Our over-reliance on imports is harming the recovery

It is new markets, not existing ones, that are key to securing long-term economic growth for the UK

For all the disagreement about how to fix the UK economy, there are a few truths about the roots of the present slump that most people accept. In the good years leading up to the crisis, Britain lived beyond its collective means, and built an economy that couldn’t last. Part of this excess was fuelled by cheap, irresponsible credit; part of it was built on the UK’s huge and long-standing trade gap. Since 1997, the UK has consistently imported far more than it exported, creating a serious imbalance that paved the way for the financial crash.

Our research, published today, provides new insights into how the UK economy became so unbalanced. Over the last 15 years, the UK has performed extremely poorly by not providing the products which consumers increasingly want to buy. Consumers appetites for certain products has proved insatiable; in 2009 we bought over eight times more consumer electronics and twice as much clothing as we did in 1997. The problem is that most of this growth was met through an increase in imports, and not domestic production.

Many observers see patterns such as these and assume they are driven by well-established economic arguments about international competitiveness, with the high cost of production in the UK preventing more manufacturing taking place here. Whilst this is undoubtedly true of some low cost products - clothing springs to mind - this line of reasoning often falls down, even for low-tech industries. Recent research showed that the UK now imports more than half of its bacon from the Netherlands and Denmark, where wages in meat processing are twice the level here. Even more concerning is our performance in high-tech sectors such as consumer electronics, where the high value of the goods produced tends to override cost concerns. The UK is an anomaly amongst other advanced economies in being extremely weak in these markets.

What is most worrying, however, is the sheer scale of this shift, and the fact that increases in our imports of consumer products have not been compensated by a large enough rise in exports. Take clothing, consumer electronics and vehicles. Together our poor trade performance in these product markets accounts for more than 40 per cent of our goods deficit. This suggests our difficulty in providing consumers with enough of the things they want to buy, even in just a few key markets, can and is acting as a large drag on the UK economy. We have some outstanding consumer facing businesses in the UK, such as Unilever and Dyson. The problem is we don’t have enough of them to reverse the persistent UK trade problem.

So what should the government be doing to put this right? Part of the response should be to try and increase exports of those things that we are good at, including business services like consultancy and architecture. But that will only take us so far - we also need a greater emphasis on trying to foster the emerging consumer markets of the future, and on making the UK a world leader in these areas. This isn’t just about inventing more technologies – it is about how we use them. The UK’s world-class science base is excellent at generating new ideas, but businesses need far more support to overcome the barriers they face in turning these technologies into high-growth markets.

Take 3D printing as an example. The ability to print personalised goods on demand has real potential for the UK economy in the future, but there are many state-controlled levers that need to be co-ordinated to make it actually work in real life. Without the right regulations to foster consumer and business confidence, without standards to make software and materials compatible with each other, without the necessary physical and electronic infrastructure, 3D printing will remain a niche market in the UK, and will probably take off in another country first. We need to get these things right, and quickly, if the UK wants to be a world-leader in 3D printing – and these principles will apply to many other emerging technologies over the next decade.

Policymakers already lay out and co-ordinate their long-term strategy for many established sectors. Just yesterday the Department for Business, Innovation and Skills published their strategic vision for UK aerospace, for instance. But we want to see this approach applied to those new and innovative markets that have the greatest potential for exports and domestic demand. We would argue that it is the new markets, not the existing ones, that are key to securing long-term economic growth for the UK.

A port in Hamburg. Britain must cut back on its import addiction, according to a new report from the Work Foundation. Photograph: Getty Images

Spencer Thompson is economic analyst at IPPR

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Theresa May’s stage-managed election campaign keeps the public at bay

Jeremy Corbyn’s approach may be chaotic, but at least it’s more authentic.

The worst part about running an election campaign for a politician? Having to meet the general public. Those ordinary folk can be a tricky lot, with their lack of regard for being on-message, and their pesky real-life concerns.

But it looks like Theresa May has decided to avoid this inconvenience altogether during this snap general election campaign, as it turns out her visit to Leeds last night was so stage-managed that she barely had to face the public.

Accusations have been whizzing around online that at a campaign event at the Shine building in Leeds, the Prime Minister spoke to a room full of guests invited by the party, rather than local people or people who work in the building’s office space.

The Telegraph’s Chris Hope tweeted a picture of the room in which May was addressing her audience yesterday evening a little before 7pm. He pointed out that, being in Leeds, she was in “Labour territory”:

But a few locals who spied this picture online claimed that the audience did not look like who you’d expect to see congregated at Shine – a grade II-listed Victorian school that has been renovated into a community project housing office space and meeting rooms.

“Ask why she didn’t meet any of the people at the business who work in that beautiful building. Everyone there was an invite-only Tory,” tweeted Rik Kendell, a Leeds-based developer and designer who says he works in the Shine building. “She didn’t arrive until we’d all left for the day. Everyone in the building past 6pm was invite-only . . . They seemed to seek out the most clinical corner for their PR photos. Such a beautiful building to work in.”

Other tweeters also found the snapshot jarring:

Shine’s founders have pointed out that they didn’t host or invite Theresa May – rather the party hired out the space for a private event: “All visitors pay for meeting space in Shine and we do not seek out, bid for, or otherwise host any political parties,” wrote managing director Dawn O'Keefe. The guestlist was not down to Shine, but to the Tory party.

The audience consisted of journalists and around 150 Tory activists, according to the Guardian. This was instead of employees from the 16 offices housed in the building. I have asked the Conservative Party for clarification of who was in the audience and whether it was invite-only and am awaiting its response.

Jeremy Corbyn accused May of “hiding from the public”, and local Labour MP Richard Burgon commented that, “like a medieval monarch, she simply briefly relocated her travelling court of admirers to town and then moved on without so much as a nod to the people she considers to be her lowly subjects”.

But it doesn’t look like the Tories’ painstaking stage-management is a fool-proof plan. Having uniform audiences of the party faithful on the campaign trail seems to be confusing the Prime Minister somewhat. During a visit to a (rather sparsely populated) factory in Clay Cross, Derbyshire, yesterday, she appeared to forget where exactly on the campaign trail she was:

The management of Corbyn’s campaign has also resulted in gaffes – but for opposite reasons. A slightly more chaotic approach has led to him facing the wrong way, with his back to the cameras.

Corbyn’s blunder is born out of his instinct to address the crowd rather than the cameras – May’s problem is the other way round. Both, however, seem far more comfortable talking to the party faithful, even if they are venturing out of safe seat territory.

Anoosh Chakelian is senior writer at the New Statesman.

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