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Wednesday, September 05, 2012

James Winfield's Plan To Grow The UK Economy

Time to move my efforts away from trying to improve the nightlife of Reading, and to something much easier - fixing the UK economy.

I have talked many times in the past about why the economy has been through such a rough time since 2008 and pointed out who I blame.  And I admit that I am surprised about the double-dip recession, and especially the third quarter's dip of 0.5%.  This is the worst economic crisis that we have had for over 100 years, in my opinion.  Our government debt will continue to rise until 2017 if, and only if, the economy recovers and the much larger spending cuts and tax rises are implemented (you ain't seen nothing yet).

So I am going to suggest how to fix the economy.

I'm not going to pretend that this is an exhaustive list, nor do I claim to expect that every single measure would be an unqualified success.

1. The government might be close to bankruptcy but it can borrow at next to zero rates.  There is a big crisis in housing especially in the south-east.  We need houses, lots of them, and to be build at the fastest rate since just after the Second World War.  But yet we are hardly building any.  Therefore my strongest recommendation is to build huge amounts of houses, including on the green belt.  Sorry, but some of the green belt can be sacrificed - I think to extend London by 1 mile all around removes about 2% of the green belt which is nothing.  Yes, I am a Tory and I am proposing a huge building of council houses (which should also be available for sale at market prices).

2. Companies that export need to have their websites translates accurately into languages such as Russian, Chinese, Arabic and Portuguese.  I do not have a grasp of the proportion of websites that currently do, but most company websites that I go on, that are UK based, are in English and English only.  A few do Spanish and German.  Why are we so arrogant to think that everyone speaks English?  I take for example steel, the first thing that comes into my head.  The first website on my Google search for exporting steel - English only.

3. Reduce, or preferably scrap the minimum wage.  I believe that this is a block towards the dream of full employment.  The minimum wage increases far quicker than inflation and has done since it was introduced.  Whilst in places like London or Reading, a company probably couldn't employ someone for less than the current minimum wage - in depressed places such as Hull, many unemployed people would work for far less than minimum wage.  Perhaps as a slightly less contentious idea, it could instead be rebalanced regionally according to local housing costs.

4. The government is doing one big thing right in investing in the railways.  Much more could, and should be done with infrastructure.  I have mentioned housing as the most important, however new railways, electrification of lines, new roads (possibly toll roads), widening motorways, etc will all be helpful to the economy.  I know quite a bit is planned, but that must be brought forward where possibly.  Also very important is new power generation. 

5. On that subject, we need to solve this ridiculous 4xinflation energy price increases.  We need cheap energy.  This means gas and coal.  Firstly, Germany, that hallowed place of environmentalism is now investing back into cheap coal.  We are we not doing this?  Secondly, fracking.  A few vaguely noticeable earth tremors near Blackpool should not stop us developing fracking - this would also be a source of energy security for many years.  Recently America has become a net exporter of energy.  Bet you didn't see that coming before the Iraq War.  This is because of fracking, and they have around 200 years of gas now.  Fracking can be done safely and should be given licenses to companies  asap.

6. Also with regards to infrastructure, we need much more airport capacity.  Stop arguing over whether Heathrow, Standsted or Gatwick should be expanded or whether Boris Island should be built, grow some balls and start building them all.  A new runway at Heathrow immediately, a new runway at Stansted and a whole new airport.  Oh and whilst we are on the matter, scrap that environmental tax on flights.

7. Sort out the Euro zone.  OK, this is something that the UK government cannot do, as Europe itself makes more of a mess every time it meets.  The mess in Europe really is having a knock-on effect.  They need to either scrap the Euro or become Europe politically, ie one country.

8. Increase pension age.  NOW!  I think something like roughly 50% of the work and pensions budget, I cannot remember the actual figure, is spent on the state pension.  I do not propose lowering it, however the bill for pensions is only going to get higher, it costs much more than housing benefit and unemployment benefit put together.  The older generation (who remember have done very well financially) should be working longer.  We should be increasing the pension age to 70.

9. Now for my most contentious idea - privatise the NHS.  This is kind of a last resort, but if we do not pull ourselves out of recession, it may become necessary.  If ever we had to call in the IMF to help us pay the bills, I would expect them to make us do this.  It is a huge part of our expenditure, and private companies would be willing to invest as we do collectively spend a lot of money on healthcare.  Of course we would still have to supply healthcare for those who do not have the means to pay for it.  And we should look more carefully at what we are spending our money on in the NHS - are all current treatments that are offered, affordable without sending the country bankrupt?  I would prefer not to privatise it, but I think it needs discussion as it may be necessary one day.

10. Investment in technology.  It may seem now that we have reached a plateau of growth and that we cannot go any further, but future technological break-throughs will deliver more growth and potentially quite rapidly, especially if we are to master such very useful technologies as renewable energy and 3D printing.  I am not one to argue for governments to do this, however they should make every effort to encourage the growth of such industries, including tax breaks.

11. Encourage electric cars.  Again, I would like to see tax breaks for those driving electric cars.

12. Invest further in apprenteships, though I have to say the government is doing far better on this than previous governments.

That will do for now.