G 20 and Recovery

There is an interesting sub-text developing. This blog has repeated many times the need to re-balance our economy on with manufacturing at the heart, reducing reliance on the City and services. There needs to be more saving and less borrowing. Especially we need to import less and make more of what we use.

It now seems that thinking is beginning to follow these lines globally. Both America and Britain have been open markets to any cheap goods made across Asia and these new manufacturing countries have built prosperity upon those exports while neglecting their own hinterland, in the case of India and China especially. As they begin to build an economic model turned more to home consumption, the shape of the global economy will change. This will create opportunities for us, which thus far we have been slow to grasp.

There is evidence that the coalition government understands this. It will need to become more aggressive in creating a taxation climate and ready finance to boost industrial development. It has made a start but herein lies the key to social improvement and reduced welfare dependency. It is good to chase malingerers and benefit cheats but whilst a problem to be dealt with, they alone are not the heart of the matter.