Are Britain's politicians ready to make tough decisions for growth?
How on earth do we grow? It’s a question we’re going to be hearing a lot of over the next couple of years. From politicians, economists, as well as businesses. It’s why the CBI hit the news on the issue of immigration this week – and why everyone should be worried that our politicians hit back so hard.?
We all know Britain is in the middle of stagflation – hit with rocketing inflation and negative growth. And it’s fair to say none of us know quite how to fight both at the same time.?
We’ve already seen – and felt – the consequences of trying to ignore inflation to get growth going. But ignore growth to get inflation down, and we’ll just get prolonged pain.
Last week the Prime Minister and Chancellor made some tough choices.
They needed to in order to achieve market stability – a precondition for growth.
But the Chancellor’s Autumn Statement didn’t give any new momentum to UK’s growth story. And in his speech at the CBI Annual Conference this week, the Prime Minister talked a good game on innovation. And yes, he’s started to lay out a vision. But we’re still not getting the details of the measures to achieve it.?
All the while, precious time is slipping away, as firms are deep in decision-making mode on their investments for the next 18 months.?
Instead the message that came across loud and clear from both Rishi Sunak – and Keir Starmer – was that immigration was a no-go. Why? Because it’s a political hot potato.?
Our politicians make anti-growth choices every day in pursuit of other political goals. And I respect that. But when we confront stagflation and its massive impact on the cost of living, it’s time to kick the tyres on those tricky political choices.?
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Because issues such as regulation, planning and trade, as well as immigration, can help unlock growth at a time when neither the government nor the Bank of England have any money to spend on growth. We need to be exploring these options, not just shutting down the conversation.?
And when we’ll all be paying for the government’s tough economic choices – they need to step up and take hard choices of their own.?
On immigration, we need to be honest.
We currently have more than 1 million vacancies in our businesses. We’ve lost hundreds of thousands of people from the workforce post Covid due to long-term health issues or caring responsibilities. And we now have an OBR report telling us that the only thing that’s moved the needle on growth this year is allowing in a bit more immigration.
Because our GDP comes down to two things: people and their productivity – and we don’t have the number of people we need or the productivity.?
So we need to be practical. We need to look at what we now have in our control.?
Let’s have economic migration for the roles and sectors where we aren’t going to get the people and skills at home anytime soon – and let the Migration Advisory Committee take that call. And then let’s work together – business and government and?the education sector?– to recalibrate, to fix the long-term problems, and agree a skills policy that delivers for everyone in the medium term.?
We all need to play our part when it comes to answering the question of growth.
At the CBI Annual Conference, it was clear that businesses have the appetite and ideas to find it. And it will be no surprise that investing in skills and focusing on employees was right at the top of the list.??
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1 年We might get somewhere when we start asking the right questions and then demanding well-considered answers. Still, we are generally too willing to accept drab partisan pre-contrived answers from politico's just trying to stay in power. We need individuals and businesses unencumbered by political bias to drive us forward
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1 年I completely agree. However, unfortunately it's worse than that... Even on innovation the UK lags seriously behind. Excluded from the EU Horizon/EIC programs, no alternate funding systems in place for innovations in development, a broken grant based funding mechanism where large companies and those willing (able) to pay professional grant writers (upfront with a major back end success fee increasing the match funding problem) that's administered in an at best incompetent (and in our experience dishonest) way, and no integrated opportunity/value based planning for growth. Take our innovation as an example, the policy failings have meant that the UK has missed out on ￡7bn in growth (and trade deficit) because of not creating the environment where it could even be considered by the market - and that's despite repeated direct feedback showing government how the policy creates these barriers, and how they act as barriers.
Thanks for that insightful analysis Tony Danker which reveals that People and Productivity Solutions are the ways forward for the Stagflation thats on the cards for the British Economy. Both of these issues are years if not decades in the making and the results of lack of Upstream Pro-active Visionary leadership in favour of Downstream firefighting short-termism. Its telling that out of the 5.7 odd million SMEs in the UK today only about 2% - around 34,000 scale. To have an idea of Impact: those 34,000 odd contribute around half i.e. ￡1 Trillion of the ￡ 2 Trillion odd of the total SME contribution to the economy . Employee Engagement percentages have also plummeted to one of the lowest levels in Europe with just around 9% of UK workers feeling enthused by their work and workplace today according to a recent HR director Survey. Engagement levels have been among the lowest for decades . The dial needs to be moved on all of these to get better societal outcomes for Britain by the co-operation of Leaders in Business , Government and Academia with Business taking the Lead.....