The previous labour government had already destabilised the economy long before Osbourne
Prudence Brown's "no more boom and bust" relied on the ultimate capitalists unsustainable growth to deliver and fund labour government policies
So all products have a raw material value that is a very sweeping statement, again a product with little labour input does not benefit that much
So that makes you an expert on these matters, I've spent over 30 years working part time with a company that imports and exports goods across 3 continents doesn't make me an expert but you do see how currency volatility can affect costs
Even the Chinese are struggling now their boom has gone bust which is clearly seen in the price of commodities and raw materials due to over production
New Labour spent money based on tax revenues, tax revenues based on the brave new world of banking and services, which we now all know was built on sand. Policies inherited from the previous administration and foolishly contimued by the Labout government. Now whilst spending a bit more money what appeared to be a sustainable way, the economy was doing well. Public services after decades of cuts improved, people had stability and therfore could plan ahead and spent money. Not that I ever agreed with shopping as the ultimate form of driving an economy - I certainly didn't. If I recall correctly the years under Labour were relatively good for most people. I would have to say I was incredibly disappointed that Labour did little to support industry and manufacturing, a great mistake in my opinion as this left us so reliant on the banking and services sector.
Everything starts as a raw material somewhere, whether that be iron ore dug out of a hole in the ground, or a crop in the field. The only exception to this is knowledge based products such as software, and people who just play with money all day long. As a country we seem to have decided to ignore all the relatively well paid factory work that went with that, and kept 7 million people in employment. Down now to 2.6 million.
Am I an expert, maybe not, but during my 20 year full time career in engineering I have worked for companies as big as British Aerospsace and as small as Vortok international, who you will have never heard of. During that time I have built weapons, dental equipment, designed and built production lines, designed built and costed new products, and outsourced work to China ( my last job in engineering and the point at which I decided to retrain as an electrician - you can't ship houses to China). Most of my work has been manufactruing based with aview to reducing costs, whether that be labour or materials. Amoungst other qualifications I have a HNC in Engineering, an MSc in Manufacturing Management and Technology as well as being a certifed ISO 9000 lead auditor. So overall I think I have quite a good handle on product designs and costs, and I do appreciate how currency volatility is a complete PITA at times. But then this has a lot to do witht he simple fact that most manufacturing imports assemblies and widgets to construct products from, all the small companies that used to make these items in the UK have gone, many lost to assest stripping rather than Chinese competition. So what we are really doing is trying to add value to items someone has already added value to, by manufacturing from raw materials. We have lost the capacity to do this ourselves, so will not see the full benefits that manufacturing from raw materials adds.
We have also failed to invest in manufacturing facilities, just look how Germany competes against cheap products. But that is a topic for a far more in-depth discussion.
As for China, I would hardly call 6.9% growth struggling or bust. Name 1 government that wouldn't kill for growth figures like that!
Either way, over the last 30-40 years all I have seen is greater and greater inequality in the wealth distribution of UK citizens, even TM is talking about that. Just look at the rise of foodbanks FFS. My opinion is that further slashing of public spending will lead to further destabilisation of the UK economy as the stable employment that many households depend on is futher undermined. Also attacking things like public health leaves a workforce in worse shape, this will also affect the UK economy. Even the Romans appreciated public health was important, hence all the baths and aquaducts they built. It also means that working people will be spending more time looking after the elderly and ill, instead of earning money, also not good for the economy. Now I would agree that public spending should be financed correctly, and to achieve that, Tax needs to be raised, much of which could be achieved by closing corporation tax loopholes. See link below. And even if that means we end up with 50% tax rates like Sweden, so be it, at least will will have decent sevices and it will be cheaper than trying to buy these services as individuals from private companies. A point I have costed and proved in several previous arguments on this forum.
https://realbusiness.co.uk/law/2013/12/13/six-companies-that-avoid-paying-their-taxes/
