Digby Jones: UK must quit EU unless it radically reforms – Telegraph

Los Angeles

Los Angeles (Photo credits: http://www.roadtrafficsigns.com)

This article by the Telegraph makes controversial reading, citing the latest opinions from Digby Jones.

via Digby Jones: UK must quit EU unless it radically reforms – Telegraph.

Personally, I agree with Digby-Jones on two fundamental points.

Firstly, I agree that David Cameron is unlikely to negotiate significant concessions from European partners.

Secondly, I agree with the need for radical reform in the UK.

However, then I diverge from Digby-Jones and believe that the UK should remain part of Europe for strategic and economic reasons.

I am also unimpressed that Digby Jones was the former head of the lobby group, the Confederation of British Industry (CBI). Since 2008, many large corporations have sat on mountains of cash, rather than invest in new products, technologies and markets. Presumably, the CBI also represents many large companies who openly practice tax evasion.  The CBI is primarily interested in maximizing it’s members pre-tax profits, and is not necessarily concerned with the wider economic and social challenges in UK society; see John Gelmini’s blog on the wider implications of the Los Angeles Wal Mart protests.

The UK has already been marginalized within Europe by David Cameron’s bungling of pre-negotiations. Let’s hope that ahead of any UK referendum, the risks and opportunities will be properly debated. In my judgement, if the UK left the EU, there would be a high risk of an economic catastrophe, with far reaching social implications. Los Angeles and Wal Mart are not good examples for the UK.

Any thoughts?

Any thoughts?

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CBI doubles George Osborne’s economic growth forecast | Business | The Guardian

Stages of Economic Growth with savings and inv...

Stages of Economic Growth with savings and investment (Photo credit: Wikipedia)

Business

Business (Photo credits: http://www.roadtrafficsigns.com)

This “good news” story in the Guardian is a MUST READ. Check it out!

via CBI doubles George Osborne’s economic growth forecast | Business | The Guardian.

Whilst this story will help to revive George Osborne’s political capital, it still recognizes that there are risks to the UK economy.

The biggest risk, of course, is that the UK’s businesses are still not investing. Both John Gelmini and I have indicated many times on this blog that there is is an urgent need for fiscal stimulation to increase capital investment. Also concentrated Government action is required to focus on massively strengthening the export sector.

The consumer led growth is largely on the back of Government guarantees to home-buyers which is potentially both inflationary and inherently risky. Still there is a major risk that the banks are not working properly, preferring low risk home loans, rather than more complex loans to small businesses.

Let me turn this to three open questions about how should Chancellor George Osborne:

  1. Stimulate greater business growth?
  2. Expand both the breadth and depth of prudent bank financing?
  3. Start to heal the scars of austerity, especially in the non-property owning sectors of society?


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