Writer of leaders for The Information Daily, Healthcare Innovation Monitor and Public Service Digital.@theleaderspeaks
In announcing the sugar tax on Wednesday, George Osborne revealed that he has begun to think about how and for what he will be remembered. Any fat-head could tell him that it won’t be for his attempts to tackle the obesity crisis. He should get through to the next budget without having to rewrite his Wikipedia entry but the chances of him holding down his present job through to March 2018 are vanishingly small.
Yesterday the Federation of Small Businesses (FSB) published some of the worst business confidence figures since their quarterly reporting began. Today the Institute for Fiscal Studies predicts austerity and slumping living standards running on beyond 2020 well into the next parliament.
The chancellor has only one economic engine and very few leavers left to pull in his, so far, vain attempts to persuade it to perform the way he wishes that it would.
Small business confidence has fallen to its lowest level since the first quarter of 2013 according to the FSB research. This fall in business confidence spreads right across the UK and, worryingly, is particularly marked in London and the East of England.
SMEs are reporting that despite rising revenues, profits have fallen over the past three months. In short, margins are getting tighter. Exports are at their weakest since FSB reporting began in 2012. The weakening global economy is curbing demand for UK goods and services while the weakening of the value of the pound against other currencies has yet to show the predicted positive effect on exports.
Worse still, this quarter “represents the first negative quarter for job creation since 2013,” says the FSB report.
Small and medium sized enterprises, the fuel that everyone agrees is needed to power-up the economy, are under the cosh now. But the government has designed additional forms of corporate torture coming on stream even as you read this. Pensions auto-enrolment, the introduction of the National Living Wage and changes to the tax treatment of dividends may individually have something to recommend them, but dumping them onto SMEs that are already on their knees looks increasingly like a political suicide note.
We know, of course, that all political careers end in failure. In announcing the sugar tax on Wednesday, Mr Osborne revealed that he has begun to think about how and for what he will be remembered. Any fat-head could tell him that it won’t be for his attempts to tackle the obesity crisis.
The Chancellor will almost certainly go before the next parliament. He will be sacrificed by a government looking for scapegoats and a hint of a “feel good” economy in the run up to 7th May 2020. They will want a minimum of eighteen months without his deadening hand on the leavers. Before or after the 2018 budget? Quite possibly before!