What stops us from becoming a net exporter?

[XmisterIS]

I apologise in advance for this being very P&L, but seeing as it's been inexplicably shut down, you'll have to put up with it here!

Anyway, I was listening to the radio the other night and there was an economist-type saying that in the UK we're a net importer and that we've ended up in the financial pickle that we're in because we've been borrowing money from net exporters like China and Germany so that we can buy their goods.

So we give them their own money back again with interest? Seem like a plan for a building up a large debt!

So I used all two of my braincells (I'm not particularly clued up on politics), and came up with what seems at first sight to be an obvious line of development, which would hopefully see us becoming a manufacturing powerhouse within only a few years. It goes thusly:

1) The govt gives tax incentives and cheap loans to manufacturing companies and start-ups. The govt also gets rid of a lot of stifling bureaucratic red tape around these things.

2) The govt gives incentives to the owners of brownfield sites and derelict areas in suitable locations, to encourage them to lease or sell their land to the manufacturing companies.

3) One thing I noticed when I got up this morning is that the UK is an island. We therefore have lots of big ports, so it seems natural to put the manufacturing base near the ports: raw materials in straight off the ships - turn the magic handle - finished goods out straight onto the ships for export. Simples! Also, all the big ports are well connected to the motorway and train network, so the infrastructure is there.

I'm guessing that if we did that, we would turn over a profit within 5-10 years (don't ask me where I got that figure from, I just invented it!).

Clearly, we don't do that, there's mass unemployment in the North and Wales, etc. So what is it that stops the Government from implementing that solution? Clearly there must be more to it than I've described, and a good reason for not doing it. I can't fathom it though! I am no politician ...

 

[Angelfishsolo]

I apologise in advance for this being very P&L, but seeing as it's been inexplicably shut down, you'll have to put up with it here!

Anyway, I was listening to the radio the other night and there was an economist-type saying that in the UK we're a net importer and that we've ended up in the financial pickle that we're in because we've been borrowing money from net exporters like China and Germany so that we can buy their goods.

So we give them their own money back again with interest? Seem like a plan for a building up a large debt!

So I used all two of my braincells (I'm not particularly clued up on politics), and came up with what seems at first sight to be an obvious line of development, which would hopefully see us becoming a manufacturing powerhouse within only a few years. It goes thusly:

1) The govt gives tax incentives and cheap loans to manufacturing companies and start-ups. The govt also gets rid of a lot of stifling bureaucratic red tape around these things.

2) The govt gives incentives to the owners of brownfield sites and derelict areas in suitable locations, to encourage them to lease or sell their land to the manufacturing companies.

3) One thing I noticed when I got up this morning is that the UK is an island. We therefore have lots of big ports, so it seems natural to put the manufacturing base near the ports: raw materials in straight off the ships - turn the magic handle - finished goods out straight onto the ships for export. Simples! Also, all the big ports are well connected to the motorway and train network, so the infrastructure is there.

I'm guessing that if we did that, we would turn over a profit within 5-10 years (don't ask me where I got that figure from, I just invented it!).

Clearly, we don't do that, there's mass unemployment in the North and Wales, etc. So what is it that stops the Government from implementing that solution? Clearly there must be more to it than I've described, and a good reason for not doing it. I can't fathom it though! I am no politician ...

I am only guessing but we are not net exporters because there is not a market for our goods. Very simplistic I know but Occam's Razor and all that.

 

[accountantpete]

My personal thoughts are that British entrepreneurs wised up years ago to the fact that very few manufacturing enterprises make it through to profitability and those that do have a short life span from to cheap competition springing up from the likes of China and the fast pace of development in everything these days.

Look at EMI - practically worthless now.

In short - there are easier ways of earning money!

 

[Angelfishsolo]

My personal thoughts are that British entrepreneurs wised up years ago to the fact that very few manufacturing enterprises make it through to profitability and those that do have a short life span due to cheap competition springing up from the likes of China.

In short - there are easier ways of earning money!

FTFY

 

[ASC1951]

1) The govt gives tax incentives and cheap loans to manufacturing companies and start-ups. The govt also gets rid of a lot of stifling bureaucratic red tape around these things.

