fear of the future

[Josquius]

Hard to say.  I mean, do you hold Thatcher responsible for cutting off the useless miners, or do you hold decades of British governments responsible for allowing it to get to that point?  Either way, the argument that they were owed a lifetime of work mining coal at the expense of the productive parts of society isn't going to convince many.

I don't think they were owed a lifetime of work no but they certainly didn't deserve to have the entire industry destroyed over night like that and very little in the  way of alternatives provided for them. Winding down the British coal mining industry should have been a far more gradual and selective process, as was already ongoing when Thatcher popped up (in 1980 coal mining employed roughly 1/3 of the people it did in 1960).
Even if we consider we do want to try and give them a lifetime of work...costs wise I'm really not so sure this would have been more than the cost of having broad swathes of the country devestated. The mines really weren't drawing as much as people think in the way of subsidies, in the late 70s they were allowed a yearly borrowing of under 2 billion. Even being pretty nasty in our translation into modern money (always iffy) that's only 8 or 9 billion. It sounds a lot but the savings from the benefits budget would be quite a bit bigger when you consider its not just the miners you're helping here and that this is an absolute max as set in law, not what they actually were given year to year.
And that's just considering pure economics let alone the human cost.

[MadImmortalMan]

except why would you expect a former company town to recover when the company shuts down?

Maybe that seems odd in the UK, but I know of dozens of examples of small towns devoted to a single resource-based industry that were devastated when that industry closed.  Some survive, even thrive, by converting to tourism, but others survive zombie-like on government assistance.

What we've "learned" is that it doesn't make sense to build a town around a mine - when new mines are opened up these days they just keep the workers in camps, and take them home every weekend (or whatever their shift pattern is).

That's been happening for millennia. People desert towns that are no longer viable all the time, and it's been happening since the beginning of human settlement. Only now do we subsidize them and let them linger.

[Martinus]

Kraft/Cadbury wouldn't come under that but it is frustrating that the government got an undertaking that a British factory would be protected and then, once the merger's complete, announce that actually it'll be closed after all because an alternative's too close to completion.  It's also annoying that Parliament's been treated with a sort of contempt in all this because Kraft won't go to any select committee.

Why keep the inefficient factory in the UK, when they have several ones in Poland that can manufacture Cadbury brand instead?

Especially, as Poland is within the EU - so if you are unhappy with this, it means you don't agree with the very premise at the EU's foundation.

[Martinus]

Canada is part of the WTO though and France is part of the EU with the example of Danone were the French government passed a law that would allow the government to declare a company a 'strategic interest' and prevent takeovers.  I don't think the UK government would even do that for a genuinely strategically useful company like BAE.  And I'm relatively sure that national governments can act in ways to shape a merger, or to try and hobble together a national takeover, that's within the letter but not the spirit of the rules.

Similar rules have been challenged several times before by the EU Commission, and in most cases successfully. So I am not sure how making populist rules that will not stand the test of legality is a good thing.

[Richard Hakluyt]

The 19th century was a very interesting time in the demography of England. It was not just that the population of the North was increasing but also that the percentage of people living in the North reached a high. In those days, of course, there were no real restrictions on planning and no welfare state; so people flocked to where the jobs were and cheap housing was thrown up for them to live in.

As we all know this expansion was based on some rather low-tech industries. In 1900 90% of the UK's visible exports were in 3 commodities; textiles, coal and ships. As the rest of the world industrialised it was inevitable that these industries would decline as we lost our comparative advantage in them. This process became noticeable c. 1890/1900 and accelerated as the 20th century progressed. As it did English demography started to return to it's usual track.....ie an enormous London and the SE being the economic and demographic hub of the country.

This was interrupted somewhat by the war and, post 1945, we suddenly had a massive state that doled out welfare, had nationalised many of these industries and prevented large-scale housebuilding (via planning laws) in the parts of the country that needed it.

Of course the drift to the South continued, hopelessly uneconomic pits, factories and shipyards were closed..........but the merely crippled continued to operate. Since housing shortages were prevalent there was a disincentive to move, so all this happened at a slower rate than it would have done without government intervention.

Mrs Thatcher's government increased the speed of that process by closing more inefficient industries, they also allowed the £ to rise during a recession (maybe they could not have stopped it?) which meant that we also lost some good firms. That government did not do much about the other side of the equation.............ie provide housing in the South (or permit it to be built).

The way I see it we have spent the past 60 years trying to preserve the distribution of the population as it was c.1900. But, that distribution was itself a highly unusual one. Absent all the governmental interventions I believe that millions currently living in the North would now be living in the South. I also believe that our economy would have been more efiicient if we had permitted this to happen. However, the gloom in the North would have been even greater than in the 1980s and the South-East would probably resemble Los Angeles.........a mere sea of buildings instead of the rather beautiful area that most of it still is today.

So what to do? One of the problems facing firms trying to set up in the North is the shortage of skilled labour. It may seem counter-intuitive but the best place to set up a (generic) new firm is probably London with it's huge pool of talented labour (many of them the best and brightest from the North btw). Try it in Liverpool and you find that all the unskilled jobs will be snapped up but you will have trouble getting people for the good jobs. Some firms have got round this by training their entire staff from the ground up, Nissan in Sunderland did this, but you need to be a big wealthy firm to do that.

The only long term hope, in my view, is if the SE of England effectively becomes "bigger" due to the destruction of distance by improved transport infrastructure and telecomms. There are signs that is happening. I lived in Suffolk a few years back and it was booming, back in the 1950s it was a sleepy poor place, but by 2000 London's tendrils had reached the county and the skilled and talented were moving there, which in turn made starting a business there a better bet.

