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What happens when the phony war is over?

It still feels to me that we are in the coronavirus phony war. Please do get me wrong: every death has been a tragedy and every job lost and business closed a smaller one, but painful nonetheless.

26th May 2020
Founder and blogger Tax Research UK
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With luck, the death toll may now decline. That should be a cause for celebration when we can be sure it has happened. But I fear that the toll of job losses and business failures is going to last for a long time to come.

I know what that stress looks like: much of my own business model, which has primarily been based on securing research grants, is now obsolete. Grants are going to be like hen’s teeth right now. Along with millions of others, I am now wondering about what’s next. But precisely because the crisis has yet hit as hard as it might, I suspect that many are putting off the difficult task of facing a future that will be very different from the one that they imagined.

To get competitive advantage, this is precisely the time to do the hard thinking.

As a starting point, it’s extraordinary that the coronavirus has created the crisis that it has. Our fear of death is very high: the price we will have paid for avoiding it will, however, be enormous. That equation has to be put in context. The government’s doing very well right now: quite frankly, I could never have imagined people coming out to clap government employees. And the government can continue to do well because it can get all the money it needs to fund its response to the crisis. That’s because, unlike the rest of us, it has its own bank that can lend it money without demanding repayment, ever, if need be.

What’s more that bank (the Bank of England) does not even need to charge it interest. So, before we panic the point that I am making is that the state is going to see us through this, somehow or other.

I am not suggesting that prospects for the private sector are great. Sure some sectors are doing weel – it’s a great time to be in the protective equipment industry. But maybe not aviation or hospitality.

What really matters in any business is understanding what your business supplies. Back around 1990, I was heading a new, young and ambitious accountancy practice. We were having a bit of a recession back then. Nothing like now, but some things, like interest rates, were pretty ugly. And we grew by working out what we really did.

We worked out that we really did was not sell accounting and tax services, even if 80% or more of the fees sent suggested that was what we’d done. What we actually sold was reassurance that everything was under control. If we could offer that reassurance the client would pay. In fact, they’d pay over the odds.

But that required us to always understand the client’s concern; always answer the question they’d really asked - which sometimes took some working out - in terms they’d understand and to never cause them anxiety by delay. So service had to be prompt or we’d increase their stress and the fee could be lost.

And this matters right now. We can all say what we are, like being an accountant. But people take that claim for granted: they’ll assume that we can do whatever it is that we put as the label on our tin. But they’ll only buy if what we supply meets their need. Like supplying reassurance in the case of an accountant. Or, if you’re a restaurateur for example, a feel good night out. Or stopping the water from flowing and causing damage in the case of a plumber and so on.

Right now I’m facing that challenge again. At this stage in my career what can I supply that is not what I am known for, but is what people want? That’s the ultimate survival question. When times are going to be tough people want value for money. Our job is to work out what that means and how we can deliver it.

Replies (7)

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By Rgab1947
27th May 2020 10:33

Afterwards there will be tax rises and many unemployed and food banks overwhelmed.

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By AndyC555
28th May 2020 10:48

"The government’s doing very well right now"

Odd that you say that as on your blog you've said

"The UK has the highest coronavirus death rate. What is truly sad is that this was the result of political choice, and not by chance"

Indeed you've criticised just about every government policy during the coronavirus crisis as a mistake, a missed opportunity or both, claimed to have heard rumours from high placed sources that Boris Johnson has a 'booze problem' and said that many Tory MPs will be delighted at the pensions savings resulting from the untimely deaths of the elderly. You could scarcely have been more scathing of the current government.

It's almost as if, being aware that you will have very different audiences here and on your blog, that you're just saying what you think your audience wants to hear.

Is this the answer to your 'survival question', I wonder.

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Replying to AndyC555:
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By AndyC555
28th May 2020 14:12

It seems I spoke too soon as Richard has completely changed his views on the government as the following exchange on his blog today seems to show;

“John Peterson says:

The government’s doing very well right now.

Reply
Richard Murphy says:

You must be on another planet”

I wonder what has happened since Tuesday that has brought about this change of opinion.

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By moneymanager
01st Jun 2020 12:12

"When the phony war is over""

With luck, the death toll may now decline. That should be a cause for celebration when we can be sure it has happened"

I'm not in London but we have been told that it has been the British epicentre of the pandemic.

According to the website of the London Mayor, and Khan is not going to understate the awefullness that has bestet his patch, as of the 28th May the TOTAL number of death certificates on whuch COVID was MENTIONED, i.e. not neccessarily the primary cause was,,,,, do I have your attention,,, 167.

That's right folks, on every single normal day in Britain 1616 die or circa 50,000 a month, do we shut the country down and cause massive business loss becasue of that, of course we don't.

And the consequnetial damage is already rearing its head, the backlog of cancer treatments, all manner of elevated or induced menatl problems and as we have seen some suicides in young mean and women i.e. our futures. I have family elsewhere with more draconian lockdown measures and one should have gone to hospital with a severe burn but he's petrified of going because he's near a hotspot (which normally has three times Europes average respiartory related deaths anyway), I should think this has severly impacted on his life expectancy, all part of Mr Gate's plan for global popualation reduction?

In this country and in the US facilities on which hundreds of millions have beeen spent are being closed many of which have never seen a patient, we have debt in its trillions that have been forced onto governments (i.e. the tax payer) and is being coerced onto businessess when no debt was wanted or needed, we've been mugged and in more than one sense of that word.

I know of two people currently working for the NHS, one on the operational managemtn side and one in frontline, both say it's a non event and why is it that NHS trust Corporate Affairs Directors" and CEOs have commonly banned and media communication, threatend staff with disccipllinary action with some being sacked, simple, because it's a crock; I have heard epidemiologists saying that if they hadn't been told there was a new strain of respiratory disease the stats would not suggest its presence.

The only pandemic we have is the one created by god (possibly not God) knows who for god knows what reason and the only thing for certain is that isn't for our general benefit.

"Words are taken as facts", can't remember who said that first, possibly Moses but when you read anything just asssume it has the potential for merely being propaganda.

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By johnjenkins
02nd Jun 2020 08:57

Hey Richard, what is happening to this boom you were predicting after lockdown?
You're not actually taking in what we are saying are you?

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Replying to johnjenkins:
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By AndyC555
03rd Jun 2020 10:28

They say that the sign of a good economist is when they can explain why their predictions were wrong...….

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Replying to AndyC555:
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By johnjenkins
03rd Jun 2020 12:39

Who are "they". Cos "they" seem to know a lot more than us. A good economist never gets it wrong, just ask Gordon Brown.

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