Well there is your first problem. Governments create stifling bureaucracy, it's in their nature. Politicians periodically claim to 'sweep away red tape' but never do, and that is also in their nature.

Your second problem, Xmister, is as Angelfishsolo says: you can only export stuff if people want to buy it. Foreigners are only going to buy our stuff if we can make it cheaper or better than someone else. There are sectors where we can still do that, but large scale manufacturing isn't one of them. Most manufacturing costs come from raw materials and labour costs, and we are no longer competitive on either.

One traditional politicians' solution is protectionism. All that does is transfer money from poor consumers to rich capitalists and when financial reality does break through - as it eventually does - the shock to consumers is all the greater. Mass business failures, instead of more gradual and manageable change. Look at the US domestic motor industry, for instance.

 

[Yellow Fang]

There was that Evan Davis programme, Made in Britain, on BBC2 recently that went into it a bit. He reckoned it actually made sense to let developing countries like China do a lot of the manufacturing because it was relatively low value and they could do it cheaper. He reckons we still do high value stuff which pays more pretty well, like design and marketing. He still thinks we need to export more stuff, especially to emerging markets like China.

 

[Red Light]

There's not enough people wanting to buy nets if we did export them?

 

[the snail]

He reckons we still do high value stuff which pays more pretty well, like design and marketing.

which is fine until the Chinese work out how to do design and marketing. There are other factors, such as the Chinese currency being kept artificially low, and the fact that the uk has poor productivity, even compared to france despite having long working hours.

 

[ianrauk]

P&L has not been shut down. It's been renamed The Crank Arms.

 

[XmisterIS]

P&L has not been shut down. It's been renamed The Crank Arms.

Ah! So that's where all the vitriolic character assassination has gone!

I still reckon we could make "stuff" (including nets, Red Light) that people would want to buy. Look at Germany for example - they export loads of stuff and I don't believe they use next-to-slave labour like China does.

 

[Angelfishsolo]

Ah! So that's where all the vitriolic character assassination has gone!

I still reckon we could make "stuff" (including nets, Red Light) that people would want to buy. Look at Germany for example - they export loads of stuff and I don't believe they use next-to-slave labour like China does.

But German stuff is good quality - Compare VW with Rover

 

[Red Light]

I still reckon we could make "stuff" (including nets, Red Light) that people would want to buy. Look at Germany for example - they export loads of stuff and I don't believe they use next-to-slave labour like China does.

We can if we get some decent foreign management in to run it. We are exporting Nissan cars to Japan. Our much loved terminal basket case, Land Rover Jaguar, that has been losing money for decades, is suddenly making £1Bn pa profit selling high priced gas guzzlers at a time petrol prices are at an all time high now the Indians are running it.

 

[XmisterIS]

But German stuff is good quality - Compare VW with Rover

Yeah, but that's because German workers get up, do 20 press ups, salute the photograph of the president that hangs on the wall, get on a super-efficient train and arrive for work at 07:59 precisely, ready for the gates to open at 08:00 precisely and the day continues in a similar vein.

Compare that to the average British worker ...

 

[MacB]

Yeah, but that's because German workers get up, do 20 press ups, salute the photograph of the president that hangs on the wall, get on a super-efficient train and arrive for work at 07:59 precisely, ready for the gates to open at 08:00 precisely and the day continues in a similar vein.

Compare that to the average British worker ...

I actually reckoned I could have got more productivity from a 25 hour week from most people. 5 hours a day, one 15 minute break, no personal time, calls, etc and startup/shutdown in your own time. Thus getting a full 24 hours of actual work from them, they get the same money, have more leisure time, are keener and work harder. Long hours don't always mean productive hours.

 

[Angelfishsolo]

Yeah, but that's because German workers get up, do 20 press ups, salute the photograph of the president that hangs on the wall, get on a super-efficient train and arrive for work at 07:59 precisely, ready for the gates to open at 08:00 precisely and the day continues in a similar vein.

Compare that to the average British worker ...

So we are in agreement then