I caught part of an interview on the news yesterday with the Director-General of the CBI, John Cridland. As is usual on days when it appears that the economy is in terminal meltdown, someone like him was wheeled on to remind the general public that the world is not going to end and we will all be able to eat tomorrow. You would expect the Prime Minister, or the Chancellor to do that, but the former is trying desperately hard to be a hip global political player, and the latter is someone you wouldn’t trust with a piggy bank.
John Cridland’s message was that the UK economy should neither be relying on other economies to pull ourselves out of recession, nor be waiting for someone else to do something. The word he kept repeating was “confidence” – individual businesses need to inject confidence into their markets and everything will be alright.
Interesting theory, flawed in only a couple of minor areas. You cannot tell me that managing directors and chief executives do not believe that their products and services are not the best in the marketplace, so how much more confidence can they have? The banks certainly don’t inspire confidence; rather than lending to, investing in and inspiring confidence in growing businesses, they are busy making money from money. The tax man lets huge companies get away with paying minimal corporation tax but charges individuals £100 for late self-assessment returns, even if they owe no tax. And water companies impose drought restrictions on farmers rather than invest some of their outrageous profits in improving the pipe system in this country, much of which was laid down the last time a reigning monarch celebrated a Diamond Jubilee.
The UK economy at a micro level does not lack confidence; most of us just don’t believe that the people who wield power in this country know what they are doing. The other thing about confidence, and planning for the future, is that you need to know what your market is going to be like for the coming months. We are quick to stereotype our European counterparts (Germans are efficient, French angry, Mediterraneans lazy etc) but we gloss over the fact that in the UK, we seek out any opportunity not to work.
Remember all the furore over the extra Bank Holiday for the Jubilee? Not having it was seen as some kind of abuse of our human rights. The challenge for the UK economy over the coming months does not come from Europe, but the fact that the country’s focus is on non-economic events – the Jubilee celebrations, Euro 2012, the London Olympics. How much time has been wasted on people looking for Olympic tickets on line? How much money has been wasted on the Jubilee celebrations?
Mr Cridland, the confidence is there, and business leaders want to seize every opportunity they can. It’s just that we’re all a bit busy until the middle of August, and then there’s the last summer Bank Holiday to consider as well. Can we get back to you in September?