UK economy.

[Herr Tubthumper]

Just like I said. He doesn't have a clue what the service sector is made up of.

FFS. In the same way banana custard comprises of bananas and custard the service sector is a sector made up of services. The clue is in the name; it's no mystery and you do not need to be as uber-clever as you to understand this.

 

[Herr Tubthumper]

something concreate on this "rebalanceing" mantra. im all for more manufacturing, but there is already quite alot. though a smaller proportion, there is more manufacturing output than any time before even accounting for inflation. its just other sectors have increase more. what im interested right now is what exactly is this balance supposed to be? another 5%, 10%, 20%? it just seems to have become a cheap cliche to trott out. i'd ask Osborne the same if he logged on to NSC, and i bet he wouldnt have any answer either.

and its funny you mention dependency on "service and finance", because the latter is a subset of the former, and is smaller than manufacturing.

If you want a figure then I'll go for 30% but I will settle for 25 which is approx double what it is currently.

And yes I agree that finance is a subset of the service industry. But, compared to other nations around the world, we are way too reliant on financial services. I think, of broadly comparable countries, only Luxembourg has a higher proportion. As it proved in 2007 it's dangerous to be so dependent on the service sector and financial services specifically and the reason I typed it out separately.

 

[Mo Gosfield]

Forget what the government and national newsspapers are saying, go out into the market place and ask the thousands of small business owners out there how they are doing and you will get a very mixed picture. The banks are reluctant to lend and are still trying to steer business into invoice factoring or discounting, from which the banks earn far more money. Lloyds have recently removed relationship managers from thousands of SME's and will only work off cleared funds.
The Federation of Small Business says that the first quarter 2014 was the worst for SME's since the recession began. There were more business failures in this quarter than any in recent memory, almost entirely down to companies unable to borrow.
Don't get me wrong, some sectors are doing better than others but the overall picture amongst smaller businesses is still pretty bleak.

 

[Herr Tubthumper]

Forget what the government and national newsspapers are saying, go out into the market place and ask the thousands of small business owners out there how they are doing and you will get a very mixed picture. The banks are reluctant to lend and are still trying to steer business into invoice factoring or discounting, from which the banks earn far more money. Lloyds have recently removed relationship managers from thousands of SME's and will only work off cleared funds.
The Federation of Small Business says that the first quarter 2014 was the worst for SME's since the recession began. There were more business failures in this quarter than any in recent memory, almost entirely down to companies unable to borrow.
Don't get me wrong, some sectors are doing better than others but the overall picture amongst smaller businesses is still pretty bleak.

This.

 

[beorhthelm]

Erm... firefighters jobs are being cut in Brighton - that's a fact not a deflection. And a lot of other services for vulnerable people in this city too. But I guess cognitive dissonance time for you, you can't deal with that so prefer to froth at the mouth over your ideological hatred of the public sector.

ok, i was a bit ranty. im not saying fire fighters arent being cut but thats local funding and issues around fire fighter pensions. there are lots of worthy services, but many didnt exist 10 or 15 years ago and people got on. i dont hate the public sector. what im against, and i believe you deny exists, is the massive waste and inefficency in the public sector. a friend works for an agency that employs hundreds of people and budget in 10s of millions just to dish out a fund of a couple of hundred million. why isnt this handled by existing organisations, councils for example? in the area i work i see first hand the gross waste of money in the health service through poorly planned and implemented IT systems that are diverting billions from front line healthcare. the HSCIC is an appaling organisation that seems to have employed anyone off the street in technical roles that they clearly have no experience of. electronic presciptions where supposed to bring efficencies to all parties involved, but surgeries ignore the system and paper scripts are still routine, or fax - yes fax - prescriptions to the local pharmcy and not where you have asked. an IT system costing hundreds of millions basically unused.

so shouldnt there be cuts, to spending, stop the excessive, over manned processes and bureaucracy to redirect funds to actual services? Brown considered the solution to everything to be "more funding", i suppose if you are an economist every problem looks that way. yes, spending can and does help, but often the actual solution is to affect change, review and revise process, be more efficient. but that *might* mean job loses, and just the fear of that puts off public sector organisations from even looking. so instead they keep inefficencies and increase budgets to make up performance gaps. if they (departments, councils and government) had more courage on actual real substantial cuts removing inefficent or poor performance, then they might not have to make piecemeal cuts across such a wide range, impacting on core services.

