What decisions could the UK actually take to avoid managed decline?

[JonathanH]

Hard to see this country in anything other than (badly) managed decline.

Indeed, there is no money and that is only going to get worse.

So many demands. So little opportunity to find new sources of money. I do wonder what could be done.

 

[GS250]

The 'West' is in decline. The 'East' is in the ascendency. Maybe its just a natural levelling up of economies?

I know it sounds awfully pessimistic, but I think the zenith of the UK was the 1990s.

 

[Peter Sarf]

I fleetingly saw in the news yesterday that we are borrowing £27 billion this year and currently have interest payments of £13 billion. Have I got that correct ?. My thoughts turned to who owns this country now - if I read it right.

 

[ainsworth74]

See my signature at the bottom of my posts! Or in the original Latin, Treasury dēlenda est (the Treasury must be destroyed).

 

[JonathanH]

Ironically, the BBC are reporting that Jeremy Hunt is going to announce plans for future growth tomorrow, but you do wonder just where he can turn and what flexibility he actually has.

https://www.bbc.co.uk/news/business-64417101

Hunt to set out plan for growth as criticism mounts

By Noor Nanji
Business reporter, BBC News

Chancellor Jeremy Hunt will set out his plan to boost growth on Friday, as criticism mounts over the government's plan for the economy.

In his speech in central London, Mr Hunt will outline the opportunities in what he called "the growth sectors which will define this century".

He will also pledge to build on "the freedoms which Brexit provides".

But it comes in a week the government has faced accusations that it has no long-term plan for growth.

On Monday, the CBI business group warned the UK is lagging behind rivals on green growth.

The next day, insolvency firm Begbies Traynor said the number of firms on the brink of going bust jumped by more than a third at the end of last year.

And on Thursday, car firms warned the UK has not got a strategy to attract manufacturers.

industries than before it left the EU.

Economy concerns
Data out on the UK economy in recent weeks has painted a mixed picture.

Price rises in the UK slowed for a second month in a row in December, but the cost of food including milk, cheese and eggs kept inflation at a 40-year high.

Meanwhile, wages have grown at the fastest rate in more than 20 years, but are still failing to keep up with rising prices.

Figures on Tuesday showed Ggovernment borrowing hit a new high in December, driven by the cost of supporting households with their energy bills and rising debt interest costs.

And on Wednesday, the independent Office for Budget Responsibility told the government that it had overestimated the prospects for medium-term growth and that it planned to downgrade its outlook, The Times reported.

The downgrade would leave Mr Hunt with less room to manoeuvre ahead of his Budget this March.

 

[najaB]

So many demands. So little opportunity to find new sources of money. I do wonder what could be done.

It's cliché, but the time to ask this question was ten years ago. At this point there are two hard decisions that need to be made: what are we actually good at and can lead the world with, and what can others do better than us?

We need to invest heavily in the former and let the latter die, as painful as it might be in the short term. And in doing so, we need to help people gain the skills, knowledge, etc such that those who are currently involved in the things that we are going to let die can get involved in the ones that we will be promoting.

 

[nlogax]

I fleetingly saw in the news yesterday that we are borrowing £27 billion this year and currently have interest payments of £13 billion. Have I got that correct ?. My thoughts turned to who owns this country now - if I read it right.

Government has borrowed approximately £128bn over the last twelve months, the £27bn figure was just for December.

 

[Bletchleyite]

I can think of one - rejoin the EU, and be actually committed to it this time. As part of the EU we can grow, on our own we're really too small.

 

[Snow1964]

I can think of one - rejoin the EU, and be actually committed to it this time. As part of the EU we can grow, on our own we're really too small.

Don't laugh (or cry) but latest Government advice to small businesses and sole trader trying to export to Europe is to avoid paperwork by opening a company in Europe.

Basically as an individual have to have Brexit, but commercially admitting would be better off in Europe

 

[DarloRich]

Get the Tories out and ban them from ever holding office again!

