The Government didnt cause the current problems but as they are in the driving seat they need to do something about it...

As yet more statistics hit the street proclaiming further economic gloom and doom some of us, me included, are inclined to scratch around for straws of comfort rather than to simply accept the implications of the evidence that some would say is staring us in the face. Burying our heads in the sand? Maybe, but on the other hand what’s to be gained from burying our heads in our hands? In any case, is relying upon these traditional indicators of financial health helpful?


In recent years, largely as a result of incredible technological changes, the world has moved on at a pace that few would have thought possible ten years ago. It was only 15 years or so ago that email was regarded with suspicion, that websites were rare in the extreme and that social media was not even a twinkle in some ‘techies’ eye. As the use of technology has become more widespread customer practice and demand has changed dramatically.

Was it only a few years ago that people maintained that internet sales wouldn’t take off claiming that before purchasing buyers would need to be able to touch and feel whatever it was they were buying. Nowadays we can reflect, not only upon how wrong they were, but also upon the wider impact of the online revolution. One could write volumes on the subject; demands for greater convenience, lower prices, that most white goods are now regarded as being disposable to name only a few of the outcomes.

Simultaneously attitudes have changed in other areas. Remember the heady days when our houses earned more than we did and, for those who had any, cash deposited in the bank grew in value with little or no effort. Those were the days when, if servicing debt became difficult, we just borrowed more; happy days, when water was cheaper than milk and diesel was cheaper than petrol. Weren’t those the days too when the experts decided that it would be more cost effective to send manufacturing processes to parts of the world where they could be carried out more cheaply while we would thrive on ‘high value’ processes alone.. What crazy times they were.

My point? Well we can bemoan rises in public borrowing, widening of the balance of payments, reduced standards in education, the wrong type of leaves on the line, and any other thing that takes your fancy, but the fact is that, unless somebody is prepared to do something as a result, such indicators are of little more than academic interest. In any case, given the way the world has changed in recent years, I would question whether the traditional indicators are as pertinent as they were in the past. The one thing I am sure of is that the time for simply sitting with our heads in our hands has long passed we need action, energy and direction leading to growth in the economy. This government didn’t cause the current problems but as they are in the driving seat they need to get on and do something about it.

Getting the message across...

My colleague David Frost at the British Chambers of Commerce has certainly stirred up a hornets nest with his description of the outcome of BCCs most recent quarterly survey. Frightening, awful were just a couple of the adjectives he used. Personally I am concerned about the seemingly endless queue of people lining up to tell us how bad things are but, nonetheless, can understand where he is coming from. Things are certainly not as we would wish them to be.

I would prefer it if we all drew breath and allowed time for some of the measures that have been put in place to work. The reality of course is that until the banks start doing business very little is likely to change but, at least, the announcement by Lord Mandelson that there will be further funding to support lending should help. Following fast on David’s words I am sure he will claim that the BCC were instrumental in speeding up this process and, in fairness, so would I. Indeed it is correct to say that the British Chambers have led the debate throughout and I wouldn’t mind a small wager that they will be the first to call the recovery too.

Balancing the requirements to encourage government action and the need to protect business interests is not always an easy trick but the BCC has generally trod the line with a high level of expertise.

Looking forward it seems to me that one of the key messages arising from the problems in the economy is to learn the lessons. The current economic conditions not only cause difficulties but also identify, and amplify, some of our existing shortcomings.

As we fall down the OECD skills tables one cannot help thinking that if we are to continue attracting high levels of inward investment we will have to raise the level, and relevance, of the skills we seek to give our workforce. Despite announcements of redundancies there are still vacancies but sadly many require skills that we are short of, skills to support the engineering, electronics and pharmaceutical industries to name but a few.

If we are looking for some good news it is that we have many innovative and creative businesses with growth potential, we simply need to find more effective means of supporting them.