Now is the time to get productive

IT’S always good news when there are more jobs available and our story about employment agency Reed reporting a big upturn in job vacancies advertised even after the referendum is certainly just that: good news.

So is our report on the prospects for British tourism following the drop in value of sterling.

After all, if there is one sector of the economy that ought to see a clear and rapid benefit after a fall in the pound against other currencies then it is the British tourism industry.

It simply shows we are now a cheaper place for tourists to visit.

But let us be absolutely clear that the fall in the value of the pound against the dollar and the euro is not good news.

It means anything imported from abroad, from basic foodstuffs to parts for the car industry, will be more expensive than it was because the pound now buys less than it did against other currencies. That means things will become more expensive and our money will not go as far. So we’ll be worse off.

A weaker pound is often cited as being good for exports, of course, but the key to benefiting from that as a country is not just to sell the same amount of goods for less than before while living in a country which has just become a lot more expensive.

To really benefit from increased exports with a weaker pound we need to make more, to boost productivity.

That can be achieved through greater investment in technology, which surely should be more incentivised through the tax system than it presently is; better training for management as well as staff; and, in the longer run, higher investment in education to produce the most flexible, effective workforce possible.

All this is especially important if we can no longer rely on importing cheap immigrant labour when we want, as we may no longer be able to do in future, and if our future attractiveness to inward investment has suddenly been thrown into doubt.

This is undoubtedly the case after we chose to leave the European Union, putting ourselves outside our nearest major market which was right on our doorstep. Of course, we must simply make the best of it – as we report, the leaders of our car makers in the North East have decided.

They are optimistic that their record of innovation will see them through.

But they are under no illusion. They know they are facing a far tougher situation now.

For the moment, there are reasons to be cheerful and optimism is a virtue in itself.

But let’s not kid ourselves because there are some points of light: we face a future which will demand the stoutest of hearts.