Saturday, 5 September 2015

If anyone is listening?

My dad told me once "you have to earn a pound before you can spend it" and that was good advice.

In the recent General Election the real condition of our nations economy was not discussed, the Conservatives ruthlessly exploited English nationalism against Scottish nationalism, with sound bite economics, that does not actually relate to the real world, Labour never articulated the fundamental problem within our economy, instead concentrated on the NHS and an electoral strategy that was doomed to failure.

The fundamental truth is we as a nation are not productive enough.

On some measures, Britain is now around a fifth less productive per worker than the G7 average, and a jaw dropping 40 per cent below the US. 

It is clear that there are a number of factors that make low productivity, one being our dysfunctional banking system may have been both starving enterprise of finance; with immigration and government welfare policy there is a plentiful supply of cheap labour, with a short term mentality on investment companies would rather use (cheap) labour rather than technological advances.

This country does not fair well in spending as a proportion of the nations wealth on research and development compared with other advanced nations.

In a decade of low interest rates some businesses have undoubtedly use wage deflation to sustain their businesses, that has allowed many unsustainable businesses to continue trading with the employees being subsided by the tax payers in the form of tax credits or housing benefits.

Many businesses do not invest in staff training rather using unskilled labour, life long learning has disappeared from the government's vocabulary, with a welfare system forcing people into low pay low skill work.

As a nation we are not spending enough on research and development and scientific research, our businesses do not have access to finance to invest in cutting edge technology and products and our employees are not trained well enough and are not equipped for the modern economy how on earth are we to generate the income to pay for high quality public services? 

This is the challenge for our political elite and particular the new Labour leader, to advocate an economic strategy that is based on wealth creation, business leaders are naturally suspicious of Labour politicians, suspicious of government, yet it is public policy that drives finance and taxation, education and training that business need to develop their businesses.

This two way street of government and business also requires that business takes responsibility, if government provides a framework of investment banking helping the real economy, investing in colleges and training, and universal childcare, it is reasonable to expect business to pay good wages and help with social welfare of their employees, This calls for strategy to make a wage structure that people do not need state top up payments and business develop learning of their employees as a central aspect of their business.

Business leaders are keen to portray Labour as anti business, but the reality is without government support, business on its own cannot flourish

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