to defend themselves that this hammer blow has fallen. The government has been giving money back to the richest, as we all know.
In fact, this show of support for his cosseted buddies might protect them from the storm that’s coming, and may therefore prove to be a shrewd move – but we must all remember that Osborne is not an intelligent man and good fortune coming to anyone as a result of his policies is pure chance.
Because the rich will be affected by the benefit cuts. Poor people have no choice but to spend the money they receive. They have to buy things they need and pay the bills, so it goes on food, heat, light, water, the rent, repairs and other necessaries. With less money available to them, they will not be spending as much in the shops, and will be more careful about how much gas, electricity and water they use, as well.
Who owns and runs the shops? Who owns the shares in the utility companies (now that the bulk of shares have been bought up from the middle-class speculators who bought them in the 1980s)?
The rich.
After a few months of this, we’ll see what happens to their profit margins. My guess is that a £100,000 tax rebate won’t help very much.
The propaganda machine keeps spewing out nonsense, of course. Only last weekend we heard Francis Maude telling Jonathan Dimbleby and the Any Questions audience in Exeter: “The Coalition government, which is two parties which have come together from a different place, in the national interest, to do something quite big and difficult, which is to address the biggest budget deficit any country in the west had.”
It wasn’t the largest budget deficit of any western country – either by size or percentage of GDP. That was a flat-out lie and I wish Jimbles would pull him up on it.
The deficit in the United States is greater than ours in percentage terms; in money terms, it dwarfs the UK.
Across the whole world, Japan has the biggest deficit.
Strangely, you don’t hear the Japanese making a big fuss about it.
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