Unemployment is rising fastest in the battleground seats

Fraser Nelson in The Spectator:

"Unemployment doubled last year in Brighton, Burton, Corby, Crawley, Redditch, Swindon and Tamworth — all Tory target seats. If anger at joblessness translates into anger at the government, then Labour is facing wipeout in the south. ‘We will say in these places: we warned you that Labour cannot be trusted,’ says one shadow Cabinet member. ‘They will be feeling especially betrayed.’ Unlike the unemployment of the 1980s, this is a white-collar recession whose pain is concentrated most acutely on the battleground seats."

We are definitely now in the 'pain stage' of Mark Field MP's stages of recession (click on graphic to enlarge).

It's certainly true that the Conservative Party must work for every vote at the next election but the news is going to keep getting worse for Labour.  Anger is coming.

Tim Montgomerie

PS At 11am today David Cameron is giving another speech. This time on his approach to tackling Labour's debt crisis.  I'm told that there'll not be much in the way of specifics but a clear statement of direction of travel.  Full coverage by lunchtime.

Comments

[Jack Stone]

Of course there will not be much in the way of specifics from David Cameron there never is. If he gets into specifics he may offend someone which he never likes to do. He is a Tony Blair type politican who likes to be all things to all men.

[James Maskell]

While comment on this is understandable, can we please try not to sound like we are enjoying this? Saying 'told you so' sounds like taking pleasure. People are losing their livelihoods. Can we please try to be more measured?

The Conservatives sound rather more happy about this than they should be. They should be furious and all Shadow Ministers (common complaint but little has changed in terms of activitiy of Shadows) should be doing their best to hold the Government to account. This is not really happening.

[Tim Montgomerie]

Good point James. I will be careful. A good friend of mine lost his job earlier this week. The personal pain of unemployment is enormous.

But, as in this post, I talked about anger.

[resident leftie]

Unemployment in the Eurozone stands at 7.6%, Canada 7.7%, the US, 8.1%. Unemployment is awful, but it's a global problem, and we aren't doing as badly as our international competitors. The rate of economic activity is also low. It's likely to get a lot worse all round though.

Politically, I think the timing couldn't be worse (from my point of view, of cours). The time of maximum pain is likely to peak just before the next election, and the recovery as a result of fiscal stimulus will happen in the months just following the election, so the Tories are likely to reap the political benefit.

[Tony Makara]

A very important point political commentators seem to be missing is that there is no other sector of the economy that displaced workers can fall back on. When manufacturing was abandoned in the 1980s, throwing whole communities on the dole some were able to find work again in the service sector. However the credit crunch has now meant the death of the service sector and where can these newly displaced workers go?

This all demonstrates the dangers inherent in a one-dimensional economy, with the service sector, which accounts for 76% of the economy now collapsing, there are no other sectors to pull us out of the mire. Let this experience be a warning to senior politicians of all parties that a nation like Britain, with a large population, has to have a balanced economy.

The current unemployment figures have become a severe reality check for many. A friend of mine once actually believed that people on the dole could actually ring up and get their fridge or TV replaced for freee if it ever broke down and if they were on benefits. He recently lost his job and now is facing the culture shock of having to live on 60 pounds a week. Mass unemployment is set to change the lives and outlook of so many.

[Elaina Brier]

This is great news! Perhaps we could open Conservative soup kitchens to help spread the word to the destitute!

I know many middle class people who have had one long party these last ten years...all on massive credit.

Toxic chickens are coming home to roost. They are now all facing bankruptcy but i'm stilll having a ball.

Bring on the election!

[Tony Makara]

Resident Leftie, I predict that unemployment will be higher at the end of term for whatever government is formed after the next election. This is because a job-creating infrastructure in Britian no longer exists. We no longer produced more than 9% and only supply around 60% of our own food. Unless manufacturing and agricultural production are encouraged through targeted government policy then people are going to remain unemployed.

Sadly the Conservative party has certain reservations about a large manufacturing base because that would carry with it the potential for mass organized labour, so I can't see a Conservative government supporting the idea of large scale manufacturing, for political reasons, sadly.

[Paul Kennedy]

He recently lost his job and now is facing the culture shock of having to live on 60 pounds a week. Mass unemployment is set to change the lives and outlook of so many.

Posted by: Tony Makara | March 19, 2009 at 10:01

But only for 6 months I think, after that it is means tested.

[Andrew S]

"Of course there will not be much in the way of specifics from David Cameron there never is. If he gets into specifics he may offend someone which he never likes to do. He is a Tony Blair type politican who likes to be all things to all men."

Trying to be all things to all men is what politics should be about, rather than only helping one narrow grouping

[Andrew S]

"Politically, I think the timing couldn't be worse (from my point of view, of cours). The time of maximum pain is likely to peak just before the next election, and the recovery as a result of fiscal stimulus will happen in the months just following the election, so the Tories are likely to reap the political benefit."

