Howard Davies, NatWest Group Chairman and former chair of the FSA told the BBC’s Today programme that paying people more without increasing productivity would drive up inflation. (Poorer households are already experiencing inflation with energy price increases)
To achieve productivity gains, he tells us that more investment is needed.
But apparently the UK invests less than any other European country apart from Greece. He attributes this lack of investment in the past five years because of business uncertainty around the new trading relationship with the EU i.e. Brexit.
Ok, now we have the certainty will investment go up?
If we go back further than 5 years, do we see any of that investment? No, not really. Instead of investing domestically, UK businesses took advantage of wage and labour arbitrage and rushed to offshores.
So Rishi says that there will be huge tax incentives now.
Will that fix the problem? Hmm. Tories.
I thought we were all to rely on markets to fix any problem. Strangely interventionist of them.
Oddly European of them.
And which businesses will be able to commit the millions of pounds to investing in technology, machinery and retraining labour? Another hmm… Conglomerates… those owned by private equity funds (though they don’t tend to ‘invest’)… Not so much SMEs all of which have been badly hit by the pandemic.
Partly this is Dom’s vision (Cummings, not Raab) filtering through. Perhaps Johnson cribbed it simply because it is a great distraction from what’s currently happening to point to some glorious as yet ill defined and unknown future.
Also, I think it’s a cunning plan to talk about upskilling and investment and retraining as a way of pretending that this was the plan all along and to distract us from the reality of how UK Plc counted on hard working immigrant workers. Johnson does not want to talk about EU workers any more and will say anything, anything at all to pretend that we do not need them. Otherwise, what was the point of Brexit??
The end result is that we know that we’re in serious trouble when the conservative / Tory supported Adam Smith Institute calls Johnson economically illiterate and nothing is being done to address the current crisis in front of us.