The Elephant in the Room

Why UK living standards may be lower in 2030 than they were in 2019 or even 2007 and what we can do to stop this happening

John Mills, October 2020

Covid-19 has forced the UK into an economic crisis, generating the deep recession with which we are now faced. To bounce back, this book argues, we need a fundamental rethink about the economic policies that have caused us to deindustrialise and to allow the massive imbalances – from which the UK economy currently suffers – to accumulate. Above all, this means reassessing the role of the exchange rate as a crucial but almost totally neglected policy tool.

John Mills, the entrepreneur and economist, shows in this book why, in the face of all the available evidence, the economic policies the UK has pursued over a long period have hugely disadvantaged the regions across the UK. The result of this economic orthodoxy has left us with a reliance on the service sector and an economy deeply unbalanced, unable to pay its way in the world, with too much borrowing – and with mounting regional, inter-generational and socio-economic inequality.

This book provides some constructive and positive solutions to reverse the process of deindustrialisation and, by implication, make the UK’s exchange rate more competitive. The UK will need to make it profitable to site new manufacturing facilities, and this can only be done with a competitive exchange rate that is tailored towards the needs of manufacturing rather than services. Only by shifting our economy towards exports, domestic production, and investment-led growth can the UK bounce back from coronavirus impacts and achieve genuine economic growth.