LOL

[resident leftie]

Posted by: Tony Makara | March 19, 2009 at 10:15

Sadly the Conservative party has certain reservations about a large manufacturing base because that would carry with it the potential for mass organized labour, so I can't see a Conservative government supporting the idea of large scale manufacturing, for political reasons, sadly.

I agree that the economy has been disproportionately based on the financial services sector since the 80s at the expense of a mixed economy.

We are also going to pay for work force flexibility - while it's certainly easier to employ people in the UK, it's also easier to get rid of them, so we don't get the dampening effect.

The government can do certain things to encourage certain types of business, usually through tax incentives, training, public sector procurement policy, research and offloading private risk into the public sector. Unless you introduce state socialism (and nobody wants that) what else can you do?

The realistic level of the pound certainly gives us a good opportunity to increase exports, and the increase in the prices of agricultural products will help - EU subsidies to farmers have increased massively due to exchange rate fluctuations.

But really, what do you suggest? What can the government do to stimulate growth in particular sectors?

[Super Blue]

RL,

My suggestion is that government gets off the back of the private sector and stops wasting money like it has done for the past twelve years,

Stephen

[Tony Makara]

Resident Leftie, government should award certain sectors special-tax-status. This could work in the following way. Any outlet involved in manufacturing would be exempted from certain levels of taxation. As a way of kick starting the economy new business should be exempted from taxation altogether for a certain period until it has grown large enough to develop a job-creating infrastructure.

Government could play a big part in getting rid of ideological misgivings about providing competitiveness and consumer choice by encouraging mergers through the establishment of guilds. As our economy currently stands there are too many SMEs and not enough businesses who big enough to compete against foreign counterparts.

The economy now has to be completely restructured, with the emphasis placed on making Britain into a nation of producers once again.

[Roger]

Tim etc.,

Not moved to contribute often but I've just about reached the end of my tether. I fully beleive in and support the democratic process and feel that the Concervatives should use all means available to bring this government to account.

After the publication of the latest set of disaterous public finance figures, why can't the Tories use filibuster, legal disruption of votes etc to make further business impossible. A declared policy of complete non support for ALL government policies should be made, as there has been a complete and irrevocable collapse in trust between goverment and parialment and hence the electorate. This could be shouted from the rooftops. This should continue until there is a general election.

This may damage the progress of some Tory policies that the Labour party brings forward but this needs to be balanced against the continuing harm that Labour policies are doing to the Country.

If there was a declared policy of OPPOSITION (what we're supposed to be), it may encourage some of the more 'honest' Labour MP's to rebel so that they can distance themselves from the car crash of this Government and also have deniable plausibility if the Government is brought down as they were following their conscience and it was the nasty Tories that did it.

I'm increasingly concerned that as the recession/depression continues, social unrest will increase and, before the GE is called my erupt in disorder, this will noone any good.

[Sean Fear]

Economies that are more dependent on manufacturing than ours, such as Germany and Japan, are faring even worse.

Service sector output in the UK has actually held up comparitively well.

[Paul Round]

Sean Fear; Germany and Japan wisely have not encumbered themselves with massive debt, unlike the UK, which is now borrowed at 50% of GDP (and that's only what they admit to).Yesterday's unempoyment figures here showed the steepest rise since records began in 1971 and you maintain that Service Sector output has held up comparatively well?

[RichardJ]

Manufacturing relies a lot more on machines rather than men nowadays. That explains why our manufacturing output is at record levels despite the decline in manufacturing employment.

[RichardJ]

http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article5897706.ece

Further to my last post. Our manufacturing output is larger than Frances's.

[Tony Makara]

RichardJ, manufacturing seems to work for China. Just look how many Chinese goods are in our shops. Just think they could have been made-in-Britain by British workers. We can do it, the only thing lacking is the will and a straegic plan from government to support the sector. Its about having the right attitude.

[a-tracy]

Resident Leftie "But really, what do you suggest?" I'd suggest that the government could scrap the hike in National Insurance (NI) planned in 2011 which was seen as damaging by 90% of SMEs surveyed recently for a start. This affects decisions that SMEs are making now. I'd guess the other 10% that don't think this is damaging use sub-contract labour and thus don't pay any employers national insurance.

Employment costs have increased substantially and some of our manufacturers left because people wouldn’t buy the products made in the UK because they were so highly priced to cover these costs. Regulation is overdone in the UK.

TM, not all of us want to work for faceless conglomerates offering limited ranges and stagnating over time. Some of us like our dynamic businesses that innovate and move quickly to adjust to change.

[Tony Makara]

RichardJ, nontheless its 9% of our economy in contrast to the service sector which is 76% and nowhere near enough to create enough jobs for a population of our size.

Richard, do you seriously think we can continue with such a large service sector, which is so dependent on credit for cashflow? Do you believe we can continue to suffer trade deficits without it coming back to haunt us?

We need manufacturing, its the only way to put large numbers of people back into work.

[Tony Makara]

A-Tracy, we need comglomerates so that British business is able to fend off competition from abroad. The establishment of conglomerates and guilds would also improve relations with the unions because there could be across the board agreement on working practices, pricing and wages. Government has to take the reins of British business and allow for mergers and a stronger economic base.

