On the edge

If the UK is to turn its economy around, the two key factors will be exports and productivity.

Is the UK back in recession? The OECD, a think-tank that governments love to have on their side, believes that the economic recovery has gone into reverse over the last six months. For once, most other economic forecasters disagree, and think the OECD is being far too gloomy; the consensus seems to lie with Mervyn King's "zig-zag" rather than the OECD's "double dip".

Does any of this matter? Hardly. There will be a media storm on 25 April if the GDP figures show that the economy has slipped back into recession, but the question is largely academic. For the 2.7 million Britons looking for a job, and the further 1.4 million unable to find full-time work, it will make very little difference whether the UK is technically back in recession or not.

The fact is that the UK economy is in a far more serious state than the odd double dip can do justice to. The economy has not grown for 18 months, while unemployment has increased by over 200,000 - that is far more serious than a temporary, technical recession. Flatlining is not what is supposed to happen after a recession; we were expecting faster-than-normal growth to make up some of what was lost after the financial crisis. At the Budget in 2010, the Office for Budget Responsibility forecast that the economy would grow by 2.3 per cent in 2011. It has been downgrading its forecasts ever since.

And there is little chance that the economy will ever regain the ground lost during the recession. According to the Office for Budget Responsibility, the recession will eventually leave an 11 per cent scar on the UK economy, almost five years' worth of growth that we will never get back. What we are dealing with is not just an economic slump - there is a serious problem with the way the UK economy works.

The most alarming symptom has been a dramatic slump in productivity. The value of what we produce per hour of work has fallen by 3.3 per cent since the end of 2007 - it should have increased by about 9 per cent. I don't expect many people feel they have become less productive or hard-working since the recession hit, but the value of what we collectively produce has fallen nonetheless. Of course, that productivity shock translates into a wage shock, which is why real incomes have fallen. (There is a silver lining, in that this drop in wages has stopped unemployment climbing even higher).

Now falling incomes mean that we have less money to spend, which means there is less opportunity for firms to make money in the UK, which is likely to mean further falls in incomes and fewer jobs. And that's not all we have to contend with - there is also the household debt burden left over from the financial crisis that we need to deal with, which further reduces spending. (There has been some debate in recent weeks over whether it is household debt or bank debt that causes the problems, but again this debate is academic - either way, consumer spending is squeezed).

As a result of this squeeze, the UK's domestic demand fell by 0.8 per cent during 2011. Had it not been for exports, the economy would have shrunk last year, and we'd have already had first-hand experience of a double dip recession. There are plenty of reasons why the UK economy remains in such a precarious position.

But there is some good news amidst the gloom: we are finally beginning to see exports grow significantly, several years after the devaluation of sterling in 2007. This export boom saved the economy from recession in 2011, and remains our best hope for a speedy recovery. It might also help to solve one of the core problems with the British economy; since 1997, we have consistently imported more than we export, and haven't been able to pay our way in the world.

If the UK is to turn its economy around, the two key factors will be exports and productivity. These two issues go to the heart of the underlying changes the economy needs; we need to increase the value of what we do, and sell more of it to the world. Overseas markets are the only place Britain can look to for growing demand at present, and exports are already helping to drag the economy out of the mire. But if any recovery is to be sustained, it must be accompanied by solid growth in productivity, on which the signs are much less encouraging. Reversing the UK's productivity shock will be a longer and more laborious project.

If they are to have any realistic plan for recovery, politicians of all stripes need to worry less about short-term fluctuations, and more about the key underlying factors that will make or break the economy over the next decade. There is little we can do to treat the after-symptoms of the financial crisis, but there is plenty of scope for re-making the UK economy.

Andrew Sissons is a researcher at the Big Innovation Centre at the Work Foundation

David Cameron at a GSK plant. Photo: Getty Images

Andrew Sissons is a researcher at the Big Innovation Centre based at the Work Foundation.

Felipe Araujo
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Manchester's Muslim community under siege: "We are part of the fabric of this nation"

As the investigation into last week's bombing continues, familiar media narratives about Islam conflict with the city's support for its Muslim population.

“You guys only come when something like this happens,” said one of the worshippers at Manchester's Victoria Park Mosque, visibly annoyed at the unusual commotion. Four days after the attack that killed 22 people, this congregation, along with many others around the city, is under a microscope.

During Friday prayers, some of the world’s media came looking for answers. On the eve of Ramadan, the dark shadow of terrorism looms large over most mosques in Manchester and beyond.

“People who do this kind of thing are no Muslims,” one man tells me.

It’s a routine that has become all too familiar to mosque goers in the immediate aftermath of a major terror attack. In spite of reassurances from authorities and the government, Muslims in this city of 600,000 feel under siege. 

“The media likes to portray us as an add-on, an addition to society,” Imam Irfan Christi tells me. “I would like to remind people that in World War I and World War II Muslims fought for this nation. We are part of the fabric of this great nation that we are.”

On Wednesday, soon after it was revealed the perpetrator of last Monday’s attack, Salman Ramadan Abedi, worshipped at the Manchester Islamic Centre in the affluent area of Didsbury, the centre was under police guard, with very few people allowed in. Outside, with the media was impatiently waiting, a young man was giving interviews to whoever was interested.

“Tell me, what is the difference between a British plane dropping bombs on a school in Syria and a young man going into a concert and blowing himself up,” he asked rhetorically. “Do you support terrorists, then?” one female reporter retorted. 

When mosque officials finally came out, they read from a written statement. No questions were allowed. 

“Some media reports have reported that the bomber worked at the Manchester Islamic Centre. This is not true,” said the director of the centre’s trustees, Mohammad el-Khayat. “We express concern that a very small section of the media are manufacturing stories.”

Annoyed by the lack of information and under pressure from pushy editors, eager for a sexy headline, the desperation on the reporters’ faces was visible. They wanted something, from anyone, who had  even if a flimsy connection to the local Muslim community or the mosque. 

Two of them turned to me. With curly hair and black skin, in their heads I was the perfect fit for what a Muslim was supposed to look like.

"Excuse me, mate, are you from the mosque, can I ask you a couple of questions,” they asked. “What about?,” I said. "Well, you are a Muslim, right?" I laughed. The reporter walked away.

At the Victoria Park Mosque on Friday, Imam Christi dedicated a large portion of his sermon condemning last Monday’s tragedy. But he was also forced to once again defend his religion and its followers, saying Islam is about peace and that nowhere in the Koran it says Muslims should pursue jihad.

“The Koran has come to cure people. It has come to guide people. It has come to give harmony in society,” he said. “And yet that same Koran is being described as blood thirsty? Yet that same Koran is being abused to justify terror and violence. Who de we take our Islam from?”

In spite of opening its doors to the world’s media, mosques in Britain’s major cities know they can do very little to change a narrative they believe discriminates against Muslims. They seem to feel that the very presence of reporters in these places every time a terror attack happens reveals an agenda.

Despite this, on the streets of Manchester it has proved difficult to find anyone who had a bad thing to say about Islam and the city’s Muslim community. Messages of unity were visible all over town. One taxi driver, a white working-class British man, warned me to not believe anything I read in the media.

“Half of my friends are British Muslims,” he said even before asked. “ These people that say Islam is about terrorism have no idea what they are talking about.”

Felipe Araujo is a freelance journalist based in London. He writes about race, culture and sports. He covered the Rio Olympics and Paralympics on the ground for the New Statesman. He tweets @felipethejourno.

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