The Tipping Point

Good posts, Margaret.

I have to agree with a few of the points you have made MargaretinNorthant, ( although not all !). I think we should be pleased that we have moved on from the terrible grinding poverty that was the way of life for your grandparents' generation, but you are right that we should be doing the unthinkable, grasping the nettle and really looking into where the aid goes when the cash goes into overseas aid, especially some countries in Africa. Now, before anyone jumps on me for being rascist, I most certainly am not, I just despair about the money that goes to certain countries year after year, decade after decade with no discernible improvement in the life prospects of the majority of the citizens, other than some high profile, grasping thieving leaders. We can all see what is going on, I would be very happy to see my money, as a taxpayer, building a clinic, digging latrines and wells, building a school, but not funding arms and diamonds for corrupt tyrants. Sorry slightly off topic, but this budget is ring fenced and I dont think it is always spent wisely.

Margaret, The family members working in the pharmaceutical industry, the micro-biologist and the electronics engineer probably ARE involved in making something. All those industries are among the UK's biggest exports.

As for the deficit...Osborne has shrunk the deficit by increasing the debt, which is now about double what it was in 2010. It's an accountancy trick. Spending hasn't gone down, because the Treasury isn't collecting enough money to cover spending. This is partly because productivity is low and wages haven't increased in real terms.

Margaret, Banks don't make money on savings. They make money by lending the money you save to other people, in other words, from other people's debts.

Very well said Gill, you are quite right. It's what many of us think but no one likes to say.

The Bank of England is in the fortunate position of being able to create money to lend to people, who then pay interest to replace the money the Bank has 'created'. That's why the UK was never going to be in the same situation as Greece.

Just what I was trying to get at, daphne.
If the service industry amounts to 78% of GDP, it's not sustainable.
Growth in the financial services does not benefit the majority of the population.
When people save more, there is no growth, no work, no building, all the things needed to keep money circulating.
Obviously, as usual, I'm talking rubbish, just to save some of you saying it.

Why should no-one like to say?

Government figures for overseas aid are easily accessible and in the public domain

www.gov.uk/government/statistics/statistics-on-international-development-2014

In 2013, the UK spent £11.4bn on overseas aid. That sounds like a lot to normal people, but is 0.7% of GNI - less than could be saved by abolishing higher rate tax relief on pension contributions.

Just over 40% of it goes to organisations such as the UN and to international health organisations to help eradicate or treat diseases such as AIDs, TB, malaria and was used to help fight Ebola. Eradication of these diseases would help everybody in the world, not just the affected countries.

The top three recipients of the remaining 60% were Pakistan, Ethiopia and Bangladesh. Some of it went to help with relief after natural disasters and the rest went on projects such as educating girls, fighting FGM and generally trying to eradicate the desperate conditions where terrorism is likely to flourish. The British Council, which does much to promote British interests and reputation abroad, also receives overseas aid.

I'm not justifying in particular, although if it were cut, the UK's influence in the world would diminish, as every other developed country contributes to overseas aid. The above is from the government's figures.

dj, They're not all financial services, although it is the most profitable services sector and the UK does profit from it. Other services include education and research, which are much bigger than people think and also contribute to exports. Other services are health, retail and hospitality (which also contributes to exports).

It IS possible to base an economy on services - Singapore has done just that. However, as you say, most of the jobs involved are low paid. Financial services are one of the UK's biggest exports (if not the biggest) and could suffer hugely if the UK leaves the UK. The Iron Lady quite deliberately made the UK dependent on financial services and UKIP's Carswell has written a book advocating that we become even more dependent.

One disadvantage of being so reliant on financial services is that the country is very vulnerable to world financial crises. That's why the UK was hit so badly in 2008, but countries such as Australia and Canada remained almost untouched.

It's true that the UK needs to start making 'stuff' (which is why Nissan is so critical). Germany's success is based on manufacturing, despite high wages, and a shortage of natural resources. I fear there is no political will to support manufacturing, although Osborne's high viz jackets might suggest that he's interested. ;-(

Osborne's high viz jackets are just to make Osborne high viz, ready for when people have to replace Cameron. He'd wear high viz at a bank.

I know the service sector is not just banks. I should have put a line between the two.

