The publicans
Bob Cooper, 58, and his wife Joan, 49, bought the Craufurd Arms pub four and a
half years ago for £36,000 having moved from Slough to Maidenhead and left
the motor trade in search of a “better social life”. Business has been
almost halved in the downturn.
“It has backfired and cost us a lot of money,” Mr Cooper explained. “Business
is pretty poor. I would say it’s down about 40 per cent since last year,
what with the credit crunch and the smoking ban too.
“The price of beer has caused us grief. No one ever thought they’d be paying
£3 a pint.” The three customers at the bar nod in agreement.
“I don’t know how much longer we can last. If the recession bites any more, we
are in big trouble. My wife still worked full-time in the motor trade, but
she has just been made redundant. It’s breadline for us now. I can’t see
much future for us in the present climate, and I just can’t understand how
it has got so bad.”
The couple’s three daughters have grown up and left home, but Christmas will
still be harder than in the past. “It’s tough on the whole,” Mrs Cooper
said. “We’re looking at a quiet Christmas.”
Verdict “The VAT won’t make a lot of difference to anybody really. It
all helps, but it’s not fantastic. Alcohol going up is a bad thing for us,
and it will make it a very tight squeeze. Trying to make a living in this
business is hard. I think that the alcohol prices have already gone too
far.”
The shopowner
Ricky Woodley, 48, owns JFC Auto Recycling at the top of the hill, trading in
used car parts and fitting them in the garage next door. In the four years
since he set up shop in Maidenhead after moving from Slough, Mr Woodley has
never had things so bad.
“Business is s***. It’s going bad. This is the worst it’s been in four years –
I’m getting a lot less income and have to put in the same expenditure. My
profit doesn’t exist. It’ll be swallowed up. It’s just a case of trying to
survive.”
Mr Woodley has had to take on fewer casual workers and do more of the work
himself. He blames the collapse of the car trade for the slump in business,
which will affect his Christmas with his wife and his son Simeon, 21.
“We’re cutting back on snacks and luxury goods, and we don’t go out to
restaurants any more. Christmas will be slow this year. I very rarely buy
presents, but most of my kids are grown up now. I feel sorry for people with
youngsters.”
He is sceptical that the Government will make things better for people like
him. “We need lower rates, we need help. Take the business rates off. The
Government has got to take direct action to help small businesses: treat it
like a war. Freeze all rates for six months; give us something to buy
equipment and stock. I can’t lower prices any more or we may as well be
paying customers to take stock away.”
Verdict “The people transporting the goods are going to put the price
up because of the petrol increase, which cancels out the VAT saving. Darling
should have taken drastic action. It will make no difference to my
Christmas. He should have done more to cut business rates.”
The housewife
Alison Bird, 48, and her husband Tim, also 48, bought their seven-bedroom
house for £720,000 two years ago “in the boom market”. She stays at home and
looks after their three children, aged 11, 9, 6, while her husband is a
geophysicist at an oil company.
“We’re really feeling it,” she says. “The house just eats money.” Fuel bills
are up “hugely” despite the installation of a more efficient boiler at a
cost of £3,000.
The couple are about to come off a fixed 5 per cent mortgage deal and Mrs Bird
worries about how they will afford a higher rate. “I went to the bank and
they advised an interest-only mortgage until we can afford to repay.”
The children all attend good local state schools, but Mrs Bird said that her
middle child, who suffers from dyslexia, would benefit from the attention of
a private school. “If things were easier we would pay for it, but we’re not
in a position to.” She is considering taking her elder daughter out of drama
classes to pay for a tutor.
Mrs Bird says she has changed her spending habits significantly. “We didn’t
have a summer holiday this year,” she says. “I used to be able to meet
friends for lunch – I didn’t think about it.” Not any more. “I think twice
before I get in the car.” She now buys her clothes in Sainsbury’s and “will
be buying a lot of Christmas presents in charity shops”. “The children want
a Nintedo Wii but we can’t afford to buy one.”
Although she believes that her husband’s job is safe, she is worried about
next year and says that many people she knows are in a similar position. “In
my daughter’s class, two children from St Piran’s [an independent school]
came to look round. When she started, four children in her year went the
other way,” she said.
Verdict “I can’t see that all that borrowing is a good thing. All
you’re doing is storing up problems for the future. Is the VAT reduction
really going to make people rush out and spend money just before Christmas?
