Thursday, 28 March 2013


In the all the excitement of seeing the Union yesterday, I nearly missed the trade figures reported on yesterday.

When Britain lost it's triple A rating it was because of the fear of the country inability to pay down the deficit.

Yesterday saw really poor balance of payments figures for 2012. They show that the UK ran a deficit of £57bn last year compared with just £20bn in 2011.

It is the final piece in the total failure of George Osbourne's plan. This year the government has failed in deficit reduction. Now we are importing more goods than we export. This despite sterling being devalued by 20+%, this making exports cheaper and imports more expensive.

If the economy was booming it would be forgivable for sucking in imports, but as our economy is at best flat, he cannot use this as an excuse.

It is true that the country is not benefiting from investment banking as we once did, but one of George Osbourne hopes was that he would rebalance the economy, that hope has not materialised.

The fact that we cannot pay are way in the world should be deeply concerning for all of us, especially the government, as their strategy of rebalancing the economy has beached.

It is obvious to anyone that George Osbourne is not going to move to far from his plan, largely because he ideologically wedded to it.

The alternative to the government's plan must be based on a productive economy, income generating, this will require government to undertake a root and branch investigation into all government funding.

Money has to be used for productive purposes, there are huge opportunities in the new industries, in science and technology.

It is clear that commercial banks have failed to increase borrowing to the real economy, it has chosen to play the investment banking game at the roulette table of sub prime I O Us, rather than production, good wages and improved living standards.

The British disease of short termism in finance has to be tackled, we need Investment banks to fund business and fund new innovative industry, that invests in their employees to develop the supply side, it is a cultural change, after the failure of the last few years, will government and business except the challenge?

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