[RichardJ]

"Just think they could have been made-in-Britain by British workers."

And would cost twice as much.

"The establishment of conglomerates and guilds would also improve relations with the unions because there could be across the board agreement on working practices, pricing and wages."

Sounds like a cartel to me. I don't want consumers being stitched up by such callaborative bodies.

[Tony Makara]

RichardJ, you have to understand the difference between broad agreement on pricing and price-fixing.

The way I see it free-market ideas about creating competition have led to the splintering of the British economy. We may have had record numbers of businesses cropping up, but these have been tiny and completely ineffective in warding of the larger concerns in Europe and the East.

If we want to revive the British economy then we need to create the big beasts of business. Let's pool our resoures so that entrepreneurs can make a healthy profit and people can have access to steady jobs with built in pathways to develop on job re-training etc.

[Geoff Buckley]

Remember the chinese worker gets a lot lot less pay than the average British worker Its called sweated labour! and we cannot compete at that level its not about skill it about how much !

[Cleethorpes Rock]

"Muscle Jobs go where muscle's cheap, and that's not here. To get on now, we've got to use a new muscle- the one between our ears"- Gov. Jack Stanton, Primary Colors (!!)

There are loads of opportunities to be had in future. We just need to be honest with people (nearly to the stage of massochism and economic self-flagellation) before giving people a sense of optimism for the future under a Tory government.

It's a classic sales technique called the "emotional rollercoaster" and we can employ it here to a) make people understand the severity of the situation, and b) to give them a positive reason to buy our product (ie, vote for us). We're doing well at part a, but we're not hearing very much on part b.

[Serf]

I have got a little bored of Tony's autarky beliefs, so I wasn't going to comment, but Tony please......

In a rich country like ours, manufacturing productivity ,is extremely high. One man can produce millions of pounds of products per year. In the service sector, far more people are needed to produce the same amount of value.

This means that the service sector is actually better at producing jobs.

Now don't get me wrong, I think we could do more to help the manufacturing sector, but when a man is drowning, why throw a life jacket, when you could just take your foot off his neck.

Manufacturing will always be more expensive here than China, but regulations from both Westminster and Brussels have made it a lot more so.

Big companies actually like regulations because it keeps out the competition, and if it gets to much they can always relocate. So they actually support more regulations. New Labour being corporatist, loves big business and have therefore been a disaster for small businesses.

[Jack G]

Tony Makara certainly has a point- there are very few British industrial conglomerates left (in the mould of GEC, Metrovick, Hawker Siddeley, English Electric, Armstrong-Whitworth etc.) that can compete strongly on a global scale. The Japanese economy has its 'Keiretsus' (such as Mitsubishi) which operate in virtually every business sector available through a series of distinct but closely-related companies. Whether or not this idea is what is needed in Britain I can't say, but the UK's track record of government-led industrial mergers isn't good.

[Tony Makara]

It is not my intention to turn this thread into a debate on protectionism. So I'll quickly respond to Geoff Buckley by saying that we can eliminate the problem of sweatshop wages overnight by the imposition of a wage-equalization-tariff, so that British business can operate on an even playing field with the likes of China and India.

In answer to Sef, yes, the service sector may be able to create short-term jobs because SME's are so tiny. However the service sector is too dependent on credit and particularly cashflow to ever offer a stable framework for the national economy. Look how the service sector collapsed once liquidity dried up. This is because the whole culture of the service sector is based on short-termism, on the availablity of quick-credit and cashflow. Larger productive industries and conglomerates would have a bigger gameplan and not be so dependent on cashflow.

The BACS website recently reported how many SMEs are collapsing because they were operating on a very short term budget, once cashflow was interupted they were unable to even pay their workers. This is the problem with an economy that has a quater of its workforce employed by SMEs. Once liquidity was restricted we began to see these small concerns collapsing and unemployment rising.

[a-tracy]

TM "there could be across the board agreement on working practices, pricing and wages"

We have this Tony when we signed the Social Chapter - what more do you want? Don't you think the WTD, NMW, H&S Rules, Corporate Manslaughter legislation, road transport directive is more than enough, I could throw a library full of this stuff at you already!

The Pottery industry quit this country in the last decade even after conglomerating Wedgewood with Doulton and Waterfoot it didn't keep the production in the UK. Conglomerates can hide inefficiencies and generally suffer from lower productivity due to sickness and absence etc.

Tesco in my opinion only succeeds by hammering their smaller suppliers, if they weren't there and the farms were as large as Tescos who do you think would win then.

[Tony Makara]

A-Tracy, there certainly is a case for SMEs playing a role in local economy, however we must always be looking at the macroeconomy because that has such a huge impact on areas such as taxation and the cost of public services and welfare.

If we continue on our current path we will have six million people on benefits indefinitely and that means a huge chuck of government spending being tied up in paying people to be unproductive. However if we can create a job-creating infrastructure through manufacturing, mergers and the like, we can start taking huge numbers off benefits and free up money for the tax cuts that we all want to see.