 

[RT4038]

It's cliché, but the time to ask this question was ten years ago. At this point there are two hard decisions that need to be made: what are we actually good at and can lead the world with, and what can others do better than us?

We need to invest heavily in the former and let the latter die, as painful as it might be in the short term. And in doing so, we need to help people gain the skills, knowledge, etc who are currently involved in the things that we are going to let die get involved in the ones that we will be promoting.

That all sounds dangerously like the thoughts of The Iron Lady.......

 

[dosxuk]

Investing in education and awareness that abandoning spending for the future doesn't free up equal amounts of cash for projects today; and that infrastructure is a good thing - there's zero point in aiming for growth if you don't also bring the associated infrastructure along.

 

[najaB]

That all sounds dangerously like the thoughts of The Iron Lady.......

The Iron Lady wasn't completely wrong in her objectives, the problem was lack of compassion in the implementation. There were zero effs given for the people who lost their careers.

 

[edwin_m]

The Iron Lady wasn't completely wrong in her objectives, the problem was lack of compassion in the implementation. There were zero effs given for the people who lost their careers.

Indeed. Look at how Norway managed their oil boom compared with the UK. Britain has historically been short-termist, whether in government or business, and there isn't enough respect for the activities that create the wealth that should be making everyone else comfortable.

 

[Magdalia]

The 'West' is in decline. The 'East' is in the ascendency. Maybe its just a natural levelling up of economies?

This is correct. The east will be dominant economically for centuries to come, just like it was in "the dark ages" between the fall of the Roman Empire and the Renaissance.

So many demands. So little opportunity to find new sources of money. I do wonder what could be done.

But there are things that can be done, the difficulty is getting a government with a vision and stability so that they can deliver it.

It's cliché, but the time to ask this question was ten years ago. At this point there are two hard decisions that need to be made: what are we actually good at and can lead the world with, and what can others do better than us?

We need to invest heavily in the former and let the latter die, as painful as it might be in the short term. And in doing so, we need to help people gain the skills, knowledge, etc who are currently involved in the things that we are going to let die get involved in the ones that we will be promoting.

Better late than never! But although we are good at selling each other coffee and cake, we aren't going to get rich that way. We have too many zombie businesses, especially in hospitality, hoarding people that need to be employed in more productive industries, or delivering our public services.

One thing where the UK has comparative advantage is two of the most successful Universities in the world, with global name recognition, including in the east. In 21st century one of the most important economic resources is knowledge, and at Oxford and Cambridge the UK has it. For the UK economy to grow, Oxford and Cambridge will need to grow, and fast. But they are constrained by lack of people, inadequate transport infrastructure, and lots of NIMBYs. Soon Cambridge will also be constrained by lack of water.

infrastructure is a good thing - there's zero point in aiming for growth if you don't also bring the associated infrastructure along.

Which is why East West Rail is essential to deliver UK economic growth.

That all sounds dangerously like the thoughts of The Iron Lady.......

What the Thatcher Government did is hugely relevant here, because it kickstarted the last period of rapid economic growth in the UK with financial deregulation. That delivered the growth and the tax revenue, but with huge collateral damage both in terms of "left behind" places and an economy living beyond its means financed by borrowing and selling off assets to foreigners.

The UK should be aiming to deliver economic growth and tax revenue through a boom in life sciences, biotech, artificial intelligence etc, based on Oxford and Cambridge. There are collateral damage risks that need to be addressed. Making sure that other places are not "left behind" is key, but the risks that are much bigger now than in Thatcher's time are environmental. Ironically, she would have understood the environmental bit.

 

[yorksrob]

The 'West' is in decline. The 'East' is in the ascendency. Maybe its just a natural levelling up of economies?

I know it sounds awfully pessimistic, but I think the zenith of the UK was the 1990s.

True about the 90's, however the West is only "in decline" because it swallowed the global free market spiel. There are signs that the USA is changing course with its anti-inflation act, and the EU will surely follow in some way. With those two considering their supply chains, it's hard to see the rest of the West not following suit.

