Industry could offer the UK shelter in an economic storm

Published on the Guardian Comment is free pages today – read my article on why “Asda’s chief executive is right – low consumer confidence is a major threat to business, and Freaky Friday hasn’t even hit yet”:

Once again 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.

Read the full article >

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