Join the Socialist Party Join us today!

Printable version Printable version

Facebook   Twitter

Link to this page: https://secure.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.

Donate to the Socialist Party

Coronavirus crisis - Finance appeal

The coronavirus crisis has laid bare the class character of society in numerous ways. It is making clear to many that it is the working class that keeps society running, not the CEOs of major corporations.

The results of austerity have been graphically demonstrated as public services strain to cope with the crisis.

The government has now ripped up its 'austerity' mantra and turned to policies that not long ago were denounced as socialist. But after the corona crisis, it will try to make the working class pay for it, by trying to claw back what has been given.

  • The Socialist Party's material is more vital than ever, so we can continue to report from workers who are fighting for better health and safety measures, against layoffs, for adequate staffing levels, etc.
  • Our 'fighting coronavirus workers' charter', outlines a programme to combat the virus and protect workers' living conditions.
  • When the health crisis subsides, we must be ready for the stormy events ahead and the need to arm workers' movements with a socialist programme - one which puts the health and needs of humanity before the profits of a few.
Inevitably, during the crisis we have not been able to sell the Socialist and raise funds in the ways we normally would.
We therefore urgently appeal to all our viewers to donate to our special coronavirus appeal.

Please donate here.

All payments are made through a secure server.

My donation

 

Your message: 

 


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:

triangleTory Brexit divisions, Corbyn's opportunity

triangleAmber warning lights flash on British economy

triangleTories torn - bin them now

triangleRight wing attempts to use single market against Corbyn

Economy:

triangleWorkers and young people need planning for jobs, not handouts for bosses

triangleBristol North Socialist Party: What happens after a crisis 2 - The Planned Economy

triangleThem & us

triangleTwo-metre rule under 'review' - Another case of profit before safety

Manufacturing:

trianglePlastic waste ignored

triangleBosses concede to walkouts in Northern Ireland

triangleFord Bridgend workers vote to fight to save threatened plant

Labour:

triangle100 years since the foundation of the Communist Party of Great Britain

triangleTime to relaunch TUSC

Election:

triangleUCU: election victory for combative rank and file

News and socialist analysis

News and socialist analysis

22/7/20

China

Huawei: what's behind Johnson's u-turn?

22/7/20

Coronavirus

Fight for our livelihoods... Fight for our lives!

22/7/20

Music

Saving the music industry from pandemic and austerity

22/7/20

Luton

Luton Council sunk by airport investment: fight for funding, not speculation!

22/7/20

The Socialist

Getting the Socialist over the summer

22/7/20

Coronavirus

Fight for the NHS

22/7/20

NHS

Tories using pandemic to privatise NHS more

22/7/20

Them & Us

Them & Us

22/7/20

Steel

Nationalise Tata Steel to save jobs

22/7/20

Housing

Housing crisis: what now and after the pandemic?

15/7/20

Coronavirus

A socialist programme for schools

15/7/20

Young Socialists

Jobs, homes, services and a future for all!

15/7/20

Monarchy

Palace letters show the monarchy is a weapon for capitalism

15/7/20

Jobs

Workers and young people need planning for jobs, not handouts for bosses

15/7/20

Women

Sexist dismissal of women's health: NHS needs democratic control

triangleMore News and socialist analysis articles...


Join the Socialist Party
Subscribe to Socialist Party publications
Donate to the Socialist Party
Socialist Party Facebook page
Socialist Party on Twitter
Visit us on Youtube

LATEST POSTS

CONTACT US

Phone our national office on 020 8988 8777

Email: info@socialistparty.org.uk

Locate your nearest Socialist Party branch Text your name and postcode to 07761 818 206

Regional Socialist Party organisers:

Eastern: 079 8202 1969

East Mids: 077 3797 8057

London: 075 4018 9052

North East: 078 4114 4890

North West 079 5437 6096

South West: 077 5979 6478

Southern: 078 3368 1910

Wales: 079 3539 1947

West Mids: 024 7655 5620

Yorkshire: 077 0671 0041

ABOUT US

ARCHIVE

Alphabetical listing


August 2020

July 2020

June 2020

May 2020

April 2020

March 2020

February 2020

January 2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999