How to repair the road to riches

Nor is it all to do with Brexit.

And actually, it isn’t even about the 2008 financial crisis – although that didn’t help.

The big problem has been brewing since before the millennium. Lack. Of. Investment.Like most things in the world, your inputs dictate your outputs. Better ingredients mean a better meal. Regular rehearsals result in good opening nights. And proper investment leads to growing economies.

Since the mid-1990s, there hasn’t been anywhere near enough investment in the basics that lead to growth.

If you don’t invest now, the effects stick around for three decades.

Invest in what though?

Lee Kuan Yew led Singapore for more than 30 years. When he took charge as prime minister, the city-state’s GDP per capita was less than US$500. When he died in 2015, GDP per capita was more than US$55,000.How did he do it?Air conditioning.

The first thing he did on becoming prime minister in 1959 was to put air conditioners in government buildings. Because that meant public services weren’t too hot to work through the middle of the day. Which prompted private businesses to follow suit. Over the next decade, the whole of Singapore became an air-cooled productivity machine.Of course, it wasn’t just air con. That was just an example of his extremely pragmatic belief that the basics matter. Get the conditions for prosperity in place, and the private sector will take it from there.

I think that’s right.

As do a majority of business leaders – according to a PwC survey, they want general business environment improvements, not sector-specific policies.There’s no one silver bullet, no magical project, or sector transformation which can jump-start the economy. Instead, I’d suggest lots of things – some radical, some common-sense – which all take a little bit of friction away from creating growth. It’s the 1 per cent changes.

There are lots of BIG policies out there already –planning reform, energy reform – so here are three little(ish) ones:

◆ Potholes Fix all of them. Make it the first priority for every local councillor. Get that right, then devolve more responsibility to those councils that got it right. Plus, no-one is pro-pothole!

◆ Broadband Last summer, I went to a remote Irish island off Donegal, which has been set up as a remote working hub by putting in ultra-fast fibre. Why not make Scotland the best-connected country in the world? Accessible, but far enough away from the big-city-stress, with some of the most beautiful scenery going – and a long history of hospitality. Burnt-out New Yorkers, come and get it!

◆ Regional city transport links Cities are the most productive places in any country. And the more well-connected a city, the more productive it is. Yet compared to global counterparts, our big cities tend to be far less commutable. Slow, expensive and infrequent buses. Disjointed trains run by multiple companies. Forget the high-speed inter-city trains, just get me from home to work in less than an hour.

Wednesday’s Budget needs to put in place a system which allows planning, financing, and building infrastructure for the next 20 or 30 years.

The problem, of course, is that politicians tend not to like investing in things which they might not be around to take credit for.

Take Nick Clegg’s now infamous 2010 dismissal of new nuclear power because it wouldn’t be around until 2021. Or look at planning reform, or tax legislation, or social care. Anything which needs a time-horizon longer than the next election gets sidelined. As Henry Hazlitt, a keen critic of US politicians in the 20th Century, said: “Today is already the tomorrow which the bad politician yesterday urged us to ignore.”

Personally, I think blaming this bad politician, short-term approach doesn’t give enough credit to the UK electorate.

Most people in these islands have more patience and tolerance for improvement projects than we think. Just watch any episode of Grand Designs on TV.Brilliant British basics? Yes please.