Like most people, my memory is conveniently short, well when it suits me that is! It was just the other day that I was thinking about the state of the global economy and in particular the UK economy. It would be easy to forget that we have been enjoying a robust economy for the last couple of decades or so. If you are young enough it may seem that the robust economy of yesterday was simply the norm.
So it’s worth looking back to the late seventies when Margaret Thatcher came to power and remembering that at that time, the UK was “the poor man of Europe” the days when socialism ruled and the strength of the trade unions restricted inward investment.
Thatcher took the country by the scruff of the neck, shuck it, and continued to shake it until it screamed. You know what they say, when you’re sick you take medicine and none of us likes to take medicine. Many people in the UK still hate Thatcher with a passion, putting us through all that pain, it wasn’t fair was it?
Well actually, yes, it was; if it wasn’t for the courage of Thatcher and the financial reform that evolved we would probably still be “the poor man of Europe”
So for the last couple of decades we have enjoyed being “the powerhouse of Europe” leading the way for others to follow.
Then along came New Labour, the Blair and Brown show, and in fairness, New Labour could see that the UK was now ready for social reform. Financially strong and in a good position to invest in education and the National Health system they set about the tasks in hand. Pouring huge amounts of tax payer’s money into a bottomless pit, yes we have seen some benefits from this, but value for money? I don’t think so!
Gordon Brown as chancellor had the best job in the world, residing over one of the powerhouses of the world. Even then he could not resist taking taxes by stealth at every opportunity, to add coffers to the ever growing burden on the tax payer. The normal man in the street started to see his disposable income shrinking many years ago, but at this point it was something that he could live with. That was until the cost of living soared on the back of rocketing oil prices and then the much shrunken disposable income situation came home to roost. Put quite simply, no more head room for people to manoeuvre. So the normal man in the street, if he is lucky enough to still have a job, is struggling and poorly placed to ride out the economic storm.
To add to our difficulties, we now have an army of some six million public sector workers to burden the tax payer, an army that on average, are paid more than their counterparts in the private sector. Not only paid more but have generous final salary, inflation linked pensions the private sector may only dream about (and pay for).
This inequality is a real problem, an issue that is being avoided by politicians at all costs. The strength of the unionised public sector is now starting to flex its mussels and shout for more.
Does this remind you of something? Oh yes! “the poor man of Europe” days and if you think that this is a bit dramatic, well take a look at what experienced investors think of our currency.
The days of economic prosperity have well and truly evaporated. The situation we face is going to take someone with unique courage and strength to battle the odds. The question is; who?
Well, in the midst of possibly the worst economic downturn of our lifetime you would think that the great politicians of our country would band together for the greater good and plan our recovery.
Seemingly not, they are too busy scoring political points over one another.
Excuse me gentlemen, but we do not give a toss about your incessant bickering!
Just get the job done for the sake of all of us.
Go on Good Lord; give me a wish… just one! Please may we have a clone of the
Iron Lady; we need her now like never before!
Brian Peza Perrins 2008