BRITAIN’s current economic profile
is intriguingly similar to that which
the landslide Thatcher government
inherited from Callaghan some 30
years ago.
With sombre economic prospects,
snail-pace growth and a depressing
outlook for employment, such an
assessment could equally have been
penned by Geoffrey Howe as by Alistair
Darling and may yet be the poisoned
chalice awaiting a change of
government next spring.
The difference may well be that
Thatcher proved herself to be the Iron
Lady whose policies may not have been
universally popular but were, at least in
the early days, effective,
while Cameron, should
he succeed (and one
wonders why he might
want to), has already
been branded as
“slippery” in the press
and, as yet, has
everything to prove.
Callaghan’s “winter
of discontent” in 1979
was very much the
product of domestic inefficiencies and
an unwillingness to change in order to
compete. Our chaos has been brought
about by massive governmental
intervention to shore up a terminally
sick financial system which has
represented the epitome of commercial
arrogance and has still, in some corners,
light years to travel before it could be
described as reasonable or fair.
Terminal aneurism
Moreover, the financial system would
have suffered a terminal aneurism
anyway even if it hadn’t happened at the
point when it did because it was clearly
out of control and was being policed by
a government with a tick-box mentality
and for whom substance was clearly less
material than appearances.
The real problem, one might
suggest, is not that our government
intervened at a fiscal level which we
could not afford – all governments
involved did the same – but that
Britain’s economic cupboard was not
only already bare but also that we had
no prospects of being able to produce our way out of this dilemma.
To generate economic growth one has to produce something and sell it to
someone else. Our economic cycle is
based on a need to generate constantly
increasing GDP which other people will
buy alongside a national need to import
less and export more.
None of it is rocket science and
none of it is new to us. Since Thatcher’s
time in office we have repeatedly sold
off national assets and closed down the
boilers of industry because they were
uncompetitive.
At no stage can I recall anyone
saying that we needed to invest in
uncompetitive industries to ensure that we had a national future
because it was easier
and more personally
lucrative to press the
delete button for ugly
industries in favour of
opening shiny new
offices selling financial
services which were
always going to be a
pig to police and which only have a place
in a world where investors’ confidence is high.
Tail-end Charlie
No great surprises then that Britain is
the tail-end Charlie in emerging from
this recession as we have nothing to
make and very little to sell that anyone
might want while the world is in such
turmoil.
How will this affect us at home?
Realistically, we should expect that the
next six months will be critical to
economic recovery as the government
will have to demonstrate some degree of
recovery in order to salvage what’s left
of our international credit rating and
this will inevitably take the form of
public sector wage restraint which is
equally likely to lead to a strengthening
of union action and a winter and spring
of discontent among those who feel the
pinch hardest.
We’re already seeing unprecedented
levels of unemployment among the
middle classes with record numbers of
solicitors and other professionals,
including a number of veterinary surgeons, among the unemployed.
Independent forecasts for unemployment
figures seem to agree that
it should peak at around 2.7
million by the spring, which
might encourage the incumbent
Cabinet to rush out a snap
election early this year.
Whenever it
happens, however,
most of us who have
seen it before know that
elections are a time of
seismic uncertainty which,
together with the inevitable
rise in interest rates, will have an effect
on consumer confidence and an
increased pressure on the family purse.
Re-assessment of spending
We have seen that, in most cases, the
economic recession has forced people
to re-assess their spending and, if
even they have not been forced to cut
back dramatically, most families have
made considered choices about what
they buy and where they buy it.
Growth in pet-related spending in
the supermarket and pet retail
channels has come at the expense of
elective purchases through the vet, as
consumers find that they can buy the
same or, in their eyes, very similar
products in a more convenient
shopping outlet.
This really is the time for
veterinary practices to take the trouble to
understand consumer behaviour and
to harness that understanding in the branding and the retail promise which
our practices are offering.
No one doubts that consumers
will continue to bring their sick and
broken animals to the vet but if we
want them to buy their elective pet
purchases from us, the message is
clear: we have no choice but to take
the trouble to understand the rules
and to play the same game as our
competitors, whether they are fellow
veterinarians or retailers in other
channels.
As history shows, King Canute
may have been “King of all England
and Denmark and the Norwegians
and of some of the Swedes”, as he
pronounced himself in a letter to
Rome for his own coronation, but
even he couldn’t hold back the tide.
