North Sea Oil - Are We A 3Rd World Country Without It?

[Si1]

Soooooooooo.....

http://www.telegraph.co.uk/finance/comment/edmundconway/6505670/North-Sea-oil-is-dragging-us-into-the-red.html

will the UK diversify into alternative exports - industry, innovation - in time to deal with the demise of North Sea Oil?

Or are we gonners?

[fluffy666]

Soooooooooo.....

http://www.telegraph.co.uk/finance/comment/edmundconway/6505670/North-Sea-oil-is-dragging-us-into-the-red.html

will the UK diversify into alternative exports - industry, innovation - in time to deal with the demise of North Sea Oil?

Or are we gonners?

Might actually help. The combination of oil and the City has acted to squeeze out the rest of the economy over the past few decades; maybe other industries have a chance now.

[gimble]

Soooooooooo.....

http://www.telegraph.co.uk/finance/comment/edmundconway/6505670/North-Sea-oil-is-dragging-us-into-the-red.html

will the UK diversify into alternative exports - industry, innovation - in time to deal with the demise of North Sea Oil?

Or are we gonners?

Have you heard of the term 'The Dutch disease'? This was a term describing how the vast revenues Holland made from north sea gas ended up crowding out their manufacturing industries as the exchange rate surged in the 60s and 70s no the back of the commodity exports. There's no doubt that the UK has suffered from this to some extent, as the pound was supported by oil revenues at a level that was not conducive to manufacturing given our productivity levels and so on. It's no coincidence that the UK was blessed with large oil wealth and that it has also seen manufacturing shrink as a share of GDP faster than any other Western European nation. There is no doubt in my mind that in the next couple of decades our standard of living will again fall well behind France, Germany & Italy as it will take time for us to get used to not being able to pump money out of the ground.

[Neil B]

This is just one of the many factors that is pushing the UK down the list of Worlds most prosperous countries. We dont manufacture anything, we dont export anything, our tourism is rapidly declining as all the traditional tourist spots (largely seaside towns) are used as dumping grounds for sub working class benefit claimants. Then we have a growing 20 year skills gap of engineers, scientists, doctors, nurses, IT proffessionals etc etc due to the prefered option of school leavers to go to uni to study the easiest degree possible.

Edited November 5, 2009 by Neil B

[non frog]

....

will the UK diversify into alternative exports - industry, innovation - in time to deal with the demise of North Sea Oil?

....

No. As the article explains the UK is wedded to the myth that the deregulated finance sector was the actual engine of prosperity. This myth will cause many to clamour for further deregulation and unravelling of "red tape" to reinvigorate the "engine of the economy". By now it should be painfully clear that the finance sector is corrupt and dishonest and that unregulated it will implode (again) requiring a bail out by the taxpayer. Individuals might do well (Mr Goodwin for example) but the public will fare less well. The oil revenues have been wasted, firstly by the Thatcher administration and latterly by Blair, the former also having thrown away the money from mass privatisation. Neither of these can be repeated. Any new industry or revenue raising activity will require venture capital at a time when the UK coffers are dry and state borrowing is beginning to reach a point where the repayments are a brake on development. The UK's world record personal indebtedness is no doubt a brake on the much needed entrepreneurial activities.

No the UK will not become a third world country. However, it will slowly fade as an important EU member state and as a G7 member. The north-south divide will become stronger as the UK industrial heartland fails to find mass employment for the working class other than low paid work (Mrs Thatcher's dream of the "Hong-Kong of Europe" may yet come true). The overheated London property market will carry on overheating as jobs gravitate there. We Brits muddle through, its our strength. The UK will muddle through. Cameron will win the next election and the City will rejoice. The economy will tank, crime will rise, unemployment will rocket and everyone will hate the new government. It will be as big a disappointment as Blair was.

There is no Armageddon coming. More of a dull fart really. Lets hope so anyway

[gimble]

This is just one of the many factors that is pushing the UK down the list of Worlds most prosperous countries. We dont manufacture anything, we dont export anything, our tourism is rapidly declining as all the traditional tourist spots (largely seaside towns) are used as dumping grounds for sub working class benefit claimants. Then we have a growing 20 year skills gap of engineers, scientists, doctors, nurses, IT proffessionals etc etc due to the prefered option of school leavers to go to uni to study the easiest degree possible.

Last year the UK exported some 220 Billion pounds of manufactured goods. This idea that we don't manufacture anything is ignorant and is an opinion formed by people (usually in the South) who just look at the badge on the front of cars that they see and conclude that nothing is made in the UK. Go and take a train from Birmingham to Manchester and look out of the window. You'll see mile after mile of factories. However, what is certainly true is that we import more than we export and also that our manufacturing base is smaller than countries like Germany or Japan. But to state that we make nothing is plain wrong.

