World is watching our success, says HAMISH MCRAE

It’s party time. This ordinary holiday, of course, but also the upcoming big weekend of the coronation, something that hasn’t happened since 1953. This is a week in which the country parades around the world.

There is the economic impact, and that is a useful boost in difficult times. But much more important is the human impact, what it tells us about ourselves – our hopes and our fears.

There is a parallel with the 1950s. The coronation of Queen Elizabeth marked the end of post-war austerity. The Conservative government that had come in 1951 sought to dismantle the remaining wartime controls, but rationing was still in place at the time, with rations required for meat, sugar, butter and eggs.

But in 1957, the consumer boom that followed enabled Harold Macmillan to declare, “Most of our people have never had it better.”

Over the past 15 years, the people of Britain have been through a period of austerity that, while nothing like those grim post-war years, has officially pushed average wages to no higher levels than they were in 2008.

While the official measure of living standards probably underestimates the benefits of the smartphone revolution, times have not been easy.

Can we now look forward to ‘never had so good’ years again? Most people’s immediate response would be to say no. But then, in 1953, as some of us who were kids at the time will remember, things looked pretty bleak, too.

Our cities were still devastated by the bombings and anyone who could afford a new car had to be put on a waiting list because as much as possible had to be exported to help pay the war debts.

The coronation looked dazzling at first glance, but behind it was a grey, troubled Britain – worried about the housing shortage, worried about high taxes, worried about the national debt.

Headwinds will continue in the 2020s as they did in the 1950s, but with one big caveat, there are good reasons to expect them to be better than the past 15 years.

I’ll get to the caveat in a minute. Those solid reasons start with one feature that will be very apparent this coming weekend: people all over the world are interested in what’s happening here, as global ratings will show.

The funeral of the late Queen Elizabeth drew huge crowds. But that was a sad event looking back. Viewership may be lower on Saturdays, but they will be big by any measure, and this is something to look forward to.

The challenge now is to translate that global interest into economic activities that benefit the country so that the 2020s, like the 1950s, become a period of solid progress. That challenge requires a focus on doing better where the UK has a clear competitive advantage. We must reinforce success. That makes for a long list. The UK is the world’s largest net exporter of financial services, with a surplus of £63.7 billion in 2021, just ahead of the US with £62.5 billion. No one else is close: number three is Singapore, at £19.4bn, followed by Switzerland at £18.6bn.

One of the puzzling things is that this success story is no longer praised outside the city. But there are so many other areas of excellence, including pharmaceuticals, education, creative arts, high-tech manufacturing, design and, yes, media, that need better support.

That means not listening to every commercial pressure group. But it does mean that the authorities should at least make sure they do no harm. That leads to the huge condition that we have no stupid mistakes in policy. We have seen governments on both sides make unforced mistakes over the past 25 years that have damaged the economy.

There are currently two issues this paper has focused on: the damage to the tourist and luxury goods industries from ending the VAT exemption on purchases made by foreigners, and the way UK pension funds have been encouraged, almost forced, to divest from British industry. .

Both are ridiculous. We don’t charge VAT on exports, and I suspect if you asked most pension savers if they wanted to invest more of their money in Britain they would say yes.

One last thought. The fastest growing economies in the world are outside Europe. They will increasingly become our markets in the 2020s and beyond. They are coming to see us this coming weekend. We should look to them as drivers of our future prosperity.