Who is right about the British economy?

by witchfinder Sat Oct 08, 2011 11:15 am

First topic message reminder :

As Lloyd Grossman would say "lets look at the evidence"

26th January 2010 - this was the date that the UK recession was finaly over, our growth returned back into the black again at 0.1% later revised upwards to 0.4%.

This was also a news story back in January 2010
--------------------------------------------------------

The begining of 2010 has seen some improvement in the uk housing market. People's confidence seems to have returned to pre uk recession levels.(Zoopla.co.uk)

In the second quarter of 2010 the economy of the United Kingdom was growing at 1.2%, the fastest rate of growth for nine years.

By July the new coalition government had been in power for a couple of months, the chancellor gave his first budget and the nation was put on alert for the waves of spending cuts and redundancies which were to follow soon.

Towards the end of 2010 UK growth began to go backwards again, and actualy went back into negative growth in the 4th quarter, perilously close to recession again.

So here we are in October 2011, 19 months after this government entered office and our growth figures are lower than what they were when they came to office in May 2010.

But not only is growth stagnant, unemployment is higher, inflation is higher, confidence is lower, no sign of a recovery in the housing market, and the promise that the private sector can take up the slack of the thousands made redundant hasent happened.

As we approach the 18 month mark, is time begining to run out for David Cameron and George Osborne. ?

by boatlady Fri Jan 17, 2014 2:51 pm

He's not wrong.
The extract you quote also refers to the creeping racism that is entering public debate via a narrative that blames 'immigration' for lowering wages, increasing rents, reducing jobs and taking over our scarce public services (social housing, health care, benefits, education).

We live in disagreeable times

by Bellatori Fri Jan 17, 2014 3:33 pm

Ivan wrote:... Latest up has been ‘Benefits Street’, ...

I was listening to that fount of all knowledge, Today on radio 4, who interviewed several people from 'Benefits Street' as well as the producer. It was clear that the inhabitants felt they had been misled about the thrust of the program which they seemed to think was about community and support and not to deliver them a spanking for being on benefits. The producer was certain that they had been fully informed about the intent of the program.

Who is right? My money is on the locals bearing in mind they were given a completely different 'working' title. They were very ill-advised (probably not advised at all unfortunately) to allow the program makers such access. Not that it is any consolation to them but the interviewer did give the producer a fairly hard time but that won't repair the damage.

misled (verb) - in this context a euphemism for blatantly lied to.

by oftenwrong Fri Jan 17, 2014 7:19 pm

Anyone who speaks to the Press, or engages with professional media people, should be aware that they are principally ratings fodder and may be misquoted at any stage.

by methought Sat Jan 18, 2014 10:36 pm

There is a need to reduce spending to get the debt reduced before interest rates go up. It doesn't help having multi-nationals take the capital out of the country but Britain depends on our financial markets to keep in play. It is all too fragile to risk toppling the house of cards and international free trade is what keeps everything working. A grass roots movement to rebuild local markets could still coexist with gangs of Chinese field workers picking our cauliflowers cheap for the supermarkets. The big picture is complex though and we don't want to put a spanner in the works.....

by methought Sat Jan 18, 2014 10:39 pm

They want us to focus on a topic that distracts us so that they can broadside us time and again while we are happily demonising some minority or other.....

by **Ivan** Sun Apr 06, 2014 3:46 pm

This is no recovery, it is a spending boom powered by unsustainable house price rises

Extracts from an article by Daniel Bentley:-

“Having failed to usher in the export-led recovery he promised early in the coalition, the chancellor instead latched on to house price inflation as one of the main levers of a consumer spending boom that, he hopes, will get the Tories through the next general election. He didn’t just bet the house on this strategy – he bet everyone’s house on it. It is an easy gamble to embark on because so many homeowners are too easily convinced that large price rises are in their own best interests.

Investors using the housing market to make money, and the volatility that follows, are not the root cause of the problem. What lies behind all of this is a collective weakness among voters for seeing their properties grow in value. Hopefully this will recede as the number of people priced out of the market continues to rise. But until it does, politicians will never build enough homes to level out prices, and the economy will remain beholden to a rollercoaster housing market.”

For the whole article:-
http://www.newstatesman.com/staggers/2014/04/no-recovery-it-spending-boom-powered-unsustainable-house-price-rises

by oftenwrong Sun Apr 06, 2014 5:55 pm

An important component of the "London bubble" is foreigners investing their money where they perceive a "safe haven". What better than a spare home that is as safe as Money in the Bank with a strong possibility of continuing value?

It's solved Britain's "Balance of Payments" dilemma, as inward investment balances the increasing cost of goods which we import for our own needs.

Let's hope that Johnny Foreigner doesn't take his money out again any time soon.

by Stox 16 Tue May 27, 2014 11:38 am

As the economy stands today we hear great deal on the TV news about us coming out of recession and how the Tory lead right wing government has jumpstarted demand by its policies. But lets just look at some of these claims? The Tories come into power stating they would deal with the national deficit and Public sector National debt by 2015. Well lets see what there own government figures show us?

