Last time we elected supposedly strong governments both in 1979 and 1997, the following few years saw the Pound go up in value and it was a disaster for the West Midlands.

The Pound went up most especially against the Deutsche Mark currency of our most important industrial competitor.

At the start of the 1980s and at the start of the 2000s WM manufacturing was seriously undermined by the consequent loss of price competitiveness. The 2 episodes are far more alike when now looked back upon than they seemed at the time.

When the Pound went up in the early years of Mrs Thatcher it displaced the British Leyland based Midland car industry from its dominance of the UK car market. Ford and General Motors came to dominate the UK car industry with vehicles that were imported from the continent and especially Spain and Germany.

The spectacular rise of the Pound in the early years of Tony Blair finished off Rover.

With a hung Parliament the most likely outcome of the election and the ‘city’ suggesting that this will see a potential fall in the Pound, one has to ask is this necessarily worse than the few years following 1979 and 1997 ? Maybe it would even be better for the West Midlands ?

However despite all the speculation the slide in the Pound does not seem to be even beginning to happen. While the Dollar and Euro rate move from day to day, the broader basket of relevant currencies in the Bank of England’s Sterling index (The Effective Exchange Rate) is holding steady.

Andrew Lydon