We cannot sit back and just hope that somehow our economy will sort itself out, because it won't. Only government is in a position to introduce the new legislation needed to let industry loose. Only government can stop British business being undercut by sweatshop wages and only government has the size and scope to establish a strategy for business.

We have to keep thinking one generation ahead, we must set out a plan now to provide jobs for our people for the next thirty years or so.

[William Norton]

Tony Makara - on the assumption that you're not Andrew Lilico pulling a spoof to wind up the rest of us:

Government could play a big part in getting rid of ideological misgivings about providing competitiveness and consumer choice by encouraging mergers through the establishment of guilds.

Agreed. There'd be no competition to have any misgivings about if you cartelise the economy in this ham-fisted manner. Sod the consumer, eh?

As our economy currently stands there are too many SMEs and not enough businesses who big enough to compete against foreign counterparts.

This is factually untrue. When you get an idle moment, check the market capitalisations of the companies listed on the London Stock Exchange, then check their websites to see where they operate.

RichardJ, manufacturing seems to work for China. Just look how many Chinese goods are in our shops. Just think they could have been made-in-Britain by British workers. We can do it, the only thing lacking is the will and a straegic plan from government to support the sector. Its about having the right attitude.

Er, no. It's actually about having the right cost base for the market in which you operate. Try going into your nearest shop and offering to pay for any goods with the right attitude. They will prefer you to tender the right money.

RichardJ, you have to understand the difference between broad agreement on pricing and price-fixing.

The difference is about 15 years in jail. "Broad agreement" would probably only get you fined 10% of your turnover.

In answer to Sef, yes, the service sector may be able to create short-term jobs because SME's are so tiny.

The S in "SME" stands for "Small". You would therefore expect most, if not all, SMEs to be small.

However the service sector is too dependent on credit and particularly cashflow to ever offer a stable framework for the national economy. Look how the service sector collapsed once liquidity dried up. This is because the whole culture of the service sector is based on short-termism, on the availablity of quick-credit and cashflow. Larger productive industries and conglomerates would have a bigger gameplan and not be so dependent on cashflow.

Factually incorrect, again. Ultimately all businesses depend on cashflow and big businesses have large payrolls and, Tony, they want to be paid in cash. A productive conglomerate still needs to sell stuff, and it will have a higher raw material cost.

We cannot sit back and just hope that somehow our economy will sort itself out, because it won't. Only government is in a position to introduce the new legislation needed to let industry loose. Only government can stop British business being undercut by sweatshop wages and only government has the size and scope to establish a strategy for business.

A cartelised industry is not being let loose. It is being carved up. The ability to establish a strategy is not dependent upon size and scope. You have been typing away at a purported strategy for business all afternoon, but (unless I've missed something on the news) I don't think Chez Makara has a governmental size and scope. So, if what you've typed is true, you've just argued that you're talking nonsense.

We have to keep thinking one generation ahead, we must set out a plan now to provide jobs for our people for the next thirty years or so.

Why do all the people who advocate thinking 30 yrs ahead always then regurgitate policies which were tried and failed 30 yrs ago? Everything you've typed this afternoon has come straight out of George Brown's National Plan circa 1965.

[snegchui]

"Only government can stop British business being undercut by sweatshop wages and only government has the size and scope to establish a strategy for business"

Wicked, wicked Tony Makara. You will get another telling off for the protectionism again. Because the only way, realistically, that Govt can achieve this is to impose tariffs that make imports more expensive than locally -produced goods. The other way is to get rid of minimum wage and clip the dole completely and arm the riot squads (just not going to happen)

It would be far better if the Govt lifted a lot of the regulatory burden off SME, for whom it is a much bigger percentage of running costs than the big corporates.

Jobcentres try this LEP at present. I believe it to be a load of rubbish as it is implemented now. It is on the right track but needs to be a lot more adventurous and widespread. At present, I would wipe out the Jobcentres and their associated infrastructure because they are failing all parties, clients who don't get jobs, their own workforce who seem demoralised beyond repair (What are the sickness and turnover rates?) and definitely are not value to the taxpayer. Smaller regional centres with a local culture attuned to local conditions could be a lot more effective.

[another richard]

"Manufacturing relies a lot more on machines rather than men nowadays. That explains why our manufacturing output is at record levels despite the decline in manufacturing employment."

Manufacturing output peaked in 2000, it is now about 15% below that point and falling fast.

Energy and agricultural output have at best kept level since then so what has been the source of this countries supposed economic growth over the past decade? Debt fuelled consumer and government spending, the illusion of rising house prices and the City selling financial derivatives in a continuous circle.

While some service sectors can create wealth for this country - traditional financial activities, tourism, teaching foreign students - most do not. We have become the only major country which is a nett importer of food, a nett importer of energy and a nett importer of manufactured goods and that is why we are in this disasterous situation.

[another richard]

'Economies that are more dependent on manufacturing than ours, such as Germany and Japan, are faring even worse.

