Such optimism creators as Vince Cable, and damaging leaks such as the quango kill list.
As an exercise in good communication or fostering confidence the last few weeks have been a disaster, undermining the confidence of businesses as well as employees in ‘public service’. They’ve also offered an open invitation for unrest stirred up by unions looking for some relevance in a post-labour world.
Vince Cable’s attack on wealth creation, renewed tax threats on property and land, and on anyone who remotely thinks about building businesses or creating something that might pay tax or employ people is exceptionally damaging. Businesses and wealth creators are already in a state of high anxiety, exhausted from credit crunch and recession, holding off on investment or hiring, nervous about the loss of contracts and flood of resources onto the market with the dismantling of cherished projects of the last government.
We’ve seen this nervousness in the investment community, venture capital nursing losses and lack of decent deal flow or exits. Angel markets are cash-poor, or just cleaning up bargain businesses that didn’t make it out of the recession properly, rather than investing in new opportunities that arguably often have better prospects than cleanups if simply because they haven’t failed yet.
A comprehensive spending review it should be, not a blitzkrieg on the entire ecosystem of services that make up the UK – which after all is essentially a service economy.
Some ruthless budget triage, rationalisation and consolidation is called for. After all many extended government functions seem duplicative in nature or luxuries at best. When compared to budgets for the defence of the realm or the critical importance of slashing the ballooning deficit, they seem a warranted sacrifice.
What we need is the creation of wealth through business, the extension of UK interest through good science, innovation and enterprise. We must have a local environment that is business friendly, talks up, even if as naive optimism growth prospects, grants and incentives, benefits of employing and wealth creation. Businesses need to be confident that risks and investments will have a return.
Otherwise the best return on investment may be flying off to a sunnier climate for business and shredding the return ticket, or continuing to sit out the recession on the golf course enduring low returns from gilts, or taking a punt on the parabolic growth of gold being sustained.
But the lack of credible returns from any existing financial product means that the smart money is on the high risk, high technology, future focused businesses. Models that bet on a future marketplace rather than the depressing one of today. Such a yellow brick road to the future is not just paved with gold, it actually arrives somewhere with something consumers need or want to have in the future.
Our view remains – energy technology. Energy use is on a true parabolic growth curve, efficiencies and mass market solutions are required and need investment now to win shares of this global $8 trillion marketplace.
