UK plc is in deep trouble
British commerce needs a boost like never before. Follow these three steps, Mr. Chancellor...
The absence of a coherent growth plan for Britain has gone from being a matter of frustration to people in business, to being one that should cause us all deep anxiety.
Last year the outgoing CBI head slammed the coalition for its lack of foresight on growth. In March, Vince Cable admitted that Britain lacked a ‘compelling vision’ for economic development. Even the director general of the British Retail Consortium recently raised the alarm over the absence of a ‘credible growth strategy’.
If we think that these comments have gone unnoticed by the credit ratings agencies, as they assess both our re-entry into recession and our ability to repay our national debt, we should think again.
We need merely look to the continent to see that following a credit downgrade, the dire economic reality Britain faces now will seem like a picnic in comparison to what could be in store for us.
From the continent is also coming a thoroughly divorced-from-reality opposition to austerity which, should it take hold, simply leaves no option other than growth, as the means of avoiding an inevitable meltdown in the public finances.
Our only credible way out is releasing the natural capacity for enterprise that the UK possesses, by loosening some of the shackles that are binding the natural industriousness of the British people.
Here is a trio of simple, costed and workable solutions that would do just that.
1. Reduce the price of fuel by 50 pence in the gallon, until 2015.
The last thing the government should be considering is yet another increase in fuel tax, yet this is exactly George Osborne’s plan: to hike duty on fuel by an additional 3.02p a litre from August 1st.
The current price of fuel is acting like rust in the engine of the British economy, when our aim should be to free it up, and pump it full to capacity to run more often and more smoothly.
We should be trying to stimulate our economy. How? By slashing fuel duty by at least 8.6p a litre.
This would amount to a gallon of fuel costing 50p less at the pumps; and if maintained to 2015, this measure would cost the Exchequer 15 percent of the £27bn it makes per annum from this tax.
That would total about £10bn.
In an act of quixotic folly, George Osborne recently agreed to loan the IMF yet another £10bn of our money to protect the Euro; a currency we mercifully never joined, and should certainly not be forcing our children into further debt over, to try and save.
This weekend the French proved that, like an unfortunately large number of Britons, they would simply prefer to pretend that their national deficit does not exist.
M. Hollande is merely the first of a wave of European Left-wing populists who will enthusiastically ascend to power by unscrupulously confirming, rather than confronting, the wishful thinking of their electorates. For the Euro this means only one thing.
There might have been a logic in the past for Britain to try and shore up this currency, in order to protect the exposure of our own financial institutions to the Eurozone, but that was back when the prospect of the PIIGS honouring their debts seemed a reality.
Now the debt to GDP ratios have grown so huge that money is being lent in the full knowledge that it will never be paid back.
Instead of throwing billions of our good money after bad, the Chancellor should be taking steps to ensure Britain’s competitiveness and industrial resilience, in the face of the economic storm that is coming our way whether we like it or not.
If we must increase our national debt still further, we should only spend such money on things that directly deliver value to the British taxpayers who are underwriting this debt.
Such a decrease in the cost of fuel is exactly the shot in the arm that Britain’s ailing businesses and struggling families desperately need.
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