Now the public sector nat debt excluding financial interventions was £877.3 billion at the end of February 2011. by 2012 the public sector nat debt excluding financial interventions was £995.0 billion and by just June 2012 it was £144.4 billion. For the financial year 2013/14 public sector net borrowing excluding the temporary effects of financial interventions, the transfer of the Royal Mail Pension Plan and the transfers from the Bank of England Asset Purchase Facility Fund was £107.4 billion. This was £7.8 billion lower than in 2012/13, when it was £115.1 billion. (ONS)

While the National debt in 2011 was £944.6 billion (OBR) and by January 2012 it hit £1.03 Trillion for the first time in our economic History. Yet by just June 2012 it had hit £1.038 trillion or the equivalent to 66.1 % (OBR) Today the National debt in 2014 £1.27 trillion. The larger-than-expected deficit helped to push up public sector net debt to £1.27 trillion in April 2014, or equivalent to 75.6% of gross domestic product (GDP). The interest on Britain's debt pile is expected to hit £52.1bn this year, according to projections by the Office for Budget Responsibility (OBR) - or the equivalent of £1bn a week.

Now we are told by the Tories and Lib/Dems that our National debt is falling under there economic plan? Well is it then? If so I cannot find it?

Now we should take a little look at GDP or growth.. Now GDP grew by 0.8% in the first quarter of 2014, up slightly from 0.7% in the final quarter of 2013, according to the latest figures from the (ONS) Now when the coalition took power the UK was growing by some 4% per year (ONS data) but lets us remember that After 1992, the UK economy and average household incomes enjoyed a period of unbroken growth. But by 2012 this government set a 100 year record for the low growth.
The period since the start of the financial crisis has been categorised by short bursts of growth and contraction in what the Bank of England has described as a "zigzag" path to recovery. ( in the words of the BBC in 2014)

However, the UK's economy grew by 1.7% last year, official figures show, less than the previous estimate of 1.8%. while the ONS confirmed that the UK economy grew by 0.7% in the final quarter of 2013, unchanged from its previous estimate. At the end of 2013, the size of the UK economy remained 1.4% below its pre-downturn peak reached at the beginning of 2008, the ONS said, but signs of economic recovery strengthened in 2013. ( really.. as I cannot see much strenght in this economy yet) Now the last cycal of rebust growth in potential output of 2.9% was in 1997 to 2006. and I can see little sign of this coming back to soon..

so what is our economy being run by? Well its that old Tory party favourite of housing market. In fact the UK mortgage lending in April 2014 was 36% higher than a year ago. The latest data from the Office for National Statistics showed an annual house price rise in the UK of 8%, including a 17% rise in London. So once more we are back to running the UK economy though the housing market.. all the things that helped to start of the recession in the first place.

So the question is this.. will you be voting for a economy run like this in 2015? or will you vote for something that could well be better? as i am not sure we can take five more years of economic madness like this above myself? but then what do i know.. as i only work in economics and look at government data all day long.. but if the UK economy is getting better then i will eat my hat.

what is your view on this?

by Stox 16 Tue May 27, 2014 12:51 pm

mind you we should all agree to leave the EU and follow UKIPS Economic policy when they find time to write one.. still we do have there word for it and it will workout alright in the end ha-ha

by Stox 16 Wed May 28, 2014 12:43 pm

Now lets stop and just look at the failure of this Governments economic policy as a whole. As what has been there main failure over the last five years? Well for the first three and a half years they ended up with no real economic growth at all. To change this they turned to the old right wing quick fix of the domestic private housing market. This has produced an explosive re-turn in house prices but has lead to some growth within the UK economy. But the real priorities within the UK economy is to re-balace the economy and to move away from an economy based on consumer spending and financial service sector. As after many years of industrial decline in our core manufacturing sector its left us with an unbalaced weak economy that is over depended on just the financial service sector while UK manufacturing has see poor investments rates in such areas like engineering. This is the most dramatic and recurring demonstrtion of right wing economic policy over far too many years. In many cases its left British industrial compaines with the incapacity to compete with its rivals in external markets. In a report in May 2014 by KPMG it showed the UK spends less on research and development than most of out main revals. UK companies surveyed in KPMG's global manufacturing report said a lack of R&D funding was the main issue limiting innovation. Development work was heavily focused on improving existing products and services, with 71% of UK companies spending in this area. In contrast just 29% were focused on breakthrough innovation.

Now the Tories come into government telling us they would cut the UK defitict by 2015 and would re-balance the UK Economy while giving us a long term economic economy? Well they have failed on all three main economic issues. However, we have seen Manufacturing output was up 1.3% during the first three months of the year 2014. while manufacturing PMI showed there was no sign of slowing growth in the UK for the rest of this year. However, before we all jump up and down for joy we should remember that this is 100% due to low Bank of England Interest rates that Mark Carney, the Bank's governor has said be on hold to spring 2015.