I used to have two service businesses, which both suffered when there was a downturn in the economy.
On the other hand, my husband was an architect, and we moved around the country quite a lot because of the threat of redundancy in the building industry.
It's usually one of the first to feel any economic downturn.

In my post above, the bit I copied from Wikipedia, it says that the Uk is the 9th largest exporter and the 5th largest importer. So how come we have a deficit anyway? I don't understand that. More of what we make/our services go out of the country than comes in, so by my reckoning we should all be rolling in it. But we aren't. Why? Is it because in previous years under different governments we imported more than we exported and so now we are having to pay the debts we accrued? Were we gaily "putting it on the plastic" and has the day of reckoning come?
Thanks for being patient with an old lady, I just don,t understand today's world at all.

Margaret,
The value of what we import is greater than what we export.

What is known as 'the deficit' isn't the same as the balance of payments deficit anyway.

The 'deficit' is the difference between what the government spends and its income, mainly from taxation. The Conservatives have borrowed heavily to plug this gap. It's a bit like taking out a bank loan to pay your current account overdraft. That's why the national debt is massive and increasing.

The balance of payments deficit is the difference in value between imports and exports. This deficit is steadily increasing.

'In February 2016 the value of exports (EU and Non-EU) increased to £24.1 billion, and imports (EU and Non-EU) increased to £35.2 billion, compared with last month. Consequently the UK is a net importer this month, with imports exceeding exports by £11.1 billion'

www.uktradeinfo.com/Statistics/OverseasTradeStatistics/Pages/OTS.aspx

Economics is all smoke and mirrors. When there have been other recessions or periods of difficulty it has been investment and expansion that have got us out of it. In Newcastle the Tyne Bridge everyone recognises was part of a government funded work provision scheme in the 1920s. After the war when the country was bankrupt we established the NHS and had a huge expansion in house building. It's all about belief and will, the figures can be twisted to fit the philosophy.

Just off to bang my head against the wall at all this selective blindness and deafness that has already allowed this country to get where it is, with the media under such political control that we being blinded and deafened further every day. How many Gransnet readers are aware that the Land Registry is right now being sold off under our noses so that private interests (MPs) can now stuff their pockets with yet another gain that jeopardises the interests of ordinary people? I despair, Health and Education are just the visible tip of the iceberg, as a nation we are having everything we jointly own taken and pocketed by the rich.

trisher, You are absolutely right. The UK built its way out of recession in the 1930s too - errmm it was unfortunate that many of the houses disappeared a few years later! I have a book about my town in the mid nineteenth century and the local worthies did exactly the same. There was a downturn in prices for foodstuffs, which affected rural areas badly, so there were various schemes to build roads and walls to keep the poor from rioting.

SwimHome, I'm aware of it. I'm also aware of the relaxing of planning laws and changes to housing laws...and yes, I despair. But don't bang your head too loudly or you'll be smeared as 'far left' ;-(

Daphne, thanks for putting me right. I thought in bed last night I had got that wrong, but maths was never a strong point.
So, we import more than we export, is there a breakdown anywhere as to what we import? Are we still importing food stuffs while our farmers are going bankrupt and committing suicide by the dozens? If anyone watched Countryfile last week they saw there the state of British agriculture. Would anyone object to paying a little more for our food to keep our farming industry alive and well? It seems madness to be importing stuff we can produce perfectly well at home, even if it is not as dirt cheap. Time we started looking after our own.

SwimHome
I was aware of it and have signed the petition. I worked there for 8 years.

A lot of snipping going on today, together with valid economic and political arguments from all povs.

I just wanted to make a few points: with the loss of two of the three Grand Naratives, Religion and Communism, we are now left with Capitalism. So no wonder we have reached the status quo.

The Lib Dems did reign in some of the excesses of the Conservatives. Although I am quite sure that UK would have been worse off under an Ed Milleband government.

Re education I would never criticise anyone for their decisions on where to send their children to school as long as it was a choice that was for the benefit of each individual child. I am not in favour of any particular creed of education but have always believed in the tenet that parents should find the right school for each child be it private or state. I stuck to this through sometimes very difficult circumstances and made sure that my children went to where it was beneficial to them. so they experienced both private, special needs and state.

