Join the Socialist Party Join us today!

Printable version Printable version

Facebook   Twitter

Link to this page: http://www.socialistparty.org.uk/issue/388/4391

From The Socialist newspaper, 14 April 2005

What we think

British economy - not really that healthy

NEW LABOUR hoped its reputation for 'economic competence' would be the touchstone of the election. Gordon Brown was specifically brought back into the election team to emphasise the point. But the farce and tragedy of Rover's collapse could shatter all that.

The Rover crisis reveals just one of many hidden economic dangers lurking under the rocks and its demise could bring Labour's handling of the economy centre stage.

Rover is symptomatic of a longer-term organic crisis of British capitalism, with a continued decline in its manufacturing base and an increasing deindustrialisation.

This decline has been masked for over a decade by generalised world economic growth and the expansion of the service industry on the back of this, financed by a massive expansion of credit. Over 1 trillion (a thousand, thousand million) of consumer debt exists in Britain - equivalent to one year's Gross Domestic Product.

Although Blair promised to keep Brown as Chancellor post-election, Brown himself may soon view it as a poisoned chalice.

Brown claims to have presided over the longest upturn in economic growth for centuries but the reality behind his selective use of statistics is less vibrant.

The housing market is slowing down - mortgage lending dropped 30% in six months. Consumer spending is dropping - car sales are 15% down in the first quarter of 2005 - as consumers try to reduce their debt.

Any boost to the economy from public spending is likely to contract whoever wins the election - as all parties have promised to cut the rate of growth in public expenditure.

Steve Andrew, chief economist at fund managers F&C predicted to The Observer that "things are going to slow down... you're looking at a pretty sluggish environment in the medium term."

And this 'sluggish' prospect does not account for a marked downturn in the US and world economy or the long-term impact of higher oil prices.

Exploitation

YET, THE normally sober Financial Times proclaimed: "Rover is dead. Long live British manufacturing", proclaiming things were looking optimistic for British industry.

They claim that although manufacturing employment has halved in Britain in the last 25 years down to 3.2 million, productivity increases means output is almost 30% higher than in 1980, with output in the car industry doubling in two decades.

But this has come about through increased exploitation of the workforce, changes in statistical methods and does not show the two-tier effect in British manufacturing, where some sectors are slowly expanding while others are a disaster. Since 1997 British manufacturing has shed one million jobs.

Manufacturing has fallen to pre-2001 levels and output fell by 0.5% between January and February. Last month the manufacturing index stood at 98.8. At the 2001 election it stood at 99.8 and in May 1997 it was 97.2. Hardly the signs of a booming economy! Total manufacturing output has risen just 1.6% in the past eight years.

The relatively 'healthier' manufacturing sectors are generally where inward investment from multinational companies has taken advantage of cheaper labour costs and less restrictive labour laws.

But, once a recession bites companies such as Nissan, Toyota and Honda in the car industry would brutally shed their British workforce first. At the same time, the service sector is vicious in its shedding of labour at the first signs of downturn.

If there are any big shocks in the world economy over the next month - not impossible - then Labour could face their own Black Wednesday.

But, whatever happens short term, big convulsions in the world economy are inevitable down the line, given the huge speculation and leverage in the world's financial markets.

This would lead to a massive jobs shake out and leave any incoming government with the equivalent of Longbridge disasters the length and breadth of the country.

Why not click here to join the Socialist Party, or click here to donate to the Socialist Party.


In The Socialist 14 April 2005:

MG Rover: The Ugly Face of Capitalism

Nationalise Rover now

No more asset-stripping, renationalise, don't subsidise

British economy - not really that healthy

Tesco - every two billion helps

Socialists' city-wide challenge

Anti-social behaviour orders (ASBOs) A socialist approach

New Labour's education failure

Liberal Democrats: Phoney radicals - no different to the rest

Socialist Students fight for a campaigning NUS

Three months after the tsunami, government inaction fuels the flame of protest

Pope John Paul II

Young members create new opportunities in Huddersfield


 

Home   |   The Socialist 14 April 2005   |   Join the Socialist Party

Subscribe   |   Donate  




Related links:

British economy:

triangleAmber warning lights flash on British economy

triangleTories torn - bin them now

triangleRight wing attempts to use single market against Corbyn

triangleHeathrow expansion exposes Tory divisions

Economy:

trianglePowerful picture of the Port Talbot steel workers' struggle

triangleYoung people being strangled by debts

triangleNationalise to save jobs at BAE Systems

triangleThe end of the Tories?

Manufacturing:

triangleBoeing bust-up threatens thousands of skilled jobs

triangleChina: debt crisis, state repression and the prospects for workers' struggle

triangleVote for action to save Ford plant

Labour:

triangleAnti-DOO lobby of Liverpool's transport committee

triangleBirmingham South East Socialist Party: Can the Labour Party be changed?

Election:

triangleBlairite horror and Labour's divisions graphically exposed

News and socialist analysis

News and socialist analysis

8/12/17

Government

Local government pay: fight for the 5% claim, fully funded

6/12/17

Labour

Corbyn's Labour can defeat Tories with socialist programme

6/12/17

NHS

Branson sues NHS: kick out the profiteers

6/12/17

Immigration

Royal wedding exposes them-and-us visa system

6/12/17

Banks

RBS to sack 1,000: nationalise the banks

6/12/17

Homelessness

Rough sleeping crisis: make homes, not arrests

6/12/17

Poverty

End Tory war on poor

6/12/17

Rail

Nationalise rail now

29/11/17

Them & Us

Them & us

29/11/17

Homes

Tory housing policy: build zilch, hike prices

29/11/17

Wages

Make the Tories history

29/11/17

Birmingham

Birmingham bin workers win!

29/11/17

British economy

Amber warning lights flash on British economy

23/11/17

Pay

After the budget - unions must launch pay fight

22/11/17

Climate change

Carbon dioxide hits 800,000-year high: end profit-driven pollution

triangleMore News and socialist analysis articles...


Join the Socialist Party
Subscribe to Socialist Party publications
Donate to the Socialist Party

triangle8 Dec Local government pay: fight for the full 5% claim

triangle6 Dec Strikers rally in Liverpool

triangle6 Dec Corbyn's Labour can defeat Tories with socialist programme

triangle5 Dec Victory at Glenfield shows people power can save our NHS

triangle5 Dec Labour council Blairites deselected

triangle30 Nov Victory: Glenfield Children's Heart Centre saved!

triangle30 Nov Dramatic retelling of Grunwick strike

More ...

triangle12 Dec Birmingham South East Socialist Party: Can the Labour Party be changed?

triangle12 Dec Liverpool Socialist Party: Fighting council cuts

triangle13 Dec Caerphilly Socialist Party: Are we heading for an era of war?

triangle14 Dec Wakefield Socialist Party: Universal Credit - the Tories' latest assault on the poor

More ...

Socialist Party Facebook page
Socialist Party on Twitter
Visit us on Youtube

Archive

Archives:

December 2017

November 2017

October 2017

September 2017

August 2017

July 2017

June 2017

May 2017

April 2017

March 2017

February 2017

January 2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

Legal

SP RSS feed RSS

Platform setting: = No platform choice

V2