As the fact is the Tory Party with the Lib/Dems in toe has failed to set the wheels in motions for any long term stability within our manufacturing sector of an note. Instead have left it all to the governor of the bank of England to support British manufacturing while Cameron and Co have cut down on all R&D development funding from central government. UK R&D spending overall fell 3% when adjusted for inflation to £27bn in 2012, according to the Office for National Statistics, as both government and business investment fell. It amounted to 1.72% of gross domestic product, lower than the 2.06% equivalent for the EU, and far short of the target to increase UK R&D investment to 2.5% of GDP by 2014. Under this government, things have gone into reverse. At a time when we urgently need to see more innovation and investment so Britain can better compete, it is disappointing that R&D spending fell so significantly during 2012 TO 2014. Five years ago the last Labour government set a target of R&D spending reaching 2.5% of national output by 2014. Yet today a smaller percentage of GDP going on research than was spent in the 1980s, no wonder productivity figures are grim.

With a smaller percentage of GDP going on research than was spent in the 1980s, no wonder productivity figures are grim. Well the big question is should we all vote for more of the same with more economic failure of Tory party economics? or should we all vote UKIP and all hope they have a ecoomic policy by 2015 while the rest of us who really would like a good economy fight of our dwindling economy and economic competitiveness that are essential to all our features?

still as UKIP have said.. lets us leave the EU and sit back and let Europe cut 60% of our export trade away from our poor weak manufacturing base and let it fall even lower than it is today. as who needs R&D investment from Europe away? so you will be voting in 2015 to either speed up the right wings economic decline for the UK or will vote to try and end it, in my own view?

by boatlady Wed May 28, 2014 12:50 pm

Stox 16 - really enjoying and appreciating your copious contributions. sorry i haven't replied yet - hope to comment in detail soon

by Stox 16 Wed May 28, 2014 1:24 pm

boatlady wrote:stox 16 - really enjoying and appreciating your copious contributions. sorry i haven't replied yet - hope to comment in detail soon

Hi Boatlady
well your are most welcome and i hope you find my contributions both interesting and stimulating to read. i read and work in economics so end up writting about it more than i should. as i look at politics throgh the eyes of an Economist. not always the wise thing to do ha-ha i will look forward to reading your views i must say Boatlady..

so many thanks for your post

Stox

by Stox 16 Wed May 28, 2014 3:41 pm

its interesting to nate that back in 2010 the Conservatives faced the double jeopardy of sweeping opposition to austerity and shaky economic forecasts. The Conservative-led Government was almost two years into a legislative term that had yet to yield visible results, and Labour took an eight-point lead in the Guadian/ICM poll in April 2012 at 41 per cent and the Conservatives fell to 33 per cent, their lowest showing since before the 2010 General Election.

Labour has fluctuated in polls since the 2012 Budget between 41 per cent and 36 per cent, but has consistently kept a distance of several points between themselves and the Conservatives. If the economy continues to grow even at this slow and painful rate and unemployment continues to fall, the Conservatives will going into this next election as the favourites even after these good local election result from Labour in 2014. However, Regardless of one’s view on the success or failure of this ‘ Labour's mission’, the next General election will be won or lost on the economy.

for me Ed Milband has been right to show the publics fears over the sost of living.. as Food prices are forecast to rise by an extra £850 pounds a year to 2018. as the UKs dependency on imported food as risen from 33% to 38% since 2013 (OECD data) while Mortgage debt threatens to overstratch UK Households. if there is an interest rate rise of just 3% then 1.2 million people would be spending over half of the income take home pay on debt repayments. in April 2011 the average household debt including mortgage debt was £21,000. in 2015 the same average debt is now £54,197 with daily amounts paid on personal debt at £163 million per DAY.

Outstand personal debt in the UK in Novenber 2013 was £1.432 trillion pound and this was up from £1.420 trillion at the end of November 2012. of this outstanding secured morgage debt stood at £1.273 trillion pounds up from £1.265 trillion in 2012. outstanding unsecured consumer credit debt and lending is £158.9 billion and this too is up from 2012 at £156 billion.
the average amount owed per person in the UK is now £28,528 in November 2013. (OBR data)

its also worth noting that UK banks and Building Societies wrote-off £3.63 billion of loans to indivuals over the last four quarters to Q3 of 2013. in this was some £397 million pounds of credit card debt wrote off in 2013..

Now the Tory party have kicked off a private sector housing boom.. so an move in interest rates and you will see a great deal of economic trouble to come.. its therefore very interesting that the bank of England have agreed to hold interest rates down to after the General election in 2015?

i wonder why that is then?

if there was just half a per cent interest rate rise the Tory party would lose for sure the 2015 G/E. So when people ask me is Ed Milband right in his cost a living campaign i say he sure is.. The only real reason he is not getting his message across is because the Bank of England is holding back.. if you think he is wrong just look at the aove data once more and you will soon see why he is spot on..

maybe UKIP have a better idea then? well lets just sit back and see? when they get around to writting a economic policy of note..

