A comment from a Continental: I studied economics in 🇬🇧 many many moons ago. I am constantly struck by the way 🇬🇧 politicians and commentators look for some sort of ‘magic sauce’ to create growth and solve everything. Why is there not more emphasis on the boring stuff like professional training for those who leave school early, a better transport/logistics system etc etc. Admittedly, there are no shortcuts, lots of money is needed, it is difficult and the benefits will not become apparent before the next election.
It should be obvious that the UK governments cares little about the people ( other than the royal descendants of William the Conqueror ), noting a simple situation - the need to import doctors and nurses instead of increasing education of locals Who are they trying to fool?
Spot on! This happens because politicians are not interested in solving problems. The problems are just too damn hard. What they do is fix the temporary optics of the problem while they get more power and money.
Your second para answers your question. Unfortunately, UK politicians are geared to the next election and most recently have been more intent on campaigning rather than governing. This means that they promise us stuff but have no plan on how to deliver it but at least they get to sit in Parliament for 5 years. However, it is also the electorate's fault as we want to hear easy answers rather than be told about tough choices, years to resolve and perhaps financial sacrifices along the way. Our collapsing care system is a perfect example where there are no easy short term fixes and it will be expensive to resolve; politicians don't want to tell us and we don't want to hear it.
I'm an economics student in Norway and I'm glad i found your videos. I like how you apply economic theory in a balanced way, and how you explain that there are no straight answers or quick fixes to economic policy and its all about finding a balance between different interests.
We keep hearing about further tax rises, yet as you pointed out, taxes are already the highest since the aftermath of WW2. In the UK we must be getting close to the point where further tax rises become counterproductive. Personally speaking, this year I’ve already been hit with a doubling of car insurance, £450 monthly gas/electric bill, higher council tax and a 5yr fixed mortgage coming up for renegotiation. There’s nothing left to give.
Doesn't help that loads of tax revenue is to service debt accrued through leasing back assets which used to be state-owned, so public service levels enjoyed in the past can't be purchased for the same levels of taxation anymore. The state needs to buy it all back.
And well unfortunately there are things left to give, standards of living can decrease, people can be forced to downsize their housing arrangements into house or flat shares, be forced to use public transport, sell their vehicles, drive less, eat less, engage with society less. All at enormous social & economic cost, but global factors aside, the governance the global West has over the past two decades has landed us all squarely here.
The used to say roads are a good indicator of wealth, and it's still relevant today, but the UK probably has the worst roads in Western Europe, and I know for fact, many Eastern European countries are better than the UK. I'd say the best indicator today are supermarkets. I've been to a supermarket in France, it's in La Rochelle, which is ranked around 38th city in France. I live in SW London, and this French supermarket is better than my local Sainsbury's Nine Elms, Waitrose in Clapham Junction, and Asda in Clapham Junction. All three combined can't touch this supermarket in France's 38th city. And here's the rub, how does the population of La Rochelle support such an amazing supermarket? I could talk about French roads, but they are so good, it's another world, and I'm not on about their motorways. The towns and villages show so much care it makes the UK look like a 3rd world country. The truth, Britain has become a very poor country. It will never improve, so long as the City Crime Cartels keeps bleeding the nation dry. They are like vampires.
Try to benchmark the UK with a Scandinavian country like Denmark - compare the state of public services, productivity, salaries, debt etc. The gap is very big.🙏
I'm happy to try and learn from any economy, from tiny Liechtenstein to giant China. But I suspect the Scandi countries aren't the best comparison countries for the UK. They have smaller populations, and some are very natural resource rich. We probably need to compare ourselves with urbanised OECD countries with populations over 40 million people, but not the giants like the USA.
@@georgesdelatour I genuinely don’t see why the UK couldn’t be as prosperous as 🇩🇰 (incidentally, 🇬🇧 has rather more natural resources). If smaller populations are the answer, why not break up any country with more than (say) 10m people? (I have 🏴 friends who are of this opinion). If only 🇬🇧 were as well administered as 🇩🇰. Why isn’t it?
@@charlesbruggmann7909 I’m not saying the UK cannot ever expect to have the GDP per capita of Denmark. And you’re right that, in many respects, small is beautiful. Joel Mokyr has argued that it was mostly decentralised smallness which enabled Europe to pull ahead of lumbering, monolithic China after 1500. He’s overstating his case, but there’s probably something to the idea. My point is, we have to start from where we are. We have to provide well-paying jobs for the much larger population we have, with the specific characteristics it has. I personally believe the only way to do that is to bring back manufacturing at scale through a focussed industrial policy. Since the 1980s we have decided to be mostly a services-only economy, and I don’t think this works for a country with our medium-large population. It probably works for Ireland, Singapore etc. I just don’t think we can make it work for 70 million people.
@georgesdelatour -- The size of the country doesn't really matter and there are many similarities between the UK and DK. BUT why are Novo, Maersk, Lego, Danfoss still in Denmark while Dyson left?. Productivity depends on public services so the businesses need to share. Maintaining a influential upper class in the Government who only serves >3% of the population is unhealthy.
Part of my judgment about the UK was a walk down what used to be a bustling town centre 20 years earlier. It was really sad! Charity shops, loan shops, betting shops, and boarded-up shops.
Like a well managed green house overgrown with weeds.. from a distance is still full of greeness foliage and growth but up close its in disarray uncultivated and the weeds suffocate all else.. Town centers are just big playgrounds for the working class, unemployed and illegal immigrants a place to shuffle around at weekends to give a meaningful existence to the masses.. Life is the consumption of the consumed....
Is there hope for the UK economy? A: There is always hope, the UK economy and country is so complex and large there are always options available to turn the tide of decline. I remain convinced however that it will require visionary leadership at a governmental level to galvanise the population, something i dont see either red or blue. The old days of empire are well and truly done and we need to have a new era and long term place in the world. Fixing the regional preference to london vs every other area of the uk is a priority. Fixing the complex UK housing issue both culturally and politically is another huge topic. Figuring out how to actually benefit from brexit rather than just political point scoring and sound biting (i voted remain but it is what we are stuck with for now). Engaging with younger generations (education, practical skills and moving away from pure services based economy) and investing in national long-term infrastructure for a strong future talking 20-30+ year time frame, rather than short term rubbish weve had for the past 40 years. (I understand this is difficult as election cycles are way shorter than this). Stopping using immigration as a poltical scapegoat and also implement/influence proper integration of new people to the UK. Addressing the rising issue of pension and an aging population rather than can kicking. Ensure the uk is energy independent. Call me simple but having a real long term plan for the above would go a considerable way of turning around the decline.
I have to say, your channel is one of the clearest, not too much jargon, to the point analysis of the economy I’ve seen. Keep it up. I hope all political parties see it.
The problem with privatisation is that it encourages firms to focus on financial engineering instead of product delivery. As an example, Thames Water borrowed lots on money to pay out in dividends since the interest payments reduced their declared profit (tax bill). All very well until interest rates shot up, and the firm is now at risk of bankruptcy.
To add to why we have the highest tax burden and yet worse services, I believe it also has something to do with the fact that the UK government has less assets of its own than ever, and so can neither earn money from those assets (think sold off council housing) and also has to pay rent to the private asset owners, which once it never did (think PFI contracts for new hospitals).
Exactly. The UK has sold off its assets. They now belong to the super rich who add to their wealth by renting them back. If we do not tax the super rich wealth the situation will only get worse
@econmicshelp1 - I really enjoy your videos, I hope you could put a focus on the UK productivity issue over the years, the stories seem to think its because we work from home more now, But the Productivity has been slumping since the early 90s I honestly feel its due to investment from the private sectors vs other countries of the same period. Not to be ideological but we seem to only have business that just want to extract wealth and not invest.
The Swiss press reported recently that something like half a dozen 🇳🇴 billionaires have moved here as a result of recent tax increases. My mother knows a Scandi family who are moving back here (from 🇬🇧) as the non-dom loophole is abolished.
Yes, this a topic for debate in Norway. The current "left-wing" government is really unpopular, and next years election will probably be a land-slide victory for the "right wing" (in Norwegian context) parties. It is very likely that the taxes causing those billionairs to move will be removed then. (And in the longer term I look forward to Norway becomming a tax haven, but that's a few decades out).
@@stevepetty7009 As always, there are too few ‘super-rich’ to raise the kind of money necessary. To really rake it the dosh, you will have to go deep down into the middle classes. In Switzerland (where I live), the wealth tax is levied on all assets above a total of Fr 50’000 (≈ £45k) including car, house, bank accounts, financial assets, art etc… Not a vote winner.
