tried desperately to come to terms with perfor- aird betweeo 1979 and cary 1981. utu uclwcc] Many had failed. which was less exposed to international competition had fared far better.
Higher spending has so far provided little respite for manufacturing, as consumer abroad for their new TVs and videos. latest Imports satistied about halt the cense in home recovery penod markets to sell Japanese VTRs is basis ior a sustained recovery squeeze on manufacturing is reflecter by the replacement of a 'traditional' surplus on UK with a defecit. Between 1979 and 1983 imports manufactured creased bv 20 per cent manufactured trade fell from a surplu of £1.2 billion to a deficit of £5 billion Had it not been for the North Sea oil revenue this cherad manufacturing trade would have posed House severe problems. The Bank of ungand have estimated that about 25 per cent of LC WIL OULDUL OVC LICooL Lw. years is attributable to North Sea production hit The higher spending also more to lower saving than to higher inlevel. comes, and people cannot run down their savings indefinitely narofauring his has apt up by. a e COe CAeN Obsed phenomenal 17.5 per cent since mid 1981. The crash compelled companie: to restructure to survive. ment made it easier to do so by weakening union opposition. sacked speed-up fewer workers now produce only slightly fewer goods.
The growth of labour costs per item produced has been slashed to only 2.3 per cent in 1983 quarter in that year. was Higher profits, provided by Lawson's Budget to start investment projects allowances 1986, led the Chancellor and others to expect a surge in investment. And with world trade forecast to grow modestls petitive, exports could provide a fur1979 2nd quarter 1981 2nd quarter -1981 2nd quarter -1983 4th quarter - 6.9 - 12.6 - 17.4 13.8 9-30 ther boost.
and early 1981. Treasury's maintain The service sector off pressures mereds e looked pressure demand over the Bullding new superno The quated numerically manufactured goods inhe balance Or Germany's.
deficit Led with a 25 profits in 1983 owed vestment more dismal.
years UK probably UnemployWorkers were Far HOOSCO . Profits jumped by a and the incentive UK's before generous would are abolished in April present. crisis '50s and But, +5.8 +7.7 +4.7 +16.5 ing - 7.8 +24.5 +8.4 + 17.5 one centrist But productivity growth is unlikely momentum Even the propaganda sheet, Economic Progress Report admits that: 'Some of the gains were probably oneresponses the severe cost pres and 188, leading to the closure ol manufacturers some ot the least efficient units... thi:
has now eased the productivity (March/April 1984).
Much plant and equipment is antiIn 1980 ici example controlled machine tools accounted for only 14 per cent of UK machine tool production, compared to the 50 per cent of Japan's and Wes!
UK capital could only compete effectively if it invested on a huge scale But as the Economist noted, when facper cent increase in their companies: 'could find little better to do with their money then store it in bank deposits and other short term financial assets'. Whilst total insisce mid-1981 il remains well belene risen by 16.5 the average of the years 1973-79.
bre SLovnaac umme s ever There scrapping has exceeded investment for the last three although figures for late 1983 and 1984 show some improvement. The has less manufacturing plant and machinery today than at the lowest point of the crash. Capitalists are reluctant to invest because they can not see any money in it. Since the early 1960s the pre-tax rate of profits outside the North Sea has declined by some ten percentage points. In 1980-81 it stood at little more than four per cent. Even after the marked jump in 1983, the rate as oly i he poere on the short-term economic prospects do better backin Brittan's judgement than Lawson's. But it woulc be a gamble. Forecasting is dicey at the best of times, and never more so than at Minor upswings, based largely oi stockbuilding and consumer and hous. ing credit, are in any case almost irrele stabilishing the kind of conisions to Thatcher is nowhere near to achieving that.
that is not to say she won't Likety to eyain above thre milton eo on trying. With unemploymen! many years, management will continue to press for major changes in the work realism', ublic relations jargon for the fear tha ligh levels of unemployment engende is not going to be given up lightly Economist: 'If Arthur Scargill loses we are heading for a new pattern. But if he wins, all bets are off.