Will our behaviour change once it is over?

Before March 2020, the UK economy depended on our passion for spending, buying things and experiences. Could this change, and, if it does, what would be the impact?
Retail was suffering in any event, but will we have kicked our addiction? Zoe Wood asks someone good questions in her piece in the Guardian. 
There is then the evening economy. Can it possibly survive with social distancing? After all, what is the point of a young person going out if they can't be physically near to another? What is the point of spending money on fashionable clothes, if there is no one to see them?
I see it as a sort of money go round. We spend some of our money on essentials; the proportion with depend on income and dependents. The remainder, to the extent there is any, can be spent on things and experiences. Those who sell or provide these, then earn and so the money goes round again. It is an economy that consumes relatively little in the way of raw material; the thing that is bought is mainly added perceived value - so the fashion designer, the marketeer, the shop designer and fitter

The raw material may make up a small proportion of the item, but it is significant in two particular ways. How it is produced: so cotton, often seen as the good guy compared to artificial fibre, demands some 1800 gallons of water for just one pair of jeans, and in a world short of water this is unsustainable. The other part of production is labour, and there are endless accounts of workers being paid derisory wages and having appalling working conditions. 

Change may be happening. The leader in the Guardian of 8 May 2021 speaks of a move to enjoy second hand clothes. 

Britain's industrial revolution was built to a great extent on cotton; can second hand clothes be a part of a second revolution?

Festival of Britain

‘THE AUTOBIOGRAPHY OF A NATION is presented for the first time in this Festival of Britain and millions of the British people will be the authors of it, displaying through every means by which Man expresses his nature how we have honoured our stewardship and used our talents. Conceived among the untidied ruins of war and fashioned through days of harsh economy, this Festival is a challenge to the sloughs of the present and a shaft of confidence cast forth against the future.’

So began the introduction to the Festival brochure.

The first record of the idea of a Festival of Britain is to be found in 1943, at the point of the Second World War when victory, although challenging, at last seemed possible. The Festival was to mark the centenary of the Great Exhibition, and many had in mind a similar exhibition of the nation’s products. This made sense, for a good number of such exhibitions had followed that of 1851 and business liked them. 

The Festival, as its plans emerged under the directorship of journalist, Sir Gerald Barry, and chairmanship of Churchill’s right hand man, Lord Ismay, looked rather different. I quote from the first of three talks Sir Gerald gave to the Royal Society of Arts in 1952:

‘We were going to tell a story not industry by industry, still less firm by firm, but the consecutive story of the British people in the land they live in and by… each type of manufacture and each individual exhibit would occur in the setting appropriate to that part of the story in which it naturally fell e.g. steel knives and sinks in the home part of the story, steel machines in the industry part of the story, steel chassis in transport, and so on…each industrial exhibit will be chosen by the exhibition organisers themselves in consultation with manufacturers and trade associations.’ 

A stock list was compiled of some 20,000 items from 5,000 manufacturers, only half of which could be exhibited in the space available. Design was key, and was overseen by the still relatively new Council of Industrial Design (now the Design Council). “The exhibits ranged from locomotives to lipsticks and in value many thousands of pounds to a few pennies.”

I have traced the exhibits that I have so far found to the origins of the relevant manufacturer, in some cases back to the catalogue of the Great Exhibition of 1851. 

My great grandfather exhibited in 1851 and I begin my forthcoming book, How Britain Created the Manufacturing World, with a survey of the 1851 exhibition catalogue. 

How Britain Created the Manufacturing World

 I'm thrilled that Pen & Sword have confirmed their intention to publish my current work in progress, How Britain Created the Manufacturing World.

The peoples of the British Isles gave to the world the foundations on which modern manufacturing economies are built. This is quite an assertion, but history shows that, in the late eighteenth century, a remarkable combination of factors and circumstances combined to give birth to Britain as the first manufacturing nation. Further factors allowed it to remain top manufacturing dog well into the twentieth century, although other countries were busy playing catch up. Through two world wars and the surrounding years, British manufacturing remained strong, albeit whilst ceding the lead to the United States.

