The pound is currently plummeting in value, and our economy is shrinking. The Bank of England recently declared the UK to be in recession, as it raises interest rates to 2.25% to tackle the worst bout of inflation for 40 years.
Chancellor of the Exchequer, Kwasi Kwarteng, announced a huge package of tax-cuts in an attempt to aid the cost of living crisis and bring inflation down, but some argue that this may not be a long-term solution.
In his book Why the West is Failing, veteran businessman and economist John Mills argues that the key to growing our economy is manufacturing. He claims that by boosting productivity and manufacturing in the UK, we would rely less on the service industry to generate profit and would have the resources we need to import less of our goods and instead, sell to the rest of the world.
“Trying to keep inflation down to 2% pushes the exchange rate up, making manufacturing uncompetitive” says Mills.
He maintains that the fall of Western economies which began in the 1970s is “due to the dominance of a policy framework that has fatally ignored the importance of industrial competitiveness”. He promotes investment and a competitive exchange rate policy to achieve this.
Alicia Fitzgerald spoke to John about the key findings of his book, the policies he is advocating and his thoughts on fiscal decisions made in government during recent years.