because thats the point at the end of the day. we've spent more and more on non-core services, bloated the organisation that provide them then cant seem to cut back to a core when necessary. i know you wont recognise any of this because of ideology. the economics, rather than politics, tells us you cant spend moeny on everything forever. longer we go until theres realisation of this, the harder it will be. see Pensions (if they'd grasped the nettle on that two/three decades ago it wouldnt be so hard on those facing change now)

 

[beorhthelm]

If you want a figure then I'll go for 30% but I will settle for 25 which is approx double what it is currently.

And yes I agree that finance is a subset of the service industry. But, compared to other nations around the world, we are way too reliant on financial services. I think, of broadly comparable countries, only Luxembourg has a higher proportion. As it proved in 2007 it's dangerous to be so dependent on the service sector and financial services specifically and the reason I typed it out separately.

well thats a figure to shoot for and i have no problem increased manufacturing, just not for the sake of increase itself. but is this "balanced"? if manufacturing is 30% shirley its something the economy becomes too reliant on? i can think of a country with a large manufacturing base that making some "interesting" political decisions, impacting many other nations, in order to protect that sector. observers might suggest they are willing to overlook alot of financial problems or political instability if it maintains their export markets.

and to point out, 2007 didnt prove anything other than we become too reliant on cheap credit, whether its for manufacturing, service or indeed public sector.

 

[Lenny Rider]

I cant see how they can come up with these figures, what about the ongoing job market?

Our manufacturing industry has all but gone, case in point, what has almost every household in this country got?

A television, yet the last factory in the UK making TV's closed in Swansea in 2009.

Even looking locally at Worthing, when I left school in 1980 there were at least 9 different employers that would take 16 year old school leavers on providing they had an English and Maths qualification, all four banks, Lloyds registrars, Excess Insurance, the Inland Revenue, MGM and Seeboard.

A very different picture for school leavers now.

 

[Kevlar]

You are out of date - that changed from 2003

Although the majority of gilts are held by British institutions, The amounts held overseas have risen sharply since 2003. Just over 35% of our national debt is owed to foreign governments and investors. We're relying on the confidence of foreign investors to keep our own country afloat. Your domestic financial institutions held about 39% a few years ago

and about 30% of UK GOVT debt is held by the Bank of England
Now like Japan and USA the interest on this "debt" is positive income for the treasury
if half of all new bond issues were purchased by the BOE the interest on all new "debt " would be fiscally neutral

It all comes down to power .
Japan's national bonds have been junk rated for more than a decade
and investors still queue up to buy them at historically very low interest rates
much larger govt"debts ", more QE ,2 decades of near 0% interest rates
and Japan still fights DEFLATION
and inflation is the only real consequence of too much govt debt
governments do all their spending via central banks
which can never run out of their own currency

large govt sector deficits are not a magic answer to everyone's economic problems
but to see them as some kind of problem is a giant strawman
used by rich people and those who believe in classical economics as a religion
to attempt to undermine the power of the state which in fiat monetary terms is a nonsense

if the government sector runs a surplus the country does not go into the black
the country is made up of the government sector and the private sector
the only other source of a monetary surplus for the uk private sector is the external sector
via international trade but for many decades now the uk runs a trade deficit with the rest of the world
that is in return for a net flow of goods and services into the country there is a net flow of stirling
out of the country .
it is basic double entry accounting.
aggregating the three sectors we get the following accounting identity

the govt sector balance (+/-) + the uk private sector balnce(+/-)
+ the external balance(+/-) = 0
if the uk private sector runs a balanced budget with it's government sector
it will be driven overall into the black because of the trade imbalance

google the history of UK govt debt
the current debt to GDP ratio is historically low
even thou a pure fiat currency only started after the end of bretton woods in the early 70's
historically the govt sector runs 9 years of deficit for every 1 of surplus
if under more favourable trading conditions and less favourable monetary rules
the UK government has not payed of its "debt" in the last 400 years why on earth
idles anyone think the next 400 years are going to be any different?
the govt sector will not pay off its "debts" cannot pay off its "debts"
these are the savings of its private sector!
this is the monetary power of the state to spend more money into the accounts
of households and firms than it removes in taxes and for as long as it can force is to use its
currency by enforcing the collection of taxes in that currency it will always have that power!

