Blog 2023 Malcolm Blair-Robinson

This sector is now growing faster than at any time in the last twenty years. This is an important sign of the the re-balancing of the economy essential to long term recovery. It is not just a case of shrinking the state, but also the service sector. There are signs too that over reliance by business on loans and excessive house price rises are both damping down. This is another essential part of the re-modelling plan. Caution is needed everywhere to avoid falling back into old ways which nearly bust the country. Especially we need to make more of what we use. At present far too much is made in China.

China should be a trading partner and competitor, who we sell to, as well as buy from. We have an additional hazard at the moment. Because China has become the only source of so many everyday items, we are importing not only those items, but also China’s inflation, currently running at over 5% per year and rising. The Bank of England MPC has a very tricky hand to play at the moment. The additional input of the new Financial Policy Committee will broaden the focus and bring home the truth, overlooked before, that there is more to keeping an economy functional than the level of interest rates.

Things are looking better for the government in its handling of the Libya crisis. The dithers and gaffes of the first few days have given way to some daring actions by the military and evacuations, of many nationalities including Americans, which have made headlines. There is now some sense of urgency as well as gravity in the government’s activities. There is still no news of some three hundred British oil workers based out in the desert. If the estimate is correct there will have to be more rescues.

Meanwhile tomorrow is  March 1st and the month of the budget begins. This budget will have to be clear and unambiguous, offering real prospects of growth which ordinary people can understand. 2011 is the year when the cuts are going to start to bite and to get people on board to bear the pain, it is essential that they have a shared vision of where we are headed. So far they have supported the government with reservation. This support must become whole hearted. This will not be an easy task. To achieve it, outcomes from ministries other than the Treasury have to be a good deal less bumbling. The current improvement from the foreign office and the MOD needs to spread right across Whitehall.