FOR JUST one brief, fleeting moment, I was cheered recently to read that Britain’s economic recovery was gathering pace.
Unfortunately, another story on the same page of the same newspaper told me that the cost of living had risen by 0.5 per cent in just one month. And below that was the news that retail sales in Scotland for October were down 2.8 per cent on last year.
“Turn the page for heaven’s sake,” I told myself. So I did... and came upon the fact that property values were tumbling by £350 a month and unemployment in Scotland was now running at 8.1 per cent.
“Where’s this economic recovery then?” I thought.
Then came the news that while power firms’ profits are going up by almost 40 per cent, our bills are also going up by about 25 per cent.
It’s hardly a national economic “recovery” but could utility employees at least, be doing well? Not according to the man who came to change my meter recently who complained his own firm didn’t pay him enough to meet their bills!
It’s hardly any wonder people in this country are confused about the economy, mistrustful of politicians, and highly suspicious of big business.
One thing that most of us would expect in a recession is that prices would come down, to maintain demand, keep the customers coming in, get the overheads paid and keep the business ticking over, even if it means, as it usually does, lower profits. No point in pricing yourself out of the market.
Yet I know building firms, restaurants, hairdressers, and even retailers (excluding supermarket price wars) who are still charging the same or even higher prices than they did before the financial crisis first hit. Presumably they and their suppliers are relying on the dwindling number of people who can still afford top prices.
Perhaps, living in a city such as Edinburgh where we do have a considerable number of highly-paid people, private schools, and even a Harvey Nics, they can afford to hold fast and hope for things to return to “normal”.
But that in itself seems unlikely, because the pre-recession “normality” was built on artificial, non-sustainable, lending and borrowing, giving us all a false sense of security. We won’t ever get back to that. We shouldn’t want to.
Which brings us to banks, presumably a crucial factor in assessing national economic recovery. But they, like many other businesses and sectors in the equation, have been forever changed by the last few years.
We now have an ongoing situation in which the performance of banks – even if it’s good – has less and less impact on the economy generally, simply because they don’t lend any more. The “trickle down” effect beloved of the Tories and the City doesn’t work because the tap has been turned off.
While business board and executive pay soars, apparently regardless of performance, share value and particularly employee wages continue to fall.
I don’t think it is economic rocket science to suggest that no meaningful economic recovery at all is possible for any country until the man or woman in the street has the wherewithal to pay the basic family bills with enough left over to buy the sort of extras or luxuries that drive the economy and create demand in the first place.
That’s the real issue with greed at the top, with bumper bonuses and huge pay-offs, even for failure. We now have the ludicrous situation where senior executives are given bonuses for “cutting costs”, a euphemism in many cases for keeping wages down or axing jobs. We need intelligence, success, innovation, expansion and development because there’s a thin line between corporate belt-tightening and self-strangulation.
There is no point in Vince Cable or anyone else fist thumping about out-of-control executive pay lining the pockets and trust funds of the few if he doesn’t explain that the point of reducing it is to employ more people at lower levels, pay them more and get them spending on goods to employ others in turn. Without that, there is no such thing as recovery.
THE statistics are quite clear that most road accidents are caused by young male drivers. But because of European sex equality rules, nine in ten UK women will face a rise in insurance premiums of up to 25 per cent because gender can no longer be used to assess premiums from next month. It is “unfair discrimination”.
Postcodes don’t have genders. So if you are a young man living with mum and dad in a posh area, you are quids in and the cost goes down. If you are a single mum and careful driver who needs their car for work in a poorer area, sell the car and take the bus or start carving clogs for the kids. Shoes will be out of the question. Apparently the EU thinks that’s fair.