The wrong economic telescope, chancellor

The wrong economic telescope, chancellor

Once again, as the budget looms, the government is looking down the wrong end of the economic telescope.

Egged on by helpful organisations – such as EEF, the manufacturers’ association – the Prime Minister is on the look-out for supply-side “growth-stimulating” ideas.

Like many others in that part of the economic forest where things actually get made, EEF is calling on government to stimulate “growth” by improving labour “flexibility”; ie giving employers the power to sack workers more easily. They also want fewer climate change taxes, more tax breaks and bank lending. While not endorsing their claims, I share their pain. Thing really are tough out there for entrepreneurs.

Take Andy Clarke, chief executive of Asda, who is worried about the impact of consumer confidence on his business, and said that shoppers at his stores faced a “perfect storm” – with less money to spend, and anxiety about higher costs and fear of unemployment. Sales of National Lottery scratch cards, which correlate to customer anxieties, were rising at Asda.

“It shows that customers out there are worried,” said a spokesperson. Concerned that government is not getting the message, Clarke had “personally handed” data from Asda’s income tracker to several frontbench government ministers.

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(c) Ann Pettifor is a political economist, writer and analyst of the global financial system, and co-author of the Green New Deal. She predicted an Anglo-American debt-deflationary crisis back in 2003. She also assists church groups on debt and environment issues, and her work is published in a wide range of media, including Ekklesia. Her Debtonation blog can be read at: http://www.debtonation.org/

Ekklesia's 2011 Budget coverage and comment can be accessed at: http://www.ekklesia.co.uk/Budget2011

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