It's interesting to hear discussions of economics and growth outside the US. There is much more emphasis on public services rather than just employment, wages, and the stock market. I don't have any strong opinion or judgement on this difference in approach. However , I do find it interesting. The level of public services doesn't even cross my mind when I think about the state of the economy. Maybe it should. I probably need to listen to more UK based sources to see if this is a general characteristic / cultural difference.
Thank you for this informative video as i found it enjoyable to watch. The question and answer format, was very engaging compared to arguably other formats and may encourage more subscribers.
Good your point about the youtube algorithm incentivising doom headlines, (Sky News and other newspapers do that too) becasue that seems to get more views than anything which might have some realistic optimism. Shame its tough to be balanced whilst staying popular! Thanks for trying along that line though - your channel is doing well!
UK' miserable situation has been driven by decades of low private and public investment levels, a historical focus on cost-cutting over capacity building, and a total lack of infrastructure upgrades. The UK government has repeatedly mismanaged its own economy through prolonged austerity measures, inaccurate inflation and interest rate handling, which has exacerbated slow growth rates, minimal real wage growth, and a significant increase in public debt.
Great chat, as ever. Only two nations in the PPP USD list of 21 presented, other than the UK, of any size are represented: USA and Germany. Even Canada is a middling population, like Australia, and the rest are relatively tiny (compared to China and India, say).
This was a very interesting video. Will it become a regular feature? Would you please consider doing a video on the recent Mais lecture? This appears likely to be the economic diet we are going to be served for the coming parliament or two. I read the transcript, but lack the background knowledge to make enough sense of it as I would have liked. Thank you for your ongoing work.
Interesting and very well explained. But one factor missing in your analysis is the huge wealth inequality. In 1970 the UK was amongst the least unequal of western nations. Now, apart from the US it has the highest inequality, with more Billionaires and more homeless and foodbanks So when you say is the UK broke it depends on which part you mean
As for the privatization, here in Bulgaria the trains are still operated by a nationally-held company and most of the services and infrastructure has not improved and continues to be underinvested.
Whereas in the uk the privately owned railways are very expensive to travel on and the routes don’t really do anything in remote or rural areas which are still under represented decades after the rail networks were introduced. Thanks to the conservatives who withdrew and closed many rural stations in the 50s and 60s
I’m very optimistic on the UK economy considering we’re having any amount of growth with these lot in charge and the amount of cheap or free little fixes to be made that just haven’t suited the tories for various reasons or the tories have planned them but not gotten around to it.
Problem is that the government privatised housing and school and still have to pay to provide the same services which now cost more because they don't own the assets needed by the service.
Thanks for you objectivity and insightful vlogs, Tejvan 👍 So what would you do ? ...since you're more knowledgeable and qualified than the politicians in the Treasury 😉 7:53 Schroders GDP:Happiness chart - extending the trend beyond $58k based upon 8 data points looks dubious ?
Can you one day make a video about MMT but without ideology and politics, just with math? There is a ptoblem with a statement "Gov should not worry about debt" that inflation or currency depreciation will hit us soon enought. Also the more you print the higher the interest rate need to stay, and for growth low r is useful. So there is a challenge of optimalization of interest rate, inflation, exchange rate, and growth.
I’ve tried to wrap my head around MMT. It feels so wrong, but I’m prepared to give its advocates a hearing. I notice that all its main advocates are American, and I have a suspicion that MMT policies might work, but only in the USA, because of it possessing the world’s reserve currency. If a country like the UK tries MMT policies, it’ll probably be a disaster.
privatization tends to work when: 1. It is not over regulated by the government (for example the railways). 2) the company is not a monopoly (e.g the water companies). 3) the most important factor is that companies are held accountable for their mistakes - that is the government doesn't bail them out when managers screw the company for short term gains. The problem with the UK economy is the social framework within which it is operates. It is outdated. It is based on a hereditary privileged elite, symbolized by the royal family, and crystalized within politics through institutions such as the civil service and the house of lords. The whole system is designed to preserve the power of the elites through a bizarre mix of tradition and over-regulation and high taxes for the middle and working classes. This has the effect of stunting economic creativity, incentive and mobility which are the true drivers of the economy. As the international scene changes, the UK will fall further behind as it clings onto a social philosophy that died out in the 19th century.
If you look at the people at the top of the Sunday Times Rich List, they’re pretty international, and many are self-made. The list really isn’t dominated by “old money” aristocrats. It’s people like Gopi Hinduja, Lakshmi Mittal, Len Blavatnik, David & Simon Rueben etc. The House of Lords no longer has a hereditary component: its members are all political appointees. The Civil Service is dominated by people like Sue Gray (the Labour Party’s Chief of Staff). She isn’t posh.
Although most “old money” aristocrats have died out there is still a small network of heredity elites who yield a tremendous amount of power. (I won’t name families online; however, you can figure it with a little research). They operate in the background through formal and informal networks. (Again, I won’t name these networks but you can figure them out with some research). Access to these carries a lot of prestige and access to business/power opportunities. These networks are open to anyone of great influence/money provided you abide by its philosophy and unwritten rules (largely set and for the benefit of the small circle of elites). Its these networks are where the real power lies. Just having money in the UK doesn’t mean you automatically have political power/influence. This network extends somewhat into the civil service. Of course, “commoners” are hired into the civil service, especially into public facing roles to provide a veneer of democracy, but again the real power lies much deeper. As for the house of lords, the issue is that members are unelected and largely made on the advice of the civil service who are influenced by the network of elites.
@@georgesdelatourI responded to your points and explained how networks of influence (where the real power lies - not money) works in the UK and how it extends into the civil service and the House of Lords but youtube seems to have deleted it :(
@@SS-ce1py Fair play. I get comments deleted which make no mention of anything which seems obviously controversial. I've noticed that, if you mention that thing which happened all over the world in 2020, even if you don't say anything risqué about it, you're often automatically deleted.
The UK has a huge need for infrastructure, so they have a means for digging out of their hole by building out infrastructure. This will create jobs and returns on the infrastructure investments. However, I think the biggest problem for the UK will be the loss of the EU market. The UK must rejoin as quickly as possible or risk getting left behind by the US and EU.
UK as an European country has the right to apply for EU membership as soon as it complies with the Copenhagen criteria: Since UK is a former member Article 50.5 of the treaty of EU applies and it says: "Any country that has withdrawn from the EU may apply to rejoin. It would be required to go through the accession procedure." This is the accession procedure prerequisite that UK has to meet in full to be able to apply for membership. Note to be able to apply. The EU assesses the readiness of applicant countries according to three accession criteria defined at the European Council in Copenhagen in 1993 Specifically: Political criteria: stable institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities; Economic criteria: a functioning market economy and the capacity to cope with competition and market forces in the EU; EU acquis criteria: the ability to take on and implement effectively the obligations of membership, including adherence to the aims of political, economic and monetary union. At the same time, as defined by the 1995 Madrid European Council, applicant countries are expected to develop their administrative structures and the EU needs to be able to integrate new members. The acquis is the body of common rights and obligations that is binding on all the EU member states. It is constantly evolving and comprises: • the content, principles and political objectives of the Treaties; • legislation adopted pursuant to the Treaties and the case law of the Court of Justice; • declarations and resolutions adopted by the Union; • instruments under the Common Foreign and Security Policy; • international agreements concluded by the Union and those entered into force by the Member States among themselves within the sphere of the Union's activities. Candidate countries have to accept the acquis before they can join the EU and make EU law part of their own national legislation. Adoption and implementation of the acquis are the basis of the accession negotiations. The EU council needs to give unanimous consent to the EU commission to start the accessionprocess. So these criteria need to be adhered to 100% for UK to be able to apply. It is not a question of "aligning a bit" and everything will be fine. The accession process is split up in 6 clusters with 35 chapters that all have to be closed before an accession treaty can be drawn up. All EU parliaments have to ratify the treaty.
I’m assuming that, by infrastructure, you mean things like transport infrastructure: roads, railways, airports etc, rather than energy supply, which is a slightly different matter. The multiplier effect from infrastructure declines as a country matures. When a developing country goes from almost no road, rail or airport connections at all to some new, good, hi-tech connections, the economic multiplier is huge. China demonstrates this well. Planners effectively start with a blank piece of paper. Their projects employ a lot of the country’s workforce, raising their wages, increasing their spending, and so on. For the UK, it’s mostly about how we update an existing infrastructure. The existing infrastructure hems us in; we can’t rip it up and start again. Our planners don’t have a blank piece of paper. Navigating around what’s already there is cumbersome, and so on. None of this is to downplay the value of infrastructure improvements. But I think their potential to transform the UK economy isn’t as great as some people think it is.
