EC Meeting Papers January 2018

Reviving the real economy.

Doug Nicholls argues that the real economy is reviving as the sleeping giant of politics is waking up.

The key economic indicators that trade unionists used to consider closely were: the balance of trade deficit, the value of the pound, manufacturing production output, research and development (R&D) investment and unemployment levels. Together these reflected the political health of the country to the extent that production was primary and that capital, until 1979 legally restricted in its movements, was being reinvested to regenerate the wealth creating base. As the country got further and further embroiled into the EU machine with its free movement of capital, privatisation and neoliberal economics, the shift from the real economy of industrial production to the virtual reality of financial speculation, also led to a shift away from discussing the most revealing economic indicators. It’s time to get back to them and a bit of objectivity. It is hardly surprising that a declaration of withdrawal from the EU in itself has begun to see the tide of the real economy again turning and some early hopeful signs of improvement being recorded. Nor is it surprising that good news for the real economy will be ignored by the pro EU Establishment. Unemployment figures (based on the International Labour Organisation (ILO) definition) and collected by the Office of National Statistics (ONS) are falling and are down to 4.3%. This represents of course misery for the 1.4 million workers and their families this effects and we know of the state of casual and zero hours employment and McJobs in the economy. One person unemployed for more than four weeks is an unacceptable tragedy, but the trend in Britain is to a reduction and figures are at their lowest for 42 years. In the EU, a low growth high unemployment zone always, there are officially, according to the EU data gatherers Eurostat, 18.1 million unemployed, that is double our figures as a percentage of the overall population at around 8%. Historically the EU figures have been higher and some statisticians say they are closer in reality to 26 million. Balance of trade figures expose the difference between what we export and what we import. EU membership quite consciously transformed Britain from a net exporter of goods, with a positive balance of trade, to a net importer. Britain remains a very significant partner for individual EU economies. 26 out of the 27 other EU countries exported a greater proportion of their goods to the UK than the UK exported to them in 2015. We have a very strong negotiating position in Brexit. Researchers used to compile lists of literally tens of thousands of items that Britain could no longer manufacture and imported instead. The transition from coal production to 100% coal importation was at the heart of the EU’s efforts to ensure Britain could not be politically independent. As we produced less we imported more with all sorts of consequences for green concerns, for jobs, quality and prices. Here are some of the positive signs that are occurring and which should be welcomed.