Wither or Whither the UK Economy?
The budget has come and gone. The government has effectively given up on its original plan to remove the UK deficit in 5 years and will have added about £600BN of additional debt to that of the Brown era. Total debt stored up within the UK economy is c.£3TRN when you take everything into account.
Will doing more adjustment to regulation, trimming a tax here or there, wind up soft tax targets that you think you can extract more out of and still keep the electorate sweet; will all this solve the structural problems of the economy, or even get the conservative party/coalition re-elected?
Highly unlikely say the bookies (Labour currently 5/3 on favourites for being the largest party at the ext election.
Einstein made the comment that a definition of insanity is to keep doing the same tings and expecting a different outcome. This is effectively what is being done.
Apart from the current activity of inflating away the debt (and ignoring those people who have not been profligate and saved), the other thing that needs to be done is to earn more of our way in the world. great. The £ is low, and will go a lot lower: it is just a matter of when. That should help exports. Let’s hope we have things people wish to buy in enough quantity. let’s also hope that we don’t give all the economic benefit away by off-shoring, selling to foreign owners or encouraging entrepreneurs to leave the country because they are completely under valued in the UK.
How about some real intent? Why not pick 5 absolute stand-out areas where we have a real world class start and put real money into developing new sectors that will become tomorrow’s economic power-houses? How about £1BN/yr into each area for R&D, managed by business and linked to academia, well away from government administration – even though it is public money? Have the Head of each power house report directly to the Chancellor (and I mean directly. not via anyone else at all); link business R%D with academic R&D, and drive to commercialize. Areas for consideration:
- Nanotechnology
- A specific branch – Graphene
- ‘Bucky Balls’ and next generation chemistry including antibiotics
- Biomedical advances across all the NHS – make it into a real business (gets critical mass almost straight away)
- New energy based on gas deposits, then looped back to renewable energy specifically in wave/tidal (we do have a lot of it and its free
All thoughts welcome on the matter.
