If proof were needed that the economy remains hesitant, the interim results of pub chain JD Wetherspoon last week made it clear that operators in some sectors are finding it tough. A modest 3% profit increase in the six months to mid-January may not sound too bad in the present circumstances, but operating margins were down by nearly 2%, which is the sort of thing that gives City analysts the jitters.
Weatherspoon chairman Tim Martin blamed the flat returns on outside influences, such as a rise in insurance premiums and excise duty on alcohol. Others in his position might also include increases in business rates and the growing burden of Government legislation. It's no joke that operators have become bogged down by official regulation. And there's more to come - the upcoming licensing law reforms, for example, and the proposed imposition of stamp duty on leasehold deals.
With the economy beginning to wobble, the Government should look carefully at the tangled web it is weaving. Ministerial intervention in a free-market economy is usually best avoided, but steps need to be taken to counter the "outside" pressure on companies. How about a moratorium on Value-Added Tax, relief on business rates, or a real attempt to reduce red tape? The spring Budget will be announced on 9 April - what an opportunity that would be to offer support to an industry struggling to stay on its feet.
If nothing is done, more companies like Wetherspoons will begin to see their margins squeezed, and recovery from a difficult winter will take even longer.
By Forbes Mutch