Global village and value for money. Economic reality.

This is GCSE level economics. Despite that many fail to grasp it. Many wilfully choose to deny it because it does not suit their agenda.

The economic reality is :-

As consumers we seek best value for money. If a product is not competitive it will not sell. This is even more apparent now with online shopping. We can easily determine price, we can quite easily make a good stab at determining quality. We shop at the supermarket - not at the corner shop - because it offers more that we want - price, quality, range - convenience.

Global village. Consumers in reality are not much bothered where something is made or produced. I'm Backing Britain campaigns can be novel but they are unsustainable and do not work. If a product can be imported to sell here and it is judged best value for money it will sell. Our producers, our companies are competing against producers and companies worldwide. We are living in a global village. China manufactures. Indian call centres. Cut flowers from Kenya! Cars and machinery from everywhere. Just about everything we need can come from abroad. Our exporters have to the best on offer in their markets.

If you put these two basic factors what do you get.

Producer companies have to be very focused on the cost of production in order to be competitive. Labour costs, regulatory costs, taxation cost are massive factors. If unit wage costs are too high, or if companies are burdened with too much red tape, or if corporate and other taxes are higher than elsewhere - the company will not be able to remain competitive. It will go out of business or as often happens - relocate elsewhere in the global village - where production costs are cheaper.

The lesson is if politicians - particular Labour - force up wage costs - put up personal and corporate tax - our companies will not be competitive. They will flounder or go elsewhere. Jobs will be lost - tax revenues will drop. Welfare state costs will increase. As an aside if any government lets its public sector out compete its private sector on wages and pensions - the country is on a road to ruin - because it is killing the source of its income - the private sector. Disaster as we have seen.