Never sacrifice your child on the altar of a principal so good for you DA and JCs wife.

I revere the medical profession and abhor the administrative system they are now stuck in. However the NHS has been underfunded since its inception, the British public have been seduced for far too long about the right to free health care. Yes I know that NI contributions and taxes are paid for this but it is not enough. Let's be realistic more money has to come from somewhere. OK tax the uber rich much more but get real about expectations.

Since coming under the French state health system I am amazed how brilliantly it works, and have been far, far better served and feel much safer under this system and am more than happy to pay something towards it and believe me I am on a very small income, but surely health should come before anything. We don't have holidays or posh iPhones etc, but we do pay something for health when necessary.

I make my own appointments to see any medical person, which means I am not sent some random date/time that is not adhered too or that I cannot attend. I am given prescriptions by my GP or surgeon for the next step such as radiology, cardiologist, blood tests, domicile nurses, physio etc etc. I make the appointments, turn up on time, never have to wait, am given results typed up by a PA not an expensive manager, and take these on to the next appointment. I keep my ex rays etc and it is my responsibility to ensure that I have managed my health care. The consequence is that all runs smoothly and efficiently, and the time scale is minimal and to mutual convenience of the medical practicioner and myself, and it's all cheaper than in the UK. No one gets turned away if they can't pay and the most I pay is 30%, but a lot of it is free.

Why can't the UK start to adopt such a system? The UK NHS is an adminstrative mess and has been for a very long time, no wonder medical practicioners are leaving in drones. It is a fact that France has the best health care system in Europe. I hope I never have to come back to UK for the health aspect alone, and if I am taken ill in UK get me on a plane home fast!

Margaret,

Info about UK imports/exports

www.uktradeinfo.com/Statistics/OverseasTradeStatistics/Pages/Commodities.aspx

The UK produces 53% of the food it produces and another 28% comes from the EU.

www.gov.uk/...data/.../foodpocketbook-2014report-23apr15.pdf

The UK can't produce some of the products consumers want, such as tropical fruits or strawberries in the middle of winter. Other countries can produce crops, such as grains, more economically. We also import when our own crops fail.

I'm not sure which crops were highlighted on Countryfile, but many consumers are on a tight enough budget and won't pay more for their food. British farmers are subsidised by the EU, which is why they want to remain.

annifrance,

The French system isn't cheaper than the NHS.

France spends 10.9% of GDP on healthcare (the equivalent of $4124 per capita).

The UK spends 8.5% of GDP (the equivalent of $3235 per capita).

www.oecd.org/health/health-systems/health-data.htm

Maybe if the NHS spent 25% more than it currently does, we'd see better outcomes.

By the way, anniefrench, how much do pensioners in France pay for healthcare?

Thought I would just post this from today's Telegraph

www.telegraph.co.uk/news/2016/04/19/britain-does-not-know-how-hundreds-of-millions-of-foreign-aid-is/?WT.mc_id=e_DM111289&WT.tsrc=email&etype=Edi_Pol_New_EU&utm_source=email&utm_medium=Edi_Pol_New_EU_2016_04_20&utm_campaign=DM111289

What have we just been saying? What they tell you they have spent foreign aid on and what actually happens to the money are two different things.

As for not producing things people want ie strawberries in the middle of winter.....we can.... and in Scotland no less.........but not at the price of cheap tasteless imports. These are scarcely neccessities of life.

And people won't pay more for their food........but will smoke, drink, have foreign holidays, the latest gadgets etc etc while one British farmer a week commits suicide.

Margaret,

I don't smoke, drink or have foreign holidays and I try not to buy products out of season, but I can't dictate how others spend their money. Yes, we can grow strawberries or tomatoes in greenhouses, but they cost more than crops grown in the open. They're pretty tasteless too. If people want to buy pineapples or bananas, we can't grow them in the UK in commercial quantities. Which crops do the farmers who are going out of business produce?.

I agree with you that foreign aid needs to be audited more carefully and have never claimed otherwise, but it's still a tiny percentage of GDP and reallocation won't make much difference to anything.

May I add to the list of smoking/drinking etc ? Farmers wives who run B&B's but buy supermarket eggs and bacon for breakfast because it's a lot cheaper than the eggs and bacon they could buy at the Farmers Market