[R K]

No. We are an EUSSR province.

Didn't you get the memo?

[ken_ichikawa]

Probably would be, in that we have salted the earth for businesses so much over the past few decades that the UK is actively business hostile with the tons of red tape...

The days of innovation and invention are over, imagine Captain cook , oh wait Ensign please perform the health and safety risk assessment before we go onto that island (though this may have helped him not end up in a cooking pot).

[non frog]

Last year the UK exported some 220 Billion pounds of manufactured goods. This idea that we don't manufacture anything is ignorant and is an opinion formed by people (usually in the South) who just look at the badge on the front of cars that they see and conclude that nothing is made in the UK. Go and take a train from Birmingham to Manchester and look out of the window. You'll see mile after mile of factories. However, what is certainly true is that we import more than we export and also that our manufacturing base is smaller than countries like Germany or Japan. But to state that we make nothing is plain wrong.

This is absolutely correct. However, one of the big changes from, say, 20 years ago, is that many of these manufacturing companies are foreign owned. Nissan for example export the UK produced cars to mainland Europe but the profit from this activity goes to Japan. This is, of course, offset by the businesses that are owned by UK investors but based elsewhere. Similarly what has changed in recent times is the ease with which manufacturing can be relocated to low cost areas. This latter point drives down industrial wages for low skilled assembly workers and in so doing reduces the spend of that social group.

What is clear I think to everyone is that the last ten years of HPI have allowed large sections of the UK public to borrow money against their property in order to boost their spending power. This has driven GDP growth and created a "fools paradise" of prosperity. Thus the UK now has higher personal indebtedness than any other developed country. Low paid manufacturing jobs are not going to bail out this situation.

Back to the original topic we do not have another North Sea Oil find, or privatisation boom to pump billions into the economy. We have played the picture cards and the trump cards. Maybe QE will finesse another winning round, but even if it does we must accept reality, even if you win the overall game you lose a round or two along the way. The losing rounds are the ones coming up next.

[blankster]

Might actually help. The combination of oil and the City has acted to squeeze out the rest of the economy over the past few decades; maybe other industries have a chance now.

Like, for instance, tourism and property development?

This idea that we don't manufacture anything is ignorant and is an opinion formed by people (usually in the South) who just look at the badge on the front of cars that they see and conclude that nothing is made in the UK.

We only make things that aren't high profile.

There are no British mass-market manufacturers of cars or lorries, or of railway locos, aircraft etc. People don't tend to get emotional about industrial measuring equipment or flat-pack garden sheds!

All the mainstream vehicle manufacture here is in the hands of foreign-owned companies.

There are a few small players like Morgan or Bristol but they buy in their engines, gearboxes etc.

One quiet British success story is Modec electric vans, who are planning to expand into the US market.

Edited November 5, 2009 by blankster

[babesagainstmachines]

3rd world countries are generally the ones with lots of natural resources that can be dominated by elites. We will be less third world when the oil runs out as the elites here will have to return to exploiting labour to make money, which tends to be better for the majority.

[Cogs]

Yes, there would have been no recovery from Maggie's ludicrous economic ideas in her first term.

[Executive Sadman]

We're too big to fail.

India and China will bail us out.

Hopefully.

[yellerkat]

Like, for instance, tourism and property development?

We only make things that aren't high profile.

There are no British mass-market manufacturers of cars or lorries, or of railway locos, aircraft etc. People don't tend to get emotional about industrial measuring equipment or flat-pack garden sheds!

All the mainstream vehicle manufacture here is in the hands of foreign-owned companies.

There are a few small players like Morgan or Bristol but they buy in their engines, gearboxes etc.

One quiet British success story is Modec electric vans, who are planning to expand into the US market.

One good thing is Britain's role in automotive electronics, which form an increasing percentage by value of the average car.

[Cogs]

One good thing is Britain's role in automotive electronics, which form an increasing percentage by value of the average car.

Perhaps something more literal would help.

There is a reason 10 out of the remaining 11 teams are all based in the UK and that the new "Malaysian" and "American" teams are also quietly setting up shop here whatever they might claim. Its about people and skills. When I did some consultancy for a well-known "German" car company I arrived there a bit nervously only to find everyone there was British. I dare say a way will be found to sacrifice what is left for the benefit of spivs though.

[kzb]

A fair proportion of UK is already 3rd world ! For decades since Thatcher we have had something like 1 in 5 households with no-one in work and mass unemployment masked by finding any excuse to fiddle the figures. When public sector and benefits get cut after the next election, you could see shanty-towns coming into existence.

This development is made more likely because we have fair proportion of immigrants who are from just such a background. Once they are stared by the immigrants the Brits will also move in.

