The Blog

Why Britain Needs the Pound Campaign

To enable us to compete in the world and to get back to full employment, we need an exchange rate which is about one third lower than it is now. A more competitive pound would bring back more, better quality jobs to the UK, contributing to a thriving economy.

I've been in business for more than 50 years. In that time I've seen hundreds of proud, successful British manufacturing firms forced out of business and thousands of jobs shipped off to Asia. I've seen skilled manual jobs all-but disappear and areas of Britain that were once thriving and full of hope are now effectively redundant.

Successive governments have allowed our manufacturing base to be eroded away and because I'm also an economist, I have the figures which tell the whole sad story: in 1970, 32% of the UK's GDP came from manufacturing. By 1997, the percentage was down to 14.5% and by 2013 it had dropped to 10.4%, compared with about 21% in Germany and 19% in Japan.

But the politicians tell us there's no problem. We're doing nicely, thank you. The economy is growing and we don't really miss all those manufacturing businesses. But in reality, no one can deny that the UK is in trouble. You don't need to be an economist like me to see that we no longer export on anything like the scale we need to and we import far too many of the products sold in our shops.

Too few people at home and abroad buy British-made goods because they are too expensive - so they purchase them from Asia instead. Everything from consumer electronics, clothes and machinery to toys and home furnishings are all more expensive than equivalent products made abroad, especially in Asia. This is why Asian economies are doing so much better than ours. But at the moment we just can't compete. It's not a level playing field.

We have another problem too. Currently, the government's revenues from taxation, fees and charges amount to about 39% of our national income. Government expenditure, however, is now running at about 45%. That 6% gap between the two figures has to be made up by borrowing. And it's this foreign payments deficit that means we cannot run our economy at full throttle. This is why we have such high levels of unemployment, especially outside the South East.

There are about five million people in the UK who are not working. These people are willing to work if jobs were available at reasonable rates of pay. Because so many people are not working and paying tax, the government cannot balance its books. So the government as well as the country has to keep on borrowing huge sums - still nearly £100billion - every single year.

This situation is not sustainable. We need a new approach to economic policy. Doing nothing is just not an option. That's why I started The Pound Campaign, an organisation that gives voice to those who believe that the UK will never be able to compete in the world without a more competitive pound - no matter who's in government after 2015. Our recent launch with the tank tank Civitas was a success, and you can watch the event here.

The aims of the Pound Campaign are supported by people from all walks of life including business owners, economists, think tanks, high-profile private individuals and countless numbers of working people who have seen their livelihoods disappear with the factories and industrial plants.

Through the Pound Campaign we hope to persuade the government to get the exchange rate down to a level which makes Britain competitive once more. It's the exchange rate that determines how much we charge the rest of the world for all the costs incurred in producing goods and services for export. So while the exchange rate is much too high, the country suffers.

To enable us to compete in the world and to get back to full employment, we need an exchange rate which is about one third lower than it is now. A more competitive pound would bring back more, better quality jobs to the UK, contributing to a thriving economy.

Figures show that if we had a more competitive pound our growth rate could be stepped up to as much as 5% per year on a sustainable basis. The foreign payment balance would stop being a constraint on our economy because we would be able to increase exports and reduce imports so we could start paying our own way in the world.

With a more competitive pound, unemployment would fall towards 3% and the percentage of GDP devoted to gross investment would rise from its present level of 15% per annum towards the 24% - the world average. A more competitive pound would help manufacturing output would rise by up to 50% between 2015 and 2020, and would then continue to climb from its present 10.4% of GDP to around 15% as the economy continues to expand. Consumer incomes and expenditure would rise every year in real terms and inflation would not be as low as 2% but should be no greater than 3% to 4%.

We need politicians from all parties to start considering a new economic strategy; one that brings business and jobs back to Britain. If we get a more competitive pound manufacturing would revive, the number of jobs would soar upwards, businesses and individuals would pay more taxes, the government would stop running up debts and living standards would start increasing again.

If we got the pound down to a realistic level today, tomorrow we would all be very much better off.

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