By Marcus Coetzee, October 2026.

Introduction

The UK political conversation seems entirely focused on where to find money and how to spend it. We spend so much time talking about what to do with the golden eggs that our golden goose lays that we forget to notice our precious goose is starving.

We forget that a vibrant economy yields money for the government to spend. It also helps to prevent a wide range of downstream social and economic problems from manifesting. If we neglect to constantly nurture and strengthen the economy, we end up with government departments and charities struggling on austerity budgets to deal with snowballing fires caused by increasing poverty and deprivation. Just turn on the news, and you can see the economic consequences manifesting here and across Europe, most vividly in the riots taking place in France and elsewhere.

This essay discusses how political leaders and the media seem preoccupied with how to find and spend money in the short and medium term, and how insufficient attention is given to improving the economy, especially the industrial activity that underpins it. This approach would increase the size of the pie so all portions become larger.

In my everyday life, I work with many organisations valiantly trying to deal with the poverty and inequality stemming from the collapse or weakening of a city, town or village’s economy. What’s so frustrating is how this fractal pattern continues to repeat itself. The UK government seems to be letting hard-won industry slide, a stark contrast with my African work where we are trying to build an industrial base.

I conclude this essay by describing the economic topics that I’d like political and government leaders to be discussing more openly, inviting constructive debate, being willing to interrogate their assumptions and dogma, and rising above ideology.

The debate about finding and spending money

Every day I read about competing priorities for how the UK government should spend its limited pot of money. Some factions want to strengthen the social security system, some want cheaper student loans, and others want the government to nationalise utilities and infrastructure. And then we have the military lobbying to increase its share of the budget in an increasingly turbulent world.

There are also different views on where government will find this money. Some want to tax the rich, either through an increasingly progressive income tax or through new wealth taxes such as a capital gains tax. But no faction wants itself to be taxed or to pay more; it’s always other people who must pay. The government seems to resolve this tension by issuing more bonds and getting the country further into debt.

What is bewildering is how little attention is given to growing the economy that generates the money in the first place. I thought my frustration would resolve after writing an essay on where the three tiers of government get their money from, inspired by a conference where everyone spent the day complaining about a lack of money, but sadly my frustration persists.

People too easily forget that government money is earned through economic activity, through taxes, fees and dividends. If the government wants more money, it needs to cultivate and enable more economic activity, preferably decentralised economic activity, since this distributes the benefits more fairly. Simply trying to extract more from the same size economy can strangle its long-term growth, subject to its position on the Laffer Curve.

I want to hear more debates in the media about how best to grow the economy. I want politicians agonising about how to grow economic activity and losing sleep over it. I want them worrying about how to insulate the economy against global shocks and stresses, and against foreign interference, instead of being distracted by things like digital surveillance and free-speech restrictions which try to patch dissatisfaction rather than resolving it upstream. I want them to have nightmares about the risk of widespread riots, sabotage to our undersea infrastructure, Chinese action against Taiwan and the resulting sanctions and shortages, and of course, escalating conflict in the Middle East and Eastern Europe.

So many of our current problems centre around the nature and performance of the economy. If the economy does well, the government has more money to spend, and problems like unemployment and poverty are themselves mitigated as people have decent work and reasonable incomes. But the converse also applies. If the economy worsens, all other problems worsen too, and it becomes very difficult for government and charities to dig the country out of this mess with fewer resources. For example, the link between economic conditions and social problems like fractured households, substance abuse, homelessness, teenage pregnancy and crime is well-evidenced. It is always easier to prevent problems upstream in an age of austerity than to fix their consequences downstream.

The pattern of industrial collapse

I see a recurring pattern in my work in Scotland, where the collapse of industry, whether decades or a century ago, continues to have a negative impact on communities in that area, increasing the need for food banks and other types of support. I see government departments, and the charities and community groups I’m supporting, struggling with declining budgets and morale to deal with these problems.