Edited November 5, 2009 by kzb

[Cogs]

Like, for instance, tourism and property development?  

We only make things that aren't high profile.

There are no British mass-market manufacturers of cars or lorries, or of railway locos, aircraft etc.  People don't tend to get emotional about industrial measuring equipment or flat-pack garden sheds!  

All the mainstream vehicle manufacture here is in the hands of foreign-owned companies.  

There are a few small players like Morgan or Bristol but they buy in their engines, gearboxes etc.

One quiet British success story is Modec electric vans, who are planning to expand into the US market.

I simply don't recognise the picture you paint re: railways and aircraft.

[Si1]

Like, for instance, tourism and property development?

We only make things that aren't high profile.

There are no British mass-market manufacturers of cars or lorries, or of railway locos, aircraft etc.

ludicrous nonsense

GEC-Alsthom - the largest rail automotive maker in the world, has major operations here. In fact I only recently travelled on the high speed Stockholm airport express which is made in Birmingham , for example.

And UK is major partner in Airbus and Aurofighter. Rolls Royce - 2nd biggest aerospace engine manufacturer in the world. Westland helicopters (may be foreign owned now dunno)

Edited November 5, 2009 by Si1

[babesagainstmachines]

ludicrous nonsense

GEC-Alsthom - the largest rail automotive maker in the world, has major operations here. In fact I only recently travelled on the high speed Stockholm airport express which is made in Birmingham , for example.

And UK is major partner in Airbus and Aurofighter. Rolls Royce - 2nd biggest aerospace engine manufacturer in the world. Westland helicopters (may be foreign owned now dunno)

Screw all that. What we need to prosper is to make shit clothes that fall to bits after three washes. And plastic toys.

[Si1]

Screw all that. What we need to prosper is to make shit clothes that fall to bits after three washes. And plastic toys.

genius.

[OnlyMe]

ludicrous nonsense

GEC-Alsthom - the largest rail automotive maker in the world, has major operations here. In fact I only recently travelled on the high speed Stockholm airport express which is made in Birmingham , for example.

And UK is major partner in Airbus and Aurofighter. Rolls Royce - 2nd biggest aerospace engine manufacturer in the world. Westland helicopters (may be foreign owned now dunno)

Alstom - French.

Airbus/Eurofighter - BAE still there, most of the British instrumentation/components companies now directly foreign owned.

RR - Best engnes in the world.

Westland - Finmeccanica.

Of course many people will say it doesn't matter who owns these, that is until it does.

[scottbeard]

will the UK diversify into alternative exports - industry, innovation - in time to deal with the demise of North Sea Oil?

Or are we gonners?

A fair proportion of UK is already 3rd world !

I'm pretty sure based on your comments that you have never been to a third world country.

UK GDP per head is about $36,400. In Somalia it is $800. (Source: Wikipedia)

Browse the internet for the sort of pictures Bob Geldof highlighted and tell me honestly that you see the same things daily in "a fair proportion of the UK"

If we had to reverse 50 years of living standard improvement, and return to the 1950s, it would be light years ahead of the 3rd world in 2009.

[Guest P-Diddly]

I'm pretty sure based on your comments that you have never been to a third world country.

UK GDP per head is about $36,400. In Somalia it is $800. (Source: Wikipedia)

Browse the internet for the sort of pictures Bob Geldof highlighted and tell me honestly that you see the same things daily in "a fair proportion of the UK"

If we had to reverse 50 years of living standard improvement, and return to the 1950s, it would be light years ahead of the 3rd world in 2009.

Just shows how much money there is in piracy.

Yes, '3rd World' and 'UK' needn't be in the same sentence.

But don't become complacent. Many civilisations have collapsed over the centuries. Infrastructure decays, societies change, economies collapse . . . Right now all the UK needs to do is make sure it can support itself in basic human needs if it really does go a bit pear.

[ZeroSumGame]

Alstom - French.

Airbus/Eurofighter - BAE still there, most of the British instrumentation/components companies now directly foreign owned.

RR - Best engnes in the world.

Westland - Finmeccanica.

Of course many people will say it doesn't matter who owns these, that is until it does.

Wrong.

BAE Systems, Europe’s largest defense contractor, said its decision last week to sell its 20% share in commercial aircraft producer Airbus was based on the company’s expectation that the commercial aerospace cycle would peak in 2008.

http://www.forbes.com/2006/04/11/airbus-boeing-0411markets03.html From 2006.

Agree with the rest though.

[GrinAndBearIt]

In the University city I live in, and living in studentland, I've seen in the last 5 years a veritable production line of Chinese students coming and going. Our thriving higher-education sector is training the people who will design and build the products of the future, exporting the technical knowledge and innovation that we're rightly famous for. How long before the next iPod is invented, made, marketed and exported solely in the Far East?