Former work and pensions secretary David Blunkett has urged advisers to keep telling clients to think long-term, and that the worst of the uncertainty may soon be behind us.
Speaking at the Money Marketing Interactive conference on Thursday, Blunkett reflected on the peculiar state of current affairs, how we got here and where we go from here.
Blunkett, who also spent time as home secretary and education secretary, acknolwdged that “the world looks awful from where we stand at the moment”.
However, he added that “nothing is ever as bad or as good as we think it is”.
He said: “We will get there, we will pull it of, we will restore our reputation as a country. And your advice, if I can be as bold, must be for people to look to the long term, to see that things can turn around, and we will get it right in the end.”
Blunkett said that we are now in the period of unknown unknowns.
“None of us can predict what’s going to happen in the next weeks. When this conference was first set in trail, it was presumed that last Friday we would have left the European Union. It’s now still uncertain as to whether we will.”
Blunkett was clear to identify the culprit of the uncertainty: his “own political class”.
“The decision to have a referendum was a catastrophe. The debate in the referendum was appalling. The immediate aftermath was an opportunity to get a grip, and that went pear-shaped with the extraordinary decision of the prime minister’s to call election.”
“To mess up the election particularly messed up on social care actually, which relates to some of the advice you will be giving to people.”
Blunkett offered his long-term vision by laying out forms of economic injections, that were used in the past: payment protection insurance compensation, quantitative easing and pension freedoms.
Blunkett’s recipe for long-term growth was infrastructure projects, where he saw a chance for fixing the divide between the regions in the country.
“Apart from London and the South-East, the rest of the country does’t compare with the best functioning and the highest productivity growth areas of Europe – in fact the rest of the world.”
He said that to achieve this, a public-private partnership would be needed – an equivalent of German re-unification, that reaches out to regions and dramatically changes the gross value add of labour and productivity in the rest of the UK.
He said: “With expansion of Heathrow, the opportunities are enourmous if we can take them and spread them across Britain so it’s not just overheating London and the South once again.”