h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

A quick scan makes it look as if you import a LOT more goods than you export, but I haven't looked in detail so that impression may be wrong.

my foots asleep and looking at thart stuff, the rest of me is going to join in

Note that this excludes ~Invisible Earnings~. The value of these to the grassroots economy is harder to quantify. The UK does reasonably well at GDP - but Invisible skew per capita earnings. And the concentration on Invisibles means were resigned to high unemployment: theres only so much service sector an economy can support.

Note that this excludes ~Invisible Earnings~. The value of these to the grassroots economy is harder to quantify. The UK does reasonably well at GDP - but Invisibles skew the per capita earnings distribution. And the concentration on Invisibles means were resigned to high unemployment: theres only so much service sector an economy can support.

There's all this about us being an economy based on services, but I remember hearing that we rank 6th in the world for manufacturing, which ain't so bad is it?

Even the plastic policeman's helmets are made in China.

WG:
>>There's all this about us being an economy based on services, but I remember hearing that we rank 6th in the world for manufacturing, which ain't so bad is it?

Youre right that we do still have a large manufacturing sector:

http://investing.curiouscatblog.net/2009/10/13/data-on-the-largest-manufacturing-countries-in-2008/

I wasnt meaning to imply that we dont make *anything*. But its a little more complex than that. We're not very good at finding markets for what we export. This is for a mixture of reasons:

- Others (eg the BRICs) can easily undercut us in the basics. And we cant do much about this unless we want to live like Guangzhou sweatshop workers. Blame (ironically, considering) Capitalism.

- In the quality stuff others (Germany;The Nordics) have invested more and this produce better products (and have more highly educated populations and can therefore innovate more easily)

- A key decision was made was made in the 1970s, principally under the influence of Keith Joseph, to peg our currency at level which suited the Financial sector at the expense of the industrial. (It was our oil wealth that enabled this. While Norway built up a sovereign wealth fund of over £100k per capita, we pissed ours away...into the pockets of investment bankers) This still pertains and our exchange rate is nowhere near as attractive as it could be for exporters.

So where we have it at the moment is that we still retain a domestic manufacturing industry which largely (by no entirely!) subsists on selling low-ticket items in the domestic market. You can maybe get a glimpse of this from this weeks news item about the products MPs have selected as representing manufacturing excellence in their industries:

http://www.guardian.co.uk/news/datablog/2011/jul/05/made-by-britain-vince-cable

Fish fingers? Custard creams?

So. The reasons why we dont have a successful, globally-renowned Bombardier selling rolling stock around the world despite the outward appearance of a healthy manufacturing industry are many and complicated. Its hard to see it as a failure in protectionism, though: Europe remains by *far* our largest export market and while the EU may have its many faults, without the reciprocal arrangements weve signed up to wed be screwed in short order. Or, rather, *more* screwed.

glad to see my hometown is one of the ones with something rather brilliant.

I think we would do rather well with out the EU. Most of our reciprocal arrangements are not to our benefit.

for example we provided part of the funds to build a factory in Poland for Peugeot, who then closed their manufacturing plant in England and moved production to Poland.

when you say "we provided funds" you mean that the EU as a whole provided funds in order to improve the manufacturing capabilities in a country that has suffered greatly from lack of investement and then being royally shafted after the collapse of communism.

There are areas of the UK that have benefitted from EU funding (can't think of any of the top of my head at the moment, but I'm pretty sure I read about one or two)

If there are jobs in Poland they won't keep going to the UK to steal yours, will they?

<>

A Peugeot built in Coventry at the time cost a few hundred euros more to produce than one built on the Continent, partly due to the high wages paid to the British workers. I recall at the time of the Ryton plant closure one worker lamenting on tv the fact that he was an unskilled worker, and where would he find another job that paid him £20 per hour?

Cost of living in the UK seems to be excessively high compared to the rest of Europe, therefore people demand higher wages. It's little wonder companies will relocate production to Poland, or further afield, in order to remain competitive. We no longer have the infrastructure to manufacture goods in enough quantities to compete with, say China, and even if we did we would price ourselves out of the market anyway.

This was mentioned on R4 last night.

It was, of course, do do with France. Now before you all roll your eyes and tut...from their point of view, it was a quite reasonable thing to do. Peugeot is a French company - yet Poland can make cars cheaper than France (or, indeed, the UK). So the argument is that what France (and, indeed, the UK gets out of the deal is...cheaper cars.

Yes, yes and shareholders also get more profits. Except that under the French/German model those profits are proportionally smaller than in a typical UK company because they take more in overhead and re-invest it into R&D - and their reinvestment is subsidised through tax breaks etc etc. Result: *better*. cheaper cars. And more profit.

This is the trick the UK has consistently missed. Under EU regulations, direct subsidy and protectionism outlawed. This is as it should be if we buy the Adam Smith Free Market model of wealth creation: free markets require this level playing field. Re-investment, on the other hand is permitted. Encouraged, even. It generates wealth alll rouns...and we like wealth, yeah?

But instead of this, the UK has persisted in the beliefs that a) we can win the race to the bottom and b) we can survive on services and invisibles. a) is clearly a non-starter. Not only are we not China but neither are we Chinas future African cash cow. b)...I fully acknowledge that the UK has a strong Invisibles sector which contributes massively to GDP. But as previously mentioned, the trickledown from this is ...patchy. As is, notoriously, the public revenue. Also, as recent unpleasantness makes clear, makes our economy extremely unstable.

So as I say...the EU jas many, many faults. But we can hardly complain if were losing because theyre playing football while were trying to play tennis. (And you know how good we are at tennis. Or football, come to that). The EU *could* be an opportunity. But we have to Get With The Programme. Its not a matter of playing the same dirty games as some imply. Its a matter of learning from the masters how to run a modern economy with prospects for the future.

I do have a limited sympathy with the OP. Under EU regulations, it *is* possible to set social criteria within tenders, provided they are clear from the outset. In fact, the EU like this sort of thing. Theyre all of a piece with the assumption of a Social Economy. So maybe the (Labour) government could have done more in that respect. Except that historically the UK has either derogated from or paid lip service to any EU social legislation. We can hardly go cherry-picking now, surely? I cant really see the Tories pushing Social Chapter stuff either.

Other Monkey:

>>Cost of living in the UK seems to be excessively high compared to the rest of Europe, therefore people demand higher wages. It&#39;s little wonder companies will relocate production to Poland, or further afield, in order to remain competitive. We no longer have the infrastructure to manufacture goods in enough quantities to compete with, say China, and even if we did we would price ourselves out of the market anyway.

Well, yes. But if we look at say, Finland and Sweden, their cost of living (and taxes) and wages are even higher. So they do something else that *doesnt* try to compete with China. And by doing those things they can afford to pay the high wages and high taxes...

Cross-party delegation of councillors and railway folk descend on Westminster
http://www.bbc.co.uk/news/uk-england-derbyshire-14817214