Service sector output in the UK has actually held up comparitively well.

Posted by: Sean Fear | March 19, 2009 at 12:19'

Sean, I'm surprised that such as astute commenter as yourself can make such a remarkably complacent comment.

The IMF only yesturday said we would have a longer and deeper recession than elsewhere. With out out of control debt, public and private, there will be no quick recovery either. We have also seen:

Unemployment rising by the fastest rate ever (and predicted to get much worse)

Industrial output falling at the fastest rate ever (and predicted to get much worse)

Government debt rising at the fastest rate ever (and predicted to get much worse)

House prices falling at the fastest rate ever (and predicted to get much worse)

Record trade deficits

Inflation repeatedly above target but with private sector pay falling for the first time ever

The only reason service sector has so far held up is that it is being funded by debt. Some people are unable to stop spending, all they do is east, sleep, s**t and shop, when they run out of money so will the service sector.

[Tony Makara]

William Norton and Snegchui, what is your blueprint for economic revival. Do you advocate more of the same with millions on benefit, trade deficits and 3/4 of our economy tied up in a low-wage/part-time service sector structure, meaning wages have to be topped up with tax-credits, rent-rebates and the like?

Unless we create industries that can pay for better wages out of manufacturing and productivity we will continue to see people mired in debt as they use credit and state top-ups to achieve a basic standard of living.

The choice is stark and clear. More of the same or change.

A radical change to a top-heavy service economy that has run out of credit and has run out of steam.

Britain must become a nation of producers once again.

[William Norton]

Tony Makara:William Norton and Snegchui, what is your blueprint for economic revival.

My apologies. You may not have noticed, but I have just published a 140 page report explaining what I would do, called Paying for the Credit Crunch. If you follow the link in the third paragraph of the article you can even download the report.

[snegchui]

The better chances of ensuring durable economic revival are enabled when you operate in a climate of honesty and transparency.
The Service Economy has served the UK well. Its current disgrace is based on the fact that it operated without honesty (due diligence and effective corporate Governance) for a number of years and a lack of transparency in the the regulatory infrastructure seems to have wandered off the planet. There would have been less growth, but what there was would have lasted better and the dislocation we are now suffering and will continue to suffer for at least a year would be milder. For the regulatory, the UK Govt are to blame and they can shout "international Cionditions" until the cows come home, I am not listening. Due diligence and corporate Governance is down primarily to the institutions, but should have been caught by the regulatory, those boards knew they could get away with it and took full advantage.
A Govt that understands the City and how it works and how to keep its exuberant energy productive for all is a must. This Govt understands little except to flatter and take advantage of cruises and awaydays.
In manufacturing, I am surprised by the link to the Times made elsewhere (http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article5897706.ece) but I respect the Times as a good source of information and I think it scuppers the arguments you make. But on what can be done to make the manufacturing/industrial sector operate in an environment that is more job-friendly, I would go down the route of less business taxes, less corporation tax, streamlining the bureaucracy of business ("More for Less" theme.) We are not going to produce at Chinese or Indian unit costs because those countries are externalising pollution costs and HSE costs into the population. That is another issue, and I would say that anybody here who says we should start doing the same ie let workers bear the cost of industrial injuries (no compensation for poor management HSE practices), I would say you are on a hiding to nothing. However I would also say the miners have a major brief against the lawyers who seem to have taken most of that compensation pot, again with connivance of a wayward Labour Govt with the attention span of a two-year old in 1998.
Going down the road of cartels and protectionism is not the way to go. Once Govt digs into business, decision-making slows and good decisions can become bad decisions because enacted too slowly. Govt role should be limited to ensuring businesses act in a legal manner within a clearly understood framework and pay the required taxes, again in a simple clear framework. Avoidance, complexity and multiple lawsuits to sort out who can infer what not welcome.
If you cartelise businesses, I would alos moot that the more efficient will simply locate elsewhere.

[Jack Stone]

Personally I think its offensive that so many people on this thread seem to be enjoying the rise in unemployment. Typical uncaring tories as usual.

[a-tracy]

"Unless we create industries..." Who is "we" Tony? Do you have individuals in mind? What is the first industry you want them to create from scratch?

In a report on the BACS website ‘Late payment to SME’s leap 40%’to £26 billion’, a quote from that BACS report read "Late payment and bad debt are the scourge of business owners. Often, they are major factors behind businesses being forced to close. The amount of money owed to small firms has soared over the past year as big businesses seek to create credit lines for themselves by squeezing their suppliers. In addition, despite the Government's pledge to pay its suppliers within 10 days, public organisations continue to be among the worst culprits Phil McCabe, spokesman for the Forum of Private Businesses (FPB).”

[another richard]

Getting panicky Draperbot?

As dozens of the people I worked with have lost their jobs in the last year because of Labour incompetance I find your comment offensive.

However, I will concede I will take great pleasure in watching 200 Labour MPs become unemployed next year.

