Oh how we Brits scoffed at those eccentric Greeks when they took to the streets to protest at the austerity measures that were being demanded of them by their Eurozone partners. How we gasped in disbelief as we were told of the horrors that faced the far less sophisticated economies of Spain, Italy and Ireland, who saw their triple ‘A’ credit ratings downgraded quicker than you can say ‘bankers bonus’. And how we laughed as our old adversaries, the French were left in no doubt by their German paymasters that its spending had to stop.
These nation states were out of control, not helped by their membership of the dreaded currency, the Euro. They also have citizens who appeared not to grasp the realities of the financial mess they are in – you cannot spend what you cannot afford, and the sooner Johnny Foreigner gets used to that fact, the better.
By contrast, UK PLC had managed the world economic storm well. Maintaining a Triple ‘A’ rating, and having a government that was in charge of its own economy and destiny, with a budget strategy that would wipe out the deficit in a single parliament. Yes, there would be a barrage of public sector cuts, but these would be offset by an energised, buoyed private sector which would step into the breach, and so ensure that the dreaded prospect of mass unemployment was avoided.
But wait. Last week, the Office of National Statistics reported that the UK had gone into ‘double dip’ recession. Worse, despite the austerity measures that the government has taken, our national debt is increasing – and the likelihood is George Osborne will miss his target of wiping out the deficit in this parliament anyway. The private sector continues to struggle against a backdrop of access to credit challenges and a failure of the government to offer any innovative practical support for growth. Talk has been rampant about cutting red tape and bureaucracy. Action has been non - existent.
The mantra ‘we are all in this together’ has led to the coalition veering away from any tax cuts based strategy, even though it is in this area where small businesses, particularly those in the service sector, are crying out for help.
It is small and medium enterprises that have all but been abandoned by government policy- despite the recognition that this is the community that can save UK PLC – and the government must act sooner rather than later if it is not to go from crisis to chaos over the next twelve months.
As its tax reserves shrink with the continued rise in jobless totals, does it not make sense to offer incentives to small companies to take on additional staff by offering us an NI holiday? As spending in our shops, pubs and restaurants dries up, can we not see that a decrease in VAT is the sure fire way of helping our tourist and service industries? And is it beyond the wit of the Prime Minister and his colleagues to see that harassment of small business owners by HMRC has them scrambling for cover rather than going for growth?
This is not the way you build an enterprise economy. It is the way you flat line an economy.
If being outside of the euro offers us freedom, then we should use it. If we need to fall foul of some nonsensical Brussels bureaucracy, then we should do so. If we need to balance spending and cutting more than was first thought, along the lines adopted by the USA, then let’s admit we were wrong and make the necessary U turn that is required.
The Brits are patient, pragmatic people. We don’t easily take to the streets to protest. But all pain with no gain is a recipe for unrest. More bad news from the powers that be may lead to ‘deficit denial’ that goes way beyond eccentric Europeans and the opposition front bench, if there is not a sharp upturn in fortunes over the next quarter.