The real state of the UK economy?

[RutlandFlyer]

I think if I'd bought property in Rotherham I would have little chance of seeing any return on my investment. I live in the Hope Valley and have already seen a 35% increase in property value over 2 years. TBH I don't really care what you think. I'll be out of here quicker than you can close a steel works once you've subsidised my LPC.

 

I hope your subsidised LPC is adequate compensation for you being a massive, unlikeable cow, which is how you're coming across here.

 

---------- Post added 21-11-2013 at 11:23 ----------

 

Building social housing does nothing for the future, it just kicks the can down the road for future governments to deal with ie, what happens when that housing fills up and we need even more? You can't just keep increasing the population forever. At some point we need to figure out how to live with a declining population.

 

Your hatred of all things public sector is extremely well documented, but surely more social housing would progressively relieve pressure on both the private ownership and private rental markets, serving as a means to gently bring them down to a sustainable level?

 

The alternative is to just keep expanding the bubble, though schemes like Gideon's Help to Buy, until it bursts again, precipitating another financial crises and recession. Left to its own devices, the market will always find its own level, but it might do so in a catastrophically damaging manner.

[tzijlstra]

Their was once an opportunity for the UK to develop a diverse and strong economy similar to that of Germany, instead there has been a track-record of poor decisions that increasingly saw the economy shift to London and destroy the manufacturing industry of the North. (PS don't just blame Thatcher for that, it started well before)

 

The country is now reaping the results from that period, it is relying on highly cyclical markets: Housing, retail and banking. Leaving the EU will only add to that problem as currently the UK is fortunate in attracting foreign investment due to an attractive corporate tax-climate and a relatively skilled workforce whilst benefiting from open access to the EU. Take away that open access and the investment stops, Cameron knows this which is why he wants to 'renegotiate' terms. But even that won't placate the nay-sayers.

 

So, is this country in economic trouble, even if GDP grows and unemployment drops? yes because it isn't facing up to the real underlying problems:

 

Build more houses, regulate the banks properly and accept that it is a global economy, and no longer an empire economy.

[BoroB]

But the government does make its payments. There is no indication that it can't, even with Osborne applying the biggest fiscal stimulus this country has ever seen. Even if interest rates rise we have predominantly long term debt. We have a very efficient debt management service. And we can print.

 

The real problem is not the existing debt which is managed quite well but rather the chance that we may lose the ability to borrow more money at the current low rates of interest. That is why Osborne's deficit reduction failure is so critical - it requires us to keep borrowing way too much.

 

Yes it makes repayments by borrowing more because expenditure for the UK is consistently more than the income.

 

I suppose the question should be who would manage the deficit reduction the best?

[RutlandFlyer]

Their was once an opportunity for the UK to develop a diverse and strong economy similar to that of Germany, instead there has been a track-record of poor decisions that increasingly saw the economy shift to London and destroy the manufacturing industry of the North. (PS don't just blame Thatcher for that, it started well before)

 

It seems to me that at some point, there was an acceptance that the only way forward for the UK's industry was to make it leaner and more efficient, so as to compete with up-and-coming developing nations. Any industries that could not compete at that level were left by the wayside.

 

Germany, by contrast, seem to have taken the decision to enhance and promote their industry so that it's competing at the very highest levels of quality and innovation. Levels developing nations couldn't possibly match.

 

It's like Germany decided to make a premium product while the UK aimed for the bargain basement, only to lose out to countries where labour costs were much cheaper and labour laws more relaxed. The irony now of course is that some of the countries who won that fight for cheap industry, I'm thinking of Korea specifically, have now developed their industries to the point where they can compete at the highest levels.

 

I just think that if we'd used the steel industry in Sheffield to drive innovation and really push the envelope in terms of what could be accomplished, instead of stripping it down to try and compete with Poland, there would be more people employed in what remains of it today.

[Anna B]

It seems to me that at some point, there was an acceptance that the only way forward for the UK's industry was to make it leaner and more efficient, so as to compete with up-and-coming developing nations. Any industries that could not compete at that level were left by the wayside.

 

Germany, by contrast, seem to have taken the decision to enhance and promote their industry so that it's competing at the very highest levels of quality and innovation. Levels developing nations couldn't possibly match.

 

It's like Germany decided to make a premium product while the UK aimed for the bargain basement, only to lose out to countries where labour costs were much cheaper and labour laws more relaxed. The irony now of course is that some of the countries who won that fight for cheap industry, I'm thinking of Korea specifically, have now developed their industries to the point where they can compete at the highest levels.

 

I just think that if we'd used the steel industry in Sheffield to drive innovation and really push the envelope in terms of what could be accomplished, instead of stripping it down to try and compete with Poland, there would be more people employed in what remains of it today.

 

We had Rolls Royce and a number of car companies that went abroad (including to Germany,) yet Nissan moves in and we now make cars successfully but the profits go to Japan.

 

I just can't understand this. Is Nissan subsidised in some way? How come they succeed while British companies failed?

[tzijlstra]

Nissan is partly subsidised, but the reason companies like Nissan come over is to shorten logistical lines and local expertise in mechanics/robotics as well as access to particular markets. Although the profits might end up in Japan, Nissan still pays plenty other taxes, as well as employing thousands AND keeping lots of UK SMEs in business.

[Mecky]

And for those of you who maintain the view that the cuts are lowering the national debt http://www.dailymail.co.uk/news/article-2303345/Britains-debt-mountain-reaches-1-39TRILLION-equivalent-90-entire-economy-ONS-reveals.html And in the Daily Hitler too, even if it is from the ONS, which I absolutely hate. Let's hope they're wrong again

[999tigger]

I hope your subsidised LPC is adequate compensation for you being a massive, unlikeable cow, which is how you're coming across here.

 

---------- Post added 21-11-2013 at 11:23 ----------

 

That was my impression of the poster concerned. Why isnt her firm paying for her LPC?

[tzijlstra]

And for those of you who maintain the view that the cuts are lowering the national debt http://www.dailymail.co.uk/news/article-2303345/Britains-debt-mountain-reaches-1-39TRILLION-equivalent-90-entire-economy-ONS-reveals.html And in the Daily Hitler too, even if it is from the ONS, which I absolutely hate. Let's hope they're wrong again

 

It's a tricky one Mecky, because the consequences of not cutting aren't clear. If the government had not cut spending would the debt-graph have spiked even more? Without doubt, but would it have lasted so long? Some will argue it would have and worse, others will argue that it wouldn't. It is a classical left/right debate without clear answers.

 

Personally I think the government didn't have a choice but to cut, the reason being that the panic that enveloped national economies in Europe would have caused Britain to be dragged into the same death spiral that for example Italy and Spain entered. That would have resulted in an even bigger destruction of public spending as the country would be declared bankrupt without (which would then end in a rather terrifying scenario).

 

For me the debate isn't cut or not, but what to cut.

[El Cid]

It's a tricky one Mecky, because the consequences of not cutting aren't clear.

 

Didnt the Tory cuts end up being watered down, similar to what Labour were proposing?

And how much did growth decline, just a matter of a few percentage points? The real decline was caused by people panicing, and to a certain extent Government, reducing spending and reducing their planned borrowing.