The UK desperately needs to increase its Savings. Running up to the Election, I did some leafleting for the Lib-Dems. My reason for backing them is down to freedoms. They are pro freedom of speech, pro free trade and hence, pro freedom of the individual. However, the way the Liberal-Democrat Election campaign was run, was atrocious.
Firstly, suggesting a second Referendum on Brexit, stank of revenge politics. The British public have moved on, revenge politics is not a vote winner.
Brexit politics aside, the main problem that the Lib-Dems have is that there is no clear water, between what their vision of UK is, and what the others are offering. One item, that of de-criminalising Cannabis, hardly set the tone for their manifesto. It was overshadowed by the above proposal for a second Referendum.
help those at the bottom of the earnings table
So where should they start, well start with the Economy, and personal savings, they are far too low. Increasing the personal savings ratio, would help those at the bottom of the earnings table, have a chance to improve their lot, surely a Lib-Dem winner, and help those who are thrifty to increase their disposable wealth. Why didn’t Tim Farron challenge, Philip Hammond on his record of making personal savings more worthwhile, this is a policy to attract a lot of older people who do have savings. Why is the Bank of England keeping Interest rates so low? After the Referendum the Pound devalued, there has been ample opportunity to raise interest rates over the past year.
The problem is, most people do not understand Macro Economics, certainly few Politicians do. Increasing savings, lowers consumer spending, but raises investment in Industry and Commerce, an ideal point for the Lib-Dems to score. When people save they want to see a reasonable return on their cash. Where better than backing a new enterprise? Increasing the Savings ratio, increases investment in higher quality companies, requiring higher skills to give these higher returns.
There was no mention in the Lib-Dems manifesto to increase National Savings, even though this is an excellent way to increase the savings pot. However there does need to be a culture change, in Japan they have had little to no growth for over 25 years, yet they have a highly skilled labour force, which demands premium wages, and as a consequence Japan runs an export surplus.
since WW2 the savings ratio in Japan
Why, because since WW2 the savings ratio in Japan, has been at least three times that of UK, let that sink in. It is a cultural thing, apparently due to language, in English there is a distance between what happens today and what happens tomorrow, in Japanese the future tense is inbuilt into the language, so they have the concept that saving today’s money, saves for tomorrow, there is no difference. They have had negative interest rates, for years, and yet their savings are still much higher than UK.
In the UK, no Political party since WW2, has concentrated on savings, the problem is, without higher savings, UK Plc doesn’t have the spare Capital to invest in high tech machinery, surely a clear demarcation line, for the Lib-Dems to exploit. Investing in labour saving machinery, leads to higher output, because fewer people are employed by the one company. This leads to higher productivity, which in turn leads to higher job creation, through lots more efficient companies. You don’t believe me. The number of unemployed in Japan is in percentage terms less than UK, Remember Japan has around twice the UK population.
127,000,000 in Japan compared with 65,140,000 in UK .
The unemployment levels are, about 1,815,00 unemployed in Japan compared with approximately 1,469,000 for UK.
The respective Numbers employed are 64,830,000 in Japan, and 31,400,000 in UK.
There is however a conundrum, the comparative GDP figures in Dollars for UK and Japan are as follows.
1988 UK $14,477 while Japan was $23,325 source Economist Vital World Statistics 1991
1997 UK $22,300 and Japan was $35,906 source Economist World in 1998
2008 UK $39,470 while Japan hits $42,310 Economist World in 2009
2015 UK $44,580 but Japan drops to $32,800 Economist World in 2016
Clearly, I hear you say, my prognosis is wrong and flawed. Well no, because Japan was hit by a catastrophic Earthquake and Tsunami in 2011, and had great disruption to its infrastructure, and power producing facilities. Yet it is still running a trade surplus, this helps to keep the Government attaining the required income, to help pay the enormous National Debt. Why, because Japan still has a large industrial output, and although in the last few years its GDP per head has collapsed, at least for the time being, it is still exporting more than it imports, so running a trade surplus. Plus the Japanese are still buying overseas investments. These pay higher than inflation interest, and so the Japanese remain financially sound.
