I read in the Labour press this morning we all need to go out and shop til we drop – but showing suitable responsibility at the same time.
I ventured out this morning to buy a couple of newspapers and some fresh bread. I added seasonal marzipan to my basket so I could ice the Christmas cake later. Was that enough, I wondered, to meet the new patriotic requirement to be a cheery shopper? The marzipan was certainly dear enough to make a difference to the Sunday bill. It didn’t mean, however, that I needed to up the mortgage.
Therein lies the dilemma. The authorities visited this crunch on us, because they judged we were collectively borrowing too much and spending too much. They hiked the interest rates and later told the banks to lend less for the level of capital they held. Now they don’t like the results that come from jamming on the monetary brakes so spectacularly. They want us to be both prudent and to spend more. Given many families personal circumstances they can’t do that.
The spectre at the feast this Christmas is not just cash strapped banks reluctant to lend. It is many people worrying about whether they will get any overtime in the New Year, whether they will be on short time working, or whether they might lose their job altogether. Unemployment is the spectre stalking the land. If you fear loss of job you are not going to go out and buy big ticket items. You are going look carefully at the price of any inessential you would like to buy. You might buy some decorations and some Christmas lights, but preferably on the day the shop has cut their price by 25% to promote them. You won’t buy the new plasma TV, even when it is £300 off, because it’s still a large commitment. As for a new car, well you can forget it.
Companies are in an even worse plight. If people don’t spend enough in the shops, they feel it first at the factories making the goods. The stores soon turn off the suppliers. Companies cut out buying new cars for their staff, cut back on corporate hospitality, and review the prices they are paying to all who work for them on contract. You soon get into a recessionary psychology. Why buy it today? It might be cheaper tomorrow. Why buy it today? We might not be able to afford it tomorrow. Why buy it today? We can make the one we’ve got last longer.
After years of fulminating against the throw away society, after years of moral condemnation of the have it now pay later society that fuelled the boom, the government has come to the conclusion there is one thing worse than such a society. That’s a society where people are so careful with their things and their money that they throw others out of work with their parsimony. Did I do enough with my marzipan? No I didn’t. Should I do more? No, I don’t think so. What’s the point of buying food you cannot eat, only to throw it away, or buying things you do not need. Besides, many are saving up for the tax bill in January, as the government does want to spend so much for us.