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30 April 2015

This is my honest assessment of the economic and political realities facing the UK

Having given my views on finance and economics for years, I am writing this blog to set out some thoughts on the upcoming election.   I have previously voted Labour and LibDem and each party has some excellent politicians, but the current economic and political realities lead me to conclude that the future of the country I love is at risk if the Conservatives do not form the next Government.  I am not ‘tribal’ in my political allegiances.  I don’t blindly follow a particular party or ideology.  But putting Labour back in charge at this time could be disastrous for the United Kingdom.

Let’s look at the reality, not the rhetoric: I write this even though I know I will be criticised in some quarters for being ‘political’ – which seems to be a derogatory term nowadays, although I’m not sure how one can give views about party policies without being political.  Giving my carefully considered assessment does not change me as a person, nor my values of financial fairness and social justice and my concern for ordinary British citizens.  I hope you will consider the evidence.

The economy:  In 2010, the UK was saddled with a huge deficit (like that of Greece today) and high unemployment.  Now, five years later, the deficit has halved as a share of our economy, we have had growth when the countries around us have been struggling and most importantly employment levels are the highest ever as private sector job creation has boomed.

The policies have worked:  Other countries and the IMF recognise our economic strategy is working well.  However, Labour did not understand.  They said the policies which have created two million new jobs would be a disaster.  Indeed, in 2012, Ed Milliband praised the policies of the new Socialist Government of Francois Hollande, saying he wanted to emulate them over here.  They have actually produced rising unemployment and economic weakness in France.

The Conservatives have proved to be the party of the workers:  Just look at the evidence – falling unemployment and record employment levels.  Unemployment was 2.5 million in May 2010, it is now under 1.9 million.  Most of our EU neighbours still have unemployment rates well above ours.  The number of people claiming JobSeekers Allowance was 1.5million in May 2010, it is now around half that level (0.79m). The employment rate has climbed to the highest level since ONS records began in 1971.  The UK has created more new jobs since 2010 than the rest of the 27 EU countries put together. And two million more apprenticeships.

Nearly all new jobs created are full-time (four out of every five are full-time jobs):    Some commentators have complained that this employment record is still not good enough – ignoring the realities all around us.  Focussing only on negatives seems to be deliberately undermining the real achievement that this jobs boom represents.  Yes, wages have risen only slowly but that will happen when recovering from such a deep economic downturn.  It takes time.

The task is far from finished:  Listening to some of the other parties, it seems that they believe the economy is fine now and we can return to the days of borrow and spend.  That is an illusion.  Promises that they can spend more, borrow more and still keep growth and jobs going are not credible.  We need continuity to ensure the benefits of recovery spread more widely to everyone.  Without growth and a thriving private sector, we cannot repay the debts we owe and our children will be left to pick up the pieces of today’s failure to recognise reality.  Changing course now when the economy is not yet healed is too risky.

Other parties are taking growth for granted – what is their plan to boost private sector employment and pay?  Labour and the SNP have failed to set out a strategy for helping businesses create more jobs and afford to pay higher wages.  Redistributing income and increasing regulation will not pay off past debts or create growth.  Higher pay levels depend on a stronger economy, but the other parties seem to be taking growth for granted.  It may sound enticing to promise more Government expenditure, but if growth is lower we all lose.  It is vital to find a good balance.

Financial fairness for all:    British people want to know that their earnings and savings can benefit themselves and their families as well as wanting to help those in our country who are struggling.  That requires policymakers to strike a careful balance.  Government spending is your money, it comes from the taxes you pay.  Being part of a caring but fair community is important, but it needs policies which will deliver growth and improved prosperity so we can afford to finance public spending.

This is a fantastic country but it still faces huge challenges:  Now is not the time for change, now is the time to continue the policies that are working.  Being enticed by talk of returning to more public spending and borrowing we will be putting all the progress at risk.  Which party leaders are offering the best prospects for our country as a whole?  Those who have created 2 million jobs, 2 million apprenticeships and record employment.  Or those who handed over saying ‘There is no money’?

This is my honest assessment:  I stress that I’m saying this as someone who does not have a blind allegiance to any one party or ideology.  I care about the future of this country and this is how I genuinely see things.  I have set out a logical rather than ideological narrative and hope you will consider my thoughts in a spirit of genuine open-mindedness.

ENDS