UK needs to change its savings culture
Few Japanese companies get taken over because of the trade surplus, as opposed to UK where it is a frequent occurrence, due to the trade deficit. The UK needs to change its savings culture, it will be a big task, but none of the other political parties, even have the subject on their radar, surely an opening for the Lib-Dems to exploit.
There has been a suggestion made, that the new City Mayors and Councils, should be given the powers to raise funds through bond issues. I totally agree, if a City needs let’s say a new Tram system, that can be shown to improve efficiency, why not let it issue a bond to raise the finances.
One person’s debt, can be another person’s savings, this all comes with a caveat, there should be NO Government fall back if the scheme fails, and the City cannot fulfil its commitments, it should be declared Bankrupt, savers need to be, beware and savvy? Another way for the Lib-Dems to put clear water between them and the other parties. But the biggest gainers would be those at the lower end of the earnings bracket.
motorway link with Manchester to Tyne Side
Savings and Bond issues, fall in with Infrastructure spending, another area that the Lib-Dems failed to make a bigger issue of. For example why is there no direct motorway link with Manchester to Tyne Side, large sections exist, the M65 is currently under used, and it would not be too difficult to make better access to the M60 around Manchester and also north along the A59 and onto the A61 joining the A1M, other routes are quite as feasible. Why are there no major underground systems outside London? Or overhead rail systems, the Germans have one as a blue print at Wuppertal, OK it is probably a one off, which pays because of the tourists, but there are lots of ways to increase infrastructure.
National Savings, can be increased with ease, and these being Government backed can come with a ‘Gilt Edged’ guarantee. All the special National Savings Bonds that have been promoted by the Government, have been oversubscribed, surely a Lib-Dems vote winner.
Another area that would put clear water between the Lib-Dems and other parties is house building.
HS2 is going to rape the open countryside
Currently HS2 is going to rape the open countryside, why, because using existing routes and straightening out any sharp curves, would mean demolishing thousands of houses, in Towns and Cities on the route. Currently because of the outdated Town and Country planning act 1947, no one can build large amounts of houses in Towns and Cities. Why because they are full, and the green belts are seen as precious.
Well all you tom fools who think green belts are a good thing, it is leading to the rape of the open countryside. HS2 is raping the open countryside, it is the green belt supporters who are to blame, no one else. Blinkered thinking or what, but then The Town and Countryside Planning act 1947 was a Socialist idea. In other words a fantasy, just like the World of Harry Potter, sounds good on paper, but doesn’t work in reality, except as a theme park. Hence so many people being unable to afford houses, they just aint being built in the Towns and Cities, in large enough quantities, because house builders can’t get the planning permission, on the edges of Cities.
So promoting high value businesses, by improving savings, results in boosting quality jobs, and reducing unemployment. This twins with reducing the balance of payments deficit, through higher quality products.
A bye product of higher savings, would be less cost to the tax payer for care in old age, which was one thing Mrs. May and the Conservatives, got seriously wrong.
More emphasis by the Lib-Dems to increase house building, should have been made. One proposal is to let local Councils build more houses, but again, the Town and Country planning act would have to go. The ten major Cities in UK all need to expand, it is not currently allowed.
Bunkum of the highest order
Bunkum of the highest order, there are now over 10 million more people in UK than in 1951, housing stock has not risen to keep up with demand. Basically the Town and Country planning act 1947, has in recent years, prevented those on lower earnings, from owning their own houses, and in their later years, being able to live on a lower income, because of no rent, and enjoy the benefits this freedom gives.
Lib-Dems are not Socialists and should distance themselves from these fantasists, but also they are not Tories. Lib-Dems stand for freedom, it should be the objective, higher savings gives freedom, this gives clear distance between themselves and the other parties.