Despite the new restrictions being imposed to tackle the Omicron variant, it seems that we may be able to celebrate Christmas this year in circumstances approximating normality. Given that last year’s festivities were essentially cancelled — at least for those who actually stuck by the rules in place at the time — this could make it a double celebration for many of us in this yuletide season.
Christmas increasingly has a multitude of meanings — perhaps almost as many different meanings as the number of people celebrating it.
For many Christians who embrace this time of year as their most important religious ceremony, the pervasive commercialisation can be a matter of regret. In 2015 the Pope criticised the material aspects as indicating that we are a society “often intoxicated by consumerism . . . wealth and extravagance”.
Historically, some puritans have been known to shun any celebration of Christmas altogether, dubbing it “Fooltide”. The state of Massachusetts once even prohibited commemorating Christmas at all, with legislation which stipulated that “whosoever shall be found observing any such day as Christmas or the like, either by forbearing of labour, feasting, or any other way” would be liable to be fined approximately five shillings (or nearly £50 in today’s money).
If we put aside any spiritual debate about the true meaning of Christmas and instead seek to analyse the season in purely economic terms, the celebrations at this time of year still amount to something of a miracle. The accompanying boost to the economy could be just what we need to help the bounceback from 20 months of combating Covid-19. Whatever one’s particular religious beliefs, this is surely cause for some festive cheer.
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In the UK alone, more than £25 billion will be spent on gifts. Total retail sales, when all the partying, drinking and feasting is taken into account, are projected to amount to about £85 billion, about £5 billion higher than last year.
This will bring with it plenty of additional seasonal jobs, across a wide range of industries. Approximately 100,000 additional workers are being sought by employers this Christmas. Amazon has been seeking to recruit 20,000 seasonal employees and Tesco about 10,000. The majority of these workers will earn above the average hourly wage and many will also be eligible for generous bonuses.
The miracle of Christmas as an economic phenomenon can perhaps be best understood by looking at one jaw-dropping statistic. On average, over their entire lifetime, the typical British citizen will spend a total of £54,000 on celebrating Christmas.
Not only is this time of year a big part of much of our personal spending, it is also a significant time for many of our most successful businesses. Research from the United States found that a dozen companies in the S&P 500 have relied on the yuletide season for more than 30 per cent of their sales in the past five years. This includes 34 per cent for Amazon, 32 per cent for Facebook and 31 per cent for the toy giant Hasbro.
Sceptics will argue that a splurge in spending at this time of year is simply displacement activity. In a parallel universe in which Christmas doesn’t exist, they might speculate that the same total level of economic activity would occur — merely spread out over 12 months as a whole. But a better way to look at things might be to see the festive season as having the opposite economic impact of a lockdown. No doubt many people will overspend and be obliged to retrench in terms of their personal finances in the early months of the new year, but overall the shot in the arm of the festive period could act as a catalyst for the economic growth we want to see in 2022 and beyond when, surely, we can finally put the Covid catastrophe behind us.
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The economy is yet to recover to its pre-pandemic levels, with miserable statistics in October suggesting virtually no tick-up in GDP at all. The new restrictions associated with the government’s sudden lurch into plan B will also have a dampening effect on economic activity, in part due to the rules themselves but also because of the confidence-sapping uncertainty they signal.
It would be folly to imagine that an over-indulgence of turkey, mulled wine and mince pies is all we need to set the UK’s economy on to the right trajectory. Nevertheless, the next two weeks of buying, selling and celebrating might help to remind us of the miracle of modern consumer capitalism. We will need a big dose — both in order to make up the ground lost since March last year and to get the economy back on a path of consistent year-to-year economic growth.
Assuming the government resists its default instinct to impose still more restrictions on the economy, we should be able to look back on last Christmas as a miserable aberration and this year’s celebrations as the beginning of a return to normality, with the hope that each successive Christmas will see us becoming more prosperous.
Invention and ingenuity have contributed markedly to the economic miracle of the Christmas season. When gift-giving first became popularised, it would take at least two weeks to send a parcel from Britain to the United States and about a week to arrange a door-to-door delivery in Europe. Today, you can click a button and send a wrapped gift to America in about 72 hours, or to France in under 48 hours.
Millions of us will celebrate and commemorate Christmas in a multitude of different ways. Whether you are a churchgoer or not, in economic terms there is much to be glad about and grateful for. The uptick in spending and employment won’t revolutionise our economy in and of itself, but it might just provide the platform from which we can approach the new year in good cheer and with confidence that increased prosperity lies ahead.
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Mark Littlewood is director-general of the Institute of Economic Affairs. Twitter: @MarkJLittlewood
