As I write this it is nearly the end of August and the rain, which hasn't stopped all night, is still pouring down on a bedraggled Market Place. Stallholders are regularly pushing up their canvas roofs to send a cascade of water over the ground. Depressing? Just a bit, maybe, but look on the bright side. We will soon be in September with the throngs of bored children heading back into the arms of their welcoming teachers to continue their studies towards the next crop of A* GCSE's and A levels.
What of the property market, which is now looking towards early Autumn? The coalition government announced mid Summer that they would be making their main 'Cuts' in the Autumn and I feel that the usual holiday season lull has been intensified by the prospect of this happening. If you tell a population that there is pain to come then they batten down the hatches and wait and see. The recent retail figures and mortgage approval figures may bear this out to a degree.
Once people know where they stand and the children are back at school we may see a market shake itself off and begin to move forward. I'm not talking price rises – just activity! There are parts of northern England where 45% of the working population are employed in some way by government. Similarly large numbers of people in Cambridge are employed by the NHS at the Addenbrookes hospital complex and in teaching although they have reassured us that the NHS will not be as savagely attacked as some departments.
So we fight our way to the end of the year with the prospect of a VAT rise to 20% in January 2011. That debt has to be repaid you know! If the impact of this rise is as great as the previous governments tinkering by reducing to 15% then I doubt we have too much to concern ourselves with. Lets take an average (for this area) estate agency fee of £2,000. VAT at at 17.5% adds £350 and at 20% £400. Looking at it realistically would £50 stop this transaction?
Summing up I think VAT hikes are the least of our worries. Dismantling too much government employment and projects too quickly could cause us all some problems, not just those directly employed by the public sector.