@@georgesdelatour The UK has old and decaying infrastructure. Arguably, it is the developed country in most need of infrastructure. Yes, ripping out old infrastructure and replacing it with new will not only create jobs, but will increase commerce and public health. It's a no-brainer for a country like the UK.
Theoretically, if we lived in a well-functioning but zero-growth global economy how would pensions continue to grow? In that scenario for the money you put in would it = 0% growth over time? I suppose inflation would also be near 0, and perhaps we would no longer need pensions in such a world.
Don’t know about theoretically but something that has been happening in the real world is this. Since after the 2008 crisis, once asset management (including pension funds and private equity firms) realised bonds returns were crappy due to low interest rates
There is always a bright future for the economy of the corporates who own the government and the top 1% ( descendents of William the conqueror } For the rest, there has never been any hope in reality
I’m not sure there is a workable-solution for the uk economy, not because there aren’t solutions, but because no solution are viable through the political system in which all 2 and 2halves of a party require media endorsement or apathy and ample private funding. My personal “if I was in charge” silver bullet (as much as any one thing is a solution) would be a publicly owned construction company. Find £10billion per annum from whatever source and fully vertically integrate it from human capital generation to materials acquisition and disposal, along with standardised building schemes and self-certification for planning permission(probably using a delegated ministerial instrument). I’d also force it to dedicate some fraction into an annuity fund so it can operate independently from the government funding wise if and when the political winds change. It wouldn’t solve it, but it can easily fit 40k houses a year inside the budget ever at higher than present input costs. That’d slow the increasing size of the drain on the economy, and hopefully build political support for turning the corner on annual house construction exceeding the annual 300/400k a year. And once that scale is reached one hopes the prebuilt supply chains and scale would facilitate infrastructure investment (including hs2, I personally disagree very strongly with this channel, due to their misunderstanding of hs2 as a speed upgrade, not the capacity relief scheme for all 3 mainlines it actually was)
As long as it’s accompanied by a politician-proof mechanism to reduce mass immigration to John Major levels, I’d support it. There’s amazing progress being made with 3D printing houses, BTW.
About workers dropping out of the workforce: many older workers, especially women who do drudge admin work, would prefer to work part time. I’m one of them. After 30 years of mostly full time work I need to drop my hours. However, there are very few part time jobs available now. But loads of full time. We have 2 choices: drop out or work full time. Those of us that can just about afford not to work will drop out. The ones forced to work full time will be demoralised and unmotivated. Sort out the part time job market, which was buoyant prior to lockdowns, and it will help the economy. Or just ignore it and everyone suffers. As for the younger generation not attending interviews, I don’t blame them! They’ve been dealt a bad hand, born at the wrong time. A bit like those born in the 1890s pre WW1.
Our obsession with increasing GDP is demonstrated to be a blind alley by the people of the Himalayan kingdom of Bhutan, who prefer to focus on Gross Domestic Happiness or GDH! How we live is so important, especially now with climate change upon us, and the rapid decline of species on our planet.
As a result of BREXIT, UK food importers will be facing an extra £200 million cost because of custom checks coming this April, which will be passed on to the consumer... 👏👏
Reducing national costs by generating our own energy , and not importing oil, gas , and electricity . The UK spends £110 billion per year on imported energy. In 20 years time the National Debt and Balance of Payments will be fine.
Privatising is good, it’s just the way uk does it that is bad.. (eu also messes it up) UK manages to mess up the rules and terms which keeps bureaucracy and red tape high. Market forces are interrupted!
I’m past caring to be honest 2016 was the chance to turn things round & they royally fucked it up & the boats kept coming..time to get out of dodge im afraid 🤷♂️
Thanks for discussing the laffer curve! I love this channel, the content you put out is excellent and the graphs really help. I also really enjoy that you stick to facts and don't need to sensationalise anything - it's really refreshing
I think the reason the minimum wage has worked is that when you give a poor person more money they will most likely go spend it in the economy but when you give a wealthy person more money they will be more likely to buy assets
Best reason to be bullish about Britain: In an aging region, you’re by far Europe’s most successful country at integrating immigrants-to the point where even the most virulent anti-migrant Tory zealots are brown folks! That means the UK population is still growing, a necessary (though not sufficient) condition for reviving economic growth. Does the reliance on migration render such growth “artificially propped up”? No, unless you think Britain’s 19th century economic dominance was artificial too. After all, a small island leading the world in industrialization and urbanization depended on the UK’s ability to export tens of millions of surplus people to America, Canada, Australia, NZ, etc. If the world had cracked down then on mass migration from the British Isles, England’s Victorian heyday would have quickly devolved into a Malthusian hellscape of overpopulation, famine, class war, revolution. No country in history has benefited more than Britain from open borders; only difference now is your gains are flowing in the opposite direction.
Regards tax Please check out the proposals by Harry Lambert & Gary Stevenson. Their proposals for UK tax changes make sense: rebalance the burden from income based to income & wealth based. (YT is stopping me from adding links!)
You can't tax wealth it is not real. You cannot even measure it. Income and transactions only. When wealth is realised, made real, gains are taxed already. We all rightly ridicule the Window tax which is a stupid wealth tax idea. Our problem is far too high incomes/pay leading to excessive house prices and grossly over expectant lifestyles.
With all due respect, what you're saying isn't true. Some countries levy taxes directly upon wealth holdings, while others only tax transfers of wealth.
@@HA-bc4pc That some places do it does not mean it is fair, accurately counted or reasonable. Like our old Window tax. So tell me how do you measure a person's wealth to tax it? Even the Times rich list is very approximate guesses for well known wealthy people! Given houses, shares, art, change in value by the second, by opinion of random valuers etc. What of random items perhaps family heirlooms, not realised were of great value? Perhaps suddenly discovered by some intrusive tax assessor. So you have had this unknown Van Gough for 50 years! You owe us back tax equal to 2 times its current sale value for owning it all those years. But ok make it easier, tax owning an Apple I phone, sign of wealth. Or over a certain engine size car. The entire concept is farcical, unfair, unreasonable, and plain wrong. Basically a nasty envy tax from spendthrifts that never save preserve and build, generation to generation perhaps. Oh and the public regard the evil Inheritance Tax as the most unfair tax, such that even the government mooted ending it. No one normal regards the theft in 'salami slices' of tax of their 'stuff' they own, bought and paid for with taxed money, or just family possessions, as remotely acceptable. Envy and spite is not a basis for taxation.
Great video and it shows what needs to be done. The only way to progress is to be 100% business friendly as Ireland is, slash business taxes and massive investment will come onto the Country. I have been in business in the UK over 40 years and there has never been a worse time to invest here there is no point in investing if profit's are all taxed away
Slashing business taxes means increasing taxes for PAYEs and reducing public services. It also means less infrastructure, for example Why should I care then for slashing taxes for businesses which overall don't struggle?
@@barbthegreat586never mind Gary, the only business he is in is spreading bullsht. Tomorrow he will have been a farmer or school teacher if that fits that days narrative better.
@@barbthegreat586 The Welfare State is the problem, just take “Our inactivity rate in the UK is 21.95%. In Iceland it is 13% and in the Netherlands it is 14%,” the Chancellor said last week, referring to the share of working age adults who are neither in work nor looking for a job. We have created a society of people who don't want to work or contribute. Angela Merkal told the World in 2012 “If Europe today accounts for just over 7 per cent of the world’s population, produces around 25 per cent of global GDP and has to finance 50 per cent of global social spending, then it’s obvious that it will have to work very hard to maintain its prosperity and way of life,” Ms Merkel said in the interview. “All of us have to stop spending more than we earn every year.” This is the UK and EUs biggest problem
the Problem is weak management with wrong people in the wrong jobs, the "best" being passed over for friends and family so the gravy train rides on, it needs to be derailed and a rebuild at grass roots start with a wealth tax to free up funds for reinvestment, the ones with nothing have even less while the ones with are increasing, make them invest in the economy for the good of the country by a tax, if they want to leave let them as we would not need them, after all it our children's future that is at stake
I always get a good laugh out of those per capita GDP figures when I see how much better Ireland fares vs. UK. Good craic, as the Irish would say. I might try to emigrate to Ireland...
The Irish economy is basically Thatcherite (though Irish politicians would never use that word). Government spending is 25% of GDP (compared with 45% in the UK), there's no single payer health system, and corporate taxes are the second lowest in the EU.
Britain will continue to underperform due to its undemocratic political system. The same two parties have an oligopolistic monopoly on governance. Both have been incredibly incompetent. Rather than First past the post, a proportional representation would achieve far more accountability in government and allow for a meritocratic economy. At the moment the main two political parties simply act for the benefit of vested interests (esp Tories) and not for the citizens of Britain.
