Successive governments have tried to keep the economy going by dropping interest rates in the hope of stimulating a spending frenzy, thereby ignoring the need for a strong manufacturing base. As a consequence we now have an economy that cannot survive unless we have continually rising house prices.
A consumer-led economy that borrows money to buy foreign goods is not sustainable. It simply brushes the real problem under the carpet, only to have it re-emerge even larger at a later date.
Like musical chairs, you can only restart the music so many times.
The Pandemic is causing rising business failures which will accelerate dramatically through 2021, placing great strain on our high street banks who, in turn, will not have the will or ability to finance essential new businesses.
It is crucial we invest more in manufacturing. Failure to do so places us at the mercy of the internet. We have lost our high streets to it and next will be the online sellers. Ultimately the buyer will be purchasing directly from the manufacturer, that being the cheapest source.
Can we afford to wait and see?
SOLUTION – Offer savers who are currently receiving next to nothing on their deposits a Government backed, secure scheme with a 3% return on any investment made in a new manufacturing or horticultural business with Eco-friendly one benefitting from significant tax incentives. Hospitals could be financed in the same way, freeing them of the need to use onerous P.F.I funding.
In 2009 Southern Ireland was finished. Bankrupt. Couldn’t give a house away. After introducing a 12.5% Corporation Tax their economy has boomed. They now have trade surpluses, something we haven’t had in decades. Why has no-one over here spotted this? Incredible!