Made in Britain with Evan Davis

Watching Evan Davis' investigation into the state of British manufacturing and its problems, opportunities and history. It is a really good story and he doesn''t pull punches, or fall into the traditional "oh its all the fault of..." trap.

What stood out for me though was his final section which was the issue (that I have touched on earlier) that we in the UK are keener on spending our money than saving it - hence there is an investment gap and business doesn't have the wherewithall to invest.

He didn't directly finger housing costs (and our obsession with rising house prices) as the biggest issue, but in my opinion it is.

In the UK most people see their house as their major opportunity to generate wealth, including as a pension fund. This means that they put all of their investments into the home, with the expectation that just by owning it for a few years that they will inevitably make money. Of course if everyone does this it becomes a sort of self fulfilling prophesy. However it is just a pyramid scam, where those in the scheme (existing homeowners) have their gains made by new entrants (1st time buyers) putting m0ney into the scam.

At the end of the day, whilst house inflation may be running at say 5% per annum it is a false gain, after all the house isn't 5% bigger/better etc.

The real cost for the economy however is the lack of investment in real wealth generators i.e. the business sector. Businesses are starved of investment and lose comptetitiveness compared with those investment rich companies in economies such as Germany, Japan and of course the US.

So, good call Evan - I look forward to the next program in the series.