Economic policy should be based on an over-riding set of medium-term priorities, where industrial competitiveness and structural change by industry are the key issues.
If we had such an approach, entering the ERM at an over-valued rate would never have been contemplated, any more than a policy of running down indigenous long- term energy resources in favour of imported energy.
The new Department of the Economy must take precedence over the Treasury and be responsible for both short-term and medium-term policy. Otherwise, when a short-term crisis occurs, it will eventually suffer the same fate as the Department of Economic Affairs in the Sixties. It will need to be a super-ministry, headed by the Prime Minister.
The key question for national recovery, therefore, is whether our political system is capable of implementing such a major institutional change.
European Industrial Forecasting
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