Coalition’s lack of courage threatens a triple-dip recession

Allister Heath
SOMETHING quite astonishing happened yesterday – and no, I’m not referring to the gorgeous weather, or to Bradley Wiggins’ Tour de Force. The real miracle was that supermarkets opened for much longer than they are normally allowed to on a Sunday, with shops describing these as “summer opening hours” (out of fear of being prosecuted for mentioning the Olympics, presumably). Those who weren’t spending the day sunning themselves were able to enjoy the sort of convenience they take for granted every other day.

Many employees took home extra pay, a welcome boost at a time of austerity; those Christians for whom working on the Sabbath is contrary to their beliefs were able to opt out, with no consequence to their careers. Everybody was happy; and contrary to what many killjoys have been predicting over the years, at the time of writing this article, society appeared to have survived.

So why not permanently allow consenting adults to shop freely on Sundays? Wouldn’t that be a good and easy way for the coalition to show that Britain is open for business? It is absurd that people are thrown out of supermarkets – otherwise often open 24/7 – on Sunday afternoons. I have never actually seen a cost-benefit analysis that showed that there would be a negative impact from liberalising retail. One report commissioned by the Department for Business when Labour was still in power showed a net benefit of £20.3bn in present value terms, once all of the main factors were included, including benefits such as new jobs and extra convenience, as well as drawbacks such as extra congestion and the shutting of some smaller independent shops. On an annualised basis the net benefits were equivalent to £1.4bn per year, or £64.10 per household per year, over 20 years.

People already shop online all of the time. Christians who insist that Sunday must remain special should remember that in the US, that most religious of Western societies, shops have always been open on Sundays (and churches are sometimes based in shopping centres). So why can’t the coalition go for it? Unfortunately, allowing shops to remain open longer on Sundays smacks of the kind of “radicalism” that this government feels incapable of delivering. It is a case study in its disappointing, debilitating lack of a backbone. If it can’t push through such a minor reform, such a no brainer, then what hope is there of more airport capacity, proper supply-side reforms or any other difficult decisions?

No wonder, therefore, that the economy is underperforming. We shall find out this week the extent of the damage when our statistical masters tell us what they believe the economy grew by in the second quarter. The fear is that we suffered a third consecutive quarter of recession. Nobody will know for sure, because the figures are dubious.

But it is conceivable that the boost from the Olympics and lower inflation may nudge the economy back into slight growth in July-September – and that it could then slide back into contraction in October-December. We could then be facing a politically devastating triple-dip recession.

The only good news is that George Osborne is trying to limit the damage being inflicted by the extraordinarily costly green initiatives at the heart of the UK’s energy policy. But even he still seems to accept the policy’s core assumptions, which will end up costing the public a fortune and destroy the viability of much of UK industry. Once again, this seems like a case of too little, too late from a coalition that has lost its way.
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