Howard Flight was MP for Arundel and South Downs between 1997 and 2005, is a former Shadow Chief Secretary to the Treasury and Deputy Chairman of the Conservative Party, and is now chairman of Flight & Partners Recovery Fund.
I recently returned from a two-week trip through China. I also visit India regularly where I have been a great India-phile for forty years. I find it instructive to try to plug in to how the UK is perceived by what are now the world’s emerging, economic giants. Such perceptions also relate critically to how Britain might best boost its economic growth.
From Asia, we look “tired”, economically debilitated by the explosion of Socialist Public Sector spending and to be trying to continue an historic, global military role which we can no longer afford. The great success of the last 30 years of restoring London as the world’s leading, financial centre looks weakened, not only by the banking crisis and political attacks on the City, but also by the rise of financial centres in Asia. Hong Kong is currently raising substantially more for new issues than London and New York put together: Singapore has advanced significantly as the leading off-shore centre.
The EU and its deeply flawed structure is not well understood, but there is the perception that Britain would better re-build and increase its commercial and trading activities with Asia, and India in particular; and that, generally, the EU is condemned to be a stagnant economic area. Our “green” policies are seen as economic masochism, seriously damaging the competitiveness of our industries. We are seen as having sacrificed growth for too high a mass level of consumption, financed by excessive taxation on the wealth creators and too high a level of both private and public borrowing.
On the positive side, our good schools and universities are still well regarded; we are known for still being very inventive, and to continue to produce adventurous people, going about the world to do business – particularly, again, in Asia. Lady Thatcher and her enterprise reforms are still much admired, although seen as having been badly damaged over the last 20 years. We should encourage the creation of wealth and not denigrate it.
Constructive messages for Britain which I picked up from Asia are – in no particularly order, – we should make our educational institutions as attractive as possible for bright young Asians: we should encourage inward investment in the UK by Indian and Chinese companies; we should move back, long term, to a higher savings and investment rate. Our banking system must be more supportive of small and medium sized companies and export businesses, and of key high-tech sectors and businesses which really matter for the future. We should be prepared to use, to a modest extent, “Chinese” mercantilist, discriminatory bank lending policies.
We are wasting our time in talking generally about trying to re-establish manufacturing industries, where we have no hope of competing with Asia – and concentrate on sophisticated areas where we are in a relatively strong position, e.g. pharmaceuticals, aerospace and software.
Above all, we need much more upward, social mobility. This is seen as having been reduced by the abolition of Grammar Schools, whose essential purpose was to select the leading talent of each generation and give it a good education. Currently, the most successful segment of the UK population, in terms of educational achievement, upward social mobility and the creation of wealth, is the Indian community and especially that which has migrated from East Africa. Immigrants with skills and drive should be welcomed, in contrast to those moving to the UK largely to take advantage of our over generous welfare system.
The entrepreneurial drive of British culture is perceived as not dead. The problem is that it is so much more difficult to be a successful entrepreneur in the UK than in China or India. What is needed is the reduction of debilitating and unnecessary regulation and a competitive, low tax environment.