UK: EDITORIAL - INTO THE NEW YEAR WITH OPTIMISM.

UK: EDITORIAL - INTO THE NEW YEAR WITH OPTIMISM. - It may not look all that great from where John Major is sitting, but for most of Britain's capitalists, and that means the majority of the population, 1997 can be expected to be a pretty good year. After

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Last Updated: 31 Aug 2010

It may not look all that great from where John Major is sitting, but for most of Britain's capitalists, and that means the majority of the population, 1997 can be expected to be a pretty good year. After a grindingly slow recovery, huge swathes of British industry now find themselves as internationally competitive as they have ever been during the working lives of most of their employees. The recent strength in consumer spending promises to allow many companies the sort of sales growth that has not been seen since falling inflation brought an end to the 'last year plus 7%' formula for setting every next year's prices. Even so, the economy appears to be in no immediate danger of overheating.

External perceptions of British business are on the way up too (see Better Made in Britain p28), and figures for foreign direct investment suggest that the UK really is a place where much of the rest of the world is very happy to do business. Although companies will undoubtedly continue to restructure, causing misery to those made redundant and occasionally to whole communities, the worst appears to be over. By and large, the working population has come to terms, however uneasily, with the changed relationship between employer and employed. Most encouraging of all, what is nebulously referred to as 'the enterprise culture' really does seem to have taken root in quite a lot of unlikely places.

But as some exporters well know (having lately rediscovered that sterling can actually go up as well as down against the world's leading currencies), it is a rare garden which is rosy for long. There is a real danger that, like the spider which climbs up the spout only to be washed back down by the rain, Britain's new found competitiveness and enterprise will be washed away by the need to conform to the fiscal and social attitudes of her European partners. Pre-eminent buinessmen like Sir David Simon of BP and politicians like Sir Leon Brittan believe fervently that there is a widespread acceptance within Europe of the need to move towards the open markets, lower tax base and greater flexibility at work which have characterised Britain's struggle out of the drainpipe. But there are many indicators to the contrary, ranging from the French government's repeated second thoughts about the future of the Thomson group to the willingness, which seems to extend across Europe, to fudge the Maastricht criteria for achieving a single currency.

Britain's future prosperity lies in being a fully-fledged member of the European Union. But it also lies in continued commitment to the free markets and flexible working practices in which enterprise can thrive.

The most earnest wish of British business for 1997 must be for a clear message from the rest of Europe that these two prerequisites for national prosperity are not mutually exclusive.

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