Economics Straight and True

Earlier this week, it became official that the UK was in a double dip recession; an announcement that had been softened somewhat by previous data that suggested the UK economy had once more begun to shrink.

Now there are calls for the government to alter their course of action so as to encourage growth before the new dive becomes irreversibly damaging to trade and economic prospects.

However, austerity measures already in place took some time and considerable budget planning to come into force and it is highly unlikely that a swift change of course will come by the end of the month, or summer for that matter.

No, the government will cling to a belief that whilst many other countries, both across Europe and the globe as a whole, were reassessed and had their credit ratings slashed a few months ago, Britain was spared in part thanks to these current policies.

It is no little truth. Of course, the trend of growth, strength of the sterling and increasing import/exports all had a swaying hand on the decision, but a key factor in the assessment process is the perceived overall management of a country’s finances. Fiscal priorities from Westminster over the past twenty-four months have been second to none and, whilst the hard medicine approach has drawn parallels with the unpopular measures of Thatcher, now (as then), there is still an overwhelming feeling of support for the government as they remain resolute in their course of action.

Indeed, polls at the beginning of the month, following the budget report indicated drops for the Conservative party, but these were immediate back-lash reactions and not measured voices who had considered the situation.

A situation that is, at best, precarious. Sudden shifts in strategy could in fact damage the overall economic efforts. Initial reaction to another statement of new measures would see widespread panic throughout the City that would in turn spark a weakening pound and a possible rush on banks.

Not to sound overly apocalyptic, but the trust that the public and businesses place in government policy is a fine balancing act. Even the slightest hint of disruption could threaten the stability that has slowly ebbed its way back into consumer and business life.

Moreover, with Spanish unemployment at a new high, continued Greek unrest, and further burdens on Germany as AAA lone ranger of the Eurozone, the British need to put support behind government efforts to consolidate progress so far achieved. With the costly problems facing Europe, our markets need to continue to prosper, or else both pound and euro will undoubtedly ride down the abyss together, so inherently linked are the two zones.

Whilst the budget measures are unpopular and few benefit from the changes, it would be unwise to declare the policies as inappropriate and unsuitable to the current climate. The phrase “we’re all in it together” still rings true in ears across the country: only in a resolute front of support can businesses emerge from the staggering financial crises and people become more liberal about their expenditure. Riots like last summer show the potential fragmentation that lurks underneath our society, and similar disruptions seen across mainland Europe in country’s with governments weaker than our own are testament to the need for a straight and steady course, perhaps even to protect us from ourselves.

That Budget is Crackers, Gromit!

Following the (unsurprising) budget announcements last Wednesday, there has been a great deal of debate as to whether it is a budget for the millions or for the millionaires, the effect of the supposed ‘granny-tax’ and heated divisions regarding the 50p tax rate.

However, there has been little talk of what the budget may mean for students and the younger generations, whose job prospects are bleak and whose applications are riddled with the ‘experience vs qualifications’ conundrum that blights so many in the 16-25 age bracket.

Indeed, the budget announcements appear to do little in the way of helping these frequently marginalised groups of society. So often do people talk of clichés that the young are the decision makers of tomorrow, and yet this truth does very little in our favour. In fact, the budget just serves to make us all the more cynical.

With the increase in the price of alcohol and cigarettes, no longer are the old havens of retreat safe: rather the stress-relief of students nationwide is in jeopardy of becoming another ill-affordable luxury. Alright, it may ensure a few less damaged livers and a couple of higher-capacity lungs, but these items symbolise a retreat from the embittered adult world that students sooner or later have to enter. So it stands to reason that many young adults may opt to still purchase the alcohol at the expense of proper foodstuffs. In an increasingly saturated graduate market, forgetting the misery of an ever more ‘worthless’ degree, spiralling debts and fewer job prospects is only facilitated by the odd pint or seven.

Besides, students will be all the more inclined to stay inebriated with the introduction of the pasty tax: no more sobering cheap foods to end the night out. That questionable imported meat, at questionable prices, that smells so aromatic at 3am will no longer linger around dorms the next day. Perhaps the next move would be to add extra taxes to beans and bread so as to capitalise off the staple beans on toast?

If sobriety sticks, the lonely nights in deliver the promise of, well, Wallace and Gromit, which is ever so entertaining and pivotal in the lives of 16-25 year olds. That’s smashing, Osborne (or crackers. Pick one).

However, rentals of everyone’s fave pooch inventor and his gullible owner may be all the pockets will stretch to with the freeze of minimum wage for 18-20 year olds. Of course, this decision follows the logic that with a stopper on increasing wages, more jobs will be created for the young people. Newsflash: The UK is back in recession. Scrap that last.

So dust off the old bottles of Jack for some measly measures that will hopefully make cartoon capers all the more appealing. Resounding cheers from the ‘enfranchised’ under-25s everywhere.

That is cheers from the under 25s when London is vandalised once again. Essentially, amidst the squashed bottom and the squeezed middle, there is the forgotten generation and this budget does little to help any of these groups. This is all the more concerning this week because inquests have ruled  overlooked families and youths as one of the key contributors to last year’s UK riots. And following this, some Westminster MPs decided that all of the above tax changes were a proper course of action. With growth in reverse and prospects for youths few, it’s no wonder this government is thought of as backwards.

At least we’re of a generation that deems the stamp irrelevant…

Work out the tax changes to your life here.

No Day of Rest.

Over the weekend, Osborne introduced new Sunday trading laws for the duration of the London 2012 Olympic and Paralympic games.

Under the rulings, there will be no major restrictions on Sunday trading as is the norm in the UK.

The Chancellor stated that with so many hundreds of thousands of people coming to the country to enjoy the games, it would only be sensible to extend opening hours so as these people could enjoy the retail experience too.

Suspension of the Sunday trading laws is due to run for eight weekends from the 22^nd of July.

George Osborne explained his decision in a television interview, stating that “It would be a great shame - particularly when some of the big Olympic events are on Sunday - if the country had a closed for business sign on it.”

Mixed responses have followed the news, with some believing it a celebration of British retail as defined by Westfield shopping complex, whereas others bemoan the legislation as detracting from the small, unique and diverse independent shops that London has to offer.

Relaxing the Sunday trading law is something to be concerned about, however. Mr Osborne also described the scheme as an ‘experiment’ from which the government ‘could learn things about trading’. There is growing belief, with rumours from inside parliament, that should the Olympic trading prove successful, then the laws could be scrapped completely.

Whilst this offers extra hours of retail for large companies, it does not vastly improve lifestyles for those in the UK.

Increased trading hours means that more people will have to be contracted to work Sundays. This will restrict relaxation time available in the weekend, both on personal and familial levels. With more people expected to be in work, there could be in fact a general reduction of shoppers, with people not wanting to spend extra time away from families and other activities, but the Olympics would mask this due to it being an anomaly event.

With no consultation on the matter, longer hours are bound to cause some disruption, but are already being assessed as a long-term plan by the government.

Comparing with European counterpart France, people are either lucky or in suburban Paris should their supermarkets and chains open more than 12 hours in a day; Sunday trading is even rarer. This thought is poignant as the 2012 Olympic bid finalists were London and Paris. France would not relax its laws for the Olympics, especially when they are cultural and religious. The nation just across the channel rests on nationalism and a sense of a day of rest for all.

The UK, however, has lost this perspective and continues to back longer hours and less respite time. Concerns have shifted from the personal and wellbeing, to material and capitalist gains. Only in reversing this trend can we see an increased national satisfaction. Happiness doesn’t come from shops, but in our time spent together.