John Mills – the Labour Leaver with all the right ideas on economic growth

When and if Boris Johnson becomes Prime Minister, his first call from No 10 should be to John Mills, the home-shopping tycoon at his HQ on a run-down industrial estate near Kentish Town.

That’s where Mills runs JML, the highly-successful TV shopping channel which sells everything you might ever need for the home from ironing board covers to frying pans to gadgets that clean grouting.

Starting from scratch decades ago, Mills imports and exports more than 1,000 products which he sells either through his TV channel or the UK’s big supermarket chains. He does business with more than 85 countries.

From the outside, Johnson and Mills could not be more different. Mills is one of the Labour party’s biggest donors, a former Labour councillor and one of the party’s grandees – he was married to Dame Barbara Mills, the first woman to be Director of Public Prosecutions, and is the brother of David Mills, who was married to the late Dame Tessa Jowell, a Labour Cabinet minister.

Yet Mills is a life-long eurosceptic, was the former chairman and deputy chairman of Vote Leave, the cross-party group campaigning for Brexit, founder of Labour Leave and joint chairman of Business for Britain. He first campaigned to come out of the European Community in the 1975 referendum when Johnson was still in short-trousers.

So, they would have much to talk about and surprisingly I suspect they would agree on a lot. Like Johnson, Mills believes that the UK will flourish outside the European Union. Like Johnson, Mills also believes the only way to renegotiate with the European Union is to keep no deal on the table as a threat.

Indeed, a recent report from Labour Leave, “It Makes No Sense To Throw Away Your Strongest Card”, called for the party to keep no deal on the table because otherwise it could drive Labour voters away. According to Mills, taking no deal off the table would “drive our nativist working-class traditional voters into the arms of the Tories or the Brexit Party.”

As well as sharing notes on Brexit tactics, Johnson might be more than open to listening to Mills’ radical ideas on improving the UK’s post-Brexit economy. They are ideas which Mills has put together with perfect timing in a new book titled, Economic Growth Post Brexit: How the UK Should Take on the World. He has an optimistic message, arguing that Britain now has the opportunity of a lifetime to lift growth – and rebalance the economy – if only the politicians and bankers would pull the right levers. Paradoxically, these are levers which a new Conservative leader might be more interested in than Labour’s front-bench, obsessed as they are with nationalisation and ownership rather than growth.

Central to Mill’s case is that politicians and central bankers must embrace a weaker currency to revive British industry, in other words, a devaluation. He claims sterling’s relative strength over the last few years has been “lethal for manufacturing”, making it impossible for British exporters to sell their products overseas.

Instead of focusing on the 2% inflation target, central bankers should be going for growth and improving the balance of payments deficit, he says. As he points out, over the last decade or so the UK’s average growth rate has been 1.4% per annum, some 60% below the 3.5% world average. And that’s not good enough for Mills: “We could do very much better than this because our poor performance has not been caused by inevitable forces.”

As he told me this week, the UK is growing so slowly because the economy is extraordinarily unbalanced with one of the lowest rates of business investment in the world and low productivity levels.

The UK spends around 16% of national income each year to invest in the future, peanuts compared to most other countries which invest around 26%. China invests up to 45%. More worrying, only about 2.7% of GDP goes towards the more productive forms of investment such as new technologies, machinery and equipment. By contrast, the bigger share of investment goes into road, rail, office blocks and shopping centres, areas of investment which produce returns of little more than the interest charges needed to finance them and are therefore unproductive in terms of growth.

What we need instead is more capital-intensive investment in high-powered industrial areas – new computers or medical equipment which creates longer term wealth; the sort of productive investment which countries such as Germany, Korea, China and Singapore are making but which the Brits are hopelessly bad at.

That’s why Mills is so angry with the fashionable thinking of most politicians and policy-makers who have turned their backs on manufacturing, arguing that it’s old fashioned and that Britain should instead concentrate on its services.

Baloney, says Mills: “This is surely both a counsel of despair and one which is totally at odds with our history and practical experience. Unless we envisage a future in which we go on selling national assets to finance a standard of living which we are not earning until eventually the markets turn against us and the pound crashes, we have no alternative but to export more and import less. And the only way we can do this is to import less and export more.”

He excoriates both Labour and Conservative for having allowed the collapse of manufacturing from 15% to today’s 9%, and for permitting “reckless” de-industrialisation of big parts of the country outside London. Mills is also rightly concerned that unless radical remedies are taken, the huge gap in living standards between London and the regions – which led to such heavy Leave votes outside metropolitan areas – will continue to widen.

What’s more, he warns that recent growth rates are not sufficient to avoid real wages for most people in the UK stagnating or falling further. “This will continue to undermine faith and confidence in our ruling elite… and it leaves the UK as a nation steadily falling further and further behind other countries, losing more and more status and influence in the world.”

Whatever your politics, Mills has many credible ideas for rebooting the economy, and mending the deep social divisions of which Brexit was the outward manifestation. Whoever gets into No 10 should ask him to drop by.

Maggie Pagano,
Executive Editor,
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