When I research the local economy of a Scottish village or town for a strategy assignment, I tend to find the same story repeated over and over. There used to be industries here. The town was built and thrived. Then the industries vanished overseas. The town never recovered. Decades later, the local economy is still struggling, with multiple pockets of poverty and deprivation. Upstream economic collapse produces a multitude of downstream social problems that require more government expenditure to address, while at the same time leaving less money available. It is a bind.

In my research, I find again and again that the tourism, whisky and services sectors haven’t been able to replace what was lost. People commute to cities, live on benefits, and mostly hold local service-oriented jobs. There may be some small-scale processing or manufacturing, but nothing approaching the scale of before, when an area’s identity was inseparable from its economic activity. For example, I spent Sunday morning in Greenock, along the River Clyde, an area internationally renowned for shipbuilding and tool making, and there were barely any traces of this activity, even though it’s part of the area’s DNA, and locals would acknowledge this truth.

This collapse of local economies, especially those with an industrial base, is a fractal pattern I see repeated throughout Scotland, and presumably elsewhere in the UK. It is fractal because the dynamic is the same at every level of abstraction: neighbourhood, suburb, village, town, city and region, and across all industry types. All that changes is the complexity and scope.

Another example: over the past week I learned about the economic history of Bathgate in West Lothian in order to better understand the context for poverty there. The economy grew significantly in the 19th century on coal, iron, lime and shale oil. A factory outside the town produced oil and paraffin from shale and is often described as the world’s first commercial oil refinery. It became a busy manufacturing and market town. In the twentieth century, British Leyland and Motorola both established operations and then left in 1986 and 2001 respectively. Today, decades later, the town struggles economically, with too many households unable to make ends meet. The pattern of decline is once again familiar. The present problems exist because of past economic collapse.

A few months ago, I spent time reading and hearing about the economic challenges of the north-east coast of Scotland, in areas like Peterhead and Aberdeen. The oil and gas industry is collapsing, partly due to UK government policy, and the fishing industry is in decline. Over the past decade, Scotland has lost approximately three oil and gas jobs for every one clean energy job created, according to research presented to the Scottish Parliament by Future Economy Scotland in 2025. It is clear what will likely emerge over the next decade or two, because the downstream pattern is already present in many other areas of Scotland, as the examples above show, and because this path is well-trodden.

The mystery of industrial decline in Scotland even led me to write a 25,000-word paper called “Where has Scottish industry gone?” This revealed that the standard explanation of cheap overseas labour was only one of many contributing factors, and that some countries, like Germany, Switzerland and Sweden, had successfully mitigated this Western trend.

The Brexit missed opportunity

Brexit has been in the news recently, with the Prime Minister Andy Burnham suggesting that the UK might try to rejoin the EU single market. His intention seems clear: regain access to the UK’s biggest export market to help grow its economy.

However, the Brexit experiment was never really conducted. Regardless of how one voted in 2016, Brexit created a genuine opportunity for the UK to take its economic future into its own hands: to design bold industrial policy, to protect strategic industries, and to build national resilience.

Brexit brought relief from EU state aid rules, which would have allowed the government to actively subsidise and protect key industries and control its own negotiations with export markets. Unfortunately, this freedom was never used. Successive governments left EU law largely intact, copying thousands of regulations wholesale into UK statute, bound by the same non-interventionist framework thinking that had persisted for over a century. The promised reduction in red tape never materialised, and some businesses now face dual compliance with both UK and EU regulations, making their regulatory burden heavier than before.

The main result was lost market access without the compensating gains that a genuine industrial strategy could have delivered. This is why the debate about rejoining the EU resurfaces periodically: not because Brexit was inherently wrong, but because the experiment was abandoned before it was attempted.

Rejoining the EU will bring economic benefits, while also bringing other sorts of challenges. More importantly, the Brexit episode demonstrates a deeper reluctance to use the tools and thinking that would help the UK economy to thrive. I believe we would see a similar dynamic with Scottish independence.