by Stox 16 Wed May 28, 2014 3:56 pm

i am sorry, as i fogot to add the Gas and Electrricity debt. The research done by Uswith found some 5 million homes now struggling to pay their energy supplier on time. this is up 1 million in just one year to 2013. the total debt has now risen from £159 million pounds per year to £637 million pound by the end of 2013. there are now some 20% of UK households owing money to energy companies.

by Stox 16 Wed May 28, 2014 4:07 pm

Still none of this is in fact that important is it? as what is really important is bring back so-called powers from Europe and immimmigration. as once we stop that the sun will come out and the UK will be fine and we can all live in total happiness.. as its all about stopping Johnny Foreigner. well really? is it..

by Stox 16 Thu Jun 05, 2014 10:42 am

[i] Energy Debt date 06/06 2014 from ( OFGEM)

The totaL Debt to UK energy Suppliers is now £1.1 Billion
1.6 million are in Electricity Debt
1.5 million are in Gas Debt
The energy debt is up 8.4% on the previous Quarter and s now 17.6% higher than it was in 2012

[b]Debt fears as water bills rise 3.5%[/b

The new charges will vary for households depending on their supplier and whether they have a water meter, Ofwat said. The increased bills will help pay for an investment programme worth about £25 billion between 2010 and 2015, the regulator added.

Thames Water will see the biggest percentage rise in water and sewerage bills with an increase of 5.5%, leaving households with an average bill of £354, according to Ofwat. Southern Water bills will rise by 5.3% with an average payment of £449 while households supplied by Wessex Water will face an average bill of £478 - an increase of 4.9%. The new charges will vary for households depending on their supplier and whether they have a water meter, Ofwat said. The increased bills will help pay for an investment programme worth about £25 billion between 2010 and 2015, the regulator added.

National Debtline said it took a record 19,667 calls for help with water debts last year, up from 12,226 in 2010 and 597 in 2003. The figure is an increase of 251% since 2007. A spokesman said: "It's one of the fastest-growing debt problems we're dealing with."

Ed Milband is dead right in his compaign over the cost of living.

by Stox 16 Thu Jun 05, 2014 10:46 am

Forgot to add this in...

The cost of debt from non-payment of water bills is covered by all paying customers and currently adds approximately £20 per year to each bill in Wales alone.

by Stox 16 Fri Jun 06, 2014 12:03 pm

There has been a great deal of right wing lead criticiam over Ed Milbands Economic policy or what some would call his lack of Econimic policy on both left and right.. Now is this Criticiam fair?

Well its true that the Labour party under Ed Milband was indeed slow to challage the right wing media's lead vews that the 2009 financial banking crisis had something to do with the policies of the last government. This chrage would of been fair had no other country in the world had not also had a world wide banking crisis.

Its been open for debate for some four years now, as to what Labour should of done about the whole question of Economic policy.. should they of spent the last four years denouncing the Tories for attacking the last Labour Government action at the time of this banking crisis.. Well its a fair question to ask.. but in my view it would have been four wasted years. as Its always far wiser too attack the Tories for there own failed Economic policy, than waste time on yesteryears policy or actions . As its the Tory party economic policy of today that the next General election will be fort on and not what happened in 2009. as to spend time defending the last Labour overnments actions would of sounded as if we was indeed guilty or responsible for it in some biarre way.

So What of Labour's currant Economic Policy in the build up to 2015

Now the Tories have failed in just about all the per General election Econiomic policy as the data quite clearly shows us today.. However, with three whole years of no GDP growth of any real note they in the end turned to there old Economic fix policy of the private housing sector.. it was quite clear that this would at some point lead us to some weak growth within the UK economy in time.. as house building no matter how big or small it is will lead to spending within the economy and in turn lead to some weak GDP growth.. in fact I was expecting the Tories to turn to this old policy at some point and they did just that.. I was just surprised it took them so long to do it.. However, the key to this olds policy is low interest rates.

This in turn was always going to leave the Labour Party with a problem of sorts.. So any Labour parites new Economic policy would have to take this into account. Now given that the UK would be showing signs of weak GDP growth the only real room to move was on the whole question of the costs of living.. I myself believe it was the right move and still do.. However, it was also very clear that the Tories would wise to keep interest rates as low as possible or till after the 2015 general election. As mortgage borrowers are vulnerable to a rise in interest rates, as analysis of official lending data shows that these borrowers have rates which are “floating” or “variable”, and likely to rise in response to any increase by the Bank of England to its leading Bank Rate. As my own analysis shows that over the past seven years the proportion of all mortgages on a variable rate has grown from 52% to 67% while the alternative to variable rates are “fixed” rates, where borrowers’ payments are locked for a period of typically two to five years, irrespective of movements in Bank Rate.