 

[Kevlar]

and about 30% of UK GOVT debt is held by the Bank of England
Now like Japan and USA the interest on this "debt" is positive income for the treasury
if half of all new bond issues were purchased by the BOE the interest on all new "debt " would be fiscally neutral

It all comes down to power .
Japan's national bonds have been junk rated for more than a decade
and investors still queue up to buy them at historically very low interest rates
much larger govt"debts ", more QE ,2 decades of near 0% interest rates
and Japan still fights DEFLATION
and inflation is the only real consequence of too much govt debt
governments do all their spending via central banks
which can never run out of their own currency

large govt sector deficits are not a magic answer to everyone's economic problems
but to see them as some kind of problem is a giant strawman
used by rich people and those who believe in classical economics as a religion
to attempt to undermine the power of the state which in fiat monetary terms is a nonsense

if the government sector runs a surplus the country does not go into the black
the country is made up of the government sector and the private sector
the only other source of a monetary surplus for the uk private sector is the external sector
via international trade but for many decades now the uk runs a trade deficit with the rest of the world
that is in return for a net flow of goods and services into the country there is a net flow of stirling
out of the country .
it is basic double entry accounting.
aggregating the three sectors we get the following accounting identity

the govt sector balance (+/-) + the uk private sector balnce(+/-)
+ the external balance(+/-) = 0
if the uk private sector runs a balanced budget with it's government sector
it will be driven overall into the black because of the trade imbalance

google the history of UK govt debt
the current debt to GDP ratio is historically low
even thou a pure fiat currency only started after the end of bretton woods in the early 70's
historically the govt sector runs 9 years of deficit for every 1 of surplus
if under more favourable trading conditions and less favourable monetary rules
the UK government has not payed of its "debt" in the last 400 years why on earth
idles anyone think the next 400 years are going to be any different?
the govt sector will not pay off its "debts" cannot pay off its "debts"
these are the savings of its private sector!
this is the monetary power of the state to spend more money into the accounts
of households and firms than it removes in taxes and for as long as it can force is to use its
currency by enforcing the collection of taxes in that currency it will always have that power!

sorry for the types and one very important mistake
if the uk private sector runs a balanced budget with its govt sector it will be
driven into the RED by the external trade imbalance

 

[beorhthelm]

Our manufacturing industry has all but gone, case in point, what has almost every household in this country got?

A television, yet the last factory in the UK making TV's closed in Swansea in 2009.

this is what pisses me off though, the misguided false information. our manufacturing industry is worth at least £140bn, and about 30% larger than the lamented finance sector. we make more cars than anyone in Europe except the Germans. but the manufacturing is "gone" because we dont make TVs? problem for manufacturing jobs is there's far more automation and robotics used now, so you dont need so many people.

i wonder, did you make a point of buying a british made TV, or did you get one based on price, a nice bezel or a nice sounding name?

 

[dingodan]

Massively cut taxes

Massively cut regulation

WIN

 

[somerset]

Massively cut taxes

Massively cut regulation

WIN

Regulation?.... cutting regulation was a massive contributor to the perpetuation and exaggeration of the effects from the global financial mess in 2007/8...... Gordon's masterstroke.

 

[dingodan]

Regulation?.... cutting regulation was a massive contributor to the perpetuation and exaggeration of the effects from the global financial mess in 2007/8...... Gordon's masterstroke.

Nah.

 

[Herr Tubthumper]

well thats a figure to shoot for and i have no problem increased manufacturing, just not for the sake of increase itself. but is this "balanced"? if manufacturing is 30% shirley its something the economy becomes too reliant on? i can think of a country with a large manufacturing base that making some "interesting" political decisions, impacting many other nations, in order to protect that sector. observers might suggest they are willing to overlook alot of financial problems or political instability if it maintains their export markets.

and to point out, 2007 didnt prove anything other than we become too reliant on cheap credit, whether its for manufacturing, service or indeed public sector.

