Blogs

The costs of political uncertainty

As we write, the outcome of the general election remains uncertain but, as we outline in news this week, the trade has numerous demands stacking up for the incoming government, whatever its make-up.

The possibility of a hung parliament has grown steadily throughout the campaign, and in such a scenario, the Liberal Democrats would be pivotal. Last week we interviewed their leader, Nick Clegg, and he gave some clues as to his thinking on trade issues. He ruled out making school libraries compulsory but has pledged extra money to boost literacy teaching—and to give teachers more freedom to teach literacy as they see fit. Likewise, he argues that local councils should be given more freedom to manage their funds upwards or downwards across all their statutory responsibilites, thereby taking libraries out of the firing line they so often find themselves in. On support for publishers and independent bookshops he had similarly warm words, but, and in typical politician’s fashion, he was noticeably light on hard promises.

Clearly, trade concerns will come low down the agenda during the horse-trading that would ensue while any coalition government was stitched together. The best that could be hoped for would be that support for libel reform and amendments to the Digital Economy Act would make the cut. History provides pretty cold comfort: the last two periods of coalition government, the national governments of the 1930s and 1940s and the Lib-Lab pact of the 1970s, were hardly periods noted for state support of the book trade.

The other core issues the trade want any new government to focus on are: strengthened copyright protection; the removal of VAT from e-books; protection for small shops (either by changes in planning law or a cut in employer’s National Insurance or busines rates). The hard facts are that any change that will cost the government money, such as a VAT exemption, will be extremely hard to push through against a backdrop of deep public spending cuts.

The election campaign has been dominated by vague fears over those cuts, plus higher taxes, and the effect has been to confuse and unsettle book buyers—sales are down nearly 10% over the last four weeks. Purely from a book sales point of view, the sooner the election and the political uncertainty end the better.