There are several reasons for the growth in variable rate loans during the post-crisis period, mortgage experts say. One is that as the Bank Rate fell in response to the crisis – it was cut to just 0.5% in March 2009 where it has remained since – many variable rates tumbled, removing borrowers’ incentive to switch. Another, more worrying explanation is that many borrowers were not in any case able to switch loans, either because they had too little equity in their property, or they had difficulties demonstrating sufficient income to qualify for a new mortgage deal. Many of these borrowers will remain trapped and vulnerable to rate rises. There are two main types of variable rate mortgage: the first are “tracker” rates, which move in line with Bank Rate, plus a fixed margin. Before the crisis some trackers were priced at Bank Rate plus one percentage point, for example, in which case a borrower would today pay 1.5%. If Bank Rate rose 0.5 percentage points to 1%, the borrower would immediately pay 2%.
Now any movement in interest rates would spark a cost of living crisis.. As Over the past 25 years pay rates have risen much faster for the wealthy than for the poorest, with the average full-time hourly rate being £12.62 in April 2011. However, the increase was not evenly spread across the scale. Generally the higher earners did better, with the top 1% having the biggest increase between 1986 and 2011, at 117%. The top 10% saw an increase of 81%, while the bottom 10% had a 47% increase. Those at the very bottom did better, with the bottom 1% having a 70% increase. So Looking at the effects of the economic downturn. You find that everyone right across the scale experienced drops in real earnings over the period from 2007 to 2011, with wage growth failing to keep pace with price rises. By contrast, in a four-year period covering the recession of the early 1990s, real wage growth was positive across the scale.

Now its quite clear to me that any new Economic policy from the Labour Party would indeed need to take all of this into account before drawing up any new economic policy.. its also become very clear that the national minimum wage is no longer working because its value has fallen, in fact one key new study showed it could be worth less in 2017 than it was in 2004. in fact Professor Sir George Bain, the first chairman of the Low Pay Commission even believes the priority is to help the 3.6 million people who are above the legal minimum but below the “living wage” needed for a basic standard of living. That is paid voluntarily by about 250 employers and is worth £7.45 an hour, or £8.55 an hour in London.

Now I could show even more economic data that would support Ed Milband currant economic policy on the cost of living crisis.. so if you do not believe him then vote Tory and find out what the real cost will be too your family after 2015. as interest rates will rise after that election for sure.. so the question is will wages of the minimum wage keep up with the costs or not? Plus who do you think will help you? The Tory Party or the Labour party.. as so far its only the Labour party that is talking about all of this...

so its thinking caps on folks in 2015

by Stox 16 Tue Jul 08, 2014 4:13 pm

key data

EU Exports for April 2014 are £11.5 billion. This is a decrease of £2.1 billion (15.8 per cent) compared to last month. It is also a decrease of £0.6 billion (4.9 per cent) compared to April 2013. However, this decrease is likely to reduce when updated next month.

EU Imports April 2014 are £17.9 billion. This is a decrease of £1.1 billion (5.8 per cent) compared to last month. However it is an increase of £0.2 billion (0.9 per cent) compared to April 2013.

the UK is a net importer this month, with imports exceeding exports by £6.4 billion. This is an increase of £1.0 billion (19.6 per cent) compared to last month, and an increase of £0.8 billion (13.3 per cent) compared to April 2013

Still the Kippers and Right Wing hawks tell us with can replace this EU market. i would therefore ask them to please show me how they plan to replace some £17.9 billion pounds worth of just European Exports in Just may 2014?

by boatlady Tue Jul 08, 2014 4:42 pm

I had a long chat last week with a lifetime Labour supporter who is tempted by UKIP for the General Election.
He told me that he will vote for any party that will get us out of Europe so we can start again trading with our natural partners in the Commonwealth. Apparently, Europe won't let us trade with the Commonwealth, but if we could just get back to our trade with India, China and New Zealand he feels the country would once again be prosperous.
He says he has nothing against the EU nationals that come to GB to work, but they are taking away jobs and houses from our British young people.

This was no 'swivel-eyed loon', but a nice thoughtful British working man who believes what he reads in the press.

by oftenwrong Tue Jul 08, 2014 11:09 pm

There used to be a British import tariff that was called "Imperial Preference" which allowed goods from the former British Empire nations to enter Britain free of duty. Thus e.g. New Zealand butter and Australian lamb dominated the market.

Until Ted Heath decided we would be better-off inside the European Zone, and kicked our old overseas partners right in the painful area.

They might remember that.

by Stox 16 Wed Jul 09, 2014 10:42 am

boatlady wrote:I had a long chat last week with a lifetime Labour supporter who is tempted by UKIP for the General Election.
He told me that he will vote for any party that will get us out of Europe so we can start again trading with our natural partners in the Commonwealth. Apparently, Europe won't let us trade with the Commonwealth, but if we could just get back to our trade with India, China and New Zealand he feels the country would once again be prosperous.
He says he has nothing against the EU nationals that come to GB to work, but they are taking away jobs and houses from our British young people.

This was no 'swivel-eyed loon', but a nice thoughtful British working man who believes what he reads in the press.

Hi Boatlady
can i start by saying that i am sure this guy was a nice working class or middle class guy and that not all Kippers or would be supporters are swivel-eyed loons in anyway. we would be quite foolish to think of them all like this either. However, its a interesting point you have posted here. as i too have meet good folks who wish we still traded with the Commonwealth and even talk about going back to it. but we should not overlook that our traded moved away from them over some 40 odd years ago now. in that time trade has changed a great deal and counties found new markets. so on paper it sound all very easy but that is only on paper and not in the economic world we face today. but lets look at some facts.

