The Sunday Telegraph runs a story that illustrates the catastrophic collapse in Britain's non-public sector economy under Labour. The economic output of the private sector next fiscal year will be around £706.1bn – lower than the inflation-adjusted £708.9bn it amounted to in 1998/99, the first full fiscal year of the Blair government. The figures, calculated by the Policy Exchange think tank, show that in that same period the size of the public sector ballooned by some 63pc.
Keen readers will remember a story here on the same theme from 6 weeks ago. The figures are even worse if you work out private sector activity per capita.
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5 comments:
Cynicuseconomicus had an allied comment on 15th August "The Waiting Game", and I asked "The Great Question etc." on the 14th, also implying similar thoughts. Growth is not just chucking money at bright ideas or prestige projects, it is something else. This is what Keynes said, and not what the latter day "Keynesians" are doing.
Being ignorant of economics (not unlike most economists, if would seem), is there not a case for removing the effect of any one, or more, bubbles (dotcom, housing) from this, with the effect that private sector growth has never much, if at all, existed over the past 12 years ?
Andrew:
I think the growth up to 2003 is largely explained by dotcom and property bubbles together with the impact of PFI. The downward pressures has come from the effect of offshoring / outsourcing and a lack of investment in UK productive caacity since the mid 1990s.
Some businesses (e.g. pharma) have prospered but others (e.g. commercial aircraft) have not.
I think we're in danger of reducing the idea of 'growth' to arbitary numbers here.
Dotcom and property bubbles might have created a few winning and losing speculators but we've still got the internet and a lot more houses to show for it.
Both 'bubbles' did create real 'growth' from where I'm sitting.
"I think we're in danger of reducing the idea of 'growth' to arbitary numbers here."
Very true. One of my themes on this blog and constant criticism of the government is that it has always presented the economy as being healthy when here has been an increase in GDP, which includes government activity.
When government spending is stripped out it becomes apparent that the economy as measured by GDP figures is worse than sick.
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