The other British economy: low productivity and no manufacturing strategy

There was plenty of data out this week suggesting a bleaker economic picture than that painted by the government and the media.

This week’s figures on manufacturing growth from the Office for National Statistics (ONS) proved to be weaker than expected and they demonstrate the need of a robust manufacturing strategy and leadership from the government – neither of which is happening.

The ONS published figures on Friday showed that manufacturing output rose by 0.3 per cent in December last year – less than the 0.6 per cent predicted.

On top of that news comes a warning that lagging productivity poses a risk for the UK’s medium term outlook and recovery.

The National Institute of Economic and Social Research (NIESR) has warned that low productivity would continue to pose a challenge for the economic outlook as it limits wage growth.

“Our forecast remains one of a gradual improvement in productivity, but continued stagnation poses a downside risk to the UK’s medium-term prospects,” NIESR said.

The NIESR also pointed out that growth was being fuelled by the housing market – and it expects this will continue for the next two years.

This is hardly a basis for re-balancing the economy as current growth and rising employment (through agency and temporary work) has not brought about an upturn in productivity.

The fact is that the figures paint a more realistic picture of what is happening in the economy than that being spun by the government and the media.

8 Responses to “The other British economy: low productivity and no manufacturing strategy”

  1. neilcraig

    Of course all 3 of the cartel parties (4 if you include the Greens) are actively pursuing a policy of low productivity and impoverishment. They all know we could be achieving at least rest of the world average growth (6%) if the adopted UKIP’s policies which is why our state owned media censor any mention of them.

  2. John

    I can see no straight-line correlation between your claims at all.

    Why include the Greens as a Cartel Party? UKIP has greater support across the country, but both have very minor voices in the Commons

    What evidence do you have that ALL parties are persuing a policy of low-productivity and impoverishment?

    Where did you source your 6% World Growth rate. The sources I use, (mostly the World bank and IMF) have figures between 2% and 4%, making our average fairly, well, average.

    Given how much media attention is given to UKIP generally, and Nigel Farage in particular, and how little is heard of far-left alternative (like the ‘Cartel’ Greens), what reason do you have to accuse the BBC of censoring them?

  3. neilcraig

    The Greens agree with the rest of the cartel on cutting power supplies, raising prices, EU membership, ever more government parasitism, political correctness, mass immigration etc. In fact they look like the spume on the wave of the cartel.

    Not all parties. UKIP are in favour of free markets and ending fuel poverty. ALL parties know that would bring growth but the cartel oppose it.
    The IMF recently said 4.8% growth. The EU Is in recession and is about 20% of human gdp so arithmetically that makes the rest averaging about 6%.

    The “attention” given to UKIP by the state owned media is overwhelmingly smears (eg adding a Hitler moustache to Farage). They simply censor policy discussion. The nearest to a policy discussion was the attack on Bloom in which they could not avoid mentioning he was opposed to foreign aid if they were to say anything about what he said. As it turned out the vast majority of people agreed and they haven’t dared even that much policy coverage since.

    On the polls, if the state owned media were not censoring UKIP spokespersons would be on about 4/5th as often the LabCons – probably about 8 times a day on BBC1.

    If the BBC were 1/8th honest and only 88% corrupt totalitarian fascists they would be on once a day.

    If they were as much as 1% honest and onely 99% corrupt fascist filth whom any honest MP would have had to denounce, a UKIP spokesman would be on about once a week.

    I invite you to start listing.

    Then watch a rare interview with UKIP & compare with a Green. Which one do you think is going to get to talk without interruption? Which one will be given sofr voiced easy questions? Which one will be invited to explain how they are saving the world? Which one will be asked “some people say you are a racist – how do you answer that” or similar fact free non-questions. Include the way they do what interviews are allowed and you will see the BBC come significantly above 99% corrupt fascism.

    In all which parties are obviously benefiting from being part of a totalitarian state cartel who own or fund the media?

  4. John

    Some excellent points, though I do contest some of them.

