Sunday Blog 26: Is this the Smart Way Forward?

We are hit by the effects of Covid 19, which has subsided for the moment, but it has very not gone away. We have to face a stupendous economic challenge of the biggest recession in three hundred years. We are thundering down the track to a no deal Brexit. So we need all the friends and trading opportunities we can get. This is not a moment to focus on the internal workings of other countries, however alien to our standards they may be, but rather to focus on our common interests for the common good.

Moreover China is not a monolithic and moribund system like the old Soviet Union. It is the world’s second largest economy, is technologically advanced and is a big investor and partner in all manner of commercial and infrastructure projects in the UK.

So to row at the same time, now, with the EU, Russia and China, making critical trade with all three more difficult and less likely, is not smart. It will achieve not one iota of influence over the governments in situ in those countries and groups, nor will it change the behaviours of which we complain. But it will make life harder for us here in the UK. It will impair business, reduce employment prospects and increase by a significant margin the volume of money we have to print to get us out of this mess.

It has always been my view that the notion of borrowing money by a country with its own sovereign currency is something of a fiction. The real resource to drive growth is expanding the money supply to fund start ups, infrastructure renewal, modernising communications and creating enough affordable housing to smack the housing shortage out of existence.

To achieve that without inflating fixed assets but at the same time inflating the dynamic economy enough to drive up living standards and repair public services, requires economic skills and attention to detail of an unusually high order.

Skills which Boris, for all his charm and optimism, just does not have.