Lester



Here is the next problem or bunch of problems for you -



Youth unemployment has been on a steady straight line upwards graph for decade upon decade, despite considerable HMG investment to try a ameliorate that



Productivity has been on a steady straight line graph downwards since the 60's



SMEs have been on a downward trend, bearing in mind SMEs are the crucible potential growth. SMEs have been squeezed by the economies of scale favouring corporates, takeover and assimilation into corporates. Corporate M&A is principally platform engineering aka cost (staff) cutting



Overseas buyers have been buying UK listed companies because of the voting rights being single class. The US more sensibly has two class share ownership. 1 vote per public share, 10 votes per share for founders. The result is UK corporates are more vulnerable to takeover than US ones. These takeovers frequently give the outcome of activity being moved lock stock and barrel out of the country. This seems to be well regarded by guvnt



The UK has lead in deindustrialisation but similar trends are developing in Europe, for example Italy and France have both deindustrialised by about 10% since the Gt Recession. This is almost certainly due to globalisation aka expanding the available labour to pull costs down for corporates via supply and demand. Western economies cannot respond to this with circa 40% total tax take versus circa 10% tax take in the East



As a general outcome recovery from recession usually has jobless content aka automation. AI coming on line is only going to amplify this



When an industrial sector collapse for every major employer job that goes another 10 go from suppliers and the local network



New activity tends to huddle in locations as networks grows, it is geographically based. For this reason the Northern Powerhouse idea is fraught with problems because there is little local network, little effective infrastructure and whatever Jim O'Neil wants to say linear layouts are not the same as nuclear layouts.



Ever since Thatcher stuffed her cabinet full of property developers and moved to right to buy - both measures de facto to induce debt into the economy, debt being directly related to economic activity aka growth - investment has been misallocated. To the benefit of the banks and HMG in terms of revenue



The only way to address these sort of problems is to make Sterling cheaper (which has been done largely accidentally), to invest in infrastructure (which has not occurred to any great extent), to reduce the dominance of the housing market ie a significant drop is supposed value (which will not occur because it would move the banks ledgers to 'at risk' and such a move would be opposed by NIMBY voters)



The ageing demographic which will reduce tax revenues and concurrently increase healthcare and social service costs



In short anything is a diet but in this case we have had a diet of junk food for decades and HMG has deliberately put this structure or framework in place to get elected and re-elected. This has persisted until a majority had had a gut full of it and said we have been disadvantaged - the Brexit vote, which followed the whole debt driven housing market topping out in debt saturation



So I say again. It is the structure and frame work that got us here and it is the result of decades of resource mis-allocation. Further that the HMG interventions have been little more that vote buying attempts to prop up sectors which could not operate with Sterling being artificially high due to first of all due to OIl then the City. The Treasury was well aware circa 2005 (and before) that there was conflict in the economy due to exports demanding low interest rates but housing demanding high interest rates to dampen demand which would strengthen Sterling damaging exports more. Appalling governance of the financial sector and HMG disastrously getting in bed with profit sharing via taxation with banks is a large part of the situation, as is guvnt de facto decision to prop up housing prices by various schemes and actions



In this article Finance is referred to as a beneficiary of policy. This may be correct but the downside, that virtually everybody not in Finance has had to pay for this is not mentioned



All I can say Lester is this is not a good diet and the patient prognosis is not good. The only industrial policy de facto has been deindustrialisation and it has been done in full knowledge



I am afraid many of the premises in this article are just plain wrong and it is disappointing. In particular it totally misses the point that SMEs are critical to growth and development instead is tacitly talking about support for corporates which are part of the problem