Comments on: Tories stranded with no plan for growth, and no vision of Britain’s industrial future http://www.labourmatters.com/the-labour-party/tories-stranded-with-no-plan-for-growth-and-no-vision-of-britains-industrial-future/ Labour news direct from the newsmakers Tue, 31 Jan 2012 11:06:15 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Labour Matters http://www.labourmatters.com/the-labour-party/tories-stranded-with-no-plan-for-growth-and-no-vision-of-britains-industrial-future/#comment-522 Labour Matters Fri, 26 Mar 2010 19:24:18 +0000 http://www.labourmatters.com/?p=2917#comment-522 By your own figures there was growth until the recession. In fact, manufacturing output reached an all-time high in 2007, even adjusted for inflation. The UK is the world's 6th largest manufacturer, but we need to recognise that the recession has hit manufacturing hard. That is why the Government needs to be helping our industrial future and not sitting on the sidelines as it struggles to recover. By your own figures there was growth until the recession. In fact, manufacturing output reached an all-time high in 2007, even adjusted for inflation. The UK is the world’s 6th largest manufacturer, but we need to recognise that the recession has hit manufacturing hard. That is why the Government needs to be helping our industrial future and not sitting on the sidelines as it struggles to recover.

]]> By: HJ http://www.labourmatters.com/the-labour-party/tories-stranded-with-no-plan-for-growth-and-no-vision-of-britains-industrial-future/#comment-519 HJ Fri, 26 Mar 2010 17:28:27 +0000 http://www.labourmatters.com/?p=2917#comment-519 Well, Labour Matters, output of industries does tend to fall during recessions, by definition. It's hardly disingenuous to compare the entire period of the two governments. However, your figures are wrong and why do you compare with 1974 when the Tories were not in power from 1974 to 1979? If you want to compare with the Tories, you have to compare from 1979. If you look at the ONS web site (statistics.gov.uk) and look at the Index of Production (IoP) figures for Manufacturing (seasonally adjusted) CKYY IOP: D: Manufacturing: CVMSA Seasonally adjusted Constant 2005 prices 2005 = 100 You will see the following figures: 1974 - 87.1, 1979 - 84.5 (so output shrank under the last Labour government as well), 1997 - 97.9 The 1997 figure represents a growth of 15.8% since 1979 and 12.4% since your chosen comparison date of 1974. Not spectacular, but nevertheless worthwhile growth. The wider production figures (including energy, etc.) show a growth of over 20%. The corresponding figure for 2009 is 88.1, i.e. a drop of 10% since 1997. Again, the wider IoP figures give a slightly larger but not dissimilar drop of around 12%. However, what undermines your argument further is this: I think you'll accept that when there is a change of government, it takes time for differing priorities and policies to take effect. Especially when you're talking about investment, perhaps it might be around two to three years until new policies make any substantial difference. But in this case the contrast is even starker. Manufacturing output was already falling fast in 1979 when the Tories came to power and continued to fall until 1981/2, but thereafter it grew overall (albeit modestly if you calculate the average annual growth) , even if you include the Major (1991/2) recession. Similarly, manufacturing output was growing in 1997 when Labour came to power. But from 2001 (Output = 101.8 ) to 2007 (Output = 102.2) it stagnated. Since then, of course, it has dropped substantially in the recession. My point is that Labour's industrial policies cannot claim that they produced any growth in manufacturing even prior to the current recession. So how can we have any confidence that they will now? Well, Labour Matters, output of industries does tend to fall during recessions, by definition. It’s hardly disingenuous to compare the entire period of the two governments.

However, your figures are wrong and why do you compare with 1974 when the Tories were not in power from 1974 to 1979? If you want to compare with the Tories, you have to compare from 1979.