    I will freely admit that we hear very little of UKIP policy, but then we hear little of Green policy as well, Truth be told, recent analysis of the BBC (a link to it is on this site) shows it is somewhat left leaning and yet we STILL hear nothing of the greens. I maintain, therefore, this isn’t censorship of UKIP, but censorship of ANY non-major political party. After all; Conservative, Lib-dems and Labour ALL have a vested interest in suppressing the voice of the opposition.

    UKIP may well be in favour of free markets and ending fuel poverty, however unbridled free markets were attempted (or at least worked towards) under Thatcher and it ended not at all well, and indeed contributed to the last economic crisis. If the banks HAD been allowed to fail (as a free market would dictate they should) the world economy would’ve collapsed and we’d be MUCH worse off than now.

    On top of which, if a business has a great deal of money they WILL spend it on influencing people in power, that would include UKIP politicion should they ever form a government. This would end free market, and we’d be right back where we started. It is far better to have an openly regulated market. At least that way, everyone knows where they stand.

    The EU produces roughly 20% of the worlds GDP, I agree. This says nothing about the growth rate of any other country. Just because the EU, with 20% of the pie, is growing at x%, doesn’t mean any other GDP grows X/20%*[share of world GDP].

    The two amounts are unrelated.

    The government would earn far more money if we were more productive. The correlation there is clear. More money earned means more money gained through taxes and more spent in the shops, earning more VAT and corporation tax etc etc.

    Persuing a POLICY of low productivity is literall suicide. I would say it’s more that an idealistic policy of non-state intervention is being persued, complicated by the fact that vocal groups (with some public support) contest individual parts of the broader policy (such as in education, NHS and transport to pick recent examples) resulting in a patchwork policy. The distinct downside of this is that the state ends up paying more for some services, and drives down production generally as growth stalls.

    In short; politicions are being idealistically niaive and very stupid. But whats new there.

    This all being said I very much hope UKIP DO come into power. The EU needs to sort itself out (which UKIP, at the VERY least, would do), and politicions need to reconnect to their constituents and learn to listen once again. An ‘extreme’ party like UKIP making it to the commons would certainly panic the ‘mainstream’ politicions into doing this.

  5. neilcraig

    3 years ago I did do an estimate of BBC party coverage based on mentions on their site and concluded that UKIP get 1/40th as much coverage per vote as the Greens http://a-place-to-stand.blogspot.co.uk/2011/05/how-you-can-easily-check-how-corrupt-in.htm Since then the UKIP vote has gone way up. I suspect what has happened is that their coverage of the Greens has been scaled back a long way because if they were still giving more to them the censorship would be embarrassingly obvious.

    That large industries use their wealth for lobbying is indeed common. The argument for capitalism is not that capitalists are uniquely moral, in fact they aren’t, but that the system works fairly well relying on self interest whereas socialism works well only when run by saints.

    In fact experience does not suggest that Labour politicians are any less likely to be bou8ght than Tory ones (eg the Bernie Eckleston case). Indeed they may well sell out for a cut price. The only way to cut lobbying for government favours is to cut the amount of gdp the government spends (nearly 50% now) and make its rules fair and transparent so that the bureaucracy can’t pick and choose. The Tory record on that is bad and Labour’s is abysmal.

    I will disagree about how much pure free markets were tried by Thatcher let alone whether they failed. This is about a paper which made a statistical analysis of world economies http://a-place-to-stand.blogspot.co.uk/2009/08/habits-of-highly-effectie-countries.html
    and found not only that free markets did better but that there was a strong, not absolute, correlation between how free and how successful. I find it convincing & if so the way to economic success is through government getting out of the way. One can see why politicians and bureaucrats are not drawn to this solution.
    Thanks for the friendly words about UKIP – this is rare on those who think of themselves as “left”. As a former LibDem I think almost all of our policies are liberal (in the original meaning of the word) and quite a few (PR voting, right of public referenda, growth rather than Luddism, asking the people whether we should leave the EU) are not only “leftist” but so much so they are to “extreme” for Labour today..

  6. John

    It’s why I put ‘extreme’ in quote marks. Compared to even early Labour UKIP actually isn’t an extreme party at all, however it’s perception is far-right so thats the image it’s stuck with for now.