Anyhow - on the subject of the railway, the first and simplest thing should be a moratorium on scrapping servicable rolling stock so that we don't lose capacity when its likely to be needed.

 

[Howardh]

In the early 2010's we'd successfully run the Olympics, we were in austerity but there seemed to be an optimism about the future...aided by the speed of technology. You could get into A+E, just about get a NHS dentist's appointment, travel/impost/export to Europe with the minimum of hassle, inflation was low-ish and steady, fuel bills and food were affordable to most.

10 years later I've never known the country so depressed. Even more depressed than under the "winter of discontent". Admittedly the vast majority of us have never been through the War so can't compare with then, but still....

Has something happened to the UK in the interim?

 

[ainsworth74]

Has something happened to the UK in the interim?

Thirteen years of austerity and Brexit will do that to a country.

 

[yorksrob]

Indeed. Look at how Norway managed their oil boom compared with the UK. Britain has historically been short-termist, whether in government or business, and there isn't enough respect for the activities that create the wealth that should be making everyone else comfortable.

Didn't Norway actually set up a sovereign wealth fund from their oil, which has helped them maintain their overall wealth over the years ?

One of Mrs T's errors was in not doing this and expecting the rest of the world to trade fairly and gentlemanly, so there would be no need for anything so anti-market as a sovereign (or in old parlance, "nationalised") wealth fund.

Tony Benn was for it though !

I also wonder if they've let every Tom, Dick and Harry buy up a licence to drill Norwegian oil and flog it at international prices (genuine question here - I've no idea).

 

[birchesgreen]

Thatcher used the North Sea revenues to help fund her ideaological destruction of the "old economy" and war against the unions.

 

[yorksrob]

If the current powers that be have any interest in supporting businesses and wealth creators, they'll get the railways running properly so that people can access them.

Look on the bright side.

As a country we still have resources and talents. Just because we've squandered them on free market pipe dreams for the last forty years, doesn't mean that we can't use the remaining ones on securing our strategic objectives and wealth creation (if we ever get the choice).

 

[najaB]

As a country we still have resources and talents. Just because we've squandered them on free market pipe dreams for the last forty years, doesn't mean that we can't use the remaining ones on securing our strategic objectives and wealth creation (if we ever get the choice).

Of the two, talent is by far the more important. The conversion of raw resources into intermediate inputs is, generally speaking, a low value add - the real money is in making finished goods. As an example, turning iron ore and coal into steel isn't nearly as profitable as turning sheet steel into ships.

We have historically been a world leader in 'designed things'. Engineering has always been somewhere that we excel - as an example, 'standard gauge' is much more commonly used than any other specifically because we were innovators in railways and exported our technology around the world.

 

[yorksrob]

Of the two, talent is by far the more important. The conversion of raw resources into intermediate inputs is, generally speaking, a low value add - the real money is in making finished goods. As an example, turning iron ore and coal into steel isn't nearly as profitable as turning sheet steel into ships.

We have historically been a world leader in 'designed things'. Engineering has always been somewhere that we excel - as an example, 'standard gauge' is much more commonly used than any other specifically because we were innovators in railways and exported our technology around the world.

You say that, but look where we are when we don't have the raw resources (look at energy). Designing things is all well and good, but if you can't resource your own basic needs, you're on a hiding to nowhere.

 

[najaB]

You say that, but look where we are when we don't have the raw resources (look at energy). Designing things is all well and good, but if you can't resource your own basic needs, you're on a hiding to nowhere.

Thing is, it's impossible for any country to be entirely self-sufficient in every resource.

Also, we don't have an energy supply problem, we have a NIMBY problem. There is vast untapped wind power resource and we could have built a whole fleet of new nuclear power plants if not for the objections of the uninformed.

 

[yorksrob]

Thing is, it's impossible for any country to be entirely self-sufficient in every resource.

Also, we don't have an energy supply problem, we have a NIMBY problem. There is vast untapped wind power resource and we could have built a whole fleet of new nuclear power plants if not for the objections of the uninformed.

