Is the Chancellor about to crash the economy?

[Startingagainandagain]

I will start by saying I voted Labour, but I am increasingly concerned about what the government has done so far.

Today there are warning that food prices could shoot up, the pound is going down, there were big jitters on the bonds market and government borrowing is higher than planned.

More generally Reeves seems to have spooked businesses and they have no will to expand or employ more people.

I agreed that the Tories left a total mess.

But Labour seems to just go from bad to worse and I am really starting to wish she could be replaced by someone more competent to restore some confidence.

Not surprising as London has sucked all the jobs out of the regions into London, with the closures of regional offices etc. If the statistics were changed to reflect customers, then London wouldn't look so good, as most of it's customers generating the business profits are outside London and the SE, but the statistics show London as that's where the head offices are located.

Not even that far North. I'd say more like Birmingham. Manchester, Leeds etc have been starved of investment for decades. Just look at the poor state of the railway network - it's an absolute shambolic disgrace. Then you have a huge city like Leeds without a tram system.

Try living further North than Yorks! We don't exist when it comes to funding or investment

I think a lot pf regional offices went off-shore to Ireland and beyond. If we dropped our tax rates, sorted out GDPR to work for AI, and did a little “boostering”, we might get something going.

The energy grants should never have been non means tested! There are so many who didn’t need the grant, who had plenty of savings, who received it just because of their age.

At a time when others needed it more!

Im not convinced Labour will do a worse job than the Tory’s, sorry.

There'll always be inconsistencies when you start the means testing. Just look at the fiasco that Rishi made with the Covid grants - 3 million excluded, many basically on the toss of a coin. Loads of people got grants they didn't need and loads were desperate but got nothing.

Mistakes with the implementation of Covid grants are, to a certain extent, understandable. They had about 48 hours to formulate and communicate a plan for someth8ng that has never occurred before and for which they had no plan The energy grants should have been much better thought through from the start - there was no deadline other than a self imposed one.

They had 18 months to correct the initial faults and deal with the issues - rishi chose not to and instead he lied to try to cover up the mistakes.

Oh I agree, the mistakes should have been fixed. But they were at least understandable in the first place because of the immense time pressure. But that didn’t apply for the energy grants

Wrong. I recall the 60s Labour government. Most ppl would swap in a heartbeat. The affluent seaside town I worked in back then is now unrecognisable. Streets full of alkies, druggies and mentally unwell and disabled people. Office blocks idle , shops boarded up etc....

And you think all that and the recent changes is all down to UK politics??

Seaside towns deteriorated because of cheap package holidays to the Med, not because of any government.

We lost most of our industrial base due to the Worldwide move away from fossil fuels and towards manufacturing in cheaper far eastern countries.

We don't live in a vacuum. What other countries do, and Worldwide technical developments have a much greater impact than our own politicians.

We lost most of our industrial base due to the Worldwide move away from fossil fuels and towards manufacturing in cheaper far eastern countries.

We lost it long before that. Thatcher’s policy was to make the UK economy service industry based.

The closure of Customs , VAT , Inland Revenue and Telecoms regional HQs in said town probably had a greater effect than holidays to the Med.
That and outsourcing/ privatisation.

It started long before Thatcher! More coal mines had been closed before she was elected than during her tenure. Beeching ruined the train network back in the 60s mostly because of the reduction in transport needs of our declining manufacturing base. Package holidays to the med started before Thatcher. You really can't blame her for everything!

My seaside town had none of that, it really was just a holiday resort, so such closures weren't the cause. We definitely didn't have any tax offices as I started my accountancy career in the early 80s so knew exactly where our nearest offices were for IR, VAT etc., which were all in the nearby city. The real cause was package holidays along with the lack of "mill closure weeks" from the Lancashire/Yorkshire mill towns in the Summer, which stopped because the mills closed.

It started before Thatcher but it was only in the course of her governments that it became a deliberate policy. 1.78 million manufacturing jobs disappeared between 1980 and 1990.

Maybe you should recognise her as the visionary she was?

All the most valuable companies in the world are design and service based.

Apple - design and services with outsourced manufacturing.

Microsoft - software and services.

Facebook - services.

Google - services.

Tesla - describes itself as a software company.

Nvidia - design and outsourced manufacturing.

Manufacturing actually grew under Thatcher, but the unions had made far too many industries uncompetitive - e.g. ship building.

The dockyards wanted to invest in new technology such as arc welding, but that meant job losses for riveting gangs, so the unions said 'no' to arc welding unless there were no job losses. There was no point investing in the new technology unless there would be cost savings, so they didn't bother - but the Swedes, Taiwanese, etc, did invest and took all the business.

You can't blame Thatcher for putting massively loss making industries out of their misery. If the unions hadn't attempted to bring in communism by the back door, then they'd probably still exist.

Manufacturing actually grew under Thatcher

How can that possibly be true when 1.8 million jobs were lost? It’s nonsense.

I’d like to hear a little more about how the unions of the 70s and 80s attempted to “bring in communism by the back door”?

Oh dear.

Oh dear indeed. AI …

It's tragic that's your best comeback.

https://www.bbc.co.uk/news/business-35414075.amp

But entirely predictable that you don't understand productivity and it's impact upon manufacturing jobs.

*If we look at the history of manufacturing one thing is very clear. Fewer of us work in it than used to. In 1841, it was more than a third of the working population and it remained reasonably steady for 120 years. At the time of the census in 2011 it was down to 9%."

I think you’re making the mistake of thinking that because manufacturing as a % of GDP fell from the 80s to the 00s that it fell in absolute terms. And I’m not sure that’s right. As for much of that period GDP grew rapidly, and we overtook both France and Germany. So it’s more likely that the jobs lost were in low value unprofitable activity, and the growth in GDP came from increased productivity from higher value manufacturing and services activity.

Now we have a productivity issue now, relative to our more industrialised neighbours, which is partly that it’s harder to measure productivity in a services economy, and partly that it’s also harder to improve it. Buying better machinery has a positive impact on productivity in a manufacturing business, but a new laptop and printer doesn’t really shift the dial on productivity for a services business. AI could materially help here I think.

blogs.lse.ac.uk/politicsandpolicy/mrs-thatchers-industrial-legacy/

Very interesting link, and thanks, @Tryingtokeepgoing.

Reading the paper this morning, I see its author is an adviser to the Treasury and the Chancellor, and is one of the main proponents for a bonfire of regulation that's hopefully going to speed up planning and development. I had not heard of him before, but am suitably encouraged by such appointments.