Houses of Parliament, London
This post is intended to be used as part of the strategic analysis that any well-run business should undertake. It is intended to contribute to the political element of any strategic environmental analysis using the variants of the PEST framework( PESTEL, PESTLE, STEEPLE, PESTLIED etc.)
The final term of the current UK government has begun following the summer recess and the party political conference season. The economic context is similar to many other legislatures; it is a year since stock markets fell and economies crashed into recession following the failure of Lehman Brothers and the near-collapse of many elements of the global banking system.
So, how do things look a year on? The macro-economic measure of GDP growth suggests that China, followed by a number of other countries, is recovering and economic growth has returned. A number of developed economies are static, and economies that had a high dependency on Financial Services (UK, Ireland, Iceland) are trailing behind.
The narrative in the UK is worrying though. Some politicians, supported by the media, appear to have either forgotten recent history, or revised it for party political advantage. In an economy that is suffering because of mistakes made by banks, not only has government failed to secure changes to business practice and culture, but the opposition has very cleverly changed the story from abject failure of deregulated markets to one of reckless public expenditure and the need to pay down national debt.
Party politics is a feature of the particular form of parliamentary democracy that we have in the UK, but when it diverts political debate from the real issues it is dangerous. When the area it moves to (reducing public expenditure during a recession) is potentially damaging to the medium-term economic health of the country it is reckless.
An election is due next year. It is vital for the UK economy that the election debate considers the real issues rather than dangerous and potentially damaging illusions.