The idea of promoting inter-Commonwealth trade has emerged in recent years as a response to the current evolution of the global economy. Proponents in Commonwealth jurisdictions promote the idea as a means of diversifying and expanding their own national economies.

The concept has become popularized in Britain among those who are self-styled ‘Eurosceptics’, and wish for the UK to leave the formal political structures of the European Union, to be replaced with a Free Trade Treaty with the EU. But at the moment the UK-Trade relations are not significantly stronger with the countries of the commonwealth. From the Top 10 Commonwealth-Nations, measured by nominal GDP, Britain claim in no single one an import (for Britain an export) share of more than 4%, and only in three countries an export (for Britain an import) share above 4%. Germany for comparison does claim in three countries an import share above 4% (German export), and in three countries an export (German import) share above 4%.

In 1997, the Commonwealth Heads of Government Meeting (CHOGM) at Edinburgh was presented with research conducted by Drs. Sarianna Lundan and Geoffrey Jones, and commissioned by the Commonwealth Secretariat. The paper, entitled “The ‘Commonwealth Effect’ and the Process of Internationalisation”measured whether or not Commonwealth jurisdictions enjoyed a qualitative advantage in trade with one another as opposed to equivalent non-Commonwealth nations. Their research found that even in the absence of trade treaties, there was a clear cost advantage in trade between Commonwealth nations, and that the overhead costs of doing business were reduced by up to 15 percent in comparison to trade outside the Commonwealth.

Although the terms of Britain's membership in the European Union precludes it from unilaterally negotiating for a CFTA, the idea has garnered interest. In particular, those politicians and parties that advocate leaving the European Union cite the development of a Commonwealth Free Trade policy as a first step. however, In Canada there is little popular feeling for the Commonwealth, and it is not celebrated by the government and commentators have called for the institution to be wound up. So while we may like a new free trade agreement with say Canada they may not be so willing to have a free trade agreement with us in the UK? As Canada for one country has be seeking to join the US and Mexico in a new free trade group that it closer to home.

So while trade with the Commonwealth is still important and could be much better it only makes up a very small share of our exports. there is also the other key fact to look at and its this... if you was living in Canada say would you rather trade with the US and Mexico on your door step or would you rather trade with the UK and Australia? there is also no gurantee that the old Commonwealth would be willing to drop all there currant trade agreement with others to return to the trade agreement of 40 years ago? as did we think about them when we left them too join the EU? I think not myself.. However, nothing i have daid here has is stopping us have good trade with Canada say.. but a free trade agreement is a very long way off in my view.

my own father voted not to join the EU. but that is now histopy and we are in a club that many right wingers dislike.. yet there are no guarantees in economics and anyone who tells you their is is quite mad in my view. you know my fathers generation always look back at the past and believe it was a golden time for us.. well it was.. but not for many others who lived and worked within the Commonwealth. to them it was very one sided indeed

by Stox 16 Wed Jul 09, 2014 10:44 am

oftenwrong wrote:There used to be a British import tariff that was called "Imperial Preference" which allowed goods from the former British Empire nations to enter Britain free of duty. Thus e.g. New Zealand butter and Australian lamb dominated the market.

Until Ted Heath decided we would be better-off inside the European Zone, and kicked our old overseas partners right in the painful area.

They might remember that.

This is all quite true oftenwrong. as the terms of Britain's membership in the European Union precludes it from unilaterally negotiating for a CFTA.

by boatlady Wed Jul 09, 2014 3:41 pm

I'm not so sure what we'd trade, as nearly all the industry has gone.

I remember school geography lessons when we were taught that Britain imported raw materials from the rest of the world, and turned them into manufactured products. As a small country, we're a bit short of raw materials, and without a manufacturing base, I don't understand what we have to sell.

As far as I'm aware, we're not even self-sufficient in food, never mind more complex things

by oftenwrong Wed Jul 09, 2014 11:15 pm

There is a lively demand for British postage stamps, boatlady. We should be able to keep up with Andorra and Monaco in foreign earnings on the philatelic side.

by boatlady Wed Jul 09, 2014 11:27 pm

What a relief!!

by Stox 16 Thu Jul 10, 2014 12:21 pm

boatlady wrote:I'm not so sure what we'd trade, as nearly all the industry has gone.

I remember school geography lessons when we were taught that Britain imported raw materials from the rest of the world, and turned them into manufactured products. As a small country, we're a bit short of raw materials, and without a manufacturing base, I don't understand what we have to sell.