@@georgesdelatour"best performing" on the surface when all you focus on is gdp growth. But agree with you that the political structure is not the one cause of all trouble, it's a multitude of issues plaguing the UK.
@@ab-ym3bf Fair point about the USA. GDP isn’t everything (but it isn’t nothing either). One thing everyone does on these posts - probably including me - is try to make an economic case for what’s really just a political preference. I think our first poster wants Proportional Representation for political reasons. I don’t think he’d abandon that cause if it could be somehow proved that PR had no effect on economic performance or was even mildly negative. Even with some dodgy statistics, there’s really no doubt that China has managed spectacular economic growth under one-party dictatorship. If anything, it’s done much better than India has with the world’s largest democracy. Does that mean I’d like the UK to be governed like China? No, because economics isn’t everything.
@@georgesdelatour The US is a completely different case, it's the reserve currency and it is also endowed with natural resources. Britain is more like Singapore that has to have a highly focused and effective government run for the benefit of the people by being focused on commerce. Singapore in the 1970s was third world and received foreign aid from NZ, now because of highly focused and effective government it is one of the best economies in the world. Britain is hemorrhaging talent as it emigrates and is replacing with far lower talent. Take it from someone who has been a management consultant in both Britain and the Antipodes.... The UK is really falling behind.
@@John-ou4rm I think the UK “brain drain” is real. I watch the Lex Fridman podcast. He constantly interviews smart guests at the top of their field - the kind of people who might win Nobel Prizes, if they haven’t already. Many talk with an English accent. These have all been “poached” from the UK by US universities and research institutes which can offer them better pay and more possibilities to excel in their field. I don’t know what we can do to make those people stay in the UK, to be honest. At a less intense level of achievement… We pay a lot of attention to immigration but not enough to emigration. I looked into this maybe ten years ago, so my information might not be up to date. Back then, something crazy like a third of all UK emigrants were heading to Perth in Australia. And the typical emigrants to Perth were recently married couples aged around 30, both with degrees. They preferred the Ozzie weather, and we can’t win that one. But it also seemed that the chance to own a house big enough to raise a family was felt to be better there, the quality of schools (and school pupils) was felt to be better there, the crime risks were felt to be lower there, and so on. I think the loss of these people is really bad for the UK. They would be net taxpayers, and their children would likely be too. Making the UK more attractive to these people should be a priority. I’m not sure what any of this has to do with Proportional Representation. I see lots of problems with PR in the UK: 1) Countries like Germany have a 5% threshold to enter Parliament. But we can’t have that, because it would mean no Northern Ireland parties, no Plaid Cymru, and potentially no SNP in Westminster. Much as I might like that, no government could sell such a system. So we’d have to go for the full-strength Israeli version of PR. 2) I suspect we’d very quickly have an Islamic party. I like that mischievously, because it would mess things up a lot for the Labour Party. The UK already has more Muslims than Northern Irish and Welsh combined, and by the next census will have more Muslims than Scots. But the idea of Labour or the Conservatives having to do a deal with an Islamic Party to form a government feels very Michel Houellebecq. The alternative would be doing a deal with the SNP for another IndyRef. None of these weird coalitions are likely to result in the British answer to Lee Kuan Yew running the country.
Growth and jobs is what is needed. Why would any company invest in Great Britain when they is lower corporate tax rates right next door and in the USA ? 😵💫
Many economists believe that the world's capitalist economic system is slowly collapsing. Capitalism has already peaked. Marx predicted that the world's capitalist economic system would eventually collapse because it is inherently flawed and chaotic.
Anyone old enough to remember the days when 'privatisation' of utilities was sold as the means of promoting greater competition, driving efficiencies, encouraging much needed investment and driving prices for consumers down? Utter BS on stilts of course, but it was a popular narrative that essentially fed into people's ideological fervour, greed and/or blissful ignorance at the time.
The millions of people that benefitted from the handouts during the covid crisis enabling them to keep their jobs have a short memory.We went through a financial crisis,then brexit,then covid now Ukraine.People thinking they were getting a tax handout after all that we’re kidding themselves.We are joining the CPTTP. we will reep the rewards from it.Increasing government borrowing to fund a handout when we have debt mounting up would’ve been suicide.Just my opinion,Not looking for an argument,
'Is There Any Hope For The UK economy?' depends on the time frame! Is There Any Hope For The UK economy in the next 20 years - no. 🤣🤣😉 About TH-cam supports negativity - your videos always pop up in my suggestion list as soon as you post them! What does that say about you?? (I have no problem with that - some of your videos include really goof ideas, especially the latest ones; you clearly have changed your mind and become more realistic).
Only if we get back into the SM and CU - even if we don't fully rejoin the EU; because being in these two things is key to a more prosperous, and better future. Trying to align ourselves more with America, and their standards will, I believe, end up breaking this country. It's THAT important that we get back. into the SM, and CU. There's too much at stake here. And we simply don't have the strong manufacturing base to sustain ourselves in the long term; nor do we have the global export figures (exc. the EU) to overlook this vital market by trying to chase somewhere where we'll never have the same successful export levels - like the US, or India.
When will you brits stop fantasising about things that are not possible, like SM/CU membership, and start focusing on what is actually within your reach? There is no quick solution for the UK's fundamental problems nor its self inflicted brexit problems.
@@ab-ym3bf .....I didn't vote for this madness - just so you know. We're not all delusional 'headbangers'. I'm just stating the facts - and YES, we do need to be back in both. Trying to align with America is total insanity. But I guess my fellow Brits (Brexit voters at least) will only realise this when it's too late, and Northern Ireland reunite with the R.o.I. That's going to happen btw, it's just a question of 'when'. Likely some time in the 2030's. Brexit headbangers will deny this all day long, but in doing so they are denying the reality.
I have to tell you a disappointing fact. UK cannot join the sm and cu as a third country. Only EU members are in the sm and cu. 3 EFTA members are also in the sm through the EEA agreement.but the articles of the EEA treaty blocks third countries.
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I plan to make more videos like this, please consider subscribing to channel. th-cam.com/users/economicshelp1
A comment from a Continental: I studied economics in 🇬🇧 many many moons ago. I am constantly struck by the way 🇬🇧 politicians and commentators look for some sort of ‘magic sauce’ to create growth and solve everything. Why is there not more emphasis on the boring stuff like professional training for those who leave school early, a better transport/logistics system etc etc.
Admittedly, there are no shortcuts, lots of money is needed, it is difficult and the benefits will not become apparent before the next election.
It should be obvious that the UK governments cares little about the people ( other than the royal descendants of William the Conqueror ), noting a simple situation - the need to import doctors and nurses instead of increasing education of locals
Who are they trying to fool?
Spot on! This happens because politicians are not interested in solving problems. The problems are just too damn hard. What they do is fix the temporary optics of the problem while they get more power and money.
Your second para answers your question. Unfortunately, UK politicians are geared to the next election and most recently have been more intent on campaigning rather than governing. This means that they promise us stuff but have no plan on how to deliver it but at least they get to sit in Parliament for 5 years. However, it is also the electorate's fault as we want to hear easy answers rather than be told about tough choices, years to resolve and perhaps financial sacrifices along the way. Our collapsing care system is a perfect example where there are no easy short term fixes and it will be expensive to resolve; politicians don't want to tell us and we don't want to hear it.
You answer your own question: English short termism.
The continent has half decent voting systems which encourage long-term thinking.
I'm an economics student in Norway and I'm glad i found your videos. I like how you apply economic theory in a balanced way, and how you explain that there are no straight answers or quick fixes to economic policy and its all about finding a balance between different interests.
We keep hearing about further tax rises, yet as you pointed out, taxes are already the highest since the aftermath of WW2.
In the UK we must be getting close to the point where further tax rises become counterproductive.
Personally speaking, this year I’ve already been hit with a doubling of car insurance, £450 monthly gas/electric bill, higher council tax and a 5yr fixed mortgage coming up for renegotiation.
There’s nothing left to give.
Doesn't help that loads of tax revenue is to service debt accrued through leasing back assets which used to be state-owned, so public service levels enjoyed in the past can't be purchased for the same levels of taxation anymore. The state needs to buy it all back.
Yet 🇬🇧 are still fairly low. 5% of GDP less than 🇩🇪, 10% less than 🇫🇷.
And well unfortunately there are things left to give, standards of living can decrease, people can be forced to downsize their housing arrangements into house or flat shares, be forced to use public transport, sell their vehicles, drive less, eat less, engage with society less.
All at enormous social & economic cost, but global factors aside, the governance the global West has over the past two decades has landed us all squarely here.
