Covid-19 has forced the UK into an economic crisis, generating the deep recession with which we are now in. To bounce back, economist and businessman John Mills argues in his latest book – The Elephant in the Room – that 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.
Following on from our last report published in July, John Mills sets out his plan for economic recovery from coronavirus. He notes that we may be slipping relentlessly further and further behind other countries, with many that were relatively recently much poorer than we were now overtaking us, but the pressure to do something radical about this situation has – up to now – been relatively muted. Stagnant or falling living standards and over-stretched public services, which have been the consequence of our relatively poor economic performance, particularly over the past decade, have caused resentment and discontent, but the UK is still a relatively rich country and life for most people has not been intolerable. This may be about to change.
Is it inevitable that we continue along this depressing trajectory? This book argues that it is not. There are entirely feasible ways of ensuring that we do much better than this, but only with a radical rethink of our priorities. Only by shifting our economy towards exports, domestic production, and investment-led growth can the UK bounce back from the impact of this global pandemic and achieve genuine economic growth.