It seems that most people now believe that the economy needs rebalancing away from such a dependence on retail and services.

However, this is not going to happen overnight (it takes time to develop a product, find a market for it etc).

So in the meantime, to get the economy moving again, presumably people need to start spending again.

That means two things: improved consumer confidence and more disposable income (unless there is to be a return to/increase in cheap credit, which most people probably don't think would be a good idea either).

According to a tweet from @BBCFood on Monday, food prices have risen 12.6% above inflation in the last six years alone. We know that utility bills have risen way beyond the official inflation figures, while housing costs have hardly fallen. In November of 2012, the Office of National Statistics (ONS) reported that the average UK income for a full-time worker was £26,500. That was a rise of 1.4% in the year to April 2012.

However, inflation over that same period had been 3.5%. Indeed, the ONS went on to state that inflation had outstripped income rises for the past 12 years.

Taking all this on board, what is the way forward?

Consumer confidence will not be boosted by further casualisation of the workforce or more efforts to drive down wages further.

Productivity, recruitment and retention are not helped by such approaches either, as implementation of the living wage shows.

Low and lower incomes mean less disposable income, mean less spending in those (currently) crucial retail and service sectors.

We've seen that deregulation or light-touch regulation don't work – from finance to the food industry (horse meat).

So how do those who want further deregulation, casualisation and so forth actually believe it will benefit the economy?

I'm posting this in an effort to move on from some of the recent threads and provide an opportunity for those on the political right to explain how these things would work.

The underlying and overriding issue is competition from the Far East and other developing regions. Cheap credit was in my opinion a mechanism to try to mask the effects of that on the man in the street. It failed. Just as the next phase of it will fail. The bottom line is unless we innovate radically and shift into a new paradigm we will continue to feel the squeeze. China is investing a fortune in its research and innovation capability and with the work ethic of their people I would imagine that in as little as 10 - 15 years we will be caught up and overtaken even in those areas where we currently feel the country is "world class" and has a competitive advantage. If the wealth of people like the Chinese continues to grow phenomenally then our food prices will increase enormously and to an extent that will cause serious health problems here. The UK is particularly exposed in this respect as it imports so much of its food "cheaply." Someohow we've got to find a way of producing far more food at home and become self-sufficient. Sadly, I suspect the only way that will be achieved is via synthesis. An existence of eating lab grown food will take us more from our roots.

In summary, sadly, you ain't seen nuffink yet Mintball.

Wages/incomes have to rise for people to become wealthy.
If Chinese wages rise, their labour-cost-competitiveness will likely decrease.

Regarding food prices, China is massive, it'll be able to grow an awful lot of food.
For resources such as fuel and minerals, it's a different story ... China is buying immense quantities of minerals from Oz at the moment.
In fact, you could say that Chinese dosh is the source of Oz's good times at the moment.

You are also forgetting that China is a market for us right now and will be much more so in the future.
Just ask Rolls Royce, JCB, Mercedes etc etc ...


Anyway, back to the original question, casualisation and low pay ... how will it work (the race to the bottom as Miliband termed it) ?

Quite simple really, most of the world of business is still in the doldrums if not recession and as such the boot is definitely on the foot of the employer dangling the carrot of an employment contract but on their terms, and the reverse psychology of dangling the carrot of a P45 to existing employees while pointing at the pile of speculative cv's sitting on the HR managers desk.

Its all cyclical though and as the economy does pick up and employment rise then terms will have to be changed at the tipping point where even labourers can say "No thanks mate, the company down the road is guaranteeing 37 hours".

I don't believe the issue of zero hours contracts is a permanent thing, even to staff agencies who are ALWAYS looking for new workers and cutting each others throats to attract those workers to their books, you won't believe how competitive their world is and when they have to start guaranteeing hours again then it will simply happen.

The point I was making is that as the wealth of big countries in the developing world increases so it is likely that their food consumption will increase and become more cosmopolitan, reducing the amount avaiable for us to import cheaply. I still believe that will be the case. It has been the case here.

Food consumption doesn't increase much in line with wealth: only when you go from being very poor to medium poor when you get things like people used to be not be able to afford meat etc. As countries become more developed food consumption levels off, in fact as they become more developed population growth can slow and their own agricultural productivity improves so their capacity to feed themselves gets better. As peoples incomes rise they don't spend more and more on getting fatter, they start buying other goods and services.

Its not easy for us to import food cheaply from the developing world anyway because of the tariffs under the common agricultural policy, the european farming lobby have seen to that.

As larger developing countries move up the income scale it will start to help us with our exports. Most of the stuff the UK exports is higher value stuff that you need to be middle income or high income to afford: pharmaceuticals, surgical/optical equipment, precious metals/jewellery, aircraft related products, financial services, insurance, creative industries etc. Most of our main export markets are USA and Western Europe because they are in these income levels. As China, India, Turkey etc approach those levels there are more people that will be in the income range to be potential buyers of British exports.

sally cinnamon wrote:... Its not easy for us to import food cheaply from the developing world anyway because of the tariffs under the common agricultural policy, the european farming lobby have seen to that ... It doesn't stop us doing it, whatever the cost. Fine beans from Kenya, for instance, where it takes a staggering four litres of water to grow a single bean; asparagus from Peru, where the growing of it is drying local wells, while the fad for quinoa, which cannot be grown here, has meant soaring prices for a staple food in Bolivia. And although not food, perhaps one of the craziest of all – carnations in Kenya. A flower that needs vast amounts of water, being grown in Africa and then flown to markets elsewhere. Utterly bonkers. As Joanna Blythman illustrates in one of her books, growing for western markets does not increase wealth in places such as Africa. Our food policy and food security need serious looking at.

sally cinnamon wrote:... Its not easy for us to import food cheaply from the developing world anyway because of the tariffs under the common agricultural policy, the european farming lobby have seen to that ... It doesn't stop us doing it, whatever the cost. Fine beans from Kenya, for instance, where it takes a staggering four litres of water to grow a single bean; asparagus from Peru, where the growing of it is drying local wells, while the fad for quinoa, which cannot be grown here, has meant soaring prices for a staple food in Bolivia. And although not food, perhaps one of the craziest of all – carnations in Kenya. A flower that needs vast amounts of water, being grown in Africa and then flown to markets elsewhere. Utterly bonkers. As Joanna Blythman illustrates in one of her books, growing for western markets does not increase wealth in places such as Africa. Our food policy and food security need serious looking at.

So, if things will change in the course of time, why then do some claim that we need to casualise the workforce further and cut pay, terms and conditions (all the time, without considering how to reduce the cost of living).

And in the shorter term, how do they suggest people actually live? What sacrifices do they consider people should make – heat or food, for instance – and how do they propose to deal with the issues this would cause in terms of productivity etc?


As an aside: I started this thread with the express hope that some posters would take the opportunity to discuss why they damn certain things on a variety of threads.

It's interesting that none, so far, have bothered.

Dally, on the other hand, bothers to respond and contribute in a constructive manner that also facilitates further discussion and debate. Some people would do well to understand that that is what 'contribute' means.

Where are all our right-wingers?

Probably on their way home from Brighton.