[snegchui]

The Jack Stone School of Local Politics

http://www.youtube.com/watch?v=jrBaV5MvX_4

How to derail the discussion

[RichardJ]

"Personally I think its offensive that so many people on this thread seem to be enjoying the rise in unemployment. Typical uncaring tories as usual."

I think it's offensive that you exist.

[Tony Makara]

A-Tracy, you quotation from BACS findings just proves my point that SME's, who represent 25% of the workforce, are literally operating hand-to-mouth and are not big enough to cope with shortfalls in cashflow as and when they occur.

This is why we need businesses to be bigger and for government to encourage trade-guilds that can bring SMEs together to provide for areas of mutual co-operation.

Believe me when I say that I'm no enemy of SMEs, but I feel that the SME culture makes our economy fragile and unable to cope with any lapses in liquidity.

[Jake]

An easy way of making inroads into unemployment is to do a bit of enlightened thinking as to what "Free Trade" means. Most countries, ie virtually all apart from us, interpret free trade as something you pay lip service to when it is in your interests while very carefully making sure your own manufacturing and trade (and therefore employment)base is secure.
This is not rocket science, it is common sense.
Its pretty basic.

It is so obvious that another explanation must be sought for the truly moronic adherence to the surrenderist free trade mantra ie free trade only by us and everyone else not really or not at all.
Could it be a deep classist revulsion by the metropolitan city types who even now pine for the safety zone of city paper shuffling and house-price talk ?

This party is never going to make inroads into the great mass of voters who will never vote Tory until until it starts to get to grips with why it is so alien from them and continually seems to talk past them.

[snegchui]

Tony Makara:
Please really take note of A-Tracy's comment:
"The amount of money owed to small firms has soared over the past year as big businesses seek to create credit lines for themselves by squeezing their suppliers. In addition, despite the Government's pledge to pay its suppliers within 10 days, public organisations continue to be among the worst "
Govt can do its bit to end the hand-to-mouth cashflow for SMEs but isn't.
Does the Govt have a vested interest in Factors?

[Sally Roberts]

snegchui @ 18:04 - that's brilliant! Sound effects probably supplied by Jack Stone.

[Tony Makara]

Snegchui, nontheless, such difficulties show the fragile nature of SME's. Now imagine in these same SME's belonged to local trading-guilds and actually had some weight to throw about. While SME's remain isolated they remain ineffective and are an actual danger to themselves because they carry no clout.

[William Norton]

Jack Stone: Personally I think its offensive that so many people on this thread seem to be enjoying the rise in unemployment. Typical uncaring tories as usual.

As one of the unemployed myself, I'm not enjoying it at all.

[a-tracy]

SME's are not isolated we are being marginalised by a short sighted Labour government, however, the FSB, the FPB and the Chambers of Commerce do throw their weight around to give us more clout and a bigger voice.

The IOD have many SME Director members and I'm sure they'd be pleased to read you think we carry no clout.

[snegchui]

I see, so the Govt won't pay its bills on time, so businesses have to set up plea-bargaining bodies, adding to their costs, to try and compel prompt Govt payment. The Govt will identify straw-dissidents and bribe them over and still not pay its bills on time and get the guild leaders to explain to the membership why the membership don't see the big picture. Or that's how this Govt has worked.
Look at Trades Unions in the USSR and see what path you will lead us down.

[Freddy]

Re manufacturing. Do you know we don't even build a lot of the narrowboats that travel on our canals now?

The steel for the boats has been imported for a long time, and a lot of the complex electrics come from the Netherlands.

[Tony Makara]

Snegchui, you have a lively imagination. I don't think you can compare the situation to that of a command economy. I fully support private enterprise and recognise profit as a dynamo. The more money entrepreneurs are allowed to make the more their businesses can grow and the more jobs they can provide. Guilds to bring SMEs together are a way to help small businesses find ways of mutually supporting each other.

Freddy, you make an interesting point. Few people realise the extent to which we have become import-dependent, and have become industrially impotent. There is no reason why we shouldn't be making our own boats, creating jobs in doing so.

[RichardJ]

"I don't think you can compare the situation to that of a command economy. I fully support private enterprise and recognise profit as a dynamo."

Your talk of guildssounds at best like romantic distributism and at worst like Mosleyite corporatism.

[Freddy]

@Tony Makara

Daventry District is at the heart of the inland boating industry. About 29,000 boats registered with British Waterways. Lot of hire boats. Lots of foreign hire boaters from US, Sweden, Denmark, Norway, New Zealand, and other countries - a foreign currency earner.

Quite a few marinas and boat builders. New boats range from £50,000 to over £100,000. Employs quite a lot of people too - welding the imported steel to make the boats, building the wooden interiors, fitting the Swedish or Japanese engines, and fitting the complex electronics eg;- generators, inverters, battery management systems, lighting, fridges, satellite tv systems et al. Then of course there is maintenance repairs, equipment, books, diesel too.

One problem - the usual one - a Labour government!