This book seeks to tell the remarkable story of British manufacturing, using the Great Exhibition of 1851 as a prism. Prince Albert and Sir Henry Cole had conceived an idea of bringing together exhibits from manufacturers across the world to show to its many millions of visitors the pre-eminence of the British. 1851 was not the start, but rather a pause for a bask in glory. 

I trace back from the exhibits in Hyde Park’s crystal palace to identify the factors that gave rise to this pre-eminence. I then follow developments up until the Festival of Britain exactly one century later. Steam power and communication by electric telegraph, both British inventions, predated the Exhibition. After it, came the sewing machine and bicycle, motor car and aeroplane, but also electrical power, radio and the chemical and pharmaceutical industries where Britain played a leading part. I conclude with the Festival of Britain in 1951 as an exhausted nation looked forward with hope  

The UK's Future Relationship with the EU

I was asked what I thought of the deal, so I looked at the material placed before Parliament. I'm not going to read it all, rather I will rely on  the commentary provided by others. If that is enough to make you stop reading, please follow this link to a subject I do know something about.

Good. Let me start, as I did five years ago, as I campaigned for us to Remain. It was about far more than economics, as I wrote in a number of blog pieces in the run up to the referendum, probably not least this: the EU has kept us safe. At the start it was the practical, bringing under common control iron and steel - the raw material of war. For me, though, the key was free movement through which people get to know people of other nations by living alongside them for work or study. This enriches the individual and the country. It is not without its downside. Residents of Boston in Lincolnshire will point to the disruptive behaviour of young eastern Europeans who had come to pick vegetables, jobs eschewed by local people. They forget the similar behaviour of longer term residents of the same age, and of course any sense of offering a welcome to those visiting. The Future Relationship ends free movement. The failure of the UK government to buy into the Erasmus programme robs our young people of a chance to join in this truly international study programme. It breaks my heart.

The Future Relationship, by and large, is free of tariff barriers, and this is welcome; however, the way common standards has been handled in nonsensical. Surely, anyone seeking to trade across borders would welcome having only to follow one set of standards. To have such a scheme across twenty eight countries must be positive; the more the merrier. So why set up a parallel system, which in practice will probably follow EU rules except that we will have no say in their drafting. 

I suspect services were too complex to bring within the Future Relationship Agreements, but again common standards must be worth having: a French audit compared to a British one; a German engineer alongside one from Scotland; a Spanish dentist or one from Wales; a Belgian optician or one from Northern Ireland? I do know that the devil is in the detail and country by country deals may emerge.

The big area, from which we have walked away, is the table of twenty-eight nations joining together to grapple with problems too big for single nations: global warming and migration, to name but two. Ideally the forum would be wider than just the EU, by twenty-eight is a good start. It is easy to point to the short comings of the EU, but why not make it stronger by being part of it?

The sovereignty argument has always been false. It is up to a nation which areas of law they choose to pool with other nations. Pooling makes sense in many areas, such as standards, but it is always up to the nation whether or not to pool. The Future Relationship has many instances where sovereignty is pooled, but in a more bureaucratic way than the existing EU treaties.

The immigration argument is probably where most tears will be shed. People I know who voted leave did so to 'keep out the Muslims' or 'to make Britain white again'. This is both ignorant and offensive, but played to by the Leave campaign. The Future Relationship makes minor provision for EU workers, but does nothing to stop the very much larger cohort of non-EU immigration. 

I have little doubt that the deal is better than no deal. I also believe that British people will work hard to make it work. But we have lost something very precious and I for one will continue to campaign to win it back.

Changes in employment as a key to the impact of Covid 19

The table below was taken from data provided by the Office for National Statistics and shows the number of jobs split between Manufacturing (including Construction) [Orange line] and Services [Blue line] between 1978 and 2019 taking each quarterly return.

Service sector jobs increased by 11 million and manufacturing reduced by 4.5 million.

Looking at services, the biggest increases were Health and social care 2.3 million, IT and Management Services 1.3 million and Accommodation, food and beverage 1.2 million and education 1 million.

In his book, Social History of Britain - British Society 1914-45, John Stevenson offers some broadly comparative statistics.

