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Devil's Advocate

Roger Elwell - Yes Please

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The 'Yes Buts' Are Ignored Again At Our Peril

25 November 2008  |  3030 views  |  0

Why is the the contrary view so devalued these days?  In years gone past, savvy managers would ask people (the 'yes buts', or Devil's Advocates) to think about the downsides of any proposed course of action, not necessarily to stop an initiative in its tracks but to tease out the wrinkles, analyse them and improve the initiative before launching.  These days, the 'can do' philosophy does not allow for such analysis, and we are all the worse off for that.

I fear that, in the package of financial measures that have just been announced, once again the 'yes buts' have either been ignored or not even invited into the decision-making process.  For example, why did nobody point out to the Chancellor that one of the by-products of the decisions on petrol and diesel (reducing VAT but raising duty) would be to increase the costs of distributing goods around the country?  Was this pointed out and ignored, or was there nobody around who could think through such ramifications?  Does the Chancellor expect that the haulage companies, already facing tough economic decisions, will absorb this cost rather than pass it on - or indeed that, somewhere in the supply chain, that cost will be absorbed?  If they don't how much of the VAT reduction that is not absorbed by the retailers actually be cancelled out by the fuel duty rise?

The reason for this cost increase is that, whilst haulage companies can claim back the VAT, and therefore the reduction in VAT on diesel would have been neutral for them, they cannot claim back fuel duty.  By cancelling out the VAT reduction with a rise in fuel duty, therefore, the Chancellor has raised the level of a significant portion of haulage companies' costs.  This should have been foreseen by those making the policy - or at least they should have employed some people to look at what they were proposing and come up with any 'unintended consequences' such as this.

There are probably lots of other examples of 'unintended consequences (which are never anything of the sort - just a lack of proper thorough analysis) in the measures that have been put together - not least whether they had people sitting down constructing scenarios that show what condition the finances of a range of real people are currently like, and therefore what the measures might do to help or hinder.

There have been other measures in the recent past (VED, 10p tax) where there has clearly been little or no analysis of the pluses and minuses - otherwise these measures wouldn't have been announced and subsequently changed.

In the face of such evidence of a lack of proper analysis, why should we believe any of the forecasts, or have faith that any of the measures will really work?

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location Colchester
member since 2008
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Consulting to the financial services industry with a specific expertise in the cards business - issuing and acquiring.

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