Is the end nigh for the Euro? [vol. 3]
Discussion
DeejRC said:
You think the UK is critically weak on East-West routes…try France 
Utterly infuriating to go East-West there!
Fortunately both the UK and France have the same redeeming feature though - there is f
k all reason to go east in either country 
Why compare to s Utterly infuriating to go East-West there! Fortunately both the UK and France have the same redeeming feature though - there is f
k all reason to go east in either country t? Why not aspire to German road standards? Why accept such crap infrastructure? Especially when we’re paying so much (theoretically) for it.Loafer is right, UK is unique. No qualifier required.
Sorry, a little late to reply, but I think the figures are still worth getting into here, because there are a lot of myths floating around about the UK economy.
As for Labour and manufacturing:
https://www.independent.co.uk/news/business/news/m...
https://www.ft.com/content/f32a3392-df7a-11de-98ca...
Brown stated we no longer needed it - financial services would be the savior.Brown is irrelevant. I'm not arguing Brown good / others bad on manufacturing. I've consistently - over decades - argued that our manufacturing sector was a real problem. I've never bought the idea that FS would save us at all - not least because not far off 50% of FS is foreign-owned.
Size of economy is largely irrelevant to this discussion - it only really impacts on our ability to do things like build nuclear weapons. Size of economy *per capita* is a more useful measure, because most of the things we care about scale with population or some proxy for same. When coupled with a measure of cost of living, that provides an indicator of prosperity.
Our GDP per capita is only 85% of Germany's, 75% of the USA's, etc.
Our cost of living has been a problem for a while. Between 2010 and 2020, CPI (adjusted for constant taxes) rose nearly 6% faster in the UK than in Germany.
Manufacturing value add matters a great deal, especially when we import so much - raw materials, sub-assemblies, etc.
Our manufacturing value add per capita is only 44% that of Germany, 58% of the USA, etc. China is almost at the same level as us now. We're about 27 in the world, and falling.
When we add so little relative value per capita, that contributes to the stagnation of earnings. According to long-running EU datasets, between 2013 and 2019, average wages (single full time employee) in Germany rose:
- on a PPS basis, almost twice as fast as in the UK;
- on a real-terms basis, over four times as fast as in the UK.
In addition, don't forget the impact of foreign ownership. In 2018 (per ONS), 1.1% of businesses operating in the UK were foreign-owned, but they account for *13.4%* of total UK company assets.
All of the above has nothing to do with the cliff-edge of Brexit, nothing to do with Covid, etc. What it does do is highlight that all this "6th largest economy" or "9th largest manufacturer" is irrelevant - something I'd have hoped wouldn't need to be said on here but ho hum.
By comparison with proper manufacturing economies, we're not doing well. Our GDP / capita is low. Our manufacturing value add / capita is very low. Our inflation has been and continues to be high. Our wages have stagnated.
That's not to say that we can't improve, that we're doomed. But we need to be realistic about where we are and where we must go. But constantly hiding behind meaningless stats is *not* helping.
Digga said:
skwdenyer said:
- too little manufacturing
We are roughly 6th largest economy and 9th largest manufacturer. When you take into account manufacturing needs a.) space and b.) relatively low wages, we're doing pretty well.As for Labour and manufacturing:
https://www.independent.co.uk/news/business/news/m...
https://www.ft.com/content/f32a3392-df7a-11de-98ca...
Brown stated we no longer needed it - financial services would be the savior.
Size of economy is largely irrelevant to this discussion - it only really impacts on our ability to do things like build nuclear weapons. Size of economy *per capita* is a more useful measure, because most of the things we care about scale with population or some proxy for same. When coupled with a measure of cost of living, that provides an indicator of prosperity.
Our GDP per capita is only 85% of Germany's, 75% of the USA's, etc.
Our cost of living has been a problem for a while. Between 2010 and 2020, CPI (adjusted for constant taxes) rose nearly 6% faster in the UK than in Germany.
Manufacturing value add matters a great deal, especially when we import so much - raw materials, sub-assemblies, etc.
Our manufacturing value add per capita is only 44% that of Germany, 58% of the USA, etc. China is almost at the same level as us now. We're about 27 in the world, and falling.
When we add so little relative value per capita, that contributes to the stagnation of earnings. According to long-running EU datasets, between 2013 and 2019, average wages (single full time employee) in Germany rose:
- on a PPS basis, almost twice as fast as in the UK;
- on a real-terms basis, over four times as fast as in the UK.