Because they introduced a new system to reform farm payments and their computer system messed it up, the EU landed them with a mega fine. They deducted the mega fine from the government funding allocated to British Waterways who run the canals and some navigable rivers and now BW are short of funds. Mind you BW aren't much good eg:- the square wooden bollard scandal - most boaties haven't much time for them. Hope Cameron reorganises them.

[Tony Makara]

RichardJ, a corporate system would fit Britain's needs because it would bring real experts rather than ideologues into the economic process. Sir Oswald, who, don't forget, was knighted, was a patriot and was right to support corporatism although he certainly didn't invent the concept.

Corporatism, in its various forms has had a long history. The current ministerial system makes political and economic life stagnant, as it is anchored in the old dogmas of left and right.

We need a political system in Britain that rolls back the political state and allows legislators to legislate but nothing more. The direction of economic life should be determined by its key players from captains of industry to workers represenatives, by those with expertise in the field. Then we can move away from the petty party politics that has torn our country apart for so long.

Freddy, thank you for your informative post. I too hope that a Conservative government will recognize the value of our waterways. Back in 2006 I advocated in the webcameron forums that we should look to renovate disused canals and locks, many of which have become eyesores and even deathtraps.

Our nation has a great tradition as far as waterways are concerned, they represent a genuine piece of British heritage and their usage should be properly supported by government. If you have any useful links I should like to learn more on this subject.

[Freddy]

@Tony Makara

Sorry haven't got any links because I've only been on line for a very short time.

The information is readily available, however, because it is all, including the square wooden bollard scandal, in three magazine titles you can easily get hold of.

I reccomend "Canal Boat" and "Waterways World."

[snegchui]

"We need a political system in Britain that rolls back the political state and allows legislators to legislate but nothing more. etc "
Yes I have a very lively imagination, and more than enough to know the dead hand when I see it. Are you for real?
Dear God, I can imagine you and Arthur Scargill saying " Not too many differences between us, heh?"
Tim Montgomerie, I say to you when you said to me "no need to be nasty" . I say to you "Robust and nasty are different things".
This exposition is not the Conservative Way.
Youse lot need to do of the waking up. Aaaaargh!!!!

[Tony Makara]

Snegchui, Arthur Scargill, like Margaret Thatcher, like Oswald Mosley, like George Bush like Lenin, like Malcolm X, like all social and political figures was right on some issues and wrong on others.

We musn't fall into the trap of closing our eyes to a particular issue because it was supported by a certain figure. As I've stated before on these forums history and political philosophy is a complicated business and its utter folly to but into any worldview, or for that matter reject successful aspects of certain systems. For example the Soviets made great progress in the fields of science and space technology. The Nazi's introduced great programmes of urban renovation literaly putting millions back to work. Presidents Kennedy and Johnson made great advances in promoting civil rights, even Saddam Hussain was succssful in eradicating illiteracy in his country.

The point I'm making is that because corporatatism has been supported by the likes of Mosley and Mussolini, it does not make it a no-go are. FDR also brilliantly applied aspects of corporatism as did Vargas in Brazil, the fact is that Italy, the United States and Brazil were all able to put huge numbers of people back to work by following corporatist style works programmes. We need to look at such examples from history and see where they can be applied to a 21st century economy.

Unemployment is a problem that destroys marriages, families, entire lifestyles. It has to be tackled. It can't be ignored.

[RichardJ]

"FDR also brilliantly applied aspects of corporatism"

Er, no he didn't. One example of that disaster was when a tailor was arrested for working longer hours than the "guild" allowed. The book "FDR's Folly" gives a good rundown of the New Deal disaster.

[Tony Makara]

RichardJ, your pessimism and habit of embracing any remote source that supports your free-market ideology is depressing.

For you my friend there is no hope, and there are no achievements, only a world of abstractions and statistics, which of course as we know allow events to be presented completely out of context.

The fact is FDR saved the West from economic meltdown and the prospect of political extremism because he had hope and because he didn't spend all his time thinking "What if?" but got on with the job of putting America back to work.

[snegchui]

Corporatism is state-managed gangsterism, usually greased by graft and bribes for contracts. Because in such system, more important is who you have knowledge of than ability to produce quality goods efficiently. More important becomes access to resources than selling of goods. In end it collapses after much brutality as people seek to stay in power by more bribes, more beatings, more arrests of competitors. It is a wicked philosophy.
China runs this way. What is working for them now is excess of cheap labour, to the extent they cannot fuel an internal market, though they are trying by large discounting of manufacturing output.

[RichardJ]

"RichardJ, your pessimism and habit of embracing any remote source that supports your free-market ideology is depressing."

FDR's Folly is hardly a remote source, nor are the other sources of my information regarding the New Deal. Indeed one such source (Meltdown by Thomas E Woods Jr) was/is in the top 20 US book rankings. They're certainly less remote than the works of Oswald Mosely and other advocates of crank economics. New Deal or Raw Deal by Burton Folsom is another recent work of scholarship on Roosevelt's cock-ups.

"For you my friend there is no hope, and there are no achievements, only a world of abstractions and statistics, which of course as we know allow events to be presented completely out of context."