Taxes on who. The millionaires and billionaires can afford to pay far more.
@@nazb1982
Not a particularly good argument. Looking at obesity statistics, Brits could also ‘afford’ to eat less.
The used to say roads are a good indicator of wealth, and it's still relevant today, but the UK probably has the worst roads in Western Europe, and I know for fact, many Eastern European countries are better than the UK.
I'd say the best indicator today are supermarkets. I've been to a supermarket in France, it's in La Rochelle, which is ranked around 38th city in France. I live in SW London, and this French supermarket is better than my local Sainsbury's Nine Elms, Waitrose in Clapham Junction, and Asda in Clapham Junction. All three combined can't touch this supermarket in France's 38th city. And here's the rub, how does the population of La Rochelle support such an amazing supermarket?
I could talk about French roads, but they are so good, it's another world, and I'm not on about their motorways. The towns and villages show so much care it makes the UK look like a 3rd world country.
The truth, Britain has become a very poor country. It will never improve, so long as the City Crime Cartels keeps bleeding the nation dry. They are like vampires.
What are "City Crime Cartels"?
Try to benchmark the UK with a Scandinavian country like Denmark - compare the state of public services, productivity, salaries, debt etc. The gap is very big.🙏
I'm happy to try and learn from any economy, from tiny Liechtenstein to giant China. But I suspect the Scandi countries aren't the best comparison countries for the UK. They have smaller populations, and some are very natural resource rich. We probably need to compare ourselves with urbanised OECD countries with populations over 40 million people, but not the giants like the USA.
@@georgesdelatour
I genuinely don’t see why the UK couldn’t be as prosperous as 🇩🇰 (incidentally, 🇬🇧 has rather more natural resources). If smaller populations are the answer, why not break up any country with more than (say) 10m people? (I have 🏴 friends who are of this opinion).
If only 🇬🇧 were as well administered as 🇩🇰. Why isn’t it?
@@charlesbruggmann7909 I’m not saying the UK cannot ever expect to have the GDP per capita of Denmark. And you’re right that, in many respects, small is beautiful. Joel Mokyr has argued that it was mostly decentralised smallness which enabled Europe to pull ahead of lumbering, monolithic China after 1500. He’s overstating his case, but there’s probably something to the idea.
My point is, we have to start from where we are. We have to provide well-paying jobs for the much larger population we have, with the specific characteristics it has. I personally believe the only way to do that is to bring back manufacturing at scale through a focussed industrial policy. Since the 1980s we have decided to be mostly a services-only economy, and I don’t think this works for a country with our medium-large population. It probably works for Ireland, Singapore etc. I just don’t think we can make it work for 70 million people.
@georgesdelatour -- The size of the country doesn't really matter and there are many similarities between the UK and DK. BUT why are Novo, Maersk, Lego, Danfoss still in Denmark while Dyson left?. Productivity depends on public services so the businesses need to share. Maintaining a influential upper class in the Government who only serves >3% of the population is unhealthy.
They got a load of oil, if it wasn’t for that they’d be in terrible shape
Part of my judgment about the UK was a walk down what used to be a bustling town centre 20 years earlier. It was really sad! Charity shops, loan shops, betting shops, and boarded-up shops.
Like a well managed green house overgrown with weeds.. from a distance is still full of greeness foliage and growth but up close its in disarray uncultivated and the weeds suffocate all else.. Town centers are just big playgrounds for the working class, unemployed and illegal immigrants a place to shuffle around at weekends to give a meaningful existence to the masses..
Life is the consumption of the consumed....
@@David-td1tf sigh Will people ever stop banging on about illegal immigration?
(directed) outrage
I see the same - Bromley in my case
@@EuropeanQoheleth sigh... will nobz ever open there eye's
Is there hope for the UK economy?
A: There is always hope, the UK economy and country is so complex and large there are always options available to turn the tide of decline.
I remain convinced however that it will require visionary leadership at a governmental level to galvanise the population, something i dont see either red or blue. The old days of empire are well and truly done and we need to have a new era and long term place in the world.
Fixing the regional preference to london vs every other area of the uk is a priority.
Fixing the complex UK housing issue both culturally and politically is another huge topic.
Figuring out how to actually benefit from brexit rather than just political point scoring and sound biting (i voted remain but it is what we are stuck with for now).
Engaging with younger generations (education, practical skills and moving away from pure services based economy) and investing in national long-term infrastructure for a strong future talking 20-30+ year time frame, rather than short term rubbish weve had for the past 40 years. (I understand this is difficult as election cycles are way shorter than this).
Stopping using immigration as a poltical scapegoat and also implement/influence proper integration of new people to the UK.
Addressing the rising issue of pension and an aging population rather than can kicking.
Ensure the uk is energy independent.
Call me simple but having a real long term plan for the above would go a considerable way of turning around the decline.
I have to say, your channel is one of the clearest, not too much jargon, to the point analysis of the economy I’ve seen. Keep it up. I hope all political parties see it.
The problem with privatisation is that it encourages firms to focus on financial engineering instead of product delivery. As an example, Thames Water borrowed lots on money to pay out in dividends since the interest payments reduced their declared profit (tax bill). All very well until interest rates shot up, and the firm is now at risk of bankruptcy.
It shouldnt be allowed to funding the dividend with debt in company with strategic meaning for public
To add to why we have the highest tax burden and yet worse services, I believe it also has something to do with the fact that the UK government has less assets of its own than ever, and so can neither earn money from those assets (think sold off council housing) and also has to pay rent to the private asset owners, which once it never did (think PFI contracts for new hospitals).
Exactly. The UK has sold off its assets. They now belong to the super rich who add to their wealth by renting them back. If we do not tax the super rich wealth the situation will only get worse
Discovered your content and really enjoy it. Keep it up!
Yes, TH-cam can be negative, people love 'being frightened' but best to prepare for bad times. Thanks for your more positive view. 👍
@econmicshelp1 - I really enjoy your videos, I hope you could put a focus on the UK productivity issue over the years, the stories seem to think its because we work from home more now, But the Productivity has been slumping since the early 90s I honestly feel its due to investment from the private sectors vs other countries of the same period. Not to be ideological but we seem to only have business that just want to extract wealth and not invest.
The Swiss press reported recently that something like half a dozen 🇳🇴 billionaires have moved here as a result of recent tax increases. My mother knows a Scandi family who are moving back here (from 🇬🇧) as the non-dom loophole is abolished.
Now the myth of drip down economics has been exposed, UK has no need to give Billionaires tax breaks.
Yes, this a topic for debate in Norway. The current "left-wing" government is really unpopular, and next years election will probably be a land-slide victory for the "right wing" (in Norwegian context) parties. It is very likely that the taxes causing those billionairs to move will be removed then. (And in the longer term I look forward to Norway becomming a tax haven, but that's a few decades out).
The super rich cannot move all their assets so easily. So a wealth tax would work.
@@stevepetty7009
As always, there are too few ‘super-rich’ to raise the kind of money necessary. To really rake it the dosh, you will have to go deep down into the middle classes. In Switzerland (where I live), the wealth tax is levied on all assets above a total of Fr 50’000 (≈ £45k) including car, house, bank accounts, financial assets, art etc…
Not a vote winner.
Fantastic! Thank you for answering my question.
Wow you got this video it quickly! It was great, thanks!! You could make this an annual or semi annual thing maybe?
Yes, I will try maybe once a month
It's interesting to hear discussions of economics and growth outside the US. There is much more emphasis on public services rather than just employment, wages, and the stock market. I don't have any strong opinion or judgement on this difference in approach. However , I do find it interesting. The level of public services doesn't even cross my mind when I think about the state of the economy. Maybe it should. I probably need to listen to more UK based sources to see if this is a general characteristic / cultural difference.
Thank you for this informative video as i found it enjoyable to watch. The question and answer format, was very engaging compared to arguably other formats and may encourage more subscribers.
Economic investigator Frank G Melbourne Australia is following this informative content cheers Frank 😊
Good your point about the youtube algorithm incentivising doom headlines, (Sky News and other newspapers do that too) becasue that seems to get more views than anything which might have some realistic optimism. Shame its tough to be balanced whilst staying popular! Thanks for trying along that line though - your channel is doing well!
Energy prices with privatisation we have no control over the income or directions of funds as with grid profits?
I finally found a word for people yelling about neo liberalism - heterodox! Great take from this video
❤Ireally enjoyed this you have obviously put a lot of effort into creating this video and I agree with your content. Thank you.🙏👏👏👏
Great videos and content. Greetings from Florida 🇺🇸
UK' miserable situation has been driven by decades of low private and public investment levels, a historical focus on cost-cutting over capacity building, and a total lack of infrastructure upgrades.
