At first glance, the news was good – the bank is passing on the recent 1.5 per cent interest cut which our leaders hope will boost the flagging UK economy.

In effect, this amounts to the Ginns' household saving nearly £100 a month. But will this translate into our spending that much extra in the high street?

No way, said the wife, and she controls our spending.

Take our example, multiply it by tens of millions and therein lies the problem the country faces at the moment.

People will not resume their previous spending habits, predominantly because they lack confidence – and that poses a serious threat to the high street, the supply chains and the wider economy.

In my conversations with insolvency experts, I hear, with increasing regularity, that the retail sector is the next in line for the same carnage that has been wrought on the construction industry. Banks are waiting to foreclose on retailers in January, after they've had a final Christmas.

Meanwhile, retailers, their suppliers and the Government desperately hope that households will start spending again.

But in our home, and, I suspect, many others, we've stopped buying most things, bar the basics.

During the good times, when our disposable income was bigger and economic prosperity felt so much more certain, we'd often return from a shopping trip clutching bags containing goods that we didn't really need.

Of course, there are still things that we would like. But want is different from need. For the things that we really do need, we will shop around for the best price.

I'd love a new winter jacket – my old one is a little threadbare – but I am happy to bide my time until the price comes down, as I know it will.

Economists call this the bias-against-purchase effect. In the simplest terms, it means that cash registers will remain empty. And empty cash registers, ultimately, mean redundancies.



A FRIEND of mine works overseas for the British government, specialising in what the Foreign Office calls post-conflict reconstruction.

In one of our discussions, she explained how you go about rebuilding a country after a war has destroyed everything from the infrastructure to the democratic process.

The one thing you need before you can do anything else is security, she said. You cannot have free and fair elections without security. You cannot build new dams without security. You cannot have an independent Press without security. You cannot have foreign investment without security.

This principle underpins all the work we have done in countries like Kosovo and Sierra Leone.

A recent conversation reminded me of this discussion.

A successful businessman, with strong roots in Bradford, told me a disturbing story.

He suggested that there are areas in the city where insurers fear to tread.

That is, insurance companies will not offer insurance to some businesses in some areas because of the lack of law and order.

That is a security issue.

Of course, Pristina and Freetown are much more damaged and dangerous places. But if a businessman looking to invest in a certain postcode in Bradford cannot know with certainty that if he gets burgled he will be covered, why would he take the risk?

Another story reached me which raised the same question of security in our cities.

My cousin is an international student, who has come to Leeds to study. She and her friends live in halls of residence near to the city centre. They must pass through an estate to get to their lectures. And, she said, students are mugged nearly every day, sometimes violently.

Some have reported these crimes to the police, who tell them to avoid dark alleyways.

My cousin said that, after dusk, the main roads are not safe.

Socially and academically, I know she is having a good time in Leeds. It is, like Bradford, a great city.

But what overall message will my cousin take home to her affluent part of South-East Asia?

Our cities must be safe for everyone, whether to do business or to study. Which is why it is so vital that police focus on tackling real, quality-of-life crimes, rather than bureaucratic target-chasing.

Our reputation, nationally and internationally, is so important to our economy.

If people feel unsafe, they will not invest.