In addition, don't forget the impact of foreign ownership. In 2018 (per ONS), 1.1% of businesses operating in the UK were foreign-owned, but they account for *13.4%* of total UK company assets.
All of the above has nothing to do with the cliff-edge of Brexit, nothing to do with Covid, etc. What it does do is highlight that all this "6th largest economy" or "9th largest manufacturer" is irrelevant - something I'd have hoped wouldn't need to be said on here but ho hum.
By comparison with proper manufacturing economies, we're not doing well. Our GDP / capita is low. Our manufacturing value add / capita is very low. Our inflation has been and continues to be high. Our wages have stagnated.
That's not to say that we can't improve, that we're doomed. But we need to be realistic about where we are and where we must go. But constantly hiding behind meaningless stats is *not* helping.
Digga said:
The cost of living and manufacture are driven, significantly, by outmoded planning laws which cause enormous land price inflation.
Overheads - both for private individuals and businesses alike - are hugely influential.
Compared to our peers, our problem isn't planning, it is over-population. Overly-focussing on "6th largest economy," coupled with unfunded pension & social care commitments, contributes to pressure to maintain the ponzi scheme of birth rates / inflation.Overheads - both for private individuals and businesses alike - are hugely influential.
Had we fixed this 40+ years ago (North Sea Oil anyone?) with proper funding, we wouldn't be here. But we are.
That said, let's unpack your assumptions. In 2020, in Germany, land for housing cost on average EUR 199 / sq m. In the UK? The range is £75 to £247 or about EUR 89-299, with an average somewhere between the two. Strangely enough, the land component seems similar.
How about farmland? In the UK, anywhere from £7.5k - £10k / acre. Germany? About EUR 25k / hectare = EUR 10k / acre. So perhaps 20% less than the UK.
What about industrial? Let's compare rents. Somewhere around £7.50 - £17.50 psf pa in the UK. What about Germany? EUR 55 - 90 psm pa = about £4.25 - £7 psf pa.
But then that's little surprise - the UK is 17% more densely-populated than Germany. England alone, of course, is far far more densely-populated.
So I think it's not really fair to say the land cost is the big problem here. Population density's a problem. Prosperity's a big problem. Value add is a major problem (less margin = less wages, less capacity to pay for land, etc).
Long-term, we need a smaller population, a smaller (overall) economy, but a much higher value-add.
Excellent, so your solution is non existent, unviable, unelectable and impossible short of culling.
This is why left wing intellectual philosophers should be stoned to death before they get the chance to bore anyone else to death after 4 hrs of Alex Baldwin level monologues. Because after wasting everyone’s time, their conclusion is inevitably utter drivel to anyone else simply trying to live their life.
In more important Euro news - my area of France is burning
This is why left wing intellectual philosophers should be stoned to death before they get the chance to bore anyone else to death after 4 hrs of Alex Baldwin level monologues. Because after wasting everyone’s time, their conclusion is inevitably utter drivel to anyone else simply trying to live their life.
In more important Euro news - my area of France is burning
DeejRC said:
Excellent, so your solution is non existent, unviable, unelectable and impossible short of culling.
This is why left wing intellectual philosophers should be stoned to death before they get the chance to bore anyone else to death after 4 hrs of Alex Baldwin level monologues. Because after wasting everyone’s time, their conclusion is inevitably utter drivel to anyone else simply trying to live their life.
In more important Euro news - my area of France is burning
Gironde?This is why left wing intellectual philosophers should be stoned to death before they get the chance to bore anyone else to death after 4 hrs of Alex Baldwin level monologues. Because after wasting everyone’s time, their conclusion is inevitably utter drivel to anyone else simply trying to live their life.
In more important Euro news - my area of France is burning
Love it down there.
A bit ruined now I guess?
DeejRC said:
Excellent, so your solution is non existent, unviable, unelectable and impossible short of culling.
This is why left wing intellectual philosophers should be stoned to death before they get the chance to bore anyone else to death after 4 hrs of Alex Baldwin level monologues. Because after wasting everyone’s time, their conclusion is inevitably utter drivel to anyone else simply trying to live their life.
In more important Euro news - my area of France is burning
The solution is 10 year work visas. The sooner we implement these, the better off we will be. This is why left wing intellectual philosophers should be stoned to death before they get the chance to bore anyone else to death after 4 hrs of Alex Baldwin level monologues. Because after wasting everyone’s time, their conclusion is inevitably utter drivel to anyone else simply trying to live their life.