[Martinus]

And while other EU nations try to do that (like France did over Danone, and Poland over the BPH Bank), they almost always fail so this is nothing but empty posturing for domestic consumption - I don't think it is worth to tarnish your "international business friendly" reputation just for the sake of national polls.

My point is that I think the UK are more globalised in this respect and similarly more comfortable with foreign chairmen and CEO of 'British' firms, I believe the idea of a non-German head of Deutsche Bank's been quite a controversial novelty recently.  So while I sympathise with the French I don't think we need to go whole hog but I think we could be a bit more nationalist on this and I think there are countries that have done more to protect national companies without going fully French.  My impression is that other free market economies like Canada, the US and Australia and EU countries like Germany and Poland have all managed this.  I'd rather be near them than the globalised, neo-liberal mirror image of France.

No we haven't managed. We tried and ended up with a huge egg on our faces. Fortunately, the European Commission prevailed, like it did with the French, the Italians and several other nations who tried this type of nationalist idiocy.

Our banks are managed by Germans, Britons, French, Italians, Portuguese and Japanese. Our "national" telecom is French-owned. What's wrong with that?

There are little things I hate more than "economic nationalism". It's premise is retarded in the first place (the belief that a local CEO or shareholder will be somehow more "patriotic" is born out of some 19th-century style capitalist paternalism that is no longer the case) and the costs of insisting on this (closing yourself to international capital markets in the form of investment, or to being part of a multinational - thus decreasing your efficiency and not being able to benefit from economies of scale) are high.

Not to mention it flies in the face of everything the EU is about.

[Martinus]

The only long term hope, in my view, is if the SE of England effectively becomes "bigger" due to the destruction of distance by improved transport infrastructure and telecomms. There are signs that is happening. I lived in Suffolk a few years back and it was booming, back in the 1950s it was a sleepy poor place, but by 2000 London's tendrils had reached the county and the skilled and talented were moving there, which in turn made starting a business there a better bet.

I think it's an interesting topic for a discussion in itself. I think mid-distance (inter-city) communication may actually decline rather than develop (already there are doubts whether European countries really would benefit from investing in high speed rail for example). International (long-distance) and short-distance (suburban/urban) communication will continue to grow though.

[Josquius]

Distance is a strange one. With decent rail travel Manchester is actually 'closer' to London than it is to lesser nearby cities which may lack such good rail links. Not to mention rural towns....A while ago I actually tried drawing a Newcastle-centric map of the world based purely on travel times, it was strange stuff. Though ugly and ultimately doomed to failure due to my lacking art skills.
Rail is the future IMO, with increasing fuel costs we're going to see a redistribution of the population to more 19th century lines, clinging to the railways to an extent.
One thing which really should be done is transport links in the Liverhull belt should be improved. Manchester might be nothing compared to London but add in Liverpool, Leeds, etc.... and it becomes quite a respectible size really and it should be able to compete internationally.

What Richard says is indeed the way of things but this needs to be fought, not embraced. It just makes no logical sense for everyone to be crowded into one corner of the country. Its unatural and it has lots of problems.
Its not like countries can't have more than one centre, even mid sized ones, Germany does this rather well, as does Japan.

But anyway. Strange this is all getting so far away from the original topic which had nought much to do with Thatcher, the troubles of Britain were just an example/

[Eddie Teach]

A while ago I actually tried drawing a Newcastle-centric map of the world

Maybe Agelastus' sobriquet is misplaced. 

[Josquius]

A while ago I actually tried drawing a Newcastle-centric map of the world

Maybe Agelastus' sobriquet is misplaced. 

Huh?

[Martinus]

One way of counteracting population concentration (if one thinks it's a bad thing) it is to spread central offices around. Norway does it, Germany does it.

No reason why the UK's OFT can't be in Liverpool for example.

[Eddie Teach]

Huh?

Between the patriotic map-drawing, the ESL in Asia thing and the shared love of anime you may be the true "British Tim".

[Josquius]

One way of counteracting population concentration (if one thinks it's a bad thing) it is to spread central offices around. Norway does it, Germany does it.

No reason why the UK's OFT can't be in Liverpool for example.

The UK does it too I believe.
Some major unemployment office is in Sunderland.
Which yes, is quite apt.

Huh?

Between the patriotic map-drawing, the ESL in Asia thing and the shared love of anime you may be the true "British Tim".

Nah, it wasn't patriotic map-drawing. Just alternative data visualisation using a city I am familiar with as a central point.
And I wouldn't say I love anime.
But Agelastus' sobriquet?

[Richard Hakluyt]

Incidentally, this week's Economist has a special report on "the future of work".

http://www.economist.com/printedition/2011-09-10

Haven't had a chance to read it yet, but I'm sure it will have some interesting stuff relevant to the original post.

[Zanza]

I believe the idea of a non-German head of Deutsche Bank's been quite a controversial novelty recently.

The current head of Deutsche Bank is Swiss. The novelty will be that Anshu Jain doesn't speak German and unlike the previous Deutsche Bank CEOs doesn't have close connections to German politicians and businessmen. Because of the importance of political and business connections in Germany for Deutsche Bank, they appointed a German co-CEO. But there was certainly no outside, political pressure to do that, it was a completely internal process within Deutsche Bank. Siemens, Lufthansa, BASF, Bayer etc. all have or had a non-German CEO, so it is not unheard of. But usually the non-German CEOs are from Switzerland or Austria. :p