Although provisional, today’s statistics released by the ONS suggest that overall the UK economy remained flat in 2012: there was no growth. However, the statistics that point to a 0.3% contraction in the economy during the final quarter of 2012 are, when taking into account demographic factors, even more worrying, for the figures relate to aggregate GDP and not per capita GDP. Given the rapid population expansion that has taken place over the past decade and a half and continues to this day, per capita economic output is shrinking at an even faster rate. This conclusion would appear to be supported by statistics released earlier this week stating that unemployment is now at its lowest in 18 months and a new record has been reached for the number of people in work. Average earnings are said to have increased by 1.5% in the year to November 2012, but given that RPI throughout this period was running at more than double this rate, they purchasing power of average wages has been falling; our standard of living in these raw terms is declining.
Worryingly, the underlying state of the economy looks weak, with the genuine foundations of wealth creation – “the production industries” – contracting at a faster rate than the economy as a whole, dropping by 1.8% in the final quarter of 2012. This represents part of an ongoing trend illustrated in the graph below, which shows that production as a whole had declined by circa 5% since the beginning of 2011, with the largest drop being witnessed in mining and quarrying which fell by over 25% during the same period.
The latest figures for the UK’s trade deficit released in November also reveal a grim picture, with the deficit on goods and services estimated to have been £3.5 billion. Looking beneath this surface figure, the weakness of our manufacturing and productive sector is starkly revealed by a £9.2 billion monthly deficit on goods which was “partly offset by an estimated surplus of £5.7 billion on services.”
Clearly, the economic policy of the current Government is not working, and yet, the ‘solution’ offered by the Labour Party is no better, for it focuses upon maintaining consumption through increased borrowing without addressing the trade deficit and the over-reliance upon the service sector. A radical new industrial policy is required that provides greater backing for the development of cutting-edge technologies and the industries of the future, providing jobs both for those with high-level intellectual skills in science and engineering, as well as for those working in support roles in the supply chains required to nurture and sustain this domestic revival. However, such an approach is at best paid only lip service by the globalist parties of today: Conservative, Labour, Liberal Democrat and UKIP. A new non-globalist alternative is required to provide the support and impetus necessary to launch and sustain a long-term economic revival with a vision and programme that looks decades into the future, rather than simply to the next General Election.