Figures to be released today are expected to show that the UK economy is finally out of recession. Based on a 0.4% increase over a single quarter’s activity at the back end of the year with Christmas always a good time and exports bolstered by the weak pound there was probably never going to be any doubt about it.
But we have a long way to go. The Confederation of British Industry (CBI) states that the economy is 10% poorer (and the rest) than it would be if the recession had not occurred. The CBI’s Director, Richard Lambert, wants the private sector to ‘step up to the plate’ to deliver the robust and sustained recovery needed to get the UK back on its feet again. That is as long as it isn’t strangled at birth by tax and EU bureaucracy first.
As is becoming evident, we could not afford the things we were buying. I am not talking here about personal chattels. I am talking about the country as a whole. As a 4th-6th ranking nation we kept on fooling ourselves that we deserved the very best or everything and could afford it. We demanded the best health service, the best armed forces, the best schools and the best local services. But forgot we have to pay for these things with real money.
If you have the best health service in the world for example but are not the richest nation then something else has to give. Schools? Policing? Armed Forces? Libraries?
The UK needs to look at itself squarely in the mirror and start asking itself some pretty fundamental questions. Don’t leave that to the politicians, they are already gearing up to tell you that you will still have the best of everything and that we can afford it. They just want your votes and hang the consequences. Most voters like what they hear from these politicians especially if they think someone else is paying. But as we are experiencing, the bills still hit the mat but it’s the very people that were promised ‘you deserve the best’ that actually end up paying it.
Compare the nation to a family where the parents think they and their children deserve the best of everything. How can they afford the Rolls Royce, private school and full BUPA cover on an average wage? You’d think them stupid, so why is the UK as a whole any different?
The country is going to have to earn its way out of this recession, but what about the next one. Oh yes! There will be another recovery and boom, however small. But as sure as night follows day there will be another recession. But instead of trying to beat it we need to accept it as part of a natural cycle. Then we can plan properly for our futures.
Our grannies would have said to save in the good times so you’ve got something to fall back on. But we, the UK, did not do that. We spent it all and vastly more. That means we will be paying for this recession with the next boom’s money. We need to learn and build up reserves as a country and on a personal level. We also need to make sure that there will never be bail outs in the future. Keep the risk of failure real and alive for everyone, not just the poor.
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