What on earth are you on about? That I have no hope because I believe the New Deal, economic corporatism and other forms of economic crankery have a track record of failure? I happen to have a great deal of faith in people to get on with their lives and achieve their potential if they are left alone by the government rather than being forced into cartels, protected from foreign competition orvarious other statist interferences.

Believe it or not I used to have exactly the same views as you in relation to "radical" economics. I believed in protectionism, forms of corporatism, government generally guiding the economy in the "national interest" and even social credit and dsitributism. Yet it became increasingly obvious to me that such policies would only backfire and harm the economy.

"The fact is FDR saved the West from economic meltdown"

The US unemployment rate was still in double figures by 1940. Private investment was static or even declined. The idea that Roosevelt saved the American economy is laughable and even left-wing economists accept this (although they argue that Roosevelt wasn't Keynesian enough). It is only left-wing historians who cling to the Roosevelt myth. The British recovery was far more successful and didn't involve Roosevelt-esque Keynesianism.

[Tony Makara]

Snegchui, no-one can deny the successful way that China has aggressively cornered markets around the world. Of course its in our interests in the West to stop China, to move in on their market catchment areas, as well as developing our own internal market. However without a corporatist umbrella, without government working to bring smaller businesses together, we will never be big enough to do this.

The great danger for the coming generation is that the West not only won't be strong enough to corner markets around the globe, but also won't be strong enough to defend its interests, such as access to fuel and other natural reserves. China goes stronger every day, as does Russia and the two are increasing areas of strategic co-operation. Before long the West is going to be sidelined, unless we start to act now in restoring our industrial base and gaining access to global markets in manufacturing.

[snegchui]

Tony, When I see Chinese goods selling well in Japan, I will believe your assertion of cornering (mature) markets. The Ugandan clique around here say that white people were a pain in the arse but the Chinese live there to extract every last bit of you. There is growing anger amongst the educated not-in-government in Africa as a whole with Chinese methods of business.

[Tony Makara]

Snegchui, we ourselves were once a mature economy, but now our stores a chock-a-block with Chinese goods. China's economic colonization will provide the country with access to a rich reserve of natural resources and access to a compliant population for sweatshop labour. Creating more problems for Western business trying to compete against the backdrop of sweatshop wages.

RichardJ, how many of the books that you quote have you actually read? Or do you just google for a source that fits for stance and throw up a title mentioned? From your posts I'd hasard a guess that I'm probably 25 to 30 years older than you, so I have had the time to read many tomes on economics, including all three volumes of Das Kapital. So I'm aware that books on economics and politics can only give half the picture, and as I said earlier many out facts out of context because they know most readers have neither the time or inclination to chase up the facts.

As for your analysis of FDR, do you really think America would have recovered without the intervention of government? In the last six months we have just seen the state bailing out the fabled private sector! Something I was against in this instance. However I would support spending on infrastructure, works programmes and, most definitely a state bank for basic accounts.

The idea that the private sector can exist without the state is ridiculous. The fact that some people, including yourself, still believe this after recent events is incredible. I'd even be tempted to call it arrogance, were it not such a comical stance.

[Tony Makara]

Snegchui, I forgot to add that I refer to China's economic colonization and milking of African natural resources.

RichardJ, do you really regard Oswald Mosley as a crank, given his record as a parliamentarian and thinker? Whatever we think of people like Mosley, Hitler, Pol-Pot or even Thatcher or Brown, no-one can doubt their intellect. Its hard to debate when people get excited and refer to intelligent political figures as cranks or fools.

[snegchui]

Tony, the UK is a mature economy and I do not see our consumer stores awash with Chinese goods. Where do you shop? On industrial parts, the Chinese are competing well and yes Labour here will never allow businesses to compete at that price. The price of containers from China at the moment is zero + insurance.
But more important is that this crisis now is not an industrial-led crisis, it is a financial crisis led by fraud and poor Govt. We must address those problems and let our trades become compliant on those bases - rushing to tariffs and corporatism are not the way forward - this will inbuild inefficiency and waste.

[Tony Makara]

Snegchui, I suggest you look again. Particularly at finished product at the point of sale. Chinese goods dominate, be it from 40" TVs to tin openers. Having built many radios from scratch as a youngster, it galls me to see cheap-to-make three-transistor radios in flashy big plastic cases being sold of as 'quality' radios for 50-70 pounds. These, of course, are made in China.

[snegchui]

TVs: Samsung, LG, Toshiba , Sony . No Chinese brands there. Assembled in China, maybe some.
I think China's strength lies more in the industrial infrastructure of manufacturing, screws, nuts bolts, cheap clothing rather than quality finished products. Like the Japanese and the Koreans they will get there, but just not yet.
But the point is, is China a corporatist state (yes I think so), do I want to work in a such a state with its terms and conditions and the answer is no,. Is corruption widespread throughout China (Yes) Is Chinese manufacturing efficient: Varies but in the main it is a homogenous workforce that can be co-erced into working for very low wages that keeps prices down in China. Will this last? The Chinese don't think so and nor do I.