In 1914, textiles, coal, iron and steel, and shipbuilding employed almost a quarter of the total workforce. The comparative percentages for 1978 and 2019 are 14% and 2% respectively. The 'new' industries of motor vehicles, plastics and electrics rebuilt manufacturing jobs between the wars and, in the fifties and sixties, making up 11% of total jobs in 1978. They make up 3% in 2019.

If we go back further, David Cannadine in his book, Victorious Century, offers again broadly comparable figures. Agriculture came first with just under 2 million, followed by 1million in domestic service. Next came cotton textile workers at half a million; whilst this number was equally split between men and women, men predominated in agriculture and women in domestic service. Next in number came building craftsmen, labourers and then a third of a million milliners, dressmakers and seamstresses, and 300,000 wool workers. There were 200,000 coalminers. Instead of listing the remainder, Cannadine observes that there were more blacksmiths than iron workers and more working with horses on roads than with steam on railways. The total employed workforce in 1851 was 8.5 million (out of a total population of 27 million) compared to 31 million in 2019.

I look forward to getting access to hard copy of the Censuses to assess more clearly how employment patterns have changed.

The crash of the 1930s was in the context of an economy more reliant on manufacturing. Would a crash from Covid19 have the same impact given the massive swing towards services?

Six weeks ago the UK economy depended on our passion for spending, buying things and experiences. Could this change, and, if it does, what would be the impact?
Retail was suffering in any event, but will we have kicked our addiction? Zoe Wood asks someone good questions in her piece in the Guardian. 

How do we pay for it all?

The Chancellor has so far earmarked £200bn to bailout business and support individuals. This in in the context of total public expenditure approaching 900bn. There is a comparison with the bailout of the banking system in 2008. I think there is also one with the  two world wars where we paid whatever was needed, to quote the then Chancellor Lloyd George in WW1. We met the cost by increased taxation and borrowing. I explore this further in my blog piece on the comparisons with 1914-18 and 1939-45.
There is a difference. We are now paying people not to work, rather than work in the armed services or in the manufacture of war materiel. It is thus less wasteful. We are not consuming millions of tons of iron and steel in making tanks, ships and aircraft, or brass and explosives in makIng shells..

There remains the question of just how it will be paid for and Philip Inman offers some fascinating thoughts in The Observer. He dismisses yet more austerity and looks toward taxation. Raising taxes on individuals will reduce the amount they can spend and so further depress the economy. He adds this, which to me would seem to be key  :

“Unless, that is, the taxes are applied to households that save more than they spend, or target wealth. This is desirable, though unlikely, even from a free-thinking chancellor. Sunak is still a Tory, after all, and unlikely to sanction any attacks on core constituencies such as wealthy and older voters.”

Military historian and former editor of the Daily Telegraph, Max Hastings, said on Radio 4 that his (our) generation have been extraordinarily lucky. We should put our hands in our pockets rather than leaving it to younger and future generations.

It takes a virus for us to come clean on the shape of the economy

In 1914 government was worried that the war would lead to unemployment. In the event the whole nation came together to produce the munitions the army needed.

In 1939, all parts of British industry met the varied and massive demands of the armed forces. 

In 2020 the economy is largely based on services and, with the coming of Covid-19, consumers are deciding that they don’t need those services and the government is advising against social contact on which many services are based. We therefore face unemployment rather than people working at full tilt. This is totally  different. In parallel with the domestic service economy, there is an economy based on the consumption of largely imported products with deliberately short lives to encourage repeat purchasing.  Will it expose the 21st century economy as a con, or can we return to an economy where we each serve each other but without the manic need for never ending consumption?

The crisis is offering an insight into the actual shape of the economy. In this article in The Guardian, Richard Partington underlines the massive significance of the hospitality industry ‘Britain’s hospitality industry contributes more than £120bn a year to the economy and is worth more than the automotive, pharmaceuticals and aeronautics industries combined. More than 3.2 million people work in pubs, restaurants and other outlets, making it the third-largest sector for employment. A further 2.8 million work in the wider supply chain. In an economy no longer dependent on people making things, we are dependent upon them buying services. When they are told not to, the knock on is dreadful. I have done some analysis of the statistics