Video Transcription:
Hi guys. So can the UK beat off the global recession that's coming at some point in the future? I mean, I'm saying I think it's probably May, June 2021 after Trump loses interest, wins a second term. I just don't think he's going to be beaten. I think there's too many people that I just believe his lies and his... I mean, amazing as it is. But anyway, let's not talk about American politics. How does the UK come and avoid this?
So guys, just before we get started, subscribe and any questions you've got, jump in the comments and I'm happy to oblige, happy to record videos, happy to do whatever I need to do to get you the clarity you need to invest confidently and to invest safely in the UK market. And in fact, the principles we've talked about here are applied to pretty much all developed property markets.
But anyway, let's get into it. So the... look, there's three aspects that I look at in the UK right now, things that are going on. All right. And the first one is that we have had austerity since the last recession, continuous austerity. Now, some of that was deliberate. In other words, the government cut spending and did all this stuff, which actually they had to do. I remember back when we hit the recession last time, the average public sector worker, these are people that work for government, was earning more than this, the equivalent position in the private sector. Which for me... and then when you add the pensions and all these benefits and all that sort of stuff, it really shouldn't be that way. But it was just a bloated, a massively bloated labor force in the public sector.
That has changed and in fact like a pendulum, it's swung one way too far the other way where you've got the NHS hasn't got the doctors at needs, hasn't got the nurses it needs. It hasn't got the funding it needs. You've got teachers, you've got, in fact, I don't even need to list all the... pretty much every area's been cut to the bone. There is massive social services that have just been wiped out. And really that will have an effect for a whole generation unless we turn that around.
Now one of the positive things is, is that Boris and the Tories have been talking about turning that around and spending money in those. It's in the manifesto to a degree. But the problem is it's very light on detail in the manifesto. So we'll see what happens there. But the, so that was a story. Now that did turn around and things, they started to spend as especially when in '17 when they, well, they didn't lose the election. They might as well have lost the election though. And they didn't get the majority government and they had to go with the DUP.
So since then, we've had this Brexit, or actually since the Brexit vote, we've really had a self-imposed... and it's almost like a self-imposed austerity where nobody can make a decision. Nothing big has got done in the country since then. There's been no bold leadership. There's been nothing that really stimulates the economy to move. And yet the economy has still done relatively well compared. But if you imagine this, and I look at this. Countries that go through a whole cycle, have this cycle where they go up like this, what we have done is we've actually brought it down and had a bit of a flat period really for the last and if we're honest, it never really got off the ground. London and the major cities, Manchester and Birmingham and those. Those property markets, those markets have done very well.
There's been a whole undercurrent. I mean, if you think about it, back in the last recession, we used to have the financial services was the industry up in Scotland and also here. Financial services was the golden child. Well, that golden child now actually is no, it's still there and absolutely and it's not going away. And all the threats of it leaving with the EU haven't happened. But now we've got other things like startups, massive startup content, not just in London as well. Because now we've got Manchester and Birmingham that have taken over as world cities as well as London, not taken over London. But certainly they're there as well. So austerity is the first thing. We've had austerity for a very long period, which has kept things relatively subdued, which means that when the hit comes, we don't have to drop as far. It doesn't mean that we're not going to see a drop. It doesn't mean that house prices are going to drop. But if you're bought into the best fundamentals, of the areas of the best fundamentals, I think what you'll see is prices will drop and they'll come back up.
Unfortunately, what the austerity has done is in a lot of areas, it's wiped out these areas. And what that means is people who grow up, kids who grow up, don't want to stay in those areas they live in and those suburbs because there's no fundamentals, there's no investment in the area to actually renew the place. There's no jobs to be created because the employers aren't, they don't have the talent pool there, so they've moved closer into the cities. Plus the other side of it is we've got this shared economy culture plus we've got this outsourcing and offshoring culture whereby you can have a team of, say, five people in your marketing 10 years ago. Now you've got a team of one and you've got 10 outsource people. And that's part of specialisation is jobs have become so specialised that you need to outsource to an expert. Whereas, say in marketing, you could have one person who could do many jobs.
So all these factors are coming to bear on the economy. But what the austerity has done is there's no investment in any way or but the major cities or major infrastructure works. And this is where you look at HS2, cross route, major infrastructure and I'm not knocking those things. I think they're fantastic, but when they're at the exclusion of everything else, that becomes a problem. That's what I see as being a bit of a problem right now in the thing. So austerity is the first thing.