30% is not "too reliant" in my mind. It will be made up of many different areas from high end "big" like British Aerospace down to small scale like the car component chain. It will be broad and therefore robust and able to take a few down hits. With it comes semi-skilled and skilled jobs, and this in turn puts good money in pockets and ultimately the UK economy. 30% manufacturing also beefs up the service side of things even more. Sure I go on about it but the UK has so much untapped potential in my mind, some very smart brains, and the government which ever colour should do more to realise this.

 

[Herr Tubthumper]

this is what pisses me off though, the misguided false information. our manufacturing industry is worth at least £140bn, and about 30% larger than the lamented finance sector. we make more cars than anyone in Europe except the Germans. but the manufacturing is "gone" because we dont make TVs? problem for manufacturing jobs is there's far more automation and robotics used now, so you dont need so many people.

i wonder, did you make a point of buying a british made TV, or did you get one based on price, a nice bezel or a nice sounding name?

We assemble cars, we don't "make" them. Eg JCBs used to be 70% British components. Now it is 30 with Italy supplying the bulk.

 

[Chicken Runner61]

and about 30% of UK GOVT debt is held by the Bank of England
Now like Japan and USA the interest on this "debt" is positive income for the treasury
if half of all new bond issues were purchased by the BOE the interest on all new "debt " would be fiscally neutral

It all comes down to power .
Japan's national bonds have been junk rated for more than a decade
and investors still queue up to buy them at historically very low interest rates
much larger govt"debts ", more QE ,2 decades of near 0% interest rates
and Japan still fights DEFLATION
and inflation is the only real consequence of too much govt debt
governments do all their spending via central banks
which can never run out of their own currency

large govt sector deficits are not a magic answer to everyone's economic problems
but to see them as some kind of problem is a giant strawman
used by rich people and those who believe in classical economics as a religion
to attempt to undermine the power of the state which in fiat monetary terms is a nonsense

if the government sector runs a surplus the country does not go into the black
the country is made up of the government sector and the private sector
the only other source of a monetary surplus for the uk private sector is the external sector
via international trade but for many decades now the uk runs a trade deficit with the rest of the world
that is in return for a net flow of goods and services into the country there is a net flow of stirling
out of the country .
it is basic double entry accounting.
aggregating the three sectors we get the following accounting identity

the govt sector balance (+/-) + the uk private sector balnce(+/-)
+ the external balance(+/-) = 0
if the uk private sector runs a balanced budget with it's government sector
it will be driven overall into the black because of the trade imbalance

google the history of UK govt debt
the current debt to GDP ratio is historically low
even thou a pure fiat currency only started after the end of bretton woods in the early 70's
historically the govt sector runs 9 years of deficit for every 1 of surplus
if under more favourable trading conditions and less favourable monetary rules
the UK government has not payed of its "debt" in the last 400 years why on earth
idles anyone think the next 400 years are going to be any different?
the govt sector will not pay off its "debts" cannot pay off its "debts"
these are the savings of its private sector!
this is the monetary power of the state to spend more money into the accounts
of households and firms than it removes in taxes and for as long as it can force is to use its
currency by enforcing the collection of taxes in that currency it will always have that power!

You can call it govt debt but printing money or quantative easing is not the answer and just covers up the long term problem which as you rightly say is inflation or hyperinflation is it runs out of control.

I'd also add here that our debts before were mainly war debts but this is simply public spending .

And the argument here is political blame and the question of wether the debt is increasing which you confirm is.

 

[Kevlar]

You can call it govt debt but printing money or quantative easing is not the answer and just covers up the long term problem which as you rightly say is inflation or hyperinflation is it runs out of control.

I'd also add here that our debts before were mainly war debts but this is simply public spending .

And the argument here is political blame and the question of wether the debt is increasing which you confirm is.

I was making 3 points about UK govt sector deficits

1 It is a historical reality
9 years in 10 for 400 years
2. It has never been easier to achieve
floating international exchange rates
non convertability of pounds to gold
3. It has never been more necessary
if you want the uk private sector to run a surplus
as the combined uk govt and private sectors
now consistently run a deficit with the rest of the world