The question of fairness in relation to capitalism is complicated. What do we mean by fairness? One thing it means to me is that we don’t have a fair balance between valuing the present and valuing the future. In economic terms the UK is a high consumption, high borrowing, low saving, low investment country. That is a bad way to run an economy, but it’s what we do. The UK appears to be constantly selling assets to try to get some money to plug deficits. So I hope the shock of Brexit makes the UK more willing to value and plan for the long term. We could call such a shift a return to industrial strategy. By that I mean a stronger partnership between the government and industry to invest in the future. This partnership can take two forms. First, it can take the form of innovation and investment in science and technology.
I’m talking about capital investments in the latest kit and equipment, and in research & development, made possible by government investment alongside businesses.
Remember, UK businesses are sitting on a cash pile worth about £600 billion while investment in business declines. To turn this around the government needs to create the right environment and incentives for investment. This is not just about tax incentives, but about government co-investing – having skin in the game – and a pro-investment regulatory regime. The second way that business and government should partner is in relation to training. The UK needs to improve its investment in training. This is an area where investment has been in decline for many years – particularly investment in younger people – and it needs to be turned around. The apprenticeship levy is one attempt to address this, which I applaud. We need a concerted and collective effort to get training of employees back on the agenda as a priority, and that the government needs to look at other ways to make this happen.