Sunak is not planning any business – he is planning the next elections | business


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For a chancellor who billed his budget as a moment to kickstart the UK’s economic rebirth after the pandemic, Rishi Sunak’s hour-long speech lacked substance.

Alcohol tax reform – which seemed to excite the abstinent Sunak enough to visit a brewery immediately after the speech – may help the beverage industry, but it distracted many business leaders too far. You were left in the dark about the overall strategy and the likely implementation of the measures.

The much-vaunted “leveling” agenda remains a largely unclear, if not confused, concept. The fresh pots of money that Sunak offered the councils to improve their main roads and the subway mayors to expand the local transport network could not hide the lack of concentration.

Looking back on the Tory conference in September, there were many fringe meetings discussing what kind of frameworks for investment in the regions ministers could adopt. Newly elected Conservative MPs from the northern constituencies were enthusiastic about the prospect of increasing local finances.

However, it appears that the Treasury Department, concerned about the huge sums of money required to make even a slight difference in parts of the UK that has been neglected for a century or more, is diverting some money from the South instead of Raising fresh capital – a strategy that could be described as leveling.

Ministers have also ignored calls for delegated powers to be strengthened to ensure investment is targeted to local business needs. As usual, grants and loans are administered tightly from the center.

An important part of leveling the country, according to most mayors, would be a high-speed rail network from London to Manchester and Leeds as the forerunner of a similar line that crosses the Pennines from Liverpool to Hull. Only the HS2 route from London to Birmingham is under construction. Rumors that the Birmingham to Leeds foothills are ahead of the game are undermining investments that could be made in the north. HS2 was not mentioned in the budget speech.

Sunak made a majority of the £ 7 billion in giveaways to business taxpayers and saved many small businesses and factory owners from a tax hike the next year. Companies welcomed the extent of the relief, yet waited for the Chancellor to tell them about a more fundamental tariff reform he had promised. It wasn’t imminent; there was no indication of when it might appear.

The fuel tax has been frozen and the passenger tax on domestic flights has been abolished. Many companies welcomed the moves, despite criticism from green groups, but waited for a clearer statement on carbon taxes and what the government thinks about who pays and why. That did not come about either.

For the economy to move into an era of low productivity, low wages and low growth, the Chancellor had to go beyond spending on new roads, nuclear power and soccer fields. Long term investments are key. The question is whether Sunak has a strategy for the economy – or just for the next elections.

A look at his “super deduction” tax relief when buying new machines is an example of this. It’s worth 130% of every pound spent and should increase investments from -2.5% this year to 15% in 2022, says the Bureau of Budgetary Responsibility. However, it predicts that corporate investment will then decrease to 4.7% in 2023 and -0.8% in 2024. This is the same scenario as that of George Osborne – the strict chancellor who has business support closely related to the electoral cycle and not to the needs of the sector.

As if to emphasize his closeness to Osborne, Sunak ended his speech with a promise that the backbencher of Tory would do everything possible to cut taxes before the next election. This is a recipe for stop-start economics, not the rebirth he promised.

Dealers pull out all the stops this Christmas

Christmas was more or less canceled last year, but retailers and brands are clearly hoping for a lot more in 2021 as they hit us with the highest ad spend ever. The turkeys and pigs in blankets may be in short supply, but since many middle-class families have saved thousands by working from home, a race is on to get them to open their piggy banks.

There is great hope that retail’s “golden quarter” will get more normal this year after companies cut ad spend and toned down their campaigns in 2020 in response to the pandemic. It looks different: last year stores in much of the UK were closed during the November lockdown, then shoppers in some major cities, including London, were prevented from visiting the main drag for part of December.

While the government appears determined to avoid further lockdowns, the number of visitors to the city centers remains lackluster. Last week’s budget wasn’t exactly the feel-good factor for many, while congested ports, inventory shortages and inflation are unlikely to boost buyer confidence.

Hitting the right note will be tricky for retailers and brands if they want to make sure they are not wasting their money. A major test of the water will be the launch of the John Lewis and Marks & Spencer seasonal advertising campaigns, which are expected to go live shortly.

After a major misfire with his latest home insurance ad this month, which was withdrawn following a warning from the Financial Regulator that it could be misleading, John Lewis will be under special scrutiny despite many years of successful cozy festive presentations.

At the end of another painful year, retailers will have to be more creative and thoughtful than ever to convince a nervous audience to part with their pounds.

Facebook’s metaverse will be for profit

Characters roam a digital world, using avatars to move and communicate, even when their bodies are physically far apart. Welcome to the metaverse.

This is the vision Facebook founder Mark Zuckerberg presented to the world on Thursday when he announced (through some strangely disturbing videos) that his social media holding company would be renamed Meta. But the concept will also sound familiar to the readers of Snow crash, the 1992 novel by Neal Stephenson, which coined the term “Metaverse” and popularized “Avatar” in a digital context. Stephenson’s foresight is so revered in technology circles that he served as an advisor to Jeff Bezos’ rocket company Blue Origin and as the chief futurist of a virtual reality company.

In many ways, digital extensions of ourselves should be embraced in a deeper metaverse. The potential for arts, entertainment and communication is obvious, and pandemic video calls have undoubtedly shown certain benefits, such as reducing polluting business travel.

But now that Stephenson’s fiction is getting closer to reality Snow crash makes uncomfortable read for anyone trying to understand the implications of Zuckerberg’s plan. It takes place in a violent America divided into hypercapitalist enclaves where religious zealots battle for control with deadly computer viruses. So far so good, given Facebook’s role in global political and cultural polarization.

Comparing it to Stephenson’s neon-lit world also reveals a striking omission in Meta’s launch videos: any mention of money or advertising. Facebook’s mission page says it aims to “bring the world closer together,” but the company’s driving force is the money it makes selling attention to advertisers. Virtual reality is exciting until virtual billboards sit on screens just an inch from your eyeballs.

The lesson from Facebook’s rise is that we must be wary of its early takeover. If Meta creates its own digital walled garden – where Facebook’s own lucrative services would likely be preferred – it should raise concerns among regulators who are already challenging the company over monopoly allegations.

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About Nina Snider

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