In more important Euro news - my area of France is burning
You want to come to the UK, and you’re smart? Sure. Here’s a visa. You can work, pay tax, do whatever you want. But once the 10 years is up, you go home. Your family go home too. That’s the deal you’re signing up to. Loads of Brits work on that basis abroad, no reason why it would not work here.
DeejRC said:
Excellent, so your solution is non existent, unviable, unelectable and impossible short of culling.
Nonsense. We're not talking about magic-wand type solutions; we're talking about national strategies. It is clear we need:- a population strategy (what is the optimum level, and why?)
- a demographic strategy (how to cope with the ageing population)
- a manufacturing strategy (improve specifically value add, as well as volume)
- etc.
It is just as clear that we don't have those things. Net migration is still huge, for instance.
Just saying that we can't do these things immediately, so therefore we shouldn't, is plain nonsense. Are you saying you think we should no longer embrace the idea of long-term planning as a Government function, and instead Government should just be about short-term delivery between elections?
If you think about the figures I posted, it's reasonable to conclude the problem isn't planning or land availability (as was stated). Land prices aren't all that high here compared to Germany; but prosperity is lower, so they are higher as a proportion of wages and overall prosperity. Yes, you can probably rent a warehouse a bit cheaper in Germany, but not to a degree that would make a huge difference to commercial operations.
It is very evident that the huge decline in our fortunes since 2008 (relative to other economies) is a major driver of our position now. Fixing that requires proper strategy, something you seem to be suggesting is impossible.
DeejRC said:
This is why left wing intellectual philosophers should be stoned to death before they get the chance to bore anyone else to death after 4 hrs of Alex Baldwin level monologues. Because after wasting everyone’s time, their conclusion is inevitably utter drivel to anyone else simply trying to live their life.
In more important Euro news - my area of France is burning
Well, if you're in France, does that mean you've already left the UK? In which case, with respect, being lectured on what the UK should do about its problems by people who aren't impacted by them is a bit rich, don't you think?In more important Euro news - my area of France is burning
More seriously, we need actual ideas for how to improve the UK, not just more of the same mend-and-make-do. Saying "oh my, that's a long-term goal, we can't possibly think about that" is precisely what got us into the mess we're in!
Oh and if you are in France, I think you'll find there's an awful lot more left wing ideology floating around there than here
Im currently in Oxford at a client site in an un air con office. My family unfortunately are currently driving down to France, much against both my advice and judgement!
Skw - what you know about manufacturing I can write on a pinhead, that much you have demonstrated over the last 18months in your posts. You certainly have no experience of owning or running a manufacturing or engineering company pre or post Brexit, in the UK or EU. Some of us do.
Your conclusion was “needing” population control. Good luck on that.
Skw - what you know about manufacturing I can write on a pinhead, that much you have demonstrated over the last 18months in your posts. You certainly have no experience of owning or running a manufacturing or engineering company pre or post Brexit, in the UK or EU. Some of us do.
Your conclusion was “needing” population control. Good luck on that.
DeejRC said:
Skw - what you know about manufacturing I can write on a pinhead, that much you have demonstrated over the last 18months in your posts. You certainly have no experience of owning or running a manufacturing or engineering company pre or post Brexit, in the UK or EU. Some of us do.
I'm not arguing against your specific experience. Those who make a go of it are great I last worked in large-scale engineering a long time ago, and have never claimed otherwise.I'm arguing that our national strategy is broken. At a national level, we don't manufacture enough, we don't add enough value, we don't invest enough, our education system is broken, and our productivity isn't good enough (in part because of the foregoing).
All of the manufacturing I'm responsible for right now is currently contracted outside the UK. We're in the process of locating sites to bring some of it in-house. Part of that discussion is, clearly, whether the UK or EU are better venues. And - returning to the topic - a great part of that discussion is around the long-term prospects for the Euro zone. Either that or take over one of our offshore suppliers.
We'll have to see how little I really do know
skwdenyer said:
DeejRC said:
Skw - what you know about manufacturing I can write on a pinhead, that much you have demonstrated over the last 18months in your posts. You certainly have no experience of owning or running a manufacturing or engineering company pre or post Brexit, in the UK or EU. Some of us do.
I'm not arguing against your specific experience. Those who make a go of it are great I last worked in large-scale engineering a long time ago, and have never claimed otherwise.I'm arguing that our national strategy is broken. At a national level, we don't manufacture enough, we don't add enough value, we don't invest enough, our education system is broken, and our productivity isn't good enough (in part because of the foregoing).
