The media might have it that the recession is in a fairly static state while everyone waits for politics to sort themselves out. Unfortunately, it's not like that.
Large businesses are still falling, even more small business are falling, and now medium sized businesses are starting to fall. Medium size businesses are usually the most resilient in recessions: some fall at the beginning of a recession, but, largely, they're OK. But, now, that changes: medium sized businesses are starting to fall regularly.
Large businesses form about 1% of the business population - if one falls, that's huge, no doubt. And it's amazing the amount of political wrangling that goes on to save them. Particularly so, since they're the least worth saving - they contribute the least amount of tax to the economy. And it's even more amazing, after all the recessions that have come and gone, how politicians seem to bumble around trying to save these huge businesses. They don't look good.
Small businesses are, of course, the most vulnerable in recessions. They can't afford variations in their cash flow. A 1% change in revenue can translate into 10% of margins. You would think that politicians would do something to make them safer.
But the casualties in medium sized businesses are the big surprise. To date, and by now, they would normally have stabled out, having got a clear picture of what's coming and positioned themselves to cope. We've stopped hearing the phrase "we'll be alright", as every business loses confidence in the mid-term future.
But with 400% tax rises since Labour came to power, it really is no wonder that businesses are struggling to survive. Not only do they have to cut costs to the bone, keep staff capable of paying debt, but, because of tax, they have to survive with margins being thrashed too. The reduction in interest rates, though welcome of course, really is a fop: tax reductions could have achieved so much more.
But, for us, the more worrying picture is the sight of the government trying to save 5,000 jobs in one company: don’t get us wrong, they should. But too little is being done to help the hundreds of thousands working for small businesses from losing their jobs.