If you look at the ONS web site (statistics.gov.uk) and look at the Index of Production (IoP) figures for Manufacturing (seasonally adjusted)
CKYY IOP: D: Manufacturing: CVMSA
Seasonally adjusted
Constant 2005 prices
2005 = 100

You will see the following figures:
1974 – 87.1,
1979 – 84.5 (so output shrank under the last Labour government as well),
1997 – 97.9

The 1997 figure represents a growth of 15.8% since 1979 and 12.4% since your chosen comparison date of 1974. Not spectacular, but nevertheless worthwhile growth. The wider production figures (including energy, etc.) show a growth of over 20%.

The corresponding figure for 2009 is 88.1, i.e. a drop of 10% since 1997. Again, the wider IoP figures give a slightly larger but not dissimilar drop of around 12%.

However, what undermines your argument further is this: I think you’ll accept that when there is a change of government, it takes time for differing priorities and policies to take effect. Especially when you’re talking about investment, perhaps it might be around two to three years until new policies make any substantial difference. But in this case the contrast is even starker. Manufacturing output was already falling fast in 1979 when the Tories came to power and continued to fall until 1981/2, but thereafter it grew overall (albeit modestly if you calculate the average annual growth) , even if you include the Major (1991/2) recession.

Similarly, manufacturing output was growing in 1997 when Labour came to power. But from 2001 (Output = 101.8 ) to 2007 (Output = 102.2) it stagnated. Since then, of course, it has dropped substantially in the recession.

My point is that Labour’s industrial policies cannot claim that they produced any growth in manufacturing even prior to the current recession. So how can we have any confidence that they will now?

]]> By: Labour Matters http://www.labourmatters.com/the-labour-party/tories-stranded-with-no-plan-for-growth-and-no-vision-of-britains-industrial-future/#comment-518 Labour Matters Fri, 26 Mar 2010 16:07:26 +0000 http://www.labourmatters.com/?p=2917#comment-518 It is disingenuous to claim that industrial output grew under the last Tory government without mentioning the fact that it fell dramatically for two years previously during John Major's recession. In fact, while total output was 11% above its pre-recession peak by 1997, manufacturing output was just 3 1/4% above its previous peak and only 8% above the level reached in 1974. Whole economy investment was still 2 1/4% lower in 1997 than when Major's recession began. Similarly, Labour's industrial activism is the result of the urgent need to recover from the global recession, during which industrial output fell off a cliff. Doing nothing isn't a realistic path to recovery. It is disingenuous to claim that industrial output grew under the last Tory government without mentioning the fact that it fell dramatically for two years previously during John Major’s recession. In fact, while total output was 11% above its pre-recession peak by 1997, manufacturing output was just 3 1/4% above its previous peak and only 8% above the level reached in 1974. Whole economy investment was still 2 1/4% lower in 1997 than when Major’s recession began.

Similarly, Labour’s industrial activism is the result of the urgent need to recover from the global recession, during which industrial output fell off a cliff. Doing nothing isn’t a realistic path to recovery.

]]> By: HJ http://www.labourmatters.com/the-labour-party/tories-stranded-with-no-plan-for-growth-and-no-vision-of-britains-industrial-future/#comment-513 HJ Fri, 26 Mar 2010 11:25:23 +0000 http://www.labourmatters.com/?p=2917#comment-513 The problem with this argument is that Labour's "industrial activism agenda" hasn't worked over the last 13 years. According to the ONS, industrial output is now 12% lower than in 1997. It grew by over 20% under the last Conservative government. Perhaps it is better for governments to leave well alone and to concentrate on not increasing (and, indeed, on reducing) the costs faced by industries which have to compete internationally. Firms are rather better at knowing what they need to equip themselves for the future than are governments (few in government have much industrial experience), but are less able to do this if government takes their money and insists on doing it for them. The problem with this argument is that Labour’s “industrial activism agenda” hasn’t worked over the last 13 years.

According to the ONS, industrial output is now 12% lower than in 1997. It grew by over 20% under the last Conservative government.

Perhaps it is better for governments to leave well alone and to concentrate on not increasing (and, indeed, on reducing) the costs faced by industries which have to compete internationally. Firms are rather better at knowing what they need to equip themselves for the future than are governments (few in government have much industrial experience), but are less able to do this if government takes their money and insists on doing it for them.

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