While politicians and analysts debate the merits of Alistair Darling’s Budget, the collapse of one of Birmingham’s oldest manufacturers illustrates what the recession is all about.
Thomas Walker PLC has been in business in one form or another since 1867.
That means it has survived previous downturns and recessions. But it may not survive this one in anything like its present form, after going into administration.
It’s tempting to look around for someone to blame. There are the banks, for example, who declined to invest in the business once a rescue package had been developed.
One could also blame the Government, which has made so many promises about supporting industry. Perhaps it is symbolic that Thomas Walker called in administrators on the same day Mr Darling presented his Budget.
But the reality is that businesses are going to fail and jobs are going to be lost during this recession, whatever the Government does. The banks, meanwhile, will inevitably be cautious about who they lend to and following their recent experiences. What the collapse of Thomas Walker reminds us is that what matters during this recession is not the Chancellor’s predictions or reports by the IMF, but the effect on workers and businesses. It also demonstrates the interconnected nature of the economy. When one sector suffers, others are pulled along in its wake.
Thomas Walker was not a construction firm, but it suffered a major fall in demand due to the downturn in construction, which is, of course, linked to the failure of the property market. This is also an abject lesson in why politicians should be wary of talking about green shoots of recovery.
For a very large number of people, the recession has bought real misery and, unfortunately, there will be more closures to come.