As far as I'm aware, we're not even self-sufficient in food, never mind more complex things

Well we did trade in many things in the past. yet we face the same economic problems as Japan. as we are both quite small countries and are both cut off by the sea around us. we are both net importers of raw materials and both trade on manufactured goods. its fair to also add that we both are not just a bit short of rew materials but very short of them. however, there are some key differences between us both. we as a country move away from manufactured good and into service sector like banking while Japan did not. they stayed with what they was good at while we looked for a easy way out. you could well say. that we saw invisible earning as more important than manufactured goods. it was the wrong move on our part.

its not to late for us to change this. but not with a Government that still holds to its currant view that invisable banking earnings are still the key to our economy. Japan and Germany both view banking as a 2nd economic group that is there to support its manufacturing core base. however, our government do not sure this key view. they will tell you they do.. but there actions show us that in real tearms they do not. as lets put it this way. an engineer in both Japan and Germany are held in great regard and banking is not. a good engineer in say Japan or Germany are called professors and seen as great leaders. but in England they are not seen in this way. we honour bankers and not engineers still. we turn 50 bankers into Lords and Sirs for every one engineer. Now this just would not happen in Japan or Germany. yet does here?

now this in turn leads us to our Governments and the whole question of what sort of government policy we do need. do we need more bankers or more engineers? if its bankers we need then lets stay as we are today. as you do not need much to be a banker and countries like say Malta can do this. as they do not have either the space or people to be engineers or have a economy that is built on it. or we can change in the UK and start to re-build our manufacturing base and invest in what some call our dirty industries. in other words get our hands dirty once more like we did in the past.

Now there are some political parties within the UK that talk about shutting off key markets due to the fact they do not like the rules of the economic game. well that is bad luck on them i say. as they helped set up the economic rules in the first place. so it not a case of loving or hatting the EU that is the problem. but weather we see ourselves as a trading nation or not? if we are to trade then in what is they key issue and not with who we trade with.. as lets face it.. we would all trade with someone we did not like if it made us better off in the end. in fact we do it right now as a country. so its not a question of who we trade with is it? but a case of who we think we like? so right now we hate the EU and its Rules and yet now say we love the Commonwealth and its Rules. so is economics about what we like or hate or is it about trading in a free way that is fair to all its people that matters most?

is this that is the key issue here. in other words we wish our cake and we wish to eat it too. but under only our Rules. so the battle is between what then? i would say its a battle for an economy that both meets our needs and that we are good at and a economy that selective in who it would like to trade with. now if you agree with me then we do need a Labour Government given the fact they believe in a government for all the people. if not then vote for the two parties they wish to have a rich top down government that is selective and will only trade under it rules. the choice is down to us.

by Stox 16 Thu Jul 10, 2014 12:27 pm

oftenwrong wrote:There is a lively demand for British postage stamps, boatlady. We should be able to keep up with Andorra and Monaco in foreign earnings on the philatelic side.

a most interesting take on things i must say oftenwrong

by boatlady Thu Jul 10, 2014 4:30 pm

we face the same economic problems as Japan. as we are both quite small countries and are both cut off by the sea around us. we are both net importers of raw materials and both trade on manufactured goods. its fair to also add that we both are not just a bit short of rew materials but very short of them.

That's what I thought - we stopped having real shared prosperity when we stopped the heavy manufacturing

by **Ivan** Sat Jul 26, 2014 11:25 am

Who is right about the British economy? - Page 10 BtdQ3BdIUAAdSlm

https://pbs.twimg.com/media/BtdQ3BdIUAAdSlm.jpg

by **astradt1** Sat Jul 26, 2014 2:39 pm

Remember who they, the Tories, love to talk about 'trickle down effect of wealth' well we must be suffering the longest period of drought in living history..........

by oftenwrong Sun Jul 27, 2014 12:24 pm

Sunday Times dig-of-the-day:

"Would you give the keys of the car again to the ones who crashed it last time?"

Someone needs to have an answer ready. Quickly.

by **Ivan** Wed Jul 30, 2014 4:33 pm

Wages Will Not Have Fallen So Sharply Since The Victorian Era

From an article by Asa Bennett:-

"Britons' wages will by next May never have shrunk so far over the course of a single term of parliament in real terms since the Victorian era. According to analysis by the House of Commons Library, the last time average earnings, accounting for inflation, slid by a greater amount was from 1874-1880, when Benjamin Disraeli was PM. At the time, the global financial panic of 1873 sent Britain into two decades of economic stagnation, known as the ‘Long Depression’, and resulted in soaring unemployment, bankruptcies and a major trade slump.

The new analysis found that the coalition will set a new record as they preside over the first parliament since the 1920s when real wages have been lower at the start than at the beginning. Real earnings are expected to have declined by 2.3% according to data and OBR forecasts, compared to a fall of approximately 2.6% between 1874 and 1880. By contrast, wages fell in real terms by 1.8% between 1922 and 1923.

The House of Commons Library reached its conclusion using official figures from the Office for National Statistics, the Bank of England and forecasts from the Office for Budget Responsibility."

http://www.huffingtonpost.co.uk/2014/07/29/uk-wages-earnings-victorian-era-fall_n_5629989.html?

