Skip to main content

The Chancellor's choices

Imagine if someone decides to give you £1000 with the expectation that they expect you to spend it over the next few months, mainly on consumer goods and services.

However, the catch is this. Sometime over the next five years, you will have to repay that debt and another £500.

So what are you going to do?

(a) Spend it all and worry about it later?
(b) Use it to pay off your existing debts which are at their highest levels ever?
(c) Invest the money to pay off the £500 you will owe later?

The answer to this question, more than anything else, should determine the fiscal strategy to be adopted by the Treasury on Monday.

Unfortunately, it may not be the answer the Chancellor wants to hear.

With personal debt out of control, rapidly rising unemployment on the way and the fact that the price of the average house falling, option (a) - which is critical to the Government’s proposed strategy - is probably not the one that the majority of the working population will choose at this time.

However, if you didn't have to pay back the £500 and the person giving you the money said that they would find that sum from their own internal savings, would your answer be different?

Comments

Anonymous said…
so Dylan over 300 to go at Hoovers -as a start
Anonymous said…
and it going to get worse
Anonymous said…
p.s. tax cuts will not be felt until after Christmas so will have no real effect on the economy. So people will spend less before chrsitmas and then hoard the cash for a recession after Christmas

Popular posts from this blog

THE IMPORTANCE OF FRANCHISING

When we talk about start-ups and entrepreneurship, rarely do we discuss the potential of franchising not only as a way of establishing new ventures in the economy but also as a method of growing existing businesses. According to the British Franchising Association, franchising is the granting of a licence by one person (the franchisor) to another (the franchisee), which entitles the franchisee to own and operate their own business under the brand, systems and proven business model of the franchisor. The franchisee also receives initial training and ongoing support, comprising all the elements necessary to establish a previously untrained person in the business. This enables individuals to start their own businesses without having to develop their own ideas and utilising an existing brand and established market. Of course, whilst each franchise business is owned and operated by the franchisee, the franchisor controls the quality and standards of the way in which the business is

Change your business through change

All business organisations, especially entrepreneurial small firms, must cope with an ever changing business environment. However, small firms have a very limited ability in being able to control and relate to changes in the environment, although this can depend on the context of change. For example, if a major customer changes increases its order, the entrepreneur should be able to predict events and actions with regard to the timing and consequences of such a change and forecast any changes in the required resources and cashflow. Given this, the entrepreneur can undertake rational short-interval planning activity in order to underpin organisational control. However, much of the change facing business today is largely unpredictable in terms of its timing and its consequences. In other words, such change is open-ended, with it often being unclear what is changing or why it is changing. For example, the effect of the 9/11 bombing of the World Trade Centre was largely unexpected and its

THE IMPORTANCE OF THE CREATIVE CLASSES

One of my favourite academic books of the last two decades must be the “Rise of the Creative Classes” by Professor Richard Florida.  This was one of the first detailed studies of the growing group of individuals who use their creativity and mental labour to earn a living and not only included those in arts and entertainment, but also people working in science and technology as well as knowledge-based professions such as healthcare, law, business, and finance.  Fast forward to 2022 and Professor Florida has written an updated report on the creative classes although he and his team now identify a different type of individual who is taking full advantage of the growth in digital platforms, social media, and online marketplaces.  Such ‘creators’ are defined as those who use digital technology to make and publish unique creative content, whether in the form of video, film, art, music, design, text, games, or any other media that audiences can access and respond to.  They also make their mon