All of the manufacturing I'm responsible for right now is currently contracted outside the UK. We're in the process of locating sites to bring some of it in-house. Part of that discussion is, clearly, whether the UK or EU are better venues. And - returning to the topic - a great part of that discussion is around the long-term prospects for the Euro zone. Either that or take over one of our offshore suppliers.
We'll have to see how little I really do know
Digga said:
eriously, go follow the Jefferson uk Twitter account. It is inspiring and encouraging. A world away from the MSM and academia nonsense you are spouting.
I think we’re simply looking at this from different perspectives.I don’t need convincing that we gave some great engineering in the UK. Every time I look at a Rolls Royce aircraft engine, I can tell you where my contribution many years ago now fits
That twitter account I already follow. Today there’s a post about hypersonics and Reacton Engines. If you want a microcosm of how badly we support and promote and fund engineering, look no further than RE. Their history is a horrific indictment of our industrial environment.
But pockets of engineering excellence are very different from a buoyant manufacturing sector. We just don’t make enough. We don’t pay engineers enough. We don’t fund engineering enough. And across the economy we simply don’t have nearly enough manufacturing value-add.
And given that we’re the literal birthplace of much of the industrial revolution, that’s just plain poor.
Again Skw, I’d refrain from speaking of that which you know little. RE’s problems were nothing to do with the wider industry, support or pay. I know, or rather, knew, them very well. In fact I walked past their office on the way for my coffee and munch at breakie today. I was looking at some of their rigs for purchase when they went tits up. I’ve been working next to them for the last 5yrs, plenty of cross pollination of engineers and knowledge between the companies.
So I can speak with quite some experience that RE’s problems began entirely and kept being entirely about themselves.
Amusingly enough, do you want to know what one of the greatest benefits from Brexit in the engineering industry has been? The huge influx of experienced and talented British engineers back into the UK industry and the subsequent rise in ideas, quality and money.
There is quite a bit of interesting 4 wheeled metal on site at Culham for a place that is underpaid…
So I can speak with quite some experience that RE’s problems began entirely and kept being entirely about themselves.
Amusingly enough, do you want to know what one of the greatest benefits from Brexit in the engineering industry has been? The huge influx of experienced and talented British engineers back into the UK industry and the subsequent rise in ideas, quality and money.
There is quite a bit of interesting 4 wheeled metal on site at Culham for a place that is underpaid…
DeejRC said:
You think the UK is critically weak on East-West routes…try France Utterly infuriating to go East-West there!
Fortunately both the UK and France have the same redeeming feature though - there is fk all reason to go east in either country
Also just 1 motorway going up north. Motorway density is quite low in the UK overall as well. Utterly infuriating to go East-West there! Fortunately both the UK and France have the same redeeming feature though - there is f
k all reason to go east in either country Population control! Dream on. With climate change there will enormous pressure on the currently temperate parts of the world to take people. The current barriers to entry don't work very well so the situation will get worse. Now that is something worth planning for as in my view it's inevitable.
From telegraph today about ECB
"..... the ECB has kept rates at record lows, and printed money on an unprecedented scale. Indeed, its balance sheet, the best measure of the amount printed, has ballooned to more than €8 trillion, or 82pc of the zone’s GDP (compared with 36pc for the Federal Reserve and 39pc for the BofE)."
Where on earth has all that money gone, and what on earth is going to happen when they have to stop printing it?
"..... the ECB has kept rates at record lows, and printed money on an unprecedented scale. Indeed, its balance sheet, the best measure of the amount printed, has ballooned to more than €8 trillion, or 82pc of the zone’s GDP (compared with 36pc for the Federal Reserve and 39pc for the BofE)."
Where on earth has all that money gone, and what on earth is going to happen when they have to stop printing it?
Bandit said:
From telegraph today about ECB
"..... the ECB has kept rates at record lows, and printed money on an unprecedented scale. Indeed, its balance sheet, the best measure of the amount printed, has ballooned to more than €8 trillion, or 82pc of the zone’s GDP (compared with 36pc for the Federal Reserve and 39pc for the BofE)."
Where on earth has all that money gone, and what on earth is going to happen when they have to stop printing it?
I was told it had ended up in Swiss banks - don't know how true it is though..."..... the ECB has kept rates at record lows, and printed money on an unprecedented scale. Indeed, its balance sheet, the best measure of the amount printed, has ballooned to more than €8 trillion, or 82pc of the zone’s GDP (compared with 36pc for the Federal Reserve and 39pc for the BofE)."
Where on earth has all that money gone, and what on earth is going to happen when they have to stop printing it?
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