    I would look at your link, and scrutinise your findings except apparently the “page is not found”. I was basings my conclusion on this piece of work

    http://downloads.bbc.co.uk/bbctrust/assets/files/pdf/our_work/breadth_opinion/content_analysis.pdf

    Since I can see no percentage in the BBC branding itself a slightly left-leaning organisation (and since everyone compalins their biased) I’m inclined to believe the conclustion.

    I don’t believe I argued that Capitalists are moral. I was pointing out that the minute a large corporation uses business pressure to alter a political outcome in their favour the market ceases to be completely free. Absoluate capitalism is as impossible as absolute socialism (as Russia rather conculsively proved). Since we can only have gradiation of capitlaism and must legislate to limit the amount of influence corporations can have over politics we may as well have a structured economy so everyone knows who can do what and for how much.

    It would appear, on your next paragraph, that you agree with me and we are merely arguing philosophy and semantics.

    Singapore is a good example of a free market and is doing exceedingly well, I agree; my point was that under Thatcher we moved closer than at any other point I know of in British political history, and it caused huge amounts of unrest and generations of damage to our economy and society. How much of this is directly attributable to the free market model is arguable, but trying to argue that NO damage was caused by the free market model is practically indefensible.

    Whether the British economy is systemically opposed to free markets, or we’re societally opposed is irrelevant.

    The final point I wished to make about free markets is that even America doesn’t embrace them; when a ‘too-big-to-fail’ bank threatened to fail the government bailed them out. This is in direct opposition to free markets. Free markets would’ve seen those bank crash and burn, bringing the world economy (including Singapore) down with it. Free markets may self-regulate, it’s true, but I evidence shows the regulate in favour of the entities which exist within their system; the corporations. NOT the people who support it; the workets.

    I suspect, therefore, that a global free market is as implausible as global socialism, though it would be fun to try them both. In many ways capitalsm and socialism coexist in better harmony than capitalism and democracy.

  7. neilcraig

    Thanks, that was an interesting if complacent report
    “UKIP coverage has dropped from 2.7% to 1.4% which is surprising”
    “UKIP got only 2 items on the EU …..which is ample”
    Indeed particularly when they later say that the methodology greatly understates LabCon coverage because it counts a long LabCon interview as equal to a 3 second soundbite from Farage.
    Also throughout almost all mentions are the LabConDems, even claiming the Dems as the “3rd party” which in terms of viewer/voter support they certainly aren’t
    If freedom of speech is a necessity for democracy, Britain isn’t one.
    ========================
    I would agree that absolute capitalism is impossible, as, history demonstrates, is socialism. That doesn’t greatly impinge on whether we can, or should, get quite a lot closer.
    Incidentally the ruling party of Singapore, which I agree is an outstanding example of success, started as officially socialist and, though economically capitalist, does provide a welfare safety net better than ours. It is marginally poorer than Hong Kong which is as free market as you get but the difference is not sufficient to class as major.
    ———————-
    Incidentally I forgot to explain the 6% world growth figure last time:
    (20/100 x 0%)[EU growth} + (80/100 X 6%)[rest of the world] = 4.8% {the IMF estimate I mentioned].

  8. John

    Oh we’ve not had freedom of speech in this country for years. Nor do we have a law garunteeing it. What we DO have, is laws against people speaking out in ways which can disturb the peace. 1984 is not so very hard to reach even with our current laws, but thats a seperate debate.

    Certainly we don’t have free speech, nor a free press. Which is why, if you want the truth of a matter you need to source from a variety of papers or, better yet, find the raw data from which their stories were drawn.

    I agree. The question thus posed, then, is where the line should be drawn. I have no answer to that, as I have not firmed my opinion on this matter. My politices are a mix of libertarian and free market theories so I tend to judge on a case-by-case basis. Not conducive for sweeping statements that.

    I know this well, and I see both it and China as vindication of my view that capitalism does not require democracy, nor does it exactly flourish within it.

    Thankyou for those links; they both work and shall provide me with reading material I shall scrutinise. Thank you also for expanding my knowledge. It is always a pleasure.

Leave a Reply