I wrote on Saturday about the political paralysis that surrounds any serious attempt to tackle the UK’s multiple economic weaknesses, and highlighted one glaring deficiency in particular – one of the worst savings rates in the OECD. This in turn stunts investment in the future, and lowers long-term growth.
In public policy, we routinely favour consumption over savings and investment; in doing so, we mortgage our future in order to support our current lifestyles.
Eventually, there will be a reckoning, a massive collision with reality which will see living standards and international standing substantially diminish. That point may come sooner than we would like.
But we have to remain optimistic, and consider what might be done in the meantime to at least partially correct the problem. Politically, it’s bound to be extremely difficult, because any attempt to force up Britain’s savings rate will…