No country has to be entirely self-sufficient. They just need to be self-sufficient enough to be able to head off the inevitable economic problems that will come from abroad.

That means not being dependant on other countries for basic needs such as fuel.

 

[Broucek]

I fleetingly saw in the news yesterday that we are borrowing £27 billion this year and currently have interest payments of £13 billion. Have I got that correct ?. My thoughts turned to who owns this country now - if I read it right.

Well, the bond market killed the Prime Minister (Truss). Whilst she was evidently out of her depth and few people are in mourning, there's something a little uncomfortable about her being taken down by investors rather than our elected representatives...

 

[GS250]

If the current powers that be have any interest in supporting businesses and wealth creators, they'll get the railways running properly so that people can access them.

Look on the bright side.

As a country we still have resources and talents. Just because we've squandered them on free market pipe dreams for the last forty years, doesn't mean that we can't use the remaining ones on securing our strategic objectives and wealth creation (if we ever get the choice).

I totally agree with this. The public and private sectors are full of some brilliant innovators and leaders. There is the capacity to turn this country around. However the issues are clearly prevalent at the very top. The minority in the driving seat are pretty much cut from the same Etonian cloth. Those in opposition just appear to be identity politics obsessed lunatics with no actual answers to replace the old gentry. Both types appear to be ridden with unconscious guilt having never really risen up through the ranks. Overpromoted regardless of their background.

To hide their inadequacies they have managed to turn the proletariat against each other on the basis of gender, race and religion.

Lets stop falling for it.

 

[HSTEd]

Ultimately the biggest thing it could do is arrange for the construction of several million new housing units.

Either it must defeat the anti development vote in numerous council areas to expand existing urban areas, or it must construct a new city suitable to house the many millions of people currently with inadequate housing.

The distortions from the housing market in the UK are now so enormous as to seriously damage overall population prosperity. There is a shortage of some millions of housing units (possibly between 3-5 million).

The benefits to population prosperity of restoring sanity to the housing market would be enormous and long lasting.

I can think of one - rejoin the EU, and be actually committed to it this time. As part of the EU we can grow, on our own we're really too small.

The EU makes little difference to any of the major problems facing the UK today.

People imagine that if only we got behind the EU hard enough we could go back to the halcyon nineties, and that it was the evil Brexit that brought the good times to an end.

In reality the 90s/00s were a time of apparent economic growth funded by the eating of the last of society's seedcorn. A huge booming property market (created by rising immigration and a collapse in housing construction) that inevitably leads to the catastrophic housing shortages of today, privatisation of public services for a quick buck and a fundamental abandonment of any meaningful energy and industrial policy.

The EU won't make more houses appear, the EU won't fix our catastrophically failed energy policy (indeed in some ways it prevents it being fixed) and it won't make transport systems that haven't been built for 50 years appear from the aether.,

 

[yorksrob]

Well, the bond market killed the Prime Minister (Truss). Whilst she was evidently out of her depth and few people are in mourning, there's something a little uncomfortable about her being taken down by investors rather than our elected representatives...

Well, she was in an economy with a problem with inflation and said she would borrow money to give to people to spend in an inflationary economy and not expect more inflation.

What she should have done, was start some public works, thus creating the physical wealth, then printed the money to match it.

 

[najaB]

No country has to be entirely self-sufficient. They just need to be self-sufficient enough to be able to head off the inevitable economic problems that will come from abroad.

Or, more realistically, have diversity of supply so that no single country can hold them hostage.

Well, the bond market killed the Prime Minister (Truss). Whilst she was evidently out of her depth and few people are in mourning, there's something a little uncomfortable about her being taken down by investors rather than our elected representatives...

To be fair, it wasn't that the bond market killed the PM but rather that the bond market's reaction to the PM's actions killed the PM.

The EU makes little difference to any of the major problems facing the UK today.

And, as some are just coming to realise, leaving the EU wasn't a solution to them either.