The UK government has repeatedly mismanaged its own economy through prolonged austerity measures, inaccurate inflation and interest rate handling, which has exacerbated slow growth rates, minimal real wage growth, and a significant increase in public debt.
Great chat, as ever. Only two nations in the PPP USD list of 21 presented, other than the UK, of any size are represented: USA and Germany. Even Canada is a middling population, like Australia, and the rest are relatively tiny (compared to China and India, say).
This was a very interesting video. Will it become a regular feature?
Would you please consider doing a video on the recent Mais lecture? This appears likely to be the economic diet we are going to be served for the coming parliament or two. I read the transcript, but lack the background knowledge to make enough sense of it as I would have liked.
Thank you for your ongoing work.
Interesting and very well explained. But one factor missing in your analysis is the huge wealth inequality. In 1970 the UK was amongst the least unequal of western nations. Now, apart from the US it has the highest inequality, with more Billionaires and more homeless and foodbanks So when you say is the UK broke it depends on which part you mean
As for the privatization, here in Bulgaria the trains are still operated by a nationally-held company and most of the services and infrastructure has not improved and continues to be underinvested.
Whereas in the uk the privately owned railways are very expensive to travel on and the routes don’t really do anything in remote or rural areas which are still under represented decades after the rail networks were introduced.
Thanks to the conservatives who withdrew and closed many rural stations in the 50s and 60s
I’m very optimistic on the UK economy considering we’re having any amount of growth with these lot in charge and the amount of cheap or free little fixes to be made that just haven’t suited the tories for various reasons or the tories have planned them but not gotten around to it.
Great video. But what are some options to get the uk out of economic hardships? What should we be focusing on? Taxing the rich? Building houses?
Problem is that the government privatised housing and school and still have to pay to provide the same services which now cost more because they don't own the assets needed by the service.
Thanks for you objectivity and insightful vlogs, Tejvan 👍
So what would you do ? ...since you're more knowledgeable and qualified than the politicians in the Treasury 😉
7:53 Schroders GDP:Happiness chart - extending the trend beyond $58k based upon 8 data points looks dubious ?
Can you one day make a video about MMT but without ideology and politics, just with math? There is a ptoblem with a statement "Gov should not worry about debt" that inflation or currency depreciation will hit us soon enought. Also the more you print the higher the interest rate need to stay, and for growth low r is useful. So there is a challenge of optimalization of interest rate, inflation, exchange rate, and growth.
I’ve tried to wrap my head around MMT. It feels so wrong, but I’m prepared to give its advocates a hearing. I notice that all its main advocates are American, and I have a suspicion that MMT policies might work, but only in the USA, because of it possessing the world’s reserve currency. If a country like the UK tries MMT policies, it’ll probably be a disaster.
I just subscribe to your channel. That way TH-cam algorithms can’t impact your videos to me. 👍
Yes if nothing else works, hope is always good.
privatization tends to work when: 1. It is not over regulated by the government (for example the railways). 2) the company is not a monopoly (e.g the water companies). 3) the most important factor is that companies are held accountable for their mistakes - that is the government doesn't bail them out when managers screw the company for short term gains. The problem with the UK economy is the social framework within which it is operates. It is outdated. It is based on a hereditary privileged elite, symbolized by the royal family, and crystalized within politics through institutions such as the civil service and the house of lords. The whole system is designed to preserve the power of the elites through a bizarre mix of tradition and over-regulation and high taxes for the middle and working classes. This has the effect of stunting economic creativity, incentive and mobility which are the true drivers of the economy. As the international scene changes, the UK will fall further behind as it clings onto a social philosophy that died out in the 19th century.
If you look at the people at the top of the Sunday Times Rich List, they’re pretty international, and many are self-made. The list really isn’t dominated by “old money” aristocrats. It’s people like Gopi Hinduja, Lakshmi Mittal, Len Blavatnik, David & Simon Rueben etc. The House of Lords no longer has a hereditary component: its members are all political appointees. The Civil Service is dominated by people like Sue Gray (the Labour Party’s Chief of Staff). She isn’t posh.
Although most “old money” aristocrats have died out there is still a small network of heredity elites who yield a tremendous amount of power. (I won’t name families online; however, you can figure it with a little research). They operate in the background through formal and informal networks. (Again, I won’t name these networks but you can figure them out with some research). Access to these carries a lot of prestige and access to business/power opportunities. These networks are open to anyone of great influence/money provided you abide by its philosophy and unwritten rules (largely set and for the benefit of the small circle of elites). Its these networks are where the real power lies. Just having money in the UK doesn’t mean you automatically have political power/influence. This network extends somewhat into the civil service. Of course, “commoners” are hired into the civil service, especially into public facing roles to provide a veneer of democracy, but again the real power lies much deeper. As for the house of lords, the issue is that members are unelected and largely made on the advice of the civil service who are influenced by the network of elites.
@@georgesdelatourI responded to your points and explained how networks of influence (where the real power lies - not money) works in the UK and how it extends into the civil service and the House of Lords but youtube seems to have deleted it :(
@@SS-ce1py Fair play. I get comments deleted which make no mention of anything which seems obviously controversial. I've noticed that, if you mention that thing which happened all over the world in 2020, even if you don't say anything risqué about it, you're often automatically deleted.
The UK has a huge need for infrastructure, so they have a means for digging out of their hole by building out infrastructure. This will create jobs and returns on the infrastructure investments. However, I think the biggest problem for the UK will be the loss of the EU market. The UK must rejoin as quickly as possible or risk getting left behind by the US and EU.
UK as an European country has the right to apply for EU membership as soon as it complies with the Copenhagen criteria:
Since UK is a former member Article 50.5 of the treaty of EU applies and it says: "Any country that has withdrawn from the EU may apply to rejoin. It would be required to go through the accession procedure."
This is the accession procedure prerequisite that UK has to meet in full to be able to apply for membership. Note to be able to apply.
The EU assesses the readiness of applicant countries according to three accession criteria defined at the European Council in Copenhagen in 1993
Specifically:
Political criteria: stable institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities;
Economic criteria: a functioning market economy and the capacity to cope with competition and market forces in the EU;
EU acquis criteria: the ability to take on and implement effectively the obligations of membership, including adherence to the aims of political, economic and monetary union.
At the same time, as defined by the 1995 Madrid European Council, applicant countries are expected to develop their administrative structures and the EU needs to be able to integrate new members.
The acquis is the body of common rights and obligations that is binding on all the EU member states. It is constantly evolving and comprises:
• the content, principles and political objectives of the Treaties;
• legislation adopted pursuant to the Treaties and the case law of the Court of Justice;
• declarations and resolutions adopted by the Union;
• instruments under the Common Foreign and Security Policy;
• international agreements concluded by the Union and those entered into force by the Member States among themselves within the sphere of the Union's activities.
Candidate countries have to accept the acquis before they can join the EU and make EU law part of their own national legislation. Adoption and implementation of the acquis are the basis of the accession negotiations. The EU council needs to give unanimous consent to the EU commission to start the accessionprocess.
So these criteria need to be adhered to 100% for UK to be able to apply. It is not a question of "aligning a bit" and everything will be fine.
The accession process is split up in 6 clusters with 35 chapters that all have to be closed before an accession treaty can be drawn up. All EU parliaments have to ratify the treaty.
I’m assuming that, by infrastructure, you mean things like transport infrastructure: roads, railways, airports etc, rather than energy supply, which is a slightly different matter.
The multiplier effect from infrastructure declines as a country matures. When a developing country goes from almost no road, rail or airport connections at all to some new, good, hi-tech connections, the economic multiplier is huge. China demonstrates this well. Planners effectively start with a blank piece of paper. Their projects employ a lot of the country’s workforce, raising their wages, increasing their spending, and so on.
For the UK, it’s mostly about how we update an existing infrastructure. The existing infrastructure hems us in; we can’t rip it up and start again. Our planners don’t have a blank piece of paper. Navigating around what’s already there is cumbersome, and so on. None of this is to downplay the value of infrastructure improvements. But I think their potential to transform the UK economy isn’t as great as some people think it is.
@@georgesdelatour The UK has old and decaying infrastructure. Arguably, it is the developed country in most need of infrastructure. Yes, ripping out old infrastructure and replacing it with new will not only create jobs, but will increase commerce and public health. It's a no-brainer for a country like the UK.
Theoretically, if we lived in a well-functioning but zero-growth global economy how would pensions continue to grow? In that scenario for the money you put in would it = 0% growth over time? I suppose inflation would also be near 0, and perhaps we would no longer need pensions in such a world.
