Urban myth has it that every London cabbie is the oracle of all knowledge. We are often asked on how the trade is going; bankers and fund managers it would seem regard us as a barometer of London’s business. Now I don’t for a moment think that after a short chat with a cabbie our customers take an option on, say Russian wheat or buy shares in Acme mousetraps, but the question is asked all the same.
[S]imilarly politicians want to test the water on their latest madcap proposals on cab drivers. Tony Benn famously asks of cabbies “What were you BEFORE you became cab driver?” the replies presumably are then entered into his famous daily diary.
The questions being asked are not to test our encyclopaedic knowledge, or to strike up a lasting friendship, but while sitting in a cab, or in many cabs, they have an opportunity to see what the public are thinking or how they are spending their money.
Economists define this as discretionary spend. The amount of an individual’s income that is left for spending, investing or saving after taxes and personal necessities have been paid. Discretionary income includes money spent on luxury items, vacations and non-essential goods and services and is usually measured in cash spent.
As sitting in the back of a cab or dining in a restaurant can be seen as an unnecessary expenditure they are a good indicator of a city’s wealth.
When the London 2012 Olympics were announced we were promised an unprecedented boost to the economy, but I have to report to our enquiring passengers the reality has been the reverse.
Since the opening ceremony cabbies takings have taken a nosedive. But before you dismiss this as yet another cabbie rant, consider this: our takings have almost halved, similarly restaurants in the West End, who have taken on extra staff for night time deliveries, have seen a sharp fall in covers, hotels are offering huge discounts and theatre audiences have seen a fall in numbers.
All of these are receivers of discretionary spend, spare money spent on luxuries.
Returning to the bankers and fund managers in the back of my cab, if they extrapolate from my answers the state of London’s economy then the capital’s finances in recent weeks has taken a nose dive.
The Games organisers will argue that many have taken their advice and stayed away from work – and they are correct. Even with the Olympic Lanes in force London’s roads are less congested than they have been in years.
With the Games set to last until mid-September, like the fund managers, I have to question how much this has cost the economy of London.
I might not be John Maynard Keynes but I do know that with Britain’s fragile economic state we can ill afford to have a stagnant London.