Commentators and politicians have cited this year as being a return to the 1970s but this is a poor analogy as society and industry was very different then. It could be argued now it is worse as there are several intractable issues. 

Firstly, the labour market is very different now with a greater number of older people of whom the majority do not work and don't add to the nation's exchequer by paying income tax. In the 70s there were more secure jobs – sometimes jobs for life. Now that would be nice without the ever present fear of ‘down-sizing.’

Inflation hit 22.5% in 1975 but it may surprise many that inflation was in single digits going into the decade rose sharply in the middle before coming under control by 1978 before peaking again at the end of the decade. There were three Governments in the 70s - Conservative, Labour and Conservative - so it is hard to lay the blame on one or the other.

Like the early 70s there was an oil crisis when Middle East war saw prices hiked as they have been over the Russian Ukraine conflict. Then many economies still used coal to generate electricity but today the ecological crisis has seen a move away from fossil fuels leaving the UK and other western nations vulnerable to the cutting of Russian oil and gas. In the 1970s after the Middle East war it was more a fuel shortage that was the problem rather than the eye-watering price rises of today.

Today's GDP is lower in real terms compared to the 1970s when we still have a strong manufacturing sector. Steel producing, coalmining, ship building, and nationally owned transport and utilities meant the economy was sounder (if as many will argue - less efficient) than today's free markets.

In the 1970s both Ted Heath’s Conservative administration and the Labour Government both had a policy of full employment. The idea we had to rely on Romanians and Latvians to help harvest fruit and veg, drive delivery vans or care for the elderly wasn't even thought of. Those workers were locked in behind the Iron Curtain. Unless we can access large numbers of workers from abroad then the crisis of a lack of workers will continue and those in jobs who see their wages degraded by inflation will increasingly take industrial action.

This year there has been a huge rise in business insolvencies – in part due to the hangover from the pandemic but even before that the numbers of firms going out of business was massive. Back to the 1970s and there were far fewer business insolvencies, in part due to there being fewer small and medium sized firms and less self-employed. If we could return to the levels of lower business failures of those times, then the Insolvency Service would be delighted and there would be fewer bankruptcies as a whole – and fewer lives damaged by debt and redundancy.

Stagflation is now being warned about - but so far one of the worst aspects of the 1970s is yet to appear in today's troubled times. That's a combination of a declining economy and high inflation. That is one aspect of the 1970s that can be seen as a potential parallel to today.

So, a strange mixture of factors - and it helps to remind us all that no two recessions are the same. The 1970s were so different economically, the 1980s boom and bust were coupled to a rise in house prices and privatisation, the dip in the early 1990s was a hangover from the last downturn of the 80s and then there was the credit crunch of 2008-09.

It may be an unfashionable idea for some, but the policy of John Maynard Keynes is one solution: invest in infrastructure to trade our way out of recession. Duelling trunk roads like the A303, reopening more railways lines and stations plus the electrification of more lines - and the extension of HS2 will all create more jobs and business. And there are many more projects which would make a huge difference if implemented - from urban tram systems to upgrading and rebuilding NHS hospitals or state schools.

And again, not a popular course for some but the Conservative MP Tobias Elwood’s suggestion of re-joining the EU single market makes a lot of sense.  It would reopen trade, solve the Northern Ireland protocol, end the queues at Dover and airports and bring in the workers needed in a variety of sectors.

At the moment entrenched Government positions and political ideological are hampering a recovery which most people in business find frustrating. So when politicians say today's UK is like the 1970s - they are talking nonsense. The 1970s also had the joys of punk rock and disco, films like Jaws and The Godfather, and it can be argued the beginnings of modern 21st century Britain began with equal pay for women, the children's welfare act, the establishment of the Green Party from the old Ecology Party as the environment also got a Government department and during the 70s the numbers of homes without a shower, bathroom or central heating fell dramatically as the housing stock went through huge improvements. 

So the next time someone says it's back to the 1970s - welcome the notion - but do look for a pair of flared trousers first.

Harry Mottram