I think the other thing is that what we've actually got is this... we've got to stimulate. So as we come into the recession, we're going to have to simulate. Now we don't have the money. The UK doesn't have the money. So it has, it's going to have to borrow, which means debt is going to go up. The good thing is the debt to GDP has come down, okay, which is what should expect as the economy recovers. Yeah. So what we need to do now is we need to stimulate.
Now Boris and the Tories are talking about stimulate the economy. They're pumping money into the economy, they're creating more doctors jobs, nurses jobs, teachers jobs, all these sort of things, social care programs, this sort of stuff we've got to bring back. Because what's happening now is we're fragmenting at the sides. And what that means is this, is that we're, as money's withdrawn from government programs and people become more and more desperate and wages don't keep up with inflation and things like that, then we start to look for people to blame. And it might be the immigrants, it might be the rich people. It might be the billionaires, it might be whoever.
The reality is is the UK is a place for everybody and we're going to make it so that it is for everybody, not just the few. And I have to say Corbyn with his slogan was pretty much on the nose of that. Don't think for a minute that I think a lot of his stuff would have worked. But I think we've got to make it for the many. We've got to make sure that we include, we have an inclusive society, what, rather than what we're doing is with this nationalistic bush. A lot are going to have a problem with nationalism. I'm an Aussie and I love Australia. But the reality is is that I can also sit down and have someone with beers from wherever it is. I'm open to that and that's where we've got to get back to is we've got to start appreciating the differences rather than thinking anyone that's different or that's not like us needs to be excluded and we're going to get back to being a... you know what I mean?
This is... a lot of the stuff that's going on is a lot of the stuff that we saw with Hitler in the Second World War and the way people are acting and the emotions behind it is incredible. We got to start saying hello to our buddy and our neighbour because actually there is a lot of good in things like immigration. Immigration is great from a perspective that we can bring in skills. Now, yes. An Australian based point system. Fantastic. That's going to be really good. But we have to stimulate the economy and not just into the cities or major projects like HS2 or London or Manchester. Those places are actually doing pretty well funding-wise. We're going to get into the secondary cities now and really get those guys working really well. So that's the second point.
The third point I mentioned just briefly is the immigration side. We've vilified immigrants as if it's something bad. Now I'm not saying that the system is perfect and I'm not saying that there isn't abuse of the system, but I think the media has taken way too many liberties. There is a lot of immigrants that come in, do a fantastic job. I mean I've seen it in the development side where we used to have the Polish, a lot of Polish builders. Now, I mean, the money you have to pay builders, and I'm talking brickies and plumbers and these guys is incredible how much it's growing because we just haven't got the labour. Now if you can import that labor, yeah, at a cheaper price. I'm not saying thousands and thousands, but you can keep that in check.
Whereas what you've got now is you've got certain areas that used to be filled by migrants. You're having to pay huge amounts of money and you're even struggling to get people to do it. Things like, Arlene, my wife works in food. Doesn't work in food anymore, but used to work in food and they are struggling massively to get workers to come across and do the seasonal work and the manufacturing work and all this sort of stuff. That's stuff that you can use, you can import the labour for that. Where there's not the locals that want to do it and that's where it can be really highly targeted.
And that's what the Australian points-based system does. It says, "We will give you points based on what your experiences and what your qualifications are. And based on that we'll let you into the country and we'll also put on the restrictions that you can only work in a particular area, which might not be a major city. It may be out in the bush. It may be out in the city, the suburbs." And by doing that, what happens then is you drive that labor there and you fill the need that is, you or the immigration provides. So that's quite good.
So I think how do we avoid the recession? I mean, the third one is going to be controversial because we're just talking, the whole Brexit thing was one of the things was immigration, but I think immigration has its place 100%. And let's face it, guys, unless everybody who is in the country right now is going to go out and have more kids, we are not going to grow as a population. And therefore the economy will at some point stagnate and probably go into reversal. So we have to consider this and go about getting more people. And you do that through immigration, targeted immigration, managed immigration. I'm not talking about just letting anybody in the free borders necessarily. Although, EU, yeah, it was a great experiment. I've never been a big fan of the EU, a lot of the EU bureaucracy per se, but I think, guys, that sort of gives you a bit of an idea and that was a bit of a long rant today.
But I think if we can do those two things, get rid of austerity, which that is a good indicator of why we, I think we'll see through the next recession. I think if we can stimulate the economy, stimulate but not necessarily in those big major infrastructure areas, but get down into those secondary cities and really make them work. Because that is the key I think from now is getting those secondary cities to work together, those property markets working, that employment working. That will actually be really good for us. And the third one is use immigration how it should be used, which is targeted. Bring the right people in. All right. So guys, have a great day. Live with passion and remember to Comment, subscribe, happy to answer any questions. See you later. Bye.