Meanwhile, thousands of British workers are apparently showing their appreciation for having their wages reduced…. scratch

Tories to announce "tens of thousands" increase in membership at party conference

The Tories claim that their total membership is nearing 200,000. No doubt the figure includes "friends" and Conservative Future members. As George Eaton says: “The key test will be whether the numbers survive scrutiny”. The Tories wouldn’t lie to us, would they? Shocked

http://www.newstatesman.com/politics/2014/07/exclusive-tories-announce-tens-thousands-increase-membership-party-conference

by oftenwrong Wed Jul 30, 2014 7:23 pm

The topic heading is misleading in the sense that Tory Party economics are NOT a failure in 2014 for their supporters who employ a lot of staff. There are uncountable examples of essential goods and services whose prices have increased by as much as 20% (Energy suppliers and Telecoms providers, you know who you are) although wages remain depressed.

by **Ivan** Wed Jul 30, 2014 9:42 pm

If you do vote for more of the same in 2015, this is what could well be in store:-

The Tory tax bombshell that would clobber middle earners

From an article by James Bloodworth:-

Oliver Letwin, the minister for government policy, has let slip that the Conservatives are considering a new tax plan which would hammer middle and low earners. He said the Conservatives were “not in a position” to implement the policy in tight economic times, but he added that “there may come a time when the situation is different and the situation will no doubt open up at that point”.

Letwin is minister for government policy and is responsible for developing new policies along with the cabinet office. He has previously been described as the government’s “intellectual sage”. His intervention follows praise of the flat tax by other senior Tories, including Osborne, who has previously called the flat tax a “very exciting idea”. Boris Johnson has also said that a flat tax could “work brilliantly”.

A flat tax would clobber low and middle income taxpayers, according to the Institute for Fiscal Studies (IFS). They would take a bigger hit for two reasons:
1) In order to pay to lower tax rates for higher earners tax rates for lower earners have to go up.
2) Flat taxes weaken the work incentives of lower-income individuals because they decrease the benefit experienced by the poorest when they move into work or increase their hours.

The IFS also found very little to support claims that the flat tax introduced in Russia has resulted in an increase in personal tax revenue going to the government.

http://leftfootforward.org/2014/07/the-tory-tax-bombshell-that-would-clobber-middle-earners/

by oftenwrong Wed Jul 30, 2014 10:41 pm

The Poll Tax was a flat-rate tax.

Some people are just slow learners.

by methought Fri Aug 01, 2014 9:05 am

oftenwrong wrote:The topic heading is misleading in the sense that Tory Party economics are NOT a failure in 2014 for their supporters who employ a lot of staff. There are uncountable examples of essential goods and services whose prices have increased by as much as 20% (Energy suppliers and Telecoms providers, you know who you are) although wages remain depressed.

I agree - and I think that the Tories had some clear policies when they came into power that were intended to keep the wolf from the door. The main one was the transfer of national debt to private debt and the shoring up of the international monetary system to prevent its imminent collapse. Gordon Brown saved the banks, and thereby saved the western world, and the Tories designed inequality to reduce expenditure per capita to get the national balance of payments back in the black. The suffering this has caused to the poorest and most vulnerable of UK citizens is despicable, but a return to inflation is not the way out of this mess, nor is isolation from neighbouring economies in similar straits.

It is sickening to hear British Gas say they must put up their prices because last winter's 'mild' weather caused a drop in usage when for the low paid the choice between eating and heating was a cause of great misery and poor health. The vulnerable must be protected and the immigrants with 15 children getting £55,000 a year top-up on a £20,000 a year salary need to be looked at again. The family credit system was not designed with such huge family sizes in mind.

For British Gas keeping their share-holders happy was their greatest concern.
This (shareholder power) is the underlying problem with the costs of essentials.

by methought Fri Aug 01, 2014 9:19 am

Also the greater the power of the multi-nationals, the less support there is for small-scale initiatives and alternative energy systems. It is good to see that a new North Sea Gas platform is being built in Hartlepool - it shows that capital expenditure is large at the outset - and employs many people. I would also however like to see support for small community initiatives of a wind turbine at the local park, for example, to supply the nearby housing estate, for instance. At present you can have your own and feed into the grid, or buy into a big company but forming a collective would not be compatible with current economic favouritism (and maybe National Grid interface?). Will Labour also be seduced by size and numbers over community and autonomy? Big Industry is over but new technologies could bring new opportunities to communities starved of interesting and skilled jobs.

by methought Fri Aug 01, 2014 9:23 am

Still waiting for Labour to set out its stall for the next General Election

by boatlady Fri Aug 01, 2014 9:53 am

the immigrants with 15 children getting £55,000 a year top-up on a £20,000 a year salary

Do you have evidence for this rather inflammatory statement?

by **Ivan** Fri Aug 01, 2014 11:53 pm

Still waiting for Labour to set out its stall for the next General Election

This leaflet has, since September 2013, been distributed as part of the 'Labour doorstep' campaign:-

Who is right about the British economy? - Page 10 Cost-of-living-crisis-2

Who is right about the British economy? - Page 10 Cost-of-living-crisis-2

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