Don’t know about theoretically but something that has been happening in the real world is this. Since after the 2008 crisis, once asset management (including pension funds and private equity firms) realised bonds returns were crappy due to low interest rates
There is always a bright future for the economy of the corporates who own the government and the top 1% ( descendents of William the conqueror }
For the rest, there has never been any hope in reality
I’m not sure there is a workable-solution for the uk economy, not because there aren’t solutions, but because no solution are viable through the political system in which all 2 and 2halves of a party require media endorsement or apathy and ample private funding.
My personal “if I was in charge” silver bullet (as much as any one thing is a solution) would be a publicly owned construction company. Find £10billion per annum from whatever source and fully vertically integrate it from human capital generation to materials acquisition and disposal, along with standardised building schemes and self-certification for planning permission(probably using a delegated ministerial instrument). I’d also force it to dedicate some fraction into an annuity fund so it can operate independently from the government funding wise if and when the political winds change. It wouldn’t solve it, but it can easily fit 40k houses a year inside the budget ever at higher than present input costs.
That’d slow the increasing size of the drain on the economy, and hopefully build political support for turning the corner on annual house construction exceeding the annual 300/400k a year. And once that scale is reached one hopes the prebuilt supply chains and scale would facilitate infrastructure investment (including hs2, I personally disagree very strongly with this channel, due to their misunderstanding of hs2 as a speed upgrade, not the capacity relief scheme for all 3 mainlines it actually was)
As long as it’s accompanied by a politician-proof mechanism to reduce mass immigration to John Major levels, I’d support it.
There’s amazing progress being made with 3D printing houses, BTW.
Would gdp per capita be a better metric than just gdp?
Duh
@@ab-ym3bf good answer👏👏👏
@@DeafMaker fitting for the question
There is always hope, I think it’s misplaced with the UK
This channel provides a great analysis of the UK economy. But in general almost all videos are depressive and pessimistic as much as it gets
UK the banana republic where a £15m pound donation to the tories lands you a £400m govt contract.
I'd like to hear some expansion on the beliefs of the Austrian School of economics and also the Cantillion effect if that would be possible.
Underrated channel!
Can you go through how to calculate the turning point of the laffe curve say for the UK when in reality?
Could you do a video on what if uk declared as bankrupt as been wonder what impact could be
About workers dropping out of the workforce: many older workers, especially women who do drudge admin work, would prefer to work part time. I’m one of them. After 30 years of mostly full time work I need to drop my hours. However, there are very few part time jobs available now. But loads of full time. We have 2 choices: drop out or work full time. Those of us that can just about afford not to work will drop out. The ones forced to work full time will be demoralised and unmotivated. Sort out the part time job market, which was buoyant prior to lockdowns, and it will help the economy. Or just ignore it and everyone suffers. As for the younger generation not attending interviews, I don’t blame them! They’ve been dealt a bad hand, born at the wrong time. A bit like those born in the 1890s pre WW1.
The tories are responsible for the damage they should be punished for their lies and corruption 😮
No.
Next question please 🙏
NO! Beware people, because terms like "do better" and "growth" translate to AUSTERITY, AUSTERITY, AUSTERITY, for the poor and middle class 3:34
Depend on Englands Leaders they trying bring back on Line Economy then possible other wise you watching many Years
So much for trickle down eCONomics.
Trickle-down economics is so called because the government pisses on you from a great height and tells you that it's raining. 😂
Our obsession with increasing GDP is demonstrated to be a blind alley by the people of the Himalayan kingdom of Bhutan, who prefer to focus on Gross Domestic Happiness or GDH!
How we live is so important, especially now with climate change upon us, and the rapid decline of species on our planet.
As a result of BREXIT, UK food importers will be facing an extra £200 million cost because of custom checks coming this April, which will be passed on to the consumer... 👏👏
Thanks again for the video. I wish how AI might affect the future economy had been covered.
Lower all taxes, it's been proved that in return gov revenue increase by the year-end
Reducing national costs by generating our own energy , and not importing oil, gas , and electricity . The UK spends £110 billion per year on imported energy. In 20 years time the National Debt and Balance of Payments will be fine.
Privatising is good, it’s just the way uk does it that is bad.. (eu also messes it up) UK manages to mess up the rules and terms which keeps bureaucracy and red tape high. Market forces are interrupted!
I’m past caring to be honest 2016 was the chance to turn things round & they royally fucked it up & the boats kept coming..time to get out of dodge im afraid 🤷♂️
Thanks for discussing the laffer curve!
I love this channel, the content you put out is excellent and the graphs really help. I also really enjoy that you stick to facts and don't need to sensationalise anything - it's really refreshing
Cool.
I think the reason the minimum wage has worked is that when you give a poor person more money they will most likely go spend it in the economy but when you give a wealthy person more money they will be more likely to buy assets
In answer to question 1, no.
Best reason to be bullish about Britain: In an aging region, you’re by far Europe’s most successful country at integrating immigrants-to the point where even the most virulent anti-migrant Tory zealots are brown folks! That means the UK population is still growing, a necessary (though not sufficient) condition for reviving economic growth. Does the reliance on migration render such growth “artificially propped up”? No, unless you think Britain’s 19th century economic dominance was artificial too.
After all, a small island leading the world in industrialization and urbanization depended on the UK’s ability to export tens of millions of surplus people to America, Canada, Australia, NZ, etc. If the world had cracked down then on mass migration from the British Isles, England’s Victorian heyday would have quickly devolved into a Malthusian hellscape of overpopulation, famine, class war, revolution. No country in history has benefited more than Britain from open borders; only difference now is your gains are flowing in the opposite direction.
Regards tax
Please check out the proposals by Harry Lambert & Gary Stevenson. Their proposals for UK tax changes make sense: rebalance the burden from income based to income & wealth based.
(YT is stopping me from adding links!)
You can't tax wealth it is not real. You cannot even measure it. Income and transactions only. When wealth is realised, made real, gains are taxed already. We all rightly ridicule the Window tax which is a stupid wealth tax idea. Our problem is far too high incomes/pay leading to excessive house prices and grossly over expectant lifestyles.
With all due respect, what you're saying isn't true.
Some countries levy taxes directly upon wealth holdings, while others only tax transfers of wealth.
@@HA-bc4pc That some places do it does not mean it is fair, accurately counted or reasonable. Like our old Window tax. So tell me how do you measure a person's wealth to tax it? Even the Times rich list is very approximate guesses for well known wealthy people! Given houses, shares, art, change in value by the second, by opinion of random valuers etc. What of random items perhaps family heirlooms, not realised were of great value? Perhaps suddenly discovered by some intrusive tax assessor. So you have had this unknown Van Gough for 50 years! You owe us back tax equal to 2 times its current sale value for owning it all those years.
But ok make it easier, tax owning an Apple I phone, sign of wealth. Or over a certain engine size car.
The entire concept is farcical, unfair, unreasonable, and plain wrong. Basically a nasty envy tax from spendthrifts that never save preserve and build, generation to generation perhaps. Oh and the public regard the evil Inheritance Tax as the most unfair tax, such that even the government mooted ending it. No one normal regards the theft in 'salami slices' of tax of their 'stuff' they own, bought and paid for with taxed money, or just family possessions, as remotely acceptable. Envy and spite is not a basis for taxation.
Great video and it shows what needs to be done. The only way to progress is to be 100% business friendly as Ireland is, slash business taxes and massive investment will come onto the Country. I have been in business in the UK over 40 years and there has never been a worse time to invest here there is no point in investing if profit's are all taxed away
Slashing business taxes means increasing taxes for PAYEs and reducing public services. It also means less infrastructure, for example
Why should I care then for slashing taxes for businesses which overall don't struggle?
@@barbthegreat586never mind Gary, the only business he is in is spreading bullsht.
Tomorrow he will have been a farmer or school teacher if that fits that days narrative better.
@@barbthegreat586 The Welfare State is the problem, just take “Our inactivity rate in the UK is 21.95%. In Iceland it is 13% and in the Netherlands it is 14%,” the Chancellor said last week, referring to the share of working age adults who are neither in work nor looking for a job. We have created a society of people who don't want to work or contribute.
Angela Merkal told the World in 2012 “If Europe today accounts for just over 7 per cent of the world’s population, produces around 25 per cent of global GDP and has to finance 50 per cent of global social spending, then it’s obvious that it will have to work very hard to maintain its prosperity and way of life,” Ms Merkel said in the interview.
“All of us have to stop spending more than we earn every year.”
