To begin with what most of us do, retailing and eating and drinking out became a key sector of the economy and much of it is owned by either firms or indirectly by financial interests that are outside the UK. It is not just those sectors, but in other now regarded as key activities, Finance, Tourism, Entertainment and Property amongst them.
This extends to most of our public utilities, transport, other commerce, industry and many of the minor activities. Referring to my classification of the structure of the economy as divided between the Taxable, The Alternative and The Illegal, then a great deal of the surpluses generated from the Taxable Economy alone find there way out of the UK.
Additionally, so much of ownership is vested in complicated structures of companies to govern and deal with the financial matters that the great majority of the real economy is seen as a basis for meeting financial targets. The monies extracted are then too often channelled into speculative or risk finance.
Consequently much of “growth” is paper growth, so who really benefits?. According to reports the distribution of this into individual incomes in the last decade or so is now becoming very different from the late part of the 20th Century.
Not only are the gaps between the incomes of those at the top compared to the ordinary employee far bigger but there is an increasing concentration of “wealth” into many fewer hands. A number of these in London, which is central to this, are not UK citizens and nor do they retain much of the money in this country for real investment for the future.
A good deal of public sector spending is alleged to be “investment” when it is not; it is consumption, some of it at the expense of productive investment. Also, much private spending is little better and very often is simply taking in each other’s washing. How many ordinary people put money into long term projects other than property, itself an unreliable form of wealth?
As I have commented before the more difficult issues arises from how much has gone into the Alternative and the Illegal Economies? My view is that in the last two decades a great deal has and the proportions have expanded substantially Neither of these areas of economic activity do much to create the basis of real growth and moreover remove what might have been real investment funds from the UK.
There are other areas where large sums go from the UK economy in ordinary spending amongst those with middling and lower incomes. In fact if you look at what household money is actually spent on a great deal comes from abroad, often including the chicken, potatoes and peas on the dinner plate.
If we compare all this to the actual real workings of other economies such as those of France and Germany and others it is easy to see why growth is sluggish. The nightmare is that the London Politics and Media see only the paper and debt fuelled consumption parts of the economy as a way of generating financial statistics that may look like growth but are far from in any true economic reality.
There is another and darker side to the way the financial potential for the future flows out of the UK. Bluntly it amounts to financial looting of the UK by others and this is inextricably linked with international corruption and a web of activity in jurisdictions that enable secrecy and associated malpractice to thrive.
Most of the undeveloped world has suffered from this and their problems are growing Back at home in the UK to put it at its simplest, trying to manage the economy on the same basis that most Premiership football clubs seem to be run is just not going to work.
Is the UK due for relegation?
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