In the Guardian, Katie Allen recommended ways Prime Minister Theresa May could ‘lift the UK economy’s post-Brexit’ blues – via:
- Tax cuts – especially VAT
- More infrastructure spending – traffic jams and delivery delays waste a huge amount of time, adding to unit costs and reducing national productivity
- Encouraging huge increases in housebuilding across the nation, prioritising brownfield sites and speeding up planning permission processes – thus increasing labour mobility to skilled workers more inclined to move to where needed
- Delaying the planned apprenticeship levy
- Boosting productivity via investment in innovation, education and infrastructure
- Reducing planned rises to the national living wage
- Dropping ‘helicopter money’ on all – echoing Ben Bernanke’s thoughts for the USA some years back
- Firming up many more trade deals
But this is mere tinkering at the edges when the whole economy is considered
On the demand side, Brexit may well cause short-term problems with our exports to our current biggest and closest customer, the EU, but the great majority of their member nations’ economies are going nowhere and have been doing so for many a year
Meanwhile, there are over 165 other nations out there, most with huge potential to grow or develop further – most are also keen for many of the more upmarket goods and services we produce
Currently, EU rules restrict what and how we can sell with the latter – worse, they protect EU companies by restricting many third-world nations from exporting what they’re good at to the EU which curtails both their development and productivity improvement within the EU – Brexit should remove such shackles on competition and trade for the UK
On the supply side, Allen ignores the huge one-off opportunity staring the UK in the face i.e. the scope to boost productivity and earnings simply by ensuring all organisations, large or small from public and private sectors, make a concerted effort to cut their waste and optimise their use of existing costly resources
At present, at least 80% of them waste at least 20% – for many, it’s over 50% – yet few realise they suffer this way!
This means the UK alone is wasting some £300 billion each and every year
Conclusion – It’s not sophisticated macro-economics needed to boost the UK economy – it’s good performance measures and then business common sense on both the demand and supply sides of the national productivity ratio