It’s official. The UK is now in recession, as if we didn’t already know! Everyday, I hear of shops closing and established businesses being denied credit from their bank. As a business owner myself I can tell you that these are very worrying times. Most businesses that sell anything must be seeing a reduction in sales. People are worried about their jobs and there is more unemployment which causes people to hang on to there money. As a travel agent I am seeing a shift to late bookings and I think that people will be reluctant to give up some sort of holiday this year.
In the past, people have found money easy to borrow for their holiday. After all, it is a major purchase and a family holiday for four people in high season to spain can cost £2,000. There is a definate shift towards All Inclusive holidays, where all food and drink is included in the basic price of the holiday. This makes it easy to budget as prices for buying things abroad have increased due to the fall in the value of the pound. I still think, though, that a holiday is good value for money compared to a holiday in the UK. Our travel agency is selling holidays to Greece at the moment for a week at a price of £199.00 per person which I think is great value for money.
The Idea to stop the rot
I think the government could have done much more to stop the recession in its tracks. Our greedy banks have been bailed out to the tune of billions of pounds. One of the main reasons for this was to get the banks lending again. This has not happened and the banks actually need bailing out again as the original sum has been swallowed up. The government has lent to the banks when it actually does not know the extent of their bad debts. I think the government should have missed out the banks and given money direct to the tax payer and to small businesses. What should have happened is that VAT and PAYE payments should have been stopped for 6 months and the slate wiped clean up to a certain amount. At a stroke this helps a struggling business and could avoid the need for shedding staff.
At the same time tax should have been reduced for 6 months, so that we all have more money in our pockets to encourage us to spend. This keeps the money supply moving and creates confidence in the economy.
Lets Build Houses!
In addition to this I think the government should have bought houses, thousands of them! It was only in the last year or so that the government said we needed to build thousands more houses for an increasing population. The building industry is in the doldrums, so why didn’t the government get the builders building by ordering houses to be built. The government could have done a deal with the building industry and they even could have become a huge landlord and rented these houses back so that they get their money back in rents. This scheme could even make the government a lot of money as these houses could be sold for a profit in the future. This makes sense to me!
I am not saying that the banks should not be saved but it strikes me that they were the ones who got us into this mess and they are being rewarded for that!