I don’t think so.”
The managing director
Reno Macri, 38, started his graphics business, Enigma Visual Solutions, at the
height of the last recession in 1991: it now employs 22 people and has a
turnover of £3.5 million a year. Mr Macri is upbeat about the opportunities
that recession will bring. “I’ve got people around me who are skilled and
I’m in a better position than 20 years ago.”
Business is down 30 per cent on this time last year. The cost of materials has
gone up, two clients recently went bust owing him £40,000 and he has
cancelled his plans to buy a BMW. But Mr Macri is brimming with optimism. “I
see potential out there.”
Since the downturn began to bite in September, he decided that the only way to
counter it was to target actively the companies that he wants to work with.
He says that the approach has paid off. “If you’re taking it to them, you’re
fine,” he says. “We go and see people the same day, react quickest. Just by
changing the attitude in here, the phones are ringing more.”
Although he has had to make two workers redundant, he is committed to his
remaining staff. “They know the boss will stand by them and they have to
stand by me,” he said. “We are working harder. The amount of effort to break
even now would have doubled our turnover a year and a half ago.” Mr Macri
relishes the challenge of pulling together. “There’s time for golf later on.”
Mr Macri, who is married with a young son and daughter, says that his family
has “tightened up a bit” on spending. “I was due to get a new car, a BMW
X60. But the money is all going back in the company.”
He has made one other change to his routine. “I’ve taken up boxing to get rid
of my frustration – I take it out in the ring. I feel great, and much more
confident.”
Verdict “Anything that is going to stimulate consumer spending is a
good thing, but whether VAT has gone far enough I don’t know. I think the
stimulus package is positive and will help bring back some feelgood factor.
It’s a welcome change to have some positivity. You have to be a little bit
daring. But I’m wary about the amount of debt the country’s getting into.”
The solicitor
Michael Cutler, 55, is senior partner at Colemans Solicitors, which employs 26
people, and says that his pattern of business has shifted dramatically.
“Residential conveyancing has almost ceased to exist,” he said. “People
can’t get mortgage finance, and then there are continually falling prices.
Far fewer commercial properties are changing hands.”
Mr Cutler has noticed a “marked rise” in litigation and divorces. “Litigation
always increases as you go into recession. Everyone starts collecting their
debts, enforcing contracts or trying to wriggle out of contracts they don’t
like.”
Mr Cutler believes that the firm is diversified enough to avoid the abyss
facing smaller firms that have specialised in property. “We’re set to make
it through, albeit suffering.”
Verdict “Two things are crucial. One is continuing the flow of finance
for small business. Alistair Darling has made the right noises. We’ll see
how it works in practice. The other crucial thing is restoring people’s
confidence so they can go out and spend. I can’t see that’s going to be
changed.”
The vicar
Mark Balfour, 42, became vicar at St Peter’s Church two and a half years ago
and has noticed rising anxiety among his congregation. “The main area of
pressure is in members of the congregation who are self-employed or in
training,” he said. The church is still growing, however, and he said that
“people’s giving doesn’t seem to have gone down”. Although the parish
investments have lost value, Dr Balfour is going ahead with a building
project to develop the church site. “If He wants us to do it, we trust the
resources will come.”
The church is investigating practical ways of helping people through hard
times, including classes on financial management. “It’s hard for people to
talk about debt. It’s a bigger taboo than sex.”
Dr Balfour will also be encouraging people to consider their relationship with
God and “understand where real security lies” during times of worry.
Verdict “Our concern is that anything which encourages people to spend
more will increase the debt culture. We see the damage that living beyond
your means brings. Encouragement to spend more in the high street is not
helpful in that sense.”
The independent school
St Piran’s independent preparatory school sits halfway up the road, and has
350 students aged between 2½ and 13. Fees are between £950 and £3,250 per
term.
Jonathan Carroll, 46, the headmaster, expects cutbacks in spending and a
decline in numbers if a recession hits parents.
“We’re anticipating a change over the next ten months. Potentially there could
be a lower interest in the school, with some parents withdrawing their
children. But there will be a delay factor. Parents will only compromise
education as a last resort.
“Heating and lighting costs have increased in the past few months. We’ll cut
back first on luxury bits and pieces and won’t spend vast amounts of money
on updating the latest PCs or changing the uniform or getting a new
scrimmage machine for the playing field. The education itself won’t be
affected.”