This is the UK and EUs biggest problem
some question can be answered by non - dom residents - who are not paying taxes ...
the Problem is weak management with wrong people in the wrong jobs, the "best" being passed over for friends and family so the gravy train rides on, it needs to be derailed and a rebuild at grass roots start with a wealth tax to free up funds for reinvestment, the ones with nothing have even less while the ones with are increasing, make them invest in the economy for the good of the country by a tax, if they want to leave let them as we would not need them, after all it our children's future that is at stake
I always get a good laugh out of those per capita GDP figures when I see how much better Ireland fares vs. UK. Good craic, as the Irish would say. I might try to emigrate to Ireland...
The Irish economy is basically Thatcherite (though Irish politicians would never use that word). Government spending is 25% of GDP (compared with 45% in the UK), there's no single payer health system, and corporate taxes are the second lowest in the EU.
John Milton Keynes was proved wrong eventually
How long can economic theories stay separate from climate catastrophe ? Just commentary on how supply could not meet demand and we all died out ?
Britain will continue to underperform due to its undemocratic political system. The same two parties have an oligopolistic monopoly on governance. Both have been incredibly incompetent. Rather than First past the post, a proportional representation would achieve far more accountability in government and allow for a meritocratic economy.
At the moment the main two political parties simply act for the benefit of vested interests (esp Tories) and not for the citizens of Britain.
Right now the OECD's best performing economy is the USA, and the US two-party system is even more entrenched than the UK system.
@@georgesdelatour"best performing" on the surface when all you focus on is gdp growth.
But agree with you that the political structure is not the one cause of all trouble, it's a multitude of issues plaguing the UK.
@@ab-ym3bf Fair point about the USA. GDP isn’t everything (but it isn’t nothing either).
One thing everyone does on these posts - probably including me - is try to make an economic case for what’s really just a political preference. I think our first poster wants Proportional Representation for political reasons. I don’t think he’d abandon that cause if it could be somehow proved that PR had no effect on economic performance or was even mildly negative.
Even with some dodgy statistics, there’s really no doubt that China has managed spectacular economic growth under one-party dictatorship. If anything, it’s done much better than India has with the world’s largest democracy. Does that mean I’d like the UK to be governed like China? No, because economics isn’t everything.
@@georgesdelatour The US is a completely different case, it's the reserve currency and it is also endowed with natural resources. Britain is more like Singapore that has to have a highly focused and effective government run for the benefit of the people by being focused on commerce. Singapore in the 1970s was third world and received foreign aid from NZ, now because of highly focused and effective government it is one of the best economies in the world.
Britain is hemorrhaging talent as it emigrates and is replacing with far lower talent. Take it from someone who has been a management consultant in both Britain and the Antipodes.... The UK is really falling behind.
@@John-ou4rm I think the UK “brain drain” is real. I watch the Lex Fridman podcast. He constantly interviews smart guests at the top of their field - the kind of people who might win Nobel Prizes, if they haven’t already. Many talk with an English accent. These have all been “poached” from the UK by US universities and research institutes which can offer them better pay and more possibilities to excel in their field. I don’t know what we can do to make those people stay in the UK, to be honest.
At a less intense level of achievement… We pay a lot of attention to immigration but not enough to emigration. I looked into this maybe ten years ago, so my information might not be up to date. Back then, something crazy like a third of all UK emigrants were heading to Perth in Australia. And the typical emigrants to Perth were recently married couples aged around 30, both with degrees. They preferred the Ozzie weather, and we can’t win that one. But it also seemed that the chance to own a house big enough to raise a family was felt to be better there, the quality of schools (and school pupils) was felt to be better there, the crime risks were felt to be lower there, and so on. I think the loss of these people is really bad for the UK. They would be net taxpayers, and their children would likely be too. Making the UK more attractive to these people should be a priority.
I’m not sure what any of this has to do with Proportional Representation. I see lots of problems with PR in the UK:
1) Countries like Germany have a 5% threshold to enter Parliament. But we can’t have that, because it would mean no Northern Ireland parties, no Plaid Cymru, and potentially no SNP in Westminster. Much as I might like that, no government could sell such a system. So we’d have to go for the full-strength Israeli version of PR.
2) I suspect we’d very quickly have an Islamic party. I like that mischievously, because it would mess things up a lot for the Labour Party. The UK already has more Muslims than Northern Irish and Welsh combined, and by the next census will have more Muslims than Scots. But the idea of Labour or the Conservatives having to do a deal with an Islamic Party to form a government feels very Michel Houellebecq. The alternative would be doing a deal with the SNP for another IndyRef. None of these weird coalitions are likely to result in the British answer to Lee Kuan Yew running the country.
Childcare costs need to be reduced..!
Growth and jobs is what is needed. Why would any company invest in Great Britain when they is lower corporate tax rates right next door and in the USA ? 😵💫
Many economists believe that the world's capitalist economic system is slowly collapsing. Capitalism has already peaked. Marx predicted that the world's capitalist economic system would eventually collapse because it is inherently flawed and chaotic.
people are waiting for some kind of return to normal, but there will not be.
get used to this. it will continue for the best part of 40 years.
What the heck does it always come back to ‘public services’ needing more investment? This is UKs obsession. Narrow thinking!
Theres about 30 million economically inactive brits lounging around.The only growth area is imperialism to fund them.
Anyone old enough to remember the days when 'privatisation' of utilities was sold as the means of promoting greater competition, driving efficiencies, encouraging much needed investment and driving prices for consumers down?
Utter BS on stilts of course, but it was a popular narrative that essentially fed into people's ideological fervour, greed and/or blissful ignorance at the time.
They should probably rejoin the EU. Single biggest win for Ireland in the past decade
😂😂
The millions of people that benefitted from the handouts during the covid crisis enabling them to keep their jobs have a short memory.We went through a financial crisis,then brexit,then covid now Ukraine.People thinking they were getting a tax handout after all that we’re kidding themselves.We are joining the CPTTP. we will reep the rewards from it.Increasing government borrowing to fund a handout when we have debt mounting up would’ve been suicide.Just my opinion,Not looking for an argument,
"we are joining cptpp" with the massive benefit of 0,02% growth in 15 years....
So the UK economy is somehow comparable to France's.
Because Ecomomy gone too down Futur gone too
No.
Spoiler: no
only if the UK dumps the double espressos for a large can of red bull 😁
Very dubious privatising strategically important businesses such as water, energy, rail etc.
The UK economy can not recover with so many economically inactive people! The population is far too large!
YT ALGORITHM DOESNT AFFECT VERY NEGATIVE COMMENTS :)
Noooooo!!!!!
'Is There Any Hope For The UK economy?' depends on the time frame!
Is There Any Hope For The UK economy in the next 20 years - no. 🤣🤣😉
About TH-cam supports negativity - your videos always pop up in my suggestion list as soon as you post them! What does that say about you??
(I have no problem with that - some of your videos include really goof ideas, especially the latest ones; you clearly have changed your mind and become more realistic).
Only if we get back into the SM and CU - even if we don't fully rejoin the EU; because being in these two things is key to a more prosperous, and better future.
Trying to align ourselves more with America, and their standards will, I believe, end up breaking this country.
It's THAT important that we get back. into the SM, and CU. There's too much at stake here.
And we simply don't have the strong manufacturing base to sustain ourselves in the long term; nor do we have the global export figures (exc. the EU) to overlook this vital market by trying to chase somewhere where we'll never have the same successful export levels - like the US, or India.
When will you brits stop fantasising about things that are not possible, like SM/CU membership, and start focusing on what is actually within your reach?
There is no quick solution for the UK's fundamental problems nor its self inflicted brexit problems.
@@ab-ym3bf .....I didn't vote for this madness - just so you know.
We're not all delusional 'headbangers'. I'm just stating the facts - and YES, we do need to be back in both. Trying to align with America is total insanity.
But I guess my fellow Brits (Brexit voters at least) will only realise this when it's too late, and Northern Ireland reunite with the R.o.I. That's going to happen btw, it's just a question of 'when'. Likely some time in the 2030's.
Brexit headbangers will deny this all day long, but in doing so they are denying the reality.
I have to tell you a disappointing fact. UK cannot join the sm and cu as a third country. Only EU members are in the sm and cu. 3 EFTA members are also in the sm through the EEA agreement.but the articles of the EEA treaty blocks third countries.
Privatisation of having sex is a disaster in UK
What Future of England already gone with Economy gone too down cant Control that day by day getting down Eeconomy
Make Scotland independent, copy scandi. Problem solved. High tax high value. Not like uk high tax low value
Of course there is hope, if it rejoins EU or at least the single market.
Except there is no joining the SM, and joining the EU is outnof the UK's hands and will take decades.
So better find a sparkle of hope elsewhere.