I read an article recently which said younger generations don’t want to pay so much tax, feeling that they’re being burdened with the cost of funding older generations’ pensions. The belief is that by the time they get there, pensions will either have been means tested, the age moved further out of reach, or reformed in some other way. In short, they think they’re paying into a system they may never benefit from.
Breaking the social contract
I understand. It breaks the social contract. Successive governments have been more interested in securing votes than in making sustainable choices. Take the Triple Lock for pensions, for example. It guarantees that the state pension will increase by whichever is the highest out of inflation, average earnings growth, or 2.5%. It sounds great, and of course nobody wants to see pensioners struggling. But the reality is that it has also been a way of securing votes from a generation that turns out in higher numbers.
The country has to start thinking not only about what is nice to have, but what is truly achievable. Balancing the books is really just a very large-scale version of running a business. We have unpredictable money coming in, costs that are not always under our control, and overheads that mount up quickly. If a business continually hands out bigger pay rises, benefits, and high overheads, without the income to sustain them, it eventually collapses.
Burning through the cash
At the moment the UK is acting like a business that is burning through investors’ cash. We are a high spending, high borrowing nation. Raising taxes is a bit like raising prices on a product that is losing popularity. It might work in the short term, but it will not solve the problem in the long run.
During the Industrial Revolution the UK led the world, creating huge wealth and reshaping society. But it wasn’t without its faults. However, we’ve made great strides since then in Health and Safety and workers’ rights. Crucially though, it has also shown what is possible when Britain chooses to lead. That revolution is long gone and so is much of the money it generated. Now we are in the middle of a new revolution, in tech and AI, yet the UK feels like it is playing catch up rather than leading. In a world where borders matter less and less, we are becoming a less attractive place to start and grow a business. That is the opposite of what we need.
Shaping the future
If we want to sustain higher living standards we have to succeed in the areas that will shape the future. To me that means focusing on the environment and on engineering. Climate change will affect every one of us, so why not lead the world in tackling it? Why not become the country known for producing the best engineers and giving them the tools to solve the biggest challenges of our time?
Sadly, training to become an engineer is still burdened by the same high university fees I faced. Years later I have paid tens of thousands back on a student loan, and yet still owe more than when I left ten years ago, due to the interest. That is hardly a recipe for inspiring talent.
If we don’t find a way to adapt and lead in areas such as tech and engineering, we will end up like a struggling business that simply keeps raising prices. Customers eventually walk away, and in the case of a country, taxpayers may do the same. When that happens, it is no longer the liquidators that arrive, but the IMF.
Making the tough calls
Business owners know this pattern all too well. We make tough calls daily to keep our companies on a sustainable footing. We adapt, we pivot, we innovate. The country needs to do the same.
I am committed to doing my part. I spend time inspiring the next generation of engineers through outreach, and I believe every business leader has the power to make a difference in their own sphere. But individual action isn’t enough. What we need is a national plan with vision and courage.
As business leaders we know that change is uncomfortable. It is risky. But it is also the only way forward. The Industrial Revolution showed what happens when Britain dares to lead. The question is whether we will choose to lead again, or whether we will accept decline. The future standards are not just something we inherit. They are something we engineer.