The Africa comparison

Africa presents an interesting counterpoint to the UK. African countries are struggling under adverse conditions to grow their economies, because in these often stark environments it is self-evident that a growing economy can alleviate poverty and a host of associated social problems. The important role of industry is accepted as common sense.

I have joked with friends that the UK needs to import development economists from Africa and give them positions of power and influence here, as they would bring a unique mindset and set of skills, combined with an acute awareness of the dangers of economic collapse.

African economies tend to be more fragile than their developed-country counterparts, partly because their currencies are more volatile and their debt is denominated in pounds or dollars. When their currency devalues, their debt increases, creating what computer gamers know as a death spiral. This makes African policymakers very mindful of the relationship between economic activity, currency value, tax revenue, inequality, unemployment and poverty.

The projects I’m part of in Africa focus on building local economies and sectors, occasionally from the ground up. They follow a similar logic: identify a sector or geographic area with economic potential and the ability to absorb people and businesses into supply chains; invest to create as much local manufacturing and processing as possible so countries can export finished products rather than raw materials; link exporters with more profitable markets and ensure they have the appropriate certifications. While this is happening, other efforts seek to improve the national and regional business, trade, investment and skills development environment.

I am currently leading an assignment for a €22.7 million impact investment and challenge fund in Zambia focused on the green and circular economy. My experience with similar funds in Kenya and Zambia has shown that, when run properly, they can improve the economic wellbeing of hundreds of thousands of households and significantly improve the performance of the businesses receiving investment.

I often wonder why I encounter these types of investment funds in Africa but not so much in the UK. Development economists in Africa think seriously about industrial policy, productive capacity and labour absorption because they have to. These are matters of economic life and death. African countries are acutely aware of the downstream consequences of a collapsing economy, which is precisely the point I’m trying to make in this essay.

My frustration with the UK is that politicians seem focused on how to spend money rather than how to create the economy that provides it, possibly because the UK has been so wealthy for so many decades, even centuries, that they are letting slip the very thing that African countries are working so desperately to build. I wonder why sophisticated economic thinking is being applied in countries like Zambia more so than in the UK.

Six conversations we should be having about the UK economy

I would like to see more serious conversations between politicians about how to build more of an industrial base in the UK, underpinning and complementing the services industry. The two are related. Scotland makes whisky, an industrial activity, but the tourism and hospitality around it are services.

Six conversations seem especially urgent.

First, we should discuss the types of industries and services the UK should establish and protect. Are they future-proof? What will their contribution to the economy, value chains and employment look like? How many local suppliers will they use, and how many local producers will they supply?

The news seems preoccupied with data centres nowadays, with their intense energy and water requirements, and I wonder whether they meet my criteria. But over the weekend, I was surprised to read in the Spectator about how Swindon has become a hub of drone manufacture, with nine companies setting up there, bringing considerable investment. This is partly because of its proximity to military bases and equally because “Swindon has an industrial DNA” with local technical skills present after a Honda factory closed in 2021. The town is also renowned for manufacturing Spitfires, speaking again to the industrial memory and identity of an area.

Second is an oft-overlooked conversation. What industries and services are required for national resilience, to protect the UK economy against the impact of global conflict and disruptions to trade? We learned lessons during the World Wars, then during the 1970s energy crisis, then during the 2007-2009 Great Recession, then with the war in Ukraine and the cost-of-living crisis, and now with the conflict in the Middle East. The UK’s over-reliance on imports, especially from China and the Middle East, is a growing vulnerability. I’d also add the import of gas and electricity through undersea pipelines to that list.

My top-10 list of key industries for resilience, from an incomplete essay, are: energy independence; food security; pharmaceuticals and medical supplies; semiconductors and ICT infrastructure; steel and metals; fertilisers and agricultural chemicals; critical minerals and rare earth processing; shipbuilding and maritime capacity; sub-sea cables and undersea infrastructure; and defence manufacturing and munitions. These are industries that our leaders should be worrying about.

