The future: Great Britain or Little England? | The Economist

Twickenham United Kingdom

Twickenham United Kingdom (Photo credit: @Doug88888)

This is a brilliant, MUST READ article from the Economist. Check it out!

via The future: Great Britain or Little England? | The Economist.

Personally, I identify with much of the Economist’s argument. However, I should like to make a couple of key observations.

Firstly, the high level of state spending at the end of the last Labour Government was partially because of the state bailout of UK banks following the 2008 financial crash. Had the Coalition Government embraced more Keynesian type interventions to stimulate growth, like in the US, then the UK might now be experiencing US level growth; instead, UK growth is lack lustre on the back of property inflation stimulated by Government guarantee of property loans to first time home buyers.

Secondly, if government guarantees as contingent liabilities are considered, then the Coalition’s record on bringing down the size of state spending is not so rosy.

Thirdly, the quality of the cuts has been largely criticized by mainstream economists and the IMF. The Coalition Government has used the bacon-slicer approach to public spending. This approach is inherently not strategic and has been responsible for the widespread loss of public services, especially in relation to their quality. Although budgets for education and health have been maintained because of ineffective reforms, the quality of services has still deteriorated substantially. Look at the example of Universal Credits.

Fourthly, I believe that UK foreign policy has become more isolationist largely because of policy blunders by Prime Minister, David Cameron, not sticking to his script. Look how the UK has suffered in relations with China, compared to say the US, Russia, Germany, France and Italy. Had the UK tried to stay at the center of Europe, then perhaps the UK could have provided a counter to aggressive austerity coming from the European Commission; sadly, George Osborne has been cheer-leading for largely iealogical reasons, rather than carefully structured, evidence-based policy.

However, I agree with the Economist on keeping the UK open to immigration to protect economic growth. I also strongly agree that the UK should be internationalist and a pivotal part of the EU. Finally, I passionately believe in protecting Great Britain; it would be interesting though to explore devolving power to great cities like London or Manchester.

Any thoughts?

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3 responses

  1. Pingback: The French increasingly think Europe is the problem, not the solution-Charlemagne: Désillusion | The Economist « Dr Alf's Blog

  2. Normally I would accept most of Dr Alf’s analysis but on this occasion I have to partially part company with him and the Economist.

    The high levels of State spending under the last UK Labour Government were indeed made higher by the bailout to bankers but they were also made too high by too many Civil Servants, too many councils, too many Quangos, too many people in non-jobs, too many people in the NHS (a 225% increase in NHS managers), foreign wars which were illegal and unnecessary (Iraq 1 and Iraq 2), too many constabularies, too many fire commands and too much waste, malfeasance and corruption in Government Departments, councils, procurement and defense programs.

    This does not address the running sore of the Barnett Formula, EC budget contributions which give us nothing or the fact that the Europe has not created a single net new job in 30 years.

    This has continued under the Coalition, so to my mind both are equally culpable.

    Dr Alf seems to think that with more Keynesian stimulus, the UK would be enjoying faster rates of growth more akin to the US.

    This is fanciful because to get US levels of growth you need:

    –Greater worker productivity (theirs is the best in the world; ours is a disgrace, we are 16% below the average for the G7)

    –A tax system that encourages inward investment into the real economy

    –A risk taking culture, capable of producing Facebook, Linked-In, Google, Microsoft, Twitter.

    VCs in America, in Palo Alto and Boston, via MIT finance 5 times as many start-ups in proportion to industry size as their UK counterparts—There is simply no comparison

    –Food and Energy self sufficiency (America has both, whereas we import 80% of our food, allow farmers to go bankrupt and commit suicide and have just 4% spare generating capacity and a rising population)

    –A “can-do ” attitude in the UK population, rather than a sense of aggressive entitlement about rights and entitlement to rule and have most of the money based on factors other than merit

    Austerity has been used as an excuse to cut public services, when I know from my own work in the sector that with re-organisation, de-recognition of the Trades Unions, shared service centers and restructuring, backed by rigorous commercial disciplines, you could get rid of 2/3rds of local authority workers, and with Lean/EFQM and a performance led culture improve public services and get the trains to run on time.

    Singapore is living proof of what can be done in this area and they through Temasek are hardly non internationalist.

    They restrict immigration, enforce the law, mind their own business and are poised within 2 more years to overtake both the City of London and New York as global financial centers.

    The UK is a small overcrowded island, with poor infrastructure and a housing shortage of 10.5 million dwellings which is getting worse because we only build 83,000 houses a year and lack the skilled construction workers to build more.

    We also seem unable to embrace systems building via ICF or Hof Haus and local authority planning departments act as an expensive block to real progress.

    To allow further unfettered immigration to boost economic growth ignores where you put these people and the effect on roads, schools and infrastructure which is inadequate and which Druids and others in the decision making process oppose.

    Contrary to Dr Alf’s and the Economist’s remedy, we must stop all non-essential immigration immediately and start taking crash measures to improve UK productivity and shaking people out of their torpor.
    It will also mean physically moving and up-skilling the long term unemployed in large numbers, not on make-work projects but on real work where they build systems manufactured houses and do essential work to bring our infrastructure up to speed.

    What is left of the British Army, after the cuts, and the expanded TA, need to be placed in charge of this operation, with the rest turned into teachers who can bring the sink schoolchildren up to speed whilst the rest should be outsourced under strict controls to people like Nord Anglia.

    We need a navy capable of defending our coast and sea lanes, an air-force, drones and a small nimble army supplemented by fighting and storming robots.

    Our present forces are too few and too thinly stretched to take on major international engagements so “punching above our weight” is frankly a luxury we cannot afford.

    The rest of the population, who are working, need to be made to face reality which means more work and fewer holidays starting with a reduction to 4 weeks which will only be increased when it is affordable and when collective productivity rises.

    We need to become energy self sufficient which means frack and frack now and build nuclear power stations not apply crippling green taxes,impoverish our people.

    The choice is not between “Little England” and Europe, it is a choice between being an attractive tax haven with useful and enterprising people which minds its own business but trades globally and a country living in the past and in denial which is grossly overpopulated with too many economically useless people, not enough houses and is part of a failed experiment to reconstitute the “Holy Roman Empire”

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