About 60 per cent of the pupils come from families where both parents work,
and 80 per cent of the fees come from salaried parents, so redundancies
could yet cause parents to look to the nearby state schools as an affordable
alternative.
Verdict “In terms of VAT it will make very little difference to us. It
won’t affect our income – we don’t charge VAT on anything – but it will be
pleasing to see our costs reduced. The extra tax on higher earners might
have an effect on people paying school fees and considering independent
education. From a moral point of view, the rates increase on alcohol and
tobacco is a good thing. But the Chancellor is giving with one hand and
taking back with the other.”
The state school
As the Government pledges to maintain and even increase public spending, the
1,100 students at Furze Platt Senior School could stand to gain from the
next Budget.
Lesley Peat, 52, its business manager, said: “At the moment it’s not really
affecting us. We are given our budget in April, and all our big projects
were done in summer . . . at agreed prices. As for food prices, we have
outside caterers on preagreed contracts, and we had already budgeted for
increasing fuel prices.
“Most of our budget goes on staff, but it might get easier to recruit staff
because people are turning to teaching as a more secure job at the moment.
While there are children to teach, you need teachers.”
The school has also taken on students who can no longer afford independent
school fees. The downturn could also affect university applications, Ms Peat
said.
“Applications are not down, but who knows what effect parents’ salaries could
have, as parents still supplement student loans. People might think twice
about university if a lot of jobs go in January.”
State schools are pressed to make year-on-year savings, and this year
especially. Furze Platt Senior School is lowering the priority given to
refurbishment projects on its 1960s buildings, which have gone to the
“bottom of the list”.
Verdict The increase in income tax on high-earners could force more
parents to turn to Furze Platt Senior School, which is already
oversubscribed, instead of nearby independent schools. Costs on preagreed
contracts will remain the same. The pledge to move capital spending forward
can only benefit state schools like Furze Platt.
The café owner Roberto Palmieri, 43, has experienced two
recessions since he came to Britain 20 years ago, and this is by far the
worst. He runs Palmieri’s delicatessen near the top of the hill, where
business is down 10 per cent on last year because of redundancies that have
hit customers from the nearby industrial estate.
“The crisis has hit the working class and families. A couple earning £15,000
with kids at school can’t afford any more to buy baguettes, paninis and
coffees. Even the ones with more money are becoming more conservative.”
His business, which turns over £250,000, is only two years old and so, he
believes, still has room for growth to compensate for the downturn. Costs
are rising, however, with the price of the semolina that Roberto uses to
make fresh pasta rising from £11 for 25kg to £18.
With his two brothers and sister-in-law, he works 70 to 80 hours per week to
make just enough profit to keep the business afloat.
“It’s not going to be a fantastic Christmas for everybody. We are always
fighting every day to see where we can cut back. If we can survive another
year, I think that we are on a good path.”
Verdict “I don’t think it will make any difference to me or to anybody.
How much will families be saving out of this? Will families be going out to
spend the little they will be saving? This is not going to move the economy.
It’s going to make it worse for me, because I can claim VAT back, but I’ll
now have to pay more petrol tax on my van.”
The pensioner
Vilma Orso, 73, has lived in Maidenhead since before the war. She lives in
sheltered accommodation at the bottom of the hill and receives a state
pension of about £200 per month. Despite the downturn, she is relaxed about
her finances. “You give up worrying in the end, don’t you? I don’t know how
the crunch has affected my savings – I’m standing by, letting it go and
hoping for the best. I only buy what I need.”
Although Ms Orso made a resolution to spend less this Christmas, she is
finding it hard to keep to that promise when she has four children and eight
grandchildren to pamper. “Christmas is always a worry, but it would be
horrible to cut back.”
She is sceptical about anything she hears from politicians, including the
PreBudget Report. “They can’t tell us the truth, as we would panic.
“So, I’m just careful. What I do think is worrying, at my stage of life, is
how I would survive if my money were to run out today. I find that quite
frightening. In terms of the future, financially, I dread to think. I live
in the now.”
Verdict “I don’t honestly think that that small cut in VAT will make a
big difference to most of us, unless we make large purchases, and it won’t
affect the food bill. It make sense to tax the rich, but that won’t make
much difference to my Christmas, which would have been sparse anyway. But
the Chancellor has done all he really can. I don’t think he’s done badly.”