Third, we should consider what policy tools the government will employ to protect and strengthen the economy. There is considerably more room than is commonly acknowledged, even within the parameters set by the World Trade Organisation, for the UK government to actively use tools like tariffs, subsidies, anti-dumping duties, state banks, carbon border adjustments, domestic content requirements in public procurement and technical requirements to strategically nurture and protect industries. Countries do this especially in the early stages, and especially for industries likely to contribute to the economy and tax revenue, employ people and improve national resilience. This approach runs against the laissez-faire instincts of successive UK governments. It is also one reason for the failure of Brexit, as I mentioned earlier.

Fourth, we should seriously discuss what will be done about energy infrastructure and expensive electricity prices. UK industrial electricity prices are among the highest in the developed world. According to the UK government’s own Department for Energy Security and Net Zero, in the first half of 2025 standard industrial users in the UK paid around 25p per kWh compared to the European median of around 11p, and very large industrial users paid around 22p compared to 10 to 12p across comparable European economies. This makes it cheaper to import electricity-intensive goods than to produce them locally, meaning that some other country gains much of the benefits.

I have written a reflection on UK energy policy outlining some key risks and opportunities. The key reasons for our high electricity prices include taxes and fees bundled into electricity bills, the volatility of gas prices, and the lack of stable baseload from nuclear. When renewable energy production underperforms because of weather conditions, the UK must buy extra energy at auction, and this marginal auction price then determines what is paid to every generator in that window, meaning that electricity becomes much more expensive.

Fifth, we should discuss the unintended consequences of the UK’s territory-based Net Zero approach, without calling each other names. While I see the benefits for organisations with largely local supply chains, this accounting method incentivises businesses with multinational supply chains to offshore carbon-intensive operations to other countries, often with lower environmental and labour standards. This undermines local employment, tax revenue and national resilience.

Furthermore, the scale of this commitment is significant: NESO, the government’s own energy system operator, estimates the gross cash cost of Net Zero at between £7.6 and £9 trillion to 2050. As someone who believes climate change is occurring and will have far-reaching consequences, my suggestion is either to apply Net Zero calculations across entire value chains of larger companies, which removes this distortion but will be administratively complex, or to scrap the territorial approach and rely on other policies and strategies to reduce global emissions.

Sixth, we should consider how the government can dismantle the frameworks that inhibit strategic improvements to the economy. These are binding legal obligations, created by statute, treaty or common law, that sit above ordinary politics. I have written separately about how these frameworks act as ratchets: each additional layer reduces the discretionary space for strategic decisions. Like a ratchet, they tighten and are very difficult to undo. This is why politicians get elected to fulfil their manifestos and then rapidly discover that the country is on pre-programmed autopilot, like an aeroplane with the captain locked outside the cabin.

Conclusion

I would like to wake up in the morning and read the news to find politicians and government leaders talking about how to broaden and strengthen the economy, rather than about a new tax they are considering or how they have decided to borrow more to spend on their faction’s priorities. Serious conversations about growing the economy, and not just how to extract more from it, are required to deal with the societal turbulence and deprivation that lies ahead.

Fortunately, there are lessons to be learned from Africa about the relationship between poverty, inequality and economic growth, and how this triad can be moved in a positive direction, even in relatively adverse circumstances. There is also the lesson of the death spiral from borrowing while already in a vulnerable position.

Finally, there is the lesson of hope: that focusing on industrial development, whether manufacturing or processing, and seeking to bring as much of this activity within national borders as countries like Germany and South Korea have demonstrated, and which several African countries are striving to do, can help to revitalise an economy and create a brighter future. The tools and the thinking exist. The question is whether the UK has the political will to apply them before the fractal pattern completes itself.