Lord Digby Jones: Employment will come from SMEs
Speaking to an audience of business owners, Lord Jones – currently Chairman of the International Business Advisory Board at HSBC, and former Trade Minister and Director General of the CBI – reflected on the past year, the current state of the economy, and provided his own insights into what was in store for 2010 and 2011.
At last year’s event in December 2008, Lord Jones accurately predicted that 2009 would be the worst year for the economy since World War II.
“2009 is going to be extremely difficult,” he said then. “I think we’re going to come out of it a year from now, in terms of stabilising, but we won’t reach real growth until 2011.”
Commenting on the performance of the economy and the 2009 Pre-Budget Report, he believes that Alistair Darling’s predicted growth rate is too ambitious for the current climate.
“We’ve got 5% contraction in the economy. He (Darling) thinks it is going to grow by 8% in the next 18 months. This economy just isn’t going to do it.”
As part of the UK recovery, Lord Jones believes that spending cuts must be made in the public sector, preferably in the back office, but warns that it is unlikely to happen this side of the election.
He also claims that public sector staff are paid a median average of ┬ú700 more than the private sector (ONS), and this should be brought in line with the private sector in order to curb the Government’s spending. “The old idea that public sector is paid less than the private sector is a complete con” he adds. But again, Darling’s report failed to address this issue.
However, in a boost to the UK’s jobless figures and the SME community, Lord Jones believes that small business employment “is where employment is going to come from”, adding, “after the election, politicians are going to be interested in job preservation, nothing else.”
Lord Jones urged the Government to do more to help small firms, adding: “You’ve got to have a government that walks the path with business.”
Looking ahead to 2010, he believes that the economy will grow by 1.5% – 2%, but not the 3% predicted by Darling. However the stimulus of the Olympics and the election may help to spur growth, and he claims that by 2011, it will be a “pretty good year for most.”
Last year, due to the weak sterling, more people visited London as a tourist than New York, Sydney and Beijing put together, therefore tourism and export are other factors that will help to boost the UK economy.
Another significant point that Lord Jones referred to is the ‘victimised’ society we are living in.
“We have lost the ability to say to people, ‘Take responsibility for your own life’,” he says, claiming that too many people now fall back on society and expect to be given handouts when times are tough. Instead, he believes that they should be given proper leadership and skills. “Give someone a fish and they will eat for a day. Teach them how to fish and they will eat for a lifetime. We must stop this creation of victims and people without self esteem by giving them money, as it has a short-term attraction, but over the long-term it becomes destructive.”
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