The Prime Minister and the government over which he presides are in a ‘no-win’ situation. Between the proverbial rock and a hard place. Whatever they do next will upset one group or another.
Pressure to ease the lockdown is mounting from all sides, not least his party’s donors who want their businesses open again (so long as they can stay well away). Others need to go out to work to survive and some are aggrieved at the loss of personal liberties. Ex-Chancellors are warning that the economy can’t stand much more.
On the other hand we aren’t nearly out of the woods yet and until there is a vaccine this disease isn’t going anywhere soon.
Save lives or save the economy? I don’t envy Boris.
A government’s job is to ensure the safety of its people, so which is the least worst option when there is no precedent for the crisis we are facing? What will our relationship with the State look like in the new normal when this over? Will a virus have changed that relationship forever?
Consider the facts.
- For the past 40 years it has been the accepted wisdom that government should play a support role and not interfere with market mechanisms, whether that be by minimising regulation and taxes, so that consumers could exercise to choose within a free market funded by investors who would reap the lion’s share of the reward served up by the market.
- What we have discovered in that far from the State being limited in what it can spend by the amount of tax we pay there is, after all, a magic money tree and it was growing in the Bank of England’s garden in Threadneedle Street. Who’d have thought? (Well quite a lot of us actually).
- There was no need for ten years of austerity and all the hardship it caused.
- The services that were cut and the workers whose wages weren’t properly funded – making their jobs unattractive – turn out to be essential after all.
- Far from markets being free of the State they are now totally dependent upon capital provided by the State to survive. The accepted wisdom that the providers of equity capital to companies are the ultimate risk takers (and worthy of economic favour and low taxation) we now know is just not true because it’s the State that has taken on the role of being the real
provider of risk capital.
Don’t misunderstand what I am saying here. A vibrant economy needs an active private sector to invest, innovate and compete and should reward those that do accordingly, who are usually the entrepreneurs and not the money-men.
But what we have learned from this crisis is that instead of markets being primary and the State secondary, when push comes to shove the reverse is true. It alone can get us through troubled times and provide the essential services on which we depend. It alone can ensure that as many businesses as possible survive.
Doctors, nurses and first responders are dying while most of us are at home either working or self-isolating. It is no wonder the government is struggling to find solutions; their whole world has been turned upside down. Just as yours has.
But at least the decisions you have to take won’t cost lives (or at least I hope not). You own a business and for it to survive in any economic conditions, including a recession like this one, it must generate revenue from selling products or services. To do that it needs customers to sell to. If it has enough customers it’ll make a profit which you can
draw as income.
Yes, it’s that simple.
But to get something out you must first put something in. The more you put in the more you’ll get out. I know you get that…..but are you applying it to your business? Because it won’t make money from fresh air.
The one and only thing that will determine the amount of income that you can extract from your business is the strength of your marketing engine. And its strength will be determined by its foundations. There are eleven altogether by the way.
Now, as never before, is the time you should be putting them in place.
Good luck and stay safe.
Noel Guilford